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CUMULUS MEDIA INC

3280 PEACHTREE ROAD N.W. ATLANTA, GA, 30305 404−949−0700 www.cumulus.com

( CMLS )

10−Q
Quarterly report pursuant to sections 13 or 15(d) Filed on 4/30/2010 Filed Period 3/31/2010

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10−Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010.

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) 3280 Peachtree Road, NW Suite 2300, Atlanta, GA (Address of Principal Executive Offices) 36−4159663 (I.R.S. Employer Identification No.) 30305 (ZIP Code)

(404) 949−0700 (Registrant’s telephone number, including area code) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S−T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non−accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b−2 of the Exchange Act. (Check one): Large accelerated filer Non−accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b−2 of the Exchange Act). Yes No As of April 27, 2010, the registrant had 42,011,608 outstanding shares of common stock consisting of (i) 35,557,546 shares of Class A Common Stock; (ii) 5,809,191 shares of Class B Common Stock; and (iii) 644,871 shares of Class C Common Stock. Accelerated filer

CUMULUS MEDIA INC. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and March 31, 2009 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and March 31, 2009 Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits Signatures Exhibit Index EX−31.1 EX−31.2 EX−32.1 2 3 3 3 4 5 6 19 26 27 27 27 27 28 28 28 28 29 30

488 4.725 17. shares designated at stated value $1. par value $. 35.410. stated value $10.504 5.000 per share.000.026 68. Financial Statements CUMULUS MEDIA INC.397 323. less allowance for doubtful accounts of $1.097 and $1.538 4.546 and 35.195 584. 200. 2010 Assets Current assets: Cash and cash equivalents Restricted cash Accounts receivable.000 per share.100 57.534 — 49. except for share data) (Unaudited) March 31.572.529 (1.735) (372. 0 shares issued and outstanding in both 2010 and 2009 and 12. par value $. respectively Trade receivable Prepaid expenses and other current assets Total current assets Property and equipment.871 shares issued and outstanding in both 2009 and 2008 Treasury stock.064 See accompanying notes to unaudited condensed consolidated financial statements.287 695.301 706.000 shares authorized.380 56. par value $0.639) 962.592 shares issued.382) 966.557.187 44.000 12% Series B Cumulative Preferred Stock.000 shares authorized.262.868 $ 334.064 $ 16.083 $ — 596 58 6 (261.000 shares authorized.576 — 596 58 6 (256.224 789 37.196 89. 3 . 0 shares issued and outstanding in both 2010 and 2009 Class A common stock.723 56. net Intangible assets. 2009 $ 14. net Goodwill Other assets Total assets Liabilities and Stockholders’ Deficit Current liabilities: Accounts payable and accrued expenses Trade payable Derivative instrument Current portion of long−term debt Total current liabilities Long−term debt Other liabilities Deferred income taxes Total liabilities Stockholders’ Deficit: Preferred stock.Table of Contents PART I.722 4. 24. including: 250. 59.191 shares issued and outstanding in both 2009 and 2008 Class C common stock.596 566.655 161.046 and 24.714 46.809.015.635 5.512) 334.412 $ 13.945 (1.01 per share.000.726 54. respectively Class B common stock.709 64. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands.083 $ 16.078.166. at cost. 5.000 shares designated as 13 3/4% Series A Cumulative Exchangeable Redeemable Preferred Stock due 2009.078.01 per share. 20.879) (372.121 4.598 21. 644.000 shares authorized. FINANCIAL INFORMATION Item 1.952 13.01 per share.000.804 21.981 161. 30. par value $0. 20.329) 323.081 shares in 2009 and 2008. respectively Additional paid−in−capital Accumulated deficit Total stockholders’ deficit Total liabilities and stockholders’ deficit $ $ December 31.482 32.511 shares outstanding in 2010 and 2009.162.01 per share.950 629 31. in 2010 and 2009.970 5.121 3.

154) 858 (3. respectively) Realized loss on derivative instrument Total operating expenses Operating income Non−operating income (expense): Interest expense Interest income Other (expense) income.517 529 4. except for share and per share data) (Unaudited) Three Months Ended March 31.580 (7.01) 40.783) 46 3 (7.353 42.353 1.420.000 55.066 584 47. “Earnings Per Share”) Weighted average diluted common shares outstanding (See Note 8.298 2.08) (0.Table of Contents CUMULUS MEDIA INC. “Earnings Per Share) Weighted average basic common shares outstanding (See Note 8.926 2.08) 40.831) 2 (53) (8. “Earnings Per Share”) $ $ $ $ 55.455. 2010 2009 Broadcast revenues Management fee from affiliate Net revenues Operating expenses: Station operating expenses (excluding depreciation. and LMA fees) Depreciation and amortization LMA fees Corporate general and administrative (including non−cash stock compensation of $(101) and $592.773 3.814 See accompanying notes to unaudited condensed consolidated financial statements. net Total non−operating expense.933 $ $ $ $ 54. amortization.108 — 51.000 56. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands. in 2010 and 2009.736 (8.420.734) (4. “Earnings Per Share) Diluted loss per common share (See Note 8.01) (0.358 39.296) (0.358 1.455.622 8.898 469 6. 4 .882) (146) 2 (144) (0. net Loss before income taxes Income tax benefit Net loss Basic and diluted loss per common share: Basic loss per common share (See Note 8.933 40.814 40.

043) 3.958 — 2.192 (2.224 $ 14.001 (852) 592 (189) 13.877 $ 6.302 Supplemental disclosures of cash flow information: Interest paid $ 6.805 (3.918) (1.306 2.804) (114) — (12.296) 2.916) (406) (6.950 $ (3.274) 16.756) — (193) (13.741 See accompanying notes to unaudited condensed consolidated financial statements.246 803 12.095 196 (216) (431) (451) (12.329) (14) (101) 160 8.003 $ 44.767 Income taxes paid 213 Trade revenue 3.Table of Contents CUMULUS MEDIA INC. 5 .949) (8.072) (391) 498 2.517 305 — 364 53 (1.813 Trade expense 3. 2010 2009 Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Amortization of debt issuance costs/discounts Amortization of derivative gain Provision for doubtful accounts Loss (gain) on sale of assets or stations Fair value adjustment of derivative instruments Deferred income taxes Non−cash stock compensation Changes in assets and liabilities: Restricted cash Accounts receivable Trade receivable Prepaid expenses and other current assets Accounts payable and accrued expenses Trade payable Other assets Other liabilities Net cash provided by operating activities Cash flows from investing activities: Proceeds from sale of assets or radio stations Purchase of intangible assets Capital expenditures Net cash used in investing activities Cash flows from financing activities: Repayments of borrowings from bank credit facility Tax withholding paid on behalf of employees Payments for repurchase of common stock Net cash used in financing activities Decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ (144) 2.458 (307) (48) 6.632 6 (38) (777) (809) (13. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended March 31.008 1.898 109 (828) 657 (3) 1.126) 53.

Table of Contents CUMULUS MEDIA INC. the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. and reduced the preexisting revolving credit facility from $100. including advertising on our radio stations. 2010.0 million for fiscal quarters through March 31.0 million to $20. The results of operations and cash flows for the three months ended March 31. The Credit Agreement maintained the preexisting term loan facility of $750. additional cost reductions. based upon actions the Company has already taken. Accordingly. 2009. 2009 through and including December 31. Management believes that the Company will continue to be in compliance with all of its debt covenants through at least March 31.0 million. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. management gave consideration to and incorporated the impact of recent market developments in a variety of areas. as of March 31. which. is referred to herein as the “Credit Agreement”. the Company’s total leverage ratio and fixed charge coverage ratio covenants for the fiscal quarters ending June 30. 2010.0 million. 2010 (the “Covenant Suspension Period”) have been suspended. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10−Q and Article 10 of Regulation S−X. In consideration of current and projected market conditions. and sales of non−strategic assets. the Company evaluates its estimates. which management believes has contributed to increased advertising revenues by virtue of re−engineering the Company’s sales techniques through enhanced training of its sales force. On an on−going basis. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets. the Company’s loan covenants require the Company to: (1) maintain a minimum trailing twelve month consolidated EBITDA (as defined in the Credit Agreement) of $60. and (iv) continued scrutiny of all operating expenses. which include: (i) the amendment to the Credit Agreement. the purpose of which was to provide certain covenant relief in 2009 and 2010 (see Note 6. they do not include all of the information and notes required by GAAP for complete financial statements. subject to certain adjustments. 2010. Liquidity Considerations The economic crisis in 2009 has reduced demand for advertising in general. In the opinion of management. all adjustments necessary for a fair statement of results of the interim periods have been made and such adjustments were of a normal and recurring nature. including those related to bad debts. Therefore. See Note 6. (“Company”) and the notes thereto included in the Company’s Annual Report on Form 10−K for the year ended December 31. we expect that overall advertising revenues will have modest growth in certain categories throughout the remainder of 2010. (ii) employee reductions of 16. The actions may include the implementation of additional operational efficiencies. the Company will continue to monitor its revenues and cost structure closely and if revenues do not meet or exceed expected growth or if the Company exceeds planned spending. stock−based compensation and contingencies and litigation. “Long−Term Debt”). and related disclosure of contingent assets and liabilities. income taxes. including the Company’s forecasted advertising revenues and liquidity. as amended. Pursuant to the amended Credit Agreement.1 million. deferral of capital expenditures.0 million for fiscal quarter ended December 31. the Company entered into an amendment to the credit agreement governing its senior secured credit facility. renegotiation of major vendor contracts. On June 29. 2011. liabilities. “Long−Term Debt” for further discussion of the Credit Agreement. in conjunction with the development of the Company’s 2010 business plan. The credit agreement. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Additional facilities are no longer permitted under the Credit Agreement. Actual results may differ materially from these estimates under different assumptions or conditions. During the Covenant Suspension Period. revenues and expenses. had an outstanding balance of approximately $624.5% in 2009. the Company may take further actions as needed in an attempt to maintain compliance with its debt covenants under the Credit Agreement. intangible assets. However. and (2) 6 . Interim Financial Data and Basis of Presentation Interim Financial Data The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Cumulus Media Inc. increasing incrementally to $66. (iii) the sales initiative implemented during the first quarter of 2009. 2010. 2010 are not necessarily indicative of the results that can be expected for the entire fiscal year ending December 31. 2009. derivative financial instruments.

2009−07 required the Company to make additional disclosures but did not have a material impact on the Company’s financial position. a translator licensed for use in Atlanta. 2009. the Company completed a swap transaction pursuant to which it exchanged WZBN−FM. In order to comply with the leverage ratio covenant at March 31. 2009−17 also requires additional disclosure about a reporting entity’s involvement in a VIE. which could have a material adverse impact on the Company’s financial position. for our financial statements as of that date. “Fair Value Measurements”. the Company would be in default under the Credit Agreement. 2009−17”) which amends the FASB ASC for the issuance of FASB Statement No. Previous guidance required that an entity that is an SEC filer be required to disclose the date through which subsequent events have been evaluated. has a controlling financial interest in a variable interest entity (“VIE”) with an approach primarily focused on identifying which reporting entity has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (1) the obligation to absorb the losses of the entity or (2) the right to receive the benefits from the entity. and the Company cannot be assured that sufficient assets will remain after it has paid all of its debt. If the Company is unable to comply with its debt covenants. For the fiscal quarter ending March 31. 2009−17. This transaction was not material to the results of the Company. which may make the market for these assets less liquid and increase the chances that these assets will be liquidated at a significant loss. 2010. If the lenders accelerate the maturity of outstanding debt. 2010. Georgia. 2010−06 which provides improvements to disclosure requirements related to fair value measurements. was accounted for under ASC 805. if any. If the Company were unable to obtain a waiver or an amendment to the Credit Agreement in the event of a debt covenant violation. 2009−17 is effective for annual and interim periods beginning after November 15. for W250BC.50:1 and the fixed charge coverage ratio covenant will be 1. 2010. Additional new disclosures regarding the purchases. These disclosures are effective for the interim and annual reporting periods beginning after December 15. ASU No.63:1. Recent Accounting Pronouncements In December 2009. The amendments in this ASU replace the quantitative−based risks and rewards calculation for determining which reporting entity. the Company’s total leverage ratio was 8. This update amends the requirement of the date disclosure to alleviate potential conflicts between ASC 855−10 and the SEC’s requirements. See Note 11. issuances and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15. 46(R). See Note 6. issued by the FASB in June 2009. ASU 2010−06. Camilla. The ability to liquidate assets is affected by the regulatory restrictions associated with radio stations. the total leverage ratio covenant will be 6. as well as any significant changes in risk exposure due to that involvement. New disclosures are required for significant transfers in and out of Level 1 and Level 2 fair value measurements. valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for Level 2 or Level 3. for further discussion. If the Company were unable to repay its debts when due. 7 . the lenders under the credit facilities could proceed against the collateral granted to them to secure that indebtedness.00:1 and the fixed charge coverage ratio was 1. the Company would need to obtain a waiver or amendment to the Credit Agreement and no assurances can be given that the Company will be able to do so. the Company may be forced to liquidate certain assets to repay all or part of the senior secured credit facilities.5 million. disaggregation regarding classes of assets and liabilities. owned by Extreme Media Group. The Company adopted the portions of this update which became effective January 1. “Long−Term Debt” for further discussion.Table of Contents maintain minimum cash on hand (defined as unencumbered consolidated cash and cash equivalents) of at least $7. 2010 beginning with the first interim period. The FASB issued ASU No. The Company has pledged substantially all of its assets as collateral under the Credit Agreement. Acquisitions and Dispositions The Company did not complete any material acquisitions or dispositions during the quarter ended March 31. 2010−09 which provides amendments to certain recognition and disclosure requirements. 2011 (the first quarter after the Covenant Suspension Period). At March 31. 2011. sales. “Variable Interest Entities”. Amendments to FASB Interpretation No. 2009. Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (“ASU No. During the quarter ended March 31. Georgia. The fair value of the assets acquired in exchange for the assets disposed.20:1. including FCC licensing. The Company plans to fund these debt payments from cash flows generated from operations. 2. 2011. 167. the Company estimates that it will be required to reduce a significant amount of debt by March 31. 2009. results of operations and cash flows. See Note 4. ASU No. The FASB issued ASU No. the Financial Accounting Standards Board (“FASB”) issued ASU No. ASU 2010−09. The adoption of ASU No.

. Under the May 2005 Swap the Company received LIBOR−based variable interest rate payments and made fixed interest rate payments. to require immediate settlement of some or all open derivative contracts at their then−current fair value. 2006. 2010 and 2009 includes income of $0. inclusive of the fair value adjustment during the three months ended March 31. 2009 reflect other short−term liabilities of $13. N. that provided Bank of America. Accordingly. the May 2005 Swap no longer qualified as a cash flow hedging instrument. Clear Channel and the Company entered into a local marketing agreement (“LMA”) whereby the Company is responsible for operating (i. to include the fair value of the May 2005 Option. 2009. This instrument has not been highly effective in mitigating the risks in the Company’s cash flows. The maximum credit exposure at March 31. The Company manages exposure to counterparty credit risk by requiring specific minimum credit standards and diversification of counterparties. The Company does not utilize financial instruments for trading or other speculative purposes.0 million and $3. for two years.2 million over a five year term (expiring December 31. 8 . or a default under any derivative contract. although not the obligation. 2011. The May 2005 Swap matured in March of 2009. Derivative Financial Instruments The Company recognizes all derivatives on the balance sheet at fair value.0 million.6 million. Interest expense for the three months ended March 31. In the event of a default under the Credit Agreement. the changes in its fair value have since been reflected in the statement of operations instead of accumulated other comprehensive income (“AOCI”). The May 2005 Swap changed the variable−rate cash flow exposure on $400. the Company entered into a forward−starting LIBOR−based interest rate swap arrangement (the “May 2005 Swap”) to manage fluctuations in cash flows resulting from interest rate risk attributable to changes in the benchmark interest rate of LIBOR. respectively. respectively.Table of Contents 3. The Company’s financial instrument counterparties are high−quality investments or commercial banks with significant experience with such instruments. programming. respectively. advertising. a component of stockholders’ equity (deficit). The fair value represents an estimate of the net amount that the Company would pay if the agreement was transferred to another party or cancelled as of the date of the valuation. thereby creating fixed−rate long−term debt. the Company also entered into an interest rate option agreement (the “May 2005 Option”). 2013).A. The May 2005 Option was exercised on March 11. The May 2005 Swap became effective as of March 13. the effective portion of the change in fair value must be recorded through other comprehensive income. Changes in fair value are recorded in income for any contracts not classified as qualifying hedging instruments. For derivatives qualifying as cash flow hedge instruments. on terms substantially identical to the May 2005 Swap. The May 2005 Swap expired on March 13. the end of the term of the Company’s prior swap. the right to enter into an underlying swap agreement with the Company. 2010 and 2009. 2010 and December 31. etc. 2009.0 million of the Company’s long−term bank borrowings to fixed−rate cash flows. and has accounted for changes in the May 2005 Option’s value as a current element of interest expense. 2009. and therefore the Company has deemed it speculative. The May 2005 Swap was previously accounted for as a qualifying cash flow hedge of the future variable rate interest payments. from March 13. May 2005 Swap In May 2005. Starting in June 2006.) five Green Bay radio stations and must pay Clear Channel a monthly fee of approximately $0. Green Bay Option On April 10. in exchange for the Company retaining the operating profits for managing the radio stations. May 2005 Option In May 2005. Clear Channel also has a put option (the “Green Bay Option”) that allows them to require the Company to repurchase the five Green Bay radio stations at any time during the two−month period commencing July 1. the derivative counterparties would have the right.7 million and other long−term liabilities $15.0 million. The Company reported interest income of $1.e. The balance sheets as of March 31. 2010 was not significant to the Company. in accordance with the terms of the original agreement.9 million and interest expense of $4. 2009 (the end of the term of the May 2005 Swap) through March 13. The Company has procedures to monitor the credit exposure amounts. The fair value of the May 2005 Swap was determined using observable market based inputs (a “Level 2” measurement).

Accordingly.7 million to reflect the fair value of the Green Bay Option.7 million and $6. 2010 and December 31. Accordingly.1 million. The fair value of the Green Bay Option at March 31. 2009 $ 6.Table of Contents 2013 (or earlier if the LMA is terminated before this date) for $17. The location and fair value amounts of derivatives in the consolidated balance sheets are shown in the following table: Information on the Location and Amounts of Derivatives Fair Values in the Unaudited Consolidated Balance Sheets (dollars in thousands) Liability Derivatives Balance Sheet Location Derivative not designated as hedging instruments: Green Bay Option Interest rate swap — option Interest rate swap — option Other long−term liabilities Other short−term liabilities Other long−term liabilities Total Fair Value March 31. The balance sheet as of March 31. 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).002) 4. the fair value of the put was recorded as a long− term liability offsetting the gain at the acquisition date with subsequent changes in the fair value recorded through earnings. 9 .383 $ 6.043 $ (1. the Company recorded $0.073 — 15. 2009). 2009. 2010 includes other long−term liabilities of $6. 2010 December 31. 2010 March 31.6 million of expense in realized loss on derivative instruments associated with marking to market the Green Bay Option to reflect the fair value of the option during the three months ended March 31. Fair Value Measurements The three levels of the fair value hierarchy to be applied to financial instruments when determining fair value are described below: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.913 — $ 1.657 13. Level 2 — Valuations based on quoted prices for similar assets or liabilities. 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. quoted prices in markets that are not active.6 million (the fair value of the radio stations as of April 10.726 — $ 20. or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.639 21. Clear Channel is the nation’s largest radio broadcaster and as of December 2009 Moody’s gave its debt a CCC credit rating.045) 3. respectively. and Level 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.712 $ The location and fair value amounts of derivatives in the Unaudited Condensed Consolidated Statement of Operations are shown in the following table: Liability Derivatives Derivative Instruments Green Bay Option Interest rate swap — option Interest rate swap Financial Statement Location Realized loss on derivative instrument Interest income/(expense) Interest income/(expense) Total Amount of Income (Expense) Recognized in Income on Derivatives for the Three Months Ended March 31. The Company accounted for the Green Bay Option as a derivative contract.329 $ — (4. was $6. 2010. 2009 $ (584) 1.

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.382 $ 4. The Company’s Level 1 cash equivalents are valued using quoted prices in active markets for identical investments. The Company’s financial assets and liabilities are measured at fair value on a recurring basis.999%.999%. (2) (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).382 $ 4. interest rate range of 0.995% – 0.930%. the Company used an industry standard cash valuation model. The Company reported $0.Table of Contents A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Financial assets and liabilities measured at fair value on a recurring basis as of March 31. 2010 (dollars in thousands): 10 .382 $ 4.28%.28%. and credit spread of 4. including interest rates and yield curves.657) $ — $ (6.726) $ — (6. and • • Floating discount cash flow range of 0. To estimate the fair value of the Interest rate swap.995% – 0. which utilizes a discounted cash flow approach.85%. interest rate of 3. representing the change in the fair value of the Green Bay Option.657) This balance is invested in an institutional money market fund.382 $ $ — — $ $ — — $(13. • credit spread of 4. The fair value of the Company’s interest rate swap is determined based on the present value of future cash flows using observable inputs.383) $ — — $ (13.726) (6.6 million in realized loss on derivative instruments within the income statement related to the fair value adjustment. 2010 were as follows (dollars in thousands): Fair Value Measurements at Reporting Date Using Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Fair Value Financial assets: Cash equivalents: Money market funds (1) Total assets Financial Liabilities: Other short−term liabilities Interest rate swap (2) Other long−term liabilities Green Bay option (3) Total liabilities (1) $ 4.726) — $ (13. 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 reconciliation below contains the components of the change in fair value associated with the Green Bay Option as of March 31. Derivative valuations incorporate adjustments that are necessary to reflect the Company’s own credit risk.23% – 0.657) $(20. The option valuation incorporates a credit risk adjustment to reflect the probability of default by the Company. The significant inputs for the valuation model include the following: • • • Fixed discount cash flow range of 0.

as described in Note 4. 2009.604 To estimate the fair value of the term loan. The significant inputs for the valuation model include the following: • total term of 3.1%. discount rate of 1.031 $ 217. 2010 December 31.031 $217. the Company used a Black−Scholes valuation model. The following table represents the fair value of the Company’s nonfinancial assets measured at fair value on a nonrecurring basis as of March 31. The following table shows the gross amount and fair value of the Company’s term loan: March 31.25%. 2009 Carrying value of term loan $ 624.6%.5 years.152 There have been no significant changes to our fair value methodologies related to goodwill and other intangible assets. • • • volatility rate of 37. “Intangible Assets and Goodwill”. the Company used an industry standard cash valuation model. 2010 $ Green Bay Option $ 6.340 $ 538. which utilizes a discounted cash flow approach.890 Fair value of term loan $ 570.121 161. The significant inputs for the valuation model include the following: • discount cash flow rate of 6.1 million.Table of Contents Description Fair value balance at December 31. payables. dividend annual rate of 0.0%.073 584 6. The carrying values of receivables. and accrued expenses approximate fair value due to the short maturity of these instruments.657 To estimate the fair value of the Green Bay Option.087 $ 636. 25%. 2009 Add: Mark to market fair value adjustment Fair value balance at March 31. and 11 . to our consolidated financial statements and related notes of our Annual Report on Form 10−K for the year ended December 31. and • market value of Green Bay of $10.152 Total Fair Value Non−financial assets: Goodwill Other intangible assets Total $ 56.121 161. • interest rate of 0. 2010 (dollars in thousands): Fair Value Measurements at Reporting Date Using Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) $ — — $ — $ — — $ — $ 56.

The agreement provides for the Company to receive. 2009.917 $ 35. The Company and the other three equity partners each hold a 25% economic interest in CMP. Dallas.050.031.740. respectively. Concurrent with the consummation of the acquisition.413 50.0 million in management fees from CMP for the three months ended March 31. Atlanta. and (3) warrants exercisable for shares of Radio Holdings’ common stock representing. Radio Holdings and CMPSC completed the exchange of $175. 2006. The Company recorded the payment as a reduction in its investment in CMP. On May 5. Kansas City.183 Liabilities 924.Table of Contents • credit spread of 4. Susquehanna’s radio broadcasting business consisted of 33 radio stations in 8 markets: San Francisco.6 million and approximately $6. Indianapolis and York.28%. Cumulus Media Partners. Houston. whichever is greater. The Blackstone Group (“Blackstone”) and Thomas H. pursuant to which the Company’s personnel will manage the operations of CMP’s subsidiaries. the Company announced that together with Bain Capital Partners.304 26. the Company announced the consummation of the acquisition of the radio broadcasting business of Susquehanna Pfaltzgraff Co. 3.402 Balance Sheet Data: Assets 489. In addition. Pennsylvania.2 billion. for $14.308 Net income 1. The Company recognized a gain of $2.464. 2005. up to 40% of the outstanding common stock on a fully diluted basis (the “New Warrants”). the Company entered into a management agreement with a subsidiary of CMP. a management fee that is expected to be approximately 1. 2009.504 Shareholders’ deficit (434. In connection with the formation of CMP. CMP was created by the Company and the equity partners to acquire the radio broadcasting business of Susquehanna Pfaltzgraff Co. On March 26. Two indirect subsidiaries of CMP. 2010 2009 Income Statement Data: Revenues $ 37. the Company recorded $0. 2010 and 2009. (“Radio Holdings”) and CMP Susquehanna Corporation (“CMPSC”).913) (333.5% of the total principal amount outstanding prior to the commencement of the 2009 Exchange Offer.837 Operating expenses 27. For the three months ended March 31. commenced an exchange offer (the “2009 Exchange Offer”) on March 9. CMP Susquehanna Radio Holdings Corp. the Company received a payment of approximately $3.273. Lee Partners.625 717.0 million.2 million in cash in exchange for its membership interests.893 shares of Radio Holdings’ common stock. on a quarterly basis. each of their pro rata claims to CMP’s assets (on a consolidated basis) as an equity holder has been diluted as a result of the exchange.0 million. The table below presents summarized financial statement data related to CMP (dollars in thousands): Three Months Ended March 31. which represented 93. LLC (“CMP”).000 aggregate principal amount of New Notes.0% of the CMP subsidiaries’ annual EBITDA or $4.5 million as consideration for advisory services provided in connection with the acquisition.5 million from the transfer of assets to CMP. Missouri markets with a book value of approximately $71. the Company contributed four radio stations (including related licenses and assets) in the Houston. 2010 and 2009. Investment in Affiliate On October 31. the Company had formed a new private partnership. 12 . 5. upon consummation of the acquisition. by CMP for a purchase price of approximately $1. in the aggregate.538 1. Although neither the Company nor its equity partners’ equity stakes in CMP were directly affected by the exchange. The Company recorded as net revenues approximately $1. (2) up to $35 million in shares of Series A preferred stock of Radio Holdings (the “New Preferred Stock”). pursuant to which they offered to exchange all of CMPSC’s 9 7/8% senior subordinated notes due 2014 (the “Existing Notes”) (1) for up to $15 million aggregate principal amount of Variable Rate Senior Subordinated Secured Second Lien Notes due 2014 of CMPSC (the “New Notes”).000 aggregate principal amount of Existing Notes. Texas and Kansas City. as equity losses in affiliate. Cincinnati.321) The Company’s investment in CMP is accounted for under the equity method of accounting.633 shares of New Preferred Stock and New Warrants exercisable for 3.

the Company will bear interest. • during the Covenant Suspension Period.0% or the Alternate Base Rate (defined as the higher of the Bank of America.A. Incremental facilities are no longer permitted as of June 30.0 million through mandatory prepayments of Excess Cash Flow (as defined in the Credit Agreement). covenants and events of default in the Credit Agreement are customary for financing transactions of this nature and are substantially the same as those in existence prior to the amendment. including. as described below. The term loan facility will mature on June 11. 2010 Term loan.725 December 31. Covenants The representations. Long−Term Debt The Company’s long−term debt consisted of the following at March 31. N. Once the Company reduces the term loan facility by $25. Prime Rate and the Federal Funds rate plus 0..25%.0 million for fiscal quarters through March 31.25% or the Alternate Base Rate plus 2. Inc. at a rate equal to LIBOR plus 3. The Company also is required to make quarterly mandatory prepayments of 100% of Excess Cash Flow through December 31. as administrative agent. at a rate equal to LIBOR plus 4. The Credit Agreement contains terms and conditions customary for financing arrangements of this nature. at the Company’s option..Table of Contents 6. The revolving credit facility will mature on June 7. Certain other mandatory prepayments of the term loan facility will be required upon the occurrence of specified events.75%. at a rate equal to LIBOR plus 3. the Company entered into an amendment to the Credit Agreement. including Broadcast Software International. which prior to the amendment. 2014. and reduced the preexisting revolving credit facility from $100. with Bank of America. 2010 (while maintaining a minimum balance of $7. The Company’s obligations under the Credit Agreement continue to be guaranteed by all of its subsidiaries. at the Company’s option. at the Company’s option. and the lenders party thereto.0 million through mandatory prepayments of Excess Cash Flow. as current.5 million.482 2009 Amendment On June 29.9 million immediately after closing the amendment.0 million. Borrowings under the term loan facility and revolving credit facility will bear interest. The Company has included approximately $47. The Credit Agreement maintains the preexisting term loan facility of $750. without limitation. as described below. a component of long term debt. Once the Company reduces the term loan facility by $50. was an excluded subsidiary. beginning in 2011. 2009 under the Credit Agreement.50%) plus 3. N. 2009 through and including December 31. 2010 (the “Covenant Suspension Period”) have been suspended.0 million to $20.75% or the Alternate Base Rate plus 2. which represents the estimated Excess Cash Flow payments over the next 12 months in accordance with the terms of the Credit Agreement. increasing 13 . depending on the Company’s leverage. which had an outstanding balance of approximately $647. before reverting to annual prepayments of a percentage of Excess Cash Flow. the Company must: (1) maintain minimum trailing twelve month consolidated EBITDA (as defined in the Credit Agreement) of $60. 2010. net of debt discount Less: Current portion of long−term debt $620.0%. 2012. 2009. intellectual property and all of the capital stock of the Company’s direct and indirect subsidiaries. In connection with the closing of the Credit Agreement. the Company made a voluntary prepayment in the amount of $32.5 million of cash on hand). the Company will bear interest.196) $566. 2009 $633.508 (49. The Company’s obligations under the Credit Agreement are collateralized by substantially all of its assets in which a security interest may lawfully be granted (including FCC licenses held by its subsidiaries).026) $584.0 million. 2010 and December 31. except as follows: • the total leverage ratio and fixed charge coverage ratio covenants for the fiscal quarters ending June 30. including upon the incurrence of certain additional indebtedness and upon the sale of certain assets.A.8 million. 2009 (dollars in thousands): March 31.921 (54.

2 million of unamortized 14 . the total leverage ratio was 8. 2019.20:1.0 million annually. any of the Company’s material FCC licenses.Table of Contents incrementally to $66. the total leverage ratio covenant will be 6. For the fiscal quarter ending March 31. permitted acquisitions and restricted payments. the lenders may terminate the loan commitments. the Company did not record a gain or a loss on the transaction.25 million shares of the Company’s Class A Common Stock. during the Covenant Suspension Period (after the Covenant Suspension Period. (a) the failure to pay when due the obligations owing under the credit facilities. certificate or financial statement delivered. 2010 were as follows: • a minimum trailing twelve month consolidated EBITDA of $60. respectively. and • the Company must provide monthly unaudited financial statements to the lenders within 30 days after each calendar−month end. (e) certain judgments against the Company or any of the Company’s subsidiaries. and • a limit on annual capital expenditures of $15. and (2) maintain minimum cash on hand (defined as unencumbered consolidated cash and cash equivalents) of at least $7. For the revolving credit facility. 2011 (the first quarter after the Covenant Suspension Period). the Credit Agreement will permit indebtedness. or make permitted acquisitions or restricted payments. If the Company had been unable to secure the June 2009 amendments to the Credit Agreement. liens. 2010 were $78. among others.17 per share and has an expiration date of June 29. At March 31. • • the Company is restricted from incurring additional intercompany debt or making any intercompany investments other than to the parties to the Credit Agreement. (g) any representation or warranty made. • a $7. Events of default in the Credit Agreement include. Upon the occurrence of an event of default. accelerate all loans and exercise any of their rights under the Credit Agreement and the ancillary loan documents as a secured property. Warrants Additionally.50:1 and the fixed charge coverage ratio covenant will be 1. subject to certain adjustments.0 million for fiscal quarter ended December 31. Accounting for the Modification of the Credit Agreement The amendment to the Credit Agreement was accounted for as a loan modification and accordingly. and • a minimum fixed charge coverage ratio of 1. and (h) the occurrence of a Change in Control (as defined in the Credit Agreement).0 million. the Company issued warrants to the lenders with the execution of the amended Credit Agreement that allow them to acquire up to 1.63:1. so that the total leverage ratio and the fixed charge coverage ratio covenants were still operative. 2010. or any material impairment in the ability to use of or more of. if applicable) certain covenants. the Company may not incur additional indebtedness or liens.5 million minimum cash on hand. (d) the occurrence of bankruptcy or insolvency events. those covenants for the fiscal quarter ended March 31. subject to certain leverage ratio and liquidity measurements). The trailing twelve month consolidated EBITDA and cash on hand at March 31. 2010. (c) cross default and cross acceleration. As discussed above. 2010 would have been as follows: • a maximum total leverage ratio of 6. to the lenders subsequently proven to have been incorrect in any material respect. or report.20:1. Each warrant is immediately exercisable to purchase the Company’s underlying Class A Common Stock at an exercise price of $1. (f) the loss. (b) the failure to perform (and not timely remedy.1 million and $15.00:1 and the fixed charge coverage ratio was 1. the Company wrote off approximately $0.50:1. the Company’s covenants for the fiscal quarter ended March 31.5 million. revocation or suspension of.0 million.

Table of Contents deferred financing costs. Dickey would retain the ability to achieve vesting on those shares of restricted stock if the revised performance criteria is achieved. 2013 if the Company achieves specified financial performance targets for the three year period ending December 31. 2010. In connection with evaluating the accounting treatment for the modification of the restricted shares. The Company determined that this out−of−period adjustment is not material to the condensed consolidated financial statements for the three month period ended March 31.25%. L. With respect to both debt instruments. the Company has disclosed basic and diluted earnings per common share utilizing the two−class method. 2010. the Company was in a net loss position and therefore did not allocate any loss to participating securities.0 million of fees paid directly to the creditors as a debt discount which are amortized as an adjustment to interest expense over the remaining term of the debt. or $3. Class B and Class C Common Stock on an equal basis as the Company’s charter provides that the holders of Class A. 2010 and 2009. however. As of March 31. In March 2010. based on the reduction of capacity.000 restricted time vested shares.8 million at fair value at inception. The Company classified the warrants as equity at $0. Earnings per Share For all periods presented. the Company recorded $3. The specified threshold was not achieved. L. L. the Company awarded Mr. to certain officers (other than Mr.3 million of the credit is related to the March 2010 modification of the vesting period associated with the performance based restricted share award that was issued in March 2007 to the Company’s Chief Executive Officer. the Company identified and recorded an additional $0. 2010. In addition. 7. with retroactive application to all prior periods presented. The vesting conditions for those restricted shares required that the Company achieve specified financial performance targets for the three−year period ending December 31. 2012. Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Mr.000 performance−based shares of restricted stock awarded to Mr. The two−class method of computing earnings per share is required for companies with participating securities. The fair value on the date of grant for both of these awards was $1. Dickey) of the Company. Dickey’s 2007 performance−based restricted stock award of 160. Because the Company does not pay dividends.000 shares were amended to provide that those shares would vest in full on March 31. net income is allocated to common stock and participating securities to the extent that each security may share in earnings.000 restricted performance based shares and 160. the Company recorded a credit to non−cash stock compensation of approximately $0. the effective interest rate inclusive of the May 2005 Swap was approximately 6. Under this method. The fair value of the warrants was recorded as a debt discount and is amortized as an adjustment to interest expense over the remaining term of the debt using the effective interest method. Dickey 160. forecasted annual results for fiscal 2010 or any prior period financial statements.000 time vested restricted shares with a fair value on the date of grant of $0. For the three months ended March 31. the Compensation Committee of the Board of Directors reviewed the three−year performance criteria established in March 2007 for the 160. As of March 31. and the radio industry in particular. earnings 15 . 2010 the Company awarded 120.1 million. during the three months ended March 31. Stock Based Compensation During the three months ended March 31. prior to the effect of the May 2005 Swap. of which $0. 2007. L.65%. L. 2010. Dickey on March 1. the effective interest rate of the outstanding borrowings pursuant to the senior secured credit facilities was approximately 4.15 per share. 8. Class B and Class C Common Stock have equal rights and privileges except with respect to voting on certain matters.0 million. For the three months ended March 31. Effective as of March 1. L. 2009. The Company determined that it is appropriate to allocate undistributed net income between Class A. it would be appropriate to modify the performance requirements and extend the vesting period so that Mr. the Compensation Committee determined that in light of the unprecedented adverse developments in the economy in general. The Company has accounted for non−vested restricted stock as a participating security and used the two−class method of computing earnings per share as of January 1. Non−vested restricted shares of Class A common stock awarded contain non−forfeitable dividend rights and are therefore a participating security.4 million. 2010. Dickey.3 million credit to stock based compensation expense in the first quarter of 2010 to correct errors occurring in 2008 and 2009. the terms of Mr. 2010. as if all of the earnings for the period had been distributed. 2009.

01) Unvested restricted stock has no contractual obligation to absorb losses of the Company.456 — 40.456 $ (3. The Company has issued to key executives and employees shares of restricted stock and options to purchase shares of common stock as part of the Company’s stock incentive plans. the Company entered into an agreement with Nielsen pursuant to which Nielsen would rate certain of the Company’s radio markets as coverages for such markets until the Arbitron agreement expired in April 2009. respectively. and had a five−year agreement with Arbitron under which it received programming rating materials in a majority of its markets. The national advertising agency contract with Katz contains termination provisions that.01) 40.910 shares of restricted stock. The Company engages Katz Media Group.421 — 40. are equal. At March 31. the Company excluded warrants from the EPS calculations because including the warrants would be antidilutive. the following restricted stock and stock options to purchase the following classes of common stock were issued and outstanding: March 31. and such rollout was completed in 2009.274.Table of Contents allocated to each participating security and the common stock. Additionally. 2010 and 2009 (in thousands. 2008. except per share data).710. and Arbitron was paid in accordance with the agreement through April 2009. 2010 and 2009. 2010.290 shares and 2.421 $ (0. Commitments and Contingencies There are two radio station rating services available to the radio broadcast industry. Nielsen began efforts to roll out its rating service for 51 of the Company’s radio markets in January 2009.296) — $ (3. calculated based upon a formula set forth in the contract. for the three months ended March 31. options to purchase 925.296) 40. On November 7. 2010 and 2009.296) — $ (3. were outstanding but excluded from the EPS calculations. (“Katz”) as its national advertising sales agent.08) $ (0.456 $ (0.099 Options to purchase Class A Common Stock 925.895 shares of common stock.532.296) 40. however. The Company forfeited its obligation under the agreement with Arbitron as of December 31. Three Months Ended March 31.421 $ (0.710.08) $ $ (144) — (144) 40.290 9.099 shares and 1. 2008. For the three months ended March 31. 16 (2) . if exercised by the Company during the term of the contract. the Company has utilized Arbitron as its primary source of ratings information for its radio markets. Inc. 1. Traditionally. would obligate the Company to pay a termination fee to Katz. The following table sets forth the computation of basic and diluted income per share for the three months ended March 31. 2010 Restricted shares of Class A Common Stock 1. were outstanding but excluded from the EPS calculations because their effect would have been antidilutive. 2010 2009 Basic Earning Per Share Numerator: Undistributed net loss Participation rights of unvested restricted stock in undistributed earnings (1) Basic undistributed net loss — attributable to common shares Denominator: Denominator for basic loss per common share: Basic weighted average common shares outstanding Basic EPS — attributable to common shares Diluted Earnings Per Share: Numerator: Undistributed net loss Participation rights of unvested restricted stock in undistributed earnings (1) Basic undistributed net loss — attributable to common shares Denominator: Basic weighted average shares outstanding Effect of dilutive options (2) Diluted weighted average shares outstanding Diluted EPS — attributable to common shares (1) $ $ (144) — (144) $ (3. Therefore. respectively.

which will enable it to convert to and utilize digital broadcasting technology on 240 of its stations. U. (iv) failure to indemnity for necessary expenses and losses. In April 2009. Under the terms of the agreement. The Company is also a defendant from time to time in various other lawsuits. Qantum Communications (“Qantum”) filed a counterclaim in a foreclosure action the Company initiated in the Okaloosa County.Table of Contents In December 2004. Entercom Communications. Gap Broadcasting. The counterclaim did not specify the damages Qantum was seeking. The Company is cooperating with the Attorney General in this investigation. and. the Company received a request for information and documents from the FCC related to the Company’s sponsorship of identification policies and sponsorship identification practices at certain of its radio stations as requested by the FCC. 6:09−cv−170. Univision Communications. 2009). and sought a permanent injunction and unspecified damages. Brian Mas. The case. and Radio One. (iii) failure to provide accurate itemized wage statements. The Company is vigorously contesting all such matters and believes that their ultimate resolution will not have a material adverse effect on 17 . The Company’s action was designed to collect a debt owed to the Company by Star Broadcasting. if any. alleged that the defendants have infringed and continue to infringe plaintiff’s patented content replacement technology in the context of radio station streaming over the Internet. In May 2007. Citadel Broadcasting. Civil Action No. Regent Communications. The Company settled this suit in March 2010. the Company purchased 240 perpetual licenses from iBiquity Digital Corporation.7 million in compensatory damages. which then owned radio station WTKE−FM in Holt.. Saga Communications. 2010. On January 21. In its counterclaim. and (v) unfair trade practices under California’s Unfair Competition Act. Qantum alleged that the Company tortiously interfered with Qantum’s contract to acquire radio station WTKE from Star by entering into an agreement to buy WTKE after Star had represented to the Company that its contract with Qantum had been terminated (and that Star was therefore free to enter into the new agreement with the Company). On December 11. The Company is cooperating with the FCC in this investigation and is in the process of producing documents and other information requested by the FCC. if the court were to find that the Company did tortiously interfere with Qantum’s contract and that Quantum is entitled to the compensatory damages estimated by its expert as well as punitive damages. The Company negotiated an amendment to the Company’s agreement with iBiquity to reduce the number of planned conversions commissions. and increase the license fees for each converted station. The Company continues to believe that Quantum’s counterclaim against the Company has no merit. Clear Channel Communications. In August 2005. Inc. Cox Radio. The Company has not yet determined what effect the inquiry will have. However.08 million and $0. the Company has denied the allegations and is vigorously defending against the counterclaim. and seeks to represent other California employees fulfilling the same job during the immediately preceding four year period. the Company committed to convert the 240 stations over a seven year period. The plaintiff is requesting restitution. District Court for the Eastern District of Texas. the court authorized Qantum to seek punitive damages because it had satisfied the minimal threshold for asserting such a claim. a former employee of Susquehanna Radio Corp. Florida.S. penalties and injunctive relief. Qantum provided the Company with an expert’s report that estimated that Qantum had allegedly incurred approximately $8. the result could have a material adverse effect on the Company’s overall financial condition or results of operations.. et al. filed a purported class action lawsuit against the Company claiming (i) unlawful failure to pay required overtime wages.15 million per station converted. In June 2009. The Company is vigorously defending this lawsuit. as were other radio broadcasting companies. The Company did not and does not believe that the counterclaim has merit. which are generally incidental to its business. because there was no specification of damages. the Company was subpoenaed by the Office of the Attorney General of the State of New York. the Company was named in a patent infringement suit brought against the Company as well as twelve other radio companies. LLC v. 2008. (ii) late pay and waiting time penalties. (“Star”). The conversion of original stations to the digital technology will require an investment in certain capital equipment over the next six years. including Clear Channel. In August 2009. The Company’s liability would be increased if Qantum is able to secure punitive damages as well. captioned Aldav. in connection with the New York Attorney General’s investigation of promotional practices related to record companies’ dealings with radio stations broadcasting in New York. Inc. Florida Circuit Court. Management estimates its investment will be between $0. the Company did not believe at the time that the counterclaim would have a material adverse effect on the Company’s overall financial condition or results of operations even if the court were to determine that the claim did have merit. Tyler Division (filed April 16. CBS Radio. results of operations or cash flows. on its financial position. extend the build−out schedule.

(“CRI”). Crestview will lead an investor group that would invest up to $500. 10. 11. results of operations or cash flows. Together with debt financing expected to be available through the capital markets. See Note 5. the Company was required to secure the maximum exposure generated by automated clearing house transactions in its operating bank accounts as dictated by the Company’s bank’s internal policies with cash. the Company’s balance sheet included approximately $0. to be called Cumulus Radio Investors. in management’s opinion. As of March 31.0 million in equity in the partnership. As of March 31. is likely to have a material adverse effect. Additionally. CRI could target acquisitions totaling in excess of $1 billion. 12. 2010. announced the formation of a strategic investment partnership that will seek to invest in radio broadcasting companies that present attractive opportunities for significant long−term capital appreciation. Subsequent Event On April 7. Under the terms of the partnership. Restricted Cash During 2009. a $4. This action was triggered by an adverse rating as determined by the Company’s bank’s rating system. “Investment in Affiliate” for further discussion.6 million in restricted cash related to the automated clearing house transactions. The Company is not a party to any lawsuit or proceeding that. The Company cannot make unilateral management decisions affecting the long−term operational results of CMP. nor is it under any contractual obligation to fund losses of CMP. The Company would provide all management. 18 .0 billion private equity firm with a strong media focus. The Company has not provided and does not intend to provide any financial support. This had no impact to the quarter ended March 31. one of the other equity holders has the unilateral right to remove the Company as manager of CMP with 30 days notice. 2010.P. guarantees or commitments for or on behalf of CMP. therefore the Company has no exposure to loss as a result of its involvement with CMP as its investment has been written down to zero. 2010. As such. the Company’s balance sheet at March 31. the Company concluded that this ability to unilaterally terminate CMP’s management agreement with the Company resulted in a substantive “kick out” right. The Company will be compensated through management fees as well as incentive compensation based on investment returns. These funds were moved to a segregated bank account that does not zero balance daily. 2010. as all such decisions require approval by the CMP board of directors. L.Table of Contents its consolidated financial position. the Company and Crestview Partners. thereby precluding the Company from being designated as the primary beneficiary with respect to its variable interest in CMP. operational and corporate services to the partnership and its operations pursuant to a management services agreement. Variable Interest Entities The Company has an investment in CMP which it accounts for using the equity method and which the Company has determined to be a VIE that is not subject to consolidation because the Company is not deemed to be the primary beneficiary. financial. Additionally. the Company’s proportionate share of its affiliate losses exceeded its investment in CMP. 2010 does not include any assets or liabilities related to its variable interest in CMP.

deferral of capital expenditures. The number of advertisements that can be broadcast without jeopardizing listening levels and the resulting ratings is limited in part by the format of a particular station. our inability to renew one or more of our broadcast licenses.6% of our total revenues during the three months ended March 31. and development of commercial radio stations in mid−size radio markets in the United States. 2011. Our stations strive to maximize revenue by managing their on−air inventory of advertising time and adjusting prices based upon local market conditions.65%. risks and uncertainties relating to the need for additional funds. management. As of March 31. as well as various other sections of this quarterly report. operation. the impact of general economic conditions in the United States or in specific markets in which we currently do business. based upon actions we have already taken. belief or current expectations of our officers primarily with respect to our future operating performance. trade revenue totaled $3.8 million and $2. Actual results may differ from those in the forward−looking statements as a result of various factors. the effective interest rate on the borrowings pursuant to the credit facility was approximately 4. and (iv) continued scrutiny of all operating expenses.25%. was 6. 2010. management and consulting agreements to twelve additional stations. The unexpected occurrence of any such factors would significantly alter the results set forth in these statements.5% in 2009. including the effects of our derivative positions. our ability to eliminate certain costs. 2010 and 2009. regional and national advertisers and the advertising rates charged by our radio stations. Because audience ratings in local markets are crucial to a station’s financial success. and consulting agreements. (ii) employee reductions of 16. In the broadcasting industry.3 million. We generate most of our revenue from local and regional advertising. (iii) the sales initiative implemented during the first quarter of 2009. industry conditions. we expect our first calendar quarter will produce the lowest revenues for the year as advertising generally declines following the winter holidays. contains statements that constitute “forward−looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. including advertising on our radio stations.Table of Contents Item 2. 2010. along with three private equity firms. including existing competition and future competitive technologies and cancellation. we owned or operated 345 stations in 67 United States markets and provided sales and marketing services under local marketing. Liquidity Considerations We believe that we will continue to be in compliance with all of our debt covenants through at least March 31. We will continue to monitor our revenues and cost structure closely and if revenues do not exceed forecasted growth or if we exceed our planned spending. we are the second largest radio broadcasting company in the United States based on number of stations and believe we are the fourth largest radio broadcasting company based on net revenues. In consideration of current and projected market conditions. Our revenues vary throughout the year. 2010 and 2009. Management’s Discussion and Analysis of Financial Condition and Results of Operations General The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report. As a result of our investment in CMP and the acquisition of Susquehanna’s radio operations. radio stations sometimes utilize trade or barter agreements that exchange advertising time for goods or services such as travel or lodging. consummation of our pending acquisitions. respectively. integration of acquisitions. our average cost of debt. we. which included: (i) the amendment to the Credit Agreement. As is typical in the radio broadcasting industry. The economic crisis in 2009 has reduced demand for advertising in general. directly and through our investment in CMP. Advertising demand and rates are based primarily on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. which acquired the radio broadcasting business of Susquehanna in May 2006. Advertising Revenue and Station Operating Income Our primary source of revenues is the sale of advertising time on our radio stations. instead of for cash. and sales of non−strategic assets. we endeavor to develop strong listener loyalty. As of March 31.9% and 89. Such statements relate to the intent. Overview We engage in the acquisition. This discussion. further renegotiation of major vendor contracts. formed CMP. FCC and government approval of pending acquisitions. changing consumer tastes. and the second and fourth 19 . The actions may include the implementation of additional operational efficiencies. as measured principally by various ratings agencies on a periodic basis. This discussion identifies important factors that could cause such differences. the popularity of radio as a broadcasting and advertising medium. We remain committed to maintaining manageable debt levels. Our sales of advertising time are primarily affected by the demand for advertising time from local. the management of rapid growth. which we believe has contributed to increased advertising revenues by virtue of re−engineering our sales techniques through enhanced training of our sales force. The following discussion of our financial condition and results of operations includes the results of acquisitions and local marketing. we may take further actions as needed in an attempt to maintain compliance with our debt covenants under the Credit Agreement. which is sold primarily by a station’s sales staff. disruptions or postponements of advertising schedules in response to national or world events. Our advertising contracts are generally short−term. Local advertising represented approximately 90. In the three months ended March 31. generally two or four times per year. Any such forward−looking statements are not guarantees of future performance and may involve risks and uncertainties. Many of these risks and uncertainties are beyond our control. In addition. including but not limited to. which will continue to improve our ability to generate cash flow from operations. 2010. we expect that overall advertising revenues will have modest growth in certain categories throughout the remainder of 2010. As of March 31. We believe that the diversification of formats on our stations helps to insulate them from the effects of changes in the musical tastes of the public with respect to any particular format. changes in interest rates. the purpose of which was to provide certain covenant relief in 2009 and 2010.

737) 3 858 $ (3. amortization and LMA fees) Depreciation and amortization LMA fees Corporate general and administrative (including non−cash stock compensation expense) Realized loss on derivative instrument Operating income Interest expense. programming expenses. Station Operating Income should not be considered in isolation or as a substitute for net income. The following analysis of selected data from our unaudited condensed consolidated statements of operations and other supplementary data should be referred to while reading the results of operations discussion that follows (dollars in thousands): For the Three Months Ended March 31. See the quantitative reconciliation of Station Operating Income to the most directly comparable financial measure calculated and presented in accordance with GAAP.9% ** 82. Results of Operations Analysis of Unaudited Condensed Consolidated Statements of Operations.517 529 4.092) (56) (856) $ 3.358 39. cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with GAAP.152 $ 3. Station Operating Income consists of operating income before depreciation and amortization. below under “Station Operating Income”.005 (2.829) (53) 2 (144) $ 55. along with a quantitative reconciliation of Station Operating Income to its most directly comparable financial measure calculated and presented in accordance with GAAP. technical expenses.6% 25.1% −1866. net Income tax benefit Net loss OTHER DATA: Station Operating Income (1) Station Operating Income margin (2) Cash flows related to: Operating activities Investing activities Financing activities Capital expenditures ** (1) $ $ 56.898 469 6.377 ** $ 5.156 (1.1% 12.055 23.042) 584 5. Station Operating Income margin is defined as Station Operating Income as a percentage of net revenues. See management’s explanation of this measure and the reasons for its use and presentation.580 (7. net Other (expense) income. Station Operating Income is not a measure of performance calculated in accordance with GAAP. The performance of radio station groups.6% $ 6.0% 14. the mark to market fair value adjustment of the Green Bay Option.372) (381) 60 (2.632 (809) (13.8% −33.7% −99.Table of Contents calendar quarters will generally produce the highest revenues for the year.066 584 8.949) (777) 2010 vs 2009 $ Change % Change $ 1. if at all. advertising and promotional expenditures. operating income (loss). Our most significant station operating expenses are employee salaries and commissions. which follows in this section.353 42. and general and administrative expenses. LMA fees.031 346 1.4% −44. 20 (2) .095 (451) (12.2% $ 12.918) (431) Calculation is not meaningful.463 358 1.4% ** 144.8% −5.8% −95.4% −44. is customarily measured by the ability to generate Station Operating Income.108 — 3. and non−cash stock compensation.5% $ 16. 2010 2009 STATEMENT OF OPERATIONS DATA: Net revenues Station operating expenses (excluding depreciation.6% −13.3% −7. corporate general and administrative expenses.432 29.298 2. Our operating results in any period may be affected by the incurrence of advertising and promotion expenses that typically do not have an effect on revenue generation until future periods.296) $ 13. We strive to control these expenses by working closely with local market management.736 (8. such as ours.926 2.

115 2. 2010. we recorded a charge of $0. to $4. 2010 decreased $2.6%.0% 7.045) 24 44 $ 1.1 million compared to $6.8 million compared to $7.3 million for the three months ended March 31. primarily due to an increase in political revenue generated by mid−term congressional elections and an increase in revenue from national accounts. Depreciation and amortization for the three months ended March 31. Michigan.4 million compared to $55. LMA Fees.Table of Contents Three Months Ended March 31. resulting from a decrease in our asset base due to assets becoming fully depreciated coupled with a decrease in capital expenditures. Interest Expense. Iowa.1 million.563 1. including non−cash stock compensation expense for the first quarter of 2010 decreased $2.8%. to $8.739 (1. 2010 versus the Three Months Ended March 31. we will implement them in an attempt to remain compliant with current and future covenant requirements. compared to $2.678 3. General and Administrative Expenses Including Non−cash Stock Compensation.9 million.4 million.0 million.3% 58. or 14.1 million in the prior year’s period.4 million. 2009. 2009 Net Revenues. and Battle Creek. primarily due to a decrease in corporate expenses associated with our cost containment initiatives including a reduction in salary expense. 2010 increased $1. We believe that advertising revenue in our markets will have modest growth in certain categories throughout the remainder of 2010. Depreciation and Amortization. Interest expense.2 million of debt compared to the same period in the prior year. or 33.5 million for both the three months ended March 31. 2010 2009 Bank Borrowings — term loan and revolving credit facilities Bank Borrowings yield adjustment — interest rate swap Change in fair value of interest rate swap agreement Change in fair value of interest rate option agreement Other interest expense Interest income Interest expense.9 million for the three months ended March 31.7% 14. or 1.363 (3. Realized Loss on Derivative Instrument. primarily due to our continued efforts to contain operating costs and continued scrutiny of operating expenses. primarily due to an increase in interest rates. or 13.092 62.5 million.1%. LMA fees totaled $0.829 21 $ 4.9% −95. The following summary details the components of our interest expense. Station operating expenses for the three months ended March 31. net of interest income (dollars in thousands): For the Three Months Ended March 31. Corporate expenses. to $39.1%. as well as a decrease in professional fees associated with our defense of certain lawsuits that were subsequently settled in 2009. We entered into the Green Bay Option in conjunction with an asset exchange in the second quarter of 2009. for the three months ended March 31. Corporate. net. Station Operating Expenses. 2009. We believe two areas of potentially strong growth for radio advertising in 2010 could be cyclical political advertising and automotive advertising fueled by a general recovery in that sector. net $ 6. 2010 increased $1. 2010 decreased $0. During the three months ended March 31. 2009. to $56. there is no amount related to the Green Bay Option recorded in the accompanying statements of operations for the three months ended March 31. Ann Arbor.0 million.737 2010 vs 2009 $ Change % Change $ 2. Michigan. LMA fees in the current year were comprised primarily of fees associated with stations operated under LMAs in Cedar Rapids. Excluding Depreciation.043) 4. compared to $42.045 303 (46) $ 7. or 5. Green Bay.1% −100.2% −37.7 million as compared to $4. partially offset by a decrease in the borrowing base due to the repayment of approximately $58.6 million related to our recording of the fair market value of the Green Bay Option. We will continue to monitor all our operating costs and to the extent we are able to identify any additional cost saving measures.1% .6 million to $6.376 1.913) — 327 (2) $ 8.1 million in 2009.4%. Net revenues for the three months ended March 31. 2009. net of interest income.4 million for the three months ended March 31. to $2. therefore. Amortization and LMA Fees. The Green Bay Option liability increased primarily due to the continued decline in associated market operating results. Interest expense associated with outstanding debt increased by $2.7 million for the three months ended March 31. Wisconsin. 2009. 2010 and 2009.130 (4.

As a result. Our management uses the measure to assess the performance of our station managers and our Board of Directors uses it as part of its assessment of the relative performance of our executive management. in each of the more than 140 radio station acquisitions we have completed since our inception. we believe. cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with GAAP. tax payments and debt service requirements. we have used Station Operating Income as our primary metric to evaluate and negotiate the purchase price to be paid. corporate general and administrative expenses. operating income (loss). We believe that Station Operating Income is the most commonly used financial measure employed by the investment community to compare the performance of radio station operators. which are not amortized for book purposes. Finally. Moreover. 2010. in disclosing Station Operating Income. as it does not consider certain cash requirements such as interest payments. and our experience indicates.3 million. As a result of the factors described above. Further. We believe this is important to our investors because it highlights the gross margin generated by our station portfolio. including the Green Bay Option mark to market. Finally. due to the insignificance and temporary nature of such fees. We exclude depreciation and amortization due to the insignificant investment in tangible assets required to operate our stations and the relatively insignificant amount of intangible assets subject to amortization. dollars in thousands): 22 .Table of Contents Income Tax Benefit. Given its relevance to the estimated value of a radio station.1 million for the three months ended March 31. reinvestment in our business or other Company discretionary use.9%. and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Station Operating Income consists of operating income before depreciation and amortization. 2009. these presentations of Station Operating Income may not be comparable to other similarly titled measures of other companies. Reconciliation of Non−GAAP Financial Measure. The following table reconciles Station Operating Income to operating income as presented in the accompanying condensed consolidated statements of operations (the most directly comparable financial measure calculated and presented in accordance with GAAP.0 million for the three months ended March 31. LMA fees.4 million compared to $13. to $16. Station Operating Income. We compensate for the limitations of using Station Operating Income by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone. or 25.9 million for the three months ended March 31. Station Operating Income is not a recognized term under GAAP and does not purport to be an alternative to operating income from continuing operations as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. compared to $0. and non−cash stock compensation. we are providing our investors with an analysis of our performance that is consistent with that which is utilized by our management and our Board. Station Operating Income should not be considered in isolation or as a substitute for net income. We exclude LMA fees from this measure. even though it requires a cash commitment. The income tax benefit in the current period is primarily due to the amortization of certain intangible assets for tax purposes. Station Operating Income for the three months ended March 31. Additionally. 2009. Station Operating Income should be viewed as a supplement to. we exclude the Green Bay Option mark to market and non−cash stock compensation from the measure as they do not represent cash payments for activities related to the operation of the stations. We have observed that Station Operating Income is commonly employed by firms that provide appraisal services to the broadcasting industry in valuing radio stations. We believe that Station Operating Income is the most frequently used financial measure in determining the market value of a radio station or group of stations. Corporate expenses. We recorded a tax benefit of $0. Station Operating Income has its limitations as an analytical tool. are excluded in an effort to present the operating performance of our stations exclusive of the corporate resources employed. results of operations presented on the basis of GAAP. despite representing an additional significant cash commitment. and not a substitute for. that investors consider the measure to be useful in order to determine the value of our portfolio of stations. Station Operating Income is not intended to be a measure of free cash flow available for dividends. Station Operating Income is one of the measures that our management uses to evaluate the performance and results of our stations. because not all companies use identical calculations. 2010 increased $3.

432 $ 3. and interest and debt service payments.898 469 592 5. In December 2004. Therefore.8% −117.167 584 $16.156 (381) 60 (693) (1. will be sufficient to satisfy our anticipated financing needs for working capital. Our principal sources of funds for these requirements have been cash flow from operations and borrowings under our senior secured credit facilities. demographics or.Table of Contents For the Three Months Ended March 31.580 2. We believe we will continue to be in compliance with all of our debt covenants through at least March 31. In addition. that cash on hand and cash expected to be generated from operating activities and. customers may not be able to pay. audience tastes. However. Consideration of Recent Economic Developments The economic crisis in 2009 has reduced demand for advertising in general. capital expenditures. that may be necessary to meet our future capital needs. Funding needs on a long−term basis will include capital expenditures associated with maintaining our station and corporate operations.736 2. In response to these conditions. While preparing our 2010 business plan.055 2010 vs 2009 $ Change % Change $ 5. we have forecasted maintaining cost reductions achieved in 2009 with no significant increases in 2010. 2009. repurchases of our Class A Common Stock. Management has taken steps to mitigate this risk through heightened collection efforts and enhancements to our credit approval process. which will enable us to convert to and utilize iBiquity’s HD Radio tm technology on up to 240 of our stations.377 144. further financing activities. 2010 2009 Operating income Depreciation and amortization LMA fees Non−cash stock compensation Corporate general and administrative Realized loss on derivative instrument Station Operating Income $ 8.5 million of cash on hand. while maintaining a minimum balance of $7. as well as the incremental cost that would be required to potentially amend the terms of the Credit Agreement. 2011. In addition. On March 5.0% −13.15 million.9% Liquidity and Capital Resources Historically. our principal need for funds has been to fund the acquisition of radio stations. including consideration of market uncertainties. we expect that overall advertising revenues will have modest growth in certain categories throughout the remainder of 2010.349) 584 $ 3. and increase the license fees to be paid for each converted station. We anticipate that the average cost to convert each station will be between $0. borrowings under our senior secured credit facilities are subject to financial covenants that can restrict our financial flexibility. pursuant to the June 2009 amendment to the Credit Agreement. station listenership. as well as through additional paydowns of debt we will be required to make during 2010 23 . We have assessed the implications of these factors on our current business and determined. based on our financial condition as of March 31. capital expenditures. Our cash flow from operations is subject to such factors as shifts in population. we entered into an amendment to our agreement with iBiquity to reduce the number of planned conversions.517 529 (101) 4. implementing HD Radiotm technology and potential future acquisitions.5% ** 25.1% −24. In consideration of current and projected market conditions. if necessary. As discussed further below. 2010. and on the timetable. our ability to obtain additional equity or debt financing is also subject to market conditions and operating performance. we are required to repay 100% of Excess Cash Flow (as defined in the Credit Agreement) on a quarterly basis beginning September 30. we purchased 240 perpetual licenses from iBiquity. pending litigation and the impact of the current economic environment. extend the build−out schedule.516 — $13. interest and debt service payments and potential acquisitions and repurchases of securities and other debt obligations through March 31. given the uncertainty of our markets’ cash flows.08 million and $0. Further. and fluctuations in preferred advertising media. we assessed the impact of the current year market developments in a variety of areas. Under the terms of our original agreement with iBiquity. 2011 based upon actions we have already taken. 2010. 2009 through December 31.1% 12. we assessed future covenant compliance under the Credit Agreement. in conjunction with the development of the 2010 business plan. including advertising on our radio stations. expenses associated with our station and corporate operations. or may delay payment of accounts receivable that are owed to us. we agreed to convert certain of our stations over a seven−year period. including our forecasted advertising revenues and liquidity. there can be no assurance that cash generated from operations will be sufficient or financing will be available at terms.

including Broadcast Software International. Cash Flows used in Investing Activities For the three months ended March 31. 2009. particularly when compared to groups with similar market sizes and portfolio composition. Amended Credit Agreement 2009 Amendment We experienced revenue declines in late 2008 and throughout 2009 in line with macro industry trends and consistent with our radio peer group. The Credit Agreement maintains the preexisting term loan facility of $750.5 million increase in accounts payable and accrued expenses related to the timing of certain payments. If our revenues were to be significantly less than planned due to difficult market conditions or for other reasons.9 million immediately after closing the amendment. such as the implementation of further cost abatement initiatives. 2010.8 million for the three months ended March 31.5 million to $12. 2010. 2010. As an additional measure. even with these cost containment initiatives in place. However. our working capital was $(32. net cash provided by operating activities increased $5.0 million to $12. The increase is primarily attributable to a $6. further financing activities. that cash on hand and cash expected to be generated from operating activities and.5 million from net cash used in investing activities of $0.1 million from net cash provided by operating activities of $6. and reduced the preexisting revolving credit facility from $100. including. Our obligations under the Credit Agreement are collateralized by substantially all of our assets in which a security interest may lawfully be granted (including FCC licenses held by its subsidiaries). intellectual property and all of the capital stock of our direct and indirect subsidiaries. which had an outstanding balance of approximately $647.9 million. 2014. The Credit Agreement contains terms and conditions customary for financing arrangements of this nature. net cash used in investing activities decreased $0. Our obligations under the Credit Agreement continue to be guaranteed by all of our subsidiaries. The term loan facility will mature on June 11. Further discussion of our debt covenant compliance considerations is included below. our rapidly deteriorating revenue outlook left uncertainty as to whether we would be able to maintain compliance with the covenants in the then−existing Credit Agreement. The revolving credit facility will mature on June 7. 2010 and 2009. Cash Flows from Operating Activities For the three months ended March 31. Incremental facilities are no longer permitted as of June 30. 2012.4) million and $56. will be sufficient to satisfy our anticipated working capital needs including short−term debt service payments. which relief could result in higher interest expense or other fees or costs. 24 .0 million.0 million to $20. Under these circumstances.6 million for the three months ended March 31. our ability to maintain compliance with the financial covenants in our credit agreements would become increasingly difficult without remedial measures. respectively.. Inc. based on our financial condition as of March 31. in early 2009 we engaged in an aggressive cost cutting campaign across all of our stations and at corporate headquarters as well. 2009.3 million decrease in capital expenditures.9 million compared to net cash used in financing activities of $13. 2009.0 million. The decrease is primarily due to repayments of borrowings outstanding under our credit facilities. Failure to comply with our financial covenants or other terms of our credit agreements and failure to negotiate relief from our lenders could result in the acceleration of the maturity of all outstanding debt. Cash Flows used in Financing Activities For the three months ended March 31. was an excluded subsidiary. in June 2009 we obtained an amendment to the Credit Agreement that. which prior to the amendment. We have assessed the implications of the working capital deficiency on our current business and determined.Table of Contents from existing cash balances and cash flow generated from operations. If our remedial measures were not successful in maintaining covenant compliance.3 million to $0. then we would need to negotiate with our lenders for relief. net cash used in financing activities decreased $1. In anticipation of significant revenue declines and in an attempt to mitigate the effect of these declines on profitability. if necessary. 2010. without limitation. The decrease is primarily due to a $0. For the three months ended March 31. the acceleration of our debt could have a material adverse effect on our business.9 million during the three months ended March 31. 2009 under the Credit Agreement. temporarily suspended certain financial covenants. as further described below. among other things.

we made a voluntary prepayment in the amount of $32.0 million. (c) cross default and cross acceleration. including upon the incurrence of certain additional indebtedness and upon the sale of certain assets. (e) certain judgments against us or any of our subsidiaries.0 million through mandatory prepayments of Excess Cash Flow (as defined in the Credit Agreement). Covenants The representations. Certain other mandatory prepayments of the term loan facility will be required upon the occurrence of specified events. Once we reduce the term loan facility by $50. 2010. before reverting to annual prepayments of a percentage of Excess Cash Flow. borrowings will bear interest.5 million.50%) plus 3. • we are restricted from incurring additional intercompany debt or making any intercompany investments other than to the parties to the Credit Agreement. as described below.25%. borrowings will bear interest.0 million through mandatory prepayments of Excess Cash Flow.0 million.00% or the Alternate Base Rate (defined as the higher of the Bank of America. As discussed above. at our option. N. we must: (1) maintain minimum trailing twelve month consolidated EBITDA (as defined in the Credit Agreement) of $60. 25 .75% or the Alternate Base Rate plus 2.0 million for fiscal quarters through March 31.75%. and • a limit on annual capital expenditures of $15.A. permitted acquisitions and restricted payments. We also are required to make quarterly mandatory prepayments of 100% of Excess Cash Flow through December 31. the lenders may terminate the loan commitments. covenants and events of default in the Credit Agreement are customary for financing transactions of this nature and are substantially the same as those in existence prior to the amendment. 2010. were as follows: • a minimum trailing twelve month consolidated EBITDA of $60. beginning in 2011. if applicable) certain covenants. (g) any representation or warranty made. (b) the failure to perform (and not timely remedy. and (2) maintain minimum cash on hand (defined as unencumbered consolidated cash and cash equivalents) of at least $7.1 million and $15. and • we must provide monthly unaudited financial statements to the lenders within 30 days after each calendar−month end. as described below. subject to certain leverage ratio and liquidity measurements).0 million for fiscal quarter ended December 31. Events of default in the Credit Agreement include. The trailing twelve month consolidated EBITDA and cash on hand for the fiscal quarter ended March 31. (f) the loss. (a) the failure to pay when due the obligations owing under the credit facilities. at the our option.25% or the Alternate Base Rate plus 2. or any material impairment in the ability to use of or more of. 2009 through and including December 31. • we may not incur additional indebtedness or liens. revocation or suspension of. or report. 2010. among others. In connection with the closing of the Credit Agreement. increasing incrementally to $66. liens. at a rate equal to LIBOR plus 4. at a rate equal to LIBOR plus 3. • during the Covenant Suspension Period. certificate or financial statement delivered. and (h) the occurrence of a Change in Control (as defined in the Credit Agreement). 2010. 2010 (the “Covenant Suspension Period”) have been suspended. Upon the occurrence of an event of default.00%. Prime Rate and the Federal Funds rate plus 0. at our option. or make permitted acquisitions or restricted payments. our covenants for the fiscal quarter ended March 31. any of our material FCC licenses. at a rate equal to LIBOR plus 3. respectively. during the Covenant Suspension Period (after the Covenant Suspension Period. depending on our leverage. (d) the occurrence of bankruptcy or insolvency events. subject to certain adjustments. to the lenders subsequently proven to have been incorrect in any material respect. the Credit Agreement will permit indebtedness.0 million annually. were $78.5 million minimum cash on hand. accelerate all loans and exercise any of their rights under the Credit Agreement and the ancillary loan documents as a secured party. • a $7. 2010.Table of Contents Borrowings under the term loan facility and revolving credit facility will bear interest. except as follows: • the total leverage ratio and fixed charge coverage ratio covenants for the fiscal quarters ending June 30.5 million. Once we reduce the term loan facility by $25.

As part of our efforts to mitigate interest rate risk. If we were unable to obtain a waiver or an amendment to the Credit Agreement in the event of a debt covenant violation. For the fiscal quarter ending March 31. we also entered into an interest rate option agreement (the “May 2005 Option”) that provided Bank of America.50:1 and the fixed charge coverage ratio covenant will be 1. Warrants We issued warrants to the lenders in connection with the execution of the amendment to the Credit Agreement which allow the holders to acquire up to 1. We have pledged substantially all of our assets as collateral under the Credit Agreement. 2011 (the first quarter after the Covenant Suspension Period).1 million of borrowings outstanding at March 31. based on LIBOR.65%. Quantitative and Qualitative Disclosures about Market Risk At March 31. including FCC licensing.A.63:1. we would need to seek a waiver or amendment to the Credit Agreement and no assurances can be given that we will be able to do so. 2019.8 million at fair value at inception. the lenders under the credit facilities could proceed against the collateral granted to them to secure that indebtedness. 2010. such that the original total leverage ratio and the fixed charge coverage ratio covenants were still operative.5:1. we may be forced to liquidate certain assets to repay all or part of the senior secured credit facilities. we did not record a gain or a loss on the transaction. the total leverage ratio covenant will be 6.Table of Contents If we had been unable to obtain the June 2009 amendments to the Credit Agreement. 2010. and • a minimum fixed charge coverage ratio of 1. the right to enter into an underlying swap agreement with us.17 per share and has an expiration date of June 29. our earnings and after−tax cash flow are affected by changes in interest rates. for two years. For the revolving credit facility.20:1. If the lenders accelerate the maturity of outstanding debt. from March 13.0 million of fees paid directly to the lenders as a debt discount which are amortized as an adjustment to interest expense over the remaining term of the debt. Each warrant is immediately exercisable to purchase our underlying Class A Common Stock at an exercise price of $1. 2010. Accounting for the Modification of the Credit Agreement The amendment to the Credit Agreement was accounted for as a loan modification and accordingly. At March 31. 2009 (the end of the term of the May 2005 Swap) through March 13. As of March 31. The fair value of the warrants was recorded as a debt discount and is amortized as an adjustment to interest expense over the remaining term of the debt using the effective interest method. 2010. 2010. As of March 31. we entered into a forward−starting (effective March 2006) LIBOR−based interest rate swap agreement that effectively fixed the interest rate. would have been as follows: • a maximum total leverage ratio of 6.25%. and we cannot be assured that sufficient assets will remain after we have paid all of the debt.6 million for the three months ended March 31. those covenants at March 31. which could have a material adverse impact on our financial position. If we are unable to comply with our debt covenants.2 million of unamortized deferred financing costs. the total leverage ratio was 8. The May 2005 Option was exercised on March 11. With respect to both debt instruments. based on the reduction of capacity. on terms substantially identical to the May 2005 Swap. the effective interest rate of the outstanding borrowings pursuant to the senior secured credit facilities was approximately 4. which may make the market for these assets less liquid and increase the chances that these assets will be liquidated at a significant loss.20:1. Segregating the $224. This instrument is intended to reduce our exposure to interest rate fluctuations and was not entered into for speculative purposes. 2009. We classified the warrants as equity at $0. 35. Accordingly. 2010. Assuming the current level of borrowings at variable rates and assuming a one percentage point change in the average interest rate under these borrowings. in May 2005. prior to the effect of the forward−starting LIBOR based interest rate swap arrangement entered into in May 2005 (“May 2005 Swap”). it is estimated that our interest expense and net income would have changed by $1. 2010 that are not subject to the interest rate swap and 26 . In May 2005. on $400. we wrote off approximately $0. we would be in default under the Credit Agreement.0 million of our current floating rate bank borrowings for a three−year period. If we were unable to repay our debts when due. 2011. Item 3.9% of our long−term debt bears interest at variable rates. N.00:1 and the fixed charge coverage ratio was 1. the effective interest rate inclusive of the May 2005 Swap was approximately 6. we recorded $3. The ability to liquidate assets is affected by the regulatory restrictions associated with radio stations.25 million shares of our Class A Common Stock.

PART II. of the effectiveness of the design and operation of our disclosure controls and procedures. in addition to the interest rate swap agreement discussed above. In addition to the above proceedings and those previously disclosed in our annual report on Form 10−K for the year ended December 31. In the event of an adverse change in interest rates. we received a request for information and documents from the FCC related to our sponsorship of identification policies and sponsorship identification practices at certain of our radio stations as requested by the FCC. as were other radio broadcasting companies. President and Chief Executive Officer (“CEO”) and Senior Vice President and Chief Financial Officer (“CFO”). Univision Communications. in connection with the New York Attorney General’s investigation of promotional practices related to record companies’ dealings with radio stations broadcasting in New York. including our Chairman. based upon currently available facts. LLC v. to allow timely decisions regarding required disclosure. The parties settled this suit in March 2010. from time to time we are involved in various other legal proceedings that are handled and defended in the ordinary course of business. In April 2009. captioned Aldav. Further. Cox Radio. it is estimated that our interest expense and net income would have changed by $0. as amended. additional analysis is not possible at this time. Legal Proceedings As previously disclosed. including Clear Channel. Regent Communications. 2009. Entercom Communications.. There were no changes to our internal control over financial reporting during the fiscal quarter ended March 31. District Court for the Eastern District of Texas. the Company was named in a patent infringement suit brought against the Company as well as twelve other radio companies. the CEO and CFO have concluded our disclosure controls and procedures were effective as of March 31. Item 1A.6 million for the three months ended March 31. Civil Action No. Controls and Procedures We maintain a set of disclosure controls and procedures (as defined in Rules 13a−15(e) and 15(d)−15(e) of the Securities Exchange Act of 1934. an evaluation was carried out under the supervision and with the participation of our management. et al. We are cooperating with the FCC in this investigation and are in the process of producing documents and other information requested by the FCC. Item 4. due to the uncertainty of the actions that would be taken and their possible effects. While we are unable to predict the outcome of these matters. Also as previously disclosed. Tyler Division (filed April 16. Such disclosure controls and procedures are designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is accumulated and communicated to our management. our management would likely take actions. processed. or are reasonably likely to materially affect. in August 2005. Gap Broadcasting. Risk Factors 27 . including our CEO and CFO. At the end of the period covered by this report. in May 2007. alleged that the defendants have infringed and continue to infringe plaintiff’s patented content replacement technology in the context of radio station streaming over the Internet. Saga Communications. 2009). 2010. Citadel Broadcasting. to mitigate our exposure. that the ultimate resolution of any such proceedings would have a material adverse effect on our overall financial condition or results of operations. our internal control over financial reporting.S. the “Exchange Act”) designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded. summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. our management does not believe. 6:09−cv−170. Based on that evaluation.Table of Contents assuming a one percentage point change in the average interest rate under these borrowings. such analysis would not consider the effects of the change in the level of overall economic activity that could exist in such an environment. U. and sought a permanent injunction and unspecified damages. CBS Radio. OTHER INFORMATION Item 1. Inc. Clear Channel Communications. However. we were subpoenaed by the Office of the Attorney General of the State of New York. and Radio One. as appropriate. 2010 that have materially affected. 2010. The case. We have cooperated with the Attorney General in this investigation.

1 — Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes−Oxley Act of 2002. 28 . we had authority to repurchase an additional $68. “Risk Factors. 2010. Item 3.0 million of our Class A Common Stock. 32. subject to the terms of the Credit Agreement and compliance with other applicable legal requirements. 31. our Board of Directors authorized the purchase. Defaults upon Senior Securities Not applicable.Table of Contents Please refer to Part I.1 — Officer Certification pursuant to Section 906 of the Sarbanes−Oxley Act of 2002. for information regarding factors that could affect our results of operations. 2010. Exhibits 31. 2008. Item 1A. 2009. Other Information Not applicable. financial condition and liquidity. During the three months ended March 31. from time to time. Unregistered Sales of Equity Securities and Use of Proceeds On May 21. Item 5.2 — Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes−Oxley Act of 2002.” in our annual report on Form 10−K for the year ended December 31. we did not purchase any shares of our Class A Common Stock.3 million of our Class A Common Stock. of up to $75. Item 2. As of March 31. Item 6.

Hannan Senior Vice President.Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934. Date: April 30. CUMULUS MEDIA INC. 2010 By: /s/ Joseph P. Treasurer and Chief Financial Officer 29 . Hannan Joseph P. the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

30 .1 — Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes−Oxley Act of 2002.Table of Contents EXHIBIT INDEX 31.1 — Officer Certification pursuant to Section 906 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.

3. and 5. summarize and report financial information. Dickey. The registrant’s other certifying officer and I have disclosed. based on our most recent evaluation of internal control over financial reporting. or is reasonably likely to materially affect. Based on my knowledge.. not misleading with respect to the period covered by this report. President and Chief Executive Officer . Jr. is made known to us by others within those entities. Based on my knowledge. particularly during the period in which this report is being prepared. b..1 Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes−Oxley Act of 2002 I. Date: April 30. I have reviewed this quarterly report on Form 10−Q of Cumulus Media Inc. Lewis W. 2. 4. Lewis W. and b. that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Jr. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record. results of operations and cash flows of the registrant as of. Dickey. as of the end of the period covered by this report based on such evaluation. to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): a. designed such disclosure controls and procedures. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected. to ensure that material information relating to the registrant. designed such internal control over financial reporting. and other financial information included in this report. any fraud. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a−15(f) and 15d−15(f)) for the registrant and have: a. 2010 By: /s/ Lewis W. c. and d. the periods presented in this report. the financial statements. certify that: 1. the registrant’s internal control over financial reporting. process. fairly present in all material respects the financial condition. to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Jr. or caused such disclosure controls and procedures to be designed under our supervision. or caused such internal control over financial reporting to be designed under our supervision. including its consolidated subsidiaries. Dickey.Exhibit 31. in light of the circumstances under which such statements were made. this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made. whether or not material. Chairman. and for.

this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made. 4. the periods presented in this report. to ensure that material information relating to the registrant. 2010 By: /s/ Joseph P. Hannan Joseph P. and for. process. as of the end of the period covered by this report based on such evaluation. Date: April 30. to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. c. particularly during the period in which this report is being prepared. any fraud. in light of the circumstances under which such statements were made. certify that: 1. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record. 2. or is reasonably likely to materially affect. based on our most recent evaluation of internal control over financial reporting. that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. designed such disclosure controls and procedures. including its consolidated subsidiaries. Hannan Senior Vice President. b. I have reviewed this quarterly report on Form 10−Q of Cumulus Media Inc. fairly present in all material respects the financial condition. Hannan. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures. Joseph P. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a−15(f) and 15d−15(f)) for the registrant and have: a. or caused such internal control over financial reporting to be designed under our supervision.Exhibit 31. whether or not material. 3.. to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): a. designed such internal control over financial reporting. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected. Based on my knowledge. and 5. summarize and report financial information. and b. and other financial information included in this report. the financial statements. not misleading with respect to the period covered by this report. is made known to us by others within those entities. results of operations and cash flows of the registrant as of. the registrant’s internal control over financial reporting. Based on my knowledge. and d. or caused such disclosure controls and procedures to be designed under our supervision. The registrant’s other certifying officer and I have disclosed. Treasurer and Chief Financial Officer .2 Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes−Oxley Act of 2002 I.

in connection with the filing of the quarterly report on Form 10−Q of Cumulus Media Inc. Jr. (the “Company”) for the three month period ended March 31. as filed with the Securities and Exchange Commission on the date hereof (the “Report”). the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. in all material respects.1 Certification Pursuant to Section 906 of the Sarbanes−Oxley Act of 2002 Pursuant to 18 U. Treasurer and Chief Financial Officer Date: April 30. President and Chief Executive Officer /s/ Joseph P. or other document authenticating. Hannan Title: Senior Vice President. acknowledging. Dickey. and (2) The information contained in the Report fairly presents. to such officer’s knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. each of the undersigned officers of the Company certifies. that. Title: Chairman. /s/ Lewis W. has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. Jr. Dickey.S. . § 1350.C. Hannan Name: Joseph P. 2010 A signed original of this written statement required by Section 906. as adopted pursuant to § 906 of the Sarbanes−Oxley Act of 2002. Name: Lewis W. or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906.Exhibit 32. 2010.

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