iHeartMedia, Inc. (Nasdaq: IHRT) today reported financial
results for the quarter and year ended December 31, 2023.
Financial Highlights:1
Q4 2023 Consolidated
Results
- Q4 Revenue of $1,067 million, down 5.2%; slightly better than
the guidance range of down high-single digits
- Excluding Q4 Political Revenue, Q4 Revenue flat
- GAAP Operating income of $80 million vs. $173 million in Q4
2022
- Consolidated Adjusted EBITDA of $208 million, within previously
disclosed guidance range of $205 million to $215 million, compared
to $316 million in Q4 2022
- Cash Flows from operating activities of $154 million
- Free Cash Flow of $142 million, Free Cash Flow including net
proceeds from real estate sales was $145 million
Q4 2023 Digital Audio Group
Results
- Digital Audio Group Revenue of $318 million up 6%
- Podcast Revenue of $132 million up 17%
- Digital Revenue excluding Podcast of $186 million down 1%
- Segment Adjusted EBITDA of $117 million up 17%
- Digital Audio Group Adjusted EBITDA margin of 36.7%
Q4 2023 Multiplatform Group
Results
- Multiplatform Group Revenue of $684 million down 7%
- Excluding Multiplatform Group Q4 Political Revenue,
Multiplatform Group Q4 Revenue down 3%
- Segment Adjusted EBITDA of $142 million down 39%
- Multiplatform Group Adjusted EBITDA margin of 20.7%
Continued Proactive Capital Structure
Improvement
- Cash balance and total available liquidity2 of $346 million and
$772 million, respectively, as of December 31, 2023
- Repurchased $15 million in principal balance of 8.375% Senior
Unsecured Notes (at a discount to par) for $10 million in cash;
expected to generate approximately $1 million of annualized
interest savings
- As of December 31, 2023, since Q2 2022 combined Notes
repurchases of $534 million at a discount to par for $447 million
cash; in aggregate expected to generate approximately $45 million
of annualized interest savings
- Cumulative reduction of the outstanding principal balance of
these Notes from $1.45 billion as of March 31, 2022 to
approximately $0.9 billion as of December 31, 2023
- Received cash proceeds of $101 million from sale of equity
interest in BMI in February 2024
Guidance
- Q1 Consolidated Revenue expected to be flat to down 2%
- Q1 Consolidated Adjusted EBITDA3 expected to be $100 million to
$110 million, up from $93 million in prior year
- Remain committed to long term target of approximately 4x Net
Debt to Adjusted EBITDA ("net leverage")3
Full Year 2023
Highlights4
- Revenue of $3,751 million, down 4%; excluding Full Year 2023
Political Revenue, Revenue down 2%
- Multiplatform Group Revenue down 6%
- Excluding Multiplatform Group Political Revenue, Multiplatform
Group Revenue down 4%
- Digital Audio Group Revenue up 5%
- Podcast Revenue up 14%
- Digital Revenue excluding Podcast flat
- GAAP Operating loss of $797 million decreased from GAAP
Operating income of $57 million in the year ended December 31,
2022, as a result of the $965 million of non-cash impairment
charges recorded in Q2 2023, primarily related to our goodwill and
indefinite-lived intangible assets balances. Full Year 2022 GAAP
Operating income included $311 million of non-cash impairment
charges, primarily related to our indefinite-lived intangible asset
balance.
- Consolidated Adjusted EBITDA of $697 million, down from $950
million in the year ended December 31, 2022
- Generated Cash Flows from operating activities of $213
million
- Free Cash Flow of $110 million, Free Cash Flow including net
proceeds from real estate sales was $118 million
- Received cash proceeds of $45 million from a sale leaseback of
radio broadcast towers in Q3 2023
Statement from Senior Management
"We’re pleased to report that our fourth quarter results were in
line with our previously provided Adjusted EBITDA and Revenue
guidance ranges.” said Bob Pittman, iHeartMedia’s Chairman and CEO.
“This quarter the Digital Audio Group achieved the highest Adjusted
EBITDA and margin in its history, illustrating the success of this
high growth business. We view 2024 as a recovery year in which the
company returns to growth mode -- we expect to see our
Multiplatform Group performance improve quarter by quarter
throughout the year, and we expect our Digital Audio Group,
including our industry leading podcast business, to continue to
grow and reinforce its leadership position in the segment.”
“We continue to see signs of improvement throughout our business
and the broader advertising marketplace. Our results this quarter
are a strong indication that the reallocation of resources towards
our high growth Digital Audio Group has been successful - through
our relentless focus on efficiencies we have reduced our
Multiplatform Group expenses by approximately 7% since 2019, which
has in part enabled us to build a Digital business that generated
$1 billion of revenue in 2023 with an Adjusted EBITDA margin of
33%,” said Rich Bressler, iHeartMedia’s President, COO and CFO. “We
expect to see a significant year over year improvement in our 2024
financial performance, supported by our ongoing efficiency efforts
and what is anticipated to be record-setting political advertising
year.”
Consolidated Results of
Operations
Fourth Quarter 2023 Consolidated
Results
Our consolidated revenue decreased $59.1 million, or 5.2%,
during the three months ended December 31, 2023 compared to the
same period of 2022. Digital Audio revenue increased $16.6 million,
or 5.5%, driven primarily by continuing increases in demand for
podcast advertising. Multiplatform revenue decreased $48.8 million,
or 6.7%, primarily resulting from a decrease in broadcast
advertising due to a challenging macroeconomic environment and a
decline in political advertising due to 2022 being a mid-term
election year, partially offset by an increase in trade and barter
revenues. Audio & Media Services revenue decreased $27.0
million primarily due to a decrease in political revenue.
Consolidated direct operating expenses increased $1.9 million,
or 0.4%, during the three months ended December 31, 2023 compared
to the same period of 2022. The increase in direct operating
expenses was primarily driven by higher broadcast content fees and
higher variable content costs resulting from an increase in digital
segment revenue, including profit sharing costs and production
costs. The increase was partially offset by lower third party
digital costs in connection with a reduction in COVID-19 related
advertisers and employee compensation as a result of cost savings
initiatives.
Consolidated Selling, General & Administrative ("SG&A")
expenses increased $36.3 million, or 8.5%, during the three months
ended December 31, 2023 compared to the same period of 2022. The
increase in Consolidated SG&A expenses was driven primarily by
higher trade and barter expense and variable bonus expense,
partially offset by expense reductions as a result of our cost
savings initiatives.
Our consolidated GAAP Operating income was $79.8 million
compared to $172.8 million in the fourth quarter of 2022, primarily
resulting from the decrease in broadcast revenue due to a more
challenging macroeconomic environment and a decline in political
revenues compared to 2022.
Adjusted EBITDA decreased to $208.2 million compared to $315.6
million in the prior-year period.
Cash provided by operating activities was $154.1 million,
compared to $213.4 million in the prior-year period primarily due
to a decrease in broadcast revenue due to a challenging
macroeconomic environment, a decrease in political revenue, and an
increase in floating borrowing rates. Free Cash Flow was $141.9
million, compared to $165.0 million in the prior year period.
Business Segments: Results of
Operations
Fourth Quarter 2023 Multiplatform Group
Results
(In thousands)
Three Months Ended
December 31,
%
Year Ended
December 31,
%
2023
2022
Change
2023
2022
Change
Revenue
$
684,028
$
732,834
(6.7)%
$
2,435,368
$
2,597,190
(6.2)%
Operating expenses1
542,493
502,803
7.9%
1,881,934
1,831,491
2.8%
Segment Adjusted EBITDA
$
141,535
$
230,031
(38.5)%
$
553,434
$
765,699
(27.7)%
Segment Adjusted EBITDA margin
20.7%
31.4%
22.7%
29.5%
1 Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring Expenses.
Revenue from our Multiplatform Group decreased $48.8 million, or
6.7% YoY, primarily due to the challenging macroeconomic
environment and a decline in political advertising as 2022 was a
mid-term election year, partially offset by an increase in trade
and barter revenues. Broadcast revenue declined $36.1 million, or
6.9% YoY, driven by lower spot revenue and a decrease in political
advertising, partially offset by an increase in trade and barter
revenues. Networks declined $11.0 million, or 8.4% YoY. Revenue
from Sponsorship and Events decreased by $3.6 million, or 4.8%
YoY.
Operating expenses increased $39.7 million, or 7.9% YoY, driven
primarily by an increase in trade and barter expenses and variable
bonus expense, partially offset by lower sales commissions and
reductions as a result of our cost savings initiatives.
Segment Adjusted EBITDA Margin decreased YoY to 20.7% from
31.4%.
Fourth Quarter 2023 Digital Audio Group
Results
(In thousands)
Three Months Ended
December 31,
%
Year Ended
December 31,
%
2023
2022
Change
2023
2022
Change
Revenue
$
317,695
$
301,091
5.5%
$
1,069,167
$
1,021,824
4.6%
Operating expenses1
201,183
201,760
(0.3)%
720,298
712,786
1.1%
Segment Adjusted EBITDA
$
116,512
$
99,331
17.3%
$
348,869
$
309,038
12.9%
Segment Adjusted EBITDA margin
36.7%
33.0%
32.6%
30.2%
1 Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring Expenses.
Revenue from our Digital Audio Group increased $16.6 million, or
5.5% YoY, driven by Podcast revenue which increased by $18.7
million, or 16.6%, YoY, to $131.7 million, driven primarily by
increased demand for podcasting from advertisers, partially offset
by Digital, excluding Podcast revenue, which declined $2.1 million,
or 1.1%, YoY, to $186.0 million, driven by a decrease in COVID-19
related advertisers, partially offset by an increase in demand for
digital advertising.
Operating expenses decreased $0.6 million, or 0.3% YoY,
primarily driven by lower third-party digital costs in connection
with fewer COVID-19 related advertisers, partially offset by higher
profit sharing costs resulting from higher revenue.
Segment Adjusted EBITDA Margin increased YoY to 36.7% from
33.0%.
Fourth Quarter 2023 Audio & Media
Services Group Results
(In thousands)
Three Months Ended
December 31,
%
Year Ended
December 31,
%
2023
2022
Change
2023
2022
Change
Revenue
$
67,568
$
94,586
(28.6)%
$
256,702
$
304,302
(15.6)%
Operating expenses1
46,926
49,898
(6.0)%
185,241
191,407
(3.2)%
Segment Adjusted EBITDA
$
20,642
$
44,688
(53.8)%
$
71,461
$
112,895
(36.7)%
Segment Adjusted EBITDA margin
30.5%
47.3%
27.8%
37.1%
1 Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring Expenses.
Revenue from our Audio & Media Services Group decreased
$27.0 million, or 28.6% YoY, primarily driven by a decrease in
political revenue.
Operating expenses decreased $3.0 million, or 6.0% YoY,
primarily as a result of lower variable bonus expense.
Segment Adjusted EBITDA Margin decreased YoY to 30.5% from
47.3%.
GAAP and Non-GAAP Measures: Consolidated
(In thousands)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Revenue
$
1,066,783
$
1,125,890
$
3,751,025
$
3,912,283
Operating income (loss)
$
79,780
$
172,843
$
(797,311)
$
56,860
Adjusted EBITDA1
$
208,211
$
315,645
$
696,598
$
950,289
Net income (loss)
$
13,975
$
80,663
$
(1,100,339)
$
(262,670)
Cash provided by operating activities2
$
154,104
$
213,376
$
213,062
$
420,075
Free cash flow1,2
$
141,890
$
164,974
$
110,392
$
259,106
Free cash flow including net proceeds from
real estate sales1,2
$
144,789
$
165,774
$
117,920
$
291,441
_________________________________
1 See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating income (loss),
(ii) Adjusted EBITDA to Net income (loss), (iii) Free Cash Flow and
Free cash flow including net proceeds from real estate sales to
cash provided by operating activities, (iv) revenue, excluding
political advertising revenue, to revenue, and (v) Net Debt to
Total Debt. See also the definitions of Adjusted EBITDA, Free Cash
Flow, Free cash flow including net proceeds from real estate sales,
Adjusted EBITDA margin, and Net Debt under the Supplemental
Disclosure Regarding Non-GAAP Financial Information section in this
release.
2 We made cash interest payments of $88.5
million in the three months ended December 31, 2023, compared to
$92.5 million in the three months ended December 31, 2022.
Certain prior period amounts have been reclassified to conform
to the 2023 presentation of financial information throughout the
press release.
Liquidity and Financial
Position
As of December 31, 2023, we had $346.4 million of cash on our
balance sheet. For the twelve months ended December 31, 2023, cash
provided by operating activities was $213.1 million, cash used for
investing activities was $51.3 million and cash used for financing
activities was $152.2 million.
Capital expenditures for the twelve months ended December 31,
2023 were $102.7 million compared to $161.0 million in the twelve
months ended December 31, 2022. Capital expenditures during the
twelve months ended December 31, 2023 decreased primarily due to
lower spending on real estate optimization initiatives.
As of December 31, 2023, the Company had $5,215.2 million of
total debt and $4,868.8 million of Net Debt. The terms of our
capital structure include no material maintenance covenants, and
there are no material debt maturities prior to May 2026. During the
three months ended December 31, 2023, we repurchased $15.0 million
in aggregate principal amount of iHeartCommunications Inc.'s 8.375%
Senior Unsecured Notes due 2027, at a discount to par, for $9.8
million in cash. During the twelve months ended December 31, 2023,
we repurchased $204.0 million in aggregate principal amount of
iHeartCommunications Inc.'s 8.375% Senior Unsecured Notes due 2027,
at a discount to par, for $147.3 million in cash.
In September 2023, we sold 122 of our broadcast tower sites for
net proceeds of $45.3 million and entered into long-term operating
leases for use of space on 121 of the broadcast towers and related
assets.
Cash balance and total available liquidity5 were $346.4 million
and $772 million, respectively, as of December 31, 2023.
Revenue Streams
The tables below present the comparison of our historical
revenue streams (including political revenue) for the periods
presented:
(In thousands)
Three Months Ended
December 31,
%
Year Ended
December 31,
%
2023
2022
Change
2023
2022
Change
Broadcast Radio
$
484,673
$
520,725
(6.9)%
$
1,752,166
$
1,883,324
(7.0)%
Networks
119,948
130,915
(8.4)%
466,404
503,244
(7.3)%
Sponsorship and Events
71,137
74,759
(4.8)%
191,434
188,985
1.3%
Other
8,270
6,435
28.5%
25,364
21,637
17.2%
Multiplatform Group1
684,028
732,834
(6.7)%
2,435,368
2,597,190
(6.2)%
Digital ex. Podcast
186,028
188,138
(1.1)%
661,319
663,392
(0.3)%
Podcast
131,667
112,953
16.6%
407,848
358,432
13.8%
Digital Audio Group
317,695
301,091
5.5%
1,069,167
1,021,824
4.6%
Audio & Media Services
Group1
67,568
94,586
(28.6)%
256,702
304,302
(15.6)%
Eliminations
(2,508)
(2,621)
(10,212)
(11,033)
Revenue, total1
$
1,066,783
$
1,125,890
(5.2)%
$
3,751,025
$
3,912,283
(4.1)%
1 Excluding the impact of political revenue, Revenue from the
Multiplatform Group and Consolidated Revenue decreased by 3.2% and
0.5% for the three months ended December 31, 2023 compared to the
three months ended December 31, 2022, respectively. Excluding the
impact of political revenue, Revenue from Audio & Media
Services decreased by 5.2% for the three months ended December 31,
2023 compared to the three months ended December 31, 2022. See the
end of this press release for a reconciliation of revenue,
excluding political advertising revenue, to revenue.
Conference Call
iHeartMedia, Inc. will host a conference call to discuss results
and business outlook on February 29, 2024, at 8:30 a.m. Eastern
Time. The conference call number is (888) 330-2446 (U.S. callers)
and +1 (240) 789-2732 (International callers) and the passcode for
both is 71596. A live audio webcast of the conference call will
also be available on the Investors homepage of iHeartMedia's
website investors.iheartmedia.com. After the live conference call,
a replay will be available for a period of thirty days. The replay
numbers are (800) 770-2030 (U.S. callers) and +1 (647) 362-9199
(International callers) and the passcode for both is 71596. An
archive of the webcast will be available beginning 24 hours after
the call for a period of thirty days.
About iHeartMedia, Inc.
iHeartMedia (Nasdaq: IHRT) is the number one audio company in
the United States, reaching nine out of 10 Americans every month.
It consists of three business groups.
With its quarter of a billion monthly listeners, the iHeartMedia
Multiplatform Group has a greater reach than any other media
company in the U.S. Its leadership position in audio extends across
multiple platforms, including more than 860 live broadcast stations
in over 160 markets nationwide; its National Sales organization;
and the company’s live and virtual events business. It also
includes Premiere Networks, the industry’s largest Networks
business, with its Total Traffic and Weather Network (TTWN); and
BIN: Black Information Network, the first and only 24/7 national
and local all news audio service for the Black community.
iHeartMedia also leads the audio industry in analytics, targeting
and attribution for its marketing partners with its SmartAudio
suite of data targeting and attribution products using data from
its massive consumer base.
The iHeartMedia Digital Audio Group includes the company’s
fast-growing podcasting business -- iHeartMedia is the number one
podcast publisher in downloads, unique listeners, revenue and
earnings -- as well as its industry-leading iHeartRadio digital
service, available across more than 250+ platforms and thousands of
devices; the company’s digital sites, newsletters, digital services
and programs; its digital advertising technology companies; and its
audio industry-leading social media footprint.
The Company’s Audio & Media Services reportable segment
includes Katz Media Group, the nation’s largest media
representation company, and RCS, the world's leading provider of
broadcast and webcast software.
Certain statements herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors which
may cause the actual results, performance or achievements of
iHeartMedia, Inc. and its subsidiaries to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. The words or phrases
“guidance,” “believe,” “expect,” “anticipate,” “estimates,”
“forecast” and similar words or expressions are intended to
identify such forward-looking statements. In addition, any
statements that refer to expectations or other characterizations of
future events or circumstances, such as statements about
positioning in uncertain economic environment and future economic
recovery, driving shareholder value, our expected costs savings and
other capital and operating expense reduction initiatives,
utilizing new technologies, improving operational efficiency,
future advertising demand, trends in the advertising industry,
including on other media platforms; strategies and initiatives,
expected interest rates and interest expense savings, and our
anticipated financial performance, liquidity, and net leverage are
forward-looking statements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties
and other important factors, some of which are beyond our control
and are difficult to predict. Various risks that could cause future
results to differ from those expressed by the forward-looking
statements included in this press release include, but are not
limited to: risks related to weak or uncertain global economic
conditions and our dependence on advertising revenues; competition,
including increased competition from alternative media platforms
and technologies; dependence upon our brand and the performance of
on-air talent, program hosts and management; fluctuations in
operating costs; technological and industry changes and
innovations; shifts in population and other demographics; risks
related to our use of artificial intelligence, impact of
acquisitions, dispositions and other strategic transactions; risks
related to our indebtedness; legislative or regulatory
requirements; impact of legislation, ongoing litigation or royalty
audits on music licensing and royalties; regulations and concerns
regarding privacy and data protection and breaches of information
security measures; risks related to scrutiny of environmental,
social and governance matters, risks related to our Class A common
stock; and regulations impacting our business and the ownership of
our securities. Other unknown or unpredictable factors also could
have material adverse effects on the Company’s future results,
performance or achievements. In light of these risks,
uncertainties, assumptions and factors, the forward-looking events
discussed in this press release may not occur. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date stated, or if no date is stated, as
of the date hereof. Additional risks that could cause future
results to differ from those expressed by any forward-looking
statement are described in the Company’s reports filed with the
U.S. Securities and Exchange Commission, including in the section
entitled “Part I, Item 1A. Risk Factors” of iHeartMedia, Inc.’s
Annual Reports on Form 10-K and “Part II, Item 1A. Risk Factors” of
iHeartMedia, Inc.’s Quarterly Reports on Form 10-Q. The Company
does not undertake any obligation to publicly update or revise any
forward-looking statements because of new information, future
events or otherwise.
APPENDIX
TABLE 1 - Comparison of operating
performance
(In thousands)
Three Months Ended
December 31,
%
Year Ended
December 31,
%
2023
2022
Change
2023
2022
Change
Revenue
$
1,066,783
$
1,125,890
(5.2)%
$
3,751,025
$
3,912,283
(4.1)%
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
414,556
412,701
0.4%
1,494,234
1,480,326
0.9%
Selling, general and administrative
expenses (excludes depreciation and amortization)
465,969
429,653
8.5%
1,656,171
1,592,946
4.0%
Depreciation and amortization
105,455
111,520
428,483
445,664
Impairment charges
—
160
965,087
311,489
Other operating (income) expense, net
1,023
(987)
4,361
24,998
Operating income (loss)
$
79,780
$
172,843
$
(797,311)
$
56,860
Depreciation and amortization
105,455
111,520
428,483
445,664
Impairment charges
—
160
965,087
311,489
Other operating (income) expense, net
1,023
(987)
4,361
24,998
Restructuring expenses
13,882
21,234
60,353
75,821
Share-based compensation expense
8,070
10,875
35,625
35,457
Adjusted EBITDA1
$
208,211
$
315,645
(34.0)%
$
696,598
$
950,289
(26.7)%
1
See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating income (loss),
(ii) Adjusted EBITDA to Net income (loss), (iii) Free Cash Flow and
Free cash flow including net proceeds from real estate sales to
cash provided by operating activities, (iv) revenue, excluding
political advertising revenue, to revenue, and (v) Net Debt to
Total Debt. See also the definitions of Adjusted EBITDA, Free Cash
Flow, Free cash flow including net proceeds from real estate sales,
Adjusted EBITDA margin and Net Debt under the Supplemental
Disclosure section in this release.
TABLE 2 - Statements of
Operations
(In thousands)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Revenue
$
1,066,783
$
1,125,890
$
3,751,025
$
3,912,283
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
414,556
412,701
1,494,234
1,480,326
Selling, general and administrative
expenses (excludes depreciation and amortization)
465,969
429,653
1,656,171
1,592,946
Depreciation and amortization
105,455
111,520
428,483
445,664
Impairment charges1
—
160
965,087
311,489
Other operating (income) expense, net
1,023
(987)
4,361
24,998
Operating income (loss)
79,780
172,843
(797,311)
56,860
Interest expense, net
96,116
93,071
389,775
341,674
Loss on investments, net
(8,206)
(5,404)
(28,130)
(1,045)
Equity in income (loss) of nonconsolidated
affiliates
(12)
179
(3,530)
(11)
Gain on extinguishment of debt
5,250
15,119
56,724
30,214
Other expense, net
454
731
(655)
(2,295)
Income (loss) before income taxes
(18,850)
90,397
(1,162,677)
(257,951)
Income tax benefit (expense)
32,825
(9,734)
62,338
(4,719)
Net income (loss)
13,975
80,663
(1,100,339)
(262,670)
Less amount attributable to noncontrolling
interest
852
782
2,321
1,993
Net income (loss) attributable to the
Company
$
13,123
$
79,881
$
(1,102,660)
$
(264,663)
1Impairment charges in the year ended
December 31, 2023 includes $595.5 million related to the impairment
of Goodwill, $363.6 million related to the impairment of FCC
licenses, and $6.0 million related to impairments of right-of-use
assets. The right-of-use asset impairments are part of our
operating expense-savings initiatives. As previously disclosed, we
have taken strategic actions to streamline our real estate
footprint and related expenses, resulting in impairment charges due
to the write-down of right-of-use assets and related fixed assets,
including leasehold improvements. Impairment charges in the year
ended December 31, 2022 include $302.1 million related to the
impairment of FCC licenses, and $9.4 million related to impairments
of right-of-use assets, including leasehold improvements.
TABLE 3 - Selected Balance Sheet
Information
Selected balance sheet information for December 31, 2023 and
December 31, 2022:
(In millions)
December 31, 2023
December 31, 2022
Cash
$
346.4
$
336.2
Total Current Assets
1,506.9
1,472.8
Net Property, Plant and Equipment
558.9
694.8
Total Assets
6,952.6
8,335.9
Current Liabilities (excluding current
portion of long-term debt)
848.1
831.2
Long-term Debt (including current portion
of long-term debt)
5,215.2
5,414.2
Stockholders' Equity (Deficit)
(384.8)
684.5
Supplemental Disclosure Regarding
Non-GAAP Financial Information
The following tables set forth the Company’s Adjusted EBITDA,
Adjusted EBITDA margin, revenues excluding political advertising
revenue, Free Cash Flow and Free cash flow including net proceeds
from real estate sales for the three and twelve months ended
December 31, 2023 and 2022, and Net Debt as of December 31, 2023.
Adjusted EBITDA is defined as consolidated Operating income (loss)
adjusted to exclude restructuring expenses included within Direct
operating expenses and SG&A expenses, and share-based
compensation expenses included within SG&A expenses, as well as
the following line items presented in our Statements of Operations:
Depreciation and amortization, Impairment charges and Other
operating (income) expense, net. Alternatively, Adjusted EBITDA is
calculated as Net income (loss), adjusted to exclude Income tax
(benefit) expense, Interest expense, net, Depreciation and
amortization, Loss on investments, net, Gain on extinguishment of
debt, Other expense, net, Equity in income (loss) of
nonconsolidated affiliates, net, Impairment charges, Other
operating income (expense), net, Share-based compensation expense,
and restructuring expenses. Restructuring expenses primarily
include expenses incurred in connection with cost-saving
initiatives, as well as certain expenses, which, in the view of
management, are outside the ordinary course of business or
otherwise not representative of the Company's operations during a
normal business cycle. Adjusted EBITDA margin is calculated as
Adjusted EBITDA divided by Revenue.
The Company uses Adjusted EBITDA and Adjusted EBITDA margin,
among other measures, to evaluate the Company’s operating
performance. Adjusted EBITDA is among the primary measures used by
management for the planning and forecasting of future periods, as
well as for measuring performance for compensation of executives
and other members of management. We believe this measure is an
important indicator of the Company’s operational strength and
performance of its business because it provides a link between
operational performance and operating income. It is also a primary
measure used by management in evaluating companies as potential
acquisition targets.
The Company believes the presentation of these measures is
relevant and useful for investors because it allows investors to
view performance in a manner similar to the method used by the
Company’s management. The Company believes it helps improve
investors’ ability to understand the Company’s operating
performance and makes it easier to compare the Company’s results
with other companies that have different capital structures or tax
rates. In addition, the Company believes this measure is also among
the primary measures used externally by the Company’s investors,
analysts and peers in its industry for purposes of valuation and
comparing the operating performance of the Company to other
companies in its industry.
Since Adjusted EBITDA is not a measure calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, operating income as an indicator of operating
performance and may not be comparable to similarly titled measures
employed by other companies. Adjusted EBITDA is not necessarily a
measure of the Company’s ability to fund its cash needs. As it
excludes certain financial information compared with operating
income, the most directly comparable GAAP financial measure, users
of this financial information should consider the types of events
and transactions which are excluded.
We define Free Cash Flow as Cash provided by operating
activities less capital expenditures, which is disclosed as
Purchases of property, plant and equipment in the Company's
Consolidated Statements of Cash Flows. We define Free cash flow
including net proceeds from real estate sales as Free Cash Flow
further adjusted to include proceeds from real estate sales. We use
Free Cash Flow and Free cash flow including net proceeds from real
estate sales, among other measures, to evaluate the Company’s
liquidity and its ability to generate cash flow. We believe that
Free Cash Flow and Free cash flow including net proceeds from real
estate sales are meaningful to investors because they provide them
with a view of the Company's liquidity after deducting capital
expenditures, which are considered to be a necessary component of
ongoing operations; and include proceeds from real estate sales in
the case of Free cash flow including net proceeds from real estate
sales. In addition, we believe that Free Cash Flow and Free cash
flow including net proceeds from real estate sales helps improve
investors' ability to compare our liquidity with that of other
companies.
Since Free Cash Flow and Free cash flow including net proceeds
from real estate sales are not measures calculated in accordance
with GAAP, they should not be considered in isolation of, or as a
substitute for, Cash used for operating activities and may not be
comparable to similarly titled measures employed by other
companies. Free Cash Flow and Free cash flow including net proceeds
from real estate sales is not necessarily a measure of our ability
to fund our cash needs.
The Company presents revenue, excluding the effects of political
revenue. Due to the cyclical nature of the electoral system and the
seasonality of the related political revenue, management believes
presenting revenue, excluding the effects of political revenue,
provides additional information to investors about the Company’s
revenue growth from period to period.
We define Net Debt as Total Debt less Cash and cash equivalents.
We define net leverage as Net Debt divided by Adjusted EBITDA. The
Company uses net leverage and Net Debt to evaluate the Company's
liquidity. We believe these measures are an important indicator of
the Company's ability to service its long-term debt
obligations.
Since these non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered in isolation
of, or as a substitute for, the most directly comparable GAAP
financial measures as an indicator of operating performance or
liquidity.
As required by the SEC rules, the Company provides
reconciliations below to the most directly comparable measures
reported under GAAP, including (i) Adjusted EBITDA to Operating
income (loss), (ii) Adjusted EBITDA to Net income (loss), (iii)
Free Cash Flow and Free cash flow including net proceeds from real
estate sales to cash provided by operating activities, (iv)
revenue, excluding political advertising revenue, to revenue, and
(v) Net Debt to Total Debt.
We have provided forecasted Revenue and Adjusted EBITDA guidance
for the quarter ending March 31, 2024 and long-term net leverage
guidance, which reflects targets for Adjusted EBITDA and net debt.
Our Earnings Call on February 29, 2024 may present additional
guidance that includes Adjusted EBITDA. A full reconciliation of
the forecasted Adjusted EBITDA, net debt and net leverage on a
non-GAAP basis to its most-directly comparable GAAP metrics cannot
be provided without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying with reasonable accuracy
significant items required for the reconciliations, including gains
or losses on investments, extinguishment of debt, equity in
nonconsolidated affiliates, impairment charges, stock based
compensation, and restructuring as well as the Company's cash and
cash equivalent balance.
Reconciliation of Operating income (loss) to Adjusted
EBITDA
(In thousands)
Three Months Ended
December 31,
Year Ended December
31,
Three Months Ended September
30,
2023
2022
2023
2022
2023
Operating income (loss)
$
79,780
$
172,843
$
(797,311)
$
56,860
$
68,965
Depreciation and amortization
105,455
111,520
428,483
445,664
106,451
Impairment charges1
—
160
965,087
311,489
570
Other operating (income) expense, net
1,023
(987)
4,361
24,998
3,378
Restructuring expenses
13,882
21,234
60,353
75,821
16,227
Share-based compensation expense
8,070
10,875
35,625
35,457
8,191
Adjusted EBITDA
$
208,210
$
315,645
$
696,598
$
950,289
$
203,782
1Impairment charges in the year ended
December 31, 2023 includes $595.5 million related to the impairment
of Goodwill, $363.6 million related to the impairment of FCC
licenses, and $6.0 million related to impairments of right-of-use
assets. The right-of-use asset impairments are part of our
operating expense-savings initiatives. As previously disclosed, we
have taken strategic actions to streamline our real estate
footprint and related expenses, resulting in impairment charges due
to the write-down of right-of-use assets and related fixed assets,
including leasehold improvements. Impairment charges in the year
ended December 31, 2022 include $302.1 million related to the
impairment of FCC licenses, and $9.4 million related to impairments
of right-of-use assets, including leasehold improvements.
Reconciliation of Net income (loss) to EBITDA and Adjusted
EBITDA
(In thousands)
Three Months Ended
December 31,
Year Ended December
31,
Three Months Ended September
30,
2023
2022
2023
2022
2023
Net income (loss)
$
13,975
$
80,663
$
(1,100,339)
$
(262,670)
$
(8,969)
Income tax (benefit) expense
(32,825)
9,734
(62,338)
4,719
(9,261)
Interest expense, net
96,116
93,071
389,775
341,674
99,509
Depreciation and amortization
105,455
111,520
428,483
445,664
106,451
EBITDA
$
182,721
$
294,988
$
(344,419)
$
529,387
$
187,730
Loss on investments, net
8,206
5,404
28,130
1,045
7,381
Gain on extinguishment of debt
(5,250)
(15,119)
(56,724)
(30,214)
(23,947)
Other (income) expense, net
(454)
(731)
655
2,295
738
Equity in loss of nonconsolidated
affiliates
12
(179)
3,530
11
3,514
Impairment charges
—
160
965,087
311,489
570
Other operating (income) expense, net
1,023
(987)
4,361
24,998
3,378
Restructuring expenses
13,882
21,234
60,353
75,821
16,227
Share-based compensation expense
8,070
10,875
35,625
35,457
8,191
Adjusted EBITDA
$
208,210
$
315,645
$
696,598
$
950,289
$
203,782
Reconciliation of Cash Used For Operating Activities to Free
Cash Flow and Free cash flow including net proceeds from real
estate sales
(In thousands)
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
Cash provided by operating activities
$
154,104
$
213,376
$
213,062
$
420,075
Purchases of property, plant and
equipment
(12,214)
(48,402)
(102,670)
(160,969)
Free cash flow
141,890
164,974
110,392
$
259,106
Net proceeds from real estate sales1
2,899
800
7,528
32,335
Free cash flow including net proceeds from
real estate sales
$
144,789
$
165,774
$
117,920
$
291,441
1 During the three and twelve months ended
December 31, 2023 and 2022, we deployed capital expenditures to
accelerate the proactive streamlining of our real estate footprint
aimed at reducing our structural cost base. This initiative has
succeeded in making certain real estate assets redundant, enabling
the Company to sell such assets to partially fund the initiative’s
gross capital expenditures.
Reconciliation of Revenue to Revenue excluding Political
Advertising
(In thousands)
Three Months Ended
December 31,
%
Change
Year Ended December
31,
%
Change
2023
2022
2023
2022
Consolidated revenue
$
1,066,783
$
1,125,890
(5.2)%
$
3,751,025
$
3,912,283
(4.1)%
Excluding: Political revenue
(12,631)
(66,697)
(30,877)
(132,912)
Consolidated revenue, excluding
political
$
1,054,152
$
1,059,193
(0.5)%
$
3,720,148
$
3,779,371
(1.6)%
Multiplatform Group revenue
$
684,028
$
732,834
(6.7)%
$
2,435,368
$
2,597,190
(6.2)%
Excluding: Political revenue
(7,535)
(34,337)
(20,658)
(71,755)
Multiplatform Group revenue, excluding
political
$
676,493
$
698,497
(3.2)%
$
2,414,710
$
2,525,435
(4.4)%
Digital Audio Group revenue
$
317,695
$
301,091
5.5%
$
1,069,167
$
1,021,824
4.6%
Excluding: Political revenue
(896)
(4,598)
(2,562)
(9,540)
Digital Audio Group revenue, excluding
political
$
316,799
$
296,493
6.8%
$
1,066,605
$
1,012,284
5.4%
Audio & Media Group Services
revenue
$
67,568
$
94,586
(28.5)%
$
256,702
$
304,302
(15.6)%
Excluding: Political revenue
(4,200)
(27,762)
(7,657)
(51,617)
Audio & Media Services Group revenue,
excluding political
$
63,368
$
66,824
(5.2)%
$
249,045
$
252,685
(1.4)%
Reconciliation of Total Debt to Net Debt
(In thousands)
December 31,
2023
Current portion of long-term debt
$
340
Long-term debt
5,214,810
Total debt
$
5,215,150
Less: Cash and cash equivalents
346,382
Net debt
$
4,868,768
Segment Results
The following tables present the Company's segment results for
the Company for the periods presented:
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media
Services Group
Corporate and other reconciling
items
Eliminations
Consolidated
Three Months Ended December 31,
2023
Revenue
$
684,028
$
317,695
$
67,568
$
—
$
(2,508)
$
1,066,783
Operating expenses(1)
542,493
201,183
46,926
70,478
(2,508)
858,572
Adjusted EBITDA
$
141,535
$
116,512
$
20,642
$
(70,478)
$
—
$
208,211
Adjusted EBITDA margin
20.7%
36.7%
30.5%
19.5%
Depreciation and amortization
(105,455)
Impairment charges
—
Other operating expense, net
(1,023)
Restructuring expenses
(13,882)
Share-based compensation expense
(8,070)
Operating income
$
79,780
Operating margin
7.5%
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Three Months Ended December 31,
2022
Revenue
$
732,834
$
301,091
$
94,586
$
—
$
(2,621)
$
1,125,890
Operating expenses(1)
502,803
201,760
49,898
58,405
(2,621)
810,245
Adjusted EBITDA
$
230,031
$
99,331
$
44,688
$
(58,405)
$
—
$
315,645
Adjusted EBITDA margin
31.4%
33.0%
47.2%
28.0%
Depreciation and amortization
(111,520)
Impairment charges
(160)
Other operating expense, net
987
Restructuring expenses
(21,234)
Share-based compensation expense
(10,875)
Operating income
$
172,843
Operating margin
15.4%
(1) Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring expenses and share-based
compensation expenses.
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Year Ended December 31, 2023
Revenue
$
2,435,368
$
1,069,167
$
256,702
$
—
$
(10,212)
$
3,751,025
Operating expenses(1)
1,881,934
720,298
185,241
277,166
(10,212)
3,054,427
Segment Adjusted EBITDA
$
553,434
$
348,869
$
71,461
$
(277,166)
$
—
$
696,598
Adjusted EBITDA margin
22.7%
32.6%
27.8%
18.6%
Depreciation and amortization
(428,483)
Impairment charges
(965,087)
Other operating expense, net
(4,361)
Restructuring expenses
(60,353)
Share-based compensation expense
(35,625)
Operating loss
$
(797,311)
Operating margin
(21.3)%
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Year Ended December 31, 2022
Revenue
$
2,597,190
$
1,021,824
$
304,302
$
(11,033)
$
3,912,283
Operating expenses(1)
1,831,491
712,786
191,407
237,343
(11,033)
2,961,994
Segment Adjusted EBITDA
$
765,699
$
309,038
$
112,895
$
(237,343)
$
—
$
950,289
Adjusted EBITDA margin
29.5%
30.2%
37.1%
24.3%
Depreciation and amortization
(445,664)
Impairment charges
(311,489)
Other operating expense, net
(24,998)
Restructuring expenses
(75,821)
Share-based compensation expense
(35,457)
Operating income
$
56,860
Operating margin
1.5%
(1) Operating expenses consist of Direct
operating expenses and Selling, general and administrative
expenses, excluding Restructuring expenses and share-based
compensation expenses.
________________________________
1 Unless otherwise noted, all results are
based on year over year comparisons.
2 Total available liquidity is defined as
cash and cash equivalents plus available borrowings under our ABL
Facility. We use total available liquidity to evaluate our capacity
to access cash to meet obligations and fund operations.
3 A full reconciliation of forecasted
Adjusted EBITDA, net debt and net leverage on a non-GAAP basis to
the most-directly comparable GAAP metrics cannot be provided
without unreasonable efforts due to the inherent difficulty in
forecasting and quantifying with reasonable accuracy significant
items required for the reconciliations, including gains or losses
on investments, extinguishment of debt, equity in nonconsolidated
affiliates, impairment charges, stock based compensation, and
restructuring as well as the Company’s cash and cash equivalents
balance.
4 Unless otherwise noted, all results are
based on year over year comparisons.
5 Total available liquidity is defined as
cash and cash equivalents plus available borrowings under our ABL
Facility. We use total available liquidity to evaluate our capacity
to access cash to meet obligations and fund operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229870449/en/
Media
Wendy Goldberg Chief Communications Officer (212) 377-1105
wendygoldberg@iheartmedia.com
Investors
Mike McGuinness EVP, Deputy CFO, and Head of Investor Relations
(212) 377-1336 mbm@iheartmedia.com
iHeartMedia (NASDAQ:IHRT)
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iHeartMedia (NASDAQ:IHRT)
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