What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-09 compared with 2023-08-08 · 161 added, 149 removed, 393 unchanged (44% of the section changed)

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These variable expenses primarily relate to costs in our programming and sales departments, including profit sharing fees and commissions, and bad debt.

Our content costs, including music license fees for music delivered via broadcast, vary with the volume and mix of songs played on our stations.

Our content costs vary with the volume and mix of songs played on our stations.

Digital Audio Group

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Economic Conditions

Our advertising revenue is correlated to changes in economic conditions.

Our advertising revenue is impacted by changes in economic conditions.

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

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

As a result, we performed impairment tests as of June 30, 2023 on our indefinite-lived Federal Communication Commission ("FCC") licenses and goodwill.

The uncertainty surrounding the demand for advertising and the adverse impact on the trading values of our debt and equity securities impacted the key assumptions used in the models that are utilized to value our FCC licenses and goodwill.

As a result, the fair values of certain of our FCC licenses and reporting units have decreased.

Our 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.

We obtained the most recent broadcast radio industry revenue projections for use in our 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 our 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 our interim testing, the estimated fair value of our FCC licenses was below their carrying values.

As a result, we recognized a non-cash impairment charge of $363.6 million on our FCC licenses.

The goodwill impairment test requires us to measure the fair value of our reporting units, which is compared to the carrying value of the reporting units, including goodwill.

Each of our 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 us 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.

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

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

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our long-lived assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the impact of current market conditions, as well as the timing of any recovery.

If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.

As a result, we performed an interim impairment test as of June 30, 2023 on our indefinite-lived Federal Communication Commission ("FCC") licenses and goodwill.

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

We perform our annual impairment test on goodwill and indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year.

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

We recognized a non-cash impairment charge of $302.1 million on our FCC licenses as part of our 2022 annual impairment testing performed in the third quarter of 2022.

As part of our operating-expense-savings initiatives, we have taken proactive steps to streamline our real estate footprint and reduce related lease and operating expenses incurred by the Company.

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Executive Summary

Revenues for the second quarter of 2023 decreased for our Multiplatform Group segment due to lower spending on radio advertising in connection with the uncertain market conditions, and increased for our Digital Audio Group segment.

Revenues for the third quarter of 2023 decreased for our Multiplatform Group segment due to lower spending on radio advertising in connection with the uncertain market conditions and a decrease in political revenue as 2022 was a mid-term election year, and increased for our Digital Audio Group segment.

The key developments that impacted our business during the quarter are summarized below:

• Consolidated Revenue of $920.0 million decreased $34.0 million, or 3.6%, during the quarter ended June 30, 2023 compared to Consolidated Revenue of $954.0 million in the prior year's second quarter.

• Revenue and Segment Adjusted EBITDA from our Multiplatform Group decreased $37.4 million and $32.1 million compared to the prior year's second quarter, respectively.

• Revenue and Segment Adjusted EBITDA from our Digital Audio Group increased $8.3 million and $5.7 million compared to the prior year's second quarter, respectively.

• Revenue and Segment Adjusted EBITDA from our Audio & Media Services Group decreased $5.3 million and $3.6 million compared to the prior year's second quarter, respectively.

• Operating loss of $897.2 million, decreased $980.1 million from Operating income of $82.9 million in the prior year’s second quarter mainly due to the non-cash impairment charges of $960.6 million, primarily related to our goodwill and indefinite-lived intangible assets balances.

• Net loss of $883.0 million, a decrease of $898.2 million from Net income of $15.2 million in the prior year's second quarter primarily related to the non-cash impairment charge of $960.6 million, primarily related to our goodwill and indefinite-lived intangible assets.

• Cash flows provided by operating activities of $56.8 million decreased from $155.8 million provided by operating activities in the prior year's second quarter.

• Adjusted EBITDA (1) of $191.2 million, was down $46.0 million from $237.2 million in prior year's second quarter.

• Free cash flow (2) of $34.0 million decreased from $106.1 million in the prior year's second quarter.

• Consolidated Revenue of $953.0 million decreased $35.9 million, or 3.6%, during the quarter ended September 30, 2023 compared to Consolidated Revenue of $988.9 million in the prior year's third quarter.

• Revenue and Segment Adjusted EBITDA from our Multiplatform Group decreased $33.5 million and $44.8 million compared to the prior year's third quarter, respectively.

• Revenue and Segment Adjusted EBITDA from our Digital Audio Group increased $13.3 million and $15.3 million compared to the prior year's third quarter, respectively.

• Revenue and Segment Adjusted EBITDA from our Audio & Media Services Group decreased $15.8 million and $12.8 million compared to the prior year's third quarter, respectively.

• Operating income of $69.0 million increased $280.2 million from Operating loss of $211.2 million in the prior year’s third quarter mainly due to the non-cash intangible impairment charge of $302.1 million, related to our indefinite-lived intangible asset balance, in the prior year’s third quarter.

• Net loss of $9.0 million, a decrease of $300.8 million from Net loss of $309.8 million in the prior year's third quarter mainly due to the non-cash impairment charge of $302.1 million, related to our indefinite-lived intangible asset balance in the prior year’s third quarter.

• Cash flows provided by operating activities of $96.2 million decreased from $103.1 million provided by operating activities in the prior year's third quarter.

• Adjusted EBITDA (1) of $203.8 million, was down $48.5 million from $252.2 million in prior year's third quarter.

• Free cash flow (2) of $67.7 million increased from $62.8 million in the prior year's third quarter.

• In addition, received proceeds of $45.3 million upon the sale of certain broadcast tower sites and related assets;

leasing back tower site space under long-term operating leases.

The table below presents a summary of our historical results of operations for the periods presented:

(In thousands) Three Months Ended

September 30,

Revenue $ 952,989 $ 988,930

Operating income (loss) 68,965 (211,187)

Net income (loss) (882,982) 15,182

Net loss (8,969) (309,776)

Cash provided by operating activities 96,169 103,110

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67,651 62,753

(1) For a definition of Adjusted EBITDA 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 this MD&A.

(2) For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by (used for) operating activities to Free cash flow” in this MD&A.

(1) For a definition of Adjusted EBITDA and a reconciliation to Operating income (loss), the most closely comparable GAAP measure, and to Net loss, please see "Reconciliation of Operating income (loss) to Adjusted EBITDA" and "Reconciliation of Net loss to EBITDA and Adjusted EBITDA" in this MD&A.

(2) For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free cash flow” in this MD&A.

Results of Operations

The tables below present the comparison of our historical results of operations for the three and six months ended June 30, 2023 to the three and six months ended June 30, 2022:

The tables below present the comparison of our historical results of operations for the three and nine months ended September 30, 2023 to the three and nine months ended September 30, 2022:

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

Income (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)

The table below presents the comparison of our revenue streams for the three and six months ended June 30, 2023 to the three and six months ended June 30, 2022:

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

The table below presents the comparison of our revenue streams for the three and nine months ended September 30, 2023 to the three and nine months ended September 30, 2022:

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2023 2022 Change 2023 2022 Change

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Revenue, total $ 952,989 $ 988,930 (3.6) % $ 2,684,242 $ 2,786,393 (3.7) %

Consolidated results for the three and six months ended June 30, 2023 compared to the consolidated results for the three and six months ended June 30, 2022 were as follows:

Consolidated revenue decreased $34.0 million during the three months ended June 30, 2023 compared to the same period of 2022.

Multiplatform Group revenue decreased $37.4 million, or 5.9%, primarily resulting from a decrease in broadcast advertising due to a challenging macroeconomic environment as discussed above, as well as a decline in political advertising.

Consolidated results for the three and nine months ended September 30, 2023 compared to the consolidated results for the three and nine months ended September 30, 2022 were as follows:

Consolidated revenue decreased $35.9 million during the three months ended September 30, 2023 compared to the same period of 2022.

Multiplatform Group revenue decreased $33.5 million, or 5.1%, primarily resulting from a decrease in broadcast advertising due to the challenging macroeconomic environment as discussed above and a decline in political advertising, partially offset by an increase in trade and barter revenues and higher revenues from live events.

Digital Audio Group revenue increased $13.3 million, or 5.2%, driven primarily by continuing increases in demand for podcast advertising.

Audio & Media Services revenue decreased $5.3 million primarily due to a decrease in political revenue, partially offset by continued growth in digital revenues.

Consolidated revenue decreased $66.2 million during the six months ended June 30, 2023 compared to the same period of 2022.

Multiplatform Group revenue decreased $79.5 million, or 6.6%, primarily resulting from a decrease in broadcast advertising due to a more challenging macroeconomic environment as discussed above, as well as a decline in political advertising.

Digital Audio Group revenue increased $17.5 million, or 3.7%, driven primarily by continuing increases in demand for digital advertising.

Audio & Media Services revenue decreased $4.8 million primarily due to a decrease in political revenue, partially offset by continued growth in digital revenues.

Audio & Media Services revenue decreased $15.8 million primarily due to a decrease in political revenue.

Consolidated revenue decreased $102.2 million during the nine months ended September 30, 2023 compared to the same period of 2022.

Multiplatform Group revenue decreased $113.0 million, or 6.1%, primarily resulting from a decrease in broadcast advertising due to the more challenging macroeconomic environment as discussed above and a decline in political advertising, partially offset by an increase in trade and barter revenues and higher revenues from live events.

Digital Audio Group revenue increased $30.7 million, or 4.3%, driven primarily by continuing increases in demand for podcast advertising.

Audio & Media Services revenue decreased $20.6 million primarily due to a decrease in political revenue.

Direct Operating Expenses

Consolidated direct operating expenses decreased $10.3 million during the three months ended June 30, 2023 compared to the same period of 2022.

The decrease in direct operating expenses was primarily driven by lower digital performance royalty fees including the impact of expenses recorded in 2022 upon the settlement of amounts related to prior years, as well as lower employee compensation as a result of cost savings initiatives.

The decrease was partially offset by higher variable content costs resulting from an increase in digital revenue, including third-party digital costs and production costs.

Consolidated direct operating expenses increased $3.8 million during the six months ended June 30, 2023 compared to the same period of 2022.

The increase in direct operating expenses was primarily driven by higher variable content costs resulting from an increase in digital revenue, including profit sharing expenses, third-party digital costs, and production costs.

The increase was partially offset by lower performance royalty fees.

Consolidated direct operating expenses increased $8.3 million during the three months ended September 30, 2023 compared to the same period of 2022.

The increase in direct operating expenses was primarily driven by higher music license fees, and higher variable content costs resulting from an increase in digital revenue, including third-party digital costs and profit sharing costs.

The increase was partially offset by lower employee compensation as a result of cost savings initiatives.

Consolidated direct operating expenses increased $12.1 million during the nine months ended September 30, 2023 compared to the same period of 2022.

The increase in direct operating expenses was primarily driven by higher music license fees and higher variable content costs resulting from an increase in digital revenue, including profit sharing costs, third-party digital costs, and production costs.

The increase was partially offset by lower employee compensation as a result of cost savings initiatives and lower performance royalty fees.

Selling, General and Administrative (“SG&A”) Expenses

Consolidated SG&A expenses increased $14.7 million during the three months ended June 30, 2023 compared to the same period of 2022.

The increase in Consolidated SG&A expenses was driven primarily by higher variable bonus expense and higher bad debt expense, partially offset by lower sales commissions.

Consolidated SG&A expenses increased $33.2 million during the six months ended June 30, 2023 compared to the same period of 2022.

The increase in Consolidated SG&A expenses was driven primarily by higher variable bonus expense, share-based compensation, bad debt expense, as well as an increase in costs incurred in connection with executing on our cost reduction initiatives.

These increases were partially offset by lower sales commissions.

Consolidated SG&A expenses decreased $6.3 million during the three months ended September 30, 2023 compared to the same period of 2022.

The decrease in Consolidated SG&A expenses was driven primarily by a decrease in costs incurred in connection with executing on our cost reduction initiatives, partially offset by higher trade and barter expense, variable bonus expense, and bad debt expense.

Consolidated SG&A expenses increased $26.9 million during the nine months ended September 30, 2023 compared to the same period of 2022.

The increase in Consolidated SG&A expenses was driven primarily by higher variable bonus expense, trade and barter expense, and bad debt expense, as well as an increase in costs incurred in connection with live events.

These increases were partially offset by a decrease in costs incurred in connection with executing on our cost reduction initiatives and lower sales commissions.

Depreciation and Amortization

Depreciation and amortization decreased $2.7 million and $8.3 million during the three and six months ended June 30, 2023, respectively, compared to the same periods of 2022, primarily as a result of a lower fixed asset base due to properties sold in 2022 in connection with our real estate optimization initiatives, and lower amortization expense due to certain intangible assets being fully amortized.

Depreciation and amortization decreased $2.9 million and $11.1 million during the three and nine months ended September 30, 2023, respectively, compared to the same periods of 2022, primarily as a result of a lower fixed asset base due to properties sold in 2022 in connection with our real estate optimization initiatives, and lower amortization expense due to certain intangible assets being fully amortized.

Impairment Charges

We perform our annual impairment test on our goodwill and FCC licenses as of July 1 of each year.

No impairment was required for our goodwill and FCC licenses as part of the 2023 annual impairment test performed during the third quarter.

We recognized non-cash impairment charges of $302.1 million on our indefinite-lived FCC licenses as part of the 2022 annual impairment test performed during the third quarter of 2022 primarily as a result of an increase in the discount rate used in our fair value calculations due to higher market interest rates at that time compared to the prior year.

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

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

As a result, we performed an interim impairment test as of June 30, 2023 on our indefinite-lived FCC licenses and goodwill.

We recorded a non-cash impairment charge of $959.1 million in the second quarter of 2023 to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values.

This impairment charge resulted from the economic uncertainty due to inflation and higher interest rates that has had an adverse impact on our results, and has resulted in a significant decrease in the trading values of our debt and equity securities for a sustained period.

See Note 5, Property, Plant and Equipment, Intangible Assets and Goodwill , to the consolidated financial statements located in Item 1 of this Quarterly Report on Form 10-Q for a further description of the impairment charges.

In addition, as part of our operating expense-savings initiatives, we have taken strategic actions to streamline our real estate footprint and related expenses.

During the three and six months ended June 30, 2023, we recognized non-cash impairment charges of $1.5 million and $5.5 million, respectively, primarily related to changes in sublease assumptions for

certain operating leases previously determined to be subleased as part of strategic actions to streamline our real estate footprint.

During the three and six months ended June 30, 2022, we recognized non-cash impairment charges of $0.3 million and $1.6 million, respectively, due to the write-down of certain right-of-use assets and related fixed assets, including leasehold improvements.

See Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill , to the consolidated financial statements for a further description of the impairment charges.

In addition, as part of our cost savings initiatives, we have taken strategic actions to streamline our real estate footprint and related expenses.

During the three and nine months ended September 30, 2023, we recognized non-cash impairment charges of $0.6 million and $6.1 million, respectively, primarily related to changes in sublease assumptions for certain operating leases previously determined to be subleased as part of strategic actions to streamline our real estate footprint.

During the three and nine months ended September 30, 2022, we recognized non-cash impairment charges of $7.6 million and $9.2 million, respectively, due to the write-down of certain right-of-use assets and related fixed assets, including leasehold improvements.

Other Operating Expense, net

Other operating expense, net of $15.7 million and $16.5 million for the three and six months ended June 30, 2022, respectively, relates primarily to non-cash net book losses recognized on asset disposals in connection with our real estate optimization initiatives.

Other operating expense, net of $9.5 million and $26.0 million for the three and nine months ended September 30, 2022, respectively, relates primarily to non-cash losses on disposals of assets in connection with our real estate optimization initiatives.

Interest Expense

Interest expense increased $17.2 million and $33.5 million during the three and six months ended June 30, 2023 compared to the same periods of 2022, primarily as a result of the increase in LIBOR borrowing rates, partially offset by the lower outstanding aggregate principal of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 due to the repurchases of $349.6 million of the notes for $314.8 million in cash made during 2022 and the first quarter of 2023.

Loss on Investments, Net

During the three and six months ended June 30, 2023, we recogn ized a loss on in vestments, net of $6.0 million and $12.5 million, respectively, related to declines in the value of our investments.

During the three and six months ended June 30, 2022, we recognized a gain on investments, net of $9.6 million and $7.8 million, respectively, in connection with increases in the value of our investments.

Interest expense increased $11.6 million and $45.1 million during the three and nine months ended September 30, 2023 compared to the same periods of 2022, primarily as a result of the increase in floating borrowing rates, partially offset by the lower outstanding aggregate principal of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 due to the repurchases of $429.5 million of the notes for $371.8 million in cash made during 2022 and the first half of 2023.

Gain (Loss) on Investments, Net

During the three and nine months ended September 30, 2023, we recogn ized a loss on in vestments, net of $7.4 million and $19.9 million, respectively, related to declines in the value of our investments.

During the three and nine months ended September 30, 2022, we recognized a loss on investments, net of $3.5 million and a gain on investment, net of $4.4 million, respectively, in connection with changes in the value of our investments.

Gain on Extinguishment of Debt

During the three months ended June 30, 2023, we recognized a gain on extinguishment of debt of $22.9 million in connection with the open market repurchases of $79.9 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $57.0 million in cash.

During the six months ended June 30, 2023, we recognized a gain on extinguishment of debt of $27.5 million, in connection with the open market repurchases of $99.9 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $72.4 million in cash.

During the three and six months ended June 30, 2022, we recognized a gain on extinguishment of debt of $8.2 million in connection with the open market repurchases of $113.5 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $105.3 million in cash.

During the three months ended September 30, 2023, we recognized a gain on extinguishment of debt of $23.9 million in connection with the open market repurchases of $89.1 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $65.2 million in cash.

During the nine months ended September 30, 2023, we recognized a gain on extinguishment of debt of $51.5 million, in connection with the open market repurchases of $189.0 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $137.5 million in cash.

During the three months ended September 30, 2022, we recognized a gain on extinguishment of debt of $6.9 million in connection with the open market repurchases of $75.0 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $68.1 million in cash.

During the nine months ended September 30, 2022, we recognized a gain on extinguishment of debt of $15.1 million in connection with the open market repurchases of $188.5 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $173.4 million in cash.

Income Tax Benefit (Expense)

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

The effective tax rates for the Company 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 by 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.

Net Loss Attributable to the Company

Net loss attributable to the Company of $884.5 million during the three months ended June 30, 2023 reflected a decrease of $898.9 million compared to Net income attributable to the Company of $14.4 million during the three months ended June 30, 2022, primarily due to the non-cash impairment charges of $960.6 million to our goodwill and indefinite-lived intangible assets balances.

Net loss attributable to the Company of $1,106.7 million during the six months ended June 30, 2023 increased $1,072.5 million compared to Net loss attributable to the Company of $34.2 million during the six months ended June 30, 2022, primarily due to the non-cash impairment charges of $964.5 million to our goodwill and indefinite-lived intangible assets balances.

Net loss attributable to the Company of $9.1 million during the three months ended September 30, 2023 reflected a decrease of $301.3 million compared to Net loss attributable to the Company of $310.4 million during the three months ended September 30, 2022, primarily due to the non-cash impairment charge of $302.1 million in the third quarter of 2022, related to our indefinite-lived intangible asset balance.

Net loss attributable to the Company of $1,115.8 million during the nine months ended September 30, 2023 increased $771.2 million compared to Net loss attributable to the Company of $344.5 million during the nine months ended September 30, 2022, primarily due to the non-cash impairment charges of $965.1 million to our goodwill and indefinite-lived intangible assets balances.

Multiplatform Group Results

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2023 2022 Change 2023 2022 Change

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(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.

Revenue from our Multiplatform Group decreased $37.4 million compared to the prior year as a result of the challenging macroeconomic environment and a decline in political advertising.

Broadcast revenue declined $33.3 million, or 7.2%, year-over-year, driven by lower spot revenue and a decrease in political advertising.

Revenue from our Multiplatform Group decreased $33.5 million compared to the prior year as a result of the challenging macroeconomic environment and a decline in political advertising as 2022 was a mid-term election year, partially offset by an increase in trade and barter and live events revenues.

Broadcast revenue declined $29.7 million, or 6.1%, year-over-year, driven by lower spot revenue and a decrease in political advertising, partially offset by an increase in trade and barter revenues.

Networks declined $10.9 million, or 8.6%, year-over-year.

Revenue from Sponsorship and Events increased $6.9 million, or 16.3%, year-over-year.

Operating expenses decreased $5.3 million, driven primarily by cost savings initiatives and sales commissions, partially offset by higher bad debt expense.

Revenue from our Multiplatform Group decreased $79.5 million compared to the prior year as a result of the challenging macroeconomic environment and a decline in political advertising.

Broadcast revenue declined $65.4 million, or 7.5%, year-over-year, driven by lower spot revenue.

Operating expenses increased $11.3 million, driven primarily by an increase in trade and barter expenses and costs incurred in connection with live events, partially offset by lower sales commissions.

Revenue from our Multiplatform Group decreased $113.0 million compared to the prior year as a result of the challenging macroeconomic environment and a decline in political advertising, partially offset by an increase in revenue from live events.

Broadcast revenue declined $95.1 million, or 7.0%, year-over-year, driven by lower spot revenue and a decrease in political revenue, partially offset by an increase in trade and barter revenues.

Networks declined $25.8 million, or 6.9%, year-over-year.

Revenue from Sponsorship and Events decreased by $0.9 million, or 1.2%, year-over-year.

Operating expenses decreased $0.6 million, driven primarily decreased sales commissions, offset by higher bad debt expense and higher content and production costs.

Revenue from Sponsorship and Events increased by $6.1 million, or 5.3%, year-over-year.

Operating expenses increased $10.8 million, driven primarily by an increase in bad debt expense, higher trade and barter expenses, and costs incurred in connection with live events, partially offset by lower sales commissions.

Digital Audio Group Results

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2023 2022 Change 2023 2022 Change

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(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.

Revenue from our Digital Audio Group increased $8.3 million compared to the prior year, driven by Podcast revenue which increased by $11.0 million, or 12.8%, year-over-year, driven primarily by continued increased demand for podcasting from advertisers, partially offset by Digital, excluding Podcast revenue, which declined $2.7 million, or 1.6%, year-over-year, driven by a decrease in COVID-19 related advertisers.

Operating expenses increased $2.6 million due to higher variable costs, including third-party digital costs and sales commissions primarily resulting from higher revenue, partially offset by a decrease in performance royalty fees.

Revenue from our Digital Audio Group increased $17.5 million compared to the prior year, driven by Podcast revenue which increased by $19.3 million, or 12.5%, year-over-year, driven primarily by increased demand for podcasting from advertisers, partially offset by Digital, excluding Podcast revenue, which declined $1.8 million, or 0.6%, year-over-year, driven primarily by a decrease in COVID-19 related advertisers and digital subscriptions.

Operating expenses increased $10.2 million due to higher variable content and production costs primarily resulting from the development of new podcasts, higher third-party digital costs, and sales commissions primarily resulting from higher revenue, partially offset by a decrease in performance royalty fees.

Revenue from our Digital Audio Group increased $13.3 million compared to the prior year, driven by Podcast revenue which increased by $11.4 million, or 12.5%, year-over-year, driven primarily by continued increase in demand for podcasting from advertisers, and Digital, excluding Podcast revenue, which grew $1.9 million, or 1.1%, year-over-year, driven by an increase in demand for digital advertising, partially offset by a decrease in COVID-19 related advertisers.

Operating expenses decreased $2.1 million primarily driven by lower third-party digital costs in connection with COVID-19 related advertisers, partially offset by higher sales commissions resulting from higher revenue.

Revenue from our Digital Audio Group increased $30.7 million compared to the prior year, driven by Podcast revenue which increased by $30.7 million, or 12.5%, year-over-year, driven primarily by increased demand for podcasting from advertisers.

Operating expenses increased $8.1 million due to higher variable content and production costs primarily resulting from the development of new podcasts, profit share costs and sales commissions primarily resulting from higher revenue, partially offset by a decrease in performance royalty fees and third-party digital costs in connection with COVID-19 related advertisers.

Audio & Media Services Group Results

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2023 2022 Change 2023 2022 Change

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(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.

Revenue from our Audio & Media Services Group decreased $5.3 million compared to the prior year period driven by a decrease in political revenue, partially offset by continued growth in digital revenues.

Operating expenses decreased $1.7 million primarily as a result of lower cost of sales due to lower revenues.

Revenue from our Audio & Media Services Group decreased $4.8 million compared to the prior year period driven by a decrease in political revenue, partially offset by continued growth in digital revenues.

Operating expenses decreased $0.2 million primarily as a result of lower cost of sales due to lower revenues, partially offset by a new purchase agreement with third-parties for specific inventory spots.

Revenue from our Audio & Media Services Group decreased $15.8 million compared to the prior year period primarily driven by a decrease in political revenue.

Operating expenses decreased $3.0 million primarily as a result of lower incentive bonus expense and sales commissions due to lower revenues.

Revenue from our Audio & Media Services Group decreased $20.6 million compared to the prior year period primarily driven by a decrease in political revenue.

Operating expenses decreased $3.2 million primarily as a result of lower cost of sales due to lower incentive bonus expense and sales commissions due to lower revenues.

Reconciliation of Operating income (loss) to Adjusted EBITDA

(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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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

Restructuring expenses 16,227 24,486 46,469 54,588

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$ 203,782 $ 252,242 $ 488,386 $ 634,645

Reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA

Reconciliation of Net loss to EBITDA and Adjusted EBITDA

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

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

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

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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

Restructuring expenses 16,227 24,486 46,469 54,588

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We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance.

This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management.

This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives

and other members of management.

We believe this measure is an important indicator of our operational strength and performance of our business because it provides a link between operational performance and operating income.

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We believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates.

In addition, we believe this measure is also among the primary

measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry.

In addition, we believe this measure is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry.

Since Adjusted EBITDA is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, operating income or net income (loss) as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies.

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Because it excludes certain financial information compared with operating income and compared with consolidated net income (loss), the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded.

Reconciliation of Cash provided by (used for) operating activities to Free Cash Flow

Reconciliation of Cash provided by operating activities to Free Cash Flow

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Cash provided by (used for) operating activities $ 56,772 $ 155,801 $ (37,211) $ 103,589

Cash provided by operating activities $ 96,169 $ 103,110 $ 58,958 $ 206,699

Purchases of property, plant and equipment (28,518) (40,357) (90,456) (112,567)

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

Share-based compensation expenses are recorded in SG&A expenses and were $9.2 million and $8.6 million for the three months ended June 30, 2023 and 2022, respectively, and $19.4 million and $14.1 million for the six months ended June 30, 2023 and 2022, respectively.

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.

Share-based compensation expenses are recorded in SG&A expenses and were $8.2 million and $10.4 million for the three months ended September 30, 2023 and 2022, respectively, and $27.6 million and $24.6 million for the nine months ended September 30, 2023 and 2022, respectively.

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 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 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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The following discussion highlights cash flow activities during the periods presented:

(In thousands) Six Months Ended

(In thousands) Nine Months Ended

September 30,

Cash provided by (used for):

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(31,498) 94,132

(1) For a definition of Free Cash Flow and a reconciliation to Cash used for operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash used for operating activities to Free Cash Flow” in this MD&A.

(1) For a definition of Free Cash Flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free Cash Flow” in this MD&A.

Operating Activities

Cash used for operating activities was $37.2 million during the six months ended June 30, 2023 compared to cash provided by operating activities of $103.6 million during the six months ended June 30, 2022.

Cash provided by operating activities was $59.0 million during the nine months ended September 30, 2023 compared to cash provided by operating activities of $206.7 million during the nine months ended September 30, 2022.

The decrease was primarily due to a decrease in broadcast radio revenue due to a more challenging macroeconomic environment, higher interest expense due to an increase in borrowing rates, and timing of payments.

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Investing Activities

Cash used for investing activities of $59.3 million during the six months ended June 30, 2023 primarily reflects $61.9 million in cash used for capital expenditures.

We spent $41.3 million for capital expenditures in our Multiplatform Group segment primarily related to our real estate optimization initiatives, $11.3 million in our Digital Audio Group segment primarily related to IT infrastructure, $4.8 million in our Audio & Media Services Group segment, primarily related to software, and $4.6 million in Corporate primarily related to equipment and software purchases.

Cash used for investing activities in the six months ended June 30, 2023 includes $12.7 million of cash paid in the current period related to assets acquired in the fourth quarter of 2022.

Cash used for investing activities of $49.7 million during the six months ended June 30, 2022 primarily reflects $72.2 million in cash used for capital expenditures.

Cash used for investing activities of $40.0 million during the nine months ended September 30, 2023 primarily reflects $90.4 million in cash used for capital expenditures, partially offset by proceeds from the disposal of assets of $54.1 million.

For capital expenditures, we spent $52.1 million for capital expenditures in our Multiplatform Group segment primarily related to our real estate optimization initiatives, $17.3 million in our Digital Audio Group segment primarily related to IT infrastructure, $6.3 million in our Audio & Media Services Group segment, primarily related to software, and $14.7 million in Corporate primarily related to equipment and software purchases.

The proceeds from the disposal of assets mainly consists of $45.3 million related to the sale of broadcast tower sites and related assets.

We are leasing back space on the broadcast towers and related assets under long-term operating leases.

Refer to Note 3, Leases and Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill for more information.

Cash used for investing activities in the nine months ended September 30, 2023 includes $12.7 million of cash paid related to assets acquired in the fourth quarter of 2022.

Cash used for investing activities of $82.8 million during the nine months ended September 30, 2022 primarily reflects $112.6 million in cash used for capital expenditures.

We spent $80.3 million for capital expenditures in our Multiplatform Group segment primarily related to our real estate optimization initiatives, $15.9 million in our Digital Audio Group segment primarily related to IT infrastructure, $5.4 million in our Audio & Media Services Group segment, primarily related to software, and $11.0 million in Corporate primarily related to equipment and software purchases.

Cash used for investing activities was partially offset by proceeds from the sale of certain properties related to our real estate optimization initiatives.

Cash used for investing activities was partially offset by $34.7 million of proceeds from the sale of certain properties related to our real estate optimization initiatives.

Financing Activities

Cash used for financing activities totaled $74.9 million during the six months ended June 30, 2023 primarily due to the repurchases of $99.9 million aggregate principal amount of our 8.375% Senior Unsecured Notes due 2027 for $72.4 million in cash, reflecting a discounted purchase price from the face value of the notes.

Cash used for financing activities totaled $110.7 million during the six months ended June 30, 2022 primarily due to the open market repurchases of $113.5 million aggregate principal amount of our 8.375% Senior Unsecured Notes due 2027 for $105.3 million in cash, reflecting a discounted purchase price from the face value of the notes.

Cash used for financing activities totaled $142.0 million during the nine months ended September 30, 2023 primarily due to the open market repurchases of $189.0 million aggregate principal amount of our 8.375% Senior Unsecured Notes due 2027 for $137.5 million in cash, reflecting a discounted purchase price from the face value of the notes.

Cash used for financing activities totaled $179.7 million during the nine months ended September 30, 2022 primarily due to the open market repurchases of $188.5 million aggregate principal amount of our 8.375% Senior Unsecured Notes due 2027 for $173.4 million in cash, reflecting a discounted purchase price from the face value of the notes.

Sources of Liquidity and Anticipated Cash Requirements

Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $165.3 million as of June 30, 2023, cash flows from operations and borrowing capacity under our $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility").

As of June 30, 2023, iHeartCommunications had no amounts outstanding under the ABL Facility, a borrowing base of $444.5 million and $24.9 million in outstanding letters of credit, resulting in $419.6 million of borrowing base availability.

Together with our cash balance of $165.3 million as of June 30, 2023 and our borrowing capacity under the ABL Facility, our total available liquidity 1 was approximately $585 million.

Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $213.5 million as of September 30, 2023, cash flows from operations and borrowing capacity under our $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility").

As of September 30, 2023, iHeartCommunications had no amounts outstanding under the ABL Facility, a borrowing base of $436.7 million and $24.9 million in outstanding letters of credit, resulting in $411.8 million of borrowing base availability.

Our total available liquidity 1 as of September 30, 2023 was approximately $625 million.

In September 2023, we sold 122 of our broadcast tower sites and related assets for net proceeds of $45.3 million.

We simultaneously leased back space on 121 of the broadcast towers and related assets under long-term operating leases.

We intend to use the proceeds from this transaction to fund working capital needs and general corporate purposes.

We regularly evaluate the impact of economic conditions on our business.

A challenging macroeconomic environment has led to market uncertainty which has impacted 2023 revenues.

For the six months ended June 30, 2023, our revenues decreased compared to the six months ended June 30, 2022 primarily due to the decrease in broadcast radio revenue driven by market uncertainty from the challenging macroeconomic environment, among other factors discussed in the Results of Operations section of the MD&A.

A challenging macroeconomic environment has led to market uncertainty which has impacted 2023 revenues and cash flows.

For the nine months ended September 30, 2023, our revenues decreased compared to the nine months ended September 30, 2022 primarily due to the decrease in broadcast radio revenue driven by market uncertainty from the challenging macroeconomic environment, among other factors discussed in the Results of Operations section of the MD&A.

Although we cannot predict future economic conditions or the impact of any potential contraction of economic growth on our business, we believe that we have sufficient liquidity to continue to fund our operations for at least the next twelve months.

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These obligations impact our short-term and long-term liquidity and capital resource needs.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of June 30, 2023, while others are considered future commitments.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of September 30, 2023, while others are considered future commitments.

Our contractual obligations primarily consist of long-term debt and related interest payments, commitments under non-cancelable operating lease agreements, and employment and talent contracts.

In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2023 will be to fund our working capital, make interest and tax payments, fund capital expenditures, pursue certain strategic opportunities, and maintain operations.

In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2023 will be to fund our working capital, make interest and tax payments, fund capital expenditures, make voluntary debt repayments and pursue other strategic opportunities, and maintain operations.

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").

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%.

Assuming the current level of borrowings and interest rates in effect at June 30, 2023, we anticipate that we will have approximately $197.0 million of cash interest payments in the remainder of 2023 compared to $182.4 million of cash interest payments during the same period in 2022, primarily related to the increase in interest rates, including SOFR.

Assuming the current level of borrowings and interest rates in effect at September 30, 2023, we anticipate that we will have approximately $89.3 million of cash interest payments in the remainder of 2023 compared to $92.5 million of cash interest payments during the same period in 2022, primarily related to the increase in floating interest rates, partially offset by a lower outstanding debt balance due to the note repurchases in 2022 and 2023.

Future increases in interest rates could have a significant impact on our cash interest payments.

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We frequently evaluate strategic opportunities.

During the six months ended June 30, 2023, we repurchased $99.9 million in aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $72.4 million in cash, reflecting a discounted purchase price from the face value of the notes.

During the nine months ended September 30, 2023, we repurchased $189.0 million in aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $137.5 million in cash, reflecting a discounted purchase price from the face value of the notes.

We expect from time to time to pursue other strategic opportunities such as acquisitions or disposals of certain businesses, which may or may not be material.

1 Total available liquidity is defined as cash and cash equivalents plus available borrowings under the ABL Facility.

We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.

Tax Matters Agreement

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as part of our plan of reorganization, we entered into the Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., Clear Channel Holdings, Inc., and Clear Channel Outdoor Holding, Inc.

(the "Outdoor Group"), to allocate the

1 Total available liquidity is defined as cash and cash equivalents plus available borrowings under the ABL Facility.

We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.

responsibility of iHeartMedia and its subsidiaries, on the one hand, and the Outdoor Group and its subsidiaries, on the other, for the payment of taxes arising prior and subsequent to, and in connection with, the Separation.

(the "Outdoor Group"), to allocate the responsibility of iHeartMedia and its subsidiaries, on the one hand, and the Outdoor Group and its subsidiaries, on the other, for the payment of taxes arising prior and subsequent to, and in connection with, the Separation.

The Tax Matters Agreement requires that iHeartMedia and iHeartCommunications indemnify the Outdoor Group and its subsidiaries, their respective directors, officers and employees, and hold them harmless, on an after-tax basis, from and against certain tax claims related to the Separation.

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Summary Debt Capital Structure

As of June 30, 2023 and December 31, 2022, we had the following debt outstanding, net of cash and cash equivalents:

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

As of September 30, 2023 and December 31, 2022, we had the following debt outstanding, net of cash and cash equivalents:

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

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

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$ 5,015,227 $ 5,077,931

1 During the three and six months ended June 30, 2023, we repurchased $79.9 million and $99.9 million, respectively, of aggregate principal amount of iHeartCommunications, Inc.’s 8.375% Senior Unsecured Notes due 2027 for $57.0 million and $72.4 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 for the three and six months ended June 30, 2023 of $22.9 million and $27.5 million, respectively.

1 During the three and nine months ended September 30, 2023, we repurchased $89.1 million and $189.0 million, respectively, of aggregate principal amount of iHeartCommunications, Inc.’s 8.375% Senior Unsecured Notes due 2027 for $65.2 million and $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 for the three and nine months ended September 30, 2023 of $23.9 million and $51.5 million, respectively.

2 Net Debt is a non-GAAP financial metric that is used by management and investors to assess our ability to meet financial obligations.

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Our ABL Facility contains a springing fixed charge coverage ratio that is effective if certain triggering events related to borrowing capacity under the ABL Facility occur.

As of June 30, 2023, no triggering event had occurred and, as a result, we were not required to comply with any fixed charge coverage ratio as of or for the period ended June 30, 2023.

As of September 30, 2023, no triggering event had occurred and, as a result, we were not required to comply with any fixed charge coverage ratio as of or for the period ended September 30, 2023.

Other than our ABL Facility, none of our long-term debt includes maintenance covenants that could trigger early repayment.

As of June 30, 2023, we were in compliance with all covenants related to our debt agreements in all material respects.

As of September 30, 2023, we were in compliance with all covenants related to our debt agreements in all material respects.

For additional information regarding our debt, refer to Note 5, Long-Term Debt .

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We or our subsidiaries may also sell certain assets, securities, or properties.

These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations.

purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations.

These transactions could also require or result in amendments to the agreements governing outstanding debt obligations or changes in our leverage or other financial ratios, which could have a material positive or negative impact on our ability to comply with the covenants contained in iHeartCommunications’ debt agreements.

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Pursuant to iHeartCommunications' material debt agreements, iHeartMedia Capital I, LLC ("Capital I"), the parent guarantor and a subsidiary of iHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of the material differences between iHeartMedia’s consolidated financial information, on the one hand, and the financial information of Capital I and its consolidated restricted subsidiaries, on the other hand.

Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the three and six months ended June 30, 2023, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period.

Further, as of June 30, 2023, we were in compliance with all covenants related to our debt agreements.

Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the three and nine months ended September 30, 2023, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period.

Further, as of September 30, 2023, we were in compliance with all covenants related to our debt agreements.

Commitments, Contingencies and Guarantees

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Accordingly, our earnings will be affected by changes in interest rates.

As of June 30, 2023, approximately 42% of our aggregate principal amount of long-term debt bore interest at floating rates.

Assuming the current level of borrowings and assuming a 100 bps change in floating interest rates, it is estimated that our interest expense for the six months ended June 30, 2023 would have changed by $11.4 million.

As of September 30, 2023, approximately 43% of our aggregate principal amount of long-term debt bore interest at floating rates.

Assuming the current level of borrowings and assuming a 100 bps change in floating interest rates, it is estimated that our interest expense for the nine months ended September 30, 2023 would have changed by $17.2 million.

In the event of an adverse change in interest rates, management may take actions to mitigate our exposure.

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

As a result, we performed an impairment test as of June 30, 2023 on our long-lived assets, intangible assets, indefinite-lived FCC licenses and goodwill.

As a result, we performed an interim impairment test as of June 30, 2023 on our long-lived assets, intangible assets, indefinite-lived FCC licenses and goodwill.

Indefinite-lived Intangible Assets

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• Assumed discount rates of 10.0% for all markets.

There were no significant changes to assumptions used for the 2023 annual impairment test.

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

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible a material change could occur.

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• In order to risk adjust the cash flow projections in determining fair value, we utilized discounts rates between 15% and 18% for each of our reporting units.

There were no significant changes to assumptions used for the 2023 annual impairment test.

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

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units, it is possible a material change could occur.

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The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf.

This report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, financial position and results of operations, macroeconomic trends including inflation, interest rates and potential recessionary indicators, our expected costs, savings and timing of our modernization initiatives and other capital and operating expense reduction initiatives, debt repurchases, our business plans, strategies and initiatives, benefits of acquisitions, our expectations about certain markets and businesses, expected cash interest payments, future impairment charges and our anticipated financial performance and liquidity.

This report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, financial position and results of operations, macroeconomic trends including inflation, interest rates and potential recessionary indicators, our expected costs, savings and timing of our modernization initiatives and other capital and operating expense reduction initiatives, debt repurchases, our business plans, strategies and initiatives, benefits of acquisitions and dispositions, our expectations about certain markets and businesses, expected cash interest payments, future impairment charges and our anticipated financial performance and liquidity.

Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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A wide range of factors could materially affect future developments and performance, including but not limited to:

• risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures for advertising;

• risks associated with weak or uncertain global economic and geopolitical conditions and their impact on the level of expenditures for advertising;

• risks related to the COVID-19 pandemic or other future pandemics;

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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 2. Management’s Discussion and Analysis