Thank you for being here. My name is Rebecca, and I will be your conference operator today. I would like to welcome everyone to the iHeartMedia Q3 2024 Earnings Call. I will now hand the call over to Mike McGuinness, Head of Investor Relations. Please proceed.

Good morning, everyone, and thank you for taking the time to join us for our third quarter 2024 earnings call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO; and Rich Bressler, our President, COO, and CFO. At the conclusion of our prepared remarks, management will take your questions. In addition to our press release, we have an earnings presentation available on our website that you can use to follow along with our remarks. Please note that this call may include forward-looking statements regarding our financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings, including today's recent 8-K filing. Additionally, during this call we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release, earnings presentation, and our SEC filings, which are available in the Investor Relations section of our website. And now I'll turn the call over to Bob.

Thanks, Mike, and good morning, everyone. Before we discuss the company's third quarter operating results, I want to provide two important and positive updates. The first is about our capital structure. As you may have seen in our 8-K filed this morning, we're pleased to report that we have entered into a Transaction Support Agreement with a group of debtholders representing, on an aggregate basis, approximately 80% of the company's outstanding debt. We've agreed to pursue and the supporting debtholders have agreed to support exchange offer transactions that will be offered to all holders of the company's existing debt. The exchange offers will accomplish three things: one, they will extend the majority of our debt maturities by three years; two, our current consolidated annual cash interest expenses will remain essentially flat; and three, they will provide for some overall debt reduction. We expect the exchange offers to close prior to the end of the year. The high levels of support from our debtholders demonstrate the confidence they have in the future of our business, for which we are extremely appreciative. The Transaction Support Agreement marks an important step in our commitment to optimize our balance sheet, and it provides the company with the flexibility to remain focused on continuing iHeart's transformation. The second is an update on our ongoing modernization initiatives and the associated cost savings. As a reminder, iHeart is a high operating leverage business. Technology is the key to increasing our operating leverage, and it is a constant focus for us. It allows us to speed up processes, streamline legacy systems, and it enables our folks to create more, better, and faster. We've now taken another significant step in our modernization journey: flattening our organization, eliminating redundancies, and breaking down silos. It will be easier to do business with us and easier to get our business done as well as accelerate revenue growth. This new use of technology will have a major impact on cost, reducing our annual expenses by approximately $150 million in 2025. Coupled with the full-year benefit of actions taken earlier this year, this brings our total annual cost savings to $200 million in 2025 compared to 2024. In addition to improving our operations, these cost savings give us greater certainty in delivering our financial performance for next year and beyond, and we will continue this modernization process as we further deploy AI and other advancements to transform our operating structure as we move forward. Now turning to our financial results, we're pleased to report that our third quarter 2024 results were in line with our previously provided adjusted EBITDA and revenue guidance ranges, and we see continued evidence that this is a recovery year for advertising revenues. While the marketplace is dynamic, we continue to see strong momentum in our podcast business, our digital ex-podcast business, and the sequential improvement of our Multiplatform Group's year-over-year revenue performance. In addition to the continuing positive impact of an ad market recovery, our results also reflect the power of our assets, the upside from political advertising, and the benefit of our ongoing focus on cost efficiencies. Now let me take you through some of the key financial results for the quarter. In the third quarter, we generated adjusted EBITDA of $205 million, within the guidance range we provided of $200 million to $220 million. Our consolidated revenues were up 5.8% compared to the prior year quarter, in line with our guidance of up mid-single digits. And excluding the impact of political, our consolidated revenues were even up 2% compared to the prior year quarter. Turning now to our individual operating segments, the Digital Audio Group generated third quarter revenues of $301 million, up 12.7% versus prior year, in line with our previously provided guidance of up low double digits, and represented approximately 30% of the company's total revenue and is now about half the size of the Multiplatform Group's revenue. For the quarter, the Digital Audio Group generated adjusted EBITDA of $100 million, up 6.8% versus prior year. The Digital Audio Group's adjusted EBITDA margins were 33.2%, continuing the trend of sequential margin improvement in each quarter this year. The Digital Audio Group's earnings are now almost three-quarters the size of the Multiplatform Group's earnings. Within the Digital Audio Group are our podcast revenues, which grew 11% versus prior year, in line with our previously provided guidance of up low double digits. Our non-podcast digital revenues grew 14% versus prior year, and we expect that strength to continue as well. In September, iHeart was once again ranked the number one podcast publisher in the U.S. according to Podtrac, and our financial discipline in podcasting continues to pay off, as our podcasting EBITDA margins remain accretive to our total company adjusted EBITDA margins. As a reminder, our leadership position in podcasting is, in part, the result of the power of our broadcast radio assets. We have used those assets to build not only the podcast business, but also the iHeartRadio app, which is the number one digital radio service, and our marquee live events business, which includes the recent iHeartRadio Music Festival as well as the upcoming iHeartRadio Jingle Ball Tour. In addition to our industry-leading podcast business and our digital radio streaming service, which has five times the digital listings of our closest competitor, we also have the largest social footprint of any audio service by a factor of six, and we operate 3,000 national and local websites that reach more than 140 million people in the United States each month, all of which represent additional opportunities for our advertising partners to interact with our highly engaged consumer base and provide additional revenue growth for the company. Turning now to the Multiplatform Group, which includes our broadcast radio networks and events businesses. In the third quarter, revenues were $620 million, down 1.1% versus prior year, in line with our previously provided guidance of down low single digits, and down 2.9%, excluding the impact of political advertising. Adjusted EBITDA was $130 million, compared to $162 million in the prior year quarter, due primarily to the timing of certain noncash marketing expenses associated with our iHeartRadio Music Festival, which we discussed last quarter, as well as expenses associated with serving as the exclusive audio home of NBC's coverage of the 2024 Summer Olympics in Paris. We believe NBC's ratings success further validates the strength of our relationship with our listeners and the power of our multiple platforms, including broadcast radio, to drive performance for our partners. And there's one more point I want to make about the power and uniqueness of our broadcast radio assets that's particularly relevant right now. Over the past few years, we've done groundbreaking work to identify and understand the ignored consumer as part of our ongoing tracking of the American consumer. This is a huge consumer group that feels ignored and even disrespected by the media and advertisers. Indeed, this week's national election could even be thought of as the revenge of the ignored consumer. Let me tell you who they are. Their top participatory sports are not golf and pickleball; they're cornhole and bowling, with hunting and fishing not far behind. They have deep respect for religion, the military, and the police, and they span gender, age, ethnicities, geographies, and income levels. We saw this ignored consumer and the wave of public dissatisfaction coming. How? We've been connecting with these ignored consumers for years through our network of trusted hosts and broadcast radio stations who talk and engage with them on a daily basis. These ignored consumers will have a tangible impact on business and marketing decisions going forward. And given our unique position here, we think we'll benefit from that. And with our Multiplatform Group, we're also continuing the important development of programmatic platforms that will enable the automatic buying, selling, and planning of our broadcast radio inventory, which allows us to participate in the growing and substantial digital and programmatic TAMs. Turning to the Audio & Media Services Group, revenues were $90 million, up 45.3% year-over-year, and adjusted EBITDA was $44 million, up 162% from $17 million in the prior year. Excluding the impact of political, the Audio & Media Services Group's revenues were still up 13.7%, driven primarily by the growth in digital revenues. Digital is an important growth area for Katz, and the ad tech investments made across iHeart will continue to enhance that performance. Before I turn it over to Rich, I want to take a moment to acknowledge the incredible work of our teams on the ground as two hurricanes impacted the country last month. As the storms approached, our local stations updated listeners to the forecast and provided life-saving insights on how to prepare for storms of this magnitude. And as the storms made landfall, our teams remained on-site and on the air, providing critical real-time updates to our listeners, often the only source of information available, as power outages knocked out TV stations and took down cell and WiFi service. We're extremely proud that in the midst of these overwhelming natural disasters the people of iHeart continued to do what they do best even as they were personally impacted: tirelessly supporting their communities in times of need, serving as trusted and necessary sources of information, assistance, and vital personal connection when nobody else could. And now I'll turn it over to Rich.

Thank you, Bob. As I take you through our results, you'll notice that our third quarter 2024 EBITDA results were in line with our revenue and adjusted EBITDA guidance ranges. Our Q3 2024 consolidated revenues were up 5.8% year-over-year, in line with the guidance we provided of up mid-single digits. Our consolidated direct operating expenses increased 7.8% for the quarter. This increase was primarily driven by higher variable content costs related to the increase in digital revenues. Our consolidated SG&A expenses increased 6.4% for the quarter. The increase was driven primarily by the timing of higher noncash marketing expense due to the 2024 Summer Olympics and the iHeartRadio Music Festival as well as costs incurred in connection with the cost savings initiatives implemented in the third quarter. We generated third quarter GAAP operating income of $76.7 million, compared to income of $69 million in the prior year quarter. Our third quarter adjusted EBITDA was $205 million, within the guidance range we provided of $200 million to $220 million, and compared to $204 million in the prior year quarter. Turning now to the performance of our operating segments. And as a reminder, there are slides in the earnings presentation on our segment performances. In the third quarter, the Digital Audio Group's revenues were $301 million, up 12.7% year-over-year, and they comprised approximately 30% of our third-quarter consolidated revenues. The Digital Audio Group's adjusted EBITDA was $100 million, up 6.8% year-over-year, and our Q3 margins were 33.2%. Within the Digital Audio Group are our podcasting revenues of $114 million, which grew 11% year-over-year, and our non-podcasting digital revenues of $187 million, which grew 13.6% year-over-year, reflecting the investments we have made in building out our more diversified digital capabilities, even though some of those incremental revenues came in at a slightly lower margin. The Multiplatform Group's revenues were $620 million, down 1.1% year-over-year or down 2.9% excluding the impact of political. Adjusted EBITDA was $130 million, down from $162 million in the prior year quarter, and the Multiplatform Group's adjusted EBITDA margins were 21%. Turning to the Audio & Media Services Group, revenues were $90 million, up 45.3% year-over-year, and adjusted EBITDA was $44 million, up 162% from $17 million in the prior year. Excluding the impact of political, the Audio & Media Services Group's revenues were up 13.7%, driven primarily by the growth in digital revenues. As Bob mentioned in his remarks, this morning we announced that we have entered into a Transaction Support Agreement with a group of debtholders representing approximately 80% of our existing debt to support an exchange of approximately $4.1 billion of debt for new notes and term loans. The key highlights here are that as a result of the transaction contemplated by the agreement we expect our new notes and term loans to have maturities ranging from 2029 to 2031, and we expect to slightly reduce our total debt levels. We also know many of you have watched carefully to see if an extension of our debt would increase our cash interest payments, and I am pleased to say that our annual cash interest expense will remain essentially unchanged. And notably, none of the exchange transactions will have any impact on the equity capitalization of the company. Overall, this transaction strengthens the company's financial flexibility while providing iHeart with ample runway to accelerate our strategic growth initiatives. This marks a significant step in the company's strategy of disciplined balance sheet and capital structure management, and we look forward to continuing to dialogue with additional debtholders in the coming weeks. At quarter-end, we had approximately $4.79 billion of net debt outstanding, which was the lowest net debt position in the history of our company. Our total liquidity was $858 million at quarter-end, which includes a cash balance of $432 million. Our quarter-ending net debt-to-adjusted EBITDA ratio was 7.2x, and we expect to end the year at approximately 6x. In the third quarter, our free cash flow was $73 million, compared to $68 million in the prior year quarter. Before I get into our detailed guidance, I want to spend a moment on our technology-driven efficiency actions and how you should think about them in the context of our financials. As Bob mentioned, as a result of the initiatives we announced today, we reduce our annual expenses by approximately $150 million in 2025. When we couple that with the full-year benefit of actions taken earlier this year, we will generate $200 million of cost savings in 2025 compared to 2024. There will be some ordinary cost add-backs to the business, like increasing music license fees in line with growing revenues, contractually obligated increases to certain licensed products and services, and additional compensation expense as we continue to invest in high-growth areas, among others, which are expected to add approximately $50 million to our 2025 expense base. This results in net savings of approximately $150 million in 2025 compared to 2024. Our continuous focus on cost efficiency not only helps to unlock the value of the company's assets but also provides us with the financial flexibility to weather periods of advertising uncertainty. Let me now give you some context for our Q4 guidance. As a result of the change in the Democratic presidential candidate, we expect our political revenues to be only slightly better compared to the last presidential election cycle in 2020, which was slightly less than we had originally expected. Although this is the best year of political spend we've ever had, this slight dip below our expectations has impacted Q4. In addition, like many other media companies and advertising agencies, we also saw a slowdown in non-political advertising leading up to election day, as a number of advertisers held their spend in what they seem to have viewed as a period of uncertainty. With the election now behind us, we expect non-political spending to resume. However, since we can't be certain advertisers will resume their prior spending levels, we reduced our full-year adjusted EBITDA guidance to approximately $750 million, as reflected in today's TSA filing, down from the previously announced range of $760 million to $800 million. Turning now to guidance for Q4 and the full year. We expect our Q4 2024 revenues to be up high single digits. We are still closing the month of October but expect revenues to be up approximately 15%. Turning to the individual segments for Q4. We expect the Digital Audio Group's revenues to be up high single digits; we expect Multiplatform Group's revenues to be up mid-single digits; and we expect the Audio & Media Services Group revenues to be up approximately 50%. We expect to generate fourth-quarter adjusted EBITDA of approximately $290 million, up approximately 39% compared to $208 million in the prior year quarter. We expect our full-year 2024 revenues to be up mid-single digits. As mentioned earlier, we expect to generate full-year adjusted EBITDA of approximately $750 million, up approximately 8% compared to $697 million in 2023. Turning to some of the items affecting our full-year free cash flow, we expect cash taxes to be approximately 5% of adjusted EBITDA in 2024. Our full-year 2024 capital expenditures are now expected to be approximately $95 million. Cash restructuring expenses will be approximately $100 million this year as we continue to execute on new opportunities to optimize our organization for efficiency and growth. And as today's TSA filing also included forward estimates, I want to take a minute to touch on a few of the key 2025 projections included there as well. We expect our full-year 2025 revenues to be approximately flat to 2024. Excluding the impact of political, we expect our 2025 revenues to be up low single digits. We expect to generate full-year adjusted EBITDA of approximately $770 million and free cash flow of approximately $200 million. At year-end 2025, we expect our net debt-to-adjusted EBITDA ratio to be approximately 5.5x. And as you'll see in today's TSA, we expect that to improve to approximately 3.2x by the end of 2028. We will now turn it over to the operator to take your questions. Thank you.

Your first question comes from the line of Stephen Laszczyk with Goldman Sachs.

Two, if I could. Maybe first on the '25 guide. Bob, your guidance for next year for revenue implies some nice growth in the underlying business, excluding political. I'm curious if you could just talk a little bit more about what you're hearing or seeing from your advertising partners that give you confidence in the ad market improving heading into next year, what verticals do you see recovering or outperforming going into next year. And then maybe one for Rich on the EBITDA guide. Your guidance for adjusted EBITDA to be up $20 million year-over-year for next year, even with $150 million in cost efficiencies. Just curious why more of that isn't flowing down to the bottom line. Could you perhaps help us think about the margin profile of the underlying business and how we should think about the puts and takes of margin next year?

Thank you. At the end of the day, we feel optimistic about next year as it seems to be a continuation of this year's recovery. There’s been a wait-and-see approach regarding the election results, but overall, people perceive these outcomes positively for business, a sentiment echoed from various levels of the community. This builds a favorable backdrop for what’s happening. From our perspective, the focus starts with consumers using our products. We currently have more listeners on our broadcast radio than we did a decade ago, and there is a growing recognition of the importance of reach. The marketing equation hinges on the number of people who hear a message multiplied by the response rate to determine the outcome. While response rates have received a lot of focus, reach has been somewhat overlooked. Given our size and unique position, this is advantageous for us. Additionally, ad technology is enhancing our capabilities by enabling us to convert our broadcast radio inventory into digital sales, and we are expanding that effort. We’ve discussed technology's role in cost savings, but it’s also critical for our ad tech strategy, which we anticipate will progress significantly next year.

And Steve, addressing your second point regarding the bottom line, I want to clarify a few things. We mentioned that we will reduce our overall cost base by $150 million in 2025 compared to 2024. Additionally, next year is a non-political year, and we expect our political revenue to be slightly higher than our previous peak of about $170 million. Given this context, we are projecting our EBITDA to be $770 million. Many might find it surprising that we are forecasting an increase after a presidential election cycle. As Bob mentioned earlier, we initiated cost programs and are benefiting from technology while continuing to grow revenue. Logically, one might think more profit would be reflected in the bottom line, but Bob also pointed out a slowdown in some advertising as we approached the election due to uncertainty, a trend seen by many companies. We are hopeful that advertising will rebound soon, as Bob suggested regarding consumer sentiment. However, we want to approach next year's numbers with a cautious mindset.

And if I could just add something too, I think there's a misperception when looking at our company that our fixed costs are static and can only go up. The truth is a company like iHeart will benefit enormously from technology. I think this cost-cutting and restructuring of the company and how we do business is an example of that. We expect it to continue; technology will continue to fundamentally alter the cost structure of our company. If you think about that, it allows us to bring down costs and improve margins. Coupling that with our high-growth digital business and what we've said before we believe to be in the long-term the low-growth, but still growth, Multiplatform business, you get some understanding about why we're so excited about our future and the role technology will play in delivering that for us.

It was interesting that you mentioned having more broadcast listeners than a decade ago. Additionally, Radio Ink published some articles regarding the consolidation changes you are making to save costs. In the past, you emphasized that radio serves as companionship. I am curious how the cuts in management might interact with AI advancements. However, regarding on-air talent, I wonder if reducing headcount might undermine the quality offered to listeners and if this poses a potential risk for you. How do you plan to manage this while striving to maintain profitability in the broadcast sector?

Sure. Look, I think that article got it completely wrong. I think what we're doing is not getting rid of air talent. What we're able to do now because we've got technology is we can take talent we have at any location and put them on the air in another location. This allows us to substantially upgrade the quality of our talent in every single market we're in and allows us to project talent into the situations in which they're going to have the best impact. You're 100% right; it's all about companionship. The great talent are great talent because people all want to be their friends. When you look at Ryan Seacrest, he's America's favorite friend. Everybody wants to be his friend. Or Charlamagne tha God or Bobby Bones or Steve Harvey, et cetera. We are increasing our relationship with the consumer, and we're using technology to do it. Now, unfortunately, what that means is that there isn't a slot for everybody. Just because somebody is willing to live in the market doesn't assure them that they're the best person for that slot. Before we had this kind of technology, that was the criteria. You had to be willing to live in Hattiesburg, Mississippi, or Jackson, Mississippi, to be on the radio. Today, technology frees us of that constraint, allowing our programmers to decide who the best talent is for the time slot on that radio station, regardless of where they live. In the old days, it cost an enormous amount of money to broadcast from another town; it's not an issue today. So I think the moves we're making are breaking down silos, speeding up processes, streamlining legacy systems. We believe this will enable our folks to create more, better, and faster. We should be easier to do business with, easier to get our business done, and accelerate not only the listenership but the revenue growth that comes from that as well.

A couple of others that might be somewhat related. You outlined your mix between Multiplatform, Digital Audio sales, and AMS. In 2020, it was 81% Multiplatform, 12% Digital Audio; now it's 62% Multiplatform, 31% Digital Audio. What would that look like in a few years? Do those lines start to cross? Also, you outlined podcast versus radio in terms of the complementary nature of in-home versus out-of-home. I'm wondering, is there an ability to cross-sell these opportunities, where you can address the people who are interested in in-home in both ways at the same time versus the out-of-home? How do you approach that?

Let me start with your second question: yes, absolutely. The question is, how did we get to be so big in podcasting? We're bigger than the second- and third-largest publishers combined. Why? We use radio to promote the podcast, but often the podcasts are actually radio-on-demand. If you believe Netflix is sort of TV-on-demand, then podcasting is radio-on-demand. Many of the big podcasts are actually radio shows. The Breakfast Club, one of our biggest podcasts, is also a radio show. So yes, the idea of combining the two in terms of appealing to the audience and also combining the two in terms of reach for advertisers, is that if an advertiser says, 'I love this podcast, but I need more reach from it,' we go, 'Great. We've got that audience on broadcast radio.' Now that you know this is it, we can push that out for you as well. So it works on both the consumer level and also on the advertising level. It's really at the heart of our secret sauce about why we've been able to build the podcasts so big. Having those big podcasts also reflects well on the radio shows, which I think strengthens their appeal as well.

The only thing, and I'll come to your first question, I might add, just as a reminder, we have a strategy in the way we operate the company that any of our almost 1,000 advertising salespeople can sell anywhere, anytime, any place in the country, whether you're a national salesperson or a local salesperson. When we talk about our audio tech stack and everything we've built out in terms of technology, that supports that strategy. This is not theoretical. We've been doing this for a number of years. If you look at the growth rate, again, we did put out projections for a number of years. We are projecting out Multiplatform, as we've stated previously, to be, as Bob mentioned earlier, low single-digit revenue growth. Great financial characteristics, tremendous conversion into free cash flow, low CapEx, and favorable working capital. For Digital, we expect the overall Digital Audio Group, which includes podcasting, to be in mid- to upper single-digit revenue growth going forward.

Any other questions out there? I want to ensure that everyone has the opportunity to ask.

So I'm curious, just with regard to the Transaction Support Agreement, how much cash are you allocating to debt reduction? It looks like it's kind of well below your cash balances as they sit today and your expectation for free cash flow of $200 million next year as well. And so can you talk a little bit about, as you think about the leverage and the deleveraging that you'll undertake, how much of that will be attributable to actual gross debt reduction? And to the extent that you have excess cash sitting on the balance sheet, what's your expectation on how you're going to utilize that cash?

Thank you for the question. To revisit what we have publicly stated regarding the Transaction Support Agreement and our arrangement with approximately 80% of our current term loan and note holders, we're pleased to share that we will extend our maturities to 2029 and 2030. One of the most frequent inquiries we've received over the past year is whether we can maintain our cash interest expense at a stable level going forward, and we have largely achieved that while also realizing some debt discounts. We haven’t provided further details at this time. Currently, our net leverage stands at about 7.2 times, and we anticipate reducing it to around 6 times. As a reminder, this figure represents EBITDA to net debt. By the end of 2025, we expect to be at approximately 5.5 times, and based on our filings this morning, we aim to improve to about 3.2 times by the end of 2028. We are very satisfied with the progress we are making. Well, then we want to thank everybody, Bob, myself, and the rest of the management team, for listening to the iHeart story. We are, as always, available for questions once we get off this call. But thank you all for taking the time.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.