What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 157 added, 144 removed, 372 unchanged (45% of the section changed)

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investments so we can provide the same ad-buying experience that once was only available from digital-only companies and enable our clients to better understand how our assets can successfully reach their target audiences.

Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions (“CPM”), which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service.

Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions, which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service.

In addition, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically priced the highest.

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Cost Savings Initiatives

During the first half of 2024, we implemented operating expense savings initiatives to change and streamline our organization, increase automation and use of technology, examine our sourcing strategies, and leverage our scale to drive greater efficiency.

In the first three quarters of 2024, we implemented operating expense savings initiatives to change and streamline our organization, increase automation and use of technology, examine our sourcing strategies, and leverage our scale to drive

greater efficiency.

We have incurred certain costs in connection with executing on these initiatives and we continue to explore opportunities for further efficiencies.

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

This challenging environment has led to broader market uncertainty, and has delayed our expected recovery and has had an adverse impact on our revenue and cash flows.

This challenging environment could have a significant impact on our financial results.

In addition, this economic uncertainty has had a significant impact on the trading values of our debt and equity securities for a sustained period.

This economic uncertainty has delayed our expected recovery and has had an adverse impact on the Company's revenues, cash flows, and the trading values of the Company's debt and equity securities for a sustained period.

This challenging environment could continue to have a significant impact on our financial results.

We therefore performed interim impairment tests as of June 30, 2024 on our indefinite-lived Federal Communication Commission ("FCC") licenses and goodwill.

The uncertainty surrounding the demand for advertising and the adverse impact on the trading values of our debt and equity securities impacted the key assumptions used in the models that are utilized to value our FCC licenses and goodwill.

As a result, the fair values of certain of our FCC licenses and reporting units have decreased.

Our 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.

We obtained the most recent broadcast radio industry revenue projections for use in our valuation model, as well as various other sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our 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 our interim testing, the estimated fair value of our FCC licenses was below their carrying values.

As a result, we recognized a non-cash impairment charge of $304.1 million on our FCC licenses.

The goodwill impairment test requires us to measure the fair value of our reporting units, which is compared to the carrying value of the reporting units, including goodwill.

Each of our 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 us to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on our 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 negatively impacted the trading values of our debt and equity securities and also impacted certain assumptions used to estimate the fair values of our reporting units for purposes of performing the interim goodwill impairment test.

Based on our valuation analysis, we determined that the estimated fair values of two of our reporting units were below their carrying values, including goodwill, which required us to recognize a non-cash impairment charge of $616.1 million to reduce our goodwill balance.

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our 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 our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.

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

We perform our annual impairment test on goodwill and indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year.

No impairment was required as part of the 2024 or 2023 annual impairment testing.

Executive Summary

Consolidated revenues for the second quarter of 2024 increased due to a continued increase in demand for digital advertising and increased political revenues as 2024 is a presidential election year, partially offset by lower spending on radio advertising as a result of continued uncertain market conditions.

Consolidated revenues for the third quarter of 2024 increased due to a continued increase in demand for digital advertising and increased political revenues as 2024 is a presidential election year, partially offset by lower spending on radio advertising as a result of continued uncertain market conditions.

The key developments that impacted our business during the quarter are summarized below:

• Consolidated Revenue of $929.1 million increased $9.1 million, or 1.0%, during the quarter ended June 30, 2024 compared to Consolidated Revenue of $920.0 million in the prior year's second quarter.

• Multiplatform Group Revenue decreased $20.0 million, or 3.4%, and Segment Adjusted EBITDA decreased $58.1 million, or 35.8%, compared to the prior year's second quarter, respectively.

• Digital Audio Group Revenue increased $24.8 million, or 9.5%, and Segment Adjusted EBITDA increased $7.3 million, or 8.6%, compared to the prior year's second quarter, respectively.

• Audio & Media Services Group Revenue increased $4.3 million, or 6.5%, and Segment Adjusted EBITDA increased $5.4 million, or 28.9%, compared to the prior year's second quarter, respectively.

• Operating loss of $909.7 million increased $12.5 million from $897.2 million in the prior year’s second quarter, primarily due to the increase in direct operating expense and SG&A expense as discussed further below, partially offset by the decrease in non-cash impairment charges of $920.2 million recognized in the second quarter of 2024 compared to the $960.6 million of non-cash impairment charges recognized in the prior year period.

The non-cash impairment charges primarily related to goodwill and FCC license impairments in both periods.

• Net loss of $982.0 million increased $99.0 million from $883.0 million in the prior year's second quarter, primarily due to a decrease in deferred tax benefits recorded in 2024 compared to the prior year period.

• Cash flows provided by operating activities of $26.7 million decreased from cash flow provided by operating activities of $56.8 million in the prior year's second quarter.

• Adjusted EBITDA (1) of $150.2 million, was down $41.0 million from $191.2 million in prior year's second quarter.

• Free cash flow (2) of $5.6 million decreased from $34.0 million in the prior year's second quarter.

• Consolidated Revenue of $1,008.1 million increased $55.1 million, or 5.8%, during the quarter ended September 30, 2024 compared to Consolidated Revenue of $953.0 million in the prior year's third quarter.

• Multiplatform Group Revenue decreased $6.8 million, or 1.1%, and Segment Adjusted EBITDA decreased $32.6 million, or 20.1%, compared to the prior year's third quarter, respectively.

• Digital Audio Group Revenue increased $33.8 million, or 12.7%, and Segment Adjusted EBITDA increased $6.3 million, or 6.8%, compared to the prior year's third quarter, respectively.

• Audio & Media Services Group Revenue increased $28.1 million, or 45.3%, and Segment Adjusted EBITDA increased $27.4 million, or 161.6%, compared to the prior year's third quarter, respectively, primarily driven by an increase in political revenue.

• Operating income of $76.7 million increased $7.7 million from $69.0 million in the prior year’s third quarter.

• Net loss of $41.3 million increased $32.3 million from $9.0 million in the prior year's third quarter.

• Cash flows provided by operating activities of $102.8 million increased from cash flow provided by operating activities of $96.2 million in the prior year's third quarter.

• Adjusted EBITDA (1) of $204.6 million, was up $0.8 million from $203.8 million in prior year's third quarter.

• Free cash flow (2) of $73.3 million increased from $67.7 million in the prior year's third quarter.

The table below presents a summary of our historical results of operations for the periods presented:

(In thousands) Three Months Ended

September 30,

Revenue $ 1,008,133 $ 952,989

Operating loss (909,667) (897,194)

Operating income 76,720 68,965

Net loss (41,325) (8,969)

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Free cash flow (2)

(1) For a definition of Adjusted EBITDA and a reconciliation to Operating loss, the most closely comparable U.S.

generally accepted accounting principles ("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 this MD&A.

(2) For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by (used for) operating activities to Free cash flow” in this MD&A.

73,345 67,651

(1) For a definition of Adjusted EBITDA and a reconciliation to Operating income, the most closely comparable U.S.

generally accepted accounting principles ("GAAP") measure, and to Net loss, please see "Reconciliation of Operating income to Adjusted EBITDA" and "Reconciliation of Net loss to EBITDA and Adjusted EBITDA" in this MD&A.

(2) For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free cash flow” in this MD&A.

Results of Operations

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(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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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

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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)

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

The table below presents the comparison of our revenue streams for the three and six months ended June 30, 2024 to the three and six months ended June 30, 2023:

The table below presents the comparison of our revenue streams for the three and nine months ended September 30, 2024 to the three and nine months ended September 30, 2023:

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

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Revenue, total $ 1,008,133 $ 952,989 5.8 % $ 2,736,263 $ 2,684,242 1.9 %

Consolidated results for the three and six months ended June 30, 2024 compared to the consolidated results for the three and six months ended June 30, 2023 were as follows:

Consolidated revenue increased $9.1 million during the three months ended June 30, 2024 compared to the same period of 2023.

Multiplatform Group revenue decreased $20.0 million, or 3.4%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenues and political revenues as 2024 is a presidential election year.

Digital Audio Group revenue increased $24.8 million, or 9.5%, driven primarily by continuing increases in demand for digital advertising.

Audio & Media Services revenue increased $4.3 million, or 6.5%, primarily as a result of higher political revenue.

Consolidated revenue decreased $3.1 million during the six months ended June 30, 2024 compared to the same period of 2023.

Multiplatform Group revenue decreased $55.6 million, or 4.9%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenues and political revenues as 2024 is a presidential election year.

Consolidated results for the three and nine months ended September 30, 2024 compared to the consolidated results for the three and nine months ended September 30, 2023 were as follows:

Consolidated revenue increased $55.1 million during the three months ended September 30, 2024 compared to the same period of 2023 primarily due to increases in Digital Audio Group revenue and political revenue as 2024 is a presidential election year.

Multiplatform Group revenue decreased $6.8 million, or 1.1%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by increases in political revenues and non-cash trade revenues.

Digital Audio Group revenue increased $33.8 million, or 12.7%, driven primarily by continuing increases in demand for digital advertising.

Audio & Media Services revenue increased $12.1 million, or 9.5%, primarily as a result of contract termination fees earned by Katz Media and due to higher political revenue.

Audio & Media Services revenue increased $28.1 million, or 45.3%, primarily as a result of higher political revenue and an increase in digital revenue.

Consolidated revenue increased $52.0 million during the nine months ended September 30, 2024 compared to the same period of 2023.

Multiplatform Group revenue decreased $62.4 million, or 3.6%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by increases in political revenues as 2024 is a presidential election year, and non-cash trade revenues.

Digital Audio Group revenue increased $74.2 million, or 9.9%, driven primarily by continuing increases in demand for digital advertising, including podcast.

Audio & Media Services revenue increased $40.2 million, or 21.2%, primarily as a result of higher political revenue, as well as digital revenue and contract termination fees earned by Katz Media.

Direct Operating Expenses

Consolidated direct operating expenses increased $27.0 million, or 7.6%, during the three months ended June 30, 2024 compared to the same period of 2023.

The increase was primarily driven by higher variable content costs, including higher profit sharing expenses and third-party digital costs related to the increase in digital revenues and an increase in music license fees, as well as an increase in event costs related to the timing of the iHeartRadio Music Awards which was in the second quarter of 2024 and the first quarter of 2023.

Consolidated direct operating expenses increased $23.7 million, or 3.4%, during the six months ended June 30, 2024 compared to the same period of 2023.

The increase was primarily driven by higher variable content costs, including higher profit sharing expenses and third-party digital costs related to the increase in digital revenues and an increase in broadcast music license fees, partially offset by lower broadcast profit sharing expense.

Consolidated direct operating expenses increased $29.7 million, or 7.8%, during the three months ended September 30, 2024 compared to the same period of 2023.

The increase was primarily driven by higher variable content costs, including higher third-party digital costs and podcast profit sharing expenses related to the increase in digital revenues.

Consolidated direct operating expenses increased $53.5 million, or 5.0%, during the nine months ended September 30, 2024 compared to the same period of 2023.

The increase was primarily driven by higher variable content costs, including higher podcast profit sharing expenses and third-party digital costs related to the increase in digital revenues.

Selling, General and Administrative (“SG&A”) Expenses

Consolidated SG&A expenses increased $37.8 million, or 9.6%, during the three months ended June 30, 2024 compared to the same period of 2023.

The increase was driven primarily by higher non-cash trade expense due to the timing of the iHeartRadio Music Awards which was in the second quarter of 2024 and the first quarter of 2023 and an increase in costs incurred in connection with executing on our cost savings initiatives, partially offset by lower bad debt expense and lower bonus expense based on results.

Consolidated SG&A expenses increased $20.2 million, or 2.5%, during the six months ended June 30, 2024 compared to the same period of 2023.

The increase was driven primarily by an increase in certain costs incurred in connection with executing on our cost savings initiatives and higher non-cash trade and barter expense primarily related to the 2024 iHeartRadio Music Awards, partially offset by lower bonus expense based on results.

Consolidated SG&A expenses increased $25.2 million, or 6.4%, during the three months ended September 30, 2024 compared to the same period of 2023.

The increase was driven primarily by higher non-cash trade expense related to the 2024 Summer Olympics and the 2024 iHeartRadio Music Festival and an increase in costs incurred in connection with executing on our cost savings initiatives.

Consolidated SG&A expenses increased $45.4 million, or 3.8%, during the nine months ended September 30, 2024 compared to the same period of 2023.

The increase was driven primarily by higher non-cash trade expense related to the 2024 iHeartRadio Music Awards, the 2024 Summer Olympics, and the 2024 iHeartRadio Music Festival, as well as an increase in certain costs incurred in connection with executing on our cost savings initiatives, partially offset by lower bonus expense based on results and lower bad debt expense.

Depreciation and Amortization

Depreciation and amortization decreased $3.7 million and $7.1 million during the three and six months ended June 30, 2024 compared to the same periods of 2023, respectively, primarily as a result of a lower fixed asset base due to properties sold in 2022 and 2023 in connection with our real estate optimization initiatives.

Depreciation and amortization decreased $5.1 million and $12.2 million during the three and nine months ended September 30, 2024 compared to the same periods of 2023, respectively, primarily as a result of a lower fixed asset base due to lower levels of capital expenditures.

Impairment Charges

During the three months ended June 30, 2024 and 2023, we recorded non-cash impairment charges of $920.2 million and $960.6 million, respectively, primarily to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values.

During the six months ended June 30, 2024 and 2023, we recorded non-cash impairment charges of $921.7 million and $964.5 million, respectively, primarily to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values.

During the nine months ended September 30, 2024 and 2023, we recorded non-cash impairment charges of $922.1 million and $965.1 million, respectively, primarily to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values as a result of the interim impairment assessments performed in the second quarter of 2024 and 2023, respectively.

The impairment charges resulted from the economic uncertainty due to inflation and higher interest rates that has had an adverse impact on our results and has resulted in a significant decrease in the trading values of our debt and equity securities for a sustained period.

See Note 4 , Property, Plant and Equipment, Intangible Assets and Goodwill , to the consolidated financial statements located in Item 1 of this Quarterly Report on Form 10-Q for a further description of the impairment charges.

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

No impairment was required as part of the 2024 or 2023 annual impairment tests for our goodwill or FCC licenses.

Interest Expense, net

Interest expense decreased $3.1 million during the three and six months ended June 30, 2024 compared to the same periods of 2023, primarily as a result of the lower outstanding aggregate principal of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 due to the repurchases of $204.0 million of the notes for $147.3 million in cash made during 2023, partially offset by the increase in floating borrowing rates.

Interest expense decreased $3.8 million and $6.9 million during the three and nine months ended September 30, 2024 compared to the same periods of 2023 primarily as a result of the lower outstanding aggregate principal of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 due to the repurchases of $204.0 million of the notes for $147.3 million in cash during 2023.

Gain (Loss) on Investments, Net

During the three months ended June 30, 2024, we recogn ized a loss on investments, net of $0.4 million, related to declines in the value of our investments.

During the six months ended June 30, 2024, we recognized a gain on investments, net of $91.6 million, primarily due to the $101.4 million gain recognized on the sale of our investment in BMI in the first quarter of 2024, partially offset by declines in the value of certain investments.

During the three and six months ended June 30, 2023, we recogn ized a loss on in vestments, net of $6.0 million and $12.5 million, respectively, related to declines in the value of our investments.

During the nine months ended September 30, 2024, we recognized a gain on investments, net of $91.5 million, primarily due to the $101.4 million gain recognized on the sale of our investment in Broadcast Music, Inc.

("BMI") in the first quarter of 2024, partially offset by declines in the value of certain investments.

During the three and nine months ended September 30, 2023, we recogn ized a loss on in vestments, net of $7.4 million and $19.9 million, respectively, related to declines in the value of certain investments.

Gain on Extinguishment of Debt

During the three months ended June 30, 2023, we recognized a gain on extinguishment of debt of $22.9 million in connection with the open market repurchases of $79.9 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $57.0 million in cash.

During the six months ended June 30, 2023, we recognized a gain on extinguishment of debt of $27.5 million in connection with the open market repurchases of $99.9 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $72.4 million in cash.

There were no repurchases during the three and six months ended June 30, 2024.

Income Tax Benefit

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 recorded during the second quarter, as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and 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.

During the three months ended September 30, 2023, we recognized a gain on extinguishment of debt of $23.9 million in connection with the open market repurchases of $89.1 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $65.2 million in cash.

During the nine months ended September 30, 2023, we recognized a gain on extinguishment of debt of $51.5 million in connection with the open market repurchases of $189.0 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $137.5 million in cash.

There were no repurchases during the three and nine months ended September 30, 2024.

Income Tax Benefit (Expense)

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 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 2024, as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .

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 in the second quarter of 2023.

Net Loss Attributable to the Company

Net loss attributable to the Company of $981.7 million during the three months ended June 30, 2024 reflected an increase of $97.2 million compared to Net loss attributable to the Company of $884.5 million during the three months ended June 30, 2023, primarily due to a decrease in deferred tax benefits recorded in 2024 compared to the prior year period.

Net loss attributable to the Company of $1,000.2 million during the six months ended June 30, 2024 reflected a decrease of $106.5 million compared to Net loss attributable to the Company of $1,106.7 million during the six months ended June 30, 2023, primarily due to the non-cash impairment charges of $921.7 million recognized in 2024 compared to the $964.5 million recognized in the prior year period.

Net loss attributable to the Company of $41.3 million during the three months ended September 30, 2024 reflected an increase of $32.2 million compared to Net loss attributable to the Company of $9.1 million during the three months ended September 30, 2023, primarily due to changes in the valuation allowances recorded against certain deferred tax assets as discussed above.

Net loss attributable to the Company of $1,041.4 million during the nine months ended September 30, 2024 reflected an improvement of $74.4 million compared to Net loss attributable to the Company of $1,115.8 million during the nine months ended September 30, 2023, primarily due to the $101.4 million gain recognized on the sale of our investment in BMI in the first quarter of 2024.

Multiplatform Group Results

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

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(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.

Revenue from our Multiplatform Group decreased $20.0 million compared to the prior year primarily due to a decrease in broadcast and networks advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenue and political revenues.

Broadcast revenue declined $3.7 million, or 0.9%, year-over-year, driven by lower spot revenue, partially offset by an increase in non-cash trade revenues and political advertising.

Networks declined $15.6 million, or 12.8%, year-over-year due primarily to the impact of non-returning advertisers.

Revenue from our Multiplatform Group decreased $6.8 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in political revenues and non-cash trade revenue.

Broadcast revenue declined $6.3 million, or 1.4%, year-over-year, driven by lower spot revenue, partially offset by an increase in political advertising and non-cash trade revenues.

Networks declined $1.0 million, or 0.9%, year-over-year.

Revenue from Sponsorship and Events increased $0.8 million, or 1.7%, year-over-year.

Operating expenses increased $38.1 million, driven primarily by higher non-cash trade expense and live event costs due to the timing of the iHeartRadio Music Awards which was in the second quarter of 2024 and the first quarter of 2023 and higher broadcast music license fees.

Revenue from our Multiplatform Group decreased $55.6 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenue and political revenues.

Operating expenses increased $25.7 million, driven primarily by higher non-cash trade expense related to the 2024 Summer Olympics and the 2024 iHeartRadio Music Festival, an increase in broadcast music license fees, and an increase in tower rent as a result of the tower sale leaseback transaction completed at the end of the third quarter of 2023.

Revenue from our Multiplatform Group decreased $62.4 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in political and non-cash trade revenues.

Broadcast revenue declined $33.9 million, or 2.7%, year-over-year, driven by lower spot revenue, partially offset by an increase in political advertising and non-cash trade revenues.

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Revenue from Sponsorship and Events decreased $3.0 million, or 2.5%, year-over-year.

Operating expenses increased $12.4 million, driven primarily by higher non-cash trade expense related to the 2024 iHeartRadio Music Awards and higher broadcast music license fees, partially offset by lower bonus expense based on results.

Operating expenses increased $38.2 million, driven primarily by higher non-cash trade expense related to the 2024 Summer Olympics, the 2024 iHeartRadio Music Festival, and the 2024 iHeartRadio Music Awards, as well as higher broadcast music license fees, and an increase in tower rent as a result of the tower sale leaseback transaction completed at the end of the third quarter of 2023.

Digital Audio Group Results

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

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(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.

Revenue from our Digital Audio Group increased $24.8 million compared to the prior year, driven by Digital, excluding Podcast revenue, which grew $16.9 million, or 10.3% year-over-year, primarily due to an increase in demand for digital advertising, and Podcast revenue which increased by $7.8 million, or 8.1% year-over-year, primarily due to the continued increase in demand for podcasting from advertisers and higher non-cash trade revenue.

Operating expenses increased $17.5 million, primarily driven by higher variable content costs, including higher profit sharing agreements and third-party digital costs related to the increase in revenues.

Revenue from our Digital Audio Group increased $40.3 million compared to the prior year, driven by Podcast revenue which increased by $21.6 million, or 12.5% year-over-year, primarily due to a continued increase in demand for podcasting from advertisers, and Digital, excluding Podcast revenue, which increased $18.7 million, or 6.0% year-over-year, primarily due to an increase in demand for digital advertising, partially offset by a decrease in COVID-19 related advertisers.

Operating expenses increased $19.1 million, primarily driven by higher variable content costs, including higher third-party digital costs and profit sharing related to the increase in revenues, partially offset by lower compensation expense.

Revenue from our Digital Audio Group increased $33.8 million compared to the prior year, driven by Digital, excluding Podcast revenue, which grew $22.4 million, or 13.6% year-over-year, primarily due to an increase in demand for digital advertising, and Podcast revenue which increased by $11.4 million, or 11.1% year-over-year, primarily due to the continued increase in demand for podcasting from advertisers.

Operating expenses increased $27.5 million, primarily driven by higher variable content costs, including higher podcast profit sharing and third-party digital costs related to the increase in revenues.

Revenue from our Digital Audio Group increased $74.2 million compared to the prior year, driven by Digital, excluding Podcast revenue, which increased $41.1 million, or 8.7% year-over-year, primarily due to an increase in demand for digital advertising, partially offset by a decrease in COVID-19 related advertisers, and Podcast revenue which increased by $33.0 million, or 12.0% year-over-year, primarily due to a continued increase in demand for podcasting from advertisers.

Operating expenses increased $46.5 million, primarily driven by higher variable content costs, including higher podcast profit sharing and third-party digital costs related to the increase in revenues.

Audio & Media Services Group Results

(In thousands) Three Months Ended

June 30, % Six Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

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(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.

Revenue from our Audio & Media Services Group increased $4.3 million compared to the prior year period, primarily due to higher political revenue as 2024 is a presidential election year.

Operating expenses decreased $1.1 million, primarily as a result of a favorable shift in the sales mix toward services and a decrease in employee compensation expense.

Revenue from our Audio & Media Services Group increased $12.1 million compared to the prior year period primarily due to contract termination fees earned by Katz Media and higher political revenue as 2024 is a presidential election year.

Operating expenses decreased $1.6 million primarily as a result of a favorable shift in the sales mix toward services and a decrease in employee compensation expense.

Reconciliation of Operating loss to Adjusted EBITDA

Revenue from our Audio & Media Services Group increased $28.1 million compared to the prior year period, primarily due to higher political revenue as 2024 is a presidential election year and increased demand for digital advertising, partially offset by decreases in broadcast advertising.

Operating expenses increased $0.6 million, primarily driven by higher sales commissions related to the increased demand for digital advertising.

Revenue from our Audio & Media Services Group increased $40.2 million compared to the prior year period primarily due to higher political revenue as 2024 is a presidential election year as well as the increased demand for digital advertising and contract termination fees earned by Katz Media.

Operating expenses decreased $1.0 million primarily as a result of our cost savings initiatives, partially offset by higher sales commissions related to increased demand for digital advertising.

Reconciliation of Operating income (loss) to Adjusted EBITDA

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

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

Depreciation and amortization 101,331 106,451 310,849 323,028

Impairment charges 412 570 922,144 965,087

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

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

Restructuring expenses 16,767 16,227 67,928 46,469

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(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

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

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

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

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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

Equity in loss of nonconsolidated affiliates 2,587 3,514 2,693 3,518

Impairment charges 412 570 922,144 965,087

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

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

Restructuring expenses 16,767 16,227 67,928 46,469

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$ 204,585 $ 203,782 $ 459,409 $ 488,386

(1) We define Adjusted EBITDA as consolidated Operating loss adjusted to exclude restructuring expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations:

Depreciation and amortization, Impairment charges and Other operating (income) expense, net.

Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Income tax benefit, Interest expense, net, Depreciation and amortization, (Gain) loss on investments, net, Gain on extinguishment of debt, Other expense, net, Equity in loss of nonconsolidated affiliates, Impairment charges, Other operating (income) expense, net, Share-based compensation expense, and restructuring expenses.

(1) We define Adjusted EBITDA as consolidated Operating income (loss) adjusted to exclude restructuring expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations:

Depreciation and amortization, Impairment charges and Other operating expense.

Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Income tax (benefit) expense, Interest expense, net, Depreciation and amortization, (Gain) loss on investments, net, Gain on extinguishment of debt, Other (income) expense, net, Equity in loss of nonconsolidated affiliates, Impairment charges, Other operating expense, Share-based compensation expense, and restructuring expenses.

Restructuring expenses primarily include expenses incurred in connection with cost-saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle.

We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance.

This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management.

This measure is among the primary measures used by management for the planning

and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management.

We believe this measure is an important indicator of our operational strength and performance of our business because it provides a link between operational performance and operating income.

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We believe the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management.

believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates.

We believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates.

In addition, we believe this measure is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry.

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Because it excludes certain financial information compared with operating income and compared with consolidated net income (loss), the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded.

Reconciliation of Cash provided by (used for) operating activities to Free Cash Flow

Reconciliation of Cash provided by operating activities to Free Cash Flow

(In thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Cash provided by (used for) operating activities $ 26,729 $ 56,772 $ (32,548) $ (37,211)

Cash provided by operating activities $ 102,765 $ 96,169 $ 70,217 $ 58,958

Purchases of property, plant and equipment (29,420) (28,518) (72,174) (90,456)

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$ 73,345 $ 67,651 $ (1,957) $ (31,498)

(1) We define Free cash flow ("Free Cash Flow") as Cash provided by (used for) operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows.

(1) We define Free cash flow ("Free Cash Flow") as Cash provided by operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows.

We use Free Cash Flow, among other measures, to evaluate the Company’s liquidity and its ability to generate cash flow.

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Pursuant to our 2021 Plan, we may grant restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.

Share-based compensation expenses are recorded in SG&A expenses and were $7.2 million and $9.2 million for the three months ended June 30, 2024 and 2023, respectively.

Share-based compensation expenses were $15.7 million and $19.4 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, there was $44.8 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions.

Share-based compensation expenses are recorded in SG&A expenses and were $8.3 million and $8.2 million for the three months ended September 30, 2024 and 2023, respectively.

Share-based compensation expenses were $24.0 million and $27.6 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was $38.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions.

This cost is expected to be recognized over a weighted average period of approximately 1.6 years and assumes Performance RSUs will be fully earned at target.

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The following discussion highlights cash flow activities during the periods presented:

(In thousands) Six Months Ended

(In thousands) Nine Months Ended

September 30,

Cash provided by (used for):

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(1,957) (31,498)

(1) For a definition of Free Cash Flow and a reconciliation to Cash used for operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by (used for) operating activities to Free Cash Flow” in this MD&A.

(1) For a definition of Free Cash Flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free Cash Flow” in this MD&A.

Operating Activities

Cash used for operating activities was $32.5 million during the six months ended June 30, 2024 compared to $37.2 million during the six months ended June 30, 2023.

The improvement was primarily due to an improvement in the timing of receivable collections, largely offset by a decrease in revenue from our Multiplatform Group, and an increase in cash bonus payments in 2024 compared to 2023.

Cash provided by operating activities was $70.2 million during the nine months ended September 30, 2024 compared to $59.0 million during the nine months ended September 30, 2023.

The increase was primarily due to an improvement in the timing of receivable collections and timing of payable payments, largely offset by a decrease in revenue from our Multiplatform Group, and an increase in cash bonus payments in 2024 compared to 2023.

Investing Activities

Cash provided by investing activities of $55.9 million during the six months ended June 30, 2024 primarily reflects $101.4 million of proceeds received from the sale of our investment in BMI, partially offset by $42.8 million in cash used for capital expenditures.

Cash provided by investing activities of $23.5 million during the nine months ended September 30, 2024 primarily reflects $101.4 million of proceeds received from the sale of our investment in BMI, partially offset by $72.2 million in cash used for capital expenditures.

For capital expenditures during the period, we spent $38.2 million in our Multiplatform Group segment primarily related to our IT infrastructure and real estate optimization initiatives, $17.0 million in our Digital Audio Group segment primarily related to IT infrastructure, $5.8 million in our Audio & Media Services Group segment, primarily related to software, and $11.1 million in Corporate primarily related to equipment and software purchases.

Cash used for investing activities of $59.3 million during the six months ended June 30, 2023 primarily reflects $61.9 million in cash used for capital expenditures.

Cash used for investing activities of $40.0 million during the nine months ended September 30, 2023 primarily reflects $90.4 million in cash used for capital expenditures.

For capital expenditures during the period, we spent $52.1 million in our Multiplatform Group segment primarily related to our real estate optimization initiatives, $17.3 million in our Digital Audio Group segment primarily related to IT infrastructure, $6.3 million in our Audio & Media Services Group segment, primarily related to software, and $14.7 million in Corporate primarily related to equipment and software purchases.

This was partially offset by the proceeds from the disposal of assets, which mainly consisted of $45.3 million related to the sale of broadcast tower sites and related assets.

We are leasing back space on the broadcast towers and related assets under long-term operating leases.

Financing Activities

Cash used for financing activities totaled $4.8 million during the six months ended June 30, 2024 primarily due to distributions to noncontrolling interest holders .

Cash used for financing activities totaled $74.9 million during the six months ended June 30, 2023 primarily due to the repurchases of $99.9 million aggregate principal amount of our 8.375% Senior Unsecured Notes due 2027 for $72.4 million in cash, reflecting a discounted purchase price from the face value of the notes.

Cash used for financing activities totaled $8.4 million during the nine months ended September 30, 2024 primarily due to distributions to noncontrolling interest holders .

Cash used for financing activities totaled $142.0 million during the nine months ended September 30, 2023 primarily due to the repurchases of $189.0 million aggregate principal amount of our 8.375% Senior Unsecured Notes due 2027 for $137.5 million in cash, reflecting a discounted purchase price from the face value of the notes.

Sources of Liquidity and Anticipated Cash Requirements

Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $364.7 million as of June 30, 2024, cash flows from operations and borrowing capacity under our $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility").

As of June 30, 2024, iHeartCommunications had no amounts outstanding under the ABL Facility, a facility size of $450.0 million and $23.7 million in outstanding letters of credit, resulting in $426.3 million of borrowing base availability.

Our total available liquidity 1 as of June 30, 2024 was $791.0 million.

Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $431.8 million as of September 30, 2024, cash flows from operations and borrowing capacity under our $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (as amended from time to time, the "ABL Facility").

As of September 30, 2024, iHeartCommunications had no amounts outstanding under the ABL Facility, a facility size of $450.0 million and $23.7 million in outstanding letters of credit, resulting in $426.3 million of borrowing base availability.

Our total available liquidity 1 as of September 30, 2024 was $858.1 million.

In September 2023, we sold 122 of our broadcast tower sites and related assets for net proceeds of $45.3 million.

We simultaneously leased back space on 121 of the broadcast towers and related assets under long-term operating leases.

We regularly evaluate the impact of economic conditions on our business.

A challenging macroeconomic environment has led to market uncertainty which has continued to negatively impact 2024 revenues and cash flows.

For the six months ended June 30, 2024, our revenues increased compared to the six months ended June 30, 2023 primarily due to revenue growth in our Digital Audio Group, among other factors discussed in the Results of Operations section of the MD&A.

For the nine months ended September 30, 2024, our consolidated revenues increased compared to the nine months ended September 30, 2023 primarily due to revenue growth in our Digital Audio Group, as well as political revenue, partially offset by lower revenue in our Multiplatform Group, among other factors discussed in the Results of Operations section of the MD&A.

Although we cannot predict future economic conditions or the impact of any potential contraction of economic growth on our business, we believe that we have sufficient liquidity to continue to fund our operations for at least the next twelve months.

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These obligations impact our short-term and long-term liquidity and capital resource needs.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of June 30, 2024, while others are considered future commitments.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of September 30, 2024, while others are considered future commitments.

Our contractual obligations primarily consist of long-term debt and related interest payments, commitments under non-cancelable operating lease agreements, and employment and talent contracts.

In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2024 will be to fund our working capital and maintain operations, make interest and tax payments, fund capital expenditures, make voluntary debt repayments and pursue other strategic opportunities.

Assuming the current level of borrowings and interest rates in effect at June 30, 2024, we anticipate that we will have approximately $196.3 million of cash interest payments in the remainder of 2024 compared to $197.2 million of cash interest payments during the same period in 2023, primarily due to the lower outstanding debt balance as a result of the note repurchases in 2023, partially offset by an increase in floating interest rates.

Assuming the current level of borrowings and interest rates in effect at September 30, 2024, we anticipate that we will have approximately $85.4 million of cash interest payments in the remainder of 2024 compared to $88.5 million of cash interest payments during the same period in 2023, primarily due to lower interest rates on our floating rate.

Future increases in interest rates could have a significant impact on our cash interest payments.

We acknowledge the challenges posed by the market uncertainty as a result of global economic and geo-political conditions, current levels of interest rates, the continuing impact of inflation on consumer spending and in turn, advertising spend, and other macroeconomic trends.

We acknowledge the challenges posed by the market uncertainty as a result of global economic and geopolitical conditions, current levels of interest rates, the continuing impact of inflation on consumer spending and in turn, advertising spend, and other macroeconomic trends.

However, we remain confident in our business, our employees and our strategy.

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We expect from time to time to pursue other strategic opportunities such as acquisitions or disposals of certain businesses, which may or may not be material.

Transaction Support Agreement and Exchange Offer

On November 6, 2024, we entered into a Transaction Support Agreement (the “TSA”) with certain lenders and holders (or their managers, advisors, or sub-advisors) of iHeartCommunications' outstanding notes and term loans (collectively, the “Supporting Holders”).

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 our outstanding senior secured notes due 2027, 38% of the aggregate principal amount of our outstanding senior secured notes due 2028, 71% of the aggregate principal amount of our outstanding senior unsecured notes due 2027, and 92% of the aggregate principal amount of our outstanding term loans (collectively, the “Existing Debt”).

We 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.

1 Total available liquidity is defined as cash and cash equivalents plus available borrowings under the ABL Facility.

We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.

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.

Completion of either exchange transaction will result in a strengthened financial position, providing us with additional flexibility to execute on our strategy and business initiatives.

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, we also entered into an amendment to our 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.

We anticipate commencing the exchange offer in the near term.

The amount of anticipated cash payments will vary depending on the transaction structure and level of participation and will include partial cash consideration, accrued interest on participating debt, and transaction fees and expenses.

We estimate total cash payments to range from $250 million to $295 million.

Summary Debt Capital Structure

As of June 30, 2024 and December 31, 2023, we had the following debt outstanding, net of cash and cash equivalents:

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

As of September 30, 2024 and December 31, 2023, we had the following debt outstanding, net of cash and cash equivalents:

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

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

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Our ABL Facility contains a springing fixed charge coverage ratio that is effective if certain triggering events related to borrowing capacity under the ABL Facility occur.

As of June 30, 2024, no triggering event had occurred and, as a result, we were not required to comply with any fixed charge coverage ratio as of or for the period ended June 30, 2024.

As of September 30, 2024, no triggering event had occurred and, as a result, we were not required to comply with any fixed charge coverage ratio as of or for the period ended September 30, 2024.

Other than our ABL Facility, none of our long-term debt includes maintenance covenants that could trigger early repayment.

As of June 30, 2024, we were in compliance with all covenants related to our debt agreements.

As of September 30, 2024, we were in compliance with all covenants related to our debt agreements.

For additional information regarding our debt, refer to Note 5, Long-Term Debt .

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Pursuant to iHeartCommunications' material debt agreements, iHeartMedia Capital I, LLC ("Capital I"), the parent guarantor and a subsidiary of iHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of the material differences between iHeartMedia’s consolidated financial information, on the one hand, and the financial information of Capital I and its consolidated restricted subsidiaries, on the other hand.

Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the three and six months ended June 30, 2024, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period.

Further, as of June 30, 2024, we were in compliance with all covenants related to our debt agreements.

Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the three and nine months ended September 30, 2024, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period.

Further, as of September 30, 2024, we were in compliance with all covenants related to our debt agreements.

Commitments, Contingencies and Guarantees

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Accordingly, our earnings will be affected by changes in interest rates.

As of June 30, 2024, approximately 43% of our aggregate principal amount of long-term debt bore interest at floating rates.

Assuming the current level of borrowings and assuming a 100 bps change in floating interest rates, it is estimated that our interest expense for the six months ended June 30, 2024 would have changed by $11.5 million.

As of September 30, 2024, approximately 43% of our aggregate principal amount of long-term debt bore interest at floating rates.

Assuming the current level of borrowings and assuming a 100 bps change in floating interest rates, it is estimated that our interest expense for the nine months ended September 30, 2024 would have changed by $17.2 million.

In the event of an adverse change in interest rates, management may take actions to mitigate our exposure.

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This challenging environment has led to broader market uncertainty, and has delayed our expected recovery and has had an adverse impact on our revenue and cash flows.

This challenging environment could have a significant impact on our financial results.

This challenging environment has impacted and could further have a significant impact on our financial results.

In addition, the economic uncertainty has had a significant impact on the trading values of our debt and equity securities for a sustained period.

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The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf.

This report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, financial position and results of operations, macroeconomic trends including inflation, interest rates and potential recessionary indicators, our expected costs, savings and timing of our modernization initiatives and other capital and operating expense reduction initiatives, debt repurchases, our business plans, strategies and initiatives, benefits of acquisitions and dispositions, our expectations about certain markets and businesses, expected cash interest payments, future impairment charges and our anticipated financial performance and liquidity.

This report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, financial position and results of operations, macroeconomic trends including inflation, interest rates and potential recessionary indicators, our expected costs, savings and timing of our modernization initiatives and other capital and operating expense reduction initiatives, the consummation of the transactions contemplated by the TSA, debt repurchases, our business plans, strategies and initiatives, benefits of acquisitions and dispositions, our expectations about certain markets and businesses, expected cash interest payments, future impairment charges and our anticipated financial performance and liquidity.

Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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• shifts in population and other demographics;

• the impact of our substantial indebtedness;

• the impact of our substantial indebtedness and our ability to consummate the transactions contemplated by the TSA on the timeline contemplated or at all, and our ability to realize the intended benefits thereof;

• the impact of acquisitions, dispositions and other strategic transactions;

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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 2. Management’s Discussion and Analysis