LIABILITIES SUBJECT TO COMPROMISE

12 Months Ended

Dec. 31, 2018

As discussed in Note 1, "Basis of Presentation", since the Petition Date, the Company has been operating as debtor in possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. On the accompanying Consolidated Balance Sheets, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. Liabilities subject to compromise at December 31, 2018 consisted of the following:



(In thousands)	December 31, 2018
Accounts payable	$	32,807
Accrued expenses	23,277
Deferred taxes	644,926
Other long-term liabilities	87,096
Accounts payable, accrued and other liabilities	788,106
Debt subject to compromise	15,149,477
Accrued interest on debt subject to compromise	542,673
Long-term debt and accrued interest	15,692,150
Total liabilities subject to compromise	$	16,480,256

Determination of the value at which liabilities will ultimately be settled cannot be made until the Bankruptcy Court approves the Plan of Reorganization and it becomes effective. The Company will continue to evaluate the amount and classification of its pre-petition liabilities. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of liabilities subject to compromise may change.

REORGANIZATION ITEMS, NET

Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the year ended December 31, 2018 and were as follows:



(In thousands)	Year Ended December 31, 2018
Write-off of deferred long-term debt fees	$	67,079
Write-off of original issue discount on debt subject to compromise	131,100
Debtor-in-possession refinancing costs	10,546
Loss on Liabilities subject to compromise settlement	275
Professional fees and other bankruptcy related costs	147,119
Reorganization items, net	$	356,119

Professional fees included in Reorganization items, net represent fees for post-petition expenses related to the Chapter 11 Cases.

As of December 31, 2018, $47.5 million of Reorganization items, net were unpaid and accrued in Accounts Payable and Accrued Expenses in the accompanying Consolidated Balance Sheet. Reorganization items, net of $6.7 million relating to the Debtor-in-possession financing costs were netted against the $125.0 million proceeds received from issuance of the DIP Facility.

CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION

The financial statements below represent the condensed combined financial statements of the Debtors. The results of the Company’s Non-Filing Entities, which are comprised primarily of the Company's Americas outdoor and International outdoor segments, are not included in these condensed combined financial statements.

Intercompany transactions among the Debtors have been eliminated in the financial statements contained herein. Intercompany transactions among the Debtors and the Non-Filing Entities have not been eliminated in the Debtors’ financial statements.

Debtors' Balance Sheet



(In thousands)	December 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$	178,924
Accounts receivable, net of allowance of $26,347	866,088
Prepaid expenses	98,836
Other current assets	24,576
Total Current Assets	1,168,424
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net	501,677
INTANGIBLE ASSETS AND GOODWILL
Indefinite-lived intangibles - licenses	2,409,411
Other intangibles, net	196,741
Goodwill	3,412,753
OTHER ASSETS
Other assets	63,203
Total Assets	$	7,752,209
CURRENT LIABILITIES
Accounts payable	$	49,129
Intercompany payable	2,894
Accrued expenses	296,149
Accrued interest	766
Deferred income	120,328
Current portion of long-term debt	46,105
Total Current Liabilities	515,371
Other long-term liabilities	229,640
Liabilities subject to compromise¹	17,511,976
EQUITY (DEFICIT)
Equity (Deficit)	(10,504,778		)
Total Liabilities and Equity (Deficit)	$	7,752,209

¹In connection with the cash management arrangements with CCOH, the Company maintains an intercompany revolving promissory note payable by the Company to CCOH (the "Intercompany Note"), which matures on May 15, 2019. Liabilities subject to compromise include the principal amount outstanding under the Intercompany Note, which totals $1,031.7 million as of December 31, 2018.

Debtors' Statements of Operations



(In thousands)	Year Ended December 31, 2018
Revenue	$	3,577,742
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)	1,056,315
Selling, general and administrative expenses (excludes depreciation and amortization)	1,356,108
Corporate expenses (excludes depreciation and amortization)	188,937
Depreciation and amortization	210,914
Impairment charges	33,151
Other operating expense, net	(9,260		)
Operating income	723,057
Interest expense, net¹	357,181
Equity in loss of nonconsolidated affiliates	(140		)
Gain on extinguishment of debt	5,667
Dividend income²	28,564
Other expense, net	(22,776		)
Reorganization items, net	356,119
Income before income taxes	21,072
Income tax expense	(13,056		)
Net income	$	8,016

¹Includes interest incurred during the year ended December 31, 2018 in relation to the pre-petition and post-petition Intercompany Notes.

²Consists of cash dividends received from Non-Debtor entities during the year ended December 31, 2018.

Debtors' Statement of Cash Flows



(In thousands)	Year Ended December 31, 2018

Cash flows from operating activities:
Consolidated net income	$	8,016
Reconciling items:
Impairment charges	33,151
Depreciation and amortization	210,914
Deferred taxes	3,643
Provision for doubtful accounts	21,003
Amortization of deferred financing charges and note discounts, net	11,871
Non-cash Reorganization items, net	252,392
Share-based compensation	2,066
Loss on disposal of operating and other assets	3,224
Equity in loss of nonconsolidated affiliates	140
Gain on extinguishment of debt	(5,667		)
Barter and trade income	(10,873		)
Other reconciling items, net	(273		)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Increase in accounts receivable	(35,771		)
Increase in prepaid expenses and other current assets	(2,034		)
Increase in accrued expenses	14,782
Increase in accounts payable	8,962
Increase in accrued interest	303,495
Decrease in deferred income	(14,963		)
Changes in other operating assets and liabilities	(25,483		)
Net cash provided by operating activities	778,595
Cash flows from investing activities:
Purchases of businesses	(74,272		)
Purchases of property, plant and equipment	(85,012		)
Proceeds from disposal of assets	642
Purchases of other operating assets	(305		)
Change in other, net	(132		)
Net cash used for investing activities	(159,079		)
Cash flows from financing activities:
Draws on credit facilities	143,332
Payments on credit facilities	(258,308		)
Payments on long-term debt	(358,911		)
Net transfers to related parties	(65,666		)
Change in other, net	(79		)
Net cash used for financing activities	(539,632		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—
Net increase in cash, cash equivalents and restricted cash	79,884
Cash, cash equivalents and restricted cash at beginning of period	102,468
Cash, cash equivalents and restricted cash at end of period	$	182,352