iHeartMedia, Inc. (Nasdaq: IHRT) today reported financial
results for the quarter ended September 30, 2022.
Financial Highlights:
Q3 2022 Consolidated
Results
- Q3 Revenue of $989 million, up 7% YoY; at high end of guidance
of up approximately 3%-7%
- GAAP Operating loss of $211 million vs. GAAP Operating income
of $80 million in Q3 2021
- Includes FCC license non-cash impairment charge of $302 million
driven by increase in interest rates
- Consolidated Adjusted EBITDA of $252 million increased 10% YoY;
at high end of guidance of $240 million to $255 million
- Consolidated Adjusted EBITDA margin of 25.5%, up 70 bps from
24.8% in Q3 2021
- Cash Flows from operating activities of $103 million
- Free Cash Flow of $63 million; Free Cash Flow including $8
million of net proceeds from real estate sales was $70 million
Q3 2022 Digital Audio Group Continues
Strong Growth
- Digital Audio Group Revenue of $254 million up 23% YoY
- Podcast Revenue of $91 million up 42% YoY
- Digital Revenue excluding Podcast of $163 million up 15%
YoY
- Segment Adjusted EBITDA of $78 million increased 17% YoY
- Digital Audio Group Adjusted EBITDA margin of 30.8%
Q3 2022 Multiplatform Group
Demonstrates Resilience
- Multiplatform Group Revenue of $660 million flat YoY
- Segment Adjusted EBITDA of $207 million decreased 1% YoY
- Multiplatform Group Adjusted EBITDA margin of 31.4%
Strong Free Cash Flow Generation,
Proactive Capital Structure Improvement and Debt
Paydown
- Free Cash Flow of $63 million; including $8 million of net
proceeds from real estate sales, Free Cash Flow including net
proceeds from real estate sales was $70 million
- Cash balance and total available liquidity1 of $295 million and
$718 million, respectively, as of September 30, 2022
- Repurchased $75 million in principal balance of 8.375% Senior
Unsecured Notes (at a discount to par) for $68 million in cash;
expected to generate approximately $6 million of annualized
interest savings
- As of September 30th combined Notes repurchases of $189 million
at a discount to par of $173 million; expected to generate
approximately $16 million of annualized interest savings
Guidance
- Q4 Consolidated Revenue expected to increase by approximately
2%-6% YoY
- October Consolidated Revenue up approximately 8% YoY impacted
by strong political spend
- Q4 Consolidated Adjusted EBITDA expected to be $305 million to
$325 million
- Expect to make significant progress in 2022 towards the
previously announced Net Debt to Adjusted EBITDA ("net leverage")
target of approximately 4x
_________________________________
1
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.
Statement from Senior Management
“We’re pleased to report another quarter of solid operating
results for iHeart, and our performance in the midst of the current
climate of economic uncertainty is a strong indication of the
successful transformation this company has undergone in which our
high-growth digital revenues comprises 26% of total company
revenues,” said Bob Pittman, Chairman and CEO of iHeartMedia, Inc.
“Our Digital Audio Group continues to deliver industry-leading
growth, and our Multiplatform Group has again demonstrated its
resiliency during a difficult economic environment. We believe the
strong positions of both of these groups with both consumers and
advertisers give us the ability to both navigate through this
period of economic uncertainty and position us for continued growth
through the recovery and beyond.”
“This quarter our Adjusted EBITDA of $252 million, and our
consolidated revenues, up approximately 7% year over year, were
both at the high end of our guidance range – a solid performance
despite the uncertain macroeconomic environment,” said Rich
Bressler, President, Chief Operating Officer and Chief Financial
Officer of iHeartMedia, Inc. “We also continue to keep
profitability and Free Cash Flow Generation at the forefront, and
despite this uncertain environment, our business has continued to
achieve year over year growth in users, revenues, Adjusted EBITDA
and Free Cash Flow.”
Consolidated Results of
Operations
Third Quarter 2022 Consolidated
Results
Our consolidated revenue increased $60.9 million, or 6.6%,
during the three months ended September 30, 2022 compared to the
same period of 2021. Digital Audio revenue increased $48.2 million,
or 23.4%, driven primarily by continuing increases in demand for
digital advertising and the continued growth of podcasting.
Multiplatform revenue increased $0.9 million, or 0.1%, primarily
resulting from increased political advertising revenue as 2022 is
midterm election year, partially offset by a decrease in revenue
due to a more challenging macroeconomic environment. Audio &
Media Services revenue increased $11.7 million due to the increase
in political advertising revenue.
Consolidated direct operating expenses increased $46.0 million,
or 14.1%, during the three months ended September 30, 2022 compared
to the same period of 2021. The increase in direct operating
expenses was primarily driven by higher variable content, talent
and profit sharing expenses in our Digital Audio Group and our
Multiplatform Group.
Consolidated Selling, General & Administrative ("SG&A")
expenses increased $9.8 million, or 2.5%, during the three months
ended September 30, 2022 compared to the same period of 2021. The
increase in Consolidated SG&A expenses was driven primarily by
costs incurred in connection with executing on our cost reduction
initiatives as well as increased sales commission expenses as a
result of higher revenue. These increases were partially offset by
lower variable bonus expense.
Our consolidated GAAP Operating loss was $211.2 million compared
to Operating income of $80.1 million in the third quarter of 2021,
which was driven primarily by a non-cash impairment charge of
$302.1 million attributable to our FCC licenses as a result of
increased interest rates.
Adjusted EBITDA increased to $252.2 million compared to $230.2
million in the prior-year period.
The Company generated $103.1 million of cash from operating
activities, compared to $95.7 million in the prior-year period, and
Free Cash Flow was $62.8 million, compared to $45.5 million in the
prior-year period primarily due to an increase in cash flows from
operations due to political advertising revenue as 2022 is a
midterm election year and the continued growth of our Digital Audio
Group business.
Business Segments: Results of
Operations
Third Quarter 2022 Multiplatform Group
Results
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2022
2021
Change
2022
2021
Change
Revenue
$ 659,896
$ 658,979
0.1 %
$ 1,864,356
$ 1,762,726
5.8 %
Operating expenses1
452,631
450,549
0.5 %
1,328,688
1,268,107
4.8 %
Segment Adjusted EBITDA
$ 207,265
$ 208,430
(0.6) %
$ 535,668
$ 494,619
8.3 %
Segment Adjusted EBITDA margin
31.4 %
31.6 %
28.7 %
28.1 %
1 Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring Expenses.
Revenue from our Multiplatform Group increased $0.9 million, or
0.1% YoY, as a result of increased political advertising revenue as
2022 is a midterm election year, partially offset by a decrease in
revenue due to a more challenging macroeconomic environment.
Broadcast revenue grew $2.1 million, or 0.4% YoY, driven by higher
political advertising revenue and an increase in trade and barter
revenue, partially offset by lower spot revenue, while Networks
declined $(0.7) million, or 0.5% YoY. Revenue from Sponsorship and
Events decreased by $(0.1) million, or 0.2% YoY.
Operating expenses increased $2.1 million, or 0.5% YoY, driven
primarily by higher content, talent and profit sharing expenses,
partially offset by a decrease in variable bonus expense which was
lower in the third quarter of 2022 compared to the prior year based
on financial performance compared to targets.
Segment Adjusted EBITDA Margin modestly decreased YoY to 31.4%
from 31.6%.
Third Quarter 2022 Digital Audio Group
Results
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2022
2021
Change
2022
2021
Change
Revenue
$ 253,953
$ 205,769
23.4 %
$ 720,733
$ 561,252
28.4 %
Operating expenses1
175,636
138,646
26.7 %
511,025
399,828
27.8 %
Segment Adjusted EBITDA
$ 78,317
$ 67,123
16.7 %
$ 209,708
$ 161,424
29.9 %
Segment Adjusted EBITDA margin
30.8 %
32.6 %
29.1 %
28.8 %
1 Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring Expenses.
Revenue from our Digital Audio Group increased $48.2 million
compared to the prior year, including growth from Digital,
excluding Podcast revenue, which grew $21.1 million, or 14.9%, YoY,
to $162.7 million, driven by increased demand for digital
advertising as well as Podcast revenue which increased by $27.1
million, or 42.1%, YoY, to $91.3 million, driven by higher revenues
from the development of new podcasts as well as growth from
existing podcasts. Digital Audio Group revenue increased as a
result of general increased demand for digital advertising and the
growing popularity of podcasting.
Operating expenses increased $37.0 million, or 26.7% YoY, due to
higher variable content and production costs primarily resulting
from the development of new podcasts and higher third-party digital
costs and profit share expenses primarily resulting from higher
revenue.
Segment Adjusted EBITDA Margin decreased YoY to 30.8% from
32.6%.
Third Quarter 2022 Audio & Media
Services Group Results
(In thousands)
Three Months Ended
September 30,
%
Nine Months Ended
September 30,
%
2022
2021
Change
2022
2021
Change
Revenue
$ 77,794
$ 66,078
17.7 %
$ 209,716
$ 182,390
15.0 %
Operating expenses1
48,044
43,656
10.1 %
141,509
124,148
14.0 %
Segment Adjusted EBITDA
$ 29,750
$ 22,422
32.7 %
$ 68,207
$ 58,242
17.1 %
Segment Adjusted EBITDA margin
38.2 %
33.9 %
32.5 %
31.9 %
1 Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring Expenses.
Revenue from our Audio & Media Services Group increased
$11.7 million, or 17.7% YoY, due to an increase in political
advertising revenue as 2022 is a midterm election year.
Operating expenses increased $4.4 million, or 10.1% YoY,
primarily as a result of higher employee compensation related to
seasonal (political) staffing, higher merchandising costs and a new
purchase agreement with third-parties for specific inventory
spots.
Segment Adjusted EBITDA Margin increased YoY to 38.2% from
33.9%.
GAAP and Non-GAAP Measures: Consolidated
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenue
$
988,930
$
928,051
$
2,786,393
$
2,496,321
Operating income (loss)
$
(211,187
)
$
80,111
$
(115,983
)
$
31,881
Adjusted EBITDA1
$
252,242
$
230,213
$
634,645
$
516,968
Net income (loss)
$
(309,776
)
$
3,673
$
(343,333
)
$
(270,343
)
Cash provided by operating activities2
$
103,110
$
95,736
$
206,699
$
196,593
Free cash flow1,2
$
62,753
$
45,462
$
94,132
$
95,258
Free cash flow including net proceeds from
real estate sales1,2
$
70,453
$
54,072
$
125,667
$
116,309
_________________________________
1
See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating income, (ii)
Adjusted EBITDA to net income (loss), (iii) Free Cash Flow and Free
cash flow including net proceeds from real estate sales to cash
provided by (used for) operating activities, (iv) revenue,
excluding political advertising revenue, to revenue, and (v) Net
Debt to Total Debt. See also the definitions of Adjusted EBITDA,
Free Cash Flow, Free cash flow including net proceeds from real
estate sales, 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 $89.9
million in the three months ended September 30, 2022, compared to
$79.2 million in the three months ended September 30, 2021. We made
cash interest payments of $249.9 million in the nine months ended
September 30, 2022, compared to $247.5 million in the nine months
ended September 30, 2021.
Certain prior period amounts have been reclassified to conform
to the 2022 presentation of financial information throughout the
press release.
Liquidity and Financial
Position
As of September 30, 2022, we had $295.4 million of cash on our
balance sheet. For the nine months ended September 30, 2022, cash
provided by operating activities was $206.7 million, cash used for
investing activities was $82.8 million and cash used for financing
activities was $179.7 million.
Capital expenditures for the nine months ended September 30,
2022 were $112.6 million compared to $101.3 million in the nine
months ended September 30, 2021. Capital expenditures during the
nine months ended September 30, 2022 increased primarily due to our
real estate consolidation initiatives aimed at reducing our
structural cost base.
As of September 30, 2022, the Company had $5,553.7 million of
total debt and $5,258.3 million of Net Debt. The terms of our
capital structure include no material maintenance covenants, and
there are no material debt maturities prior to 2026, providing
structural resilience. During the three months ended September 30,
2022, we repurchased $75.0 million in aggregate principal amount of
iHeartCommunications Inc.'s 8.375% Senior Unsecured Notes due 2027
(at a discount to par) for $68.1 million in cash.
Cash balance and total available liquidity2 were $295.4 million
and $718.4 million, respectively, as of September 30, 2022.
The Company believes its previously announced modernization
initiatives and other cost saving actions - in combination with the
Company’s resilient capital structure - have substantially expanded
the Company’s financial flexibility and liquidity while positioning
the Company for further margin improvement over time.
_________________________________
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.
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,
%
2022
2021
Change
2022
2021
Change
Broadcast Radio
$
485,571
$
483,456
0.4
%
$
1,365,356
$
1,293,134
5.6
%
Networks
127,239
127,920
(0.5
)%
372,329
366,592
1.6
%
Sponsorship and Events
42,562
42,663
(0.2
)%
114,226
93,641
22.0
%
Other
4,524
4,940
(8.4
)%
12,445
9,359
33.0
%
Multiplatform Group1,2
659,896
658,979
0.1
%
1,864,356
1,762,726
5.8
%
Digital ex. Podcast
162,700
141,573
14.9
%
475,254
405,276
17.3
%
Podcast
91,253
64,196
42.1
%
245,479
155,976
57.4
%
Digital Audio Group
253,953
205,769
23.4
%
720,733
561,252
28.4
%
Audio & Media Services
Group1,2
77,794
66,078
17.7
%
209,716
182,390
15.0
%
Eliminations
(2,713
)
(2,775
)
(8,412
)
(10,047
)
Revenue, total
$
988,930
$
928,051
6.6
%
$
2,786,393
$
2,496,321
11.6
%
1
Excluding the impact of political revenue,
Revenue from the Multiplatform Group and Revenue, total increased
by 1.8% and 3.8% for the three months ended September 30, 2022
compared to the three months ended September 30, 2021,
respectively. Excluding the impact of political revenue, Revenue
from Audio & Media Services increased by 0.1% for the three
months ended September 30, 2022 compared to the three months ended
September 30, 2021. See the end of this press release for a
reconciliation of revenue, excluding political advertising revenue,
to revenue.
2
Excluding the impact of political revenue,
Revenue from the Multiplatform Group and Revenue, total increased
by 4.4% and 9.8% for the nine months ended September 30, 2022
compared to the nine months ended September 30, 2021, respectively.
Excluding the impact of political revenue, Revenue from Audio &
Media Services increased by 4.8% for the nine months ended
September 30, 2022 compared to the nine months ended September 30,
2021. 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 3, 2022, at 4:30 p.m. Eastern Time. The
conference call number is (888) 330-2446 (U.S. callers) and +1
(240) 789-2732 (International callers) and the passcode for both is
71596. 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 (647) 362-9199
(International callers) and the passcode for both is 71596. 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 250 platforms and 2,000
devices; the company’s digital sites, newsletters, digital services
and programs; its digital advertising technology companies; and its
audio industry-leading social media footprint.
The company’s Audio & Media Services reportable segment
includes Katz Media Group, the nation’s largest media
representation company, and RCS, the world's leading provider of
broadcast and webcast software.
Certain statements herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors which
may cause the actual results, performance or achievements of
iHeartMedia, Inc. and its subsidiaries to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. The words or phrases
“guidance,” “believe,” “expect,” “anticipate,” “estimates,”
“forecast” and similar words or expressions are intended to
identify such forward-looking statements. In addition, any
statements that refer to expectations or other characterizations of
future events or circumstances, such as statements about
expectations regarding economic recovery and the recovery of
advertising revenue, our expectations about future continued
growth, expectations regarding the Company's digital
transformation, financial performance of our segments, our capital
and operating expense reduction initiatives, our business plans,
strategies and initiatives, expected interest rates and interest
expense savings, our expectations about certain markets and our
anticipated financial performance, 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; the impact of the COVID-19 pandemic; increased
competition; dependence upon the performance of on-air talent,
program hosts and management; fluctuations in operating costs;
technological changes and innovations; shifts in population and
other demographics; impact of our substantial indebtedness; impact
of acquisitions, dispositions and other strategic transactions;
information technology and cyber-security risks; 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; 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 “Item 1A. Risk Factors” of iHeartMedia, Inc.’s Annual
Reports on Form 10-K and 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,
%
2022
2021
Change
2022
2021
Change
Revenue
$
988,930
$
928,051
6.6
%
$
2,786,393
$
2,496,321
11.6
%
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
371,719
325,766
14.1
%
1,067,625
939,094
13.7
%
Selling, general and administrative
expenses (excludes depreciation and amortization)
399,892
390,086
2.5
%
1,163,293
1,105,056
5.3
%
Depreciation and amortization
109,305
108,100
334,144
343,408
Impairment charges
309,750
11,647
311,329
49,391
Other operating expense, net
9,451
12,341
25,985
27,491
Operating income (loss)
$
(211,187
)
$
80,111
$
(115,983
)
$
31,881
Depreciation and amortization
109,305
108,100
334,144
343,408
Impairment charges
309,750
11,647
311,329
49,391
Other operating expense, net
9,451
12,341
25,985
27,491
Share-based compensation expense
10,437
5,993
24,582
17,581
Restructuring expenses
24,486
12,021
54,588
47,216
Adjusted EBITDA1
$
252,242
$
230,213
9.6
%
$
634,645
$
516,968
22.8
%
Certain prior period amounts have been reclassified to conform
to the 2022 presentation of financial information throughout the
press release.
1
See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating income, (ii)
Adjusted EBITDA to net income (loss), (iii) Free Cash Flow and Free
cash flow including net proceeds from real estate sales to cash
provided by (used for) operating activities, (iv) revenue,
excluding political advertising revenue, to revenue, and (v) Net
Debt to Total Debt. See also the definitions of Adjusted EBITDA,
Free Cash Flow, Free cash flow including net proceeds from real
estate sales, 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,
2022
2021
2022
2021
Revenue
$
988,930
$
928,051
$
2,786,393
$
2,496,321
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
371,719
325,766
1,067,625
939,094
Selling, general and administrative
expenses (excludes depreciation and amortization)
399,892
390,086
1,163,293
1,105,056
Depreciation and amortization
109,305
108,100
334,144
343,408
Impairment charges1
309,750
11,647
311,329
49,391
Other operating expense, net
9,451
12,341
25,985
27,491
Operating income (loss)
(211,187
)
80,111
(115,983
)
31,881
Interest expense, net
87,890
82,481
248,603
252,489
Gain on investments, net
(3,466
)
(10,367
)
4,359
39,468
Equity in loss of nonconsolidated
affiliates
(132
)
(1,056
)
(190
)
(1,115
)
Gain on extinguishment of debt
6,892
(7,896
)
15,095
(7,896
)
Other expense, net
(581
)
(1,785
)
(3,026
)
(2,955
)
Income (loss) before income taxes
(296,364
)
(23,474
)
(348,348
)
(193,106
)
Income tax benefit (expense)
(13,412
)
27,147
5,015
(77,237
)
Net income (loss)
(309,776
)
3,673
(343,333
)
(270,343
)
Less amount attributable to noncontrolling
interest
587
493
1,211
486
Net income (loss) attributable to the
Company
$
(310,363
)
$
3,180
$
(344,544
)
$
(270,829
)
1
Impairment charges in nine months ended
September 30, 2022 includes $302.1 million related to the
impairment of FCC licenses, $8.5 million related to impairments of
right-of-use assets and $0.7 million related to leasehold
improvements (in the latter two cases, related to leasehold
improvements as a result of proactive decisions by management to
exit and sublease a number of operating leases in connection with
strategic actions to streamline the Company's real estate footprint
as part of the Company's modernization initiatives). Impairment
charges of $49.4 million in the nine months ended September 30,
2021 related to $38.0 million of impairments of right-of-use assets
and $11.4 million related to leasehold improvements as a result of
proactive decisions by management to abandon and sublease a number
of operating leases in connection with strategic actions to
streamline the Company’s real estate footprint as part of the
Company’s modernization initiatives.
TABLE 3 - Selected Balance Sheet
Information
Selected balance sheet information for September 30, 2022 and
December 31, 2021:
(In millions)
September 30, 2022
December 31, 2021
Cash
$
295.4
$
352.1
Total Current Assets
1,408.6
1,472.9
Net Property, Plant and Equipment
692.3
782.1
Total Assets
8,329.7
8,881.3
Current Liabilities (excluding current
portion of long-term debt)
739.4
848.7
Long-term Debt (including current portion
of long-term debt)
5,553.7
5,738.9
Stockholders' Equity
592.8
915.8
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 and Free cash flow including net
proceeds from real estate sales for the three and nine months ended
September 30, 2022 and 2021, and Net Debt as of September 30, 2022.
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, net. Alternatively, Adjusted EBITDA is
calculated as Net income (loss), adjusted to exclude Income tax
(benefit) expense, Interest expense, net, Depreciation and
amortization, Loss (gain) on investments, net, (Gain) loss on
extinguishment of debt, Other expense, net, Equity in loss of
nonconsolidated affiliates, net, Impairment charges, Other
operating expense, net, Share-based compensation expense, and
restructuring expenses. Restructuring expenses primarily include
expenses incurred in connection with cost-saving initiatives, as
well as certain expenses, which, in the view of management, are
outside the ordinary course of business or otherwise not
representative of the Company's operations during a normal business
cycle. Adjusted EBITDA margin is calculated as Adjusted EBITDA
divided by Revenue.
The Company uses Adjusted EBITDA and Adjusted EBITDA margin,
among other measures, to evaluate the Company’s operating
performance. Adjusted EBITDA is among the primary measures used by
management for the planning and forecasting of future periods, as
well as for measuring performance for compensation of executives
and other members of management. We believe this measure is an
important indicator of the Company’s operational strength and
performance of its business because it provides a link between
operational performance and operating income. It is also a primary
measure used by management in evaluating companies as potential
acquisition targets.
The Company believes the presentation of these measures is
relevant and useful for investors because it allows investors to
view performance in a manner similar to the method used by the
Company’s management. The Company believes it helps improve
investors’ ability to understand the Company’s operating
performance and makes it easier to compare the Company’s results
with other companies that have different capital structures or tax
rates. In addition, the Company believes this measure is also among
the primary measures used externally by the Company’s investors,
analysts and peers in its industry for purposes of valuation and
comparing the operating performance of the Company to other
companies in its industry.
Since Adjusted EBITDA is not a measure calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, operating income 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, the most directly comparable GAAP financial measure, users
of this financial information should consider the types of events
and transactions which are excluded.
We define Free Cash Flow as Cash provided by (used for)
operating activities less capital expenditures, which is disclosed
as Purchases of property, plant and equipment in the Company's
Consolidated Statements of Cash Flows. We define Free cash flow
including net proceeds from real estate sales as Free Cash Flow
further adjusted to include proceeds from real estate sales. We use
Free Cash Flow and Free cash flow including net proceeds from real
estate sales, among other measures, to evaluate the Company’s
liquidity and its ability to generate cash flow. We believe that
Free Cash Flow and Free cash flow including net proceeds from real
estate sales are meaningful to investors because they provide them
with a view of the Company's liquidity after deducting capital
expenditures, which are considered to be a necessary component of
ongoing operations; and include proceeds from real estate sales in
the case of Free cash flow including net proceeds from real estate
sales. In addition, we believe that Free Cash Flow and Free cash
flow including net proceeds from real estate sales helps improve
investors' ability to compare our liquidity with that of other
companies.
Since Free Cash Flow and Free cash flow including net proceeds
from real estate sales are not measures calculated in accordance
with GAAP, they 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 and Free cash flow including net proceeds
from real estate sales 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 the Net Debt to Adjusted EBITDA ratio as Net Debt divided
by Adjusted EBITDA. The Company uses the Net Debt to Adjusted
EBITDA ratio to evaluate the Company's leverage. We believe this
measure is 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, (ii) Adjusted EBITDA to net income (loss), (iii) Free Cash
Flow and Free cash flow including net proceeds from real estate
sales to cash provided by (used for) operating activities, (iv)
revenue, excluding political advertising revenue, to revenue, and
(v) Net Debt to Total Debt.
We have provided forecasted Revenue and Adjusted EBITDA guidance
for the quarter ending December 31, 2022 and net leverage guidance
for December 31, 2022, which reflects anticipated Adjusted EBITDA
for the year ending December 31, 2022 and net debt as of December
31, 2022. Our Earnings Call on November 3, 2022 may present
guidance that includes Adjusted EBITDA and Free Cash Flow. A full
reconciliation of the forecasted Adjusted EBITDA, Free Cash Flow
and net debt on a non-GAAP basis to its 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.
Reconciliation of Operating Income (Loss) to Adjusted
EBITDA
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Operating income (loss)
$
(211,187
)
$
80,111
$
(115,983
)
$
31,881
Depreciation and amortization
109,305
108,100
334,144
343,408
Impairment charges1
309,750
11,647
311,329
49,391
Other operating expense, net2
9,451
12,341
25,985
27,491
Share-based compensation expense
10,437
5,993
24,582
17,581
Restructuring expenses
24,486
12,021
54,588
47,216
Adjusted EBITDA
$
252,242
$
230,213
$
634,645
$
516,968
1
Impairment charges in nine months ended
September 30, 2022 includes $302.1 million related to the
impairment of FCC licenses, $8.5 million related to impairments of
right-of-use assets and $0.7 million related to leasehold
improvements (in the latter two cases, related to leasehold
improvements as a result of proactive decisions by management to
exit and sublease a number of operating leases in connection with
strategic actions to streamline the Company’s real estate footprint
as part of the Company’s modernization initiatives). Impairment
Charges of $49.4 million in the nine months ended September 30,
2021 related to $38.0 million of impairments of right-of-use assets
and $11.4 million related to leasehold improvements as a result of
proactive decisions by management to abandon and sublease a number
of operating leases in connection with strategic actions to
streamline the Company’s real estate footprint as part of the
Company’s modernization initiatives aimed at reducing our
structural cost base.
2
Increase in Other operating expense, net
is driven by non-cash net book losses recognized in relation to
sales of real estate.
Reconciliation of Net Income (Loss) to EBITDA and Adjusted
EBITDA
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net income (loss)
$
(309,776
)
$
3,673
$
(343,333
)
$
(270,343
)
Income tax (benefit) expense
13,412
(27,147
)
(5,015
)
77,237
Interest expense, net
87,890
82,481
248,603
252,489
Depreciation and amortization
109,305
108,100
334,144
343,408
EBITDA
$
(99,169
)
$
167,107
$
234,399
$
402,791
(Gain) loss on investments, net
3,466
10,367
(4,359
)
(39,468
)
(Gain) loss on extinguishment of debt
(6,892
)
—
7,896
—
(15,095
)
—
7,896
Other expense, net
581
1,785
3,026
2,955
Equity in loss of nonconsolidated
affiliates
132
1,056
190
1,115
Impairment charges
309,750
11,647
311,329
49,391
Other operating expense, net
9,451
12,341
25,985
27,491
Share-based compensation expense
10,437
5,993
24,582
17,581
Restructuring expenses
24,486
12,021
54,588
47,216
Adjusted EBITDA
$
252,242
$
230,213
$
634,645
$
516,968
Reconciliation of Cash Provided By Operating Activities to
Free Cash Flow and Free cash flow including net proceeds from real
estate sales
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Cash provided by operating activities
$
103,110
$
95,736
$
206,699
$
196,593
Purchases of property, plant and
equipment
(40,357
)
(50,274
)
(112,567
)
(101,335
)
Free cash flow
62,753
45,462
94,132
$
95,258
Net proceeds from real estate sales1
7,700
8,610
31,535
21,051
Free cash flow including net proceeds from
real estate sales
$
70,453
$
54,072
$
125,667
$
116,309
1
During the three and nine months ended
September 30, 2022 and September 30, 2021, we continued to deploy
capital expenditures to accelerate the proactive streamlining of
our real estate footprint aimed at reducing our structural cost
base. 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
2022
2021
2022
2021
Consolidated revenue
$
988,930
$
928,051
6.6
%
$
2,786,393
$
2,496,321
11.6
%
Excluding: Political revenue
(33,968
)
(7,837
)
(66,215
)
(19,521
)
Consolidated revenue, excluding
political
$
954,962
$
920,214
3.8
%
$
2,720,178
$
2,476,800
9.8
%
Multiplatform Group revenue
$
659,896
$
658,979
0.1
%
$
1,864,356
$
1,762,726
5.8
%
Excluding: Political revenue
(18,283
)
(5,858
)
(37,418
)
(13,491
)
Multiplatform Group revenue, excluding
political
$
641,613
$
653,121
(1.8
)%
$
1,826,938
$
1,749,235
4.4
%
Digital Audio Group revenue
$
253,953
$
205,769
23.4
%
$
720,733
$
561,252
28.4
%
Excluding: Political revenue
(2,270
)
(367
)
(4,942
)
(1,034
)
Digital Audio Group revenue, excluding
political
$
251,683
$
205,402
22.5
%
$
715,791
$
560,218
27.8
%
Audio & Media Group Services
revenue
$
77,794
$
66,078
17.7
%
$
209,716
$
182,390
15.0
%
Excluding: Political revenue
(13,415
)
(1,612
)
(23,855
)
(4,997
)
Audio & Media Services Group revenue,
excluding political
$
64,379
$
64,466
(0.1
)%
$
185,861
$
177,393
4.8
%
Reconciliation of Total Debt to Net Debt
(In thousands)
September 30,
2022
Current portion of long-term debt
$
665
Long-term debt
5,553,049
Total debt
$
5,553,714
Less: Cash and cash equivalents
295,399
Net debt
$
5,258,315
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,
2022
Revenue
$
659,896
$
253,953
$
77,794
$
—
$
(2,713
)
$
988,930
Operating expenses(1)
452,631
175,636
48,044
63,090
(2,713
)
736,688
Adjusted EBITDA
$
207,265
$
78,317
$
29,750
$
(63,090
)
$
—
$
252,242
Adjusted EBITDA margin
31.4
%
30.8
%
38.2
%
25.5
%
Depreciation and amortization
(109,305
)
Impairment charges
(309,750
)
Other operating expense, net
(9,451
)
Share-based compensation expense
(10,437
)
Restructuring expenses
(24,486
)
Operating loss
$
(211,187
)
Operating margin
(21.4
)%
(1)
Operating expenses consist of Direct
operating expenses and Selling, general and administrative
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
Three Months Ended September 30,
2021
Revenue
$
658,979
$
205,769
$
66,078
$
—
$
(2,775
)
$
928,051
Operating expenses(1)
450,549
138,646
43,656
67,762
(2,775
)
697,838
Adjusted EBITDA
$
208,430
$
67,123
$
22,422
$
(67,762
)
$
—
$
230,213
Adjusted EBITDA margin
31.6
%
32.6
%
33.9
%
24.8
%
Depreciation and amortization
(108,100
)
Impairment charges
(11,647
)
Other operating expense, net
(12,341
)
Share-based compensation expense
(5,993
)
Restructuring expenses
(12,021
)
Operating income
$
80,111
Operating margin
8.6
%
(1)
Operating expenses consist of Direct
operating expenses and Selling, general and administrative
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,
2022
Revenue
$
1,864,356
$
720,733
$
209,716
$
—
$
(8,412
)
$
2,786,393
Operating expenses(1)
1,328,688
511,025
141,509
178,938
(8,412
)
2,151,748
Adjusted EBITDA
$
535,668
$
209,708
$
68,207
$
(178,938
)
$
—
$
634,645
Adjusted EBITDA margin
28.7
%
29.1
%
32.5
%
22.8
%
Depreciation and amortization
(334,144
)
Impairment charges
(311,329
)
Other operating expense, net
(25,985
)
Share-based compensation expense
(24,582
)
Restructuring expenses
(54,588
)
Operating loss
$
(115,983
)
Operating margin
(4.2
)%
(1)
Operating expenses consist of Direct
operating expenses and Selling, general and administrative
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,
2021
Revenue
$
1,762,726
$
561,252
$
182,390
$
—
$
(10,047
)
$
2,496,321
Operating expenses(1)
1,268,107
399,828
124,148
197,317
(10,047
)
1,979,353
Adjusted EBITDA
$
494,619
$
161,424
$
58,242
$
(197,317
)
$
—
$
516,968
Adjusted EBITDA margin
28.1
%
28.8
%
31.9
%
20.7
%
Depreciation and amortization
(343,408
)
Impairment charges
(49,391
)
Other operating expense, net
(27,491
)
Share-based compensation expense
(17,581
)
Restructuring expenses
(47,216
)
Operating income
$
31,881
Operating margin
1.3
%
(1)
Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring expenses and share-based
compensation expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221103005928/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
iHeartMedia (NASDAQ:IHRT)
Historical Stock Chart
From Mar 2024 to Apr 2024
iHeartMedia (NASDAQ:IHRT)
Historical Stock Chart
From Apr 2023 to Apr 2024