LIABILITIES SUBJECT TO COMPROMISE

9 Months Ended

Sep. 30, 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 September 30, 2018 consisted of the following:



(In thousands)	September 30, 2018
Accounts payable	$	44,132
Accrued expenses	27,509
Deferred taxes	622,415
Other long-term liabilities	89,730
Accounts payable, accrued and other liabilities	783,786
Debt subject to compromise	15,148,955
Accrued interest on debt subject to compromise	542,673
Long-term debt and accrued interest	15,691,628
Total liabilities subject to compromise	$	16,475,414

Determination of the value at which liabilities will ultimately be settled cannot be made until the Bankruptcy Court approves the Plan of Reorganization. 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 three and nine months ended September 30, 2018 and were as follows:



(In thousands)	Three Months Ended September 30, 2018		Nine Months Ended September 30, 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
Professional fees and other bankruptcy related costs	52,475		104,545
Reorganization items, net	$	52,475	$	313,270

Professional fees included in Reorganization items, net represent fees for post-petition expenses related to the Chapter 11 Cases. Write-off of deferred long-term debt fees and write-off of original issue discount are included in Reorganization items, net.

As of September 30, 2018, $56.2 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)	September 30, 2018
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	76,154
Accounts receivable, net of allowance of $24,455	809,974
Prepaid expenses	115,308
Other current assets	25,651
Total Current Assets	1,027,087
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net	462,609
INTANGIBLE ASSETS AND GOODWILL
Indefinite-lived intangibles - licenses	2,409,326
Other intangibles, net	171,134
Goodwill	3,335,433
OTHER ASSETS
Other assets	58,080
Total Assets	$	7,463,669
CURRENT LIABILITIES
Accounts payable	$	49,737
Intercompany payable	9,227
Accrued expenses	240,412
Accrued interest	592
Deferred income	130,236
Current portion of long-term debt	—
Total Current Liabilities	430,204
Long-term debt	—
Other long-term liabilities	233,769
Liabilities subject to compromise¹	17,507,135
EQUITY (DEFICIT)
Equity (Deficit)	(10,707,439		)
Total Liabilities and Equity (Deficit)	$	7,463,669

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 September 30, 2018.

Debtors' Statements of Operations



(In thousands)	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Revenue	$	909,984		$	2,558,629
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)	267,117			768,868
Selling, general and administrative expenses (excludes depreciation and amortization)	322,410			986,654
Corporate expenses (excludes depreciation and amortization)	47,431			134,293
Depreciation and amortization	43,036			174,773
Impairment charges	33,151			33,151
Other operating expense, net	(2,458		)	(6,908		)
Operating income	194,381			453,982
Interest expense, net¹	2,638			356,179
Equity in loss of nonconsolidated affiliates	(31		)	(94		)
Gain on extinguishment of debt	—			5,667
Dividend income²	269			25,756
Other expense, net	(410		)	(22,648		)
Reorganization items, net	52,475			313,270
Income (loss) before income taxes	139,096			(206,786		)
Income tax benefit (expense)	(10,681		)	10,465
Net income (loss)	$	128,415		$	(196,321	)

¹Includes interest incurred during the three months ended September 30, 2018 in relation to the post-petition Intercompany Note and interest incurred during the nine months ended September 30, 2018 in relation to the pre-petition and post-petition Intercompany Notes.

²Consists of cash dividends received from Non-Debtor entities during the three and nine months ended September 30, 2018.

Debtors' Statement of Cash Flows



(In thousands)	Nine Months Ended September 30, 2018

Cash flows from operating activities:
Consolidated net loss	$	(196,321	)
Reconciling items:
Impairment charges	33,151
Depreciation and amortization	174,773
Deferred taxes	(18,869		)
Provision for doubtful accounts	14,747
Amortization of deferred financing charges and note discounts, net	11,871
Non-cash Reorganization items, net	261,057
Share-based compensation	1,628
Loss on disposal of operating and other assets	2,738
Equity in loss of nonconsolidated affiliates	94
Gain on extinguishment of debt	(5,667		)
Barter and trade income	(6,228		)
Other reconciling items, net	(320		)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in accounts receivable	20,906
Increase in prepaid expenses and other current assets	(18,844		)
Decrease in accrued expenses	(41,848		)
Increase in accounts payable	21,954
Increase in accrued interest	302,724
Increase in deferred income	11,323
Changes in other operating assets and liabilities	(13,726		)
Net cash provided by operating activities	555,143
Cash flows from investing activities:
Purchases of property, plant and equipment	(47,309		)
Proceeds from disposal of assets	682
Purchases of other operating assets	(305		)
Change in other, net	(95		)
Net cash used for investing activities	(47,027		)
Cash flows from financing activities:
Draws on credit facilities	143,332
Payments on credit facilities	(258,308		)
Payments on long-term debt	(358,880		)
Net transfers to related parties	(57,078		)
Change in other, net	(74		)
Net cash used for financing activities	(531,008		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—
Net decrease in cash, cash equivalents and restricted cash	(22,892		)
Cash, cash equivalents and restricted cash at beginning of period	102,468
Cash, cash equivalents and restricted cash at end of period	$	79,576