iHeartMedia Inc.

08/08/2024 | Press release | Distributed by Public on 08/08/2024 06:13

iHeartMedia, Inc. Reports Results for 2024 Second Quarter

NEW YORK--(BUSINESS WIRE)-- iHeartMedia, Inc. (Nasdaq: IHRT) today reported financial results for the quarter ended June 30, 2024.

Financial Highlights:1

Q2 2024 Consolidated Results

  • Q2 Revenue of $929 million, up 1.0%; above guidance of approximately flat
    • Excluding Q2 Political Revenue, Q2 Revenue flat
  • GAAP Operating loss of $910 million vs. $897 million in Q2 2023, including non-cash impairment charges of $920 million in Q2 2024 and $961 million in Q2 2023
  • Consolidated Adjusted EBITDA of $150 million, within previously disclosed guidance range of $140 million to $160 million, compared to $191 million in Q2 2023
  • Cash provided by operating activities of $27 million
  • Free Cash Flow of $6 million
  • Cash balance and total available liquidity 2 of $365 million and $791 million, respectively, as of June 30, 2024

Q2 2024 Digital Audio Group Results

  • Digital Audio Group Revenue of $286 million up 10%
    • Podcast Revenue of $105 million up 8%
    • Digital Revenue excluding Podcast of $181 million up 10%
  • Segment Adjusted EBITDA of $92 million up 9%
    • Digital Audio Group Adjusted EBITDA margin of 32.2%

Q2 2024 Multiplatform Group Results

  • Multiplatform Group Revenue of $576 million down 3%
    • Excluding Multiplatform Group Q2 Political Revenue, Multiplatform Group Q2 Revenue down 4%
  • Segment Adjusted EBITDA of $104 million down 36%
    • Multiplatform Group Adjusted EBITDA margin of 18.1%

Guidance

  • Q3 Consolidated Revenue expected to increase in the mid-single digits
  • Full Year 2024 Consolidated Revenue expected to increase in the mid-single digits
  • Q3 Consolidated Adjusted EBITDA 3 expected to be $200 million to $220 million
  • Full Year 2024 Consolidated Adjusted EBITDA 3 expected to be $760 million to $800 million
  • Remain committed to long term target of approximately 4x Net Debt to Adjusted EBITDA ("net leverage") 3

Statement from Senior Management

"Our second quarter results mark the first quarter that our consolidated revenues increased year-over-year since Q4 2022. We continue to see strong momentum in our podcast business, our Digital ex. Podcast business, and have seen sequential improvement of our Multiplatform Group's year-over-year revenue performance," said Bob Pittman, Chairman and CEO of iHeartMedia, Inc. "This performance is built on iHeartMedia's strong and unparalleled audience and demonstrates the progress we are making in maximizing the monetization of it."

"We continue to see signs of improvement throughout our business and the broader advertising marketplace, and our second quarter 2024 results were in line with, and in the cases of revenue, slightly above guidance. Our high-growth Digital Audio Group revenues were up 10% year over year, and represented 31% of our company's revenues, and our Multiplatform Group revenues exceeded our previously provided guidance," said Rich Bressler, President, COO and CFO of iHeartMedia, Inc. "Our full year 2024 political revenues are currently pacing approximately 20% higher than the last presidential election cycle, which gives us confidence that this will be a record political year for us, and we expect to see a significant year-over-year improvement in our full year Adjusted EBITDA performance."

Consolidated Results of Operations

Second Quarter 2024 Consolidated Results

Our consolidated revenue increased $9.1 million, or 1.0%, during the three months ended June 30, 2024 compared to the same period of 2023. Digital Audio revenue increased $24.8 million, or 9.5%, driven primarily by continuing increases in demand for digital advertising. Multiplatform revenue decreased $20.0 million, or 3.4%, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenues and political revenues as 2024 is a presidential election year. Audio & Media Services revenue increased $4.3 million, or 6.5%, primarily as a result of higher political revenue.

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

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

Our consolidated GAAP Operating loss was $909.7 million compared to $897.2 million in the second quarter of 2023, primarily due to the increase in direct operating and SG&A expenses as discussed above, partially offset by lower non-cash impairment charges of $920.2 million recognized in the second quarter of 2024 compared to the $960.6 million recognized in the prior year period. The non-cash impairment charges primarily related to goodwill and FCC license impairments in both periods.

Adjusted EBITDA decreased to $150.2 million compared to $191.2 million in the prior-year period.

Cash provided by operating activities was $26.7 million, compared to $56.8 million in the prior-year period primarily due to a decrease in revenue from our Multiplatform Group, partially offset by an improvement in the timing of receivable collections. Free Cash Flow was $5.6 million, compared to $34.0 million in the prior year period.

Business Segments: Results of Operations

Second Quarter 2024 Multiplatform Group Results

(In thousands)

Three Months Ended

June 30,

%

Six Months Ended

June 30,

%

2024

2023

Change

2024

2023

Change

Revenue

$

575,907

$

595,944

(3.4

)%

$

1,069,370

$

1,124,957

(4.9

)%

Operating expenses 1

471,644

433,542

8.8

%

887,925

875,503

1.4

%

Segment Adjusted EBITDA

$

104,263

$

162,402

(35.8

)%

$

181,445

$

249,454

(27.3

)%

Segment Adjusted EBITDA margin

18.1

%

27.3

%

17.0

%

22.2

%

1 Operating expenses consist of Direct operating expenses and SG&A expenses, excluding Restructuring expenses.

Revenue from our Multiplatform Group decreased $20.0 million, or 3.4% YoY, primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, partially offset by an increase in non-cash trade revenue and political revenues. Broadcast revenue declined $3.7 million, or 0.9% YoY, driven by lower spot revenue, partially offset by an increase in non-cash trade revenues and political advertising. Networks declined $15.6 million, or 12.8% YoY due primarily to the impact of non-returning advertisers. Revenue from Sponsorship and Events increased by $0.9 million, or 2.4% YoY.

Operating expenses increased $38.1 million, or 8.8% YoY, driven primarily by higher non-cash trade expense and live event costs due to the timing of the 2024 iHeartRadio Music Awards which was in Q2 in 2024 and Q1 in 2023 and higher broadcast music license fees.

Segment Adjusted EBITDA Margin decreased YoY to 18.1% from 27.3%.

Second Quarter 2024 Digital Audio Group Results

(In thousands)

Three Months Ended

June 30,

%

Six Months Ended

June 30,

%

2024

2023

Change

2024

2023

Change

Revenue

$

285,614

$

260,854

9.5

%

$

524,582

$

484,250

8.3

%

Operating expenses 1

193,744

176,272

9.9

%

364,585

345,549

5.5

%

Segment Adjusted EBITDA

$

91,870

$

84,582

8.6

%

$

159,997

$

138,701

15.4

%

Segment Adjusted EBITDA margin

32.2

%

32.4

%

30.5

%

28.6

%

1 Operating expenses consist of Direct operating expenses and SG&A expenses, excluding Restructuring expenses.

Revenue from our Digital Audio Group increased $24.8 million, or 9.5% YoY, driven by Digital, excluding Podcast revenue, which grew $16.9 million, or 10.3% YoY, to $181.1 million, driven by an increase in demand for digital advertising, and Podcast revenue, which increased $7.8 million, or 8.1% YoY, to $104.5 million, driven primarily by increased demand for podcasting from advertisers and higher non-cash trade revenue.

Operating expenses increased $17.5 million, or 9.9% YoY, primarily driven by higher variable content costs, including higher profit sharing agreements and third-party digital costs related to the increase in revenues.

Segment Adjusted EBITDA Margin decreased YoY to 32.2% from 32.4%.

Second Quarter 2024 Audio & Media Services Group Results

(In thousands)

Three Months Ended

June 30,

%

Six Months Ended

June 30,

%

2024

2023

Change

2024

2023

Change

Revenue

$

70,082

$

65,804

6.5

%

$

139,250

$

127,155

9.5

%

Operating expenses 1

46,233

47,305

(2.3

)%

91,706

93,312

(1.7

)%

Segment Adjusted EBITDA

$

23,849

$

18,499

28.9

%

$

47,544

$

33,843

40.5

%

Segment Adjusted EBITDA margin

34.0

%

28.1

%

34.1

%

26.6

%

1 Operating expenses consist of Direct operating expenses and SG&A expenses, excluding Restructuring expenses.

Revenue from our Audio & Media Services Group increased $4.3 million, or 6.5% YoY, primarily due to higher political revenue as 2024 is a presidential election year.

Operating expenses decreased $1.1 million, or 2.3% YoY, primarily as a result of a favorable shift in the sales mix toward services and a decrease in employee compensation expense.

Segment Adjusted EBITDA Margin increased YoY to 34.0% from 28.1%.

GAAP and Non-GAAP Measures: Consolidated

(In thousands)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Revenue

$

929,092

$

920,014

$

1,728,130

$

1,731,253

Operating loss

(909,667

)

(897,194

)

$

(944,375

)

$

(946,056

)

Adjusted EBITDA 1

150,207

191,181

$

254,824

$

284,605

Net loss

(981,989

)

(882,982

)

$

(1,000,097

)

$

(1,105,345

)

Cash provided by (used for) operating activities 2

26,729

56,772

$

(32,548

)

$

(37,211

)

Free cash flow 1,2

5,557

33,999

$

(75,302

)

$

(99,149

)

______________________________

1

See the end of this press release for reconciliations of (i) Adjusted EBITDA to Operating loss, (ii) Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash provided by (used for) operating activities, (iv) revenue, excluding political advertising revenue, to revenue, and (v) Net Debt to Total Debt. See also the definitions of Adjusted EBITDA, Free Cash Flow, Adjusted EBITDA margin, and Net Debt under the Supplemental Disclosure Regarding Non-GAAP Financial Information section in this release.

2

We made cash interest payments of $88.2 million in the three months ended June 30, 2024, compared to $93.7 million in the three months ended June 30, 2023.

Certain prior period amounts have been reclassified to conform to the 2024 presentation of financial information throughout the press release.

Liquidity and Financial Position

As of June 30, 2024, we had $364.7 million of cash on our balance sheet. For the six months ended June 30, 2024, cash used for operating activities was $32.5 million, cash provided by investing activities was $55.9 million and cash used for financing activities was $4.8 million.

Capital expenditures for the six months ended June 30, 2024 were $42.8 million compared to $61.9 million in the six months ended June 30, 2023. Capital expenditures during the six months ended June 30, 2024 decreased primarily due to lower spending on real estate optimization initiatives.

As of June 30, 2024, the Company had $5,218.8 million of total debt and $4,854.1 million of Net Debt. The terms of our capital structure include no material maintenance covenants, and there are no material debt maturities prior to May 2026.

Cash balance and total available liquidity 4 were $364.7 million and $791 million, respectively, as of June 30, 2024.

Revenue Streams

The tables below present the comparison of our historical revenue streams (including political revenue) for the periods presented:

(In thousands)

Three Months Ended

June 30,

%

Six Months Ended

June 30,

%

2024

2023

Change

2024

2023

Change

Broadcast Radio

$

425,490

$

429,152

(0.9

)%

$

784,828

$

812,390

(3.4

)%

Networks

106,591

122,168

(12.8

)%

208,642

230,122

(9.3

)%

Sponsorship and Events

39,121

38,210

2.4

%

66,950

70,797

(5.4

)%

Other

4,705

6,414

(26.6

)%

8,950

11,648

(23.2

)%

Multiplatform Group 1

575,907

595,944

(3.4

)%

1,069,370

1,124,957

(4.9

)%

Digital ex. Podcast

181,093

164,147

10.3

%

329,437

310,732

6.0

%

Podcast

104,521

96,707

8.1

%

195,145

173,518

12.5

%

Digital Audio Group

285,614

260,854

9.5

%

524,582

484,250

8.3

%

Audio & Media Services Group 1

70,082

65,804

6.5

%

139,250

127,155

9.5

%

Eliminations

(2,511

)

(2,588

)

(5,072

)

(5,109

)

Revenue, total 1

$

929,092

$

920,014

1.0

%

$

1,728,130

$

1,731,253

(0.2

)%

1

Excluding the impact of political revenue, Revenue from the Multiplatform Group and Consolidated Revenue decreased by 4.0% and 0.1% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, respectively. Excluding the impact of political revenue, Revenue from Audio & Media Services increased by 0.1% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. See the end of this press release for a reconciliation of revenue, excluding political advertising revenue, to revenue.

Conference Call
 iHeartMedia, Inc. will host a conference call to discuss results and business outlook on August 8, 2024, at 8:30 a.m. Eastern Time. The conference call number is (888) 596-4144 (U.S. callers) and +1 (646) 968-2525 (International callers) and the passcode for both is 8885116. A live audio webcast of the conference call will also be available on the Investors homepage of iHeartMedia's website investors.iheartmedia.com . After the live conference call, a replay will be available for a period of thirty days. The replay numbers are (800) 770-2030 (U.S. callers) and +1 (609) 800-9909 (International callers) and the passcode for both is 8885116. An archive of the webcast will be available beginning 24 hours after the call for a period of thirty days.

About iHeartMedia, Inc.

iHeartMedia (Nasdaq: IHRT) is the number one audio company in the United States, reaching nine out of 10 Americans every month. It consists of three business groups.

With its quarter of a billion monthly listeners, the iHeartMedia Multiplatform Group has a greater reach than any other media company in the U.S. Its leadership position in audio extends across multiple platforms, including more than 860 live broadcast stations in over 160 markets nationwide; its National Sales organization; and the Company's live and virtual events business. It also includes Premiere Networks, the industry's largest Networks business, with its Total Traffic and Weather Network (TTWN); and BIN: Black Information Network, the first and only 24/7 national and local all news audio service for the Black community. iHeartMedia also leads the audio industry in analytics, targeting and attribution for its marketing partners with its SmartAudio suite of data targeting and attribution products using data from its massive consumer base.

The iHeartMedia Digital Audio Group includes the Company's fast-growing podcasting business -- iHeartMedia is the number one podcast publisher in downloads, unique listeners, revenue and earnings -- as well as its industry-leading iHeartRadio digital service, available across more than 500+ platforms and thousands of devices; the Company's digital sites, newsletters, digital services and programs; its digital advertising technology companies; and its audio industry-leading social media footprint.

The Company's Audio & Media Services reportable segment includes Katz Media Group, the nation's largest media representation company, and RCS, the world's leading provider of broadcast and webcast software.

Certain statements herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which may cause the actual results, performance or achievements of iHeartMedia, Inc. and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words or phrases "guidance," "believe," "expect," "anticipate," "estimates," "forecast" and similar words or expressions are intended to identify such forward-looking statements. In addition, any statements that refer to expectations or other characterizations of future events or circumstances, such as statements about positioning in uncertain economic environment and future economic recovery, driving shareholder value, our anticipated growth and year-over-year financial performance, our anticipated political advertising revenues for 2024; our expected costs savings and other capital and operating expense reduction initiatives, utilizing new technologies and programmatic platforms, developing new consumer and revenue opportunities; improving operational efficiency, future advertising demand, trends in the advertising industry, including on other media platforms; strategies and initiatives, and our anticipated financial performance, including our outlook as to third quarter and full year 2024 consolidated and operating segment results, anticipated capital expenditures and other impacts on our free cash flow, including our outlook as to third quarter and full year 2024 consolidated and operating segment results, anticipated capital expenditures and other impacts on our free cash flow, liquidity, and net leverage are forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other important factors, some of which are beyond our control and are difficult to predict. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to: risks related to weak or uncertain global economic conditions and our dependence on advertising revenues; competition, including increased competition from alternative media platforms and technologies; dependence upon our brand and the performance of on-air talent, program hosts and management; fluctuations in operating costs; technological and industry changes and innovations; shifts in population and other demographics; risks related to our use of artificial intelligence, impact of acquisitions, dispositions and other strategic transactions; risks related to our indebtedness; legislative or regulatory requirements; impact of legislation, ongoing litigation or royalty audits on music licensing and royalties; regulations and concerns regarding privacy and data protection and breaches of information security measures; risks related to scrutiny of environmental, social and governance matters, risks related to our Class A common stock; and regulations impacting our business and the ownership of our securities. Other unknown or unpredictable factors also could have material adverse effects on the Company's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date hereof. Additional risks that could cause future results to differ from those expressed by any forward-looking statement are described in the Company's reports filed with the U.S. Securities and Exchange Commission, including in the section entitled "Part I, Item 1A. Risk Factors" of iHeartMedia, Inc.'s Annual Reports on Form 10-K and "Part II, Item 1A. Risk Factors" of iHeartMedia, Inc.'s Quarterly Reports on Form 10-Q. The Company does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

APPENDIX

TABLE 1 - Comparison of operating performance

(In thousands)

Three Months Ended

June 30,

%

Six Months Ended

June 30,

%

2024

2023

Change

2024

2023

Change

Revenue

$

929,092

$

920,014

1.0

%

$

1,728,130

$

1,731,253

(0.2

)%

Operating expenses:

Direct operating expenses (excludes depreciation and amortization)

382,049

355,061

7.6

%

723,409

699,681

3.4

%

Selling, general and administrative expenses (excludes depreciation and amortization)

431,614

393,773

9.6

%

816,758

796,574

2.5

%

Depreciation and amortization

104,356

108,065

209,518

216,577

Impairment charges

920,224

960,570

921,732

964,517

Other operating (income) expense, net

516

(261

)

1,088

(40

)

Operating loss

$

(909,667

)

$

(897,194

)

$

(944,375

)

$

(946,056

)

Depreciation and amortization

104,356

108,065

209,518

216,577

Impairment charges

920,224

960,570

921,732

964,517

Other operating (income) expense, net

516

(261

)

1,088

(40

)

Restructuring expenses

27,558

10,789

51,161

30,243

Share-based compensation expense

7,220

9,212

15,700

19,364

Adjusted EBITDA 1

$

150,207

$

191,181

(21.4

)%

$

254,824

$

284,605

(10.5

)%

1 See the end of this press release for reconciliations of (i) Adjusted EBITDA to Operating loss, (ii) Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash provided by (used for) operating activities, (iv) revenue, excluding political advertising revenue, to revenue, and (v) Net Debt to Total Debt. See also the definitions of Adjusted EBITDA, Free Cash Flow, Adjusted EBITDA margin and Net Debt under the Supplemental Disclosure section in this release.

TABLE 2 - Statements of Operations

(In thousands)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Revenue

$

929,092

$

920,014

$

1,728,130

$

1,731,253

Operating expenses:

Direct operating expenses (excludes depreciation and amortization)

382,049

355,061

723,409

699,681

Selling, general and administrative expenses (excludes depreciation and amortization)

431,614

393,773

816,758

796,574

Depreciation and amortization

104,356

108,065

209,518

216,577

Impairment charges

920,224

960,570

921,732

964,517

Other operating (income) expense, net

516

(261

)

1,088

(40

)

Operating loss

(909,667

)

(897,194

)

(944,375

)

(946,056

)

Interest expense, net

95,577

98,693

191,092

194,150

Gain (loss) on investments, net

(412

)

(6,038

)

91,582

(12,543

)

Equity in loss of nonconsolidated affiliates

(61

)

(44

)

(106

)

(4

)

Gain on extinguishment of debt

-

22,902

-

27,527

Other expense, net

(231

)

(272

)

(727

)

(371

)

Loss before income taxes

(1,005,948

)

(979,339

)

(1,044,718

)

(1,125,597

)

Income tax benefit

23,959

96,357

44,621

20,252

Net loss

(981,989

)

(882,982

)

(1,000,097

)

(1,105,345

)

Less amount attributable to noncontrolling interest

(331

)

1,488

69

1,385

Net loss attributable to the Company

$

(981,658

)

$

(884,470

)

$

(1,000,166

)

$

(1,106,730

)

TABLE 3 - Selected Balance Sheet Information

Selected balance sheet information for June 30, 2024 and December 31, 2023:

(In millions)

June 30, 2024

December 31, 2023

Cash

$

364.7

$

346.4

Total Current Assets

1,422.3

1,506.9

Net Property, Plant and Equipment

511.3

558.9

Total Assets

5,769.2

6,952.6

Current Liabilities (excluding current portion of long-term debt)

738.4

848.1

Long-term Debt (including current portion of long-term debt)

5,218.8

5,215.2

Stockholders' Deficit

(1,374.6

)

(384.8

)

Supplemental Disclosure Regarding Non-GAAP Financial Information

The following tables set forth the Company's Adjusted EBITDA, Adjusted EBITDA margin, revenues excluding political advertising revenue, and Free Cash Flow for the three and six months ended June 30, 2024 and 2023, and Net Debt as of June 30, 2024. Adjusted EBITDA is defined as consolidated Operating loss adjusted to exclude restructuring expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations: Depreciation and amortization, Impairment charges, and Other operating (income) expense, net. Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Income tax benefit, Interest expense, net, Depreciation and amortization, (Gain) loss on investments, net, Gain on extinguishment of debt, Other expense, net, Equity in loss of nonconsolidated affiliates, Impairment charges, Other operating (income) expense, net, Share-based compensation expense, and restructuring expenses. Restructuring expenses primarily include expenses incurred in connection with cost-saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue.

The Company uses Adjusted EBITDA and Adjusted EBITDA margin, among other measures, to evaluate the Company's operating performance. Adjusted EBITDA 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 the Company's operational strength and performance of its 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.

The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company's management. The Company believes it helps improve investors' ability to understand the Company's operating performance and makes it easier to compare the Company's results with other companies that have different capital structures or tax rates. In addition, the Company believes this measure is also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry.

Since Adjusted EBITDA is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, Operating loss 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 the Company's ability to fund its cash needs. As it excludes certain financial information compared with Operating loss, the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions which are excluded.

We define Free Cash Flow as Cash provided by (used for) operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows. We use Free Cash Flow, among other measures, to evaluate the Company's liquidity and its ability to generate cash flow. We believe that Free Cash Flow is meaningful to investors because it provides them with a view of the Company's liquidity after deducting capital expenditures, which are considered to be a necessary component of ongoing operations. In addition, we believe that Free Cash Flow helps improve investors' ability to compare our liquidity with that of other companies.

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

The Company presents revenue, excluding the effects of political revenue. Due to the cyclical nature of the electoral system and the seasonality of the related political revenue, management believes presenting revenue, excluding the effects of political revenue, provides additional information to investors about the Company's revenue growth from period to period.

We define Net Debt as Total Debt less Cash and cash equivalents. We define net leverage as Net Debt divided by Adjusted EBITDA. The Company uses net leverage and Net Debt to evaluate the Company's liquidity. We believe these measures are an important indicator of the Company's ability to service its long-term debt obligations.

Since these non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, the most directly comparable GAAP financial measures as an indicator of operating performance or liquidity.

As required by the SEC rules, the Company provides reconciliations below to the most directly comparable measures reported under GAAP, including (i) Adjusted EBITDA to Operating loss, (ii) Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash provided by (used for) operating activities, (iv) revenue, excluding political advertising revenue, to revenue, and (v) Net Debt to Total Debt.

We have provided forecasted Consolidated Revenue and Adjusted EBITDA guidance for the quarter ending September 30, 2024 and the full year 2024 and long-term net leverage guidance, which reflects targets for Adjusted EBITDA and net debt. Our Earnings Call on August 8, 2024 may present additional guidance that includes Adjusted EBITDA. A full reconciliation of the forecasted Adjusted EBITDA, net debt and net leverage on a non-GAAP basis to the respective most-directly comparable GAAP metrics cannot be provided without unreasonable efforts due to the inherent difficulty in forecasting and quantifying with reasonable accuracy significant items required for the reconciliations, including gains or losses on investments, extinguishment of debt, equity in nonconsolidated affiliates, impairment charges, stock based compensation, and restructuring as well as the Company's cash and cash equivalent balance.

Reconciliation of Operating loss to Adjusted EBITDA

(In thousands)

Three Months Ended

June 30,

Six Months Ended

June 30,

Three Months Ended March 31,

2024

2023

2024

2023

2024

Operating loss

$

(909,667

)

$

(897,194

)

$

(944,375

)

$

(946,056

)

$

(34,708

)

Depreciation and amortization

104,356

108,065

209,518

216,577

105,162

Impairment charges

920,224

960,570

921,732

964,517

1,508

Other operating (income) expense, net

516

(261

)

1,088

(40

)

572

Restructuring expenses

27,558

10,789

51,161

30,243

23,603

Share-based compensation expense

7,220

9,212

15,700

19,364

8,480

Adjusted EBITDA

$

150,207

$

191,181

$

254,824

$

284,605

$

104,617

Reconciliation of Net lossto EBITDA and Adjusted EBITDA

(In thousands)

Three Months Ended

June 30,

Six Months Ended

June 30,

Three Months Ended March 31,

2024

2023

2024

2023

2024

Net loss

$

(981,989

)

$

(882,982

)

$

(1,000,097

)

$

(1,105,345

)

$

(18,108

)

Income tax benefit

(23,959

)

(96,357

)

(44,621

)

(20,252

)

(20,662

)

Interest expense, net

95,577

98,693

191,092

194,150

95,515

Depreciation and amortization

104,356

108,065

209,518

216,577

105,162

EBITDA

$

(806,015

)

$

(772,581

)

$

(644,108

)

$

(714,870

)

$

161,907

(Gain) loss on investments, net

412

6,038

(91,582

)

12,543

(91,994

)

Gain on extinguishment of debt

-

(22,902

)

-

(27,527

)

-

Other expense, net

231

272

727

371

496

Equity in loss of nonconsolidated affiliates

61

44

106

4

45

Impairment charges

920,224

960,570

921,732

964,517

1,508

Other operating (income) expense, net

516

(261

)

1,088

(40

)

572

Restructuring expenses

27,558

10,789

51,161

30,243

23,603

Share-based compensation expense

7,220

9,212

15,700

19,364

8,480

Adjusted EBITDA

$

150,207

$

191,181

$

254,824

$

284,605

$

104,617

Reconciliation of Cash provided by (used for) operating activities to Free Cash Flow

(In thousands)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

2023

Cash provided by (used for) operating activities

$

26,729

$

56,772

$

(32,548

)

$

(37,211

)

Purchases of property, plant and equipment

(21,172

)

(22,773

)

(42,754

)

(61,938

)

Free cash flow

$

5,557

$

33,999

$

(75,302

)

$

(99,149

)

Reconciliation of Revenue to Revenue excluding Political Advertising

(In thousands)

Three Months Ended

June 30,

%

Change

Six Months Ended

June 30,

%

Change

2024

2023

2024

2023

Consolidated revenue

$

929,092

$

920,014

1.0

%

$

1,728,130

$

1,731,253

(0.2

)%

Excluding: Political revenue

(14,907

)

(6,665

)

(26,534

)

(10,268

)

Consolidated revenue, excluding political

$

914,185

$

913,349

0.1

%

$

1,701,596

$

1,720,985

(1.1

)%

Multiplatform Group revenue

$

575,907

$

595,944

(3.4

)%

$

1,069,370

$

1,124,957

(4.9

)%

Excluding: Political revenue

(8,025

)

(4,344

)

(15,688

)

(7,829

)

Multiplatform Group revenue, excluding political

$

567,882

$

591,600

(4.0

)%

$

1,053,682

$

1,117,128

(5.7

)%

Digital Audio Group revenue

$

285,614

$

260,854

9.5

%

$

524,582

$

484,250

8.3

%

Excluding: Political revenue

(1,210

)

(846

)

(1,481

)

(1,346

)

Digital Audio Group revenue, excluding political

$

284,404

$

260,008

9.4

%

$

523,101

$

482,904

8.3

%

Audio & Media Group Services revenue

$

70,082

$

65,804

6.5

%

$

139,250

$

127,155

9.5

%

Excluding: Political revenue

(5,672

)

(1,475

)

(9,365

)

(1,093

)

Audio & Media Services Group revenue, excluding political

$

64,410

$

64,329

0.1

%

$

129,885

$

126,062

3.0

%

Reconciliation of Total Debt to Net Debt

(In thousands)

June 30,
2024

Current portion of long-term debt

$

621

Long-term debt

5,218,194

Total debt

$

5,218,815

Less: Cash and cash equivalents

364,744

Net debt

$

4,854,071

Segment Results

The following tables present the Company's segment results for the Company for the periods presented:

Segments

(In thousands)

Multiplatform Group

Digital Audio Group

Audio & Media Services Group

Corporate and other reconciling items

Eliminations

Consolidated

Three Months Ended June 30, 2024

Revenue

$

575,907

$

285,614

$

70,082

$

-

$

(2,511

)

$

929,092

Operating expenses (1)

471,644

193,744

46,233

69,775

(2,511

)

778,885

Adjusted EBITDA

$

104,263

$

91,870

$

23,849

$

(69,775

)

$

-

$

150,207

Adjusted EBITDA margin

18.1

%

32.2

%

34.0

%

16.2

%

Depreciation and amortization

(104,356

)

Impairment charges

(920,224

)

Other operating expense, net

(516

)

Restructuring expenses

(27,558

)

Share-based compensation expense

(7,220

)

Operating loss

$

(909,667

)

Operating margin

(97.9

)%

Segments

(In thousands)

Multiplatform Group

Digital Audio Group

Audio & Media Services Group

Corporate and other reconciling items

Eliminations

Consolidated

Three Months Ended June 30, 2023

Revenue

$

595,944

$

260,854

$

65,804

$

-

$

(2,588

)

$

920,014

Operating expenses (1)

433,542

176,272

47,305

74,302

(2,588

)

728,833

Adjusted EBITDA

$

162,402

$

84,582

$

18,499

$

(74,302

)

$

-

$

191,181

Adjusted EBITDA margin

27.3

%

32.4

%

28.1

%

20.8

%

Depreciation and amortization

(108,065

)

Impairment charges

(960,570

)

Other operating income, net

261

Restructuring expenses

(10,789

)

Share-based compensation expense

(9,212

)

Operating loss

$

(897,194

)

Operating margin

(97.5

)%

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

Segments

(In thousands)

Multiplatform Group

Digital Audio Group

Audio & Media Services Group

Corporate and other reconciling items

Eliminations

Consolidated

Six Months Ended June 30, 2024

Revenue

$

1,069,370

524,582

$

139,250

$

-

$

(5,072

)

$

1,728,130

Operating expenses (1)

887,925

364,585

91,706

134,162

(5,072

)

1,473,306

Adjusted EBITDA

$

181,445

$

159,997

$

47,544

$

(134,162

)

$

-

$

254,824

Adjusted EBITDA margin

17.0

%

30.5

%

34.1

%

14.7

%

Depreciation and amortization

(209,518

)

Impairment charges

(921,732

)

Other operating expense, net

(1,088

)

Restructuring expenses

(51,161

)

Share-based compensation expense

(15,700

)

Operating loss

$

(944,375

)

Operating margin

(54.6

)%

Segments

(In thousands)

Multiplatform Group

Digital Audio Group

Audio & Media Services Group

Corporate and other reconciling items

Eliminations

Consolidated

Six Months Ended June 30, 2023

Revenue

$

1,124,957

$

484,250

$

127,155

$

-

$

(5,109

)

$

1,731,253

Operating expenses (1)

875,503

345,549

93,312

137,393

(5,109

)

1,446,648

Adjusted EBITDA

$

249,454

$

138,701

$

33,843

$

(137,393

)

$

-

$

284,605

Adjusted EBITDA margin

22.2

%

28.6

%

26.6

%

16.4

%

Depreciation and amortization

(216,577

)

Impairment charges

(964,517

)

Other operating income, net

40

Restructuring expenses

(30,243

)

Share-based compensation expense

(19,364

)

Operating loss

$

(946,056

)

Operating margin

(54.6

)%

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

______________________________

1 Unless otherwise noted, all results are based on year over year comparisons.

2 Total available liquidity is defined as cash and cash equivalents plus available borrowings under our ABL Facility. We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.

3 A full reconciliation of forecasted Adjusted EBITDA, net debt and net leverage on a non-GAAP basis to the respective most-directly comparable GAAP metrics cannot be provided without unreasonable efforts due to the inherent difficulty in forecasting and quantifying with reasonable accuracy significant items required for the reconciliations, including gains or losses on investments, extinguishment of debt, equity in nonconsolidated affiliates, impairment charges, stock based compensation, and restructuring as well as the Company's cash and cash equivalents balance.

4 Total available liquidity is defined as cash and cash equivalents plus available borrowings under our ABL Facility. We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.

Media
Wendy Goldberg
Chief Communications Officer
(212) 377-1105
[email protected]

Investors
Mike McGuinness
EVP, Deputy CFO, and Head of Investor Relations
(212) 377-1336
[email protected]

Source: iHeartMedia, Inc.