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 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 use. 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. This ASU is effective for annual reporting periods beginning on or after December 15, 2013 and subsequent interim periods. The Company is currently assessing the expected impact, if any, on the consolidated financial statements. respectively. June 30, 2013, respectively. Description Net revenue Net loss operations for the three and six months ended June 30, 2012. Discontinued operations: Net revenue Operating income Income from discontinued operations before taxes Income tax expense Income from discontinued operations acquisitions. 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 June 30, 2013. 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 2019 2013. 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 follows (dollars in thousands): 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 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 EPS calculation. changes in the valuation allowance on net deferred tax assets. issued financial statements. As permitted by the accounting guidance found in ASC 250-10 (SEC Staff Accounting 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 approximately 520 radio stations (including under LMAs) in 108 United States media markets and operated nationwide radio networks serving over 5,000 affiliates. At We also had outstanding $610.0 million of 7.75% Senior Notes due 2019. $150.0 million. June 30, 2013. revenues in all periods presented. Facility. not represent a cash transaction nor are they associated with radio station operations. Interest expense, net of interest income, discontinued operations, income tax (benefit) expense including franchise taxes, and expenses relating to acquisitions are also excluded from the calculation of Adjusted EBITDA as they are not directly related to the operation of radio stations. Management excludes any impairment of goodwill and intangible assets as they do not require a cash outlay. Management believes that Adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, nevertheless is commonly employed by the investment community as a measure for determining the market value of a radio company. Management has also observed that Adjusted EBITDA is routinely employed to evaluate and negotiate the potential purchase price for radio broadcasting companies, and is a key metric for purposes of calculating and determining compliance with certain covenants in our First Lien Facility. Given the relevance to the overall value of the Company, management believes that investors consider the metric to be extremely useful. 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 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 with respect to the amount of its federal and state net operating loss carryovers available to satisfy the settlement of its deferred tax liability related to the prior elections made by certain of its acquired subsidiaries to defer the recognition of cancellation of debt income (“CODI”). As a result of this quarter's assessment, the Company estimates that more of its net operating loss carryovers will become available to settle the deferred tax liabilities associated with the deferred CODI resulting in a $14.1 million release of its valuation allowance during the three months ended June 30, 2013. 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. Net cash used in investing activities Net cash used in financing activities 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 March 31,June 30, 2013¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 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 ¨ xýApril 30,July 23, 2013, the registrant had 175,963,810178,396,041 outstanding shares of common stock consisting of (i) 159,893,995162,326,226 shares of Class A common stock; (ii) 15,424,944 shares of Class B common stock; and (iii) 644,871 shares of Class C common stock. 313737 373838 Item 6. Exhibits3839 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 Assets Current assets: Cash and cash equivalents $ 46,216 $ 88,050 Restricted cash 3,729 5,921 Accounts receivable, less allowance for doubtful accounts of $3,779 and $4,131 at June 30, 2013 and December 31, 2012, respectively 203,469 207,563 Trade receivable 7,344 6,104 Deferred income taxes 29,658 25,145 Prepaid expenses and other current assets 21,952 20,336 Total current assets 312,368 353,119 Property and equipment, net 246,528 255,903 Broadcast licenses 1,640,882 1,602,373 Other intangible assets, net 215,386 258,761 Goodwill 1,204,953 1,195,594 Other assets 70,067 77,825 Total assets $ 3,690,184 $ 3,743,575 Liabilities, Redeemable Preferred Stock and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 75,872 $ 102,586 Trade payable 6,620 4,803 Current portion of long-term debt 13,250 76,468 Other current liabilities 8,542 11,386 Total current liabilities 104,284 195,243 Long-term debt, excluding 7.75% senior notes 2,040,359 2,014,599 7.75% senior notes 610,000 610,000 Other liabilities 41,122 45,313 Deferred income taxes 558,621 559,918 Total liabilities 3,354,386 3,425,073 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 June 30, 2013 and December 31, 2012 72,871 71,869 Total redeemable preferred stock 72,871 71,869 Stockholders’ equity: Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 186,456,601 and 182,682,073 shares issued, and 162,326,226 and 158,519,394 shares outstanding, at June 30, 2013 and December 31, 2012, respectively 1,864 1,827 Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding at both June 30, 2013 and December 31, 2012 154 154 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding at both June 30, 2013 and December 31, 2012 6 6 Treasury stock, at cost, 24,130,375 and 24,162,676 shares at June 30, 2013 and December 31, 2012, respectively (250,697 ) (252,001 ) Additional paid-in-capital 1,511,689 1,514,849 Accumulated deficit (1,000,089 ) (1,018,202 ) Total stockholders’ equity 262,927 246,633 Total liabilities, redeemable preferred stock and stockholders’ equity $ 3,690,184 $ 3,743,575 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 June 30, Six Months Ended June 30, 2013 2012 2013 2012 Broadcast revenues $ 289,676 $ 280,745 522,548 $ 516,710 Management fees — 296 — 326 Net revenues 289,676 281,041 522,548 517,036 Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) 171,762 168,746 335,934 322,442 Depreciation and amortization 28,935 36,200 57,866 71,007 LMA fees 759 885 1,728 1,724 Corporate, general and administrative expenses (including stock-based compensation expense of $2,470, $5,928, $5,134 and $12,906, respectively) 7,760 16,802 21,626 33,494 Loss on sale of stations 91 — 1,400 — (Gain) loss on derivative instrument (2,106 ) 841 (2,844 ) 753 Impairment of intangible assets — 12,435 — 12,435 Total operating expenses 207,201 235,909 415,710 441,855 Operating income 82,475 45,132 106,838 75,181 Non-operating (expense) income: Interest expense, net (43,833 ) (49,619 ) (88,085 ) (100,422 ) Loss on early extinguishment of debt (4,539 ) — (4,539 ) — Other (expense) income, net (511 ) (74 ) (378 ) 190 Total non-operating expense, net (48,883 ) (49,693 ) (93,002 ) (100,232 ) Income (loss) from continuing operations before income taxes 33,592 (4,561 ) 13,836 (25,051 ) Income tax (expense) benefit (6,491 ) 2,798 4,276 10,689 Income (loss) from continuing operations 27,101 (1,763 ) 18,112 (14,362 ) Income from discontinued operations, net of taxes — 9,906 — 10,375 Net income (loss) 27,101 8,143 18,112 (3,987 ) Less: dividends declared and accretion of redeemable preferred stock 3,155 6,791 6,307 12,491 Income (loss) attributable to common shareholders $ 23,946 $ 1,352 $ 11,805 $ (16,478 ) Basic and diluted income (loss) per common share (see Note 12, “Earnings Per Share”): Basic: Income (loss) from continuing operations per share $ 0.11 $ (0.05 ) $ 0.05 $ (0.17 ) Income from discontinued operations per share $ — $ 0.06 $ — $ 0.07 Income (loss) per share $ 0.11 $ 0.01 $ 0.05 $ (0.11 ) Diluted: Income (loss) from continuing operations per share $ 0.11 $ (0.05 ) $ 0.05 $ (0.17 ) Income from discontinued operations per share $ — $ 0.06 $ — $ 0.07 Income (loss) per share $ 0.11 $ 0.01 $ 0.05 $ (0.11 ) Weighted average basic common shares outstanding 176,481,592 157,710,861 175,619,586 153,540,006 Weighted average diluted common shares outstanding 179,553,341 157,710,861 178,678,090 153,540,006 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 Six Months Ended June 30, 2013 2012 Cash flows from operating activities: Net income (loss) $ 18,112 $ (3,987 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 57,866 72,242 Amortization of debt issuance costs/discounts 5,164 5,061 Provision for doubtful accounts 1,046 1,598 Loss (gain) on sale of assets or stations 1,537 (183 ) Impairment of intangible assets — 12,435 Loss on early extinguishment of debt 4,539 — Fair value adjustment of derivative instruments (2,871 ) 1,003 Deferred income taxes (5,809 ) (14,302 ) Stock-based compensation expense 5,134 12,906 Changes in assets and liabilities: Accounts receivable 3,045 4,789 Trade receivable (1,240 ) (1,211 ) Prepaid expenses and other current assets (1,664 ) (1,217 ) Other assets 1,044 (715 ) Accounts payable and accrued expenses (26,724 ) (31,407 ) Trade payable 1,817 393 Other liabilities (4,222 ) (2,215 ) Net cash provided by operating activities 56,774 55,190 Cash flows from investing activities: Proceeds from sale of assets or stations 692 426 Acquisitions less cash acquired (52,066 ) — Restricted cash 2,192 — Capital expenditures (4,830 ) (1,919 ) Net cash used in investing activities (54,012 ) (1,493 ) Cash flows from financing activities: Repayment of borrowings under term loans and revolving credit facilities (38,931 ) (57,000 ) Tax withholding payments on behalf of employees for stock based compensation (337 ) (1,909 ) Preferred stock dividends (5,304 ) (6,458 ) Proceeds from exercise of warrants 34 161 Deferred financing costs (58 ) — Net cash used in financing activities (44,596 ) (65,206 ) Decrease in cash and cash equivalents (41,834 ) (11,509 ) Cash and cash equivalents at beginning of period 88,050 30,592 Cash and cash equivalents at end of period $ 46,216 $ 19,083 Supplemental disclosures of cash flow information: Interest paid $ 82,208 $ 97,441 Income taxes paid $ 1,561 $ 2,909 Supplemental disclosures of non-cash flow information: Compensation held in trust $ — $ 24,807 Trade revenue $ 12,458 $ 13,642 Trade expense $ 12,577 $ 12,705 March 31,June 30, 2013, Cumulus Media owned or operated approximately 520 radio stations (including under local marketing agreements, or “LMAs”) in 108 United States media markets and a nationwide radio network serving over 5,000 stations.March 31,June 30, 2013, the cash flows for the threesix months ended March 31,June 30, 2013 and the Company’s financial condition as of March 31,June 30, 2013, are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition as 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 of the accompanying unaudited condensed consolidated financial statements for the three months ended March 31, 2013, the Company identified an errorclassifications currently in the Quarterly Results (Unaudited) footnote included in the Company’s 2012 Annual Report on Form 10-K. Upon completion 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 taxes related to the fourth quarter of 2012. The errors had no impact on net income of the consolidated financial statements for the year ended December 31, 2012 or on any other periods or disclosures previously presented.In accordance with accounting guidance found inASC 250-10 (SEC Staff Accounting Bulletin No. 99, Materiality), the Company assessed the materiality of the errors and concluded that the errors were not material to any of the Company’s previously issued financial statements. As permitted 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.ASU 2013-01. In January 2013, the FASB issued ASU 2013-01 which provides scope clarification related to the previously issued ASU 2011-11. The amendments in this ASU require companies to disclose information about offsetting and related arrangements to enable users of their financial statements to understand the effect of those arrangements on the Company’s 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 interim 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.$40.0$40.0 million in cash for Family Stations’ WFME station in Newark, New Jersey. The total purchase price is subject to additional contingent cash considerationincrease of $10up to $10 million payable to the sellers if certain future conditions are met as detailed in the purchase agreement. We haveThe Company has estimated the fair value of the contingent consideration to be less than $0.1$0.1 million as of March 31,June 30, 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.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 $ — $11.4 millionAll of the acquired goodwill is deductible for tax purposes. The indefinite-lived intangible assets acquired in the WFME Asset Exchange consists of broadcast licenses and goodwill.Pamal Broadcasting Asset Purchase, acquiringacquisition of WMEZ-FM and WXBM-FM from Pamal Broadcasting Ltd. for a purchase price of $6.5 million.$6.5 million (the "Pamal Broadcasting Asset Purchase"). The transaction was part of the Company’s ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters.$0.4$0.5 million and $0.9 million attributable to the Pamal Broadcasting Asset Purchase were included in the Company’s condensed consolidated statement of operations for the three and six months ended March 31,June 30, 2013,Allocation Amount Plant, property, and equipment, net $ 783 Broadcast licenses 5,700 Total purchase price $ 6,483 Townsquare’sTownsquare's radio stations in Bloomington, IL and Peoria, IL, plus approximately $114.9$114.9 million in cash. The transaction was part of the Company’sCompany'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 gainAllocation Amount Current assets $ 149 Property and equipment 4,690 Broadcast licenses 11,900 Goodwill 3,014 Other intangibles 200 Current liabilities (207 ) Total purchase price 19,746 Less: Carrying value of stations transferred (71,697 ) Add: Cash received 114,918 Gain on asset exchange $ 62,967 liabilities. Noneliabilities assumed. $1.1 million of the acquired goodwill balance is non deductible for tax purposes.The indefinite-lived intangible assets acquired in the Townsquare Asset Exchange consist of broadcast licenses and goodwill.Description Fair Value Advertising relationships 6 $ 200 The use of different assumptions could result in materially different amounts.$18.1 million.$18.1 million (the "AR Broadcasting Asset Purchase"). The transaction was part of the Company’s ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters.(“KCHZ Acquisition”), a radio station operated in the Kansas City market, for a purchase price of $11.2 million.$11.2 million. The Company paid $10.0$10.0 million in cash at closing with the remaining $1.2$1.2 million paid in January 2013 withupon the closing of the acquisition of KMJK-FM.$6.9 million.$6.9 million.$0.5$1.5 million and $2.6 million attributable to the AR Broadcasting Asset Purchase were included in the Company’s condensed consolidated statement of operations for the three and six months ended March 31, 2013.Allocation Amount Current assets $ 93 Plant, property, and equipment, net 1,256 Other assets 23 Broadcast licenses 16,850 Current liabilities (152 ) Total purchase price $ 18,070 The indefinite lived intangible assets acquired in the acquisition consist2012.2011. This 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 the Townsquare Asset Exchange actually occurred on January 1, 20122011 or on any other historical dates, 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 ) Description 2012 2012 Net revenue $ 283,988 $ 522,515 Net income (loss) 8,582 (4,172 ) March 31,June 30, 2012 includes adjustments to reflect: (i) depreciation and amortization expense based on the fair value of long-lived assets acquired in the Townsquare Asset Exchange; (ii) certain other pro forma adjustments that would be required to be made to prepare pro forma financial information under ASC Topic 805,Business Combinations.companyCompany did not complete any material dispositions during the three or six months ended March 31,June 30, 2013 or 2012.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 thesethe stations werehave been or are separately reported within discontinued operations, net of the related tax impact, for all periods presented in the accompanying condensed consolidated statements of operations.March 31, 2013 andJune 30, 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 2012 2012 Discontinued operations: Net revenue $ 11,000 $ 20,321 Operating income 4,382 6,769 Non-operating expenses (5 ) (7 ) Income from discontinued operations before taxes 4,377 6,762 Income tax benefit 5,529 3,613 Income from discontinued operations $ 9,906 $ 10,375 March 31,June 30, 2013 and December 31, 2012, the Company’s balance sheet included approximately $6.1$3.7 million and $5.9$5.9 million in restricted cash, of which $2.3$2.3 million related to a cash reserve from the Company’s previously completed acquisitionFor both periods, at March 31,At June 30, 2013 and December 31, 2012, $0.6$0.6 million of the restricted cash balance relates to securing the maximum exposure generated by automated clearing house transactions in the Company’s operating bank accounts and as dictated by the Company’s bank’s internal policies with respect to cash. At March 31,June 30, 2013 and December 31, 2012, $3.2$0.8 million and $0.7 million, respectively, of the restricted cash balance relates to collateral on the Company’s letters of credit. At December 31, 2012, amountsthe Company held$2.3 million in escrow related to pending acquisitions were $2.3 million. and goodwill respectively during the periods from January 1, 2012 to December 31, 2012 and January 1, 2013 to March 31,June 30, 2013, 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, 2012 $ 1,625,415 $ 390,509 $ 2,015,924 Purchase price allocation adjustments — (1,027 ) (1,027 ) Acquisition 22,253 376 22,629 Impairment (14,706 ) (12,435 ) (27,141 ) Disposition (30,589 ) (6,880 ) (37,469 ) Amortization — (112,240 ) (112,240 ) Balance as of December 31, 2012 1,602,373 258,303 1,860,676 Acquisition 44,038 — 44,038 Disposition (5,529 ) — (5,529 ) Amortization — (42,917 ) (42,917 ) Balance as of June 30, 2013 $ 1,640,882 $ 215,386 $ 1,856,268 March 31,June 30, 2013 and January 1, 2012 to March 31,June 30, 2012, 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: 2013 2012 Balance as of January 1: Goodwill $ 1,525,335 $ 1,564,253 Accumulated impairment losses (329,741 ) (229,741 ) Subtotal 1,195,594 1,334,512 Acquisition 11,461 — Current assets held for sale — (32,132 ) Purchase price allocation adjustments — (9,550 ) Finalization of purchase accounting for fourth quarter 2012 acquisitions (1,889 ) — Disposition (213 ) (105 ) Balance as of June 30: Goodwill 1,534,694 1,522,466 Accumulated impairment losses (329,741 ) (229,741 ) Total $ 1,204,953 $ 1,292,725 and these intangible assets are comprised primarily of broadcast licenses and goodwill acquired through the acquisition of radio stations. 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.acquired,assumed, 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,June 30, 2013 and December 31, 2012 include long term-assets of less than one hundred thousand$0.1 million dollars attributable to the fair value of the interest rate cap. The Company reported interest expenseincome of $0.0less than $0.1 million and $0.1 million during each of the three months and six months ended March 31,June 30, 2013, and March 31,interest expense of $0.2 million and $0.3 million for the three and six months ended June 30, 2012, respectively, attributed to the change in fair value adjustment. The interest rate cap matures on December 8, 2015.$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. Clear Channel also has a put option (the “Green Bay Option”) that allows it to require the Company to purchase the five Green Bay radio stations at any time during the two-month period commencing July 1, 2013 (or earlier if the LMA is terminated before this date) for $17.6$17.6 million (the fair value of the radio stations as of April 10, 2009)., as discussed further below. The Company accounts for the Green Bay Option as a derivative contract. Accordingly, the fair value of the Green Bay Option wasis recorded as a liability with subsequent changes in the fair value recorded through earnings. The fair value of the Green Bay Option 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 amount that the Company would pay if the option was transferred to another party as of the date of the valuation.March 31,June 30, 2013 and December 31, 2012 reflect other current liabilities of $10.6$8.5 million and $11.4$11.4 million to include the fair value of the Green Bay Option. The Company recorded $0.7$2.1 million and $0.1$2.8 million in gainsgain on derivative instrumentsinstrument associated with marking to market the Green Bay Option to reflect the fair value of the option during each of the three and six months ended March 31, 2013 and 2012, respectively.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 Derivatives not designated as hedging instruments: Interest rate cap Other long-term assets $ 72 $ 44 Green Bay Option Other current liabilities (8,542 ) (11,386 ) Total $ (8,470 ) $ (11,342 ) 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 2013 2012 2013 2012 Interest rate cap Interest (income) expense $ (32 ) $ 165 $ (27 ) $ 250 Green Bay Option (Gain) loss on derivative instrument (2,106 ) 841 (2,844 ) 753 Total $ (2,138 ) $ 1,006 $ (2,871 ) $ 1,003 March 31,June 30, 2013 and December 31, 2012 (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 June 30,
2013 December 31,
2012Term Loan and Revolving Credit Facilities: First Lien Term Loan $ 1,287,260 $ 1,321,687 Second Lien Term Loan 785,496 790,000 Revolving Credit Facility — — Less: Term Loan discount (19,147 ) (20,620 ) Total Term Loan and Revolving Credit Facilities 2,053,609 2,091,067 7.75% Senior Notes 610,000 610,000 Less: Current portion of long-term debt (13,250 ) (76,468 ) Long-term debt, net $ 2,650,359 $ 2,624,599 $1.325$1.325 billion first lien term loan facility, net of an original issue discount of $13.5$13.5 million, maturing in September 2018 (the “First Lien Term Loan”), and a $300.0$150.0 million revolving credit facility, maturing in September 2016 (the “Revolving Credit Facility”). Under the Revolving Credit Facility, up to $30.0$15.0 million of availability may be drawn in the form of letters of credit and up to $30.0$15.0 million is available for swingline borrowings. The Second Lien Facility consists of a $790.0$790.0 million second lien term loan facility, net of an original issue discount of $12.0$12.0 million, maturing in September 2019 (the “Second Lien Term Loan”).$1.325 billion;$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- 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%.hadresulted in both a debt modification and extinguishment for accounting purposes. As a result, the Company wrote off $2.4$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$0.8 million of deferred financing costs related to the Amendment and Restatement.2019.March 31,June 30, 2013, borrowings under the First Lien Term Loan bore interest at 4.5% 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$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 5,6, “Derivative Financial Instruments” for additional information.totalfirst lien net leverage ratio.ratio covenant. At March 31,June 30, 2013, this ratio would have been 6.54.5 to 1.0.1.0. Such ratio will be reduced in future periods if amounts are outstanding under the Revolving Credit Facility at an applicable date. At June 30, 2013, the Company would have been in compliance with the covenant if the Company had amounts outstanding under the Revolving Credit Facility. 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.$63.2$63.2 million to $35.6$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.$610.0$610.0 million aggregate principal amount of 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.March 31,June 30, 2013, and 2012 the Company recorded an aggregate of $2.6$2.5 million and $3.0$5.1 million, respectively, of amortization of debt discount and debt issuance costs related to its First Lien and Second Lien Credit Facilities and 7.75% Senior Notes.March 31,June 30, 2013 and December 31, 2012 were as follows (dollars in thousands): Fair Value Measurements at March 31, 2013 Date Using Total Fair
Value Quoted
Prices in
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(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
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(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 June 30, 2013 Using Financial assets: Interest Rate Cap (1) $ 72 $ — $ 72 $ — Total assets $ 72 $ — $ 72 $ — Financial liabilities: Other current liabilities Green Bay Option (2) $ (8,542 ) $ — $ — $ (8,542 ) Contingent consideration (3) (31 ) — — (31 ) Total liabilities $ (8,573 ) $ — $ — $ (8,573 ) Fair Value Measurements at December 31, 2012 Using Financial assets: Interest Rate Cap (1) $ 44 $ — $ 44 $ — Total assets $ 44 $ — $ 44 $ — Financial liabilities: Other current liabilities Green Bay Option (2) $ (11,386 ) $ — $ — $ (11,386 ) Total liabilities $ (11,386 ) $ — $ — $ (11,386 ) (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. The fair value of the Interest Rate Cap is determined based on discounted cash flow analysis on 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)In accordance with the provisions of ASC 350, goodwill with a carrying amount of $232.0 million was written down 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)(2)The fair value of the Green Bay Option 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 purchased as part of the WFME Asset Exchange if certain future conditions are met as detailed in the purchase agreement. See Note 2 “Acquisitions and Dispositions”. interest rate capInterest Rate Cap are measured within Level 2 on 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.”March 31,June 30, 2013 (dollars in thousands): Green Bay Option $ (11,386 ) 738 $ (10,648 ) Description Green Bay Option Fair value balance at January 1, 2013 $ (11,386 ) Add: Mark to market fair value adjustment 2,844 Fair value balance at June 30, 2013 $ (8,542 ) Description Contingent Consideration Fair value balance at January 1, 2013 $ — Add: Acquisition of WFME (31 ) Fair value balance at June 30, 2013 $ (31 ) March 31,June 30, 2013 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 $ (8,542 ) Black-Scholes Model Risk adjusted discount rate 6.6 % Total term less than 1 year Volatility rate 25 % Annual dividend rate — % Bond equivalent yield discount rate — % March 31,June 30, 2013 was as follows:Fair ValueValuation TechniqueUnobservable Inputs$ 31,000Income ApproachTotal term5 yearsConditions3Bond equivalent yield discount rate0.1%Fair Value Valuation Technique Unobservable Inputs $ 31 Income Approach Total term 5 years Conditions 3 Bond equivalent yield discount rate 0.1 % 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 First Lien Term Loan: Carrying value $ 1,287,260 $ 1,321,687 Fair value - Level 2 1,287,260 1,331,600 Second Lien Term Loan: Carrying value $ 785,497 $ 790,000 Fair value - Level 2 801,207 811,725 7.75% Senior Notes: Carrying value $ 610,000 $ 610,000 Fair value - Level 2 596,275 599,325 March 31,June 30, 2013, the Company used the trading prices of 101.0%100.0% and 104.0%102.0% to calculate the fair value of the First Lien Term Loan and Second Lien Term Loan, respectively, and 102.5%97.75% to calculate the fair value of the 7.75% Senior Notes.In connection with the Citadel Merger on September 15, 2011, the$0.01$0.01 per share, with a liquidation preference of $1,000$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, and has 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$125.0 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.$125.0$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.March 31,June 30, 2013 were $2.7 millionand $5.4 million, respectively. Total dividends accrued on the Series A Preferred Stock during the three and six months ended June 30, 2012 were $4.4 millionand were $2.7$7.7 million and $3.3 million,, respectively. Total dividends paid on the Series A Preferred Stock during the three and six months ended March 31,June 30, 2013 were $2.7 millionand $5.4 million, respectively. Total dividends paid on the Series A Preferred Stock during the three and six months ended June 30, 2012 were $3.3 millionand were $2.7$6.5 million and $3.1 million,, respectively. During the three and six months ended March 31,June 30, 2013, the Company accreted $0.5 millionand$1.0 million, respectively, on the Series A Preferred Stock. During the three and six months ended June 30, 2012, the Company accreted $0.5$2.4 million and $2.4$4.8 million, respectively, on the Series A Preferred Stock. At MarchJune 30, 2013 and December 31, 2013, 2012, 75,767 shares of Series A Preferred Stock remainremained 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,June 30, 2013 and MarchDecember 31, 2012. The Company paid approximately $2.7 million in cash dividends in April 2013, in accordance with the terms described above.$0.01$0.01 per share (see Note 9, “Redeemable Preferred Stock”). Effective September 16, 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, the Company issued and sold (i) 51.8 million shares of Class A common stock and warrants to purchase 7.8 million shares of Class A common stock with an exercise price of $4.34 per share (the “Crestview Warrants”) to an affiliate of Crestview; (ii) 125,000 shares of Series A Preferred Stock to an affiliate of Macquarie (see Note 9, “Redeemable Preferred Stock”); 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.$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,June 30, 2013, 1.00.9 million 2009 Warrants remained outstanding.As described above and inRadio Holdingsa subsidiary of the Company, 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 to acquire shares of this subsidiary were amended and restated to no longer be exercisable for shares of common stock of Radio Holdingsthis subsidiary 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.Citadel emerged from bankruptcy effective June 3, 2010 and, as of September 16, 2011, certain bankruptcy-related claims against Citadel remained open for final resolution. March 31,June 30, 2013, 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,June 30, 2013 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.March 31,June 30, 2013, approximately 1.12.6 million and 3.7 million, respectively, Company Warrants were converted into shares of Class A common stock with an aggregate total of 35.337.9 million having been converted since issuance through March 31,June 30, 2013. At March 31,June 30, 2013, 36.333.8 million Company Warrants remained outstanding.Pursuant to the Equity Investmentthe 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 of the date of such issuance. In addition, the number of shares of Class A common stockMarch 31,June 30, 2013, all 7.8 million Crestview Warrants remained outstanding.$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 1,357,500 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 with 20% vesting on each of February 16, 2014 and 2015.haspreviously had certain liability-basedliability classified awards related to the cash consideration portion of the Citadel Merger (“Liability Awards”). These Liability Awards were fully expensed during the second of quarter of 2012 and as such, the Company had no stock based compensation expense related to the Liability Awards in any period in 2013. For the three and six months ended March 31, 2013 andJune 30, 2012, the Company recognized $2.7approximately $2.7 million and $2.8$6.9 million, respectively, in stock-based compensation expense related to equity awards. For the three months ended March 31, 2012, the Company recognized $4.2 million in stock-based compensation expense related to Liability Awards.March 31,June 30, 2013, unrecognized stock-based compensation expense of approximately $16.5$14.6 million related to equity awards is expected to be recognized over a weighted average remaining life of 2.52.2 years. There is no unrecognizedUnrecognized stock-based compensation expense related to Liability Awards as of March 31, 2013. Unrecognized stock-based compensation expensefor the equity awards will be adjusted for future changes in estimated forfeitures.threesix months ended March 31,June 30, 2013 was $1.5 million.$1.6 million. The total fair value of restricted stock awards that vested during the threesix months ended March 31,June 30, 2012 was $5.7$19.1 million, of which $1.5$13.2 million related to the Liability Awards and was paid in cash. No options were exercised during either of the threesix months ended March 31,June 30, 2012 or 2013.Third Amendment and Restated charterCompany's certificate of incorporation 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 per share is computed in the same manner as basic earnings 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 is allocated to common stock and participating securities to the extent that each security may share in earnings, as if all of the earnings for the period had been distributed. Earnings are allocated to each participating security and common shares equally, after deducting dividends declared or accretion on preferred stock. The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended March 31,June 30, 2013 and 2012 (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 ) Potentially dilutive equivalent shares outstanding for 2013 2012 2013 2012 Basic Income (Loss) Per Share Numerator: Undistributed net income (loss) from continuing operations $ 27,101 $ (1,763 ) $ 18,112 $ (14,362 ) Less: Dividends declared on redeemable preferred stock 2,652 4,375 5,304 7,708 Accretion of redeemable preferred stock 1,007 1,852 1,989 4,620 Participation rights of the Company Warrants in undistributed earnings 3,890 — 1,833 — Participation rights of unvested restricted stock in undistributed earnings 39 — 23 — Basic undistributed net income (loss) from continuing operations attributable to common shares $ 19,513 $ (7,990 ) $ 8,963 $ (26,690 ) Denominator: Basic weighted average shares outstanding 176,482 157,711 175,620 153,540 Basic undistributed net income (loss) from continuing operations per share--attributable to common shares $ 0.11 $ (0.05 ) $ 0.05 $ (0.17 ) Diluted Income (Loss) Per Share: Numerator: Undistributed net income (loss) from continuing operations $ 27,101 $ (1,763 ) $ 18,112 $ (14,362 ) Less: Dividends declared on redeemable preferred stock 2,652 4,375 5,304 7,708 Accretion of redeemable preferred stock 1,007 1,852 1,989 4,620 Participation rights of the Company Warrants in undistributed net income 3,834 — 1,807 — Participation rights of unvested restricted stock in undistributed earnings 38 — 23 — Basic undistributed net income (loss) from continuing operations attributable to common shares $ 19,570 $ (7,990 ) $ 8,989 $ (26,690 ) Denominator: Basic weighted average shares outstanding 176,482 157,711 175,620 153,540 Effect of dilutive options and warrants 3,072 — 3,059 — Diluted weighted average shares outstanding 179,554 157,711 178,679 153,540 Diluted undistributed net income (loss) from continuing operations attributable to common shares $ 0.11 $ (0.05 ) $ 0.05 $ (0.17 ) March 31,June 30, 2013, the Company had 20.0 million stock options and 7.8 million warrants that were antidilutive, respectively, due to having higher exercise prices than the Company's average stock price during the period.computation of diluted loss per share, consisted of approximately 39.8 million and 64.3 million, respectively, additional shares of common stock to underlying outstanding warrants.and the tax amortization of broadcast licenses and goodwill;goodwill, and assets classified as having an indefinite life for book purposes.March 31,June 30, 2013, 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. TheIn accordance with ASC Topic 740, Accounting for Income Taxes, the Company continually reviews the adequacy of the valuation allowance and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740,Accounting for Income Taxes. As of March 31,June 30, 2013, the Company does not believe it is more likely than not that the remaining 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 a deferred tax benefit in the period of adjustment.$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.$187.0$177.1 million and is expected to be paid in accordance with the agreements through December 2017.March 31,June 30, 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.March 31,June 30, 2013, 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.March 31,June 30, 2013, Cumulus and certain of its 100% owned subsidiaries (such subsidiaries, the “Subsidiary Guarantors”) provided guarantees of the obligations of Cumulus Holdings 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”). 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”).March 31,June 30, 2013 and 2012, (ii) unaudited condensed consolidating balance sheets as of March 31,June 30, 2013 and December 31, 2012, and (iii) unaudited condensed consolidating statements of cash flows for the threesix months ended March 31,June 30, 2013 and 2012, of each of the Parent Guarantor, Cumulus Holdings, the Subsidiary Guarantors, and the Subsidiary Non-guarantors.March 31,June 30, 2013 and for the three and six months ended March 31,June 30, 2013.periods or at December 31, 2011.periods. 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.periods or at December 31, 2011.periods. The Company should have presented the intercompany transactions within financing activities as these transactions had been previously presented in 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 balances 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. There was no impact on the consolidated balance sheet, statement of income or statement of cash flows.as of December 31, 2011 andfor the three and six months ended March 31,June 30, 2012 and will revise the interim condensed consolidating information in future quarterly filings.March 31,June 30, 2013 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 Broadcast revenues $ — $ — $ 289,676 $ — $ — $ 289,676 Management fees — — — — — — Net revenues — — 289,676 — — 289,676 Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) — — 171,143 619 — 171,762 Depreciation and amortization — 484 28,451 — — 28,935 LMA fees — — 759 — — 759 Corporate general and administrative expenses (including stock-based compensation expense of $2,470) — 7,760 — — — 7,760 Loss on sale of stations — — 91 — — 91 Gain on derivative instrument — — (2,106 ) — — (2,106 ) Total operating expenses — 8,244 198,338 619 — 207,201 Operating (loss) income — (8,244 ) 91,338 (619 ) — 82,475 Non-operating (expense) income: Interest expense, net (2,378 ) (41,532 ) 77 — — (43,833 ) Loss on early extinguishment of debt — (4,539 ) — — — (4,539 ) Other expense, net — — (511 ) — — (511 ) Total non-operating expense, net (2,378 ) (46,071 ) (434 ) — — (48,883 ) (Loss) income before income taxes (2,378 ) (54,315 ) 90,904 (619 ) — 33,592 Income tax benefit (expense) — — 11,520 (18,011 ) — (6,491 ) Earnings (loss) from consolidated subsidiaries 29,479 83,794 (18,630 ) — (94,643 ) — Net income (loss) $ 27,101 $ 29,479 $ 83,794 $ (18,630 ) $ (94,643 ) $ 27,101 Eliminations Broadcast revenues $ — $ — $ 522,548 $ — $ — $ 522,548 Management fees — — — — — — Net revenues — — 522,548 — — 522,548 Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) — — 334,825 1,109 — 335,934 Depreciation and amortization — 981 56,885 — — 57,866 LMA fees — — 1,728 — — 1,728 Corporate general and administrative expenses (including stock-based compensation expense of $5,134) — 21,626 — — — 21,626 Loss on sale of stations — — 1,400 — — — 1,400 Gain on derivative instrument — — (2,844 ) — — (2,844 ) Total operating expenses — 22,607 391,994 1,109 — 415,710 Operating (loss) income — (22,607 ) 130,554 (1,109 ) — 106,838 Non-operating (expense) income: Interest (expense) income, net (4,689 ) (83,474 ) 78 — — (88,085 ) Loss on early extinguishment of debt — (4,539 ) — — — (4,539 ) Other expense, net — — (378 ) — — (378 ) Total non-operating expense, net (4,689 ) (88,013 ) (300 ) — — (93,002 ) (Loss) income before income taxes (4,689 ) (110,620 ) 130,254 (1,109 ) — 13,836 Income tax benefit (expense) — — 12,715 (8,439 ) — 4,276 Earnings (loss) from consolidated subsidiaries 22,801 133,421 (9,548 ) — (146,674 ) — Net income (loss) $ 18,112 $ 22,801 $ 133,421 $ (9,548 ) $ (146,674 ) $ 18,112 March 31,June 30, 2012 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 ) Eliminations Broadcast revenues $ — $ — $ 280,745 $ — $ — $ 280,745 Management fees 296 — — — — 296 Net revenues 296 — 280,745 — — 281,041 Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) — — 168,222 524 — 168,746 Depreciation and amortization 345 — 35,855 — — 36,200 LMA fees — — 885 — — 885 Corporate general and administrative expenses (including stock-based compensation expense of $5,928) 16,802 — — — — 16,802 Loss on derivative instrument — — 841 — — 841 Impairment of intangible assets — — 12,435 — — 12,435 Total operating expenses 17,147 — 218,238 524 — 235,909 Operating (loss) income (16,851 ) — 62,507 (524 ) — 45,132 Non-operating (expense) income: Interest (expense) income, net (227 ) (49,694 ) 302 — — (49,619 ) Other expense, net — — (74 ) — — (74 ) Total non-operating (expense) income, net (227 ) (49,694 ) 228 — — (49,693 ) (Loss) income before income taxes (17,078 ) (49,694 ) 62,735 (524 ) — (4,561 ) Income tax benefit — — 340 2,458 — 2,798 (Loss) income from continuing operations (17,078 ) (49,694 ) 63,075 1,934 — (1,763 ) Income (loss) from discontinued operations, net of taxes — — 11,341 (1,435 ) — 9,906 Earnings (loss) from consolidated subsidiaries 25,221 74,915 499 — (100,635 ) — Net income (loss) $ 8,143 $ 25,221 $ 74,915 $ 499 $ (100,635 ) 8,143 Eliminations Broadcast revenues $ — $ — $ 516,710 $ — $ — $ 516,710 Management fees 326 — — — — 326 Net revenues 326 — 516,710 — — 517,036 Operating expenses: Direct operating expenses (excluding depreciation, amortization and LMA fees) — — 321,396 1,046 — 322,442 Depreciation and amortization 566 — 70,441 — — 71,007 LMA fees — — 1,724 — — 1,724 Corporate general and administrative expenses (including stock-based compensation expense of $12,906) 33,494 — — — — 33,494 Realized loss on derivative instrument — — 753 — — 753 Impairment of intangible assets — — 12,435 — — 12,435 Total operating expenses 34,060 — 406,749 1,046 — 441,855 Operating (loss) income (33,734 ) — 109,961 (1,046 ) — 75,181 Non-operating (expense) income: Interest (expense) income, net (322 ) (100,698 ) 598 — — (100,422 ) Other income, net — — 190 — — 190 Total non-operating (expense) income, net (322 ) (100,698 ) 788 — — (100,232 ) (Loss) income before income taxes (34,056 ) (100,698 ) 110,749 (1,046 ) — (25,051 ) Income tax benefit — — 1,268 9,421 — 10,689 (Loss) income from continuing operations (34,056 ) (100,698 ) 112,017 8,375 — (14,362 ) Income (loss) from discontinued operations, net of taxes — — 13,490 (3,115 ) — 10,375 Earnings (loss) from consolidated subsidiaries 30,069 130,767 5,260 — (166,096 ) — Net (loss) income $ (3,987 ) $ 30,069 $ 130,767 $ 5,260 $ (166,096 ) $ (3,987 ) March 31, 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 $ — $ 45,724 $ 492 $ — $ — $ 46,216 Restricted cash — 3,729 — — — 3,729 Accounts receivable, less allowance for doubtful accounts of $3,779 — — 203,469 — — 203,469 Trade receivable — — 7,344 — — 7,344 Deferred income taxes — — 29,658 29,658 Prepaid expenses and other current assets — 2,036 19,916 — — 21,952 Total current assets — 51,489 260,879 — — 312,368 Property and equipment, net — 3,821 242,707 — — 246,528 Broadcast licenses — — — 1,640,882 — 1,640,882 Other intangible assets, net — — 215,386 — — 215,386 Goodwill — — 1,204,953 — — 1,204,953 Investment in consolidated subsidiaries 413,711 3,536,643 1,157,165 — (5,107,519 ) — Intercompany receivables — 77,913 617,941 — (695,854 ) — Other assets — 52,349 17,718 — — 70,067 Total assets $ 413,711 $ 3,722,215 $ 3,716,749 $ 1,640,882 $ (5,803,373 ) $ 3,690,184 Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ — $ 22,988 $ 52,884 $ — $ — $ 75,872 Trade payable — — 6,620 — — 6,620 Current portion of long-term debt — 13,250 — — — 13,250 Other current liabilities — — 8,542 — — 8,542 Total current liabilities — 36,238 68,046 — — 104,284 Long-term debt, excluding 7.75% Senior Notes — 2,040,359 — — — 2,040,359 7.75% Senior Notes — 610,000 — — — 610,000 Other liabilities — 3,966 37,156 — — 41,122 Intercompany payables 77,913 617,941 — (695,854 ) — Deferred income taxes — — 74,904 483,717 — 558,621 Total liabilities 77,913 3,308,504 180,106 483,717 (695,854 ) 3,354,386 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 72,871 — — — — 72,871 Total redeemable preferred stock 72,871 — — — — 72,871 Stockholders’ equity (deficit): Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 186,456,601 and 182,682,073 shares issued, and 162,326,226 and 158,519,394 shares outstanding, at June 30, 2013 and December 31, 2012, respectively 1,864 — — — — 1,864 Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding at both June 30, 2013 and December 31, 2012 154 — — — — 154 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding at both June 30, 2013 and December 31, 2012 6 — — — — 6 Treasury stock, at cost, 24,130,375 and 24,162,676 shares at June 30, 2013 and December 31, 2012, respectively (250,697 ) — — — — (250,697 ) Additional paid-in-capital 1,511,689 208,301 3,901,332 2,139,092 (6,248,725 ) 1,511,689 Accumulated (deficit) equity (1,000,089 ) 205,410 (364,689 ) (981,927 ) 1,141,206 (1,000,089 ) Total stockholders’ equity (deficit) 262,927 413,711 3,536,643 1,157,165 (5,107,519 ) 262,927 Total liabilities, redeemable preferred stock and stockholders’ equity (deficit) $ 413,711 $ 3,722,215 $ 3,716,749 $ 1,640,882 $ (5,803,373 ) $ 3,690,184 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 $ 81,599 $ — $ 6,451 $ — $ — $ 88,050 Restricted cash 5,921 — — — — 5,921 Accounts receivable, less allowance for doubtful accounts of $4,131 — — 207,563 — — 207,563 Trade receivable — — 6,104 — — 6,104 Deferred income Tax — — 25,145 — — 25,145 Prepaid expenses and other current assets 6,928 — 13,408 — — 20,336 Total current assets 94,448 — 258,671 — — 353,119 Property and equipment, net 4,690 — 251,213 — — 255,903 Broadcast licenses — — — 1,602,373 — 1,602,373 Other intangible assets, net — — 258,761 — — 258,761 Goodwill — — 1,195,594 — — 1,195,594 Investment in consolidated subsidiaries 415,573 3,354,891 1,127,135 — (4,897,599 ) — Intercompany receivables — — 471,329 — (471,329 ) — Other assets 11,605 47,818 18,402 — — 77,825 Total assets $ 526,316 $ 3,402,709 $ 3,581,105 $ 1,602,373 $ (5,368,928 ) $ 3,743,575 Liabilities, Redeemable Preferred Stock and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ 10,690 $ 8,213 $ 83,683 $ — $ — $ 102,586 Trade payable — — 4,803 — — 4,803 Current portion of long-term debt — 76,468 — — — 76,468 Other current liabilities — — 11,386 — — 11,386 Total current liabilities 10,690 84,681 99,872 — — 195,243 Long-term debt, excluding 7.75% Senior Notes — 2,014,599 — — — 2,014,599 7.75% Senior Notes — 610,000 — — — 610,000 Other liabilities 3,651 — 41,662 — — 45,313 Intercompany payables 193,473 277,856 — — (471,329 ) — Deferred income taxes — — 84,680 475,238 — 559,918 Total liabilities 207,814 2,987,136 226,214 475,238 (471,329 ) 3,425,073 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 71,869 — — — — 71,869 Total redeemable preferred stock 71,869 — — — — 71,869 Stockholders’ equity (deficit): Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 186,456,601 and 182,682,073 shares issued, and 162,326,226 and 158,519,394 shares outstanding, at June 30, 2013 and December 31, 2012, respectively 1,827 — — — — 1,827 Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding at both June 30, 2013 and December 31, 2012 154 — — — — 154 Class C common stock, par value $0.01 per share; 644,871 shares authorized, issued and outstanding at both June 30, 2013 and December 31, 2012 6 — — — — 6 Treasury stock, at cost, 24,130,375 and 24,162,676 shares at June 30, 2013 and December 31, 2012, respectively (252,001 ) — — — — (252,001 ) Additional paid-in-capital 1,514,849 232,964 3,853,001 2,099,514 (6,185,479 ) 1,514,849 Accumulated (deficit) equity (1,018,202 ) 182,609 (498,110 ) (972,379 ) 1,287,880 (1,018,202 ) Total stockholders’ equity (deficit) 246,633 415,573 3,354,891 1,127,135 (4,897,599 ) 246,633 Total liabilities, redeemable preferred stock and stockholders’ equity (deficit) $ 526,316 $ 3,402,709 $ 3,581,105 $ 1,602,373 $ (5,368,928 ) $ 3,743,575 ThreeMarch 31,June 30, 2013 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 Eliminations Cash flows from operating activities: Net income (loss) $ 18,112 $ 22,801 $ 133,421 $ (9,548 ) $ (146,674 ) $ 18,112 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization — 981 56,885 — — 57,866 Amortization of debt issuance costs/discounts — 5,164 — — — 5,164 Provision for doubtful accounts — — 1,046 — — 1,046 Loss on sale of assets or stations — — 1,537 — — 1,537 Loss on early extinguishment of debt — 4,539 — — — 4,539 Fair value adjustment of derivative instruments — (27 ) (2,844 ) — — (2,871 ) Deferred income taxes — — (14,248 ) 8,439 — (5,809 ) Stock-based compensation expense — 5,134 — — — 5,134 (Loss) earnings from consolidated subsidiaries (22,801 ) (133,421 ) 9,548 — 146,674 — Changes in assets and liabilities (81,633 ) 41,180 11,400 1,109 — (27,944 ) Net cash (used in) provided by operating activities (86,322 ) (53,649 ) 196,745 — — 56,774 Cash flows from investing activities Proceeds from sale of assets or stations — — 692 — — 692 Restricted cash — 2,192 — — — 2,192 Acquisition less cash required — — (52,066 ) — — (52,066 ) Capital expenditures — (112 ) (4,718 ) — — (4,830 ) Net cash provided by (used in) investing activities — 2,080 (56,092 ) — — (54,012 ) Cash flows from financing activities: Intercompany transactions, net 9,993 136,619 (146,612 ) — — — Repayments of borrowings under term loans and revolving credit facilities — (38,931 ) — — — (38,931 ) Tax withholding payments on behalf of employees for stock-based compensation — (337 ) — — — (337 ) Preferred stock dividends (5,304 ) — — — — (5,304 ) Proceeds from exercise of warrants 34 — — — — 34 Deferred financing costs — (58 ) — — — (58 ) Net cash provided by (used in) financing activities 4,723 97,293 (146,612 ) — — (44,596 ) (Decrease) increase in cash and cash equivalents (81,599 ) 45,724 (5,959 ) — — (41,834 ) Cash and cash equivalents at beginning of period 81,599 — 6,451 — — 88,050 Cash and cash equivalents at end of period $ — $ 45,724 $ 492 $ — $ — $ 46,216 ThreeMarch 31,June 30, 2012 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 $ (3,987 ) $ 30,069 $ 130,767 $ 5,260 $ (166,096 ) $ (3,987 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 566 — 71,676 — — 72,242 Amortization of debt issuance costs/discount — 5,061 — — — 5,061 Provision for doubtful accounts — — 1,598 — — 1,598 Gain on sale of assets or stations — — (183 ) — — (183 ) Impairment of intangible assets — 12,435 12,435 Fair value adjustment of derivative instruments 250 — 753 — — 1,003 Deferred income taxes — — (7,991 ) (6,311 ) — (14,302 ) Stock-based compensation expense 12,906 — — — — 12,906 Earnings from consolidated subsidiaries 30,069 130,767 5,260 — (166,096 ) — Changes in assets and liabilities (68,243 ) (266,595 ) (29,988 ) 1,051 332,192 (31,583 ) Net cash (used in) provided by operating activities (28,439 ) (100,698 ) 184,327 — — 55,190 Cash flows from investing activities: Proceeds from sale of assets or stations 426 — — — — 426 Capital expenditures (676 ) — (1,243 ) — — (1,919 ) Net cash used in investing activities (250 ) — (1,243 ) — — (1,493 ) Cash flows from financing activities: Intercompany transactions, net 40,274 157,698 (197,972 ) — — — Repayments of borrowings under term loans and revolving credit facilities — (57,000 ) — — — (57,000 ) Tax withholding payments on behalf of employees for stock-based compensation (1,909 ) — — — — (1,909 ) Preferred stock dividends (6,458 ) — — — — (6,458 ) Proceeds from exercise of warrants 161 — — — — 161 Net cash provided by (used in) financing activities 32,068 100,698 (197,972 ) — — (65,206 ) Increase (decrease) in cash and cash equivalents 3,379 — (14,888 ) — — (11,509 ) Cash and cash equivalents at beginning of period 11,714 — 18,878 — — 30,592 Cash and cash equivalents at end of period $ 15,093 $ — $ 3,990 $ — $ — $ 19,083 March 31,June 30, 2013, we owned or operatedMarch 31,June 30, 2013, under LMAs, we provided sales and marketing services for 14 radio stations 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 company with a true national platform withand 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 increased scale has allowedallows larger, more significant investments in the local digital media marketplace allowingenabling us to apply our local digital platforms and strategies, including our social commerce initiatives to be applied across significant additional markets. We believe our onesingle national platform 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 pursue and finance potential strategic acquisitions in the future.the 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.March 31,June 30, 2013, we had $1.318$1.287 billion outstanding under the First Lien Facility, $790.0$785.5 million outstanding under the Second Lien Facility and no amounts outstanding under the Revolving Credit Facility.December 20, 2012,May 31, 2013, we entered into an amendment and restatement (the “Amendment and Restatement”“Amendment”) of ourto the 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”).Facility. Pursuant to the Amendment, and Restatement, the terms and conditionsconsolidated total net leverage ratio covenant contained in the Original Agreement remained substantially unchanged, except as follows: (i)First Lien Facility, with which the amount outstanding thereunderCompany was increasedrequired 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%.Incomply in the event amounts arewere outstanding under the Revolving Credit Facility the First Lien Facility requires compliancehas been replaced with a consolidated totalfirst lien net leverage ratio. At March 31, 2013, this ratio would have been 6.5 to 1.0. Such ratio will be reduced in future periods if amounts are outstandingcovenant, and the total commitments under the Revolving Credit Facility at an applicable date. At March 31, 2013 we would not have been in compliance with this ratio. As a result, borrowings under the revolving credit facility were not available at that date. The Second Lien Facility does not contain any financial covenants. At March 31, 2013 our long-term debt consisted of $2.1 billion in total term loans 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$300.0 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.March 31,June 30, 2013, that cash on hand and cash expected to be generated from operating activities 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,June 30, 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’s 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 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 formats and proprietary content. In addition, we believe that the portfolio 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 cluster of stations, thereby providing each of our potential advertisers with an effective means of reaching a targeted demographic group. In the broadcasting industry, we sometimes utilize trade or barter agreements that exchange advertising time for goods or services such as travel or lodging, instead of for cash. Trade revenue totaled $4.9$12.5 million and $6.8$13.6 million infor the threesix months ended March 31,June 30, 2013 and 2012, 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 advertising represented approximately 71.9%67.6% and 72.7%67.3% of our total revenues during the three and six 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.Credit Agreement, as amended and restated, (the “First Lien Facility”).loss,income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, follows in this section. 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. 2013 2012 2013 2012 STATEMENT OF OPERATIONS DATA: Net revenues $ 289,676 $ 281,041 $ 522,548 $ 517,036 3.1 % 1.1 % Direct operating expenses (excluding depreciation, amortization and LMA fees) 171,762 168,746 335,934 322,442 1.8 % 4.2 % Depreciation and amortization 28,935 36,200 57,866 71,007 (20.2 )% (18.5 )% LMA fees 759 885 1,728 1,724 (14.2 )% 0.2 % Corporate, general and administrative expenses (including stock-based compensation expense) 7,760 16,802 21,626 33,494 (53.8 )% (35.5 )% Loss on sale of stations 91 — 1,400 — ** ** (Gain) loss on derivative instrument (2,106) 841 (2,844 ) 753 ** ** Impairment of intangible assets — 12,435 — 12,435 ** ** Operating income 82,475 45,132 106,838 75,181 82.7 % 42.1 % Interest expense, net (43,833 ) (49,619 ) (88,085 ) (100,422 ) (11.7 )% (12.3 )% Loss on early extinguishment of debt (4,539 ) — (4,539 ) — ** ** Other (loss) income, net (511 ) (74 ) (378 ) 190 590.5 % (298.9 )% Income (loss) from continuing operations before income taxes 33,592 (4,561) 13,836 (25,051 ) ** ** Income tax (expense) benefit (6,491 ) 2,798 4,276 10,689 ** ** Income (loss) from continuing operations 27,101 (1,763) 18,112 (14,362 ) ** ** Income from discontinued operations, net of taxes — 9,906 — 10,375 ** ** Net income (loss) $ 27,101 $ 8,143 $ 18,112 $ (3,987 ) ** ** OTHER DATA: Adjusted EBITDA $ 112,800 $ 106,129 $ 172,688 $ 179,736 6.3 % (3.9 )% March 31,June 30, 2013 Compared to the Three Months Ended March 31,June 30, 2012March 31,June 30, 2013 decreased $3.1increased $8.7 million, or 1.3%3.1%, to $232.9$289.7 million, compared to $236.0$281.0 million for the three months ended March 31,June 30, 2012. This decreaseincrease was attributable to lowera $4.3 million increase in local advertising revenue, a $3.9 million increase in revenue related to digital initiatives and a $2.8 million increase in revenue due to the addition of stations in the Bloomington and Peoria markets we acquired from Townsquare Media in July 2012. These increases were partially offset by a decrease of $2.3 million in cyclical political revenues and general lower advertising spending in some of our markets.revenue.March 31,June 30, 2013 increased $10.6$3.1 million, or 6.9%1.8%, to $164.2$171.8 million, compared to $153.6$168.7 million for the three months ended March 31,June 30, 2012. The increase was primarily attributable to a $1.0$4.6 million increase in our strategic content initiatives, a $4.1 million increase related to ongoing investments in our sales salaries,infrastructure and a $1.6$1.9 million increase in Arbitron feesexpenses due to the addition of stations in the Bloomington and Peoria markets we acquired from Townsquare Media in July 2012. These increases were partially offset by a $4.9$7.5 million increasedecrease in expense at our network division as we invest in various content initiatives.music royalties.March 31,June 30, 2013 decreased $6.0$7.3 million, or 17.1%20.2%, to $28.9 million, compared to $34.9$36.2 million for the three months ended March 31,June 30, 2012. This decrease was primarily due to a $7.0$6.6 million decrease in amortization expense on the Company’sour definite lived intangibles offset byintangible assets, which results from the accelerated amortization methodology we have applied since acquisition of the assets based on the expected pattern in which the underlying assets' economic benefits are consumed. There was also a $1.0$0.7 million increasedecrease in depreciation expense.March 31,June 30, 2013 decreased $2.8$9.0 million, or 16.9%53.8%, to $13.9$7.8 million, compared to $16.7$16.8 million for the three months ended March 31,June 30, 2012. TheThis decrease isstock basedstock-based compensation expense of $4.3and a $1.1 million partially offset by a $1.2 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(Gain) loss on Derivative Instrument.For the three months ended March 31,June 30, 2013, we recorded a $0.7$2.1 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$0.8 million gain loss recorded for the three months ended March 31,June 30, 2012.March 31,June 30, 2013 decreased $6.5$5.8 million, or 12.9%11.7%, to $44.3$43.8 million compared to $50.8$49.6 million for the three months ended March 31,June 30, 2012. Interest expense associated with outstanding debt decreased by $6.5$6.3 million to $41.5$41.4 million as compared to $48.0$47.7 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.amendment to our First Lien Facility. The following summary details the components of our interest expense, net of interest income (dollars in thousands): 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. 2013 vs 2012 2013 2012 $ Change % Change 7.75% Senior Notes $ 11,819 $ 11,819 $ — — % Bank borrowings – term loans and revolving credit facilities 29,534 35,848 (6,314 ) (17.6 )% Other interest expense 2,876 2,089 787 37.7 % Change in fair value of interest rate cap and swap (32 ) 165 (197 ) (119.4 )% Interest income (364 ) (302 ) (62 ) 20.5 % Interest expense, net $ 43,833 $ 49,619 $ (5,786 ) (11.7 )% March 31,June 30, 2013, the Company recorded income tax benefitsexpense of $10.8$6.5 million, on a pre-tax lossincome from continuing operations of $19.8$33.6 million, resulting in an effective tax rate for the three months ended March 31,June 30, 2013 of approximately 54.5%19.3%. For the three months ended March 31,June 30, 2012, the Company recorded an income tax benefit of $7.9$2.8 million, on pre-tax loss from continuing operations of $20.5$4.6 million, resulting in an effective tax rate for the three months ended March 31,June 30, 2012 of approximately 38.5%60.9%.goodwill;goodwill and changes in the valuation allowance on net deferred tax assets.classified as having an indefinite life for book purposes.March 31,June 30, 2013 decreased $17.0increased $6.7 million to $59.9$112.8 million from $76.9$106.1 million for the three months ended March 31,June 30, 2012.lossincome (loss) (the most directly comparable financial measure calculated and presented in accordance with GAAP) as presented in the accompanying consolidated statements of operations (dollars in thousands): 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. 2013 2012 2013 2012 Net income (loss) $ 27,101 $ 8,143 $ 18,112 $ (3,987 ) ** ** Income tax expense (benefit) 6,491 (2,798 ) (4,276 ) (10,689 ) ** ** Non-operating expenses, including net interest expense 48,883 49,693 93,002 100,232 (1.6 )% (7.2 )% LMA fees 759 885 1,728 1,724 (14.2 )% 0.2 % Depreciation and amortization 28,935 36,200 57,866 71,007 (20.1 )% (18.5 )% Stock-based compensation expense 2,470 5,928 5,134 12,906 (58.3 )% (60.2 )% Loss on sale of stations 91 — 1,400 — ** ** (Gain) loss on derivative instrument (2,106 ) 841 (2,844 ) 753 ** ** Impairment of intangible assets — 12,435 — 12,435 ** ** Acquisition-related costs — 4,443 2,214 5,465 ** (59.5 )% Franchise taxes 176 265 352 265 (33.6 )% 32.8 % Discontinued operations — (9,906 ) — (10,375 ) ** ** Adjusted EBITDA $ 112,800 $ 106,129 $ 172,688 $ 179,736 6.3 % (3.9 )% 2013 vs 2012 2013 2012 $ Change % Change 7.75% Senior Notes $ 23,638 $ 23,638 $ — — % Bank borrowings – term loans and revolving credit facilities 59,214 72,067 (12,853 ) (17.8 )% Other interest expense 5,894 5,065 829 16.4 % Change in fair value of interest rate cap and swap (27 ) 250 (277 ) (110.8 )% Interest income (634 ) (598 ) (36 ) 6.0 % Interest expense, net $ 88,085 $ 100,422 $ (12,337 ) (12.3 )% Three Months Ended
March 31, 2013 2012 (Dollars in thousands) $ 54,806 $ 60,278 2013 2012 (Dollars in thousands) Net cash provided by operating activities 56,774 $ 55,190 threesix months ended March 31,June 30, 2013 compared to the threesix months ended March 31,June 30, 2012, net cash provided by operating activities decreased $5.5increased $1.6 million as compared to the threesix months ended March 31,June 30, 2012. The decreaseincrease was primarily due to a decrease in net revenues of $12.4 million, partially offset by an aggregate increase in cash providedworking capital driven by operating assetsslightly better collections and liabilitiestiming of $8.4 million. Three Months Ended
March 31, (Dollars in thousands) 2013 2012 $ (53,760 ) $ (800 ) (Dollars in thousands) 2013 2012 Net cash used in investing activities (54,012 ) $ (1,493 ) threesix months ended March 31,June 30, 2013 compared to the threesix months ended March 31,June 30, 2012, net cash used in investing activities increased $53.0$52.5 million, primarily due to completing $52.1 million in acquisitions during the threesix months ended March 31,June 30, 2013. Three Months Ended
March 31, (Dollars in thousands) 2013 2012 $ (6,290 ) $ (58,437 ) (Dollars in thousands) 2013 2012 Net cash used in financing activities (44,596 ) $ (65,206 ) threesix months ended March 31,June 30, 2013 compared to the threesix months ended March 31,June 30, 2012, net cash used in financing activities decreased $52.1$20.6 million, primarily attributable to repaying $50.7$18.1 million less of 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, 2012 (the “2012 Annual Report”).asat the reasonable assurance level as of March 31,June 30, 2013.March 31,June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.March 31,June 30, 2013, we did not purchase any shares of our Class A Common Stock. As10.1 — Amendment, dated May 31, 2013, to the First Lien Credit Agreement, dated as of September 16, 2011, as amended and restated as of December 20, 2012, among the Company, Cumulus Media Holdings, Inc., as borrower, and the agents and lenders thereto. 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 — 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,June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statement of Operations for the three months and six months ended March 31,June 30, 2013 and 2012, (ii) Condensed Consolidated Balance Sheets as of March 31,June 30, 2013 and December 31, 2012, (iii) Condensed Consolidated Statement of Cash Flows for the threesix months ended March 31,June 30, 2013 and 2012, and (iv) Notes to Condensed Consolidated Financial 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: July 30, 2013 By: Joseph P. Hannan 10.1 — Amendment, dated May 31, 2013, to the First Lien Credit Agreement, dated as of September 16, 2011, as amended and restated as of December 20, 2012, among the Company, Cumulus Media Holdings, Inc., as borrower, and the agents and lenders thereto. 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,June 30, 2013, formatted in XBRL (eXtensible(extensible Business Reporting Language): (i) Condensed Consolidated Statement of Operations for the three months and six months ended March 31,June 30, 2013 and 2012, (ii) Condensed Consolidated Balance Sheets as of March 31,June 30, 2013 and December 31, 2012, (iii) Condensed Consolidated Statement of Cash Flows for the threesix months ended March 31,June 30, 2013 and 2012, and (iv) Notes to Condensed Consolidated Financial 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. 40Period Consolidated First Lien Net Leverage Ratio June 30, 2013 4.50 to 1.00 September 30, 2013 4.50 to 1.00 December 31, 2013 4.25 to 1.00 March 31, 2014 4.25 to 1.00 June 30, 2014 4.00 to 1.00 September 30, 2014 4.00 to 1.00 December 31, 2014 and thereafter 3.75 to 1.00 a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 30, 2013 By: Lewis W. Dickey, Jr. Chairman, President and Chief Executive Officer a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 30, 2013 By: Joseph P. Hannan Senior Vice President, Treasurer and Chief Financial Officer (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) Name: Lewis W. Dickey, Jr. Title: Chairman, President and Chief Executive Officer Name: Joseph P. Hannan Title: Senior Vice President, Treasurer and Chief Financial Officer