REVENUE |
REVENUE Disaggregation of Revenue The following table shows revenue streams for the Successor Company for the three months ended September 30, 2019 and the period from May 2, 2019 through September 30, 2019: | | | | | | | | | | | | | | | | | Successor Company | (In thousands) | Audio | | Audio and Media Services | | Eliminations | | Consolidated | Three Months Ended September 30, 2019 | Revenue from contracts with customers: | | | | | | | | Broadcast Radio(1) | $ | 573,048 |
| | $ | — |
| | $ | — |
| | $ | 573,048 |
| Digital(2) | 96,656 |
| | — |
| | — |
| | 96,656 |
| Networks(3) | 160,133 |
| | — |
| | — |
| | 160,133 |
| Sponsorship and Events(4) | 55,541 |
| | — |
| | — |
| | 55,541 |
| Audio and Media Services(5) | — |
| | 59,873 |
| | (1,731 | ) | | 58,142 |
| Other(6) | 4,568 |
| | — |
| | (168 | ) | | 4,400 |
| Total | 889,946 |
| | 59,873 |
| | (1,899 | ) | | 947,920 |
| Revenue from leases(7) | 418 |
| | — |
| | — |
| | 418 |
| Revenue, total | $ | 890,364 |
| | $ | 59,873 |
| | $ | (1,899 | ) | | $ | 948,338 |
| | | | | | | | | Period from May 2, 2019 through September 30, 2019 | Revenue from contracts with customers: | | | | | | | | Broadcast Radio(1) | $ | 963,588 |
| | $ | — |
| | $ | — |
| | $ | 963,588 |
| Digital(2) | 160,894 |
| | — |
| | — |
| | 160,894 |
| Networks(3) | 265,559 |
| | — |
| | — |
| | 265,559 |
| Sponsorship and Events(4) | 87,331 |
| | — |
| | — |
| | 87,331 |
| Audio and Media Services(5) | — |
| | 100,410 |
| | (2,740 | ) | | 97,670 |
| Other(6) | 8,525 |
| | — |
| | (280 | ) | | 8,245 |
| Total | 1,485,897 |
| | 100,410 |
| | (3,020 | ) | | 1,583,287 |
| Revenue from leases(7) | 697 |
| | — |
| | — |
| | 697 |
| Revenue, total | $ | 1,486,594 |
| | $ | 100,410 |
| | $ | (3,020 | ) | | $ | 1,583,984 |
|
| | (1) | Broadcast Radio revenue is generated through the sale of advertising time on the Company’s domestic radio stations. |
| | (2) | Digital revenue is generated through the sale of streaming and display advertisements on digital platforms, subscriptions to iHeartRadio streaming services, podcasting and the dissemination of other digital content. |
| | (3) | Networks revenue is generated through the sale of advertising on the Company’s Premiere and Total Traffic & Weather network programs and through the syndication of network programming to other media companies. |
| | (4) | Sponsorship and events revenue is generated through local events and major nationally-recognized tent pole events and include sponsorship and other advertising revenue, ticket sales, and licensing, as well as endorsement and appearance fees generated by on-air talent. |
| | (5) | Audio and media services revenue is generated by services provided to broadcast industry participants through the Company’s Katz Media and RCS businesses. As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast and webcast software and technology and services to radio stations, television music channels, cable companies, satellite music networks and Internet stations worldwide. |
| | (6) | Other revenue represents fees earned for miscellaneous services, including on-site promotions, activations, and local marketing agreements. |
| | (7) | Revenue from leases is primarily generated by the lease of towers to other media companies, which are all categorized as operating leases. |
The following table shows revenue streams from continuing operations for the Predecessor Company. The presentation of amounts in the Predecessor periods has been revised to conform to the Successor period presentation. | | | | | | | | | | | | | | | | | Predecessor Company | (In thousands) | Audio(1) | | Audio and Media Services(1) | | Eliminations | | Consolidated | Three Months Ended September 30, 2018 | Revenue from contracts with customers: | Broadcast Radio | $ | 576,460 |
| | $ | — |
| | $ | — |
| | $ | 576,460 |
| Digital | 72,447 |
| | — |
| | — |
| | 72,447 |
| Networks | 146,587 |
| | — |
| | — |
| | 146,587 |
| Sponsorship and Events | 53,191 |
| | — |
| | — |
| | 53,191 |
| Audio and Media Services | — |
| | 69,823 |
| | (1,611 | ) | | 68,212 |
| Other | 2,957 |
| | — |
| | — |
| | 2,957 |
| Total | 851,642 |
| | 69,823 |
| | (1,611 | ) | | 919,854 |
| Revenue from leases | 638 |
| | — |
| | — |
| | 638 |
| Revenue, total | $ | 852,280 |
| | $ | 69,823 |
| | $ | (1,611 | ) | | $ | 920,492 |
| | | | | | | | | Period from January 1, 2019 through May 1, 2019 | Revenue from contracts with customers: | | | | | | | | Broadcast Radio | $ | 657,864 |
| | $ | — |
| | $ | — |
| | $ | 657,864 |
| Digital | 102,789 |
| | — |
| | — |
| | 102,789 |
| Networks | 189,088 |
| | — |
| | — |
| | 189,088 |
| Sponsorship and Events | 50,330 |
| | — |
| | — |
| | 50,330 |
| Audio and Media Services | — |
| | 69,362 |
| | (2,325 | ) | | 67,037 |
| Other | 5,910 |
| | — |
| | (243 | ) | | 5,667 |
| Total | 1,005,981 |
| | 69,362 |
| | (2,568 | ) | | 1,072,775 |
| Revenue from leases | 696 |
| | — |
| | — |
| | 696 |
| Revenue, total | $ | 1,006,677 |
| | $ | 69,362 |
| | $ | (2,568 | ) | | $ | 1,073,471 |
| | | | | | | | | Nine Months Ended September 30, 2018 | Revenue from contracts with customers: | Broadcast Radio | $ | 1,635,571 |
| | $ | — |
| | $ | — |
| | $ | 1,635,571 |
| Digital | 200,388 |
| | — |
| | — |
| | 200,388 |
| Networks | 425,619 |
| | — |
| | — |
| | 425,619 |
| Sponsorship and Events | 132,339 |
| | — |
| | — |
| | 132,339 |
| Audio and Media Services | — |
| | 180,582 |
| | (4,884 | ) | | 175,698 |
| Other | 13,253 |
| | — |
| | — |
| | 13,253 |
| Total | 2,407,170 |
| | 180,582 |
| | (4,884 | ) | | 2,582,868 |
| Revenue from leases | 2,160 |
| | — |
| | — |
| | 2,160 |
| Revenue, total | $ | 2,409,330 |
| | $ | 180,582 |
| | $ | (4,884 | ) | | $ | 2,585,028 |
|
| | (1) | Due to a re-evaluation of the Company’s internal segment reporting upon the effectiveness of the Plan of Reorganization, the Company’s RCS business is included in the Audio & Media Services results for all periods presented. See Note 1 for further information. |
Trade and Barter Trade and barter transactions represent the exchange of advertising spots for merchandise, services or other assets in the ordinary course of business. The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots promised to the customer. Trade and barter revenues and expenses from continuing operations, which are included in consolidated revenue and selling, general and administrative expenses, respectively, were as follows: | | | | | | | | | | | Successor Company | | | Predecessor Company | | Three Months Ended September 30, | | | Three Months Ended September 30, | (In thousands) | 2019 | | | 2018 | Trade and barter revenues | $ | 59,530 |
| | | $ | 51,831 |
| Trade and barter expenses | 40,319 |
| | | 40,607 |
|
| | | | | | | | | | | | | | | Successor Company | | | Predecessor Company | | Period from May 2, 2019 through September 30, | | | Period from January 1, 2019 through May 1, | | Nine Months Ended September 30, | (In thousands) | 2019 | | | 2019 | | 2018 | Trade and barter revenues | $ | 89,229 |
| | | $ | 65,934 |
| | $ | 141,769 |
| Trade and barter expenses | 68,342 |
| | | 58,330 |
| | 136,827 |
|
Deferred Revenue The following tables show the Company’s deferred revenue balance from contracts with customers, excluding discontinued operations: | | | | | | | | | | | Successor Company | | | Predecessor Company | | Three Months Ended September 30, | | | Three Months Ended September 30, | (In thousands) | 2019 | | | 2018 | Deferred revenue from contracts with customers: | | | | | Beginning balance(1) | $ | 159,752 |
| | | $ | 160,369 |
| Revenue recognized, included in beginning balance | (74,875 | ) | | | (73,190 | ) | Additions, net of revenue recognized during period, and other | 75,660 |
| | | 67,973 |
| Ending balance | 160,537 |
| | | $ | 155,152 |
|
| | | | | | | | | | | | | | | Successor Company | | | Predecessor Company | | Period from May 2, 2019 through September 30, | | | Period from January 1, 2019 through May 1, | | Nine Months Ended September 30, | (In thousands) | 2019 | | | 2019 | | 2018 | Deferred revenue from contracts with customers: | | | | | | | Beginning balance(1) | $ | 151,773 |
| | | $ | 148,720 |
| | $ | 155,228 |
| Revenue recognized, included in beginning balance | (87,098 | ) | | | (76,473 | ) | | (101,456 | ) | Additions, net of revenue recognized during period, and other | 95,862 |
| | | 79,228 |
| | 101,380 |
| Ending balance | $ | 160,537 |
| | | $ | 151,475 |
| | $ | 155,152 |
|
| | (1) | Deferred revenue from contracts with customers, which excludes other sources of deferred revenue that are not related to contracts with customers, is included within deferred revenue and other long-term liabilities on the Consolidated Balance Sheets, depending upon when revenue is expected to be recognized. As described in Note 3, as part of the fresh start accounting adjustments on May 1, 2019, deferred revenue from contracts with customers was adjusted to its estimated fair value. |
The Company’s contracts with customers generally have terms of one year or less; however, as of September 30, 2019, the Company expects to recognize $191.0 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with substantially all of this amount to be recognized over the next five years. Commissions related to the Company’s media representation business have been excluded from this amount as they are contingent upon future sales. Revenue from Leases As of September 30, 2019, the future lease payments to be received by the Successor Company are as follows: | | | | | (In thousands) | 2019 | $ | 381 |
| 2020 | 1,317 |
| 2021 | 1,139 |
| 2022 | 833 |
| 2023 | 776 |
| Thereafter | 10,693 |
| Total | $ | 15,139 |
|
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