What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-08 · 125 added, 140 removed, 598 unchanged (31% 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,

2023 December 31,

44 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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

2023 2022 2023 2022

5 unchanged sentences

Impairment charges 570 309,750 965,087 311,329

Other operating (income) expense, net ( 261 ) 15,664 ( 40 ) 16,534

Other operating expense, net 3,378 9,451 3,338 25,985

Operating income (loss) 68,965 ( 211,187 ) ( 877,091 ) ( 115,983 )

4 unchanged sentences

Other expense, net ( 738 ) ( 581 ) ( 1,109 ) ( 3,026 )

Earnings (Loss) before income taxes ( 979,339 ) 16,964 ( 1,125,597 ) ( 51,984 )

Loss before income taxes ( 18,230 ) ( 296,364 ) ( 1,143,827 ) ( 348,348 )

Income tax benefit (expense) 9,261 ( 13,412 ) 29,513 5,015

Net income (loss) ( 882,982 ) 15,182 ( 1,105,345 ) ( 33,557 )

Net loss ( 8,969 ) ( 309,776 ) ( 1,114,314 ) ( 343,333 )

Less amount attributable to noncontrolling interest 84 587 1,469 1,211

Net income (loss) attributable to the Company $ ( 884,470 ) $ 14,401 $ ( 1,106,730 ) $ ( 34,181 )

Net loss attributable to the Company $ ( 9,053 ) $ ( 310,363 ) $ ( 1,115,783 ) $ ( 344,544 )

Other comprehensive loss, net of tax:

1 unchanged sentence

Other comprehensive loss, net of tax ( 332 ) ( 606 ) ( 455 ) ( 1,503 )

Comprehensive income (loss) ( 884,547 ) 13,751 ( 1,106,853 ) ( 35,078 )

Comprehensive loss ( 9,385 ) ( 310,969 ) ( 1,116,238 ) ( 346,047 )

Less amount attributable to noncontrolling interest — — — —

Comprehensive income (loss) attributable to the Company $ ( 884,547 ) $ 13,751 $ ( 1,106,853 ) $ ( 35,078 )

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

Comprehensive loss attributable to the Company $ ( 9,385 ) $ ( 310,969 ) $ ( 1,116,238 ) $ ( 346,047 )

Net loss attributable to the Company per common share:

Basic $ ( 0.06 ) $ ( 2.09 ) $ ( 7.48 ) $ ( 2.33 )

14 unchanged sentences

Shares Special Warrants Total

March 31, 2023

June 30, 2023

124,046,612 21,347,363 5,111,055 $ 10,351 $ 145 $ 2,931,598 $ ( 3,334,212 ) $ ( 1,454 ) $ ( 9,886 ) $ ( 403,458 )

4 unchanged sentences

Conversion of Special Warrants to Class A or Class B Shares 9,185 — ( 9,185 ) — — — — — — —

Conversion of Class B Shares to Class A Shares

( 1,567 ) — — — — — ( 1,567 )

( 322 ) — — — — — ( 322 )

Other comprehensive loss — — — — ( 332 ) — ( 332 )

June 30, 2023

September 30, 2023

124,273,910 21,347,363 5,101,870 $ 8,868 $ 146 $ 2,939,331 $ ( 3,343,265 ) $ ( 1,786 ) $ ( 10,115 ) $ ( 406,821 )

7 unchanged sentences

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 178,506 — 1 59 — — ( 539 ) ( 479 )

6 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

23 unchanged sentences

Other comprehensive loss — — — — ( 455 ) — ( 455 )

June 30, 2023

September 30, 2023

124,273,910 21,347,363 5,101,870 $ 8,868 $ 146 $ 2,939,331 $ ( 3,343,265 ) $ ( 1,786 ) $ ( 10,115 ) $ ( 406,821 )

18 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

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:

7 unchanged sentences

Share-based compensation 26,833 24,582

(Gain) Loss on disposal of operating and other assets ( 1,216 ) 15,583

Loss on disposal of operating and other assets 1,706 24,547

(Gain) Loss on investments 19,924 ( 4,359 )

6 unchanged sentences

Increase in prepaid expenses and other current assets ( 56,835 ) ( 47,561 )

Increase in other long-term assets ( 2,447 ) ( 5,371 )

Decrease (Increase) in other long-term assets 401 ( 5,817 )

Decrease in accounts payable ( 60,748 ) ( 927 )

3 unchanged sentences

Increase in other long-term liabilities 46,529 3,002

Cash provided by (used for) operating activities ( 37,211 ) 103,589

Cash provided by operating activities 58,958 206,699

Cash flows from investing activities:

36 unchanged sentences

Economic Conditions

The Company's advertising revenue is correlated to changes in economic conditions.

The Company's advertising revenue is impacted by changes in economic conditions.

Increasing interest rates and high inflation have contributed to a challenging macroeconomic environment since 2022.

1 unchanged sentence

The current market uncertainty and macroeconomic conditions, a recession, or a downturn in the U.S.

economy could have a significant impact on the Company's ability to generate revenue.

economy could have a significant impact on the Company's ability to generate revenue and cash flows.

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, 2023, the Company had approximately $ 165.3 million in cash and cash equivalents, and the $ 450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility") had a borrowing base of $ 444.5 million, no outstanding borrowings and $ 24.9 million of outstanding letters of credit, resulting in $ 419.6 million of borrowing base availability.

Together with the Company's cash balance of $ 165.3 million as of June 30, 2023 and its borrowing capacity under the ABL Facility, the Company's total available liquidity was approximately $ 585 million.

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

Economic uncertainty due to inflation and higher interest rates since 2022 has resulted in, among other things, lower advertising spending by businesses.

This economic uncertainty has had an adverse impact on the Company's revenues and cash flows.

This economic uncertainty has had an adverse impact on the Company's revenues, cash flows, and trading values of the Company's debt and equity securities which indicated a need for the Company to perform an interim impairment test as of June 30, 2023 on the goodwill recorded in its reporting units, as well as its indefinite-lived Federal Communication Commission ("FCC") licenses.

The June 30, 2023 testing resulted in non-cash impairment charges of $ 595.5 million and $ 363.6 million to reduce the goodwill and FCC license balances, respectively.

No impairment was required in the third quarter as part of the 2023 annual impairment testing.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

addition, the economic uncertainty has had a significant impact on the trading values of the Company's debt and equity securities for a sustained period, indicating a need for the Company to perform an impairment test as of June 30, 2023 on the goodwill recorded in its reporting units.

In connection with testing goodwill for impairment, the Company also tested its indefinite-lived Federal Communication Commission ("FCC") licenses.

The estimated fair values of the Company’s FCC licenses, which have indefinite lives, are based on broadcast industry information, including industry-wide projections.

The factors discussed above negatively impacted certain assumptions in the discounted cash flow models used to value the Company's FCC licenses.

The Company's June 30, 2023 testing indicated that the fair values of its FCC licenses were below their carrying values, which resulted in a non-cash impairment charge of $ 363.6 million .

Based on the valuation analysis that the Company performed in connection with the interim goodwill impairment testing as of June 30, 2023, the Company determined that the estimated fair values of three of its reporting units were below their carrying values, including goodwill, which required the Company to recognize a non-cash impairment charge of $ 595.5 million to reduce the Company's goodwill balance.

The Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its 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 impact of current market conditions, as well as the timing of any recovery.

If the Company's actual results are not consistent with its estimates, the Company could be exposed to future impairment losses that could be material to its results of operations.

As of September 30, 2023, the Company had approximately $ 213.5 million in cash and cash equivalents, and the $ 450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility") had a borrowing base of $ 436.7 million, no outstanding borrowings and $ 24.9 million of outstanding letters of credit, resulting in $ 411.8 million of borrowing base availability.

The Company's total available liquidity as of September 30, 2023 was approximately $ 625 million.

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

Reclassifications

2 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) June 30,

(In thousands) September 30,

2023 December 31,

16 unchanged sentences

Disaggregation of Revenue

The following tables show revenue streams for the three and six months ended June 30, 2023 and 2022:

The following tables show revenue streams for the three and nine months ended September 30, 2023 and 2022:

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 626,383 $ 267,222 $ 61,979 $ ( 2,595 ) $ 952,989

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Revenue from contracts with customers:

17 unchanged sentences

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 1,751,340 $ 751,472 $ 189,134 $ ( 7,704 ) $ 2,684,242

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Revenue from contracts with customers:

32 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022 2023 2022

1 unchanged sentence

Trade and barter expenses 49,995 38,001 128,902 113,752

In addition to the trade and barter revenue in the table above, the Company recognized $ 3.7 million and $ 5.2 million during the three months ended June 30, 2023 and 2022, respectively, and $ 11.7 million and $ 12.3 million during the six months ended June 30, 2023 and 2022, respectively, in connection with investments made in companies in exchange for advertising services.

In addition to the trade and barter revenue in the table above, the Company recognized $ 9.7 million and $ 14.9 million during the three months ended September 30, 2023 and 2022, respectively, and $ 21.4 million and $ 27.2 million during the nine months ended September 30, 2023 and 2022, 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) 2023 2022 2023 2022

7 unchanged sentences

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

however, as of June 30, 2023, the Company expects to recognize $ 317.8 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, 2023, the Company expects to recognize $ 313.5 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, 2023, the future lease payments to be received by the Company are as follows:

As of September 30, 2023, the future lease payments to be received by the Company are as follows:

(In thousands)

11 unchanged sentences

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

On September 29, 2023, the Company completed the sale of 122 of our broadcast tower sites and related assets for $ 45.3 million and entered into operating leases for the use of space on 121 of the broadcast tower sites and related assets sold.

The Company realized a net loss of $ 3.2 million on the sale, which was recorded in Other Operating Expense, net in the Statement of Comprehensive Loss.

The leases are for an initial term of ten years and include four optional five-year renewal periods.

In connection with the transaction, the Company recorded ROU assets and lease liabilities with aggregate values of $ 26.3 million related to these leases.

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

During the three and six months ended June 30, 2023, the Company recognized non-cash impairment charges of $ 1.5 million and $ 5.5 million, respectively, due to changes in sublease assumptions for ROU assets related to certain operating leases for which management has made proactive decisions to abandon and sublease in connection with strategic actions to streamline the Company’s real estate footprint.

During the three and six months ended June 30, 2023, there were no non-cash impairment charges related to leasehold improvements.

During the three months ended June 30, 2022, the Company recognized non-cash impairment charges of $ 0.3 million, including $ 0.2 million related to ROU assets and $ 0.1 million related to leasehold improvements.

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.

During the three and nine months ended September 30, 2023, the Company recognized non-cash impairment charges of $ 0.6 million and $ 6.1 million, respectively, due to changes in sublease assumptions for ROU assets related to certain operating leases for which management has made proactive decisions to abandon and sublease in connection with strategic actions to streamline the Company’s real estate footprint.

During the three and nine months ended September 30, 2023, there were no non-cash impairment charges related to leasehold improvements.

During the three months ended September 30, 2022, the Company recognized non-cash impairment charges of $ 7.6 million, including $ 7.1 million related to ROU assets and $ 0.5 million related to leasehold improvements.

During the nine months ended September 30, 2022, the Company recognized non-cash impairment charges of $ 9.2 million, including $ 8.5 million related to ROU assets, and $ 0.7 million related to leasehold improvements.

These charges were primarily to streamline the Company's real estate footprint.

6 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) 2023 2022

2 unchanged sentences

37,736 153,866

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the six months ended June 30, 2023 and 2022, respectively.

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the nine months ended September 30, 2023 and 2022, 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 operating lease expense was $ 34.5 million and $ 43.3 million for the six months ended June 30, 2023 and 2022, respectively.

The operating lease expense was $ 50.9 million and $ 65.6 million for the nine months ended September 30, 2023 and 2022, 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, 2023 and December 31, 2022, respectively:

(In thousands) June 30,

The Company’s property, plant and equipment consisted of the following classes of assets as of September 30, 2023 and December 31, 2022, respectively:

(In thousands) September 30,

2023 December 31,

7 unchanged sentences

Property, plant and equipment, net $ 580,848 $ 694,842

On September 29, 2023, the Company completed a sale-leaseback of 122 of our broadcast tower sites and related assets for $ 45.3 million, and entered into operating leases for the use of space on 121 of the broadcast tower sites and related assets sold.

The Company realized a net loss of $ 3.2 million on the sale, which was recorded in Other Operating Expense, net in the Statement of Comprehensive Loss.

Indefinite-lived Intangible Assets

5 unchanged sentences

In addition, the economic uncertainty has had a significant impact on the trading values of the Company's debt and equity securities for a sustained period.

As a result, the Company performed an impairment test as of June 30, 2023 on its goodwill balances.

In connection with its goodwill impairment testing, the Company also performed an interim impairment test on its indefinite-lived FCC licenses.

The uncertainty surrounding the demand for advertising impacted the key industry assumptions used in the models that are utilized to value the Company's FCC licenses.

As a result, the fair values of certain of the Company's FCC licenses have decreased.

As a result, the Company performed an interim impairment test as of June 30, 2023 on its FCC licenses, which resulted in a non-cash impairment charge of $ 363.6 million to the FCC licenses balance in the second quarter of 2023.

No impairment was identified related to our FCC licenses as part of the 2023 annual impairment test performed during the third quarter.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, estimated start-up costs, and capital expenditures.

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

The Company obtained the most recent broadcast radio industry revenue projections for use in the valuation model, as well as various other sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on the Company's FCC licenses as of June 30, 2023.

Considerations in developing these assumptions included the expected impact on advertising revenues given the current market uncertainty, ranges of expected timing of recovery, discount rates and other factors.

Based on the Company's interim testing, the estimated fair values of its FCC licenses were below their carrying values.

As a result, the Company recognized a non-cash impairment charge of $ 363.6 million on its FCC licenses.

Other Intangible Assets

4 unchanged sentences

When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.

In connection with its impairment testing, the Company also assessed its other intangible assets.

In connection with its interim impairment testing as of June 30, 2023, the Company also assessed its other intangible assets.

Based on the Company’s assessment, no impairment indicators were identified related to the definite-lived intangible assets.

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of June 30, 2023 and December 31, 2022, respectively:

(In thousands) June 30, 2023 December 31, 2022

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of September 30, 2023 and December 31, 2022, respectively:

(In thousands) September 30, 2023 December 31, 2022

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

4 unchanged sentences

Total $ 2,345,660 $ ( 1,111,303 ) $ 2,345,660 $ ( 925,990 )

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended June 30, 2023 and 2022 was $ 61.8 million and $ 63.4 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Company for the six months ended June 30, 2023 and 2022 was $ 123.6 million and $ 126.5 million, respectively.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended September 30, 2023 and 2022 was $ 61.7 million and $ 63.4 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Company for the nine months ended September 30, 2023 and 2022 was $ 185.3 million and $ 189.9 million, respectively.

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

2 unchanged sentences

2024 $ 244,707

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

5 unchanged sentences

Foreign currency — ( 62 ) ( 32 ) ( 94 )

Balance as of June 30, 2023

Balance as of September 30, 2023

$ 1,340,459 $ 311,280 $ 69,484 $ 1,721,223

5 unchanged sentences

As discussed above, economic uncertainty has had a significant impact on the Company's revenue and cash flows, as well as the trading values of the Company's debt and equity securities for a sustained period.

As a result, the Company performed an impairment test as of June 30, 2023 on its goodwill.

The uncertainty surrounding the demand for advertising impacted the key assumptions used in the models which are utilized to value the Company's goodwill.

The goodwill impairment test requires measurement of the fair value of the Company's reporting units, which is compared to the carrying value of the reporting units, 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 the Company's 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.

The economic environment resulting from inflation, higher interest rates, and the related uncertainty in the markets impacted the trading values of the Company's debt and equity securities and certain assumptions used to estimate the fair values of the Company's reporting units for purposes of performing the interim goodwill impairment test.

Based on the Company's valuation analysis, it determined that the estimated fair values of three of its reporting units were below their carrying value, including goodwill, which required the Company to recognize a non-cash impairment charge of $ 595.5 million to reduce its goodwill balance.

While the Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its other intangible 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 impact of current market

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

conditions, as well as the timing of any recovery.

If the Company's actual results are not consistent with its estimates, the Company could be exposed to future impairment losses that could be material to its results of operations.

As a result, the Company performed an impairment test as of June 30, 2023 on its goodwill, resulting in a non-cash impairment charge of $ 595.5 million to the goodwill balance in the second quarter of 2023.

No impairment was identified related to our goodwill balance as part of the 2023 annual impairment test performed during the third quarter.

NOTE 5 – LONG-TERM DEBT

Long-term debt outstanding for the Company as of June 30, 2023 and December 31, 2022 consisted of the following:

(In thousands) June 30, 2023 December 31, 2022

Long-term debt outstanding for the Company as of September 30, 2023 and December 31, 2022 consisted of the following:

(In thousands) September 30, 2023 December 31, 2022

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

17 unchanged sentences

Total long-term debt $ 5,228,316 $ 5,413,503

(1) As of June 30, 2023, the ABL Facility had a borrowing base of $ 444.5 million, no outstanding borrowings and $ 24.9 million of outstanding letters of credit, resulting in $ 419.6 million of borrowing base availability.

(1) As of September 30, 2023, the ABL Facility had a borrowing base of $ 436.7 million, no outstanding borrowings and $ 24.9 million of outstanding letters of credit, resulting in $ 411.8 million of borrowing base availability.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2) Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2024 through 2045.

(3) During the three months ended June 30, 2023, the Company repurchased $ 79.9 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 57.0 million in cash, excluding accrued interest, via open market transactions.

(3) During the three months ended September 30, 2023, the Company repurchased $ 89.1 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 65.2 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 $ 23.9 million.

During the six months ended June 30, 2023, the Company repurchased $ 99.9 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 72.4 million in cash, excluding accrued interest, via open market transactions.

During the nine months ended September 30, 2023, the Company repurchased $ 189.0 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 137.5 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 $ 51.5 million.

During the three and six months ended, June 30, 2022, the Company 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.

During the three months ended September 30, 2022, the Company 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 7.2 % and 6.9 % as of June 30, 2023 and December 31, 2022, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 4.2 billion and $ 4.8 billion as of June 30, 2023 and December 31, 2022, respectively.

During the nine months ended September 30, 2022, the Company 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 7.3 % and 6.9 % as of September 30, 2023 and December 31, 2022, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 4.4 billion and $ 4.8 billion as of September 30, 2023 and December 31, 2022, 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.

On June 15, 2023, iHeartCommunications, Inc.

("iHeartCommunications") entered into an amendment to the credit agreement governing its term loan credit facilities (the "Term Loan Facility").

("iHeartCommunications"), a wholly-owned subsidiary of iHeartMedia, entered into an amendment to the credit agreement governing its term loan credit facilities (the "Term Loan Facility").

The amendment replaces the prior Eurocurrency interest rate, based upon LIBOR, with the Secured Overnight Financing Rate (“SOFR”) successor rate plus a SOFR adjustment as specified in the credit agreement.

The Term Loan Facility margins remain the same with the Term Loan Facility due 2026 containing margins of 3.00 % for Term SOFR Loans (as defined in the credit agreement) and 2.00 % for Base Rate Loans (as defined in the credit agreement), and the incremental Term Loan Facility due 2026 containing margins of 3.25 % for Term SOFR Loans with a floor of 0.50 % and 2.25 % for Base Rate Loans with a floor of 1.50 %.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Surety Bonds and Letters of Credit

As of June 30, 2023, the Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $ 8.7 million and $ 24.9 million, respectively.

As of September 30, 2023, the Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $ 9.0 million and $ 24.9 million, respectively.

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

15 unchanged sentences

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 (the "2020 Declaratory Ruling").

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – INCOME TAXES

The Company’s income tax benefit (expense) for the three and six months ended June 30, 2023 and the three and six months ended June 30, 2022 consisted of the following components:

The Company’s income tax benefit (expense) for the three and nine months ended September 30, 2023 and the three and nine months ended September 30, 2022 consisted of the following components:

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Current tax expense $ ( 35,161 ) $ ( 38,581 ) $ ( 38,646 ) $ ( 42,160 )

Current tax benefit (expense) $ ( 38,930 ) $ 15,871 $ ( 77,576 ) $ ( 26,289 )

Deferred tax benefit (expense) 48,191 ( 29,283 ) 107,089 31,304

Income tax benefit (expense) $ 9,261 $ ( 13,412 ) $ 29,513 $ 5,015

The effective tax rates for the three and six months ended June 30, 2023 were 9.8 % and 1.8 %, respectively.

The effective tax rates for the three and nine months ended September 30, 2023 were 50.8 % and 2.6 %, 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, as well as to impairment charges to non-deductible goodwill as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

The deferred tax benefit primarily consists of $ 92.9 million related to the FCC license impairment charges recorded during the period.

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 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 and net operating loss carryforwards, due to uncertainty regarding the Company’s ability to utilize those assets in future periods.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – STOCKHOLDERS' EQUITY (DEFICIT)

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Share-based Compensation

Share-based compensation expenses are recorded in Selling, general and administrative expenses and were $ 9.2 million and $ 8.6 million for the three months ended June 30, 2023 and 2022, respectively.

Share-based compensation expenses were $ 19.4 million and $ 14.1 million for the Company for the six months ended June 30, 2023 and 2022, respectively.

Share-based compensation expenses are recorded in Selling, general and administrative expenses and were $ 8.2 million and $ 10.4 million for the three months ended September 30, 2023 and 2022, respectively.

Share-based compensation expenses were $ 27.6 million and $ 24.6 million for the Company for the nine months ended September 30, 2023 and 2022, respectively.

The Company periodically issues restricted stock units ("RSUs") and performance-based RSUs ("Performance RSUs") to certain key employees.

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On May 18, 2023, the Company issued additional RSUs and Performance RSUs to certain key employees.

The following tables present the Company's total share based compensation expense by award type for the three and six months ended June 30, 2023 and 2022:

The following table presents the Company's total share based compensation expense by award type for the three and nine months ended September 30, 2023 and 2022:

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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Total Share Based Compensation Expense $ 8,191 $ 10,437 $ 27,555 $ 24,582

As of June 30, 2023, there was $ 42.3 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions.

As of September 30, 2023, there was $ 36.5 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 1.9 years.

In addition, as of June 30, 2023, there were unrecognized compensation costs of $ 24.6 million for the 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, 2023, there were unrecognized compensation costs of $ 22.3 million for the 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 3-year or 50-month period from the date of issuance.

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As mentioned in Note 6 above, on 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 nine months ended September 30, 2023, there were 9,185 and 9,383 Special Warrants, respectively, exercised for shares of Class A common stock.

During the three and nine months ended September 30, 2023, there were none and 59 Special Warrants, respectively, exercised for 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, respectively, for an equivalent number of shares of Class A common stock.

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

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three and six months ended June 30, 2023, there were 198 Special Warrants exercised for shares of Class A common stock.

During the three and six months ended June 30, 2023, there were 59 Special Warrants exercised for shares of Class B common stock.

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

During the six months ended June 30, 2022, there were no Special Warrants exercised for shares of Class B common stock.

Computation of Income (Loss) per Share

Computation of Loss per Share

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) attributable to the Company – common shares $ ( 884,470 ) $ 14,401 $ ( 1,106,730 ) $ ( 34,181 )

Net loss attributable to the Company – common shares $ ( 9,053 ) $ ( 310,363 ) $ ( 1,115,783 ) $ ( 344,544 )

DENOMINATOR (1) :

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Weighted average common shares outstanding - diluted 149,695 148,299 149,084 147,957

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

Net loss attributable to the Company per common share:

Basic $ ( 0.06 ) $ ( 2.09 ) $ ( 7.48 ) $ ( 2.33 )

Diluted $ ( 0.06 ) $ ( 2.09 ) $ ( 7.48 ) $ ( 2.33 )

(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, 2023 and 2022.

(2) Outstanding equity service awards representing 13.8 million and 6.2 million shares of Class A common stock of the Company for the three months ended June 30, 2023 and 2022, respectively, and $ 12.7 million and $ 10.4 million for the six months ended June 30, 2023 and 2022 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, 2023 and 2022.

(2) Outstanding equity service awards representing 14.6 million and 11.7 million shares of Class A common stock of the Company for the three months ended September 30, 2023 and 2022, respectively, and 13.3 million and 10.8 million for the nine months ended September 30, 2023 and 2022 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 and six months ended June 30, 2023 and 2022:

The following tables present the Company's segment results for the Company for the three and nine months ended September 30, 2023 and 2022:

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenue $ 626,383 $ 267,222 $ 61,979 $ — $ ( 2,595 ) $ 952,989

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Impairment charges ( 570 )

Other operating income, net 261

Other operating expense, net ( 3,378 )

Restructuring expenses ( 16,227 )

Share-based compensation expense ( 8,191 )

Operating loss $ ( 897,194 )

Operating income $ 68,965

Intersegment revenues $ — $ 1,222 $ 1,373 $ — $ — $ 2,595

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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, 2022

Three Months Ended September 30, 2022

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

8 unchanged sentences

Share-based compensation expense ( 10,437 )

Operating income $ 82,869

Operating loss $ ( 211,187 )

Intersegment revenues $ 112 $ 1,314 $ 1,287 $ — $ — $ 2,713

5 unchanged sentences

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenue $ 1,751,340 $ 751,472 $ 189,134 $ — $ ( 7,704 ) $ 2,684,242

5 unchanged sentences

Impairment charges ( 965,087 )

Other operating income, net 40

Other operating expense, net ( 3,338 )

Restructuring expenses ( 46,469 )

5 unchanged sentences

(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

8 unchanged sentences

Share-based compensation expense ( 24,582 )

Operating income $ 95,204

Operating loss $ ( 115,983 )

Intersegment revenues $ 447 $ 3,959 $ 4,006 $ — $ 8,412

5 unchanged sentences

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