What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 127 added, 95 removed, 632 unchanged (26% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

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

2022 December 31,

45 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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

(In thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

8 unchanged sentences

Interest expense, net 87,890 82,481 248,603 252,489

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

Gain (loss) on investments, net ( 3,466 ) ( 10,367 ) 4,359 39,468

Equity in loss of nonconsolidated affiliates ( 132 ) ( 1,056 ) ( 190 ) ( 1,115 )

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

Gain (loss) on extinguishment of debt 6,892 ( 7,896 ) 15,095 ( 7,896 )

Other expense, net ( 581 ) ( 1,785 ) ( 3,026 ) ( 2,955 )

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

Loss before income taxes ( 296,364 ) ( 23,474 ) ( 348,348 ) ( 193,106 )

Income tax benefit (expense) ( 13,412 ) 27,147 5,015 ( 77,237 )

21 unchanged sentences

Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

Capital Accumulated Deficit Accumulated

Comprehensive Loss Treasury

1 unchanged sentence

Shares Special Warrants Total

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

Net income 781 — — 14,401 — — 15,182

Net income (loss) 587 — — ( 310,363 ) — — ( 309,776 )

Vesting of restricted stock and other

1 unchanged sentence

Share-based compensation — — 10,437 — — — 10,437

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

Conversion of Special Warrants to Class A or Class B Shares 85,141 96,602 ( 181,743 ) — — — — — — —

Conversion of Class B Shares to Class A Shares

2 unchanged sentences

Other comprehensive loss — — — — ( 606 ) — ( 606 )

June 30, 2022

September 30, 2022

122,341,086 21,479,356 5,111,312 $ 9,059 $ 144 $ 2,901,625 $ ( 2,307,363 ) $ ( 1,760 ) $ ( 8,895 ) $ 592,810

12 unchanged sentences

Shares Special Warrants Total

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

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

Net income 493 — — 3,180 — — 3,673

Vesting of restricted stock and other 216,707 — ( 1 ) 745 — — ( 916 ) ( 172 )

1 unchanged sentence

— — 5,993 — — — 5,993

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

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

Conversion of Special Warrants to Class A and Class B Shares

60,698 ( 60,698 ) — 1 ( 1 ) — — — —

Conversion of Class B Shares to Class A Shares 1,130,851 ( 1,130,851 ) — — — — — — —

Other ( 187 ) — — — — — ( 187 )

Other comprehensive loss — — — — ( 131 ) — ( 131 )

June 30, 2021

September 30, 2021

119,669,831 22,505,661 5,304,430 $ 8,274 $ 142 $ 2,870,394 $ ( 2,074,449 ) $ ( 193 ) $ ( 6,147 ) $ 798,021

19 unchanged sentences

Share-based compensation — — 24,582 — — — 24,582

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

Conversion of Special Warrants to Class A or Class B Shares 96,516 96,602 ( 193,118 ) — — — — — — —

Conversion of Class B Shares to Class A Shares

2 unchanged sentences

Other comprehensive loss — — — — ( 1,503 ) — ( 1,503 )

June 30, 2022

September 30, 2022

122,341,086 21,479,356 5,111,312 $ 9,059 $ 144 $ 2,901,625 $ ( 2,307,363 ) $ ( 1,760 ) $ ( 8,895 ) $ 592,810

10 unchanged sentences

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 )

Net income (loss) 486 — — ( 270,829 ) — — ( 270,343 )

Vesting of restricted stock 1,027,252 — — 3,863 — — ( 2,948 ) 915

4 unchanged sentences

Other comprehensive loss — — — — ( 387 ) — ( 387 )

June 30, 2021

September 30, 2021

119,669,831 22,505,661 5,304,430 $ 8,274 $ 142 $ 2,870,394 $ ( 2,074,449 ) $ ( 193 ) $ ( 6,147 ) $ 798,021

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) Six Months Ended June 30,

(In thousands) Nine Months Ended September 30,

Cash flows from operating activities:

10 unchanged sentences

Equity in loss of nonconsolidated affiliates 190 1,115

Gain on extinguishment of debt ( 8,203 ) —

(Gain) loss on extinguishment of debt ( 15,095 ) 7,896

Barter and trade income ( 27,174 ) ( 9,418 )

1 unchanged sentence

Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:

Decrease in accounts receivable 54,240 36,289

(Increase) decrease in accounts receivable 38,685 ( 37,776 )

Increase in prepaid expenses and other current assets ( 47,561 ) ( 33,486 )

2 unchanged sentences

Increase (decrease) in accrued expenses ( 84,308 ) 48,861

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

Increase (decrease) in accrued interest ( 4,524 ) 1,766

Increase in deferred income 18,392 2,500

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All significant intercompany transactions are eliminated in the consolidation process.

Our business has been adversely impacted by the novel coronavirus pandemic (“COVID-19”), its impact on the operating and economic environment and related, near-term advertiser spending decisions.

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 June 30, 2022 increased compared to the three months ended June 30, 2021 across each of our reportable segments.

Economic Conditions

The Company's advertising revenue is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with GDP.

GDP decreased in the first and second quarters of 2022 and increased in the third quarter of 2022 while there was an increase in GDP in each quarter in 2021.

The rise in interest rates and historically high inflation have also contributed to a more challenging macroeconomic environment.

This challenging environment has led to market uncertainty which impacted 2022 Multiplatform Group revenues, particularly during the third quarter.

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 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.

As of September 30, 2022, the Company had approximately $ 295.4 million in cash and cash equivalents.

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

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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) June 30,

(In thousands) September 30,

2022 December 31,

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Disaggregation of Revenue

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

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

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Revenue from contracts with customers:

1 unchanged sentence

$ 485,571 $ — $ — $ — $ 485,571

127,239 — — — 127,239

Sponsorship and Events (3)

10 unchanged sentences

Revenue, total $ 659,896 $ 253,953 $ 77,794 $ ( 2,713 ) $ 988,930

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Revenue from contracts with customers:

18 unchanged sentences

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 1,864,356 $ 720,733 $ 209,716 $ ( 8,412 ) $ 2,786,393

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Revenue from contracts with customers:

31 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2022 2021 2022 2021

1 unchanged sentence

Trade and barter expenses 38,001 33,955 113,752 101,998

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.

Trade and barter revenue includes $ 14.9 million and $ 4.9 million during the three months ended September 30, 2022 and 2021, respectively, and $ 27.2 million and $ 9.4 million during the nine months ended September 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

September 30, Nine Months Ended

September 30,

(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 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 .

however, as of September 30, 2022, the Company expects to recognize $ 387.2 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 June 30, 2022, the future lease payments to be received by the Company are as follows:

As of September 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 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.

During the nine months ended September 30, 2022, the Company recognized non-cash impairment charges of $ 8.5 million related to ROU assets and $ 0.7 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 nine months ended September 30, 2021, the Company recognized non-cash impairment charges of $ 49.4 million, including $ 38.0 million related to ROU assets, and $ 11.4 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:

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2022 2021

2 unchanged sentences

153,866 35,317

(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.

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the nine months ended September 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 $ 43.3 million and $ 49.4 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

The non-cash operating lease expense was $ 65.6 million and $ 75.8 million for the nine months ended September 30, 2022 and September 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 June 30, 2022 and December 31, 2021, respectively:

(In thousands) June 30,

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

(In thousands) September 30,

2022 December 31,

9 unchanged sentences

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

The Company performs its annual impairment test on our goodwill and indefinite-lived Federal Communication Commission ("FCC") licenses as of July 1 of each year.

The current macroeconomic conditions have led to uncertainty, resulting in slowing broadcast revenue growth and declines in margins as inflation and interest rates continue to rise.

These factors have negatively impacted the key assumptions used in the discounted cash flow models that are utilized to value the Company's FCC licenses and goodwill, particularly the discount rates used in estimating fair values.

This has resulted in a significant decrease in the fair values of certain of the Company's FCC licenses and reporting units.

The Company's FCC licenses are valued using a direct valuation approach, with the key assumptions being market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, and estimated start-up capital costs.

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

The Company obtained recent broadcast radio industry revenue projections which it considered along with various other sources of data in developing the assumptions used for purposes of performing impairment testing on its FCC licenses as of July 1, 2022.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Based on the Company's testing, the estimated fair value of the FCC licenses was below their carrying values.

As a result, the Company recognized a non-cash impairment charge of $ 302.1 million on its FCC licenses.

Other Intangible Assets

2 unchanged sentences

These assets are recorded at amortized cost.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(In thousands) June 30, 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 September 30, 2022 and December 31, 2021, respectively:

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

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

4 unchanged sentences

Total $ 2,339,607 $ ( 862,265 ) $ 2,338,958 $ ( 672,358 )

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.

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended September 30, 2022 and 2021 was $ 63.4 million and $ 64.3 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Company for the nine months ended September 30, 2022 and 2021 was $ 189.9 million and $ 218.0 million, respectively.

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

2 unchanged sentences

2023 $ 244,387

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in the carrying amount of goodwill:

7 unchanged sentences

Foreign currency — — ( 383 ) ( 383 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ 1,462,022 $ 747,350 $ 103,810 $ 2,313,182

Goodwill Impairment Testing

The fair values of the Company's reporting units were reevaluated as of July 1, 2022 as part of the Company's annual impairment assessment and no goodwill impairment was recorded as the estimated fair values of the reporting units exceeded the carrying values of the reporting units’ net assets, including goodwill.

The Company's annual impairment testing resulted in a significant decrease in the fair values of its reporting units.

However, the decrease in fair values did not result in carrying amounts exceeding fair values of the Company's reporting units, accordingly, the annual impairment test did not result in any impairment of the Company's goodwill balance.

The goodwill impairment test requires the Company to measure the fair value of our reporting units and compare the estimated fair value to the carrying value, including goodwill.

Each of the Company's reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate.

Terminal values were also estimated and discounted to their present value.

Assessing the recoverability of goodwill requires the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data.

There are inherent uncertainties related to these factors and in management’s judgment in applying these factors.

As with the impairment testing performed on the Company's FCC licenses described above, the deterioration in market conditions and uncertainty in the markets impacted the assumptions used to estimate the discounted future cash flows of our reporting units for purposes of performing the goodwill impairment test.

IHEARTMEDIA, INC.

2 unchanged sentences

NOTE 5 – LONG-TERM DEBT

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

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

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

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

20 unchanged sentences

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.

(2) As of September 30, 2022, the New ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 27.0 million of outstanding letters of credit, resulting in $ 423.0 million of borrowing base availability.

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

(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.

(4) During the three months ended September 30, 2022, we repurchased $ 75.0 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 68.1 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 $ 6.9 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.

During the nine months ended September 30, 2022, we repurchased $ 188.5 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 173.4 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 $ 15.1 million.

The Company’s weighted average interest rate was 6.4 % and 5.4 % as of September 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 $ 5.0 billion and $ 5.9 billion as of September 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.

3 unchanged sentences

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

Size and Availability

IHEARTMEDIA, INC.

1 unchanged sentence

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.

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 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.

As of September 30, 2022, the New ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 27.0 million of outstanding letters of credit, resulting in $ 423.0 million of borrowing base availability.

Interest Rate and Fees

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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.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Surety Bonds, Letters of Credit and Guarantees

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.

As of September 30, 2022, the Company and its subsidiaries had outstanding surety bonds, commercial standby letters of credit and bank guarantees of $ 8.8 million, $ 27.4 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.

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NOTE 7 – INCOME TAXES

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:

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

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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

Current tax benefit (expense) $ 15,871 $ ( 7,651 ) $ ( 26,289 ) $ ( 12,717 )

Deferred tax benefit (expense) ( 29,283 ) 34,798 31,304 ( 64,520 )

Income tax benefit (expense) $ ( 13,412 ) $ 27,147 $ 5,015 $ ( 77,237 )

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.

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 for the three and nine months ended September 30, 2022 were ( 4.5 )% and 1.4 %, 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, due to uncertainty regarding the Company’s ability to utilize those assets in future periods.

The effective tax rates for the three and nine months ended September 30, 2021 were 115.6 % and ( 40.0 )%, 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.

7 unchanged sentences

Share-based Compensation

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.

Share-based compensation expenses are recorded in Selling, general and administrative expenses and were $ 10.4 million and $ 6.0 million for the Company for the three months ended September 30, 2022 and September 30, 2021, respectively.

Share-based compensation expenses were $ 24.6 million and $ 17.6 million for the Company for the nine months ended September 30, 2022 and September 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 and six months ended June 30, 2021, the Company recognized $ 0.5 million and $ 1.0 million in relation to these Performance RSUs.

In the three and nine months ended September 30, 2021, the Company recognized $ 0.4 million and $ 1.4 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.

In the three and nine months ended September 30, 2022, the Company recognized $ 0.8 million and $ 1.5 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.

2 unchanged sentences

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.

In the three and nine months ended September 30, 2022, the Company recognized $ 1.3 million and $ 2.0 million in relation to these Q2 2022 Performance RSUs.

As of September 30, 2022, there was $ 54.3 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions.

This cost is expected to be recognized over a weighted average period of approximately 3.4 years.

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.

In addition, as of September 30, 2022, there were unrecognized compensation costs of $ 11.0 million for the Q1 2022 Performance RSUs and $ 13.4 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.

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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:

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

September 30,

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 148,931,754

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.

During the three and nine months ended September 30, 2022, stockholders converted 9,218 and 207,438 shares of the Class B common stock into Class A common stock.

During the three and nine months ended September 30, 2021, stockholders converted 1,130,851 and 6,718,576 shares of the Class B common stock into Class A common stock.

Special Warrants

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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.

During the three and nine months ended September 30, 2022, stockholders exercised 85,141 and 96,516 Special Warrants for an equivalent number of shares of Class A common stock.

There were 96,602 Special Warrants exercised for shares of Class B common stock during the three and nine months ended September 30, 2022.

During the three and nine months ended September 30, 2021, stockholders exercised 60,698 and 47,197,139 Special Warrants for an equivalent number of shares of Class A common stock.

During the nine months ended September 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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(In thousands, except per share data) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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Diluted $ ( 2.09 ) $ 0.02 $ ( 2.33 ) $ ( 1.85 )

(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.

(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 nine months ended September 30, 2022 and 2021.

(2) Outstanding equity awards representing 11.7 million and 0.3 million shares of Class A common stock of the Company for the three months ended September 30, 2022 and 2021, respectively, and 10.8 million and 10.6 million for the nine months ended September 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

The Company’s primary businesses are included in its Multiplatform Group and Digital Audio Group segments.

Revenue and expenses earned and charged between Multiplatform Group, Digital Audio Group, Corporate and the Company's Audio & Media Services Group are eliminated in consolidation.

Revenue and expenses earned and charged between Multiplatform Group, Digital Audio Group, Audio & Media Services Group, and Corporate are eliminated in consolidation.

The Multiplatform Group provides media and entertainment services via broadcast delivery and also includes the Company’s events and national syndication businesses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following tables present the Company's segment results for the Company for the three and nine months ended September 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 June 30, 2022

Three Months Ended September 30, 2022

Revenue $ 659,896 $ 253,953 $ 77,794 $ — $ ( 2,713 ) $ 988,930

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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 June 30, 2021

Three Months Ended September 30, 2021

Revenue $ 658,979 $ 205,769 $ 66,078 $ — $ ( 2,775 ) $ 928,051

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Revenue $ 1,864,356 $ 720,733 $ 209,716 $ — $ ( 8,412 ) $ 2,786,393

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

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Revenue $ 1,762,726 $ 561,252 $ 182,390 $ — $ ( 10,047 ) $ 2,496,321

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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.

What changed 10-Q

Item 1. Financial Statements