##### 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, 2010.
 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
o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 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, 2010 and December 31, 2009
    
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and March 31, 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and March 31, 2009
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    27PART II. OTHER INFORMATION
    
    
    27Item 1. Legal Proceedings
    
    
    27Item 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 HoldersItem 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    28Signatures
    
    
    29Exhibit Index
    
    
    30EX-31.1EX-31.2EX-32.1
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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CUMULUS MEDIA INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except for share data)
 (Unaudited)
 March 31,
    
    December 31,2010
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    14,950
    
    
    $
    16,224Restricted cash
    
    
    629
    
    
    
    789Accounts receivable, less allowance for doubtful accounts
of $1,097 and $1,166, in 2010 and 2009, respectively
    
    
    31,538
    
    
    
    37,504Trade receivable
    
    
    4,970
    
    
    
    5,488Prepaid expenses and other current assets
    
    
    5,100
    
    
    
    4,709Total current assets
    
    
    57,187
    
    
    
    64,714Property and equipment, net
    
    
    44,655
    
    
    
    46,981Intangible assets, net
    
    
    161,723
    
    
    
    161,380Goodwill
    
    
    56,121
    
    
    
    56,121Other assets
    
    
    3,397
    
    
    
    4,868Total assets
    
    $
    323,083
    
    
    $
    334,064Liabilities and Stockholders DeficitCurrent liabilities:Accounts payable and accrued expenses
    
    $
    16,722
    
    
    $
    13,635Trade payable
    
    
    4,952
    
    
    
    5,534Derivative instrument
    
    
    13,726
    
    
    
    Current portion of long-term debt
    
    
    54,196
    
    
    
    49,026Total current liabilities
    
    
    89,596
    
    
    
    68,195Long-term debt
    
    
    566,725
    
    
    
    584,482Other liabilities
    
    
    17,804
    
    
    
    32,598Deferred income taxes
    
    
    21,287
    
    
    
    21,301Total liabilities
    
    
    695,412
    
    
    
    706,576Stockholders Deficit: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, shares designated at stated value
$1,000 per share; 0 shares
issued and outstanding in both 2010 and 2009 and 12,000 12%
Series B Cumulative
Preferred Stock, stated value $10,000 per share; 0 shares
issued and outstanding in
both 2010 and 2009
    
    
    
    
    
    
    Class A common stock, par value $0.01 per share; 200,000,000 shares authorized;
59,572,592 shares issued, 35,557,546 and 35,162,511 shares
outstanding in 2010 and
2009, 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
    
    
    
    6Treasury stock, at cost, 24,015,046 and 24,410,081 shares in 2009 and 2008,
respectively
    
    
    (256,639
    )
    
    
    (261,382
    )Additional paid-in-capital
    
    
    962,529
    
    
    
    966,945Accumulated deficit
    
    
    (1,078,879
    )
    
    
    (1,078,735
    )Total stockholders deficit
    
    
    (372,329
    )
    
    
    (372,512
    )Total liabilities and stockholders deficit
    
    $
    323,083
    
    
    $
    334,064
 See accompanying notes to unaudited condensed consolidated financial statements.
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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 Ended March 31,2010
    
    2009Broadcast revenues
    
    $
    55,358
    
    
    $
    54,353Management fee from affiliate
    
    
    1,000
    
    
    
    1,000Net revenues
    
    
    56,358
    
    
    
    55,353Operating expenses:Station operating expenses (excluding depreciation, amortization, and LMA fees)
    
    
    39,926
    
    
    
    42,298Depreciation and amortization
    
    
    2,517
    
    
    
    2,898LMA fees
    
    
    529
    
    
    
    469Corporate general and administrative (including non-cash stock compensation
of $(101) and $592, in 2010 and 2009, respectively)
    
    
    4,066
    
    
    
    6,108Realized loss on derivative instrument
    
    
    584
    
    
    
    Total operating expenses
    
    
    47,622
    
    
    
    51,773Operating income
    
    
    8,736
    
    
    
    3,580Non-operating income (expense):Interest expense
    
    
    (8,831
    )
    
    
    (7,783
    )Interest income
    
    
    2
    
    
    
    46Other (expense) income, net
    
    
    (53
    )
    
    
    3Total non-operating expense, net
    
    
    (8,882
    )
    
    
    (7,734
    )Loss before income taxes
    
    
    (146
    )
    
    
    (4,154
    )Income tax benefit
    
    
    2
    
    
    
    858Net loss
    
    $
    (144
    )
    
    $
    (3,296
    )Basic and diluted loss per common share:Basic loss
per common share (See Note 8, Earnings Per Share)
    
    $
    (0.01
    )
    
    $
    (0.08
    )Diluted loss
per common share (See Note 8, Earnings Per Share)
    
    $
    (0.01
    )
    
    $
    (0.08
    )Weighted
average basic common shares outstanding (See Note 8, Earnings Per Share)
    
    
    40,455,933
    
    
    
    40,420,814Weighted
average diluted common shares outstanding (See Note 8, Earnings Per Share)
    
    
    40,455,933
    
    
    
    40,420,814
 See accompanying notes to unaudited condensed consolidated financial statements.
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CUMULUS MEDIA INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
 (Unaudited)
 Three Months Ended March 31,2010
    
    2009Cash flows from operating activities:Net loss
    
    $
    (144
    )
    
    $
    (3,296
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    2,517
    
    
    
    2,898Amortization of debt issuance costs/discounts
    
    
    305
    
    
    
    109Amortization of derivative gain
    
    
    
    
    
    
    (828
    )Provision for doubtful accounts
    
    
    364
    
    
    
    657Loss (gain) on sale of assets or stations
    
    
    53
    
    
    
    (3
    )Fair value adjustment of derivative instruments
    
    
    (1,329
    )
    
    
    1,001Deferred income taxes
    
    
    (14
    )
    
    
    (852
    )Non-cash stock compensation
    
    
    (101
    )
    
    
    592Changes in assets and liabilities:Restricted cash
    
    
    160
    
    
    
    (189
    )Accounts receivable
    
    
    8,192
    
    
    
    13,805Trade receivable
    
    
    (2,072
    )
    
    
    (3,916
    )Prepaid expenses and other current assets
    
    
    (391
    )
    
    
    (406
    )Accounts payable and accrued expenses
    
    
    498
    
    
    
    (6,043
    )Trade payable
    
    
    2,008
    
    
    
    3,458Other assets
    
    
    1,246
    
    
    
    (307
    )Other liabilities
    
    
    803
    
    
    
    (48
    )Net cash provided by operating activities
    
    
    12,095
    
    
    
    6,632Cash flows from investing activities:Proceeds from sale of assets or radio stations
    
    
    196
    
    
    
    6Purchase of intangible assets
    
    
    (216
    )
    
    
    (38
    )Capital expenditures
    
    
    (431
    )
    
    
    (777
    )Net cash used in investing activities
    
    
    (451
    )
    
    
    (809
    )Cash flows from financing activities:Repayments of borrowings from bank credit facility
    
    
    (12,804
    )
    
    
    (13,756
    )Tax withholding paid on behalf of employees
    
    
    (114
    )
    
    
    Payments for repurchase of common stock
    
    
    
    
    
    
    (193
    )Net cash used in financing activities
    
    
    (12,918
    )
    
    
    (13,949
    )Decrease in cash and cash equivalents
    
    
    (1,274
    )
    
    
    (8,126
    )Cash and cash equivalents at beginning of period
    
    
    16,224
    
    
    
    53,003Cash and cash equivalents at end of period
    
    $
    14,950
    
    
    $
    44,877Supplemental disclosures of cash flow information:Interest paid
    
    $
    6,767
    
    
    $
    6,958Income taxes paid
    
    
    213
    
    
    
    Trade revenue
    
    
    3,813
    
    
    
    2,306Trade expense
    
    
    3,741
    
    
    
    2,302
 See accompanying notes to unaudited 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
 Consolidations (Topic 810)  Improvements to Financial Reporting by Enterprises Involved with
Variable Interest Entities
 ASU 2010-06.
 ASU 2010-09.
 2. Acquisitions and Dispositions
   7




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3. Derivative Financial Instruments
  May 2005 Swap
    May 2005 Option
     Green Bay Option
  8




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Information on the Location and Amounts of Derivatives Fair Values in the
Unaudited Consolidated Balance Sheets (dollars in thousands)
 Liability DerivativesBalance Sheet
    
    Fair ValueLocation
    
    March 31, 2010
    
    December 31, 2009Derivative not designated
as hedging instruments:Green Bay Option
    
    Other long-term liabilities
    
    $
    6,657
    
    
    $
    6,073Interest rate swap  option
    
    Other short-term liabilities
    
    
    13,726
    
    
    
    Interest rate swap  option
    
    Other long-term liabilities
    
    
    
    
    
    
    15,639Total
    
    $
    20,383
    
    
    $
    21,712
  Liability DerivativesAmount of Income (Expense)Recognized in Income on DerivativesDerivative
    
    Financial Statement
    
    for the Three Months EndedInstruments
    
    Location
    
    March 31, 2010
    
    March 31, 2009Green Bay Option
    
    Realized loss on derivative instrument
    
    $
    (584
    )
    
    $
    Interest rate swap  option
    
    Interest income/(expense)
    
    
    1,913
    
    
    
    (4,045
    )Interest rate swap
    
    Interest income/(expense)
    
    
    
    
    
    
    3,043Total
    
    $
    1,329
    
    
    $
    (1,002
    )
 4. Fair Value Measurements
  Level 1  Valuations based on quoted prices in active markets for identical assets or liabilities
that the entity has the ability to access;Level 2  Valuations based on quoted prices for similar assets or liabilities, quoted prices in
markets that are not active, or other inputs that are observable or can be corroborated by
observable data for substantially the full term of the assets or liabilities; andLevel 3  Valuations based on inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities.
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Fair Value Measurements at Reporting Date UsingQuoted
    
    SignificantPrices in
    
    Other
    
    SignificantActive
    
    Observable
    
    UnobservableTotal Fair
    
    Markets
    
    Inputs
    
    InputsValue
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Financial assets:Cash equivalents:Money market funds (1)
    
    $
    4,382
    
    
    $
    4,382
    
    
    $
    
    
    
    $
    Total assets
    
    $
    4,382
    
    
    $
    4,382
    
    
    $
    
    
    
    $
    Financial Liabilities:Other short-term liabilitiesInterest rate swap (2)
    
    $
    (13,726
    )
    
    $
    
    
    
    $
    (13,726
    )
    
    $
    Other long-term liabilitiesGreen Bay option (3)
    
    
    (6,657
    )
    
    
    
    
    
    
    
    
    
    
    (6,657
    )Total liabilities
    
    $
    (20,383
    )
    
    $
    
    
    
    $
    (13,726
    )
    
    $
    (6,657
    )
 
 (1)
    
    This balance is invested in an institutional money market fund. The Companys Level 1 cash
equivalents are valued using quoted prices in active markets for identical investments.(2)
    
    The Companys derivative financial instruments consist solely of an interest rate cash flow
hedge in which the Company pays a fixed rate and receives a variable interest rate. The fair
value of the Companys interest rate swap is determined based on the present value of future
cash flows using observable inputs, including interest rates and yield curves. Derivative
valuations incorporate adjustments that are necessary to reflect the Companys own credit
risk.(3)
    
    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.  Fixed
    
    
    
    Floating
    
    discount cash flow range of 0.995%  0.999%;
    
    
    
    discount cash flow range of 0.995%  0.999%;
    
    interest rate of 3.930%; and
    
    
    
    interest rate range of 0.23%  0.85%; and
    
    credit spread of 4.28%.
    
    
    
    credit spread of 4.28%.
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Description
    
    Green Bay OptionFair value balance at December 31, 2009
    
    $
    6,073Add: Mark to market fair value adjustment
    
    
    584Fair value balance at March 31, 2010
    
    $
    6,657
  
    
    total term of 3.5 years;
    
    volatility rate of 37.1%;
    
    dividend annual rate of 0.0%;
    
    discount rate of 1.6%; and
    
    market value of Green Bay of $10.1 million.
  Fair Value Measurements at Reporting Date UsingQuoted
    
    SignificantPrices in
    
    Other
    
    SignificantActive
    
    Observable
    
    UnobservableTotal Fair
    
    Markets
    
    Inputs
    
    InputsValue
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Non-financial assets:Goodwill
    
    $
    56,121
    
    
    $
    
    
    
    $
    
    
    
    $
    56,121Other intangible assets
    
    
    161,031
    
    
    
    
    
    
    
    
    
    
    
    161,031Total
    
    $
    217,152
    
    
    $
    
    
    
    $
    
    
    
    $
    217,152
    March 31, 2010
    
    December 31, 2009Carrying value of term loan
    
    $
    624,087
    
    
    $
    636,890Fair value of term loan
    
    $
    570,340
    
    
    $
    538,604
  
    
    discount cash flow rate of 6.25%;
    
    interest rate of 0. 25%; and
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
    
    credit spread of 4.28%.
 5. Investment in Affiliate
    Three Months Ended March 31,2010
    
    2009Income Statement Data:Revenues
    
    $
    37,917
    
    
    $
    35,837Operating expenses
    
    
    27,304
    
    
    
    26,308Net income
    
    
    1,413
    
    
    
    50,402Balance Sheet Data:Assets
    
    
    489,625
    
    
    
    717,183Liabilities
    
    
    924,538
    
    
    
    1,050,504Shareholders deficit
    
    
    (434,913
    )
    
    
    (333,321
    )
    12




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6. Long-Term Debt
  March 31,
    
    December 31,2010
    
    2009Term loan, net of debt discount
    
    $
    620,921
    
    
    $
    633,508Less: Current portion of long-term debt
    
    
    (54,196
    )
    
    
    (49,026
    )$
    566,725
    
    
    $
    584,482
 2009 Amendment
       Covenants
  
    
    the total leverage ratio and fixed charge coverage ratio covenants for the fiscal
quarters ending June 30, 2009 through and including December 31, 2010 (the Covenant
Suspension Period) have been suspended;
    
    during the Covenant Suspension Period, the Company must: (1) maintain minimum trailing
twelve month consolidated EBITDA (as defined in the Credit Agreement) of $60.0 million for
fiscal quarters through March 31, 2010, increasing
 13




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incrementally to $66.0 million for fiscal
quarter ended December 31, 2010, subject to certain adjustments; and (2) maintain minimum
cash on hand (defined as unencumbered consolidated cash and cash equivalents) of at least
$7.5 million;
    
    the Company is restricted from incurring additional intercompany debt or making any
intercompany investments other than to the parties to the Credit Agreement;
    
    the Company may not incur additional indebtedness or liens, or make permitted
acquisitions or restricted payments, during the Covenant Suspension Period (after the
Covenant Suspension Period, the Credit Agreement will permit indebtedness, liens, permitted
acquisitions and restricted payments, subject to certain leverage ratio and liquidity
measurements); and
    
    the Company must provide monthly unaudited financial statements to the lenders within 30
days after each calendar-month end.
   
    
    a minimum trailing twelve month consolidated EBITDA of $60.0 million;
    
    a $7.5 million minimum cash on hand; and
    
    a limit on annual capital expenditures of $15.0 million annually.
   
    
    a maximum total leverage ratio of 6.50:1; and
    
    a minimum fixed charge coverage ratio of 1.20:1.
  Warrants
  Accounting for the Modification of the Credit Agreement
  14




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7. Stock Based Compensation
    8. Earnings per Share
   15




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Three Months Ended March 31,2010
    
    2009Basic Earning Per ShareNumerator:Undistributed net loss
    
    $
    (144
    )
    
    $
    (3,296
    )Participation rights of unvested restricted stock in
undistributed earnings (1)
    
    
    
    
    
    
    Basic undistributed net loss  attributable to common shares
    
    $
    (144
    )
    
    $
    (3,296
    )Denominator:Denominator for basic loss per common share:Basic weighted average common shares outstanding
    
    
    40,456
    
    
    
    40,421Basic EPS  attributable to common shares
    
    $
    (0.01
    )
    
    $
    (0.08
    )Diluted Earnings Per Share:Numerator:Undistributed net loss
    
    $
    (144
    )
    
    $
    (3,296
    )Participation rights of unvested restricted stock in
undistributed earnings (1)
    
    
    
    
    
    
    Basic undistributed net loss  attributable to common shares
    
    $
    (144
    )
    
    $
    (3,296
    )Denominator:Basic weighted average shares outstanding
    
    
    40,456
    
    
    
    40,421Effect of dilutive options (2)
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    40,456
    
    
    
    40,421Diluted EPS  attributable to common shares
    
    $
    (0.01
    )
    
    $
    (0.08
    )
 
 (1)
    
    Unvested restricted stock has no contractual obligation to absorb losses of the Company.
Therefore, for the three months ended March 31, 2010 and 2009, 1,710,099 shares and 1,532,910
shares of restricted stock, respectively, were outstanding but excluded from the EPS
calculations.(2)
    
    For the three months ended March 31, 2010 and 2009, options to purchase 925,290 shares and
2,274,895 shares of common stock, respectively, were outstanding but excluded from the EPS
calculations because their effect would have been antidilutive. Additionally, the Company
excluded warrants from the EPS calculations because including the warrants would be
antidilutive.  March 31, 2010Restricted shares of Class A Common Stock
    
    
    1,710,099Options to purchase Class A Common Stock
    
    
    925,290
 9. Commitments and Contingencies
   16




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17




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10. Restricted Cash
  11. Variable Interest Entities
   12. Subsequent Event
   18




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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
     19




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Results of Operations
 Analysis of Unaudited Condensed Consolidated Statements of Operations.
 For the Three MonthsEnded March 31,
    
    2010 vs 20092010
    
    2009
    
    $ Change
    
    % ChangeSTATEMENT OF OPERATIONS DATA:Net revenues
    
    $
    56,358
    
    
    $
    55,353
    
    
    $
    1,005
    
    
    
    1.8
    %Station operating expenses (excluding depreciation,
amortization and LMA fees)
    
    
    39,926
    
    
    
    42,298
    
    
    
    (2,372
    )
    
    
    -5.6
    %Depreciation and amortization
    
    
    2,517
    
    
    
    2,898
    
    
    
    (381
    )
    
    
    -13.1
    %LMA fees
    
    
    529
    
    
    
    469
    
    
    
    60
    
    
    
    12.8
    %Corporate general and administrative (including non-cash
stock compensation expense)
    
    
    4,066
    
    
    
    6,108
    
    
    
    (2,042
    )
    
    
    -33.4
    %Realized loss on derivative instrument
    
    
    584
    
    
    
    
    
    
    
    584
    
    
    
    *
    *Operating income
    
    
    8,736
    
    
    
    3,580
    
    
    
    5,156
    
    
    
    144.0
    %Interest expense, net
    
    
    (8,829
    )
    
    
    (7,737
    )
    
    
    (1,092
    )
    
    
    14.1
    %Other (expense) income, net
    
    
    (53
    )
    
    
    3
    
    
    
    (56
    )
    
    
    -1866.7
    %Income tax benefit
    
    
    2
    
    
    
    858
    
    
    
    (856
    )
    
    
    -99.8
    %Net loss
    
    $
    (144
    )
    
    $
    (3,296
    )
    
    $
    3,152
    
    
    
    -95.6
    %OTHER DATA:Station Operating Income (1)
    
    $
    16,432
    
    
    $
    13,055
    
    
    $
    3,377
    
    
    
    25.9
    %Station Operating Income margin (2)
    
    
    29.2
    %
    
    
    23.6
    %
    
    
    *
    *
    
    
    *
    *Cash flows related to:Operating activities
    
    $
    12,095
    
    
    $
    6,632
    
    
    $
    5,463
    
    
    
    82.4
    %Investing activities
    
    
    (451
    )
    
    
    (809
    )
    
    
    358
    
    
    
    -44.3
    %Financing activities
    
    
    (12,918
    )
    
    
    (13,949
    )
    
    
    1,031
    
    
    
    -7.4
    %Capital expenditures
    
    
    (431
    )
    
    
    (777
    )
    
    
    346
    
    
    
    -44.5
    %
 
 **
    
    Calculation is not meaningful.(1)
    
    Station Operating Income consists of operating income before depreciation and amortization,
LMA fees, corporate general and administrative expenses, the mark to market fair value
adjustment of the Green Bay Option, and non-cash stock compensation. 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. 20




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##### Table of Contents



Three Months Ended March 31, 2010 versus the Three Months Ended March 31, 2009
 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.
 Realized Loss on Derivative Instrument.
 Interest Expense, net.
 For the Three Months EndedMarch 31,
    
    2010 vs 20092010
    
    2009
    
    $ Change
    
    % ChangeBank Borrowings  term loan and revolving credit facilities
    
    $
    6,678
    
    
    $
    4,115
    
    
    $
    2,563
    
    
    
    62.3
    %Bank Borrowings yield adjustment  interest rate swap
    
    
    3,739
    
    
    
    2,363
    
    
    
    1,376
    
    
    
    58.2
    %Change in fair value of interest rate swap agreement
    
    
    (1,913
    )
    
    
    (3,043
    )
    
    
    1,130
    
    
    
    -37.1
    %Change in fair value of interest rate option agreement
    
    
    
    
    
    
    4,045
    
    
    
    (4,045
    )
    
    
    -100.0
    %Other interest expense
    
    
    327
    
    
    
    303
    
    
    
    24
    
    
    
    7.9
    %Interest income
    
    
    (2
    )
    
    
    (46
    )
    
    
    44
    
    
    
    -95.7
    %Interest expense, net
    
    $
    8,829
    
    
    $
    7,737
    
    
    $
    1,092
    
    
    
    14.1
    %
 21




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##### Table of Contents



Income Tax Benefit.
 Station Operating Income.
    Reconciliation of Non-GAAP Financial Measure.
 22




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##### Table of Contents



For the Three MonthsEnded March 31,
    
    2010 vs 20092010
    
    2009
    
    $ Change
    
    % ChangeOperating income
    
    $
    8,736
    
    
    $
    3,580
    
    
    $
    5,156
    
    
    
    144.0
    %Depreciation and amortization
    
    
    2,517
    
    
    
    2,898
    
    
    
    (381
    )
    
    
    -13.1
    %LMA fees
    
    
    529
    
    
    
    469
    
    
    
    60
    
    
    
    12.8
    %Non-cash stock compensation
    
    
    (101
    )
    
    
    592
    
    
    
    (693
    )
    
    
    -117.1
    %Corporate general and administrative
    
    
    4,167
    
    
    
    5,516
    
    
    
    (1,349
    )
    
    
    -24.5
    %Realized loss on derivative instrument
    
    
    584
    
    
    
    
    
    
    
    584
    
    
    
    *
    *Station Operating Income
    
    $
    16,432
    
    
    $
    13,055
    
    
    $
    3,377
    
    
    
    25.9
    %
 Liquidity and Capital Resources
  tm tm
  Consideration of Recent Economic Developments
   23




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##### Table of Contents



Cash Flows from Operating Activities
  Cash Flows used in Investing Activities
  Cash Flows used in Financing Activities
  Amended Credit Agreement
 2009 Amendment
     24




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##### Table of Contents



Covenants
  
    
    the total leverage ratio and fixed charge coverage ratio covenants for the fiscal
quarters ending June 30, 2009 through and including December 31, 2010 (the Covenant
Suspension Period) have been suspended;
 
    
    during the Covenant Suspension Period, we must: (1) maintain minimum trailing twelve
month consolidated EBITDA (as defined in the Credit Agreement) of $60.0 million for fiscal
quarters through March 31, 2010, increasing incrementally to $66.0 million for fiscal
quarter ended December 31, 2010, subject to certain adjustments; and (2) maintain minimum
cash on hand (defined as unencumbered consolidated cash and cash equivalents) of at least
$7.5 million;
 
    
    we are restricted from incurring additional intercompany debt or making any intercompany
investments other than to the parties to the Credit Agreement;
 
    
    we may not incur additional indebtedness or liens, or make permitted acquisitions or
restricted payments, during the Covenant Suspension Period (after the Covenant Suspension
Period, the Credit Agreement will permit indebtedness, liens, permitted acquisitions and
restricted payments, subject to certain leverage ratio and liquidity measurements); and
 
    
    we must provide monthly unaudited financial statements to the lenders within 30 days
after each calendar-month end.
   
    
    a minimum trailing twelve month consolidated EBITDA of $60.0 million;
 
    
    a $7.5 million minimum cash on hand; and
 
    
    a limit on annual capital expenditures of $15.0 million annually.
  25




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##### Table of Contents




    
    a maximum total leverage ratio of 6.5:1; and
 
    
    a minimum fixed charge coverage ratio of 1.20:1.
    Warrants
  Accounting for the Modification of the Credit Agreement
    
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  26




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##### Table of Contents



Item 4. Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
     
 Item 1A. Risk Factors
 27




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 5. Other Information
  
 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.
 28




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##### Table of Contents



SIGNATURES
  CUMULUS MEDIA INC.Date: April 30, 2010
    By:
    /s/ Joseph P. HannanJoseph P. HannanSenior Vice President, Treasurer and Chief Financial Officer 29




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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.
 30