Expecting that Form 10-K filing for the 2017 fiscal year for iHeartMedia, the No. 1 owner of radio stations in the U.S.?
You’re going to have to wait a little bit for the company to submit the report to the Securities & Exchange Commission.
The delay has nothing to do with its Chapter 11 bankruptcy organization, or with anything involving the company’s operations in this hemisphere of planet Earth.
Rather, the holdup is “due to a delay in completion of the financial statements of Clear Media Ltd., an indirect non-wholly-owned subsidiary” of iHeart listed on the Hong Kong Stock Exchange.
As it understands, iHeart reports that “several” Clear Media employees are subject to an ongoing police investigation for misappropriation of funds. Clear Media is conducting additional procedures and processes, including a special investigation by forensic accountants and an external law firm appointed by Clear Media Ltd.’s board of directors and approved by the Audit Committee of Clear Channel Outdoor Holdings into the misappropriation of funds.
During the course of the special investigation, it was discovered that three bank accounts were opened in the name of Clear Media Ltd. entities, which were not authorized, and “certain transactions” were recorded. These matters have been referred to the police for investigation, iHeart notes.
Because of this, a 10-K filing cannot be made by the required filing date, with iHeart also noting that its Chapter 11 voluntary petition for reorganization requires the company’s full focus. Thus, it was “necessary and prudent” to delay the annual report’s filing.
“The company is working expeditiously to complete its financial statements and file its Annual Report as soon as possible, but because the special investigation is still ongoing, and the results of the special investigation are unknown, and because of competing demands on the company’s management as a result of the filing of the Chapter 11 Cases, the company is currently unable to determine when it will be able to do so,” iHeart notes.
There are some preliminary numbers that iHeart did provide with respect to its 2017 financial performance: The company expects to report consolidated revenue of approximately $6.171 billion for 2017 — down from $6.26 billion for 2016.
The approximately $89 million decrease in revenue is due primarily to the sale of iHeart’s Australia and Turkey businesses in 2016, and is partially offset by growth in the iHeartMedia segment as a result of an increase in national trade and barter, as well as higher spot sales.
Further, iHeart expects to report consolidated operating income of approximately $970 million for the year ended Dec. 31, 2017 compared to consolidated operating income of approximately $1.505 billion for FY2016.