iHeartMedia, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) March 31, 2024 December 31, 2023 (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 361,403 $ 346,382 Accounts receivable, net of allowance of $ 37,742 in 2024 and $ 38,055 in 2023 878,353 1,041,214 Prepaid expenses 135,234 93,131 Other current assets 38,082 26,189 Total Current Assets 1,413,072 1,506,916 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net 529,114 558,865 INTANGIBLE ASSETS AND GOODWILL Indefinite-lived intangibles - licenses and other 1,114,479 1,113,979 Other intangibles, net 1,111,236 1,173,210 Goodwill 1,721,349 1,721,483 OTHER ASSETS Operating lease right-of-use assets 693,545 704,992 Other assets 175,517 173,166 Total Assets $ 6,758,312 $ 6,952,611 CURRENT LIABILITIES Accounts payable $ 215,410 $ 236,162 Current operating lease liabilities 73,775 73,832 Accrued expenses 196,110 317,575 Accrued interest 53,164 61,987 Deferred revenue 163,310 158,540 Current portion of long-term debt 289 340 Total Current Liabilities 702,058 848,436 Long-term debt 5,216,503 5,214,810 Noncurrent operating lease liabilities 749,365 762,820 Deferred income taxes 315,679 339,768 Other long-term liabilities 173,281 171,535 Commitments and contingent liabilities (Note 6) 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 and outstanding 124,416,225 and 124,299,288 shares in 2024 and 2023, respectively 125 125 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 21 21 Special Warrants, 5,043,336 and 5,101,870 issued and outstanding in 2024 and 2023, respectively — — Additional paid-in capital 2,955,043 2,947,096 Accumulated deficit ( 3,348,650 ) ( 3,330,142 ) Accumulated other comprehensive loss ( 1,347 ) ( 1,128 ) Cost of shares ( 999,647 in 2024 and 983,589 in 2023) held in treasury ( 10,166 ) ( 10,127 ) Total Stockholders' Deficit ( 398,574 ) ( 384,758 ) Total Liabilities and Stockholders' Deficit $ 6,758,312 $ 6,952,611 See Notes to Consolidated Financial Statements 1 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (In thousands, except per share data) Three Months Ended March 31, 2024 2023 Revenue $ 799,038 $ 811,239 Operating expenses: Direct operating expenses (excludes depreciation and amortization) 341,360 344,620 Selling, general and administrative expenses (excludes depreciation and amortization) 385,144 402,801 Depreciation and amortization 105,162 108,512 Impairment charges 1,508 3,947 Other operating expense, net 572 221 Operating loss ( 34,708 ) ( 48,862 ) Interest expense, net 95,515 95,457 Gain (loss) on investments, net 91,994 ( 6,505 ) Equity in earnings (loss) of nonconsolidated affiliates ( 45 ) 40 Gain on extinguishment of debt — 4,625 Other expense, net ( 496 ) ( 99 ) Loss before income taxes ( 38,770 ) ( 146,258 ) Income tax benefit (expense) 20,662 ( 76,105 ) Net loss ( 18,108 ) ( 222,363 ) Less amount attributable to noncontrolling interest 400 ( 103 ) Net loss attributable to the Company $ ( 18,508 ) $ ( 222,260 ) Other comprehensive loss, net of tax: Foreign currency translation adjustments ( 219 ) ( 46 ) Other comprehensive loss, net of tax ( 219 ) ( 46 ) Comprehensive loss ( 18,727 ) ( 222,306 ) Less amount attributable to noncontrolling interest — — Comprehensive loss attributable to the Company $ ( 18,727 ) $ ( 222,306 ) Net loss attributable to the Company per common share: Basic $ ( 0.12 ) $ ( 1.50 ) Weighted average common shares outstanding - Basic 149,795 148,365 Diluted $ ( 0.12 ) $ ( 1.50 ) Weighted average common shares outstanding - Diluted 149,795 148,365 See Notes to Consolidated Financial Statements 2 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) (In thousands, except share data) Controlling Interest Common Shares (1) Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Class A Shares Class B Shares Special Warrants Total Balances at December 31, 2023 124,299,288 21,347,363 5,101,870 $ 9,397 $ 146 $ 2,947,096 $ ( 3,330,142 ) $ ( 1,128 ) $ ( 10,127 ) $ ( 384,758 ) Net income (loss) 400 — — ( 18,508 ) — — ( 18,108 ) Vesting of restricted stock and other 57,653 — — — — — ( 39 ) ( 39 ) Share-based compensation — — 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 58,534 — ( 58,534 ) — — — — — — — Conversion of Class B Shares to Class A Shares 750 ( 750 ) — — — — — — — Other comprehensive loss — — — — ( 219 ) — ( 219 ) Balances at 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 ) (In thousands, except share data) Controlling Interest Common Shares (1) Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Class A Shares Class B Shares Special Warrants Total Balances at December 31, 2022 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 ( 103 ) — — ( 222,260 ) — — ( 222,363 ) Vesting of restricted stock and other 7,513 — — — — — ( 24 ) ( 24 ) Share-based compensation — — 10,152 — — — 10,152 Dividends declared and paid to noncontrolling interests ( 321 ) — — — — — ( 321 ) Conversion of Class B Shares to Class A Shares 7,262 ( 7,262 ) — — — — — — — Other comprehensive loss — — — — ( 46 ) — ( 46 ) Balances at 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 (1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2024, 2023 or 2022. See Notes to Consolidated Financial Statements 3 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 18,108 ) $ ( 222,363 ) Reconciling items: Impairment charges 1,508 3,947 Depreciation and amortization 105,162 108,512 Deferred taxes ( 24,080 ) 72,620 Provision for doubtful accounts 2,906 6,441 Amortization of deferred financing charges and note discounts, net 1,730 1,656 Share-based compensation 7,947 10,152 (Gain) Loss on disposal of operating and other assets 132 ( 278 ) (Gain) Loss on investments ( 91,994 ) 6,505 Equity in (earnings) loss of nonconsolidated affiliates 45 ( 40 ) Gain on extinguishment of debt — ( 4,625 ) Barter and trade income ( 8,749 ) ( 8,007 ) Other reconciling items, net 507 89 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Decrease in accounts receivable 153,799 94,759 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 ) Decrease in accrued expenses ( 122,864 ) ( 71,459 ) Decrease in accrued interest ( 8,823 ) ( 6,222 ) Increase in deferred revenue 8,260 16,829 Increase in other long-term liabilities ( 272 ) ( 759 ) 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 ) Change in other, net ( 1,808 ) 744 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 ) Cash used for financing activities ( 3,548 ) ( 15,938 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 169 ) 39 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 Cash, cash equivalents and restricted cash at end of period $ 361,403 $ 188,358 SUPPLEMENTAL DISCLOSURES: Cash paid for interest $ 105,863 $ 101,759 Cash paid for income taxes 1,033 3,160 See Notes to Consolidated Financial Statements 4 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 – BASIS OF PRESENTATION Preparation of Interim Financial Statements All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to iHeartMedia, Inc. and its consolidated subsidiaries. The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The Company reports based on three reportable segments: ▪ the Multiplatform Group, which includes the Company's Broadcast radio, Networks and Sponsorships and Events businesses; ▪ the Digital Audio Group, which includes all of the Company's Digital businesses, including Podcasting; and ▪ 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 consolidated financial statements include the accounts of the Company and its subsidiaries. Also included in the consolidated financial statements are entities for which the Company has a controlling interest or is the primary beneficiary. Investments in companies which the Company does not control but exercises significant influence over operating and financial policies of the company are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process. Economic Conditions 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. 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. Reclassifications Certain prior period amounts have been reclassified to conform to the 2024 presentation. Restricted Cash 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 From time to time, certain companies in which the Company holds minority equity interests, purchase advertising in the ordinary course. None of these ordinary course transactions have had a material impact on the Company. 5 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 months ended March 31, 2024 and 2023: (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated Three Months Ended March 31, 2024 Revenue from contracts with customers: Broadcast Radio (1) $ 359,338 $ — $ — $ — $ 359,338 Networks (2) 102,051 — — — 102,051 Sponsorship and Events (3) 27,829 — — — 27,829 Digital, excluding Podcast (4) — 148,344 — ( 1,185 ) 147,159 Podcast (5) — 90,624 — — 90,624 Audio & Media Services (6) — — 69,168 ( 1,376 ) 67,792 Other (7) 4,095 — — — 4,095 Total 493,313 238,968 69,168 ( 2,561 ) 798,888 Revenue from leases (8) 150 — — — 150 Revenue, total $ 493,463 $ 238,968 $ 69,168 $ ( 2,561 ) $ 799,038 Three Months Ended March 31, 2023 Revenue from contracts with customers: Broadcast Radio (1) $ 383,238 $ — $ — $ — $ 383,238 Networks (2) 107,954 — — — 107,954 Sponsorship and Events (3) 32,587 — — — 32,587 Digital, excluding Podcast (4) — 146,585 — ( 1,189 ) 145,396 Podcast (5) — 76,811 — — 76,811 Audio & Media Services (6) — — 61,351 ( 1,332 ) 60,019 Other (7) 4,924 — — — 4,924 Total 528,703 223,396 61,351 ( 2,521 ) 810,929 Revenue from leases (8) 310 310 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. 6 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (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. (4) Digital, excluding Podcast revenue is generated through the sale of streaming and display advertisements on digital platforms and through subscriptions to iHeartRadio streaming services. (5) Podcast revenue is generated through the sale of advertising on the Company's podcast network. (6) Audio & Media Services revenue is generated by services provided to broadcast industry participants through the Company’s Katz Media and RCS businesses. As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast software and media streaming, along with research services for radio stations, broadcast television stations, cable channels, record labels, ad agencies and Internet stations worldwide. (7) Other revenue represents fees earned for miscellaneous services, including on-site promotions, activations, and local marketing agreements. (8) Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases. Trade and Barter Trade and barter transactions represent the exchange of advertising spots for merchandise, services, advertising and promotion 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. The revenues and expenses may not be recognized in the same period depending on the timing of the services, advertising or promotion received in exchange for advertising spots. Trade and barter revenues and expenses, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows: Three Months Ended March 31, (In thousands) 2024 2023 Trade and barter revenues $ 41,305 $ 45,029 Trade and barter expenses 34,181 47,386 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 March 31, (In thousands) 2024 2023 Deferred revenue from contracts with customers: Beginning balance (1) $ 181,899 $ 157,910 Revenue recognized, included in beginning balance ( 73,928 ) ( 56,133 ) Additions, net of revenue recognized during period, and other 77,864 68,904 Ending balance $ 185,835 $ 170,681 (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. 7 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 March 31, 2024, the future lease payments to be received by the Company are as follows: (In thousands) 2024 $ 185 2025 132 2026 72 2027 30 2028 15 Thereafter — Total $ 434 NOTE 3 – LEASES The Company enters into operating lease contracts for land, buildings, structures and other equipment. Arrangements are evaluated at inception to determine whether such arrangements contain a lease. Operating leases primarily include land and building lease contracts and leases of radio towers. Arrangements to lease building space consist primarily of the rental of office space, but may also include leases of other equipment, including automobiles and copiers. Operating leases are reflected on the Company's balance sheet within Operating lease right-of-use assets ("ROU assets") and the related short-term and long-term liabilities are included within Current and Noncurrent operating lease liabilities, respectively. The Company's finance leases are included within Property, plant and equipment with the related liabilities included within Long-term debt. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term. The Company tests for impairment of assets whenever events and circumstances indicate that such assets might be impaired. 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. As such, the Company uses the incremental borrowing rate ("IBR") to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC 842, is "the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment." 8 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table provides supplemental cash flow information related to leases for the periods presented: Three Months Ended March 31, (In thousands) 2024 2023 Cash paid for amounts included in measurement of operating lease liabilities $ 37,293 $ 32,963 Lease liabilities arising from obtaining right-of-use assets (1) 5,751 4,821 (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 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: (In thousands) March 31, 2024 December 31, 2023 Land, buildings and improvements $ 319,589 $ 316,655 Towers, transmitters and studio equipment 197,895 195,609 Computer equipment and software 690,470 685,417 Furniture and other equipment 47,872 47,684 Construction in progress 18,321 16,473 1,274,147 1,261,838 Less: accumulated depreciation 745,033 702,973 Property, plant and equipment, net $ 529,114 $ 558,865 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. 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. 9 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 Customer / advertiser relationships $ 1,652,623 $ ( 842,639 ) $ 1,652,623 $ ( 800,377 ) Talent and other contracts 338,900 ( 214,143 ) 338,900 ( 203,479 ) Trademarks and tradenames 335,912 ( 164,963 ) 335,912 ( 156,468 ) Other 18,003 ( 12,457 ) 18,003 ( 11,904 ) 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 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. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets: (In thousands) 2025 $ 213,758 2026 201,512 2027 176,171 2028 160,395 2029 121,622 Goodwill 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 December 31, 2023 (1) $ 1,340,459 $ 311,426 $ 69,598 $ 1,721,483 Foreign currency — ( 73 ) ( 61 ) ( 134 ) 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 $ 1.3 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. 10 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 5 – LONG-TERM DEBT 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 Incremental Term Loan Facility due 2026 401,220 401,220 Asset-based Revolving Credit Facility due 2027 (1) — — 6.375 % Senior Secured Notes due 2026 800,000 800,000 5.25 % Senior Secured Notes due 2027 750,000 750,000 4.75 % Senior Secured Notes due 2028 500,000 500,000 Other secured subsidiary debt (2) 3,429 3,367 Total consolidated secured debt 4,318,681 4,318,619 8.375 % Senior Unsecured Notes due 2027 916,357 916,357 Original issue discount ( 6,785 ) ( 7,558 ) Long-term debt fees ( 11,461 ) ( 12,268 ) Total debt 5,216,792 5,215,150 Less: Current portion 289 340 Total long-term debt $ 5,216,503 $ 5,214,810 (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. 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. ("iHeartCommunications"), a wholly-owned subsidiary of iHeartMedia, entered into an amendment to the credit agreement governing its term loan credit facilities (the "Term Loan Facility"). The amendment replaces the prior Eurocurrency interest rate, based upon LIBOR, with the Secured Overnight Financing Rate (“SOFR”) successor rate plus a SOFR adjustment as specified in the credit agreement. The Term Loan Facility margins remain the same with the Term Loan Facility due 2026 containing margins of 3.00 % for Term SOFR Loans (as defined in the credit agreement) and 2.00 % for Base Rate Loans (as defined in the credit agreement), and the incremental Term Loan Facility due 2026 containing margins of 3.25 % for Term SOFR Loans with a floor of 0.50 % and 2.25 % for Base Rate Loans with a floor of 1.50 %. Surety Bonds and Letters of Credit 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. 11 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 6 – COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. 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. 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. Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial/contract disputes; defamation matters; employment and benefits related claims; intellectual property claims; real estate matters; governmental investigations; and tax disputes. 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. 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"). NOTE 7 – INCOME TAXES The Company’s income tax benefit (expense) consisted of the following components: (In thousands) Three Months Ended March 31, 2024 2023 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 months ended March 31, 2024 and 2023 were 53.3 % and ( 52.0 )%, 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. 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. On April 21, 2021, the 2021 Long-Term Incentive Award Plan (the “2021 Plan”) was approved by stockholders and replaced the 2019 Plan. 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. 12 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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. 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 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 March 31, 2024 2023 RSUs $ 4,926 $ 6,102 Performance RSUs 2,789 1,931 Options 765 2,119 Total Share Based Compensation Expense (1) $ 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 Each Special Warrant issued under the special warrant agreement entered into in connection with the Company's emergence from bankruptcy in 2019 may be exercised by its holder to purchase one share of Class A common stock or Class B common stock at an exercise price of $ 0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Company's outstanding Class A common stock, (b) more than 22.5 percent of the Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any other applicable foreign ownership threshold or (d) violation of any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC. 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. The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of a licensee’s equity, unless the FCC determines that greater indirect foreign ownership is in the public interest. 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 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. 13 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Computation of Loss per Share (In thousands, except per share data) Three Months Ended March 31, 2024 2023 NUMERATOR: Net loss attributable to the Company – common shares $ ( 18,508 ) $ ( 222,260 ) DENOMINATOR (1) : Weighted average common shares outstanding - basic 149,795 148,365 Stock options and restricted stock (2) : — — Weighted average common shares outstanding - diluted 149,795 148,365 Net loss attributable to the Company per common share: Basic $ ( 0.12 ) $ ( 1.50 ) 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 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 The Company’s primary businesses are included in its Multiplatform Group and Digital Audio Group segments. Revenue and expenses earned and charged between Multiplatform Group, Digital Audio Group, Audio & Media Services Group, and Corporate are eliminated in consolidation. The Multiplatform Group provides media and entertainment services via broadcast delivery and also includes the Company’s events and national syndication businesses. The Digital Audio Group provides media and entertainment services via digital delivery. The Audio & Media Services Group provides other audio and media services, including the Company’s media representation business (Katz Media) and its provider of scheduling and broadcast software (RCS). Corporate includes infrastructure and support, including executive, information technology, human resources, legal, finance and administrative functions for the Company’s businesses. Share-based payments are recorded in Selling, general and administrative expense. 14 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following tables present the Company's segment results for the Company for the three months ended March 31, 2024 and 2023: Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Three Months Ended March 31, 2024 Revenue $ 493,463 238,968 $ 69,168 $ — $ ( 2,561 ) $ 799,038 Operating expenses (1) 416,281 170,841 45,473 64,387 ( 2,561 ) 694,421 Segment Adjusted EBITDA (2) $ 77,182 $ 68,127 $ 23,695 $ ( 64,387 ) $ — $ 104,617 Depreciation and amortization ( 105,162 ) Impairment charges ( 1,508 ) Other operating expense, net ( 572 ) Restructuring expenses ( 23,603 ) Share-based compensation expense ( 8,480 ) Operating loss $ ( 34,708 ) Intersegment revenues $ — $ 1,185 $ 1,376 $ — $ — $ 2,561 Capital expenditures 11,704 5,427 2,257 2,194 — 21,582 Share-based compensation expense — — — 8,480 — 8,480 Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Three Months Ended March 31, 2023 Revenue $ 529,013 $ 223,396 $ 61,351 $ — $ ( 2,521 ) $ 811,239 Operating expenses (1) 441,961 169,277 46,007 63,091 ( 2,521 ) 717,815 Segment Adjusted EBITDA (2) $ 87,052 $ 54,119 $ 15,344 $ ( 63,091 ) $ — $ 93,424 Depreciation and amortization ( 108,512 ) Impairment charges ( 3,947 ) Other operating expense, net ( 221 ) Restructuring expenses ( 19,454 ) Share-based compensation expense ( 10,152 ) Operating loss $ ( 48,862 ) Intersegment revenues $ — $ 1,189 $ 1,332 $ — $ — $ 2,521 Capital expenditures 26,424 5,777 3,887 3,077 — 39,165 Share-based compensation expense — — — 10,152 — 10,152 (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 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. 15