iHeartMedia Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
IHRT$1.77-5.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001400891-24-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001400891-24-000036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 194 current paragraphs.
117 unchanged; 54 reworded; 22 added; 16 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
We perform our annual impairment test on goodwill and indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year. No impairment was required as part of the 2024 or 2023 annual impairment testing.
Current report
•Multiplatform Group Revenue decreased $6.8 million, or 1.1%, and Segment Adjusted EBITDA decreased $32.6 million, or 20.1%, compared to the prior year's third quarter, respectively.
Current report
•Digital Audio Group Revenue increased $33.8 million, or 12.7%, and Segment Adjusted EBITDA increased $6.3 million, or 6.8%, compared to the prior year's third quarter, respectively.
Current report
•Operating income of $76.7 million increased $7.7 million from $69.0 million in the prior year’s third quarter.
Current report
•Net loss of $41.3 million increased $32.3 million from $9.0 million in the prior year's third quarter.
Current report
•Free cash flow(2) of $73.3 million increased from $67.7 million in the prior year's third quarter.
Current report
We perform our annual impairment test on our goodwill and FCC licenses as of July 1 of each year. No impairment was required as part of the 2024 or 2023 annual impairment tests for our goodwill or FCC licenses.
Current report
Income Tax Benefit (Expense)
Current report
Net loss attributable to the Company of $1,041.4 million during the nine months ended September 30, 2024 reflected an improvement of $74.4 million compared to Net loss attributable to the Company of $1,115.8 million during the nine months ended September 30, 2023, primarily due to the $101.4 million gain recognized on the sale of our investment in BMI in the first quarter of 2024.
Current report
Operating expenses increased $25.7 million, driven primarily by higher non-cash trade expense related to the 2024 Summer Olympics and the 2024 iHeartRadio Music Festival, an increase in broadcast music license fees, and an increase in tower rent as a result of the tower sale leaseback transaction completed at the end of the third quarter of 2023.
Current report
Operating expenses increased $27.5 million, primarily driven by higher variable content costs, including higher podcast profit sharing and third-party digital costs related to the increase in revenues.
Current report
Operating expenses increased $46.5 million, primarily driven by higher variable content costs, including higher podcast profit sharing and third-party digital costs related to the increase in revenues.
Current report
Operating expenses increased $0.6 million, primarily driven by higher sales commissions related to the increased demand for digital advertising.
Current report
Operating expenses decreased $1.0 million primarily as a result of our cost savings initiatives, partially offset by higher sales commissions related to increased demand for digital advertising.
Current report
In September 2023, we sold 122 of our broadcast tower sites and related assets for net proceeds of $45.3 million. We simultaneously leased back space on 121 of the broadcast towers and related assets under long-term operating leases.
Current report
Transaction Support Agreement and Exchange Offer
Current report
On November 6, 2024, we entered into a Transaction Support Agreement (the “TSA”) with certain lenders and holders (or their managers, advisors, or sub-advisors) of iHeartCommunications' outstanding notes and term loans (collectively, the “Supporting Holders”). The Supporting Holders represent approximately 77% of the aggregate principal amount of iHeartCommunications’ outstanding senior secured notes due 2026, 79% of the aggregate principal amount of our outstanding senior secured notes due 2027, 38% of the aggregate principal amount of our outstanding senior secured notes due 2028, 71% of the aggregate principal amount of our outstanding senior unsecured notes due 2027, and 92% of the aggregate principal amount of our outstanding term loans (collectively, the “Existing Debt”).
Current report
We and the Supporting Holders have agreed to the terms of, and to support, (i) exchange offer transactions that will be offered to all holders of the Existing Debt, consisting of two alternative exchange transaction structures, each of which will extend the maturity of the Existing Debt tendered in the exchange offer transactions by three years, and (ii) concurrent consent solicitations to amend certain provisions in the indentures and credit agreement governing the Existing Debt. In the first
Current report
transaction structure, if certain thresholds of holder participation are met, iHeartCommunications will issue new secured debt in exchange for the Existing Debt held by participating holders. Alternatively, if certain thresholds of holder participation are not met, newly-formed subsidiaries of the Company holding certain transferred assets and an intercompany note (to be issued by iHeartMedia + Entertainment, Inc., a wholly owned subsidiary of iHeartCommunications) will issue new secured debt in exchange for the Existing Debt held by participating holders. Completion of either exchange transaction will result in a strengthened financial position, providing us with additional flexibility to execute on our strategy and business initiatives.
Current report
The TSA may be terminated under various circumstances, including if the exchange offer transactions are not consummated on or before December 31, 2024, unless such date is extended pursuant to the terms of the TSA.
Current report
Concurrently with entry into the TSA, we also entered into an amendment to our ABL Facility (the “ABL Amendment”) to, among other things, permit both exchange transaction alternatives and other transactions related to the exchange, amend certain of the covenants, default provisions contained therein, and increase the interest rate on the ABL Facility by (a) if the first transaction is consummated, 0.50%, and (b) if the alternative transaction is consummated, 1.00%. The amendments contained in the ABL Amendment will become effective upon the satisfaction or waiver of certain conditions, including the consummation of one of the transactions contemplated by the TSA. We anticipate commencing the exchange offer in the near term.
Current report
The amount of anticipated cash payments will vary depending on the transaction structure and level of participation and will include partial cash consideration, accrued interest on participating debt, and transaction fees and expenses. We estimate total cash payments to range from $250 million to $295 million.
Removed paragraphs (16)
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
•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.
Previous report
•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.
Previous report
•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.
Previous report
•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.
Previous report
•Free cash flow(2) of $5.6 million decreased from $34.0 million in the prior year's second quarter.
Previous report
Income Tax Benefit
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Reworded paragraphs (54)
Previous wording
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.
Current wording
Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions, which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service. In addition, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically priced the highest. 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.
Previous wording
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.
Current wording
In the first three quarters of 2024, we implemented operating expense savings initiatives to change and streamline our organization, increase automation and use of technology, examine our sourcing strategies, and leverage our scale to drive greater efficiency. We have incurred certain costs in connection with executing on these initiatives and we continue to explore opportunities for further efficiencies.
Previous wording
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.
Current wording
Economic uncertainty due to inflation and higher interest rates since 2022 has resulted in, among other things, lower advertising spending by businesses. This economic uncertainty has delayed our expected recovery and has had an adverse impact on the Company's revenues, cash flows, and the trading values of the Company's debt and equity securities for a sustained period. This challenging environment could continue to have a significant impact on our financial results. We therefore performed interim impairment tests as of June 30, 2024 on our indefinite-lived Federal Communication Commission ("FCC") licenses and goodwill. The June 30, 2024 testing resulted in non-cash impairment charges of $304.1 million and $616.1 million to reduce the FCC license and goodwill balances, respectively.
Previous wording
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.
Current wording
Consolidated revenues for the third quarter of 2024 increased due to a continued increase in demand for digital advertising and increased political revenues as 2024 is a presidential election year, partially offset by lower spending on radio advertising as a result of continued uncertain market conditions.
Previous wording
•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.
Current wording
•Consolidated Revenue of $1,008.1 million increased $55.1 million, or 5.8%, during the quarter ended September 30, 2024 compared to Consolidated Revenue of $953.0 million in the prior year's third quarter.
Previous wording
•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.
Current wording
•Audio & Media Services Group Revenue increased $28.1 million, or 45.3%, and Segment Adjusted EBITDA increased $27.4 million, or 161.6%, compared to the prior year's third quarter, respectively, primarily driven by an increase in political revenue.
Previous wording
•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.
Current wording
•Cash flows provided by operating activities of $102.8 million increased from cash flow provided by operating activities of $96.2 million in the prior year's third quarter.
Previous wording
•Adjusted EBITDA(1) of $150.2 million, was down $41.0 million from $191.2 million in prior year's second quarter.
Current wording
•Adjusted EBITDA(1) of $204.6 million, was up $0.8 million from $203.8 million in prior year's third quarter.
Previous wording
(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.
Current wording
(1)For a definition of Adjusted EBITDA and a reconciliation to Operating income, the most closely comparable U.S. generally accepted accounting principles ("GAAP") measure, and to Net loss, please see "Reconciliation of Operating income to Adjusted EBITDA" and "Reconciliation of Net loss to EBITDA and Adjusted EBITDA" in this MD&A.
Previous wording
(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.
Current wording
(2)For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free cash flow” in this MD&A.
Previous wording
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:
Current wording
The table below presents the comparison of our revenue streams for the three and nine months ended September 30, 2024 to the three and nine months ended September 30, 2023:
Previous wording
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:
Current wording
Consolidated results for the three and nine months ended September 30, 2024 compared to the consolidated results for the three and nine months ended September 30, 2023 were as follows:
Previous wording
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.
Current wording
Consolidated revenue increased $55.1 million during the three months ended September 30, 2024 compared to the same period of 2023 primarily due to increases in Digital Audio Group revenue and political revenue as 2024 is a presidential election year. Multiplatform Group revenue decreased $6.8 million, or 1.1%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by increases in political revenues and non-cash trade revenues. Digital Audio Group revenue increased $33.8 million, or 12.7%, driven primarily by continuing increases in demand for digital advertising. Audio & Media Services revenue increased $28.1 million, or 45.3%, primarily as a result of higher political revenue and an increase in digital revenue.
Previous wording
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.
Current wording
Consolidated revenue increased $52.0 million during the nine months ended September 30, 2024 compared to the same period of 2023. Multiplatform Group revenue decreased $62.4 million, or 3.6%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by increases in political revenues as 2024 is a presidential election year, and non-cash trade revenues. Digital Audio Group revenue increased $74.2 million, or 9.9%, driven primarily by continuing increases in demand for digital advertising, including podcast. Audio & Media Services revenue increased $40.2 million, or 21.2%, primarily as a result of higher political revenue, as well as digital revenue and contract termination fees earned by Katz Media.
Previous wording
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.
Current wording
Consolidated direct operating expenses increased $29.7 million, or 7.8%, during the three months ended September 30, 2024 compared to the same period of 2023. The increase was primarily driven by higher variable content costs, including higher third-party digital costs and podcast profit sharing expenses related to the increase in digital revenues.
Previous wording
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.
Current wording
Consolidated direct operating expenses increased $53.5 million, or 5.0%, during the nine months ended September 30, 2024 compared to the same period of 2023. The increase was primarily driven by higher variable content costs, including higher podcast profit sharing expenses and third-party digital costs related to the increase in digital revenues.
Previous wording
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.
Current wording
Consolidated SG&A expenses increased $25.2 million, or 6.4%, during the three months ended September 30, 2024 compared to the same period of 2023. The increase was driven primarily by higher non-cash trade expense related to the 2024 Summer Olympics and the 2024 iHeartRadio Music Festival and an increase in costs incurred in connection with executing on our cost savings initiatives.
Previous wording
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.
Current wording
Consolidated SG&A expenses increased $45.4 million, or 3.8%, during the nine months ended September 30, 2024 compared to the same period of 2023. The increase was driven primarily by higher non-cash trade expense related to the 2024 iHeartRadio Music Awards, the 2024 Summer Olympics, and the 2024 iHeartRadio Music Festival, as well as an increase in certain costs incurred in connection with executing on our cost savings initiatives, partially offset by lower bonus expense based on results and lower bad debt expense.
Previous wording
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.
Current wording
Depreciation and amortization decreased $5.1 million and $12.2 million during the three and nine months ended September 30, 2024 compared to the same periods of 2023, respectively, primarily as a result of a lower fixed asset base due to lower levels of capital expenditures.
Previous wording
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.
Current wording
During the nine months ended September 30, 2024 and 2023, we recorded non-cash impairment charges of $922.1 million and $965.1 million, respectively, primarily to reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values as a result of the interim impairment assessments performed in the second quarter of 2024 and 2023, respectively. The impairment charges resulted from the economic uncertainty due to inflation and higher interest rates that has had an adverse impact on our results and has resulted in a significant decrease in the trading values of our debt and equity securities for a sustained period.
Previous wording
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.
Current wording
Interest expense decreased $3.8 million and $6.9 million during the three and nine months ended September 30, 2024 compared to the same periods of 2023 primarily as a result of the lower outstanding aggregate principal of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 due to the repurchases of $204.0 million of the notes for $147.3 million in cash during 2023.
Previous wording
During the three months ended June 30, 2024, we recogn ized a loss on investments, net of$0.4 million, related to declines in the value of our investments. During thesix months ended June 30, 2024, we recognized a gain on investments, net of $91.6 million, primarilydue 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.
Current wording
During thenine months ended September 30, 2024, we recognized a gain on investments, net of $91.5 million, primarilydue to the$101.4 million gain recognized on the sale of our investment in Broadcast Music, Inc. ("BMI") in the first quarter of 2024, partially offset by declines in the value of certain investments.
Previous wording
During the three and six months ended June 30, 2023, we recogn ized a loss on investments, net of $6.0 million and $12.5 million, respectively, related to declines in the value of our investments.
Current wording
During the three and nine months ended September 30, 2023, we recogn ized a loss on investments, net of $7.4 million and $19.9 million, respectively, related to declines in the value of certain investments.
Previous wording
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.
Current wording
During the three months ended September 30, 2023, we recognized a gain on extinguishment of debt of $23.9 million in connection with the open market repurchases of $89.1 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $65.2 million in cash. During the nine months ended September 30, 2023, we recognized a gain on extinguishment of debt of $51.5 million in connection with the open market repurchases of $189.0 million aggregate principal amount of iHeartCommunications, Inc.'s 8.375% Senior Unsecured Notes due 2027 for $137.5 million in cash. There were no repurchases during the three and nine months ended September 30, 2024.
Previous wording
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.
Current wording
The effective tax rates for the Company for the three and nine months ended September 30, 2024 were (101.7)% and 2.2%, respectively. The three month effective tax rate was primarily impacted by changes in the forecasted increase in valuation allowances recorded against certain deferred tax assets, related primarily to disallowed interest expense carryforwards due to uncertainty regarding the Company’s ability to utilize those assets in future periods. The nine month effective tax rate was primarily impacted by impairment charges to non-deductible goodwill recorded during the second quarter of 2024, as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill.
Previous wording
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.
Current wording
The effective tax rates for the Company for the three and nine months ended September 30, 2023 were 50.8% and 2.6%, respectively. The three month effective tax rate was primarily impacted by the forecasted increase in valuation allowance against certain deferred tax assets, related primarily to disallowed interest expense carryforwards, due to uncertainty regarding the Company's ability to utilize those assets in future periods. The nine month effective tax rate was primarily impacted by impairment charges to non-deductible goodwill recorded in the second quarter of 2023.
Previous wording
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.
Current wording
Net loss attributable to the Company of $41.3 million during the three months ended September 30, 2024 reflected an increase of $32.2 million compared to Net loss attributable to the Company of $9.1 million during the three months ended September 30, 2023, primarily due to changes in the valuation allowances recorded against certain deferred tax assets as discussed above.
Previous wording
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.
Current wording
Revenue from our Multiplatform Group decreased $6.8 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in political revenues and non-cash trade revenue. Broadcast revenue declined $6.3 million, or 1.4%, year-over-year, driven by lower spot revenue, partially offset by an increase in political advertising and non-cash trade revenues. Networks declined $1.0 million, or 0.9%, year-over-year. Revenue from Sponsorship and Events increased $0.8 million, or 1.7%, year-over-year.
Previous wording
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.
Current wording
Revenue from our Multiplatform Group decreased $62.4 million compared to the prior year primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in political and non-cash trade revenues. Broadcast revenue declined $33.9 million, or 2.7%, year-over-year, driven by lower spot revenue, partially offset by an increase in political advertising and non-cash trade revenues. Networks declined $22.5 million, or 6.5%, year-over-year due primarily to the impact of non-returning advertisers. Revenue from Sponsorship and Events decreased $3.0 million, or 2.5%, year-over-year.
Previous wording
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.
Current wording
Operating expenses increased $38.2 million, driven primarily by higher non-cash trade expense related to the 2024 Summer Olympics, the 2024 iHeartRadio Music Festival, and the 2024 iHeartRadio Music Awards, as well as higher broadcast music license fees, and an increase in tower rent as a result of the tower sale leaseback transaction completed at the end of the third quarter of 2023.
Previous wording
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.
Current wording
Revenue from our Digital Audio Group increased $33.8 million compared to the prior year, driven by Digital, excluding Podcast revenue, which grew $22.4 million, or 13.6% year-over-year, primarily due to an increase in demand for digital advertising, and Podcast revenue which increased by $11.4 million, or 11.1% year-over-year, primarily due to the continued increase in demand for podcasting from advertisers.
Previous wording
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.
Current wording
Revenue from our Digital Audio Group increased $74.2 million compared to the prior year, driven by Digital, excluding Podcast revenue, which increased $41.1 million, or 8.7% year-over-year, primarily due to an increase in demand for digital advertising, partially offset by a decrease in COVID-19 related advertisers, and Podcast revenue which increased by $33.0 million, or 12.0% year-over-year, primarily due to a continued increase in demand for podcasting from advertisers.
Previous wording
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.
Current wording
Revenue from our Audio & Media Services Group increased $28.1 million compared to the prior year period, primarily due to higher political revenue as 2024 is a presidential election year and increased demand for digital advertising, partially offset by decreases in broadcast advertising.
Previous wording
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.
Current wording
Revenue from our Audio & Media Services Group increased $40.2 million compared to the prior year period primarily due to higher political revenue as 2024 is a presidential election year as well as the increased demand for digital advertising and contract termination fees earned by Katz Media.
Previous wording
Reconciliation of Operating loss to Adjusted EBITDA
Current wording
Reconciliation of Operating income (loss) to Adjusted EBITDA
Previous wording
(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 transaction…
Excerpt shortened here; the source contains the full paragraph.
Current wording
(1)We define Adjusted EBITDA as consolidated Operating income (loss) adjusted to exclude restructuring expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations: Depreciation and amortization, Impairment charges and Other operating expense. Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Income tax (benefit) expense, Interest expense, net, Depreciation and amortization, (Gain) loss on investments, net, Gain on extinguishment of debt, Other (income) expense, net, Equity in loss of nonconsolidated affiliates, Impairment charges, Other operating expense, Share-based compensation expense, and restructuring expenses. Restructuring expenses primarily include expenses incurred in connection with cost-saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle. We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance. This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management. 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 transaction…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
(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.
Current wording
(1)We define Free cash flow ("Free Cash Flow") as Cash provided by operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows. We use Free Cash Flow, among other measures, to evaluate the Company’s liquidity and its ability to generate cash flow. 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.
Previous wording
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.
Current wording
Share-based compensation expenses are recorded in SG&A expenses and were $8.3 million and $8.2 million for the three months ended September 30, 2024 and 2023, respectively. Share-based compensation expenses were $24.0 million and $27.6 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
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.
Current wording
As of September 30, 2024, there was $38.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions. This cost is expected to be recognized over a weighted average period of approximately 1.6 years and assumes Performance RSUs will be fully earned at target. See Note 8, Stockholders' Deficit, for more information.
Previous wording
(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.
Current wording
(1)For a definition of Free Cash Flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free Cash Flow” in this MD&A.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Reconciliation of Cash provided by operating activities to Free Cash Flow
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
Reconciliation of Cash provided by (used for) operating activities to Free Cash Flow