1 unchanged sentence
Format of Presentation
−Removed: Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes contained in Item 8 of this Annual Report on Form 10-Kof iHeartMedia, Inc.
+Added: Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes contained in Item 8 of this Annual Report on Form 10-K of iHeartMedia, Inc.
(the "Company," "iHeartMedia," "we," or "us").
−Removed: Our primary business provides media and entertainment services via broadcast and digital delivery, including our networks businesses, through our Audio segment.
−Removed: We also operate businesses that provide audio and media services through our Audio and Media Services segment, including our full-service media representation business, Katz Media Group (“Katz Media”) and our provider of scheduling and broadcast software and services, RCS.
−Removed: Following the Separation, we ceased to operate our former outdoor business, which prior to the Separation was presented as our Americas outdoor segment and our International outdoor segment.
−Removed: The historical results of the outdoor business have been reclassified as results from discontinued operations.
−Removed: Over the past ten years, we have transitioned our Audio business from a single platform radio broadcast operator to a company with multiple platforms including podcasting, networks and events.
+Added: Beginning on January 1, 2021, we began reporting based on three reportable segments:
+Added: ▪ the Multiplatform Group, which includes our Broadcast radio, Networks and Sponsorships and Events businesses;
+Added: ▪ the Digital Audio Group, which includes our Digital businesses, including Podcasting;
+Added: ▪ the Audio & Media Services Group, which includes Katz Media Group (“Katz Media”), our full-service media representation business, and RCS Sound Software ("RCS"), a provider of scheduling and broadcast software and services.
+Added: These reporting segments reflect how senior management operates the Company and align with certain leadership and organizational changes implemented in the first quarter of 2021.
+Added: This structure provides improved visibility into the underlying performance, results, and margin profiles of our distinct businesses and enables senior management to better monitor trends at the operational level and address opportunities or issues as they arise via regular review of segment-level results and forecasts with operational leaders.
+Added: Additionally, beginning on January 1, 2021, Segment Adjusted EBITDA became the segment profitability metric reported to the Company's Chief Operating Decision Maker for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment.
+Added: Segment Adjusted EBITDA is calculated as Revenue less operating expenses, excluding Restructuring expenses (as defined below) and share-based compensation expenses.
+Added: We have transitioned our business from a single platform radio broadcast operator to a company with multiple platforms including digital, podcasting, networks and events, as well as ad technology capabilities.
We have also invested in numerous technologies and businesses to increase the competitiveness of our inventory with our advertisers and our audience.
−Removed: We believe that our ability to generate cash flow from operations from our business initiatives and our current cash on hand will provide sufficient resources to fund and operate our businesses, fund capital expenditures and other obligations and make interest payments on our long-term debt for at least the next 12 months.
+Added: We believe the presentation of our results by segment provides additional insight into our broadcast radio business and our fast-growing digital business.
+Added: We believe that our ability to generate cash flow from operations from our business initiatives and our current cash on hand will provide sufficient resources to fund and operate our business, fund capital expenditures and other obligations and make interest payments on our long-term debt for at least the next twelve months.
Certain prior period amounts have been reclassified to conform to the 2021 presentation.
−Removed: Our Audio strategy centers on delivering entertaining and informative content where our listeners want to find us across multiple platforms, including broadcast, digital and live mobile, as well as events.
−Removed: Our primary source of revenue is derived from selling local and national advertising time on our radio stations, with contracts typically less than one year in duration.
+Added: Description of Our Business
+Added: Our strategy centers on delivering entertaining and informative content where our listeners want to find it across our various platforms.
+Added: Multiplatform Group
+Added: The primary source of revenue for our Multiplatform Group is from selling local and national advertising time on our radio stations, with contracts typically less than one year in duration.
The programming formats of our radio stations are designed to reach audiences with targeted demographic characteristics.
We work closely with our advertising and marketing partners to develop tools and leverage data to enable advertisers to effectively reach their desired audiences.
−Removed: We continue to expand the choices for listeners and we deliver our radio, podcasting and other content and sell advertising across multiple distribution channels, including digitally via our iHeartRadio mobile application and other digital platforms which reach national, regional and local audiences.
−Removed: We also generate revenue from network syndication, our nationally recognized events, our station websites and other miscellaneous transactions.
−Removed: Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions (“CPM”), which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service.
−Removed: In addition, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically priced the highest.
−Removed: Our price and yield information systems enable our station managers and sales teams to adjust commercial inventory and pricing based on local market demand, as well as to manage and monitor different commercial durations in order to provide more effective advertising for our customers at what we believe are optimal prices given market conditions.
−Removed: Yield is measured by management in a variety of ways, including revenue earned divided by minutes of advertising sold.
−Removed: Management looks at our Audio operations’ overall revenue as well as the revenue from each type of advertising, including local advertising, which is sold predominately in a station’s local market, and national advertising, which is sold across multiple markets.
+Added: Our Multiplatform Group also generates revenue from network syndication, nationally recognized events and other miscellaneous transactions.
+Added: Management looks at our Multiplatform Group's operations’ overall revenue as well as the revenue from each type of advertising, including local advertising, which is sold predominately in a station’s local market, and national advertising, which is sold across multiple markets.
Local advertising is sold by each radio station’s sales staff while national advertising is sold by our national sales team.
−Removed: Local advertising, which is our largest source of advertising revenue, and national advertising revenues are tracked separately because these revenue streams have different sales teams and respond differently to changes in the economic environment.
We periodically review and refine our selling structures in all regions and markets in an effort to maximize the value of our offering to advertisers and, therefore, our revenue.
−Removed: Management also looks at Audio's revenue by region and market size.
+Added: Management also looks at Multiplatform Group's revenue by region and market size.
Typically, larger markets can reach larger audiences with wider demographics than smaller markets.
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We have made significant investments so we can provide the same ad-buying experience that once was only available from digital-only companies and enable our clients to better understand how our assets can successfully reach their target audiences.
−Removed: A portion of our Audio segment’s expenses vary in connection with changes in revenue.
−Removed: These variable expenses primarily relate to costs in our sales department, such as commissions, and bad debt.
−Removed: Our content costs, including music royalty and license fees for music delivered via broadcast or digital streaming, vary with the volume and mix of songs played on our stations and the listening hours on our digital platforms.
−Removed: Our programming and general and administrative departments incur most of our fixed costs, such as utilities and office salaries.
−Removed: We incur discretionary costs in our advertising, marketing and promotions, which we primarily use in an effort to maintain and/or increase our audience share.
−Removed: Lastly, we have incentive systems in each of our departments which provide for bonus payments based on specific performance metrics, including ratings, revenue and overall profitability.
+Added: Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions (“CPM”), which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service.
+Added: In addition, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically priced the highest.
+Added: Our price and yield information systems enable our station managers and sales teams to adjust commercial inventory and pricing based on local market demand, as well as to manage and monitor different commercial durations in order to provide more effective advertising for our customers at what we believe are optimal prices given market conditions.
+Added: Yield is measured by management in a variety of ways, including revenue earned divided by minutes of advertising sold.
+Added: A portion of our Multiplatform Group segment’s expenses vary in connection with changes in revenue.
+Added: These variable expenses primarily relate to costs in our programming and sales departments, including profit sharing fees and commissions, and bad debt.
+Added: Our content costs, including music license fees for music delivered via broadcast, vary with the volume and mix of songs played on our stations.
+Added: Digital Audio Group
+Added: Through our Digital Audio Group, we continue to expand the choices for listeners.
+Added: We derive revenue in this segment by developing and delivering our content and selling advertising across multiple digital distribution channels, including via our iHeartRadio mobile application, our station websites and other digital platforms that reach national, regional and local audiences.
+Added: Our strategy has enabled us to extend our leadership in the rapidly growing podcasting sector, and iHeartMedia is the number one podcast publisher in America.
+Added: Our reach now extends across more than 250 platforms and 2,000 different connected devices, and our digital business is comprised of streaming, subscription, display advertisements, and other content that is disseminated over digital platforms.
+Added: A portion of our Digital Audio Group segment’s expenses vary in connection with changes in revenue.
+Added: These variable expenses primarily relate to our content costs including profit sharing fees and third-party content costs, as well as sales commissions and bad debt.
+Added: Certain of our content costs, including digital music performance royalties, vary with the volume of listening hours on our digital platforms.
+Added: Audio & Media Services Group
+Added: Audio & Media Services Group revenue is generated by services provided to broadcast industry participants through our Katz Media and RCS businesses.
+Added: As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast software and media streaming, along with research services for radio stations, broadcast television stations, cable channels, record labels, ad agencies and Internet stations worldwide.
Our advertising revenue is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with GDP.
A recession or downturn in the U.S.
−Removed: economy typically has a significant impact on the Company’s ability to generate revenue.
−Removed: In light of the novel coronavirus pandemic (“COVID-19”) and the resulting recession impacting the U.S.
−Removed: economy, our revenue for the year ended December 31, 2020 has declined significantly compared to 2019, largely as a result of a decline in consumer and business spending and the related impact to the demand for advertising and pricing pressure resulting from greater competition for available advertising dollars.
−Removed: In the third and fourth quarters of 2020, we experienced sequential increases in revenue compared to the second quarter of 2020, although we continued to see year-over-year declines in our Broadcast radio, Networks and Sponsorships revenue streams.
−Removed: Revenue from our Audio and Media Services increased, primarily as a result of higher political revenue, which resulted in an increase of $61.8 million in revenue in the year ended December 31, 2020 compared to 2019.
−Removed: When the business environment recovers, we expect that the traditional use of radio will be a strong benefit to us.
−Removed: As businesses reopen both nationally and locally, we believe that we are advantaged by our unparalleled reach and the live and local trusted voices that advertisers need to get their messages out quickly.
−Removed: In the first quarter of 2020, we announced our modernization initiatives, which take advantage of the significant investments we have made in new technologies to build an operating infrastructure that provides new, high quality products while also unlocking cost efficiencies.
−Removed: These initiatives delivered the expected 2020 in-year savings of approximately $50 million and remain on track to deliver annualized run-rate cost savings of approximately $100 million by mid-year 2021.
−Removed: In addition, and as previously discussed, in response to the COVID-19 pandemic, we took steps to significantly reduce our capital and operating expenditures in 2020.
−Removed: These initiatives generated approximately $200 million of operating cost savings in 2020 and we have identified, and executed on, plans to make substantially all of those savings permanent in 2021 and beyond.
−Removed: For more information, please see the Liquidity and Capital Resources - Anticipated Cash Requirements section below.
−Removed: On March 26, 2020, we announced the withdrawal of our previously issued financial guidance for the fiscal year ending December 31, 2020 due to heightened uncertainty related to COVID-19.
−Removed: As a precautionary measure to preserve financial flexibility in light of this uncertainty, we borrowed $350.0 million principal amount under our senior secured asset-based revolving credit facility (the “ABL Facility”).
−Removed: During the second and third quarters of 2020, we repaid the amounts outstanding under our ABL Facility using cash on hand and the proceeds from the issuance of our Incremental Term Loan Facility (as defined below), resulting in no balance outstanding under the facility as of December 31, 2020 and borrowing capacity of $172 million, as a result of restrictions in iHeartMedia’s debt and preferred stock agreements.
−Removed: In July 2020, iHeartCommunications issued $450.0 million of incremental term loans pursuant to an amendment (the “Incremental Term Loan Facility”) to the credit agreement (as amended, the “Credit Agreement”) with iHeartMedia Capital I, LLC ("Capital I"), as guarantor, certain subsidiaries of iHeartCommunications, Inc.
−Removed: ("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”), resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs.
−Removed: A portion of the proceeds was used to repay the balance outstanding on our ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes.
−Removed: For more information please refer to the “ Liquidity and Capital Resources section” in this MD&A.
+Added: economy could have a significant impact on the Company’s ability to generate revenue.
+Added: Beginning in March 2020 and continuing in the following months, we saw a sharp decline in each of our Broadcast radio, Networks and Sponsorships revenue streams as a result of the impact of the coronavirus pandemic (“COVID-19”) and the resulting impact on the U.S.
+Added: Although revenues significantly increased for the year ended December 31, 2021 compared to the prior year for the revenue streams of our Multiplatform Group, revenue from this segment has not fully recovered from the impact of COVID-19.
+Added: Our Digital Audio Group revenues, including podcasting, have continued to grow each quarter year-over-year during the COVID-19 pandemic.
+Added: Our Audio & Media Services Group revenues have decreased from the prior year mainly due to lower political advertising revenue, partially offset by the continued recovery
+Added: from the impact of the COVID-19 pandemic.
+Added: Refer to Note 1, Summary of Significant Accounting Policies , for more information regarding COVID-19 and its impact on our financial statements.
+Added: Cost Savings Initiatives
+Added: In January 2020, we announced key modernization initiatives designed to take advantage of the significant investments we made in new technologies to build an improved operating infrastructure to upgrade products and deliver incremental cost efficiencies.
+Added: Our investments in modernization delivered approximately $100 million of cost savings in the aggregate.
+Added: In April 2020, we announced approximately $200 million of incremental in-year operating expense savings initiatives in response to the weaker economic environment caused by the COVID-19 pandemic.
+Added: We replicated the majority of those savings in 2021.
Impairment Charges
−Removed: As a result of uncertainty related to COVID-19 and its negative impact on our business and the public trading values of our debt and equity, we were required to perform interim impairment tests on our long-lived assets, intangible assets and indefinite-lived intangible assets as of March 31, 2020.
−Removed: The interim impairment tests resulted in a non-cash impairment of our Federal Communication Commission (“FCC”) licenses of $502.7 million and a non-cash impairment charge of $1.2 billion to reduce goodwill during the three months ended March 31, 2020.
−Removed: The Company performs its annual impairment test on goodwill and indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year.
+Added: As part of our operating-expense-savings initiatives, we have taken proactive steps to streamline our real estate footprint and reduce related structural lease expenses incurred by the Company.
+Added: These strategic actions typically result in impairment charges due to the write-down of the affected right-of-use assets and related fixed assets, including leasehold improvements.
+Added: For the year ended December 31, 2021, we recognized non-cash impairment charges of $57.7 million as a result of these cost-savings initiatives.
+Added: We perform our annual impairment test on goodwill and indefinite-lived intangible assets, including Federal Communications Commission ("FCC") licenses, as of July 1 of each year.
No impairment was required as part of the 2021 annual impairment testing.
−Removed: In addition, no further impairment was considered necessary in the fourth quarter of 2020.
+Added: As a result of the COVID-19 pandemic and the economic downturn starting in March 2020, the Company performed interim impairment tests as of March 31, 2020 on its indefinite-lived FCC licenses and goodwill, resulting in non-cash impairment charges of $502.7 million and $1.2 billion on its FCC licenses and goodwill, respectively.
For more information, see Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill, to the consolidated financial statements located in Item 8 of this Annual Report on Form 10-K for a further description of the impairment charges and annual impairment tests.
−Removed: While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our long-lived assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the economic downturn caused by the COVID-19 pandemic, as well as the timing of any recovery.
+Added: While we believe we made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our long-lived assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets.
If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.
+Added: In addition, future interest rate increases could result in future impairments.
Combined Results
−Removed: Our financial results for the periods from January 1, 2019 through May 1, 2019 and the year ended December 31, 2018 are referred to as those of the “Predecessor” period.
−Removed: Our financial results for the period from May 2, 2019 through December 31, 2019 and the year ended December 31, 2020 are referred to as those of the “Successor” period.
+Added: Our financial results for the period from January 1, 2019 through May 1, 2019 are referred to as the “Predecessor” period.
+Added: Our financial results for the period from May 2, 2019 through December 31, 2019, the year ended December 31, 2020 and the year ended December 31, 2021 are referred to as the “Successor” period.
Our results of operations as reported in our Consolidated Financial Statements for these periods are prepared in accordance with GAAP.
−Removed: Although GAAP requires that we report on our results for the period from January 1, 2019 through May 1, 2019 and the period from May 2, 2019 through December 31, 2019 separately, management views the Company’s operating results for the year ended December 31, 2019 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison to our results in the year ended December 31, 2020.
+Added: Although GAAP requires that we report on our results for the period from January 1, 2019 through May 1, 2019 and the period from May 2, 2019 through December 31, 2019 separately, management views the Company’s operating results for the year ended December 31, 2019 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison to our results in the years ended December 31, 2021 and 2020.
The Company cannot adequately benchmark the operating results of the period from May 2, 2019 through December 31, 2019 against any of the current or prior periods reported in its Consolidated Financial Statements without combining it with the period from January 1, 2019 through May 1, 2019 and does not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding the Company’s overall operating performance.
2 unchanged sentences
The combined results for the year ended December 31, 2019, which we refer to herein as the results for the “year ended December 31, 2019” represent the sum of the reported amounts for the Predecessor period from January 1, 2019 through May 1, 2019 and the Successor period from May 2, 2019 through December 31, 2019.
−Removed: These combined results are not considered to be prepared in accordance with GAAP and have not been prepared as pro forma results per applicable regulations.
+Added: These combined results are not
+Added: considered to be prepared in accordance with GAAP and have not been prepared as pro forma results per applicable regulations.
The combined operating results do not reflect the actual results we would have achieved absent our emergence from bankruptcy and may not be indicative of future results.
−Removed: Accordingly, the results for the years ended December 31, 2020, 2019 and 2018 may not be comparable, particularly for statement of operations line items significantly impacted by the Reorganization and Separation transactions, the impact of fresh start accounting on depreciation and amortization and the impact of interest expense not being recognized while we were in Chapter 11 bankruptcy protection from the Petition Date of March 14, 2018 to May 1, 2019.
+Added: Accordingly, the results for the year ended December 31, 2019 may not be comparable to the results for the years ended December 31, 2021 and 2020, particularly for statement of operations line items significantly impacted by the Reorganization and Separation transactions, the impact of fresh start accounting on depreciation and amortization and the impact of interest expense not being recognized while we were in Chapter 11 bankruptcy protection from the Petition Date of March 14, 2018 to May 1, 2019.
Executive Summary
−Removed: As 2020 began, we saw strong growth across our revenue streams in January and February, particularly from digital and from political advertising.
−Removed: However, while digital and political revenue continued to grow, the economic downturn as a result of the COVID-19 pandemic had a significant and negative impact on our other revenue streams beginning in March 2020 and continuing through the rest of 2020, including broadcast radio which is our largest revenue stream.
−Removed: Revenue from our Broadcast and Audio and Media Services revenue streams were positively impacted by political revenue as a result of 2020 being a presidential election year.
−Removed: Although revenue improved significantly from the low point through the remainder of 2020, we continued to experience a decline in advertising spend and the postponement or cancellation of certain tent-pole events drove an overall decrease in revenue for the year ended December 31, 2020 compared to the year ended December 31, 2019.
−Removed: The extent of the economic downturn and the timing of recovery, as well as the future impact on our operations, are subject to significant uncertainty.
−Removed: In an effort to further strengthen the Company's financial flexibility and efficiently manage through the COVID-19 pandemic, we implemented measures to cut costs and preserve cash.
−Removed: For additional information on these actions, see the Liquidity and Capital Resources - Anticipated Cash Requirements section below.
+Added: Although our results for the year ended 2021 continued to be impacted by the effects of the COVID-19 pandemic, our revenues increased significantly, including revenue from our Multiplatform segment, which includes our broadcast radio, networks and sponsorship and events businesses.
+Added: Digital revenue, including podcasting, continued to grow year-over-year.
The key developments in our business for the year ended December 31, 2021 are summarized below:
−Removed: • Effects of the COVID-19 pandemic adversely impacted revenue for all revenue streams, with the exception of political revenue.
−Removed: • We achieved approximately $250 million of cost savings in 2020.
−Removed: • Revenue of $2,948.2 million decreased 20.0% during 2020 compared to 2019.
−Removed: • Revenue decreased 1.9%, 46.6%, 21.5% and 8.8% in the first, second, third and fourth quarters of 2020, respectively, compared to the respective quarters in 2019.
−Removed: • Operating loss of $1,737.6 million was down from Operating income of $506.7 million in 2019.
−Removed: • Net loss of $1.9 billion in 2020, driven primarily by an impairment of $1.7 billion in the first quarter of 2020, as compared to Net income of $11.3 billion in 2019.
−Removed: • Adjusted EBITDA (1) of $538.7 million, was down from Adjusted EBITDA (1) of $1,000.7 million in 2019.
−Removed: • Cash flows provided by operating activities from continuing operations of $215.9 million decreased $245.5 million or 53.2% compared to 2019.
−Removed: • Free cash flow (2) of $130.7 million decreased $218.5 million or 62.6% compared to 2019.
+Added: • Consolidated Revenue of $3,558.3 million increased $610.1 million, or 20.7%, during 2021 compared to Consolidated Revenue of $2,948.2 million in 2020.
+Added: • Revenue and Segment Adjusted EBITDA from our Multiplatform Group increased $282.2 million and $259.9 million, respectively, compared to 2020.
+Added: • Revenue and Segment Adjusted EBITDA from our Digital Audio Group increased $360.1 million and $129.9 million, respectively, compared to 2020.
+Added: • Revenue and Segment Adjusted EBITDA from our Audio & Media Services Group decreased $26.8 million and $18.5 million, respectively, compared to 2020.
+Added: • Operating income of $154.9 million was up $1.9 billion from Operating loss of $1.7 billion in 2020.
+Added: • Net loss of $158.4 million in 2021 decreased $1.8 billion compared to Net loss of $1.9 billion in 2020.
+Added: • Adjusted EBITDA (1) of $811.1 million, was up $272.5 million from $538.7 million in 2020.
+Added: • Cash flows provided by operating activities from continuing operations of $330.6 million increased $114.6 million or 53.1% compared to 2020.
+Added: • Free cash flow (2) of $147.2 million improved from $130.7 million in 2020.
The table below presents a summary of our historical results of operations for the periods presented:
−Removed: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, %
+Added: (In thousands) Successor Company
+Added: Year Ended December 31, %
2021 2020 Change
1 unchanged sentence
Operating income (loss) $ 154,857 $ (1,737,624) NM
−Removed: Net income (loss) $ (1,915,222) $ 113,299 $ 11,165,113 $ 11,278,412 NM
−Removed: Cash provided by (used for) operating activities from continuing operations $ 215,945 $ 468,905 $ (7,505) $ 461,400 (53.2) %
+Added: Net loss $ (158,389) $ (1,915,222) NM
+Added: Cash provided by operating activities from continuing operations $ 330,573 $ 215,945 53.1 %
Adjusted EBITDA (1)
$ 811,133 $ 538,673 50.6 %
−Removed: Free cash flow from (used for) continuing operations (2)
+Added: Free cash flow from continuing operations (2)
$ 147,201 $ 130,740 12.6 %
2 unchanged sentences
Results of Operations
−Removed: The table below presents the comparison of our historical results of operations for the periods presented:
−Removed: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
−Removed: 2020 2019 2019 2019
+Added: The table below presents the comparison of our historical results of operations for the year ended December 31, 2021 to the year ended December 31, 2020:
+Added: Successor Company
+Added: (In thousands) Year Ended December 31,
Revenue $ 3,558,340 $ 2,948,218
1 unchanged sentence
Direct operating expenses (excludes depreciation and amortization) 1,324,657 1,137,807
−Removed: 1,163,148 878,956 381,184 1,260,140
Selling, general and administrative expenses (excludes depreciation and amortization) 1,519,355 1,395,010
−Removed: 1,225,097 897,670 427,230 1,324,900
−Removed: Corporate expenses (excludes depreciation and amortization)
−Removed: 144,572 136,171 53,647 189,818
Depreciation and amortization 469,417 402,929
2 unchanged sentences
Operating income (loss) 154,857 (1,737,624)
−Removed: Interest expense (income), net 343,745 266,773 (499) 266,274
−Removed: Loss on investments, net (9,346) (20,928) (10,237) (31,165)
+Added: Interest expense, net 332,384 343,745
+Added: Gain (loss) on investments, net 43,643 (9,346)
Equity in loss of nonconsolidated affiliates (1,138) (379)
−Removed: Other income (expense), net (7,751) (18,266) 23 (18,243)
−Removed: Reorganization items, net — — 9,461,826 9,461,826
−Removed: Income (loss) from continuing operations before income taxes (2,098,845) 133,390 9,519,085 9,652,475
+Added: Other expense, net (14,976) (7,751)
+Added: Loss before income taxes (149,998) (2,098,845)
Income tax benefit (expense) (8,391) 183,623
−Removed: Income (loss) from continuing operations (1,915,222) 113,299 9,479,990 9,593,289
−Removed: Income from discontinued operations, net of tax — — 1,685,123 1,685,123
−Removed: Net income (loss) (1,915,222) 113,299 11,165,113 11,278,412
+Added: Net loss (158,389) (1,915,222)
Less amount attributable to noncontrolling interest 810 (523)
−Removed: (523) 751 (19,028) (18,277)
−Removed: Net income (loss) attributable to the Company
−Removed: $ (1,914,699) $ 112,548 $ 11,184,141 $ 11,296,689
−Removed: The table below presents the comparison of our revenue streams for the periods presented:
−Removed: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, %
+Added: Net loss attributable to the Company $ (159,199) $ (1,914,699)
+Added: The table below presents the comparison of our revenue streams for the year ended December 31, 2021 to the year ended December 31, 2020:
+Added: Successor Company
+Added: (In thousands) Year Ended
+Added: December 31, %
2021 2020 Change
Broadcast Radio $ 1,812,252 $ 1,604,880 12.9 %
−Removed: Digital 474,371 273,389 102,789 376,178 26.1 %
Networks 503,052 484,950 3.7 %
Sponsorship and Events 160,322 107,654 48.9 %
−Removed: Audio and Media Services 274,749 167,292 69,362 236,654 16.1 %
Other 13,392 9,370 42.9 %
+Added: Multiplatform Group 2,489,018 2,206,854 12.8 %
+Added: Digital, excluding Podcast 581,918 372,687 56.1 %
+Added: Podcast 252,564 101,684 148.4 %
+Added: Digital Audio Group 834,482 474,371 75.9 %
+Added: Audio & Media Services Group 247,957 274,749 (9.8) %
Eliminations (13,117) (7,756)
Revenue, total $ 3,558,340 $ 2,948,218 20.7 %
−Removed: $ 2,948,218 $ 2,610,056 $ 1,073,471 $ 3,683,527 (20.0) %
−Removed: Consolidated results for the year ended December 31, 2020 compared to the combined results for the year ended December 31, 2019 were as follows:
−Removed: Revenue decreased $735.3 million during the year ended December 31, 2020 compared to 2019.
−Removed: The decrease in Revenue is attributable to the macroeconomic effects of COVID-19, which began to unfold into a global pandemic in early March 2020, resulting in a significant economic downturn due to the shut-down of businesses and shelter-in-place orders.
−Removed: Strong revenue growth in January and February was followed by a sharp decline in revenue in March, which continued through the end of 2020, with the exception of October, which saw consolidated revenue growth as a result of strong political advertising spend, resulting in significant revenue declines impacting most of our revenue streams, primarily as a result of a decrease in broadcast radio advertising spend as a result of the COVID-19 pandemic.
−Removed: Broadcast revenue decreased $628.4 million, driven by a $432.7 million decrease in Local spot revenue and a $195.7 million decrease in National spot revenue.
−Removed: The decrease in Broadcast revenue was partially offset by a $70.5 million increase in political revenue as a result of 2020 being a presidential election year.
−Removed: Revenue from our Networks businesses, including both Premiere and Total Traffic & Weather, was also impacted by the downturn, resulting in a decrease of $129.8 million.
−Removed: Revenue from Sponsorship and Events decreased by $101.9 million, primarily as a result of the cancellations of events in response to the COVID-19 pandemic.
−Removed: Digital revenue increased $98.2 million, driven by continued growth in podcasting, including for both new and existing podcasts, which continued to experience increased advertiser demand.
−Removed: Audio and Media Services revenue increased $38.1 million primarily due to a $61.8 million increase in political revenue as a result of 2020 being a presidential election year, partially offset by the effects of COVID-19 on advertising spend.
+Added: Consolidated results for the year ended December 31, 2021 compared to the consolidated results for the year ended December 31, 2020 were as follows:
+Added: Consolidated revenue increased $610.1 million during the year ended December 31, 2021 compared to 2020.
+Added: The increase in Consolidated revenue is attributable to the continuing growth of our operating businesses and the continued recovery from the macroeconomic effects of COVID-19.
+Added: Multiplatform revenue increased $282.2 million, primarily resulting from stronger demand for broadcast advertising compared to the prior year.
+Added: Digital Audio revenue increased $360.1 million, driven primarily by continuing increases in demand for digital advertising, including continued growth in podcasting.
+Added: Audio & Media Services revenue decreased $26.8 million primarily due to decreases in political advertising revenue, partially offset by the continued recovery from the impact of COVID-19.
Direct Operating Expenses
−Removed: Direct operating expenses decreased $97.0 million during the year ended December 31, 2020 compared to 2019.
−Removed: The decrease in Direct operating expenses was driven primarily by lower employee compensation expenses resulting from our modernization initiatives and cost reduction initiatives taken in response to the COVID-19 pandemic.
−Removed: In addition, variable operating expenses, including music license and performance royalty fees, decreased in relation to lower revenue recognized during the year.
−Removed: Variable expenses related to events also decreased as a result of the postponement or cancellation of events in response to the COVID-19 pandemic.
−Removed: The decrease in Direct operating expenses was partially offset by severance payments and other costs specific to our modernization initiatives, as well as higher content costs from higher podcasting and digital subscription revenue.
+Added: Direct operating expenses increased $186.9 million during the year ended December 31, 2021 compared to 2020.
+Added: The increase in Direct operating expenses was primarily driven by higher variable expenses resulting from our significant increase in revenue, including profit sharing expenses and third-party digital costs, as well as variable national and local event expenses resulting from the return of live events.
Selling, General and Administrative (“SG&A”) Expenses
−Removed: SG&A expenses decreased $99.8 million during the year ended December 31, 2020 compared to 2019.
−Removed: The decrease in SG&A expenses was driven primarily by lower employee compensation expenses resulting from cost reduction initiatives taken in response to the COVID-19 pandemic, along with lower sales commissions, which were impacted by the decrease in revenue.
−Removed: Travel and entertainment expenses also decreased primarily as a result of operating expense saving initiatives put into place in response to the COVID-19 pandemic, as well as trade and barter expenses primarily driven by lower Local trade expenses, which declined in line with lower trade revenue.
−Removed: The decrease in SG&A expenses was partially offset by costs incurred in relation to our modernization initiatives announced in the first quarter of 2020 and higher bad debt expense.
−Removed: Corporate Expenses
−Removed: Corporate expenses decreased $45.2 million during the year ended December 31, 2020 compared to 2019, as a result of lower employee compensation, including variable incentive expenses and employee benefits, resulting from cost reduction initiatives taken in response to the COVID-19 pandemic.
−Removed: The decrease in Corporate expenses was partially offset by costs incurred to support our modernization initiatives.
+Added: SG&A expenses increased $124.3 million during the year ended December 31, 2021 compared to 2020.
+Added: The increase in Consolidated SG&A expenses was driven primarily by increased variable employee compensation expenses resulting primarily from higher bonus expense based on financial performance and higher sales commission expenses as a result of higher revenue.
+Added: In the prior year the Company did not pay bonuses to the vast majority of employees.
+Added: In addition, increased headcount resulting from investments in our digital businesses contributed to the increase in Consolidated SG&A expenses.
+Added: These increases were partially offset by lower bad debt expense as well as lower employee compensation and other expenses resulting from our modernization and cost-reduction initiatives.
Depreciation and Amortization
−Removed: Depreciation and amortization increased $100.5 million during 2020 compared to 2019, primarily as a result of the application of fresh start accounting, which resulted in significantly higher values of our tangible and intangible long-lived assets.
+Added: Depreciation and amortization increased $66.5 million during 2021 compared to 2020, primarily as a result of increased capital expenditures, the impact of acquired businesses, and accelerated amortization of certain intangible assets.
Impairment Charges
1 unchanged sentence
In addition, we test for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired.
−Removed: As discussed above, as a result of the assumed potential adverse effects caused by the COVID-19 pandemic on estimated future cash flows, we performed an interim impairment test as of March 31, 2020 and we recognized non-cash impairment charges to our indefinite-lived intangible assets and goodwill of $1.7 billion in the first quarter of 2020.
−Removed: No impairment charges were recorded in the remainder of 2020 in connection with our annual impairment test which was performed in the third quarter of 2020.
−Removed: We recognized non-cash impairment charges of $91.4 million in the first quarter of 2019 on our indefinite-lived FCC licenses as a result of an increase in our weighted average cost of capital.
−Removed: See Note 7, Property, Plant and Equipment, Intangible Assets and Goodwill, to the consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K for a further description of the impairment charges.
+Added: As part of our operating expense-savings initiatives, we have taken strategic actions to streamline our real estate footprint and related expenses, resulting in impairment charges due to the write-down of right-of-use assets and related fixed assets, including leasehold improvements.
+Added: During the year ended December 31, 2021, we recognized non-cash impairment charges of $57.7 million related to certain of our right-of-use assets and leasehold improvements as a result of these cost-savings initiatives.
+Added: In the year ended December 31, 2020, we recognized non-cash impairment charges to our goodwill and FCC licenses of $1.7 billion as a result of the adverse effects caused by the COVID-19 pandemic on estimated future cash flows in the first quarter of 2020.
+Added: No impairment charges were recorded in 2021 in connection with our annual impairment testing of goodwill and FCC licenses.
Other Operating Expense, Net
−Removed: Other operating expense, net of $11.3 million and $8.2 million in 2020 and 2019, respectively, primarily related to net losses recognized on the disposal of assets.
+Added: Other operating expense, net of $32.3 million in 2021 related primarily to net losses recognized on asset disposals in connection with our real estate optimization initiatives.
+Added: Other operating expense, net of $11.3 million in 2020, related primarily to net losses recognized on the disposal of assets.
Interest Expense, Net
−Removed: Interest expense, net increased $77.5 million during 2020 compared to 2019 as a result of the interest recognized on the new debt issued in connection with our emergence from the Chapter 11 Cases.
−Removed: During the period from March 14, 2018 to May 1, 2019, while the Company was a debtor-in-possession, no interest expense was recognized on pre-petition debt.
−Removed: The increase was offset by a decrease in interest expense driven by the impact of lower LIBOR rates, as well as the impact of the amendment to the Term Loan Facility in the first quarter of 2020, resulting in a 1.00% reduction in the Term Loan Facility interest rate.
−Removed: In the Predecessor period, we ceased to accrue interest expense on long-term debt, which was reclassified as Liabilities subject to compromise as of the Petition Date, resulting in $533.4 million in contractual interest not being accrued on pre-petition indebtedness for the period from January 1, 2019 to May 1, 2019.
−Removed: Loss on Investments, net
−Removed: During the years ended December 31, 2020 and 2019, we recognized loss on investments, net of $9.3 million and $31.2 million, respectively, primarily in connection with other-than-temporary declines in the values of certain of our investments.
+Added: Interest expense, net decreased $11.4 million during 2021 compared to 2020 primarily as a result of the impact of lower LIBOR rates and the $250.0 million voluntary repayment of our term loan facilities and amended incremental term loan facility in July 2021, partially offset by the issuance of incremental term loans in the third quarter of 2020.
+Added: Gain (Loss) on Investments, net
+Added: During the year ended December 31, 2021, we recognized a gain on investments, net of $43.6 million, primarily related to the sale of our investment in the San Antonio Spurs, partially offset by impairments of certain investments.
+Added: During the year ended December 31, 2020, we recognized loss on investments, net of $9.3 million, primarily in connection with declines in the values of certain of our investments.
Other Expense, Net
−Removed: Other expense, net was $7.8 million for the year ended December 31, 2020, which related primarily to costs incurred to amend our Term Loan Facility and professional fees incurred in connection with the Chapter 11 Cases in the Successor period.
−Removed: Other expense, net was $18.2 million for the year ended December 31, 2019, which related primarily to professional fees incurred in connection with the Chapter 11 Cases in the Successor period.
−Removed: Such expenses were included within Reorganization items, net in the Predecessor period while the Company was a debtor-in-possession.
−Removed: Reorganization Items, Net
−Removed: During 2019, we recognized Reorganization items, net of $9,461.8 million related to our emergence from the Chapter 11 Cases, which consisted primarily of the net gain from the consummation of the Plan of Reorganization and the related settlement of liabilities.
−Removed: In addition, Reorganization items, net included professional fees recognized between the March 14, 2018 Petition Date and the May 1, 2019 Effective Date in connection with the Chapter 11 Cases.
−Removed: See Note 3, Fresh Start Accounting to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.
+Added: Other expense, net was $15.0 million for the year ended December 31, 2021, which related primarily to the write-off of unamortized debt issuance costs upon our voluntary partial prepayment of our Term Loan Facilities in July 2021, and finance lease termination payments.
+Added: Other expense, net was $7.8 million for the year ended December 31, 2020, which related primarily to costs incurred to amend our Term Loan Facility and professional fees.
Income Tax Expense (Benefit)
The effective tax rate for the year ended December 31, 2021 was (5.6)%.
+Added: The effective tax rate for the year ended December 31, 2021 was primarily impacted by the increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards, due to uncertainty regarding the Company’s ability to utilize those assets in future periods.
+Added: The effective tax rate for the year ended December 31, 2020 was 8.7%.
The effective tax rate for the year ended December 31, 2020 was primarily impacted by the impairment charges discussed above.
1 unchanged sentence
These deferred tax adjustments were partially offset by valuation allowances adjustments recorded during the year against certain federal and state deferred tax assets such as net operating loss carryforwards and disallowed interest carryforwards due to the uncertainty of the ability to utilize those assets in future periods.
−Removed: The Successor Company’s effective tax rate for the period from May 2, 2019 through December 31, 2019 was 15.1%.
−Removed: The effective tax rate for the Successor period was primarily impacted by deferred tax benefits recorded for changes in estimates related to the carryforward tax attributes that are expected to survive the emergence from bankruptcy and deferred tax adjustments associated with the filing of the Company’s 2018 tax returns during the fourth quarter of 2019.
−Removed: The primary change to the 2018 tax return filings, when compared to the provision estimates, was the Company's decision to elect out of the first-year bonus depreciation rules for the 2018 year for all qualified capital expenditures.
−Removed: This resulted in less tax depreciation deductions for tax purposes for the 2018 year and higher adjusted tax basis for our fixed assets as of the Effective Date.
−Removed: The Predecessor Company’s effective tax rate for the period from January 1, 2019 through May 1, 2019 was 0.4%.
−Removed: The income tax expense for the period from January 1, 2019 through May 1, 2019 (Predecessor) primarily consisted of the income tax impacts from reorganization and fresh start adjustments, including adjustments to our valuation allowance.
−Removed: The Company recorded income tax benefits of $102.9 million for reorganization adjustments in the Predecessor period, primarily consisting of:
−Removed: (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;
−Removed: (2) tax benefit for the reduction in deferred tax liabilities attributed primarily to long-term debt that was discharged upon emergence;
−Removed: (3) tax benefit for the effective settlement of liabilities for unrecognized tax benefits that were discharged upon emergence;
−Removed: and (4) tax benefit for the reduction in valuation allowance resulting from the adjustments described above.
−Removed: The Company recorded income tax expense of $185.4 million for fresh start adjustments in the Predecessor period, consisting of $529.1 million tax expense for the increase in deferred tax liabilities resulting from fresh start accounting adjustments, which was partially offset by $343.7 million tax benefit for the reduction in the valuation allowance on our deferred tax assets.
−Removed: Net Income (Loss) Attributable to the Company
−Removed: Net income (loss) attributable to the Company decreased $13.2 billion to a Net loss of $1.9 billion during the year ended December 31, 2020 compared to net income of $11.3 billion during the year ended December 31, 2019.
−Removed: The Net loss attributable to the Company for the year ended December 31, 2020 primarily related to the non-cash impairment charges to our indefinite-lived intangible assets and goodwill of $1.7 billion recognized in the first quarter of 2020.
−Removed: In 2019, the Net income attributable to the Company primarily related to the recognition of net gain from the consummation of the Plan of Reorganization and the related settlement of liabilities.
−Removed: The comparison of our combined results for the year ended December 31, 2019 to the consolidated results of year ended December 31, 2018 is as follows:
−Removed: (In thousands) Successor Company Predecessor Company Non-GAAP Combined Predecessor Company
−Removed: Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31,
+Added: Net Loss Attributable to the Company
+Added: Net loss attributable to the Company decreased to $159.2 million during the year ended December 31, 2021 compared to Net loss attributable to the Company of $1.9 billion during the year ended December 31, 2020, primarily as a result of the impairment charge recognized during the first quarter of 2020, the increase in revenue from the continuing growth of our operating businesses and the continued growth from the recovery from the macroeconomic effects of the COVID-19 pandemic.
+Added: Multiplatform Group Results
+Added: (In thousands) Successor Company
+Added: December 31, %
+Added: 2021 2020 Change
+Added: Revenue $ 2,489,018 $ 2,206,854 12.8 %
+Added: Operating expenses (1)
1,745,680 1,723,449 1.3 %
+Added: Segment Adjusted EBITDA $ 743,338 $ 483,405 53.8 %
+Added: Segment Adjusted EBITDA margin 29.9 % 21.9 %
+Added: (1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
+Added: Revenue from our Multiplatform Group increased $282.2 million compared to 2020, primarily as a result of the continued recovery from the negative impact of the COVID-19 pandemic on our radio business.
+Added: The increase in revenue was partially offset by lower political revenue compared to the prior year due to 2020 being a presidential election year.
+Added: Broadcast revenue increased $207.4 million, or 12.9%, year-over-year, while Networks grew $18.1 million, or 3.7%, year-over-year.
+Added: Revenue from Sponsorship and Events increased by $52.7 million, or 48.9%, year-over-year, primarily as a result of the return of live events.
+Added: Operating expenses increased $22.2 million, driven primarily by higher variable employee compensation expense including commission and bonus expense resulting from higher revenues and profitability, as well as higher talent and profit sharing fees, both driven by higher revenue, and higher expenses related to the return of live events.
+Added: The increase was partially offset by lower bad debt expense as well as lower employee compensation and other expenses resulting from our modernization and cost-reduction initiatives.
+Added: Digital Audio Group Results
+Added: (In thousands) Successor Company
+Added: December 31, %
+Added: 2021 2020 Change
Revenue $ 834,482 $ 474,371 75.9 %
Operating expenses (1)
+Added: 573,835 343,598 67.0 %
+Added: Segment Adjusted EBITDA $ 260,647 $ 130,773 99.3 %
+Added: Segment Adjusted EBITDA margin 31.2 % 27.6 %
+Added: (1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
+Added: Revenue from our Digital Audio Group increased $360.1 million compared to the prior year, led by Digital, excluding Podcast revenue, which increased by $209.2 million, or 56.1%, year-over-year, and Podcast revenue, which increased by $150.9 million, or 148.4%, year-over-year, both of which were driven by increased content and demand for digital advertising.
+Added: Digital Audio Group revenues increased as a result of general increased demand for digital advertising, the growing popularity of podcasting, the continued addition of premium content to our industry-leading podcast business and our improving ability to monetize our digital audiences and inventory utilizing our sales force and advertising technology platforms, partially driven by investments in the digital space.
+Added: Operating expenses increased $230.2 million in connection with our Digital Audio Group’s significant revenue growth, due to the impact of increased variable employee compensation expense, variable content, talent costs, and third-party digital costs due to higher revenue, as well as increased content and production costs primarily resulting from the development of new podcasts.
+Added: In addition, operating expenses increased due to additional headcount resulting from investments in the digital space.
+Added: Audio & Media Services Group Results
+Added: (In thousands) Successor Company
+Added: December 31, %
+Added: 2021 2020 Change
+Added: Revenue $ 247,957 $ 274,749 (9.8) %
+Added: Operating expenses (1)
+Added: 171,766 180,081 (4.6) %
+Added: Segment Adjusted EBITDA $ 76,191 $ 94,668 (19.5) %
+Added: Segment Adjusted EBITDA margin 30.7 % 34.5 %
+Added: (1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
+Added: Revenue from our Audio & Media Services Group decreased $26.8 million compared to 2020 due to lower political advertising revenue, partially offset by the continued recovery from the negative impact of the COVID-19 pandemic.
+Added: Operating expenses decreased $8.3 million primarily as a result of lower sales commissions due to lower revenues and lower expenses due to our modernization and cost-reduction initiatives.
+Added: The comparison of our consolidated results for the year ended December 31, 2020 to the combined results of year ended December 31, 2019 is as follows:
+Added: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
+Added: 2020 2019 2019 2019
+Added: Revenue $ 2,948,218 $ 2,610,056 $ 1,073,471 $ 3,683,527
+Added: Operating expenses:
Direct operating expenses (excludes depreciation and amortization)
2 unchanged sentences
1,395,010 1,052,484 491,449 1,543,933
−Removed: Corporate expenses (excludes depreciation and amortization)
−Removed: 136,171 53,647 189,818 184,216
Depreciation and amortization 402,929 249,623 52,834 302,457
1 unchanged sentence
Other operating expense, net 11,344 8,000 154 8,154
−Removed: Operating income 439,636 67,040 506,676 690,144
+Added: Operating income (loss) (1,737,624) 439,636 67,040 506,676
Interest expense (income), net 343,745 266,773 (499) 266,274
Loss on investments, net (9,346) (20,928) (10,237) (31,165)
−Removed: Equity in earnings (loss) of nonconsolidated affiliates
−Removed: (279) (66) (345) 116
+Added: Equity in loss of nonconsolidated affiliates (379) (279) (66) (345)
Other income (expense), net (7,751) (18,266) 23 (18,243)
1 unchanged sentence
Income (loss) from continuing operations before income taxes (2,098,845) 133,390 9,519,085 9,652,475
−Removed: Income tax expense (20,091) (39,095) (59,186) (13,836)
+Added: Income tax (benefit) expense 183,623 (20,091) (39,095) (59,186)
Income (loss) from continuing operations (1,915,222) 113,299 9,479,990 9,593,289
−Removed: Income (loss) from discontinued operations, net of tax — 1,685,123 1,685,123 (164,667)
+Added: Income from discontinued operations, net of tax — — 1,685,123 1,685,123
Net income (loss) (1,915,222) 113,299 11,165,113 11,278,412
4 unchanged sentences
The table below presents the comparison of our revenue streams for the periods presented:
−Removed: (In thousands) Successor Company Predecessor Company Non-GAAP Combined Predecessor Company
−Removed: Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31, %
+Added: Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: (In thousands) Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, %
2020 2019 2019 2019 Change
Broadcast Radio $ 1,604,880 $ 1,575,382 $ 657,864 $ 2,233,246 (28.1) %
−Removed: Digital 273,389 102,789 376,178 284,565 32.2 %
Networks 484,950 425,631 189,088 614,719 (21.1) %
Sponsorship and Events 107,654 159,187 50,330 209,517 (48.6) %
−Removed: Audio and Media Services 167,292 69,362 236,654 264,061 (10.4) %
Other 9,370 14,211 6,606 20,817 (55.0) %
+Added: Multiplatform Group 2,206,854 2,174,411 903,888 3,078,299 (28.3) %
+Added: Digital, excluding Podcast 372,687 231,160 91,695 322,855 15.4 %
+Added: Podcast 101,684 42,229 11,094 53,323 90.7 %
+Added: Digital Audio Group 474,371 273,389 102,789 376,178 26.1 %
+Added: Audio & Media Services Group 274,749 167,292 69,362 236,654 16.1 %
Eliminations (7,756) (5,036) (2,568) (7,604)
Revenue, total $ 2,948,218 $ 2,610,056 $ 1,073,471 $ 3,683,527 (20.0) %
−Removed: $ 2,610,056 $ 1,073,471 $ 3,683,527 $ 3,611,323 2.0 %
−Removed: Revenue increased $72.2 million during the year ended December 31, 2019 compared to 2018.
−Removed: The increase in revenue is primarily due to higher digital revenue of $91.6 million driven by growth in podcasting, including the impact of our acquisition of Stuff Media in October 2018, as well as other digital revenue, including live radio and other on-demand services, and revenue from our Network businesses, which increased $32.4 million.
−Removed: Broadcast revenue decreased $30.8 million, due to a $38.2 million decrease in political revenue as a result of 2018 being a mid-term congressional election year, partially offset by growth generated by our programmatic offerings.
−Removed: Audio and Media Services revenue decreased $27.4 million due to a $34.5 million decrease in political revenue.
−Removed: Political revenue for the years ended December 31, 2019 and 2018 was $28.8 million and $103.0 million, respectively.
+Added: Consolidated revenue decreased $735.3 million during the year ended December 31, 2020 compared to 2019.
+Added: The decrease in Consolidated revenue is attributable to the macroeconomic effects of COVID-19, which began to unfold into a global pandemic in early March 2020, resulting in a significant economic downturn due to the shut-down of businesses and shelter-in-place orders, resulting in significant revenue declines impacting most of our revenue streams, primarily as a result of a decrease in broadcast radio advertising spend as a result of the COVID-19 pandemic.
+Added: This decrease was partially offset by growth from our digital revenue streams.
+Added: Multiplatform Group revenue decreased $871.4 million driven primarily by a decrease in Broadcast radio revenue as a result of the economic impacts of the COVID-19 pandemic.
+Added: Digital Audio Group revenue increased $98.2 million, driven by continued growth in both podcasting and digital, excluding podcasting revenues each of which continued to experience increased advertiser demand.
+Added: Audio and Media Services Group revenue increased $38.1 million primarily due to an increase in political revenue as a result of 2020 being a presidential election year, partially offset by the effects of COVID-19 on advertising spend.
Direct Operating Expenses
−Removed: Direct operating expenses increased $127.7 million during the year ended December 31, 2019 compared to 2018.
−Removed: Higher direct operating expenses were driven primarily by higher compensation-related expenses, including from the acquisitions of Stuff Media and Jelli in the fourth quarter of 2018, as well as higher music license fees, digital royalties and content costs from higher podcasting, subscription and other digital revenue.
−Removed: Included in this increase is the impact of updated estimates to music license fee expenses primarily related to prior years for which payments were made under interim agreements with performance rights organizations and that are subject to ongoing negotiations.
−Removed: The increase in direct operating expenses also includes a $6.3 million increase in lease expense due to the impact of the adoption of the new leasing standard in the first quarter of 2019 and the adoption of fresh start accounting.
+Added: Consolidated direct operating expenses decreased $93.1 million during the year ended December 31, 2020 compared to 2019.
+Added: The decrease in Consolidated direct operating expenses was driven primarily by lower employee compensation expenses resulting from our modernization initiatives and cost reduction initiatives taken in response to the COVID-19 pandemic.
+Added: In addition, variable operating expenses, including music license and performance royalty fees, decreased in relation to lower revenue recognized during the year.
+Added: Variable expenses related to events also decreased as a result of the postponement or cancellation of events in response to the COVID-19 pandemic.
+Added: The decrease in Direct operating expenses was partially offset by severance payments and other costs specific to our modernization initiatives, as well as higher content costs from higher podcasting and digital subscription revenue.
SG&A Expenses
−Removed: SG&A expenses decreased $25.3 million during the year ended December 31, 2019 compared to 2018.
−Removed: The decrease in our SG&A expenses was due primarily to lower commissions as a result of our revenue mix, lower bad debt expense, resulting from improved collections, and lower trade and barter expenses, primarily resulting from timing.
−Removed: The decrease in SG&A expenses was partially offset by higher third-party digital fees, driven by the increase in digital revenue, along with higher employee costs, primarily resulting from the acquisitions of Stuff Media and Jelli in the fourth quarter of 2018.
−Removed: Corporate Expenses
−Removed: Corporate expenses increased $5.6 million during the year ended December 31, 2019 compared to 2018 as a result of higher share-based compensation expense, which increased $24.8 million as a result of our equity compensation plan entered into in connection with our Plan of Reorganization.
−Removed: This increase was partially offset by lower employee benefit costs and lower amortization of retention bonuses related to the bankruptcy for which amortization ceased on the Effective Date.
+Added: Consolidated SG&A expenses decreased $148.9 million during the year ended December 31, 2020 compared to 2019.
+Added: The decrease in Consolidated SG&A expenses was driven primarily by lower employee compensation expenses resulting from cost reduction initiatives taken in response to the COVID-19 pandemic, along with lower sales commissions, which were impacted by the decrease in revenue.
+Added: Travel and entertainment expenses also decreased primarily as a result of operating expense saving initiatives put into place in response to the COVID-19 pandemic, as well as trade and barter expenses primarily driven by lower Local trade expenses, which declined in line with lower trade revenue.
+Added: The decrease in SG&A expenses was partially offset by costs incurred in relation to our modernization initiatives announced in the first quarter of 2020 and higher bad debt expense.
Depreciation and Amortization
−Removed: Depreciation and amortization increased $90.5 million during the year ended December 31, 2019 compared to 2018 primarily as a result of the application of fresh start accounting, which resulted in significantly higher values of our tangible and intangible long-lived assets.
+Added: Depreciation and amortization increased $100.5 million during 2020 compared to 2019, primarily as a result of the application of fresh start accounting, which resulted in significantly higher values of our tangible and intangible long-lived assets.
Impairment Charges
−Removed: We recognized non-cash impairment charges of $91.4 million in the first quarter of 2019 on our indefinite-lived FCC licenses as a result of an increase in the weighted average cost of capital.
−Removed: During 2018 we recorded impairment charges of $33.2 million related primarily to several of our Audio markets.
+Added: We perform our annual impairment test on our goodwill and FCC licenses as of July 1 of each year.
+Added: In addition, we test for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired.
+Added: As discussed above, as a result of the assumed potential adverse effects caused by the COVID-19 pandemic on estimated future cash flows, we performed an interim impairment test as of March 31, 2020 and we recognized non-cash impairment charges to our indefinite-lived intangible assets and goodwill of $1.7 billion in the first quarter of 2020.
+Added: No impairment charges were recorded in the remainder of 2020 in connection with our annual impairment test which was performed in the third quarter of 2020.
+Added: We recognized non-cash impairment charges of $91.4 million in the first quarter of 2019 on our indefinite-lived FCC licenses as a result of an increase in our weighted average cost of capital.
+Added: See Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill , to the consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K for a further description of the impairment charges.
Other Operating Expense, Net
−Removed: Other operating expense, net of $8.2 million and $9.3 million in 2019 and 2018, respectively, was primarily related to net losses recognized on the disposal of assets.
+Added: Other operating expense, net of $11.3 million and $8.2 million in 2020 and 2019, respectively, primarily related to net losses recognized on the disposal of assets.
Interest Expense, Net
−Removed: Interest expense, net decreased $68.5 million during 2019 compared to 2018 as a result of the interest recognized in the period from January 1, 2018 to the March 14, 2018 petition date on our pre-petition debt exceeding the interest recognized in the period from May 2, 2019 to December 31, 2019 on our new debt issued in connection with our emergence from the Chapter 11 Cases.
+Added: Interest expense, net increased $77.5 million during 2020 compared to 2019 as a result of the interest recognized on the new debt issued in connection with our emergence from the Chapter 11 Cases.
During the period from March 14, 2018 to May 1, 2019, while the Company was a debtor-in-possession, no interest expense was recognized on pre-petition debt.
+Added: The increase was partially offset by a decrease in interest expense driven by the impact of lower LIBOR rates, as well as the impact of the amendment to the Term Loan Facility in the first quarter of 2020, resulting in a 1.00% reduction in the Term Loan Facility interest rate.
+Added: In the Predecessor period, we ceased to accrue interest expense on long-term debt, which was reclassified as Liabilities subject to compromise as of the Petition Date, resulting in $533.4 million in contractual interest not being accrued on pre-petition indebtedness for the period from January 1, 2019 to May 1, 2019.
Loss on Investments, net
−Removed: During the year ended December 31, 2019, we recognized a loss of $31.2 million, primarily in connection with other-than-temporary declines in the values of certain of our investments.
−Removed: Equity in Loss of Nonconsolidated Affiliates
−Removed: During the year ended December 31, 2019 we recognized a net loss of $0.3 million related to equity-method investments.
−Removed: During the year ended December 31, 2018, we recognized net earnings of $0.1 million related to equity-method investments.
+Added: During the years ended December 31, 2020 and 2019, we recognized loss on investments, net of $9.3 million and $31.2 million, respectively, primarily in connection with declines in the values of certain of our investments.
Other Expense, Net
+Added: Other expense, net was $7.8 million for the year ended December 31, 2020, which related primarily to costs incurred to amend our Term Loan Facility and professional fees incurred in connection with the Chapter 11 Cases.
Other expense, net was $18.2 million for the year ended December 31, 2019, which related primarily to professional fees incurred in connection with the Chapter 11 Cases in the Successor period.
Such expenses were included within Reorganization items, net in the Predecessor period while the Company was a debtor-in-possession.
−Removed: Other expense, net was $23.0 million for the year ended December 31, 2018, which related primarily to professional fees incurred directly in connection with the Chapter 11 Cases before the March 14, 2018 Petition Date.
−Removed: Such expenses were included within Reorganization items, net in the post-petition period while the Company was a debtor-in-possession.
Reorganization Items, Net
1 unchanged sentence
In addition, Reorganization items, net included professional fees recognized between the March 14, 2018 Petition Date and the May 1, 2019 Effective Date in connection with the Chapter 11 Cases.
−Removed: See Note 3 to our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
+Added: See Note 15, Fresh Start Accounting , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.
Income Tax Benefit (Expense)
+Added: The effective tax rate for the year ended December 31, 2020 was 8.7%.
+Added: The effective tax rate for the year ended December 31, 2020 was primarily impacted by the impairment charges discussed above.
+Added: In addition, we recorded deferred tax adjustments to state net operating losses and federal and state disallowed interest carryforwards as a result of the filing of 2019 tax returns and certain legal entity restructuring completed during the period.
+Added: These deferred tax adjustments were partially offset by valuation allowances adjustments recorded during the year against certain federal and state deferred tax assets such as net operating loss carryforwards and disallowed interest carryforwards due to the uncertainty of the ability to utilize those assets in future periods.
The Successor Company’s effective tax rate for the period from May 2, 2019 through December 31, 2019 was 15.1%.
10 unchanged sentences
The Company recorded income tax expense of $185.4 million for fresh start adjustments in the Predecessor period, consisting of $529.1 million tax expense for the increase in deferred tax liabilities resulting from fresh start accounting adjustments, which was partially offset by $343.7 million tax benefit for the reduction in the valuation allowance on our deferred tax assets.
−Removed: The effective tax rate for the year ended December 31, 2018 was (57.3)%.
−Removed: The effective tax rate for 2018 was primarily impacted by $11.3 million of deferred tax expense attributed to the valuation allowance recorded against federal and state deferred tax assets generated in the period due to the uncertainty of the ability to realize those assets in future periods.
Net Income (Loss) Attributable to the Company
−Removed: Net income attributable to the Company increased $11.5 billion to $11.3 billion during the year ended December 31,
−Removed: 2019 compared to a net loss of $201.9 million during the year ended December 31, 2018, primarily due to the net gain from the consummation of the Plan of Reorganization and the related settlement of liabilities.
−Removed: Non-GAAP Financial Measures
−Removed: Reconciliations of Operating Income (Loss) to Adjusted EBITDA
+Added: Net income (loss) attributable to the Company decreased $13.2 billion to a Net loss of $1.9 billion during the year ended December 31, 2020 compared to net income of $11.3 billion during the year ended December 31, 2019.
+Added: The Net loss attributable to the Company for the year ended December 31, 2020 primarily related to the $1.7 billion non-cash impairment charges to our indefinite-lived intangible assets and goodwill recognized in the first quarter of 2020.
+Added: In 2019, the Net income attributable to the Company primarily related to the recognition of net gain from the consummation of the Plan of Reorganization and the related settlement of liabilities.
+Added: Multiplatform Group Results
(In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
+Added: December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, %
+Added: 2020 2019 2019 2019 Change
+Added: Revenue $ 2,206,854 $ 2,174,411 $ 903,888 $ 3,078,299 (28.3) %
+Added: Operating expenses (1)
1,723,449 1,381,073 635,205 2,016,278 (14.5) %
+Added: Segment Adjusted EBITDA $ 483,405 $ 793,338 $ 268,683 $ 1,062,021 (54.5) %
+Added: Segment Adjusted EBITDA margin 21.9 % 36.5 % 29.7 % 34.5 %
+Added: (1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
+Added: Revenue from our Multiplatform Group decreased $871.4 million compared to the comparative period in the prior year, primarily as a result of the negative impact of the COVID-19 pandemic on our radio business.
+Added: Broadcast revenue decreased $628.4 million, or 28.1%, year-over-year.
+Added: The decrease in Broadcast radio revenue was partially offset by a $70.5 million increase in political revenue as a result of 2020 being a presidential election year.
+Added: Revenue from our Networks businesses, including both Premiere and Total Traffic & Weather, was also impacted by the downturn, resulting in a decrease of $129.8 million, or 21.1%.
+Added: Revenue from Sponsorship and Events decreased by $101.9 million, or 48.6%, primarily as a result of the cancellations of events in response to the COVID-19 pandemic.
+Added: Operating expenses decreased $292.8 million, driven primarily by lower employee compensation expenses resulting from our modernization initiatives and cost reduction initiatives taken in response to the COVID-19 pandemic.
+Added: In addition, variable operating expenses, including sales commissions, trade and barter expenses and music license fees, decreased in relation to lower revenue recognized during the year.
+Added: Variable expenses related to events also decreased as a result of the postponement or cancellation of events in response to the COVID-19 pandemic.
+Added: These decreases were partially offset by higher bad debt expense.
+Added: Digital Audio Group Results
+Added: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, %
+Added: 2020 2019 2019 2019 Change
+Added: Revenue $ 474,371 $ 273,389 $ 102,789 $ 376,178 26.1 %
+Added: Operating expenses (1)
+Added: 343,598 194,366 88,621 282,987 21.4 %
+Added: Segment Adjusted EBITDA $ 130,773 $ 79,023 $ 14,168 $ 93,191 40.3 %
+Added: Segment Adjusted EBITDA margin 27.6 % 28.9 % 13.8 % 24.8 %
+Added: (1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
+Added: Revenue from our Digital Audio Group increased $98.2 million compared to the prior year driven by Podcast revenue, which increased by $48.4 million, or 90.7%, year-over-year, driven by continued growth in podcasting, including for both new and existing podcasts, and Digital, excluding Podcast revenue, which increased by $49.8 million, or 15.4%, year-over-year, driven by increased demand for digital advertising.
+Added: Digital Audio Group revenues increased as a result of general increased demand for digital advertising, the growing popularity of podcasting, the continued addition of premium content to our industry-leading podcast business and our improving ability to monetize our digital audiences and inventory utilizing our sales force and advertising technology platforms, partially driven by investments in the digital space.
+Added: Operating expenses increased $60.6 million in connection with our Digital Audio Group’s revenue growth, including the impact of variable content and talent costs and third-party digital costs due to higher revenue as well as increased content and production costs primarily resulting from the development of new and existing podcasts.
+Added: Audio & Media Services Group Results
+Added: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, %
+Added: 2020 2019 2019 2019 Change
+Added: Revenue $ 274,749 167,292 69,362 $ 236,654 16.1 %
+Added: Operating expenses (1)
+Added: 180,081 120,685 55,278 175,963 2.3 %
+Added: Segment Adjusted EBITDA $ 94,668 $ 46,607 $ 14,084 $ 60,691 56.0 %
+Added: Segment Adjusted EBITDA margin 34.5 % 27.9 % 20.3 % 25.6 %
+Added: (1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
+Added: Revenue from our Audio & Media Services Group increased $38.1 million compared to the comparative period in the prior year primarily due to a $61.8 million increase in political revenue as a result of 2020 being a presidential election year, partially offset by the effects of COVID-19 on advertising spend.
+Added: Operating expenses increased $4.1 million primarily as a result of variable costs due to higher revenue, including higher variable compensation expenses.
+Added: Non-GAAP Financial Measures
+Added: Reconciliations of Operating Income (Loss) to Adjusted EBITDA
+Added: (In thousands) Successor Company
+Added: Year Ended December 31,
Operating income (loss) $ 154,857 $ (1,737,624)
7 unchanged sentences
$ 811,133 $ 538,673
−Removed: (In thousands) Successor Company Predecessor Company Non-GAAP Combined 2
−Removed: Predecessor Company
−Removed: Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31,
+Added: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined 2
+Added: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
2020 2019 2019 2019
−Removed: Operating income $ 439,636 $ 67,040 $ 506,676 $ 690,144
+Added: Operating income (loss) $ (1,737,624) $ 439,636 $ 67,040 $ 506,676
Depreciation and amortization (1)
3 unchanged sentences
Share-based compensation expense 22,862 26,411 498 26,909
−Removed: 26,411 498 26,909 2,066
Restructuring and reorganization expenses 100,410 51,879 13,241 65,120
2 unchanged sentences
Reconciliations of Net Income (Loss) to EBITDA and Adjusted EBITDA
−Removed: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
−Removed: 2020 2019 2019 2019
−Removed: Net income (loss) $ (1,915,222) $ 113,299 $ 11,165,113 $ 11,278,412
−Removed: Income from discontinued operations, net of tax — — (1,685,123) (1,685,123)
+Added: (In thousands) Successor Company
+Added: Year Ended December 31,
+Added: Net loss $ (158,389) $ (1,915,222)
Income tax (benefit) expense 8,391 (183,623)
−Removed: Interest expense (income), net 343,745 266,773 (499) 266,274
+Added: Interest expense, net 332,384 343,745
Depreciation and amortization 469,417 402,929
EBITDA $ 651,803 $ (1,352,171)
−Removed: Reorganization items, net — — (9,461,826) (9,461,826)
−Removed: Loss on investments, net 9,346 20,928 10,237 31,165
−Removed: Other (income) expense, net 7,751 18,266 (23) 18,243
+Added: (Gain) loss on investments, net (43,643) 9,346
+Added: Other expense, net 14,976 7,751
Equity in loss of nonconsolidated affiliates 1,138 379
2 unchanged sentences
Share-based compensation expense 23,543 22,862
−Removed: Restructuring and reorganization expenses 100,410 51,879 13,241 65,120
+Added: Restructuring expenses 73,262 100,410
Adjusted EBITDA (2)
$ 811,133 $ 538,673
−Removed: (In thousands) Successor Company Predecessor Company Non-GAAP Combined Predecessor Company
−Removed: Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31,
+Added: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
2020 2019 2019 2019
Net income (loss) (1,915,222) 113,299 11,165,113 11,278,412
−Removed: (Income) loss from discontinued operations, net of tax — (1,685,123) (1,685,123) 164,667
−Removed: Income tax expense 20,091 39,095 59,186 13,836
+Added: Income from discontinued operations, net of tax — — (1,685,123) (1,685,123)
+Added: Income tax (benefit) expense (183,623) 20,091 39,095 59,186
Interest expense (income), net (3)
+Added: 343,745 266,773 (499) 266,274
Depreciation and amortization (1)
4 unchanged sentences
Other (income) expense, net 7,751 18,266 (23) 18,243
−Removed: Equity in (earnings) loss of nonconsolidated affiliates 279 66 345 (116)
+Added: Equity in loss of nonconsolidated affiliates 379 279 66 345
Impairment charges 1,738,752 — 91,382 91,382
4 unchanged sentences
$ 538,673 $ 775,549 $ 225,149 $ 1,000,698
−Removed: (1) Increase in Depreciation and amortization is driven by the application of fresh start accounting, resulting in significantly higher values of our tangible and intangible assets.
−Removed: (2) We define Adjusted EBITDA as consolidated Operating income (loss) adjusted to exclude restructuring and reorganization expenses included within Direct operating expenses, SG&A expenses and Corporate expenses, and share-based compensation expenses included within Corporate expenses, as well as the following line items presented in our Statements of Operations:
−Removed: Depreciation and amortization, Impairment charges and Other operating expense (income), net.
−Removed: Alternatively, Adjusted EBITDA is calculated as Net income (loss), adjusted to exclude (Income) loss from discontinued operations, net of tax, Income tax (benefit) expense, Interest expense (income), net, Depreciation and amortization, Reorganization items, net, (Gain) Loss on investments, net, Other (income) expense, net, Equity in loss of nonconsolidated affiliates, net, Impairment charges, Other operating expense (income), net, Share-based compensation expense, and restructuring and reorganization expenses.
−Removed: Restructuring expenses primarily include severance expenses incurred in connection with cost saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle.
+Added: (1) Increase in Depreciation and amortization for the year ended December 31, 2020 and the period from May 2, 2019 through December 31, 2019 is driven by the application of fresh start accounting, resulting in significantly higher values of our tangible and intangible assets.
+Added: (2) We define Adjusted EBITDA as consolidated Operating income (loss) adjusted to exclude restructuring and reorganization expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations:
+Added: Depreciation and amortization, Impairment charges and Other operating expense, net.
+Added: Alternatively, Adjusted EBITDA is calculated as Net income (loss), adjusted to exclude
+Added: Income tax (benefit) expense, Interest expense, net, Depreciation and amortization, Loss (gain) on investments, net, Other expense, net, Equity in loss of nonconsolidated affiliates, net, Impairment charges, Other operating expense, net, Share-based compensation expense, and restructuring and reorganization expenses.
+Added: Restructuring expenses primarily include expenses incurred in connection with cost-saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle.
Reorganization expenses primarily include the amortization of retention bonus amounts paid or payable to certain members of management directly as a result of the Reorganization.
9 unchanged sentences
Because it excludes certain financial information compared with operating income and compared with consolidated net income (loss), the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded.
+Added: (3) Increase in Interest expense (income), net is driven by the interest recognized on the new debt issued in connection with our emergence from the Chapter 11 Cases.
+Added: During the period from March 14, 2018 to May 1, 2019, while the Company was in debtor-in-possession, no interest expense was recognized on pre-petition debt.
Reconciliations of Cash provided by (used for) operating activities from continuing operations to Free cash flow from (used for) continuing operations
−Removed: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
−Removed: 2020 2019 2019 2019
−Removed: Cash provided by (used for) operating activities from continuing operations $ 215,945 $ 468,905 $ (7,505) $ 461,400
+Added: (In thousands) Successor Company
+Added: Year Ended December 31,
+Added: Cash provided by operating activities from continuing operations $ 330,573 $ 215,945
Purchases of property, plant and equipment by continuing operations
(183,372) (85,205)
−Removed: Free cash flow from (used for) continuing operations (2)
+Added: Free cash flow from continuing operations (1)
$ 147,201 $ 130,740
−Removed: (In thousands) Successor Company Predecessor Company Non-GAAP Combined Predecessor Company
−Removed: Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31,
+Added: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
2020 2019 2019 2019
5 unchanged sentences
$ 130,740 $ 392,912 $ (43,702) $ 349,210
−Removed: (1) Cash provided by operating activities from continuing operations for the year ended December 31, 2019 was impacted primarily by an increase of $165.1 million in cash paid for interest.
−Removed: Our debt issued upon emergence was outstanding from the period of May 2, 2019 to December 31, 2019, resulting in cash interest payments of $183.8 million.
−Removed: In 2018, we made cash interest payments of $22.5 million on our pre-petition debt, which was outstanding for the period from January 1, 2018 to March 14, 2018.
−Removed: Cash provided by operating activities was also impacted by a $97.9 million increase in cash payments for Reorganization items, which consisted primarily of bankruptcy-related professional fees, as well as payments for settlement of pre-petition liabilities upon our emergence from bankruptcy.
−Removed: (2) We define Free cash flow from (used for) continuing operations ( “ Free Cash Flow ” ) as Cash provided by (used for) operating activities from continuing operations less capital expenditures, which is disclosed as Purchases of property, plant and equipment by continuing operations in the Company's Consolidated Statements of Cash Flows.
+Added: (1) We define Free cash flow from (used for) continuing operations ( “ Free Cash Flow ” ) as Cash provided by operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows.
We use Free Cash Flow, among other measures, to evaluate the Company’s liquidity and its ability to generate cash flow.
3 unchanged sentences
Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.
+Added: (2) Cash provided by operating activities from continuing operations for the year ended December 31, 2019 was impacted primarily by an increase of $165.1 million in cash paid for interest.
+Added: Our debt issued upon emergence was outstanding from the period of May 2, 2019 to December 31, 2019, resulting in cash interest payments of $183.8 million.
+Added: Cash provided by operating activities was also impacted by a $97.9 million increase in cash payments for Reorganization items, which consisted primarily of bankruptcy-related professional fees, as well as payments for settlement of pre-petition liabilities upon our emergence from bankruptcy.
Share-Based Compensation Expense
1 unchanged sentence
In connection with the effectiveness of our Plan of Reorganization, all unvested restricted shares were canceled.
−Removed: Pursuant to the new equity incentive plan (the “Post-Emergence Equity Plan”) we adopted in connection with the effectiveness of our Plan of Reorganization, we have granted restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.
+Added: Pursuant to our 2019 Incentive Equity Plan ("2019 Plan") we adopted in connection with the effectiveness of our Plan of Reorganization as well as our 2021 Long-Term Incentive Award Plan ("2021 Plan"), we have granted restricted stock units and options to purchase shares of the Company's Class A common stock to our employees and directors.
+Added: The 2021 Plan was approved in April 2021.
+Added: In connection with its approval, our 2019 Plan was terminated and we are not able to grant future awards under the 2019 Plan.
+Added: The terms and conditions of the 2019 Plan continue to govern any outstanding awards under this plan.
Share-based compensation expenses are recorded in corporate expenses and were $23.5 million, $22.9 million and $26.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.
2 unchanged sentences
In the year ended December 31, 2021, we recognized $1.6 million in relation to these performance-based RSUs.
+Added: In the year ended December 31, 2020, we recognized $3.4 million in relation to these performance-based RSUs.
As of December 31, 2021, there was $39.6 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 2 years.
−Removed: In addition, as of December 31, 2020, there was $1.6 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on performance conditions.
LIQUIDITY AND CAPITAL RESOURCES
The following discussion highlights cash flow activities during the periods presented:
−Removed: (In thousands) Successor Company Successor Company Predecessor Company Non-GAAP Combined Predecessor Company
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31,
+Added: (In thousands) Successor Company Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: Year Ended December 31, Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
2021 2020 2019 2019 2019
8 unchanged sentences
Cash provided by operating activities was $330.6 million in 2021 compared to $215.9 million of cash provided by operating activities in 2020.
+Added: Cash provided by operating activities increased from $215.9 million in 2020 to $330.6 million in 2021 primarily as a result of an increase in cash flows generated from higher revenues and operating profitability as the Company's businesses continue to recover from the impact of the COVID-19 pandemic.
+Added: The increase in cash provided by operating activities was partially offset by changes in working capital balances, particularly accounts receivable, which was impacted by the timing of collections.
+Added: Cash provided by operating activities was $215.9 million in 2020 compared to $428.7 million of cash provided by operating activities in 2019.
Cash provided by operating activities from continuing operations decreased from $461.4 million in 2019 to $215.9 million in 2020 primarily as a result of a decrease in Revenue driven by the decline in advertising spend resulting from the economic slow-down caused by the COVID-19 pandemic.
9 unchanged sentences
Such payments for Reorganization items were $97.9 million higher in the year ended December 31, 2019 compared to the year ended December 31, 2018.
−Removed: Cash provided by operating activities from continuing operations was $741.2 million in 2018 compared to $619.2 million of cash used for operating activities from continuing operations in 2017.
−Removed: The increase in cash provided by operating activities is primarily attributed to the $1,374.4 million decrease in cash paid for interest.
−Removed: Cash paid for interest was $398.0 million during 2018 compared to $1,772.4 million during 2017.
−Removed: In addition, cash provided by operating activities increased as a result of changes in working capital balances, particularly accounts receivable, which were affected by improved collections as well as accounts payable and accrued expenses which were impacted by the timing of payments.
−Removed: Cash paid for Reorganization items, net was $103.7 million during 2018.
−Removed: As part of our liquidity measures taken in anticipation of our March 14, 2018 bankruptcy filing, we did not make scheduled interest payments on our long-term debt and we extended certain accounts payable to conserve cash.
−Removed: Subsequent to the bankruptcy filing, interest payments on our debt classified as "Liabilities subject to compromise" were stayed and only limited pre-petition payments on accounts payable were made.
Investing Activities
−Removed: Cash used for investing activities of $147.8 million in 2020 was driven primarily by capital expenditures of $85.2 million primarily related to IT software and infrastructure, reflecting a $27.0 million decrease in capital expenditures compared to the prior year as a result of actions taken in response to the COVID-19 pandemic.
+Added: Cash used for investing activities of $346.8 million in 2021 primarily reflects the net cash payment made to acquire Triton Digital for $228.5 million.
+Added: In addition, $183.4 million in cash was used for capital expenditures, reflecting a $98.2 million increase in capital expenditures compared to the prior year.
+Added: The increase in capital expenditures relates primarily to incremental spend in 2021 for infrastructure and IT in connection with our real estate optimization and modernization initiatives compared to 2020 which experienced lower capital expenditures as a result of cash flow preservation actions taken in response to the economic impacts of the COVID-19 pandemic.
+Added: Cash used for investing activities was partially offset by cash provided by investing activities primarily related to proceeds of $50.8 million received mostly from the sale of our investment in the San Antonio Spurs.
+Added: Cash used for investing activities of $147.8 million in 2020 was driven primarily by capital expenditures of $85.2 million primarily related to IT software and infrastructure, reflecting a $27.0 million decrease in capital expenditures compared
+Added: to the prior year as a result of actions taken in response to the COVID-19 pandemic.
In addition, we used $62.1 million of cash to acquire certain strategic businesses including Voxnest which was acquired in the fourth quarter of 2020.
1 unchanged sentence
In addition, we used $112.2 million for capital expenditures, primarily related to IT software and infrastructure.
−Removed: Cash used for investing activities of $345.5 million in 2018 primarily reflects $203.6 million in cash used for investing activities from discontinued operations.
−Removed: In addition, we used $85.2 million for capital expenditures, primarily related to IT software and infrastructure.
Financing Activities
+Added: Cash used for financing activities of $352.1 million in 2021 primarily resulted from the $250.0 million voluntary repayment of our term loan credit facilities in connection with the repricing transaction, and required quarterly principal payments made on our Term Loan Facility and repayment of a subsidiary note payable.
+Added: As a result of our voluntary prepayment, our Term Loan Facility no longer requires quarterly principal payments.
Cash provided by financing activities of $241.2 million in 2020 primarily resulted from the net proceeds of $425.8 million from the issuance of incremental term loan commitments, offset by the $150.0 million prepayment on our Term Loan Facility in the first quarter 2020, along with required quarterly principal payments made on our term loan credit facilities.
Cash used for financing activities of $113.6 million in 2019 primarily resulted from the net payment by iHeartCommunications to CCOH as CCOH’s recovery of its claims under the Due from iHeartCommunications Note and settlement of the post-petition intercompany note balance, partially offset by $60.0 million in proceeds received from the issuance of the iHeart Operations Preferred Stock.
−Removed: Cash used for financing activities of $491.8 million in 2018 primarily resulted from payments on long-term debt and on our receivables based credit facility.
−Removed: In connection with the replacement of the iHeartCommunications' receivables based credit facility with a new Debtor-in-Possession Facility (“DIP Facility”) on June 14, 2018, we repaid the outstanding $306.4 million and $74.3 million balances of the receivables based credit facility's term loan and revolving credit commitments, respectively.
−Removed: An additional $125.0 million principal amount was repaid under the DIP Facility during the third quarter of 2018.
−Removed: Anticipated Cash Requirements
−Removed: Our primary sources of liquidity are cash on hand, which consisted of $720.7 million as of December 31, 2020, cash flow from operations and borrowing capacity under our $450.0 million ABL Facility.
−Removed: As of December 31, 2020, iHeartCommunications had no principal amounts outstanding under the ABL Facility, a facility size of $450.0 million and $32.9 million in outstanding letters of credit, resulting in $417.1 million of excess availability.
−Removed: As a result of certain restrictions in the Company's debt and preferred stock agreements, as of December 31, 2020, approximately $172 million was available to be drawn upon under the ABL Facility.
−Removed: In July 2020, the Company issued $450.0 million of incremental term loans, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs.
−Removed: A portion of the proceeds from the issuance was used to repay all outstanding balances under the ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes.
−Removed: Our cash balance was $720.7 million as of December 31, 2020.
−Removed: Together with our borrowing capacity under the ABL Facility, our total available liquidity 1 was approximately $893 million.
−Removed: We continue to evaluate the full extent of COVID-19’s impact on our business.
−Removed: While the challenges that COVID-19 has created for advertisers and consumers had a significant impact on our revenue for the year ended December 31, 2020 and has created a business outlook that is less clear in the near term, we believe that we have sufficient liquidity to continue to fund our operations for at least the next twelve months.
−Removed: We expect that our primary anticipated uses of liquidity will be to fund our working capital, make interest payments, fund capital expenditures, pursue certain strategic opportunities and maintain operations in light of the COVID-19 pandemic and other obligations.
−Removed: We expect to have approximately $335 million of cash interest payments in 2021.
−Removed: As a result of certain favorable tax provisions in the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, our 2020 taxes were significantly reduced compared to what they would have been absent these provisions.
−Removed: Our cash income tax payments were $5.8 million primarily as a result of the provisions allowing for increased interest deductions, which resulted in additional tax deductible interest expense of $179.4 million during the year.
−Removed: In addition, the Company was able to defer the payment of $29.3 million in certain employment taxes during 2020, of which half will be due on December 31, 2021 and the other half will be due on December 31, 2022.
+Added: Sources of Liquidity and Anticipated Cash Requirements
+Added: Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $352.1 million as of December 31, 2021, cash flow from operations and borrowing capacity under our $450.0 million ABL Facility.
+Added: As of December 31, 2021, iHeartCommunications had no amounts outstanding under the ABL Facility, a facility size of $450.0 million and $26.9 million in outstanding letters of credit, resulting in $423.1 million of borrowing base availability.
+Added: Together with our cash balance of $352.1 million as of December 31, 2021 and our borrowing capacity under the ABL Facility, our total available liquidity 1 was approximately $775 million.
+Added: On July 16, 2021, we amended the Term Loan credit facilities and voluntarily prepaid $250.0 million of borrowings outstanding under these facilities using cash on hand.
+Added: On October 27, 2021, iHeart Operations repurchased all of the iHeart Operations Preferred Stock with cash on hand for an aggregate price of $64.4 million (“Redemption Price”), including accrued dividends, upon obtaining consent from the third party investor.
+Added: The Redemption Price included a negotiated make-whole premium as the redemption occurred prior to the optional redemption date set forth in the Certificate of Designation governing the iHeart Operations Preferred Stock.
+Added: Subsequent to the transaction, the preferred shares were retired and cancelled and are no longer outstanding.
+Added: We continue to evaluate the ongoing impact of COVID-19 on our business.
+Added: The challenges that COVID-19 has created for advertisers and consumers have had an adverse impact on our revenue for the twelve months ended December 31, 2021 and have created a business outlook that is less clear in the near term.
+Added: Although our results continued to be impacted by the effects of the COVID-19 pandemic, our revenue for the year ended December 31, 2021 increased significantly compared to the year ended December 31, 2020.
+Added: We believe that we have sufficient liquidity to continue to fund our operations for at least the next twelve months.
+Added: We are a party to many contractual obligations involving commitments to make payments to third parties.
+Added: These obligations impact our short-term and long-term liquidity and capital resource needs.
+Added: Certain contractual obligations are reflected on the Consolidated Balance Sheet as of December 31, 2021, while others are considered future commitments.
+Added: Our contractual obligations primarily consist of long-term debt and related interest payments, commitments under non-cancelable operating lease agreements, and employment and talent contracts.
+Added: In addition to our contractual obligations, we expect that our
1 Total available liquidity defined as cash and cash equivalents plus available borrowings under the ABL Facility.
We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.
−Removed: Over the past ten years, we have transitioned our Audio business from a single platform radio broadcast operator to a company with multiple platforms, including digital, podcasting, networks and events.
−Removed: Early in the first quarter of 2020, we implemented our modernization initiatives to take advantage of the significant investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies.
−Removed: Our investments in modernization delivered approximately $50 million of savings in 2020 and are expected to deliver annualized run-rate cost savings of approximately $100 million by mid-year 2021.
−Removed: We have also invested in numerous technologies and businesses to increase the competitiveness of our inventory with our advertisers and our audience.
−Removed: In response to the COVID-19 pandemic, in an effort to further strengthen the Company's financial flexibility and efficiently manage through the period of economic slowdown and uncertainty, the Company took the following measures, which generated approximately $200 million in operating cost savings in 2020:
−Removed: • Substantial reduction in certain operating expenses, such as new employee hiring, travel and entertainment expenses, 401(k) matching expenses, consulting fees and other discretionary expenses.
−Removed: • Reduction in planned capital expenditures to a level that we believe will still enable the Company to make key investments to continue our strategic initiatives related to Smart Audio and Digital, including podcasting.
−Removed: • Reduction in compensation for senior management and other employees of the Company, including a 100% reduction of the Company's Chief Executive Officer's annual base salary and bonus.
−Removed: • In addition, as a result of the decrease in revenue as a result of the COVID-19 pandemic, certain variable expenses including event production costs and sales commissions, as well as other variable compensation, showed a corresponding decrease.
−Removed: The Company has identified, and executed on, strategic initiatives to ensure that the majority of all of the $200 million in COVID-19 savings persist in 2021.
−Removed: We believe that our cash balance, our cash flow from operations and availability under our ABL Facility provide us with sufficient liquidity to fund our core operations, maintain key personnel and meet our other material obligations.
+Added: primary anticipated uses of liquidity in 2022 will be to fund our working capital, make interest and tax payments, fund capital expenditures, pursue certain strategic opportunities and maintain operations.
+Added: We anticipate that we will have approximately $312 million of cash interest payments in 2022.
+Added: For a description of the Company's future maturities of long-term debt, see Note 6, Long-Term Debt , and for a description of the Company's non-cancelable operating lease agreements, see Note 7, Commitments and Contingencies .
+Added: We believe that our cash balance, our cash flow from operations and availability under our ABL Facility provide us with sufficient liquidity to fund our core operations, maintain key personnel and meet our other material obligations for at least the next twelve months.
In addition, none of our long-term debt includes maintenance covenants that could trigger early repayment.
We fully appreciate the unprecedented challenges posed by the COVID-19 pandemic, however, we remain confident in our business, our employees and our strategy.
−Removed: We believe that our ability to generate cash flow from operations from our business initiatives, our current cash on hand and availability under the ABL Facility will provide sufficient resources to continue to fund and operate our business, fund capital expenditures and other obligations and make interest payments on our long-term debt.
+Added: Further, we believe our available liquidity will allow us to fund capital expenditures and other obligations and make interest payments on our long-term debt.
If these sources of liquidity need to be augmented, additional cash requirements would likely be financed through the issuance of debt or equity securities;
1 unchanged sentence
We frequently evaluate strategic opportunities, and we expect from time to time to pursue acquisitions or dispose of certain businesses, which may or may not be material.
−Removed: For example, on October 22, 2020, we used a portion of our cash on hand to complete the strategic acquisition of Voxnest, Inc., a provider of podcast analytics and programmatic ad serving tools, which we believe will be a transaction accretive to shareholder value.
−Removed: Specifically, as we continue to focus on operational efficiencies that drive greater margin and cash flow, we will continue to review and consider opportunities to unlock shareholder value and increase free cash flow.
−Removed: 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.
−Removed: As a precautionary measure to preserve financial flexibility in light of the uncertainty surrounding the COVID-19 pandemic, we borrowed $350.0 million principal amount under our ABL Facility.
−Removed: On July 16, 2020, iHeartCommunications entered into an additional amendment to the Credit Facility (“Amendment No.
−Removed: 2”) to provide for $450.0 million, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs.
−Removed: A portion of the proceeds from the issuance was used to repay the then-remaining balance outstanding under the ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes.
−Removed: The incremental term loans issued pursuant to Amendment No.
−Removed: 2 have an interest rate of 4.00% for Eurocurrency Rate Loans and 3.00% for Base Rate Loans (subject to a LIBOR floor of 0.75% and Base Rate floor of 1.75%).
−Removed: Amendment No.
−Removed: 2 also modifies certain other provisions of the Credit Agreement.
−Removed: In connection with the Separation and Reorganization, we entered into the following transactions which may require ongoing capital commitments:
−Removed: Transition Services Agreement
−Removed: Pursuant to the Transition Services Agreement between us, iHeartMedia Management Services, Inc.
−Removed: (“iHM Management Services”), iHeartCommunications and CCOH, for one year from the Effective Date, we agreed 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.
−Removed: The Transition Services Agreement was terminated on August 31, 2020.
−Removed: For additional information, see Note 4, Discontinued Operations to the consolidated financial statements located in Item 8 of this Annual Report on Form 10-K for a further description.
−Removed: New Tax Matters Agreement
−Removed: In connection with the Separation, we entered into the New Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., CCH, CCOH and Clear Channel Outdoor, Inc., to allocate the responsibility of iHeartMedia and its subsidiaries, on the one hand, and CCOH and its subsidiaries, on the other, for the payment of taxes arising prior and subsequent to, and in connection with, the Separation.
−Removed: The New Tax Matters Agreement requires that iHeartMedia and iHeartCommunications indemnify CCOH and its subsidiaries, and their respective directors, officers and employees, and hold them harmless, on an after-tax basis, from and against certain tax claims related to the Separation.
−Removed: In addition, the New Tax Matters Agreement requires that CCOH indemnify iHeartMedia for certain income taxes paid by iHeartMedia on behalf of CCOH and its subsidiaries.
−Removed: For additional information, see Note 4, Discontinued Operations to the consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K for a further description.
+Added: In connection with the Emergence, we entered into the following transactions which may require ongoing capital commitments:
+Added: Tax Matters Agreement
+Added: In connection with the separation (the "Separation") of Clear Channel Outdoor Holdings, Inc.
+Added: ("CCOH") as part of the Company's Plan of Reorganization, we entered into the Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., Clear Channel Holdings, Inc., CCOH and Clear Channel Outdoor, Inc., to allocate the responsibility of iHeartMedia and its subsidiaries, on the one hand, and CCOH and its subsidiaries, on the other, for the payment of taxes arising prior and subsequent to, and in connection with, the Separation.
+Added: The Tax Matters Agreement requires that iHeartMedia and iHeartCommunications indemnify CCOH and its subsidiaries, and their respective directors, officers and employees, and hold them harmless, on an after-tax basis, from and against certain tax claims related to the Separation.
+Added: In addition, the Tax Matters Agreement requires that CCOH indemnify iHeartMedia for certain income taxes paid by iHeartMedia on behalf of CCOH and its subsidiaries.
Sources of Capital
As of December 31, 2021 and December 31, 2020, we had the following debt outstanding, net of cash and cash equivalents:
−Removed: (In millions) Successor Company
+Added: (In thousands) Successor Company
December 31, 2021 December 31, 2020
2 unchanged sentences
Incremental Term Loan Facility due 2026 (1)
+Added: 401,220 447,750
Asset-based Revolving Credit Facility due 2023 — —
3 unchanged sentences
Other secured subsidiary debt 5,350 22,753
−Removed: Total Secured Debt 4,600.8 4,322.3
+Added: Total consolidated secured debt $ 4,320,602 $ 4,600,762
8.375% Senior Unsecured Notes due 2027 1,450,000 1,450,000
−Removed: Other Subsidiary Debt 6.7 12.5
−Removed: Original issue discount (18.8) —
+Added: Other unsecured subsidiary debt 90 6,782
+Added: Purchase accounting adjustments and original issue discount (13,454) (18,817)
Long-term debt fees (18,370) (21,797)
2 unchanged sentences
Net Debt $ 5,386,739 $ 5,296,268
−Removed: (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.
−Removed: (2) On July 16, 2020, iHeartCommunications issued $450.0 million of incremental term loans under the Amendment No.
−Removed: 2, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs.
−Removed: 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.
−Removed: (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.
−Removed: During the three months ended June 30, 2020 and the three months ended September 30, 2020, iHeartCommunications voluntarily repaid the principal amount drawn under the ABL Facility.
−Removed: As of December 31, 2020, the ABL Facility had a facility size of $450.0 million, no principal amounts outstanding and $32.9 million of outstanding letters of credit, resulting in $417.1 million of excess availability.
−Removed: As a result of certain restrictions in the Company's debt and preferred stock agreements, as of December 31, 2020, approximately $172.0 million was available to be drawn upon under the ABL Facility.
+Added: (1) On July 16, 2021, iHeartCommunications, Inc.
+Added: ("iHeartCommunications") entered into an amendment to the credit agreement governing its Term Loan credit facilities.
+Added: The amendment reduces the interest rate of its Incremental Term Loan Facility due 2026 to a Eurocurrency Rate of LIBOR plus a margin of 3.25% and floor of 0.50% (from LIBOR plus a margin of 4.00% and floor of 0.75%).
+Added: The Base Rate interest amount was reduced to Base Rate plus a margin of 2.25% and floor of 1.50%.
+Added: In connection with the amendment, iHeartCommunications voluntarily prepaid $250.0 million of borrowings outstanding under the Term Loan credit facilities with cash on hand, resulting in a reduction of $44.3 million of the existing Incremental Term Loan Facility due 2026 and $205.7 million of the Term Loan Facility due 2026.
For additional information regarding our debt, including the terms of the governing documents, refer to Note 6, Long-Term Debt , to our consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K.
Exchange of Special Warrants
−Removed: On July 25, 2019, the Company filed a PDR with the FCC to permit up to 100% of the Company’s voting stock to be owned by non-U.S.
+Added: On July 25, 2019, the Company filed the PDR with the FCC to permit up to 100% of the Company’s voting stock to be owned by non-U.S.
individuals and entities.
−Removed: On November 5, 2020, the FCC issued the Declaratory Ruling granting the relief requested by the PDR, subject to certain conditions set forth in the Declaratory Ruling.
+Added: On November 5, 2020, the FCC issued the 2020 Declaratory Ruling granting the relief requested by the PDR, subject to certain conditions set forth therein.
On January 8, 2021, the Company exchanged a portion of the outstanding Special Warrants into 45,133,811 shares of iHeartMedia Class A common stock, the Company’s publicly traded equity, and 22,337,312 Class B common stock in compliance with the Declaratory Ruling, the Communications Act and FCC rules.
Following the Exchange, the Company's remaining Special Warrants continue to be exercisable for shares of Class A common stock or Class B common stock.
−Removed: were 110,923,534 shares of Class A common stock, 29,088,181 shares of Class B common stock and 6,201,453 Special Warrants outstanding on February 22, 2021.
−Removed: Supplemental Financial Information under Debt Agreements and Certificate of Designation Governing the iHeart Operations Preferred Stock
+Added: There were 120,270,406 shares of Class A common stock, 21,589,449 shares of Class B common stock and 5,293,069 Special Warrants outstanding on February 18, 2022.
+Added: Supplemental Financial Information under Debt Agreements
Pursuant to iHeartCommunications' material debt agreements, Capital I, the parent guarantor and a subsidiary of iHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of the material differences between iHeartMedia’s consolidated financial information, on the one hand, and the financial information of Capital I and its consolidated restricted subsidiaries, on the other hand.
Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the year ended December 31, 2021, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period.
−Removed: According to the certificate of designation governing the iHeart Operations Preferred Stock, iHeart Operations is required to provide certain supplemental financial information of iHeart Operations in comparison to the Company and its consolidated subsidiaries.
−Removed: iHeart Operations and its subsidiaries comprised 84.8% of the Company's consolidated assets as of December 31, 2020.
−Removed: For the year ended December 31, 2020, iHeart Operations and its subsidiaries comprised 85.3% of the Company's consolidated revenues.
+Added: Further, as of December 31, 2021, we were in compliance with all covenants related to our debt agreements.
Uses of Capital
1 unchanged sentence
Capital expenditures for the years ended December 31, 2021, 2020 and 2019 were as follows:
−Removed: (In millions) Successor Company Predecessor Company Non-GAAP Combined Predecessor Company
−Removed: Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31, Year Ended December 31,
+Added: (In thousands) Successor Company Successor Company Successor Company Predecessor Company Non-GAAP Combined
+Added: Year Ended December 31, Year Ended December 31, Period from May 2, 2019 through December 31, Period from January 1, 2019 through May 1, Year Ended December 31,
2021 2020 2019 2019 2019
−Removed: Audio $ 73.9 $ 62.0 $ 31.2 $ 93.2 $ 72.4
−Removed: Audio and Media Services 5.1 4.0 1.3 5.3 5.9
+Added: Multiplatform Group $ 130,894 $ 51,559 $ 48,096 $ 25,270 $ 73,366
+Added: Digital Audio Group 23,907 16,086 10,505 4,694 15,199
+Added: Audio and Media Services Group 14,515 5,105 3,980 1,263 5,243
Corporate 14,056 12,455 13,412 4,970 18,382
Total capital expenditures $ 183,372 $ 85,205 $ 75,993 $ 36,197 $ 112,190
−Removed: See the Contractual Obligations table under “ Commitments, Contingencies and Guarantees ” and Note 10 to our consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K for the Company's future capital expenditure commitments.
−Removed: Our capital expenditures are not of significant size individually and primarily relate to studio and broadcast equipment and software.
+Added: Our capital expenditures were not individually significant and primarily relate to studio and broadcast equipment, leasehold improvements, and software.
Holders of shares of our Class A common stock are entitled to receive dividends, on a per share basis, when and if declared by our Board out of funds legally available therefor and whenever any dividend is made on the shares of our Class B common stock subject to certain exceptions set forth in our certificate.
−Removed: See Note 12 to our consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K.
−Removed: During the first quarter of 2021, we entered into a Share Purchase Agreement to acquire Triton Digital, a global leader in digital audio and podcast technology and measurement services, from The E.W.
−Removed: Scripps Company for $230 million in cash, subject to certain adjustments.
−Removed: The consummation of the proposed acquisition is subject to the satisfaction or waiver of customary closing conditions, including regulatory approval.
−Removed: During the fourth quarter of 2020, we acquired Voxnest, Inc.
−Removed: for aggregate consideration of $50 million.
−Removed: The assets acquired primarily consisted of intangible assets valued at $53.2 million, including $36.6 million in goodwill.
−Removed: During the fourth quarter of 2018, we acquired Stuff Media LLC and Jelli, Inc.
−Removed: for aggregate consideration of $120.3 million, of which $74.3 million was paid in cash in the fourth quarter of 2018 and $46.0 million, plus imputed interest, was paid in cash in the fourth quarter of 2019.
−Removed: The assets acquired as part of these transactions consisted of $27.0 million in fixed assets and $35.2 million in intangible assets, primarily consisting of technology and content, along with $77.3 million in goodwill.
+Added: See Note 9, Stockholders' Equity , to our consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K.
Commitments, Contingencies and Guarantees
12 unchanged sentences
These contracts typically contain cancellation provisions that allow us to cancel the contract with good cause.
−Removed: The scheduled maturities of iHeartCommunications' secured debt, unsecured debt, mandatorily redeemable preferred stock, and our future minimum rental commitments under non-cancelable lease agreements, minimum payments under other non-cancelable contracts, payments under employment/talent contracts and other long-term obligations as of December 31, 2020 were as set forth in the table below.
−Removed: (In thousands) Payments due by Period
−Removed: Contractual Obligations Total 2021 2022-2023 2024-2025 Thereafter
−Removed: Long-term debt:
−Removed: Secured debt $ 4,600,762 $ 28,268 $ 56,372 $ 55,469 $ 4,460,653
−Removed: Unsecured debt 1,456,782 6,507 275 — 1,450,000
−Removed: Mandatorily Redeemable Preferred Stock 60,000 — — — 60,000
−Removed: Interest payments on long-term debt and preferred stock (1)
−Removed: 2,054,956 335,267 665,929 657,395 396,365
−Removed: Non-cancelable operating leases 1,293,645 126,732 253,211 207,230 706,472
−Removed: Non-cancelable contracts 198,147 125,853 67,434 3,143 1,717
−Removed: Employment/talent contracts 262,307 102,263 117,679 42,365 —
−Removed: Unrecognized tax benefits (2)
−Removed: 18,183 — — — 18,183
−Removed: Other long-term obligations 53,034 — 24,401 5,267 23,366
−Removed: Total $ 9,997,816 $ 724,890 $ 1,185,301 $ 970,869 $ 7,116,756
−Removed: (1) Interest payments on long-term debt and preferred stock reflect the Company's obligations as of December 31, 2020.
−Removed: Interest payments calculated based on floating rates assume rates are held constant over the remaining term.
−Removed: (2) The non-current portion of the unrecognized tax benefits is included in the “Thereafter” column as we cannot reasonably estimate the timing or amounts of additional cash payments, if any, at this time.
−Removed: For additional information, see Note 11 included in Item 8 of Part II of this Annual Report on Form 10-K.
−Removed: OFF-BALANCE SHEET ARRANGEMENTS
−Removed: As of December 31, 2020, we did not have any off-balance sheet arrangements.
−Removed: Typically, the Audio segment experiences its lowest financial performance in the first quarter of the calendar year.
+Added: Typically, the Company experiences their lowest financial performance in the first quarter of the calendar year.
We expect this trend to continue in the future.
Due to this seasonality and certain other factors, the results for the interim periods may not be indicative of results for the full year.
−Removed: In addition, our Audio segment and our Audio and Media Services segment are impacted by political cycles and generally experience higher revenues in congressional election years, and particularly in presidential election years.
−Removed: This cyclicality may affect comparability of results between years.
+Added: In addition, we are impacted by political cycles and generally experience higher revenues in congressional election years, and particularly in presidential election years.
+Added: This may affect comparability of results between years.
We are exposed to market risks arising from changes in market rates and prices, including movements in interest rates, foreign currency exchange rates and inflation.
10 unchanged sentences
We believe the effects of inflation, if any, on our historical results of operations and financial condition have been immaterial.
−Removed: Although the exact impact of inflation is indeterminable, we believe we have offset these higher costs by increasing the effective advertising rates of most of our broadcasting stations in our Audio operations.
+Added: Although we are unable to determine the exact impact of inflation, we believe the impact will continue to be immaterial considering the actions we may take in response to these higher costs that may arise as a result of inflation.
NEW ACCOUNTING PRONOUNCEMENTS
5 unchanged sentences
The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources.
−Removed: Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material.
+Added: Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and
+Added: estimates, and such difference could be material.
Our significant accounting policies are discussed in the notes to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.
4 unchanged sentences
In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, we record a specific reserve to reduce the amounts recorded to what we believe will be collected.
−Removed: For all other customers, we recognize reserves for bad debt based on historical experience for each business unit, adjusted for relative improvements or deteriorations in the agings and changes in current economic conditions.
+Added: For all other customers, we recognize reserves for bad debt based on historical experience for each business unit, adjusted for changes in the agings and in current economic conditions.
If our agings were to improve or deteriorate resulting in a 10% change in our allowance, we estimated that our bad debt expense for the year ended December 31, 2021 would have changed by approximately $2.9 million.
The most significant estimates used by management in accounting for leases and the impact of these estimates are as follows:
−Removed: Expected lease term Our expected lease term includes both contractual lease periods and cancellable option periods where failure to exercise such options would result in an economic penalty.
+Added: Expected lease term :
+Added: Our expected lease term includes both contractual lease periods and cancellable option periods where failure to exercise such options would result in an economic penalty.
The expected lease term is used in determining whether the lease is accounted for as an operating lease or a finance lease.
1 unchanged sentence
The expected lease term is also used in determining the depreciable life of the asset.
−Removed: An increase in the expected lease term will increase the probability that a lease may be considered a finance lease and will generally result in higher interest and depreciation expense for a leased property recorded on our balance sheet.
−Removed: Incremental borrowing rate The incremental borrowing rate is primarily used in determining whether the lease is accounted for as an operating lease or a finance lease.
+Added: An increase in the expected lease term will increase the probability that a lease may be considered a finance lease and will generally result in higher interest and depreciation expense for a leased property.
+Added: Incremental borrowing rate :
+Added: The incremental borrowing rate is primarily used in determining whether the lease is accounted for as an operating lease or a finance lease.
A lease is considered a finance lease if the net present value of the minimum lease payments is greater than 90% of the fair market value of the property.
An increase in the incremental borrowing rate decreases the net present value of the minimum lease payments and reduces the probability that a lease will be considered a finance lease.
−Removed: Fair market value of leased asset The fair market value of leased property is generally estimated based on comparable market data as provided by third-party sources.
+Added: Fair market value of leased asset :
+Added: The fair market value of leased property is generally estimated based on comparable market data as provided by third-party sources.
Fair market value is used in determining whether the lease is accounted for as an operating lease or a finance lease.
1 unchanged sentence
A higher fair market value reduces the likelihood that a lease will be considered a finance lease.
+Added: When the decision is made to abandon a leased property before the expiration of the lease term, we assess whether such property will be subleased.
+Added: Judgement is required in determining if a leased property can be subleased, estimated sublease payments to be received and the length of time it would take for the sublease to be obtained.
+Added: These assumptions are generally based on historical experience as well as current and expected market conditions using information provided by third-party sources.
+Added: The fair value of our leased assets may be impacted if actual results differ from our assumptions.
Long-lived Assets
10 unchanged sentences
Indefinite-lived Intangible Assets
−Removed: In connection with our Plan of Reorganization, we applied fresh start accounting as required by ASC 852 and recorded all of our assets and liabilities at estimated fair values, including our FCC licenses, which are included within our Audio reporting unit.
−Removed: Indefinite-lived intangible assets, such as our FCC licenses, are reviewed annually for possible impairment using the direct valuation method as prescribed in ASC 805-20-S99.
−Removed: Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets was calculated at the market level as prescribed by ASC 350-30-35.
+Added: In connection with our Plan of Reorganization, we applied fresh start accounting as required by ASC 852, Reorganizations , and recorded all of our assets and liabilities at estimated fair values, including our FCC licenses, which are included within our Multiplatform Group reporting unit.
+Added: Indefinite-lived intangible assets, such as our FCC licenses, are reviewed annually for possible impairment using the direct valuation method as prescribed in ASC 805-20-S99, Business Combinations .
+Added: Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets was calculated at the market level as prescribed by ASC 350-30-35, Intangibles-Goodwill and Other .
Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the buyer hypothetically obtains indefinite-lived intangible assets and builds a new operation with similar attributes from scratch.
3 unchanged sentences
This data is populated using industry normalized information representing an average asset within a market.
−Removed: On July 1, 2020, we performed our annual impairment test in accordance with ASC 350-30-35 and we concluded no impairment of the indefinite-lived intangible assets was required.
+Added: On July 1, 2021, we performed our annual impairment test in accordance with ASC 350-30-35, Intangibles-Goodwill and Other , and we concluded no impairment of the indefinite-lived intangible assets was required.
In determining the fair value of our FCC licenses, the following key assumptions were used:
• Revenue forecasts published by BIA Financial Network, Inc.
−Removed: (“BIA”), varying by market, were used for the initial four-year period;
+Added: (“BIA”), varying by market, and revenue growth projections made by industry analysts were used for the initial four-year period;
• 2.0% revenue growth was assumed beyond the initial four-year period;
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If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future.
−Removed: The following table shows the change in the fair value of our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
+Added: The following table shows the decrease in the fair value of our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
(In thousands)
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Margin Discount
−Removed: FCC license $ 343,517 $ 184,986 $ 542,741
+Added: FCC licenses $ 405,630 $ 213,548 $ 459,449
The estimated fair value of our FCC licenses at July 1, 2021 was $2.2 billion, while the carrying value was $1.8 billion.
−Removed: Upon application of fresh start accounting in accordance with ASC 852 in connection with our emergence from bankruptcy, we recorded goodwill of $3.3 billion, which represented the excess of estimated enterprise fair value over the estimated fair value of our assets and liabilities.
+Added: Given the difference between the carrying values of our FCC licenses and their estimated fair values, an increase in discount rates or a decrease in revenue growth rates or profit margins could result in an impairment to our FCC licenses.
+Added: Upon application of fresh start accounting in accordance with ASC 852, Reorganizations , in connection with our emergence from bankruptcy, we recorded goodwill of $3.3 billion, which represented the excess of estimated enterprise fair value over the estimated fair value of our assets and liabilities.
Goodwill was further allocated to our reporting units based on the relative fair values of our reporting units as of May 1, 2019.
+Added: As a result of the changes in the Company's management structure and its reportable segments, we performed interim impairment tests on goodwill as of January 1, 2021.
+Added: No impairment charges were recorded in the first quarter of 2021 in connection with the interim impairment test.
We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired.
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Terminal values are also estimated and discounted to their present value.
−Removed: On July 1, 2020, we performed our annual impairment test in accordance with ASC 350-30-35, resulting in no impairment of goodwill.
+Added: On July 1, 2021, we performed our annual impairment test in accordance with ASC 350-30-35, Intangibles-Goodwill and Other , resulting in no impairment of goodwill.
In determining the fair value of our reporting units, we used the following assumptions:
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Our cash flow assumptions are based on detailed, multi-year forecasts performed by each of our operating reporting units, and reflect the current advertising outlook across our businesses.
−Removed: • Cash flows beyond 2024 are projected to grow at a perpetual growth rate, which we estimated at 2.0% for our Audio and digital reporting units and 2.0% for our Katz Media reporting unit (beyond 2028).
−Removed: • In order to risk adjust the cash flow projections in determining fair value, we utilized a discount rate of approximately 14.0% for each of our reporting units.
−Removed: Based on our annual assessment using the assumptions described above, the excess of fair value of the Audio and RCS reporting units compared to its carrying value is approximately 10% or less;
−Removed: however, a hypothetical 5% reduction in the estimated fair value in each of our reporting units would not result in a material impairment condition.
+Added: • Cash flows beyond 2025 are projected to grow at a perpetual growth rate, which we estimated at 2.0% for our Multiplatform and RCS Reporting units, 3.0% for our Digital Audio Reporting unit, and 2.0% for our Katz Media reporting unit (beyond 2029).
+Added: • In order to risk adjust the cash flow projections in determining fair value, we utilized discounts rates between 11% and 14% for each of our reporting units.
+Added: Based on our annual assessment using the assumptions described above, a hypothetical 5% reduction in the estimated fair value in each of our reporting units would not result in a material impairment condition.
While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units, it is possible a material change could occur.
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Margin Discount
−Removed: Audio $ 590,000 $ 233,000 $ 671,000
+Added: Multiplatform $ 670,000 $ 240,000 $ 650,000
+Added: Digital $ 330,000 $ 100,000 $ 270,000
Katz Media $ 60,000 $ 20,000 $ 50,000
Other $ 30,000 $ 10,000 $ 20,000
+Added: An increase in discount rates or a decrease in revenue growth rates or profit margins could result in impairment charges being required to be recorded for one or more of our reporting units.
Tax Provisions
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Insurance Accruals
−Removed: We are currently self-insured beyond certain retention amounts for various insurance coverages, including general liability and property and casualty.
+Added: We currently maintain self-insured retentions for various insurance coverages, including property, casualty, directors and officers, cyber, and media liability.
Accruals are recorded based on estimates of actual claims filed, historical payouts, existing insurance coverage and projected future development of costs related to existing claims.
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If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material.
−Removed: A 10% change in our self-insurance liabilities at December 31, 2020 would have affected our net loss by approximately $2.0 million for the year ended December 31, 2020.
Share-Based Compensation
−Removed: Under the fair value recognition provisions of ASC 718-10, share-based compensation cost is measured at the grant date based on the fair value of the award.
+Added: Under the fair value recognition provisions of ASC 718-10, Compensation-Stock Compensation , share-based compensation cost is measured at the grant date based on the fair value of the award.
Determining the fair value of share-based awards at the grant date requires assumptions and judgments, such as expected volatility, among other factors.
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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.