iHeartMedia(US:IHRT)2021-11-03 16:00Financial Performance - Consolidated revenue for the third quarter of 2021 was $928.1 million, an increase of $183.6 million or 24.7% compared to $744.4 million in the prior year's third quarter[130]. - Operating income rose to $80.1 million, up from $39.4 million in the prior year's third quarter, representing a 103.4% increase[131]. - Net income for the third quarter of 2021 was $3.7 million, compared to a net loss of $32.1 million in the prior year's third quarter[131]. - Adjusted EBITDA for the third quarter of 2021 was $230.2 million, an increase of $68.1 million or 42.0% from $162.1 million in the prior year's third quarter[131]. - Cash provided by operating activities increased to $95.7 million, up from $33.3 million in the prior year's third quarter, reflecting a 187.9% increase[131]. - Free cash flow improved to $45.5 million, compared to $14.3 million in the prior year's third quarter, marking a 218.5% increase[131]. - Consolidated revenue increased by $183.6 million (24.7%) to $928.1 million for the three months ended September 30, 2021, compared to $744.4 million in the same period of 2020[132]. - Consolidated revenue increased by $483.6 million (24.0%) to $2.5 billion for the nine months ended September 30, 2021, compared to $2.0 billion in the same period of 2020[134]. - Total revenue for the nine months ended September 30, 2021, increased by $220.9 million, or 14.3%, compared to the same period in 2020[154]. Revenue Breakdown - Revenue from the Multiplatform Group increased by $103.9 million compared to the prior year's third quarter[131]. - Revenue from the Digital Audio Group increased by $89.6 million compared to the prior year's third quarter[131]. - Multiplatform revenue rose by $103.9 million (18.7%) during the three months ended September 30, 2021, driven by increased demand for broadcast advertising[133]. - Digital Audio revenue surged by $89.6 million (77.1%) for the three months ended September 30, 2021, reflecting strong growth in digital advertising and podcasting[133]. - Revenue from the Digital Audio Group surged by $89.6 million, or 77.1%, year-over-year, totaling $205.769 million for the three months ended September 30, 2021[157]. - Podcast revenue within the Digital Audio Group increased by $41.6 million, or 183.7%, driven by new podcast developments[157]. - Revenue from the Audio & Media Services Group decreased by $9.0 million, or 11.9%, due to lower political advertising revenue compared to the previous presidential election year[162]. Expenses and Costs - Direct operating expenses increased by $54.9 million (16.5%) during the three months ended September 30, 2021, primarily due to higher content and talent expenses[135]. - SG&A expenses rose by $57.0 million (14.6%) during the three months ended September 30, 2021, mainly due to increased employee compensation and sales commissions[137]. - Operating expenses for the Digital Audio Group rose by $57.6 million, primarily due to higher variable employee compensation and content costs[158]. Cash Flow and Liquidity - Cash provided by operating activities increased from $136.2 million in the nine months ended September 30, 2020 to $196.6 million in the same period of 2021, primarily due to higher revenues and operating profitability[174]. - Free cash flow for the nine months ended September 30, 2021 was $95.3 million, compared to $77.6 million for the same period in 2020, reflecting improved cash generation[173]. - Cash used for investing activities was $259.9 million during the nine months ended September 30, 2021, primarily due to the acquisition of Triton Digital for $228.5 million[175]. - Cash used for financing activities was $288.1 million during the nine months ended September 30, 2021, mainly due to a $250.0 million voluntary repayment of term loan credit facilities[178]. - Total available liquidity as of September 30, 2021 was approximately $791 million, consisting of $369.1 million in cash and cash equivalents and $421.5 million in borrowing capacity under the ABL Facility[180]. Debt and Interest - As of September 30, 2021, total debt was $5.74 billion, down from $6.02 billion as of December 31, 2020[190]. - Interest expense decreased by $3.1 million during the three months ended September 30, 2021, due to lower interest rates and a $250.0 million voluntary repayment on term loan facilities[143]. - The company expects approximately $81 million in cash interest payments for the remainder of 2021 and $312 million for 2022[182]. - As of September 30, 2021, approximately 40% of the Company's long-term debt bore interest at floating rates, with an estimated interest expense change of $0.8 million for a 50% change in LIBOR[198]. Strategic Initiatives - The company anticipates achieving $100 million in cost savings from modernization initiatives, with $50 million already realized in 2020[184]. - The company continues to evaluate strategic opportunities, including potential acquisitions, with the recent acquisition of Triton Digital being a key example[187]. Impairment and Fair Value - Impairment charges were $49.4 million for the nine months ended September 30, 2021, significantly lower than the $1.7 billion recorded in the same period of 2020[141]. - The estimated fair value of the Company's FCC licenses was $2.2 billion as of July 1, 2021, compared to a carrying value of $1.8 billion, indicating potential impairment risks[206]. - Goodwill recorded upon emergence from bankruptcy was $3.3 billion, with no impairment charges recorded in the first quarter of 2021[207]. - The Company performed its annual impairment test on goodwill and indefinite-lived intangible assets on July 1, 2021, concluding no impairment was required[210]. - A hypothetical 5% reduction in estimated fair value for reporting units would not result in a material impairment condition[210]. Market Risks - The Company is exposed to market risks from changes in interest rates and inflation, which have affected performance through higher costs[197][200]. - The Company expects its lowest financial performance in the first quarter of the calendar year, a trend anticipated to continue[196]. - Revenue growth of 2.0% is assumed beyond the initial four-year period for indefinite-lived intangible assets[205].