iHeartMedia, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) September 30, 2024 December 31, 2023 (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 431,764 $ 346,382 Accounts receivable, net of allowance of $ 40,479 in 2024 and $ 38,055 in 2023 894,468 1,041,214 Prepaid expenses 148,021 93,131 Other current assets 33,778 26,189 Total Current Assets 1,508,031 1,506,916 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net 500,171 558,865 INTANGIBLE ASSETS AND GOODWILL Indefinite-lived intangibles - licenses 809,928 1,113,979 Other intangibles, net 988,800 1,173,210 Goodwill 1,105,347 1,721,483 OTHER ASSETS Operating lease right-of-use assets 670,959 704,992 Other assets 195,774 173,166 Total Assets $ 5,779,010 $ 6,952,611 CURRENT LIABILITIES Accounts payable $ 235,756 $ 236,162 Current operating lease liabilities 70,360 73,832 Accrued expenses 258,685 317,575 Accrued interest 51,537 61,987 Deferred revenue 162,934 158,540 Current portion of long-term debt 1,059 340 Total Current Liabilities 780,331 848,436 Long-term debt 5,220,788 5,214,810 Noncurrent operating lease liabilities 721,734 762,820 Deferred income taxes 272,516 339,768 Other long-term liabilities 193,062 171,535 Commitments and contingent liabilities (Note 6) STOCKHOLDERS' DEFICIT Noncontrolling interest 5,236 9,397 Preferred stock, par value $ .001 per share, 100,000,000 shares authorized, no shares issued and outstanding — — Class A Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued and outstanding 127,344,725 and 124,299,288 shares in 2024 and 2023, respectively 128 125 Class B Common Stock, par value $ .001 per share, authorized 1,000,000,000 shares, issued and outstanding 21,285,914 and 21,347,363 shares in 2024 and 2023, respectively 21 21 Special Warrants, 5,039,323 and 5,101,870 issued and outstanding in 2024 and 2023, respectively — — Additional paid-in capital 2,969,013 2,947,096 Accumulated deficit ( 4,371,573 ) ( 3,330,142 ) Accumulated other comprehensive loss ( 1,334 ) ( 1,128 ) Cost of shares ( 1,567,688 in 2024 and 983,589 in 2023) held in treasury ( 10,912 ) ( 10,127 ) Total Stockholders' Deficit ( 1,409,421 ) ( 384,758 ) Total Liabilities and Stockholders' Deficit $ 5,779,010 $ 6,952,611 See Notes to Consolidated Financial Statements 1 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (In thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenue $ 1,008,133 $ 952,989 $ 2,736,263 $ 2,684,242 Operating expenses: Direct operating expenses (excludes depreciation and amortization) 409,745 379,997 1,133,154 1,079,678 Selling, general and administrative expenses (excludes depreciation and amortization) 418,833 393,628 1,235,591 1,190,202 Depreciation and amortization 101,331 106,451 310,849 323,028 Impairment charges 412 570 922,144 965,087 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 Gain (loss) on investments, net ( 103 ) ( 7,381 ) 91,479 ( 19,924 ) Equity in loss of nonconsolidated affiliates ( 2,587 ) ( 3,514 ) ( 2,693 ) ( 3,518 ) Gain on extinguishment of debt — 23,947 — 51,474 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 (expense) ( 20,835 ) 9,261 23,786 29,513 Net loss ( 41,325 ) ( 8,969 ) ( 1,041,422 ) ( 1,114,314 ) Less amount attributable to noncontrolling interest ( 60 ) 84 9 1,469 Net loss attributable to the Company $ ( 41,265 ) $ ( 9,053 ) $ ( 1,041,431 ) $ ( 1,115,783 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 262 ( 332 ) ( 206 ) ( 455 ) Other comprehensive income (loss), net of tax 262 ( 332 ) ( 206 ) ( 455 ) Comprehensive loss ( 41,003 ) ( 9,385 ) ( 1,041,637 ) ( 1,116,238 ) Less amount attributable to noncontrolling interest — — — — Comprehensive loss attributable to the Company $ ( 41,003 ) $ ( 9,385 ) $ ( 1,041,637 ) $ ( 1,116,238 ) Net loss attributable to the Company per common share: Basic $ ( 0.27 ) $ ( 0.06 ) $ ( 6.90 ) $ ( 7.48 ) Weighted average common shares outstanding - Basic 151,990 149,695 150,978 149,084 Diluted $ ( 0.27 ) $ ( 0.06 ) $ ( 6.90 ) $ ( 7.48 ) Weighted average common shares outstanding - Diluted 151,990 149,695 150,978 149,084 See Notes to Consolidated Financial Statements 2 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) (In thousands, except share data) Controlling Interest Common Shares (1) Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Class A Shares Class B Shares Special Warrants Total Balances at 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 ) Net loss ( 60 ) — — ( 41,265 ) — — ( 41,325 ) Vesting of restricted stock and other 376,332 — 1 ( 1 ) — — ( 67 ) ( 67 ) Share-based compensation — — 6,739 — — — 6,739 Dividend declared and paid to noncontrolling interests ( 387 ) — — — — — ( 387 ) Conversion of Special Warrants to Class A or Class B Shares 3,984 ( 3,984 ) — — — — — — — Conversion of Class B Shares to Class A Shares 58,476 ( 58,476 ) — — — — — — — Other comprehensive income — — — — 262 — 262 Balances at 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 ) (In thousands, except share data) Controlling Interest Common Shares (1) Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Class A Shares Class B Shares Special Warrants Total Balances at June 30, 2023 124,046,612 21,347,363 5,111,055 $ 10,351 $ 145 $ 2,931,598 $ ( 3,334,212 ) $ ( 1,454 ) $ ( 9,886 ) $ ( 403,458 ) Net income (loss) 84 — — ( 9,053 ) — — ( 8,969 ) Vesting of restricted stock and other 218,113 — 1 ( 1 ) — — ( 229 ) ( 229 ) Share-based compensation — — 7,734 — — — 7,734 Dividend declared and paid to noncontrolling interests ( 1,567 ) — — — — — ( 1,567 ) Conversion of Special Warrants to Class A and Class B Shares 9,185 — ( 9,185 ) — — — — — — — Other comprehensive loss — — — — ( 332 ) — ( 332 ) Balances at 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 ) (1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2024 or 2023. See Notes to Consolidated Financial Statements 3 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) (In thousands, except share data) Controlling Interest Common Shares (1) Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Class A Shares Class B Shares Special Warrants Total Balances at December 31, 2023 124,299,288 21,347,363 5,101,870 $ 9,397 $ 146 $ 2,947,096 $ ( 3,330,142 ) $ ( 1,128 ) $ ( 10,127 ) $ ( 384,758 ) Net income (loss) 9 — — ( 1,041,431 ) — — ( 1,041,422 ) Vesting of restricted stock and other 2,921,441 — 3 ( 3 ) — — ( 785 ) ( 785 ) Share-based compensation — — 21,920 — — — 21,920 Dividends declared and paid to noncontrolling interests ( 4,170 ) — — — — — ( 4,170 ) Conversion of Special Warrants to Class A and Class B Shares 62,547 ( 62,547 ) — — — — — — — Conversion of Class B Shares to Class A Shares 61,449 ( 61,449 ) — — — — — — — Other comprehensive loss — — — — ( 206 ) — ( 206 ) Balances at 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 ) (In thousands, except share data) Controlling Interest Common Shares (1) Non- controlling Interest Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Class A Shares Class B Shares Special Warrants Total Balances at December 31, 2022 122,370,425 21,477,181 5,111,312 $ 9,609 $ 144 $ 2,912,500 $ ( 2,227,482 ) $ ( 1,331 ) $ ( 8,934 ) $ 684,506 Net income (loss) 1,469 — — ( 1,115,783 ) — — ( 1,114,314 ) Vesting of restricted stock and other 1,764,225 — 2 ( 2 ) — — ( 1,181 ) ( 1,181 ) Share-based compensation — — 26,833 — — — 26,833 Dividends declared and paid to noncontrolling interests ( 2,210 ) — — — — — ( 2,210 ) Conversion of Special Warrants to Class A and Class B Shares 9,383 59 ( 9,442 ) — — — — — — — Conversion of Class B Shares to Class A Shares 129,877 ( 129,877 ) — — — — — — — Other comprehensive loss — — — — ( 455 ) — ( 455 ) Balances at 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 ) (1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2024, 2023 or 2022. See Notes to Consolidated Financial Statements 4 IHEARTMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Nine Months Ended September 30, 2024 2023 Cash flows from operating activities: Net loss $ ( 1,041,422 ) $ ( 1,114,314 ) Reconciling items: Impairment charges 922,144 965,087 Depreciation and amortization 310,849 323,028 Deferred taxes ( 67,239 ) ( 107,089 ) Provision for doubtful accounts 13,774 22,914 Amortization of deferred financing charges and note discounts, net 5,247 5,026 Share-based compensation 21,920 26,833 Loss on disposal of operating and other assets 1,090 1,706 (Gain) Loss on investments ( 91,479 ) 19,924 Equity in loss of nonconsolidated affiliates 2,693 3,518 Gain on extinguishment of debt — ( 51,474 ) Barter and trade income ( 28,779 ) ( 21,419 ) Other reconciling items, net 273 800 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Decrease in accounts receivable 128,433 30,769 Increase in prepaid & other current assets ( 46,938 ) ( 56,835 ) 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 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: Proceeds from sale of investments 101,756 3,106 Purchases of property, plant and equipment ( 72,174 ) ( 90,456 ) Proceeds from disposal of assets 254 54,101 Change in other, net ( 6,319 ) ( 6,742 ) Cash provided by (used for) investing activities 23,517 ( 39,991 ) Cash flows from financing activities: Payments on long-term debt and credit facilities ( 586 ) ( 138,565 ) Dividends and other payments to noncontrolling interests ( 4,170 ) ( 2,210 ) Change in other, net ( 3,687 ) ( 1,182 ) Cash used for financing activities ( 8,443 ) ( 141,957 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 91 ( 192 ) Net increase (decrease) in cash, cash equivalents and restricted cash 85,382 ( 123,182 ) Cash, cash equivalents and restricted cash at beginning of period 346,382 336,661 Cash, cash equivalents and restricted cash at end of period $ 431,764 $ 213,479 SUPPLEMENTAL DISCLOSURES: Cash paid for interest $ 301,900 $ 304,216 Cash paid for income taxes 3,675 13,254 See Notes to Consolidated Financial Statements 5 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 – BASIS OF PRESENTATION Preparation of Interim Financial Statements All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to iHeartMedia, Inc. and its consolidated subsidiaries. The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The Company reports based on three reportable segments: ▪ the Multiplatform Group, which includes the Company's Broadcast radio, Networks and Sponsorships and Events businesses; ▪ the Digital Audio Group, which includes all of the Company's Digital businesses, including Podcasting; and ▪ the Audio & Media Services Group, which includes Katz Media Group (“Katz Media”), a full-service media representation business, and RCS Sound Software ("RCS"), a provider of scheduling and broadcast software and services. The consolidated financial statements include the accounts of the Company and its subsidiaries. Also included in the consolidated financial statements are entities for which the Company has a controlling interest or is the primary beneficiary. Investments in companies which the Company does not control but exercises significant influence over operating and financial policies of the company are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process. Economic Conditions The Company's advertising revenue, cash flows, and cost of capital are impacted by changes in economic conditions. Higher interest rates and inflation have contributed to a challenging macroeconomic environment since 2022. This challenging environment has led to broader market uncertainty which has impacted the Company's revenues and cash flows. The current market uncertainty and macroeconomic conditions, a recession, or a downturn in the U.S. economy could have a significant impact on the Company's ability to generate revenue and cash flows. The challenging environment has resulted in lower advertising spending by businesses and has delayed our expected recovery. In addition, this economic uncertainty has had a significant impact on the trading values of the Company's debt and equity securities for a sustained period. The Company therefore performed an interim impairment test as of June 30, 2024 on the goodwill recorded in its reporting units, as well as its indefinite-lived Federal Communication Commission ("FCC") licenses. The 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. Reclassifications Certain prior period amounts have been reclassified to conform to the 2024 presentation. 6 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Restricted Cash 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 From time to time, certain companies in which the Company holds minority equity interests, purchase advertising in the ordinary course. None of these ordinary course transactions have had a material impact on the Company. New Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued Update 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”), an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and disclosure of expenses provided to the CODM that are included within the reported measure of segment profit or loss . The amendments of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and should be applied retrospectively to all periods presented. 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): Improvements to Income Tax Disclosures, which enhances the disclosure requirements for income tax rate reconciliation, domestic and foreign income taxes, and unrecognized tax benefits. The amendments of ASU 2023-09 are effective for annual periods beginning after December 15, 2024. Early adoption is permitted, and should be applied prospectively. We are currently evaluating the impact of this standard on our annual disclosures, including timing of adoption. 7 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 – REVENUE Disaggregation of Revenue The following tables show revenue streams for the three and nine months ended September 30, 2024 and 2023: (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated Three Months Ended September 30, 2024 Revenue from contracts with customers: Broadcast Radio (1) $ 448,808 $ — $ — $ — $ 448,808 Networks (2) 115,310 — — — 115,310 Sponsorship and Events (3) 50,329 — — — 50,329 Digital, excluding Podcast (4) — 186,996 — ( 1,189 ) 185,807 Podcast (5) — 114,045 — — 114,045 Audio & Media Services (6) — — 90,050 ( 1,313 ) 88,737 Other (7) 4,978 — — — 4,978 Total 619,425 301,041 90,050 ( 2,502 ) 1,008,014 Revenue from leases (8) 119 — — — 119 Revenue, total $ 619,544 $ 301,041 $ 90,050 $ ( 2,502 ) $ 1,008,133 Three Months Ended September 30, 2023 Revenue from contracts with customers: Broadcast Radio (1) $ 455,103 $ — $ — $ — $ 455,103 Networks (2) 116,334 — — — 116,334 Sponsorship and Events (3) 49,500 — — — 49,500 Digital, excluding Podcast (4) — 164,559 — ( 1,222 ) 163,337 Podcast (5) — 102,663 — — 102,663 Audio & Media Services (6) — — 61,979 ( 1,373 ) 60,606 Other (7) 5,210 — — — 5,210 Total 626,147 267,222 61,979 ( 2,595 ) 952,753 Revenue from leases (8) 236 — — — 236 Revenue, total $ 626,383 $ 267,222 $ 61,979 $ ( 2,595 ) $ 952,989 8 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Eliminations Consolidated Nine Months Ended September 30, 2024 Revenue from contracts with customers: Broadcast Radio (1) $ 1,233,636 $ — $ — $ — $ 1,233,636 Networks (2) 323,952 — — — 323,952 Sponsorship and Events (3) 117,279 — — — 117,279 Digital, excluding Podcast (4) — 516,433 — ( 3,549 ) 512,884 Podcast (5) — 309,190 — — 309,190 Audio & Media Services (6) — — 229,300 ( 4,025 ) 225,275 Other (7) 13,503 — — — 13,503 Total 1,688,370 825,623 229,300 ( 7,574 ) 2,735,719 Revenue from leases (8) 544 — — — 544 Revenue, total $ 1,688,914 $ 825,623 $ 229,300 $ ( 7,574 ) $ 2,736,263 Nine Months Ended September 30, 2023 Revenue from contracts with customers: Broadcast Radio (1) $ 1,267,493 $ — $ — $ — $ 1,267,493 Networks (2) 346,456 — — — 346,456 Sponsorship and Events (3) 120,297 — — — 120,297 Digital, excluding Podcast (4) — 475,291 — ( 3,627 ) 471,664 Podcast (5) — 276,181 — — 276,181 Audio & Media Services (6) — — 189,134 ( 4,077 ) 185,057 Other (7) 15,719 — — — 15,719 Total 1,749,965 751,472 189,134 ( 7,704 ) 2,682,867 Revenue from leases (8) 1,375 — — — 1,375 Revenue, total $ 1,751,340 $ 751,472 $ 189,134 $ ( 7,704 ) $ 2,684,242 (1) Broadcast Radio revenue is generated through the sale of advertising time on the Company’s domestic radio stations. (2) Networks revenue is generated through the sale of advertising on the Company’s Premiere and Total Traffic & Weather network programs and through the syndication of network programming to other media companies. (3) Sponsorship and events revenue is generated through local events and major nationally-recognized tent pole events and include sponsorship and other advertising revenue, ticket sales, and licensing, as well as endorsement and appearance fees generated by on-air talent. (4) Digital, excluding Podcast revenue is generated through the sale of streaming and display advertisements on digital platforms and through subscriptions to iHeartRadio streaming services. (5) Podcast revenue is generated through the sale of advertising on the Company's podcast network. (6) Audio & Media Services revenue is generated by services provided to broadcast industry participants through the Company’s Katz Media and RCS businesses. As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast software and media streaming, along with research services for radio stations, broadcast television stations, cable channels, record labels, ad agencies and Internet stations worldwide. (7) Other revenue represents fees earned for miscellaneous services, including on-site promotions, activations, and local marketing agreements. (8) Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases. 9 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Trade and Barter Trade and barter transactions represent the exchange of advertising spots for merchandise, services, advertising and promotion or other assets in the ordinary course of business. The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots promised to the customer. The revenues and expenses may not be recognized in the same period depending on the timing of the services, advertising or promotion received in exchange for advertising spots. Trade and barter revenues and expenses, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2024 2023 2024 2023 Trade and barter revenues $ 87,768 $ 77,228 $ 198,350 $ 175,492 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 $ 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 September 30, Nine Months Ended September 30, (In thousands) 2024 2023 2024 2023 Deferred revenue from contracts with customers: Beginning balance (1) $ 181,883 $ 184,827 $ 181,899 $ 157,910 Revenue recognized, included in beginning balance ( 63,013 ) ( 73,407 ) ( 115,463 ) ( 102,588 ) Additions, net of revenue recognized during period, and other 64,627 84,600 117,061 140,698 Ending balance $ 183,497 $ 196,020 $ 183,497 $ 196,020 (1) Deferred revenue from contracts with customers, which excludes other sources of deferred revenue that are not related to contracts with customers, is included within deferred revenue and other long-term liabilities on the Consolidated Balance Sheets, depending upon when revenue is expected to be recognized. The Company’s contracts with customers generally have terms of one year or less; however, as of September 30, 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. 10 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Revenue from Leases As of September 30, 2024, the future lease payments to be received by the Company are as follows: (In thousands) 2024 $ 100 2025 149 2026 82 2027 41 2028 25 Thereafter 5 Total $ 402 NOTE 3 – LEASES The Company enters into operating lease contracts for land, buildings, structures and other equipment. Arrangements are evaluated at inception to determine whether such arrangements contain a lease. Operating leases primarily include land and building lease contracts and leases of radio towers. Arrangements to lease building space consist primarily of the rental of office space, but may also include leases of other equipment, including automobiles and copiers. Operating leases are reflected on the Company's balance sheet within Operating lease right-of-use assets ("ROU assets") and the related short-term and long-term liabilities are included within Current and Noncurrent operating lease liabilities, respectively. The Company's finance leases are included within Property, plant and equipment with the related liabilities included within Long-term debt. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term. 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 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. As such, the Company uses the incremental borrowing rate ("IBR") to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC 842, is "the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment." 11 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table provides supplemental cash flow information related to leases for the periods presented: Nine Months Ended September 30, (In thousands) 2024 2023 Cash paid for amounts included in measurement of operating lease liabilities $ 112,468 $ 104,784 Lease liabilities arising from obtaining right-of-use assets (1) 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 $ 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 Property, Plant and Equipment The Company’s property, plant and equipment consisted of the following classes of assets: (In thousands) September 30, 2024 December 31, 2023 Land, buildings and improvements $ 328,606 $ 316,655 Towers, transmitters and studio equipment 205,035 195,609 Computer equipment and software 708,795 685,417 Furniture and other equipment 55,726 47,684 Construction in progress 27,849 16,473 1,326,011 1,261,838 Less: accumulated depreciation 825,840 702,973 Property, plant and equipment, net $ 500,171 $ 558,865 Indefinite-lived Intangible Assets 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. 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. 12 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Other Intangible Assets Other intangible assets consists of definite-lived intangible assets, which primarily include customer and advertiser relationships, talent and representation contracts, trademarks and tradenames and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time that the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at amortized cost. The Company tests for possible impairment of other intangible assets whenever events and circumstances indicate that they might be impaired. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value. In connection with its impairment testing, the Company also assessed its other intangible assets. Based on the Company's assessment, no impairment indicators were identified related to the definite-lived intangible assets. The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets. (In thousands) September 30, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer / advertiser relationships $ 1,652,623 $ ( 925,798 ) $ 1,652,623 $ ( 800,377 ) Talent and other contracts 338,900 ( 235,320 ) 338,900 ( 203,479 ) Trademarks and tradenames 335,912 ( 181,955 ) 335,912 ( 156,468 ) Other 18,003 ( 13,565 ) 18,003 ( 11,904 ) 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 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: (In thousands) 2025 $ 213,758 2026 201,512 2027 176,171 2028 160,395 2029 121,622 13 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Goodwill The following table presents the changes in the carrying amount of goodwill: (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Consolidated Balance as of December 31, 2023 (1) $ 1,340,459 $ 311,426 $ 69,598 $ 1,721,483 Impairment ( 608,958 ) — ( 7,127 ) ( 616,085 ) Foreign currency — ( 73 ) 22 ( 51 ) Balance as of September 30, 2024 $ 731,501 $ 311,353 $ 62,493 $ 1,105,347 Cumulative Impairment $ 1,954,895 $ 439,383 $ 41,642 $ 2,435,920 (1) Beginning goodwill balance is presented net of prior accumulated impairment losses of $ 1.3 billion related to our Multiplatform Group, $ 439.4 million related to our Digital Audio Group and $ 34.5 million related to our Audio & Media Services Group. Goodwill Impairment 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, 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) September 30, 2024 December 31, 2023 Term Loan Facility due 2026 $ 1,864,032 $ 1,864,032 Incremental Term Loan Facility due 2026 401,220 401,220 Asset-based Revolving Credit Facility due 2027 (1) — — 6.375 % Senior Secured Notes due 2026 800,000 800,000 5.25 % Senior Secured Notes due 2027 750,000 750,000 4.75 % Senior Secured Notes due 2028 500,000 500,000 Other secured subsidiary debt (2) 3,076 3,367 Total consolidated secured debt 4,318,328 4,318,619 8.375 % Senior Unsecured Notes due 2027 916,357 916,357 Other unsecured subsidiary debt 2,191 — Original issue discount ( 5,213 ) ( 7,558 ) Long-term debt fees ( 9,816 ) ( 12,268 ) Total debt 5,221,847 5,215,150 Less: Current portion 1,059 340 Total long-term debt $ 5,220,788 $ 5,214,810 (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. 14 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 September 30, 2024, the Company was in compliance with all covenants related to our debt agreements. On June 15, 2023, iHeartCommunications, Inc. ("iHeartCommunications"), a wholly-owned subsidiary of iHeartMedia, entered into an amendment to the credit agreement governing its term loan credit facilities (the "Term Loan Facility"). The amendment replaces the prior Eurocurrency interest rate, based upon LIBOR, with the Secured Overnight Financing Rate (“SOFR”) successor rate plus a SOFR adjustment as specified in the credit agreement. The Term Loan Facility margins remain the same with the Term Loan Facility due 2026 containing margins of 3.00 % for Term SOFR Loans (as defined in the credit agreement) and 2.00 % for Base Rate Loans (as defined in the credit agreement), and the incremental Term Loan Facility due 2026 containing margins of 3.25 % for Term SOFR Loans with a floor of 0.50 % and 2.25 % for Base Rate Loans with a floor of 1.50 %. 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 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. 15 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 6 – COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations. Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial/contract disputes; defamation matters; employment and benefits related claims; intellectual property claims; real estate matters; governmental investigations; and tax disputes. Alien Ownership Restrictions and FCC Declaratory Ruling The Communications Act of 1934, as amended (the "Communications Act") and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the licensee of a radio broadcast station unless the FCC finds greater foreign ownership to be in the public interest. On November 5, 2020, the FCC issued a declaratory ruling, which permits the Company to be up to 100 % foreign owned, subject to certain conditions (the "2020 Declaratory Ruling"). NOTE 7 – INCOME TAXES The Company’s income tax benefit (expense) consisted of the following components: (In thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Current tax expense $ ( 23,066 ) $ ( 38,930 ) $ ( 43,453 ) $ ( 77,576 ) Deferred tax benefit 2,231 48,191 67,239 107,089 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 Pursuant to the Company's 2019 Eq uity Incentive Plan (the "2019 Plan"), the Company historically granted restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals. On April 21, 2021, the 2021 Long-Term Incentive Award Plan (the “2021 Plan”) was approved by stockholders and replaced the 2019 Plan. Pursuant 16 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) to the 2021 Plan, the Company will continue to grant equity awards covering shares of the Company's Class A common stock to certain key individuals. Share-based Compensation Share-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Loss. The Company periodically issues restricted stock units ("RSUs") and performance-based RSUs ("Performance RSUs") to certain key employees, some of which are settled in cash. The RSUs vest solely due to continued service over time. The Performance RSUs generally vest upon the achievement of certain market goals, performance goals, and continued service. The majority of these awards are being measured over an approximately 3-year period from the date of issuance, while certain Performance RSUs are measured over a 50-month period from the date of issuance. The following table presents the Company's total share based compensation expense by award type: (In thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 RSUs $ 5,636 $ 5,112 $ 15,647 $ 16,750 Performance RSUs 2,150 2,288 6,351 6,520 Options 477 791 1,965 4,285 Total Share Based Compensation Expense (1) $ 8,263 $ 8,191 $ 23,963 $ 27,555 (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. Special Warrants Each Special Warrant issued under the special warrant agreement entered into in connection with the Company's emergence from bankruptcy in 2019 may be exercised by its holder to purchase one share of Class A common stock or Class B common stock at an exercise price of $ 0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Company's outstanding Class A common stock, (b) more than 22.5 percent of the Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any other applicable foreign ownership threshold or (d) violation of any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC. Any holder exercising Special Warrants must complete and timely deliver to the warrant agent the required exercise forms and certifications required under the special warrant agreement. The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of a licensee’s equity, unless the FCC determines that greater indirect foreign ownership is in the public interest. As mentioned in Note 6 above, on November 5, 2020, the FCC issued the 2020 Declaratory Ruling, which permits the Company to be up to 100 % foreign owned. During the three months ended 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. 17 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 NUMERATOR: Net loss attributable to the Company – common shares $ ( 41,265 ) $ ( 9,053 ) $ ( 1,041,431 ) $ ( 1,115,783 ) DENOMINATOR (1) : Weighted average common shares outstanding - basic 151,990 149,695 150,978 149,084 Stock options and restricted stock (2) : — — — — Weighted average common shares outstanding - diluted 151,990 149,695 150,978 149,084 Net loss attributable to the Company per common share: Basic $ ( 0.27 ) $ ( 0.06 ) $ ( 6.90 ) $ ( 7.48 ) 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 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 The Company’s primary businesses are included in its Multiplatform Group and Digital Audio Group segments. Revenue and expenses earned and charged between Multiplatform Group, Digital Audio Group, Audio & Media Services Group, and Corporate are eliminated in consolidation. The Multiplatform Group provides media and entertainment services via broadcast delivery and also includes the Company’s events and national syndication businesses. The Digital Audio Group provides media and entertainment services via digital delivery. The Audio & Media Services Group provides other audio and media services, including the Company’s media representation business (Katz Media) and its provider of scheduling and broadcast software (RCS). Corporate includes infrastructure and support, including executive, information technology, human resources, legal, finance, and administrative functions for the Company’s businesses. 18 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following tables present the Company's segment results: Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Three Months Ended September 30, 2024 Revenue $ 619,544 $ 301,041 $ 90,050 $ — $ ( 2,502 ) $ 1,008,133 Operating expenses (1) 489,672 201,035 45,641 69,702 ( 2,502 ) 803,548 Segment Adjusted EBITDA (2) $ 129,872 $ 100,006 $ 44,409 $ ( 69,702 ) $ — $ 204,585 Depreciation and amortization ( 101,331 ) Impairment charges ( 412 ) Other operating expense, net ( 1,092 ) Restructuring expenses ( 16,767 ) Share-based compensation expense ( 8,263 ) Operating income $ 76,720 Intersegment revenues $ — $ 1,189 $ 1,313 $ — $ — $ 2,502 Capital expenditures 13,615 5,924 1,376 8,505 — 29,420 Share-based compensation expense — — — 8,263 — 8,263 Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Three Months Ended September 30, 2023 Revenue $ 626,383 $ 267,222 $ 61,979 $ — $ ( 2,595 ) $ 952,989 Operating expenses (1) 463,939 173,565 45,003 69,295 ( 2,595 ) 749,207 Segment Adjusted EBITDA (2) $ 162,444 $ 93,657 $ 16,976 $ ( 69,295 ) $ — $ 203,782 Depreciation and amortization ( 106,451 ) Impairment charges ( 570 ) Other operating expense, net ( 3,378 ) Restructuring expenses ( 16,227 ) Share-based compensation expense ( 8,191 ) Operating income $ 68,965 Intersegment revenues $ — $ 1,222 $ 1,373 $ — $ — $ 2,595 Capital expenditures 10,822 6,069 1,509 10,118 — 28,518 Share-based compensation expense — — — 8,191 — 8,191 19 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Nine Months Ended September 30, 2024 Revenue $ 1,688,914 $ 825,623 $ 229,300 $ — $ ( 7,574 ) $ 2,736,263 Operating expenses (1) 1,377,597 565,620 137,347 203,864 ( 7,574 ) 2,276,854 Segment Adjusted EBITDA (2) $ 311,317 $ 260,003 $ 91,953 $ ( 203,864 ) $ — $ 459,409 Depreciation and amortization ( 310,849 ) Impairment charges ( 922,144 ) Other operating expense, net ( 2,180 ) Restructuring expenses ( 67,928 ) Share-based compensation expense ( 23,963 ) Operating loss $ ( 867,655 ) Intersegment revenues $ — $ 3,549 $ 4,025 $ — $ — $ 7,574 Capital expenditures 38,214 17,043 5,800 11,117 — 72,174 Share-based compensation expense — — — 23,963 — 23,963 Segments (In thousands) Multiplatform Group Digital Audio Group Audio & Media Services Group Corporate and other reconciling items Eliminations Consolidated Nine Months Ended September 30, 2023 Revenue $ 1,751,340 $ 751,472 $ 189,134 $ — $ ( 7,704 ) $ 2,684,242 Operating expenses (1) 1,339,441 519,115 138,315 206,689 ( 7,704 ) 2,195,856 Segment Adjusted EBITDA (2) $ 411,899 $ 232,357 $ 50,819 $ ( 206,689 ) $ — $ 488,386 Depreciation and amortization ( 323,028 ) Impairment charges ( 965,087 ) Other operating expense, net ( 3,338 ) Restructuring expenses ( 46,469 ) Share-based compensation expense ( 27,555 ) Operating loss $ ( 877,091 ) Intersegment revenues $ — $ 3,627 $ 4,077 $ — $ — $ 7,704 Capital expenditures 52,116 17,348 6,300 14,692 — 90,456 Share-based compensation expense — — — 27,555 — 27,555 (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. 20 IHEARTMEDIA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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. 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.) 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. 21