iHeartMedia, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) June 30, 2024 December 31, 2023 (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 364,744 $ 346,382 Accounts receivable, net of allowance of $ 43,220 in 2024 and $ 38,055 in 2023 898,496 1,041,214 Prepaid expenses 140,337 93,131 Other current assets 18,765 26,189 Total Current Assets 1,422,342 1,506,916 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net 511,302 558,865 INTANGIBLE ASSETS AND GOODWILL Indefinite-lived intangibles - licenses and other 810,340 1,113,979 Other intangibles, net 1,050,018 1,173,210 Goodwill 1,105,244 1,721,483 OTHER ASSETS Operating lease right-of-use assets 684,758 704,992 Other assets 185,164 173,166 Total Assets $ 5,769,168 $ 6,952,611 CURRENT LIABILITIES Accounts payable $ 222,115 $ 236,162 Current operating lease liabilities 72,567 73,832 Accrued expenses 221,443 317,575 Accrued interest 61,977 61,987 Deferred revenue 160,285 158,540 Current portion of long-term debt 621 340 Total Current Liabilities 739,008 848,436 Long-term debt 5,218,194 5,214,810 Noncurrent operating lease liabilities 737,270 762,820 Deferred income taxes 274,750 339,768 Other long-term liabilities 174,589 171,535 Commitments and contingent liabilities (Note 6) STOCKHOLDERS' DEFICIT Noncontrolling interest 5,683 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 126,905,933 and 124,299,288 shares in 2024 and 2023, respectively 127 125 Class B Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued and outstanding 21,344,390 and 21,347,363 shares in 2024 and 2023, respectively 21 21 Special Warrants, 5,043,307 and 5,101,870 issued and outstanding in 2024 and 2023, respectively — — Additional paid-in capital 2,962,275 2,947,096 Accumulated deficit ( 4,330,308 ) ( 3,330,142 ) Accumulated other comprehensive loss ( 1,596 ) ( 1,128 ) Cost of shares ( 1,518,459 in 2024 and 983,589 in 2023) held in treasury ( 10,845 ) ( 10,127 ) Total Stockholders' Deficit ( 1,374,643 ) ( 384,758 ) Total Liabilities and Stockholders' Deficit $ 5,769,168 $ 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenue $ 929,092 $ 920,014 $ 1,728,130 $ 1,731,253 Operating expenses: Direct operating expenses (excludes depreciation and amortization) 382,049 355,061 723,409 699,681 Selling, general and administrative expenses (excludes depreciation and amortization) 431,614 393,773 816,758 796,574 Depreciation and amortization 104,356 108,065 209,518 216,577 Impairment charges 920,224 960,570 921,732 964,517 Other operating (income) expense, net 516 ( 261 ) 1,088 ( 40 ) Operating loss ( 909,667 ) ( 897,194 ) ( 944,375 ) ( 946,056 ) Interest expense, net 95,577 98,693 191,092 194,150 Gain (loss) on investments, net ( 412 ) ( 6,038 ) 91,582 ( 12,543 ) Equity in loss of nonconsolidated affiliates ( 61 ) ( 44 ) ( 106 ) ( 4 ) Gain on extinguishment of debt — 22,902 — 27,527 Other expense, net ( 231 ) ( 272 ) ( 727 ) ( 371 ) Loss before income taxes ( 1,005,948 ) ( 979,339 ) ( 1,044,718 ) ( 1,125,597 ) Income tax benefit 23,959 96,357 44,621 20,252 Net loss ( 981,989 ) ( 882,982 ) ( 1,000,097 ) ( 1,105,345 ) Less amount attributable to noncontrolling interest ( 331 ) 1,488 69 1,385 Net loss attributable to the Company $ ( 981,658 ) $ ( 884,470 ) $ ( 1,000,166 ) $ ( 1,106,730 ) Other comprehensive loss, net of tax: Foreign currency translation adjustments ( 249 ) ( 77 ) ( 468 ) ( 123 ) Other comprehensive loss, net of tax ( 249 ) ( 77 ) ( 468 ) ( 123 ) Comprehensive loss ( 981,907 ) ( 884,547 ) ( 1,000,634 ) ( 1,106,853 ) Less amount attributable to noncontrolling interest — — — — Comprehensive loss attributable to the Company $ ( 981,907 ) $ ( 884,547 ) $ ( 1,000,634 ) $ ( 1,106,853 ) Net loss attributable to the Company per common share: Basic $ ( 6.50 ) $ ( 5.93 ) $ ( 6.65 ) $ ( 7.44 ) Weighted average common shares outstanding - Basic 151,137 149,179 150,466 148,774 Diluted $ ( 6.50 ) $ ( 5.93 ) $ ( 6.65 ) $ ( 7.44 ) Weighted average common shares outstanding - Diluted 151,137 149,179 150,466 148,774 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 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 ) Net loss ( 331 ) — — ( 981,658 ) — — ( 981,989 ) Vesting of restricted stock and other 2,487,456 — 2 ( 2 ) — — ( 679 ) ( 679 ) Share-based compensation — — 7,234 — — — 7,234 Dividend declared and paid to noncontrolling interests ( 386 ) — — — — — ( 386 ) Conversion of Special Warrants to Class A or Class B Shares 29 ( 29 ) — — — — — — — Conversion of Class B Shares to Class A Shares 2,223 ( 2,223 ) — — — — — — — Other comprehensive loss — — — — ( 249 ) — ( 249 ) Balances at June 30, 2024 126,905,933 21,344,390 5,043,307 $ 5,683 $ 148 $ 2,962,275 $ ( 4,330,308 ) $ ( 1,596 ) $ ( 10,845 ) $ ( 1,374,643 ) (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 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 Net income (loss) 1,488 — — ( 884,470 ) — — ( 882,982 ) Vesting of restricted stock and other 1,538,599 — 1 ( 1 ) — — ( 928 ) ( 928 ) Share-based compensation — — 8,947 — — — 8,947 Dividend declared and paid to noncontrolling interests ( 322 ) — — — — — ( 322 ) Conversion of Special Warrants to Class A and Class B Shares 198 59 ( 257 ) — — — — — — — Conversion of Class B Shares to Class A Shares 122,615 ( 122,615 ) — — — — — — — Other comprehensive loss — — — — ( 77 ) — ( 77 ) Balances at 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 ) (1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2024 or 2023. See Notes to Consolidated Financial Statements 3 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) 69 — — ( 1,000,166 ) — — ( 1,000,097 ) Vesting of restricted stock and other 2,545,109 — 2 ( 2 ) — — ( 718 ) ( 718 ) Share-based compensation — — 15,181 — — — 15,181 Dividends declared and paid to noncontrolling interests ( 3,783 ) — — — — — ( 3,783 ) Conversion of Special Warrants to Class A and Class B Shares 58,563 ( 58,563 ) — — — — — — — Conversion of Class B Shares to Class A Shares 2,973 ( 2,973 ) — — — — — — — Other comprehensive loss — — — — ( 468 ) — ( 468 ) Balances at June 30, 2024 126,905,933 21,344,390 5,043,307 $ 5,683 $ 148 $ 2,962,275 $ ( 4,330,308 ) $ ( 1,596 ) $ ( 10,845 ) $ ( 1,374,643 ) (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 income (loss) 1,385 — — ( 1,106,730 ) — — ( 1,105,345 ) Vesting of restricted stock and other 1,546,112 — 1 ( 1 ) — — ( 952 ) ( 952 ) Share-based compensation — — 19,099 — — — 19,099 Dividends declared and paid to noncontrolling interests ( 643 ) — — — — — ( 643 ) Conversion of Special Warrants to Class A and Class B Shares 198 59 ( 257 ) — — — — — — — Conversion of Class B Shares to Class A Shares 129,877 ( 129,877 ) — — — — — — — Other comprehensive loss — — — — ( 123 ) — ( 123 ) Balances at 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 ) (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 4 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net loss $ ( 1,000,097 ) $ ( 1,105,345 ) Reconciling items: Impairment charges 921,732 964,517 Depreciation and amortization 209,518 216,577 Deferred taxes ( 65,008 ) ( 58,898 ) Provision for doubtful accounts 11,590 18,565 Amortization of deferred financing charges and note discounts, net 3,478 3,331 Share-based compensation 15,181 19,099 (Gain) Loss on disposal of operating and other assets 406 ( 1,216 ) (Gain) Loss on investments ( 91,582 ) 12,543 Equity in loss of nonconsolidated affiliates 106 4 Gain on extinguishment of debt — ( 27,527 ) Barter and trade income ( 15,532 ) ( 11,728 ) Other reconciling items, net 768 199 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Decrease in accounts receivable 126,584 14,061 Increase in prepaid & other current assets ( 42,639 ) ( 54,641 ) (Increase) Decrease in other long-term assets 1,526 ( 2,447 ) Decrease in accounts payable ( 9,575 ) ( 40,518 ) Decrease in accrued expenses ( 97,427 ) ( 16,377 ) Decrease in accrued interest ( 10 ) ( 1,816 ) Increase (Decrease) in deferred revenue ( 1,281 ) 35,742 Decrease in other long-term liabilities ( 286 ) ( 1,336 ) Cash used for operating activities ( 32,548 ) ( 37,211 ) Cash flows from investing activities: Proceeds from sale of investments 101,756 — Purchases of property, plant and equipment ( 42,754 ) ( 61,938 ) Proceeds from disposal of assets 55 6,875 Change in other, net ( 3,186 ) ( 4,197 ) Cash provided by (used for) investing activities 55,871 ( 59,260 ) Cash flows from financing activities: Payments on long-term debt and credit facilities ( 314 ) ( 73,280 ) Dividends and other payments to noncontrolling interests ( 3,783 ) ( 643 ) Change in other, net ( 719 ) ( 952 ) Cash used for financing activities ( 4,816 ) ( 74,875 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 145 ) 10 Net increase (decrease) in cash, cash equivalents and restricted cash 18,362 ( 171,336 ) Cash, cash equivalents and restricted cash at beginning of period 346,382 336,661 Cash, cash equivalents and restricted cash at end of period $ 364,744 $ 165,325 SUPPLEMENTAL DISCLOSURES: Cash paid for interest $ 194,039 $ 195,482 Cash paid for income taxes 2,709 11,000 See Notes to Consolidated Financial Statements 5 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 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 and cash flows. The challenging environment has resulted in lower advertising spending by businesses and has delayed our expected recovery. In addition, this economic uncertainty has had a significant impact on the trading values of the Company's debt and equity securities for a sustained period. The Company therefore performed an interim impairment test as of June 30, 2024 on the goodwill recorded in its reporting units, as well as its indefinite-lived Federal Communication Commission ("FCC") licenses. The estimated fair values of the Company’s FCC licenses, which have indefinite lives, are based on broadcast industry information, including industry-wide projections. The factors discussed above negatively impacted certain assumptions in the discounted cash flow models used to value the Company's FCC licenses. The Company's June 30, 2024 testing indicated that the fair values of its FCC licenses were below their carrying values, which resulted in a non-cash impairment charge of $ 304.1 million. Based on the valuation analysis that the Company performed in connection with the interim goodwill impairment testing as of June 30, 2024, the Company determined that the estimated fair values of two of its reporting units were below their carrying values, including goodwill, which required the Company to recognize a non-cash impairment charge of $ 616.1 million to reduce the Company's goodwill balance. The Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its indefinite-lived FCC licenses and reporting units. It is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the impact of current market conditions, as well as the timing of any recovery. If the Company's actual results are not consistent with its estimates, the Company could be exposed to future impairment losses that could be material to its results of operations. 6 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) As of June 30, 2024, the Company had approximately $ 364.7 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 $ 23.7 million of outstanding letters of credit, resulting in $ 426.3 million of borrowing base availability. The Company's total available liquidity as of June 30, 2024 was $ 791.0 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 June 30, 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. 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. 7 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 – REVENUE Disaggregation of Revenue The following tables show revenue streams for the three and six months ended June 30, 2024 and 2023: (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated Three Months Ended June 30, 2024 Revenue from contracts with customers: Broadcast Radio (1) $ 425,490 $ — $ — $ — $ 425,490 Networks (2) 106,591 — — — 106,591 Sponsorship and Events (3) 39,121 — — — 39,121 Digital, excluding Podcast (4) — 181,093 — ( 1,175 ) 179,918 Podcast (5) — 104,521 — — 104,521 Audio & Media Services (6) — — 70,082 ( 1,336 ) 68,746 Other (7) 4,430 — — — 4,430 Total 575,632 285,614 70,082 ( 2,511 ) 928,817 Revenue from leases (8) 275 — — — 275 Revenue, total $ 575,907 $ 285,614 $ 70,082 $ ( 2,511 ) $ 929,092 Three Months Ended June 30, 2023 Revenue from contracts with customers: Broadcast Radio (1) $ 429,152 $ — $ — $ — $ 429,152 Networks (2) 122,168 — — — 122,168 Sponsorship and Events (3) 38,210 — — — 38,210 Digital, excluding Podcast (4) — 164,147 — ( 1,216 ) 162,931 Podcast (5) — 96,707 — — 96,707 Audio & Media Services (6) — — 65,804 ( 1,372 ) 64,432 Other (7) 5,585 — — — 5,585 Total 595,115 260,854 65,804 ( 2,588 ) 919,185 Revenue from leases (8) 829 — — — 829 Revenue, total $ 595,944 $ 260,854 $ 65,804 $ ( 2,588 ) $ 920,014 8 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated Six Months Ended June 30, 2024 Revenue from contracts with customers: Broadcast Radio (1) $ 784,828 $ — $ — $ — $ 784,828 Networks (2) 208,642 — — — 208,642 Sponsorship and Events (3) 66,950 — — — 66,950 Digital, excluding Podcast (4) — 329,437 — ( 2,360 ) 327,077 Podcast (5) — 195,145 — — 195,145 Audio & Media Services (6) — — 139,250 ( 2,712 ) 136,538 Other (7) 8,525 — — — 8,525 Total 1,068,945 524,582 139,250 ( 5,072 ) 1,727,705 Revenue from leases (8) 425 — — — 425 Revenue, total $ 1,069,370 $ 524,582 $ 139,250 $ ( 5,072 ) $ 1,728,130 Six Months Ended June 30, 2023 Revenue from contracts with customers: Broadcast Radio (1) $ 812,390 $ — $ — $ — $ 812,390 Networks (2) 230,122 — — — 230,122 Sponsorship and Events (3) 70,797 — — — 70,797 Digital, excluding Podcast (4) — 310,732 — ( 2,405 ) 308,327 Podcast (5) — 173,518 — — 173,518 Audio & Media Services (6) — — 127,155 ( 2,704 ) 124,451 Other (7) 10,509 — — — 10,509 Total 1,123,818 484,250 127,155 ( 5,109 ) 1,730,114 Revenue from leases (8) 1,139 — — — 1,139 Revenue, total $ 1,124,957 $ 484,250 $ 127,155 $ ( 5,109 ) $ 1,731,253 (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. (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. 9 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 June 30, Six Months Ended June 30, (In thousands) 2024 2023 2024 2023 Trade and barter revenues $ 69,277 $ 53,235 $ 110,582 $ 98,264 Trade and barter expenses 57,786 31,521 91,967 78,907 In addition to the trade and barter revenue in the table above, the Company recognized $ 6.8 million and $ 3.7 million during the three months ended June 30, 2024 and 2023, respectively, and $ 15.5 million and $ 11.7 million during the six months ended June 30, 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 June 30, Six Months Ended June 30, (In thousands) 2024 2023 2024 2023 Deferred revenue from contracts with customers: Beginning balance (1) $ 185,835 $ 170,681 $ 181,899 $ 157,910 Revenue recognized, included in beginning balance ( 69,378 ) ( 57,532 ) ( 100,826 ) ( 83,307 ) Additions, net of revenue recognized during period, and other 65,426 71,678 100,810 110,224 Ending balance $ 181,883 $ 184,827 $ 181,883 $ 184,827 (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 June 30, 2024, the Company expects to recognize $ 254.6 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. 10 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Revenue from Leases As of June 30, 2024, the future lease payments to be received by the Company are as follows: (In thousands) 2024 $ 144 2025 121 2026 82 2027 41 2028 25 Thereafter 5 Total $ 418 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 six months ended June 30, 2024, we recognized non-cash impairment charges of $ 1.5 million 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. There were no lease impairments recognized during the three months ended June 30, 2024. During the three and six months ended June 30, 2023, we recognized non-cash impairment charges of $ 1.5 million and $ 5.5 million, respectively, due to changes in sublease assumptions for ROU assets. 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." 11 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: Six Months Ended June 30, (In thousands) 2024 2023 Cash paid for amounts included in measurement of operating lease liabilities $ 75,069 $ 67,329 Lease liabilities arising from obtaining right-of-use assets (1) 13,022 7,280 (1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the six months ended June 30, 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 $ 15.9 million and $ 16.4 million for the three months ended June 30, 2024 and 2023, respectively. The non-cash operating lease expense was $ 31.5 million and $ 34.5 million for the six months ended June 30, 2024 and 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) June 30, 2024 December 31, 2023 Land, buildings and improvements $ 322,673 $ 316,655 Towers, transmitters and studio equipment 200,195 195,609 Computer equipment and software 700,699 685,417 Furniture and other equipment 48,929 47,684 Construction in progress 24,757 16,473 1,297,253 1,261,838 Less: accumulated depreciation 785,951 702,973 Property, plant and equipment, net $ 511,302 $ 558,865 Indefinite-lived Intangible Assets The Company’s indefinite-lived intangible assets primarily consist of 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, cash flows and trading values of the Company's debt and equity securities for a sustained period. The Company therefore performed an interim impairment test as of June 30, 2024 on its FCC licenses. The uncertainty surrounding the demand for advertising impacted the key industry assumptions used in the models that are utilized to value the Company's FCC licenses. As a result, the fair values of certain of the Company's FCC licenses have decreased. The Company's FCC licenses are valued using a direct valuation approach, with the key assumptions being market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, estimated start-up costs, and capital expenditures. This data is populated using industry normalized information representing an average asset within a market. The Company obtained the most recent broadcast radio industry revenue projections for use in the valuation model, as well as various other sources to analyze media and broadcast 12 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on the Company's FCC licenses as of June 30, 2024. Considerations in developing these assumptions included the expected impact on advertising revenues given the current market uncertainty, ranges of expected timing of recovery, discount rates and other factors. Based on the Company's interim testing, the estimated fair values of its FCC licenses were below their carrying values. As a result, the Company recognized a non-cash impairment charge of $ 304.1 million on its 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. 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 impairment testing, 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. (In thousands) June 30, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer / advertiser relationships $ 1,652,623 $ ( 884,218 ) $ 1,652,623 $ ( 800,377 ) Talent and other contracts 338,900 ( 224,731 ) 338,900 ( 203,479 ) Trademarks and tradenames 335,912 ( 173,460 ) 335,912 ( 156,468 ) Other 18,003 ( 13,011 ) 18,003 ( 11,904 ) Total $ 2,345,438 $ ( 1,295,420 ) $ 2,345,438 $ ( 1,172,228 ) Total amortization expense related to definite-lived intangible assets for the Company for the three months ended June 30, 2024 and 2023 was $ 61.2 million and $ 61.8 million, respectively. Total amortization expense related to definite-lived intangible assets for the Company for the six months ended June 30, 2024 and 2023 was $ 123.1 million and $ 123.6 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 13 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 Impairment ( 608,958 ) — ( 7,127 ) ( 616,085 ) Foreign currency — ( 73 ) ( 81 ) ( 154 ) Balance as of June 30, 2024 $ 731,501 $ 311,353 $ 62,390 $ 1,105,244 Cumulative Impairment $ 1,954,895 $ 439,383 $ 41,642 $ 2,435,920 (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. Goodwill Impairment As discussed above, the Company performs its impairment test for each reporting unit’s 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. 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 Company therefore performed an interim impairment test as of June 30, 2024 on its goodwill. The uncertainty surrounding the demand for advertising impacted the key assumptions used in the models which are utilized to value the Company's goodwill. The goodwill impairment test requires measurement of the fair value of the Company's reporting units, which is compared to the carrying value of the reporting units, including goodwill. Each of the Company's reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on the Company's budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and in management’s judgment in applying these factors. The economic environment resulting from inflation, higher interest rates, and the related uncertainty in the markets impacted the trading values of the Company's debt and equity securities and certain assumptions used to estimate the fair values of the Company's reporting units for purposes of performing the interim goodwill impairment test. Based on the Company's valuation analysis, it determined that the estimated fair values of two of its reporting units were below their carrying value, including goodwill, which required the Company to recognize a non-cash impairment charge of $ 616.1 million to reduce its goodwill balance. While the Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its other intangible assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the impact of current market conditions, as well as the timing of any recovery. If the Company's actual results are not consistent with its estimates, the Company could be exposed to future impairment losses that could be material to its results of operations. 14 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) June 30, 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) 3,159 3,367 Total consolidated secured debt 4,318,411 4,318,619 8.375 % Senior Unsecured Notes due 2027 916,357 916,357 Other unsecured subsidiary debt 694 — Original issue discount ( 6,003 ) ( 7,558 ) Long-term debt fees ( 10,644 ) ( 12,268 ) Total debt 5,218,815 5,215,150 Less: Current portion 621 340 Total long-term debt $ 5,218,194 $ 5,214,810 (1) As of June 30, 2024, the ABL Facility had a facility size of $ 450.0 million, no outstanding borrowings and $ 23.7 million of outstanding letters of credit, resulting in $ 426.3 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 June 30, 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 $ 3.4 billion and $ 4.2 billion as of June 30, 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 June 30, 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 June 30, 2024, the Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $ 8.9 million and $ 23.7 million, respectively. These surety bonds and letters of credit relate to various operational matters including insurance, lease and performance bonds as well as other items. 15 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 of 1934, as amended (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 consisted of the following components: (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Current tax expense $ ( 16,969 ) $ ( 35,161 ) $ ( 20,387 ) $ ( 38,646 ) Deferred tax benefit 40,928 131,518 65,008 58,898 Income tax benefit $ 23,959 $ 96,357 $ 44,621 $ 20,252 The effective tax rates for the Company for the three and six months ended June 30, 2024 were 2.4 % and 4.3 %, respectively. The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company’s ability to utilize those assets in future periods, as well as by impairment charges to non-deductible goodwill. The deferred tax benefit primarily consists of $ 77.3 million related to the FCC license impairment charges recorded during the second quarter of 2024. The deferred benefit was partially offset by deferred tax expense recorded for valuation allowances against certain deferred tax assets. The effective tax rates for the Company for the three and six months ended June 30, 2023 were 9.8 % and 1.8 %, respectively. The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company’s ability to utilize those assets in future periods, as well as by impairment charges to non-deductible goodwill. The deferred tax benefit primarily consists of $ 92.9 million related to the FCC license impairment charges recorded during the second quarter of 2023. 16 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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. Share-based Compensation Share-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Loss. 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 and six months ended June 30, 2024 and 2023: (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 RSUs $ 5,085 $ 5,536 $ 10,011 $ 11,638 Performance RSUs 1,412 2,300 4,201 4,232 Options 723 1,376 1,488 3,494 Total Share Based Compensation Expense (1) $ 7,220 $ 9,212 $ 15,700 $ 19,364 (1) Total share based compensation expense includes $ 0.5 million of expense from cash settled awards for the six months ended June 30, 2024. Share based compensation expense from cash settled awards was immaterial for the three months ended June 30, 2024. Total share based compensation expense includes $ 0.3 million of expense from cash settled awards for the three and six months ended June 30, 2023. As of June 30, 2024, there was $ 44.8 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 1.7 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 June 30, 2024 and 2023 there were 29 and 198 Special Warrants, respectively, exercised for shares of Class A common stock. During the three months ended June 30, 2023 there were 59 Special Warrants exercised for 17 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Class B common stock. There were no Special Warrants exercised for Class B common stock during the three months ended June 30, 2024. During the six months ended June 30, 2024 and 2023, there were 58,563 and 198 Special Warrants, respectively, exercised for shares of Class A common stock. During the six months ended June 30, 2023, there were 59 Special Warrants exercised for Class B common stock. There were no Special Warrants exercised for Class B common stock during the six months ended June 30, 2024. Computation of Loss per Share (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 NUMERATOR: Net loss attributable to the Company – common shares $ ( 981,658 ) $ ( 884,470 ) $ ( 1,000,166 ) $ ( 1,106,730 ) DENOMINATOR (1) : Weighted average common shares outstanding - basic 151,137 149,179 150,466 148,774 Stock options and restricted stock (2) : — — — — Weighted average common shares outstanding - diluted 151,137 149,179 150,466 148,774 Net loss attributable to the Company per common share: Basic $ ( 6.50 ) $ ( 5.93 ) $ ( 6.65 ) $ ( 7.44 ) Diluted $ ( 6.50 ) $ ( 5.93 ) $ ( 6.65 ) $ ( 7.44 ) (1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Company for the three and six months ended June 30, 2024 and 2023. (2) Outstanding equity service awards representing 15.1 million and 13.8 million shares of Class A common stock of the Company for the three months ended June 30, 2024 and 2023, respectively, and 15.5 million and 12.7 million for the six months ended June 30, 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. 18 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following tables present the Company's segment results: Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Three Months Ended June 30, 2024 Revenue $ 575,907 $ 285,614 $ 70,082 $ — $ ( 2,511 ) $ 929,092 Operating expenses (1) 471,644 193,744 46,233 69,775 ( 2,511 ) 778,885 Segment Adjusted EBITDA (2) $ 104,263 $ 91,870 $ 23,849 $ ( 69,775 ) $ — $ 150,207 Depreciation and amortization ( 104,356 ) Impairment charges ( 920,224 ) Other operating expense, net ( 516 ) Restructuring expenses ( 27,558 ) Share-based compensation expense ( 7,220 ) Operating loss $ ( 909,667 ) Intersegment revenues $ — $ 1,175 $ 1,336 $ — $ — $ 2,511 Capital expenditures 12,895 5,692 2,167 418 — 21,172 Share-based compensation expense — — — 7,220 — 7,220 Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Three Months Ended June 30, 2023 Revenue $ 595,944 $ 260,854 $ 65,804 $ — $ ( 2,588 ) $ 920,014 Operating expenses (1) 433,542 176,272 47,305 74,302 ( 2,588 ) 728,833 Segment Adjusted EBITDA (2) $ 162,402 $ 84,582 $ 18,499 $ ( 74,302 ) $ — $ 191,181 Depreciation and amortization ( 108,065 ) Impairment charges ( 960,570 ) Other operating income, net 261 Restructuring expenses ( 10,789 ) Share-based compensation expense ( 9,212 ) Operating loss $ ( 897,194 ) Intersegment revenues $ — $ 1,216 $ 1,372 $ — $ — $ 2,588 Capital expenditures 14,870 5,502 904 1,497 — 22,773 Share-based compensation expense — — — 9,212 — 9,212 19 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Six Months Ended June 30, 2024 Revenue $ 1,069,370 $ 524,582 $ 139,250 $ — $ ( 5,072 ) $ 1,728,130 Operating expenses (1) 887,925 364,585 91,706 134,162 ( 5,072 ) 1,473,306 Segment Adjusted EBITDA (2) $ 181,445 $ 159,997 $ 47,544 $ ( 134,162 ) $ — $ 254,824 Depreciation and amortization ( 209,518 ) Impairment charges ( 921,732 ) Other operating expense, net ( 1,088 ) Restructuring expenses ( 51,161 ) Share-based compensation expense ( 15,700 ) Operating loss $ ( 944,375 ) Intersegment revenues $ — $ 2,360 $ 2,712 $ — $ — $ 5,072 Capital expenditures 24,599 11,119 4,424 2,612 — 42,754 Share-based compensation expense 15,700 15,700 Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Six Months Ended June 30, 2023 Revenue $ 1,124,957 $ 484,250 $ 127,155 $ — $ ( 5,109 ) $ 1,731,253 Operating expenses (1) 875,503 345,549 93,312 137,393 ( 5,109 ) 1,446,648 Segment Adjusted EBITDA (2) $ 249,454 $ 138,701 $ 33,843 $ ( 137,393 ) $ — $ 284,605 Depreciation and amortization ( 216,577 ) Impairment charges ( 964,517 ) Other operating income, net 40 Restructuring expenses ( 30,243 ) Share-based compensation expense ( 19,364 ) Operating loss $ ( 946,056 ) Intersegment revenues $ — $ 2,405 $ 2,704 $ — $ — $ 5,109 Capital expenditures 41,294 11,279 4,791 4,574 — 61,938 Share-based compensation expense — — — 19,364 — 19,364 (1) Operating expenses consist of Direct operating expenses and SG&A expenses, excluding Restructuring expenses and share-based compensation expenses. (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. 20