UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~2018



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ~~1934.~~1934

For the transition period from to

Commission file number 000-24525

Cumulus Media Inc.

(Exact Name of Registrant as Specified in its Charter)



Delaware		~~36-4159663~~82-5134717
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3280 Peachtree Road, NW Suite ~~2300,~~2200, Atlanta, GA		30305
(Address of Principal Executive Offices)		(ZIP Code)

(404) 949-0700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No ¨

As of ~~November 2, 2017,~~August 13, 2018, the registrant had ~~29,306,374~~16,356,803 outstanding shares of common stock consisting of: (i) ~~29,225,765~~12,613,356 shares of Class A common stock; ~~and~~ (ii) ~~80,609~~3,743,447 shares of Class CB common ~~stock.~~stock in addition to 2,989,093 Series 1 warrants and 654,113 Series 2 warrants.

CUMULUS MEDIA INC.

INDEX



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2018 (Successor) and December 31, ~~2016~~	3
~~Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30,~~ 2017 ~~and 2016~~(Predecessor)	4
Condensed Consolidated Statements of ~~Cash Flows for~~Operations Period from June 4, 2018 through June 30, 2018 (Successor), Period from April 1, 2018 through June 3, 2018 (Predecessor), Period from January 1, 2018 through June 3, 2018 (Predecessor), and For the ~~Nine~~Three and Six Months Ended ~~September~~June 30, 2017 ~~and 2016~~(Predecessor)	5
Condensed Consolidated Statement of Stockholders’ (Deficit) Equity For the Periods Ended June 30, 2018 (Successor), June 3, 2018 (Predecessor) and December 31, 2017 (Predecessor)	7
Condensed Consolidated Statements of Cash Flows Period from June 4, 2018 through June 30, 2018 (Successor), Period from January 1, 2018 through June 3, 2018 (Predecessor) and the Six Months Ended June 30, 2017 (Predecessor)	8
Notes to Condensed Consolidated Financial Statements	79
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	3241
Item 3. Quantitative and Qualitative Disclosures About Market Risk	4962
Item 4. Controls and Procedures	4962
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	4962
Item 1A. Risk Factors	5063
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5063
Item 5. Other Information	63
Item 6. Exhibits	5164

Signatures	5265

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CUMULUS MEDIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

(Unaudited)


							Successor Company		Predecessor Company
	September 30, 2017			December 31, 2016			June 30, 2018		December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	69,431		$	131,259		$	37,444	$	102,891
Restricted cash	7,680			8,025			29,226		8,999
Accounts receivable, less allowance for doubtful accounts of $5,922 and $4,691 at September 30, 2017 and December 31, 2016, respectively	231,630			231,585
Accounts receivable, less allowance for doubtful accounts of $293 and $4,322 at June 30, 2018 and December 31, 2017, respectively							231,765		235,247
Trade receivable	4,679			4,985			5,195		4,224
Assets held for sale	30,150			30,150			80,000		—
Prepaid expenses and other current assets	58,140			33,923			30,163		42,259
Total current assets	401,710			439,927			413,793		393,620
Property and equipment, net	157,507			162,063			235,527		191,604
Broadcast licenses	1,539,718			1,540,183			935,976		1,203,809
Other intangible assets, net	90,369			116,499			209,765		82,994
Goodwill	135,214			135,214			—		135,214
Other assets	17,856			18,805			18,173		20,078
Total assets	$	2,342,374		$	2,412,691		$	1,813,234	$	2,027,319
Liabilities and Stockholders’ (Deficit)
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	96,526		$	96,241		$	112,836	$	36,157
Trade payable	3,640			4,550			3,267		—
Current portion of term loan							13,000		—
Total current liabilities	100,166			100,791			129,103		36,157
Term loan, net of debt issuance costs/discounts of $23,054 and $29,909 at September 30, 2017 and December 31, 2016, respectively	1,705,560			1,780,357
7.75% senior notes, net of debt issuance costs of $4,335 and $6,200 at September 30, 2017 and December 31, 2016, respectively	605,665			603,800
Term loan							1,287,000		—
Other liabilities	27,235			31,431			24,098		54
Deferred income taxes	393,939			388,050			42,401		—
Total liabilities not subject to compromise							—		36,211
Liabilities subject to compromise							—		2,687,223
Total liabilities	2,832,565			2,904,429			1,482,602		2,723,434
Commitments and Contingencies (Note 10)
Stockholders’ deficit:
Class A common stock, par value $0.01 per share; 93,750,000 shares authorized; 32,031,952 shares issued, and 29,225,765 shares outstanding, at both September 30, 2017 and December 31, 2016	320			320
Class C common stock, par value $0.01 per share; 80,609 shares authorized, issued and outstanding at both September 30, 2017 and December 31, 2016	1			1
Treasury stock, at cost, 2,806,187 shares at both September 30, 2017 and December 31, 2016	(229,310		)	(229,310		)
Additional paid-in-capital	1,626,237			1,624,815
Accumulated deficit	(1,887,439		)	(1,887,564		)
Total stockholders’ deficit	(490,191		)	(491,738		)
Total liabilities and stockholders’ deficit	$	2,342,374		$	2,412,691
Commitments and Contingencies (Note 14)
Stockholders’ equity (deficit):
Predecessor Class A common stock, par value $0.01 per share; 93,750,000 shares authorized; 32,031,054 shares issued, and 29,225,765 shares outstanding at December 31, 2017							—		320
Predecessor Class C common stock, par value $0.01 per share; 80,609 shares authorized issued and outstanding at December 31, 2017							—		1
Predecessor treasury stock, at cost, 2,806,187 shares at December 31, 2017							—		(229,310		)
Predecessor additional paid-in-capital							—		1,626,428
Predecessor accumulated deficit							—		(2,093,554		)
Successor Class A common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 12,396,395 shares issued and outstanding at June 30, 2018							—		—
Successor Class B common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 3,908,989 shares issued and outstanding at June 30, 2018							—		—
Successor additional paid-in-capital							325,652		—
Successor retained earnings							4,980		—
Total stockholders’ equity (deficit)							330,632		(696,115		)
Total liabilities and stockholders’ equity							$	1,813,234	$	2,027,319

See accompanying notes to the unaudited condensed consolidated financial ~~statements.~~statement.

CUMULUS MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except for share and per share data)

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net revenue $ 287,240
$ 286,136
$ 841,801
$ 841,859
Operating expenses:
Content costs 96,321
115,348
291,390
312,526
Selling, general and administrative expenses 119,293
117,387
354,189
352,474
Depreciation and amortization 15,208
21,957
47,610
68,023
Local marketing agreement fees 2,717
2,481
8,137
10,351
Corporate expenses (including stock-based compensation expense of $354, $735, $1,422 and $2,403, respectively) 10,853
9,960
32,281
34,028
Gain on sale of assets or stations (83 ) (94,014 ) (2,585 ) (97,155 )
Impairment of intangible assets —
—
—
1,816
Total operating expenses 244,309
173,119
731,022
682,063
Operating income 42,931
113,017
110,779
159,796
Non-operating expense:

Interest expense (35,335 ) (34,929 ) (103,742 ) (103,896 )
Interest income 34
139
106
364
Loss on early extinguishment of debt (1,063 ) —
(1,063 ) —
Other (expense) income, net (36 ) 882
(64 ) 1,598
Total non-operating expense, net (36,400 ) (33,908 ) (104,763 ) (101,934 )
Income before income taxes 6,531
79,109
6,016
57,862
Income tax expense (5,257 ) (32,788 ) (6,465 ) (24,904 )
Net income (loss) $ 1,274
$ 46,321
$ (449 ) $ 32,958
Basic and diluted earnings (loss) per common share (see Note 8, “Earnings (Loss) Per Share”):

Basic: Earnings (loss) per share $ 0.04
$ 1.58
$ (0.02 ) $ 1.12
Diluted: Earnings (loss) per share $ 0.04
$ 1.58
$ (0.02 ) $ 1.12
Weighted average basic common shares outstanding 29,306,374
29,275,111
29,306,374
29,268,885
Weighted average diluted common shares outstanding 29,306,374
29,275,111
29,306,374
29,268,885



	Successor Company			Predecessor Company
	Period from June 4, 2018 through June 30,			Period from April 1, 2018 through June 3,			Three Months Ended June 30,
	2018			2018			2017
Net revenue	$	95,004		$	190,245		$	290,531
Operating expenses:
Content costs	27,685			59,117			93,289
Selling, general and administrative expenses	38,719			85,097			120,506
Depreciation and amortization	4,379			10,065			16,120
Local marketing agreement fees	358			702			2,713
Corporate expenses (including stock-based compensation expense of $652, $65 and $530, respectively)	10,125			6,682			10,473
Loss on sale or disposal of assets or stations	—			147			104
Total operating expenses	81,266			161,810			243,205
Operating income	13,738			28,435			47,326
Non-operating (expense) income:
Reorganization items, net	—			496,368			—
Interest expense	(6,176		)	(132		)	(34,344		)
Interest income	4			21			35
Other income (expense), net	20			(276		)	(111		)
Total non-operating (expense) income, net	(6,152		)	495,981			(34,420		)
Income before income tax (expense) benefit	7,586			524,416			12,906
Income tax (expense) benefit	(2,606		)	176,741			(7,234		)
Net income	$	4,980		$	701,157		$	5,672
Basic and diluted earnings per common share (see Note 13, “Earnings (loss) Per Share”):
Basic: Earnings per share	$	0.25		$	23.90		$	0.19
Diluted: Earnings per share	$	0.25		$	23.90		$	0.19
Weighted average basic common shares outstanding	20,004,736			29,338,329			29,306,374
Weighted average diluted common shares outstanding	20,300,025			29,338,329			29,306,374



	Successor Company			Predecessor Company
	Period from June 4, 2018 through June 30,			Period from January 1, 2018 through June 3,			Six Months Ended June 30,
	2018			2018			2017
Net revenue	$	95,004		$	453,924		$	554,561
Operating expenses:
Content costs	27,685			159,681			195,069
Selling, general and administrative expenses	38,719			199,482			234,896
Depreciation and amortization	4,379			22,046			32,402
Local marketing agreement fees	358			1,809			5,420
Corporate expenses (including stock-based compensation expense of $652, $231 and $1,068, respectively)	10,125			17,169			21,428
Loss (gain) on sale or disposal of assets or stations	—			158			(2,502		)
Total operating expenses	81,266			400,345			486,713
Operating income	13,738			53,579			67,848
Non-operating (expense) income:
Reorganization items, net	—			466,201			—
Interest expense	(6,176		)	(260		)	(68,407		)
Interest income	4			50			72
Other income (expense), net	20			(273		)	(28		)
Total non-operating (expense) income, net	(6,152		)	465,718			(68,363		)
Income (loss) before income tax (expense) benefit	7,586			519,297			(515		)
Income tax (expense) benefit	(2,606		)	176,859			(1,208		)
Net income (loss)	$	4,980		$	696,156		$	(1,723	)
Basic and diluted earnings (loss) per common share (see Note 13, “Earnings (loss) Per Share”):
Basic: Earnings (loss) per share	$	0.25		$	23.73		$	(0.06	)
Diluted: Earnings (loss) per share	$	0.25		$	23.73		$	(0.06	)
Weighted average basic common shares outstanding	20,004,736			29,338,329			29,306,374
Weighted average diluted common shares outstanding	20,300,025			29,338,329			29,306,374

See accompanying notes to the unaudited condensed consolidated financial statements.

CUMULUS MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

For the Periods Ended June 30, 2018 (Successor), June 3, 2018 (Predecessor), and December 31, 2017 (Predecessor)

(Dollars in thousands)



	Class A Common Stock					Class B Common Stock				Class C Common Stock					Treasury Stock
	Number of Shares		Par Value			Number of Shares		Par Value		Number of Shares		Par Value			Number of Shares		Value			Additional Paid-In Capital			(Accumulated Deficit) Retained Earnings			Total
Balance at December 31, 2017 (Predecessor)	32,031,054		$	320		—		$	—	80,609		$	1		2,806,187		$	(229,310	)	$	1,626,428		$	(2,093,554	)	$	(696,115	)
Net loss	—		—			—		—		—		—			—		—			—			(44,000		)	(44,000		)
Other	—		—			—		—		—		—			—		—			247			—			247
Stock-based compensation expense	—		—			—		—		—		—			—		—			231			—			231
Balance at June 3, 2018 (Predecessor)	32,031,054		$	320		—		$	—	80,609		$	1		2,806,187		$	(229,310	)	$	1,626,906		$	(2,137,554	)	$	(739,637	)
Implementation of Plan and Application of Fresh Start Accounting:
Cancellation of Predecessor equity	(32,031,054	)	$	(320	)	—		$	—	(80,609	)	$	(1	)	(2,806,187	)	$	229,310		$	(1,626,906	)	$	—		$	(1,397,917	)
Elimination of accumulated deficit	—		—			—		—		—		—			—		—			—			2,137,554			2,137,554
Issuance of Successor common stock	11,052,211		—			5,218,209		—		—		—			—		—			264,394			—			264,394
Issuance of Successor warrants	—		—			—		—		—		—			—		—			60,606			—			60,606
Balance at June 4, 2018 (Successor)	11,052,211		$	—		5,218,209		$	—	—		$	—		—		$	—		$	325,000		$	—		$	325,000
Net income	—		—			—		—		—		—			—		—			—			4,980			4,980
Stock-based compensation expense	—		—			—		—		—		—			—		—			652			—			652
Conversion of Class B common stock	1,344,184		—			(1,344,184	)	—		—		—			—		—			—			—			—
Exercise of warrants	—		—			34,964		—		—		—			—		—			—			—			—
Balance at June 30, 2018 (Successor)	12,396,395		$	—		3,908,989		$	—	—		$	—		—		$	—		$	325,652		$	4,980		$	330,632

See accompanying notes to the unaudited condensed consolidated financial statements.

CUMULUS MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

Nine Months Ended September 30,
2017 2016
Cash flows from operating activities:
Net (loss) income $ (449 ) $ 32,958
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 47,610
68,023
Amortization of debt issuance costs/discounts 7,661
7,325
Provision for doubtful accounts 4,770
1,188
Gain on sale of assets or stations (2,585 ) (97,155 )
Loss on early extinguishment of debt 1,063
—
Impairment of intangible assets and goodwill —
1,816
Deferred income taxes 6,463
25,086
Stock-based compensation expense 1,422
2,403
Changes in assets and liabilities:
Accounts receivable (4,815 ) 21,817
Trade receivable 306
(813 )
Prepaid expenses and other current assets (23,536 ) (9,169 )
Other assets 1,036
(8,444 )
Accounts payable and accrued expenses 285
(5,643 )
Trade payable (910 ) 383
Other liabilities (4,196 ) (7,496 )
Net cash provided by operating activities 34,125
32,279
Cash flows from investing activities:
Restricted cash 345
3,431
Proceeds from sale of assets or stations 6,090
106,935
Capital expenditures (20,645 ) (16,704 )
Net cash (used in) provided by investing activities (14,210 ) 93,662
Cash flows from financing activities:
Repayment of borrowings under term loans and revolving credit facilities (81,652 ) —
Deferred financing costs (91 ) —
Proceeds from exercise of warrants —
3
Net cash (used in) provided by financing activities (81,743 ) 3
(Decrease) increase in cash and cash equivalents (61,828 ) 125,944
Cash and cash equivalents at beginning of period 131,259
31,657
Cash and cash equivalents at end of period $ 69,431
$ 157,601
Supplemental disclosures of cash flow information:
Interest paid $ 82,844
$ 83,122
Income taxes paid 3,444
3,814
Supplemental disclosures of non-cash flow information:
Trade revenue $ 28,926
$ 26,493
Trade expense 27,847
25,593
Transfer of deposit from escrow - Los Angeles land and building sale —
6,000



	Successor Company			Predecessor Company
	Period from June 4, 2018 through June 30,			Period from January 1, 2018 through June 3,			Six Months Ended June 30,
	2018			2018			2017
Cash flows from operating activities:
Net income (loss)	$	4,980		$	696,156		$	(1,723	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	4,379			22,046			32,402
Amortization of debt issuance costs/discounts	—			—			5,055
Provision for doubtful accounts	322			5,993			1,993
Loss (gain) on sale or disposal of assets or stations	—			158			(2,502		)
Non-cash reorganization items, net	—			(523,651		)	—
Deferred income taxes	2,606			(179,455		)	1,206
Stock-based compensation expense	652			231			1,068
Changes in assets and liabilities:
Accounts receivable	(16,363		)	12,697			3,078
Trade receivable	26			(997		)	(74		)
Prepaid expenses and other current assets	(241		)	(5,831		)	(9,943		)
Other assets	(156		)	(436		)	281
Accounts payable and accrued expenses	2,065			7,777			(11,075		)
Trade payable	13			190			(333		)
Other liabilities	5			(5,746		)	(2,493		)
Net cash (used in) provided by operating activities	(1,712		)	29,132			16,940
Cash flows from investing activities:
Acquisition	(18,000		)	—			—
Proceeds from sale of assets or stations	—			—			6,090
Capital expenditures	(1,969		)	(14,019		)	(13,203		)
Net cash used in investing activities	(19,969		)	(14,019		)	(7,113		)
Cash flows from financing activities:
Adequate protection payments on term loan	—			(37,802		)	—
Deferred financing costs	—			(850		)	(94		)
Net cash used in financing activities	—			(38,652		)	(94		)
(Decrease) increase in cash and cash equivalents and restricted cash	(21,681		)	(23,539		)	9,733
Cash and cash equivalents and restricted cash at beginning of period	88,351			111,890			139,284
Cash and cash equivalents and restricted cash at end of period	$	66,670		$	88,351		$	149,017

See accompanying notes to the unaudited condensed consolidated financial statements.

1. ~~Description~~Nature of Business, Interim Financial Data and Basis of Presentation:

~~Description of Business~~

Cumulus Media Inc. (and its consolidated subsidiaries, except as the context may otherwise require, ~~“Cumulus,~~“CUMULUS MEDIA,” ~~“Cumulus Media,~~“we,” “us,” “our,” or the “Company”) is a Delaware corporation, organized in ~~2002,~~2018, and successor ~~by merger~~ to ~~an Illinois~~a Delaware corporation with the same name that had been organized in ~~1997.~~2002.

Nature of Business

A leader in the radio broadcasting industry, ~~Cumulus Media (NASDAQ:CMLS)~~CUMULUS MEDIA combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million people reached each week through its ~~446~~441 owned-and-operated stations broadcasting in 90 USU.S. media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Together, the ~~Cumulus/~~Cumulus Radio Station Group and Westwood One platforms make ~~Cumulus Media~~CUMULUS MEDIA one of the few media companies that can provide advertisers with national reach and local impact. ~~Cumulus/~~The Cumulus Radio Station Group and Westwood One isare the exclusive radio broadcast ~~partner~~partners to some of the largest brands in sports, entertainment, news, and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, ~~Westwood One News,~~ and more. Additionally, itthe Company is the nation's leading provider of country music and lifestyle content through its NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events. ~~For more information, visit~~

Basis of Presentation

As previously disclosed, on November 29, 2017 (the “Petition Date”), CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.), a Delaware corporation (“Old Cumulus”) and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the "Chapter 11 Cases") were jointly administered under the caption ~~www.cumulus.com~~In re Cumulus Media Inc., et al, Case No. 17-13381. .On May 10, 2018, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 769] (the “Confirmation Order”), which confirmed the First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 446] (the “Plan”), as modified by the Confirmation Order. On June 4, 2018 (the “Effective Date”), Old Cumulus satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan was substantially consummated, and Old Cumulus and the other Debtors emerged from Chapter 11. On June 29, 2018, the Bankruptcy Court entered an order closing the Chapter 11 Cases of all of the Debtors other than Old Cumulus, whose case will remain open for purposes of fully administering its estate, including reconciling claims subject to compromise under the Plan. Although Old Cumulus emerged from Chapter 11 on the Effective Date, the Old Cumulus Chapter 11 Case will remain open until its estate has been fully administered and the Bankruptcy Court enters an order closing its case.

~~Interim Financial Data~~In connection with its emergence, Old Cumulus implemented a series of internal reorganization transactions authorized by the Plan pursuant to which it transferred substantially all of its remaining assets to an indirectly wholly owned subsidiary of reorganized Cumulus Media Inc. (formerly known as CM Emergence Newco Inc.), a Delaware corporation (“CUMULUS MEDIA” or the “Company”), prior to winding down its business. References to “Successor” or “Successor Company” relate to the balance sheet and results of operations of CUMULUS MEDIA on and subsequent to June 4, 2018. References to “Predecessor”, “Predecessor Company” or “Old Cumulus” refer to the balance sheet and results of operations of Old Cumulus prior to June 4, 2018.

~~The accompanying unaudited condensed~~Upon emergence from Chapter 11 on the Effective Date, the Company has applied Accounting Standards Codification (“ASC”) 852 - Reorganizations (“ASC 852”) in preparing its consolidated financial statements ~~should be read in conjunction with~~(see Note 2, “Emergence from Chapter 11” and Note 3 “Fresh Start Accounting”). As a result of the application of fresh start accounting and the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such the consolidated financial statements on and after June 4, 2018 are not comparable to the consolidated financial statements prior to that date. Refer to Note 3, “Fresh Start Accounting” for additional information.

Subsequent to the Petition Date and before the Effective Date, all expenses, gains and losses directly associated with the reorganization proceedings are reported as Reorganization items, net, in the accompanying Condensed Consolidated Statements of Operations. In addition, liabilities subject to compromise during the pendency of the Chapter 11 Cases are distinguished from liabilities of the Company ~~and the notes related thereto included~~that are not expected to be compromised, including post-petition liabilities, in the ~~Company’s Annual Report on Form 10-K for the year ended December 31, 2016.~~ accompanying Condensed Consolidated Balance Sheets.

The accompanying ~~unaudited~~ condensed consolidated financial statements include the ~~condensed consolidated~~ accounts of ~~Cumulus~~the Company and its ~~wholly-owned subsidiaries, with all~~wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The December 31, 2016 condensed balance sheet data was derived from audited financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

Interim Financial Data

In the opinion of management, all adjustments, ~~(consisting only~~other than bankruptcy related adjustments as described in Note 3, "Fresh Start Accounting", consist of normal, recurring ~~adjustments)~~adjustments, necessary for a fair statement of the ~~Company's~~Company’s results of operations for, and financial condition as of the end of, the interim periods have been made. The results of operations and cash flows of the Successor for the ~~three~~period from June 4, 2018 through June 30, 2018 and ~~nine months ended~~ ~~September 30, 2017~~,of the ~~cash flows~~Predecessor for the ~~nine months ended September 30, 2017~~period from April 1, 2018 through June 3, 2018 and the Company’s financial condition as of ~~September~~June 30, ~~2017~~,2018, are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition that can be expected as of the end of, any other interim period or for the fiscal year ending December 31, ~~2017~~.

~~Reverse Stock Split~~

On October 12, 2016, the Company effected a one-for-eight (1:8) reverse stock split (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every eight shares of each class of the Company's outstanding common stock were combined into one share of the same class of common stock and the authorized shares of each class of the Company's common stock were reduced by the same ratio. No fractional shares were issued in connection with the Reverse Stock Split. The number and exercise price of the Company's outstanding stock options and warrants were adjusted proportionally, as appropriate. The par value of the Company's common stock was not adjusted as a result of the Reverse Stock Split. All authorized, issued and outstanding stock and per share amounts contained within the accompanying unaudited condensed2018. These consolidated interim financial statements ~~and these footnotes have been adjusted to reflect this Reverse Stock Split~~should be read in conjunction with CUMULUS MEDIA’s Annual Report on Form 10-K for ~~all periods presented retroactively, as appropriate.~~the year ended December 31, 2017.

~~Use of Estimates~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including significant estimates related to revenue recognition, bad debts, intangible assets, income taxes, stock-based compensation, contingencies, litigation, certain expense accruals and, if applicable, purchase price allocation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, and which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts and results may differ materially from these estimates.

~~Comprehensive Income~~

Comprehensive income (loss) includes net income (loss) and certain items that are excluded from net income (loss) and recorded as a separate component of stockholders' equity (deficit). During the three and nine months ended September 30, 2017 and 2016, the Company had no items of other comprehensive income (loss) and, therefore, comprehensive income does not differ from reported net income (loss).

~~Liquidity and~~ Going Concern ~~Considerations~~

In accordance with the requirements of Accounting Standards Update (“ASU”), 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), ~~or Accounting Standards Codification ("ASC")~~and ASC 205-40, the Company has the responsibility to evaluate at each reporting period, including interim periods, whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations. In its evaluation for this report, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due ~~for 12 months~~within one year following the date of issuance of this Quarterly Report on Form 10-Q.

~~As of September 30, 2017,~~During the Company had $69.4 million of cash and cash equivalents and $50.0 million of availability under its Securitization Facility (defined below). The Company has generated positive cash flows from operating activities of $34.1 million and $32.3 million for the nine months ended September 30, 2017 and 2016, respectively. The Company expects it will continue to generate positive cash flows from operating activities in the fourth quarter of 2017 and full year 2018. Although the servicingpendency of the Company’s debt obligations requires a substantial amount of the cash generated, the Company anticipates that its current capital resources will enable it to meet its anticipated debt service obligations, operational expenses and capital expenditures through at least the third quarter of calendar year 2018, assuming that the Company’s lenders and other creditors do not accelerate any amounts due to them, as described in more detail below.

As of September 30, 2017, the Company had a $1.729 billion term loan under its Credit Agreement (defined below) and $610.0 million of 7.75% Senior Notes (defined below) outstanding. Amounts outstanding under the term loan mature on December 23, 2020 and the 7.75% Senior Notes mature on May 1, 2019. Notwithstanding these maturity dates, and as disclosed further in Note 4, the Credit Agreement includes a springing maturity provision that provides that if on January 30, 2019 the aggregate principal amount of 7.75% Senior Notes outstanding exceeds $200.0 million, the maturity date of the term loan will be accelerated to January 30, 2019. If the Company is unable to refinance or extend its term loan or the 7.75% Senior Notes, or take other steps to create additional liquidity or otherwise avoid the occurrence of the springing maturity, forecasted cash flows would not be sufficient for the Company to meet its obligations as of January 30, 2019.

As discussed further in Note 13, on October 30, 2017, the Restructuring Committee of the Board of Directors authorized the Company to forgo the scheduled interest payment on the 7.75% Senior Notes on November 1, 2017 of approximately $23.6 million and thus enter into the applicable 30-day grace period under the terms of the indenture governing such notes (the “Indenture”). This nonpayment constitutes a “default” under the terms of the Indenture, which matures into an “Event of Default” (as defined in the Indenture) if such “default” is not cured or waived before the expiration of the 30-day grace period on December 1, 2017. Upon the occurrence of an Event of Default, the trustee under the Indenture, or the holders of a specified percentage of 7.75% Senior Notes, may declare all outstanding amounts immediately due and payable. Such an Event of Default would also constitute an event of default under the Credit Agreement, which would permit the lenders thereunder to declare all amounts outstanding under the Credit Agreement to be immediately due and payable.

~~indebtedness outside of the protections of~~ Chapter 11 of the U.S. Bankruptcy Code. We cannot provide any assurances of our ability to timely complete any such transactions, or the structure or likelihood of success thereof. If the Company is unsuccessful in restructuring or refinancing its indebtedness outside the court-approved process, it could seek to effectuate a restructuring under the protection of Chapter 11 of the U.S. Bankruptcy Code.

Based on the significance of the Company's debt balance and the potential that the Company could seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, the Company determined that, as a result of these two factors and as required by the accounting guidance cited above, there is substantial doubt as toCases, the Company’s ability to continue as a going concern was contingent upon a variety of factors, including the Bankruptcy Court’s approval of the Plan and the Company’s ability to successfully implement the Plan. As a result of the effectiveness of the Plan, the Company believes it has the ability to meet its obligations for ~~a period of 12 months following~~at least one year from the date of issuance of this ~~Quarterly Report on~~ Form 10-Q.

Notwithstanding the aforementioned, the accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the ability to continue as a going concern.

~~Out of Period Adjustment~~

In connection with the preparation of certain prior period unaudited condensed consolidated financial statements, the Company recorded a correction of an immaterial misstatement that occurred in periods prior thereto, which resulted in an increase in content costs of $3.6 million in the second quarter of 2016. The correction related to the Radio Station Group segment only and was not material to the prior year quarterly or annual results.

Assets Held for Sale

During the year ended December 31, 2015, the Company entered into an agreement to sell certain land in the Company's Washington, DC market to a third party. The closing of the transaction is subject to various conditions and approvals which remain pending. The ~~identified~~ asset ~~has been~~was classified as held for sale in the ~~accompanying unaudited condensed consolidated balance sheets~~Consolidated Balance Sheet at ~~September 30, 2017 and~~ December 31, 2016. ~~The estimated fair value~~At December 31, 2017, the sale of this asset was subject to Bankruptcy Court approval, and consequently, the asset no longer met the definition of held for sale and was classified on the Consolidated Balance Sheet as Property and Equipment, net. As a result of the ~~land~~Company's emergence from Chapter 11, as of June 30, 2018, the asset again met the criteria to be ~~disposed~~classified as held for sale.

Supplemental Cash Flow Information

The following summarizes supplemental cash flow information to be read in conjunction with the Condensed Consolidated Statements of ~~is in excess of its carrying value.~~Cash Flows for the Period from June 4, 2018 through June 30, 2018 (Successor), Period from January 1, 2018 through June 3, 2018 (Predecessor) and the Six Months Ended June 30, 2017 (Predecessor):

~~Adoption of New~~



	Successor Company		Predecessor Company
	Period from June 4, 2018 through June 30,		Period from January 1, 2018 through June 3,			Six Months Ended June 30,
	2018		2018			2017
Supplemental disclosures of cash flow information:
Interest paid	$	5,878	$	—		$	62,609
Income taxes paid	2,847		1,992			2,790
Supplemental disclosures of non-cash flow information:
Trade revenue	$	3,297	$	18,973		$	20,253
Trade expense	3,246		17,964			19,485
Transfer of deposit from escrow - WKQX acquisition	4,750		—			—
Supplemental disclosures of non-cash reorganization items:
Accounts receivable			$	(11	)
Prepaid expenses and other current assets	—		21,077			—
Property and equipment	—		(121,732		)	—
Other intangible assets, goodwill and other assets	—		283,217			—
Accounts payable, accrued expenses and other liabilities	—		(36,415		)	—
Long-term debt			(994,407		)
Stockholders' equity	—		324,620			—
Reconciliation of cash and cash equivalents and restricted cash to the Condensed Consolidated Balance Sheet:
Cash and cash equivalents	$	37,444	$	50,046		$	141,195
Restricted cash	29,226		38,305			7,822
Total cash and cash equivalents and restricted cash	$	66,670	$	88,351		$	149,017

Recent Accounting Standards Updates

ASU ~~2016-09~~2016-02 - ~~Compensation - Stock Compensation~~Leases ("(“ASU ~~2016-09~~"2016-02”). In ~~March~~February 2016, the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) issued Accounting Standards Update ~~("ASU"~~(“ASU”) ~~2016-09,~~2016-02, which provides updated guidance for ~~employee stock-based payments.~~the accounting for leases. This update ~~removes~~requires lessees to recognize assets and liabilities for the ~~requirement that reporting entities present tax benefits as excess cash flows from financing activities~~rights and ~~cash flows from operating activities. As~~obligations created by leases with a ~~result of this amendment, cash flows related to excess tax benefits~~term longer than one year. Leases will be classified ~~only in~~as either finance or operating, ~~activities. The Company adopted ASU 2016-09 effective January 1, 2017. As a result~~thereby impacting the pattern of ~~adoption,~~expense recognition in the ~~first quarter~~statement of 2017, the Company recorded an adjustment to accumulated deficit of approximately $0.6 million to recognize net operating loss carryforwards attributable to excess tax benefits on stock compensation that had not been previously recognized in additional paid in capital. The Company is continuing its practice of estimating forfeitures and recording cash paid for withholding taxes as a financing activity.

operations. ASU ~~2017-04 - Intangibles - Goodwill and Other ("ASU 2017-04").~~ In January 2017, the FASB issued ASU 2017-04 to simplify the accounting for goodwill impairment. The update eliminates the requirement to perform Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Upon effectiveness of this update, a goodwill impairment2016-02 will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance remains substantially unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The new standard is effective for ~~fiscal years, and interim periods within~~ fiscal years beginning after December 15, 2019, with early adoption permitted. The impact on the Company's financial statements of it not being required to perform Step 2 to measure the amount of any potential goodwill impairment will depend on various factors determined by the Company's annual impairment test which will be performed on December 31, 2017.2018, and interim periods thereafter. Early adoption is ~~permitted for any impairment tests performed after January 1, 2017.~~permitted. The Company ~~adopted~~is currently assessing the impact that ASU ~~2017-04~~2016-02 will have on its consolidated financial statements and plans to adopt the new standard effective January 1, ~~2017.~~2019.

~~Recent~~

Adoption of New Accounting Standards ~~Updates~~

ASU 2014-09 and related updates - Revenue from Contracts with Customers ("("ASU 2014-09") or ("ASC 606"). ~~In May 2014,~~On January 1, 2018, the ~~FASB issued ASU 2014-09~~Company adopted ASC 606, which ~~outlines~~is a ~~single~~ comprehensive ~~revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current~~new revenue recognition ~~guidance, including industry-~~

~~specific guidance. The core principle of the single comprehensive~~model that requires revenue ~~model is that “an entity recognizes revenue~~to be recognized in a manner to depict the transfer of ~~promised~~ goods or services and satisfaction of performance obligations to ~~customers in~~a customer at an amount that reflects the consideration ~~to which the entity expects~~expected to be ~~entitled~~received in exchange for those goods or services.~~” In August 2015,~~ The Company applied the ~~FASB issued~~ ~~ASU 2015-14 - Deferral of the Effective Date ("ASU 2015-14")~~, which delayed the effective date of ASU 2014-09 by one year. ASU 2014-09, as amended, is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. Earlier application is permitted onlymodified retrospective method to contracts that were not completed as of ~~annual~~January 1, 2018. Results for reporting periods beginning after ~~December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued~~ ~~ASU 2016-08 - Principal versus Agent Considerations ("ASU 2016-08")~~ ~~which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued~~ ~~ASU 2016-10 - Identifying Performance Obligations and Licensing ("ASU 2016-10")~~ which amends the revenue recognition guidance on accounting for licenses of intellectual property and identifying performance obligations as well as clarifies when a promised good or service is separately identifiable. In May 2016, the FASB issued ~~ASU 2016-12 - Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12")~~ which provides clarifying guidance in certain narrow areas such as an assessment of collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition as well as adds certain practical expedients. In December 2016, the FASB issued ~~ASU 2016-20 - Technical Corrections and Improvements ("ASU 2016-20")~~ ~~which provides technical corrections and improvements to Topic 606. In March 2017, the FASB issued~~ ~~ASU 2017-05 - Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets ("ASU 2017-05")~~ ~~which clarifies the scope of Subtopic 610-20 and adds guidance for partial sales of non-financial assets, including partial sales of real estate. In May 2017, the FASB issued~~ ~~ASU 2017-10 - Determining the Customer of the Operation Services ("ASU 2017-10")~~ ~~which clarifies the diversity in practice in how an operating entity determines the customer of the operation services for transactions within the scope of~~January 1, 2018, are presented under ASC 853, Service Concession Arrangements by clarifying that the grantor is the customer of the operation services in all cases for those arrangements. The amendments also allow for a more consistent application of other aspects of the revenue guidance, which are affected by this customer determination. The amendments in ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-05 and ASU 2017-10 may be applied either retrospectively to each606, while prior period ~~presented or retrospectively with~~amounts have not been adjusted and continue to be reported under the ~~cumulative effect of initially applying such updates at the date of initial application.~~

~~The Company plans to adopt the new standard using a modified retrospective approach effective January 1, 2018.~~

The Company created a revenue recognition implementation team to oversee the planning, testing and implementation of ASC 606. The responsibilities of this team include developing an appropriate testing methodology, performing the testing of contracts and evaluating the impact of the new revenue recognition standard on the Company's financial statements. The revenue recognition implementation team meets on a regular basis and have created a detailed timetable to ensure the Company is on pace for the required 2018 adoption. The initial scoping procedures have been completed and material revenue streams have been identified.

~~The Company continues to assess the potential impacts of the new standard, including in the areas described above, and anticipates adoption of this standard could have~~previous accounting standards. There was not a material impact ~~on its consolidated financial statements; however,~~to revenues as a result of the ~~Company cannot reasonably estimate quantitative information related~~recognition of revenue in accordance with ASC 606 for the three and six months ended June 30, 2018, and there have not been significant changes to the ~~impact~~Company's business processes, systems, or internal controls as a result of implementing the ~~new standard on its financial statements at this time.~~standard. See Note 4, "Revenues" for further details.

ASU 2016-01 - Recognition and Measurement of Financial Assets and Financial Liabilities ("("ASU 2016-01"). In January 2016, the FASB issued ASU 2016-01 which enhances the reporting model for financial instruments including aspects of recognition, measurement, presentation and disclosure. ~~The new guidance~~This ASU revises the accounting requirements related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. ~~The update~~This ASU also changes certain disclosure requirements associated with the fair value of financial instruments. These changes ~~will~~ require an entity to measure, at fair value, investments in equity securities and other ownership interests in an entity - including investments in partnerships, unincorporated joint ventures and limited liability companies that do not result in consolidation and are not accounted for under the equity method - and recognize the changes in fair value within net income. ASU 2016-01 ~~will be~~is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. Early adoption is not permitted, except for certain amendments within the ASU. The Company does not expect adoption of this guidance to have a material impact on its financial condition, results of operation or disclosures.

~~ASU 2016-02 - Leases ("ASU 2016-02").~~In February ~~2016,~~2018, the FASB issued ASU ~~2016-02~~2018-03 - Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2018-03") which provides ~~updated guidance~~an option for a company to "un-elect" the measurement alternative and elect to account for the ~~accounting~~investment at fair value through current earnings for ~~leases. This update requires lessees~~certain equity investments that do not have readily determinable fair values. However, once a company makes this election for a particular investment, it must apply the fair value through current earnings model to ~~recognize assets and liabilities~~all identical investments and/or similar investments from the same issuer. Further, a company cannot elect the measurement alternative for future purchases of identical or similar investments of the rights and obligations created by leases with a term longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, and interim periods thereafter. A modified retrospective transition method is required, with the option to elect certain practical expedients. Early adoption is permitted.same issuer. The Company ~~is currently assessing~~adopted ASU 2016-01 as of January 1, 2018 on a prospective basis. The Company un-elected the measurement alternative and will continue to value joint venture investments at fair value through current earnings. As such, there was no impact ~~that ASU 2016-02 will have on its consolidated financial statements.~~to the Condensed Consolidated Financial Statements.

ASU 2016-15 - Classification of Certain Cash Receipts and Cash Payments ("("ASU 2016-15"). In August 2016, the FASB issued ASU 2016-15 which provides guidance for several new and/or revised disclosures pertaining to the classification of certain cash receipts and cash payments on the statement of cash flows, including contingent consideration payments made after a business acquisition. ASU 2016-15 ~~will be~~is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. ~~Early adoption is permitted.~~ The Company ~~does not expect adoption~~adopted ASU 2016-15 as of ~~this guidance~~January 1, 2018 and there was no impact to ~~have a material impact on its financial condition, results of operation or disclosures.~~

~~ASU 2016-16 - Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"). In October 2016,~~ the FASB issued ASU 2016-16 which provides guidance for the accounting for the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs between entities in different tax jurisdictions. ASU 2016-16 will be effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. Early adoption is permitted. The Company does not expect adoption of this guidance to have a material impact on its financial condition, results of operation or disclosures.Condensed Consolidated Financial Statements.

ASU 2016-18 - Restricted Cash ("("ASU 2016-18"). In November 2016, the FASB issued ASU 2016-18 which provides guidance for the accounting for the disclosure of restricted cash on the ~~Statement~~statement of ~~Cash Flows.~~cash flows. ASU 2016-18 ~~will be~~is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. ~~Early adoption is permitted.~~ The Company ~~does not expect adoption~~adopted ASU 2016-18 as of this guidance to have a material impact on its financial condition, results of operation or disclosures. As of September 30, 2017 and December 31, 2016, the Company had approximately $7.7 million and $8.0 million in restricted cash, respectively, on its consolidated balance sheets.January 1, 2018. Upon adoption of ASU 2016-18 on January 1, 2018, restricted cash balances ~~will be~~were included along with cash and cash equivalents as of the end of the period and beginning of the period, respectively, in the Company's ~~consolidated Statement of~~Condensed Consolidated Cash Flows for all periods ~~presented; additionally,~~presented. Additionally, separate line items showing changes in restricted cash balances ~~will be~~have been eliminated from ~~its consolidated statement~~the Condensed Consolidated Statement of ~~cash flows.~~Cash Flows.

ASU 2017-01 - Clarifying the Definition of a Business ("("ASU 2017-01"). In January 2017, the FASB issued guidance that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions ~~(or disposals)~~or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The new standard is effective for fiscal years, and interim periods within fiscal years, beginning after December 15, 2017. ~~Early adoption is permitted.~~ The Company ~~does not expect adoption~~adopted ASU 2017-01 as of ~~this guidance to have~~January 1, 2018 on a prospective basis and there was no material impact ~~on its financial condition, results of operation or disclosures.~~to the Condensed Consolidated Financial Statements.

ASU 2017-09 - Scope of Modification Accounting ("("ASU 2017-09"). In May 2017, the FASB issued an update to guidance on Topic 718, Compensation—Stock Compensation that clarifies when changes to the terms or conditions of a share-based award must be accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award, ~~(as~~as equity or ~~liability)~~liability, changes as a result of the change in terms or conditions. ASU 2017-09 ~~will be~~is effective ~~for all entities~~ for annual periods, and interim periods within annual periods, beginning after December 15, 2017. ~~Early adoption is permitted.~~ The Company ~~does not expect the adoption~~adopted ASU 2017-09 as of ~~this guidance to have~~January 1, 2018 on a prospective basis and there was no material impact ~~on its~~to the consolidated financial ~~condition, results of operation or disclosure.~~statements.

2. Emergence from Chapter 11

On May 10, 2018, the Bankruptcy Court entered the Confirmation Order confirming the Plan. On the Effective Date, the Plan became effective and the Debtors emerged from Chapter 11.

Plan of Reorganization

A plan of reorganization determines the rights and satisfaction of claims of various creditors and security holders, but the ultimate settlement of certain claims is subject to the uncertain outcome of any litigation, negotiations and bankruptcy court decisions for a period of time after a plan of reorganization is confirmed.

Cancellation of Certain Prepetition Obligations

In connection with the effectiveness of and pursuant to the terms of the Plan, on the Effective Date, the obligations of Old Cumulus and its subsidiaries under the following agreements were satisfied and discharged:

Amended and Restated Credit Agreement, dated as of December 23, 2013, by and among Cumulus Media Inc., Cumulus Media Holdings Inc., as borrower, certain lenders, JPMorgan Chase Bank, N.A., as lender and Administrative Agent, Royal Bank of Canada and Macquarie Capital (USA) Inc., as co-syndication agents, and Credit Suisse AG, Cayman Islands Branch, Fifth Third Bank, Goldman Sachs Bank USA and ING Capital LLC, as co-documentation agents (“the Canceled Credit Agreement”), pursuant to which Old Cumulus had outstanding term loans in the amount of $1.7 billion (the “Predecessor Term Loan”);

Indenture, dated as of May 13, 2011, among Cumulus Media Inc., the Guarantors named therein and U.S. Bank National Association, as Trustee, as supplemented (“7.75% Senior Notes”), pursuant to which Old Cumulus had outstanding senior notes with a face value of $610.0 million; and

Rights Agreement, dated as of June 5, 2017, between Cumulus Media Inc. and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”).

Additional Matters Contemplated by the Plan

In accordance with the Plan, on the Effective Date each share of Old Cumulus’s Class A common stock, par value $0.01 per share (the “old Class A common stock”), Class B common stock, par value $0.01 per share (the “old Class B common stock”), and Class C common stock, par value $0.01 per share (the "old Class C common stock" and together with the old Class A common stock and the old Class B common stock, the “old common stock”) outstanding immediately prior to the Effective Date, including all stock options, warrants or other rights, including rights issued under the Rights Agreement, to purchase such old common stock, were extinguished, canceled and discharged, and each such share, option or warrant has no further force or effect. Furthermore, all of Old Cumulus’s equity award agreements under prior incentive plans, and the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect;

On the Effective Date, the Company’s certificate of incorporation was amended and restated to authorize the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0000001 per share (“new Class A common stock”),100,000,000 shares of Class B common stock, par value $0.0000001 per share (“new Class B common stock” and, together with the new Class A common stock, the “new common stock”) and 100,000,000 shares of preferred stock (see Note 11, “Stockholders’ Equity”);

On the Effective Date, the Company issued 11,052,211 shares of new Class A common stock and 5,218,209 shares of new Class B common stock;

On the Effective Date, the Company issued 3,016,853 Series 1 warrants to purchase shares of new common stock;

After the Effective Date, the Company also issued or will issue 712,736 Series 2 warrants (the “Series 2 warrants” and, together with the Series 1 warrants, the “Warrants”) to purchase shares of new common stock;

The Company entered into a $1.3 billion credit agreement (the “Credit Agreement” or “Term Loan”) with Wilmington Trust, N.A., as administrative agent (the “Agent”) and the lenders named therein (see Note 8, “Long-Term Debt”);

The holders of claims with respect to the Predecessor Term Loan received the following in full and complete satisfaction of their respective claims thereunder: (i) a pro rata share of the Term Loan and (ii) a pro rata share of 83.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Long-Term Incentive Plan (the “Incentive Plan”) (see Note 11, “Stockholders’ Equity”);

The holders of unsecured claims against Old Cumulus including claims arising from the 7.75% Senior Notes received, in the aggregate, 16.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Incentive Plan;

The Company’s board of directors wasreconstituted to consist of the Company’s President and Chief Executive Officer and six independent directors selected by the holders of the Predecessor Term Loan; and

Intercompany Claims and Interests (as defined in the Plan) were canceled without any distribution on account of such Intercompany Claims and Interests.

The foregoing description of certain matters effected pursuant to the Plan, and the transactions related to and contemplated thereunder, is not intended to be a complete description of, or a substitute for, a full and complete reading of the Plan.

3. Fresh Start Accounting

In connection with the Company’s emergence from Chapter 11 on the Effective Date, the Company qualified for fresh start accounting under ASC 852 as (i) the holders of voting shares of the Predecessor Company received less than 50% of the voting shares of the Successor Company and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. ASC 852 requires that fresh start accounting be applied when the Bankruptcy Court enters a confirmation order confirming a plan of reorganization, or as of a later date when all material conditions precedent to the effectiveness of a plan of reorganization are resolved, which for CUMULUS MEDIA was June 4, 2018. The Company has applied fresh start accounting as of the Effective Date.

Upon the application of fresh start accounting, CUMULUS MEDIA allocated the reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, Business Combinations (“ASC 805”). Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. Liabilities existing as of the Effective Date, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates. Deferred taxes were determined in conformity with applicable accounting standards. Predecessor Company accumulated depreciation, accumulated amortization, and accumulated deficit were eliminated. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Company’s consolidated financial statements after June 3, 2018 are not comparable to the Company’s consolidated financial statements as of or prior to that date.

Reorganization Value

As set forth in the Plan, the enterprise value of the Successor Company was estimated to be between $1.5 billion and $1.7 billion. Based on the estimates and assumptions discussed below, CUMULUS MEDIA estimated the enterprise value to be $1.675 billion, which was confirmed by the Bankruptcy Court.

Management estimated the enterprise value of the Successor Company utilizing the guideline public company method and discounted cash flow method (“DCF”). The use of each approach provides corroboration for the other approach. To estimate enterprise value utilizing the guideline public company method, management applied valuation multiples, derived from the operating data of publicly-traded benchmark companies, to the same operating data of CUMULUS MEDIA. The guideline public company analysis identified a group of comparable companies giving consideration to lines of business and markets served, size and geography. The valuation multiples were derived based on projected financial measures of revenue and earnings before interest, taxes, depreciation and amortization and applied to projected operating data of CUMULUS MEDIA.

To estimate enterprise value utilizing the discounted cash flow method, management established an estimate of future cash flows for the period 2018 to 2024 with a terminal value and discounted the estimated future cash flows to present value. The expected cash flows for the period 2018 to 2024 with a terminal value were based upon certain financial projections and assumptions provided to the Bankruptcy Court. The expected cash flows for the period 2018 to 2024 were derived from earnings forecasts and assumptions regarding growth and margin projections, as applicable. A terminal value was included, calculated using the constant growth method, based on the cash flows of the final year of the forecast period.

The Company’s enterprise value represents the fair value of its interest-bearing debt and equity capital, while the reorganization value is derived from the enterprise value by adding back non-interest-bearing liabilities. The following table reconciles the enterprise value to the estimated reorganization value as of the Effective Date (dollars in thousands):



Enterprise value	$	1,675,000
Less: Cash balance difference (1)	(20,000		)
Less: Effect of deferred tax liability (2)	(30,000		)
Plus: Fair value of non-debt current liabilities	114,573
Plus: Fair value of non-debt long term liabilities	63,921
Reorganization value	$	1,803,494

(1) Difference in the estimated cash balance in the reorganization value versus the actual cash on hand as of June 3, 2018.

(2) Difference in the assumed effect of deferred taxes in the reorganization value versus the actual deferred taxes as of June 3, 2018.

Unaudited Condensed Consolidated Balance Sheet

The adjustments set forth in the following unaudited Condensed Consolidated Balance Sheet reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs (dollars in thousands).



	Predecessor Company			Reorganization Adjustments				Fresh Start Adjustments				Successor Company
Assets
Current assets:
Cash and cash equivalents	$	108,480		$	(58,434	)	(1)	$	—			$	50,046
Restricted cash	13,720			24,585			(2)	—				38,305
Accounts receivable	215,724			—				—				215,724
Trade receivable	5,221			—				—				5,221
Prepaid expenses and other current assets	49,912			(19,990		)	(3)	—				29,922
Total current assets	393,057			(53,839		)		—				339,218
Property and equipment, net	193,574			—				121,732			(12)	315,306
Broadcast licenses	1,203,809			—				(285,309		)	(13)	918,500
Other intangible assets	75,056			—				137,402			(13)	212,458
Goodwill	135,214			—				(135,214		)	(14)	—
Other assets	18,012			—				—				18,012
Total assets	$	2,018,722		$	(53,839	)		$	(161,389	)		$	1,803,494
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	108,448		$	6,253		(4)	$	(128	)	(15)	114,573
Current portion of Term Loan	—			13,000			(5)	—				13,000
Total current liabilities	108,448			19,253				(128		)		127,573
Term Loan	—			1,268,983			(5)	18,017			(16)	1,287,000
Other liabilities	2,801			21,312			(6)	13			(17)	24,126
Deferred income taxes	—			50,437			(7)	(10,642		)	(18)	39,795
Total non-current liabilities	2,801			1,340,732				7,388				1,350,921
Liabilities subject to compromise	2,647,110			(2,647,110		)	(8)	—				—
Total liabilities	2,758,359			(1,287,125		)		7,260				1,478,494
Stockholder's (deficit) equity:
Predecessor Class A common stock	320			(320		)	(9)	—				—
Predecessor Class C common stock	1			(1		)	(9)	—				—
Predecessor treasury stock	(229,310		)	229,310			(9)	—				—
Predecessor additional-paid-in-capital	1,626,906			(1,626,906		)	(9)	—				—
Successor Class A common stock	—			—				—				—
Successor Class B common stock	—			—				—				—
Successor additional-paid-in-capital	—			325,000			(10)	—				325,000
(Accumulated deficit) retained earnings	(2,137,554		)	2,306,203			(11)	(168,649		)	(19)	—
Total stockholders' (deficit) equity	(739,637		)	1,233,286				(168,649		)		325,000
Total liabilities and stockholders’ equity (deficit)	$	2,018,722		$	(53,839	)		$	(161,389	)		$	1,803,494

Reorganization adjustments


1.	Reflects cash payments and the funding of professional fee escrow account from the implementation of the Plan as follows (dollars in thousands):



Payment of professional fees	$	3,118
Adequate protection payment	1,326
Payment of contract cure claims	20,341
Funding of professional fee escrow amount	32,517
Other fees and expenses	1,132
Net cash payments	$	58,434

2. Reflects net additions to restricted cash giving effect to the funding of professional fee escrow account for professional fees accrued and the payment of restructuring fees (dollars in thousands):



Funding of professional fee escrow account	$	32,517
Payment of restructuring fees	(7,932		)
Net changes to restricted cash	$	24,585


3.	Reflects the reclassification of $17.8 million debt issuance costs from prepaid expense to offset the Term Loan as well as the write-off of $2.2 million of certain assets which do not benefit the Successor Company.


4.	Represents the reinstatement of certain accounts payable and accrued expenses that were previously classified as Liabilities subject to compromise as well as accrued state income taxes.


5.	Represents the current and non-current portion, net of debt issuance costs of $18.0 million, of the Term Loan.


6.	Represents the reinstatement of tax liabilities, lease liabilities and long-term deposits from Liabilities subject to compromise.


7.	Represents the partial reinstatement of the deferred tax liability of $50.4 million of the original $237.2 million that was included in Liabilities subject to compromise.


8.	Liabilities subject to compromise immediately prior to the Effective Date consisted of the following (dollars in thousands):



Accounts payable and accrued expenses	$	66,515
Other liabilities	21,364
Deferred tax liability	237,247
Accounts payable, accrued expenses and other liabilities	325,126
Predecessor Term Loan	1,684,407
7.75% Senior Notes	610,000
Accrued interest	27,577
Long-term debt and accrued interest	2,321,984
Total Liabilities subject to compromise	$	2,647,110

Liabilities subject to compromise have been, or will be settled as follows in accordance with the Plan (dollars in thousands):



Liabilities subject to compromise			$	2,647,110
Cash payments at the Effective Date			(33,657		)
Liabilities reinstated at the Effective Date:
Accounts payable	(3,215	)
Other liabilities	(21,160	)
Deferred tax liability	(50,437	)
Total liabilities reinstated at the Effective Date			(74,812		)
Adjustment for deferred tax liability impact			(186,810		)
Fair value of common stock issued to Predecessor Term Loan holders, 7.75% Senior Notes holders and unsecured creditors			(264,394		)
Fair value of warrants issued to Predecessor Term Loan holders, 7.75% Senior Notes holders and unsecured creditors			(60,606		)
Fair value of Term Loan provided by Predecessor Term Loan holders			(1,300,000		)
Gain on settlement of Liabilities subject to compromise			$	726,831

Refer to Note 11, “Stockholders’ Equity” for the determination of fair value of equity issued to unsecured creditors.


9.	Pursuant to the Plan, all equity interests of the Predecessor that were issuable or issued and outstanding immediately prior to the Effective Date were cancelled. The elimination of the carrying value of the canceled equity interests was recorded as an offset to retained earnings (accumulated deficit).


10.	In settlement of the Predecessor Term Loan, 7.75% Senior Notes, and other general unsecured claims, the Company issued new common stock and Successor warrants.


11.	Adjustment made to accumulated deficit consisted of the following (dollars in thousands):



Cancellation of Predecessor equity	$	1,397,917
Gain on settlement of Liabilities subject to compromise	726,831
Income tax benefit	184,005
Other items	(2,550		)
Total adjustment to retained earnings	$	2,306,203

Fresh Start adjustments


12.	Reflects the increase in net book value of property and equipment to the estimated fair value as of the Effective Date. The following table summarizes the components of property and equipment, net as of June 4, 2018, and the fair value as of the Effective Date (dollars in thousands):



	Estimated Useful Life	Successor Company		Predecessor Company
Land	N/A	$	159,464	$	86,287
Broadcasting and other equipment	3 to 30 years	58,369		248,607
Computer and capitalized software costs	1 to 3 years	11,791		34,924
Furniture and fixtures	5 years	4,432		15,571
Leasehold improvements	5 years	24,089		46,471
Buildings	9 to 20 years	26,964		51,994
Construction in progress	N/A	30,197		30,197
		315,306		514,051
Less: accumulated depreciation		—		(320,477		)
Property and equipment, net		$	315,306	$	193,574

To estimate the fair value of personal property such as broadcasting and other equipment, the Company utilized a combination of the cost approach and market approach. The Company recognized the contributory value associated with the necessary installation, engineering, and set-up costs related to the installed component of equipment by using the cost approach. The market approach was used for assets where a viable, transparent secondary market existed, such as motor vehicle assets.

To estimate the fair value of real property, the Company considered the cost approach and sales comparison approach. Buildings were primarily valued using the cost approach, under which the Company developed a replacement cost new for the improvements and applied deductions for physical depreciation based on the age of the assets. Land was valued under the sales comparison approach, whereby the Company researched transactions involving comparable parcels to provide an indication of the fair value of the various subject parcels.


13.	The Company recorded an adjustment to intangible assets of $147.9 million as follows (dollars in thousands):



	Successor Company		Predecessor Company		Difference
Broadcast licenses	$	918,500	$	1,203,809	$	(285,309	)
Other intangible assets	212,458		75,056		137,402
	$	1,130,958	$	1,278,865	$	(147,907	)

The fair values of broadcasting licenses and other intangible assets were determined as follows:

Broadcast licenses ($918.5 million as of June 4, 2018): The fair value of broadcast licenses was determined using the Greenfield approach, a derivation of the income approach that isolates the income that is properly attributable to the license alone. It is based upon modeling a hypothetical “Greenfield” build-up to a normalized enterprise that, by design, lacks inherent goodwill and has other assets that have essentially been paid for or added as part of the build-up process.


b.	Other intangible assets ($212.5 million as of June 4, 2018):

Broadcasting, affiliate and producer relationships ($162.0 million as of June 4, 2018): The customer relationship intangibles including broadcasting and affiliate and producer relationships were valued utilizing the excess earning method, a derivation of the income approach that considers cash flows related to the customers after accounting for a fair return to the other supporting assets of the business.


ii.	Trademarks and trade names ($21.2 million as of June 4, 2018): In estimating the fair value of trademarks and trade names, management used the relief from royalty method, a derivation of the income approach, for analyzing the trade names.


iii.	Tower income contracts ($15.1 million as of June 4, 2018): The fair value of these were determined utilizing a discounted cash flow analysis.


iv.	Advertiser backlog ($12.0 million as of June 4, 2018): The fair value of advertiser backlog was analyzed using the multi-period excess earning method. Estimated duration of advertiser backlog as of the Effective Date was used as a point of recognition for net sales attributable to that backlog.


v.	Leasehold intangible asset, net ($2.2 million as of June 4, 2018): The fair value of leasehold interests was determined utilizing a discounted cash flow analysis, wherein leases for real property were assessed for favorable or unfavorable contract rental rates.


14.	Reflects the elimination of the Predecessor goodwill balance of $135.2 million.


15.	Reflects the elimination of the carrying value of short-term deferred rent to adjust accounts payable and accrued expenses to estimated fair value.

16.

Represents the fair value adjustment of the Term Loan including the elimination of debt issuance costs of $18.0 million incurred prior to and upon emergence from bankruptcy. The fair value of debt is comprised of $13.0 million of short-term debt and $1,287.0 million of long-term debt. The fair value of the Term Loan was determined based on a market approach utilizing market yields and was estimated to be 100% of par value.


17.	Represents the increase of a liability related to a failed sale leaseback transaction and elimination of the carrying value of long-term deferred rent in accordance with fresh start reporting to adjust net book value to estimated fair value.


18.	Reflects the impact of fresh start adjustments on deferred taxes.


19.	Reflects the cumulative impact of the fresh start accounting adjustments discussed above on accumulated deficit as follows (dollars in thousands):



Property and equipment fair value adjustment	$	121,732
Intangible assets fair value adjustment	(147,907		)
Goodwill adjustment	(135,214		)
Term Loan fair value adjustment	(18,017		)
Other assets and liabilities fair value adjustments	115
Net loss on fresh start adjustments	$	(179,291	)
Tax impact on fresh start adjustments	10,642
Net impact on retained earnings	$	(168,649	)

Reorganization Items, Net

Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Condensed Consolidated Statement of Operations as follows (dollars in thousands):



	Predecessor Company
	Period from April 1, 2018 through June 3, 2018			Three Months Ended June 30, 2017		Period from January 1, 2018 through June 3, 2018
Gain on settlement of Liabilities subject to compromise (a)	$	726,831		$	—	$	726,831
Fresh start adjustments (b)	(179,291		)	—		(179,291		)
Professional fees (c)	(29,560		)	—		(54,386		)
Non-cash claims adjustments (d)	(15,364		)	—		(15,364		)
Rejected executory contracts (e)	(2,936		)	—		(5,976		)
Other (f)	(3,312		)	—		(5,613		)
Reorganization items, net	$	496,368		$	—	$	466,201

(a) Liabilities subject to compromise have been, or will be settled in accordance with the Plan.

(b) Revaluation of certain assets and liabilities upon the adoption of fresh start accounting.

(d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court.

(e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts.

(f) Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process and the write-off of Predecessor director and officer insurance policies.

4. Revenues

Adoption of ASC Topic 606 - Revenue from Contracts with Customers

On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under ASC 605 - Revenue Recognition ("ASC 605").

Revenue Recognition

Under current and prior revenue guidance, revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The following table presents revenues disaggregated by revenue source (dollars in thousands):



	Successor Company		Predecessor Company
	Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018		Three Months Ended June 30, 2017
Cumulus Radio Station Group
Advertising revenues (broadcast, digital, non-traditional revenue (“NTR”) and trade)	$	67,958	$	134,477	$	207,778
Non-advertising revenues (tower rental and other)	399		616		818
Total Cumulus Radio Station Group revenue	$	68,357	$	135,093	$	208,596

Westwood One
Advertising revenues (broadcast, digital and trade)	$	24,986	$	52,684	$	76,617
Non-advertising revenues (license fees and other)	1,370		2,240		4,617
Total Westwood One revenue	$	26,356	$	54,924	$	81,234

Other (1)	$	291	$	228	$	701
Total Revenue	$	95,004	$	190,245	$	290,531



	Successor Company		Predecessor Company
	Period from June 4, 2018 through June 30,		Period from January 1, 2018 through June 3, 2018		Six Months Ended June 30, 2017
Cumulus Radio Station Group
Advertising revenues (broadcast, digital, NTR and trade)	$	67,958	$	301,804	$	380,502
Non-advertising revenues (tower rental and other)	399		1,513		1,695
Total Cumulus Radio Station Group revenue	$	68,357	$	303,317	$	382,197

Westwood One
Advertising revenues (broadcast, digital and trade)	$	24,986	$	143,215	$	162,262
Non-advertising revenues (license fees and other)	1,370		6,500		8,828
Total Westwood One revenue	$	26,356	$	149,715	$	171,090

Other (1)	$	291	$	892	$	1,274
Total Revenue	$	95,004	$	453,924	$	554,561


(1)	Other is comprised of revenue from certain digital commerce and broadcast software sales and services.

Advertising Revenues

Substantially all of the Company’s revenues are from advertising, primarily generated through the sale of broadcast radio advertising time, sale of advertising and promotional opportunities across digital audio networks to local, regional, and national advertisers and remote/event revenue. The Company considers each advertising element a separate contract, and thus a separate performance obligation, as a result of both the customer’s and the Cumulus Radio Station Group or Westwood One’s respective ability to stop transferring promised goods or services during the contract term without notice or penalty. Thus, revenue associated with these contracts is recognized at the time advertising or other services, for example hosting an event, is delivered.

In assessing performance obligations at the Radio Station Group, each advertisement, banner, etc. is considered to be a separate contract and thus a separate performance obligation. In assessing performance obligations at Westwood One, each element of a campaign is considered to be a separate contract and thus a separate performance obligation.

The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is not significant. There are no further obligations for returns, refunds or similar obligations related to the contracts. The Company records deferred revenues when cash payments are received in advance of performance, including amounts which are refundable.

Non-Advertising Revenues

Non-advertising revenue does not constitute a material portion of the Company’s revenue and primarily consists of licensing content and tower rental agreements, and to a lesser degree, sublease income, and satellite rental income. Rental agreements typically range from one to five years with renewal clauses. Such agreements typically contain a stated recurring monthly amount due, which is recognized upon delivery of services or passage of time. These agreements contain a single performance obligation.

Trade and Barter Transactions

The Company provides advertising time in exchange for goods or services such as products, supplies, or services. Trade revenue totaled $3.3 million, $7.7 million and $19.0 million for the period from June 4, 2018 through June 30, 2018, April 1, 2018 through June 3, 2018 and for the period from January 1, 2018 through June 3, 2018. Trade revenue of approximately $8.9 million and $20.3 million was recognized for the three and six month periods ended June 30, 2017, respectively.

Programming barter revenue is derived from an exchange of programming content, to be broadcast on the Company’s airwaves, for commercial inventory, usually in the form of commercial placements inside of the show exchanged. The revenue is recognized as the commercial spots are aired, in the same pattern as the Company’s normal cash spot revenue is recognized. Trade and barter value is based upon management’s estimate of the fair value of the products, supplies or services received.

Variable Consideration

Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduces revenue recognized accordingly. The Company has not had, nor does it believe that there will be, significant changes to its estimates of variable consideration. In addition, variable consideration has not historically been material to the Company’s financial statements.

Customer Options that Provide a Material Right

ASC 606 requires the allocation of a portion of a transaction price of a contract to additional goods or services transferred to a customer that are considered to be a separate performance obligation and provide a material right to the customer.

To satisfy the requirement of accounting for the material right, the Company considers both the transaction price associated with each spot as well as the timing of revenue recognition for the spots. Campaigns often include bonus spots, which are radio advertising spots, free of charge, explicitly within the contract terms or implicitly agreed upon with the customer consistent with industry standard practices. The Company typically runs these bonus spots related to a particular campaign concurrently with the paid spots from the same campaign. As the delivery and revenue recognition for both paid and bonus spots generally occur within the same period, the time of delivery and recognition of revenue is insignificant.

Principal versus Agent Considerations

In those instances in which the Company functions as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis. In those instances where the Company functions solely as an agent or sales representative, the Company’s effective commission is presented as revenue on a net basis with no corresponding operating expenses.

The Company evaluated all revenue streams and contracts to which principal versus agent considerations applied. Using guidance from ASC 606, the Company determined that broadcast advertising revenue at both the Cumulus Radio Station Group and Westwood One should be recorded net of agency commissions and should be recognized when the programs and commercial announcements are broadcast.

Additionally, Westwood One maintains revenue sharing agreements and inventory representation agreements with various radio companies. For all revenue sharing and inventory representation agreements, the Company performs an analysis in accordance with ASC 606 to determine if the amounts should be recorded on a gross or net basis. Consistent with the prior revenue recognition guidance, Westwood One continues to record all revenue sharing agreements on a gross basis with the shared revenue amount recorded within Content costs in the Consolidated Statements of Operations and inventory representation agreements on a net basis.

Practical Expedients

The Company applied the completed contract practical expedient guidance under ASC 606 to contracts that were not considered completed as of January 1, 2018.

The Company capitalizes certain incremental costs of obtaining contracts with customers which it expects to recover.

For contracts with a client whose customer life covers a year or less, companies may use a practical expedient that allows the option to expense commissions as they are incurred. For contracts where the new and renewal commission rates are commensurate, the amortization period assessed by management was the contract life. As such, the Company will continue to expense commissions as incurred for the revenue streams where the new and renewal commission rates are commensurate and the contract life is less than one year. These costs are recorded within Sales, General and Administrative expense. The Company does not apply the practical expedient option to new local direct contracts, as the commission rates for new and renewal contracts is not commensurate and the customer life is typically in excess of one year. As of June 30, 2018, the Company recorded an asset of approximately $3.5 million related to the unamortized portion of commission expense on new local direct revenue. Under ASC 605, commission expense on new local direct revenue would have been expensed as incurred.

Under certain practical expedients elected, the Company did not disclose the amount of consideration allocated to the remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for reporting periods presented before January 1, 2018.

Results for reporting periods beginning after January 1, 2018 are presented under the amended accounting guidance, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historic accounting guidance.

The Company has elected to apply the practical expedient which allows it to not disclose information about remaining performance obligations that have original expected durations of one year or less. The Company has contracts with customers which the Company believes will produce revenue beyond one year. From these contracts, the Company estimates it will recognize approximately $6.2 million of revenue in 2019.

5. Restricted Cash

As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the ~~Company’s balance sheet~~Condensed Consolidated Balance Sheets included approximately ~~$7.7~~$29.2 million and ~~$8.0~~$9.0 million, respectively, in restricted cash. Restricted cash is used primarily ~~to collateralize~~for collateralizing standby letters of credit for certain leases and insurance policies, ~~in addition to~~ securing certain transactions as dictated by the financial institutions used by the ~~Company.~~Company and reserving for professional fees related to the Company’s Chapter 11 Cases.

3.6. Property and Equipment, net



		Successor Company			Predecessor Company
(dollars in thousands)	Estimated Useful Life	As of June 30, 2018			As of December 31, 2017
Land	N/A	$	79,464		$	86,308
Broadcasting and other equipment	3 to 30 years	59,815			240,740
Computer and capitalized software costs	1 to 3 years	11,914			29,793
Furniture and fixtures	5 years	4,474			15,278
Leasehold improvements	5 years	24,144			42,504
Buildings	9 to 20 years	27,189			51,549
Construction in progress	N/A	30,214			32,463
		237,214			498,635
Less: accumulated depreciation		(1,687		)	(307,031		)
Property and equipment, net		$	235,527		$	191,604

In connection with the application of fresh start accounting on June 3, 2018, the Company recorded fair value adjustments disclosed in Note 3, “Fresh Start Accounting.” Accumulated depreciation was therefore eliminated as of that date.

The table presented above does not reflect certain land in the Company's Washington, DC market which has been classified as held for sale in the accompanying unaudited Condensed Consolidated Balance Sheet at June 30, 2018 as disclosed in Note 1, "Nature of Business, Interim Financial Data and Basis of Presentation".

7. Intangible Assets and Goodwill

The ~~following tables present~~carrying value of goodwill ~~and accumulated impairment losses on a segment and consolidated basis~~by reportable segments is as ~~of January 1, 2017 and September 30, 2017~~follows (dollars in thousands):

~~Radio Station Group~~

Balance as of January 1, 2017:
Goodwill $ 1,278,526
Accumulated impairment losses (1,278,526 )
Total $ —
Balance as of September 30, 2017:
Goodwill 1,278,526
Accumulated impairment losses (1,278,526 )
Total $ —

~~Westwood One~~

Balance as of January 1, 2017:
Goodwill $ 304,280
Accumulated impairment losses (169,066 )
Total $ 135,214
Balance as of September 30, 2017:
Goodwill 304,280
Accumulated impairment losses (169,066 )
Total $ 135,214

~~Consolidated~~


Balance as of January 1, 2017:
				Cumulus Radio Station Group			Westwood One			Consolidated
Balance as of January 1, 2018 (Predecessor Company)
Goodwill	$	1,582,806		$	1,278,526		$	304,280		$	1,582,806
Accumulated impairment losses	(1,447,592		)	(1,278,526		)	(169,066		)	(1,447,592		)
Total	$	135,214
Balance as of September 30, 2017:
Balance as of January 1, 2018 (Predecessor Company)				$	—		$	135,214		$	135,214
Balance as of June 3, 2018 (Predecessor Company)
Goodwill	1,582,806			$	1,278,526		$	304,280		$	1,582,806
Accumulated impairment losses	(1,447,592		)	(1,278,526		)	(169,066		)	(1,447,592		)
Total	$	135,214
Balance as of June 3, 2018 (Predecessor Company)				$	—		$	135,214		$	135,214
Impact of fresh start accounting				—			(135,214		)	(135,214		)
Balance as of June 4, 2018 (Successor Company)				$	—		$	—		$	—

Prior to the application of fresh start accounting, goodwill represented the excess of the amount paid to acquire businesses over the fair value of their net assets at the date of the acquisition. The ~~following table shows~~Company eliminated goodwill upon application of fresh start accounting (see Note 3, “Fresh Start Accounting”).

Intangible Assets

In connection with the ~~Company's~~Company’s adoption of fresh start accounting on the Effective Date, intangible ~~asset balances~~assets and related accumulated amortization of the Predecessor Company were eliminated. Intangible assets of the Successor Company were identified and valued at their fair value, as ~~of December 31, 2016 and September 30, 2017,~~determined by valuation specialists. The Company’s intangible assets are as ~~well as dispositions and amortization during the period~~follows (dollars in thousands):



Intangible Assets:	FCC Licenses			Definite-Lived			Total

Balance as of January 1, 2018 (Predecessor Company)	$	1,203,809		$	82,994		$	1,286,803
Dispositions	—			—			—
Amortization	—			(7,938		)	(7,938		)
Balance as of June 3, 2018 (Predecessor Company)	$	1,203,809		$	75,056		$	1,278,865
Impact of fresh start accounting	(285,309		)	137,402			(147,907		)
Balance as of June 4, 2018 (Successor Company)	$	918,500		$	212,458		$	1,130,958
Amortization	—			(2,693		)	(2,693		)
Acquisitions	17,476			—			17,476
Balance as of June 30, 2018 (Successor Company)	$	935,976		$	209,765		$	1,145,741

~~Intangible Assets:~~

FCC Licenses Definite-Lived Total
Balance as of December 31, 2016 $ 1,540,183
$ 116,499
$ 1,656,682
Dispositions (465 ) —
(465 )
Amortization —
(26,130 ) (26,130 )
Balance as of September 30, 2017 $ 1,539,718
$ 90,369
$ 1,630,087

As part of fresh start accounting, the Company removed existing intangibles and accumulated amortization and recorded an adjustment of $147.9 million to reflect the fair value of intangibles. (See Note 3, “Fresh Start Accounting").

The Company performs ~~annual~~ impairment testing of its Federal Communications Commission ~~("FCC"~~(“FCC”) licenses and goodwill annually as of December 31 of each year and on an interim basis if events or circumstances indicate that FCC licenses or goodwill may be impaired. The Company reviews the carrying value of its definite-lived intangible assets, primarily broadcast ~~licenses,~~advertising and affiliate relationships for recoverability prior to its annual impairment test of goodwill and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events and circumstances did not necessitate anany interim impairment ~~test~~tests during the period ended June 30, 2018, nor did the Company have goodwill as of ~~September~~the period ended June 30, ~~2017.~~

2018.

4.8. Long-Term Debt

The Company’s long-term debt consisted of the following as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017 (dollars in thousands):

September 30, 2017 December 31, 2016
Term loan:
Term loan $ 1,728,614
$ 1,810,266
Less: unamortized term loan discount and debt issuance costs (23,054 ) (29,909 )
Total term loan 1,705,560
1,780,357
7.75% senior notes: 610,000
610,000
Less: unamortized debt issuance costs (4,335 ) (6,200 )
Total 7.75% senior notes 605,665
603,800
Less: Current portion of long-term debt —
—
Long-term debt, net $ 2,311,225
$ 2,384,157



	Successor Company		Predecessor Company
	June 30, 2018		December 31, 2017
Predecessor Term Loan	$	—	$	1,722,209
7.75% Senior Notes:	—		610,000
Long-term debt, net subject to compromise	$	—	$	2,332,209
Less: Amounts reclassified to Liabilities subject to compromise	—		(2,332,209		)
Term Loan	$	1,300,000	$	—
Less: Current portion	13,000		—
Long-term debt, net	$	1,287,000	$	—

~~Amended~~

In connection with the filing of the Bankruptcy Petitions, all amounts outstanding under the Predecessor Term Loan and ~~Restated~~ the 7.75% Senior Notes had been reclassified to Liabilities subject to compromise in the Condensed Consolidated Balance Sheet as of December 31, 2017.

Credit Agreement

On ~~December 23, 2013,~~ the ~~Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”), among the Company,~~Effective Date, Cumulus Media New Holdings Inc., a ~~direct~~Delaware corporation (“Holdings”) and an indirectly wholly-owned subsidiary of the Company, ~~(“Cumulus Holdings”), as borrower,~~ and certain ~~lenders and agents. The~~of the Company’s other subsidiaries, entered into the Credit Agreement ~~consists~~with the holders of aclaims with respect to the Predecessor Term Loan ~~(the “Term Loan”) maturing in December 2020~~under the Canceled Credit Agreement, as term loan lenders. Pursuant to the Credit Agreement, the lenders party thereto were deemed to have provided Holdings and ~~a $200.0 million revolving credit facility,~~its subsidiaries that are party thereto as co-borrowers with a ~~$30.0 million sublimit for letters of credit (the “Revolving Credit Facility”) maturing in December 2018.~~

~~At September 30, 2017, and December 31, 2016, the Company had $1.729~~$1.3 billion ~~and $1.810 billion, respectively, outstanding under the~~senior secured Term ~~Loan and no amounts outstanding under the Revolving Credit Facility.~~Loan.

~~On August 29, 2017, we used proceeds from sale of certain land and buildings to repay approximately $81.7 million of the Term Loan borrowings.~~

~~Notwithstanding the stated maturity date of the Term Loan, if on January 30, 2019, the aggregate principal amount of 7.75% Senior Notes~~Amounts outstanding ~~exceeds $200.0 million, the Term Loan maturity date shall be accelerated to January 30, 2019.~~

~~Borrowings~~ under the Credit Agreement bear interest at a per annum rate equal to (i) the Alternative Base Rate (as defined below) plus an applicable margin of 3.50%, subject to an Alternative Base Rate floor of 2.00%, or (ii) the London Inter-bank Offered Rate (“LIBOR”) plus an applicable margin of 4.50%, subject to a LIBOR floor of 1.00%. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. At June 30, 2018, the Term Loan bore interest at 6.6% per annum.

Amounts outstanding under the Term Loan amortize in equal quarterly installments of 0.25% of the original principal amount of the Term Loan with the balance payable on the maturity date. The maturity date of the Term Loan is May 15, 2022.

The Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature. Events of default in the Credit Agreement include, among others: (a) the failure to pay when due the obligations owing thereunder; (b) the failure to perform (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against Holdings or any of its subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use, any one or more of, any material FCC licenses; (g) any representation or warranty made, or report, certificate or financial statement delivered, to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in Credit Agreement). Upon the occurrence of an event of default, the Agent may, with the consent of, or upon the request of, the required lenders, accelerate the Term Loan and exercise any of its rights as a secured party under the Credit Agreement and the ancillary loan documents provided, that in the case of certain bankruptcy or insolvency events with respect to a borrower, the Term Loan will automatically accelerate.

The Credit Agreement does not contain any financial maintenance covenants. The Credit Agreement provides that Holdings will be permitted to enter into either a revolving credit facility or receivables facility providing commitments of up to $50.0 million, subject to certain conditions. For additional information see Note 16, “Subsequent Event."

The borrowers may elect, at their option, to prepay amounts outstanding under the Credit Agreement without premium or penalty (except that any prepayment during the period of six months following the closing of the Credit Agreement would require a premium equal to 1.00% of the prepaid principal amount). The borrowers may be required to make mandatory prepayments of the Term Loan upon the occurrence of specified events as set forth in the Credit Agreement, including upon the sale of certain assets and from Excess Cash Flow (as defined in the Credit Agreement).

Amounts outstanding under the Credit Agreement are guaranteed by Cumulus Media Intermediate Inc. (“Intermediate Holdings”), which is a subsidiary of the Company, and the present and future wholly-owned subsidiaries of Holdings that are not borrowers thereunder, subject to certain exceptions as set forth in the Credit Agreement (the “Guarantors”) and secured by a security interest in substantially all of the assets of Holdings, the subsidiaries of Holdings party to the Credit Agreement as borrowers, and the Guarantors.

For additional information on our liquidity considerations, see "Emergence from Chapter 11; Liquidity and Going Concern Considerations" in Management's Discussion and Analysis.

Canceled Credit Agreement

The Canceled Credit Agreement consisted of a term loan with a stated maturity date in December 2020. At December 31, 2017, there was $1.7 billion outstanding under the Predecessor Term Loan.

Amounts outstanding under the Predecessor Term Loan amortized at a rate of 1.0% per annum of the original principal amount of the Predecessor Term Loan, payable quarterly, with the balance payable on the maturity date. Borrowings under the Predecessor Term Loan bore interest based on the Base Rate (as defined below) or ~~the London Interbank Offered Rate (“LIBOR”),~~LIBOR, plus 3.25% on LIBOR-based borrowings and 2.25% on Base Rate-based borrowings. LIBOR-based borrowings are subject to a LIBOR floor of 1.0% ~~under the Term Loan.~~. Base Rate-based borrowings ~~are~~were subject to a Base Rate floor of 2.0% ~~under the Term Loan.~~. Base Rate iswas defined, for any day, as the rate per annum equal to the highest of (i) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 0.5%, (ii) the prime commercial lending rate of JPMorgan Chase Bank, N.A., as established from time to time, and (iii) 30 day LIBOR plus 1.0%. ~~Amounts outstanding~~

As a result of the filing of the Bankruptcy Petitions, Old Cumulus was required to make adequate protection payments on the Predecessor Term Loan. The amounts of these payments were calculated under the same terms as the interest and at the rates described above. During the pendency of Bankruptcy Petitions, ASC 852 required Old Cumulus to recognize the adequate protection payments as reductions in the principal balance of the Predecessor Term Loan. As a result, Old Cumulus applied adequate protection payments of approximately $37.8 million to the principal balance of the Predecessor Term Loan ~~amortize at a rate of 1.0% per annum~~for the period from January 1, 2018 through June 3, 2018, which in turn, caused interest expense to be lower by approximately $37.1 million than it would have been absent the filing of the ~~original principal amount of the Term Loan, payable quarterly, with the balance payable on the maturity date. At~~ ~~September 30, 2017, the Term Loan bore interest at 4.49% per annum.~~

~~Under the terms of the Credit Agreement, a commitment fee in the amount of 0.50% per year, payable monthly, is payable on the unused portion of the commitments.~~Bankruptcy Petitions.

~~The representations, covenants~~On the Effective Date, the Predecessor Term Loan was canceled and events of default in the Credit Agreement are customary for financing transactions of this nature. Events of default in the Credit Agreement include, among others: (a) the failure to pay obligations when due; (b) the failure to comply with (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against the Company or any ofall liabilities thereunder were discharged.

its restricted subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use one or more of, any material FCC licenses; (g) any representation of warranty made, or report, certificate or financial statement delivered to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in the Credit Agreement). Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Credit Agreement and the ancillary loan documents as a secured party.

In the event amounts are outstanding under the Revolving Credit Facility or any letters of credit are outstanding that have not been collateralized by cash as of the end of each quarter, the Credit Agreement requires compliance with a consolidated first lien leverage ratio covenant. The required ratio at September 30, 2017 was 4.25 to 1.0, and the first lien net leverage ratio covenant periodically decreases until it reaches 4.0 to 1.0 on March 31, 2018. At September 30, 2017, the Company's actual leverage ratio was in excess of the required ratio. The Company had no borrowings outstanding under the Revolving Credit Facility.

Certain mandatory prepayments on the Term Loan are required upon the occurrence of specified events, including upon the incurrence of certain additional indebtedness, upon the sale of certain assets and upon the occurrence of certain condemnation or casualty events, and from excess cash flow.

The Company’s, Cumulus Holdings’ and their respective restricted subsidiaries’ obligations under the Credit Agreement are collateralized by a first priority lien on substantially all of the Company’s, Cumulus Holdings’ and their respective restricted subsidiaries’ assets (excluding the Company’s accounts receivable collateralizing the Company's revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Capital Finance ("Wells Fargo") as described below) in which a security interest may lawfully be granted, including, without limitation, intellectual property and substantially all of the capital stock of the Company’s direct and indirect domestic wholly-owned subsidiaries and 66% of the capital stock of any future first-tier foreign subsidiaries. In addition, Cumulus Holdings’ obligations under the Credit Agreement are guaranteed by the Company and substantially all of its restricted subsidiaries, other than Cumulus Holdings.

As described in more detail in Note 13, "Subsequent Events", on October 30, 2017, the Restructuring Committee of the Board of Directors authorized the Company to forgo the November 1, 2017, scheduled interest payment on the Company's 7.75% Senior Notes (defined below), thereby entering into the applicable 30-day grace period under the terms of the Indenture. This nonpayment constitutes a "default" under the terms of such Indenture, which matures into an "Event of Default" if not cured or waived before the expiration of the 30-day grace period on December 1, 2017. Such an Event of Default, if and when it occurs, would also be an event of default under the Credit Agreement.

~~7.75% Senior Notes~~

On May 13, 2011, ~~the Company~~Old Cumulus issued ~~$610.0 million aggregate principal amount of 7.75% Senior Notes due 2019 (the "7.75% Senior Notes"). Proceeds from the sale of~~ the 7.75% Senior ~~Notes were used to, among other things, repay the $575.8 million outstanding under the term loan facility under the Company's prior credit agreement.~~

Notes. On September 16, 2011, ~~the Company~~Old Cumulus and ~~Cumulus Holdings~~one of its subsidiaries entered into a supplemental ~~Indenture~~indenture with the trustee under the indenture governing the 7.75% Senior Notes which provided for, among other things, the (i) assumption by ~~Cumulus Holdings~~such subsidiary of all obligations of Old Cumulus related to the ~~Company;~~7.75% Senior Notes; (ii) substitution of ~~Cumulus Holdings~~that subsidiary for ~~the Company~~Old Cumulus as issuer; (iii) release of ~~the Company~~Old Cumulus from all obligations as original issuer; and (iv) ~~Company’s~~ guarantee by Old Cumulus of all of ~~Cumulus Holdings’~~the subsidiary issuer's obligations, in each case under the indenture and the 7.75% Senior Notes.

Interest on the 7.75% Senior Notes iswas payable on each May 1 and November 1 of each year. The 7.75% Senior Notes were scheduled to mature on May 1, ~~2019~~.2019. While under bankruptcy protection, Old Cumulus did not make interest payments or recognize interest expense on the 7.75% Senior Notes. As a result, Old Cumulus's interest expense for the period from January 1, 2018 through June 3, 2018, was approximately $22.1 million lower than it would have been absent the filing of the voluntary petitions for reorganization.

~~Cumulus Holdings, as issuer of~~On the Effective Date, the 7.75% Senior Notes may redeem all or part of the 7.75% Senior Notes at any time at a price equal to 100% of the principal amount, plus a “make-whole” premium. If Cumulus Holdings sells certain assets or experiences specific kinds of changes in control, it will be required to make an offer to purchase the ~~7.75%~~ ~~Senior Notes.~~

~~In connection with the substitution of Cumulus Holdings as the issuer of the~~ ~~7.75%~~ ~~Senior Notes, the Company also guaranteed the~~ ~~7.75%~~ ~~Senior Notes. In addition, each existing~~were canceled and future domestic restricted subsidiary that guarantees the Company’s indebtedness, Cumulus Holdings’ indebtedness or indebtedness of the Company’s subsidiary guarantors (other than the Company’s subsidiaries that hold the licenses for the Company’s radio stations) guarantees, and will guarantee, the ~~7.75%~~ ~~Senior Notes. The~~ ~~7.75%~~ Senior Notes are senior unsecured obligations of Cumulus Holdings and rank equally in right of payment to all existing and future senior unsecured debt of Cumulus Holdings and senior in right of payment to all future subordinated debt of Cumulus Holdings. The ~~7.75%~~ Senior Notes guarantees are the Company’s and the other guarantors’ senior unsecured obligations and rank equally in right of payment to all of the Company’s and the other guarantors’ existing and future senior debt and senior in right of payment to all of the Company’s and the other guarantors’ future subordinated debt.

~~The~~ ~~7.75%~~ Senior Notes and the guarantees are effectively subordinated to any of Cumulus Holdings’, the Company’s or the guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt. In addition, the ~~7.75%~~ ~~Senior Notes and the guarantees are structurally subordinated to~~ all liabilities ~~of the Company and its subsidiaries.~~

The Indenture contains representations, covenants and events of default customary for financing transactions of this nature. As described in more detail in Note 13, “Subsequent Events", on October 30, 2017, the Restructuring Committee of the Board of Directors authorized the Company to forgo the November 1, 2017 scheduled interest payment on the 7.75% Senior Notes, thereby entering into the applicable 30-day grace period under the Indenture. This nonpayment constitutes a “default” under the Indenture, which matures into an “Event of Default” if not cured or waived before the expiration of the 30-day grace period on December 1, 2017. Upon the occurrence of an Event of Default, the trustee under the Indenture, or the holders of a specified percentage of 7.75% Senior Notes, may declare all outstanding amounts due and payable. Such an “Event of Default”, if and when it occurs, would also be an event of default under the Credit Agreement.

~~Accounts Receivable Securitization Facility~~

On December 6, 2013, the Company entered into a 5-year, $50.0 million Securitization Facility with Wells Fargo (as successor to General Electric Capital Corporation), as a lender, swingline lender and administrative agent (together with any other lenders party thereto from time to time, the “Lenders”).

In connection with the entry into the Securitization Facility, pursuant to a Receivables Sale and Servicing Agreement, dated as of December 6, 2013 (the “Sale Agreement”), certain subsidiaries of the Company (collectively, the “Originators”) sell and/or contribute their existing and future accounts receivable (representing up to all of the Company’s accounts receivable) to a special purpose entity and wholly-owned subsidiary of the Company (the “SPV”). The SPV may thereafter make borrowings from the Lenders, which borrowings are secured by those receivables, pursuant to an Amended and Restated Receivables Funding and Administration Agreement, dated as of March 15, 2017 (the “Funding Agreement”). Cumulus Holdings services the accounts receivable on behalf of the SPV.

Advances available under the Funding Agreement at any time are based on advance rates relating to the value of the eligible receivables held by the SPV at that time. The Securitization Facility matures on December 6, 2018, subject to earlier termination at the election of the SPV. Advances bear interest based on either LIBOR plus 2.50% or the Index Rate (as defined in the Funding Agreement) plus 1.00%. The SPV is also required to pay a monthly fee based on any unused portion of the Securitization Facility. The Securitization Facility contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type.

~~At September 30, 2017 and December 31, 2016, there~~thereunder were ~~no amounts outstanding under the Securitization Facility.~~

~~Amortization of Debt Discount and Debt Issuance Costs~~

For the three and nine months ended September 30, 2017, the Company amortized $2.6 million and $7.7 million, respectively, of debt discount and debt issuance costs related to its Term Loan and 7.75% Senior Notes. For the three and nine months ended September 30, 2016, the Company amortized $2.5 million and $7.3 million, respectively, of debt discount and debt issuance costs related to its Term Loan and 7.75% Senior Notes.discharged.

5.9. Fair Value Measurements

~~The three levels of the fair value hierarchy to be applied when determining fair value of financial instruments are described below:~~

~~Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access;~~

Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities; and

~~Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~

The following table shows the gross amount and fair value of the ~~Company’s~~Term Loan, the Predecessor Term Loan and 7.75% Senior Notes (dollars in thousands):


					Successor Company		Predecessor Company
	September 30, 2017		December 31, 2016		June 30, 2018		December 31, 2017
Term Loan:
Gross value	$	1,728,614	$	1,810,266	$	1,300,000	$	—
Fair value - Level 2	1,408,820		1,226,455		$	1,300,000	$	—
Predecessor Term Loan:
Gross value					$	—	$	1,722,209
Fair value - Level 2					$	—	$	1,481,100
7.75% Senior Notes:
Gross value	$	610,000	$	610,000	$	—	$	610,000
Fair value - Level 2	179,950		249,673		$	—	$	105,988

As of ~~September~~June 30, ~~2017,~~2018, the Company ~~obtained a level 2 third-party valuation of 81.5%~~compared the implied credit spread from an assumed par issuance price to market data to calculate the fair value of the Term ~~Loan and 29.5% to calculate the level 2 fair value of the~~ ~~7.75%~~ ~~Senior Notes.~~Loan.

As of December 31, ~~2016,~~2017, Old Cumulus used the ~~Company obtained~~closing trading prices from a ~~level 2 third-party valuation~~third party of ~~67.8%~~86.0% to calculate the fair value of the Predecessor Term Loan and ~~40.9%~~17.4% to calculate the ~~level 2~~ fair value of the 7.75% Senior Notes.

~~6. Stockholders’ Equity~~10. Income Taxes

~~For information~~

The Company’s income tax provision (benefit) and effective tax rate were as follows:



	Successor Company			Predecessor Company						Predecessor Company
(in thousands, except percentages)	Period from June 4, 2018 through June 30, 2018			Period from April 1, 2018 through June 3, 2018			Three Months Ended June 30, 2017			Period from January 1, 2018 through June 3, 2018			Six Months Ended June 30, 2017
Income (loss) before income taxes	$	7,586		$	524,416		$	12,906		$	519,297		$	(515	)
Effective tax rate	34.4		%	(33.7		)%	56.1		%	(34.1		)%	(234.6		)%
Provision (benefit) for income taxes	$	2,606		$	(176,741	)	$	7,234		$	(176,859	)	$	1,208
Provision (benefit) for income taxes at 21% or 35%	$	1,593		$	110,127		$	4,517		$	109,052		$	(180	)
Difference between tax at effective versus statutory rate	$	1,013		$	(286,868	)	$	2,717		$	(285,911	)	$	1,388

The difference between the effective tax rate and the federal statutory rate of 21.0% for the Predecessor Company period from January 1, 2018 to June 3, 2018 and the period from April 1, 2018 to June 3, 2018 relates to the income tax exclusion of cancellation of indebtedness income ("CODI") arising from the effectiveness of the Plan, the Company's elections to increase the tax basis in certain assets, statutory state and local income taxes, the impact of non-deductible expenses and changes to the valuation allowance.

Under the Plan, a substantial portion of the Predecessor Company’s prepetition debt securities and other obligations were extinguished and the Company recognized CODI. The Internal Revenue Code of 1986, as amended (“IRC”), provides that a debtor in a bankruptcy case may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of any CODI realized by the debtor company as a result of the consummation of a plan of reorganization. Substantially all of the Company’s tax attributes are expected to be reduced when the statutory reduction occurs on the ~~Company's October 12, 2016 Reverse Stock Split~~first day of the Company’s tax year subsequent to the date of emergence which is expected to be January 1, 2019.

IRC Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in losses, against future U.S. taxable income in the event of a change in ownership. The Debtors’ emergence from chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of IRC Section 382, with the limitation based on the value of the corporation as of the emergence date. The ownership changes and resulting ~~adjustments~~annual limitation may result in the expiration of net operating losses or other tax attributes otherwise available, with a corresponding decrease in the Company’s valuation allowance.

In conjunction with the Plan, the Company implemented a series of internal reorganization transactions through which it transferred the assets of Old Cumulus to ~~authorized, issued and outstanding common stock, warrants and options, see~~an indirectly wholly-owned subsidiary of the reorganized Cumulus Media Inc. (see Note 1, ~~"Description~~“Nature of Business, Interim Financial Data and Basis of ~~Presentation: Reverse Stock Split."~~Presentation”). The transfer of assets for income tax purposes results in a taxable sale of assets and stock, whereby the Company receives a step up in the tax basis of a significant portion of the underlying assets transferred, resulting in a future tax benefit.

The application of fresh start accounting on June 4, 2018 resulted in the re-measurement of deferred income taxes associated with the revaluation of the Company’s assets and liabilities (see Note 3, “Fresh Start Accounting”). As a result, net deferred income tax liabilities decreased $10.6 million. The Company continues to consider whether its deferred income tax assets are more likely than not to be realized based on its ability to generate sufficient taxable income in future years. At this time, the Company has determined that any tax attribute carryovers in existence prior to the date of reorganization or generated as a result of the reorganization are not more likely than not to be realized, as a result of attribute reductions, statutory limitations on utilization, and lack of future income at Old Cumulus.

The difference between the Company’s effective tax rate and the statutory rate of 21% for the Successor Company period June 4, 2018 through June 30, 2018 is attributable to statutory state and local income taxes, the tax effect of certain statutory non-deductible expenses, changes in valuation allowance, and the tax effect of certain changes in uncertain tax positions.

The difference between the 56.1% effective tax rate and the federal statutory rate of 35.0% for the Predecessor Company for the three months ended June 30, 2017 primarily relates to statutory state and local income taxes and the tax effect of certain statutory non-deductible items.

The primary driver of the income tax expense for the Predecessor Company six months ended June 30, 2017 was the tax effect of certain stock option terminations and forfeitures resulting from the adoption of the 2017 incentive plan.

The Company continually reviews the adequacy of the valuation allowance and recognizes the benefits of deferred tax assets only as a reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740, Income Taxes (“ASC 740”). As of June 30, 2018, the Company continues to maintain a full valuation allowance on loss carryforwards for which the Company does not believe it will be able to meet the more likely than not recognition standard for recovery. The valuation of deferred tax assets requires judgment about future profitability as well as the assessment of the likely future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.

11. Stockholders' Equity

Successor Common Stock

Pursuant to the Company’s amended and restated certificate of incorporation (the “Charter”), the Company is authorized to issue an aggregate of ~~269,080,609~~300,000,000 shares of stock ~~each with a par value~~divided into three classes consisting of: (i) 100,000,000 shares of ~~$0.01~~new Class A common stock; (ii) 100,000,000 shares of new Class B common stock; and (iii) 100,000,000 shares of preferred stock.

Each share of new Class A common stock is entitled to one vote per share on each matter submitted to a vote of the Company’s stockholders. Except as provided below and as otherwise required by the Charter, the Company’s bylaws or by applicable law, the holders of new Class A common stock shall vote together as one class on all matters submitted to a vote of stockholders generally (or if any holders of shares of preferred stock are entitled to vote together with the holders of common stock, as a single class with such holders of shares of preferred stock).

Holders of new Class B common stock are generally not entitled to vote such shares on matters submitted to a vote of the Company’s stockholders. Notwithstanding the foregoing, holders of new Class B common stock are entitled to one vote per share of new Class B common stock, voting as a separate class, on any proposed amendment or modification of any specific rights or obligations that affect holders of new Class B common stock and that do not similarly affect the rights or obligations of the holders of new Class A common stock. In addition, holders of new Class B common stock are entitled to one vote per share of new Class B common stock, voting together with the holders of new Class A common stock, on each of the following matters, if and only if any such matter is submitted to a vote of the stockholders (provided that the Company may take action on any of the following without a vote of the stockholders to the extent permitted by law):


a)	the retention or dismissal of outside auditors by the Company;


b)	any dividends or distributions to the stockholders of the Company;


c)	any material sale of assets, recapitalization, merger, business combination, consolidation, exchange of stock or other similar reorganization involving the Company or any of its subsidiaries;


d)	the adoption of any new or amended charter;


e)	other than in connection with any management equity or similar plan adopted by the Board, any authorization or issuance of equity interests, or any security or instrument convertible into or exchangeable for equity interests, in the Company or any of its subsidiaries; and


f)	the liquidation of the Company or any of its subsidiaries.

The Charter and bylaws do not provide for cumulative voting. The holders of a plurality of the shares of new common stock entitled to vote and present in person or represented by proxy at any meeting at which a quorum is present called for the purpose of electing directors will be entitled to elect the directors of the Company. The holders of a majority of the shares of new common stock issued and outstanding and entitled to vote, and present in person or represented by proxy, will constitute a quorum for the transaction of business at all meetings of the stockholders.

Subject to the preferences applicable to any preferred stock outstanding at any time, if any, the holders of shares of new common stock shall be entitled to receive such dividends and other distributions in cash, property or shares of stock as may be declared thereon by the Board from time to time out of the assets or funds legally available; except that in the case of dividends or other distributions payable on the new Class A common stock or new Class B common stock in shares of such stock, including distributions pursuant to stock splits or dividends, only new Class A common stock will be distributed with respect to new Class A common stock and only new Class B common stock will be distributed with respect to new Class B common stock. In no event will any of the new Class A common stock or new Class B common stock be split, divided or combined unless each other class is proportionately split, divided or combined.

As of the date hereof, no shares of preferred stock are outstanding. The Charter provides that the Board may, by resolution, establish one or more classes or series of preferred stock having the number of shares and relative voting rights, designations and other rights, preferences, and limitations as may be fixed by them without further stockholder approval. The holders of any such preferred stock may be entitled to preferences over holders of common stock with respect to dividends, or upon a liquidation, dissolution, or the Company’s winding up, in such amounts as are established by the resolutions of the Board approving the issuance of such shares.

The new Class B common stock is convertible at any time, or from time to time, at the option of the holders (provided that the prior consent of any governmental authority required to make such conversion lawful shall have been obtained and a determination by the Company has been made that the applicable holder does not have an attributable interest in another entity that would cause the Company to violate applicable law) into new Class A common stock on a share-for-share basis.

No holder of new common stock has any preemptive right to subscribe for any shares of the Company’s capital stock issuable in the future.

If the Company is liquidated (either partially or completely), dissolved or wound up, whether voluntarily or involuntarily, the holders of new common stock shall be entitled to share ratably in the Company’s net assets remaining after payment of all liquidation preferences, if any, applicable to any outstanding preferred stock.

In connection with the Company’s emergence from Chapter 11 and in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 1145 of the Bankruptcy Code, the Company issued a total of 11,052,211 shares of new Class A common stock, 5,218,209 shares of new Class B common stock, 3,016,853 Series 1 warrants and issued or will issue 712,736 Series 2 warrants to holders of certain claims against the Predecessor Company. The holders of claims with respect to the Predecessor Term Loan received 83.5% of the new common stock and warrants issued. The holders of unsecured claims, including claims arising from the 7.75% Senior Notes, received, in the aggregate, 16.5% of the new common stock and warrants issued. During the period from June 4, 2018 to June 30, 2018, certain holders of new Class B common stock elected to exchange 1,344,184 shares of new Class B common stock for an equal number of shares of new Class A common stock.

As of June 30, 2018, the Successor Company had 16,305,384 aggregate issued and outstanding shares of new common stock consisting of:

(i) 12,396,395 shares designated as Class A common stock;

(ii) 3,908,989 shares designated as Class B common stock

Successor Stock Purchase Warrants

On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, as warrant agent. In accordance with the Plan and pursuant to the Warrant Agreement, on the Effective Date, the Company (i) issued 3,016,853 Series 1 warrants to purchase shares of new Class A common stock or new Class B common stock, on a one-for-one basis with an exercise price of $0.0000001 per share, to certain claimants with claims against the Predecessor Company and (ii) issued or will issue 712,736 Series 2 warrants to purchase shares of new Class A common stock or new Class B common stock on a one-for-one basis with an exercise price of $0.0000001 per share, to other claimants. The Warrants expire on June 4, 2038.

The number of shares of new common stock for which a Warrant is exercisable is subject to adjustment from time to time upon the occurrence of specified events, including: (1) the subdivision or combination of the new common stock into a greater or lesser number of shares (2) upon a reclassification or recapitalization of the Company in which holders of new common stock are entitled to receive cash, stock or securities in exchange for new common stock and (3) a Change of Control (as defined in the Warrant Agreement).

The Communications Act of 1934, as amended (the “Communications Act”) restricts the Company from having more than 25% of its capital stock owned or voted by non-U.S. persons, foreign governments or non-U.S. corporations. The Company applied for a declaratory ruling from the FCC to increase the level of foreign ownership of the Company greater than that permitted under the Communications Act. Pursuant to the Warrant Agreement, upon receipt of the declaratory ruling from the FCC, the Company is required to exchange new common stock for outstanding Warrants to the extent permitted by the declaratory ruling, subject to proration among the holders of Warrants as set forth therein. If the declaratory ruling will not allow the Company to exchange for new common stock for all of the outstanding Warrants, then, in addition to proration among holders, all remaining Series 2 warrants will be mandatorily exchanged for Series 1 warrants.

Predecessor Common Stock

The Predecessor Company was authorized to issue an aggregate of 268,830,609 shares of stock divided into four classes consisting of:

(i) 93,750,000 shares designated as Class A common stock;

(ii) 75,000,000 shares designated as Class B common stock;

(iii) 80,609 shares designated as Class C common stock, and

(iv) ~~100,250,000~~100,000,000 shares of preferred stock.

On June 5, 2017, the Company’s Board of Directors adopted a stockholder rights plan, which is scheduled to expire in June 2018. Pursuant to the rights plan, the Company declared a dividend of one right for each outstanding share of Class A common stock of the Company, payable to holders of record on June 15, 2017. The rights initially tradeIn accordance with the Company’s Class A common stock and will generally become exercisable only if any person (or any persons acting in concert or as a group) acquires a voting or economic position in 4.99% or more of the Company’s outstanding Class A common stock. If the rights become exercisable, all holders of rights (other than any triggering person) will be entitled to acquire shares of Class A common stock at a 50% discount or the Company may exchange each right held by such holders for one share of Class A common stock. Under the rights plan, any person that owned more than 4.99% of the Company’s outstanding Class A common stock may continue to own its shares of Class A common stock but may not acquire a voting or economic interest in any additional shares of Class A common stock without triggering the rights plan.

~~Common Stock~~

Shares of Class A, Class B and Class C common stock are identical in all respects, except with regard to voting and conversion rights. The preferences, qualifications, limitations, restrictions, and the special or relative rights in respect of the common stock and the various classes of common stock are as follows:

~~Voting Rights.~~ The holders of shares of Class A common stock are entitled to one vote per share on any matter submitted to a vote of the stockholders of the Company, and the holders of shares of Class C common stock are entitled to ten votes forPlan, each share of ~~Class C~~old common stock ~~held. Generally,~~outstanding prior to the ~~holders of shares of Class B~~Effective Date, including all options, warrants or other rights, including rights issued under the Rights Agreement, to purchase such old common stock, ~~are not entitled to vote on any matter. However, holders~~were extinguished, canceled and discharged, and each such share, option or warrant has no further force or effect. Furthermore, all of ~~Class B common stock~~Old Cumulus’s equity award agreements under prior incentive plans, and ~~Class C common stock are entitled to a separate class vote on any amendment~~the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or modification of any specific rights or obligations of the holders of Class B common stock or Class C common stock, respectively, that does not similarly affect the rights or obligations of the holders of Class A common stock. The holders of Class A common stock and of Class C common stock vote together, as a single class, on all matters submitted to a vote to the stockholders of the Company.

effect.

~~Conversion.~~ Each holder of Class B common stock and Class C common stock is entitled to convert at any time all or any part of such holder’s shares into an equal number of shares of Class A common stock; provided, however, that to the extent that such conversion would result in the holder holding more than ~~4.99%~~ of the Class A common stock following such conversion, the holder will first be required to deliver to the Company an ownership certification to enable the Company to (a) determine that such holder does not have an attributable interest in another entity that would cause the Company to violate applicable FCC rules and regulations and (b) obtain any necessary approvals from the FCC or the Department of Justice. There were no shares of Class B common stock issued or outstanding as of September 30, 2017 or December 31, 2016.

~~The holders of all classes of common stock are entitled to share ratably in any dividends that may be declared by the Board of Directors of the Company.~~

~~As of September 30, 2017 there were no preferred shares outstanding.~~Predecessor Warrants

2009 Warrants

In June 2009, in connection with the execution of an amendment to ~~the Company's~~Old Cumulus's then-existing credit agreement, the Predecessor Company issued warrants to the lenders thereunder that ~~allow~~allowed them to acquire up to 156,250 shares of old Class A common stock at an exercise price of ~~$1.17~~$1.17 per share (the “2009 Warrants”). ~~The 2009 Warrants expire on June 29, 2019. The number of shares of Class A common stock issuable upon exercise~~None of the 2009 ~~Warrants is subject to adjustment in certain circumstances, including upon the payment of a dividend in shares of Class A common stock. None of such~~ warrants were converted during the ~~nine months ended~~ ~~September 30,~~period from December 31, 2017 to June 3, 2018, and as of such date there were 40,057 of the 2009 Warrants outstanding. The Predecessor 2009 Warrants were canceled in their entirety as of the Effective Date.

~~Company~~Citadel Warrants

As a component of ~~the Company's~~Old Cumulus’s September 16, 2011 acquisition of Citadel Broadcasting Corporation (the ~~"Citadel Merger"~~“Citadel Merger”) and the related financing transactions, the Predecessor Company issued warrants to purchase an aggregate of 9.0 million shares of old Class A common stock (the ~~"Company Warrants"~~“Citadel Warrants”) under a warrant agreement dated September 16, ~~2011 (the "Warrant Agreement").~~2011. The ~~Company~~Citadel Warrants ~~are~~were exercisable at any time prior to June 3, 2030 at an exercise price of ~~$0.01~~$0.01 per share with each ~~Company Warrant~~Citadel warrant providing the right to purchase one share. As of June 3, 2018, 31,955 Citadel Warrants remained outstanding. The ~~number of shares for which the Company~~Citadel Warrants ~~are exercisable is not subject to any anti-dilution protection, other than standard adjustments~~were canceled in ~~the case of stock splits, dividends and certain other similar events. Pursuant to the terms and conditions~~their entirety as of the Warrant Agreement, upon the request of a holder, the Company has the discretion to issue, upon exercise of the Company Warrants, shares of Class B common stock in lieu of an equal number of shares of Class A common stock and, upon request of a holder and at the Company’s discretion, the Company has the right to exchange such warrants to purchase an equivalent number of shares of Class B common stock for outstanding warrants to purchase shares of Class A common stock.

Exercise of the Company Warrants is subject to compliance with applicable FCC regulations, and the Company Warrants are exercisable provided that ownership of the Company’s securities by the holder does not cause the Company to violate applicable FCC rules and regulations relating to foreign ownership of broadcasting licenses

Holders of Company Warrants are entitled to participate ratably in any distributions on the Company’s common stock on an as-exercised basis. No distribution will be made to holders of Company Warrants or common stock if (i) an FCC ruling, regulation or policy prohibits such distribution to holders of Company Warrants or (ii) the Company’s FCC counsel opines that such distribution is reasonably likely to cause (a) the Company to violate any applicable FCC rules or regulations or (b) any holder of Company Warrants to be deemed to hold an attributable interest in the Company.

No Company Warrants were exercised during the nine months ended September 30, 2017. 0.3 million Company Warrants were exercised during the nine months ended September 30, 2016 to purchase 43,192 shares of Class A common stock. At September 30, 2017, 31,955 Company Warrants remained outstanding.Effective Date.

Crestview Warrants

Also on September 16, 2011, but pursuant to a separate warrant agreement, ~~the Company~~Old Cumulus issued warrants to purchase 1.0 million shares of Class A common stock with an exercise price, as adjusted, ~~to date,~~ of $34.56 per share (the ~~"Crestview Warrants"~~“Crestview Warrants”). The Crestview Warrants are exercisable until September 16, 2021, and the per share exercise price is subject to standard weighted-average adjustments in the event that the Company issues additional shares of common stock or common stock derivatives for less than the fair market value per share, as defined in the Crestview Warrants, as of the date of such issuance. In addition, the number of shares of Class A common stock issuable upon exercise of the Crestview Warrants, and the exercise price of the Crestview Warrants, are subject to adjustment in the case of stock splits, dividends and certain other similar events. As of ~~September 30, 2017,~~June 3, 2018, all 1.0 million Crestview Warrants remained outstanding. The Crestview Warrants were canceled in their entirety as of the Effective Date.

7.12. Stock-Based Compensation Expense

~~The~~Successor Share-Based Compensation

Upon adopting ASC 718 for awards with service conditions, the Successor Company ~~uses~~made an election to recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award. In addition, the Successor Company made an accounting policy election to recognize forfeitures of share-based awards as they occur in the period of forfeiture rather than estimating the number of awards expected to be forfeited at the grant date and subsequently adjusting the estimate when awards are actually forfeited. For stock options with service conditions only, the Company utilized the Black-Scholes option pricing model to estimate the fair value ~~on the date~~ of ~~grant of stock~~ options issued. The fair value of stock options is determined by the Company’s stock price, historical stock price volatility over the expected term of the awards, risk-free interest rates and expected dividends. ~~With respect to~~If other assumptions are used, the resulting fair value could differ. For restricted stock awards the Company ~~recognizes compensation expense over~~utilized the ~~vesting period equal~~intrinsic value method.

In accordance with the Plan and the approval of the Board, the Incentive Plan became effective as of the Effective Date. The Incentive Plan is intended to, among other things, help attract, motivate and retain key employees and directors and to reward them for making major contributions to the ~~grant date fair value~~success of the Company. The Incentive Plan permits awards to be made to consultants or to employees, directors, or consultants of an affiliate of the Company.

Unless otherwise determined by the Board, the Board’s compensation committee will administer the Incentive Plan. The Incentive Plan generally provides for the following types of awards:

stock options (including incentive options and nonstatutory options);

restricted stock;

stock appreciation rights;

dividend equivalents;

other stock-based awards;

performance awards; and

cash awards.

The aggregate number of shares ~~awarded in accordance with~~ ~~ASC 718 - Compensation - Stock Compensation. To~~of new Class A common stock reserved for issuance pursuant to the ~~extent non-vested restricted stock awards include performance~~Incentive Plan is 2,222,223 on a fully diluted basis. Awards can be made under the Incentive Plan for a period of ten years from June 4, 2018, subject to the right of the stockholders and the Board to terminate the Incentive Plan at any time.

On or ~~market vesting conditions, management uses~~about the ~~requisite service period~~Effective Date and pursuant to ~~recognize~~ the ~~cost associated with the award.~~

~~During the nine months ended September 30, 2017,~~Plan, the Company granted ~~76,250~~562,217 restricted stock units (“RSUs”) and 562,217 stock options ~~with a grant date~~(“Options”) under the Incentive Plan and the terms of the relevant restricted stock unit agreements (the “Restricted Stock Unit Agreements”) and stock option agreements (the “Option Agreements”), as applicable, to certain employees, including its executive officers (collectively, “Management”), representing an aggregate ~~fair value~~ of ~~$0.1 million. During~~1,124,434 shares of new Class A common stock (collectively, the ~~nine months ended September 30, 2016,~~“Management Emergence Awards”).

Fifty percent (50%) of the ~~Company~~RSUs granted ~~383,375 stock options with a grant date aggregate fair value of $0.5 million. The options granted in both periods range in exercise price from $0.41~~ to ~~$24.00 per share, and provide for vesting~~Management vest ratably on each of December 31, 2018, 2019 and 2020, subject to certain performance-based criteria. Of the ~~first four anniversaries~~remaining fifty percent (50%) of the ~~date of grant, with 30%~~RSUs and one hundred percent (100%) of the ~~award vesting~~Options granted to Management, 30% will vest on each of the first two anniversaries ~~thereof,~~of the Effective Date, and 20% ~~of the award vesting~~will vest on each of the ~~next two~~third and fourth anniversaries ~~thereof.~~of the Effective Date. The vesting of each of the Management Emergence Awards is also subject to, among other things, each such employee’s continued employment with the Company.

If an employee’s employment is terminated by the Company or its subsidiaries without Cause, by the employee for Good Reason (each, as defined in the award agreement) or by reason of death or Disability (as defined in the award agreement), such employee will become vested in an additional tranche of the unvested Management Emergence Awards as if the employee’s employment continued for one (1) additional year following the qualifying termination date; provided, that with respect to the Chief Executive Officer and Chief Financial Officer, (i) an amount equal to 50% of the unvested components of the Management Emergence Awards will accelerate and vest (75% if such termination occurs on or before the first (1st) anniversary of the Effective Date) and (ii) vested Options will remain outstanding until the expiration date of such Option. If an employee’s employment is terminated by the Company or its subsidiaries without Cause or by the employee for Good Reason, in either instance at any time within the three month period immediately preceding, or the twelve month period immediately following, a Change in Control (as defined in the award agreement), such employee will become vested in all unvested Management Emergence Awards.

In addition, on or about the Effective Date and pursuant to the Plan, the Company granted each non-employee director certain RSUs and Options under the Incentive Plan and the terms of the relevant Restricted Stock Unit Agreements and Option Agreements, as applicable, representing an aggregate of 56,721 shares of new Class A common stock (the “Director Emergence Awards”). The RSUs and Options granted to each non-employee director vest in four equal installments on the last day of each calendar quarter, commencing on June 30, 2018. The vesting of each of the Director Emergence Awards is also subject to, among other things, each such non-employee director’s continued role as a director with the Company. Upon a Change in Control, all unvested Director Emergence Awards will fully vest.

The total grants awarded during the period from June 4, 2018 through June 30, 2018 are presented in the table below:



	Successor Company
	Period from June 4, 2018 through June 30, 2018
Stock option grants	581,124
Restricted stock unit grants	600,031
Total grants in the successor period	1,181,155

The total share-based compensation expense included in “Corporate expenses” in the accompanying Condensed Consolidated Statements of Operations for the period from June 4, 2018 through June 30, 2018 was as follows (in thousands):



	Successor Company
	Period from June 4, 2018 through June 30, 2018
Stock option grants	$	315
Restricted stock unit grants	337
Total expense	$	652

Predecessor Share-Based Compensation

Upon adopting ASC 718 for awards with service conditions, the Predecessor Company made an election to recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award. In addition, the Predecessor Company made an accounting policy election to recognize forfeitures of share-based awards as they occur in the period of forfeiture rather than estimating the number of awards expected to be forfeited at the grant date and subsequently adjusting the estimate when awards are actually forfeited. For stock options with service conditions only, the Company utilized the Black-Scholes option pricing model to estimate the fair value of options issued. The fair value of stock options is determined by the Company’s stock price, historical stock price volatility over the expected term of the awards, risk-free interest rates and expected dividends. If other assumptions are used, the resulting fair value could differ. For restricted stock awards the Company utilized the intrinsic value method.

The total grants awarded during the period from April 1, 2018 through June 3, 2018 and January 1, 2018 through June 30, 2018, and the three and ~~nine~~six months ended ~~September~~June 30, 2017 are presented in the ~~Company recognized approximately $0.4 million and $1.4 million in stock-based~~table below:



	Predecessor Company
	Period from April 1, 2018 through June 3, 2018	Three Months Ended June 30, 2017	Period from January 1, 2018 through June 3, 2018	Six Months Ended June 30, 2017
Stock option grants	—	—	—	64,855

The total share-based compensation expense ~~related to equity awards. For~~included in “Corporate expenses” in the accompanying Condensed Consolidated Statements of Operations for the period from April 1, 2018 through June 3, 2018 and January 1, 2018 through June 3, 2018 and the three and ~~nine~~six months ended ~~September 30, 2016, the Company recognized approximately $0.7 million and $2.4 million in stock-based compensation expense related to equity awards.~~

~~As of September~~June 30, 2017 unrecognized stock-based compensation expense of approximately $0.3 million related to equity awards is expected to be recognized over a weighted-average remaining life of 2.23 years. Unrecognized stock-based compensation expense for equity awards will be adjusted for future changes in estimated forfeitures.was as follows (in thousands):

~~There were no stock options exercised during the nine months ended September 30, 2017 or September 30, 2016.~~



	Predecessor Company
	Period from April 1, 2018 through June 3, 2018		Three Months Ended June 30, 2017		Period from January 1, 2018 through June 3, 2018		Six months Ended June 30, 2017
Stock option grants	$	65	$	530	$	231	$	1,068

On May 18, 2017 the Company adopted the 2017 Supplemental Incentive Plan (the "2017 SIP"), which provides participating executives of the Company with the opportunity to earn cash payments in ratable installments over the last three quarters of 2017, based on the Company's year-to-date performance at the end of each respective period, commencing with the second quarter of 2017. In order to be eligible to participate in the 2017 SIP, each participant therein had to agree to the cancellation of all of such participant's respective outstanding equity incentive awards. During the nine months ended September 30, 2017, the participants forfeited an aggregate of 963,493 options.

8.13. Earnings (Loss) Per Share

~~For all periods presented,~~As discussed in Note 2, "Emergence from Chapter 11", on the Effective Date, the old common stock awards and warrants then outstanding under the Company’s prior equity compensation plans were extinguished without recovery.

The Company ~~has disclosed~~calculates basic ~~and diluted~~ earnings (loss) per ~~common~~ share ~~utilizing the two-class method. In accordance with ASC Topic 260,~~ ~~"Earnings per Share,"~~ ~~the presentation of basic and diluted EPS is required only for common stock and not for participating securities.~~

Non-vested restricted shares of Class A common stock are considered participating securities for purposes of calculating basic weighted-average common shares outstanding in all periods. In addition, Company Warrants are accounted for as participating securities, as holders of such Warrants, in accordance with and subject to the terms and conditions of the Warrant Agreement, are entitled to receive ratable distributions of the Company's earnings concurrently with such distributions made to the holders of Class A common stock.

~~Basic earnings (loss) per common share is calculated~~ by dividing net income (loss) ~~available to common shareholders~~ by the ~~weighted-average~~weighted average number of common shares ~~of common stock~~ outstanding, ~~during the period. In accordance with the terms of the Company's certificate of incorporation, the~~excluding restricted shares. The Company allocates undistributed net income (loss), after any allocation for preferred stock dividends, between each class of common stock on an equal basis per share. In accordance with the two-class method, earnings applicable to the non-vested restricted shares of Class A common stock and Company Warrants are excluded from the computation of basic EPS.

~~Diluted~~calculates diluted earnings (loss) per share ~~is computed in~~by dividing net income (loss) by the ~~same manner as basic earnings (loss) per share after assuming issuance~~weighted average number of common ~~stock for all potentially~~shares outstanding plus the dilutive ~~equivalent shares, which includes~~effect of outstanding share-based awards, including stock options and ~~certain warrants to purchase common stock.~~restricted stock awards. Warrants are included in basic and diluted shares outstanding because there is little or no consideration paid upon exercise of the Warrants. Antidilutive instruments are not considered in this calculation. ~~Under~~The Company applies the two-class method ~~net income (loss) is allocated~~ to ~~common stock to the extent that each security may share in~~calculate earnings ~~as if all of the earnings (loss) for the period had been distributed. Earnings (loss) are allocated to each class of common stock equally~~ per share. Because both classes share the same rights in dividends and earnings, earnings per share (basic and diluted) are the same for both classes.

The following table ~~sets forth~~presents the ~~computation~~reconciliation of basic ~~and~~to diluted ~~earnings (loss) per~~weighted average common ~~share for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands, except per share data):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Basic Earnings (Loss) Per Share
Numerator:
Undistributed net income (loss) from continuing operations $ 1,274
$ 46,321
$ (449 ) $ 32,958
Less:
Participation rights of the Company Warrants in undistributed earnings 1
50
—
43
Participation rights of unvested restricted stock in undistributed earnings —
48
—
34
Basic undistributed net income (loss) attributable to common shares $ 1,273
$ 46,223
$ (449 ) $ 32,881
Denominator:
Basic weighted average shares outstanding 29,306
29,275
29,306
29,269
Basic undistributed net income per share attributable to common shares $ 0.04
$ 1.58
$ (0.02 ) $ 1.12
Diluted Earnings (Loss) Per Share:
Numerator:
Undistributed net income (loss) from continuing operations $ 1,274
$ 46,321
$ (449 ) $ 32,958
Less:
Participation rights of the Company Warrants in undistributed net earnings 1
50
—
43
Participation rights of unvested restricted stock in undistributed earnings —
48
—
34
Basic undistributed net income (loss) attributable to common shares $ 1,273
$ 46,223
$ (449 ) $ 32,881
Denominator:
Basic weighted average shares outstanding 29,306
29,275
29,306
29,269
Effect of dilutive stock options, warrants and restricted stock —
—
—
—
Diluted weighted average shares outstanding 29,306
29,275
29,306
29,269
Diluted undistributed net income (loss) per share attributable to common shares $ 0.04
$ 1.58
$ (0.02 ) $ 1.12

~~9. Income Taxes~~

For the three months ended September 30, 2017, the Company recorded income tax expense of $5.3 million on income before income taxes of $6.5 million, resulting in an effective tax rate for the three months ended September 30, 2017 of approximately 80.5%. For the three months ended September 30, 2016, the Company recorded income tax expense of $32.8 million on income before income taxes of $79.1 million, resulting in an effective tax rate for the three months ended September 30, 2016 of approximately 41.4%. The difference between the effective tax rate and the federal statutory rate of 35.0% for the three months ended September 30, 2017 is attributable to state and local income taxes, the tax effect of certain statutory non-deductible items, the tax effect of changes in uncertain tax positions, and state tax law changes enacted during the period. The difference between the effective tax rate and the federal statutory rate of 35.0% for the three months ended September 30, 2016 is attributable to state and local income taxes, the tax effect of certain statutory non-deductible items, the tax effect of changes in uncertain tax positions, the tax effect of stock option terminations and forfeitures,shares as well as ~~adjustments as a result of differences between~~ the ~~amounts estimated in the tax provision and the actual amounts in the tax return.~~

For the nine months ended September 30, 2017, the Company recorded income tax expense of $6.5 million on income before income taxes of $6.0 million, resulting in an effective tax rate for the nine months ended September 30, 2017 of approximately 107.5%. The difference between the effective tax rate and the federal statutory rate of 35.0% for the nine months ended September 30, 2017 relates to state and local taxes, the tax effect of ~~stock option terminations and forfeitures, the tax effect of changes in uncertain tax positions, and enacted tax law changes.~~anti-dilutive securities excluded from diluted weighted average common shares (in thousands):

For the nine months ended September 30, 2016, the Company recorded income tax expense of $24.9 million on income before income taxes of $57.9 million, resulting in an effective tax rate for the nine months ended September 30, 2016 of approximately 43.0%. The difference between the effective tax rate and the federal statutory rate of 35.0% for the nine months ended September 30, 2016, primarily relates to state and local income taxes, an increase in the valuation allowance with respect to state net operating losses, the tax effect of certain statutory non-deductible items, enacted changes to state and local tax laws, the tax effect of changes in uncertain tax positions, and differences between the amounts estimated in the tax provision and the actual amounts in the tax return.

The Company continually reviews the adequacy of the valuation allowance and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC 740, ~~Income Taxes~~ (“ASC 740”). As of September 30, 2017, the Company continues to maintain a partial valuation allowance on certain state net operating loss carryforwards which the Company does not believe will be able to meet the more likely than not recognition standard for recovery. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company's financial statements or tax returns as well as future profitability.



	Successor Company		Predecessor Company
	Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018		Three Months Ended June 30, 2017
Basic Earnings Per Share
Numerator:
Undistributed net income from operations	$	4,980	$	701,157	$	5,672
Less:
Participation rights of certain warrants in undistributed earnings	—		—		6
Basic net income attributable to common shares	$	4,980	$	701,157	$	5,666
Denominator:
Basic weighted average shares outstanding	20,005		29,338		$	29,306
Basic undistributed net income per share attributable to common shares	$	0.25	$	23.90	$	0.19

Diluted Earnings Per Share
Numerator:
Undistributed net income from operations	$	4,980	$	701,157	$	5,672
Less:
Participation rights of certain warrants in undistributed earnings	—		—		6
Diluted net income attributable to common shares	$	4,980	$	701,157	$	5,666
Denominator:
Basic weighted average shares outstanding	20,005		29,338		29,306
Diluted weighted average shares outstanding	20,300		29,338		29,306
Diluted undistributed net income per share attributable to common shares	$	0.25	$	23.90	$	0.19

As discussed in Note 1 (Liquidity and Going Concern Considerations), the accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company continues to believe that the remaining deferred tax assets are more likely than not to be realized. The Company is currently evaluating various debt restructuring alternatives which, if undertaken, could have a significant impact on the Company’s income taxes, including the realization of deferred tax assets. At this time, the Company believes it is more likely than not that it will recover its deferred tax assets, with the exception of certain state net operating loss carryforwards, through a combination of existing taxable temporary differences and future taxable income. In the event of a restructuring transaction, the Company believes that these deferred tax assets would likely be utilized to offset operating income or cancellation of debt income. If however, the Company is not able to generate sufficient future income during the attribute carryforward period or expectations around future events or earnings change, these deferred tax assets may require a valuation allowance.



	Successor Company		Predecessor Company
	Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018		Six Months Ended June 30, 2017
Basic Earnings (Loss) Per Share
Numerator:
Undistributed net income (loss) from operations	$	4,980	696,156		(1,723		)
Basic net income (loss) attributable to common shares	$	4,980	$	696,156	$	(1,723	)
Denominator:
Basic weighted average shares outstanding	20,005		29,338		$	29,306
Basic undistributed net income (loss) per share attributable to common shares	$	0.25	$	23.73	$	(0.06	)

Diluted Earnings (Loss) Per Share
Numerator:
Undistributed net income (loss) from operations	4,980		696,156		(1,723		)
Diluted net income (loss) attributable to common shares	$	4,980	$	696,156	$	(1,723	)
Denominator:
Basic weighted average shares outstanding	20,005		29,338		29,306
Diluted weighted average shares outstanding	20,300		29,338		29,306
Diluted undistributed net income (loss) per share attributable to common shares	$	0.25	$	23.73	$	(0.06	)

~~10.~~14. Commitments and Contingencies

Future Commitments

The radio broadcast industry’s principal ratings service is Nielsen Audio ~~("Nielsen"~~(“Nielsen”), which publishes surveys for domestic radio markets. Certain of the Company’s subsidiaries have agreements with Nielsen under which they receive programming ratings information. The remaining aggregate obligation under the agreements with Nielsen is approximately ~~$13.7~~$175.7 million, as of ~~September~~June 30, ~~2017,~~2018, and is expected to be paid in accordance with the agreements through December ~~2017.~~

2021.

The Company engages Katz Media Group, Inc. ~~("Katz"~~(“Katz”) as its national advertising sales agent. The national advertising agency contract with Katz contains termination provisions that, if exercised by the Company during the term of the contract, would obligate the Company to pay a termination fee to Katz, based upon a formula set forth in the contract.

The Company is committed under various contractual agreements to pay for broadcast rights that include sports and news services and to pay for talent, executives, research, weather information and other services.

The Company from time to time enters into radio network contractual obligations to guarantee a minimum amount of revenue share to contractual counterparties on certain programming in future years. ~~Generally, these guarantees are subject to decreases dependent on clearance targets achieved.~~ As of ~~September~~June 30, ~~2017,~~2018, the Company believes that it will meet all such material minimum obligations.

On ~~January 3, 2014 (the "Commencement Date”),~~February 1, 2018 and March 9, 2018, respectively, the Company and Merlin Media, LLC (“Merlin”) ~~and~~amended their Local Marketing Agreement (“LMA Agreement”) under which the Company programmed two FM radio stations owned by Merlin. The Company ceased programming one of the stations (“WLUP”) on March 9, 2018, but continued to program the other FM station (“WKQX”) under the amended LMA Agreement. On April 3, 2018, the Company entered into an asset purchase agreement ~~under~~with Merlin, pursuant to which it agreed to purchase WKQX and certain intellectual property for $18.0 million in cash. On April 10, 2018, the Court approved the purchase and the Company made a payment in escrow of $4.75 million. On June 15, 2018, the Company closed on the purchase of WKQX. The table below summarizes the preliminary purchase price allocation among the tangible and intangible assets acquired in the WKQX purchase (dollars in thousands):



Allocation	Amount
Broadcast licenses	$	17,476
Property and equipment	524
Total purchase price	$	18,000

The above estimated fair values of assets acquired are preliminary and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired but the Company is ~~responsible~~waiting for ~~operating two FM radio stations in Chicago, Illinois, for monthly fees payable~~additional information necessary to ~~Merlin~~finalize the determination of ~~approximately $0.3 million, $0.4 million, $0.5 million and $0.6 million in~~fair value. Thus, the ~~first, second, third and fourth years following the Commencement Date, respectively, in exchange for the Company retaining the operating profits from these radio stations.~~

preliminary measurements of fair value reflected are subject to change. The Company expects to finalize the valuation and ~~Merlin entered into a separate agreement pursuant to which~~complete the ~~Company has the right to~~ purchase these two FM radio stations until October 5, 2017 for an amount in cash equal to the greater of (i) $70.0 million minus the aggregate amount of monthly fees paid by the Company on or prior to the earlier of the closing date or the date that is four years after the Commencement Date; or (ii) $50.0 million. Conversely, Merlin has the right to require the Company to purchase these two FM radio stations at any time during a ten business day period commencing October 6, 2017 for $71.0 million, minus the aggregate amount of monthly fees paid by the Company on or prior to the earlier of the closing date and January 3,price allocation as soon as practicable but no later than December 31, 2018.

~~On October 6, 2017, Merlin notified the Company that it was exercising the right to require the Company to acquire the stations.~~

The Company determined through its review of the requirements of ASC Topic 810, Consolidation ("ASC 810") that the stations are a variable interest entity (“VIE”) for which it is not the primary beneficiary, therefore consolidation is not required.

On April 1, 2014, the Company initiated an exit plan for an office lease as part of a restructuring in connection with the acquisition of Westwood One (the "Exit Plan"), which included charges related to terminated contract costs. As of September 30, 2017, liabilities related to the Exit Plan of $0.2 million were included in accounts payable and accrued expenses and $1.0 million of other liabilities in the unaudited condensed consolidated balance sheet. The Company does not anticipate any additional meaningful future charges in connection with the Exit Plan other than those for which the Company has already accrued.

Legal Proceedings

On March 1, 2011, the Company and certain of our subsidiaries were named as defendants along with other radio companies, including Beasley Broadcast Group, Inc., CBS Radio, Inc., Entercom Communications, Greater Media, Inc. and Townsquare Media, LLC in a patent infringement suit. The case, Mission Abstract Data L.L.C., d/b/a Digimedia ("Plaintiff") v. Beasley Broadcast Group, Inc., et. al., Civil Action Case No: 1:11-mc-00176-LPS, U.S. District Court for the District of Delaware, alleges that the defendants have infringed on two of plaintiff’s patents entitled “Selection and Retrieval of Music from a Digital Database.” The Complaint seeks unspecified damages. The Court stayed the case on November 14, 2011 pending reexamination of the patents-in-suit before the U.S. Patent Office. On June 6, 2012, Plaintiff filed a motion to lift the stay. On March 25, 2013, the Court entered an order denying Plaintiff’s motion to lift the stay. However, the Court ordered that “the stay shall be lifted upon the issuance of the Notice of Intent to Issue Reexamination Certifications (‘NIRC’)” for the two patents-in-suit. By operation of the Court’s Order, the stay was lifted on July 8, 2013, when the final NIRC was issued for the two patents-in-suit. On July 25, 2013, counsel for Defendants invited Plaintiff to confer to discuss the viability of Plaintiff maintaining the suit in light of the result of the reexamination proceedings or to discuss a case schedule. Plaintiff did not respond substantively to Defendants’ invitation. Plaintiff has filed no further papers with the Court to move the proceeding forward. Should Plaintiff attempt to pursue the case in the future, and assuming the Court now allows the Plaintiff to pursue the case, the Company intends to defend itself vigorously. The Company is not yet able to determine what effect the lawsuit will have, if any, on its financial position, results of operations or cash flows.

In August 2015, the Company was named as a defendant in two separate putative class action lawsuits relating to its use and public performance of certain sound recordings fixed prior to February 15, 1972 (the "Pre-1972 Recordings"). The first suit, ABS Entertainment, Inc., et. al. v, Cumulus Media Inc., was filed in the United States District Court for the Central District of California and alleged, among other things, copyright infringement under California state law, common law conversion, misappropriation and unfair business practices. On December 11, 2015, this suit was dismissed without prejudice. The second suit, ABS Entertainment, Inc., v. Cumulus Media Inc., was filed in the United States District Court for the Southern District of New York and claimed, among other things, common law copyright infringement and unfair competition. The New York lawsuit was stayed pending an appeal before the Second Circuit involving unrelated third parties over whether the owner of a Pre-1972 Recording holds an exclusive right to publicly perform that recording under New York common law. On December 20, 2016, the New York Court of Appeals held that New York common law does not recognize a right of public performance for owners of pre-1972 Recordings. As a result of that case (to which Cumulus Media Inc., was not a party) the New York case against Cumulus Media Inc., was voluntarily dismissed by the plaintiffs on April 3, 2017. The question of whether public performance rights exist for Pre-1972 recordings under state ~~laws~~law is still being litigated in the Ninth ~~and Eleventh Circuits~~Circuit as a result of ~~cases~~a case filed in ~~California and Florida.~~California. Cumulus is not a party to ~~those cases,~~that case, and the Company is not yet able to determine what effect ~~those proceedings~~that proceeding will have, if any, on its financial position, results of operations or cash flows.

The Company currently is, and expects that from time to time in the future it will be, party to, or a defendant in, various other claims or lawsuits that are generally incidental to its business. The Company expects that it will vigorously contest any such claims or lawsuits and believes that the ultimate resolution of any such known claim or lawsuit will not have a material adverse effect on the ~~Company's~~Company’s consolidated financial position, results of operations or cash flows.

~~11. Supplemental Condensed Consolidated Financial Information~~

At ~~September 30, 2017, Cumulus (the "Parent Guarantor") and certain of its~~ ~~100%~~ ~~owned subsidiaries (such subsidiaries, the “Subsidiary Guarantors”) provided guarantees of the obligations of Cumulus Holdings (the "Subsidiary Issuer") under the~~ ~~7.75%~~ Senior Notes. These guarantees are full and unconditional (subject to customary release provisions) as well as joint and several. Certain of the Subsidiary Guarantors may be subject to restrictions on their respective ability to distribute earnings to Cumulus Holdings or the Parent Guarantor. Not all of the subsidiaries of Cumulus and Cumulus Holdings guarantee the ~~7.75%~~ ~~Senior Notes (such non-guaranteeing subsidiaries, collectively, the “Subsidiary Non-guarantors”).~~

Investments in consolidated subsidiaries are held primarily by the Parent Guarantor in the net assets of its subsidiaries and have been presented using the equity method of accounting. The “Eliminations” entries in the following tables primarily eliminate investments in subsidiaries and intercompany balances and transactions. The columnar presentations in the following tables are not consistent with the Company’s business groups; accordingly, this basis of presentation is not intended to present the Company’s financial condition, results of operations or cash flows on a consolidated basis.

~~Revision to Prior Period Financial Statements~~

During the first quarter of 2017, the Company determined that it did not properly classify the investment in consolidated subsidiaries balance residing at the Parent Guarantor as a liability at December 31, 2016. The Company should have presented the investment in consolidated subsidiary balance as a liability as the balance was negative at December 31, 2016. In the following disclosure, a separate line item entitled “Accumulated losses in consolidated subsidiaries” is presented in the Condensed Consolidated Balance Sheet to correct this misclassification. This presentation misclassification was not material to the previously issued financial statements.

~~In accordance with ASC 250-10,~~ ~~SEC Staff Accounting Bulletin No. 99, Materiality,~~ ~~the Company assessed the materiality of the errors and concluded that the errors were not material to any of the Company’s previously issued financial statements. As permitted byASC 250-10, SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company has presented revised financial information as of December 31, 2016.~~

The following tables present (i) unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016, (ii) unaudited condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016, and (iii) unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016, of each of the Parent Guarantor, Cumulus Holdings, the Subsidiary Guarantors, and the Subsidiary Non-guarantors.

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~Three Months Ended September 30, 2017~~

~~(Dollars in thousands)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus
Media
Holdings Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Net revenue $ —
$ —
$ 287,240
$ —
$ —
$ 287,240
Operating expenses:
Content costs —
—
96,321
—
—
96,321
Selling, general and administrative expenses —
—
118,758
535
—
119,293
Depreciation and amortization —
298
14,910
—
—
15,208
Local marketing agreement fees —
—
2,717
—
—
2,717
Corporate expenses (including stock-based compensation expense of $354) —
10,853
—
—
—
10,853
Gain on sale of assets or stations —
—
(83 ) —
—
(83 )
Total operating expenses —
11,151
232,623
535
—
244,309
Operating (loss) income —
(11,151 ) 54,617
(535 ) —
42,931
Non-operating (expense) income:
Interest (expense) income, net (2,184 ) (33,089 ) 34
(62 ) —
(35,301 )
Loss on early extinguishment of debt —
(1,063 ) —
—
—
(1,063 )
Other expense, net —
—
(36 ) —
—
(36 )
Total non-operating expense, net (2,184 ) (34,152 ) (2 ) (62 ) —
(36,400 )
(Loss) income before income taxes (2,184 ) (45,303 ) 54,615
(597 ) —
6,531
Income tax (expense) benefit 8,782
176,495
(193,046 ) 2,512
—
(5,257 )
Earnings (loss) from consolidated subsidiaries (5,324 ) (136,516 ) 1,915
—
139,925
—
Net income (loss) $ 1,274
$ (5,324 ) $ (136,516 ) $ 1,915
$ 139,925
$ 1,274

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~Nine Months Ended September 30, 2017~~

~~(Dollars in thousands)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus
Media
Holdings Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Net revenue $ —
$ —
$ 841,801
$ —
$ —
$ 841,801
Operating expenses:
Content costs —
—
291,390
—
—
291,390
Selling, general and administrative expenses —
—
352,465
1,724
—
354,189
Depreciation and amortization —
902
46,708
—
—
47,610
Local marketing agreement fees —
—
8,137
—
—
8,137
Corporate expenses (including stock-based compensation expense of $1,422) —
32,281
—
—
—
32,281
Gain on sale of assets or stations —
—
(2,585 ) —
—
(2,585 )
Total operating expenses —
33,183
696,115
1,724
—
731,022
Operating (loss) income —
(33,183 ) 145,686
(1,724 ) —
110,779
Non-operating (expense) income:
Interest (expense) income, net (6,551 ) (97,020 ) 106
(171 ) —
(103,636 )
Loss on early extinguishment of debt —
(1,063 ) —
—
—
(1,063 )
Other expense, net —
—
(64 ) —
—
(64 )
Total non-operating (expense) income, net (6,551 ) (98,083 ) 42
(171 ) —
(104,763 )
(Loss) income before income taxes (6,551 ) (131,266 ) 145,728
(1,895 ) —
6,016
Income tax (expense) benefit 7,040
141,059
(156,600 ) 2,036
(6,465 )
Earnings (loss) from consolidated subsidiaries (938 ) (10,731 ) 141
—
11,528
—
Net (loss) income $ (449 ) $ (938 ) $ (10,731 ) $ 141
$ 11,528
$ (449 )

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~Three Months Ended September 30, 2016~~

~~(Dollars in thousands)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus
Media
Holdings
Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Net revenue $ —
$ —
$ 286,136
$ —
$ —
$ 286,136
Operating expenses:
Content costs —
—
115,348
—
—
115,348
Selling, general and administrative expenses —
—
116,706
681
—
117,387
Depreciation and amortization —
400
21,557
—
—
21,957
Local marketing agreement fees —
—
2,481
—
—
2,481
Corporate expenses (including stock-based compensation expense of $735) —
9,960
—
—
—
9,960
Gain on sale of assets or stations —
—
(94,014 ) —
—
(94,014 )
Total operating expenses —
10,360
162,078
681
—
173,119
Operating (loss) income —
(10,360 ) 124,058
(681 ) —
113,017
Non-operating (expense) income:
Interest (expense) income, net (2,178 ) (32,704 ) 139
(47 ) —
(34,790 )
Other income, net —
—
882
—
—
882
Total non-operating (expense) income, net (2,178 ) (32,704 ) 1,021
(47 ) —
(33,908 )
(Loss) income before income taxes (2,178 ) (43,064 ) 125,079
(728 ) —
79,109
Income tax benefit (expense) 937
19,816
(53,834 ) 293
—
(32,788 )
Earnings (loss) from consolidated subsidiaries 47,562
70,810
(435 ) —
(117,937 ) —
Net income (loss) $ 46,321
$ 47,562
$ 70,810
$ (435 ) $ (117,937 ) $ 46,321

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~Nine Months Ended September 30, 2016~~

~~(Dollars in thousands)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus
Media
Holdings
Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Net revenue $ —
$ 165
$ 841,694
$ —
$ —
$ 841,859
Operating expenses:
Content costs —
—
312,526
—
—
312,526
Selling, general and administrative expenses —
—
350,719
1,755
—
352,474
Depreciation and amortization —
1,219
66,804
—
—
68,023
Local marketing agreement fees —
—
10,351
—
—
10,351
Corporate expenses (including stock-based compensation expense of $2,403) —
34,028
—
—
—
34,028
Gain on sale of assets or stations —
—
(97,155 ) —
—
(97,155 )
Impairment on intangible assets and goodwill —
—
1,816
—
—
1,816
Total operating expenses —
35,247
645,061
1,755
—
682,063
Operating (loss) income —
(35,082 ) 196,633
(1,755 ) —
159,796
Non-operating (expense) income:
Interest (expense) income, net (6,533 ) (97,221 ) 364
(142 ) —
(103,532 )
Other income, net —
—
1,598
—
—
1,598
Total non-operating (expense) income, net (6,533 ) (97,221 ) 1,962
(142 ) —
(101,934 )
(Loss) income before income taxes (6,533 ) (132,303 ) 198,595
(1,897 ) —
57,862
Income tax benefit (expense) 2,613
51,219
(79,438 ) 702
—
(24,904 )
Earnings (loss) from consolidated subsidiaries 36,878
117,962
(1,195 ) —
(153,645 ) —
Net income (loss) $ 32,958
$ 36,878
$ 117,962
$ (1,195 ) $ (153,645 ) $ 32,958

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~September 30, 2017~~

~~(Dollars in thousands, except for share and per share data)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus
Media
Holdings Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Assets
Current assets:
Cash and cash equivalents $ —
$ 69,431
$ —
$ —
$ —
$ 69,431
Restricted cash —
7,680
—
—
—
7,680
Accounts receivable, less allowance for doubtful accounts of $5,922 —
—
—
231,630
—
231,630
Trade receivable —
—
4,679
—
—
4,679
Asset held for sale —
—
30,150
—
—
30,150
Prepaid expenses and other current assets —
33,222
24,918
—
—
58,140
Total current assets —
110,333
59,747
231,630
—
401,710
Property and equipment, net —
11,621
145,886
—
—
157,507
Broadcast licenses —
—
—
1,539,718
—
1,539,718
Other intangible assets, net —
—
90,369
—
—
90,369
Goodwill —
—
135,214
—
—
135,214
Investment in consolidated subsidiaries —
3,466,078
1,002,755
—
(4,468,833 ) —
Intercompany receivables —
110,068
1,982,500
—
(2,092,568 ) —
Other assets —
16,706
143,886
288
(143,024 ) 17,856
Total assets $ —
$ 3,714,806
$ 3,560,357
$ 1,771,636
$ (6,704,425 ) $ 2,342,374
Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:

Accounts payable and accrued expenses $ —
$ 30,190
$ 66,336
$ —
$ —
$ 96,526
Trade payable —
—
3,640
—
—
3,640
Total current liabilities —
30,190
69,976
—
—
100,166
Long-term debt, excluding 7.75% Senior Notes, net of debt issuance cost/discounts of $24,143 —
1,705,560
—
—
—
1,705,560
7.75% Senior Notes, net of debt issuance costs of $4,335 —
605,665
—
—
—
605,665
Other liabilities —
2,932
24,303
—
—
27,235
Intercompany payables 109,780
1,750,870
—
231,918
(2,092,568 ) —
Accumulated losses in consolidated subsidiaries 380,411
—
—
—
(380,411 ) —
Deferred income taxes

536,963
(143,024 ) 393,939
Total liabilities 490,191
4,095,217
94,279
768,881
(2,616,003 ) 2,832,565
Stockholders’ (deficit) equity:

Class A common stock, par value $0.01 per share; 93,750,000 shares authorized; 32,031,952 shares issued and 29,225,765 shares outstanding 320
—
—
—
—
320
Class C common stock, par value $0.01 per share; 80,609 shares authorized, issued and outstanding 1
—
—
—
—
1
Treasury stock, at cost, 2,806,187 shares (229,310 ) —
—
—
—
(229,310 )
Additional paid-in-capital 1,626,237
284,143
4,318,874
1,980,676
(6,583,693 ) 1,626,237
Accumulated (deficit) equity (1,887,439 ) (664,554 ) (852,796 ) (977,921 ) 2,495,271
(1,887,439 )
Total stockholders’ (deficit) equity (490,191 ) (380,411 ) 3,466,078
1,002,755
(4,088,422 ) (490,191 )
Total liabilities and stockholders’ equity (deficit) $ —
$ 3,714,806
$ 3,560,357
$ 1,771,636
$ (6,704,425 ) $ 2,342,374

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~December 31, 2016~~

~~(Dollars in thousands, except for share and per share data)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus
Media
Holdings Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Assets
Current assets:
Cash and cash equivalents $ —
$ 131,259
$ —
$ —
$ —
$ 131,259
Restricted cash —
8,025
—
—
—
8,025
Accounts receivable, less allowance for doubtful accounts of $4,691 —
—
—
231,585
—
231,585
Trade receivable —
—
4,985
—
—
4,985
Asset held for sale —
—
30,150
—

—
30,150
Prepaid expenses and other current assets —
17,321
16,602
—
—
33,923
Total current assets —
156,605
51,737
231,585
—
439,927
Property and equipment, net —
4,431
157,632
—
—
162,063
Broadcast licenses —
—
—
1,540,183
—
1,540,183
Other intangible assets, net —
—
116,499
—
—
116,499
Goodwill —
—
135,214
—
—
135,214
Investment in consolidated subsidiaries —
3,348,992
1,012,947
—
(4,361,939 ) —
Intercompany receivables —
103,593
1,848,263
—
(1,951,856 ) —
Other assets —
21,631
135,996
364
(139,186 ) 18,805
Total assets $ —
$ 3,635,252
$ 3,458,288
$ 1,772,132
$ (6,452,981 ) $ 2,412,691
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses $ —
$ 19,994
$ 76,247
$ —
$ —
$ 96,241
Trade payable —
—
4,550
—
—
4,550
Total current liabilities —
19,994
80,797
—
—
100,791
Long-term debt, excluding 7.75% Senior Notes, net of debt issuance costs/discounts of $29,909 —
1,780,357
—
—
—
1,780,357
7.75% Senior Notes, net of debt issuance costs of $6,200 —
603,800
—
—
—
603,800
Other liabilities —
2,932
28,499
—
—
31,431
Intercompany payables 103,229
1,616,678
—
231,949
(1,951,856 ) —
Accumulated losses in consolidated subsidiaries 388,509
—
—
—
(388,509 ) —
Deferred income taxes —
—
—
527,236
(139,186 ) 388,050
Total liabilities 491,738
4,023,761
109,296
759,185
(2,479,551 ) 2,904,429
Stockholders’ (deficit) equity:
Class A common stock, par value $0.01 per share; 93,750,000 shares authorized; 32,031,952 shares issued and 29,225,765 shares outstanding 320
—
—
—
—
320
Class C common stock, par value $0.01 per share; 80,609 shares authorized, issued and outstanding 1
—
—
—
—
1
Treasury stock, at cost, 2,806,187 shares (229,310 ) —
—
—
—
(229,310 )
Additional paid-in-capital 1,624,815
275,107
4,191,057
1,991,009
(6,457,173 ) 1,624,815
Accumulated (deficit) equity (1,887,564 ) (663,616 ) (842,065 ) (978,062 ) 2,483,743
(1,887,564 )
Total stockholders’ (deficit) equity (491,738 ) (388,509 ) 3,348,992
1,012,947
(3,973,430 ) (491,738 )
Total liabilities and stockholders’ equity (deficit) $ —
$ 3,635,252
$ 3,458,288
$ 1,772,132
$ (6,452,981 ) $ 2,412,691

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~Nine Months Ended September 30, 2017~~

~~(Dollars in thousands)~~

~~(Unaudited)~~

Cumulus
Media Inc.
(Parent
Guarantor)

Cumulus Media
Holdings Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Cash flows from operating activities:
Net (loss) income $ (449 ) $ (938 ) $ (10,731 ) $ 141
$ 11,528
$ (449 )
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization —
902
46,708
—
—
47,610
Amortization of debt issuance costs/discounts —
7,490
—
171
—
7,661
Provision for doubtful accounts —
—
4,770
—
—
4,770
Gain on sale of assets or stations —
—
(2,585 ) —
—
(2,585 )
Deferred income taxes (7,040 ) (141,059 ) 156,598
(2,036 ) —
6,463
Stock-based compensation expense —
1,422
—
—
—
1,422
Loss on early extinguishment of debt —
1,063
—
—
—
1,063
(Earnings) loss from consolidated subsidiaries 938
10,731
(141 ) —
(11,528 ) —
Changes in assets and liabilities 2,171
198,131
(233,856 ) 1,724
—
(31,830 )
Net cash (used in) provided by operating activities (4,380 ) 77,742
(39,237 ) —
—
34,125
Cash flows from investing activities
Proceeds from sale of assets or stations —
—
6,090
—
—
6,090
Restricted cash —
345
—
—
—
345
Capital expenditures —
(8,092 ) (12,553 ) —
—
(20,645 )
Net cash used in investing activities —
(7,747 ) (6,463 ) —
—
(14,210 )
Cash flows from financing activities:
Intercompany transactions, net 4,380
(50,080 ) 45,700
—
—
—
Repayments of borrowings under term loans and revolving credit facilities —
(81,652 ) —
—
—
(81,652 )
Deferred financing costs —
(91 ) —
—
—
(91 )
Net cash provided by (used in) financing activities 4,380
(131,823 ) 45,700
—
—
(81,743 )
Decrease in cash and cash equivalents —
(61,828 ) —
—
—
(61,828 )
Cash and cash equivalents at beginning of period —
131,259
—
—
—
131,259
Cash and cash equivalents at end of period $ —
$ 69,431
$ —
$ —
$ —
$ 69,431

~~CUMULUS MEDIA INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~Nine Months Ended September 30, 2016~~

~~(Dollars in thousands)~~

~~(Unaudited)~~

Cumulus Media
Inc.
(Parent
Guarantor)

Cumulus Media
Holdings Inc.
(Subsidiary
Issuer)

Subsidiary
Guarantors

Subsidiary
Non-guarantors
Eliminations
Total
Consolidated
Cash flows from operating activities:
Net income (loss) $ 32,958
$ 36,878
$ 117,962
$ (1,195 ) $ (153,645 ) $ 32,958
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization —
1,219
66,804
—
—
68,023
Amortization of debt issuance costs/discount —
7,183
—
142
—
7,325
Provision for doubtful accounts —
—
1,188
—
—
1,188
Gain on sale of assets or stations —
—
(97,155 ) —
—
(97,155 )
Impairment of intangible assets and goodwill —
—
1,816
—
—
1,816
Deferred income taxes (2,613 ) (51,219 ) 79,620
(702 ) —
25,086
Stock-based compensation expense —
2,403
—
—
—
2,403
(Loss) earnings from consolidated subsidiaries (36,878 ) (117,962 ) 1,195
—
153,645
—
Changes in assets and liabilities —
295,419
(306,539 ) 1,755
—
(9,365 )
Net cash (used in) provided by operating activities (6,533 ) 173,921
(135,109 ) —
—
32,279
Cash flows from investing activities:
Proceeds from sale of assets or stations —
—
106,935
—
—
106,935
Restricted cash —
3,431
—
—
—
3,431
Capital expenditures —
(868 ) (15,836 ) —
—
(16,704 )
Net cash provided by investing activities —
2,563
91,099
—
—
93,662
Cash flows from financing activities:
Intercompany transactions, net 6,530
(50,540 ) 44,010
—
—
—
Proceeds from exercise of warrants 3
—
—
—
—
3
Net cash provided by (used in) financing activities 6,533
(50,540 ) 44,010
—
—
3
Increase in cash and cash equivalents —
125,944
—
—
—
125,944
Cash and cash equivalents at beginning of period —
31,657
—
—
—
31,657
Cash and cash equivalents at end of period $ —
$ 157,601
$ —
$ —
$ —
$ 157,601

~~12.~~15. Segment Data

The Company operates in two reportable segments for which there is discrete financial information available and whose operating results are reviewed by the chief operating decision ~~maker.~~maker, the Cumulus Radio Station Group and Westwood One. Cumulus Radio Station Group revenue is derived primarily from the sale of broadcasting time to local, regional, and national advertisers. Westwood One revenue is generated primarily through network advertising. The Company also reports information for Corporate and Other. Corporate includes overall executive, administrative and support functions for both of the ~~Company's~~Company’s reportable segments, including ~~programming,~~accounting, finance, legal, human resources, ~~and~~ information technology ~~functions.~~functions, and programming.

The Company presents segment adjusted EBITDA ("(“Adjusted ~~EBITDA"~~EBITDA”) as this is the financial metric by which management and the chief operating decision maker allocate resources of the Company and analyze the performance of the Company’s reportable segments. Management also uses this measure to determine the contribution of the Company's core operations to the funding of its corporate resources utilized to manage operations and non-operating expenses including debt service and acquisitions. In addition, ~~segment~~ Adjusted EBITDA ~~excluding the impact of local marketing agreement fees,~~ is a key metric for purposes of calculating and determining compliance with certain covenants contained in the ~~Company's~~Company’s Credit Agreement.

exchange, sale, or ~~sale~~disposal of any assets or stations, early extinguishment of debt, local marketing agreement fees (as such fees are excluded from the definition of such term for purposes of calculating covenant compliance under the credit agreement), expenses relating to acquisitions, ~~and~~ restructuring costs, reorganization items and non-cash impairments of ~~assets.~~assets, if any.

Management believes that Adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, is commonly employed by the investment community as a measure for determining the market value of a media company and comparing the operational and financial performance among media companies. Management has also observed that Adjusted EBITDA is routinely utilized to evaluate and negotiate the potential purchase price for media companies. Given the relevance to our overall value, management believes that investors consider the metric to be extremely useful.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), operating income, cash flows from operating activities or any other measure for determining the Company’s operating performance or liquidity that is calculated in accordance with GAAP. In addition, Adjusted EBITDA may be defined or calculated differently by other companies, and comparability may be limited.

The Company’s financial data by segment is presented in the tables ~~below:~~ below (in thousands):

Three Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 202,852
$ 83,778
$ 610
$ 287,240



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	68,357	$	26,356	$	291	$	95,004



	Period from April 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	135,093	$	54,924	$	228	$	190,245



	Three Months Ended June 30, 2017 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	208,596	$	81,234	$	701	$	290,531



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	68,357	$	26,356	$	291	$	95,004



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	303,317	$	149,715	$	892	$	453,924



	Six Months Ended June 30, 2017 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	382,197	$	171,090	$	1,274	$	554,561

Three Months Ended September 30, 2016
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 206,199
$ 79,413
$ 524
$ 286,136

Nine Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 585,050
$ 254,867
$ 1,884
$ 841,801

Nine Months Ended September 30, 2016
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 592,640
$ 247,507
$ 1,712
$ 841,859



	Successor Company			Predecessor Company
	Period from June 4, 2018 through June 30,			Period from April 1, 2018 through June 3,			Three Months Ended June 30,
	2018			2018			2017
Adjusted EBITDA by segment
Cumulus Radio Station Group	$	20,860		$	39,824		$	59,870
Westwood One	7,690			6,554			16,942
Segment Adjusted EBITDA	28,550			46,378			76,812
Adjustments to reconcile to GAAP measure
Corporate and other expense	(2,435		)	(6,137		)	(9,412		)
Income tax (expense) benefit	(2,606		)	176,741			(7,234		)
Non-operating expense, including net interest expense	(6,152		)	(387		)	(34,420		)
Local marketing agreement fees	(358		)	(702		)	(2,713		)
Depreciation and amortization	(4,379		)	(10,065		)	(16,120		)
Stock-based compensation expense	(652		)	(65		)	(530		)
Loss on sale or disposal of assets or stations	—			(147		)	(104		)
Reorganization items, net	—			496,368			—
Acquisition-related and restructuring costs	(6,941		)	(734		)	(467		)
Franchise and state taxes	(47		)	(93		)	(140		)
Consolidated GAAP net income	$	4,980		$	701,157		$	5,672


													Successor Company			Predecessor Company
	Three Months Ended September 30,						Nine Months Ended September 30,						Period from June 4, 2018 through June 30,			Period from January 1, 2018 through June 3,			Six Months Ended June 30,
	2017			2016			2017			2016			2018			2018			2017
Adjusted EBITDA by segment
Radio Station Group	$	54,660		$	56,237		$	153,571		$	159,278
Cumulus Radio Station Group													$	20,860		$	76,009		$	98,911
Westwood One	17,082			(2,689		)	42,993			17,998			7,690			19,210			25,911
Segment Adjusted EBITDA	71,742			53,548			196,564			177,276			28,550			95,219			124,822
Adjustments
Adjustments to reconcile to GAAP measure
Corporate and other expense	(9,977		)	(9,664		)	(28,665		)	(28,278		)	(2,435		)	(14,707		)	(18,689		)
Income tax expense	(5,257		)	(32,788		)	(6,465		)	(24,904		)
Income tax (expense) benefit													(2,606		)	176,859			(1,208		)
Non-operating expense, including net interest expense	(35,336		)	(33,908		)	(103,700		)	(101,934		)	(6,152		)	(483		)	(68,363		)
Local marketing agreement fees	(2,717		)	(2,481		)	(8,137		)	(10,351		)	(358		)	(1,809		)	(5,420		)
Depreciation and amortization	(15,208		)	(21,957		)	(47,610		)	(68,023		)	(4,379		)	(22,046		)	(32,402		)
Stock-based compensation expense	(354		)	(735		)	(1,422		)	(2,403		)	(652		)	(231		)	(1,068		)
Gain on sale of assets or stations	83			94,014			2,585			97,155
Impairment of intangible assets	—			—			—			(1,816		)
Loss on early extinguishment of debt	(1,063		)	—			(1,063		)	—
(Loss) gain on sale or disposal of assets or stations													—			(158		)	2,502
Reorganization items, net													—			466,201			—
Acquisition-related and restructuring costs	(499		)	450			(2,116		)	(3,237		)	(6,941		)	(2,455		)	(1,618		)
Franchise and state taxes	(140		)	(158		)	(420		)	(527		)	(47		)	(234		)	(279		)
Consolidated net income	$	1,274		$	46,321		$	(449	)	$	32,958
Consolidated GAAP net income (loss)													$	4,980		$	696,156		$	(1,723	)

~~13.~~16. Subsequent Event

~~As previously disclosed,~~On August 17, 2018, Holdings entered into a $50.0 million revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement (the “Revolving Credit Agreement”), dated as of August 17, 2018, with certain subsidiaries of Holdings, as borrowers, certain lenders, Intermediate Holdings, as a guarantor, and Deutsche Bank AG New York Branch, as a lender and Administrative Agent.

The Revolving Credit Facility matures on August 17, 2023. Availability under the ~~Company, with the assistance of outside advisors,~~Revolving Credit Facility is ~~in private discussions with its lenders and noteholders~~tied to ~~proactively restructure its balance sheet and reduce its debt. In connection with the Company’s ongoing discussions with creditors,~~a borrowing base formula that is based on ~~October 30, 2017, the Restructuring Committee~~85% of the ~~Board~~accounts receivable of ~~Directors authorized~~ the ~~Company~~borrowers and the guarantors, subject to ~~forgo~~customary reserves and eligibility criteria. Under the ~~scheduled~~Revolving Credit Facility, up to $10.0 million of availability may be drawn in the form of letters of credit.

Borrowings under the Revolving Credit Facility bear interest, ~~payment~~at the option of Holdings, based on LIBOR plus a percentage spread (ranging from 1.25% to 1.75%) based on the ~~7.75% Senior Notes due on November 1, 2017, thereby entering into the applicable 30-day grace period~~average daily excess availability under the ~~terms~~Revolving Credit Facility or the Alternative Base Rate (as defined below) plus a percentage spread (ranging from 0.25% to 0.75%) based on the average daily excess availability under the Revolving Credit Facility. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the federal funds rate plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the ~~Indenture. This nonpayment constitutes~~Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. In addition, the unused portion of the Revolving Credit Facility will be subject to a ~~“default”~~commitment fee ranging from 0.250% to 0.375% based on the utilization of the facility. As of August 20, 2018, no amounts were outstanding under the ~~terms~~Revolving Credit Facility.

The Revolving Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature. Events of default in the ~~Indenture, which matures into an “Event~~Revolving Credit Agreement include, among others: (a) the failure to pay when due the obligations owing thereunder; (b) the failure to perform (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of ~~Default” if such “default” is not cured~~bankruptcy or ~~waived before~~insolvency events; (e) certain judgments against Holdings or any of its subsidiaries; (f) the ~~expiration~~loss, revocation or suspension of, or any material impairment in the ~~30-day grace period on December 1, 2017.~~ability to use, any one or more of, any material Federal Communications Commission licenses; (g) any representation or warranty made, or report, certificate or financial statement delivered, to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in Credit Agreement). Upon the occurrence of an Event of Default, the trustee under the Indenture, or the holders of a specified percentage of 7.75% Senior Notes, may declare all outstanding amounts immediately due and payable. Such an Event of Default would also constitute an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Revolving Credit Agreement and the ancillary loan documents as a secured party.

The Revolving Credit Agreement does not contain any financial maintenance covenants with which the Company must comply. However, if average excess availability under the Revolving Credit Facility is less than the greater of (a) 12.50% of the total commitments thereunder or (b) $5.0 million, the Company must comply with a fixed charge coverage ratio of not less than 1.0:1.0.

Amounts outstanding under the Revolving Credit Agreement are guaranteed by Intermediate Holdings and the present and future wholly-owned subsidiaries of Holdings that are not borrowers thereunder, subject to certain exceptions as set forth in the Revolving Credit Agreement (the “Revolver Guarantors”) and secured by a security interest in substantially all of the assets of Holdings, the subsidiaries of Holdings party to the Credit Agreement ~~which would give~~as borrowers, and the ~~lenders thereunder the right to declare all amounts outstanding under the Credit Agreement to be immediately due and payable.~~

In the event we are not able to satisfactorily restructure or refinance our debt obligations, or the lenders under our Senior Credit Agreement, or the trustee or the holders of our 7.75% Senior Notes, accelerate the amounts due thereunder, we may seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. Any such action could result in a significant or complete loss of value to the holders of our common stock.Revolver Guarantors.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In the following ~~Management's~~Management’s Discussion and Analysis, we provide information regarding the following areas:



l	General ~~Overview;~~overview, including our emergence from Chapter 11;
l	Results of ~~Operations;~~operations; and
l	Liquidity and ~~Capital Resources.~~capital resources.

General Overview

The following discussion of our financial condition and results of operations should be read in conjunction with the other information contained in this Form 10-Q, including our unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements and notes thereto ~~included elsewhere~~beginning on page 9 in this ~~quarterly report and~~Form 10-Q, as well as our audited ~~consolidated financial statements~~Consolidated Financial Statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2017 filed with the SEC. This discussion, as well as various other sections of this ~~quarterly report,~~10-Q, contains and refers to statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are any statements other than those of historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial and strategic performance. Any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties. ~~Historical operating results are not necessarily indicative of future operating results.~~ Actual ~~future~~ results may differ from those contained in or implied by the forward-looking statements as a result of various factors including, but not limited to, risks and uncertainties relating to the need for additional funds to service our debt and to execute our business strategy, our need to restructure or refinance our debt and the terms on which any such restructuring or refinancing may be completed, including through any court-approved restructuring, our ability to access borrowings under our revolving credit facility, further reductions in revenue from market pressures or otherwise, our ability from time to time to renew one orfactors. For more of our broadcast licenses, changes in interest rates, changes in the fair value of our investments, the timing of, and our ability to complete any acquisitions or dispositions pending from time to time, costs and synergies resulting from the integration of any completed acquisitions, our ability to effectively manage costs, our ability to drive and manage growth, the popularity of radio as a broadcasting and advertising medium, changing consumer tastes, the impact of general economic conditions in the United States or in specific markets in which we currently do business, industry conditions, including existing competition and future competitive technologies and cancellation, disruptions or postponements of advertising schedules in response to national or world events, our ability to generate revenues from new sources, including local commerce and technology-based initiatives, the impact of regulatory rules or proceedings that may affect our business from time to time, our ability to successfully appeal the notice of delisting our Class A common stock from the NASDAQ stock market ("NASDAQ"), the future write off of any material portion of the fair value of our FCC broadcast licenses and goodwill, and other risk factors described from time to timeinformation, see “Cautionary Statements Regarding Forward-Looking Statements” in our ~~filings with the Securities and Exchange Commission, including our~~Annual Report on Form 10-K for the year ended December 31, ~~2016 (the “2016 Form 10-K”) and any subsequent filings. Many of these risks and uncertainties are beyond our control, and~~2017 filed with the ~~unexpected occurrence or failure to occur of any such events or matters could significantly alter our actual results of operations or financial condition.~~SEC.

~~For additional information about~~

Emergence from Chapter 11; Liquidity and Going Concern Considerations

As previously disclosed, on November 29, 2017 (the “Petition Date”), CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.), a Delaware corporation (“Old Cumulus”) and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the "Chapter 11 Cases") were jointly administered under the caption In re Cumulus Media Inc., et al, Case No. 17-13381. On May 10, 2018, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 769] (the “Confirmation Order”), which confirmed the First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 446] (the “Plan”), as modified by the Confirmation Order. On June 4, 2018 (the “Effective Date”), Old Cumulus satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan was substantially consummated, and Old Cumulus and the other Debtors emerged from Chapter 11. On June 29, 2018, the Bankruptcy Court entered an order closing the Chapter 11 Cases of all of the Debtors other than Old Cumulus, whose case will remain open for purposes of fully administering its estate, including reconciling claims subject to compromise under the Plan. Although Old Cumulus emerged from Chapter 11 on the Effective Date, the Old Cumulus Chapter 11 Case will remain open until its estate has been fully administered and the Bankruptcy Court enters an order closing its case.

Cancellation of Certain Prepetition Obligations

Rights Agreement, dated as of June 5, 2017, between Cumulus Media Inc. and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”).

Additional Matters Contemplated by the Plan

On the Effective Date, the Company issued 11,052,211 shares of new Class A common stock and 5,218,209 shares of new Class B common stock;

On the Effective Date, the Company issued 3,016,853 Series 1 warrants to purchase shares of new common stock;

The holders of unsecured claims against Old Cumulus, including claims arising from the 7.75% Senior Notes received, in the aggregate, 16.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Incentive Plan;

Intercompany Claims and Interests (as defined in the Plan) were canceled without any distribution on account of such Intercompany Claims and Interests.

The foregoing description of certain of the matters ~~discussed~~effected pursuant to the Plan, and ~~described~~the transactions related to and contemplated thereunder, is not intended to be a complete description of, or a substitute for, a full and complete reading of the Plan.

On November 22, 2017, as a result of the Company's previously disclosed non-compliance with certain NASDAQ Stock Market LLC ("NASDAQ") listing rules, trading in the ~~following Management’s Discussion~~Company’s Class A common stock was suspended effective at the open of business, on November 22, 2017. After the Company's emergence from Chapter 11, the Company applied for relisting on the NASDAQ Global Market. On July 27, 2018, the Company received notification from NASDAQ that our application was approved. The Company's Class A common stock began trading on the NASDAQ Global Market at the open of business on August 1, 2018.

In connection with the Company’s emergence from Chapter 11 on the Effective Date, the Company qualified for fresh start accounting under ASC 852 as (i) the holders of voting shares of the Predecessor Company received less than 50% of the voting shares of the Successor Company and ~~Analysis~~(ii) the reorganization value of ~~Financial Condition~~the Company’s assets immediately prior to confirmation of the Plan was less than the pre-petition liabilities and ~~Results~~allowed claims. ASC 852 requires that fresh start accounting be applied when the Bankruptcy Court enters the confirmation order confirming a plan of ~~Operations, including certain defined terms used herein, see the notes~~reorganization, or as of a later date when all material conditions precedent to the ~~accompanying unaudited condensed~~effectiveness of a plan of reorganization are resolved, which for CUMULUS MEDIA was June 4, 2018. The Company has applied fresh start accounting as of the Effective Date.

Upon the application of fresh start accounting, CUMULUS MEDIA allocated the reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, Business Combinations ("ASC 805"). Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. Liabilities existing as of the Effective Date, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates. Deferred taxes were determined in conformity with applicable accounting standards. Predecessor Company accumulated depreciation, accumulated amortization, and accumulated deficit were eliminated. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Company’s consolidated financial statements ~~included elsewhere in~~after June 3, 2018 will not be comparable to the Company’s consolidated financial statements as of or prior to that date.

In accordance with the requirements of Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), and ASC 205-40, the Company has the responsibility to evaluate at each reporting period, including interim periods, whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations. In its evaluation for this ~~quarterly report.~~report, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due within one year following the date of issuance of this Quarterly Report on Form 10-Q.

~~Our Business~~During the pendency of the Chapter 11 Cases, Old Cumulus’s ability to continue as a going concern was contingent upon a variety of factors, including the Bankruptcy Court’s approval of the Plan and ~~Operating Overview~~the Company’s ability to successfully implement the Plan. As a result of the effectiveness of the Plan, the Company believes it has the ability to meet its obligations for at least one year from the date of issuance of this Form 10-Q.

~~A leader~~As of June 30, 2018, the Company had $66.7 million of cash and cash equivalents including restricted cash. The Company used cash in operating activities of $1.7 million for the ~~radio broadcasting industry,~~period from June 4, 2018 through June 30, 2018 and generated cash from operating activities of $29.1 million for the period from January 1 through June 3, 2018. Old Cumulus ~~Media combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to~~generated cash from operating activities of $16.9 million for the 245 million people reached each week through its 446 owned-and-operated stations broadcasting in 90 US media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Together, the Cumulus/Westwood One platforms make Cumulus Media one of the few media companies that can provide advertisers with national reach and local impact. Cumulus/Westwood One is the exclusive radio broadcast partner to some of the largest brands in sports, entertainment, news and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, Westwood One News, and more. Additionally, it is the nation's leading provider of country music and lifestyle content through its NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events. For more information, visit ~~www.cumulus.com~~.

~~Liquidity Considerations~~

Historically, our principal needs for funds have been for acquisitions, expenses associated with our station, network advertising and corporate operations, capital expenditures, and interest and debt service payments. We believe that our funding needs in the future will be for substantially similar matters.six month period ended June 30, 2017.

~~Our~~Historically, our principal sources of funds have primarily been cash flow from operations and borrowings under credit facilities in existence from time to time. Our cash flow from operations isremains subject to factors such as fluctuations in ~~preferred~~ advertising media preferences and changes in demand caused by shifts in population, station listenership, demographics and audience tastes. In addition, our cash flows may be affected if customers are not able to pay, or delay payment of, accounts receivable that are owed to us, which risks may be exacerbated in challenging or otherwise uncertain economic periods. In recent periods, the Company has experienced reductions in revenue and profitability from prior historical periods because of continuing market revenue pressures and cost escalations built into certain contracts. As disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2016, as part of the Company’s annual impairment analysis, the Company reduced its forecasted revenue and profitability. This reduction was based on a number of factors including overall industry trends and the Company’s actual performance in 2016. Management has taken steps to mitigate these risks and reductions through renewed business generation activities and cost containment initiatives, although we can provide no assurances as to the longer-term success of these efforts. In addition,Notwithstanding this, we believe that our national platform and extensive station portfolio representing a broad diversity in format, listener base, geography, and advertiser base helps us maintain a more stable revenue stream by reducing our dependence on any single demographic, region or industry. Future reductions in revenue or profitability are possible and could have a material adverse effect on the ~~Company's~~Company’s results of operations, financial condition or liquidity. From time to time we have evaluated, and expect that we will continue to evaluate, opportunities to obtain additional public or private capital from the divestiture of radio stations or other assets that are not a part of, or do not complement, our strategic operations, as well as the issuance of equity and/or debt securities, in each case subject to market and other conditions in existence at that time. For the nine months ended September 30, 2017, the Company generated $34.1 million in cash from operations.

From time to time we have evaluated, and expect that we will continue to evaluate, opportunities to obtain additional ~~public or private~~ capital from the divestiture of radio stations or other assets where the net value accretion realized in a sale exceeds the value that management believes could be realized over time by continuing to operate the assets, or that are not a part of, or do not complement, our strategic operations, ~~as well as the issuance of equity and/or debt securities, in each case~~ subject to market and other conditions in existence at that time.

We are party to various agreements intended to supplement our cash flows from operations. Our Amended and Restated Credit Agreement, dated as of December 23, 2013 (the "Credit Agreement"), consists of a term loan (the “Term Loan”) maturing in December 2020 and a $200.0 million revolving credit facility (the "Revolving Credit Facility"), with a $30.0 million sublimit for letters of credit maturing in December 2018.

On August 29, 2017, we used proceeds from the sale of certain land an buildings to repay approximately $81.7 million of Term Loan borrowings. At September 30, 2017 and December 31, 2016, the Company had $1.729 billion and $1.810 billion, respectively, outstanding under the Term Loan and no amounts outstanding under the Revolving Credit Facility.

The Company's outstanding $610.0 million of 7.75% senior notes due 2019 (the "7.75% Senior Notes") mature on May 1, 2019. Notwithstanding the stated maturity date of the Term Loan, as a result of a springing maturity provision, if on January 30, 2019, the aggregate principal amount of 7.75% Senior Notes outstanding exceeds $200.0 million, the Term Loan maturity date will be accelerated to January 30, 2019.

In the event amounts are outstanding under the Revolving Credit Facility or any letters of credit are outstanding that have not been collateralized by cash as of the end of each quarter, the Credit Agreement requires compliance with a consolidated first lien leverage ratio covenant. The required ratio at September 30, 2017 was 4.25 to 1.0, and that ratio periodically decreases until it reaches 4.0 to 1.0 on March 31, 2018. As we currently have no borrowings outstanding under the Revolving Credit Facility, we are not required to comply with that ratio. However, as of September 30, 2017, our actual leverage ratio exceeded the required ratio.

We are also party to a five-year, $50.0 million revolving accounts receivable securitization facility entered into on December 6, 2013 (the “Securitization Facility”) with Wells Fargo (as successor to General Electric Capital Corporation), as a lender, swing line lender and administrative agent (together with any other lenders party thereto from time to time, the “Lenders”). Pursuant to a Receivables Sale and Servicing Agreement, dated as of December 6, 2013 (the “Sale Agreement”), certain subsidiaries of the Company sell and/or contribute their existing and future accounts receivable to a special purpose entity and wholly-owned subsidiary of the Company (the “SPV”). The SPV may thereafter make borrowings from the Lenders, which borrowings are secured by those receivables, pursuant to an Amended and Restated Receivables Funding and Administration Agreement, dated as of March 15, 2017.

At September 30, 2017, our long-term debt consisted of $1.729 billion outstanding under the Term Loan and $610.0 million in 7.75% Senior Notes. No amounts were outstanding under the Revolving Credit Facility or the Securitization Facility.

On January 3, 2014 (the "Commencement Date”), Merlin Media, LLC (“Merlin”) and the Company entered into a local marketing agreement. Under this local marketing agreement, the Company is responsible for operating two FM radio stations in Chicago, Illinois, for monthly fees payable to Merlin of approximately $0.3 million, $0.4 million, $0.5 million and $0.6 million in the first, second, third and fourth years following the Commencement Date, respectively, in exchange for the Company retaining the operating profits from these radio stations.

The Company and Merlin also entered into an agreement pursuant to which the Company had the right to purchase these two FM radio stations until October 5, 2017 for an amount in cash equal to the greater of (i) $70.0 million minus the aggregate amount of monthly fees paid by the Company on or prior to the earlier of the closing date or the date that is four years after the Commencement Date; or (ii) $50.0 million. Conversely, Merlin has the right to require the Company to purchase these two FM radio stations at any time during a ten business day period commencing October 6, 2017 for $71.0 million, minus the aggregate amount of monthly fees paid by the Company on or prior to the earlier of the closing date and January 2, 2018.

~~On October 6, 2017, Merlin notified the Company that it was exercising the right to require the Company to acquire the stations.~~

In accordance with the requirements of Accounting Standards Update (“ASU”), or ASU 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), or ASC 205-40, the Company has the responsibility to evaluate at each reporting period, including interim periods, whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations. In its evaluation for this report, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due for 12 months following the date of issuance of this Quarterly Report on Form 10-Q.

As of September 30, 2017, the Company had $69.4 million of cash and cash equivalents and $50.0 million of availability under its Securitization Facility. The Company has generated positive cash flows from operating activities of $34.1 million and $32.3 million for the nine months ended September 30, 2017 and 2016, respectively. The Company expects it will continue to generate positive cash flows from operating activities in the fourth quarter of 2017 and full year 2018. Although the servicing of the Company’s debt obligations requires a substantial amount of the cash generated, the Company anticipates that its current capital resources will enable it to meet its anticipated debt service obligations, operational expenses and capital expenditures through at least the third quarter of calendar year 2018, assuming that the Company’s lenders and other creditors do not accelerate any amounts due to them, as described in more detail below.

Amounts outstanding under the Term Loan mature on December 23, 2020 and the 7.75% Senior Notes mature on May 1, 2019. Notwithstanding these maturity dates, the Credit Agreement includes a springing maturity provision that provides that if on January 30, 2019, the aggregate principal amount of 7.75% Senior Notes outstanding exceeds $200.0 million, the maturity date of the Term Loan will be accelerated to January 30, 2019. If the Company is unable to refinance or extend its term loan or the 7.75% Senior Notes, or take other steps to create additional liquidity or otherwise avoid the occurrence of the springing maturity, forecasted cash flows would not be sufficient for the Company to meet its obligations as of January 30, 2019.

On October 30, 2017, the Restructuring Committee of the Board of Directors authorized the Company to forgo the scheduled interest payment on the 7.75% Senior Notes on November 1, 2017 of approximately $23.6 million and thus enter into the applicable 30-day grace period under the terms of the indenture governing such notes (the “Indenture”). This nonpayment constitutes a “default” under the terms of the Indenture, which matures into an “Event of Default” (as defined in the Indenture) if such “default” is not cured or waived before the expiration of the 30-day grace period on December 1, 2017. Upon the occurrence of an Event of Default, the trustee under the Indenture, or the holders of a specified percentage of 7.75% Senior Notes, may declare all outstanding amounts immediately due and payable. Such an Event of Default would also constitute an event of default under the Credit Agreement, which would permit the lenders thereunder to declare all amounts outstanding under the Credit Agreement to be immediately due and payable.

As previously disclosed, the Company, with the assistance of outside advisors, is in private discussions with its lenders and the holders of its 7.75% Senior Notes to proactively restructure its balance sheet and reduce its debt. Such restructuring or refinancing transactions could include the issuance of additional equity securities in satisfaction of a portion of our indebtedness outside of the protections of Chapter 11 of the U.S. Bankruptcy Code. We cannot provide any assurances of our ability to timely complete any such transactions, or the structure or likelihood of success thereof. If the Company is unsuccessful in restructuring or refinancing its indebtedness outside the court-approved process, it could seek to effectuate a restructuring under the protection of Chapter 11 of the U.S. Bankruptcy Code.

required by the accounting guidance cited above, there is substantial doubt as to the Company’s ability to continue as a going concern for a period of 12 months following the date of issuance of this Quarterly Report on Form 10-Q.

As previously disclosed, based on the results of required annual or interim impairment testing in certain recent historical periods, wethe Predecessor Company incurred non-cash impairment charges against intangible assets and goodwill, including a non-cash impairment charge against FCC licenses of $335.9 million for the year ended December 31, 2017 and charges of $603.1 million against goodwill and FCC licenses for the year ended December 31, 2016. Such non-cash charges reduced ~~our~~the Predecessor Company’s reported operating results in those periods; however, as these charges did not require a cash outlay, they had no effect on ~~our liquidity position in the near term. As described elsewhere herein, we did not incur any impairment charges during the three and nine months ended September 30, 2017.~~liquidity. Any future impairment charges could materially adversely affect our financial results in the periods in which they are recorded.

As previously disclosed, on March 21, 2017, the Company received a notification from the NASDAQ indicating that the Company was not in compliance with NASDAQ Listing Rule 5550(b)(1) (the "Equity Listing Rule") because the Company's stockholder's equity was below the minimum required amount, and because the Company did not meet the alternative continued listing standards of that Rule. Separately, on April 5, 2017, the Company received a notification from the NASDAQ indicating that the Company was not in compliance with NASDAQ Listing Rule 5550(a)(2) (the "Bid Price Rule") because the bid price of the Company’s Class A common stock had closed below $1.00 per share for 30 consecutive business days.

On September 1, 2017 and October 3, 2017, the Company received letters from NASDAQ (the “Notices”) to delist the Company’s shares from the Nasdaq Capital Market for noncompliance under the Equity Listing Rule and Bid Price Rule, respectively. In accordance with the Listing Rules of NASDAQ, the Company filed an appeal of the pending delisting actions.

On October 26, 2017, we appeared before The NASDAQ Hearings Panel, where we appealed the Nasdaq Listing Qualification determination to delist the Company's securities from The Nasdaq Capital Market. The Company’s Class A common stock will continue to trade on the Nasdaq Capital Market while the appeal hearing is pending. As previously stated, there can be no assurance that the Company will be successful in its appeal and that the NASDAQ hearings panel will grant the Company’s request for an extension of time to regain compliance with either the Rule or the Equity Rule. In each event, if the Company is unsuccessful in its appeal, or it is not able to regain compliance with the Rule or the Equity Rule within any extension of time granted by the NASDAQ hearings panel, the Company expects that trading in its Class A common stock would thereafter be suspended and the stock would be removed from listing on NASDAQ. If the Company’s Class A common stock is removed from listing on NASDAQ, the Company expects that such stock would be eligible to be traded on the OTC Markets, an electronic quotation service operated by OTC Markets Group Inc. for eligible securities traded over-the-counter, on or about the same day or shortly thereafter.

~~Our inability to maintain the listing of our Class A common stock on the NASDAQ stock market may adversely affect the liquidity and market price of our Class A common stock.~~

On June 5, 2017, the Company��s Board of Directors adopted a stockholder rights plan, which is scheduled to expire in June 2018. Pursuant to the rights plan, the Company declared a dividend of one right for each outstanding share of Class A common stock of the Company, payable to holders of record on June 15, 2017. The rights will initially trade with the Company’s Class A common stock and will generally become exercisable only if any person (or any persons acting in concert or as a group) acquires a voting or economic position in 4.99% or more of the Company’s outstanding Class A common stock. If the rights become exercisable, all holders of rights (other than any triggering person) will be entitled to acquire shares of Class A common stock at a 50% discount or the Company may exchange each Right held by such holders for one share of Class A common stock. Under the rights plan, any person that owned more than 4.99% of the Company’s outstanding Class A common stock may continue to own its shares of Class A common stock but may not acquire a voting or economic interest in any additional shares of Class A common stock without triggering the rights plan.

~~Seasonality and Cyclicality~~

Our advertising revenues vary by quarter throughout the year. As is typical with advertising revenue supported businesses, our first calendar quarter typically produces the lowest revenues of any quarter during the year, as advertising generally declines following the winter holidays. The second and fourth calendar quarters typically produce the highest

revenues for the year. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups. This political spending typically is heaviest during the fourth quarter.

~~Advertising Revenue and Adjusted EBITDA~~

Our primary source of revenue is the sale of advertising time. Our sales of advertising time are primarily affected by the demand from local, regional and national advertisers, which also impacts the advertising rates we charge. Advertising demand and rates are based primarily on the ability to attract audiences in the demographic groups targeted by such advertisers, as measured principally by various ratings agencies on a periodic basis. We endeavor to provide compelling programming and form connections between our on-air talent and listeners in order to develop strong listener loyalty, and we believe that the diversification of our formats and programs, including non-music formats and proprietary content, helps to insulate us from the effects of changes in the musical tastes of the public with respect to any particular format.

We strive to maximize revenue by managing our on-air inventory of advertising time and adjusting prices based on supply and demand. The optimal number of advertisements available for sale depends on the programming format of a particular radio program. Each program has a general target level of on-air inventory available for advertising. This target level of advertising inventory may vary at different times of the day but tends to remain stable over time. We seek to broaden our base of advertisers in each of our markets by providing a wide array of audience demographic segments across each cluster of stations, thereby providing potential advertisers with an effective means to reach a targeted demographic group. Our advertising contracts are generally short-term. We generate most of our revenue from local and regional advertising, which is sold primarily by a station’s sales staff.

In addition to local and regional advertising revenues, we monetize our available inventory in both national spot and network sales marketplaces using our national platform. To effectively deliver network advertising for our customers, we distribute content and programming through third party affiliates in order to reach a broader national audience. Typically, in exchange for the right to broadcast radio network programming, third party affiliates remit a portion of their advertising time to us, which is then aggregated into packages focused on specific demographic groups and sold by us to our advertiser clients that want to reach those demographic groups on a national basis.

In the broadcasting industry, we sometimes utilize trade or barter agreements that exchange advertising time for goods or services such as travel or lodging, instead of for cash. Trade revenue totaled $28.9 million and $26.5 million for the nine months ended September 30, 2017 and 2016, respectively.

We continually evaluate opportunities to increase revenues through new platforms, including technology-based initiatives. As a result of those revenue increasing opportunities through new platforms, our operating results in any period may be affected by the incurrence of advertising and promotion expenses that typically do not have an effect on revenue generation until future periods, if at all. In addition, as part of this evaluation we also from time to time reorganize and discontinue certain redundant and/or unprofitable content vehicles across our platform which we expect will impact our broadcast revenues in the future. To date inflation has not had a material effect on our revenues or results of operations, although no assurances can be provided that material inflation in the future would not materially adversely affect us.

Non-GAAP Financial Measure

Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted ~~EBITDA~~EBITDA”) and segment Adjusted EBITDA are the financial metrics by which management and the chief operating decision maker allocate resources of the Company and analyze the performance of the Company as a whole and each of our reportable segments, respectively. Management also uses this measure to determine the contribution of our core operations to the funding of our corporate resources utilized to manage our operations and our non-operating expenses including debt service and acquisitions. In addition, consolidated Adjusted EBITDA ~~excluding the impact of local marketing agreement fees,~~ is a key metric for purposes of calculating and determining our compliance with certain covenants contained in our Credit Agreement.

~~The~~In determining Adjusted EBITDA, the Company excludes from ~~Adjusted EBITDA~~net income items not related to core operations and those that are non-cash including: interest, taxes, depreciation, amortization, stock-based compensation expense, gain or loss on the exchange, sale, or ~~sale~~disposal of any assets or stations, early extinguishment of debt, local marketing agreement fees (as such fees are excluded from the definition of such term for purposes of calculating covenant compliance under the credit agreement), expenses relating to acquisitions, restructuring costs, reorganization items and non-cash impairments of ~~assets.~~assets, if any.

EBITDA is routinely utilized to evaluate and negotiate the potential purchase price for media companies. Given the relevance to our overall value, management believes that investors consider the metric to be extremely useful.

Consolidated Results of Operations

Analysis of Consolidated Results of Operations

~~A quantitative reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, follows in this section.~~

The following selected data from our unaudited ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations and other supplementary data~~Operations should be referred to while reading the results of operations discussion that follows (dollars in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						% Change Three Months Ended		% Change Nine Months Ended		Successor Company			Predecessor Company
	2017			2016			2017			2016							Period from June 4, 2018 through June 30, 2018			Period from April 1, 2018 through June 3, 2018			Three Months Ended June 30, 2017
STATEMENT OF OPERATIONS DATA:
Net revenue	$	287,240		$	286,136		$	841,801		$	841,859		0.4	%	—	%	$	95,004		$	190,245		$	290,531
Content costs	96,321			115,348			291,390			312,526			(16.5	)%	(6.8	)%	27,685			59,117			93,289
Selling, general and administrative expenses	119,293			117,387			354,189			352,474			1.6	%	0.5	%	38,719			85,097			120,506
Depreciation and amortization	15,208			21,957			47,610			68,023			(30.7	)%	(30.0	)%	4,379			10,065			16,120
Local marketing agreement fees	2,717			2,481			8,137			10,351			9.5	%	(21.4	)%	358			702			2,713
Corporate expenses (including stock-based compensation expense)	10,853			9,960			32,281			34,028			9.0	%	(5.1	)%	10,125			6,682			10,473
Gain on sale of assets or stations	(83		)	(94,014		)	(2,585		)	(97,155		)	(99.9	)%	(97.3	)%
Impairment of intangible assets and goodwill	—			—			—			1,816			**		**
Loss on sale or disposal of assets or stations																	—			147			104
Operating income	42,931			113,017			110,779			159,796			(62.0	)%	(30.7	)%	13,738			28,435			47,326
Reorganization items, net																	—			496,368			—
Interest expense	(35,335		)	(34,929		)	(103,742		)	(103,896		)	(1.2	)%	0.1	%	(6,176		)	(132		)	(34,344		)
Interest income	34			139			106			364			(75.5	)%	(70.9	)%	4			21			35
Loss on early extinguishment of debt	(1,063		)	—			(1,063		)	—			**		**
Other (expense) income, net	(36		)	882			(64		)	1,598			(104.1	)%	(104.0	)%
Other income (expense), net																	20			(276		)	(111		)
Income before income taxes	6,531			79,109			6,016			57,862			(91.7	)%	(89.6	)%	7,586			524,416			12,906
Income tax expense	(5,257		)	(32,788		)	(6,465		)	(24,904		)	(84.0	)%	74.0	%
Net income (loss)	$	1,274		$	46,321		$	(449	)	$	32,958		(97.2	)%	(101.4	)%
Income tax (expense) benefit																	(2,606		)	176,741			(7,234		)
Net income																	$	4,980		$	701,157		$	5,672
KEY FINANCIAL METRIC:
Adjusted EBITDA	$	61,765		$	43,884		$	167,899		$	148,998		40.7	%	12.7	%	$	26,115		$	40,241		$	67,400

** Calculation is not meaningful



	Successor Company			Predecessor Company
	Period from June 4, 2018 through June 30, 2018			Period from January 1, 2018 through June 3, 2018			Six Months Ended June 30, 2017
STATEMENT OF OPERATIONS DATA:
Net revenue	$	95,004		$	453,924		$	554,561
Content costs	27,685			159,681			195,069
Selling, general and administrative expenses	38,719			199,482			234,896
Depreciation and amortization	4,379			22,046			32,402
Local marketing agreement fees	358			1,809			5,420
Corporate expenses (including stock-based compensation expense)	10,125			17,169			21,428
Loss (gain) on sale or disposal of assets or stations	—			158			(2,502		)
Operating income	13,738			53,579			67,848
Reorganization items, net	—			466,201			—
Interest expense	(6,176		)	(260		)	(68,407		)
Interest income	4			50			72
Other income (loss), net	20			(273		)	(28		)
Income (loss) before income taxes	7,586			519,297			(515		)
Income tax (expense) benefit	(2,606		)	176,859			(1,208		)
Net income (loss)	$	4,980		$	696,156		$	(1,723	)
KEY FINANCIAL METRIC:
Adjusted EBITDA	$	26,115		$	80,512		$	106,133

Fresh Start Accounting Adjustments

The Company's operating results and key operating performance measures on a consolidated basis, as well as within the Cumulus Radio Station Group and Westwood One, were not materially impacted by the reorganization. We believe that certain of our consolidated operating results for each of the periods from January 1, 2018 through June 3, 2018 (“2018 Predecessor Period”) and April 1, 2018 through June 3, 2018 (“2018 Second Quarter Predecessor Period”), when combined with our consolidated operating results for the period from June 4, 2018 through June 30, 2018 (“Successor Period”) are comparable to certain operating results from the comparable prior year’s periods. Accordingly, we believe that discussing the combined results of operations and cash flows of the Predecessor Company and the Successor Company for each of the three and six month periods ended June 30, 2018 is useful when analyzing certain performance measures. For items that are not comparable, we have included additional analysis to supplement the discussion.

Successor Period and 2018 Second Quarter Predecessor Period Compared to the Predecessor Company Three Months Ended ~~September~~June 30, 2017 ~~Compared to the~~ ~~Three Months Ended September 30, 2016~~

Net Revenue

~~Broadcast advertising revenue.~~ Most of our revenue is generated through the sale of terrestrial, also known as broadcast, radio advertising time to local, regional, and national clients. Local spot and regional spot advertising is sold by Cumulus employed sales executives. National spot advertising for our owned-and-operated stations is marketed and sold by both Katz Media in an outsourced arrangement as well as our own internal national sales team, which collectively markets to advertisers under the sales brand of Westwood One Media Sales. Network advertising airing across our owned, operated and affiliated stations is sold by our internal sales team located across the United States under the Westwood One Networks brand to predominantly national and regional advertisers.

~~Digital advertising revenue.~~ We generate digital advertising revenue from the sale of advertising and promotional opportunities across our streaming audio network, digital commerce platform, websites and mobile applications. We operate the fourth largest streaming audio advertising network in the United States, including owned and operated internet radio simulcast stations, and other third party digital audio companies with whom we have advertising reseller agreements. Additionally, we sell digital advertising adjacent to or embedded in podcasts through our network of owned and third party podcasts. Our digital commerce platform utilizes couponing and discounted daily deals to create promotional opportunities for local, regional and national clients under our Sweet Deals and Incentrev brands. We also sell banner and other display ads across more than 400 local radio station websites, mobile applications, and ancillary custom client microsites.

~~Political advertising revenue.~~ Political advertising revenue is generated across all of our broadcast and digital assets, but we highlight it as a separate category to distinguish its highly cyclical nature versus core revenue. Political advertising is generally strongest during even-numbered years, especially in the fourth quarter of such years, when most national and state elections are conducted. In addition to candidate advertising revenue, we also receive advertising revenue from special interest and advocacy groups.

~~License Fees & Other~~. All other non-advertising based revenue types where the Company participates are aggregated in our License Fees & Other revenue category. This includes fees we receive for content licensing, third party network compensation, proprietary software licensing, subleases and rents (predominantly for owned towers), and all other revenue.

Net revenue for the Successor Period and the 2018 Second Quarter Predecessor Period compared to net revenue for the Predecessor Company three months ended ~~September~~June 30, 2017 ~~increased $1.1 million, or 0.4%, to $287.2 million, compared to $286.1 million for~~decreased primarily as a result of a decline in local broadcast advertising revenue within our radio markets and the ~~three months ended September 30, 2016. The increase resulted primarily from increases~~loss of ~~$4.0 million and~~approximately $0.7 million in ~~license fees and other and digital advertising, respectively,~~revenue from United States Traffic Networks ("USTN"), partially offset by ~~decreases of $1.8 million~~increases in digital advertising revenue, national advertising revenue and ~~$1.8 million in broadcast advertising and~~cyclical political ~~advertising, respectively.~~revenue. For a discussion of net revenue by segment and a comparison ~~between~~by segment of the Successor Period and the 2018 Second Quarter Predecessor Period to the Predecessor Company three months ended ~~September~~June 30, 2017, ~~and the three months ended September 30, 2016,~~ see the discussion under "Segment Results of Operations."

Content Costs

Content costs consist of all costs related to the licensing, acquisition and development of our programming.

Content costs for the Successor Period and the 2018 Second Quarter Predecessor Period compared to the Predecessor Company three months ended ~~September~~June 30, 2017 decreased ~~by $19.0 million,~~primarily as a result of the termination or ~~16.5%, to $96.3 million, compared to $115.3 million for~~renegotiation of certain contractual agreements, in some cases in connection with the ~~three months ended September 30, 2016.~~filing of the Chapter 11 Cases. The remainder of the decrease was ~~primarily driven by the impact of an expense of $14.4 million at Westwood One incurred during the third quarter of 2016,~~ related to ~~payments to CBS to resolve previously disputed syndicated programming~~reductions in other programming-related expenses such as music license fees as a result of lower revenue, and ~~network inventory expenses, and lower content costs at the Station Group, partially offset by higher content costs at Westwood One associated with increased revenue.~~a decrease in employee costs.

Selling, General ~~and~~& Administrative Expenses

Selling, general and administrative expenses consist of expenses related to our sales efforts and distribution of our content across our platform and overhead in our markets.

Selling, general and administrative expenses for the Successor Period and the 2018 Second Quarter Predecessor Period compared to the Predecessor Company three months ended ~~September~~June 30, 2017 increased ~~by $1.9~~primarily as a result of a $4.1 million ~~or 1.6%, to $119.3 million compared to $117.4 million for the three months ended September 30, 2016. The increase resulted primarily from an increase of $2.1 million in~~ bad debt ~~expense.~~expense related to receivables from USTN. In addition, we experienced higher digital costs associated with higher digital revenue during the comparative periods. These increases were partially offset by lower sales commission and salary expense associated with lower broadcast revenue and the impact of our implementation of ASC 606 as well as lower legal fees and ratings service fees.

Depreciation and Amortization

Depreciation and amortization for the Successor Period and the 2018 Second Quarter Predecessor Period are not directly comparable to depreciation and amortization for the Predecessor Company three months ended ~~September~~June 30, ~~2017 decreased $6.7 million, or 30.7%, to $15.2 million, compared to $22.0 million for~~2017. During the ~~three months ended September 30, 2016. This decrease was primarily caused by a~~

~~decrease in~~2018 Second Quarter Predecessor Period, amortization expense ~~of our definite-lived intangible assets, which resulted from~~decreased based on the amortization methodology ~~we apply based~~used. During the Successor Period, depreciation and amortization expense increased because of the higher valuation of fixed assets in connection with the Company’s fresh start accounting application.

Local Marketing Agreement Fees

Local marketing agreements are those agreements whereby the Company agrees to operate a radio station on behalf of another party. Our local marketing agreement fees are not comparable between the ~~expected pattern in~~Successor and Predecessor periods. During the quarter ended March 31, 2018, the Company and Merlin Media, LLC ("Merlin") amended their local marketing agreement under which the ~~underlying assets' economic benefits are consumed.~~Company programmed two FM radio stations owned by Merlin. The Company then ceased programming one of the stations ("WLUP") on March 9, 2018. On June 15, 2018, the Company purchased the other station (“WKQX”) and certain intellectual property for $18.0 million in cash.

Corporate Expenses, Including Stock-based CompensationExpense and Acquisition-related and Restructuring Costs

Corporate expenses consist primarily of compensation and related costs for our executive, accounting, finance, human resources, information technology and legal personnel, and fees for professional services. Professional services are principally comprised of audit, consulting and outside legal services.

Corporate expenses also include restructuring expenses. Corporate expenses, including stock-based compensation expense, for the Successor Period and the 2018 Second Quarter Predecessor Period compared to the Predecessor Company three months ended ~~September~~June 30, 2017 increased ~~$0.9 million, or 9.0%,~~primarily as a result of higher restructuring expenses after the Effective Date related to ~~$10.9 million, compared to $10.0 million for~~ the ~~three months ended September 30, 2016. This increase was primarily driven~~Company's emergence from chapter 11, and additional professional fees. These increases were partially offset by ~~an increase in restructuring related costs.~~lower corporate employee costs and lower rent.

~~Gain on Sale of Assets or Stations~~Reorganization Items, Net

During the ~~three months ended September 30, 2017~~2018 Second Quarter Predecessor Period, we recorded costs related to our Chapter 11 Cases. Reorganization items incurred as a ~~gain on sale~~result of ~~assets~~the Chapter 11 Cases are presented separately in the accompanying Condensed Consolidated Statement of Operations and were as follows (dollars in thousands):



	Predecessor Company
	Period from April 1, 2018 through June 3, 2018
Gain on settlement of Liabilities subject to compromise (a)	$	726,831
Fresh start adjustments (b)	(179,291		)
Professional fees (c)	(29,560		)
Non-cash claims adjustments (d)	(15,364		)
Rejected executory contracts (e)	(2,936		)
Other (f)	(3,312		)
Reorganization items, net	$	496,368

(a) Liabilities subject to compromise have been, or ~~stations of $0.1 million. During~~will be settled in accordance with the ~~three months ended September 30, 2016, we completed the sale~~Plan.

(b) Revaluation of certain ~~land~~assets and ~~buildings for $110.6 million in cash which resulted in a one-time net gain~~liabilities upon the adoption of ~~$94.0 million.~~fresh start accounting.

(d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court.

(e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts.

Interest Expense

Total interest expense for the Successor Period and for the 2018 Second Quarter Predecessor Period are not comparable, nor is the total interest expense for those periods combined comparable to that of the Predecessor Company three months ended ~~September~~June 30, ~~2017 increased $0.4~~2017. During the Successor Period, we recorded interest expense of approximately $6.1 million on $1.3 billion in outstanding debt at an average interest rate of approximately 6.6%. During the Second Quarter 2018 Predecessor Period, the Predecessor Company made adequate protection payments in lieu of interest payments on the Predecessor Term Loan which were recorded as a reduction of the principal balance outstanding. Interest payments were not recorded or ~~1.2%, to $35.3 million compared to $34.9 million for~~paid on the 7.75% Senior Notes while the Company was in Chapter 11. During the three months ended ~~September~~June 30, ~~2016. The majority~~2017, the Company recorded and paid interest expense in accordance with the provisions of the ~~increase resulted from an increase in interest rates.~~then outstanding debt agreements.

The ~~following summary~~below table details the components of our ~~total~~ interest expense by debt instrument (dollars in thousands):


	Three Months Ended September 30,				2017 vs 2016				Successor Company		Predecessor Company
	2017		2016		$ Change		% Change		Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018		Three Months Ended June 30, 2017
Bank borrowings – Term Loan									$	6,140	$	—	$	—
7.75% Senior Notes	$	11,819	$	11,819	$	—	—	%	—		—		11,819
Bank borrowings – term loans and revolving credit facilities	20,234		19,973		261		1.3	%
Bank borrowings – Predecessor Term Loan									—		—		19,526
Other, including debt issue cost amortization	3,282		3,137		145		4.6	%	36		132		2,999
Interest expense	$	35,335	$	34,929	$	406	1.2	%	$	6,176	$	132	$	34,344

Income Tax Expense (Benefit)

~~Income Taxes~~

~~For the three months ended September 30, 2017, the Company recorded~~The Company’s income tax ~~expense of $5.3 million on income before income taxes of $6.5 million, resulting in an~~provision (benefit) and effective tax rate ~~for the three months ended September 30, 2017 of approximately 80.5%.~~ were as follows:



	Successor Company			Predecessor Company
(in thousands, except percentages)	Period from June 4, 2018 through June 30, 2018			Period from April 1, 2018 through June 3, 2018			Three Months Ended June 30, 2017
Income before income taxes	$	7,586		$	524,416		$	12,906
Effective tax rate	34.4		%	(33.7		)%	56.1		%
Provision (benefit) for income taxes	2,606			(176,741		)	7,234
Provision for income taxes at 21% or 35%	1,593			110,127			4,517
Difference between tax at effective versus statutory rate	$	1,013		$	(286,868	)	$	2,717

The difference between the effective tax rate and the federal statutory rate of ~~35.0%~~21.0% for the ~~three months ended September 30, 2017 primarily~~2018 Second Quarter Predecessor Period relates to the income tax exclusion of cancellation of indebtedness income ("CODI") arising from the Plan, the Company's elections to increase tax basis in certain assets, statutory state and local income taxes, the impact of non-deductible expenses and changes to the ~~tax effect of certain statutory non-deductible items, the tax effect of changes in uncertain tax positions, and state tax law changes enacted during the period.~~

For the three months ended September 30, 2016, the Company recorded income tax expense of $32.8 million on income before income taxes of $79.1 million, resulting in an effective tax rate for the three months ended September 30, 2016 of approximately 41.4%.valuation allowance. The difference between the effective tax rate and the federal statutory rate of 35% for the ~~three months ended September 30, 2016~~Predecessor Company Second Quarter of 2017 relates to statutory state and local income taxes and the impact of non-deductible expenses.

The application of fresh start accounting on June 4, 2018 resulted in the re-measurement of deferred income taxes associated with the revaluation of the Company’s assets and liabilities (see Note 3, “Fresh Start Accounting”). As a result, net deferred income tax liabilities decreased $10.6 million. The Company continues to consider whether the deferred income tax assets are more likely than not to be realized based on its ability to generate sufficient taxable income in future years. At this time, the Company has determined that any tax attribute carryovers in existence prior to the date of reorganization are not more likely than not to be realized, as a result of attribute reduction, statutory limitations on utilization, and lack of future income at Old Cumulus.

The difference between the Company’s effective tax rate and the statutory rate of 21% during the Successor Period is attributable to statutory state and local income taxes, the tax effect of certain statutory non-deductible ~~items,~~expenses, changes in valuation allowances, and the tax effect of certain changes in uncertain tax ~~positions,~~positions.

We use the ~~tax effect~~liability method of ~~stock option terminations and forfeitures, as well as adjustments~~accounting for deferred income taxes. Except for goodwill, deferred income taxes are recognized for all temporary differences between the ~~amounts estimated in the~~ tax ~~provision~~ and ~~the actual amounts in the tax return.~~

~~The accompanying unaudited interim condensed consolidated~~ financial ~~statements have been prepared on a going-concern basis, which contemplates the realization~~reporting bases of our assets and liabilities based on enacted tax laws and statutory tax rates applicable to the ~~satisfaction of liabilities~~periods in which the ~~normal course of business. The Company continues~~differences are expected to ~~believe that the remaining~~affect taxable income. A valuation allowance is recorded against a deferred tax ~~assets are~~asset to adjust the asset to its net realizable value when it is not more likely than not tothat the benefits of its recovery will be ~~realized. If, however,~~recognized. We continually review the ~~Company is not able to generate sufficient future income during the attribute carryforward period or expectations around future events or earnings change, these~~adequacy of our valuation allowance on our deferred tax assets ~~may require~~and recognize the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740, Income Taxes ("ASC 740").

As of June 30, 2018, the Company continues to maintain a full valuation ~~allowance.~~allowance on loss carryforwards for which the Company does not believe it will be able to meet the more likely than not recognition standard for recovery. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company’s financial statements or tax returns as well as future profitability.

Adjusted EBITDA

As a result of the factors described above, Adjusted EBITDA for the Successor Period and the 2018 Second Quarter Predecessor Period compared to the Predecessor Company three months ended ~~September~~June 30, 2017 ~~increased 40.7% or $17.9 million to $61.8 million from $43.9 million for the three months ended September 30, 2016.~~decreased. For a discussion of Adjusted EBITDA by segment and a comparison ~~between~~by segment of the Successor Period and the 2018 Second Quarter Predecessor Period to the Predecessor Company three months ended ~~September~~June 30, 2017, ~~and the three months ended September 30, 2016,~~ see the discussion under "Segment Results of Operations."

Reconciliation of Non-GAAP Financial Measure

The following table reconciles Adjusted EBITDA to net income (the most directly comparable financial measure calculated and presented in accordance with GAAP) as presented in the accompanying unaudited consolidated ~~statements~~Statements of ~~operations~~Operations (dollars in thousands):


	Three Months Ended September 30,						% Change Three Months Ended		Successor Company		Predecessor Company
	2017			2016					Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018			Three Months Ended June 30, 2017
GAAP net income	$	1,274		$	46,321		(97.2	)%	$	4,980	$	701,157		$	5,672
Income tax expense	5,257			32,788			(84.0	)%
Non-operating expenses, net - including interest expense	35,336			33,908			4.2	%
Income tax expense (benefit)									2,606		(176,741		)	7,234
Non-operating expenses, including net interest expense									6,152		387			34,420
Local marketing agreement fees	2,717			2,481			9.5	%	358		702			2,713
Depreciation and amortization	15,208			21,957			(30.7	)%	4,379		10,065			16,120
Stock-based compensation expense	354			735			(51.8	)%	652		65			530
Gain on sale of assets or stations	(83		)	(94,014		)	**		—		147			104
Loss on early extinguishment of debt	1,063			—			**
Acquisition-related and restructuring costs (credits)	499			(450		)	**
Reorganization items, net									—		(496,368		)	—
Acquisition-related and restructuring costs									6,941		734			467
Franchise and state taxes	140			158			(11.4	)%	47		93			140
Adjusted EBITDA	$	61,765		$	43,884		40.7	%	$	26,115	$	40,241		$	67,400

** Calculation is not meaningful

~~Nine Months Ended September 30, 2017~~Successor Period and 2018 Predecessor Period Compared to the ~~Nine~~Predecessor Company Six Months Ended ~~September~~June 30, ~~2016~~2017

Net Revenue

Net revenue for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 ~~remained relatively flat at $841.8 million, compared to $841.9 million for the nine months ended September 30, 2016. Political advertising and~~decreased primarily as a result of a decline in local broadcast advertising revenue ~~decreased by $4.7 million and $1.1 million, respectively,~~in our radio markets, partially offset by increases ~~of $2.9 million~~in national and ~~$2.8 million in~~ digital ~~and license fee and other~~advertising revenue ~~respectively.~~as well as cyclical political advertising revenue. For a discussion of net revenue by segment and a comparison ~~between~~by segment of the ~~nine~~Successor Period and 2018 Predecessor Period to the Predecessor Company six months ended ~~September~~June 30, 2017, ~~and~~see the ~~nine months ended September 30, 2016, see~~discussion under "Segment Results of Operations."

Content Costs

Content costs for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 decreased ~~by $21.1 million,~~primarily as a result of the termination or ~~6.8%, to $291.4 million, compared to $312.5 million for~~renegotiation of certain contractual agreements, in some cases in connection with the ~~nine months ended September 30, 2016.~~filing of the Chapter 11 Cases. The remainder of the decrease was ~~driven primarily by the impact of the $14.4 million expense at Westwood One incurred during the third quarter of 2016~~ related to ~~payments to CBS to resolve previously disputed syndicated programming~~reductions in other programming-related expenses as a result of lower revenue, and ~~network inventory expenses, $3.2 million of expense~~a decrease in the second quarter of 2016 that related to a one-time correction to music licensing fees and certain content cost savings at Westwood One and the Station Group, partially offset by higher content costs at Westwood One associated with increased revenue.employee costs.

Selling, General ~~and~~& Administrative Expenses

Selling, general and administrative expenses for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 ~~remained relatively flat, increasing~~increased primarily as a result of higher digital costs associated with higher digital revenue, and $4.1 million in bad debt expense related to USTN. These increases were partially offset by ~~$1.7 million, to $354.2 million compared to $352.5 million for~~lower employee costs associated with lower revenue as well as the ~~nine months ended September 30, 2016.~~implementation of ASC 606, lower ratings service fees, and lower legal fees.

Depreciation and Amortization

Depreciation and amortization for the ~~nine~~Successor Period and 2018 Predecessor Period are not directly comparable to depreciation and amortization for the Predecessor Company six months ended ~~September~~June 30, ~~2017~~2017. During the 2018 Predecessor Period amortization expense decreased ~~$20.4 million, or 30.0%, to $47.6 million, compared to $68.0 million for~~based on amortization methodology used. During the ~~nine months ended September 30, 2016. This decrease was primarily caused~~Successor Period, depreciation and amortization expense increased because of the higher valuation of fixed assets in connection with the Company’s fresh start accounting application.

Local Marketing Agreement Fees

~~by a decrease in amortization expense of our definite-lived intangible assets, which resulted from~~Our local marketing agreement fees are not comparable between the ~~amortization methodology we apply to these assets that is based on~~Successor and Predecessor periods. During the ~~expected pattern in~~quarter ended March 31, 2018, the Company and Merlin amended their local marketing agreement under which the ~~underlying assets' economic benefits are consumed.~~Company programmed two FM radio stations owned by Merlin. The Company ceased programming WLUP on March 9, 2018. On June 15, 2018, the Company purchased WKQX and certain intellectual property for $18.0 million in cash.

Corporate Expenses, Including Stock-based CompensationExpense and Acquisition-related and Restructuring Costs

Corporate expenses, including stock-based compensation expense, for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 ~~decreased $1.7 million, or 5.1%, to $32.3 million, compared to $34.0 million for~~increased. This increase was primarily the ~~nine months ended September 30, 2016. This decrease was caused by decreases~~result of an increase in professional ~~services, restructuring~~fees after the Effective Date related ~~costs, and stock-based compensation expense.~~to the Company's emergence from Chapter 11, partially offset by a decrease in corporate employee costs.

~~Impairment of Intangible Assets and Goodwill~~

Reorganization Items, Net

During the ~~nine months ended September 30, 2016,~~Successor Period and 2018 Predecessor Period, we recorded ~~an impairment charge~~costs related to our ~~definite-lived intangible~~Chapter 11 Cases. Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Condensed Consolidated Statement of Operations and were as follows (dollars in thousands):



	Predecessor Company
		Period from January 1, 2018 through June 3, 2018
Gain on settlement of Liabilities subject to compromise (a)		$	726,831
Fresh start adjustments (b)		(179,291		)
Professional fees (c)		(54,386		)
Non-cash claims adjustments (d)		(15,364		)
Rejected executory contracts (e)		(5,976		)
Other (f)		(5,613		)
Reorganization items, net		$	466,201

(a) Liabilities subject to compromise have been, or will be settled in accordance with the Plan.

(b) Revaluation of certain assets and liabilities upon the adoption of ~~$1.8 million~~fresh start accounting.

(d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court.

(e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts.

(f) Federal Communications Commission filing and United States Trustee fees directly associated with the ~~re-positioning~~reorganization process and the write-off of ~~the print publication of NASH Country Weekly to a digital only publication. There were no similar impairments for the nine months ended September 30, 2017.~~Predecessor director and officer insurance policies.

~~Gain on Sale of Assets or Stations~~

During the nine months ended September 30, 2017, we recorded a gain of $2.6 million primarily related to the sale of land in our Salt Lake City, Utah market. During the three months ended September 30, 2016, we completed the sale of certain land and buildings for $110.6 million which resulted in a one-time net gain of $94.0 million.

Interest Expense

Total interest expense for the ~~nine~~Successor Period and for the 2018 Predecessor Period are not comparable, nor is the total interest expense for those periods combined comparable to that of the Predecessor Company six months ended ~~September~~June 30, 2017. During the Successor Period, we recorded interest expense of approximately $6.1 million on $1.3 billion in outstanding debt at an average interest rate of approximately 6.6%. During the 2018 Predecessor Period, the Predecessor Company made adequate protection payments in lieu of interest payments on the Predecessor Term Loan which were recorded as a reduction of the principal balance outstanding. Interest payments were not recorded or paid on the 7.75% Senior Notes while the Company was in Chapter 11. During the six months ended June 30, 2017, ~~decreased $0.2 million, or 0.1% to $103.7 million compared to $103.9 million for~~ the ~~nine months ended September 30, 2016. The majority~~Company recorded and paid interest expense in accordance with the provisions of the ~~decrease resulted from a reduction in total~~then outstanding debt ~~principal balances between the comparative periods.~~agreements.

The ~~following summary~~below table details the components of our ~~total~~ interest expense by debt instrument (dollars in thousands):


	Nine Months Ended September 30,				2017 vs 2016					Successor Company		Predecessor Company
	2017		2016		$ Change			% Change		Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018		Six Months Ended June 30, 2017
Bank borrowings – Term Loan										$	6,112	$	—	$	—
7.75% Senior Notes	$	35,456	$	35,456	$	—		—	%	—		—		23,637
Bank borrowings – term loans and revolving credit facilities	58,994		59,485		(491		)	(0.8	)%
Bank borrowings – Predecessor Term Loan										—		—		38,760
Other, including debt issue cost amortization	9,292		8,955		337			3.8	%	64		260		6,010
Interest expense	$	103,742	$	103,896	$	(154	)	(0.1	)%	$	6,176	$	260	$	68,407

Income Tax Expense (Benefit)

~~Income Taxes~~

~~For the nine months ended September 30, 2017, the Company recorded~~The Company’s income tax ~~expense of $6.5 million on income before income taxes of $6.0 million, resulting in an~~provision (benefit) and effective tax rate ~~for the nine months ended September 30, 2017 of approximately 107.5%.~~ were as follows:



	Successor Company			Predecessor Company
(in thousands, except percentages)	Period from June 4, 2018 through June 30, 2018			Period from January 1, 2018 through June 3, 2018			Six Months Ended June 30, 2017
Income (loss) before income taxes	$	7,586		$	519,297		$	(515	)
Effective tax rate	34.4		%	(34.1		)%	(234.6		)%
Provision (benefit) for income taxes	2,606			(176,859		)	1,208
Provision (benefit) for income taxes at 21% or 35%	1,593			109,052			(180		)
Difference between tax at effective versus statutory rate	$	1,013		$	(285,911	)	$	1,388

The difference between the effective tax rate and the federal statutory rate of ~~35.0%~~21.0% for the ~~nine months ended September 30, 2017,~~Predecessor Company period from January 1, 2018 to June 3, 2018 relates to the income tax exclusion of cancellation of indebtedness income ("CODI") arising from the effectiveness of the Plan, the Company's elections to increase the tax basis in certain assets, statutory state and local income taxes, the ~~tax effect~~impact of ~~certain statutory~~ non-deductible ~~items, the tax effect of stock option terminations~~reorganization costs and ~~forfeitures, the tax effect of changes in uncertain tax positions,~~other non-deductible expenses and ~~enacted~~ changes to ~~state and local tax laws.~~

~~For~~ the nine months ended September 30, 2016, the Company recorded income tax expense of $24.9 million on income before income taxes of $57.9 million, resulting in an effective tax rate for the nine months ended September 30, 2016 of approximately 43.0%.valuation allowance. The difference between the effective tax rate and the federal statutory rate of ~~35.0%~~35% for the ~~nine months~~Predecessor Company six month period ended ~~September~~June 30, ~~2016,~~2017 was primarily ~~relates~~attributable to ~~state~~stock option terminations and ~~local~~forfeitures related to the Company’s adoption of the 2017 incentive plan.

In conjunction with the Plan, the Company implemented a series of internal reorganization transactions through which it transferred the assets of Old Cumulus to an indirectly wholly-owned subsidiary of reorganized Cumulus Media Inc. (see Note 1, “Nature of Business, Interim Financial Data and Basis of Presentation”). The transfer of assets for income ~~taxes, an increase~~tax purposes results in a taxable sale of assets and stock, whereby the valuation allowance with respect to state net operating losses, the tax effect of certain statutory non-deductible items, the tax effect of changes in uncertain tax positions, enacted changes to state and local tax laws, as well as adjustments for differences between the amounts estimatedCompany will receive a step up in the tax ~~provision and~~basis of a significant portion of the ~~actual amounts~~underlying assets transferred, resulting in a future tax benefit.

The application of fresh start accounting on June 4, 2018 resulted in the ~~tax return.~~

~~The accompanying unaudited interim condensed consolidated financial statements~~re-measurement of deferred income taxes associated with the revaluation of the ~~Company have been prepared on a going-concern basis, which contemplates the realization of~~Company’s assets and ~~the satisfaction of~~ liabilities ~~in the normal course of business.~~(see Note 3, “Fresh Start Accounting”). As a result, net deferred income tax liabilities decreased $10.6 million. The Company continues to ~~believe that~~consider whether the ~~remaining~~ deferred income tax assets are more likely than not to be ~~realized. If~~

~~however, the Company is not able~~realized based on its ability to generate sufficient taxable income in future years. At this time, the Company has determined that any tax attribute carryovers in existence prior to the date of reorganization are not more likely than not to be realized, as a result of attribute reduction, statutory limitations on utilization, and lack of future income at Old Cumulus.

The difference between the Company’s effective tax rate and the statutory rate of 21% during the ~~attribute carryforward period or expectations around future events or earnings change, these~~Successor Period is attributable to statutory state and local income taxes, the tax effect of certain statutory non-deductible expenses, changes in valuation allowance, and the tax effect of certain changes in uncertain tax positions.

We use the liability method of accounting for deferred income taxes. Except for goodwill, deferred income taxes are recognized for all temporary differences between the tax and financial reporting bases of our assets and liabilities based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded against a deferred tax asset to adjust the asset to its net realizable value when it is not more likely than not that the benefits of its recovery will be recognized. We continually review the adequacy of our valuation allowance on our deferred tax assets ~~may require~~and recognize the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740, Income Taxes ("ASC 740").

Adjusted EBITDA

As a result of the factors described above, Adjusted EBITDA for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 ~~increased 12.7% or $18.9 million to $167.9 million from $149.0 million for the nine months ended September 30, 2016.~~increased. For a discussion of Adjusted EBITDA by segment and a comparison ~~between~~by segment of the ~~nine~~Successor Period and 2018 Predecessor Period to the Predecessor Company six months ended ~~September~~June 30, 2017, ~~and the three months ended September 30, 2016,~~ see the discussion under "Segment Results of Operations."

Reconciliation of Non-GAAP Financial Measure

The following table reconciles Adjusted EBITDA to net income (loss) ~~income, the~~(the most directly comparable financial measure calculated and presented in accordance with ~~GAAP,~~GAAP) as presented in the accompanying ~~unaudited~~ consolidated statements of operations (dollars in thousands):

Nine Months Ended September 30,
% Change
Nine Months
Ended
2017 2016
GAAP net (loss) income $ (449 ) $ 32,958
(101.4 )%
Income tax expense 6,465
24,904
(74.0 )%
Non-operating expenses, net - including interest expense 103,700
101,934
1.7 %
Local marketing agreement fees 8,137
10,351
(21.4 )%
Depreciation and amortization 47,610
68,023
(30.0 )%
Stock-based compensation expense 1,422
2,403
(40.8 )%
Gain on sale of assets or stations (2,585 ) (97,155 ) 97.3 %
Impairment of intangible assets and goodwill —
1,816
**
Loss on early extinguishment of debt 1,063
—
**
Acquisition-related and restructuring costs 2,116
3,237
(34.6 )%
Franchise and state taxes 420
527
(20.3 )%
Adjusted EBITDA $ 167,899
$ 148,998
12.7 %

** Calculation is not meaningful



	Successor Company		Predecessor Company
	Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018			Six Months Ended June 30, 2017
GAAP net income (loss)	$	4,980	$	696,156		$	(1,723	)
Income tax expense (benefit)	2,606		(176,859		)	1,208
Non-operating expenses, including net interest expense	6,152		483			68,363
Local marketing agreement fees	358		1,809			5,420
Depreciation and amortization	4,379		22,046			32,402
Stock-based compensation expense	652		231			1,068
Loss (gain) on sale of assets or stations	—		158			(2,502		)
Reorganization items, net	—		(466,201		)	—
Acquisition-related and restructuring costs	6,941		2,455			1,618
Franchise and state taxes	47		234			279
Adjusted EBITDA	$	26,115	$	80,512		$	106,133

Segment Results of Operations

The Company operates in two reportable segments for which there is discrete financial information available and whose operating results are reviewed by the chief operating decision maker. Radio Station Group revenue is derived primarily from the sale of broadcasting time to local, regional, and national advertisers. Westwood One revenue is generated primarily through network advertising. Corporate includes overall executive, administrative and support functions for both of our reportable segments, including programming, finance, legal, human resources and information technology functions.

~~As described above, the Company presents Adjusted EBITDA as the financial metric utilized by management to analyze the performance of each of our reportable segments.~~ The reconciliation of segment Adjusted EBITDA to net income (loss) is presented in Note ~~12,~~15, "Segment Data" of the notes to the ~~condensed consolidated financial statements.~~accompanying unaudited Condensed Consolidated Financial Statements.

The Company’s financial data by segment is presented in the tables below:



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	68,357	$	26,356	$	291	$	95,004

Three Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 202,852
$ 83,778
$ 610
$ 287,240
% of total revenue 70.6 % 29.2 % 0.2 % 100.0 %
$ change from three months ended September 30, 2016 $ (3,347 ) $ 4,365
$ 86
$ 1,104
% change from three months ended September 30, 2016 (1.6 )% 5.5 % 16.4 % 0.4 %



	Period from April 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	135,093	$	54,924	$	228	$	190,245


	Three Months Ended September 30, 2016												Three Months Ended June 30, 2017 (Predecessor Company)
	Radio Station Group			Westwood One			Corporate and Other			Consolidated			Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	206,199		$	79,413		$	524		$	286,136		$	208,596		$	81,234		$	701		$	290,531
% of total revenue	72.1		%	27.8		%	0.1		%	100.0		%	71.8		%	28.0		%	0.2		%	100.0		%

Net revenue for the Successor Period and the Second Quarter 2018 Predecessor Period compared to the Predecessor Company three months ended ~~September~~June 30, 2017 ~~increased $1.1 million, or 0.4%,~~decreased. The decrease resulted primarily from a decline in revenues at the Cumulus Radio Station Group, while Westwood One and Corporate and Other revenue were flat in comparison to ~~$287.2 million, compared to $286.1 million for~~ the three months ended ~~September~~June 30, ~~2016.~~2017. The ~~increase resulted~~decrease in revenue at the Cumulus Radio Station Group was primarily driven by decreases in local advertising revenue and the loss of revenue from ~~an increase~~WLUP. Revenue at Westwood One was negatively impacted by the loss of ~~$4.4~~approximately $0.7 million in revenue related to USTN in the Successor Period.



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	20,860	$	7,690	$	(2,435	)	$	26,115



	Period from April 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	39,824	$	6,554	$	(6,137	)	$	40,241



	Three Months Ended June 30, 2017 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	59,870	$	16,942	$	(9,412	)	$	67,400

Adjusted EBITDA for the Successor Period and the 2018 Second Quarter Predecessor Period compared to the Predecessor Company three months ended June 30, 2017 decreased. Adjusted EBITDA decreased at Westwood One partially offset by ~~a decrease of $3.3 million~~increases at the Radio Station Group, while Corporate and Other was flat in comparison to the 2016 period. The increase at Westwood One was primarily caused by an increase in network advertising sales, partially offset by decreases in other revenues. The decrease at the Radio Station Group was a result of a decline of local advertising and political revenue.

Three Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
Adjusted EBITDA $ 54,660
$ 17,082
$ (9,977 ) $ 61,765
$ change from three months September 30, 2016 $ (1,577 ) $ 19,771
$ (313 ) $ 17,881
% change from three months ended September 30, 2016 (2.8 )% **
(3.2 )% 40.7 %

Three Months Ended September 30, 2016
Radio Station Group Westwood One Corporate and Other Consolidated
Adjusted EBITDA $ 56,237
$ (2,689 ) $ (9,664 ) $ 43,884

Adjusted EBITDA for the three months ended September 30, 2017 increased $17.9 million, or 40.7%, to $61.8 million from $43.9 million for the three months ended September 30, 2016. Adjusted EBITDA increased $19.8 million at Westwood One partially offset by a decreases of $1.6 million and $0.3 million within theCumulus Radio Station Group and Corporate and Other segments, respectively. ~~The increase in~~ Adjusted EBITDA at Westwood One ~~was~~decreased primarily ~~caused by~~as a ~~$4.4~~result of $4.8 million ~~increase~~ in bad debt expense and lost revenue and a decrease in expenses of $14.4 million at Westwood One related to payments to CBS during the third quarter of 2016, to resolve previously disputed syndicated programming and network inventory expenses, partially offset by increases in expenses related to the higher revenue. The decrease inassociated with USTN. Adjusted EBITDA at the Cumulus Radio ~~Station~~ Group ~~was caused by~~and Corporate and Other increased as a ~~decrease in revenue, which was partially offset by a decrease in content and personnel~~result of lower expenses.

Nine Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 585,050
$ 254,867
$ 1,884
$ 841,801
% of total revenue 69.5 % 30.3 % 0.2 % 100.0 %
$ change from nine months ended September 30, 2016 $ (7,590 ) $ 7,360
$ 172
$ (58 )
% change from nine months ended September 30, 2016 (1.3 )% 3.0 % 10.0 % — %



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	68,357	$	26,356	$	291	$	95,004

Nine Months Ended September 30, 2016
Radio Station Group Westwood One Corporate and Other Consolidated
Net revenue $ 592,640
$ 247,507
$ 1,712
$ 841,859
% of total revenue 70.4 % 29.4 % 0.2 % 100.0 %



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	303,317	$	149,715	$	892	$	453,924



	Six months ended June 30, 2017 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	382,197		$	171,090		$	1,274		$	554,561
% of total revenue	68.9		%	30.9		%	0.2		%	100.0		%

Net revenue for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 ~~decreased $0.1 million, to $841.8 million, compared to $841.9 million for the nine months ended September 30, 2016.~~decreased. The decrease ~~was~~resulted from a ~~result of a $7.6 million revenue~~ decline in revenues at the Cumulus Radio Station Group, partially offset by ~~a $7.4 million revenue~~an increase at Westwood One, ~~and a $0.2 million revenue increase in~~while Corporate and Other ~~revenue. Declines~~revenue was flat. The decrease in revenue at the Cumulus Radio Station Group was primarily driven by decreases in local advertising ~~revenue and political advertising revenue were partially offset by an~~revenue. The increase in ~~digital~~ revenue ~~at the Radio Station Group. The increase~~ at Westwood One was primarily ~~caused~~driven by ~~an increase~~increases in ~~network advertising sales, partially offset by decreases in other revenues.~~broadcast and digital revenue.



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	20,860	$	7,690	$	(2,435	)	$	26,115



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	76,009	$	19,210	$	(14,707	)	$	80,512

Nine Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
Adjusted EBITDA $ 153,571
$ 42,993
$ (28,665 ) $ 167,899
$ change from nine months ended September 30, 2016 $ (5,707 ) $ 24,995
$ (387 ) $ 18,901
% change from nine months ended September 30, 2016 (3.6 )% **
(1.4 )% 12.7 %

Nine Months Ended September 30, 2016
Radio Station Group Westwood One Corporate and Other Consolidated
Adjusted EBITDA $ 159,278
$ 17,998
$ (28,278 ) $ 148,998



	Six Months Ended June 30, 2017 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	98,911	$	25,911	$	(18,689	)	$	106,133

Adjusted EBITDA for the ~~nine~~Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended ~~September~~June 30, 2017 ~~increased $18.9 million, or 12.7%, to $167.9 million from $149.0 million for the nine months ended September 30, 2016.~~increased. Adjusted EBITDA increased at Westwood One ~~increased by $25.0 million,~~and Corporate and Other segments, respectively, partially offset by ~~decreases of $5.7 million~~a decrease at the Cumulus Radio Station ~~Group and $0.4 million at Corporate and Other.~~Group. Adjusted EBITDA at Westwood One increased as a result of ~~$7.4 million of~~ increased revenues and ~~a $14.4 million decrease in expenses at Westwood One related to payments to CBS during the third quarter of 2016, to resolve previously disputed syndicated programming and network inventory~~certain lower content expenses, partially offset by the $4.8 million in bad debt expense and lost revenue related to USTN and increases in expenses related to the higher revenue. Adjusted EBITDA at the Cumulus Radio Station Group decreased as a result of a ~~$7.6 million~~ decline in revenue which was partially offset by lower ~~expenses, including as a result of a $3.2 million expense in the second quarter of 2016 related to a one-time correction to music licensing fees and a decrease in content and personnel~~ expenses.

The following tables reconcile segment net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to segment Adjusted EBITDA for the ~~three and nine months ended September 30, 2017 and 2016~~periods presented above (dollars in thousands):

Three Months Ended September 30, 2017
Radio Station Group Westwood One Corporate and Other Consolidated
GAAP net income (loss) $ 42,702
$ 11,107
$ (52,535 ) $ 1,274
Income tax expense —
—
5,257
5,257
Non-operating (income) expense, including net interest expense (1 ) 132
35,205
35,336
LMA fees 2,717
—
—
2,717
Depreciation and amortization 9,349
5,443
416
15,208
Stock-based compensation expense —
—
354
354
(Gain) loss on sale of assets or stations (107 ) —
24
(83 )
Loss on early extinguishment of debt —
—
1,063
1,063
Acquisition-related and restructuring costs —
400
99
499
Franchise and state taxes —
—
140
140
Adjusted EBITDA $ 54,660
$ 17,082
$ (9,977 ) $ 61,765


	Three Months Ended September 30, 2016												Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Radio Station Group			Westwood One			Corporate and Other			Consolidated			Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
GAAP net income (loss)	$	134,119		$	(10,874	)	$	(76,924	)	$	46,321		$	18,327		$	5,796		$	(19,143	)	$	4,980
Income tax expense	—			—			32,788			32,788			—			—			2,606			2,606
Non-operating (income) expense, including net interest expense	(2		)	59			33,851			33,908			(4		)	47			6,109			6,152
Local marketing agreement fees	2,481			—			—			2,481			358			—			—			358
Depreciation and amortization	13,653			7,782			522			21,957			2,179			1,949			251			4,379
Stock-based compensation expense	—			—			735			735			—			—			652			652
Gain on sale of assets or stations	(94,014		)	—			—			(94,014		)
Acquisition-related and restructuring costs	—			344			(794		)	(450		)	—			(102		)	7,043			6,941
Franchise and state taxes	—			—			158			158			—			—			47			47
Adjusted EBITDA	$	56,237		$	(2,689	)	$	(9,664	)	$	43,884		$	20,860		$	7,690		$	(2,435	)	$	26,115


	Nine Months Ended September 30, 2017											Period from April 1, 2018 through June 3, 2018 (Predecessor Company)
	Radio Station Group			Westwood One		Corporate and Other			Consolidated			Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
GAAP net income (loss)	$	118,043		$	24,348	$	(142,840	)	$	(449	)
Income tax expense	—			—		6,465			6,465
GAAP net (loss) income												$	(506,774	)	$	253,619		$	954,312		$	701,157
Income tax benefit												—			—			(176,741		)	(176,741		)
Non-operating (income) expense, including net interest expense	(4		)	407		103,297			103,700			(1		)	77			311			387
LMA fees	8,137			—		—			8,137
Local marketing agreement fees												702			—			—			702
Depreciation and amortization	30,004			16,346		1,260			47,610			4,111			4,488			1,466			10,065
Stock-based compensation expense	—			—		1,422			1,422			—			—			65			65
(Gain) loss on sale of assets or stations	(2,609		)	—		24			(2,585		)
Loss on early extinguishment of debt	—			—		1,063			1,063
Loss on sale or disposal of assets or stations												3			—			144			147
Reorganization items, net												541,903			(251,669		)	(786,602		)	(496,368		)
Acquisition-related and restructuring costs	—			1,892		224			2,116			(120		)	39			815			734
Franchise and state taxes	—			—		420			420			—			—			93			93
Adjusted EBITDA	$	153,571		$	42,993	$	(28,665	)	$	167,899		$	39,824		$	6,554		$	(6,137	)	$	40,241


	Nine Months Ended September 30, 2016												Three Months Ended June 30, 2017 (Predecessor Company)
	Radio Station Group			Westwood One			Corporate and Other			Consolidated			Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated
GAAP net income (loss)	$	205,263		$	(12,872	)	$	(159,433	)	$	32,958		$	46,803		$	10,976	$	(52,107	)	$	5,672
Income tax expense	—			—			24,904			24,904			—			—		7,234			7,234
Non-operating expense, including net interest expense	14			226			101,694			101,934
Non-operating (income) expense, including net interest expense													(1		)	133		34,288			34,420
Local marketing agreement fees	10,351			—			—			10,351			2,713			—		—			2,713
Depreciation and amortization	40,780			25,657			1,586			68,023			10,251			5,449		420			16,120
Stock-based compensation expense	—			—			2,403			2,403			—			—		530			530
Gain on sale of assets or stations	(97,130		)	—			(25		)	(97,155		)
Impairment of intangible assets	—			1,816			—			1,816
Gain on sale or disposal of assets or stations													104			—		—			104
Acquisition-related and restructuring costs	—			3,171			66			3,237			—			384		83			467
Franchise and state taxes	—						527			527			—			—		140			140
Adjusted EBITDA	$	159,278		$	17,998		$	(28,278	)	$	148,998		$	59,870		$	16,942	$	(9,412	)	$	67,400



	Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
GAAP net income (loss)	$	18,327		$	5,796		$	(19,143	)	$	4,980
Income tax expense	—			—			2,606			2,606
Non-operating (income) expense, including net interest expense	(4		)	47			6,109			6,152
Local marketing agreement fees	358			—			—			358
Depreciation and amortization	2,179			1,949			251			4,379
Stock-based compensation expense	—			—			652			652
Acquisition-related and restructuring costs	—			(102		)	7,043			6,941
Franchise and state taxes	—			—			47			47
Adjusted EBITDA	$	20,860		$	7,690		$	(2,435	)	$	26,115



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group				Westwood One			Corporate and Other			Consolidated
GAAP net (loss) income	$	(477,966	)		$	259,441		$	914,681		$	696,156
Income tax benefit	—				—			(176,859		)	(176,859		)
Non-operating (income) expense, including net interest expense	(2		)		204			281			483
Local marketing agreement fees	1,809				—			—			1,809
Depreciation and amortization	10,251			—	9,965			1,830			22,046
Stock-based compensation expense	—				—			231			231
Loss on sale or disposal of assets or stations	14				—			144			158
Reorganization items, net	541,903				(251,487		)	(756,617		)	(466,201		)
Acquisition-related and restructuring costs	—				1,087			1,368			2,455
Franchise and state taxes	—				—			234			234
Adjusted EBITDA	$	76,009			$	19,210		$	(14,707	)	$	80,512



	Six Months Ended June 30, 2017 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated
GAAP net income (loss)	$	75,341		$	13,241	$	(90,305	)	$	(1,723	)
Income tax expense	—			—		1,208			1,208
Non-operating (income) expense, including net interest expense	(3		)	275		68,091			68,363
Local marketing agreement fees	5,420			—		—			5,420
Depreciation and amortization	20,655			10,903		844			32,402
Stock-based compensation expense	—			—		1,068			1,068
Gain on sale of assets or stations	(2,502		)	—		—			(2,502		)
Acquisition-related and restructuring costs	—			1,492		126			1,618
Franchise and state taxes	—			—		279			279
Adjusted EBITDA	$	98,911		$	25,911	$	(18,689	)	$	106,133

Liquidity and Capital Resources

As described above, on the Effective Date, the Company and certain of its subsidiaries entered into the Credit Agreement. Pursuant to the Credit Agreement, the lenders party thereto were deemed to have provided the Company with a $1.3 billion senior secured Term Loan.

Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to (i) the Alternative Base Rate (as defined below) plus an applicable margin of 3.50%, subject to an Alternative Base Rate floor of 2.00%, or (ii) LIBOR plus an applicable margin of 4.50%, subject to a LIBOR floor of 1.00%. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. At June 30, 2018, the Term Loan bore interest at 6.6% per annum.

The Credit Agreement does not contain any financial maintenance covenants.

On August 17, 2018, Holdings entered into a $50.0 million revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement (the “Revolving Credit Agreement”), dated as of August 17, 2018, with certain subsidiaries of Holdings, as borrowers, certain lenders, Intermediate Holdings, as a guarantor, and Deutsche Bank AG New York Branch, as a lender and Administrative Agent.

The Revolving Credit Facility matures on August 17, 2023. Availability under the Revolving Credit Facility is tied to a borrowing base formula that is based on 85% of the accounts receivable of the borrowers and the guarantors, subject to customary reserves and eligibility criteria. Under the Revolving Credit Facility, up to $10.0 million of availability may be drawn in the form of letters of credit.

Borrowings under the Revolving Credit Facility bear interest, at the option of Holdings, based on LIBOR plus a percentage spread (ranging from 1.25% to 1.75%) based on the average daily excess availability under the Revolving Credit Facility or the Alternative Base Rate (as defined below) plus a percentage spread (ranging from 0.25% to 0.75%) based on the average daily excess availability under the Revolving Credit Facility. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the federal funds rate plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. In addition, the unused portion of the Revolving Credit Facility will be subject to a commitment fee ranging from 0.250% to 0.375% based on the utilization of the facility. As of August 20, 2018, no amounts were outstanding under the Revolving Credit Facility.

The Revolving Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature. Events of default in the Revolving Credit Agreement include, among others: (a) the failure to pay when due the obligations owing thereunder; (b) the failure to perform (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against Holdings or any of its subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use, any one or more of, any material Federal Communications Commission licenses; (g) any representation or warranty made, or report, certificate or financial statement delivered, to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in Credit Agreement). Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Revolving Credit Agreement and the ancillary loan documents as a secured party.

For additional information on our liquidity considerations, see "Emergence from Chapter 11; Liquidity and Going Concern Considerations" above.

Cash Flows (Used in) Provided by Operating Activities


					Successor Company			Predecessor Company
					Period from June 4, 2018 through June 30, 2018			Period from January 1, 2018 through June 3, 2018		Six Months Ended June 30, 2017
	Nine Months Ended September 30,
(Dollars in thousands)	2017		2016
Net cash provided by operating activities	$	34,125	$	32,279
Net cash (used in) provided by operating activities					$	(1,712	)	$	29,132	$	16,940

~~For the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, net~~

Net cash provided by operating activities ~~increased $1.8 million. The increase was primarily driven by increases related~~in the Successor Period and the 2018 Predecessor Period compared to the ~~timing~~six months ended June 30, 2017 increased as a result of ~~our cash collections and payments of prepaid expenses, such as restructuring related costs,~~increased profitability partially offset by a decrease in ~~net income.~~

cash collections because of timing.

Cash Flows ~~(Used in) Provided by~~Used in Investing Activities


						Successor Company			Predecessor Company
						Period from June 4, 2018 through June 30, 2018			Period from January 1, 2018 through June 3, 2018			Six Months Ended June 30, 2017
	Nine Months Ended September 30,
(Dollars in thousands)	2017			2016
Net cash (used in) provided by investing activities	$	(14,210	)	$	93,662
Net cash used in investing activities						$	(19,969	)	$	(14,019	)	$	(7,113	)

~~Cash flows (used in) provided by~~During the Successor Period and the 2018 Predecessor Period, net cash used in investing activities ~~decreased for~~consisted of cash used to complete the ~~nine~~Company’s $18.0 million acquisition of WKQX from Merlin, in addition to approximately $16.0 million in capital expenditures. For additional detail about the acquisition of WKQX from Merlin, see Note 14, "Commitments and Contingencies" of the notes to the accompanying Condensed Consolidated Financial Statements.

During the six months ended ~~September~~June 30, 2017, ~~compared to~~cash used in the ~~nine months ended September 30, 2016. For the nine months ended September 30, 2017~~Company’s investing activities consisted of $13.2 million of capital expenditures, ~~totaled $20.6 million primarily related to expenditures on equipment for transmission, facilities, studios, vehicles and other routine expenditures and~~which were offset ~~partially~~ by ~~approximately~~cash proceeds of $6.1 million ~~of proceeds~~ from the sale of land in our Salt Lake City, Utah market. Capital expenditures for the nine months ended September 30, 2016 totaled $16.7 million primarily related to investments in a new office and studio facility in our Chicago market and ongoing maintenance and other routine expenditures. Investing activities for the nine months ended September 30, 2016 also included $106.9 million in proceeds from our sale of certain land and buildings in our Los Angeles market and $3.4 million in a reduction of restricted cash.

Cash Flows ~~(Used in) Provided by~~Used In Financing Activities


						Successor Company		Predecessor Company
						Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018		Six Months Ended June 30, 2017
	Nine Months Ended September 30,
(Dollars in thousands)	2017			2016
Net cash (used in) provided by financing activities	$	(81,743	)	$	3
Net cash used in financing activities						$	—	$	38,652	$	(94	)

~~For~~During the ~~nine months ended September 30, 2017 compared~~Successor Period and the 2018 Predecessor Period the Company made $37.8 million in adequate protection payments on the Predecessor Term Loan in lieu of interest payments and was recorded as a reduction to the ~~nine months ended September 30, 2016, net cash (used in) provided by financing activities decreased $81.7 million primarily because~~principal balance of ~~a $81.7~~the Predecessor Term Loan. We also incurred approximately $0.9 million in ~~repayments on borrowings on our Term Loan.~~

~~For additional detail regarding the Company’s material liquidity considerations, see “Liquidity Considerations”.~~deferred financing costs.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~There have been no material changes to our market risks from those disclosed in Part II, Item 7A~~

Interest Rate Risk

As of June 30, 2018, all $1.3 billion of our ~~Annual Report~~long-term debt bore interest at a variable rate. Accordingly, our earnings and after-tax cash flow are subject to change based on ~~Form 10-K for~~changes in interest rates and could be materially affected, depending on the ~~year ended December 31, 2016 (the “2016 Annual Report”).~~timing and amount of any interest rate changes. Assuming the current level of borrowings outstanding at June 30, 2018 at variable interest rates and assuming a one percentage point increase (decrease) in the current rate, it is estimated on an annual basis interest expense would increase (decrease) and net income would decrease (increase) by $13.0 million.

Item 4. Controls and Procedures

We maintain a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, the “Exchange Act”) designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Such disclosure controls and procedures are designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is accumulated and communicated to our management, including, our President and Chief Executive Officer (“CEO”) and Executive Vice President and Chief Financial Officer (“CFO”), the principal executive and principal financial officers, respectively, as appropriate, to allow timely decisions regarding required disclosure. At the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~September~~June 30, ~~2017.~~2018.

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) during the ~~quarter~~three months ended ~~September~~June 30, ~~2017~~2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In August 2015, ~~we were~~the Company was named as a defendant in two separate putative class action lawsuits relating to ~~our~~its use and public performance of certain sound recordings fixed prior to February 15, 1972 (the "Pre-1972 Recordings"). The first suit, ABS Entertainment, Inc., et. al. v, Cumulus Media Inc., was filed in the United States District Court for the Central District of California and alleged, among other things, copyright infringement under California state law, common law conversion, misappropriation and unfair business practices. On December 11, 2015, this suit was dismissed without prejudice. The second suit, ABS Entertainment, Inc., v. Cumulus Media Inc., was filed in the United States District Court for the Southern District of New York and claimed, among other things, common law copyright infringement and unfair competition. The New York lawsuit was stayed pending an appeal before the Second Circuit involving unrelated third parties over whether the owner of a Pre-1972 Recording holds an exclusive right to publicly perform that recording under New York common law. On December 20, 2016, the New York Court of Appeals held that New York common law does not recognize a right of public performance for owners of pre-1972 Recordings. As a result of that case (to which Cumulus Media Inc., was not a party) the New York case against Cumulus Media Inc., was voluntarily dismissed by the plaintiffs on April 3, 2017. The question of whether public performance rights exist for Pre-1972 recordings under state ~~laws~~law is still being litigated in the Ninth ~~and Eleventh Circuits~~Circuit as a

result of ~~cases~~a case filed in ~~California and Florida.~~California. Cumulus is not a party to ~~those cases,~~that case, and the Company is not yet able to determine what effect ~~those proceedings~~that proceeding will have, if any, on its financial position, results of operations or cash flows.

Item 1A. Risk Factors

Please refer to Part I, Item 1A, “Risk Factors,” in our ~~2016~~2017 Annual Report ~~and Part II, Item 1A, "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017,~~ for information regarding known material risks that could affect our results of operations, financial condition and liquidity. Except ~~as described below,~~with respect to the effectiveness of the Plan and our emergence from bankruptcy, these known risks have not changed materially. In addition to these risks, other risks that we presently do not consider material, or other unknown risks, could materially adversely impact our business, financial condition and results of operations in future periods.

~~We are engaged in discussions with our lenders and the holders of our 7.75% Senior Notes regarding restructuring~~

or refinancing our debt obligations. In connection with the restructuring or refinancing of those obligations, we may seek to effectuate a restructuring under the protection of Chapter 11 of the U.S. Bankruptcy Code. Any such action could result in a significant or complete loss of value to the holders of our common stock.

As previously disclosed, the Company, with the assistance of outside advisors, is in private discussions with its lenders and the holders of our 7.75% Senior Notes to proactively restructure its balance sheet and reduce its debt. In connection with the Company’s ongoing discussions with creditors, on October 30, 2017, the Restructuring Committee of the Board of Directors authorized the Company to forgo the scheduled interest payment on the 7.75% Senior Notes which was due on November 1, 2017, thereby entering into the applicable 30-day grace period under the terms of the indenture governing such notes. This nonpayment constitutes a “default” under the terms of the indenture governing the 7.75% Senior Notes, which matures into an “Event of Default” if such “default” is not cured or waived before the expiration of the 30-day grace period on December 1, 2017. Upon the occurrence of an Event of Default, the trustee under the indenture governing the 7.75% Senior Notes, or the holders of a specified percentage of 7.75% Senior Notes, may declare all outstanding amounts immediately due and payable. Such an Event of Default would also constitute an event of default under the Credit Agreement, which would give the lenders thereunder the right to declare all amounts outstanding under the Credit Agreement to be immediately due and payable.

In the event we are not able to satisfactorily restructure or refinance our debt obligations out of court, or the lenders under our Senior Credit Agreement, or the trustee or the holders of our 7.75% Senior Notes, accelerate the amounts due thereunder, we may seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. Any such action could result in a significant or complete loss of value to the holders of our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On May 21, 2008, our Board of Directors authorized the purchase, from time to time, of up to $75.0 million of our Class A common stock, subject to the terms and limitations obtained in any applicable agreements and compliance with other applicable legal requirements. During the three months ended ~~September~~June 30, ~~2017,~~2018, we did not repurchase any shares of our Class A common stock.

Item 5. Other Information

The information contained in Note 16, "Subsequent Events" of the notes to the Condensed Consolidated Financial Statements, is incorporated by reference herein.

Item 6.Exhibits



2.1		First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

3.1		Amended and Restated Certificate of Incorporation of Cumulus Media Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

3.2		Amended and Restated Bylaws of Cumulus Media Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

4.1		Form of Global Warrant Certificate (incorporated by reference to Exhibit A-2 to Exhibit 10.2 hereto)

10.1		Form of Credit Agreement dated as of June 4, 2018, among Holdings, as borrower, the subsidiaries of Holdings party thereto as borrowers, Intermediate Holdings as guarantor, Wilmington Trust, National Association, as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.2		Warrant Agreement, dated as of June 4, 2018, among the Company, Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.3		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.4		Cumulus Media Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.5		Form of Restricted Stock Unit Agreement (Non-Senior Executive) (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.6		Form of Restricted Stock Unit Agreement (Senior Executive) (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.7		Form of Restricted Stock Unit Agreement (Director) (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.8		Form of Stock Option Agreement (Non-Senior Executive) (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.9		Form of Stock Option Agreement (Senior Executive) (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.10		Form of Stock Option Agreement (Director) (incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

10.11		Credit Agreement, dated as of August 17, 2018, among certain subsidiaries of Cumulus Media New Holdings Inc., as borrowers, certain lenders, Cumulus Media Intermediate Inc., as a guarantor, and Deutsche Bank AG New York Branch, as a lender and Administrative Agent.

99.1		Findings of Fact, Conclusions of Law, and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 4, 2018)

31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	CUMULUS MEDIA INC.

~~Date: November 9, 2017~~August 20, 2018	By:	/s/ John Abbot
		John Abbot
		Executive Vice President, Treasurer and Chief Financial Officer

~~EXHIBIT INDEX~~



~~31.1~~		~~Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~31.2~~		~~Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~32.1~~		~~Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.INS~~		~~XBRL Instance Document.~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document.~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~

~~101.LAB~~		~~XBRL Taxonomy Extension Labels Linkbase Document.~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

5265



	Cumulus Media Inc. (Parent Guarantor)			Cumulus Media Holdings Inc. (Subsidiary Issuer)			Subsidiary Guarantors			Subsidiary Non-guarantors			Eliminations		Total Consolidated
Net revenue	$	—		$	—		$	287,240		$	—		$	—	$	287,240
Operating expenses:
Content costs	—			—			96,321			—			—		96,321
Selling, general and administrative expenses	—			—			118,758			535			—		119,293
Depreciation and amortization	—			298			14,910			—			—		15,208
Local marketing agreement fees	—			—			2,717			—			—		2,717
Corporate expenses (including stock-based compensation expense of $354)	—			10,853			—			—			—		10,853
Gain on sale of assets or stations	—			—			(83		)	—			—		(83		)
Total operating expenses	—			11,151			232,623			535			—		244,309
Operating (loss) income	—			(11,151		)	54,617			(535		)	—		42,931
Non-operating (expense) income:
Interest (expense) income, net	(2,184		)	(33,089		)	34			(62		)	—		(35,301		)
Loss on early extinguishment of debt	—			(1,063		)	—			—			—		(1,063		)
Other expense, net	—			—			(36		)	—			—		(36		)
Total non-operating expense, net	(2,184		)	(34,152		)	(2		)	(62		)	—		(36,400		)
(Loss) income before income taxes	(2,184		)	(45,303		)	54,615			(597		)	—		6,531
Income tax (expense) benefit	8,782			176,495			(193,046		)	2,512			—		(5,257		)
Earnings (loss) from consolidated subsidiaries	(5,324		)	(136,516		)	1,915			—			139,925		—
Net income (loss)	$	1,274		$	(5,324	)	$	(136,516	)	$	1,915		$	139,925	$	1,274



	Cumulus Media Inc. (Parent Guarantor)			Cumulus Media Holdings Inc. (Subsidiary Issuer)			Subsidiary Guarantors			Subsidiary Non-guarantors			Eliminations			Total Consolidated
Net revenue	$	—		$	—		$	286,136		$	—		$	—		$	286,136
Operating expenses:
Content costs	—			—			115,348			—			—			115,348
Selling, general and administrative expenses	—			—			116,706			681			—			117,387
Depreciation and amortization	—			400			21,557			—			—			21,957
Local marketing agreement fees	—			—			2,481			—			—			2,481
Corporate expenses (including stock-based compensation expense of $735)	—			9,960			—			—			—			9,960
Gain on sale of assets or stations	—			—			(94,014		)	—			—			(94,014		)
Total operating expenses	—			10,360			162,078			681			—			173,119
Operating (loss) income	—			(10,360		)	124,058			(681		)	—			113,017
Non-operating (expense) income:
Interest (expense) income, net	(2,178		)	(32,704		)	139			(47		)	—			(34,790		)
Other income, net	—			—			882			—			—			882
Total non-operating (expense) income, net	(2,178		)	(32,704		)	1,021			(47		)	—			(33,908		)
(Loss) income before income taxes	(2,178		)	(43,064		)	125,079			(728		)	—			79,109
Income tax benefit (expense)	937			19,816			(53,834		)	293			—			(32,788		)
Earnings (loss) from consolidated subsidiaries	47,562			70,810			(435		)	—			(117,937		)	—
Net income (loss)	$	46,321		$	47,562		$	70,810		$	(435	)	$	(117,937	)	$	46,321



	Cumulus Media Inc. (Parent Guarantor)			Cumulus Media Holdings Inc. (Subsidiary Issuer)			Subsidiary Guarantors			Subsidiary Non-guarantors			Eliminations			Total Consolidated
Cash flows from operating activities:
Net (loss) income	$	(449	)	$	(938	)	$	(10,731	)	$	141		$	11,528		$	(449	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	—			902			46,708			—			—			47,610
Amortization of debt issuance costs/discounts	—			7,490			—			171			—			7,661
Provision for doubtful accounts	—			—			4,770			—			—			4,770
Gain on sale of assets or stations	—			—			(2,585		)	—			—			(2,585		)
Deferred income taxes	(7,040		)	(141,059		)	156,598			(2,036		)	—			6,463
Stock-based compensation expense	—			1,422			—			—			—			1,422
Loss on early extinguishment of debt	—			1,063			—			—			—			1,063
(Earnings) loss from consolidated subsidiaries	938			10,731			(141		)	—			(11,528		)	—
Changes in assets and liabilities	2,171			198,131			(233,856		)	1,724			—			(31,830		)
Net cash (used in) provided by operating activities	(4,380		)	77,742			(39,237		)	—			—			34,125
Cash flows from investing activities
Proceeds from sale of assets or stations	—			—			6,090			—			—			6,090
Restricted cash	—			345			—			—			—			345
Capital expenditures	—			(8,092		)	(12,553		)	—			—			(20,645		)
Net cash used in investing activities	—			(7,747		)	(6,463		)	—			—			(14,210		)
Cash flows from financing activities:
Intercompany transactions, net	4,380			(50,080		)	45,700			—			—			—
Repayments of borrowings under term loans and revolving credit facilities	—			(81,652		)	—			—			—			(81,652		)
Deferred financing costs	—			(91		)	—			—			—			(91		)
Net cash provided by (used in) financing activities	4,380			(131,823		)	45,700			—			—			(81,743		)
Decrease in cash and cash equivalents	—			(61,828		)	—			—			—			(61,828		)
Cash and cash equivalents at beginning of period	—			131,259			—			—			—			131,259
Cash and cash equivalents at end of period	$	—		$	69,431		$	—		$	—		$	—		$	69,431



	Cumulus Media Inc. (Parent Guarantor)			Cumulus Media Holdings Inc. (Subsidiary Issuer)			Subsidiary Guarantors			Subsidiary Non-guarantors			Eliminations			Total Consolidated
Cash flows from operating activities:
Net income (loss)	$	32,958		$	36,878		$	117,962		$	(1,195	)	$	(153,645	)	$	32,958
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	—			1,219			66,804			—			—			68,023
Amortization of debt issuance costs/discount	—			7,183			—			142			—			7,325
Provision for doubtful accounts	—			—			1,188			—			—			1,188
Gain on sale of assets or stations	—			—			(97,155		)	—			—			(97,155		)
Impairment of intangible assets and goodwill	—			—			1,816			—			—			1,816
Deferred income taxes	(2,613		)	(51,219		)	79,620			(702		)	—			25,086
Stock-based compensation expense	—			2,403			—			—			—			2,403
(Loss) earnings from consolidated subsidiaries	(36,878		)	(117,962		)	1,195			—			153,645			—
Changes in assets and liabilities	—			295,419			(306,539		)	1,755			—			(9,365		)
Net cash (used in) provided by operating activities	(6,533		)	173,921			(135,109		)	—			—			32,279
Cash flows from investing activities:
Proceeds from sale of assets or stations	—			—			106,935			—			—			106,935
Restricted cash	—			3,431			—			—			—			3,431
Capital expenditures	—			(868		)	(15,836		)	—			—			(16,704		)
Net cash provided by investing activities	—			2,563			91,099			—			—			93,662
Cash flows from financing activities:
Intercompany transactions, net	6,530			(50,540		)	44,010			—			—			—
Proceeds from exercise of warrants	3			—			—			—			—			3
Net cash provided by (used in) financing activities	6,533			(50,540		)	44,010			—			—			3
Increase in cash and cash equivalents	—			125,944			—			—			—			125,944
Cash and cash equivalents at beginning of period	—			31,657			—			—			—			31,657
Cash and cash equivalents at end of period	$	—		$	157,601		$	—		$	—		$	—		$	157,601



	Three Months Ended September 30, 2017
	Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	202,852	$	83,778	$	610	$	287,240

Large accelerated filer

Accelerated filer

Non-accelerated filer

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Smaller reporting company

Emerging growth company