[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019 |
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________
|
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)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A Common Stock
|
"IHRT"
|
The NASDAQ Stock Market LLC
|
|
|
Page No.
|
Part I – Financial Information
|
|
|
Item 1.
|
||
|
||
|
||
|
|
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|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Part II – Other Information
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
(In thousands, except share and per share data)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
September 30,
2019 |
|
|
December 31,
2018 |
||||
|
(Unaudited)
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
277,050
|
|
|
|
$
|
224,037
|
|
Accounts receivable, net of allowance of $8,088 in 2019 and $26,584 in 2018
|
843,190
|
|
|
|
868,861
|
|
||
Prepaid expenses
|
120,981
|
|
|
|
99,532
|
|
||
Other current assets
|
29,942
|
|
|
|
26,787
|
|
||
Current assets of discontinued operations
|
—
|
|
|
|
1,015,800
|
|
||
Total Current Assets
|
1,271,163
|
|
|
|
2,235,017
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
||||
Property, plant and equipment, net
|
834,013
|
|
|
|
502,202
|
|
||
INTANGIBLE ASSETS AND GOODWILL
|
|
|
|
|
||||
Indefinite-lived intangibles - licenses
|
2,277,733
|
|
|
|
2,417,915
|
|
||
Other intangibles, net
|
2,238,423
|
|
|
|
200,422
|
|
||
Goodwill
|
3,325,546
|
|
|
|
3,412,753
|
|
||
OTHER ASSETS
|
|
|
|
|
||||
Operating lease right-of-use assets
|
886,333
|
|
|
|
—
|
|
||
Other assets
|
101,738
|
|
|
|
149,736
|
|
||
Long-term assets of discontinued operations
|
—
|
|
|
|
3,351,470
|
|
||
Total Assets
|
$
|
10,934,949
|
|
|
|
$
|
12,269,515
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
||
Accounts payable
|
$
|
61,353
|
|
|
|
$
|
49,435
|
|
Current operating lease liabilities
|
77,729
|
|
|
|
—
|
|
||
Accrued expenses
|
213,426
|
|
|
|
298,383
|
|
||
Accrued interest
|
91,379
|
|
|
|
767
|
|
||
Deferred revenue
|
138,968
|
|
|
|
123,143
|
|
||
Current portion of long-term debt
|
53,705
|
|
|
|
46,105
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
|
729,816
|
|
||
Total Current Liabilities
|
636,560
|
|
|
|
1,247,649
|
|
||
Long-term debt
|
5,755,305
|
|
|
|
—
|
|
||
Series A Mandatorily Redeemable Preferred Stock, par value $0.001, authorized 60,000 shares, 60,000 shares issued in 2019 and no shares issued in 2018
|
60,000
|
|
|
|
—
|
|
||
Noncurrent operating lease liabilities
|
794,307
|
|
|
|
—
|
|
||
Deferred income taxes
|
783,856
|
|
|
|
—
|
|
||
Other long-term liabilities
|
58,004
|
|
|
|
229,679
|
|
||
Liabilities subject to compromise
|
—
|
|
|
|
16,480,256
|
|
||
Long-term liabilities of discontinued operations
|
—
|
|
|
|
5,872,273
|
|
||
Commitments and contingent liabilities (Note 9)
|
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
||||
Noncontrolling interest
|
8,372
|
|
|
|
30,868
|
|
||
Predecessor Preferred stock, par value $.001 per share, 150,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
|
—
|
|
||
Predecessor common stock
|
—
|
|
|
|
92
|
|
||
Successor Preferred stock, par value $.001 per share, 100,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
|
—
|
|
||
Successor Class A Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, 57,670,714 shares issued and outstanding in 2019 and no shares issued and outstanding in 2018
|
58
|
|
|
|
—
|
|
||
Successor Class B Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, 6,925,976 shares issued and outstanding in 2019 and no shares issued and outstanding in 2018
|
7
|
|
|
|
—
|
|
||
Successor Special Warrants, 81,289,306 issued and outstanding in 2019 and none issued and outstanding in 2018
|
—
|
|
|
|
—
|
|
||
Additional paid-in capital
|
2,790,175
|
|
|
|
2,074,632
|
|
||
Retained earnings (Accumulated deficit)
|
51,167
|
|
|
|
(13,345,346
|
)
|
||
Accumulated other comprehensive loss
|
(827
|
)
|
|
|
(318,030
|
)
|
||
Cost of shares (125,210 in 2019 and 805,982 in 2018) held in treasury
|
(2,035
|
)
|
|
|
(2,558
|
)
|
||
Total Stockholders' Equity (Deficit)
|
2,846,917
|
|
|
|
(11,560,342
|
)
|
||
Total Liabilities and Stockholders' Equity (Deficit)
|
$
|
10,934,949
|
|
|
|
$
|
12,269,515
|
|
(In thousands, except per share data)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Revenue
|
$
|
948,338
|
|
|
|
$
|
920,492
|
|
Operating expenses:
|
|
|
|
|
||||
Direct operating expenses (excludes depreciation and amortization)
|
290,971
|
|
|
|
268,606
|
|
||
Selling, general and administrative expenses (excludes depreciation and amortization)
|
341,353
|
|
|
|
329,436
|
|
||
Corporate expenses (excludes depreciation and amortization)
|
70,044
|
|
|
|
56,699
|
|
||
Depreciation and amortization
|
95,268
|
|
|
|
43,295
|
|
||
Impairment charges
|
—
|
|
|
|
33,150
|
|
||
Other operating expense, net
|
(9,880
|
)
|
|
|
(2,462
|
)
|
||
Operating income
|
140,822
|
|
|
|
186,844
|
|
||
Interest expense, net
|
100,967
|
|
|
|
2,097
|
|
||
Gain on investments, net
|
1,735
|
|
|
|
186
|
|
||
Equity in loss of nonconsolidated affiliates
|
(1
|
)
|
|
|
(30
|
)
|
||
Other expense, net
|
(12,457
|
)
|
|
|
(281
|
)
|
||
Reorganization items, net
|
—
|
|
|
|
(52,475
|
)
|
||
Income from continuing operations before income taxes
|
29,132
|
|
|
|
132,147
|
|
||
Income tax expense
|
(16,758
|
)
|
|
|
(10,873
|
)
|
||
Income from continuing operations
|
12,374
|
|
|
|
121,274
|
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
|
(49,491
|
)
|
||
Net income
|
12,374
|
|
|
|
71,783
|
|
||
Less amount attributable to noncontrolling interest
|
—
|
|
|
|
1,705
|
|
||
Net income attributable to the Company
|
$
|
12,374
|
|
|
|
$
|
70,078
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(499
|
)
|
|
|
(7,509
|
)
|
||
Reclassification adjustments
|
—
|
|
|
|
1,425
|
|
||
Other comprehensive loss, net of tax
|
(499
|
)
|
|
|
(6,084
|
)
|
||
Comprehensive income
|
11,875
|
|
|
|
63,994
|
|
||
Less amount attributable to noncontrolling interest
|
—
|
|
|
|
(5,212
|
)
|
||
Comprehensive income attributable to the Company
|
$
|
11,875
|
|
|
|
$
|
69,206
|
|
Net income (loss) attributable to the Company per common share:
|
|
|
|
|
||||
Basic net income (loss) per share
|
|
|
|
|
||||
From continuing operations
|
$
|
0.08
|
|
|
|
$
|
1.42
|
|
From discontinued operations
|
—
|
|
|
|
(0.60
|
)
|
||
Basic net income per share
|
$
|
0.08
|
|
|
|
$
|
0.82
|
|
Weighted average common shares outstanding - Basic
|
145,720
|
|
|
|
85,544
|
|
||
Diluted net income (loss) per share
|
|
|
|
|
||||
From continuing operations
|
$
|
0.08
|
|
|
|
$
|
1.42
|
|
From discontinued operations
|
—
|
|
|
|
(0.60
|
)
|
||
Diluted net income per share
|
$
|
0.08
|
|
|
|
$
|
0.82
|
|
Weighted average common shares outstanding - Diluted
|
145,840
|
|
|
|
85,622
|
|
(In thousands, except per share data)
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
|
2019
|
|
2018
|
||||||
Revenue
|
$
|
1,583,984
|
|
|
|
$
|
1,073,471
|
|
|
$
|
2,585,028
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Direct operating expenses (excludes depreciation and amortization)
|
475,262
|
|
|
|
359,696
|
|
|
773,424
|
|
|||
Selling, general and administrative expenses (excludes depreciation and amortization)
|
568,493
|
|
|
|
436,345
|
|
|
1,003,728
|
|
|||
Corporate expenses (excludes depreciation and amortization)
|
104,434
|
|
|
|
66,020
|
|
|
162,075
|
|
|||
Depreciation and amortization
|
154,651
|
|
|
|
52,834
|
|
|
175,546
|
|
|||
Impairment charges
|
—
|
|
|
|
91,382
|
|
|
33,150
|
|
|||
Other operating expense, net
|
(6,634
|
)
|
|
|
(154
|
)
|
|
(6,912
|
)
|
|||
Operating income
|
274,510
|
|
|
|
67,040
|
|
|
430,193
|
|
|||
Interest expense (income), net
|
170,678
|
|
|
|
(499
|
)
|
|
333,843
|
|
|||
Gain (loss) on investments, net
|
1,735
|
|
|
|
(10,237
|
)
|
|
9,361
|
|
|||
Equity in loss of nonconsolidated affiliates
|
(25
|
)
|
|
|
(66
|
)
|
|
(93
|
)
|
|||
Other income (expense), net
|
(21,614
|
)
|
|
|
23
|
|
|
(22,755
|
)
|
|||
Reorganization items, net
|
—
|
|
|
|
9,461,826
|
|
|
(313,270
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
83,928
|
|
|
|
9,519,085
|
|
|
(230,407
|
)
|
|||
Income tax benefit (expense)
|
(32,761
|
)
|
|
|
(39,095
|
)
|
|
9,828
|
|
|||
Income (loss) from continuing operations
|
51,167
|
|
|
|
9,479,990
|
|
|
(220,579
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
|
1,685,123
|
|
|
(206,968
|
)
|
|||
Net income (loss)
|
51,167
|
|
|
|
11,165,113
|
|
|
(427,547
|
)
|
|||
Less amount attributable to noncontrolling interest
|
—
|
|
|
|
(19,028
|
)
|
|
(10,732
|
)
|
|||
Net income (loss) attributable to the Company
|
$
|
51,167
|
|
|
|
$
|
11,184,141
|
|
|
$
|
(416,815
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(827
|
)
|
|
|
(1,175
|
)
|
|
(20,042
|
)
|
|||
Reclassification adjustments
|
—
|
|
|
|
—
|
|
|
1,425
|
|
|||
Other comprehensive loss, net of tax
|
(827
|
)
|
|
|
(1,175
|
)
|
|
(18,617
|
)
|
|||
Comprehensive income (loss)
|
50,340
|
|
|
|
11,182,966
|
|
|
(435,432
|
)
|
|||
Less amount attributable to noncontrolling interest
|
—
|
|
|
|
2,784
|
|
|
(8,829
|
)
|
|||
Comprehensive income (loss) attributable to the Company
|
$
|
50,340
|
|
|
|
$
|
11,180,182
|
|
|
$
|
(426,603
|
)
|
Net income (loss) attributable to the Company per common share:
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share
|
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
0.35
|
|
|
|
109.92
|
|
|
$
|
(2.58
|
)
|
|
From discontinued operations
|
—
|
|
|
|
19.76
|
|
|
(2.30
|
)
|
|||
Basic net income (loss) per share
|
$
|
0.35
|
|
|
|
$
|
129.68
|
|
|
$
|
(4.88
|
)
|
Weighted average common shares outstanding - Basic
|
145,543
|
|
|
|
86,241
|
|
|
85,348
|
|
|||
Diluted net income (loss) per share
|
|
|
|
|
|
|
||||||
From continuing operations
|
$
|
0.35
|
|
|
|
109.92
|
|
|
$
|
(2.58
|
)
|
|
From discontinued operations
|
—
|
|
|
|
19.76
|
|
|
(2.30
|
)
|
|||
Diluted net income (loss) per share
|
$
|
0.35
|
|
|
|
$
|
129.68
|
|
|
$
|
(4.88
|
)
|
Weighted average common shares outstanding - Diluted
|
145,655
|
|
|
|
86,241
|
|
|
85,348
|
|
(In thousands, except share data)
|
|
|
|
|
Controlling Interest
|
|
|
|||||||||||||||||||||||||||||
|
Common Shares(1)
|
|
Non-
controlling
Interest
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
|
|||||||||||||||||||||
|
Class A
Shares |
|
Class B
Shares
|
|
Special Warrants
|
|
|
|
|
|
|
|
Total
|
|||||||||||||||||||||||
Balances at
June 30, 2019 (Successor) |
56,873,782
|
|
|
6,947,567
|
|
|
81,453,648
|
|
|
$
|
8,372
|
|
|
$
|
64
|
|
|
$
|
2,773,147
|
|
|
$
|
38,793
|
|
|
$
|
(328
|
)
|
|
$
|
—
|
|
|
$
|
2,820,048
|
|
Net income
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,374
|
|
|
—
|
|
|
—
|
|
|
12,374
|
|
||||||||||
Vesting of restricted stock
|
610,999
|
|
|
|
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(2,035
|
)
|
|
(2,035
|
)
|
|||||||||
Share-based compensation
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
17,029
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,029
|
|
||||||||||
Conversion of Special Warrants and Class B Shares to Class A Shares
|
185,933
|
|
|
(21,591
|
)
|
|
(164,342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive loss
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
|
—
|
|
|
(499
|
)
|
||||||||||
Balances at
September 30, 2019 (Successor) |
57,670,714
|
|
|
6,925,976
|
|
|
81,289,306
|
|
|
$
|
8,372
|
|
|
$
|
65
|
|
|
$
|
2,790,175
|
|
|
$
|
51,167
|
|
|
$
|
(827
|
)
|
|
$
|
(2,035
|
)
|
|
$
|
2,846,917
|
|
(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
|
|
Class C Shares
|
|
|
|
|
|
|
|
Total
|
|||||||||||||||||||||||
Balances at
June 30, 2018 (Predecessor) |
32,478,591
|
|
|
555,556
|
|
|
58,967,502
|
|
|
$
|
17,861
|
|
|
$
|
92
|
|
|
$
|
2,073,738
|
|
|
$
|
(13,630,329
|
)
|
|
$
|
(321,199
|
)
|
|
$
|
(2,493
|
)
|
|
$
|
(11,862,330
|
)
|
Net income
|
|
|
|
|
|
|
1,705
|
|
|
—
|
|
|
—
|
|
|
70,078
|
|
|
—
|
|
|
—
|
|
|
71,783
|
|
||||||||||
Forfeitures of restricted stock
|
(99,084
|
)
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Share-based compensation
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
456
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
456
|
|
||||||||||
Share-based compensation - discontinued operations
|
|
|
|
|
|
|
3,132
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,132
|
|
||||||||||
Payments to non-controlling interests
|
|
|
|
|
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
||||||||||
Other
|
|
|
|
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|
(68
|
)
|
||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
(5,212
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(872
|
)
|
|
—
|
|
|
(6,084
|
)
|
||||||||||
Balances at
September 30, 2018 (Predecessor) |
32,379,507
|
|
|
555,556
|
|
|
58,967,502
|
|
|
$
|
17,353
|
|
|
$
|
92
|
|
|
$
|
2,074,194
|
|
|
$
|
(13,560,251
|
)
|
|
$
|
(322,071
|
)
|
|
$
|
(2,552
|
)
|
|
$
|
(11,793,235
|
)
|
(In thousands, except share data)
|
|
|
|
|
|
Controlling Interest
|
|
|
|||||||||||||||||||||||||||||||
|
Common Shares(1)
|
|
Non-
controlling
Interest
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings (Accumulated
Deficit) |
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
|
||||||||||||||||||||||||
|
Class A
Shares
|
|
Class B
Shares
|
|
Class C
Shares
|
|
Special Warrants
|
|
|
|
|
|
|
|
Total
|
||||||||||||||||||||||||
Balances at
December 31, 2018 (Predecessor) |
32,292,944
|
|
|
555,556
|
|
|
58,967,502
|
|
|
—
|
|
|
$
|
30,868
|
|
|
$
|
92
|
|
|
$
|
2,074,632
|
|
|
$
|
(13,345,346
|
)
|
|
$
|
(318,030
|
)
|
|
$
|
(2,558
|
)
|
|
$
|
(11,560,342
|
)
|
Net income (loss)
|
|
|
|
|
|
|
|
|
(19,028
|
)
|
|
—
|
|
|
—
|
|
|
11,184,141
|
|
|
—
|
|
|
—
|
|
|
11,165,113
|
|
|||||||||||
Non-controlling interest - Separation
|
|
|
|
|
|
|
|
|
(13,199
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,199
|
)
|
|||||||||||
Accumulated other comprehensive loss - Separation
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
307,813
|
|
|
—
|
|
|
307,813
|
|
|||||||||||
Adoption of ASC 842, Leases
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128,908
|
|
|
—
|
|
|
—
|
|
|
128,908
|
|
|||||||||||
Issuance of restricted stock
|
|
|
|
|
|
|
|
|
|
196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
192
|
|
||||||||||
Forfeitures of restricted stock
|
(110,333
|
)
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Share-based compensation
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
2,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,028
|
|
|||||||||||
Share-based compensation - discontinued operations
|
|
|
|
|
|
|
|
|
2,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,449
|
|
|||||||||||
Payments to non-controlling interests
|
|
|
|
|
|
|
|
|
(3,684
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,684
|
)
|
|||||||||||
Other
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
2,784
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,959
|
)
|
|
—
|
|
|
(1,175
|
)
|
|||||||||||
Cancellation of Predecessor equity
|
(32,182,611
|
)
|
|
(555,556
|
)
|
|
(58,967,502
|
)
|
|
|
|
(386
|
)
|
|
(92
|
)
|
|
(2,076,660
|
)
|
|
2,059,998
|
|
|
14,175
|
|
|
2,562
|
|
|
(403
|
)
|
||||||||
Issuance of Successor common stock and warrants
|
56,861,941
|
|
|
6,947,567
|
|
|
—
|
|
|
81,453,648
|
|
|
8,943
|
|
|
64
|
|
|
2,770,108
|
|
|
(27,701
|
)
|
|
—
|
|
|
—
|
|
|
2,751,414
|
|
|||||||
Balances at
May 1, 2019 (Predecessor) |
56,861,941
|
|
|
6,947,567
|
|
|
—
|
|
|
81,453,648
|
|
|
$
|
8,943
|
|
|
$
|
64
|
|
|
$
|
2,770,108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,779,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balances at
May 2, 2019 (Successor) |
56,861,941
|
|
|
6,947,567
|
|
|
—
|
|
|
81,453,648
|
|
|
$
|
8,943
|
|
|
$
|
64
|
|
|
$
|
2,770,108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,779,115
|
|
Net income
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,167
|
|
|
—
|
|
|
—
|
|
|
51,167
|
|
|||||||||||
Vesting of restricted stock
|
622,840
|
|
|
|
|
|
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(2,035
|
)
|
|
(2,035
|
)
|
||||||||||
Share-based compensation
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
20,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,068
|
|
|||||||||||
Conversion of Special Warrants and Class B Shares to Class A Shares
|
185,933
|
|
|
(21,591
|
)
|
|
|
|
(164,342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
(571
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(571
|
)
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(827
|
)
|
|
—
|
|
|
(827
|
)
|
|||||||||||
Balances at
September 30, 2019 (Successor) |
57,670,714
|
|
|
6,925,976
|
|
|
—
|
|
|
81,289,306
|
|
|
$
|
8,372
|
|
|
$
|
65
|
|
|
$
|
2,790,175
|
|
|
$
|
51,167
|
|
|
$
|
(827
|
)
|
|
$
|
(2,035
|
)
|
|
$
|
2,846,917
|
|
(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
|
|
Class C
Shares
|
|
|
|
|
|
|
|
Total
|
|||||||||||||||||||||||
Balances at
December 31, 2017 (Predecessor) |
32,626,168
|
|
|
555,556
|
|
|
58,967,502
|
|
|
$
|
41,191
|
|
|
$
|
92
|
|
|
$
|
2,072,566
|
|
|
$
|
(13,142,001
|
)
|
|
$
|
(313,718
|
)
|
|
$
|
(2,474
|
)
|
|
$
|
(11,344,344
|
)
|
Net loss
|
|
|
|
|
|
|
(10,732
|
)
|
|
—
|
|
|
—
|
|
|
(416,815
|
)
|
|
—
|
|
|
—
|
|
|
(427,547
|
)
|
||||||||||
Issuance of restricted stock
|
70,000
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Forfeitures of restricted stock
|
(316,661
|
)
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Share-based compensation
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
||||||||||
Share-based compensation - discontinued operations
|
|
|
|
|
|
|
6,757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,757
|
|
||||||||||
Payments to non-controlling interests
|
|
|
|
|
|
|
(10,381
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,381
|
)
|
||||||||||
Other
|
|
|
|
|
|
|
(653
|
)
|
|
—
|
|
|
—
|
|
|
(1,435
|
)
|
|
1,435
|
|
|
(78
|
)
|
|
(731
|
)
|
||||||||||
Other comprehensive income
|
|
|
|
|
|
|
(8,829
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,788
|
)
|
|
—
|
|
|
(18,617
|
)
|
||||||||||
Balances at
September 30, 2018 (Predecessor) |
32,379,507
|
|
|
555,556
|
|
|
58,967,502
|
|
|
$
|
17,353
|
|
|
$
|
92
|
|
|
$
|
2,074,194
|
|
|
$
|
(13,560,251
|
)
|
|
$
|
(322,071
|
)
|
|
$
|
(2,552
|
)
|
|
$
|
(11,793,235
|
)
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
|
2019
|
|
2018
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
51,167
|
|
|
|
$
|
11,165,113
|
|
|
$
|
(427,547
|
)
|
(Income) loss from discontinued operations
|
—
|
|
|
|
(1,685,123
|
)
|
|
206,968
|
|
|||
Reconciling items:
|
|
|
|
|
|
|
||||||
Impairment charges
|
—
|
|
|
|
91,382
|
|
|
33,150
|
|
|||
Depreciation and amortization
|
154,651
|
|
|
|
52,834
|
|
|
175,546
|
|
|||
Deferred taxes
|
25,478
|
|
|
|
115,839
|
|
|
(18,869
|
)
|
|||
Provision for doubtful accounts
|
8,088
|
|
|
|
3,268
|
|
|
14,803
|
|
|||
Amortization of deferred financing charges and note discounts, net
|
672
|
|
|
|
512
|
|
|
11,871
|
|
|||
Non-cash Reorganization items, net
|
—
|
|
|
|
(9,619,236
|
)
|
|
261,057
|
|
|||
Share-based compensation
|
20,151
|
|
|
|
498
|
|
|
1,628
|
|
|||
(Gain) loss on disposal of operating and other assets
|
4,755
|
|
|
|
(143
|
)
|
|
2,739
|
|
|||
(Gain) loss on investments
|
(1,735
|
)
|
|
|
10,237
|
|
|
(9,361
|
)
|
|||
Equity in loss of nonconsolidated affiliates
|
25
|
|
|
|
66
|
|
|
93
|
|
|||
Barter and trade income
|
(7,478
|
)
|
|
|
(5,947
|
)
|
|
(6,228
|
)
|
|||
Other reconciling items, net
|
133
|
|
|
|
(65
|
)
|
|
(768
|
)
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
|
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
(113,848
|
)
|
|
|
117,263
|
|
|
21,092
|
|
|||
Increase in prepaid expenses and other current assets
|
(22,670
|
)
|
|
|
(24,044
|
)
|
|
(18,452
|
)
|
|||
(Increase) decrease in other long-term assets
|
2,545
|
|
|
|
(7,098
|
)
|
|
(8,781
|
)
|
|||
Increase (decrease) in accrued expenses
|
28,266
|
|
|
|
(123,971
|
)
|
|
(42,598
|
)
|
|||
Increase (decrease) in accounts payable
|
16,474
|
|
|
|
(32,914
|
)
|
|
21,898
|
|
|||
Increase in accrued interest
|
91,624
|
|
|
|
256
|
|
|
302,573
|
|
|||
Increase (decrease) in deferred income
|
352
|
|
|
|
13,377
|
|
|
(12,348
|
)
|
|||
Increase (decrease) in other long-term liabilities
|
4,892
|
|
|
|
(79,609
|
)
|
|
7,247
|
|
|||
Cash provided by (used for) operating activities from continuing operations
|
263,542
|
|
|
|
(7,505
|
)
|
|
515,713
|
|
|||
Cash provided by (used for) operating activities from discontinued operations
|
—
|
|
|
|
(32,681
|
)
|
|
147,636
|
|
|||
Net cash provided by (used for) operating activities
|
263,542
|
|
|
|
(40,186
|
)
|
|
663,349
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Proceeds from sale of other investments
|
765
|
|
|
|
—
|
|
|
18,500
|
|
|||
Purchases of property, plant and equipment
|
(46,305
|
)
|
|
|
(36,197
|
)
|
|
(47,448
|
)
|
|||
Proceeds from disposal of assets
|
5,344
|
|
|
|
99
|
|
|
682
|
|
|||
Change in other, net
|
(3,619
|
)
|
|
|
(2,680
|
)
|
|
(1,296
|
)
|
|||
Cash used for investing activities from continuing operations
|
(43,815
|
)
|
|
|
(38,778
|
)
|
|
(29,562
|
)
|
|||
Cash used for investing activities from discontinued operations
|
—
|
|
|
|
(222,366
|
)
|
|
(105,330
|
)
|
|||
Net cash used for investing activities
|
(43,815
|
)
|
|
|
(261,144
|
)
|
|
(134,892
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Draws on credit facilities
|
—
|
|
|
|
—
|
|
|
143,359
|
|
|||
Payments on credit facilities
|
—
|
|
|
|
—
|
|
|
(258,308
|
)
|
|||
Proceeds from long-term debt
|
750,000
|
|
|
|
269
|
|
|
—
|
|
|||
Payments on long-term debt
|
(741,000
|
)
|
|
|
(8,294
|
)
|
|
(364,294
|
)
|
|||
Proceeds from Mandatorily Redeemable Preferred Stock
|
—
|
|
|
|
60,000
|
|
|
—
|
|
|||
Settlement of intercompany related to discontinued operations
|
—
|
|
|
|
(159,196
|
)
|
|
—
|
|
|||
Dividends and other payments to noncontrolling interests
|
(571
|
)
|
|
|
—
|
|
|
(1,078
|
)
|
|||
Debt issuance costs
|
(11,488
|
)
|
|
|
—
|
|
|
—
|
|
|||
Change in other, net
|
(2,036
|
)
|
|
|
(5
|
)
|
|
(75
|
)
|
|||
Cash used for financing activities from continuing operations
|
(5,095
|
)
|
|
|
(107,226
|
)
|
|
(480,396
|
)
|
|||
Cash provided by (used for) financing activities from discontinued operations
|
—
|
|
|
|
51,669
|
|
|
(12,711
|
)
|
|||
Net cash used for financing activities
|
(5,095
|
)
|
|
|
(55,557
|
)
|
|
(493,107
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(304
|
)
|
|
|
562
|
|
|
(8,553
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
214,328
|
|
|
|
(356,325
|
)
|
|
26,797
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
74,009
|
|
|
|
430,334
|
|
|
311,300
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
288,337
|
|
|
|
74,009
|
|
|
338,097
|
|
|||
Less cash, cash equivalents and restricted cash of discontinued operations at end of period
|
—
|
|
|
|
—
|
|
|
214,631
|
|
|||
Cash, cash equivalents and restricted cash of continuing operations at end of period
|
$
|
288,337
|
|
|
|
$
|
74,009
|
|
|
$
|
123,466
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
79,263
|
|
|
|
$
|
137,042
|
|
|
$
|
293,689
|
|
Cash paid for income taxes
|
2,755
|
|
|
|
22,092
|
|
|
27,597
|
|
|||
Cash paid for Reorganization items, net
|
18,268
|
|
|
|
183,291
|
|
|
52,213
|
|
▪
|
Audio, which provides media and entertainment services via broadcast and digital delivery and also includes the Company’s events and national syndication businesses and
|
▪
|
Audio & Media Services, which provides other audio and media services, including the Company’s media representation business, Katz Media Group (“Katz Media”) and the Company's provider of scheduling and broadcast software, Radio Computing Services (“RCS”).
|
•
|
Reclassification of Debtor pre-petition liabilities that are unsecured, under-secured or where it cannot be determined that the liabilities are fully secured, to a separate line item in the Consolidated Balance Sheet called, "Liabilities subject to compromise"; and
|
•
|
Segregation of Reorganization items, net as a separate line in the Consolidated Statement of Comprehensive Loss, included within income from continuing operations.
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
September 30,
2019 |
|
|
December 31,
2018 |
||||
Cash and cash equivalents
|
$
|
277,050
|
|
|
|
$
|
224,037
|
|
Restricted cash included in:
|
|
|
|
|
||||
Other current assets
|
11,287
|
|
|
|
3,428
|
|
||
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows(1)
|
$
|
288,337
|
|
|
|
$
|
227,465
|
|
▪
|
CCOH was separated from and ceased to be controlled by iHeartCommunications and its subsidiaries.
|
▪
|
The existing indebtedness of iHeartCommunications of approximately $16 billion was discharged, the Company entered into the Term Loan Facility ($3,500 million) and issued the 6.375% Senior Secured Notes ($800 million) and the Senior Unsecured Notes ($1,450 million), collectively the “Successor Emergence Debt.”
|
▪
|
The Company adopted an amended and restated certificate of incorporation and bylaws.
|
▪
|
Shares of the Predecessor Company’s issued and outstanding common stock immediately prior to the Effective Date were canceled, and on the Effective Date, reorganized iHeartMedia issued an aggregate of 56,861,941 shares of iHeartMedia Class A common stock, 6,947,567 shares of Class B common stock and special warrants to purchase 81,453,648 shares of Class A common stock or Class B common stock to holders of claims pursuant to the Plan of Reorganization.
|
▪
|
The following classes of claims received the Successor Emergence Debt and 99.1% of the new equity, as defined in the Plan of Reorganization:
|
▪
|
Secured Term Loan / 2019 PGN Claims (Class 4)
|
▪
|
Secured Non-9.0% PGN Due 2019 Claims Other Than Exchange 11.25% PGN Claims (Class 5A)
|
▪
|
Secured Exchange 11.25% PGN Claims (Class 5B)
|
▪
|
iHC 2021 / Legacy Notes Claims (Class 6)
|
▪
|
Guarantor Funded Debt against other Guarantor Debtors Other than CCH and TTWN (Class 7)
|
▪
|
The holders of the Guarantor Funded Debt Unsecured Claims Against CCH (Class 7F) received their Pro Rata share of 100 percent of the CCOH Interests held by the Debtors and CC Finco, LLC and Broader Media, LLC. Refer to the discussion below regarding the Separation Transaction.
|
▪
|
Settled the following classes of claims in cash:
|
▪
|
General Unsecured Claims Against Non-Obligor Debtors (Class 7A); paid in full
|
▪
|
General Unsecured Claims Against TTWN Debtors (Class 7B); paid in full
|
▪
|
iHC Unsecured Claims (Class 7D); paid 14.44% of allowed claim
|
▪
|
Guarantor General Unsecured Claims (Class 7G); paid minimum of 45% and maximum of 55% of allowed claim
|
▪
|
The CCOH Due From Claims (Class 8) represent the negotiated claim between iHeartMedia and CCOH, which was settled in cash on the date of emergence at 14.44%.
|
▪
|
The Predecessor Company’s common stockholders (Class 9) received their pro rata share of 1% of the new common stock; provided that 0.1% of the new common stock that otherwise would have been distributed to the Company's former sponsors was instead distributed to holders of Legacy Notes Claims.
|
▪
|
The Company entered into a new $450.0 million ABL Facility, which was undrawn at emergence.
|
▪
|
The Company funded the Guarantor General Unsecured Recovery Cash Pool for $17.5 million in order to settle the Class 7G General Unsecured Claims.
|
▪
|
The Company funded the Professional Fee Escrow Account.
|
▪
|
On the Effective Date, the iHeartMedia, Inc. 2019 Equity Incentive Plan (the “Post-Emergence Equity Plan”) became effective. The Post-Emergence Equity Plan allows the Company to grant stock options and restricted stock units representing up to 12,770,387 shares of Class A common stock for key members of management and service providers and up to 1,596,298 for non-employee members of the board of directors. The amounts of Class A common stock reserved under the Post-Emergence Equity Plan were equal to 8% and 1%, respectively, of the Company’s fully-diluted and distributed shares of Class A common stock as of the Effective Date.
|
▪
|
the cash sweep agreement under the then-existing corporate services agreement and any agreements or licenses requiring royalty payments to iHeartMedia by CCOH for trademarks or other intellectual property (“Trademark License Fees”) were terminated;
|
▪
|
iHeartCommunications, iHeartMedia, iHeartMedia Management Services, Inc. (“iHM Management Services”) and CCOH entered into a transition services agreement (the “Transition Services Agreement”) pursuant to which, the Company or its subsidiaries will provide administrative services historically provided to CCOH by iHeartCommunications for a period of one year after the Effective Date, which may be extended under certain circumstances;
|
▪
|
the Trademark License Fees charged to CCOH during the post-petition period were waived by iHeartMedia;
|
▪
|
iHeartMedia contributed the rights, title and interest in and to all tradenames, trademarks, service marks, common law marks and other rights related to the Clear Channel tradename (the “CC Intellectual Property”) to CCOH;
|
▪
|
iHeartMedia paid $115.8 million to CCOH, which consisted of the $149.0 million payment by iHeartCommunications to CCOH as CCOH’s recovery of its claims under the Due from iHeartCommunications Note, partially offset by the $33.2 million net amount payable to iHeartCommunications under the post-petition intercompany balance between iHeartCommunications and CCOH after adjusting for the post-petition Trademark License Fees which were waived as part of the settlement agreement;
|
▪
|
iHeartCommunications entered into a revolving loan agreement with Clear Channel Outdoor, LLC (“CCOL”) and Clear Channel International, Ltd., wholly-owned subsidiaries of CCOH, to provide a line of credit in an aggregate amount not to exceed $200 million at the prime rate of interest, which was terminated by the borrowers on July 30, 2019 in connection with the closing of an underwritten public offering of common stock by CCOH; and
|
▪
|
iHeart Operations, Inc. issued $60.0 million in preferred stock to a third party for cash (see Note 8, Long-term Debt).
|
(In thousands, except per share data)
|
|
||
Enterprise Value
|
$
|
8,750,000
|
|
Plus:
|
|
||
Cash and cash equivalents
|
63,142
|
|
|
Less:
|
|
||
Debt issued upon emergence
|
(5,748,178
|
)
|
|
Finance leases and short-term notes
|
(61,939
|
)
|
|
Mandatorily Redeemable Preferred Stock
|
(60,000
|
)
|
|
Changes in deferred tax liabilities(1)
|
(163,910
|
)
|
|
Noncontrolling interest
|
(8,943
|
)
|
|
Implied value of Successor Company common stock
|
$
|
2,770,172
|
|
|
|
||
Shares issued upon emergence (2)
|
145,263
|
|
|
Per share value
|
$
|
19.07
|
|
(In thousands)
|
|
||
Enterprise Value
|
$
|
8,750,000
|
|
Plus:
|
|
||
Cash and cash equivalents
|
63,142
|
|
|
Current liabilities (excluding Current portion of long-term debt)
|
426,944
|
|
|
Deferred tax liability
|
596,850
|
|
|
Other long-term liabilities
|
54,393
|
|
|
Noncurrent operating lease obligations
|
818,879
|
|
|
Reorganization value
|
$
|
10,710,208
|
|
(In thousands)
|
|
|
Separation of CCOH Adjustments
|
|
Reorganization Adjustments
|
|
Fresh Start Adjustments
|
|
|
||||||||||
|
Predecessor
|
|
(A)
|
|
(B)
|
|
(C)
|
|
Successor
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
175,811
|
|
|
$
|
—
|
|
|
$
|
(112,669
|
)
|
(1)
|
$
|
—
|
|
|
$
|
63,142
|
|
Accounts receivable, net
|
748,326
|
|
|
—
|
|
|
—
|
|
|
(10,810
|
)
|
(1)
|
737,516
|
|
|||||
Prepaid expenses
|
127,098
|
|
|
—
|
|
|
—
|
|
|
(24,642
|
)
|
(2)
|
102,456
|
|
|||||
Other current assets
|
22,708
|
|
|
—
|
|
|
8,125
|
|
(2)
|
(1,668
|
)
|
(3)
|
29,165
|
|
|||||
Current assets of discontinued operations
|
1,000,753
|
|
|
(1,000,753
|
)
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Assets
|
2,074,696
|
|
|
(1,000,753
|
)
|
|
(104,544
|
)
|
|
(37,120
|
)
|
|
932,279
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
499,001
|
|
|
—
|
|
|
—
|
|
|
333,991
|
|
(4)
|
832,992
|
|
|||||
INTANGIBLE ASSETS AND GOODWILL
|
|
|
|
|
|
|
|
|
|
||||||||||
Indefinite-lived intangibles - licenses
|
2,326,626
|
|
|
—
|
|
|
—
|
|
|
(44,906
|
)
|
(5)
|
2,281,720
|
|
|||||
Other intangibles, net
|
104,516
|
|
|
—
|
|
|
—
|
|
|
2,240,890
|
|
(5)
|
2,345,406
|
|
|||||
Goodwill
|
3,415,492
|
|
|
—
|
|
|
—
|
|
|
(92,127
|
)
|
(5)
|
3,323,365
|
|
|||||
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease right-of-use assets
|
355,826
|
|
|
—
|
|
|
—
|
|
|
554,278
|
|
(6)
|
910,104
|
|
|||||
Other assets
|
139,409
|
|
|
—
|
|
|
(384
|
)
|
(3)
|
(54,683
|
)
|
(2)
|
84,342
|
|
|||||
Long-term assets of discontinued operations
|
5,351,513
|
|
|
(5,351,513
|
)
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Assets
|
$
|
14,267,079
|
|
|
$
|
(6,352,266
|
)
|
|
$
|
(104,928
|
)
|
|
$
|
2,900,323
|
|
|
$
|
10,710,208
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
41,847
|
|
|
$
|
—
|
|
|
$
|
3,061
|
|
(4)
|
$
|
—
|
|
|
$
|
44,908
|
|
Current operating lease liabilities
|
470
|
|
|
—
|
|
|
31,845
|
|
(7)
|
39,092
|
|
(6)
|
71,407
|
|
|||||
Accrued expenses
|
208,885
|
|
|
—
|
|
|
(32,250
|
)
|
(5)
|
2,328
|
|
(9)
|
178,963
|
|
|||||
Accrued interest
|
462
|
|
|
—
|
|
|
(462
|
)
|
(6)
|
—
|
|
|
—
|
|
|||||
Deferred revenue
|
128,452
|
|
|
—
|
|
|
—
|
|
|
3,214
|
|
(7)
|
131,666
|
|
|||||
Current portion of long-term debt
|
46,618
|
|
|
—
|
|
|
6,529
|
|
(7)
|
40
|
|
(6)
|
53,187
|
|
|||||
Current liabilities of discontinued operations
|
999,778
|
|
|
(999,778
|
)
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Liabilities
|
1,426,512
|
|
|
(999,778
|
)
|
|
8,723
|
|
|
44,674
|
|
|
480,131
|
|
|||||
Long-term debt
|
—
|
|
|
—
|
|
|
5,758,516
|
|
(8)
|
(1,586
|
)
|
(8)
|
5,756,930
|
|
|||||
Series A Mandatorily Redeemable Preferred Stock
|
—
|
|
|
—
|
|
|
60,000
|
|
(9)
|
—
|
|
|
60,000
|
|
|||||
Noncurrent operating lease liabilities
|
828
|
|
|
—
|
|
|
398,154
|
|
(7)
|
419,897
|
|
(6)
|
818,879
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
575,341
|
|
(10)
|
185,419
|
|
(10)
|
760,760
|
|
|||||
Other long-term liabilities
|
121,081
|
|
|
—
|
|
|
(64,524
|
)
|
(11)
|
(2,164
|
)
|
(7)
|
54,393
|
|
|||||
Liabilities subject to compromise
|
16,770,266
|
|
|
—
|
|
|
(16,770,266
|
)
|
(7)
|
—
|
|
|
—
|
|
|||||
Long-term liabilities of discontinued operations
|
7,472,633
|
|
|
(7,472,633
|
)
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commitments and contingent liabilities (Note 9)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interest
|
13,584
|
|
|
(13,199
|
)
|
(1)
|
—
|
|
|
8,558
|
|
(11)
|
8,943
|
|
|||||
Predecessor common stock
|
92
|
|
|
—
|
|
|
(92
|
)
|
(12)
|
—
|
|
|
—
|
|
|||||
Successor Class A Common Stock
|
—
|
|
|
—
|
|
|
57
|
|
(13)
|
—
|
|
|
57
|
|
|||||
Successor Class B Common Stock
|
—
|
|
|
—
|
|
|
7
|
|
(13)
|
—
|
|
|
7
|
|
|||||
Predecessor additional paid-in capital
|
2,075,130
|
|
|
—
|
|
|
(2,075,130
|
)
|
(12)
|
—
|
|
|
—
|
|
|||||
Successor additional paid-in capital
|
—
|
|
|
|
|
2,770,108
|
|
(13)
|
—
|
|
|
2,770,108
|
|
||||||
Accumulated deficit
|
(13,288,497
|
)
|
|
1,825,531
|
|
(1)
|
9,231,616
|
|
(14)
|
2,231,350
|
|
(12)
|
—
|
|
|||||
Accumulated other comprehensive loss
|
(321,988
|
)
|
|
307,813
|
|
(1)
|
—
|
|
|
14,175
|
|
(12)
|
—
|
|
|||||
Cost of share held in treasury
|
(2,562
|
)
|
|
—
|
|
|
2,562
|
|
(12)
|
—
|
|
|
—
|
|
|||||
Total Stockholders' Equity (Deficit)
|
(11,524,241
|
)
|
|
2,120,145
|
|
|
9,929,128
|
|
|
2,254,083
|
|
|
2,779,115
|
|
|||||
Total Liabilities and Stockholders' Equity (Deficit)
|
$
|
14,267,079
|
|
|
$
|
(6,352,266
|
)
|
|
$
|
(104,928
|
)
|
|
$
|
2,900,323
|
|
|
$
|
10,710,208
|
|
(1)
|
The table below reflects the sources and uses of cash on the Effective Date from implementation of the Plan:
|
(In thousands)
|
|
|
||
Cash at May 1, 2019 (excluding discontinued operations)
|
$
|
175,811
|
|
|
Sources:
|
|
|
||
Proceeds from issuance of Mandatorily Redeemable Preferred Stock
|
$
|
60,000
|
|
|
Release of restricted cash from other assets into cash
|
3,428
|
|
|
|
Total sources of cash
|
$
|
63,428
|
|
|
Uses:
|
|
|
||
Payment of Mandatorily Redeemable Preferred Stock issuance costs
|
$
|
(1,513
|
)
|
|
Payment of New Term Loan Facility to settle certain creditor claims
|
(1,822
|
)
|
|
|
Payments for Emergence debt issuance costs
|
(7,213
|
)
|
|
|
Funding of the Guarantor General Unsecured Recovery Cash Pool
|
(17,500
|
)
|
|
|
Payments for fully secured claims and general unsecured claims
|
(1,990
|
)
|
|
|
Payment of contract cure amounts
|
(15,763
|
)
|
|
|
Payment of consenting stakeholder fees
|
(4,000
|
)
|
|
|
Payment of professional fees
|
(85,091
|
)
|
(a)
|
|
Funding of Professional Fees Escrow Account
|
(41,205
|
)
|
(a)
|
|
Total uses of cash
|
$
|
(176,097
|
)
|
|
Net uses of cash
|
$
|
(112,669
|
)
|
|
Cash upon emergence
|
$
|
63,142
|
|
|
(2)
|
Pursuant to the terms of the Plan of Reorganization, on the Effective Date, the Company funded the Guarantor General Unsecured Recovery Cash Pool account in the amount of $17.5 million, which was reclassified as restricted cash within Other current assets. The Company made payments of $6.0 million through the Cash Pool at the time of emergence. Additionally, $3.4 million of restricted cash previously held to pay critical utility vendors was reclassified to cash.
|
(3)
|
Reflects the write-off of prepaid expenses related to the $2.3 million of prepaid premium for Predecessor Company's director and officer insurance policy, offset by the accrual of future reimbursements of $1.9 million for negotiated discounts related to the professional fee escrow account.
|
(5)
|
Reflects the reduction of accrued expenses related to the $21.2 million of professional fees paid directly, $9.3 million of professional fees paid through the Professional Fee Escrow Account and other accrued expense items. Additionally, the Company reinstated accrued expenses included within Liabilities subject to compromise to be satisfied in the ordinary course of business.
|
(In thousands)
|
|
||
Reinstatement of accrued expenses
|
$
|
551
|
|
Payment of professional fees
|
(21,177
|
)
|
|
Payment of professional fees through the escrow account
|
(9,260
|
)
|
|
Impact on other accrued expenses
|
(2,364
|
)
|
|
Net impact on Accrued expenses
|
$
|
(32,250
|
)
|
(6)
|
Reflects the write-off of the DIP facility accrued interest associated with the DIP facility fees paid at emergence.
|
(7)
|
As part of the Plan of Reorganization, the Bankruptcy Court approved the settlement of claims reported within Liabilities subject to compromise in the Company's Consolidated balance sheet at their respective allowed claim amounts.
|
(In thousands)
|
|
|
||
Liabilities subject to compromise pre-emergence
|
$
|
16,770,266
|
|
|
To be reinstated on the Effective Date:
|
|
|
||
Deferred taxes
|
$
|
(596,850
|
)
|
|
Accrued expenses
|
(551
|
)
|
|
|
Accounts payable
|
(3,061
|
)
|
|
|
Finance leases and other debt
|
(16,867
|
)
|
(a)
|
|
Current operating lease liabilities
|
(31,845
|
)
|
|
|
Noncurrent operating lease liabilities
|
(398,154
|
)
|
|
|
Other long-term liabilities
|
(14,518
|
)
|
(b)
|
|
Total liabilities reinstated
|
$
|
(1,061,846
|
)
|
|
Less amounts settled per the Plan of Reorganization
|
|
|
||
Issuance of new debt
|
$
|
(5,750,000
|
)
|
|
Payments to cure contracts
|
(15,763
|
)
|
|
|
Payments for settlement of general unsecured claims from escrow account
|
(5,822
|
)
|
|
|
Payments for fully secured and other claim classes at emergence
|
(1,990
|
)
|
|
|
Equity issued at emergence to creditors in settlement of Liabilities subject to Compromise
|
(2,742,471
|
)
|
|
|
Total amounts settled
|
(8,516,046
|
)
|
|
|
Gain on settlement of Liabilities Subject to Compromise
|
$
|
7,192,374
|
|
|
(In thousands)
|
|
||
Reinstatement of long-term asset retirement obligations
|
$
|
3,527
|
|
Reinstatement of non-qualified deferred compensation plan
|
10,991
|
|
|
Total reinstated Other long-term liabilities
|
$
|
14,518
|
|
(8)
|
The exit financing consists of the Term Loan Facility of approximately $3.5 billion and 6.375% Senior Secured Notes totaling $800 million, both maturing seven years from the date of issuance, the Senior Unsecured Notes totaling $1.45 billion, maturing eight years from the date of issuance, and a $450 million ABL Facility with no amount drawn at emergence, which matures on June 14, 2023.
|
(In thousands)
|
Term
|
|
Interest Rate
|
|
Amount
|
||
Term Loan Facility
|
7 years
|
|
Libor + 4.00%
|
|
$
|
3,500,000
|
|
6.375% Senior Secured Notes
|
7 years
|
|
6.375%
|
|
800,000
|
|
|
Senior Unsecured Notes
|
8 years
|
|
8.375%
|
|
1,450,000
|
|
|
Asset-based Revolving Credit Facility
|
4 years
|
|
Varies(a)
|
|
—
|
|
|
Total Long-Term Debt - Exit Financing
|
|
|
|
|
$
|
5,750,000
|
|
Less:
|
|
|
|
|
|
||
Payment of Term Loan Facility to settle certain creditor claims
|
|
|
|
|
(1,822
|
)
|
|
Net proceeds from exit financing at emergence
|
|
|
|
|
$
|
5,748,178
|
|
Long-term portion of finance leases and other debt reinstated
|
|
|
|
|
10,338
|
|
|
Net impact on Long-term debt
|
|
|
|
|
$
|
5,758,516
|
|
(a)
|
Borrowings under the ABL Facility bear interest at a rate per annum equal to the applicable rate plus, at iHeartCommunications’ option, either (x) a eurocurrency rate or (y) a base rate. The applicable margin for borrowings under the ABL Facility range from 1.25% to 1.75% for eurocurrency borrowings and from 0.25% to 0.75% for base-rate borrowings, in each case, depending on average excess availability under the ABL Facility based on the most recently ended fiscal quarter.
|
(9)
|
Reflects the issuance by iHeart Operations of $60.0 million in aggregate liquidation preference of its Series A Perpetual Preferred Stock, par value $0.001 per share. On May 1, 2029, the shares of the Preferred Stock will be subject to mandatory redemption for $60.0 million in cash, plus any accrued and unpaid dividends, unless waived by the holders of the Preferred Stock.
|
(In thousands)
|
|
||
Reinstatement of long-term asset retirement obligations
|
$
|
3,527
|
|
Reinstatement of non-qualified pension plan
|
10,991
|
|
|
Reduction of liabilities for unrecognized tax benefits
|
(79,042
|
)
|
|
Net impact to Other long-term liabilities
|
$
|
(64,524
|
)
|
(In thousands)
|
|
||
Equity issued to Class 9 Claimholders (prior equity holders)
|
$
|
27,701
|
|
Equity issued to creditors in settlement of Liabilities subject to compromise
|
2,742,471
|
|
|
Total equity issued at emergence
|
$
|
2,770,172
|
|
(In thousands)
|
|
|
||
Gain on settlement of Liabilities subject to compromise
|
$
|
7,192,374
|
|
|
Payment of professional fees upon emergence
|
(11,509
|
)
|
|
|
Payment of success fees upon emergence
|
(86,065
|
)
|
|
|
Cancellation of unvested stock-based compensation awards
|
(1,530
|
)
|
|
|
Cancellation of Predecessor prepaid director and officer insurance policy
|
(2,331
|
)
|
|
|
Write-off of debt issuance and Mandatorily Redeemable Preferred Stock costs incurred at emergence
|
(8,726
|
)
|
|
|
Total Reorganization items, net
|
$
|
7,082,213
|
|
|
|
|
|
||
Income tax benefit
|
$
|
102,914
|
|
|
Cancellation of Predecessor Equity
|
2,074,190
|
|
(a)
|
|
Issuance of Successor Equity to prior equity holders
|
(27,701
|
)
|
|
|
Net Impact on Accumulated deficit
|
$
|
9,231,616
|
|
|
(1)
|
Reflects the fair value adjustment as of May 1, 2019 made to accounts receivable to reflect management's best estimate of the expected collectability of accounts receivable balances.
|
(2)
|
Reflects the fair value adjustment as of May 1, 2019 to eliminate certain prepaid expenses related to software implementation costs and other upfront payments. The Company historically incurred third-party implementation fees in connection with installing various cloud-based software products, and these amounts were recorded as prepaid expenses and recognized as a component of selling, general and administrative expense over the term of the various contracts. The Company determined that the remaining unamortized costs related to such implementation fees do not provide any rights that result in future economic benefits. In addition, the Company pays signing bonuses to certain of its on-air personalities, and these amounts were recorded as prepaid expenses and recognized as a component of Direct operating expenses over the terms of the various contracts. To the extent these contracts do not contain substantive claw-back provisions, these prepaid amounts do not provide any enforceable rights that result in future economic benefits. Accordingly, the balances related to these contracts as of May 1, 2019 were adjusted to zero.
|
(4)
|
Reflects the fair value adjustment to recognize the Company’s property, plant and equipment as of May 1, 2019 based on the fair values of such property, plant and equipment. Property was valued using a market approach comparing similar properties to recent market transactions. Equipment and towers were valued primarily using a replacement cost approach. Internally-developed and owned software technology assets were valued primarily using the Royalty Savings Method, similar to the approach used in valuing the Company’s tradenames and trademarks. Estimated royalty rates were determined for each of the software technology assets considering the relative contribution to the Company’s overall profitability as well as available public market information regarding market royalty rates for similar assets. The selected royalty rates were applied to the revenue generated by the software technology assets. The forecasted cash flows expected to be generated as a result of the royalty savings were discounted to present value utilizing a discount rate considering overall business risks and risks associated with the asset being valued. For certain of the software technology assets, the Company used the cost approach which utilized historical financial data regarding development costs and expected future profit associated with the assets. The adjustment to the Company’s property, plant and equipment consists of a $182.9 million increase in tangible property and equipment and a $151.0 million increase in software technology assets
|
(In thousands)
|
Estimated Fair Value
|
|
Estimated Useful Life
|
||
FCC licenses
|
$
|
2,281,720
|
|
(a)
|
Indefinite
|
Customer / advertiser relationships
|
1,643,670
|
|
(b)
|
5 - 15 years
|
|
Talent contracts
|
373,000
|
|
(b)
|
2 - 10 years
|
|
Trademarks and tradenames
|
321,928
|
|
(b)
|
7 - 15 years
|
|
Other
|
6,808
|
|
(c)
|
|
|
Total intangible assets upon emergence
|
4,627,126
|
|
|
|
|
Elimination of historical acquired intangible assets
|
$
|
(2,431,142
|
)
|
|
|
Fresh start adjustment to acquired intangible assets
|
2,195,984
|
|
|
|
(In millions)
|
|
|
||
Customer/advertiser relationships
|
$
|
1,604.1
|
|
increase in value
|
Talent contracts
|
361.6
|
|
increase in value
|
|
Trademarks and tradenames
|
274.4
|
|
increase in value
|
|
Other
|
0.8
|
|
increase in value
|
|
Total fair value adjustment
|
$
|
2,240.9
|
|
increase in value
|
(In thousands)
|
|
||
Reorganization value
|
$
|
10,710,208
|
|
Less: Fair value of assets (excluding goodwill)
|
(7,386,843
|
)
|
|
Total goodwill upon emergence
|
3,323,365
|
|
|
Elimination of historical goodwill
|
(3,415,492
|
)
|
|
Fresh start adjustment to goodwill
|
$
|
(92,127
|
)
|
(6)
|
The operating lease obligation as of May 1, 2019 had been calculated using an incremental borrowing rate applicable to the Company while it was a debtor-in-possession before its emergence from bankruptcy. Upon application of fresh start accounting, the lease obligation was recalculated using the incremental borrowing rate applicable to the Company after emergence from bankruptcy and commensurate to its new capital structure. The incremental borrowing rate used decreased from 12.44% as
|
(7)
|
Reflects the fair value adjustment to adjust deferred revenue and other liabilities as of May 1, 2019 to its estimated fair value. The fair value of the deferred revenue was determined using the market approach and the cost approach. The market approach values deferred revenue based on the amount an acquirer would be required to pay a third party to assume the remaining performance obligations. The cost approach values deferred revenue utilizing estimated costs that will be incurred to fulfill the obligation plus a normal profit margin for the level of effort or assumption of risk by the acquirer. Additionally, a deferred gain was recorded at the time of the certain historical sale-leaseback transaction. During the implementation of ASC 842, the operating portion was written off as of January 1, 2019. The financing lease deferred gain remained. As part of fresh start accounting, this balance of $0.9 million was written off.
|
(In thousands)
|
|
||
Fresh start adjustment to Accounts receivable, net
|
$
|
(10,810
|
)
|
Fresh start adjustment to Other current assets
|
(1,668
|
)
|
|
Fresh start adjustment to Prepaid expenses
|
(24,642
|
)
|
|
Fresh start adjustment to Property, plant and equipment, net
|
333,991
|
|
|
Fresh start adjustment to Intangible assets
|
2,195,984
|
|
|
Fresh start adjustment to Goodwill
|
(92,127
|
)
|
|
Fresh start adjustment to Operating lease right-of-use assets
|
554,278
|
|
|
Fresh start adjustment to Other assets
|
(54,683
|
)
|
|
Fresh start adjustment to Accrued expenses
|
(2,328
|
)
|
|
Fresh start adjustment to Deferred revenue
|
(3,214
|
)
|
|
Fresh start adjustment to Debt
|
1,546
|
|
|
Fresh start adjustment to Operating lease obligations
|
(458,989
|
)
|
|
Fresh start adjustment to Other long-term liabilities
|
2,164
|
|
|
Fresh start adjustment to Noncontrolling interest
|
(8,558
|
)
|
|
Total Fresh Start Adjustments impacting Reorganization items, net
|
$
|
2,430,944
|
|
Reset of Accumulated other comprehensive income
|
(14,175
|
)
|
|
Income tax expense
|
(185,419
|
)
|
|
Net impact to Accumulated deficit
|
$
|
2,231,350
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Professional fees and other bankruptcy related costs
|
—
|
|
|
|
(52,475
|
)
|
||
Reorganization items, net
|
$
|
—
|
|
|
|
$
|
(52,475
|
)
|
|
|
|
|
|
||||
Cash payments for Reorganization items, net
|
$
|
5,219
|
|
|
|
$
|
46,338
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
|
2019
|
|
2018
|
||||||
Write-off of deferred loans costs
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
(67,079
|
)
|
Write-off of original issue discount
|
—
|
|
|
|
—
|
|
|
(131,100
|
)
|
|||
Debtor-in-possession refinancing costs
|
—
|
|
|
|
—
|
|
|
(10,546
|
)
|
|||
Professional fees and other bankruptcy related costs
|
—
|
|
|
|
(157,487
|
)
|
|
(104,545
|
)
|
|||
Net gain on settlement of Liabilities subject to compromise
|
—
|
|
|
|
7,192,374
|
|
|
—
|
|
|||
Impact of fresh start adjustments
|
—
|
|
|
|
2,430,944
|
|
|
—
|
|
|||
Other items, net
|
—
|
|
|
|
(4,005
|
)
|
|
—
|
|
|||
Reorganization items, net
|
$
|
—
|
|
|
|
$
|
9,461,826
|
|
|
$
|
(313,270
|
)
|
|
|
|
|
|
|
|
||||||
Cash payments for Reorganization items, net
|
$
|
18,268
|
|
|
|
$
|
183,291
|
|
|
$
|
52,213
|
|
(In thousands)
|
Predecessor Company
|
||||||||||
|
Three Months Ended September 30,
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2019
|
|
2018
|
||||||
Revenue
|
$
|
663,739
|
|
|
$
|
804,566
|
|
|
$
|
1,974,117
|
|
|
|
|
|
|
|
||||||
Loss from discontinued operations before income taxes
|
$
|
(42,595
|
)
|
|
$
|
(133,475
|
)
|
|
$
|
(149,952
|
)
|
Income tax expense
|
(6,896
|
)
|
|
(6,933
|
)
|
|
(57,016
|
)
|
|||
Loss from discontinued operations, net of taxes
|
$
|
(49,491
|
)
|
|
$
|
(140,408
|
)
|
|
$
|
(206,968
|
)
|
|
|
|
|
|
|
||||||
Gain on disposals before income taxes
|
$
|
—
|
|
|
$
|
1,825,531
|
|
|
$
|
—
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Gain on disposals, net of taxes
|
$
|
—
|
|
|
$
|
1,825,531
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations, net of taxes
|
$
|
(49,491
|
)
|
|
$
|
1,685,123
|
|
|
$
|
(206,968
|
)
|
(In thousands)
|
Predecessor Company
|
||
|
December 31,
2018 |
||
CURRENT ASSETS
|
|
||
Cash and cash equivalents
|
$
|
182,456
|
|
Accounts receivable, net of allowance of $24,224
|
706,309
|
|
|
Prepaid expenses
|
95,734
|
|
|
Other current assets
|
31,301
|
|
|
Current assets of discontinued operations
|
$
|
1,015,800
|
|
|
|
||
LONG-TERM ASSETS
|
|
||
Structures, net
|
$
|
1,053,016
|
|
Property, plant and equipment, net
|
235,922
|
|
|
Indefinite-lived intangibles - permits
|
971,163
|
|
|
Other intangibles, net
|
252,862
|
|
|
Goodwill
|
706,003
|
|
|
Other assets
|
132,504
|
|
|
Long-term assets of discontinued operations
|
$
|
3,351,470
|
|
|
|
||
CURRENT LIABILITIES
|
|
||
Accounts payable
|
$
|
113,714
|
|
Accrued expenses
|
528,482
|
|
|
Accrued interest
|
2,341
|
|
|
Deferred income
|
85,052
|
|
|
Current portion of long-term debt
|
227
|
|
|
Current liabilities of discontinued operations
|
$
|
729,816
|
|
|
|
||
LONG-TERM LIABILITIES
|
|
||
Long-term debt
|
$
|
5,277,108
|
|
Deferred income taxes
|
335,015
|
|
|
Other long-term liabilities
|
260,150
|
|
|
Long-term liabilities of discontinued operations
|
$
|
5,872,273
|
|
(1)
|
Broadcast Radio revenue is generated through the sale of advertising time on the Company’s domestic radio stations.
|
(2)
|
Digital revenue is generated through the sale of streaming and display advertisements on digital platforms, subscriptions to iHeartRadio streaming services, podcasting and the dissemination of other digital content.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
Audio and 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 and webcast software and technology and services to radio stations, television music channels, cable companies, satellite music networks and Internet stations worldwide.
|
(6)
|
Other revenue represents fees earned for miscellaneous services, including on-site promotions, activations, and local marketing agreements.
|
(7)
|
Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases.
|
Predecessor Company
|
|||||||||||||||
(In thousands)
|
Audio(1)
|
|
Audio and Media Services(1)
|
|
Eliminations
|
|
Consolidated
|
||||||||
Three Months Ended September 30, 2018
|
|||||||||||||||
Revenue from contracts with customers:
|
|||||||||||||||
Broadcast Radio
|
$
|
576,460
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
576,460
|
|
Digital
|
72,447
|
|
|
—
|
|
|
—
|
|
|
72,447
|
|
||||
Networks
|
146,587
|
|
|
—
|
|
|
—
|
|
|
146,587
|
|
||||
Sponsorship and Events
|
53,191
|
|
|
—
|
|
|
—
|
|
|
53,191
|
|
||||
Audio and Media Services
|
—
|
|
|
69,823
|
|
|
(1,611
|
)
|
|
68,212
|
|
||||
Other
|
2,957
|
|
|
—
|
|
|
—
|
|
|
2,957
|
|
||||
Total
|
851,642
|
|
|
69,823
|
|
|
(1,611
|
)
|
|
919,854
|
|
||||
Revenue from leases
|
638
|
|
|
—
|
|
|
—
|
|
|
638
|
|
||||
Revenue, total
|
$
|
852,280
|
|
|
$
|
69,823
|
|
|
$
|
(1,611
|
)
|
|
$
|
920,492
|
|
|
|
|
|
|
|
|
|
||||||||
Period from January 1, 2019 through May 1, 2019
|
|||||||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
||||||||
Broadcast Radio
|
$
|
657,864
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
657,864
|
|
Digital
|
102,789
|
|
|
—
|
|
|
—
|
|
|
102,789
|
|
||||
Networks
|
189,088
|
|
|
—
|
|
|
—
|
|
|
189,088
|
|
||||
Sponsorship and Events
|
50,330
|
|
|
—
|
|
|
—
|
|
|
50,330
|
|
||||
Audio and Media Services
|
—
|
|
|
69,362
|
|
|
(2,325
|
)
|
|
67,037
|
|
||||
Other
|
5,910
|
|
|
—
|
|
|
(243
|
)
|
|
5,667
|
|
||||
Total
|
1,005,981
|
|
|
69,362
|
|
|
(2,568
|
)
|
|
1,072,775
|
|
||||
Revenue from leases
|
696
|
|
|
—
|
|
|
—
|
|
|
696
|
|
||||
Revenue, total
|
$
|
1,006,677
|
|
|
$
|
69,362
|
|
|
$
|
(2,568
|
)
|
|
$
|
1,073,471
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2018
|
|||||||||||||||
Revenue from contracts with customers:
|
|||||||||||||||
Broadcast Radio
|
$
|
1,635,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,635,571
|
|
Digital
|
200,388
|
|
|
—
|
|
|
—
|
|
|
200,388
|
|
||||
Networks
|
425,619
|
|
|
—
|
|
|
—
|
|
|
425,619
|
|
||||
Sponsorship and Events
|
132,339
|
|
|
—
|
|
|
—
|
|
|
132,339
|
|
||||
Audio and Media Services
|
—
|
|
|
180,582
|
|
|
(4,884
|
)
|
|
175,698
|
|
||||
Other
|
13,253
|
|
|
—
|
|
|
—
|
|
|
13,253
|
|
||||
Total
|
2,407,170
|
|
|
180,582
|
|
|
(4,884
|
)
|
|
2,582,868
|
|
||||
Revenue from leases
|
2,160
|
|
|
—
|
|
|
—
|
|
|
2,160
|
|
||||
Revenue, total
|
$
|
2,409,330
|
|
|
$
|
180,582
|
|
|
$
|
(4,884
|
)
|
|
$
|
2,585,028
|
|
(1)
|
Due to a re-evaluation of the Company’s internal segment reporting upon the effectiveness of the Plan of Reorganization, the Company’s RCS business is included in the Audio & Media Services results for all periods presented. See Note 1 for further information.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
(In thousands)
|
2019
|
|
|
2018
|
||||
Trade and barter revenues
|
$
|
59,530
|
|
|
|
$
|
51,831
|
|
Trade and barter expenses
|
40,319
|
|
|
|
40,607
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2019
|
|
|
2019
|
|
2018
|
||||||
Trade and barter revenues
|
$
|
89,229
|
|
|
|
$
|
65,934
|
|
|
$
|
141,769
|
|
Trade and barter expenses
|
68,342
|
|
|
|
58,330
|
|
|
136,827
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
(In thousands)
|
2019
|
|
|
2018
|
||||
Deferred revenue from contracts with customers:
|
|
|
|
|
||||
Beginning balance(1)
|
$
|
159,752
|
|
|
|
$
|
160,369
|
|
Revenue recognized, included in beginning balance
|
(74,875
|
)
|
|
|
(73,190
|
)
|
||
Additions, net of revenue recognized during period, and other
|
75,660
|
|
|
|
67,973
|
|
||
Ending balance
|
160,537
|
|
|
|
$
|
155,152
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2019
|
|
|
2019
|
|
2018
|
||||||
Deferred revenue from contracts with customers:
|
|
|
|
|
|
|
||||||
Beginning balance(1)
|
$
|
151,773
|
|
|
|
$
|
148,720
|
|
|
$
|
155,228
|
|
Revenue recognized, included in beginning balance
|
(87,098
|
)
|
|
|
(76,473
|
)
|
|
(101,456
|
)
|
|||
Additions, net of revenue recognized during period, and other
|
95,862
|
|
|
|
79,228
|
|
|
101,380
|
|
|||
Ending balance
|
$
|
160,537
|
|
|
|
$
|
151,475
|
|
|
$
|
155,152
|
|
(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. As described in Note 3, as part of the fresh start accounting adjustments on May 1, 2019, deferred revenue from contracts with customers was adjusted to its estimated fair value.
|
(In thousands)
|
|||
2019
|
$
|
381
|
|
2020
|
1,317
|
|
|
2021
|
1,139
|
|
|
2022
|
833
|
|
|
2023
|
776
|
|
|
Thereafter
|
10,693
|
|
|
Total
|
$
|
15,139
|
|
|
Successor Company
|
||
|
Three Months Ended September 30,
|
||
(In thousands)
|
2019
|
||
Operating lease expense
|
$
|
37,742
|
|
Variable lease expense
|
$
|
7,197
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
||||
(In thousands)
|
2019
|
|
|
2019
|
||||
Operating lease expense
|
$
|
63,181
|
|
|
|
$
|
44,667
|
|
Variable lease expense
|
$
|
10,644
|
|
|
|
$
|
476
|
|
|
September 30,
2019 |
|
Operating lease weighted average remaining lease term (in years)
|
13.9
|
|
Operating lease weighted average discount rate
|
6.54
|
%
|
(In thousands)
|
|||
2019
|
$
|
26,765
|
|
2020
|
137,993
|
|
|
2021
|
127,849
|
|
|
2022
|
120,856
|
|
|
2023
|
107,593
|
|
|
Thereafter
|
849,530
|
|
|
Total lease payments
|
$
|
1,370,586
|
|
Less: Effect of discounting
|
498,550
|
|
|
Total operating lease liability
|
$
|
872,036
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1
|
||||
(In thousands)
|
2019
|
|
|
2019
|
||||
Cash paid for amounts included in measurement of operating lease liabilities
|
$
|
57,102
|
|
|
|
$
|
44,888
|
|
Lease liabilities arising from obtaining right-of-use assets(1)
|
$
|
13,339
|
|
|
|
$
|
913,598
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
September 30,
2019 |
|
|
December 31,
2018 |
||||
Land, buildings and improvements
|
$
|
379,204
|
|
|
|
$
|
427,501
|
|
Towers, transmitters and studio equipment
|
154,426
|
|
|
|
365,991
|
|
||
Furniture and other equipment
|
309,201
|
|
|
|
591,601
|
|
||
Construction in progress
|
36,243
|
|
|
|
43,809
|
|
||
|
879,074
|
|
|
|
1,428,902
|
|
||
Less: accumulated depreciation
|
45,061
|
|
|
|
926,700
|
|
||
Property, plant and equipment, net
|
$
|
834,013
|
|
|
|
$
|
502,202
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
September 30, 2019
|
|
|
December 31, 2018
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Customer / advertiser relationships
|
1,649,770
|
|
|
(74,420
|
)
|
|
|
1,326,636
|
|
|
(1,278,885
|
)
|
||||
Talent and other contracts
|
375,399
|
|
|
(21,087
|
)
|
|
|
164,933
|
|
|
(148,578
|
)
|
||||
Trademarks and tradenames
|
321,977
|
|
|
(13,538
|
)
|
|
|
—
|
|
|
—
|
|
||||
Other
|
762
|
|
|
(440
|
)
|
|
|
376,978
|
|
|
(240,662
|
)
|
||||
Total
|
$
|
2,347,908
|
|
|
$
|
(109,485
|
)
|
|
|
$
|
1,868,547
|
|
|
$
|
(1,668,125
|
)
|
(In thousands)
|
|
||
2020
|
$
|
263,125
|
|
2021
|
262,727
|
|
|
2022
|
257,502
|
|
|
2023
|
246,927
|
|
|
2024
|
246,237
|
|
(In thousands)
|
Audio
|
|
Audio & Media Services
|
|
Consolidated
|
||||||
Balance as of December 31, 2017 (Predecessor)
|
$
|
3,255,208
|
|
|
$
|
81,831
|
|
|
$
|
3,337,039
|
|
Acquisitions
|
77,320
|
|
|
—
|
|
|
77,320
|
|
|||
Dispositions
|
(1,606
|
)
|
|
—
|
|
|
(1,606
|
)
|
|||
Balance as of December 31, 2018 (Predecessor)
|
$
|
3,330,922
|
|
|
$
|
81,831
|
|
|
$
|
3,412,753
|
|
Acquisitions
|
—
|
|
|
2,767
|
|
|
2,767
|
|
|||
Foreign currency
|
—
|
|
|
(28
|
)
|
|
(28
|
)
|
|||
Balance as of May 1, 2019 (Predecessor)
|
$
|
3,330,922
|
|
|
$
|
84,570
|
|
|
$
|
3,415,492
|
|
Impact of fresh start accounting
|
(111,712
|
)
|
|
19,585
|
|
|
(92,127
|
)
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of May 2, 2019 (Successor)
|
$
|
3,219,210
|
|
|
$
|
104,155
|
|
|
$
|
3,323,365
|
|
Acquisitions
|
4,637
|
|
|
—
|
|
|
4,637
|
|
|||
Dispositions
|
(9,466
|
)
|
|
—
|
|
|
(9,466
|
)
|
|||
Foreign currency
|
—
|
|
|
(77
|
)
|
|
(77
|
)
|
|||
Other
|
7,087
|
|
|
—
|
|
|
7,087
|
|
|||
Balance as of September 30, 2019 (Successor)
|
$
|
3,221,468
|
|
|
$
|
104,078
|
|
|
$
|
3,325,546
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
September 30,
2019 |
|
|
December 31,
2018 |
||||
Term Loan Facility due 2026(1)
|
$
|
2,757,397
|
|
|
|
$
|
—
|
|
Debtors-in-Possession Facility(2)
|
—
|
|
|
|
—
|
|
||
Asset-based Revolving Credit Facility due 2023(2)
|
—
|
|
|
|
—
|
|
||
6.375% Senior Secured Notes due 2026
|
800,000
|
|
|
|
—
|
|
||
5.25% Senior Secured Notes due 2027(1)
|
750,000
|
|
|
|
—
|
|
||
Other secured subsidiary debt(3)
|
4,373
|
|
|
|
—
|
|
||
Total consolidated secured debt
|
4,311,770
|
|
|
|
—
|
|
||
|
|
|
|
|
||||
8.375% Senior Unsecured Notes due 2027
|
1,450,000
|
|
|
|
—
|
|
||
Other unsecured subsidiary debt
|
58,556
|
|
|
|
46,105
|
|
||
Long-term debt fees
|
(11,316
|
)
|
|
|
—
|
|
||
Long-term debt, net subject to compromise(4)
|
—
|
|
|
|
15,149,477
|
|
||
Total debt, prior to reclassification to Liabilities subject to compromise
|
5,809,010
|
|
|
|
15,195,582
|
|
||
Less: Current portion
|
53,705
|
|
|
|
46,105
|
|
||
Less: Amounts reclassified to Liabilities subject to compromise
|
—
|
|
|
|
15,149,477
|
|
||
Total long-term debt
|
$
|
5,755,305
|
|
|
|
$
|
—
|
|
(1)
|
On August 7, 2019, iHeartCommunications issued $750.0 million of 5.25% Senior Secured Notes due 2027 (the “5.25% Senior Secured Notes”), the proceeds of which were used, together with cash on hand, to prepay at par $740.0 million of borrowings outstanding under the Term Loan Facility, plus $0.8 million of accrued and unpaid interest to, but not including, the date of prepayment.
|
(2)
|
The Debtors-in-Possession Facility (the "DIP Facility"), which terminated with the emergence from the Chapter 11 Cases, provided for borrowings of up to $450.0 million. On the Effective Date, the DIP Facility was repaid and canceled and the Successor Company entered into the ABL Facility. As of September 30, 2019, the Successor Company had a facility size of $450.0 million under iHeartCommunications' ABL Facility, had no outstanding borrowings and had $49.2 million of outstanding letters of credit, resulting in $400.8 million of excess availability.
|
(3)
|
Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2019 through 2045.
|
(4)
|
In connection with the Company's Chapter 11 Cases, the $6,300.0 million outstanding under the Senior Secured Credit Facilities, the $1,999.8 million outstanding under the 9.0% Priority Guarantee Notes due 2019, the $1,750.0 million outstanding under the 9.0% Priority Guarantee Notes due 2021, the $870.5 million of 11.25% Priority Guarantee Notes due 2021, the $1,000.0 million outstanding under the 9.0% Priority Guarantee Notes due 2022, the $950.0 million outstanding under the 10.625% Priority Guarantee Notes due 2023, $6.0 million outstanding Other Secured Subsidiary debt, the $1,781.6 million outstanding under the 14.0% Senior Notes due 2021, the $475.0 million outstanding under the Legacy Notes and $10.8 million outstanding Other Subsidiary Debt were reclassified to Liabilities subject to compromise in the Company's Consolidated Balance Sheet as of the Petition Date. As of the Petition Date, the Company ceased making principal and interest payments, and ceased accruing interest expense in relation to long-term debt reclassified as Liabilities subject to compromise during the Predecessor period.
|
•
|
50% (which percentage may be reduced to 25% and to 0% based upon iHeartCommunications’ first lien leverage ratio) of iHeartCommunications’ annual excess cash flow, subject to customary credits, reductions and exclusions;
|
•
|
100% (which percentage may be reduced to 50% and 0% based upon iHeartCommunications’ first lien leverage ratio) of the net cash proceeds of sales or other dispositions of the assets of iHeartCommunications or its wholly owned restricted subsidiaries, subject to reinvestment rights and certain other exceptions; and
|
•
|
100% of the net cash proceeds of any incurrence of debt, other than debt permitted under the Term Loan Facility.
|
•
|
incur or guarantee additional debt or issue certain preferred stock;
|
•
|
create liens on certain assets;
|
•
|
redeem, purchase or retire subordinated debt;
|
•
|
make certain investments;
|
•
|
create restrictions on the payment of dividends or other amounts from iHeartCommunications’ restricted subsidiaries;
|
•
|
enter into certain transactions with affiliates;
|
•
|
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of iHeartCommunications’ assets;
|
•
|
sell certain assets, including capital stock of iHeartCommunications’ subsidiaries;
|
•
|
designate iHeartCommunications’ subsidiaries as unrestricted subsidiaries, and
|
•
|
pay dividends, redeem or repurchase capital stock or make other restricted payments.
|
•
|
incur or guarantee additional debt or issue certain preferred stock;
|
•
|
create liens on certain assets;
|
•
|
redeem, purchase or retire subordinated debt;
|
•
|
make certain investments;
|
•
|
create restrictions on the payment of dividends or other amounts from iHeartCommunications’ restricted subsidiaries;
|
•
|
enter into certain transactions with affiliates;
|
•
|
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of iHeartCommunications’ assets;
|
•
|
sell certain assets, including capital stock of iHeartCommunications’ subsidiaries;
|
•
|
designate iHeartCommunications’ subsidiaries as unrestricted subsidiaries, and
|
•
|
pay dividends, redeem or repurchase capital stock or make other restricted payments.
|
•
|
incur or guarantee additional debt or issue certain preferred stock;
|
•
|
create liens on certain assets;
|
•
|
redeem, purchase or retire subordinated debt;
|
•
|
make certain investments;
|
•
|
create restrictions on the payment of dividends or other amounts from iHeartCommunications’ restricted subsidiaries;
|
•
|
enter into certain transactions with affiliates;
|
•
|
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of iHeartCommunications’ assets;
|
•
|
sell certain assets, including capital stock of iHeartCommunications’ subsidiaries;
|
•
|
designate iHeartCommunications’ subsidiaries as unrestricted subsidiaries, and
|
•
|
pay dividends, redeem or repurchase capital stock or make other restricted payments.
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Current tax expense
|
$
|
(4,336
|
)
|
|
|
$
|
(2,471
|
)
|
Deferred tax expense
|
(12,422
|
)
|
|
|
(8,402
|
)
|
||
Income tax expense
|
$
|
(16,758
|
)
|
|
|
$
|
(10,873
|
)
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
|
2019
|
|
2018
|
||||||
Current tax benefit (expense)
|
$
|
(7,283
|
)
|
|
|
$
|
76,744
|
|
|
$
|
(9,041
|
)
|
Deferred tax benefit (expense)
|
(25,478
|
)
|
|
|
(115,839
|
)
|
|
18,869
|
|
|||
Income tax benefit (expense)
|
$
|
(32,761
|
)
|
|
|
$
|
(39,095
|
)
|
|
$
|
9,828
|
|
(In thousands, except share and per share data)
|
Successor Company
|
|
|
Predecessor Company
|
||
|
September 30,
2019 |
|
|
December 31,
2018 |
||
|
(Unaudited)
|
|
|
|
||
Predecessor Class A Common Stock, par value $.001 per share, authorized 400,000,000 shares, no shares issued in 2019 and 32,292,944 shares issued in 2018
|
—
|
|
|
|
32
|
|
Predecessor Class B Common Stock, par value $.001 per share, authorized 150,000,000 shares, no shares issued in 2019 and 555,556 shares issued in 2018
|
—
|
|
|
|
1
|
|
Predecessor Class C Common Stock, par value $.001 per share, authorized 100,000,000 shares, no shares issued in 2019 and 58,967,502 shares issued in 2018
|
—
|
|
|
|
59
|
|
Predecessor Class D Common Stock, par value $.001 per share, authorized 200,000,000 shares, no shares issued in 2019 and 2018
|
—
|
|
|
|
—
|
|
(In thousands, except share and per share data)
|
September 30,
2019 |
|
|
(Unaudited)
|
|
Successor Class A Common Stock, par value $.001 per share,1,000,000,000 shares authorized
|
57,670,714
|
|
Successor Class B Common Stock, par value $.001 per share, 1,000,000,000 shares authorized
|
6,925,976
|
|
Successor Special Warrants
|
81,289,306
|
|
Total Successor Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding
|
145,885,996
|
|
(In thousands, except per share data)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
NUMERATOR:
|
|
|
|
|
||||
Net income attributable to the Company – common shares
|
$
|
12,374
|
|
|
|
$
|
70,078
|
|
Exclude:
|
|
|
|
|
||||
Loss from discontinued operations, net of tax
|
$
|
—
|
|
|
|
$
|
(49,491
|
)
|
Noncontrolling interest from discontinued operations, net of tax - common shares
|
—
|
|
|
|
(1,705
|
)
|
||
Total loss from discontinued operations, net of tax - common shares
|
$
|
—
|
|
|
|
$
|
(51,196
|
)
|
Income from continuing operations
|
$
|
12,374
|
|
|
|
$
|
121,274
|
|
|
|
|
|
|
||||
DENOMINATOR(1):
|
|
|
|
|
|
|
||
Weighted average common shares outstanding - basic
|
145,720
|
|
|
|
85,544
|
|
||
Stock options and restricted stock(2):
|
120
|
|
|
|
78
|
|
||
Weighted average common shares outstanding - diluted
|
145,840
|
|
|
|
85,622
|
|
||
|
|
|
|
|
||||
Net income (loss) attributable to the Company per common share:
|
|
|
|
|
|
|
||
From continuing operations - Basic
|
$
|
0.08
|
|
|
|
$
|
1.42
|
|
From discontinued operations - Basic
|
$
|
—
|
|
|
|
$
|
(0.60
|
)
|
From continuing operations - Diluted
|
$
|
0.08
|
|
|
|
$
|
1.42
|
|
From discontinued operations - Diluted
|
$
|
—
|
|
|
|
$
|
(0.60
|
)
|
(In thousands, except per share data)
|
Successor Company
|
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
|
2019
|
|
2018
|
||||||
NUMERATOR:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to the Company – common shares
|
$
|
51,167
|
|
|
|
$
|
11,184,141
|
|
|
$
|
(416,815
|
)
|
Exclude:
|
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations, net of tax
|
$
|
—
|
|
|
|
$
|
1,685,123
|
|
|
$
|
(206,968
|
)
|
Noncontrolling interest from discontinued operations, net of tax - common shares
|
—
|
|
|
|
19,028
|
|
|
10,732
|
|
|||
Total income (loss) from discontinued operations, net of tax - common shares
|
$
|
—
|
|
|
|
$
|
1,704,151
|
|
|
$
|
(196,236
|
)
|
Income (loss) from continuing operations
|
$
|
51,167
|
|
|
|
$
|
9,479,990
|
|
|
$
|
(220,579
|
)
|
|
|
|
|
|
|
|
||||||
DENOMINATOR(1):
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - basic
|
145,543
|
|
|
|
86,241
|
|
|
85,348
|
|
|||
Stock options and restricted stock(2):
|
112
|
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding - diluted
|
145,655
|
|
|
|
86,241
|
|
|
85,348
|
|
|||
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to the Company per common share:
|
|
|
|
|
|
|
|
|
||||
From continuing operations - Basic
|
$
|
0.35
|
|
|
|
$
|
109.92
|
|
|
$
|
(2.58
|
)
|
From discontinued operations - Basic
|
$
|
—
|
|
|
|
$
|
19.76
|
|
|
$
|
(2.30
|
)
|
From continuing operations - Diluted
|
$
|
0.35
|
|
|
|
$
|
109.92
|
|
|
$
|
(2.58
|
)
|
From discontinued operations - Diluted
|
$
|
—
|
|
|
|
$
|
19.76
|
|
|
$
|
(2.30
|
)
|
(1)
|
All of the outstanding Special Warrants issued at emergence are included in both the basic and diluted weighted average common shares outstanding of the Successor Company for the three months ended September 30, 2019 and the period from May 2, 2019 through September 30, 2019.
|
(2)
|
Outstanding equity awards representing 8.1 million and 5.6 million shares of Class A common stock of the Successor Company for the three months ended September 30, 2019 and the period from May 2, 2019 through September 30, 2019 were not included in the computation of diluted earnings per share because to do so would have been antidilutive. Outstanding equity awards representing 6.6 million, 5.9 million and 7.6 million shares of Class A common stock of the Predecessor Company for the period for the three months ended September 30, 2018, the period from January 1, 2019 through May 1, 2019 and the nine months ended September 30, 2018 respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.
|
Successor Company
|
|||||||||||||||||||
(In thousands)
|
Audio
|
|
Audio & Media Services
|
|
Corporate and other reconciling items
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Three Months Ended September 30, 2019
|
|||||||||||||||||||
Revenue
|
$
|
890,364
|
|
|
$
|
59,873
|
|
|
$
|
—
|
|
|
$
|
(1,899
|
)
|
|
$
|
948,338
|
|
Direct operating expenses
|
283,984
|
|
|
7,281
|
|
|
—
|
|
|
(294
|
)
|
|
290,971
|
|
|||||
Selling, general and administrative expenses
|
310,337
|
|
|
32,609
|
|
|
—
|
|
|
(1,593
|
)
|
|
341,353
|
|
|||||
Corporate expenses
|
—
|
|
|
—
|
|
|
70,056
|
|
|
(12
|
)
|
|
70,044
|
|
|||||
Depreciation and amortization
|
87,442
|
|
|
5,971
|
|
|
1,855
|
|
|
—
|
|
|
95,268
|
|
|||||
Other operating expense, net
|
—
|
|
|
—
|
|
|
(9,880
|
)
|
|
—
|
|
|
(9,880
|
)
|
|||||
Operating income (loss)
|
$
|
208,601
|
|
|
$
|
14,012
|
|
|
$
|
(81,791
|
)
|
|
$
|
—
|
|
|
$
|
140,822
|
|
Intersegment revenues
|
$
|
168
|
|
|
$
|
1,731
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,899
|
|
Capital expenditures
|
$
|
23,705
|
|
|
$
|
1,994
|
|
|
$
|
3,171
|
|
|
$
|
—
|
|
|
$
|
28,870
|
|
Share-based compensation expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,112
|
|
|
$
|
—
|
|
|
$
|
17,112
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Period from May 2, 2019 through September 30, 2019
|
|||||||||||||||||||
Revenue
|
$
|
1,486,594
|
|
|
$
|
100,410
|
|
|
$
|
—
|
|
|
$
|
(3,020
|
)
|
|
$
|
1,583,984
|
|
Direct operating expenses
|
463,455
|
|
|
12,153
|
|
|
—
|
|
|
(346
|
)
|
|
475,262
|
|
|||||
Selling, general and administrative expenses
|
516,343
|
|
|
54,804
|
|
|
—
|
|
|
(2,654
|
)
|
|
568,493
|
|
|||||
Corporate expenses
|
—
|
|
|
—
|
|
|
104,454
|
|
|
(20
|
)
|
|
104,434
|
|
|||||
Depreciation and amortization
|
142,019
|
|
|
9,590
|
|
|
3,042
|
|
|
—
|
|
|
154,651
|
|
|||||
Other operating expense, net
|
—
|
|
|
—
|
|
|
(6,634
|
)
|
|
—
|
|
|
(6,634
|
)
|
|||||
Operating income (loss)
|
$
|
364,777
|
|
|
$
|
23,863
|
|
|
$
|
(114,130
|
)
|
|
$
|
—
|
|
|
$
|
274,510
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intersegment revenues
|
$
|
280
|
|
|
$
|
2,740
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,020
|
|
Capital expenditures
|
$
|
37,259
|
|
|
$
|
2,824
|
|
|
$
|
6,222
|
|
|
$
|
—
|
|
|
$
|
46,305
|
|
Share-based compensation expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,151
|
|
|
$
|
—
|
|
|
$
|
20,151
|
|
Predecessor Company
|
|||||||||||||||||||
(In thousands)
|
Audio
|
|
Audio and Media Services
|
|
Corporate and other reconciling items
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Three Months Ended September 30, 2018
|
|||||||||||||||||||
Revenue
|
$
|
852,280
|
|
|
$
|
69,823
|
|
|
$
|
—
|
|
|
$
|
(1,611
|
)
|
|
$
|
920,492
|
|
Direct operating expenses
|
261,645
|
|
|
7,052
|
|
|
—
|
|
|
(91
|
)
|
|
268,606
|
|
|||||
Selling, general and administrative expenses
|
297,851
|
|
|
33,105
|
|
|
—
|
|
|
(1,520
|
)
|
|
329,436
|
|
|||||
Corporate expenses
|
—
|
|
|
—
|
|
|
56,699
|
|
|
—
|
|
|
56,699
|
|
|||||
Depreciation and amortization
|
33,754
|
|
|
4,350
|
|
|
5,191
|
|
|
—
|
|
|
43,295
|
|
|||||
Impairment charges
|
—
|
|
|
—
|
|
|
33,150
|
|
|
—
|
|
|
33,150
|
|
|||||
Other operating expense, net
|
—
|
|
|
—
|
|
|
(2,462
|
)
|
|
—
|
|
|
(2,462
|
)
|
|||||
Operating income (loss)
|
$
|
259,030
|
|
|
$
|
25,316
|
|
|
$
|
(97,502
|
)
|
|
$
|
—
|
|
|
$
|
186,844
|
|
Intersegment revenues
|
$
|
—
|
|
|
$
|
1,611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,611
|
|
Capital expenditures
|
$
|
16,951
|
|
|
$
|
1,695
|
|
|
$
|
1,496
|
|
|
$
|
—
|
|
|
$
|
20,142
|
|
Share-based compensation expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
456
|
|
|
$
|
—
|
|
|
$
|
456
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Period from January 1, 2019 through May 1, 2019
|
|||||||||||||||||||
Revenue
|
$
|
1,006,677
|
|
|
$
|
69,362
|
|
|
$
|
—
|
|
|
$
|
(2,568
|
)
|
|
$
|
1,073,471
|
|
Direct operating expenses
|
350,501
|
|
|
9,559
|
|
|
—
|
|
|
(364
|
)
|
|
359,696
|
|
|||||
Selling, general and administrative expenses
|
396,032
|
|
|
42,497
|
|
|
—
|
|
|
(2,184
|
)
|
|
436,345
|
|
|||||
Corporate expenses
|
|
|
|
|
66,040
|
|
|
(20
|
)
|
|
66,020
|
|
|||||||
Depreciation and amortization
|
40,982
|
|
|
5,266
|
|
|
6,586
|
|
|
—
|
|
|
52,834
|
|
|||||
Impairment charges
|
—
|
|
|
—
|
|
|
91,382
|
|
|
—
|
|
|
91,382
|
|
|||||
Other operating expense, net
|
—
|
|
|
—
|
|
|
(154
|
)
|
|
—
|
|
|
(154
|
)
|
|||||
Operating income (loss)
|
$
|
219,162
|
|
|
$
|
12,040
|
|
|
$
|
(164,162
|
)
|
|
$
|
—
|
|
|
$
|
67,040
|
|
Intersegment revenues
|
$
|
243
|
|
|
$
|
2,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,568
|
|
Capital expenditures
|
$
|
31,177
|
|
|
$
|
1,263
|
|
|
$
|
3,757
|
|
|
$
|
—
|
|
|
$
|
36,197
|
|
Share-based compensation expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
498
|
|
|
$
|
—
|
|
|
$
|
498
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2018
|
|||||||||||||||||||
Revenue
|
$
|
2,409,330
|
|
|
$
|
180,582
|
|
|
$
|
—
|
|
|
$
|
(4,884
|
)
|
|
$
|
2,585,028
|
|
Direct operating expenses
|
752,447
|
|
|
21,160
|
|
|
—
|
|
|
(183
|
)
|
|
773,424
|
|
|||||
Selling, general and administrative expenses
|
912,412
|
|
|
96,003
|
|
|
—
|
|
|
(4,687
|
)
|
|
1,003,728
|
|
|||||
Corporate expenses
|
—
|
|
|
—
|
|
|
162,089
|
|
|
(14
|
)
|
|
162,075
|
|
|||||
Depreciation and amortization
|
146,048
|
|
|
13,908
|
|
|
15,590
|
|
|
—
|
|
|
175,546
|
|
|||||
Impairment charges
|
—
|
|
|
—
|
|
|
33,150
|
|
|
—
|
|
|
33,150
|
|
|||||
Other operating expense, net
|
—
|
|
|
—
|
|
|
(6,912
|
)
|
|
—
|
|
|
(6,912
|
)
|
|||||
Operating income (loss)
|
$
|
598,423
|
|
|
$
|
49,511
|
|
|
$
|
(217,741
|
)
|
|
$
|
—
|
|
|
$
|
430,193
|
|
Intersegment revenues
|
$
|
—
|
|
|
$
|
4,884
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,884
|
|
Capital expenditures
|
$
|
40,836
|
|
|
$
|
2,458
|
|
|
$
|
4,154
|
|
|
$
|
—
|
|
|
$
|
47,448
|
|
Share-based compensation expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,628
|
|
|
$
|
—
|
|
|
$
|
1,628
|
|
•
|
Revenue of $948.3 million increased $27.8 million or 3.0% during quarter ended September 30, 2019 compared to the same period of 2018.
|
•
|
Operating income of $140.8 million was down from $186.8 million in the prior year’s quarter.
|
•
|
Net income of $12.4 million was down from $71.8 million in the prior year's quarter.
|
•
|
Adjusted EBITDA(1) of $274.7 million, was up 0.3% year-over-year.
|
•
|
Cash flows provided by operating activities from continuing operations of $180.3 million increased $24.8 million or 16.0%.
|
•
|
Free cash flow(2) of $151.5 million increased $16.1 million or 11.9%.
|
•
|
iHeartCommunications issued $750.0 million of new 5.25% Senior Secured Notes due 2027. Proceeds from the new notes, together with cash on hand, were used to prepay at par $740.0 million of borrowings outstanding under the Term Loan Facility.
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
|
|||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
|
%
|
|||||
|
2019
|
|
|
2018
|
|
Change
|
|||||
Revenue
|
$
|
948,338
|
|
|
|
$
|
920,492
|
|
|
3.0
|
%
|
Operating income
|
$
|
140,822
|
|
|
|
$
|
186,844
|
|
|
(24.6
|
)%
|
Net income
|
$
|
12,374
|
|
|
|
$
|
71,783
|
|
|
(82.8
|
)%
|
Cash provided by operating activities from continuing operations
|
$
|
180,341
|
|
|
|
$
|
155,528
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA(1)
|
$
|
274,656
|
|
|
|
$
|
273,804
|
|
|
0.3
|
%
|
Free cash flow from continuing operations(2)
|
$
|
151,471
|
|
|
|
$
|
135,386
|
|
|
11.9
|
%
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Revenue
|
$
|
948,338
|
|
|
|
$
|
920,492
|
|
Operating expenses:
|
|
|
|
|
||||
Direct operating expenses (excludes depreciation and amortization)
|
290,971
|
|
|
|
268,606
|
|
||
Selling, general and administrative expenses (excludes depreciation and amortization)
|
341,353
|
|
|
|
329,436
|
|
||
Corporate expenses (excludes depreciation and amortization)
|
70,044
|
|
|
|
56,699
|
|
||
Depreciation and amortization
|
95,268
|
|
|
|
43,295
|
|
||
Impairment charges
|
—
|
|
|
|
33,150
|
|
||
Other operating expense, net
|
(9,880
|
)
|
|
|
(2,462
|
)
|
||
Operating income
|
140,822
|
|
|
|
186,844
|
|
||
Interest expense, net
|
100,967
|
|
|
|
2,097
|
|
||
Gain on investments, net
|
1,735
|
|
|
|
186
|
|
||
Equity in loss of nonconsolidated affiliates
|
(1
|
)
|
|
|
(30
|
)
|
||
Other expense, net
|
(12,457
|
)
|
|
|
(281
|
)
|
||
Reorganization items, net
|
—
|
|
|
|
(52,475
|
)
|
||
Income from continuing operations before income taxes
|
29,132
|
|
|
|
132,147
|
|
||
Income tax expense
|
(16,758
|
)
|
|
|
(10,873
|
)
|
||
Income from continuing operations
|
12,374
|
|
|
|
121,274
|
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
|
(49,491
|
)
|
||
Net income
|
12,374
|
|
|
|
71,783
|
|
||
Less amount attributable to noncontrolling interest
|
—
|
|
|
|
1,705
|
|
||
Net income attributable to the Company
|
$
|
12,374
|
|
|
|
$
|
70,078
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
Non-GAAP Combined
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
|
2019
|
|
2019
|
|
2018
|
||||||||
Revenue
|
$
|
1,583,984
|
|
|
|
$
|
1,073,471
|
|
|
$
|
2,657,455
|
|
|
$
|
2,585,028
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses (excludes depreciation and amortization)
|
475,262
|
|
|
|
359,696
|
|
|
834,958
|
|
|
773,424
|
|
||||
Selling, general and administrative expenses (excludes depreciation and amortization)
|
568,493
|
|
|
|
436,345
|
|
|
1,004,838
|
|
|
1,003,728
|
|
||||
Corporate expenses (excludes depreciation and amortization)
|
104,434
|
|
|
|
66,020
|
|
|
170,454
|
|
|
162,075
|
|
||||
Depreciation and amortization
|
154,651
|
|
|
|
52,834
|
|
|
207,485
|
|
|
175,546
|
|
||||
Impairment charges
|
—
|
|
|
|
91,382
|
|
|
91,382
|
|
|
33,150
|
|
||||
Other operating expense, net
|
(6,634
|
)
|
|
|
(154
|
)
|
|
(6,788
|
)
|
|
(6,912
|
)
|
||||
Operating income
|
274,510
|
|
|
|
67,040
|
|
|
341,550
|
|
|
430,193
|
|
||||
Interest expense (income), net
|
170,678
|
|
|
|
(499
|
)
|
|
170,179
|
|
|
333,843
|
|
||||
Gain (loss) on investments, net
|
1,735
|
|
|
|
(10,237
|
)
|
|
(8,502
|
)
|
|
9,361
|
|
||||
Equity in loss of nonconsolidated affiliates
|
(25
|
)
|
|
|
(66
|
)
|
|
(91
|
)
|
|
(93
|
)
|
||||
Other income (expense), net
|
(21,614
|
)
|
|
|
23
|
|
|
(21,591
|
)
|
|
(22,755
|
)
|
||||
Reorganization items, net
|
—
|
|
|
|
9,461,826
|
|
|
9,461,826
|
|
|
(313,270
|
)
|
||||
Income (loss) from continuing operations before income taxes
|
83,928
|
|
|
|
9,519,085
|
|
|
9,603,013
|
|
|
(230,407
|
)
|
||||
Income tax benefit (expense)
|
(32,761
|
)
|
|
|
(39,095
|
)
|
|
(71,856
|
)
|
|
9,828
|
|
||||
Income (loss) from continuing operations
|
51,167
|
|
|
|
9,479,990
|
|
|
9,531,157
|
|
|
(220,579
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
|
1,685,123
|
|
|
1,685,123
|
|
|
(206,968
|
)
|
||||
Net income (loss)
|
51,167
|
|
|
|
11,165,113
|
|
|
11,216,280
|
|
|
(427,547
|
)
|
||||
Less amount attributable to noncontrolling interest
|
—
|
|
|
|
(19,028
|
)
|
|
(19,028
|
)
|
|
(10,732
|
)
|
||||
Net income (loss) attributable to the Company
|
$
|
51,167
|
|
|
|
$
|
11,184,141
|
|
|
$
|
11,235,308
|
|
|
$
|
(416,815
|
)
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Broadcast Radio
|
$
|
573,048
|
|
|
|
$
|
576,460
|
|
Digital
|
96,656
|
|
|
|
72,447
|
|
||
Networks
|
160,133
|
|
|
|
146,587
|
|
||
Sponsorship and Events
|
55,541
|
|
|
|
53,191
|
|
||
Audio and Media Services
|
59,873
|
|
|
|
69,823
|
|
||
Other
|
4,986
|
|
|
|
3,595
|
|
||
Eliminations
|
(1,899
|
)
|
|
|
(1,611
|
)
|
||
Revenue, total
|
$
|
948,338
|
|
|
|
$
|
920,492
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
Non-GAAP Combined
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
|
2019
|
|
2019
|
|
2018
|
||||||||
Broadcast Radio
|
$
|
963,588
|
|
|
|
$
|
657,864
|
|
|
$
|
1,621,452
|
|
|
$
|
1,635,571
|
|
Digital
|
160,894
|
|
|
|
102,789
|
|
|
263,683
|
|
|
200,388
|
|
||||
Networks
|
265,559
|
|
|
|
189,088
|
|
|
454,647
|
|
|
425,619
|
|
||||
Sponsorship and Events
|
87,331
|
|
|
|
50,330
|
|
|
137,661
|
|
|
132,339
|
|
||||
Audio and Media Services
|
100,410
|
|
|
|
69,362
|
|
|
169,772
|
|
|
180,582
|
|
||||
Other
|
9,222
|
|
|
|
6,606
|
|
|
15,828
|
|
|
15,413
|
|
||||
Eliminations
|
(3,020
|
)
|
|
|
(2,568
|
)
|
|
(5,588
|
)
|
|
(4,884
|
)
|
||||
Revenue, total
|
$
|
1,583,984
|
|
|
|
$
|
1,073,471
|
|
|
$
|
2,657,455
|
|
|
$
|
2,585,028
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
|
|||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
|
%
|
|||||
|
2019
|
|
|
2018
|
|
Change
|
|||||
Operating income
|
$
|
140,822
|
|
|
|
$
|
186,844
|
|
|
(24.6
|
)%
|
Depreciation and amortization
|
95,268
|
|
|
|
43,295
|
|
|
|
|||
Impairment charges
|
—
|
|
|
|
33,150
|
|
|
|
|||
Other operating expense, net
|
9,880
|
|
|
|
2,462
|
|
|
|
|||
Share-based compensation expense
|
17,112
|
|
|
|
456
|
|
|
|
|||
Restructuring and reorganization expenses
|
11,574
|
|
|
|
7,597
|
|
|
|
|||
Adjusted EBITDA(1)
|
$
|
274,656
|
|
|
|
$
|
273,804
|
|
|
0.3
|
%
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
Non-GAAP Combined2
|
|
Predecessor Company
|
|
|
|||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
%
|
|||||||||
|
2019
|
|
|
2019
|
|
2019
|
|
2018
|
|
Change
|
|||||||||
Operating income
|
$
|
274,510
|
|
|
|
$
|
67,040
|
|
|
$
|
341,550
|
|
|
$
|
430,193
|
|
|
(20.6
|
)%
|
Depreciation and amortization
|
154,651
|
|
|
|
52,834
|
|
|
207,485
|
|
|
175,546
|
|
|
|
|||||
Impairment charges
|
—
|
|
|
|
91,382
|
|
|
91,382
|
|
|
33,150
|
|
|
|
|||||
Other operating expense, net
|
6,634
|
|
|
|
154
|
|
|
6,788
|
|
|
6,912
|
|
|
|
|||||
Share-based compensation expense
|
20,151
|
|
|
|
498
|
|
|
20,649
|
|
|
1,628
|
|
|
|
|||||
Restructuring and reorganization expenses
|
13,463
|
|
|
|
13,241
|
|
|
26,704
|
|
|
21,132
|
|
|
|
|||||
Adjusted EBITDA(1)
|
$
|
469,409
|
|
|
|
$
|
225,149
|
|
|
$
|
694,558
|
|
|
$
|
668,561
|
|
|
3.9
|
%
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Net income
|
$
|
12,374
|
|
|
|
$
|
71,783
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
|
49,491
|
|
||
Income tax expense
|
16,758
|
|
|
|
10,873
|
|
||
Interest expense, net
|
100,967
|
|
|
|
2,097
|
|
||
Depreciation and amortization
|
95,268
|
|
|
|
43,295
|
|
||
EBITDA
|
$
|
225,367
|
|
|
|
$
|
177,539
|
|
Reorganization items, net
|
—
|
|
|
|
52,475
|
|
||
Gain on investments, net
|
(1,735
|
)
|
|
|
(186
|
)
|
||
Other expense, net
|
12,457
|
|
|
|
281
|
|
||
Equity in loss of nonconsolidated affiliates
|
1
|
|
|
|
30
|
|
||
Impairment charges
|
—
|
|
|
|
33,150
|
|
||
Other operating expense, net
|
9,880
|
|
|
|
2,462
|
|
||
Share-based compensation expense
|
17,112
|
|
|
|
456
|
|
||
Restructuring and reorganization expenses
|
11,574
|
|
|
|
7,597
|
|
||
Adjusted EBITDA(1)
|
$
|
274,656
|
|
|
|
$
|
273,804
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
Non-GAAP Combined
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
|
2019
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
51,167
|
|
|
|
$
|
11,165,113
|
|
|
$
|
11,216,280
|
|
|
$
|
(427,547
|
)
|
(Income) loss from discontinued operations, net of tax
|
—
|
|
|
|
(1,685,123
|
)
|
|
(1,685,123
|
)
|
|
206,968
|
|
||||
Income tax (benefit) expense
|
32,761
|
|
|
|
39,095
|
|
|
71,856
|
|
|
(9,828
|
)
|
||||
Interest expense (income), net
|
170,678
|
|
|
|
(499
|
)
|
|
170,179
|
|
|
333,843
|
|
||||
Depreciation and amortization
|
154,651
|
|
|
|
52,834
|
|
|
207,485
|
|
|
175,546
|
|
||||
EBITDA
|
$
|
409,257
|
|
|
|
$
|
9,571,420
|
|
|
$
|
9,980,677
|
|
|
$
|
278,982
|
|
Reorganization items, net
|
—
|
|
|
|
(9,461,826
|
)
|
|
(9,461,826
|
)
|
|
313,270
|
|
||||
(Gain) loss on investments, net
|
(1,735
|
)
|
|
|
10,237
|
|
|
8,502
|
|
|
(9,361
|
)
|
||||
Other income (expense), net
|
21,614
|
|
|
|
(23
|
)
|
|
21,591
|
|
|
22,755
|
|
||||
Equity in loss of nonconsolidated affiliates
|
25
|
|
|
|
66
|
|
|
91
|
|
|
93
|
|
||||
Impairment charges
|
—
|
|
|
|
91,382
|
|
|
91,382
|
|
|
33,150
|
|
||||
Other operating expense, net
|
6,634
|
|
|
|
154
|
|
|
6,788
|
|
|
6,912
|
|
||||
Share-based compensation expense
|
20,151
|
|
|
|
498
|
|
|
20,649
|
|
|
1,628
|
|
||||
Restructuring and reorganization expenses
|
13,463
|
|
|
|
13,241
|
|
|
26,704
|
|
|
21,132
|
|
||||
Adjusted EBITDA(1)
|
$
|
469,409
|
|
|
|
$
|
225,149
|
|
|
$
|
694,558
|
|
|
$
|
668,561
|
|
(1)
|
We define Adjusted EBITDA as consolidated Operating income adjusted to exclude restructuring and reorganization expenses included within Direct operating expenses, Selling, General and Administrative expenses, (“SG&A”) and Corporate expenses and share-based compensation expenses included within Corporate 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 income (loss), adjusted to exclude (Income) loss from discontinued operations, net of tax, Income tax (benefit) expense, Interest expense, Depreciation and amortization, Reorganization items, net, Other (income) expense, net, Gain (loss) on investments, net, Impairment charges, Other operating (income) expense, net, Share-based compensation, and restructuring and reorganization expenses. Restructuring expenses primarily include severance 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. Reorganization expenses primarily include the amortization of retention bonus amounts paid or payable to certain members of management directly as a result of the Reorganization. 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 income or net income (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.
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Three Months Ended September 30,
|
|
|
Three Months Ended September 30,
|
||||
|
2019
|
|
|
2018
|
||||
Cash provided by operating activities from continuing operations
|
$
|
180,341
|
|
|
|
$
|
155,528
|
|
Purchases of property, plant and equipment by continuing operations
|
(28,870
|
)
|
|
|
(20,142
|
)
|
||
Free cash flow from continuing operations(1)
|
$
|
151,471
|
|
|
|
$
|
135,386
|
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
Non-GAAP Combined
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
|
2019
|
|
2019
|
|
2018
|
||||||||
Cash provided by (used for) operating activities from continuing operations
|
$
|
263,542
|
|
|
|
$
|
(7,505
|
)
|
|
$
|
256,037
|
|
|
$
|
515,713
|
|
Purchases of property, plant and equipment by continuing operations
|
(46,305
|
)
|
|
|
(36,197
|
)
|
|
(82,502
|
)
|
|
(47,448
|
)
|
||||
Free cash flow from (used for) continuing operations(1)
|
$
|
217,237
|
|
|
|
$
|
(43,702
|
)
|
|
$
|
173,535
|
|
|
$
|
468,265
|
|
(1)
|
We define Free cash flow from (used for) continuing operations ("Free Cash Flow") as Cash provided by (used for) operating activities from continuing operations less capital expenditures, which is disclosed as Purchases of property, plant and equipment by continuing
|
(In thousands)
|
Successor Company
|
|
|
Predecessor Company
|
|
Non-GAAP Combined
|
|
Predecessor Company
|
||||||||
|
Period from May 2, 2019 through September 30,
|
|
|
Period from January 1, 2019 through May 1,
|
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
|
2019
|
|
2019
|
|
2018
|
||||||||
Cash provided by (used for):
|
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
263,542
|
|
|
|
$
|
(40,186
|
)
|
|
$
|
223,356
|
|
|
$
|
663,349
|
|
Investing activities
|
$
|
(43,815
|
)
|
|
|
$
|
(261,144
|
)
|
|
$
|
(304,959
|
)
|
|
$
|
(134,892
|
)
|
Financing activities
|
$
|
(5,095
|
)
|
|
|
$
|
(55,557
|
)
|
|
$
|
(60,652
|
)
|
|
$
|
(493,107
|
)
|
Free Cash Flow(1)
|
$
|
217,237
|
|
|
|
$
|
(43,702
|
)
|
|
$
|
173,535
|
|
|
$
|
468,265
|
|
(In millions)
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
September 30, 2019
|
|
|
December 31, 2018
|
||||
Term Loan Facility due 2026(1)
|
$
|
2,757.4
|
|
|
|
$
|
—
|
|
Debtors-in-Possession Facility(2)
|
—
|
|
|
|
—
|
|
||
Asset-based Revolving Credit Facility due 2023(2)
|
—
|
|
|
|
—
|
|
||
6.375% Senior Secured Notes due 2026
|
800.0
|
|
|
|
—
|
|
||
5.25% Senior Secured Notes due 2027(1)
|
750.0
|
|
|
|
—
|
|
||
Other Secured Subsidiary Debt
|
4.4
|
|
|
|
—
|
|
||
Total Secured Debt
|
4,311.8
|
|
|
|
—
|
|
||
|
|
|
|
|
||||
8.375% Senior Unsecured Notes due 2027
|
1,450.0
|
|
|
|
—
|
|
||
Other Subsidiary Debt
|
58.5
|
|
|
|
46.1
|
|
||
Long-term debt fees
|
(11.3
|
)
|
|
|
—
|
|
||
Liabilities subject to compromise(3)
|
—
|
|
|
|
15,149.5
|
|
||
Total Debt
|
5,809.0
|
|
|
|
15,195.6
|
|
||
Less: Cash and cash equivalents
|
277.1
|
|
|
|
224.0
|
|
||
|
$
|
5,531.9
|
|
|
|
$
|
14,971.6
|
|
(1)
|
On August 7, 2019, iHeartCommunications issued the 5.25% Senior Secured Notes, the proceeds of which were used, together with cash on hand, to prepay at par $740.0 million of borrowings outstanding under the Term Loan Facility, plus approximately $0.8 million of accrued and unpaid interest to, but not including, the date of prepayment.
|
(2)
|
The Debtors-in-Possession Facility (the "DIP" Facility), which terminated with our emergence from the Chapter 11 Cases, provided for borrowings of up to $450.0 million. On the Effective Date, the DIP Facility was repaid and canceled and iHeartCommunications entered into the ABL Facility. As of September 30, 2019, we had a facility size of $450.0 million under the ABL Facility, had no outstanding borrowings and had $49.2 million of outstanding letters of credit, resulting in $400.8 million of excess availability.
|
(3)
|
In connection with our Chapter 11 Cases, the $6.3 billion outstanding under the Senior Secured Credit Facilities, the $1,999.8 million outstanding under the 9.0% Priority Guarantee Notes due 2019, the $1,750.0 million outstanding under the 9.0% Priority Guarantee Notes due 2021, the $870.5 million of 11.25% Priority Guarantee Notes due 2021, the $1,000.0 million outstanding under the 9.0% Priority Guarantee Notes due 2022, the $950.0 million outstanding under the 10.625% Priority Guarantee Notes due 2023, $6.0 million outstanding Other Secured Subsidiary Debt, the $1,781.6 million outstanding under the 14.0% Senior Notes due 2021, the $475.0 million outstanding under the Legacy Notes and $10.8 million outstanding Other Subsidiary Debt were reclassified to Liabilities subject to compromise in our Consolidated Balance Sheet as of December 31, 2018. As of the Petition Date, we ceased accruing interest expense in relation to long-term debt reclassified as Liabilities subject to compromise.
|
•
|
risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures on 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;
|
•
|
technological changes and innovations;
|
•
|
shifts in population and other demographics;
|
•
|
the impact of future dispositions, acquisitions and other strategic transactions;
|
•
|
legislative or regulatory requirements;
|
•
|
regulations and consumer concerns regarding privacy and data protection, and breaches of information security measures;
|
•
|
risks associated with our emergence from the Chapter 11 Cases;
|
•
|
volatility in the trading price of our Class A common stock, which has a limited trading history;
|
•
|
substantial market overhang from securities issued in the Reorganization;
|
•
|
regulations impacting our business and the ownership of our securities; and
|
•
|
certain other factors set forth in our other filings with the SEC.
|
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
|
||||||
July 1 through July 31
|
121,651
|
|
|
$
|
16.25
|
|
|
—
|
|
|
$
|
—
|
|
August 1 through August 31
|
1,180
|
|
|
16.46
|
|
|
—
|
|
|
—
|
|
||
September 1 through September 30
|
2,379
|
|
|
16.25
|
|
|
—
|
|
|
—
|
|
||
Total
|
125,210
|
|
|
$
|
16.25
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
The shares indicated consist of shares of our Class A common stock tendered by employees to us during the three months ended September 30, 2019 to satisfy the employees’ tax withholding obligation in connection with the vesting and release of restricted shares, which are repurchased by us based on their fair market value on the date the relevant transaction occurs.
|
Exhibit
Number
|
|
Description
|
4.1
|
|
|
4.2
|
|
|
10.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101*
|
|
Interactive Data Files.
|
|
IHEARTMEDIA, INC.
|
|
|
November 7, 2019
|
/s/ SCOTT D. HAMILTON
|
|
Scott D. Hamilton
|
|
Senior Vice President, Chief Accounting Officer and Assistant Secretary
|
1.
|
TERM OF EMPLOYMENT
|
2.
|
TITLE AND EXCLUSIVE SERVICES
|
(a)
|
Title and Duties. Employee’s title is Executive Vice President - Finance and Deputy Chief Financial Officer, reporting to the Chief Financial Officer, and Employee will perform job duties that are usual and customary for this position.
|
(b)
|
Exclusive Services. Employee shall not be employed or render services elsewhere during the Employment Period, provided, however, that Employee may participate in professional, civic or charitable organizations so long as such participation is unpaid and does not interfere with the performance of Employee’s duties.
|
(c)
|
Pre-Conditions. Employee affirms that no obligation exists with any prior employer or entity which would prevent full performance of this Agreement, or subject Company to any claim with respect to Company’s employment of Employee. The effectiveness of this Agreement is contingent upon, as applicable: (i) successful completion of a background check and (ii) valid authorization to work in the United States. Company reserves the right to rescind any offer of employment or continued employment should you fail to meet these requirements.
|
3.
|
COMPENSATION AND BENEFITS
|
(a)
|
Base Salary. Employee shall be paid an annualized salary of Five Hundred Seventy-Five Thousand Dollars ($575,000.00) (“Base Salary”). The Base Salary shall be payable in accordance with the Company’s regular payroll practices and pursuant to Company policy, which may be amended from time to time. Employee is eligible for salary increases at Company’s discretion based on Company and/or individual performance.
|
(b)
|
Vacation. Employee is eligible for vacation days subject to the Employee Guide.
|
(c)
|
Annual Bonus. Eligibility for an Annual Bonus is based on financial and performance criteria established by Company and approved in the annual budget, pursuant to the terms of the applicable bonus plan which operates at the discretion of Company and its Board of Directors and is not a
|
(d)
|
One-Time Long-Term Incentive Grant. As additional consideration for entering into this Agreement, Employee shall be awarded a one-time Long Term Incentive Grant of (i) 20,000 restricted stock units and (ii) 30,000 options to acquire shares of the Class A Common Stock of iHeartMedia, Inc. (“iHM, Inc.”), pursuant to the iHM, Inc. 2019 Incentive Equity Plan (the “Plan”), and applicable award agreement, subject to approval by the Board of Directors or the Compensation Committee of iHM, Inc., as applicable.
|
(e)
|
Long Term Incentive. Employee will also be eligible for Long Term Incentive (“LTI”) opportunities consistent with other comparable positions pursuant to the terms of the award agreement(s), taking into consideration demonstrated performance and potential, and subject to approval by Employee’s Manager and the Board of Directors or the Compensation Committee of iHM, Inc., as applicable.
|
(f)
|
Benefits. Employee will be eligible to participate in various benefit programs provided by Company on the same terms and conditions as they are made available to other similarly situated employees.
|
(g)
|
Expenses. Company will reimburse Employee for business expenses, consistent with past practices pursuant to Company policy. Any reimbursement that would constitute nonqualified deferred compensation shall be paid pursuant to Section 409A.
|
(h)
|
Compensation pursuant to this section shall be subject to overtime eligibility, if applicable, and in all cases be less applicable payroll taxes and other deductions.
|
4.
|
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
|
(a)
|
Company has provided and will continue to provide to Employee confidential information and trade secrets including but not limited to Company’s marketing plans, growth strategies, target lists, performance goals, operational and programming strategies, specialized training expertise, employee development, engineering information, sales information, client and customer lists, contracts, representation agreements, pricing and ratings information, production and cost data, fee information, strategic business plans, budgets, financial statements, technological initiatives, proprietary research or software purchased or developed by Company, content distribution, information about employees obtained by virtue of an employee’s job responsibilities and other information Company treats as confidential or proprietary (collectively the “Confidential Information”). Employee acknowledges that such Confidential Information is proprietary and agrees not to disclose it to anyone outside Company except to the extent that (i) it is necessary in connection with performing Employee’s duties; or (ii) Employee is required by court order to disclose the Confidential Information, provided that Employee shall promptly inform Company, shall cooperate
|
(b)
|
Employee understands, agrees and acknowledges that the provisions in this Agreement do not prohibit or restrict Employee from communicating with the DOJ, SEC, DOL, NLRB, EEOC or any other governmental authority, exercising Employee’s rights, if any, under the National Labor Relations Act to engage in protected concerted activity, making a report in good faith and with a reasonable belief of any violations of law or regulation to a governmental authority or cooperating with or participating in a legal proceeding relating to such violations including providing documents or other information. Employee is hereby provided notice that under the 2016 Defend Trade Secrets Act (DTSA): (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that: (a) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.
|
(c)
|
The terms of this Section 4 shall survive the expiration or termination of this Agreement for any reason. Further, this Section 4 shall not be applied to interfere with Employee’s Section 7 rights under the National Labor Relations Act.
|
5.
|
NON-INTERFERENCE WITH COMPANY EMPLOYEES AND ON-AIR TALENT
|
(a)
|
To further preserve Company’s Confidential Information, goodwill and legitimate business interests, during employment and for twelve (12) months after employment ends (the “Non-Interference Period”), Employee will not, directly or indirectly, hire, engage or solicit any current employee or on-air talent of Company with whom Employee, within the twelve (12) months prior to Employee’s termination, had contact, supervised or received Confidential Information about, to provide services elsewhere or cease providing services to Company.
|
(b)
|
The terms of this Section 5 shall survive the expiration or termination of this Agreement for any reason.
|
6.
|
NON-SOLICITATION OF CLIENTS
|
(a)
|
To further preserve Company’s Confidential Information, goodwill and legitimate business interests, for twelve (12) months after employment ends (the “Non-Solicitation Period”), Employee will not, directly or indirectly, solicit Company’s clients with whom Employee, within the twelve (12) months prior to Employee’s termination, engaged, had contact or received Confidential Information about (“Restricted Clients”). For the purposes of this Section, “solicit” shall mean (i) inducing or attempting to induce Restricted Clients to diminish or cease doing business with Company; (ii) inducing or attempting to induce Restricted Clients to advertise with or sponsor any other entity
|
(b)
|
The terms of this Section 6 shall survive the expiration or termination of this Agreement for any reason.
|
7.
|
NON-COMPETITION AGREEMENT
|
(a)
|
To further preserve Company's Confidential Information, goodwill, specialized training expertise, and legitimate business interests, Employee agrees that during employment and for twelve (12) months after employment ends (the “Non-Compete Period”), Employee will not perform, directly or indirectly, the same or similar services provided by Employee for Company, or in a capacity that would otherwise likely result in the use or disclosure of Confidential Information, for any entity engaged in a business in which Company is engaged (including such business that is in the research, development or implementation stages), and with which Employee participated at the time of Employee’s termination or within the twelve (12) months prior to Employee’s termination or about which Employee received Confidential Information, (“Competitor”), including, but not limited to: Amazon, Inc.; Apple, Inc.; Cumulus Media, Inc.; Entercom Communications Corp.; Pandora Media, Inc.; Sirius XM Radio Inc.; Google; Rhapsody International, Inc.; Slacker Radio; iTunes Radio; Spotify USA Inc., and TuneIn, Inc., or for any entity engaged in the sale of advertising on media platforms, in any geographic region in which Employee has or had duties or in which Company does business and about which Employee has received Confidential Information (the “Non-Compete Area”).
|
(b)
|
The terms of this Section 7 shall survive the expiration or termination of this Agreement for any reason.
|
8.
|
TERMINATION
|
(a)
|
Death. The date of Employee’s death shall be the termination date.
|
(b)
|
Disability. Company may terminate this Agreement and/or Employee’s employment if Employee is unable to perform the essential functions of Employee’s full-time position for more than 180 days in any 12 month period, subject to applicable law.
|
(c)
|
Termination By Company. Company may terminate employment with or without Cause. “Cause” means:
|
(i)
|
willful misconduct, including, without limitation, violation of sexual or other harassment policy, misappropriation of or material misrepresentation regarding property of Company, other than customary and de minimis use of Company property for personal purposes, as determined in discretion of Company;
|
(ii)
|
non-performance of duties (other than by reason of disability);
|
(iii)
|
failure to follow lawful directives;
|
(iv)
|
a felony conviction, a plea of nolo contendere by Employee, or other conduct by Employee that has or would result in material injury to Company’s reputation, including conviction of fraud, theft, embezzlement, or a crime involving moral turpitude;
|
(v)
|
a material breach of this Agreement; or
|
(vi)
|
a significant violation of Company’s employment and management policies.
|
(d)
|
Non-Renewal. Following notice by either party under Section 1, and subject to the requirements of Section 10, Company shall determine the termination date and may, in its sole discretion, modify Employee’s duties and/or responsibilities at any point after such notice has been provided, through the end of the Employment Period. Modification of Employee’s duties and/or responsibilities pursuant to this subsection shall not trigger Good Cause by Employee under Section 8(e).
|
(e)
|
Termination By Employee For Good Cause. Subject to Section 8(d), Employee may terminate Employee’s employment at any time for “Good Cause,” which is: (i) Company’s repeated failure to comply with a material term of this Agreement after written notice by Employee specifying the alleged failure or (ii) a substantial and unusual increase in responsibilities and authority without an offer of additional reasonable compensation as determined by Company in light of compensation for similarly situated employees. If Employee elects to terminate Employee’s employment for “Good Cause,” Employee must provide Company written notice within thirty (30) days, after which Company shall have thirty (30) days to cure. If Company has not cured and Employee elects to terminate Employee’s employment, Employee must do so within ten (10) days after the end of the cure period.
|
9.
|
COMPENSATION UPON TERMINATION
|
(a)
|
Death. Company shall, within thirty (30) days, pay to Employee’s designee or, if no person is designated, to Employee’s estate, Employee’s accrued and unpaid Base Salary and any unpaid prior year bonus, if any, through the date of termination, and any payments required under applicable employee benefit plans.
|
(b)
|
Disability. Company shall, within thirty (30) days, pay all accrued and unpaid Base Salary and any unpaid prior year bonus, if any, through the termination date and any payments required under applicable employee benefit plans.
|
(c)
|
Termination By Company For Cause: Company shall, within thirty (30) days, pay to Employee Employee’s accrued and unpaid Base Salary through the termination date and any payments required under applicable employee benefit plans.
|
(d)
|
Termination By Company Without Cause/Non-Renewal by Company/Termination by Employee for Good Cause. If Company terminates employment without Cause or Non-Renews, or if Employee terminates employment for Good Cause, Company will pay the accrued and unpaid
|
(e)
|
Non-Renewal By Employee. If Employee gives notice of non-renewal under Section 1, Company shall pay the accrued and unpaid Base Salary through the termination date, and any payments required under applicable employee benefit plans. If the termination date is before the end of the then current Employment Period, and if Employee signs a Severance Agreement and General Release of claims in a form satisfactory to Company, then Company will, in periodic payments in accordance with ordinary payroll practices and deductions, pay Employee an amount equal to Employee’s pro-rata Base Salary through the end of the then current Employment Period (the “Severance Payments” or “Severance Pay Period”).
|
(i)
|
If Employee is in breach of any post-employment obligations or covenants, or if Employee is hired or engaged in any capacity by any Competitor of Company, in Company’s sole discretion, in any location during any Severance Pay Period, Severance Payments shall cease. The foregoing shall not affect Company’s right to enforce the Non-Compete pursuant to Section 7. Employee acknowledges that each individual Severance Payment received is adequate and independent consideration to support Employee’s General Release of claims referenced in Section 9(d), as each is something of value to which Employee would not have otherwise been entitled at termination had Employee not executed a General Release of claims.
|
(ii)
|
If Employee is rehired by Company during any Severance Pay Period, Severance Payments shall cease; however, if Employee’s new Base Salary is less than Employee’s previous Base Salary, Company shall pay Employee the difference between Employee’s previous and new Base Salary for the remainder of the Severance Pay Period.
|
(a)
|
During the Employment Period, neither Employee nor any representative will negotiate or enter into any agreement for Employee’s services, except as provided for below.
|
(b)
|
During the Employment Period and for six (6) months thereafter, Employee shall not enter into the employment of, perform services for, enter into any oral or written agreement for services, give or accept an option for services, or grant or receive future rights to provide services to or for any Competitor in the Non-Compete Area unless such services are to be performed after the end of the Employment Period and the conclusion of any Non-Compete Period, and Employee has first provided
|
(c)
|
If Employee does not accept such other offer, the terms of this Section shall apply in the same manner to any subsequent offer received by or made to Employee prior to the expiration of the six (6) month period referred to in Section 10(b) above. This Section shall not affect Employee’s obligations pursuant to Section 7.
|
11.
|
CONSULTING PERIOD
|
12.
|
PAYOLA, PLUGOLA AND CONFLICTS OF INTEREST
|
13.
|
OWNERSHIP OF MATERIALS
|
(a)
|
Employee agrees that all inventions, improvements, discoveries, designs, technology, and works of authorship (including but not limited to computer software) made, created, conceived, or reduced to practice by Employee, whether alone or in cooperation with others, during employment, together
|
(b)
|
The terms of this Section 13 shall survive the expiration or termination of this Agreement for any reason.
|
14.
|
PARTIES BENEFITED; ASSIGNMENTS
|
15.
|
GOVERNING LAW
|
16.
|
LITIGATION AND REGULATORY COOPERATION
|
17.
|
INDEMNIFICATION
|
18.
|
DISPUTE RESOLUTION
|
(a)
|
Arbitration. This Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and evidences a transaction involving commerce. This Dispute Resolution Provision applies to any dispute arising out of or related to Employee's employment with Company or termination of employment. Nothing contained in this Provision shall be construed to prevent or excuse Employee from using the Company’s existing internal procedures for resolution of complaints, and this Provision is not intended to be a substitute for the use of such procedures. Except as it otherwise provides, this Provision is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law, and therefore this Provision requires all such disputes to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial. Such disputes include without limitation disputes arising out of or relating to interpretation or application of this Agreement, including the enforceability, revocability or validity of the Agreement or any portion of the Agreement. The Provision also applies, without limitation, to disputes regarding the employment relationship, trade secrets, unfair competition, compensation, breaks and rest periods, termination, or harassment and claims arising under the Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans With Disabilities Act, Age Discrimination in Employment Act, Family Medical Leave Act, Fair Labor Standards Act, and state statutes, if any, addressing the same or similar subject matters, and all other state statutory and common law claims.
|
(b)
|
The following claims are excluded from this Provision: workers compensation, state disability insurance, unemployment insurance claims, and claims for benefits under employee benefit plans covered by the Employee Retirement Income Security Act that contain an appeal procedure or other exclusive and/or binding dispute resolution procedure in the respective plan. Disputes that may not be subject to pre-dispute arbitration agreements as provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203) are also excluded from the coverage of this Provision. Nothing in this Provision prevents Employee from making a report to or filing a claim or charge with a government agency, including without limitation the Equal Employment Opportunity Commission, U.S. Department of Labor, U.S. Securities and Exchange Commission, National Labor Relations Board, or Office of Federal Contract Compliance Programs. Nothing in this Provision prevents the investigation by a government agency of any report, claim or charge otherwise covered by this Agreement. This Provision also does not prevent federal administrative agencies from adjudicating claims and awarding remedies based on those claims, even if the claims would otherwise be covered by this Provision. Nothing in this Provision shall be deemed to preclude or excuse a party from bringing an administrative claim before any agency in order to fulfill the party's obligation to exhaust administrative remedies before making a claim in arbitration. The Company will not retaliate against Employee for filing a claim with an administrative agency or for exercising rights (individually or in concert with others) under Section 7 of the National Labor Relations Act.
|
(c)
|
The Arbitrator shall be selected by mutual agreement of the Company and the Employee. Unless the Employee and Company mutually agree otherwise, the Arbitrator shall be an attorney licensed to practice in the location where the arbitration proceeding will be conducted or a retired federal or
|
(d)
|
A demand for arbitration must be in writing and delivered by hand or first class mail to the other party within the applicable statute of limitations period. Any demand for arbitration made to the Company shall be provided to the Company's Legal Department, 20880 Stone Oak Parkway, San Antonio, Texas 78258. The Arbitrator shall resolve all disputes regarding the timeliness or propriety of the demand for arbitration.
|
(e)
|
In arbitration, the parties will have the right to conduct adequate civil discovery, bring dispositive motions, and present witnesses and evidence as needed to present their cases and defenses, and any disputes in this regard shall be resolved by the Arbitrator. The Federal Rules of Civil Procedure shall govern any depositions or discovery efforts, and the arbitrator shall apply the Federal Rules of Civil Procedure when resolving any discovery disputes.
|
(f)
|
Class Action Waiver. In the event of any dispute, controversy or claim arising out of employment with, or otherwise relating to Employee’s relationship with Company, claims may only be brought by Employee or by Company in the Employee’s individual capacity, and not as a plaintiff or class member in any purported class, collective, or other joint proceeding. In that regard, Employee specifically agrees not to file, initiate directly or indirectly, join or participate in any class, collective, or other representative proceeding against Company and its respective directors, officers, agents, representatives and employees. If a class, collective, or other representative proceeding is filed purporting to include Employee, Employee shall promptly take all steps to refrain from opting in or to opt-out and will otherwise exclude him/herself from the proceeding, as applicable. Claims covered by this waiver may not be joined or consolidated with claims of other individuals without the consent of both Company and Employee. Notwithstanding any other clause contained in this Agreement, the preceding Class Action Waiver shall not be severable from this Provision in any case in which the dispute to be arbitrated is brought as a class, collective or representative action. Although an Employee will not be retaliated against, disciplined or threatened with discipline as a result of Employee’s exercising his or her rights under Section 7 of the National Labor Relations Act by the filing of or participation in a class, collective or representative action in any forum, the Company may lawfully seek enforcement of this Provision and the Class Action Waiver under the Federal Arbitration Act and seek dismissal of such class, collective or representative actions or claims. Notwithstanding any other clause contained in this Provision, any claim that all or part of the Class Action Waiver is unenforceable, unconscionable, void or voidable may be determined only by a court of competent jurisdiction and not by an arbitrator.
|
(g)
|
Each party will pay the fees for his, her or its own attorneys, subject to any remedies to which that party may later be entitled under applicable law. However, in all cases where required by law, the
|
(h)
|
Within thirty (30) days of the close of the arbitration hearing, any party will have the right to prepare, serve on the other party and file with the Arbitrator a brief. The Arbitrator may award any party any remedy to which that party is entitled under applicable law, but such remedies shall be limited to those that would be available to a party in a court of law for the claims presented to and decided by the Arbitrator. The Arbitrator will issue a decision or award in writing, stating the essential findings of fact and conclusions of law. Except as may be permitted or required by law, neither a party nor an Arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. A court of competent jurisdiction shall have the authority to enter a judgment upon the award made pursuant to the arbitration.
|
(i)
|
Injunctive Relief. A party may apply to a court of competent jurisdiction for temporary or preliminary injunctive relief in connection with an arbitrable controversy, but only upon the ground that the award to which that party may be entitled may be rendered ineffectual without such provisional relief.
|
(j)
|
This Section 18 is the full and complete agreement relating to the formal resolution of employment-related disputes. In the event any portion of this Section 18 is deemed unenforceable and except as set forth in Section 18(f), the remainder of this Agreement will be enforceable.
|
(k)
|
This Section 18 shall survive the expiration or termination of this Agreement for any reason.
|
19.
|
REPRESENTATIONS AND WARRANTIES OF EMPLOYEE
|
20.
|
SECTION 409A COMPLIANCE
|
21.
|
EARLY RESOLUTION CONFERENCE
|
22.
|
CONFIDENTIALITY
|
(a)
|
Neither Employee, nor any person acting on behalf of Employee, will disclose any terms of this Agreement to any entity engaged in a business in which Company is engaged (including such business that is in the research, development or implementation stages) or to any customer, client, affiliate or vendor of Company, unless required to do so to enforce its terms or to the extent required by law.
|
(b)
|
Employee authorizes the Company to inform any prospective employer of the existence and terms of this Agreement (for purposes of enforcement regarding a potential violation of such terms) without liability for interference with Employee’s prospective employment.
|
(c)
|
This subsection shall not be applied to interfere with Employee’s Section 7 rights under the National Labor Relations Act.
|
23.
|
MISCELLANEOUS
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of iHeartMedia, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Robert W. Pittman
|
Robert W. Pittman
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of iHeartMedia, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Richard J. Bressler
|
Richard J. Bressler
|
President and Chief Financial Officer
|
By:
|
/s/ Robert W. Pittman
|
Name:
|
Robert W. Pittman
|
Title:
|
Chairman and Chief Executive Officer
|
By:
|
/s/ Richard J. Bressler
|
Name:
|
Richard J. Bressler
|
Title:
|
President and Chief Financial Officer
|