iHeartMedia(US:IHRT)2023-11-08 16:00Financial Performance - Consolidated revenue for Q3 2023 was $953.0 million, a decrease of $35.9 million, or 3.6%, compared to $988.9 million in Q3 2022[101]. - Revenue and Segment Adjusted EBITDA from the Multiplatform Group decreased by $33.5 million and $44.8 million, respectively, compared to the prior year's third quarter[102]. - Revenue and Segment Adjusted EBITDA from the Digital Audio Group increased by $13.3 million and $15.3 million, respectively, compared to the prior year's third quarter[102]. - Operating income for Q3 2023 was $69.0 million, an increase of $280.2 million from an operating loss of $211.2 million in the prior year's third quarter[102]. - Net loss for Q3 2023 was $9.0 million, a decrease of $300.8 million from a net loss of $309.8 million in the prior year's third quarter[102]. - Adjusted EBITDA for Q3 2023 was $203.8 million, down $48.5 million from $252.2 million in the prior year's third quarter[102]. - Free cash flow increased to $67.7 million from $62.8 million in the prior year's third quarter[102]. - Consolidated revenue decreased by $35.9 million, or 3.6%, to $952.989 million for the three months ended September 30, 2023, compared to $988.930 million in the same period of 2022[104]. - Multiplatform Group revenue decreased by $33.5 million, or 5.1%, primarily due to a decline in broadcast advertising and political advertising[104]. - Digital Audio Group revenue increased by $13.3 million, or 5.2%, driven by higher demand for podcast advertising[104]. - Operating income for the three months ended September 30, 2023, was $68,965 thousand, compared to a loss of $211,187 thousand in the prior year[135]. - Net loss for the three months ended September 30, 2023, was $8,969 thousand, compared to a loss of $309,776 thousand in the prior year[136]. - Adjusted EBITDA for the three months ended September 30, 2023, was $203,782 thousand, a decrease of $48,460 thousand, or 19.2%, from the prior year[135]. Cash Flow and Liquidity - Cash flows provided by operating activities were $96.2 million, down from $103.1 million in the prior year's third quarter[102]. - Cash provided by operating activities decreased to $59.0 million for the nine months ended September 30, 2023, from $206.7 million in the same period of 2022, primarily due to lower broadcast radio revenue and higher interest expenses[143]. - Cash used for investing activities was $40.0 million for the nine months ended September 30, 2023, primarily due to $90.4 million in capital expenditures, partially offset by $54.1 million in proceeds from asset disposals[144]. - Total available liquidity as of September 30, 2023, was approximately $625 million, consisting of $213.5 million in cash and cash equivalents and $411.8 million in borrowing base availability[148]. - Free cash flow for the three months ended September 30, 2023, was $67,651 thousand, an increase from $62,753 thousand in the prior year[138]. Expenses and Costs - Consolidated direct operating expenses increased by $8.3 million during the three months ended September 30, 2023, primarily due to higher music license fees and variable content costs[106]. - Consolidated SG&A expenses decreased by $6.3 million during the three months ended September 30, 2023, primarily due to cost reduction initiatives[108]. - Interest expense increased by $11.6 million during the three months ended September 30, 2023, primarily due to higher floating borrowing rates[115]. - Share-based compensation expenses for Q3 2023 were $8.2 million, down from $10.4 million in Q3 2022, and for the nine months ended September 30, 2023, they were $27.6 million compared to $24.6 million in the same period of 2022[140]. Impairments and Taxation - Non-cash impairment charges of $959.1 million were recorded in the second quarter of 2023 related to indefinite-lived FCC licenses and goodwill[112]. - The effective tax rate for the Company was 50.8% for the three months ended September 30, 2023, primarily impacted by valuation allowance against certain deferred tax assets[119]. - The company recognized a $363.6 million impairment of indefinite-lived intangible assets as of June 30, 2023, with the fair value of FCC licenses at $1.1 billion post-impairment[175][177]. - A $595.5 million impairment of goodwill was recorded as of June 30, 2023, due to the carrying values of certain reporting units exceeding their fair values[180]. Market Conditions and Risks - Economic conditions, including rising interest rates and high inflation, have negatively impacted advertising revenue and cash flows since 2022[95]. - Inflation has impacted the company's performance through increased costs for employee compensation, equipment, and third-party services, although the overall effect is expected to be immaterial[170]. - The company is exposed to market risks from changes in interest rates, foreign currency exchange rates, and inflation, which could materially affect future financial results[166]. - The company performed an interim impairment test on long-lived assets due to economic uncertainty and lower advertising spending, which has adversely impacted revenue and cash flows[172]. Future Outlook - The company anticipates approximately $89.3 million in cash interest payments for the remainder of 2023, compared to $92.5 million during the same period in 2022[152]. - The company expects its lowest financial performance in the first quarter of the calendar year, influenced by political cycles, with higher revenues anticipated in congressional and presidential election years[165]. - The company remains confident in its ability to fund operations for at least the next twelve months despite challenges posed by a challenging macroeconomic environment[149]. Debt and Obligations - Total debt as of September 30, 2023, was $5.228 billion, with net debt amounting to $5.015 billion after accounting for cash and cash equivalents[157]. - As of September 30, 2023, approximately 43% of the company's long-term debt bore interest at floating rates, with a potential interest expense change of $17.2 million for a 100 bps change in floating interest rates[168]. - Future cash obligations include various lease agreements with renewal options and annual rental escalations tied to the consumer price index[164]. - The company has contingent payments related to acquisitions based on the financial performance of acquired companies, which are not expected to significantly impact financial results if performance targets are met[163]. Management Estimates - Management's estimates and assumptions in financial reporting are subject to change, which could lead to material differences in actual results[171].