What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 141 added, 139 removed, 590 unchanged (32% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

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

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

2024 December 31,

9 unchanged sentences

INTANGIBLE ASSETS AND GOODWILL

Indefinite-lived intangibles - licenses and other 810,340 1,113,979

Indefinite-lived intangibles - licenses 809,928 1,113,979

Other intangibles, net 988,800 1,173,210

33 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

5 unchanged sentences

Impairment charges 412 570 922,144 965,087

Other operating (income) expense, net 516 ( 261 ) 1,088 ( 40 )

Operating loss ( 909,667 ) ( 897,194 ) ( 944,375 ) ( 946,056 )

Other operating expense 1,092 3,378 2,180 3,338

Operating income (loss) 76,720 68,965 ( 867,655 ) ( 877,091 )

Interest expense, net 95,715 99,509 286,807 293,659

2 unchanged sentences

Gain on extinguishment of debt — 23,947 — 51,474

Other expense, net ( 231 ) ( 272 ) ( 727 ) ( 371 )

Other income (expense), net 1,195 ( 738 ) 468 ( 1,109 )

Loss before income taxes ( 20,490 ) ( 18,230 ) ( 1,065,208 ) ( 1,143,827 )

Income tax benefit 23,959 96,357 44,621 20,252

Income tax benefit (expense) ( 20,835 ) 9,261 23,786 29,513

Net loss ( 41,325 ) ( 8,969 ) ( 1,041,422 ) ( 1,114,314 )

1 unchanged sentence

Net loss attributable to the Company $ ( 41,265 ) $ ( 9,053 ) $ ( 1,041,431 ) $ ( 1,115,783 )

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 262 ( 332 ) ( 206 ) ( 455 )

Other comprehensive loss, net of tax ( 249 ) ( 77 ) ( 468 ) ( 123 )

Other comprehensive income (loss), net of tax 262 ( 332 ) ( 206 ) ( 455 )

Comprehensive loss ( 41,003 ) ( 9,385 ) ( 1,041,637 ) ( 1,116,238 )

18 unchanged sentences

Shares Special Warrants Total

March 31, 2024

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 )

7 unchanged sentences

58,476 ( 58,476 ) — — — — — — —

Other comprehensive loss — — — — ( 249 ) — ( 249 )

June 30, 2024

Other comprehensive income — — — — 262 — 262

September 30, 2024

127,344,725 21,285,914 5,039,323 $ 5,236 $ 149 $ 2,969,013 $ ( 4,371,573 ) $ ( 1,334 ) $ ( 10,912 ) $ ( 1,409,421 )

7 unchanged sentences

Shares Special Warrants Total

March 31, 2023

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 )

6 unchanged sentences

9,185 — ( 9,185 ) — — — — — — —

Conversion of Class B Shares to Class A Shares 122,615 ( 122,615 ) — — — — — — —

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

June 30, 2023

September 30, 2023

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

23 unchanged sentences

Other comprehensive loss — — — — ( 206 ) — ( 206 )

June 30, 2024

September 30, 2024

127,344,725 21,285,914 5,039,323 $ 5,236 $ 149 $ 2,969,013 $ ( 4,371,573 ) $ ( 1,334 ) $ ( 10,912 ) $ ( 1,409,421 )

18 unchanged sentences

Other comprehensive loss — — — — ( 455 ) — ( 455 )

June 30, 2023

September 30, 2023

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

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) Six Months Ended June 30,

(In thousands) Nine Months Ended September 30,

Cash flows from operating activities:

7 unchanged sentences

Share-based compensation 21,920 26,833

(Gain) Loss on disposal of operating and other assets 406 ( 1,216 )

Loss on disposal of operating and other assets 1,090 1,706

(Gain) Loss on investments ( 91,479 ) 19,924

6 unchanged sentences

Increase in prepaid & other current assets ( 46,938 ) ( 56,835 )

(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 other long-term assets 347 401

Increase (Decrease) in accounts payable 4,229 ( 60,748 )

Increase (Decrease) in accrued expenses ( 57,051 ) 43,107

Decrease in accrued interest ( 10,451 ) ( 11,539 )

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 )

Increase in deferred revenue 2,048 42,497

Increase (Decrease) in other long-term liabilities 529 ( 3,234 )

Cash provided by operating activities 70,217 58,958

Cash flows from investing activities:

46 unchanged sentences

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.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The June 30, 2024 testing resulted in non-cash impairment charges of $ 616.1 million and $ 304.1 million to reduce the goodwill and FCC license balances, respectively.

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

No impairment was required in the third quarter as part of the 2024 annual impairment testing.

As of September 30, 2024, the Company had approximately $ 431.8 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 September 30, 2024 was $ 858.1 million.

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

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Certain prior period amounts have been reclassified to conform to the 2024 presentation.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

As of September 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

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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.

The Company is currently evaluating the impact of this standard on our disclosures.

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

8 unchanged sentences

Disaggregation of Revenue

The following tables show revenue streams for the three and six months ended June 30, 2024 and 2023:

The following tables show revenue streams for the three and nine months ended September 30, 2024 and 2023:

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 619,544 $ 301,041 $ 90,050 $ ( 2,502 ) $ 1,008,133

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenue from contracts with customers:

18 unchanged sentences

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Revenue from contracts with customers:

14 unchanged sentences

Revenue, total $ 1,688,914 $ 825,623 $ 229,300 $ ( 7,574 ) $ 2,736,263

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenue from contracts with customers:

32 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023 2024 2023

1 unchanged sentence

Trade and barter expenses 67,243 49,995 159,210 128,902

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.

In addition to the trade and barter revenue in the table above, the Company recognized $ 13.3 million and $ 9.7 million during the three months ended September 30, 2024 and 2023, respectively, and $ 28.8 million and $ 21.4 million during the nine months ended September 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

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023 2024 2023

7 unchanged sentences

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 .

however, as of September 30, 2024, the Company expects to recognize $ 246.2 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.

3 unchanged sentences

Revenue from Leases

As of June 30, 2024, the future lease payments to be received by the Company are as follows:

As of September 30, 2024, the future lease payments to be received by the Company are as follows:

(In thousands)

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

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

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

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

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

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

During the 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.

During the nine months ended September 30, 2024, the Company 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 September 30, 2024.

During the three and nine months ended September 30, 2023, the Company recognized non-cash impairment charges of $ 0.6 million and $ 6.1 million, respectively, due to changes in sublease assumptions for ROU assets.

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

5 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2024 2023

1 unchanged sentence

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

(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.

15,542 37,736

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

The non-cash operating lease expense was $ 16.2 million and $ 16.4 million for the three months ended September 30, 2024 and 2023, respectively.

The non-cash operating lease expense was $ 47.7 million and $ 50.9 million for the nine months ended September 30, 2024 and 2023, respectively.

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

1 unchanged sentence

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

(In thousands) June 30,

(In thousands) September 30,

2024 December 31,

8 unchanged sentences

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.

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

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

In addition, the Company tests for impairment of 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

As a result, the Company performed an interim impairment test as of June 30, 2024 on its FCC licenses, which resulted in a non-cash impairment charge of $ 304.1 million in the second quarter of 2024.

No impairment was identified related to our FCC licenses as part of the 2024 annual impairment test performed during the third quarter of 2024.

IHEARTMEDIA, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

7 unchanged sentences

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

(In thousands) September 30, 2024 December 31, 2023

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

4 unchanged sentences

Total $ 2,345,438 $ ( 1,356,638 ) $ 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.

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended September 30, 2024 and 2023 was $ 61.2 million and $ 61.7 million, respectively.

Total amortization expense related to definite-lived intangible assets for the Company for the nine months ended September 30, 2024 and 2023 was $ 184.3 million and $ 185.3 million, respectively.

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

10 unchanged sentences

Foreign currency — ( 73 ) 22 ( 51 )

Balance as of June 30, 2024

Balance as of September 30, 2024

$ 731,501 $ 311,353 $ 62,493 $ 1,105,347

2 unchanged sentences

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 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.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As a result, the Company performed an interim impairment test as of June 30, 2024 on its goodwill, resulting in a non-cash impairment charge of $ 616.1 million in the second quarter of 2024.

No impairment was identified related to our goodwill balance as part of the 2024 annual impairment test performed during the third quarter of 2024.

NOTE 5 – LONG-TERM DEBT

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

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

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

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Total long-term debt $ 5,220,788 $ 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.

(1) As of September 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.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s weighted average interest rate was 7.1 % and 7.3 % as of September 30, 2024 and December 31, 2023, respectively.

The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $ 3.9 billion and $ 4.2 billion as of September 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.

As of September 30, 2024, the Company was in compliance with all covenants related to our debt agreements.

On June 15, 2023, iHeartCommunications, Inc.

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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 %.

As further described under Note 10, Subsequent Events , on November 6, 2024, the Company entered into a transaction support agreement (the "TSA") pursuant to which, among other transactions described in Note 10, certain lenders and holders (or their managers, advisors, or sub-advisors) of iHeartCommunications' outstanding notes and term loans (collectively, the "Supporting Holders") have agreed to the terms of, and to support, (i) exchange offer transactions that will be offered to all holders of the Company's Existing Debt (as defined in Note 10), consisting of two alternative exchange transaction structures, each of which will extend the maturity of the Existing Debt tendered in the exchange offer transactions by three years, and (ii) concurrent consent solicitations to amend certain provisions in the indentures and credit agreement governing the Existing Debt.

In the first transaction structure, if certain thresholds of holder participation are met, iHeartCommunications will issue new secured debt in exchange for the Existing Debt held by participating holders.

Alternatively, if certain thresholds of holder participation are not met, newly-formed subsidiaries of the Company holding certain transferred assets and an intercompany note (to be issued by iHeartMedia + Entertainment, Inc., a wholly owned subsidiary of iHeartCommunications) will issue new secured debt in exchange for the Existing Debt held by participating holders.

Concurrently with entry into the TSA and as further described under Note 10, the Company also entered into an amendment to the ABL Facility to, among other things, permit both exchange transaction alternative and other related transactions, amend certain provisions and increase the interest rate on the ABL Facility by (a) if the first transaction is consummated, 0.50 %, and (b) if the alternative transaction is consummated, 1.00 %.

Such amendments will become effective upon the satisfaction or waiver of certain conditions .

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.

As of September 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.

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NOTE 7 – INCOME TAXES

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

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

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Deferred tax benefit 2,231 48,191 67,239 107,089

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 deferred tax benefit primarily consists of $ 92.9 million related to the FCC license impairment charges recorded during the second quarter of 2023.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income tax benefit (expense) $ ( 20,835 ) $ 9,261 $ 23,786 $ 29,513

The effective tax rates for the Company for the three and nine months ended September 30, 2024 were ( 101.7 )% and 2.2 %, respectively.

The three month effective tax rate was primarily impacted by changes in the forecasted increase in valuation allowances recorded against certain deferred assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company's ability to utilize those assets in future periods.

The nine month effective tax rate was primarily impacted by impairment charges to non-deductible goodwill recorded during the second quarter of 2024, as discussed in Note 4, Property, Plant, and Equipment, Intangibles, and Goodwill as well as the valuation allowance changes noted above.

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

The three month effective tax rate was 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.

The nine month effective tax rate was primarily impacted by impairment charges to non-deductible goodwill recorded during the second quarter of 2023.

NOTE 8 – STOCKHOLDERS' DEFICIT

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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.

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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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:

The following table presents the Company's total share based compensation expense by award type:

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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$ 8,263 $ 8,191 $ 23,963 $ 27,555

(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.

(1) Total share based compensation expense includes $ 1.5 million and $ 2.0 million of expense from cash settled awards for the three and nine months ended September 30, 2024, respectively.

Total share based compensation expense includes $ 0.4 million and $ 0.7 million of expense from cash settled awards for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, there was $ 38.1 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 1.6 years and assumes Performance RSUs will be fully earned at target.

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

During the three 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

During the three months ended September 30, 2024 and 2023 there were 3,984 and 9,185 Special Warrants, respectively, exercised for shares of Class A common stock.

During the three months ended September 30, 2024 and 2023 there were no Special Warrants exercised for Class B common stock.

During the nine months ended September 30, 2024 and 2023, there were 62,547 and 9,383 Special Warrants, respectively, exercised for shares of Class A common stock.

During the nine months ended September 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 nine months ended September 30, 2024.

IHEARTMEDIA, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

During the three months ended September 30, 2024 and 2023 stockholders converted 58,476 and no shares, respectively, of the Class B common stock into Class A common stock.

During the nine months ended September 30, 2024 and 2023, stockholders converted 61,449 and 129,877 shares, respectively, of the Class B common stock into Class A common stock.

Computation of Loss per Share

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Diluted ( 0.27 ) ( 0.06 ) ( 6.90 ) ( 7.48 )

(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.

(1) All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Company for the three and nine months ended September 30, 2024 and 2023.

(2) Outstanding equity service awards representing 14.8 million and 14.6 million shares of Class A common stock of the Company for the three months ended September 30, 2024 and 2023, respectively, and 15.2 million and 13.3 million for the nine months ended September 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

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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.

IHEARTMEDIA, INC.

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Revenue $ 619,544 $ 301,041 $ 90,050 $ — $ ( 2,502 ) $ 1,008,133

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Share-based compensation expense ( 8,263 )

Operating loss $ ( 909,667 )

Operating income $ 76,720

Intersegment revenues $ — $ 1,189 $ 1,313 $ — $ — $ 2,502

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

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

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Impairment charges ( 570 )

Other operating income, net 261

Other operating expense, net ( 3,378 )

Restructuring expenses ( 16,227 )

Share-based compensation expense ( 8,191 )

Operating loss $ ( 897,194 )

Operating income $ 68,965

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

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Revenue $ 1,688,914 $ 825,623 $ 229,300 $ — $ ( 7,574 ) $ 2,736,263

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

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Impairment charges ( 965,087 )

Other operating income, net 40

Other operating expense, net ( 3,338 )

Restructuring expenses ( 46,469 )

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Share-based compensation expense — — — 27,555 — 27,555

(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.

(1) Operating expenses consist of Direct operating and SG&A expenses, excluding Restructuring and share-based compensation expenses.

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

IHEARTMEDIA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – SUBSEQUENT EVENTS

Transaction Support Agreement and Exchange Offer

On November 6, 2024, the Company entered into the TSA with the Supporting Holders of iHeartCommunications' outstanding notes and term loans.

The Supporting Holders represent approximately 77 % of the aggregate principal amount of iHeartCommunications’ outstanding senior secured notes due 2026, 79 % of the aggregate principal amount of its outstanding senior secured notes due 2027, 38 % of the aggregate principal amount of its outstanding senior secured notes due 2028, 71 % of the aggregate principal amount of its outstanding senior unsecured notes due 2027, and 92 % of the aggregate principal amount of its outstanding term loans (collectively, the “Existing Debt”).

The Company and the Supporting Holders have agreed to the terms of, and to support, (i) exchange offer transactions that will be offered to all holders of the Existing Debt, consisting of two alternative exchange transaction structures, each of which will extend the maturity of the Existing Debt tendered in the exchange offer transactions by three years , and (ii) concurrent consent solicitations to amend certain provisions in the indentures and credit agreement governing the Existing Debt.

Alternatively, if certain thresholds of holder participation are not met, newly-formed subsidiaries of the Company holding certain transferred assets and an intercompany note (to be issued by iHeartMedia + Entertainment, Inc.) will issue new secured debt in exchange for the Existing Debt held by participating holders.

The TSA may be terminated under various circumstances, including if the exchange offer transactions are not consummated on or before December 31, 2024, unless such date is extended pursuant to the terms of the TSA.

Concurrently with entry into the TSA, the Company also entered into an amendment to its ABL Facility (the “ABL Amendment”) to, among other things, permit both exchange transaction alternatives and other transactions related to the exchange, amend certain of the covenants, default provisions contained therein, and increase the interest rate on the ABL Facility by (a) if the first transaction is consummated, 0.50 %, and (b) if the alternative transaction is consummated, 1.00 %.

The amendments contained in the ABL Amendment will become effective upon the satisfaction or waiver of certain conditions, including the consummation of one of the transactions contemplated by the TSA.

The Company anticipates commencing the exchange offer in the near term.

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

What changed 10-Q

Item 1. Financial Statements