##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008.
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
 For or the transition period from                    to
 Commission file number 000-24525
 CUMULUS MEDIA INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware(State or Other Jurisdiction of 
Incorporation or Organization)
    
    36-4159663(I.R.S. Employer
Identification No.)3280 Peachtree Road, NW Suite 2300, Atlanta, GA(Address of Principal Executive Offices)
    
    30305(ZIP Code)
 (404) 949-0700
 þ o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




---



##### 



CUMULUS MEDIA INC.
 INDEX
 PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007
    
    
    3Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30,
2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2008 and 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24PART II. OTHER INFORMATION
    
    
    24Item 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3. Defaults Upon Senior Securities
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    27Signatures
    
    
    28Exhibit Index
    
    
    29EX-31.1EX-31.2EX-32.1
  2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except for share and per share data)
(Unaudited)
 September 30,
    
    
    December 31,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    61,291
    
    
    $
    32,286Accounts receivable, less allowance for doubtful accounts of $1,859 and $1,839, in
2008 and 2007, respectively
    
    
    50,481
    
    
    
    52,496Prepaid expenses and other current assets
    
    
    4,846
    
    
    
    5,835Total current assets
    
    
    116,618
    
    
    
    90,617Property and equipment, net
    
    
    57,549
    
    
    
    61,735Intangible assets, net
    
    
    784,728
    
    
    
    783,638Goodwill
    
    
    98,300
    
    
    
    98,300Investment in affiliate
    
    
    23,939
    
    
    
    22,252Other assets
    
    
    4,099
    
    
    
    4,000Total assets
    
    $
    1,085,233
    
    
    $
    1,060,542Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued expenses
    
    $
    19,427
    
    
    $
    23,916Other current liabilities
    
    
    6,901
    
    
    
    Current portion of long-term debt
    
    
    7,400
    
    
    
    13,490Total current liabilities
    
    
    33,728
    
    
    
    37,406Long-term debt
    
    
    717,260
    
    
    
    722,810Other liabilities
    
    
    12,668
    
    
    
    18,158Deferred income taxes
    
    
    174,356
    
    
    
    162,890Total liabilities
    
    
    938,012
    
    
    
    941,264Stockholders equity:Preferred stock, 20,262,000 shares authorized, par value $0.01 per share,
including: 250,000 shares designated as 13 3/4% Series A Cumulative
Exchangeable Redeemable Preferred Stock due 2009, stated value $1,000 per
share, 0 shares issued and outstanding in both 2008 and 2007 and 12,000 shares
designated as 12% Series B Cumulative Preferred Stock, stated value $10,000
per share, 0 shares issued and outstanding in both 2008 and 2007
    
    
    
    
    
    
    Class A common stock, par value $.01 per share; 100,000,000 shares
authorized; 59,572,592 and 59,468,086 shares issued, 36,035,749 and
37,101,154 shares outstanding, in 2008 and 2007, respectively
    
    
    596
    
    
    
    595Class B common stock, par value $.01 per share; 20,000,000 shares authorized;
5,809,191 shares issued and outstanding in both 2008 and 2007
    
    
    58
    
    
    
    58Class C common stock, par value $.01 per share; 30,000,000 shares authorized;
644,871 shares issued and outstanding in both 2008 and 2007
    
    
    6
    
    
    
    6Class A Treasury stock, at cost, 23,536,843 and 22,366,932 shares in 2008 and
2007, respectively
    
    
    (266,858
    )
    
    
    (267,084
    )Accumulated other comprehensive income
    
    
    1,821
    
    
    
    4,800Additional paid-in-capital
    
    
    969,913
    
    
    
    971,267Accumulated deficit
    
    
    (558,315
    )
    
    
    (590,364
    )Total stockholders equity
    
    
    147,221
    
    
    
    119,278Total liabilities and stockholders equity
    
    $
    1,085,233
    
    
    $
    1,060,542
 See accompanying notes to condensed consolidated financial statements.
 3




---



##### Table of Contents



CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except for share and per share data)
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Broadcast revenues
    
    $
    78,950
    
    
    $
    83,183
    
    
    $
    233,478
    
    
    $
    240,922Management fee from affiliate
    
    
    1,000
    
    
    
    1,000
    
    
    
    3,000
    
    
    
    3,000Net revenues
    
    
    79,950
    
    
    
    84,183
    
    
    
    236,478
    
    
    
    243,922Operating expenses:Station operating expenses (excluding depreciation,
amortization and LMA fees)
    
    
    50,795
    
    
    
    52,241
    
    
    
    154,920
    
    
    
    157,469Depreciation and amortization
    
    
    2,965
    
    
    
    3,624
    
    
    
    9,386
    
    
    
    11,184LMA fees
    
    
    71
    
    
    
    163
    
    
    
    571
    
    
    
    494Corporate general and administrative (including non-cash stock compensation of $1,015, $2,679, $3,882 and
$7,028, respectively)
    
    
    5,006
    
    
    
    6,981
    
    
    
    14,562
    
    
    
    19,761Impairment of goodwill and intangible assets
    
    
    
    
    
    
    81,335
    
    
    
    
    
    
    
    81,335Cost associated with terminated transaction
    
    
    82
    
    
    
    2,413
    
    
    
    1,975
    
    
    
    2,413Total operating expenses
    
    
    58,919
    
    
    
    146,757
    
    
    
    181,414
    
    
    
    272,656Operating income (loss)
    
    
    21,031
    
    
    
    (62,574
    )
    
    
    55,064
    
    
    
    (28,734
    )Non-operating income (expense):Interest expense
    
    
    (8,234
    )
    
    
    (17,309
    )
    
    
    (28,796
    )
    
    
    (42,500
    )Interest income
    
    
    262
    
    
    
    162
    
    
    
    873
    
    
    
    352Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (986
    )Terminated transaction fee
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    Other income (expense), net
    
    
    6
    
    
    
    7
    
    
    
    
    
    
    
    (163
    )Total non-operating expense, net
    
    
    (7,966
    )
    
    
    (17,140
    )
    
    
    (12,923
    )
    
    
    (43,297
    )Income (loss) before income taxes and equity in net
income (loss) of affiliate
    
    
    13,065
    
    
    
    (79,714
    )
    
    
    42,141
    
    
    
    (72,031
    )Income tax (expense) benefit
    
    
    (7,349
    )
    
    
    9,973
    
    
    
    (11,780
    )
    
    
    4,573Equity in net income (loss) of affiliate
    
    
    284
    
    
    
    (789
    )
    
    
    1,687
    
    
    
    (2,347
    )Net income (loss)
    
    $
    6,000
    
    
    $
    (70,530
    )
    
    $
    32,048
    
    
    $
    (69,805
    )Basic and diluted income (loss) per common share:Basic income (loss) per common share
    
    $
    0.14
    
    
    
    ($1.63
    )
    
    $
    0.75
    
    
    
    ($1.62
    )Diluted income (loss) per common share
    
    $
    0.14
    
    
    
    ($1.63
    )
    
    $
    0.75
    
    
    
    ($1.62
    )Weighted average basic common shares outstanding
    
    
    41,909,633
    
    
    
    43,259,634
    
    
    
    42,674,857
    
    
    
    43,180,618Weighted average diluted common shares outstanding
    
    
    41,909,633
    
    
    
    43,259,634
    
    
    
    42,690,122
    
    
    
    43,180,618
 See accompanying notes to condensed consolidated financial statements.
 4




---



##### Table of Contents



CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 Nine Months EndedSeptember 30,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    32,048
    
    
    $
    (69,805
    )Adjustments to reconcile net income to net cash provided by
operating activities:Loss on early extinguishment of debt
    
    
    
    
    
    
    986Depreciation
    
    
    9,378
    
    
    
    11,148Amortization of intangible assets
    
    
    8
    
    
    
    36Amortization of debt issuance costs
    
    
    314
    
    
    
    323Amortization of derivative gain
    
    
    (2,979
    )
    
    
    (828
    )Provision for doubtful accounts
    
    
    2,525
    
    
    
    2,272Gain on sale of assets or stations
    
    
    (12
    )
    
    
    (28
    )Adjustment of the fair value of derivative instruments
    
    
    2,034
    
    
    
    6,093Deferred income taxes
    
    
    11,466
    
    
    
    (2,983
    )Non-cash stock compensation
    
    
    3,882
    
    
    
    7,028Impairment of goodwill and intangible assets
    
    
    
    
    
    
    81,335Equity (income) loss on investment in unconsolidated affiliate
    
    
    (1,687
    )
    
    
    2,347Changes in assets and liabilities:Accounts receivable
    
    
    (511
    )
    
    
    (3,677
    )Prepaid expenses and other current assets
    
    
    989
    
    
    
    760Accounts payable and accrued expenses
    
    
    (1,602
    )
    
    
    (3,438
    )Other assets
    
    
    (460
    )
    
    
    131Other liabilities
    
    
    (1,147
    )
    
    
    (2,605
    )Net cash provided by operating activities
    
    
    54,246
    
    
    
    29,095Cash flows from investing activities:Purchase of intangible assets
    
    
    (1,027
    )
    
    
    (975
    )Capital expenditures
    
    
    (5,203
    )
    
    
    (3,714
    )Net cash used in investing activities
    
    
    (6,230
    )
    
    
    (4,689
    )Cash flows from financing activities:Proceeds from bank credit facility
    
    
    
    
    
    
    750,000Repayments of borrowings from bank credit facility
    
    
    (11,640
    )
    
    
    (763,100
    )Payments for debt issuance costs
    
    
    
    
    
    
    (997
    )Tax withholding paid on behalf of employees
    
    
    (2,401
    )
    
    
    (311
    )Proceeds from issuance of common stock
    
    
    52
    
    
    
    303Payments for repurchase of common stock
    
    
    (5,022
    )
    
    
    (244
    )Net cash used in financing activities
    
    
    (19,011
    )
    
    
    (14,349
    )Increase in cash and cash equivalents
    
    
    29,005
    
    
    
    10,057Cash and cash equivalents at beginning of period
    
    
    32,286
    
    
    
    2,392Cash and cash equivalents at end of period
    
    $
    61,291
    
    
    $
    12,449Supplemental disclosures:Trade revenue
    
    $
    10,512
    
    
    $
    12,513Trade expense
    
    $
    10,394
    
    
    $
    12,498Interest paid
    
    $
    27,890
    
    
    $
    41,020
 See accompanying notes to condensed consolidated financial statements.
 5




---



##### Table of Contents



Cumulus Media Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 1. Interim Financial Data and Basis of Presentation
 Interim Financial Data
   Recent Accounting Pronouncements
 SFAS No. 141(R) Business Combinations
 SFAS 157
 FSP No. 157-3 Determining the Fair Value of a
Financial Asset When The
 6




---



##### Table of Contents



Market for That Asset Is Not Active,
 SFAS 159. The Fair Value Option for Financial
Assets and Financial Liabilities  Including an Amendment of
FASB Statement No. 115
 SFAS 161. Disclosures about Derivative
Instruments and Hedging Activities Accounting for Derivative Instruments and Hedging Activities
 FSP No. 142-3. Determination of the
Useful Lives of Intangible Assets
 2. Stock Based Compensation
   3. Investment in affiliate
   7




---



##### Table of Contents



Consolidation of Variable Interest
Entities
 4. Derivative Financial Instruments
     8




---



##### Table of Contents



5. Long Term Debt
  September 30,
    
    December 31,2008
    
    2007Term loan
    
    $
    724,660
    
    
    $
    736,300Less: Current portion of long-term debt
    
    
    7,400
    
    
    
    13,490$
    717,260
    
    
    $
    722,810
       9




---



##### Table of Contents

\

6. Fair Value Measurements
 Disclosures about Fair Value of Financial
Instruments
     Quoted
    
    SignificantPrices in
    
    Other
    
    SignificantActive
    
    Observable
    
    UnobservableTotal Fair
    
    Markets
    
    Inputs
    
    InputsValue
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Financial assets:Cash
equivalents:Money market funds
    
    $
    51,668
    
    
    $
    21,638
    
    
    $
    30,031
    
    
    $
    Treasuries
    
    
    5,380
    
    
    
    5,380Total assets
    
    $
    57,048
    
    
    $
    27,018
    
    
    $
    30,031
    
    
    $
    Financial Liabilities:Other
current liabilitiesInterest rate swap
    
    $
    1,013
    
    
    $
    
    
    
    $
    1,013
    
    
    $
    Interest rate swap  option
    
    
    5,888
    
    
    
    
    
    
    
    5,888
    
    
    
    Total liabilities
    
    $
    6,901
    
    
    $
    
    
    
    $
    6,901
    
    
    $
    
 10




---



##### Table of Contents



Cash Equivalents.
 Derivative
Instruments.
  7. Share Repurchase
   8. Earnings per Share
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Numerator:Net income (loss)
    
    $
    6,000
    
    
    $
    (70,530
    )
    
    $
    32,048
    
    
    $
    (69,805
    )Denominator:Denominator for basic income per common share:Weighted average common shares outstanding
    
    
    41,910
    
    
    
    43,260
    
    
    
    42,675
    
    
    
    43,181Effect of dilutive securities:Options
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    Restricted shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares applicable to diluted income per common share
    
    
    41,910
    
    
    
    43,260
    
    
    
    42,690
    
    
    
    43,181Basic income (loss) per common share
    
    $
    0.14
    
    
    $
    (1.63
    )
    
    $
    0.75
    
    
    $
    (1.62
    )Diluted income (loss) per common share
    
    $
    0.14
    
    
    $
    (1.63
    )
    
    $
    0.75
    
    
    $
    (1.62
    )
  11




---



##### Table of Contents



September 30,2008Restricted shares of Class A Common Stock
    
    
    951,438Options to purchase Class A Common Stock
    
    
    6,275,931Options to purchase Class C Common Stock
    
    
    500,000
  9. Comprehensive Income
 Reporting Comprehensive Income,
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Net income (loss)
    
    $
    6,000
    
    
    $
    (70,530
    )
    
    $
    32,048
    
    
    $
    (69,805
    )Yield adjustment  interest rate swap arrangement, net of tax
    
    
    (993
    )
    
    
    (828
    )
    
    
    (2,979
    )
    
    
    (828
    )Comprehensive income (loss)
    
    $
    5,007
    
    
    $
    (71,358
    )
    
    $
    29,069
    
    
    $
    (70,633
    )
 10. Commitments and Contingencies
      12




---



##### Table of Contents



11. Termination of Merger Agreement
  13




---



##### Table of Contents



14




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
  Overview
  Advertising Revenue and Station Operating Income
      15




---



##### Table of Contents



Results of Operations
 Analysis of Condensed Consolidated Statements of Operations.
 For the Three Months
    
    
    
    
    
    PercentEnded September 30,
    
    Dollar Change
    
    Change2008
    
    2007
    
    2008 vs. 2007
    
    2008 vs. 2007STATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    79,950
    
    
    $
    84,183
    
    
    $
    (4,233
    )
    
    
    -5.0
    %Station operating expenses (excluding depreciation,
amortization and LMA fees)
    
    
    50,795
    
    
    
    52,241
    
    
    
    (1,446
    )
    
    
    -2.8
    %Depreciation and amortization
    
    
    2,965
    
    
    
    3,624
    
    
    
    (659
    )
    
    
    -18.2
    %LMA fees
    
    
    71
    
    
    
    163
    
    
    
    (92
    )
    
    
    -56.4
    %Corporate general and administrative (including
non-cash
stock compensation expense)
    
    
    5,006
    
    
    
    6,981
    
    
    
    (1,975
    )
    
    
    -28.3
    %Impairment of goodwill and intangible assets
    
    
    
    
    
    
    81,335
    
    
    
    (81,335
    )
    
    
    -100.0
    %Costs associated with terminated transaction
    
    
    82
    
    
    
    2,413
    
    
    
    (2,331
    )
    
    
    -96.6
    %Operating
income (loss)
    
    
    21,031
    
    
    
    (62,574
    )
    
    
    83,605
    
    
    
    -133.6
    %Interest expense, net
    
    
    (7,972
    )
    
    
    (17,147
    )
    
    
    9,175
    
    
    
    -53.5
    %Other income, net
    
    
    6
    
    
    
    7
    
    
    
    (1
    )
    
    
    -14.3
    %Income tax (expense) benefit
    
    
    (7,349
    )
    
    
    9,973
    
    
    
    (17,322
    )
    
    
    -173.7
    %Equity in net income (loss) of affiliate
    
    
    284
    
    
    
    (789
    )
    
    
    1,073
    
    
    
    -136.0
    %Net income (loss)
    
    $
    6,000
    
    
    $
    (70,530
    )
    
    $
    76,530
    
    
    
    -108.5
    %OTHER DATA:Station Operating Income (1)
    
    $
    29,155
    
    
    $
    31,942
    
    
    $
    (2,787
    )
    
    
    -8.7
    %Station Operating Income Margin (2)
    
    
    36.5
    %
    
    
    37.9
    %
    
    
    *
    *
 16




---



##### Table of Contents



For the Nine Months
    
    
    
    
    
    PercentEnded September 30,
    
    Dollar Change
    
    Change2008
    
    2007
    
    2008 vs. 2007
    
    2008 vs. 2007STATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    236,478
    
    
    $
    243,922
    
    
    $
    (7,444
    )
    
    
    -3.1
    %Station operating expenses excluding depreciation,
amortization and LMA fees
    
    
    154,920
    
    
    
    157,469
    
    
    
    (2,549
    )
    
    
    -1.6
    %Depreciation and amortization
    
    
    9,386
    
    
    
    11,184
    
    
    
    (1,798
    )
    
    
    -16.1
    %LMA fees
    
    
    571
    
    
    
    494
    
    
    
    77
    
    
    
    15.6
    %Corporate general and administrative (including non-cash
stock compensation expense)
    
    
    14,562
    
    
    
    19,761
    
    
    
    (5,199
    )
    
    
    -26.3
    %Impairment of goodwill and intangible assets
    
    
    
    
    
    
    81,335
    
    
    
    (81,335
    )
    
    
    -100.0
    %Costs associated with terminated transaction
    
    
    1,975
    
    
    
    2,413
    
    
    
    (438
    )
    
    
    -18.2
    %Operating income (loss)
    
    
    55,064
    
    
    
    (28,734
    )
    
    
    83,798
    
    
    
    -291.6
    %Interest expense, net
    
    
    (27,923
    )
    
    
    (42,148
    )
    
    
    14,225
    
    
    
    -33.8
    %Loss on early extinguishment of debt
    
    
    
    
    
    
    (986
    )
    
    
    986
    
    
    
    -100.0
    %Terminated transaction fee
    
    
    15,000
    
    
    
    
    
    
    
    15,000
    
    
    
    100.0
    %Other income (expense), net
    
    
    
    
    
    
    (163
    )
    
    
    163
    
    
    
    -100.0
    %Income tax (expense) benefit
    
    
    (11,780
    )
    
    
    4,573
    
    
    
    (16,353
    )
    
    
    -357.6
    %Equity in net income (loss) of affiliate
    
    
    1,687
    
    
    
    (2,347
    )
    
    
    4,034
    
    
    
    -171.9
    %Net income (loss)
    
    $
    32,048
    
    
    $
    (69,805
    )
    
    $
    101,853
    
    
    
    -145.9
    %OTHER DATA:Station operating income (1)
    
    $
    81,558
    
    
    $
    86,453
    
    
    $
    (4,895
    )
    
    
    -5.7
    %Station operating income margin (2)
    
    
    34.5
    %
    
    
    35.4
    %
    
    
    *
    *
    
    
    *
    *Cash flows related to:Operating activities
    
    
    54,246
    
    
    
    29,095
    
    
    
    25,151
    
    
    
    86.4
    %Investing activities
    
    
    (6,230
    )
    
    
    (4,689
    )
    
    
    (1,541
    )
    
    
    32.9
    %Financing activities
    
    
    (19,011
    )
    
    
    (14,349
    )
    
    
    (4,662
    )
    
    
    32.5
    %Capital expenditures
    
    $
    (5,203
    )
    
    $
    (3,714
    )
    
    
    (1,489
    )
    
    
    40.1
    %
 
 **
    
    Not a meaningful calculation to present.(1)
    
    Station operating income consists of operating income before depreciation and amortization,
LMA fees, corporate general and administrative expenses, non-cash stock compensation,
impairment of goodwill and intangible assets and costs associated with the terminated
transaction. Station operating income is not a measure of performance calculated in accordance
with GAAP. Station operating income should not be considered in isolation or as a substitute
for net income, operating income (loss), cash flows from operating activities or any other
measure for determining our operating performance or liquidity that is calculated in
accordance with GAAP. See managements explanation of this measure and the reasons for its use
and presentation, along with a quantitative reconciliation of station operating income to its
most directly comparable financial measure calculated and presented in accordance with GAAP,
below under Station Operating Income.(2)
    
    Station operating income margin is defined as station operating income as a percentage of net
revenues. Three Months Ended September 30, 2008 versus the Three Months Ended September 30, 2007.
 Net Revenues.
 Station Operating Expenses, Excluding Depreciation, Amortization and LMA Fees.
 17




---



##### Table of Contents



Depreciation and Amortization.
 LMA Fees.
 Corporate, General and Administrative Expenses Including Non-cash Stock Compensation.
 Impairment.
 Costs
Associated with Terminated Transaction.
 Non-operating (Income) Expense.
 For the Three MonthsEnded September 30,
    
    Dollar2008
    
    2007
    
    ChangeBank Borrowings  term loan and revolving credit facilities
    
    $
    7,898
    
    
    $
    13,244
    
    
    $
    (5,346
    )Bank Borrowings yield adjustment  interest rate swap arrangement
    
    
    486
    
    
    
    (2,380
    )
    
    
    2,866Change in fair value of interest rate swap agreement
    
    
    (2,500
    )
    
    
    4,874
    
    
    
    (7,374
    )Change in fair value of interest rate option agreement
    
    
    2,146
    
    
    
    1,350
    
    
    
    796Other interest expense
    
    
    204
    
    
    
    221
    
    
    
    (17
    )Interest income
    
    
    (263
    )
    
    
    (162
    )
    
    
    (101
    )Interest (income) expense, net
    
    $
    7,971
    
    
    $
    17,147
    
    
    $
    (9,176
    )
 Income
Taxes.
 Station Operating Income .
  18




---



##### Table of Contents



Reconciliation of Non-GAAP Financial Measure.
 For the Three Months
    
    
    
    
    
    PercentEnded September 30,
    
    Dollar Change
    
    Change2008
    
    2007
    
    2008 vs. 2007
    
    2008 vs. 2007Operating income (loss)
    
    $
    21,031
    
    
    $
    (62,574
    )
    
    $
    83,605
    
    
    
    -133.6
    %Depreciation and amortization
    
    
    2,965
    
    
    
    3,624
    
    
    
    (659
    )
    
    
    -18.2
    %LMA fees
    
    
    71
    
    
    
    163
    
    
    
    (92
    )
    
    
    -56.4
    %Corporate
general and administrative (including non-cash stock compensation)
    
    
    5,006
    
    
    
    6,981
    
    
    
    (1,975
    )
    
    
    -28.3
    %Impairment of goodwill and intangible assets
    
    
    
    
    
    
    81,335
    
    
    
    (81,335
    )
    
    
    -100.0
    %Cost associated with terminated transaction
    
    
    82
    
    
    
    2,413
    
    
    
    (2,331
    )
    
    
    -96.6
    %Station operating income
    
    $
    29,155
    
    
    $
    31,942
    
    
    $
    (2,787
    )
    
    
    -8.7
    %
 19




---



##### Table of Contents



Nine Months Ended September 30, 2008 versus the Nine Months Ended September 30, 2007.
 Net Revenues.
 Station Operating Expenses, Excluding Depreciation, Amortization and LMA Fees.
 Depreciation
and Amortization.
 LMA Fees.
 Corporate, General and Administrative Expenses Including Non-cash Stock Compensation.
 Impairment.
 Costs Associated with Terminated Transaction.
 Non-operating (Income) Expense.
 For the Nine MonthsEnded September 30,
    
    Dollar2008
    
    2007
    
    ChangeBank Borrowings  term loan and revolving credit facilities
    
    $
    26,224
    
    
    $
    40,822
    
    
    $
    (14,598
    )Bank Borrowings yield adjustment  interest rate swap arrangement
    
    
    (74
    )
    
    
    (5,180
    )
    
    
    5,106Change in fair value of interest rate swap agreement
    
    
    581
    
    
    
    5,542
    
    
    
    (4,961
    )Change in fair value of interest rate option agreement
    
    
    1,453
    
    
    
    551
    
    
    
    902Other interest expense
    
    
    610
    
    
    
    765
    
    
    
    (155
    )Interest income
    
    
    (873
    )
    
    
    (352
    )
    
    
    (521
    )Interest (income) expense, net
    
    $
    27,921
    
    
    $
    42,148
    
    
    $
    (14,227
    )
 20




---



##### Table of Contents



Terminated Transaction Fee.
 Income
Taxes.
 Station Operating Income.
 Reconciliation of Non-GAAP Financial Measure.
 For the Nine Months
    
    
    
    
    
    PercentEnded September 30,
    
    Dollar Change
    
    Change2008
    
    2007
    
    2008 vs. 2007
    
    2008 vs. 2007Operating income (loss)
    
    $
    55,064
    
    
    $
    (28,734
    )
    
    $
    83,798
    
    
    
    -291.6
    %Depreciation and amortization
    
    
    9,386
    
    
    
    11,184
    
    
    
    (1,798
    )
    
    
    -16.1
    %LMA fees
    
    
    571
    
    
    
    494
    
    
    
    77
    
    
    
    15.6
    %Corporate general and administrative
(including
non-cash stock compensation)
    
    
    14,562
    
    
    
    19,761
    
    
    
    (5,199
    )
    
    
    -26.3
    %Impairment of goodwill and intangible assets
    
    
    
    
    
    
    81,335
    
    
    
    (81,335
    )
    
    
    -100.0
    %Cost associated with terminated transaction
    
    
    1,975
    
    
    
    2,413
    
    
    
    (438
    )
    
    
    -18.2
    %Station operating income
    
    $
    81,558
    
    
    $
    86,453
    
    
    $
    (4,895
    )
    
    
    -5.7
    %
 Intangible
Assets (including FCC Licenses and Goodwill).
  21




---



##### Table of Contents



Liquidity and Capital Resources
       2007 Refinancing
    22




---



##### Table of Contents



23




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
 Item 4. Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  24




---



##### Table of Contents



Item 1A. Risk Factors
  Disruptions
in capital markets could restrict our ability to access further
financing.
   We
are exposed to credit risk on our accounts receivable. This risk is heightened during periods
when economic conditions worsen.
  We are exposed to risk of counterparty performance to derivative transactions.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  25




---



##### Table of Contents



Total Number
    
    
    Maximum Dollarof Shares
    
    
    Value of SharesPurchased as
    
    
    that mayTotal Number
    
    
    Average
    
    
    Part of Publicly
    
    
    Yet be Sharesof Shares
    
    
    Price Per
    
    
    Announced
    
    
    Purchased UnderPeriod
    
    Purchased
    
    
    Share
    
    
    Program
    
    
    the ProgramMay 1, 2008  May 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    75,000,000June 1, 2008  June 30, 2008
    
    
    281,928
    
    
    $
    4.325
    
    
    
    281,928
    
    
    $
    73,780,532July 1, 2008  July 31, 2008
    
    
    795,700
    
    
    $
    2.809
    
    
    
    795,700
    
    
    $
    71,545,471August 1, 2008  August 31, 2008
    
    
    515,182
    
    
    $
    3.043
    
    
    
    515,182
    
    
    $
    69,978,015September 1, 2008  September 30, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    69,978,015Total
    
    
    1,592,810
    
    
    
    
    
    
    
    1,592,810
 
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  26




---



##### Table of Contents



Item 6. Exhibits
 31.1
    
     Certification of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
     Certification of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
     Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 27




---



##### Table of Contents



SIGNATURES
  CUMULUS MEDIA INC.Date: November 7, 2008
    By:
    /s/ Martin R. GausvikMartin R. GausvikExecutive Vice President,
Treasurer and Chief Financial Officer 28




---



##### Table of Contents



EXHIBIT INDEX
 31.1
    
     Certification of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
     Certification of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
     Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 29