Assets Current assets: Cash and cash equivalents Restricted cash Accounts receivable, less allowance for doubtful accounts of $3,882 and $4,131 at March 31, 2013 and December 31, 2012, respectively Trade receivable Prepaid expenses and other current assets Total current assets Property and equipment, net Broadcast licenses Other intangible assets, net Goodwill Other assets Total assets Liabilities, Redeemable Preferred Stock and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses Trade payable Current portion of long-term debt Other current liabilities Total current liabilities Long-term debt, excluding 7.75% senior notes 7.75% senior notes Other liabilities Deferred income taxes Total liabilities Redeemable preferred stock: Series A cumulative redeemable preferred stock, par value $0.01 per share; stated value of $1,000 per share; 100,000,000 shares authorized; 75,767 shares issued and outstanding at both March 31, 2013 and December 2012 Total redeemable preferred stock Stockholders’ equity: Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 183,772,345 and 182,682,073 shares issued, and 159,505,841 and 158,519,394 shares outstanding, at March 31, 2013 and December 31, 2012, respectively Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding at both March 31, 2013 and December 31, 2012 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding at both March 31, 2013 and December 31, 2012 Treasury stock, at cost, 24,266,504 and 24,162,676 shares at March 31, 2013 and December 31, 2012, respectively Additional paid-in-capital Accumulated deficit Total stockholders’ equity Total liabilities, redeemable preferred stock and stockholders’ equity Broadcast revenues Management fees Net revenues Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) Depreciation and amortization LMA fees Corporate general and administrative expenses (including stock-based compensation expense of $2,663 and $6,978 in 2013 and 2012, respectively) Loss on station sale Gain on derivative instrument Total operating expenses Operating income Non-operating (expense) income: Interest expense, net Other income, net Total non-operating expense, net Loss from continuing operations before income taxes Income tax benefit Loss from continuing operations Income from discontinued operations, net of taxes Net loss Less: dividends declared and accretion of redeemable preferred stock Loss attributable to common shareholders Basic and diluted loss per common share (see Note 12, “Earnings Per Share”): Basic: Loss from continuing operations per share Income from discontinued operations per share Loss per share Diluted: Loss from continuing operations per share Income from discontinued operations per share Loss per share Weighted average basic common shares outstanding Weighted average diluted common shares outstanding Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Amortization of debt issuance costs/discounts Provision for doubtful accounts Loss (gain) on sale of assets or stations Fair value adjustment of derivative instruments Deferred income taxes Stock-based compensation expense Changes in assets and liabilities: Accounts receivable Trade receivable Prepaid expenses and other current assets Other assets Accounts payable and accrued expenses Trade payable Other liabilities Net cash provided by operating activities Cash flows from investing activities: Proceeds from sale of assets or stations Acquisitions less cash acquired Restricted cash Capital expenditures Net cash used in investing activities Cash flows from financing activities: Repayment of borrowings under term loans and revolving credit facilities Tax withholding payments on behalf of employees for stock based compensation Preferred stock dividends Proceeds from exercise of warrants Net cash used in financing activities (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental disclosures of cash flow information: Interest paid Income taxes paid (refunds) Supplemental disclosures of non-cash flow information: Compensation held in trust Trade revenue Trade expense national streaming/mobile platform in partnership with digital audio provider, Rdio. 2014. FOR THE YEAR ENDED DECEMBER 31, 2012 Income from discontinued operations, net of taxes Income from discontinuing operations per share FOR THE YEAR ENDED DECEMBER 31, 2012 (Loss) income from discontinued operations, net of taxes Income from discontinuing operations per share Standards ASU 2012-02. In July 2012, the Financial Accounting ASU 2013-04. In February 2013, the FASB issued ASU 2013-04, which provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements where the total obligation is fixed at the reporting date, and for which no specific guidance currently exists. The Company adopted this guidance effective January 1, 2014. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. and Dispositions 2014. Allocation Other assets Goodwill Broadcast licenses Plant, property, and equipment, net Total purchase price Less: Cash consideration Less: Carrying value of station transferred Less: Contingent consideration Gain on asset exchange WestwoodOne’s outstanding indebtedness) was funded from cash on hand, which included $235.0 million in cash proceeds from the Townsquare Transaction (defined below). As a result of the WestwoodOne Acquisition, WestwoodOne became a wholly owned subsidiary of the Company. 2014. Allocation Plant, property, and equipment, net Broadcast licenses Total purchase price Allocation Current assets Property and equipment Broadcast licenses Goodwill Other intangibles Current liabilities Total purchase price Less: Carrying value of stations transferred Add: Cash received Gain on asset exchange Description Advertising relationships payable to complete the WestwoodOne Acquisition. 2014. Allocation Current assets Plant, property, and equipment, net Other assets Broadcast licenses Current liabilities Total purchase price Description Net revenue Net loss 2013. For the three months ended March 31, 2013, Discontinued operations: Net revenue Operating income Income from discontinued operations before taxes Income tax expense Income from discontinued operations certain leases and insurance policies. Intangible Assets: Balance as of January 1, 2012 Purchase price allocation adjustments Acquisition Impairment Disposition Amortization Balance as of December 31, 2012 Acquisition Disposition Amortization Balance as of March 31, 2013 Goodwill: Balance as of January 1: Accumulated impairment losses Subtotal Acquisition Purchase price allocation adjustments Finalization of purchase accounting for fourth quarter 2012 acquisitions Disposition Balance as of March 31: Goodwill Accumulated impairment losses Total 2015 Balance Sheet Location Derivatives not designated as hedging instruments: Interest rate cap Other long-term assets Green Bay Option Other current liabilities Total : Statement of Operations Location Interest rate cap Interest expense Green Bay Option Gain on derivative instrument Total Term loan and revolving credit facilities: First Lien Term Loan Second Lien Term Loan Revolving Credit Facility Less: Term loan discount Total term loan and revolving credit facilities 7.75% Senior Notes Less: Current portion of long-term debt Long-term debt, net Agreement Agreement. Company's prior credit agreement. 2019 Financial assets: Interest rate cap (1) Total assets Financial liabilities: Other current liabilities Green Bay Option (4) Contingent consideration (5) Total liabilities Financial assets: Interest rate cap (1) Non-financial assets: Goodwill (2) Broadcast licenses (3) Total assets Financial liabilities: Other current liabilities Green Bay Option (4) Total liabilities Description Fair value balance at January 1, 2013 Add: Mark to market fair value adjustment Fair value balance at March 31, 2013 Fair Value Valuation Technique Unobservable Inputs Black-Scholes Model Risk adjusted discount rate Total term Volatility rate Annual dividend rate Bond equivalent yield discount rate The following table shows the gross amount and fair value of the Company’s First Lien Term Loan: Carrying value Fair value - Level 2 Second Lien Term Loan: Carrying value Fair value - Level 2 7.75% Senior Notes: Carrying value Fair value - Level 2 overhead. 2013. outstanding at an adjusted exercise price of 2014 basis. Basic Loss Per Share Numerator: Undistributed net loss from continuing operations Less: Dividends declared on redeemable preferred stock Accretion of redeemable preferred stock Participation rights of Company Warrants in undistributed earnings Participation rights of unvested restricted stock in undistributed earnings Basic undistributed net loss from continuing operations Attributable to common shares Denominator: Basic weighted average shares outstanding Basic Loss from continuing operations per share—attributable to common shares Diluted Loss Per Share: Numerator: Undistributed net loss from continuing operations Less: Dividends declared on redeemable preferred stock Accretion of redeemable preferred stock Participation rights of the Company Warrants in undistributed net income Participation rights of unvested restricted stock in undistributed earnings Basic undistributed net loss from continuing operations Attributable to common shares Denominator: Basic weighted average shares outstanding Effect of dilutive options and warrants Diluted weighted average shares outstanding Diluted undistributed net loss from continuing operations attributable to common shares approximately other services. The results have been adjusted for discontinued operations (see Note 3 "Discontinued Operations"). income. issued financial statements. As permitted by the accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 108,Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the Company has presented a revised Broadcast revenues Management fees Net revenues Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) Depreciation and amortization LMA fees Corporate general and administrative expenses (including stock-based compensation expense of Loss on station sale Gain on derivative instrument Total operating expenses Operating (loss) income Non-operating (expense) income: Interest (expense) income, net Other expense, net Total non-operating expense, net (Loss) income before income taxes Income tax benefit (Loss) income from continuing operations Income from discontinued operations, net of taxes (Loss) earnings from consolidated subsidiaries Net (loss) income Broadcast revenues Management fees Net revenues Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) Depreciation and amortization LMA fees Corporate general and administrative expenses (including stock-based compensation expense of $6,978) Gain on derivative instrument Total operating expenses Operating (loss) income Non-operating (expense) income: Interest (expense) income, net Other expense, net Total non-operating (expense) income, net (Loss) income before income taxes Income tax benefit (Loss) income from continuing operations Income (loss) from discontinued operations, net of taxes Earnings from consolidated subsidiaries Net (loss) income Assets Current assets: Cash and cash equivalents Restricted cash Accounts receivable, less allowance for doubtful accounts of $3,882 Trade receivable Prepaid expenses and other current assets Total current assets Property and equipment, net Broadcast licenses Other intangible assets, net Goodwill Investment in consolidated subsidiaries Intercompany receivables Other assets Total assets Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses Trade payable Current portion of long-term debt Other current liabilities Total current liabilities Long-term debt, excluding 7.75% Senior Notes 7.75% Senior Notes Other liabilities Intercompany payables Deferred income taxes Total liabilities Redeemable preferred stock: Series A cumulative redeemable preferred stock, par value $0.01 per share; stated value of $1,000 per share; 100,000,000 shares authorized; 75,767 shares issued and outstanding Total redeemable preferred stock Stockholders’ equity (deficit): Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 183,772,345 shares issued and 159,505,841 shares outstanding Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding Class C common stock, par value $0.01 per share; 644,871 shares authorized; 644,871 shares issued and outstanding Treasury stock, at cost, 24,266,504 shares Additional paid-in-capital Accumulated (deficit) equity Total stockholders’ equity (deficit) Total liabilities, redeemable preferred stock and stockholders’ equity (deficit) Assets Current assets: Cash and cash equivalents Restricted cash Accounts receivable, less allowance for doubtful accounts of $4,131 Trade receivable Prepaid expenses and other current assets Total current assets Property and equipment, net Broadcast licenses Other intangible assets, net Goodwill Investment in consolidated subsidiaries Intercompany receivables Other assets Total assets Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses Trade payable Current Portion of long-term debt Other current liabilities Total Current Liabilities Long-term debt, excluding 7.75% Senior Notes 7.75% Senior Notes Other liabilities Intercompany payables Deferred income taxes Total liabilities Redeemable preferred stock: Series A cumulative redeemable preferred stock, par value $0.01 per share; stated value of $1,000 per share; 100,000,000 shares authorized; 75,767 shares issued and outstanding Total redeemable preferred stock Stockholders’ equity (deficit): Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 182,682,073 shares issued and 158,519,394 shares outstanding Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding Class C common stock, par value $0.01 per share; 644,871 shares authorized; 644,871 shares issued and outstanding Treasury stock, at cost, 24,162,676 shares Additional paid-in-capital Accumulated (deficit) equity Total stockholders’ equity (deficit) Total liabilities, redeemable preferred stock and stockholders’ equity (deficit) Cash flows from operating activities: Net (loss) income Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization Amortization of debt issuance costs/discounts Provision for doubtful accounts Loss on station sale Fair value adjustment of derivative instruments Deferred income taxes Stock-based compensation expense Earnings from consolidated subsidiaries Changes in assets and liabilities Net cash provided by (used in) operating activities Cash flows from investing activities Proceeds from sale of assets or stations Acquisitions less cash required Restricted cash Capital expenditures Net cash used in investing activities Cash flows from financing activities: Intercompany transactions, net Repayments of borrowings under term loans and revolving credit facilities Tax withholding payments on behalf of employees for stock-based compensation Preferred stock dividends Proceeds exercise of warrants Net cash (used in) provided by financing activities (Decrease) Increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Cash flows from operating activities: Net (loss) income Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization Amortization of debt issuance costs/discount Provision for doubtful accounts Loss on sale of assets or stations Fair value adjustment of derivative instruments Deferred income taxes Stock-based compensation expense Earnings from consolidated subsidiaries Changes in assets and liabilities: Net cash (used in) provided by operating activities Cash flows from investing activities: Proceeds from sale of assets or stations Capital expenditures Net cash used in investing activities Cash flows from financing activities: Intercompany transactions, net Repayments of borrowings under term loans and revolving credit facilities Tax withholding payments on behalf of employees for stock-based compensation Preferred stock dividends Exercise of warrants Net cash provided by (used in) financing activities Increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period partnership with digital audio provider Rdio. pre-existing credit agreements. 2015. net revenues. revenues in all periods presented. credit facility. it does not represent a cash transaction nor are they associated with STATEMENT OF OPERATIONS DATA: Net revenues Direct operating expenses (excluding depreciation, amortization and LMA fees) Depreciation and amortization LMA fees Corporate, general and administrative expenses (including stock-based compensation expense) Loss on station sale Gain on derivative instrument Operating income Interest expense, net Other income, net Loss from continuing operations before income taxes Income tax benefit Income from continuing operations Income from discontinued operations, net of taxes Net loss OTHER DATA: Adjusted EBITDA March 31, 2014 increased $46.5 million, or 75.1%, to $108.5 million, compared to $62.0 million for the three months ended March 31, 2013. This increase was primarily attributable to the addition of the operations of WestwoodOne, in addition to expenses related to our local and national content initiatives, including our NASH country brand. revenue. 7.75% Senior Notes Bank borrowings – term loans and revolving credit facilities Other interest expense Change in fair value of interest rate cap and swap Interest income Interest expense, net which no estimated amount of deferred tax assets are available to satisfy. 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. . Net loss Income tax benefit Non-operating expenses, including net interest expense LMA fees Depreciation and amortization Stock-based compensation expense Loss on station sale Gain on derivative instrument Acquisition-related costs Franchise taxes Discontinued operations: Depreciation and amortization Income tax expense Adjusted EBITDA Net cash provided by operating activities payments on our accounts receivable. Net cash used in investing activities Net cash used in financing activities partially offset by a $2.7 million decrease in dividends paid on our Series A preferred stock. 2014. 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 a future period. /s/ Joseph P. Hannan Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the xý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 20132014¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. CUMULUS MEDIA INC.Delaware 36-4159663 30305 (Address of Principal Executive Offices) (ZIP Code) xý No ¨xý No ¨Large accelerated filer ¨ Accelerated filer xýNon-accelerated filer Smaller reporting company ¨ xý30, 2013,22, 2014, the registrant had 175,963,810217,718,596 outstanding shares of common stock consisting ofof: (i) 159,893,995217,073,725 shares of Class A common stock; (ii) 15,424,9440 shares of Class B common stock; and (iii) 644,871 shares of Class C common stock. 31 3838 Item 6. Exhibits38 March 31,
2013 December 31,
2012 $ 82,806 $ 88,050 6,096 5,921 164,099 207,563 5,926 6,104 47,299 45,481 306,226 353,119 251,459 255,903 1,642,044 1,602,373 236,850 258,761 1,205,166 1,195,594 75,985 77,825 $ 3,717,730 $ 3,743,575 $ 100,651 $ 102,586 4,754 4,803 48,868 76,468 10,648 11,386 164,921 195,243 2,039,647 2,014,599 610,000 610,000 43,884 45,313 550,346 559,918 3,408,798 3,425,073 72,368 71,869 72,368 71,869 1,838 1,827 154 154 6 6 (252,341 ) (252,001 ) 1,514,098 1,514,849 (1,027,191 ) (1,018,202 ) 236,564 246,633 $ 3,717,730 $ 3,743,575 March 31, 2014 December 31, 2013 Assets Current assets: Cash and cash equivalents $ 37,270 $ 32,792 Restricted cash 6,146 6,146 Accounts receivable, less allowance for doubtful accounts of $5,413 and $5,306 at March 31, 2014 and December 31, 2013, respectively 232,172 264,805 Trade receivable 4,185 4,419 Prepaid expenses and other current assets 86,827 68,893 Total current assets 366,600 377,055 Property and equipment, net 246,447 254,702 Broadcast licenses 1,597,250 1,596,337 Other intangible assets, net 295,518 315,490 Goodwill 1,256,015 1,256,741 Other assets 70,392 70,110 Total assets $ 3,832,222 $ 3,870,435 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 150,863 $ 146,537 Trade payable 3,380 3,846 Current portion of long-term debt 19,376 5,937 Total current liabilities 173,619 156,320 Long-term debt, excluding 7.75% senior notes 1,967,647 1,985,956 7.75% senior notes 610,000 610,000 Secured loan — 25,000 Other liabilities 74,074 79,913 Deferred income taxes 500,506 500,506 Total liabilities 3,325,846 3,357,695 Stockholders’ equity: Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 238,817,762 and 222,399,019 shares issued, and 213,713,494 and 198,193,819 shares outstanding, at March 31, 2014 and December 31, 2013, respectively 2,387 2,223 Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 3,315,238 and 15,424,944 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively 33 154 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding at both March 31, 2014 and December 31, 2013 6 6 Treasury stock, at cost, 25,104,268 and 24,205,200 shares at March 31, 2014 and December 31, 2013, respectively (257,214 ) (251,193 ) Additional paid-in-capital 1,612,552 1,603,669 Accumulated deficit (851,388 ) (842,119 ) Total stockholders’ equity 506,376 512,740 Total liabilities and stockholders’ equity $ 3,832,222 $ 3,870,435 Three Months Ended
March 31, 2013 2012 $ 232,872 $ 235,965 — 30 232,872 235,995 164,172 153,627 28,930 34,882 969 839 13,866 16,692 1,309 — (738 ) (88 ) 208,508 205,952 24,364 30,043 (44,252 ) (50,803 ) 133 262 (44,119 ) (50,541 ) (19,755 ) (20,498 ) 10,767 7,892 (8,988 ) (12,606 ) — 476 (8,988 ) (12,130 ) 3,152 5,700 $ (12,140 ) $ (17,830 ) $ (0.07 ) $ (0.13 ) $ — $ 0.01 $ (0.07 ) $ (0.12 ) $ (0.07 ) $ (0.13 ) $ — $ 0.01 $ (0.07 ) $ (0.12 ) 174,748,001 149,369,152 174,748,001 149,369,152 Three Months Ended March 31, 2014 2013 Net revenues $ 292,044 $ 217,839 Operating expenses: Content costs 108,493 61,951 Other direct operating expenses 115,335 93,480 Depreciation and amortization 28,881 27,596 LMA fees 1,557 946 Corporate expenses (including stock-based compensation expense of $4,091 and $2,663, respectively) 19,194 14,018 (Gain) loss on sale of assets or stations (538 ) 1,309 Gain on derivative instrument — (738 ) Total operating expenses 272,922 198,562 Operating income 19,122 19,277 Non-operating (expense) income: Interest expense, net (35,934 ) (44,252 ) Other (expense) income, net (65 ) 287 Total non-operating expense, net (35,999 ) (43,965 ) Loss from continuing operations before income taxes (16,877 ) (24,688 ) Income tax benefit (expense) 7,608 (1,975 ) Loss from continuing operations (9,269 ) (26,663 ) Income from discontinued operations, net of taxes — 17,675 Net loss (9,269 ) (8,988 ) Less: dividends declared and accretion of redeemable preferred stock — 3,152 Loss attributable to common shareholders $ (9,269 ) $ (12,140 ) Basic and diluted loss per common share (see Note 11, “Earnings Per Share”): Basic: Loss from continuing operations per share $ (0.04 ) $ (0.17 ) Income from discontinued operations per share $ — $ 0.10 Loss per share $ (0.04 ) $ (0.07 ) Diluted: Loss from continuing operations per share $ (0.04 ) $ (0.17 ) Income from discontinued operations per share $ — $ 0.10 Loss per share $ (0.04 ) $ (0.07 ) Weighted average basic common shares outstanding 215,703,667 174,748,001 Weighted average diluted common shares outstanding 215,703,667 174,748,001 Three Months Ended March 31, 2013 2012 $ (8,988 ) $ (12,130 ) 28,930 35,678 2,624 2,974 529 3,361 1,309 (262 ) (733 ) (3 ) (9,573 ) (5,980 ) 2,663 6,978 42,933 42,186 178 (28 ) (1,864 ) (611 ) 252 (124 ) (1,945 ) (9,425 ) (49 ) (325 ) (1,460 ) (2,011 ) 54,806 60,278 467 322 (52,066 ) — (175 ) — (1,986 ) (1,122 ) (53,760 ) (800 ) (3,313 ) (54,000 ) (337 ) (1,346 ) (2,652 ) (3,125 ) 12 34 (6,290 ) (58,437 ) (5,244 ) 1,041 88,050 30,592 $ 82,806 $ 31,633 $ 28,692 $ 37,037 (270 ) 107 — 24,807 4,915 6,832 4,771 6,432 Three Months Ended March 31, 2014 2013 Cash flows from operating activities: Net loss $ (9,269 ) $ (8,988 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 28,881 28,930 Amortization of debt issuance costs/discounts 2,318 2,624 Provision for doubtful accounts 568 529 (Gain) loss on sale of assets or stations (538 ) 1,309 Fair value adjustment of derivative instruments 14 (733 ) Deferred income taxes (7,631 ) (9,573 ) Stock-based compensation expense 4,091 2,663 Changes in assets and liabilities: Accounts receivable 32,065 42,933 Trade receivable 234 178 Prepaid expenses and other current assets (10,303 ) (1,864 ) Other assets (1,336 ) 252 Accounts payable and accrued expenses 4,087 (1,945 ) Trade payable (466 ) (49 ) Other liabilities (5,839 ) (1,460 ) Net cash provided by operating activities 36,876 54,806 Cash flows from investing activities: Restricted cash — (175 ) Acquisition less cash acquired — (52,066 ) Proceeds from sale of assets or stations 1,054 467 Capital expenditures (1,335 ) (1,986 ) Net cash used in investing activities (281 ) (53,760 ) Cash flows from financing activities: Repayment of borrowings under term loans and revolving credit facilities (30,937 ) (3,313 ) Deferred financing costs (21 ) — Tax withholding payments on behalf of employees (1,314 ) (337 ) Proceeds from exercise of warrants 38 12 Proceeds from exercise of options 117 — Preferred stock dividends — (2,652 ) Net cash used in financing activities (32,117 ) (6,290 ) Increase (decrease) in cash and cash equivalents 4,478 (5,244 ) Cash and cash equivalents at beginning of period 32,792 88,050 Cash and cash equivalents at end of period $ 37,270 $ 82,806 Supplemental disclosures of cash flow information: Interest paid $ 23,520 $ 28,692 Income taxes paid (refunded) 8,708 (270 ) Supplemental disclosures of non-cash flow information: Trade revenue $ 9,424 $ 4,915 Trade expense 9,393 4,771 Cumulus Media believes it is the largest pure-play radio broadcaster in the United States based on numberstations. At March 31, 2013, Cumulus Media owned or operated approximately 520over 259 million. The Company provides content and services to more than 10,000 radio stations, (including under local marketing agreements, or “LMAs”)including its 460 owned and operated stations in 108 United States93 U.S. media markets, and operates a nationwide radio network serving over 5,000 stations.2012.2013. The accompanying unaudited interim condensed consolidated financial statements include the condensed consolidated accounts of Cumulus and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of our results of operations for, and financial condition as of the end of, the interim periods have been made. The results of operations for the three months ended March 31, 2013,2014, the cash flows for the three months ended March 31, 20132014 and the Company’s financial condition as of March 31, 2013,2014, are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition that can be expected as of the end of, any other interim period or for the fiscal year ending December 31, 2013.estimates under different assumptions or conditions.Revisionsestimates.Prior Period Financial StatementsIn connectionconform with the preparation ofclassifications currently in use.financial statements for the three months ended March 31, 2013,of operations the Company identified an errorpresents separate operating expense categories for content costs and other direct operating expenses. In the Company's previous disclosures, those line items in the Quarterly Results (Unaudited) footnote included incondensed consolidated statements of operations were presented on a combined basis within the Company’s 2012 Annual Report on Form 10-K. Upon completiondirect operating expenses line item. Content costs consist of the Company’s evaluation of the error, it was determined that “Income from discontinued operations, net of tax” as presented for the fourth quarter of 2012 improperly excluded the effect of taxes while “Income from discontinued operations, net of tax” as presented for the first quarter of 2012 improperly included the effect of taxesall costs related to the fourth quarterlicensing, acquisition and development of 2012. The errorsthe Company's programming. Other direct operating expenses consist of expenses related to the distribution and monetization of the Company's content across its platform and overhead expenses. There were no other costs included in direct operating expenses in 2013.impacteffect on net incomepreviously reported results of the consolidated financial statements for the year ended December 31, 2012operations or on any other periods or disclosures previously presented.In accordance with accounting guidance found inASC 250-10 (SEC Staffretained earnings.Bulletin No. 99, Materiality), the Company assessed the materiality of the errors and concluded that the errors were not material to any of the Company’s previously issued financial statements. As permitted by the accounting guidance found inASC 250-10 (SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the Company elected to present herein the revised financial information for the three months ended March 31, 2012 and December 31, 2012.The following tables present the effect of this revision on all disclosures and periods affected. First
Quarter First
Quarter First
Quarter As Previously
Reported Adjustment As Revised $ 20,552 $ (20,076 ) $ 476 $ 0.14 $ (0.13 ) $ 0.01 Fourth
Quarter Fourth
Quarter Fourth
Quarter As Previously
Reported Adjustment As Revised $ (268 ) $ 20,076 $ 19,808 $ — $ 0.11 $ 0.11 The error had no impact on net income for the year ended December 31, 2012 or on any other periods or disclosures previously presented.Recent Accounting PronouncementsStandardStandards Board (“FASB”("FASB") issued Accounting Standards Update (“ASU”("ASU") 2012-02. The amendments in this ASU give companies the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired rather than calculating the fair value of the It is effective prospectively for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company adopted this guidance effective January 1, 2013. The adoption of this guidance did not have an impact on the Company’s interimconsolidated financial statements.2013-01.2013-01. In January 2013, the FASB issued ASU 2013-01 which provides scope clarification related to the previously issued ASU 2011-11.2013-01. The amendments in this ASU require companies to disclose information about offsetting and related arrangements to enable users of theirits financial statements to understand the effect of those arrangements on the Company’sits financial position. The ASU is required to be applied retrospectively for all prior periods presented and is effective for annual periods for fiscal years beginning on or after January 1, 2013. The Company adopted this guidance effective January 1, 2013. The adoption of this guidance did not have an impact on the Company’s interimconsolidated financial statements.ASU 2013-02. In February 2013, the FASB issued ASU 2013-02 which amends existing guidance by requiring that additional information be disclosed about items reclassified (“reclassification adjustments”) out of accumulated other comprehensive income. The additional information includes separately stating the total change for each component of other comprehensive income (for example unrealized gains or losses on available-for-sale securities or foreign currency items) and separately disclosing both current-period other comprehensive income and reclassification adjustments. Entities are also required to present, either on the face of the income statement or in the notes to the financial statements, significant amounts reclassified out of accumulated other comprehensive income as separate line items of net income but only if the entire amount reclassified must be reclassified to net income in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity must cross-reference to other disclosures that provide additional detail about those amounts The ASU is required to be applied prospectively for all prior periods presented and is effective for annual periods for fiscal years beginning on or after January 1, 2013. The Company adopted this guidance effective January 1, 2013. The adoption of this guidance did not have an impact on the Company’s interim financial statements. reporting periods beginning on or after December 15, 20132014 and subsequent interim periods.periods within those years. The Company is currently assessing the expected impact, if any, that the effectiveness of this ASU will have on the consolidated financial statements.WFME Asset ExchangeJanuary 8,December 31, 2013, the Company completed its previously announced asset exchange (the “WFME Asset Exchange”the purchase of five radio stations in Green Bay, Wisconsin from Clear Channel Communications, Inc. ("Clear Channel") with Family Stations, Inc. pursuant to which it exchanged its WDVY station in New York plus $40.0for $17.6 million in cash for Family Stations’ WFME station in Newark, New Jersey.(the "Green Bay Purchase"). The total purchase price is subject to additional contingent cash consideration of $10 million payableCompany had been operating these stations under an LMA agreement with Clear Channel since April 10, 2009.sellers if certain future conditions are met as detailedstations acquired in the purchase agreement. We have estimatedGreen Bay Purchase were not material to the fair valueCompany’s consolidated statement of operations for the contingent consideration to be less than $0.1 million as ofthree months ended March 31, 2013. Any future change in the estimated fair value of the contingent consideration, during the contingency period, will be recorded in the Company’s results of operations in the period of such change. This acquisition provided Cumulus with a radio station in the United States’ largest media market, for the national NASH entertainment brand based on the country music lifestyle.among the tangible and intangible assets acquired and liabilities assumed in the WFME Asset ExchangeGreen Bay Purchase (dollars in thousands): Amount $ 1,460 11,461 27,100 62 40,083 (40,000 ) (52 ) (31 ) $ — Allocation Amount Property and equipment $ 1,111 Broadcast licenses 4,354 Goodwill 2,637 Fair value of exercised put option 9,534 Total purchase price $ 17,636 includedacquired include expected overall future market revenue growth rates for the residual year of approximately 2.0%2.5% and a weighted average cost of capital of 10.0%. Goodwill wasis equal to the difference between the purchase price and the value assigned to the tangible and intangible assets acquired and liabilities. $11.4 millionliabilities assumed. All of the acquired goodwill balance is deductible for tax purposes. The indefinite-lived intangible assets acquiredWFME Asset Exchange consiststable above.broadcast licensesWestwoodOne, Inc. (formerly known as Dial Global, Inc., "WestwoodOne"), an independent, full-service radio network company offering news, sports, formats, prep services, talk and goodwill.Pamal Broadcasting Asset PurchaseOn January 17, 2013,music programming, jingles and imaging, and special events, as well as national advertising sales representation (the "WestwoodOne Acquisition"). The WestwoodOne Acquisition added sports, news, talk, music and programming services content - enabling the Company completedto provide an even broader array of programming content to approximately 10,000 U.S. radio stations, other media platforms and international platforms. Content acquired through the Pamal Broadcasting Asset Purchase, acquiring WMEZ-FMWestwoodOne Acquisition included NFL, NCAA basketball, NASCAR, CBS News and WXBM-FM for aother popular programming.$6.5 million.$0.4$71.0 million attributable to the Pamal Broadcasting Asset PurchaseWestwoodOne were included in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2013among the tangible and intangible assets acquired in the Pamal Broadcasting Asset PurchaseWestwoodOne Acquisition (dollars in thousands): Amount $ 783 5,700 $ 6,483 2012 AcquisitionsOn July 31, 2012, the Company completed its sale of 55 stations in eleven non-strategic markets to Townsquare Media, LLC (“Townsquare Asset Exchange”) in exchange for ten of Townsquare’s radio stations in Bloomington, IL and Peoria, IL, plus approximately $114.9 million in cash. The transaction was part of the Company’s ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters. The stations sold by the Company operated in the following markets: Augusta, ME; Bangor, ME; Binghamton, NY; Bismarck, ND; Grand Junction, CO; Killeen-Temple, TX; New Bedford, MA; Odessa-Midland, TX; Presque Isle, ME; Sioux Falls, SD and Tuscaloosa, AL.In conjunction with this Asset Exchange, the Company recorded a gain of $63.0 million, which is included within discontinued operations in the accompanying unaudited condensed consolidated statements of operations for the year ended December 31, 2012.Acquisition related costs attributable to the Townsquare Asset Exchange included in corporate, general and administrative expenses totaled $1.6 million.The table below summarizes the purchase price allocation for the Townsquare Asset Exchange (dollars in thousands): Amount $ 149 4,690 11,900 3,014 200 (207 ) 19,746 (71,697 ) 114,918 $ 62,967 Allocation Amount Current assets $ 91,171 Property and equipment 23,714 Other intangibles 150,900 Goodwill 104,912 Other assets 4,946 Current liabilities (69,144 ) Other liabilities (46,499 ) Total purchase price $ 260,000 includedacquired include expected overall future market revenue growth rates for the residual year of approximately 2.0% and a weighted average cost of capital of 10%. Goodwill wasis equal to the difference between the purchase price and the value assigned to the tangible and intangible assets acquired and liabilities. Noneliabilities assumed. The Company is treating the acquisition as a taxable asset acquisition pursuant to Internal Revenue Code Section 338(g). As such, all of the acquired goodwill balance is non deductible for income tax purposes.The indefinite-lived intangible assets acquired in the Townsquare Asset Exchange consist of broadcast licenses and goodwill.Townsquare Asset ExchangeWestwoodOne Acquisition are being amortized in relation to the expected economic benefits of such assets over their estimated useful lives and consist of the following (dollars in thousands): Estimated Useful
Life in Years Fair Value 6 $ 200 The useDescription Estimated Useful Life in Years Fair Value Affiliate relationships 9 $ 150,900 September 25, 2012, the Company, through its subsidiaries, entered into an asset purchase agreement with AR Broadcasting, LLC, AR Licensing, LLC, CMP KC Corp. and CMP Houston-KC, LLC to acquire the KCHZ-FM and KMJK-FM radio stations operated in the Kansas City market for an aggregate purchase price of $18.1 million.On December 6, 2012, the Company completed the acquisition of KCHZ-FM (“KCHZ Acquisition”), a radio station operated in the Kansas City market, for a purchase price of $11.2 million. The Company paid $10.0 million in cash at closing with the remaining $1.2 million paid in January 2013 with the closing of KMJK-FM.On January 28,November 14, 2013, the Company completed the AR Broadcasting Asset Purchase, acquiring KMJK-FMsale to Townsquare Media, LLC (“Townsquare”) of 53 radio stations in 12 small and mid-sized markets for $235.0 million in cash and the swap with Townsquare of 15 radio stations in two small and mid-sized markets in exchange for five radio stations in Fresno, California (together, the "Townsquare Transaction"). The Company used the cash proceeds from the Townsquare Transaction to fund a portion of the purchase price of $6.9 million. of $0.5 million attributable to the AR Broadcasting Asset Purchaseassets acquired in the Townsquare Transaction were included innot material to the Company’s condensed consolidated statement of operations for the three months ended March 31, 2013.Allocation Amount Current assets $ 1,860 Property and equipment 6,345 Broadcast licenses 13,500 Goodwill 10,080 Other assets 246 Other intangibles 552 Current liabilities (400 ) Total purchase price 32,183 Less: Carrying value of stations transferred (159,053 ) Add: Cash received 235,028 Gain on asset exchange $ 108,158 Description Estimated Useful Life in Years Fair Value Advertising relationships 5 $ 552 Allocation Amount Other assets $ 1,460 Goodwill 11,461 Broadcast licenses 27,100 Plant, property, and equipment, net 62 Total purchase price 40,083 Less: Cash consideration (40,000 ) Less: Carrying value of station transferred (52 ) Less: Contingent consideration (31 ) Gain on asset exchange $ — and liabilities assumed in the ARPamal Broadcasting Asset Purchase (dollars in thousands): Amount $ 93 1,256 23 16,850 (152 ) $ 18,070 The indefinite lived intangible assets acquired in the acquisition consist of broadcast licenses.Allocation Amount Plant, property, and equipment, net $ 783 Broadcast licenses 5,700 Total purchase price $ 6,483 Asset ExchangeTransaction occurred as of January 1, 2012.2013. This unaudited pro forma financial information has been prepared based on estimates and assumptions, which management believes are reasonable, and is not necessarily indicative of the consolidated financial position or results of operations that Cumulus would have achieved had either the WestwoodOne Acquisition or the Townsquare Asset ExchangeTransaction actually occurred on January 1, 20122013 or on any other historical dates,date, nor is it reflective of the Company’s expected actual financial position or results of operations for any future period (dollars in thousands): Unaudited
Supplemental
Pro Forma Data Three Months Ended
March 31, 2012 $ 238,527 (12,754 ) Three Months Ended March 31, Description 2013 Net revenue $ 281,535 Net loss (27,502 ) 20122013 includes adjustments to reflect: (i) depreciation and amortization expense based on the fair value of long-lived assets acquired in the WestwoodOne Acquisition and the Townsquare Asset Exchange;Transaction; (ii) the elimination of interest expense and the loss on extinguishment of debt in connection with the WestwoodOne Acquisition, as all of WestwoodOne's outstanding indebtedness (including preferred stock) was repaid in connection therewith and (iii) certain other unaudited pro forma adjustments thatCompleted Dispositionscompany did not complete any material dispositions duringresults of operations associated with the stations disposed of in that transaction has been separately reported within discontinued operations, net of the related tax impact, in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2013 or 2012.3. Discontinued OperationsOn July 31, 2012, the Company completed the Townsquare Asset Exchange. The transaction is part of the Company’s ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters. The results of operations associated with these stations were separately reported, net of the related tax impact, for all periods presented in the accompanying condensed consolidated statements of operations.Components of Results of Discontinued Operations and 2012, income from discontinued operations was as follows (dollars in thousands): Three Months Ended
March 31, 2013 2012 $ — $ 9,321 — 2,392 — 2,392 — (1,916 ) $ — $ 476 Three Months Ended March 31, 2013 Discontinued operations: Net revenue $ 15,033 Income from discontinued operations before taxes 4,934 Income tax benefit 12,741 Income from discontinued operations $ 17,675 20132014 and December 31, 2012,2013, the Company’s balance sheet included approximately $6.1$6.1 million and $5.9 million in restricted cash, of which $2.3 million related to a cash reserve from the Company’s previously completed acquisition of Citadel Broadcasting Company (“Citadel”) (the “Citadel Merger”). The reserve is expected to be used to satisfy the remaining allowed, disputed or not reconciled unsecured claims related to Citadel’s prior bankruptcy proceedings. For both periods, at March 31, 2013, and December 31, 2012 $0.6 million of the restricted cash balance relates to securing the maximum exposure generated by automated clearing houseclearinghouse transactions in the Company’sCompany's operating bank accounts and as dictated by the Company’s bank’sCompany's bank's internal policies with respect to cash. At March 31, 20132014 and December 31, 2012 $3.22013, the Company held $5.5 million and 0.7 million of the restricted cash balance relates relating to collateral on the Company’scollateralizing standby letters of credit. At December 31, 2012, amounts held in escrow relatedcredit pertaining to pending acquisitions were $2.3 million.and goodwill respectively during the periods from January 1, 20122013 to December 31, 20122013 and January 1, 20132014 to March 31, 2013,2014, and balances as of such dates (dollars in thousands): Indefinite-Lived Definite-Lived Total $ 1,625,415 $ 390,509 $ 2,015,924 — (1,027 ) (1,027 ) 22,253 376 22,629 (14,706 ) (12,435 ) (27,141 ) (30,589 ) (6,880 ) (37,469 ) — (112,240 ) (112,240 ) 1,602,373 258,303 1,860,676 41,195 — 41,195 (1,524 ) — (1,524 ) — (21,453 ) (21,453 ) $ 1,642,044 $ 236,850 $ 1,878,894 Indefinite-Lived Definite-Lived Total Intangible Assets: Balance as of January 1, 2013 $ 1,602,373 $ 258,303 $ 1,860,676 Acquisition 61,730 152,522 214,252 Disposition (67,766 ) (8,627 ) (76,393 ) Amortization — (86,708 ) (86,708 ) Balance as of December 31, 2013 1,596,337 315,490 1,911,827 Purchase price allocation adjustments 963 — 963 Acquisition — — — Disposition (50 ) — (50 ) Amortization — (19,972 ) (19,972 ) Balance as of March 31, 2014 $ 1,597,250 $ 295,518 $ 1,892,768 20132014 to March 31, 20132014 and January 1, 20122013 to March 31, 2012,2013, and balances as of such dates (dollars in thousands): 2013 2012 $ 1,525,335 $ 1,564,253 (329,741 ) (229,741 ) 1,195,594 1,334,512 11,461 — 784 (1,889 ) — — (105 ) 1,534,907 1,564,932 (329,741 ) (229,741 ) $ 1,205,166 $ 1,335,191 Goodwill: 2014 2013 Balance as of January 1: Goodwill $ 1,586,482 $ 1,525,335 Accumulated impairment losses (329,741 ) (329,741 ) Subtotal 1,256,741 1,195,594 Acquisition — 11,461 Purchase price allocation adjustments (726 ) (1,889 ) Balance as of March 31: Goodwill 1,585,756 1,534,907 Accumulated impairment losses (329,741 ) (329,741 ) Total $ 1,256,015 $ 1,205,166 and these intangible assets are comprised primarily of broadcast licenses and goodwill acquired through the acquisition of radio stations.stations and networks. The Company reviews the carrying value of its indefinite lived intangible assets and goodwill at least annually for impairment. If the carrying value exceeds the estimate of fair value, the Company calculates impairment as the excess of the carrying value of goodwill over its estimated fair value and charges the impairment to results of operations.operations in the period in which the impairment occurred. The Company reviews the carrying value of its definite-lived intangible assets for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.In connection with each of the WFME Asset Exchange, the Pamal Broadcasting Asset Purchase, and the AR Broadcasting Asset Purchase, the Company made certain allocations of the purchase price paid therein among each of the tangible and intangible assets and liabilities acquired, including goodwill. Such purchase price allocations are preliminary and subject to change during the respective measurement periods. Any such changes could be material, and could result in significantly different allocations from those contained in the tables above.$71.3 million.$71.3 million. The agreement caps the LIBOR-based variable interest rate component of the Company’s long-term debt at a maximum of 3.0% on an equivalent amount of the Company’s term loans. The unaudited condensed consolidated balance sheets as of March 31, 20132014 and December 31, 20122013 include long term-assets of less than one hundred thousand dollars$0.1 million attributable to the fair value of the interest rate cap. The Company reported interest expense of $0.0less than $0.1 million and $0.1 million during the three months ended March 31, 2013,2014 and March 31, 20122013, respectively, attributed to the change in fair value adjustment. The interest rate cap matures on December 8, 2015.wherebypursuant to which the Company iswas responsible for operating (i.e.(i.e., programming, advertising, etc.) five radio stations in Green Bay, Wisconsin, and must pay Clear Channelfor a monthly fee payable to Clear Channel of approximately $0.2$0.2 million over a five year term (expiring December 31, 2013), in exchange for the Company retaining the operating profits from managing the radio stations. In 2013, Clear Channel also has aexercised the put option (the “Green Bay Option”) that allows it to requirecontained in this LMA, which required the Company to purchase the five Green Bay radio stations at any time during the two-month period commencing July 1, 2013 (or earlier ifsubject of the LMA is terminated before this date) for $17.6$17.6 million (the fair value of thethose radio stations asat the time of April 10, 2009)execution of the LMA) ("the Green Bay Option"). On December 31, 2013, the Company completed this acquisition (See Note 2 "Acquisitions and Dispositions").accountsaccounted for the Green Bay Option as a derivative contract. Accordingly, the fair value of the Green Bay Option was recorded as a liability with subsequent changes in the fair value recorded through earnings.earnings through the closing of the acquisition. The fair value of the Green Bay Option was determined using inputs that arewere supported by little or no market activity (a “Level 3” measurement). The fair value representsrepresented an estimate of the amount that the Company would have been required to pay if the option waswere transferred to another party as of the date of the valuation.The unaudited condensed consolidated balance sheets as of March 31, 2013 and December 31, 2012 reflect other current liabilities of $10.6 million and $11.4 million to include the fair value of the Green Bay Option. The Company recorded $0.7 million and $0.1 million in gains on derivative instruments associated with marking to market the Green Bay Option to reflect the fair value of the option during each of the three months ended March 31, 2013 and 2012, respectively.amounts of derivatives in the unaudited condensed consolidated balance sheets are shown in the following table:Information on the Location and Amounts of Derivatives Fair Values in theConsolidated Balance Sheetstable (dollars in thousands) Fair Value Derivative Instruments March 31,
2013 December 31,
2012 $ 40 $ 44 (10,648 ) (11,386 ) $ (10,608 ) $ (11,342 ) Fair Value Derivative Instruments Balance Sheet Location December 31, 2013 Derivatives not designated as hedging instruments: Interest Rate Cap Other long-term assets $ 7 $ 22 Total $ 7 $ 22 Recognized on Derivatives For the Three Months Ended
March 31, Derivative Instruments 2013 2012 $ 5 $ 85 (738 ) (88 ) $ (733 ) $ (3 ) Recognized on Derivatives Derivative Instruments Statement of Operations Location 2014 2013 Interest Rate Cap Interest expense $ 14 $ 5 Green Bay Option Gain on derivative instrument — (738 ) Total $ 14 $ (733 ) 20132014 and December 31, 20122013 (dollars in thousands): March 31, 2013 December 31, 2012 $ 1,318,375 $ 1,321,687 790,000 790,000 — — (19,860 ) (20,620 ) 2,088,515 2,091,067 610,000 610,000 (48,868 ) (76,468 ) $ 2,649,647 $ 2,624,599 First Lien March 31, 2014 December 31, 2013 Term Loan and Securitization Facility: First lien term loan $ 2,019,063 $ 2,025,000 Securitization facility — 25,000 Less: term loan discount (32,040 ) (33,107 ) Total Term Loan and Securitization Facility 1,987,023 2,016,893 7.75% senior notes 610,000 610,000 Less: Current portion of long-term debt (19,376 ) (5,937 ) Long-term debt, net $ 2,577,647 $ 2,620,956 Second LienRestated Credit FacilitiesSeptember 16, 2011,December 23, 2013, the Company entered into a (i) First Lienan Amended and Restated Credit Agreement (as amended and restated the “First Lien Facility”(the “Credit Agreement”), among the Company, Cumulus Media Holdings Inc., a direct wholly-owned subsidiary of the Company (“Cumulus Holdings”), as Borrower,borrower, and certain lenders JPMorgan as Administrative Agent, UBS, Macquarie, Royal Bank of Canada and ING Capital LLC, as Co-Syndication Agents, and U.S. Bank National Association and Fifth Third Bank, as Co-Documentation Agents; and (ii) Second Lienagents. The Credit Agreement (the “Second Lien Facility” and, together with the First Lien Facility, the “2011 Credit Facilities”), among the Company, Cumulus Holdings, as Borrower, certain lenders, JPMorgan, as Administrative Agent, and UBS, Macquarie, Royal Bank of Canada and ING Capital LLC, as Co-Syndication Agents.The First Lien Facility consists of a $1.325$2.025 billion first lien term loan facility, net of an original issue discount of $13.5 million,(the “Term Loan”) maturing in September 2018 (the “First Lien Term Loan”),December 2020 and a $300.0$200.0 million revolving credit facility maturing in September 2016 (the “Revolving Credit Facility”). maturing in December 2018. Under the Revolving Credit Facility, up to $30.0 million of availability may be drawn in the form of letters of creditcredit. up to $30.0 million is available for swingline borrowings. The Second Lien Facility consists of a $790.0 million second lien term loan facility, net of an original issue discount of $12.0 million, maturing in September 2019 (the “Second Lien Term Loan”).Proceeds from borrowings under the First Lien Facility and Second Lien Facility were used, together with certain other funds, to (i) fund the cash portion of the purchase price paid in the Citadel Merger; (ii) repay in full amounts outstanding under the revolving credit facility under the Company’s pre-existing credit agreement (the “TerminatedRevolving Credit Agreement”); (iii) repay all amounts outstanding under the credit facilities of CMP Susquehanna Corporation (“CMPSC”), an indirect wholly-owned subsidiary of CMP; (iv) redeem CMPSC’s outstanding 9.875% senior subordinated notes due 2014 and variable rate senior secured notes due 2014; (v) redeem in accordance with their terms all outstanding shares of preferred stock of Radio Holdings and the direct parent of CMPSC; and (vi) repay all amounts outstanding, including any accrued interest and the premiums thereon, under Citadel’s pre-existing credit agreement and to redeem its 7.75% Senior Notes.On December 20, 2012, the Company entered into an amendment and restatement (the “Amendment and Restatement”) of its First Lien Facility. Pursuant to the Amendment and Restatement, the terms and conditions contained in the First Lien Facility remained substantially unchanged, except as follows: (i) the amount outstanding thereunder was increased to $1.325 billion; (ii) the margin for LIBOR (as defined below) based borrowings was reduced from 4.5% to 3.5% and for Base Rate (as defined below) -based borrowings was reduced from 3.5% to 2.5%; and (iii) the LIBOR floor for LIBOR-based borrowings was reduced from 1.25% to 1.0%.The Amendment and Restatement had both a debt modification and extinguishment for accounting purposes. As a result, the Company wrote off $2.4 million of deferred financing costs related to the First Lien Facility which has been included in the “Loss on early extinguishment of debt” caption of the consolidated statement of operations for the year ended December 31, 2012. The Company also capitalized $0.8 million of deferred financing costs related to the Amendment and Restatement.Borrowings under the First Lien Facility bear interest, at the option of Cumulus Holdings, based on the Base Rate (as defined below) or the London Interbank Offered Rate (“LIBOR”), in each case plus 3.5%3.25% on LIBOR-based borrowings and 2.5%2.25% on Base Rate-based borrowings. LIBOR-based borrowings are subject to a LIBOR floor of 1.0% forunder the First Lien Term Loan and 1.0% for the Revolving Credit Facility.Loan. Base Rate-based borrowings are subject to a Base Rate Floor of 2.25% for2.0% under the First Lien Term Loan and 2.0% for the Revolving Credit Facility.Loan. Base Rate is defined, for any day, as the fluctuating rate per annum 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 prime commercial lending rate of JPMorgan Chase Bank, N.A., as established from time to time, and (iii) 3090 day LIBOR plus 1.0%. The First LienAmounts outstanding under the Term Loan amortizesamortize at a per annum rate of 1.0% per annum of the original principal amount of the First Lien Term Loan, payable quarterly, which commenced oncommencing March 31, 2012,2014, with the balance payable on the maturity date. Amounts outstanding under the Revolving Credit Facility are due and payable on the maturity date.Borrowings under the Second Lien Facility bear interest, at the option of Cumulus Holdings, at either the Base Rate plus 5.0%, subject to a Base Rate floor of 2.5%, or LIBOR plus 6.0%, subject to a LIBOR floor of 1.5%. The Second Lien Term Loan original principal amount is due on the maturity date, September 16, 2019.Interest on Base Rate-based borrowings is due on the last day of each calendar quarter, except with respect to swingline loans, for which interest is due on the day that such swingline loan is required to be repaid. Interest payments on loans whose interest rate is based upon LIBOR are due at maturity if the term is three months or less or every three months and at maturity if the term exceeds three months.2013, borrowings under2014, the First Lien Term Loan bore interest at 4.5%4.25% per annum and borrowings under the Second Lien Term Loan bore interest at 7.5% per annum. Effective December 8, 2011, the Company entered into the Interest Rate Cap with an aggregate notional amount of $71.3 million, which agreement caps the interest rate on an equivalent amount of the Company’s LIBOR based term loans at a maximum of 3.0% per annum. The Interest Rate Cap matures on December 8, 2015. See Note 5, “Derivative Financial Instruments” for additional information.2011 Credit Facilities and financial covenants in the First Lien FacilityAgreement are customary for financing transactions of this nature. Events of default in the 2011 Credit FacilitiesAgreement include, among others: (a) the failure to pay when due the obligations owing under the credit facilities;thereunder; (b) the failure to comply with (and not timely remedy, if applicable) certain financial covenants (as required by the First Lien Facility);covenants; (c) certain cross defaults and cross accelerations;accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against the Company or any of its restricted subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use one or more of, any material FCCFederal Communications Commission ("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 First Lien Facility and the Second Lien Facility, as applicable)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 First Lien Facility and the Second Lien Facility, as applicable,Credit Agreement and the ancillary loan documents as a secured party.First Lien FacilityCredit Agreement requires compliance with a consolidated totalfirst lien net leverage ratio. Atratio covenant as of the end of each quarter. The required ratio at March 31, 2013, this2014 was 5.75 to 1. The ratio would have been 6.5periodically decreases until it reaches 4.00 to 1.0. Such ratio will be reduced1 on March 31, 2018. As of March 31, 2014, the Company was in future periods if amounts are outstandingcompliance with all of its covenants under the Revolving Credit Facility at an applicable date. The Second Lien Facility does not contain any financial covenants. At March 31, 2013, if we were subject to compliance with this ratio, we would not have been in compliance therewith. As a result borrowings under the revolving credit facility were not available at that date.The First Lien Facility also requires our compliance with customary restrictive non-financial covenants, which, among other things, and with certain exceptions, limit the Company’s ability to incur or guarantee additional indebtedness; consummate asset sales, acquisitions or mergers; make investments; enter into transactions with affiliates; and pay dividends or repurchase stock. First Lien Term Loan and the Second Lien Term Loan are required upon the occurrence of specified events, including upon the incurrence of certain additional indebtedness, upon the sale of certain assets and upon the occurrence of certain condemnation or casualty events, and from excess cash flow.Based upon the calculation of excess cash flow at December 31, 2012, the Company was required to make a mandatory prepayment on the First Lien Term Loan. Due to certain rights retained by the lenders to decline proportionate shares of such prepayments, the final prepayment amount was reduced from $63.2 million to $35.6 million of which a portion was applied to the Second Lien Term Loan. The prepayment was made on April 1, 2013 and has been classified in the current portion of long-term debt caption of the condensed consolidated balance sheet.First Lien Facility and the Second Lien FacilityCredit Agreement are collateralized by a first priority lien and second priority lien, respectively, on substantially all of the Company’s, Cumulus Holdings’ and their respective restricted subsidiaries’ assets (excluding the Company’s accounts receivable collateralizing the Company's revolving accounts receivable securitization facility (the “Securitization Facility”) with General Electric Capital Corporation (“GE”) as described below) in which a security interest may lawfully be granted, including, without limitation, intellectual property and substantially all of the capital stock of the Company’s direct and indirect domestic wholly-owned subsidiaries and 66.0%66% of the capital stock of any future first-tier foreign subsidiaries. In addition, Cumulus Holdings’ obligations under the First Lien Facility and the Second Lien FacilityCredit Agreement are guaranteed by the Company and substantially all of its restricted subsidiaries, other than Cumulus Holdings.$610.0$610.0 million aggregate principal amount of the its 7.75% Senior Notes.Notes due 2019 (the "7.75% Senior Notes"). Proceeds from the sale of the 7.75% Senior Notes were used to, among other things, repay the $575.8$575.8 million outstanding under the term loan facility under the Terminated Credit Agreement.2019.also redeem up to 35.0% of the 7.75% Senior Notes using the proceeds from certain equity offerings. At any time prior to May 1, 2015, Cumulus Holdings may redeem some or all of the 7.75% Senior Notes at a price equal to 100% of the principal amount, plus a “make-whole” premium. If Cumulus Holdings sells certain assets or experiences specific kinds of changes in control, it will be required to make an offer to purchase the 7.75% Senior Notes.2013 and 20122014, the Company recorded an aggregate of $2.6$2.3 million and $3.0 million, respectively, of amortization of debt discount and debt issuance costs related to its First LienTerm Loan and Second Lien Credit Facilities7.75% Senior Notes. For the three months ended March 31, 2013,20132014 and December 31, 20122013 were as follows (dollars in thousands): Fair Value Measurements at March 31, 2013 Date Using Total Fair
Value Quoted
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Observable
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(Level 2) Significant
Unobservable
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(Level 3) $ 40 $ — $ 40 $ — $ 40 $ — $ 40 $ — $ (10,648 ) $ — $ — $ (10,648 ) (31 ) (31 ) $ (10,679 ) $ — $ — $ (10,679 ) Fair Value Measurements at December 31, 2012 Using Total Fair
Value Quoted
Prices in
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(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
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(Level 3) $ 44 $ — $ 44 $ — $ 131,997 $ 131,997 $ 384,350 $ 384,350 $ 516,391 $ — $ 44 $ 516,347 $ (11,386 ) $ — $ — $ (11,386 ) $ (11,386 ) $ — $ — $ (11,386 ) Fair Value Measurements at March 31, 2014 Using Financial assets: Interest Rate Cap (1) $ 7 $ — $ 7 $ — Equity interest in Pulser Media (2) 2,009 — — 2,009 Total assets $ 2,016 $ — $ 7 $ 2,009 Financial liabilities: Other current liabilities Contingent consideration (3) $ (31 ) $ — $ — $ (31 ) Total liabilities $ (31 ) $ — $ — $ (31 ) Fair Value Measurements at December 31, 2013 Using Financial assets: Interest Rate Cap (1) $ 22 $ — $ 22 $ — Equity interest in Pulser Media (2) 122 — — 122 Total assets $ 144 $ — $ 22 $ 122 Financial liabilities: Other current liabilities Contingent consideration (3) $ (31 ) $ — $ — $ (31 ) Total liabilities $ (31 ) $ — $ — $ (31 ) (1) The Company’s only derivative financial instrument is pursuant to which the Company pays a fixed interest rate on a $71.3$71.3 million notional amount of its term loans.loan. The fair value of the Interest Rate Cap is determined based on a discounted cash flow analysis onof the expected future cash flows using observable inputs, including interest rates and yield curves. Derivative valuations incorporate adjustments that are necessary to reflect the credit risk.(2) On September 13, 2013, the Company and Pulser Media (the parent company of Rdio) ("Pulser"), entered into a five year strategic promotional partnership and sales arrangement (the "Rdio Agreement"). In accordanceexchange for $75 million of promotional commitments over five years, Cumulus will receive 15% of the current fully-diluted equity of Pulser, with the provisions of ASC 350, goodwill with a carrying amount of $232.0 million was written downopportunity to its implied fair value of $132.0 million, resulting in an impairment charge of $100.0 million, which was included in earnings for the year ended December 31, 2012.(3)In accordance with the provisions of ASC 350, FCC licenses with a carrying amount of $399.1 million was written down to its fair value of $384.4 million, resulting in an impairment charge of $14.7 million, which has been included in earnings for the year ended December 31, 2012.(4)earn additional equity, see Note 13 "Commitments and Contingencies". The fair value of the Green Bay Optionequity interest in Pulser was determined using inputs that are supported by little or no market activity (a Level 3 measurement). The fair value represents an estimate of the net amount that the Company would pay if the option was transferred to another party as of the date of the valuation. The option valuation incorporates a credit risk adjustment to reflect the probability of default by the Company.(5)(3) The fair value of the contingent consideration was determined using inputs that are supported by little or no market activity (a Level 3 measurement). Contingent consideration represents the fair value of the additional cash consideration to be paid to the sellers of the assets purchasedpotentially payable as part of the WFME Asset Exchange if certain future conditions are met as detailed in the purchase agreement.Exchange. See Note 2 “Acquisitions and Dispositions”.interest rate capInterest Rate Cap are measured within Level 2 onof the fair value hierarchy. To estimate the fair value of the interest rate cap,Interest Rate Cap, the Company used an industry standard cash valuation model, which utilizes a discounted cash flow approach, with all significant inputs derived from or corroborated by observable market data. See Note 5,6, “Derivative Financial Instruments.”Green Bay Optionequity interest in Pulser from January 1, 20132014 to March 31, 20132014 (dollars in thousands): Green Bay Option $ (11,386 ) 738 $ (10,648 ) Description Equity interest in Pulser Fair value balance at January 1, 2014 $ 122 Add: Additions to equity interest in Pulser 1,887 Fair value balance at March 31, 2014 $ 2,009 Description Contingent Consideration Fair value balance at January 1, 2014 $ (31 ) Add: Mark to market fair value adjustment — Fair value balance at March 31, 2014 $ (31 ) Green Bay Optioncontingent consideration as of March 31, 20132014 was as follows (dollars in thousands): $ (10,648) 6.4% less than 1 year 30.0% 0.0% 0.1% Fair Value Valuation Technique Unobservable Inputs $ 31 Income Approach Total term 5 years Conditions 3 Bond equivalent yield discount rate 0.1 % For example, a decrease in the risk adjusted discount rate would result in a higher liability.Quantitative information regarding the significant unobservable inputs related to the contingent consideration as of March 31, 2013 was as follows:Fair ValueValuation TechniqueUnobservable Inputs$ 31,000Income ApproachTotal term5 yearsConditions3Bond equivalent yield discount rate0.1%Significant increases (decreases) in any of the inputs in isolation would result in a lower (higher) fair value measurement.term loansTerm Loan, Securitization Facility and 7.75% Senior Notes (dollars in thousands): March 31,
2013 December 31,
2012 $ 1,318,375 $ 1,321,687 1,331,559 1,331,600 $ 790,000 $ 790,000 821,600 811,725 $ 610,000 $ 610,000 625,250 599,325 March 31, 2014 December 31, 2013 Term Loan: Carrying value $ 2,019,063 $ 2,025,000 Fair value - Level 2 2,039,254 2,025,000 Securitization Facility: Carrying value $ — $ 25,000 Fair value - Level 2 — 25,000 7.75% Senior Notes: Carrying value $ 610,000 $ 610,000 Fair value - Level 2 649,650 641,598 2013,2014, the Company used the trading prices of 101.0% and 104.0% to calculate the fair value of the First Lien Term Loan, and Second Lien Term Loan, respectively, and 102.5%106.50% to calculate the fair value of the 7.75% Senior Notes.2012,2013, the Company used the trading prices of 100.75% and 102.75%100.00% to calculate the fair value of the First Lien Term Loan and Second Lien Term Loan, respectively,the Securitization Facility, and 98.3%105.18% to calculate the fair value of the 7.75% Senior Notes. Redeemable Preferred StockIn connection with the Citadel Merger on September 15, 2011, the Company designated 2,000,000 shares of its authorized preferred stock as Series A, par value $0.01 per share, with a liquidation preference of $1,000 per share (“Series A Preferred Stock”). As a part of the financing transactions entered into in connection therewith (the “Equity Investment”) the Company issued 125,000 shares of Series A Preferred Stock for an aggregate amount of $125.0 million. Net proceeds to the Company were $110.7 million after deducting $14.3 million in fees. No other shares of Series A Preferred Stock are issuable in the future, except for such shares as may be issued as dividends in lieu of any cash dividends in accordance with the terms thereof, and the Series A Preferred Stock ranks senior to all common stock and each series of stock the Company may subsequently designate with respect to dividends, redemption and distributions upon liquidation, winding-up and dissolution of the Company.The Series A Preferred Stock has a perpetual term, a liquidation value equal to the amount invested therein plus any accrued but unpaid dividends, and dividend rights as described below. The Series A Preferred Stock generally does not have voting rights, except with respect to any amendment to the Company’s certificate of incorporation that would adversely affect the rights, privileges or preferences of the Series A Preferred Stock. Although the shares of Series A Preferred Stock include a mandatory redemption feature, there is no stated or probable date of redemption.Holders of Series A Preferred Stock are entitled to receive mandatory and cumulative dividends in an amount per annum equal to the dividend rate (described below) multiplied by the liquidation value, calculated on the basis of a 360-day year, from the date of issuance, whether or not declared and whether or not the Company reports net income. Dividends are payable in arrears in cash, except that, at the option of the Company, up to 50.0% of the dividends for any period may be paid through the issuance of additional shares of Series A Preferred Stock. Payment of dividends on the Series A Preferred Stock is in preference and prior to any dividends payable on any class of the Company’s common stock.Dividends on the Series A Preferred Stock accrued at an annual rate of 10.0% from the date of issuance of the Series A Preferred Stock through March 15, 2012. After such date, dividends accrue at an annual rate as follows:14.0% through September 15, 2013;17.0% plus the increase in the 90-day LIBOR from September 16, 2011 to September 16, 2013 for the period commencing on September 16, 2013 and ending on September 15, 2015; and20.0% plus the increase in the 90-day LIBOR from September 16, 2011 to September 16, 2015 for all periods commencing on or after September 16, 2015, with an adjustment to the rate every two years thereafter.In the event of the liquidation, dissolution or winding-up of the affairs of the Company, whether voluntary or involuntary, the holders of Series A preferred stock at the time shall be entitled to receive liquidating distributions with respect to each share of Series A Preferred Stock in an amount equal to the amount invested therein plus any accrued but unpaid dividends, and dividend rights to the fullest extent permitted by law, before any distribution of assets is made to the holders of our common stock.Additionally, upon receipt by the Company of net cash proceeds from (i) the issuance by the Company or any of its subsidiaries of debt for borrowed money or (ii) the issuance by the Company or any of its subsidiaries of equity, the Company shall redeem, for cash, to the fullest extent permitted by law, that number of shares of Series A preferred stock with an aggregate redemption price equal to the lesser of (1) an amount equal to 100% of such net cash proceeds and (2) the $125.0 million aggregate par value of the Series A Preferred Stock plus any accrued but unpaid dividends.In conjunction with the CMP Acquisition, the Company assumed preferred stock of CMP with a fair value of $41.1 million as of August 1, 2011, which consisted of the par value of $32.7 million plus cumulative undeclared dividends of $8.3 million as of the acquisition date. The Company recorded $0.5 million in dividends for the period from the date of the CMP Acquisition, August 1, 2011, to September 16, 2011. This preferred stock was redeemed on September 16, 2011 for $41.6 million.Total dividends accrued on the Series A Preferred Stock during the three months ended March 31, 2013 and 2012 and were $2.7 million and $3.3 million, respectively. Total dividends paid on the Series A Preferred Stock during the three months ended March 31, 2013 and 2012 and were $2.7 million and $3.1 million, respectively. During the three months ended March 31, 2013 and 2012, the Company accreted $0.5 million and $2.4 million, respectively, on the Series A Preferred Stock. At March 31, 2013, 75,767 shares of Series A Preferred Stock remain outstanding. The accretion of Series A Preferred Stock resulted in an equivalent reduction in additional paid-in capital on the consolidated balance sheet at March 31, 2013 and March 31, 2012. The Company paid approximately $2.7 million in cash dividends in April 2013, in accordance with the terms described above.10. Stockholders’ Equity$0.01$0.01 per share (see Note 9, “Redeemable Preferred Stock”). Effective Septembershare.2011, upon the filing of the Third Amended and Restated Charter, each then-outstanding share of Class D common stock was converted to one share of Class B common stock.In connection with the August 1, 2011 CMP Acquisition, the Company issued approximately 3.3 million shares of Class A common stock and 6.6 million shares of Class B common stock to affiliates of the three private equity firms that had collectively owned the 75.0% of CMP not then-owned by the Company. Also in connection with the CMP Acquisition, the 3.7 million outstanding CMP Restated Warrants were amended to become exercisable for up to 8.3 million shares of Class B common stock.In connection with the Citadel Merger, and in addition to the shares of common stock issued therein the Company issued warrants to purchase 47.6 million shares of Class A common stock (the “Citadel Warrants”) to holders of Citadel’s common stock and warrants. Additionally, 2.4 million warrants to purchase shares of the Company’s common stock related to the pending final settlement of certain outstanding unsecured claims arising from Citadel’s emergence from bankruptcy in June 2010 are held in reserve for potential future issuance by the Company, as described below.Also on September 16, 2011, and pursuant to the Equity Investment,2013, the Company issued and sold (i) 51.8 million18,860,000 shares of its Class A common stock and warrantsin an underwritten public offering, which included the full exercise of the underwriter’s over allotment option to purchase 7.82,460,000 shares, at a price of $5.00 per share. The Company received net proceeds after underwriting discounts and commissions and estimated offering expenses of $89.8 million and used approximately $78.0 million of the net proceeds from the offering to redeem all then-outstanding shares of Class A commonthe Company’s Series B preferred stock, with an exercise priceincluding accrued and unpaid dividends. The remaining net proceeds from the offering were placed in the Company’s corporate treasury for general corporate purposes, and may be used from time to time for, among other things, repayment of $4.34 per share (the “Crestview Warrants”) to an affiliatedebt, capital expenditures, the financing of Crestview; (ii) 125,000 sharespossible business expansions and acquisitions, increasing the Company’s working capital and the financing of Series A Preferred Stock to an affiliate of Macquarie (see Note 9, “Redeemable Preferred Stock”);ongoing operating expenses and (iii) 4.7 million shares of Class A common stock and warrants to purchase 24.1 million shares of Class A common stock (the “UBS Warrants,” and, together with the Citadel Warrants, the “Company Warrants”) to UBS and certain other investors to whom UBS syndicated a portion of its investment commitment.•Voting Rights. The holders of shares of Class A common stock are entitled to one vote per share on any matter submitted to a vote of the stockholders of the Company, and the holders of shares of Class C common stock are entitled to ten votes for each share of Class C common stock held. Generally, the holders of shares of Class B common stock are not entitled to vote on any matter. However, holders of Class B common stock and Class C common stock are entitled to a separate class vote on any amendment or modification of any specific rights or obligations of the holders of Class B common stock or Class C common stock, respectively, that does not similarly affect the rights or obligations of the holders of Class A common stock. The holders of Class A common stock and of Class C common stock vote together, as a single class, on all matters submitted to a vote to the stockholders of the Company.•Conversion. Each holder of Class B common stock and Class C common stock is entitled to convert at any time all or any part of such holder’s shares into an equal number of shares of Class A common stock; provided, however, that to the extent that such conversion would result in the holder holding more than 4.99% of the Class A common stock following such conversion, the holder will first be required to deliver to the Company an ownership certification to enable the Company to (a) to determine that such holder does not have an attributable interest in another entity that would cause the Company to violate applicable FCC rules and regulations and (b) obtain any necessary approvals from the FCC or the Department of Justice.AB Preferred Stock, the holders of all classes of common stock are entitled to share ratably in any dividends that may be declared by the board of directors of the Company.Terminated Credit Agreement,Company's then-outstanding credit agreement, the Company issued immediately exercisable warrants to the lenders under the Terminated Credit Agreementthereunder that allow them to acquire up to 1.3 million shares of Class A common stock at an exercise price of $1.17$1.17 per share (the “2009 Warrants”). The 2009 Warrants expire on June 29, 2019. The number of shares of Class A common stock issuable upon exercise of the 2009 Warrants is subject to adjustment in certain circumstances, including upon the payment of a dividend in shares of Class A common stock. At March 31, 2013, 1.02014, 0.6 million 2009 Warrants remained outstanding.CMP Restated WarrantsAs described above and in connection with the completion of the CMP Acquisition, Radio Holdings entered into an amended and restated warrant agreement, dated as of August 1, 2011 (the “Restated Warrant Agreement”). Pursuant to the Restated Warrant Agreement, and subject to the terms and conditions thereof, the previously outstanding 3.7 million Radio Holdings warrants were amended and restated to no longer be exercisable for shares of common stock of Radio Holdings but instead be exercisable, commencing on May 2, 2012 (the “Exercise Date”) at an exercise price of $0.01 per share, for an aggregate of approximately 8.3 million shares of Class B common stock (the “CMP Restated Warrants”). The CMP Restated Warrants expired by their terms on July 31, 2012. Prior to the termination thereof, approximately 3.7 million CMP Restated Warrants were converted into approximately 8.2 million shares of Class B common stock.emerged from bankruptcy effective June 3, 2010 and, as of September 16,Broadcasting Company ("Citadel") in 2011 certain bankruptcy-related claims against Citadel remained open for final resolution. As part of the Citadel Merger and as of March 31, 2013,(the "Citadel Merger"), warrants to purchase 2.4 million shares of the Company’s common stock were reserved for potential future issuance in connection with the settlement of thesecertain remaining allowed, disputed or not reconciled unsecured claims.claims related to Citadel's bankruptcy. If excess shares remain in reserve after resolution of all remaining allowed, disputed or not reconciled unsecured claims, such shares will be distributed to the claimants with allowed unsecured claims pro-rata, based on the number of shares they received pursuant to the plan under which Citadel emerged from bankruptcy. This equity held in reserve is included in additional paid-in-capital on the accompanying unaudited condensed consolidated balance sheets at March 31, 20132014 and December 31, 2012.At the effective timethe Company Warrants. The Company Warrants were issued under a warrant agreement (the “Warrant Agreement”), dated September 16, 2011, and the Company Warrants entitle the holders thereofwarrants to purchase an equivalent numberaggregate of71.7 million shares of Class A common stock.stock (the "Company Warrants") under a warrant agreement dated September 16, 2011 (the "Warrant Agreement"). The Company Warrants are exercisable at any time prior to June 3, 2030 at an exercise price of $0.01$0.01 per share. The exercise price of the Company Warrants is not subject to any anti-dilutionanti-dilution protection, other than standard adjustments in the case of stock splits, dividends and the like. Pursuant to the terms and conditions of the Warrant Agreement, upon the request of a holder, the Company has the discretion to issue, upon exercise of the Company Warrants, shares of Class B common stock in lieu of an equal number of shares of Class A common stock and, upon request of a holder and at the Company’s discretion, the Company has the right to exchange such warrants to purchase an equivalent number of shares of Class B common stock for outstanding warrants to purchase shares of Class A common stock.shallwill be made to holders of Company Warrants or common stock if (i) an FCC ruling, regulation or policy prohibits such distribution to holders of Company Warrants or (ii) the Company’s FCC counsel opines that such distribution is reasonably likely to cause (a) the Company to violate any applicable FCC rules or regulations or (b) any holder of Company Warrants to be deemed to hold an attributable interest in the Company.2013,2014, approximately 1.13.2 million Company Warrants were converted into shares of Class A common stock with an aggregate total of 35.3 million having been converted since issuance through stock. At March 31, 2013. At March 31, 2013, 36.32014, 14.0 million Company Warrants remained outstanding.Pursuant to the Equity Investment andthe Crestview Warrants. The warrants to purchase 7.8 million shares of Class A common stock with an exercise price of $4.34 per share (the "Crestview Warrants"). The Crestview Warrants are exercisable until September 16, 2021, and the $4.34 per share exercise price is subject to standard weighted average adjustments in the event that the Company issues additional shares of common stock or common stock derivatives for less than the fair market value per share, as defined in the Crestview Warrants, as of the date of such issuance. In addition, the number of shares of Class A common stock issuable upon exercise of the Crestview Warrants, and the exercise price of the Crestview Warrants, are subject to adjustment in the, case of stock splits, dividends and the like. As of March 31, 2013,2014, all 7.8 million Crestview Warrants remained outstanding.11.$4.32 per share.$0.6$0.6 million, to the non-employee directors of the Company with a cliff vesting term of one year. In addition, on February 16, 2012, the Company granted time-vesting stock options to purchase 1,357,5001.4 million shares of Class A common stock to certain Company employees, under the Cumulus Media Inc. 2011 Equity Incentive Plan, with an aggregate grant date fair value of $3.3 million.$3.3 million. The options have an exercise price of $4.34$4.34 per share, with 30% of the awards having vested on each of September 16, 2012 and February 16, 2013, and 20% having vested on February 16, 2014 and the final 20% vesting on February 16, 2015.20%an aggregate grant date fair value of $1.1 million. The options have an exercise price of $4.34 per share, and provide for vesting on each of February 16, 2014the first four anniversaries of the date of grant, with 30% of the award vesting on each of the first two anniversaries thereof, and 2015.Thehas certain liability-based awards relatedgranted 168,540 shares of time-vesting restricted Class A common stock, with an aggregate grant fair value of $0.6 million, to the cash consideration portionnon-employee directors of the Citadel Merger (“Liability Awards”)Company with a cliff vesting term of one year.20132014, and 2012,2013 the Company recognized $2.7approximately $4.1 million and $2.8$2.7 million, respectively in stock-based compensation expense related to equity awards. For the three months ended 2012, the Company recognized $4.2 million in stock-based compensation expense related to Liability Awards.As of March 31, 2013,2014$16.5$38.2 million related to equity awards is expected to be recognized over a weighted average remaining life of 2.53.14 years. There is no unrecognizedUnrecognized stock-based compensation expense related to Liability Awards as of March 31, 2013. Unrecognized stock-based compensation expensefor equity awards will be adjusted for future changes in estimated forfeitures.20132014 was $1.5 million.$1.0 million. The total fair value of restricted stock awards that vested during the three months ended March 31, 20122013 was $5.7$1.5 million of which $1.5. 1.1 million related to the Liability Awards and was paid in cash. No0 stock options were exercised during either of the three months ended March 31, 2012 or 2013.12. and 2013, respectively. (“EPS”)TheIn accordance with the terms of the Company's certificate of incorporation, the Company allocates undistributed net income (loss) from continuing operations after any allocation for preferred stock dividends between each class of common stock on an equal basis as the Third Amendment and Restated charter provides that the holders of each class of common stock have equal rights and privileges, except with respect to voting on certain matters. are, and the CMP Restated Warrants prior to their expiration were considered participating securities for purposes of calculating basic weighted average common shares outstanding in periods in which the Company records net income. Diluted earnings (loss) per share is computed in the same manner as basic earnings (loss) per share after assuming issuance of common stock for all potentially dilutive equivalent shares, which includes stock options and certain other warrants to purchase common stock. Antidilutive instruments are not considered in this calculation. Under the two-class method, net income (loss) is allocated to common stock and participating securities to the extent that each security may share in earnings (loss), as if all of the earnings (loss) for the period had been distributed. Earnings (loss) are allocated to each participating security and common shares equally, after deducting dividends declared or accretion on preferred stock.20132014 and 20122013 (amounts in thousands, except per share data): Three Months Ended
March 31, 2013 2012 $ (8,988 ) $ (12,606 ) 2,652 3,333 982 2,767 — — — — $ (12,622 ) $ (18,706 ) 174,748 149,369 $ (0.07 ) $ (0.13 ) $ (8,988 ) $ (12,606 ) 2,652 3,333 982 2,767 — — — — $ (12,622 ) $ (18,706 ) 174,748 149,369 — — 174,748 149,369 $ (0.07 ) $ (0.13 ) Three Months Ended March 31, 2014 2013 Basic Loss Per Share Numerator: Undistributed net loss from continuing operations $ (9,269 ) $ (26,663 ) Less: Dividends declared on redeemable preferred stock — 2,652 Accretion of redeemable preferred stock — 982 Basic undistributed net loss from continuing operations attributable to common shares $ (9,269 ) $ (30,297 ) Denominator: Basic weighted average shares outstanding 215,704 174,748 Basic undistributed net loss from continuing operations per share--attributable to common shares $ (0.04 ) $ (0.17 ) Diluted Loss Per Share: Numerator: Undistributed net loss from continuing operations $ (9,269 ) $ (26,663 ) Less: Dividends declared on redeemable preferred stock — 2,652 Accretion of redeemable preferred stock — 982 Basic undistributed net loss from continuing operations attributable to common shares $ (9,269 ) $ (30,297 ) Denominator: Basic weighted average shares outstanding 215,704 174,748 Effect of dilutive stock options and warrants — — Diluted weighted average shares outstanding 215,704 174,748 Diluted undistributed net loss from continuing operations attributable to common shares $ (0.04 ) $ (0.17 ) 20132014 and 20122013 excluded from the computation of diluted loss per share consisted of approximately 23.2 million and 39.8 million and 64.3 million,shares, respectively, additional shares of common stock to underlying outstanding warrants.13.warrants and stock options.Theaccounts forrecorded an income taxestax benefit of $7.6 million on a pre-tax loss from continuing operations of $16.9 million, resulting in accordance with authoritative accounting guidance which establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.The provision for income taxes reflects the Company’s estimate of thean effective tax rate expected to be applicable for the full current year. Tothree months ended March 31, 2014 of approximately extent that actualthree months ended March 31, 2013, the Company recorded an income tax expense of $2.0 million on a pre-tax resultsloss from continuing operations of $24.7 million, resulting in an effective tax rate for the year differ from the forecasted estimates applied at the endthree months ended March 31, 2013 of the most recent interim period, the actual tax rate recognized during 2013 could be different from the forecasted rate.for each period and the federal statutory rate of 35.0% for the three months ended March 31, 2014 primarily relates to state and local income taxes and changes in the valuation allowance on certain separate company filing jurisdiction net operating losses. For the three months ended March 31, 2013, the primary differences between the effective tax rate and federal statutory rate of 35.0% relate to state and local income taxes, tax amortization of broadcast licenses and goodwill; and assets classified as having an indefinite life for book purposes.As of March 31, 2013,goodwill, changes in the Company continues to maintain a full valuation allowance on its net deferred tax assets excluding deferred tax liabilities associated with the Company’s indefinite lived intangible assets and deferred cancellation of debt income for which no estimated amount of deferred tax assets are available to satisfy. 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. the application of the exception to the intra-period allocation tax accounting rules in accordance with ASC Topic 740, Accounting for Income Taxes ("ASC Topic 740") between continuing and discontinued operations which requires that continuing operations benefits from the lesser of the tax provision associated with discontinued operations or the overall provision on continuing operations. We believe our annual effective tax rate before discrete items for fiscal year 2014 will be approximately 39.0%.740,Accounting740.Income Taxes.which the Company does not believe they will to meet the more likely than not recognition standard for recovery. As of March 31, 2013, the Company does not believe it is more likely than not that themaintained a full valuation allowance on its net deferred tax assets will be recognized. Should the Company’s assessment change in a future period it may release all or a portion of the valuation allowance at such time, which would result in aexcluding deferred tax benefitliabilities associated with the Company's indefinite lived intangible assets and deferred cancellation of debt income for which no estimated amount of deferred tax assets were available to satisfy. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the period of adjustment.14.Company's financial statements or tax returns as well as future profitability.$75.0$75.0 million industry fee credit against fees previously paid in 2010 and 2011, with such fees to be credited over the remaining period of the contract. The Company began recognizing the ASCAP credits as a reduction in direct operating expenses on January 1, 2012. On August 28, 2012, the Federal District Court for the Southern District of New York approved a settlement between the RMLC and BMI concerning the fees payable covering the period January 1, 2010 through December 31, 2016. Included in the agreement is a $70.5$70.5 million industry fee credit against fees previously paid in 2010 and 2011, with such fees immediately available to the industry.Arbitron,Nielsen Audio, which publishes surveys for domestic radio markets. Certain of the Company’s subsidiaries have agreements with ArbitronNielsen Audio under which they receive programming ratings materials in a majority of their respective markets. The remaining aggregate obligation under the agreements with ArbitronNielsen Audio is approximately $187.0$153.5 million and is expected to be paid in accordance with the agreements through December 2017.The 2011 Credit Facilities contain provisions requiringuse the proceeds from the dispositiontime. In exchange for $75.0 million of assetspromotional commitments over five years, Cumulus will receive 15% of the Companycurrent fully-diluted equity of Pulser, with the opportunity to prepay amounts outstanding underearn additional equity in the First Lien Facility andform of warrants based on the Second Lien Facility (toachievement of certain performance milestones over the extent proceeds remain after the required prepayment of all amounts outstanding under the First Lien Facility), subject to the rightterm of the Rdio Agreement.use such proceedspay for broadcast rights that include news services and to acquire, improve or repair assets useful in its business, all within one year from the date of receipt of such proceeds. As of March 31, 2013, we have complied with these provisionspay for executives, talent, research, weather and reinvested the proceeds from the Townsquare Asset Exchange; as such, we will not be required to prepay principal outstanding under the 2012 Credit Facilities.2013,2014, the Company believes that it will meet such minimum obligations.is subjectmay be required to an increase in purchase pricepay additional cash consideration for the acquisition of WFME Station in New York.Companyliability under this agreement, which is currently, and expects that from timenot material to time in the future itCompany, will be partypaid out over an 18 month period and will be paid from an escrow fund holding a portion of the purchase price paid to or a defendant in, various claims or lawsuits that are generally incidentalcomplete the WestwoodOne Acquisition, which fund was created to its business. Thereimburse the Company expects that it will vigorously contest any such claims or lawsuits and believes that the ultimate resolution of any known claim or lawsuit will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.15.for liabilities associated with certain outstanding legal claims.2013,2014, Cumulus (the "Parent Guarantor") and certain of its 100% owned subsidiaries (such subsidiaries, the “Subsidiary Guarantors”) provided guarantees of the obligations of Cumulus Holdings (the "Subsidiary Issuer") under the 7.75% Senior Notes. These guarantees are full and unconditional (subject to customary release provisions) as well as joint and several. Certain of the Subsidiary Guarantors may be subject to restrictions on their respective ability to distribute earnings to Cumulus Holdings or Cumulus Media Inc. (the “Parent Guarantor”).the Parent Guarantor. Not all of the subsidiaries of Cumulus and Cumulus Holdings guarantee the 7.75% Senior Notes (such non-guaranteeing subsidiaries, collectively, the “Subsidiary Non-guarantors”).20132014 and 2012,2013, (ii) unaudited condensed consolidating balance sheets as of March 31, 20132014 and December 31, 2012,2013, and (iii) unaudited condensed consolidating statements of cash flows for the three months ended March 31, 20132014 and 2012,2013, of each of the Parent Guarantor, Cumulus Holdings, the Subsidiary Guarantors, and the Subsidiary Non-guarantors.unauditedsupplemental condensed consolidating financial statements asfor all periods presented.During the third quarter of 2012, Cumulus Media Inc. determined that it did not properly classify its preferred stock in its supplemental condensed consolidating financial information footnote in previous 2012 interim periods or at December 31, 2011. The Company should have presented the preferred stock balance and related accrued dividends in the Cumulus Media Inc. (Parent Guarantor) column and was inappropriately classified in the Cumulus Media Holdings Inc. (Subsidiary Issuer) column. There was no impact on the consolidated balance sheet, statement of income or statement of cash flows.2012,2013, Cumulus Media Inc. determined that it did not properly classify certain intercompany transactions in its supplemental condensed consolidating financial information footnote in previous 20122013 interim periods or at December 31, 2011. Theperiods. Specifically, the Company should have presented the intercompany transactionschanges in assets and liabilities within financingoperating activities as these transactions had been previously presented infor the operating cash flows section of the statement of cash flows. In addition, Cumulus determined that certain intercompany transactions were classified within investment in subsidiaries or additional paid-in capital and have classified such balancesParent Guarantor as intercompany transactions, as either intercompany receivables or intercompany payables depending on the nature of the balance. In the following disclosure, a separate line item entitled “Intercompany transactions, net” is presented on the condensed consolidating balance sheets and statements of cash flows.net within financing activities. There was no impact on the condensed consolidated balance sheet statement of income or statement of cash flows.financial information ascondensed consolidated statement of December 31, 2011 andcash flows for the three months ended March 31, 20122013 and will revise the interim condensed consolidating informationconsolidated statements of cash flows in future quarterly filings. Eliminations Net revenues $ — $ 104 $ 291,940 $ — $ — $ 292,044 Operating expenses: Content costs — — 108,493 — — 108,493 Other direct operating expenses — — 114,744 591 — 115,335 Depreciation and amortization — 458 28,423 — — 28,881 LMA fees — — 1,557 — — 1,557 Corporate expenses (including stock-based compensation expense of $4,091) — 19,194 — — — 19,194 Gain on sale of assets or stations — — (538 ) — — (538 ) Total operating expenses — 19,652 252,679 591 — 272,922 Operating (loss) income — (19,548 ) 39,261 (591 ) — 19,122 Non-operating (expense) income: Interest (expense) income, net (2,576 ) (33,442 ) 129 (45 ) — (35,934 ) Other expense, net — — (65 ) — — (65 ) Total non-operating (expense) income, net (2,576 ) (33,442 ) 64 (45 ) — (35,999 ) (Loss) income before income taxes (2,576 ) (52,990 ) 39,325 (636 ) — (16,877 ) Income tax benefit (expense) 942 19,061 (12,599 ) 204 — 7,608 (Loss) income from continuing operations (1,634 ) (33,929 ) 26,726 (432 ) — (9,269 ) (Loss) earnings from consolidated subsidiaries (7,635 ) 26,294 (432 ) — (18,227 ) — Net (loss) income $ (9,269 ) $ (7,635 ) $ 26,294 $ (432 ) $ (18,227 ) $ (9,269 ) Cumulus
Media Inc.
(Parent Guarantor) Cumulus
Media
Holdings Inc.
(Subsidiary Issuer) Subsidiary
Guarantors Subsidiary
Non-guarantors Eliminations Total
Consolidated $ — $ — $ 232,872 $ — $ — $ 232,872 — — — — — — — — 232,872 — — 232,872 — — 163,683 489 — 164,172 — 497 28,433 — — 28,930 — — 969 — — 969
$2,663) — 13,866 — — — 13,866 — — 1,309 — — 1,309 — — (738 ) — — (738 ) — 14,363 193,656 489 — 208,508 — (14,363 ) 39,216 (489 ) — 24,364 (2,142 ) (42,112 ) 2 — — (44,252 ) — — 133 — — 133 (2,142 ) (42,112 ) 135 — — (44,119 ) (2,142 ) (56,475 ) 39,351 (489 ) — (19,755 ) — — 1,195 9,572 — 10,767 (2,142 ) (56,475 ) 40,546 9,083 — (8,988 ) — — — — — — (6,846 ) 49,629 9,083 — (51,866 ) — $ (8,988 ) $ (6,846 ) $ 49,629 $ 9,083 $ (51,866 ) $ (8,988 ) Eliminations Net revenues $ — $ — $ 217,839 $ — $ — $ 217,839 Operating expenses: Content costs — — 61,951 — — 61,951 Other direct operating expenses — — 92,991 489 — 93,480 Depreciation and amortization — 497 27,099 — — 27,596 LMA fees — — 946 — — 946 Corporate expenses (including stock-based compensation expense of $2,663) — 14,018 — — — 14,018 Loss on sale of assets or stations — — 1,309 — — 1,309 Gain on derivative instrument — — (738 ) — — (738 ) Total operating expenses — 14,515 183,558 489 — 198,562 Operating (loss) income — (14,515 ) 34,281 (489 ) — 19,277 Non-operating (expense) income: — Interest (expense) income, net (2,142 ) (42,112 ) 2 — — (44,252 ) Other expense, net — — 287 — — 287 Total non-operating (expense) income, net (2,142 ) (42,112 ) 289 — — (43,965 ) (Loss) income before income taxes (2,142 ) (56,627 ) 34,570 (489 ) — (24,688 ) Income tax expense — — (219 ) (1,756 ) — (1,975 ) (Loss) income from continuing operations (2,142 ) (56,627 ) 34,351 (2,245 ) — (26,663 ) Income from discontinued operations, net of taxes — — 6,348 11,327 — 17,675 (Loss) earnings from consolidated subsidiaries (6,846 ) 49,781 9,082 — (52,017 ) — Net (loss) income $ (8,988 ) $ (6,846 ) $ 49,781 $ 9,082 $ (52,017 ) $ (8,988 ) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSThree Months Ended March 31, 2012(Dollars in thousands)(Unaudited) Cumulus
Media Inc.
(Parent Guarantor) Cumulus
Media
Holdings Inc.
(Subsidiary Issuer) Subsidiary
Guarantors Subsidiary
Non-guarantors Eliminations Total
Consolidated $ — $ — $ 235,965 $ — $ — $ 235,965 30 — — — — 30 30 — 235,965 — — 235,995 — — 153,098 529 — 153,627 221 — 34,661 — — 34,882 — — 839 — — 839 15,606 — 1,086 — — 16,692 — — (88 ) — — (88 ) 15,827 — 189,596 529 — 205,952 (15,797 ) — 46,369 (529 ) — 30,043 (95 ) (51,004 ) 296 — — (50,803 ) — — 262 — — 262 (95 ) (51,004 ) 558 — — (50,541 ) (15,892 ) (51,004 ) 46,927 (529 ) — (20,498 ) — — 926 6,966 — 7,892 (15,892 ) (51,004 ) 47,853 6,437 — (12,606 ) — — 2,156 (1,680 ) — 476 3,762 54,766 4,757 — (63,285 ) — $ (12,130 ) $ 3,762 $ 54,766 $ 4,757 $ (63,285 ) $ (12,130 ) CUMULUS MEDIA INC.20132014 Cumulus
Media Inc.
(Parent
Guarantor) Cumulus
Media
Holdings Inc.
(Subsidiary Issuer) Subsidiary
Guarantors Subsidiary
Non-guarantors Eliminations Total
Consolidated $ — $ 80,659 $ 2,147 $ — $ — $ 82,806 — 6,096 — — — 6,096 — — 164,099 — — 164,099 — — 5,926 — — 5,926 — 17,696 29,603 — — 47,299 — 104,451 201,775 — — 306,226 — 4,280 247,179 — — 251,459 — — — 1,642,044 — 1,642,044 — — 236,850 — — 236,850 — — 1,205,166 — — 1,205,166 381,568 3,407,209 1,176,378 — (4,965,155 ) — — 72,636 527,054 — (599,690 ) — — 57,532 18,453 — — 75,985 $ 381,568 $ 3,646,108 $ 3,612,855 $ 1,642,044 $ (5,564,845 ) $ 3,717,730 $ — $ 35,005 $ 65,646 $ — $ — $ 100,651 — — 4,754 — — 4,754 — 48,868 — — — 48,868 — — 10,648 — — 10,648 — 83,873 81,048 — — 164,921 — 2,039,647 — — — 2,039,647 — 610,000 — — — 610,000 — 3,966 39,918 — — 43,884 72,636 527,054 — — (599,690 ) — — — 84,680 465,666 — 550,346 72,636 3,264,540 205,646 465,666 (599,690 ) 3,408,798 72,368 — — — — 72,368 72,368 — — — — 72,368 1,838 — — — — 1,838 154 — — — — 154 6 — — — — 6 (252,341 ) — — — — (252,341 ) 1,514,098 205,805 3,855,690 2,139,674 (6,201,169 ) 1,514,098 (1,027,191 ) 175,763 (448,481 ) (963,296 ) 1,236,014 (1,027,191 ) 236,564 381,568 3,407,209 1,176,378 (4,965,155 ) 236,564 $ 381,568 $ 3,646,108 $ 3,612,855 $ 1,642,044 $ (5,564,845 ) $ 3,717,730 Eliminations Assets Current assets: Cash and cash equivalents $ 11,807 $ 25,398 $ 65 $ — $ — $ 37,270 Restricted cash — 6,146 — — — 6,146 Accounts receivable, less allowance for doubtful accounts of $5.413 — — — 232,172 — 232,172 Trade receivable — — 4,185 — — 4,185 Prepaid expenses and other current assets — 60,546 26,281 — — 86,827 Total current assets 11,807 92,090 30,531 232,172 — 366,600 Property and equipment, net — 2,852 243,595 — — 246,447 Broadcast licenses — — — 1,597,250 — 1,597,250 Other intangible assets, net — — 295,518 — — 295,518 Goodwill — — 1,256,015 — — 1,256,015 Investment in consolidated subsidiaries 585,372 4,055,517 1,120,781 — (5,761,670 ) — Intercompany receivables, net — 90,803 1,295,456 — (1,386,259 ) — Other assets — 46,603 22,902 887 — 70,392 Total assets $ 597,179 $ 4,287,865 $ 4,264,798 $ 1,830,309 $ (7,147,929 ) $ 3,832,222 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: — Accounts payable and accrued expenses $ — $ 32,701 $ 118,162 $ — $ — $ 150,863 Trade payable — — 3,380 — — 3,380 Current portion of long-term debt — 19,376 — — — 19,376 Total current liabilities — 52,077 121,542 — — 173,619 Long-term debt, excluding 7.75% Senior Notes — 1,967,647 — — — 1,967,647 7.75% Senior Notes — 610,000 — — — 610,000 Other liabilities — 10,430 63,644 — — 74,074 Intercompany payables, net 90,803 1,062,339 — 233,117 (1,386,259 ) — Deferred income taxes — — 24,095 476,411 — 500,506 Total liabilities 90,803 3,702,493 209,281 709,528 (1,386,259 ) 3,325,846 Stockholders’ equity (deficit): Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 238,817,762 shares issued and 213,713,494 shares outstanding 2,387 — — — — 2,387 Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 3,315,238 shares issued and outstanding 33 — — — — 33 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding 6 — — — — 6 Treasury stock, at cost, 25,104,268 shares (257,214 ) — — — — (257,214 ) Additional paid-in-capital 1,612,552 227,256 4,187,729 2,094,986 (6,509,971 ) 1,612,552 Accumulated (deficit) equity (851,388 ) 358,116 (132,212 ) (974,205 ) 748,301 (851,388 ) Total stockholders’ equity (deficit) 506,376 585,372 4,055,517 1,120,781 (5,761,670 ) 506,376 Total liabilities and stockholders’ equity (deficit) $ 597,179 $ 4,287,865 $ 4,264,798 $ 1,830,309 $ (7,147,929 ) $ 3,832,222 20122013 Cumulus
Media Inc.
(Parent
Guarantor) Cumulus
Media
Holdings Inc.
(Subsidiary Issuer) Subsidiary
Guarantors Subsidiary
Non-guarantors Eliminations Total
Consolidated $ 81,599 $ — $ 6,451 $ — $ — $ 88,050 5,921 — — — — 5,921 — — 207,563 — — 207,563 — — 6,104 — — 6,104 6,928 — 38,553 — — 45,481 94,448 — 258,671 — — 353,119 4,690 — 251,213 — — 255,903 — — — 1,602,373 — 1,602,373 — — 258,761 — — 258,761 — — 1,195,594 — — 1,195,594 415,573 3,354,891 1,127,135 — (4,897,599 ) — — 471,329 (471,329 ) — 11,605 47,818 18,402 — — 77,825 $ 526,316 $ 3,402,709 $ 3,581,105 $ 1,602,373 $ (5,368,928 ) $ 3,743,575 $ 10,690 $ 8,213 $ 83,683 $ — $ — $ 102,586 — — 4,803 — — 4,803 — 76,468 — — — 76,468 11,386 11,386 10,690 84,681 99,872 — — 195,243 — 2,014,599 — — — 2,014,599 — 610,000 — — — 610,000 3,651 — 41,662 — — 45,313 193,473 277,856 (471,329 ) — — — 84,680 475,238 — 559,918 207,814 2,987,136 226,214 475,238 (471,329 ) 3,425,073 71,869 — — — — 71,869 71,869 — — — — 71,869 1,827 — — — — 1,827 154 — — — — 154 6 — — — — 6 (252,001 ) — — — — (252,001 ) 1,514,849 232,964 3,853,001 2,099,514 (6,185,479 ) 1,514,849 (1,018,202 ) 182,609 (498,110 ) (972,379 ) 1,287,880 (1,018,202 ) 246,633 415,573 3,354,891 1,127,135 (4,897,599 ) 246,633 $ 526,316 $ 3,402,709 $ 3,581,105 $ 1,602,373 $ (5,368,928 ) $ 3,743,575 Eliminations Assets Current assets: Cash and cash equivalents $ 11,804 $ 20,988 $ — $ — $ — $ 32,792 Restricted cash — 6,146 — — — 6,146 Accounts receivable, less allowance for doubtful accounts of $5,306 — — — 264,805 — 264,805 Trade receivable — — 4,419 — — 4,419 Prepaid expenses and other current assets — 5,948 62,945 — — 68,893 Total current assets 11,804 33,082 67,364 264,805 — 377,055 Property and equipment, net — 3,272 251,430 — — 254,702 Broadcast licenses — — — 1,596,337 — 1,596,337 Other intangible assets, net — — 315,490 — — 315,490 Goodwill — — 1,256,741 — — 1,256,741 Investment in consolidated subsidiaries 589,163 3,824,690 1,118,952 — (5,532,805 ) — Intercompany receivables, net — 88,227 1,011,218 24,090 (1,123,535 ) — Other assets — 46,774 22,440 896 — 70,110 Total assets $ 600,967 $ 3,996,045 $ 4,043,635 $ 1,886,128 $ (6,656,340 ) $ 3,870,435 Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ — $ 24,966 $ 121,521 $ 50 $ — $ 146,537 Trade payable — — 3,846 — — 3,846 Current portion of long-term debt — 5,937 — — — 5,937 Total current liabilities — 30,903 125,367 50 — 156,320 Long-term debt, excluding 7.75% Senior Notes — 1,985,956 — — — 1,985,956 7.75% Senior Notes — 610,000 — — — 610,000 Secured loan — — — 25,000 — 25,000 Other liabilities — 10,430 69,483 — — 79,913 Intercompany payables, net 88,227 769,593 — 265,715 (1,123,535 ) — Deferred income taxes — — 24,095 476,411 — 500,506 Total liabilities 88,227 3,406,882 218,945 767,176 (1,123,535 ) 3,357,695 Stockholders’ equity (deficit): Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 222,399,019 shares issued and outstanding 2,223 — — — — 2,223 Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding 154 — — — — 154 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding 6 — — — — 6 Treasury stock, at cost, 24,205,200 shares (251,193 ) — — — — (251,193 ) Additional paid-in-capital 1,603,669 223,412 3,983,196 2,092,725 (6,299,333 ) 1,603,669 Accumulated (deficit) equity (842,119 ) 365,751 (158,506 ) (973,773 ) 766,528 (842,119 ) Total stockholders’ equity (deficit) 512,740 589,163 3,824,690 1,118,952 (5,532,805 ) 512,740 Total liabilities, redeemable preferred stock and stockholders’ equity (deficit) $ 600,967 $ 3,996,045 $ 4,043,635 $ 1,886,128 $ (6,656,340 ) $ 3,870,435 Eliminations Cash flows from operating activities: Net (loss) income $ (9,269 ) $ (7,635 ) $ 26,294 $ (432 ) $ (18,227 ) $ (9,269 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization — 458 28,423 — — 28,881 Amortization of debt issuance costs/discounts — 2,270 — 48 — 2,318 Provision for doubtful accounts — — 568 — — 568 Gain on sale of assets or stations — — (538 ) — — (538 ) Fair value adjustment of derivative instruments — 14 — — — 14 Deferred income taxes — (7,631 ) — — — (7,631 ) Stock-based compensation expense — 4,091 — — — 4,091 Earnings (loss) from consolidated subsidiaries 7,635 (26,294 ) 432 — 18,227 — Changes in assets and liabilities — 58,784 (73,359 ) 33,017 — 18,442 Net cash (used in) provided by operating activities (1,634 ) 24,057 (18,180 ) 32,633 — 36,876 Cash flows from investing activities Proceeds from sale of assets or stations — — 1,054 — — 1,054 Capital expenditures — (38 ) (1,297 ) — — (1,335 ) Net cash (used in) provided by investing activities — (38 ) (243 ) — — (281 ) Cash flows from financing activities: Intercompany transactions, net 1,482 (12,337 ) 18,488 (7,633 ) — — Repayments of borrowings under term loans and revolving credit facilities — (5,937 ) — (25,000 ) — (30,937 ) Tax withholding payments on behalf of employees — (1,314 ) — — — (1,314 ) Proceeds from exercises of warrants 38 — — — — 38 Proceeds from exercises of options 117 — — — — 117 Deferred financing costs — (21 ) — — — (21 ) Net cash provided by (used in) financing activities 1,637 (19,609 ) 18,488 (32,633 ) — (32,117 ) Increase in cash and cash equivalents 3 4,410 65 — — 4,478 Cash and cash equivalents at beginning of period 11,804 20,988 — — — 32,792 Cash and cash equivalents at end of period $ 11,807 $ 25,398 $ 65 $ — $ — $ 37,270 Cumulus
Media Inc.
(Parent Guarantor) Cumulus Media
Holdings Inc.
(Subsidiary Issuer) Subsidiary
Guarantors Subsidiary
Non-guarantors Eliminations Total
Consolidated $ (8,988 ) $ (6,846 ) $ 49,629 $ 9,083 $ (51,866 ) $ (8,988 ) — 497 28,433 — — 28,930 — 2,624 — — — 2,624 — — 529 — — 529 — — 1,309 — — 1,309 — 5 (738 ) — — (733 ) — — — (9,573 ) — (9,573 ) — 2,663 — — — 2,663 6,846 (49,629 ) (9,083 ) — 51,866 — 44,020 (41,305 ) 34,840 490 — 38,045 41,878 (91,991 ) 104,919 — — 54,806 — — 467 — — 467 — — (52,066 ) — — (52,066 ) — (175 ) — — — (175 ) — (87 ) (1,899 ) — — (1,986 ) — (262 ) (53,498 ) — — (53,760 ) (120,837 ) 176,562 (55,725 ) — — — — (3,313 ) — — — (3,313 ) — (337 ) — — — (337 ) (2,652 ) — — — — (2,652 ) 12 — — — — 12 (123,477 ) 172,912 (55,725 ) — — (6,290 ) (81,599 ) 80,659 (4,304 ) — — (5,244 ) 81,599 — 6,451 — — 88,050 $ — $ 80,659 $ 2,147 $ — $ — $ 82,806 CUMULUS MEDIA INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSThree Months Ended March 31, 2012(Dollars in thousands)(Unaudited) Cumulus Media
Inc.
(Parent Guarantor) Cumulus Media
Holdings Inc.
(Subsidiary Issuer) Subsidiary
Guarantors Subsidiary
Non-guarantors Eliminations Total
Consolidated $ (12,130 ) $ 3,762 $ 54,766 $ 4,757 $ (63,285 ) $ (12,130 ) 221 — 35,457 — — 35,678 — 2,974 — — — 2,974 — — 3,361 — — 3,361 — — (262 ) — — (262 ) 85 — (88 ) — — (3 ) — — (694 ) (5,286 ) — (5,980 ) 6,978 — — — — 6,978 (3,762 ) (54,766 ) (4,757 ) — 63,285 — 1,421 54,246 (26,534 ) 529 — 29,662 (7,187 ) 6,217 61,249 — — 60,278 322 — — — — 322 (400 ) — (722 ) — — (1,122 ) (78 ) — (722 ) — — (800 ) 18,826 47,784 (66,610 ) — — — — (54,000 ) — — — (54,000 ) (1,346 ) — — — — (1,346 ) (3,125 ) — — — — (3,125 ) 34 — — — — 34 14,389 (6,217 ) (66,610 ) — — (58,437 ) 7,124 — (6,083 ) — — 1,041 11,714 — 18,878 — — 30,592 $ 18,838 $ — $ 12,795 $ — $ — $ 31,633 Eliminations Cash flows from operating activities: Net (loss) income $ (8,988 ) $ (6,846 ) $ 49,781 $ 9,082 $ (52,017 ) $ (8,988 ) Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization — 497 28,433 — — 28,930 Amortization of debt issuance costs/discount — 2,624 — — — 2,624 Provision for doubtful accounts — — 529 — — 529 Loss on sale of assets or stations — — 1,309 — — 1,309 Fair value adjustment of derivative instruments — 5 (738 ) — — (733 ) Deferred income taxes — — — (9,573 ) — (9,573 ) Stock-based compensation expense — 2,663 — — — 2,663 Earnings (loss) from consolidated subsidiaries 6,846 (49,781 ) (9,082 ) — 52,017 — Changes in assets and liabilities — (446 ) 38,000 491 — 38,045 Net cash (used in) provided by operating activities (2,142 ) (51,284 ) 108,232 — — 54,806 Cash flows from investing activities: Restricted cash — (175 ) — — — (175 ) Proceeds from sale of assets or stations — — 467 — — 467 Proceeds from exchange of asset or stations — — (52,066 ) — — (52,066 ) Capital expenditures — (87 ) (1,899 ) — — (1,986 ) Net cash (used in) investing activities — (262 ) (53,498 ) — — (53,760 ) Cash flows from financing activities: Intercompany transactions, net (76,817 ) 135,855 (59,038 ) — — — Repayments of borrowings under term loans and revolving credit facilities — (3,313 ) — — — (3,313 ) Tax withholding payments on behalf of employees — (337 ) — — — (337 ) Series A preferred stock dividends (2,652 ) — — — — (2,652 ) Proceeds from exercises of warrants 12 — — — — 12 Net cash (used in) provided by financing activities (79,457 ) 132,205 (59,038 ) — — (6,290 ) (Decrease) increase in cash and cash equivalents (81,599 ) 80,659 (4,304 ) — — (5,244 ) Cash and cash equivalents at beginning of period 81,599 — 6,451 — — 88,050 Cash and cash equivalents at end of period $ — $ 80,659 $ 2,147 $ — $ — $ 82,806 and our ability to generate revenue from new sources, including technology-based initiatives.initiatives, the impact of regulatory rules or proceedings that may affect our business, or any acquisitions, from time to time, other risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2013 and subsequently filed Forms 10-Q. Many of these risks and uncertainties are beyond our control, and the unexpected occurrence or failure to occur of any such events or matters could significantly alter our actual results of operations or financial condition.ownprovide content and operate commercialservices to more than 10,000 radio station clusters throughout the United States. We believe we are the largest pure-play radio broadcaster in the United States based on number of stations, including its 460 owned and operated. At March 31, 2013, we owned or operatedapproximately 520 radio stations (including under LMAs) in 108 United States93 U.S. media markets, and operated nationwide radio networks serving over 5,000 affiliates. At March 31, 2013, under LMAs, we provided sales and marketing services for 14 radio stationsoperate a national streaming/mobile platform in the United States. following the completion of the CMP Acquisition and the Citadel Merger, which included the acquisition of our radio networks, consisting of 5,000 station affiliates and 9,000 program affiliates, in 2011 we have created a leading radio broadcasting companyaudio advertising platform with a true national platform with an opportunity to further leverage and expand upon our strengths, market presence and programming. Specifically with the completion of these acquisitions, we now have an extensive radio station portfolio, consisting of approximately 520 radio stations, including a presence in eight of the top 10 markets, and broad diversity in format, listener base, geography, advertiser base and revenue stream, all of which are designed to reduce our dependence on any single demographic, region or industry. Our nationwide platform generates premium content distributable through both broadcast and digital platforms. Our increased scale has allowedallows larger, more significant investments in the local digital media marketplace allowingenabling us to leverage our local digital platforms and strategies, including our social commerce initiatives to be applied across significant additional markets. We believe our one national platform perspective will allow us to optimize our available advertising inventory while providing holistic and comprehensive solutions for our customers.for adequate liquidity and scale for Cumulus to operate and grow our current business, as well as pursue and finance potential strategic acquisitions in the future.historically have primarily been cash flow from operations and borrowings under credit facilities in existence from time to time. Our cash flow from operations is subject to such factors as shifts in population, station listenership, demographics, or audience tastes, and fluctuations in preferred advertising media. In addition, customers may not be able to pay, or may delay payment of, accounts receivable that are owed to us, which risks may be exacerbated in challenging economicthe acquisition of thethat our broad diversity in format, listener base, geography, advertiser base and revenue stream that accompanied the CMP Acquisition and the Citadel Merger will helphelps us to reduce our dependence on any single demographic, region or industry.At March 31, We continually monitor our capital structure and from time to time have evaluated, and expect that we will continue to evaluate future opportunities to obtain, other public or private capital from the divestiture of radio stations or other assets that are not a part of, or do not complement, our strategic operations, as well as the issuance of equity and/or debt securities, in each case subject to market and other conditions in existence at the appropriate time. No assurances can be provided that any source of funds would be available when needed on terms acceptable to the Company, or at all.had $1.318entered into the Amended and Restated Credit Agreement (the "Credit Agreement"). The Credit Agreement consists of a $2.025 billion outstanding underterm loan (the “Term Loan”) maturing in December 2020 and a $200.0 million revolving credit facility (the "Revolving Credit Facility") maturing in December 2018. Under the First LienRevolving Credit Facility, $790.0up to $30.0 million outstanding underof availability may be drawn in the Second Lien Facility and noform of letters of credit. Upon entry into the Credit Agreement, we used Term Loan borrowings of $2.025 billion to repay in full all amounts outstanding under the Revolving Credit Facility.On December 20, 2012, we entered into an amendmentfirst lien term loan and restatement (the “Amendment and Restatement”) ofsecond lien term loan under our First Lien Facility Credit Agreement, dated as of September 16, 2011, among the Company, Cumulus Media Holdings, Inc., as borrower (the “Borrower”), and the lenders and the agents thereto (the “Original Agreement”). Pursuant to the Amendment and Restatement, the terms and conditions contained in the Original Agreement remained substantially unchanged, except as follows: (i) the amount outstanding thereunder was increased to $1.325 billion; (ii) the margin for LIBOR (as defined below) -based borrowings was reduced from 4.5% to 3.5% and for Base Rate (as defined below) -based borrowings was reduced from 3.5% to 2.5%; and (iii) the LIBOR floor for LIBOR-based borrowings was reduced from 1.25% to 1.0%.First Lien Facilityend of each quarter, the Credit Agreement requires compliance with a consolidated totalfirst lien net leverage ratio. Atratio covenant. The required ratio at March 31, 2013, this2014 was 5.75 to 1. The ratio would have been 6.5periodically decreases until it reaches 4.00 to 1.0. Such ratio will be reduced in future periods if amounts are outstanding under the Revolving Credit Facility at an applicable date. At1 on March 31, 20132018. As of March 31, 2014, we would not have beenwere in compliance with this ratio. As a result, borrowingsall of our covenants under the Credit Agreement.creditaccounts receivable securitization facility were not available at that date.(the “Securitization Facility”) with General Electric Capital Corporation, as a lender, as swing line lender and as administrative agent (together with any other lenders party thereto from time to time, the “Lenders”). In connection with the entry into the Securitization Facility, pursuant to a Receivables Sale and Servicing Agreement, dated as of December 6, 2013 (the “Sale Agreement”), certain subsidiaries of the Company (collectively, the "Originators") sell and/or contribute their existing and future accounts receivable to a special purpose entity and wholly owned subsidiary of the Company (the “SPV”). The Second Lien Facility does not contain any financial covenants. SPV may thereafter make borrowings from the Lenders, which borrowings are secured by those receivables, pursuant to a Receivables Funding and Administration Agreement, dated as of December 6, 2013 (the “Funding Agreement”).20132014, our long-term debt consisted of $2.1$2.019 billion in total term loansoutstanding under the Term Loan and $610.0 million in 7.75% Senior Notes.Based upon the calculation of excess cash flow at December 31, 2012, the Company was required to make a mandatory prepayment on the First Lien Term Loan. Due to certain rights retained by the lenders to decline proportionate shares of such prepayments, the final prepayment amount was reduced from 63.2 million to $35.6 million of which a portion was applied to the Second Lien Term Loan. The prepayment was made on April 1, 2013 and has been classified in the current portion of long-term debt caption of the condensed consolidated balance sheetThe 2011 Credit Facilities contain provisions requiring the Company to use the proceeds from the disposition of assets of the Company to prepay amounts outstanding under the First Lien Facility and the Second Lien Facility (to the extent proceeds remain after the required prepayment of all amounts outstanding under the First Lien Facility), subject to the right of the Company to use such proceeds to acquire, improve or repair assets useful in its business, all within one year from the date of receipt of such proceeds. As of March 31, 2013, we have complied with these provisions and reinvested the proceeds from the Townsquare Asset Exchange as such, we will not be required to prepay principal outstanding under the 2012 Credit Facilities. conditions of our business climate, our current and expected needs for funds and our current and expected sources of funds and determined, based on our financial condition as of March 31, 2013,2014, that cash on hand, and cash expected to be generated from operating activities and cash expected to be available from various financing sources will be sufficient to satisfy our anticipated financing needs for working capital, capital expenditures, interest and debt service payments, and any repurchases of securities and other debt obligations through at least March 31, 2014.time on our radio stations and networks.time. Our sales of advertising time are primarily affected by the demand for advertising time from local, regional and national advertisers andwhich impacts the advertising rates charged by us. Advertising demand and rates are based primarily on a station’sthe ability to attract audiences in the demographic groups targeted by its advertisers, as measured principally by various ratings agencies on a periodic basis. We endeavor to develop strong listener loyalty and we believe that the diversification of our formats and programs helps to insulate us from the effects of changes in the musical tastes of the public with respect to any particular format.format as a substantial portion of our revenue comes from non-music format and proprietary content. In addition, we believe that the portfolioplatform that we own and operate, which has increased diversity in terms of format, listener base, geography, advertiser base and revenue stream as a result of our recent acquisitions and the development of our strategy to focus on radio stations in larger markets and geographically strategic regional clusters, will further reduce our revenue dependence on any single demographic, region or industry.station or program network.radio program. Each sales vehicle has a general target level of on-air inventory available for advertising. This target level of advertising inventory may vary at different times of the day but tends to remain stable over time. We seek to broaden our base of advertisers in each of our markets by providing a wide array of audience demographic segments across each clusterand $6.8 million infor the three months ended March 31, 20132014 and 2012,2013, respectively. Our advertising contracts are generally short-term. We generate most of our revenue from local and regional advertising, which is sold primarily by a station’s sales staff. Local and regional advertising represented approximately 71.9% and 72.7%typically represents a majority of our total revenues during the three months ended March 31, 2013 and 2012, respectively.market placesmarketplaces using our national platform. To effectively deliver our network advertising for our customers, we distribute content and programming through third party affiliates in order to achieve a broader national audience. Typically, in exchange for the right to broadcast radio network programming, third party affiliates remit a portion of their advertising time, which is then aggregated into packages focused on specific demographic groups and sold by us to our advertiser clients that want to reach the listeners who comprise those demographic groups on a national basis. Revenues derived from third party affiliates represented less than 10% of consolidated revenues.in the radio broadcasting industry,with advertising revenue supported businesses, our first calendar quarter typically produces the lowest revenues of a last twelve month period, as advertising generally declines following the winter holidays. The second and fourth calendar quarters typically produce the highest revenues for the year. Our operating results in any period may be affected by the incurrence of advertising and promotion expenses that typically do not have an effect on revenue generation until future periods, if at all. We continually evaluate opportunities to increase revenues through new platforms, including technology-based initiatives.the Company’sour business. This measure isolates the amount of income generated by the Company’s radio stations apart fromour core operations after the incurrence of non-cashcorporate, general and non-operatingadministrative expenses. Management also uses this measure to determine the contribution of the Company’s radio station portfolio,our core operations, including the corporate resources employed to manage the portfolio,operations, to the funding of itsour other operating expenses and to the funding of debt service and acquisitions. In addition, Adjusted EBITDA is a key metric for purposes of calculating and determining our compliance with certain covenants contained in our First Lien Credit Agreement, as amended and restated, (the “First Lien Facility”).radio stations.core operations. In addition, we exclude LMA fees from our calculation of Adjusted EBITDA, even though such feesthese items require a cash settlement, because they are excluded from the definition of Adjusted EBITDA contained in our First Lien Facility.Credit Agreement. Management excludes any gain or loss on the exchange or sale of any assets or stations as they doit does not represent a cash transaction. Management also excludes any realized gain or loss on derivative instruments as they doradio stationcore operations. Interest expense, net of interest income, income tax (benefit) expense including franchise taxes, and expensesExpenses relating to acquisitions and restructuring costs are also excluded from the calculation of Adjusted EBITDA as they are not directly related to the operation of radio stations.our core operations. Management excludes any impairment of goodwill and intangible assets as they do not require a cash outlay.radiomedia company. Management has also observed that Adjusted EBITDA is routinely employed to evaluate and negotiate the potential purchase price for radio broadcastingmedia companies and is a key metric for purposes of calculating and determining compliance with certain covenants in our First Lien Facility.credit facility. Given the relevance to theour overall value, of the Company, management believes that investors consider the metric to be extremely useful.loss,(loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, follows in this section.Analysis of the Unaudited Condensed Consolidated Results of Operations. Three Months Ended
March 31, 2013 vs 2012
$ Change % Change
Three Months
Ended 2013 2012 $ 232,872 $ 235,995 $ (3,123 ) -1.3 % 164,172 153,627 10,545 6.9 % 28,930 34,882 (5,952 ) -17.1 % 969 839 130 15.5 % 13,866 16,692 (2,826 ) -16.9 % 1,309 — 1,309 * * (738 ) (88 ) (650 ) * * 24,364 30,043 (5,679 ) -18.9 % (44,252 ) (50,803 ) 6,551 -12.9 % 133 262 (129 ) -49.2 % (19,755 ) (20,498 ) 743 -3.6 % 10,767 7,892 2,875 36.4 % (8,988 ) (12,606 ) — 476 (476 ) * * $ (8,988 ) $ (12,130 ) $ 3,142 25.9 % $ 59,888 $ 76,865 $ (16,977 ) -22.1 % **Calculation is not meaningful. Three Months Ended March 31, 2014 2013 % Change STATEMENT OF OPERATIONS DATA: Net revenues $ 292,044 $ 217,839 34.1 % Content costs 108,493 61,951 75.1 % Other direct operating expenses 115,335 93,480 23.4 % Depreciation and amortization 28,881 27,596 4.7 % LMA fees 1,557 946 64.6 % Corporate expenses (including stock-based compensation expense) 19,194 14,018 36.9 % (Gain) loss on sale of assets or stations (538 ) 1,309 (141.1 )% Gain on derivative instrument — (738 ) (100.0 )% Operating income 19,122 19,277 (0.8 )% Interest expense, net (35,934 ) (44,252 ) (18.8 )% Other expense, net (65 ) 287 (122.6 )% Loss from continuing operations before income taxes (16,877 ) (24,688) (31.6 )% Income tax benefit (expense) 7,608 (1,975 ) (485.2 )% Loss from continuing operations (9,269 ) (26,663) (65.2 )% Income from discontinued operations, net of taxes — 17,675 (100.0 )% Net loss $ (9,269 ) $ (8,988 ) 3.1 % OTHER DATA: Adjusted EBITDA $ 58,745 $ 53,444 9.9 % Compared to the Three Months Ended March 31, 2012.2013 decreased $3.12014 increased $74.2 million, or 1.3%34.1%, to $232.9$292.0 million, compared to $236.0$217.8 million for the three months ended March 31, 2012. This decrease was2013. The increase resulted from increases of $63.6 million, $5.2 million, $1.3 million and $4.1 million in broadcast advertising, digital advertising, political advertising and license fees and other revenue, respectively. These increases were primarily attributable to lower political revenuesthe addition of the operations of WestwoodOne, which was acquired by the Company in December 2013.general lower advertising spending in somedevelopment of our markets.programming. Three Months Ended March 31, 2014 2013 Content costs 37.1 % 28.4 % Excluding DepreciationAmortization.Directmonetization of our content across our platform and overhead expenses.20132014 increased $10.6$21.9 million, or 6.9%23.4%, to $164.2$115.3 million, compared to $153.6$93.5 million for the three months ended March 31, 2012. The2013. This increase was primarily attributable to a $1.0 millionthesales salaries, a $1.6 millionvariable selling costs associated with our increase in Arbitron fees and a $4.9 million increase in expense at our network division as we invest in various content initiatives..2013 decreased $6.02014 increased $1.3 million, or 17.1%4.7%, to $28.9 million, compared to $34.9$27.6 million for the three months ended March 31, 2012.2013. This decreaseincrease was primarily due to a $7.0$1.8 million increase in depreciation expense which was primarily attributable to expense related to the assets of WestwoodOne, offset by a $0.5 million decrease in amortization expense on the Company’sour definite lived intangibles offset by a $1.0 million increaseintangible assets, which resulted from the accelerated amortization methodology we have applied since acquisition of these assets that is based on the expected pattern in depreciation expense.which the underlying assets' economic benefits are consumed. General and Administrative Expenses, Including Stock-based CompensationExpense. generalexpenses consist primarily of compensation and administrativerelated costs for our executive, finance, human resources, information technology and legal personnel and fees for professional services. Professional services are principally comprised of outside legal, audit and consulting services.2013 decreased $2.82014 increased $5.2 million, or 16.9%36.9%, to $13.9$19.2 million, compared to $16.7$14.0 million for the three months ended March 31, 2012. The decrease2013. This increase is primarily due to an increase of $4.2 million in acquisition related restructuring expenses, legal costs related to the WestwoodOne acquisition and a decrease$1.4 million increase in stock basedstock-based compensation expense, of $4.3 million, partially offset by a $1.2$0.4 million increasedecrease in acquisition relatedother overhead costs. Acquisition related costs for the three months ended March 31, 2013 included exit costs associated with a lease for vacated Citadel office space.Realized Losses on Derivative Instrument.For the three months ended March 31, 2013, we recorded a $0.7 million gain related to the fair value adjustment of the put option on five Green Bay stations we operate under an LMA, compared to a $0.1 million gain recorded for the three months ended March 31, 2012..20132014 decreased $6.5$8.3 million, or 12.9%18.8%, to $44.3$35.9 million compared to $50.8$44.3 million for the three months ended March 31, 2012.2013. Interest expense associated with outstanding debt decreased by $6.5$7.8 million to $41.5$21.8 million as compared to $48.0$29.7 million in the prior year period. Interest expense decreasedThis decrease was due to a lower average amount of indebtedness outstanding as a resultresulting from principal repayments and a lower weighted average cost of debt due to the December 2012 Amendment and Restatement. 2013 entry into the Credit Agreement. Three Months Ended
March 31, 2013 vs 2012 2013 2012 $ Change % Change $ 11,819 $ 11,819 $ — * * 29,680 36,219 (6,539 ) -18.1 % 3,018 2,897 121 4.2 % 5 84 (79 ) * * (270 ) (216 ) (54 ) 25.0 % $ 44,252 $ 50,803 $ (6,551 ) -12.9 % **Calculation is not meaningful. Three Months Ended March 31, 2014 vs 2013 2014 2013 $ Change % Change 7.75% Senior Notes $ 11,819 $ 11,819 $ — — % Bank borrowings – term loans and revolving credit facilities 21,840 29,680 (7,840 ) (26.4 )% Other including debt cost amortization 2,606 3,018 (412 ) (13.7 )% Change in fair value of interest rate cap — 5 (5 ) (100.0 )% Interest income (331 ) (270 ) (61 ) 22.6 % Interest expense, net $ 35,934 $ 44,252 $ (8,318 ) (18.8 )% benefitsexpense of $10.8$2.0 million on a pre-tax loss from continuing operations of $19.8$24.7 million, resulting in an effective tax rate for the three months ended March 31, 2013 of approximately 54.5%(8.0)%. For three months ended March 31, 2012, the Company recorded income tax benefit of $7.9 million, on pre-tax loss from continuing operations of $20.5 million, resulting in an effective tax rate and the federal statutory rate of 35.0% for the three months ended March 31, 2012 of approximately 38.5%.The difference between the effective tax rate for each period and the federal statutory rate of 35.0%2014 primarily relates to state and local income taxes and changes in the valuation allowance on certain separate company filing jurisdiction net operating losses. For the three months ended March 31, 2013, the primary differences between the effective tax rate and federal statutory rate of 35.0% relate to state and local income taxes, tax amortization of broadcast licenses and goodwill;goodwill, changes in the valuation allowance on net deferred tax assets as well as the application of the exception to the intra-period allocation tax accounting rules in accordance with ASC Topic 740, Accounting for Income Taxes ("ASC Topic 740") between continuing and discontinued operations which requires that continuing operations benefits from the lesserclassifiedonly as having anthe reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740.lifelived intangible assets and deferred cancellation of debt income for book purposes..2013 decreased $17.02014 increased $5.3 million to $59.9$58.7 million from $76.9$53.4 million for the three months ended March 31, 2012.2013Measure.Measure Three Months Ended
March 31, % Change
Three Months
Ended 2013 2012 $ (8,988 ) $ (12,130 ) 25.9 % (10,767 ) (7,892 ) 36.4 % 44,119 50,541 -12.7 % 969 839 15.5 % 28,930 34,882 -17.1 % 2,663 6,978 -61.8 % 1,309 — * * (738 ) (88 ) * * 2,214 1,023 116.4 % 177 — * * — 796 * * — 1,916 * * $ 59,888 $ 76,865 -22.1 % **Calculation is not meaningful. Three Months Ended March 31, 2014 2013 %Change Net loss $ (9,269 ) $ (8,988 ) (3.1 )% Income tax benefit (7,608 ) 1,975 485.2 % Non-operating expenses, including net interest expense 35,999 43,965 (18.1 )% LMA fees 1,557 946 64.6 % Depreciation and amortization 28,881 27,596 4.7 % Stock-based compensation expense 4,091 2,663 53.6 % (Gain) loss on sale of assets or stations (538 ) 1,309 (141.1 )% Realized gain on derivative instrument — (738 ) (100.0 )% Acquisition-related and restructuring costs 5,382 2,214 143.1 % Franchise taxes 250 177 41.2 % Discontinued operations: Income from discontinued operations, net of tax — (17,675 ) (100.0 )% Adjusted EBITDA $ 58,745 $ 53,444 9.9 % ** Calculation is not meaningful. providedProvided by Operating Activities Three Months Ended
March 31, 2013 2012 (Dollars in thousands) $ 54,806 $ 60,278 Three Months Ended March 31, (Dollars in thousands) 2014 2013 Net cash provided by operating activities $ 36,876 $ 54,806 20132014 compared to the three months ended March 31, 2012,2013, net cash provided by operating activities decreased $5.5$17.9 million as compared to the three months ended March 31, 2012.. The decrease was primarily due to a decrease in net revenuesworking capital driven by the timing of $12.4 million, partially offset by an aggregate increase in cash provided by operating assets and liabilities of $8.4 million.usedUsed in Investing Activities Three Months Ended
March 31, (Dollars in thousands) 2013 2012 $ (53,760 ) $ (800 ) Three Months Ended March 31, (Dollars in thousands) 2014 2013 Net cash used in investing activities $ (281 ) $ (53,760 ) 20132014 compared to the three months ended March 31, 2012,2013, net cash used in investing activities increased $53.0decreased $53.5 million, primarily due to completingthe use of $52.1 million into complete acquisitions during the three months ended March 31, 2013.usedUsed in Financing Activities Three Months Ended
March 31, (Dollars in thousands) 2013 2012 $ (6,290 ) $ (58,437 ) Three Months Ended March 31, (Dollars in thousands) 2014 2013 Net cash used in financing activities $ (32,117 ) $ (6,290 ) 20132014 compared to the three months ended March 31, 2012,2013, net cash used in financing activities decreased $52.1increased $25.8 million. The increase in cash used in financing activities is primarily attributable to repaying $50.7a $27.6 million less ofincrease in repayments on long term borrowings, under the Company’s term loans.2013 and 2012 Acquisitions and DispositionsFor a detailed discussion on our 2013 and 2012 acquisitions, see Note 2, “Acquisitions and Dispositions” in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.2012 Annual Report on Form 10-K for the year ended December 31, 20122013 (the “2012“2013 Annual Report”).asat the reasonable assurance level as of March 31, 2013.20132014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.20122013 Annual Report for information regarding known material risks that could affect our results of operations, financial condition and liquidity.2013,2014, we did not purchase any shares of our Class A Common Stock. As31.1 — Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 — Certification of the Principal ExecutiveFinancial 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 — The following materials from Cumulus Media Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013,2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statement of Operations for the three months ended March 31, 20132014 and 2012,2013, (ii) Condensed Consolidated Balance Sheets as of March 31, 20132014 and December 31, 2012,2013, (iii) Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 20132014 and 2012,2013, and (iv) Notes to Condensed Consolidated Financial Statements***.Statements.***Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files submitted as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.CUMULUS MEDIA INC.Date: May 7, 2013CUMULUS MEDIA INC. Date: April 29, 2014 By: Joseph P. Hannan 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 ExecutiveFinancial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1 — Sarbanes-OxleySarbanes-Oxley Act of 2002.101 — The following materials from Cumulus Media Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013,2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statement of Operations for the three months ended March 31, 20132014 and 2012,2013, (ii) Condensed Consolidated Balance Sheets as of March 31, 20132014 and December 31, 2012,2013, (iii) Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 20132014 and 2012,2013, and (iv) Notes to Condensed Consolidated Financial Statements***.Statements.***Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files submitted as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.40