iHeartMedia, Inc. (Nasdaq: IHRT) today reported financial
results for the quarter ended September 30, 2024.
Financial Highlights:1
Announced Debt Exchange Transactions
and Cost Efficiency Actions
- Entered into a transaction support agreement with a group of
debt holders representing approximately 80% of the Company’s
outstanding term loan and notes to exchange $4.1 billion of
existing debt; extend maturities by three years; keep consolidated
annual cash interest essentially flat; and provide debt
reduction
- Announced cost programs expected to generate $150 million of
annual cost savings in 2025. In addition, programs enacted earlier
this year will generate another $50 million in 2025, for a total of
$200 million of year over year savings in 2025. Offset by $50
million of cost increases for 2025, for a net benefit of $150
million
Q3 2024 Consolidated
Results
- Q3 Revenue of $1,008 million, up 5.8%; within guidance of up
mid-single digits
- Excluding Q3 Political Revenue, Q3 Revenue up 2.0%
- GAAP Operating income of $77 million vs. $69 million in Q3
2023
- Consolidated Adjusted EBITDA of $205 million, within previously
disclosed guidance range of $200 million to $220 million, compared
to $204 million in Q3 2023
- Cash provided by operating activities of $103 million
- Free Cash Flow of $73 million
- Cash balance and total available liquidity2 of $432 million and
$858 million, respectively, as of September 30, 2024
Q3 2024 Digital Audio Group
Results
- Digital Audio Group Revenue of $301 million up 13%
- Podcast Revenue of $114 million up 11%
- Digital Revenue excluding Podcast of $187 million up 14%
- Segment Adjusted EBITDA of $100 million up 7%
- Digital Audio Group Adjusted EBITDA margin of 33.2%
Q3 2024 Multiplatform Group
Results
- Multiplatform Group Revenue of $620 million down 1%
- Excluding Multiplatform Group Q3 Political Revenue,
Multiplatform Group Q3 Revenue down 3%
- Segment Adjusted EBITDA of $130 million down 20%
- Multiplatform Group Adjusted EBITDA margin of 21.0%
Guidance
- Q4 Consolidated Revenue expected to increase in the high-single
digits
- Full Year 2024 Consolidated Revenue expected to increase in the
mid-single digits
- Q4 Consolidated Adjusted EBITDA3 expected to be approximately
$290 million, up approximately 39%
- Full Year 2024 Consolidated Adjusted EBITDA3 expected to be
approximately $750 million, up approximately 8%
- Full Year 2025 Consolidated Revenue expected to be
approximately flat in a non-political year
- Full Year 2025 Consolidated Adjusted EBITDA3 expected to be
approximately $770 million, up approximately 3% in a non-political
year
Statement from Senior Management
“We’re pleased to report that our third quarter results were in
line with our previously provided Adjusted EBITDA and Revenue
guidance ranges,” said Bob Pittman, Chairman and CEO of
iHeartMedia, Inc. “We continue to see evidence that this is a
recovery year for advertising revenues, and the strong momentum in
our podcast business, our digital ex-podcast business, and the
sequential improvement of our Multiplatform Group’s year over year
revenue performance reflect the power of our unparalleled reach,
consumer relationships and range of assets.” Pittman continued,
“Technology is the key to increasing our operating leverage because
it allows us to speed up processes, streamline legacy systems, and
enables us to take another significant step in our modernization
journey. We have flattened our organization, eliminated
redundancies and broken down silos, which will have a major impact
on costs, expected to generate $200 million of annual savings in
2025 compared to 2024, and benefiting full year 2025 Adjusted
EBITDA by $150 million on a year over year basis.”
“We’re happy to announce that we have entered into a Transaction
Support Agreement with a group of debt holders representing, on an
aggregate basis, approximately 80% of the Company’s outstanding
debt to support an exchange of approximately $4.1 billion of debt
for new notes and term loans,” said Rich Bressler, iHeartMedia’s
President, COO and CFO. “The exchange offers will extend maturities
by three years; keep consolidated annual cash interest essentially
flat; and provide debt reduction – all of which will strengthen the
Company’s financial flexibility, and provide us with the runway to
accelerate our strategic growth initiatives. This marks a
significant step in iHeart’s strategy of disciplined balance sheet
and capital structure management.”
Consolidated Results of
Operations
Third Quarter 2024 Consolidated
Results
Our consolidated revenue increased $55.1 million, or 5.8%,
during the three months ended September 30, 2024 compared to the
same period of 2023 primarily due to increases in Digital Audio
Group revenue and political revenue as 2024 is a presidential
election year. Digital Audio revenue increased $33.8 million, or
12.7%, driven primarily by continuing increases in demand for
digital advertising. Multiplatform revenue decreased $6.8 million,
or 1.1%, primarily resulting from a decrease in broadcast
advertising in connection with continued uncertain market
conditions, partially offset by increases in political revenues and
non-cash trade revenues. Audio & Media Services revenue
increased $28.1 million, or 45.3%, primarily as a result of higher
political revenue and an increase in digital revenue.
Consolidated direct operating expenses increased $29.7 million,
or 7.8%, during the three months ended September 30, 2024 compared
to the same period of 2023. The increase was primarily driven by
higher variable content costs, including higher third-party digital
costs and podcast profit sharing expenses related to the increase
in digital revenues.
Consolidated Selling, General & Administrative ("SG&A")
expenses increased $25.2 million, or 6.4%, during the three months
ended September 30, 2024 compared to the same period of 2023. The
increase was driven primarily by higher non-cash trade expense
related to the 2024 Summer Olympics and the 2024 iHeartRadio Music
Festival and an increase in costs incurred in connection with
executing on our cost savings initiatives.
Our consolidated GAAP Operating income was $76.7 million
compared to $69.0 million in the third quarter of 2023, primarily
due to the increase in consolidated revenues, partially offset by
the increase in direct operating and SG&A expenses as discussed
above.
Adjusted EBITDA increased to $204.6 million compared to $203.8
million in the prior-year period.
Cash provided by operating activities was $102.8 million,
compared to $96.2 million in the prior year period primarily due to
the increase in political revenues, largely offset by a decrease in
broadcast revenue. Free Cash Flow was $73.3 million, compared to
$67.7 million in the prior year period.
Business Segments: Results of
Operations
Third Quarter 2024 Multiplatform Group
Results
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
619,544
$
626,383
(1.1
)%
$
1,688,914
$
1,751,340
(3.6
)%
Operating expenses1
489,672
463,939
5.5
%
1,377,597
1,339,441
2.8
%
Segment Adjusted EBITDA
$
129,872
$
162,444
(20.1
)%
$
311,317
$
411,899
(24.4
)%
Segment Adjusted EBITDA margin
21.0
%
25.9
%
18.4
%
23.5
%
1 Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses.
Revenue from our Multiplatform Group decreased $6.8 million, or
1.1% YoY, primarily due to a decrease in broadcast advertising in
connection with continued uncertain market conditions, partially
offset by an increase in political revenues and non-cash trade
revenue. Broadcast revenue declined $6.3 million, or 1.4% YoY,
driven by lower spot revenue, partially offset by an increase in
political advertising and non-cash trade revenues. Networks
declined $1.0 million, or 0.9% YoY. Revenue from Sponsorship and
Events increased by $0.8 million, or 1.7% YoY.
Operating expenses increased $25.7 million, or 5.5% YoY, driven
primarily by higher non-cash trade expense related to the 2024
Summer Olympics and the 2024 iHeartRadio Music Festival, an
increase in broadcast music license fees, and an increase in tower
rent as a result of the tower sale leaseback transaction completed
at the end of the third quarter of 2023.
Segment Adjusted EBITDA Margin decreased YoY to 21.0% from
25.9%.
Third Quarter 2024 Digital Audio Group
Results
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
301,041
$
267,222
12.7
%
$
825,623
$
751,472
9.9
%
Operating expenses1
201,035
173,565
15.8
%
565,620
519,115
9.0
%
Segment Adjusted EBITDA
$
100,006
$
93,657
6.8
%
$
260,003
$
232,357
11.9
%
Segment Adjusted EBITDA margin
33.2
%
35.0
%
31.5
%
30.9
%
1 Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses.
Revenue from our Digital Audio Group increased $33.8 million, or
12.7% YoY, driven by Digital, excluding Podcast revenue, which grew
$22.4 million, or 13.6% YoY, to $187.0 million, driven by an
increase in demand for digital advertising, and Podcast revenue,
which increased $11.4 million, or 11.1% YoY, to $114.0 million,
driven primarily by increased demand for podcasting from
advertisers.
Operating expenses increased $27.5 million, or 15.8% YoY,
primarily driven by higher variable content costs, including higher
podcast profit sharing and third-party digital costs related to the
increase in revenues.
Segment Adjusted EBITDA Margin decreased YoY to 33.2% from
35.0%.
Third Quarter 2024 Audio & Media
Services Group Results
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
90,050
$
61,979
45.3
%
$
229,300
$
189,134
21.2
%
Operating expenses1
45,641
45,003
1.4
%
137,347
138,315
(0.7
)%
Segment Adjusted EBITDA
$
44,409
$
16,976
161.6
%
$
91,953
$
50,819
80.9
%
Segment Adjusted EBITDA margin
49.3
%
27.4
%
40.1
%
26.9
%
1 Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses.
Revenue from our Audio & Media Services Group increased
$28.1 million, or 45.3% YoY, primarily due to higher political
revenue as 2024 is a presidential election year and increased
demand for digital advertising, partially offset by decreases in
broadcast advertising.
Operating expenses increased $0.6 million, or 1.4% YoY,
primarily driven by higher sales commissions related to the
increased demand for digital advertising.
Segment Adjusted EBITDA Margin increased YoY to 49.3% from
27.4%.
GAAP and Non-GAAP Measures: Consolidated
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
$
1,008,133
$
952,989
$
2,736,263
$
2,684,242
Operating income (loss)
76,720
68,965
(867,655
)
(877,091
)
Adjusted EBITDA1
204,585
203,782
459,409
488,386
Net loss
(41,325
)
(8,969
)
(1,041,422
)
(1,114,314
)
Cash provided by operating activities2
102,765
96,169
70,217
58,958
Free cash flow1,2
73,345
67,651
(1,957
)
(31,498
)
___________________________
1
See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating income (loss),
(ii) Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash
provided by operating activities, (iv) revenue, excluding political
advertising revenue, to revenue, and (v) Net Debt to Total Debt.
See also the definitions of Adjusted EBITDA, Free Cash Flow,
Adjusted EBITDA margin, and Net Debt under the Supplemental
Disclosure Regarding Non-GAAP Financial Information section in this
release.
2
We made cash interest payments of $107.9
million in the three months ended September 30, 2024, compared to
$108.7 million in the three months ended September 30, 2023.
Certain prior period amounts have been reclassified to conform
to the 2024 presentation of financial information throughout the
press release.
Liquidity and Financial
Position
As of September 30, 2024, we had $431.8 million of cash on our
balance sheet. For the nine months ended September 30, 2024, cash
provided by operating activities was $70.2 million, cash provided
by investing activities was $23.5 million and cash used for
financing activities was $8.4 million.
Capital expenditures for the nine months ended September 30,
2024 were $72.2 million compared to $90.4 million in the nine
months ended September 30, 2023. Capital expenditures during the
nine months ended September 30, 2024 decreased primarily due to
lower spending on real estate optimization initiatives.
As of September 30, 2024, the Company had $5,221.8 million of
total debt and $4,790.1 million of Net Debt. The terms of our
capital structure include no material maintenance covenants, and
there are no material debt maturities prior to May 2026.
Cash balance and total available liquidity4 were $431.8 million
and $858 million, respectively, as of September 30, 2024.
Revenue Streams
The tables below present the comparison of our historical
revenue streams (including political revenue) for the periods
presented:
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2024
2023
Change
2024
2023
Change
Broadcast Radio
$
448,808
$
455,103
(1.4
)%
$
1,233,636
$
1,267,493
(2.7
)%
Networks
115,310
116,334
(0.9
)%
323,952
346,456
(6.5
)%
Sponsorship and Events
50,329
49,500
1.7
%
117,279
120,297
(2.5
)%
Other
5,097
5,446
(6.4
)%
14,047
17,094
(17.8
)%
Multiplatform Group1
619,544
626,383
(1.1
)%
1,688,914
1,751,340
(3.6
)%
Digital ex. Podcast
186,996
164,559
13.6
%
516,433
475,291
8.7
%
Podcast
114,045
102,663
11.1
%
309,190
276,181
12.0
%
Digital Audio Group
301,041
267,222
12.7
%
825,623
751,472
9.9
%
Audio & Media Services
Group1
90,050
61,979
45.3
%
229,300
189,134
21.2
%
Eliminations
(2,502
)
(2,595
)
(7,574
)
(7,704
)
Revenue, total1
$
1,008,133
$
952,989
5.8
%
$
2,736,263
$
2,684,242
1.9
%
1
Excluding the impact of political revenue,
Revenue from the Multiplatform Group and Consolidated Revenue
decreased by 2.9% and increased 2.0% for the three months ended
September 30, 2024 compared to the three months ended September 30,
2023, respectively. Excluding the impact of political revenue,
Revenue from Audio & Media Services increased by 13.7% for the
three months ended September 30, 2024 compared to the three months
ended September 30, 2023. See the end of this press release for a
reconciliation of revenue, excluding political advertising revenue,
to revenue.
Conference Call
iHeartMedia, Inc. will host a conference call to discuss results
and business outlook on November 7, 2024, at 8:30 a.m. Eastern
Time. The conference call number is (888) 596-4144 (U.S. callers)
and +1 (646) 968-2525 (International callers) and the passcode for
both is 8885116. A live audio webcast of the conference call will
also be available on the Investors homepage of iHeartMedia's
website investors.iheartmedia.com. After the live conference call,
a replay will be available for a period of thirty days. The replay
numbers are (800) 770-2030 (U.S. callers) and +1 (609) 800-9909
(International callers) and the passcode for both is 8885116. An
archive of the webcast will be available beginning 24 hours after
the call for a period of thirty days.
About iHeartMedia, Inc.
iHeartMedia (Nasdaq: IHRT) is the number one audio company in
the United States, reaching nine out of 10 Americans every month.
It consists of three business groups.
With its quarter of a billion monthly listeners, the iHeartMedia
Multiplatform Group has a greater reach than any other media
company in the U.S. Its leadership position in audio extends across
multiple platforms, including more than 860 live broadcast stations
in over 160 markets nationwide; its National Sales organization;
and the Company’s live and virtual events business. It also
includes Premiere Networks, the industry’s largest Networks
business, with its Total Traffic and Weather Network (TTWN); and
BIN: Black Information Network, the first and only 24/7 national
and local all news audio service for the Black community.
iHeartMedia also leads the audio industry in analytics, targeting
and attribution for its marketing partners with its SmartAudio
suite of data targeting and attribution products using data from
its massive consumer base.
The iHeartMedia Digital Audio Group includes the Company’s
fast-growing podcasting business -- iHeartMedia is the number one
podcast publisher in downloads, unique listeners, revenue and
earnings -- as well as its industry-leading iHeartRadio digital
service, available across more than 500+ platforms and thousands of
devices; the Company’s digital sites, newsletters, digital services
and programs; its digital advertising technology companies; and its
audio industry-leading social media footprint.
The Company’s Audio & Media Services reportable segment
includes Katz Media Group, the nation’s largest media
representation company, and RCS, the world's leading provider of
broadcast and webcast software.
Certain statements herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors which
may cause the actual results, performance or achievements of
iHeartMedia, Inc. and its subsidiaries to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. The words or phrases
“guidance,” “believe,” “expect,” “anticipate,” “estimates,”
“forecast” and similar words or expressions are intended to
identify such forward-looking statements. These forward-looking
statements include, but are not limited to, statements related to
the transactions described above, including the Company’s ability
to complete any of the transactions on the terms contemplated by
the transaction support agreement, on the timeline contemplated or
at all, and the Company’s ability to realize the intended benefits
of any such transactions. In addition, any statements that refer to
expectations or other characterizations of future events or
circumstances, such as statements about positioning in uncertain
economic environment and future economic recovery, driving
shareholder value, our anticipated growth and year-over-year
financial performance, our anticipated political advertising
revenues for 2024; our expected costs savings and other capital and
operating expense reduction initiatives, utilizing new technologies
and programmatic platforms, developing new consumer and revenue
opportunities; improving operational efficiency, future advertising
demand, trends in the advertising industry, including on other
media platforms; strategies and initiatives, and our anticipated
financial performance, including our outlook as to fourth quarter
and full year 2024 consolidated and operating segment results,
anticipated capital expenditures and other impacts on our free cash
flow, including our outlook as to fourth quarter and full year 2024
and 2025 consolidated and operating segment results, anticipated
capital expenditures and other impacts on our free cash flow
liquidity, and net leverage are forward-looking statements. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and other important factors, some
of which are beyond our control and are difficult to predict.
Various risks that could cause future results to differ from those
expressed by the forward-looking statements included in this press
release include, but are not limited to: risks related to weak or
uncertain global economic conditions and our dependence on
advertising revenues; competition, including increased competition
from alternative media platforms and technologies; dependence upon
our brand and the performance of on-air talent, program hosts and
management; fluctuations in operating costs; technological and
industry changes and innovations; shifts in population and other
demographics; risks related to our use of artificial intelligence,
impact of acquisitions, dispositions and other strategic
transactions; risks related to our indebtedness; legislative or
regulatory requirements; impact of legislation, ongoing litigation
or royalty audits on music licensing and royalties; regulations and
concerns regarding privacy and data protection and breaches of
information security measures; risks related to scrutiny of
environmental, social and governance matters, risks related to our
Class A common stock; and regulations impacting our business and
the ownership of our securities. Other unknown or unpredictable
factors also could have material adverse effects on the Company’s
future results, performance or achievements. In light of these
risks, uncertainties, assumptions and factors, the forward-looking
events discussed in this press release may not occur. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date stated, or if no date
is stated, as of the date hereof. Additional risks that could cause
future results to differ from those expressed by any
forward-looking statement are described in the Company’s reports
filed with the U.S. Securities and Exchange Commission, including
in the section entitled “Part I, Item 1A. Risk Factors” of
iHeartMedia, Inc.’s Annual Reports on Form 10-K and “Part II, Item
1A. Risk Factors” of iHeartMedia, Inc.’s Quarterly Reports on Form
10-Q. The Company does not undertake any obligation to publicly
update or revise any forward-looking statements because of new
information, future events or otherwise.
APPENDIX
TABLE 1 - Comparison of operating
performance
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
1,008,133
$
952,989
5.8
%
$
2,736,263
$
2,684,242
1.9
%
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
409,745
379,997
7.8
%
1,133,154
1,079,678
5.0
%
Selling, general and administrative
expenses (excludes depreciation and amortization)
418,833
393,628
6.4
%
1,235,591
1,190,202
3.8
%
Depreciation and amortization
101,331
106,451
310,849
323,028
Impairment charges
412
570
922,144
965,087
Other operating expense
1,092
3,378
2,180
3,338
Operating income (loss)
$
76,720
$
68,965
$
(867,655
)
$
(877,091
)
Depreciation and amortization
101,331
106,451
310,849
323,028
Impairment charges
412
570
922,144
965,087
Other operating expense
1,092
3,378
2,180
3,338
Restructuring expenses
16,767
16,227
67,928
46,469
Share-based compensation expense
8,263
8,191
23,963
27,555
Adjusted EBITDA1
$
204,585
$
203,782
0.4
%
$
459,409
$
488,386
(5.9
)%
1See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating income (loss),
(ii) Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash
provided by operating activities, (iv) revenue, excluding political
advertising revenue, to revenue, and (v) Net Debt to Total Debt.
See also the definitions of Adjusted EBITDA, Free Cash Flow,
Adjusted EBITDA margin and Net Debt under the Supplemental
Disclosure section in this release.
TABLE 2 - Statements of
Operations
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
$
1,008,133
$
952,989
$
2,736,263
$
2,684,242
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
409,745
379,997
1,133,154
1,079,678
Selling, general and administrative
expenses (excludes depreciation and amortization)
418,833
393,628
1,235,591
1,190,202
Depreciation and amortization
101,331
106,451
310,849
323,028
Impairment charges
412
570
922,144
965,087
Other operating expense
1,092
3,378
2,180
3,338
Operating income (loss)
76,720
68,965
(867,655
)
(877,091
)
Interest expense, net
95,715
99,509
286,807
293,659
Gain (loss) on investments, net
(103
)
(7,381
)
91,479
(19,924
)
Equity in loss of nonconsolidated
affiliates
(2,587
)
(3,514
)
(2,693
)
(3,518
)
Gain on extinguishment of debt
—
23,947
—
51,474
Other income (expense), net
1,195
(738
)
468
(1,109
)
Loss before income taxes
(20,490
)
(18,230
)
(1,065,208
)
(1,143,827
)
Income tax benefit (expense)
(20,835
)
9,261
23,786
29,513
Net loss
(41,325
)
(8,969
)
(1,041,422
)
(1,114,314
)
Less amount attributable to noncontrolling
interest
(60
)
84
9
1,469
Net loss attributable to the Company
$
(41,265
)
$
(9,053
)
$
(1,041,431
)
$
(1,115,783
)
TABLE 3 - Selected Balance Sheet
Information
Selected balance sheet information for September 30, 2024 and
December 31, 2023:
(In millions)
September 30, 2024
December 31, 2023
Cash
$
431.8
$
346.4
Total Current Assets
1,508.0
1,506.9
Net Property, Plant and Equipment
500.2
558.9
Total Assets
5,779.0
6,952.6
Current Liabilities (excluding current
portion of long-term debt)
779.3
848.1
Long-term Debt (including current portion
of long-term debt)
5,221.8
5,215.2
Stockholders' Deficit
(1,409.4
)
(384.8
)
Supplemental Disclosure Regarding
Non-GAAP Financial Information
The following tables set forth the Company’s Adjusted EBITDA,
Adjusted EBITDA margin, revenues excluding political advertising
revenue, and Free Cash Flow for the three and nine months ended
September 30, 2024 and 2023, and Net Debt as of September 30, 2024.
Adjusted EBITDA is defined as consolidated Operating income (loss)
adjusted to exclude restructuring expenses included within Direct
operating expenses and SG&A expenses, and share-based
compensation expenses included within SG&A expenses, as well as
the following line items presented in our Statements of Operations:
Depreciation and amortization, Impairment charges, and Other
operating expense. Alternatively, Adjusted EBITDA is calculated as
Net loss, adjusted to exclude Income tax (benefit) expense,
Interest expense, net, Depreciation and amortization, (Gain) loss
on investments, net, Gain on extinguishment of debt, Other (income)
expense, net, Equity in loss of nonconsolidated affiliates,
Impairment charges, Other operating expense, Share-based
compensation expense, and restructuring expenses. Restructuring
expenses primarily include expenses incurred in connection with
cost-saving initiatives, as well as certain expenses, which, in the
view of management, are outside the ordinary course of business or
otherwise not representative of the Company's operations during a
normal business cycle. Adjusted EBITDA margin is calculated as
Adjusted EBITDA divided by Revenue.
The Company uses Adjusted EBITDA and Adjusted EBITDA margin,
among other measures, to evaluate the Company’s operating
performance. Adjusted EBITDA is among the primary measures used by
management for the planning and forecasting of future periods, as
well as for measuring performance for compensation of executives
and other members of management. We believe this measure is an
important indicator of the Company’s operational strength and
performance of its business because it provides a link between
operational performance and operating income. It is also a primary
measure used by management in evaluating companies as potential
acquisition targets.
The Company believes the presentation of these measures is
relevant and useful for investors because it allows investors to
view performance in a manner similar to the method used by the
Company’s management. The Company believes it helps improve
investors’ ability to understand the Company’s operating
performance and makes it easier to compare the Company’s results
with other companies that have different capital structures or tax
rates. In addition, the Company believes this measure is also among
the primary measures used externally by the Company’s investors,
analysts and peers in its industry for purposes of valuation and
comparing the operating performance of the Company to other
companies in its industry.
Since Adjusted EBITDA is not a measure calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, Operating 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 the Company’s ability to fund its cash
needs. As it excludes certain financial information compared with
Operating income (loss), the most directly comparable GAAP
financial measure, users of this financial information should
consider the types of events and transactions which are
excluded.
We define Free Cash Flow as Cash provided by operating
activities less capital expenditures, which is disclosed as
Purchases of property, plant and equipment in the Company's
Consolidated Statements of Cash Flows. We use Free Cash Flow, among
other measures, to evaluate the Company’s liquidity and its ability
to generate cash flow. We believe that Free Cash Flow is meaningful
to investors because it provides them with a view of the Company's
liquidity after deducting capital expenditures, which are
considered to be a necessary component of ongoing operations. In
addition, we believe that Free Cash Flow helps improve investors'
ability to compare our liquidity with that of other companies.
Since Free Cash Flow is not a measure calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, Cash provided by operating activities and may not
be comparable to similarly titled measures employed by other
companies. Free Cash Flow is not necessarily a measure of our
ability to fund our cash needs.
The Company presents revenue, excluding the effects of political
revenue. Due to the cyclical nature of the electoral system and the
seasonality of the related political revenue, management believes
presenting revenue, excluding the effects of political revenue,
provides additional information to investors about the Company’s
revenue growth from period to period.
We define Net Debt as Total Debt less Cash and cash equivalents.
We define net leverage as Net Debt divided by Adjusted EBITDA. The
Company uses net leverage and Net Debt to evaluate the Company's
liquidity. We believe these measures are an important indicator of
the Company's ability to service its long-term debt
obligations.
Since these non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered in isolation
of, or as a substitute for, the most directly comparable GAAP
financial measures as an indicator of operating performance or
liquidity.
As required by the SEC rules, the Company provides
reconciliations below to the most directly comparable measures
reported under GAAP, including (i) Adjusted EBITDA to Operating
income (loss), (ii) Adjusted EBITDA to Net loss, (iii) Free Cash
Flow to Cash provided by operating activities, (iv) revenue,
excluding political advertising revenue, to revenue, and (v) Net
Debt to Total Debt.
We have provided forecasted Consolidated Revenue and Adjusted
EBITDA guidance for the quarter ending December 31, 2024 and the
full year 2024 and 2025, which reflects targets for Adjusted EBITDA
and net debt. Our Earnings Call on November 7, 2024 may present
additional guidance that includes Adjusted EBITDA. A full
reconciliation of the forecasted Adjusted EBITDA, net debt and net
leverage on a non-GAAP basis to the respective most-directly
comparable GAAP metrics cannot be provided without unreasonable
efforts due to the inherent difficulty in forecasting and
quantifying with reasonable accuracy significant items required for
the reconciliations, including gains or losses on investments,
extinguishment of debt, equity in nonconsolidated affiliates,
impairment charges, stock based compensation, and restructuring as
well as the Company's cash and cash equivalent balance.
Reconciliation of Operating income (loss) to Adjusted
EBITDA
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended June
30,
2024
2023
2024
2023
2024
Operating income (loss)
$
76,720
$
68,965
$
(867,655
)
$
(877,091
)
$
(909,667
)
Depreciation and amortization
101,331
106,451
310,849
323,028
104,356
Impairment charges
412
570
922,144
965,087
920,224
Other operating income, net
1,092
3,378
2,180
3,338
516
Restructuring expenses
16,767
16,227
67,928
46,469
27,558
Share-based compensation expense
8,263
8,191
23,963
27,555
7,220
Adjusted EBITDA
$
204,585
$
203,782
$
459,409
$
488,386
$
150,207
Reconciliation of Net loss to EBITDA and Adjusted
EBITDA
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended June
30,
2024
2023
2024
2023
2024
Net loss
$
(41,325
)
$
(8,969
)
$
(1,041,422
)
$
(1,114,314
)
$
(981,989
)
Income tax (benefit) expense
20,835
(9,261
)
(23,786
)
(29,513
)
(23,959
)
Interest expense, net
95,715
99,509
286,807
293,659
95,577
Depreciation and amortization
101,331
106,451
310,849
323,028
104,356
EBITDA
$
176,556
$
187,730
$
(467,552
)
$
(527,140
)
$
(806,015
)
(Gain) loss on investments, net
103
7,381
(91,479
)
19,924
412
Gain on extinguishment of debt
—
(23,947
)
—
(51,474
)
—
Other (income) expense, net
(1,195
)
738
(468
)
1,109
231
Equity in loss of nonconsolidated
affiliates
2,587
3,514
2,693
3,518
61
Impairment charges
412
570
922,144
965,087
920,224
Other operating income, net
1,092
3,378
2,180
3,338
516
Restructuring expenses
16,767
16,227
67,928
46,469
27,558
Share-based compensation expense
8,263
8,191
23,963
27,555
7,220
Adjusted EBITDA
$
204,585
$
203,782
$
459,409
$
488,386
$
150,207
Reconciliation of Cash provided by operating activities to
Free Cash Flow
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Cash provided by operating activities
$
102,765
$
96,169
$
70,217
$
58,958
Purchases of property, plant and
equipment
(29,420
)
(28,518
)
(72,174
)
(90,456
)
Free cash flow
$
73,345
$
67,651
$
(1,957
)
$
(31,498
)
Net proceeds from real estate sales1
210
—
210
4,629
Free cash flow including net proceeds from
real estate sales
$
73,555
$
67,651
$
(1,747
)
$
(26,869
)
(1) We deployed significant capital
expenditures to accelerate the proactive streamlining of our real
estate footprint. This initiative has succeeded in making certain
real estate assets redundant, enabling the Company to sell such
assets to partially fund the initiative’s gross capital
expenditures.
Reconciliation of Revenue to Revenue excluding Political
Advertising
(In thousands)
Three Months Ended
September 30,
%
Change
Nine Months Ended
September 30,
%
Change
2024
2023
2024
2023
Consolidated revenue
$
1,008,133
$
952,989
5.8
%
$
2,736,263
$
2,684,242
1.9
%
Excluding: Political revenue
(44,004
)
(7,978
)
(70,539
)
(18,246
)
Consolidated revenue, excluding
political
$
964,129
$
945,011
2.0
%
$
2,665,724
$
2,665,996
—
%
Multiplatform Group revenue
$
619,544
$
626,383
(1.1
)%
$
1,688,914
$
1,751,340
(3.6
)%
Excluding: Political revenue
(16,414
)
(5,294
)
(32,103
)
(13,123
)
Multiplatform Group revenue, excluding
political
$
603,130
$
621,089
(2.9
)%
$
1,656,811
$
1,738,217
(4.7
)%
Digital Audio Group revenue
$
301,041
$
267,222
12.7
%
$
825,623
$
751,472
9.9
%
Excluding: Political revenue
(5,323
)
(320
)
(6,804
)
(1,666
)
Digital Audio Group revenue, excluding
political
$
295,718
$
266,902
10.8
%
$
818,819
$
749,806
9.2
%
Audio & Media Group Services
revenue
$
90,050
$
61,979
45.3
%
$
229,300
$
189,134
21.2
%
Excluding: Political revenue
(22,267
)
(2,363
)
(31,632
)
(3,457
)
Audio & Media Services Group revenue,
excluding political
$
67,783
$
59,616
13.7
%
$
197,668
$
185,677
6.5
%
Reconciliation of Total Debt to Net Debt
(In thousands)
September 30,
2024
Current portion of long-term debt
$
1,059
Long-term debt
5,220,788
Total debt
$
5,221,847
Less: Cash and cash equivalents
431,764
Net debt
$
4,790,083
Segment Results
The following tables present the Company's segment results for
the Company for the periods presented:
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Three Months Ended September 30,
2024
Revenue
$
619,544
$
301,041
$
90,050
$
—
$
(2,502
)
$
1,008,133
Operating expenses(1)
489,672
201,035
45,641
69,702
(2,502
)
803,548
Adjusted EBITDA
$
129,872
$
100,006
$
44,409
$
(69,702
)
$
—
$
204,585
Adjusted EBITDA margin
21.0
%
33.2
%
49.3
%
20.3
%
Depreciation and amortization
(101,331
)
Impairment charges
(412
)
Other operating expense, net
(1,092
)
Restructuring expenses
(16,767
)
Share-based compensation expense
(8,263
)
Operating income
$
76,720
Operating margin
7.6
%
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Three Months Ended September 30,
2023
Revenue
$
626,383
$
267,222
$
61,979
$
—
$
(2,595
)
$
952,989
Operating expenses(1)
463,939
173,565
45,003
69,295
(2,595
)
749,207
Adjusted EBITDA
$
162,444
$
93,657
$
16,976
$
(69,295
)
$
—
$
203,782
Adjusted EBITDA margin
25.9
%
35.0
%
27.4
%
21.4
%
Depreciation and amortization
(106,451
)
Impairment charges
(570
)
Other operating expense, net
(3,378
)
Restructuring expenses
(16,227
)
Share-based compensation expense
(8,191
)
Operating income
$
68,965
Operating margin
7.2
%
(1) Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses and share-based compensation expenses.
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Nine Months Ended September 30,
2024
Revenue
$
1,688,914
$
825,623
$
229,300
$
—
$
(7,574
)
$
2,736,263
Operating expenses(1)
1,377,597
565,620
137,347
203,864
(7,574
)
2,276,854
Adjusted EBITDA
$
311,317
$
260,003
$
91,953
$
(203,864
)
$
—
$
459,409
Adjusted EBITDA margin
18.4
%
31.5
%
40.1
%
16.8
%
Depreciation and amortization
(310,849
)
Impairment charges
(922,144
)
Other operating expense, net
(2,180
)
Restructuring expenses
(67,928
)
Share-based compensation expense
(23,963
)
Operating loss
$
(867,655
)
Operating margin
(31.7
)%
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Nine Months Ended September 30,
2023
Revenue
$
1,751,340
$
751,472
$
189,134
$
—
$
(7,704
)
$
2,684,242
Operating expenses(1)
1,339,441
519,115
138,315
206,689
(7,704
)
2,195,856
Adjusted EBITDA
$
411,899
$
232,357
$
50,819
$
(206,689
)
$
—
$
488,386
Adjusted EBITDA margin
23.5
%
30.9
%
26.9
%
18.2
%
Depreciation and amortization
(323,028
)
Impairment charges
(965,087
)
Other operating income, net
(3,338
)
Restructuring expenses
(46,469
)
Share-based compensation expense
(27,555
)
Operating loss
$
(877,091
)
Operating margin
(32.7
)%
(1) Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses and share-based compensation expenses.
___________________________
1 Unless otherwise noted, all results are
based on year over year comparisons.
2 Total available liquidity is defined as
cash and cash equivalents plus available borrowings under our ABL
Facility. We use total available liquidity to evaluate our capacity
to access cash to meet obligations and fund operations.
3 A full reconciliation of forecasted
Adjusted EBITDA, net debt and net leverage on a non-GAAP basis to
the respective most-directly comparable GAAP metrics cannot be
provided without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying with reasonable accuracy
significant items required for the reconciliations, including gains
or losses on investments, extinguishment of debt, equity in
nonconsolidated affiliates, impairment charges, stock based
compensation, and restructuring as well as the Company’s cash and
cash equivalents balance.
4 Total available liquidity is defined as
cash and cash equivalents plus available borrowings under our ABL
Facility. We use total available liquidity to evaluate our capacity
to access cash to meet obligations and fund operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107644728/en/
Media Wendy Goldberg Chief
Communications Officer (212) 377-1105
wendygoldberg@iheartmedia.com
Investors Mike McGuinness EVP,
Deputy CFO, and Head of Investor Relations (212) 377-1336
mbm@iheartmedia.com
Grafico Azioni iHeartMedia (NASDAQ:IHRT)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni iHeartMedia (NASDAQ:IHRT)
Storico
Da Nov 2023 a Nov 2024
