SEC Form 10-Q filed by iHeartMedia Inc.

8/8/24 8:06:24 AM ET

$IHRT

Broadcasting

Consumer Discretionary

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ihrt-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________

Commission File Number

001-38987

IHEARTMEDIA, INC.

(Exact name of registrant as specified in its charter)


Delaware		26-0241222
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

20880 Stone Oak Parkway
San Antonio,	Texas	78258
(Address of principal executive offices)		(Zip Code)

(210) 822-2828

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share	IHRT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated Filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at August 2, 2024

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Class A Common Stock, $.001 par value

125,462,546

Class B Common Stock, $.001 par value

21,344,390

IHEARTMEDIA, INC.

INDEX


		Page No.
Part I – Financial Information
Item 1.	Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Loss	2
	Consolidated Statements of Changes in Stockholders' Equity (Deficit)	3
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
Part II – Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

IHEARTMEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(In thousands, except share and per share data)	June 30, 2024		December 31, 2023
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	364,744	$	346,382
Accounts receivable, net of allowance of $43,220 in 2024 and $38,055 in 2023	898,496		1,041,214
Prepaid expenses	140,337		93,131

Other current assets	18,765		26,189
Total Current Assets	1,422,342		1,506,916
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net	511,302		558,865
INTANGIBLE ASSETS AND GOODWILL
Indefinite-lived intangibles - licenses and other	810,340		1,113,979
Other intangibles, net	1,050,018		1,173,210
Goodwill	1,105,244		1,721,483
OTHER ASSETS
Operating lease right-of-use assets	684,758		704,992
Other assets	185,164		173,166
Total Assets	$	5,769,168	$	6,952,611
CURRENT LIABILITIES
Accounts payable	$	222,115	$	236,162
Current operating lease liabilities	72,567		73,832
Accrued expenses	221,443		317,575

Accrued interest	61,977		61,987
Deferred revenue	160,285		158,540
Current portion of long-term debt	621		340
Total Current Liabilities	739,008		848,436
Long-term debt	5,218,194		5,214,810
Noncurrent operating lease liabilities	737,270		762,820
Deferred income taxes	274,750		339,768
Other long-term liabilities	174,589		171,535
Commitments and contingent liabilities (Note 6)
STOCKHOLDERS' DEFICIT
Noncontrolling interest	5,683		9,397
Preferred stock, par value $.001 per share, 100,000,000 shares authorized, no shares issued and outstanding	—		—
Class A Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, issued and outstanding 126,905,933 and 124,299,288 shares in 2024 and 2023, respectively	127		125
Class B Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, issued and outstanding 21,344,390 and 21,347,363 shares in 2024 and 2023, respectively	21		21
Special Warrants, 5,043,307 and 5,101,870 issued and outstanding in 2024 and 2023, respectively	—		—
Additional paid-in capital	2,962,275		2,947,096
Accumulated deficit	(4,330,308)		(3,330,142)
Accumulated other comprehensive loss	(1,596)		(1,128)
Cost of shares (1,518,459 in 2024 and 983,589 in 2023) held in treasury	(10,845)		(10,127)
Total Stockholders' Deficit	(1,374,643)		(384,758)
Total Liabilities and Stockholders' Deficit	$	5,769,168	$	6,952,611

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


(In thousands, except per share data)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	929,092	$	920,014	$	1,728,130	$	1,731,253
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)	382,049		355,061		723,409		699,681
Selling, general and administrative expenses (excludes depreciation and amortization)	431,614		393,773		816,758		796,574
Depreciation and amortization	104,356		108,065		209,518		216,577
Impairment charges	920,224		960,570		921,732		964,517
Other operating (income) expense, net	516		(261)		1,088		(40)
Operating loss	(909,667)		(897,194)		(944,375)		(946,056)
Interest expense, net	95,577		98,693		191,092		194,150
Gain (loss) on investments, net	(412)		(6,038)		91,582		(12,543)
Equity in loss of nonconsolidated affiliates	(61)		(44)		(106)		(4)
Gain on extinguishment of debt	—		22,902		—		27,527
Other expense, net	(231)		(272)		(727)		(371)
Loss before income taxes	(1,005,948)		(979,339)		(1,044,718)		(1,125,597)
Income tax benefit	23,959		96,357		44,621		20,252
Net loss	(981,989)		(882,982)		(1,000,097)		(1,105,345)
Less amount attributable to noncontrolling interest	(331)		1,488		69		1,385
Net loss attributable to the Company	$	(981,658)	$	(884,470)	$	(1,000,166)	$	(1,106,730)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(249)		(77)		(468)		(123)





Other comprehensive loss, net of tax	(249)		(77)		(468)		(123)
Comprehensive loss	(981,907)		(884,547)		(1,000,634)		(1,106,853)
Less amount attributable to noncontrolling interest	—		—		—		—
Comprehensive loss attributable to the Company	$	(981,907)	$	(884,547)	$	(1,000,634)	$	(1,106,853)
Net loss attributable to the Company per common share:
Basic	$	(6.50)	$	(5.93)	$	(6.65)	$	(7.44)
Weighted average common shares outstanding - Basic	151,137		149,179		150,466		148,774
Diluted	$	(6.50)	$	(5.93)	$	(6.65)	$	(7.44)
Weighted average common shares outstanding - Diluted	151,137		149,179		150,466		148,774

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)


(In thousands, except share data)						Controlling Interest
	Common Shares(1)			Non- controlling Interest		Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock
	Class A Shares	Class B Shares	Special Warrants													Total
Balances at March 31, 2024	124,416,225	21,346,613	5,043,336	$	6,400	$	146	$	2,955,043	$	(3,348,650)	$	(1,347)	$	(10,166)	$	(398,574)
Net loss				(331)		—		—		(981,658)		—		—		(981,989)
Vesting of restricted stock and other	2,487,456			—		2		(2)		—		—		(679)		(679)


Share-based compensation				—		—		7,234		—		—		—		7,234

Dividend declared and paid to noncontrolling interests				(386)		—		—		—		—		—		(386)
Conversion of Special Warrants to Class A or Class B Shares	29		(29)	—		—		—		—		—		—		—
Conversion of Class B Shares to Class A Shares	2,223	(2,223)		—		—		—		—		—		—		—


Other comprehensive loss				—		—		—		—		(249)		—		(249)
Balances at June 30, 2024	126,905,933	21,344,390	5,043,307	$	5,683	$	148	$	2,962,275	$	(4,330,308)	$	(1,596)	$	(10,845)	$	(1,374,643)


(In thousands, except share data)						Controlling Interest
	Common Shares(1)			Non- controlling Interest		Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock
	Class A Shares	Class B Shares	Special Warrants													Total
Balances at March 31, 2023	122,385,200	21,469,919	5,111,312	$	9,185	$	144	$	2,922,652	$	(2,449,742)	$	(1,377)	$	(8,958)	$	471,904
Net income (loss)				1,488		—		—		(884,470)		—		—		(882,982)
Vesting of restricted stock and other	1,538,599			—		1		(1)		—		—		(928)		(928)
Share-based compensation				—		—		8,947		—		—		—		8,947
Dividend declared and paid to noncontrolling interests				(322)		—		—		—		—		—		(322)
Conversion of Special Warrants to Class A and Class B Shares	198	59	(257)	—		—		—		—		—		—		—
Conversion of Class B Shares to Class A Shares	122,615	(122,615)		—		—		—		—		—		—		—

Other comprehensive loss				—		—		—		—		(77)		—		(77)
Balances at June 30, 2023	124,046,612	21,347,363	5,111,055	$	10,351	$	145	$	2,931,598	$	(3,334,212)	$	(1,454)	$	(9,886)	$	(403,458)

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2024 or 2023.

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)


(In thousands, except share data)						Controlling Interest
	Common Shares(1)			Non- controlling Interest		Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock
	Class A Shares	Class B Shares	Special Warrants													Total
Balances at December 31, 2023	124,299,288	21,347,363	5,101,870	$	9,397	$	146	$	2,947,096	$	(3,330,142)	$	(1,128)	$	(10,127)	$	(384,758)
Net income (loss)				69		—		—		(1,000,166)		—		—		(1,000,097)
Vesting of restricted stock and other	2,545,109			—		2		(2)		—		—		(718)		(718)
Share-based compensation				—		—		15,181		—		—		—		15,181
Dividends declared and paid to noncontrolling interests				(3,783)		—		—		—		—		—		(3,783)
Conversion of Special Warrants to Class A and Class B Shares	58,563		(58,563)	—		—		—		—		—		—		—
Conversion of Class B Shares to Class A Shares	2,973	(2,973)		—		—		—		—		—		—		—

Other comprehensive loss				—		—		—		—		(468)		—		(468)
Balances at June 30, 2024	126,905,933	21,344,390	5,043,307	$	5,683	$	148	$	2,962,275	$	(4,330,308)	$	(1,596)	$	(10,845)	$	(1,374,643)


(In thousands, except share data)						Controlling Interest
	Common Shares(1)			Non- controlling Interest		Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock
	Class A Shares	Class B Shares	Special Warrants													Total
Balances at December 31, 2022	122,370,425	21,477,181	5,111,312	$	9,609	$	144	$	2,912,500	$	(2,227,482)	$	(1,331)	$	(8,934)	$	684,506
Net income (loss)				1,385		—		—		(1,106,730)		—		—		(1,105,345)
Vesting of restricted stock and other	1,546,112			—		1		(1)		—		—		(952)		(952)
Share-based compensation				—		—		19,099		—		—		—		19,099
Dividends declared and paid to noncontrolling interests				(643)		—		—		—		—		—		(643)
Conversion of Special Warrants to Class A and Class B Shares	198	59	(257)	—		—		—		—		—		—		—
Conversion of Class B Shares to Class A Shares	129,877	(129,877)		—		—		—		—		—		—		—

Other comprehensive loss				—		—		—		—		(123)		—		(123)
Balances at June 30, 2023	124,046,612	21,347,363	5,111,055	$	10,351	$	145	$	2,931,598	$	(3,334,212)	$	(1,454)	$	(9,886)	$	(403,458)

(1) The Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2024, 2023 or 2022.

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


(In thousands)	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(1,000,097)	$	(1,105,345)
Reconciling items:
Impairment charges	921,732		964,517
Depreciation and amortization	209,518		216,577
Deferred taxes	(65,008)		(58,898)
Provision for doubtful accounts	11,590		18,565
Amortization of deferred financing charges and note discounts, net	3,478		3,331

Share-based compensation	15,181		19,099
(Gain) Loss on disposal of operating and other assets	406		(1,216)
(Gain) Loss on investments	(91,582)		12,543
Equity in loss of nonconsolidated affiliates	106		4
Gain on extinguishment of debt	—		(27,527)
Barter and trade income	(15,532)		(11,728)
Other reconciling items, net	768		199
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in accounts receivable	126,584		14,061
Increase in prepaid & other current assets	(42,639)		(54,641)
(Increase) Decrease in other long-term assets	1,526		(2,447)
Decrease in accounts payable	(9,575)		(40,518)
Decrease in accrued expenses	(97,427)		(16,377)
Decrease in accrued interest	(10)		(1,816)
Increase (Decrease) in deferred revenue	(1,281)		35,742
Decrease in other long-term liabilities	(286)		(1,336)
Cash used for operating activities	(32,548)		(37,211)
Cash flows from investing activities:

Proceeds from sale of investments	101,756		—
Purchases of property, plant and equipment	(42,754)		(61,938)
Proceeds from disposal of assets	55		6,875

Change in other, net	(3,186)		(4,197)
Cash provided by (used for) investing activities	55,871		(59,260)
Cash flows from financing activities:



Payments on long-term debt and credit facilities	(314)		(73,280)



Dividends and other payments to noncontrolling interests	(3,783)		(643)


Change in other, net	(719)		(952)
Cash used for financing activities	(4,816)		(74,875)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(145)		10
Net increase (decrease) in cash, cash equivalents and restricted cash	18,362		(171,336)
Cash, cash equivalents and restricted cash at beginning of period	346,382		336,661
Cash, cash equivalents and restricted cash at end of period	$	364,744	$	165,325
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	194,039	$	195,482
Cash paid for income taxes	2,709		11,000

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION

Preparation of Interim Financial Statements

All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to iHeartMedia, Inc. and its consolidated subsidiaries. The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The Company reports based on three reportable segments:

▪the Multiplatform Group, which includes the Company's Broadcast radio, Networks and Sponsorships and Events businesses;

▪the Digital Audio Group, which includes all of the Company's Digital businesses, including Podcasting; and

▪the Audio & Media Services Group, which includes Katz Media Group (“Katz Media”), a full-service media representation business, and RCS Sound Software ("RCS"), a provider of scheduling and broadcast software and services.

The consolidated financial statements include the accounts of the Company and its subsidiaries. Also included in the consolidated financial statements are entities for which the Company has a controlling interest or is the primary beneficiary. Investments in companies which the Company does not control but exercises significant influence over operating and financial policies of the company are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process.

Economic Conditions

The Company's advertising revenue, cash flows, and cost of capital are impacted by changes in economic conditions. Higher interest rates and inflation have contributed to a challenging macroeconomic environment since 2022. This challenging environment has led to broader market uncertainty which has impacted the Company's revenues and cash flows. The current market uncertainty and macroeconomic conditions, a recession, or a downturn in the U.S. economy could have a significant impact on the Company's ability to generate revenue and cash flows.

The challenging environment has resulted in lower advertising spending by businesses and has delayed our expected recovery. In addition, this economic uncertainty has had a significant impact on the trading values of the Company's debt and equity securities for a sustained period. The Company therefore performed an interim impairment test as of June 30, 2024 on the goodwill recorded in its reporting units, as well as its indefinite-lived Federal Communication Commission ("FCC") licenses.

The estimated fair values of the Company’s FCC licenses, which have indefinite lives, are based on broadcast industry information, including industry-wide projections. The factors discussed above negatively impacted certain assumptions in the discounted cash flow models used to value the Company's FCC licenses. The Company's June 30, 2024 testing indicated that the fair values of its FCC licenses were below their carrying values, which resulted in a non-cash impairment charge of $304.1 million.

Based on the valuation analysis that the Company performed in connection with the interim goodwill impairment testing as of June 30, 2024, the Company determined that the estimated fair values of two of its reporting units were below their carrying values, including goodwill, which required the Company to recognize a non-cash impairment charge of $616.1 million to reduce the Company's goodwill balance.

The Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its indefinite-lived FCC licenses and reporting units. It is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the impact of current market conditions, as well as the timing of any recovery. If the Company's actual results are not consistent with its estimates, the Company could be exposed to future impairment losses that could be material to its results of operations.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of June 30, 2024, the Company had approximately $364.7 million in cash and cash equivalents, and the $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility") had a facility size of $450.0 million, no outstanding borrowings and $23.7 million of outstanding letters of credit, resulting in $426.3 million of borrowing base availability. The Company's total available liquidity as of June 30, 2024 was $791.0 million. Based on current available liquidity, the Company expects to be able to meet its obligations as they become due over the coming year.

Reclassifications

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

Restricted Cash

As of June 30, 2024 and December 31, 2023, the Company did not have any restricted cash balances on the Consolidated Balance Sheets.

Certain Relationships and Related Party Transactions

From time to time, certain companies in which the Company holds minority equity interests, purchase advertising in the ordinary course. None of these ordinary course transactions have had a material impact on the Company.

New Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued Update 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”), an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and disclosure of expenses provided to the CODM that are included within the reported measure of segment profit or loss. The amendments of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and should be applied retrospectively to all periods presented. We are currently evaluating the impact of this standard on our disclosures, including timing of adoption.

In December 2023, the FASB issued Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the disclosure requirements for income tax rate reconciliation, domestic and foreign income taxes, and unrecognized tax benefits. The amendments of ASU 2023-09 are effective for annual periods beginning after December 15, 2024. Early adoption is permitted, and should be applied prospectively. We are currently evaluating the impact of this standard on our annual disclosures, including timing of adoption.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 – REVENUE

Disaggregation of Revenue

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


(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Eliminations		Consolidated
Three Months Ended June 30, 2024
Revenue from contracts with customers:
Broadcast Radio(1)	$	425,490	$	—	$	—	$	—	$	425,490
Networks(2)	106,591		—		—		—		106,591
Sponsorship and Events(3)	39,121		—		—		—		39,121
Digital, excluding Podcast(4)	—		181,093		—		(1,175)		179,918
Podcast(5)	—		104,521		—		—		104,521
Audio & Media Services(6)	—		—		70,082		(1,336)		68,746
Other(7)	4,430		—		—		—		4,430
Total	575,632		285,614		70,082		(2,511)		928,817
Revenue from leases(8)	275		—		—		—		275
Revenue, total	$	575,907	$	285,614	$	70,082	$	(2,511)	$	929,092

Three Months Ended June 30, 2023
Revenue from contracts with customers:
Broadcast Radio(1)	$	429,152	$	—	$	—	$	—	$	429,152
Networks(2)	122,168		—		—		—		122,168
Sponsorship and Events(3)	38,210		—		—		—		38,210
Digital, excluding Podcast(4)	—		164,147		—		(1,216)		162,931
Podcast(5)	—		96,707		—		—		96,707
Audio & Media Services(6)	—		—		65,804		(1,372)		64,432
Other(7)	5,585		—		—		—		5,585
Total	595,115		260,854		65,804		(2,588)		919,185
Revenue from leases(8)	829		—		—		—		829
Revenue, total	$	595,944	$	260,854	$	65,804	$	(2,588)	$	920,014

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Eliminations		Consolidated
Six Months Ended June 30, 2024
Revenue from contracts with customers:
Broadcast Radio(1)	$	784,828	$	—	$	—	$	—	$	784,828
Networks(2)	208,642		—		—		—		208,642
Sponsorship and Events(3)	66,950		—		—		—		66,950
Digital, excluding Podcast(4)	—		329,437		—		(2,360)		327,077
Podcast(5)	—		195,145		—		—		195,145
Audio & Media Services(6)	—		—		139,250		(2,712)		136,538
Other(7)	8,525		—		—		—		8,525
Total	1,068,945		524,582		139,250		(5,072)		1,727,705
Revenue from leases(8)	425		—		—		—		425
Revenue, total	$	1,069,370	$	524,582	$	139,250	$	(5,072)	$	1,728,130

Six Months Ended June 30, 2023
Revenue from contracts with customers:
Broadcast Radio(1)	$	812,390	$	—	$	—	$	—	$	812,390
Networks(2)	230,122		—		—		—		230,122
Sponsorship and Events(3)	70,797		—		—		—		70,797
Digital, excluding Podcast(4)	—		310,732		—		(2,405)		308,327
Podcast(5)	—		173,518		—		—		173,518
Audio & Media Services(6)	—		—		127,155		(2,704)		124,451
Other(7)	10,509		—		—		—		10,509
Total	1,123,818		484,250		127,155		(5,109)		1,730,114
Revenue from leases(8)	1,139		—		—		—		1,139
Revenue, total	$	1,124,957	$	484,250	$	127,155	$	(5,109)	$	1,731,253

(1)Broadcast Radio revenue is generated through the sale of advertising time on the Company’s domestic radio stations.

(2)Networks revenue is generated through the sale of advertising on the Company’s Premiere and Total Traffic & Weather network programs and through the syndication of network programming to other media companies.

(3)Sponsorship and events revenue is generated through local events and major nationally-recognized tent pole events and include sponsorship and other advertising revenue, ticket sales, and licensing, as well as endorsement and appearance fees generated by on-air talent.

(4)Digital, excluding Podcast revenue is generated through the sale of streaming and display advertisements on digital platforms and through subscriptions to iHeartRadio streaming services.

(5)Podcast revenue is generated through the sale of advertising on the Company's podcast network.

(6)Audio & Media Services revenue is generated by services provided to broadcast industry participants through the Company’s Katz Media and RCS businesses. As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast software and media streaming, along with research services for radio stations, broadcast television stations, cable channels, record labels, ad agencies and Internet stations worldwide.

(7)Other revenue represents fees earned for miscellaneous services, including on-site promotions, activations, and local marketing agreements.

(8)Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Trade and Barter

Trade and barter transactions represent the exchange of advertising spots for merchandise, services, advertising and promotion or other assets in the ordinary course of business. The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots promised to the customer. The revenues and expenses may not be recognized in the same period depending on the timing of the services, advertising or promotion received in exchange for advertising spots. Trade and barter revenues and expenses, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Trade and barter revenues	$	69,277	$	53,235	$	110,582	$	98,264
Trade and barter expenses	57,786		31,521		91,967		78,907

In addition to the trade and barter revenue in the table above, the Company recognized $6.8 million and $3.7 million during the three months ended June 30, 2024 and 2023, respectively, and $15.5 million and $11.7 million during the six months ended June 30, 2024 and 2023, respectively, in connection with investments made in companies in exchange for advertising services.

The following tables show the Company’s deferred revenue balance from contracts with customers:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023










Deferred revenue from contracts with customers:
Beginning balance(1)	$	185,835	$	170,681	$	181,899	$	157,910

Revenue recognized, included in beginning balance	(69,378)		(57,532)		(100,826)		(83,307)
Additions, net of revenue recognized during period, and other	65,426		71,678		100,810		110,224
Ending balance	$	181,883	$	184,827	$	181,883	$	184,827

(1) Deferred revenue from contracts with customers, which excludes other sources of deferred revenue that are not related to contracts with customers, is included within deferred revenue and other long-term liabilities on the Consolidated Balance Sheets, depending upon when revenue is expected to be recognized.

The Company’s contracts with customers generally have terms of one year or less; however, as of June 30, 2024, the Company expects to recognize $254.6 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years. Commissions related to the Company’s media representation business have been excluded from this amount as they are contingent upon future sales.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Revenue from Leases

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


(In thousands)

2024	$	144
2025	121
2026	82
2027	41
2028	25
Thereafter	5
Total	$	418

NOTE 3 – LEASES

The Company enters into operating lease contracts for land, buildings, structures and other equipment. Arrangements are evaluated at inception to determine whether such arrangements contain a lease. Operating leases primarily include land and building lease contracts and leases of radio towers. Arrangements to lease building space consist primarily of the rental of office space, but may also include leases of other equipment, including automobiles and copiers. Operating leases are reflected on the Company's balance sheet within Operating lease right-of-use assets ("ROU assets") and the related short-term and long-term liabilities are included within Current and Noncurrent operating lease liabilities, respectively.

The Company's finance leases are included within Property, plant and equipment with the related liabilities included within Long-term debt.

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term.

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

During the six months ended June 30, 2024, we recognized non-cash impairment charges of $1.5 million due to changes in sublease assumptions for ROU assets related to certain operating leases for which management has made proactive decisions to abandon and sublease in connection with strategic actions to streamline the Company’s real estate footprint. There were no lease impairments recognized during the three months ended June 30, 2024. During the three and six months ended June 30, 2023, we recognized non-cash impairment charges of $1.5 million and $5.5 million, respectively, due to changes in sublease assumptions for ROU assets.

The implicit rate within the Company's lease agreements is generally not determinable. As such, the Company uses the incremental borrowing rate ("IBR") to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC 842, is "the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment."

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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


	Six Months Ended June 30,
(In thousands)	2024		2023
Cash paid for amounts included in measurement of operating lease liabilities	$	75,069	$	67,329
Lease liabilities arising from obtaining right-of-use assets(1)	13,022		7,280

(1) Lease liabilities from obtaining right-of-use assets include new leases entered into during the six months ended June 30, 2024 and 2023, respectively.

The Company reflects changes in the lease liability and changes in the ROU asset on a net basis in the Statements of Cash Flows. The non-cash operating lease expense was $15.9 million and $16.4 million for the three months ended June 30, 2024 and 2023, respectively. The non-cash operating lease expense was $31.5 million and $34.5 million for the six months ended June 30, 2024 and 2023, respectively.

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

Property, Plant and Equipment

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


(In thousands)	June 30, 2024		December 31, 2023
Land, buildings and improvements	$	322,673	$	316,655
Towers, transmitters and studio equipment	200,195		195,609
Computer equipment and software	700,699		685,417
Furniture and other equipment	48,929		47,684
Construction in progress	24,757		16,473
	1,297,253		1,261,838
Less: accumulated depreciation	785,951		702,973
Property, plant and equipment, net	$	511,302	$	558,865

Indefinite-lived Intangible Assets

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

The Company performs its annual impairment test on goodwill and indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year. In addition, the Company tests for impairment of other intangible assets whenever events and circumstances indicate that such assets might be impaired.

As discussed in Note 1, Basis of Presentation, economic uncertainty due to inflation and higher interest rates since 2022 has resulted in, among other things, lower advertising spending by businesses. This economic uncertainty has had an adverse impact on the Company's revenues, cash flows and trading values of the Company's debt and equity securities for a sustained period. The Company therefore performed an interim impairment test as of June 30, 2024 on its FCC licenses.

The uncertainty surrounding the demand for advertising impacted the key industry assumptions used in the models that are utilized to value the Company's FCC licenses. As a result, the fair values of certain of the Company's FCC licenses have decreased.

The Company's FCC licenses are valued using a direct valuation approach, with the key assumptions being market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, estimated start-up costs, and capital expenditures. This data is populated using industry normalized information representing an average asset within a market. The Company obtained the most recent broadcast radio industry revenue projections for use in the valuation model, as well as various other sources to analyze media and broadcast

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on the Company's FCC licenses as of June 30, 2024.

Considerations in developing these assumptions included the expected impact on advertising revenues given the current market uncertainty, ranges of expected timing of recovery, discount rates and other factors. Based on the Company's interim testing, the estimated fair values of its FCC licenses were below their carrying values. As a result, the Company recognized a non-cash impairment charge of $304.1 million on its FCC licenses.

Other Intangible Assets

Other intangible assets consists of definite-lived intangible assets, which primarily include customer and advertiser relationships, talent and representation contracts, trademarks and tradenames and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time that the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at amortized cost.

The Company tests for possible impairment of other intangible assets whenever events and circumstances indicate that they might be impaired. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.

In connection with its impairment testing, the Company also assessed its other intangible assets. Based on the Company's assessment, no impairment indicators were identified related to the definite-lived intangible assets.

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets.


(In thousands)	June 30, 2024				December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer / advertiser relationships	$	1,652,623	$	(884,218)	$	1,652,623	$	(800,377)
Talent and other contracts	338,900		(224,731)		338,900		(203,479)
Trademarks and tradenames	335,912		(173,460)		335,912		(156,468)

Other	18,003		(13,011)		18,003		(11,904)
Total	$	2,345,438	$	(1,295,420)	$	2,345,438	$	(1,172,228)

Total amortization expense related to definite-lived intangible assets for the Company for the three months ended June 30, 2024 and 2023 was $61.2 million and $61.8 million, respectively. Total amortization expense related to definite-lived intangible assets for the Company for the six months ended June 30, 2024 and 2023 was $123.1 million and $123.6 million, respectively.

As acquisitions and dispositions occur in the future, amortization expense may vary. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:


(In thousands)
2025	$	213,758
2026	201,512
2027	176,171
2028	160,395
2029	121,622

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Goodwill

The following table presents the changes in the carrying amount of goodwill:


(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Consolidated
Balance as of December 31, 2023(1)	$	1,340,459	$	311,426	$	69,598	$	1,721,483
Impairment	(608,958)		—		(7,127)		(616,085)


Foreign currency	—		(73)		(81)		(154)


Balance as of June 30, 2024	$	731,501	$	311,353	$	62,390	$	1,105,244

Cumulative Impairment	$	1,954,895	$	439,383	$	41,642	$	2,435,920

(1) Beginning goodwill balance is presented net of prior accumulated impairment losses of $1.3 billion related to our Multiplatform Group, $439.4 million related to our Digital Audio Group and $34.5 million related to our Audio & Media Services Group.

Goodwill Impairment

As discussed above, the Company performs its impairment test for each reporting unit’s goodwill as of July 1 of each year. The Company also tests goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired.

As discussed above, economic uncertainty has had a significant impact on the Company's revenue and cash flows, as well as the trading values of the Company's debt and equity securities for a sustained period. The Company therefore performed an interim impairment test as of June 30, 2024 on its goodwill. The uncertainty surrounding the demand for advertising impacted the key assumptions used in the models which are utilized to value the Company's goodwill.

The goodwill impairment test requires measurement of the fair value of the Company's reporting units, which is compared to the carrying value of the reporting units, including goodwill. Each of the Company's reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on the Company's budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and in management’s judgment in applying these factors. The economic environment resulting from inflation, higher interest rates, and the related uncertainty in the markets impacted the trading values of the Company's debt and equity securities and certain assumptions used to estimate the fair values of the Company's reporting units for purposes of performing the interim goodwill impairment test. Based on the Company's valuation analysis, it determined that the estimated fair values of two of its reporting units were below their carrying value, including goodwill, which required the Company to recognize a non-cash impairment charge of $616.1 million to reduce its goodwill balance.

While the Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its other intangible assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the impact of current market conditions, as well as the timing of any recovery. If the Company's actual results are not consistent with its estimates, the Company could be exposed to future impairment losses that could be material to its results of operations.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 5 – LONG-TERM DEBT

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


(In thousands)	June 30, 2024		December 31, 2023
Term Loan Facility due 2026	$	1,864,032	$	1,864,032
Incremental Term Loan Facility due 2026	401,220		401,220
Asset-based Revolving Credit Facility due 2027(1)	—		—
6.375% Senior Secured Notes due 2026	800,000		800,000
5.25% Senior Secured Notes due 2027	750,000		750,000
4.75% Senior Secured Notes due 2028	500,000		500,000
Other secured subsidiary debt(2)	3,159		3,367
Total consolidated secured debt	4,318,411		4,318,619

8.375% Senior Unsecured Notes due 2027	916,357		916,357
Other unsecured subsidiary debt	694		—
Original issue discount	(6,003)		(7,558)
Long-term debt fees	(10,644)		(12,268)
Total debt	5,218,815		5,215,150
Less: Current portion	621		340
Total long-term debt	$	5,218,194	$	5,214,810

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

(2)Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2025 through 2045.

The Company’s weighted average interest rate was 7.3% as of June 30, 2024 and December 31, 2023. The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $3.4 billion and $4.2 billion as of June 30, 2024 and December 31, 2023, respectively. Under the fair value hierarchy established by ASC 820-10-35, the market value of the Company’s debt is classified as either Level 1 or Level 2. As of June 30, 2024, we were in compliance with all covenants related to our debt agreements.

On June 15, 2023, iHeartCommunications, Inc. ("iHeartCommunications"), a wholly-owned subsidiary of iHeartMedia, entered into an amendment to the credit agreement governing its term loan credit facilities (the "Term Loan Facility"). The amendment replaces the prior Eurocurrency interest rate, based upon LIBOR, with the Secured Overnight Financing Rate (“SOFR”) successor rate plus a SOFR adjustment as specified in the credit agreement. The Term Loan Facility margins remain the same with the Term Loan Facility due 2026 containing margins of 3.00% for Term SOFR Loans (as defined in the credit agreement) and 2.00% for Base Rate Loans (as defined in the credit agreement), and the incremental Term Loan Facility due 2026 containing margins of 3.25% for Term SOFR Loans with a floor of 0.50% and 2.25% for Base Rate Loans with a floor of 1.50%.

Surety Bonds and Letters of Credit

As of June 30, 2024, the Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $8.9 million and $23.7 million, respectively. These surety bonds and letters of credit relate to various operational matters including insurance, lease and performance bonds as well as other items.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 6 – COMMITMENTS AND CONTINGENCIES

The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.

Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial/contract disputes; defamation matters; employment and benefits related claims; intellectual property claims; real estate matters; governmental investigations; and tax disputes.

Alien Ownership Restrictions and FCC Declaratory Ruling

The Communications Act of 1934, as amended (the "Communications Act") and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the licensee of a radio broadcast station unless the FCC finds greater foreign ownership to be in the public interest. On November 5, 2020, the FCC issued a declaratory ruling, which permits the Company to be up to 100% foreign owned, subject to certain conditions (the "2020 Declaratory Ruling").

NOTE 7 – INCOME TAXES

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


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Current tax expense	$	(16,969)	$	(35,161)	$	(20,387)	$	(38,646)
Deferred tax benefit	40,928		131,518		65,008		58,898
Income tax benefit	$	23,959	$	96,357	$	44,621	$	20,252

The effective tax rates for the Company for the three and six months ended June 30, 2024 were 2.4% and 4.3%, respectively. The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company’s ability to utilize those assets in future periods, as well as by impairment charges to non-deductible goodwill. The deferred tax benefit primarily consists of $77.3 million related to the FCC license impairment charges recorded during the second quarter of 2024. The deferred benefit was partially offset by deferred tax expense recorded for valuation allowances against certain deferred tax assets.

The effective tax rates for the Company for the three and six months ended June 30, 2023 were 9.8% and 1.8%, respectively. The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company’s ability to utilize those assets in future periods, as well as by impairment charges to non-deductible goodwill. The deferred tax benefit primarily consists of $92.9 million related to the FCC license impairment charges recorded during the second quarter of 2023.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 8 – STOCKHOLDERS' DEFICIT

Pursuant to the Company's 2019 Equity Incentive Plan (the "2019 Plan"), the Company historically granted restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals. On April 21, 2021, the 2021 Long-Term Incentive Award Plan (the “2021 Plan”) was approved by stockholders and replaced the 2019 Plan. Pursuant to the 2021 Plan, the Company will continue to grant equity awards covering shares of the Company's Class A common stock to certain key individuals.

Share-based Compensation

Share-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Loss. The Company periodically issues restricted stock units ("RSUs") and performance-based RSUs ("Performance RSUs") to certain key employees, some of which are settled in cash. The RSUs vest solely due to continued service over time. The Performance RSUs generally vest upon the achievement of certain market goals, performance goals, and continued service. The majority of these awards are being measured over an approximately 3-year period from the date of issuance, while certain Performance RSUs are measured over a 50-month period from the date of issuance. On February 25, 2024, the Company issued RSUs and Performance RSUs to certain key employees.

The following table presents the Company's total share based compensation expense by award type for the three and six months ended June 30, 2024 and 2023:


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
RSUs	$	5,085	$	5,536	$	10,011	$	11,638
Performance RSUs	1,412		2,300		4,201		4,232
Options	723		1,376		1,488		3,494
Total Share Based Compensation Expense(1)	$	7,220	$	9,212	$	15,700	$	19,364

(1) Total share based compensation expense includes $0.5 million of expense from cash settled awards for the six months ended June 30, 2024. Share based compensation expense from cash settled awards was immaterial for the three months ended June 30, 2024. Total share based compensation expense includes $0.3 million of expense from cash settled awards for the three and six months ended June 30, 2023.

As of June 30, 2024, there was $44.8 million of unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of approximately 1.7 years and assumes Performance RSUs will be fully earned at target.

Special Warrants

Each Special Warrant issued under the special warrant agreement entered into in connection with the Company's emergence from bankruptcy in 2019 may be exercised by its holder to purchase one share of Class A common stock or Class B common stock at an exercise price of $0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Company's outstanding Class A common stock, (b) more than 22.5 percent of the Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any other applicable foreign ownership threshold or (d) violation of any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC. Any holder exercising Special Warrants must complete and timely deliver to the warrant agent the required exercise forms and certifications required under the special warrant agreement. The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of a licensee’s equity, unless the FCC determines that greater indirect foreign ownership is in the public interest. As mentioned in Note 6 above, on November 5, 2020, the FCC issued the 2020 Declaratory Ruling, which permits the Company to be up to 100% foreign owned.

During the three months ended June 30, 2024 and 2023 there were 29 and 198 Special Warrants, respectively, exercised for shares of Class A common stock. During the three months ended June 30, 2023 there were 59 Special Warrants exercised for

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Class B common stock. There were no Special Warrants exercised for Class B common stock during the three months ended June 30, 2024. During the six months ended June 30, 2024 and 2023, there were 58,563 and 198 Special Warrants, respectively, exercised for shares of Class A common stock. During the six months ended June 30, 2023, there were 59 Special Warrants exercised for Class B common stock. There were no Special Warrants exercised for Class B common stock during the six months ended June 30, 2024.

Computation of Loss per Share


(In thousands, except per share data)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
NUMERATOR:
Net loss attributable to the Company – common shares	$	(981,658)	$	(884,470)	$	(1,000,166)	$	(1,106,730)

DENOMINATOR(1):
Weighted average common shares outstanding - basic	151,137		149,179		150,466		148,774
Stock options and restricted stock(2):	—		—		—		—
Weighted average common shares outstanding - diluted	151,137		149,179		150,466		148,774

Net loss attributable to the Company per common share:
Basic	$	(6.50)	$	(5.93)	$	(6.65)	$	(7.44)
Diluted	$	(6.50)	$	(5.93)	$	(6.65)	$	(7.44)

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

(2) Outstanding equity service awards representing 15.1 million and 13.8 million shares of Class A common stock of the Company for the three months ended June 30, 2024 and 2023, respectively, and 15.5 million and 12.7 million for the six months ended June 30, 2024 and 2023, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.

NOTE 9 – SEGMENT DATA

The Company’s primary businesses are included in its Multiplatform Group and Digital Audio Group segments. Revenue and expenses earned and charged between Multiplatform Group, Digital Audio Group, Audio & Media Services Group, and Corporate are eliminated in consolidation. The Multiplatform Group provides media and entertainment services via broadcast delivery and also includes the Company’s events and national syndication businesses. The Digital Audio Group provides media and entertainment services via digital delivery. The Audio & Media Services Group provides other audio and media services, including the Company’s media representation business (Katz Media) and its provider of scheduling and broadcast software (RCS). Corporate includes infrastructure and support, including executive, information technology, human resources, legal, finance and administrative functions for the Company’s businesses. Share-based payments are recorded in Selling, general and administrative expense.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following tables present the Company's segment results:


	Segments
(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Corporate and other reconciling items		Eliminations		Consolidated
Three Months Ended June 30, 2024
Revenue	$	575,907	$	285,614	$	70,082	$	—	$	(2,511)	$	929,092


Operating expenses(1)	471,644		193,744		46,233		69,775		(2,511)		778,885
Segment Adjusted EBITDA(2)	$	104,263	$	91,870	$	23,849	$	(69,775)	$	—	$	150,207
Depreciation and amortization											(104,356)
Impairment charges											(920,224)
Other operating expense, net											(516)
Restructuring expenses											(27,558)
Share-based compensation expense											(7,220)
Operating loss											$	(909,667)


Intersegment revenues	$	—	$	1,175	$	1,336	$	—	$	—	$	2,511
Capital expenditures	12,895		5,692		2,167		418		—		21,172
Share-based compensation expense	—		—		—		7,220		—		7,220


	Segments
(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Corporate and other reconciling items		Eliminations		Consolidated
Three Months Ended June 30, 2023
Revenue	$	595,944	$	260,854	$	65,804	$	—	$	(2,588)	$	920,014


Operating expenses(1)	433,542		176,272		47,305		74,302		(2,588)		728,833
Segment Adjusted EBITDA(2)	$	162,402	$	84,582	$	18,499	$	(74,302)	$	—	$	191,181
Depreciation and amortization											(108,065)
Impairment charges											(960,570)
Other operating income, net											261
Restructuring expenses											(10,789)
Share-based compensation expense											(9,212)
Operating loss											$	(897,194)

Intersegment revenues	$	—	$	1,216	$	1,372	$	—	$	—	$	2,588
Capital expenditures	14,870		5,502		904		1,497		—		22,773
Share-based compensation expense	—		—		—		9,212		—		9,212

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


	Segments
(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Corporate and other reconciling items		Eliminations		Consolidated
Six Months Ended June 30, 2024
Revenue	$	1,069,370	$	524,582	$	139,250	$	—	$	(5,072)	$	1,728,130


Operating expenses(1)	887,925		364,585		91,706		134,162		(5,072)		1,473,306
Segment Adjusted EBITDA(2)	$	181,445	$	159,997	$	47,544	$	(134,162)	$	—	$	254,824
Depreciation and amortization											(209,518)
Impairment charges											(921,732)
Other operating expense, net											(1,088)
Restructuring expenses											(51,161)
Share-based compensation expense											(15,700)
Operating loss											$	(944,375)

Intersegment revenues	$	—	$	2,360	$	2,712	$	—	$	—	$	5,072
Capital expenditures	24,599		11,119		4,424		2,612		—		42,754
Share-based compensation expense							15,700				15,700


	Segments
(In thousands)	Multiplatform Group		Digital Audio Group		Audio & Media Services Group		Corporate and other reconciling items		Eliminations		Consolidated
Six Months Ended June 30, 2023
Revenue	$	1,124,957	$	484,250	$	127,155	$	—	$	(5,109)	$	1,731,253


Operating expenses(1)	875,503		345,549		93,312		137,393		(5,109)		1,446,648
Segment Adjusted EBITDA(2)	$	249,454	$	138,701	$	33,843	$	(137,393)	$	—	$	284,605
Depreciation and amortization											(216,577)
Impairment charges											(964,517)
Other operating income, net											40
Restructuring expenses											(30,243)
Share-based compensation expense											(19,364)
Operating loss											$	(946,056)

Intersegment revenues	$	—	$	2,405	$	2,704	$	—	$	—	$	5,109
Capital expenditures	41,294		11,279		4,791		4,574		—		61,938
Share-based compensation expense	—		—		—		19,364		—		19,364

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

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

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Format of Presentation

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes contained in Part I, Item 1 of this Quarterly Report on Form 10-Q of iHeartMedia, Inc. (the "Company," "iHeartMedia," "we," "our," or "us").

We report based on three reporting segments:

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

▪the Digital Audio Group, which includes our Digital businesses, including Podcasting; and

▪the Audio & Media Services Group, which includes Katz Media Group (“Katz Media”), our full-service media representation business, and RCS Sound Software ("RCS"), a provider of scheduling and broadcast software and services.

These reporting segments reflect how senior management operates the Company. 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.

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.

Description of our Business

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

Multiplatform Group

The primary source of revenue for our Multiplatform Group is from selling local and national advertising time on our radio stations, with contracts typically less than one year in duration. The programming formats of our radio stations are designed to reach audiences with targeted demographic characteristics. We work closely with our advertising and marketing partners to develop tools and leverage data to enable advertisers to effectively reach their desired audiences. Our Multiplatform Group also generates revenue from network syndication, nationally recognized events and other miscellaneous transactions.

Management looks at our Multiplatform Group's operations’ overall revenue as well as the revenue from each revenue stream including Broadcast Radio, Networks, and Sponsorship and Events. We periodically review and refine our selling structures in all regions and markets in an effort to maximize the value of our offering to advertisers and, therefore, our revenue.

Management also looks at Multiplatform Group's revenue by region and market size. Typically, larger markets can reach larger audiences with wider demographics than smaller markets. Additionally, management reviews our share of audio advertising revenues in markets where such information is available, as well as our share of target demographics listening in an average quarter hour. This metric gauges how well our formats are attracting and retaining listeners.

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.

Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions (“CPM”), which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service. In addition, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically priced the highest. Our price and yield information systems enable our station managers and sales teams to adjust commercial inventory and pricing based on local market demand, as well as to manage and monitor different commercial durations in order to provide more effective advertising for our customers at what we believe are optimal prices given market conditions. Yield is measured by management in a variety of ways, including revenue earned divided by minutes of advertising sold.

A portion of our Multiplatform Group segment’s expenses vary in connection with changes in revenue. These variable expenses primarily relate to costs in our programming and sales departments, including profit sharing fees, and commissions.

Digital Audio Group

The primary source of revenue in the Digital Audio Group segment is the sale of advertising on our podcast network, iHeartRadio mobile application and website, and station websites. Revenues for digital advertising are recognized over time based on impressions delivered or time elapsed, depending upon the terms of the contract. Digital Audio Group’s contracts with advertisers are typically a year or less in duration and are generally billed monthly upon satisfaction of the performance obligations.

Through our Digital Audio Group, we continue to expand the choices for listeners. We derive revenue in this segment by developing and delivering our content and selling advertising across multiple digital distribution channels, including via our iHeartRadio mobile application, our station websites and other digital platforms that reach national, regional and local audiences.

Our strategy has enabled us to extend our leadership in the growing podcasting sector, and iHeartMedia is the number one podcast publisher in America. Our reach now extends across more than 500 platforms and thousands of different connected devices, and our digital business is comprised of podcasting, streaming, subscription, display advertisements, and other content that is disseminated over digital platforms.

A portion of our Digital Audio Group segment’s expenses vary in connection with changes in revenue. These variable expenses primarily relate to our content costs including profit sharing fees and third-party content costs, as well as sales commissions. Certain of our content costs, including digital music performance royalties, vary with the volume of listening hours on our digital platforms.

Audio & Media Services Group

Audio & Media Services Group revenue is generated by services provided to broadcast industry participants through our 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.

Economic Conditions

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. 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

During the first half of 2024, we implemented operating expense savings initiatives to change and streamline our organization, increase automation and use of technology, examine our sourcing strategies, and leverage our scale to drive greater efficiency. 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 challenging environment has led to broader market uncertainty, and has delayed our expected recovery and has had an adverse impact on our revenue and cash flows. This challenging environment could have a significant impact on our financial results. In addition, this economic uncertainty has had a significant impact on the trading values of our debt and equity securities for a sustained period. We therefore performed interim impairment tests as of June 30, 2024 on our indefinite-lived Federal Communication Commission ("FCC") licenses and goodwill.

The uncertainty surrounding the demand for advertising and the adverse impact on the trading values of our debt and equity securities impacted the key assumptions used in the models that are utilized to value our FCC licenses and goodwill. As a result, the fair values of certain of our FCC licenses and reporting units have decreased.

Our FCC licenses are valued using a direct valuation approach, with the key assumptions being market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, estimated start-up costs and capital expenditures. This data is populated using industry normalized information representing an average asset within a market. We obtained the most recent broadcast radio industry revenue projections for use in our valuation model, as well as various other sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of June 30, 2024.

Considerations in developing these assumptions included the expected impact on advertising revenues given the current market uncertainty, ranges of expected timing of recovery, discount rates and other factors. Based on our interim testing, the estimated fair value of our FCC licenses was below their carrying values. As a result, we recognized a non-cash impairment charge of $304.1 million on our FCC licenses.

The goodwill impairment test requires us to measure the fair value of our reporting units, which is compared to the carrying value of the reporting units, including goodwill. Each of our reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires us to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and in management’s judgment in applying these factors. The economic environment resulting from inflation, higher interest rates, and the related uncertainty in the markets negatively impacted the trading values of our debt and equity securities and also impacted certain assumptions used to estimate the fair values of our reporting units for purposes of performing the interim goodwill impairment test. Based on our valuation analysis, we determined that the estimated fair values of two of our reporting units were below their carrying values, including goodwill, which required us to recognize a non-cash impairment charge of $616.1 million to reduce our goodwill balance.

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the impact of current market conditions, as well as the timing of any recovery. If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.

Executive Summary

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

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

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

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

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

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

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

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

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

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

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

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


(In thousands)	Three Months Ended June 30,
	2024		2023
Revenue	$	929,092	$	920,014
Operating loss	(909,667)		(897,194)
Net loss	(981,989)		(882,982)
Cash provided by operating activities	26,729		56,772

Adjusted EBITDA(1)	$	150,207	$	191,181
Free cash flow(2)	5,557		33,999

(1) For a definition of Adjusted EBITDA and a reconciliation to Operating loss, the most closely comparable U.S. generally accepted accounting principles ("GAAP") measure, and to Net loss, please see "Reconciliation of Operating loss to Adjusted EBITDA" and "Reconciliation of Net loss to EBITDA and Adjusted EBITDA" in this MD&A.

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

Results of Operations

The table below presents the comparison of our historical results of operations:


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	929,092	$	920,014	$	1,728,130	$	1,731,253
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)	382,049		355,061		723,409		699,681
Selling, general and administrative expenses (excludes depreciation and amortization)	431,614		393,773		816,758		796,574
Depreciation and amortization	104,356		108,065		209,518		216,577
Impairment charges	920,224		960,570		921,732		964,517
Other operating (income) expense, net	516		(261)		1,088		(40)
Operating loss	(909,667)		(897,194)		(944,375)		(946,056)
Interest expense, net	95,577		98,693		191,092		194,150
Gain (loss) on investments, net	(412)		(6,038)		91,582		(12,543)
Equity in loss of nonconsolidated affiliates	(61)		(44)		(106)		(4)
Gain on extinguishment of debt	—		22,902		—		27,527
Other expense, net	(231)		(272)		(727)		(371)

Loss before income taxes	(1,005,948)		(979,339)		(1,044,718)		(1,125,597)
Income tax benefit	23,959		96,357		44,621		20,252


Net loss	(981,989)		(882,982)		(1,000,097)		(1,105,345)
Less amount attributable to noncontrolling interest	(331)		1,488		69		1,385
Net loss attributable to the Company	$	(981,658)	$	(884,470)	$	(1,000,166)	$	(1,106,730)

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


(In thousands)	Three Months Ended June 30,				%		Six Months Ended June 30,				%
	2024		2023		Change		2024		2023		Change
Broadcast Radio	$	425,490	$	429,152	(0.9)	%	$	784,828	$	812,390	(3.4)	%
Networks	106,591		122,168		(12.8)	%	208,642		230,122		(9.3)	%
Sponsorship and Events	39,121		38,210		2.4	%	66,950		70,797		(5.4)	%
Other	4,705		6,414		(26.6)	%	8,950		11,648		(23.2)	%
Multiplatform Group	575,907		595,944		(3.4)	%	1,069,370		1,124,957		(4.9)	%
Digital, excluding Podcast	181,093		164,147		10.3	%	329,437		310,732		6.0	%
Podcast	104,521		96,707		8.1	%	195,145		173,518		12.5	%
Digital Audio Group	285,614		260,854		9.5	%	524,582		484,250		8.3	%
Audio & Media Services Group	70,082		65,804		6.5	%	139,250		127,155		9.5	%
Eliminations	(2,511)		(2,588)				(5,072)		(5,109)
Revenue, total	$	929,092	$	920,014	1.0	%	$	1,728,130	$	1,731,253	(0.2)	%

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

Revenue

Consolidated revenue increased $9.1 million during the three months ended June 30, 2024 compared to the same period of 2023. Multiplatform Group revenue decreased $20.0 million, or 3.4%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenues and political revenues as 2024 is a presidential election year. Digital Audio Group revenue increased $24.8 million, or 9.5%, driven primarily by continuing increases in demand for digital advertising. Audio & Media Services revenue increased $4.3 million, or 6.5%, primarily as a result of higher political revenue.

Consolidated revenue decreased $3.1 million during the six months ended June 30, 2024 compared to the same period of 2023. Multiplatform Group revenue decreased $55.6 million, or 4.9%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenues and political revenues as 2024 is a presidential election year. Digital Audio Group revenue increased $40.3 million, or 8.3%, driven primarily by continuing increases in demand for digital advertising. Audio & Media Services revenue increased $12.1 million, or 9.5%, primarily as a result of contract termination fees earned by Katz Media and due to higher political revenue.

Direct Operating Expenses

Consolidated direct operating expenses increased $27.0 million, or 7.6%, during the three months ended June 30, 2024 compared to the same period of 2023. The increase was primarily driven by higher variable content costs, including higher profit sharing expenses and third-party digital costs related to the increase in digital revenues and an increase in music license fees, as well as an increase in event costs related to the timing of the iHeartRadio Music Awards which was in the second quarter of 2024 and the first quarter of 2023.

Consolidated direct operating expenses increased $23.7 million, or 3.4%, during the six months ended June 30, 2024 compared to the same period of 2023. The increase was primarily driven by higher variable content costs, including higher profit sharing expenses and third-party digital costs related to the increase in digital revenues and an increase in broadcast music license fees, partially offset by lower broadcast profit sharing expense.

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

Consolidated SG&A expenses increased $37.8 million, or 9.6%, during the three months ended June 30, 2024 compared to the same period of 2023. The increase was driven primarily by higher non-cash trade expense due to the timing of the iHeartRadio Music Awards which was in the second quarter of 2024 and the first quarter of 2023 and an increase in costs incurred in connection with executing on our cost savings initiatives, partially offset by lower bad debt expense and lower bonus expense based on results.

Consolidated SG&A expenses increased $20.2 million, or 2.5%, during the six months ended June 30, 2024 compared to the same period of 2023. The increase was driven primarily by an increase in certain costs incurred in connection with executing on our cost savings initiatives and higher non-cash trade and barter expense primarily related to the 2024 iHeartRadio Music Awards, partially offset by lower bonus expense based on results.

Depreciation and Amortization

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

Impairment Charges

During the three months ended June 30, 2024 and 2023, we recorded non-cash impairment charges of $920.2 million and $960.6 million, respectively, primarily to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values. During the six months ended June 30, 2024 and 2023, we recorded non-cash impairment charges of $921.7 million and $964.5 million, respectively, primarily to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values. The impairment charges resulted from the economic uncertainty due to inflation and higher interest rates that has had an adverse impact on our results, and has resulted in a significant decrease in the trading values of our debt and equity securities for a sustained period. See Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill, to the consolidated financial statements located in Item 1 of this Quarterly Report on Form 10-Q for a further description of the impairment charges.

Interest Expense, net

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

Gain (Loss) on Investments, Net

During the three months ended June 30, 2024, we recognized a loss on investments, net of $0.4 million, related to declines in the value of our investments. During the six months ended June 30, 2024, we recognized a gain on investments, net of $91.6 million, primarily due to the $101.4 million gain recognized on the sale of our investment in BMI in the first quarter of 2024, partially offset by declines in the value of certain investments.

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

Gain on Extinguishment of Debt

During the three months ended June 30, 2023, we recognized a gain on extinguishment of debt of $22.9 million in connection with the open market repurchases of $79.9 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $57.0 million in cash. During the six months ended June 30, 2023, we recognized a gain on extinguishment of debt of $27.5 million in connection with the open market repurchases of $99.9 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $72.4 million in cash. There were no repurchases during the three and six months ended June 30, 2024.

Income Tax Benefit

The effective tax rates for the Company for the three and six months ended June 30, 2024 were 2.4% and 4.3%, respectively. The effective tax rates were primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company’s ability to utilize those assets in future periods, as well as by impairment charges to non-deductible goodwill recorded during the second quarter, as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill. The deferred tax benefit primarily consists of $77.3 million related to the FCC license impairment charges recorded during the second quarter of 2024. The deferred benefit was partially offset by deferred tax expense recorded for valuation allowances against certain deferred tax assets.

Net Loss Attributable to the Company

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

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

Multiplatform Group Results


(In thousands)	Three Months Ended June 30,						%		Six Months Ended June 30,						%
	2024			2023			Change		2024			2023			Change
Revenue	$	575,907		$	595,944		(3.4)	%	$	1,069,370		$	1,124,957		(4.9)	%


Operating expenses(1)	471,644			433,542			8.8	%	887,925			875,503			1.4	%
Segment Adjusted EBITDA	$	104,263		$	162,402		(35.8)	%	$	181,445		$	249,454		(27.3)	%
Segment Adjusted EBITDA margin	18.1		%	27.3		%			17.0		%	22.2		%

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

Three Months

Revenue from our Multiplatform Group decreased $20.0 million compared to the prior year primarily due to a decrease in broadcast and networks advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenue and political revenues. Broadcast revenue declined $3.7 million, or 0.9%, year-over-year, driven by lower spot revenue, partially offset by an increase in non-cash trade revenues and political advertising. Networks declined $15.6 million, or 12.8%, year-over-year due primarily to the impact of non-returning advertisers. Revenue from Sponsorship and Events increased $0.9 million, or 2.4%, year-over-year.

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

Six Months

Revenue from our Multiplatform Group decreased $55.6 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenue and political revenues. Broadcast revenue declined $27.6 million, or 3.4%, year-over-year, driven by lower spot revenue, partially offset by an increase in political advertising and non-cash trade revenues. Networks declined $21.5 million, or 9.3%, year-over-year due primarily to the impact of non-returning advertisers. Revenue from Sponsorship and Events decreased 3.8 million, or 5.4%, year-over-year.

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

Digital Audio Group Results


(In thousands)	Three Months Ended June 30,						%		Six Months Ended June 30,						%
	2024			2023			Change		2024			2023			Change
Revenue	$	285,614		$	260,854		9.5	%	$	524,582		$	484,250		8.3	%


Operating expenses(1)	193,744			176,272			9.9	%	364,585			345,549			5.5	%
Segment Adjusted EBITDA	$	91,870		$	84,582		8.6	%	$	159,997		$	138,701		15.4	%
Segment Adjusted EBITDA margin	32.2		%	32.4		%			30.5		%	28.6		%

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

Three Months

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

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

Six Months

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

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

Audio & Media Services Group Results


(In thousands)	Three Months Ended June 30,						%		Six Months Ended June 30,						%
	2024			2023			Change		2024			2023			Change
Revenue	$	70,082		$	65,804		6.5	%	$	139,250		$	127,155		9.5	%


Operating expenses(1)	46,233			47,305			(2.3)	%	91,706			93,312			(1.7)	%
Segment Adjusted EBITDA	$	23,849		$	18,499		28.9	%	$	47,544		$	33,843		40.5	%
Segment Adjusted EBITDA margin	34.0		%	28.1		%			34.1		%	26.6		%

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

Three Months

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

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

Six Months

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

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

Reconciliation of Operating loss to Adjusted EBITDA


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating loss	$	(909,667)	$	(897,194)	$	(944,375)	$	(946,056)
Depreciation and amortization	104,356		108,065		209,518		216,577
Impairment charges	920,224		960,570		921,732		964,517
Other operating (income) expense, net	516		(261)		1,088		(40)
Restructuring expenses	27,558		10,789		51,161		30,243
Share-based compensation expense	7,220		9,212		15,700		19,364
Adjusted EBITDA(1)	$	150,207	$	191,181	$	254,824	$	284,605

Reconciliation of Net loss to EBITDA and Adjusted EBITDA


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(981,989)	$	(882,982)	$	(1,000,097)	$	(1,105,345)
Income tax benefit	(23,959)		(96,357)		(44,621)		(20,252)
Interest expense, net	95,577		98,693		191,092		194,150
Depreciation and amortization	104,356		108,065		209,518		216,577
EBITDA	$	(806,015)	$	(772,581)	$	(644,108)	$	(714,870)
(Gain) loss on investments, net	412		6,038		(91,582)		12,543
Gain on extinguishment of debt	—		(22,902)		—		(27,527)
Other expense, net	231		272		727		371
Equity in loss of nonconsolidated affiliates	61		44		106		4
Impairment charges	920,224		960,570		921,732		964,517
Other operating (income) expense, net	516		(261)		1,088		(40)
Restructuring expenses	27,558		10,789		51,161		30,243
Share-based compensation expense	7,220		9,212		15,700		19,364
Adjusted EBITDA(1)	$	150,207	$	191,181	$	254,824	$	284,605

(1)We define Adjusted EBITDA as consolidated Operating loss adjusted to exclude restructuring expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations: Depreciation and amortization, Impairment charges and Other operating (income) expense, net. Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Income tax benefit, Interest expense, net, Depreciation and amortization, (Gain) loss on investments, net, Gain on extinguishment of debt, Other expense, net, Equity in loss of nonconsolidated affiliates, Impairment charges, Other operating (income) expense, net, Share-based compensation expense, and restructuring expenses. 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. 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. We

believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates. In addition, we believe this measure is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry. Since Adjusted EBITDA is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, operating loss or net loss as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies. 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 (used for) operating activities to Free Cash Flow


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cash provided by (used for) operating activities	$	26,729	$	56,772	$	(32,548)	$	(37,211)
Purchases of property, plant and equipment	(21,172)		(22,773)		(42,754)		(61,938)
Free cash flow(1)	$	5,557	$	33,999	$	(75,302)	$	(99,149)

(1)We define Free cash flow ("Free Cash Flow") as Cash provided by (used for) operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows. We use Free Cash Flow, among other measures, to evaluate the Company’s liquidity and its ability to generate cash flow. We believe that Free Cash Flow is meaningful to investors because we review cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered to be a necessary component of ongoing operations. 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. Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.

Share-Based Compensation Expense

On April 21, 2021, our 2021 Long-Term Incentive Award Plan (the "2021 Plan") was approved by stockholders and replaced the prior plan. On February 23, 2023, our Board adopted an amendment to the 2021 Plan, which provided for an increase to the shares authorized for issuance under the 2021 Plan. At our 2023 Annual Meeting of Stockholders, the amendment was approved. Pursuant to our 2021 Plan, we may grant restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.

Share-based compensation expenses are recorded in SG&A expenses and were $7.2 million and $9.2 million for the three months ended June 30, 2024 and 2023, respectively. Share-based compensation expenses were $15.7 million and $19.4 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, there was $44.8 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions. This cost is expected to be recognized over a weighted average period of approximately 1.7 years and assumes Performance RSUs will be fully earned at target. See Note 8, Stockholders' Deficit, for more information.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

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


(In thousands)	Six Months Ended June 30,
	2024		2023
Cash provided by (used for):
Operating activities	$	(32,548)	$	(37,211)
Investing activities	55,871		(59,260)
Financing activities	(4,816)		(74,875)
Free Cash Flow(1)	(75,302)		(99,149)

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

Operating Activities

Cash used for operating activities was $32.5 million during the six months ended June 30, 2024 compared to $37.2 million during the six months ended June 30, 2023. The improvement was primarily due to an improvement in the timing of receivable collections, largely offset by a decrease in revenue from our Multiplatform Group, and an increase in cash bonus payments in 2024 compared to 2023.

Investing Activities

Cash provided by investing activities of $55.9 million during the six months ended June 30, 2024 primarily reflects $101.4 million of proceeds received from the sale of our investment in BMI, partially offset by $42.8 million in cash used for capital expenditures. For capital expenditures during the period, we spent $24.6 million in our Multiplatform Group segment primarily related to our IT infrastructure and real estate optimization initiatives, $11.1 million in our Digital Audio Group segment primarily related to IT infrastructure, $4.5 million in our Audio & Media Services Group segment, primarily related to software, and $2.6 million in Corporate primarily related to equipment and software purchases.

Cash used for investing activities of $59.3 million during the six months ended June 30, 2023 primarily reflects $61.9 million in cash used for capital expenditures. For capital expenditures during the period, we spent $41.3 million in our Multiplatform Group segment primarily related to our real estate optimization initiatives, $11.3 million in our Digital Audio Group segment primarily related to IT infrastructure, $4.8 million in our Audio & Media Services Group segment, primarily related to software, and $4.6 million in Corporate primarily related to equipment and software purchases.

Financing Activities

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

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

Sources of Liquidity and Anticipated Cash Requirements

Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $364.7 million as of June 30, 2024, cash flows from operations and borrowing capacity under our $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (the "ABL Facility"). As of June 30, 2024, iHeartCommunications had no amounts outstanding under the ABL Facility, a facility size of $450.0 million and $23.7 million in outstanding letters of credit, resulting in $426.3 million of borrowing base availability. Our total available liquidity1 as of June 30, 2024 was $791.0 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 six months ended June 30, 2024, our revenues increased compared to the six months ended June 30, 2023 primarily due to revenue growth in our Digital Audio Group, among other factors discussed in the Results of Operations section of the MD&A. 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.

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Consolidated Balance Sheet as of June 30, 2024, while others are considered future commitments. Our contractual obligations primarily consist of long-term debt and related interest payments, commitments under non-cancelable operating lease agreements, and employment and talent contracts. In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2024 will be to fund our working capital and maintain operations, make interest and tax payments, fund capital expenditures, make voluntary debt repayments and pursue other strategic opportunities.

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

We acknowledge the challenges posed by the market uncertainty as a result of global economic and geo-political conditions, current levels of interest rates, the continuing impact of inflation on consumer spending and in turn, advertising spend, and other macroeconomic trends. 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. If these sources of liquidity need to be augmented, additional cash requirements would likely be financed through the issuance of debt or equity securities; however, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms or at all in the future.

We frequently evaluate strategic opportunities. 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.

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.

Summary Debt Capital Structure

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


(In thousands)	June 30, 2024		December 31, 2023
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	—		—
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	3,159		3,367
Total Secured Debt	$	4,318,411	$	4,318,619

8.375% Senior Unsecured Notes due 2027	916,357		916,357
Other Subsidiary Debt	694		—
Original issue discount	(6,003)		(7,558)
Long-term debt fees	(10,644)		(12,268)
Total Debt	$	5,218,815	$	5,215,150
Less: Cash and cash equivalents	364,744		346,382
Net Debt1	$	4,854,071	$	4,868,768

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.

Our ABL Facility contains a springing fixed charge coverage ratio that is effective if certain triggering events related to borrowing capacity under the ABL Facility occur. As of June 30, 2024, no triggering event had occurred and, as a result, we were not required to comply with any fixed charge coverage ratio as of or for the period ended June 30, 2024. Other than our ABL Facility, none of our long-term debt includes maintenance covenants that could trigger early repayment. As of June 30, 2024, we were in compliance with all covenants related to our debt agreements. 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. We or our subsidiaries may also sell certain assets, securities, or properties. These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations. These transactions could also require or result in amendments to the agreements governing outstanding debt obligations or changes in our leverage or other financial ratios, which could have a material positive or negative impact on our ability to comply with the covenants contained in iHeartCommunications’ debt agreements. These transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Supplemental Financial Information under Debt Agreements

Pursuant to iHeartCommunications' material debt agreements, iHeartMedia Capital I, LLC ("Capital I"), the parent guarantor and a subsidiary of iHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of the material differences between iHeartMedia’s consolidated financial information, on the one hand, and the financial information of Capital I and its consolidated restricted subsidiaries, on the other hand. Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the three and six months ended June 30, 2024, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period. Further, as of June 30, 2024, we were in compliance with all covenants related to our debt agreements.

Commitments, Contingencies and Guarantees

We are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued our estimate of the probable costs for 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 our assumptions or the effectiveness of our strategies related to these proceedings. Please refer to “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q.

Certain agreements relating to acquisitions provide for purchase price adjustments and other future contingent payments based on the financial performance of the acquired companies generally over a one to five-year period. The aggregate of these contingent payments, if performance targets are met, would not significantly impact our financial position or results of operations.

We have future cash obligations under various types of contracts. We lease office space, certain broadcast facilities and equipment. Some of our lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price index), as well as provisions for our payment of utilities and maintenance. We also have non-cancellable contracts in our radio broadcasting operations related to program rights and music license fees. In the normal course of business, our broadcasting operations have minimum future payments associated with employee and talent contracts. These contracts typically contain cancellation provisions that allow us to cancel the contract with good cause.

SEASONALITY

Typically, our businesses experience their lowest financial performance in the first quarter of the calendar year. We expect this trend to continue in the future. Due to this seasonality and certain other factors, the results for the interim periods may not be indicative of results for the full year. In addition, we are impacted by political cycles and generally experience higher revenues in congressional election years, and particularly in presidential election years. This may affect the comparability of results between years.

MARKET RISK

We are exposed to market risks arising from changes in market rates and prices, including movements in interest rates, foreign currency exchange rates and inflation.

Interest Rate Risk

A significant amount of our long-term debt bears interest at variable rates. Additionally, certain assumptions used within management's estimates are impacted by changes in interest rates. Accordingly, our earnings will be affected by changes in interest rates. As of June 30, 2024, approximately 43% of our aggregate principal amount of long-term debt bore interest at floating rates. Assuming the current level of borrowings and assuming a 100 bps change in floating interest rates, it is estimated that our interest expense for the six months ended June 30, 2024 would have changed by $11.5 million.

In the event of an adverse change in interest rates, management may take actions to mitigate our exposure. However, due to the uncertainty of the actions that would be taken and their possible effects, the preceding interest rate sensitivity analysis assumes no such actions. Further, the analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.

Inflation

Inflation is a factor in our business and we continue to seek ways to mitigate its effect. Inflation has affected our performance in terms of higher costs for employee compensation, equipment and third party services. Although we are unable to determine the exact impact of inflation, we believe the impact will continue to be immaterial considering the actions we may take in response to these higher costs that may arise as a result of inflation.

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 could 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; and

•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.

Goodwill

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.

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, debt repurchases, our business plans, strategies and initiatives, benefits of acquisitions and dispositions, our expectations about certain markets and businesses, expected cash interest payments, future impairment charges and our anticipated financial performance and liquidity. Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables which could impact our future performance. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Actual future events and performance may differ materially from the expectations reflected in our forward-looking statements. We do not intend, nor do we undertake any duty, to update any forward-looking statements.

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;

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

•technological changes and innovations;

•shifts in population and other demographics;

•the impact of our substantial indebtedness;

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

•legislative or regulatory requirements;

•the impact of legislation, ongoing litigation or royalty audits on music licensing and royalties;

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

•risks related to our Class A common stock;

•regulations impacting our business and the ownership of our securities; and

•certain other factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by other filings with the Securities and Exchange Commission (“SEC”).

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Required information is presented under “Market Risk” within Item 2 of this Part I.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2024. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in a variety of legal proceedings in the ordinary course of business and a large portion of our 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. As required, we 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 our assumptions or the effectiveness of our 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 our financial condition or results of operations.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth our purchases of shares of our Class A common stock made during the quarter ended June 30, 2024:


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 through April 30	14,725	$	2.21	—	$	—
May 1 through May 31	503,466	1.28		—	—
June 1 through June 30	621	1.12		—	—
Total	518,812	$	1.31	—	$	—

(1)The shares indicated consist of shares of our Class A common stock tendered by employees to us during the three months ended June 30, 2024 to satisfy the employees’ tax withholding obligation in connection with the vesting and release of restricted stock, which are repurchased by us based on their fair market value on the date the relevant transaction occurs.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a)None.

(b)None.

(c)During the three months ended June 30, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS


Exhibit Number						Description
3.1						Fifth Amended and Restated Certificate of Incorporation of iHeartMedia, Inc. (incorporated by reference to Exhibit 3.1 of iHeartMedia, Inc.’s Current Report on Form 8-K filed on May 2, 2019).
3.2						Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation of iHeartMedia, Inc. (incorporated by reference to Exhibit 3.1 of iHeartMedia, Inc.’s Current Report on Form 8-K filed on June 5, 2024).
3.3						Third Amended and Restated Bylaws of iHeartMedia, Inc. (incorporated by reference to Exhibit 3.2 of iHeartMedia, Inc.’s Annual Report on Form 10-K filed on February 25, 2021).
10.1*						Director Deferred Compensation Plan
31.1*						Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*						Inline XBRL Taxonomy Extension Schema Document
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*						Inline XBRL Taxonomy Extension Definition Document
104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

____________

* Filed herewith.

** Furnished herewith.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		IHEARTMEDIA, INC.

Date:	August 8, 2024	/s/ SCOTT D. HAMILTON
		Scott D. Hamilton
		Senior Vice President, Chief Accounting Officer and Assistant Secretary

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Date	Price Target	Rating	Analyst
11/12/2024	$1.00 → $3.00	Underperform → Neutral	BofA Securities
3/28/2023	$6.50 → $4.00	Neutral → Underperform	BofA Securities
3/1/2023		Outperform → Mkt Perform	Barrington Research
3/1/2023	$10.00 → $5.00	Neutral → Underweight	JP Morgan
8/10/2022	$15.00 → $9.00	Buy → Neutral	Goldman
7/8/2022	$23.00 → $9.00	Overweight → Equal Weight	Wells Fargo
6/24/2022	$30.00 → $10.00	Buy → Neutral	BofA Securities
6/10/2022	$25.00 → $11.00	Equal-Weight → Underweight	Morgan Stanley

SEC Form 10-Q filed by iHeartMedia Inc.

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