What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-09 · 105 added, 300 removed, 423 unchanged (49% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

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

2024 December 31,

28 unchanged sentences

Commitments and contingent liabilities (Note 6)

STOCKHOLDERS’ EQUITY (DEFICIT)

STOCKHOLDERS' DEFICIT

Noncontrolling interest 6,400 9,397

Preferred stock, par value $ .001 per share, 100,000,000 shares authorized, no shares issued and outstanding

Class A Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued 124,273,910 and 122,370,425 shares in 2023 and 2022, respectively

Class B Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued 21,347,363 and 21,477,181 shares in 2023 and 2022, respectively

Class A Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued and outstanding 124,416,225 and 124,299,288 shares in 2024 and 2023, respectively

Class B Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued and outstanding 21,346,613 and 21,347,363 shares in 2024 and 2023, respectively

Special Warrants, 5,043,336 and 5,101,870 issued and outstanding in 2024 and 2023, respectively

4 unchanged sentences

( 10,166 ) ( 10,127 )

Total Stockholders' Equity (Deficit) ( 406,821 ) 684,506

Total Liabilities and Stockholders' Equity (Deficit) $ 6,877,518 $ 8,335,887

Total Stockholders' Deficit ( 398,574 ) ( 384,758 )

Total Liabilities and Stockholders' Deficit $ 6,758,312 $ 6,952,611

See Notes to Consolidated Financial Statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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

2023 2022 2023 2022

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

Revenue $ 799,038 $ 811,239

5 unchanged sentences

Other operating expense, net 572 221

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

Operating loss ( 34,708 ) ( 48,862 )

Interest expense, net 95,515 95,457

Gain (loss) on investments, net 91,994 ( 6,505 )

Equity in loss of nonconsolidated affiliates ( 3,514 ) ( 132 ) ( 3,518 ) ( 190 )

Equity in earnings (loss) of nonconsolidated affiliates ( 45 ) 40

Gain on extinguishment of debt — 4,625

26 unchanged sentences

Comprehensive Loss Treasury

Shares Class B

Shares Special Warrants Total

June 30, 2023

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

Net income (loss) 84 — — ( 9,053 ) — — ( 8,969 )

Vesting of restricted stock and other

218,113 — 1 ( 1 ) — — ( 229 ) ( 229 )

Share-based compensation — — 7,734 — — — 7,734

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

( 1,567 ) — — — — — ( 1,567 )

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

September 30, 2023

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

(In thousands, except share data) Controlling Interest

Common Shares (1)

Interest Common

Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive Loss Treasury

Class A Shares Class B

Shares Special Warrants Total

June 30, 2022

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

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

Vesting of restricted stock and other 178,506 — 1 59 — — ( 539 ) ( 479 )

Share-based compensation

— — 10,437 — — — 10,437

Conversion of Special Warrants to Class A and Class B Shares

85,141 96,602 ( 181,743 ) — — — — — — —

Conversion of Class B Shares to Class A Shares 9,218 ( 9,218 ) — — — — — — —

Other ( 187 ) — — — — — ( 187 )

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

September 30, 2022

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

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2023 or 2022.

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(In thousands, except share data) Controlling Interest

Common Shares (1)

Interest Common

Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive Loss Treasury

Class A Shares Class B

Shares Special Warrants Total

December 31, 2023

4 unchanged sentences

— — 7,947 — — — 7,947

Dividends declared and paid to noncontrolling interests ( 3,397 ) — — — — — ( 3,397 )

Conversion of Special Warrants to Class A and Class B Shares

1 unchanged sentence

Conversion of Class B Shares to Class A Shares 750 ( 750 ) — — — — — — —

Other ( 2,210 ) — — — — — ( 2,210 )

Other comprehensive loss — — — — ( 219 ) — ( 219 )

September 30, 2023

March 31, 2024

124,416,225 21,346,613 5,043,336 $ 6,400 $ 146 $ 2,955,043 $ ( 3,348,650 ) $ ( 1,347 ) $ ( 10,166 ) $ ( 398,574 )

9 unchanged sentences

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 income (loss) 1,211 — — ( 344,544 ) — — ( 343,333 )

Net loss ( 103 ) — — ( 222,260 ) — — ( 222,363 )

Vesting of restricted stock and other 7,513 — — — — — ( 24 ) ( 24 )

1 unchanged sentence

— — 10,152 — — — 10,152

Conversion of Special Warrants to Class A and Class B Shares

96,516 96,602 ( 193,118 ) — — — — — — —

Dividends declared and paid to noncontrolling interests ( 321 ) — — — — — ( 321 )

Conversion of Class B Shares to Class A Shares 7,262 ( 7,262 ) — — — — — — —

Other ( 562 ) — — — — — ( 562 )

Other comprehensive loss — — — — ( 46 ) — ( 46 )

September 30, 2022

March 31, 2023

122,385,200 21,469,919 5,111,312 $ 9,185 $ 144 $ 2,922,652 $ ( 2,449,742 ) $ ( 1,377 ) $ ( 8,958 ) $ 471,904

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) Nine Months Ended September 30,

(In thousands) Three Months Ended March 31,

Cash flows from operating activities:

7 unchanged sentences

Share-based compensation 7,947 10,152

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

(Gain) Loss on disposal of operating and other assets 132 ( 278 )

(Gain) Loss on investments ( 91,994 ) 6,505

Equity in loss of nonconsolidated affiliates 3,518 190

Equity in (earnings) loss of nonconsolidated affiliates 45 ( 40 )

Gain on extinguishment of debt — ( 4,625 )

3 unchanged sentences

Decrease in accounts receivable 153,799 94,759

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

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

Increase in prepaid & other current assets ( 54,484 ) ( 37,032 )

(Increase) Decrease in other long-term assets 368 ( 1,521 )

Decrease in accounts payable ( 12,267 ) ( 63,187 )

1 unchanged sentence

Decrease in accrued interest ( 8,823 ) ( 6,222 )

Increase in deferred income 42,497 18,392

Increase in deferred revenue 8,260 16,829

Increase in other long-term liabilities ( 272 ) ( 759 )

Cash provided by operating activities 58,958 206,699

Cash used for operating activities ( 59,277 ) ( 93,983 )

Cash flows from investing activities:

Proceeds from sale of investments 101,405 —

Purchases of property, plant and equipment ( 21,582 ) ( 39,165 )

Proceeds from disposal of assets 54,101 34,690

Change in other, net ( 1,808 ) 744

Cash used for investing activities ( 39,991 ) ( 82,807 )

Cash provided by (used for) investing activities 78,015 ( 38,421 )

Cash flows from financing activities:

Payments on long-term debt and credit facilities ( 111 ) ( 15,593 )

Dividends and other payments to noncontrolling interests ( 3,397 ) ( 321 )

Change in other, net ( 40 ) ( 24 )

1 unchanged sentence

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 169 ) 39

Net decrease in cash, cash equivalents and restricted cash ( 123,182 ) ( 56,730 )

Net increase (decrease) in cash, cash equivalents and restricted cash 15,021 ( 148,303 )

Cash, cash equivalents and restricted cash at beginning of period 346,382 336,661

25 unchanged sentences

Economic Conditions

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

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

This challenging environment has led to broader market uncertainty and has delayed the Company's expected recovery and has had an adverse impact on the Company's revenues and cash flows.

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

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

This challenging environment has led to broader market uncertainty and has delayed the Company's 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.

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 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 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 of which 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 January 2022.

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

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

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

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

As of March 31, 2024, the Company had approximately $ 361.4 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 $ 23.2 million of outstanding letters of credit, resulting in $ 426.8 million of borrowing base availability.

The Company's total available liquidity as of March 31, 2024 was approximately $ 788.2 million.

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

2 unchanged sentences

Restricted Cash

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

(In thousands) September 30,

2023 December 31,

Cash and cash equivalents $ 213,479 $ 336,236

Restricted cash included in:

Other current assets — 425

Total cash, cash equivalents and restricted cash in the Statement of Cash Flows $ 213,479 $ 336,661

As of March 31, 2024 and December 31, 2023, the Company did not have any restricted cash balances on the Consolidated Balance Sheets.

Certain Relationships and Related Party Transactions

1 unchanged sentence

None of these ordinary course transactions have had a material impact on the Company.

New Accounting Pronouncements Recently 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 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.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

New Accounting Pronouncements Not Yet Adopted

In December 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 expenses 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 on our disclosures, 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, 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 on our annual disclosures, including timing of adoption.

NOTE 2 – REVENUE

Disaggregation of Revenue

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

The following tables show revenue streams for the three months ended March 31, 2024 and 2023:

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

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 493,463 $ 238,968 $ 69,168 $ ( 2,561 ) $ 799,038

Three Months Ended September 30, 2022

Three Months Ended March 31, 2023

Revenue from contracts with customers:

13 unchanged sentences

Revenue, total $ 529,013 $ 223,396 $ 61,351 $ ( 2,521 ) $ 811,239

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

(2) Networks revenue is generated through the sale of advertising on the Company’s Premiere and Total Traffic & Weather network programs and through the syndication of network programming to other media companies.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Nine Months Ended September 30, 2023

Revenue from contracts with customers:

Broadcast Radio (1)

$ 1,267,493 $ — $ — $ — $ 1,267,493

346,456 — — — 346,456

Sponsorship and Events (3)

120,297 — — — 120,297

Digital, excluding Podcast (4)

— 475,291 — ( 3,627 ) 471,664

— 276,181 — — 276,181

Audio & Media Services (6)

— — 189,134 ( 4,077 ) 185,057

15,719 — — — 15,719

Total 1,749,965 751,472 189,134 ( 7,704 ) 2,682,867

Revenue from leases (8)

1,375 — — — 1,375

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

Nine Months Ended September 30, 2022

Revenue from contracts with customers:

Broadcast Radio (1)

$ 1,362,601 $ — $ — $ — $ 1,362,601

372,329 — — — 372,329

Sponsorship and Events (3)

114,226 — — — 114,226

Digital, excluding Podcast (4)

— 475,254 — ( 3,959 ) 471,295

— 245,479 — — 245,479

Audio & Media Services (6)

— — 209,716 ( 4,006 ) 205,710

14,127 — — ( 447 ) 13,680

Total 1,863,283 720,733 209,716 ( 8,412 ) 2,785,320

Revenue from leases (8)

1,073 — — — 1,073

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

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

(3) Sponsorship and events revenue is generated through local events and major nationally-recognized tent pole events and include sponsorship and other advertising revenue, ticket sales, and licensing, as well as endorsement and appearance fees generated by on-air talent.

5 unchanged sentences

(8) Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Trade and Barter

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023

1 unchanged sentence

Trade and barter expenses 34,181 47,386

In addition to the trade and barter revenue in the table above, the Company recognized $ 9.7 million and $ 14.9 million during the three months ended September 30, 2023 and 2022, respectively, and $ 21.4 million and $ 27.2 million during the nine months ended September 30, 2023 and 2022, respectively, in connection with investments made in companies in exchange for advertising services.

In addition to the trade and barter revenue in the table above, the Company recognized $ 8.7 million and $ 8.0 million during the three months ended March 31, 2024 and 2023, respectively, in connection with investments made in companies in exchange for advertising services.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023

6 unchanged sentences

(1) Deferred revenue from contracts with customers, which excludes other sources of deferred revenue that are not related to contracts with customers, is included within deferred revenue and other long-term liabilities on the Consolidated Balance Sheets, depending upon when revenue is expected to be recognized.

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

however, as of September 30, 2023, the Company expects to recognize $ 313.5 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years .

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

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

however, as of March 31, 2024, the Company expects to recognize $ 253.1 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years .

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

Revenue from Leases

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

As of March 31, 2024, the future lease payments to be received by the Company are as follows:

(In thousands)

Thereafter 96

Total $ 1,205

NOTE 3 – LEASES

8 unchanged sentences

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

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

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

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

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

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

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

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

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

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

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

During the three months ended March 31, 2024, and 2023, we recognized non-cash impairment charges of $ 1.5 million and $ 3.9 million, respectively, due to changes in sublease assumptions for ROU assets related to certain operating leases for which management has made proactive decisions to abandon and sublease in connection with strategic actions to streamline the Company’s real estate footprint.

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

5 unchanged sentences

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

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2024 2023

1 unchanged sentence

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

37,736 153,866

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

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the three months ended March 31, 2024 and 2023, respectively.

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

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

The non-cash operating lease expense was $ 15.6 million and $ 18.1 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

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

Property, Plant and Equipment

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

(In thousands) September 30,

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

(In thousands) March 31,

2024 December 31,

7 unchanged sentences

Property, plant and equipment, net $ 529,114 $ 558,865

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

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

Indefinite-lived Intangible Assets

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

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

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

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.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Intangible Assets

2 unchanged sentences

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.

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

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

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

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

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

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.

(In thousands) March 31, 2024 December 31, 2023

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

4 unchanged sentences

Total $ 2,345,438 $ ( 1,234,202 ) $ 2,345,438 $ ( 1,172,228 )

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

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

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended March 31, 2024 and 2023 was $ 61.9 million and $ 61.8 million, respectively.

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

2 unchanged sentences

2025 $ 213,758

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Balance as of January 1, 2023 (1)

Balance as of December 31, 2023 (1)

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

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

Acquisitions — 3,375 — 3,375

Foreign currency — ( 73 ) ( 61 ) ( 134 )

Balance as of September 30, 2023

Balance as of March 31, 2024

$ 1,340,459 $ 311,353 $ 69,537 $ 1,721,349

(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

At least annually, the Company performs its impairment test for each reporting unit’s goodwill.

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

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

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

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

(1) Beginning goodwill balance is presented net of prior accumulated impairment losses of $ 1.3 billion related to our Multiplatform Group, $ 439.4 million related to our Digital Audio Group and $ 34.5 million related to our Audio & Media Services Group.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – LONG-TERM DEBT

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

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

Long-term debt outstanding for the Company consisted of the following:

(In thousands) March 31, 2024 December 31, 2023

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

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916,357 916,357

Other unsecured subsidiary debt — 52

Original issue discount ( 6,785 ) ( 7,558 )

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Total long-term debt $ 5,216,503 $ 5,214,810

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

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) As of March 31, 2024, the ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 23.2 million of outstanding letters of credit, resulting in $ 426.8 million of borrowing base availability.

(2) Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2025 through 2045.

(3) During the three months ended September 30, 2023, the Company repurchased $ 89.1 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 65.2 million in cash, excluding accrued interest, via open market transactions.

The repurchased notes were subsequently cancelled and retired, resulting in a gain on extinguishment of debt of $ 23.9 million.

During the nine months ended September 30, 2023, the Company repurchased $ 189.0 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 137.5 million in cash, excluding accrued interest, via open market transactions.

The repurchased notes were subsequently cancelled and retired, resulting in a gain on extinguishment of debt of $ 51.5 million.

During the three months ended September 30, 2022, the Company repurchased $ 75.0 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 68.1 million in cash, excluding accrued interest, via open market transactions.

The repurchased notes were subsequently cancelled and retired, resulting in a gain on extinguishment of debt of $ 6.9 million.

During the nine months ended September 30, 2022, the Company repurchased $ 188.5 million aggregate principal amount of iHeartCommunications Inc.'s 8.375 % Senior Unsecured Notes due 2027 for $ 173.4 million in cash, excluding accrued interest, via open market transactions.

The repurchased notes were subsequently cancelled and retired, resulting in a gain on extinguishment of debt of $ 15.1 million.

The Company’s weighted average interest rate was 7.3 % and 6.9 % as of September 30, 2023 and December 31, 2022, respectively.

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

The Company’s weighted average interest rate was 7.3 % as of March 31, 2024 and December 31, 2023.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 4.0 billion and $ 4.2 billion as of March 31, 2024 and December 31, 2023, respectively.

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

As of March 31, 2024, we were in compliance with all covenants related to our debt agreements.

On June 15, 2023, iHeartCommunications, Inc.

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Surety Bonds and Letters of Credit

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

As of March 31, 2024, the Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $ 10.1 million and $ 23.2 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.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – COMMITMENTS AND CONTINGENCIES

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On November 5, 2020, the FCC issued a declaratory ruling, which permits the Company to be up to 100 % foreign owned, subject to certain conditions (the "2020 Declaratory Ruling").

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – INCOME TAXES

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

The Company’s income tax benefit (expense) consisted of the following components:

(In thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

Current tax expense $ ( 3,418 ) $ ( 3,485 )

Deferred tax benefit (expense) 24,080 ( 72,620 )

Income tax benefit (expense) $ 20,662 $ ( 76,105 )

The effective tax rates for the three and nine months ended September 30, 2023 were 50.8 % and 2.6 %, respectively.

The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards, due to uncertainty regarding the Company’s ability to utilize those assets in future periods, as well as to impairment charges to non-deductible goodwill as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

The effective tax rates for the three and nine months ended September 30, 2022 were ( 4.5 )% and 1.4 %, respectively.

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

NOTE 8 – STOCKHOLDERS' EQUITY (DEFICIT)

The effective tax rates for the three months ended March 31, 2024 and 2023 were 53.3 % and ( 52.0 )%, respectively.

NOTE 8 – STOCKHOLDERS' DEFICIT

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

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

Share-based Compensation

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

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

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

The RSUs vest solely due to continued service over time.

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

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

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

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-based Compensation

Share-based compensation expenses are recorded in Selling, general and administrative expenses and were $ 8.5 million and $ 10.2 million for the three months ended March 31, 2024 and 2023, respectively.

The Company periodically issues restricted stock units ("RSUs") and performance-based RSUs ("Performance RSUs") to certain key employees, some of which are settled in cash.

The RSUs vest solely due to continued service over time.

The Performance RSUs generally vest upon the achievement of certain market goals, performance goals, and continued service.

On February 25, 2024, the Company issued RSUs and Performance RSUs to certain key employees.

The following table presents the Company's total share based compensation expense by award type for the three months ended March 31, 2024 and 2023:

(In thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

RSUs $ 4,926 $ 6,102

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Total Share Based Compensation Expense (1)

As of September 30, 2023, there was $ 36.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions.

This cost is expected to be recognized over a weighted average period of approximately 1.9 years.

In addition, as of September 30, 2023, there were unrecognized compensation costs of $ 22.3 million for the Performance RSUs related to unvested share-based compensation arrangements that will vest based on certain performance and service conditions.

These costs will be recognized over a 3-year or 50-month period from the date of issuance.

$ 8,480 $ 10,152

(1) Total share based compensation expense includes $ 0.5 million of expense from cash settled awards for the three months ended March 31, 2024

As of March 31, 2024, there was $ 51.3 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 at target.

Special Warrants

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

During the three and nine months ended September 30, 2023, there were 9,185 and 9,383 Special Warrants, respectively, exercised for shares of Class A common stock.

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

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

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

During the three months ended March 31, 2024, there were 58,534 Special Warrants exercised for shares of Class A common stock and none exercised for Class B common stock.

During the three months ended March 31, 2023, there were no Special Warrants exercised for shares of Class A or Class B common stock.

IHEARTMEDIA, INC.

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

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net loss attributable to the Company – common shares $ ( 18,508 ) $ ( 222,260 )

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Diluted ( 0.12 ) ( 1.50 )

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Company for the three and nine months ended September 30, 2023 and 2022.

(2) Outstanding equity service awards representing 14.6 million and 11.7 million shares of Class A common stock of the Company for the three months ended September 30, 2023 and 2022, respectively, and 13.3 million and 10.8 million for the nine months ended September 30, 2023 and 2022 respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Company for the three months ended March 31, 2024 and 2023.

(2) Outstanding equity service awards representing 15.8 million and 11.7 million shares of Class A common stock of the Company for the three months ended March 31, 2024 and 2023, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

NOTE 9 – SEGMENT DATA

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Three Months Ended September 30, 2023

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

Operating expenses (1)

463,939 173,565 45,003 69,295 ( 2,595 ) 749,207

Segment Adjusted EBITDA (2)

$ 162,444 $ 93,657 $ 16,976 $ ( 69,295 ) $ — $ 203,782

Depreciation and amortization ( 106,451 )

Impairment charges ( 570 )

Other operating expense, net ( 3,378 )

Restructuring expenses ( 16,227 )

Share-based compensation expense ( 8,191 )

Operating income $ 68,965

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

Capital expenditures 10,822 6,069 1,509 10,118 — 28,518

Share-based compensation expense — — — 8,191 — 8,191

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

Three Months Ended September 30, 2022

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

Operating expenses (1)

452,631 175,636 48,044 63,090 ( 2,713 ) 736,688

Segment Adjusted EBITDA (2)

$ 207,265 $ 78,317 $ 29,750 $ ( 63,090 ) $ — $ 252,242

Depreciation and amortization ( 109,305 )

Impairment charges ( 309,750 )

Other operating expense, net ( 9,451 )

Restructuring expenses ( 24,486 )

Share-based compensation expense ( 10,437 )

Operating loss $ ( 211,187 )

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

Capital expenditures 31,613 4,808 1,276 2,660 — 40,357

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

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the Company's segment results for the Company for the three months ended March 31, 2024 and 2023:

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

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Revenue $ 493,463 238,968 $ 69,168 $ — $ ( 2,561 ) $ 799,038

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

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Revenue $ 529,013 $ 223,396 $ 61,351 $ — $ ( 2,521 ) $ 811,239

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

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

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

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

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

What changed 10-Q

Item 1. Financial Statements