What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 269 added, 109 removed, 458 unchanged (45% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data) March 31,

(In thousands, except share and per share data) June 30,

2022 December 31,

9 unchanged sentences

INTANGIBLE ASSETS AND GOODWILL

Indefinite-lived intangibles - licenses 1,777,993 1,778,045

Indefinite-lived intangibles - licenses and other 1,778,405 1,778,045

Other intangibles, net 1,540,092 1,666,600

32 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per share data) Three Months Ended March 31,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Revenue $ 954,005 $ 861,605 $ 1,797,463 $ 1,568,270

7 unchanged sentences

Interest expense, net 81,494 84,887 160,713 170,008

Gain (loss) on investments, net ( 1,765 ) 191

Gain on investments, net 9,590 49,644 7,825 49,835

Equity in loss of nonconsolidated affiliates ( 29 ) ( 31 ) ( 58 ) ( 59 )

Gain on extinguishment of debt 8,203 — 8,203 —

Other expense, net ( 2,175 ) ( 363 ) ( 2,445 ) ( 1,170 )

Loss before income taxes ( 68,948 ) ( 162,121 )

Income (loss) before income taxes 16,964 ( 7,511 ) ( 51,984 ) ( 169,632 )

Income tax benefit (expense) ( 1,782 ) ( 24,449 ) 18,427 ( 104,384 )

Net loss ( 48,739 ) ( 242,056 )

Net income (loss) 15,182 ( 31,960 ) ( 33,557 ) ( 274,016 )

Less amount attributable to noncontrolling interest 781 326 624 ( 7 )

Net loss attributable to the Company $ ( 48,582 ) $ ( 241,723 )

Net income (loss) attributable to the Company $ 14,401 $ ( 32,286 ) $ ( 34,181 ) $ ( 274,009 )

Other comprehensive loss, net of tax:

1 unchanged sentence

Other comprehensive loss, net of tax ( 650 ) ( 40 ) ( 897 ) ( 256 )

Comprehensive loss ( 48,829 ) ( 241,939 )

Comprehensive income (loss) 13,751 ( 32,326 ) ( 35,078 ) ( 274,265 )

Less amount attributable to noncontrolling interest — — — —

Comprehensive loss attributable to the Company $ ( 48,829 ) $ ( 241,939 )

Net loss attributable to the Company per common share:

Comprehensive income (loss) attributable to the Company $ 13,751 $ ( 32,326 ) $ ( 35,078 ) $ ( 274,265 )

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

Basic $ 0.10 $ ( 0.22 ) $ ( 0.23 ) $ ( 1.87 )

10 unchanged sentences

Stock Additional

Capital Accumulated Deficit Accumulated

Capital Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive Loss Treasury

1 unchanged sentence

Shares Special Warrants Total

December 31, 2021

March 31, 2022

121,402,390 21,430,500 5,293,069 $ 8,066 $ 143 $ 2,882,515 $ ( 2,011,401 ) $ ( 504 ) $ ( 6,798 ) $ 872,021

Net loss ( 157 ) — — ( 48,582 ) — — ( 48,739 )

Net income 781 — — 14,401 — — 15,182

Vesting of restricted stock and other

1 unchanged sentence

Share-based compensation — — 8,610 — — — 8,610

Conversion of Special Warrants to Class A and Class B Shares

11,361 ( 11,361 ) — — — — — — —

Conversion of Special Warrants to Class A Shares 14 ( 14 ) — — — — — — —

Conversion of Class B Shares to Class A Shares

2 unchanged sentences

Other comprehensive loss — — — — ( 650 ) — ( 650 )

March 31, 2022

June 30, 2022

122,068,221 21,391,972 5,293,055 $ 8,659 $ 143 $ 2,891,129 $ ( 1,997,000 ) $ ( 1,154 ) $ ( 8,356 ) $ 893,421

9 unchanged sentences

Capital Accumulated Deficit Accumulated

Comprehensive Income

(Loss) Treasury

Comprehensive Loss Treasury

Class A Shares Class B

Shares Special Warrants Total

December 31, 2020

March 31, 2021

112,033,028 29,070,192 5,379,822 $ 7,830 $ 141 $ 2,854,647 $ ( 2,045,343 ) $ ( 22 ) $ ( 3,302 ) $ 813,951

Net loss ( 333 ) — — ( 241,723 ) — — ( 242,056 )

Net income (loss) 326 — — ( 32,286 ) — — ( 31,960 )

Vesting of restricted stock and other 780,173 — 1 3,107 — — ( 1,929 ) 1,179

2 unchanged sentences

Dividend declared and paid to noncontrolling interests ( 188 ) — — — — — ( 188 )

Conversion of Special Warrants to Class A Shares 14,694 ( 14,694 ) — — — — — — —

Conversion of Class B Shares to Class A Shares 5,433,680 ( 5,433,680 ) — — — — — — —

Other comprehensive loss — — — — ( 40 ) — ( 40 )

June 30, 2021

118,261,575 23,636,512 5,365,128 $ 7,968 $ 142 $ 2,863,657 $ ( 2,077,629 ) $ ( 62 ) $ ( 5,231 ) $ 788,845

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2021.

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data) Controlling Interest

Common Shares (1)

Interest Common

Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive Loss Treasury

Shares Class B

Shares Special Warrants Total

December 31, 2021

120,633,937 21,590,192 5,304,430 $ 8,410 $ 142 $ 2,876,571 $ ( 1,962,819 ) $ ( 257 ) $ ( 6,282 ) $ 915,765

Net income (loss) 624 — — ( 34,181 ) — — ( 33,557 )

Vesting of restricted stock and other

1,224,689 — 1 413 — — ( 2,074 ) ( 1,660 )

Share-based compensation — — 14,145 — — — 14,145

Conversion of Special Warrants to Class A Shares 11,375 ( 11,375 ) — — — — — — —

Conversion of Class B Shares to Class A Shares

198,220 ( 198,220 ) — — — — — — —

( 375 ) — — — — — ( 375 )

Other comprehensive loss — — — — ( 897 ) — ( 897 )

June 30, 2022

122,068,221 21,391,972 5,293,055 $ 8,659 $ 143 $ 2,891,129 $ ( 1,997,000 ) $ ( 1,154 ) $ ( 8,356 ) $ 893,421

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2022 or 2021.

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data) Controlling Interest

Common Shares (1)

Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Treasury Stock

Class A Shares Class B Shares Special Warrants Total

December 31, 2020

64,726,864 6,886,925 74,835,899 $ 8,350 $ 72 $ 2,849,020 $ ( 1,803,620 ) $ 194 $ ( 3,199 ) $ 1,050,817

Net loss ( 7 ) — — ( 274,009 ) — — ( 274,016 )

Vesting of restricted stock 810,545 — 1 3,118 — — ( 2,032 ) 1,087

Share-based compensation — — 11,588 — — — 11,588

Conversion of Special Warrants to Class A and Class B Shares 47,136,441 22,337,312 ( 69,473,753 ) — 69 ( 69 ) — — — —

2 unchanged sentences

Other comprehensive loss — — — — ( 256 ) — ( 256 )

March 31, 2021

June 30, 2021

118,261,575 23,636,512 5,365,128 $ 7,968 $ 142 $ 2,863,657 $ ( 2,077,629 ) $ ( 62 ) $ ( 5,231 ) $ 788,845

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2021.

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2022 or 2021.

See Notes to Consolidated Financial Statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) Three Months Ended March 31,

(In thousands) Six Months Ended June 30,

Cash flows from operating activities:

8 unchanged sentences

Loss on disposal of operating and other assets 15,583 11,347

(Gain) Loss on investments 1,765 ( 191 )

Gain on investments ( 7,825 ) ( 49,835 )

Equity in loss of nonconsolidated affiliates 58 59

Gain on extinguishment of debt ( 8,203 ) —

Barter and trade income ( 12,250 ) ( 4,469 )

4 unchanged sentences

Increase in other long-term assets ( 5,371 ) ( 6,919 )

Decrease in accounts payable ( 49,129 ) ( 7,423 )

Decrease in accrued expenses ( 151,853 ) ( 9,521 )

Increase in accrued interest 1,829 1,789

Increase (decrease) in accounts payable ( 6,963 ) 18,783

Increase (decrease) in accrued expenses ( 75,154 ) 17,455

Decrease in accrued interest ( 1,706 ) ( 31 )

Increase in deferred income 15,261 6,847

Increase in other long-term liabilities 2,059 710

Cash provided by (used for) operating activities ( 52,212 ) 71,728

Cash provided by operating activities 103,589 100,857

Cash flows from investing activities:

Business combinations — ( 230,816 )

Proceeds from sale of other investments — 50,757

Purchases of property, plant and equipment ( 72,210 ) ( 51,061 )

36 unchanged sentences

Beginning in March 2020 and continuing through the remainder of 2020 and into 2021 revenue was significantly and negatively impacted as a result of a decline in advertising spend driven by COVID-19.

As a result of continued recovery from the impact of COVID-19, our revenue for the three months ended March 31, 2022 increased significantly compared to the three months ended March 31, 2021 across each of our reportable segments.

As a result of continued recovery from the impact of COVID-19, our revenue for the three months ended June 30, 2022 increased compared to the three months ended June 30, 2021 across each of our reportable segments.

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

2 unchanged sentences

In addition, the Company claimed $ 12.4 million in refundable payroll tax credits related to the CARES Act provisions, of which $ 0.7 million was received in 2020, $ 3.8 million was received in 2021 and $ 7.9 million was received in January 2022.

As of March 31, 2022, the Company had approximately $ 279.7 million in cash and cash equivalents.

As of June 30, 2022, the Company had approximately $ 294.8 million in cash and cash equivalents.

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

7 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts reported in the Consolidated Statements of Cash Flows:

(In thousands) March 31,

(In thousands) June 30,

2022 December 31,

12 unchanged sentences

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

The Company is currently evaluating the future impact of adoption of this standard.

The Company does not expect the adoption of this standard to materially impact the financial position, results of operations or cash flows.

New Accounting Pronouncements Not Yet Adopted

8 unchanged sentences

Disaggregation of Revenue

The following tables show revenue streams for the three months ended March 31, 2022 and 2021:

The following tables show revenue streams for the three and six months ended June 30, 2022 and 2021:

(In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Revenue from contracts with customers:

13 unchanged sentences

Revenue, total $ 633,300 $ 252,561 $ 71,065 $ ( 2,921 ) $ 954,005

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 605,850 $ 197,930 $ 61,175 $ ( 3,350 ) $ 861,605

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated

Six Months Ended June 30, 2022

Revenue from contracts with customers:

Broadcast Radio (1)

$ 879,785 $ — $ — $ — $ 879,785

245,090 — — — 245,090

Sponsorship and Events (3)

71,665 — — — 71,665

Digital, excluding Podcast (4)

— 312,555 — ( 2,645 ) 309,910

— 154,225 — — 154,225

Audio & Media Services (6)

— — 131,922 ( 2,719 ) 129,203

7,265 — — ( 335 ) 6,930

Total 1,203,805 466,780 131,922 ( 5,699 ) 1,796,808

Revenue from leases (8)

655 — — — 655

Revenue, total $ 1,204,460 $ 466,780 $ 131,922 $ ( 5,699 ) $ 1,797,463

Six Months Ended June 30, 2021

Revenue from contracts with customers:

Broadcast Radio (1)

$ 809,678 $ — $ — $ — $ 809,678

238,672 — — — 238,672

Sponsorship and Events (3)

50,978 — — — 50,978

Digital, excluding Podcast (4)

— 263,703 — ( 3,072 ) 260,631

— 91,780 — — 91,780

Audio & Media Services (6)

— — 116,312 ( 3,865 ) 112,447

3,590 — — ( 335 ) 3,255

Total 1,102,918 355,483 116,312 ( 7,272 ) 1,567,441

Revenue from leases (8)

829 — — — 829

Revenue, total $ 1,103,747 $ 355,483 $ 116,312 $ ( 7,272 ) $ 1,568,270

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

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands) 2022 2021 2022 2021

1 unchanged sentence

Trade and barter expenses 29,336 40,045 75,751 68,043

The Company recognized barter revenue of $ 7.0 million and $ 2.2 million during the three months ended March 31, 2022 and 2021, respectively, in connection with investments made in companies in exchange for advertising services.

Trade and barter revenue includes $ 5.3 million and $ 2.3 million during the three months ended June 30, 2022 and 2021, respectively, and $ 12.3 million and $ 4.5 million during the six months ended June 30, 2022 and 2021, respectively, in connection with investments made in companies in exchange for advertising services.

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

Three Months Ended

June 30, Six Months Ended

(In thousands) 2022 2021 2022 2021

7 unchanged sentences

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

however, as of March 31, 2022, the Company expects to recognize $ 395.1 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years .

however, as of June 30, 2022, the Company expects to recognize $ 391.9 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years .

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

3 unchanged sentences

Revenue from Leases

As of March 31, 2022, the future lease payments to be received by the Company are as follows:

As of June 30, 2022, the future lease payments to be received by the Company are as follows:

(In thousands)

12 unchanged sentences

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

During the three months ended March 31, 2022, the Company recognized non-cash impairment charges of $ 1.3 million, including $ 1.2 million related to ROU assets, and $ 0.1 million related to leasehold improvements as a result of proactive decisions by management to abandon and sublease a number of operating leases in connection with strategic actions to streamline the Company’s real estate footprint as part of the Company’s modernization initiatives.

During the three months ended March 31, 2021, the Company recognized non-cash impairment charges of $ 37.7 million, including $ 28.8 million related to ROU assets, and $ 8.9 million related to leasehold improvements also as a result of the proactive decisions by management discussed above.

During the six months ended June 30, 2022, the Company recognized non-cash impairment charges of $ 1.6 million, including $ 1.4 million related to ROU assets, and $ 0.2 million related to leasehold improvements as a result of proactive decisions by management to abandon and sublease a number of operating leases in connection with strategic actions to streamline the Company’s real estate footprint as part of the Company’s modernization initiatives.

During the six months ended June 30, 2021, the Company recognized non-cash impairment charges of $ 37.7 million, including $ 28.8 million related to ROU assets, and $ 8.9 million related to leasehold improvements also as a result of the proactive decisions by management discussed above.

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

5 unchanged sentences

The following table provides supplemental cash flow information related to leases for the periods presented:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2022 2021

1 unchanged sentence

Lease liabilities arising from obtaining right-of-use assets (1)

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the three months ended March 31, 2022 and 2021, respectively.

135,128 17,156

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the six months ended June 30, 2022 and 2021, respectively.

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

The non-cash operating lease expense was $ 23.4 million and $ 24.8 million for the three months ended March 31, 2022 and March 31, 2021, respectively.

The non-cash operating lease expense was $ 43.3 million and $ 49.4 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

NOTE 4– PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL

Property, Plant and Equipment

The Company’s property, plant and equipment consisted of the following classes of assets as of March 31, 2022 and December 31, 2021, respectively:

(In thousands) March 31,

The Company’s property, plant and equipment consisted of the following classes of assets as of June 30, 2022 and December 31, 2021, respectively:

(In thousands) June 30,

2022 December 31,

8 unchanged sentences

Indefinite-lived Intangible Assets

The Company’s indefinite-lived intangible assets consist of Federal Communications Commission ("FCC") broadcast licenses in its Multiplatform Group segment.

The Company’s indefinite-lived intangible assets primarily consist of Federal Communications Commission ("FCC") broadcast licenses in its Multiplatform Group segment.

Other Intangible Assets

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of March 31, 2022 and December 31, 2021, respectively:

(In thousands) March 31, 2022 December 31, 2021

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of June 30, 2022 and December 31, 2021, respectively:

(In thousands) June 30, 2022 December 31, 2021

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

4 unchanged sentences

Total $ 2,338,958 $ ( 798,866 ) $ 2,338,958 $ ( 672,358 )

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended March 31, 2022 and 2021 was $ 63.1 million and $ 66.3 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended June 30, 2022 and 2021 was $ 63.4 million and $ 87.4 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Company for the six months ended June 30, 2022 and 2021 was $ 126.5 million and $ 153.7 million, respectively.

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

11 unchanged sentences

Foreign currency — — ( 217 ) ( 217 )

Balance as of March 31, 2022

Balance as of June 30, 2022

$ 1,462,023 $ 747,350 $ 103,976 $ 2,313,349

3 unchanged sentences

NOTE 5 – LONG-TERM DEBT

Long-term debt outstanding for the Company as of March 31, 2022 and December 31, 2021 consisted of the following:

(In thousands) March 31, 2022 December 31, 2021

Long-term debt outstanding for the Company as of June 30, 2022 and December 31, 2021 consisted of the following:

(In thousands) June 30, 2022 December 31, 2021

Term Loan Facility due 2026 $ 1,864,032 $ 1,864,032

1 unchanged sentence

Asset-based Revolving Credit Facility due 2023 (1)

Asset-based Revolving Credit Facility due 2027 (1)(2)

6.375 % Senior Secured Notes due 2026

14 unchanged sentences

Total long-term debt $ 5,626,744 $ 5,738,195

(1) As of March 31, 2022, the senior secured asset-based revolving credit facility (the “ABL Facility”) had a borrowing base of $ 443.6 million, no outstanding borrowings and $ 26.9 million of outstanding letters of credit, resulting in $ 416.7 million of borrowing base availability.

(1) On May 17, 2022, we entered into a $ 450.0 million New ABL Facility, maturing in 2027, which refinanced and replaced in its entirety the Existing ABL Facility.

Refer to the 'Asset-based Revolving Credit Facility due 2027' section below for more information.

(2) As of June 30, 2022, the New ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 29.4 million of outstanding letters of credit, resulting in $ 420.6 million of borrowing base availability.

(3) Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2023 through 2045.

The Company’s weighted average interest rate was 5.5 % and 5.4 % as of March 31, 2022 and December 31, 2021, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 5.8 billion and $ 5.9 billion as of March 31, 2022 and December 31, 2021, respectively.

(4) During the three months ended June 30, 2022, we repurchased $ 113.5 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 105.3 million in cash, excluding accrued interest, via open market transactions.

The repurchased notes were subsequently cancelled and retired, resulting in a gain on extinguishment of debt of $ 8.2 million.

The Company’s weighted average interest rate was 5.9 % and 5.4 % as of June 30, 2022 and December 31, 2021, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 4.9 billion and $ 5.9 billion as of June 30, 2022 and December 31, 2021, respectively.

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

Asset-based Revolving Credit Facility due 2027

On May 17, 2022, iHeartCommunications, Inc., as borrower, entered into a Credit Agreement (the “New ABL Credit Agreement”) with iHeartMedia Capital I, LLC, the direct parent of iHeartCommunications, Inc., as parent guarantor, certain subsidiaries of iHeartCommunications, Inc.

party thereto, Bank of America, N.A., as administrative and collateral agent, and each other lender party thereto from time to time, governing a new $ 450.0 million New ABL Facility, maturing in 2027, which refinanced and replaced in its entirety the Existing ABL Facility.

The New ABL Facility includes a letter of credit sub-facility and a swingline loan sub-facility.

Size and Availability

The New ABL Facility provides for a senior secured asset-based revolving credit facility in the aggregate principal amount of up to $ 450.0 million, with amounts available from time to time (including in respect of letters of credit) equal to the lesser of (A) the borrowing base, which equals the sum of (i) 90.0 % of the eligible accounts receivable of iHeartCommunications and the

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

subsidiary guarantors and (ii) 100 % of qualified cash, each subject to customary reserves and eligibility criteria, and (B) the aggregate revolving credit commitments.

Subject to certain conditions, iHeartCommunications may at any time request one or more increases in the amount of revolving credit commitments, in an amount up to the sum of (x) $ 150.0 million and (y) the amount by which the borrowing base exceeds the aggregate revolving credit commitments.

As of June 30, 2022, the New ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 29.4 million of outstanding letters of credit, resulting in $ 420.6 million of borrowing base availability.

Interest Rate and Fees

Borrowings under the New ABL Facility bear interest at a rate per annum equal to the applicable rate plus, at iHeartCommunications’ option, either (1) a base rate, (2) a term secured overnight financing rate ("SOFR") (which includes a credit spread adjustment of 10 basis points) or (3) for certain foreign currencies, a eurocurrency rate.

The applicable margin for borrowings under the New ABL Facility range from 1.25 % to 1.75 % for both eurocurrency and term SOFR borrowings and from 0.25 % to 0.75 % for base-rate borrowings, in each case, depending on average excess availability under the New ABL Facility based on the most recently ended fiscal quarter.

In addition to paying interest on outstanding principal under the New ABL Facility, iHeartCommunications is required to pay a commitment fee to the lenders under the New ABL Facility in respect of the unutilized commitments thereunder.

The commitment fee rate ranges from 0.25 % to 0.375 % per annum dependent upon average unused commitments during the prior quarter.

iHeartCommunications may also pay customary letter of credit fees.

Borrowings under the New ABL Facility will mature, and commitments thereunder will terminate, on May 17, 2027.

If at any time, the sum of the outstanding amounts under the New ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitments under the facility (such lesser amount, the “line cap”), iHeartCommunications is required to repay outstanding loans and cash collateralize letters of credit in an aggregate amount equal to such excess.

iHeartCommunications may voluntarily repay outstanding loans under the New ABL Facility at any time without premium or penalty, other than customary “breakage” costs with respect to eurocurrency rate loans.

Any voluntary prepayments made by iHeartCommunications will not reduce iHeartCommunications’ commitments under the New ABL Facility.

Guarantees and Security

The New ABL Facility is guaranteed by the guarantors of iHeartCommunications’ existing Term Loan Facility.

All obligations under the New ABL Facility, and the guarantees of those obligations, are secured by a perfected security interest in the accounts receivable and related assets of iHeartCommunications’ and all of the guarantors’ accounts receivable, qualified cash and related assets and proceeds thereof that is senior to the security interest of iHeartCommunications’ existing Term Loan Facility in such accounts receivable, qualified cash and related assets and proceeds thereof, subject to permitted liens and certain exceptions.

Certain Covenants and Events of Default

If borrowing availability is less than the greater of (a) $ 40.0 million and (b) 10 % of the aggregate commitments under the New ABL Facility, in each case, for two consecutive business days (a “Trigger Event”), iHeartCommunications will be required to comply with a minimum fixed charge coverage ratio of at least 1.00 to 1.00 for fiscal quarters ending on or after the occurrence of the Trigger Event, and must continue to comply with this minimum fixed charge coverage ratio until borrowing availability exceeds the greater of (x) $ 40.0 million and (y) 10 % of the aggregate commitments under the New ABL Facility, in each case, for 20 consecutive calendar days, at which time the Trigger Event shall no longer be deemed to be occurring.

As of June 30, 2022, no Trigger Event had occurred, and iHeartCommunications was not required to comply with this minimum fixed charge coverage ratio.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Surety Bonds, Letters of Credit and Guarantees

As of March 31, 2022, the Company and its subsidiaries had outstanding surety bonds, commercial standby letters of credit and bank guarantees of $ 8.4 million, $ 27.3 million and $ 0.2 million, respectively.

As of June 30, 2022, the Company and its subsidiaries had outstanding surety bonds, commercial standby letters of credit and bank guarantees of $ 8.3 million, $ 29.8 million and $ 0.2 million, respectively.

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

12 unchanged sentences

and tax disputes.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Alien Ownership Restrictions and FCC Petitions for Declaratory Ruling

Alien Ownership Restrictions and FCC Declaratory Ruling

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

Under the Plan of Reorganization, the Company committed to file a petition for declaratory ruling (the “PDR”) requesting the FCC to permit the Company to be up to 100% foreign-owned.

On November 5, 2020, the FCC issued a declaratory ruling, which granted the relief requested by the PDR, subject to certain conditions, as described further in Note 8, Stockholders' Equity (the "2020 Declaratory Ruling").

On January 8, 2021, the Company exchanged a portion of the outstanding Special Warrants (refer to Note 6, Stockholders' Equity , for further discussion of the "Special Warrants") into Class A common stock or Class B common stock, in compliance with the Declaratory Ruling, the Communications Act and FCC rules (the “Exchange”).

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.

On March 8, 2021, the Company filed a remedial petition for declaratory ruling (the “Remedial PDR”) with the FCC.

The Remedial PDR relates to the acquisition by Global Media & Entertainment Investments Ltd (f/k/a Honeycomb Investments Limited) (“Global Investments”) of the Company’s Class A Common Stock in a manner inconsistent with the FCC’s foreign ownership rules and the 2020 Declaratory Ruling.

On December 22, 2021, the FCC issued another declaratory ruling which granted the Remedial PDR (the "GMEI Declaratory Ruling").

Subject to certain conditions set forth therein, the GMEI Declaratory Ruling (a) grants specific approval for the more than 5 % equity and/or voting interests in the Company presently held by the GMEI Investors, (b) grants advance approval for the GMEI Investors to increase their equity and/or voting interests in the Company up to any non-controlling amount not to exceed 14.99 %, and (c) restates the terms of the 2020 Declaratory Ruling, including that the Company may have up to 100 % of its voting stock and equity owned by non-U.S.

individuals and entities.

At such time, the actions previously taken by the Board of Directors to implement the conditions required by the FCC during the pendency of the Remedial PDR ceased to apply.

On November 5, 2020, the FCC issued a declaratory ruling, which permits the Company to be up to 100 % foreign owned, subject to certain conditions, as described further in Note 8, Stockholders' Equity (the "2020 Declaratory Ruling").

NOTE 7 – INCOME TAXES

On March 11, 2021 the President signed into law the American Rescue Plan Act, which included provisions on taxes, health care, unemployment benefits, direct payments, state and local funding and other issues.

The tax provisions did not have a material impact on the Company’s tax provision calculations.

The Company’s income tax benefit (expense) for the three months ended March 31, 2022 and the three months ended March 31, 2021 consisted of the following components:

The Company’s income tax benefit (expense) for the three and six months ended June 30, 2022 and the three and six months ended June 30, 2021 consisted of the following components:

(In thousands) Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Current tax expense $ ( 38,581 ) $ ( 3,477 ) $ ( 42,160 ) $ ( 5,066 )

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Income tax benefit (expense) $ ( 1,782 ) $ ( 24,449 ) $ 18,427 $ ( 104,384 )

The effective tax rates for the three months ended March 31, 2022 and March 31, 2021 were 29.3 % and ( 49.3 )%, respectively.

The effective tax rates for the three and six months ended June 30, 2022 were 10.5 % and 35.4 %, respectively.

The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards and net operating loss carryforwards, due to uncertainty regarding the Company’s ability to utilize those assets in future periods.

NOTE 8 – STOCKHOLDERS' EQUITY

Pursuant to the Company's 2019 Eq uity Incentive Plan (the "2019 Plan"), the Company historically granted restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.

On April 21, 2021,

The effective tax rates for the three and six months ended June 30, 2021 were ( 325.5 )% and ( 61.5 )%, respectively.

The effective tax rates were primarily impacted by the deferred tax expense recorded for the valuation allowance against certain deferred tax assets for disallowed interest expense and net operating loss carryforwards due to the uncertainty of the Company’s ability to utilize those assets in future periods.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

our 2021 Long-Term Incentive Award Plan (the “2021 Plan”) was approved by stockholders and replaced the 2019 Plan.

Pursuant to our 2021 Plan, we will continue to grant restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.

NOTE 8 – STOCKHOLDERS' EQUITY

On April 21, 2021, our 2021 Long-Term Incentive Award Plan (the “2021 Plan”) was approved by stockholders and replaced the 2019 Plan.

Pursuant to our 2021 Plan, we will continue to grant equity awards covering shares of the Company's Class A common stock to certain key individuals.

Share-based Compensation

Share-based compensation expenses are recorded in Selling, general and administrative expenses and were $ 5.5 million and $ 5.7 million for the Company for the three months ended March 31, 2022 and the three months ended March 31, 2021, respectively.

Share-based compensation expenses are recorded in Selling, general and administrative expenses and were $ 8.6 million and $ 5.9 million for the Company for the three months ended June 30, 2022 and June 30, 2021, respectively.

Share-based compensation expenses were $ 14.1 million and $ 11.6 million for the Company for the six months ended June 30, 2022 and June 30, 2021, respectively.

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

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

In the three months ended March 31, 2021, the Company recognized $ 0.5 million in relation to these Performance RSUs.

On March 28, 2022, the Company issued performance-based restricted stock units (“2022 Performance RSUs”) to certain key employees.

Such 2022 Performance RSUs vest upon the achievement of total stockholder return goals and continued service, which are being measured over an approximately 50-month period from the date of issuance.

As of March 31, 2022, there was $ 34.0 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions.

In the three and six months ended June 30, 2021, the Company recognized $ 0.5 million and $ 1.0 million in relation to these Performance RSUs.

On March 28, 2022, the Company issued performance-based restricted stock units ("Q1 2022 Performance RSUs") to certain key employees.

Such Q1 2022 Performance RSUs vest upon the achievement of total stockholder return goals and continued service, which are being measured over an approximately 50-month period from the date of issuance.

In the three and six months ended June 30, 2022, the Company recognized $ 0.8 million in relation to these Q1 2022 Performance RSUs.

On May 9, 2022, the Company issued performance-based restricted stock units ("Q2 2022 Performance RSUs") and restricted stock units ("2022 RSUs") to certain key employees.

Such Q2 2022 Performance RSUs vest upon the achievement of certain total stockholder return goals, Adjusted EBITDA goals, Diversity, Equity and Inclusion goals, and continued service.

Such 2022 RSUs vest upon continued service.

These awards are being recognized ratably over a 3-year period from the date of issuance.

In the three and six months ended June 30, 2022, the Company recognized $ 0.7 million in relation to these Q2 2022 Performance RSUs.

As of June 30, 2022, there was $ 62.0 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions.

This cost is expected to be recognized over a weighted average period of approximately 3.8 years.

In addition, as of March 31, 2022, there was $ 12.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on certain performance and service conditions.

This cost will be recognized over a 50-month period from the date of issuance.

In addition, as of June 30, 2022, there were unrecognized compensation costs of $ 11.7 million for the Q1 2022 Performance RSUs and $ 14.7 million for the Q2 2022 Performance RSUs related to unvested share-based compensation arrangements that will vest based on certain performance and service conditions.

These costs will be recognized over a 50-month period from the date of issuance for the Q1 2022 Performance RSUs and over the 3-year period from the date of issuance for the Q2 2022 Performance RSUs.

Common Stock and Special Warrants

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

The following table presents the Company's Class A Common Stock, Class B Common Stock and Special Warrants issued as of March 31, 2022:

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company's Class A Common Stock, Class B Common Stock and Special Warrants issued as of June 30, 2022:

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

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Total Class A Common Stock, Class B Common Stock and Special Warrants issued 148,753,248

During the three months ended March 31, 2022, stockholders converted 159,692 shares of the Class B common stock into Class A common stock.

During the three months ended March 31, 2021, stockholders converted 154,045 shares of the Class B common stock into Class A common stock.

During the three and six months ended June 30, 2022, stockholders converted 38,528 and 198,220 shares of the Class B common stock into Class A common stock.

During the three and six months ended June 30, 2021, stockholders converted 5,433,680 and 5,587,725 shares of the Class B common stock into Class A common stock.

Special Warrants

Each Special Warrant issued under the special warrant agreement entered into in connection with the emergence from bankruptcy in 2019 may be exercised by its holder to purchase one share of Class A common stock or Class B common stock at an exercise price of $ 0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Company's outstanding Class A common stock, (b) more than 22.5 percent of the Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities,

Each Special Warrant issued under the special warrant agreement entered into in connection with the Company's emergence from bankruptcy in 2019 may be exercised by its holder to purchase one share of Class A common stock or Class B common stock at an exercise price of $ 0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Company's outstanding Class A common stock, (b) more than 22.5 percent of the Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any other applicable foreign ownership threshold or (d) violation of any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC.

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

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

As described further in Note 6 above, November 5, 2020, the FCC issued the 2020 Declaratory Ruling, which permits the Company to be up to 100 % foreign owned.

During the three and six months ended June 30, 2022, stockholders exercised 14 and 11,375 Special Warrants for an equivalent number of shares of Class A common stock.

There were no Special Warrants exercised for shares of Class B common stock during the three and six months ended June 30, 2022.

During the three and six months ended June 30, 2021, stockholders exercised 14,694 and 47,136,441 Special Warrants for an equivalent number of shares of Class A common stock.

During the six months ended June 30, 2021, stockholders exercised 22,337,312 Special Warrants for an equivalent number of shares of Class B common stock.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(c) the Company exceeding any other applicable foreign ownership threshold or (d) violation of any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC.

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

As described further in Note 6 above, on July 25, 2019, the Company filed a PDR requesting FCC consent to exceed the 25 percent foreign ownership and voting benchmarks.

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

During the three months ended March 31, 2022, stockholders exercised 11,361 Special Warrants for an equivalent number of shares of Class A common stock.

There were no Special Warrants exercised for an equivalent number of shares of Class B common stock during the three months ended March 31, 2022.

During the three months ended March 31, 2021, stockholders exercised 47,121,747 Special Warrants for an equivalent number of shares of Class A common stock.

During the three months ended March 31, 2021, stockholders exercised 22,337,312 Special Warrants for an equivalent number of shares of Class B common stock.

Computation of Loss per Share

Computation of Income (Loss) per Share

(In thousands, except per share data) Three Months Ended

Net loss attributable to the Company – common shares $ ( 48,582 ) $ ( 241,723 )

June 30, Six Months Ended

2022 2021 2022 2021

Net income (loss) attributable to the Company – common shares $ 14,401 $ ( 32,286 ) $ ( 34,181 ) $ ( 274,009 )

DENOMINATOR (1) :

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Weighted average common shares outstanding - diluted 149,131 146,509 147,783 146,362

Net loss attributable to the Company per common share:

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

Basic $ 0.10 $ ( 0.22 ) $ ( 0.23 ) $ ( 1.87 )

Diluted $ 0.10 $ ( 0.22 ) $ ( 0.23 ) $ ( 1.87 )

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Company for the three months ended March 31, 2022 and 2021.

(2) Outstanding equity awards representing 10.0 million and 10.7 million shares of Class A common stock of the Company for the three months ended March 31, 2022 and 2021, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Company for the three and six months ended June 30, 2022 and 2021.

(2) Outstanding equity awards representing 6.2 million and 10.8 million shares of Class A common stock of the Company for the three months ended June 30, 2022 and 2021, respectively, and 10.4 million and 10.8 million for the six months ended June 30, 2022 and 2021, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

NOTE 9 – SEGMENT DATA

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the Company's segment results for the Company for the three months ended March 31, 2022 and 2021:

The following tables present the Company's segment results for the Company for the three and six months ended June 30, 2022 and 2021:

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

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Revenue $ 633,300 $ 252,561 $ 71,065 $ — $ ( 2,921 ) $ 954,005

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

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Revenue $ 605,850 $ 197,930 $ 61,175 $ — $ ( 3,350 ) $ 861,605

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Share-based compensation expense ( 5,903 )

Operating income $ 28,126

Intersegment revenues $ 168 $ 1,178 $ 2,004 $ — $ — $ 3,350

Capital expenditures 21,371 6,286 1,144 3,310 — 32,111

Share-based compensation expense — — — 5,903 — 5,903

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Six Months Ended June 30, 2022

Revenue $ 1,204,460 $ 466,780 $ 131,922 $ — $ ( 5,699 ) $ 1,797,463

Operating expenses (1)

876,057 335,389 93,465 115,848 ( 5,699 ) 1,415,060

Segment Adjusted EBITDA (2)

$ 328,403 $ 131,391 $ 38,457 $ ( 115,848 ) $ — $ 382,403

Depreciation and amortization ( 224,839 )

Impairment charges ( 1,579 )

Other operating expense, net ( 16,534 )

Restructuring expenses ( 30,102 )

Share-based compensation expense ( 14,145 )

Operating income $ 95,204

Intersegment revenues $ 335 $ 2,645 $ 2,719 $ — $ — $ 5,699

Capital expenditures 48,716 11,068 4,122 8,304 — 72,210

Share-based compensation expense — — — 14,145 — 14,145

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

Six Months Ended June 30, 2021

Revenue $ 1,103,747 $ 355,483 $ 116,312 $ — $ ( 7,272 ) $ 1,568,270

Operating expenses (1)

817,558 261,182 80,492 129,555 ( 7,272 ) 1,281,515

Segment Adjusted EBITDA (2)

$ 286,189 $ 94,301 $ 35,820 $ ( 129,555 ) $ — $ 286,755

Depreciation and amortization ( 235,308 )

Impairment charges ( 37,744 )

Other operating expense, net ( 15,150 )

Restructuring expenses ( 35,195 )

Share-based compensation expense ( 11,588 )

Operating loss $ ( 48,230 )

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(1) Consolidated operating expenses consist of Direct operating expenses and Selling, general and administrative expenses and exclude Restructuring expenses, share-based compensation expenses and depreciation and amortization.

(2) For a definition of Adjusted EBITDA for the consolidated company and a reconciliation to Operating income, the most closely comparable GAAP measure, and to Net income (loss), please see "Reconciliation of Operating Loss to Adjusted EBITDA" and "Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA" in Item 2 of this Quarterly Report on Form 10-Q.

(2) For a definition of Adjusted EBITDA for the consolidated company and a reconciliation to Operating income (loss), the most closely comparable GAAP measure, and to Net income (loss), please see "Reconciliation of Operating Income (Loss) to Adjusted EBITDA" and "Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA" in Item 2 of this Quarterly Report on Form 10-Q.

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.

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

What changed 10-Q

Item 1. Financial Statements