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 June 30, ~~2018~~2019



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

For the transition period from to

Commission file number 000-24525

Cumulus Media Inc.

(Exact Name of Registrant as Specified in its Charter)



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

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

(404) 949-0700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Class A common stock, par value $0.0000001 per share	CMLS	Nasdaq Global Market
Title of each class	Trading Symbol(s)	Name of each exchange on which registered

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 “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 August ~~13, 2018,~~1, 2019, the registrant had ~~16,356,803~~17,029,502 outstanding shares of common stock consisting of: (i) ~~12,613,356~~14,352,052 shares of Class A common stock; (ii) ~~3,743,447~~2,677,450 shares of Class B common stock in addition to ~~2,989,093~~2,742,416 Series 1 warrants and ~~654,113~~375,885 Series 2 warrants.

CUMULUS MEDIA INC.

INDEX



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets as of June 30, ~~2018 (Successor)~~2019 and December 31, ~~2017 (Predecessor)~~2018	3
Condensed Consolidated Statements of Operations For the Three Months Ended June 30, 2019 (Successor Company), Period from June 4, 2018 through June 30, 2018 (Successor Company), and Period from April 1, 2018 through June 3, 2018 (Predecessor Company)	4
Condensed Consolidated Statements of Operations For the Six Months Ended June 30, 2019 (Successor Company), Period from June 4, 2018 through June 30, 2018 ~~(Successor)~~(Successor Company), ~~Period from April 1, 2018 through June 3, 2018 (Predecessor),~~and Period from January 1, 2018 through June 3, 2018 ~~(Predecessor),~~(Predecessor Company)	4
Condensed Consolidated Statement of Stockholders’ Equity For the Periods March 31, 2018 (Predecessor Company) through June 3, 2018 (Predecessor Company) and, June 4, 2018 (Successor Company) through June 30, 2018 (Successor Company)	6
Condensed Consolidated Statement of Stockholders’ Equity For the Periods December 31, 2017 (Predecessor Company) through June 3, 2018 (Predecessor Company) and, June 4, 2018 (Successor Company) through June 30, 2018 (Successor Company)	6
Condensed Consolidated Statement of Stockholders’ Equity For the Three and Six Months Ended June 30, ~~2017 (Predecessor)~~2019 (Successor Company)	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)~~	76
Condensed Consolidated Statements of Cash Flows ~~Period from~~For the Six Months Ended June 30, 2019 (Successor Company), and Periods From June 4, 2018 through June 30, 2018 ~~(Successor), Period from~~(Successor Company) and January 1, 2018 through June 3, 2018 ~~(Predecessor) and the Six Months Ended June 30, 2017 (Predecessor)~~(Predecessor Company)	89
Notes to Condensed Consolidated Financial Statements	911
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	4132
Item 3. Quantitative and Qualitative Disclosures About Market Risk	6249
Item 4. Controls and Procedures	6249
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	6249
Item 1A. Risk Factors	63
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~	63
~~Item 5. Other Information~~	6350
Item 6. Exhibits	6451

Signatures	6551

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			Successor Company
	June 30, 2018		December 31, 2017			June 30, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	37,444	$	102,891		$	20,500		$	27,584
Restricted cash	29,226		8,999			2,466			2,454
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
Accounts receivable, less allowance for doubtful accounts of $3,872 and $5,483 at June 30, 2019 and December 31, 2018, respectively						232,787			250,111
Trade receivable	5,195		4,224			4,975			3,390
Assets held for sale	80,000		—			123,453			80,000
Prepaid expenses and other current assets	30,163		42,259			30,685			31,452
Total current assets	413,793		393,620			414,866			394,991
Property and equipment, net	235,527		191,604			227,227			235,898
Operating lease right-of-use assets						148,493			—
Broadcast licenses	935,976		1,203,809			848,876			935,652
Other intangible assets, net	209,765		82,994			174,585			193,535
Goodwill	—		135,214
Other assets	18,173		20,078			12,301			15,076
Total assets	$	1,813,234	$	2,027,319		$	1,826,348		$	1,775,152
Liabilities and Stockholders’ Equity (Deficit)
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	112,836	$	36,157		$	97,804		$	101,320
Current portion of operating lease liabilities						34,172			—
Trade payable	3,267		—			2,578			2,578
Current portion of term loan	13,000		—			13,000			13,000
Total current liabilities	129,103		36,157			147,554			116,898
Term loan	1,287,000		—			590,738			1,230,299
6.75% senior notes, net of debt issuance costs of $7,332 at June 30, 2019						492,668			—
Operating lease liabilities						115,183			—
Other liabilities	24,098		54			25,797			25,742
Deferred income taxes	42,401		—			20,109			12,384
Total liabilities not subject to compromise	—		36,211
Liabilities subject to compromise	—		2,687,223
Total liabilities	1,482,602		2,723,434			1,392,049			1,385,323
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		)
Commitments and contingencies (Note 14)
Stockholders’ equity:
Class A common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 14,363,242 and 12,995,080 shares issued;14,328,538 and 12,995,080 shares outstanding at June 30, 2019 and December 31, 2018, respectively						—			—
Class B common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 2,696,853 and 3,560,604 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively						—			—
Treasury stock, at cost, 67,833 shares at June 30, 2019						(1,156		)	—
Additional paid-in-capital						330,718			328,404
Retained earnings						104,737			61,425
Total stockholders’ equity						434,299			389,829
Total liabilities and stockholders’ equity	$	1,813,234	$	2,027,319		$	1,826,348		$	1,775,152

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

CUMULUS MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)


	Successor Company			Predecessor Company						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,			Three Months Ended June 30,			Period from June 4, 2018 through June 30,			Period from April 1, 2018 through June 3,
	2018			2018			2017			2019			2018			2018
Net revenue	$	95,004		$	190,245		$	290,531		$	279,673		$	95,004		$	190,245
Operating expenses:
Content costs	27,685			59,117			93,289			93,844			28,970			61,019
Selling, general and administrative expenses	38,719			85,097			120,506			115,817			37,434			83,195
Depreciation and amortization	4,379			10,065			16,120			13,545			4,379			10,065
Local marketing agreement fees	358			702			2,713			438			358			702
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
Corporate expenses (including stock-based compensation expense of $1,106, $652 and $65, respectively, and restructuring costs of $13,024, $6,941 and $734 respectively)										22,675			10,125			6,682
(Gain) loss on sale or disposal of assets or stations										(47,750		)	—			147
Total operating expenses	81,266			161,810			243,205			198,569			81,266			161,810
Operating income	13,738			28,435			47,326			81,104			13,738			28,435
Non-operating (expense) income:
Reorganization items, net	—			496,368			—			—			—			496,368
Interest expense	(6,176		)	(132		)	(34,344		)	(21,191		)	(6,176		)	(132		)
Interest income	4			21			35			8			4			21
Other income (expense), net	20			(276		)	(111		)
Other (expense) income, net										(34		)	20			(276		)
Total non-operating (expense) income, net	(6,152		)	495,981			(34,420		)	(21,217		)	(6,152		)	495,981
Income before income tax (expense) benefit	7,586			524,416			12,906			59,887			7,586			524,416
Income tax (expense) benefit	(2,606		)	176,741			(7,234		)	(17,026		)	(2,606		)	176,741
Net income	$	4,980		$	701,157		$	5,672		$	42,861		$	4,980		$	701,157
Basic and diluted earnings per common share (see Note 13, “Earnings (loss) Per Share”):
Basic and diluted earnings per common share (see Note 12, “Earnings Per Share”):
Basic: Earnings per share	$	0.25		$	23.90		$	0.19		$	2.13		$	0.25		$	23.90
Diluted: Earnings per share	$	0.25		$	23.90		$	0.19		$	2.11		$	0.25		$	23.90
Weighted average basic common shares outstanding	20,004,736			29,338,329			29,306,374			20,125,419			20,004,736			29,338,329
Weighted average diluted common shares outstanding	20,300,025			29,338,329			29,306,374			20,317,328			20,300,025			29,338,329


	Successor Company			Predecessor Company						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,			Six Months Ended June 30,			Period from June 4, 2018 through June 30,			Period from January 1, 2018 through June 3,
	2018			2018			2017			2019			2018			2018
Net revenue	$	95,004		$	453,924		$	554,561		$	547,169		$	95,004		$	453,924
Operating expenses:
Content costs	27,685			159,681			195,069			197,596			28,970			163,885
Selling, general and administrative expenses	38,719			199,482			234,896			229,320			37,434			195,278
Depreciation and amortization	4,379			22,046			32,402			28,135			4,379			22,046
Local marketing agreement fees	358			1,809			5,420			1,481			358			1,809
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		)
Corporate expenses (including stock-based compensation expense of $2,314, $652 and $231, respectively and restructuring costs of $15,801, $6,941 and $2,455 respectively)										35,192			10,125			17,169
(Gain) loss on sale or disposal of assets or stations										(47,724		)	—			158
Total operating expenses	81,266			400,345			486,713			444,000			81,266			400,345
Operating income	13,738			53,579			67,848			103,169			13,738			53,579
Non-operating (expense) income:
Reorganization items, net	—			466,201			—			—			—			466,201
Interest expense	(6,176		)	(260		)	(68,407		)	(43,347		)	(6,176		)	(260		)
Interest income	4			50			72			12			4			50
Other income (expense), net	20			(273		)	(28		)
Gain on early extinguishment of debt										381			—			—
Other (expense) income, net										(62		)	20			(273		)
Total non-operating (expense) income, net	(6,152		)	465,718			(68,363		)	(43,016		)	(6,152		)	465,718
Income (loss) before income tax (expense) benefit	7,586			519,297			(515		)
Income before income tax (expense) benefit										60,153			7,586			519,297
Income tax (expense) benefit	(2,606		)	176,859			(1,208		)	(16,841		)	(2,606		)	176,859
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	)
Net income										$	43,312		$	4,980		$	696,156
Basic and diluted earnings per common share (see Note 12, “Earnings Per Share”):
Basic: Earnings per share										$	2.16		$	0.25		$	23.73
Diluted: Earnings per share										$	2.14		$	0.25		$	23.73
Weighted average basic common shares outstanding	20,004,736			29,338,329			29,306,374			20,091,568			20,004,736			29,338,329
Weighted average diluted common shares outstanding	20,300,025			29,338,329			29,306,374			20,268,393			20,300,025			29,338,329

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)

(Unaudited)


For Periods March 31, 2018 (Predecessor Company) through June 3, 2018 (Predecessor Company) and June 4, 2018 (Successor Company) through June 30, 2018 (Successor Company)																													For Periods March 31, 2018 (Predecessor Company) through June 3, 2018 (Predecessor Company) and June 4, 2018 (Successor Company) through June 30, 2018 (Successor Company)
	Class A Common Stock					Class B Common Stock				Class C Common Stock					Treasury Stock														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			Number of Shares		Par Value			Number of Shares		Par Value		Number of Shares		Par Value			Number of Shares		Value			Additional Paid-In Capital			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	)
Balance at March 31, 2018 (Predecessor)																													32,031,054		$	320		—		—		80,609		$	1		2,806,187		$	(229,310	)	$	1,626,594		$	(2,098,555	)	$	(700,950	)
Net loss	—		—			—		—		—		—			—		—			—			(44,000		)	(44,000		)	—					—		—		—		—			—		—			—			(38,999		)	(38,999		)
Other	—		—			—		—		—		—			—		—			247			—			247			—					—		—		—		—			—		—			108						108
Stock-based compensation expense	—		—			—		—		—		—			—		—			231			—			231			—					—		—		—		—			—		—			204						204
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	)	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:																													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	)	(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			—		—			—		—		—		—			—		—			—			2,137,554			2,137,554
Issuance of Successor common stock	11,052,211		—			5,218,209		—		—		—			—		—			264,394			—			264,394			11,052,211		—			5,218,209		—		—		—			—		—			264,394			—			264,394
Issuance of Successor warrants	—		—			—		—		—		—			—		—			60,606			—			60,606			—		—			—		—		—		—			—		—			60,606			—			60,606
Balance at June 4, 2018 (Successor)	11,052,211		$	—		5,218,209		$	—	—		$	—		—		$	—		$	325,000		$	—		$	325,000		11,052,211		$	—		5,218,209		$	—	—		$	—		—		$	—		$	325,000		$	—		$	325,000
Net income	—		—			—		—		—		—			—		—			—			4,980			4,980			—		—			—		—		—		—			—		—			—			4,980			4,980
Stock-based compensation expense	—		—			—		—		—		—			—		—			652			—			652			—		—			—		—		—		—			—		—			652			—			652
Conversion of Class B common stock	1,344,184		—			(1,344,184	)	—		—		—			—		—			—			—			—			1,344,184		—			(1,344,184	)	—		—		—			—		—			—			—			—
Exercise of warrants	—		—			34,964		—		—		—			—		—			—			—			—			—		—			34,964		—		—		—			—		—			—			—			—
Balance at June 30, 2018 (Successor)	12,396,395		$	—		3,908,989		$	—	—		$	—		—		$	—		$	325,652		$	4,980		$	330,632		12,396,395		$	—		3,908,989		$	—	—		$	—		—		$	—		$	325,652		$	4,980		$	330,632



For Periods December 31, 2017 (Predecessor Company) through June 3, 2018 (Predecessor Company) and June 4, 2018 (Successor Company) through June 30, 2018 (Successor Company)
	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			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



For The Three Months Ended June 30, 2019 (Successor Company)
	Class A Common Stock			Class B Common Stock				Treasury Stock
	Number of Shares	Par Value		Number of Shares		Par Value		Number of Shares	Value			Additional Paid-In Capital		Retained Earnings		Total
Balance at March 31, 2019 (Successor)	13,992,145	$	—	2,812,006		$	—	34,704	$	(633	)	$	329,612	$	61,876	$	390,855
Net income	—	—		—		—		—	—			—		42,861		$	42,861
Shares returned in lieu of tax payments	—	—		—		—		33,129	(523		)	—		—		(523		)
Conversion of Class B common stock	115,153	—		(115,153	)	—		—	—			—		—		—
Exercise of warrants	170,659	—		—		—		—	—			—		—		—
Issuance of common stock	50,581	—		—		—		—	—			—		—		—
Stock-based compensation expense	—	—		—		—		—	—			1,106		—		1,106
Balance at June 30, 2019 (Successor)	14,328,538	$	—	2,696,853		$	—	67,833	$	(1,156	)	$	330,718	$	104,737	$	434,299



For The Six Months Ended June 30, 2019 (Successor Company)
	Class A Common Stock			Class B Common Stock				Treasury Stock
	Number of Shares	Par Value		Number of Shares		Par Value		Number of Shares	Value			Additional Paid-In Capital		Retained Earnings		Total
Balance at December 31, 2018 (Successor)	12,995,080	$	—	3,560,604		$	—	—	$	—		$	328,404	$	61,425	$	389,829
Net income	—	—		—		—		—	—			—		43,312		43,312
Shares returned in lieu of tax payments	—	—		—		—		67,833	(1,156		)	—		—		(1,156		)
Conversion of Class B common stock	866,786	—		(866,786	)	—		—	—			—		—		—
Exercise of warrants	347,845	—		—		—		—	—			—		—		—
Issuance of common stock	118,827	—		3,035		—		—	—			—		—		—
Stock-based compensation expense	—	—		—		—		—	—			2,314		—		2,314
Balance at June 30, 2019 (Successor)	14,328,538	$	—	2,696,853		$	—	67,833	$	(1,156	)	$	330,718	$	104,737	$	434,299

See accompanying notes to the unaudited condensed consolidated financial statements.

CUMULUS MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Successor Company			Predecessor Company						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,			Six Months Ended June 30,			Period from June 4, 2018 through June 30,			Period from January 1, 2018 through June 3,
	2018			2018			2017			2019			2018			2018
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:
Net income										$	43,312		$	4,980		$	696,156
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,379			22,046			32,402			28,135			4,379			22,046
Amortization of right of use assets										11,931			—			—
Amortization of debt issuance costs/discounts	—			—			5,055			136			—			—
Provision for doubtful accounts	322			5,993			1,993			618			322			5,993
Loss (gain) on sale or disposal of assets or stations	—			158			(2,502		)
(Gain) loss on sale or disposal of assets or stations										(47,724		)	—			158
Non-cash reorganization items, net	—			(523,651		)	—			—			—			(523,651		)
Gain on early extinguishment of debt										(381		)	—			—
Deferred income taxes	2,606			(179,455		)	1,206			7,725			2,606			(179,455		)
Stock-based compensation expense	652			231			1,068			2,314			652			231
Changes in assets and liabilities:
Accounts receivable	(16,363		)	12,697			3,078			16,704			(16,363		)	12,697
Trade receivable	26			(997		)	(74		)	(1,585		)	26			(997		)
Prepaid expenses and other current assets	(241		)	(5,831		)	(9,943		)	424			(241		)	(5,831		)
Operating leases										3,839			—			—
Assets held for sale										29			—			—
Other assets	(156		)	(436		)	281			2,778			(156		)	(436		)
Accounts payable and accrued expenses	2,065			7,777			(11,075		)	(17,836		)	2,065			7,777
Trade payable	13			190			(333		)	78			13			190
Other liabilities	5			(5,746		)	(2,493		)	(1,543		)	5			(5,746		)
Net cash (used in) provided by operating activities	(1,712		)	29,132			16,940
Net cash provided by (used in) operating activities										48,954			(1,712		)	29,132
Cash flows from investing activities:
Proceeds from sale of assets or stations										103,519			—			—
Acquisition	(18,000		)	—			—			—			(18,000		)	—
Proceeds from sale of assets or stations	—			—			6,090
Capital expenditures	(1,969		)	(14,019		)	(13,203		)	(10,715		)	(1,969		)	(14,019		)
Net cash used in investing activities	(19,969		)	(14,019		)	(7,113		)
Net cash provided by (used in) investing activities										92,804			(19,969		)	(14,019		)
Cash flows from financing activities:
Adequate protection payments on term loan	—			(37,802		)	—			—			—			(37,802		)
Deferred financing costs	—			(850		)	(94		)
Repayment of borrowings under term loan										(639,180		)	—			—
Proceeds from issuance of 6.75% senior notes										500,000			—			—
Financing costs										(7,675		)	—			(850		)
Shares returned in lieu of tax payments										(1,156		)	—			—
Repayments of financing lease obligations										(819		)	—			—
Net cash used in financing activities	—			(38,652		)	(94		)	(148,830		)	—			(38,652		)
(Decrease) increase in cash and cash equivalents and restricted cash	(21,681		)	(23,539		)	9,733
Decrease in cash and cash equivalents and restricted cash										(7,072		)	(21,681		)	(23,539		)
Cash and cash equivalents and restricted cash at beginning of period	88,351			111,890			139,284			30,038			88,351			111,890
Cash and cash equivalents and restricted cash at end of period	$	66,670		$	88,351		$	149,017		$	22,966		$	66,670		$	88,351

See accompanying notes to the unaudited condensed consolidated financial statements.

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

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

Nature of Business

~~A leader in the radio broadcasting industry,~~ CUMULUS MEDIA ~~combines~~is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month - wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming ~~with iconic, nationally syndicated media,~~through 428 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands to deliver premium content choices to the 245 million people reached each week through its 441 owned-and-operated stations broadcasting in 90 U.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 Radio Station Group and Westwood One platforms make CUMULUS MEDIA one of the few media companies that can provide advertisers with national reach and local impact. The Cumulus Radio Station Group and Westwood One are the exclusive radio broadcast 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~~American Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the ~~American Music Awards, the Billboard Music Awards,~~largest audio network in America; and ~~more. Additionally, the Company is the nation's leading provider of country music and lifestyle content~~inspires listeners through its ~~NASH brand, which serves country fans nationwide~~rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with local impact and national reach through ~~radio programming, exclusive~~on-air, digital, ~~content,~~mobile, and voice-activated media solutions, as well as access to integrated digital marketing services, powerful influencers, and live ~~events.~~event experiences.

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 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 including resolving outstanding claims and the Bankruptcy Court enters an order closing its case.

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 Media Inc. prior to June 4, 2018.

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 (see Note 2, “Emergence from Chapter 11” and Note 3 “Fresh Start Accounting”).~~statements. 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~~consequently the consolidated financial statements on and after June 4, 2018 generally 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 that are not expected to be compromised, including post-petition liabilities, in the accompanying Condensed Consolidated Balance Sheets.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Interim Financial Data

In the opinion of management, the Company's unaudited condensed consolidated financial statements include all adjustments ~~other than bankruptcy related adjustments as described in Note 3, "Fresh Start Accounting", consist~~ of a normal recurring ~~adjustments,~~nature necessary for a fair statement of the ~~Company’s~~ results ~~of operations~~ for ~~and financial condition as of the end of,~~ the interim periods ~~have been made.~~presented. The results ~~of operations and cash flows of the Successor~~ for the ~~period from June 4, 2018 through June 30, 2018 and of the Predecessor for the period from April 1, 2018 through June 3, 2018 and the Company’s financial condition as of June 30, 2018,~~interim periods 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~~those for the ~~fiscal year ending December 31, 2018. These~~full year. The condensed consolidated ~~interim~~ financial statements should be read in conjunction with ~~CUMULUS MEDIA’s~~our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

~~Going Concern~~

~~In accordance with the requirements~~Revision of ~~Accounting Standards Update (“ASU”) 2014-15, Presentation of~~Previously Issued 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 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.

During the ~~pendency~~third quarter of 2018, the ~~Chapter 11 Cases,~~Company determined that it had an error in the ~~Company’s ability~~classification of certain content related costs in the Condensed Consolidated Statement of Operations disclosed in previous periods. The Company should have presented the amounts within Content costs rather than within Selling, general and administrative expenses. In the accompanying Condensed Consolidated Statement of Operations, the previous period has been revised to ~~continue~~correct this misclassification. This reclassification resulted in an increase in Content costs of $4.2 million and a corresponding decrease in Selling, general and administrative expenses for the Predecessor Company period January 1, 2018 through June 3, 2018. The correction was not material to the consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("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, valuation assumptions for impairment analysis, certain expense accruals, leases and, if applicable, purchase price allocations. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual amounts and results may differ materially from these estimates.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and certain items that are excluded from net income (loss) and recorded as a ~~going concern was contingent upon a variety~~separate component of ~~factors, including~~stockholders' equity (deficit). During the ~~Bankruptcy Court’s approval of the Plan~~three and ~~the Company’s ability to successfully implement the Plan. As a result of the effectiveness of the Plan,~~six months ended June 30, 2019 (Successor Company) and periods from January 1, 2018 through June 3, 2018 (Predecessor Company), and June 4, 2018 through June 30, 2018 (Successor Company), the Company ~~believes it has the ability to meet its obligations for at least one year~~had no items of other comprehensive income (loss) and, therefore, comprehensive income (loss) does not differ from ~~the date of issuance of this Form 10-Q.~~reported net income (loss).

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 ("DC Land") to a third party. The ~~closing of the transaction~~sale is subject to various conditions and approvals, including, without limitation, the receipt by the buyer of certain required permits and approvals for its expected use of the land. There can be no assurance that such sale will be completed in a timely manner, at the original agreed price, or at all.

On April 15, 2019, the Company announced that it had entered into an agreement to sell KLOS-FM in Los Angeles, CA to Meruelo Media ("Meruelo Sale"). On June 27, 2019, the Company announced that it had entered into an agreement to sell WABC-AM in New York, NY to Red Apple Media, Inc. ("WABC Sale"). The Meruelo Sale closed on July 15, 2019. The closing of the WABC Sale is subject to various conditions and regulatory approvals which remain pending. The ~~asset was classified as~~Company expects the WABC Sale to close within the next twelve months.

The major categories of these assets held for sale are as follows (dollars in the Consolidated Balance Sheet at December 31, 2016. 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 Company's emergence from Chapter 11, as of June 30, 2018, the asset again met the criteria to be classified as held for sale. thousands):



	June 30, 2019								December 31, 2018
	WABC Sale		Meruelo Sale		DC Land		Total		DC Land
Property and equipment, net	$	7,054	$	516	$	80,000	$	87,570	$	80,000
Broadcast licenses	5,738		29,205		—		34,943		—
Other intangibles, net	374		566		—		940		—
	$	13,166	$	30,287	$	80,000	$	123,453	$	80,000

Supplemental Cash Flow Information

The following summarizes supplemental cash flow information to be read in conjunction with the Condensed Consolidated Statements of Cash Flows for the ~~Period from June 4, 2018 through~~six months ended June 30, ~~2018 (Successor), Period~~2019 (Successor Company) and Periods from January 1, 2018 through June 3, 2018 ~~(Predecessor)~~(Predecessor Company), and ~~the Six Months Ended~~June 4, 2018 through June 30, ~~2017 (Predecessor)~~2018 (Successor Company):


	Successor Company		Predecessor Company					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,		Six Months Ended June 30,		Period from June 4, 2018 through June 30,		Period from January 1, 2018 through June 3,
	2018		2018			2017		2019		2018		2018
Supplemental disclosures of cash flow information:
Interest paid	$	5,878	$	—		$	62,609	$	41,978	$	5,878	$	—
Income taxes paid	2,847		1,992			2,790		14,134		2,847		1,992
Supplemental disclosures of non-cash flow information:
Trade revenue	$	3,297	$	18,973		$	20,253	$	23,980	$	3,297	$	18,973
Trade expense	3,246		17,964			19,485		22,008		3,246		17,964
Transfer of deposit from escrow - WKQX acquisition	4,750		—			—		—		4,750		—
Supplemental disclosures of non-cash reorganization items:
Supplemental disclosures of non-cash reorganization items impact on changes in assets and liabilities:
Accounts receivable			$	(11	)			$	—	$	—	$	(11	)
Prepaid expenses and other current assets	—		21,077			—		—		—		21,077
Property and equipment	—		(121,732		)	—		—		—		(121,732		)
Other intangible assets, goodwill and other assets	—		283,217			—		—		—		283,217
Accounts payable, accrued expenses and other liabilities	—		(36,415		)	—		—		—		(36,415		)
Long-term debt			(994,407		)
Stockholders' equity	—		324,620			—
Cancellation of 7.75% Senior Notes								—		—		(610,000		)
Cancellation of Predecessor Company Term Loan								—		—		(1,684,407		)
Issuance of Successor Company Term Loan								—		—		1,300,000
Cancellation of Predecessor Company stockholders' equity								—		—		649,620
Issuance of Successor Company stockholders' equity								—		—		(325,000		)
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	$	20,500	$	37,444	$	50,046
Restricted cash	29,226		38,305			7,822		2,466		29,226		38,305
Total cash and cash equivalents and restricted cash	$	66,670	$	88,351		$	149,017	$	22,966	$	66,670	$	88,351

~~Recent~~Adoption of New Accounting Standards ~~Updates~~

ASU 2016-02 - Leases (“ASU 2016-02”). In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, which provides updated guidance for the accounting for leases. This update requires lessees to recognize assets and liabilities for the rights and obligations created by leases with a term longer than one year. Leases will be classified as either ~~finance~~financing or operating, thereby impacting the pattern of expense recognition in the statement of operations. In July 2018, the FASB issued ASU 2018-10 - Codification Improvements to Topic 842, Leases ("ASU 2018-10") and ASU 2018-11 - Targeted Improvements ("ASU 2018-11"), which provides technical corrections and clarification to ASU 2016-02. ASU 2016-02 and amendments ASU 2018-10 and ASU 2018-11 will be effective for fiscal years beginning after December 15, 2018, and interim periods thereafter. Early adoption is permitted. The ~~Company is currently assessing~~standard requires the ~~impact~~application of a modified retrospective approach by either applying the lease standard to each lease that ~~ASU 2016-02 will have on its consolidated~~existed at the beginning of the earliest comparative period presented in the financial statements, as well as leases that commenced after that date and ~~plans~~recognizing a cumulative effect adjustment for leases that commenced prior to ~~adopt~~the beginning of the earliest comparative period presented, or applying the standard to the leases that commenced as of the beginning of the reporting period in which the entity first applies the leases standard with a cumulative effect adjustment as of that date. The Company adopted this standard on January 1, 2019 and elected the "package of practical expedients" and as a result did not recast existing leases prior to January 1, 2019. The new lease standard also provides as a practical expedient and an accounting policy election, the option to not separate non-lease components from the associated lease components and instead account for each separate lease component and its associated non-lease components as a single lease component. The Company elected this option both for leases under which it is the lessor and for leases under which it is the lessee.

In adopting the new standard, ~~effective~~the Company aggregated and evaluated lease arrangements, implemented new controls and processes, and installed a lease accounting system. Adoption of the new standard resulted in recording operating lease right-of-use assets and operating lease liabilities of approximately $156.1 million and $154.5 million on January 1, 2019.

~~Adoption of New Accounting Standards~~

~~ASU 2014-09 and related updates - Revenue from Contracts with Customers~~ ~~("ASU 2014-09") or ("ASC 606")~~. On January 1, 2018, the Company adopted ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services and satisfaction of performance obligations to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company applied the modified retrospective method to contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported under the previous accounting standards. There was not a material impact to revenues as a result of the 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 Company's business processes, systems, or internal controls as a result of implementing the standard. See Note ~~4, "Revenues"~~13 Leases for further ~~details.~~information.

ASU ~~2016-01~~2018-07 - ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~ ~~("ASU 2016-01")~~.Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting ~~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. This ASU revises~~2018-07”). The standard aligns the accounting ~~requirements related~~for share-based payment awards issued to employees and non-employees. Changes to the ~~classification and measurement~~accounting for non-employee awards include: (1) equity-classified share-based payment awards issued to non-employees will now be measured on the grant date, instead of ~~investments in equity securities and~~ the ~~presentation of certain fair value changes~~previous requirement to re-measure the awards through the performance completion date; (2) for ~~financial liabilities measured at fair value. This ASU also changes certain disclosure requirements~~performance conditions, compensation cost associated with the ~~fair value~~award will be recognized when achievement of ~~financial~~the performance condition is probable, rather than upon achievement of the performance condition; and (3) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. ~~These changes require an entity~~The guidance should be applied to ~~measure,~~all new awards granted after the date of adoption. In addition, the modified retrospective approach should be used on all liability-classified awards that have not been settled and equity-classified awards for which a measurement date has not been established by the adoption date by re-measurement at fair value ~~investments~~as of the adoption date with a cumulative effect adjustment to opening retained earnings 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~~fiscal year of adoption. The standard is effective for fiscal years beginning after December 15, ~~2017,~~2018, and interim periods ~~thereafter. In February 2018, the FASB issued~~ ~~ASU 2018-03 - Recognition and Measurement of Financial Assets and Financial Liabilities~~ ("ASU 2018-03") which provides an option for a company to "un-elect" the measurement alternative and elect to account for the investment at fair value through current earnings for 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 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 same issuer.within those fiscal years. The Company adopted ASU ~~2016-01~~2018-07 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 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 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. The Company adopted ASU 2016-15 as of January 1, 2018 and there was no impact to the 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 of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. The Company adopted ASU 2016-18 as of January 1, 2018. Upon adoption of ASU 2016-18 on January 1, 2018, restricted cash balances 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 Condensed Consolidated Cash Flows for all periods presented. Additionally, separate line items showing changes in restricted cash balances have been eliminated from the Condensed Consolidated Statement of 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 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. The Company adopted ASU 2017-01 as of January 1, 2018 on a prospective basis2019 and there was no material impact to the Condensed Consolidated Financial Statements.

Recent Accounting Standards Updates

ASU ~~2017-09~~2016-13 - ~~Scope of Modification Accounting~~ Financial Instruments - Credit Losses (Topic 326)(" (“ASU ~~2017-09"~~2016-13”). In ~~May 2017,~~June 2016, the FASB issued ASU 2016-13 which requires entities to estimate loss of financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an ~~update to guidance on Topic 718,~~ ~~Compensation—Stock Compensation~~expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that ~~clarifies when changes~~the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the ~~terms or conditions~~previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of ~~a share-based award must be accounted~~information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a ~~modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification~~cumulative-effect adjustment to retained earnings as of the ~~award, as equity or liability, changes as a result~~beginning of the ~~change~~first reporting period in ~~terms or conditions. ASU 2017-09~~which the guidance is effective. The standard is effective for ~~annual periods,~~fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, ~~2017.~~2018, and interim periods within those fiscal years. The Company ~~adopted~~is currently evaluating the potential impact of adopting ASU ~~2017-09 as of January 1, 2018~~2016-13 on ~~a prospective basis and there was no material impact~~its Consolidated Financial Statements.

ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the ~~consolidated financial statements.~~Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, the FASB issued ASU 2018-13, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods therein, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating the potential impact of adopting ASU 2018-13 on its Consolidated Financial 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~~ Items, Net

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~~were presented separately in the ~~accompanying~~Predecessor Company's Condensed Consolidated Statement of Operations prior to the Company's emergence from Chapter 11. For the Predecessor Company periods presented herein, Reorganization items were as follows ~~(dollars in~~(in thousands):


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

(a) Liabilities ~~subject~~Subject to ~~compromise~~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~~were 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.

During the Predecessor Company periods presented herein, the Company made cash payments of approximately $58.4 million for Reorganization items. Costs incurred as a result of the Chapter 11 Cases by the Successor Company subsequent to its emergence from Chapter 11 are classified as restructuring costs within Corporate Expenses in the Successor Company's Condensed Consolidated Statement of Operations.

3. Acquisitions and Dispositions

Entercom Asset Exchange

On May 9, 2019, the Company completed its previously announced non-monetary exchange with Entercom ("Entercom Swap"). The Company received WNTR-FM, WXNT- AM, and WZPL-FM in Indianapolis, IN and Entercom received WNSH-FM (New York, NY) and WMAS-FM and WHLL-AM (both in Springfield, MA).

The table below summarizes the preliminary purchase price allocation for the Entercom Swap (dollars in thousands):



Assets Acquired
Broadcast licenses	$	22,963
Property and equipment, net	1,700
Total assets acquired	$	24,663
Assets Disposed
Broadcast licenses	$	(23,565	)
Property and equipment, net	(703		)
Other intangibles	(395		)
Total assets disposed	$	(24,663	)

Connoisseur Media Asset Exchange

On June 26, 2019, the Company completed its previously announced non-monetary exchange with Connoisseur Media ("Connoisseur Swap"). The Company received WODE-FM, WWYY-FM, WEEX-AM and WTKZ-AM in and around Allentown, PA and Connoisseur Media received WEBE-FM in Westport, CT, and WICC-AM in Bridgeport, CT.

On a preliminary basis, the carrying value of the assets transferred to Connoisseur Media as part of the Connoisseur Swap was approximately $3.7 million. The Company expects the fair value of assets acquired in the Connoisseur Swap will approximate the carrying value of the assets transferred, with any difference accounted for as a gain or loss on the exchange.

The preliminary purchase price allocation for the Entercom Swap and Connoisseur Swap are based upon the valuation of assets received and the estimates and assumptions used in these valuations are subject to change as the Company obtains additional information during the measurement period, which may be up to one year from the acquisition date. The preliminary and final valuations could be different.

Educational Media Foundation Sale

On May 31, 2019, the Company completed its previously announced sale of six radio stations, WYAY-FM (Atlanta, GA), WPLJ-FM (New York, NY), KFFG-FM (San Francisco, CA), WZAT-FM (Savannah, GA), WXTL-FM (Syracuse, NY), and WRQX-FM (Washington, DC) to Educational Media Foundation for $103.5 million in cash ("EMF Sale"). The Company recorded a gain of $47.6 million on the sale which is included in the (Gain) Loss on Sale or Disposal of Assets or Stations financial statement line item of the Company's Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2019.

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~~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				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		Three Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018
Cumulus Radio Station Group
Advertising revenues (broadcast, digital, non-traditional revenue (“NTR”) and trade)	$	67,958	$	134,477	$	207,778	$	192,163	$	67,958	$	134,477
Non-advertising revenues (tower rental and other)	399		616		818		999		399		616
Total Cumulus Radio Station Group revenue	$	68,357	$	135,093	$	208,596	$	193,162	$	68,357	$	135,093

Westwood One
Advertising revenues (broadcast, digital and trade)	$	24,986	$	52,684	$	76,617	$	82,667	$	24,986	$	52,684
Non-advertising revenues (license fees and other)	1,370		2,240		4,617		3,097		1,370		2,240
Total Westwood One revenue	$	26,356	$	54,924	$	81,234	$	85,764	$	26,356	$	54,924

Other (1)	$	291	$	228	$	701	$	747	$	291	$	228
Total Revenue	$	95,004	$	190,245	$	290,531	$	279,673	$	95,004	$	190,245


	Successor Company		Predecessor Company				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		Six Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018
Cumulus Radio Station Group
Advertising revenues (broadcast, digital, NTR and trade)	$	67,958	$	301,804	$	380,502
Advertising revenues (broadcast, digital, non-traditional revenue (“NTR”) and trade)							$	357,859	$	67,958	$	301,804
Non-advertising revenues (tower rental and other)	399		1,513		1,695		1,844		399		1,513
Total Cumulus Radio Station Group revenue	$	68,357	$	303,317	$	382,197	$	359,703	$	68,357	$	303,317

Westwood One
Advertising revenues (broadcast, digital and trade)	$	24,986	$	143,215	$	162,262	$	178,975	$	24,986	$	143,215
Non-advertising revenues (license fees and other)	1,370		6,500		8,828		7,148		1,370		6,500
Total Westwood One revenue	$	26,356	$	149,715	$	171,090	$	186,123	$	26,356	$	149,715

Other (1)	$	291	$	892	$	1,274	$	1,343	$	291	$	892
Total Revenue	$	95,004	$	453,924	$	554,561	$	547,169	$	95,004	$	453,924


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

(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 $10.7 million and $24.0 million for the three and six months ended June 30, 2019 (Successor Company). Trade revenue totaled $3.3 million, $7.7 million and $19.0 million for the period from June 4, 2018 through June 30, 2018 (Successor Company), April 1, 2018 through June 3, 2018 (Predecessor Company) 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,~~2018 (Predecessor Company), 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.~~

Contract Costs

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~~the Company uses the practical expedient that allows ~~the option to expense~~expensing commissions as they are incurred. For contracts where the new and renewal commission rates are commensurate, management uses the contract life for the amortization ~~period assessed by management was the contract life.~~period. 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~~Selling, general and ~~Administrative expense.~~administrative expenses. The Company does not apply the practical expedient option to new local ~~direct~~revenue contracts, asbecause 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, 2019, and December 31, 2018, the Company recorded ~~an asset~~assets of approximately ~~$3.5~~$7.2 million and $6.5 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.Remaining Performance Obligations

~~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~~$14.4 million of ~~revenue in 2019.~~revenue.

5. Restricted Cash

As of June 30, ~~2018~~2019, and December 31, ~~2017,~~2018, the Condensed Consolidated Balance Sheets included approximately ~~$29.2~~$2.5 million ~~and $9.0 million, respectively,~~ in restricted cash. Restricted cash is used primarily ~~for collateralizing~~to collateralize standby letters of credit for certain leases and insurance ~~policies, securing certain transactions as dictated by the financial institutions used by the Company and reserving for professional fees related to the Company’s Chapter 11 Cases.~~policies.

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 carrying value of goodwill by reportable segments is as follows (dollars in thousands):~~

Cumulus Radio Station Group Westwood One Consolidated
Balance as of January 1, 2018 (Predecessor Company)
   Goodwill $ 1,278,526
$ 304,280
$ 1,582,806
   Accumulated impairment losses (1,278,526 ) (169,066 ) (1,447,592 )
     Balance as of January 1, 2018 (Predecessor Company) $ —
$ 135,214
$ 135,214
Balance as of June 3, 2018 (Predecessor Company)
   Goodwill $ 1,278,526
$ 304,280
$ 1,582,806
   Accumulated impairment losses (1,278,526 ) (169,066 ) (1,447,592 )
     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 Company eliminated goodwill upon application of fresh start accounting (see Note 3, “Fresh Start Accounting”).

Intangible Assets

~~In connection with~~The following table presents the ~~Company’s adoption of fresh start accounting on the Effective Date,~~Company's intangible assets as of June 30, 2019 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 determined by valuation specialists. The Company’s intangible assets are as followsDecember 31, 2018 (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:	Indefinite-Lived			Definite-Lived			Total
Balance as of December 31, 2018	$	956,836		$	172,351		$	1,129,187
Assets held for sale (See Note 1)	(35,423		)	(460		)	(35,883		)
Dispositions	(78,582		)	(835		)	(79,417		)
Acquisitions (See Note 3)	26,129			162			26,291
Amortization	—			(14,783		)	(14,783		)
Other ^(a)	—			(1,934		)	(1,934		)
Balance as of June 30, 2019	$	868,960		$	154,501		$	1,023,461

(a) Reclassification of leasehold intangibles to right of use assets related to the adoption of ASC 842

~~As part~~The Company's indefinite-lived intangible assets consist of ~~fresh start accounting,~~broadcasting licenses and trademarks, while the ~~Company removed existing intangibles~~Company's definite-lived intangible assets consist of broadcast advertising and ~~accumulated amortization and recorded an adjustment of $147.9 million to reflect the fair value of intangibles. (See Note 3, “Fresh Start Accounting").~~affiliate relationships.

The Company performs impairment testing of its ~~Federal Communications Commission (“FCC”)~~broadcasting licenses ~~and goodwill~~ annually as of December 31 of each year and on an interim basis if events or circumstances indicate that ~~FCC~~broadcasting licenses ~~or goodwill~~ may be impaired. The Company reviews the carrying value of its ~~definite-lived~~other intangible assets, primarily trademarks, broadcast 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 any interim impairment tests during the ~~period~~three and six months ended June 30, ~~2018, nor did the Company have goodwill as of the period ended June 30, 2018.~~2019.

7. Long-Term Debt

The Company’s long-term debt consisted of the following as of June 30, ~~2018~~2019 and December 31, ~~2017~~2018 (dollars in thousands):

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
$ —



	June 30, 2019			December 31, 2018
Term Loan	$	590,738		$	1,230,299
Plus: current portion of Term Loan	13,000			13,000
Total Term Loan	603,738			1,243,299
6.75% Senior Notes	500,000			—
Less: unamortized debt issuance costs	(7,332		)	—
Total 6.75% Senior Notes	492,668			—
Long-term debt, net	$	1,096,406		$	1,243,299

In connection with the filing of the Bankruptcy Petitions, all amounts outstanding under the Predecessor Term Loan and 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 the Effective Date, Cumulus Media New Holdings Inc., a Delaware corporation (“Holdings”) and an indirectly wholly-owned subsidiary of the Company, and certain of the Company’s other subsidiaries, entered into the Credit Agreement with the holders of claims with respect to the Predecessor Term Loan 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 its subsidiaries that are party thereto as co-borrowers 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 London Inter-bank Offered Rate (“LIBOR”) plus an applicable margin of 4.50%, subject to a LIBOR floor of 1.00%, or (ii) 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,~~2019, the Term Loan bore interest at ~~6.6%~~a rate of 6.91% 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~~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 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 the Credit Agreement). Upon the occurrence of an event of default, the Administrative 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~~conditions (see below).

On May 16, ~~“Subsequent Event."~~2019, the Credit Agreement was amended to permit the issuance of indebtedness to the extent the proceeds of such indebtedness are used to refinance all or a portion of the Term Loan, subject to certain conditions as described more fully therein.

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).~~penalty. 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). On October 11, 2018, the Company purchased $50.2 million of face value of the Term Loan for $50.0 million, a discount to par value of 0.40%. On June 5, 2019, with the proceeds from the EMF Sale and cash on hand, the Company made a $115.0 million voluntary prepayment at par on the Term Loan. On June 26, 2019, the Company used the net proceeds from the issuance of the 6.75% Senior Notes (see below) to make a $492.7 million voluntary prepayment at par on the Term Loan. On July 22, 2019, with the proceeds from the KLOS Sale (see Note 16 - Subsequent Events) and cash on hand, the Company made a $50.0 million voluntary prepayment at par on the Term Loan.

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. As of June 30, 2019, the Company was in compliance with all required covenants under the Credit Agreement.

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

~~Canceled~~Revolving Credit Agreement

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, Intermediate Holdings as a guarantor, certain lenders, and Deutsche Bank AG New York Branch as a lender and Administrative Agent.

The ~~Canceled~~Revolving 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~~Facility matures on August 17, 2023. Availability under the ~~Predecessor Term Loan.~~Revolving Credit Facility is generally determined by 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.

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~~Revolving Credit Facility bear interest, at the option of Holdings, based on (i) 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 (ii) the Alternative Base Rate (as defined below) ~~or LIBOR,~~ plus ~~3.25%~~a percentage spread (ranging from 0.25% to 0.75%) based on ~~LIBOR-based borrowings and 2.25% on Base Rate-based borrowings. LIBOR-based borrowings are subject to a LIBOR floor of 1.0%. Base Rate-based borrowings were subject to a~~the average daily excess availability under the Revolving Credit Facility. The Alternative Base Rate ~~floor of 2.0%. Base Rate was~~is defined, for any day, as the ~~rate~~ per annum rate equal to the highest of (i) the ~~Federal Funds Rate, as published by the Federal Reserve Bank~~federal funds rate plus 1/2 of ~~New York, plus 0.5%~~1.0%, (ii) the ~~prime commercial lending~~ rate identified as the “Prime Rate” and normally published in the Money Rates section of ~~JPMorgan Chase~~the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. In addition, the unused portion of the Revolving Credit Facility is subject to a commitment fee ranging from 0.250% to 0.375% based on the utilization of the 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 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 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 the Credit Agreement). Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans then outstanding 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 as borrowers, and the Revolver Guarantors.

As of June 30, 2019, and December 31, 2018, $4.1 million and $2.8 million were outstanding in the form of letters of credit under the Revolving Credit Facility, respectively. As of June 30, 2019, the Company was in compliance with all required covenants under the Revolving Credit Agreement.

6.75% Senior Notes

On June 26, 2019, Holdings (the “Issuer”) entered into an indenture, dated as of June 26, 2019 (the “Indenture”), among the Issuer, the guarantors party thereto (the “Senior Notes Guarantors”) and U.S. Bank ~~N.A.,~~National Association, as ~~established~~trustee, governing the terms of the Issuer’s $500,000,000 aggregate principal amount of 6.75% Senior Secured First-Lien Notes due 2026 (the “6.75% Senior Notes”). The 6.75% Senior Notes were issued on June 26, 2019. The net proceeds from the issuance of the 6.75% Senior Notes were applied to partially repay existing indebtedness under the Term Loan (see above).

Interest on the 6.75% Senior Notes is payable on January 1 and July 1 of each year, commencing on January 1, 2020. The 6.75% Senior Notes mature on July 1, 2026.

The Issuer may redeem some or all of the 6.75% Senior Notes at any time, or from time to time, ~~and (iii) 30 day LIBOR plus 1.0%.~~on or after July 1, 2022, at the following prices:



Year	Price
2022	103.7500	%
2023	101.6875	%
2024 and thereafter	100.0000	%

Prior to July 1, 2022, the Issuer may redeem all or part of the 6.75% Senior Notes upon not less than 30 nor more than 60 days' prior notice, at 100% of the principal amount of the 6.75% Notes redeemed plus a "make whole" premium.

The 6.75% Senior Notes are fully and unconditionally guaranteed by each of the Senior Notes Guarantors, subject to the terms of the Indenture. Other than certain assets secured on a first priority basis under the Revolving Credit Facility (as to which the 6.75% Senior Notes are secured on a second-priority basis), the 6.75% Senior Notes and related guarantees are secured on a first-priority basis pari passu with the Term Loan (subject to certain exceptions) by liens on substantially all of the assets of the Issuer and the Guarantors. The Guarantors consist of Intermediate Holdings and each of the Issuer’s direct and indirect wholly-owned subsidiaries that guarantees the Credit Agreement which governs the Term Loan.

The Indenture contains representations, covenants and events of default customary for financing transactions of this nature. At June 30, 2019, the Issuer was in compliance with all required covenants under the Indenture. A default under the 6.75% Senior Notes could cause a default under the Credit Agreement.

The 6.75% Senior Notes have not been and will not be registered under the federal securities laws or the securities laws of any state or any other jurisdiction. The Company is not required to register the 6.75% Senior Notes for resale under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction and are not required to exchange the 6.75% Senior Notes for notes registered under the Securities Act or the securities laws of any other jurisdiction and we have no present intention to do so. As a result, Rule 3-10 of Regulation S-X promulgated by the ~~filing of the Bankruptcy Petitions, Old Cumulus was~~SEC is not applicable and no separate financial statements are 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 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 Bankruptcy Petitions.

~~On the Effective Date, the Predecessor Term Loan was canceled and all liabilities thereunder were discharged.~~

~~7.75% Senior Notes~~

On May 13, 2011, Old Cumulus issued the 7.75% Senior Notes. On September 16, 2011, Old Cumulus and one of its subsidiaries entered into a supplemental indenture with the trustee under the indenture governing the 7.75% Senior Notes which provided for, among other things, the (i) assumption by such subsidiary of all obligations of Old Cumulus related to the 7.75% Senior Notes; (ii) substitution of that subsidiary for Old Cumulus as issuer; (iii) release of Old Cumulus from all obligations as original issuer; and (iv) guarantee by Old Cumulus of all of the subsidiary issuer's obligations, in each case under the indenture and the 7.75% Senior Notes.

Interest on the 7.75% Senior Notes was payable on each May 1 and November 1 of each year. The 7.75% Senior Notes were scheduled to mature on May 1, 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.

~~On the Effective Date, the 7.75% Senior Notes were canceled and all liabilities thereunder were discharged.~~guarantor subsidiaries.

9.8. Fair Value Measurements

The following table shows the gross amount and fair value of the Term Loan ~~the Predecessor Term Loan~~ and ~~7.75%~~6.75% Senior Notes (dollars in thousands):


	Successor Company		Predecessor Company
	June 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018
Term Loan:
Gross value	$	1,300,000	$	—	$	603,738	$	1,243,299
Fair value - Level 2	$	1,300,000	$	—	603,134		1,182,688
Predecessor Term Loan:
6.75% Senior Notes:
Gross value	$	—	$	1,722,209	$	500,000	$	—
Fair value - Level 2	$	—	$	1,481,100	498,125		—
7.75% Senior Notes:
Gross value	$	—	$	610,000
Fair value - Level 2	$	—	$	105,988

As of June 30, 2019 and December 31, 2018, the Company ~~compared the implied credit spread~~used trading prices from ~~an assumed par issuance price to market data~~a third party of 99.90% and 95.13% to calculate the fair value of the Term ~~Loan.~~Loan, respectively.

As of ~~December 31, 2017, Old Cumulus~~June 30, 2019, the Company used ~~the closing~~ trading prices from a third party of ~~86.0%~~99.63% to calculate the fair value of the ~~Predecessor Term Loan and 17.4% to calculate the fair value of the 7.75%~~6.75% Senior Notes.

~~10.~~9. Income Taxes

~~The Company’s~~

For the three months ended June 30, 2019 the Successor Company recorded income tax ~~provision (benefit) and~~expense of $17.0 million on pre-tax book income of $59.9 million, resulting in an 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
for the three months ended June 30, 2019 of approximately 28.3%. For the Successor Company period June 4, 2018 through June 30, 2018, the Successor Company recorded income tax expense of $2.6 million on pre-tax book income of $7.6 million, resulting in an effective tax rate of approximately 34.4%. For the Predecessor Company period April 1, 2018 through June 3, 2018, the Predecessor Company recorded income tax benefit of $176.7 million on pre-tax book income of $524.4 million, resulting in an effective tax rate of approximately (33.7)%.

For the six months ended June 30, 2019 the Successor Company recorded income tax expense of $16.8 million on pre-tax book income of $60.2 million, resulting in an effective tax rate of approximately 27.9%. For the Successor Company period June 4, 2018 through June 30, 2018, the Company recorded income tax expense of $2.6 million on pre-tax book income of $7.6 million, resulting in an effective tax rate of approximately 34.4%. For the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company recorded an income tax benefit of $176.9 million on pre-tax book income of $519.3 million, resulting in an effective tax rate of approximately (34.1)%.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the three months and six months ended June 30, 2019 primarily relates to state and local income taxes, the effect of certain statutory non-deductible expenses, excess tax benefits related to share-based compensation awards, and the tax effect of changes in uncertain tax positions.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the Successor Company period June 4, 2018 through June 30, 2018 was attributable to 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 effective tax rate and the federal statutory rate of 21.0% for the Predecessor Company period ~~from January~~April 1, 2018 tothrough June 3, 2018, and ~~the period from April~~January 1, 2018 tothrough June 3, 2018 ~~relates~~primarily related 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 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 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 an indirectly wholly-owned subsidiary of the reorganized Cumulus Media Inc. (see Note 1, “Nature of Business, Interim Financial Data and Basis of 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~~its assessment 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”~~740"). The Company reviews the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize existing deferred tax assets. As of June 30, ~~2018,~~2019, the Company has not recorded a valuation allowance since the Company continues to ~~maintain a full valuation allowance~~believe, on ~~loss carryforwards for which~~ the ~~Company does not believe it will be able to~~basis of its evaluation, that its deferred tax assets meet the more likely than not recognition standard for recovery. The Company will continue to monitor the valuation of deferred tax assets, which requires judgment ~~about future profitability as well as the assessment of~~in assessing the likely future tax consequences of events that ~~have been~~are recognized in the ~~Company’s~~Company's financial statements or tax ~~returns.~~

returns as well as judgment in projecting future profitability.

~~11.~~

10. 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 300,000,000 shares of stock divided into three classes consisting of: (i) 100,000,000 shares of 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,~~2019, the Successor Company had ~~16,305,384~~17,060,095 aggregate issued shares of common stock, and 17,025,391 outstanding shares ~~of new common stock~~ consisting of:

(i) ~~12,396,395~~14,363,242 issued shares and 14,328,538 outstanding shares designated as Class A common stock; and

(ii) ~~3,908,989~~2,696,853 issued and outstanding shares designated as Class B common ~~stock~~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 (the “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 (the “Series 2 warrants” and, together with the Series 1 warrants the “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) 100,000,000 shares of preferred stock.~~

In accordance with the Plan, each share of old common stock outstanding prior to the Effective Date, including all 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.

~~Predecessor Warrants~~

~~2009 Warrants~~

In June 2009, in connection with the execution of an amendment to Old Cumulus's then-existing credit agreement, the Predecessor Company issued warrants to the lenders thereunder that allowed them to acquire up to 156,250 shares of old Class A common stock at an exercise price of $1.17 per share (the “2009 Warrants”). None of the 2009 warrants were converted during the 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.

~~Citadel Warrants~~

As a component of Old Cumulus’s September 16, 2011 acquisition of Citadel Broadcasting Corporation (the “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 “Citadel Warrants”) under a warrant agreement dated September 16, 2011. The Citadel Warrants were exercisable at any time prior to June 3, 2030 at an exercise price of $0.01 per share with each Citadel warrant providing the right to purchase one share. As of June 3, 2018, 31,955 Citadel Warrants remained outstanding. The Citadel Warrants were canceled in their entirety as of the Effective Date.

~~Crestview Warrants~~

Also on September 16, 2011, but pursuant to a separate warrant agreement, Old Cumulus issued warrants to purchase 1.0 million shares of Class A common stock with an exercise price, as adjusted, of $34.56 per share (the “Crestview Warrants”). As of June 3, 2018, all 1.0 million Crestview Warrants remained outstanding. The Crestview Warrants were canceled in their entirety as of the Effective Date.

~~12.~~

11. Stock-Based Compensation Expense

~~Successor Share-Based Compensation~~

Upon adopting ASC 718 for awards with service conditions, the Successor 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 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 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.

In accordance with the Plan and with the approval of the Board, the Long-Term Incentive Plan (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 success of the Company. The Incentive Plan permits awards to be made to ~~consultants or to~~ employees, directors, or consultants of the Company or 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 of new Class A common stock reserved for issuance pursuant to the 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 about the Effective Date and pursuant to the Plan, the Company granted 562,217 restricted stock units (“RSUs”) and 562,217 stock options (“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 of 1,124,434 shares of new Class A common stock (collectively, the “Management Emergence Awards”).

~~Fifty percent (50%) of the RSUs granted to Management vest ratably on each of December 31, 2018,~~ On February 1, 2019, and 2020, subject to certain performance-based criteria. Of the remaining fifty percent (50%) of the RSUs and one hundred percent (100%) of the Options granted to Management, 30% will vest on each of the first two anniversaries of the Effective Date, and 20% will vest on each of the third and fourth anniversaries 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 ingranted 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~~144,000 RSUs 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.Management.

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”). On April 30, 2019, the Company granted an additional 37,555 RSUs to its non-employee directors.

The ~~RSUs and Options granted to each non-employee director vest in four equal installments on~~following table discloses 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~~for the ~~period from June 4, 2018 through June 30, 2018 are~~Successor Company and Predecessor Company periods 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~~



	Successor Company			Predecessor Company
	Three Months Ended June 30, 2019	Six Months Ended June 30, 2019	Period from June 4, 2018 through June 30, 2018	Period from January 1, 2018 through June 3, 2018
Stock option grants	—	—	581,124	—
Restricted stock unit grants	37,555	181,555	600,031	—
Total grants	37,555	181,555	1,181,155	—

The following tables disclose 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~~Successor Company and Predecessor Company periods presented below (in thousands):


	Successor Company		Successor Company				Predecessor Company
	Period from June 4, 2018 through June 30, 2018		Three Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018
Stock option grants	$	315	$	846	$	315	$	65
Restricted stock unit grants	337		260		337		—
Total expense	$	652	$	1,106	$	652	$	65

~~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 six months ended June 30, 2017 are presented in the 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~~



	Successor Company				Predecessor Company
	Six Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018
Stock option grants	$	1,699	$	315	$	231
Restricted stock unit grants	615		337		—
Total expense	$	2,314	$	652	$	231

The total share-based compensation expense 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 six months ended June 30, 2017 was as follows (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 Six months Ended June 30, 2017
Stock option grants $ 65
$ 530
$ 231
$ 1,068

~~13.~~

12. Earnings ~~(Loss)~~ Per Share

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 calculates basic earnings ~~(loss)~~ per share by dividing net income ~~(loss)~~ by the weighted average number of common shares outstanding, excluding unvested restricted shares. The Company calculates diluted earnings ~~(loss)~~ per share by dividing net income ~~(loss)~~ by the weighted average number of common shares outstanding plus the dilutive effect of all outstanding share-based awards, including stock options and restricted stock awards. Warrants generally 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. The Company applies the two-class method to calculate earnings 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 presents the basic and diluted earnings per share, and the reconciliation of basic to diluted weighted average common shares ~~as well as the effect of anti-dilutive securities excluded from diluted weighted average common shares~~ (in ~~thousands)~~thousands, except per share amounts):


	Successor Company		Predecessor Company				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		Three Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018
Basic Earnings Per Share
Numerator:
Undistributed net income from operations	$	4,980	$	701,157	$	5,672	$	42,861	$	4,980	$	701,157
Less:
Participation rights of certain warrants in undistributed earnings	—		—		6
Basic net income attributable to common shares	$	4,980	$	701,157	$	5,666	$	42,861	$	4,980	$	701,157
Denominator:
Basic weighted average shares outstanding	20,005		29,338		$	29,306	20,125		20,005		29,338
Basic undistributed net income per share attributable to common shares	$	0.25	$	23.90	$	0.19	$	2.13	$	0.25	$	23.90

Diluted Earnings Per Share
Numerator:
Undistributed net income from operations	$	4,980	$	701,157	$	5,672	$	42,861	$	4,980	$	701,157
Less:
Participation rights of certain warrants in undistributed earnings	—		—		6
Diluted net income attributable to common shares	$	4,980	$	701,157	$	5,666	$	42,861	$	4,980	$	701,157
Denominator:
Basic weighted average shares outstanding	20,005		29,338		29,306		20,125		20,005		29,338
Effect of dilutive options and restricted share units							192		295		—
Diluted weighted average shares outstanding	20,300		29,338		29,306		20,317		20,300		29,338
Diluted undistributed net income per share attributable to common shares	$	0.25	$	23.90	$	0.19	$	2.11	$	0.25	$	23.90

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 )



	Successor Company				Predecessor Company
	Six Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018
Basic Earnings Per Share
Numerator:
Undistributed net income from operations	$	43,312	$	4,980	$	696,156
Basic net income attributable to common shares	$	43,312	$	4,980	$	696,156
Denominator:
Basic weighted average shares outstanding	20,092		20,005		29,338
Basic undistributed net income per share attributable to common shares	$	2.16	$	0.25	$	23.73

Diluted Earnings Per Share
Numerator:
Undistributed net income from operations	$	43,312	$	4,980	$	696,156
Diluted net income attributable to common shares	$	43,312	$	4,980	$	696,156
Denominator:
Basic weighted average shares outstanding	20,092		20,005		29,338
Effect of dilutive options and restricted share units	177		295		—
Diluted weighted average shares outstanding	20,269		20,300		29,338
Diluted undistributed net income per share attributable to common shares	$	2.14	$	0.25	$	23.73

13. Leases

As described in Note 1, the Company adopted ASU 2016-02 ("ASC 842") effective January 1, 2019 using a modified retrospective approach and elected the practical expedients allowed under the standard.

The Company has entered into various lease agreements both as the lessor and lessee. The leases have been classified as either operating or finance leases in accordance with ASC 842, and primarily consist of leases for land, tower space, office space, certain office equipment and vehicles. The Company also has sublease arrangements that provide a nominal amount of income. A right-of-use asset and lease liability have been recorded on the balance sheet for all leases except those with an original lease term of twelve months or less. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As a lessor, we reserve the rights to the underlying assets in our agreements and do not expect to derive any amounts at the end of the lease terms.

The Company's leases typically have lease terms between five to ten years. Most of these leases include one or more renewal options for periods ranging from one to ten years. At lease commencement, the Company assesses whether it is reasonably certain to exercise a renewal option. Options that are reasonably certain of being exercised are factored into the determination of the lease term, and related payments are included in the calculation of the right-of-use asset and lease liability. The Company assumes that certain tower and land leases will be renewed for one additional term.

The Company estimates the discount rate used to determine the present value of lease payments based on information available at lease commencement.

The following table presents the Company's total right-of-use assets and lease liabilities as of June 30, 2019 (dollars in thousands):



	Balance Sheet Location	June 30, 2019
Right-of-Use Assets
Operating	Operating lease right-of-use assets	$	148,493
Finance, net of accumulated amortization of $211	Other assets	527
Total Assets		$	149,020

Liabilities
Current
Operating	Current portion of operating lease liabilities	$	34,172
Finance	Accounts payable and accrued liabilities	446
Noncurrent
Operating	Operating lease liabilities	115,183
Finance	Other liabilities	81
Total Liabilities		$	149,882

The following table presents the total lease cost for three and six months ended June 30, 2019 (dollars in thousands):



	Statement of Operations Location	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating Lease Cost	Selling, general and administrative expenses; Corporate expenses	$	10,786	$	19,796
Finance Lease Cost
Amortization of right-of-use assets	Depreciation and amortization	108		223
Interest on lease liabilities	Interest expense	11		24
Total Lease Cost		$	10,905	$	20,043

Total lease income related to our lessor arrangements was $0.8 million and $1.5 million for the three and six months ended June 30, 2019.

Other Supplementary Data



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,298	$	10,501
Operating cash flows from finance leases	11		24
Financing cash flows from finance leases	108		223
Financing cash flows from failed sale leaseback	298		596

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	8,023	$	15,223



	June 30, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	7.80
Finance leases	2.09
Weighted Average Discount Rate
Operating leases	7.5	%
Finance leases	7.5	%

Maturities by year of lease liabilities as of June 30, 2019 were as follows (dollars in thousands):



	Operating Leases		Finance Leases		Total
2019 ^(a)	$	17,074	$	205	$	17,279
2020	32,054		217		32,271
2021	25,738		103		25,841
2022	23,231		37		23,268
2023	21,406		6		21,412
Thereafter	82,560		—		82,560
Total lease payments	$	202,063	$	568	$	202,631
Less: interest	52,708		41		52,749
Present value of lease liabilities	$	149,355	$	527	$	149,882

As of December 31, 2018, future minimum lease payments, as defined under the previous lease accounting guidance of ASC Topic 840, under non-cancelable operating leases for the following five fiscal years and thereafter were as follows:



Year Ending December 31:	Future Minimum Rent Under Operating Leases		Future Minimum Sublease Income			Future Minimum Commitments Under Failed Sale Leaseback Agreement		Net Commitments
2019	$	34,356	$	(1,719	)	$	1,193	$	33,830
2020	29,242		(1,719		)	1,557		29,080
2021	22,717					1,603		24,320
2022	19,885					1,650		21,535
2023	16,280					1,701		17,981
Thereafter	45,959					2,052		48,011
	$	168,439	$	(3,438	)	$	9,756	$	174,757

Future minimum payments related to the Company's failed sale-leaseback as of June 30, 2019 were as follows (dollars in thousands):



	Total
2019 ^(a)	$	597
2020	1,557
2021	1,603
2022	1,650
2023	1,701
Thereafter	2,051
Total lease payments	$	9,159

(a) Excludes the six months ended June 30, 2019.

Future minimum payments to be received under the Company's lessor arrangements as of June 30, 2019 were as follows (dollars in thousands):



	Operating Leases
2019 ^(a)	$	1,532
2020	3,259
2021	2,603
2022	2,296
2023	1,770
Thereafter	2,893
Total lease receivables	$	14,353

(a) Excludes the six months ended June 30, 2019.

14. Commitments and Contingencies

Future Commitments

The radio broadcast industry’s principal ratings service is Nielsen Audio (“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 ~~$175.7~~$126.4 million, as of June 30, ~~2018,~~2019, and is expected to be paid in accordance with the agreements through December 2021.

The Company engages Katz Media Group, Inc. (“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. As of June 30, ~~2018,~~2019, the Company believes that it will meet all such material minimum obligations.

On February 1, 2018 and March 9, 2018, respectively, the Company and Merlin Media, LLC (“Merlin”) 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 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 waiting for additional information necessary to finalize the determination of fair value. Thus, the preliminary measurements of fair value reflected are subject to change. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than December 31, 2018.

Legal Proceedings

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. On October 11, 2018, President Trump signed the Orrin G. Hatch-Bob Goodlatte Music Modernization Act into law, which, among other things, provides new federal rights going forward for owners of pre-1972 Recordings. The question of whether public performance rights ~~exist~~existed for Pre-1972 recordings under state law prior to the enactment of the new Music Modernization Act is still being litigated in the Ninth Circuit as a result of a case filed in California. Cumulus is not a party to that case, and the Company is not yet able to determine what effect 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 consolidated financial position, results of operations or cash flows.

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, the Cumulus Radio Station Group and Westwood One. Cumulus Radio Station Group revenue is derived primarily from the sale of broadcasting time on our owned or operated stations to local, regional, and national advertisers. Westwood One revenue is generated primarily through network ~~advertising.~~advertising on our owned or operated stations and on its approximately 8,000 affiliate stations. The Company also reports information for Corporate and Other. Corporate includes overall executive, administrative and support functions for both of the Company’s reportable segments, including accounting, finance, legal, human resources, information technology, ~~functions,~~ and ~~programming.~~programming functions.

At the end of the second quarter of 2019, the Company had internal discussions regarding changes to its organization structure and approach to operating the business. As a result, the Company is in the process of reassessing its reportable segments. The assessment and identification of reportable segment(s) will be based on management’s organization and view of the Company’s business when making operating decisions and assessing performance.

The Company presents segment adjusted EBITDA (“Adjusted 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 its non-operating expenses including debt service and acquisitions. In addition, Adjusted EBITDA is a key metric for purposes of calculating and determining compliance with certain covenants contained in the Company’s Credit Agreement.

exchange, sale, or 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, divestitures, restructuring costs, reorganization items and non-cash impairments of 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 (in thousands):

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 June 30, 2019 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	193,162	$	85,764	$	747	$	279,673

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



	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



	Six Months Ended June 30, 2019 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other		Consolidated
Net revenue	$	359,703	$	186,123	$	1,343	$	547,169



	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


	Successor Company			Predecessor Company						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,			Three Months Ended June 30,			Period from June 4, 2018 through June 30,			Period from April 1, 2018 through June 3,
	2018			2018			2017			2019			2018			2018
Adjusted EBITDA by segment
Cumulus Radio Station Group	$	20,860		$	76,009		$	98,911		$	52,222		$	20,860		$	39,824
Westwood One	7,690			19,210			25,911			17,866			7,690			6,554
Segment Adjusted EBITDA	28,550			95,219			124,822			70,088			28,550			46,378
Adjustments to reconcile to GAAP measure
Corporate and other expense	(2,435		)	(14,707		)	(18,689		)	(8,269		)	(2,435		)	(6,137		)
Income tax (expense) benefit	(2,606		)	176,859			(1,208		)	(17,026		)	(2,606		)	176,741
Non-operating expense, including net interest expense	(6,152		)	(483		)	(68,363		)	(21,217		)	(6,152		)	(387		)
Local marketing agreement fees	(358		)	(1,809		)	(5,420		)	(438		)	(358		)	(702		)
Depreciation and amortization	(4,379		)	(22,046		)	(32,402		)	(13,545		)	(4,379		)	(10,065		)
Stock-based compensation expense	(652		)	(231		)	(1,068		)	(1,106		)	(652		)	(65		)
(Loss) gain on sale or disposal of assets or stations	—			(158		)	2,502
Gain (loss) on sale or disposal of assets or stations										47,750			—			(147		)
Reorganization items, net	—			466,201			—			—			—			496,368
Acquisition-related and restructuring costs	(6,941		)	(2,455		)	(1,618		)
Restructuring costs										(13,024		)	(6,941		)	(734		)
Franchise and state taxes	(47		)	(234		)	(279		)	(352		)	(47		)	(93		)
Consolidated GAAP net income (loss)	$	4,980		$	696,156		$	(1,723	)
Consolidated GAAP net income										$	42,861		$	4,980		$	701,157



	Successor Company						Predecessor Company
	Six Months Ended June 30,			Period from June 4, 2018 through June 30,			Period from January 1, 2018 through June 3,
	2019			2018			2018
Adjusted EBITDA by segment
Cumulus Radio Station Group	$	86,613		$	20,860		$	76,009
Westwood One	33,816			7,690			19,210
Segment Adjusted EBITDA	120,429			28,550			95,219
Adjustments to reconcile to GAAP measure
Corporate and other expense	(16,806		)	(2,435		)	(14,707		)
Income tax (expense) benefit	(16,841		)	(2,606		)	176,859
Non-operating expense, including net interest expense	(43,397		)	(6,152		)	(483		)
Local marketing agreement fees	(1,481		)	(358		)	(1,809		)
Depreciation and amortization	(28,135		)	(4,379		)	(22,046		)
Stock-based compensation expense	(2,314		)	(652		)	(231		)
Gain (loss) on sale or disposal of assets or stations	47,724			—			(158		)
Reorganization items, net	—			—			466,201
Gain on early extinguishment of debt	381			—			—
Restructuring costs	(15,801		)	(6,941		)	(2,455		)
Franchise and state taxes	(447		)	(47		)	(234		)
Consolidated GAAP net income	$	43,312		$	4,980		$	696,156

16. Subsequent Event

On ~~August 17, 2018, Holdings entered into~~July 15, 2019, the Company completed its previously announced sale of KLOS-FM in Los Angeles, CA to Meruelo Media for $43.0 million in cash ("KLOS Sale"). Prior to the completion of the sale, Meruelo Media began programming KLOS-FM under a ~~$50.0 million revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit~~Local Marketing 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.on April 16, 2019.

~~The Revolving Credit Facility matures on August 17, 2023. Availability under~~On July 22, 2019, the ~~Revolving Credit Facility is tied to~~Company completed 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$50 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~~voluntary debt prepayment on the ~~average daily excess availability under~~Term Loan. The debt prepayment was funded by the ~~Revolving Credit Facility or~~net proceeds from the ~~Alternative Base Rate (as defined below) plus a percentage spread (ranging~~KLOS Sale and cash on hand generated 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.operations.

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.

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

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



l	General overview, including our emergence from Chapter 11;
l	Results of operations; and
l	Liquidity and 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 and notes thereto ~~beginning on page 9~~included elsewhere in this Form 10-Q, as well as our audited Consolidated Financial Statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 filed with the SEC. This discussion, as well as various other sections of this Form 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. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors. For more information, see “Cautionary Statements Regarding Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 filed with the SEC.

Emergence from Chapter ~~11; Liquidity~~11

See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 1 — Nature of Business, Interim Financial Data and ~~Going Concern Considerations~~

~~As previously disclosed, on November 29, 2017 (the “Petition Date”)~~Basis of Presentation", ~~CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.),~~for a ~~Delaware corporation (“Old Cumulus”) and certain~~discussion 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 emergedour Emergence 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 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.

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 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 (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the pre-petition liabilities and allowed claims. ASC 852 requires that fresh start accounting be applied when the Bankruptcy Court enters the 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 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~~Non-GAAP 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 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.

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 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.

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 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 generated cash from operating activities of $16.9 million for the six month period ended June 30, 2017.

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 remains subject to factors such as fluctuations in 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. 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 results of operations, financial condition or liquidity.

Measure

From time to time we have evaluated, and expect that we will continue to evaluate, opportunities to obtain additional 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, orutilize certain financial measures that are not ~~a part of,~~prepared or ~~do not complement, our strategic operations, subject~~calculated in accordance with GAAP to ~~market and other conditions in existence at that time.~~

As previously disclosed, based on the results of required annual or interim impairment testing in certain recent historical periods, the 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 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 liquidity. Any future impairment charges could materially adversely affectassess our financial ~~results in the periods in which they are recorded.~~

~~Non-GAAP Financial Measure~~

performance and profitability. Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted 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.~~segments. 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 the funding of our non-operating expenses including debt service and acquisitions. In addition, consolidated Adjusted EBITDA is a key metric for purposes of calculating and determining our compliance with certain covenants contained in our Credit Agreement.

In determining Adjusted EBITDA, the Company excludes from 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 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, divestitures, restructuring costs, reorganization items and non-cash impairments of assets, if any.

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~~our 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.

Consolidated Results of Operations

Analysis of Consolidated Results of Operations

The ~~following selected data from our unaudited Condensed Consolidated Statements of Operations should be referred to while reading the results of operations discussion that follows (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
STATEMENT OF OPERATIONS DATA:
Net revenue $ 95,004
$ 190,245
$ 290,531
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) 10,125
6,682
10,473
Loss on sale or disposal of assets or stations —
147
104
Operating income 13,738
28,435
47,326
Reorganization items, net —
496,368
—
Interest expense (6,176 ) (132 ) (34,344 )
Interest income 4
21
35
Other income (expense), net 20
(276 ) (111 )
Income before income taxes 7,586
524,416
12,906
Income tax (expense) benefit (2,606 ) 176,741
(7,234 )
Net income $ 4,980
$ 701,157
$ 5,672
KEY FINANCIAL METRIC:
Adjusted EBITDA $ 26,115
$ 40,241
$ 67,400

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.~~our emergence from Chapter 11. We believe that ~~certain~~discussing the results of ~~our consolidated operating results for each of the periods~~operations and cash flows from January 1, 2018 through June 3, 2018 (“("2018 Predecessor ~~Period”~~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~~current year Successor Company ~~for each of the~~ three and six month periods ended June 30, ~~2018~~2019 and is useful when analyzing certain financial performance measures. For items that are not comparable, we have included additional analysis to supplement the discussion.



	Successor Company						Predecessor Company			Non-GAAP
	Three Months Ended June 30, 2019			Period from June 4, 2018 through June 30, 2018			Period from April 1, 2018 through June 3, 2018			Combined Period Three Months Ended June 30, 2018			2019 vs 2018 Change
													$			%
STATEMENT OF OPERATIONS DATA:
Net revenue	$	279,673		$	95,004		$	190,245		$	285,249		$	(5,576	)	(2.0	)%
Content costs	93,844			28,970			61,019			89,989			3,855			4.3	%
Selling, general and administrative expenses	115,817			37,434			83,195			120,629			(4,812		)	(4.0	)%
Depreciation and amortization	13,545			4,379			10,065			14,444			(899		)	(6.2	)%
Local marketing agreement fees	438			358			702			1,060			(622		)	(58.7	)%
Corporate expenses (including stock-based compensation expense and restructuring costs)	22,675			10,125			6,682			16,807			5,868			34.9	%
(Gain) loss on sale or disposal of assets or stations	(47,750		)	—			147			147			(47,897		)	N/A
Operating income	81,104			13,738			28,435			42,173			38,931			92.3	%
Reorganization items, net	—			—			496,368			496,368			(496,368		)	(100.0	)%
Interest expense	(21,191		)	(6,176		)	(132		)	(6,308		)	(14,883		)	N/A
Interest income	8			4			21			25			(17		)	(68.0	)%
Other (expense) income, net	(34		)	20			(276		)	(256		)	222			(86.7	)%
Income before income taxes	59,887			7,586			524,416			532,002			(472,115		)	(88.7	)%
Income tax (expense) benefit	(17,026		)	(2,606		)	176,741			174,135			(191,161		)	(109.8	)%
Net income	$	42,861		$	4,980		$	701,157		$	706,137		$	(663,276	)	(93.9	)%
KEY FINANCIAL METRIC:
Adjusted EBITDA	$	61,819		$	26,115		$	40,241		$	66,356		$	(4,537	)	(6.8	)%



	Successor Company						Predecessor Company			Non-GAAP
	Six Months Ended June 30, 2019			Period from June 4, 2018 through June 30, 2018			Period from January 1, 2018 through June 3, 2018			Combined Period Six Months Ended June 30, 2018			2019 vs 2018 Change
													$			%
STATEMENT OF OPERATIONS DATA:
Net revenue	$	547,169		$	95,004		$	453,924		$	548,928		$	(1,759	)	(0.3	)%
Content costs	197,596			28,970			163,885			192,855			4,741			2.5	%
Selling, general and administrative expenses	229,320			37,434			195,278			232,712			(3,392		)	(1.5	)%
Depreciation and amortization	28,135			4,379			22,046			26,425			1,710			6.5	%
Local marketing agreement fees	1,481			358			1,809			2,167			(686		)	(31.7	)%
Corporate expenses (including stock-based compensation expense and restructuring costs)	35,192			10,125			17,169			27,294			7,898			28.9	%
(Gain) loss on sale or disposal of assets or stations	(47,724		)	—			158			158			(47,882		)	N/A
Operating income	103,169			13,738			53,579			67,317			35,852			53.3	%
Reorganization items, net	—			—			466,201			466,201			(466,201		)	N/A
Interest expense	(43,347		)	(6,176		)	(260		)	(6,436		)	(36,911		)	573.5	%
Interest income	12			4			50			54			(42		)	(77.8	)%
Gain on early extinguishment of debt	381			—			—			—			381			N/A
Other (expense) income, net	(62		)	20			(273		)	(253		)	191			(75.5	)%
Income before income taxes	60,153			7,586			519,297			526,883			(466,730		)	(88.6	)%
Income tax (expense) benefit	(16,841		)	(2,606		)	176,859			174,253			(191,094		)	(109.7	)%
Net income	$	43,312		$	4,980		$	696,156		$	701,136		$	(657,824	)	(93.8	)%
KEY FINANCIAL METRIC:
Adjusted EBITDA	$	103,623		$	26,115		$	80,512		$	106,627		$	(3,004	)	(2.8	)%

Successor ~~Period and 2018 Second Quarter Predecessor Period Compared to the Predecessor~~ Company Three Months Ended June 30, ~~2017~~2019 compared to the Combined 2018 Second Quarter Predecessor Period and Successor Period.

Net Revenue

Net revenue for the Successor ~~Period and the 2018 Second Quarter Predecessor Period~~Company three months ended June 30, 2019 compared to net revenue for the Combined 2018 Second Quarter Predecessor ~~Company three months ended June 30, 2017~~Period and Successor Period decreased primarily as a result of a ~~decline~~decrease in local broadcast advertising revenue ~~within~~in our radio markets and lost revenue associated with the loss of approximately $0.7 million in revenue from United States Traffic Networks ("USTN"), partially offset by increases in digital advertising revenue, national advertising revenue and cyclical political revenue. For a discussion of net revenue by segment and a comparison by segment ofstation dispositions that occurred during the Successor ~~Period and the 2018 Second Quarter Predecessor Period to the Predecessor~~ Company three months ended June 30, ~~2017, see the discussion under "Segment Results of Operations."~~2019, partially offset by increases in national broadcast advertising revenue and digital revenue.

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 June 30, ~~2017 decreased~~2019 compared to content costs for the Combined 2018 Second Quarter Predecessor Period and Successor Period increased primarily as a result of higher digital costs associated with higher digital revenue during the ~~termination or renegotiation of certain contractual agreements,~~comparative periods. The increase in ~~some cases in connection with the filing of the Chapter 11 Cases. The remainder of the decrease~~digital costs was ~~related to reductions in other programming-related expenses such as music license fees as a result of lower revenue, and~~partially offset by a decrease in employee ~~costs.~~costs and the impact of the station dispositions that occurred during the Successor Company three months ended June 30, 2019.

Selling, General & 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 June 30, ~~2017 increased~~2019 compared to Selling, general and administrative expenses for the Combined 2018 Second Quarter Predecessor Period and Successor Period decreased primarily as a result of a decrease in bad debt expense. During the Combined 2018 Second Quarter Predecessor Period and Successor Period the Company recognized a $4.1 million bad debt 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.United States Traffic Networks (“USTN”).

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 June 30, ~~2017. During~~2019 is not comparable to that of the Combined 2018 Second Quarter Predecessor Period ~~amortization expense decreased based on the amortization methodology used.~~and Successor Period. During the Successor ~~Period,~~Company three months ended June 30, 2019, depreciation and amortization expense ~~increased~~decreased because of ~~the higher valuation~~our application of ~~fixed assets in connection with the Company’s~~ fresh start accounting ~~application.~~in June 2018 where our fixed assets and intangible assets were adjusted to fair value, resulting in higher asset values.

Local Marketing Agreement Fees

Local marketing agreements ("LMA") are those agreements ~~whereby the Company agrees to operate~~under which we program a radio station on behalf of another party. ~~Our local marketing agreement~~LMA fees ~~are not comparable between~~for the Successor Company three months ended June 30, 2019 compared to LMA fees for the Combined 2018 Second Quarter Predecessor Period and ~~Predecessor periods. During the quarter ended March 31, 2018,~~Successor Period decreased because the Company and Merlin Media, LLC ~~("Merlin"~~(“Merlin”) amended their local marketing agreement under which the Company programmed two FM radio stations owned by Merlin. The Company ~~then~~ ceased programming one of the stations ~~("WLUP"~~(“WLUP”) on March 9, ~~2018. On~~2018 and 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 Compensation Expense ~~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.~~costs and stock-based compensation expense. 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 June 30, ~~2017~~2019 compared to Corporate expenses for the Combined 2018 Second Quarter Predecessor Period and Successor Period increased primarily as a result of higher restructuring ~~expenses after the Effective Date related to the Company's emergence from chapter 11, and additional professional fees. These increases were partially offset by lower corporate employee~~ costs ~~and lower rent.~~

~~Reorganization Items, Net~~

~~During the 2018 Second Quarter Predecessor Period, we recorded costs~~incurred related to our ~~Chapter 11 Cases. Reorganization items incurred as~~station disposal and swap transactions.

(Gain) Loss on Sale or Disposal of Assets or Stations

The Gain on sale or disposal of assets or stations for the Successor Company three months ended June 30, 2019 of $47.8 million included a ~~result~~$47.6 million gain on the EMF Sale. See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 3 — Acquisitions and Dispositions", for further discussion of the ~~Chapter 11 Cases are presented separately in the accompanying Condensed Consolidated Statement of Operations and were as follows (dollars in thousands):~~EMF Sale.

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 will be settled in accordance with the Plan.~~

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

~~(c) Legal, financial advisory and other professional costs directly associated with the reorganization process.~~

~~(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 Company three months ended June 30, 2019 is not comparable to that of the Combined 2018 Second Quarter Predecessor Period and ~~for~~Successor Period as we did not pay certain interest expenses during the 2018 Second Quarter Predecessor Period. During 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 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 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~~in lieu of interest payments. In accordance with ASC 852, we recognized the adequate protection payments as ~~a reduction of~~reductions in the principal balance ~~outstanding. Interest~~of the Predecessor Term Loan. Also, we did not make any interest payments ~~were not recorded or paid~~ on the 7.75% Senior Notes ~~while~~during the ~~Company was in Chapter 11. During the three months ended June 30, 2017, the Company recorded and paid interest expense in accordance with the provisions of the then outstanding debt agreements.~~2018 Second Quarter Predecessor Period.

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


	Successor Company		Predecessor Company				Successor Company				Predecessor Company		Non-GAAP
	Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018		Three Months Ended June 30, 2017		Three Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018		Combined Period Three Months Ended June 30, 2018		$ Change
Bank borrowings – Term Loan	$	6,140	$	—	$	—	$	20,365	$	6,112	$	—	$	6,112	$	14,253
7.75% Senior Notes	—		—		11,819
Bank borrowings – Predecessor Term Loan	—		—		19,526
6.75% Senior Notes							469		—		—		—		469
Other, including debt issue cost amortization	36		132		2,999		357		64		132		196		161
Interest expense	$	6,176	$	132	$	34,344	$	21,191	$	6,176	$	132	$	6,308	$	14,883

Income Tax Expense ~~(Benefit)~~

~~The Company’s~~For the Successor Company three months ended June 30, 2019 we recorded income tax ~~provision (benefit) and~~expense of $17.0 million on pre-tax book income of $59.9 million, resulting in an effective tax rate ~~were as follows:~~

for the Successor Company three months ended June 30, 2019 of approximately 28.3%. For the Successor Period, the Company recorded income tax expense of $2.6 million on pre-tax book income of $7.6 million, resulting in an effective tax rate for the Successor Period of approximately 34.4%. For the 2018 Second Quarter Predecessor Period, the Company recorded income tax benefit of $176.7 million on pre-tax book income of $524.4 million, resulting in an effective tax rate for the 2018 Second Quarter Predecessor Period of approximately (33.7)%.

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 21.0% for the Successor Company three months ended June 30, 2019 primarily related to state and local income taxes, the effect of certain statutory non-deductible expenses, excess tax benefits related to share-based compensation awards, and the tax effect of changes in uncertain tax positions.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the Successor Period was attributable to 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 effective tax rate and the federal statutory rate of 21.0% for the 2018 Second Quarter Predecessor Period ~~relates~~primarily related to the income tax exclusion of cancellation of indebtedness income, ~~("CODI") arising from 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. The difference between the effective tax rate and the federal statutory rate of 35% for the 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 expenses, changes in valuation allowances, 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 and recognizerecognizes the benefits of deferred tax assets only as ~~the reassessment~~its assessment 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").

The Company reviews the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize existing deferred tax assets. As of June 30, ~~2018,~~2019, the Company has not recorded a valuation allowance since the Company continues to ~~maintain a full valuation allowance~~believe, on ~~loss carryforwards for which~~ the ~~Company does not believe it will be able to~~basis of its evaluation, that its deferred tax assets meet the more likely than not recognition standard for recovery. The Company will continue to monitor the valuation of deferred tax assets, which requires judgment in assessing the likely future tax consequences of events that ~~have been~~are recognized in the ~~Company’s~~Company's financial statements or tax returns as well as judgment in projecting 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 June 30, ~~2017~~2019 compared to the Combined 2018 Second Quarter Predecessor Period and Successor Period decreased. For a discussion of Adjusted EBITDA by segment and a comparison by segment, ~~of the Successor Period and the 2018 Second Quarter Predecessor Period to the Predecessor Company three months ended June 30, 2017,~~ see the discussion under "Segment Results of Operations."

Successor Company Six Months Ended June 30, 2019 compared to the Combined 2018PredecessorPeriod and Successor Period.

Net Revenue

Net revenue for the Successor Company six months ended June 30, 2019 compared to net revenue for the Combined 2018 Predecessor Period and Successor Period decreased primarily as a result of a decrease in local broadcast advertising revenue in our radio markets and lost revenue associated with the station dispositions that occurred during the six months ended June 30, 2019, partially offset by increases in national broadcast advertising revenue and digital revenue.

Content Costs

Content costs for the Successor Company six months ended June 30, 2019 compared to content for the Combined 2018 Predecessor Period and Successor Period increased primarily as a result of higher digital costs associated with higher digital revenue during the comparative periods. The increase in digital costs was partially offset a decrease in employee costs and the impact of the station dispositions that occurred during the three months ended June 30, 2019.

Selling, General & Administrative Expenses

Selling, general and administrative expenses for the Successor Company six months ended June 30, 2019 compared to Selling, general and administrative expenses for the Combined 2018 Predecessor Period and Successor Period decreased primarily as a result of a decrease in bad debt expense partially offset by an increase in commissions expense attributable to the implementation of the ASC 606 - Revenue from Contracts with Customers in the Combined 2018 Predecessor Period and Successor Period. During the Combined 2018 Predecessor Period and Successor Period the Company recognized a $4.1 million bad debt expense related to receivables from USTN.

Depreciation and Amortization

Depreciation and amortization for the Successor Company six months ended June 30, 2019 is not comparable to that of the Combined 2018 Predecessor Period and Successor Period. During the Successor Company six months ended June 30, 2019, depreciation and amortization expense increased because of our application of fresh start accounting in June 2018 where our fixed assets and intangible assets were adjusted to fair value, resulting in higher asset values.

Local Marketing Agreement Fees

LMA fees for the Successor Company six months ended June 30, 2019 compared to LMA fees for the Combined 2018 Predecessor Period and Successor Period decreased because the Company and Merlin Media, LLC (“Merlin”) amended their local marketing 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 and on June 15, 2018, the Company purchased the other station (“WKQX”).

Corporate Expenses, Including Stock-based Compensation Expense and Restructuring Costs

Corporate expenses for the Successor Company six months ended June 30, 2019 compared to Corporate expenses for the Combined 2018 Predecessor Period and Successor Period increased primarily as a result of higher restructuring costs incurred related to our station disposal and swap transactions partially offset by a decrease in professional fees and corporate employee costs.

(Gain) Loss on Sale or Disposal of Assets or Stations

The Gain on sale or disposal of assets or stations for the Successor Company six months ended June 30, 2019 of $47.7 million included a $47.6 million gain on the EMF Sale. See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 3 — Acquisitions and Dispositions", for further discussion of the EMF Sale.

Interest Expense

Total interest expense for the Successor Company six months ended June 30, 2019 is not comparable to that of the 2018 Predecessor Period and Successor Period as we did not pay certain interest expenses during the 2018 Predecessor Period. During the 2018 Predecessor Period we made adequate protection payments on the Predecessor Term Loan in lieu of interest payments. In accordance with ASC 852, we recognized the adequate protection payments as reductions in the principal balance of the Predecessor Term Loan. Also, we did not make any interest payments on the 7.75% Senior Notes during the 2018 Predecessor Period.

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



	Successor Company				Predecessor Company		Non-GAAP
	Six Months Ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018		Combined Period Six Months Ended June 30, 2018		$ Change
Bank borrowings – Term Loan	$	42,083	$	6,112	$	—	$	6,112	$	35,971
6.75% Senior Notes	469		—		—		—		469
Other, including debt issue cost amortization	795		64		260		324		471
Interest expense	$	43,347	$	6,176	$	260	$	6,436	$	36,911

Income Tax Expense

For the Successor Company six months ended June 30, 2019 we recorded income tax expense of $16.8 million on pre-tax book income of $60.2 million, resulting in an effective tax rate for the Successor Company six months ended June 30, 2019 of approximately 27.9%. For the Successor Period, the Company recorded income tax expense of $2.6 million on pre-tax book income of $7.6 million, resulting in an effective tax rate for the Successor Period of approximately 34.4%. For the 2018 Predecessor Period, the Company recorded an income tax benefit of $176.9 million on pre-tax book income of $519.3 million, resulting in an effective tax rate for the 2018 Predecessor Period of approximately (34.1%).

The difference between the effective tax rate and the federal statutory rate of 21.0% for the Successor Company six months ended June 30, 2019 primarily related to state and local income taxes, the effect of certain statutory non-deductible expenses, excess tax benefits related to share-based compensation awards, and the tax effect of changes in uncertain tax positions.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the 2018 Predecessor Period primarily related to the income tax exclusion of cancellation of indebtedness income, 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.

Adjusted EBITDA

As a result of the factors described above, Adjusted EBITDA for the Successor Company six months ended June 30, 2019 compared to the Combined 2018 Predecessor Period and Successor Period decreased. For a discussion of Adjusted EBITDA by segment and a comparison by segment, see the discussion under "Segment Results of Operations."

Reconciliation of Non-GAAP Financial Measure

The following ~~table reconciles~~tables reconcile 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 of Operations (dollars in thousands):


	Successor Company		Predecessor Company					Successor Company					Predecessor Company			Non-GAAP
	Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018			Three Months Ended June 30, 2017		Three Months Ended June 30, 2019			Period from June 4, 2018 through June 30, 2018		Period from April 1, 2018 through June 3, 2018			Combined Period Three Months Ended June 30, 2018
GAAP net income	$	4,980	$	701,157		$	5,672	$	42,861		$	4,980	$	701,157		$	706,137
Income tax expense (benefit)	2,606		(176,741		)	7,234		17,026			2,606		(176,741		)	(174,135		)
Non-operating expenses, including net interest expense	6,152		387			34,420		21,217			6,152		387			6,539
Local marketing agreement fees	358		702			2,713		438			358		702			1,060
Depreciation and amortization	4,379		10,065			16,120		13,545			4,379		10,065			14,444
Stock-based compensation expense	652		65			530		1,106			652		65			717
Gain on sale of assets or stations	—		147			104
(Gain) loss on sale of assets or stations								(47,750		)	—		147			147
Reorganization items, net	—		(496,368		)	—		—			—		(496,368		)	(496,368		)
Acquisition-related and restructuring costs	6,941		734			467
Restructuring costs								13,024			6,941		734			7,675
Franchise and state taxes	47		93			140		352			47		93			140
Adjusted EBITDA	$	26,115	$	40,241		$	67,400	$	61,819		$	26,115	$	40,241		$	66,356

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

~~Net Revenue~~

Net revenue for the Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended June 30, 2017 decreased primarily as a result of a decline in local broadcast advertising revenue in our radio markets, partially offset by increases in national and digital advertising revenue as well as cyclical political advertising revenue. For a discussion of net revenue by segment and a comparison by segment of the Successor Period and 2018 Predecessor Period to the Predecessor Company six months ended June 30, 2017, see the discussion under "Segment Results of Operations."

~~Content Costs~~

Content costs for the Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended June 30, 2017 decreased primarily as a result of the termination or renegotiation of certain contractual agreements, in some cases in connection with the filing of the Chapter 11 Cases. The remainder of the decrease was related to reductions in other programming-related expenses as a result of lower revenue, and a decrease in employee costs.

~~Selling, General & Administrative Expenses~~

Selling, general and administrative expenses for the Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended June 30, 2017 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 lower employee costs associated with lower revenue as well as the implementation of ASC 606, lower ratings service fees, and lower legal fees.

~~Depreciation and Amortization~~

Depreciation and amortization for the Successor Period and 2018 Predecessor Period are not directly comparable to depreciation and amortization for the Predecessor Company six months ended June 30, 2017. During the 2018 Predecessor Period amortization expense decreased based on amortization methodology 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~~

Our local marketing agreement fees are not comparable between the Successor and Predecessor periods. During the quarter ended March 31, 2018, the Company and Merlin amended their local marketing agreement under which the 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 Compensation Expense and Acquisition-related and Restructuring Costs~~

Corporate expenses, including stock-based compensation expense, for the Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended June 30, 2017 increased. This increase was primarily the result of an increase in professional fees after the Effective Date related to the Company's emergence from Chapter 11, partially offset by a decrease in corporate employee costs.

~~Reorganization Items, Net~~

During the Successor Period and 2018 Predecessor Period, we recorded costs related to our 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 fresh start accounting.~~

~~(c) Legal, financial advisory and other professional costs directly associated with the reorganization process.~~

~~(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.~~



	Successor Company					Predecessor Company			Non-GAAP
	Six Months Ended June 30, 2019			Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018			Combined Period Six Months Ended June 30, 2018
GAAP net income	$	43,312		$	4,980	$	696,156		$	701,136
Income tax expense (benefit)	16,841			2,606		(176,859		)	(174,253		)
Non-operating expenses, including net interest expense	43,397			6,152		483			6,635
Local marketing agreement fees	1,481			358		1,809			2,167
Depreciation and amortization	28,135			4,379		22,046			26,425
Stock-based compensation expense	2,314			652		231			883
(Gain) loss on sale of assets or stations	(47,724		)	—		158			158
Gain on early extinguishment of debt	(381		)	—		—			—
Reorganization items, net	—			—		(466,201		)	(466,201		)
Restructuring costs	15,801			6,941		2,455			9,396
Franchise and state taxes	447			47		$	234		$	281
Adjusted EBITDA	$	103,623		$	26,115	$	80,512		$	106,627

~~Interest Expense~~

Total interest expense for the 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 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, the Company recorded and paid interest expense in accordance with the provisions of the then outstanding debt agreements.

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

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
Bank borrowings – Term Loan $ 6,112
$ —
$ —
7.75% Senior Notes —
—
23,637
Bank borrowings – Predecessor Term Loan —
—
38,760
Other, including debt issue cost amortization 64
260
6,010
Interest expense $ 6,176
$ 260
$ 68,407

~~Income Tax Expense (Benefit)~~

~~The Company’s income tax provision (benefit) and effective tax rate 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 21.0% for the 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 impact of non-deductible reorganization costs and other non-deductible expenses and changes to the valuation allowance. The difference between the effective tax rate and the federal statutory rate of 35% for the Predecessor Company six month period ended June 30, 2017 was primarily attributable to stock option terminations and 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 tax purposes results in a taxable sale of assets and stock, whereby the Company will receive 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 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 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 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 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 2018 Predecessor Period compared to the Predecessor Company six months ended June 30, 2017 increased. For a discussion of Adjusted EBITDA by segment and a comparison by segment of the Successor Period and 2018 Predecessor Period to the Predecessor Company six months ended June 30, 2017, see the discussion under "Segment Results of Operations."

~~Reconciliation of Non-GAAP Financial Measure~~

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

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 reconciliation of segment Adjusted EBITDA to net income (loss) is presented in Note 15, "Segment Data" of the notes to the 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 June 30, 2019 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	193,162		$	85,764		$	747		$	279,673
% of total revenue	69.1		%	30.6		%	0.3		%	100.0		%
$ change from three months ended June 30, 2018	$	(10,288	)	$	4,484		$	228		$	(5,576	)
% change from three months ended June 30, 2018	(5.1		)%	5.5		%	43.9		%	(2.0		)%

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



	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
% of total revenue	72.0		%	27.7		%	0.3		%	100.0		%


	Three Months Ended June 30, 2017 (Predecessor Company)												Period from April 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated			Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	208,596		$	81,234		$	701		$	290,531		$	135,093		$	54,924		$	228		$	190,245
% of total revenue	71.8		%	28.0		%	0.2		%	100.0		%	71.0		%	28.9		%	0.1		%	100.0		%



	Three Months Ended June 30, 2018 (Non-GAAP Combined Predecessor and Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	203,450		$	81,280		$	519		$	285,249
% of total revenue	71.3		%	28.5		%	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 June 30, ~~2017 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~~2019 compared to the three months ended June 30, 2017. The decrease in revenue at the Cumulus Radio Station Group was primarily driven by decreases in local advertising revenue and the loss of revenue from WLUP. Revenue at Westwood One was negatively impacted by the loss of 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~~Combined 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 increases at the Cumulus Radio Station Group~~ and ~~Corporate and Other segments, respectively. Adjusted EBITDA at Westwood One~~Successor Period decreased primarily as a result of ~~$4.8 million in bad debt expense and lost revenue associated with USTN. Adjusted EBITDA at the Cumulus Radio Group and Corporate and Other increased as a result of lower expenses.~~

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
% of total revenue 68.9 % 30.9 % 0.2 % 100.0 %

~~Net revenue for the Successor Period and 2018 Predecessor Period compared to the Predecessor Company six months ended June 30, 2017 decreased. The decrease resulted from~~ a decline in ~~revenues~~revenue at the Cumulus Radio Station Group partially offset by an increase in revenue at Westwood ~~One, while~~One. Corporate and Other revenue was essentially flat. The decrease in revenue at the Cumulus Radio Station Group was primarily driven by ~~decreases~~a decrease in local advertising revenue and lost revenue associated with the station dispositions that occurred during the Successor Company three months ended June 30, 2019. The increase in revenue at Westwood One was primarily driven by an increase in broadcast and digital revenue.



	Three Months Ended June 30, 2019 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Adjusted EBITDA	$	52,222		$	17,866		$	(8,269	)	$	61,819
$ change from three months June 30, 2018	$	(8,462	)	$	3,622		$	303		$	(4,537	)
% change from three months June 30, 2018	(13.9		)%	25.4		%	3.5		%	(6.8		)%



	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, 2018 (Non-GAAP Combined Predecessor and Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	60,684	$	14,244	$	(8,572	)	$	66,356

Adjusted EBITDA for the Successor Company three months ended June 30, 2019 compared to the Combined 2018 Second Quarter Predecessor Period and Successor Period decreased because Adjusted EBITDA decreased at the Cumulus Radio Station Group partially offset by increases at the Westwood One and Corporate and Other segments, respectively. Adjusted EBITDA at the Cumulus Radio Station Group decreased primarily as a result of the decrease in revenue described above. Adjusted EBITDA at Westwood One and Corporate and Other increased primarily as a result of higher revenue and lower bad debt expense, partially offset by the impact of the station dispositions at Westwood One and lower expenses at Corporate and Other. Adjusted EBITDA at Westwood One in the Combined 2018 Second Quarter Predecessor Period and Successor Period included $4.8 million in bad debt expense and lost revenue related to USTN.



	Six Months Ended June 30, 2019 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	359,703		$	186,123		$	1,343		$	547,169
% of total revenue	65.7		%	34.0		%	0.3		%	100.0		%
$ change from six months ended June 30, 2018	$	(11,971	)	$	10,052		$	160		$	(1,759	)
% change from six months ended June 30, 2018	(3.2		)%	5.7		%	13.5		%	(0.3		)%



	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
% of total revenue	72.0		%	27.7		%	0.3		%	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
% of total revenue	66.8		%	33.0		%	0.2		%	100.0		%



	Six Months Ended June 30, 2018 (Non-GAAP Combined Predecessor and Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	371,674		$	176,071		$	1,183		$	548,928
% of total revenue	67.7		%	32.1		%	0.2		%	100.0		%

Net revenue for the Successor Company six months ended June 30, 2019 compared to the 2018 Predecessor Period and Successor Period decreased primarily as a result of a decline in revenue at the Cumulus Radio Station Group partially offset by an increase in revenue at Westwood One. Corporate and Other revenue was essentially flat. The decrease in revenue at the Cumulus Radio Station Group was primarily driven by a decrease in local advertising revenue and lost revenue associated with the station dispositions that occurred during the three months ended June 30, 2019 partially offset by increases in national and digital revenue. The increase in revenue at Westwood One was primarily driven by ~~increases~~an increase in 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



	Six Months Ended June 30, 2019 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Adjusted EBITDA	$	86,613		$	33,816		$	(16,806	)	$	103,623
$ change from six months June 30, 2018	$	(10,256	)	$	6,916		$	336		$	(3,004	)
% change from six months June 30, 2018	(10.6		)%	25.7		%	2.0		%	(2.8		)%

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



	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



	Six Months Ended June 30, 2018 (Non-GAAP Combined Predecessor and Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	96,869	$	26,900	$	(17,142	)	$	106,627

Adjusted EBITDA for the Successor ~~Period and 2018 Predecessor Period compared to the Predecessor~~ Company six months ended June 30, ~~2017 increased.~~2019 compared to the 2018 Predecessor Period and Successor Period decreased because Adjusted EBITDA ~~increased~~decreased at the Cumulus Radio Station Group partially offset by increases at the Westwood One and Corporate and Other segments, respectively. Adjusted EBITDA at the Cumulus Radio Station Group decreased primarily as a result of the decrease in revenue described above. Adjusted EBITDA at Westwood One and Corporate and Other ~~segments, respectively,~~increased primarily as a result of higher revenue and lower bad debt expense, partially offset by ~~a decrease~~the impact of the station dispositions at ~~the Cumulus Radio Station Group.~~Westwood One and lower expenses at Corporate and Other. Adjusted EBITDA at Westwood One ~~increased as a result of increased revenues~~in the 2018 Predecessor Period and ~~certain lower content expenses, partially offset by the~~Successor Period included $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 decline in revenue which was partially offset by lower expenses.USTN.

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 periods presented ~~above~~herein (dollars in thousands):


	Period from June 4, 2018 through June 30, 2018 (Successor Company)											Three Months Ended June 30, 2019 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated		Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated
GAAP net income (loss)	$	18,327		$	5,796		$	(19,143	)	$	4,980	$	92,974		$	11,610	$	(61,723	)	$	42,861
Income tax expense	—			—			2,606			2,606		—			—		17,026			17,026
Non-operating (income) expense, including net interest expense	(4		)	47			6,109			6,152
Non-operating expense, including net interest expense												79			122		21,016			21,217
Local marketing agreement fees	358			—			—			358		438			—		—			438
Depreciation and amortization	2,179			1,949			251			4,379		6,414			5,968		1,163			13,545
Stock-based compensation expense	—			—			652			652		—			—		1,106			1,106
Acquisition-related and restructuring costs	—			(102		)	7,043			6,941
(Gain) loss on sale or disposal of assets or stations												(47,780		)	—		30			(47,750		)
Restructuring costs												97			166		12,761			13,024
Franchise and state taxes	—			—			47			47		—			—		352			352
Adjusted EBITDA	$	20,860		$	7,690		$	(2,435	)	$	26,115	$	52,222		$	17,866	$	(8,269	)	$	61,819



	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 (income) 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
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 April 1, 2018 through June 3, 2018 (Predecessor Company)												Period from April 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated			Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
GAAP net (loss) income	$	(506,774	)	$	253,619		$	954,312		$	701,157		$	(506,774	)	$	253,619		$	954,312		$	701,157
Income tax benefit	—			—			(176,741		)	(176,741		)	—			—			(176,741		)	(176,741		)
Non-operating (income) expense, including net interest expense	(1		)	77			311			387
Non-operating (income) expense, including net interest (income) expense													(1		)	77			311			387
Local marketing agreement fees	702			—			—			702			702			—			—			702
Depreciation and amortization	4,111			4,488			1,466			10,065			4,111			4,488			1,466			10,065
Stock-based compensation expense	—			—			65			65			—			—			65			65
Loss on sale or disposal of assets or stations	3			—			144			147			3			—			144			147
Reorganization items, net	541,903			(251,669		)	(786,602		)	(496,368		)	541,903			(251,669		)	(786,602		)	(496,368		)
Acquisition-related and restructuring costs	(120		)	39			815			734
Restructuring costs													(120		)	39			815			734
Franchise and state taxes	—			—			93			93			—			—			93			93
Adjusted EBITDA	$	39,824		$	6,554		$	(6,137	)	$	40,241		$	39,824		$	6,554		$	(6,137	)	$	40,241


	Three Months Ended June 30, 2017 (Predecessor Company)										Six Months Ended June 30, 2019 (Successor Company)
	Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated		Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated
GAAP net income (loss)	$	46,803		$	10,976	$	(52,107	)	$	5,672	$	118,817		$	21,173	$	(96,678	)	$	43,312
Income tax expense	—			—		7,234			7,234		—			—		16,841			16,841
Non-operating (income) expense, including net interest expense	(1		)	133		34,288			34,420
Non-operating expense, including net interest expense											265			264		42,868			43,397
Local marketing agreement fees	2,713			—		—			2,713		1,481			—		—			1,481
Depreciation and amortization	10,251			5,449		420			16,120		13,719			12,163		2,253			28,135
Stock-based compensation expense	—			—		530			530		—			—		2,314			2,314
Gain on sale or disposal of assets or stations	104			—		—			104
Acquisition-related and restructuring costs	—			384		83			467
(Gain) loss on sale or disposal of assets or stations											(47,766		)	—		42			(47,724		)
Gain on early extinguishment of debt											—			—		(381		)	(381		)
Restructuring costs											97			216		15,488			15,801
Franchise and state taxes	—			—		140			140		—			—		447			447
Adjusted EBITDA	$	59,870		$	16,942	$	(9,412	)	$	67,400	$	86,613		$	33,816	$	(16,806	)	$	103,623


	Period from June 4, 2018 through June 30, 2018 (Successor Company)											Period from June 4, 2018 through June 30, 2018 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated		Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
GAAP net income (loss)	$	18,327		$	5,796		$	(19,143	)	$	4,980	$	18,327		$	5,796		$	(19,143	)	$	4,980
Income tax expense	—			—			2,606			2,606		—			—			2,606			2,606
Non-operating (income) expense, including net interest expense	(4		)	47			6,109			6,152
Non-operating (income) expense, including net interest (income) expense												(4		)	47			6,109			6,152
Local marketing agreement fees	358			—			—			358		358			—			—			358
Depreciation and amortization	2,179			1,949			251			4,379		2,179			1,949			251			4,379
Stock-based compensation expense	—			—			652			652		—			—			652			652
Acquisition-related and restructuring costs	—			(102		)	7,043			6,941
Restructuring costs												—			(102		)	7,043			6,941
Franchise and state taxes	—			—			47			47		—			—			47			47
Adjusted EBITDA	$	20,860		$	7,690		$	(2,435	)	$	26,115	$	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)											Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated			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
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 (income) expense												(2		)	204			281			483
Local marketing agreement fees	5,420			—		—			5,420			1,809			—			—			1,809
Depreciation and amortization	20,655			10,903		844			32,402			10,251			9,965			1,830			22,046
Stock-based compensation expense	—			—		1,068			1,068			—			—			231			231
Gain on sale of assets or stations	(2,502		)	—		—			(2,502		)
Acquisition-related and restructuring costs	—			1,492		126			1,618
Loss on sale or disposal of assets or stations												14			—			144			158
Reorganization items, net												541,903			(251,487		)	(756,617		)	(466,201		)
Restructuring costs												—			1,087			1,368			2,455
Franchise and state taxes	—			—		279			279			—			—			234			234
Adjusted EBITDA	$	98,911		$	25,911	$	(18,689	)	$	106,133		$	76,009		$	19,210		$	(14,707	)	$	80,512

Liquidity and Capital Resources

As ~~described above,~~of June 30, 2019, we had $23.0 million of cash and cash equivalents including restricted cash. The Successor Company generated cash from operating activities of $49.0 million for the six months ended June 30, 2019, and used cash of $1.7 million for the period from June 4, 2018 through June 30, 2018. The Predecessor Company generated cash from operating activities of $29.1 million, for the period from January 1, 2018 through June 3, 2018. Since our emergence from Chapter 11, we have reduced the total principal of our long-term debt from $1,300 million at emergence to $1,104 million at June 30, 2019.

Historically, our principal sources of funds have been cash flow from operations and borrowings under credit facilities in existence from time to time. Our cash flow from operations remains subject to factors such as fluctuations in 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 certain 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. 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 results of operations, financial condition or liquidity.

We continually monitor our capital structure, and from time to time we have evaluated, and expect that we will continue to evaluate, opportunities to obtain additional 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 consistent with, or do not complement, our strategic objectives as well as from the issuance of equity and/or debt securities, in each case, subject to market and other conditions in existence at that time.

Credit Agreement

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

~~Amounts outstanding under the~~ See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 7 — Long-Term Debt," for further discussion of our 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 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~~Revolving Credit Agreement ~~does not contain any financial maintenance covenants.~~

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).

On August 17, 2018, ~~Holdings~~we entered into a $50.0 million ~~revolving credit facility (the “Revolving~~Revolving Credit ~~Facility”)~~Facility pursuant to a Revolving Credit ~~Agreement (the “Revolving~~Agreement. See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 7 — Long-Term Debt," for further discussion of our 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.Agreement.

~~The Revolving Credit Facility matures on August 17, 2023. Availability~~6.75% Senior Notes

On June 26, 2019, we entered into an Indenture under which the ~~Revolving Credit Facility is tied~~6.75% Senior Notes were issued. See "Item 1 — Financial Statements — Notes to ~~a borrowing base formula that is based on 85%~~Condensed Consolidated Financial Statements — Note 7 — Long-Term Debt," for further discussion of the ~~accounts receivable of the borrowers~~Indenture 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.~~6.75% Senior Notes.

Cash Flows ~~(Used in)~~ Provided by (Used In) 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		Successor Company					Predecessor Company
								Six months ended June 30, 2019		Period from June 4, 2018 through June 30, 2018			Period from January 1, 2018 through June 3, 2018		Non-GAAP Combined Period Six Months Ended June 30, 2018
(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(1,712	)	$	29,132	$	16,940
Net cash provided by (used in) operating activities								$	48,954	$	(1,712	)	$	29,132	$	27,420

Net cash provided by operating activities infor the Successor ~~Period and the 2018 Predecessor Period compared to the~~Company six months ended June 30, ~~2017~~2019 compared to the Combined 2018 Predecessor Period and Successor Period increased ~~as a result~~primarily because of ~~increased profitability partially offset by a decrease~~an increase in cash collections ~~because~~and the timing of ~~timing.~~payments of accounts payable and accrued expenses.

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			Successor Company				Predecessor Company
										Six months ended June 30, 2019		Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018			Non-GAAP Combined Period Six Months Ended June 30, 2018
(Dollars in thousands)
Net cash used in investing activities	$	(19,969	)	$	(14,019	)	$	(7,113	)
Net cash provided by (used in) investing activities										$	92,804	(19,969	)	$	(14,019	)	$	(33,988	)

~~During~~Net cash provided by investing activities for the Successor Period and the 2018 Predecessor Period, net cash used in investing activities consisted of cash used to complete the 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~~Company six months ended June 30, ~~2017, cash used in~~2019 compared to the ~~Company’s investing activities consisted~~Combined 2018 Predecessor Period and Successor Period increased primarily because of ~~$13.2 million of capital expenditures, which were offset by cash~~ proceeds ~~of $6.1 million~~received from the ~~sale~~EMF Sale. See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 3 — Acquisitions and Dispositions," for further discussion of ~~land in our Salt Lake City, Utah market.~~the EMF Sale.

Cash Flows Used Inin 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			Successor Company					Predecessor Company
								Six months ended June 30, 2019			Period from June 4, 2018 through June 30, 2018		Period from January 1, 2018 through June 3, 2018			Non-GAAP Combined Period Six Months Ended June 30, 2018
(Dollars in thousands)
Net cash used in financing activities	$	—	$	38,652	$	(94	)	$	(148,830	)	$	—	$	(38,652	)	$	(38,652	)

For the Successor Company six months ended June 30, 2019 net cash used in financing activities included $500 million in proceeds received from the issuance of the 6.75% Senior Notes. The proceeds from the issuance of the 6.75% Senior Notes, combined with the proceeds from the EMF Sale and cash generated from operations, were used to repay $639.2 million of debt under the Term Loan.

During the ~~Successor~~Combined 2018 Predecessor Period and ~~the 2018 Predecessor~~Successor Period the Company made $37.8 million in adequate protection payments on the Predecessor Term Loan in lieu of interest payments, ~~and~~which was recorded as a reduction to the principal balance of the Predecessor Term Loan. We also incurred approximately $0.9 million in deferred financing costs.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

As of June 30, ~~2018, all $1.3 billion~~2019, $603.7 million of our long-term debt bore interest at a variable rate. Accordingly, our earnings and after-tax cash flow are subject to change based on changes in interest rates and could be materially affected, depending on the timing and amount of any interest rate changes. Assuming the current level of borrowings outstanding at June 30, ~~2018~~2019 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 pre-tax net income would decrease (increase) by ~~$13.0~~$6.0 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 June 30, ~~2018.~~2019.

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) during the three months ended June 30, ~~2018~~2019 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

is still being litigated in the Ninth Circuit as a result of a case filed in California. Cumulus is not a party to that case, and the Company is not yet able to determine what effect 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 ~~2017~~2018 Annual Report for information regarding known material risks that could affect our results of operations, financial condition and liquidity. Except 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.

~~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 June 30, 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~~4.1		~~First Amended Joint Plan~~Indenture, dated as of ~~Reorganization of~~June 26, 2019, by and among Cumulus Media New Holdings Inc., the guarantors party thereto, and ~~its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code~~U.S. Bank National Association (incorporated by reference to Exhibit ~~2.1~~4.1 to ~~the Company’s Current Report~~Cumulus Media Inc's current report on Form 8-K filed with the SEC on June ~~4, 2018)~~26, 2019.

~~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~~4.2		Form of ~~Global Warrant Certificate (incorporated by reference to~~6.75% Senior Secured First Lien Note due 2026 (included in 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)4.1).

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.

August ~~20, 2018~~8, 2019	By:	/s/ John Abbot
		John Abbot
		Executive Vice President, Treasurer and Chief Financial Officer

6551



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



	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



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



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



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			$	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



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



	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



	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	)



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	)



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



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



	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

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