Ladies and gentlemen, thank you for standing by, and welcome to the iHeartMedia Q2 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference to your speaker today, Kareem Chin, Senior Vice President of Investor Relations. Thank you. Please go ahead, sir.

Good morning, everyone. Thank you for taking the time to join us on our second quarter 2020 earnings call. Joining me for today’s discussion are Bob Pittman, our Chairman and CEO; and Rich Bressler, the President, COO and CFO. At the conclusion of our prepared remarks, management will take your questions. Please note that in addition to our press release, we have an accompanying investor presentation that you can follow along with our remarks. Before we begin, let me quickly cover the Safe Harbor language on Slide 2. During this call, we will make forward-looking statements, including the current and expected impact of COVID-19 on the company’s liquidity, financial position and results of operations. These estimates are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ from these expectations and assumptions, and these risks and uncertainties are discussed in more detail in our filings with the SEC. In addition, as noted in our March 26, 2020 press release, due to the uncertainty surrounding the impact of COVID-19, we reiterate that the company will not be providing full year 2020 guidance on this call. During this call, we will refer to certain non-GAAP financial measures. Reconciliations between our GAAP and non-GAAP financial measures can be found in our earnings release or in the presentation available on our website. And now I’ll turn the call over to Bob.

Thanks, Kareem, and good morning, everybody. Thank you for joining our second quarter 2020 earnings conference call. The challenges that we and most of the world have faced since March due to COVID-19 were unprecedented and had a severe negative impact on our revenue through the sudden and dramatic decline in advertising demand in the quarter. Before Rich and I get into a discussion of the specifics of the second quarter and even into the just completed month of July, there are four points we want to highlight. First, broadcast radio remains the number one reach medium in the U.S. and our other audio platforms are also strong with consumers. By consumer reach, we’re the number one audio company in America by a wide margin. The consumer reach of broadcast radio during the pandemic lockdown still exceeds both TV and digital. The only direct measurement of our listening, the listening on our digital platforms, showed an overall increase year-over-year as well as an almost 20% increase on home CE devices, including smart TVs, gaming platforms and smart speakers. And our podcast listening was also up with a 62% increase in downloads year-over-year for Q2. We believe this resilience in radio listening is further proof that the consumer depends on radio in times of need for both the information and the companionship that’s at the core of the radio experience and is the inherent strength of broadcast radio as a consumer medium. And we believe the strength of our podcast listening is an indication that podcasting is providing a similar benefit and it’s an extension of the radio listing experience. So it’s no surprise that the two largest podcast publishers, iHeart and NPR, are both major broadcast radio companies, and we both have a 2:1 lead over the next largest publisher.…

Thanks, Bob. As you’re all aware, our second quarter results reflect a severe impact that COVID has had on advertising demand. The pandemic caused a significant economic downturn, which in April, resulted in the steepest year-over-year revenue declines we have witnessed, with modest sequential improvement in each of the months that followed as reopenings in certain markets were delayed due to resurgent COVID cases and protests related to civil unrest in many parts of the country. As we look ahead, it’s important to remember the power of audio before COVID began, when we were in a healthy business environment. That power translated into the strong financial results that we saw in our business after we emerged from our restructuring in May of last year, all the way through February of this year before our momentum was interrupted. And while we can’t predict how fast or what shape the economic return will take, we know that it will come back from this period of dislocation. And we have to have the right set of products and services in place, and the users of those services to take full advantage and benefit from it in ways that we were prepared to in the past. As Bob mentioned, our strategy over the last several years has been focused on developing and investing in our multiple platforms, sales infrastructure and data and analytics capabilities to continually strengthen our position as the number one audio company in the United States by reach. We believe that the diversified offering we have today, combined with our focus on cost and capital structure management, enables our business to be more resilient during this downturn and positions us favorably to capitalize on the continuing advertising recovery. In terms of our second quarter results, if you turn to Slide 6…

[Operator Instructions] Our first question comes from Steven Cahall of Wells Fargo. Your line is open.

Thanks. Rich, a couple for you. And then Bob, I’ve got a podcasting question. Rich, maybe just how should we think about being EBITDA or free cash flow positive in the second half of the year based on all the proactive cost reductions that you’ve taken, which I think you probably didn’t get a lot of the benefits of in the second quarter? And maybe included in that, can you give us an indication as to what you think the cash interest is going to look like in the back half of the year?

Sure. Thanks, Steven. Good morning, everybody. So just got a couple of things. I’m not going to make any specific comments about cash flow for the second half of the year because I think that would be tantamount to giving guidance, quite frankly, out there. But if you kind of think about – and I think what’s really great about this business – and when Bob articulated in his opening remarks the business, what’s happening on an operating basis, I don’t think any of us should lose sight of the fact that the cash flow characteristics that this business has. If you look at Q2, we – and again, none of us are happy with these results, but there’s a reality of operating in the pandemic. While we declined 47% on revenue, our EBITDA was down a little over $260 million or $270 million for Q2, so significantly less in revenue. But I think what points to the cash flow part of the business is we only used – and I don’t ever want to use a dollar of cash, but we only used $6.77 million on free cash flow, which I think is a pretty good free cash flow performance considering the headwinds we have on revenue. So I would just point to that without giving any specific guidance for the rest of the year and the fact that we’re continuing to aggressively manage capital expenditures. As we reiterated, our guidance is of $75 million to $95 million, the low working capital. And again, the fact that we effectively have zero cash taxes this year, the largest part of which is driven by the cash tax savings for interest deductions that we get as a result of the CARES Act and also our ability to defer employee taxes for – employee taxes also as a result of the CARES Act.

And cash interest?

Well, look, our weighted average cost of debt at June 30, so I think you guys can compute, this is about 5.3% overall. And so I would just – we’ve got about $5.8 billion of total debt. I think if you go to Page 11 of the investor deck, we break it down kind of piece by piece. And I think you guys can look through that and compute the number there.

Great. And then on capital structure, I mean we’ve seen some peers that have been impacted by COVID look at sort of strategic partners for preferred types of investments. You guys have a lot of liquidity runway. So I’m just wondering how you think about the capital structure and whether you think this is an opportune time to sort of talk to strategic partners for anything like that. Or do you just really like the liquidity runway that you have?

Well, taking the last part of your question first. I think we’ve done a nice job in terms of the cap structure liquidity runway. And I think in our opening remarks, Bob and I pointed out that whatever your time period of the recovery, whatever your time period of the acceleration, of the return of advertising, whether that’s the end of this year or 2021, we’ve got a capital structure that’s built to endure those periods of time. And again, I won’t repeat myself, but I think the second quarter is just very instructive in a positive way about the free cash flow and our ability to continue to weather any downturn here in the capital structure there. We – Bob, myself, the rest of the management team, our Board of Directors, we have one objective here, which is to drive the value for stakeholders. It’s to drive the equity value of this company. So we continue to evaluate it. But again, we have the benefit of having a capital structure and a liquidity position, Steve, as you pointed out, that we don’t need to do anything unless we think it’s going to be value-accretive for our stakeholders.

Yes, thanks. And then maybe just, Bob, one on podcasting. I feel like we’d be remiss not to maybe just talk about the competitive dynamics with Spotify. How do you think about that relationship? Would you sell them exclusive content at the right price? Will you continue to make your content available on all platforms, including Spotify? How do we just think about those competitive dynamics? Thanks.

Yes. Look, I’ve mentioned in mind there are really two models for podcasting. Ours is a distributed content model. We want our content available anywhere a consumer might be to make it easy for them to consume it. We would not sell our products exclusively. We think it – one, it limits the size of the audience. And for creators, I mean most creators want to create a hit podcast. I guess there’s some amount of money at which they said they’d rather have the money than create a hit podcast. But I think that’s the goal. And I think when you – and so therefore, as you attract more creators, the more – the bigger the audience you can offer them. And I think the other avenue is that advertisers, if you’re advertiser-supported, really demand the biggest audience possible. If you go behind the paywall, I certainly – you can justify it as you’re going to help build some other service, but we’ve yet to see success with that anywhere. So I think we like the strategy we have. We’re really pleased with the growth we’ve had on podcasting. If you think about it, way back when we were about 5 million of unique users, Stuff Media was about 5 million, we acquired them. So combined, we have about 10 million. We’ve more than doubled that. So we’ve not bought our way to the audience size we have. We built most of it. And I think that was our goal is to build this platform that can create hit podcast after hit podcast. And of course, one of our not-so-secret weapons is that we’re able to use all of our broadcasting reach to build podcast, and we’ve had great success with that and continue to use that in new and innovative ways. So we like the model. We think we’re in the right place with the right model. We’re certainly with the only model that’s proven it can generate real profits and real growth. So we’re sticking with it, and as you could tell, driving forward with it quite aggressively.

Great, thank you.

Our next question comes from Zack Silver of B. Riley. Your line is open.

Hi, great. Thanks for taking the question. The first one, I know you said that you were not going to talk about forward guidance, but you did give the revenue for July, how that was pacing. And I just wanted to first ask if you could point specifically to what’s driving the recovery, both in terms of the revenue lines and the advertiser categories.

I – well, I’ll let Rich jump in on that. But I think we’re seeing there is some demand. Some return in advertising demand, I think, is the primary driver of it. I think when the pandemic began, we saw advertisers, they could – just pulled all the chips off the table and said, "Let’s wait and see what’s happening." I think they’re beginning to just get a flavor of where it’s going, what’s working, what’s not, where they want to invest, how they want to build their business back. One of, I think, the encouraging things is that almost every business now has to think about reopening or at least selling themselves again to the consumer. And radio has historically been the place that people have used for any opening, grand opening, reopening, because we do get the word out quickly. We have the number one reach. If you think about what radio is, it’s your companion telling you what’s going on in the world on a continuing basis and obviously a business offering a new service per pickup. We’ve opened our doors again. We’ve got a new service for you. The brands redefined is the perfect place to get that into the consumer’s mind. So we think that radio will be a beneficiary of this. And we think that’s probably behind the return in the advertising demand we’ve seen so far, and our expectations will continue. Now I think we’ve also built out capabilities that allow us to match what the advertiser needs. We didn’t get into it in the call but we have in previous calls that we’ve really built out our data capabilities, our analytics capabilities, so that we begin to look more like the capabilities offered by the major – and the digital giants, the major digital players. We think that allows us to even be attractive to people who say, "I’m looking for the analytical approach to advertising, the performance advertising." And now we have those capabilities. We continue to build them out even during this pandemic. And we have been able to even push those kinds of capabilities over into our podcasting as well, which I think puts us in a unique position. Richard, do you want to add something?

Yes. And Bob, just to – Zack, thanks for the question again, and just to add on to that just for a minute. Overall, and this won’t surprise you, a couple of simple statements and then a couple – give you a little more detail on categories. Placements are increasing, quite frankly, and cancellations are decreasing, and we’ve seen that since the start of the pandemic. In the beginning of the pandemic, clearly, national for us took a bigger hit, and we’ve seen that start to reverse itself. And I think this goes to Bob’s point. As bigger advertisers, bigger brands are coming back into the marketplace, it’s been interesting. And I’m sure we’ve all read the same things, but whether it’s today or over the last couple of days, the number of articles, particularly in the Wall Street Journal, that have talked about CEOs that just said, "Okay. We’re going to be in this operating environment for a while. So we need to learn how to run our companies in this operating environment." And we’re starting to see some of that come into the marketplace. And you see that in numbers and the trends that we just gave. And if you look at specific categories that have done better than others, it’s probably the right way to say it. Things – I don’t think any of these will surprise anybody on the call. Categories like CPG, consumer product group, home improvement, insurance, financial services, medical health care, those have clearly been categories that have done better than categories like entertainment, which has been a nice category for us of the years. Although having said that, we’ve done very well with the streaming services, whether it’s the Netflix, the HBO Max, the new NBC service out there, Amazon along the way. So again, we do have some bright spots out there. And all of those take advantage of the new capabilities that Bob touched upon in terms of our data-infused offering. And clearly, podcasting, as we’ve just touched upon also on the first question, continue to lead the pack, not just for us but, quite frankly, I think in all medium – all media-related businesses today.

Can I add one more thing? I also think that as you’re analyzing what’s going on in the advertising world, we see two trends that are emerging. One, either the advertiser wants a big idea, and we’re doing a lot more brainstorming with CMOs and marketing departments about new approaches, new ideas, new things they need to do that are very specific to their situation, sort of think about it as custom solutions. And fortunately, we built out that kind of marketing support and ideation capability in our company over the past four or five years. And the other side of it is, and they’re looking for or they’re looking for performance. I’m going to spend a dollar. I need to maximize the value of that dollar like I never had before. Clearly, the smart audio capabilities we have with the data analytics help enormously there. And also, we hate to say it, but it is an advantage for the advertiser is that if you think about radio and TV historically, they both deliver about the same impact at the same weight level. However, radio is about 1/3 the price of TV per person reach. So if people are looking for efficiency, again, radio has a real advantage there. And finally, I think as you think about reach in the old days – 5, 10 years ago, TV was the big reach medium. Today, radio is the big reach medium. And so anybody that’s putting together a campaign that has gone quiet or has been working segments instead of the mass realizes right now, they got to tell everybody something. And again, that reach becomes probably more important now than it has in recent times.

Got it. That’s helpful. And then one more if I could, just around sort of the strategy of – clearly, there’s good demand for advertising on podcasts. And one of the things that you guys have talked about before is using podcast to get more advertisers involved in broadcast radio. Just wondering if you can talk about how the current state of affairs may have impacted that strategy, and maybe what the attach rates on advertisers using podcasts are also coming in to use broadcast buys and some other that.

We haven’t announced anything like that, so I don’t want to get into that specific information. But I will tell you that I think that they continue – that people are interested in podcasting. They certainly should be interested in radio because, to us, it winds up being sort of the same thing. I think it’s no accident that NPR and iHeart go back and forth as to who’s number one overall and that we have a 2:1 lead over the next largest podcaster because it is, to me, the equivalent of radio on demand, and it’s very much the radio form. We find that in successful podcasts, it’s very host driven just like radio, that people want that companionship. They sort of like somebody keeping them company. They like the conversation even – it’s like telling them a story. They like hearing that voice. So we sort of treat podcasting and radio as one experience expressed at a slightly different way. And I think being able to not only do that creatively for the consumer but being able to do that for the advertiser is really a unique advantage that our company provides. And we are finding people, they either directly want to say, "Okay. Let’s do a campaign that’s all tied together. We’re doing this on broadcast, this on podcast, this on digital. We’re using smart audio here," and they’re using all of our capabilities, or as you correctly point out, for some people who sort of weren’t so interested in radio, they are interested in podcasting. And it’s the door for them to come into the company. Once they come into the company, we can expose them to the other assets we have, which can help drive their ideas. And we’ve had a number of successes there and really expect that to continue.

Got it. Thank you, both.

Thanks, Zack.

Your next question comes from Sebastiano Petti of JPMorgan. Your line is open.

Hi, thanks. Rich, you touched upon the decline in EBITDA on a dollar basis coming in a little bit better than the revenue decline, which demonstrates a lot of the cost savings initiatives that you have in place. Wanted to see if you can give us an update towards the $200 million run rate savings by the end of the year. Where are you on that today? And should we expect the decline in EBITDA to continue to narrow relative to revenue as we go through the rest of the year just given, I guess, some of the initiatives were kind of launched in 2Q?

Sure. Thanks, Sebastian. Look, again, just going back, I’m not going to – I think going to any detail on that would be tantamount to giving guidance, so I’m not going to do that. The only thing I will comment is we are and continue to be on track for our cost savings initiatives. And I think in Bob’s opening remarks, he talked about the $250 million number, which was $50 million, just to remind everybody, for the modernization efforts that we announced in the first quarter of this year. And just again, as a reminder, it’s in the press release, that is $100 million on an annual basis by the time you get to mid-2021 of $50 million this year and an additional $200 million that we articulated related to everything happening as a result of the virus and continue to be on track with that. Having said that, and I think Bob talked about this a little bit and touched upon in his opening remarks, we are taking a step back. And by the way, I’m sure like a lot of companies in America, and doing exactly what we’re supposed to be doing as people running this company: looking at our organization; looking at things like real estate, which is a significant cost in this company. That we’re already taking a hard look at real estate is also the modernization. We’re obviously taking a much harder look at it right now, just the realities of the way people are working, whether it’s Teams or Zooms or it’s all looking to work more remotely. T&E was not an insignificant expense for this company. We never disclosed exactly what it was. Clearly, we never expect T&E to come back anywhere near the levels that it was pre-pandemic. So just looking…

Could I have add one thing on that, Rich? Just to put a point on it, too. As managers, to be a great manager, I think you constantly have to experiment. You constantly have to change and move and find new ways to do things. This – as awful as this has been for our business, the one thing it’s done for us as managers, it’s allowed us to look hard at some different ways of doing business. And for example, there’s no way we would have ever taken the chance of saying, "Hey, let’s experiment by working from home for three months and put the whole company there to see what the impact is." But now that we’ve done it, we’ve been able to examine productivity by each group, by each employee. We’ve asked our employees what works better, what works – what’s worse. And we’ve been able from that to figure out some new ways of working, which I think will improve the company that we would have never known and never been able to reasonably test except through some disaster like this. So Rich and I are spending an enormous amount of our time with our management team, really examining everything we’re learning about how we operate and how we can operate better going forward. And I will tell you I was not a fan of a work-from-home company at all, but I’ve realized that there are some people in our company who can work as productively or more productively from home, and it has very beneficial financial impacts for us. So we’re examining everything. And again, it’s been one giant experiment, the positive side of it. And we have not wanted that to go without us really examining and learning a lot from it, which we have.

That’s great. And one quick follow-up on the digital. Just if you could unpack perhaps some of the moving parts within the digital bucket? Obviously, podcasting up 103% year-over-year but a sequential deceleration just overall in the digital category. So how should we be thinking about total listening hours on the iHeart – on the app as well as maybe some of the other buckets within that? Thank you.

Rich, you want to start? Or you want me to...

Yes. Why not start with that? Why not start with that, Sebastian? So we do – Bob articulated the strength of our podcasting business. And we talked about this in the first quarter, we talked about it now and it continues, that revenue is up over 100%. We don’t give a lot of details in terms of digital, but you kind of unpack it a little bit. And if you pulled podcasting out of that, the overall digital would be down dramatically better than the rest of our line. So I would say down high single digits, about double digit, somewhere overall in that 10% but continue to improve significantly. So I think if you look at the overall digital line ex podcasting, and I don’t think this will be any surprise, it’s doing dramatically better than pretty much any other advertising business has done right now in the United States, again, put aside just Facebook and their announced earnings and Google and some of the smaller players out there. So we feel very good about that and continue to see momentum overall in that business.

Can I also say that we have a wide range of digital services, too, for anyone who follows the company. We not only have streaming through the iHeartRadio app but allowing the consumer to hear our radio stations on a digital platform. And by the way, when they’re listening to it, sort of crazy. But when they listen to it on the iHeartRadio app, it’s with exactly the same program as AM/FM. There are many people who will buy us now for digital and we’ve fallen into a digital bucket. Now we hope the smart audio over time begins to blur of that distinction as it should. We also provide other digital services for our clients and have a robust suite of services that we offer. We have big digital sites. If you look at comScore, you see we’re one of the major players there. There’s the Z100.com. There are all sorts of other services we provide from other vendors as well, some we own, some we don’t. So it’s – we’ve got a pretty diverse offering there. And they all have disparate growth rates during this pandemic.

But – and one, by the way, listening. I just – I would want to reiterate what Bob talked about upfront like in his opening remarks again just not to these factors. We answered financially. Bob talked about products. But if you look at the in-home listening, whether it’s web, Roku, Alexa, Google, all up, and I think Bob went through a number of the percentages, all up very significantly during this period of time. So again, a silver lining as you look for silver linings during the pandemic is the consumer habit – consumer habit of in-home listening. And we don’t have any reason to believe that, that won’t stay with us in some form as we exit the pandemic.

Yes. Let me go back to – I’m going to add one more thing. Go back to the basics. The more devices you can receive a service on, the more listening you’ll get. And so for us, the weakest place for us has been – over the past 10 years, has been the home because I think people have moved to more digital devices as opposed to a freestanding AM/FM radio. And so for us, what we’ve done rather than trying to get people to make more AM/FM radios is to say, "Fine. Our products are not limited to AM/FM. We’ll build the product." And we were, as you know, one of the foundation services on Alexa when it launched. We had worked with Amazon on the development of that. And we tend to be there early, whether it’s with Comcast on their box, whether it was Alexa, as we’ve got a group that continues to work on those new locations. So if we build out all these capabilities for all these new devices, we know over time, as those devices grow, it gives us more listening, so very positive for us.

Your final question comes from Jim Goss of Barrington Research. Your line is open.

Thanks. iHeart has tended to have a different mix of radio revenues than the industry. Rather than 85-15, it might be more 60-40 in the split between national and local, or the other way around, the way I stated them. If you consider that, I imagine that traditional strength might have hurt you a little bit more in these last several months. And I wondered if you could go through those, the 50%, 49%, 41% decline, and talk about how that mix of revenue might have affected those, like which categories might have impacted what you’ve already reported.

We don’t do a lot of detail on that. We haven’t done the breakout side. I don’t want to do it here, but I think your point is correct that this company, one of the strengths we have is we’re actually the only company that delivers broadcast radio that has a real national reach. So they can – the advertisers can look at us not only for local but also as a national partner. And you’re correct, I think, as Rich pointed out earlier that we did see big advertisers had the luxury of these big dollars, just pull the chips off the table and hold it until they figure out what their new strategy is. And if any of you remember living through 9/11, which I do, is every advertiser pulled their dollars because they couldn’t figure out what message they should have in that new world. And it took them a little while to figure it out. I think the same happened here that for debt media or saving the money, they just couldn’t figure out what the creative message should be in this pandemic. Well, I think at this point, they have. And I think, of course, we had the double layer of the tragic death of George Floyd. And suddenly, advertisers again pulled back and said, "Wait a minute. What should my message be? And how should I communicate to the marketplace?" And so – but the good news is once they figure it out, and then they can turn the spigot back on. And as Rich pointed out to you, we are seeing that balance change a little bit. Initially, national hit harder than local. I’m beginning to see that more equalized.

Okay. And the television broadcast, as we follow, you have been pointing out that they’ve been doing sequentially better as you have since bottoming in April. I wonder if that could accelerate your gains as you recapture some of the things you had lost. Is that a reasonable conclusion?

I think we’re at this point...

Or at this reduced declines?

We’re reluctant to predict the slope and the recovery because what do we know in this world? But I think the trend lines would suggest that, but I’m just a little hesitant to be so certain. Rich, I don’t know if you have...

No. But the only thing I’d add to that, Bob, Jim, is just – the two things I would say on that is – and again, I’m sure the unemployment – the employment numbers, again, today, I think, looked a little better than most people’s expectations. So there are aspects of recovery there. But as things start to recover, they’re going to recover on – as we’ve talked about earlier in this call, they’re going to recover on a neighborhood-by-neighborhood or city-by-city or state-by-state basis. However, they’re going to recover, then all of a sudden – I think we can all agree on one thing: they’re not going to recover all of a sudden, snap your fingers and the whole country is going to recover at the same period of time. And if you think about just the ability to generate demand on a city-by-city basis or municipality-by-municipality basis, based on the facts and circumstances, there’s no better company in America that’s built for that. Our ability with our 850-plus radio stations in 150 markets to reach the local consumer with four advertisers that have messages that are tailored to them, important to them on a local basis. You could talk about TV broadcast. You could talk about the big digital players. No one else has that capability out there. And to be clear, we have that capability across the board, not just in our broadcast area. So we have the ability, as Bob has talked about a couple of times on the call. We talk about data-infused solutions and the ability to provide real-time solutions to advertisers. We can do that on a local basis also. These are just not national solutions. You talk about podcasting, and we always talk about our big national pods. We can provide local podcast and we do, which I don’t think people focus on enough that appeal to that local commuter, that local advertiser. So again, when you take a step back, I think an objective look at our asset base, an objective look at the way the economy is going to continue to come back, I don’t think there’s any company in America that’s more prepared to receive that advertising demand than we are.

And by the way, I would add one last point on that, which is that it’s not only they want to reach one market and not another market, but they might have one message they want for one market and another message for another market. And again, having – and the numbers actually, 160 markets we’re in, that we have feet on the street in those markets. They’re not affiliates. They’re our owned markets. So we have the capability to activate in the markets. We have an ability to do special creative for those markets. We’ve had some examples in the past where we’ve made hundreds of different commercials for one single advertiser because they wanted slightly different messaging in each market. We have the capability to do that. So it puts us in a unique position to be able to have both the national reach and the local capabilities as well. And we can even blend the two in ways and times like this that probably become more important than ever.

Okay. And one other thing in terms of the analysis of your cost structure and expense structure. Are you – do you think you’re able, through this, to effectively lower the breakeven plan such that, say, a year ago, your adjusted EBITDA margin was 28.8% in the quarter as opposed to the loss you created this quarter. Is that a number that can go higher with the cost structure adjustments on the mix of revenue changes that are going on?

Look, again, Jim, we’re not going to go back. And I think that would be tantamount to giving guidance. And by the way, one thing I should say, clearly, Bob and I and the rest of the team, Mike McGuinness and everybody and Kareem, we have the same frustration as you. We’d love to, quite frankly, give you – we’d love to give you more information. We’d love to give you more detailed information. But for all the reasons I think everybody knows and understands, we haven’t provided guidance. So it’s much of a frustration on our standpoint as we know you guys have to go back and do your jobs and build models. But so it has been painful. But the one thing I would say without making any specific comment is our objective here – again, it’s great shareholder value. That’s going to include improving our operating margins. It’s going to – it’s absolutely going to include improving our operating leverage with the cost savings that we announced, and directionally, the cost savings that Bob and I have talked about, I think, at length on this call from a directional standpoint. But we’re not going to do any further than that today.

And I mean the quarter, I was talking longer-term.

No. I think – so that’s what I’m saying, longer-term. We’re absolutely going to improve the operating margin of this company. It’s going to get better, but we’re not going to give guidance. And again, I think if you keep that focus, which we are on a great track. Just as a reminder, if you look at the track here alone, when we emerged from the restructuring for the second quarter of 2019 – I’m sorry, the second half of the Q2, Q3, Q4 2019, the beginning of 2020 before the pandemic hit, I think that’s very tangible evidence of the potential of this company and Bob and I as focused in terms of direction we’re going to take the capital structure and value creation.

And let me put a specific point out because I think your point is are these costs – are the cost savings here, they’re going to be permanent? The answer is yes. And some of what we’re discovering here, we’re never going to put back. I can’t imagine our real estate costs are ever going to be what they were. I know our T&E is not going to be what it was. I know we’re finding efficiencies and ways to do things we haven’t found before. So – and mathematically, you’re absolutely correct. If we lowered the cost bases for the company and we returned to the revenue levels we have before, mathematically, it will be a better margin.

All right. Well, thanks very much.

Great, thank you.

That was our final question. I will now return the call to our presenters.

Well, it’s Rich. I just want to – on behalf of Bob and myself and, quite frankly, the entire employee base of iHeart, which has been with us every step of the way, really just thank everybody for your support. Thanks for taking the time today, both the questions and to listen to the iHeart story. And thank you in advance for your continued support.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.