UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017
[   ]☒
TRANSITIONQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________
Commission File Number
000-53354001-38987
IHEARTMEDIA, INC.
(Exact name of registrant as specified in its charter)
Delaware26-0241222
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer Identification No.)
20880 Stone Oak Parkway
San Antonio, Texas
78258
San Antonio,Texas78258
(Address of principal executive offices)(Zip Code)
(210) 822-2828
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)Title of the Securities Exchange Acteach classTrading Symbol(s)Name of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X] No [   ]each exchange on which registered
Class A Common StockIHRTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [X] No [  ]Series A Preferred Stock Purchase RightsIHRTThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [   ]   Accelerated filer [   ]   Non-accelerated filer [X]  Smaller reporting company [   ] Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at November 6, 2017August 3, 2020
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Class A Common Stock, $.001 par value32,079,84162,229,135 
(1)
Class B Common Stock, $.001 par value555,5566,900,475 
Class C Common Stock, $.001 par value58,967,502
Class D Common Stock, $.001 par value—
(1)    Outstanding Class A common stock includes 111,291 shares owned by a subsidiary

IHEARTMEDIA, INC.
INDEX
Page No.


IHEARTMEDIA, INC.
INDEX
Page No.
Part I – Financial Information
Item 1.
1
1
2

4
38
49
Item 2.
1833
Item 3.
3853
Item 4.
3853
Part II – Other Information
Item 1.
3954
Item 1A.
3954
Item 2.
4156
Item 3.
4156
Item 4.
4256
Item 5.
4256
Item 6.
4256
4359




PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IHEARTMEDIA, INC.AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)Successor Company
June 30,
2020		December 31,
2019
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents$517,684  $400,300  
Accounts receivable, net of allowance of $26,201 in 2020 and $12,629 in 2019570,117  902,908  
Prepaid expenses86,003  71,764  
Other current assets35,745  41,376  
Total Current Assets1,209,549  1,416,348  
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net819,259  846,876  
INTANGIBLE ASSETS AND GOODWILL
Indefinite-lived intangibles - licenses1,775,723  2,277,735  
Other intangibles, net2,047,954  2,176,540  
Goodwill2,101,657  3,325,622  
OTHER ASSETS
Operating lease right-of-use assets840,797  881,762  
Other assets110,920  96,216  
Total Assets$8,905,859  $11,021,099  
CURRENT LIABILITIES  
Accounts payable$114,400  $117,282  
Current operating lease liabilities82,430  77,756  
Accrued expenses138,817  240,151  
Accrued interest71,324  83,768  
Deferred revenue156,047  139,529  
Current portion of long-term debt30,061  8,912  
Total Current Liabilities593,079  667,398  
Long-term debt5,807,061  5,756,504  
Series A Mandatorily Redeemable Preferred Stock, par value $0.001, authorized 60,000 shares, 60,000 shares issued in 2020 and 201960,000  60,000  
Noncurrent operating lease liabilities771,013  796,203  
Deferred income taxes539,294  737,443  
Other long-term liabilities69,770  58,110  
Commitments and contingent liabilities (Note 7)
STOCKHOLDERS’ EQUITY
Noncontrolling interest9,123  9,123  
Preferred stock, par value $.001 per share, 100,000,000 shares authorized, 0 shares issued and outstanding—  —  
Class A Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, issued 61,432,341 and 57,776,204 shares in 2020 and 2019, respectively61  58  
Class B Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, issued 6,900,195 and 6,904,910 shares in 2020 and 2019, respectively7  7  
Special Warrants, 78,038,412 and 81,046,593 issued and outstanding in 2020 and 2019, respectively—  —  
Additional paid-in capital2,835,005  2,826,533  
Retained earnings (Accumulated deficit)(1,774,974) 112,548  
Accumulated other comprehensive loss(562) (750) 
Cost of shares (232,623 in 2020 and 128,074 in 2019) held in treasury(3,018) (2,078) 
Total Stockholders' Equity1,065,642  2,945,441  
Total Liabilities and Stockholders' Equity$8,905,859  $11,021,099  
(In thousands, except share data)September 30,
2017		 December 31,
2016
 (Unaudited)  
CURRENT ASSETS   
Cash and cash equivalents$286,370
 $845,030
Accounts receivable, net of allowance of $40,510 in 2017 and $33,882 in 20161,433,019
 1,364,404
Prepaid expenses230,209
 184,586
Assets held for sale—
 55,602
Other current assets77,876
 55,065
Total Current Assets2,027,474
 2,504,687
PROPERTY, PLANT AND EQUIPMENT   
Structures, net1,152,066
 1,196,676
Other property, plant and equipment, net735,997
 751,486
INTANGIBLE ASSETS AND GOODWILL   
Indefinite-lived intangibles - licenses2,408,184
 2,413,899
Indefinite-lived intangibles - permits977,152
 960,966
Other intangibles, net596,287
 740,508
Goodwill4,083,589
 4,066,575
OTHER ASSETS   
Other assets276,511
 227,450
Total Assets$12,257,260
 $12,862,247
CURRENT LIABILITIES 
  
Accounts payable$157,217
 $142,600
Accrued expenses718,458
 724,793
Accrued interest149,533
 264,170
Deferred income215,410
 200,103
Current portion of long-term debt619,003
 342,908
Total Current Liabilities1,859,621
 1,674,574
Long-term debt19,995,897
 20,022,080
Deferred income taxes1,460,882
 1,457,095
Other long-term liabilities618,575
 593,973
Commitments and contingent liabilities (Note 4)

 

STOCKHOLDERS’ DEFICIT   
Noncontrolling interest114,133
 135,778
Class A Common Stock, par value $.001 per share, authorized 400,000,000 shares, issued 32,680,481 and 31,502,448 shares in 2017 and 2016, respectively32
 31
Class B Common Stock, par value $.001 per share, authorized 150,000,000 shares, issued 555,556 shares in 2017 and 20161
 1
Class C Common Stock, par value $.001 per share, authorized 100,000,000 shares, issued 58,967,502 shares in 2017 and 201659
 59
Class D Common Stock, par value $.001 per share, authorized 200,000,000 shares, no shares issued in 2017 and 2016—
 —
Additional paid-in capital2,072,091
 2,070,603
Accumulated deficit(13,544,381) (12,733,952)
Accumulated other comprehensive loss(317,208) (355,876)
Cost of shares (581,707 in 2017 and 389,920 in 2016) held in treasury(2,442) (2,119)
Total Stockholders' Deficit(11,677,715) (10,885,475)
Total Liabilities and Stockholders' Deficit$12,257,260
 $12,862,247

See Notes to Consolidated Financial Statements

1


IHEARTMEDIA, INC.AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSINCOME (LOSS)
(UNAUDITED)
(In thousands, except per share data)Successor CompanyPredecessor Company
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,
202020192019
Revenue$487,648  $635,646  $277,674  
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)249,866  198,772  98,310  
Selling, general and administrative expenses (excludes depreciation and amortization)261,219  220,231  102,296  
Corporate expenses (excludes depreciation and amortization)26,419  26,818  14,506  
Depreciation and amortization103,347  59,383  14,544  
Impairment charges5,378  —  —  
Other operating income (expense), net(506) 3,246  (127) 
Operating income (loss)(159,087) 133,688  47,891  
Interest expense (income), net81,963  69,711  (400) 
Gain on investments, net1,280  —  —  
Equity in loss of nonconsolidated affiliates(31) (24) (59) 
Other income (expense), net(1,258) (9,157) 150  
Reorganization items, net—  —  9,497,944  
Income (loss) from continuing operations before income taxes(241,059) 54,796  9,546,326  
Income tax benefit (expense)43,742  (16,003) (100,289) 
Income (loss) from continuing operations(197,317) 38,793  9,446,037  
Income from discontinued operations, net of tax—  —  1,854,677  
Net income (loss)(197,317) 38,793  11,300,714  
Less amount attributable to noncontrolling interest—  —  2,190  
Net income (loss) attributable to the Company$(197,317) $38,793  $11,298,524  
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments292  (328) (3,493) 
Other comprehensive income (loss), net of tax292  (328) (3,493) 
Comprehensive income (loss)(197,025) 38,465  11,295,031  
Less amount attributable to noncontrolling interest—  —  (788) 
Comprehensive income (loss) attributable to the Company$(197,025) $38,465  $11,295,819  
Net income (loss) attributable to the Company per common share:
Basic net income (loss) per share
From continuing operations$(1.35) $0.27  $110.28  
From discontinued operations—  —  21.63  
Basic net income (loss) per share$(1.35) $0.27  $131.91  
Weighted average common shares outstanding - Basic145,963  145,275  85,652  
Diluted net income (loss) per share
From continuing operations$(1.35) $0.27  $110.28  
From discontinued operations—  —  21.63  
Diluted net income (loss) per share$(1.35) $0.27  $131.91  
Weighted average common shares outstanding - Diluted145,963  145,298  85,652  
(In thousands, except per share data)Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenue$1,537,416
 $1,566,582
 $4,457,106
 $4,542,852
Operating expenses:       
Direct operating expenses (excludes depreciation and amortization)621,895
 591,740
 1,807,534
 1,771,590
Selling, general and administrative expenses (excludes depreciation and amortization)438,654
 421,700
 1,336,563
 1,281,849
Corporate expenses (excludes depreciation and amortization)77,967
 86,832
 233,487
 252,348
Depreciation and amortization149,749
 158,453
 443,650
 476,053
Impairment charges7,631
 8,000
 7,631
 8,000
Other operating income (expense), net(13,215) (505) 24,785
 219,768
Operating income228,305
 299,352
 653,026
 972,780
Interest expense470,250
 459,852
 1,388,747
 1,389,793
Loss on investments, net(2,173) (13,767) (2,433) (13,767)
Equity in earnings (loss) of nonconsolidated affiliates(2,238) 1,117
 (2,240) (926)
Gain on extinguishment of debt—
 157,556
 —
 157,556
Other income (expense), net2,223
 (7,323) (11,244) (47,054)
Loss before income taxes(244,133) (22,917) (751,638) (321,204)
Income tax expense(2,051) (5,613) (50,143) (42,243)
Consolidated net loss(246,184) (28,530) (801,781) (363,447)
Less amount attributable to noncontrolling interest1,993
 6,471
 8,648
 38,950
Net loss attributable to the Company$(248,177) $(35,001) $(810,429) $(402,397)
Other comprehensive income (loss), net of tax:       
Foreign currency translation adjustments13,010
 7,356
 44,665
 43,797
Unrealized holding loss on marketable securities(320) (290) (218) (635)
Reclassification adjustments6,207
 —
 4,563
 32,823
Other adjustments to comprehensive income (loss)—
 193
 —
 (3,551)
Other comprehensive income18,897
 7,259
 49,010
 72,434
Comprehensive loss(229,280) (27,742) (761,419) (329,963)
Less amount attributable to noncontrolling interest4,289
 1,235
 10,342
 6,365
Comprehensive loss attributable to the Company$(233,569) $(28,977) $(771,761) $(336,328)
Net loss attributable to the Company per common share:       
Basic$(2.92) $(0.41) $(9.55) $(4.76)
Weighted average common shares outstanding - Basic85,072
 84,650
 84,900
 84,510
Diluted$(2.92) $(0.41) $(9.55) $(4.76)
Weighted average common shares outstanding - Diluted85,072
 84,650
 84,900
 84,510

See Notes to Consolidated Financial Statements

2


IHEARTMEDIA, INC.AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(In thousands, except per share data)Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
202020192019
Revenue$1,268,282  $635,646  $1,073,471  
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)551,498  198,772  381,184  
Selling, general and administrative expenses (excludes depreciation and amortization)605,360  220,231  427,230  
Corporate expenses (excludes depreciation and amortization)66,368  26,818  53,647  
Depreciation and amortization200,115  59,383  52,834  
Impairment charges1,733,235  —  91,382  
Other operating income (expense), net(1,572) 3,246  (154) 
Operating income (loss)(1,889,866) 133,688  67,040  
Interest expense (income), net172,052  69,711  (499) 
Loss on investments, net(8,675) —  (10,237) 
Equity in loss of nonconsolidated affiliates(595) (24) (66) 
Other income (expense), net(9,118) (9,157) 23  
Reorganization items, net—  —  9,461,826  
Income (loss) from continuing operations before income taxes(2,080,306) 54,796  9,519,085  
Income tax benefit (expense)194,253  (16,003) (39,095) 
Income (loss) from continuing operations(1,886,053) 38,793  9,479,990  
Income from discontinued operations, net of tax—  —  1,685,123  
Net income (loss)(1,886,053) 38,793  11,165,113  
Less amount attributable to noncontrolling interest—  —  (19,028) 
Net income (loss) attributable to the Company$(1,886,053) $38,793  $11,184,141  
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments188  (328) (1,175) 
Other comprehensive income (loss), net of tax188  (328) (1,175) 
Comprehensive income (loss)(1,885,865) 38,465  11,182,966  
Less amount attributable to noncontrolling interest—  —  2,784  
Comprehensive income (loss) attributable to the Company$(1,885,865) $38,465  $11,180,182  
Net income (loss) attributable to the Company per common share:
Basic net income (loss) per share
From continuing operations$(12.94) $0.27  $109.92  
From discontinued operations—  —  19.76  
Basic net income (loss) per share$(12.94) $0.27  $129.68  
Weighted average common shares outstanding - Basic145,788  145,275  86,241  
Diluted net income (loss) per share
From continuing operations$(12.94) $0.27  $109.92  
From discontinued operations—  —  19.76  
Diluted net income (loss) per share$(12.94) $0.27  $129.68  
Weighted average common shares outstanding - Diluted145,788  145,298  86,241  

See Notes to Consolidated Financial Statements
3

IHEARTMEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(In thousands, except share data)Controlling Interest
Common Shares(1)
Non-
controlling
Interest		Common
Stock		Additional
Paid-in
Capital		Accumulated DeficitAccumulated
Other
Comprehensive
Loss		Treasury
Stock
Class A
Shares		Class B
Shares		Special WarrantsTotal
Balances at
March 31, 2020 (Successor)
59,930,396  6,899,611  78,919,386  $9,123  $67  $2,830,788  $(1,577,657) $(854) $(2,165) $1,259,302  
Net loss—  —  —  (197,317) —  —  (197,317) 
Vesting of restricted stock and other624,537  —  1  (23) —  —  (853) (875) 
Share-based compensation—  —  4,240  —  —  —  4,240  
Conversion of Special Warrants to Class A and Class B Shares877,263  729  (877,992) —  —  —  —  —  —  —  
Conversion of Class B Shares to Class A Shares145  (145) —  —  —  —  —  —  —  
Cancellation of Special Warrants(2,982) —  —  —  —  —  —  —  
Other comprehensive income—  —  —  —  292  —  292  
Balances at
June 30, 2020 (Successor)
61,432,341  6,900,195  78,038,412  $9,123  $68  $2,835,005  $(1,774,974) $(562) $(3,018) $1,065,642  

(1) The Successor Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2020.
See Notes to Consolidated Financial Statements




















4

IHEARTMEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
(In thousands, except share data)Controlling Interest
Common Shares(1)
Non-
controlling
Interest		Common
Stock		Additional
Paid-in
Capital		Retained Earnings (Accumulated Deficit)Accumulated
Other
Comprehensive
Loss		Treasury
Stock
Class A SharesClass B
Shares		Class C SharesSpecial WarrantsTotal
Balances at
March 31, 2019 (Predecessor)
32,247,361  555,556  58,967,502  —  $11,437  $92  $2,075,025  $(13,330,821) $(319,284) $(2,562) $(11,566,113) 
Net income2,190  —  —  11,298,524  —  —  11,300,714  
Non-controlling interest - Separation(13,199) —  —  —  —  —  (13,199) 
Accumulated other comprehensive loss - Separation—  —  —  —  307,813  —  307,813  
Issuance of restricted stock132  —  —  —  —  —  132  
Forfeitures of restricted stock(64,750) —  —  —  —  —  —  —  
Share-based compensation—  —  1,635  —  —  —  1,635  
Share-based compensation - discontinued operations614  —  —  —  —  —  614  
Other—  —  —  —  1  —  1  
Other comprehensive loss(788) —  —  —  (2,705) —  (3,493) 
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 warrants56,861,941  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—  —  —  38,793  —  —  38,793  
Vesting of restricted stock11,841  —  —  —  —  —  —  —  
Share-based compensation—  —  3,039  —  —  —  3,039  
Dividends declared(571) —  —  —  —  —  (571) 
Other comprehensive loss—  —  —  —  (328) —  (328) 
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  
(1) The Predecessor Company's Class D Common Stock and Preferred Stock are not presented in the data above as there were no shares issued and outstanding in 2019. The Successor Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2019.
See Notes to Consolidated Financial Statements
5

IHEARTMEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(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		Special WarrantsTotal
Balances at
December 31, 2019 (Successor)
57,776,204  6,904,910  81,046,593  $9,123  $65  $2,826,533  $112,548  $(750) $(2,078) $2,945,441  
Net loss—  —  —  (1,886,053) —  —  (1,886,053) 
Vesting of restricted stock and other646,223  —  3  (25) —  —  (940) (962) 
Share-based compensation—  —  8,497  —  —  —  8,497  
Conversion of Special Warrants to Class A Shares and Class B Shares3,003,854  1,345  (3,005,199) —  —  —  —  —  —  —  
Conversion of Class B Shares to Class A Shares6,060  (6,060) —  —  —  —  —  —  —  
Cancellation of Special Warrants(2,982) —  —  —  —  —  —  —  
Other—  —  —  (1,469) —  —  (1,469) 
Other comprehensive income—  —  —  —  188  —  188  
Balances at
June 30, 2020 (Successor)
61,432,341  6,900,195  78,038,412  $9,123  $68  $2,835,005  $(1,774,974) $(562) $(3,018) $1,065,642  

(1) The Successor Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2020 or 2019.

See Notes to Consolidated Financial Statements


















6

IHEARTMEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
(In thousands, except share data)Controlling Interest
Common Shares(1)Non- controlling InterestCommon StockAdditional Paid-in CapitalRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive LossTreasury Stock
Class A SharesClass B SharesClass C SharesSpecial WarrantsTotal
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 stock196  —  —  —  —  (4) 192  
Forfeitures of restricted stock(110,333) —  —  —  —  —  —  —  
Share-based compensation—  —  2,028  —  —  —  2,028  
Share-based compensation - discontinued operations2,449  —  —  —  —  —  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 warrants56,861,941  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—  —  —  38,793  —  —  38,793  
Vesting of restricted stock11,841  —  —  —  —  —  —  —  
Share-based compensation—  —  3,039  —  —  —  3,039  
Other(571) —  —  —  —  —  (571) 
Other comprehensive loss—  —  —  —  (328) —  (328) 
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  
(1) The Predecessor Company's Class D Common Stock and Preferred Stock are not presented in the data above as there were no shares issued and outstanding in 2019 or 2018. The Successor Company's Preferred Stock is not presented in the data above as there were no shares issued and outstanding in 2019.

See Notes to Consolidated Financial Statements

7

IHEARTMEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)Nine Months Ended September 30,
 2017 2016
Cash flows from operating activities:   
Consolidated net loss$(801,781) $(363,447)
Reconciling items:   
Impairment charges7,631
 8,000
Depreciation and amortization443,650
 476,053
Deferred taxes12,505
 (14,097)
Provision for doubtful accounts20,936
 20,042
Amortization of deferred financing charges and note discounts, net42,682
 51,806
Share-based compensation9,020
 10,350
Gain on disposal of operating and other assets(30,149) (227,765)
Loss on investments2,433
 13,767
Equity in loss of nonconsolidated affiliates2,240
 926
Gain on extinguishment of debt—
 (157,556)
Barter and trade income(32,953) (22,126)
Foreign exchange transaction (gain) loss(21,602) 46,533
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:   
(Increase) decrease in accounts receivable(60,984) 16,909
Increase in prepaid expenses and other current assets(41,306) (17,836)
Decrease in accrued expenses(37,819) (60,515)
Increase (decrease) in accounts payable9,419
 (39,660)
Decrease in accrued interest(78,087) (92,947)
Increase in deferred income3,847
 37,550
Changes in other operating assets and liabilities(8,399) 41,435
Net cash used for operating activities(558,717) (272,578)
Cash flows from investing activities:   
Purchases of other investments(29,498) (33,911)
Proceeds from sale of other investments5,059
 3,256
Purchases of property, plant and equipment(184,944) (201,038)
Proceeds from disposal of assets71,320
 604,044
Purchases of other operating assets(3,224) (3,464)
Change in other, net(3,693) (2,575)
Net cash provided by (used for) investing activities(144,980) 366,312
Cash flows from financing activities:   
Draws on credit facilities60,000
 —
Payments on credit facilities(25,909) (1,728)
Proceeds from long-term debt156,000
 800
Payments on long-term debt(5,385) (226,640)
Payments to purchase noncontrolling interests(953) —
Dividends and other payments to noncontrolling interests(41,083) (93,371)
Change in other, net(5,604) (1,644)
Net cash provided by (used for) financing activities137,066
 (322,583)
Effect of exchange rate changes on cash7,971
 (919)
Net decrease in cash and cash equivalents(558,660) (229,768)
Cash and cash equivalents at beginning of period845,030
 772,678
Cash and cash equivalents at end of period$286,370
 $542,910
SUPPLEMENTAL DISCLOSURES:   
Cash paid for interest$1,426,438
 $1,434,482
Cash paid for taxes31,668
 39,288
(In thousands)Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
202020192019
Cash flows from operating activities:
Net income (loss)$(1,886,053) $38,793  $11,165,113  
Income from discontinued operations—  —  (1,685,123) 
Reconciling items:
Impairment charges1,733,235  —  91,382  
Depreciation and amortization200,115  59,383  52,834  
Deferred taxes(197,689) 13,056  115,839  
Provision for doubtful accounts18,210  3,081  3,268  
Amortization of deferred financing charges and note discounts, net1,033  216  512  
Non-cash Reorganization items, net—  —  (9,619,236) 
Share-based compensation8,497  3,039  498  
(Gain) Loss on disposal of operating and other assets426  (3,960) (143) 
Loss on investments8,675  —  10,237  
Equity in loss of nonconsolidated affiliates595  24  66  
Barter and trade income(5,244) (1,934) (5,947) 
Other reconciling items, net887  73  (65) 
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in accounts receivable314,515  (108,613) 117,263  
Increase in prepaid expenses and other current assets(12,720) (14,773) (24,044) 
Increase in other long-term assets(654) (1,591) (7,098) 
Increase (decrease) in accounts payable and accrued expenses(90,103) 21,001  (156,885) 
Increase (decrease) in accrued interest(12,099) 69,294  256  
Increase in deferred income8,281  4,745  13,377  
Increase (decrease) in other long-term liabilities13,002  1,367  (79,609) 
Cash provided by (used in) operating activities from continuing operations102,909  83,201  (7,505) 
Cash used for operating activities from discontinued operations—  —  (32,681) 
Net cash provided by (used in) operating activities102,909  83,201  (40,186) 
Cash flows from investing activities:
Purchases of investments(9,964) (500) (226) 
Purchases of property, plant and equipment(39,546) (17,435) (36,197) 
Change in other, net(1,171) 148  (2,355) 
Cash used for investing activities from continuing operations(50,681) (17,787) (38,778) 
Cash used for investing activities from discontinued operations—  —  (222,366) 
Net cash used for investing activities(50,681) (17,787) (261,144) 
Cash flows from financing activities:
Proceeds from long-term debt and credit facilities350,000  —  269  
Payments on long-term debt and credit facilities(283,335) —  (8,294) 
Proceeds from Mandatorily Redeemable Preferred Stock—  —  60,000  
Settlement of intercompany related to discontinued operations—  —  (159,196) 
Change in other, net(1,153) (684) (5) 
Cash provided by (used for) financing activities from continuing operations65,512  (684) (107,226) 
Cash provided by financing activities from discontinued operations—  —  51,669  
Net cash provided by (used for) financing activities65,512  (684) (55,557) 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(325) 11  562  
Net increase (decrease) in cash, cash equivalents and restricted cash117,415  64,741  (356,325) 
Cash, cash equivalents and restricted cash at beginning of period411,618  74,009  430,334  
Cash, cash equivalents and restricted cash of continuing operations at end of period$529,033  $138,750  $74,009  
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest$185,364  $430  $137,042  
Cash paid for income taxes1,745  1,549  22,092  
Cash paid for Reorganization items, net443  13,049  183,291  
See Notes to Consolidated Financial Statements

8
3




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 – BASIS OFPRESENTATION
Preparation of Interim Financial Statements
All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to iHeartMedia, Inc. and its consolidated subsidiaries. The Company’s reportable segments are iHeartMedia (“iHM”), Americas outdoor advertising (“Americas outdoor” or “Americas outdoor advertising”) and International outdoor advertising (“International outdoor” or “International outdoor advertising”).
The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. Due to seasonalityAs described below, as a result of the application of fresh start accounting and other factors, the results foreffects of the interim periods mayimplementation of the Company's Plan of Reorganization (as defined below), the consolidated financial statements after the Effective Date (as defined below), are not be indicative of results forcomparable with the full year.consolidated financial statements on or before that date. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 20162019 Annual Report on Form 10-K.
TheThe Company’s reportable segments are:
▪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”).
The consolidated financial statements include the accounts of the Company and its subsidiaries. Also included in the consolidated financial statements are entities for which the Company has a controlling financial interest or is the primary beneficiary. Investments in companies in which the Company owns 20% to 50% of the voting common stock or otherwise exercises significant influence over operating and financial policies of the company are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process.
Unless otherwise indicated, information in these notes to the consolidated financial statements relates to continuing operations. Certain prior-period amountsof the Company's operations have been reclassifiedpresented as discontinued. The Company presents businesses that represent components as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off and their disposal represents a strategic shift that has, or will have, a major effect on its operations and financial results. See Note 2, Discontinued Operations.
COVID-19
Our business has been adversely impacted by the novel coronavirus pandemic (“COVID-19”), its impact on the operating and economic environment and related, near-term advertiser spending decisions. On March 26, 2020, the Company announced that it was withdrawing its previously issued financial guidance for the fiscal year ending December 31, 2020 due to conformheightened uncertainty related to the 2017 presentation.
Going Concern Considerations
DuringCOVID-19. In addition, iHeartCommunications borrowed $350.0 million principal amount under its $450.0 million senior secured asset-based revolving credit facility (the “ABL Facility”) as a precautionary measure to preserve iHeartCommunications’ financial flexibility in light of this uncertainty. In the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures.  The Company adopted this standard for the year ended December 31, 2016. Under this standard,2020, the Company is requiredrepaid $115.0 million of the amounts borrowed under the ABL Facility. As of June 30, 2020, the ABL Facility had a borrowing base of $289.4 million and utilization of $235.0 million in outstanding borrowings and $41.2 million of outstanding letters of credit, resulting in $13.2 million of availability, such availability being subject to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods.further restrictions contained within the credit agreement governing the ABL Facility.
In evaluatingJuly 2020, iHeartCommunications issued $450.0 million of incremental term loans pursuant to an amendment (the “Amendment No. 2”) to the credit agreement (as amended, the “Credit Agreement”) with Capital I, as guarantor, certain subsidiaries of iHeartCommunications, as guarantors, and Bank of America, N.A., as administrative agent, governing the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the date the Company’s financial statements were issued (November 8, 2017). Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due before November 8, 2018.
As of September 30, 2017, the Company had $286.4 million of cash and cash equivalents on its balance sheet, including $222.4 million of cash and cash equivalents held by the Company's subsidiary, Clear Channel Outdoor Holdings, Inc. ("CCOH"). As of September 30, 2017, the Company had $85.0 million of excess availability under iHeartCommunications' receivables-based credit facility, subject to limitations in iHeartCommunications' material financing agreements. A substantial amount of the Company's cash requirements are for debt service obligations. Although the Company has generated operating income in excess of $1.0$2.5 billion in each of the years ended December 31, 2016 and 2015, the Company incurred net losses and had negative cash flows from operations for each of these years as a result of significant cash interest payments arising from the Company's substantial debt balance. For the nine months ended September 30, 2017, the Company used cash of $558.7 million for operating activities, which included cash paid for interest of $1,426.4 million. The Company's current forecast indicates it will continue to incur net losses and generate negative cash flows from operating activities as a result of the Company's indebtedness and significant related interest expense. At September 30, 2017, the Company had debt maturities totaling $366.9 million, $308.5 million (net of $277.1 million due to certain of our subsidiaries) and $8,368.9 million in 2017, 2018 and 2019, respectively. In October 2017, iHeartCommunications exchanged $45.0 millionaggregate principal amount of 11.25% Priority Guarantee Notes due 2021 that were held bysenior secured term loans (the “Term Loan Facility”) and used a subsidiaryportion of iHeartCommunications for $45.0 million principal amount of 10.0% Senior Notes due 2018 that were held by unaffiliated third parties. After the exchanges,proceeds to repay the Company's debt maturities in the next 12 months include, (i) $365.0$235.0 million outstanding balance under the ABL Facility. The remaining proceeds will be available if needed to fund iHeartCommunications' receivables-based credit facility, which matures on December 24, 2017, (ii) $51.5 million of 10% Senior Notes due January 15, 2018, (iii) $175.0 million of 6.875% Senior Notes due June 15, 2018 and (iv) $24.8future working capital requirements or other general corporate purposes.


4
9




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The Company's revenue in the latter half of the month ended March 31, 2020 and in the three months ended June 30, 2020 was significantly and negatively impacted as a result of a decline in advertising spend driven by COVID-19, and the Company's management took proactive actions to expand the Company’s financial flexibility by reducing expenses and preserving cash as a result of such impact.
million
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of contractual AHYDO catch-upemployer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to be madethe net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.  The Company continues to examine the impacts the CARES Act may have on iHeartCommunications' 14% Senior Notes due 2021its business. For more information on the interest payment due on August 1, 2018. The Company's forecast includes approximately $1.8 billion in cash interest payments in the next 12 months, of which $344.6 million is payable in the quarter ended December 31, 2017 and $548.2 million is payable in the first quarter of 2018. In addition, in certain circumstances, a committeeexpected benefits of the CCOH board of directors formed for the specific purpose of monitoring the Intercompany Note (the “CCOH Intercompany Note Committee”) has the non-exclusive authority to demand payments under the Intercompany Note, as long as the CCOH board of directors declares a simultaneous dividend equal to the amount so demanded.  As of November 8, 2017, the CCOH Intercompany Note Committee has the right pursuant to the terms of the settlement of the derivative litigation filed by CCOH’s stockholders regarding the Intercompany Note but not the obligation, to make a demand on the Intercompany Note. If the CCOH Intercompany Note Committee exercises this right to demand a full repayment of the Intercompany Note and the CCOH board of directors declares a simultaneous dividend, based on the balance of the Intercompany Note outstanding at September 30, 2017, approximately $110.4 million would be payable to the public stockholders of CCOH. If the Company is unable to refinance the amounts outstanding under the receivables-based credit facility, the 10% Senior Notes due January 15, 2018, and/or the 6.875% Senior Notes due June 15, 2018 and take other steps to create additional liquidity, forecasted cash flows are not sufficient for the Company to meet its obligations, including upcoming interest payments and maturitiesCARES Act on the Company's outstanding debt, as they become dueincome tax liabilities, see Note 8, Income Taxes.
As of June 30, 2020, the Company had approximately $517.7 million in cash, which includes the ordinary course$235.0 million borrowed under the ABL Facility that was subsequently repaid in July 2020 using the proceeds of business for a periodthe $450.0 million issuance of 12 months following November 8, 2017. As discussed below,incremental term loans.  While the Company expects COVID-19 to negatively impact the results of operations, cash flows and financial position of the Company, the related financial impact cannot be reasonably estimated at this time. Based on the plans that the Company has plans to reduce its principal and interest obligations and to create additional liquidity.
The Company isput in advanced negotiations with potential lenders to refinance the amounts outstanding under iHeartCommunications' receivables-based credit facility and currentlyplace, it expects to refinance the amounts outstanding under that facility prior to its maturity. In addition, management is taking actions to maximize cash available to meet the Company’s obligations as they become due in the ordinary course of business. In addition, as more fully described in Note 3, the Company launched notes exchange offers and term loan offers in March 2017, which notes exchange offers and term loan offers remain open as of November 8, 2017. The Company has engaged in discussions with many of its lenders and noteholders regarding the terms of the global exchange offers and term loan offers, which have been revised since launch and remain subject to substantial further revision, but no agreement has been reached with respect to those discussions and the discussions remain ongoing. These actions are intended to mitigate those conditions which raise substantial doubt of the Company’s ability to continue as a going concern for a period within 12 months following November 8, 2017.
While the Company continues to work toward completing the notes exchange offers and the term loan offers or other similar transactions, refinancing the amounts outstanding under the receivables-based credit facility and taking other actions to create additional liquidity, there is no assurance that the notes exchange offers and the term loan offers or other similar transactions, will be completed, that the amount outstanding under the receivables-based credit facility will be refinanced or that the Company will be able to create additional liquidity. The Company’s ability to meet its obligations as they become due over the coming year.

As a result of uncertainty related to COVID-19 and its negative impact on the Company's business and the public trading values of its debt and equity, the Company was required to perform interim impairment tests on its long-lived assets, intangible assets and indefinite-lived intangible assets as of March 31, 2020. The interim impairment tests resulted in a non-cash impairment of the Company's Federal Communication Commission (“FCC”) licenses of $502.7 million and a non-cash impairment charge of $1.2 billion to reduce goodwill.
Based on management’s forecasted future cash flows and assessment of market values of the Company’s debt and equity securities, market interest rates affecting the Company’s weighted average cost of capital (“WACC”) and other economic factors, additional interim impairment testing of the Company's intangible assets and indefinite-lived intangible was not required as of June 30, 2020. For more information, see Note 5, Property, Plant and Equipment, Intangible Assets and Goodwill.
Voluntary Filing under Chapter 11
As previously disclosed, on March 14, 2018, the Company, iHeartCommunications, Inc. ("iHeartCommunications") and certain of the Company's direct and indirect domestic subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief (the "Chapter 11 Cases") under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"), in the ordinary course of businessUnited States Bankruptcy Court for the next 12 months will depend on its ability to achieve forecasted results, its ability to conserve cash, its ability to refinanceSouthern District of Texas, Houston Division (the "Bankruptcy Court"). On April 28, 2018, the amounts outstanding under iHeartCommunications' receivables-based credit facility, its ability to successfully complete the notes exchange offersCompany and the term loan offersother Debtors filed a plan of reorganization (as amended, the “Plan of Reorganization”) and a related disclosure statement with the Bankruptcy Court. On January 22, 2019, the Plan of Reorganization was confirmed by the Bankruptcy Court. On May 1, 2019 (the “Effective Date”), the Company emerged from Chapter 11 and effectuated a series of transactions through which Clear Channel Outdoor Holdings, Inc. ("CCOH"), its parent Clear Channel Holdings, Inc. (“CCH”) and its subsidiaries (collectively with CCOH and CCH, the “Outdoor Group”) were separated from, and ceased to be controlled by, the Company and its subsidiaries (the “Separation”). All of the Company's equity existing as of the Effective Date was canceled on such date pursuant to the Plan of Reorganization.
Upon the Company's emergence from the Chapter 11 Cases, the Company adopted fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after the Effective Date, are not comparable with the consolidated financial statements on or other similarbefore that date.
References to “Successor” or “Successor Company” relate to the financial position and results of operations of the Company after the Effective Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of the Company on or before the Effective Date.
During the Predecessor period, the Company applied Accounting Standards Codification (“ASC”) 852 - Reorganizations (“ASC 852”) in preparing the consolidated financial statements. ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and achieve sufficient cash interest savings therefrom and its ability to complete other liquidity-generating transactions. Based onevents that are directly associated with the uncertainty of achieving these actions andreorganization from the significanceongoing operations of the forecasted future negative cash flows resulting from the Company's substantial debt balance, including anticipated future cash interest payments (including interest due in the fourth quarter of 2017 and in 2018) and the maturities of the $365.0 million in current borrowings under iHeartCommunications' receivables-based credit facility that matures December 24, 2017, the $51.5 million aggregate principal amount of 10% Senior Notes due January 15, 2018, the $175.0 million aggregate principal amount of 6.875% Senior Notes due June 15, 2018 and the $24.8 million of contractual AHYDO catch-up payments to be made on iHeartCommunications' 14% Senior Notes due 2021 beginning with the interest payment due on August 1, 2018, management has determined that there is substantial doubt as to the Company’s ability to continue as a going concern for a period of 12 months following November 8, 2017.

business. Accordingly, certain charges incurred during 2019 related
5
10




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

New Accounting Pronouncements
Duringto the third quarter of 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This update provides a one-year deferral of the effective date for ASU No. 2014-09, Revenue from Contracts with Customers.  ASU No. 2014-09 provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under U.S. GAAP.  The standard is effective for the first interim period within annual reporting periods beginning after December 15, 2017. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company expects to utilize the full retrospective method. The Company has substantially completed its evaluation of the potential changes from adopting the new standard on its future financial reporting and disclosures, which included reviews of contractual terms for all of the Company’s significant revenue streams and the development of an implementation plan. The Company continues to execute on its implementation plan,Chapter 11 Cases, including detailed policy drafting and training of segment personnel. Based on its evaluation, the Company does not expect material changes to its 2016 or 2017 consolidated revenues, operating income or balance sheetsprofessional fees incurred directly as a result of the implementationChapter 11 Cases are recorded as Reorganization items, net in the Predecessor period.
Reclassifications
Certain prior period amounts have been reclassified to conform to the 2020 presentation. In the first quarter of this standard.2020, in connection with a reorganization of the Company’s management structure after the Separation and emergence from the Chapter 11 cases, the Company reevaluated the classification of certain expenses to determine whether such expenses should be included within Direct operating expenses, Selling, general & administrative (“SG&A”) expenses or Corporate expenses. As a result, certain expenses were reclassified from Corporate expenses to Direct operating or SG&A expenses. In addition, certain expenses were reclassified from SG&A expenses to Direct operating expenses. The reclassifications had no impact on the Company's Operating Income (Loss) or Net Income (Loss). Accordingly, the Company recast the corresponding amounts in the prior period to conform to the current expense classifications. The corresponding current and prior period segment disclosures were recast to reflect the current expense classifications. See Note 10, Segment Data.
Restricted Cash 
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts reported in the Consolidated Statements of Cash Flows:
(In thousands)Successor Company
June 30,
2020		December 31,
2019
Cash and cash equivalents$517,684  $400,300  
Restricted cash included in:
  Other current assets11,349  11,318  
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows$529,033  $411,618  
Certain Relationships and Related Party Transactions
From time to time, certain companies in which the Company holds minority equity interests, purchase advertising in the ordinary course. None of these ordinary course transactions have a material impact on the Company.
New Accounting Pronouncements Recently Adopted
During the firstsecond quarter of 2016, the FASB issued ASU No. 2016-02, Leases2016-13, Financial Instruments-Credit Losses (Topic 842)326): Measurement of Credit Losses on Financial Instruments and finalized amendments to FASB ASC Subtopic 825-15, Financial Instruments-Credit Losses ("ASC 326").  The new leasing standard presents significant changesamendments of ASU 2016-13 are intended to provide financial statement users with more decision-useful information related to expected credit losses on financial instruments and other commitments to extend credit by replacing the balance sheetscurrent incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of lessees. Lessor accountinga broader range of reasonable and supportable information to determine credit loss estimates.  The amendments of ASU 2016-13 eliminate the probable initial recognition threshold and, in turn, reflect an entity’s current estimate of all expected credit losses.  ASU 2016-13 does not specify the method for measuring expected credit losses, and an entity is updatedallowed to align with certain changes inapply methods that reasonably reflect its expectations of the lessee model andcredit loss estimate.  Additionally, the new revenue recognition standard which was issued in the third quarteramendments of 2015. The standard is effectiveASU 2016-13 require that credit losses on available for annual periods, and for interim periods within those annual periods, beginning after December 15, 2018.sale debt securities be presented as an allowance rather than as a write-down.  The Company is currently evaluatingadopted the impact of the provisions of this new standard on its consolidated financial statements.
Duringupdated guidance in the first quarter of 2017,2020 utilizing the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update eliminatesmodified retrospective approach, which resulted in the requirement to calculaterecognition of estimated credit loss reserves against certain available-for-sale debt securities from third-parties held by the implied fair value of goodwill to measure a goodwill impairment charge. Entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The standard is effective for annual and any interim impairment tests performed for periods beginning after December 15, 2019. The Company is currently evaluating the impact of the provisions of this new standard on its consolidated financial statements.
During the second quarter of 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718). This update mandates that entities will apply the modification accounting guidance if the value, vesting conditions or classification of a stock-based award changes. Entities will have to make all of the disclosures about modifications that are required today, in addition to disclosing that compensation expense hasn't changed. Additionally, the new guidance also clarifies that a modification to an award could be significant and therefore require disclosure, even if the modification accounting is not required. The guidance will be applied prospectively to awards modified on or after the adoption date and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company is currently evaluating the impact of the provisions of this new standard on its consolidated financial statements.

Company.
6
11




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 2– PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL
Dispositions
In January 2017, Americas outdoor sold its Indianapolis, Indiana market to Fairway Media Group, LLC in exchange for certain assets in Atlanta, Georgia with a fair value of $39.4 million, plus $43.1 million in cash, net of closing costs. The assets acquired as part of the transaction consisted of $9.9 million in fixed assets and $29.5 million in intangible assets (including $2.3 million in goodwill). The Company recognized a net gain of $28.9 million related to the sale, which is included within Other operating income (expense), net.
During the third quarter of 2017, Americas outdoor sold its ownership interest in a joint venture in Canada. As a result,Upon adoption, the Company recognized a net loss on sale of $12.1$1.5 million including a $6.3 million cumulative translationcumulative-effect adjustment which is included within Other operating income (expense), net.
Property, Plant and Equipment
The Company’s property, plant and equipment consistedto opening retained earnings to reflect expected credit losses in relation to notes receivable held by the Company. In addition, the Company evaluated the potential impact of the following classesCOVID-19 pandemic on the collectability of assetsits notes receivable from third-parties. To develop an estimate of the present value of expected cash flows of notes receivable, the Company used a probability-weighted discounted cash flow model. As a result of this analysis, the Company recognized an additional credit loss reserve against available-for-sale debt securities of $5.6 million, which was recognized within Loss on investments, net in the Company's Statement of Comprehensive Loss for the six months ended June 30, 2020. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses

The FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The new guidance simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences.  It also clarifies and simplifies other aspects of the accounting for income taxes.  For public companies, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years.  Early adoption is permitted in interim or annual periods with any adjustments reflected as of September 30, 2017the beginning of the annual period that includes that interim period.  Additionally, entities that elect early adoption must adopt all the amendments in the same period.  Amendments are to be applied prospectively, except for certain amendments that are to be applied either retrospectively or with a modified retrospective approach through a cumulative effect adjustment recorded to retained earnings.  The Company early adopted this standard, which did not have significant impact on our financial position, results of operations or cash flows.

New Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied through December 31, 2016, respectively:2022. The effects of this standard on our financial position, results of operations and cash flows are not expected to be material.

NOTE 2 - DISCONTINUED OPERATIONS
(In thousands)September 30,
2017		 December 31,
2016
Land, buildings and improvements$578,054
 $570,566
Structures2,807,023
 2,684,673
Towers, transmitters and studio equipment356,222
 350,760
Furniture and other equipment689,227
 622,848
Construction in progress93,850
 91,655
 4,524,376
 4,320,502
Less: accumulated depreciation2,636,313
 2,372,340
Property, plant and equipment, net$1,888,063
 $1,948,162
Indefinite-lived Intangible Assets
The Company’s indefinite-lived intangible assets consist of Federal Communications Commission (“FCC”) broadcast licenses in its iHM segmentDiscontinued operations relate to our domestic and billboard permits in itsinternational outdoor advertising businesses and were previously reported as the Americas outdoor advertising segment. Due to significant differences in both business practices and regulations, billboards in the International outdoor segment are subject to long-term, finite contracts unlike the Company’s permits in the United States and Canada.  Accordingly, there are no indefinite-lived intangible assets in the International outdoor segment.
Annual Impairment Test on Indefinite-lived Intangible Assets
The Company performs its annual impairment test on indefinite-lived intangible assets as of July 1 of each year.
The impairment tests for indefinite-lived intangible assets consist of a comparison between the fair value of the indefinite-lived intangible asset at the market level with its carrying amount. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the indefinite-lived asset is its new accounting basis. The fair value of the indefinite-lived asset is determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the indefinite-lived assets is calculated at the market level as prescribed by ASC 350-30-35. The Company engaged a third-party valuation firm, to assist it in the development of the assumptions and the Company’s determination of the fair value of its indefinite-lived intangible assets.
The application of the direct valuation method attempts to isolate the income that is attributablesegments prior to the indefinite-lived intangible asset alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical “greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process. The Company forecasts revenue,Separation. Revenue, expenses and cash flows over a ten-year period for eachthese businesses are separately reported as Income from discontinued operations, net of its marketstax and cash flows from discontinued operations in its application of the direct valuation method. The Company also calculates aCompany's financial statements for all periods presented.


7
12




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Financial Information for Discontinued Operations
“normalized” residual year which represents the perpetual cash flows of each market. The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market.
Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets.Income Statement Information
The key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average FCC license or billboard permit within a market.
The Company recognized impairment charges related to its indefinite-lived intangible assets within one iHM radio market of $6.0 million during the three and nine months ended September 30, 2017. The Company recognized impairment charges related to its indefinite-lived intangible assets of $0.7 million during the three and nine months ended September 30, 2016.
Other Intangible Assets
Other intangible assets include definite-lived intangible assets and permanent easements.  The Company’s definite-lived intangible assets primarily include transit and street furniture contracts, talent and representation contracts, customer and advertiser relationships, and site-leases and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Permanent easements are indefinite-lived intangible assets which include certain rights to use real property not owned by the Company.  The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets.  These assets are recorded at cost.
The following table presentsshows the gross carrying amountrevenue and accumulated amortizationincome (loss) from discontinued operations and gain on disposal of the Predecessor Company's discontinued operations for each major classthe periods presented:
(In thousands)Predecessor Company
Period from April 1, 2019 through May 1,Period from January 1, 2019 through May 1,
20192019
Revenue$217,450  $804,566  
Loss from discontinued operations before income taxes$(21,684) $(133,475) 
  Income tax benefit (expense)50,830  (6,933) 
Income (loss) from discontinued operations, net of taxes$29,146  $(140,408) 
Gain on disposals before income taxes$1,825,531  $1,825,531  
  Income tax expense—  —  
Gain on disposals, net of taxes$1,825,531  $1,825,531  
Income from discontinued operations, net of taxes$1,854,677  $1,685,123  

In connection with the Separation, the Company and its subsidiaries entered into the agreements described below.
Transition Services Agreement
On the Effective Date, the Company, iHM Management Services, iHeartCommunications and CCOH entered into a transition services agreement (the “Transition Services Agreement”), pursuant to which iHM Management Services has agreed to provide, or cause the Company and its subsidiaries to provide CCOH with certain administrative and support services and other assistance which CCOH will utilize in the conduct of its business as such business was conducted prior to the Separation, for one year from the Effective Date (subject to certain rights of CCOH to extend up to one additional year, as described below).
The allocation of cost is based on various measures depending on the service provided, which measures include relative revenue, employee headcount, number of users of a service or other intangible assets asfactors. As of SeptemberJune 30, 2017 and December 31, 2016, respectively:
(In thousands)September 30, 2017 December 31, 2016
 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Transit, street furniture and other outdoor
contractual rights		$587,099
 $(469,982) $563,863
 $(426,752)
Customer / advertiser relationships1,222,518
 (1,103,001) 1,222,519
 (1,012,380)
Talent contracts319,384
 (292,932) 319,384
 (281,060)
Representation contracts253,350
 (236,157) 253,511
 (229,413)
Permanent easements162,920
 —
 159,782
 —
Other390,302
 (237,214) 390,171
 (219,117)
Total$2,935,573
 $(2,339,286) $2,909,230
 $(2,168,722)
Total amortization expense2020, most of these services have been successfully transitioned to CCOH. CCOH has requested extensions of the term for certain individual services, primarily related to definite-lived intangible assetsinformation systems, for one-month periods through August 31, 2020and may request further one-month extensions of such services up to May 1, 2021.
CCOH may terminate the Transition Services Agreement with respect to all or any individual service, in whole or in part, upon 30 days’ prior written notice, provided that any co-dependent services must be terminated concurrently.
New Tax Matters Agreement
In connection with the Separation, the Company entered into the New Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., CCH, CCOH and Clear Channel Outdoor, Inc., to allocate the responsibility of iHeartMedia and its subsidiaries, on the one hand, and CCOH and its subsidiaries, on the other, for the three months ended September 30, 2017payment of taxes arising prior and 2016 was $49.5 millionsubsequent to, and $55.6 million, respectively. Total amortization expensein connection with, the Separation.
The New Tax Matters Agreement requires that iHeartMedia and iHeartCommunications indemnify CCOH and its subsidiaries, and their respective directors, officers and employees, and hold them harmless, on an after-tax basis, from and against certain tax claims related to definite-lived intangible assetsthe Separation. In addition, the New Tax Matters Agreement requires that CCOH indemnify iHeartMedia for the nine months ended September 30, 2017certain income taxes paid by iHeartMedia on behalf of CCOH and 2016 was $148.2 million and $167.7 million, respectively.

its subsidiaries.
8
13




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3 – REVENUE
As acquisitions and dispositions occur in the future, amortization expense may vary.  Disaggregation of Revenue
The following table presentsshows revenue streams for the Successor Company for the periods presented:
Successor Company
(In thousands)AudioAudio and Media ServicesEliminationsConsolidated
Three Months Ended June 30, 2020
Revenue from contracts with customers:
  Broadcast Radio(1)
$244,035  $—  $—  $244,035  
  Digital(2)
93,227  —  —  93,227  
  Networks(3)
96,330  —  —  96,330  
  Sponsorship and Events(4)
14,809  —  —  14,809  
  Audio and Media Services(5)
—  39,251  (1,779) 37,472  
  Other(6)
1,544  —  (168) 1,376  
     Total449,945  39,251  (1,947) 487,249  
Revenue from leases(7)
399  —  —  399  
Revenue, total$450,344  $39,251  $(1,947) $487,648  
Period from May 2, 2019 through June 30, 2019
Revenue from contracts with customers:
  Broadcast Radio(1)
$390,540  $—  $—  $390,540  
  Digital(2)
64,238  —  —  64,238  
  Networks(3)
105,426  —  —  105,426  
  Sponsorship and Events(4)
31,790  —  —  31,790  
  Audio and Media Services(5)
—  40,537  (1,009) 39,528  
  Other(6)
3,957  —  (112) 3,845  
     Total595,951  40,537  (1,121) 635,367  
Revenue from leases(7)
279  —  —  279  
Revenue, total$596,230  $40,537  $(1,121) $635,646  
Six Months Ended June 30, 2020
Revenue from contracts with customers:
  Broadcast Radio(1)
$705,695  $—  $—  $705,695  
  Digital(2)
186,003  —  —  186,003  
  Networks(3)
230,907  —  —  230,907  
  Sponsorship and Events(4)
44,157  —  —  44,157  
  Audio and Media Services(5)
—  99,478  (3,590) 95,888  
  Other(6)
5,103  —  (335) 4,768  
     Total1,171,865  99,478  (3,925) 1,267,418  
Revenue from leases(7)
864  —  —  864  
Revenue, total$1,172,729  $99,478  $(3,925) $1,268,282  

(1)Broadcast Radio revenue is generated through the sale of advertising time on the Company’s estimatedomestic radio stations.
(2)Digital revenue is generated through the sale of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:
(In thousands) 
2018$127,795
201944,958
202038,326
202134,815
202230,007
Goodwill
Annual Impairment Teststreaming and display advertisements on digital platforms, subscriptions to Goodwill
The Company performs its annual impairment test on goodwill as of July 1 of each year.
Each of the U.S. radio markets and outdoor advertising markets are components of the Company. The U.S. radio markets are aggregated into a single reporting unitiHeartRadio streaming services, podcasting and the U.S. outdoordissemination of other digital content.
(3)Networks revenue is generated through the sale of advertising markets are aggregated into a single reporting unit for purposes of the goodwill impairment test using the guidance in ASC 350-20-55. The Company also determined that each country within its Americas outdoor segment and International outdoor segment constitutes a separate reporting unit.
The goodwill impairment test is a two-step process. The first step, used to screen for potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If applicable, the second step, used to measure the amount of the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.
Each ofon the Company’s reporting unitsPremiere and Total Traffic & Weather network programs and through the syndication of network programming to other media companies.
(4)Sponsorship and events revenue is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unitthrough local events and discounting such cash flows to their present value using a risk-adjusted discount rate. Terminal values were also estimatedmajor nationally-recognized tent pole events and discounted to their present value. Assessing the recoverability of goodwill requires the Company to make estimatesinclude sponsorship and assumptions aboutother advertising revenue, ticket sales, operating margins, growth rates and discount rates based on its budgets, business plans, economic projections, anticipated future cash flowslicensing, as well as endorsement and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors.
The Company recognized goodwill impairment of $1.6 million during the three and nine months ended September 30, 2017 related to one market in the Company's International outdoor segment. The Company recognized goodwill impairment of $7.3 million during the three and nine months ended September 30, 2016 related to one market in the Company's International outdoor segment.

appearance fees generated by on-air talent.
9
14




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(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.

The following table presentsshows revenue streams from continuing operations for the changesPredecessor Company. The presentation of amounts in the carrying amount of goodwill in eachPredecessor period has been revised to conform to the Successor period presentation.
Predecessor Company
(In thousands)
Audio(1)
Audio and Media Services(1)
EliminationsConsolidated
Period from April 1, 2019 through May 1, 2019
Revenue from contracts with customers:
  Broadcast Radio170,632  $—  $—  $170,632  
  Digital26,840  —  —  26,840  
  Networks50,889  —  —  50,889  
  Sponsorship and Events10,617  —  —  10,617  
  Audio and Media Services—  17,970  (701) 17,269  
  Other1,197  —  (56) 1,141  
     Total260,175  17,970  (757) 277,388  
Revenue from leases286  —  —  286  
Revenue, total$260,461  $17,970  $(757) $277,674  
Period from January 1, 2019 through May 1, 2019
Revenue from contracts with customers:
  Broadcast Radio$657,864  $—  $—  $657,864  
  Digital102,789  —  —  102,789  
  Networks189,088  —  —  189,088  
  Sponsorship and Events50,330  —  —  50,330  
  Audio and Media Services—  69,362  (2,325) 67,037  
  Other5,910  —  (243) 5,667  
     Total1,005,981  69,362  (2,568) 1,072,775  
Revenue from leases696  —  —  696  
Revenue, total$1,006,677  $69,362  $(2,568) $1,073,471  
(1)Due to a re-evaluation of the Company’s reportable segments:
(In thousands)iHM Americas Outdoor Advertising International Outdoor Advertising Other Consolidated
Balance as of December 31, 2015$3,288,481
 $534,683
 $223,892
 $81,831
 $4,128,887
Impairment—
 —
 (7,274) —
 (7,274)
Dispositions—
 (6,934) (30,718) —
 (37,652)
Foreign currency—
 (1,998) (5,051) —
 (7,049)
Assets held for sale—
 (10,337) —
 —
 (10,337)
Balance as of December 31, 2016$3,288,481
 $515,414
 $180,849
 $81,831
 $4,066,575
Impairment—
 —
 (1,591) —
 (1,591)
Acquisitions—
 2,252
 —
 —
 2,252
Dispositions—
 —
 (1,817) —
 (1,817)
Foreign currency—
 654
 17,427
 —
 18,081
Assets held for sale—
 89
 —
 —
 89
Balance as of September 30, 2017$3,288,481
 $518,409
 $194,868
 $81,831
 $4,083,589
NOTE 3 – LONG-TERM DEBT
Long-term debt outstanding as of September 30, 2017 and December 31, 2016 consistedinternal segment reporting upon the effectiveness of the following:Plan of Reorganization, the Company’s RCS business is included in the Audio & Media Services results for all periods presented.
15
(In thousands)September 30,
2017		 December 31,
2016
Senior Secured Credit Facilities(1)
$6,300,000
 $6,300,000
Receivables Based Credit Facility Due 2017(2)
365,000
 330,000
9.0% Priority Guarantee Notes Due 20191,999,815
 1,999,815
9.0% Priority Guarantee Notes Due 20211,750,000
 1,750,000
11.25% Priority Guarantee Notes Due 2021825,546
 575,000
9.0% Priority Guarantee Notes Due 20221,000,000
 1,000,000
10.625% Priority Guarantee Notes Due 2023950,000
 950,000
Subsidiary Revolving Credit Facility Due 2018(3)
—
 —
Other secured subsidiary debt(4)
8,681
 20,987
Total consolidated secured debt13,199,042
 12,925,802
    
14.0% Senior Notes Due 2021(5)
1,763,925
 1,729,168
Legacy Notes(6)
475,000
 475,000
10.0% Senior Notes Due 201896,482
 347,028
Subsidiary Senior Notes due 20222,725,000
 2,725,000
Subsidiary Senior Subordinated Notes due 20202,200,000
 2,200,000
Clear Channel International B.V. Senior Notes due 2020375,000
 225,000
Other subsidiary debt25,588
 27,954
Purchase accounting adjustments and original issue discount(142,796) (166,961)
Long-term debt fees(102,341) (123,003)
Total debt20,614,900
 20,364,988
Less: current portion619,003
 342,908
Total long-term debt$19,995,897
 $20,022,080

10




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(1)Term Loan D and Term Loan E mature in 2019.
(2)The Receivables Based Credit Facility, which matures December 24, 2017, provides for borrowings up to the lesser of $535.0 million (the revolving credit commitment) or the borrowing base, subject to certain limitations contained in iHeartCommunications' material financing agreements.
(3)The Subsidiary Revolving Credit Facility provides for borrowings up to $75.0 million (the revolving credit commitment).
(4)Other secured subsidiary debt matures at various dates from 2017 through 2045.
(5)The 14.0% Senior Notes due 2021 are subject to required payments at various dates from 2018 through 2021. 2.0% per annum of the interest is paid through the issuance of payment-in-kind notes in the first and third quarters.
(6)iHeartCommunications' Legacy Notes, all of which were issued prior to the acquisition of iHeartCommunications by the Company in 2008, consist of Senior Notes maturing at various dates in 2018 and 2027, as well as $57.1 million of Senior Notes due 2016 held by a subsidiary of the Company that remain outstanding but are eliminated for purposes of consolidation of the Company’s financial statements.

The Company’s weighted average interest rate was 8.7% and 8.5% as of September 30, 2017 and December 31, 2016, respectively. The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $15.8 billion and $16.7 billion as of September 30, 2017 and December 31, 2016, respectively. Under the fair value hierarchy established by ASC 820-10-35, the market value of the Company’s debt is classified as either Level 1 or Level 2.
On January 31, 2017, iHeartCommunications repaid $25.0 million of the amount borrowed under its receivables-based credit facility. On July 31, 2017, iHeartCommunications borrowed an additional $60.0 million on its receivables-based credit facility, bringing the total amount outstanding under this facility as of September 30, 2017 to $365.0 million.
On February 7, 2017, iHeartCommunications completed an exchange offer by issuing $476.4 million in aggregate principal amount of 11.25% Priority Guarantee Notes due 2021 in exchange for $476.4 million of aggregate principal amount outstanding of its 10.0% Senior Notes due 2018. Of the $476.4 million principal amount of 11.25% Priority Guarantee Notes due 2021 issued in the exchange offer, $241.4 million principal amount was issued to subsidiaries of iHeartCommunications that participated in the exchange offer.
On March 15, 2017, iHeartCommunications commenced exchange offers (the “notes exchange offers”) to exchange certain series of its outstanding debt securities (the “Existing Notes”) for new securities of the Company, iHeartCommunications and CC Outdoor Holdings, Inc., a wholly-owned subsidiary of the Company, and concurrent consent solicitations with respect to the terms of the Existing Notes. On March 15, 2017, the Company also commenced offers (the “term loan offers”) to amend its outstanding Term Loan D and Term Loan E under its senior secured credit facilities and/or to issue new securities of the Company, CC Outdoor Holdings, Inc., Broader Media, LLC and/or iHeartCommunications to the lenders depending on the scenario in which the notes exchange offers and the term loan offers close. The terms of the notes exchange offers and the term loan offers have been revised and are subject to substantial further revision, and the offers may never be consummated, on the terms currently proposed or otherwise. Both the notes exchange offers and the term loan offers were open as of November 8, 2017.
On July 10, 2017, a subsidiary of iHeartCommunications exchanged $15.6 million aggregate principal amount of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $15.6 million aggregate principal amount of its 10.0% Senior Notes due 2018 that were held by an unaffiliated third party.
On August 14, 2017, Clear Channel International B.V. (“CCIBV”), an indirect subsidiary of the Company, issued $150.0 million in aggregate principal amount of 8.75% Senior Notes due 2020 (the “New Notes”). The New Notes were issued as additional notes under the indenture governing CCIBV’s existing 8.75% Senior Notes due 2020 and were issued at a premium, resulting in $156.0 million in proceeds.  The New Notes mature on December 15, 2020 and bear interest at a rate of 8.75% per annum, payable semi-annually in arrears on June 15 and December 15 of each year.

In October 2017, a subsidiary of iHeartCommunications exchanged $45.0 million aggregate principal amount of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $45.0 million aggregate principal amount of 10.0% Senior Notes due 2018 that were held by unaffiliated third parties.

11


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Surety Bonds, Letters of Credit and Guarantees
As of September 30, 2017, the Company and its subsidiaries had outstanding surety bonds, commercial standby letters of credit and bank guarantees of $72.1 million, $144.5 million and $36.6 million, respectively. Bank guarantees and letters of credit of $17.3 million and $28.8 million, respectively, were backed by cash collateral. These surety bonds, letters of credit and bank guarantees relate to various operational matters including insurance, bid, concession and performance bonds as well as other items.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.
Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial disputes; defamation matters; employment and benefits related claims; governmental fines; intellectual property claims; and tax disputes.
International Outdoor Investigation
On April 21, 2015, inspections were conducted at the premises of Clear Channel in Denmark and Sweden as part of an investigation by Danish competition authorities.  Additionally, on the same day, Clear Channel UK received a communication from the UK competition authorities, also in connection with the investigation by Danish competition authorities. Clear Channel and its affiliates are cooperating with the national competition authorities.
Stockholder Litigation
On May 9, 2016, a stockholder of Clear Channel Outdoor Holdings, Inc. ("CCOH") filed a derivative lawsuit in the Court of Chancery of the State of Delaware, captioned GAMCO Asset Management Inc. v. iHeartMedia Inc. et al., C.A. No. 12312-VCS. The complaint names as defendants the Company, iHeartCommunications, Inc. ("iHeartCommunications"), an indirect subsidiary of the Company, Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the "Sponsor Defendants"), the Company's private equity sponsors and majority owners, and the members of CCOH's board of directors. CCOH also is named as a nominal defendant. The complaint alleges that CCOH has been harmed by the intercompany agreements with iHeartCommunications, CCOH’s lack of autonomy over its own cash and the actions of the defendants in serving the interests of the Company, iHeartCommunications and the Sponsor Defendants to the detriment of CCOH and its minority stockholders. Specifically, the complaint alleges that the defendants have breached their fiduciary duties by causing CCOH to: (i) continue to loan cash to iHeartCommunications under the intercompany note at below-market rates; (ii) abandon its growth and acquisition strategies in favor of transactions that would provide cash to the Company and iHeartCommunications; (iii) issue new debt in the CCIBV note offering (the "CCIBV Note Offering") to provide cash to the Company and iHeartCommunications through a dividend; and (iv) effect the sales of certain outdoor markets in the U.S. (the "Outdoor Asset Sales") allegedly to provide cash to the Company and iHeartCommunications through a dividend. The complaint also alleges that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the directors' breaches of their fiduciary duties. The complaint further alleges that the Company, iHeartCommunications and the Sponsor Defendants were unjustly enriched as a result of these transactions and that these transactions constituted a waste of corporate assets for which the defendants are liable to CCOH. The plaintiff is seeking, among other things, a ruling that the defendants breached their fiduciary duties to CCOH and that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the CCOH board of directors' breaches of fiduciary duty, rescission of payments made by CCOH to iHeartCommunications and its affiliates pursuant to dividends declared in connection with the CCIBV Note Offering and Outdoor Asset Sales, and an order requiring the Company, iHeartCommunications and the Sponsor Defendants to disgorge all profits they have received as a result of the alleged fiduciary misconduct.
On July 20, 2016, the defendants filed a motion to dismiss plaintiff's verified stockholder derivative complaint for failure to state a claim upon which relief can be granted. On November 23, 2016, the Court granted defendants' motion to dismiss all claims brought by the plaintiff. On December 19, 2016, the plaintiff filed a notice of appeal of the ruling. The oral hearing on the appeal

12


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

was held on October 11, 2017. On October 12, 2017, the Supreme Court of Delaware affirmed the lower court's ruling, dismissing the case.
NOTE 5 – INCOME TAXES
Income Tax Expense
The Company’s income tax expense for the three and nine months ended September 30, 2017 and 2016, respectively, consisted of the following components:
(In thousands)Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Current tax benefit (expense)$7,349
 $(9,339) $(37,638) $(56,340)
Deferred tax benefit (expense)(9,400) 3,726
 (12,505) 14,097
Income tax expense$(2,051) $(5,613) $(50,143) $(42,243)
The effective tax rates for the three months ended September 30, 2017 and 2016 were (0.8)% and (24.5)%, respectively. The effective tax rates for the nine months ended September 30, 2017 and 2016 were (6.7)% and (13.2)%, respectively. The 2017 and 2016 effective tax rates were primarily impacted by the valuation allowance recorded against deferred tax assets resulting from current period net operating losses in U.S. federal, state and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods.
NOTE 6 – STOCKHOLDERS’ DEFICIT
The Company reports its noncontrolling interests in consolidated subsidiaries as a component of equity separate from the Company’s equity.  The following table shows the changes in stockholders' deficit attributable to the Company and the noncontrolling interests of subsidiaries in which the Company has a majority, but not total, ownership interest:
(In thousands)The Company 
Noncontrolling
Interests
 Consolidated
Balance as of January 1, 2017$(11,021,253) $135,778
 $(10,885,475)
Net income (loss)(810,429) 8,648
 (801,781)
Dividends declared and other payments to noncontrolling interests—
 (43,540) (43,540)
Share-based compensation1,867
 7,153
 9,020
Purchases of additional noncontrolling interest(378) (575) (953)
Disposal of noncontrolling interest—
 (2,438) (2,438)
Foreign currency translation adjustments34,785
 9,880
 44,665
Unrealized holding loss on marketable securities(195) (23) (218)
Reclassification adjustments4,078
 485
 4,563
Other, net(323) (1,235) (1,558)
Balances as of September 30, 2017$(11,791,848) $114,133
 $(11,677,715)

13


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(In thousands)The Company 
Noncontrolling
Interests
 Consolidated
Balance as of January 1, 2016$(10,784,841) $178,160
 $(10,606,681)
Net income (loss)(402,397) 38,950
 (363,447)
Dividends declared and other payments to noncontrolling interests—
 (74,542) (74,542)
Share-based compensation2,159
 8,191
 10,350
Foreign currency translation adjustments40,914
 2,883
 43,797
Unrealized holding loss on marketable securities(571) (64) (635)
Reclassification adjustments28,919
 3,904
 32,823
Other adjustments to comprehensive loss(3,193) (358) (3,551)
Other, net(1,389) 495
 (894)
Balances as of September 30, 2016$(11,120,399) $157,619
 $(10,962,780)
The Company has granted restricted stock and CCOH has granted restricted stock, restricted stock units and options to purchase shares of CCOH's Class A common stock to certain key individuals.
COMPUTATION OF LOSS PER SHARE
(In thousands, except per share data)Three Months Ended
September 30,		 Nine Months Ended
September 30,
 2017 2016 2017 2016
NUMERATOR:       
Net loss attributable to the Company – common shares$(248,177) $(35,001) $(810,429) $(402,397)
        
DENOMINATOR: 
  
  
  
Weighted average common shares outstanding - basic85,072
 84,650
 84,900
 84,510
Weighted average common shares outstanding - diluted(1)
85,072
 84,650
 84,900
 84,510
        
Net loss attributable to the Company per common share: 
  
  
  
Basic$(2.92) $(0.41) $(9.55) $(4.76)
Diluted$(2.92) $(0.41) $(9.55) $(4.76)
(1)
Outstanding equity awards of 8.5 million and 8.0 million for the three months ended September 30, 2017 and 2016, respectively, and 8.5 million and 8.0 million for the nine months ended September 30, 2017 and 2016, respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.
NOTE 7 — OTHER INFORMATION
Other Comprehensive Income (Loss)
There was no change in deferred income tax liabilities resulting from adjustments to comprehensive loss for the three and nine months ended September 30, 2017. The total increase (decrease) in deferred income tax liabilities of other adjustments to comprehensive loss for the three and nine months ended September 30, 2016 was $0.1 million and $(0.7) million.
Trade and Barter
Trade and barter transactions represent the exchange of advertising spots or display space for merchandise, services, advertising and promotion or other assets in the ordinary course of business. These transactions are recordedThe transaction price for these contracts is measured at the estimated fair market value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots or display space orpromised to the fair value of the merchandise or services or other assets received, whichever is most readily determinable.customer. Trade and barter revenues and expenses from continuing operations, which are included in consolidated revenue and selling, general and administrative expenses, respectively.respectively, were as follows:

Successor CompanyPredecessor Company
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,
(In thousands)202020192019
  Trade and barter revenues$19,753  $29,699  $10,349  
  Trade and barter expenses17,075  28,023  8,474  
Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
(In thousands)202020192019
Trade and barter revenues$72,431  $29,699  $65,934  
Trade and barter expenses72,073  28,023  58,330  
The Successor Company recognized barter revenue of $0.2 million, $1.9 million and $5.2 million in the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020, respectively, in connection with investments made in companies in exchange for advertising services. The Predecessor Company recognized barter revenue of $0.9 million and $5.9 million in the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019, respectively, in connection with investments made in companies in exchange for advertising services.

Deferred Revenue
The following tables show the Company’s deferred revenue balance from contracts with customers, excluding discontinued operations:
Successor CompanyPredecessor Company
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,
(In thousands)202020192019
Deferred revenue from contracts with customers:
  Beginning balance(1)
$175,321  $151,475  $155,114  
    Impact of fresh start accounting—  298  —  
    Revenue recognized, included in beginning balance(59,155) (59,018) (43,172) 
    Additions, net of revenue recognized during period, and other61,864  66,997  39,533  
  Ending balance$178,030  $159,752  $151,475  

14
16




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
(In thousands)202020192019
Deferred revenue from contracts with customers:
  Beginning balance(1)
$162,068  $151,475  $148,720  
    Impact of fresh start accounting—  298  —  
    Revenue recognized, included in beginning balance(76,053) (59,018) (76,473) 
    Additions, net of revenue recognized during period, and other92,015  66,997  79,228  
Ending balance$178,030  $159,752  $151,475  
Trade(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 barter revenuesother long-term liabilities on the Consolidated Balance Sheets, depending upon when revenue is expected to be recognized.

The Company’s contracts with customers generally have terms of one year or less; however, as of June 30, 2020, the Company expects to recognize $226.6 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years. Commissions related to the Company’s media representation business have been excluded from this amount as they are contingent upon future sales.
Revenue from Leases
As of June 30, 2020, the future lease payments to be received by the Successor Company are as follows:
(In thousands)
2020$774  
20211,259  
2022860  
2023795  
2024695  
Thereafter10,021  
  Total$14,404  

NOTE 4 – LEASES
The Company enters into operating lease contracts for land, buildings, structures and other equipment. Arrangements are evaluated at inception to determine whether such arrangements contain a lease. Operating leases primarily include land and building lease contracts and leases of radio towers. Arrangements to lease building space consist primarily of the rental of office space, but may also include leases of other equipment, including automobiles and copiers. Operating leases are reflected on the Company's balance sheet within Operating lease right-of-use assets ("ROU assets") and the related short-term and long-term liabilities are included within Current and Noncurrent operating lease liabilities, respectively.
The Company's finance leases are included within Property, plant and equipment with the related liabilities included within Long-term debt.
ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term.
17


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company tests for impairment of right of use assets whenever events and circumstances indicate that such assets might be impaired. During the three months ended June 30, 2020, the Company recognized a non-cash impairment charge of $5.4 million related to a decision by management to abandon and sublease one of its operating leases.
The implicit rate within the Company's lease agreements is generally not determinable. As such, the Company uses the incremental borrowing rate ("IBR") to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC 842, is "the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment."
The following table provides supplemental cash flow information related to leases for the periods presented:
Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1
(In thousands)202020192019
Cash paid for amounts included in measurement of operating lease liabilities$64,940  $23,400  $44,888  
Lease liabilities arising from obtaining right-of-use assets(1)
$18,047  $3,194  $913,598  

(1) Lease liabilities from obtaining right-of-use assets include transition liabilities upon adoption of ASC 842, as well as new leases entered into during the six months ended June 30, 2020 (Successor), the period from January 1, 2019 through May 1, 2019 (Predecessor) and the period from May 2, 2019 through June 30, 2019 (Successor).
The Company reflects changes in the lease liability and changes in the ROU asset on a net basis in the Statements of Cash Flows.

NOTE 5– PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL
Property, Plant and Equipment
The Company’s property, plant and equipment consisted of the following classes of assets as of June 30, 2020 and December 31, 2019, respectively:
(In thousands)Successor Company
June 30,
2020		December 31,
2019
Land, buildings and improvements$388,096  $385,017  
Towers, transmitters and studio equipment160,955  156,739  
Furniture and other equipment390,680  361,527  
Construction in progress28,624  21,287  
968,355  924,570  
Less: accumulated depreciation149,096  77,694  
Property, plant and equipment, net$819,259  $846,876  

Indefinite-lived Intangible Assets
The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses in its Audio segment.
The Company performs its annual impairment test on goodwill and indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year. In addition, the Company tests for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired.
18


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company applied fresh start accounting as of May 1, 2019 in connection with its emergence from Chapter 11 bankruptcy which required stating the Company’s intangible assets at estimated fair value. Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence. The economic downturn in March 2020 and the COVID-19 pandemic had an adverse impact on the trading values of the Company’s publicly-traded debt and equity and on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic has had a negative impact on the Company's forecasted future cash flows. As a result, the Company performed an interim impairment test as of March 31, 2020 on its indefinite-lived FCC licenses.
For purposes of initial recording in fresh start accounting and for annual impairment testing purposes, our FCC licenses are valued using the direct valuation approach, with the key assumptions being forecasted market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average asset within a market.
In estimating the fair value of its FCC licenses, the Company obtained the most recent broadcast radio industry revenue projections which consider the impact of COVID-19 on future broadcast radio advertising revenue. Such projections reflect a significant and negative impact from COVID-19. In addition to using these broadcast radio industry revenue projections, the Company used various sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of March 31, 2020. As a result of COVID-19, the United States economy is undergoing a period of economic disruption and uncertainty, which has caused, among other things, lower consumer and business spending. The uncertainty surrounding the demand for advertising negatively impacted the key assumptions used in the discounted cash flow models used to value the Company's FCC licenses. Considerations in developing these assumptions included the extent of the economic downturn, ranges of expected timing of recovery, discount rates and other factors. As a result of the Company’s assessment the estimated fair value of FCC licenses was determined to be below their carrying values as of March 31, 2020. As a result, during the three months ended March 31, 2020, the Successor Company recognized a non-cash impairment charge of $502.7 million on its FCC licenses.
Based on management’s forecasted future cash flows and assessment of market values of the Company’s debt and equity securities, market interest rates affecting the Company’s WACC and other economic factors, no additional interim impairment charge to the Company's indefinite-lived intangible was required as of June 30, 2020.
During the six months ended June 30, 2019, the Predecessor Company recognized non-cash impairment charges of $91.4 million in relation to indefinite-lived FCC licenses as a result of an increase in the weighted average cost of capital used in performing the annual impairment test.
Other Intangible Assets
Other intangible assets consists of definite-lived intangible assets, which primarily include customer and advertiser relationships, talent and representation contracts, trademarks and tradenames and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time that the assets are expected to contribute directly or indirectly to the Company’s future cash flows.  The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets.  These assets are recorded at amortized cost.
The Company tests for possible impairment of other intangible assets whenever events and circumstances indicate that they might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.  When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.
The Company applied fresh start accounting as of May 1, 2019 in connection with its emergence from Chapter 11 bankruptcy which required stating the Company’s intangible assets at estimated fair value. Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence. The economic downturn in March 2020 and the COVID-19 pandemic had an adverse impact on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic has had a negative impact on the Company's forecasted future cash flows. As a result, the Company performed interim impairment tests as of March 31, 2020 on its other intangible assets. Based on the Company’s test of recoverability using estimated undiscounted future cash flows, the carrying values of the Company’s definite-lived intangible assets were $49.1 milliondetermined to be recoverable, and $30.2 millionno impairment was recognized.
19


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of June 30, 2020 and December 31, 2019, respectively:
(In thousands)Successor Company
June 30, 2020December 31, 2019
Gross Carrying AmountAccumulated AmortizationGross Carrying AmountAccumulated Amortization
Customer / advertiser relationships1,625,376  (199,991) 1,629,236  (114,280) 
Talent and other contracts375,400  (59,026) 375,399  (33,739) 
Trademarks and tradenames321,977  (37,907) 321,977  (21,661) 
Other25,251  (3,126) 21,394  (1,786) 
Total$2,348,004  $(300,050) $2,348,006  $(171,466) 
Total amortization expense related to definite-lived intangible assets for the Successor Company for the three months ended June 30, 2020, the period from May 2, 2019 through June 30, 2019 and the six months ended June 30, 2020 was $64.3 million, $42.5 million and $128.6 million, respectively. Total amortization expense related to definite-lived intangible assets for the Predecessor Company for the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019 was $3.0 million and $12.7 million, respectively.
As acquisitions and dispositions occur in the future, amortization expense may vary.  The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:
(In thousands)
2021$256,650  
2022255,870  
2023247,517  
2024246,827  
2025209,042  
20


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Goodwill
The following table presents the changes in the carrying amount of goodwill:
(In thousands)AudioAudio & Media ServicesConsolidated
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  
     Acquisitions4,637  —  4,637  
     Dispositions(9,466) —  (9,466) 
     Foreign currency—  (1) (1) 
     Other7,087  —  7,087  
Balance as of December 31, 2019 (Successor)$3,221,468  $104,154  $3,325,622  
Impairment(1,224,374) —  (1,224,374) 
Acquisitions404  —  404  
Foreign currency—  5  5  
Balance as of June 30, 2020 (Successor)$1,997,498  $104,159  $2,101,657  
Goodwill Impairment
At least annually, the Company performs its impairment test for each reporting unit’s goodwill.  The Company also tests goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired.
As described in Note 1, the economic disruption as a result of COVID-19 had a significant impact to the trading values of the Company’s publicly-traded debt and equity and on the Company's results in the latter half of the month ended March 31, 2020. In addition, the Company expects that the pandemic will continue to impact the operating and economic environment of our customers and will impact the near-term spending decisions of advertisers. As a result, the Company performed an interim impairment test on its indefinite-lived intangible assets as of March 31, 2020.
The goodwill impairment test requires measurement of the fair value of the Company's reporting units, which is compared to the carrying value of the reporting units, including goodwill. Each reporting unit is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value. Assessing the recoverability of goodwill requires estimates and assumptions about sales, operating margins, growth rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. As with the impairment testing performed on the Company’s FCC licenses described above, the significant deterioration in market conditions and uncertainty in the markets impacted the assumptions used to estimate the discounted future cash flows of the Company’s reporting units for purposes of performing the interim goodwill impairment test. There are inherent uncertainties related to these factors and management’s judgment in applying these factors.
As discussed above, the carrying values of the Company’s reporting units were based on estimated fair values determined upon our emergence from bankruptcy on May 1, 2019, and the rapid deterioration in economic conditions resulting from the COVID-19 pandemic resulted in lower estimated fair values determined in connection with our interim goodwill impairment testing as of March 31, 2020. The estimated fair value of one of the Company's reporting units was below its carrying value, including goodwill. The macroeconomic factors discussed above had an adverse effect on the Company's estimated cash flows used in the discounted cash flow model. As a result, the Company recognized a non-cash impairment charge of $1.2 billion in the first quarter of 2020 to reduce goodwill. The macroeconomic factors discussed above had an adverse effect on the Company's estimated cash flows used in the discounted cash flow model.
21


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Based on management’s forecasted future cash flows and assessment of market values of the Company’s debt and equity securities, market interest rates affecting the Company’s WACC and other economic factors, no additional interim impairment charge to the Company's reporting units was required as of June 30, 2020.
While management believes the estimates and assumptions utilized to calculate the fair value of the Company's tangible and intangible long-lived assets, indefinite-lived FCC licenses and reporting units are reasonable, it is possible a material change could occur to the estimated fair value of these assets. Uncertainty regarding the full extent of the economic downturn as a result of COVID-19, as well as the timing of any recovery, may result in the Company's actual results not being consistent with its estimates, and the Company could be exposed to future impairment losses that could be material to its results of operations.

NOTE 6 – LONG-TERM DEBT
Long-term debt outstanding for the Successor Company as of June 30, 2020 and December 31, 2019 consisted of the following:
(In thousands)Successor Company
June 30, 2020December 31, 2019
Term Loan Facility due 2026(1)(4)
$2,090,765  $2,251,271  
Asset-based Revolving Credit Facility due 2023(2)(4)
235,000  —  
6.375% Senior Secured Notes due 2026800,000  800,000  
5.25% Senior Secured Notes due 2027750,000  750,000  
4.75% Senior Secured Notes due 2028500,000  500,000  
Other secured subsidiary debt(3)
23,632  20,992  
Total consolidated secured debt4,399,397  4,322,263  
8.375% Senior Unsecured Notes due 20271,450,000  1,450,000  
Other unsecured subsidiary debt6,312  12,581  
Long-term debt fees(18,587) (19,428) 
Total debt5,837,122  5,765,416  
Less: Current portion30,061  8,912  
Total long-term debt$5,807,061  $5,756,504  
(1)On February 3, 2020, iHeartCommunications made a $150.0 million prepayment using cash on hand and entered into an agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of 3.00%, or the Base Rate (as defined in the Credit Agreement) plus a margin of 2.00% and to modify certain covenants contained in the Credit Agreement.
(2)On March 13, 2020, iHeartCommunications borrowed $350.0 million under the ABL Facility, the proceeds of which were invested as cash on the Balance Sheet. During the three months ended June 30, 2020, iHeartCommunications voluntarily repaid $115.0 million principal amount drawn under the ABL Facility. As of June 30, 2020, the ABL Facility had a borrowing base of $289.4 million and $235.0 million of outstanding borrowings and $41.2 million of outstanding letters of credit, resulting in $13.2 million of availability. Amounts available under the ABL Facility are calculated using a borrowing base calculated by reference to our outstanding accounts receivable. To the extent decreases in our accounts receivable result in the borrowing base decreasing to an amount below the amount drawn, we may be required to make a partial repayment of amounts outstanding under our ABL Facility.
(3)Other secured subsidiary debt consists of finance lease obligations maturing at various dates from 2021 through 2045.
(4)On July 16, 2020, iHeartCommunications issued $450.0 million of incremental term loans under the Amendment No. 2, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs. A portion of the proceeds from the issuance was used to repay the remaining balance outstanding on the Company's ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes.

The Successor Company’s weighted average interest rate was 5.3% and 6.4% as of June 30, 2020 and December 31, 2019, respectively. The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $5.5 billion and $6.1 billion as of June 30, 2020 and December 31, 2019, respectively. The trading value of the Company’s publicly traded debt decreased significantly in March 2020 as a result of the market’s reaction to COVID-19. While trading values have increased as of June 30, 2020 and the date of this filing, prices have not fully recovered to levels
22


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
prior to the initial impact of COVID-19. Under the fair value hierarchy established by ASC 820-10-35, the market value of the Successor Company’s debt is classified as either Level 1 or Level 2.
On February 3, 2020, iHeartCommunications entered into an amendment to the Credit Agreement governing its Term Loan Facility due 2026. The amendment reduces the interest rate to LIBOR plus a margin of 3.00% (from LIBOR plus a margin of 4.00%), or the Base Rate (as defined in the Credit Agreement) plus a margin of 2.00% (from Base Rate plus a margin of 3.00%) and modifies certain covenants contained in the Credit Agreement.
On July 16, 2020, iHeartCommunications entered into Amendment No. 2 to issue $450.0 million of incremental term loan commitments, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs. A portion of the proceeds from the issuance was used to repay the remaining balance outstanding under the ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes. The incremental term loans issued pursuant to Amendment No. 2 have an interest rate of 4.00% for Eurocurrency Rate Loans and 3.00% for Base Rate Loans (subject to a LIBOR floor of 0.75% and Base Rate floor of 1.75%). Amendment No. 2 also modifies certain other provisions of the Credit Agreement.
In connection with the Term Loan Facility amendment in February 2020, iHeartCommunications also prepaid at par $150.0 million of borrowings outstanding under the Term Loan Facility with cash on hand. Under the terms of the Credit Agreement, iHeartCommunications made quarterly payments of $5.25 million during each of the three months ended March 31, 2020 and three months ended June 30, 2020.Under the terms of Amendment No. 2, iHeartCommunications is required to make quarterly payments of $6.4 million beginning in the third quarter of 2020.
Mandatorily Redeemable Preferred Stock
On the Effective Date, in accordance with the Plan of Reorganization, iHeart Operations issued 60,000 shares of its Series A Perpetual Preferred Stock, par value $0.001 per share (the "iHeart Operations Preferred Stock"), having an aggregate initial liquidation preference of $60.0 million for a cash purchase price of $60.0 million. The iHeart Operations Preferred Stock was purchased by a third party investor. As of June 30, 2020, the liquidation preference of the iHeart Operations Preferred Stock was $60.0 million. As further described below, the iHeart Operations Preferred Stock is mandatorily redeemable for cash at a date certain and therefore is classified as a liability in the Company's balance sheet.
Holders of the iHeart Operations Preferred Stock are entitled to receive, as declared by the board of directors of iHeart Operations, in respect of each share, cumulative dividends accruing daily and payable quarterly. Dividends, if declared, will be payable on March 31, June 30, September 30 2017 and 2016, respectively,December 31 of each year (or on the next business day if such date is not a business day). During the three and $161.7six months ended June 30, 2020 the Company recognized $2.4 million and $105.7$4.2 million of interest expense related to dividends on mandatorily redeemable preferred stock.
Other than as set forth below, iHeart Operations may not redeem the iHeart Operations Preferred Stock at its option prior to the third anniversary of the issue date of the iHeart Operations Preferred Stock. Upon consummation of certain equity offerings, iHeart Operations may, at its option, redeem all or a part of the iHeart Operations Preferred Stock for the liquidation preference plus a make-whole premium. At any time on or after the third anniversary of the issue date, the iHeart Operations Preferred Stock may be redeemed at the option of iHeart Operations, in whole or in part, for cash at a redemption price equal to the liquidation preference per share.
The shares of iHeart Operations Preferred Stock include repurchase rights, pursuant to which the holders may require iHeartMedia or iHeartCommunications to purchase the iHeart Operations Preferred Stock after the fifth anniversary of the issue date.
On the tenth anniversary of the issue date, the shares of iHeart Operations Preferred Stock will be subject to mandatory redemption for an amount equal to the liquidation preference.
Surety Bonds, Letters of Credit and Guarantees
As of June 30, 2020, the Successor Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit of $19.8 million and $41.2 million, respectively. These surety bonds and letters of credit relate to various operational matters including insurance, lease and performance bonds as well as other items.

23


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7 – COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.
Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial disputes; defamation matters; employment and benefits related claims; governmental fines; intellectual property claims; and tax disputes.
Alien Ownership Restrictions and FCC Petition for Declaratory Ruling
The Communications Act and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the licensee of a radio broadcast station unless the FCC finds greater foreign ownership is in the public interest (the “Foreign Ownership Rule”). Under the Plan of Reorganization, the Company committed to file a Petition for Declaratory Ruling ("PDR") requesting the FCC to permit up to 100% of the Company's voting and equity to be owned by non-U.S. individuals and entities, but the FCC’s granting the PDR was not a condition to the Company's emergence. 
The equity allocation mechanism (“Equity Allocation Mechanism”) set forth in the Plan of Reorganization was intended to enable the Company to comply with the Foreign Ownership Rule and other FCC ownership restrictions in connection with emergence. The Equity Allocation Mechanism imposed an obligation on each of the Company's former claimholders in connection with the Chapter 11 Cases (the "Claimholders") to provide written certification sufficient for the Company to determine whether issuance of common stock to such Claimholders would cause the Company to violate the Foreign Ownership Rule, and restricted the Company from issuing common stock to Claimholders such that it would cause the Company to exceed an aggregate alien ownership or voting percentage of 22.5 percent (the “22.5 Percent Threshold”). 
After emerging from bankruptcy, the Company discovered that a group of Claimholders that had certified to having no foreign ownership or voting control in connection with the Equity Allocation Mechanism had subsequently undergone a separate merger transaction without our knowledge or control. As a result of this merger, these Claimholders’ interests in iHeartMedia (amounting to approximately nine percent of the Company's issued and outstanding Class A common stock) can be voted by a U.S. subsidiary of a foreign parent. The Company notified the FCC of this development in writing promptly after discovering and confirming it. The FCC responded to the Company's notification on July 9, 2019, indicating that (1) the FCC has not determined that this development is contrary to the public interest, and (2) the FCC has deemed the Company to be in compliance with the FCC’s foreign ownership reporting rules, pending its decision on the Company's PDR. On July 25, 2019 the Company filed the PDR. The FCC requested public comment on the PDR, which comment period closed on March 26, 2020.  The FCC subsequently referred the PDR to Team Telecom - the interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues. On June 29, 2020, Team Telecom indicated its consent to the grant by the FCC of the PDR.  The Company cannot predict whether the FCC will issue a ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to have, or how long it will take to obtain such a ruling.
24


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 8 – INCOME TAXES
Income Tax Benefit (Expense)
The Company’s income tax benefit (expense) from continuing operations for the three and six months ended June 30, 2020 (Successor) the period from May 2, 2019 through June 30, 2019 (Successor), the period from April 1, 2019 through May 1, 2019 (Predecessor) and the period from January 1, 2019 through May 1, 2019 (Predecessor), respectively, consisted of the following components:
(In thousands)Successor CompanyPredecessor Company
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,
202020192019
Current tax benefit (expense)$(1,731) $(2,947) $6,950  
Deferred tax benefit (expense)45,473  (13,056) (107,239) 
Income tax benefit (expense)$43,742  $(16,003) $(100,289) 

(In thousands)Successor CompanyPredecessor Company
Six Months Ended June 30, 2020Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
202020192019
Current tax benefit (expense)$(3,436) $(2,947) $76,744  
Deferred tax benefit (expense)197,689  (13,056) (115,839) 
Income tax benefit (expense)$194,253  $(16,003) $(39,095) 

The effective tax rate from continuing operations for the Successor Company for the three and six months ended June 30, 2020 was 18.1% and 9.3%, respectively. The effective tax rate for the six months ended June 30, 2020 was primarily impacted by the impairment charges to non-deductible goodwill discussed in Note 1. The deferred tax benefit primarily consists of $125.5 million related to the FCC license impairment charges recorded during the period.
The effective tax rate for the Successor Company for the Period from May 2, 2019 through June 30, 2019 was 29.2%.The effective tax rate for continuing operations of the Predecessor Company for Period from April 1, 2019 through May 1, 2019 (Predecessor) and the Period from January 1, 2019 through May 1, 2019 (Predecessor) was 1.1% and 0.4%, respectively. The income tax expense for the Period from April 1, 2019 through May 1, 2019 (Predecessor) and the Period from January 1, 2019 through May 1, 2019 (Predecessor) primarily consists of the income tax impacts from reorganization and fresh start adjustments, including adjustments to our valuation allowance. The Company recorded income tax benefits of $102.9 million for reorganization adjustments in the Predecessor period, primarily consisting of: (1) tax expense for the reduction in federal and state net operating loss (“NOL”) carryforwards from the cancellation of debt income ("CODI") realized upon emergence; (2) tax benefit for the reduction in deferred tax liabilities attributed primarily to long-term debt that was discharged upon emergence; (3) tax benefit for the effective settlement of liabilities for unrecognized tax benefits that were discharged upon emergence; and (4) tax benefit for the reduction in valuation allowance resulting from the adjustments described above.The Company recorded income tax expense of $185.4 million for fresh start adjustments in the Predecessor period, consisting of $529.1 million tax expense for the increase in deferred tax liabilities resulting from fresh start accounting adjustments, which was partially offset by $343.7 million tax benefit for the reduction in the valuation allowance on our deferred tax assets.

On March 27, 2020 the CARES Act, which included numerous tax provisions, was signed into law.  While the Company is continuing to evaluate the impact of the enacted tax provisions as additional guidance is provided, upon the Company's initial review the provision with the most significant impact on the Company’s income taxes is the increase to the Section 163(j) interest deduction limitation and the ability to elect to use the Company’s 2019 Adjusted Taxable Income (as defined under Section 163(j)) for purposes of calculating the 2020 Section 163(j) limitation. There were several other tax provisions included in the CARES Act allowing companies more flexibility in carrying back net operating losses generated in 2018, 2019 or 2020,
25


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
temporarily eliminating the provision limiting net operating losses utilization to 80% of taxable income and the acceleration of refunds available from alternative minimum tax credits.  The Company does not expect to benefit from any of these provisions.  In addition to the income tax provisions mentioned above, the CARES Act also included provisions impacting employment taxes allowing companies to defer the payment of the employee portion of certain employment taxes that would be due from the enactment date through January 1, 2021.  The amounts deferred are due fifty percent by December 31, 2021 and fifty percent by December 31, 2022.  The Company has deferred $11.3 million in employment taxes as of June 30, 2020. In addition, the CARES Act included a provision providing an Employee Retention tax credit, which would offset employment taxes, for qualified companies and wages.  The Company has recorded approximately $0.7 million in credits during the period ended June 30, 2020.

NOTE 9 – STOCKHOLDER'S EQUITY
Pursuant to the Company's 2019 Equity Incentive Plan, the Company has granted restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.
Share-based Compensation
Share-based compensation expenses are recorded in corporate expenses and were $4.2 million, $3.0 million and $8.8 million for the nineSuccessor Company for three months ended SeptemberJune 30, 20172020, the period from May 2, 2019 through June 30, 2019 and 2016,the six months ended June 30, 2020, respectively. Trade and barterShare-based compensation expenses for the Predecessor Company were $36.6$0.1 million and $23.2$0.5 million for the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019, respectively.
As of June 30, 2020, there was $48.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions. This cost is expected to be recognized over a weighted average period of approximately 3 years.
Successor Common Stock and Special Warrants
The Company is authorized to issue 2,100,000,000 shares, consisting of (a) 1,000,000,000 shares of Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”), (b) 1,000,000,000 shares of Class B Common Stock, par value $0.001 per share (the “Class B Common Stock”), and (c) 100,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”).
The following table presents the Successor Company's Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding as of June 30, 2020:
June 30,
2020
(Unaudited)
Successor Class A Common Stock, par value $.001 per share, 1,000,000,000 shares authorized61,432,341 
Successor Class B Common Stock, par value $.001 per share, 1,000,000,000 shares authorized6,900,195 
Successor Special Warrants78,038,412 
  Total Successor Class A Common Stock, Class B Common Stock and Special Warrants issued146,370,948 
During the three and six months ended June 30, 2020, stockholders converted 145 and 6,060 shares of the Class B common stock into Class A common stock, respectively.
Special Warrants
Each Special Warrant issued under the special warrant agreement entered into in connection with the Reorganization may be exercised by its holder to purchase one share of Successor Class A common stock or Successor Class B common stock at an exercise price of $0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Successor Company's outstanding Class A common stock, (b) more than 22.5 percent of the Successor Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the  Company exceeding any foreign ownership threshold set by the FCC pursuant to a declaratory ruling or specific approval requirement or (d) the Company violating any provision of the Communications Act or restrictions
26


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC. Any holder exercising Special Warrants must complete and timely deliver to the warrant agent the required exercise forms and certifications required under the special warrant agreement.  The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of a licensee’s equity, unless the FCC determines that greater indirect foreign ownership is in the public interest.  As described further in Note 7 above, on July 25, 2019, the Company filed a PDR requesting FCC consent to exceed the 25 percent foreign ownership and voting benchmarks that currently apply to us, on which the FCC has requested public comment.  The public comment period closed on March 26, 2020.  The FCC referred our PDR to Team Telecom - the interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues.  On June 29, 2020, Team Telecom indicated its consent to the grant by the FCC of the PDR. We cannot predict whether the FCC will issue a ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to have, or how long it will take to obtain such a ruling.

During the three and six months ended June 30, 2020, stockholders exercised 877,263 and 3,003,854 Special Warrants for an equivalent number of shares of Class A common stock, respectively. During the three and six months ended June 30, 2020, stockholders exercised 729 and 1,345 Special Warrants for an equivalent number of shares of Class B common stock, respectively.
Stockholder Rights Plan
On May 5, 2020, the Company’s Board of Directors (the “Board”) approved the adoption of a short-term stockholder rights plan (the “Stockholder Rights Plan”) in order to protect the best interests of all Company stockholders during the current period of high equity-market volatility and price disruption.

Pursuant to the stockholder rights plan, the Board has declared a dividend distribution of 1 right on each outstanding share of the Company’s Class A common stock, share of Class B common stock and special warrant issued in connection with the Plan of Reorganization. The record date for such dividend distribution was May 18, 2020.

Under the Stockholder Rights Plan, subject to certain exceptions, the rights will generally be exercisable only if, in a transaction not approved by the Board, a person or group acquires beneficial ownership of 10% or more of the Company’s Class A common stock (or 20% in the case of certain passive investors), including through such person’s ownership of the convertible Class B common stock and/or special warrants, as further detailed in the Stockholder Rights Plan. In that situation, each holder of a right (other than the acquiring person or group) will have the right to purchase, upon payment of the exercise price, a number of shares of the Company’s Class A common stock, Class B common stock or special warrants, as applicable, having a market value of twice such price. In addition, the Stockholder Rights Plan contains a similar provision if the Company is acquired in a merger or other business combination after an acquiring person acquires beneficial ownership of 10% or more of the Company’s Class A common stock (or 20% in the case of certain passive investors).

The Stockholder Rights Plan has a duration of less than one year, expiring on May 5, 2021. The Stockholder Rights Plan may also be terminated, or the rights may be redeemed, by action of the Company prior to the scheduled expiration date under certain circumstances, including if the Board determines that market and other conditions warrant, which the Board intends to monitor. The adoption of the Stockholder Rights Plan will not be a taxable event and will not have any impact on the Company’s financial reporting.
27


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Computation of Income (Loss) per Share
(In thousands, except per share data)Successor CompanyPredecessor Company
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,
 202020192019
NUMERATOR:  
Net income (loss) attributable to the Company – common shares$(197,317) $38,793  $11,298,524  
Exclude:
  Income from discontinued operations, net of
tax		$—  $—  $1,854,677  
  Noncontrolling interest from discontinued operations, net of tax - common shares—  —  (2,190) 
Total income from discontinued operations, net of tax - common shares$—  $—  $1,852,487  
Income (loss) from continuing operations$(197,317) $38,793  $9,446,037  
DENOMINATOR(1):
 
Weighted average common shares outstanding - basic145,963  145,275  85,652  
  Stock options and restricted stock(2):
—  23  —  
Weighted average common shares outstanding - diluted145,963  145,298  85,652  
Net income (loss) attributable to the Company per common share: 
From continuing operations - Basic$(1.35) $0.27  $110.28  
From discontinued operations - Basic$—  $—  $21.63  
From continuing operations - Diluted$(1.35) $0.27  $110.28  
From discontinued operations - Diluted$—  $—  $21.63  

28


IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In thousands, except per share data)Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
202020192019
NUMERATOR:
Net income (loss) attributable to the Company – common shares$(1,886,053) $38,793  $11,184,141  
Exclude:
Income from discontinued operations, net of tax$—  $—  $1,685,123  
  Noncontrolling interest from discontinued operations, net of tax - common shares—  —  19,028  
Total income from discontinued operations, net of tax - common shares$—  $—  $1,704,151  
Income (loss) from continuing operations$(1,886,053) $38,793  $9,479,990  
DENOMINATOR(1):
Weighted average common shares outstanding - basic145,788  145,275  86,241  
Stock options and restricted stock(2):
—  23  —  
Weighted average common shares outstanding - diluted145,788  145,298  86,241  
Net income (loss) attributable to the Company per common share:
From continuing operations - Basic$(12.94) $0.27  $109.92  
From discontinued operations - Basic$—  $—  $19.76  
From continuing operations - Diluted$(12.94) $0.27  $109.92  
From discontinued operations - Diluted$—  $—  $19.76  
(1)All of the outstanding Special Warrants are included in both the basic and diluted weighted average common shares outstanding of the Successor Company for the three months ended SeptemberJune 30, 20172020, the period from May 2, 2019 through June 30, 2019 and 2016, respectively, and $129.2the six months ended June 30, 2020.
(2)Outstanding equity awards representing 7.7 million, 1.3 million and $81.87.9 million forshares of Class A common stock of the nine months ended September 30, 2017 and 2016, respectively.
Trade and barter revenues for our iHeartMedia segment were $45.9 million and $26.0 millionSuccessor Company for the three months ended SeptemberJune 30, 20172020, the period from May 2, 2019 through June 30, 2019 and 2016, respectively, and $149.2the six months ended June 30, 2020 were not included in the computation of diluted earnings per share because to do so would have been antidilutive. Outstanding equity awards representing 5.9 million and $98.0 millionshares of Class A common stock of the Predecessor Company for the nine months ended September 30, 2017 and 2016, respectively. Trade and barter expenses for our iHeartMedia segment were $32.2 million and $21.0 million for the three months ended September 30, 2017 and 2016, respectively, and $118.7 million and $75.4 million for the nine months ended September 30, 2017 and 2016, respectively.
Investments
During the third quarter of 2017 the Company determined that some of its investments had declined in value. Such decline in value was considered to be other than temporary,period from April 1, 2019 through May 1, 2019 and the Company recorded a loss on investmentsperiod from January 1, 2019 through May 1, 2019 were not included in the computation of $1.6 milliondiluted earnings per share because to state the investments at their estimated fair value. During the third quarter of 2016 the Company recorded a loss on investments of $14.5 million on one of its investments.do so would have been antidilutive.

NOTE 810 – SEGMENT DATA
The Company’s reportable segments, which it believes best reflect how the Companyprimary business is currently managed, are iHM, Americas outdoor advertising and International outdoor advertising.included in its Audio segment. Revenue and expenses earned and charged between segmentsAudio, Corporate and the Company's Audio & Media Services businesses are recorded at estimated fair value and eliminated in consolidation.  The iHMAudio segment provides media and entertainment services via broadcast and digital delivery and also includes the Company’s events and national syndication businesses.  The Americas outdoor advertising segment consists of operations primarily in the United States, CanadaAudio & Media Services business provides other audio and Latin America.  The International outdoor advertising segment primarily includes operations in Europe and Asia.  The Other category includesmedia services, including the Company’s media representation business as well as other general support services(Katz Media) and initiatives that are ancillary to the Company’s other businesses.its provider of scheduling and broadcast software (RCS).  Corporate includes infrastructure and support, including executive, information technology, human resources, legal, finance and administrative functions for each of the Company’s reportable segments, as well as overall executive, administrative and support functions.businesses. Share-based payments are recorded in corporate expense.

In connection with a reorganization of the Company’s management structure after the Separation and emergence from the Chapter 11 Cases, the Company revised its segment reporting, as discussed in Note 1 and all prior periods have been restated to conform to this presentation.
15
29




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following table presents the Company's reportable segment results for the three and nine months ended September 30, 2017 and 2016:Successor Company for the periods presented:
Successor Company
(In thousands)AudioAudio & Media ServicesCorporate and other reconciling itemsEliminationsConsolidated
Three Months Ended June 30, 2020
Revenue$450,344  $39,251  $—  $(1,947) $487,648  
Direct operating expenses243,976  7,304  —  (1,414) 249,866  
Selling, general and administrative expenses229,245  32,510  —  (536) 261,219  
Corporate expenses—  —  26,416  3  26,419  
Depreciation and amortization94,898  5,838  2,611  —  103,347  
Impairment charges—  —  5,378  —  5,378  
Other operating expense, net—  —  (506) —  (506) 
Operating loss$(117,775) $(6,401) $(34,911) $—  $(159,087) 
Intersegment revenues$168  $1,779  $—  $—  $1,947  
Capital expenditures$14,198  $961  $2,723  $—  $17,882  
Share-based compensation expense$—  $—  $4,218  $—  $4,218  
Period from May 2, 2019 through June 30, 2019
Revenue596,230  40,537  —  (1,121) 635,646  
Direct operating expenses193,952  4,872  —  (52) 198,772  
Selling, general and administrative expenses196,834  24,458  —  (1,061) 220,231  
Corporate expenses—  —  26,826  (8) 26,818  
Depreciation and amortization54,692  3,619  1,072  —  59,383  
Other operating income, net—  —  3,246  —  3,246  
Operating income (loss)$150,752  $7,588  $(24,652) $—  $133,688  
Intersegment revenues$112  $1,009  $—  $—  $1,121  
Capital expenditures$13,554  $830  $3,051  $—  $17,435  
Share-based compensation expense$—  $—  $3,039  $—  $3,039  
Six Months Ended June 30, 2020
Revenue$1,172,729  $99,478  $—  $(3,925) $1,268,282  
Direct operating expenses538,763  15,507  —  (2,772) 551,498  
Selling, general and administrative expenses539,301  67,184  —  (1,125) 605,360  
Corporate expenses—  —  66,396  (28) 66,368  
Depreciation and amortization183,699  11,534  4,882  —  200,115  
Impairment charges—  —  1,733,235  —  1,733,235  
Other operating expense, net—  —  (1,572) —  (1,572) 
Operating income (loss)$(89,034) $5,253  $(1,806,085) $—  $(1,889,866) 
Intersegment revenues$335  $3,590  $—  $—  $3,925  
Capital expenditures$32,800  $1,623  $5,123  $—  $39,546  
Share-based compensation expense$—  $—  $8,843  $—  $8,843  

30
(In thousands)iHM Americas Outdoor International Outdoor Other Corporate and other reconciling items Eliminations Consolidated
Three Months Ended September 30, 2017
Revenue$859,531
 $316,587
 $328,502
 $34,452
 $—
 $(1,656) $1,537,416
Direct operating expenses265,795
 141,609
 214,491
 —
 —
 —
 621,895
Selling, general and administrative expenses287,676
 54,689
 73,708
 23,298
 —
 (717) 438,654
Corporate expenses—
 —
 —
 —
 78,906
 (939) 77,967
Depreciation and amortization58,089
 47,035
 32,886
 3,893
 7,846
 —
 149,749
Impairment charges—
 —
 —
 —
 7,631
 —
 7,631
Other operating expense, net—
 —
 —
 —
 (13,215) —
 (13,215)
Operating income (loss)$247,971
 $73,254
 $7,417
 $7,261
 $(107,598) $—
 $228,305
Intersegment revenues$—
 $1,656
 $—
 $—
 $—
 $—
 $1,656
Capital expenditures$14,009
 $5,118
 $26,211
 $184
 $2,802
 $—
 $48,324
Share-based compensation expense$—
 $—
 $—
 $—
 $3,539
 $—
 $3,539
              
Three Months Ended September 30, 2016
Revenue$857,099
 $322,997
 $346,224
 $41,414
 $—
 $(1,152) $1,566,582
Direct operating expenses229,668
 142,989
 219,261
 (178) —
 —
 591,740
Selling, general and administrative expenses268,612
 54,500
 71,664
 27,466
 —
 (542) 421,700
Corporate expenses—
 —
 —
 —
 87,442
 (610) 86,832
Depreciation and amortization60,691
 47,242
 37,018
 4,483
 9,019
 —
 158,453
Impairment charges—
 —
 —
 —
 8,000
 —
 8,000
Other operating expense, net—
 —
 —
 —
 (505) —
 (505)
Operating income (loss)$298,128
 $78,266
 $18,281
 $9,643
 $(104,966) $—
 $299,352
Intersegment revenues$—
 $1,152
 $—
 $—
 $—
 $—
 $1,152
Capital expenditures$23,238
 $19,114
 $30,803
 $582
 $3,596
 $—
 $77,333
Share-based compensation expense$—
 $—
 $—
 $—
 $3,484
 $—
 $3,484

16




IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following table presents the Company's segment results for the Predecessor Company for the periods presented. The presentation of prior period amounts has been restated to conform to the presentation of the Successor period.
Predecessor Company
(In thousands)AudioAudio and Media ServicesCorporate and other reconciling itemsEliminationsConsolidated
Period from April 1, 2019 through May 1, 2019
Revenue$260,461  $17,970  $—  $(757) $277,674  
Direct operating expenses95,983  2,549  —  (222) 98,310  
Selling, general and administrative expenses91,551  11,276  —  (531) 102,296  
Corporate expenses—  —  14,510  (4) 14,506  
Depreciation and amortization11,749  1,204  1,591  —  14,544  
Other operating expense, net—  —  (127) —  (127) 
Operating income (loss)$61,178  $2,941  $(16,228) $—  $47,891  
Intersegment revenues$56  $701  $—  $—  $757  
Capital expenditures$11,137  $576  $1,531  $—  $13,244  
Share-based compensation expense$—  $—  $105  $—  $105  
Period from January 1, 2019 through May 1, 2019
Revenue$1,006,677  $69,362  $—  $(2,568) $1,073,471  
Direct operating expenses371,989  9,559  —  (364) 381,184  
Selling, general and administrative expenses383,342  46,072  —  (2,184) 427,230  
Corporate expenses53,667  (20) 53,647  
Depreciation and amortization41,233  5,266  6,335  —  52,834  
Impairment charges—  —  91,382  —  91,382  
Other operating expense, net—  —  (154) —  (154) 
Operating income (loss)$210,113  $8,465  $(151,538) $—  $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  

31
(In thousands)iHM Americas Outdoor International Outdoor Other Corporate and other reconciling items Eliminations Consolidated
Nine Months Ended September 30, 2017          
Revenue$2,501,084
 $919,967
 $942,167
 $99,332
 $—
 $(5,444) $4,457,106
Direct operating expenses773,327
 427,181
 607,023
 3
 —
 —
 1,807,534
Selling, general and administrative expenses894,669
 165,538
 204,531
 74,519
 —
 (2,694) 1,336,563
Corporate expenses—
 —
 —
 —
 236,237
 (2,750) 233,487
Depreciation and amortization174,946
 137,689
 95,149
 11,097
 24,769
 —
 443,650
Impairment charges—
 —
 —
 —
 7,631
 —
 7,631
Other operating income, net—
 —
 —
 —
 24,785
 —
 24,785
Operating income (loss)$658,142
 $189,559
 $35,464
 $13,713
 $(243,852) $—
 $653,026
Intersegment revenues$—
 $5,444
 $—
 $—
 $—
 $—
 $5,444
Capital expenditures$44,353
 $48,749
 $83,851
 $551
 $7,440
 $—
 $184,944
Share-based compensation expense$—
 $—
 $—
 $—
 $9,020
 $—
 $9,020
              
Nine Months Ended September 30, 2016          
Revenue$2,463,899
 $931,058
 $1,035,263
 $114,663
 $—
 $(2,031) $4,542,852
Direct operating expenses704,097
 421,039
 645,199
 1,255
 —
 —
 1,771,590
Selling, general and administrative expenses812,344
 167,660
 220,872
 82,394
 —
 (1,421) 1,281,849
Corporate expenses—
 —
 —
 —
 252,958
 (610) 252,348
Depreciation and amortization182,506
 140,883
 113,075
 12,809
 26,780
 —
 476,053
Impairment charges—
 —
 —
 —
 8,000
 —
 8,000
Other operating income, net—
 —
 —
 —
 219,768
 —
 219,768
Operating income (loss)$764,952
 $201,476
 $56,117
 $18,205
 $(67,970) $—
 $972,780
Intersegment revenues$—
 $2,031
 $—
 $—
 $—
 $—
 $2,031
Capital expenditures$46,303
 $47,808
 $97,487
 $1,758
 $7,682
 $—
 $201,038
Share-based compensation expense$—
 $—
 $—
 $—
 $10,350
 $—
 $10,350



IHEARTMEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 911– CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONSREORGANIZATION ITEMS, NET
Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the periods presented and were as follows:
(In thousands)Successor CompanyPredecessor Company
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,
202020192019
Professional fees and other bankruptcy related costs$—  $—  $(121,374) 
Net gain on settlement of Liabilities subject to compromise—  —  7,192,379  
Impact of fresh start adjustments—  —  2,430,944  
Other items, net—  —  (4,005) 
Reorganization items, net$—  $—  $9,497,944  
Cash payments for Reorganization items, net$26  $13,049  $149,346  

(In thousands)Successor CompanyPredecessor Company
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,
202020192019
Professional fees and other bankruptcy related costs$—  $—  $(157,487) 
Net gain on settlement of Liabilities subject to compromise—  —  7,192,374  
Impact of fresh start adjustments—  —  2,430,944  
Other items, net—  —  (4,005) 
Reorganization items, net$—  $—  $9,461,826  
Cash payments for Reorganization items, net$443  $13,049  $183,291  
Professional fees included in Reorganization items, net represent fees for post-petition expenses related to the Chapter 11 Cases.
The Company is a partyincurred additional professional fees related to a management agreement with certain affiliatesthe bankruptcy, post-emergence, of Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the "Sponsors") and certain other parties pursuant to which such affiliates of the Sponsors will provide management and financial advisory services until 2018. These agreements require management fees to be paid to such affiliates of the Sponsors for such services at a rate not greater than $15.0$1.9 million, per year, plus reimbursable expenses. For the three and nine months ended September 30, 2017, the Company recognized management fees and reimbursable expenses of $3.8$9.1 million and $11.4 million, and $3.9 million and $11.5$4.5 million for the three and nine months ended SeptemberJune 30, 2016, respectively.2020, the period from May 2, 2019 through June 30, 2019 and six months ended June 30, 2020, respectively, which are included within Other income (expense), net in the Company's Consolidated Statements of Comprehensive Income (Loss).




32

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Format of Presentation
Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes contained in Item 1 of this Quarterly Report on Form 10-Q. 
Our discussion is presented on both a consolidated and segment basis. Our reportable segments are iHeartMedia (“iHM”), Americas outdoor advertising (“Americas outdoor” or “Americas outdoor advertising”) and International outdoor advertising (“International outdoor” or “International outdoor advertising”). Our iHM segmentprimary business provides media and entertainment services via live broadcast and digital delivery, including our networks businesses, through our Audio segment. We also operate businesses that provide audio and also includesmedia services, through our national syndication business. Our Americas outdoorAudio and International outdoor segments provide outdoor advertising services in their respective geographic regions using various digital and traditional display types. Included in the “Other” category isMedia Services segment, including our full-service media representation business, Katz Media Group which is ancillary(“Katz Media”) and our provider of scheduling and broadcast software and services, Radio Computing Services ("RCS").
Over the past ten years, we have transitioned our Audio business from a single platform radio broadcast operator to a company with multiple platforms including podcasting, networks and live events. We have also invested in numerous technologies and businesses to increase the competitiveness of our inventory with our advertisers and our audience. We believe that our ability to generate cash flow from operations from our business initiatives and our current cash on hand will provide sufficient resources to fund and operate our business, fund capital expenditures and other businesses.obligations and make interest payments on our long-term debt for at least the next 12 months.
We manageDescription of our operating segments by focusing primarily on their operating income, while Corporate expenses, Other operating income (expense), net, Interest expense, Gain on marketable securities, Equity in earnings (loss) of nonconsolidated affiliates, Loss on extinguishment of debt, Other income, net and Income tax expense are managed on a total company basis and are, therefore, included only in our discussion of consolidated results.
Certain prior period amounts have been reclassified to conform to the 2017 presentation.Business
Our iHMAudio strategy centers on delivering entertaining and informative content where our listeners want to find us across multiple platforms, including broadcast, mobiledigital and digital,live mobile, as well as events. Our primary source of revenue is derived from selling local and national advertising time on our radio stations, with contracts typically less than one year in duration. The programming formats of our radio stations are designed to reach audiences with targeted demographic characteristics. We are workingwork closely with our advertising and marketing partners to develop tools and leverage data to enable advertisers to effectively reach their desired audiences. We continue to expand the choices for listeners and we deliver our content and sell advertising across multiple distribution channels, including digitally via our iHeartRadio mobile application and other digital platforms which reach national, regional and local audiences. We also generate revenuesrevenue from network syndication, our nationally recognized live events, our station websites and other miscellaneous transactions.
Management typically monitors our outdoor advertising business by reviewing the average rates, average revenue per display, occupancy and inventory levels of each of our display types by market. Our outdoor advertising revenue is derived from selling advertising space on the displays we own or operate in key markets worldwide, consisting primarily of billboards, street furniture and transit displays.  Part of our long-term strategy for our outdoor advertising businesses is to pursue the technology of digital displays, including flat screens, LCDs and LEDs, as additions to traditional methods of displaying our clients’ advertisements. We are currently installing these technologies in certain markets, both domestically and internationally.
Our advertising revenue for all of our segments is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with GDP, both domestically and internationally.  Internationally, our results are impacted by fluctuations in foreign currency exchange rates as well as the economic conditionsGDP.  A recession or downturn in the foreign markets in which weU.S. economy may have operations.
Executive Summary
The key developments that impacteda significant impact on the Company’s ability to generate revenue. In light of the novel coronavirus pandemic (“COVID-19”) and the resulting recession impacting the U.S. economy, our business are summarized below:
Consolidated revenue decreased $29.2 million duringfor the threesix months ended SeptemberJune 30, 20172020 has declined significantly compared to the samecomparable period of 2016. Excluding the $10.2 million impact from movements in foreign exchange rates, consolidated2019 and we expect our full year 2020 revenue decreased $39.4 million during the three months ended September 30, 2017to decline compared to 2019, largely as a result of a decline in consumer and business spending and the same period of 2016, primarily duerelated impact to the sales of certain outdoor businesses, which generated $2.6 milliondemand for advertising and $41.9 millionpricing pressure resulting from greater competition for available advertising dollars. Beginning in revenueMarch 2020 and continuing in the three months ended SeptemberJune 30, 20172020, we saw a sharp decline in each of our Broadcast radio, Networks, and 2016, respectively.Sponsorships revenue streams. We also saw a sharp decline in revenues from our Audio and Media Services, particularly in Katz Media, as a result of lower advertising spending. This decrease was partially offset by a $1.7 million increase in political revenue.
When the business environment recovers, we expect that the traditional promotional use of radio to be a strong benefit to us. As businesses reopen both nationally and locally, we believe that we are advantaged by our unparalleled reach and the live and local trusted voices that advertisers need to get their messages out quickly.
In the first quarter of 2020, we announced our modernization initiatives, which will take advantage of the significant investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies. We anticipate to incur approximately $50 million of restructuring costs related to achieving our cost savings in 2020. Our investments in modernization are expected to deliver annualized run-rate cost savings of approximately $100 million by mid-year 2021, and we expect to achieve approximately 50% of our anticipated run-rate savings in 2020. In addition, in response to the COVID-19 pandemic, we have taken significant steps to significantly reduce our capital and operating expenditures for the remainder of 2020. These initiatives are expected to generate approximately $200 million in operating cost savings in 2020. For more information, please see the Liquidity and Capital Resources - Anticipated Cash Requirements section below.
On August 14, 2017, CCIBV,March 26, 2020, we announced the withdrawal of our indirect subsidiary,previously issued atfinancial guidance for the fiscal year ending December 31, 2020 due to heightened uncertainty related to COVID-19. As a $6.0 million premium $150.0precautionary measure to preserve financial flexibility in light of this uncertainty, we borrowed $350.0 million principal amount of 8.75% Senior Notes due 2020.
During the third quarter of 2017, Americas outdoor sold its ownership interest in a joint venture in Canada and recognized a net loss on sale of $12.1 million.
In October 2017, iHeartCommunications exchanged $45.0 million of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $45.0 million of 10.0% Senior Notes due 2018 that were held by unaffiliated third parties.



Revenues and expenses “excluding the impact of foreign exchange movements” in this Management’s Discussion & Analysis of Financial Condition and Results of Operations are presented because management believes that viewing certain financial results without the impact of fluctuations in foreign currency rates facilitates period to period comparisons of business performance and provides useful information to investors.  Revenues and expenses “excluding the impact of foreign exchange movements” are calculated by converting the current period’s revenues and expenses in local currency to U.S. dollars using average foreign exchange rates for the prior period. 
Consolidated Results of Operations
The comparison ofunder our historical results of operations for the three and nine months ended September 30, 2017 to the three and nine months ended September 30, 2016 is as follows:senior secured asset-
33

(In thousands)Three Months Ended
September 30,		 %
Change		 Nine Months Ended
September 30,		 
%
Change
 2017 2016  2017 2016 
Revenue$1,537,416
 $1,566,582
 (1.9)% $4,457,106
 $4,542,852
 (1.9)%
Operating expenses:           
Direct operating expenses (excludes depreciation and amortization)621,895
 591,740
 5.1% 1,807,534
 1,771,590
 2.0%
Selling, general and administrative expenses (excludes depreciation and amortization)438,654
 421,700
 4.0% 1,336,563
 1,281,849
 4.3%
Corporate expenses (excludes depreciation and amortization)77,967
 86,832
 (10.2)% 233,487
 252,348
 (7.5)%
Depreciation and amortization149,749
 158,453
 (5.5)% 443,650
 476,053
 (6.8)%
Impairment charges7,631
 8,000
 (4.6)% 7,631
 8,000
 (4.6)%
Other operating income (expense), net(13,215) (505)   24,785
 219,768
  
Operating income228,305
 299,352
 (23.7)% 653,026
 972,780
 (32.9)%
Interest expense470,250
 459,852
   1,388,747
 1,389,793
  
Loss on investments, net(2,173) (13,767)   (2,433) (13,767)  
Equity in earnings (loss) of nonconsolidated affiliates(2,238) 1,117
   (2,240) (926)  
Gain on extinguishment of debt—
 157,556
   —
 157,556
  
Other income (expense), net2,223
 (7,323)   (11,244) (47,054)  
Loss before income taxes(244,133) (22,917)   (751,638) (321,204)  
Income tax expense(2,051) (5,613)   (50,143) (42,243)  
Consolidated net loss(246,184) (28,530)   (801,781) (363,447)  
Less amount attributable to noncontrolling interest1,993
 6,471
   8,648
 38,950
  
Net loss attributable to the Company$(248,177) $(35,001)   $(810,429) $(402,397)  
Consolidated Revenue
Consolidated revenue decreased $29.2 million duringbased revolving credit facility (the “ABL Facility”). During the three months ended SeptemberJune 30, 2017 compared2020, we repaid $115.0 million principal amount drawn under our ABL Facility, resulting in a balance outstanding of $235.0 million as of June 30, 2020.
In July 2020, iHeartCommunications issued $450.0 million of incremental term loans pursuant to an amendment (the “Amendment No. 2”) to the same periodcredit agreement (as amended, the “Credit Agreement”) with Capital I, as guarantor, certain subsidiaries of 2016. ExcludingiHeartCommunications, as guarantors, and Bank of America, N.A., as administrative agent, governing the $10.2Company’s $2.5 billion aggregate principal amount of senior secured term loans (the “Term Loan Facility”), resulting in net proceeds of $425.8 million, impact from movements in foreign exchange rates, consolidated revenue decreased $39.4after original issue discount and debt issuance costs. A portion of the proceeds was used to repay the remaining balance outstanding on our ABL Facility of $235.0 million, duringwith the three months ended September 30, 2017 comparedremaining $190.6 million of the proceeds available for general corporate purposes. For more information please refer to the same period of 2016. Revenue growth from our iHM business was offset by lower revenue generated by our International“Liquidity and Americas outdoor businesses as a result of the sales of our businessesCapital Resources section” in Canada in 2017 and Australia in 2016, which generated $2.6 million and $41.9 million in revenue in the three months ended September 30, 2017 and 2016, respectively.this MD&A.
Consolidated revenue decreased $85.7 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $18.1 million impact from movements in foreign exchange rates, consolidated revenue decreased $67.6 million during the nine months ended September 30, 2017 compared to the same period of 2016. Revenue growth from our iHM business was offset by lower revenue generated by our International and Americas outdoor businesses as a result of the sales of our businesses in Canada in 2017 and Australia and Turkey in 2016, which generated $13.7 million and $131.2 million in


revenue in the nine months ended September 30, 2017 and 2016, respectively.
Consolidated Direct Operating Expenses
Consolidated direct operating expenses increased $30.2 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $7.2 million impact from movements in foreign exchange rates, consolidated direct operating expenses increased $23.0 million during the three months ended September 30, 2017 compared to the same period of 2016. Higher direct operating expenses in our iHM business, due mostly to a $33.8 million prior year benefit resulting from the renegotiation of certain contracts, was partially offset by lower direct operating expenses in our International and Americas outdoor businesses as a result of the sales of our business in Australia in 2016 and Canada in 2017.
Consolidated direct operating expenses increased $35.9 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $11.3 million impact from movements in foreign exchange rates, consolidated direct operating expenses increased $47.2 million during the nine months ended September 30, 2017 compared to the same period of 2016. Higher direct operating expenses in our iHM business, due mostly to a $33.8 million prior year benefit resulting from the renegotiation of certain contracts, were partially offset by the impact of the sale of our businesses in Australia and Turkey in 2016 and Canada in 2017.
Consolidated Selling, General and Administrative (“SG&A”) Expenses
Consolidated SG&A expenses increased $17.0 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $2.6 million impact from movements in foreign exchange rates, consolidated SG&A expenses increased $14.4 million during the three months ended September 30, 2017 compared to the same period of 2016. Higher SG&A expenses were primarily driven by trade and barter expenses in our iHM business.
Consolidated SG&A expenses increased $54.7 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $3.0 million impact from movements in foreign exchange rates, consolidated SG&A expenses increased $57.7 million during the nine months ended September 30, 2017 compared to the same period of 2016. Higher SG&A expenses were primarily driven by trade and barter expenses in our iHM business and were partially offset by a decrease in SG&A expenses resulting primarily from the sales of our businesses in Australia and Turkey in 2016 and Canada in 2017.
Corporate Expenses
Corporate expenses decreased $8.9 million during the three months ended September 30, 2017 compared to the same period of 2016 primarily resulting from lower employee benefits and variable compensation expenses. For the three month period ended September 30, 2017, we incurred professional fees directly related to the notes exchange offers and term loan offers and, accordingly, such fees are reflected in Other Income (Expense), net as further discussed below.
Corporate expenses decreased $18.9 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $1.9 million impact from movements in foreign exchange rates, corporate expenses decreased $17.0 million during the nine months ended September 30, 2017 compared to the same period of 2016. For the nine month period ended September 30, 2016, professional fees incurred in connection with our capital structure were reflected as part of corporate expenses. For the nine month period ended September 30, 2017, we incurred professional fees directly related to the notes exchange offers and term loan offers and, accordingly, such fees are reflected in Other Income (Expense), net as further discussed below. Employee benefit expense was also lower. The reduction in Corporate expenses was partially offset by higher spending on strategic revenue and efficiency initiatives.
Strategic Revenue and Efficiency Initiatives
Included in the amounts for direct operating expenses, SG&A and corporate expenses discussed above are expenses incurred in connection with our strategic revenue and efficiency initiatives. These costs consist primarily of severance related to workforce initiatives, consolidation of locations and positions, contract cancellation costs, consulting expenses, and other costs incurred in connection with improving our businesses. These costs are expected to provide benefits in future periods as the initiative results are realized.
Strategic revenue and efficiency costs were $6.0 million during the three months ended September 30, 2017. Of these expenses, $2.4 million was incurred by our iHM segment, $0.5 million was incurred by our Americas outdoor segment, $2.0 million was incurred by our International outdoor segment and $1.1 million was incurred by Corporate. Additionally, $1.8 million of these costs are reported within direct operating expenses, $3.1 million are reported within SG&A and $1.1 million are reported within corporate expenses. 


Strategic revenue and efficiency costs were $6.0 million during the three months ended September 30, 2016. Of these expenses, $2.5 million was incurred by our iHM segment, $0.3 million was incurred by our Americas outdoor segment, $2.1 million was incurred by our International outdoor segment, $0.1 million was incurred by our Other category and $1.0 million was incurred by Corporate. Additionally, $1.9 million of these costs are reported within direct operating expenses, $3.1 million are reported within SG&A and $1.0 million are reported within corporate expenses.
Strategic revenue and efficiency costs were $31.0 million during the nine months ended September 30, 2017. Of these expenses, $14.4 million was incurred by our iHM segment, $1.4 million was incurred by our Americas outdoor segment, $6.0 million was incurred by our International outdoor segment, $4.1 million was incurred by our Other category and $5.1 million was incurred by Corporate. Additionally, $10.6 million of these costs are reported within direct operating expenses, $15.3 million are reported within SG&A and $5.1 million are reported within corporate expenses. 
Strategic revenue and efficiency costs were $19.4 million during the nine months ended September 30, 2016. Of these expenses, $11.7 million was incurred by our iHM segment, $1.9 million was incurred by our Americas outdoor segment, $3.6 million was incurred by our International outdoor segment, $0.5 million was incurred by our Other segment and $1.7 million was incurred by Corporate. Additionally, $7.1 million of these costs are reported within direct operating expenses, $10.6 million are reported within SG&A and $1.7 million are reported within corporate expenses.
Depreciation and Amortization
Depreciation and amortization decreased $8.7 million during the three months ended September 30, 2017, compared to the same period of 2016. The decrease was primarily due to assets becoming fully depreciated or fully amortized and the disposal of assets related to the sale of our Australia business in 2016.
Depreciation and amortization decreased $32.4 million during the nine months ended September 30, 2017, compared to the same period of 2016. The decrease was primarily due to assets becoming fully depreciated or fully amortized and the disposal of assets related to the sale of our outdoor non-strategic U.S. markets and Australia and Turkey businesses in 2016.
Impairment Charges
The Company performs its annual impairment test on July 1 of each year. In addition, we test for impairment of property, plant and equipment whenever events and circumstances indicate that depreciable assets might be impaired. As a result of theseuncertainty related to COVID-19 and its negative impact on our business and the public trading values of our debt and equity, we were required to perform interim impairment tests we recordedon our long-lived assets, intangible assets and indefinite-lived intangible assets as of March 31, 2020. The interim impairment chargestests resulted in a non-cash impairment of $7.6our Federal Communication Commission (“FCC”) licenses of $502.7 million and a non-cash impairment charge of $1.2 billion to reduce goodwill during the three and nine months ended September 30, 2017, related to oneMarch 31, 2020.
Based on management’s forecasted future cash flows and assessment of market values of our iHM marketsdebt and oneequity securities, market interest rates affecting our weighted average cost of capital (WACC) and other economic factors, additional interim impairment testing of our International outdoor businesses. During the threeintangible assets and nine months ended Septemberindefinite-lived intangible was not required as of June 30, 2016, we recognized impairment charges of $8.0 million, related primarily to goodwill in one of our International outdoor businesses. Please2020. For more information, see Note 2 5, Property, Plant and Equipment, Intangible Assets and Goodwill to the Consolidated Financial Statementsconsolidated financial statements located in Item 1 of this Quarterly Report on Form 10-Q for a further description of the impairment charges.
While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our long-lived assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the economic downturn caused by the COVID-19 pandemic, as well as the timing of any recovery. If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.
Emergence from Bankruptcy
On March 14, 2018, iHeartMedia, Inc. (the “Company,” "iHeartMedia," "we" or "us"), iHeartCommunications, Inc. (“iHeartCommunications”) and certain of the Company's direct and indirect domestic subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”). On April 28, 2018, the Debtors filed a plan of reorganization and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court, which was subsequently amended by filing the second, third, fourth and fifth amended Plan of Reorganization and amended versions of the Disclosure Statement. On January 22, 2019, the Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of iHeartMedia, Inc. and Its Debtor Affiliates (as further modified, the “Plan of Reorganization”) was confirmed by the Bankruptcy Court.
On May 1, 2019 (the “Effective Date”), the “Debtors emerged from Chapter 11 through (a) a series of transactions (the “Separation”) through which Clear Channel Outdoor Holdings, Inc. (“CCOH”), its parent Clear Channel Holdings, Inc. (“CCH”) and its subsidiaries (collectively with CCOH and CCH, the “Outdoor Group”) were separated from, and ceased to be controlled by, the Company and its subsidiaries (the “iHeart Group”), and (b) a series of transactions (the “Reorganization”) through which iHeartCommunications’ debt was reduced from approximately $16 billion to approximately $5.8 billion and a global compromise and settlement among holders of claims (“Claimholders”) in connection with the Chapter 11 Cases was effected. The compromise and settlement involved, among others, (i) the restructuring of iHeartCommunications’ indebtedness by (A) replacing its “debtor-in-possession” credit facility with a $450 million ABL Facility and (B) issuing to certain Claimholders, on account of their claims, the approximately $3.5 billion aggregate principal amount Term Loan Facility, approximately $1.45 billion aggregate principal amount of new 8.375% Senior Notes due 2027 (the “Senior Unsecured Notes”) and approximately $800 million aggregate principal amount of new 6.375% Senior Secured Notes due 2026 (the “6.375% Senior Secured Notes”), (ii) the Company’s issuance of new Class A common stock, new Class B common stock and special warrants to purchase shares of new Class A common stock and Class B common stock (“Special Warrants”) to Claimholders, subject to ownership restrictions imposed by the Federal Communications’ Commission (“FCC”), (iii) the settlement of certain intercompany transactions, and (iv) the sale of the preferred stock (the “iHeart Operations Preferred Stock”) of the Company’s wholly-owned subsidiary iHeart Operations, Inc. (“iHeart Operations”) in connection with the Separation.
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All of the existing equity of the Company was canceled on the Effective Date pursuant to the Plan of Reorganization. 
Beginning on the Effective Date, the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after May 1, 2019 are not comparable with the consolidated financial statements on or prior to that date.
Combined Results
Our financial results for the periods from April 1, 2019 through May 1, 2019 and from January 1, 2019 through May 1, 2019 are referred to as those of the “Predecessor” period. Our financial results for the period from May 2, 2019 through June 30, 2019, the three months ended June 30, 2020 and the six months ended June 30, 2020 are referred to as those of the “Successor” period. Our results of operations as reported in our Consolidated Financial Statements for these periods are prepared in accordance with GAAP. Although GAAP requires that we report on our results for the period from April 1, 2019 through May 1, 2019, from January 1, 2019 through May 1, 2019 and the period from May 2, 2019 through June 30, 2019 separately, management views the Company’s operating results for the three and six months ended June 30, 2019 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison to our results in the three and six months ended June 30, 2020.

The Company cannot adequately benchmark the operating results of the period from May 2, 2019 through June 30, 2019 against any of the current periods reported in its Consolidated Financial Statements without combining it with the period from April 1, 2019 through May 1, 2019 and the period from January 1, 2019 through May 1, 2019 and does not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding the Company’s overall operating performance. Management believes that the key performance metrics such as revenue, operating income and Adjusted EBITDA for the Successor period when combined with the Predecessor period provides more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting our results of operations as reported in our Consolidated Financial Statements in accordance with GAAP, the tables and discussion below also present the combined results for the three and six months ended June 30, 2019.

The combined results for the three months ended June 30, 2019, which we refer to herein as the results for the "three months ended June 30, 2019" represent the sum of the reported amounts for the Predecessor period from April 1, 2019 through May 1, 2019 and the Successor period from May 2, 2019 through June 30, 2019.The combined results for the six months ended June 30, 2019, which we refer to herein as the results for the “six months ended June 30, 2019” represent the sum of the reported amounts for the Predecessor period from January 1, 2019 through May 1, 2019 and the Successor period from May 2, 2019 through June 30, 2019. These combined results are not considered to be prepared in accordance with GAAP and have not been prepared as pro forma results per applicable regulations. The combined operating results do not reflect the actual results we would have achieved absent our emergence from bankruptcy and may not be indicative of future results.

Executive Summary
As 2020 began, we saw strong growth across our revenue streams in January and February, particularly from digital and from political advertising. However, while digital and political revenue continued to grow, the economic downturn as a result of the COVID-19 pandemic had a significant and negative impact on our other revenue streams beginning in March 2020 and continuing through the second quarter of 2020, including broadcast radio which is our largest revenue stream. A significant decline in advertising spend and the postponement or cancellation of certain tent-pole events drove an overall decrease in revenue for the three and six months ended June 30, 2020 compared to the three and six months ended June 30, 2019. The extent of the economic downturn and the timing of recovery, as well as the future impact on our operations, are subject to significant uncertainty. In an effort to further strengthen the Company's financial flexibility and efficiently manage through the COVID-19 pandemic, we implemented measures to cut costs and preserve cash. For additional information on these actions, see the Liquidity and Capital Resources - Anticipated Cash Requirements section below.
The key developments that impacted our business during the quarter are summarized below:
•Effects of the COVID-19 pandemic significantly adversely impacted revenue for all revenue streams, with the exception of digital and political revenue, which increased during the quarter.
•Revenue of $487.6 million decreased 46.6% during the quarter ended June 30, 2020 compared to Revenue of $913.3 million in the same period in 2019.
•Operating loss of $159.1 million was down from Operating income of $181.6 million in the prior year’s quarter.
•Net loss of $197.3 million decreased from Net income of $11,339.5 million in the prior year's quarter.
•Adjusted EBITDA(1) of $(29.3) million, was down from $262.9 million year-over-year.
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•Cash flows provided by operating activities from continuing operations of $11.4 million increased from Cash flows used for operating activities of $61.0 million in the same period in 2019.
•Free cash flow(2) (used for) continuing operations of $(6.5) million decreased from $(91.6) million in the same period in 2019.
•Repaid $115.0 million of principal amount drawn under our ABL Facility, resulting in a balance outstanding of $235.0 million as of June 30, 2020.
•On July 16, 2020, we issued $450.0 million of incremental Term Loan commitments, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs. A portion of the proceeds from the issuance was used to repay the remaining balance outstanding under the ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes.


The table below presents a summary of our historical results of operations for the periods presented:
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,Three Months Ended June 30,%
2020201920192019Change
Revenue$487,648  $635,646  $277,674  $913,320  (46.6)%
Operating income (loss)$(159,087) $133,688  $47,891  $181,579  NM
Net income (loss)$(197,317) $38,793  $11,300,714  $11,339,507  NM
Cash provided by (used for) operating activities from continuing operations$11,369  $83,201  $(144,171) $(60,970) NM
Adjusted EBITDA(1)
$(29,283) $194,753  $68,097  $262,850  NM
Free cash flow from (used for) continuing operations(2)
$(6,513) $65,766  $(157,415) $(91,649) NM
(1) For a definition of Adjusted EBITDA and a reconciliation to Operating income (loss), the most closely comparable GAAP measure, and to Net income (loss), please see "Reconciliation of Operating Income to Adjusted EBITDA" and "Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA" in this MD&A.
(2) For a definition of Free cash flow from continuing operations and a reconciliation to Cash provided by operating activities from continuing operations, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities from continuing operations to Free cash flow from continuing operations” in this MD&A.


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Results of Operations
The tables below present the comparison of our historical results of operations for the periods presented:
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,Three Months Ended June 30,
2020201920192019
Revenue$487,648  $635,646  $277,674  $913,320  
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)249,866  198,772  98,310  297,082  
Selling, general and administrative expenses (excludes depreciation and amortization)261,219  220,231  102,296  322,527  
Corporate expenses (excludes depreciation and amortization)26,419  26,818  14,506  41,324  
Depreciation and amortization103,347  59,383  14,544  73,927  
Impairment charges5,378  —  —  —  
Other operating income (expense), net(506) 3,246  (127) 3,119  
Operating income (loss)(159,087) 133,688  47,891  181,579  
Interest expense (income), net81,963  69,711  (400) 69,311  
Gain on investments, net1,280  —  —  —  
Equity in loss of nonconsolidated affiliates(31) (24) (59) (83) 
Other income (expense), net(1,258) (9,157) 150  (9,007) 
Reorganization items, net—  —  9,497,944  9,497,944  
Income (loss) from continuing operations before income taxes(241,059) 54,796  9,546,326  9,601,122  
Income tax benefit (expense)43,742  (16,003) (100,289) (116,292) 
Income (loss) from continuing operations(197,317) 38,793  9,446,037  9,484,830  
Income from discontinued operations, net of tax—  —  1,854,677  1,854,677  
Net income (loss)(197,317) 38,793  11,300,714  11,339,507  
Less amount attributable to noncontrolling interest—  —  2,190  2,190  
Net income (loss) attributable to the Company$(197,317) $38,793  $11,298,524  $11,337,317  


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(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,Six Months Ended June 30,
2020201920192019
Revenue$1,268,282  $635,646  $1,073,471  $1,709,117  
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)551,498  198,772  381,184  579,956  
Selling, general and administrative expenses (excludes depreciation and amortization)605,360  220,231  427,230  647,461  
Corporate expenses (excludes depreciation and amortization)66,368  26,818  53,647  80,465  
Depreciation and amortization200,115  59,383  52,834  112,217  
Impairment charges1,733,235  —  91,382  91,382  
Other operating income (expense), net(1,572) 3,246  (154) 3,092  
Operating income (loss)(1,889,866) 133,688  67,040  200,728  
Interest expense (income), net172,052  69,711  (499) 69,212  
Loss on investments, net(8,675) —  (10,237) (10,237) 
Equity in loss of nonconsolidated affiliates(595) (24) (66) (90) 
Other income (expense), net(9,118) (9,157) 23  (9,134) 
Reorganization items, net—  —  9,461,826  9,461,826  
Income (loss) from continuing operations before income taxes(2,080,306) 54,796  9,519,085  9,573,881  
Income tax benefit (expense)194,253  (16,003) (39,095) (55,098) 
Income (loss) from continuing operations(1,886,053) 38,793  9,479,990  9,518,783  
Income from discontinued operations, net of tax—  —  1,685,123  1,685,123  
Net income (loss)(1,886,053) 38,793  11,165,113  11,203,906  
Less amount attributable to noncontrolling interest—  —  (19,028) (19,028) 
Net income (loss) attributable to the Company$(1,886,053) $38,793  $11,184,141  $11,222,934  

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The tables below present the comparison of our revenue streams for the periods presented:
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,Three Months Ended June 30,%
2020201920192019Change
Broadcast Radio$244,035  $390,540  $170,632  $561,172  (56.5)%
Digital93,227  64,238  26,840  91,078  2.4 %
Networks96,330  105,426  50,889  156,315  (38.4)%
Sponsorship and Events14,809  31,790  10,617  42,407  (65.1)%
Audio and Media Services39,251  40,537  17,970  58,507  (32.9)%
Other1,943  4,236  1,483  5,719  (66.0)%
Eliminations(1,947) (1,121) (757) (1,878) 
  Revenue, total$487,648  $635,646  $277,674  $913,320  (46.6)%


(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,Six Months Ended June 30,%
2020201920192019Change
Broadcast Radio$705,695  $390,540  $657,864  $1,048,404  (32.7)%
Digital186,003  64,238  102,789  167,027  11.4 %
Networks230,907  105,426  189,088  294,514  (21.6)%
Sponsorship and Events44,157  31,790  50,330  82,120  (46.2)%
Audio and Media Services99,478  40,537  69,362  109,899  (9.5)%
Other5,967  4,236  6,606  10,842  (45.0)%
Eliminations(3,925) (1,121) (2,568) (3,689) 
  Revenue, total$1,268,282  $635,646  $1,073,471  $1,709,117  (25.8)%

Consolidated results for the three months ended June 30, 2020 compared to the combined results for the three months ended June 30, 2019 and consolidated results for the six months ended June 30, 2020 compared to the combined results for the six months ended June 30, 2019 were as follows:

Revenue
Revenue decreased $425.7 million during the three months ended June 30, 2020 compared to the same period of 2019. The decrease in Revenue is primarily attributable to the effects of COVID-19, which began to unfold into a global pandemic in early March of 2020, resulting in a significant economic downturn due to the shut-down of non-essential businesses and shelter-in-place orders. The impact continued through the second quarter of 2020, resulting in significant revenue declines impacting most of our revenue streams primarily as a result of a decrease in broadcast radio advertising spend. Broadcast revenue decreased $317.1 million, driven by a $188.7 million decrease in Local spot revenue and a $103.7 million decrease in National spot revenue. Revenue from our Network businesses, including both Premiere and Total Traffic & Weather, was also impacted by the downturn, resulting in a decrease of $60.0 million. Revenue from Sponsorship and Events decreased by $27.6 million, primarily as a result of the postponement or cancellations of events in response to the COVID-19 pandemic. Digital revenue increased $2.1 million, driven by continued growth in podcasting. Audio and Media Services revenue decreased $19.3 million primarily due to the effects of COVID-19 on advertising spend. This decrease was partially offset by a $1.7 million increase in political revenue as a result of 2020 being a presidential election year.
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Revenue decreased $440.8 million during the six months ended June 30, 2020 compared to the same period of 2019. The decrease in Revenue is primarily attributable to the effects of COVID-19, which began to unfold into a global pandemic in early March of 2020, resulting in a significant economic downturn due to the shut-down of non-essential businesses and shelter-in-place orders. Strong Revenue growth in January and February was followed by a sharp decline in revenue in March, which continued through the second quarter of 2020, resulting in significant revenue declines impacting most of our revenue streams, primarily as a result of a decrease in broadcast radio advertising spend. Broadcast revenue decreased $342.7 million, driven by a $214.7 million decrease in Local spot revenue and a $121.9 million decrease in National spot revenue. The decrease in Broadcast revenue was offset by a $15.5 million increase in political revenue as a result of 2020 being a presidential election year. Revenue from our Network businesses, including both Premiere and Total Traffic & Weather, was also impacted by the downturn, resulting in a decrease of $63.6 million. Revenue from Sponsorship and Events decreased by $38.0 million, primarily as a result of the postponement or cancellations of events in response to the COVID-19 pandemic. Digital revenue increased $19.0 million, driven by continued growth in podcasting. Audio and Media Services revenue decreased $10.4 million primarily due to the effects of COVID-19 on advertising spend. This decrease was offset by an $8.9 million increase in political revenue.

Direct Operating Expenses
Direct operating expenses decreased $47.2 million during the three months ended June 30, 2020 compared to the same period of 2019. The decrease in Direct operating expenses was driven primarily by lower employee compensation expenses resulting from cost reduction initiatives taken in response to the COVID-19 pandemic. In addition, variable operating expenses, including music license and performance royalty fees, decreased in relation to lower revenue recognized during the period. Variable expenses related to events also decreased as a result of the postponement or cancellation of events in response to the COVID-19 pandemic.
Direct operating expenses decreased $28.5 million during the six months ended June 30, 2020 compared to the same period of 2019. The decrease in Direct operating expenses was driven primarily by lower employee compensation expenses resulting from cost reduction initiatives taken in response to the COVID-19 pandemic. In addition, variable operating expenses, including music license and performance royalty fees, decreased in relation to lower revenue recognized during the period. Variable expenses related to events also decreased as a result of the postponement or cancellation of events in response to the COVID-19 pandemic. The decrease in Direct operating expenses was partially offset by severance payments and other costs specific to our modernization initiatives, which were incurred mainly in January and February, as well as higher content costs from higher podcasting and digital subscription revenue.

Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses decreased $61.3 million during the three months ended June 30, 2020 compared to the same period of 2019. The decrease in SG&A expenses was driven primarily by lower employee compensation expenses resulting from cost reduction initiatives taken in response to the COVID-19 pandemic, along with lower sales commissions, which were impacted by the decrease in revenue. Trade and barter expenses also decreased primarily driven by lower Local trade expenses, which declined in line with lower Trade revenue. The decrease in SG&A expenses was partially offset by higher bad debt expense.
SG&A expenses decreased $42.1 million during the six months ended June 30, 2020 compared to the same period of 2019. The decrease in SG&A expenses was driven primarily by lower employee compensation expenses resulting from cost reduction initiatives taken in response to the COVID-19 pandemic, along with lower sales commissions, which were impacted by the decrease in revenue. Trade and barter expenses also decreased primarily driven by lower Local trade expenses, which declined in line with lower Trade revenue. The decrease in SG&A expenses was partially offset by costs incurred in relation to our modernization initiatives announced in the first quarter of 2020 and higher bad debt expense.
Corporate Expenses
Corporate expenses decreased $14.9 million during the three months ended June 30, 2020 compared to the same period of 2019, as a result of lower employee compensation, including variable incentive expenses and employee benefits, resulting from cost reduction initiatives taken in response to the COVID-19 pandemic.
Corporate expenses decreased $14.1 million during the six months ended June 30, 2020 compared to the same period of 2019, as a result of lower employee compensation, including variable incentive expenses and employee benefits, resulting from cost reduction initiatives taken in response to the COVID-19 pandemic. The decrease in Corporate expenses was partially offset by costs incurred to support our modernization initiatives in January and February, as well as higher share-based compensation expense, which increased $5.3 million as a result of our new post-emergence equity compensation plan.

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Depreciation and Amortization
Depreciation and amortization increased $29.4 million and $87.9 million during the three and six months ended June 30, 2020, compared to the same periods of 2019, respectively, primarily as a result of the application of fresh start accounting, which resulted in significantly higher values of our tangible and intangible long-lived assets.
Impairment Charges
We perform our annual impairment test on our goodwill and FCC licenses as of July 1 of each year. In addition, we test for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired.  As discussed above, as a result of the assumed potential adverse effects caused by the COVID-19 pandemic on estimated future cash flows, we recognized non-cash impairment charges to our indefinite-lived intangible assets and goodwill of $1.7 billion in the six months ended June 30, 2020.
We recognized non-cash impairment charges of $91.4 million in the six months ended June 30, 2019 on our indefinite-lived FCC licenses as a result of an increase in our weighted average cost of capital. See Note 5, Property, Plant and Equipment, Intangible Assets and Goodwill, to the consolidated financial statements located in Item 1 of this Quarterly Report on Form 10-Q for a further description of the impairment charges.
Other Operating Income (Expense), Net
Other operating expense, net was $13.2of $0.5 million and Other operating income, net of $3.1 million for the three months ended SeptemberJune 30, 2017, which primarily related to the $12.12020 and 2019, respectively, and Other operating expense, net of $1.6 million loss, which includes $6.3 million in cumulative translation adjustments, recognized on the sale of our ownership interest in a joint venture in Canada during the third quarter of 2017.and Other operating income, net of $24.8$3.1 million for the ninesix months ended SeptemberJune 30, 2017 primarily related2020 and 2019, respectively, relate to the sale in the first quarter of 2017 of the Americas outdoor Indianapolis market exchanged for certain assets in Atlanta, Georgia, plus $43.1 million in cash, net of closing costs, resulting in a net gain of $28.9 milliongains and a gain of $6.8 millionlosses recognized on the sale of our ownership interest in a joint venture in Belgium in the second quarter of 2017, offset by the loss of $12.1 million recognized on the sale of our ownership interest in a joint venture in Canada.
Other operating expense, net was $0.5 million for the three months ended September 30, 2016, which primarily related to net losses on the sale of operating assets. Other operating income, net was $219.8 million for the nine months ended September 30, 2016, which primarily related to the sale of nine non-strategic outdoor markets in the first quarter of 2016, partially offset by the loss on the sales of our Australia and Turkey businesses.asset disposals.
Interest Expense
Interest expense increased $10.4$12.7 million and $102.8 million during the three and six months ended June 30, 2020, respectively, compared to the same periods of 2019 as a result of the interest recognized on the new debt issued in connection with our emergence from the Chapter 11 Cases. During the period from March 14, 2018 to May 1, 2019, while the Company was a debtor-in-possession, no interest expense was recognized on pre-petition debt.

In the Predecessor periods, we ceased to accrue interest expense on long-term debt, which was reclassified as Liabilities subject to compromise as of March 14, 2018 (the “Petition Date”), resulting in $135.9 million and $533.4 million in contractual interest not being accrued in the three and six months ended June 30, 2019, respectively.

Gain (Loss) on Investments, net
During the three and six months ended June 30, 2020, we recognized a gain on investments, net of $1.3 million and a loss on investments of $8.7 million, respectively. The gain on investments, net recognized during the quarter primarily related to a gain on one of our marketable equity securities. The loss on investments, net recognized during the six months ended June 30, 2020 was primarily in connection with estimated credit losses and declines in the value of our investments.

During the six months ended June 30, 2019, we recognized a loss of $10.2 million, primarily in connection with declines in the value of our investments. We did not recognize any gain or loss on investments during the three months ended SeptemberJune 30, 2017 compared to the same period of 2016 primarily due to an increase in variable interest rates. Interest expense decreased $1.0 million during the nine months ended September 30, 2017 compared to the same period of 2016. The decrease is primarily due to settlements of long-term debt in 2016, partially offset by an increase in variable interest rates, primarily as a result from an increase in LIBOR.2019.
Loss on Investments, net


During the three and nine months ended September 30, 2017, we recognized losses of $2.2 million and $2.4 million, respectively, related to our investments. During the three and nine months ended September 30, 2016, we recognized a loss of $13.8 million, related to cost-method investments.
Gain (Loss) on Extinguishment of Debt
During the third quarter of 2016, Broader Media, LLC, an indirect wholly-owned subsidiary of the Company, repurchased approximately $383.0 million aggregate principal amount of iHeartCommunications' 10.0% Senior Notes due 2018 for an aggregate purchase price of approximately $222.2 million. In connection with this repurchase, we recognized a gain of $157.6 million.
Other Income (Expense), netNet
Other income, net was $2.2 million and other expense, net was $11.2$1.3 million and $9.1 million for the three and ninesix months ended SeptemberJune 30, 2017, respectively. These amounts relate primarily2020, respectively, which related to costs incurred to refinance our Term Loan Facility and professional fees incurred in connection with the Chapter 11 Cases in the Successor period. Such expenses were included within Reorganization items, net foreign exchange gains of $9.3in the Predecessor period while the Company was a debtor-in-possession.

Other expense, net was $9.0 million and $21.6$9.1 million for the three and ninesix months ended SeptemberJune 30, 2017, respectively, recognized2019, respectively. Amounts in connection with intercompany notes denominated in foreign currencies, partially offset by expensesthe six months ended June 30, 2019 related primarily to professional fees incurred directly in connection with the notes exchange offers and term loan offers of $7.2 million and $31.4 million forChapter 11 Cases before the Petition Date. Such expenses were included within Reorganization items, net in the post-petition period while the Company was a debtor-in-possession.

41

Reorganization Items, Net

        During the three and ninesix months ended SeptemberJune 30, 2017, respectively, as described in "Liquidity and Capital Resources - Notes Exchange Offers and Term Loan Offers".
Other expense,2019, we recognized Reorganization items, net was $7.3of $9,497.9 million and $47.1$9,461.8 million for the three and nine months ended September 30, 2016, respectively, which primarily related to the Chapter 11 Cases, which consisted primarily of the net foreign exchange lossesgain from the consummation of the Plan of Reorganization and the related settlement of liabilities.In addition, Reorganization items, net included professional fees recognized between the Petition Date and the Effective Date in connection with intercompany notes denominated in foreign currencies.the Chapter 11 Cases.

Income Tax ExpenseBenefit (Expense)

The effective tax rate for the Successor Company for the three and ninesix months ended SeptemberJune 30, 20172020 was (0.8)%18.1% and (6.7)%9.3%, respectively. The effective tax rate for the three and ninesix months ended SeptemberJune 30, 20162020 was (24.5)% and (13.2)%, respectively. The effective tax rates were primarily impacted by the impairment charges discussed above. The deferred tax benefit primarily consists of $125.5 million related to the FCC license impairment charges recorded during the period.

The effective tax rate for the Successor Company for the Period from May 2, 2019 through June 30, 2019 was 29.2%. The effective tax rate for continuing operations of the Predecessor Company for Period from April 1, 2019 through May 1, 2019 (Predecessor) and the Period from January 1, 2019 through May 1, 2019 (Predecessor) was 1.1% and 0.4%, respectively. The income tax expense for the Period from April 1, 2019 through May 1, 2019 (Predecessor) and the Period from January 1, 2019 through May 1, 2019 (Predecessor) primarily consists of the income tax impacts from reorganization and fresh start adjustments, including adjustments to our valuation allowance. The Company recorded income tax benefits of $102.9 million for reorganization adjustments in the Predecessor period, primarily consisting of: (1) tax expense for the reduction in federal and state net operating loss carryforwards from the cancellation of debt income realized upon emergence; (2) tax benefit for the reduction in deferred tax liabilities attributed primarily to long-term debt that was discharged upon emergence; (3) tax benefit for the effective settlement of liabilities for unrecognized tax benefits that were discharged upon emergence; and (4) tax benefit for the reduction in valuation allowance resulting from the adjustments described above. The Company recorded againstincome tax expense of $185.4 million for fresh start adjustments in the Predecessor period, consisting of $529.1 million tax expense for the increase in deferred tax assets originatingliabilities resulting from fresh start accounting adjustments, which was partially offset by $343.7 million tax benefit for the reduction in the periodvaluation allowance on our deferred tax assets.

42

Income from Discontinued Operations, Net

        During the three and six months ended June 30, 2019, we recognized Income from discontinued operations, net operating losses in U.S. federal, stateof tax of $1,854.7 million and certain foreign jurisdictions. $1,685.1 million, respectively, related to the separation of our domestic and international outdoor advertising businesses, which were previously reported as the Americas outdoor and International outdoor segments prior to the Separation.
iHM Results of Operations
Our iHM operating results were as follows:Net Income (Loss) Attributable to the Company

(In thousands)Three Months Ended
September 30,		 %
Change		 Nine Months Ended
September 30,		 
%
Change
 2017 2016  2017 2016 
Revenue$859,531
 $857,099
 0.3% $2,501,084
 $2,463,899
 1.5%
Direct operating expenses265,795
 229,668
 15.7% 773,327
 704,097
 9.8%
SG&A expenses287,676
 268,612
 7.1% 894,669
 812,344
 10.1%
Depreciation and amortization58,089
 60,691
 (4.3)% 174,946
 182,506
 (4.1)%
Operating income$247,971
 $298,128
 (16.8)% $658,142
��$764,952
 (14.0)%
Three Months
iHM revenue increased $2.4        Net loss attributable to the Company decreased $11,534.6 million to $197.3 million during the three months ended SeptemberJune 30, 20172020 compared to the same period of 2016, with growth in national and digital revenue being partially offset by lower local revenue. National revenue grew due to an increase in national trade and barter, largely relatedNet income attributable to the iHeartMedia Music Festival, as well as increased national sales initiatives and investments, including our programmatic buying platforms, primarily offset by a decrease in national traffic and weather revenue. Local revenue decreased as a resultCompany of lower spot revenue, partially offset by an increase in local trade and barter.
iHM direct operating expenses increased $36.1$11,337.3 million during the three months ended SeptemberJune 30, 2017 compared to the same period of 2016 primarily driven by a $33.8 million prior year benefit resulting from the renegotiation of certain contracts. iHM SG&A expenses increased $19.1 million during the three months ended September 30, 2017 compared to the same period of 2016 primarily due to higher trade and barter expenses and higher variable expenses, including sales activation costs.
Nine Months
iHM revenue increased $37.2 million during the nine months ended September 30, 2017 compared to the same period of 2016, with growth in national revenue and other revenue being partially offset by lower local revenue. National revenue grew


due to an increase in national trade and barter, as well as increased sales in response to our national investments, including our programmatic buying platforms, primarily offset by a decrease in national traffic and weather revenue. Other revenue increased partially as a result of higher talent appearance fees. Local revenue decreased2019, primarily as a result of lower spot revenue, partially offset by an increasethe $9.5 billion gain from Reorganization items net related to the Chapter 11 Cases in local tradethe 2019 period, the $1.9 billion gain on disposal of our Outdoor business in the 2019 period and barter. due to the other factors discussed above.
iHM direct operating expenses increased $69.2
Net loss attributable to the Company decreased $13,109.0 million to $1,886.1 million during the ninesix months ended SeptemberJune 30, 20172020 compared to Net income attributable to the same periodCompany of 2016 primarily driven by a $33.8 million prior year benefit resulting from the renegotiation of certain contracts, as well as higher content and programming costs, including talent fees and music license fees. iHM SG&A expenses increased $82.3$11,222.9 million during the ninesix months ended SeptemberJune 30, 2017 compared2019, primarily as a result of the $9.5 billion gain from Reorganization items net related to the sameChapter 11 Cases in the 2019 period, of 2016 primarily due to higher trade and barter expenses, investments in national and digital sales capabilities and higher variable expenses, including sales activation costs and commissions.
Americas Outdoor Advertising Results of Operations
Our Americas outdoor operating results were as follows:
(In thousands)Three Months Ended
September 30,		 %
Change		 Nine Months Ended
September 30,		 
%
Change
 2017 2016  2017 2016 
Revenue$316,587
 $322,997
 (2.0)% $919,967
 $931,058
 (1.2)%
Direct operating expenses141,609
 142,989
 (1.0)% 427,181
 421,039
 1.5%
SG&A expenses54,689
 54,500
 0.3% 165,538
 167,660
 (1.3)%
Depreciation and amortization47,035
 47,242
 (0.4)% 137,689
 140,883
 (2.3)%
Operating income$73,254
 $78,266
 (6.4)% $189,559
 $201,476
 (5.9)%
Three Months
Americas outdoor revenue decreased $6.4 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $0.9 million impact from movements in foreign exchange rates, Americas outdoor revenue decreased $7.3 million during the three months ended September 30, 2017 compared to the same period of 2016. The decrease in revenue is primarily due to a $4.2 million decrease in revenue resulting from the sale$1.7 billion gain on disposal of our Canadian outdoorOutdoor business higher revenue in the prior year2019 period and due to the 2016 Olympicsother factors discussed above.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,Three Months Ended June 30,
2020201920192019
Operating income (loss)$(159,087) $133,688  $47,891  $181,579  
Depreciation and amortization(1)
103,347  59,383  14,544  73,927  
Impairment charges5,378  —  —  —  
Other operating (income) expense, net506  (3,246) 127  (3,119) 
Share-based compensation expense(2)
4,218  3,039  105  3,144  
Restructuring and reorganization expenses16,355  1,889  5,430  7,319  
Adjusted EBITDA(3)
$(29,283) $194,753  $68,097  $262,850  

(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,Six Months Ended June 30,
2020201920192019
Operating income (loss)$(1,889,866) $133,688  $67,040  $200,728  
Depreciation and amortization(1)
200,115  59,383  52,834  112,217  
Impairment charges1,733,235  —  91,382  91,382  
Other operating (income) expense, net1,572  (3,246) 154  (3,092) 
Share-based compensation expense(2)
8,843  3,039  498  3,537  
Restructuring and reorganization expenses57,157  1,889  13,241  15,130  
Adjusted EBITDA(3)
$111,056  $194,753  $225,149  $419,902  
43


Reconciliation of Net (Income) Loss to EBITDA and Adjusted EBITDA
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,Three Months Ended June 30,
2020201920192019
Net income (loss)$(197,317) $38,793  $11,300,714  $11,339,507  
Income from discontinued operations, net of tax—  —  (1,854,677) (1,854,677) 
Income tax (benefit) expense(43,742) 16,003  100,289  116,292  
Interest expense (income), net81,963  69,711  (400) 69,311  
Depreciation and amortization(1)
103,347  59,383  14,544  73,927  
EBITDA$(55,749) $183,890  $9,560,470  $9,744,360  
Reorganization items, net—  —  (9,497,944) (9,497,944) 
Gain on investments, net(1,280) —  —  —  
Other expense (income), net1,258  9,157  (150) 9,007  
Equity in loss of nonconsolidated affiliates31  24  59  83  
Impairment charges5,378  —  —  —  
Other operating (income) expense, net506  (3,246) 127  (3,119) 
Share-based compensation expense(2)
4,218  3,039  105  3,144  
Restructuring and reorganization expenses16,355  1,889  5,430  7,319  
Adjusted EBITDA(3)
$(29,283) $194,753  $68,097  $262,850  

(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,Six Months Ended June 30,
2020201920192019
Net income (loss)$(1,886,053) $38,793  $11,165,113  $11,203,906  
Income from discontinued operations, net of tax—  —  (1,685,123) (1,685,123) 
Income tax (benefit) expense(194,253) 16,003  39,095  55,098  
Interest expense (income), net172,052  69,711  (499) 69,212  
Depreciation and amortization(1)
200,115  59,383  52,834  112,217  
EBITDA$(1,708,139) $183,890  $9,571,420  $9,755,310  
Reorganization items, net—  —  (9,461,826) (9,461,826) 
Loss on investments, net8,675  —  10,237  10,237  
Other (income) expense, net9,118  9,157  (23) 9,134  
Equity in loss of nonconsolidated affiliates595  24  66  90  
Impairment charges1,733,235  —  91,382  91,382  
Other operating (income) expense, net1,572  (3,246) 154  (3,092) 
Share-based compensation expense(2)
8,843  3,039  498  3,537  
Restructuring and reorganization expenses57,157  1,889  13,241  15,130  
Adjusted EBITDA(3)
$111,056  $194,753  $225,149  $419,902  
44

(1)Increase in BrazilDepreciation and amortization is driven by the exchangeapplication of outdoor marketsfresh start accounting, resulting in the first quartersignificantly higher value of 2017. This was partially offset by increased digital revenue fromour tangible and intangible assets.
(2)Increase in Share-based compensation expense is due to our new equity compensation plan entered into in connection with our Plan of Reorganization.
(3)We define Adjusted EBITDA as consolidated Operating income (loss) adjusted to exclude restructuring and existing airport contracts.
Americas outdoor directreorganization expenses included within Direct operating expenses, decreased $1.4 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $0.5 million impact from movements in foreign exchange rates, Americas outdoor direct operating expenses decreased $1.9 million during the three months ended September 30, 2017 compared to the same period of 2016. The decrease was driven by a $3.6 million decrease in direct operating expenses resulting from the sale of our Canadian outdoor market and lower variable expenses due to the 2016 Olympics in Brazil, partially offset by higher fixed site lease expenses. Americas outdoor SG&A expenses, increased $0.2 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $0.2 million impact from movements in foreign exchange rates, Americas outdoor SG&ACorporate expenses were flat during the three months ended September 30, 2017 compared to the same period of 2016.
Nine Months
Americas outdoor revenue decreased $11.1 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $2.7 million impact from movements in foreign exchange rates, Americas outdoor revenue decreased $13.8 million during the nine months ended September 30, 2017 compared to the same period of 2016. The decrease in revenue was primarily due to a decrease in print display revenues,and share-based compensation expenses included within Corporate expenses, as well as the $10.9 million impact resultingfollowing 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 the salesdiscontinued operations, net of non-strategic outdoor marketstax, Income tax (benefit) expense, Interest expense (income), net, Depreciation and amortization, Reorganization items, net, (Gain) Loss on investments, net, Other (income) expense, net, Equity in loss of nonconsolidated affiliates, net, Impairment charges, Other operating (income) expense, net, Share-based compensation expense, 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 first quarterview of 2016management, 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 the saleforecasting 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 Canadianoperational 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.

Reconciliation of Cash provided by operating activities from continuing operations to Free cash flow from continuing operations
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Three Months Ended June 30,Period from May 2, 2019 through June 30,Period from April 1, 2019 through May 1,Three Months Ended June 30,
2020201920192019
Cash provided by (used for) operating activities from continuing operations$11,369  $83,201  $(144,171) $(60,970) 
Purchases of property, plant and equipment by continuing operations(17,882) (17,435) (13,244) (30,679) 
Free cash flow from (used for) continuing operations(1)
$(6,513) $65,766  $(157,415) $(91,649) 

45

(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,Six Months Ended June 30,
2020201920192019
Cash provided by (used for) operating activities from continuing operations$102,909  $83,201  $(7,505) $75,696  
Purchases of property, plant and equipment by continuing operations(39,546) (17,435) (36,197) (53,632) 
Free cash flow from (used for) continuing operations(1)
$63,363  $65,766  $(43,702) $22,064  
(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 operations in the third quarterCompany's Consolidated Statements of 2017,Cash Flows. We use Free Cash Flow, among other measures, to evaluate the Company’s liquidity and the exchange of outdoor markets in the first quarter of 2017. This was partially offset by increased digital revenuesits ability to generate cash flow. We believe that Free Cash Flow is meaningful to investors because we review cash flows generated from new and existing airport contracts and deployments of new digital billboards.
Americas outdoor direct operating expenses increased $6.1 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $1.5 million impact from movements in foreign exchange rates, Americas outdoor direct operating expenses increased $4.6 million during the nine months ended September 30, 2017 compared to the same period of 2016. The increase in direct operating expenses was driven by higher site lease expenses related to new and existing airport contracts and print displays, and the impact of a $2.9 million early termination lease payment received in 2016, partially offset by lower expenseoperations after taking into consideration capital expenditures due to the $8.7 million impact resulting from the salesfact that these expenditures are considered to be a necessary component of non-strategic outdoor marketsongoing operations. In addition, we believe that Free Cash Flow helps improve investors' ability to compare our liquidity with other companies. Since Free Cash Flow is not a measure calculated in the first quarter


accordance with GAAP, it should not be considered in isolation of, 2016or as a substitute for, Cash provided by operating activities and the salemay not be comparable to similarly titled measures employed by other companies. Free Cash Flow is not necessarily a measure of our Canadian business in the third quarter of 2017, and the exchange of outdoor markets in the first quarter of 2017. Americas outdoor SG&A expenses decreased $2.1 million during the nine months ended September 30, 2017 comparedability to the same period of 2016. Excluding the $0.9 million impact from movements in foreign exchange rates, Americas outdoor SG&A expenses decreased $3.0 million during the nine months ended September 30, 2017 compared to the same period of 2016. The decrease in SG&A expenses was primarily due to lower bad debt expense and the $1.2 million impact resulting from the sales of non-strategic outdoor markets in the first quarter of 2016 and the sale offund our Canadian business in the third quarter of 2017, and the exchange of outdoor markets in the first quarter of 2017.cash needs.
International Outdoor Advertising Results of Operations
Our International outdoor operating results were as follows:
(In thousands)Three Months Ended
September 30,		 %
Change		 Nine Months Ended
September 30,		 
%
Change
 2017 2016  2017 2016 
Revenue$328,502
 $346,224
 (5.1)% $942,167
 $1,035,263
 (9.0)%
Direct operating expenses214,491
 219,261
 (2.2)% 607,023
 645,199
 (5.9)%
SG&A expenses73,708
 71,664
 2.9% 204,531
 220,872
 (7.4)%
Depreciation and amortization32,886
 37,018
 (11.2)% 95,149
 113,075
 (15.9)%
Operating income$7,417
 $18,281
 (59.4)% $35,464
 $56,117
 (36.8)%
Three Months
International outdoor revenue decreased $17.7 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $9.3 million impact from movements in foreign exchange rates, International outdoor revenue decreased $27.0 million during the three months ended September 30, 2017 compared to the same period of 2016. The decrease in revenue is due to a $35.2 million decrease in revenue resulting from the sale of our business in Australia in 2016. This was partially offset by growth across other markets including China, Spain, Switzerland and the United Kingdom, primarily from new contracts and digital expansion.
International outdoor direct operating expenses decreased $4.8 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $6.8 million impact from movements in foreign exchange rates, International outdoor direct operating expenses decreased $11.6 million during the three months ended September 30, 2017 compared to the same period of 2016. The decrease was driven by a $20.1 million decrease in direct operating expenses resulting from the 2016 sale of our business in Australia, partially offset by higher site lease expense in certain countries experiencing revenue growth. International outdoor SG&A expenses increased $2.0 million during the three months ended September 30, 2017 compared to the same period of 2016. Excluding the $2.4 million impact from movements in foreign exchange rates, International outdoor SG&A expenses decreased $0.4 million during the three months ended September 30, 2017 compared to the same period of 2016. The decrease in SG&A expenses was primarily due to a $6.8 million decrease resulting from the sale of our business in Australia, partially offset by increases in bad debt expense primarily related to two specific accounts and employee-related expenses.
Nine Months
International outdoor revenue decreased $93.1 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $20.8 million impact from movements in foreign exchange rates, International outdoor revenue decreased $72.3 million during the nine months ended September 30, 2017 compared to the same period of 2016. The decrease in revenue is due to a $106.5 million decrease in revenue resulting from the sale of our businesses in Australia and Turkey in 2016. This was partially offset by growth across other markets including Spain, the United Kingdom, Switzerland and China, primarily from new contracts and digital expansion.
International outdoor direct operating expenses decreased $38.2 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $12.8 million impact from movements in foreign exchange rates, International outdoor direct operating expenses decreased $25.4 million during the nine months ended September 30, 2017 compared to the same period of 2016. The decrease was driven by a $64.5 million decrease in direct operating expenses resulting from the 2016 sales of our businesses in Australia and Turkey, partially offset by higher site lease and production expenses in countries experiencing revenue growth. International outdoor SG&A expenses decreased $16.3 million during the nine months ended September 30, 2017 compared to the same period of 2016. Excluding the $3.8 million impact from movements in foreign exchange rates, International outdoor SG&A expenses decreased $12.5 million during the nine months ended September 30, 2017


compared to the same period of 2016. The decrease in SG&A expenses was primarily due to a $20.6 million decrease resulting from the sale of our businesses in Australia and Turkey, partially offset by higher bad debt expense and higher spending related to growth in certain countries, as well as higher spending on strategic efficiency initiatives.
Reconciliation of Segment Operating Income to Consolidated Operating Income
(In thousands)Three Months Ended
September 30,		 Nine Months Ended
September 30,
 2017 2016 2017 2016
iHM$247,971
 $298,128
 $658,142
 $764,952
Americas outdoor73,254
 78,266
 189,559
 201,476
International outdoor7,417
 18,281
 35,464
 56,117
Other7,261
 9,643
 13,713
 18,205
Other operating income, net(13,215) (505) 24,785
 219,768
Impairment charges(7,631) (8,000) (7,631) (8,000)
Corporate expense (1)
(86,752) (96,461) (261,006) (279,738)
Consolidated operating income$228,305
 $299,352
 $653,026
 $972,780
(1)Corporate expenses include expenses related to iHM, Americas outdoor, International outdoor and our Other category, as well as overall executive, administrative and support functions.
Share-Based Compensation Expense
WeHistorically, we had granted restricted shares of the Company's Class A common stock to certain key individuals. In connection with the effectiveness of our Plan of Reorganization, all unvested restricted shares were canceled.
Pursuant to the new equity incentive plan (the "Post-Emergence Equity Plan") we adopted in connection with the effectiveness of our Plan of Reorganization, we have granted restricted stock and CCOH has granted restricted stock, restricted stock units and options to purchase shares of CCOH'sthe Company's Class A common stock to certain key individuals.
Share-based compensation expenses are recorded in corporate expenses and were $3.5$4.2 million and $3.1 million for the three months ended June 30, 2020 and 2019, respectively, and $8.8 million and $3.5 million for the threesix months ended SeptemberJune 30, 20172020 and 2016, respectively, and $9.0 million and $10.4 million for the nine months ended September 30, 2017 and 2016,2019, respectively.
As of SeptemberJune 30, 2017,2020, there was $20.3$48.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vestwith vesting based on service conditions. This cost is expected to be recognized over a weighted average period of approximately 2.83 years.  In addition, as of September 30, 2017, there was $26.6 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on market performance and service conditions.  This cost will be recognized when it becomes probable that the performance condition will be satisfied.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
The following discussion highlights cash flow activities during the nine months ended September 30, 2017periods presented:
(In thousands)Successor CompanySuccessor CompanyPredecessor CompanyNon-GAAP Combined
Six Months Ended June 30,Period from May 2, 2019 through June 30,Period from January 1, 2019 through May 1,Six Months Ended June 30,
2020201920192019
Cash provided by (used for):
Operating activities$102,909  $83,201  $(40,186) $43,015  
Investing activities$(50,681) $(17,787) $(261,144) $(278,931) 
Financing activities$65,512  $(684) $(55,557) $(56,241) 
Free Cash Flow(1)
$63,363  $65,766  $(43,702) $22,064  

(1) For a definition of Free cash flow from continuing operations and 2016, respectively:
(In thousands)Nine Months Ended September 30,
 2017 2016
Cash provided by (used for):   
Operating activities$(558,717) $(272,578)
Investing activities$(144,980) $366,312
Financing activities$137,066
 $(322,583)


a reconciliation to Cash provided by operating activities from continuing operations, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities from continuing operations to Free cash flow from continuing operations” in this MD&A.
Operating Activities
Cash used forprovided by operating activities was $558.7 million duringfor the ninesix months ended SeptemberJune 30, 20172020 was $102.9 million compared to $272.6$43.0 million of cash used forprovided by operating activities duringin the ninesix months ended SeptemberJune 30, 2016.  The increase in cash used for2019. 
Cash provided by operating activities isfrom continuing operations increased from $75.7 million in the six months ended June 30, 2019 to $102.9 million in the six months ended June 30, 2020 primarily attributed to lower operating income as well asa result of changes in working capital balances, particularly accounts receivable, as well as accounts payable and accrued expenses, which were affected by slower collections, and prepaid assets, partially offset by accounts payable due to the timing of payments. CashIn addition, we paid for interest$196.3 million during the ninesix months ended SeptemberJune 30, 20172019 in relation to Reorganization items, net. The increase in cash provided by operating activities was $1,426.4offset by a decrease in Revenue driven by the decline in advertising spend resulting from the economic slow-down impacted by the COVID-19 pandemic. In addition, cash interest payments made by continuing operations increased $181.2 million as a result of interest payments on our debt issued upon our emergence compared to $1,434.5 million paid duringpre-petition interest payments made in the nine months ended September 30, 2016.prior year.  The Company ceased paying interest on long-term debt classified as Liabilities subject to compromise after the March 14, 2018 petition date. 

Investing Activities

Cash used for investing activities of $145.0$50.7 million during the ninesix months ended SeptemberJune 30, 2017 reflected $184.92020 primarily reflects $39.5 million in cash used for capital expenditures, partially offset by net cash proceeds from the sale of assets of $71.3 million, which included net cash proceeds from the sale of our outdoor Indianapolis market of $43.1 million.expenditures. We spent $44.4$32.8 million for capital expenditures in our iHMAudio segment primarily related to IT infrastructure, $48.7$1.6 million in our Americas outdoorAudio & Media Services segment, primarily related to the construction of new advertising structures, such as digital boards, $83.9 million in our International outdoor segment primarily related to street furnitureacquired software and transit advertising structures, including digital displays, $0.5 million in our Other category and $7.4$5.1 million in Corporate primarily related to equipment and software purchases.
Cash provided byused for investing activities of $366.3$278.9 million during the ninesix months ended SeptemberJune 30, 2016 reflected net cash proceeds from the sale of nine non-strategic outdoor markets including Cleveland and Columbus, Ohio, Des Moines, Iowa, Ft. Smith, Arkansas, Memphis, Tennessee, Portland, Oregon, Reno, Nevada, Seattle, Washington and Wichita, Kansas of $592.32019 primarily reflects $222.4 million in cash and certain advertising assets in Florida. Those sale proceeds were partially offset by $201.0used for investing activities from discontinued operations. In addition, we used $53.6 million used for capital expenditures. We spent $46.3$44.7 million for capital expenditures in our iHMAudio segment primarily related to leasehold improvements and IT infrastructure, $47.8$2.1 million in our Americas outdoorAudio & Media Services segment, primarily related to the construction of new advertising structures, such as digital displays, $97.5 million in our International outdoor segment primarily related to billboardacquired software and street furniture advertising structures, $1.8 million in our Other category and $7.7$6.8 million in Corporate primarily related to equipment and software purchases.

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Financing Activities
Cash provided by financing activities of $137.1$65.5 million during the ninesix months ended SeptemberJune 30, 20172020 primarily resulted from proceeds from long-term debt issued by one of our international subsidiaries, as well as borrowingsthe $350.0 million draw on our receivables-based credit facility. These proceeds wereABL Facility, partially offset by dividends paid to non-controlling interests, which represents the portion$150.0 million prepayment on our Term Loan Facility and repayments of $115.0 million of amounts drawn under the dividends paid by CCOH in February 2017 to parties other than our subsidiaries that own CCOH stock, and a payment under our receivables-based credit facility.ABL Facility.
Cash used for financing activities of $322.6was $56.2 million during the ninesix months ended SeptemberJune 30, 20162019 primarily resulted from the purchasepayment by iHeartCommunications to CCOH as CCOH's recovery of iHeartCommunications' 10.0% Senior Notes due 2018 for an aggregate purchase priceits claims under the Due from iHeartCommunications Note, partially offset by $60.0 million in proceeds received from the issuance of $222.2 million and dividends paid to non-controlling interests.the iHeart Operations Preferred Stock.
Anticipated Cash Requirements
Our primary sources of liquidity are cash on hand, which consisted of $517.7 million as of June 30, 2020, cash flow from operations and borrowing capacity under iHeartCommunications' domestic receivables-based credit facility, subjectour $450.0 million ABL Facility. On March 13, 2020, iHeartCommunications, Inc. (“iHeartCommunications”), our indirect wholly-owned subsidiary, borrowed $350.0 million principal amount under our $450.0 million ABL Facility as a precautionary measure to preserve iHeartCommunications’ financial flexibility in light of the limitations containeduncertainty in iHeartCommunications' material financing agreements, and cashthe global economy resulting from liquidity-generating transactions.the COVID-19 pandemic. During the three months ended June 30, 2020, we repaid $115.0 million principal amount drawn under our ABL Facility. As of SeptemberJune 30, 2017, we had $286.4 million of cash and cash equivalents on our balance sheet, including $222.4 million of cash and cash equivalents held by our subsidiary, CCOH. Included in the cash held by CCOH is $206.1 million of cash held outside the U.S. It is our policy to permanently reinvest the earnings of our non-U.S. subsidiaries as these earnings are generally redeployed in those jurisdictions for operating needs and continued functioning of their businesses.  We have the ability and intent to indefinitely reinvest the undistributed earnings of consolidated subsidiaries based outside of the United States, except that excess cash from our foreign operations may be transferred to our operations in the United States if needed to fund operations in the United States, subject to the foreseeable cash needs of our foreign operations and the mutual agreement of us and CCOH.  If any excess cash held by our foreign subsidiaries is needed to fund operations in the United States, we could presently repatriate available funds without a requirement to accrue or pay U.S. taxes.  This is a result of significant deficits, as calculated for tax law purposes, in our foreign earnings and profits, which gives us flexibility to make future cash distributions as non-taxable returns of capital. 
As of September 30, 2017, we2020, iHeartCommunications had a borrowing base of $499.1$289.4 million under iHeartCommunications' receivables-based credit facility, had $365.0and utilization of $235.0 million ofin outstanding borrowings and had $49.1$41.2 million ofin outstanding letters of credit, resulting in $85.0$13.2 million of excess availability.  However, anyavailability, such availability being subject to further restrictions contained within the credit agreement governing the ABL Facility.

In July 2020, the Company issued $450.0 million of incremental term loans, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs. A portion of the proceeds from the issuance was used to repay the remaining balance outstanding under the ABL Facility of $235.0 million, with the remaining $190.6 million of the proceeds available for general corporate purposes. Following the repayment of all outstanding borrowings under iHeartCommunications' receivables-based credit facilitythe ABL Facility, due to restrictions contained primarily in our mandatorily redeemable preferred stock agreements, we had the ability to borrow approximately $160 million under the ABL Facility. Our cash balance was $517.7 million as of June 30, 2020. Together with our adjusted cash balance1 as of June 30, 2020 of approximately $708 million and our borrowing capacity under the ABL Facility, our total available liquidity2 was approximately $868 million. We will have the option to redeem the preferred stock beginning on May 1, 2022, or at an earlier date under certain circumstances in accordance with the documents governing the preferred stock instrument. We cannot determine the full extent of COVID-19’s impact on our business at this time and we are further limited bymonitoring this rapidly evolving situation closely. While the terms containedchallenges that COVID-19 has created for advertisers and consumers have had a significant impact on our revenue for the three and six months ended June 30, 2020 and has created a business outlook that is less clear in iHeartCommunications' material financing agreements.the near term, we believe that we have sufficient liquidity to fund our operations for at least the next twelve months.



OurWe expect that our primary anticipated uses of liquidity arewill be to fund our working capital, debt service,make interest payments, fund capital expenditures and maintain operations in light of the COVID-19 pandemic and other obligations. At September 30, 2017, we had debt maturities totaling $366.9 million, $308.5 million (net of $277.1 millionThese other obligations include dividend payments to be due to certain subsidiariesthe holder of iHeartCommunications) and $8,368.9 millioniHeart Operations Preferred Stock, the terms of which are further described in 2017, 2018 and 2019, respectively.  A substantial amount of our cash requirements are for debt service obligations.  We anticipate having approximately $344.6 million of cash interest payment obligations during the three months ending December 31, 2017.  Our significant interest payment obligations reduce our financial flexibility, make us more vulnerableNote 6, Long-term Debt to changes in operating performance and economic downturns, reduce our liquidity and negatively affect iHeartCommunications' ability to obtain additional financing in the future.
During the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This update provides U.S. GAAP guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and about related footnote disclosures. We adopted this standard for the year ended December 31, 2016. Under this standard, we are required to evaluate whether there is substantial doubt about our ability to continue as a going concern each reporting period, including interim periods.
In evaluating our ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about our ability to continue as a going concern for a period of 12 months following the date our financial statements were issued (November 8, 2017). Management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our conditional and unconditional obligations due before November 8, 2018.
A substantial amount of our cash requirements are for debt service obligations. Although we have generated operating income in excess of $1.0 billion in each of the years ended December 31, 2016 and 2015, we incurred net losses and had negative cash flows from operations for each of these years as a result of significant cash interest payments arising from our substantial debt balance. For the nine months ended September 30, 2017, we used cash of $558.7 million for operating activities, which included cash paid for interest of $1,426.4 million. Our current forecast indicatesherein. We anticipate that we will continue to incur net losses and generate negative cash flows from operating activities as a result of our indebtedness and significant related interest expense. At September 30, 2017, the Company had debt maturities totaling $366.9 million, $308.5 million (net of $277.1 million due to certain of our subsidiaries) and $8,368.9 million in 2017, 2018 and 2019, respectively. In October 2017, we exchanged $45.0 million principal amount of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $45.0 million principal amount of 10.0% Senior Notes due 2018 that were held by unaffiliated third parties. After the exchanges, our debt maturities in the next 12 months include, (i) $365.0 million outstanding under iHeartCommunications' receivables-based credit facility, which matures on December 24, 2017, (ii) $51.5have approximately $84 million of 10% Senior Notes due January 15, 2018, (iii) $175.0 million of 6.875% Senior Notes due June 15, 2018 and (iv) $24.8 million of contractual AHYDO catch-up payments to be made on iHeartCommunications' 14% Senior Notes due 2021 on the interest payment due on August 1, 2018.Our forecast includes approximately $1.8 billion in cash interest payments in the next 12 months,third quarter of which $344.62020 and approximately $170 million is payableof cash interest payments in the fourth quarterremainder of 20172020.

As a result of certain favorable tax provisions in the Coronavirus Aid, Relief and $548.2Economic Security (“CARES”) Act, we expect our 2020 cash income tax payments to be insignificant. As a result of the provisions regarding interest deductions and the deferral of certain employment taxes into future periods, cash tax payments in 2020 are expected to be approximately $100 million is payablelower than they would been absent these favorable provisions.

Over the past ten years, we have transitioned our Audio business from a single platform radio broadcast operator to a company with multiple platforms, including podcasting, networks and live events. Early in the first quarter of 2018. In addition, in certain circumstances, a committee2020, we implemented our modernization initiatives to take advantage of the CCOH boardsignificant investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies. We have also invested in numerous technologies and businesses to increase the competitiveness of directors formedour inventory with our advertisers and our audience.

1 Adjusted for the specific purpose of monitoring the Intercompany Note (the “CCOH Intercompany Note Committee”) has the non-exclusive authority to demand payments under the Intercompany Note, as long as the CCOH board of directors declares a simultaneous dividend equal to the amount so demanded.  As of November 8, 2017, the CCOH Intercompany Note Committee has the right pursuant to the termsimpact of the settlementamendment entered into in July 2020 to issue $450.0 million of incremental term loan commitments, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs. A portion of the derivative litigation filed by CCOH’s stockholders regardingproceeds from the Intercompany Note but notissuance was used to repay the obligation, to make a demand on the Intercompany Note. If the CCOH Intercompany Note Committee exercises this right to demand a full repayment of the Intercompany Note and the CCOH board of directors declares a simultaneous dividend, based on theremaining balance of the Intercompany Note outstanding at September 30, 2017, approximately $110.4 million would be payable to the public stockholders of CCOH. If we are unable to refinance the amounts outstanding under the receivables-based credit facility,ABL Facility of $235.0 million, with the 10% Senior Notes due January 15, 2018 and/orremaining $190.6 million of the 6.875% Senior Notes due June 15, 2018proceeds available for general corporate purposes.
2 Total available liquidity defined as cash and take other stepscash equivalents plus available borrowings under the ABL Facility. We use total available liquidity to create additional liquidity, forecastedevaluate our capacity to access cash flows are not sufficient for us to meet our obligations including upcoming interest payments and maturities on our outstanding debt, as they become duefund operations.
48

In response to the COVID-19 pandemic, in an effort to further strengthen the ordinary course of business for aCompany's financial flexibility and efficiently manage through the period of 12 monthseconomic slowdown and uncertainty, the Company is continuing to take the following November 8, 2017. As discussed below,measures, which are expected to generate approximately $200 million in operating cost savings in 2020:
•Substantial reduction in certain operating expenses, such as suspension of new employee hiring, travel and entertainment expenses, 401(k) matching expenses, consulting fees and other discretionary expenses.
•Reduction in planned capital expenditures to a level that we have plansbelieve will still enable the Company to reducemake key investments to continue our principalstrategic initiatives related to Smart Audio and interest obligationsDigital, including podcasting.
•Reduction in compensation for senior management and to create additional liquidity.other employees of the Company, including a 100% reduction of the Company's Chief Executive Officer's annual base salary and bonus.
We•Implementation of a furlough for certain employees that are in advanced negotiations with potential lenders to refinance the amounts outstanding under iHeartCommunications' receivables-based credit facility and currently expect to refinance the amounts outstanding under that facility prior to its maturity. In addition, we are taking actions to maximize cash available to meet our obligations as they become due in the ordinary course of business. non-essential at this time.
In addition, as more fully describeda result of the decrease in Note 3revenue as a result of the COVID-19 pandemic, certain variable expenses including event production costs and sales commissions, as well as other variable compensation, showed a corresponding decrease.
We believe that our cash balance, our cash flow from operations and availability under our ABL Facility provide us with sufficient liquidity to fund our core operations, maintain key personnel and meet our other material obligations. In addition, none of our financial statements,long-term debt includes maintenance covenants that could trigger early repayment. We fully appreciate the unprecedented challenges posed by the COVID-19 pandemic, however, we launched notes exchange offersremain confident in our business, our employees and term loan offers in March 2017, which notes exchange offers and term loan offers remain open as of November 8, 2017.our strategy. We have engaged in discussions with many of our lenders and noteholders regarding the terms of the global exchange offers and the term loan offers, which have been revised since launch and remain subject to substantial further revision, but no agreement has been reached with respect to those discussions and the discussions remain ongoing. These actions are intended to mitigate those


conditions which raise substantial doubt aboutbelieve that our ability to continue as a going concern for a period of 12 months following November 8, 2017.
While we continue to work toward completing the notes exchange offersgenerate cash flow from operations from our business initiatives, our current cash on hand and the term loan offers or other similar transactions, refinancing the amounts outstandingavailability under the receivables-based credit facilityABL Facility will provide sufficient resources to fund and takingoperate our business, fund capital expenditures and other actions to create additional liquidity, there is no assurance that the notes exchange offersobligations and the term loan offers or other similar transactions will be completed, that the amounts outstanding under the receivables-based credit facility will be refinanced or that we will be able to create additional liquidity. Our ability to meetmake interest payments on our obligations as they become due in the ordinary course of businesslong-term debt for at least the next 12 months will depend on our ability to achieve forecasted results, our ability to conserve cash, our ability to refinance the amounts outstanding under iHeartCommunications' receivables-based credit facility, our ability to successfully complete the notes exchange offers and the term loan offers or other similar transactions and achieve sufficient cash interest savings therefrom and our ability to complete other liquidity-generating transactions. Based on the uncertaintymonths. If these sources of achieving these actions and the significance of the forecasted future negative cash flows resulting from our substantial debt balance, including anticipated future cash interest payments (including interest due in the fourth quarter of 2017 and in 2018) and the maturities of the $365.0 million in current borrowings under iHeartCommunications' receivables-based credit facility that matures December 24, 2017, the $51.5 million aggregate principal amount of 10% Senior Notes due January 15, 2018, the $175.0 million aggregate principal amount of 6.875% Senior Notes due June 15, 2018 and the $24.8 million of contractual AHYDO catch-up paymentsliquidity need to be made on iHeartCommunications' 14% Senior Notes due 2021 beginning with the interest payment due on August 1, 2018, management has determined that there is substantial doubt as to our ability to continue as a going concern for a period of 12 months following November 8, 2017.
If we are unable to complete any of the actions described in the paragraph above, or if there are material adverse developments in our business, results of operations or liquidity, we mayaugmented, additional cash requirements would likely be forced to further reduce or delay our business activities and capital expenditures, sell material assets, seek additional capital or file for bankruptcy court protection. We cannot assure you that we would be able to accomplish any of these actions on a timely basis or on satisfactory terms, if at all.
In connection with the cash management arrangements for CCOH, iHeartCommunications maintains an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the "Intercompany Note"), which matures on December 15, 2017. As of September 30, 2017, the balance of the Note was $1,051.3 million, all of which is payable on demand. While we intend to extend the maturity of the Intercompany Note prior to its maturity, the principal amount outstanding under the Intercompany Note is subject to demand by CCOH or the CCOH Intercompany Note Committee. See "--CCOH Dividends" below.
The covenants in iHeartCommunications' senior secured credit facilities include a requirement that we receive an opinion from our auditors in connection with our year-end audit that is not subject to a “going concern” or like qualification or exception. Even if we are able to successfully refinance the amounts outstanding under iHeartCommunications' receivables-based credit facility and manage our liquidity challengesfinanced through the endissuance of 2017, if we are unable to improve our liquidity forecast for 2018 and refinancedebt or extend a significant portion of our substantial 2019 debt maturities prior to the completion of the audit of our 2017 financial statements, we anticipate that our auditor’s year-end opinion will contain a “going concern” qualification, and, if we are unable to obtain a waiver or amendment of the covenant in the senior secured credit facilities that requires us to deliver an unqualified auditor’s opinion, it will trigger a default under the senior secured credit facilities. We cannot assure youequity securities; however, there can be no assurances that we will be able to obtain suchadditional debt or equity financing on acceptable terms or at all in the future.
On February 3, 2020, iHeartCommunications made a waiver$150.0 million prepayment using cash on hand and entered into an agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of 3.00%, or amendment.
Except as set forth below under "Non-Paymentthe Base Rate (as defined in the Credit Agreement plus a margin of $57.1 Million of iHeartCommunications' Legacy Notes Held by an Affiliate," we were in compliance with the2.00% and to modify certain covenants contained in iHeartCommunications' material financing agreements as of September 30, 2017, including the maximum consolidated senior secured net debt to consolidated EBITDA limitation contained in iHeartCommunications' senior secured credit facilities. However, our future results are subject to significant uncertainty and there can be no assurance that we will be able to maintain compliance with these covenants. Our ability to comply with these covenants in the future may be affected by events beyond our control, including the uncertainties described above and prevailing economic, financial and industry conditions. The breach of any covenants set forth in iHeartCommunications' financing agreements would result in a default thereunder. An event of default would permit the lenders under a defaulted financing agreement to declare all indebtedness thereunder to be immediately due and payable. Moreover, the lenders under the receivables-based credit facility under iHeartCommunications' senior secured credit facilities would have the option to terminate their commitments to make further extensions of credit thereunder. If we are unable to repay iHeartCommunications' obligations under any secured credit facility, the lenders could proceed against any assets that were pledged to secure such facility. In addition, a default or acceleration under any of iHeartCommunications' material financing agreements could cause a default under other of our obligations that are subject to cross-default and cross-acceleration provisions. The threshold amount for a cross-default under the senior secured credit facilities and the indentures governing our outstanding bonds is $100.0 million. The default resulting from non-payment of the $57.1 millionCredit Agreement.


of 5.50% Senior Notes described below is below the $100.0 million cross-default threshold in iHeartCommunications' debt documents but will be included in any determination as to whether that threshold has been met so long as that default is continuing.
Recent Liquidity-Generating Transactions
On February 7, 2017,July 16, 2020, iHeartCommunications completedentered into an exchange offeradditional amendment to the Credit Facility (“Amendment No. 2”) to provide for $450.0 million, resulting in net proceeds of $476.4$425.8 million, principal amount of its 10.0% Senior Notes due 2018 for $476.4 million principal amount of newly-issued 11.25% Priority Guarantee Notes due 2021. Of the $476.4 million principal amount of 11.25% Priority Guarantee Notes due 2021 issued in the exchange offer, $241.4 million principal amount was issued to subsidiaries of iHeartCommunications that participated in the exchange offer.
On February 9, 2017, CCOH declared a special dividend of $282.5 million using aafter original issue discount and debt issuance costs. A portion of the proceeds from the salesissuance was used to repay the remaining balance outstanding under the ABL Facility of certain non-strategic U.S. outdoor markets and of our Australia outdoor business. On February 23, 2017, we received 89.9% of that dividend, or approximately $254.0$235.0 million, with the remaining 10.1%$190.6 million of the proceeds available for general corporate purposes. The incremental term loans issued pursuant to Amendment No. 2 have an interest rate of 4.00% for Eurocurrency Rate Loans and 3.00% for Base Rate Loans (subject to a LIBOR floor of 0.75% and Base Rate floor of 1.75%). Amendment No. 2 also modifies certain other provisions of the Credit Agreement.

In connection with the Separation and Reorganization, we entered into the following transactions which may require ongoing capital commitments:
Transition Services Agreement
Pursuant to the Transition Services Agreement between us, iHeartMedia Management Services, Inc. (“iHM Management Services”), or approximately $28.5 million, paidiHeartCommunications and CCOH, for one year from the Effective Date, we have agreed to public stockholders of CCOH. This transaction improved our liquidity positionprovide, CCOH with certain administrative and support services and other assistance which CCOH will utilize in the short term. We cannot assure you that we will enter into or consummate any liquidity-generating transactions, or thatconduct of its business as such transactions willbusiness was conducted prior to the Separation. As of June 30, 2020, most of these services have been successfully transitioned to CCOH. The Company continues to provide sufficient cash to satisfy our liquidity needs, and any such transactions, if consummated, could adversely affect us in other ways. Future liquidity-generating transactions could have the effect of further increasing our annual cash interest payment obligations, reducing our cash flow from operations or reducing cash available for capital expenditurescertain information systems and other business initiatives.
On July 10, 2017, a subsidiarylimited support services. CCOH has requested extensions of iHeartCommunications exchanged $15.6 million aggregate principal amount outstanding of 10.0% Senior Notes due 2018 that were held by an unaffiliated third partythe term for $15.6 million aggregate principal amount of its 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications.
On Julycertain individual services, primarily related to information systems, for one-month periods through August 31, 2017, iHeartCommunications borrowed an additional $60.0 million under its receivables-based credit facility.
On August 14, 2017, Clear Channel International B.V. ("CCIBV"), our indirect subsidiary, issued $150,000,000.0 million in aggregate principal amount of 8.75% Senior Notes due 2020 (the “New CCIBV Notes”). The New CCIBV Notes were issued as additional notes under the indenture governing CCIBV’s existing 8.75% Senior Notes due 2020 and were issued at a premium, which resulted in $156.0 million in proceeds.  The New CCIBV Notes mature on December 15, 2020 and bear interest at a ratemay request further one-month extensions of 8.75% per annum, payable semi-annually in arrears on June 15 and December 15 of each year.such services up to May 1, 2021.
In October 2017, a subsidiary of iHeartCommunications exchanged $45.0 million aggregate principal amount of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $45.0 million aggregate principal amount of 10.0% Senior Notes due 2018 that were held by unaffiliated third parties.
We have made andCCOH may interminate the future make repurchases and exchanges of indebtedness of iHeartCommunications. In addition, we frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue dispositions or acquisitions, which could be material.  iHeartCommunications' and its subsidiaries’ significant amount of indebtedness may limit our ability to pursue dispositions or acquisitions.  The terms of our existing or future debt agreements may also restrict our ability to engage in these transactions.
Non-Payment of $57.1 Million of iHeartCommunications Legacy Notes Held by an Affiliate
Our wholly-owned subsidiary, Clear Channel Holdings, Inc. ("CCH"), owns $57.1 million aggregate principal amount of our 5.50% Senior Notes due 2016 (the "5.50% Senior Notes"). On December 9, 2016, a special committee of our independent directors decided to not repay the $57.1 million principal amount of the 5.50% Senior Notes held by CCH when the notes matured on December 15, 2016 and on December 12, 2016, we informed CCH of that decision. CCH informed us on that date that, while it retains its right to exercise remedies under the indenture governing the 5.50% Senior Notes (the "legacy notes indenture") in the future, it does not currently intend to, and it does not currently intend to request that the trustee, seek to collect principal amounts due or exercise or request enforcement of any remedyTransition Services Agreement with respect to all or any individual service, in whole or in part, upon 30 days’ prior written notice, provided that any co-dependent services must be terminated concurrently. For
49

additional information, see Note 2, Discontinued Operations to the nonpaymentconsolidated financial statements located in Item 1 of such principal amount underthis Quarterly Report on Form 10-Q for a further description.
New Tax Matters Agreement
In connection with the legacy notes indenture. As a result, $57.1 millionSeparation, we entered into the New Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., CCH, CCOH and Clear Channel Outdoor, Inc., to allocate the responsibility of iHeartMedia and its subsidiaries, on the 5.50% Senior Notes remain outstanding. We repaidone hand, and CCOH and its subsidiaries, on the other, $192.9 millionfor the payment of 5.50% Senior Notes held by other holders,taxes arising prior and we intendsubsequent to, continue to pay interestand in connection with, the Separation.
The New Tax Matters Agreement requires that iHeartMedia and iHeartCommunications indemnify CCOH and its subsidiaries, and their respective directors, officers and employees, and hold them harmless, on the 5.50% Senior Notes held by CCH for so long as such notes continue to remain outstanding.
For as long as we have at least $500 million of legacy notes outstanding, including the $57.1 million of 5.50% Senior Notes currently held by CCH, we will not have an obligation to grantafter-tax basis, from and against certain additional security interests in favor of certain of our lenders and holders of our existing priority guarantee notes or the holders of our legacy notes under the "springing lien" described in the agreements governing that indebtedness, and the limitations existing with respecttax claims related to the existing security interests will remain in place until up to 60 days followingSeparation. In addition, the dateNew Tax Matters Agreement requires that CCOH indemnify iHeartMedia for certain income taxes paid by iHeartMedia on which not more than $500 million aggregate principal amountbehalf of the legacy notes remain outstanding.


Notes Exchange OffersCCOH and Term Loan Offers
On March 15, 2017, iHeartCommunications commenced exchange offers (the “notes exchange offers”) to exchange certain series of its outstanding debt securities (the “Existing Notes”) for new securities of the Company, iHeartCommunications and CC Outdoor Holdings, Inc., a wholly-owned subsidiary of the Company, and concurrent consent solicitations with respect to the terms of the Existing Notes. On March 15, 2017, the Company also commenced offers (the “term loan offers”) to amend its outstanding Term Loan D and Term Loan E borrowings under its senior secured credit facilities and/or to issue new securities of the Company, CC Outdoor Holdings, Inc., Broader Media, LLC and/or iHeartCommunications to the lenders depending on the scenario in which the notes exchange offers and the term loan offers close. The notes exchange offers were amended on April 14, 2017. Both the notes exchange offers and the term loan offers were open as of November 8, 2017. The terms of the notes exchange offers and the term loan offers have been revised and are subject to substantial further revision, and the offers may never be consummated, on the terms currently proposed or otherwise.subsidiaries.
Sources of Capital
As of SeptemberJune 30, 20172020 and December 31, 2016,2019, we had the following debt outstanding, net of cash and cash equivalents:
(In millions)Successor Company
June 30, 2020December 31, 2019
Term Loan Facility due 2026(1)(3)
$2,090.8  $2,251.3  
Asset-based Revolving Credit Facility due 2023(2)(3)
235.0  —  
6.375% Senior Secured Notes due 2026800.0  800.0  
5.25% Senior Secured Notes due 2027750.0  750.0  
4.75% Senior Secured Notes due 2028500.0  500.0  
Other Secured Subsidiary Debt23.6  21.0  
Total Secured Debt4,399.4  4,322.3  
8.375% Senior Unsecured Notes due 20271,450.0  1,450.0  
Other Subsidiary Debt6.3  12.5  
Long-term debt fees(18.6) (19.4) 
Total Debt5,837.1  5,765.4  
Less: Cash and cash equivalents517.7  400.3  
$5,319.4  $5,365.1  
(In millions)September 30, 2017 December 31, 2016
Senior Secured Credit Facilities:   
Term Loan D Facility Due 20195,000.0
 5,000.0
Term Loan E Facility Due 20191,300.0
 1,300.0
Receivables Based Credit Facility Due 2017 (1)
365.0
 330.0
9.0% Priority Guarantee Notes Due 20191,999.8
 1,999.8
9.0% Priority Guarantee Notes Due 20211,750.0
 1,750.0
11.25% Priority Guarantee Notes Due 2021(2)
825.5
 575.0
9.0% Priority Guarantee Notes Due 20221,000.0
 1,000.0
10.625% Priority Guarantee Notes Due 2023950.0
 950.0
Subsidiary Revolving Credit Facility due 2018(3)
—
 —
Other Secured Subsidiary Debt8.7
 21.0
Total Secured Debt13,199.0
 12,925.8
    
14.0% Senior Notes Due 20211,763.9
 1,729.2
Legacy Notes:   
5.5% Senior Notes Due 2016(4)
—
 —
6.875% Senior Notes Due 2018175.0
 175.0
7.25% Senior Notes Due 2027300.0
 300.0
10.0% Senior Notes Due 2018(2)
96.5
 347.0
Subsidiary Senior Notes:   
6.5% Series A Senior Notes Due 2022735.8
 735.8
6.5% Series B Senior Notes Due 20221,989.2
 1,989.2
Subsidiary Senior Subordinated Notes:   
7.625% Series A Senior Notes Due 2020275.0
 275.0
7.625% Series B Senior Notes Due 20201,925.0
 1,925.0
Subsidiary 8.75% Senior Notes due 2020(5)
375.0
 225.0
Other Subsidiary Debt25.6
 28.0
Purchase accounting adjustments and original issue discount(142.8) (167.0)
Long-term debt fees(102.3) (123.0)
Total Debt20,614.9
 20,365.0
Less: Cash and cash equivalents286.4
 845.0
 $20,328.5
 $19,520.0
(1)The receivables-based credit facility provides for borrowings of up to the lesser of $535.0 million (the revolving credit commitment) or the borrowing base amount, as(1)On February 3, 2020, iHeartCommunications made a $150.0 million prepayment using cash on hand and entered into an agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of 3.00%, or the Base Rate (as defined under the receivables-based credit facility, subject to certain limitations contained in


iHeartCommunications' material financing agreements. As of September 30, 2017, we had $85.0 million of availability under the receivables-based credit facility.
(2)On February 7, 2017, iHeartCommunications completed an exchange offer of $476.4 million principal amount of its 10.0% Senior Notes due 2018 for $476.4 million principal amount of newly-issued 11.25% Priority Guarantee Notes due 2021, which were issued as "additional notes" under the indenture governing the 11.25% Priority Guarantee Notes due 2021. Of the $476.4 million principal amount of 11.25% Priority Guarantee Notes due 2021 issued in the exchange offer, $241.4 million principal amount was issued to subsidiaries of iHeartCommunications that participated in the exchange offer. On July 10, 2017, iHeartCommunications exchanged $15.6 million principal amount of its 10.0% Senior Notes due 2018 that were held by an unaffiliated third party for $15.6 million principal amount of its 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications. In October 2017, iHeartCommunications exchanged $45.0 million principal amount of its 10.0% Senior Notes due 2018 that were held by unaffiliated third parties for $45.0 million principal amount of its 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications.
(3)The subsidiary revolving credit facility provides for borrowings of up to $75.0 million (the revolving credit commitment).
(4)In December 2016, iHeartCommunications repaid at maturity $192.9 million of 5.5% Senior Notes due 2016 and did not pay $57.1 million of the notes held by a subsidiary of the Company. The $57.1 million of aggregate principal amount remains outstanding and is eliminated for purposes of consolidation of the Company's financial statements.
(5)On August 14, 2017, CCIBV, our indirect subsidiary, issued $150,000,000.0 million in aggregate principal amount of 8.75% Senior Notes due 2020 (the “New CCIBV Notes”). The New CCIBV Notes were issued as additional notes under the indenture governing CCIBV’s existing 8.75% Senior Notes due 2020.
Our subsidiaries have from time to time repurchased certain debt obligations of iHeartCommunications and our equity securities and equity securities outstanding of CCOH, and may in the future, as partCredit Agreement) plus a margin of various financing2.00% and investment strategies, purchase additional outstanding indebtedness of iHeartCommunications or its subsidiaries or our equity securities and equity securities outstanding of CCOH, in tender offers, open market purchases, privately negotiated transactions or otherwise. We or our subsidiaries may also sellto modify certain assets, securities or properties. These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations. These transactions could also require or result in amendments to the agreements governing outstanding debt obligations or changes in our leverage or other financial ratios, which could have a material positive or negative impact on our ability to comply with the covenants contained in iHeartCommunications' debt agreements. These transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.the Credit Agreement.
Senior Secured Credit Facilities
The senior secured credit facilities require(2)On March 13, 2020, iHeartCommunications to comply on a quarterly basis with a financial covenant limiting the ratio of consolidated secured debt, net of cash and cash equivalents, to consolidated EBITDA (as defined by iHeartCommunications' senior secured credit facilities) for the preceding four quarters. iHeartCommunications' secured debt consists of the senior secured credit facilities, the receivables-based credit facility, the priority guarantee notes and certain other secured subsidiary debt.  As required by the definition of consolidated EBITDA in iHeartCommunications' senior secured credit facilities, iHeartCommunications' consolidated EBITDA for the preceding four quarters of $1.7 billion is calculated as operating income (loss) before depreciation, amortization, impairment charges and other operating income (expense), net plus share-based compensation and is further adjusted for the following items: (i) costs incurred in connection with the closure and/or consolidation of facilities, retention charges, consulting fees and other permitted activities; (ii) extraordinary, non-recurring or unusual gains or losses or expenses and severance; (iii) non-cash charges; (iv) cash received from nonconsolidated affiliates; and (v) various other items.


The following table reflects a reconciliation of consolidated EBITDA (as defined by iHeartCommunications' senior secured credit facilities) to operating income and net cash provided by operating activities for the four quarters ended September 30, 2017:
 Four Quarters Ended
(In Millions)September 30, 2017
Consolidated EBITDA (as defined by iHeartCommunications' senior secured credit facilities)$1,661.9
Less adjustments to consolidated EBITDA (as defined by iHeartCommunications' senior secured credit facilities): 
Costs incurred in connection with the closure and/or consolidation of facilities, retention charges, consulting fees and other permitted activities(44.9)
Extraordinary, non-recurring or unusual gains or losses or expenses and severance (as referenced in the definition of consolidated EBITDA in iHeartCommunications' senior secured credit facilities)(38.3)
Non-cash charges(1.9)
Other items68.9
Less: Depreciation and amortization, Impairment charges, Other operating income (expense), net and Share-based compensation expense(460.8)
Operating income1,184.9
Plus: Depreciation and amortization, Impairment charges, Gain (loss) on disposal of operating and fixed assets, and Share-based compensation expense454.2
Less: Interest expense(1,848.9)
Less: Current income tax expense(29.0)
Plus: Other income (expense), net(37.3)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities (including Provision for doubtful accounts, Amortization of deferred financing charges and note discounts, net and Other reconciling items, net)43.3
Change in assets and liabilities, net of assets acquired and liabilities assumed(67.3)
Net cash used for operating activities$(300.1)
The maximum ratio permitted under this financial covenant was 8.75:1 for the four quarters ended September 30, 2017.  As of September 30, 2017, our ratio was 7.8:1.
In addition, the senior secured credit facilities include negative covenants that, subject to significant exceptions, limit iHeartCommunications' ability and the ability of its restricted subsidiaries to, among other things:
•incur additional indebtedness;
•create liens on assets;
•engage in mergers, consolidations, liquidations and dissolutions;
•sell assets;
•pay dividends and distributions or repurchase iHeartCommunications' capital stock;
•make investments, loans, or advances;
•prepay certain junior indebtedness;
•engage in certain transactions with affiliates;
•amend material agreements governing certain junior indebtedness; and
•change lines of business.


The senior secured credit facilities include certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, the invalidity of material provisions of the senior secured credit facilities documentation, the failure of collateralborrowed $350.0 million under the security documents forABL Facility, the senior secured credit facilities,proceeds of which were invested as cash on the failure of the senior secured credit facilities to be senior debt under the subordination provisions of certain of iHeartCommunications' subordinated debt and a change of control. If an event of default occurs, the lenders under the senior secured credit facilities will be entitled to take various actions, including the acceleration of all amounts due under the senior secured credit facilities and all actions permitted to be taken by a secured creditor.
Disposals
In January 2017, we sold our Indianapolis, Indiana outdoor market in exchange for certain assets in Atlanta, Georgia, plus approximately $43.1 million in cash, net of closing costs. A net gain of $28.9 million was recognized related to the sale.
Balance Sheet. During the third quarter of 2017, Americas outdoor sold its ownership interest in a joint venture in Canada. As a result, the Company recognized a net loss on sale of $12.1 million, including a $6.3 million cumulative translation adjustment, which is included within Other operating income (expense), net.
Uses of Capital
Debt Repayments, Maturities and Other
On February 7, 2017,three months ended June 30, 2020, iHeartCommunications completed an exchange offer of $476.4voluntarily repaid $115.0 million principal amount of iHeartCommunications' 10.0% Senior Notes due 2018 for $476.4 million principal amount of newly-issued 11.25% Priority Guarantee Notes due 2021, which were issued as “additional notes”drawn under the indenture governingABL Facility. As of June 30, 2020, the 11.25% Priority Guarantee Notes due 2021. OfABL Facility had a borrowing base of $289.4 million and $235.0 million of outstanding borrowings and $41.2 million of outstanding letters of credit, resulting in $13.2 million of availability. Amounts available under the $476.4 million principal amount of 11.25% Priority Guarantee Notes due 2021 issuedABL Facility are calculated using a borrowing base calculated by reference to our outstanding accounts receivable. To the extent decreases in our accounts receivable result in the exchange offer, $241.4borrowing base decreasing to an amount below the amount drawn, we may be required to make a partial repayment of amounts outstanding under our ABL Facility.
(3)On July 16, 2020, iHeartCommunications issued $450.0 million principal amountof incremental term loans under the Amendment No. 2, resulting in net proceeds of $425.8 million, after original issue discount and debt issuance costs. A portion of the proceeds from the issuance was issuedused to subsidiariesrepay the remaining balance outstanding on the Company's ABL Facility of iHeartCommunications that participated in$235.0 million, with the exchange offer.
On January 31, 2017, iHeartCommunications repaid $25.0remaining $190.6 million of the amount borrowedproceeds available for general corporate purposes.

For additional information regarding our debt refer to Note 6, Long-Term Debt.

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Supplemental Financial Information under its receivables-based credit facilityDebt Agreements and on July 31, 2017, we borrowed an additional $60.0 million under our receivables-based credit facility, resulting in total outstanding borrowings under this facilityCertificate of $365.0 million as of September 30, 2017.Designation Governing the iHeart Operations Preferred Stock
On July 10, 2017,Pursuant to iHeartCommunications' material debt agreements, Capital I, the parent guarantor and a subsidiary of iHeartCommunications exchanged $15.6 million principal amountiHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of iHeartCommunications' 11.25% Priority Guarantee Notes due 2021 that were held bythe material differences between iHeartMedia’s consolidated financial information, on the one hand, and the financial information of Capital I and its consolidated restricted subsidiaries, on the other hand. Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartCommunicationsiHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for $15.6 million principal amountthe three and six months ended June 30, 2020, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same periods.
        According to the certificate of iHeartCommunications' 10.0% Senior Notes due 2018 that were held by an unaffiliated third party.
In October 2017, iHeartCommunications exchanged $45.0 million principal amountdesignation governing the iHeart Operations Preferred Stock, iHeart Operations is required to provide certain supplemental financial information of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $45.0 million principal amount of iHeartCommunications' 10.0% Senior Notes due 2018 that were held by unaffiliated third parties.
Certain Relationships withiHeart Operations in comparison to the Sponsors
We are party to a management agreement with certain affiliatesCompany and its consolidated subsidiaries.  iHeart Operations and its subsidiaries comprised 86.3% of the Sponsors and certain other parties pursuant to which such affiliatesCompany's consolidated assets as of the Sponsors will provide management and financial advisory services until 2018.  These arrangements require management fees to be paid to such affiliates of the Sponsors for such services at a rate not greater than $15.0 million per year, plus reimbursable expenses.June 30, 2020. For the three and ninesix months ended SeptemberJune 30, 2017, the Company recognized management fees2020, iHeart Operations and reimbursable expenses of $3.8 millionits subsidiaries comprised 83.6% and $11.4 million, respectively, and $3.9 million and $11.5 million for the three and nine months ended September 30, 2016, respectively.
CCOH Dividends
In connection with the cash management arrangements for CCOH, iHeartCommunications maintains an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the “Intercompany Note”), which consists85.0% of the net activities resulting from day-to-day cash management services provided by iHeartCommunications to CCOH.  As of September 30, 2017, the balance of the Note was $1,051.3 million, all of which is payable on demand.  The Intercompany Note is eliminated in consolidation in ourCompany's consolidated financial statements.
The Intercompany Note previously was the subject of litigation. Pursuant to the terms of the settlement of that litigation, CCOH’s board of directors established an intercompany note committee for the specific purpose of monitoring the Intercompany Note. The CCOH Intercompany Note Committee has the non-exclusive authority, pursuant to the terms of its charter, to demand payments under the Intercompany Note under certain specified circumstances tied to the Company’s liquidity or the amount


outstanding under the Intercompany Note as long as CCOH makes a simultaneous dividend equal to the amount so demanded. If the specified circumstances tied to the Company’s liquidity occur, the CCOH Intercompany Note Committee is authorized to demand repayment of up to the full principal amount of the Intercompany Note, if it declares a simultaneous dividend to CCOH’s stockholders in the same amount. As of November 8, 2017, the CCOH Intercompany Note Committee has the right pursuant to the terms of the settlement of the derivative litigation filed by CCOH’s stockholders regarding the Intercompany Note but not the obligation, to make a demand on the Intercompany Note. Based on the $1,051.3 million balance of the Intercompany Note and the ownership of CCOH as of September 30, 2017, if the CCOH Intercompany Note Committee were to demand repayment of the Intercompany Note in full, we would be required to use cash to fund approximately $110.4 million, or 10.5% of the dividend, to be paid to the public stockholders of CCOH. We cannot assure you that we will have sufficient cash available to make such a payment if the liquidity trigger occurs.
During the fourth quarter of 2016, CCOH sold its outdoor business in Australia for cash proceeds of $195.7 million, net of cash retained by the purchaser and closing costs.  As discussed above under "Recent Liquidity-Generating Transactions," on February 9, 2017, CCOH declared a special dividend of $282.5 million using a portion of the cash proceeds from the sales of certain non-strategic U.S. outdoor markets and of our Australia outdoor business. On February 23, 2017, we received 89.9% of the dividend, or approximately $254.0 million, with the remaining 10.1%, or approximately $28.5 million, paid to public stockholders of CCOH.
On September 14, 2017, (i) CCOH provided notice of its intent to make a demand (the “First Demand”) for repayment on October 5, 2017 of $25.0 million outstanding under the Intercompany Note, and (ii) the board of directors of CCOH declared a special cash dividend, which was paid on October 5, 2017 to CCOH’s Class A and Class B stockholders of record at the closing of business on October 2, 2017, in an aggregate amount equal to $25.0 million, funded with the proceeds of the First Demand. iHeartCommunications received approximately 89.5%, or approximately $22.4 million, of the proceeds of the dividend through its wholly-owned subsidiaries. The remaining approximately 10.5% of the proceeds of the dividend, or approximately $2.6 million, was paid to the public stockholders of CCOH.

On October 11, 2017, (i) CCOH provided notice of its intent to make a demand (the “Second Demand”) for repayment on October 31, 2017 of $25.0 million outstanding under the Intercompany Note, and (ii) the board of directors of CCOH declared a special cash dividend, which was paid on October 31, 2017 to CCOH’s Class A and Class B stockholders of record at the closing of business on October 26, 2017, in an aggregate amount equal to $25.0 million, funded with the proceeds of the Second Demand. iHeartCommunications received approximately 89.5%, or approximately $22.4 million, of the proceeds of the dividend through its wholly-owned subsidiaries. The remaining approximately 10.5% of the proceeds of the dividend, or approximately $2.6 million, was paid to the public stockholders of CCOH.

revenue, respectively.
Commitments, Contingencies and Guarantees
We are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued our estimate of the probable costs for resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated.  These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings.  Please refer to “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q.

SEASONALITY
Typically, the iHM, Americas outdoor and International outdoor segments experience theirAudio segment experiences its lowest financial performance in the first quarter of the calendar year, with International outdoor historically experiencing a loss from operations in that period. Our International outdoor segment typically experiences its strongest performance in the second and fourth quarters of the calendar year. We expect this trend to continue in the future. In addition, the majority of interest payments made in relation to long-term debt are paid in the first and third quarters of each calendar year. Due to this seasonality and certain other factors, the results for the interim periods may not be indicative of results for the full year.  In addition, our Audio segment and our Audio and media representation business are impacted by political cycles and generally experience higher revenues in congressional election years, and particularly in presidential election years. This cyclicality may affect comparability of results between years.

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


A significant amount of our long-term debt bears interest at variable rates. Accordingly, our earnings will be affected by changes in interest rates. As of SeptemberJune 30, 2017,2020, approximately 32%41% of our aggregate principal amount of long-term debt bearsbore interest at floating rates. Assuming the current level of borrowings and assuming a 50% change in LIBOR, it is estimated that our interest expense for the ninesix months ended SeptemberJune 30, 20172020 would have changed by $26.2$6.6 million.
In the event of an adverse change in interest rates, management may take actions to mitigate our exposure.  However, due to the uncertainty of the actions that would be taken and their possible effects, the preceding interest rate sensitivity analysis assumes no such actions.  Further, the analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.
Foreign Currency Exchange Rate Risk
51
We have operations in countries throughout the world.  Foreign operations are measured in their local currencies.  As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we have operations.  We believe we mitigate a small portion of our exposure to foreign currency fluctuations with a natural hedge through borrowings in currencies other than the U.S. dollar. Our foreign operations reported net losses of $15.2 million and $15.4 million for three and nine months ended September 30, 2017, respectively.  We estimate a 10% increase in the value of the U.S. dollar relative to foreign currencies would have decreased our net losses for the three and nine months ended September 30, 2017 by $1.5 million, respectively.  A 10% decrease in the value of the U.S. dollar relative to foreign currencies during the three and nine months ended September 30, 2017 would have increased our net losses for the three and nine months ended September 30, 2017 by corresponding amounts.

This analysis does not consider the implications that such currency fluctuations could have on the overall economic activity that could exist in such an environment in the U.S. or the foreign countries or on the results of operations of these foreign entities.
Inflation

Inflation is a factor in the economies in which we do business and we continue to seek ways to mitigate its effect.  Inflation has affected our performance in terms of higher costs for wages, salaries and equipment.  Although the exact impact of inflation is indeterminable, we believe we have offset these higher costs by increasing the effective advertising rates of most of our broadcasting stations and outdoor display faces in our iHM, Americas outdoor and International outdoorAudio operations.
CRITICAL ACCOUNTING ESTIMATESCritical Accounting Estimates
The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material. OurThere have been no significant changes to our critical accounting policies are discussedand estimates disclosed in “Critical Accounting Estimates” of Item 7, Management’s Discussion and Analysis of our Annual Report on Form 10-K for the notesyear ended December 31, 2019 except as disclosed in Note 1, Basis of Presentation to our consolidated financial statements included in Note 1 of this Quarterly Report on Form 10-Q. Management believes that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. The following narrative describes these critical accounting estimates, the judgments and assumptions and the effect if actual results differ from these assumptions.statements.


The Company performs its annual impairment test on goodwill and indefinite-lived intangible assets as of July 1 of each year.
Indefinite-lived Intangible Assets
In connection with the Merger Agreement pursuant to which we acquired iHeartCommunications in 2008, we allocated the purchase price to all of our assets and liabilities at estimated fair values, including our FCC licenses and our billboard permits. Indefinite-lived intangible assets, such as our FCC licenses and our billboard permits, are reviewed annually for possible impairment using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets was calculated at the market level as prescribed by ASC 350-30-35. Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the buyer hypothetically obtains indefinite-lived intangible assets and builds a new operation with similar attributes from scratch.


Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flows model, which results in value that is directly attributable to the indefinite-lived intangible assets.

Our key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average asset within a market.

On July 1, 2017, we performed our annual impairment test in accordance with ASC 350-30-35 and recognized impairment charges of $6.0 million related to FCC Licenses and no impairment related to outdoor billboard permits.

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

Revenue growth sales forecasts published by BIA Financial Network, Inc. (“BIA”), varying by market, were used for the initial four-year period;
2.0% revenue growth was assumed beyond the initial four-year period;
Revenue was grown proportionally over a build-up period, reaching market revenue forecast by year 3;
Operating margins of 12.5% in the first year gradually climb to the industry average margin in year 3 of up to 25.0%, depending on market size; and
Assumed discount rates of 8.0% for the 13 largest markets and 8.5% for all other markets.

In determining the fair value of our billboard permits, the following key assumptions were used:

Industry revenue growth forecasts between 0.5% and 3.5% were used for the initial four-year period;
3.0% revenue growth was assumed beyond the initial four-year period;
Revenue was grown over a build-up period, reaching maturity by year 2;
Operating margins gradually climb to the industry average margin of up to 55.9%, depending on market size, by year 3; and
Assumed discount rate of 7.5%.

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the change in the fair value of our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
(In thousands) Revenue Profit Discount
Description Growth Rate Margin Rates
FCC license $485,735
 $183,700
 $549,775
Billboard permits $1,107,600
 $161,800
 $1,118,300
The estimated fair value of our FCC licenses and billboard permits at July 1, 2017 was $7.0 billion ($3.2 billion for FCC licenses and $3.7 billion for billboard permits), while the carrying value was $3.4 billion. The estimated fair value of our FCC licenses and billboard permits at July 1, 2016 was $7.1 billion ($3.1 billion for FCC licenses and $4.0 billion for billboard permits), while the carrying value was $3.4 billion.

Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The fair value of our reporting units is used to apply value to the net assets of each reporting unit. To the extent that the carrying amount of net assets would exceed the fair value, an impairment charge may be required to be recorded.

The discounted cash flow approach we use for valuing goodwill as part of the two-step impairment testing approach involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value.



On July 1, 2017, we performed our annual impairment test in accordance with ASC 350-30-35, resulting in a goodwill impairment charge of $1.6 million related to one of our International outdoor markets. In determining the fair value of our reporting units, we used the following assumptions:

Expected cash flows underlying our business plans for the periods 2017 through 2021. Our cash flow assumptions are based on detailed, multi-year forecasts performed by each of our operating segments, and reflect the advertising outlook across our businesses.
Cash flows beyond 2021 are projected to grow at a perpetual growth rate, which we estimated at 2.0% for our iHM segment, 3.0% for our Americas outdoor and International outdoor segments, and 2.0% for our Other segment (beyond 2024).
In order to risk adjust the cash flow projections in determining fair value, we utilized a discount rate of approximately 8.0% to 11.5% for each of our reporting units.

Based on our annual assessment using the assumptions described above, a hypothetical 10% reduction in the estimated fair value in each of our reporting units would not result in a material impairment condition.

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the decline in the fair value of each of our reportable segments that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
(In thousands) Revenue Profit Discount
Description Growth Rate Margin Rates
iHM $1,180,000
 $310,000
 $1,150,000
Americas Outdoor $820,000
 $170,000
 $780,000
International Outdoor $260,000
 $210,000
 $220,000

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf.  Except for the historical information, thisThis report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, the anticipated impacts of the COVID-19 pandemic on our liquidity,business, financial position and results of operations, our ability to comply with the covenants in the agreements governingRights Plan, our indebtednessexpected costs, savings and the availabilitytiming of our modernization initiatives and other capital and the terms thereof.operating expense reduction initiatives, our business plans, strategies and initiatives, our expectations about certain markets, our expectations regarding our FCC petition for declaratory ruling and our anticipated financial performance and liquidity.  Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables which could impact our future performance.  These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance.  There can be no assurance, however, that management’s expectations will necessarily come to pass.  Actual future events and performance may differ materially from the expectations reflected in our forward-looking statements.  We do not intend, nor do we undertake any duty, to update any forward-looking statements.
A wide range of factors could materially affect future developments and performance, including but not limited to:
our ability to continue as a going concern;
the impact of our substantial indebtedness, including the effect of our leverage on our financial position and earnings;
our ability to generate sufficient cash from operations and liquidity-generating transactions and our need to allocate significant amounts of our cash to make payments on our indebtedness, which in turn could reduce our financial flexibility and ability to fund other activities;
•risks associated with weak or uncertain global economic conditions and their impact on the capital markets;
other general economic and political conditions in the United States and in other countries in which we currently do business, including those resulting from recessions, political events and acts or threats of terrorism or military conflicts;
industry conditions, including competition;
the level of expenditures for advertising;
•the impact of the COVID-19 pandemic on advertising;our business, financial position and results of operations;
legislative•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 regulatory requirements;enhancing our master brand;
•fluctuations in operating costs;
•technological changes and innovations;


changes in labor conditions, including programming, program hosts and management;
capital expenditure requirements;
risks of doing business in foreign countries;
fluctuations in exchange rates and currency values;
the outcome of pending and future litigation;
taxes and tax disputes;
changes in interest rates;
•shifts in population and other demographics;
access•the impact of our substantial indebtedness;
•the impact of future acquisitions, dispositions and other strategic transactions;
•legislative or regulatory requirements;
•the impact of legislation or ongoing litigation on music licensing and royalties;
•regulations and consumer concerns regarding privacy and data protection, and breaches of information security measures;
•risks associated with our recent emergence from the Chapter 11 Cases;
•risks related to capital markets and borrowed indebtedness;our Class A common stock, including our significant number of outstanding warrants;
our ability to implement•regulations impacting our business strategies;and the ownership of our securities; and
the risk that we may not be able to integrate the operations of acquired businesses successfully;
the risk that our strategic revenue and efficiency initiatives may not be entirely successful or that any cost savings achieved from such strategic revenue and efficiency initiatives may not persist; and
•certain other factors set forth in our other filings with the SEC.
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This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive.  Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Required information is presented under “Market Risk” within Item 2 of this Part I.

ITEM 4. CONTROLS AND PROCEDURES
AsDisclosure Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
        In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect that there are resource constraints and that management is required by Rule 13a-15(b)to apply judgment in evaluating the benefits of the Securities Exchange Actpossible controls and procedures relative to their costs.
Evaluation of 1934, as amended (the “Exchange Act”), under the supervisionDisclosure Controls and Procedures
        Our management, with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, we have carried outconducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in RuleRules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.  Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in reports that are filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified by the SEC.. Based on thatthis evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2017 at the reasonable assurance level.level as of June 30, 2020. 
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended SeptemberJune 30, 20172020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II-- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
We currently are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our financial condition or results of operations.
Although weWe are involved in a variety of legal proceedings in the ordinary course of business and a large portion of our litigation arises in the following contexts: commercial disputes; defamation matters; employment and benefits related claims; governmental fines; intellectual property claims; and tax disputes.
Stockholder LitigationAlien Ownership Restrictions and FCC Petition for Declaratory Ruling
On May 9, 2016,The Communications Act and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a stockholdercorporation controlling the licensee of Clear Channel Outdoor Holdings, Inc. ("CCOH") filed a derivative lawsuitradio broadcast station unless the FCC finds greater foreign ownership is in the Courtpublic interest (the “Foreign Ownership Rule”). Under our Plan of ChanceryReorganization, we committed to file a Petition for Declaratory Ruling ("PDR") requesting the FCC to permit up to 100% of the StateCompany's voting and equity to be owned by non-U.S. individuals and entities, but the FCC’s granting our PDR was not a condition to our emergence. 
The equity allocation mechanism (“Equity Allocation Mechanism”) set forth in the Plan of Delaware, captioned GAMCO Asset Management Inc. v. iHeartMedia Inc. et al., C.A. No. 12312-VCS.Reorganization was intended to enable us to comply with the Foreign Ownership Rule and other FCC ownership restrictions in connection with our emergence. The complaint names as defendants the Company, iHeartCommunications, Inc. ("iHeartCommunications"),Equity Allocation Mechanism imposed an indirect subsidiaryobligation on each of the Company, Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the "Sponsor Defendants"), the Company's private equity sponsors and majority owners, and the members of CCOH's board of directors. CCOH also is named as a nominal defendant. The complaint alleges that CCOH has been harmed by the intercompany agreements with iHeartCommunications, CCOH’s lack of autonomy over its own cash and the actions of the defendants in serving the interests of the Company, iHeartCommunications and the Sponsor Defendants to the detriment of CCOH and its minority stockholders. Specifically, the complaint alleges that the defendants have breached their fiduciary duties by causing CCOH to: (i) continue to loan cash to iHeartCommunications under the intercompany note at below-market rates; (ii) abandon its growth and acquisition strategies in favor of transactions that would provide cash to the Company and iHeartCommunications; (iii) issue new debt in the CCIBV note offering (the "CCIBV Note Offering")Claimholders to provide cashwritten certification sufficient for us to determine whether issuance of common stock to such Claimholder would cause us to violate the CompanyForeign Ownership Rule, and iHeartCommunications throughrestricted us from issuing common stock to Claimholders such that it would cause us to exceed an aggregate alien ownership or voting percentage of 22.5 percent (the “22.5 Percent Threshold”). 
After emerging from bankruptcy, we discovered that a dividend; and (iv) effect the salesgroup of certain outdoor markets in the U.S. (the "Outdoor Asset Sales") allegedlyClaimholders that had certified to provide cash to the Company and iHeartCommunications through a dividend. The complaint also alleges that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the directors' breaches of their fiduciary duties. The complaint further alleges that the Company, iHeartCommunications and the Sponsor Defendants were unjustly enriched as a result of these transactions and that these transactions constituted a waste of corporate assets for which the defendants are liable to CCOH. The plaintiff is seeking, among other things, a ruling that the defendants breached their fiduciary duties to CCOH and that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the CCOH board of directors' breaches of fiduciary duty, rescission of payments made by CCOH to iHeartCommunications and its affiliates pursuant to dividends declaredhaving no foreign ownership or voting control in connection with the CCIBV Note Offering and Outdoor Asset Sales, and an order requiring the Company, iHeartCommunications and the Sponsor Defendants to disgorge all profits they have received asEquity Allocation Mechanism had subsequently undergone a separate merger transaction without our knowledge or control. As a result of this merger, these Claimholders’ interests in iHeartMedia (amounting to approximately nine percent of our issued and outstanding Class A common stock) can be voted by a U.S. subsidiary of a foreign parent. We notified the alleged fiduciary misconduct.
FCC of this development in writing promptly after discovering and confirming it. The FCC responded to our notification on July 9, 2019, indicating that (1) the FCC has not determined that this development is contrary to the public interest, and (2) the FCC has deemed us to be in compliance with the FCC’s foreign ownership reporting rules, pending its decision on our PDR. On July 20, 2016,25, 2019 we filed our PDR. The FCC requested public comment on the defendants filed a motionPDR, which comment period closed on March 26, 2020.  The FCC subsequently referred our PDR to dismiss plaintiff's verified stockholder derivative complaintTeam Telecom - the interagency federal government group that analyzes requests for failurenational security, law enforcement, and public safety issues.  On June 29, 2020, Team Telecom indicated its consent to state a claim upon which relief can be granted. On November 23, 2016, the Court granted defendants’ motion to dismiss all claims broughtgrant by the plaintiff.  On December 19, 2016, the plaintiff filed a notice of appealFCC of the ruling. The oral hearing onPDR. We cannot predict whether the appeal was held on October 11, 2017. On October 12, 2017,FCC will issue a ruling granting the Supreme CourtPDR, the amount of Delaware affirmed the lower court'sforeign equity and voting rights any such a ruling dismissing the case.will allow us to have, or how long it will take to obtain such a ruling.
International Outdoor Investigation
On April 21, 2015, inspections were conducted at the premises of Clear Channel in Denmark and Sweden as part of an investigation by Danish competition authorities.  Additionally, on the same day, Clear Channel UK received a communication from the UK competition authorities, also in connection with the investigation by Danish competition authorities. Clear Channel and its affiliates are cooperating with the national competition authorities.

ITEM 1A.  RISK FACTORS
For information regardingExcept for the risk factors disclosed in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which are hereby incorporated by reference into this Part II, Item IA of this Form 10-Q, there have been no material changes in our risk factors please refer to Item 1Afrom those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016 (the "Annual Report")2019, except as discussed below. 
The COVID-19 pandemic has adversely impacted, and our Quarterly Reports on Form 10-Q. There have not been any material changes


in the risk factors disclosed in our Annual Report and Quarterly Reports, except that we are updating the risk factor entitled "To service our debt obligations and to fund our operations and our capital expenditures, we require a significant amount of cash to meet our needs, which depends on many factors beyond our control" as set forth below:
To service our debt obligations and to fund our operations and our capital expenditures, we require a significant amount of cash to meet our needs, which depends on many factors beyond our control, and management has determined that there is substantial doubt as to our abilityexpected to continue as a going concern for a period within 12 months following November 8, 2017 based on the uncertainty about these factors
To service our debt obligations and to fund our operations and our capital expenditures, we require a significant amount of cash.  Our primary sources of liquidity are cash on hand, cash flow from operations, borrowing capacity under iHeartCommunications' domestic receivables-based credit facility, subject to the limitations contained in iHeartCommunications' material financing agreements, and cash from liquidity-generating transactions.  As of September 30, 2017, we had $286.4 million of cash and cash equivalents on our balance sheet, including $222.4 million of cash and cash equivalents held by our subsidiary, CCOH.  As of September 30, 2017, we had a borrowing base of $499.1 million under iHeartCommunications' receivables-based credit facility, had $365.0 million of outstanding borrowings and $49.1 million of outstanding letters of credit, resulting in $85.0 million of excess availability.  However, any incremental borrowings under iHeartCommunications' receivables-based credit facility may be further limited by the terms contained in iHeartCommunications' material financing agreements.
During the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This update provides U.S. GAAP guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and about related footnote disclosures.  We adopted this standard for the year ended December 31, 2016. Under this standard, we are required to evaluate whether there is substantial doubt about our ability to continue as a going concern each reporting period, including interim periods. In evaluating our ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about our ability to continue as a going concern for a period of 12 months following the date our financial statements were issued (November 8, 2017). Management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our conditional and unconditional obligations due before November 8, 2018.
A substantial amount of our cash requirements are for debt service obligations. Our current forecast indicates we will continue to incur net losses and generate negative cash flows from operating activities as a result of our indebtedness and significant related interest expense. At September 30, 2017, the Company had debt maturities totaling $366.9 million, $308.5 million (net of $277.1 million due to certain of our subsidiaries) and $8,368.9 million in 2017, 2018 and 2019, respectively. In October 2017, iHeartCommunications exchanged $45.0 million principal amount of 11.25% Priority Guarantee Notes due 2021 that were held by a subsidiary of iHeartCommunications for $45.0 million principal amount of 10.0% Senior Notes due 2018 that were held by unaffiliated third parties. After the exchanges, our debt maturities in the next 12 months include, (i) $365.0 million outstanding under iHeartCommunications' receivables-based credit facility, which matures on December 24, 2017, (ii) $51.5 million of 10% Senior Notes due January 15, 2018, (iii) $175.0 million of 6.875% Senior Notes due June 15, 2018, (iv) $24.8 million of contractual AHYDO catch-up payments to be made on iHeartCommunications' 14% Senior Notes due 2021 on the interest payment due on August 1, 2018.Our forecast includes approximately $1.8 billion in cash interest payments in the next 12 months, of which $344.6 million is payable in the fourth quarter of 2017 and $548.2 million is payable in the first quarter of 2018. In addition, in certain circumstances, a committee of the CCOH board of directors formed for the specific purpose of monitoring the Intercompany Note (the “CCOH Intercompany Note Committee”) has the non-exclusive authority to demand payments under the Intercompany Note, as long as the CCOH board of directors declares a simultaneous dividend equal to the amount so demanded.  As of November 8, 2017, the CCOH Intercompany Note Committee has the right pursuant to the terms of the settlement of the derivative litigation filed by CCOH’s stockholders regarding the Intercompany Note but not the obligation, to make a demand on the Intercompany Note. If the CCOH Intercompany Note Committee exercises this right to demand a full repayment of the Intercompany Note and the CCOH board of directors declares a simultaneous dividend, based on the balance of the Intercompany Note outstanding at September 30, 2017, approximately $110.4 million would be payable to the public stockholders of CCOH. If we are unable to refinance the amounts outstanding under the receivables-based credit facility, the 10% Senior Notes due January 15, 2018, and/or the 6.875% Senior Notes due June 15, 2018 and take other steps to create additional liquidity, forecasted cash flows are not sufficient for us to meet our obligations, including upcoming interest payments and maturities on our outstanding debt, as they become due in the ordinary course of business for a period of 12 months following November 8, 2017.
While we continue to work toward completing the notes exchange offers and the term loan offers or other similar transactions, refinancing the maturity of the receivables-based credit facility and taking other actions to create additional liquidity, there is no assurance that the notes exchange offers and the term loan offers or other similar transactions will be completed, that the amounts outstanding under the receivables-based credit facility will be refinanced or that we will be able to create additional


liquidity. Our ability to meet our obligations as they become due in the ordinary course of business for the next 12 months will depend on our ability to achieve forecasted results, our ability to conserve cash, our ability to refinance the amounts outstanding under the receivables-based credit facility, our ability to successfully complete the notes exchange offers and the term loan offers or other similar transactions and achieve sufficient cash interest savings therefrom and our ability to complete other liquidity-generating transactions. Based on the uncertainty of achieving these actions and the significance of the forecasted future negative cash flows resulting from our substantial debt balance, including anticipated future interest cash payments (including interest due in the fourth quarter of 2017 and in 2018) and the maturities of the $365.0 million in current borrowings under iHeartCommunications' receivables-based credit facility that matures December 24, 2017, the $51.5 million aggregate principal amount of 10% Senior Notes due January 15, 2018, the $175.0 million aggregate principal amount of 6.875% Senior Notes due June 15, 2018 and the $24.8 million of contractual AHYDO catch-up payments to be made on iHeartCommunications' 14% Senior Notes due 2021 beginning with the interest payment due on August 1, 2018, management has determined that there is substantial doubt as to our ability to continue as a going concern for a period of 12 months following November 8, 2017.
If we are unable to complete any of the actions described in the paragraph above, or otherwise generate incremental liquidity, or if there are material adverse developments inadversely impact, our business, results of operations or liquidity,and financial position.
        In December 2019, a strain of novel coronavirus disease, COVID-19, was identified in Wuhan, China. This virus has been declared a pandemic and has spread around the world, including throughout the United States. The outbreak and
54

government measures taken in response have also had a significant impact, both direct and indirect, on our businesses and the economy generally, as supply chains have been disrupted; facilities and production have been suspended; and demand for many goods and services has fallen. In response to the spread of COVID-19, including shelter-in-place and stay-at-home orders, we implemented a work-from-home policy that remains in place for most of our employees and have restricted on-site activities.

        As a result of the COVID-19 pandemic, we have experienced and may be forcedcontinue to further reduce or delayexperience disruptions that have adversely impacted our business, activitiesresults of operations and capital expenditures, sell material assets, seek additional capital orfinancial position. The extent of future disruptions will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be required to filepredicted, and could result in significantly more severe impacts in the future, including:

•reduced ad budgets and spend, order cancellations and increased competition for bankruptcy court protection. We cannot assure you that we would be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all.advertising revenue;
In connection with •the cash management arrangements for CCOH, iHeartCommunications maintains an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the "Intercompany Note"), which matures on December 15, 2017. As of September 30, 2017, the balanceeffect of the Note was $1,051.3 million, alloutbreak on our customers and other business partners and vendors;
•changes in how we conduct operations, including our events;
•increased competition with alternative media platforms and technologies;
•the inability of which is payablecustomers to pay amounts owed to the Company, or delays in collections of such amounts;
•additional goodwill or other impairment charges;
•limitations on demand. While we intendour employee resources, including because of work-from-home, stay-at-home and shelter-in-place orders from federal or state governments, employee furloughs, or sickness of employees or their families;
•diversion of management resources to extendfocus on mitigating the maturityimpacts of the Intercompany Note priorCOVID-19 pandemic;
•reduced capital expenditures; and
•impacts from prolonged remote work arrangements, including increased cybersecurity risks.

        These disruptions have negatively impacted our revenue, results of operations and financial position for the three and six months ended June 30, 2020 and we expect these disruptions to its maturity,continue to have a negative impact for the principal amount outstanding underremainder of 2020.

        The COVID-19 pandemic continues to evolve. The extent to which the Intercompany Note is subjectoutbreak continues to demand by CCOH orimpact our business, liquidity and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the CCOH Intercompany Note Committee. We cannot assure you that we will have sufficient cash to make such a payment if CCOH or the CCOH Independent Note Committee demanded paymentduration of the Intercompany Notepandemic, stay-at-home and shelter-in-place orders, travel restrictions and social distancing throughout the United States, the duration and extent of business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease. If we or our customers continue to experience prolonged shutdowns or other business disruptions beyond current expectations, our ability to conduct our business in full.
The covenants in iHeartCommunications' senior secured credit facilities include a requirement that we receive an opinion fromthe manner and within planned timelines could be materially and adversely impacted, and our auditors in connection with our year-end audit that is not subject to a “going concern” or like qualification or exception. Even if we are able to successfully refinancebusiness, liquidity and financial results will be adversely affected. Additionally, concerns over the amounts outstanding under iHeartCommunications' receivables-based credit facility and manage our liquidity challenges through the end of 2017, if we are unable to improve our liquidity forecast for 2018 and refinance or extend a significant portion of our substantial 2019 debt maturities prior to the completioneconomic impact of the audit ofCOVID-19 pandemic caused extreme volatility in financial and other capital markets, which has adversely affected our 2017 financial statements, we anticipate thatstock price and credit rating and could impact our auditor’s year-end opinion will contain a “going concern” qualification, and, if we are unableability to obtain a waiver ofaccess the covenantcapital markets in the senior secured credit facilities that requires us to deliver an unqualified auditor’s opinion, it will trigger a default under the senior secured credit facilities. We cannot assure you that we will be able to obtain such a waiver or amendment.future.
55

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth theour purchases of shares of our Class A common stock made during the quarter ended SeptemberJune 30, 20172020:
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 ProgramsMaximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 through April 30—  $—  —  $—  
May 1 through May 3188,738  8.70  —  —  
June 1 through June 3010,846  7.46  —  —  
Total99,584  $8.57  —  $—  
(1)The shares indicated consist of shares of our Class A common stock tendered by oremployees to us during the three months ended June 30, 2020 to satisfy the employees’ tax withholding obligation in connection with the vesting and release of restricted stock, which are repurchased by us based on behalf of us or an affiliated purchaser:their fair market value on the date the relevant transaction occurs.
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 31103,987
 $1.40
 —
 $—
August 1 through August 31182
 1.75
 —
 —
September 1 through September 30548
 1.63
 —
 —
Total104,717
 $1.33
 —
 $—
(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, 2017 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.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
None.

        Not applicable.


ITEM 4.  MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.  OTHER INFORMATION
None.


56

ITEM 6. EXHIBITS
Exhibit
Number		Description
4.12.1

10.13.1
FirstFifth Amended and Restated Certificate of Incorporation of iHeartMedia, Inc. (incorporated by reference to Exhibit 3.1 of iHeartMedia, Inc.’s Current Report on Form 8-K filed on May 2, 2019).

3.2

3.3

3.4

4.1

10.1

10.2

10.3


31.1*
Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*101.INS*Inline XBRL Instance Document - the instance document does not appear in the Interactive Data Files.File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
57

101.DEF*Inline XBRL Taxonomy Extension Definition Document
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
____________
* Filed herewith.
** Furnished herewith.

58


Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
IHEARTMEDIA, INC.
August 6, 2020IHEARTMEDIA, INC.
November 8, 2017
/s/ SCOTT D. HAMILTON
Scott D. Hamilton
Senior Vice President, Chief Accounting Officer and Assistant Secretary

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