| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
2022
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
__________to ___________
Entercom Communications Corp.
| Pennsylvania | 23-1701044 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) | |||||||
401 E. City Avenue, Suite 809
Bala Cynwyd,
19103
| Large accelerated filer | ☐ | Accelerated filer | ☒ | ||||||||||||||
| Emerging growth company | ☐ | ||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||||||||
[ ]
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Class A Common Stock, par value $.01 per share | AUD | New York Stock Exchange | ||||||||||||
(Class A Shares Outstanding include 1,773,121 unvested and vested but deferred restricted stock units)
31, 2022
31, 2022
ENTERCOM COMMUNICATIONS CORP.
Table of ContentsPage 1334444454545454545464849forward- lookingforward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.Key risks to our company are described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2017, and as may be supplemented by the risks described under Part II, Item 1A,
ASSETS: Cash Accounts receivable, net of allowance for doubtful accounts Prepaid expenses, deposits and other Total current assets Net property and equipment Radio broadcasting licenses Goodwill Assets held for sale Deferred charges and other assets, net of accumulated amortization TOTAL ASSETS LIABILITIES: Accounts payable Accrued expenses Other current liabilities Non-controlling interest - variable interest entity Long-term debt, current portion Total current liabilities Long-term debt, net of current portion Deferred tax liabilities Other long-term liabilities Total long-term liabilities Total liabilities CONTINGENCIES AND COMMITMENTS PERPETUAL CUMULATIVE CONVERTIBLE PREFERRED STOCK SHAREHOLDERS’ EQUITY: Class A, B and C common stock Additional paid-in capital Accumulated deficit Total shareholders’ equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY NET REVENUES OPERATING EXPENSE: Station operating expenses, including non-cash compensation expense Depreciation and amortization expense Corporate general and administrative expenses, including non-cash compensation expense Impairment loss Merger and acquisition costs Net time brokerage agreement (income) fees Net (gain) loss on sale or disposal of assets Total operating expense OPERATING INCOME (LOSS) NET INTEREST EXPENSE OTHER (INCOME) EXPENSE INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) INCOME TAXES (BENEFIT) NET INCOME (LOSS) AVAILABLE TO THE COMPANY Preferred stock dividend NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS PER SHARE - BASIC NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS PER SHARE - DILUTED DIVIDENDS DECLARED AND PAID PER COMMON SHARE WEIGHTED AVERAGE SHARES: Basic Diluted COMPREHENSIVE INCOME (LOSS) thousands) Balance, December 31, 2015 Net income (loss) available to the Company Compensation expense related to granting of stock awards Issuance of common stock related to the Employee Stock Purchase Plan (“ESPP”) Exercise of stock options Purchase of vested employee restricted stock units Payment of dividends on common stock Payment of dividends on preferred stock Dividend equivalents, net of forfeitures Balance, December 31, 2016 Net income (loss) available to the Company Compensation expense related to granting of stock awards Issuance of common stock related to the Employee Stock Purchase Plan (“ESPP”) Exercise of stock options Purchase of vested employee restricted stock units Payment of dividends on common stock Dividend equivalents, net of forfeitures Payment of dividends on preferred stock Modified retrospective application of stock-based compensation guidance Balance, September 30, 2017 SHAREHOLDERS' EQUITY thousands, except share data) OPERATING ACTIVITIES: Net income (loss) available to the Company Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Amortization of deferred financing costs (including original issue discount) Net deferred taxes (benefit) and other Provision for bad debts Net (gain) loss on sale or disposal of assets Non-cash stock-based compensation expense Deferred rent Deferred compensation Impairment loss Accretion expense (income), net of asset retirement obligation adjustments Changes in assets and liabilities (net of effects of acquisitions, dispositions, consolidation, and deconsolidation of Variable Interest Entities (VIEs)): Accounts receivable Prepaid expenses and deposits Accounts payable and accrued liabilities Accrued interest expense Accrued liabilities - long-term Prepaid expenses - long-term Net cash provided by (used in) operating activities INVESTING ACTIVITIES: Additions to property and equipment Proceeds from sale of property, equipment, intangibles and other assets Purchases of radio stations Additions to amortizable intangible assets Purchases of investments (Deconsolidation) consolidation of a VIE Additions to non-amortizable intangible assets Net cash provided by (used in) investing activities SHAREHOLDERS' EQUITY thousands, except share data) FINANCING ACTIVITIES: Borrowing under the revolving senior debt Proceeds from the capital lease obligations and other Payments of long-term debt Proceeds from issuance of employee stock plan Proceeds from the exercise of stock options Purchase of vested employee restricted stock units Payment of dividends on common stock Payment of dividend equivalents on vested restricted stock units Payment of dividends on preferred stock Net cash provided by (used in) financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF PERIOD SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest Income taxes Dividends on common stock Dividends on preferred stock 2021 Description Net Revenues: Prior to revision Revision As revised Station operating expenses, including non-cash compensation expense: Prior to revision Revision As revised Description Net Revenues: Prior to revision Revision As revised Station operating expenses, including non-cash compensation expense: Prior to revision Revision As revised Description Net Revenues: Prior to revision Revision As revised Station operating expenses, including non-cash compensation expense: Prior to revision Revision As revised additional information. Beginning of period balance as of January 1, Disposition of FCC broadcasting license Consolidation (deconsolidation) of a VIE Acquisition of radio stations Acquisitions—other Assets held for sale Disposition of radio stations previously reflected as held for sale Ending period balance licenses. Refer to Note 2, Business Combinations, and Note 14, Assets Held For Sale, for additional information. Goodwill balance before cumulative loss on impairment as of January 1, Accumulated loss on impairment as of January 1, Goodwill beginning balance after cumulative loss on impairment as of January 1, Loss on impairment during year Acquisition of radio stations Assets held for sale Adjustment to acquired goodwill associated with an assumed fair value liability Disposition of radio stations previously reflected as assets held for sale Ending period balance Company's markets and, accordingly, recorded an impairment loss of $159.1 million ($116.7 million, net of tax). of industry observers and includes judgments about future performance using industry normalized information for an average station within a certain market. These assumptions include, but are not limited to: 2022. its reporting units. These estimates and assumptions could be materially different from actual results. Accrued compensation Accounts receivable credits Advertiser obligations Accrued interest payable Other Total other current liabilities Credit Facility Revolver, due November 1, 2021 Term B Loan, due November 1, 2023 Other Debt Capital lease and other Total debt before deferred financing costs Current amount of long-term debt Deferred financing costs (excludes the revolving credit) Total long-term debt, net of current debt Outstanding standby letters of credit 2022, the Company repurchased $10.0 million of its 2027 Notes through open market purchases. This repurchase activity generated a gain on retirement of the 2027 Notes in the amount of was 3.8 times. results of operations. The cash available from the Revolver is dependent on the Company’s Consolidated Net First-Lien Leverage Ratio at the time of such borrowing. Refer to Note 1, Basis of Presentation And Significant Policies - Liquidity and Capital Resources, for additional information. Presentation And Significant Policies - Liquidity and Capital Resources, for additional information. unamortized debt issuance costs attributable to the Term B-2 Loan. Interest expense Amortization of deferred financing costs Amortization of original issue discount of senior notes Interest income and other investment income Total net interest expense Interest expense Amortization of deferred financing costs Amortization of original issue discount of senior notes Interest income and other investment income Total net interest expense Basic Income (Loss) Per Share Numerator Net income (loss) available to the Company Preferred stock dividends Net income (loss) available to common shareholders Denominator Basic weighted average shares outstanding Basic net income (loss) per share available to common shareholders Diluted Income (Loss) Per Share Numerator Net income (loss) available to the Company Preferred stock dividends Net income (loss) available to common shareholders Denominator Basic weighted average shares outstanding Effect of RSUs and options under the treasury stock method Preferred stock under the as if converted method Diluted weighted average shares outstanding Diluted net income (loss) per share available to common shareholders share from continuing operations: Impact Of Equity Issuances Shares excluded as anti-dilutive under the treasury stock method: Options Price range of options: from Price range of options: to RSUs with service conditions RSUs excluded with service and market conditions as market conditions not met RSUs excluded with service and performance conditions as performance conditions not met Perpetual cumulative convertible preferred stock treated as anti-dilutive under the as if method Excluded shares as anti-dilutive when reporting a net loss RSUs outstanding as of: RSUs awarded RSUs released RSUs forfeited RSUs outstanding as of: RSUs vested and expected to vest as of: RSUs exercisable (vested and deferred) as of: Weighted average remaining recognition period in years Unamortized compensation expense (amounts in thousands, except per share data) Reconciliation Of RSUs With Market Conditions Beginning of period balance Number of RSUs granted Number of RSUs forfeited Number of RSUs vested End of period balance Weighted average fair value of RSUs granted with market conditions Reconciliation Of RSUs With Service And Performance Conditions Beginning of period balance Number of RSUs granted Number of RSUs that did not meet criteria Number of RSUs vested Average fair value of RSUs granted with performance conditions Option Exercise Data Intrinsic value of options exercised Tax benefit from options exercised(1) Cash received from exercise price of options exercised Options outstanding as of: Options granted Options exercised Options forfeited Options expired Options outstanding as of: Options vested and expected to vest as of: Options vested and exercisable as of: Weighted average remaining recognition period in years Unamortized compensation expense Station operating expenses Corporate general and administrative expenses Stock-based compensation expense included in operating expenses Income tax benefit(1) After-tax stock-based compensation expense Station operating expenses Corporate general and administrative expenses Stock-based compensation expense included in operating expenses Income tax benefit(1) After-tax stock-based compensation expense 2022 2021 full year. Description Liabilities Deferred compensation—Level 1(1) During the periods presented, there were no transfers between fair value hierarchical levels. 2022. Refer to Note 6, Intangible Assets And Goodwill, for additional information. Term B Loan(1) Revolver(2) Other debt(3) Investment balance before cumulative other than temporary impairment as of January 1, Accumulated other than temporary impairment as of January 1, Investment beginning balance after cumulative other than temporary impairment as of January 1, Acquisition of interest in a privately held company Ending period balance Description Assets Land Buildings Equipment Total property plant and equipment Deferred tax asset Radio broadcasting licenses and goodwill Total assets Liabilities Unfavorable lease liabilities Deferred tax liability Total liabilities Net assets Land and land improvements Building Equipment Gross property and equipment Accumulated Depreciation Net property and equipment Radio broadcasting licenses Accumulated Amortization Net radio broadcasting licenses Other intangibles Goodwill Total intangibles Assets held for sale Net assets held for sale Balance Sheet Location Short-term Long-term Total RSUs as of the dates indicated: Number of shares purchased Non-cash compensation expense recognized ENTERCOM COMMUNICATIONS CORP. SEPTEMBER 30, DECEMBER 31, 2017 2016 $ 5,386 $ 46,843 92,343 92,172 9,504 7,670 107,233 146,685 67,432 63,375 756,613 823,195 32,054 32,718 57,999 — 20,145 10,260 $ 1,041,476 $ 1,076,233 $ 491 $ 481 23,161 18,857 21,223 19,603 — 23,959 3,618 4,817 48,493 67,717 470,923 467,651 82,652 92,898 28,506 26,861 582,081 587,410 630,574 655,127 27,845 27,732 407 407 589,524 605,603 (206,874 ) (212,636 ) 383,057 393,374 $ 1,041,476 $ 1,076,233 SEPTEMBER 30, 2022 DECEMBER 31,
2021ASSETS: Cash $ 36,422 $ 59,439 Accounts receivable, net of allowance of $11,863 in 2022 and $15,084 in 2021 266,245 276,044 Prepaid expenses, deposits and other 83,825 68,146 Total current assets 386,492 403,629 Investments 3,005 3,005 Net property and equipment 343,362 376,028 Operating lease right-of-use assets 204,108 229,607 Radio broadcasting licenses 2,088,077 2,251,546 Goodwill 63,916 82,176 Assets held for sale 8,299 1,033 Other assets, net of accumulated amortization 139,803 74,865 TOTAL ASSETS $ 3,237,062 $ 3,421,889 LIABILITIES: Accounts payable $ 18,585 $ 18,897 Accrued expenses 57,053 68,423 Other current liabilities 80,444 84,130 Operating lease liabilities 38,688 39,598 Long-term debt, current portion — 22,727 Total current liabilities 194,770 233,775 Long-term debt, net of current portion 1,865,122 1,782,131 Operating lease liabilities, net of current portion 191,776 217,281 Net deferred tax liabilities 453,165 487,665 Other long-term liabilities 25,218 48,832 Total long-term liabilities 2,535,281 2,535,909 Total liabilities 2,730,051 2,769,684 CONTINGENCIES AND COMMITMENTS SHAREHOLDERS' EQUITY: Class A common stock $0.01 par value; voting; authorized 200,000,000 shares; issued and outstanding 141,322,193 and 140,060,355 shares at September 30, 2022 and December 31, 2021, respectively 1,413 1,401 Class B common stock $0.01 par value; voting; authorized 75,000,000 shares; issued and outstanding 4,045,199 shares at September 30, 2022 and December 31, 2021 40 40 Class C common stock $0.01 par value; non voting; authorized 50,000,000 shares; no shares issued and outstanding — — Additional paid-in capital 1,675,404 1,671,195 Accumulated deficit (1,172,755) (1,020,142) Accumulated other comprehensive income (loss) 2,909 (289) Total shareholders' equity 507,011 652,205 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,237,062 $ 3,421,889 ENTERCOM COMMUNICATIONS CORP. THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, 2017 2016 2017 2016 $ 122,299 $ 121,641 $ 346,270 $ 340,221 87,853 84,089 256,022 240,442 2,904 2,488 8,068 7,452 9,335 8,797 28,776 24,888 — — 441 62 8,825 670 24,925 670 — — 34 — (103 ) (91 ) 13,155 (1,310 ) 108,814 95,953 331,421 272,204 13,485 25,688 14,849 68,017 6,476 9,014 18,586 27,553 — (2,299 ) — (2,299 ) 7,009 18,973 (3,737 ) 42,763 2,909 7,553 (4,921 ) 16,097 4,100 11,420 1,184 26,666 (663 ) (526 ) (1,763 ) (1,351 ) $ 3,437 $ 10,894 $ (579 ) $ 25,315 $ 0.09 $ 0.28 $ (0.01 ) $ 0.66 $ 0.09 $ 0.28 $ (0.01 ) $ 0.64 $ 0.275 $ 0.075 $ 0.425 $ 0.150 38,954,788 38,484,578 38,947,533 38,457,061 39,727,976 41,433,200 38,947,533 39,373,988 THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, 2022 2021 2022 2021 NET REVENUES $ 316,969 $ 329,443 $ 911,703 $ 874,672 OPERATING EXPENSE: Station operating expenses 260,031 260,972 746,936 718,924 Depreciation and amortization expense 18,345 12,477 47,455 38,690 Corporate general and administrative expenses 21,160 24,176 72,774 71,470 Restructuring charges 4,216 2,300 6,118 4,219 Impairment loss 176,784 26 180,075 1,371 Refinancing expenses — — — 473 Net gain on sale or disposal (10,665) (4) (13,228) (3,731) Change in fair value of contingent consideration (1,098) — (8,802) — Other expenses 72 245 474 566 Total operating expense 468,845 300,192 1,031,802 831,982 OPERATING INCOME (LOSS) (151,876) 29,251 (120,099) 42,690 NET INTEREST EXPENSE 28,113 22,771 76,113 66,484 Net loss on extinguishment of debt — — — 8,168 Other income — — (238) (446) OTHER (INCOME) EXPENSE — — (238) 7,722 INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) (179,989) 6,480 (195,974) (31,516) INCOME TAX (BENEFIT) EXPENSE (39,014) 11,241 (43,153) (6,534) NET LOSS (140,975) (4,761) (152,821) (24,982) NET LOSS PER SHARE - BASIC $ (1.01) $ (0.04) $ (1.10) $ (0.18) NET LOSS PER SHARE - DILUTED $ (1.01) $ (0.04) $ (1.10) $ (0.18) WEIGHTED AVERAGE SHARES: Basic 139,361,261 135,893,823 139,246,393 135,857,127 Diluted 139,361,261 135,893,823 139,246,393 135,857,127 ENTERCOM COMMUNICATIONS CORP.SHAREHOLDERS’ EQUITYNINE MONTHS ENDED SEPTEMBER 30, 2017 AND YEAR ENDED DECEMBER 31, 2016thousands, except share data) Common Stock Additional
Paid-in
Capital Retained
Earnings
(Accumulated
Deficit) Total Class A Class B Shares Amount Shares Amount 32,480,551 $ 325 7,197,532 $ 72 $ 611,754 $ (250,701 ) $ 361,450 — — — — — 38,065 38,065 1,095,759 11 — — 6,528 — 6,539 31,933 — — — 379 — 379 134,238 1 — — 264 — 265 (232,297 ) (2 ) — — (2,266 ) — (2,268 ) — — — — (8,666 ) — (8,666 ) — — — — (1,788 ) — (1,788 ) — — — — (602 ) — (602 ) 33,510,184 335 7,197,532 72 605,603 (212,636 ) 393,374 — — — — — 1,184 1,184 183,980 2 — — 4,627 — 4,629 14,833 — — — 182 — 182 6,500 — — — 22 — 22 (167,620 ) (2 ) — — (2,544 ) — (2,546 ) — — — — (16,659 ) — (16,659 ) — — — — (591 ) — (591 ) — — — — (1,650 ) — (1,650 ) — — — — 534 4,578 5,112 33,547,877 $ 335 7,197,532 $ 72 $ 589,524 $ (206,874 ) $ 383,057 THREE MONTHS ENDED NINE MONTHS ENDED September 30, 2022 2021 2022 2021 NET LOSS $ (140,975) $ (4,761) $ (152,821) $ (24,982) OTHER COMPREHENSIVE INCOME, NET OF TAXES: Net unrealized gain on derivatives,
net of taxes1,422 170 3,198 929 COMPREHENSIVE LOSS $ (139,553) $ (4,591) $ (149,623) $ (24,053) ENTERCOM COMMUNICATIONS CORP.CASH FLOWSthousands) NINE MONTHS ENDED
SEPTEMBER 30, 2017 2016 $ 1,184 $ 26,666 8,068 7,452 1,752 2,209 (4,921 ) 16,097 1,742 1,129 13,155 (1,310 ) 4,629 4,660 (109 ) 208 2,242 1,471 441 62 (341 ) 23 (4,057 ) (5,390 ) (2,079 ) (2,044 ) 6,983 (192 ) (1,759 ) 4,749 (1,438 ) (1,639 ) (83 ) (3,166 ) 25,409 50,985 (12,056 ) (4,316 ) 18 7,118 (24,000 ) (92 ) (663 ) (188 ) (9,700 ) — (302 ) — — (35 ) (46,703 ) 2,487 ENTERCOM COMMUNICATIONS CORP.Common Stock Additional
Paid-in
CapitalAccumulated
DeficitAccumulated
Other
Comprehensive
Income (Loss)Total Class A Class B Shares Amount Shares Amount Balance, December 31, 2021 140,060,355 $ 1,401 4,045,199 $ 40 $ 1,671,195 $ (1,020,142) $ (289) $ 652,205 Net loss — — — — — (11,073) — (11,073) Compensation expense related to granting of stock awards (59,352) (1) — — 2,699 — — 2,698 Issuance of common stock related to the Employee Stock Purchase Plan ("ESPP") 61,009 1 — — 176 — — 177 Purchase of vested employee restricted stock units (621,876) (6) — — (1,833) — — (1,839) Payment of dividends on common stock — — — — (174) — — (174) Dividend equivalents, net of forfeitures — — — — — 202 — 202 Net unrealized gain (loss) on derivatives — — — — — — 1,223 1,223 Balance, March 31, 2022 139,440,136 $ 1,395 4,045,199 $ 40 $ 1,672,063 $ (1,031,013) $ 934 $ 643,419 Net loss — — — — — (773) — (773) Compensation expense related to granting of stock awards 1,738,025 17 — — 2,464 — — 2,481 Issuance of common stock related to the ESPP 141,187 1 — — 131 — — 132 Purchase of vested employee restricted stock units (22,814) — — — (51) — — (51) Payment of dividends on common stock — — — — (4) — — (4) Dividend equivalents, net of forfeitures — — — — — 4 — 4 Net unrealized gain (loss) on derivatives — — — — — — 553 553 Balance, June 30, 2022 141,296,534 $ 1,413 4,045,199 $ 40 $ 1,674,603 $ (1,031,782) $ 1,487 $ 645,761 Net loss — — — — — (140,975) — (140,975) Compensation expense related to granting of stock awards (168,167) (2) — — 728 — — 726 Issuance of common stock related to the ESPP 198,188 2 — — 75 — — 77 Purchase of vested employee restricted stock units (4,362) — — — (2) — — (2) Payment of dividends on common stock — — — — — — — — Dividend equivalents, net of forfeitures — — — — — 2 — 2 Net unrealized gain (loss) on derivatives — — — — — — 1,422 1,422 Balance, September 30, 2022 141,322,193 $ 1,413 4,045,199 $ 40 $ 1,675,404 $ (1,172,755) $ 2,909 $ 507,011 CASH FLOWSthousands) NINE MONTHS ENDED
SEPTEMBER 30, 2017 2016 57,500 21,500 — 102 (57,012 ) (65,262 ) 182 194 22 39 (2,546 ) (2,205 ) (16,550 ) (5,772 ) (109 ) (91 ) (1,650 ) (1,238 ) (20,163 ) (52,733 ) (41,457 ) 739 46,843 9,169 $ 5,386 $ 9,908 $ 19,474 $ 21,046 $ 352 $ 339 $ 16,550 $ 5,772 $ 1,650 $ 1,238 Common Stock Additional
Paid-in
Capital(Accumulated
Deficit)Accumulated
Other
Comprehensive
Income (Loss)Total Class A Class B Shares Amount Shares Amount Balance, December 31, 2020 136,913,375 $ 1,369 4,045,199 $ 40 $ 1,662,155 $ (1,017,037) $ (1,789) $ 644,738 Net loss — — — — — (21,648) — (21,648) Compensation expense related to granting of stock awards 291,347 3 — — 2,575 — — 2,578 Exercise of stock options 47,535 — — — 15 — — 15 Purchase of vested employee restricted stock units (347,607) (3) — — (1,908) — — (1,911) Payment of dividends on common stock — — — — (386) — — (386) Dividend equivalents, net of forfeitures — — — — — 386 — 386 Net unrealized gain (loss) on derivatives — — — — — — 553 553 Balance, March 31, 2021 136,904,650 $ 1,369 4,045,199 $ 40 $ 1,662,451 $ (1,038,299) $ (1,236) $ 624,325 Net income — — — — — 1,426 — 1,426 Compensation expense related to granting of stock awards 412,243 4 — — 2,441 — — 2,445 Exercise of stock options 38,399 — — — 17 — — 17 Purchase of vested employee restricted stock units (20,317) — — — (98) — — (98) Payment of dividends on common stock — — — — (194) — — (194) Dividend equivalents, net of forfeitures — — — — — 201 — 201 Net unrealized gain (loss) on derivatives — — — — — — 206 206 Balance, June 30, 2021 137,334,975 $ 1,373 4,045,199 $ 40 $ 1,664,617 $ (1,036,672) $ (1,030) $ 628,328 Net loss — — — — — (4,761) — (4,761) Compensation expense related to granting of stock awards (94,466) (1) — — 3,326 — — 3,325 Issuance of common stock related to the ESPP 38,782 — — — 142 — — 142 Exercise of stock options 28,800 1 — — 12 — — 13 Purchase of vested employee restricted stock units (9,227) — — — (31) — — (31) Payment of dividends on common stock — — — — (1) — — (1) Dividend equivalents, net of forfeitures — — — — — 9 — 9 Net unrealized gain (loss) on derivatives — — — — — — 170 170 Balance, September 30, 2021 137,298,864 $ 1,373 4,045,199 $ 40 $ 1,668,065 $ (1,041,424) $ (860) $ 627,194 ENTERCOM COMMUNICATIONS CORP.NINE MONTHS ENDED SEPTEMBER 30, 2022 2021 OPERATING ACTIVITIES: Net loss $ (152,821) $ (24,982) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 47,455 38,690 Net amortization of deferred financing costs (net of original issue discount and debt premium) 3,064 2,249 Net deferred taxes (benefit) and other (37,362) 8,692 Provision for bad debts 1,006 1,967 Net (gain) loss on sale or disposal (13,228) (3,731) Non-cash stock-based compensation expense 5,905 8,349 Net loss on extinguishment of debt — 8,168 Deferred compensation (5,835) 2,787 Impairment loss 180,075 1,371 Change in fair value of contingent consideration (8,802) — Changes in assets and liabilities (net of effects of acquisitions, and dispositions): Accounts receivable 8,793 2,286 Prepaid expenses and deposits (15,679) (18,317) Accounts payable and accrued liabilities (18,808) 24,577 Other assets 935 (134) Accrued interest expense (1,383) 1,902 Other long-term liabilities (12,944) (8,253) Net cash provided by (used in) operating activities (19,629) 45,621 INVESTING ACTIVITIES: Additions to property, equipment and software (72,541) (39,267) Proceeds from sale of property, equipment, intangibles and other assets 18,604 1,162 Purchases of businesses and audio assets (5,040) (15,297) Net cash used in investing activities (58,977) (53,402)
See notes to condensed consolidated financial statements.NINE MONTHS ENDED SEPTEMBER 30, 2022 2021 FINANCING ACTIVITIES: Borrowing under the revolving senior debt 90,000 52,000 Borrowing under the accounts receivable facility — 75,000 Proceeds from issuance of long-term debt — 540,000 Payments of long-term debt — (77,044) Payments of revolving senior debt (22,727) (124,000) Retirement of notes (10,000) (400,000) Payment for debt issuance costs — (9,364) Payment of call premium and other fees — (14,500) Proceeds from issuance of employee stock plan 386 142 Proceeds from the exercise of stock options — 45 Purchase of vested employee restricted stock units (1,892) (2,040) Payment of dividend equivalents on vested restricted stock units (178) (581) Net cash provided by financing activities 55,589 39,658 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (23,017) 31,877 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 59,439 30,964 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 36,422 $ 62,841 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest $ 71,439 $ 62,217 Income taxes $ (14,779) $ (304) 20172022 AND 2016 interim unaudited financial statements included herein have been prepared by Entercom Communications Corp.Audacy, Inc. and its subsidiaries (collectively, the “Company”) in accordance with: (i) generally accepted accounting principles (“U.S. GAAP”) for interim financial information; and (ii) the instructions of the Securities and Exchange Commission (the “SEC”) for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the results of operations and financial position for the interim periods presented. All such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations and, therefore, the results shown on an interim basis are not necessarily indicative of results for a full year.2016,2021, and filed with the SEC on February 28, 2017,March 1, 2022, as part of the Company’s Annual Report on Form 10-K.10-K (the "2021 Annual Report"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.On February 2, 2017, the Company and its newly formed wholly owned subsidiary (“Merger Sub”) entered into an Agreement and Plan of Merger (the “CBS Radio Merger Agreement”) with CBS Corporation (“CBS”) and its wholly owned subsidiary CBS Radio Inc. (“CBS Radio”). Pursuant to the CBS Radio Merger Agreement, Merger Sub will merge with and into CBS Radio with CBS Radio surviving as the Company’s wholly owned subsidiary (the “Merger”). The Merger is expected to be tax free to CBS and its shareholders, and will be effected through a stock for stock Reverse Morris Trust transaction. The Merger will make the Company a leading local media and entertainment company with a nationwide footprint of stations including positions in all of the top 10 markets and 22 of the top 25 markets. The transactions contemplated by the CBS Radio Merger Agreement are subject to approval by the Company’s shareholders and customary regulatory approvals. Such approvals will require the divestiture of stations in certain markets due to regulatory requirements.Form 10-Krecovery. While the full impact of this pandemic is not yet known, the Company has taken proactive actions in an effort to mitigate its effects and is continually assessing its effects on the Company's business, including how it has and will continue to impact advertisers, professional sports and live events.endedending December 31, 2016,2022. The full extent to which the current macroeconomic conditions impact the Company's business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be accurately estimated at this time, but the Company believes the impact could be material if conditions persist.filednot previously contractually required. As of September 30, 2022, the SPV has $221.5 million of net accounts receivable and has outstanding borrowings of $75.0 million under the Receivables Facility.SEC on February 28, 2017.RevisionCompany entered into an exchange of Prior Period Financial Statementsreal property held for Digital Revenue ContractsInproductive use or investment. This agreement relates to the sale of real property and identification and acquisition of replacement property.preparationInternal Revenue Code (the “Code”), the property to be exchanged in the like-kind exchange is required to be received by the Company within 180 days.financial statements,VIE could only be used to settle the Company identified immaterial errors in prior periods relating toobligations of the nettingVIE. There was a lack of certain digital expenses against certain digital revenues. Since the Company acts as a principal in certain digital revenue contracts, the expenses should not have been netted against gross revenues. The impact of these errors was not material to any prior period. Consequently, the Company corrected the errors in the second quarter of 2017 by increasing net revenues and station operating expenses on the consolidated statements of operationsrecourse by the amounts below. Ascreditors of the two line items are adjusted by offsetting amounts,VIE against the corrections had no impact on income before taxes, income taxes (benefit), net income, earnings per share or diluted earnings per share, shareholders’ equity, cash flows from operations, or working capital. The corrections had no impact on the consolidated balance sheets or statements of cash flows.The following tables include the revisionsCompany’s general creditors. Refer to the consolidated statements of operationsNote 15, Contingencies And Commitments, for the interim and annual periods during 2017, 2016, and 2015: Three Months Ended
March 31, 2017 (amounts in
thousands) $ 97,452 1,549 $ 99,001 $ 75,617 1,549 $ 77,166 Three Months Ended Year Ended March 31, June 30, September 30, December 31, December 31, 2016 (amounts in thousands) $ 96,103 $ 120,478 $ 120,457 $ 123,207 $ 460,245 906 1,093 1,184 1,343 4,526 $ 97,009 $ 121,571 $ 121,641 $ 124,550 $ 464,771 $ 71,715 $ 82,639 $ 82,905 $ 81,485 $ 318,744 906 1,093 1,184 1,343 4,526 $ 72,621 $ 83,732 $ 84,089 $ 82,828 $ 323,270 Three Months Ended Year Ended March 31, June 30, September 30, December 31, December 31, 2015 (amounts in thousands) $ 78,420 $ 100,592 $ 114,662 $ 117,704 $ 411,378 589 730 874 910 3,103 $ 79,009 $ 101,322 $ 115,536 $ 118,614 $ 414,481 $ 59,367 $ 70,000 $ 81,241 $ 77,103 $ 287,711 589 730 874 910 3,103 $ 59,956 $ 70,730 $ 82,115 $ 78,013 $ 290,814 other(other than as noted below or those included in the notes to the Company’s consolidated financial statements contained in its Form 10-K for the year ended December 31, 2016, that was filed with the SEC on February 28, 2017,2021 Annual Report) that might have a material impact on the Company’s financial position, results of operations or cash flows.Definitionguidanceand allocates the purchase price to the assets and liabilities based upon their respective fair values as determined as of the acquisition date. Merger and acquisition costs are excluded from the purchase price as these costs are expensed as incurred for book purposes and amortized for tax purposes. amended to modify the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposalscombination. The Company operates WideOrbit Streaming under the name AmperWave ® ("AmperWave"). The Company funded this acquisition through a draw on its revolving credit facility (the "Revolver"). Based upon the timing of assets or businesses. The guidance is effectivethe WideOrbit Streaming Acquisition, the Company's condensed consolidated financial statements for the period ended September 30, 2022, reflect the results of AmperWave. The Company's condensed consolidated financial statements for the period ended September 30, 2021 do not reflect the results of AmperWave.Final Value (amounts in thousands) Assets Operating lease right-of-use assets $ 142 Net property and equipment 38 Other assets, net of accumulated amortization 39,532 Goodwill 386 Total intangible and other assets 39,918 Operating lease liabilities (142) Deferred tax asset 134 Preliminary fair value of net assets acquired $ 40,090 Final Value (amounts in thousands) Assets Net property and equipment $ 2,254 Total tangible property 2,254 Radio broadcasting licenses 23,233 Total intangible assets $ 23,233 Total assets $ 25,487 Final Value (amounts in thousands) Assets Cash $ 702 Prepaid expenses, deposits and other 18 Other assets, net of accumulated amortization 2,545 Goodwill 19,637 Deferred tax asset 72 Net working capital 63 Preliminary fair value of net assets acquired $ 23,037 2018, under a prospective application method. As described2021. Note 10, Assets Held for Sale, and Note 13, Subsequent Events, the Company entered into several binding and non-binding transactions with third parties in order to dispose of or exchange multiple radio stations in several markets. These divestitures and exchanges were entered into in order to comply with certain regulatory requirements, in order to facilitate the Merger. Based upon the Company’s preliminary assessment, which is subject to change,audited consolidated financial statements as of and for the impactyear ended December 31, 2021, and filed with the SEC on March 1, 2022, for a description of this guidance should not be material to the Company’s financial position, resultsacquisition and disposition activities.operations or cash flows. The guidance couldassets; (ii) change in the effective tax rate; (iii) merger and acquisition costs; and (iv) interest expense on any debt incurred to fund the acquisitions which would have an impact in a future period if the Company acquires or disposes of assets that meet the definition of a business under the amended guidance.Goodwill ImpairmentIn January 2017, the accounting guidance was amended to modify the accounting for goodwill impairment by removing the second step of the goodwill impairment test. The guidance is effective for the Companybeen incurred had such acquisitions been consummated as of January 1, 2021.Three Months Ended
September 30,Nine Months Ended
September 30,2022 2021 2022 2021 (amounts in thousands except share and per share data) Actual Pro Forma Actual Pro Forma Net revenues $ 316,969 $ 330,242 $ 911,703 $ 878,275 Net loss $ (140,975) $ (6,573) $ (152,821) $ (30,252) Net loss per common share - basic $ (1.01) $ (0.05) $ (1.10) $ (0.22) Net loss per common share - diluted $ (1.01) $ (0.05) $ (1.10) $ (0.22) Weighted shares outstanding basic 139,361,261 135,893,823 139,246,393 135,857,127 Weighted shares outstanding diluted 139,361,261 135,893,823 139,246,393 135,857,127 Nine Months Ended
September 30,2022 2021 (amounts in thousands) Workforce reduction 5,300 4,131 Other restructuring costs 818 88 Total restructuring charges $ 6,118 $ 4,219 Three Months Ended
September 30,2022 2021 (amounts in thousands) Workforce reduction $ 3,649 $ 2,263 Other restructuring costs 567 37 Total restructuring charges $ 4,216 $ 2,300 Nine Months Ended September 30, 2022 Twelve Months Ended December 31, 2021 (amounts in thousands) Restructuring charges, beginning balance $ 2,623 $ 2,988 Additions 6,118 5,671 Payments (5,152) (6,036) Restructuring charges unpaid and outstanding 3,589 2,623 Restructuring charges - noncurrent portion (110) — Restructuring charges - current portion $ 3,479 $ 2,623 prospectivenet basis, although early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. the deduction of advertising agency fees by the advertising agencies.electedprovides targeted advertising through the sale of streaming and display advertisements on its national platforms, audacy.com and eventful.com, the Audacy ® app, and its station websites. Performance obligations include delivery of advertisements over the Company's platforms or delivery of targeted advertisements directly to early adopt this amended accounting guidanceconsumers. The Company recognizes revenue at a point in time when the advertisements are delivered and the performance obligations are satisfied. Revenues are recorded on a net basis, after the deduction of advertising agency fees by the advertising agencies.its annual impairment test duringwhich it earns production fees. Performance obligations include the second quarterdelivery of 2017.episodes. These revenues are fixed based upon contractually agreed upon terms. The resultsCompany recognizes revenue over the term of the Company’s annual goodwill impairment test indicated thatproduction contract.carryingCompany's Audacy Audio Network. The amount of consideration the Company receives and revenue it recognizes is fixed based upon contractually agreed upon rates. The Company recognizes revenue at a point in time when the advertisements are broadcast and the performance obligations are satisfied. Revenues are recorded on a net basis, after the deduction of advertising agency fees by the advertising agencies.Company’s goodwilldeliverables included.one particular market exceeded its appraised enterprise value. As a result,time when the performance obligations are satisfied.wrote off approximately $0.4 millionearns trade and barter revenue by providing advertising broadcast time in exchange for certain products, supplies, and services. The Company includes the value of goodwill during the second quartersuch exchanges in both net revenues and station operating expenses. Trade and barter value is based upon management's estimate of 2017. Refer to Note 2, Intangible Assets and Goodwill, for additional information.Cash Flow ClassificationIn August 2016, the accounting guidance for classifying elements of cash flow was modified. The guidance is effective for the Company as of January 1, 2018, under a retrospective application method. Management does not believe the impact of this guidance will be material to the Company’s financial position, results of operations or cash flows.Stock-Based CompensationIn May 2017, the accounting guidance was amended to clarify modification accounting for stock-based compensation. The guidance is effective for the Company as of January 1, 2018, on a prospective basis, although early adoption is permitted for interim periods. Under the amended guidance, the Company will only apply modification accounting for stock-based compensation if there are: (1) changes in the fair value or intrinsic value of share-based compensation; (2) changes in the vesting conditionsproducts, supplies and services received.Company’s financial position, results of operations or cash flows.In March 2016, the accounting guidancetable below for stock-based compensation was modified primarily to: (1) record excess tax benefits or deficiencies on stock-based compensation in the statement of operations, regardless of whether the tax benefits reduce taxes payable in the period; (2) allow an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation up to the maximum statutory tax rates in the applicable jurisdictions; and (3) allow entities to make an accounting policy election to either estimate the number of award forfeitures or to account for forfeitures when they occur. The guidance was effective for the Company on January 1, 2017.As of January 1, 2017, the Company recorded a cumulative-effect adjustment to its accumulated deficit of $4.6 million on a modified retrospective transition basis. This adjustment was comprised of previously unrecognized excess tax benefits of $4.9 million as adjusted for the Company’s effective income tax rate, offset by a change to recognize stock-based compensation forfeitures when they occur of $0.3 million, net of tax.Leasing TransactionsIn February 2016, the accounting guidance was modified to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”)information about receivables, contract assets and leasecontract liabilities on the balance sheet. The most notable change in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases with a term of more than one year. This change will apply to the Company’s leased assets such as real estate, broadcasting towers and equipment. Additionally, the Company will be required to provide additional disclosures to meet the objective of enabling users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company anticipates its accounting for existing capital leases to remain substantially unchanged.While the Company is currently reviewing the effects of this guidance, the Company believes that this modification to operating leases would result in: (1) an increase in the ROU assets and lease liabilities reflected on the Company’s consolidated balance sheets to reflect the rights and obligations created by operating leases with a term of greater than one year; and (2) no material change to the expense associated with the ROU assets.This guidance is effective for the Company as of January 1, 2019, and must be implemented using a modified retrospective approach, with certain practical expedients available.Financial InstrumentsIn January 2016, the accounting guidance was modified with respect to recognition, measurement, presentation and disclosure of financial instruments. The most notable impact of the amended accounting guidance for the Company is that this modification effectively supersedes and eliminates current accounting guidance for cost-method investments. Refer to Note 8, Fair Value of Financial Instruments, for additional information on the Company’s cost-method investments.The guidance is effective for the Company as of January 1, 2018, and early adoption is not permitted. The Company will adopt the new guidance using a modified retrospective approach through a cumulative-effect adjustment to retained earnings, if applicable, as of the effective date.The Company’s investments continue to be carried at their original cost and there have been no impairments in the cost-method investments or returns of capital. While the Company is currently reviewing the effects of this guidance, the Company believes that adoption of this modified accounting guidance would not have a material impact on the Company’s financial position, results of operations, or cash flows.Revenue RecognitionIn May 2014, the accounting guidance for revenue recognition was modified and subsequently updated with several amendments. Along with these modifications, most industry-specific revenue guidance was eliminated, including a current broadcasting exemption for reporting revenue from network barter programming. The new guidance provides companies with a revenue recognition model for recognizing revenue from contracts with customers. Accounts receivable balances in the table below exclude other receivables that are not generated from contracts with customers. These amounts are $1.4 million and $2.8 million as of September 30, 2022 and December 31, 2021, respectively.Description September 30,
2022December 31,
2021(amounts in thousands) Receivables, net, included in Accounts receivable net of allowance for doubtful accounts $ 264,840 $ 273,217 Unearned revenue - current 17,261 10,638 Unearned revenue - noncurrent 420 474 core principle of the new standard is to recognize revenue when promised goods or services are transferred to customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for such goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue recognition, billings and cash flows arising fromcollections results in accounts receivable (billed or unbilled), and customer contracts, including significant judgmentsadvances and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new guidance may be implemented using a modified retrospective approach or by using a full retrospective approach. The new guidance was originally effective for annual reporting periods beginning after December 15, 2016. In July 2015, the effective date was deferred by one year. As a result, the new guidance is effective for the Company as of January 1, 2018.The Company has completed the first two phases of the implementation process. In connection with the first phase, the Company performed the following activities during the second quarter of 2017: (1) completed an internal assessment of the Company’s operations and identified its significant revenue streams; (2) held revenue recognition conversations with certain of its sales managers and business managers across its markets for each of the identifiedrevenue streams; and (3) reviewed a representative sample of contracts and documented the key economics of the contracts to identify applicable qualitative revenue recognition changes related to the amended accounting guidance. In connection with the second phase, the Company performed the following activities during the third quarter of 2017: (1) established and documented key accounting policies; (2) assessed the disclosure requirements of the new standard; and (3) determined the impact on business processes and internal controls. The Company’s final phase will be to effectively implement the amended accounting guidance and embed the new accounting treatment into the Company’s business processes and internal controls to support the financial reporting requirements. The Company expects to complete this final phase of the implementation process in the fourth quarter of 2017. The Company plans to adopt the amended accounting guidance as of January 1, 2018, using the modified retrospective method.The Company is still evaluating the impact that the amended accounting guidance will havedeposits (unearned revenue) on the Company’s condensed consolidated financial statementsbalance sheets. At times, however, the Company receives advance payments or deposits from its customers before revenue is recognized, resulting in contract liabilities. The contract liabilities primarily relate to consideration received in advance from customers on certain contracts. For these contracts, revenue is recognized upon satisfaction of the underlying performance obligations. The contract liabilities are reported on the condensed consolidated balance sheets on a contract-by-contract basis at the end of each respective reporting period within other current liabilities and will be unable to quantify its impact until it completesother long-term liabilities.final phasecontract liabilities balances during the period are as follows:Nine Months Ended
September 30, 2022Description Unearned Revenue (amounts in thousands) Beginning balance on January 1, 2022 $ 11,112 Revenue recognized during the period that was included in the beginning balance of contract liabilities (11,112) Additions, net of revenue recognized during period 17,681 Ending balance $ 17,681 its implementation process. Based upon its preliminary assessment, which is subject to change, the impact of this guidance should not be material toRevenuefinancial position, resultsrevenues disaggregated by revenue source:Nine Months Ended
September 30,2022 2021 Revenue by Source (amounts in thousands) Spot revenues $ 584,363 $ 577,561 Digital revenues 190,024 169,746 Network revenues 66,592 61,626 Sponsorships and event revenues 35,724 32,021 Other revenues 35,000 33,718 Net revenues $ 911,703 $ 874,672 Three Months Ended
September 30,2022 2021 Revenue by Source (amounts in thousands) Spot revenues $ 204,742 $ 220,562 Digital revenues 62,685 61,378 Network revenues 23,663 23,453 Sponsorships and event revenues 13,760 12,093 Other revenues 12,119 11,957 Net revenues $ 316,969 $ 329,443 Lease Cost Nine Months Ended
September 30,2022 2021 (amounts in thousands) Operating lease cost $ 37,957 $ 36,728 Variable lease cost 8,395 8,876 Total lease cost $ 46,352 $ 45,604 Three Months Ended
September 30,Lease Cost 2022 2021 (amounts in thousands) Operating lease cost $ 12,605 $ 12,113 Variable lease cost 3,122 2,861 Total lease cost $ 15,727 $ 14,974 flows. Upon adoptionflow information related to leases was as follows:Nine Months Ended September 30, Description 2022 2021 (amounts in thousands) Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 41,072 $ 40,567 Right-of-use assets obtained in exchange for lease obligations $ 22,227 $ 14,898 this guidance,September 30, 2022, the Company will enhance its current disclosures to allow usershas not entered into any leases that have not yet commenced. however, amortized for tax purposes. The Company accounts for its acquired broadcasting licenses as indefinite-lived intangible assets and, similar to goodwill, these assets are reviewed at least annually for impairment. At the time of each review, if the fair value is less than the carrying value of goodwill and certain intangibles (such as broadcasting licenses),the reporting unit, then a charge is recorded to the results of operations.There was no material change in the carrying value of broadcasting licenses or goodwill since the year ended December 31, 2016, other than as described below.The Company recorded a $13.5 million loss in the first quarter of 2017 in net gain/loss on sale or disposal of assets as a result of the Company permanently discontinuing the operation of one of its stations and returning the station’s broadcasting license to the FCC for cancellation, in order to facilitate the Merger.Additionally, the carrying value of the broadcasting licenses at December 31, 2016, included the broadcasting licenses of a consolidated Variable Interest Entity (“VIE”) of approximately $15.7 million. These consolidated assets and liabilities of the VIE related to a pending acquisition of four radio stations in Charlotte, North Carolina. On October 17, 2016, the Company entered into an asset purchase agreement and a time brokerage agreement (“TBA”) to operate three of the four radio stations that were held in a trust (“Charlotte Trust”). As such, the amounts of the consolidated VIE at December 31, 2016, represented only the assets and liabilities of the three stations held in the Charlotte Trust.Upon the completion of this transaction on January 6, 2017, the Company deconsolidated broadcasting licenses attributable to the VIE and recorded broadcasting licenses of all four radio stations based upon the preliminary purchase price allocation. Refer to Note 9, Business Combinations, for additional information.On September 26, 2017, the Company entered into an agreement to divest three stations to Educational Media Foundation (“EMF”). This transaction is the first divestiture in a series of required divestitures related to the Company’s pending Merger with CBS Radio. The Company conducted an analysis and determined the assets of these three stations met the criteria to be classified as held for sale at September 30, 2017. Accordingly, the Company reclassified the amount of radio broadcasting licenses and goodwill allocable to these three stations to the assets held for sale financial statement line item at September 30, 2017. Refer to Note 10, Assets Held for Sale, for additional information.During the second quarter of 2017, the Company performed its annual impairment test of its goodwill and determined that the carrying amount of goodwill exceeded its fair value for the Boston, Massachusetts market and recorded an impairment loss of $0.4 million. A contributing factor to the impairment was a decline in the advertising dollars in the Boston, Massachusetts market and its effect on the Company’s operations, coupled with an increase in the carrying value of its assets.licenses as described above: Broadcasting Licenses
Carrying Amount September 30,
2017 December 31,
2016 (amounts in thousands) $ 823,195 $ 807,381 (13,500 ) — (15,738 ) 15,738 17,174 — — 112 (54,518 ) — — (36 ) $ 756,613 $ 823,195 Broadcasting Licenses
Carrying AmountSeptember 30,
2022December 31,
2021(amounts in thousands) Broadcasting licenses balance as of January 1, $ 2,251,546 $ 2,229,016 Acquisitions (See Note 2) — 23,233 Loss on impairment (159,089) — Assets held for sale (See Note 14) (4,380) (703) Ending period balance $ 2,088,077 $ 2,251,546 Goodwill Carrying Amount September 30,
2022December 31,
2021(amounts in thousands) Goodwill balance before cumulative loss on impairment as of January 1, $ 1,062,723 $ 1,042,762 Accumulated loss on impairment as of January 1, (980,547) (980,547) Goodwill beginning balance after cumulative loss on impairment as of January 1, 82,176 62,215 Loss on impairment (18,126) — Acquisitions (See Note 2) — 20,099 Measurement period adjustments to acquired goodwill (See Note 2) (134) (138) Ending period balance $ 63,916 $ 82,176 primarilyexceeds the fair value of the Company’s broadcasting licenses or goodwill. The analysis considers: (i) macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, or other developments in equity and credit markets; (ii) industry and market considerations such as deterioration in the environment in which the Company operates, an increased competitive environment, a change in the market for the Company’s products or services, or a regulatory or political development; (iii) cost factors such as increases in labor or other costs that have a negative effect on earnings and cash flows; (iv) overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; (v) other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, bankruptcy, or litigation; (vi) events affecting a reporting unit such as a resultchange in the composition or carrying amount of acquisitions of radio stations, the pending divestiture of three stations, and the Company’s net assets; and (vii) a sustained decrease in the Company’s share price.test. Goodwill Carrying Amount September 30,
2017 December 31,
2016 (amounts in thousands) $ 158,333 $ 158,244 (125,615 ) (125,615 ) 32,718 32,629 (441 ) — 43 — (266 ) — — 92 — (3 ) $ 32,054 $ 32,718 Broadcasting Licenses Impairment TestThetest conducted during the fourth quarter of 2021, the Company performs itscontinued to monitor these factors listed above. Due to a sustained decrease in the Company's share price, the increase in interest rates and related impact on the weighted average cost of capital, a contraction in the expected future economic and market conditions utilized in the annual broadcasting license impairment test duringconducted in the secondfourth quarter of each year by evaluating2021, and a reduction in projected operating performance at the QLGG reporting unit, the Company determined that the changes in circumstances warranted an interim impairment assessment on its broadcasting licenses for impairment atand goodwill during the market level using the direct method.During the secondthird quarter of the current yearyear. Due to changes in facts and eachcircumstances, the Company revised its estimates with respect to projected operating performance and discount rates used in the interim impairment assessments.the past several years,2021, the Company completed its annual impairment test for broadcasting licenses and determined that the fair value of its broadcasting licenses was greater than the amount reflected in the balance sheet for each of the Company’sCompany's markets and, accordingly, no impairment was recorded. The annual impairment test in 2017 did not includenew market acquired during the firstthird quarter of 2017. For the newcurrent year, the Company completed an interim impairment assessment for its broadcasting licenses at the market acquired duringlevel using the first quarterGreenfield method. As a result of 2017, similar valuation techniquesthis interim impairment assessment, the Company determined that are usedthe fair value of its broadcasting licenses was less than the amount reflected in the testing process were applied to the valuationbalance sheet for certain of the broadcasting licenses under purchase price accounting.(1)(i) the discount rate; (2)(ii) the market share and profit margin of an average station within a market, based upon market size and station type; (3)(iii) the forecast growth rate of each radio market; (4)(iv) the estimated capital start-up costs and losses incurred during the early years; (5)(v) the likely media competition within the market area; (6)(vi) the tax rate; and (7)(vii) future terminal values.(1)(i) through (3)(iii) above are the most important and sensitive in the determination of fair value.Estimates And Assumptions Third Quarter 2022 Fourth Quarter 2021 Discount rate 9.5 % 8.5 % Operating profit margin ranges for average stations in markets where the Company operates 19.6% to 32.9% 19.6% to 33.3% Forecasted growth rate (including long-term growth rate) range of the Company's markets 0.0% to 0.6% 0.0% to 0.6% There were no events or circumstances since The current macroeconomic conditions increase the Company’s second quarteruncertainty with respect to such market and economic conditions and, as such, increases the risk of future impairment. The Company will conduct its annual license impairment test that indicated an interim reviewfor broadcast licenses during the fourth quarter of broadcasting licenses was required, other than as described below.Theperformscompleted the Podcorn Acquisition. Cadence13, Pineapple and Podcorn represent a single podcasting division one level beneath the single operating segment. Since the operations are economically similar, Cadence13, Pineapple and Podcorn were aggregated into a single podcasting reporting unit for the quantitative impairment assessment conducted in the fourth quarter of 2021.goodwill impairment test during the second quarter of each year by evaluatingfor its goodwill for eachpodcasting reporting unit.As described above, the Company elected to early adopt the amended accounting guidance which simplifies the test for goodwill impairment. The amended guidance eliminates the second step of the goodwill impairment test, which reduces the costunit and complexity of evaluating goodwill for impairment. Under the former accounting guidance, the second step of the impairment test required the Company to compute the implied fair value of goodwill by assigningdetermined that the fair value of aits podcast reporting unit to allwas greater than the carrying value and, accordingly, no impairment was recorded. During the fourth quarter of 2021, the Company completed its annual impairment test for its QLGG reporting unit and determined that the fair value of its assets and liabilities as if thatQLGG reporting unit had beenwas greater than the carrying value and, accordingly, no impairment was recorded.a business combination. Under the amended guidance, ifWideOrbit Streaming Acquisition, similar valuation techniques that were applied in the carrying amountvaluation of goodwill under purchase price accounting were also used in the annual impairment testing process. The valuation of a reporting unit exceeds itsthe acquired goodwill approximated fair value,value.will considercompleted an interim impairment assessment for its goodwill at the goodwill to be impaired.The Company has determined that a radio market is apodcast reporting unit and the QLGG reporting unit. As a result of this interim impairment assessment, the Company assesses goodwill in each of the Company’s markets. Under the amended guidance, ifdetermined that the fair value of anyits podcast reporting unit iswas greater than the carrying value, and accordingly, no impairment was recorded. As a result of this interim impairment assessment, the Company determined that the fair value of its QLGG reporting unit was less than the amount reflected onin the balance sheet and, accordingly, recorded an impairment loss of $18.1 million. As a result of this impairment assessment, the Company will recognize an impairment chargeno longer has any goodwill attributable to the QLGG reporting unit.amount by which the carrying amount exceeds theinterim impairment tests of its podcast reporting unit’s fair value. The loss recognized will not exceed the total amount of goodwill allocatedunit and QLGG reporting unit and proceeded directly to the reporting unit.Under the amended guidance, the Company first assesses qualitative factors to determine whether itquantitative goodwill impairment test by using a discounted cash flow approach (a 5-year income model). Potential impairment is necessary to perform a quantitative assessment for each reporting unit. These qualitative factors include, but are not limited to: (1) macroeconomic conditions; (2) radio broadcasting industry considerations; (3) financial performance of reporting units; (4) Company-specific events; and (5) a sustained decrease in the Company’s share price. If the quantitative assessment is necessary, the Company determines the fair value of the goodwill allocated to each reporting unit.To determine the fair value, the Company uses a market approach and, when appropriate, an income approach in computingidentified by comparing the fair value of each reporting unit.unit to its carrying value. The market approach calculatesCompany’s fair value analysis contains assumptions based upon past experience, reflects expectations of industry observers and includes judgments about future performance using industry normalized information. The cash flow projections for the reporting units include significant judgments and assumptions relating to the revenue, operating expenses, projected operating profit margins, and the discount rate. Changes in the Company's estimates of the fair value of each market’s radio stations by analyzing recent sales and offering prices of similar properties expressed as a multiple of cash flow. The income approach utilizes a discounted cash flow method by projecting the subject property’s income over a specified time and capitalizing at an appropriate market rate to arrive at an indicationthese assets could result in material future period write-downs of the most probable selling price. Management believes that these approaches are commonly used and appropriate methodologies for valuing broadcast radio stations. Factors contributing to the determinationcarrying value of the reporting unit’s operating performance were historical performance and/or management’sCompany's goodwill.of future performance.During the second quarter of the current year, the Company’s quantitative assessment indicated that the goodwill allocated to its Boston, Massachusetts market was impaired. The annual impairment test in 2017 did not include the new market acquired during the first quarter of 2017. For the new market acquired during the first quarter of 2017, similar valuation techniques that areand assumptions used in the testing process were appliedinterim and annual goodwill impairment assessments of each year:Estimates And Assumptions Third Quarter 2022 Fourth Quarter 2021 Discount rate - podcast reporting unit 11.0 % 9.5% Discount rate - QLGG reporting unit 13.0 % 12.0% valuationfair value of the goodwill under purchase price accounting.There were no events or circumstances since The current macroeconomic conditions increase the Company’s second quarter annual goodwill test that indicated an interim reviewuncertainty with respect to such market and economic conditions and, as such, increases the risk of goodwill was required, other than as described below.Annual Broadcasting Licenses and Goodwill Impairment Test for Newly Acquired MarketAs discussed above, thefuture impairment. The Company will conduct its annual impairment test for broadcasting licenses and goodwill which was performed induring the secondfourth quarter of 2017, did not include the broadcasting licenses and goodwill2022. Other Current Liabilities September 30,
2017 December 31,
2016 (amounts in thousands) $ 9,628 $ 8,059 2,590 3,571 2,540 1,102 1,828 3,587 4,637 3,284 $ 21,223 $ 19,603 4.Other Current Liabilities September 30,
2022December 31,
2021(amounts in thousands) Accrued compensation $ 24,946 $ 35,917 Accounts receivable credits 5,239 2,506 Advertiser obligations 5,664 2,504 Accrued interest payable 13,279 14,662 Unearned revenue 17,261 10,638 Unfavorable sports liabilities 885 4,492 Accrued benefits 7,232 6,894 Non-income tax liabilities 1,876 1,897 Other 4,062 4,620 Total other current liabilities $ 80,444 $ 84,130 (A) Senior DebtThe Credit FacilityOn November 1, 2016, the Company and its wholly owned subsidiary, Entercom Radio, LLC, (“Radio”) entered into a $540 million credit agreement (the “Credit Facility”) with a syndicate of lenders that was initially comprised of: (a) a $60 million revolving credit facility (the “Revolver”) that matures on November 1, 2021; and (b) a $480 million term B loan (the “Term B Loan”) that matures on November 1, 2023.As of September 30, 2017, the amount outstanding under the Term B Loan was $458.0 million and the amount outstanding under the Revolver was $22.5 million. The amount undrawn under the Revolver, which includes the impact of the outstanding letters of credit, was $36.8 million as of September 30, 2017. The Company’s ability to draw additional amounts under the Revolver may be limited due to its Consolidated Leverage Ratio.Long-Term Debt September 30,
2022December 31,
2021(amounts in thousands) Credit Facility Revolver $ 165,000 $ 97,727 Term B-2 Loan, due November 17, 2024 632,415 632,415 Plus unamortized premium 1,186 1,397 798,601 731,539 2027 Notes 6.500% notes due May 1, 2027 460,000 470,000 Plus unamortized premium 3,406 3,964 463,406 473,964 2029 Notes 6.750% notes due March 31, 2029 540,000 540,000 540,000 540,000 Accounts receivable facility 75,000 75,000 Other debt 782 764 Total debt before deferred financing costs 1,877,789 1,821,267 Current amount of long-term debt — (22,727) Deferred financing costs (excludes the revolving credit) (12,667) (16,409) Total long-term debt, net of current debt $ 1,865,122 $ 1,782,131 Outstanding standby letters of credit $ 6,069 $ 6,069 2017: Long-Term Debt September 30, December 31, 2017 2016 (amounts in thousands) $ 22,500 $ — 458,000 480,000 480,500 480,000 74 87 480,574 480,087 (3,618 ) (4,817 ) (6,033 ) (7,619 ) $ 470,923 $ 467,651 $ 700 $ 670 Term B Loan requires mandatory prepayments equalCredit Facilitypercentagenet first lien leverage ratio, restricted payments and the incurrence of Excess Cash Flow,additional debt. Specifically, the Credit Facility requires the Company to comply with a certain financial covenant which is a defined term within the agreement, subject to incremental step-downs, depending on theincluding a maximum Consolidated Leverage Ratio. Beginning in 2018, the Excess Cash Flow payment will be due in the first quarter of each year, and is based on the Excess Cash Flow andNet First-Lien Leverage Ratio for the prior year.As ofthat cannot exceed 4.0 times at September 30, 2017, the Company’s Consolidated Leverage Ratio was 4.9 times versus a covenant limit of 5.0 times and the Consolidated Interest Coverage Ratio was 3.8 times versus a covenant minimum of 2.0 times.As of September 30, 2017,2022. In certain circumstances, if the Company was in compliance with all financial covenants and all otherconsummates additional acquisition activity permitted under the terms of the Credit Facility, in all material respects. The Company’s ability to maintain compliance with its covenants under the Credit Facility is highly dependent on its results of operations. Management believes that over the next 12 months the Company can continue to maintain compliance.Management believes that cash on hand, cash from the Revolver and cash from operating activities, together with the proceeds of the committed financing described below,Consolidated Net First-Lien Leverage Ratio will be sufficientincreased to permit4.5 times for a one year period following the Company to meet its liquidity requirements over the next 12 months, including its debt repayments. The cash available from the Revolver is dependent onconsummation of such permitted acquisition. As of September 30, 2022, the Company’s Consolidated Net First Lien Leverage Ratio at the time of such borrowing.covenantscovenant or other terms of its Credit Facility and any subsequent failure to negotiate and obtain any required relief from its lenders could result in a default under the Company’s Credit Facility. Any event of default could have a material adverse effect on the Company’s business and financial condition. The acceleration of the Company’s debt repayment could have a material adverse effect on its business. The Company may seek from time to time to amend its Credit Facility or obtain other funding or additional funding, which may result in higher interest ratesrates.debt.CBS Radio Merger Agreement, CBS Radiofirst quarter of 2021, the Company: (i) recorded $6.6 million of new debt issuance costs attributable to the 2029 Notes; and (ii) $0.4 million of debt issuance costs attributable to the Revolver which will be amortized over the remaining term of the Revolver on a straight line basis. The Company also incurred $0.5 million of costs which were classified within refinancing expenses.a commitment letter with a syndicate of lenders (the “Commitment Parties”an amendment ("Amendment No. 5") to the Credit Agreement dated October 17, 2016 (as previously amended, the "Existing Credit Agreement" and, as amended by Amendment No. 5, the "Credit Agreement"), pursuant to which the Commitment Parties committed to provide up to $500 million of senior secured term loans (the “CBS Radio Financing”) as an additional tranche under a creditagreement (the “CBS Radio Credit Agreement”) among CBS Radio,with the guarantors named therein,party thereto, the lenders named therein,party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. The proceedsAmendment No. 5, among other things:this additional tranche will be used to: (1) refinance the Company’sConsolidated Net First Lien Leverage Ratio (as defined in the Credit Facility; (2) redeemAgreement) through the Company’s Perpetual Cumulative Convertible Preferred Stock (“Preferred”Test Period (as defined in the Credit Agreement) ending December 31, 2020; (ii) adding a new minimum liquidity covenant of $75.0 million until December 31, 2021, or such earlier date as the Company may elect (the "Covenant Relief Period"); and (3) pay(iii) imposing certain restrictions during the Covenant Relief Period, including among other things, certain limitations on incurring additional indebtedness and liens, making restricted payments or investments, redeeming notes and entering into certain sale and lease-back transactions;expenses(y) in connectionthe case of Base Rate Loans (as defined in the Credit Agreement), a customary base rate formula plus a margin of 1.50% per annum, and (ii) Letter of Credit (as defined in the Credit Agreement) fees to 2.50% times the daily maximum amount available to be drawn under any such Letter of Credit; andrefinancing. Consolidated Net First Lien Leverage Ratio financial covenant during the Covenant Relief Period, which fixed amounts correspond to the Borrower's Consolidated EBITDA as reported under the Existing Credit Agreement for the Test Period ended March 31, 2020, for the fiscal quarters ending June 30, 2019, September 30, 2019, and December 31, 2019, respectively.3, 2017, CBS Radio5, 2021, Audacy Capital Corp. entered into an amendment ("Amendment No. 6") to the CBS Radio Credit Agreement dated October 17, 2016 (as previously amended, the “Existing Credit Agreement” and, as amended by Amendment No. 6, the “Credit Agreement”), with the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.createexcludes from the Covenant Relief Period Investment Limitation any investments made in connection with a tranchepermitted receivables financing facility. The Covenant Relief Period ended in the fourth quarter of Term B-1 Loans2021.aggregate principal amount notongoing basis, its accounts receivable, together with customary related security and interests in the proceeds thereof, to exceed $500 million. Audacy Receivables. Pursuant to the Receivables Purchase Agreement, Audacy Receivables has sold and will continue to sell on an ongoing basis such accounts receivable, together with customary related security and interests in the proceeds thereof, to the Investors in exchange for cash investments.Term B-1 Loans, which replace the commitment,Agreements contain representations, warranties and covenants that are expectedcustomary for bankruptcy-remote securitization transactions, including covenants requiring Audacy Receivables to be fundedtreated at all times as an entity separate from the Originators, Audacy Operations, the Company or any of its other affiliates and that transactions entered into between Audacy Receivables and any of its affiliates shall be on arm’s-length terms. The Receivables Purchase Agreement also contains customary default and termination provisions which provide for acceleration of amounts owed under the Receivables Purchase Agreement upon the occurrence of certain specified events with respect to Audacy Receivables, Audacy Operations, the Originators, or the Company, including, but not limited to: (i) Audacy Receivables’ failure to pay yield and other amounts due;Commitment PartiesSPV to pay the purchase price for accounts receivable it acquires from Audacy NY and may be used to fund capital expenditures, repay borrowings on the closing dateCredit Facility, satisfy maturing debt obligations, as well as fund working capital needs and other approved uses.Merger, subjectSPV (including the accounts receivable) are not available to creditors of Audacy NY, Audacy Operations or the Company, and the accounts receivable are not legally assets of Audacy NY, Audacy Operations or the Company. The Receivables Facility is accounted for as a secured financing.conditions.covenants including, but not limited to, a net first lien leverage ratio, a required minimum tangible net worth, and a minimum liquidity requirement (the "financial covenants"). Specifically, the Receivables Facility requires the Company to comply with a certain financial covenant which is a defined term within the agreement, including a maximum Consolidated Net First-Lien Leverage Ratio that cannot exceed 4.0 times at September 30, 2022. As of September 30, 2022, the Company’s Consolidated Net First Lien Leverage Ratio was 3.8 times. The Term B-1 LoansReceivables Facility also requires the Company to maintain a minimum tangible net worth, as defined within the agreement, of at least $300.0 million. Additionally, the Receivables Facility requires the Company to maintain liquidity of $75.0 million. As of September 30, 2022, the Company was compliant with the financial covenants.be governed byexpire on July 15, 2024, unless earlier terminated or subsequently extended pursuant to the CBS Radio Credit Agreementterms of the Receivables Purchase Agreement. The pledged receivables and will maturethe corresponding debt are included in Accounts receivable, net and Long-term debt, net of current portion, respectively, on the date that is seven years afterCondensed Consolidated Balance Sheet. At September 30, 2022, the closing dateCompany had outstanding borrowings of $75.0 million under the Merger. The Term B-1 Loans will require quarterly principal payments at an annual rateReceivables Facility. Refer to Note 1, Basis of 1% of the initial principal amount of the Term B-1 Loans, beginning with the first full fiscal quarter ending after the closing of the Merger. The Term B-1 Loans are expected to bear interest at a per annum rate equal to LIBOR plus 2.75%. Interest on the Term B-1 Loans will be payable at the end of each interest period, but in no event less frequently than quarterly.In 2016,issued a call notice to redeem its $220.0 million 10.5%also assumed the 7.250% unsecured Senior Notes due December 1, 2019senior notes (the “Senior Notes”) that were subsequently modified and were set to mature on November 1, 2024 in fullthe amount of $400.0 million. The Senior Notes were originally issued by CBS Radio Inc. (now Audacy Capital Corp.) on October 17, 2016.an effective date of December 1, 2016, that was funded by the proceeds of the Credit Facility. As a result of the full redemption of the Senior Notes with replacement debt at a lower interest rate,during the net interest expensefirst quarter of 2021, the Company wrote off the following amounts to gain/loss on extinguishment of debt: (i) $14.5 million in prepayment premiums for the first three quartersearly retirement of 2017 was reducedthe Senior Notes; (ii) $8.7 million of unamortized premium attributable to the Senior Notes; (iii) $1.0 million of unamortized debt issuance costs attributable to the Senior Notes; and does not include amortization(iv) $1.3 million of original issue discount of Senior Notes. Net Interest Expense Nine Months Ended
September 30, 2017 2016 (amounts in thousands) $ 16,913 $ 25,382 1,752 1,929 — 280 (79 ) (38 ) $ 18,586 $ 27,553 Net Interest Expense Three Months Ended
September 30, 2017 2016 (amounts in thousands) $ 5,920 $ 8,324 586 611 — 96 (30 ) (17 ) $ 6,476 $ 9,014 5.Net Interest Expense Nine Months Ended
September 30,2022 2021 (amounts in thousands) Interest expense $ 73,119 $ 64,285 Amortization of deferred financing costs 3,832 3,580 Amortization of original issue premium of senior notes (768) (1,331) Interest income and other investment income (70) (50) Total net interest expense $ 76,113 $ 66,484 Net Interest Expense Three Months Ended
September 30,2022 2021 (amounts in thousands) Interest expense $ 27,076 $ 21,668 Amortization of deferred financing costs 1,293 1,342 Amortization of original issue premium of senior notes (256) (241) Interest income and other investment income — 2 Total net interest expense $ 28,113 $ 22,771 Type
Of
HedgeNotional
AmountEffective
DateCollar Fixed
LIBOR
RateExpiration
DateNotional
Amount
DecreasesAmount
After
Decrease(amounts
in millions)(amounts
in millions)Cap 2.75% Collar $ 220.0 Jun. 25, 2019 Floor 0.402% Jun. 28, 2024 Jun. 28, 2023 $ 90.0 Total $ 220.0 Accumulated Derivative Gain (Loss) Description September 30,
2022December 31,
2021(amounts in thousands) Accumulated derivative unrealized gain (loss) $ 2,909 $ (289) Other Comprehensive Income (Loss) Net Change in Accumulated Derivative Unrealized Gain (Loss) Net Amount of Accumulated Derivative Gain (Loss) Reclassified to the Consolidated Statement of Operations Nine Months Ended September 30, 2022 2021 2022 2021 (amounts in thousands) $ 3,198 $ 929 $ 232 $ 912 Other Comprehensive Income (Loss) Net Change in Accumulated Derivative Unrealized Gain (Loss) Net Amount of Accumulated Derivative Gain (Loss) Reclassified to the Condensed Consolidated Statement of Operations Three Months Ended September 30, 2022 2021 2022 2021 (amounts in thousands) $ 1,422 $ 170 $ — $ 263 share: Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 (amounts in thousands except per
share data) $ 4,100 $ 11,420 $ 1,184 $ 26,666 663 526 1,763 1,351 $ 3,437 $ 10,894 $ (579 ) $ 25,315 38,955 38,485 38,948 38,457 $ 0.09 $ 0.28 $ (0.01 ) $ 0.66 $ 4,100 $ 11,420 $ 1,184 $ 26,666 663 — 1,763 1,351 $ 3,437 $ 11,420 $ (579 ) $ 25,315 38,955 38,485 38,948 38,457 773 1,014 — 917 — 1,934 — — 39,728 41,433 38,948 39,374 $ 0.09 $ 0.28 $ (0.01 ) $ 0.64 Three Months Ended
September 30,Nine Months Ended
September 30,2022 2021 2022 2021 (amounts in thousands except per share data) Basic (Loss) Per Share Numerator Net loss $ (140,975) $ (4,761) $ (152,821) $ (24,982) Denominator Basic weighted average shares outstanding 139,361 135,894 139,246 135,857 Net loss per share - Basic $ (1.01) $ (0.04) $ (1.10) $ (0.18) Diluted (Loss) Per Share Numerator Net loss $ (140,975) $ (4,761) $ (152,821) $ (24,982) Denominator Basic weighted average shares outstanding 139,361 135,894 139,246 135,857 Effect of RSUs and options under the treasury stock method — — — — Diluted weighted average shares outstanding 139,361 135,894 139,246 135,857 Net loss per share - Diluted $ (1.01) $ (0.04) $ (1.10) $ (0.18) Ofof Anti-Dilutive Shares Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (amounts in thousands, except per share data) 14 — — — $ 11.69 $ — $ — $ — $ 11.78 $ — $ — $ — 157 — 101 — 267 478 267 478 — 21 — 21 2,017 — 2,017 1,934 — — 974 — 6.Three Months Ended
September 30,Nine Months Ended
September 30,Impact Of Equity Issuances 2022 2021 2022 2021 (amounts in thousands, except per share data) Shares excluded as anti-dilutive under the treasury stock method: Options 609 588 609 588 Price range of options: from $ 3.54 $ 4.88 $ 3.54 $ 4.88 Price range of options: to $ 13.98 $ 13.98 $ 13.98 $ 13.98 RSUs with service conditions 836 1,411 816 429 RSUs excluded with service and market conditions as market conditions not met 825 — 825 — Excluded shares as anti-dilutive when reporting a net loss 891 1,626 1,677 2,171 Entercom Equity Compensation PlanCompany's equity compensation plan (the “Plan”), the Company is authorized to issue share-based compensation awards to key employees, directors and consultants. Period Ended Number Of
Restricted
Stock Units Weighted
Average
Purchase
Price Weighted
Average
Remaining
Contractual
Term
(Years) Aggregate
Intrinsic
Value As Of
September 30,
2017 December 31, 2016 2,074,794 206,603 (468,153 ) (22,623 ) September 30, 2017 1,790,621 $ — 1.2 $ 20,413,079 September 30, 2017 1,790,621 $ — 1.2 $ 20,413,079 September 30, 2017 48,880 $ — — $ 557,232 1.9 $ 8,259,906 Period Ended Number of Restricted Stock Units Weighted Average Purchase Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value as of September 30,
2022(amounts in thousands) RSUs outstanding as of: December 31, 2021 7,342 RSUs awarded September 30, 2022 1,776 RSUs released September 30, 2022 (2,239) RSUs forfeited September 30, 2022 (274) RSUs outstanding as of: September 30, 2022 6,605 $ — 1.0 $ 2,594 RSUs vested and expected to vest as of: September 30, 2022 6,605 $ — 1.0 $ 2,594 RSUs exercisable (vested and deferred) as of: September 30, 2022 5 $ — 0.0 $ 2 Weighted average remaining recognition period in years 1.6 Unamortized compensation expense $ 5,921 Withwith Service Andand Market Conditions These shares vest if: (1) the Company’s stock achieves certain shareholder performance targets over a defined measurement period; and (2) the employee fulfills a minimum service period. The compensation expense is recognized even if the market conditions are not satisfied and are only reversed in the event the service period is not met, as all of the conditions need to be satisfied. These RSUs are amortized over the longest of the explicit, implicit or derived service periods, which range from approximately one to three years.The following table presents the changes in outstanding RSUs with market conditions: Nine Months Ended
September 30, Year Ended
December 31, 2017 2016 630 390 — 470 — — (50 ) (230 ) 580 630 $ — $ 7.34 The fair value of RSUs with service conditions is estimated using the Company’s closing stock price on the date of the grant. To determine the fair value of RSUs with service and market conditions, the Company used the Monte Carlo simulation lattice model. The Company’s determination of the fair value was based on the number of shares granted, the Company’s stock price on the date of grant and certain assumptions regarding a number of highly complex and subjective variables. If other reasonable assumptions were used, the results could differ.The specific assumptions used for these valuations are as follows:Nine Months EndedSeptember 30, 2017Year EndedDecember 31,2016Expected Volatility Term Structure(1)— 35% to 45%Risk-Free Interest Rate(2)— 0.4% to 1.1%Annual Dividend Payment Per Share (Constant)(3)$— $0.30(1)Expected Volatility Term Structure—The Company estimated the volatility term structure using: (1) the historical volatility of its stock; and (2) the implied volatility provided by its traded options from a trailing month’s average of the closing bid-ask price quotes.(2)Risk-Free Interest Rate—The Company estimated the risk-free interest rate based upon the implied yield available on U.S. Treasury issues using the Treasury bond rate as of the date of grant.(3)Annual Dividend Payment Per Share (Constant) – The Company assumed a constant annual dividend of $0.30 per share.RSUs With Service And Performance ConditionsIn addition to the RSUs included in the table above summarizing the activity in RSUs under the Plan, the Company issued RSUs with both service and performance conditions. Vesting of performance-based awards, if any, is dependent upon the achievement of certain performance targets. If the performance standards are not achieved, all unvested shares will expire and any accrued expense will be reversed. The Company determines the requisite service period on a case-by-case basis to determine the expense recognition period for non-vested performance based RSUs. The fair value is determined based upon the closing price of the Company’s common stock on the date of grant. The Company applies a quarterly probability assessment in computing its non-cash compensation expense and any change in the estimate is reflected as a cumulative adjustment to expense in the quarter of the change.The following table reflects the activity of RSUs with service and performance conditions: Nine Months Ended
September 30, Year Ended
December 31, 2017 2016 (amounts in thousands, except
per share data) — 29 — — — (29 ) — — $ — $ — As of September 30, 2017, no non-cash compensation expense was recognized for RSUs with performance conditions. Nine Months Ended September 30, 2017 2016 (amounts in thousands) $ 58 $ 325 $ 23 $ 125 $ 22 $ 39 (1)Amount for prior year excludes impact from suspended income tax benefits and/or valuation allowances.Nine Months Ended
September 30,Option Exercise Data 2022 2021 (amounts in thousands) Intrinsic value of options exercised $ — $ 497 Tax benefit from options exercised $ — $ 133 Cash received from exercise price of options exercised $ — $ 45 Period Ended Number Of
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Term (Years) Intrinsic
Value
As Of
September 30,
2017 December 31, 2016 329,562 $ 1.91 — — (6,500 ) 3.37 — — (500 ) 9.10 September 30, 2017 322,562 $ 1.87 1.3 $ 3,077,559 September 30, 2017 322,562 $ 1.87 1.3 $ 3,077,559 September 30, 2017 322,562 $ 1.87 1.3 $ 3,077,559 — $ — Period Ended Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Intrinsic Value as of September 30
2022(amounts in thousands) Options outstanding as of: December 31, 2021 609 $ 11.33 Options exercised September 30, 2022 — — Options outstanding as of: September 30, 2022 609 $ 11.33 2.1 $ — Options vested and expected to vest as of: September 30, 2022 609 $ 11.33 2.1 $ — Options vested and exercisable as of: September 30, 2022 609 $ 11.33 2.1 $ — Weighted average remaining recognition period in years 0.0 Unamortized compensation expense $ — Options Outstanding Options Exercisable Number Of Weighted Number Of Options Average Weighted Options Weighted Range Of Outstanding Remaining Average Exercisable Average Exercise Prices September 30, Contractual Exercise September 30, Exercise From To 2017 Life Price 2017 Price $ 1.34 $ 1.34 300,437 1.4 $ 1.34 300,437 $ 1.34 $ 2.02 $ 11.78 22,125 1.0 $ 9.08 22,125 $ 9.08 $ 1.34 $ 11.78 322,562 1.3 $ 1.87 322,562 $ 1.87 Options Outstanding Options Exercisable (amounts in thousands) Range of
Exercise PricesNumber of Options Outstanding September 30,
2022Weighted
Average
Remaining
Contractual
LifeWeighted
Average
Exercise
PriceNumber of Options Exercisable September 30,
2022Weighted
Average
Exercise
PriceFrom To $ 3.54 7.01 67 6.7 5.40 67 $ 5.40 $ 9.66 13.98 542 1.5 12.06 542 $ 12.06 $ 3.54 13.98 609 2.1 11.33 609 $ 11.33 ourthe Company’s statement of operations: Nine Months Ended September 30, 2017 2016 (amounts in thousands) $ 937 $ 962 3,692 3,698 4,629 4,660 1,528 1,637 $ 3,101 $ 3,023 Three Months Ended
September 30, 2017 2016 (amounts in thousands) $ 360 $ 372 1,197 1,270 1,557 1,642 525 888 $ 1,032 $ 754 (1)Amount for prior year excludes impact from suspended income tax benefits and/or valuation allowances.7.Nine Months Ended
September 30,2022 2021 (amounts in thousands) Station operating expenses $ 2,989 $ 3,054 Corporate general and administrative expenses 3,956 6,726 Stock-based compensation expense included in operating expenses 6,945 9,780 1,404 2,219 After-tax stock-based compensation expense $ 5,541 $ 7,561 Three Months Ended
September 30,2022 2021 (amounts in thousands) Station operating expenses $ 828 $ 937 Corporate general and administrative expenses 24 3,491 Stock-based compensation expense included in operating expenses 852 4,428 50 1,054 After-tax stock-based compensation expense $ 802 $ 3,374 Rates For TheRate for the Nine Months Andand Three Months Ended September 30, 2017rates were 131.7%rate of 22.0% and 41.5%21.7% for the nine months and three months ended September 30, 2017,2022, respectively. These rates wereThe effective income tax rate was determined using a forecasted tax rate based upon projected taxable income for the year. The effective income tax rate for the period was impacted by: (1) mergerby permanent items, state tax expense, discrete income tax expense items related to stock based compensation, a valuation allowance for certain state net operating losses, adjustments related to amended federal income tax returns for 2018 and acquisition costs2019, and interest and penalties associated with uncertain tax positions.result in an increaseincludes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effects of the COVID-19 pandemic. The CARES Act includes significant business tax provisions that, among other things, includes the removal of certain limitations on utilization of net operating losses, increases the loss carry back period for certain losses to five years, and increases the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. The Company was able to carryback its 2020 federal income tax loss to prior tax years and file a refund claim with the IRS for $15.2 million, which it received in the annual estimated effective tax rate; and (2) a discrete windfallfirst quarter of 2022. During the third quarter of 2022, the Company filed amended federal income tax benefit, described below. The annual estimated effective tax rate is estimated to be higher thanreturns for 2018 and 2019, in previous years primarily due to the amountwhich it requested a refund of merger and acquisition costs forecasted$5.5 million for 2017 as a result of the Merger, as a significant portion of these costs are not deductible for federal and state income tax purposes.As a result of adopting the amended accounting guidance for stock-based compensation on January 1, 2017, the Company recorded,2018.nine months ended September 30, 2017, a discrete windfall income tax benefit of $0.8 million from the vesting of stock-based awards with tax deductions in excess of the compensation expense recorded. Refer to Note 1, Basis of PresentationNine and Significant Policies, for additional information.Tax Rates For The Nine Months And Three Months Ended September 30, 2016rates were 37.6%rate of 20.7% and 39.8%173.5% for the nine months and three months ended September 30, 2016, respectively. These rates were impacted by discrete2021, respectively, which was determined using a forecasted rate based upon projected taxable income tax benefits from recent legislation in certain single member states that allowed for: (1)for the reversal of partial valuation allowances; and (2) a retroactive decrease in deferred tax liabilities associated with non-amortizable assets such as broadcasting licenses and goodwill. The income tax rate was also impacted by income tax expense from: (i) an increase in deferred tax liabilities associated with non-amortizable assets such as broadcasting licenses and goodwill; (ii) an adjustment for expenses that are not deductible for tax purposes; and (iii) a tax benefit shortfall associated with share-based awards.Andand LiabilitiesAs of September 30, 2017, and December 31, 2016, net deferred tax liabilities were $82.7 million and $92.9 million, respectively. 8.Ofof Financial Instruments Subject Toto Fair Value MeasurementsCompany’sCompany's financial assets and/or liabilities that were accounted for at fair value on a recurring basis and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’sCompany's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value and its placement within the fair value hierarchy levels. Fair Value Measurements At
Reporting Date September 30, December 31, 2017 2016 (amounts in thousands) $ 12,097 $ 10,875 (1)The Company’s deferred compensation liability, which is included in other long-term liabilities, is recorded at fair value on a recurring basis. The unfunded plan allows participants to hypothetically invest in various specified investment options. The deferred compensation plan liability is valued at Level 1 as it is based on quoted market prices of the underlying investments.Fair Value Measurements At Reporting Date Description Balance at September 30,
2022(amounts in thousands) Assets $ 3,967 $ — $ 3,967 $ — $ — Liabilities $ 22,473 $ 18,157 $ — $ — $ 4,316 $ 30 $ — $ — $ 30 $ — Description Balance at December 31,
2021(amounts in thousands) Liabilities $ 32,730 $ 26,839 $ — $ — $ 5,891 $ 394 $ — $ 394 $ — $ — $ 8,783 $ — $ — $ 8,783 $ — quartersthree months ended JuneSeptember 30, 20172022 and 2016, the Company reviewed the fair value of its broadcasting licenses and goodwill, and concluded that its broadcasting licenses were not impaired as the fair value of these assets equaled or exceeded their carrying value. The Company concluded that the carrying value of goodwill allocated to its Boston, Massachusetts market exceeded its fair value. Accordingly, the Company wrote off approximately $0.4 million of goodwill during the second quarter of 2017. Refer to Note 2, Intangible Assets and Goodwill, for additional information. There2021, there were no events or changes in circumstances which indicated the Company’s cost-method investments, property and equipment, orROU assets, other intangible assets, or assets held for sale may not be recoverable. Accordingly,As discussed above, the Company did not estimateconducted an interim impairment assessment on its broadcasting licenses and goodwill during the fair valuethird quarter of these assets.Ofof Financial Instruments Subject Toto Disclosuresamountamounts of the following assets and liabilities approximatesapproximate fair value due to the short maturity of these instruments: (1)(i) cash and cash equivalents; (2)(ii) accounts receivable; and (3)(iii) accounts payable, including accrued liabilities.periodsdates indicated: September 30,
2017 December 31,
2016 Carrying
Value Fair
Value Carrying
Value Fair
Value (amounts in thousands) $ 458,000 $ 459,718 $ 480,000 $ 487,200 $ 22,500 $ 22,500 $ — $ — $ 74 $ 87 September 30,
2022December 31,
2021(amounts in thousands) $ 632,415 $ 531,229 $ 632,415 $ 626,881 $ 165,000 $ 165,000 $ 97,727 $ 97,727 $ 540,000 $ 132,975 $ 540,000 $ 527,850 $ 460,000 $ 116,150 $ 470,000 $ 460,600 $ 75,000 $ 75,000 $ 782 $ 764 $ 6,069 $ 6,069 (1)The Company’s determination of the fair value of the Term B Loan was based on quoted prices for this instrument and is considered a Level 2 measurement as the pricing inputs are other than quoted prices in active markets.(2)The fair value of the Revolver was considered to approximate the carrying value as the interest payments are based on LIBOR rates that reset periodically. The Revolver is considered a Level 2 measurement as the pricing inputs are other than quoted prices in active markets.(3) to estimate the fair value of the other debt.Cost-Method InvestmentsThe Company holds investments in equity securities that are accounted for as cost-method investments. These investments represent its holdings in privately held companies that are not exchange-traded and therefore not supported with observable market prices. The cost-method investments are recognized on the consolidated balance sheet at their cost basis, which represents the amount the Company paid to acquire the investments. The cost-method of accounting is utilized as the Company does not have significant influence over the investees and the fair value of the investees is not readily determinable.The Company periodically evaluates the carrying value of its cost-method investments, when events and circumstances indicate that the carrying amount of the assets may not be recoverable. The Company considers investee financial performance and other information received from the investee companies, as well as any other available estimates of the fair value of the investee companies in its evaluation.If certain impairment indicators exist, the Company determines the fair value of its cost-method investments. If the Company determines the carrying value of a cost-method investment exceeds its fair value, and that difference is other than temporary, the Company writes down the value of the cost-method investment to its fair value. The fair value of the cost-method investments are not adjusted if there are no identified adverse events or changes in circumstances that may have a material effect on the fair value of the cost-method investment.Since its initial date of investment, the Company has not identified any events or changes in circumstances which would require the Company to estimate the fair value of its cost-method investments. Additionally, there have been no returns of capital. As a result, the cost-method investments continue to be presented at their original cost basis within the deferred charges andaccounts receivable facility, other assets, net of accumulated amortization line item.There was no material change in the carrying value of the Company’s cost-method investments since the year ended December 31, 2016, other than as described below.On July 26, 2017, the Company purchased a minority ownership interest in DGital Media Inc. (“DGital”), a leading creator of premium, personality-based podcasts and other on-demand audio content for $9.7 million. Subsequent to the Company’s initial investment, DGital rebranded as Cadence13. Under the terms of the purchase agreement, the Company also obtained an option to acquire the remaining ownership interest in Cadence13 in 2021. The Company and Cadence13 entered into a multi-year services agreement under which Cadence13 will dedicatesignificant resources to create world-class, original on-demand audio content leveraging the Company’s deep roster of local talent and relationships in the world of sports, news, politics, music, comedy, and technology. Cadence13 will also serve as the Company’s exclusive third party advertisement sales representative for all of its podcasts and other on-demand audio.The following table presents the changes in the Company’s cost-method investments as described above: Cost-Method Investments
Carrying Amount September 30, December 31, 2017 2016 (amounts in thousands) $ 255 $ 255 — — 255 255 9,700 — $ 9,955 $ 255 9. BUSINESS COMBINATIONSThe Company consummated acquisitions under the acquisition method of accounting, and the purchase price was allocated to the assets and liabilities based upon their respective fair values as determined as of the acquisition date. Merger and acquisition costs are excluded from the purchase price as these costs are expensed for book purposes and amortized for tax purposes.2017 Charlotte AcquisitionOn January 6, 2017, the Company completed a transaction to acquire four radio stations in Charlotte, North Carolina from Beasley Broadcast Group, Inc. (“Beasley”) for a purchase price of $24 million in cash. The Company used cash on hand to fund the acquisition. On October 17, 2016, the Company entered into an asset purchase agreement and a TBA with Beasley to operate three of the four radio stations that were held in the Charlotte Trust. On November 1, 2016, the Company commenced operations of the radio stations held in the Charlotte Trust and began operating the fourth station upon closing on the acquisition with Beasley in January 2017.During the period of the TBA, the Company included net revenues, station operating expenses and monthly TBA fees associated with operating these stations in the Company’s consolidated financial statements.The allocations presented in the table below are based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches. In estimating the fair value of the acquired FCC broadcasting licenses, the fair value estimates are based on, but not limited to, expected future revenue and cash flows that assume an expected future growth rate of 1.0% and an estimated discount rate of 9.0%. The gross profit margins utilized were considered appropriate based on management’s expectations and experience in equivalent sized markets. The Company determines the fair value of the broadcasting licenses by relying on a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcasting licenses. The Company’s fair value analysis contains assumptions based upon past experience, reflects expectations of industry observers and includes judgments about future performance using industry normalized information for an average station within a certain market. Any excess of the purchase price over the net assets acquired was reported as goodwill.The following preliminary purchase price allocations are based upon the valuation of assets and liabilities and these estimates and assumptions are subject to change as the Company obtains additional information during the measurement period, which may be up to one year from the acquisition date. These assets and liabilities pending finalization include intangible assets and liabilities. Differences between the preliminary and final valuation could be substantially different from the initial estimates. January 6, Useful Lives In Years 2017 From To (amounts in
thousands) $ 2,539 non-depreciating 217 15 25 4,569 3 40 7,325 287 life of underlying asset 17,384 non-amortizing 24,996 735 over remaining lease life 261 life of underlying liability 996 $ 24,000 2016 DispositionIn March 2016, the Company sold certain assets of KRWZ AM in Denver, Colorado, for $3.8 million in cash. The Company believes that the sale of this station, with a marginal market share, did not alter the Company’s competitive position in the market. The Company reported a gain, net of expenses, of $0.3 million on the disposition of these assets.Pending Acquisition of CBS RadioOn February 2, 2017, the Company and Merger Sub entered into a material definitive agreement with CBS and CBS Radio, and CBS and CBS Radio also entered into an agreement that provides for the separation of CBS Radio from CBS (the “Separation Agreement”), which together provide for the combination of the Company’s business and CBS’s radio business. Prior to February 2, 2017, CBS transferred substantially all of the assets and liabilities of CBS’s radio business to CBS Radio.At the time of the signing of the CBS Radio Merger Agreement on February 2, 2017, CBS Radio had two classes of common stock, the Radio Series 1 Common Stock, par value $0.01 per share (the “Radio Series 1 Common Stock”) and the Radio Series 2 Common Stock, par value $0.01 per share (the “Radio Series 2 Common Stock”), collectively, (the “Radio Existing Common Stock”).Prior to the Merger, CBS and CBS Radio will first complete a series of internal distributions and transactions (collectively, the “Radio Reorganization”). Following the consummation of the Radio Reorganization, CBS will consummate an offer to exchange all ofdebt or the outstanding sharesstandby letters of Radio Existing Common Stock for outstanding sharescredit.AsSeptember 30, 2017,2020, the Company announced that it had entered into an exchange agreement with Urban One, pursuant to which the Company would exchange its four station cluster in Charlotte, North Carolina for one station in St. Louis, Missouri, one station in Washington, D.C., and one station in Philadelphia, Pennsylvania (the "Urban One Exchange"). The Company conducted an analysis and determined the assets met the criteria to be classified as held for sale at December 31, 2020. In aggregate, these assets had a carrying value of $21.4 million.sell a parceldispose of land along with theand land improvements broadcasting tower and building located onequipment. The Company conducted an analysis and determined the property, in one of its markets for $3.3 million andassets met the criteria to be classified these assets as assets held for sale. This transaction, which is expected to be completed inIn aggregate, these assets had a carrying value of approximately $0.5 million. In the fourth quarter of 2017, is expected to result in2021, the Company completed this sale. The Company recognized a gain of $0.3 million,on the sale, net of commissions and other expenses, of $0.2approximately $4.6 million.AsSeptember 30, 2017,2021, the Company entered into an agreement with a third party to divest three radio stations to EMFdispose of land, equipment and an FCC license in order to facilitate the Merger.connection with a sale of a station in San Francisco, California. The Company is disposing of equipment, radio broadcasting licenses, goodwill,conducted an analysis and otherdetermined the assets across three of its markets for $57.8 million andmet the criteria to be classified these assets as assets held for sale. This transaction, which is expected to closeIn aggregate, these assets had a carrying value of approximately $1.0 million. In the second quarter of 2022, the Company completed this sale. The Company recognized a loss on the date followingsale, net of commissions and other expenses, of approximately $0.5 million.closingsecond quarter of 2022, the Company’s MergerCompany entered into an agreement with CBS Radio, is expecteda third party to resultdispose of land, and equipment in Houston, Texas. The Company conducted an analysis and determined the assets met the criteria to be classified as held for sale. In aggregate, these assets had a carrying value of approximately $4.2 million. In the third quarter of 2022, the Company completed this sale. The Company recognized a gain on the sale, net of $2.6commissions and other expenses, of approximately $10.6 million.The Company determined that the carrying value of these assets was less than the fair value by utilizing offers from third parties for a bundle of assets. This is considered a Level 3 measurement.follows: Assets Held For Sale September 30, 2017 (amounts in thousands) $ 2,820 8 1,206 4,034 (822 ) 3,212 54,551 (33 ) 54,518 3 266 54,787 57,999 $ 57,999 11.follows as of the dates indicated:Assets Held for Sale September 30, 2022 December 31, 2021 (amounts in thousands) Net property and equipment 3,919 330 Radio broadcasting licenses 4,380 703 Net assets held for sale $ 8,299 $ 1,033 DividendsDuring the second quarter of 2016, the Company’s Board of Directors commenced an annual $0.30 per share common stock dividend program, with payments that approximate $2.9 million per quarter. Any future dividends will be at the discretion of the Board of Directors based upon the relevant factors at the time of such consideration, including, without limitation, compliance with the restrictions set forth in the Company’s Credit Facility and the CBS Radio Merger Agreement.In addition to the quarterly dividend, the Company paid a special one-time cash dividend of $0.20 per share of common stock on September 15, 2017. Pursuant to the Merger Agreement, the Company agreed not to declare or pay any dividends or make other distributions in respect of any shares of the Company’s capital stock, except for the Company’s regular quarterly cash dividend. This special one-time cash dividend, which approximated $7.8 million, is an exception under the Merger Agreement to the restriction on payment of dividends.The Company’s grants of RSUs include the right, upon vesting, to receive a cash payment equal to the aggregate amount of dividends, if any, that holders would have received on the shares of common stock underlying their RSUs if such RSUs had been vested during the period.RSUs: Dividend Equivalent Liabilities September 30,
2017 December 31,
2016 (amounts in thousands) Other current liabilities $ 446 $ 260 Other long-term liabilities 637 348 $ 1,083 $ 608 Dividend Equivalent Liabilities September 30,
2022December 31,
2021(amounts in thousands) Short-term Other current liabilities $ 235 $ 351 Long-term Other long-term liabilities 1 92 Total $ 236 $ 443 adoptedtemporarily suspended the Entercom 2016 Employee Stock Purchase Plan (the “ESPP”) during the second quarter of 2016 that commenced with the third quarter of 2016. The ESPP allows participants to purchase the Company’s stock at a price equal to 85% of the market value of such shares onfollowing the purchase date. The maximum number of shares authorized to be issued under the ESPP is 1.0 million. Pursuant to this plan,for the Company does not record compensation expense to the employee as income subject to tax on the difference between the market value and the purchase price, as this plan was designed to meet the requirements of Section 423(b) of the Internal Revenue Code. The Company recognizes the 15% discount in the Company’s consolidated statements of operations as non-cash compensation expense.Pursuant to the CBS Radio Merger Agreement, until the earlier of the termination of the CBS Radio Merger Agreement or the consummation of the Merger, the Company has agreed not to issue or authorize any shares of its capital stock. As a result, the Company effectively suspended the ESPP during the secondfirst quarter of 2017. There were no2020. The ESPP resumed on July 1, 2021. The following table presents the amount of shares purchased and the Company did not recognize any non-cash compensation expense recognized in connection with the ESPP duringas of the threeperiods indicated:Nine Months Ended
September 30,2022 2021 (amounts in thousands) Number of shares purchased 400 39 Non-cash compensation expense recognized $ 58 $ 21 2017. The2022, the Company plansdid not repurchase any shares under the 2017 Share Repurchase Program. As of September 30, 2022, $41.6 million is available for future share repurchases under the 2017 Share Repurchase Program.resumetime, the ESPP after"Rights Agreement"), which was previously approved by the consummationBoard of Directors of the Merger. Nine Months Ended
September 30, 2017 2016 (amounts in thousands) 15 18 $ 32 $ 34 12.Company. The Rights Agreement expired on April 20, 2021.If the CBS Radio Merger Agreement is terminated under certain circumstances, the Company will be required to pay CBS a termination fee of $30 million and the costs for the committed financing.February 28, 2017.Other MattersDuring the third quarterMarch 1, 2022.2017,2022, and through the date that these condensed consolidated financial statements were issued, were evaluated to ensure that any subsequent events that met the criteria for recognition have been included and are as follows:October 10, 2017,November 2, 2022, the Company filed an amendment to a Registration Statement with the SEC on Form S-4/A relating to the Merger. The amendment provides that, among other things, the Company will dispose of an appropriate amount of stations in order to maintain compliance with the FCC’s local radio ownership rule. Refer to a description of the proposed divestitures below.On October 13, 2017, the Company closed oncompleted the sale of a parcel of land along with the land improvements, broadcasting tower and building located on the property. The sale of theseequipment in Las Vegas, Nevada for $40.0 million. These assets which were classifiedreflected as assets held for sale at September 30, 2017, resulted in2022. The Company is expected to recognize a gain of $0.3 million,on the sale, net of commissions and other expenses, of $0.2approximately $35.3 million.On October 16, 2017, the Company filed an amendment to a Registration Statement with the SEC on Form S-4/A relating to the Merger. The amendment is an exhibits only filing to file various exhibits without making any changes to the prospectus. The Company filed a definitive proxy statement that relates to the special meeting
NET REVENUES OPERATING EXPENSE: Station operating expenses Depreciation and amortization expense Corporate general and administrative expenses Impairment loss Merger and acquisition costs Other operating (income) expenses Total operating expense OPERATING INCOME (LOSS) NET INTEREST EXPENSE OTHER (INCOME) EXPENSE INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) INCOME TAXES (BENEFIT) NET INCOME (LOSS) AVAILABLE TO THE COMPANY Preferred stock dividend NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS 2021 includes a $0.8 million write down of property and equipment and $0.5 million related to an early termination of certain leases. full period; variable sales-related expenses. 2022 relative to 2021. rebranding costs in connection with our corporate name change in 2021, which is nonrecurring in nature. 2022 NET REVENUES OPERATING EXPENSE: Station operating expenses Depreciation and amortization expense Corporate general and administrative expenses Merger and acquisition costs and restructuring charges Other operating (income) expenses Total operating expense OPERATING INCOME (LOSS) NET INTEREST EXPENSE OTHER (INCOME) EXPENSE INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) INCOME TAXES (BENEFIT) NET INCOME (LOSS) AVAILABLE TO THE COMPANY Preferred stock dividend NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS full period. Net revenues decreased the most for our stations located in the the current year and an increase in digital expenses related to user acquisition, content licenses and podcast host and talent fees; 2021, respectively. Expens capital expenditures in 2022 relative to 2021. performance-based compensation expense upon reassessment. the outstanding fixed-rate and variable-rate indebtedness upon which interest is computed coupled with an increase in variable interest rates. Tax Benefit Term B-2 Loan. As of September 30, guarantor subsidiaries. We made our first Excess Cash Flow payment in the first quarter of 2020. highly uncertain. nine months ended September 30, 2022. Net cash flows provided by operating activities were 2029 Notes. the remainder of the year. March 1, 2022, other than as described below. September 30, 2022. materially different from actual results.February 28, 2017.March 1, 2022. In addition, you should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this report. The following results of operations include a discussion of the nine and three months ended September 30, 20172022 as compared to the comparable periods in the prior year. Our results of operations during the relevant periods represent the operations of the radio stations owned or operated by us.Ofof Operations For Thefor the Year-To-Date2017,2022, as compared to the nine months ended September 30, 2016:Merger And Acquisition Costs Incurred Under2021:CBS Radio Merger AgreementOn February 2, 2017, wepandemic has had, and our newly formed wholly owned subsidiary (“Merger Sub”) entered into an Agreement and Plan of Merger (the “CBS Radio Merger Agreement”) with CBS Corporation (“CBS”)may continue to have, a material impact on the Company and its wholly owned subsidiary CBS Radio Inc. (“CBS Radio”). Pursuantrecovery. While the full impact of this pandemic is not yet known, we have taken proactive actions in an effort to mitigate its effects and are continually assessing its effects on our business, including how it has and will continue to impact advertisers, professional sports and live events.CBS Radio Merger Agreement, Merger Sub will merge withpandemic. During the second quarter of 2020, we experienced significant declines in revenue performance. April revenues were most significantly impacted and into CBS Radio with CBS Radio surviving aswe began to experience sequential month over month improvement in our wholly owned subsidiary (the “Merger”). The Merger is expectedrevenue performance in May through December of 2020.be tax free to CBS and its shareholders, and will be effected through a stock for stock Reverse Morris Trust transaction. The Merger will make us a leading local media and entertainment company with a nationwide footprint of stations including positions in allthe seasonality of the top 10 markets and 22 ofbusiness, the top 25 markets. The transactions contemplated by the CBS Radio Merger Agreement are subject to approval by our shareholders and customary regulatory approvals. Such approvals will require the divestiture of stationsmonth over month improvement in certain markets due to regulatory requirements.Transaction costs relating to the Merger, including legal, advisory services and professional fees, of $24.9 million, were expensed as incurred during the first three quarters of 2017 and are included in merger and acquisition costs.Disposal Of FCC Broadcasting License Related To The MergerWe recorded a $13.5 million loss innet revenues did not continue into the first quarter of 20172021. However, net revenues in each month from March 2021 to December 2021 exceeded net revenues in each month from March 2020 to December 2020. Again, due to the seasonality of the business, the month over month improvement in net gain/loss on sale or disposalrevenues did not continue into the first quarter of assets as a result2022. However, net revenues in each month from January 2022 to June 2022 exceeded net revenues in each month from January 2021 to June 2021. While we experienced sequential growth in net revenues month-over-month through June 2022, the pace of permanently discontinuing the operation of one of our stations and returning the station’s licensesuch growth began to slow down in June 2022. Due to the FCC for cancellation,current macroeconomic conditions, the month-over-month improvement in ordernet revenues did not continue into the third quarter of 2022. However, sequential month-over-month revenues increased in the third quarter of 2022, with September 2022 representing the highest monthly revenues recorded in 2022 thus far.facilitatepredict the Merger.Debt Refinancing Lowered Our Interest ExpenseOn November 1, 2016, we entered into a $540 million credit facility (the “Credit Facility”) and used the proceeds to: (1) refinance our outstanding senior credit facility (the “Former Credit Facility”) that was comprised of: (a) a term loan component (“Former Term B Loan”) with $223.0 million outstanding at the dateextent of the refinancing;impact that the current macroeconomic conditions will have on our financial condition, results of operations and (b)cash flows in future periods due to numerous uncertainties, but we believe the impact could be material if conditions persist.“Former Revolver”"Revolver") with $3.0 million outstanding at. Based upon the datetiming of the refinancing; (2) fundWideOrbit Streaming Acquisition, our condensed consolidated financial statements for the redemptionnine months ended September 30, 2022, reflect the results of AmperWave. Our condensed consolidated financial statements for the $220.0 million 10.5% Senior Notes due December 1, 2019 (the “Senior Notes”) and dischargenine months ended September 30, 2021 do not reflect the Indenture governing the Senior Notes; (3) fund $11.6 millionresults of accrued interest and a call premium of $5.8 million on the Senior Notes; and (4) pay transaction costs associated with the refinancing. This refinancing lowered our interest expense in the first three quarters of 2017.Charlotte AcquisitionOn January 6, 2017,AmperWave.Beasley Broadcast Group,Urban One, Inc. (“Beasley”("Urban One") to acquireunder which we exchanged our four radio stationsstation cluster in Charlotte, North Carolina for a purchase priceone station in St. Louis, Missouri, one station in Washington, D.C., and one station in Philadelphia, Pennsylvania (the "Urban One Exchange"). We began programming the respective stations under local marketing agreements ("LMAs") on November 23, 2020. Based on the timing of $24this transaction, our condensed consolidated financial statements for the nine months ended September 30, 2022: (i) reflect the results of the acquired stations; and (ii) do not reflect the results of the divested stations. Our condensed consolidated financial statements for the nine months ended September 30, 2021: (i) reflect the results of the acquired stations for the entire period in which the LMAs were in effect; and (ii) do not reflect the results of the divested stations.“Beasley Acquisition”"Podcorn Acquisition"). Based on the timing of this transaction, our condensed consolidated financial statements for the nine months ended September 30, 2022, reflect the results of Podcorn. Our condensed consolidated financial statements for the nine months ended September 30, 2021, reflect the results of Podcorn for the portion of the period after the completion of the Podcorn Acquisition.fundpay fees and expenses in connection with the acquisition.redemption.commenced operations under a time brokerage agreement (“TBA”) for threealso incurred $0.5 million of costs which were classified within refinancing expenses.stations on November 1, 2016 andSenior Notes during the fourth station upon acquisition on January 6, 2017, that increased in 2017 our net revenues, station operating expenses and depreciation and amortization expenses.Goodwill ImpairmentOur annual goodwill impairment test indicated that the goodwill allocated to our Boston, Massachusetts market was impaired. As a result,first quarter of 2021, we wrote off the following amounts to gain/loss on extinguishment of debt: (i) $14.5 million in prepayment premiums for the early retirement of the Senior Notes; (ii) $8.7 million of unamortized premium attributable to the Senior Notes; (iii) $1.0 million of unamortized debt issuance costs attributable to the Senior Notes; and (iv) $1.3 million of unamortized debt issuance costs attributable to the Term B-2 Loan.goodwillour 2027 Notes through open market purchases. This repurchase activity generated a gain on retirement of the 2027 Notes in the amount of $0.6 million.second quarter of 2017.Nine Months Endednine months ended September 30, 2017 As Compared To2022 includes: (i) $159.1 million related to an interim impairment assessment of our FCC broadcasting licenses; (ii) $18.1 million related to an interim impairment assessment of our goodwill at the QLGG reporting unit; and (iii) $3.2 million related to an early termination of leases in several markets. The Nine Months Endedimpairment loss incurred during the nine months ended September 30, 2016 NINE MONTHS ENDED
SEPTEMBER 30, 2017 2016 % Change (dollars in millions) $ 346.3 $ 340.2 2 % 256.0 240.4 6 % 8.1 7.5 8 % 28.8 24.9 16 % 0.4 0.1 300 % 24.9 0.7 nmf 13.2 (1.4 ) nmf 331.4 272.2 22 % 14.9 68.0 (78 %) 18.6 27.6 (33 %) — (2.3 ) 100 % (3.7 ) 42.7 (109 %) (4.9 ) 16.1 (130 %) 1.2 26.6 (95 %) (1.8 ) (1.3 ) 38 % $ (0.6 ) $ 25.3 (102 %) RevenuesContributing(Gain) Loss on Sale or Disposalincreasesale of real property and identification and acquisition of replacement property. Total proceeds from the sale resulted in net revenues wasa gain of approximately $2.5 million. During the operationnine months ended September 30, 2022, we finalized: (i) the sale of four stationsassets in San Francisco, California, which had previously been classified within assets held for sale and recognized a loss of approximately $0.5 million; and (ii) the Charlotte market duringsale of assets in Houston, Texas which has previously been classified within assets held for sale and recognized a gain of approximately $10.6 million. Additionally, we also recognized a gain of $0.6 million in connection with the current period whichbond repurchase activity discussed above. During the nine months ended September 30, 2021, we recognized: (i) a gain of $4.0 million from the Urban One Exchange; and (ii) a gain of $0.8 million from the liquidation of one of our investments. These gains were not operatedpartially offset by us duringa $1.1 million loss on disposal of property, plant and equipment.Nine Months Ended September 30, 2022 As Compared To The Nine Months Ended September 30, 2021 NINE MONTHS ENDED SEPTEMBER 30, 2022 2021 % Change (dollars in millions) NET REVENUES $ 911.7 $ 874.7 4 % OPERATING EXPENSE: Station operating expenses 746.9 718.9 4 % Depreciation and amortization expense 47.5 38.7 23 % Corporate general and administrative expenses 72.8 71.5 2 % Restructuring charges 6.1 4.2 45 % Impairment loss 180.1 1.3 13,754 % Net gain on sale or disposal (13.2) (3.7) 257 % Refinancing expenses — 0.5 (100) % Change in fair value of contingent consideration (8.8) — 100 % Other expenses 0.4 0.6 (33) % Total operating expense 1,031.8 832.0 24 % OPERATING INCOME (LOSS) (120.1) 42.7 (381) % INTEREST EXPENSE 76.1 66.5 14 % Net loss on extinguishment of debt — 8.2 (100) % Other income (0.2) (0.5) (60) % OTHER INCOME (EXPENSE) (0.2) 7.7 -100 LOSS BEFORE INCOME TAX BENEFIT (196.0) (31.5) 522 % INCOME TAX BENEFIT (43.2) (6.5) 565 % NET LOSS $ (152.8) $ (25.0) 511 % period. Offsetting this increase, netyear. Prior year revenues were negatively impacted from the economic slowdown triggered by several factors including the reductionCOVID-19 pandemic. In the current year, we continued to report sequential growth in political advertisingnet revenues month-over-month through June 2022. Due to current macroeconomic conditions, this trend did not continue and the return of a broadcasting license to the FCCrevenues declined in the first quarterthird quarter.2017 to facilitateAmperWave for the Merger.AtlantaChicago and MiamiPhiladelphia markets. Net revenues decreased the most for our stations located in the Denver marketLos Angeles and several of our other largerSacramento markets.in the mid-single digits for the current periodcompared to prior year primarily due toto: (i) an increase in costs associated with operating additional stations acquiredpayroll and related expenses in Charlotte, North Carolina,the current year; (ii) an increase in digital expenses related to user acquisition, content licenses and fees associated with new broadcast rights forpodcast host and talent fees; and (iii) an increase in 2022 revenues which resulted in a major league baseball teamcorresponding increase in one of our markets.$0.9$3.0 million and $1.0$3.1 million for the nine months ended September 30, 20172022 and September 30, 2016,2021, respectively.Andand Amortization Expenseas a resultdue to an increase in amortization of intangible assets in 2022 relative to 2021. The increase in amortization is due to the addition of amortizable intangible assets in the WideOrbit Streaming Acquisition and the Podcorn Acquisition. Additionally, depreciation and amortization associated with the stations acquired in Charlotte, North Carolina, andexpense increased due to an increase in capital expenditures primarily associated with the relocation, consolidation and improvement of studio facilities in several of our larger markets.Andand Administrative Expensesdue to the increase in costs associated with: (1) certain contractual obligations of $1.3 million to a senior executive as a result of the non-renewal of his employment agreement; (2) an increase in payroll expense of $1.2 million as a result of hiring additional employees and expanding the work-force in advance of the Merger; (3) an increase in deferred compensation expense of $0.7 million as our deferred compensation liability generally tracks the movementsrelated expenses in the stock market; and (4) ancurrent year. This increase was partially offset by a decrease in corporate marketing capabilities and staff.$3.7$4.0 million and $6.7 million for the nine months ended September 30, 20172022 and September 30, 2016.Merger2021, respectively.acquisition costsMerger and acquisition costs increased due to transaction costs relating2021 primarily in response to the Merger.COVID-19 pandemic and the current macroeconomic conditions. These costs primarily consist of legal, professional, and other advisory services.Other operating (income) expensesOther operating expenses increased primarilyincluded workforce reduction charges.incurringan interim impairment assessment on our FCC broadcasting licenses; (ii) an $18.1 million impairment charge as a $13.5result of an interim impairment assessment on our Goodwill; and (iii) a $3.2 million charge related to an early termination of certain leases. The impairment loss incurred during the nine months ended September 30, 2021 includes a $0.8 million write down of property and equipment and $0.5 million related to an early termination of certain leases.permanently discontinuing the operationUrban One Exchange; and (ii) a gain of approximately $0.8 million from the liquidation of one of our stationsinvestments. These gains were partially offset by a $1.1 million loss on disposal of property, plant and returning the station’s license to the FCC for cancellation, in order to facilitate the Merger.Operating Income (Loss)Operating income in the current period decreased primarily due to: (1) an increase in merger and acquisitionequipment. of $24.9 million in connection with the Merger; (2)issuance of the recognition2029 Notes during 2021.$13.5contingent consideration liability during the first quarter of 2021, which is subject to fair value remeasurements. Due to fluctuation in the market-based inputs used to develop the discount rate, the discount rate has increased during the nine months ended September 30, 2022. Additionally, a reduction in projected Adjusted EBITDA values resulted in a lower expected present value of the contingent consideration. As a result, the fair value of the contingent consideration decreased $8.8 million loss from permanently discontinuingduring the operation of one of our stations and returningnine months ended September 30, 2022.station’s licensenine months ended September 30, 2022, we incurred an additional $9.6 million in interest expense as compared to the FCC for cancellation,nine months ended September 30, 2021.orderinterest expense was primarily attributable to facilitate the Merger; (3) an increase in station operating expenses for the reasons described above;outstanding fixed-rate indebtedness and (4)variable-rate indebtedness upon which interest is computed coupled with an increase in corporate, general and administrative expensesvariable interest rates. reasons described above.Interest ExpenseInterest expense declined primarily as a result of the refinancing on November 1, 2016, that included the retirement of our Senior Notes using lower cost bank debt.Income (Loss) Before Income Taxes (Benefit)The generation of a loss before income taxes was largely attributable to the transaction costs incurred in connection with the Merger and the loss generated as a result of incurring a $13.5 million loss from permanently discontinuing the operation of one of our stations and returning the station’s license to the FCC for cancellation, in order to facilitate the Merger.Income Taxes (Benefit)Tax Rate For The Nine Months Ended September 30, 2017 estimated annual effective income tax rate was 131.7%determined using a forecasted tax rate based upon projected taxable income for the year. The effective income tax rate for the period was impacted by permanent items, state tax expense, discrete income tax expense items related to stock based compensation, a valuation allowance for certain state net operating losses, adjustments related to amended federal income tax returns for 2018 and 2019, and interest and penalties associated with uncertain tax positions. The estimated annual effective income tax rate asThree Months Ended September 30, 2022 As Compared To The Three Months Ended September 30, 2021 THREE MONTHS ENDED SEPTEMBER 30, 2022 2021 % Change (dollars in millions) NET REVENUES $ 316.9 $ 329.4 (4) % OPERATING EXPENSE: Station operating expenses 260.0 260.9 — % Depreciation and amortization expense 18.3 12.5 46 % Corporate general and administrative expenses 21.2 24.2 (12) % Restructuring charges 4.2 2.3 83 % Impairment loss 176.8 — 100 % Net gain on sale or disposal (10.7) — 100 % Change in fair value of contingent consideration (1.1) — 100 % Other expenses 0.1 0.2 (50) % Total operating expense 468.8 300.1 56 % OPERATING INCOME (LOSS) (151.9) 29.3 (618) % INTEREST EXPENSE 28.1 22.8 23 % OTHER INCOME — — — % INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) (180.0) 6.5 (2,869) % INCOME TAX (BENEFIT) EXPENSE (39.0) 11.2 (448) % NET LOSS $ (141.0) $ (4.7) 2,900 % the expected tax rate of 40% was primarily impacted by significant, non-deductible merger and acquisition costs related to the Merger. The estimated annual effective tax rate is estimated to be higher than in previous yearsprior year primarily due to theamount of merger and acquisition costs forecasted for 2017 as a result of current macroeconomic conditions. In the Merger, as a significant amount of these costs are not deductible for federal and state income tax purposes. We estimate that our 2017 estimated annual effective tax rate before discrete items, which may fluctuate from quarter to quarter, will be 96.5%.As a result of adopting the amended accounting guidance for stock-based compensation on January 1, 2017,current year, we recorded a discrete windfall income tax benefit of a $0.8 million for the nine months ended September 30, 2017, from the vesting of stock-based awards with tax deductions in excess of the compensation expense recorded.Tax Rate For The Nine Months Ended September 30, 2016The effective income tax rate was 37.6%, which was impacted by discrete income tax benefits from recent legislation in certain single member states that allowed for: (1) the reversal of partial valuation allowances; and (2) a retroactive decrease in deferred tax liabilities associated with our non-amortizable broadcast licenses and goodwill assets. The impact of discrete items to the income tax rate is typically substantially greater in the first quarter of the year as income before income taxes is the lowest as compared to subsequent quarters.Net Deferred Tax LiabilitiesAs of September 30, 2017, and December 31, 2016, our net deferred tax liabilities were $82.7 million and $92.9 million, respectively. The deferred tax liabilities primarily relate to differences between the book and tax bases of our broadcasting licenses and goodwill. As a result of adopting the amended accounting guidance for stock-based compensation further described in Note 1, Basis of Presentation and Significant Policies, we recorded a $4.6 million adjustment to equity on January 1, 2017. The corresponding debit was to deferred tax assets, effectively reducing the net deferred tax liabilities by the same amount.Net Income (Loss) Available To The CompanyThe decrease in net income available to the Company was primarily attributable to the reasons described above under Income (Loss) Before Income Taxes (Benefit), net of income tax expense.Results Of Operations For The QuarterThe following significant factors affected our results of operations for the three months ended September 30, 2017 as compared to the same period in the prior year:Merger And Acquisition Costs Incurred Under The CBS Radio Merger AgreementTransaction costs relating to the Merger, including legal, advisory services and professional fees of $8.8 million, were expensed as incurred during the three months ended September 30, 2017 and are included in merger and acquisition costs. During the third quarter of 2016, we recorded merger and acquisition costs of $0.7 million.Debt Refinancing Lowered Our Interest ExpenseAs a result of our debt refinancing completed in the fourth quarter of 2016, we lowered our interest expense for the third quarter of 2017.Charlotte AcquisitionOn January 6, 2017, we completed the Beasley Acquisition to acquire four radio stations in Charlotte, North Carolina. We commenced operation of three stations under a TBA on November 1, 2016 and a fourth station upon acquisition on January 6, 2017, which in 2017 increased our net revenues, station operating expenses, and depreciation and amortization expense.Three Months Ended September 30, 2017 As Compared To The Three Months Ended September 30, 2016 THREE MONTHS ENDED
SEPTEMBER 30, 2017 2016 %
Change (dollars in millions) $ 122.3 $ 121.7 0 % 87.9 84.1 5 % 2.9 2.5 16 % 9.3 8.8 6 % 8.8 0.7 nmf (0.1 ) (0.1 ) 0 % 108.8 96.0 13 % 13.5 25.7 (47 %) 6.5 9.0 (28 %) — (2.3 ) 100 % 7.0 19.0 (63 %) 2.9 7.6 (62 %) 4.1 11.4 (64 %) (0.7 ) (0.5 ) 40 % $ 3.4 $ 10.9 (69 %) Net RevenuesContributing to the increasereported sequential growth in net revenues was the operation of four stationsmonth-over-month. This trend may not continue in the Charlotte market during the quarter which were not operated by us during the same period in the prior year. Offsetting this increase, net revenues was negatively impacted by several factors including the reduction in political advertising and the return of a broadcasting licensefuture periods due to the FCCcurrent macroeconomic conditions.first quarteroperations of 2017 to facilitateAmperWave for the Merger.AtlantaChicago and GreensboroNorfolk markets.Denver marketLos Angeles and several of our other largerNew York City markets.increased in the mid-single digitsdecreased compared to prior year primarily due to a decrease in 2022 revenues which resulted in a corresponding decrease in variable sales-related expenses. These reductions were partially offset by an increase in costs associated with operating additional stations acquiredpayroll and related expenses in Charlotte, North Carolina.$0.4$0.8 million and $0.9 million for the three months ended September 30, 20172022 and September 30, 2016.Andand Amortization Expenseas a resultdue to an increase in amortization of intangible assets in 2022 relative to 2021. The increase in amortization is due to the addition of amortizable intangible assets in the WideOrbit Streaming Acquisition and the Podcorn Acquisition. Additionally, depreciation and amortization associated with the stations acquiredexpense increased due to an increase in Charlotte, North Carolina.Andand Administrative Expensesincreaseddecreased primarily due to the increase in costs associated with: (1) an increase in corporate marketing capabilities and staff; and (2) an increase in payroll expense of $0.5 million as a result of hiring additional employees and expandinga decrease in non-cash compensation expense. This reduction was attributable to the work-force in advancereversal of the Merger.$1.2$0.1 million and $1.3$3.5 million for the three months ended September 30, 20172022 and September 30, 2016,2021, respectively.Operating Income (Loss)Operating income decreaseddue to: (1) an increase in mergerresponse to the COVID-19 pandemic and acquisitionthe current macroeconomic conditions. These costs of $8.8primarily included workforce reduction charges and were expensed as incurred.in connection with the Merger; (2) an increase in station operating expenses for the reasons described above; and (3) an increase in corporate, general, and administrative expenses for the reasons described above.Interest ExpenseInterest expense declined primarilyimpairment charge as a result of an interim impairment assessment on our FCC broadcasting licenses; and (ii) a $18.1 million impairment charge as a result of an interim impairment assessment on our goodwill.refinancingthree months ended September 30, 2022, we recognized a gain of approximately $10.6 million on November 1, 2016, that included the retirementsale of our Senior Notes using lower cost bank debt.Income (Loss) Before Income Taxes (Benefit)The decreaseassets in Houston, Texas.income before income taxesmarket-based inputs used to develop the discount rate, the discount rate has increased during the three months ended September 30, 2022. Additionally, a reduction in projected Adjusted EBITDA values resulted in a lower expected present value of the contingent consideration. As a result, the fair value of the contingent consideration decreased $1.1 million during the three months ended September 30, 2022.the transaction costs incurred in connection with the Merger and thean increase in station operating expenses described above.Taxes (Benefit)2017,2022, the effective income tax rate was 41.5%21.7%. The effective income tax rate for the quarter was impacted by permanent items, state tax expense, discrete income tax expense items related to stock based compensation, a valuation allowance for certain state net operating losses, and interest and penalties associated with uncertain tax positions.effective tax rateCOVID-19 pandemic and current macroeconomic conditions have created, and may continue to create, significant uncertainty in operations, including disrupted supply chains, rising inflation and interest rates, and significant volatility in financial markets, which have had, and are expected to continue to have a material impact on our business operations, financial position, cash flows, liquidity, and capital resources and results of operations. We anticipate that our business will continue to generate sufficient cash flow from operating activities and that these cash flows, together with our existing cash and cash equivalents and our ability to draw on current credit facilities, will be sufficient for us to meet our current liquidity, capital requirements and meet our covenant requirements for at least the next twelve months. However, our ability to maintain adequate liquidity is dependent upon a number of factors, including our revenue, macroeconomic conditions, the length and severity of business disruptions, our ability to contain costs and to collect accounts receivable, and various other factors, many of which are beyond our control. Moreover, if current macroeconomic conditions continue to create higher inflation and interest rates and significant disruptions in the credit or financial markets, or impact our credit ratings, it could adversely affect our ability to access capital on attractive terms, if at all. We also expect the timing of certain priorities to be impacted, such as the pace of our debt reduction efforts and the delay of certain capital projects.quarter,benefit of the covenant calculation, as compared topermitted under the estimated annual effective tax rate of 96.5% was primarily impacted by significant, non-deductible merger and acquisition costscredit agreement related to both our Credit Facility and Accounts Receivable Facility. We are unable to predict with certainty the Merger.Forimpact of the three months endedCOVID-19 pandemic and current macroeconomic conditions on our ability to maintain compliance with the debt covenants contained in the credit agreement related to both our Credit Facility and Accounts Receivable Facility. While we were in compliance with such financial covenants through September 30, 2016,2022, failure to meet the effective income tax rate was 39.8%,covenant requirement in the future would cause us to be in default and the maturity of the related debt could be accelerated and become immediately payable. This may require us to obtain waivers or amendments in order to maintain compliance and there can be no certainty that any such waiver or amendment would be available, or what the cost of such waiver or amendment, if obtained, would be. If we are unable to obtain necessary waivers or amendments and the debt is accelerated, we would be required to obtain replacement financing at prevailing market rates, which primarily reflects adjustments for expensesmay not be favorable to us. There is no guarantee that we would be able to satisfy our obligations if any of our indebtedness is accelerated. This could adversely affect our ability to meet our long-term liquidity and capital requirements.deductible for tax purposesbe available on favorable terms or at all, could have a material adverse impact on our business.an increase in net deferred tax liabilities associated with non-amortizable assets such as broadcasting licenses and goodwill.Net Income (Loss) Available To The CompanyThe decrease was primarily attributable to the reasons described above under Income (Loss) Before Income Taxes (Benefit), net of income tax expense.Liquidity And Capital ResourcesLiquidity2017,2022, we had $480.5$632.4 million outstanding under our Credit Facility, which includes a term B loan of $458.0 million (the “Term B Loan”)the Term B-2 Loan and $22.5$165.0 million outstanding under a revolving credit facility (the “Revolver”).the Revolver. In addition, we had $0.7$6.0 million in outstanding letters of creditcredit. During the nine months ended September 30, 2022, we repaid $22.7 million outstanding under our Revolver and $36.8borrowed an additional $90.0 million undrawn under our Revolver.Revolver. Our ability to draw additional amounts undernine months ended September 30, 2022, we repurchased $10.0 million of our 2027 Notes through open market purchases. This repurchase activity generated a gain on retirement of the Revolver may be limited due to our Consolidated Leverage Ratio. 2027 Notes in the amount of $0.6 million.2017, we had $5.42022, total liquidity was $115.4 million, which was comprised of $79.0 million available under the Revolver and $36.4 million in cash, cash equivalents and cash equivalents.restricted cash. For the nine months ended September 30, 2017,2022, we increased our outstanding debt by $0.5 million.The RefinancingThe$60.3 million due to the previously discussed revolver pay down and borrowing activity and the bond repurchase activity against the 2027 Notes.On which place restrictions on the amount of cash, cash equivalents and restricted cash that can be subtracted in determining consolidated first lien net debt.1, 2016,2017 (the "Merger"), we assumed CBS Radio Inc.'s (now Audacy Capital Corp.’s) indebtedness outstanding under: (i) a credit agreement (the “Credit Facility”) among CBS Radio Inc. (now Audacy Capital Corp.), the guarantors named therein, the lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent; and (ii) the Senior Notes (described below).wholly ownedfinance subsidiary, Entercom Radio, LLC, entered intoAudacy Capital Corp., issued $425.0 million in aggregate principal amount of senior secured second-lien notes due May 1, 2027 (the "Initial 2027 Notes"). Interest on the Initial 2027 Notes accrues at the rate of 6.500% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year. The Initial 2027 Notes are governed by an indenture dated as of April 30, 2019 (the "Base Indenture"), as supplemented by a $540first supplemental indenture dated December 13, 2019 (the "First Supplemental Indenture), (collectively, the "Indenture").withand/or the 2029 Notes. Any event of default, therefore, could have a syndicatematerial adverse effect on our business and financial condition.lendersRegulation S-X promulgated by the SEC is not applicable and usedno separate financial statements are required for the proceeds to: (1) refinance our Former Credit Facility that was comprised of: (a) a Former Term B Loan with $223.0 million outstanding at the date of the refinancing; and(b) a Former Revolver with $3.0 million outstanding at the date of the refinancing; (2) fund the redemption, effective December 1, 2016, of $220.0 million Senior Notes and discharge the indenture (the “Indenture”) governing the Senior Notes; (3) fund $11.6 million of accrued interest and a call premium of $5.8 million on the Senior Notes; and (4) pay transaction costs associated with the refinancing. is comprised of the Revolver and the Term B Loan.The $60 million Revolver has a maturity date of November 1, 2021. The undrawn amount of the Revolver was $36.8 million as of September 30, 2017. The amount of the Revolver available to us is a function of covenant compliance at the time of borrowing.The $480 million Term B Loan has a maturity date of November 1, 2023.BB-2 Loan requires mandatory prepayments equal to a percentage of Excess Cash Flow, as defined within the agreement, subject to incremental step-downs, depending on the Consolidated Net Secured Leverage Ratio. Beginning in 2018, theThe Excess Cash Flow payment will be due in the first quarter of each year, and is based on the Excess Cash Flow and the Consolidated Net Secured Leverage Ratio for the prior year.2017,2022, we were in compliance with allthe financial covenantscovenant then applicable and all other terms of the Credit Facility in all material respects. Our ability to maintain compliance with our covenantsfinancial covenant under the Credit Facility is highly dependent on our results of operations.As Currently, given the impact of September 30, 2017, our Consolidated Leverage Ratio was 4.9 times versus a covenant of 5.0 timesCOVID-19 and our Consolidated Interest Coverage Ratio was 3.8 times versus a covenant of 2.0 times.The increase incurrent macroeconomic conditions, the Consolidated Leverage Ratio from 3.7 times as of December 31, 2016 to 4.9 times as of September 30, 2017 was primarily attributable to the following: (1) merger and acquisition costs of $24.9 million, of which approximately $10.0 million was not permitted to be added back under the Credit Facility; and (2) a marginal increase in outstanding debt primarily due to cash required for: (a) the merger and acquisition costs of $24.9 million; (b) the purchase of radio stations in Charlotte, North Carolina for $24 million in cash, which limited our ability to pay down debt; (c) an investment of $9.7 million in a synergistic podcast partnership; (d) a significant increase of $7.7 million in property and equipment primarily associated with the consolidation and relocation of several large-market studio facilities; and (e) a $3.9 million increase in corporate general and administrative expenses connected to an expansion of our work-force and marketing capabilities in anticipation of the Merger and $1.3 million in contractual obligations related to the non-renewal of a senior executive’s employment agreement.Management believes that over the next 12 months we can continue to maintain compliance. Our operating cash flow remains positive, and we believe that cash on hand, cash from the Revolver, cash from the expected sale of three radio stations thatoutlook is expected to close in the fourth quarter of 2017 and cash from operating activities, together with the proceeds of the committed financing related to the Merger, will be sufficient to permit us to meet our liquidity requirements over the next 12 months, including our debt repayments.covenantscovenant or other terms of our Credit Facility and any subsequent failure to negotiate and obtain any required relief from our lenders could result in a default under the Credit Facility. We will continue to monitor our liquidity position and covenant obligations and assess the impact of the COVID-19 pandemic and current macroeconomic conditions on our ability to comply with the covenants under the Credit Facility. The acceleration of our debt could have a material adverse effect on our business. We may seek from time to time to amend our Credit Facility or obtain other funding or additional funding, which may result in higher interest rates on our debt.In connection However, we may not be able to do so on terms that are acceptable or to the extent necessary to avoid a default, depending upon conditions in the credit markets, the length and depth of the market reaction to the COVID-19 pandemic and current macroeconomic conditions our ability to compete in this environment.CBS Radio Merger Agreement as described in Note 1, Basis of Presentation and Significant Policies, CBS Radio entered into a commitment letter with a syndicate of lenders (the “Commitment Parties”), pursuant to which the Commitment Parties committed to provide up to $500 million of senior secured term loans (the “CBS Radio Financing”) as an additional tranche under a credit agreement (the “CBS Radio Credit Agreement”) among CBS Radio, the guarantors named therein,party thereto, the lenders named therein,party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. Amendment No. 5, among other things:of this additional tranchethereof, to the Investors in exchange for cash investments.(1) refinance our(i) satisfy the obligations of Audacy Receivables under the Receivables Facility; or (ii) purchase additional accounts receivable from the Originators; or (y) may be distributed to Audacy NY, the sole member of Audacy Receivables. Audacy Operations acts as the servicer under the Agreements.describedwell as fund working capital needs and other approved uses.Note 4, Long-Term Debt; (2)Accounts receivable and Long-term debt, respectively, on the Consolidated Balance Sheets.Perpetual Cumulative Convertible Preferred Stock;$400.0 million aggregate principal amount of 7.250% senior notes due 2024 (the "Senior Notes") and (3)to pay fees and expenses in connection with the refinancing. On March 3,redemption.entered into an amendment to the CBS Radio Credit Agreement, to, among other things, createInc. (now Audacy Capital Corp.) on October 17, 2016, were valued at a tranche of Term B-1 Loans in an aggregate principal amount not to exceed $500 million. The Term B-1 Loans, which replace the commitment, are expected to be funded by the Commitment Parties on the closing datepremium as part of the Merger, subject to customaryconditions. The Term B-1 Loans will be governed by the CBS Radio Credit Agreement and will maturefair value measurement on the date that is seven years after the closing date of the Merger. The Term B-1 Loans will require quarterly principal payments at an annual rate of 1% of the initial principal amount of the Term B-1 Loans, beginning with the first full fiscal quarter ending after the closing of the Merger. The Term B-1 Loans are expected to bear interest at a per annum rate equal to LIBOR plus 2.75%. Interestpremium on the Term B-1 Loans will be payable atSenior Notes was amortized over the end of each interest period, but in no event less frequently than quarterly.The Former Credit FacilityOn November 23, 2011, we entered into our prior credit agreement with a syndicate of lenders for a $425 million Former Credit Facility, which was initially comprised of: (a) a $50 million Revolver (reduced to $40 million in December 2015) that was set to mature on November 23, 2016; and (b) a $375 million Term B Loan that was set to mature on November 23, 2018.In connection with the refinancing described above, on December 1, 2016, amounts outstandingterm under the Former Credit Facility were repaid in full.Theeffective interest rate method. As of any reporting period, the unamortized premium on the Senior NotesIn connection with was reflected on the refinancing describedbalance sheet as an addition to the $400.0 million liability.on November 1, 2016,during the nine months ended September 30, 2021, we issued a call notice to redeem our Senior Notes with an effective date of December 1, 2016. On November 1, 2016,April 10, 2021. We incurred interest on the Senior Notes until the redemption date. In connection with the redemption, we deposited the following funds in escrow to satisfy our obligationobligations under the Senior Notes and discharge the Indenture governing the Senior Notes: (1) $220.0(i) $400.0 million to redeem the Senior Notes in full; (2) $11.6 million for accrued and unpaid interest through December 1, 2016; and (3) $5.8(ii) $14.5 million for a call premium for the early retirement of the Senior notes.Perpetual Cumulative Convertible Preferred StockOn July 16, 2015,Notes; and (iii) $12.8 million for accrued and unpaid interest through April 10, 2021. As a result of the Company acquired under a Stock Purchase Agreement with The Lincoln National Life Insurance Companyrefinancing, we recorded an $8.2 million loss on extinguishment of debt that included the stockcall premium, the write off of oneunamortized debt issuance costs, and the write off of its subsidiaries, Lincoln Financial Media Company (“Lincoln”) which held through subsidiaries the assets and liabilities of radio stations serving the Atlanta, Denver, Miami, and San Diego markets (the “Lincoln Acquisition”).Upon closingunamortized premium on the Lincoln AcquisitionSenior Notes.2015, we issued $27.5operating activities were $19.6 million in perpetual cumulative convertible preferred stock (“Preferred”) that, infor the event of a liquidation, ranks senior to common stock in our capital structure. The Preferred is convertible by Lincoln into a fixed number of shares after a three-year waiting period, subject to customary anti-dilution provisions. At certain times (including the first three years after issuance), we can redeem the Preferred in cash at a price of 100%. The dividend rate on the Preferred increases over time from 6% to 12%. We declared and paid dividends in each quarter since the Preferred was issued.As described above, the Preferred is expected to be redeemed in full in connection with the CBS Radio Merger Agreement.Operating Activities$25.4 million and $51.0$45.6 million for the nine months ended September 30, 2017 and 2016, respectively. 2021.fromprovided by operating activities decreased primarily due to: (1) the increase in merger and acquisition costs of $24.9 million associated with the Merger; and (2) a $9.5 million increase in station operating expenses, net of(i) an increase in net revenues. Offsetting thisinvestment in working capital of $41.1 million; (ii) an increase in net gain on disposals of assets of $9.5 million; (iii) an increase in gain on remeasurement of contingent consideration of $8.8 million; (iv) a decrease toin net gains on deferred compensation of $8.6 million; and (iv) a decrease in loss on extinguishment of debt of $8.2 million.fromprovided by operating activities was the usewere partially offset by a decrease in net loss, as adjusted for certain non-cash charges and income tax benefits of $5.2$4.8 million from a reduction toand an increase in depreciation and amortization of $8.8 million.ouraccounts payable and accrued liabilities; (ii) collections of accounts receivable; (iii) settlements of other long-term liabilities; (iv) settlements of accrued interest expense paymentsexpense; and other accrued(v) settlements of prepaid expenses.$46.7$59.0 million and $53.4 million for the nine months ended September 30, 2017, which2022 and September 30, 2021, respectively.reflected the cash paiddue to complete the Beasley Acquisition of $24.0 million,an increase in additions to propertytangible and equipmentintangible assets of $12.1$33.3 million and the cash paid to acquire an interest in a privately held company of $9.7 million.Net cash flows provided by investing activities were $2.5 million for the nine months ended 2016, which primarily reflected the proceeds of $7.1 million from the sale of several properties that were reflected under assets held for sale as of December 31, 2015, offset by additions to property and equipment of $4.3 million.Financing ActivitiesNetconnection with investments in our A2 platform. This increase in cash flows used in financing activities was partially offset by: (i) an increase in proceeds from the sale of property, equipment, intangibles and other assets of $17.4 million; and (ii) a decrease in purchases of business and audio assets of $10.3 million.$20.2$55.6 million and $52.7$39.7 million for the nine months ended September 30, 20172022 and 2016, respectively.For the nine months ended September 30, 2017, the2021, respectively.used inprovided by financing activities increased primarily reflectdue to: (i) a decrease in cash outflows related to the paymentredemption of common stock dividendsfixed rate debt of $16.6$390.0 million; (ii) a decrease in payments against the Revolver of $101.3 million; (iii) a decrease of payments of long-term debt of $77.0 million; (iv) an increase in borrowing under the Revolver of $38.0 million; (v) a decrease in payments of call premiums and other fees of $14.5 million; and (vi) a decrease in payments for debt issuance costs of $9.4 million. For the nine months ended September 30, 2016, theThese increases in cash flows used inprovided by financing activities primarily reflectwere partially offset by: (i) a decrease in proceeds from issuance of long term debt of $540.0 million; and (ii) a reduction in proceeds from the reductionborrowing under the Receivables Facility of our net borrowings by $43.8 million and the payment of common stock dividends of $5.8$75.0 million.During the second quarter of 2016, we commenced an annual $0.30 per share common stock dividend program, with payments that approximate $2.9 million per quarter. of Directors based upon the relevant factors at the time of such consideration, including, without limitation, compliance with the restrictions set forth in our Credit Facility, the 2027 Notes and the CBS Radio Merger Agreement.In addition to the quarterly dividend, the Company paid a special one-time cash dividend of $0.20 per share of common stock on September 15, 2017. Pursuant to the Merger Agreement, we agreed not to declare or pay any dividends or make other distributions in respect of any shares of our capital stock, except for our regular quarterly cash dividend. This special one-time cash dividend, which approximated $7.8 million, is an exception under the Merger Agreement to the restriction on payment of dividends.Dividends on our Preferred were paid in each quarter commencing in October 2015.Income Taxespaid $0.4 million inwere able to carry back our 2020 federal and state income taxes. We expect that our quarterly federal and state corporate net income tax obligations will be minimalloss to prior tax years and file a refund claim with the IRS for $15.2 million. During the balancenine months ended September 30, 2022, we received a federal tax refund of approximately $15.2 million. We do not anticipate making any federal income tax payments in 2022 primarily as a result of the year as we have significant net operating loss carryovers availableavailability of NOLs to offset future income.federal tax due.do expectmay need to make federal alternative minimumadditional state estimated tax (“AMT”) payments during subsequent quarters. The AMT payments are available as a credit to offset income tax liabilities in future years.20172022 were $12.1$72.5 million. We anticipate that total capital expenditures in 20172022 will be between $15.0approximately $80 million and $16.0 million. Capital expenditures this year are estimated to be higher primarily due toas we increase our investment in the relocationrapidly growing digital audio advertising market.If the CBS Radio Merger Agreement is terminated under certain circumstances, we will be required to pay CBS a termination fee of $30 million and the costs for the committed financing.Excluding any contractual obligations associated with the Merger that was entered into on February 2, 2017, as2017,2022, there have been no net material changes in the total amount from the contractual obligations listed in our Form 10-K for the year ended December 31, 2016,2021, as filed with the SEC on February 28, 2017.2017,2022, we did not have any material off-balance sheet transactions, arrangements or obligations, including contingent obligations.AsDecember 31, 2016,certain property that we hadconsidered as surplus to our operations and that resulted in a Variable Interest Entitygain of approximately $2.5 million. In order to minimize the tax impact on a certain portion of these taxable gains, we created an entity that serves as a qualified intermediary (“QI”) for tax purposes and that held the net sales proceeds of $2.5 million from this transaction. We used a portion of these funds in a tax-free exchange by using the net sales proceeds from relinquished property for the purchase of replacement property. This entity was treated as a variable interest entity (“VIE”) that required consolidation. As of December 31, 2016, we consolidated the assets and liabilities of the VIE withinwas included in our consolidated financial statements using fair valuesas we were considered the primary beneficiary.assets and liabilities as ifsecond quarter of 2022, we had closedused a portion of these proceeds to repurchase replacement property in the amount of $2.4 million. These net sales proceeds were deposited into the account of the QI to comply with requirements under Section 1031 of the Code to execute a like-kind exchange.the Beasley Acquisitionthese deposits have lapsed as of December 31, 2016. TheSeptember 30, 2022. As a result, there is no restricted cash on our condensed consolidated assets and liabilitiesbalance sheet as of the consolidated VIE at December 31, 2016, represented only the assets and liabilities of the three stations held in a trust (“Charlotte Trust”). Upon the completion of the acquisition from Beasley on January 6, 2017, we reversed the VIE amounts and recorded the assets and liabilities of all four radio stations based upon the preliminary purchase price allocation. Refer to Note 9, Business Combinations, for additional information.2017.2022. Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.The SEC defines critical accounting policies as those that are most important to the portrayal of a company’s financial condition and results and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.Operations—Operations - Critical Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2016. We have, however, provided additional disclosures2021, as filed with the SEC on March 1, 2022.to oneimpact on the weighted average cost of our critical accounting policies forcapital and changes in stock price, and concluded and interim impairment testing of radio broadcasting licenses and goodwill, as we conducted our annual impairment test of broadcasting licenses and goodwill during the second quarter of 2017 and conducted an annual impairment test of broadcasting licenses and goodwill duringassessment was warranted.20172022, we completed an interim impairment test for a newly acquired market.Radio Broadcasting Licenses And GoodwillWe have made acquisitions inour goodwill at the past for which a significant amount ofpodcast reporting unit and the purchase price was allocated to broadcasting licenses and goodwill assets. As of September 30, 2017, we have recorded approximately $789 million in radio broadcasting licenses and goodwill, which represents 76% of our total assets at that date. We must conduct impairment testing at least annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired, and charge to operations an impairment expense in the periods in which the recorded value of these assets is more than their fair value. Any such impairment could be material. After an impairment expense is recognized, the recorded value of these assets will be reduced by the amount of the impairment expense and that result will be the assets’ new accounting basis. Our most recent impairment loss to our broadcasting licenses was in 2012.QLGG reporting unit. As a result of our annualthis interim impairment testing during the second quarter of 2017,assessment, we recognized an impairment loss on our goodwill of $0.4 million.We believe our estimate of the value of our radio broadcasting licenses and goodwill assets is a critical accounting estimate as the value is significant in relation to our total assets, and our estimate of the value uses assumptions that incorporate variables based on past experiences and judgments about future performance of our stations.Broadcasting Licenses Impairment TestThere were no events or circumstances since the Company’s second quarter annual license impairment test that indicated an interim review of broadcasting licenses was required, other than as described below.We completed our annual impairment test for broadcasting licenses during the second quarter of 2017 and determined that the fair value of our podcasting reporting unit was greater than the amount reflected in the balance sheet and, accordingly, no impairment was recorded for the podcast reporting unit. However, we determined that the fair value of our QLGG reporting unit was less than the amount reflected in the balance sheet and, accordingly, recorded an impairment loss of $18.1 million. As a result of this impairment loss, we no longer have any goodwill attributable to the QLGG reporting unit.Estimates And Assumptions Third Quarter 2022 Fourth Quarter 2021 Discount rate - podcast reporting unit 11.0 % 9.5% Discount rate - QLGG reporting unit 13.0 % 12.0% Sensitivity Analysis (1) Percentage Decrease in Reporting Unit Carrying Value Increase the discount rate from 11.0% to 12.0% — % Reduction in forecasted growth rate (including long-term growth rate) to 0% — % Reduction in operating profit margin by 10% — % moreless than the carrying valueamount reflected in eachthe balance sheet for certain of our markets and, as a result, we did not recordaccordingly, recorded an impairment loss.We perform our broadcasting license impairment test by using the direct method at the market level. loss of $159.1 million ($116.7 million, net of tax).the purposepurposes of testing impairment, as the broadcasting licenses in each market are operated as a single asset. We determine the fair value of the broadcasting licenses in each of our markets by relying on a discounted cash flow approach (a 10-year income model) assuming a start-up scenario in which the only assets held by an investor are broadcasting licenses. Our fair value analysis contains assumptions based upon past experience, reflects expectations of industry observers and includes judgments about future performance using industry normalized information for an average station within a certain market. These assumptions include, but are not limited to: (1)(i) the discount rate; (2)(ii) the market share and profit margin of an average station within a market, based upon market size and station type; (3)(iii) the forecast growth rate of each radio market; (4)(iv) the estimated capital start-up costs and losses incurred during the early years; (5)(v) the likely media competition within the market area; (6) a(vi) the tax rate; and (7)(vii) future terminal values. Changes in our estimates of the fair value of these assets could result in material future period write-downs in the carrying value of our broadcasting licenses and goodwill assets.first three (inassumptions in items (1)(i) through (3) above)(iii) above are the most important and sensitive in the determination of fair value.If actual market conditions are less favorable than those projected byindustry or by us, or if events occur or circumstances change that would reduceestimates and assumptions used in the interim and annual broadcasting licenses impairment assessments of each year.Estimates And Assumptions Third Quarter 2022 Fourth Quarter 2021 Discount rate 9.5 % 8.5 % Operating profit margin ranges for average stations in markets where the Company operates 19.6% to 32.9% 19.6% to 33.3% Forecasted growth rate (including long-term growth rate) range of the Company's markets 0.0% to 0.6% 0.0% to 0.6% licenses below the carrying value, we may be required to recognize impairment charges, whichlicenses. These estimates and assumptions could be material, in future periods.Goodwill Impairment TestThere were no events or circumstances since our second quarter of 2017 annual goodwill test that required us to test the carrying value of our goodwill, other than as described below.We completed our annual goodwill impairment test during the second quarter of 2017 and the results indicated that the fair value was greater than the carrying value for all but one of our markets. The results indicated that the carrying value of goodwill for our Boston, Massachusetts market exceeded its fair value by a material amount. The amount by which the carrying value exceeded the fair value was larger than the amount of goodwill allocated to this specific reporting unit. As a result, we determined that the entire carrying amount of goodwill for this specific reporting unit was impaired and recorded an impairment loss during the second quarter of 2017 in the amount of $0.4 million.goodwillbroadcasting licenses below the amount reflected in the condensed consolidated balance sheet, we may be required to conduct an interim test and possibly recognize impairment charges, which couldmay be material, in future periods.Annual The current macroeconomic conditions increase the uncertainty with respect to such market and economic conditions and, as such, increases the risk of future impairment.Licenses and Goodwill Impairment TestLicense Valuation RiskNewly Acquired MarketThe annualeach unit of accounting, our opinion is that this table in summary form is more meaningful to the reader in assessing the recoverability of the broadcasting licenses. In addition, the units of accounting are not disclosed with the specific market name as such disclosure could be competitively harmful to us.forconducted on our broadcasting licenses and goodwill, which was performed in the second quarter of 2017, did not include the broadcasting licenses and goodwill of the new market acquired by us during the first quarter of 2017. As the new market’s broadcasting licenses and goodwill are required to be tested at least annually for impairment, we elected to conduct an annual impairment test during the third quarter of 20172022, the results indicated that there were 41 units of the broadcasting licenses and goodwill of the newly acquired market only.Conducting this annual impairment test on the broadcasting licenses and goodwill of the newly acquired market will allow us to align the testing periods of all markets in the annual impairment test performed in the second quarter of 2018 and each annual impairment test thereafter.The annual impairment test of the newly acquired market’s broadcasting licenses and goodwill applied similar valuation techniques, valuation approaches and assumptions as those used in the annual impairment test conducted in the second quarter of 2017. We made reasonable estimates and assumptions to calculateaccounting where the fair value exceeded their carrying value by 10% or less. In aggregate, these 41 units of the newly acquired market’s broadcasting licenses and goodwill. These estimates and assumptions could be materially different from actual results.accounting had a carrying value of $2,019.5 million at September 30, 2022. As discussed above, as a result of the annualinterim impairment test,assessment conducted in the third quarter of 2022, we determined thatwrote down the carrying value of our broadcasting licenses in 38 markets.Units of Accounting as of September 1, 2022
Based Upon the Valuation as of September 1, 2022
Percentage Range by Which Fair Value Exceeds the Carrying Value0% To
5%Greater
Than 5%
To 10%Greater
Than 10%
To 15%Greater
Than
15%Number of units of accounting 41 — 1 1 Carrying value (in thousands) $ 2,019,531 $ — $ 4,174 $ 63,783 and goodwill approximates the carrying value reflectedfollowing would be the incremental impact:Sensitivity Analysis (1) Percentage Decrease in Broadcasting Licenses Carrying Value Increase the discount rate from 9.5% to 10.5% 12.6 % Reduction in forecasted growth rate (including long-term growth rate) to 0% for all markets 3.3 % Reduction in operating profit margin by 10% 11.6 % balance sheetsensitivity analysis is independent of the other assumptions.recently acquireduncertainty of the current market and accordingly, noeconomic conditions, there is an increased risk of future impairment.was recorded.charge, which could be material, in the future.
From time to time, we may seek to limit our exposure to interest rate volatility through the use of instruments as described below; and (ii) our Revolver would increase by $2.5 million, assuming our entire Revolver was outstanding as of September 30, 2022. costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, results of operations or financial condition.variable ratevariable-rate senior debtindebtedness (the Term BB-2 Loan and Revolver).As of September 30, 2017, if the borrowing rates under LIBOR were to increase 1% above the current rates, our interest expense on: (1) our Term B Loan would increase $4.6 million on an annual basis as our Term B Loan provides for a minimum LIBOR floor; and (2) our Revolver would increase by $0.6 million, assuming our entire Revolver was outstanding as of September 30, 2017.interestderivative rate hedging instruments.Assuming LIBOR remains flat, interest expense is expected to be lower due to the decrease in our outstanding debt upon which interest is computed.2017, there2022, if the borrowing rates under LIBOR were noto increase 1% above the current rates, our interest expense on: (i) our Term B-2 Loan would increase $4.1 million on an annual basis, including any increase or decrease in interest expense associated with the use of derivative rate hedging transactions outstanding.Type
Of
HedgeNotional
AmountEffective
DateCollar Fixed
LIBOR
RateExpiration
DateNotional
Amount
DecreasesAmount
After
Decrease(amounts
(in millions)(amounts
(in millions)Cap 2.75% Collar $220.0 Jun. 25, 2019 Floor 0.402% Jun. 28, 2024 Jun. 28, 2023 $ 90.0 Total $220.0 thatwhich are money market instruments consisting of short-term government securities and repurchase agreements that are fully collateralized by government securities. When such investments are made, we do not believe that we have any material credit exposure with respect to these assets. As of September 30, 2017,2022, we did not have any investments in money market instruments.industriesadvertising business sectors.whichrising wages and other costs. If our advertisers compete.
Ofof Controls Andand Proceduresensureprovide reasonable assurance that: (i) information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms; and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our 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, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.Inin Internal Control Over Financial Reportinghashave been no changechanges in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
2016,2021, filed with the Securities and Exchange Commission (the "SEC") on February 28, 2017.March 1, 2022. Refer to Note 16, Contingencies And Commitments, for additional information.
1A.1A Risk FactorsThereRisk Factorsrisk factors associated with our business previously described in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SecuritiesSEC on March 1, 2022. The risk factors set forth below update, and should be read together with, the risk factors described in "Item 1A, Risk Factors," in our Annual Report on Form 10-K filed with the SEC on March 1, 2022.Commissionour common stock may be delisted, which could have a material adverse effect on February 28, 2017.the liquidity of our common stock.
(a) Total (b) Average (c) Total (d) Maximum Period(1) July 1, 2017 - July 31, 2017 August 1, 2017 - August 31, 2017 September 1, 2017 - September 30, 2017 Total 2017:
Number
Of Shares
Price
Paid
Number
Of Shares
Purchased
As Part Of
Publicly
Announced
Plans Or
Approximate
Dollar Value
Of Shares
That May
Yet Be
Purchased
Under The
Plans Purchased Per Share Programs Or Programs 3,905 $ 9.98 — $ — 410 $ 9.85 — $ — — $ — — $ — 4,315 — (a)
Total
Number
Of Shares
Purchased(b)
Average
Price
Paid
Per Share(c)
Total
Number Of
Shares
Purchased
As
Part Of
Publicly
Announced
Plans Or
Programs(d)
Maximum
Approximate
Dollar Value
Of
Shares That
May Yet Be
Purchased
Under
The Plans
Or ProgramsJuly 1, 2022 - July 31, 2022 — $ — — $ 41,578,230 August 1, 2022 - August 31, 2022 1,899 $ 0.54 — $ 41,578,230 September 1, 2022 - September 30, 2022 2,463 $ 0.52 — $ 41,578,230 Total 4,362 — (1)(1) We withheld shares upon the vesting of RSUs in order to satisfy employees’ tax obligations. As a result, we are deemed to have purchased: (i) 1,899 shares at an average price of $0.54 in August 2022; and (ii) 2,463 shares at an average price of $0.52 in September 2022. These shares are included in the table above. (2) On November 2, 2017, our Board announced a share repurchase program (the “2017 Share Repurchase Program”) to permit us to purchase up to $100.0 million of our withholdingissued and outstanding shares to satisfy employee tax obligations related toof Class A common stock through open market purchases. In connection with the vesting of restricted stock units2017 Share Repurchase Program, we did not repurchase any shares during the three months ended September 30, 2017, we are deemed to have repurchased the following shares withheld to satisfy employees’ tax obligations: (1) 3,905 shares at an average price of $9.98 per share in July 2017; and (2) 410 shares at an average price of $9.85 per share in August 2017. These shares are included in the table above.2022.
N/A
Exhibit NumberDescription101.INSInline XBRL Instance Document (*)101.SCH101.SCH*Inline XBRL Taxonomy Extension Schema Document (*)101.CAL101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document (*)101.LAB101.DEF*Inline XBRL Taxonomy Extension LabelsDefinition Linkbase Document (*)101.PRE101.LAB*Inline XBRL Taxonomy Extension Label Linkbase 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document (*)101.DEF104Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) XBRL Taxonomy Extension Definition Linkbase Document (*)(#)*These exhibits are submitted herewith asFiled Herewith# Incorporated by reference. ** Furnished herewith. Exhibit is “accompanying” this Quarterly Report on Form 10-Qreport and shall not be deemed to be “filed” as part of such Quarterly Report on Form 10-Q.herewith.(*)Filed herewith.ENTERCOM COMMUNICATIONS CORP.Date: November 6, 20179, 2022President andChairman, Chief Executive Officer and President Date: November 6, 20179, 2022and- Chief Financial Officer (principal financial officer)48