In preparing the discussion and analysis contained in this Item 2, we presume that readers have read or have access to the discussion and analysis contained in our Annual Report on Form 10-K filed with theSecurities and Exchange Commission (the "SEC") onMarch 1, 2021 . In addition, you should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included elsewhere in this report. The following results of operations include a discussion of the nine and three months endedSeptember 30, 2021 as compared to the comparable periods in the prior year. Our results of operations during the relevant periods represent the operations of the radio stations owned or operated by us. The following discussion and analysis contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. You should not place undue reliance on any of these forward-looking statements. In addition, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which the statement is made, to reflect the occurrence of unanticipated events or otherwise, except as required by law. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Results of Operations for the Year-To-Date The following significant factors affected our results of operations for the nine and three months endedSeptember 30, 2021 , as compared to the nine and three months endedSeptember 30, 2020 : COVID-19 Pandemic InDecember 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. OnMarch 11, 2020 , theWorld Health Organization declared COVID-19 a pandemic. While the full impact of this pandemic is not yet known, we have taken proactive actions in an effort to mitigate its effects and are continually assessing its effects on our business, including how it has and will continue to impact advertisers, professional sports and live events. We experienced strong revenue growth in January andFebruary 2020 . InMarch 2020 , we began to experience adverse effects due to the pandemic. During the second quarter of 2020, we experienced significant declines in revenue performance. April revenues were most significantly impacted and we began to experience sequential month over month improvement in our revenue performance in May through December of 2020. Due to the seasonality of the business, the month over month improvement in net revenues did not continue into the first quarter of 2021. However, net revenues in each month fromMarch 2021 toSeptember 2021 exceeded net revenues in each month fromMarch 2020 toSeptember 2020 . We are currently unable to predict the extent of the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows in future periods due to numerous uncertainties, but to date, it has been material and we believe the impact will continue to be material throughout 2021. However, we believe we are well positioned to fully participate in the recovery and the attractive growth opportunities in the audio space. We presently believe that the COVID-19 pandemic and its related economic impact has and will continue to: •cause a decline in national and local advertising revenues; •adversely affect our event revenues due to the cancellation of many of our events scheduled for 2021, mitigated by the ability to eliminate the associated event costs; •increase bad debt expense due to an inability of some of our clients to meet their payment terms; and •cause elevated employee medical claims costs. The following proactive actions were taken by management in an effort to partially offset the above: •temporary salary reductions in 2020 implemented across senior management and the broader organization; •temporary freezing of contractual salary increases in 2020; 34 -------------------------------------------------------------------------------- Table of Contents •temporary suspension of the employee stock purchase program; •furlough and termination of select employees; •temporary suspension of new employee hiring, travel and entertainment, and 401(k) matching program, •suspension of quarterly dividend program; and •reduction of sales and promotions spend as well as consulting and other discretionary expenses. The extent to which the COVID-19 pandemic impacts our business, operations and financial results is inherently uncertain and will depend on numerous evolving factors that we may not be able to accurately predict. Therefore, the results for the nine and three months endedSeptember 30, 2021 , may not be indicative of the results for the year endingDecember 31, 2021 . Urban One Exchange InApril 2021 , we completed a transaction with Urban One, Inc. ("Urban One") under which we exchanged our four station cluster inCharlotte, North Carolina for one station inSt. Louis, Missouri , one station inWashington, D.C. , and one station inPhiladelphia, Pennsylvania (the "Urban One Exchange"). We began programming the respective stations under local marketing agreements ("LMAs") onNovember 23, 2020 . Based on the timing of this transaction, our condensed consolidated financial statements for the nine and three months endedSeptember 30, 2021 : (i) reflect the results of the acquired stations for the portion of the period in which the LMAs were in effect and after the completion of the Urban One Exchange; and (ii) do not reflect the results of the divested stations. Our condensed consolidated financial statements for the nine and three months endedSeptember 30, 2020 : (i) do not reflect the results of the acquired stations; and (ii) reflect the results of the divested stations. Podcorn Acquisition InMarch 2021 , we completed an acquisition of podcast influencers marketplace,Podcorn Media, Inc. ("Podcorn") for$14.6 million in cash and a performance-based earn out which is based upon the achievement of certain annual performance benchmarks over a two year period (the "Podcorn Acquisition"). Based on the timing of this transaction, our condensed consolidated financial statements for the three months endedSeptember 30, 2021 , reflect the results of Podcorn. Our condensed consolidated financial statements for the nine months endedSeptember 30, 2021 , reflect the results of Podcorn for the portion of the period after the completion of the Podcorn Acquisition. Our condensed consolidated financial statements for the nine and three months endedSeptember 30, 2020 , do not reflect the results of Podcorn. QL Gaming Group Acquisition InNovember 2020 , we completed the acquisition of sports data and iGaming affiliate platformQL Gaming Group ("QLGG") in an all cash deal for approximately$32 million (the "QLGG Acquisition"). Based upon the timing of this transaction, our condensed consolidated financial statements for the nine and three months endedSeptember 30, 2021 reflect the results of QLGG. Our condensed consolidated financial statements for the nine and three months endedSeptember 30, 2020 do not reflect the results of QLGG. Integration Costs and Restructuring Charges In connection with theCBS Radio business acquisition inNovember 2017 (the "Merger"), we incurred integration costs, including transition services, consulting services and professional fees of$0.5 million during the nine months endedSeptember 30, 2020 . Amounts were expensed as incurred and are included in Integration costs. In connection with the Merger and the COVID-19 pandemic, we incurred restructuring charges, including workforce reductions and other restructuring costs of$4.2 million and$10.3 million during the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. We incurred restructuring charges, including workforce reductions and other restructuring costs of$2.3 million and$1.2 million during the three months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. Amounts were expensed as incurred and are included in Restructuring charges. Note Issuance During the first quarter of 2021, we issued$540.0 million in aggregate principal amount of senior secured second-lien notes dueMarch 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 onMarch 31 andSeptember 30 of each year. 35 -------------------------------------------------------------------------------- Table of Contents We used net proceeds of the offering, along with cash on hand, to: (i) repay$77.0 million of existing indebtedness under our term b-2 loan (the "Term B-2 Loan"); (ii) repay$40.0 million of drawings under our revolving credit facility (the "Revolver"); and (iii) fully redeem all of our$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, we: (i) recorded$6.6 million of new debt issuance costs attributable to the 2029 Notes which will be amortized over the term of the 2029 Notes under the effective interest method; 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. We also incurred$0.5 million of costs which were classified within refinancing expenses. In connection with the redemption of the Senior Notes during the first quarter of 2021, we 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. Nine Months EndedSeptember 30, 2021 As Compared To The Nine Months Ended September 30, 2020 NINE MONTHS ENDED SEPTEMBER 30, 2021 2020 % Change (dollars in millions) NET REVENUES $ 874.6$ 741.4 18 % OPERATING EXPENSE: Station operating expenses 718.9 668.2 8 % Depreciation and amortization expense 38.7 37.7 3 % Corporate general and administrative expenses 71.5 42.0 70 % Integration costs - 0.5 (100) % Restructuring charges 4.2 10.3 (59) % Impairment loss 1.4 17.0 (92) % Refinancing expenses 0.5 - 100 % Other expenses 0.5 (0.2) (350) % Total operating expense 835.7 775.5 8 % OPERATING INCOME (LOSS) 38.9 (34.1) (214) % INTEREST EXPENSE 66.4 66.1 - % Net (gain) loss on extinguishment of debt 8.2 - 100 % Net (gain) loss on sale or disposal of assets (3.7) - 100 % Other (income) expense (0.5) - 100 % (LOSS) BEFORE INCOME TAXES (BENEFIT) (31.5) (100.2) (69) % INCOME TAXES (BENEFIT) (6.5) (20.4) (68) % NET INCOME (LOSS) $ (25.0)$ (79.8) (69) % Net Revenues Revenues increased compared to prior year primarily due to economic recovery and improvements across all segments of our business from the depressed levels of the prior year. Prior year revenues were negatively impacted from the economic slowdown triggered by the COVID-19 pandemic. 36 -------------------------------------------------------------------------------- Table of Contents Net revenues were also positively impacted by: (i) growth in our spot revenues; (ii) growth in our digital revenues; (iii) the operations of QLGG for the full period; and (iv) the operations of Podcorn for a portion of the period. Net revenues increased the most for our stations located in theLos Angeles andNew York City markets. Net revenues decreased the most for our stations located in theCharlotte andPhoenix markets. We exited theCharlotte market in connection with the Urban One Exchange. Station Operating Expenses Station operating expenses increased compared to prior year primarily due to: (i) an increase in payroll and related expenses in the current year due to the reversal of payroll reduction measures taken in 2020; and (ii) an increase in 2021 revenues which resulted in a corresponding increase in variable sales-related expenses. Station operating expenses include non-cash compensation expense of$3.1 million and$1.6 million for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. Depreciation and Amortization Expense Depreciation and amortization expense increased primarily due to an increase in amortization of intangible assets in 2021 relative to 2020. The increase in amortization is due to the addition of amortizable intangible assets in the QLGG Acquisition and the Podcorn Acquisition. Additionally, depreciation and amortization expense increased due to an increase in capital expenditures in 2021 relative to 2020. The decrease in capital expenditures in 2020 was planned in order to mitigate the adverse financial impact of the COVID-19 pandemic. This reduction was part of a comprehensive set of measures to significantly reduce expenses and cash expenditures. Corporate General and Administrative Expenses Corporate general and administrative expenses increased primarily as a result of: (i) an increase in payroll and related expenses in the current year; and (ii) an increase in corporate rebranding costs in connection with our corporate name change. In 2020, we implemented certain measures to reduce expenses, and offset reduction in revenue due to COVID-19, including: (i) temporary salary reductions; and (ii) temporary freezing of contractual salary increases. Upon the reversal of these measures, we incurred increased costs in the current year. Corporate general and administrative expenses include non-cash compensation expense of$6.7 million and$4.6 million for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. Integration Costs Integration costs were incurred during the nine months endedSeptember 30, 2020 as a result of the Merger. These costs primarily consisted of ongoing costs related to effectively combining and incorporatingCBS Radio into our operations. Based on the timing of the Merger, integration activities primarily occurred in 2017 and 2018 and were reduced significantly in 2019 and 2020. Restructuring Charges We incurred restructuring charges in 2021 and 2020 primarily in response to the COVID-19 pandemic. These costs primarily included workforce reduction charges. Impairment Loss The impairment loss incurred during the nine months endedSeptember 30, 2021 includes a$0.8 million write down of property and equipment and$0.5 million related to an early termination of certain leases. During the nine months endedSeptember 30, 2020 , we conducted interim impairment assessments on our broadcasting licenses. As a result of the interim impairment assessments, we determined that the carrying value of our broadcasting licenses was greater than their fair value in certain markets and we recorded a cumulative non-cash impairment charge on our broadcasting licenses of$16.0 million . Refinancing Expenses We incurred$0.5 million of costs in connection with the issuance of the 2029 Notes. 37 -------------------------------------------------------------------------------- Table of Contents Interest Expense During the nine months endedSeptember 30, 2021 , we incurred an additional$0.3 million in interest expense as compared to the nine months endedSeptember 30, 2020 . As discussed above, we issued the$540.0 million 2029 Notes inMarch 2021 and used net proceeds and cash on hand to partially repay$517.0 million of existing indebtedness under our Term B-2 Loan, Revolver, and Senior Notes. This increase in interest expense was primarily attributable to an increase in the outstanding indebtedness upon which interest is computed. This increase was partially offset by: (i) a reduction in outstanding variable-rate indebtedness upon which interest is computed; and (ii) the replacement of a portion of our fixed-rate debt with fixed-rate debt at a lower interest rate. Net (Gain) Loss on Extinguishment of Debt As discussed above, in connection with the redemption of the Senior Notes during the first quarter of 2021, we wrote off: (i)$14.5 million in prepayment premiums for the early retirement of the Senior Notes; (ii)$1.0 million of unamortized debt issuance costs attributable to the Senior Notes; and (iii)$1.3 million of unamortized debt issuance costs attributable to the Term B-2 Loan. These losses on the extinguishment of debt were partially offset by the write off of$8.7 million of unamortized premium attributable to the Senior Notes. Net (Gain) Loss on Sale or Disposal of Assets During the nine months endedSeptember 30, 2021 , we recognized:(i) a gain of$4.0 million from the Urban One Exchange; and (ii) a gain of$0.8 million from the liquidation of one of our investments. These gains were partially offset by a$1.1 million loss on disposal of property, plant and equipment. Income Taxes (Benefit) Tax Rate for the Nine Months EndedSeptember 30, 2021 We recognized an income tax benefit at an effective income tax rate of 20.7% for the nine months endedSeptember 30, 2021 . We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. We used a discrete effective tax rate method to calculate taxes for the fiscal three- and nine-month periods endedSeptember 30, 2021 . We determined that since small changes in estimated "ordinary" income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the fiscal three- and nine-month periods endedSeptember 30, 2021 . OnMarch 27, 2020 ,the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthenthe United States economy and fund a nationwide effort to curtail the effects of the COVID-19 pandemic. The CARES Act includes significant business tax provisions that, among other things, includes the removal of certain limitations on utilization of NOLs, increases the loss carry back period for certain losses to five years, and increases the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. We are continuing to assess the impact that the CARES Act may have on our tax obligations. OnDecember 27, 2020 ,the United States enacted the Consolidated Appropriations Act, 2021 (the "Appropriations Act"), an additional stimulus package providing financial relief for individuals and small businesses. The Appropriations Act contains a variety of tax provisions, including full expensing of business meals in 2021 and 2022, and expansion of the employee retention tax credit. We do not currently expect the Appropriations Act to have a material tax impact. Tax Rate for the Nine Months EndedSeptember 30, 2020 The estimated annual effective income tax rate was 20.4%, which was determined using a forecasted rate based upon projected taxable income for the year. The effective income tax rate was impacted by a discrete income tax expense item related to the shortfall associated with share-based awards. 38
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Table of Contents Three Months EndedSeptember 30, 2021 As Compared To The Three Months Ended September 30, 2020 THREE MONTHS ENDED SEPTEMBER 30, 2021 2020 % Change (dollars in millions) NET REVENUES$ 329.4 $ 268.5 23 % OPERATING EXPENSE: Station operating expenses 261.0 228.7 14 % Depreciation and amortization expense 12.5 12.6 (1) % Corporate general and administrative expenses 24.2 14.5 67 % Restructuring charges 2.3 1.2 92 % Impairment loss - 11.8 (100) % Other expenses 0.2 - 100 % Total operating expense 300.2 268.8 12 % OPERATING INCOME (LOSS) 29.2 (0.3) (9,833) % INTEREST EXPENSE 22.8 20.8 10 % INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) 6.4 (21.1) (130) % INCOME TAXES (BENEFIT) 11.2 (4.2) (367) % NET INCOME (LOSS)$ (4.8) $ (16.9) (72) % Net Revenues Revenues increased compared to prior year primarily due to economic recovery and improvements across all segments of our business from the depressed levels of the prior year. Prior year revenues were negatively impacted from the economic slowdown triggered by the COVID-19 pandemic. Net revenues were also positively impacted by: (i) growth in our spot revenues; (ii) growth in our digital revenues; (iii) the operations of QLGG for the full period; and (iv) the operations of Podcorn for the full period. Net revenues increased the most for our stations located in theLos Angeles andNew York City markets. Net revenues decreased the most for our stations located in theCharlotte andGreensboro markets. We exited theCharlotte market in connection with the Urban One Exchange. Station Operating Expenses Station operating expenses increased compared to prior year primarily due to: (i) an increase in payroll and related expenses in the current year due to the reversal of payroll reduction measures taken in 2020; and (ii) an increase in 2021 revenues which resulted in a corresponding increase in variable sales-related expenses. Station operating expenses include non-cash compensation expense of$0.9 million and$0.5 million for the three months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. Depreciation and Amortization Expense Depreciation expense for the three months endedSeptember 30, 2021 as compared to depreciation expense for the three months endedSeptember 30, 2020 remained generally consistent period over period. 39 -------------------------------------------------------------------------------- Table of Contents Corporate General and Administrative Expenses Corporate general and administrative expenses increased primarily as a result of: (i) an increase in payroll and related expenses in the current year; and (ii) an increase in corporate rebranding costs in connection with our corporate name change. In 2020, we implemented certain measures to reduce expenses, and offset reduction in revenue due to COVID-19, including: (i) temporary salary reductions; and (ii) temporary freezing of contractual salary increases. Upon the reversal of these measures, we incurred increased costs in the current year. Corporate general and administrative expenses include non-cash compensation expense of$3.5 million and$1.4 million for the three months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. Restructuring Charges We incurred restructuring charges in 2021 and 2020 primarily in response to the COVID-19 pandemic. These costs primarily included workforce reduction charges and were expensed as incurred. Impairment Loss During the three months endedSeptember 30, 2020 , we conducted an interim impairment assessment on our broadcasting licenses. As a result of the interim impairment assessment, we determined that the carrying value of our broadcasting licenses was greater than their fair value in certain markets and we recorded a non-cash impairment charge on our broadcasting licenses of$11.8 million . Interest Expense During the three months endedSeptember 30, 2021 , we incurred an additional$2.0 million in interest expense as compared to the three months endedSeptember 30, 2020 . As discussed above, we issued the$540.0 million 2029 Notes inMarch 2021 and used net proceeds and cash on hand to partially repay$517.0 million of existing indebtedness under our Term B-2 Loan, Revolver, and Senior Notes. This increase in interest expense was primarily attributable to an increase in the outstanding indebtedness upon which interest is computed. This increase was partially offset by: (i) a reduction in outstanding variable-rate indebtedness upon which interest is computed; and (ii) the replacement of a portion of our fixed-rate debt with fixed-rate debt at a lower interest rate. Income Taxes (Benefit) As discussed above, we used a discrete effective tax rate method to calculate taxes for the three months endedSeptember 30, 2021 . For the three months endedSeptember 30, 2021 , the effective income tax rate was 173.5%. The effective income tax rate for the quarter was impacted by a decrease in the estimated annualized effective tax rate. For the three months endedSeptember 30, 2020 , the effective income tax rate was 20.0%, which was determined using a forecasted rate based upon projected taxable income for the full year along with the impact of discrete items for the quarter. 40 -------------------------------------------------------------------------------- Table of Contents Liquidity and Capital Resources Liquidity Although we have been, and expect to continue to be, negatively impacted by the COVID-19 pandemic, we anticipate that our business will continue to generate sufficient cash flow from operating activities and we believe that these cash flows, together with our existing cash and cash equivalents and our ability to draw on current credit facilities, will be sufficient for us to meet our current and long-term liquidity and capital requirements. However, our ability to maintain adequate liquidity is dependent upon a number of factors, including our revenue, macroeconomic conditions, the length and severity of business disruptions caused by the COVID-19 pandemic, our ability to contain costs and to collect accounts receivable, and various other factors, many of which are beyond our control. Moreover, if the COVID-19 pandemic continues to create significant disruptions in the credit or financial markets, or impacts our credit ratings, it could adversely affect our ability to access capital on attractive terms, if at all. We also expect the timing of certain priorities to be impacted, such as the pace of our debt reduction efforts and the delay of certain capital projects. The Credit Facility as amended, is comprised of the$250.0 million Revolver and the Term B-2 Loan with$677.0 million outstanding atSeptember 30, 2021 . During the nine months endedSeptember 30, 2021 , and in connection with the issuance of the 2029 Notes we: (i) repaid$40.0 million outstanding under our Revolver; and (ii) repaid$77.0 million outstanding under the Term B-2 Loan. We subsequently made additional borrowings and payments against our Revolver. As ofSeptember 30, 2021 , we had$677.0 million outstanding under the Term B-2 Loan and$42.7 million outstanding under the Revolver. In addition, we had$6.1 million in outstanding letters of credit. As ofSeptember 30, 2021 , total liquidity was$264.1 million , which was comprised of$201.3 million available under the Revolver and$62.8 million in cash and cash equivalents. For the nine months endedSeptember 30, 2021 , we increased our outstanding debt by$51.5 million due to: (i) the previously discussed debt refinancing activities; (ii) additional draw down and repayment activity under our Revolver; and (iii) the addition of our$75.0 million accounts receivable facility, discussed below. As ofSeptember 30, 2021 , our Consolidated Net First Lien Leverage Ratio was 3.0 times as calculated in accordance with the terms of our Credit Facility, which place restrictions on the amount of cash, cash equivalents and restricted cash that can be subtracted in determining consolidated first lien net debt. Accounts Receivable Facility OnJuly 15, 2021 , we and certain of our subsidiaries entered into a$75.0 million accounts receivable securitization facility (the "Receivables Facility") to provide additional liquidity, to reduce our cost of funds and to repay outstanding indebtedness under the Credit Facility. The documentation for the Receivables Facility includes (i) a Receivables Purchase Agreement (the "Receivables Purchase Agreement") entered into by and amongAudacy Operations, Inc. , aDelaware corporation and our wholly-owned subsidiary ("Audacy Operations"),Audacy Receivables, LLC , aDelaware limited liability company and our wholly-owned subsidiary, as seller ("Audacy Receivables"), the investors party thereto (the "Investors"), andDZ 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 , aDelaware limited liability company and our wholly-owned subsidiary ("Audacy NY"), andAudacy 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 of our wholly-owned subsidiaries (together with Audacy NY, the "Originators"),Audacy Operations and Audacy NY. 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: (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 41 -------------------------------------------------------------------------------- Table of Contents 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's 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. We have agreed to guarantee the performance obligations of Audacy Operations and the Originators under the Receivables Facility documents. We have 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 onJuly 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. AtSeptember 30, 2021 , we had outstanding borrowings of$75.0 million under the Receivables Facility. Amendment and Repricing -CBS Radio (Now Audacy Capital Corp. ) Indebtedness In connection with the Merger, we assumedCBS Radio's (nowAudacy Capital Corp.'s ) indebtedness outstanding under: (i) a credit agreement (the "Credit Facility") amongCBS Radio (nowAudacy Capital Corp. ), the guarantors named therein, the lenders named therein, andJPMorgan Chase Bank, N.A ., as administrative agent; and (ii) the Senior Notes (described below). The 2027 Notes During 2019, we and our finance subsidiary,Audacy Capital Corp. (formerly,Entercom Media Corp. ), issued$425.0 million in aggregate principal amount of senior secured second-lien notes dueMay 1, 2027 (the "2027 Notes"). Interest on the 2027 Notes accrues at the rate of 6.500% per annum and is payable semi-annually in arrears onMay 1 andNovember 1 of each year. A portion of the 2027 Notes was issued at a premium. The premium on the 2027 Notes will be amortized over the term under the effective interest rate method. As of any reporting period, the unamortized premium on the Notes is reflected on the balance sheet as an addition to the 2027 Notes. We used net proceeds of the offering, along with cash on hand and amounts borrowed under our Revolver, to repay$521.7 million of existing indebtedness under our term loan component previously outstanding (the "Term B-1 Loan"). Contemporaneous with this partial pay-down of the Term B-1 Loan, we replaced the remaining amount outstanding under the Term B-1 Loan with the Term B-2 Loan. The 2027 Notes are fully and unconditionally guaranteed on a senior secured second-lien basis by most of the direct and indirect subsidiaries ofAudacy Capital Corp. (formerly,Entercom Media Corp. ). The 2027 Notes and the related guarantees are secured on a second-lien priority basis by liens on substantially all of the assets ofAudacy Capital Corp. (formerly,Entercom Media Corp. ) and the guarantors. A default under the 2027 Notes could cause a default under the Credit Facility and/or the 2029 Notes. Any event of default, therefore, could have a material adverse effect on our business and financial condition. 42 -------------------------------------------------------------------------------- Table of Contents The 2027 Notes are not a registered security and there are no plans to register the 2027 Notes as a security in the future. As a result, Rule 3-10 of Regulation S-X promulgated by theSEC is not applicable and no separate financial statements are required for the guarantor subsidiaries. The Credit Facility The Term B-2 Loan requires mandatory prepayments equal to a percentage of Excess Cash Flow, subject to incremental step-downs, depending on the Consolidated Net Secured Leverage Ratio. The Excess Cash Flow payment is based on the Excess Cash Flow and the Consolidated Net Secured Leverage Ratio for the prior year. We made our first Excess Cash Flow payment in the first quarter of 2020. As ofSeptember 30, 2021 , we were in compliance with the financial covenant then applicable and all other terms of the Credit Facility in all material respects. Our ability to maintain compliance with our financial covenant under the Credit Facility is highly dependent on our results of operations. Currently, given the impact of COVID-19, the outlook is highly uncertain. Failure to comply with our financial covenant or other terms of our Credit Facility and any subsequent failure to negotiate and obtain any required relief from our lenders could result in a default under the Credit Facility. We will continue to monitor our liquidity position and covenant obligations and assess the impact of the COVID-19 pandemic on our ability to comply with the covenants under the Credit Facility. Any event of default could have a material adverse effect on our business and financial condition. We may seek from time to time to amend our Credit Facility or obtain other funding or additional funding, which may result in higher interest rates on our debt. However, we may not be able to do so on terms that are acceptable or to the extent necessary to avoid a default, depending upon conditions in the credit markets, the length and depth of the market reaction to the COVID-19 pandemic and our ability to compete in this environment. The Credit Facility - Amendment No. 5 OnJuly 20, 2020 ,Audacy Capital Corp. (formerly,Entercom Media Corp. ), our wholly-owned subsidiary, entered into an amendment ("Amendment No. 5") to the Credit Agreement, datedOctober 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 andJPMorgan Chase Bank, N.A ., as administrative agent and collateral agent. Amendment No. 5, among other things: (a) amended our 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) endingDecember 31, 2020 ; (ii) adding a new minimum liquidity covenant of$75.0 million untilDecember 31, 2021 , or such earlier date as we 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 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 endingJune 30, 2020 ,September 30, 2020 , andDecember 31, 2020 , for purposes of testing compliance with the ConsolidatedNet 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 endedMarch 31, 2020 , for the fiscal quarters endingJune 30, 2019 ,September 30, 2019 , andDecember 31, 2019 , respectively. The Credit Facility - Amendment No. 6 OnMarch 5, 2021 ,Audacy Capital Corp. (formerly,Entercom Media Corp. ) our wholly owned subsidiary, entered into an amendment ("Amendment No. 6") to the Credit Agreement, datedOctober 17, 2016 (as previously amended, the "Existing 43 -------------------------------------------------------------------------------- Table of Contents Credit Agreement" and, as amended by Amendment No. 6, the "Credit Agreement"), with the guarantors party thereto, the lenders party thereto andJPMorgan 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. 2021 Debt Refinancing - The 2029 Notes During the first quarter of 2021, we and our finance subsidiary,Audacy Capital Corp. (formerly,Entercom Media Corp. ), issued$540.0 million in aggregate principal amount of senior secured second-lien notes dueMarch 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 onMarch 31 andSeptember 30 of each year. We 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 our$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 which will be amortized over the term of the 2029 Notes under the effective interest method; 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. We also incurred$0.5 million of costs which were classified within refinancing expenses. The 2029 Notes are fully and unconditionally guaranteed on a senior secured second priority basis by each of the direct and indirect subsidiaries ofAudacy Capital Corp. (formerly,Entercom Media Corp. ). A default under the 2029 Notes could cause a default under our Credit Facility or the 2027 Notes. Any event of default, therefore, could have a material adverse effect on our business and financial condition. The 2029 Notes are not a registered security and there are no plans to register the 2029 Notes as a security in the future. As a result, Rule 3-10 of Regulation S-X promulgated by theSEC is not applicable and no separate financial statements are required for the guarantor subsidiaries. The Senior Notes Simultaneously with entering into the Merger and assuming the Credit Facility onNovember 17, 2017 , we also assumed the Senior Notes that were set to mature onNovember 1, 2024 in the amount of$400.0 million (the "Senior Notes"). The Senior Notes, which were originally issued byCBS Radio (nowAudacy Capital Corp. ) onOctober 17, 2016 , were valued at a premium as part of the fair value measurement on the date of the Merger. The premium on the Senior Notes was amortized over the term under the effective interest rate method. As of any reporting period, the unamortized premium on the Senior Notes was reflected on the balance sheet as an addition to the$400.0 million liability. As discussed above, during the nine months endedSeptember 30, 2021 , we issued a call notice to redeem our Senior Notes with an effective date ofApril 10, 2021 . We incurred interest on the Senior Notes until the redemption date. In connection with the redemption, we deposited the following funds to satisfy our obligations under the Senior Notes and discharge the Indenture governing the Senior Notes: (i)$400.0 million to redeem the Senior Notes in full; (ii)$14.5 million for a call premium for the early retirement of the Senior Notes; and (iii)$12.8 million for accrued and unpaid interest throughApril 10, 2021 . As a result of the refinancing, we recorded an$8.2 million loss on extinguishment of debt that included the call premium, the write off of unamortized debt issuance costs, and the write off of unamortized premium on the Senior Notes. Operating Activities Net cash flows provided by operating activities were$45.6 million and$82.0 million for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. 44 -------------------------------------------------------------------------------- Table of Contents The cash flows from operating activities decreased primarily due to an increase in net investment in working capital of$98.6 million . This decrease was partially offset by an increase in net income, as adjusted for certain non-cash charges and income tax benefits of$61.2 million . The increase in investment in working capital is primarily due to the timing of: (i) collections of accounts receivable; (ii) settlements of accounts payable and accrued liabilities; (iii) settlements of accrued interest expense; (iv) settlements of other long-term liabilities; and (v) settlements of prepaid expenses. The increase in net income, as adjusted for certain non-cash charges and income tax benefits is primarily attributable to: (i) a reduction in net loss of$54.8 million ; (ii) a reduction in deferred tax benefits of$22.0 million ; and (iii) a reduction in impairment loss of$15.7 million Investing Activities Net cash flows used in investing activities were$53.4 million and$11.5 million for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , respectively During 2021, net cash flows used in investing activities increased primarily due to: (i) an increase to additions to tangible and intangible assets of$17.4 million ; (ii) an increase in purchase of businesses and audio assets of$15.3 million ; and (iii) a reduction in proceeds from sales of radio stations and other assets of$9.3 million . Financing Activities Net cash flows provided by financing activities were$39.7 million for the nine months endedSeptember 30, 2021 . Net cash flows used in financing activities were$58.5 million for the nine months endedSeptember 30, 2020 . During 2021, net cash flows provided by financing activities increased primarily due to: (i) an increase in the proceeds from issuance of long-term debt of$540.0 million ; (ii) an increase in the proceeds from the Receivables Facility of$75.0 million ; and (iii) a reduction in payments against the Revolver of$62.0 million . These increases in cash inflows were partially offset by: (i) an increase in cash outflows related to the redemption of the Senior Notes of$400.0 million ; (ii) a reduction in borrowings under the Revolver of$94.7 million ; (iii) an increase in payments of long-term debt of$62.4 million ; (iv) an increase in payments of call premiums and other fees of$14.5 million ; and (v) an increase in payments for debt issuance costs of$9.4 million . Dividends Following the payment of the quarterly dividend payment for the first quarter of 2020, we suspended our quarterly dividend program. Any future dividends will be at the discretion of the Board based upon the relevant factors at the time of such consideration, including, without limitation, compliance with the restrictions set forth in our Credit Facility, the 2027 Notes and the 2029 Notes. Share Repurchase Program During the nine months endedSeptember 30, 2021 , we did not repurchase any shares under our share repurchase program (the "2017 Share Repurchase Program"). As ofSeptember 30, 2021 ,$41.6 million is available for future share repurchases under the 2017 Share Repurchase Program. Income Taxes During the nine months endedSeptember 30, 2021 , we did not pay any federal income taxes. During the nine months endedSeptember 30, 2021 , we received a net refund of$0.3 million in state income taxes. We do not anticipate making any federal income tax payments in 2021 primarily as a result of the availability of NOLs to offset federal tax due. For federal income tax purposes, the acquisition ofCBS Radio was treated as a reverse acquisition which caused us to undergo an ownership change under Section 382 of the Internal Revenue Code ("Code"). This ownership change will limit the utilization of our NOLs for post-acquisition tax years. We may need to make additional state estimated tax payments during the remainder of the year. 45 -------------------------------------------------------------------------------- Table of Contents Capital Expenditures Capital expenditures, including amortizable intangibles, for the nine months endedSeptember 30, 2021 were$39.3 million . We anticipate that total capital expenditures in 2021 will be between$70 million and$75 million as we increase our investment in the rapidly growing digital audio advertising market. Contractual Obligations As ofSeptember 30, 2021 , there have been no net material changes in the total amount from the contractual obligations listed in our Form 10-K for the year endedDecember 31, 2020 , as filed with theSEC onMarch 1, 2021 , other than as described below. As discussed above in the liquidity section, during the nine months endedSeptember 30, 2021 , we issued the$540.0 million 2029 Notes and used net proceeds to: (i) fully redeem the$400.0 million Senior Notes due to mature in 2024; (ii) repay$77.0 million under the Term B-2 Loan; and (iii) repay$40.0 million under the Revolver. Additionally, we also entered into a$75.0 million accounts receivable securitization facility to provide additional liquidity. As a result of this activity and other borrowings and payments against our Revolver, the amounts outstanding under our long-term debt obligations increased by$51.5 million during the nine months endedSeptember 30, 2021 and the maturity of our debt was pushed out to later periods. As discussed above, during the nine months endedSeptember 30, 2021 , we acquired Podcorn. This acquisition included cash due at closing as well as contingent consideration. The fair value of the contingent consideration, which is included in other long-term liabilities, is$8.4 million atSeptember 30, 2021 . Off-Balance Sheet Arrangements As ofSeptember 30, 2021 , we did not have any material off-balance sheet transactions, arrangements or obligations, including contingent obligations. We do not have any other relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements or other contractually narrow or limited purposes as ofSeptember 30, 2021 . Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. Critical Accounting Policies There have been no material changes to our critical accounting policies from the information provided in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies, in our Annual Report on Form 10-K for the year endedDecember 31, 2020 , as filed with theSEC onMarch 1, 2021 . Goodwill Valuation Risk We no longer have any goodwill attributable to the broadcast reporting unit. 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. QLGG represents a separate division one level beneath the single operating segment and its own reporting unit. Future impairment charges may be required on our goodwill attributable to our podcast reporting unit and the QLGG reporting unit, as the discounted cash flow model is subject to change based upon our performance, peer company performance, overall market conditions, and the state of the credit markets. We continue to monitor these relevant factors to determine if an interim impairment assessment is warranted. A deterioration in our forecasted financial performance, an increase in discount rates, a reduction in long-term growth rates, a sustained decline in our stock price, or a failure to achieve analyst expectations could all be potential indicators of an impairment to the remaining goodwill attributable to the podcasting reporting unit and the QLGG reporting unit, 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. 46 -------------------------------------------------------------------------------- Table of Contents As ofSeptember 30, 2021 , we evaluated whether the facts and circumstances and available information result in the need for an impairment assessment for any goodwill, and concluded no assessment was required. We will continue to evaluate the impacts of the COVID-19 pandemic on our business, including the impacts of overall economic conditions, which could result in the recognition of an impairment charge in the future. Broadcasting License Risk After the annual impairment test conducted on our broadcasting licenses in the fourth quarter of 2020 in which 38 markets were written down to fair value, the results indicated that there were 41 units of accounting where the fair value exceeded their carrying value by 10% or less. In aggregate, these 41 units of accounting had a carrying value of$2,160.6 million atDecember 31, 2020 . As a result of the Urban One Exchange, in which we recorded an additional$23.2 million of broadcasting licenses at fair value, this figure was increased to$2,183.8 million atSeptember 30, 2021 . If overall market conditions or the performance of the economy deteriorates, advertising expenditures and radio industry results could be negatively impacted, including expectations for future growth. This could result in future impairment charges for these or other of our units of accounting, which could be material. The COVID-19 pandemic increases the uncertainty with respect to such market and economic conditions and, as such, increases the risk of future impairment. As ofSeptember 30, 2021 , we evaluated whether the facts and circumstances and available information result in the need for an impairment assessment for any of our broadcasting licenses, and concluded no assessment was required. We will continue to evaluate the impacts of the COVID-19 pandemic on our business, including the impacts of overall economic conditions, which could result in the recognition of an impairment charge, which could be material, in the future. ITEM 3. Quantitative And Qualitative Disclosures About Market Risk We are exposed to market risk from changes in interest rates on our variable-rate senior indebtedness (the Term B-2 Loan and Revolver). From time to time, we may seek to limit our exposure to interest rate volatility through the use of derivative rate hedging instruments. As ofSeptember 30, 2021 , if the borrowing rates under LIBOR were to increase 1% above the current rates, our interest expense on: (i) our Term B-2 Loan would increase$5.7 million on an annual basis, including any increase or decrease in interest expense associated with the use of derivative rate hedging instruments as described below; and (ii) our Revolver would increase by$2.5 million , assuming our entire Revolver was outstanding as ofSeptember 30, 2021 . Assuming LIBOR remains flat, interest expense in 2021 versus 2020 is expected to be higher primarily due to the replacement of a portion of our variable-rate debit with fixed-rate debt at a higher interest rate. We may seek from time to time to amend our Credit Facility or obtain additional funding, which may result in higher interest rates on our indebtedness and could increase our exposure to variable-rate indebtedness. During the quarter endedJune 30, 2019 , we entered into the following derivative rate hedging transaction in the notional amount of$560.0 million to hedge our exposure to fluctuations in interest rates on our variable-rate debt. This rate hedging transaction is tied to the one-month LIBOR interest rate. Type Fixed Notional Amount Of Notional Effective LIBOR Expiration Amount After Hedge Amount Date Collar Rate Date Decreases Decrease (amounts (amounts (in millions) (in millions) Collar$340.0 Jun. 25, 2019 Cap 2.75% Jun. 28, 2024 Jun. 28, 2022$ 220.0 Floor 0.402% Jun. 28, 2023 $ 90.0 Total$560.0 The fair value (based upon current market rates) of the rate hedging transaction is included as derivative instruments in long-term liabilities as the maturity dates on this instrument are greater than one year. The fair value of the hedging transaction is affected by a combination of several factors, including the change in the one-month LIBOR rate. Any increase in the one-month LIBOR rate results in a more favorable valuation, while any decrease in the one-month LIBOR rate results in a less favorable valuation. 47 -------------------------------------------------------------------------------- Table of Contents Our credit exposure under our hedging agreement, or similar agreements we may enter into in the future, is the cost of replacing such agreements in the event of nonperformance by our counterparty. To minimize this risk, we select high credit quality counterparties. We do not anticipate nonperformance by such counterparties, but could recognize a loss in the event of nonperformance. Our derivative instrument liability as ofSeptember 30, 2021 was$1.2 million . From time to time, we invest all or a portion of our cash in cash equivalents, which are money market instruments consisting of short-term government securities and repurchase agreements that are fully collateralized by government securities. When such investments are made, we do not believe that we have any material credit exposure with respect to these assets. As ofSeptember 30, 2021 , we did not have any investments in money market instruments. Our credit exposure related to our accounts receivable does not represent a significant concentration of credit risk due to the quantity of advertisers, the minimal reliance on any one advertiser, the multiple markets in which we operate and the wide variety of advertising business sectors. See also additional disclosures regarding liquidity and capital resources made under Liquidity and Capital Resources in Part 1, Item 2, above. ITEM 4. Controls And Procedures Evaluation of Controls and Procedures We maintain "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) that are designed to ensure that: (i) information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in theSecurities and Exchange Commission's rules and forms; and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our President/Chief Executive Officer and Executive Vice President/Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 48
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