Iheartmedia Annual Report 2020
Total Page：16
File Type：pdf, Size：1020Kb
iHeartMedia Annual Report 2020 Form 10-K (NASDAQ:IHRT) Published: February 27th, 2020 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2019, or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to _________. Commission File Number 000-53354 IHEARTMEDIA, INC. (Exact name of registrant as specified in its charter) Delaware 26-0241222 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 20880 Stone Oak Parkway San Antonio, Texas 78258 (Address of principal executive offices) (Zip code) (210) 822-2828 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, par value $0.001 per share iHRT The Nasdaq Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. YES [ ] NO [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).YES [X] NO [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ ] Emerging growth company [ ] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or reviews financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). YES [ ] NO [X] Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES [X] NO [ ] The aggregate market value of the Class A Common Stock held by non-affiliates of the registrant, based on the closing sales price of $15.05 on June 28, 2019, was approximately $854.9 million. On February 21, 2020, there were 58,538,442 outstanding shares of Class A common stock, 6,901,987 outstanding shares of Class B common stock, and 80,175,925 outstanding Special Warrants. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement for the registrant’s 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2019 are incorporated herein by reference in Part III of this Annual Report on Form 10-K. IHEARTMEDIA, INC. INDEX TO FORM 10-K Page Number PART I Item 1. Business 1 Item 1A. Risk Factors 13 Item 1B. Unresolved Staff Comments 22 Item 2. Properties 22 Item 3. Legal Proceedings 22 Item 4. Mine Safety Disclosures 23 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Selected Financial Data 29 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 55 Item 8. Financial Statements and Supplementary Data 56 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 130 Item 9A. Controls and Procedures 130 Item 9B. Other Information 132 PART III Item 10. Directors, Executive Officers and Corporate Governance 133 Item 11. Executive Compensation 133 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 133 Item 13. Certain Relationships and Related Transactions, and Director Independence 133 Item 14. Principal Accounting Fees and Services 134 PART IV Item 15. Exhibits and Financial Statements Schedules 135 Item 16. Form 10-K Summary 141 Basis of Presentation As used in this Annual Report on Form 10-K (this “Form 10-K”), unless the context otherwise requires, references to: “we,” “us,” “our,” the “Company,” “iHeartMedia” and similar references refer to iHeartMedia, Inc. On March 14, 2018 (the “Petition Date”), the Company, iHeartCommunications, Inc. (“iHeartCommunications”) and certain of the Company’s direct and indirect domestic subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code. On May 1, 2019 (the “Effective Date”), the Company emerged from Chapter 11 of the Bankruptcy Code through (a) a series of transactions (the “Separation”) through which our former subsidiary, Clear Channel Outdoor Holdings, Inc. (“CCOH”), its parent Clear Channel Holdings, Inc. (“CCH”) and its subsidiaries (collectively with CCOH and CCH, the “Outdoor Group”) were separated from, and ceased to be controlled by, us and our subsidiaries (the “iHeart Group”), and (b) a series of transactions (the “Reorganization”) through which iHeartCommunications’ debt was reduced from approximately $16 billion to approximately $5.8 billion and a global compromise and settlement among holders of claims (“Claimholders”) in connection with the Chapter 11 Cases was effected (collectively, the “Plan of Reorganization”). All of the Company’s equity existing as of the Effective Date was canceled on such date and 56,861,941 shares of Class A common stock, 6,947,567 shares of Class B common stock, and 81,453,648 special warrants were issued on the Effective Date pursuant to our Plan of Reorganization. Upon the Company's emergence from the Chapter 11 Cases, the Company adopted fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after the Effective Date, are not comparable with the consolidated financial statements on or before that date. Refer to Note 3, Fresh Start Accounting, for additional information. References to “Successor” or “Successor Company” relate to the financial position and results of operations of the Company after the Effective Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of the Company on or before the Effective Date. PART I ITEM 1. BUSINESS Overview iHeartMedia is the number one audio media company in the U.S. based on consumer reach. Within the audio industry, companies operate in two primary sectors: • The ‘music collection’ sector, which essentially replaced downloads and CDs and • The radio-‘companionship’ sector, in which people regard their favorite broadcast radio personalities as trusted friends and companions on whom they rely to provide news on everything from entertainment and local content to points of view, information about new music and artists, weather, traffic and more. We operate in the second sector and have used our large scale and national reach in broadcast radio to build additional complementary platforms. We are now the only major multi‑platform audio media company, with each platform building on and extending our companionship relationship with the consumer. Our product strategy is ‘be where our listeners are with the products and services they expect from us’. Our reach now extends across more than 250 platforms and over 2,000 different connected devices-and that reach continues to grow. The platforms we lead in are: • Broadcast radio: We have a strong relationship with our consumers, and our broadcast radio audience is almost twice as large as that of the next largest commercial broadcast radio company, as measured by Nielsen. • Digital: Our iHeartRadio digital platform is the number one streaming broadcast radio platform-with five times the digital listening hours of the next largest commercial broadcast radio company, as measured by Triton. • Podcasts: We are the number one commercial podcast publisher-and we are two times the size of the next largest commercial podcaster as measured by downloads, according to Podtrac. • Social media: Our personalities, stations and brands have a social footprint that includes 215 million fans and followers as measured by Shareablee, which is nine times the size of the next largest commercial broadcast audio media company. This social footprint was at the heart of delivering 310 billion social media impressions for our 2019 iHeartRadio Music Awards and its associated activities. • Events: We have over 20,000 local live events per year and eight major nationally‑recognized tentpole events, which provide significant opportunities for consumer promotion, advertising and social amplification.