What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-02-28 · 272 added, 352 removed, 1044 unchanged (37% of the section changed)

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We have audited the accompanying consolidated balance sheets of iHeartMedia, Inc.

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of comprehensive loss, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive loss, changes in stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2023, the related notes and the financial statement schedules listed in the Index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

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Description of the Matter

As described in Note 4 to the consolidated financial statements, at December 31, 2022 the Company’s goodwill was $2.3 billion and FCC licenses with indefinite lives were $1.5 billion.

Management conducts impairment tests for goodwill and indefinite-lived intangibles annually during the third quarter, or more frequently, if events or circumstances indicate the carrying value of goodwill or indefinite-lived intangibles may be impaired.

The Company performed their annual impairment test as of July 1, 2022 on goodwill and indefinite-lived intangible assets which resulted in no impairment charges being recorded to goodwill, and an impairment charge of $302.1 million being recorded to FCC Licenses with indefinite lives.

As described in Note 1 and Note 4 to the consolidated financial statements, at December 31, 2023 the Company’s goodwill was $1.7 billion and FCC licenses with indefinite lives were $1.1 billion.

Management conducts impairment tests for goodwill and indefinite-lived intangibles annually, or more frequently, if events or circumstances indicate the carrying value of goodwill or indefinite-lived intangibles may be impaired.

In the second quarter, the Company performed an interim impairment test which resulted in a goodwill impairment charge of $595.5 million related to the Multiplatform, Digital Audio, and RCS reporting units, and FCC license impairment charges of $363.6 million.

Auditing management’s impairment tests for goodwill and intangible assets with indefinite lives was complex and highly judgmental and required the involvement of a valuation specialist due to the significant estimation required to determine the fair value of the reporting units and FCC licenses.

In particular for goodwill, the fair value estimates in the discounted cash flow models of reporting units are sensitive to assumptions such as changes in projected revenue, earnings before interest, taxes, depreciation, and amortization ("EBITDA") margins, and discount rates.

For FCC Licenses, the fair value estimates in the discounted cash flow models are sensitive to changes to the discount rate assumption.

For goodwill and FCC licenses, the fair value estimates in the discounted cash flow models are sensitive to assumptions such as changes in projected revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and discount rates.

All of these assumptions are sensitive to and affected by expected future market or economic conditions.

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Commitments and contingent liabilities (Note 7)

STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY (DEFICIT)

Noncontrolling interest 9,397 9,609

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( 10,127 ) ( 8,934 )

Total Stockholders' Equity 684,506 915,765

Total Liabilities and Stockholders' Equity $ 8,335,887 $ 8,881,309

Total Stockholders' Equity (Deficit) ( 384,758 ) 684,506

Total Liabilities and Stockholders' Equity (Deficit) $ 6,952,611 $ 8,335,887

See Notes to Consolidated Financial Statements

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See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY OF

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) OF

IHEARTMEDIA, INC.

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Stock Additional

Capital Retained Earnings (Accumulated

Capital Accumulated

Deficit Accumulated

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Balances at December 31, 2020 64,726,864 6,886,925 74,835,899 $ 8,350 $ 72 $ 2,849,020 $ ( 1,803,620 ) $ 194 $ ( 3,199 ) $ 1,050,817

Net loss ( 523 ) — — ( 1,914,699 ) — — ( 1,915,222 )

Net income (loss) 810 — — ( 159,199 ) — — ( 158,389 )

Vesting of restricted stock and other 1,075,889 — — 4,078 — — ( 3,083 ) 995

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Other 2,982 ( 750 ) — — — — — ( 750 )

Other comprehensive income — — — — 945 — 945

Other comprehensive loss — — — — ( 451 ) — ( 451 )

Balances at December 31, 2021

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

Net loss 810 — — ( 159,199 ) — — ( 158,389 )

Net income (loss) 1,993 — — ( 264,663 ) — — ( 262,670 )

Vesting of restricted stock and other 1,430,359 — 2 472 — — ( 2,652 ) ( 2,178 )

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122,370,425 21,477,181 5,111,312 $ 9,609 $ 144 $ 2,912,500 $ ( 2,227,482 ) $ ( 1,331 ) $ ( 8,934 ) $ 684,506

Net loss 1,993 — — ( 264,663 ) — — ( 262,670 )

Net income (loss) 2,321 — — ( 1,102,660 ) — — ( 1,100,339 )

Vesting of restricted stock and other 1,789,603 — 2 ( 2 ) — — ( 1,193 ) ( 1,193 )

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Other ( 2,533 ) — — — — — ( 2,533 )

Other comprehensive loss — — — — ( 1,074 ) — ( 1,074 )

Other comprehensive income — — — — 203 — 203

Balances at December 31, 2023

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

(Increase) decrease in accounts receivable ( 20,867 ) ( 205,200 ) 77,335

Increase in accounts receivable ( 31,091 ) ( 20,867 ) ( 205,200 )

(Increase) decrease in prepaid expenses and other current assets ( 26,485 ) ( 13,362 ) 4,746

Increase in other long-term assets ( 4,776 ) ( 5,505 ) ( 1,119 )

(Increase) decrease in other long-term assets 7,269 ( 4,776 ) ( 5,505 )

Increase in accounts payable and accrued expenses 28,217 22,671 153,938

Decrease in accrued interest ( 2,177 ) ( 3,818 ) ( 72 )

Increase (decrease) in deferred income 2,707 8,229 ( 21,859 )

Increase in deferred revenue 18,495 2,707 8,229

Increase in other long-term liabilities 55,108 7,340 2,382

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Cash flows from financing activities:

Proceeds from long-term debt and credit facilities — — 779,750

Payments on long-term debt and credit facilities ( 148,433 ) ( 300,135 ) ( 352,383 )

Change in other, net ( 3,725 ) ( 5,973 ) 259

Net cash provided by (used for) financing activities ( 306,108 ) ( 352,124 ) 241,180

Net cash used for financing activities ( 152,158 ) ( 306,108 ) ( 352,124 )

Effect of exchange rate changes on cash 151 ( 634 ) ( 292 )

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Cash paid during the year for interest $ 392,687 $ 342,393 $ 328,101

Cash paid during the year for taxes 35,417 11,130 5,844

Cash paid during the year for income taxes 14,006 35,417 11,130

See Notes to Consolidated Financial Statements

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• the Digital Audio Group, which includes all of the Company's Digital businesses, including Podcasting;

• the Audio & Media Services Group, which includes Katz Media Group (“Katz Media”), a full-service media representation business, and RCS Sound Software ("RCS"), a provider of scheduling and broadcast software and services.

• the Audio & Media Services Group, which includes Katz Media, a full-service media representation business, and RCS, a provider of scheduling and broadcast software and services.

These reporting segments reflect how senior management operates the Company.

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Economic Conditions

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

The recovery from COVID-19 positively impacted the Company's revenues in the first half of 2022.

However, increasing interest rates and historically high inflation have contributed to a more challenging macroeconomic environment.

This challenging environment has led to market uncertainty which impacted the Company's 2022 revenue growth, particularly in the second half of 2022.

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

The Company's advertising revenue, cash flows, and cost of capital are impacted by changes in economic conditions.

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

This challenging environment has led to broader market uncertainty which has impacted the Company's revenues and cash flows.

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.

The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

The provisions of the CARES Act resulted in an increase to allowable interest deductions of $ 179.4 million during 2020.

In addition, the Company was able to defer the payment of $ 29.3 million in certain employment taxes during 2020, half of which was due and paid on January 3, 2022 and the other half was due and paid on January 3, 2023.

The Company was able to defer the payment of $ 29.3 million in certain employment taxes during 2020, half of which was due and paid on January 3, 2022 and the other half was due and paid on January 3, 2023.

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 2022.

As of December 31, 2022, the Company had $ 336.2 million in cash and cash equivalents.

While the effects of COVID-19 may continue to negatively impact the results of operations, cash flows and financial position of the Company, the related financial

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

impact is not expected to be material.

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

This challenging economic environment has led to broader market uncertainty, has delayed our expected recovery, and 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 as a result of the 2023 annual impairment testing.

As of December 31, 2023, the Company had $ 346.4 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 facility size of $ 450.0 million, no outstanding borrowings and $ 24.3 million of outstanding letters of credit, resulting in $ 425.7 million of borrowing base availability.

The Company's total available liquidity as of December 31, 2023 was approximately $ 772.1 million.

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

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The Company believes its concentration of credit risk is limited due to the large number of its customers.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

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Furniture and other equipment – 5 to 7 years

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leasehold improvements – shorter of economic life or lease term assuming renewal periods, if appropriate

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Amounts related to insurance and property taxes in lease arrangements when billed on a pass-through basis are allocated to the lease and non-lease components of the lease based on their relative standalone selling prices.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain of the Company's leases provide options to extend the terms of the agreements.

The Company considers renewal periods in determining its lease terms if at inception of the lease there is reasonable assurance the lease will be renewed.

Generally, renewal periods are excluded from minimum lease payments when calculating the lease liabilities as, for most leases, the Company does not consider exercise of such options to be reasonably certain.

As a result, unless a renewal option is considered reasonably assured, the optional terms and related payments are not included within the lease liability.

As a result, unless a renewal option is considered reasonably certain, the optional terms and related payments are not included within the lease liability.

For those leases for which renewal periods are included in calculating minimum lease liabilities, any adjustments resulting from changes in circumstances which result in the renewal options no longer being reasonably certain are accounted for as changes in estimates.

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company's lease agreements do not contain any residual value guarantees or restrictive covenants.

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

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If it is determined that subleasing the property for the remaining lease term is not reasonable (e.g.

the remaining lease term is too short

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to reasonably expect the property to be subleased), amortization of the net book value of the ROU asset is accelerated and recognized as expense ratably from the decision date to the date the Company ceases use of the property.

Intangible Assets

the remaining lease term is too short to reasonably expect the property to be subleased), amortization of the net book value of the ROU asset is accelerated and recognized as expense ratably from the decision date to the date the Company ceases use of the property.

Indefinite-lived Intangible Assets

The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses in its Multiplatform Group segment.

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The Company tests for possible impairment of indefinite-lived intangible assets whenever events or changes in circumstances, such as a significant reduction in operating cash flow or a dramatic change in the manner for which the asset is intended to be used indicate that the carrying amount of the asset may not be recoverable.

The Company normally performs its annual impairment test for its FCC licenses using a direct valuation technique as prescribed in ASC 805-20-S99.

The Company performs its annual impairment test for its FCC licenses using a direct valuation technique as prescribed in ASC 805-20-S99.

The Company engages a third-party valuation firm to assist the Company in the development of these assumptions and the Company’s determination of the fair value of its FCC licenses.

The Company performs its annual impairment test on its FCC licenses on July 1 of each year.

However, as a result of uncertainty related to COVID-19 and its negative impact on the Company's business and the public trading values of its debt and equity, the Company performed an interim impairment test on its indefinite-lived intangible assets as of March 31, 2020.

For a complete discussion of our annual impairment tests as well as the interim test performed, see Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

The Company performs its annual impairment test on its FCC licenses on July 1 of each year, and performs interim impairment tests whenever events and circumstances indicate that the FCC licenses might be impaired.

The impairment tests for indefinite-lived intangible assets consist of a comparison between the fair value of the indefinite-lived intangible asset at the market level with its carrying amount.

If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to that excess.

After an impairment loss is recognized, the adjusted carrying amount of the indefinite-lived asset is its new accounting basis.

The fair value of the indefinite-lived asset is determined using the direct valuation method as prescribed in ASC 805-20-S99.

Under the direct valuation method, the fair value of the indefinite-lived assets is calculated at the market level as prescribed by ASC 350-30-35.

The Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its indefinite-lived intangible assets.

The application of the direct valuation method attempts to isolate the income that is attributable to the indefinite-lived intangible asset alone (that is, apart from tangible and identified intangible assets and goodwill).

It is based upon modeling a hypothetical “greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process.

The Company forecasts revenue, expenses, and cash flows over a ten-year period for each of its markets in its application of the direct valuation method.

The Company also calculates a “normalized” residual year which represents the perpetual cash flows of each market.

The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch.

Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value.

Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets.

The Company's key assumptions using the direct valuation method are 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 recent broadcast radio industry revenue projections which it considered along with various other sources of data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses.

Other Intangible Assets

Other intangible assets include definite-lived intangible assets.

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These assets are recorded at amortized cost.

The Company tests for possible impairment of other intangible assets whenever events and circumstances indicate that they might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.

In accordance with ASC 360, we assess the recoverability of definite-lived intangible assets whenever events and circumstances indicate that they might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.

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

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The Company identified its reporting units in accordance with ASC 350-20-55.

The Company's annual impairment test includes a full quantitative assessment, which involves the preparation of a fair value estimate for each reporting unit based on the most recent projected financial results, market and industry factors, including comparison to peer companies and the application of the Company's current estimated WACC.

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 reporting unit 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 are also estimated and discounted to their present value.

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

The Company performs its annual impairment test on its goodwill on July 1 of each year.

The Company performed another interim impairment test on goodwill as of January 1, 2021 as a result of the changes in the Company's management structure and its reportable segments effective at the beginning of 2021.

For a complete discussion of our annual impairment tests as well as the interim tests performed, see Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

For a complete discussion of our annual impairment tests and interim tests performed, see Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

Other Investments

We apply Accounting Standards Update ("ASU") 2016-01 Financial Instruments - Overall:

Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), which requires us to measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in earnings.

We apply ASC 321, Investments - Equity Securities , which requires us to measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in earnings.

For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Investments in notes receivable are evaluated for credit losses in accordance with ASC 326, Financial Instruments-Credit Losses , on a quarterly basis or when indicators of credit loss exist.

IHEARTMEDIA, INC.

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Investments in notes receivable are evaluated for credit losses in accordance with ASC 326, Financial Instruments-Credit Losses , on a quarterly basis or when indicators of credit loss exist.

Financial Instruments

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The Company recognizes revenue in amounts that reflect the consideration it expects to receive in exchange for transferring goods or services to customers, excluding sales taxes and other similar taxes collected on behalf of governmental authorities (the "transaction price”).

When this consideration includes a variable amount, the Company estimates the amount of consideration it expects to receive and only recognizes revenue to the extent that it is probable it will not be reversed in a future

Because the transfer of promised goods and services to the customer is generally within a year of scheduled payment from the customer, the Company is not typically required to consider the effects of the time value of money when determining the transaction price.

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reporting period.

In order to appropriately identify the unit of accounting for revenue recognition, the Company determines which promised goods and services in a contract with a customer are distinct and are therefore separate performance obligations.

If a promised good or service does not meet the criteria to be considered distinct, it is combined with other promised goods or services until a distinct bundle of goods or services exists.

Certain of the Company’s contracts with customers include options for the customer to acquire additional goods or services for free or at a discount, and management judgment is required to determine whether these options are material rights that are separate performance obligations.

For revenue arrangements that contain multiple distinct goods or services, the Company allocates the transaction price to these performance obligations in proportion to their relative standalone selling prices or the best estimate of their fair values.

The Company has concluded that the contractual prices for the promised goods and services in its standard contracts generally approximate management’s best estimate of standalone selling price as the rates reflect various factors such as the size and characteristics of the target audience, market location and size, and recent market selling prices.

However, where the Company provides customers with free or discounted services as part of contract negotiations, management uses judgment to determine how much of the transaction price to allocate to these performance obligations.

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The Company records advertising expense as it is incurred.

Advertising expenses were $ 166.1 million, $ 166.1 million, and $ 167.2 million for the years ended December 31, 2022 and 2021, and 2020, respectively, which include $ 138.3 million, 130.1 million, and $ 133.0 million in barter advertising, respectively.

Advertising expenses were $ 233.9 million, $ 166.1 million, and $ 166.1 million for the years ended December 31, 2023, 2022, and 2021, respectively, which include $ 210.2 million, $ 138.3 million, and $ 130.1 million in barter advertising, respectively.

Share-Based Compensation

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

New Accounting Pronouncements Recently Adopted

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of the Interbank Offered Rate Transition on Financial Reporting to provide optional relief from applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform.

In addition, in January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848) – Scope, to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848, to defer the sunset date of the temporary relief in Topic 848 to December 31, 2024.

The guidance is effective upon issuance.

The adoption of the standard did not have a material impact on the Company's financial position, results of operations, or cash flows.

New Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification 606.

The amendments of ASU 2021-08 are effective for interim and annual periods beginning after December 15, 2022.

The Company does not expect the adoption of this standard to have a material impact on its financial position, results of operations, or cash flows.

Restricted Cash

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Total cash, cash equivalents and restricted cash in the Statement of Cash Flows $ 346,382 $ 336,661

Subsequent Events

On February 8, 2024, the sale of Broadcast Music, Inc.

("BMI") to a shareholder group led by New Mountain Capital, LLC, was completed.

Based on the Company's equity interest in BMI, the sale resulted in cash proceeds of $ 101.4 million.

The Company plans to use the proceeds for general corporate purposes, which may include the repayment of debt.

New Accounting Pronouncements Recently Adopted

In October 2021, the FASB issued ASU No.

The Company adopted this guidance during the first quarter of 2023.

The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

New Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued Update 2023-07—Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which requires disclosure of the title and position of the Chief Operating Decision Maker ("CODM"), an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and disclosure of significant expenses regularly provided to the CODM that are included within the reported measure of segment profit or loss .

The amendments of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted, and should be applied retrospectively to all periods presented.

We are currently evaluating the impact of this standard, including timing of adoption.

In December 2023, the FASB issued Update 2023-09—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the disclosure requirements for income tax rate reconciliation, domestic and foreign income taxes paid, and unrecognized tax benefits.

The amendments of ASU 2023-09 are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted, and should be applied prospectively.

We are currently evaluating the impact of this standard, including timing of adoption.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – REVENUE

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Disaggregation of Revenue

The following table shows revenue streams for the Company for the years ended December 31, 2022, 2021, and 2020:

The following table shows revenue streams for the Company:

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

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Trade and barter transactions represent the exchange of advertising spots for merchandise, services, other advertising or other assets in the ordinary course of business.

The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots promised to the customer.

Trade and barter revenues and expenses, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows:

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Trade and barter expenses 234,984 188,161 149,846

The Company recognized barter revenue of $ 40.7 million, $ 16.3 million and $ 10.5 million for the year ended December 31, 2022, 2021, and 2020, 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 barter revenue of $ 33.3 million, $ 40.7 million, and $ 16.3 million for the years ended December 31, 2023, 2022, and 2021, respectively, in connection with investments made in companies in exchange for advertising services.

Deferred Revenue

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(In thousands)

Thereafter 1,259

Total minimum future rentals $ 481

NOTE 3 – LEASES

In September 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 following tables provide the components of lease expense included within the consolidated statement of comprehensive loss for the years ended December 31, 2023, 2022, and 2021:

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6,058 8,683 44,311

(1) In addition to non-cash impairment of ROU assets, the Company recorded an additional $ 0.7 million and $ 13.4 million of non-cash impairments related to leasehold improvements in 2022 and 2021, respectfully.

The amounts related to leasehold improvements were immaterial for 2020.

(1) In addition to non-cash impairment of ROU assets, the Company recorded an additional $ 0.7 million, and $ 13.4 million of non-cash impairments related to leasehold improvements in 2022 and 2021, respectively.

In 2023 there were no non-cash impairment charges related to leasehold improvements.

The following table provides the weighted average remaining lease term and the weighted average discount rate for the Company's leases as of December 31, 2023:

Year Ended December 31,

(In thousands) 2023 2022

Operating lease weighted average remaining lease term (in years) 12.8 13.3

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Total operating lease liability $ 836,653

The following table provides supplemental cash flow information related to leases for the years ended December 31, 2022, 2021, and 2020:

The following table provides supplemental cash flow information related to leases:

Year Ended December 31,

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The non-cash operating lease expense was $ 67.1 million, $ 87.2 million, and $ 114.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Property, Plant and Equipment

On March 31, 2021, the Company acquired Triton Digital, a global leader in digital audio and podcast technology and measurement services, from The E.W.

Scripps Company for $ 228.5 million in cash.

The assets acquired as part of this transaction consisted of $ 69.4 million in current and fixed assets, consisting primarily of accounts receivable and technology, and $ 191.3 million in intangible assets, consisting primarily of customer relationships, along with $ 168.0 million in goodwill (of which $ 6.9 million is tax-deductible).

The Company also assumed liabilities of $ 32.2 million, consisting primarily of accounts payable and deferred tax liabilities.

Property, Plant and Equipment

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

The Company’s property, plant and equipment consisted of the following classes of assets:

(In thousands) December 31,

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Property, plant and equipment, net $ 558,865 $ 694,842

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In September 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

The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses in its Multiplatform Group segment.

The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses in its Multiplatform Group segment and were $ 1.1 billion and $ 1.5 billion at December 31, 2023 and 2022, respectively.

FCC broadcast licenses are granted to radio stations for up to eight years under the Telecommunications Act of 1996 (the “Act”).

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The Company does not believe that the technology of wireless broadcasting will be replaced in the foreseeable future.

Annual Impairment Test on Indefinite-lived Intangible Assets

Indefinite-lived Intangible Assets Impairment

The Company performs its annual impairment test on indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year.

In addition, the Company tests for impairment of indefinite-lived intangible assets whenever events and circumstances indicate that such assets might be impaired.

The impairment tests for indefinite-lived intangible assets consist of a comparison between the fair value of the indefinite-lived intangible asset at the market level with its carrying amount.

If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to that excess.

After an impairment loss is recognized, the adjusted carrying amount of the indefinite-lived asset is its new accounting basis.

The fair value of the indefinite-lived asset is determined using the direct valuation method as prescribed in ASC 805-20-S99.

Under the direct valuation method, the fair value of the indefinite-lived assets is calculated at the market level as prescribed by ASC 350-30-35.

The Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its indefinite-lived intangible assets.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company forecasts revenue, expenses, and cash flows over a ten-year period for each of its markets in its application of the direct valuation method.

The Company also calculates a “normalized” residual year which represents the perpetual cash flows of each market.

The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market.

Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value.

Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets.

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

These factors negatively impacted the key assumptions used in the discounted cash flow models that we utilized to value our FCC licenses as of July 1, 2022, resulting in a significant decrease in the fair values of certain of our FCC licenses.

The key assumptions used in applying the direct valuation approach include market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, and estimated start-up capital costs.

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

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

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

As a result, in the third quarter of 2022 the Company recognized a non-cash impairment charge of $ 302.1 million on its FCC licenses.

While the Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its indefinite-lived FCC licenses, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding current economic conditions.

As discussed in Note 1, Basis of Presentation , 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.

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 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.

The Company recognized a non-cash impairment charge of $ 302.1 million on its FCC licenses as part of the 2022 annual impairment testing.

No impairment was required as part of the 2021 annual impairment testing.

As a result of the COVID-19 pandemic and the economic downturn starting in March 2020, the Company performed an interim impairment test as of March 31, 2020 on its indefinite-lived FCC licenses, resulting in a non-cash impairment charge of $ 502.7 million.

No further impairment was recognized as a result of the Company's annual impairment test on indefinite-lived intangible assets in 2020.

Since our emergence from Fresh Start in 2019, we have recorded $ 1.2 billion of cumulative impairment charges to our FCC licenses.

Other Intangible Assets

Other intangible assets consists of definite-lived intangible assets, which primarily include customer and advertiser relationships, talent and representation contracts, trademarks and tradenames and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time that the assets are expected to contribute directly or indirectly to the Company’s future cash flows.

The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets.

These assets are recorded at amortized cost.

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

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets:

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

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The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)

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

Balance as of January 1, 2021 (1)

Balance as of December 31, 2021 1

$ 1,462,038 $ 747,350 $ 104,193 $ 2,313,581

Acquisitions 1,267 168,031 — 169,298

Dispositions ( 16 ) — — ( 16 )

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Balance as of December 31, 2022

Dispositions ( 16 ) — — ( 16 )

$ 1,462,022 $ 747,350 $ 104,031 $ 2,313,403

Impairment ( 121,563 ) ( 439,383 ) ( 34,515 ) ( 595,461 )

Acquisitions — 3,375 — 3,375

Foreign currency — 84 82 166

Balance as of December 31, 2023

(1) Goodwill balance is presented net of accumulated impairment losses of $ 1.2 billion related to the Multiplatform Group segment.

No impairments were recorded in 2022 or 2021.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ 1,340,459 $ 311,426 $ 69,598 $ 1,721,483

1 Beginning goodwill balance is presented net of prior accumulated impairment losses of $ 1.2 billion related to the Multiplatform Group segment.

Refer to the table above for impairments recorded in 2023.

Goodwill Impairment

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

The Company performs its annual impairment test on our goodwill as of July 1 of each year.

The Company also tests goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired.

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.

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

As with the impairment testing performed on the Company's FCC licenses described above, the Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its reporting units as of July 1, 2022 as part of the annual impairment test.

The deterioration in market conditions and uncertainty in the markets impacted the assumptions used to estimate the discounted future cash flows of our reporting units for purposes of performing the annual goodwill impairment test.

Although the impairment testing resulted in a significant decrease in the fair values of our reporting units, no goodwill impairment was recorded for 2022 as the estimated fair values of our reporting units exceeded the carrying values of the reporting units’ net assets, including goodwill.

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our reporting units, it is possible a material change could occur to the estimated fair value of the reporting units as a result of the uncertainty regarding current economic conditions.

As a result of the changes in the Company's management structure and its reportable segments effective at the beginning of 2021, the Company performed an interim impairment test on goodwill as of January 1, 2021.

No impairment charges were recorded in the first quarter of 2021 in connection with the interim impairment test.

The carrying values of the Company’s reporting units were based on estimated fair values determined upon our Emergence, and the rapid deterioration in economic conditions resulting from the COVID-19 pandemic resulted in lower estimated fair values determined in connection with our interim goodwill impairment testing as of March 31, 2020.

The estimated fair value of one of the Company's reporting units was below its carrying value, including goodwill.

The macroeconomic factors discussed above had an adverse effect on the Company's estimated cash flows used in the discounted cash flow model.

As a result, the Company recognized a non-cash impairment charge of $ 1.2 billion in the first quarter of 2020 to reduce goodwill.

The impairment testing performed as of June 30, 2023 indicated that carrying values of the Company's Multiplatform, Digital, and RCS reporting units exceeded their fair values.

The fair value of our Katz reporting unit exceeded its carrying value.

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.

The interim impairment test resulted in a $ 595.5 million impairment of goodwill.

In determining the fair value of our reporting units, the Company considered industry and market factors including trading multiples of similar businesses and the trading prices of its debt and equity securities.

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.

No goodwill impairment was recorded for 2022 or 2021.

IHEARTMEDIA, INC.

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Purchases of investments 13,458 2,813 25,102 — 41,373

Equity in loss — ( 1,138 ) — — ( 1,138 )

Equity in loss of nonconsolidated affiliates — ( 11 ) — — ( 11 )

Disposals ( 239 ) — — ( 326 ) ( 565 )

Gain (loss) on investments ( 6,520 ) — 11,332 ( 6,433 ) ( 1,621 )

Other ( 4,363 ) — 5,070 — 707

Conversions and other ( 1,454 ) — ( 1,407 ) 2,981 120

Balance at December 31, 2022 $ 39,113 $ 13,419 $ 72,237 $ 452 $ 125,221

Purchases of investments 39,775 796 1,937 341 42,849

Equity in income — ( 11 ) — — ( 11 )

Equity in loss of nonconsolidated affiliates — ( 3,530 ) — — ( 3,530 )

Disposals — — — ( 3,864 ) ( 3,864 )

Gain (loss) on investments, net ( 6,520 ) — 11,332 ( 6,433 ) ( 1,621 )

Other ( 1,454 ) — ( 1,407 ) 2,981 120

Loss on investments, net ( 15,591 ) — ( 7,167 ) ( 5,372 ) ( 28,130 )

Conversions and other ( 15,474 ) — 7,146 10,000 1,672

Balance at December 31, 2023 $ 47,823 $ 10,685 $ 74,153 $ 1,557 $ 134,218

Equity method investments in the table above are not consolidated, but are accounted for under the equity method of accounting.

The Company records its investments in these entities on the balance sheet within “Other assets.” The Company's interests in the operations of equity method investments are recorded in the statement of comprehensive loss as “Equity in loss of nonconsolidated affiliates.” Other investments includes various investments in companies for which there is no readily determinable market value.

During 2022, the Company recorded $ 41.4 million for investments made in eleven companies in exchange for advertising services and cash.

One of these investments is being accounted for under the equity method of accounting, eight of these investments are being accounted for under the measurement alternative and five of these investments are notes receivable that are convertible into cash or equity.

During 2021, the Company recorded $ 17.5 million for investments made in seven companies in exchange for advertising services and cash.

One of these investments is being accounted for under the equity method of accounting, three of these investments are being accounted for under the measurement alternative and three of these investments are notes receivable that are convertible into cash or equity.

The Company recognized barter revenue of $ 40.7 million and $ 16.3 million in the year ended December 31, 2022 and 2021, respectively.

The Company recognized non-cash investment impairments totaling $ 8.7 million on our investments for the year ended December 31, 2021 , which was recorded in “Gain (loss) on investments, net.” There were no impairments recorded for the year ended December 31, 2022.

Other investments includes various investments in companies for which there is no readily determinable market value.

The Company enters into these investments in exchange for advertising services and cash.

IHEARTMEDIA, INC.

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NOTE 6 – LONG-TERM DEBT

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

Long-term debt outstanding consisted of the following:

(In thousands) December 31,

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Asset-based Revolving Credit Facility due 2027 (1)

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

6.375 % Senior Secured Notes due 2026

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Total long-term debt $ 5,214,810 $ 5,413,503

(1) On May 17, 2022, we entered into a $ 450.0 million senior secured asset-based revolving credit facility (the "New ABL Facility"), maturing in 2027, which refinanced and replaced in its entirety the Company's existing asset-based revolving credit facility (the "Existing ABL Facility").

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

(2) As of December 31, 2022, the New ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 25.0 million of outstanding letters of credit, resulting in $ 425.0 million of borrowing base availability.

(1) As of December 31, 2023, the ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 24.3 million of outstanding letters of credit, resulting in $ 425.7 million of borrowing base availability.

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

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On May 17, 2022, iHeartCommunications, Inc.

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

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

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

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

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

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

Size and Availability

The ABL Facility provides for a senior secured asset-based revolving credit facility in the aggregate principal amount of up to $ 450.0 million, with amounts available from time to time (including in respect of letters of credit) equal to the lesser of (A) the borrowing base, which equals the sum of (i) 90.0 % of the eligible accounts receivable of iHeartCommunications and the subsidiary guarantors and (ii) 100 % of qualified cash, each subject to customary reserves and eligibility criteria, and (B) the

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Size and Availability

The New ABL Facility provides for a senior secured asset-based revolving credit facility in the aggregate principal amount of up to $ 450.0 million, with amounts available from time to time (including in respect of letters of credit) equal to the lesser of (A) the borrowing base, which equals the sum of (i) 90.0 % of the eligible accounts receivable of iHeartCommunications and the subsidiary guarantors and (ii) 100 % of qualified cash, each subject to customary reserves and eligibility criteria, and (B) the aggregate revolving credit commitments.

aggregate revolving credit commitments.

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

As of December 31, 2022, iHeartCommunications had no principal amounts outstanding under the New ABL Facility, a facility size of $ 450.0 million and $ 25.0 million in outstanding letters of credit, resulting in $ 425.0 million of borrowing base availability.

As of December 31, 2023, iHeartCommunications had no principal amounts outstanding under the ABL Facility, a facility size of $ 450.0 million and $ 24.3 million in outstanding letters of credit, resulting in $ 425.7 million of borrowing base availability.

Interest Rate and Fees

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

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

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

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

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

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

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

iHeartCommunications may also pay customary letter of credit fees.

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

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

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

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

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

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

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

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

Guarantees and Security

The New ABL Facility is guaranteed by, subject to certain exceptions, the guarantors of iHeartCommunications’ Term Loan Facility (as defined below).

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

The ABL Facility is guaranteed by, subject to certain exceptions, the guarantors of iHeartCommunications’ Term Loan Facility (as defined below).

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

Certain Covenants and Events of Default

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

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

IHEARTMEDIA, INC.

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On May 1, 2019 (the "Effective Date"), iHeartCommunications, as borrower, entered into a Credit Agreement (the “Term Loan Credit Agreement”) with Capital I, as guarantor, certain subsidiaries of iHeartCommunications, as guarantors, and Bank of America, N.A., as successor administrative and collateral agent, governing our term loan credit facility (the “Term Loan Facility”).

On the Effective Date, iHeartCommunications issued an aggregate of approximately $ 3.5 billion principal amount of senior secured term loans under the Term Loan Facility to certain Claimholders pursuant to the Plan of Reorganization.

On the Effective Date, iHeartCommunications issued an aggregate of approximately $ 3.5 billion principal amount of senior secured term loans under the Term Loan Facility to certain holders of claims against the Company (“Claimholders”) in connection with the Company's voluntary petitions for relief under Chapter 11 of the U.S.

Bankruptcy Code (“Chapter 11 Cases”) pursuant to the series of transactions that reduced iHeartCommunications' debt and allowed the Company to emerge from Chapter 11 bankruptcy (the “Plan of Reorganization”).

The Term Loan Facility matures on May 1, 2026.

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Interest Rate and Fees

Following the amendment made on February 3, 2020, the loans under the Term Loan Facility due 2026 bear interest at a rate per annum equal to LIBOR plus a margin of 3.00 %, or the Base Rate plus a margin of 2.00 %.

Following the amendment made on July 16, 2021, the incremental loans under the Incremental Term Loan Facility due 2026 have an interest rate of LIBOR plus a margin of 3.25 % and floor of 0.50 % for Eurocurrency Rate Loans and Base Rate plus a margin of 2.25 % and floor of 1.50 % for Base Rate Loans.

On June 15, 2023, iHeartCommunications entered into Amendment No.

4 to the Term Loan Facility.

The amendment replaces the prior Eurocurrency interest rate, based upon LIBOR, with the 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 %.

Collateral and Guarantees

The Term Loan Facility is guaranteed by Capital I and each of iHeartCommunications’ existing and future material wholly-owned restricted subsidiaries, subject to certain exceptions.

All obligations under the Term Loan Facility, and the guarantees of those obligations, are secured, subject to permitted liens and other exceptions, by a first priority lien in substantially all of the assets of iHeartCommunications and all of the guarantors’ assets, including a lien on the capital stock of iHeartCommunications and certain of its subsidiaries owned by a guarantor, other than the accounts receivable and related assets of

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

iHeartCommunications and all of the subsidiary guarantors, and by a second priority lien on accounts receivable and related assets securing iHeartCommunications’ ABL Facility.

assets of iHeartCommunications and all of the guarantors’ assets, including a lien on the capital stock of iHeartCommunications and certain of its subsidiaries owned by a guarantor, other than the accounts receivable and related assets of iHeartCommunications and all of the subsidiary guarantors, and by a second priority lien on accounts receivable and related assets securing iHeartCommunications’ ABL Facility.

iHeartCommunications is required to prepay outstanding term loans under the Term Loan Facility, subject to certain exceptions, with:

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The 5.25 % Senior Secured Notes are guaranteed on a senior secured basis by Capital I and the subsidiaries of iHeartCommunications that guarantee the Term Loan Facility.

The 5.25 % Senior Secured Notes and the related guarantees rank equally in right of payment with all of iHeartCommunications’ and the guarantors’ existing and future indebtedness that is not expressly subordinated to the 5.25 % Senior Secured Notes (including the Term Loan Facility, the 6.375 % Senior Secured Notes, the 4.75 % Senior Secured Notes and the Senior Unsecured Notes), effectively equal with iHeartCommunications’ and the guarantors’ existing and future indebtedness secured by a first priority lien on the collateral securing the 5.25 % Senior Secured Notes, effectively subordinated to all of iHeartCommunications’ and the guarantors’ existing and future indebtedness that is secured by assets that are not part of the collateral securing the 5.25 % Senior Secured Notes, to the extent of the value of such collateral, and structurally subordinated to all existing and future indebtedness and other liabilities of any subsidiary of iHeartCommunications that is not a guarantor of the 5.25 % Senior Secured Notes.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

such collateral, and structurally subordinated to all existing and future indebtedness and other liabilities of any subsidiary of iHeartCommunications that is not a guarantor of the 5.25 % Senior Secured Notes.

The 5.25 % Senior Secured Notes and the related guarantees are secured, subject to permitted liens and certain other exceptions, by a first priority lien on the capital stock of iHeartCommunications and substantially all of the assets of iHeartCommunications and the guarantors, other than accounts receivable and related assets, and by a second priority lien on accounts receivable and related assets securing the ABL Facility.

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The 4.75 % Senior Secured Notes and the related guarantees are secured, subject to permitted liens and certain other exceptions, by a first priority lien on the capital stock of iHeartCommunications and substantially all of the assets of iHeartCommunications and the guarantors, other than accounts receivable and related assets, and by a second priority lien on accounts receivable and related assets securing the ABL Facility.

iHeartCommunications may redeem the 4.75 % Senior Secured Notes at its option, in whole or part, at any time prior to January 15, 2023, at a price equal to 100 % of the principal amount of the 4.75 % Senior Secured Notes redeemed, plus a make-whole premium, plus accrued and unpaid interest to the redemption date.

iHeartCommunications may redeem the 4.75 % Senior Secured Notes, in whole or in part, on or after January 15, 2023, at the redemption prices set forth in the 4.75 % Senior Secured Notes Indenture plus accrued and unpaid interest to the redemption date.

iHeartCommunications may redeem the 4.75 % Senior Secured Notes at its option, in whole or part, at the redemption prices set forth in the 4.75 % Senior Secured Notes Indenture plus accrued and unpaid interest to the redemption date.

IHEARTMEDIA, INC.

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On the Effective Date, iHeartCommunications entered into an indenture (the “Senior Unsecured Notes Indenture”) with Capital I, as guarantor, the subsidiary guarantors party thereto, and U.S.

Bank National Association, as trustee, governing the $ 1,120.4 million aggregate principal amount of 8.375 % Senior Notes due 2027 that were issued to certain Claimholders pursuant to the Plan of Reorganization.

Bank National Association, as trustee, governing the 8.375 % Senior Notes due 2027 that were issued to certain Claimholders pursuant to the Plan of Reorganization, of which $ 916.4 million aggregate principal amount was outstanding at December 31, 2023.

The Senior Unsecured Notes mature on May 1, 2027 and bear interest at a rate of 8.375 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year.

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The Senior Unsecured Notes and the related guarantees rank equally in right of payment with all of iHeartCommunications’ and the guarantors’ existing and future indebtedness that is not expressly subordinated to the Senior Unsecured Notes, effectively subordinated to all of iHeartCommunications’ and the guarantors’ existing and future indebtedness that is secured (including the 6.375 % Senior Secured Notes, the 5.25 % Senior Secured Notes, the 4.75 % Senior Secured Notes and borrowings under the ABL Facility and the Term Loan Facility), to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities of any subsidiary of iHeartCommunications that is not a guarantor of the Senior Unsecured Notes.

iHeartCommunications could redeem the Senior Unsecured Notes at its option, in whole or in part, at any time prior to May 1, 2022, at a price equal to 100 % of the principal amount of the Senior Unsecured Notes being redeemed, plus an applicable premium and plus accrued and unpaid interest to the redemption date.

iHeartCommunications may redeem the Senior Unsecured Notes at its option, in whole or in part, on or after May 1, 2022, at the redemption prices set forth in the Senior Unsecured Notes Indenture plus accrued and unpaid interest to the redemption date.

At any time prior to May 1, 2022, iHeartCommunications could redeem at its option, up to 40 % of the aggregate principal amount of the Senior Unsecured Notes at a redemption price equal to 108.375 % of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the proceeds of one or more equity offerings.

iHeartCommunications may redeem the Senior Unsecured Notes at its option, in whole or in part, at the redemption prices set forth in the Senior Unsecured Notes Indenture plus accrued and unpaid interest to the redemption date.

The Senior Unsecured Notes Indenture contains covenants that limit the ability of Capital I and its restricted subsidiaries, including iHeartCommunications, to, among other things:

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• enter into certain transactions with affiliates;

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• merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of iHeartCommunications’ assets;

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• pay dividends, redeem or repurchase capital stock or make other restricted payments.

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Future Maturities of Long-term Debt

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Surety Bonds and Letters of Credit

As of December 31, 2022, iHeartCommunications had outstanding surety bonds, commercial standby letters of credit and bank guarantees of $ 9.3 million , $ 25.4 million and $ 0.2 million, respectively.

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

As of December 31, 2023, iHeartCommunications had outstanding surety bonds and commercial standby letters of credit of $ 9.6 million and $ 24.3 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.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

The Company accounts for its rentals that include renewal options, annual rent escalation clauses, minimum franchise payments and maintenance related to displays under the guidance in ASC 842, Leases .

The Company leases office space, certain broadcasting facilities and equipment under long-term operating leases.

The Company accounts for annual rent escalation clauses included in the lease term on a straight-line basis under the guidance in ASC 842, Leases .

The Company considers renewal periods in determining its lease terms if at inception of the lease there is reasonable assurance the lease will be renewed.

Expenditures for maintenance are charged to operations as incurred, whereas expenditures for renewal and betterments are capitalized.

Non-cancelable contracts that provide the lessor with a right to fulfill the arrangement with property, plant and equipment not specified within the contract are not a lease and have been included within non-cancelable contracts within the table below.

The Company leases office space, certain broadcasting facilities and equipment under long-term operating leases.

The Company accounts for these leases in accordance with the policies described above.

Rent expense charged to operations for the years ended December 31, 2023, 2022, and 2021 was $ 178.3 million, $ 188.5 million, and $ 203.5 million, respectively.

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As of December 31, 2023, the Company's future minimum payments under non-cancelable contracts in excess of one year and employment/talent contracts consist of the following:

(In thousands)

Non-Cancelable Employment/Talent

(In thousands) Non-Cancelable Employment/Talent

Contracts Contracts

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These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies.

It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings.

It is possible,

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however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings.

Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.

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and tax disputes.

Alien Ownership Restrictions and FCC Petition for Declaratory Ruling

Alien Ownership Restrictions and FCC Declaratory Ruling

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

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

On November 5, 2020, the FCC issued the 2020 Declaratory Ruling, which granted the relief requested by the PDR, subject to certain conditions, as described further in Note 9, Stockholder's Equity .

On November 9, 2020, the Company notified the holders of Special Warrants of the commencement of an exchange process (the “Exchange Notice”).

On January 8, 2021, the Company exchanged a portion of the outstanding Special Warrants into Class A common stock or Class B common stock, in compliance with the Declaratory Ruling, the Communications Act and FCC rules (the “Exchange”).

Following the Exchange, the Company’s remaining Special Warrants continue to be exercisable for shares of Class A common stock or Class B common stock.

Business – Regulation of Our Business, Alien Ownership Restrictions” of our Annual Report on Form 10-K for the year ended December 31, 2020 and "Part II, Item 1A.

Risk Factors - Regulatory, Legislative and Litigation Risks, Regulations imposed by the Communications Act and the FCC limit the amount of foreign individuals or entities that may invest in our capital stock without FCC approval" in this Quarterly Report on Form 10-Q for additional information.

On March 8, 2021, the Company filed the Remedial PDR with the FCC.

The Remedial PDR relates to the acquisition by Global Media & Entertainment Ltd (f/k/a Honeycomb Investments Limited) ("Global Investments") of the Company’s Class A Common Stock.

Specifically, on February 5, 2021, Global Investments, The Global Media & Entertainment Investments Trust (the "GMEI Trust"), James Hill (as trustee of the GMEI Trust), Simon Groom (as trustee of the GMEI Trust) and Michael Tabor (as beneficiary of the GMEI Trust) (together with Global Investments and any affiliates or third parties to whom they may assign or transfer any of their rights or interests, the "GMEI Investors") filed a Schedule 13D with the SEC, in which the

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GMEI Investors disclosed beneficial ownership of 9,631,329 shares of the Company’s Class A Common Stock, which at that time represented approximately 8.7 % of the Company’s outstanding Class A Common Stock.

This ownership interest was inconsistent with the FCC’s foreign ownership rules and the 2020 Declaratory Ruling issued by the FCC relating to the Company’s foreign ownership on November 5, 2020, both of which limit a foreign investor in the GMEI Investors’ position to holding no more than 5 % of the Company’s voting equity or total equity without prior FCC approval.

The Remedial PDR, which was filed pursuant to the rules and regulations of the FCC, sought (a) specific approval for the more than 5 % equity and voting interests in the Company presently held by the GMEI Investors and (b) as amended, advance approval for the GMEI Investors to increase their equity and voting interest in the Company up to any non-controlling amount not to exceed 14.99 %.

On March 26, 2021, the FCC conditioned the approval of applications by the Company to acquire certain radio stations, which were pending prior to the GMEI Investors’ Schedule 13D filing, on the Company taking certain actions with respect to the GMEI Investors' rights as stockholders of the Company.

On that same date, and in order to implement the conditions required by the FCC, the Company’s Board of Directors (the “Board”) resolved to take certain actions to limit the rights of the GMEI Investors, including, but not limited to, suspending all voting rights of GMEI Investors until and unless the FCC releases a declaratory ruling granting specific approval for each of the GMEI Investors to hold more than 5 percent of the equity and/or voting interests of the Company.

On December 22, 2021, the FCC issued the “GMEI Declaratory Ruling" which granted the Remedial PDR.

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

individuals and entities.

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

On November 5, 2020, the FCC issued a declaratory ruling, permitting the Company to be up to 100 % foreign-owned, subject to certain conditions (the “2020 Declaratory Ruling”).

NOTE 8 – INCOME TAXES

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Deferred – foreign

1,714 1,659 976

Deferred – state

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The current tax expenses recorded for the years ended December 31, 2023, 2022, and 2021 were primarily related to federal, state, and local tax expenses incurred due to taxable income in excess of available net operating losses during those years.

The current tax expense recorded for the year ended December 31, 2020 was primarily related to local country foreign tax expense in certain jurisdictions partially offset by adjustments to the Company’s reserves for unrecognized tax benefits in certain state jurisdictions.

The deferred tax benefits of $ 144.6 million and $ 74.4 million recorded in the years ended December 31, 2023 and 2022, respectively, related primarily to the difference of book in excess of tax amortization expense during the years and the disallowance of interest expense deductions under Section 163(j) of the Internal Revenue Code.

The 2022 book amortization

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expense included the FCC license non-cash impairment charge recorded during the third quarter of 2022 discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

The 2023 book amortization expense included the FCC license non-cash impairment charge recorded during the second quarter of 2023 discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

These benefits were partially offset by the utilization of net operating loss carryforwards during the current period and the recording of valuation allowance adjustments against certain federal and state deferred tax assets for disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future years.

The deferred tax benefit of $ 184.3 million recorded in the year ended December 31, 2020 related primarily to the current period net operating losses and a reduction in deferred tax liabilities recorded in connection with the impairment of our FCC licenses discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

On March 27, 2020, the CARES Act, which included numerous tax provisions, was signed into law.

The CARES Act included certain temporary relief provisions with respect to the application of the Section 163(j) interest deduction limitation including the ability to elect to use the Company’s 2019 Adjusted Taxable Income (as defined under Section 163(j)) for purposes of calculating the 2020 interest deduction limitation.

This provision of the CARES Act resulted in an increase to allowable interest deductions of $ 179.4 million during 2020.

The other federal income tax provisions within the CARES Act did not materially impact the Company’s financial statements.

On December 27, 2020, the Consolidated Appropriations Act was signed into law in order to provide further stimulus and support to those affected by the COVID-19 pandemic.

The tax provisions included within the Consolidated Appropriations Act did not materially impact the Company’s financial statements in the current year.

On August 16, 2022, the Inflation Reduction Act was signed into law.

The tax provisions included within the Inflation Reduction Act did not materially impact the Company's financial statements in the current year.

Significant components of the Company's deferred tax liabilities and assets as of December 31, 2022 and 2021 are as follows:

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Significant components of the Company's deferred tax liabilities and assets are as follows:

(In thousands) 2023 2022

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Net deferred tax liabilities $ 339,768 $ 483,810

The deferred tax liability related to intangibles primarily relates to the difference in book and tax basis of FCC licenses and other intangible assets that were adjusted for book purposes to estimated fair values as part of the application of fresh start accounting, and were further adjusted in the first quarter of 2020 and the third quarter of 2022 upon recognition of impairments

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as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

The deferred tax liability related to intangibles primarily relates to the difference in book and tax basis of FCC licenses and other intangible assets that were adjusted for book purposes to estimated fair values as part of the application of fresh start accounting, and were further adjusted in the first quarter of 2020, the third quarter of 2022 and the second quarter of 2023 upon recognition of impairments as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

In accordance with ASC 350-10, the Company does not amortize FCC licenses for financial reporting purposes.

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The Company recorded deferred tax assets for federal and state interest limitation carryforwards of $ 389.2 million as of December 31, 2023.

Included in this balance is $ 89.7 million of deferred tax assets that offsets uncertain tax position liabilities recorded in the Company's other long term liability account.

In connection with the taxable separation of the Outdoor division as part of the bankruptcy restructuring, the Company realized a $ 7.2 billion capital loss (gross after attribute reduction calculations).

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The Company expects to realize the benefits of a portion of its remaining deferred tax assets based upon expected future taxable income from deferred tax liabilities that reverse in the relevant federal and state jurisdictions and carryforward periods.

As of December 31, 2022, the Company had recorded a valuation allowance of $ 1.9 billion against a portion of these U.S.

As of December 31, 2023, the Company had

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recorded a valuation allowance of $ 2.0 billion against a portion of these U.S.

federal and state deferred tax assets which it does not expect to realize, relating primarily to capital loss carryforwards, disallowed interest carryforwards, and certain state net operating loss carryforwards.

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federal and state deferred tax valuation allowance increased by $ 55.0 million during the year ended December 31, 2023 primarily due to an increase in valuation allowances against interest limitation carryforwards.

Any deferred tax liabilities associated with acquired FCC licenses and tax-deductible goodwill intangible assets are now relied upon as sources of future taxable income for purposes of realizing deferred tax assets attributed to carryforwards that have an indefinite life such as the Section 163(j) interest carryforward.

Any deferred tax liabilities associated with acquired FCC licenses and tax-deductible goodwill intangible assets are relied upon as sources of future taxable income for purposes of realizing deferred tax assets attributed to carryforwards that have an indefinite life such as the Section 163(j) interest carryforward.

At December 31, 2023, net deferred tax liabilities include a deferred tax asset of $ 7.0 million relating to stock-based compensation expense under ASC 718-10, Compensation—Stock Compensation .

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Accordingly, there can be no assurance that the stock price of the Company’s common stock will rise to levels sufficient to realize the entire deferred tax benefit currently reflected in its balance sheet.

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The reconciliations of income tax on income (loss) computed at the U.S.

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State income taxes, net of federal tax effect 16,349 1.4 % ( 3,548 ) ( 1.4 ) % 3,325 2.2 %

( 3,548 ) ( 1.4 ) % 3,325 2.2 % 13,619 0.7 %

Foreign income taxes ( 583 ) ( 0.1 ) % ( 1,615 ) ( 0.6 ) % ( 978 ) ( 0.7 ) %

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Changes in valuation allowance and other estimates ( 69,722 ) ( 6.0 ) % ( 52,293 ) ( 20.3 ) % ( 35,093 ) ( 23.4 ) %

( 52,293 ) ( 20.3 ) % ( 35,093 ) ( 23.4 ) % ( 30,531 ) ( 1.5 ) %

Impairment charges ( 125,047 ) ( 10.7 ) % — — % — — %

4 unchanged sentences

The effective tax rates for both years were primarily impacted the valuation allowance adjustments recorded during the years against certain federal and state deferred tax assets for disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future periods.

In addition, in 2023 the Company recorded a GAAP impairment charge to our non-deductible goodwill as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

The Company’s effective tax rate for the year ended December 31, 2021 was ( 5.6 )%.

The effective rate for the year was primarily impacted by the impairment charges to non-deductible goodwill discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

In addition, the Company recorded deferred tax adjustments to state net operating losses and federal and state disallowed interest carryforwards as a result of the filing of 2019 tax returns and certain legal entity restructuring completed during the year.

These adjustments were partially offset by valuation allowance adjustments recorded during the year against certain federal and state deferred tax assets such as net operating loss carryforwards and disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future years.

The effective rate for the year was primarily impacted by the valuation allowance adjustments recorded during the year against certain federal and state deferred tax assets for disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future years.

The Company continues to record interest and penalties related to unrecognized tax benefits in current income tax expense.

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The total amount of unrecognized tax benefits at December 31, 2023 and 2022 that, if recognized, would impact the effective income tax rate is $ 32.6 million and $ 22.9 million, respectively.

(In thousands) Years Ended December 31,

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(In thousands) Year Ended December 31,

Unrecognized Tax Benefits 2023 2022

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Balance at end of period $ 123,822 $ 23,823

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The Company and its subsidiaries file income tax returns in the U.S.

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The majority of all material state, local, and foreign income tax matters have been concluded for years through 2019 with the exception of a current examination in Texas that covers the 2007-2016 tax years.

NOTE 9 – STOCKHOLDERS’ EQUITY

During 2023, the Company recorded unrecognized tax benefit reserves for federal and state purposes related to the filing of 2020 amended tax returns reflecting additional deductible interest expense in those years that resulted in additional net operating losses being carried forward and utilized in later years.

The amount of unrecognized tax benefit reserves recorded during 2023 related to the amended returns was $ 97.1 million, inclusive of interest.

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

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

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

At our 2023 Annual Meeting of Stockholders, an increase to the shares authorized for issuance under the 2021 Plan was approved.

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

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The 2021 Plan provides for the grant of (a) incentive and non-incentive options, (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) other stock or cash-based awards and (f) dividend equivalents.

The aggregate number of shares of Class A common stock that may be issued or used for reference purposes with respect to which awards may be granted under the 2021 Plan is equal to the sum of (a) 6,000,000 shares of Class A common stock plus (b) shares of Class A common stock which are subject to outstanding awards under the 2019 Plan, and become available for issuance under the 2021 Plan (which may not exceed 10,743,222 shares of Class A common stock).

The aggregate number of shares of Class A common stock that may be issued or used for reference purposes with respect to which awards may be granted under the 2021 Plan is equal to the sum of (a) 19,000,000 shares of Class A common stock plus (b) shares of Class A common stock which are subject to outstanding awards under the 2019 Plan, and become available for issuance under the 2021 Plan.

Such shares of common stock may consist either in whole or in part of authorized but unissued shares of common stock, shares purchased on the open market, or shares of common stock held in the treasury of the Company.

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Options granted under the 2019 Plan and 2021 Plan are exercisable at such time or times and subject to such terms and conditions as shall be determined by the Compensation Committee of the Board (the "Committee") at the time of grant.

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No options granted under the 2019 Plan or the 2021 Plan will provide for any dividends or dividend equivalents thereon.

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The Company does not estimate forfeitures at grant date, but rather has elected to account for forfeitures when they occur.

There were no options granted during the year ended December 31, 2022.

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There were no options granted during the years ended December 31, 2023 and December 31, 2022.

The following assumptions were used to calculate the fair value of the Company's options on the date of grant:

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Risk-free interest rate 0.79 % – 1.15 %

0.35 % – 1.41 %

Dividend yield — %

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Outstanding, January 1, 2023 7,510 $ 16.16 4.0 years

Exercised ( 31 ) 15.20

Forfeited ( 120 ) 13.23

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(1) The total fair value of the options vested during the year ended December 31, 2023 was $ 8.4 million.

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Restricted Stock Units ( “ RSUs ” )

RSUs (representing one share of the Company's class A common stock) may be issued under the 2019 Plan and 2021 Plan.

RSUs and Performance RSUs (representing one share of the Company's Class A common stock) may be issued under the 2019 Plan and 2021 Plan.

Each RSU awarded to a participant, both under the 2019 Plan and the 2021 Plan will be credited with dividends paid in respect of one share of common stock (“Dividend Equivalents”).

1 unchanged sentence

Dividend Equivalents credited to a participant’s account and attributable to any particular RSU (and earnings thereon, if applicable) shall be distributed to the participant upon settlement of such RSU and, if such RSU is forfeited, the participant shall have no right to such Dividend Equivalents.

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RSUs vest solely due to continued service over time.

Performance RSUs generally vest upon the achievement of certain total stockholder return goals, Adjusted EBITDA goals, Social Responsibility goals, and continued service.

The majority of these awards are being measured over an approximately 3 -year period from the date of issuance, while certain Performance RSUs are measured over a 50 -month period from the date of issuance.

The following table presents a summary of the Company's RSUs outstanding and RSU activity as of and during the year ended December 31, 2023 (“Price” reflects the weighted average share price at the date of grant):

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Outstanding, December 31, 2023 11,611 6.48

Performance-based Restricted Stock Units (“Performance RSUs”)

In August 2020, the Company issued Performance RSUs under the 2019 Plan to certain key employees.

Such Performance RSUs vested upon the achievement of critical operational (cost savings) improvements and specific environmental, social and governance initiatives, which were measured over an approximately 15-month period from the date of issuance.

In the year ended December 31, 2021, the Company recognized $ 1.6 million in relation to these Performance RSUs.

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

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

During the year ended December 31, 2022, the Company recognized $ 2.3 million in relation to these Q1 2022 Performance RSUs.

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

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

The Q2 2022 Performance RSUs are measured over a performance period ending December 31, 2024 and vest on the third anniversary of the date of issuance (to the extent earned).

During the year ended December 31, 2022, the Company recognized $ 3.3 million in relation to these Q2 2022 Performance RSUs.

Expected volatilities were based on historical and implied volatility of peer companies’ stock, including the Company, over the expected life of the awards.

The Company does not estimate forfeitures at grant date, but rather has elected to account for forfeitures when they occur.

The following table presents a summary of the Company's Performance RSUs outstanding and activity as of and during the year ended December 31, 2022 (“Price” reflects the weighted average share price at the date of grant):

(In thousands, except per share data) Awards Price

Outstanding, January 1, 2022 556 $ 8.98

Granted 2,055 13.57

Vested (restriction lapsed) ( 556 ) 8.98

Forfeited — —

Outstanding, December 31, 2022 2,055 13.57

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Common Stock and Special Warrants

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

The following table presents the Company's Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding:

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

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The Company may not subdivide or combine (by stock split, reverse stock split, recapitalization, merger, consolidation or any other transaction) its shares of Class A common stock or Class B common stock without subdividing or combining its shares of Class B common stock or Class A common stock, respectively, in a similar manner.

Upon our dissolution or liquidation or the sale of all or substantially all of the Company's assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of the Company's Class A common stock will be entitled to receive pro rata together with holders of the Company's Class B common stock our remaining assets available for distribution.

New Class A common stock certificates issued upon transfer or new issuance of Class A common stock shares contain a legend stating that such shares of Class A common stock are subject to the provisions of our amended and restated certificate of incorporation, including but not limited to provisions governing compliance with requirements of the Communications Act and regulations thereunder, including, without limitation, those concerning foreign ownership and media ownership.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Class B Common Stock

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

To the extent there are any dividends declared or distributions made with respect to the Class A common stock or Class B common stock, those dividends or distributions will also be made to holders of Special Warrants concurrently and on a pro rata basis based on their ownership of common stock underlying their Special Warrants on an as-exercised basis;

provided , that no such distribution will be made to holders of Special Warrants if (x) the Communications Act or an FCC rule prohibits such distribution to holders of Special Warrants or (y) our FCC counsel opines that such distribution is reasonably likely to cause (i) the Company to violate the Communications Act or any applicable FCC rule or (ii) any such holder not to be deemed to hold a noncognizable (under FCC rules governing foreign ownership) future equity interest in the Company;

provided further , that, if any distribution of common stock or any other securities to a holder of Special Warrants is not permitted pursuant to clauses (x) or (y), the Company will cause economically equivalent warrants to be distributed to such holder in lieu thereof, to the extent that such distribution of warrants would not violate the Communications Act or any applicable FCC rules.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Special Warrants will expire on the earlier of the twentieth anniversary of the issuance date and the occurrence of a change in control of the Company.

1 unchanged sentence

During the year ended December 31, 2022, stockholders exercised 96,516 and 96,602 Special Warrants for an equivalent number of shares of Class A common stock and Class B common stock, respectively.

During the year ended December 31, 2020, stockholders exercised 6,205,617 and 2,095 Special Warrants for an equivalent number of Class A common stock and Class B common stock, respectively.

During the year ended December 31, 2021, stockholders exercised 47,197,139 and 22,337,312 Special Warrants for an equivalent number of shares of Class A common stock and Class B common stock, respectively.

January 2021 Exchange Substantially Expanding Class A and Class B Shares Outstanding

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Certain shares of Class B common stock and Special Warrants were not converted into Class A Common Stock due to current regulatory restrictions applicable to certain shareholders.

There were 5,111,312 Special Warrants outstanding on February 24, 2023.

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Share-Based Compensation Cost

The following table presents the Company's total share based compensation expense by award type for the years ended 2023, 2022, and 2021:

(In thousands) Year Ended December 31,

2023 2022 2021

RSUs $ 21,709 $ 21,048 $ 13,182

Performance RSUs 8,857 5,589 1,617

Options 5,059 8,820 8,744

Total Share Based Compensation Expense $ 35,625 $ 35,457 $ 23,543

The share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period.

Share-based compensation payments are recorded in Selling, general and administrative expenses and were $ 35.5 million, $ 23.5 million and $ 22.9 million for the Company for the years ended December 31, 2022, 2021, and 2020, respectively.

Share-based compensation payments are recorded in Selling, general and administrative expenses.

The tax benefit related to the share-based compensation expense for the Company for the years ended December 31, 2023, 2022, and 2021 was $ 4.7 million, $ 5.2 million and $ 3.5 million, respectively.

As of December 31, 2022, there was $ 46.0 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on service conditions.

This cost is expected to be recognized over a weighted average period of approximately 3.2 years.

In addition, as of December 31, 2022, there were unrecognized compensation costs of $ 10.2 million from the Q1 2022 Performance RSUs and $ 12.1 million from the Q2 2022 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 50-month period from the date of issuance for the Q1 2022 Performance RSUs and over a 3-year period from the date of issuance for the Q2 2022 Performance RSUs.

As of December 31, 2023, there was $ 50.8 million of unrecognized compensation cost related to share-based compensation arrangements.

This cost is expected to be recognized over a weighted average period of approximately 1.9 years and assumes Performance RSUs will be fully earned.

Loss per Share

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Diluted $ ( 7.39 ) $ ( 1.79 ) $ ( 1.09 )

(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 years ended December 31, 2023, December 31, 2022 and December 31, 2021.

(2) Outstanding equity awards representing 13.6 million, 11.0 million and 10.5 million shares of Class A common stock of the Company for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2) Outstanding equity awards representing $ 11.0 million, $ 10.5 million and $ 9.1 million shares of Class A common stock of the Company for the years ended December 31, 2022, December 31, 2021, and December 31, 2020, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

Stockholder Rights Plan

On May 5, 2020, the Board approved the adoption of a short-term stockholder rights plan (the “Stockholder Rights Plan”).

Pursuant to the stockholder rights plan, the Board declared a dividend distribution of one right on each outstanding share of Class A common stock, share of Class B common stock and special warrant issued in connection with the Plan of Reorganization.

The record date for such dividend distribution was May 18, 2020.

Under the Stockholder Rights Plan, subject to certain exceptions, the rights were generally exercisable only if, in a transaction not approved by the Board, a person or group acquired beneficial ownership of 10 % or more of the Company’s Class A common stock (or 20 % in the case of certain passive investors), including through such person’s ownership of the convertible Class B common stock and/or special warrants, as further detailed in the Stockholder Rights Plan.

In that situation, each holder of a right (other than the acquiring person or group) would have the right to purchase, upon payment of the exercise price, a number of shares of the Company’s Class A common stock, Class B common stock or special warrants, as applicable, having a market value of twice such price.

In addition, the Stockholder Rights Plan contained a similar provision if the Company was acquired in a merger or other business combination after an acquiring person acquires beneficial ownership of 10 % or more of the Company’s Class A common stock (or 20 % in the case of certain passive investors).

The Stockholder Rights Plan expired on May 5, 2021.

The adoption of the Stockholder Rights Plan was not a taxable event and did not have any impact on the Company’s financial reporting.

NOTE 10 – EMPLOYEE BENEFIT PLANS

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Employees vest in these iHeartCommunications matching contributions based upon their years of service to iHeartCommunications.

In April 2020, the Company announced incremental operating-expense-saving initiatives in response to the economic environment resulting from the COVID-19 pandemic, which included a temporary suspension of the Company's 401(k) matching program that continued through December 31, 2021.

Starting January 1, 2022, the Company recommenced its 401(k) matching program.

In response to the challenging macroeconomic environment, beginning in March 2023, the Company temporarily suspended its 401(k) matching program as an incremental operating-expense-saving initiative.

Contributions of $ 4.4 million and $ 14.9 million made to these plans for the years ended December 31, 2023, and 2022, respectively, were expensed.

The Company did not make any matching contributions in 2021.

iHeartCommunications offers a non-qualified deferred compensation plan for a select group of management or highly compensated employees, under which such employees were able to make an annual election to defer up to 50 % of their annual salary and up to 80 % of their bonus before taxes.

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The asset and liability under the deferred compensation plan at December 31, 2022 was approximately $ 10.1 million recorded in “Other assets” and $ 10.1 million recorded in “Other long-term liabilities”, respectively.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – SEGMENT DATA

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Share-based payments are recorded in Selling, general and administrative expense.

The following tables present the Company's segment results for the years ended December 31, 2022, December 31, 2021, and December 31, 2020 :

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the Company's segment results:

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

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Share-based compensation expense ( 35,625 )

Operating income $ 56,860

Operating loss $ ( 797,311 )

Segment assets $ 5,443,207 $ 626,004 $ 310,909 $ 576,426 $ ( 3,935 ) $ 6,952,611

2 unchanged sentences

Share-based compensation expense — — — 35,625 — 35,625

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

15 unchanged sentences

Share-based compensation expense — — — 35,457 — 35,457

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Balance at December 31, 2020

Year Ended December 31, 2021

Revenue $ 2,489,018 $ 834,482 $ 247,957 $ — $ ( 13,117 ) $ 3,558,340

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Share-based compensation expense ( 23,543 )

Operating loss $ ( 1,737,624 )

Operating income $ 154,857

Segment Assets $ 6,953,772 $ 1,088,471 $ 438,773 $ 403,898 $ ( 3,605 ) $ 8,881,309

2 unchanged sentences

Share-based compensation expense — — — 23,543 — 23,543

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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Beginning on January 1, 2021, Segment Adjusted EBITDA became the segment profitability metric reported to the Company's Chief Operating Decision Maker for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment.

NOTE 12 – CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Tax Matters Agreement

On the Effective Date, the Company entered into the Tax Matters Agreement by and among the Company, iHeartCommunications, iHeart Operations, Clear Channel Holdings, Inc.

and Clear Channel Outdoor Holdings, Inc.

(the "Outdoor Group") and its subsidiaries, to allocate the responsibility of the Company 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 Company's separation from the Outdoor Group.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data