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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to ___________
Commission File Number:        01-14461
Audacy, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania
23-1701044
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer identification no.)
2400 Market Street, 4th Floor
Philadelphia, Pennsylvania 19103
(Address of principal executive offices and zip code)
(610) 660-5610
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer

Accelerated filer
Emerging growth company
Non-accelerated filer

Smaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act and Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $.01 per shareAUDNew York Stock Exchange
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class A common stock, $0.01 par value – 139,473,913 Shares Outstanding as of April 30, 2022
Class B common stock, $0.01 par value – 4,045,199 Shares Outstanding as of April 30, 2022.
i

AUDACY, INC.



Private Securities Litigation Reform Act Safe Harbor Statement
In addition to historical information, this report contains statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are presented for illustrative purposes only and reflect our current expectations concerning future results and events. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, without limitation, any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.
You can identify forward-looking statements by our use of words such as “anticipates,” “believes,” “continues,” “expects,” “intends,” “likely,” “may,” “opportunity,” “plans,” “potential,” “project,” “will,” “could,” “would,” “should,” “seeks,” “estimates,” “predicts” and similar expressions which identify forward-looking statements, whether in the negative or the affirmative. We cannot guarantee that we actually will achieve these plans, intentions or expectations. These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond our control, which could cause actual results to differ materially from those forecasted or anticipated in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which reflect our view only as of the date of this report. We undertake no obligation to update these statements or publicly release the result of any revision(s) to these statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.



iii

PART I
FINANCIAL INFORMATION
ITEM 1.     Financial Statements
AUDACY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
MARCH 31, 2022DECEMBER 31,
2021
ASSETS:
Cash
$35,580 $59,439 
Restricted cash
2,458  
Accounts receivable, net of allowance of $13,889 in 2022 and $15,084 in 2021
227,860 276,044 
Prepaid expenses, deposits and other
86,720 68,146 
Total current assets
352,618 403,629 
Investments
3,005 3,005 
Net property and equipment393,895 376,028 
Operating lease right-of-use assets
218,369 229,607 
Radio broadcasting licenses
2,251,546 2,251,546 
Goodwill
82,176 82,176 
Assets held for sale
1,033 1,033 
Other assets, net of accumulated amortization70,126 74,865 
TOTAL ASSETS
$3,372,768 $3,421,889 
LIABILITIES:
Accounts payable
$28,026 $18,897 
Accrued expenses
59,011 68,423 
Other current liabilities
85,076 84,130 
Operating lease liabilities
39,762 39,598 
Long-term debt, current portion 22,727 
Total current liabilities
211,875 233,775 
Long-term debt, net of current portion1,782,544 1,782,131 
Operating lease liabilities, net of current portion
206,850 217,281 
Net deferred tax liabilities484,172 487,665 
Other long-term liabilities
43,908 48,832 
Total long-term liabilities
2,517,474 2,535,909 
Total liabilities
2,729,349 2,769,684 
CONTINGENCIES AND COMMITMENTS


SHAREHOLDERS' EQUITY:
Class A, B and C common stock
1,435 1,441 
Additional paid-in capital
1,672,063 1,671,195 
Accumulated deficit
(1,031,013)(1,020,142)
Accumulated other comprehensive income (loss)
934 (289)
Total shareholders' equity
643,419 652,205 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$3,372,768 $3,421,889 
See notes to condensed consolidated financial statements.
1

AUDACY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except share and per share data)
(unaudited)

THREE MONTHS ENDED
MARCH 31,
20222021
NET REVENUES$275,295 $240,764 
OPERATING EXPENSE:
Station operating expenses227,045 212,495 
Depreciation and amortization expense13,539 11,592 
Corporate general and administrative expenses25,911 23,580 
Restructuring charges886 185 
Impairment loss1,521 644 
Refinancing expenses 473 
Net (gain) loss on sale or disposal(2,458) 
Other expenses350 14 
Total operating expense266,794 248,983 
OPERATING INCOME (LOSS)8,501 (8,219)
NET INTEREST EXPENSE23,471 21,160 
Net (gain) loss on extinguishment of debt 8,168 
OTHER (INCOME) EXPENSE 8,168 
INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT)(14,970)(37,547)
INCOME TAX (BENEFIT) EXPENSE(3,897)(15,899)
NET INCOME (LOSS)(11,073)(21,648)
NET INCOME (LOSS) PER SHARE - BASIC$(0.08)$(0.16)
NET INCOME (LOSS) PER SHARE - DILUTED$(0.08)$(0.16)
WEIGHTED AVERAGE SHARES:
Basic138,122,432 135,379,321 
Diluted138,122,432 135,379,321 
See notes to condensed consolidated financial statements.
2

AUDACY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(amounts in thousands)
(unaudited)
THREE MONTHS ENDED
March 31,
20222021
NET INCOME (LOSS)
$(11,073)$(21,648)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES (BENEFIT):
Net unrealized gain (loss) on derivatives,
net of taxes (benefit)
1,223 553 
COMPREHENSIVE INCOME (LOSS)
$(9,850)$(21,095)
See notes to condensed consolidated financial statements.

3

AUDACY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(amounts in thousands, except share data)
(unaudited)
Common StockAdditional
Paid-in
Capital
Retained
Earnings
(Accumulated
Deficit)
Accumulated
Other
Comprehensive
Income (Loss)
Total
Class AClass B
SharesAmountSharesAmount
Balance, December 31, 2021140,060,355 $1,401 4,045,199 $40 $1,671,195 $(1,020,142)$(289)$652,205 
Net income (loss) — — — — — (11,073)— (11,073)
Compensation expense related to granting of stock awards(59,352)(1)— — 2,699 — — 2,698 
Issuance of common stock related to the Employee Stock Purchase Plan ("ESPP")61,009 1 — — 176 — — 177 
Purchase of vested employee restricted stock units(621,876)(6)— — (1,833)— — (1,839)
Payment of dividends on common stock— — — — (174)— — (174)
Dividend equivalents, net of forfeitures— — — — — 202 — 202 
Net unrealized gain (loss) on derivatives— — — — — — 1,223 1,223 
Balance, March 31, 2022139,440,136 $1,395 4,045,199 $40 $1,672,063 $(1,031,013)$934 $643,419 

4

AUDACY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(amounts in thousands, except share data)
(unaudited)
Common StockAdditional
Paid-in
Capital
Retained
Earnings
(Accumulated
Deficit)
Accumulated
Other
Comprehensive
Income (Loss)
Total
Class AClass B
SharesAmountSharesAmount
Balance, December 31, 2020136,913,375 $1,369 4,045,199 $40 $1,662,155 $(1,017,037)$(1,789)$644,738 
Net income (loss)— — — — — (21,648)— (21,648)
Compensation expense related to granting of stock awards291,347 3 — — 2,575 — — 2,578 
Exercise of stock options47,535  — — 15 — — 15 
Purchase of vested employee restricted stock units(347,607)(3)— — (1,908)— — (1,911)
Payment of dividends on common stock— — — — (386)— — (386)
Dividend equivalents, net of forfeitures— — — — — 386 — 386 
Net unrealized gain (loss) on derivatives— — — — — — 553 553 
Balance, March 31, 2021136,904,650 $1,369 4,045,199 $40 $1,662,451 $(1,038,299)$(1,236)$624,325 
See notes to condensed consolidated financial statements.
5

AUDACY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)

THREE MONTHS ENDED MARCH 31,
20222021
OPERATING ACTIVITIES:
Net income (loss)$(11,073)$(21,648)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
13,539 11,592 
Net amortization of deferred financing costs (net of original issue discount and debt premium)
1,002 193 
Net deferred taxes (benefit) and other
(4,039)(534)
Provision for bad debts
49 346 
Net (gain) loss on sale or disposal(2,458)(2)
Non-cash stock-based compensation expense
2,698 2,578 
Net loss on extinguishment of debt
 8,168 
Deferred compensation
(1,725)1,263 
Impairment loss
1,521 644 
Change in fair value of contingent consideration282  
Changes in assets and liabilities (net of effects of acquisitions, and dispositions):
Accounts receivable
48,135 66,511 
Prepaid expenses and deposits
(18,574)(21,732)
Accounts payable and accrued liabilities
(9,202)(1,018)
Other assets (324)
Accrued interest expense
(1,454)2,598 
Accrued liabilities - long-term
(3,481)(4,781)
Net cash provided by (used in) operating activities
15,220 43,854 
INVESTING ACTIVITIES:
Additions to property, equipment and software(14,522)(7,280)
Proceeds from sale of property, equipment, intangibles and other assets2,464  
Purchases of businesses and audio assets (15,297)
Net cash provided by (used in) investing activities
(12,058)(22,577)
6

AUDACY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)

THREE MONTHS ENDED MARCH 31,
20222021
FINANCING ACTIVITIES:
Borrowing under the revolving senior debt 12,000 
Proceeds from issuance of long-term debt 540,000 
Payments of long-term debt (77,015)
Payments of revolving senior debt(22,727)(52,000)
Retirement of notes (400,000)
Payment for debt issuance costs (6,914)
Payment of call premium and other fees (14,500)
Proceeds from issuance of employee stock plan177  
Proceeds from the exercise of stock options 15 
Purchase of vested employee restricted stock units(1,839)(1,911)
Payment of dividend equivalents on vested restricted stock units(174)(386)
Net cash provided by (used in) financing activities(24,563)(711)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(21,401)20,566 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR59,439 30,964 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$38,038 $51,530 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest$23,616 $18,506 
Income taxes$(15,201)$(493)
See notes to condensed consolidated financial statements.
7

AUDACY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2022 AND 2021
1.    BASIS OF PRESENTATION AND SIGNIFICANT POLICIES
Audacy, Inc. (formerly Entercom Communications Corp.) was formed as a Pennsylvania corporation in 1968. On April 9, 2021, the Company changed its name to Audacy, Inc. and changed its New York Stock Exchange ticker symbol from "ETM" to "AUD".
The interim unaudited condensed consolidated financial statements included herein have been prepared by Audacy, Inc. and its subsidiaries (collectively, the “Company”) in accordance with: (i) generally accepted accounting principles (“U.S. GAAP”) for interim financial information; and (ii) the instructions of the Securities and Exchange Commission (the “SEC”) for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the results of operations and financial position for the interim periods presented. All such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations and, therefore, the results shown on an interim basis are not necessarily indicative of results for a full year.
This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021, and filed with the SEC on March 1, 2022, as part of the Company’s Annual Report on Form 10-K (the "2021 Annual Report"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
There have been no material changes from Note 2, Significant Accounting Policies, as described in the notes to the Company’s consolidated financial statements contained in the 2021 Annual Report.
COVID-19
In December 2019, a novel strain of coronavirus ("COVID-19") surfaced which resulted in an outbreak of infections throughout the world, which has affected operations and global supply chains. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. While the full impact of this pandemic is not yet known, the Company took proactive actions in an effort to mitigate its effects and is continually assessing its effects on the Company's business, including how it has and will continue to impact advertisers, professional sports and live events.
The COVID-19 pandemic has had, and is expected to continue to have, a material impact on the Company's business operations, financial position, cash flows, liquidity, and capital resources and results of operations. The full extent to which the COVID-19 pandemic impacts the Company's business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be accurately estimated at this time.
Consolidated VIE - AR Facility

On July 15, 2021, the Company and certain of its subsidiaries entered into a $75.0 million accounts receivable securitization facility (the "Receivables Facility") to provide additional liquidity, to reduce the Company's cost of funds and to repay outstanding indebtedness under the Company's Credit Facility (as defined in Note 8, Long-Term Debt, below).

The documentation for the Receivables Facility includes (i) a Receivables Purchase Agreement (the “Receivables Purchase Agreement”) entered into by and among Audacy Operations, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Audacy Operations”), Audacy Receivables, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company, as seller (“Audacy Receivables”), the investors party thereto (the “Investors”), and DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt AM Main, as agent (“DZ BANK”); (ii) a Sale and Contribution Agreement (the “Sale and Contribution Agreement”), by and among Audacy Operations, Audacy New York, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Audacy NY”), and Audacy Receivables; and (iii) a Purchase and Sale Agreement (the “Purchase and Sale Agreement,” and together with the Receivables Purchase Agreement and the Sale and Contribution Agreement, the “Agreements”) by and among certain wholly-owned subsidiaries of the Company (together with Audacy NY, the “Originators”), Audacy Operations and Audacy NY.

8

Audacy Receivables is considered a special purpose vehicle ("SPV") as it is an entity that has a special, limited purpose and it was created to sell accounts receivable, together with customary related security and interests in the proceeds thereof, to the Investors in exchange for cash investments.

The SPV is a bankruptcy remote, limited liability company wholly owned by Audacy NY and its assets are not available to creditors of the Company, Audacy Operations or Audacy NY. Pursuant to the Receivables Facility, Audacy NY sells certain of its receivables and certain related rights to payment and obligations of Audacy NY with respect to such receivables, and certain other related rights to Audacy Receivables, LLC, which, in turn, obtains loans secured by the receivables from financial institutions (the “Lenders”). Amounts received from the Lenders, the pledged receivables and the corresponding debt are included in Accounts receivable and Long-term debt, respectively, on the Condensed Consolidated Balance Sheets. The aggregate principal amount of the loans made by the Lenders cannot exceed $75.0 million outstanding at any time. The Receivables Facility will expire on July 15, 2024, unless earlier terminated or subsequently extended.

The SPV is considered a Variable Interest Entity ("VIE") because its equity capitalization is insufficient to support its operations. The most significant activities that impact the economic performance of the SPV are decisions made to manage receivables. Audacy NY is considered the primary beneficiary and consolidates the SPV as it makes these decisions. No additional financial support was provided to the SPV during the three months ended March 31, 2022 or is expected to be provided in the future that was not previously contractually required. As of March 31, 2022, the SPV has $191.8 million of net accounts receivable and has outstanding borrowings of $75.0 million under the Receivables Facility.

Consolidated VIE - Qualified Intermediary
Periodically, the Company enters into like-kind exchange agreements upon the disposition or acquisition of certain properties. Pursuant to the terms of these agreements, the proceeds from the sales are placed into an escrow account administered by a third party qualified intermediary ("QI") and are unavailable for the Company's use until released. The proceeds are recorded as restricted cash on the condensed consolidated balance sheets and released: (i) if they are utilized as part of a like-kind exchange agreement, (ii) if the Company does not identify a suitable replacement property within 45 days after the agreement date, or (iii) when a like-kind exchange agreement is not completed within the remaining allowable time period.
During 2022, the Company entered into an agreement with a third party QI, under which the Company entered into an exchange of real property held for productive use or investment. This agreement relates to the sale of real property and identification and acquisition of replacement property.
The QI is considered a VIE because its equity capitalization is insufficient to support its operations. The most significant activity that impacts the economic performance of the QI is its holding of proceeds from the sale of real property in an interest bearing account. The Company is considered the primary beneficiary as it has the right to direct the activities that were most significant to the VIE and the Company has the obligation to absorb losses or the right to receive returns that would be significant to the VIE during the period of the agreement.

The use of a QI in a like-kind exchange will enable the Company to reduce its current tax liability in connection with certain asset dispositions. Under Section 1031 of the Internal Revenue Code (the “Code”), the property to be exchanged in the like-kind exchange is required to be received by the Company within 180 days.

Total results of operations of the VIE for the three months ended March 31, 2022 were not significant. The consolidated VIE had cash as of March 31, 2022, which was reflected as restricted cash on the condensed consolidated balance sheet. The VIE had no other assets or liabilities as of March 31, 2022. The assets of the Company’s consolidated VIE could only be used to settle the obligations of the VIE. There was a lack of recourse by the creditors of the VIE against the Company’s general creditors. Refer to Note 15, Contingencies And Commitments, for additional information.
Recent Accounting Pronouncements
All new accounting pronouncements that are in effect that may impact the Company’s financial statements have been implemented. The Company does not believe that there are any other new accounting pronouncements that have been issued (other than those included in the notes to the Company’s consolidated financial statements contained in its 2021 Annual Report) that might have a material impact on the Company’s financial position, results of operations or cash flows.
9

2.    BUSINESS COMBINATIONS AND EXCHANGES
The Company records acquisitions under the acquisition method of accounting, and allocates the purchase price to the assets and liabilities based upon their respective fair values as determined as of the acquisition date. Merger and acquisition costs are excluded from the purchase price as these costs are expensed as incurred for book purposes and amortized for tax purposes.
2021 WideOrbit Streaming Acquisition
On October 20, 2021, the Company completed an acquisition of WideOrbit's digital audio streaming technology and the related assets and operations of WideOrbit Streaming for approximately $40.0 million (the "WideOrbit Streaming Acquisition"), which included certain employees. The assets acquired included $31.5 million of developed technology and $8.0 million of intangible licenses. The Company determined this acquisition was a business combination. The Company will operate WideOrbit Streaming under the name AmperWave ("AmperWave"). The Company funded this acquisition through a draw on its revolving credit facility (the "Revolver"). Based upon the timing of the WideOrbit Streaming Acquisition, the Company's condensed consolidated financial statements for the period ended March 31, 2022, reflect the results of AmperWave. The Company's condensed consolidated financial statements for the period ended March 31, 2021 do not reflect the results of AmperWave.
The Company's fair value analysis contains assumptions based on past experience, reflects expectations of industry observers and includes judgments about future performance using industry normalized information. Using a residual method, any excess between the consideration paid and the fair value of net assets acquired was recorded as goodwill. The Company recorded goodwill on its books. Management believes that this acquisition provides the Company with an opportunity to benefit from acquired technology, technical knowledge and trade secrets.
The allocations presented in the table below are based upon management's estimate of the fair values using valuation techniques including income, cost and market approaches. The following preliminary purchase price allocations are based upon the valuation of assets and these estimates and assumptions are subject to change as the Company obtains additional information during the measurement period, which may be up to one year from the acquisition date. The final valuation could be substantially different from the initial estimate.
Preliminary Value
(amounts in thousands)
Assets
Operating lease right-of-use assets$142 
Net property and equipment38 
Other assets, net of accumulated amortization39,532 
Goodwill520 
Total intangible and other assets40,052 
Operating lease liabilities(142)
Preliminary fair value of net assets acquired$40,090 
2021 Urban One Exchange
On April 20, 2021, the Company completed a transaction with Urban One, Inc. ("Urban One") under which the Company exchanged its four station cluster in Charlotte, North Carolina for one station in St. Louis, Missouri, one station in Washington, D.C., and one station in Philadelphia, Pennsylvania (the "Urban One Exchange"). The Company and Urban One began programming the respective stations under local marketing agreements ("LMAs") on November 23, 2020. During the period of the LMAs, the Company's consolidated financial statements excluded net revenues and station operating expenses associated with the four station cluster in Charlotte, North Carolina (the "divested stations") and included net revenues and station operating expenses associated with the stations in St. Louis, Missouri, Washington, D.C., and Philadelphia, Pennsylvania (the "acquired stations").
Upon completion of the Urban One Exchange, the Company: (i) removed from its condensed consolidated balance sheet the assets of the divested stations, which were previously classified as assets held for sale; (ii) recorded the assets of the
10

acquired stations at fair value; and (iii) recognized a gain on the exchange of approximately $4.0 million. Based upon the timing of the Urban One Exchange, the Company's condensed consolidated financial statements for the three months ended March 31, 2022: (a) reflect the results of the acquired stations; and (b) do not reflect the results of the divested stations. The Company's condensed consolidated financial statements for the three months ended March 31, 2021: (i) reflect the results of the acquired stations for the portion of the period in which the LMAs were in effect; and (ii) do not reflect the results of the divested stations.
The allocations presented in the table below are based upon management's estimate of the fair values using valuation techniques including income, cost and market approaches. The following table reflects the final allocation of the purchase price to the assets acquired.
Final Value
(amounts in thousands)
Assets
Net property and equipment$2,254 
Total tangible property2,254 
Radio broadcasting licenses23,233 
Total intangible assets$23,233 
Total assets$25,487 
2021 Podcorn Acquisition
On March 9, 2021, the Company completed the acquisition of podcast influencers marketplace, Podcorn Media, Inc. ("Podcorn") for $14.6 million in cash and a performance-based earnout over the next two years (the "Podcorn Acquisition"). The Company's condensed consolidated financial statements for the three months ended March 31, 2022 reflect the results of Podcorn. The Company's condensed consolidated financial statements for the three months ended March 31, 2021 reflect the results of Podcorn for the portion of the period after the completion of the Podcorn Acquisition.
The Podcorn Acquisition includes a contingent consideration arrangement that requires additional consideration to be paid by the Company to Podcorn based upon the achievement of certain annual performance benchmarks over a two-year period. A portion of the contingent consideration could be paid out in 2023 and a portion of the contingent consideration could be paid out in 2024. The timing of the payment of the contingent consideration is dependent upon Adjusted EBITDA values for 2022 and 2023, as defined in the purchase agreement. The range of the total undiscounted amounts the Company could pay under the contingent consideration agreement over the two-year period is between $0 and $45.2 million. The fair value of the contingent consideration recognized on the acquisition date of $7.7 million was estimated by applying probability-weighted, discounted future cash flows at current tax rates. The significant unobservable inputs (Level 3) used to estimate the fair value include the projected Adjusted EBITDA values, as defined in the purchase agreement, for 2022 and 2023, and the discount rate. Since the acquisition date, fluctuation in the market-based inputs used to develop the discount rate resulted in an increase in the discount rate which was offset by a reduction in the payment period, and in total, resulted in a higher expected present value of the contingent consideration. As a result, the fair value of the contingent consideration at March 31, 2022 increased to $9.1 million. Changes in the fair value of the contingent consideration are recorded to the Station Operating Expenses line item on the Statement of Operations.
The Company's fair value analysis contains assumptions based on past experience, reflects expectations of industry observers and includes judgments about future performance using industry normalized information. Using a residual method, any excess between the consideration paid and the fair value of net assets acquired was recorded as goodwill. Management believes that this acquisition provides the Company with an opportunity to benefit from customer relationships, technical knowledge and trade secrets.
The allocations presented in the table below are based upon management's estimate of the fair values using valuation techniques including income, cost and market approaches. The following table reflects the final allocation of the purchase price to the assets acquired and liabilities assumed.
11

Final Value
(amounts in thousands)
Assets
Cash$702 
Prepaid expenses, deposits and other18 
Other assets, net of accumulated amortization2,545 
Goodwill19,637 
Deferred tax asset72 
Net working capital63 
Preliminary fair value of net assets acquired$23,037 
Unaudited Pro Forma Summary of Financial Information
The following unaudited pro forma information for the three months ended March 31, 2021 assumes that the acquisitions in 2021 had occurred as of January 1, 2020.
Refer to information within this Note 2, Business Combinations, and to the consolidated financial statements and related notes included in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021, and filed with the SEC on March 1, 2022, for a description of the Company’s acquisition and disposition activities.
The unaudited pro forma information presented gives effect to certain adjustments, including: (i) depreciation and amortization of assets; (ii) change in the effective tax rate; (iii) merger and acquisition costs; and (iv) interest expense on any debt incurred to fund the acquisitions which would have been incurred had such acquisitions been consummated at an earlier time.
This unaudited pro forma information has been prepared based on estimates and assumptions, which management believes are reasonable. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of that date or results which may occur in the future.
Three Months Ended
March 31,
20222021
(amounts in thousands except share and per share data)
ActualPro Forma
Net revenues$275,295 $242,374 
Net income (loss)$(11,073)$(23,744)
Net income (loss) per common share - basic$(0.08)$(0.18)
Net income (loss) per common share - diluted$(0.08)$(0.18)
Weighted shares outstanding basic138,122,432 135,379,321 
Weighted shares outstanding diluted138,122,432 135,379,321 

12

3.    RESTRUCTURING CHARGES
Restructuring Charges
The following table presents the components of restructuring charges.
Three Months Ended
March 31,
20222021
(amounts in thousands)
Workforce reduction$721 $183 
Other restructuring costs165 2 
Total restructuring charges$886 $185 
Restructuring Plan
During the first quarter of 2020, the Company initiated a restructuring plan to help mitigate the adverse impact that the COVID-19 pandemic is having on financial results and business operations. The Company continues to evaluate what, if any, further actions may be necessary related to the COVID-19 pandemic. The restructuring plan primarily included workforce reduction charges that included one-time termination benefits and related costs to mitigate the adverse impacts of the COVID-19 pandemic.
The estimated amount of unpaid restructuring charges as of March 31, 2022 includes amounts in accrued expenses that are expected to be paid in less than one year.
Three Months Ended March 31, 2022Twelve Months Ended December 31, 2021
(amounts in thousands)
Restructuring charges, beginning balance$2,623 $2,988 
Additions886 5,671 
Payments(1,757)(6,036)
Restructuring charges unpaid and outstanding1,752 2,623 
Restructuring charges - noncurrent portion  
Restructuring charges - current portion$1,752 $2,623 
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4.    REVENUE
Spot Revenues
The Company sells air-time to advertisers and broadcasts commercials at agreed upon dates and times. The Company's performance obligations are broadcasting advertisements for advertisers at specifically identifiable days and dayparts. The amount of consideration the Company receives and revenue it recognizes is fixed based upon contractually agreed upon rates. The Company recognizes revenue at a point in time when the advertisements are broadcast and the performance obligations are satisfied. Revenues are recorded on a net basis, after the deduction of advertising agency fees by the advertising agencies.
Digital Revenues
The Company provides targeted advertising through the sale of streaming and display advertisements on its national platforms, audacy.com and eventful.com, the Audacy app, and its station websites. Performance obligations include delivery of advertisements over the Company's platforms or delivery of targeted advertisements directly to consumers. The Company recognizes revenue at a point in time when the advertisements are delivered and the performance obligations are satisfied. Revenues are recorded on a net basis, after the deduction of advertising agency fees by the advertising agencies.
Through its acquisition of Cadence 13, Inc. ("Cadence13") (the "Cadence13 Acquisition"), the Company embeds advertisements in its owned and operated podcasts and other on-demand content. Performance obligations include delivery of advertisements. The Company recognizes revenue at a point in time when the advertisements are delivered and the performance obligations are satisfied. Revenues are recorded on a net basis, after the deduction of advertising agency fees by the advertising agencies.
Through its acquisition of Pineapple Street Media ("Pineapple") (the "Pineapple Acquisition"), the Company creates podcasts, for which it earns production fees. Performance obligations include the delivery of episodes. These revenues are fixed based upon contractually agreed upon terms. The Company recognizes revenue over the term of the production contract.
Network Revenues
The Company sells air-time on the Company's Audacy Audio Network. The amount of consideration the Company receives and revenue it recognizes is fixed based upon contractually agreed upon rates. The Company recognizes revenue at a point in time when the advertisements are broadcast and the performance obligations are satisfied. Revenues are recorded on a net basis, after the deduction of advertising agency fees by the advertising agencies.
Sponsorship and Event Revenues
The Company sells advertising space at live and local events hosted by the Company across the country. The Company also earns revenues from attendee-driven ticket sales and merchandise sales. Performance obligations include the presentation of the advertisers' branding in highly visible areas at the event. These revenues are recognized at a point in time, when the event occurs and the performance obligations are satisfied.
The Company also sells sponsorships including, but not limited to, naming rights related to its programs or studios. Performance obligations include the mentioning or displaying of the sponsors' name, logo, product information, slogan or neutral descriptions of the sponsors' goods or services in acknowledgement of their support. These revenues are fixed based upon contractually agreed upon terms. The Company recognizes revenue over the length of the sponsorship agreement based upon the fair value of the deliverables included.
Other Revenues
The Company earns revenues from on-site promotions and endorsements from talent. Performance obligations include the broadcasting of such endorsement at specifically identifiable days and dayparts or at various local events. The Company recognizes revenue at a point in time when the performance obligations are satisfied.
The Company earns trade and barter revenue by providing advertising broadcast time in exchange for certain products, supplies, and services. The Company includes the value of such exchanges in both net revenues and station operating expenses. Trade and barter value is based upon management's estimate of the fair value of the products, supplies and services received.

14

Contract Balances
Refer to the table below for information about receivables, contract assets and contract liabilities from contracts with customers. Accounts receivable balances in the table below exclude other receivables that are not generated from contracts with customers. These amounts are $1.7 million and $2.8 million as of March 31, 2022 and December 31, 2021, respectively.
Description
March 31,
2022
December 31,
2021
(amounts in thousands)
Receivables, net, included in Accounts receivable net of allowance for doubtful accounts$226,137 $273,217 
Unearned revenue - current
10,778 10,638 
Unearned revenue - noncurrent
455 474 
Changes in Contract Balances
The timing of revenue recognition, billings and cash collections results in accounts receivable (billed or unbilled), and customer advances and deposits (unearned revenue) on the Company’s condensed consolidated balance sheet. At times, however, the Company receives advance payments or deposits from its customers before revenue is recognized, resulting in contract liabilities. The contract liabilities primarily relate to the advance consideration received from customers on certain contracts. For these contracts, revenue is recognized in a manner that is consistent with the satisfaction of the underlying performance obligations. The contract liabilities are reported on the condensed consolidated balance sheets on a contract-by-contract basis at the end of each respective reporting period within other current liabilities and other long-term liabilities.
Significant changes in the contract liabilities balances during the period are as follows:
Three Months Ended
March 31, 2022
DescriptionUnearned Revenue
(amounts in thousands)
Beginning balance on January 1, 2022$11,112 
Revenue recognized during the period that was included in the beginning balance of contract liabilities(11,112)
Additions, net of revenue recognized during period11,233 
Ending balance$11,233 
Disaggregation of Revenue
The following table presents the Company’s revenues disaggregated by revenue source:
Three Months Ended
March 31,
20222021
Revenue by Source(amounts in thousands)
Spot revenues$175,135 $154,294 
Digital revenues58,039 49,840 
Network revenues21,141 17,570 
Sponsorships and event revenues10,327 9,158 
Other revenues10,653 9,902 
Net revenues$275,295 $240,764 
15

5.    LEASES
Leasing Guidance
The Company recognizes the assets and liabilities that arise from leases on the commencement date of the lease. The Company recognizes the liability to make lease payments as a lease liability as well as a right-of-use ("ROU") asset representing the right to use the underlying asset for the lease term, on the condensed consolidated balance sheet.
Lease Expense
The components of lease expense were as follows:
Three Months Ended
March 31,
Lease Cost20222021
(amounts in thousands)
Operating lease cost
$12,585 $12,371 
Variable lease cost2,904 2,957 
Total lease cost
$15,489 $15,328 
Supplemental Cash Flow
Supplemental cash flow information related to leases was as follows:
Three Months Ended March 31,
Description20222021
(amounts in thousands)
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases$13,610 $13,694 
Right-of-use assets obtained in exchange for lease obligations
Operating leases
$2,769 $6,432 
As of March 31, 2022, the Company has not entered into any leases that have not yet commenced.
6.    INTANGIBLE ASSETS AND GOODWILL
Goodwill and certain intangible assets are not amortized for book purposes. They may be, however, amortized for tax purposes. The Company accounts for its acquired broadcasting licenses as indefinite-lived intangible assets and, similar to goodwill, these assets are reviewed at least annually for impairment. At the time of each review, if the fair value is less than the carrying value of the reporting unit, then a charge is recorded to the results of operations.
The following table presents the changes in the carrying value of broadcasting licenses. Refer to Note 2, Business Combinations, and Note 14, Assets Held For Sale, for additional information.
Broadcasting Licenses
Carrying Amount
March 31,
2022
December 31,
2021
(amounts in thousands)
Broadcasting licenses balance as of January 1,$2,251,546 $2,229,016 
Acquisitions (See Note 2) 23,233 
Assets held for sale (See Note 14) (703)
Ending period balance$2,251,546 $2,251,546 
16

The following table presents the changes in goodwill. Refer to Note 2, Business Combinations, for additional information.
Goodwill Carrying Amount
March 31,
2022
December 31,
2021
(amounts in thousands)
Goodwill balance before cumulative loss on impairment as of January 1,$1,062,723 $1,042,762 
Accumulated loss on impairment as of January 1,(980,547)(980,547)
Goodwill beginning balance after cumulative loss on impairment as of January 1,82,176 62,215 
Acquisitions (See Note 2) 20,099 
Measurement period adjustments to acquired goodwill (See Note 2) (138)
Ending period balance$82,176 $82,176 
Broadcasting Licenses Impairment Test
During the fourth quarter of 2021, the Company completed its annual impairment test for broadcasting licenses and determined that the fair value of its broadcasting licenses was greater than the amount reflected in the balance sheet for each of the Company's markets and, accordingly, no impairment was recorded.
If actual market conditions are less favorable than those projected by the industry or the Company, or if events occur or circumstances change that would reduce the fair value of the Company’s broadcasting licenses below the amount reflected in the condensed consolidated balance sheet, the Company may be required to conduct an interim test and possibly recognize impairment charges, which may be material, in future periods. The COVID-19 pandemic increases the uncertainty with respect to such market and economic conditions and, as such, increases the risk of future impairment.
There were no events or changes in circumstances since the previous annual impairment assessment conducted during the fourth quarter of 2021 that indicated an interim review of broadcasting licenses was required.
Goodwill Impairment Test
In March 2021, the Company completed the Podcorn Acquisition. Cadence13, Pineapple and Podcorn represent a single podcasting division one level beneath the single operating segment. Since the operations are economically similar, Cadence13, Pineapple and Podcorn were aggregated into a single podcasting reporting unit for the quantitative impairment assessment conducted in the fourth quarter of 2021. During the fourth quarter of 2021, the Company completed its annual impairment test for its podcasting reporting unit and determined that the fair value of its podcast reporting unit was greater than the carrying value and, accordingly, no impairment was recorded.
During the fourth quarter of 2021, the Company completed its annual impairment test for the QLGG reporting unit and determined that the fair value of its QLGG reporting unit was greater than the carrying value and, accordingly, no impairment was recorded.

In October 2021, the Company completed the WideOrbit Streaming Acquisition. AmperWave represents a separate division one level beneath the single operating segment and its own reporting unit. For the goodwill acquired in the WideOrbit Streaming Acquisition, similar valuation techniques that were applied in the valuation of goodwill under purchase price accounting were also used in the annual impairment testing process. The valuation of the acquired goodwill approximated fair value.
If actual market conditions are less favorable than those projected by the industry or the Company, or if events occur or circumstances change that would reduce the fair value of the Company’s goodwill below the amount reflected in the condensed consolidated balance sheet, the Company may be required to conduct an interim test and possibly recognize impairment charges, which could be material, in future periods. The COVID-19 pandemic increases the uncertainty with respect to such market and economic conditions and, as such, increases the risk of future impairment.
There were no events or changes in circumstances since the previous annual impairment assessment conducted during the fourth quarter of 2021 that indicated an interim review of goodwill was required.
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7.    OTHER CURRENT LIABILITIES
Other current liabilities consist of the following as of the periods indicated:
Other Current Liabilities
March 31,
2022
December 31,
2021
(amounts in thousands)
Accrued compensation$36,817 $35,917 
Accounts receivable credits2,889 2,506 
Advertiser obligations3,717 2,504 
Accrued interest payable13,207 14,662 
Unearned revenue10,778 10,638 
Unfavorable sports liabilities4,492 4,492 
Accrued benefits6,841 6,894 
Non-income tax liabilities1,996 1,897 
Other4,339 4,620 
Total other current liabilities$85,076 $84,130 

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8.    LONG-TERM DEBT
Long-term debt was comprised of the following as of the periods indicated:
Long-Term Debt
March 31,
2022
December 31,
2021
(amounts in thousands)
Credit Facility
Revolver$75,000 $97,727 
Term B-2 Loan, due November 17, 2024632,415 632,415 
Plus unamortized premium1,326 1,397 
708,741 731,539 
2027 Notes
6.500% notes due May 1, 2027
470,000 470,000 
Plus unamortized premium3,778 3,964 
473,778 473,964 
2029 Notes
6.750% notes due March 31, 2029
540,000 540,000 
540,000 540,000 
Accounts receivable facility75,000 75,000 
Other debt797 764 
Total debt before deferred financing costs1,798,316 1,821,267 
Current amount of long-term debt (22,727)
Deferred financing costs (excludes the revolving credit)(15,772)(16,409)
Total long-term debt, net of current debt$1,782,544 $1,782,131 
Outstanding standby letters of credit$6,069 $6,069 
(A) Senior Debt
The 2027 Notes
During 2019, the Company and its finance subsidiary, Audacy Capital Corp. (formerly Entercom Media Corp.) ("Audacy Capital Corp."), issued $425.0 million in aggregate principal amount of senior secured second-lien notes due May 1, 2027 (the "Initial 2027 Notes"). Interest on the Initial 2027 Notes accrues at the rate of 6.500% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year. The Initial 2027 Notes are governed by an indenture dated as of April 30, 2019 (the "Base Indenture"), as supplemented by a first supplemental indenture dated December 13, 2019 (the "First Supplemental Indenture"), (collectively, the "Indenture").
A portion of the Initial 2027 Notes was issued at premium. As of any reporting period, the unamortized premium on the Initial 2027 Notes is reflected on the balance sheet as an addition to the Initial 2027 Notes.
During the fourth quarter of 2021, Audacy Capital Corp., issued $45.0 million of additional 6.500% senior secured second-lien notes due 2027 (the "Additional 2027 Notes"). The Additional 2027 Notes were issued as additional notes under the Indenture. The Additional 2027 Notes are treated as a single series with the Initial 2027 Notes (collectively, the "2027 Notes") and have substantially the same terms as the Initial 2027 Notes. The Additional 2027 Notes were issued at a price of 100.750% of their principal amount. As of any reporting period, the unamortized premium on the 2027 Notes is reflected on the balance sheet as an addition to the $470.0 million 2027 Notes.
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The Credit Facility
The Company's credit agreement (the "Credit Facility"), as amended, is comprised of a $250.0 million Revolver and a term B-2 loan (the "Term B-2 Loan").
The Credit Facility has usual and customary covenants including, but not limited to, a net first lien leverage ratio, restricted payments and the incurrence of additional debt. Specifically, the Credit Facility requires the Company to comply with a certain financial covenant which is a defined term within the agreement, including a maximum Consolidated Net First-Lien Leverage Ratio that cannot exceed 4.0 times at March 31, 2022. In certain circumstances, if the Company consummates additional acquisition activity permitted under the terms of the Credit Facility, the Consolidated Net First-Lien Leverage Ratio will be increased to 4.5 times for a one year period following the consummation of such permitted acquisition. As of March 31, 2022, the Company’s Consolidated Net First Lien Leverage Ratio was 3.4 times.
Failure to comply with the Company’s financial covenant or other terms of its Credit Facility and any subsequent failure to negotiate and obtain any required relief from its lenders could result in a default under the Company’s Credit Facility. Any event of default could have a material adverse effect on the Company’s business and financial condition. The acceleration of the Company’s debt repayment could have a material adverse effect on its business. The Company may seek from time to time to amend its Credit Facility or obtain other funding or additional funding, which may result in higher interest rates.
As of March 31, 2022, the Company is in compliance with the financial covenant and all other terms of the Credit Facility in all material respects. The Company’s ability to maintain compliance with its covenant is highly dependent on its results of operations. The cash available from the Revolver is dependent on the Company’s Consolidated Net First-Lien Leverage Ratio at the time of such borrowing.
The 2029 Notes
During the first quarter of 2021, the Company and its finance subsidiary, Audacy Capital Corp., issued $540.0 million in aggregate principal amount of senior secured second-lien notes due March 31, 2029 (the "2029 Notes"). Interest on the 2029 Notes accrues at the rate of 6.750% per annum and is payable semi-annually in arrears on March 31 and September 30 of each year.
The Company used net proceeds of the offering, along with cash on hand, to: (i) repay $77.0 million of existing indebtedness under the Term B-2 Loan; (ii) repay $40.0 million of drawings under the Revolver; and (iii) fully redeem all of its $400.0 million aggregate principal amount of 7.250% senior notes due 2024 (the "Senior Notes") and to pay fees and expenses in connection with the redemption.
In connection with this activity, during the first quarter of 2021, the Company: (i) recorded $6.6 million of new debt issuance costs attributable to the 2029 Notes; and (ii) $0.4 million of debt issuance costs attributable to the Revolver which will be amortized over the remaining term of the Revolver on a straight line basis. The Company also incurred $0.5 million of costs which were classified within refinancing expenses.
The Credit Facility - Amendment No. 5
On July 20, 2020, Audacy Capital Corp. entered into an amendment ("Amendment No. 5") to the Credit Agreement, dated October 17, 2016 (as previously amended, the "Existing Credit Agreement" and, as amended by Amendment No. 5, the "Credit Agreement"), with the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. Amendment No. 5, among other things:
(a) amended the Company's financial covenants under the Credit Agreement by: (i) suspending the testing of the Consolidated Net First Lien Leverage Ratio (as defined in the Credit Agreement) through the Test Period (as defined in the Credit Agreement) ending December 31, 2020; (ii) adding a new minimum liquidity covenant of $75.0 million until December 31, 2021, or such earlier date as the Company may elect (the "Covenant Relief Period"); and (iii) imposing certain restrictions during the Covenant Relief Period, including among other things, certain limitations on incurring additional indebtedness and liens, making restricted payments or investments, redeeming notes and entering into certain sale and lease-back transactions;
(b) increased the interest rate and/or fees under the Credit Agreement during the Covenant Relief Period applicable to: (i) 2024 Revolving Credit Loans (as defined in the Credit Agreement) to (x) in the case of Eurodollar Rate Loans (as defined in the Credit Agreement), a customary Eurodollar rate formula plus a margin of 2.50% per annum, and (y) in the case of Base Rate Loans (as defined in the Credit Agreement), a customary base rate formula plus a margin of 1.50% per annum, and (ii) Letter of
20

Credit (as defined in the Credit Agreement) fees to 2.50% times the daily maximum amount available to be drawn under any such Letter of Credit; and
(c) modified the definition of Consolidated EBITDA by setting fixed amounts for the fiscal quarters ending June 30, 2020, September 30, 2020, and December 31, 2020, for purposes of testing compliance with the Consolidated Net First Lien Leverage Ratio financial covenant during the Covenant Relief Period, which fixed amounts correspond to the Borrower's Consolidated EBITDA as reported under the Existing Credit Agreement for the Test Period ended March 31, 2020, for the fiscal quarters ending June 30, 2019, September 30, 2019, and December 31, 2019, respectively.
The Credit Facility - Amendment No. 6
On March 5, 2021, Audacy Capital Corp. entered into an amendment ("Amendment No. 6") to the Credit Agreement, dated October 17, 2016 (as previously amended, the “Existing Credit Agreement” and, as amended by Amendment No. 6, the “Credit Agreement”), with the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.
Under the Existing Credit Agreement, during the Covenant Relief Period the Company is subject to a $75.0 million limitation on investments in joint ventures, Affiliates, Unrestricted Subsidiaries and Non-Guarantor Subsidiaries (each as defined in the Existing Credit Agreement) (the “Covenant Relief Period Investment Limitation”). Amendment No. 6, among other things, excludes from the Covenant Relief Period Investment Limitation any investments made in connection with a permitted receivables financing facility.
Accounts Receivable Facility
On July 15, 2021, the Company and certain of its subsidiaries entered into a $75.0 million Receivables Facility to provide additional liquidity, to reduce the Company's cost of funds and to repay outstanding indebtedness under the Credit Facility.
The documentation for the Receivables Facility includes (i) a Receivables Purchase Agreement entered into by and among Audacy Operations, Audacy Receivables as seller, the Investors, and DZ BANK, as agent; (ii) a Sale and Contribution Agreement, by and among Audacy Operations, Audacy NY, and Audacy Receivables; and (iii) a Purchase and Sale Agreement and together with the Receivables Purchase Agreement and the Sale and Contribution Agreement, the “Agreements”) by and among certain wholly-owned subsidiaries of the Company (together with Audacy NY, the “Originators”), Audacy Operations and Audacy NY.
Pursuant to the Purchase and Sale Agreement, the Originators (other than Audacy NY) have sold, and will continue to sell on an ongoing basis, their accounts receivable, together with customary related security and interests in the proceeds thereof, to Audacy NY. Pursuant to the Sale and Contribution Agreement, Audacy NY has sold and contributed, and will continue to sell and contribute on an ongoing basis, its accounts receivable, together with customary related security and interests in the proceeds thereof, to Audacy Receivables. Pursuant to the Receivables Purchase Agreement, Audacy Receivables has sold and will continue to sell on an ongoing basis such accounts receivable, together with customary related security and interests in the proceeds thereof, to the Investors in exchange for cash investments.
Yield is payable to Investors under the Receivables Purchase Agreement at a variable rate based on either one-month LIBOR or commercial paper rates plus a margin. Collections on the accounts receivable: (x) will be used to either: (i) satisfy the obligations of Audacy Receivables under the Receivables Facility; or (ii) purchase additional accounts receivable from the Originators; or (y) may be distributed to Audacy NY, the sole member of Audacy Receivables. Audacy Operations acts as the servicer under the Agreements.

The Agreements contain representations, warranties and covenants that are customary for bankruptcy-remote securitization transactions, including covenants requiring Audacy Receivables to be treated at all times as an entity separate from the Originators, Audacy Operations, the Company or any of its other affiliates and that transactions entered into between Audacy Receivables and any of its affiliates shall be on arm’s-length terms. The Receivables Purchase Agreement also contains customary default and termination provisions which provide for acceleration of amounts owed under the Receivables Purchase Agreement upon the occurrence of certain specified events with respect to Audacy Receivables, Audacy Operations, the Originators, or the Company, including, but not limited to: (i) Audacy Receivables’ failure to pay yield and other amounts due; (ii) certain insolvency events; (iii) certain judgments entered against the parties; (iv) certain liens filed with respect to assets; and (v) breach of certain financial covenants and ratios.

21

The Company has agreed to guarantee the performance obligations of Audacy Operations and the Originators under the Receivables Facility documents. The Company has not agreed to guarantee any obligations of Audacy Receivables or the collection of any of the receivables and will not be responsible for any obligations to the extent the failure to perform such obligations by Audacy Operations or any Originator results from receivables being uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness or other financial inability to pay of the related obligor.

In general, the proceeds from the sale of the accounts receivable are used by the SPV to pay the purchase price for accounts receivables it acquires from Audacy NY and may be used to fund capital expenditures, repay borrowings on the Credit Facility, satisfy maturing debt obligations, as well as fund working capital needs and other approved uses.

Although the SPV is a wholly owned consolidated subsidiary of Audacy NY, the SPV is legally separate from Audacy NY. The assets of the SPV (including the accounts receivables) are not available to creditors of Audacy NY, Audacy Operations or the Company, and the accounts receivables are not legally assets of Audacy NY, Audacy Operations or the Company. The Receivables Facility is accounted for as a secured financing. The pledged receivables and the corresponding debt are included in Accounts receivable and Long-term debt, respectively, on the Consolidated Balance Sheets.
The Receivables Facility will expire on July 15, 2024, unless earlier terminated or subsequently extended pursuant to the terms of the Receivables Purchase Agreement. The pledged receivables and the corresponding debt are included in Accounts receivable, net and Long-term debt, net of current portion, respectively, on the Condensed Consolidated Balance Sheet. At March 31, 2022, the Company had outstanding borrowings of $75.0 million under the Receivables Facility.
(B) Senior Unsecured Debt
The Senior Notes
Simultaneously with entering into a business combination and assuming the Credit Facility on November 17, 2017, the Company also assumed the 7.250% unsecured senior notes (the “Senior Notes”) that were subsequently modified and were set to mature on November 1, 2024 in the amount of $400.0 million. The Senior Notes were originally issued by CBS Radio (now Audacy Capital Corp.) on October 17, 2016.
Interest on the Senior Notes accrued at the rate of 7.250% per annum and was payable semi-annually in arrears on May 1 and November 1 of each year.
In connection with the redemption of the Senior Notes during the first quarter of 2021, the Company wrote off the following amounts to gain/loss on extinguishment of debt: (i) $14.5 million in prepayment premiums for the early retirement of the Senior Notes; (ii) $8.7 million of unamortized premium attributable to the Senior Notes; (iii) $1.0 million of unamortized debt issuance costs attributable to the Senior Notes; and (iv) $1.3 million of unamortized debt issuance costs attributable to the Term B-2 Loan.
(C) Net Interest Expense
The components of net interest expense are as follows:
Net Interest Expense
Three Months Ended
March 31,
20222021
(amounts in thousands)
Interest expense$22,539 $20,967 
Amortization of deferred financing costs1,259 1,041 
Amortization of original issue premium of senior notes(256)(848)
Interest income and other investment income(71) 
Total net interest expense$23,471 $21,160 
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9.    DERIVATIVE AND HEDGING ACTIVITIES
The Company from time to time enters into derivative financial instruments, such as interest rate collar agreements (“Collars”), to manage its exposure to fluctuations in interest rates under the Company’s variable rate debt.
Hedge Accounting Treatment
As of March 31, 2022, the Company had the following derivative outstanding, which was designated as a cash flow hedge that qualified for hedge accounting treatment:
Type
Of
Hedge
Notional
Amount
Effective
Date
CollarFixed
LIBOR
Rate
Expiration
Date
Notional
Amount
Decreases
Amount
After
Decrease
(amounts
 in millions)
(amounts
in millions)
Cap2.75%Jun. 28, 2022$220.0 
Collar$340.0 Jun. 25, 2019Floor0.402%Jun. 28, 2024Jun. 28, 2023$90.0 
Total$340.0 
For the three months ended March 31, 2022, the Company recorded the net change in the fair value of this derivative as a gain of $1.2 million (net of tax benefit of $0.4 million as of March 31, 2022) to the condensed consolidated statement of comprehensive income (loss). The fair value of this derivative was determined using observable market-based inputs (a Level 2 measurement) and the impact of credit risk on a derivative’s fair value (the creditworthiness of the Company for liabilities). As of March 31, 2022, the fair value of these derivatives was an asset of $1.3 million, and is recorded within other assets, net of accumulated amortization on the condensed consolidated balance sheet. The Company does not expect to reclassify any of this amount to the condensed consolidated statement of operations over the next twelve months.
The following table presents the accumulated derivative gain (loss) recorded in other comprehensive income (loss) as of March 31, 2022 and December 31, 2021:
Accumulated Derivative Gain (Loss)
DescriptionMarch 31,
2022
December 31,
2021
(amounts in thousands)
Accumulated derivative unrealized gain (loss)$934 $(289)
The following tables presents the accumulated net derivative gain (loss) recorded in other comprehensive income (loss) for the three months ended March 31, 2022 and March 31, 2021:
Other Comprehensive Income (Loss)
Net Change in Accumulated Derivative Unrealized Gain (Loss)Net Amount of Accumulated Derivative Gain (Loss) Reclassified to the Condensed Consolidated Statement of Operations
Three Months Ended March 31,
2022202120222021
(amounts in thousands)
$1,223 $553 $232 $307 







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Undesignated Derivatives

The Company is subject to equity market risks due to changes in the fair value of the notional investments selected by its employees as part of its non-qualified deferred compensation plans. During the quarter ended June 30, 2020, the Company entered into a Total Return Swap ("TRS") in order to manage the market risks associated with its non-qualified deferred compensation plan liabilities. The Company pays a floating rate, based on the Secured Overnight Financing Rate ("SOFR"), on the notional amount of the TRS. The TRS is designed to substantially offset changes in its non-qualified deferred compensation plan's liabilities due to changes in the value of the investment options made by employees. As of March 31, 2022, the notional investments underlying the TRS amounted to $24.0 million. The contract term of the TRS is through March 2023 and is settled on a monthly basis, therefore limiting counterparty performance risk. The Company did not designate the TRS as an accounting hedge. Rather, the Company records all changes in the fair value of the TRS to earnings to offset the market value changes of its non-qualified deferred compensation plan liabilities.

For the three months ended March 31, 2022, the Company recorded the net change in the fair value of the TRS in station operating expenses and corporate, general and administrative expenses in the amount of a $1.4 million expense. Of this amount, a $0.5 million expense was recorded in corporate, general and administrative expenses and a $0.9 million expense was recorded in station operating expenses.
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10.    NET INCOME (LOSS) PER COMMON SHARE
The following tables present the computations of basic and diluted net income (loss) per share from continuing operations:

Three Months Ended
March 31,
20222021
(amounts in thousands except per share data)
Basic Income (Loss) Per Share
Numerator
Net income (loss) $(11,073)$(21,648)
Denominator
Basic weighted average shares outstanding138,122 135,379 
Net income (loss) per share - Basic$(0.08)$(0.16)
Diluted Income (Loss) Per Share
Numerator
Net income (loss) $(11,073)$(21,648)
Denominator
Basic weighted average shares outstanding138,122 135,379 
Effect of RSUs and options under the treasury stock method  
Diluted weighted average shares outstanding138,122 135,379 
Net income (loss) per share - Diluted$(0.08)$(0.16)
Disclosure of Anti-Dilutive Shares
The following table presents those shares excluded as they were anti-dilutive:
Three Months Ended
March 31,
Impact Of Equity Issuances20222021
(amounts in thousands, except per share data)
Shares excluded as anti-dilutive under the treasury stock method:
Options609 588