What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-12 compared with 2024-11-07 · 136 added, 264 removed, 265 unchanged (60% of the section changed)

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(the "Company," "iHeartMedia," "we," "our," or "us").

We report based on three reporting segments:

We report based on three reportable segments:

▪ the Multiplatform Group, which includes our Broadcast radio, Networks and Sponsorships and Events businesses;

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This structure provides visibility into the underlying performance, results, and margin profiles of our distinct businesses and enables senior management to monitor trends at the operational level and address opportunities or issues as they arise via regular review of segment-level results and forecasts with operational leaders.

Our segment profitability metric is Segment Adjusted EBITDA, which is reported to the Company's Chief Operating Decision Maker for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment.

Segment Adjusted EBITDA is calculated as Revenue less operating expenses, excluding Restructuring expenses (as defined below) and share-based compensation expenses.

Our segment profitability metric is Segment Adjusted EBITDA, which is reported to the Company's Chief Operating Decision Maker ("CODM") for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment.

The Company's CODM is our Chief Executive Officer.

Segment Adjusted EBITDA is calculated as Revenue less Direct Operating Expenses and Selling, General and Administrative (“SG&A”) Expenses, excluding Restructuring expenses (as defined below) and share-based compensation expenses.

We believe the presentation of our results by segment provides insight into our broadcast radio business and our digital business.

We believe that our ability to generate cash flow from operations from our businesses and our current cash on hand will provide sufficient resources to fund and operate our business, fund capital expenditures and other obligations and make interest payments on our long-term debt for at least the next twelve months.

We believe that our ability to generate cash flow from operations from our businesses and our current liquidity will provide sufficient resources to fund and operate our business, fund capital expenditures and other obligations and make interest payments on our long-term debt for at least the next twelve months.

Description of our Business

Our strategy centers on delivering entertaining and informative content where our listeners want to find us across our various platforms.

Our strategy centers on delivering entertaining and informative content where our listeners want to find it across our various platforms.

Multiplatform Group

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Management also monitors revenue generated through our programmatic ad-buying platform, and our data analytics advertising product, to measure the success of our enhanced marketing optimization tools.

We have made significant

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.

We have made significant 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, 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.

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Our 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 our revenues and cash flows.

Higher interest rates and inflation have continued to contribute to a challenging macroeconomic environment.

This environment has led to broader market uncertainty which has impacted our revenues and cash flows.

We are monitoring ongoing developments surrounding international trade that may pressure the advertising budgets of our customers and could impact our financial results in future periods.

The current market uncertainty and macroeconomic conditions, a recession, or a downturn in the U.S.

economy could have a significant impact on our ability to generate revenue and cash flows.

Cost Savings Initiatives

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.

Impairment Charges

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 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 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.

Modernization Initiatives

We implemented operating expense savings initiatives during 2024 to streamline our organization and increase automation and the use of technology.

These modernization initiatives included headcount reductions and other actions and are anticipated to have approximately $150 million of net savings for full year 2025.

We continue to explore opportunities for further efficiencies.

Executive Summary

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.

Consolidated revenues for the first quarter of 2025 increased due to a continued increase in demand for digital advertising, 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 $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.

• Consolidated Revenue of $807.1 million increased $8.1 million, or 1.0%, during the quarter ended March 31, 2025 compared to Consolidated Revenue of $799.0 million in the prior year's first quarter.

• Multiplatform Group Revenue decreased $20.5 million, or 4.2%, and Segment Adjusted EBITDA decreased $7.2 million, or 9.3%, compared to the prior year's first quarter, respectively.

• Digital Audio Group Revenue increased $38.3 million, or 16.0%, and Segment Adjusted EBITDA increased $19.0 million, or 27.8%, compared to the prior year's first quarter, respectively.

• Audio & Media Services Group Revenue decreased $9.8 million, or 14.2%, and Segment Adjusted EBITDA decreased $7.9 million, or 33.3%, compared to the prior year's first quarter, respectively.

• Operating loss of $25.4 million improved $9.3 million from $34.7 million in the prior year’s first quarter.

• Net loss of $280.9 million increased $262.8 million from $18.1 million in the prior year's first quarter.

• Cash flows used for operating activities of $60.9 million increased from $59.3 million in the prior year's first quarter.

• Adjusted EBITDA (1) of $104.6 million, was flat compared to the prior year.

• Free cash flow (2) of $(80.7) million improved slightly from $(80.9) million in the prior year's first quarter.

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

(In thousands) Three Months Ended

September 30,

2025 2024 Change

Revenue $ 807,101 $ 799,038 1.0 %

Operating income 76,720 68,965

Operating loss (25,434) (34,708) (26.7) %

Net loss (280,883) (18,108) 1,451.2 %

Cash provided by operating activities 102,765 96,169

Cash used for operating activities (60,944) (59,277) 2.8 %

Adjusted EBITDA (1)

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(80,674) (80,859) (0.2) %

(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.

(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 used for operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash used for operating activities to Free cash flow” in this MD&A.

Results of Operations

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(In thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Revenue $ 807,101 $ 799,038

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Other operating expense 659 572

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

Operating loss (25,434) (34,708)

Interest expense, net 100,386 95,515

Gain (loss) on investments, net (18,594) 91,994

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

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

Equity in earnings (loss) of nonconsolidated affiliates 50 (45)

Loss on extinguishment of debt (1,197) —

Other income (expense), net 37 (496)

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Less amount attributable to noncontrolling interest

(60) 84 9 1,469

Net loss attributable to the Company $ (281,224) $ (18,508)

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:

The table below presents the comparison of our revenue streams for the three months ended March 31, 2025 to the three months ended March 31, 2024:

(In thousands) Three Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

2025 2024 Change

Broadcast Radio $ 340,736 $ 359,338 (5.2) %

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Revenue, total $ 807,101 $ 799,038 1.0 %

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 $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.

Consolidated results for the three months ended March 31, 2025 compared to the consolidated results for the three months ended March 31, 2024 were as follows:

Consolidated revenue increased $8.1 million during the three months ended March 31, 2025 compared to the same period of 2024.

Multiplatform Group revenue decreased $20.5 million, or 4.2%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions.

Digital Audio Group revenue increased $38.3 million, or 16.0%, driven primarily by continuing increases in demand for digital advertising, including podcast advertising.

Audio & Media Services revenue decreased $9.8 million, or 14.2%, primarily as a result of Katz Media revenue due to nonrecurring contract termination fees earned by Katz Media in 2024 and a decrease in broadcast advertising in connection with uncertain market conditions, partially offset by an increase in digital advertising.

Direct Operating Expenses

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 $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.

Consolidated direct operating expenses increased $15.0 million, or 4.4%, during the three months ended March 31, 2025 compared to the same period of 2024.

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, partially offset by a decrease in employee compensation cost in connection with modernization initiatives taken in 2024.

Selling, General and Administrative Expenses

Consolidated SG&A expenses decreased $4.4 million, or 1.1%, during the three months ended March 31, 2025 compared to the same period of 2024.

The decrease was driven primarily by a decrease in costs incurred in connection with executing on our cost savings initiatives, including decreased employee compensation cost due to our modernization initiatives, partially offset by an increase in employee benefit expense related to the reestablishment of the 401(k) matching program during the first quarter of 2025.

Depreciation and Amortization

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.

Depreciation and amortization decreased $13.3 million during the three months ended March 31, 2025 compared to the same period of 2024 primarily as a result of a lower fixed asset base due to lower levels of capital expenditures.

Impairment Charges

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.

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.

During the three months ended March 31, 2025 and 2024, we recorded non-cash impairment charges of $2.9 million and $1.5 million, respectively, related to changes in sublease assumptions for certain operating leases intended to be subleased.

Interest Expense, net

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.

Interest expense increased $4.9 million during the three months ended March 31, 2025 compared to the same period of 2024 primarily as a result of an increase in contractual interest rates in connection with the debt exchange transaction that closed in the fourth quarter of 2024.

Gain (Loss) On Investments, Net

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.

During the three months ended March 31, 2025, we recognized a loss on investments, net of $18.6 million, related to declines in the value of our investments.

During the three months ended March 31, 2024, we recogn ized a gain on in vestments, net of $92.0 million related 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 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.

The effective tax rates for the Company for the three months ended March 31, 2025 and 2024 were (93.0)% and 53.3%, respectively.

The effective tax rates for these three-month periods 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.

Net Loss Attributable to the Company

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.

Net loss attributable to the Company increased $262.7 million to $281.2 million during the three months ended March 31, 2025 compared to Net loss attributable to the Company of $18.5 million during the three months ended March 31, 2024.

The increase was primarily due to the increase in income tax expense as described above and 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

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

2025 2024 Change

Revenue $ 472,978 $ 493,463 (4.2) %

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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 $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.

Revenue from our Multiplatform Group decreased $20.5 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions.

Broadcast revenue decreased $18.6 million, or 5.2%, year-over-year, driven by lower spot revenue.

Networks declined $2.6 million, or 2.5%, year-over-year.

Revenue from Sponsorship and Events increased $0.8 million, or 2.8%, year-over-year.

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.

Networks declined $22.5 million, or 6.5%, year-over-year due primarily to the impact of non-returning advertisers.

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

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.

Operating expenses decreased $13.3 million, driven primarily by a decrease in employee compensation cost due to our modernization initiatives, partially offset by an increase in employee benefit expense related to the reestablishment of the 401(k) matching program during the first quarter of 2025.

Digital Audio Group Results

(In thousands) Three Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

2025 2024 Change

Revenue $ 277,287 $ 238,968 16.0 %

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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 $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.

Revenue from our Digital Audio Group increased $38.3 million compared to the prior year, driven by Podcast revenue which increased by $25.4 million, or 28.0% year-over-year, primarily due to a continued increase in demand for podcasting from advertisers, and Digital, excluding Podcast revenue, which increased $12.9 million, or 8.7% year-over-year, primarily due to an increase in demand for digital advertising.

Operating expenses increased $19.4 million, primarily driven by higher variable content costs, including higher podcast profit sharing and third-party digital costs related to the increase in revenues.

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(In thousands) Three Months Ended

September 30, % Nine Months Ended

September 30, %

2024 2023 Change 2024 2023 Change

2025 2024 Change

Revenue $ 59,323 $ 69,168 (14.2) %

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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 $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

Revenue from our Audio & Media Services Group decreased $9.8 million compared to the prior year period primarily due to contract termination fees earned by Katz Media in the first quarter of 2024 and a decrease in broadcast advertising in connection with uncertain market conditions, partially offset by increased demand for digital advertising.

Operating expenses decreased $1.9 million primarily as a result of our modernization initiatives, partially offset by higher sales commissions related to increased demand for digital advertising.

Reconciliation of Operating loss to Adjusted EBITDA

(In thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

Operating loss $ (25,434) $ (34,708)

Depreciation and amortization 91,901 105,162

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(In thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net loss $ (280,883) $ (18,108)

4 unchanged sentences

(Gain) loss on investments, net 18,594 (91,994)

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

Loss on extinguishment of debt 1,197 —

Other (income) expense, net (37) 496

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

Equity in (earnings) loss of nonconsolidated affiliates (50) 45

Impairment charges 2,855 1,508

4 unchanged sentences

$ 104,588 $ 104,617

(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:

(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 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.

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, Loss on extinguishment of debt, Other (income) expense, net, Equity in (earnings) 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.

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.

It is also a primary measure used by management in evaluating companies as potential acquisition targets.

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 loss.

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.

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Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs.

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 operating activities to Free Cash Flow

Because it excludes certain financial information compared with operating income and compared with consolidated Net 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 used for operating activities to Free Cash Flow

(In thousands) Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

Cash used for operating activities $ (60,944) $ (59,277)

Purchases of property, plant and equipment (19,730) (21,582)

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$ (80,674) $ (80,859)

(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.

(1) We define Free cash flow ("Free Cash Flow") as Cash 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.

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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In addition, we believe that Free Cash Flow helps improve investors' ability to compare our liquidity with other companies.

Since Free Cash Flow is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, Cash provided by (used for) operating activities and may not be comparable to similarly titled measures employed by other companies.

Since Free Cash Flow is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, Cash used for operating activities and may not be comparable to similarly titled measures employed by other companies.

Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.

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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 $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.

Share-based compensation expenses are recorded in SG&A expenses and were $9.0 million and $8.5 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was $26.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements.

This cost is expected to be recognized over a weighted average period of approximately 1.9 years and assumes Performance RSUs will be fully earned at target.

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

(In thousands) Nine Months Ended

September 30,

(In thousands) Three Months Ended

Cash provided by (used for):

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(80,674) (80,859)

(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.

(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 used for operating activities to Free Cash Flow” in this MD&A.

Operating Activities

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.

Cash used for operating activities was $60.9 million during the three months ended March 31, 2025 compared to $59.3 million during the three months ended March 31, 2024.

The increase was primarily due to the timing of payable and accrual payments, partially offset by an improvement in the timing of receivable collections and timing of interest payments.

Accrued interest was paid in the fourth quarter of 2024 for the debt exchange transaction that would have been paid in the first quarter of 2025 under the old debt terms.

Investing Activities

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 $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.

Cash used for investing activities of $20.1 million during the three months ended March 31, 2025 primarily reflects $19.7 million in cash used for capital expenditures.

For capital expenditures, we spent $5.9 million in our Multiplatform Group segment primarily related to our IT infrastructure and real estate optimization initiatives, $5.9 million in our Digital Audio Group segment primarily related to IT infrastructure, $5.6 million in our Audio & Media Services Group segment, primarily related to software, and $2.3 million in Corporate primarily related to equipment and software purchases.

Cash provided by investing activities of $78.0 million during the three months ended March 31, 2024 primarily reflects $101.4 million of proceeds received from the sale of our investment in BMI, partially offset by $21.6 million in cash used for capital expenditures.

For capital expenditures, we spent $11.7 million in our Multiplatform Group segment primarily related to our IT infrastructure and real estate optimization initiatives, $5.4 million in our Digital Audio Group segment primarily related to IT infrastructure, $2.3 million in our Audio & Media Services Group segment, primarily related to software, and $2.2 million in Corporate primarily related to equipment and software purchases.

Financing Activities

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.

Cash used for financing activities totaled $11.0 million during the three months ended March 31, 2025 primarily related to the quarterly amortization payment on the Term Loans due 2029 and payments reducing our debt premium recorded in connection with the debt exchange transaction completed in the fourth quarter of 2024.

Cash used for financing activities totaled $3.5 million during the three months ended March 31, 2024 primarily due to distributions to noncontrolling interest holders.

Sources of Liquidity and Anticipated Cash Requirements

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.

Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $167.7 million as of March 31, 2025, 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 March 31, 2025, iHeartCommunications had no amounts outstanding under the ABL Facility, a borrowing base of $415.1 million and $23.7 million in outstanding letters of credit, resulting in $391.4 million of borrowing base availability.

Our total available liquidity 1 as of March 31, 2025 was $559.1 million.

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 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.

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

For the three months ended March 31, 2025, our consolidated revenues increased compared to the three months ended March 31, 2024 primarily due to revenue growth in our Digital Audio Group, partially offset by lower revenue in our Multiplatform Group, among other factors discussed in the Results of Operations section of this 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 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 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.

Certain contractual obligations are reflected on the Consolidated Balance Sheet as of March 31, 2025, 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, employment and talent contracts, and music license fees.

In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2025 will be to fund fluctuations in working capital, make interest and tax payments, fund capital expenditures, make voluntary debt repayments and pursue other strategic opportunities, and maintain operations.

Assuming the current level of borrowings and interest rates in effect at March 31, 2025, we anticipate cash payments to service our debt of approximately $333.7 million in the remainder of 2025.

These debt service cash payments include interest, quarterly term loan amortization payments and payments related to the debt premium.

The increase in payments is primarily due to quarterly term loan amortization payments, as well as to an increase in interest rates in connection with the Debt Exchange Transaction that closed in the fourth quarter of 2024 .

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 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.

Further, we believe our available liquidity will allow us to fund capital expenditures and other obligations and make interest payments on our long-term debt.

We acknowledge the challenges posed by market uncertainty as a result of global economic weakness and other macroeconomic and political trends, however, we remain confident in our business, our employees and our strategy.

Further, we believe our available liquidity will allow us to fund capital expenditures and other obligations and make interest payments on our long-term debt for at least the next twelve months.

If these sources of liquidity need to be augmented, additional cash requirements would likely be financed through the issuance of debt or equity securities;

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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 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

As of March 31, 2025 and December 31, 2024, we had the following debt outstanding, net of cash and cash equivalents:

(In thousands) March 31, 2025 December 31, 2024

Asset-based Revolving Credit Facility due 2027 $ — $ —

Term Loan Facility due 2026 5,095 5,095

Incremental Term Loan Facility due 2026 1,500 1,500

Asset-based Revolving Credit Facility due 2027 — —

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 3,076 3,367

Total Secured Debt $ 4,318,328 $ 4,318,619

Term Loan Facility due 2029 (1)

2,140,360 2,145,724

6.375% Senior Notes due 2026 44,644 44,644

5.25% Senior Notes due 2027 6,983 6,983

8.375% Senior Unsecured Notes due 2027 72,388 72,388

4.75% Senior Secured Notes due 2028 276,868 276,868

9.125% First Lien Notes due 2029 717,588 717,588

7.75% First Lien Notes due 2030 661,285 661,285

7.00% First Lien Notes due 2031 178,443 178,443

10.875% Second Lien Notes due 2030 675,165 675,165

Other subsidiary debt 4,696 5,008

Original issue discount (5,213) (7,558)

Long-term debt fees (8,544) (8,974)

Debt Premium (2)

278,106 289,752

Total Debt $ 5,054,577 $ 5,071,469

Debt Premium 278,106 289,752

Cash and cash equivalents 167,714 259,580

$ 4,608,757 $ 4,522,137

1 Net Debt is a non-GAAP financial metric that is used by management and investors to assess our ability to meet financial obligations, including our ability to service our long-term debt obligations.

We define Net Debt as Total Debt less Cash and cash equivalents.

(1) Decrease is due to the quarterly amortization payment of $5.4 million equal to 0.25% of the original principal amount of the Term Loan Facility due 2029.

(2) The difference between the carrying value of the exchanged 5.25% Senior Notes, 4.75% Senior Secured Notes, and 8.375% Senior Unsecured Notes and the principal amount of the 7.75% First Lien Notes due 2030, 7.00% First Lien Notes due 2031 and the 10.875% Second Lien Notes due 2030 was recorded as debt premium and will be reduced as contractual interest payments are made.

(3) Net Debt is a non-GAAP financial metric that is used by management and investors to assess our ability to meet financial obligations.

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 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.

As of March 31, 2025, 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 March 31, 2025.

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

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

As of March 31, 2025, 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 .

Our subsidiaries have from time to time repurchased certain debt obligations of iHeartCommunications, and may in the future, as part of various financing and investment strategies, purchase additional outstanding indebtedness of iHeartCommunications or its subsidiaries or our outstanding equity securities, in tender offers, open market purchases, privately negotiated transactions or otherwise.

Our subsidiaries have from time to time repurchased certain debt obligations of iHeartCommunications, and may in the future, as part of various financing and investment strategies, refinance, retire, exchange or purchase additional outstanding indebtedness of iHeartCommunications or its subsidiaries or our outstanding equity securities, in tender offers, open market purchases, privately negotiated transactions or otherwise.

Such refinancings, retirements, exchanges or purchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

We or our subsidiaries may also sell certain assets, securities, or properties.

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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 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.

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 months ended March 31, 2025, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period.

Further, as of March 31, 2025, 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 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.

As of March 31, 2025, approximately 45% 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 three months ended March 31, 2025 would have changed by $5.4 million.

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

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Critical Accounting Estimates

The preparation of our financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period.

On an ongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.

The result of these evaluations forms the basis for making judgments about the carrying

values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources.

Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material.

Other than the following, there have been no significant changes to our critical accounting policies and estimates disclosed in “Critical Accounting Estimates” of Item 7, Management’s Discussion and Analysis of our Annual Report on Form 10-K for the year ended December 31, 2023.

Economic uncertainty due to 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 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.

As a result, we performed an impairment test as of June 30, 2024 on our indefinite-lived FCC licenses and goodwill.

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets, such as our FCC licenses, are reviewed for impairment using the direct valuation method as prescribed in ASC 805-20-S99.

Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets was calculated at the market level as prescribed by ASC 350-30-35.

Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the buyer hypothetically obtains indefinite-lived intangible assets and builds a new operation with similar attributes from scratch.

Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value.

Initial capital costs are deducted from the discounted cash flows model, which results in value that is directly attributable to the indefinite-lived intangible assets.

Our key assumptions using the direct valuation method are 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.

On June 30, 2024, we performed an interim impairment test in accordance with ASC 350-30-35 and we concluded that a $304.1 million impairment of the indefinite-lived intangible assets was required.

In determining the fair value of our FCC licenses, the following key assumptions were used:

• Revenue forecasts published by BIA Financial Network, Inc.

(“BIA”), varying by market, and revenue growth projections made by industry analysts were used for the initial five-year period;

• 2.0% over-the-air revenue growth and 3.0% digital revenue growth was assumed beyond the initial five-year period and 1.0% revenue growth was assumed in the terminal period;

• Revenue was grown proportionally over a build-up period, reaching market revenue forecast by year 3;

• Operating margins of 8.0% in the first year gradually climb to the industry average margin in year 3 of up to 16.3%, depending on market size;

• Assumed discount rates of 9.5% for large markets and 10.0% for small markets.

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible a material change could occur.

If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future.

The following table shows the decrease in the fair value of our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:

Impact on the Fair Value of our FCC Licenses due to 100 bps Change in:

Revenue Growth Rate Profit Margin Discount Rate

(in thousands)

$ 123,114 $ 120,132 $ 142,164

At June 30, 2024, the carrying value of our FCC licenses was $809.9 million after the impairment of $304.1 million .

An increase in discount rates, a decrease in revenue growth rates or profit margins, or a decrease in BIA revenue forecasts could result in additional impairment to our FCC licenses.

We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired.

The fair value of our reporting units is used to apply value to the net assets of each reporting unit.

To the extent that the carrying amount of net assets would exceed the fair value, an impairment charge may be required to be recorded.

The impairment testing performed as of June 30, 2024 has resulted in a decrease in the fair values of our reporting units.

The carrying values of our Multiplatform and RCS reporting units exceeded their fair values.

The fair values of our Digital and Katz reporting units exceeded their carrying values.

The valuation methodology we use for valuing goodwill involves considering the implied fair values of our reporting units based on market factors including the trading prices of our debt and equity securities, and estimating future cash flows expected to be generated from the related assets, discounted to their present values using a risk-adjusted discount rate.

Terminal values are also estimated and discounted to their present values.

On June 30, 2024, we performed our interim impairment test in accordance with ASC 350-30-35, resulting in a $616.1 million impairment of goodwill.

In determining the fair value of our reporting units, we considered industry and market factors including trading multiples of similar businesses and the trading prices of our debt and equity securities.

For purposes of assessing the discounted future cash flows of our reporting units, we used the following assumptions:

• Expected cash flows underlying our business plans for the periods 2024 through 2028.

Our cash flow assumptions are based on detailed, multi-year forecasts performed by each of our operating reporting units and reflect the current advertising outlook across our businesses.

• Revenues beyond 2028 are projected to grow at a perpetual growth rate, which we estimated at 1.0% for our Multiplatform Reporting unit (beyond 2033), 3.0% for our Digital Audio Reporting unit (beyond 2032), and 2.0% for our RCS and Katz Media Reporting units.

• Profit margins beyond 2028 utilize the 2028 margin implied in the multi-year forecasts.

• In order to risk adjust the cash flow projections in determining fair value, we utilized discounts rates between 17% and 20% for each of our reporting units.

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units, it is possible a material change could occur.

If future results are not consistent with our assumptions and estimates, we may be exposed to additional impairment charges in the future.

The following table shows the decline in the fair value of each of our reporting units that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:

(In thousands) Impact on the Fair Value of our Goodwill due to 100bps Change in:

Reporting Unit Revenue Growth Rate Profit Margin Discount Rate

Multiplatform $ 127,528 $ 98,208 $ 114,259

Digital 61,541 61,790 58,055

Katz Media 10,342 8,189 9,614

RCS 8,342 4,356 6,684

An increase in discount rates or a decrease in revenue growth rates or profit margins could result in additional impairment charges being required to be recorded for one or more of our reporting units.

There have been no significant changes to our critical accounting policies and estimates disclosed in “Critical Accounting Estimates” of Item 7, Management’s Discussion and Analysis of our Annual Report on Form 10-K for the year ended December 31, 2024.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

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, 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.

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, our expectations regarding the seasonality of our business, 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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A wide range of factors could materially affect future developments and performance, including but not limited to:

• risks associated with weak or uncertain global economic and geopolitical conditions and their impact on the level of expenditures for advertising;

• risks related to the COVID-19 pandemic or other future pandemics, or public health crises and any related reduction in demand for advertising;

• intense competition including increased competition from alternative media platforms and technologies;

• dependence upon the performance of on-air talent, program hosts and management as well as maintaining or enhancing our master brand;

• risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures for advertising;

• risks related to advertising revenue fluctuations;

• intense competition including increased competition from alternative media and entertainment platforms and technologies;

• dependence upon the performance of on-air talent, program hosts and management as well as maintaining or enhancing our brand;

• fluctuations in operating costs and other factors within or beyond our control;

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• shifts in population and other demographics;

• 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 our substantial indebtedness;

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

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• regulations and consumer concerns regarding privacy and data protection, and breaches of information security measures;

• risks related to scrutiny of environmental, social, and governance matters;

• risks related to our Class A common stock;

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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