What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-09 compared with 2020-08-06 · 259 added, 283 removed, 845 unchanged (39% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data) Successor Company

September 30,

2020 December 31,

47 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data) Successor Company Predecessor Company

Three Months Ended June 30, Period from May 2, 2019 through June 30, Period from April 1, 2019 through May 1,

2020 2019 2019

(In thousands, except per share data) Successor Company

Three Months Ended September 30,

Revenue $ 744,406 $ 948,338

4 unchanged sentences

Depreciation and amortization 99,379 95,268

Impairment charges 5,378 — —

Other operating income (expense), net ( 506 ) 3,246 ( 127 )

Operating income (loss) ( 159,087 ) 133,688 47,891

Interest expense (income), net 81,963 69,711 ( 400 )

Other operating expense, net 1,675 9,880

Operating income 39,395 140,822

Interest expense, net 85,562 100,967

Gain on investments, net 62 1,735

Equity in loss of nonconsolidated affiliates ( 58 ) ( 1 )

Other income (expense), net ( 1,258 ) ( 9,157 ) 150

Reorganization items, net — — 9,497,944

Income (loss) from continuing operations before income taxes ( 241,059 ) 54,796 9,546,326

Other expense, net ( 1,177 ) ( 12,457 )

Income (loss) before income taxes ( 47,340 ) 29,132

Income tax benefit (expense) 15,228 ( 16,758 )

Income (loss) from continuing operations ( 197,317 ) 38,793 9,446,037

Income from discontinued operations, net of tax — — 1,854,677

Net income (loss) ( 32,112 ) 12,374

8 unchanged sentences

Net income (loss) attributable to the Company per common share:

Basic net income (loss) per share

From continuing operations $ ( 1.35 ) $ 0.27 $ 110.28

From discontinued operations — — 21.63

Basic net income (loss) per share $ ( 1.35 ) $ 0.27 $ 131.91

Basic $ ( 0.22 ) $ 0.08

Weighted average common shares outstanding - Basic 146,152 145,720

Diluted net income (loss) per share

From continuing operations $ ( 1.35 ) $ 0.27 $ 110.28

From discontinued operations — — 21.63

Diluted net income (loss) per share $ ( 1.35 ) $ 0.27 $ 131.91

Diluted $ ( 0.22 ) $ 0.08

Weighted average common shares outstanding - Diluted 146,152 145,840

4 unchanged sentences

(In thousands, except per share data) Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

2020 2019 2019

6 unchanged sentences

Impairment charges 1,733,235 — 91,382

Other operating income (expense), net ( 1,572 ) 3,246 ( 154 )

Other operating expense, net 3,247 6,634 154

Operating income (loss) ( 1,850,471 ) 274,510 67,040

Interest expense (income), net 257,614 170,678 ( 499 )

Loss on investments, net ( 8,675 ) — ( 10,237 )

Gain (loss) on investments, net ( 8,613 ) 1,735 ( 10,237 )

Equity in loss of nonconsolidated affiliates ( 653 ) ( 25 ) ( 66 )

28 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(In thousands, except share data) Controlling Interest

7 unchanged sentences

Shares Special Warrants Total

March 31, 2020 (Successor)

June 30, 2020 (Successor)

61,432,341 6,900,195 78,038,412 $ 9,123 $ 68 $ 2,835,005 $ ( 1,774,974 ) $ ( 562 ) $ ( 3,018 ) $ 1,065,642

7 unchanged sentences

7,263 ( 7,263 ) — — — — — — —

Cancellation of Special Warrants ( 2,982 ) — — — — — — —

Other comprehensive income

— — — — 267 — 267

June 30, 2020 (Successor)

September 30, 2020 (Successor)

63,447,152 6,893,636 76,051,430 $ 9,123 $ 70 $ 2,840,888 $ ( 1,807,086 ) $ ( 295 ) $ ( 3,052 ) $ 1,039,648

8 unchanged sentences

Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

Capital Retained Earnings Accumulated

Comprehensive

1 unchanged sentence

Class A Shares Class B

Shares Class C Shares Special Warrants Total

March 31, 2019 (Predecessor)

32,247,361 555,556 58,967,502 — $ 11,437 $ 92 $ 2,075,025 $ ( 13,330,821 ) $ ( 319,284 ) $ ( 2,562 ) $ ( 11,566,113 )

Net income 2,190 — — 11,298,524 — — 11,300,714

Non-controlling interest - Separation ( 13,199 ) — — — — — ( 13,199 )

Accumulated other comprehensive loss - Separation — — — — 307,813 — 307,813

Issuance of restricted stock

132 — — — — — 132

Forfeitures of restricted stock

( 64,750 ) — — — — — — —

Share-based compensation

— — 1,635 — — — 1,635

Share-based compensation - discontinued operations

614 — — — — — 614

— — — — 1 — 1

Other comprehensive loss

( 788 ) — — — ( 2,705 ) — ( 3,493 )

Cancellation of Predecessor equity

( 32,182,611 ) ( 555,556 ) ( 58,967,502 ) ( 386 ) ( 92 ) ( 2,076,660 ) 2,059,998 14,175 2,562 ( 403 )

Issuance of Successor common stock and warrants

56,861,941 6,947,567 81,453,648 8,943 64 2,770,108 ( 27,701 ) — — 2,751,414

May 1, 2019 (Predecessor)

56,861,941 6,947,567 — 81,453,648 $ 8,943 $ 64 $ 2,770,108 $ — $ — $ — $ 2,779,115

May 2, 2019 (Successor)

Shares Special Warrants Total

June 30, 2019 (Successor)

56,873,782 6,947,567 81,453,648 $ 8,372 $ 64 $ 2,773,147 $ 38,793 $ ( 328 ) $ — $ 2,820,048

4 unchanged sentences

— — 17,029 — — — 17,029

Dividends declared

( 571 ) — — — — — ( 571 )

Conversion of Special Warrants to Class A and Class B Shares 164,310 32 ( 164,342 ) — — — — — — —

Conversion of Class B Shares to Class A Shares 21,623 ( 21,623 ) — — — — — — —

Other comprehensive loss

— — — — ( 499 ) — ( 499 )

June 30, 2019 (Successor)

September 30, 2019 (Successor)

57,670,714 6,925,976 81,289,306 $ 8,372 $ 65 $ 2,790,175 $ 51,167 $ ( 827 ) $ ( 2,035 ) $ 2,846,917

(1) The Predecessor Company's Class D Common Stock and Preferred Stock are not presented in the data above as there were no shares issued and outstanding in 2019.

(1) The Successor Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2019.

2 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(In thousands, except share data) Controlling Interest

14 unchanged sentences

Share-based compensation — — 14,383 — — — 14,383

Conversion of Special Warrants to Class A Shares and Class B Shares

3,003,854 1,345 ( 3,005,199 ) — — — — — — —

Conversion of Special Warrants to Class A and Class B Shares 4,990,132 2,049 ( 4,992,181 ) — — — — — — —

Conversion of Class B Shares to Class A Shares

4 unchanged sentences

— — — — 455 — 455

June 30, 2020 (Successor)

September 30, 2020 (Successor)

63,447,152 6,893,636 76,051,430 $ 9,123 $ 70 $ 2,840,888 $ ( 1,807,086 ) $ ( 295 ) $ ( 3,052 ) $ 1,039,648

29 unchanged sentences

Share-based compensation — — 20,068 — — — 20,068

Conversion of Special Warrants and Class B Shares to Class A Shares 164,310 32 ( 164,342 ) — — — — — — —

Conversion of Class B Shares to Class A Shares 21,623 ( 21,623 ) — — — — — — —

Other ( 571 ) — — — — — ( 571 )

Other comprehensive loss — — — — ( 827 ) — ( 827 )

June 30, 2019 (Successor)

September 30, 2019 (Successor)

57,670,714 6,925,976 — 81,289,306 $ 8,372 $ 65 $ 2,790,175 $ 51,167 $ ( 827 ) $ ( 2,035 ) $ 2,846,917

(1) The Predecessor Company's Class D Common Stock and Preferred Stock are not presented in the data above as there were no shares issued and outstanding in 2019 or 2018.

(1) The Predecessor Company's Class D Common Stock and Preferred Stock are not presented in the data above as there were no shares issued and outstanding in 2019.

The Successor Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2019.

4 unchanged sentences

(In thousands) Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

2020 2019 2019

11 unchanged sentences

(Gain) Loss on disposal of operating and other assets 704 4,755 ( 143 )

Loss on investments 8,675 — 10,237

(Gain) Loss on investments 8,613 ( 1,735 ) 10,237

Equity in loss of nonconsolidated affiliates 653 25 66

4 unchanged sentences

Increase in prepaid expenses and other current assets ( 7,228 ) ( 22,670 ) ( 24,044 )

Increase in other long-term assets ( 654 ) ( 1,591 ) ( 7,098 )

Decrease (increase) in other long-term assets ( 165 ) 2,545 ( 7,098 )

Increase (decrease) in accounts payable and accrued expenses ( 31,343 ) 44,740 ( 156,885 )

2 unchanged sentences

Increase (decrease) in other long-term liabilities 18,723 4,892 ( 79,609 )

Cash provided by (used in) operating activities from continuing operations 102,909 83,201 ( 7,505 )

Cash provided by (used for) operating activities from continuing operations 136,161 263,542 ( 7,505 )

Cash used for operating activities from discontinued operations — — ( 32,681 )

Net cash provided by (used in) operating activities 102,909 83,201 ( 40,186 )

Net cash provided by (used for) operating activities 136,161 263,542 ( 40,186 )

Cash flows from investing activities:

Purchases of investments ( 9,964 ) ( 500 ) ( 226 )

Business combinations ( 12,656 ) — ( 1,998 )

Proceeds from sale of other investments — 765 —

Purchases of property, plant and equipment ( 58,523 ) ( 46,305 ) ( 36,197 )

Proceeds from disposal of assets 1,742 5,344 99

Change in other, net ( 1,735 ) ( 3,619 ) ( 682 )

7 unchanged sentences

Settlement of intercompany related to discontinued operations — — ( 159,196 )

Debt issuance costs ( 4,755 ) ( 11,488 ) —

Change in other, net ( 996 ) ( 2,607 ) ( 5 )

28 unchanged sentences

The consolidated financial statements include the accounts of the Company and its subsidiaries.

Also included in the consolidated financial statements are entities for which the Company has a controlling financial interest or is the primary beneficiary.

Investments in companies in which the Company owns 20% to 50% of the voting common stock or otherwise exercises significant influence over operating and financial policies of the company are accounted for under the equity method.

Also included in the consolidated financial statements are entities for which the Company has a controlling interest or is the primary beneficiary.

Investments in companies which the Company does not control, but exercises significant influence over operating and financial policies of the company are accounted for under the equity method.

All significant intercompany transactions are eliminated in the consolidation process.

6 unchanged sentences

In addition, iHeartCommunications borrowed $ 350.0 million principal amount under its $ 450.0 million senior secured asset-based revolving credit facility (the “ABL Facility”) as a precautionary measure to preserve iHeartCommunications’ financial flexibility in light of this uncertainty.

In the second quarter of 2020, the Company repaid $ 115.0 million of the amounts borrowed under the ABL Facility.

As of June 30, 2020, the ABL Facility had a borrowing base of $ 289.4 million and utilization of $ 235.0 million in outstanding borrowings and $ 41.2 million of outstanding letters of credit, resulting in $ 13.2 million of availability, such availability being subject to further restrictions contained within the credit agreement governing the ABL Facility.

The Company repaid the amounts borrowed under the ABL Facility during the second and third quarters of 2020 using cash on hand and the proceeds from the issuance of the incremental term loan (as discussed below).

As of September 30, 2020, the ABL Facility had a borrowing base of $ 365.6 million, no outstanding borrowings and $ 41.2 million of outstanding letters of credit, resulting in $ 324.4 million of borrowing base availability.

As a result of certain restrictions in the Company's debt and preferred stock agreements, as of September 30, 2020, approximately $ 165 million was available to be drawn upon under the ABL Facility.

In July 2020, iHeartCommunications issued $ 450.0 million of incremental term loans pursuant to an amendment (the “Amendment No.

2”) to the credit agreement (as amended, the “Credit Agreement”) with Capital I, as guarantor, certain subsidiaries of iHeartCommunications, as guarantors, and Bank of America, N.A., as administrative agent, governing the Company’s $ 2.5 billion aggregate principal amount of senior secured term loans (the “Term Loan Facility”) and used a portion of the proceeds to repay the $ 235.0 million outstanding balance under the ABL Facility.

The remaining proceeds will be available if needed to fund iHeartCommunications' future working capital requirements or other general corporate purposes.

2”) to the credit agreement (as amended, the “Credit Agreement”) with iHeartMedia Capital I, LLC as guarantor, certain subsidiaries of iHeartCommunications, as guarantors, and Bank of America, N.A., as administrative agent, governing the Company’s $ 2.5 billion aggregate principal amount of senior secured term loans (the “Term Loan Facility”) and used a portion of the proceeds to repay the $ 235.0 million outstanding balance under the ABL Facility.

IHEARTMEDIA, INC.

2 unchanged sentences

The Company's revenue in the latter half of the month ended March 31, 2020 and in the three months ended June 30, 2020 was significantly and negatively impacted as a result of a decline in advertising spend driven by COVID-19, and the Company's management took proactive actions to expand the Company’s financial flexibility by reducing expenses and preserving cash as a result of such impact.

The Company’s revenue continued to be negatively impacted in the three months ended September 30, 2020.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES Act”).

2 unchanged sentences

For more information on the expected benefits of the CARES Act on the Company's income tax liabilities, see Note 8, Income Taxes .

As of June 30, 2020, the Company had approximately $ 517.7 million in cash, which includes the $ 235.0 million borrowed under the ABL Facility that was subsequently repaid in July 2020 using the proceeds of the $ 450.0 million issuance of incremental term loans.

While the Company expects COVID-19 to negatively impact the results of operations, cash flows and financial position of the Company, the related financial impact cannot be reasonably estimated at this time.

Based on the plans that the Company has put in place, it expects to be able to meet its obligations as they become due over the coming year.

As of September 30, 2020, the Company had approximately $ 713.7 million in cash and cash equivalents.

While the Company expects COVID-19 to continue to negatively impact the results of operations, cash flows and financial position of the Company for some time into the future, the related financial impact cannot be reasonably estimated at this time.

Based on current available liquidity, the Company expects to be able to meet its obligations as they become due over the coming year.

As a result of uncertainty related to COVID-19 and its negative impact on the Company's business and the public trading values of its debt and equity, the Company was required to perform interim impairment tests on its long-lived assets, intangible assets and indefinite-lived intangible assets as of March 31, 2020.

The interim impairment tests resulted in a non-cash impairment of the Company's Federal Communication Commission (“FCC”) licenses of $ 502.7 million and a non-cash impairment charge of $ 1.2 billion to reduce goodwill.

Based on management’s forecasted future cash flows and assessment of market values of the Company’s debt and equity securities, market interest rates affecting the Company’s weighted average cost of capital (“WACC”) and other economic factors, additional interim impairment testing of the Company's intangible assets and indefinite-lived intangible was not required as of June 30, 2020.

The Company performed its annual impairment testing of goodwill and indefinite-lived intangible assets as of July 1, 2020.

No additional impairment charges were recorded as a result of this assessment.

For more information, see Note 5, Property, Plant and Equipment, Intangible Assets and Goodwill .

14 unchanged sentences

ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.

Accordingly, certain charges incurred during 2019 related

Accordingly, certain charges incurred during 2019 related to the Chapter 11 Cases, including professional fees incurred directly as a result of the Chapter 11 Cases are recorded as Reorganization items, net in the Predecessor period.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to the Chapter 11 Cases, including professional fees incurred directly as a result of the Chapter 11 Cases are recorded as Reorganization items, net in the Predecessor period.

Reclassifications

10 unchanged sentences

(In thousands) Successor Company

September 30,

2020 December 31,

2 unchanged sentences

Other current assets 10,876 11,318

Other assets 525 —

Total cash, cash equivalents and restricted cash in the Statement of Cash Flows $ 725,129 $ 411,618

16 unchanged sentences

To develop an estimate of the present value of expected cash flows of notes receivable, the Company used a probability-weighted discounted cash flow model.

As a result of this analysis, the Company recognized an additional credit loss reserve against available-for-sale debt securities of $ 5.6 million, which was recognized within Loss on investments, net in the Company's Statement of Comprehensive Loss for the six months ended June 30, 2020.

The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.

8 unchanged sentences

The Company early adopted this standard, which did not have significant impact on our financial position, results of operations or cash flows.

New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU No.

3 unchanged sentences

The guidance was effective upon issuance and generally can be applied through December 31, 2022.

The effects of this standard on our financial position, results of operations and cash flows are not expected to be material.

The adoption of this standard did not have a significant impact on our financial position, results of operations or cash flows.

NOTE 2 - DISCONTINUED OPERATIONS

6 unchanged sentences

Income Statement Information

The following shows the revenue and income (loss) from discontinued operations and gain on disposal of the Predecessor Company's discontinued operations for the periods presented:

The following shows the revenue and loss from discontinued operations and gain on disposal of the Predecessor Company's discontinued operations for the period from January 1, 2019 through May 1, 2019:

(In thousands) Predecessor Company

Period from April 1, 2019 through May 1, Period from January 1, 2019 through May 1,

Period from January 1, 2019 through May 1,

Revenue $ 804,566

Loss from discontinued operations before income taxes $ ( 133,475 )

Income tax benefit (expense) 50,830 ( 6,933 )

Income (loss) from discontinued operations, net of taxes $ 29,146 $ ( 140,408 )

Income tax expense ( 6,933 )

Loss from discontinued operations, net of taxes $ ( 140,408 )

Gain on disposals before income taxes $ 1,825,531

4 unchanged sentences

Transition Services Agreement

On the Effective Date, the Company, iHM Management Services, iHeartCommunications and CCOH entered into a transition services agreement (the “Transition Services Agreement”), pursuant to which iHM Management Services has agreed to provide, or cause the Company and its subsidiaries to provide CCOH with certain administrative and support services and other assistance which CCOH will utilize in the conduct of its business as such business was conducted prior to the Separation, for one year from the Effective Date (subject to certain rights of CCOH to extend up to one additional year, as described below).

The allocation of cost is based on various measures depending on the service provided, which measures include relative revenue, employee headcount, number of users of a service or other factors.

As of June 30, 2020, most of these services have been successfully transitioned to CCOH.

CCOH has requested extensions of the term for certain individual services, primarily related to information systems, for one-month periods through August 31, 2020 and may request further one-month extensions of such services up to May 1, 2021.

CCOH may terminate the Transition Services Agreement with respect to all or any individual service, in whole or in part, upon 30 days’ prior written notice, provided that any co-dependent services must be terminated concurrently.

On the Effective Date, the Company, iHM Management Services, iHeartCommunications and CCOH entered into a transition services agreement (the “Transition Services Agreement”), pursuant to which iHM Management Services agreed to provide, or cause the Company and its subsidiaries to provide CCOH with certain administrative and support services and other assistance which CCOH utilized in the conduct of its business as such business was conducted prior to the Separation, for one year from the Effective Date (subject to certain rights of CCOH to extend up to one additional year, as described below).

The allocation of cost was based on various measures depending on the service provided, which measures include relative revenue, employee headcount, number of users of a service or other factors.

CCOH terminated the Transition Services Agreement on August 31, 2020.

New Tax Matters Agreement

7 unchanged sentences

Disaggregation of Revenue

The following table shows revenue streams for the Successor Company for the periods presented:

The following tables show revenue streams for the Successor Company for the periods presented:

Successor Company

(In thousands) Audio Audio and Media Services Eliminations Consolidated

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Revenue from contracts with customers:

11 unchanged sentences

Revenue, total $ 671,297 $ 75,039 $ ( 1,930 ) $ 744,406

Period from May 2, 2019 through June 30, 2019

Three Months Ended September 30, 2019

Revenue from contracts with customers:

11 unchanged sentences

Revenue, total $ 890,364 $ 59,873 $ ( 1,899 ) $ 948,338

Six Months Ended June 30, 2020

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Successor Company

(In thousands) Audio Audio and Media Services Eliminations Consolidated

Nine Months Ended September 30, 2020

Revenue from contracts with customers:

10 unchanged sentences

Revenue from leases (7)

1,440 — — 1,440

Revenue, total $ 1,844,026 $ 174,517 $ ( 5,855 ) $ 2,012,688

Period from May 2, 2019 through September 30, 2019

Revenue from contracts with customers:

Broadcast Radio (1)

$ 963,588 $ — $ — $ 963,588

160,894 — — 160,894

265,559 — — 265,559

Sponsorship and Events (4)

87,331 — — 87,331

Audio and Media Services (5)

— 100,410 ( 2,740 ) 97,670

8,525 — ( 280 ) 8,245

Total 1,485,897 100,410 ( 3,020 ) 1,583,287

Revenue from leases (7)

Revenue, total $ 1,486,594 $ 100,410 $ ( 3,020 ) $ 1,583,984

(1) Broadcast Radio revenue is generated through the sale of advertising time on the Company’s domestic radio stations.

2 unchanged sentences

(4) Sponsorship and events revenue is generated through local events and major nationally-recognized tent pole events and include sponsorship and other advertising revenue, ticket sales, and licensing, as well as endorsement and appearance fees generated by on-air talent.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) Audio and media services revenue is generated by services provided to broadcast industry participants through the Company’s Katz Media and RCS businesses.

2 unchanged sentences

(7) Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table shows revenue streams from continuing operations for the Predecessor Company.

1 unchanged sentence

Predecessor Company

(In thousands) Audio (1)

Audio and Media Services (1)

(In thousands) Audio Audio and Media Services (1)

Eliminations Consolidated

Period from April 1, 2019 through May 1, 2019

Revenue from contracts with customers:

Broadcast Radio 170,632 $ — $ — $ 170,632

Digital 26,840 — — 26,840

Networks 50,889 — — 50,889

Sponsorship and Events 10,617 — — 10,617

Audio and Media Services — 17,970 ( 701 ) 17,269

Other 1,197 — ( 56 ) 1,141

Total 260,175 17,970 ( 757 ) 277,388

Revenue from leases 286 — — 286

Revenue, total $ 260,461 $ 17,970 $ ( 757 ) $ 277,674

Period from January 1, 2019 through May 1, 2019

9 unchanged sentences

Revenue, total $ 1,006,677 $ 69,362 $ ( 2,568 ) $ 1,073,471

(1) Due to a re-evaluation of the Company’s internal segment reporting upon the effectiveness of the Plan of Reorganization, the Company’s RCS business is included in the Audio & Media Services results for all periods presented.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Trade and Barter

2 unchanged sentences

Trade and barter revenues and expenses from continuing operations, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows:

Successor Company Predecessor Company

Three Months Ended June 30, Period from May 2, 2019 through June 30, Period from April 1, 2019 through May 1,

Successor Company

Three Months Ended September 30,

(In thousands) 2020 2019

2 unchanged sentences

Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

(In thousands) 2020 2019 2019

1 unchanged sentence

Trade and barter expenses 116,182 68,342 58,330

The Successor Company recognized barter revenue of $ 0.2 million, $ 1.9 million and $ 5.2 million in the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020, respectively, in connection with investments made in companies in exchange for advertising services.

The Predecessor Company recognized barter revenue of $ 0.9 million and $ 5.9 million in the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019, respectively, in connection with investments made in companies in exchange for advertising services.

Deferred Revenue

The Successor Company recognized barter revenue of $ 2.3 million, $ 5.6 million, $ 7.5 million and $ 7.5 million in the three months ended September 30, 2020, the three months ended September 30, 2019, the period from May 2, 2019 through September 30, 2019 and the nine months ended September 30, 2020, respectively, in connection with investments made in companies in exchange for advertising services.

The Predecessor Company recognized barter revenue of $ 5.9 million in the period from January 1, 2019 through May 1, 2019 in connection with investments made in companies in exchange for advertising services.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables show the Company’s deferred revenue balance from contracts with customers, excluding discontinued operations:

Successor Company Predecessor Company

Three Months Ended June 30, Period from May 2, 2019 through June 30, Period from April 1, 2019 through May 1,

Successor Company

Three Months Ended September 30,

(In thousands) 2020 2019

2 unchanged sentences

$ 178,030 $ 159,752

Impact of fresh start accounting — 298 —

Revenue recognized, included in beginning balance ( 79,261 ) ( 74,875 )

1 unchanged sentence

Ending balance $ 172,121 $ 160,537

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

(In thousands) 2020 2019 2019

8 unchanged sentences

The Company’s contracts with customers generally have terms of one year or less;

however, as of June 30, 2020, the Company expects to recognize $ 226.6 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years .

however, as of September 30, 2020, the Company expects to recognize $ 262.3 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years .

Commissions related to the Company’s media representation business have been excluded from this amount as they are contingent upon future sales.

Revenue from Leases

As of June 30, 2020, the future lease payments to be received by the Successor Company are as follows:

As of September 30, 2020, the future lease payments to be received by the Successor Company are as follows:

(In thousands)

1 unchanged sentence

Total $ 15,704

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – LEASES

8 unchanged sentences

Lease expense is recognized on a straight-line basis over the lease term.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company tests for impairment of right of use assets whenever events and circumstances indicate that such assets might be impaired.

During the three months ended June 30, 2020, the Company recognized a non-cash impairment charge of $ 5.4 million related to a decision by management to abandon and sublease one of its operating leases.

During the nine months ended September 30, 2020, the Company recognized a non-cash impairment charge of $ 5.4 million related to a decision by management to abandon and sublease one of its operating leases.

The implicit rate within the Company's lease agreements is generally not determinable.

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Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

(In thousands) 2020 2019 2019

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$ 41,982 $ 13,339 $ 913,598

(1) Lease liabilities from obtaining right-of-use assets include transition liabilities upon adoption of ASC 842, as well as new leases entered into during the six months ended June 30, 2020 (Successor), the period from January 1, 2019 through May 1, 2019 (Predecessor) and the period from May 2, 2019 through June 30, 2019 (Successor).

(1) Lease liabilities from obtaining right-of-use assets include transition liabilities upon adoption of ASC 842, as well as new leases entered into during the nine months ended September 30, 2020 (Successor), the period from January 1, 2019 through May 1, 2019 (Predecessor) and the period from May 2, 2019 through September 30, 2019 (Successor).

The Company reflects changes in the lease liability and changes in the ROU asset on a net basis in the Statements of Cash Flows.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL

On October 22, 2020, the Company acquired Voxnest, Inc.

("Voxnest") for approximately $ 50 million.

Voxnest is the leading consolidated marketplace for podcasts and podcast analytics, enterprise publishing tools, programmatic integration and targeted ad serving and will be included within the Company's Audio segment.

Property, Plant and Equipment

The Company’s property, plant and equipment consisted of the following classes of assets as of June 30, 2020 and December 31, 2019, respectively:

The Company’s property, plant and equipment consisted of the following classes of assets as of September 30, 2020 and December 31, 2019, respectively:

(In thousands) Successor Company

September 30,

2020 December 31,

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In addition, the Company tests for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company applied fresh start accounting as of May 1, 2019 in connection with its emergence from Chapter 11 bankruptcy, which required stating the Company’s intangible assets at estimated fair value.

Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence.

The economic downturn in March 2020 and the COVID-19 pandemic had an adverse impact on the trading values of the Company’s publicly-traded debt and equity and on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic has had a negative impact on the Company's forecasted future cash flows.

The economic downturn starting in March 2020 and the COVID-19 pandemic had an adverse impact on the trading values of the Company’s publicly-traded debt and equity and on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic had a negative impact on the Company's forecasted future cash flows.

As a result, the Company performed an interim impairment test as of March 31, 2020 on its indefinite-lived FCC licenses.

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This data is populated using industry normalized information representing an average asset within a market.

In estimating the fair value of its FCC licenses, the Company obtained the most recent broadcast radio industry revenue projections which consider the impact of COVID-19 on future broadcast radio advertising revenue.

Such projections reflect a significant and negative impact from COVID-19.

In addition to using these broadcast radio industry revenue projections, the Company used various sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of March 31, 2020.

As a result of COVID-19, the United States economy is undergoing a period of economic disruption and uncertainty, which has caused, among other things, lower consumer and business spending.

The uncertainty surrounding the demand for advertising negatively impacted the key assumptions used in the discounted cash flow models used to value the Company's FCC licenses.

Considerations in developing these assumptions included the extent of the economic downturn, ranges of expected timing of recovery, discount rates and other factors.

In estimating the fair value of its FCC licenses, the Company obtained the most recent broadcast radio industry revenue projections which considered the impact of COVID-19 on future broadcast radio advertising revenue.

Such projections reflected a significant and negative impact from COVID-19.

In addition to using these broadcast radio industry revenue projections at the time, the Company used various sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of March 31, 2020.

As a result of COVID-19, the United States economy was undergoing a period of economic disruption and uncertainty, which had caused, among other things, lower consumer and business spending.

The uncertainty surrounding the projected demand for advertising negatively impacted the key assumptions used in the discounted cash flow models used to value the Company's FCC licenses.

Considerations in developing these assumptions included the extent of the economic downturn,

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ranges of expected timing of recovery, discount rates and other factors.

As a result of the Company’s assessment, the estimated fair value of FCC licenses was determined to be below their carrying values as of March 31, 2020.

As a result, during the three months ended March 31, 2020, the Successor Company recognized a non-cash impairment charge of $ 502.7 million on its FCC licenses.

Based on management’s forecasted future cash flows and assessment of market values of the Company’s debt and equity securities, market interest rates affecting the Company’s WACC and other economic factors, no additional interim impairment charge to the Company's indefinite-lived intangible was required as of June 30, 2020.

During the six months ended June 30, 2019, the Predecessor Company recognized non-cash impairment charges of $ 91.4 million in relation to indefinite-lived FCC licenses as a result of an increase in the weighted average cost of capital used in performing the annual impairment test.

The impairment tests for indefinite-lived intangible assets consist of a comparison between the fair value of the indefinite-lived intangible asset at the market level with its carrying amount.

If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to that excess.

After an impairment loss is recognized, the adjusted carrying amount of the indefinite-lived asset is its new accounting basis.

The fair value of the indefinite-lived asset is determined using the direct valuation method as prescribed in ASC 805-20-S99.

Under the direct valuation method, the fair value of the indefinite-lived assets is calculated at the market level as prescribed by ASC 350-30-35.

The Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its indefinite-lived intangible assets.

The application of the direct valuation method attempts to isolate the income that is attributable to the indefinite-lived intangible asset alone (that is, apart from tangible and identified intangible assets and goodwill).

It is based upon modeling a hypothetical “greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process.

The Company forecasts revenue, expenses, and cash flows over a ten-year period for each of its markets in its application of the direct valuation method.

The Company also calculates a “normalized” residual year which represents the perpetual cash flows of each market.

The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market.

Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch.

Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value.

Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets.

The key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values.

This data is populated using industry normalized information representing an average FCC license or billboard permit within a market.

No further impairment was recognized as a result of the Company's annual impairment test on indefinite-lived intangible assets.

During the period from January 1, 2019 through May 1, 2019, the Predecessor Company recognized non-cash impairment charges of $ 91.4 million in relation to indefinite-lived FCC licenses as a result of an increase in the weighted average cost of capital used in performing the annual impairment test.

Other Intangible Assets

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Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence.

The economic downturn in March 2020 and the COVID-19 pandemic had an adverse impact on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic has had a negative impact on the Company's forecasted future cash flows.

As a result, the Company performed interim impairment tests as of March 31, 2020 on its other intangible assets.

Based on the Company’s test of recoverability using estimated undiscounted future cash flows, the carrying values of the Company’s definite-lived intangible assets were determined to be recoverable, and no impairment was recognized.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of June 30, 2020 and December 31, 2019, respectively:

forecasted future cash flows.

As a result, the Company performed interim impairment tests as of March 31, 2020 on its other intangible assets.

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of September 30, 2020 and December 31, 2019, respectively:

(In thousands) Successor Company

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

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Total $ 2,351,464 $ ( 364,511 ) $ 2,348,006 $ ( 171,466 )

Total amortization expense related to definite-lived intangible assets for the Successor Company for the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020 was $ 64.3 million, $ 42.5 million and $ 128.6 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Predecessor Company for the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019 was $ 3.0 million and $ 12.7 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Successor Company for the three months ended September 30, 2020, the three months ended September 30, 2019, the nine months ended September 30, 2020 and the period from May 2, 2019 through September 30, 2019 was $ 64.5 million, $ 67.0 million, $ 193.0 million and $ 109.5 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Predecessor Company for the period from January 1, 2019 through May 1, 2019 was $ 12.7 million.

As acquisitions and dispositions occur in the future, amortization expense may vary.

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Foreign currency — 124 124

Balance as of June 30, 2020 (Successor) $ 1,997,498 $ 104,159 $ 2,101,657

Balance as of September 30, 2020 (Successor) $ 2,005,208 $ 104,278 $ 2,109,486

Goodwill Impairment

At least annually, the Company performs its impairment test for each reporting unit’s goodwill.

The Company performs its annual impairment test on goodwill as of July 1 of each year.

The Company also tests goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired.

As described in Note 1, the economic disruption as a result of COVID-19 had a significant impact to the trading values of the Company’s publicly-traded debt and equity and on the Company's results in the latter half of the month ended March 31, 2020.

In addition, the Company expects that the pandemic will continue to impact the operating and economic environment of our customers and will impact the near-term spending decisions of advertisers.

In addition, the Company expected that the pandemic would continue to impact the operating and economic environment of our customers and would impact the near-term spending decisions of advertisers.

As a result, the Company performed an interim impairment test on its indefinite-lived intangible assets as of March 31, 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its reporting units as of July 1 as part of the annual impairment test.

No further impairment was recognized as a result of the Company's annual impairment test on goodwill.

While management believes the estimates and assumptions utilized to calculate the fair value of the Company's tangible and intangible long-lived assets, indefinite-lived FCC licenses and reporting units are reasonable, it is possible a material change could occur to the estimated fair value of these assets.

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NOTE 6 – LONG-TERM DEBT

Long-term debt outstanding for the Successor Company as of June 30, 2020 and December 31, 2019 consisted of the following:

Long-term debt outstanding for the Successor Company as of September 30, 2020 and December 31, 2019 consisted of the following:

(In thousands) Successor Company

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Term Loan Facility due 2026 (1)

$ 2,085,512 $ 2,251,271

Incremental Term Loan Facility due 2026 (2)

Asset-based Revolving Credit Facility due 2023 (2)(3)

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Other unsecured subsidiary debt 6,548 12,581

Original issue discount ( 19,629 ) —

Long-term debt fees ( 22,485 ) ( 19,428 )

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(1) On February 3, 2020, iHeartCommunications made a $ 150.0 million prepayment using cash on hand and entered into an agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of 3.00 %, or the Base Rate (as defined in the Credit Agreement) plus a margin of 2.00 % and to modify certain covenants contained in the Credit Agreement.

(2) On March 13, 2020, iHeartCommunications borrowed $ 350.0 million under the ABL Facility, the proceeds of which were invested as cash on the Balance Sheet.

During the three months ended June 30, 2020, iHeartCommunications voluntarily repaid $ 115.0 million principal amount drawn under the ABL Facility.

As of June 30, 2020, the ABL Facility had a borrowing base of $ 289.4 million and $ 235.0 million of outstanding borrowings and $ 41.2 million of outstanding letters of credit, resulting in $ 13.2 million of availability.

Amounts available under the ABL Facility are calculated using a borrowing base calculated by reference to our outstanding accounts receivable.

To the extent decreases in our accounts receivable result in the borrowing base decreasing to an amount below the amount drawn, we may be required to make a partial repayment of amounts outstanding under our ABL Facility.

(3) Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2021 through 2045.

(2) On July 16, 2020, iHeartCommunications issued $ 450.0 million of incremental term loans under the Amendment No.

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A portion of the proceeds from the issuance was used to repay the remaining balance outstanding on the Company's ABL Facility of $ 235.0 million, with the remaining $ 190.6 million of the proceeds available for general corporate purposes.

The Successor Company’s weighted average interest rate was 5.3 % and 6.4 % as of June 30, 2020 and December 31, 2019, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 5.5 billion and $ 6.1 billion as of June 30, 2020 and December 31, 2019, respectively.

The trading value of the Company’s publicly traded debt decreased significantly in March 2020 as a result of the market’s reaction to COVID-19.

While trading values have increased as of June 30, 2020 and the date of this filing, prices have not fully recovered to levels

(3) On March 13, 2020, iHeartCommunications borrowed $ 350.0 million under the ABL Facility, the proceeds of which were invested as cash on the Balance Sheet.

During the second and third quarters of 2020, iHeartCommunications voluntarily repaid principal amounts outstanding under the ABL Facility.

As a result of certain restrictions in the Company's debt and preferred stock agreements, as of September 30, 2020, approximately $ 165 million was available to be drawn upon under the ABL Facility.

(4) Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2021 through 2045.

The Successor Company’s weighted average interest rate was 5.5 % and 6.4 % as of September 30, 2020 and December 31, 2019, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 5.9 billion and $ 6.1 billion as of September 30, 2020 and December 31, 2019, respectively.

Under the fair value hierarchy established by ASC 820-10-35, the market value of the Successor Company’s debt is classified as either Level 1 or Level 2.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

prior to the initial impact of COVID-19.

Under the fair value hierarchy established by ASC 820-10-35, the market value of the Successor Company’s debt is classified as either Level 1 or Level 2.

On February 3, 2020, iHeartCommunications entered into an amendment to the Credit Agreement governing its Term Loan Facility due 2026.

The amendment reduces the interest rate to LIBOR plus a margin of 3.00 % (from LIBOR plus a margin of 4.00 %), or the Base Rate (as defined in the Credit Agreement) plus a margin of 2.00 % (from Base Rate plus a margin of 3.00 %) and modifies certain covenants contained in the Credit Agreement.

In connection with the Term Loan Facility amendment in February 2020, iHeartCommunications also prepaid at par $ 150.0 million of borrowings outstanding under the Term Loan Facility with cash on hand.

On July 16, 2020, iHeartCommunications entered into Amendment No.

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2 also modifies certain other provisions of the Credit Agreement.

Under the terms of the Credit Agreement, iHeartCommunications made quarterly payments of $ 5.25 million during each of the three months ended March 31, 2020 and three months ended June 30, 2020.

Under the terms of Amendment No.

2, iHeartCommunications is required to make quarterly payments of $ 6.4 million beginning in the third quarter of 2020.

Under the terms of the Term Loan Facility Credit Agreement, iHeartCommunications made quarterly payments of $ 5.25 million during each of the three months ended March 31, 2020 and June 30, 2020 and $ 6.4 million during the three months ended September 30, 2020.

Mandatorily Redeemable Preferred Stock

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The iHeart Operations Preferred Stock was purchased by a third party investor.

As of June 30, 2020, the liquidation preference of the iHeart Operations Preferred Stock was $ 60.0 million.

As of September 30, 2020, the liquidation preference of the iHeart Operations Preferred Stock was $ 60.0 million.

As further described below, the iHeart Operations Preferred Stock is mandatorily redeemable for cash at a date certain and therefore is classified as a liability in the Company's balance sheet.

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Dividends, if declared, will be payable on March 31, June 30, September 30 and December 31 of each year (or on the next business day if such date is not a business day).

During the three and six months ended June 30, 2020 the Company recognized $ 2.4 million and $ 4.2 million of interest expense related to dividends on mandatorily redeemable preferred stock.

During the three and nine months ended September 30, 2020 the Company recognized $ 2.7 million and $ 6.9 million of interest expense related to dividends on mandatorily redeemable preferred stock.

Other than as set forth below, iHeart Operations may not redeem the iHeart Operations Preferred Stock at its option prior to the third anniversary of the issue date of the iHeart Operations Preferred Stock.

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Surety Bonds, Letters of Credit and Guarantees

As of June 30, 2020, the Successor Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $ 19.8 million and $ 41.2 million, respectively.

As of September 30, 2020, the Successor Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $ 19.0 million and $ 41.7 million, respectively.

These surety bonds and letters of credit relate to various operational matters including insurance, lease and performance bonds as well as other items.

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Alien Ownership Restrictions and FCC Petition for Declaratory Ruling

The Communications Act and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the licensee of a radio broadcast station unless the FCC finds greater foreign ownership is in the public interest (the “Foreign Ownership Rule”).

Under the Plan of Reorganization, the Company committed to file a Petition for Declaratory Ruling ("PDR") requesting the FCC to permit up to 100% of the Company's voting and equity to be owned by non-U.S.

individuals and entities, but the FCC’s granting the PDR was not a condition to the Company's emergence.

The equity allocation mechanism (“Equity Allocation Mechanism”) set forth in the Plan of Reorganization was intended to enable the Company to comply with the Foreign Ownership Rule and other FCC ownership restrictions in connection with emergence.

The Equity Allocation Mechanism imposed an obligation on each of the Company's former claimholders in connection with the Chapter 11 Cases (the "Claimholders") to provide written certification sufficient for the Company to determine whether issuance of common stock to such Claimholders would cause the Company to violate the Foreign Ownership Rule, and restricted the Company from issuing common stock to Claimholders such that it would cause the Company to exceed an aggregate alien ownership or voting percentage of 22.5 percent (the “22.5 Percent Threshold”).

After emerging from bankruptcy, the Company discovered that a group of Claimholders that had certified to having no foreign ownership or voting control in connection with the Equity Allocation Mechanism had subsequently undergone a separate merger transaction without our knowledge or control.

As a result of this merger, these Claimholders’ interests in iHeartMedia (amounting to approximately nine percent of the Company's issued and outstanding Class A common stock) can be voted by a U.S.

The Communications Act and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the licensee of a radio broadcast station unless the FCC finds greater foreign ownership to be in the public interest (the “Foreign Ownership Rule”).

Under the Plan of Reorganization, the Company committed to file a Petition for Declaratory Ruling ("PDR") requesting the FCC to permit the Company to be up to 100% foreign-owned.

In connection with the Company's emergence from bankruptcy, each of the Company's claimholders in the Chapter 11 Cases (the "Claimholders") was required to provide written certification sufficient for the Company to determine whether issuance of common stock to such Claimholders would cause the Company to violate the Foreign Ownership Rule, and restricted the Company from issuing common stock to Claimholders such that it would cause the Company to exceed an aggregate alien ownership or voting percentage of 22.5 percent.

After emerging from bankruptcy, the Company learned that a group of Claimholders that had certified to having no foreign ownership or voting control subsequently underwent a separate merger transaction without our knowledge or control.

As a result of this merger, these Claimholders’ interests in iHeartMedia can be voted by a U.S.

subsidiary of a foreign parent.

The Company notified the FCC of this development in writing promptly after discovering and confirming it.

The FCC responded to the Company's notification on July 9, 2019, indicating that (1) the FCC has not determined that this development is contrary to the public interest, and (2) the FCC has deemed the Company to be in compliance with the FCC’s foreign ownership reporting rules, pending its decision on the Company's PDR.

The Company promptly notified the FCC of the merger.

The FCC responded to the Company's notification on July 9, 2019, indicating that (1) the FCC had determined that this development is contrary to the public interest, and (2) the FCC deemed the Company to be in compliance with the FCC’s foreign ownership reporting rules, pending its decision on the Company's PDR.

On July 25, 2019 the Company filed the PDR.

The FCC requested public comment on the PDR, which comment period closed on March 26, 2020.

The FCC subsequently referred the PDR to Team Telecom - the interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues.

On June 29, 2020, Team Telecom indicated its consent to the grant by the FCC of the PDR.

The Company cannot predict whether the FCC will issue a ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to have, or how long it will take to obtain such a ruling.

On November 5, 2020, the FCC issued a declaratory ruling granting the relief requested by the PDR (the “Declaratory Ruling”), subject to certain conditions set forth in the Declaratory Ruling.

On November 9, 2020, the Company notified the holders of warrants to purchase the Company’s Class A common stock or Class B common stock (the “Special Warrants”) of the commencement of an exchange process (the notification, the “Exchange Notice,” and the exchange, the “Exchange”).

In the Exchange, the Company will exchange all or a portion of the outstanding Special Warrants into Class A common stock or Class B common stock, subject to compliance with the Declaratory Ruling, the Communications Act and FCC rules.

IHEARTMEDIA, INC.

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Income Tax Benefit (Expense)

The Company’s income tax benefit (expense) from continuing operations for the three and six months ended June 30, 2020 (Successor) the period from May 2, 2019 through June 30, 2019 (Successor), the period from April 1, 2019 through May 1, 2019 (Predecessor) and the period from January 1, 2019 through May 1, 2019 (Predecessor), respectively, consisted of the following components:

(In thousands) Successor Company Predecessor Company

Three Months Ended June 30, Period from May 2, 2019 through June 30, Period from April 1, 2019 through May 1,

2020 2019 2019

Current tax benefit (expense) $ ( 1,731 ) $ ( 2,947 ) $ 6,950

The Company’s income tax benefit (expense) from continuing operations for the three and nine months ended September 30, 2020 (Successor), the three months ended September 30, 2019, the period from May 2, 2019 through September 30, 2019 (Successor) and the period from January 1, 2019 through May 1, 2019 (Predecessor), respectively, consisted of the following components:

(In thousands) Successor Company

Three Months Ended September 30,

Current tax expense $ ( 1,698 ) $ ( 4,336 )

Deferred tax benefit (expense) 16,926 ( 12,422 )

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(In thousands) Successor Company Predecessor Company

Six Months Ended June 30, 2020 Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

2020 2019 2019

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Income tax benefit (expense) $ 209,481 $ ( 32,761 ) $ ( 39,095 )

The effective tax rate from continuing operations for the Successor Company for the three and six months ended June 30, 2020 was 18.1 % and 9.3 %, respectively.

The effective tax rate for the six months ended June 30, 2020 was primarily impacted by the impairment charges to non-deductible goodwill discussed in Note 1.

The effective tax rate for the Successor Company for the three and nine months ended September 30, 2020 was 32.2 % and 9.8 %, respectively.

The effective tax rate for the nine months ended September 30, 2020 was primarily impacted by the impairment charges to non-deductible goodwill discussed in Note 5.

The deferred tax benefit primarily consists of $ 125.5 million related to the FCC license impairment charges recorded during the period.

The effective tax rate for the Successor Company for the Period from May 2, 2019 through June 30, 2019 was 29.2 %.

The effective tax rate for continuing operations of the Predecessor Company for Period from April 1, 2019 through May 1, 2019 (Predecessor) and the Period from January 1, 2019 through May 1, 2019 (Predecessor) was 1.1 % and 0.4 %, respectively.

The income tax expense for the Period from April 1, 2019 through May 1, 2019 (Predecessor) and the Period from January 1, 2019 through May 1, 2019 (Predecessor) primarily consists of the income tax impacts from reorganization and fresh start adjustments, including adjustments to our valuation allowance.

The effective tax rate for the Successor Company for the period from May 2, 2019 through September 30, 2019 was 39.0 %.

The effective tax rate for continuing operations of the Predecessor Company for the period from January 1, 2019 through May 1, 2019 (Predecessor) was 0.4 %.

The income tax expense for the period from January 1, 2019 through May 1, 2019 (Predecessor) primarily consists of the income tax impacts from reorganization and fresh start adjustments, including adjustments to our valuation allowance.

The Company recorded income tax benefits of $ 102.9 million for reorganization adjustments in the Predecessor period, primarily consisting of:

(1) tax expense for the reduction in federal and state net operating loss (“NOL”) carryforwards from the cancellation of debt income ("CODI") realized upon emergence;

(1) tax expense for the reduction in federal and state net operating loss carryforwards from the cancellation of debt income realized upon emergence;

(2) tax benefit for the reduction in deferred tax liabilities attributed primarily to long-term debt that was discharged upon emergence;

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While the Company is continuing to evaluate the impact of the enacted tax provisions as additional guidance is provided, upon the Company's initial review the provision with the most significant impact on the Company’s income taxes is the increase to the Section 163(j) interest deduction limitation and the ability to elect to use the Company’s 2019 Adjusted Taxable Income (as defined under Section 163(j)) for purposes of calculating the 2020 Section 163(j) limitation.

There were several other tax provisions included in the CARES Act allowing companies more flexibility in carrying back net operating losses generated in 2018, 2019 or 2020,

There were several other tax provisions included in the CARES Act allowing companies more flexibility in carrying back net operating losses generated in 2018, 2019 or 2020, temporarily eliminating the provision limiting net operating losses utilization to 80% of taxable income and the acceleration of

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

temporarily eliminating the provision limiting net operating losses utilization to 80% of taxable income and the acceleration of refunds available from alternative minimum tax credits.

refunds available from alternative minimum tax credits.

The Company does not expect to benefit from any of these provisions.

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The amounts deferred are due fifty percent by December 31, 2021 and fifty percent by December 31, 2022.

The Company has deferred $ 11.3 million in employment taxes as of June 30, 2020.

The Company has deferred $ 20.3 million in employment taxes as of September 30, 2020.

In addition, the CARES Act included a provision providing an Employee Retention tax credit, which would offset employment taxes, for qualified companies and wages.

The Company has recorded approximately $ 0.7 million in credits during the period ended June 30, 2020.

The Company has recorded approximately $ 0.7 million in credits during 2020.

NOTE 9 – STOCKHOLDER'S EQUITY

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Share-based Compensation

Share-based compensation expenses are recorded in corporate expenses and were $ 4.2 million, $ 3.0 million and $ 8.8 million for the Successor Company for three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020, respectively.

Share-based compensation expenses for the Predecessor Company were $ 0.1 million and $ 0.5 million for the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019, respectively.

As of June 30, 2020, there was $ 48.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions.

Share-based compensation expenses are recorded in corporate expenses and were $ 5.9 million, $ 17.1 million, $ 14.7 million and $ 20.2 million for the Successor Company for three months ended September 30, 2020, the three months ended September 30, 2019, the nine months ended September 30, 2020 and the period from May 2, 2019 through September 30, 2019, respectively.

Share-based compensation expenses for the Predecessor Company were $ 0.5 million for the period from January 1, 2019 through May 1, 2019.

In August 2020, the Company issued performance-based restricted stock units ("Performance RSUs") to certain key employees.

Such Performance RSUs vest upon the achievement of critical operational (cost savings) improvements and specific environmental, social and governance initiatives, which are being measured over an approximately 18-month period from the date of issuance.

In the three months ended September 30, 2020, the Company recognized $ 1.1 million in relation to these Performance RSUs.

As of September 30, 2020, there was $ 58.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions.

This cost is expected to be recognized over a weighted average period of approximately 3 years.

In addition, as of September 30, 2020, there was $ 3.9 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on certain performance conditions.

Successor Common Stock and Special Warrants

The Company is authorized to issue 2,100,000,000 shares, consisting of (a) 1,000,000,000 shares of Class A Common Stock, par value $ 0.001 per share (the “Class A Common Stock”), (b) 1,000,000,000 shares of Class B Common Stock, par value $ 0.001 per share (the “Class B Common Stock”), and (c) 100,000,000 shares of preferred stock, par value $ 0.001 per share (the “Preferred Stock”).

The following table presents the Successor Company's Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding as of June 30, 2020:

The following table presents the Successor Company's Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding as of September 30, 2020:

September 30,

Successor Class A Common Stock, par value $ .001 per share, 1,000,000,000 shares authorized

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Total Successor Class A Common Stock, Class B Common Stock and Special Warrants issued 146,392,218

During the three and six months ended June 30, 2020, stockholders converted 145 and 6,060 shares of the Class B common stock into Class A common stock, respectively.

Special Warrants

Each Special Warrant issued under the special warrant agreement entered into in connection with the Reorganization may be exercised by its holder to purchase one share of Successor Class A common stock or Successor Class B common stock at an exercise price of $ 0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Successor Company's outstanding Class A common stock, (b) more than 22.5 percent of the Successor Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any foreign ownership threshold set by the FCC pursuant to a declaratory ruling or specific approval requirement or (d) the Company violating any provision of the Communications Act or restrictions

During the three and nine months ended September 30, 2020, stockholders converted 7,263 and 13,323 shares of the Class B common stock into Class A common stock, respectively.

During the three and nine months ended September 30, 2019, stockholders converted 21,623 shares of the Class B common stock into Class A common stock.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC.

Special Warrants

Each Special Warrant issued under the special warrant agreement entered into in connection with the Reorganization may be exercised by its holder to purchase one share of Successor Class A common stock or Successor Class B common stock at an exercise price of $ 0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Successor Company's outstanding Class A common stock, (b) more than 22.5 percent of the Successor Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any other applicable foreign ownership threshold or (d) violation of any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC.

Any holder exercising Special Warrants must complete and timely deliver to the warrant agent the required exercise forms and certifications required under the special warrant agreement.

The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of a licensee’s equity, unless the FCC determines that greater indirect foreign ownership is in the public interest.

As described further in Note 7 above, on July 25, 2019, the Company filed a PDR requesting FCC consent to exceed the 25 percent foreign ownership and voting benchmarks that currently apply to us, on which the FCC has requested public comment.

The public comment period closed on March 26, 2020.

The FCC referred our PDR to Team Telecom - the interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues.

On June 29, 2020, Team Telecom indicated its consent to the grant by the FCC of the PDR.

We cannot predict whether the FCC will issue a ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to have, or how long it will take to obtain such a ruling.

During the three and six months ended June 30, 2020, stockholders exercised 877,263 and 3,003,854 Special Warrants for an equivalent number of shares of Class A common stock, respectively.

During the three and six months ended June 30, 2020, stockholders exercised 729 and 1,345 Special Warrants for an equivalent number of shares of Class B common stock, respectively.

As described further in Note 7 above, on July 25, 2019, the Company filed a PDR requesting FCC consent to exceed the 25 percent foreign ownership and voting benchmarks that currently apply to us.

On November 5, 2020, the FCC issued the Declaratory Ruling granting the relief requested by the PDR.

On November 9, 2020, the Company sent Exchange Notices to the holders of Special Warrants, notifying them of the Exchange process.

During the three and nine months ended September 30, 2020, stockholders exercised 1,986,278 and 4,990,132 Special Warrants for an equivalent number of shares of Class A common stock, respectively.

During the three and nine months ended September 30, 2020, stockholders exercised 704 and 2,049 Special Warrants for an equivalent number of shares of Class B common stock, respectively.

During the three months ended September 30, 2019 and the period from May 2, 2019 through September 30, 2019, stockholders exercised 164,310 Special Warrants for an equivalent number of shares of Class A common stock.

During the three months ended September 30, 2019 and the period from May 2, 2019 through September 30, 2019, stockholders exercised 32 Special Warrants for an equivalent number of shares of Class B common stock.

Stockholder Rights Plan

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Computation of Income (Loss) per Share

(In thousands, except per share data) Successor Company Predecessor Company

Three Months Ended June 30, Period from May 2, 2019 through June 30, Period from April 1, 2019 through May 1,

2020 2019 2019

(In thousands, except per share data) Successor Company

Three Months Ended September 30,

Net income (loss) attributable to the Company – common shares $ ( 32,112 ) $ 12,374

Income from discontinued operations, net of

tax $ — $ — $ 1,854,677

Noncontrolling interest from discontinued operations, net of tax - common shares

— — ( 2,190 )

Total income from discontinued operations, net of tax - common shares

$ — $ — $ 1,852,487

Income (loss) from continuing operations $ ( 197,317 ) $ 38,793 $ 9,446,037

DENOMINATOR (1) :

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Net income (loss) attributable to the Company per common share:

From continuing operations - Basic $ ( 1.35 ) $ 0.27 $ 110.28

From discontinued operations - Basic $ — $ — $ 21.63

From continuing operations - Diluted $ ( 1.35 ) $ 0.27 $ 110.28

From discontinued operations - Diluted $ — $ — $ 21.63

Basic $ ( 0.22 ) $ 0.08

Diluted $ ( 0.22 ) $ 0.08

IHEARTMEDIA, INC.

2 unchanged sentences

(In thousands, except per share data) Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

2020 2019 2019

13 unchanged sentences

From discontinued operations - Diluted $ — $ — $ 19.76

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Successor Company for the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020.

(2) Outstanding equity awards representing 7.7 million, 1.3 million and 7.9 million shares of Class A common stock of the Successor Company for the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020 were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

Outstanding equity awards representing 5.9 million shares of Class A common stock of the Predecessor Company for the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019 were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Successor Company for the three months ended September 30, 2020, the period from May 2, 2019 through September 30, 2019 and the nine months ended September 30, 2020.

(2) Outstanding equity awards representing 9.6 million, 8.1 million, 5.6 million and 8.5 million shares of Class A common stock of the Successor Company for the three months ended September 30, 2020, the three months ended September 30, 2019, the period from May 2, 2019 through September 30, 2019 and the nine months ended September 30, 2020 were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

Outstanding equity awards representing 5.9 million shares of Class A common stock of the Predecessor Company for the period from January 1, 2019 through May 1, 2019 were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

NOTE 10 – SEGMENT DATA

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Share-based payments are recorded in corporate expense.

In connection with a reorganization of the Company’s management structure after the Separation and emergence from the Chapter 11 Cases, the Company revised its segment reporting, as discussed in Note 1 and all prior periods have been restated to conform to this presentation.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company's segment results for the Successor Company for the periods presented:

The following tables present the Company's segment results for the Successor Company for the periods presented:

Successor Company

(In thousands) Audio Audio & Media Services Corporate and other reconciling items Eliminations Consolidated

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Revenue $ 671,297 $ 75,039 $ — $ ( 1,930 ) $ 744,406

8 unchanged sentences

— — 1,675 — 1,675

Operating loss $ ( 117,775 ) $ ( 6,401 ) $ ( 34,911 ) $ — $ ( 159,087 )

Operating income (loss) $ 57,451 $ 20,872 $ ( 38,928 ) $ — $ 39,395

Intersegment revenues $ 168 $ 1,762 $ — $ — $ 1,930

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$ — $ — $ 5,885 $ — $ 5,885

Period from May 2, 2019 through June 30, 2019

Three Months Ended September 30, 2019

Revenue $ 890,364 $ 59,873 $ — $ ( 1,899 ) $ 948,338

5 unchanged sentences

87,620 5,971 1,677 — 95,268

Other operating income, net

— — 3,246 — 3,246

Other operating expense, net — — 9,880 — 9,880

Operating income (loss) $ 200,870 $ 10,034 $ ( 70,082 ) $ — $ 140,822

3 unchanged sentences

$ — $ — $ 17,112 $ — $ 17,112

Six Months Ended June 30, 2020

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Successor Company

(In thousands) Audio Audio & Media Services Corporate and other reconciling items Eliminations Consolidated

Nine Months Ended September 30, 2020

Revenue $ 1,844,026 $ 174,517 $ — $ ( 5,855 ) $ 2,012,688

13 unchanged sentences

$ — $ — $ 14,728 $ — $ 14,728

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company's segment results for the Predecessor Company for the periods presented.

The presentation of prior period amounts has been restated to conform to the presentation of the Successor period.

Predecessor Company

(In thousands) Audio Audio and Media Services Corporate and other reconciling items Eliminations Consolidated

Period from April 1, 2019 through May 1, 2019

Period from May 2, 2019 through September 30, 2019

Revenue $ 1,486,594 $ 100,410 $ — $ ( 3,020 ) $ 1,583,984

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Selling, general and administrative expenses 488,955 61,045 — ( 2,654 ) 547,346

91,551 11,276 — ( 531 ) 102,296

Corporate expenses — — 85,351 ( 20 ) 85,331

Depreciation and amortization 142,312 9,590 2,749 — 154,651

11,749 1,204 1,591 — 14,544

Impairment charges — — — — —

Other operating expense, net — — 6,634 — 6,634

— — ( 127 ) — ( 127 )

Operating income (loss) $ 351,622 $ 17,622 $ ( 94,734 ) $ — $ 274,510

$ 61,178 $ 2,941 $ ( 16,228 ) $ — $ 47,891

Intersegment revenues $ 280 $ 2,740 $ — $ — $ 3,020

1 unchanged sentence

Share-based compensation expense $ — $ — $ 20,151 $ — $ 20,151

$ — $ — $ 105 $ — $ 105

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company's segment results for the Predecessor Company for the periods presented.

The presentation of prior period amounts has been restated to conform to the presentation of the Successor period.

Predecessor Company

(In thousands) Audio Audio & Media Services Corporate and other reconciling items Eliminations Consolidated

Period from January 1, 2019 through May 1, 2019

2 unchanged sentences

Selling, general and administrative expenses 383,342 46,072 — ( 2,184 ) 427,230

383,342 46,072 — ( 2,184 ) 427,230

Corporate expenses 53,667 ( 20 ) 53,647

Depreciation and amortization 41,233 5,266 6,335 — 52,834

41,233 5,266 6,335 — 52,834

Impairment charges — — 91,382 — 91,382

Other operating expense, net — — 154 — 154

— — ( 154 ) — ( 154 )

Operating income (loss) $ 210,113 $ 8,465 $ ( 151,538 ) $ — $ 67,040

$ 210,113 $ 8,465 $ ( 151,538 ) $ — $ 67,040

Intersegment revenues $ 243 $ 2,325 $ — $ — $ 2,568

1 unchanged sentence

Share-based compensation expense $ — $ — $ 498 $ — $ 498

$ — $ — $ 498 $ — $ 498

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – REORGANIZATION ITEMS, NET

Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the periods presented and were as follows:

(In thousands) Successor Company Predecessor Company

Three Months Ended June 30, Period from May 2, 2019 through June 30, Period from April 1, 2019 through May 1,

2020 2019 2019

Professional fees and other bankruptcy related costs $ — $ — $ ( 121,374 )

Net gain on settlement of Liabilities subject to compromise — — 7,192,379

Impact of fresh start adjustments — — 2,430,944

Other items, net — — ( 4,005 )

Reorganization items, net $ — $ — $ 9,497,944

(In thousands) Successor Company

Three Months Ended September 30,

Cash payments for Reorganization items, net $ — $ 5,219

(In thousands) Successor Company Predecessor Company

Six Months Ended June 30, Period from May 2, 2019 through June 30, Period from January 1, 2019 through May 1,

Nine Months Ended September 30, Period from May 2, 2019 through September 30, Period from January 1, 2019 through May 1,

2020 2019 2019

6 unchanged sentences

Professional fees included in Reorganization items, net represent fees for post-petition expenses related to the Chapter 11 Cases.

The Company incurred additional professional fees related to the bankruptcy, post-emergence, of $ 1.9 million, $ 9.1 million and $ 4.5 million for the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and six months ended June 30, 2020, respectively, which are included within Other income (expense), net in the Company's Consolidated Statements of Comprehensive Income (Loss).

The Company incurred additional professional fees related to the bankruptcy, post-emergence, of $ 0.9 million, $ 12.4 million, $ 5.4 million and $ 21.5 million for the three months ended September 30, 2020, the three months ended September 30, 2019, the

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

nine months ended September 30, 2020 and the period from May 2, 2019 through September 30, 2019, respectively, which are included within Other income (expense), net in the Company's Consolidated Statements of Comprehensive Income (Loss).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements