##### 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 MARCH 31, 2009.
 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
 o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



CUMULUS MEDIA INC.
 INDEX
 PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2009 and March 31, 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and March 31, 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26PART II. OTHER INFORMATION
    
    
    26Item 1. Legal Proceedings
    
    
    26Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3. Defaults Upon Senior Securities
    
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    
    28Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    29Signatures
    
    
    30Exhibit Index
    
    
    31EX-31.1EX-31.2EX-32.1
  2




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##### 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)
 March 31,
    
    
    December 31,2009
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    44,877
    
    
    $
    53,003Restricted cash
    
    
    189
    
    
    
    Accounts receivable, less allowance for doubtful accounts of $1,423 and $1,771, in
2009 and 2008, respectively
    
    
    33,602
    
    
    
    44,199Prepaid expenses and other current assets
    
    
    3,744
    
    
    
    3,287Total current assets
    
    
    82,412
    
    
    
    100,489Property and equipment, net
    
    
    53,028
    
    
    
    55,124Intangible assets, net
    
    
    325,106
    
    
    
    325,134Goodwill
    
    
    58,891
    
    
    
    58,891Other assets
    
    
    4,117
    
    
    
    3,881Total assets
    
    $
    523,554
    
    
    $
    543,519Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued expenses
    
    $
    18,156
    
    
    $
    20,644Current portion of long-term debt
    
    
    7,400
    
    
    
    7,400Total current liabilities
    
    
    25,556
    
    
    
    28,044Long-term debt
    
    
    674,844
    
    
    
    688,600Other liabilities
    
    
    31,336
    
    
    
    30,543Deferred income taxes
    
    
    43,627
    
    
    
    44,479Total liabilities
    
    
    775,363
    
    
    
    791,666Stockholders 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 2009 and 2008 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 2009 and 2008, respectively
    
    
    
    
    
    
    Class A common stock, par value $.01 per share; 200,000,000 shares authorized;
59,572,592 and 59,572,592 shares issued, 35,246,650 and 34,945,290 shares
outstanding, in 2009 and 2008, respectively
    
    
    596
    
    
    
    596Class B common stock, par value $.01 per share; 20,000,000 shares authorized;
5,809,191 shares issued and outstanding in both 2009 and 2008
    
    
    58
    
    
    
    58Class C common stock, par value $.01 per share; 30,000,000 shares authorized;
644,871 shares issued and outstanding in both 2009 and 2008
    
    
    6
    
    
    
    6Class A Treasury stock, at cost, 24,325,941 and 24,627,302 shares in 2009 and
2008,
respectively
    
    
    (260,644
    )
    
    
    (265,278
    )Accumulated other comprehensive income
    
    
    
    
    
    
    828Additional paid-in-capital
    
    
    963,504
    
    
    
    967,676Accumulated deficit
    
    
    (955,329
    )
    
    
    (952,033
    )Total stockholders deficit
    
    
    (251,809
    )
    
    
    (248,147
    )Total liabilities and stockholders deficit
    
    $
    523,554
    
    
    $
    543,519
 See accompanying notes to condensed consolidated financial statements.
 3




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CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except for share and per share data)
 (Unaudited)
 Three Months EndedMarch 31,2009
    
    
    2008Broadcast revenues
    
    $
    54,353
    
    
    $
    71,900Management fee from affiliate
    
    
    1,000
    
    
    
    1,000Net revenues
    
    
    55,353
    
    
    
    72,900Operating expenses:Station operating expenses (excluding depreciation, amortization and
LMA fees)
    
    
    42,298
    
    
    
    51,149Depreciation and amortization
    
    
    2,898
    
    
    
    3,111LMA fees
    
    
    469
    
    
    
    180Corporate general and administrative (including non-cash stock
compensation
of $592, and $2,021, respectively)
    
    
    6,108
    
    
    
    5,461Cost associated with terminated transaction
    
    
    
    
    
    
    140Total operating expenses
    
    
    51,773
    
    
    
    60,041Operating income
    
    
    3,580
    
    
    
    12,859Non-operating income (expense):Interest expense
    
    
    (7,783
    )
    
    
    (20,860
    )Interest income
    
    
    46
    
    
    
    328Other income (expense), net
    
    
    3
    
    
    
    18Total non-operating expense, net
    
    
    (7,734
    )
    
    
    (20,514
    )Loss before income taxes and equity in net losses of affiliate
    
    
    (4,154
    )
    
    
    (7,655
    )Income tax benefit
    
    
    858
    
    
    
    3,663Equity in net losses of affiliate
    
    
    
    
    
    
    (248
    )Net loss
    
    $
    (3,296
    )
    
    $
    (4,240
    )Basic and diluted loss per common share:Basic and diluted loss per common share
    
    $
    (0.08
    )
    
    $
    (0.10
    )Weighted average basic and diluted common shares outstanding
    
    
    40,420,814
    
    
    
    43,046,722
 See accompanying notes to condensed consolidated financial statements.
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CUMULUS MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 Three MonthsEnded March 31,2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (3,296
    )
    
    $
    (4,240
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Depreciation and amortization
    
    
    2,898
    
    
    
    3,111Amortization of debt issuance costs
    
    
    109
    
    
    
    104Amortization of derivative gain
    
    
    (828
    )
    
    
    (993
    )Provision for doubtful accounts
    
    
    657
    
    
    
    738Gain on sale of assets or stations
    
    
    (3
    )
    
    
    (6
    )Adjustment of the fair value of derivative instruments
    
    
    1,001
    
    
    
    11,285Deferred income taxes
    
    
    (852
    )
    
    
    (3,557
    )Non-cash stock compensation
    
    
    592
    
    
    
    2,021Equity loss on investment in unconsolidated affiliate
    
    
    
    
    
    
    248Changes in assets and liabilities:Restricted cash
    
    
    (189
    )
    
    
    Accounts receivable
    
    
    9,889
    
    
    
    4,884Prepaid expenses and other current assets
    
    
    (406
    )
    
    
    83Accounts payable and accrued expenses
    
    
    (2,585
    )
    
    
    (2,096
    )Other assets
    
    
    (307
    )
    
    
    (698
    )Other liabilities
    
    
    (48
    )
    
    
    (159
    )Net cash provided by operating activities
    
    
    6,632
    
    
    
    10,725Cash flows from investing activities:Proceeds from the sale of assets
    
    
    6
    
    
    
    Purchase of intangible assets
    
    
    (38
    )
    
    
    (34
    )Capital expenditures
    
    
    (777
    )
    
    
    (2,811
    )Net cash used in investing activities
    
    
    (809
    )
    
    
    (2,845
    )Cash flows from financing activities:Repayments of borrowings from bank credit facility
    
    
    (13,756
    )
    
    
    (7,940
    )Tax withholding paid on behalf of employees
    
    
    
    
    
    
    (2,242
    )Proceeds from issuance of common stock
    
    
    
    
    
    
    53Payments for repurchase of common stock
    
    
    (193
    )
    
    
    Net cash used in financing activities
    
    
    (13,949
    )
    
    
    (10,129
    )Decrease in cash and cash equivalents
    
    
    (8,126
    )
    
    
    (2,249
    )Cash and cash equivalents at beginning of period
    
    
    53,003
    
    
    
    32,286Cash and cash equivalents at end of period
    
    $
    44,877
    
    
    $
    30,037Supplemental disclosures:Trade revenue
    
    $
    2,306
    
    
    $
    3,232Trade expense
    
    $
    2,302
    
    
    $
    3,152Interest paid
    
    $
    6,958
    
    
    $
    11,444
 See accompanying notes to condensed consolidated financial statements.
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Cumulus Media Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 1. Interim Financial Data and Basis of Presentation
 Interim Financial Data
   Liquidity Considerations
    6




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Recent Accounting Pronouncements
 SFAS No. 141(R) Business Combinations
 SFAS 160. Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51,
 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
 FSP FAS 140-4 and FIN 46R-8.
 FSP 157-2
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FSP 157-4, FSP115-2 and FSP124-2, and FSP FAS 107-1and APB 28-1.
 FSP EITF 03-6-1.
 2. Stock Based Compensation
   3. Derivative Financial Instruments
  May 2005 Swap
   8




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May 2005 Option
     Information on the Location and Amounts of Derivative Fair Values in
the Condensed Consolidated Balance Sheet (in Thousands)
Liability Derivative
 Balance Sheet
    
    March 31, 2009Location
    
    Fair ValueDerivative not designated as
hedging instruments under
Statement 133:Other long-term liabilities
    
    $
    19,509Total
    
    $
    19,509
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Information
on the Location and Effect of Derivatives in the
Condensed Consolidated Statement of Operations (in Thousands)
Liability Derivative
 Derivatives not
    
    Location of Loss
    
    Amount of Loss Recognized indesignated as
    
    Recognized in
    
    Income on Derivatives for thehedging instrument
    
    Income on
    
    Three Months Ended March 31under Statement 133
    
    Derivative
    
    2009Interest rate contracts
    
    Interest expense
    
    $
    1,000Total
    
    $
    1,000
 4. Long Term Debt
  March 31,
    
    December 31,2009
    
    2008Term loan
    
    $
    682,244
    
    
    $
    696,000Less: Current portion of long-term debt
    
    
    7,400
    
    
    
    7,400$
    674,844
    
    
    $
    688,600
 Senior Secured Credit Facilities
      10




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
    
    a maximum leverage ratio;
    
    a minimum fixed charges ratio; and
    
    a limit on annual capital expenditures.
  As of March 31, 2009
    
    As of December 31, 2008Covenant
    
    Actual
    Covenant
    
    ActualRequirement
    
    Ratio
    Requirement
    
    RatioTotal leverage ratio:
    
    
    <8.50:1
    
    
    
    8.14
    
    
    <8.50:1
    
    
    
    7.40Fixed charges ratio:
    
    
    >1.1:1
    
    
    
    1.83
    
    
    >1.1:1
    
    
    
    1.86
   5. Fair Value Measurements
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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
    
    $
    34,391
    
    
    $
    4,376
    
    
    $
    30,015
    
    
    $
    Total assets
    
    $
    34,391
    
    
    $
    4,376
    
    
    $
    30,015
    
    
    $
    Financial Liabilities:Other long-term,
liabilitiesInterest rate swap
    
    $
    (19,509
    )
    
    $
    
    
    
    $
    (19,509
    )
    
    $
    Total liabilities
    
    $
    (19,509
    )
    
    $
    
    
    
    $
    (19,509
    )
    
    $
    
 Cash Equivalents.
 Derivative Instruments.
  6. Share Repurchase
  12




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7. Earnings per Share
   Three Months Ended March 31,2009
    
    
    2008Basic Earning Per ShareNumerator:Undistributed net loss
    
    $
    (3,296
    )
    
    $
    (4,240
    )Participation rights of unvested restricted stock in undistributed earnings (a)
    
    
    
    
    
    
    Basic undistributed net loss  attributable to common shares
    
    $
    (3,296
    )
    
    $
    (4,240
    )Denominator:Denominator for basic loss per common share:Basic weighted average common shares outstanding
    
    
    40,421
    
    
    
    43,047Basic EPS  attributable to common shares
    
    $
    (0.08
    )
    
    $
    (0.10
    )Diluted Earnings Per Share:Numerator:Undistributed net loss
    
    $
    (3,296
    )
    
    $
    (4,240
    )Participation rights of unvested restricted stock in undistributed earnings (a)
    
    
    
    
    
    
    Undistributed net loss  attributable to common shares
    
    $
    (3,296
    )
    
    $
    (4,240
    )Denominator:Weighted average shares outstanding
    
    
    40,421
    
    
    
    43,047Effect of dilutive options (b)
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    40,421
    
    
    
    43,047Diluted EPS  attributable to common shares
    
    $
    (0.08
    )
    
    $
    (0.10
    )
 
 (a)
    

Unvested restricted stock has no contractual obligation to absorb losses of the Company. Therefore, for the three months ended March 31, 2009 and 2008, 1,532,910 shares and 850,313 shares of
restricted stock were outstanding but excluded from the EPS calculations because their
effect would have been antidilutive.(b)
    
    For the three months ended March 31, 2009 and 2008, options to purchase 2,274,895 and
8,596,776 shares of common stock, respectively, were outstanding but excluded from the EPS
calculations because their effect would have been antidilutive. Options outstanding have
decreased from March 31, 2008 due to the effect of the Companys option exchange program
which concluded on December 30, 2008.  March 31,2009Restricted shares of Class A Common Stock
    
    
    1,532,910Options to purchase Class A Common Stock
    
    
    1,486,546Options to purchase Class C Common Stock
    
    
    500,000
 8. Comprehensive Income
 Reporting Comprehensive Income,
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Three MonthsEnded March 31,2009
    
    2008Net income (loss)
    
    $
    (3,296
    )
    
    $
    (4,240
    )Yield adjustment  interest rate swap arrangement, net of tax
    
    
    
    
    
    
    (993
    )Comprehensive income (loss)
    
    $
    (3,296
    )
    
    $
    (5,233
    )
 9. Commitments and Contingencies
        14




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10. Acquisitions and Dispositions
  11. Restricted Cash
  12. Investment in affiliate
     15




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
  Overview
   Liquidity Considerations
     Advertising Revenue and Station Operating Income
 16




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Results of Operations
 Analysis of Condensed Consolidated Statements of Operations.
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For the Three MonthsEnded March 31,
    
    Dollar Change
    
    Percent Change2009
    
    2008
    
    2009 vs. 2008
    
    2009 vs. 2008STATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    55,353
    
    
    $
    72,900
    
    
    $
    (17,547
    )
    
    
    -24.1
    %Station operating expenses (excluding
depreciation, amortization and LMA fees)
    
    
    42,298
    
    
    
    51,149
    
    
    
    (8,851
    )
    
    
    -17.3
    %Depreciation and amortization
    
    
    2,898
    
    
    
    3,111
    
    
    
    (213
    )
    
    
    -6.8
    %LMA fees
    
    
    469
    
    
    
    180
    
    
    
    289
    
    
    
    160.6
    %Corporate general and administrative (including
non-cash stock compensation expense)
    
    
    6,108
    
    
    
    5,461
    
    
    
    647
    
    
    
    11.8
    %Costs associated with terminated transaction
    
    
    
    
    
    
    140
    
    
    
    (140
    )
    
    
    -100.0
    %Operating income
    
    
    3,580
    
    
    
    12,859
    
    
    
    (9,279
    )
    
    
    -72.2
    %Interest expense, net
    
    
    (7,737
    )
    
    
    (20,532
    )
    
    
    12,795
    
    
    
    -62.3
    %Other income, net
    
    
    3
    
    
    
    18
    
    
    
    (15
    )
    
    
    -83.3
    %Income tax benefit
    
    
    858
    
    
    
    3,663
    
    
    
    (2,805
    )
    
    
    -76.6
    %Equity losses in affiliate
    
    
    
    
    
    
    (248
    )
    
    
    248
    
    
    
    -100.0
    %Net loss
    
    $
    (3,296
    )
    
    $
    (4,240
    )
    
    $
    944
    
    
    
    -22.3
    %OTHER DATA:Station Operating Income (1)
    
    $
    13,055
    
    
    $
    21,751
    
    
    $
    (8,696
    )
    
    
    -40.0
    %Station Operating Income Margin (2)
    
    
    23.6
    %
    
    
    29.8
    %
    
    
    **
    
    
    
    **Cash flows related to:Operating activities
    
    
    6,632
    
    
    
    10,725
    
    
    
    (4,093
    )
    
    
    -38.2
    %Investing activities
    
    
    (809
    )
    
    
    (2,845
    )
    
    
    2,036
    
    
    
    -71.6
    %Financing activities
    
    
    (13,949
    )
    
    
    (10,129
    )
    
    
    (3,820
    )
    
    
    37.7
    %
 18




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**
    
    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 March 31, 2009 versus the Three Months Ended March 31, 2008.
 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.
 Non-operating (Income) Expense.
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For the Three MonthsEnded March 31,
    
    Dollar
    
    Percent2009
    
    2008
    
    Change
    
    ChangeBank Borrowings  term loan and revolving credit facilities
    
    $
    4,115
    
    
    $
    10,255
    
    
    $
    (6,140
    )
    
    
    -59.9
    %Bank Borrowings yield adjustment  interest rate swap arrangement
    
    
    2,363
    
    
    
    (884
    )
    
    
    3,247
    
    
    
    -367.3
    %Change in fair value of interest rate swap agreement
    
    
    (3,043
    )
    
    
    6,389
    
    
    
    (9,432
    )
    
    
    -147.6
    %Change in fair value of interest rate option agreement
    
    
    4,045
    
    
    
    4,896
    
    
    
    (851
    )
    
    
    -17.4
    %Other interest expense
    
    
    303
    
    
    
    204
    
    
    
    99
    
    
    
    48.5
    %Interest income
    
    
    (46
    )
    
    
    (328
    )
    
    
    282
    
    
    
    -86.0
    %Interest expense, net
    
    $
    7,737
    
    
    $
    20,532
    
    
    $
    (12,795
    )
    
    
    -62.3
    %
 Income Taxes.
 Station Operating Income .
    20




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Reconciliation of Non-GAAP Financial Measure.
 For the Three Months
    
    Dollar
    
    PercentEnded March 31,
    
    Change
    
    Change2009
    
    2008
    
    2009 vs. 2008
    
    2009 vs. 2008Operating income
    
    $
    3,580
    
    
    $
    12,859
    
    
    $
    (9,279
    )
    
    
    -72.2
    %Depreciation and amortization
    
    
    2,898
    
    
    
    3,111
    
    
    
    (213
    )
    
    
    -6.8
    %LMA fees
    
    
    469
    
    
    
    180
    
    
    
    289
    
    
    
    160.6
    %Corporate general and administrative (including
non-cash stock compensation)
    
    
    6,108
    
    
    
    5,461
    
    
    
    647
    
    
    
    11.8
    %Cost associated with terminated transaction
    
    
    
    
    
    
    140
    
    
    
    (140
    )
    
    
    -100.0
    %Station operating income
    
    $
    13,055
    
    
    $
    21,751
    
    
    $
    (8,696
    )
    
    
    -40.0
    %
 Intangible Assets (including FCC Licenses and Goodwill).
  Liquidity and Capital Resources
 tm
  21




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##### Table of Contents



Consideration of Recent Economic Developments
  
 22




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##### Table of Contents



Senior Secured Credit Facilities
         23




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##### Table of Contents




    
    a maximum leverage ratio, calculated by dividing Total Indebtedness by Adjusted
EBITDA (each as defined in the Credit Agreement);
    
    a minimum fixed charges ratio, calculated by dividing Consolidated EBITDA by
Consolidated Fixed Charges (each as defined in the Credit Agreement); and
    
    a limit on annual capital expenditures.
  As of March 31, 2009
    
    As of December 31, 2008Covenant
    
    Actual
    Covenant
    
    Actualrequirement
    
    ratio
    requirement
    
    ratioTotal leverage ratio:
    
    
    <8.50:1
    
    
    
    8.14
    
    
    <8.50:1
    
    
    
    7.40Fixed charges ratio:
    
    
    >1.1:1
    
    
    
    1.83
    
    
    >1.1:1
    
    
    
    1.86
  Critical Accounting Policies and Estimates
  Revenue
  Allowance
for Doubtful Accounts
  Intangible
Assets
 Goodwill and other Intangible Assets
 Goodwill
       Reporting Unit
    
    
    Implied Goodwill
    
    
    12-31-08 GoodwillFair Value
    
    
    Value
    
    
    Carrying Value
    
    
    ImpairmentReporting Unit A
    
    $
    7,189
    
    
    $
    3,827
    
    
    $
    4,303
    
    
    $
    476Reporting Unit B
    
    
    11,293
    
    
    
    3,726
    
    
    
    5,295
    
    
    
    1,569Reporting Unit C
    
    
    5,640
    
    
    
    3,447
    
    
    
    2,450
    
    
    
    0Reporting Unit D
    
    
    3,050
    
    
    
    1,672
    
    
    
    2,080
    
    
    
    408Reporting Unit E
    
    
    5,425
    
    
    
    2,860
    
    
    
    2,068
    
    
    
    0Reporting Unit F
    
    
    10,912
    
    
    
    1,150
    
    
    
    1,715
    
    
    
    565Reporting Unit G
    
    
    8,309
    
    
    
    712
    
    
    
    5,907
    
    
    
    5,195Reporting Unit H
    
    
    21,277
    
    
    
    11,742
    
    
    
    11,512
    
    
    
    0Reporting Unit I
    
    
    12,699
    
    
    
    1,478
    
    
    
    8,099
    
    
    
    6,621Reporting Unit J
    
    
    12,508
    
    
    
    4,284
    
    
    
    5,255
    
    
    
    971Reporting Unit K
    
    
    21,176
    
    
    
    0
    
    
    
    21,437
    
    
    
    21,437Reporting Unit L
    
    
    11,066
    
    
    
    0
    
    
    
    2,168
    
    
    
    2,168$
    39,410
  Description
    
    Goodwill BalanceMarket A
    
    $
    Market B
    
    
    Market C
    
    
    Market D
    
    
    Market E
    
    
    3,827Market F
    
    
    3,726Market G
    
    
    13,847Market H
    
    
    2,450Market I
    
    
    1,672Market J
    
    
    2,068Market K
    
    
    1,929Market L
    
    
    5,684Market M
    
    
    1,150Market N
    
    
    712Market O
    
    
    11,512Market P
    
    
    1,478Market Q
    
    
    4,284Market R
    
    
    Market S
    
    
    2,585Market T
    
    
    1,965$
    58,891
  
    
    conducted an overall reasonableness check of our fair value calculations by
comparing the aggregate, calculated fair value of our reporting units to our accounting
unit capitalization as of December 31, 2008;
    
    prepared a reporting unit fair value calculation using a multiple of Adjusted
EBITDA as a comparative data point to validate the fair values calculated using our
discounted cash-flow approach;
    
    reviewed the historical operating performance of each reporting unit with
impairment;
    
    reviewed the facts surrounding our acquisition of the impaired reporting unit,
including original, implied acquisition Station Operating Income multiple; and
    
    performed a sensitivity analysis on the overall fair value and impairment
evaluation.
 i.e.
  24




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##### Table of Contents




    
    Shares outstanding as of 12/31: 41.4 million
    
    Average closing price of our Class A Common Stock over 32 days: $2.00 per share
    
    Debt discounted by 26% (gross $696.0 million, net $515.0 million)
   Changes to the Assumptions and Methodologies
   Impact of Current Economic Environment on the Analysis
  FCC Licenses
  
    
    in each market (accounting unit), the broadcast licenses were purchased to be used
as one combined asset;
    
    the combined group of licenses in an accounting unit represents the highest and
best use of the assets; and
    
    each accounting units strategy provides evidence that the licenses are
complementary.
   i.e.
    i.e.
         
    
    the stations gross revenues through 2016;
    
    the projected operating expenses and profits over the same period of time (we
considered operating expenses, except for sales expenses, to be fixed, and assumed
sales expenses to be a fixed percentage of revenues);
    
    calculations of yearly net free cash flows to invested capital.
    
    depreciation on start-up construction costs and capital expenditures (we calculated
depreciation using accelerated double declining balance guidelines over five years for
the value of the tangible assets necessary for a radio station to go on-the-air); and
    
    amortization of the intangible assetthe FCC License (we calculated amortization on
a straight line basis over 15 years).
 Annual Statement Studies
  Stock-based Compensation
 Share-Based Payment,
 25




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
   
 Item 4. Controls and Procedures
    Status of Remediation of the Material Weakness
  Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  26




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##### Table of Contents



Item 1A. Risk Factors
  If we cannot continue to comply with the financial covenants in our debt instruments, or obtain
waivers or other relief from our lenders, we may default, which could result in loss of our sources
of liquidity and acceleration of our indebtedness.
  We identified a material weakness as of
December 31, 2008 that, unless remediated, could have a material adverse effect on our internal control over
financial reporting.
  27




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  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 Program$
    68,477,544January 1, 2009
    
    
    99,737
    
    
    $
    1.91
    
    
    
    99,737
    
    
    $
    68,284,628February 1, 200
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    68,284,628March 1, 2009 -
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    68,284,628Total
    
    
    99,737
    
    
    
    
    
    
    
    99,737
 
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  28




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##### 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.
 29




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##### Table of Contents



SIGNATURES
  CUMULUS MEDIA INC.Date: May 11, 2009
    By:
    /s/ Martin R. GausvikMartin R. GausvikExecutive Vice President,
Treasurer and Chief Financial Officer 30




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##### 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.
 31