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FRESH START ACCOUNTING (Tables) | 9 Months Ended
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Sep. 30, 2019
Reorganizations [Abstract] |
Fresh-Start Adjustments | The following table reconciles the enterprise value per the Plan of Reorganization to the implied value (for fresh start accounting purposes) of the Successor Company's common stock as of the Effective Date:
(In thousands, except per share data) |
Enterprise Value | $ | 8,750,000 |
Plus: |
Cash and cash equivalents | 63,142 |
Less: |
Debt issued upon emergence | (5,748,178 | )
Finance leases and short-term notes | (61,939 | )
Mandatorily Redeemable Preferred Stock | (60,000 | )
Changes in deferred tax liabilities(1) | (163,910 | )
Noncontrolling interest | (8,943 | )
Implied value of Successor Company common stock | $ | 2,770,172 |
Shares issued upon emergence (2) | 145,263 |
Per share value | $ | 19.07 |
(1) Difference in the assumed effect of deferred taxes in the calculation of enterprise value versus the actual effect of deferred taxes as of May 1. (2) Includes the Class A Common Stock, Class B Common Stock and Special Warrants issued at emergence. The reconciliation of the Company’s enterprise value to reorganization value as of the Effective Date is as follows:
(In thousands) |
Enterprise Value | $ | 8,750,000 |
Plus: |
Cash and cash equivalents | 63,142 |
Current liabilities (excluding Current portion of long-term debt) | 426,944 |
Deferred tax liability | 596,850 |
Other long-term liabilities | 54,393 |
Noncurrent operating lease obligations | 818,879 |
Reorganization value | $ | 10,710,208 |
The table below reflects the sources and uses of cash on the Effective Date from implementation of the Plan:
(In thousands) |  |
Cash at May 1, 2019 (excluding discontinued operations) | $ | 175,811 |  |
Sources: |  |
Proceeds from issuance of Mandatorily Redeemable Preferred Stock | $ | 60,000 |  |
Release of restricted cash from other assets into cash | 3,428 |  |
Total sources of cash | $ | 63,428 |  |
Uses: |  |
Payment of Mandatorily Redeemable Preferred Stock issuance costs | $ | (1,513 | ) |
Payment of New Term Loan Facility to settle certain creditor claims | (1,822 | ) |
Payments for Emergence debt issuance costs | (7,213 | ) |
Funding of the Guarantor General Unsecured Recovery Cash Pool | (17,500 | ) |
Payments for fully secured claims and general unsecured claims | (1,990 | ) |
Payment of contract cure amounts | (15,763 | ) |
Payment of consenting stakeholder fees | (4,000 | ) |
Payment of professional fees | (85,091 | ) | (a)
Funding of Professional Fees Escrow Account | (41,205 | ) | (a)
Total uses of cash | $ | (176,097 | ) |
Net uses of cash | $ | (112,669 | ) |
Cash upon emergence | $ | 63,142 |  |
(a) Approximately $30.5 million of professional fees paid at emergence were accrued as of May 1, 2019. These payments also reflect both the payment of success fees for $86.1 million and other professionals paid directly at emergence.
(2) | Pursuant to the terms of the Plan of Reorganization, on the Effective Date, the Company funded the Guarantor General Unsecured Recovery Cash Pool account in the amount of $17.5 million, which was reclassified as restricted cash within Other current assets. The Company made payments of $6.0 million through the Cash Pool at the time of emergence. Additionally, $3.4 million of restricted cash previously held to pay critical utility vendors was reclassified to cash.
(3) | Reflects the write-off of prepaid expenses related to the $2.3 million of prepaid premium for Predecessor Company's director and officer insurance policy, offset by the accrual of future reimbursements of $1.9 million for negotiated discounts related to the professional fee escrow account.
(4) Reflects the reinstatement of $3.1 million of accounts payable included within Liabilities subject to compromise to be satisfied in the ordinary course of business.
(5) | Reflects the reduction of accrued expenses related to the $21.2 million of professional fees paid directly, $9.3 million of professional fees paid through the Professional Fee Escrow Account and other accrued expense items. Additionally, the Company reinstated accrued expenses included within Liabilities subject to compromise to be satisfied in the ordinary course of business.
(In thousands) |
Reinstatement of accrued expenses | $ | 551 |
Payment of professional fees | (21,177 | )
Payment of professional fees through the escrow account | (9,260 | )
Impact on other accrued expenses | (2,364 | )
Net impact on Accrued expenses | $ | (32,250 | )
(6) | Reflects the write-off of the DIP facility accrued interest associated with the DIP facility fees paid at emergence.
(7) | As part of the Plan of Reorganization, the Bankruptcy Court approved the settlement of claims reported within Liabilities subject to compromise in the Company's Consolidated balance sheet at their respective allowed claim amounts.
The table below indicates the disposition of Liabilities subject to compromise:
(In thousands) |  |
Liabilities subject to compromise pre-emergence | $ | 16,770,266 |  |
To be reinstated on the Effective Date: |  |
Deferred taxes | $ | (596,850 | ) |
Accrued expenses | (551 | ) |
Accounts payable | (3,061 | ) |
Finance leases and other debt | (16,867 | ) | (a)
Current operating lease liabilities | (31,845 | ) |
Noncurrent operating lease liabilities | (398,154 | ) |
Other long-term liabilities | (14,518 | ) | (b)
Total liabilities reinstated | $ | (1,061,846 | ) |
Less amounts settled per the Plan of Reorganization |  |
Issuance of new debt | $ | (5,750,000 | ) |
Payments to cure contracts | (15,763 | ) |
Payments for settlement of general unsecured claims from escrow account | (5,822 | ) |
Payments for fully secured and other claim classes at emergence | (1,990 | ) |
Equity issued at emergence to creditors in settlement of Liabilities subject to Compromise | (2,742,471 | ) |
Total amounts settled | (8,516,046 | ) |
Gain on settlement of Liabilities Subject to Compromise | $ | 7,192,374 |  |
(a) Includes finance lease liabilities and other debt of $6.6 million and $10.3 million classified as current and long-term debt, respectively. (b) Reinstatement of Other long-term liabilities were as follows:
(In thousands) |
Reinstatement of long-term asset retirement obligations | $ | 3,527 |
Reinstatement of non-qualified deferred compensation plan | 10,991 |
Total reinstated Other long-term liabilities | $ | 14,518 |
(8) | The exit financing consists of the Term Loan Facility of approximately $3.5 billion and 6.375% Senior Secured Notes totaling $800 million, both maturing seven years from the date of issuance, the Senior Unsecured Notes totaling $1.45 billion, maturing eight years from the date of issuance, and a $450 million ABL Facility with no amount drawn at emergence, which matures on June 14, 2023.
Upon emergence, the Company paid cash of $1.8 million to settle certain creditor claims for which claims were designated to receive term loans pursuant to the Plan of Reorganization. The remaining $10.3 million is related to the reinstatement of the Long-term portion of finance leases and other debt as described above.
(In thousands) | Term |  | Interest Rate |  | Amount
Term Loan Facility | 7 years |  | Libor + 4.00% |  | $ | 3,500,000 |
6.375% Senior Secured Notes | 7 years |  | 6.375% |  | 800,000 |
Senior Unsecured Notes | 8 years |  | 8.375% |  | 1,450,000 |
Asset-based Revolving Credit Facility | 4 years |  | Varies(a) |  | — |
Total Long-Term Debt - Exit Financing |  |  |  |  | $ | 5,750,000 |
Less: |  |  |  |  |
Payment of Term Loan Facility to settle certain creditor claims |  |  |  |  | (1,822 | )
Net proceeds from exit financing at emergence |  |  |  |  | $ | 5,748,178 |
Long-term portion of finance leases and other debt reinstated |  |  |  |  | 10,338 |
Net impact on Long-term debt |  |  |  |  | $ | 5,758,516 |
(a) | Borrowings under the ABL Facility bear interest at a rate per annum equal to the applicable rate plus, at iHeartCommunications’ option, either (x) a eurocurrency rate or (y) a base rate. The applicable margin for borrowings under the ABL Facility range from 1.25% to 1.75% for eurocurrency borrowings and from 0.25% to 0.75% for base-rate borrowings, in each case, depending on average excess availability under the ABL Facility based on the most recently ended fiscal quarter.
(9) | Reflects the issuance by iHeart Operations of $60.0 million in aggregate liquidation preference of its Series A Perpetual Preferred Stock, par value $0.001 per share. On May 1, 2029, the shares of the Preferred Stock will be subject to mandatory redemption for $60.0 million in cash, plus any accrued and unpaid dividends, unless waived by the holders of the Preferred Stock.
(10) Reflects the reinstatement of deferred tax liabilities included within Liabilities subject to compromise of $596.9 million, offset by an adjustment to net deferred tax liabilities of $21.5 million. Upon emergence from the Chapter 11 Cases, iHeartMedia’s federal and state net operating loss carryforwards were reduced in accordance with Section 108 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), due to cancellation of debt income, which is excluded from U.S. federal taxable income. The estimated remaining deferred tax assets attributed to federal and state net operating loss carryforwards upon emergence totaled $114.9 million. The adjustments reflect a reduction in deferred tax assets for federal and state net operating loss carryforwards as described above, a reduction in deferred tax liabilities attributed to long-term debt as a result of the restructuring of our indebtedness upon emergence and a reduction in valuation allowance. (11) Reflects the reinstatement of Other long-term liabilities from Liabilities subject to compromise, offset by the reduction of liabilities for unrecognized tax benefits classified as Other long-term liabilities that were discharged and effectively settled upon emergence.
(In thousands) |
Reinstatement of long-term asset retirement obligations | $ | 3,527 |
Reinstatement of non-qualified pension plan | 10,991 |
Reduction of liabilities for unrecognized tax benefits | (79,042 | )
Net impact to Other long-term liabilities | $ | (64,524 | )
(12) Pursuant to the terms of the Plan of Reorganization, as of the Effective Date, all Predecessor common stock and stock-based compensation awards were canceled without any distribution. As a result of the cancellation, the Company recognized $1.5 million in compensation expense related to the unrecognized portion of share-based compensation as of the Effective Date. (13) Reflects the issuance of Successor Company equity, including the issuance of 56,861,941 shares of iHeartMedia Class A common stock, 6,947,567 shares of Class B common stock and special warrants to purchase 81,453,648 shares of Class A common stock or Class B common stock in exchange for claims against or interests in iHeartMedia pursuant to the Plan of Reorganization.
(In thousands) |
Equity issued to Class 9 Claimholders (prior equity holders) | $ | 27,701 |
Equity issued to creditors in settlement of Liabilities subject to compromise | 2,742,471 |
Total equity issued at emergence | $ | 2,770,172 |
(14) The table reflects the cumulative impact of the reorganization adjustments discussed above:
(In thousands) |  |
Gain on settlement of Liabilities subject to compromise | $ | 7,192,374 |  |
Payment of professional fees upon emergence | (11,509 | ) |
Payment of success fees upon emergence | (86,065 | ) |
Cancellation of unvested stock-based compensation awards | (1,530 | ) |
Cancellation of Predecessor prepaid director and officer insurance policy | (2,331 | ) |
Write-off of debt issuance and Mandatorily Redeemable Preferred Stock costs incurred at emergence | (8,726 | ) |
Total Reorganization items, net | $ | 7,082,213 |  |
Income tax benefit | $ | 102,914 |  |
Cancellation of Predecessor Equity | 2,074,190 |  | (a)
Issuance of Successor Equity to prior equity holders | (27,701 | ) |
Net Impact on Accumulated deficit | $ | 9,231,616 |  |
(a) This value is reflective of Predecessor common stock, Additional paid in capital and the recognition of $1.5 million in compensation expense related to the unrecognized portion of share-based compensation, less Treasury stock. The adjustments set forth in the following consolidated balance sheet as of May 1, 2019 reflect the effect of the Separation (reflected in the column "Separation of CCOH Adjustments"), the consummation of the transactions contemplated by the Plan of Reorganization that are incremental to the Separation (reflected in the column "Reorganization Adjustments") and the fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs.
(In thousands) |  |  | Separation of CCOH Adjustments |  | Reorganization Adjustments |  | Fresh Start Adjustments |  |
| Predecessor |  | (A) |  | (B) |  | (C) |  | Successor
CURRENT ASSETS |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 175,811 |  |  | $ | — |  |  | $ | (112,669 | ) | (1) | $ | — |  |  | $ | 63,142 |
Accounts receivable, net | 748,326 |  |  | — |  |  | — |  |  | (10,810 | ) | (1) | 737,516 |
Prepaid expenses | 127,098 |  |  | — |  |  | — |  |  | (24,642 | ) | (2) | 102,456 |
Other current assets | 22,708 |  |  | — |  |  | 8,125 |  | (2) | (1,668 | ) | (3) | 29,165 |
Current assets of discontinued operations | 1,000,753 |  |  | (1,000,753 | ) | (1) | — |  |  | — |  |  | — |
Total Current Assets | 2,074,696 |  |  | (1,000,753 | ) |  | (104,544 | ) |  | (37,120 | ) |  | 932,279 |
PROPERTY, PLANT AND EQUIPMENT |  |  |  |  |  |  |  |  |
Property, plant and equipment, net | 499,001 |  |  | — |  |  | — |  |  | 333,991 |  | (4) | 832,992 |
INTANGIBLE ASSETS AND GOODWILL |  |  |  |  |  |  |  |  |
Indefinite-lived intangibles - licenses | 2,326,626 |  |  | — |  |  | — |  |  | (44,906 | ) | (5) | 2,281,720 |
Other intangibles, net | 104,516 |  |  | — |  |  | — |  |  | 2,240,890 |  | (5) | 2,345,406 |
Goodwill | 3,415,492 |  |  | — |  |  | — |  |  | (92,127 | ) | (5) | 3,323,365 |
OTHER ASSETS |  |  |  |  |  |  |  |  |
Operating lease right-of-use assets | 355,826 |  |  | — |  |  | — |  |  | 554,278 |  | (6) | 910,104 |
Other assets | 139,409 |  |  | — |  |  | (384 | ) | (3) | (54,683 | ) | (2) | 84,342 |
Long-term assets of discontinued operations | 5,351,513 |  |  | (5,351,513 | ) | (1) | — |  |  | — |  |  | — |
Total Assets | $ | 14,267,079 |  |  | $ | (6,352,266 | ) |  | $ | (104,928 | ) |  | $ | 2,900,323 |  |  | $ | 10,710,208 |
CURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |
Accounts payable | $ | 41,847 |  |  | $ | — |  |  | $ | 3,061 |  | (4) | $ | — |  |  | $ | 44,908 |
Current operating lease liabilities | 470 |  |  | — |  |  | 31,845 |  | (7) | 39,092 |  | (6) | 71,407 |
Accrued expenses | 208,885 |  |  | — |  |  | (32,250 | ) | (5) | 2,328 |  | (9) | 178,963 |
Accrued interest | 462 |  |  | — |  |  | (462 | ) | (6) | — |  |  | — |
Deferred revenue | 128,452 |  |  | — |  |  | — |  |  | 3,214 |  | (7) | 131,666 |
Current portion of long-term debt | 46,618 |  |  | — |  |  | 6,529 |  | (7) | 40 |  | (6) | 53,187 |
Current liabilities of discontinued operations | 999,778 |  |  | (999,778 | ) | (1) | — |  |  | — |  |  | — |
Total Current Liabilities | 1,426,512 |  |  | (999,778 | ) |  | 8,723 |  |  | 44,674 |  |  | 480,131 |
Long-term debt | — |  |  | — |  |  | 5,758,516 |  | (8) | (1,586 | ) | (8) | 5,756,930 |
Series A Mandatorily Redeemable Preferred Stock | — |  |  | — |  |  | 60,000 |  | (9) | — |  |  | 60,000 |
Noncurrent operating lease liabilities | 828 |  |  | — |  |  | 398,154 |  | (7) | 419,897 |  | (6) | 818,879 |
Deferred income taxes | — |  |  | — |  |  | 575,341 |  | (10) | 185,419 |  | (10) | 760,760 |
Other long-term liabilities | 121,081 |  |  | — |  |  | (64,524 | ) | (11) | (2,164 | ) | (7) | 54,393 |
Liabilities subject to compromise | 16,770,266 |  |  | — |  |  | (16,770,266 | ) | (7) | — |  |  | — |
Long-term liabilities of discontinued operations | 7,472,633 |  |  | (7,472,633 | ) | (1) | — |  |  | — |  |  | — |
Commitments and contingent liabilities (Note 9) |  |  |  |  |  |  |  |  |  |
STOCKHOLDERS’ EQUITY (DEFICIT) |  |  |  |  |  |  |  |  |
Noncontrolling interest | 13,584 |  |  | (13,199 | ) | (1) | — |  |  | 8,558 |  | (11) | 8,943 |
Predecessor common stock | 92 |  |  | — |  |  | (92 | ) | (12) | — |  |  | — |
Successor Class A Common Stock | — |  |  | — |  |  | 57 |  | (13) | — |  |  | 57 |
Successor Class B Common Stock | — |  |  | — |  |  | 7 |  | (13) | — |  |  | 7 |
Predecessor additional paid-in capital | 2,075,130 |  |  | — |  |  | (2,075,130 | ) | (12) | — |  |  | — |
Successor additional paid-in capital | — |  |  |  |  | 2,770,108 |  | (13) | — |  |  | 2,770,108 |
Accumulated deficit | (13,288,497 | ) |  | 1,825,531 |  | (1) | 9,231,616 |  | (14) | 2,231,350 |  | (12) | — |
Accumulated other comprehensive loss | (321,988 | ) |  | 307,813 |  | (1) | — |  |  | 14,175 |  | (12) | — |
Cost of share held in treasury | (2,562 | ) |  | — |  |  | 2,562 |  | (12) | — |  |  | — |
Total Stockholders' Equity (Deficit) | (11,524,241 | ) |  | 2,120,145 |  |  | 9,929,128 |  |  | 2,254,083 |  |  | 2,779,115 |
Total Liabilities and Stockholders' Equity (Deficit) | $ | 14,267,079 |  |  | $ | (6,352,266 | ) |  | $ | (104,928 | ) |  | $ | 2,900,323 |  |  | $ | 10,710,208 |
The following table sets forth estimated fair values of the components of these intangible assets and their estimated useful lives:
(In thousands) | Estimated Fair Value |  | Estimated Useful Life
FCC licenses | $ | 2,281,720 |  | (a) | Indefinite
Customer / advertiser relationships | 1,643,670 |  | (b) | 5 - 15 years
Talent contracts | 373,000 |  | (b) | 2 - 10 years
Trademarks and tradenames | 321,928 |  | (b) | 7 - 15 years
Other | 6,808 |  | (c) |
Total intangible assets upon emergence | 4,627,126 |  |  |
Elimination of historical acquired intangible assets | $ | (2,431,142 | ) |  |
Fresh start adjustment to acquired intangible assets | 2,195,984 |  |  |
(a) FCC licenses. The fair value of the indefinite-lived FCC licenses was determined primarily using the direct valuation method of the Income Approach and, for smaller markets a combination of the Income approach and the Market Approach. The Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its FCC licenses. Under the direct valuation method, the fair value of the FCC licenses was calculated at the market level as prescribed by ASC 350. The application of the direct valuation method attempts to isolate the income that is properly attributable to the FCC licenses alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical “greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process. Under the direct valuation method, it is assumed that rather than acquiring FCC licenses as part of a going concern business, the buyer hypothetically obtains FCC licenses and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the FCC licenses. In applying the direct valuation method to the Company’s FCC licenses, the licenses are grouped by type (e.g. FM licenses vs. AM licenses) and market size in order to ensure appropriate assumptions are used in valuing the various FCC licenses based on population and demographics that influence the level of revenues generated by each FCC license, using industry projections. The key assumptions used in applying the direct valuation method include market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate (“WACC”) and terminal values. The WACC was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages based on a market participant capital structure. For licenses valued using the Market Transaction Method, the Company used publicly available data, which included sales of comparable radio stations and FCC auction data involving radio broadcast licenses to estimate the fair value of FCC licenses. Similar to the application of the Income approach for the FCC licenses, the Company grouped licenses by type and market size for comparison to historical market transactions. The historical book value of the FCC licenses as of May 1, 2019 was subtracted from the fair value of the FCC licenses to determine the adjustment to decrease the value of Indefinite-lived intangible assets-licenses by $44.9 million. (b) Other intangible assets. Definite-lived intangible assets include customer/advertiser relationships, talent contracts for on-air personalities, trademarks and tradenames and other intangible assets. The Company engaged a third-party valuation firm to assist in developing the assumptions and determining the fair values of each of these assets. For purposes of estimating the fair values of customer/advertiser relationships and talent contracts, the Company primarily utilized the Income Approach (specifically, the multi-period excess earnings method, or MPEEM) to estimate fair value based on the present value of the incremental after-tax cash flows attributable only to the subject intangible assets after deducting contributory asset charges. The cash flows attributable to each grouping of customer/advertiser relationships were adjusted for the appropriate contributory asset charges (e.g., FCC licenses, working capital, tradenames, technology, workforce, etc.). The discount rate utilized to present-value the after-tax cash flows was selected based on consideration of the overall business risks and the risks associated with the specific assets being valued. Additionally, for certain advertiser relationships the Company used the Cost Approach using historical financial data regarding the sales, administrative and overhead expenses related to the Company’s selling efforts associated with revenue for both existing and new advertisers. The ratio of expenses for selling efforts to revenue was applied to total revenue from new customers to determine an estimated cost per revenue dollar of revenue generated by new customers. This ratio was applied to total revenue from existing customers to estimate the replacement cost of existing customer/advertiser relationships. The historical book value of customer/advertiser relationships as of May 1, 2019 was subtracted from the fair value of the customer/advertiser relationships determined as described above to determine the adjustment to increase the value of the customer/advertiser relationship intangible assets by $1,604.1 million. For purposes of estimating the fair value of trademarks and tradenames, the Company primarily used the Royalty Savings Method, a variation of the Income approach. Estimated royalty rates were determined for each of the trademarks and tradenames considering the relative contribution to the Company’s overall profitability as well as available public information regarding market royalty rates for similar assets. The selected royalty rates were applied to the revenue generated by the trademarks and tradenames to determine the amount of royalty payments saved as a result of owning these assets. The forecasted cash flows expected to be generated as a result of the royalty savings were discounted to present value utilizing a discount rate considering overall business risks and risks associated with the asset being valued. The historical book values of talent contracts, trademarks and tradenames and other intangible assets as of May 1, 2019 were subtracted from the fair values determined as described above to determine the adjustments as follows:
(In millions) |  |
Customer/advertiser relationships | $ | 1,604.1 |  | increase in value
Talent contracts | 361.6 |  | increase in value
Trademarks and tradenames | 274.4 |  | increase in value
Other | 0.8 |  | increase in value
Total fair value adjustment | $ | 2,240.9 |  | increase in value
(c) Included within other intangible assets are permanent easements, which have an indefinite useful life. All other intangible assets are amortized over the respective lives of the agreements, or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The following table sets forth the adjustments to goodwill:
(In thousands) |
Reorganization value | $ | 10,710,208 |
Less: Fair value of assets (excluding goodwill) | (7,386,843 | )
Total goodwill upon emergence | 3,323,365 |
Elimination of historical goodwill | (3,415,492 | )
Fresh start adjustment to goodwill | $ | (92,127 | )
The table below reflects the cumulative impact of the fresh start adjustments as discussed above:
(In thousands) |
Fresh start adjustment to Accounts receivable, net | $ | (10,810 | )
Fresh start adjustment to Other current assets | (1,668 | )
Fresh start adjustment to Prepaid expenses | (24,642 | )
Fresh start adjustment to Property, plant and equipment, net | 333,991 |
Fresh start adjustment to Intangible assets | 2,195,984 |
Fresh start adjustment to Goodwill | (92,127 | )
Fresh start adjustment to Operating lease right-of-use assets | 554,278 |
Fresh start adjustment to Other assets | (54,683 | )
Fresh start adjustment to Accrued expenses | (2,328 | )
Fresh start adjustment to Deferred revenue | (3,214 | )
Fresh start adjustment to Debt | 1,546 |
Fresh start adjustment to Operating lease obligations | (458,989 | )
Fresh start adjustment to Other long-term liabilities | 2,164 |
Fresh start adjustment to Noncontrolling interest | (8,558 | )
Total Fresh Start Adjustments impacting Reorganization items, net | $ | 2,430,944 |
Reset of Accumulated other comprehensive income | (14,175 | )
Income tax expense | (185,419 | )
Net impact to Accumulated deficit | $ | 2,231,350 |
The tables below present the Reorganization items incurred and cash paid for Reorganization items as a result of the Chapter 11 Cases during the periods presented:
(In thousands) | Successor Company |  |  | Predecessor Company
| Three Months Ended September 30, |  |  | Three Months Ended September 30,
| 2019 |  |  | 2018
Professional fees and other bankruptcy related costs | — |  |  |  | (52,475 | )
Reorganization items, net | $ | — |  |  |  | $ | (52,475 | )
Cash payments for Reorganization items, net | $ | 5,219 |  |  |  | $ | 46,338 |
(In thousands) | 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,
| 2019 |  |  | 2019 |  | 2018
Write-off of deferred loans costs | $ | — |  |  |  | $ | — |  |  | $ | (67,079 | )
Write-off of original issue discount | — |  |  |  | — |  |  | (131,100 | )
Debtor-in-possession refinancing costs | — |  |  |  | — |  |  | (10,546 | )
Professional fees and other bankruptcy related costs | — |  |  |  | (157,487 | ) |  | (104,545 | )
Net gain on settlement of Liabilities subject to compromise | — |  |  |  | 7,192,374 |  |  | — |
Impact of fresh start adjustments | — |  |  |  | 2,430,944 |  |  | — |
Other items, net | — |  |  |  | (4,005 | ) |  | — |
Reorganization items, net | $ | — |  |  |  | $ | 9,461,826 |  |  | $ | (313,270 | )
Cash payments for Reorganization items, net | $ | 18,268 |  |  |  | $ | 183,291 |  |  | $ | 52,213 |

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- Definition Tabular disclosure of description and amounts of adjustments to historical balance sheet to arrive at fresh-start amounts following bankruptcy and reorganization with a different owner. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 50 -Paragraph 7 -Subparagraph (a)-(b) -URI http://asc.fasb.org/extlink&oid=6918054&loc=SL2890621-112765 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 55 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766 + Details
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