UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



~~[X]~~☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, ~~2019~~2020

~~[ ]~~☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO __________

Commission File Number

~~000-53354~~001-38987

IHEARTMEDIA, INC.

(Exact name of registrant as specified in its charter)



Delaware		26-0241222
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

20880 Stone Oak Parkway
San Antonio,	Texas	78258
(Address of principal executive offices)		(Zip Code)

~~(210)~~ (210) 822-2828

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	IHRT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
~~Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Smaller reporting company [ ] Emerging growth company [ ]~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]~~

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Class	Outstanding at ~~April 22, 2019~~May 1, 2020
	~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~	~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
	Class A Common Stock, $.001 par value	~~31,434,876~~59,907,388	⁽¹⁾
	Class B Common Stock, $.001 par value	~~555,556~~6,900,228
	~~Class C Common Stock, $.001 par value~~	~~58,967,502~~
	~~Class D Common Stock, $.001 par value~~	—

	~~(1) Outstanding Class A common stock includes 111,291 shares owned by a subsidiary~~

IHEARTMEDIA, INC.

INDEX



		Page No.
Part I – Financial Information
Item 1.	Financial Statements	1
	Consolidated Balance Sheets ~~as of March 31, 2019 and December 31, 2018~~	1
	Consolidated Statements of Comprehensive Loss ~~for the three months ended March 31, 2019 and 2018~~	2
	Consolidated Statements of Changes in Stockholders' ~~Deficit for the three months ended March 31, 2019 and 2018~~Equity	3
	Consolidated Statements of Cash Flows ~~for the three months ended March 31, 2019 and 2018~~	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3124
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4738
Item 4.	Controls and Procedures	4738
Part II – Other Information
Item 1.	Legal Proceedings	4840
Item 1A.	Risk Factors	5140
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5142
Item 3.	Defaults Upon Senior Securities	5142
Item 4.	Mine Safety Disclosures	5242
Item 5.	Other Information	5242
Item 6.	Exhibits	5343
Signatures		5445

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

IHEARTMEDIA, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONSOLIDATED BALANCE SHEETS


(In thousands, except share and per share data)	March 31, 2019			December 31, 2018			Successor Company
	(Unaudited)						March 31, 2020			December 31, 2019
							(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	448,130		$	406,493		$	646,774		$	400,300
Accounts receivable, net of allowance of $49,619 in 2019 and $50,808 in 2018	1,387,122			1,575,170
Accounts receivable, net of allowance of $20,040 in 2020 and $12,629 in 2019							749,925			902,908
Prepaid expenses	179,823			195,266			84,844			71,764
Other current assets	74,977			58,088			43,418			41,376
Total Current Assets	2,090,052			2,235,017			1,524,961			1,416,348
PROPERTY, PLANT AND EQUIPMENT
Structures, net	1,014,688			1,053,016
Other property, plant and equipment, net	726,550			738,124
Property, plant and equipment, net							836,352			846,876
INTANGIBLE ASSETS AND GOODWILL
Indefinite-lived intangibles - licenses	2,326,533			2,417,915			1,774,999			2,277,735
Indefinite-lived intangibles - permits	971,163			971,163
Other intangibles, net	439,864			453,284			2,112,235			2,176,540
Goodwill	4,118,312			4,118,756			2,101,204			3,325,622
OTHER ASSETS
Operating lease right-of-use assets	2,359,275			—			864,230			881,762
Other assets	239,533			282,240			98,079			96,216

Total Assets	$	14,285,970		$	12,269,515		$	9,312,060		$	11,021,099
CURRENT LIABILITIES
Accounts payable	$	146,853		$	163,149		$	118,380		$	117,282
Current operating lease liabilities	366,902			—			82,618			77,756
Accrued expenses	632,078			826,865			188,530			240,151
Accrued interest	12,323			3,108			73,565			83,768
Deferred income	234,672			208,195
Deferred revenue							152,782			139,529
Current portion of long-term debt	46,744			46,332			29,969			8,912
Total Current Liabilities	1,439,572			1,247,649			645,844			667,398
Long-term debt	5,293,405			5,277,108			5,923,666			5,756,504
Series A Mandatorily Redeemable Preferred Stock, par value $0.001, authorized 60,000 shares, 60,000 shares issued in 2020 and 2019							60,000			60,000
Noncurrent operating lease liabilities	1,669,447			—			782,418			796,203
Deferred income taxes	323,434			335,015			584,771			737,443
Other long-term liabilities	296,896			489,829			56,059			58,110
Liabilities subject to compromise	16,829,329			16,480,256
Commitments and contingent liabilities (Note 6)
STOCKHOLDERS’ DEFICIT
Commitments and contingent liabilities (Note 7)
STOCKHOLDERS’ EQUITY
Noncontrolling interest	11,437			30,868			9,123			9,123
Preferred stock, par value $.001 per share, 150,000,000 shares authorized, no shares issued and outstanding	—			—
Class A Common Stock, par value $.001 per share, authorized 400,000,000 shares, issued 32,247,361 and 32,292,944 shares in 2019 and 2018, respectively	32			32
Class B Common Stock, par value $.001 per share, authorized 150,000,000 shares, issued 555,556 shares in 2019 and 2018	1			1
Class C Common Stock, par value $.001 per share, authorized 100,000,000 shares, issued 58,967,502 shares in 2019 and 2018	59			59
Class D Common Stock, par value $.001 per share, authorized 200,000,000 shares, no shares issued in 2019 and 2018	—			—
Preferred stock, par value $.001 per share, 100,000,000 shares authorized, no shares issued and outstanding							—			—
Class A Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, issued 59,930,396 and 57,776,204 shares in 2020 and 2019, respectively							60			58
Class B Common Stock, par value $.001 per share, authorized 1,000,000,000 shares, issued 6,899,611 and 6,904,910 shares in 2020 and 2019, respectively							7			7
Special Warrants, 78,919,386 and 81,046,593 issued and outstanding in 2020 and 2019, respectively							—			—
Additional paid-in capital	2,075,025			2,074,632			2,830,788			2,826,533
Accumulated deficit	(13,330,821		)	(13,345,346		)
Retained earnings (Accumulated deficit)							(1,577,657		)	112,548
Accumulated other comprehensive loss	(319,284		)	(318,030		)	(854		)	(750		)
Cost of shares (812,485 in 2019 and 805,982 in 2018) held in treasury	(2,562		)	(2,558		)
Total Stockholders' Deficit	(11,566,113		)	(11,560,342		)
Total Liabilities and Stockholders' Deficit	$	14,285,970		$	12,269,515
Cost of shares (133,039 in 2020 and 128,074 in 2019) held in treasury							(2,165		)	(2,078		)
Total Stockholders' Equity							1,259,302			2,945,441
Total Liabilities and Stockholders' Equity							$	9,312,060		$	11,021,099

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC.AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


(In thousands, except share and per share data)	Three Months Ended March 31,
(In thousands, except per share data)							Successor Company			Predecessor Company
							Three Months Ended March 31,			Three Months Ended March 31,
	2019			2018			2020			2019
Revenue	$	1,381,899		$	1,369,648		$	780,634		$	795,797
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)	614,919			602,355			301,632			282,874
Selling, general and administrative expenses (excludes depreciation and amortization)	455,723			472,987			344,141			324,934
Corporate expenses (excludes depreciation and amortization)	74,700			78,734			39,949			39,141
Depreciation and amortization	113,366			151,434			96,768			38,290
Impairment charges	91,382			—			1,727,857			91,382
Other operating expense, net	(3,549		)	(3,286		)	(1,066		)	(27		)
Operating income	28,260			60,852
Interest expense (excludes contractual interest of $397,500 and $66,324 for the three months ended March 31, 2019 and 2018, respectively)	114,764			418,397
Operating income (loss)							(1,730,779		)	19,149
Interest expense (income), net							90,089			(99		)
Loss on investments, net	(9,961		)	(90		)	(9,955		)	(10,237		)
Equity in earnings (loss) of nonconsolidated affiliates	(214		)	157
Gain (loss) on extinguishment of debt	(5,474		)	100
Equity in loss of nonconsolidated affiliates							(564		)	(7		)
Other expense, net	(761		)	(973		)	(7,860		)	(127		)
Reorganization items, net	36,118			192,055			—			(36,118		)
Loss before income taxes	(139,032		)	(550,406		)
Loss from continuing operations before income taxes							(1,839,247		)	(27,241		)
Income tax benefit	3,431			117,366			150,511			61,194
Consolidated net loss	(135,601		)	(433,040		)
Income (loss) from continuing operations							(1,688,736		)	33,953
Loss from discontinued operations, net of tax							—			(169,554		)
Net loss							(1,688,736		)	(135,601		)
Less amount attributable to noncontrolling interest	(21,218		)	(16,046		)	—			(21,218		)
Net loss attributable to the Company	$	(114,383	)	$	(416,994	)	$	(1,688,736	)	$	(114,383	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	2,318			6,561			(104		)	2,318
Other comprehensive income	2,318			6,561
Other comprehensive income (loss), net of tax							(104		)	2,318
Comprehensive loss	(112,065		)	(410,433		)	(1,688,840		)	(112,065		)
Less amount attributable to noncontrolling interest	3,572			5,446			—			3,572
Comprehensive loss attributable to the Company	$	(115,637	)	$	(415,879	)	$	(1,688,840	)	$	(115,637	)
Net loss attributable to the Company per common share:
Basic	$	(1.34	)	$	(4.89	)
Basic net income (loss) per share
From continuing operations							$	(11.60	)	$	0.40
From discontinued operations							—			(1.73		)
Basic net income (loss) per share							$	(11.60	)	$	(1.34	)
Weighted average common shares outstanding - Basic	85,649			85,215			145,614			85,649
Diluted	$	(1.34	)	$	(4.89	)
Diluted net income (loss) per share
From continuing operations							$	(11.60	)	$	0.40
From discontinued operations							—			(1.73		)
Diluted net loss per share							$	(11.60	)	$	(1.34	)
Weighted average common shares outstanding - Diluted	85,649			85,215			145,614			85,649

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' ~~DEFICIT~~EQUITY

(UNAUDITED)

(In thousands, except share data) Controlling Interest

Common Shares⁽¹⁾

Non-
controlling
Interest

Common
Stock

Additional
Paid-in
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Class C
Shares

Class B
Shares

Class A
Shares
Total
Balances at
December 31, 2018 58,967,502
555,556
32,292,944
$ 30,868
$ 92
$ 2,074,632
$ (13,345,346 ) $ (318,030 ) $ (2,558 ) $ (11,560,342 )
Consolidated net loss (21,218 ) —
—
(114,383 ) —
—
(135,601 )
Adoption of ASC 842, Leases —
—
—
128,908
—
—
128,908
Issuance of restricted stock

64
—
—
—
—
(4 ) 60
Forfeitures of restricted stock (45,583 ) —
—
—
—
—
—
—
Amortization of share-based compensation 1,835
—
392
—
—
—
2,227
Dividend declared and paid to noncontrolling interests (3,684 ) —
—
—
—
—
(3,684 )
Other —
—
1
—
—
—
1
Other comprehensive income (loss) 3,572
—
—
—
(1,254 ) —
2,318
Balances at
March 31, 2019 58,967,502
555,556
32,247,361
$ 11,437
$ 92
$ 2,075,025
$ (13,330,821 ) $ (319,284 ) $ (2,562 ) $ (11,566,113 )



(In thousands, except share data)								Controlling Interest
	Common Shares⁽¹⁾					Non- controlling Interest		Common Stock		Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Loss			Treasury Stock
	Class A Shares	Class B Shares		Special Warrants		Non- controlling Interest		Common Stock		Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balances at December 31, 2019 (Successor)	57,776,204	6,904,910		81,046,593		$	9,123	$	65	$	2,826,533		$	112,548		$	(750	)	$	(2,078	)	$	2,945,441
Net loss						—		—		—			(1,688,736		)	—			—			(1,688,736		)
Vesting of restricted stock	21,686					—		2		(2		)	—			—			(87		)	(87		)
Share-based compensation						—		—		4,257			—			—			—			4,257
Conversion of Special Warrants and Class B Shares to Class A Shares	2,132,506	(5,299	)	(2,127,207	)	—		—		—			—			—			—			—
Other						—		—		—			(1,469		)	—			—			(1,469		)
Other comprehensive loss						—		—		—			—			(104		)	—			(104		)
Balances at March 31, 2020 (Successor)	59,930,396	6,899,611		78,919,386		$	9,123	$	67	$	2,830,788		$	(1,577,657	)	$	(854	)	$	(2,165	)	$	1,259,302

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

See Notes to Consolidated Financial Statements

(In thousands, except share data) Controlling Interest

Common Shares⁽¹⁾

Non-
controlling
Interest

Common
Stock

Additional
Paid-in
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Class C
Shares

Class B
Shares

Class A
Shares
Total
Balances at
December 31, 2017 58,967,502
555,556
32,626,168
$ 41,191
$ 92
$ 2,072,566
$ (13,142,001 ) $ (313,718 ) $ (2,474 ) $ (11,344,344 )
Consolidated net loss (16,046 ) —
—
(416,994 ) —
—
(433,040 )
Issuance of restricted stock 70,000
5
—
—
—
—
—
5
Forfeitures of restricted stock (143,882 ) —
—
—
—
—
—
—
Amortization of share-based compensation 2,105
—
579
—
—
—
2,684
Dividend declared and paid to noncontrolling interests (3,251 ) —
—
—
—
—
(3,251 )
Other (21 ) —
(1 ) (1,435 ) 1,435
(3 ) (25 )
Other comprehensive income 5,446
—
—
—
1,115
—
6,561
Balances at
March 31, 2018 58,967,502
555,556
32,552,286
$ 29,429
$ 92
$ 2,073,144
$ (13,560,430 ) $ (311,168 ) $ (2,477 ) $ (11,771,410 )



(In thousands, except share data)								Controlling Interest
	Common Shares⁽¹⁾				Non- controlling Interest			Common Stock		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock
	Class A Shares		Class B Shares	Class C Shares	Non- controlling Interest			Common Stock		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balances at December 31, 2018 (Predecessor)	32,292,944		555,556	58,967,502	$	30,868		$	92	$	2,074,632	$	(13,345,346	)	$	(318,030	)	$	(2,558	)	$	(11,560,342	)
Net loss					(21,218		)	—		—		(114,383		)	—			—			(135,601		)
Adoption of ASC 842, Leases					—			—		—		128,908			—			—			128,908
Issuance of restricted stock	—				64			—		—		—			—			(4		)	60
Forfeitures of restricted stock	(45,583	)			—			—		—		—			—			—			—
Share-based compensation					—			—		392		—			—			—			392
Share-based compensation - discontinued operations					1,835			—		—		—			—			—			1,835
Payments to non-controlling interests					(3,684		)	—		—		—			—			—			(3,684		)
Other					—			—		1		—			—			—			1
Other comprehensive income (loss)					3,572			—		—		—			(1,254		)	—			2,318
Balances at March 31, 2019 (Predecessor)	32,247,361		555,556	58,967,502	$	11,437		$	92	$	2,075,025	$	(13,330,821	)	$	(319,284	)	$	(2,562	)	$	(11,566,113	)

(1) The Predecessor Company's Class D Common Stock and Preferred Stock are not presented in the data above as there were no shares issued and outstanding in ~~2019 or 2018.~~

~~IHEARTMEDIA, INC. AND SUBSIDIARIES~~

~~(DEBTOR-IN-POSSESSION)~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~

(In thousands) Three Months Ended March 31,
2019 2018
Cash flows from operating activities:
Consolidated net loss $ (135,601 ) $ (433,040 )
Reconciling items:
Impairment charges 91,382
—
Depreciation and amortization 113,366
151,434
Deferred taxes (5,357 ) (122,038 )
Provision for doubtful accounts 5,674
8,515
Amortization of deferred financing charges and note discounts, net 3,042
13,671
Non-cash Reorganization items, net 2,173
191,903
Share-based compensation 2,227
2,684
Loss on disposal of operating and other assets 3,556
1,678
Loss on investments 9,961
90
Equity in (earnings) loss of nonconsolidated affiliates 214
(157 )
(Gain) loss on extinguishment of debt 5,474
(100 )
Barter and trade income (6,448 ) (1,417 )
Other reconciling items, net (563 ) (19,783 )
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in accounts receivable 183,696
157,856
Increase in prepaid expenses and other current assets (50,365 ) (54,527 )
Decrease in accrued expenses (164,042 ) (114,377 )
Increase (decrease) in accounts payable (16,032 ) 35,051
Increase in accrued interest 9,768
310,235
Increase in deferred income 34,910
53,091
Changes in other operating assets and liabilities 1,952
(5,293 )
Net cash provided by operating activities 88,987
175,476
Cash flows from investing activities:
Purchases of property, plant and equipment (51,126 ) (38,703 )
Proceeds from disposal of assets 722
2,310
Change in other, net (2,007 ) (803 )
Net cash used for investing activities (52,411 ) (37,196 )
Cash flows from financing activities:
Draws on credit facilities —
25,333
Payments on credit facilities —
(59,000 )
Proceeds from long-term debt 2,235,228
—
Payments on long-term debt (2,206,466 ) (55,597 )
Dividends and other payments to noncontrolling interests (73 ) (3,166 )
Debt issuance costs (26,752 ) —
Change in other, net 59
(15 )
Net cash provided by (used for) financing activities 1,996
(92,445 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash 682
3,366
Net increase in cash, cash equivalents and restricted cash 39,254
49,201
Cash, cash equivalents and restricted cash at beginning of period 430,334
311,300
Cash, cash equivalents and restricted cash at end of period $ 469,588
$ 360,501
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 103,897
$ 94,533
Cash paid for income taxes 16,410
9,974
Cash paid for Reorganization items, net 33,945
152
2019.

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,
	2020			2019
Cash flows from operating activities:
Net loss	$	(1,688,736	)	$	(135,601	)
Loss from discontinued operations	—			169,554
Reconciling items:
Impairment charges	1,727,857			91,382
Depreciation and amortization	96,768			38,290
Deferred taxes	(152,216		)	8,600
Provision for doubtful accounts	9,428			3,828
Amortization of deferred financing charges and note discounts, net	514			406
Non-cash Reorganization items, net	—			2,173
Share-based compensation	4,257			392
Loss on disposal of operating and other assets	392			147
Loss on investments	9,955			10,237
Equity in loss of nonconsolidated affiliates	564			7
Barter and trade income	(4,983		)	(5,076		)
Other reconciling items, net	766			1
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in accounts receivable	143,419			114,447
Increase in prepaid expenses and other current assets	(15,561		)	(24,107		)
Increase in other long-term assets	(1,059		)	(7,734		)
Decrease in accounts payable and accrued expenses	(42,734		)	(149,222		)
Increase (decrease) in accrued interest	(9,971		)	328
Increase in deferred income	12,439			16,589
Increase in other long-term liabilities	441			2,025
Cash provided by operating activities from continuing operations	91,540			136,666
Cash used for operating activities from discontinued operations	—			(47,679		)
Net cash provided by operating activities	91,540			88,987
Cash flows from investing activities:
Purchases of investments	(9,999		)	—
Purchases of property, plant and equipment	(21,664		)	(22,953		)
Change in other, net	(137		)	(1,882		)
Cash used for investing activities from continuing operations	(31,800		)	(24,835		)
Cash used for investing activities from discontinued operations	—			(27,576		)
Net cash used for investing activities	(31,800		)	(52,411		)
Cash flows from financing activities:
Proceeds from long-term debt and credit facilities	350,000			228
Payments on long-term debt and credit facilities	(162,439		)	(6,412		)
Change in other, net	(278		)	(77		)
Cash provided by (used for) financing activities from continuing operations	187,283			(6,261		)
Cash provided by financing activities from discontinued operations	—			8,257
Net cash provided by financing activities	187,283			1,996
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(524		)	682
Net increase in cash, cash equivalents and restricted cash	246,499			39,254
Cash, cash equivalents and restricted cash at beginning of period	411,618			430,334
Cash, cash equivalents and restricted cash at end of period	658,117			469,588
Less cash, cash equivalents and restricted cash of discontinued operations at end of period	—			188,539
Cash, cash equivalents and restricted cash of continuing operations at end of period	$	658,117		$	281,049
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	101,363		$	103,897
Cash paid for income taxes	735			16,410
Cash paid for Reorganization items, net	417			33,945

See Notes to Consolidated Financial Statements

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – BASIS OFPRESENTATION

Preparation of Interim Financial Statements

All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to iHeartMedia, Inc. and its consolidated subsidiaries. The Company’s reportable segments are iHeartMedia (“iHM”), Americas outdoor advertising (“Americas outdoor” or “Americas outdoor advertising”) and International outdoor advertising (“International outdoor” or “International outdoor advertising”).

The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. ~~Due to seasonality~~As described below, as a result of the application of fresh start accounting and ~~other factors,~~ the ~~results for~~effects of the ~~interim periods may~~implementation of the Company's Plan of Reorganization (as defined below), the consolidated financial statements after the Effective Date (as defined below), are not ~~be indicative of results for~~comparable with the ~~full year.~~consolidated financial statements on or before that date. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s ~~2018~~2019 Annual Report on Form 10-K.

TheThe Company’s reportable segments are:


▪	Audio, which provides media and entertainment services via broadcast and digital delivery, and also includes the Company’s events and national syndication businesses and


▪	Audio & Media Services, which provides other audio and media services, including the Company’s media representation business, Katz Media Group (“Katz Media”) and the Company's provider of scheduling and broadcast software, Radio Computing Services (“RCS”).

The consolidated financial statements include the accounts of the Company and its subsidiaries. Also included in the consolidated financial statements are entities for which the Company has a controlling financial interest or is the primary beneficiary. Investments in companies in which the Company owns 20% to 50% of the voting common stock or otherwise exercises significant influence over operating and financial policies of the company are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process.

Unless otherwise indicated, information in these notes to the consolidated financial statements relates to continuing operations. Certain ~~prior period amounts~~of the Company's operations have been ~~reclassified~~presented as discontinued. The Company presents businesses that represent components as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off and their disposal represents a strategic shift that has, or will have, a major effect on its operations and financial results. See Note 2, Discontinued Operations.

COVID-19

On March 26, 2020, the Company issued a press release announcing that it was withdrawing its previously announced financial guidance for the fiscal year ending December 31, 2020 due to ~~conform~~heightened uncertainty related to the novel coronavirus pandemic (“COVID-19”), its impact on the operating and economic environment and related, near-term advertiser spending decisions. In addition, iHeartCommunications borrowed $350.0 million principal amount under its $450.0 million senior secured asset-based revolving credit facility (the “ABL Facility”) as a precautionary measure to preserve iHeartCommunications’ financial flexibility in light of the current uncertainty in the global economy resulting from COVID-19. The proceeds will be available if needed to fund iHeartCommunications’ future working capital requirements or other general corporate purposes. As of March 31, 2020, after considering $47.3 million of outstanding letters of credit, iHeartCommunications had $52.7 million available for borrowing under its ABL Facility, such availability being subject to further restrictions contained within the credit agreement governing the ABL Facility. The Company's revenue in the latter half of the month ended March 31, 2020 was significantly and negatively impacted as a result of a decline in advertising spend driven by COVID-19, and the Company's management took proactive actions to expand the Company’s financial flexibility by reducing expenses and preserving cash as a result of such impact.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company continues to examine the impacts the CARES Act may have on its business. For more information on the expected benefits of the CARES Act on the Company's income tax liabilities, see Note 8, Income Taxes.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of March 31, 2020, the Company had approximately $646.8 million in cash, which includes the $350.0 million borrowed under the ABL Facility. While the Company expects COVID-19 to negatively impact the results of operations, cash flows and financial position of the Company, the related financial impact cannot be reasonably estimated at this time. Based on the plans that the Company has put in place, it expects to be able to meet its obligations as they become due over the coming year.

As discussed below, the Company applied fresh start accounting as of May 1, 2019 ~~presentation.~~in connection with its emergence from Chapter 11 bankruptcy, which required stating the Company’s assets and liabilities, including intangible assets and goodwill, at estimated fair values. Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence. As a result of uncertainty related to COVID-19 and its negative impact on the Company's business and the public trading values of its debt and equity, the Company was required to perform interim impairment tests on its long-lived assets, intangible assets and indefinite-lived intangible assets as of March 31, 2020 because such factors indicated that the Company's long-lived assets, intangible assets and goodwill balances may be impaired. The estimated fair value of the Company’s Federal Communication Commission (“FCC”) licenses, which have indefinite lives, was below their carrying values, which resulted in a non-cash impairment charge of $502.7 million. As discussed, the United States economy is undergoing a period of economic disruption and uncertainty, which has caused, among other things, lower consumer and business spending. These disruptions and the continuing impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions in the discounted cash flow models used to value FCC licenses.

The Company also performed interim goodwill impairment tests as of March 31, 2020. The estimated fair value of one of the reporting units was below its carrying value, which required the Company to compare the implied fair value of the reporting units’ goodwill with its carrying value. As a result, the Company recognized a non-cash impairment charge of $1.2 billion to reduce goodwill. The macroeconomic factors discussed above had an adverse effect on the estimated cash flows and discount rates used in the discounted cash flow model.

The Company used the best information available to estimate fair values of its long-lived assets, intangible assets and goodwill for purposes of interim impairment testing. Uncertainty regarding the full extent of the economic downturn as a result of COVID-19, as well as the timing of any recovery, may result in additional non-cash impairment charges being taken in future periods and such charges could be material. For more information, see Note 5, Property, Plant and Equipment, Intangible Assets and Goodwill.

Voluntary Filing under Chapter 11

OnAs previously disclosed, on March 14, 2018 (the "Petition Date"), the Company, iHeartCommunications, Inc. ("iHeartCommunications") and certain of the Company's direct and indirect domestic subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief (the "Chapter 11 Cases") under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court"). On April 28, 2018, the Company and the other Debtors filed a plan of reorganization (as amended, the “Plan of Reorganization”) and a related disclosure statement with the Bankruptcy Court. On January 22, 2019, the Plan of Reorganization was confirmed by the Bankruptcy Court. On May 1, 2019 (the “Effective Date”), the Company emerged from Chapter 11 and effectuated a series of transactions through which Clear Channel Outdoor Holdings, Inc. ("CCOH"), its parent Clear Channel Holdings, Inc. (“~~CCOH”~~CCH”) and its ~~direct~~subsidiaries (collectively with CCOH and ~~indirect~~CCH, the “Outdoor Group”) were separated from, and ceased to be controlled by, the Company and its subsidiaries ~~did not file voluntary petitions for reorganization under the Bankruptcy Code and are not Debtors in the Chapter 11 Cases.~~

~~The Chapter 11 Cases are being administered under the caption~~ ~~In re: iHeartMedia, Inc., Case No. 18-31274 (MI)~~(the “Separation”). ~~The Debtors are operating their businesses as “debtors-in-possession” under the jurisdiction~~All of the ~~Bankruptcy Court and in accordance with the applicable provisions~~Company's equity existing as of the ~~Bankruptcy Code and orders~~Effective Date was canceled on such date pursuant to the Plan of Reorganization.

Upon the ~~Bankruptcy Court.~~

On March 16, 2018, the Debtors entered into a Restructuring Support Agreement (the “RSA”) with certain creditors and equity holders (the “Consenting Stakeholders”). The RSA contemplates the restructuring and recapitalization of the Debtors (the “Restructuring Transactions”) through a plan of reorganization inCompany's emergence from the Chapter 11 Cases, the Company adopted fresh start accounting, which ~~plan was confirmed~~resulted in ~~January 2019. Pursuant~~a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after the Effective Date, are not comparable with the consolidated financial statements on or before that date.

References to “Successor” or “Successor Company” relate to the ~~RSA, the Consenting Stakeholders have agreed to, among other things, support the Restructuring Transactions~~financial position and ~~vote in favor~~results of ~~a plan of reorganization to effect the Restructuring Transactions.~~

~~The RSA provides certain milestones for the Restructuring Transactions. Failure~~operations of the ~~Debtors~~Company after the Effective Date. References to ~~satisfy these milestones without a waiver~~"Predecessor" or consensual amendment would provide the Consenting Stakeholders a termination right under the RSA. These milestones include (i) the filing of a plan of reorganization and disclosure statement, in form and substance reasonably acceptable"Predecessor Company" refer to the ~~Debtors~~financial position and ~~the Consenting Stakeholders, which were filed with the Bankruptcy Court on April 28, 2018, (ii) the filing~~results of ~~a motion for approval~~operations of the disclosure statement by May 31, 2018, which deadline was subsequently extended to June 22, 2018, and which motion was filed with the Bankruptcy Court on that date, (iii) the entry of an order approving the disclosure statement by July 27, 2018 (subject to one additional 20-day extension on the terms set forth on the RSA), which order was ultimately entered on September 20, 2018, (iv) the entry of an order confirming the plan of reorganization within 75 days of the entry of an order approving the disclosure statement, which order was ultimately entered on January 22, 2019 and (v) the effective date of the plan of reorganization (the "Effective Date") occurring by March 14, 2019, which has not yet occurred but is currently expected to occurCompany on or ~~about May 1, 2019. The Debtors satisfied~~before the ~~first and second milestones, but did not satisfy~~Effective Date.

During the ~~subsequent milestones and as a result, certain of~~Predecessor period, the ~~Consenting Stakeholders presently have the right to terminate the RSA, but as of the date hereof, the RSA has not been terminated.~~

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

iHeartCommunications, which is a Debtor in the Chapter 11 Cases, provides the day-to-day cash management services for CCOH’s cash activities and balances in the U.S. pursuant to the Corporate Services Agreement between iHeartCommunications and CCOH, and is continuing to do so during the Chapter 11 Cases pursuant to a cash management order approved by the Bankruptcy Court.

iHeartCommunications' filing of the Chapter 11 Cases constituted an event of default that accelerated its obligations under its debt agreements. Due to the Chapter 11 Cases, however, the creditors’ ability to exercise remedies under iHeartCommunications' debt agreements were stayed as of March 14, 2018, the date of the Chapter 11 petition filing, and continue to be stayed.

~~The~~ Company ~~has~~ applied Accounting Standards Codification (“ASC”) 852 - Reorganizations(“ASC 852”) in preparing the consolidated financial statements. ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain charges incurred during 2019 related to the bankruptcy proceedings, including unamortized long-term debt fees and discounts associated with debt classified as liabilities subject to compromise, are recorded as Reorganization items, net. In addition, pre-petition Debtor obligations that may be impacted by the Chapter 11 Cases, have been classified on the Consolidated Balance Sheet at March 31, 2019 as Liabilities subject to compromise. These liabilities are reported at the amounts the Company anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. See below for more information regarding Reorganization items.

~~ASC 852 requires certain additional reporting for financial statements prepared between the bankruptcy filing date and the date of emergence from bankruptcy, including:~~

Reclassification of Debtor pre-petition liabilities that are unsecured, under-secured or where it cannot be determined that the liabilities are fully secured, to a separate line item in the Consolidated Balance Sheet called, "Liabilities subject to compromise"; and

~~Segregation of Reorganization items, net as a separate line in the Consolidated Statement of Comprehensive Loss, outside of income from continuing operations.~~

~~Debtor-In-Possession~~

In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to first day and second day motions filed with the Bankruptcy Court, the Bankruptcy Court authorized the Debtors to conduct their business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing the Debtors to: (i) pay employees’ wages and related obligations; (ii) continue to operate their cash management system in a form substantially similar to prepetition practice; (iii) use cash collateral on an interim basis; (iv) continue to honor certain obligations related to on-air talent, station affiliates and royalty obligations; (v) continue to maintain certain customer programs; (vi) pay taxes in the ordinary course; (vii) continue their surety bond program; and (viii) maintain their insurance program in the ordinary course.

~~Automatic Stay~~

Subject to certain specific exceptions under the Bankruptcy Code, the Chapter 11 Cases automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities are subject to settlement under the Bankruptcy Code. See Note 14, ~~Condensed Combined Debtor-In-Possession Financial Information~~.

~~Executory Contracts~~

Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, amend or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with the Debtors in this document, including where applicable a

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

quantification of the Company’s obligations under any such executory contract or unexpired lease of the Debtors, is qualified by any overriding rejection rights the Company has under the Bankruptcy Code.

~~Potential Claims~~

The Debtors have filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. These schedules and statements may be subject to further amendment or modification after filing. Certain holders of pre-petition claims that are not governmental units were required to file proofs of claim by the deadline for general claims, which was on June 29, 2018 (the “Bar Date”).

~~The Debtors' have received approximately 4,300proofs of claim~~including professional fees incurred directly as of April 22, 2019 for an amount of approximately $808.4 billion. Such amount includes duplicate claims across multiple Debtor legal entities. These claims will be reconciled to amounts recorded in the Company's accounting records. Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Bankruptcy Court does not allow for claims that have been acknowledged as duplicates. Approximately 2,000 claims totaling approximately $7.0 billion have been disallowed, modified or withdrawn and the Debtors have filed additional claim objections with the Bankruptcy Court for approximately 50 claims totaling approximately $0.6 million in additional reductions and modifications. The Company may ask the Bankruptcy Court to disallow claims that the Company believes have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Company may identify additional liabilities that will need to be recorded or reclassified to Liabilities subject to compromise. In light of the substantial number of claims filed, and expected to be filed, the claims resolution process may take considerable time to complete and will continue after the Debtors emerge from bankruptcy.

~~Reorganization Items, Net~~

The Debtors have incurred and will continue to incur significant costs associated with the reorganization, including the write-off of original issue discount and deferred long-term debt fees on debt subject to compromise, costs of debtor-in-possession refinancing, legal and professional fees. The amount of these charges, which since the Petition Date are being expensed as incurred, are expected to significantly affect the Company’s results of operations. In accordance with applicable guidance, costs associated with the bankruptcy proceedings have been recorded as Reorganization items, net within the Company's accompanying Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2019 and 2018. See Note 13, ~~Reorganization Items, Net~~.

~~Financial Statement Classification of Liabilities Subject to Compromise~~

The accompanying Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 include amounts classified as Liabilities subject to compromise, which represent liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases. These amounts represent the Debtors’ current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases, and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 process and adjust amounts as necessary. Such adjustments may be material. See Note 12, ~~Liabilities Subject to Compromise~~.

~~Plan of Reorganization~~

On April 28, 2018, the Debtors filed a plan of reorganization (as amended, the “Plan of Reorganization”) and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court. Thereafter, the Debtors filed a second, third and fourth amended Plan of Reorganization and amended versions of the Disclosure Statement. On September 20, 2018, the Bankruptcy Court entered an order approving the Disclosure Statement and related solicitation and notice procedures for voting on the Plan of Reorganization. On October 10, 2018, the Debtors filed a fifth amended Plan of Reorganization and the Disclosure Statement Supplement. On October 18, 2018, the Bankruptcy Court entered an order approving the Disclosure Statement Supplement and the continued solicitation of holders of general unsecured claims for voting on the Plan of Reorganization. The deadline for holders of claims and interests to vote on the Plan of Reorganization was November 16, 2018. More than 90% of the votes cast by holders of claims and interests entitled to vote thereon accepted the Plan of Reorganization.

On December 16, 2018, the Debtors, CCOH, GAMCO Asset Management, Inc., and Norfolk County Retirement System entered into the CCOH Separation Settlement (as defined below) resolving all claims, objections, and other causes of action that have

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

been or could be asserted by or on behalf of CCOH, GAMCO Asset Management, Inc., and/or Norfolk County Retirement System by and among the Debtors, CCOH, GAMCO Asset Management, Inc., certain individual defendants in the GAMCO Asset Management, Inc. action and/or the Norfolk County Retirement System action, and the private equity sponsor defendants in such actions. In connection with the CCOH Separation Settlement, on December 17, 2018, the Debtors filed a modified fifth amended Plan of Reorganization. On January 10, 2019, hearings commenced to consider confirmation of the Plan of Reorganization. On January 17, 2019, the Debtors came to agreement on the terms of the Legacy Plan Settlement (as defined below) with Wilmington Savings Fund Society, FSB (“WSFS”), solely in its capacity as successor indenture trustee to the 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027 (together with the 5.50% Senior Notes due 2016, the “Legacy Notes”), and not in its individual capacity, and certain consenting Legacy Noteholders of all issues related to confirmation of our plan of reorganization, and on January 21, 2019 and January 22, 2019, the Debtors filed further modified versions of the fifth amended Plan of Reorganization. On January 22, 2019, the Bankruptcy Court entered an order confirming the Plan of Reorganization.

The Plan of Reorganization contemplates a restructuring of the Debtors that will reduce iHeartCommunications’ debt from approximately $16 billion to approximately $5.8 billion, and will result in the separation of CCOH from the Company, creating two independent companies.

~~Going Concern~~

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. As noted above, Liabilities subject to compromise will be resolved in connection with the Chapter 11 Cases. The Company’s ability to continue as a going concern is contingent upon the Company’s ability to successfully implement the Company’s Plan of Reorganization, among other factors. As a result of the Chapter 11 Cases are recorded as Reorganization items, net in the ~~realization of assets and the satisfaction of liabilities are subject~~Predecessor period.

Reclassifications

Certain prior period amounts have been reclassified to ~~uncertainty. While operating as debtors-in-possession under Chapter 11, the Company may sell or otherwise dispose of or liquidate assets or settle liabilities, subject~~conform to the ~~approval~~2020 presentation. In the first quarter of 2020, in connection with a reorganization of the ~~Bankruptcy Court or as otherwise permitted in~~Company’s management structure after the ~~ordinary course of business, for amounts other than those reflected in the accompanying consolidated financial statements. Further, the Plan of Reorganization could materially change the amounts~~Separation and classifications of assets and liabilities reported in the consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern or as a consequence ofemergence from the Chapter 11 ~~Cases.~~cases, the Company reevaluated the classification of certain expenses to determine whether such expenses should be included within Direct operating expenses, Selling, general & administrative (“SG&A”) expenses or Corporate expenses. As a result, ~~of our financial condition,~~certain expenses were reclassified from Corporate expenses to Direct operating or SG&A expenses. In addition, certain expenses were reclassified from SG&A expenses to Direct operating expenses. The reclassifications had no impact on the ~~defaults under our debt agreements,~~Company's Operating Income (Loss) or Net Loss. Accordingly, the Company recast the corresponding amounts in the prior period to conform to the current expense classifications. The corresponding current and prior period segment disclosures were recast to reflect the ~~risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists that we will be able to continue as a going concern.~~current expense classifications. See Note 10, Segment Data.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts reported in the Consolidated Statements of Cash Flows:



(In thousands)	Successor Company
	March 31, 2020		December 31, 2019
Cash and cash equivalents	$	646,774	$	400,300
Restricted cash included in:
Other current assets	11,343		11,318
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows	$	658,117	$	411,618

(In thousands) March 31,
2019 December 31,
2018
Cash and cash equivalents $ 448,130
$ 406,493
Restricted cash included in:
Other current assets 7,493
7,649
Other assets 13,965
16,192
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows $ 469,588
$ 430,334
Certain Relationships and Related Party Transactions

From time to time, certain companies in which the Company holds minority equity interests, purchase advertising in the ordinary course. None of these ordinary course transactions have a material impact on the Company.

New Accounting Pronouncements Recently Adopted

~~Leases~~

During the second quarter of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and finalized amendments to FASB ASC Subtopic 825-15, Financial Instruments-Credit Losses ("ASC 326"). The amendments of ASU 2016-13 are intended to provide financial statement users with more decision-useful information related to expected credit losses on financial instruments and other commitments to extend credit by replacing the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. The amendments of ASU 2016-13 eliminate the probable initial recognition threshold and, in turn, reflect an entity’s current estimate of all expected credit losses. ASU 2016-13 does not specify the method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. Additionally, the amendments of ASU 2016-13 require that credit losses on available for sale debt securities be presented as an allowance rather than as a write-down. The Company adopted ~~ASU No. 2016-02,~~the updated guidance in the first quarter of 2020 utilizing the modified retrospective approach, which ~~created ASC 842,~~ ~~Leases~~, and all subsequent ASUs relating to this Topic, as of January 1, 2019 (collectively, "ASC 842"). This new lease accounting standard, which supersedes previous lease accounting guidance under U.S. GAAP, resultsresulted in ~~significant changes to the balance sheets of lessees, most significantly by requiring~~ the recognition of ~~a right-of-use ("ROU") asset and lease liability~~estimated credit loss reserves against certain available-for-sale debt securities from third-parties held by ~~lessees for those leases classified as operating leases. Lessor~~the Company.

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~accounting is also updated~~Upon adoption, the Company recognized a $1.5 million cumulative-effect adjustment to ~~align with certain changes~~opening retained earnings to reflect expected credit losses in relation to notes receivable held by the ~~lessee model and the revenue recognition standard ("ASC Topic 606"), which was adopted in 2018.~~

The Company applied the transition provisions of this standard at January 1, 2019 following the optional transition method provided by ASU No. 2018-11; consequently, the consolidated financial statements and notes to the consolidated financial statements for periods before the date of adoption continue to be presented in accordance with ASC Topic 840.Company. In addition, the Company ~~elected~~evaluated the ~~package~~potential impact of ~~practical expedients permitted under~~ the ~~transition guidance~~COVID-19 pandemic on the collectability of its notes receivable from third-parties. To develop an estimate of the present value of expected cash flows of notes receivable, the Company used a probability-weighted discounted cash flow model. As a result of this analysis, the Company recognized an additional credit loss reserve against available-for-sale debt securities of

$5.6 million, which was recognized within Loss on investments, net in the new standard, which allowed us to not reassess whether expired or existing contracts are or contain leases and to carry forward the historical lease classification for those leases that commenced prior to the dateCompany's Statement of ~~adoption.~~

~~Upon adoption~~Comprehensive Loss as of ASC 842, prepaid and deferred rent balances, which were historically presented separately, were combined and presented net within the ROU asset. Additionally, deferred gains related to previous transactions that were historically accounted for as sale and operating leasebacks in accordance with ASC Topic 840 were recognized as a cumulative-effect adjustment to equity, resulting in an increase to equity, net of tax, of $128.9 million. Under ASC Topic 840, such gains were recognized ratably over the lease term as a credit to operating lease expense, and operating lease expense for the three months ended March 31, ~~2018 included a credit of $1.5 million for~~2020. The Company will continue to actively monitor the ~~amortization of these gains, which was not recognized in the three months ended March 31, 2019.~~

~~Adoption~~impact of the ~~new standard had a material impact~~COVID-19 pandemic on our consolidated balance sheets, but it did not have a material impact on our other consolidated financial statements. Additionally, the standard requires 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. Refer to Note 2, ~~Revenue, and Note 3,~~ ~~Leases, for more information.~~expected credit losses.

~~Intangible Assets and Goodwill~~New Accounting Pronouncements Not Yet Adopted

~~During the first quarter of 2017,~~In March 2020, the FASB issued ASU ~~2017-04,~~ ~~Intangibles - Goodwill and Other~~No. 2020-04, Reference Rate Reform (Topic ~~350)~~848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ~~update eliminates~~guidance provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the ~~requirement~~market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to ~~calculate the implied fair value~~alternative reference rates. The guidance was effective upon issuance and generally can be applied through December 31, 2022. The effects of ~~goodwill to measure a goodwill impairment charge. Entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The~~this standard is effective for annual and any interim impairment tests performed for periods beginning after December 15, 2019. The Company early adopted the proposed guidance under ASU 2017-04 beginning on January 1, 2019 on a prospective basis. The implementation of ASU 2017-04 did not have a material impact on our ~~consolidated~~ financial ~~statements~~position, results of operations and ~~related disclosures.~~cash flows are not expected to be material.

~~During the third quarter of 2018, the~~The FASB issued ASU ~~2018-15,~~ ~~Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's~~No. 2019-12, Simplifying the Accounting for ~~Implementation Costs Incurred~~Income Taxes (Topic 740). The new guidance simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in ~~a Cloud Computing Arrangement that is a Service Contract. This update requires that a customer~~an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. For public companies, the amendments in a cloud computing arrangement that is a service contract follow the internal use software guidance in Accounting Standards Codification (ASC) 350-402 to determine which implementation costs to capitalize as assets. The standard isthis ASU are effective for fiscal years beginning after December 15, ~~2019.~~2020 and interim periods within those fiscal years. Early adoption is permitted in interim or annual periods with any adjustments reflected as of the beginning of the annual period that includes that interim period. Additionally, entities that elect early adoption must adopt all the amendments in the same period. Amendments are to be applied prospectively, except for certain amendments that are to be applied either retrospectively or with a modified retrospective approach through a cumulative effect adjustment recorded to retained earnings. The ~~Company early adopted the proposed guidance under ASU 2017-04 beginning on January 1, 2019 on a prospective basis. The implementation~~effects of ~~ASU 2017-04 did not have a material impact~~this standard on our ~~consolidated~~ financial ~~statements and related disclosures.~~position, results of operations or cash flows are not expected to be material.

NOTE 2 ~~– REVENUE~~- DISCONTINUED OPERATIONS

~~The Company generates revenue from several sources:~~

~~The primary source of revenue in~~Discontinued operations relate to our domestic and international outdoor advertising businesses and were previously reported as the iHM segment is the sale of local and national advertising on the Company’s broadcast radio stations, its iHeartRadio digital platforms, station websites, sponsorships and live events. This segment also generates revenues from traffic and weather data, syndicated content, and other miscellaneous transactions.

~~The~~ Americas outdoor and International outdoor segments ~~generate revenue primarily~~prior to the Separation. Revenue, expenses and cash flows for these businesses are separately reported as Revenue, expenses and cash flows from discontinued operations in the ~~sale of advertising space on printed and digital out-of-home advertising displays.~~Company's financial statements for all periods presented.

Financial Information for Discontinued Operations

Income Statement Information

The following shows the revenue and loss from discontinued operations for the Predecessor Company ~~also generates revenue through contractual commissions realized from~~for the ~~sale of national spot and online advertising on behalf of clients of its full-service media representation business, Katz Media, which is reported in the Company’s Other segment.~~three months ended March 31, 2019:



(In thousands)	Predecessor Company
	Three Months Ended March 31,
	2019
Revenue	$	587,116

Loss from discontinued operations before income taxes	$	(111,791	)
Income tax expense	(57,763		)
Loss from discontinued operations, net of taxes	$	(169,554	)

In connection with the Separation, the Company and its subsidiaries entered into the agreements described below.

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Transition Services Agreement

On the Effective Date, the Company, iHM Management Services, iHeartCommunications and CCOH entered into a transition services agreement (the “Transition Services Agreement”), pursuant to which iHM Management Services has agreed to provide, or cause the Company and its subsidiaries to provide CCOH with certain administrative and support services and other assistance which CCOH will utilize in the conduct of its business as such business was conducted prior to the Separation, for one year from the Effective Date (subject to certain rights of CCOH to extend up to one additional year, as described below).

The allocation of cost is based on various measures depending on the service provided, which measures include relative revenue, employee headcount, number of users of a service or other factors. As of March 31, 2020, most of these services have been successfully transitioned to CCOH. CCOH has requested extensions of the term for certain individual services, primarily related to information systems, for one-month periods through June 30, 2020 and may request further one-month extensions of such services up to May 1, 2021.

New Tax Matters Agreement

In connection with the Separation, the Company entered into the New Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., CCH, CCOH and Clear Channel Outdoor, Inc., to allocate the responsibility of iHeartMedia and its subsidiaries, on the one hand, and CCOH and its subsidiaries, on the other, for the payment of taxes arising prior and subsequent to, and in connection with, the Separation.

The New Tax Matters Agreement requires that iHeartMedia and iHeartCommunications indemnify CCOH and its subsidiaries, and their respective directors, officers and employees, and hold them harmless, on an after-tax basis, from and against certain tax claims related to the Separation. In addition, the New Tax Matters Agreement requires that CCOH indemnify iHeartMedia for certain income taxes paid by iHeartMedia on behalf of CCOH and its subsidiaries.

NOTE 3 – REVENUE

Disaggregation of Revenue

The following table shows revenue streams for the Successor Company for the three months ended March 31, 2020:



Successor Company
(In thousands)	Audio		Audio and Media Services		Eliminations			Consolidated
Three Months Ended March 31, 2020
Revenue from contracts with customers:
Broadcast Radio⁽¹⁾	$	461,660	$	—	$	—		$	461,660
Digital⁽²⁾	92,776		—		—			92,776
Networks⁽³⁾	134,577		—		—			134,577
Sponsorship and Events⁽⁴⁾	29,348		—		—			29,348
Audio and Media Services⁽⁵⁾	—		60,227		(1,811		)	58,416
Other⁽⁶⁾	3,560		—		(167		)	3,393
Total	721,921		60,227		(1,978		)	780,170
Revenue from leases⁽⁷⁾	464		—		—			464
Revenue, total	$	722,385	$	60,227	$	(1,978	)	$	780,634


⁽¹⁾	Broadcast Radio revenue is generated through the sale of advertising time on the Company’s domestic radio stations.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


⁽²⁾	Digital revenue is generated through the sale of streaming and display advertisements on digital platforms, subscriptions to iHeartRadio streaming services, podcasting and the dissemination of other digital content.


⁽³⁾	Networks revenue is generated through the sale of advertising on the Company’s Premiere and Total Traffic & Weather network programs and through the syndication of network programming to other media companies.


⁽⁴⁾	Sponsorship and events revenue is generated through local events and major nationally-recognized tent pole events and include sponsorship and other advertising revenue, ticket sales, and licensing, as well as endorsement and appearance fees generated by on-air talent.

⁽⁵⁾

Audio and media services revenue is generated by services provided to broadcast industry participants through the Company’s Katz Media and RCS businesses. As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast and webcast software and technology and services to radio stations, television music channels, cable companies, satellite music networks and Internet stations worldwide.


⁽⁶⁾	Other revenue represents fees earned for miscellaneous services, including on-site promotions, activations, and local marketing agreements.


⁽⁷⁾	Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases.

The following table shows revenue streams from continuing operations for the Predecessor Company. The presentation of amounts in the Predecessor period has been revised to conform to the Successor period presentation.



Predecessor Company
(In thousands)	Audio⁽¹⁾		Audio and Media Services⁽¹⁾		Eliminations			Consolidated
Three Months Ended March 31, 2019
Revenue from contracts with customers:
Broadcast Radio	$	487,232	$	—	$	—		$	487,232
Digital	75,949		—		—			75,949
Networks	138,199		—		—			138,199
Sponsorship and Events	39,713		—		—			39,713
Audio and Media Services	—		51,392		(1,623		)	49,769
Other	4,713		—		(188		)	4,525
Total	745,806		51,392		(1,811		)	795,387
Revenue from leases	410		—		—			410
Revenue, total	$	746,216	$	51,392	$	(1,811	)	$	795,797


⁽¹⁾	Due to a re-evaluation of the Company’s internal segment reporting upon the effectiveness of the Plan of Reorganization, the Company’s RCS business is included in the Audio & Media Services results for all periods presented.

Trade and Barter

Trade and barter transactions represent the exchange of advertising spots ~~or display space~~ for merchandise, services, advertising and promotion or other assets in the ordinary course of business. The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots ~~or display space~~ promised to the customer. Trade and barter revenues and expenses from continuing operations, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows:



	Successor Company		Predecessor Company
	Three Months Ended March 31,		Three Months Ended March 31,
(In thousands)	2020		2019
Trade and barter revenues	$	52,678	$	55,585
Trade and barter expenses	54,998		49,856

Three Months Ended March 31,
(In thousands) 2019 2018
Consolidated:
  Trade and barter revenues $ 59,382
$ 57,392
  Trade and barter expenses 51,928
68,277

iHM Segment:
  Trade and barter revenues $ 55,585
$ 53,946
  Trade and barter expenses 49,856
64,532

~~Lease Revenue Considerations in Outdoor Segments~~

~~Certain~~The Successor Company recognized barter revenue of ~~the revenue transactions~~$5.0 million in the ~~Americas outdoor and International outdoor segments are considered leases,~~three months ended March 31, 2020 in connection with investments made in companies in exchange for ~~accounting purposes, as the contracts convey to customers the right to control the use~~advertising services. The Predecessor Company recognized barter revenue of the Company’s advertising displays for a period of time. These contracts, which typically cover periods of a few weeks to one year (although there are some with longer terms), are generally cancelable after a specified notice period$5.1 million in the ~~Americas outdoor segment, while contracts~~three months ended March 31, 2019 in the International outdoor segment are generally non-cancelable or require the customer to pay a fee to terminate the contract. To qualify as a lease, fulfillment of the contract must be dependent upon the use of a specifiedconnection with investments made in companies in exchange for advertising structure, the customer must have almost exclusive use of the advertising display throughout the contract term, and, upon adoption of the new leases standard (ASC 842) on January 1, 2019, the customer must also have the right to change the advertisement that is displayed throughout the contract term.

The Company has elected a practical expedient to not separate non-lease components from associated lease components if certain criteria are met. As such, each right to control the use of an advertising display that meets the lease criteria is combined with the related installation and maintenance services provided under the contract into a single lease component. Production services, which do not meet the criteria to be combined, and each advertising display that does not meet the lease criteria (along with any related installation and maintenance services) are non-lease components. Consideration in outdoor advertising contracts is allocated between lease and non-lease components in proportion to their relative standalone selling prices, which are generally approximated by the contractual prices for each promised service. The Company accounts for revenue from leases, which are all classified as operating leases, in accordance with the lease accounting guidance (ASC Topic 840 or ASC Topic 842, depending on the advertising campaign start date), while the Company’s remaining revenue transactions are accounted for as revenue from contracts with customers (ASC Topic 606).

In accordance with the transition approach that the Company elected to adopt ASC Topic 842, as described in Note 1, revenue contracts with campaign start dates prior to January 1, 2019 were not reassessed to determine whether they qualify as a lease under the requirements of the new leasing standard. Instead, they continue to be accounted for as revenue from contracts with customers or revenue from leases based on the requirements of the previous standard (ASC Topic 840), and the new requirements have been applied to revenue contracts with campaign start dates on or after January 1, 2019. Because the definition of a lease is more restrictive under the new standard, fewer of our new outdoor advertising contracts meet the definition of a lease for accounting purposes, resulting in an increase in the percentage of revenue that is categorized as revenue from contracts with customers as compared to the prior year.services.

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~Disaggregation of~~

Deferred Revenue

The following table shows, by segment, revenue from contracts with customers disaggregated by geographical region, revenue from leases and total revenue for the three months ended March 31, 2019 and 2018:

(In thousands) iHM
Americas Outdoor⁽¹⁾

International Outdoor⁽¹⁾
Other Eliminations Consolidated
Three Months Ended March 31, 2019
Revenue from contracts with customers:
  United States $ 759,400
$ 131,431
$ —
$ 30,190
$ (269 ) $ 920,752
  Other Americas 1,027
896
13,645
—
—
15,568
  Europe 2,351
—
201,205
—
—
203,556
  Asia-Pacific and other 2,622
—
53,231
—
—
55,853
     Total 765,400
132,327
268,081
30,190
(269 ) 1,195,729
Revenue from leases 410
140,395
46,313
—
(948 ) 186,170
Revenue, total $ 765,810
$ 272,722
$ 314,394
$ 30,190
$ (1,217 ) $ 1,381,899

Three Months Ended March 31, 2018
Revenue from contracts with customers:
  United States $ 736,940
$ 96,147
$ —
$ 28,218
$ (313 ) $ 860,992
  Other Americas 1,180
650
12,123
—
—
13,953
  Europe 2,601
—
187,216
—
—
189,817
  Asia-Pacific and other 2,957
—
3,012
—
—
5,969
     Total 743,678
96,797
202,351
28,218
(313 ) 1,070,731
Revenue from leases 890
159,050
140,200
—
(1,223 ) 298,917
Revenue, total $ 744,568
$ 255,847
$ 342,551
$ 28,218
$ (1,536 ) $ 1,369,648


⁽¹⁾	All of the Company’s outdoor advertising structures, which may be owned or leased, are used to generate revenue. Such revenue may be classified as revenue from contracts with customers or revenue from leases depending on the terms of the contract, as previously described.

~~Revenue from Contracts with Customers~~

The following tables show the Company’s ~~beginning and ending accounts receivable and~~ deferred revenue ~~balances from contracts with customers:~~

Three Months Ended March 31,
(In thousands) 2019 2018
Accounts receivable, net of allowance, from contracts with customers:
  Beginning balance $ 1,236,779
$ 1,195,145
  Ending balance $ 1,169,518
$ 1,035,939

Deferred revenue from contracts with customers:
  Beginning balance $ 188,604
$ 184,000
  Ending balance $ 212,286
$ 211,582

~~During the three months ended March 31, 2019 and 2018, respectively, the Company recognized $97.3 million and $83.3 million of revenue that was included in the deferred revenue~~balance from contracts with customers, ~~balance at the beginning of the period.~~excluding discontinued operations:



	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,
(In thousands)	2020			2019
Deferred revenue from contracts with customers:
Beginning balance⁽¹⁾	$	162,068		$	148,720
Revenue recognized, included in beginning balance	(80,055		)	(68,927		)
Additions, net of revenue recognized during period, and other	93,308			75,321
Ending balance	175,321			$	155,114


⁽¹⁾	Deferred revenue from contracts with customers, which excludes other sources of deferred revenue that are not related to contracts with customers, is included within deferred revenue and other long-term liabilities on the Consolidated Balance Sheets, depending upon when revenue is expected to be recognized.

The Company’s contracts with customers generally have terms of one year or less; however, as of March 31, ~~2019,~~2020, the Company expects to recognize ~~$316.7~~$233.7 million of revenue in future periods for remaining performance obligations from current contracts

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years. Commissions related to the Company’s media representation business have been excluded from this amount as they are contingent upon future sales.

Revenue from Leases

As of March 31, ~~2019,~~2020, the future lease payments to be received by the Successor Company are as follows:



(In thousands)
2020	$	1,109
2021	1,252
2022	858
2023	793
2024	694
Thereafter	10,021
Total	$	14,727

(In thousands)
2019 $ 397,444
2020 48,769
2021 19,832
2022 10,505
2023 3,138
Thereafter 15,432
Total $ 495,120

Note that the future lease payments disclosed are limited to the non-cancelable period of the lease and, for contracts that require the customer to pay a significant fee to terminate the contract such that the customer is considered reasonably certain not to exercise this option, periods beyond the termination option. Payments scheduled for periods beyond a termination option are not included for contracts that allow cancellation by the customer without a significant fee.

NOTE 34 – LEASES

The Company enters into operating lease contracts for land, buildings, structures and other equipment. Arrangements are evaluated at inception to determine whether such arrangements contain a lease. Operating leases primarily include land and building lease contracts and leases of radio towers and contracts for the use of space on floors, walls and exterior locations on buildings. Arrangements in which wall space is used are considered to be lease contracts if all other required elements of a lease contract are present. The Company assessed certain international transit contracts under ASC 842, which historically were determined to be leases, and concluded that the arrangements did not meet the definition of leases under the new leasing standard. In accordance with the transition guidance of ASC 842, such arrangements are included in the Company’s balance sheet as of January 1, 2019. The majority of the Company's transit contracts do not meet the definition of a lease due to substantive substitution rights within those contracts.towers. Arrangements to lease building space consist primarily of the rental of office space, but may also include leases of other equipment, including automobiles and copiers. Operating leases are reflected on the Company's balance sheet within Operating lease right-of-use assets ("ROU assets") and the related short-term and long-term liabilities are included within Current and Noncurrent operating lease liabilities, respectively. As of March 31, 2019, a portion of the Company's operating lease liabilities relate to lease contracts entered into prior to the Petition Date. As such, these liabilities are included within Liabilities subject to compromise. See Note 12 - ~~Liabilities Subject to Compromise~~ ~~for more information.~~

The Company's finance leases are included within Property, plant and equipment with the related liabilities included within Long-term ~~debt or within Liabilities subject to compromise.~~debt.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term.

Certain of the Company's operating lease agreements include rental payments based on a percentage of revenue and others include rental payments adjusted periodically for inflationary changes. Percentage rent contracts, in which lease expense is calculated as a percentage of advertising revenue, and payments due to changes in inflationary adjustments are included within variable rent expense, which is accounted for separately from periodic straight-line lease expense. Amounts related to insurance and property taxes in lease arrangements when billed on a pass-through basis are allocated to the lease and non-lease components of the lease based on their relative standalone selling prices. Internationally, the Company is commonly assessed VAT on its contracts, which is treated as a nonlease component.

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

Many operating lease contracts expire; however, the Company may continue to operate the leased assets after the rights and obligations of the lease agreements have expired. Such contracts, once expired, are not considered to be leases and future expected payments are not included in operating lease liabilities or ROU assets. Many of the Company's leases entered into in connection with advertising structures provide options to extend the terms of the agreements. Generally, renewal periods are excluded from minimum lease payments when calculating the lease liabilities as, for most leases, the Company does not consider exercise of such options to be reasonably certain. As a result, unless a renewal option is considered reasonably assured, the optional terms and related payments are not included within the lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The implicit rate within the Company's lease agreements is generally not determinable. As such, the Company uses the incremental borrowing rate ("IBR") to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC 842, is "the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment."

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~The following table provides the components of lease expense included within the Consolidated Statement of Comprehensive Loss for the three months ended March 31, 2019:~~

(In thousands) Three Months Ended
March 31, 2019
Operating lease expense $ 168,461
Variable lease expense 31,891

The following table provides the weighted average remaining lease term and the weighted average discount rate for the Company's leases as of March 31, 2019. The weighted average discount rate is affected by the operating leases entered into by the iHM entities, which are Debtors in the Chapter 11 Cases.



	~~March 31,~~ ~~2019~~
~~Operating lease weighted average remaining lease term (in years)~~	~~10.0~~
~~Operating lease weighted average discount rate~~	~~12.44~~	%

~~As of March 31, 2019, the Company’s future maturities of operating lease liabilities were as follows:~~

(In thousands)
2019 $ 471,907
2020 550,241
2021 474,264
2022 387,920
2023 321,722
Thereafter 2,153,963
Total lease payments $ 4,360,017
Less: Effect of discounting 1,894,444
Total operating lease liability $ 2,465,573

The following table provides supplemental cash flow information related to ~~leases:~~leases for the three months ended March 31, 2020 (Successor) and the three months ended March 31, 2019 (Predecessor):


			Successor Company		Predecessor Company
			Three Months Ended March 31,		Three Months Ended March 31,
(In thousands)	Three Months Ended March 31, 2019		2020		2019

Cash paid for amounts included in measurement of operating lease liabilities	$	189,472	$	30,613	$	32,895
Lease liabilities arising from obtaining right-of-use assets¹	$	2,565,084
Lease liabilities arising from obtaining right-of-use assets⁽¹⁾			$	7,620	$	445,142

¹⁽¹⁾Lease liabilities from obtaining right-of-use assets include transition liabilities upon adoption of ASC 842, as well as new leases entered into during the three months ended March 31, ~~2019.~~2020 (Successor) and the three months ended March 31, 2019 (Predecessor).

The Company reflects changes in the lease liability and changes in the ROU asset on a net basis in the Statements of Cash Flows.

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

NOTE 45– PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL

Property, Plant and Equipment

The Company’s property, plant and equipment consisted of the following classes of assets as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively:



(In thousands)	Successor Company
	March 31, 2020		December 31, 2019
Land, buildings and improvements	$	386,084	$	385,017
Towers, transmitters and studio equipment	159,650		156,739
Furniture and other equipment	375,592		361,527
Construction in progress	25,051		21,287
	946,377		924,570
Less: accumulated depreciation	110,025		77,694
Property, plant and equipment, net	$	836,352	$	846,876

(In thousands) March 31,
2019 December 31,
2018
Land, buildings and improvements $ 572,362
$ 572,904
Structures 2,833,051
2,835,411
Towers, transmitters and studio equipment 366,500
365,991
Furniture and other equipment 818,278
793,756
Construction in progress 112,442
116,839
4,702,633
4,684,901
Less: accumulated depreciation 2,961,395
2,893,761
Property, plant and equipment, net $ 1,741,238
$ 1,791,140

Indefinite-lived Intangible Assets

The Company’s indefinite-lived intangible assets consist of ~~Federal Communications Commission (“FCC”)~~FCC broadcast licenses in its iHM segment and billboard permits in its Americas outdoor advertising segment. Due to significant differences in both business practices and regulations, billboards in the International outdoor segment are subject to long-term, finite contracts unlike the Company’s permits in the United States. Accordingly, there are no indefinite-lived intangible assets in the International outdoorAudio segment.

The Company performs its annual impairment test on goodwill and indefinite-lived intangible assets, including ~~Federal Communication Commission ("FCC")~~FCC licenses, as of July 1 of each year. In addition, the Company tests for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company applied fresh start accounting as of May 1, 2019 in connection with its emergence from Chapter 11 bankruptcy which required stating the Company’s intangible assets at estimated fair value. Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence. The economic downturn in March 2020 and the COVID-19 pandemic had an adverse impact on the trading values of the Company’s publicly-traded debt and equity and on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic has had a negative impact on the Company's forecasted future cash flows. As a result, the Company performed an interim impairment test as of March 31, 2020 on its indefinite-lived FCC licenses.

For purposes of initial recording in fresh start accounting and for annual impairment testing purposes, our FCC licenses are valued using the direct valuation approach, with the key assumptions being forecasted market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average asset within a market.

In estimating the fair value of its FCC licenses, the Company obtained the most recent broadcast radio industry revenue projections which consider the impact of COVID-19 on future broadcast radio advertising revenue. Such projections reflect a significant and negative impact from COVID-19. In addition to using these broadcast radio industry revenue projections, the Company used various sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of March 31, 2020. As a result of COVID-19, the United States economy is undergoing a period of economic disruption and uncertainty, which has caused, among other things, lower consumer and business spending. The uncertainty surrounding the demand for advertising negatively impacted the key assumptions used in the discounted cash flow models used to value the Company's FCC licenses. Considerations in developing these assumptions included the extent of the economic downturn, ranges of expected timing of recovery, discount rates and other factors. As a result of the Company’s assessment the estimated fair value of FCC licenses was determined to be below their carrying values. As a result, during the three months ended March 31, 2020, the Successor Company recognized a non-cash impairment charge of $502.7 million on its FCC licenses.

During the three months ended March 31, 2019, the Predecessor Company recognized non-cash impairment charges of $91.4 million in relation to indefinite-lived FCC licenses as a result of an increase in the ~~Company's~~ weighted average cost of ~~capital.~~capital used in performing the annual impairment test.

Other Intangible Assets

Other intangible assets ~~include~~consists of definite-lived intangible assets, ~~and permanent easements. The Company’s definite-lived intangible assets~~which primarily include ~~transit~~customer and ~~street furniture contracts,~~advertiser relationships, talent and representation contracts, ~~customer~~trademarks and ~~advertiser relationships, and site leases~~tradenames and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time that the assets are expected to contribute directly or indirectly to the Company’s future cash flows. ~~Permanent easements are indefinite-lived intangible assets which include certain rights to use real property not owned by the Company.~~ The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at amortized cost.

The Company tests for possible impairment of other intangible assets whenever events and circumstances indicate that they might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.

The Company applied fresh start accounting as of May 1, 2019 in connection with its emergence from Chapter 11 bankruptcy which required stating the Company’s intangible assets at estimated fair value. Such fair values recorded in fresh start accounting reflected the economic conditions in place at the time of emergence. The economic downturn in March 2020 and the COVID-19 pandemic had an adverse impact on the Company's first quarter 2020 results, and the continuing uncertainty surrounding the duration and magnitude of the economic impact of the pandemic has had a negative impact on the Company's forecasted future cash flows. As a result, the Company performed an interim impairment test as of March 31, 2020 on its other intangible assets. Based on the Company’s test of recoverability using estimated undiscounted future cash flows, the carrying values of the Company’s definite-lived intangible assets were determined to be recoverable, and no impairment was recognized.

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively:



(In thousands)	Successor Company
	March 31, 2020					December 31, 2019
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Customer / advertiser relationships	1,629,231		(157,134		)	1,629,236		(114,280		)
Talent and other contracts	375,399		(46,391		)	375,399		(33,739		)
Trademarks and tradenames	321,977		(29,784		)	321,977		(21,661		)
Other	21,394		(2,457		)	21,394		(1,786		)
Total	$	2,348,001	$	(235,766	)	$	2,348,006	$	(171,466	)

(In thousands) March 31, 2019 December 31, 2018
Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Transit, street furniture and other outdoor
contractual rights $ 528,232
$ (443,963 ) $ 528,185
$ (440,228 )
Customer / advertiser relationships 1,237,115
(1,210,498 ) 1,249,128
(1,208,056 )
Talent contracts 164,932
(150,289 ) 164,933
(148,578 )
Representation contracts 77,508
(72,419 ) 77,508
(70,829 )
Permanent easements 163,341
—
163,317
—
Other 394,923
(249,018 ) 382,897
(244,993 )
Total $ 2,566,051
$ (2,126,187 ) $ 2,565,968
$ (2,112,684 )

Total amortization expense related to definite-lived intangible assets for the Successor Company for the three months ended March 31, 2020 was $64.3 million. Total amortization expense related to definite-lived intangible assets for the Predecessor Company for the three months ended March 31, 2019 ~~and 2018~~ was ~~$13.9 million and $47.0 million, respectively.~~$9.7 million.

As acquisitions and dispositions occur in the future, amortization expense may vary. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:



(In thousands)
2021	$	256,654
2022	255,874
2023	247,521
2024	246,831
2025	209,046

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(In thousands)
2020 $ 43,788
2021 38,457
2022 32,707
2023 24,849
2024 20,983

Goodwill

The following table presents the changes in the carrying amount of goodwill:



(In thousands)	Audio			Audio & Media Services			Consolidated
Balance as of December 31, 2018 (Predecessor)	$	3,330,922		$	81,831		$	3,412,753
Acquisitions	—			2,767			2,767
Foreign currency	—			(28		)	(28		)
Balance as of May 1, 2019 (Predecessor)	$	3,330,922		$	84,570		$	3,415,492
Impact of fresh start accounting	(111,712		)	19,585			(92,127		)


Balance as of May 2, 2019 (Successor)	$	3,219,210		$	104,155		$	3,323,365
Acquisitions	4,637			—			4,637
Dispositions	(9,466		)	—			(9,466		)
Foreign currency	—			(1		)	(1		)
Other	7,087			—			7,087
Balance as of December 31, 2019 (Successor)	$	3,221,468		$	104,154		$	3,325,622
Impairment	(1,224,374		)	—			(1,224,374		)
Foreign currency	—			(44		)	(44		)
Balance as of March 31, 2020 (Successor)	$	1,997,094		$	104,110		$	2,101,204

Goodwill Impairment

At least annually, the Company performs its impairment test for each reporting unit’s goodwill. The Company also tests goodwill at interim dates if events or changes in ~~each~~circumstances indicate that goodwill might be impaired.

As described in Note 1, the economic disruption as a result of COVID-19 had a significant impact to the trading values of the Company’s ~~reportable segments:~~publicly-traded debt and equity and on the Company's results in the latter half of the month ended March 31, 2020. In addition, the Company expects that the pandemic will continue to impact the operating and economic environment of our customers and will impact the near-term spending decisions of advertisers. As a result, the Company performed an interim impairment test on its indefinite-lived intangible assets as of March 31, 2020.

The goodwill impairment test requires measurement of the fair value of the Company's reporting units, which is compared to the carrying value of the reporting units, including goodwill. Each reporting unit is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value. Assessing the recoverability of goodwill requires estimates and assumptions about sales, operating margins, growth rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. As with the impairment testing performed on the Company’s FCC licenses described above, the significant deterioration in market conditions and uncertainty in the markets impacted the assumptions used to estimate the discounted future cash flows of the Company’s reporting units for purposes of performing the interim goodwill impairment test. There are inherent uncertainties related to these factors and management’s judgment in applying these factors.

As discussed above, the carrying values of the Company’s reporting units were based on estimated fair values determined upon our emergence from bankruptcy on May 1, 2019, and the rapid deterioration in economic conditions resulting from the COVID-19 pandemic resulted in lower estimated fair values determined in connection with our interim goodwill impairment testing as of March 31, 2020. The estimated fair value of one of the Company's reporting units was below its carrying value, including goodwill. As a result, the Company recognized a non-cash impairment charge of $1.2 billion to reduce goodwill. The macroeconomic factors discussed above had an adverse effect on the Company's estimated cash flows used in the discounted cash flow model.

(In thousands) iHM Americas Outdoor International Outdoor Other Consolidated
Balance as of December 31, 2017 $ 3,255,208
$ 507,819
$ 206,224
$ 81,831
$ 4,051,082
Acquisitions 77,320
—
—
—
77,320
Dispositions (1,606 ) —
—
—
(1,606 )
Foreign currency —
—
(8,040 ) —
(8,040 )
Balance as of December 31, 2018 $ 3,330,922
$ 507,819
$ 198,184
$ 81,831
$ 4,118,756
Acquisitions 2,767
—
—
—
2,767
Foreign currency (27 ) —
(3,184 ) —
(3,211 )
Balance as of March 31, 2019 $ 3,333,662
$ 507,819
$ 195,000
$ 81,831
$ 4,118,312

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

While management believes the estimates and assumptions utilized to calculate the fair value of the Company's tangible and intangible long-lived assets, indefinite-lived FCC licenses and reporting units are reasonable, it is possible a material change could occur to the estimated fair value of these assets. Uncertainty regarding the full extent of the economic downturn as a result of COVID-19, as well as the timing of any recovery, may result in the Company's actual results not being consistent with its estimates, and the Company could be exposed to future impairment losses that could be material to its results of operations.

NOTE 56 – LONG-TERM DEBT

Long-term debt outstanding for the Successor Company as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 consisted of the following:

(In thousands) March 31,
2019 December 31,
2018
Senior Secured Credit Facilities $ —
$ —
Debtors-in-Possession Facility⁽¹⁾
—
—
9.0% Priority Guarantee Notes Due 2019 —
—
9.0% Priority Guarantee Notes Due 2021 —
—
11.25% Priority Guarantee Notes Due 2021 —
—
9.0% Priority Guarantee Notes Due 2022 —
—
10.625% Priority Guarantee Notes Due 2023 —
—
CCO Receivables Based Credit Facility Due 2023⁽²⁾
—
—
Other secured subsidiary debt⁽³⁾
3,828
3,882
Total consolidated secured debt 3,828
3,882

14.0% Senior Notes Due 2021 —
—
Legacy Notes⁽⁴⁾
—
—
CCWH Senior Notes due 2022 2,725,000
2,725,000
CCWH Subordinated Notes due 2020⁽⁵⁾
—
2,200,000
CCWH Subordinated Notes due 2024⁽⁵⁾
2,235,000
—
Clear Channel International B.V. Senior Notes due 2020 375,000
375,000
Other subsidiary debt 46,510
46,105
Purchase accounting adjustments and original issue discount (867 ) (739 )
Long-term debt fees (44,322 ) (25,808 )
Long-term debt, net subject to compromise⁽⁶⁾
15,143,713
15,149,477
Total debt, prior to reclassification to Liabilities subject to compromise 20,483,862
20,472,917
Less: Current portion 46,744
46,332
Less: Amounts reclassified to Liabilities subject to compromise 15,143,713
15,149,477
Total long-term debt $ 5,293,405
$ 5,277,108



(In thousands)	Successor Company
	March 31, 2020			December 31, 2019
Term Loan Facility due 2026⁽¹⁾	$	2,096,018		$	2,251,271
Asset-based Revolving Credit Facility due 2023⁽²⁾	350,000			—
6.375% Senior Secured Notes due 2026	800,000			800,000
5.25% Senior Secured Notes due 2027	750,000			750,000
4.75% Senior Secured Notes due 2028	500,000			500,000
Other secured subsidiary debt⁽³⁾	20,541			20,992
Total consolidated secured debt	4,516,559			4,322,263

8.375% Senior Unsecured Notes due 2027	1,450,000			1,450,000
Other unsecured subsidiary debt	6,182			12,581
Long-term debt fees	(19,106		)	(19,428		)
Total debt	5,953,635			5,765,416
Less: Current portion	29,969			8,912
Total long-term debt	$	5,923,666		$	5,756,504

(1)

~~The Debtors-in-Possession Facility (the "DIP Facility"), which matures~~On February 3, 2020, iHeartCommunications made a $150.0 million prepayment using cash on ~~the earlier of the emergence date from the Chapter 11 Cases or June 14, 2019, provides for borrowings of up to $450.0 million. The DIP Facility also includes a feature to convert~~hand and entered into an ~~exit facility at emergence, upon meeting~~agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of 3.00%, or the Base Rate (as defined in the credit agreement) plus a margin of 2.00% and to modify certain ~~conditions. As of March 31, 2019,~~covenants contained in the ~~Company had a borrowing base of $426.8 million under iHeartCommunications' DIP Facility, had no outstanding borrowings, had $59.0 million of outstanding letters of~~ credit ~~and had an availability block requirement of $37.5 million, resulting in $330.3 million of excess availability.~~agreement.

(2)

~~The receivables based credit facility provides for revolving credit commitments~~On March 13, 2020, iHeartCommunications borrowed $350.0 million under the ABL Facility, the proceeds of ~~up to $125.0 million.~~which were invested as cash on the Balance Sheet. As of March 31, ~~2019,~~2020, the ABL Facility had a facility ~~had $85.5~~size of $450.0 million and $350.0 million of outstanding borrowings and $47.3 million of outstanding letters of credit, ~~outstanding and~~resulting in $52.7 million of availability. Amounts available under the ABL Facility are calculated using a borrowing base calculated by reference to our outstanding accounts receivable. To the extent decreases in our accounts receivable result in the borrowing base decreasing to an amount below the amount drawn, we may be required to make a partial repayment of ~~$116.2 million, resulting in $30.7 million of excess availability. Certain additional restrictions, including a springing financial covenant, take effect at decreased levels of excess availability.~~amounts outstanding under our ABL Facility.


(3)	Other secured subsidiary debt ~~matures~~consists of finance lease obligations maturing at various dates from ~~2019~~2021 through 2045.

~~(4)~~

iHeartCommunications' Legacy Notes, all of which were issued prior to the acquisition of iHeartCommunications by the Company in 2008, consist of $175.0 million of Senior Notes that matured on June 15, 2018, $300.0 million of Senior Notes that mature in 2027 and $57.1 million of Senior Notes due 2016 held by a subsidiary of the Company that remain outstanding but are eliminated for purposes of consolidation of the Company’s financial statements.

~~(5)~~

On February 4, 2019, Clear Channel Worldwide Holdings, Inc., a subsidiary of CCOH (“CCWH”), delivered a conditional notice of redemption calling all of its outstanding $275.0 million aggregate principal amount of 7.625% Series A Senior Subordinated Notes due 2020 (the “Series A CCWH Subordinated Notes”) and $1,925.0 million aggregate principal amount of 7.625% Series B Senior Subordinated Notes due 2020 (the “Series B CCWH Subordinated Notes” and together with the Series A CCWH Subordinated Notes, the “CCWH Subordinated Notes”) for redemption on March 6, 2019. The redemption was conditioned on the closing of the offering of $2,235.0 million of newly-issued 9.25% Senior Subordinated Notes due 2024 (the "New CCWH Subordinated Notes"). At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to pay and discharge the principal amount outstanding, plus accrued and unpaid interest on

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

the CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment of the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH Subordinated Notes in accordance with their terms and the trustee acknowledged such satisfaction and discharge. As a result of the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes were released from their remaining obligations under the indentures and the CCWH Subordinated Notes.

~~(6)~~

In connection with the Company's Chapter 11 Cases, the $6,300.0 million outstanding under the Senior Secured Credit Facilities, the $1,999.8 million outstanding under the 9.0% Priority Guarantee Notes due 2019, the $1,750.0 million outstanding under the 9.0% Priority Guarantee Notes due 2021, the $870.5 million of 11.25% Priority Guarantee Notes due 2021, the $1,000.0 million outstanding under the 9.0% Priority Guarantee Notes due 2022, the $950.0 million outstanding under the 10.625% Priority Guarantee Notes due 2023, $6.0 million outstanding Other Secured Subsidiary debt, the $1,781.6 million outstanding under the 14.0% Senior Notes due 2021, the $475.0 million outstanding under the Legacy Notes and $10.8 million outstanding Other Subsidiary Debt have been reclassified to Liabilities subject to compromise in the Company's Consolidated Balance Sheet as of March 31, 2019. As of the Petition Date, the Company ceased making principal and interest payments, and ceased accruing interest expense in relation to long-term debt reclassified as Liabilities subject to compromise.

The Successor Company’s weighted average interest rate was ~~9.4%~~5.5% and ~~9.2%~~6.4% as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately ~~$14.9~~$5.2 billion and ~~$14.0~~$6.1 billion as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The trading value of the Company’s publicly traded debt decreased significantly in March 2020 as a result of the market’s reaction to COVID-19. Under the fair value hierarchy established by ASC 820-10-35, the market value of the Successor Company’s debt is classified as either Level 1 or Level 2.

On February 3, 2020, iHeartCommunications entered into an amendment to the credit agreement governing its Term Loan Facility due 2026. The amendment reduces the interest rate to LIBOR plus a margin of 3.00% (from LIBOR plus a margin of 4.00%), or the Base Rate (as defined in the credit agreement) plus a margin of 2.00% (from Base Rate plus a margin of 3.00%) and modifies certain covenants contained in the Credit Agreement.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In connection with the Term Loan Facility amendment, iHeartCommunications also prepaid at par $150.0 million of borrowings outstanding under the Term Loan Facility with cash on hand. Under the terms of the credit agreement, iHeartCommunications is required to make quarterly principal payments of approximately $5.25 million.

Mandatorily Redeemable Preferred Stock

On the Effective Date, in accordance with the Plan of Reorganization, iHeart Operations issued 60,000 shares of its Series A Perpetual Preferred Stock, par value $0.001 per share (the "iHeart Operations Preferred Stock"), having an aggregate initial liquidation preference of $60.0 million for a cash purchase price of $60.0 million. The iHeart Operations Preferred Stock was purchased by a third party investor. As of March 31, 2020, the liquidation preference of the iHeart Operations Preferred Stock was $60.0 million. As further described below, the iHeart Operations Preferred Stock is mandatorily redeemable for cash at a date certain and therefore is classified as a liability in the Company's balance sheet.

Holders of the iHeart Operations Preferred Stock are entitled to receive, as declared by the board of directors of iHeart Operations, in respect of each share, cumulative dividends accruing daily and payable quarterly. Dividends, if declared, will be payable on March 31, June 30, September 30 and December 31 of each year (or on the next business day if such date is not a business day). During the three months ended March 31, 2020 the Company recognized $1.8 million of interest expense related to dividends on mandatorily redeemable preferred stock.

Other than as set forth below, iHeart Operations may not redeem the iHeart Operations Preferred Stock at its option prior to the third anniversary of the issue date of the iHeart Operations Preferred Stock. Upon consummation of certain equity offerings, iHeart Operations may, at its option, redeem all or a part of the iHeart Operations Preferred Stock for the liquidation preference plus a make-whole premium. At any time on or after the third anniversary of the issue date, the iHeart Operations Preferred Stock may be redeemed at the option of iHeart Operations, in whole or in part, for cash at a redemption price equal to the liquidation preference per share.

The shares of iHeart Operations Preferred Stock include repurchase rights, pursuant to which the holders may require iHeartMedia or iHeartCommunications to purchase the iHeart Operations Preferred Stock after the fifth anniversary of the issue date.

On the tenth anniversary of the issue date, the shares of iHeart Operations Preferred Stock will be subject to mandatory redemption for an amount equal to the liquidation preference.

Surety Bonds, Letters of Credit and Guarantees

As of March 31, ~~2019,~~2020, the Successor Company and its subsidiaries had outstanding surety bonds and commercial standby letters of credit ~~and bank guarantees~~ of ~~$74.2 million, $144.5~~$16.7 million and ~~$37.3~~$47.3 million, respectively. ~~A portion of the outstanding bank guarantees were supported by $16.9 million of cash collateral.~~ These surety bonds and letters of credit ~~and bank guarantees~~ relate to various operational matters including insurance, ~~bid, concession~~lease and performance bonds as well as other items.

NOTE 67 – COMMITMENTS AND CONTINGENCIES

The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.

Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial disputes; defamation matters; employment and benefits related claims; governmental fines; intellectual property claims; and tax disputes.

~~Chapter 11 Cases~~Alien Ownership Restrictions and FCC Petition for Declaratory Ruling

~~iHeartCommunications' filing~~The Communications Act and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the ~~Chapter 11 Cases constitutes an event~~licensee of ~~default that accelerated its obligations under its debt agreements. Due to~~a radio broadcast station unless the Chapter 11 Cases, however, the creditors' ability to exercise remedies under iHeartCommunications' debt agreements were stayed as of March 14, 2018, the Petition Date, and continue to be stayed. On March 21, 2018, Wilmington Savings Fund Society, FSB ("WSFS"), solely in its capacity as successor indenture trustee to the 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027, and not in its individual capacity, filed an adversary proceeding against the Company in the Chapter 11 Cases. In the complaint, WSFS alleged, among other things, that the "springing lien" provisions of the priority guarantee notes indentures and the priority guarantee notes security agreements amounted to "hidden encumbrances" on the Company's property, to which the holders of the 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027 were entitled to "equal and ratable" treatment. On March 26, 2018, Delaware Trust Co. ("Delaware Trust"), in its capacity as successor indenture trustee to the 14% Senior Notes due 2021, filed a motion to intervene as a plaintiff in the adversary proceeding filed by WSFS. In the complaint, Delaware Trust alleged, among other things, that the indenture governing the 14% Senior Notes due 2021 also has its own "negative pledge" covenant, and, therefore, to the extent the relief sought by WSFS in its adversary proceeding is warranted, the holders of the 14% Senior Notes due 2021 are also entitled to the same "equal and ratable" liens on the same property. On April 6, 2018, the Company filed a motion to dismiss the adversary proceeding and a hearing on such motion was held on MayFCC finds

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~7, 2018. We answered the complaint and completed discovery. The trial was held on October 24, 2018. On January 15, 2019, the Bankruptcy Court entered judgment~~greater foreign ownership is in the ~~Company's favor denying all relief sought by WSFS and all other parties. Pursuant~~public interest (the “Foreign Ownership Rule”). Under the Plan of Reorganization, the Company committed to file a ~~settlement (the “Legacy Plan Settlement”~~Petition for Declaratory Ruling ("PDR") ~~with WSFS and certain consenting Legacy Noteholders of all issues related~~requesting the FCC to ~~confirmation~~permit up to 100% of the Company's ~~plan of reorganization, upon~~voting and equity to be owned by non-U.S. individuals and entities, but the FCC’s granting the PDR was not a condition to the Company's ~~confirmed plan of reorganization becoming effective, this adversary proceeding shall be deemed withdrawn and/or dismissed, with respect to all parties thereto, with prejudice and~~emergence.

The equity allocation mechanism (“Equity Allocation Mechanism”) set forth in ~~its entirety.~~

~~On October 9, 2018, WSFS, solely in its capacity as successor indenture trustee to~~ the 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027, and not in its individual capacity, filed an adversary proceeding against Clear Channel Holdings, Inc. (“CCH”) and certain shareholders of iHeartMedia. The named shareholder defendants are Bain Capital LP; Thomas H. Lee Partners L.P.; Abrams Capital L.P.; and Highfields Capital Management L.P. In the complaint, WSFS alleged, among other things, that the shareholder defendants engaged in a “pattern of inequitable and bad faith conduct, including the abuse of their insider positions to benefit themselves at the expense of third-party creditors including particularly the Legacy Noteholders.” The complaint asks the court to grant relief in the form of equitable subordination of the shareholder defendants’ term loan, priority guarantee notes and 2021 notes claims to any and all claims of the legacy noteholders. In addition, the complaint seeks to have any votes to accept the Fourth Amended Plan of Reorganization ~~by Abrams~~was intended to enable the Company to comply with the Foreign Ownership Rule and ~~Highfields~~other FCC ownership restrictions in connection with emergence. The Equity Allocation Mechanism imposed an obligation on ~~account~~each of their 2021 notes claims, and any votes to accept the Fourth Amended Plan of Reorganization by defendant CCH on account of its junior notes claims, to be designated and disqualified. The Court held a pre-trial conference and oral argument on October 18, 2018. Pursuant to the Legacy Plan Settlement, upon the Company's ~~confirmed Plan of Reorganization becoming effective, this adversary proceeding shall be deemed withdrawn and/or dismissed, with respect to all parties thereto, with prejudice and in its entirety.~~

~~Stockholder Litigation~~

On May 9, 2016, a stockholder of CCOH filed a derivative lawsuit in the Court of Chancery of the State of Delaware, captioned GAMCO Asset Management Inc. v. iHeartMedia, Inc. et al., C.A. No. 12312-VCS. The complaint named as defendants the Company, iHeartCommunications, Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P., the Company's private equity sponsors and majority owners (together, the "Sponsor Defendants"), and the members of CCOH's board of directors. CCOH also was named as a nominal defendant. The complaint alleged that CCOH had been harmed by the intercompany agreements with iHeartCommunications, CCOH’s lack of autonomy over its own cash and the actions of the defendants in serving the interests of the Company, iHeartCommunications and the Sponsor Defendants to the detriment of CCOH and its minority stockholders. Specifically, the complaint alleged that the defendants breached their fiduciary duties by causing CCOH to: (i) continue to loan cash to iHeartCommunications under the intercompany note at below-market rates; (ii) abandon its growth and acquisition strategies in favor of transactions that would provide cash to the Company and iHeartCommunications; (iii) issue new debt in the CCIBV note offering (the "CCIBV Note Offering") to provide cash to the Company and iHeartCommunications through a dividend; and (iv) effect the sales of certain outdoor markets in the U.S. (the "Outdoor Asset Sales") allegedly to provide cash to the Company and iHeartCommunications through a dividend. The complaint also alleged that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the directors' breaches of their fiduciary duties. The complaint further alleged that the Company, iHeartCommunications and the Sponsor Defendants were unjustly enriched as a result of these transactions and that these transactions constituted a waste of corporate assets for which the defendants are liable to CCOH. The plaintiff sought, among other things, a ruling that the defendants breached their fiduciary duties to CCOH and that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the CCOH board of directors' breaches of fiduciary duty, rescission of payments made by CCOH to iHeartCommunications and its affiliates pursuant to dividends declaredformer claimholders in connection with the ~~CCIBV Note Offering and Outdoor Asset Sales, and an order requiring~~Chapter 11 Cases (the "Claimholders") to provide written certification sufficient for the Company ~~iHeartCommunications~~to determine whether issuance of common stock to such Claimholders would cause the Company to violate the Foreign Ownership Rule, and restricted the ~~Sponsor Defendants~~Company from issuing common stock to ~~disgorge all profits they have received as~~Claimholders such that it would cause the Company to exceed an aggregate alien ownership or voting percentage of 22.5 percent (the “22.5 Percent Threshold”).

After emerging from bankruptcy, the Company discovered that a group of Claimholders that had certified to having no foreign ownership or voting control in connection with the Equity Allocation Mechanism had subsequently undergone a separate merger transaction without our knowledge or control. As a result of this merger, these Claimholders’ interests in iHeartMedia (amounting to approximately nine percent of the ~~alleged fiduciary misconduct.~~

Company's issued and outstanding Class A common stock) can be voted by a U.S. subsidiary of a foreign parent. The Company notified the FCC of this development in writing promptly after discovering and confirming it. The FCC responded to the Company's notification on July 9, 2019, indicating that (1) the FCC has not determined that this development is contrary to the public interest, and (2) the FCC has deemed the Company to be in compliance with the FCC’s foreign ownership reporting rules, pending its decision on the Company's PDR. On July ~~20, 2016,~~25, 2019 the ~~defendants~~Company filed the PDR. The FCC requested public comment on the PDR, which comment period closed on March 26, 2020. The FCC subsequently has also referred the PDR to Team Telecom - the interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues. The Company cannot predict whether the FCC will issue a ~~motion~~ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to ~~dismiss plaintiff's verified stockholder derivative complaint~~have, or how long it will take to obtain such a ruling.

NOTE 8 – INCOME TAXES

Income Tax Benefit (Expense)

The Company’s income tax benefit (expense) from continuing operations for ~~failure to state a claim upon which relief can be granted. On November 23, 2016,~~ the ~~Court granted defendants' motion to dismiss all claims brought~~three months ended March 31, 2020 (Successor) and the three months ended March 31, 2019 (Predecessor), respectively, consisted of the following components:



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,
	2020			2019
Current tax benefit (expense)	$	(1,705	)	$	69,794
Deferred tax benefit (expense)	152,216			(8,600		)
Income tax benefit	$	150,511		$	61,194

The effective tax rate from continuing operations for the Successor Company for the three months ended March 31, 2020 was 8.2%. The effective tax rate for the period was primarily impacted by the ~~plaintiff. On December 19, 2016,~~impairment charges to non-deductible goodwill discussed in Note 1. The deferred tax benefit primarily consists of $125.5 million related to the ~~plaintiff filed a notice of appeal of~~FCC license impairment charges recorded during the ~~ruling.~~ period.

The ~~oral hearing on~~effective tax rate from continuing operations for the ~~appeal~~three months ended March 31, 2019 (Predecessor) was ~~held on October 11, 2017. On October 12, 2017, the Supreme Court of Delaware affirmed the lower court's ruling, dismissing the case.~~

~~On December 29, 2017, another stockholder of CCOH filed a derivative lawsuit~~224.6%. The 2019 effective tax rate was primarily impacted by forecasted changes in the Court of Chancery of the State of Delaware, captioned Norfolk County Retirement System, v. iHeartMedia, Inc., et al., C.A. No. 2017-0930-JRS. The complaint names as defendants the Company, iHeartCommunications, the Sponsor Defendants,valuation allowance recorded against deferred tax assets resulting from net operating loss carryforwards and the members of CCOH's board of directors. CCOH is named as a nominal defendant. The complaint alleges that CCOH has been harmed by the CCOH Board’s November 2017 decision to extend the maturity date of the intercompany revolving note (the “Third Amendment”) at what the complaint describesinterest expense limitation carryforwards in U.S. federal and certain state jurisdictions.

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

as far-below-market interest rates. Specifically, the complaint alleges that (i) the Company and Sponsor defendants breached their fiduciary duties by exploiting their position of control to require CCOH to enter the Third Amendment on terms unfair to CCOH; (ii) the CCOH Board breached their duty of loyalty by approving the Third Amendment and elevating the interests of the Company, iHeartCommunications and the Sponsor Defendants over the interests of CCOH and its minority unaffiliated stockholders; and (iii) the terms of the Third Amendment could not have been agreed to in good faith and represent a waste of corporate assets by the CCOH Board. The complaint further alleges that the Company, iHeartCommunications and the Sponsor defendants were unjustly enriched as a result of the unfairly favorable terms of the Third Amendment. The plaintiff is seeking, among other things, a ruling that the defendants breached their fiduciary duties to CCOH, a modification of the Third Amendment to bear a commercially reasonable rate of interest, and an order requiring disgorgement of all profits, benefits and other compensation obtained by defendants as a result of the alleged breaches of fiduciary duties.

On March ~~7, 2018,~~27, 2020 the ~~defendants filed a motion to dismiss plaintiff's verified derivative complaint for failure to state a claim upon~~CARES Act, which ~~relief can be granted. On March 16, 2018,~~included numerous tax provisions, was signed into law. While the Company ~~filed a Notice~~is continuing to evaluate the impact of ~~Suggestion of Pendency of Bankruptcy and Automatic Stay of Proceedings. On May 4, 2018, plaintiff filed its response~~the enacted tax provisions as additional guidance is provided, upon the Company's initial review the provision with the most significant impact on the Company’s income taxes is the increase to the ~~motion~~Section 163(j) interest deduction limitation and the ability to ~~dismiss. On June 26, 2018,~~elect to use the ~~defendants filed a reply brief in further support~~Company’s 2019 Adjusted Taxable Income (as defined under Section 163(j)) for purposes of ~~their motion to dismiss. Oral argument on~~calculating the ~~motion to dismiss was held on September 20, 2018.~~

~~On August 27, 2018, the same stockholder of CCOH that had filed a derivative lawsuit against the Company and others in 2016 (GAMCO Asset Management Inc.) filed a putative class action lawsuit~~2020 Section 163(j) limitation. There were several other tax provisions included in the ~~Court~~CARES Act allowing companies more flexibility in carrying back net operating losses generated in 2018, 2019 or 2020, temporarily eliminating the provision limiting net operating losses utilization to 80% of ~~Chancery~~taxable income and the acceleration of refunds available from alternative minimum tax credits. The Company does not expect to benefit from any of these provisions. In addition to the income tax provisions mentioned above, the CARES Act also included provisions impacting employment taxes allowing companies to defer the payment of the ~~State~~employee portion of ~~Delaware, captioned GAMCO Asset Management, Inc. v. Hendrix, et al., C.A. No. 2018-0633-JRS.~~certain employment taxes that would be due from the enactment date through January 1, 2021. The complaint names as defendants the Sponsor Defendants and the members of CCOH’s board of directors. The complaint alleges that minority shareholders in CCOH during the period November 8, 2017 to March 14, 2018 were harmedamounts deferred are due fifty percent by decisions of the CCOH Board and the intercompany note committee of the Board relating to the Intercompany Note. Specifically, the complaint alleges that (i) the members of the intercompany note committee breached their fiduciary duties by not demanding payment under the Intercompany Note and issuing a simultaneous dividend after a threshold tied to the Company’s liquidity had been reached; (ii) the CCOH Board breached their fiduciary duties by approving the Third Amendment rather than allowing the Intercompany Note to expire; (iii) the CCOH Board breached their fiduciary duties by not demanding payment under the Intercompany Note and issuing a simultaneous dividend after a threshold tied to the Company’s liquidity had been reached; (iv) the Sponsor Defendants breached their fiduciary duties by not directing the CCOH Board to permit the Intercompany Note to expire and to declare a dividend. The complaint further alleges that the Sponsor Defendants aided and abetted the Board’s alleged breach of fiduciary duties. The plaintiff seeks, among other things, a ruling that the CCOH Board, the intercompany note committee, and the Sponsor Defendants breached their fiduciary duties and that the Sponsor Defendants aided and abetted the Board’s breach of fiduciary duty; and an award of damages, together with pre- and post-judgment interests, to the putative class of minority shareholders.

In connection with the cash management arrangements with CCOH, iHeartCommunications maintains an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the "Intercompany Note"), which matures on May 15, 2019. As of December 31, ~~2017, the principal amount outstanding under the Intercompany Note was $1,067.6 million. As a result of the Chapter 11 Cases, CCOH wrote down the balance of the note~~2021 and fifty percent by ~~$855.6 million during the fourth quarter of 2017 to reflect the estimated recoverable amount of the Intercompany Note as of~~ December 31, ~~2017, based on CCOH management's best estimate of~~2022. In addition, the cash settlement amount. As of the Petition Date, the principal amount outstanding under the Intercompany Note was $1,031.7 million. As of March 31, 2019, the asset recorded in respect of the Intercompany Note on CCOH's balance sheet was $154.8 million. Pursuant toCARES Act included a provision providing an ~~order entered by the Bankruptcy Court, as of March 14, 2018, the balance of the Intercompany Note is frozen,~~Employee Retention tax credit, which would offset employment taxes, for qualified companies and following March 14, 2018, intercompany allocations that would have been reflected in adjustments to the balance of the Intercompany Note are instead reflected in an intercompany balance that accrues interest at a rate equal to the interest under the Intercompany Note. As of March 31, 2019, the liability recorded in respect of the post-petition intercompany balance on CCOH's balance sheet was $73.7 million.

On December 16, 2018, the Debtors, CCOH, GAMCO Asset Management, Inc., and Norfolk County Retirement System entered into a settlement (the “CCOH Separation Settlement”) of all claims, objections, and other causes of action that have been or could be asserted by or on behalf of CCOH, GAMCO Asset Management, Inc., and/or Norfolk County Retirement System by and among the Debtors, CCOH, GAMCO Asset Management, Inc., certain individual defendants in the GAMCO Asset Management, Inc. action and/or the Norfolk County Retirement System action, and the private equity sponsor defendants in such actions. The CCOH Separation Settlement provides for the consensual separation of the Debtors and CCOH, including approximately $149.0 million of recovery to CCOH on account of its claim against iHeartCommunications in the Chapter 11 cases, a $200 million unsecured revolving line of credit from certain of the Debtors to CCOH for a period of up to three years, the transfer of certain of the Debtors’ intellectual property to CCOH, the waiver by the Debtors of the setoff for the value of the transferred intellectual property, mutual

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

releases, the termination of the cash sweep under the existing Corporate Services Agreement, the termination of any agreements or licenses requiring royalty payments from CCOH to the Debtors for trademarks or other intellectual property, the waiver of any post-petition amounts owed by CCOH relating to such trademarks or other intellectual property, and the execution of a new transition services agreement and other separation documents. The CCOH Separation Settlement was approved by the Bankruptcy Court and the United States District Court for the Southern District of Texas on January 22, 2019.

The Separation Agreement contemplates that in connection with the Separation (i) the cash sweep arrangement under the Corporate Services Agreement between CCOH and iHeartCommunications will terminate, and (ii) any agreements or licenses requiring royalty payments to the Debtors by CCOH for trademarks or other intellectual property, will terminate effective as of December 31, 2018. The Debtors agreed to (i) the repayment of the post-petition intercompany balance outstanding in favor of the Debtors as of December 31, 2018, which was equal to $21.6 million as of that date and (ii) the waiver of the set-off value of any royalties and IP license fees owed to iHeartCommunications equal to approximately $31.8 million from March 14, 2018 through December 31, 2018, such that the resulting intercompany balance on such date was $10.2 million in favor of CCOH, payable on the Effective Date. Since January 1, 2019, CCOH has incurred an additional intercompany liability of $52.1 million in favor of iHeartCommunications as of March 31, 2019. Pursuant to an amendment to the Separation Agreement (the "Separation Agreement Amendment"), CCOH has agreed to offset the $149 million amount owed by iHeartCommunications on the Effective Date by $52.1 million, resulting in a total net payment to CCOH of approximately $107 million on the Effective Date (including the $10.2 million payment discussed above). Pursuant to the Amendment, within 15 business days after the Effective Date, iHeartCommunications and CCOH will pay the other any intercompany liability incurred from April 1, 2019 through the Effective Date. The Intercompany Note and Due to iHeartCommunications Note are eliminated in consolidation in our consolidated financial statements. The Bankruptcy Court approved a final order to allow us to continue to provide the day-to-day cash management services for CCOH during the Chapter 11 Cases. Upon the occurrence of the Separation on the Effective Date, we will cease to provide these services for CCOH.

~~China Investigation~~

Several employees of Clear Media Limited, an indirect, non-wholly-owned subsidiary of the Company whose ordinary shares are listed on the Hong Kong Stock Exchange, are subject to an ongoing police investigation in China for misappropriation of funds.wages. The Company is ~~not aware of any litigation, claim or assessment pending against the Company in relation~~still evaluating this provision to this investigation. Based on information known to date, the Company believes any contingent liabilities arising from potential misconduct that has been or may be identified by the investigation in China are not material to the Company’s consolidated financial statements. The effect of the misappropriation of funds is reflected indetermine our eligibility for these ~~financial statements in the appropriate periods.~~employment tax credits.

The Company advised both the United States Securities and Exchange Commission and the United States Department of Justice of the investigation at Clear Media Limited and is cooperating to provide information in response to inquiries from the agencies. The Clear Media Limited investigation could implicate the books and records, internal controls and anti-bribery provisions of the U.S. Foreign Corrupt Practices Act, which statute and regulations provide for potential monetary penalties as well as criminal and civil sanctions. It is possible that monetary penalties and other sanctions could be assessed on the Company in connection with this matter. The nature and amount of any monetary penalty or other sanctions cannot reasonably be estimated at this time and could be qualitatively or quantitatively material to the Company.

~~Italy Investigation~~

During the three months ended June 30, 2018, the Company identified misstatements associated with VAT obligations in its business in Italy, which resulted in an understatement of its VAT obligation. These misstatements resulted in an understatement of other long-term liabilities of $16.9 million as of December 31, 2017. The effect of these misstatements is reflected in the historical financial statements in the appropriate periods. Upon identification of these misstatements, the Company undertook certain procedures, including a forensic investigation, which is ongoing. In addition, the Company voluntarily disclosed the matter and preliminary findings to the Italian tax authorities in order to commence a discussion on the appropriate calculation of the VAT position. The current expectation is that the Company may have to repay to the Italian tax authority a substantial portion of the VAT previously applied as a credit in relation to the transactions under investigation, amounting to approximately $17 million, including estimated possible penalties and interest. The Company made a payment of approximately $8.6 million during the fourth quarter of 2018 and expects to pay the remainder during the last half of 2019. The ultimate amount to be paid may differ from the estimates, and such differences may be material.

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~NOTE 7 – INCOME TAXES~~

~~Income Tax Expense~~

~~The Company’s income tax expense for the three months ended March 31, 2019 and 2018, respectively, consisted of the following components:~~

(In thousands) Three Months Ended March 31,
2019 2018
Current tax expense $ (1,926 ) $ (4,672 )
Deferred tax benefit 5,357
122,038
Income tax benefit $ 3,431
$ 117,366

The effective tax rate for the three months ended March 31, 2019 and 2018 was 2.5% and 21.3%, respectively. The decrease in the effective tax rate is primarily attributed to the tax effects of the impairment charge recorded in relation to indefinite-lived FCC licenses in the current period, and also attributed to year over year changes in the forecasted mix of earnings and tax rates in the jurisdictions in which the Company operates.

NOTE 89 – ~~SHARE-BASED COMPENSATION AND LOSS PER SHARE~~STOCKHOLDER'S EQUITY

~~The~~Pursuant to the Company's 2019 Equity Incentive Plan, the Company has granted ~~restricted stock and CCOH has granted restricted stock,~~ restricted stock units and options to purchase shares of ~~CCOH's~~the Company's Class A common stock to certain key individuals.

~~COMPUTATION OF LOSS PER SHARE~~Share-based Compensation

Share-based compensation expenses are recorded in corporate expenses and were $4.6 million for the Successor Company for three months ended March 31, 2020. Share-based compensation expenses for the Predecessor Company were $0.4 million for three months ended March 31, 2019.

As of March 31, 2020, there was $52.7 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions. This cost is expected to be recognized over a weighted average period of approximately 3.2 years.

Successor Common Stock and Special Warrants

The Company is authorized to issue 2,100,000,000 shares, consisting of (a) 1,000,000,000 shares of Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”), (b) 1,000,000,000 shares of Class B Common Stock, par value $0.001 per share (the “Class B Common Stock”), and (c) 100,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”).

The following table presents the Successor Company's Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding as of March 31, 2020:



	March 31, 2020
	(Unaudited)
Successor Class A Common Stock, par value $.001 per share,1,000,000,000 shares authorized	59,930,396
Successor Class B Common Stock, par value $.001 per share, 1,000,000,000 shares authorized	6,899,611
Successor Special Warrants	78,919,386
Total Successor Class A Common Stock, Class B Common Stock and Special Warrants issued and outstanding	145,749,393

During the three months ended March 31, 2020, stockholders converted 5,299 shares of the Class B common stock into Class A common stock.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Special Warrants

Each Special Warrant issued under the special warrant agreement entered into in connection with the Reorganization may be exercised by its holder to purchase one share of Successor Class A common stock or Successor Class B common stock at an exercise price of $0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Successor Company's outstanding Class A common stock, (b) more than 22.5 percent of the Successor Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any foreign ownership threshold set by the FCC pursuant to a declaratory ruling or specific approval requirement or (d) the Company violating any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC. Any holder exercising Special Warrants must complete and timely deliver to the warrant agent the required exercise forms and certifications required under the special warrant agreement. The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of a licensee’s equity, unless the FCC determines that greater indirect foreign ownership is in the public interest. As described further in Note 7 above, on July 25, 2019, the Company filed a PDR requesting FCC consent to exceed the 25 percent foreign ownership and voting benchmarks that currently apply to us, on which the FCC has requested public comment. The public comment period closed on March 26, 2020. The FCC has also referred our PDR to Team Telecom - the interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues. We cannot predict whether the FCC will issue a ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to have, or how long it will take to obtain such a ruling.

During the three months ended March 31, 2020, stockholders exercised 2,127,207 Special Warrants for an equivalent number of shares of Class A common stock.

Stockholder Rights Plan

On May 5, 2020, the Company’s Board of Directors (the “Board”) approved the adoption of a short-term stockholder rights plan (the “Stockholder Rights Plan”) in order to protect the best interests of all Company stockholders during the current period of high equity-market volatility and price disruption.

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

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

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

Additional details about the stockholder rights plan will be contained in a Form 8-K to be filed by the Company with the SEC.

IHEARTMEDIA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Computation of Income (Loss) per Share


(In thousands, except per share data)	Three Months Ended March 31,						Successor Company			Predecessor Company
	2019			2018			Three Months Ended March 31,			Three Months Ended March 31,
							2020			2019
NUMERATOR:
Net loss attributable to the Company – common shares	$	(114,383	)	$	(416,994	)	$	(1,688,736	)	$	(114,383	)
Exclude:
Loss from discontinued operations, net of tax							$	—		$	(169,554	)
Noncontrolling interest from discontinued operations, net of tax - common shares							—			21,218
Total loss from discontinued operations, net of tax - common shares							$	—		$	(148,336	)
Income (loss) from continuing operations							$	(1,688,736	)	$	33,953

DENOMINATOR:
DENOMINATOR⁽¹⁾:
Weighted average common shares outstanding - basic	85,649			85,215			145,614			85,649
Weighted average common shares outstanding - diluted⁽¹⁾	85,649			85,215
Stock options and restricted stock⁽²⁾:							—			—
Weighted average common shares outstanding - diluted							145,614			85,649

Net loss attributable to the Company per common share:
Net income (loss) attributable to the Company per common share:
From continuing operations - Basic							$	(11.60	)	$	0.40
From discontinued operations - Basic							$	—		$	(1.73	)
Basic	$	(1.34	)	$	(4.89	)	$	(11.60	)	$	(1.34	)
From continuing operations - Diluted							$	(11.60	)	$	0.40
From discontinued operations - Diluted							$	—		$	(1.73	)
Diluted	$	(1.34	)	$	(4.89	)	$	(11.60	)	$	(1.34	)


⁽¹⁾	~~Outstanding equity awards~~All of ~~5.9 million~~the outstanding Special Warrants are included in both the basic and ~~8.2 million~~diluted weighted average common shares outstanding of the Successor Company for the three months ended March 31, ~~2019 and 2018, respectively,~~2020.

⁽²⁾

Outstanding equity awards representing 8.2 million shares of Class A common stock of the Successor Company for the three months ended March 31, 2020 were not included in the computation of diluted earnings per share because to do so would have been ~~antidilutive.~~anti-dilutive. Outstanding equity awards representing 5.9 million shares of Class A common stock of the Predecessor Company for the three months ended March 31, 2019 were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.

~~NOTE 9 — OTHER INFORMATION~~

~~Other Comprehensive Income (Loss)~~

~~There was no change in deferred income tax liabilities resulting from adjustments to comprehensive loss for the three months ended March 31, 2019 and 2018.~~

~~Preferred Equity Commitment~~

On April 8, 2019, the Company, iHeartCommunications, iHeart Operations, Inc. ("iHeart Operations"), and CCH entered into a Preferred Equity Commitment Letter (the "Commitment Letter") with an investor. Pursuant to the Commitment Letter, the investor

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

has agreed to purchase (i) 60,000 shares of Series A Perpetual Preferred Stock, par value $0.001 per share (the "iHeart Operations Preferred Stock"), of iHeart Operations, Inc. having an aggregate initial liquidation preference of $60 million for a cash purchase price of $60 million and (ii) 45,000 shares of Series A Perpetual Preferred Stock, par value $0.01 per share, of CCH having an aggregate initial liquidation preference of $45 million for a cash purchase price of $45 million.

Holders of the iHeart Operations Preferred Stock will be entitled to receive, as and when declared by the board of directors of iHeart Operations, in respect of each share, cumulative dividends accruing daily and payable quarterly at a per annum rate equal to the sum of (1) the greater of (a) LIBOR and (b) two percent, plus (2) the applicable margin, which is calculated as a function of iHeartMedia’s consolidated total leverage ratio. Dividends will be payable on the liquidation preference. Unless all accrued and unpaid dividends on the iHeart Operations Preferred Stock are paid in full, no dividends or distributions may be paid on any equity interests of iHeartMedia or its subsidiaries other than iHeart Operations, and no such equity interests may be repurchased or redeemed (subject to certain exceptions that are specified in the certificate of designations for the iHeart Operations Preferred Stock). Dividends, if declared, will be payable on March 31, June 30, September 30 and December 31 of each year (or on the next business day if such date is not a business day).

Upon (i) a liquidation, dissolution or winding up of iHeart Operations, iHeartMedia or iHeartCommunications, together with the subsidiaries of such entity, taken as a whole, (ii) a bankruptcy event, (iii) a change of control, (iv) a sale or transfer of all or substantially all of iHeart Operations’, iHeartMedia’s or iHeartCommunications’ assets and the assets of such entity’s subsidiaries, taken as a whole in a single transaction (other than to iHeartMedia or any of its subsidiaries), or a series of transactions, (v) an acceleration or payment default of indebtedness of iHeart Operations, iHeartMedia or any of its subsidiaries of $100 million or more or (vi) consummation of certain equity offerings of iHeartMedia, iHeart Operations or iHeartCommunications or certain significant subsidiaries, then any holder of shares of iHeart Operations Preferred Stock may require iHeartMedia to purchase such holder’s shares of iHeart Operations Preferred Stock at a purchase price equal to (a) the liquidation preference plus a make-whole premium, if such purchase is consummated prior to the third anniversary of the issue date or (b) the liquidation preference, if the purchase is consummated on or after the third anniversary of the issue date.

~~On the tenth anniversary of the issue date, the shares of iHeart Operations Preferred Stock will be subject to mandatory redemption for an amount equal to the liquidation preference.~~

If a default occurs or dividends payable on the shares of iHeart Operations Preferred Stock have not been paid in cash for twelve consecutive quarters, the holders of the iHeart Operations Preferred Stock will have the right, voting as a class, to elect one director to iHeartMedia’s Board of Directors. Upon any termination of the rights of the holders of shares of the iHeart Operations Preferred Stock as a class to vote for a director as described above, the director so elected to iHeartMedia’s Board of Directors will cease to be qualified as a director and the term of such director’s office shall terminate immediately.

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

NOTE 10 – SEGMENT DATA

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

~~The following table presents~~In connection with a reorganization of the ~~Company's reportable~~Company’s management structure after the Separation and emergence from the Chapter 11 Cases, the Company revised its segment ~~results for the three months ended March 31, 2019~~reporting, as discussed in Note 1 and ~~2018:~~all prior periods have been restated to conform to this presentation.

(In thousands) iHM Americas Outdoor International Outdoor Other Corporate and other reconciling items Eliminations Consolidated
Three Months Ended March 31, 2019
Revenue $ 765,810
$ 272,722
$ 314,394
$ 30,190
$ —
$ (1,217 ) $ 1,381,899
Direct operating expenses 267,114
130,519
217,308
1
—
(23 ) 614,919
Selling, general and administrative expenses 307,729
51,636
71,330
25,251
—
(223 ) 455,723
Corporate expenses —
—
—
—
75,671
(971 ) 74,700
Depreciation and amortization 30,417
39,496
34,581
2,945
5,927
—
113,366
Impairment charges —
—
—
—
91,382
—
91,382
Other operating expense, net —
—
—
—
(3,549 ) —
(3,549 )
Operating income (loss) $ 160,550
$ 51,071
$ (8,825 ) $ 1,993
$ (176,529 ) $ —
$ 28,260
Intersegment revenues $ 226
$ 991
$ —
$ —
$ —
$ —
$ 1,217
Capital expenditures $ 20,690
$ 11,408
$ 14,819
$ 37
$ 4,172
$ —
$ 51,126
Share-based compensation expense $ —
$ —
$ —
$ —
$ 2,227
$ —
$ 2,227

Three Months Ended March 31, 2018
Revenue $ 744,568
$ 255,847
$ 342,551
$ 28,218
$ —
$ (1,536 ) $ 1,369,648
Direct operating expenses 241,066
124,873
236,416
—
—
—
602,355
Selling, general and administrative expenses 321,270
48,950
78,458
24,822
—
(513 ) 472,987
Corporate expenses —
—
—
—
79,757
(1,023 ) 78,734
Depreciation and amortization 58,333
44,504
38,565
3,766
6,266
—
151,434
Impairment charges —
—
—
—
—
—
—
Other operating expense, net —
—
—
—
(3,286 ) —
(3,286 )
Operating income (loss) $ 123,899
$ 37,520
$ (10,888 ) $ (370 ) $ (89,309 ) $ —
$ 60,852
Intersegment revenues $ 14
$ 1,522
$ —
$ —
$ —
$ —
$ 1,536
Capital expenditures $ 9,077
$ 12,907
$ 15,272
$ 40
$ 1,407
$ —
$ 38,703
Share-based compensation expense $ —
$ —
$ —
$ —
$ 2,684
$ —
$ 2,684

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~NOTE 11– CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS~~

The ~~Company is a party to a management agreement with certain affiliates of Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together,~~following table presents the ~~"Sponsors") and certain other parties pursuant to which such affiliates of~~Company's segment results for the Sponsors provided management and financial advisory services until December 31, 2018. These agreements required management fees to be paid to such affiliates of the Sponsors for such services at a rate not greater than $15.0 million per year, plus reimbursable expenses. In connection with the Reorganization, theSuccessor Company ~~is not recognizing management fees following the Petition Date. The Company recognized management fees and reimbursable expenses of $3.1 million~~ for the three months ended March 31, ~~2018. As~~2020:



Successor Company
(In thousands)	Audio		Audio & Media Services		Corporate and other reconciling items			Eliminations			Consolidated
Three Months Ended March 31, 2020
Revenue	$	722,385	$	60,227	$	—		$	(1,978	)	$	780,634
Direct operating expenses	294,787		8,203		—			(1,358		)	301,632
Selling, general and administrative expenses	310,056		34,674		—			(589		)	344,141
Corporate expenses	—		—		39,980			(31		)	39,949
Depreciation and amortization	88,801		5,696		2,271			—			96,768
Impairment charges	—		—		1,727,857			—			1,727,857
Other operating expense, net	—		—		(1,066		)	—			(1,066		)
Operating income (loss)	$	28,741	$	11,654	$	(1,771,174	)	$	—		$	(1,730,779	)
Intersegment revenues	$	167	$	1,811	$	—		$	—		$	1,978
Capital expenditures	$	18,602	$	662	$	2,400		$	—		$	21,664
Share-based compensation expense	$	—	$	—	$	4,625		$	—		$	4,625

The following table presents the Company's segment results for the Predecessor Company for the three months ended March 31, 2019. The presentation of prior period amounts has been restated to conform to the presentation of the ~~effective date of the Plan of Reorganization, these management fees will be waived.~~Successor period.



Predecessor Company
(In thousands)	Audio		Audio and Media Services		Corporate and other reconciling items			Eliminations			Consolidated
Three Months Ended March 31, 2019
Revenue	$	746,216	$	51,392	$	—		$	(1,811	)	$	795,797
Direct operating expenses	276,006		7,010		—			(142		)	282,874
Selling, general and administrative expenses	291,791		34,796		—			(1,653		)	324,934
Corporate expenses	—		—		39,157			(16		)	39,141
Depreciation and amortization	29,484		4,062		4,744			—			38,290
Impairment charges	—		—		91,382			—			91,382
Other operating expense, net	—		—		(27		)	—			(27		)
Operating income (loss)	$	148,935	$	5,524	$	(135,310	)	$	—		$	19,149
Intersegment revenues	$	187	$	1,624	$	—		$	—		$	1,811
Capital expenditures	$	20,040	$	687	$	2,226		$	—		$	22,953
Share-based compensation expense	$	—	$	—	$	392		$	—		$	392

IHEARTMEDIA, INC. AND SUBSIDIARIES ~~(DEBTOR-IN-POSSESSION)~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~NOTE 12– LIABILITIES SUBJECT TO COMPROMISE~~

As discussed in Note 1, "Basis of Presentation", since the Petition Date, the Company has been operating as debtor in possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. On the accompanying Consolidated Balance Sheets, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. Liabilities subject to compromise at March 31, 2019 and December 31, 2018 consisted of the following:

(In thousands) March 31,
2019 December 31, 2018
Accounts payable $ 32,232
$ 32,807
Current operating lease liabilities 32,065
—
Accrued expenses 12,050
23,277
Deferred taxes 653,522
644,926
Noncurrent operating lease liabilities 397,158
—
Other long-term liabilities 15,916
87,096
Accounts payable, accrued and other liabilities 1,142,943
788,106
Debt subject to compromise 15,143,713
15,149,477
Accrued interest on debt subject to compromise 542,673
542,673
Long-term debt and accrued interest 15,686,386
15,692,150
Total liabilities subject to compromise $ 16,829,329
$ 16,480,256

Determination of the value at which liabilities will ultimately be settled cannot be made until the Bankruptcy Court approves the Plan of Reorganization and the Company emerges from bankruptcy. The Company will continue to evaluate the amount and classification of its pre-petition liabilities. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of liabilities subject to compromise may change.

NOTE 1311– REORGANIZATION ITEMS, NET

Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively, and were as follows:



(In thousands)	Successor Company		Predecessor Company
	Three Months Ended March 31,		Three Months Ended March 31,
	2020		2019
Professional fees and other bankruptcy related costs	$	—	$	(36,113	)
Loss on Liabilities subject to compromise settlement	—		(5		)
Reorganization items, net	$	—	$	(36,118	)

Cash payments for Reorganization items, net	$	417	$	33,945

(In thousands) Three Months Ended March 31,
2019 2018
Write-off of deferred long-term debt fees $ —
$ 54,670
Write-off of original issue discount on debt subject to compromise —
131,100
Loss on Liabilities subject to compromise settlement 5
—
Professional fees and other bankruptcy related costs 36,113
6,285
Reorganization items, net $ 36,118
$ 192,055

Professional fees included in Reorganization items, net represent fees for post-petition expenses related to the Chapter 11 Cases. ~~Write-off of deferred long-term debt fees and write-off of original issue discount are included in Reorganization items, net.~~

~~As of March 31, 2019, $49.7 million of Reorganization items, net were unpaid and accrued in Accounts Payable and Accrued Expenses in the accompanying Consolidated Balance Sheet. As of~~ ~~March 31, 2018, $6.1 million of~~The Company incurred additional professional fees ~~were unpaid and accrued in Accounts Payable and Accrued Expenses in~~related to the ~~accompanying Consolidated Balance Sheet.~~

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~NOTE 14– CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION~~

~~The financial statements below represent the condensed combined financial statements~~bankruptcy, post-emergence, of the Debtors. The results of the Company’s Non-Filing Entities, which are comprised primarily of the Company's Americas outdoor and International outdoor segments, are not included in these condensed combined financial statements.

Intercompany transactions among the Debtors have been eliminated in the financial statements contained herein. Intercompany transactions among the Debtors and the Non-Filing Entities have not been eliminated in the Debtors’ financial statements.

~~Debtors' Balance Sheet~~

(In thousands) March 31,
2019 December 31, 2018
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 233,596
$ 178,924
Accounts receivable, net of allowance of $24,936 in 2019 and 26,347 in 2018 748,143
866,088
Intercompany receivable 48,771
—
Prepaid expenses 120,009
98,836
Other current assets 41,452
24,576
Total Current Assets 1,191,971
1,168,424
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net 496,067
501,677
INTANGIBLE ASSETS AND GOODWILL
Indefinite-lived intangibles - licenses 2,318,029
2,409,411
Other intangibles, net 187,197
196,741
Goodwill 3,412,753
3,412,753
OTHER ASSETS
Operating lease right-of-use assets 353,404
—
Other assets 63,461
63,203
Total Assets $ 8,022,882
$ 7,752,209
CURRENT LIABILITIES

Accounts payable $ 41,512
$ 49,129
Intercompany payable —
2,894
Accrued expenses 171,043
296,149
Accrued interest 674
766
Deferred income 128,493
120,328
Current portion of long-term debt 46,510
46,105
Total Current Liabilities 388,232
515,371
Other long-term liabilities 120,662
229,640
Liabilities subject to compromise¹
17,861,051
17,511,976
EQUITY (DEFICIT)
Equity (Deficit) (10,347,063 ) (10,504,778 )
Total Liabilities and Equity (Deficit) $ 8,022,882
$ 7,752,209

¹In connection with the cash management arrangements with CCOH, the Company maintains an intercompany revolving promissory note payable by the Company to CCOH (the "Intercompany Note"), which matures on May 15, 2019. Liabilities subject to compromise include the pre-petition principal amount outstanding under the Intercompany Note, which totals $1,031.7$2.6 million ~~as of March 31, 2019 and December 31, 2018.~~

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~Debtors' Statements of Operations~~

(In thousands) Three Months Ended March 31,
2019 2018
Revenue $ 790,558
$ 767,007
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 265,684
239,461
Selling, general and administrative expenses (excludes depreciation and amortization) 329,919
342,951
Corporate expenses (excludes depreciation and amortization) 47,042
44,308
Depreciation and amortization 38,040
67,116
Impairment charges 91,382
—
Other operating expense, net (23 ) (3,232 )
Operating income 18,468
69,939
Interest expense, net¹
338
342,564
Equity in loss of nonconsolidated affiliates (7 ) (32 )
Gain on extinguishment of debt —
5,667
Dividend income²
—
25,483
Other expense, net (42 ) (20,060 )
Reorganization items, net 36,118
192,055
Loss before income taxes (18,037 ) (453,622 )
Income tax benefit 61,373
162,973
Net income (loss) $ 43,336
$ (290,649 )

¹~~Includes interest incurred during~~for the three months ended March 31, ~~2019 and 2018 in relation to the post-petition Intercompany Note and interest incurred during the three months ended March 31, 2018 in relation to the pre-petition Intercompany Notes.~~

²~~Consists of cash dividends received from Non-Debtor entities during the three months ended March 31, 2018.~~

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~Debtors' Statement of Cash Flows~~

(In thousands) Three Months Ended March 31,
2019 2018
Cash flows from operating activities:
Consolidated net income (loss) $ 43,336
$ (290,649 )
Reconciling items:
Impairment charges 91,382
—
Depreciation and amortization 38,040
67,116
Deferred taxes 8,596
(138,949 )
Provision for doubtful accounts 3,838
6,829
Amortization of deferred financing charges and note discounts, net 405
11,043
Non-cash Reorganization items, net 2,173
191,903
Share-based compensation 393
578
Loss on disposal of operating and other assets 143
1,864
Equity in loss of nonconsolidated affiliates 7
32
Gain on extinguishment of debt —
(5,667 )
Barter and trade income (5,076 ) (357 )
Other reconciling items, net (13 ) (80 )
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in accounts receivable 114,107
110,270
Increase in prepaid expenses and other current assets (38,596 ) (66,429 )
Decrease in accrued expenses (127,089 ) (27,223 )
Increase (decrease) in accounts payable (8,192 ) 4,444
Increase in accrued interest 328
301,896
Increase in deferred income 13,049
13,604
Changes in other operating assets and liabilities (1,272 ) (1,116 )
Net cash provided by operating activities 135,559
179,109
Cash flows from investing activities:
Purchases of property, plant and equipment (22,932 ) (10,010 )
Proceeds from disposal of assets 121
1,028
Purchases of other operating assets —
(305 )
Change in other, net (7 ) (29 )
Net cash used for investing activities (22,818 ) (9,316 )
Cash flows from financing activities:
Draws on credit facilities —
25,000
Payments on credit facilities —
(59,000 )
Proceeds from long-term debt 228
—
Payments on long-term debt (6,412 ) (50,027 )
Net transfers to related parties (51,881 ) (51,996 )
Change in other, net (4 ) 2
Net cash used for financing activities (58,069 ) (136,021 )
Net increase in cash, cash equivalents and restricted cash 54,672
33,772
Cash, cash equivalents and restricted cash at beginning of period 182,352
102,468
Cash, cash equivalents and restricted cash at end of period $ 237,024
$ 136,240

~~The following table provides a reconciliation of cash, cash equivalents and restricted cash reported~~2020, which are included within Other expense, net in the ~~Debtors' Balance Sheet to the total~~Company's Consolidated Statements of ~~the amounts reported in the Debtors' Statement of Cash Flows:~~Comprehensive Loss.

~~IHEARTMEDIA, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

(In thousands) March 31,
2019 December 31,
2018
Cash and cash equivalents $ 233,596
$ 178,924
Restricted cash included in:
Other current assets 3,428
3,428
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows $ 237,024
$ 182,352

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Format of Presentation

Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes contained in Item 1 of this Quarterly Report on Form 10-Q.

Our discussion is presented on both a consolidated and segment basis. Our reportable segments are iHeartMedia (“iHM”), Americas outdoor advertising (“Americas outdoor” or “Americas outdoor advertising”) and International outdoor advertising (“International outdoor” or “International outdoor advertising”). Our iHM segmentprimary business provides media and entertainment services via ~~live~~ broadcast and digital delivery, including our networks businesses, through our Audio segment. We also operate businesses that provide audio and ~~also includes~~media services, through our ~~events~~Audio and national syndication business. Our Americas outdoor and International outdoor segments provide outdoor advertising services in their respective geographic regions using various digital and traditional display types. Included in the “Other” category isMedia Services segment, including our full-service media representation business, Katz Media Group ~~which is ancillary to our other businesses.~~

We manage our operating segments by focusing primarily on their operating income, while Corporate expenses, Other operating income (expense), net, Interest expense, Gain on marketable securities, Equity in earnings (loss) of nonconsolidated affiliates, Loss on extinguishment of debt, Other income, net and Income tax expense are managed on a total company basis and are, therefore, included only in our discussion of consolidated results.

~~Certain prior period amounts have been reclassified to conform to the 2019 presentation.~~

~~Current Bankruptcy Proceedings~~

~~On March 14, 2018 (the "Petition Date"), iHeartMedia, Inc. (the “Company”, “iHeartMedia,” “we” or “us”), iHeartCommunications, Inc.~~ (“~~iHeartCommunications”~~Katz Media”) and ~~certain~~our provider of scheduling and broadcast software and services, Radio Computing Services ("RCS").

Over the ~~Company's direct~~past ten years, we have transitioned our Audio business from a single platform radio broadcast operator to a company with multiple platforms including podcasting, networks and ~~indirect domestic subsidiaries (collectively,~~live events. We have also invested in numerous technologies and businesses to increase the ~~"Debtors") filed voluntary petitions for relief (the "Chapter 11 Cases") under Chapter 11~~competitiveness of the United States Bankruptcy Code (the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court"). Clear Channel Outdoor Holdings, Inc. (“CCOH”) and its direct and indirect subsidiaries did ~~not~~ ~~file voluntary petitions for reorganization under the Bankruptcy Code and are not Debtors in the Chapter 11 Cases.~~

~~The Chapter 11 Cases are being administered under the caption In re: iHeartMedia, Inc.,~~ ~~et al. Case No. 18-31274 (MI). The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance~~our inventory with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On April 28, 2018, the Debtors filed a plan of reorganization (as amended, the “Plan of Reorganization”) and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court. On January 22, 2019, the Bankruptcy Court entered an order confirming the Plan of Reorganization. Subject to the satisfaction of certain conditions, we currently anticipate the Plan of Reorganization will become effective and iHeartMedia will emerge from Chapter 11 on or about May 1, 2019 (the "Effective Date").

On the Effective Date, we will emerge from Chapter 11 through (a) a series of transactions through which CCOH, its parent Clear Channel Holdings, Inc. (“CCH”) and its subsidiaries will be separated from, and cease to be controlled by usour advertisers and our ~~subsidiaries (the “Separation”),~~audience We believe that our ability to generate cash flow from operations from our business initiatives and ~~(b) a series of transactions through which we~~our current cash on hand will ~~reduce~~provide sufficient resources to fund and operate our business, fund capital expenditures and other obligations and make interest payments on our long-term debt ~~from approximately $16 billion to approximately $5.8 billion and effect a global compromise and settlement among holders of claims in connection with~~for at least the Chapter 11 Cases (the “Reorganization”), which will involve, among other things, (i) the restructuring of our indebtedness by (A) replacing our existing DIP facility with a $450 million senior secured asset-based revolving credit facility (the “New ABL Facility”) and (B) issuing to certain of our prepetition senior creditors, on account of their claims, a $3.5 billion senior secured term loan credit facility, $1.45 billion aggregate principal amount of new Senior Unsecured Notes due 2027 and $800 million aggregate principal amount of new Senior Secured Notes due 2026, (ii) our issuance of new common stock and special warrants to holders of claims and interests, subject to ownership restrictions imposed by the FCC, and (iii) the intercompany settlement transactions and sale of the preferred stock of our indirect wholly-owned subsidiary iHeart Operations, Inc., in each case pursuant to the separation and settlement agreement entered into among us, iHeartCommunications, CCH and CCOH (the "Separation Agreement").

Upon the occurrence of the Separation on the Effective Date, iHeartCommunications will enter into a revolving credit facility that provides for borrowings to Clear Channel Outdoor, LLC ("CCOL"), a subsidiary of CCH, at CCOL’s option, of up to $200 million, with any borrowings bearing interest at a rate equal to the prime lending rate (the "iHC Line of Credit"). The iHC Line of Credit will be unsecured. The facility will have a three year maturity, and may be terminated by CCOL earlier at CCOL's option.

~~For more information regarding the impact of the Chapter 11 Cases, see "--Liquidity After Filing the Chapter 11 Cases" and "--Liquidity Following the Reorganization and Separation."~~

next 12 months.

Description of our Business

Our ~~iHM~~Audio strategy centers on delivering entertaining and informative content where our listeners want to find us across multiple platforms, including broadcast, ~~mobile~~digital and ~~digital,~~live mobile, as well as events. Our primary source of revenue is derived from selling ~~broadcast~~ local and national advertising time on our radio stations, with contracts typically less than one year in duration. The programming formats of our radio stations are designed to reach audiences with targeted demographic characteristics. We ~~are working~~work closely with our advertising and marketing partners to develop tools and leverage data to enable advertisers to effectively reach their desired audiences. We continue to expand the choices for listeners and we deliver our content and sell advertising across multiple distribution channels, including digitally via our iHeartRadio mobile application ~~our station websites~~ and other digital platforms which reach national, regional and local audiences. We also generate ~~revenues~~revenue from ~~our networks, including Premiere and Total Traffic & Weather, as well as through sponsorships and~~network syndication, our nationally recognized live events, our station websites and other ~~revenue streams. We also generate revenue by providing audio and media services to radio and TV broadcast industry participants through our Katz Media and RCS businesses.~~

Management typically monitors our outdoor advertising business by reviewing the average rates, average revenue per display, occupancy and inventory levels of each of our display types by market. Our outdoor advertising revenue is derived from selling advertising space on the displays we own or operate in key markets worldwide, consisting primarily of billboards, street furniture and transit displays. Part of our long-term strategy for our outdoor advertising businesses is to pursue the technology of digital displays, including flat screens, LCDs and LEDs, as additions to traditional methods of displaying our clients’ advertisements. We are currently installing these technologies in certain markets, both domestically and internationally.miscellaneous transactions.

Our advertising revenue ~~for all of our segments~~ is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with ~~GDP,~~GDP. A recession or downturn in the U.S. economy may have a significant impact on the Company’s ability to generate revenues. In light of the novel coronavirus pandemic (“COVID-19”), we expect that our revenues in 2020 will decline, largely as a result of a decline in consumer and business spending and the related impact to the demand for advertising and pricing pressure resulting from greater competition for available advertising dollars. In the three months ended March 31, 2020, we saw a sharp decline and expect further declines in our Sponsorships business, driven by the postponement or cancellation of a number of our live events as a result of the COVID-19 pandemic; however, this portion of our business is the smallest contributor to our revenue and earnings and has the lowest margin of any of our segments.

When the business environment recovers, we expect that the traditional promotional use of radio to be a strong benefit to us. As businesses reopen both ~~domestically~~nationally and ~~internationally.~~locally, we believe that we are advantaged by our unparalleled reach and the live and local trusted voices that advertisers need to get their messages out quickly. Our broadcast national and local revenue, as well as our Katz Media revenue, are generally impacted by political ~~cycles. Internationally,~~cycles, and as a result are not as significantly affected by declines in GDP.

In February 2020, we announced our modernization initiatives, which will take advantage of the significant investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies. In addition, in response to the COVID-19 pandemic, we have taken significant steps to significantly reduce our capital and operating expenditures for the remainder of 2020. For more information, please see the Liquidity and Capital Resources - Anticipated Cash Requirements section below.

On March 26, 2020, we issued a press release announcing the withdrawal of previously announced financial guidance for the fiscal year ending December 31, 2020 due to heightened uncertainty related to COVID-19, its impact on the operating and economic environment and related, near-term advertiser spending decisions. As a precautionary measure to preserve financial flexibility in light of the current uncertainty in the global economy resulting from COVID-19, we borrowed $350.0 million principal amount under our senior secured asset-based revolving credit facility (the "ABL Facility"). For more information please refer to “Liquidity and Capital Resources” in this MD&A.

Impairment Charges

As discussed below, we emerged from bankruptcy on May 1, 2019 and applied fresh start accounting, which included stating our assets and liabilities at estimated fair values, including intangible assets and goodwill, based on our discounted future cash flows in the market environment that existed at the time of emergence. The United States economy is undergoing a period of economic disruption and uncertainty as a result of the COVID-19 pandemic, which has caused, among other things, lower consumer and business spending. In addition, the economic disruption caused by the COVID-19 pandemic had an adverse impact on our first quarter 2020 results, and we expect the pandemic to negatively affect our future financial results. In addition, the economic uncertainty as a result of the COVID-19 pandemic has had a significant impact on the trading values of our publicly-traded debt and equity. As a result, we performed an impairment test as of March 31, 2020 on our long-lived assets, intangible assets, indefinite-lived Federal Communication Commission (“FCC”) licenses and goodwill.

The uncertainty surrounding the demand for advertising significantly and negatively impacted the key assumptions used in the discounted cash flow models, which are utilized to value our FCC licenses and goodwill. As a result of the recent valuation performed upon emergence, which was based on market conditions at that time, and the significant deterioration in economic conditions currently as a result of the COVID-19 pandemic, the fair values of certain of our FCC licenses and goodwill have decreased significantly.

Our FCC licenses are valued using the direct valuation approach, with the key assumptions being market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average asset within a market. We obtained the most recent broadcast radio industry revenue projections, which consider the impact of COVID-19 on future broadcast radio advertising revenue. Such projections reflect a significant and negative impact from COVID-19. In addition to using these broadcast radio industry revenue projections, we used various sources to analyze media and broadcast industry market forecasts and other data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of March 31, 2020.

Considerations in developing these assumptions included the extent of the economic downturn, ranges of expected timing of recovery, discount rates and other factors. Based on our interim testing, the estimated fair value of FCC licenses was below their carrying values. As a result, we recognized a non-cash impairment charge of $502.7 million on our FCC licenses.

The goodwill impairment test requires us to measure the fair value of our reporting units and compare the estimated fair value to the carrying value, including goodwill. Each of our reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires us to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and in management’s judgment in applying these factors. As with the impairment testing we performed on our FCC licenses described above, the significant deterioration in market conditions and uncertainty in the markets impacted the assumptions used to estimate the discounted future cash flows of our reporting units for purposes of performing the interim goodwill impairment test.

As discussed above, the carrying values our reporting units were based on estimated fair values determined upon our emergence from bankruptcy on May 1, 2019, and the rapid deterioration in economic conditions resulting from the COVID-19 pandemic resulted in lower estimated fair values determined in connection with our interim goodwill impairment testing as of March 31, 2020. The estimated fair value of one of our reporting units was below its carrying value, including goodwill, which required us to recognize a non-cash impairment charge of $1.2 billion to reduce our goodwill.

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our long-lived assets, indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the magnitude of the economic downturn caused by ~~fluctuations in foreign currency exchange rates~~the COVID-19 pandemic, as well as the ~~economic conditions~~timing of any recovery. If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.

Emergence from Bankruptcy

On March 14, 2018, iHeartMedia, Inc. (the “Company,” "iHeartMedia," "we" or "us"), iHeartCommunications, Inc. (“iHeartCommunications”) and certain of the Company's direct and indirect domestic subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), in the ~~foreign markets~~United States Bankruptcy Court for the Southern District of Texas, Houston Division

(the “Bankruptcy Court”). On April 28, 2018, the Debtors filed a plan of reorganization and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court, which was subsequently amended by filing the second, third, fourth and fifth amended Plan of Reorganization and amended versions of the Disclosure Statement. On January 22, 2019, the Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of iHeartMedia, Inc. and Its Debtor Affiliates (as further modified, the “Plan of Reorganization”) was confirmed by the Bankruptcy Court.

On May 1, 2019 (the “Effective Date”), the “Debtors emerged from Chapter 11 through (a) a series of transactions (the “Separation”) through which Clear Channel Outdoor Holdings, Inc. (“CCOH”), its parent Clear Channel Holdings, Inc. (“CCH”) and its subsidiaries (collectively with CCOH and CCH, the “Outdoor Group”) were separated from, and ceased to be controlled by, the Company and its subsidiaries (the “iHeart Group”), and (b) a series of transactions (the “Reorganization”) through which iHeartCommunications’ debt was reduced from approximately $16 billion to approximately $5.8 billion and a global compromise and settlement among holders of claims (“Claimholders”) in connection with the Chapter 11 Cases was effected. The compromise and settlement involved, among others, (i) the restructuring of iHeartCommunications’ indebtedness by (A) replacing its “debtor-in-possession” credit facility with a $450 million senior secured asset-based revolving credit facility (the “ABL Facility”) and (B) issuing to certain Claimholders, on account of their claims, approximately $3.5 billion aggregate principal amount of new senior secured term loans (the “Term Loan Facility”), approximately $1.45 billion aggregate principal amount of new 8.375% Senior Notes due 2027 (the “Senior Unsecured Notes”) and approximately $800 million aggregate principal amount of new 6.375% Senior Secured Notes due 2026 (the “6.375% Senior Secured Notes”), (ii) the Company’s issuance of new Class A common stock, new Class B common stock and special warrants to purchase shares of new Class A common stock and Class B common stock (“Special Warrants”) to Claimholders, subject to ownership restrictions imposed by the Federal Communications’ Commission (“FCC”), (iii) the settlement of certain intercompany transactions, and (iv) the sale of the preferred stock (the “iHeart Operations Preferred Stock”) of the Company’s wholly-owned subsidiary iHeart Operations, Inc. (“iHeart Operations”) in connection with the Separation.

All of the existing equity of the Company was canceled on the Effective Date pursuant to the Plan of Reorganization.

Beginning on the Effective Date, the Company applied fresh start accounting, which ~~we have operations.~~resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after May 1, 2019 are not comparable with the consolidated financial statements on or prior to that date.

Executive Summary

As the first quarter of 2020 began, we saw strong growth across our revenue streams, particularly from digital and from political advertising. However, while digital and political revenue continued to grow, the economic downturn as a result of the COVID-19 pandemic had a significant and negative impact on our other revenue streams in March 2020, including broadcast radio which is our largest revenue stream. A decline in advertising spend and the postponement or cancellation of certain tent-pole events resulted in a decrease in March revenues which drove an overall decrease in revenue for the first quarter of 2020 compared to the first quarter of 2019. The extent of the economic downturn and the timing of recovery, as well as the future impact on our operations, are subject to significant uncertainty. We expect the trends discussed above to continue during the duration of the economic slow-down that has resulted from the COVID-19 pandemic. In an effort to further strengthen the Company's financial flexibility and efficiently manage through the COVID-19 pandemic, we implemented measures to cut costs and preserve cash. For additional information on these actions, see the Liquidity and Capital Resources - Anticipated Cash Requirements section below.

The key developments that impacted our business during the quarter are summarized below:

~~Consolidated~~Strong Revenue growth in January and February was followed by a sharp decline in revenue ~~increased $12.3~~in March resulting from the effects of the COVID-19 pandemic.

Revenue of $780.6 million decreased $15.2 million or 1.9% during quarter ended March 31, 2020 compared to the same period of 2019.

Recorded non-cash impairment charges aggregating $1.7 billion to our goodwill and intangible assets balances as a result of the decrease in forecasted future cash flows driven by the expected significant economic slow-down resulting from the COVID-19 pandemic.

Operating loss of $1,730.8 million was down from Operating income of $19.1 million in the prior year’s quarter.


•	Net loss of $1,688.7 million increased from a Net loss of $135.6 million in the prior year's quarter.


•	Adjusted EBITDA⁽¹⁾ of $140.3 million, was down 10.6% year-over-year.


•	Cash flows provided by operating activities from continuing operations of $91.5 million decreased $45.1 million or 33.0%.


•	Free cash flow⁽²⁾from continuing operations of $69.9 million decreased $43.8 million or 38.6%.

Principal payment of $150.0 million using cash on hand to prepay a portion of the senior secured term loan facility (the “Term Loan Facility”) and amended the Term Loan Facility to reduce the Term Loan Facility interest rate by 100 bps.

Borrowing of $350.0 million principal amount under our ABL Facility, resulting in cash on hand at March 31, 2020 of $646.8 million.

The table below presents a summary of our historical results of operations for the three months ended March 31, 2020 (Successor) and 2019 ~~compared~~(Predecessor):



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,			%
	2020			2019			Change
Revenue	$	780,634		$	795,797		(1.9	)%
Operating income (loss)	$	(1,730,779	)	$	19,149		nm
Net loss	$	(1,688,736	)	$	(135,601	)	nm
Cash provided by operating activities from continuing operations	$	91,540		$	136,666		(33.0	)%

Adjusted EBITDA⁽¹⁾	$	140,339		$	157,051		(10.6	)%
Free cash flow from continuing operations⁽²⁾	$	69,876		$	113,713		(38.6	)%

⁽¹⁾For a definition of Adjusted EBITDA and a reconciliation to Operating income (loss), the ~~same period~~most closely comparable GAAP measure, and to Net Income (Loss), please see "Reconciliation of ~~2018. Excluding the $24.7 million impact from movements in foreign exchange rates, consolidated revenue increased $37.0 million during the three months ended March 31, 2019 compared~~Operating Income to ~~the same period~~Adjusted EBITDA" and "Reconciliation of ~~2018.~~

~~As a result of the Chapter 11 Cases, we incurred $36.1 million of Reorganization items, net during the three months ended March 31, 2019~~Net Income (Loss) to EBITDA and reclassified $16.8 billion of pre-petition claims that are not fully secured and that have at least a possibility of not being repaid to “Liabilities subject to compromise” on the Consolidated Balance Sheet.

~~As a result of our filing of the Chapter 11 Cases, we ceased accruing interest expense on long-term debt reclassified as Liabilities subject to compromise at the Petition Date.~~

Clear Channel Worldwide Holdings, Inc. ("CCWH"), a subsidiary of ours, issued $2,235.0 million of new 9.25% Senior Subordinated Notes due 2024. Proceeds from the new notes were used to pay total principal amount outstanding and accrued and unpaid interest on the $2,200.0 million aggregate principal amount of 7.625% CCWH Series A and Series B Senior Subordinated Notes due 2020.

~~Revenue and expenses “excluding the impact of foreign exchange movements”~~Adjusted EBITDA" in this MD~~&A are presented because management believes that viewing certain financial results without~~&A.

⁽²⁾For a definition of Free cash flow from continuing operations and a reconciliation to Cash provided by operating activities from continuing operations, the ~~impact~~most closely comparable GAAP measure, please see “Reconciliation of ~~fluctuations~~Cash provided by operating activities from continuing operations to Free cash flow from continuing operations” in foreign currency rates facilitates period to period comparisons of business performance and provides useful information to investors. Revenue and expenses “excluding the impact of foreign exchange movements” are calculated by converting the current period’s revenue and expenses in local currency to U.S. dollars using average foreign exchange rates for the prior period. this MD&A.

~~Consolidated~~

Results of Operations

The tables below present the comparison of our historical results of operations for the three months ended March 31, 2020 (Successor) and 2019 to(Predecessor):



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,			% Change
	2020			2019			% Change
Revenue	$	780,634		$	795,797		(1.9)%
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)	301,632			282,874			6.6%
Selling, general and administrative expenses (excludes depreciation and amortization)	344,141			324,934			5.9%
Corporate expenses (excludes depreciation and amortization)	39,949			39,141			2.1%
Depreciation and amortization	96,768			38,290			152.7%
Impairment charges	1,727,857			91,382			nm
Other operating expense, net	(1,066		)	(27		)
Operating income (loss)	(1,730,779		)	19,149			nm
Interest expense (income), net	90,089			(99		)
Loss on investments, net	(9,955		)	(10,237		)
Equity in loss of nonconsolidated affiliates	(564		)	(7		)
Other expense, net	(7,860		)	(127		)
Reorganization items, net	—			(36,118		)
Loss from continuing operations before income taxes	(1,839,247		)	(27,241		)
Income tax benefit	150,511			61,194
Income (loss) from continuing operations	(1,688,736		)	33,953
Loss from discontinued operations, net of tax	—			(169,554		)
Net loss	(1,688,736		)	(135,601		)
Less amount attributable to noncontrolling interest	—			(21,218		)
Net loss attributable to the Company	$	(1,688,736	)	$	(114,383	)

The tables below present the comparison of our revenue streams for the three months ended March 31, ~~2018 is~~2020 (Successor) and 2019 (Predecessor):



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,
	2020			2019
Broadcast Radio	$	461,660		$	487,232
Digital	92,776			75,949
Networks	134,577			138,199
Sponsorship and Events	29,348			39,713
Audio and Media Services	60,227			51,392
Other	4,024			5,123
Eliminations	(1,978		)	(1,811		)
Revenue, total	$	780,634		$	795,797

Consolidated results for the three months ended March 31, 2020 compared to the consolidated results for the three months ended March 31, 2019 were as follows:

(In thousands) Three Months Ended
March 31, %
Change
2019 2018
Revenue $ 1,381,899
$ 1,369,648
0.9%
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 614,919
602,355
2.1%
Selling, general and administrative expenses (excludes depreciation and amortization) 455,723
472,987
(3.6)%
Corporate expenses (excludes depreciation and amortization) 74,700
78,734
(5.1)%
Depreciation and amortization 113,366
151,434
(25.1)%
Impairment charges 91,382
—
—%
Other operating expense, net (3,549 ) (3,286 )
Operating income 28,260
60,852
(53.6)%
Interest expense 114,764
418,397

Loss on investments, net (9,961 ) (90 )
Equity in earnings (loss) of nonconsolidated affiliates (214 ) 157

Gain (loss) on extinguishment of debt (5,474 ) 100

Other expense, net (761 ) (973 )
Reorganization items, net 36,118
192,055

Loss before income taxes (139,032 ) (550,406 )
Income tax benefit 3,431
117,366

Consolidated net loss (135,601 ) (433,040 )
Less amount attributable to noncontrolling interest (21,218 ) (16,046 )
Net loss attributable to the Company $ (114,383 ) $ (416,994 )

~~Consolidated~~ Revenue

~~Consolidated revenue increased $12.3~~Revenue decreased $15.2 million during the three months ended March 31, ~~2019~~2020 compared to the same period of ~~2018. Excluding~~2019. The decrease in Revenue is primarily attributable to the ~~$24.7~~effects of COVID-19, which began to unfold into a global pandemic in early March, resulting in a significant economic downturn as a result of the shut-down of non-essential businesses and shelter-in-place orders. Although revenue growth was strong in the first two months of 2020 compared to the same period of 2019, March revenue declined sharply primarily as a result of a decrease in broadcast radio advertising spend. Broadcast spot revenue decreased $25.6 million, ~~impact~~driven by a $26.0 million decrease in Local spot revenue excluding political, and an $18.1 million decrease in National spot revenue excluding political. The decrease in Broadcast spot revenue was offset by a $14.9 million increase in political revenue as a result of 2020 being a presidential election year. Revenue from ~~movements~~Sponsorship and Events also decreased by $10.4 million, primarily as a result of the postponement or cancellations of events in ~~foreign exchange rates, consolidated~~response to the COVID-19 pandemic. Digital revenue increased ~~$37.0~~$16.8 million, driven by continued growth in podcasting, as well as other digital revenue, including on-demand services. Audio and Media Services revenue also increased $8.8 million primarily as a result of a $7.1 million increase in political revenue.

Direct Operating Expenses

Direct operating expenses increased $18.8 million during the three months ended March 31, ~~2019~~2020 compared to the same period of ~~2018.~~2019. Higher Direct operating expenses were driven by severance payments and other costs specific to our modernization initiatives, which were incurred mainly in January and February, as well as higher content costs from higher podcasting and digital subscription revenue and higher music license fees and digital royalties. The increase in ~~consolidated revenue is due to revenue growth from our Americas outdoor business and our iHM business,~~direct operating expenses was partially offset by lower ~~revenue from our International outdoor business.~~ event production costs as a result of event postponements made in response to the COVID-19 pandemic.

~~Consolidated Direct Operating~~Selling, General and Administrative (“SG&A”) Expenses

~~Consolidated direct operating~~SG&A expenses increased ~~$12.6~~$19.2 million during the three months ended March 31, ~~2019~~2020 compared to the same period of ~~2018. Excluding~~2019. The increase in SG&A was driven by costs incurred in relation to our modernization initiatives announced in February 2020, trade and barter expenses related to the ~~$17.2 million impact from movements~~iHeartRadio Podcast Awards, which aired in ~~foreign exchange rates, consolidated direct operating~~January of 2020, and higher bad debt expense.

Corporate Expenses

Corporate expenses increased ~~$29.8~~$0.8 million during the three months ended March 31, ~~2019~~2020 compared to the same period of ~~2018. Higher direct operating expenses was driven primarily by our iHM and Americas outdoor businesses, primarily~~2019, as a result of costs incurred to support our modernization initiatives, as well as higher share-based compensation expense, which increased $4.2 million as a result of our new post-emergence equity compensation plan. This increase was partially offset by lower employee expenses, including variable incentive compensation expenses, primarily driven by ~~revenue growth.~~the impact of COVID-19.

~~Consolidated Selling, General~~

Depreciation and ~~Administrative (“SG&A”) Expenses~~Amortization

~~Consolidated SG&A expenses decreased $17.3~~Depreciation and amortization increased $58.5 million during the three months ended March 31, ~~2019~~2020, compared to the same period of ~~2018. Excluding the $5.6 million impact from movements in foreign exchange rates, consolidated SG&A expenses decreased $11.7 million during the three months ended March 31,~~ 2019, ~~compared to the same period of 2018. Lower SG&A expenses resulted primarily from lower trade and barter expenses by our iHM business.~~

~~Corporate Expenses~~

~~Corporate expenses decreased $4.0 million during the three months ended March 31, 2019 compared to the same period of 2018,~~ primarily as a result of ~~lower sponsor management fees,~~the application of fresh start accounting, which ~~have not been charged since the March 14, 2018 Petition Date.~~

~~Depreciation~~resulted in significantly higher values of our tangible and ~~Amortization~~

Depreciation and amortization decreased $38.1 million during the three months ended March 31, 2019, compared to the same period of 2018, primarily as a result of assets becoming fully depreciated or fully amortized, including intangible ~~assets that were recorded as part of the merger of iHeartCommunications with iHeartMedia, Inc. in 2008.~~long-lived assets.

Impairment Charges

We perform our annual impairment test on our goodwill ~~Federal Communication Commission ("FCC")~~and FCC licenses ~~billboard permits, and other intangible assets~~ as of July 1 of each year. In addition, we test for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired. As discussed above, as a result of the assumed potential adverse effects caused by the COVID-19 pandemic on estimated future cash flows, we recognized non-cash impairment charges to our indefinite-lived intangible assets and goodwill of $1.7 billion in the three months ended March 31, 2020.

We recognized non-cash impairment charges of $91.4 million in the three months ended March 31, 2019 on our indefinite-lived FCC licenses as a result of an increase in our weighted average cost of capital. See Note 45, Property, Plant and Equipment, Intangible Assets and Goodwill, to the consolidated financial statements located in Item 1 of this Quarterly Report on Form 10-Q for a further description of the impairment charges.

Other Operating Expense, Net

Other operating expense, net of ~~$3.5~~$1.1 million and ~~$3.3~~$0.0 million for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively, relates to net gains and losses recognized on asset disposals.

Interest Expense

Interest expense ~~decreased $303.6~~increased $90.2 million during the three months ended March 31, ~~2019~~2020, compared to the same period of ~~2018~~2019 as a result of the interest recognized on the new debt issued in connection with our emergence from the Chapter 11 Cases. During the period from March 14, 2018 to May 1, 2019, while the Company ~~ceasing~~was a debtor-in-possession, no interest expense was recognized on pre-petition debt. In the Predecessor period, we ceased to accrue interest expense on long-term debt, which was reclassified as Liabilities subject to compromise as of the Petition Date, resulting in $397.5 million in contractual interest not being accrued in the three months ended March 31, 2019. This decrease was partially offset by higher interest expense incurred in conjunction with the refinancing of the $2,200.0 million 7.625% CCWH Senior Subordinated Notes due 2020 with $2,235.0 million in 9.25% CCWH Senior Subordinated Notes due 2024.

Loss on ~~Investments,~~investments, net

During the three months ended March 31, ~~2019,~~2020, we recognized ~~losses~~a loss on investments, net of $10.0 million primarily in connection with estimated credit losses and other-than-temporary declines in the value of our investments. Loss on investments, net was ~~$0.1~~$10.2 million for the three months ended March 31, ~~2018.~~2019.

~~Gain (Loss) on Extinguishment of Debt,~~Other Expense, Net

~~Loss on extinguishment of debt,~~Other expense, net was ~~$5.5~~$7.9 million for the three months ended March 31, ~~2019,~~2020 which ~~primarily resulted from~~related to costs incurred to refinance our Term Loan Facility and professional fees incurred in connection with the Chapter 11 Cases in the Successor period. Such expenses were included within Reorganization items, net in the Predecessor period while the Company was a ~~loss in relation to the refinancing of the CCWH Series A and Series B Senior Subordinated Notes Due 2020. Gain on extinguishment of debt,~~debtor-in-possession.

Other expense, net was $0.1 million for the three months ended March 31, ~~2018.~~2019.

~~Other Expense, Net~~

Other expense, net was $0.8 million for the three months ended March 31, 2019, which related primarily to net foreign exchange losses recognized in connection with intercompany notes denominated in foreign currencies.

Other expense, net was $1.0 million for the three months ended March 31, 2018, which related primarily to expenses incurred in connection with negotiations with lenders and other activities related to our capital structure, partially offset by net foreign exchange gains of $19.8 million recognized in connection with intercompany notes denominated in foreign currencies.

Reorganization Items, Net

During the three months ended March 31, 2019, we recognized Reorganization items, net of $36.1 million related to the Chapter 11 Cases, consisting ~~primarily~~ of professional ~~fees. For~~fees and other bankruptcy related costs.

Income Tax Benefit

The effective tax rate for the Successor Company for the three months ended March 31, 2018, Reorganization items, net of $192.1 million included the write-off of deferred long-term debt fees and original issue discount on debt subject to compromise and professional fees. See Note 13 to our Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q.

~~Income Tax Benefit~~

2020 was 8.2%. The effective tax rate for the period was primarily impacted by the impairment charges discussed above. The deferred tax benefit primarily consists of $125.5 million related to the FCC license impairment charges recorded during the period.

The effective tax rate for continuing operations for the three months ended March 31, 2019 ~~and 2018~~ was ~~2.5% and 21.3%, respectively.~~224.6%. The ~~decrease in the~~2019 effective tax rate iswas primarily ~~attributed to the tax effects of the impairment charge recorded in relation to indefinite-lived FCC licenses in the current period, and also attributed to year over year~~impacted by forecasted changes in the ~~forecasted mix of earnings~~valuation allowance recorded against deferred tax assets resulting from net operating loss carryforwards and ~~tax rates~~interest expense limitation carryforwards in U.S. federal and certain state jurisdictions.

Net Loss Attributable to the ~~jurisdictions in which~~Company

Net loss attributable to the Company ~~operates.~~

~~iHM Results~~increased $1,574.4 million to $1,688.7 million during the three months ended March 31, 2020 compared to a Net loss attributable to the Company of ~~Operations~~

~~Our iHM operating results were as follows:~~

(In thousands) Three Months Ended
March 31, %
Change
2019 2018
Revenue $ 765,810
$ 744,568
2.9%
Direct operating expenses 267,114
241,066
10.8%
SG&A expenses 307,729
321,270
(4.2)%
Depreciation and amortization 30,417
58,333
(47.9)%
Operating income $ 160,550
$ 123,899
29.6%

~~Three Months~~

~~iHM revenue increased $21.2~~$114.4 million during the three months ended March 31, 2019, compared to the same period of 2018. Digital revenue increased $16.6 million driven by growth in podcasting, primarily as a result of our acquisition of Stuff Media in October 2018, as well as other digital revenue, such as live radio and other on-demand services. National broadcast spot revenue increased $16.5 million, primarily as a result of increased programmatic buying by our national customers. Revenue from our Network businesses, including both Premiere and Total Traffic & Weather, also increased $6.1 million. These revenue increases were partially offset by a $19.4 million decrease in Local broadcast spot revenue.

iHM direct operating expenses increased $26.0 million during the three months ended March 31, 2019 compared to the same period of 2018. The increase in Direct operating expenses was primarily driven by higher digital royalties, content costs and compensation-related expenses from higher podcasting and digital subscription revenue. We also incurred higher production costs related to our events, including the iHeartRadio Music Awards. iHM SG&A expenses decreased $13.5 million during the three months ended March 31, 2019 compared to the same period of 2018 primarily due to ~~lower trade and barter expenses, primarily resulting from~~ the ~~timing, partially offset by higher third-party digital sales activation fees.~~factors discussed above.

~~Americas Outdoor Advertising Results of Operations~~

~~Our Americas outdoor operating results were as follows:~~

(In thousands) Three Months Ended
March 31, %
Change
2019 2018
Revenue $ 272,722
$ 255,847
6.6%
Direct operating expenses 130,519
124,873
4.5%
SG&A expenses 51,636
48,950
5.5%
Depreciation and amortization 39,496
44,504
(11.3)%
Operating income $ 51,071
$ 37,520
36.1%

~~Three Months~~

Americas outdoor revenue increased $16.9 million during the three months ended March 31, 2019 compared to the same period of 2018. The increase was driven by revenue from airports and digital and print billboards.

Americas outdoor direct operating expenses increased $5.6 million during the three months ended March 31, 2019 compared to the same period of 2018. The increase was driven by higher site lease expenses, primarily related to increased revenue. Americas outdoor SG&A expenses increased $2.7 million during the three months ended March 31, 2019 compared to the same period of 2018, primarily related to higher variable employee compensation expenses.

~~International Outdoor Advertising Results of Operations~~

~~Our International outdoor operating results were as follows:~~

(In thousands) Three Months Ended
March 31, %
Change
2019 2018
Revenue $ 314,394
$ 342,551
(8.2)%
Direct operating expenses 217,308
236,416
(8.1)%
SG&A expenses 71,330
78,458
(9.1)%
Depreciation and amortization 34,581
38,565
(10.3)%
Operating income $ (8,825 ) $ (10,888 ) (18.9)%

~~Three Months~~

International outdoor revenue decreased $28.2 million during the three months ended March 31, 2019 compared to the same period of 2018. Excluding the $24.7 million impact from movements in foreign exchange rates, International outdoor revenue decreased $3.5 million during the three months ended March 31, 2019 compared to the same period of 2018. The decrease in revenue is due primarily to lower revenue as a result of contracts not being renewed in certain countries, including Italy and Spain. This decrease was partially offset by growth in multiple countries, including Sweden, which continues to benefit from new digital inventory and strong market conditions.

International outdoor direct operating expenses decreased $19.1 million during the three months ended March 31, 2019 compared to the same period of 2018. Excluding the $17.2 million impact from movements in foreign exchange rates, International outdoor direct operating expenses decreased $1.9 million during the three months ended March 31, 2019 compared to the same period of 2018. The decrease was primarily due to lower site lease expenses in countries with lower revenue, including Italy, partially offset by site lease expenses related to new contracts. International outdoor SG&A expenses decreased $7.1 million during the three months ended March 31, 2019 compared to the same period of 2018. Excluding the $5.6 million impact from movements in foreign exchange rates, International outdoor SG&A expenses decreased $1.5 million during the three months ended March 31, 2019 compared to the same period of 2018.

Reconciliation of ~~Segment~~ Operating Income (Loss) to ~~Consolidated Operating Income~~Adjusted EBITDA

(In thousands) Three Months Ended
March 31,
2019 2018
iHM $ 160,550
$ 123,899
Americas outdoor 51,071
37,520
International outdoor (8,825 ) (10,888 )
Other 1,993
(370 )
Other operating expense, net (3,549 ) (3,286 )
Impairment charges (91,382 ) —
Corporate expense ⁽¹⁾
(81,598 ) (86,023 )
Consolidated operating income $ 28,260
$ 60,852



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,		%
	2020			2019		Change
Operating income (loss)	$	(1,730,779	)	$	19,149	nm
Depreciation and amortization⁽¹⁾	96,768			38,290
Impairment charges	1,727,857			91,382
Other operating expense, net	1,066			27
Share-based compensation expense⁽²⁾	4,625			392
Restructuring and reorganization expenses	40,802			7,811
Adjusted EBITDA⁽³⁾	$	140,339		$	157,051	(10.6	)%

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,
	2020			2019
Net loss	$	(1,688,736	)	$	(135,601	)
Loss from discontinued operations, net of tax	—			169,554
Income tax benefit	(150,511		)	(61,194		)
Interest expense (income), net	90,089			(99		)
Depreciation and amortization⁽¹⁾	96,768			38,290
EBITDA	$	(1,652,390	)	$	10,950
Reorganization items, net	—			36,118
Loss on investments, net	9,955			10,237
Other expense, net	7,860			127
Equity in loss of nonconsolidated affiliates	564			7
Impairment charges	1,727,857			91,382
Other operating expense, net	1,066			27
Share-based compensation expense⁽²⁾	4,625			392
Restructuring and reorganization expenses	40,802			7,811
Adjusted EBITDA⁽³⁾	$	140,339		$	157,051


(1)	Increase in Depreciation and amortization is driven by the application of fresh start accounting, resulting in significantly higher values of our tangible and intangible assets.


(2)	Increase in Share-based compensation expense is due to our new equity compensation plan entered into in connection with our Plan of Reorganization.

(3)

We define Adjusted EBITDA as consolidated Operating income (loss) adjusted to exclude restructuring and reorganization expenses included within Direct operating expenses, SG&A expenses, Corporate expenses ~~include~~and share-based compensation expenses ~~related to iHM, Americas outdoor, International outdoor and our Other category,~~included within Corporate expenses, as well as ~~overall executive, administrative~~the following line items presented in our Statements of Operations: Depreciation and ~~support functions.~~amortization, Impairment charges and Other operating income (expense), net. Alternatively, Adjusted EBITDA is calculated as Net income (loss), adjusted to exclude (Income) loss from discontinued operations, net of tax, Income tax (benefit) expense, Interest expense, Depreciation and amortization, Reorganization items, net, Loss on investments, net, Other (income) expense, net, Equity in earnings (loss) of nonconsolidated affiliates, net, Impairment charges, Other operating (income) expense, net, Share-based compensation, restructuring and reorganization expenses. Restructuring expenses primarily include severance expenses incurred in connection with cost saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle. Reorganization expenses primarily include the amortization of retention bonus amounts paid or payable to certain members of management directly as a result of the Reorganization. We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance. This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management. We believe this measure is an important indicator of our operational strength and performance of our business because it provides a link between operational performance and operating income. It is also a primary measure used by management in evaluating companies as potential acquisition targets. We believe the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. We believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates. In addition, we believe this measure is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry. Since Adjusted EBITDA is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, operating income or net income (loss) as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies. Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs. Because it excludes certain financial information compared with operating income and compared with consolidated net income (loss), the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded.

Reconciliation of Cash provided by operating activities from continuing operations to Free cash flow from continuing operations



(In thousands)	Successor Company			Predecessor Company
	Three Months Ended March 31,			Three Months Ended March 31,
	2020			2019
Cash provided by operating activities from continuing operations	$	91,540		$	136,666
Purchases of property, plant and equipment by continuing operations	(21,664		)	(22,953		)
Free cash flow from continuing operations⁽¹⁾	$	69,876		$	113,713

(1)

We define Free cash flow from (used for) continuing operations ("Free Cash Flow") as Cash provided by (used for) operating activities from continuing operations less capital expenditures, which is disclosed as Purchases of property, plant and equipment by continuing operations in the Company's Consolidated Statements of Cash Flows. We use Free Cash Flow, among other measures, to evaluate the Company’s liquidity and its ability to generate cash flow. We believe that Free Cash Flow is meaningful to investors because we review cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered to be a necessary component of ongoing operations. In addition, we believe that Free Cash Flow helps improve investors' ability to compare our liquidity with other companies. Since Free Cash Flow is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, Cash provided by operating activities and may not be comparable to similarly titled measures employed by other companies. Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.

Share-Based Compensation Expense

WeHistorically, we had granted restricted shares of the Company's Class A common stock to certain key individuals. In connection with the effectiveness of our Plan of Reorganization, all unvested restricted shares were canceled.

Pursuant to the new equity incentive plan (the "Post-Emergence Equity Plan") we adopted in connection with the effectiveness of our Plan of Reorganization, we have granted ~~restricted stock and CCOH has granted restricted stock,~~ restricted stock units and options to purchase shares of ~~CCOH's~~the Company's Class A common stock to certain key individuals.

Share-based compensation expenses are recorded in corporate expenses and were ~~$2.2~~$4.6 million and ~~$2.7~~$0.4 million for the three months ended March 31, 2020 and 2019, ~~and 2018,~~ respectively.

~~iHeartMedia Unvested Share-Based Compensation~~

As of March 31, ~~2019,~~2020, there was ~~$1.7~~$52.7 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on service conditions and $15.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based on market performance and service conditions. As of the Effective Date of the Plan of Reorganization, all unvested shared-based compensation will be eliminated.

~~CCOH Unvested Share-Based Compensation~~

CCOH has granted restricted stock, restricted stock units and options to purchase shares of CCOH's Class A common stock to certain key individuals under equity incentive plans. Certain employees receive equity awards pursuant to our equity incentive plans. As of March 31, 2019, there was $13.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized over a weighted average period of approximately ~~2.9~~3.2 years.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The following discussion highlights cash flow activities during the ~~three months ended March 31, 2019 and 2018:~~periods presented:


(In thousands)	Three Months Ended March 31,						Successor Company			Predecessor Company
							Three Months Ended March 31,			Three Months Ended March 31,
	2019			2018			2020			2019
Cash provided by (used for):
Operating activities	$	88,987		$	175,476		$	91,540		$	88,987
Investing activities	$	(52,411	)	$	(37,196	)	$	(31,800	)	$	(52,411	)
Financing activities	$	1,996		$	(92,445	)	$	187,283		$	1,996
Free Cash Flow⁽¹⁾							$	69,876		$	113,713

⁽¹⁾For a definition of Free cash flow from continuing operations and a reconciliation to Cash provided by operating activities from continuing operations, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities from continuing operations to Free cash flow from continuing operations” in this MD&A.

Operating Activities

Cash provided by operating activities for the three months ended March 31, 2020 was $91.5 million compared to $89.0 million ~~during~~of cash provided by operating activities in the three months ended March 31, 2019.

Cash provided by operating activities from continuing operations decreased from $136.7 million in the three months ended March 31, 2019 ~~compared~~ to ~~$175.5~~$91.5 million ~~of cash provided by operating activities during~~in the three months ended March 31, ~~2018.~~2020 primarily as a result of cash interest payments made by continuing operations increasing $100.0 million as a result of interest payments on our debt issued upon our emergence compared to pre-petition interest payments made in the prior year. The Company ceased paying interest on long-term debt classified as Liabilities subject to compromise after the March 14, 2018 petition date. This decrease was offset by an increase in cash provided by operating activities ~~is primarily attributed~~attributable to ~~cash paid in relation to Reorganization items, net of $33.9 million during the three months ended March 31, 2019 and~~ changes in working capital balances, particularly accounts payable, which were affected by the timing of payments.

Investing Activities

Cash ~~paid~~used for ~~interest was $103.9~~investing activities of $31.8 million during the three months ended March 31, ~~2019 compared to $94.5 million during the three months ended March 31, 2018. The increase of $9.4~~2020 primarily reflects $21.7 million in cash ~~paid~~used for ~~interest is due~~capital expenditures. We spent $18.6 million for capital expenditures in our Audio segment primarily related to ~~the refinancing of the $2,200.0 million 7.625% CCWH Senior Subordinated Notes due 2020 with $2,235.0~~IT infrastructure, $0.7 million in ~~9.25% CCWH Senior Subordinated Notes due 2024 during the three months ended March 31, 2019.~~

~~Investing Activities~~our Audio & Media Services segment, primarily related to acquired software and $2.4 million in Corporate primarily related to equipment and software purchases.

Cash used for investing activities of $52.4 million during the three months ended March 31, 2019 primarily ~~reflected $51.1~~reflects $27.6 million in cash used for investing activities from discontinued operations. In addition, we used $23.0 million for capital expenditures. We spent ~~$20.7~~$20.1 million for capital expenditures in our ~~iHM~~Audio segment primarily related to IT infrastructure, ~~$11.4~~$0.7 million in our ~~Americas outdoor~~Audio & Media Services segment, primarily related to ~~the construction of new advertising structures, such as digital boards, $14.8 million in our International outdoor segment primarily related to street furniture~~acquired software and ~~transit advertising structures, including digital displays and $4.2~~$2.2 million in Corporate primarily related to equipment and software purchases.

~~Cash used for investing activities of $37.2 million during the three months ended March 31, 2018 primarily reflected~~ ~~$38.7 million~~ ~~used for capital expenditures. We spent~~ ~~$9.1 million~~ for capital expenditures in our iHM segment primarily related to IT infrastructure, $12.9 million in our Americas outdoor segment primarily related to the construction of new advertising structures, such as digital displays, $15.3 million in our International outdoor segment primarily related to street furniture and transit advertising structures and $1.4 million in Corporate primarily related to equipment and software purchases.

Financing Activities

Cash provided by financing activities of $187.3 million during the three months ended March 31, 2020 primarily resulted from the $350.0 million draw on our ABL Facility, partially offset by the $150.0 million prepayment on our Term Loan Facility.

Cash provided by financing activities was $2.0 million during the three months ended March 31, 2019. Cash used for financing activities from continuing operations of $6.3 million during the three months ended March 31, 2019 primarily resulted from ~~net proceeds from long-term debt.~~

~~Cash used for financing activities of $92.4 million during the three months ended March 31, 2018 primarily resulted from~~ payments on ~~long-term debt and~~our former debtor-in-possession facility.

Anticipated Cash Requirements

Our primary sources of liquidity are cash on ~~our receivables based credit facility.~~

~~Liquidity After Filing the Chapter 11 Cases~~

~~iHeartCommunications' filing~~hand, which consisted of the Chapter 11 Cases constituted an event of default that accelerated its obligations under its debt agreements. Due to the Chapter 11 Cases, however, the creditors' ability to exercise remedies under iHeartCommunications' debt agreements were stayed$646.8 million as of March ~~14, 2018, the Petition Date,~~31, 2020, and ~~continue to be stayed.~~

The RSA provides certain milestones for the Restructuring Transactions. Failure of the Debtors to satisfy these milestones without a waiver or consensual amendment would provide the Consenting Stakeholders a termination right under the RSA. These milestones include (i) the filing of a plan of reorganization and disclosure statement, in form and substance reasonably acceptable to the Debtors and the Consenting Stakeholders, which were filed initially with the Bankruptcy Court on April 28, 2018, (ii) the filing of a motion for approval of the disclosure statement by May 31, 2018, which deadline was subsequently extended to June 22, 2018, and which motion was filed with the Bankruptcy Court on that date, (iii) the entry of an order approving the disclosure statement by July 27, 2018 (subject to one additional 20-day extension on the terms set forth in the RSA), which order was ultimately entered on September 20, 2018 (iv) the entry of an order confirming the plan of reorganization within 75 days of the entry of an order approving the disclosure statement, which order was ultimately entered on January 22, 2019 and (v) the Effective Date occurring by March 14, 2019, which has not yet occurred but is currently expected to occur on or about May 1, 2019. The Debtors satisfied the first and second milestones, but did not satisfy the subsequent milestones and as a result, certain of the Consenting Stakeholders presently have the right to terminate the RSA, but as of the date hereof the RSA has not been terminated.

In general, as debtors-in-possession under the Bankruptcy Code, we are authorized to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to first day and second day motions filed with the Bankruptcy Court, the Bankruptcy Court authorized us to conduct our business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing us to: (i) pay employees’ wages and related obligations; (ii) continue to operate our cash management system in a form substantially similar to prepetition practice; (iii) use cash collateral on an interim basis; (iv) continue to honor certain obligations related to on-air talent, station affiliates and royalty obligations; (v) continue to maintain certain customer programs; (vi) pay taxes in the ordinary course; (vii) continue our surety bond program; and (viii) maintain our insurance program in the ordinary course.

~~The filing of the Chapter 11 Cases is intended to permit iHeartCommunications to reduce its indebtedness to achieve a manageable capital structure.~~

On April 28, 2018, the Debtors filed a plan of reorganization (as amended, the “Plan of Reorganization”) and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court pursuant to Chapter 11 of the Bankruptcy Code. On June 21, 2018, the Debtors filed an amended Disclosure Statement with the Bankruptcy Court. On August 5, 2018, the Debtors filed an amended Plan of Reorganization with the Bankruptcy Court. On August 23, 2018, the Debtors filed a second amended Plan of Reorganization and a further amended Disclosure Statement with the Bankruptcy Court. On August 28, 2018, the Debtors filed a third amended Plan of Reorganization and a further amended Disclosure Statement with the Bankruptcy Court. On September 12, 2018, the Debtors filed a fourth amended Plan of Reorganization and a further amended Disclosure Statement with the Bankruptcy Court. On September 18, 2018, the Debtors filed a revised fourth amended Plan of Reorganization and a further amended Disclosure Statement with the Bankruptcy Court. On September 20, 2018, the Bankruptcy Court entered an order approving the Disclosure Statement and related solicitation and notice procedures for voting on the Plan of Reorganization, and the Debtors filed solicitation versions of the Plan of Reorganization and Disclosure Statement.

Following the entry of the order approving the Disclosure Statement, the Debtors, certain Consenting Stakeholders, and the Official Committee of Unsecured Creditors reached an agreement regarding the treatment of general unsecured claims under the Plan of Reorganization. On October 10, 2018, the Debtors filed a fifth amended Plan of Reorganization and a supplement to the Disclosure Statement (the “Disclosure Statement Supplement”). On October 18, 2018, the Bankruptcy Court entered an order approving the Disclosure Statement Supplement and the continued solicitation of holders of general unsecured claims for voting on the Plan of Reorganization, and the Debtors filed solicitation versions of the Plan of Reorganization and Disclosure Statement Supplement. On January 22, 2019, the Bankruptcy Court entered an order confirming the Plan of Reorganization.

Pursuant to the Plan of Reorganization, we will issue new common stock, and special warrants to purchase common stock (“Special Warrants”) in exchange for claims against or interests in the Debtors. Holders of claims with respect to the iHeartCommunications term loan credit agreement, priority guarantee notes, 14% Senior Notes due 2021 and legacy notes will receive their pro rata share of a distribution of new term loans and new notes of iHeartCommunications and 99% of our new equity interests, subject to dilution by any common stock issued pursuant to a post-emergence equity incentive plan, as set forth in the Plan of Reorganization to be filed prior to the Effective Date. The preliminary terms of the new term loans and new notes are set forth in the Disclosure Statement, and the specific terms of the new term loans and new notes will be set forth in a supplement to the Plan of Reorganization. Holders of equity interests in iHeartMedia will receive their pro rata share of 1% of our new equity interests, subject to dilution by any common stock issued pursuant to a post-emergence equity incentive plan. On the Effective Date, the applicable Debtors will execute documents to effect the Separation of CCOH from iHeartMedia, and the equity interests of the successor to CCOH currently held by subsidiaries of iHeartMedia will be distributed to holders of claims with respect to the term loan credit agreement and priority guarantee notes.

The Plan of Reorganization has been confirmed by the Bankruptcy Court, but there can be no assurance that the Effective Date for the Plan of Reorganization will occur on or about May 1, 2019 or at all.

~~During the pendency of the Chapter 11 Cases, iHeartCommunications' principal sources of liquidity have been limited to~~ cash flow from ~~operations, cash on hand and borrowings~~operations. On March 13, 2020, iHeartCommunications, Inc. (“iHeartCommunications”), our indirect wholly-owned subsidiary, borrowed $350.0 million principal amount under ~~its DIP credit facility. Our ability~~our $450.0 million ABL Facility as a precautionary measure to maintain adequate liquidity through the reorganization process and beyond depends on successful operation of our business, and appropriate management of operating expenses and capital spending. Our anticipated liquidity needs are highly sensitive to changespreserve iHeartCommunications’ financial flexibility in ~~each of these and other factors.~~

On January 18, 2018, iHeartCommunications incurred $25.0 million of additional borrowings under the revolving credit loan portion of its receivables based credit facility bringing its total outstanding borrowings under the facility to $430.0 million. In February 2018, iHeartCommunications prepaid $59.0 million on the revolving credit loan portion of this facility. On the Petition Date, we incurred a prepayment premium of $5.5 million upon accelerationlight of the ~~loans and pre-petition accrued interest and fees~~

~~totaling $2.4 million, which were added~~current uncertainty in the global economy resulting from the COVID-19 pandemic. The proceeds will be available if needed to ~~the principal amount outstanding under the facility, bringing the total outstanding borrowings under the facility to $379.0 million.~~ On June 14, 2018, iHeartCommunications entered into a Superpriority Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”), as parent borrower, with Holdings, Subsidiary Borrowers, Citibank, N.A., as a lender and administrative agent, the swing line lenders and letter of credit issuers named therein and thefund iHeartCommunications’ future working capital requirements or other lenders from time to time party thereto. The entry into the DIP Credit Agreement was approved by an order of the Court (the “DIP Order”). We used proceeds from this facility (the "DIP Facility") and cash on hand to repay all amounts owed under and terminate iHeartCommunications' receivables based credit facility.general corporate purposes. As of March 31, ~~2019, we~~2020, iHeartCommunications had noa facility size of $450.0 million and utilization of $350.0 million outstanding borrowings ~~under~~and $47.3 million outstanding letters of credit, resulting in $52.7 million of availability, such availability being subject to further restrictions contained within the ~~DIP~~credit agreement governing the ABL Facility.

~~In connection with~~ To the cash management arrangements with CCOH, iHeartCommunications maintains an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the "Intercompany Note"), which matures on May 15, 2019. As of December 31, 2017,extent decreases in our accounts receivable result in the principal amount outstanding under the Intercompany Note was $1,067.6 million. As a result of the Chapter 11 Cases, CCOH wrote down the balance of the note by $855.6 million during the fourth quarter of 2017 to reflect the estimated recoverable amount of the Intercompany Note as of December 31, 2017, based on CCOH management's best estimate of the cash settlement amount. As of the Petition Date, the principal amount outstanding under the Intercompany Note was $1,031.7 million. As of March 31, 2019, the asset recorded in respect of the Intercompany Note on CCOH's balance sheet was $154.8 million. Pursuantborrowing base decreasing to an ~~order entered by~~amount below the Bankruptcy Court, as of March 14, 2018, the balance of the Intercompany Note is frozen, and following March 14, 2018, intercompany allocations that would have been reflected in adjustments to the balance of the Intercompany Note are instead reflected in an intercompany balance that accrues interest at a rate equal to the interest under the Intercompany Note. As of March 31, 2019, the liability recorded in respect of the post-petition intercompany balance on CCOH's balance sheet was $73.7 million. The Separation Agreement contemplates that in connection with the Separation (i) the cash sweep arrangement under the Corporate Services Agreement between CCOH and iHeartCommunications will terminate, and (ii) any agreements or licenses requiring royalty payments to the Debtors by CCOH for trademarks or other intellectual property, will terminate effective as of December 31, 2018. The Debtors agreed to (i) the repayment of the post-petition intercompany balance outstanding in favor of the Debtors as of December 31, 2018, which was equal to $21.6 million as of that date and (ii) the waiver of the set-off value of any royalties and IP license fees owed to iHeartCommunications equal to approximately $31.8 million from March 14, 2018 through December 31, 2018, such that the resulting intercompany balance on such date was $10.2 million in favor of CCOH, payable on the Effective Date. Since January 1, 2019, CCOH has incurred an additional intercompany liability of $52.1 million in favor of iHeartCommunications as of March 31, 2019. Pursuant to an amendment to the Separation Agreement (the "Separation Agreement Amendment"), CCOH has agreed to offset the $149 million amount owed by us on the Effective Date by $52.1 million, resulting in a total net payment to CCOH of approximately $107 million on the Effective Date (including the $10.2 million payment discussed above). Pursuant to the Amendment, within 15 business days after the Effective Date, iHeartCommunications and CCOH will pay the other any intercompany liability incurred from April 1, 2019 through the Effective Date. The Intercompany Note and Due to iHeartCommunications Note are eliminated in consolidation in our consolidated financial statements. The Bankruptcy Court approved a final order to allow us to continue to provide the day-to-day cash management services for CCOH during the Chapter 11 Cases. Upon the occurrence of the Separation on the Effective Date,drawn, we ~~will cease to provide these services for CCOH.~~

The Bankruptcy Court’s order also approves iHeartCommunications' continuing to provide services to CCOH pursuant to the Corporate Services Agreement during the Chapter 11 Cases. Upon the occurrence of the Separation on the Effective Date, we will enter into a new Transition Services Agreement with iHeartMedia Management Services, Inc. (“iHM Management Services”), iHeartCommunications and CCOH, for one year from the Effective Date (subject to certain rights of New CCOH to extend up to one additional year), pursuant to which iHM Management Services expects to provide, or expects iHeartCommunications, iHeart Operations, us or any of our subsidiaries to provide, CCH with certain administrative and support services and other assistance which CCH will utilize in the conduct of its business as such business was conducted prior to the Separation.

Following the Chapter 11 Cases, all interest payments due on debt held by the Debtors were stayed, which included $165.1 million on the Senior Secured Credit Facilities, $78.8 million on the 9.0% Priority Guarantee Notes due 2021, $45.0 million on the 9.0% Priority Guarantee Notes due 2022, $50.5 million on the 10.625% Priority Guarantee Notes due 2023, $49.0 million on the 11.25% Priority Guarantee Notes due 2021 and $124.7 million on the 14.0% Senior Notes due 2021 during the three months ended March 31, 2019.

The Consolidated Financial Statements included in this Quarterly Report on Form 10-Q have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The Consolidated Financial Statements do not reflect any adjustments that might result from the outcome of the Chapter 11 Cases, including but not limited to future effects from relief or emergence. We have significant indebtedness and we have reclassified all of the Debtors' indebtedness other than the DIP Facility to Liabilities Subject to Compromise at March 31, 2019. Our level of indebtedness has adversely impacted and is continuing to adversely impact our

financial condition. As a result of our financial condition, the defaults under our debt agreements, and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists that we will be able to continue as a going concern.

~~Liquidity Following the Separation and Reorganization~~

The Separation and Reorganization will result in a new capital structure with significantly lower levels of long-term debt and a corresponding decrease in debt service requirements after emergence compared to historical debt levels. As a result of the Separation and Reorganization, our consolidated long-term debt is expected to decrease from $20.5 billion to approximately $5.8 billion. In 2018, we paid $398.0 million of cash interest, and incurred contractual interest of $1,189.1 million that was not paid. In 2017, we paid cash interest of $1,772.4 million. After the Effective Date, we anticipate that our annual cash interest payments will be less than $400 million.

~~In connection with the Reorganization and Separation, we anticipate that we will~~may be required to make ~~certain cash payments, including approximately $107 million to be paid to CCOH in settlement~~a partial repayment of ~~intercompany payable balances as~~amounts outstanding under our ABL Facility. While we cannot determine the full extent of ~~March 31, 2019, $17.7 million to cure contracts, $19.7 million~~COVID-19’s impact on our business at this time, we are monitoring this rapidly evolving situation closely. The challenges that COVID-19 has created for ~~general unsecured claims,~~advertisers and ~~approximately $124 million for professional fees (of which $99 million~~consumers has impacted our revenue and has created a business outlook that is ~~to be paid on the Effective Date). Other anticipated cash requirements for the year ended December 31, 2019 include capital expenditures of approximately $129 million and $47.4 million to be paid~~less clear in the ~~fourth quarter of 2019 for the remaining consideration for two businesses acquired in the fourth quarter of 2018.~~near term.

Following the Effective Date, we expect that our primary sources of liquidity will be cash on hand, cash flow from operations and borrowing capacity under the New ABL Facility. Upon emergence, we expect to have cash on hand of approximately $60 million after payment of settlement amounts and professional fees on the Effective Date. As of March 31, 2019, we had no borrowings outstanding under the DIP Facility, a borrowing base of $426.8 million, $59.0 million of outstanding letters of credit and had an availability block requirement of $37.5 million, resulting in $330.3 million of excess availability.

~~Following the Effective Date, we~~We expect that our primary anticipated uses of liquidity will be to fund our working capital, ~~debt service,~~make interest payments, fund capital expenditures and maintain operations in light of the COVID-19 pandemic and other obligations. These other obligations include dividend payments to be due to the investor of preferred stock of iHeart Operations, the terms of which are further described in Note 96, Long-term Debt to our financial statements included ~~herein,~~herein. We anticipate that we will have approximately $86 million of cash interest payments in the second quarter of 2020 and ~~any borrowings~~approximately $258 million of cash interest payments in the remainder of 2020. As a result of certain favorable tax provisions in the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, we expect our 2020 cash income tax payments to be ~~provided~~insignificant and we expect to ~~CCOL under~~be able to defer certain employment taxes into future periods. Over the ~~iHC Line~~past ten years, we have transitioned our Audio business from a single platform radio broadcast operator to a company with multiple platforms, including podcasting, networks and live events. Early in the first quarter of ~~Credit. Our ability~~2020, we implemented our modernization initiatives to take advantage of the significant investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies. We have also invested in numerous technologies and businesses to increase the competitiveness of our inventory with our advertisers and our audience.

In response to the COVID-19 pandemic, in an effort to further strengthen the Company's financial flexibility and efficiently manage through the period of economic slowdown and uncertainty, the Company is proactively taking the following measures:

Substantial reduction in certain operating expenses, such as suspension of new employee hiring, travel and entertainment expenses, 401(k) matching expenses, consulting fees and other discretionary expenses.

Reduction in planned capital expenditures to a level that we believe will still enable the Company to make key investments to continue our strategic initiatives related to Smart Audio and Digital, including podcasting.

Reduction in compensation for senior management and other employees of the Company, including a 100% reduction of the Company's Chief Executive Officer's annual base salary and bonus.

Implementation of a furlough for certain employees that are non-essential at this time.

In addition, as a result of the expected decrease in forecasted revenues as a result of the COVID-19 pandemic, we expect variable expenses including event production costs and sales commissions, as well as other variable compensation, to decrease.

We believe that our cash balance, which includes the additional funds from drawing on our ABL Facility, provides us with sufficient liquidity to fund our ~~working capital,~~core operations, maintain key personnel and meet our other material obligations. In addition, none of our long-term debt ~~service,~~includes maintenance covenants that could trigger early repayment. We fully appreciate the unprecedented challenges posed by the COVID-19 pandemic, however, we remain confident in our business, our employees and our strategy. We believe that our ability to generate cash flow from operations from our business initiatives and our current cash

on hand will provide sufficient resources to fund and operate our business, fund capital expenditures and other obligations and ~~to comply with the financial covenants under our new financing agreements, depends~~make interest payments on our ~~future operating performance and cash flows from operations, which are subject~~long-term debt for at least the next 12 months. If these sources of liquidity need to ~~prevailing economic conditions and other factors, many of which are beyond our control. A significant amount of our~~be augmented, additional cash requirements ~~will~~would likely be ~~for~~financed through the issuance of debt ~~service obligations, and we anticipate~~or equity securities; however, there can be no assurances that we will ~~have approximately $0.4 billion~~be able to obtain additional debt or equity financing on acceptable terms or at all in the future.

On February 3, 2020, iHeartCommunications made a $150.0 million prepayment using cash on hand and entered into an agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of ~~annual cash interest payments after~~3.00%, or the Base Rate (as defined in the credit agreement governing the Term Loan Facility (the “Credit Agreement”)) plus a margin of 2.00% and to modify certain covenants contained in the Credit Agreement.

In connection with the Separation and Reorganization, we entered into the following transactions which may require ongoing capital commitments:

Transition Services Agreement

Pursuant to the Transition Services Agreement between us, iHeartMedia Management Services, Inc. (“iHM Management Services”), iHeartCommunications and CCOH, for one year from the Effective ~~Date. Our future success~~Date, we have agreed to provide, CCOH with certain administrative and support services and other assistance which CCOH will ~~depend~~utilize in the conduct of its business as such business was conducted prior to the Separation. As of March 31, 2020, most of these services have been successfully transitioned to CCOH. The Company continues to provide certain information systems and other limited support services. CCOH has requested extensions of the term for certain individual services, primarily related to information systems, for one-month periods through June 30, 2020 and may request further one-month extensions of such services up to May 1, 2021.

CCOH may terminate the Transition Services Agreement with respect to all or any individual service, in whole or in part, upon 30 days’ prior written notice, provided that any co-dependent services must be terminated concurrently. For additional information, see Note 2, Discontinued Operations to the consolidated financial statements located in Item 1 of this Quarterly Report on ~~our ability~~Form 10-Q for a further description.

New Tax Matters Agreement

In connection with the Separation, we entered into the New Tax Matters Agreement by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., CCH, CCOH and Clear Channel Outdoor, Inc., to ~~achieve our operating performance goals, address our annual cash interest obligations~~allocate the responsibility of iHeartMedia and ~~reduce our outstanding debt.~~its subsidiaries, on the one hand, and CCOH and its subsidiaries, on the other, for the payment of taxes arising prior and subsequent to, and in connection with, the Separation.

Sources of Capital

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had the following debt outstanding, net of cash and cash equivalents:

(In millions) March 31, 2019 December 31, 2018
Senior Secured Credit Facilities:
Term Loan D Facility Due 2019 $ —
$ —
Term Loan E Facility Due 2019 —
—
Debtors-in-Possession Facility⁽¹⁾
—
—
9.0% Priority Guarantee Notes Due 2019 —
—
9.0% Priority Guarantee Notes Due 2021 —
—
11.25% Priority Guarantee Notes Due 2021 —
—
9.0% Priority Guarantee Notes Due 2022 —
—
10.625% Priority Guarantee Notes Due 2023 —
—
CCO Receivables Based Credit Facility due 2023 —
—
Other Secured Subsidiary Debt 3.8
3.9
Total Secured Debt 3.8
3.9

14.0% Senior Notes Due 2021 —
—
Legacy Notes:
6.875% Senior Notes Due 2018 —
—
7.25% Senior Notes Due 2027 —
—
CCWH Senior Notes:
6.5% Series A Senior Notes Due 2022 735.8
735.8
6.5% Series B Senior Notes Due 2022 1,989.2
1,989.2
CCWH Senior Subordinated Notes:
7.625% Series A Senior Notes Due 2020⁽²⁾
—
275.0
7.625% Series B Senior Notes Due 2020⁽²⁾
—
1,925.0
9.25% Senior Notes Due 2024⁽²⁾
2,235.0
—
Clear Channel International B.V. 8.75% Senior Notes due 2020 375.0
375.0
Other Subsidiary Debt 46.6
46.1
Purchase accounting adjustments and original issue discount (0.9 ) (0.7 )
Long-term debt fees (44.3 ) (25.9 )
Liabilities subject to compromise⁽³⁾
15,143.7
15,149.5
Total Debt 20,483.9
20,472.9
Less: Cash and cash equivalents 448.1
406.5
$ 20,035.8
$ 20,066.4



(In millions)	Successor Company
	March 31, 2020			December 31, 2019
Term Loan Facility due 2026⁽¹⁾	$	2,096.0		$	2,251.3
Asset-based Revolving Credit Facility due 2023⁽²⁾	350.0			—
6.375% Senior Secured Notes due 2026	800.0			800.0
5.25% Senior Secured Notes due 2027	750.0			750.0
4.75% Senior Secured Notes due 2028	500.0			500.0
Other Secured Subsidiary Debt	20.5			21.0
Total Secured Debt	4,516.5			4,322.3

8.375% Senior Unsecured Notes due 2027	1,450.0			1,450.0
Other Subsidiary Debt	6.2			12.5
Long-term debt fees	(19.1		)	(19.4		)
Total Debt	5,953.6			5,765.4
Less: Cash and cash equivalents	646.8			400.3
	$	5,306.8		$	5,365.1

(1)

~~The Debtors-in-Possession Facility (the "DIP" Facility), which matures~~On February 3, 2020, iHeartCommunications made a $150.0 million prepayment using cash on ~~the earlier of the emergence date from the Chapter 11 Cases or June 14, 2019, provides for borrowings of up to $450.0 million. The DIP Facility also includes a feature to convert~~hand and entered into an ~~exit facility at emergence, upon meeting~~agreement to amend the Term Loan Facility to reduce the interest rate to LIBOR plus a margin of 3.00%, or the Base Rate (as defined in the credit agreement) plus a margin of 2.00% and to modify certain ~~conditions. As of March 31, 2019,~~covenants contained in the ~~Company had a borrowing base of $426.8 million under iHeartCommunications' DIP Facility, had no outstanding borrowings, had $59.0 million of outstanding letters of~~ credit ~~and had an availability block requirement of $37.5 million, resulting in $330.3 million of excess availability.~~agreement.

(2)

On ~~February 4, 2019, CCWH, a subsidiary~~March 13, 2020, iHeartCommunications borrowed $350.0 million under the ABL Facility, the proceeds of CCOH, delivered a conditional notice of redemption calling all of its outstanding $275.0 million aggregate principal amount of 7.625% Series A Senior Subordinated Notes due 2020 (the “Series A CCWH Subordinated Notes”) and $1,925.0 million aggregate principal amount of 7.625% Series B Senior Subordinated Notes due 2020 (the “Series B CCWH Subordinated Notes” and together with the Series A CCWH Subordinated Notes, the “CCWH Subordinated Notes”) for redemption on March 6, 2019. The redemption was conditionedwhich were invested as cash on the closing of the offering of $2,235.0 million of newly-issued 9.25% Senior Subordinated Notes due 2024 (the "New CCWH Subordinated Notes"). At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to pay and discharge the principal amount outstanding, plus accrued and unpaid interest on the CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment of the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH

~~Subordinated Notes in accordance with their terms and the trustee acknowledged such satisfaction and discharge.~~Balance Sheet. As a result of the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes have been released from their remaining obligations under the indentures and the CCWH Subordinated Notes.

~~(3)~~

In connection with our Chapter 11 Cases, the $6.3 billion outstanding under the Senior Secured Credit Facilities, the $1,999.8 million outstanding under the 9.0% Priority Guarantee Notes due 2019, the $1,750.0 million outstanding under the 9.0% Priority Guarantee Notes due 2021, the $870.5 million of 11.25% Priority Guarantee Notes due 2021, the $1,000.0 million outstanding under the 9.0% Priority Guarantee Notes due 2022, the $950.0 million outstanding under the 10.625% Priority Guarantee Notes due 2023, $6.0 million outstanding Other Secured Subsidiary Debt, the $1,781.6 million outstanding under the 14.0% Senior Notes due 2021, the $475.0 million outstanding under the Legacy Notes and $10.8 million outstanding Other Subsidiary Debt have been reclassified to Liabilities subject to compromise in our Consolidated Balance Sheet as of March 31, ~~2019. As~~2020, the ABL Facility had a facility size of $450.0 million and $350.0 million of outstanding borrowings and $47.3 million of outstanding letters of credit, resulting in $52.7 million of availability. Amounts available under the ~~Petition Date,~~ABL Facility are calculated using a borrowing base calculated by reference to our outstanding accounts receivable. To the extent decreases in our accounts receivable result in the borrowing base decreasing to an amount below the amount drawn, we ~~ceased accruing interest expense in relation~~may be required to ~~long-term debt reclassified as Liabilities subject to compromise.~~make a partial repayment of amounts outstanding under our ABL Facility.

~~CCWH Senior Subordinated Notes~~For additional information regarding our debt refer to Note 6, Long-Term Debt.

Supplemental Financial Information under Debt Agreements and Certificate of ~~March 31, 2019,~~Designation Governing the ~~New CCWH Senior Subordinated Notes represented $2,235.0 million aggregate principal amount~~iHeart Operations Preferred Stock

Pursuant to iHeartCommunications' material debt agreements, Capital I, the parent guarantor and a subsidiary of ~~indebtedness outstanding. On February 4, 2019, CCWH delivered a conditional notice~~iHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of ~~redemption calling all of its outstanding CCWH Subordinated Notes for redemption on March 6, 2019. The redemption was conditioned~~the material differences between iHeartMedia’s consolidated financial information, on the ~~closing~~one hand, and the financial information of the offering of $2,235.0 million of New CCWH Subordinated Notes. At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to payCapital I and ~~discharge the principal amount outstanding, plus accrued and unpaid interest~~its consolidated restricted subsidiaries, on the ~~CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment~~other hand. Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of ~~the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH Subordinated Notes in accordance with their terms~~iHeartMedia and the ~~trustee acknowledged such discharge and satisfaction. As a result~~parent of ~~the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes~~Capital I, have ~~been released from their remaining obligations under the indentures and the CCWH Subordinated Notes.~~

The New CCWH Subordinated Notes were issued pursuant to an indenture, dated as of February 12, 2019 (the “Indenture”), among Clear Channel Worldwide, CCOH, Clear Channel Outdoor, Inc. (“CCOI”) and the other guarantors party thereto (collectively with CCOH and CCOI, the “Guarantors”), and U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent (the “Trustee”). The New CCWH Subordinated Notes mature on February 15, 2024 and bear interest at a rate of 9.25% per annum. Prior to CCOH’s separation from iHeartMedia, Inc. in connection with the completion of iHeartMedia, Inc.’s Chapter 11 proceedings, interest will be payable to the Trustee weekly in arrears. Following the Separation, interest will be payable to the Trustee semi-annually. In each case, interest will be payable to the holders of the New CCWH Subordinated Notes semi-annually on February 15 and August 15 of each year, beginning on August 15, 2019.

The New CCWH Subordinated Notes and the guarantees of the New CCWH Subordinated Notes are unsecured senior subordinated obligations that rank pari passu in right of payment to all senior subordinated indebtedness of Clear Channel Worldwide and the Guarantors, junior to all senior indebtedness of Clear Channel Worldwide and the Guarantors, including Clear Channel Worldwide’s outstanding 6.50% Series A Senior Notes and Series B Senior Notes due 2022 (the “Senior Notes”), and senior to all future subordinated indebtedness of Clear Channel Worldwide and the Guarantors that expressly provides that it is subordinated to the New CCWH Subordinated Notes. Following the satisfaction of certain conditions, including that the Senior Notesany operations or material assets or liabilities, there are no longer outstanding and at least a portion of such notes has been refinanced with senior secured indebtedness, the New CCWH Subordinated Notes and the guarantees of the New CCWH Subordinated Notes will cease to be subordinated obligations and thereafter will rank pari passu in right of payment with all senior indebtedness of Clear Channel Worldwide and the Guarantors (the “step-up”). There can be no assurance that the step-up will ever occur and that the New CCWH Subordinated Notes and the guarantees will ever cease to be subordinated indebtedness of Clear Channel Worldwide and the Guarantors.

Clear Channel Worldwide may redeem the New CCWH Subordinated Notes at its option, in whole or part, at any time prior to February 15, 2021, at a price equal to 100% of the principal amount of the New CCWH Subordinated Notes redeemed, plus a make-whole premium, plus accrued and unpaid interest to the redemption date. Clear Channel Worldwide may redeem the New CCWH Subordinated Notes, in whole or in part, on or after February 15, 2021, at the redemption prices set forth in the Indenture plus accrued and unpaid interest to the redemption date. At any time prior to February 15, 2021, Clear Channel Worldwide may elect to redeem up to 40% of the aggregate principal amount of the New CCWH Subordinated Notes at a redemption price equal to 109.25% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of one or more equity offerings. In addition, Clear Channel Worldwide may redeem up to 20% of the aggregate principal amount of the New CCWH Subordinated Notes at any time prior to February 15, 2021, using the net proceeds from certain other equity offerings at 103% of the principal amount of the New CCWH Subordinated Notes. Clear Channel Worldwide will be permitted to use these two redemption options concurrently but will not be permitted to redeem, in the aggregate, more than 40% of the principal amount of the New CCWH Subordinated Notes pursuant to these options.

The Indenture contains covenants that limit CCOH’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur or guarantee additional debt or issue certain preferred stock; (ii) redeem, purchase or retire subordinated debt; (iii) make certain investments; (iv) create restrictions on the payment of dividends or other amounts from CCOH’s restricted subsidiaries that are not Guarantors; (v) enter into certain transactions with affiliates; (vi) merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of CCOH’s assets; (vii) sell certain assets, including capital stock of CCOH’s subsidiaries; (viii) designate CCOH’s subsidiaries as unrestricted subsidiaries, (ix) pay dividends, redeem or repurchase capital stock or make other restricted payments; and (x) in the event that the step-up occurs and New CCWH Subordinated Notes cease to be subordinated, incur certain liens.

Upon the occurrence of the Separation on the Effective Date, Clear Channel Worldwide and the Guarantors will no longer be subsidiaries of CCOH and we will no longer be subject to the Indenture or include this indebtedness in ourmaterial differences between iHeartMedia’s consolidated financial ~~statements.~~

~~Uses of Capital~~

~~Debt Repayments, Maturities and Other~~

On February 4, 2019, CCWH delivered a conditional notice of redemption calling all of its outstanding CCWH Subordinated Notes for redemption on March 6, 2019. The redemption was conditioned on the closing of the offering of $2,235.0 million of New CCWH Subordinated Notes. At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to pay and discharge the principal amount outstanding, plus accrued and unpaid interest on the CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment of the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH Subordinated Notes in accordance with their terms and the trustee acknowledged such discharge and satisfaction. As a result of the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes have been released from their remaining obligations under the indentures and the CCWH Subordinated Notes.

~~Certain Relationships with the Sponsors~~

We are party to a management agreement with certain affiliates of the Sponsors and certain other parties pursuant to which such affiliates of the Sponsors provided management and financial advisory services until December 31, 2018. These arrangements required management fees to be paid to such affiliates of the Sponsors for such services at a rate not greater than $15.0 million per year, plus reimbursable expenses. In connection with the Reorganization, the Company is not recognizing management fees in the post-petition period. The Company recognized management fees and reimbursable expenses of $3.1 millioninformation for the three months ended March 31, ~~2018. As~~2020, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same periods.

According to the certificate of designation governing the iHeart Operations Preferred Stock, iHeart Operations is required to provide certain supplemental financial information of iHeart Operations in comparison to the Company and its consolidated subsidiaries. iHeart Operations and its subsidiaries comprised 90.5% of the ~~Effective Date of the Plan of Reorganization, these management fees will be waived.~~

~~CCOH Dividends~~

In connection with the cash management arrangements with CCOH, iHeartCommunications maintained an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the “Intercompany Note”), which consists of the net activities resulting from day-to-day cash management services provided by iHeartCommunications to CCOH. As of March 14, 2018, the principal amount outstanding under the Intercompany Note was $1,031.7 million. The Intercompany Note is eliminated in consolidation in ourCompany's consolidated ~~financial statements.~~

The Intercompany Note previously was the subject of litigation. Pursuant to the terms of the settlement of that litigation, CCOH’s board of directors established an intercompany note committee for the specific purpose of monitoring the Intercompany Note. The CCOH Intercompany Note Committee has the non-exclusive authority, pursuant to the terms of its charter, to demand payments under the Intercompany Note under certain specified circumstances tied to the Company’s liquidity or the amount outstanding under the Intercompany Note as long as CCOH makes a simultaneous dividend equal to the amount so demanded. If the specified circumstances tied to the Company’s liquidity occur, the CCOH Intercompany Note Committee is authorized to demand repayment of up to the full principal amount of the Intercompany Note, if it declares a simultaneous dividend to CCOH’s stockholders in the same amount. As a result of the Chapter 11 Cases, the balance on the Intercompany Note is currently frozen and any payment pursuant to such demand would be subject to the approval of the Bankruptcy Court.

As a result of the filing of the Chapter 11 Cases, the balance under the Intercompany Note has become immediately due and payable. Pursuant to an order entered by the Bankruptcy Court, as of March 14, 2018, the balance of the Intercompany Note is frozen, and following March 14, 2018, intercompany allocations that would have been reflected in adjustments to the balance of the Intercompany Note are instead reflected in an intercompany balance that accrues interest at a rate equal to the interest under the Intercompany Note. As of March 31, 2019, the liability recorded in respect of the post-petition intercompany arrangement on CCOH's balance sheet was $73.7 million. The Separation Agreement contemplates that in connection with the Separation (i) the

cash sweep arrangement under the Corporate Services Agreement between CCOH and iHeartCommunications will terminate, and (ii) any agreements or licenses requiring royalty payments to the Debtors by CCOH for trademarks or other intellectual property, will terminate effective as of December 31, 2018. As noted above, the Separation Agreement provides for (i) the repayment of the post-petition intercompany balance outstanding in favor of us as of December 31, 2018, which was equal to $21.6 million as of that date and (ii) the waiver of the set-off value of any royalties and IP license fees owed to us equal to approximately $31.8 million from March 14, 2018 through December 31, 2018, such that the resulting intercompany balance on such date was $10.2 million in favor of CCOH, payable on the Effective Date. Since January 1, 2019, CCOH has incurred an additional intercompany liability of $52.1 million in favor of usassets as of March 31, ~~2019. Pursuant to~~2020. For the ~~Separation Agreement Amendment, CCOH has agreed to offset~~three months ended March 31, 2020, iHeart Operations and its subsidiaries comprised 86.0% of the $149 million owed by us on the Effective Date by $52.1 million, resulting in a total net payment to CCOH of approximately $107 million on the Effective Date (including the $10.2 million payment discussed above). Pursuant to the Separation Agreement Amendment, within 15 business days after the Effective Date, iHeartCommunications and CCOH will pay the other any intercompany liability incurred from April 1, 2019 through the Effective Date.Company's consolidated revenues, respectively.

Commitments, Contingencies and Guarantees

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

SEASONALITY

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

MARKET RISK

We are exposed to market risks arising from changes in market rates and prices, including movements in interest ~~rates, foreign currency exchange~~ rates and inflation.

Interest Rate Risk

A significant amount of our long-term debt bears interest at variable rates. Accordingly, our earnings will be affected by changes in interest rates. As of March 31, ~~2019,~~2020, approximately ~~31%~~42% of our aggregate principal amount of long-term debt bore interest at floating rates. Assuming the current level of borrowings and assuming a 50% change in LIBOR, ~~disregarding the impact of the Chapter 11 Cases on our requirement to pay interest on our long-term debt,~~ it is estimated that our interest expense for the three months ended March 31, ~~2019~~2020 would have changed by ~~$19.7~~$5.3 million.

In the event of an adverse change in interest rates, management may take actions to mitigate our exposure. However, due to the uncertainty of the actions that would be taken and their possible effects, the preceding interest rate sensitivity analysis assumes no such actions. Further, the analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.

~~Foreign Currency Exchange Rate Risk~~

We have operations in countries throughout the world. Foreign operations are measured in their local currencies. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we have operations. We believe we mitigate a small portion of our exposure to foreign currency fluctuations with a natural hedge through borrowings in currencies other than the U.S. dollar. Our foreign operations reported a net loss of $37.6 million for the three months ended March 31, 2019. We estimate a 10% increase in the value of the U.S. dollar relative to foreign currencies would have decreased our net loss for the three months ended March 31, 2019 by $3.8 million. A 10% decrease in the value of the U.S. dollar relative to foreign currencies during the three months ended March 31, 2019 would have increased our net loss for the same period by a corresponding amount.

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

Inflation

Inflation is a factor in the economies in which we do business and we continue to seek ways to mitigate its effect. Inflation has affected our performance in terms of higher costs for wages, salaries and equipment. Although the exact impact of inflation is indeterminable, we believe we have offset these higher costs by increasing the effective advertising rates of most of our broadcasting stations ~~and outdoor display faces~~ in our ~~iHM, Americas outdoor~~Audio operations.

Critical Accounting Estimates

The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and ~~International outdoor operations.~~assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material. There have been no significant changes to our critical accounting policies and estimates disclosed in “Critical Accounting Estimates” of Item 7, Management’s Discussion and Analysis of our Annual Report on Form 10-K for the year ended December 31, 2019 except as disclosed in Note 1, Basis of Presentation to our consolidated financial statements.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. This report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, the anticipated impacts of the

COVID-19 pandemic on our ~~ability to comply with the covenants in the agreements governing~~business, financial position and results of operations, our ~~indebtedness~~Rights Plan, our expected costs, savings and ~~the availability~~timing of our modernization initiatives and other capital and ~~the terms thereof.~~operating expense reduction initiatives, our business plans, strategies and initiatives, our expectations about certain markets, our expectations regarding our FCC petition for declaratory ruling and our anticipated financial performance and liquidity. Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables which could impact our future performance. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Actual future events and performance may differ materially from the expectations reflected in our forward-looking statements. We do not intend, nor do we undertake any duty, to update any forward-looking statements.

A wide range of factors could materially affect future developments and performance, including but not limited to:

~~the risks and uncertainties associated with the Chapter 11 Cases, including unfavorable tax consequences;~~

~~our ability to generate sufficient cash from operations to fund our operations;~~

~~our ability to successfully implement our business plan;~~

~~our ability to pursue our business strategies during the Chapter 11 Cases;~~

~~the diversion of management’s attention as a result of the Chapter 11 Cases;~~

~~increased levels of employee attrition as a result of the Chapter 11 Cases;~~

~~the impact of our restructuring on our business;~~

~~our ability to obtain sufficient exit financing to emerge from Chapter 11 and operate successfully;~~

~~volatility of our financial results as a result of the Chapter 11 Cases;~~

~~our inability to predict our long-term liquidity requirements and the adequacy of our capital resources;~~

~~the availability of cash to maintain our operations and fund our emergence costs;~~

~~our ability to continue as a going concern;~~

~~the impact of our substantial indebtedness upon emergence from Chapter 11, including the effect of our leverage on our financial position and earnings;~~

~~our ability to change the public perception relating to our bankruptcy proceedings;~~

~~the implementation and transition of a new board of directors upon emergence;~~

risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures onfor advertising;

the impact of the COVID-19 pandemic on our business, financial position and results of operations;

~~other general economic and political conditions in the United States and in other countries in which we currently do business,~~intense competition including ~~those resulting from recessions, political events and acts or threats of terrorism or military conflicts;~~

~~industry conditions, including competition;~~

increased competition from alternative media platforms and technologies;

~~changes in labor conditions, including programming,~~dependence upon the performance of on-air talent, program hosts and ~~management;~~management as well as maintaining or enhancing our master brand;

fluctuations in operating costs;

technological changes and innovations;

shifts in population and other demographics;

the impact of our ~~ability to obtain keep municipal concessions for our street furniture and transit products;~~substantial indebtedness;

the impact of future acquisitions, dispositions ~~acquisitions~~ and other strategic transactions;

legislative or regulatory requirements;

the impact of legislation or ongoing litigation on music licensing and royalties;

regulations and consumer concerns regarding privacy and data protection, and breaches of information security measures;

~~restrictions on outdoor advertising of certain products;~~

~~fluctuations in exchange rates and currency values;~~risks associated with our recent emergence from the Chapter 11 Cases;

risks related to our Class A common stock, including our significant number of ~~doing~~outstanding warrants;

regulations impacting our business ~~in foreign countries;~~

and the ~~identification~~ownership of ~~a material weakness in~~ our ~~internal control over financial reporting;~~securities; and

certain other factors set forth in our other filings with the SEC.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Required information is presented under “Market Risk” within Item 2 of this Part I.

ITEM 4. CONTROLS AND PROCEDURES

AsDisclosure Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect that there are resource constraints and that management is required ~~by Rule 13a-15(b)~~to apply judgment in evaluating the benefits of ~~the Securities Exchange Act~~possible controls and procedures relative to their costs.

Evaluation of ~~1934, as amended (the “Exchange Act”), under the supervision~~Disclosure Controls and Procedures

Our management, with the participation of ~~management, including~~ our Chief Executive Officer and ~~our~~ Chief Financial Officer, ~~we have carried out~~conducted an evaluation ~~of the effectiveness of the design and operation~~ of our disclosure controls and procedures (as such term is defined in ~~Rule~~Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in reports that are filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified by the SEC.. Based on ~~that~~this evaluation, our Chief Executive Officer and ~~our~~ Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, ~~2019 at~~2020.

Changes in Internal Control over Financial Reporting

As a result of the ~~reasonable assurance level.~~

COVID-19 pandemic, certain employees of the Company began working remotely in March 2020. These changes to the working environment did not have a material effect on the Company’s internal control over financial reporting. There were no other changes in our internal control over financial reporting that occurred during the quarter ended March 31, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We currently are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our financial condition or results of operations.

~~Although we~~We are involved in a variety of legal proceedings in the ordinary course of business and a large portion of our litigation arises in the following contexts: commercial disputes; defamation matters; employment and benefits related claims; governmental fines; intellectual property claims; and tax disputes.

Alien Ownership Restrictions and FCC Petition for Declaratory Ruling

The ~~Plan~~Communications Act and FCC regulation prohibit foreign entities and individuals from having direct or indirect ownership or voting rights of ~~Reorganization provides for~~more than 25 percent in a corporation controlling the ~~treatment~~licensee of ~~claims against~~a radio broadcast station unless the ~~Debtors' bankruptcy estates, including pre-petition liabilities that have not otherwise been satisfied or addressed during the Chapter 11 Cases.~~

~~Chapter 11 Cases~~

iHeartCommunications' filing of the Chapter 11 Cases constitutes an event of default that accelerated its obligations under its debt agreements. Due to the Chapter 11 Cases, however, the creditors' ability to exercise remedies under iHeartCommunications' debt agreements were stayed as of March 14, 2018, the date of the Chapter 11 petition filing, and continue to be stayed. See Note 6 to our consolidated financial statements located in Item 8 of Part II of this Annual Report on Form 10-K for more information about the debt agreements. On March 21, 2018, Wilmington Savings Fund Society, FSB ("WSFS"), solely in its capacity as successor indenture trustee to the 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027 (collectively with the 5.50% Senior Notes due 2016, the “Legacy Notes”), and not in its individual capacity, filed an adversary proceeding against usFCC finds greater foreign ownership is in the Chapter 11 Cases. In the complaint, WSFS alleged, among other things, that the "springing lien" provisions of the priority guarantee notes indentures and the priority guarantee notes security agreements amounted to "hidden encumbrances" on the Company's property, to which the holders of the 6.875% senior notes due 2018 and 7.25% senior notes due 2027 were entitled to "equal and ratable" treatment. On March 26, 2018, Delaware Trust Co. ("Delaware Trust"), in its capacity as successor indenture trustee to the 14.0% Senior Notes due 2021, filed a motion to intervene as a plaintiff in the adversary proceeding filed by WSFS. In the complaint, Delaware Trust alleged, among other things, that the indenture governing the 14.0% Senior Notes due 2021 also has its own "negative pledge" covenant, and, therefore, to the extent the relief sought by WSFS in its adversary proceeding is warranted, the holders of the 14.0% Senior Notes due 2021 are also entitled to the same "equal and ratable" liens on the same property. On April 6, 2018, we filed a motion to dismiss the adversary proceeding and a hearing on such motion was held on May 7, 2018. We answered the complaint and completed discovery. The trial was held on October 24, 2018. On January 15, 2019, the Bankruptcy Court entered judgment in our favor denying all relief sought by WSFS and all other parties. Pursuant to a settlementpublic interest (the ~~“Legacy Plan Settlement”~~“Foreign Ownership Rule”) ~~with WSFS and certain consenting Legacy Noteholders of all issues related to confirmation of~~. Under our Plan of Reorganization, ~~upon~~we committed to file a Petition for Declaratory Ruling ("PDR") requesting the FCC to permit up to 100% of the Company's voting and equity to be owned by non-U.S. individuals and entities, but the FCC’s granting our ~~confirmed~~PDR was not a condition to our emergence.

The equity allocation mechanism (“Equity Allocation Mechanism”) set forth in the Plan of Reorganization ~~becoming effective, this adversary proceeding shall be deemed withdrawn and/or dismissed,~~was intended to enable us to comply with ~~respect to all parties thereto,~~the Foreign Ownership Rule and other FCC ownership restrictions in connection with ~~prejudice and in its entirety.~~

~~On October 9, 2018, WSFS, solely in its capacity as successor indenture trustee to the 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027, and not in its individual capacity, filed~~our emergence. The Equity Allocation Mechanism imposed an adversary proceeding against Clear Channel Holdings Inc. (“CCH”) and certain shareholders of iHeartMedia. The named shareholder defendants are Bain Capital LP; THL; Abrams Capital L.P. ("Abrams"); and Highfields Capital Management L.P. ("Highfields"). In the complaint, WSFS alleged, among other things, that the shareholder defendants engaged in a “pattern of inequitable and bad faith conduct, including the abuse of their insider positions to benefit themselves at the expense of third-party creditors including particularly the Legacy Noteholders.” The complaint asks the court to grant relief in the form of equitable subordinationobligation on each of the shareholder defendants’ term loan, Priority Guarantee Notes and 14.0% Senior Notes due 2021 claims to any and all claims of the legacy noteholders. In addition, the complaint sought to have any votes to accept the fourth amended plan of reorganization by Abrams and Highfields on account of their 2021 notes claims, and any votes to accept the fourth amended plan of reorganization by the defendant Clear Channel Holdings, Inc., ("CCH") on account of its junior notes claims, to be designated and disqualified. The court held a pre-trial conference and oral argument on October 18, 2018. Pursuant to the Legacy Plan Settlement, upon our confirmed Plan of Reorganization becoming effective, this adversary proceeding shall be deemed withdrawn and/or dismissed, with respect to all parties thereto, with prejudice and in its entirety.

~~Stockholder Litigation~~

On May 9, 2016, a stockholder of CCOH filed a derivative lawsuit in the Court of Chancery of the State of Delaware, captioned GAMCO Asset Management Inc. v. iHeartMedia Inc. et al., C.A. No. 12312-VCS. The complaint names as defendants the Company, iHeartCommunications, Bain Capital and THL (together, the "Sponsor Defendants"), the Company's private equity sponsors and majority owners, and the members of CCOH's board of directors. CCOH also is named as a nominal defendant. The complaint alleges that CCOH has been harmed by the intercompany agreements with iHeartCommunications, CCOH’s lack of autonomy over its own cash and the actions of the defendants in serving the interests of the Company, iHeartCommunications and the Sponsor Defendants to the detriment of CCOH and its minority stockholders. Specifically, the complaint alleges that the defendants have breached their fiduciary duties by causing CCOH to: (i) continue to loan cash to iHeartCommunications under the intercompany note at below-market rates; (ii) abandon its growth and acquisition strategies in favor of transactions that would provide cash to the Company and iHeartCommunications; (iii) issue new debt in Clear Channel International B.V.'s, an international subsidiary of ours, offering of 8.75% Senior Notes due 2020 (the "CCIBV Note Offering")Claimholders to provide ~~cash~~written certification sufficient for us to determine whether issuance of common stock to such Claimholder would cause us to violate the ~~Company~~Foreign Ownership Rule, and ~~iHeartCommunications through~~restricted us from issuing common stock to Claimholders such that it would cause us to exceed an aggregate alien ownership or voting percentage of 22.5 percent (the “22.5 Percent Threshold”).

After emerging from bankruptcy, we discovered that a ~~dividend; and (iv) effect the sales~~group of ~~certain outdoor markets in the U.S. (the "Outdoor Asset Sales") allegedly~~Claimholders that had certified to provide cash to the Company and iHeartCommunications through a dividend. The complaint also alleges that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the directors' breaches of their fiduciary duties. The complaint further alleges that the Company, iHeartCommunications and the Sponsor Defendants were unjustly enriched as a result of these transactions and that these transactions constituted a waste of corporate assets for which the defendants are liable to CCOH. The plaintiff sought, among other things, a ruling that the defendants breached their fiduciary duties to CCOH and that the Company, iHeartCommunications and the Sponsor Defendants aided and abetted the CCOH board of directors' breaches of fiduciary duty, rescission of payments made by CCOH to iHeartCommunications and its affiliates pursuant to dividends declaredhaving no foreign ownership or voting control in connection with the ~~CCIBV Note Offering and Outdoor Asset Sales, and an order requiring the Company, iHeartCommunications and the Sponsor Defendants to disgorge all profits they have received as~~Equity Allocation Mechanism had subsequently undergone a separate merger transaction without our knowledge or control. As a result of this merger, these Claimholders’ interests in iHeartMedia (amounting to approximately nine percent of our issued and outstanding Class A common stock) can be voted by a U.S. subsidiary of a foreign parent. We notified the ~~alleged fiduciary misconduct.~~

FCC of this development in writing promptly after discovering and confirming it. The FCC responded to our notification on July 9, 2019, indicating that (1) the FCC has not determined that this development is contrary to the public interest, and (2) the FCC has deemed us to be in compliance with the FCC’s foreign ownership reporting rules, pending its decision on our PDR. On July ~~20, 2016, the defendants~~25, 2019 we filed a motion to dismiss plaintiff's verified stockholder derivative complaint for failure to state a claim upon which relief can be granted. On November 23, 2016, the Court granted defendants’ motion to dismiss all claims brought by the plaintiff. On December 19, 2016, the plaintiff filed a notice of appeal of the ruling.our PDR. The ~~oral hearing~~FCC requested public comment on the ~~appeal was held~~PDR, which comment period closed on ~~October 11, 2017. On October 12, 2017,~~March 26, 2020. The FCC subsequently has also referred our PDR to Team Telecom - the ~~Supreme Court of Delaware affirmed~~interagency federal government group that analyzes requests for national security, law enforcement, and public safety issues. We cannot predict whether the ~~lower court's ruling, dismissing the case.~~

On December 29, 2017, another stockholder of CCOH filed a derivative lawsuit in the Court of Chancery of the State of Delaware, captioned Norfolk County Retirement System, v. iHeartMedia, Inc., et al., C.A. No. 2017-0930-JRS. The complaint names as defendants the Company, iHeartCommunications, the Sponsor Defendants, and the members of CCOH's board of directors. CCOH is named as a nominal defendant. The complaint alleges that CCOH has been harmed by the CCOH board of directors' November 2017 decision to extend the maturity date of the intercompany revolving note (the “Third Amendment”) at what the complaint describes as far-below-market interest rates. Specifically, the complaint alleges that (i) the Company and Sponsor defendants breached their fiduciary duties by exploiting their position of control to require CCOH to enter the Third Amendment on terms unfair to CCOH; (ii) the CCOH board of directors breached their duty of loyalty by approving the Third Amendment and elevating the interests of the Company, iHeartCommunications and the Sponsor Defendants over the interests of CCOH and its minority unaffiliated stockholders; and (iii) the terms of the Third Amendment could not have been agreed to in good faith and represent a waste of corporate assets by the CCOH board of directors. The complaint further alleges that the Company, iHeartCommunications and the Sponsor defendants were unjustly enriched as a result of the unfairly favorable terms of the Third Amendment. The plaintiff sought, among other things,FCC will issue a ruling ~~that~~granting the ~~defendants breached their fiduciary duties to CCOH, a modification~~PDR, the amount of ~~the Third Amendment to bear a commercially reasonable rate of interest,~~foreign equity and ~~an order requiring disgorgement of all profits, benefits and other compensation obtained by defendants as a result of the alleged breaches of fiduciary duties.~~

On March 7, 2018, the defendants filed a motion to dismiss plaintiff's verified derivative complaint for failure to state a claim upon which relief can be granted. On March 16, 2018, the Company filed a Notice of Suggestion of Pendency of Bankruptcy and Automatic Stay of Proceedings. On May 4, 2018, plaintiff filed its response to the motion to dismiss. On June 26, 2018, the defendants filed a reply brief in further support of their motion to dismiss. Oral argument on the motion to dismiss was held on September 20, 2018.

On August 27, 2018, the same stockholder of CCOH that had filed a derivative lawsuit against the Company and others in 2016 (GAMCO Asset Management Inc.) filed a putative class action lawsuit in the Court of Chancery of the State of Delaware, captioned GAMCO Asset Management, Inc. v. Hendrix, et al., C.A. No. 2018-0633-JRS. The complaint names as defendants the Sponsor Defendants and the members of CCOH’s board of directors. The complaint alleges that minority shareholders in CCOH during the period November 8, 2017 to March 14, 2018 were harmed by decisions of the CCOH board and the intercompany note committee of the board of directors relating to the Intercompany Note. Specifically, the complaint alleges that (i) the members

of the intercompany note committee breached their fiduciary duties by not demanding payment under the Intercompany Note and issuing a simultaneous dividend after a threshold tied to the Company’s liquidity had been reached; (ii) the CCOH board of directors breached their fiduciary duties by approving the Third Amendment rather than allowing the Intercompany Note to expire; (iii) the CCOH board breached their fiduciary duties by not demanding payment under the Intercompany Note and issuing a simultaneous dividend after a threshold tied to the Company’s liquidity had been reached; (iv) the Sponsor Defendants breached their fiduciary duties by not directing the CCOH board to permit the Intercompany Note to expire and to declare a dividend. The complaint further alleges that the Sponsor Defendants aided and abetted the board’s alleged breach of fiduciary duties. The plaintiff sought, among other things,voting rights any such a ruling that the CCOH board, the intercompany note committee, and the Sponsor Defendants breached their fiduciary duties and that the Sponsor Defendants aided and abetted the board of directors' breach of fiduciary duty; and an award of damages, together with pre- and post-judgment interests,will allow us to ~~the putative class of minority shareholders.~~have, or how long it will take to obtain such a ruling.

On December 16, 2018, the Debtors, CCOH, GAMCO Asset Management, Inc., and Norfolk County Retirement System entered into the CCOH Separation Settlement to settle of all claims, objections, and other causes of action that have been or could be asserted by or on behalf of CCOH, GAMCO Asset Management, Inc., and/or Norfolk County Retirement System by and among the Debtors, CCOH, GAMCO Asset Management, Inc., certain individual defendants in the GAMCO Asset Management, Inc. action and/or the Norfolk County Retirement System action, and the private equity sponsor defendants in such actions. The CCOH Separation Settlement provides for the consensual separation of the Debtors and CCOH, including approximately $149.0 million of recovery to CCOH on account of its claim against iHeartCommunications in the Chapter 11 Cases, a $200 million unsecured revolving line of credit from certain of the Debtors to CCOH for a period of up to three years, the transfer of certain of the Debtors’ intellectual property to CCOH, the waiver by the Debtors of the setoff for the value of the transferred intellectual property, mutual releases, the termination of the cash sweep under the existing Corporate Services Agreement, the termination of any agreements or licenses requiring royalty payments from CCOH to the Debtors for trademarks or other intellectual property, the waiver of any post-petition amounts owed by CCOH relating to such trademarks or other intellectual property, and the execution of a new transition services agreement and other separation documents. The CCOH Separation Settlement was approved by the Bankruptcy Court and the United States District Court for the Southern District of Texas on January 22, 2019.

~~China Investigation~~

Several employees of Clear Media Limited, an indirect, non-wholly-owned subsidiary of the Company whose ordinary shares are listed on the Hong Kong Stock Exchange, are subject to an ongoing police investigation in China for misappropriation of funds. We are not aware of any litigation, claim or assessment pending against us in relation to this investigation. Based on information known to date, we believe any contingent liabilities arising from potential misconduct that has been or may be identified by the investigation in China are not material to our consolidated financial statements. The effect of the misappropriation of funds is reflected in these financial statements in the appropriate periods.

We advised both the SEC and the DOJ of the investigation at Clear Media Limited and we are cooperating to provide information in response to inquiries from the agencies. The Clear Media Limited investigation could implicate the books and records, internal controls and anti-bribery provisions of the U.S. Foreign Corrupt Practices Act, which statute and regulations provide for potential monetary penalties as well as criminal and civil sanctions. It is possible that monetary penalties and other sanctions could be assessed on the Company in connection with this matter. The nature and amount of any monetary penalty or other sanctions cannot reasonably be estimated at this time and could be qualitatively or quantitatively material to the Company.

~~Italy Investigation~~

During the three months ended June 30, 2018, we identified misstatements associated with VAT obligations in our business in Italy, which resulted in an understatement of our VAT obligation. These misstatements resulted in an understatement of other long-term liabilities of $16.9 million as of December 31, 2017. The effect of these misstatements is reflected in the historical financial statements in the appropriate periods. Upon identification of these misstatements, we undertook certain procedures, including a forensic investigation, which is ongoing. In addition, we voluntarily disclosed the matter and preliminary findings to the Italian tax authorities in order to commence a discussion on the appropriate calculation of the VAT position. The current expectation is that we may have to repay to the Italian tax authority a substantial portion of the VAT previously applied as a credit in relation to the transactions under investigation, amounting to approximately $17 million, including estimated possible penalties and interest. We made a payment of $8.6 million during the fourth quarter of 2018 and expect to pay the remainder during the last half of 2019. The ultimate amount to be paid may differ from our estimates, and such differences may be material.

ITEM 1A. RISK FACTORS

~~For information regarding our~~There have been no material changes to the risk factors ~~please refer to~~disclosed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (the "Annual Report")~~. There~~, except as discussed below.

The COVID-19 pandemic has adversely impacted, and is expected to continue to adversely impact, our business, results of operations and financial position.

In December 2019, a strain of novel coronavirus disease, COVID-19, was identified in Wuhan, China. This virus has been declared a pandemic and has spread around the world, including throughout the United States. The outbreak and government measures taken in response have ~~not~~also had a significant impact, both direct and indirect, on our businesses and the economy generally, as worker shortages have occurred; supply chains have been ~~any material changes~~disrupted; facilities and production have been suspended;

and demand for many goods and services has fallen. In response to the spread of COVID-19, including shelter-in-place and stay-at-home orders, we implemented a work-from-home policy that remains in place for most of our employees and have restricted on-site activities.

As a result of the COVID-19 pandemic, we have experienced and may continue to experience disruptions that have adversely impacted our business, results of operations and financial position. The extend of future disruptions will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, and could result in significantly more severe impacts in the ~~risk factors disclosed~~future, including:

reduced ad budgets and spend, order cancellations and increased competition for advertising revenue;


•	the effect of the outbreak on our customers and other business partners and vendors;

cancellation or postponement of events;

increased competition with alternative media platforms and technologies;

the inability of customers to pay amounts owed to the Company, or delays in collections of such amounts;

additional goodwill or other impairment charges;

limitations on our employee resources, including because of work-from-home, stay-at-home and shelter-in-place orders from federal or state governments, employee furloughs, or sickness of employees or their families;

diversion of management resources to focus on mitigating the impacts of the COVID-19 pandemic;

reduced capital expenditures; and

impacts from prolonged remote work arrangements, including increased cybersecurity risks.

We expect that these disruptions will negatively impact our revenue, results of operations and financial position in 2020.

The COVID-19 pandemic continues to rapidly evolve. The extent to which the outbreak impacts our business, liquidity and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, stay-at-home and shelter-in-place orders, travel restrictions and social distancing throughout the United States, the duration and extent of business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease. If we or our customers experience prolonged shutdowns or other business disruptions beyond current expectations, our ability to conduct our business in the manner and within planned timelines could be materially and adversely impacted, and our business, liquidity and financial results will be adversely affected. Additionally, concerns over the economic impact of the COVID-19 pandemic have caused extreme volatility in financial and other capital markets, which has adversely impacted and may continue to adversely impact our stock price, our ability to access capital markets and our ability to maintain our credit ratings.

Delaware law and certain provisions in our ~~Annual Report.~~certificate of incorporation may prevent efforts by our stockholders to change the direction or management of our company.

Our certificate of incorporation and our by-laws contain provisions that may make the acquisition of our company more difficult without the approval of our Board of Directors (the “Board”), including, but not limited to, the following:

for the first three years following the Effective Date, our Board will be divided into three equal classes, with members of each class elected in different years for different terms, making it impossible for stockholders to change the composition of our entire Board in any given year;

action by stockholders may only be taken at an annual or special meeting duly called by or at the direction of a majority of our Board;

advance notice for all stockholder proposals is required;

subject to the rights of holders of any outstanding shares of our preferred stock, for so long as our board remains classified our directors may only be removed for cause and upon the affirmative vote of holders of a majority of the voting power of the outstanding shares of our Class A common stock; and

for the first three years following the Effective Date, any amendment, alteration, rescission or repeal of the anti-takeover provisions of the charter, requires the affirmative vote of at least 66 2/3% in voting power of the outstanding shares of our stock entitled to vote generally in the election of directors.

We are also subject to the anti-takeover provisions contained in Section 203 of the General Corporation Law of the State of Delaware. Under these provisions, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its voting stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the business combination or the transaction by which the person became an interested stockholder.

In addition, we have adopted a stockholder rights plan that could make it more difficult for a third-party to acquire our Class A common stock, Class B common stock or warrants without the approval of our Board.

These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our Board, including actions to delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth our purchases of shares of our Class A common stock made during the quarter ended March 31, ~~2019:~~2020:


Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs		Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 through January 31	3,927	$	0.43	—	$	—	863	$	16.61	—	$	—
February 1 through February 28	2,576	0.94		—	—
February 1 through February 29							4,102	17.72		—	—
March 1 through March 31	—			—	��		—	—		—	—
Total	6,503	$	0.63	—	$	—	4,965	$	17.53	—	$	—


(1)	The shares indicated consist of shares of our Class A common stock tendered by employees to us during the three months ended March 31, ~~2019~~2020 to satisfy the employees’ tax withholding obligation in connection with the vesting and release of restricted shares, which are repurchased by us based on their fair market value on the date the relevant transaction occurs.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the following debt instruments (the “Debt Instruments”):~~

Senior Indenture, dated as of October 1, 1997 (as amended or supplemented from time to time), by and between iHeartCommunications and The Bank of New York (now known as The Bank of New York Mellon), as trustee (with Wilmington Savings Fund Society, FSB as successor trustee), governing iHeartCommunications’ 5.50% Senior Notes due 2016, 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027;

Credit Agreement, dated as of May 13, 2008, as amended and restated as of February 23, 2011 (as further amended or supplemented from time to time), by and among iHeartCommunications, as the parent borrower, the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto, iHeartMedia Capital I, LLC, as a guarantor, Citibank, N.A., as administrative agent, swing line lender and letter of credit issuer, and the other the lenders from time to time party thereto governing iHeartCommunications’ Term Loan D and Term Loan E credit facilities;

Indenture, dated as of February 23, 2011 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, Wilmington Trust FSB, as trustee (with Wilmington Trust, National Association as successor in interest), and Deutsche Bank Trust Company Americas, as collateral agent, paying agent, registrar, authentication agent and transfer agent, governing iHeartCommunications’ 9.0% Priority Guarantee Notes due 2021;

Indenture, dated as of October 25, 2012 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent (with Wilmington Trust, National Association as successor trustee, paying agent, registrar and transfer agent), and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications’ 9.0% Priority Guarantee Notes due 2019;

Indenture, dated as of June 21, 2013 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, Law Debenture Trust Company of New York, as trustee (with Delaware Trust Company as successor trustee), and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent, governing iHeartCommunications’ 14.0% Senior Notes due 2021;

Indenture, dated as of February 28, 2013 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar, authentication agent and transfer agent (with UMB Bank National Association as successor trustee, paying agent, registrar, authentication agent and transfer agent), and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications’ 11.25% Priority Guarantee Notes due 2021;

Indenture, dated as of September 10, 2014 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar, authentication agent and transfer agent (with Wilmington Trust, National Association as successor trustee, paying agent, registrar, authentication agent and transfer agent), and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications’ 9.0% Priority Guarantee Notes due 2022;

Indenture, dated as of February 26, 2015 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar, authentication agent and transfer agent, and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications’ 10.625% Priority Guarantee Notes due 2023;

Credit Agreement, dated as of November 30, 2017, by and among iHeartCommunications, as the parent borrower, iHeartMedia Capital I, LLC, as a guarantor, the subsidiary borrowers party thereto, TPG Specialty Lending, Inc., as administrative agent, sole lead arranger and a lender, the other lenders, swing line lenders and letter of credit issuers from time to time party thereto and the other syndication agents party thereto, governing iHeartCommunications’ asset-based term loan and revolving credit facility; and

Revolving Promissory Note, dated November 10, 2005, as amended by the first amendment entered into on December 23, 2009, the second amendment entered into on October 23, 2013, and the third amendment entered into on November 29, 2017, between iHeartCommunications, as maker, and Clear Channel Outdoor Holdings, Inc., as payee.

As previously disclosed, any efforts to enforce the payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Exhibit Number		Description
2.1		Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of iHeartMedia, Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code, dated January 22, 2019 (incorporated by reference ~~to the Company's Current Report on Form 8-K filed with the SEC on January 28, 2019).~~
~~4.1~~		~~Indenture, dated as~~Exhibit 2.1 of February 12, 2019, among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., Clear Channel Outdoor, Inc., the other guarantors party thereto, and U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent (incorporated by reference to Exhibit 4.1 to Clear Channel Outdoor Holdings,iHeartMedia Inc.’s Current Report on Form 8-K filed on ~~February 13,~~January 28, 2019).
~~4.2~~3.1		~~Form~~Fifth Amended and Restated Certificate of ~~9.25% Senior Subordinated Notes due 2024~~Incorporation of iHeartMedia, Inc. (incorporated by reference to Exhibit ~~A to Exhibit 4.1 to Clear Channel Outdoor Holdings,~~3.1 of iHeartMedia, Inc.’s Current Report on Form 8-K filed on ~~February 13,~~May 2, 2019).
~~4.3~~3.2		~~Exchange~~Second Amended and ~~Registration Rights Agreement, dated as~~Restated Bylaws of ~~February 12, 2019, among Clear Channel Worldwide Holdings,~~iHeartMedia, Inc.~~, Clear Channel Outdoor Holdings, Inc., Clear Channel Outdoor, Inc., the other guarantors party thereto, and Deutsche Bank Securities Inc., as representative of the initial purchasers~~ (incorporated by reference to Exhibit ~~4.3 to Clear Channel Outdoor Holdings,~~3.2 of iHeartMedia Inc.’s Current Report on Form 8-K filed on ~~February 13,~~May 2, 2019).
~~10.1~~		Settlement and Separation Agreement, dated March 27, 2019, by and between Clear Channel Holdings, Inc., Clear Channel Outdoor Holdings, Inc., iHeartCommunications, Inc. and iHeartMedia, Inc. (incorporated by reference to Exhibit 10.1 to the Clear Channel Outdoor Holdings, Inc.’s Current Report on Form 8-K filed on March 28, 2019).
10.2*		Amendment, dated as of April 24, 2019, to the Settlement and Separation Agreement, dated as of March 27, 2019, by and among Clear Channel Holdings, Inc., Clear Channel Outdoor Holdings, Inc., iHeartCommunications, Inc. and iHeartMedia, Inc.
31.1*		Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data ~~Files.~~File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

____________

* Filed herewith.

** Furnished herewith.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	IHEARTMEDIA, INC.

~~April 25, 2019~~May 7, 2020	/s/ SCOTT D. HAMILTON
	Scott D. Hamilton
	Senior Vice President, Chief Accounting Officer and Assistant Secretary

5445



(In thousands)	iHM		Americas Outdoor⁽¹⁾		International Outdoor⁽¹⁾		Other		Eliminations			Consolidated
Three Months Ended March 31, 2019
Revenue from contracts with customers:
United States	$	759,400	$	131,431	$	—	$	30,190	$	(269	)	$	920,752
Other Americas	1,027		896		13,645		—		—			15,568
Europe	2,351		—		201,205		—		—			203,556
Asia-Pacific and other	2,622		—		53,231		—		—			55,853
Total	765,400		132,327		268,081		30,190		(269		)	1,195,729
Revenue from leases	410		140,395		46,313		—		(948		)	186,170
Revenue, total	$	765,810	$	272,722	$	314,394	$	30,190	$	(1,217	)	$	1,381,899

Three Months Ended March 31, 2018
Revenue from contracts with customers:
United States	$	736,940	$	96,147	$	—	$	28,218	$	(313	)	$	860,992
Other Americas	1,180		650		12,123		—		—			13,953
Europe	2,601		—		187,216		—		—			189,817
Asia-Pacific and other	2,957		—		3,012		—		—			5,969
Total	743,678		96,797		202,351		28,218		(313		)	1,070,731
Revenue from leases	890		159,050		140,200		—		(1,223		)	298,917
Revenue, total	$	744,568	$	255,847	$	342,551	$	28,218	$	(1,536	)	$	1,369,648



(In thousands)
2019	$	397,444
2020	48,769
2021	19,832
2022	10,505
2023	3,138
Thereafter	15,432
Total	$	495,120



(In thousands)	Three Months Ended March 31, 2019
Operating lease expense	$	168,461
Variable lease expense	31,891



(In thousands)
2019	$	471,907
2020	550,241
2021	474,264
2022	387,920
2023	321,722
Thereafter	2,153,963
Total lease payments	$	4,360,017
Less: Effect of discounting	1,894,444
Total operating lease liability	$	2,465,573



(In thousands)	March 31, 2019					December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Transit, street furniture and other outdoor contractual rights	$	528,232	$	(443,963	)	$	528,185	$	(440,228	)
Customer / advertiser relationships	1,237,115		(1,210,498		)	1,249,128		(1,208,056		)
Talent contracts	164,932		(150,289		)	164,933		(148,578		)
Representation contracts	77,508		(72,419		)	77,508		(70,829		)
Permanent easements	163,341		—			163,317		—
Other	394,923		(249,018		)	382,897		(244,993		)
Total	$	2,566,051	$	(2,126,187	)	$	2,565,968	$	(2,112,684	)



(In thousands)
2020	$	43,788
2021	38,457
2022	32,707
2023	24,849
2024	20,983



(In thousands)	iHM			Americas Outdoor		International Outdoor			Other		Consolidated
Balance as of December 31, 2017	$	3,255,208		$	507,819	$	206,224		$	81,831	$	4,051,082
Acquisitions	77,320			—		—			—		77,320
Dispositions	(1,606		)	—		—			—		(1,606		)
Foreign currency	—			—		(8,040		)	—		(8,040		)
Balance as of December 31, 2018	$	3,330,922		$	507,819	$	198,184		$	81,831	$	4,118,756
Acquisitions	2,767			—		—			—		2,767
Foreign currency	(27		)	—		(3,184		)	—		(3,211		)
Balance as of March 31, 2019	$	3,333,662		$	507,819	$	195,000		$	81,831	$	4,118,312