iHeartMedia, Inc. Reports Results for 2021 Third Quarter
iHeartMedia reported Q3 2021 revenue of $928 million, a 25% increase YoY. Digital Audio Group revenue surged 77% to $205.8 million, with podcast revenue up 184%. Operating income rose to $80 million, doubling from $39 million in Q3 2020. Adjusted EBITDA reached $230 million, reflecting a 42% YoY increase. Free cash flow was $45 million. Despite political ad revenue declines, the company expects Q4 revenue growth of 10% YoY. iHeart maintains strong liquidity with $369 million in cash.
- Q3 revenue increased by $183.6 million, or 24.7% YoY.
- Operating income rose to $80 million, representing a 103.4% increase from Q3 2020.
- Adjusted EBITDA of $230 million, a 42% increase YoY.
- Digital Audio Group revenue up 77.1% YoY.
- Podcast revenue increased by 184% YoY.
- Free cash flow of $45 million, accounting for significant capital expenditures and real estate sales.
- Total revenue decreased by 2% compared to Q3 2019.
- Audio & Media Services Group revenue decreased by 11.9% YoY due to lower political ad revenue.
- Operating expenses increased by $54.9 million, or 20.3% YoY, affecting margins.
Financial Highlights:
Q3 2021 Consolidated Results
-
Q3 Revenue of
up$928 million 25% YoY; exceeding prior guidance of up approximately20% -
Excluding the impact of Political, Q3 revenue was up
31% YoY -
Q3 2021 down
2% vs. Q3 2019 -- continuing sequential quarterly improvement vs. 2019
-
Excluding the impact of Political, Q3 revenue was up
-
GAAP Operating income of
vs.$80 million in Q3 2020$39 million -
Consolidated Adjusted EBITDA of
vs.$230 million in Q3 2020$162 million -
Consolidated Adjusted EBITDA margin of
25% , up 340 bps from21% in Q2 2021 and up 300 bps from22% in Q3 2020
Q3 2021 Digital Audio Group Maintains Strong Growth and Profit Trajectory
-
Digital Audio Group Revenue up
77% YoY-
Podcast Revenue up
184% YoY and Digital Revenue excluding Podcast up51% YoY
-
Podcast Revenue up
-
Segment Adjusted EBITDA of
increased$67 million 91% YoY; up from in Q2 2021$54 million -
Digital Audio Group Adjusted EBITDA margin of
33% , up 520 bps from27% in Q2 2021 and up 230 bps from30% in Q3 2020
Q3 2021 Multiplatform Group Momentum Accelerates
-
Multiplatform Group Revenue was up
19% YoY-
Excluding the impact of Political, Q3 revenue was up
22% YoY -
Q3 2021 down
17% vs Q3 2019 -- continuing sequential quarterly improvement vs. 2019
-
Excluding the impact of Political, Q3 revenue was up
-
Segment Adjusted EBITDA of
; up from$208 million in Q3 2020, and up sequentially from$139 million in Q2 2021$181 million -
Multiplatform Group Adjusted EBITDA margin of
32% , up 170 bps from30% in Q2 2021 and up 660 bps from25% in Q3 2020
Free Cash Flow Generation and Proactive Capital Structure Improvements
-
Generated Cash Flows from operating activities of
$96 million -
Free Cash Flow of
; including$45 million of proceeds from real estate sales, Free Cash Flow including net proceeds from real estate sales was$9 million $54 million -
Capital Expenditures of
vs.$50 million in Q2 2021, driven primarily by accelerated real estate consolidation$32 million
-
Capital Expenditures of
-
Cash balance and total available liquidity1 of
and$369 million , respectively, as of$791 million September 30, 2021 -
Capital Structure: Term Loan reduced by
, Loan Terms improved (July);$250 million Preferred repurchased (October)$60 million
Entered Multi-Year Strategic Partnership Agreed with DraftKings
iHeart continues position as Number One in podcast listening with 282 Million Global Monthly Downloads and Streams and 30 Million
Updated Guidance
-
Despite comparison to strong political quarter and recovering ad market in Q4 2020, Q4 consolidated revenue expected to be up approximately
10% YoY; Excluding the impact of Political, Q4 revenue is expected to increase by approximately22% YoY -
October consolidated revenue approximately flat YoY; Excluding the impact of Political, October revenue increased approximately
22% YoY4 - We reaffirm that we expect to return to 2019 Adjusted EBITDA levels by the end of 2021
______________________________
1 | Total available liquidity 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. |
|
2 |
Source: Podtrac Monthly Ranker, |
|
3 | Source: Triton Streaming Ranker |
|
4 |
Included in |
Statement from Senior Management
“Our strong results this quarter are further evidence of the success of our company’s continuing transformation – data-led, digital and podcast focused, along with the unparalleled audience reach of our broadcast radio assets, and supported by the largest sales force and the only unified ad tech stack in audio advertising -- all with the strong flywheel effect of our scale and leadership position,” said
“Bob and I are pleased to report our strong top line growth was coupled with continued margin expansion, generating Adjusted EBITDA of
Consolidated Results of Operations
Third Quarter 2021 Consolidated Results
Our consolidated revenue increased
Consolidated direct operating expenses increased
Consolidated Selling, General & Administrative ("SG&A") expenses increased
Our consolidated GAAP Operating income was
Adjusted EBITDA increased to
The Company generated operating cash flow of
New Reportable Segments
Beginning on
Additionally, beginning on
Business Segments: Results of Operations
Third Quarter 2021 Multiplatform Group Results
(In thousands) |
Three Months Ended
|
|
% |
|
Nine Months Ended
|
|
% |
||||||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Revenue |
$ |
658,979 |
|
|
$ |
555,097 |
|
|
18.7 |
% |
|
$ |
1,762,726 |
|
|
$ |
1,541,823 |
|
|
14.3 |
% |
Operating expenses1 |
450,549 |
|
|
416,131 |
|
|
8.3 |
% |
|
1,268,107 |
|
|
1,265,094 |
|
|
0.2 |
% |
||||
Segment Adjusted EBITDA |
$ |
208,430 |
|
|
$ |
138,966 |
|
|
50.0 |
% |
|
$ |
494,619 |
|
|
$ |
276,729 |
|
|
78.7 |
% |
Segment Adjusted EBITDA margin |
31.6 |
% |
|
25.0 |
% |
|
|
|
28.1 |
% |
|
17.9 |
% |
|
|
1 | Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring Expenses. |
Revenue from our
Operating expenses increased
Segment Adjusted EBITDA Margin increased substantially YoY to
Third Quarter 2021 Digital Audio Group Results
(In thousands) |
Three Months Ended
|
|
% |
|
Nine Months Ended
|
|
% |
||||||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Revenue |
$ |
205,769 |
|
|
$ |
116,200 |
|
|
77.1 |
% |
|
$ |
561,252 |
|
|
$ |
302,203 |
|
|
85.7 |
% |
Operating expenses1 |
138,646 |
|
|
81,042 |
|
|
71.1 |
% |
|
399,828 |
|
|
231,589 |
|
|
72.6 |
% |
||||
Segment Adjusted EBITDA |
$ |
67,123 |
|
|
$ |
35,158 |
|
|
90.9 |
% |
|
$ |
161,424 |
|
|
$ |
70,614 |
|
|
128.6 |
% |
Segment Adjusted EBITDA margin |
32.6 |
% |
|
30.3 |
% |
|
|
|
28.8 |
% |
|
23.4 |
% |
|
|
1 | Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring Expenses. |
Revenue from our
Operating expenses increased
Segment Adjusted EBITDA Margin increased YoY to
Third Quarter 2021 Audio & Media Services Group Results
(In thousands) |
Three Months Ended
|
|
% |
|
Nine Months Ended
|
|
% |
||||||||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||||
Revenue |
$ |
66,078 |
|
|
$ |
75,039 |
|
|
(11.9 |
) |
% |
|
$ |
182,390 |
|
|
$ |
174,517 |
|
|
4.5 |
|
% |
Operating expenses1 |
43,656 |
|
|
46,247 |
|
|
(5.6 |
) |
% |
|
124,148 |
|
|
127,774 |
|
|
(2.8 |
) |
% |
||||
Segment Adjusted EBITDA |
$ |
22,422 |
|
|
$ |
28,792 |
|
|
(22.1 |
) |
% |
|
$ |
58,242 |
|
|
$ |
46,743 |
|
|
24.6 |
|
% |
Segment Adjusted EBITDA margin |
33.9 |
% |
|
38.4 |
% |
|
|
|
31.9 |
% |
|
26.8 |
% |
|
|
1 | Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring Expenses. |
Revenue from our
Operating expenses decreased
Segment Adjusted EBITDA Margin decreased YoY to
GAAP and Non-GAAP Measures: Consolidated
(In thousands) |
Three Months Ended
|
|
% |
|
Nine Months Ended
|
|
% |
|||||||||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
|||||||||||||
Revenue |
$ |
928,051 |
|
|
$ |
744,406 |
|
|
|
24.7 |
% |
|
$ |
2,496,321 |
|
|
|
$ |
2,012,688 |
|
|
|
24.0 |
% |
Operating income (loss) |
$ |
80,111 |
|
|
$ |
39,395 |
|
|
|
103.4 |
% |
|
$ |
31,881 |
|
|
|
$ |
(1,850,471 |
) |
|
|
NM |
|
Adjusted EBITDA1,3 |
$ |
230,213 |
|
|
$ |
162,124 |
|
|
|
42.0 |
% |
|
$ |
516,968 |
|
|
|
$ |
273,180 |
|
|
|
89.2 |
% |
Net income (loss) |
$ |
3,673 |
|
|
$ |
(32,112 |
) |
|
|
NM |
|
$ |
(270,343 |
) |
|
|
$ |
(1,918,165 |
) |
|
|
NM |
||
Cash provided by operating activities2 |
$ |
95,736 |
|
|
$ |
33,252 |
|
|
|
187.9 |
% |
|
$ |
196,593 |
|
|
|
$ |
136,161 |
|
|
|
44.4 |
% |
Free cash flow1,2,3 |
$ |
45,462 |
|
|
$ |
14,275 |
|
|
|
218.5 |
% |
|
$ |
95,258 |
|
|
|
$ |
77,638 |
|
|
|
22.7 |
% |
Free cash flow including net proceeds from real estate sales1,2,3 |
$ |
54,072 |
|
|
$ |
14,275 |
|
|
|
278.8 |
% |
|
$ |
116,309 |
|
|
|
$ |
77,638 |
|
|
|
49.8 |
% |
______________________________________________________
1 | See the end of this press release for reconciliations of (i) Adjusted EBITDA to Operating income, (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. |
|
2 |
We made cash interest payments from operations of |
|
3 | See Supplemental Disclosure Regarding Non-GAAP Financial Information. |
Certain prior period amounts have been reclassified to conform to the 2021 presentation of financial information throughout the press release.
Key Initiatives to Improve Cost Structure and Margins
In
Our investments in modernization delivered approximately
In
Liquidity and Financial Position
As of
Capital expenditures for the nine months ended
As of
The Company believes its previously announced modernization initiatives and other cost saving actions - in combination with the Company’s resilient capital structure - have substantially expanded the Company’s financial flexibility and liquidity while positioning the Company for further margin improvement as advertising demand continues to normalize.
On
Update on FCC Petition for Declaratory Ruling
As previously reported, following receipt of a Declaratory Ruling from the
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
|
|
% |
|
Nine Months Ended
|
|
% |
|||||||||||||||||||
|
2021 |
|
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||||||
Broadcast Radio |
$ |
483,456 |
|
|
|
$ |
404,460 |
|
|
|
19.5 |
|
% |
|
$ |
1,293,134 |
|
|
|
$ |
1,110,155 |
|
|
|
16.5 |
% |
Networks |
127,920 |
|
|
|
118,982 |
|
|
|
7.5 |
|
% |
|
366,592 |
|
|
|
349,889 |
|
|
|
4.8 |
% |
||||
Sponsorship and Events |
42,663 |
|
|
|
28,898 |
|
|
|
47.6 |
|
% |
|
93,641 |
|
|
|
73,055 |
|
|
|
28.2 |
% |
||||
Other |
4,940 |
|
|
|
2,757 |
|
|
|
79.2 |
|
% |
|
9,359 |
|
|
|
8,724 |
|
|
|
7.3 |
% |
||||
|
658,979 |
|
|
|
555,097 |
|
|
|
18.7 |
|
% |
|
1,762,726 |
|
|
|
1,541,823 |
|
|
|
14.3 |
% |
||||
Digital ex. Podcast |
141,573 |
|
|
|
93,574 |
|
|
|
51.3 |
|
% |
|
405,276 |
|
|
|
242,479 |
|
|
|
67.1 |
% |
||||
Podcast |
64,196 |
|
|
|
22,626 |
|
|
|
183.7 |
|
% |
|
155,976 |
|
|
|
59,724 |
|
|
|
161.2 |
% |
||||
|
205,769 |
|
|
|
116,200 |
|
|
|
77.1 |
|
% |
|
561,252 |
|
|
|
302,203 |
|
|
|
85.7 |
% |
||||
|
66,078 |
|
|
|
75,039 |
|
|
|
(11.9 |
) |
% |
|
182,390 |
|
|
|
174,517 |
|
|
|
4.5 |
% |
||||
Eliminations |
(2,775 |
) |
|
|
(1,930 |
) |
|
|
|
|
(10,047 |
) |
|
|
(5,855 |
) |
|
|
|
|||||||
Revenue, total1,2 |
$ |
928,051 |
|
|
|
$ |
744,406 |
|
|
|
24.7 |
|
% |
|
$ |
2,496,321 |
|
|
|
$ |
2,012,688 |
|
|
|
24.0 |
% |
1 |
Excluding the impact of political revenue, Revenue from the |
|
2 |
Excluding the impact of political revenue, Revenue from the |
Conference Call
About
With its quarter of a billion monthly listeners, the iHeartMedia
The iHeartMedia
The company’s Audio & Media Services reportable segment includes
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
APPENDIX
TABLE 1 - Comparison of operating performance |
|||||||||||||||||||||||
(In thousands) |
Three Months Ended
|
|
% |
|
Nine Months Ended
|
|
% |
||||||||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||||
Revenue |
$ |
928,051 |
|
|
$ |
744,406 |
|
|
24.7 |
% |
|
$ |
2,496,321 |
|
|
$ |
2,012,688 |
|
|
|
24.0 |
|
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct operating expenses (excludes depreciation and amortization) |
325,766 |
|
|
270,862 |
|
|
20.3 |
% |
|
939,094 |
|
|
808,925 |
|
|
|
16.1 |
|
% |
||||
Selling, general and administrative expenses (excludes depreciation and amortization) |
390,086 |
|
|
333,095 |
|
|
17.1 |
% |
|
1,105,056 |
|
|
1,018,258 |
|
|
|
8.5 |
|
% |
||||
Depreciation and amortization |
108,100 |
|
|
99,379 |
|
|
8.8 |
% |
|
343,408 |
|
|
299,494 |
|
|
|
14.7 |
|
% |
||||
Impairment charges |
11,647 |
|
|
— |
|
|
NM |
|
49,391 |
|
|
1,733,235 |
|
|
|
(97.2 |
) |
% |
|||||
Other operating expense, net |
12,341 |
|
|
1,675 |
|
|
NM |
|
27,491 |
|
|
3,247 |
|
|
|
NM |
|
||||||
Operating income (loss) |
$ |
80,111 |
|
|
$ |
39,395 |
|
|
103.4 |
% |
|
$ |
31,881 |
|
|
$ |
(1,850,471 |
) |
|
|
NM |
|
|
Depreciation and amortization |
108,100 |
|
|
99,379 |
|
|
|
|
343,408 |
|
|
299,494 |
|
|
|
|
|||||||
Impairment charges |
11,647 |
|
|
— |
|
|
|
|
49,391 |
|
|
1,733,235 |
|
|
|
|
|||||||
Other operating expense, net |
12,341 |
|
|
1,675 |
|
|
|
|
27,491 |
|
|
3,247 |
|
|
|
|
|||||||
Share-based compensation expense |
5,993 |
|
|
5,885 |
|
|
|
|
17,581 |
|
|
14,728 |
|
|
|
|
|||||||
Restructuring expenses |
12,021 |
|
|
15,790 |
|
|
|
|
47,216 |
|
|
72,947 |
|
|
|
|
|||||||
Adjusted EBITDA1 |
$ |
230,213 |
|
|
$ |
162,124 |
|
|
42.0 |
% |
|
$ |
516,968 |
|
|
$ |
273,180 |
|
|
|
89.2 |
|
% |
Certain prior period amounts have been reclassified to conform to the 2021 presentation of financial information throughout the press release.
1 | See the end of this press release for reconciliations of (i) Adjusted EBITDA to Operating income, (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
|
|
Nine Months Ended
|
||||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
Revenue |
$ |
928,051 |
|
|
|
$ |
744,406 |
|
|
|
$ |
2,496,321 |
|
|
|
$ |
2,012,688 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||||||
Direct operating expenses (excludes depreciation and amortization) |
325,766 |
|
|
|
270,862 |
|
|
|
939,094 |
|
|
|
808,925 |
|
|
||||
Selling, general and administrative expenses (excludes depreciation and amortization) |
390,086 |
|
|
|
333,095 |
|
|
|
1,105,056 |
|
|
|
1,018,258 |
|
|
||||
Depreciation and amortization |
108,100 |
|
|
|
99,379 |
|
|
|
343,408 |
|
|
|
299,494 |
|
|
||||
Impairment charges1 |
11,647 |
|
|
|
— |
|
|
|
49,391 |
|
|
|
1,733,235 |
|
|
||||
Other operating expense, net |
12,341 |
|
|
|
1,675 |
|
|
|
27,491 |
|
|
|
3,247 |
|
|
||||
Operating income (loss) |
80,111 |
|
|
|
39,395 |
|
|
|
31,881 |
|
|
|
(1,850,471 |
) |
|
||||
Interest expense, net |
82,481 |
|
|
|
85,562 |
|
|
|
252,489 |
|
|
|
257,614 |
|
|
||||
Gain (loss) on investments, net |
(10,367 |
) |
|
|
62 |
|
|
|
39,468 |
|
|
|
(8,613 |
) |
|
||||
Equity in loss of nonconsolidated affiliates |
(1,056 |
) |
|
|
(58 |
) |
|
|
(1,115 |
) |
|
|
(653 |
) |
|
||||
Other expense, net |
(9,681 |
) |
|
|
(1,177 |
) |
|
|
(10,851 |
) |
|
|
(10,295 |
) |
|
||||
Loss before income taxes |
(23,474 |
) |
|
|
(47,340 |
) |
|
|
(193,106 |
) |
|
|
(2,127,646 |
) |
|
||||
Income tax benefit (expense) |
27,147 |
|
|
|
15,228 |
|
|
|
(77,237 |
) |
|
|
209,481 |
|
|
||||
Net income (loss) |
3,673 |
|
|
|
(32,112 |
) |
|
|
(270,343 |
) |
|
|
(1,918,165 |
) |
|
||||
Less amount attributable to noncontrolling interest |
493 |
|
|
|
— |
|
|
|
486 |
|
|
|
— |
|
|
||||
Net income (loss) attributable to the Company |
$ |
3,180 |
|
|
|
$ |
(32,112 |
) |
|
|
$ |
(270,829 |
) |
|
|
$ |
(1,918,165 |
) |
|
1 |
Impairment charges in the nine months ended |
TABLE 3 - Selected Balance Sheet Information |
|||||||
Selected balance sheet information for |
|||||||
(In millions) |
|
|
|
||||
Cash |
$ |
369.1 |
|
|
$ |
720.7 |
|
Total Current Assets |
1,356.0 |
|
|
1,619.0 |
|
||
Net Property, Plant and Equipment |
769.8 |
|
|
811.7 |
|
||
Total Assets |
8,810.6 |
|
|
9,203.0 |
|
||
Current Liabilities (excluding current portion of long-term debt) |
781.6 |
|
|
683.0 |
|
||
Long-term Debt (including current portion of long-term debt) |
5,737.4 |
|
|
6,016.9 |
|
||
Stockholders' Equity |
798.0 |
|
|
1,050.8 |
|
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, and Free Cash Flow and Free cash flow including net proceeds from real estate sales for the three and nine months ended
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 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 a measure calculated in accordance with GAAP, they 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 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 the Net debt to Adjusted EBITDA ratio as Net debt divided by Adjusted EBITDA. The Company uses the Net debt to Adjusted EBITDA ratio to evaluate the Company's leverage. We believe this measure is an important indicator of the Company's ability to service its long-term debt obligations.
We define total available liquidity 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.
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
Our Earnings Call on
Predecessor - Successor Presentation
Our financial results for the periods from
The Company cannot adequately benchmark the operating results of the period from
The combined results for the three months ended
Management has provided the results for the Predecessor, Successor and combined results for the three months ended
Reconciliation of Operating Income (Loss) to Adjusted EBITDA |
||||||||||||||||
(In thousands) |
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||||
Operating income (loss) |
$ |
80,111 |
|
|
$ |
39,395 |
|
|
$ |
31,881 |
|
|
$ |
(1,850,471 |
) |
|
Depreciation and amortization |
108,100 |
|
|
99,379 |
|
|
343,408 |
|
|
299,494 |
|
|
||||
Impairment charges1 |
11,647 |
|
|
— |
|
|
49,391 |
|
|
1,733,235 |
|
|
||||
Other operating expense, net2 |
12,341 |
|
|
1,675 |
|
|
27,491 |
|
|
3,247 |
|
|
||||
Share-based compensation expense |
5,993 |
|
|
5,885 |
|
|
17,581 |
|
|
14,728 |
|
|
||||
Restructuring expenses |
12,021 |
|
|
15,790 |
|
|
47,216 |
|
|
72,947 |
|
|
||||
Adjusted EBITDA |
$ |
230,213 |
|
|
$ |
162,124 |
|
|
$ |
516,968 |
|
|
$ |
273,180 |
|
|
1 |
Impairment charges in the nine months ended |
|
2 | Increase in Other operating expense, net is driven by net losses recognized in relation to sales of real estate. |
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA |
|||||||||||||||||||
(In thousands) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
Net income (loss) |
$ |
3,673 |
|
|
|
$ |
(32,112 |
) |
|
|
$ |
(270,343 |
) |
|
|
$ |
(1,918,165 |
) |
|
Income tax expense |
(27,147 |
) |
|
|
(15,228 |
) |
|
|
77,237 |
|
|
|
(209,481 |
) |
|
||||
Interest expense, net |
82,481 |
|
|
|
85,562 |
|
|
|
252,489 |
|
|
|
257,614 |
|
|
||||
Depreciation and amortization |
108,100 |
|
|
|
99,379 |
|
|
|
343,408 |
|
|
|
299,494 |
|
|
||||
EBITDA |
$ |
167,107 |
|
|
|
$ |
137,601 |
|
|
|
$ |
402,791 |
|
|
|
$ |
(1,570,538 |
) |
|
Loss (gain) on investments, net |
10,367 |
|
|
|
(62 |
) |
|
|
(39,468 |
) |
|
|
8,613 |
|
|
||||
Other expense, net |
9,681 |
|
|
|
1,177 |
|
|
|
10,851 |
|
|
|
10,295 |
|
|
||||
Equity in loss of nonconsolidated affiliates |
1,056 |
|
|
|
58 |
|
|
|
1,115 |
|
|
|
653 |
|
|
||||
Impairment charges |
11,647 |
|
|
|
— |
|
|
|
49,391 |
|
|
|
1,733,235 |
|
|
||||
Other operating expense, net |
12,341 |
|
|
|
1,675 |
|
|
|
27,491 |
|
|
|
3,247 |
|
|
||||
Share-based compensation expense |
5,993 |
|
|
|
5,885 |
|
|
|
17,581 |
|
|
|
14,728 |
|
|
||||
Restructuring expenses |
12,021 |
|
|
|
15,790 |
|
|
|
47,216 |
|
|
|
72,947 |
|
|
||||
Adjusted EBITDA |
$ |
230,213 |
|
|
|
$ |
162,124 |
|
|
|
$ |
516,968 |
|
|
|
$ |
273,180 |
|
|
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow and Free cash flow including net proceeds from real estate sales |
|||||||||||||||||||
(In thousands) |
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
Cash provided by operating activities |
$ |
95,736 |
|
|
|
$ |
33,252 |
|
|
|
$ |
196,593 |
|
|
|
$ |
136,161 |
|
|
Purchases of property, plant and equipment |
(50,274 |
) |
|
|
(18,977 |
) |
|
|
(101,335 |
) |
|
|
(58,523 |
) |
|
||||
Free cash flow |
45,462 |
|
|
|
14,275 |
|
|
|
95,258 |
|
|
|
$ |
77,638 |
|
|
|||
Net proceeds from real estate sales1 |
8,610 |
|
|
|
— |
|
|
|
21,051 |
|
|
|
— |
|
|
||||
Free cash flow including net proceeds from real estate sales |
$ |
54,072 |
|
|
|
$ |
14,275 |
|
|
|
$ |
116,309 |
|
|
|
$ |
77,638 |
|
|
1 | During the quarter and continuing through 2021, we will deploy significant capital expenditures to accelerate the proactive streamlining of our real estate footprint. 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, excluding Political Advertising Revenue, to Revenue |
||||||||||||||||||||||||||
(In thousands) |
Three Months Ended
|
|
% Change |
|
Nine Months Ended
|
|
% Change |
|||||||||||||||||||
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
|||||||||||||||||
Consolidated revenue |
$ |
928,051 |
|
|
|
$ |
744,406 |
|
|
|
24.7 |
|
% |
|
2,496,321 |
|
|
|
2,012,688 |
|
|
|
24.0 |
% |
||
Excluding: Political revenue |
(7,836 |
) |
|
|
(39,588 |
) |
|
|
|
|
(19,521 |
) |
|
|
(72,382 |
) |
|
|
|
|||||||
Consolidated revenue, excluding political |
$ |
920,215 |
|
|
|
$ |
704,818 |
|
|
|
30.6 |
|
% |
|
$ |
2,476,800 |
|
|
|
$ |
1,940,306 |
|
|
|
27.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
658,979 |
|
|
|
$ |
555,097 |
|
|
|
18.7 |
|
% |
|
1,762,726 |
|
|
|
1,541,823 |
|
|
|
14.3 |
% |
||
Excluding: Political revenue |
(5,858 |
) |
|
|
(20,957 |
) |
|
|
|
|
(13,491 |
) |
|
|
(42,884 |
) |
|
|
|
|||||||
|
$ |
653,121 |
|
|
|
$ |
534,140 |
|
|
|
22.3 |
|
% |
|
$ |
1,749,235 |
|
|
|
$ |
1,498,939 |
|
|
|
16.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
205,769 |
|
|
|
$ |
116,200 |
|
|
|
77.1 |
|
% |
|
561,252 |
|
|
|
302,203 |
|
|
|
85.7 |
% |
||
Excluding: Political revenue |
(366 |
) |
|
|
(842 |
) |
|
|
|
|
(1,034 |
) |
|
|
(1,504 |
) |
|
|
|
|||||||
|
$ |
205,403 |
|
|
|
$ |
115,358 |
|
|
|
78.1 |
|
% |
|
$ |
560,218 |
|
|
|
$ |
300,699 |
|
|
|
86.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Audio & Media Group Services revenue |
$ |
66,078 |
|
|
|
$ |
75,039 |
|
|
|
(11.9 |
) |
% |
|
182,390 |
|
|
|
174,517 |
|
|
|
4.5 |
% |
||
Excluding: Political revenue |
(1,612 |
) |
|
|
(17,789 |
) |
|
|
|
|
(4,996 |
) |
|
|
(27,994 |
) |
|
|
|
|||||||
|
$ |
64,466 |
|
|
|
$ |
57,250 |
|
|
|
12.6 |
|
% |
|
$ |
177,394 |
|
|
|
$ |
146,523 |
|
|
|
21.1 |
% |
Reconciliation of Total Debt to Net Debt |
|||
(In thousands) |
|
||
Current portion of long-term debt |
$ |
725 |
|
Long-term debt |
5,736,650 |
|
|
Total debt |
$ |
5,737,375 |
|
Less: Cash and cash equivalents |
369,094 |
|
|
Net debt |
$ |
5,368,281 |
|
Segment Results |
||||||||||||||||||||||||||
The following tables present the Company's segment results for the Company for the periods presented: |
||||||||||||||||||||||||||
|
Segments |
|
|
|
|
|
|
|||||||||||||||||||
(In thousands) |
Multiplatform
|
|
Digital Audio
|
|
Audio &
|
|
Corporate
|
|
Eliminations |
|
Consolidated |
|||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||
Revenue |
$ |
658,979 |
|
|
$ |
205,769 |
|
|
$ |
66,078 |
|
|
$ |
— |
|
|
|
$ |
(2,775 |
) |
|
|
$ |
928,051 |
|
|
Operating expenses(1) |
450,549 |
|
|
138,646 |
|
|
43,656 |
|
|
67,762 |
|
|
|
(2,775 |
) |
|
|
697,838 |
|
|
||||||
Adjusted EBITDA |
$ |
208,430 |
|
|
$ |
67,123 |
|
|
$ |
22,422 |
|
|
$ |
(67,762 |
) |
|
|
$ |
— |
|
|
|
$ |
230,213 |
|
|
Adjusted EBITDA margin |
31.6 |
% |
|
32.6 |
% |
|
33.9 |
% |
|
|
|
|
|
24.8 |
|
% |
||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
(108,100 |
) |
|
|||||||||||||
Impairment charges |
|
|
|
|
|
|
|
|
|
|
(11,647 |
) |
|
|||||||||||||
Other operating expense, net |
|
|
|
|
|
|
|
|
|
|
(12,341 |
) |
|
|||||||||||||
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
(5,993 |
) |
|
|||||||||||||
Restructuring expenses |
|
|
|
|
|
|
|
|
|
|
(12,021 |
) |
|
|||||||||||||
Operating income |
|
|
|
|
|
|
|
|
|
|
$ |
80,111 |
|
|
||||||||||||
Operating margin |
|
|
|
|
|
|
|
|
|
|
8.6 |
|
% |
(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
|
|
Digital Audio
|
|
Audio &
|
|
Corporate
|
|
Eliminations |
|
Consolidated |
|||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||
Revenue |
$ |
555,097 |
|
|
$ |
116,200 |
|
|
$ |
75,039 |
|
|
$ |
— |
|
|
|
$ |
(1,930 |
) |
|
|
$ |
744,406 |
|
|
Operating expenses(1) |
416,131 |
|
|
81,042 |
|
|
46,247 |
|
|
40,792 |
|
|
|
(1,930 |
) |
|
|
582,282 |
|
|
||||||
Adjusted EBITDA |
$ |
138,966 |
|
|
$ |
35,158 |
|
|
$ |
28,792 |
|
|
$ |
(40,792 |
) |
|
|
$ |
— |
|
|
|
$ |
162,124 |
|
|
Adjusted EBITDA margin |
25.0 |
% |
|
30.3 |
% |
|
38.4 |
% |
|
|
|
|
|
21.8 |
|
% |
||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
(99,379 |
) |
|
|||||||||||||
Other operating expense, net |
|
|
|
|
|
|
|
|
|
|
(1,675 |
) |
|
|||||||||||||
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
(5,885 |
) |
|
|||||||||||||
Restructuring expenses |
|
|
|
|
|
|
|
|
|
|
(15,790 |
) |
|
|||||||||||||
Operating income |
|
|
|
|
|
|
|
|
|
|
$ |
39,395 |
|
|
||||||||||||
Operating margin |
|
|
|
|
|
|
|
|
|
|
5.3 |
|
% |
|
Segments |
|
|
|
|
|
|
|||||||||||||||||||
(In thousands) |
Multiplatform
|
|
Digital Audio
|
|
Audio &
|
|
Corporate
|
|
Eliminations |
|
Consolidated |
|||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||
Revenue |
$ |
605,850 |
|
|
$ |
197,930 |
|
|
$ |
61,175 |
|
|
$ |
— |
|
|
|
$ |
(3,350 |
) |
|
|
$ |
861,605 |
|
|
Operating expenses(1) |
424,452 |
|
|
143,640 |
|
|
40,704 |
|
|
71,651 |
|
|
|
(3,350 |
) |
|
|
677,097 |
|
|
||||||
Adjusted EBITDA |
$ |
181,398 |
|
|
$ |
54,290 |
|
|
$ |
20,471 |
|
|
$ |
(71,651 |
) |
|
|
$ |
— |
|
|
|
$ |
184,508 |
|
|
Adjusted EBITDA margin |
29.9 |
% |
|
27.4 |
% |
|
33.5 |
% |
|
|
|
|
|
21.4 |
|
% |
||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
(127,945 |
) |
|
|||||||||||||
Other operating expense, net |
|
|
|
|
|
|
|
|
|
|
(12,379 |
) |
|
|||||||||||||
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
(5,903 |
) |
|
|||||||||||||
Restructuring expenses |
|
|
|
|
|
|
|
|
|
|
(10,155 |
) |
|
|||||||||||||
Operating income |
|
|
|
|
|
|
|
|
|
|
$ |
28,126 |
|
|
||||||||||||
Operating margin |
|
|
|
|
|
|
|
|
|
|
3.3 |
|
% |
(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
|
|
Digital Audio
|
|
Audio &
|
|
Corporate
|
|
Eliminations |
|
Consolidated |
|||||||||||||||
Nine Months Ended |
||||||||||||||||||||||||||
Revenue |
$ |
1,762,726 |
|
|
$ |
561,252 |
|
|
$ |
182,390 |
|
|
$ |
— |
|
|
|
$ |
(10,047 |
) |
|
|
$ |
2,496,321 |
|
|
Operating expenses(1) |
1,268,107 |
|
|
399,828 |
|
|
124,148 |
|
|
197,317 |
|
|
|
(10,047 |
) |
|
|
1,979,353 |
|
|
||||||
Adjusted EBITDA |
$ |
494,619 |
|
|
$ |
161,424 |
|
|
$ |
58,242 |
|
|
$ |
(197,317 |
) |
|
|
$ |
— |
|
|
|
$ |
516,968 |
|
|
Adjusted EBITDA margin |
28.1 |
% |
|
28.8 |
% |
|
31.9 |
% |
|
|
|
|
|
20.7 |
|
% |
||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
(343,408 |
) |
|
|||||||||||||
Impairment charges |
|
|
|
|
|
|
|
|
|
|
(49,391 |
) |
|
|||||||||||||
Other operating expense, net |
|
|
|
|
|
|
|
|
|
|
(27,491 |
) |
|
|||||||||||||
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
(17,581 |
) |
|
|||||||||||||
Restructuring expenses |
|
|
|
|
|
|
|
|
|
|
(47,216 |
) |
|
|||||||||||||
Operating income |
|
|
|
|
|
|
|
|
|
|
$ |
31,881 |
|
|
||||||||||||
Operating margin |
|
|
|
|
|
|
|
|
|
|
1.3 |
|
% |
|
Segments |
|
|
|
|
|
|
|||||||||||||||||||
(In thousands) |
Multiplatform
|
|
Digital Audio
|
|
Audio &
|
|
Corporate
|
|
Eliminations |
|
Consolidated |
|||||||||||||||
Nine Months Ended |
||||||||||||||||||||||||||
Revenue |
$ |
1,541,823 |
|
|
$ |
302,203 |
|
|
$ |
174,517 |
|
|
$ |
— |
|
|
|
$ |
(5,855 |
) |
|
|
$ |
2,012,688 |
|
|
Operating expenses(1) |
1,265,094 |
|
|
231,589 |
|
|
127,774 |
|
|
120,906 |
|
|
|
(5,855 |
) |
|
|
1,739,508 |
|
|
||||||
Adjusted EBITDA |
$ |
276,729 |
|
|
$ |
70,614 |
|
|
$ |
46,743 |
|
|
$ |
(120,906 |
) |
|
|
$ |
— |
|
|
|
$ |
273,180 |
|
|
Adjusted EBITDA margin |
17.9 |
% |
|
23.4 |
% |
|
26.8 |
% |
|
|
|
|
|
13.6 |
|
% |
||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
(299,494 |
) |
|
|||||||||||||
Impairment charges |
|
|
|
|
|
|
|
|
|
|
(1,733,235 |
) |
|
|||||||||||||
Other operating expense, net |
|
|
|
|
|
|
|
|
|
|
(3,247 |
) |
|
|||||||||||||
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
(14,728 |
) |
|
|||||||||||||
Restructuring expenses |
|
|
|
|
|
|
|
|
|
|
(72,947 |
) |
|
|||||||||||||
Operating loss |
|
|
|
|
|
|
|
|
|
|
$ |
(1,850,471 |
) |
|
||||||||||||
Operating margin |
|
|
|
|
|
|
|
|
|
|
(91.9 |
) |
% |
(1) | Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses and share-based compensation expenses. |
Q3 2021 Segment Performance vs. Q3 2019 |
|||||||||||||
(In thousands) |
Three Months Ended
|
|
% |
||||||||||
|
2021 |
|
2019 |
|
Change |
||||||||
|
658,979 |
|
|
|
793,708 |
|
|
|
(17.0 |
) |
% |
||
|
205,769 |
|
|
|
96,656 |
|
|
|
112.9 |
|
% |
||
|
66,078 |
|
|
|
59,873 |
|
|
|
10.4 |
|
% |
||
Eliminations |
(2,775 |
) |
|
|
(1,899 |
) |
|
|
|
||||
Revenue, total |
$ |
928,051 |
|
|
|
$ |
948,338 |
|
|
|
(2.1 |
) |
% |
Q2 2021 Segment Performance vs. Q2 2019 |
||||||||||||||||||||||||
(In thousands) |
Successor
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP
|
|
|
||||||||||||||
|
Three Months
|
|
Period from May
|
|
|
Period from April
|
|
Three Months
|
|
% |
||||||||||||||
|
2021 |
|
2019 |
|
|
2019 |
|
2019 |
|
Change |
||||||||||||||
|
605,850 |
|
|
|
531,992 |
|
|
|
|
233,621 |
|
|
|
765,613 |
|
|
|
(20.9 |
) |
% |
||||
|
197,930 |
|
|
|
64,238 |
|
|
|
|
26,840 |
|
|
|
91,078 |
|
|
|
117.3 |
|
% |
||||
|
61,175 |
|
|
|
40,537 |
|
|
|
|
17,970 |
|
|
|
58,507 |
|
|
|
4.6 |
|
% |
||||
Eliminations |
(3,350 |
) |
|
|
(1,121 |
) |
|
|
|
(757 |
) |
|
|
(1,878 |
) |
|
|
|
||||||
Revenue, total |
$ |
861,605 |
|
|
|
$ |
635,646 |
|
|
|
|
$ |
277,674 |
|
|
|
$ |
913,320 |
|
|
|
(5.7 |
) |
% |
Q1 2021 Segment Performance vs. Q1 2019 |
|||||||||||||
(In thousands) |
Three Months Ended
|
|
% |
||||||||||
|
2021 |
|
2019 |
|
Change |
||||||||
|
497,897 |
|
|
|
670,267 |
|
|
|
(25.7 |
) |
% |
||
|
157,553 |
|
|
|
75,949 |
|
|
|
107.4 |
|
% |
||
|
55,137 |
|
|
|
51,392 |
|
|
|
7.3 |
|
% |
||
Eliminations |
(3,922 |
) |
|
|
(1,811 |
) |
|
|
|
||||
Revenue, total |
$ |
706,665 |
|
|
|
$ |
795,797 |
|
|
|
(11.2 |
) |
% |
(1) | See Supplemental Disclosure Regarding Non-GAAP Financial Information. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006109/en/
Media
Chief Communications Officer
(212) 377-1105
wendygoldberg@iheartmedia.com
Investors
EVP, Deputy CFO, and Head of Investor Relations
(212) 377-1336
mbm@iheartmedia.com
Source:
FAQ
What were iHeartMedia's Q3 2021 revenue figures?
How did iHeartMedia's Digital Audio Group perform in Q3 2021?
What is the expected revenue growth for iHeartMedia in Q4 2021?
What was iHeartMedia's adjusted EBITDA for Q3 2021?