Edgar Filing: CUMULUS MEDIA INC

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K



þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 00-24525

Cumulus Media Inc.

(Exact Name of Registrant as Specified in Its Charter)



Delaware		82-5134717
(State of Incorporation)		(I.R.S. Employer Identification No.)

3280 Peachtree Road, N.W.

Suite 2200

Atlanta, GA 30305

(404) 949-0700

(Address, including zip code, and telephone number, including area code, of registrant’s principal offices)

Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:

Class A Common Stock, par value $.0000001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:



Large accelerated filer	¨	Accelerated filer	þ

Non-accelerated filer	¨	Smaller reporting company	þ

		Emerging growth company	¨

If an emerging company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

The aggregate market value of the registrant’s outstanding voting and non-voting common stock held by non-affiliates of the registrant (assuming, solely for the purposes hereof, that all officers and directors (and their respective affiliates), and 10% or greater stockholders of the registrant are affiliates of the registrant, some of whom may not be deemed to be affiliates upon judicial determination) as of June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $239.3 million.

As of March 11, 2019, the registrant had outstanding 16,648,590 shares of common stock consisting of (i) 13,092,968 shares of Class A common stock; and (ii) 3,555,622 shares of Class B common stock in addition to 2,903,248 Series 1 warrants and 476,534 Series 2 warrants.

DOCUMENTS INCORPORATED BY REFERENCE

None

CUMULUS MEDIA INC.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended December 31, 2018



Item Number		Page Number
PART I
1	Business	3
1A.	Risk Factors	16
1B.	Unresolved Staff Comments	22
2	Properties	22
3	Legal Proceedings	22
4	Mine Safety Disclosures	23
PART II
5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
6	Selected Financial Data	25
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
7A.	Quantitative and Qualitative Disclosures about Market Risk	54
8	Financial Statements and Supplementary Data	54
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	54
9A.	Controls and Procedures	54
9B.	Other Information	55
PART III
10	Directors, Executive Officers and Corporate Governance	56
11	Executive Compensation	56
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
13	Certain Relationships and Related Transactions, and Director Independence	57
14	Principal Accountant Fees and Services	57
PART IV
15	Exhibits, Financial Statement Schedules	58
16	Form 10-K Summary	61
	Signatures	61

PART I



Item 1.	Business

Description of Certain Definitions and Data

In this Annual Report on Form 10-K (this “Form 10-K” or this “Report”) the terms “Company,” “Cumulus,” “we,” “us,” and “our” refer to Cumulus Media Inc. and its consolidated subsidiaries.

We use the term “local marketing agreement” (“LMA”) in this Report. In a typical LMA, the licensee of a radio station makes available, for a fee and reimbursement of its expenses, airtime on its station to a party which supplies programming to be broadcast during that airtime, and collects revenues from advertising aired during such programming.

Unless otherwise indicated, as disclosed herein we:


•	obtained total radio industry listener and revenue levels from the Radio Advertising Bureau;


•	derived historical market revenue statistics and market revenue share percentages from data published by Miller Kaplan, Arase LLP, a public accounting firm that specializes in serving the broadcasting industry and BIA/Kelsey (“BIA”), a media and telecommunications advisory services firm; and


•	derived all audience share data and audience rankings, including ranking by population, from surveys of people ages 12 and over, listening Monday through Sunday, 6 a.m. to 12 midnight, as reported in the Nielsen Audio Market Report.

Emergence from Chapter 11

As previously disclosed, on November 29, 2017 (the “Petition Date”), CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.), a Delaware corporation (“Old Cumulus”) and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the "Chapter 11 Cases") were jointly administered under the caption In re Cumulus Media Inc., et al, Case No. 17-13381. On May 10, 2018, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 769] (the “Confirmation Order”), which confirmed the First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 446] (the “Plan”), as modified by the Confirmation Order. On June 4, 2018 (the “Effective Date”), Old Cumulus satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan was substantially consummated, and Old Cumulus and the other Debtors emerged from Chapter 11. On June 29, 2018, the Bankruptcy Court entered an order closing the Chapter 11 Cases of all of the Debtors other than Old Cumulus, whose case will remain open until its estate has been fully administered including resolving outstanding claims and the Bankruptcy Court enters an order closing its case.

Cancellation of Certain Prepetition Obligations

In connection with the effectiveness of and pursuant to the terms of the Plan, on the Effective Date, the obligations of Old Cumulus and its subsidiaries under the following agreements were satisfied and discharged:

•

Amended and Restated Credit Agreement, dated as of December 23, 2013, by and among Cumulus Media Inc., Cumulus Media Holdings Inc., as borrower, certain lenders, JPMorgan Chase Bank, N.A., as lender and Administrative Agent, Royal Bank of Canada and Macquarie Capital (USA) Inc., as co-syndication agents, and Credit Suisse AG, Cayman Islands Branch, Fifth Third Bank, Goldman Sachs Bank USA and ING Capital LLC, as co-documentation agents (“the Canceled Credit Agreement”), pursuant to which Old Cumulus had outstanding term loans in the amount of $1.7 billion (the “Predecessor Term Loan”);


•	Indenture, dated as of May 13, 2011, among Cumulus Media Inc., the Guarantors named therein and U.S. Bank National Association, as Trustee, as supplemented, and pursuant to which Old Cumulus had outstanding senior notes with a face value of $610.0 million (“7.75% Senior Notes”); and


•	Rights Agreement, dated as of June 5, 2017, between Cumulus Media Inc. and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”).

Additional Matters Contemplated by the Plan


•	In accordance with the Plan, on the Effective Date each share of Old Cumulus’s Class A common stock, par value $0.01 per share (the “old Class A common stock”), Class B common stock, par value $0.01 per share (the “old

Class B common stock”), and Class C common stock, par value $0.01 per share (the "old Class C common stock” and together with the old Class A common stock and the old Class B common stock, the “old common stock”) outstanding immediately prior to the Effective Date, including all stock options, warrants or other rights, including rights issued under the Rights Agreement, to purchase such old common stock, were extinguished, canceled and discharged, and each such share, option or warrant has no further force or effect. Furthermore, all of Old Cumulus’s equity award agreements under prior incentive plans, and the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect;

•

On the Effective Date, our certificate of incorporation was amended and restated to authorize the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0000001 per share (“new Class A common stock”),100,000,000 shares of Class B common stock, par value $0.0000001 per share (“new Class B common stock” and, together with the new Class A common stock, the “new common stock”) and 100,000,000 shares of preferred stock (see Note 11, “Stockholders’ Equity”);


•	On the Effective Date, we issued 11,052,211 shares of new Class A common stock and 5,218,209 shares of new Class B common stock;


•	On the Effective Date, we issued 3,016,853 Series 1 warrants to purchase shares of new common stock;


•	After the Effective Date, we also issued or will issue 712,736 Series 2 warrants (the “Series 2 warrants” and, together with the Series 1 warrants, the “Warrants”) to purchase shares of new common stock;


•	We entered into a $1.3 billion credit agreement (the “Credit Agreement” or “Term Loan”) with Wilmington Trust, N.A., as administrative agent (the “Agent”) and the lenders named therein (see Note 9, “Long-Term Debt”);

•

The holders of claims with respect to the Predecessor Term Loan received the following in full and complete satisfaction of their respective claims thereunder: (i) a pro rata share of the Term Loan and (ii) a pro rata share of 83.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Long-Term Incentive Plan (the “Incentive Plan”) (see Note 11, “Stockholders’ Equity”);


•	The holders of unsecured claims against Old Cumulus, including claims arising from the 7.75% Senior Notes received, in the aggregate, 16.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Incentive Plan;


•	Our board of directors was reconstituted to consist of our President and Chief Executive Officer and six independent directors selected by the holders of the Predecessor Term Loan; and


•	Intercompany Claims and Interests (as defined in the Plan) were canceled without any distribution on account of such Intercompany Claims and Interests.

The foregoing description of certain of the matters effected pursuant to the Plan and the transactions related to and contemplated thereunder, is not intended to be a complete description of, or a substitute for, a full and complete reading of the Plan.

In connection with its emergence, Old Cumulus implemented a series of internal reorganization transactions authorized by the Plan pursuant to which it transferred substantially all of its remaining assets to an indirectly wholly owned subsidiary of reorganized Cumulus Media Inc. (formerly known as CM Emergence Newco Inc.), a Delaware corporation (“CUMULUS MEDIA” or the “Company”), prior to winding down its business. References to “Successor” or “Successor Company” relate to the balance sheet and results of operations of CUMULUS MEDIA on and subsequent to June 4, 2018. References to “Predecessor”, “Predecessor Company” or “Old Cumulus” refer to the balance sheet and results of operations of Old Cumulus prior to June 4, 2018.

Company Overview

A leader in the radio broadcasting industry, CUMULUS MEDIA combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million people reached each week through its 433 owned-and-operated stations broadcasting in 88 U.S. media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Together, the Cumulus/Westwood One platforms make Cumulus one of the few media companies that can provide advertisers with national reach and local impact. Cumulus/Westwood One is the exclusive radio broadcast partner to some of the largest brands in sports, entertainment, news, and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, and more. Additionally, it is the nation's leading provider of country music and lifestyle content through its NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events.

We are a Delaware corporation, organized in 2018, and a successor to a Delaware corporation with the same name that was organized in 2002.

Strategic Overview

We are focused on building our competitive position in the expanding audio landscape by achieving leadership positions in the markets in which we operate and leveraging those positions in conjunction with our network platform, national scale, and local advertiser relationships to build value for all our stakeholders. The Company seeks to achieve our objective through the execution of three specific strategies:

•enhancing operating performance to drive cash flow generation, through the execution of a range of initiatives across both our radio station and network platforms to maintain or grow market share, reduce costs and improve efficiency;

•expanding high growth digital businesses in local marketing services and new audio formats such as podcasting and streaming;

•optimizing our asset portfolio by taking advantage of opportunities to strengthen our position in markets where we are, or can become, leaders and to exit markets or dispose of assets that are not supportive of our objectives if we can do so accretively.

Competitive Strengths

We believe our success is, and future performance will be, directly related to the following combination of characteristics that will facilitate the implementation of our strategies:

Leadership in the radio broadcasting industry and new audio formats

Currently, we offer advertisers access to a broad portfolio of 433 owned and operated stations, operating in 16 large and 73 small and mid-sized media markets and 8,000 network affiliates with an aggregate weekly reach of 245 million listeners. Our stations and affiliates cover a wide variety of programming formats, geographic regions and audience demographics and we engage with audiences through over-the-air, digital (including streaming and podcasting) and live interactions. This scale and diversity allow us to offer advertisers the ability to customize advertising campaigns on a national, regional and local basis through broadcast, digital and mobile mediums, as well as through live events, enabling us to compete effectively with other media and engage listeners whenever they want and wherever they are.

National reach

As one of the largest radio advertising and content providers in the United States we provide a national platform which allows us to more effectively and efficiently compete for national advertising dollars. In addition, this national network platform provides targeted access and more diverse demographics and age groups to better meet our customers’ needs and allow for more focused marketing. Our sales team has the ability to aggregate advertising inventory time across our owned-and-operated and/or affiliate networks, and divide it into packages focused on specific demographics that can be sold to national advertisers looking to reach specific national or regional audiences.

Endorsement value of our talent

Our on-air and podcast talent often provide personal endorsements of advertisers’ products via live or recorded reads. To the extent our talent has won the trust of their audiences, such endorsements can be well-received by listeners and, as such, valuable to advertisers who are eager to capture the favorable attention of new and existing customers for their products.

Broadening relationships with local advertisers

The multiple contacts our local sales people have with their clients over the course of a year often give them a degree of familiarity with their clients’ needs and the ability to tailor campaigns to help them achieve success. Over the last several years, those interactions have allowed us to expand our support of new and existing clients’ business objectives by offering them additional products, most importantly digital marketing services, which generally supplement their radio buys.

Diversified customer base and geographic mix

We generate substantially all of our revenue from the sale of advertising time to a broad and diverse customer base including local advertisers based in our 89 cities or "markets" as well as advertisers based outside those markets seeking to obtain the regional or national exposure we can provide in radio or digital formats. We sell our advertising time both nationally and locally through an integrated sales approach that ranges from traditional radio spots to non-traditional sales programs, including on-line couponing and various on-air and digital integrated marketing programs.

Our advertising exposure is highly diversified across a broad range of industries, which lessens the impact of the economic conditions applicable to any one specific industry or customer group. Our top industry segments by advertising volume include automotive, restaurants, entertainment, financial, and communications. We derive additional revenue from political candidates, political parties, and special interest groups particularly in even-numbered years in advance of various elections. We have a broad distribution of advertisers across all of our stations and Westwood One.

Focus on corporate culture

We believe maintaining a corporate culture that supports employee engagement has been, and will continue to be important to our continued success. Through a rigorous and systematic cultural values framework, FORCE (Focused, Responsible, Collaborative, and Empowered), we believe we have created a motivated employee base that is invested in both their jobs and the Company’s progress and a culture that serves as a critical catalyst to driving higher performance.

Ability to leverage content across platforms

Our various content platforms, including local stations, the Westwood One Network and our growing podcast and streaming businesses, provide diversified content to build relationships with listeners as well as access to a broader base of talent across those platforms. We have had recent success in extending content from one platform to another (such as from local radio to network syndication and from podcasting to broadcast radio) to build audiences and monetization opportunities and expect to continue to do so increasingly in the future.

Industry Overview

The primary source of revenues for radio broadcasting companies is the sale of advertising time to local, regional, national spot and network advertisers.

Generally, radio is considered an efficient, cost-effective means of reaching specifically identified demographic groups with advertising. Stations are typically classified by their on-air format, such as country, rock, adult contemporary, oldies and news/talk. A station’s format and style of presentation enables it to target specific segments of listeners sharing certain demographic qualities. Advertisers and stations use data published by audience measurement services, such as Nielsen Audio, to estimate how many people within particular geographical markets and demographics listen to specific stations. By capturing a specific share of a market’s radio listening audience with particular concentration in a targeted demographic, a station is able to market its broadcasting time to advertisers seeking to reach a specific audience.

The number of advertisements that can be broadcast by a station without jeopardizing listening levels and the resulting ratings is generally dictated in part by the format of a particular station and the local competitive environment. Although the number of advertisements broadcast during a given time period may vary, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year.

A station’s local sales staff generates the majority of its local and regional advertising sales through direct solicitations of local advertising agencies and businesses. To generate national advertising sales, a station usually will engage a firm that specializes in soliciting radio-advertising sales on a national level. Stations also may engage directly with an internal national sales team that supports the efforts of third-party representatives. National sales representatives obtain advertising principally from advertising agencies located outside the station’s market and receive commissions based on the revenue from the advertising they obtain.

Our stations compete for advertising revenue with other broadcast radio stations in their particular market as well as other media, including newspapers, broadcast television, cable television, magazines, direct mail, and outdoor advertising as well as search engine, e-commerce and other websites and satellite-based digital radio and music services. We cannot predict how existing or new sources of competition will affect our performance and results of operations.

Advertising Sales

The majority of our revenue is generated from the sale of local, regional, and national advertising for broadcast on our radio stations. In addition, we generate revenue from the sale of commercial air time our network receives from its radio station affiliates (and aggregates for sale to national advertisers) in exchange for programming and services. To a lesser extent, we also purchase commercial inventory to sell by our network and occasionally also receive cash from affiliates for network programming and services. Our major advertiser categories are:



Automotive	Food products	Retail
Entertainment	Home products	Restaurants
Financial	Professional services	Telecommunications/Media

In addition, in advance of various elections, we derive revenue from political candidates, political parties, and special interest groups, particularly in even-numbered years.

Each station’s local sales staff solicits advertising either directly from a local advertiser or indirectly through an advertising agency. We use a tiered commission structure to focus our sales staff on new business development. We believe that we can outperform our competitors by (1) expanding our base of advertisers, (2) properly training sales people and (3) providing a higher level of service to our existing customer base.

National sales for our radio stations are made by a firm specializing in radio advertising sales on the national level, in exchange for a commission that is based on the gross revenue from the advertising generated. Regional sales, which we define as sales in regions surrounding our markets to buyers that advertise in our markets, are generally made by our local sales staff and market managers. While we seek to grow our local sales through more customer-focused sales staffs, we seek to grow our national and regional sales by offering key national and regional advertisers access to groups of stations within specific markets and regions that make us a more attractive platform.

Each of our stations has a certain amount of on-air inventory, or advertising slots, in which to place advertising spots. This target level of advertising inventory may vary at different times of the day but tends to remain stable over time. Our stations strive to maximize revenue by managing their on-air advertising inventory and adjusting prices up or down based on supply and demand. We seek to broaden our advertiser base in each market by providing a wide array of audience demographic groups across each cluster of stations, thereby providing potential advertisers with an effective means to reach a targeted demographic group. Our sales volume and pricing is based on demand for our radio stations’ on-air inventory. Most changes in revenue are explained by a combination of demand-driven pricing changes and changes in inventory utilization rather than by changes in available inventory. Advertising rates charged by radio stations, which are generally highest during morning and afternoon commuting hours, are based primarily on:


•	a station’s share of audiences and the demographic groups targeted by advertisers (as measured by ratings surveys);


•	the supply and demand for radio advertising time and for time targeted at particular demographic groups; and


•	certain additional qualitative factors, such as the brand loyalty of listeners to a specific station.

A station’s listenership is reflected in ratings surveys that estimate the number of listeners tuned in to the station, and the time they spend listening. Each station’s ratings are used by its advertisers and advertising representatives to consider advertising with the station and are used by Cumulus to chart changes in audience, set advertising rates and adjust programming.

Competition

The radio broadcasting industry is very competitive. Our stations compete for listeners and advertising revenues directly with other radio stations within their respective markets, as well as with other advertising media. Additionally, we compete with various digital platforms and services including streaming music and other entertainment services for both listeners and advertisers.

Factors that affect a radio station’s competitive position include station brand identity and loyalty, the attractiveness of the stations programming content to audiences, the station’s local audience rank in its market, transmitter power and location, assigned frequency, audience characteristics, local program acceptance and the number and characteristics of other radio stations and other advertising media in the market area. We attempt to improve our competitive position in each market through research, seeking to improve our stations’ programming, implementing targeted advertising campaigns aimed at the demographic groups for which our stations program and managing our sales efforts to attract a larger share of advertising dollars for each station individually. We also seek to improve our competitive position by focusing on building a strong brand identity with a targeted listener base consisting of specific demographic groups in each of our markets, which we believe will allow us to better attract advertisers seeking to reach those listeners.

The success of each of our stations depends largely upon rates it can charge for its advertising, which in turn is affected by the number of local advertising competitors, the overall demand for advertising within individual markets and the station’s listener base. These conditions may fluctuate and are highly susceptible to changes in both local markets and general macroeconomic conditions. Specifically, a radio station’s competitive position can be enhanced or negatively impacted by a

variety of factors, including the changing of, or another station changing, its format to compete directly for a certain demographic of listeners and advertisers or an upgrade of the station’s authorized power through the relocation or upgrade of transmission equipment. Another station’s decision to convert to a similar format to that of one of our radio stations in the same geographic area, to improve its signal reach through equipment changes or upgrades, or to launch an aggressive promotional campaign may result in lower ratings and advertising revenue for our station. Any adverse change affecting advertising expenditures in a particular market or in the relative market share of our stations located in a particular market could have a material adverse effect on the results of our radio stations located in that market or, possibly, the Company as a whole. There can be no assurance that any one or all of our stations will be able to maintain or increase advertising revenue market share.

Under federal laws and Federal Communications Commission (the “FCC”) rules, a single party can own and operate multiple stations in a local market, subject to certain limitations described below. We believe that companies that form groups of commonly owned stations or joint arrangements, such as LMAs, in a particular market may, in certain circumstances, have lower operating costs and may be able to offer advertisers in those markets more attractive rates and services. Although we currently operate multiple stations in most of our markets and may pursue the creation of additional multiple station groups in particular markets, our competitors in certain markets include other parties that own and operate as many or more stations as we do.

Some of these regulations, however, can serve to protect the competitive position of existing radio stations to some extent by creating certain regulatory barriers to new entrants. The ownership of a radio broadcast station requires an FCC license, and the number of radio stations that an entity can own in a given market is limited under certain FCC rules. The number of radio stations that a party can own in a particular market is dictated largely by whether the station is in a defined “Nielsen Audio Metro" (a designation designed by a private party for use in advertising matters), and, if so, the number of stations included in that Nielsen Audio Metro. In those markets that are not in a Nielsen Audio Metro, the number of stations a party can own in the particular market is dictated by the number of AM and FM signals that overlap. These FCC ownership rules may, in some instances, limit the number of stations we or our competitors can own or operate, or may limit potential new market entrants. However, FCC ownership rules may change in the future to reduce any protections they currently provide. We also cannot predict what other matters might be considered in the future by the FCC or Congress, nor can we assess in advance what impact, if any, the implementation of any of these proposals or changes might have on our business. For a discussion of FCC regulation (including recent changes), see “- Federal Regulation of Radio Broadcasting.”

Employees

At December 31, 2018, we employed 5,135 people, 3,449 of whom were employed full time. Of these employees, approximately 224 employees were covered by collective bargaining agreements. We have not experienced any material work stoppages by our employees covered by collective bargaining agreements, and overall, we consider our relations with our employees to be positive.

On occasion, we enter into contracts with various on-air personalities with large loyal audiences in their respective markets to protect our interests in those relationships that we believe to be valuable. The loss of one of these personalities could result in a short-term loss of audience share, but we do not believe that any such loss would have a material adverse effect on our financial condition or results of operations, taken as a whole.

Seasonality and Cyclicality

Our advertising revenues vary by quarter throughout the year. As is typical with advertising revenue supported businesses, our first calendar quarter typically produces the lowest revenues of any quarter during the year, as advertising generally declines following the winter holidays. The second and fourth calendar quarters typically produce the highest revenues for the year. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups. This political spending typically is heaviest during the fourth quarter.

Inflation

To date, inflation has not had a material effect on our revenues, expenses, or results of operations, although no assurances can be provided that inflation in the future would not materially adversely affect us.

Federal Regulation of Radio Broadcasting

The ownership, operation and sale of radio broadcast stations, including those licensed to us, are subject to the jurisdiction of the FCC, which acts under authority of the Communications Act of 1934, as amended (the “Communications Act”). Among its other regulatory responsibilities, the FCC issues permits and licenses to construct and operate radio stations; assigns broadcast frequencies; determines whether to approve changes in ownership or control of station licenses; regulates transmission equipment, operating power, and other technical parameters of stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; regulates the content of some forms of radio broadcast programming; and has the authority under the Communications Act to impose penalties for violations of its rules.

The following is a brief summary of certain provisions of the Communications Act, and related FCC rules and policies (collectively, the “Communications Laws”). This description does not purport to be comprehensive, and reference should be made to the Communications Laws, public notices, and decisions issued by the FCC for further information concerning the nature and extent of federal regulation of radio broadcast stations. Failure to observe the provisions of the Communications Laws can result in the imposition of various sanctions, including monetary forfeitures and the grant of a “short-term” (less than the maximum term) license renewal. For particularly egregious violations, the FCC may deny a station’s license renewal application, revoke a station’s license, or deny applications in which an applicant seeks to acquire additional broadcast properties.

License Grant and Renewal

Radio broadcast licenses are generally granted and renewed for terms of up to eight years at a time. Licenses are renewed by filing an application with the FCC, which is subject to review and approval. The Communications Act expressly provides that a radio station is authorized to continue to operate after the expiration date of its existing license until the FCC acts on a pending renewal application. Petitions to deny license renewal applications may be filed by interested parties, including members of the public. While we are not currently aware of any facts that would prevent the renewal of our licenses to operate our radio stations, there can be no assurance that all of our licenses will be renewed in the future for a full term, or at all. Our inability to renew a significant portion of our radio broadcast licenses could result in a material adverse effect on our results of operations and financial condition.

Service Areas

The area served by an AM station is determined by a combination of frequency, transmitter power, antenna orientation, and soil conductivity. To determine the effective service area of an AM station, the station’s power, operating frequency, antenna patterns and its day/night operating modes are evaluated. The area served by an FM station is determined by a combination of effective radiated power (“ERP”), antenna height and terrain, with stations divided into eight classes according to these technical parameters.

Each class of FM radio station has the right to broadcast with a certain amount of ERP from an antenna located at a certain height above average terrain. The most powerful FM radio stations, which are generally those with the largest geographic reach, are Class C FM stations, which operate with up to the equivalent of 100 kilowatts (“kW”) of ERP at an antenna height of 1,968 feet above average terrain. These stations typically provide service to a large area that covers one or more counties (which may or may not be in the same state). There are also Class C0, C1, C2 and C3 FM radio stations which operate with progressively less power and/or antenna height above average terrain and, thus, less geographic reach. In addition, Class B FM stations operate with the equivalent of up to 50 kW ERP at an antenna height of 492 feet above average terrain. Class B stations can serve large metropolitan areas and their outer suburban areas. Class B1 stations can operate with up to the equivalent of 25 kW ERP at an antenna height of 328 feet above average terrain. Class A FM stations operate with up to the equivalent of 6 kW ERP at an antenna height of 328 feet above average terrain, and often serve smaller cities or suburbs of larger cities.

The following table sets forth, as of March 11, 2019, the number of stations by market of all our owned and/or operated stations, including stations operated under an LMA, whether or not pending acquisition, and all other announced pending station acquisitions, if any.



	Market		Stations
	Market		Stations
	Abilene, TX		4
	Albany, GA		6
	Albuquerque, NM		8
	Allentown, PA		2
	Amarillo, TX		6
	Ann Arbor, MI		4
	Appleton, WI		4
	Atlanta, GA		4
	Baton Rouge, LA		5
	Beaumont, TX		5
	Birmingham, AL		6
	Bloomington, IL		5
	Boise, ID		6
	Bridgeport, CT		2
	Buffalo, NY		5
	Charleston, SC		5
	Chattanooga, TN		4
	Chicago, IL		3
	Cincinnati, OH		5
	Colorado Springs, CO		6
	Columbia, MO		7
	Columbia, SC		5
	Columbus-Starkville, MS		5
	Dallas, TX		8
	Des Moines, IA		5
	Detroit, MI		3
	Erie, PA		4
	Eugene, OR		5
	Fayetteville, AR		7
	Fayetteville, NC		4
	Flint, MI		5
	Florence, SC		8
	Fort Smith, AR		3
	Fort Walton Beach, FL		5
	Fresno, CA		5
	Grand Rapids, MI		5
	Green Bay, WI		6
	Harrisburg, PA		5
	Houston, TX		1
	Huntsville, AL		6
	Indianapolis, IN		6
	Johnson City, TN		5
	Kansas City, MO		6
	Knoxville, TN		4
	Kokomo, IN		1



	Market		Stations
	Market		Stations
	Lafayette, LA		5
	Lake Charles, LA		6
	Lancaster, PA		2
	Lexington, KY		6
	Little Rock, AR		7
	Los Angeles, CA		2
	Macon, GA		6
	Melbourne, FL		4
	Memphis, TN		4
	Minneapolis, MN		5
	Mobile, AL		5
	Modesto, CA		6
	Montgomery, AL		6
	Muncie, IN		2
	Muskegon, MI		5
	Myrtle Beach, SC		5
	Nashville, TN		5
	New London, CT		3
	New Orleans, LA		4
	New York, NY		4
	Oklahoma City, OK		7
	Oxnard-Ventura, CA		4
	Pensacola, FL		5
	Peoria, IL		5
	Providence, RI		6
	Reno, NV		4
	Saginaw, MI		4
	Salt Lake City, UT		6
	San Francisco, CA		7
	Santa Barbara, CA		1
	Savannah, GA		7
	Shreveport, LA		5
	Springfield, MA		2
	Stockton, CA		2
	Syracuse, NY		4
	Tallahassee, FL		5
	Toledo, OH		6
	Topeka, KS		7
	Tucson, AZ		5
	Washington, DC		3
	Westchester, NY		1
	Wichita Falls, TX		4
	Wilkes-Barre, PA		6
	Wilmington, NC		5
	Worcester, MA		3
	York, PA		4
	Youngstown, OH		8

Regulatory Approvals

The Communications Laws prohibit the assignment or transfer of control of a broadcast license without the prior approval of the FCC. In determining whether to grant an application for assignment or transfer of control of a broadcast license, the Communications Act requires the FCC to find that the assignment or transfer would serve the public interest. The FCC considers a number of factors in making this determination, including (1) compliance with various rules limiting common ownership or control of media properties, (2) the financial and “character” qualifications of the assignee or transferee (including

those parties holding an “attributable” interest in the assignee or transferee), (3) compliance with the Communications Act’s foreign ownership restrictions, and (4) compliance with other Communications Laws, including those related to programming and filing requirements. As discussed in greater detail below, the FCC may also review the effect of proposed assignments and transfers of broadcast licenses on economic competition and diversity. See “- Antitrust and Market Concentration Considerations.”

In connection with our 2011 acquisition of Citadel Broadcasting Corporation, and our emergence from Chapter 11 in June 2018, we were required to place certain stations into two divestiture trusts in compliance with the FCC rules. The trust agreements stipulated that we must fund any operating shortfalls from the activities of the stations in the trusts, and any excess cash flow generated by such stations will be distributed to us until the stations are sold. As of March 11, 2019, there are five stations remaining in those trusts.

Ownership Matters

The Communications Act restricts us from having more than 25% of our capital stock owned or voted by non-U.S. persons, foreign governments or non-U.S. corporations. We are required to take steps to monitor the citizenship of our stockholders based principally on our review of ownership information that is known or reasonably should be known to us to establish a reasonable basis for certifying compliance with the foreign ownership restrictions of the Communications Act. In November 2013, the FCC issued a declaratory ruling in which it stated that it would review requests for companies to exceed the 25% alien ownership threshold in the Communications Act on a case-by-case basis. Since that time, the FCC acted on several petitions for declaratory ruling which requested that various entities be permitted to exceed the 25% foreign equity and voting limitations. In those cases, the FCC permitted foreign ownership of as much as 100% by both specifically-identified foreign persons and generally, subject to various conditions. These rulings were based upon the specific facts relating to the respective cases, and it is uncertain how the FCC would treat any request which might be made to increase alien ownership of our stock in excess of the current threshold. We filed a petition for declaratory ruling with the FCC in July, 2018, requesting that we be permitted to have 100% foreign ownership generally. That petition remains pending before the FCC and we cannot predict how the FCC will act on it or when such action may be taken.

In September 2016, the FCC issued new policies governing how broadcast companies calculate the amount of their stock which is foreign held. These new policies permit a public company, which takes adequate steps to determine the extent to which its stock is foreign-owned or voted, to presume that shares as to which it lacks knowledge of foreign ownership or voting control do not raise a foreign ownership issue. Under previous FCC policies, stock which could not specifically be identified as owned and voted by U.S. citizens was presumed to be foreign held. Under the new rules, the FCC in certain instances has permitted specific foreign investors to increase their non-controlling ownership in a broadcast company to 49.99%, and certain other investors to increase their controlling ownership to 100%, without further FCC approval.

The Communications Laws also generally restrict the number of radio stations one person or entity may own, operate or control in a local market. The Communications Laws formerly restricted (1) the common ownership, operation or control of radio broadcast stations and television broadcast stations serving the same local market, and (2) the common ownership, operation or control of a radio broadcast station and a daily newspaper serving the same local market, but those “cross ownership” rules were lifted by the FCC effective in February 2018. However, the FCC’s action in lifting the cross-ownership rules is currently the subject of a petition for review filed by several public interest organizations. In December 2018, the FCC released a Notice of Proposed Rulemaking to launch its 2018 quadrennial review of multiple ownership rules. The Notice of Proposed Rulemaking does not make any specific proposals but seeks comment regarding whether its local radio ownership rule limits should be modified. We cannot predict whether the FCC will adopt changes to the local radio ownership rule or what impact any such changes would have on our holdings.

To our knowledge, these multiple ownership rules do not require any change in our current ownership of radio broadcast stations. The Communications Laws limit the number of additional stations that we may acquire in the future in our existing markets as well as any new markets.

Because of these multiple ownership rules, a purchaser of our voting stock who acquires an “attributable” interest in Cumulus (as discussed below) may violate the Communications Laws if such purchaser also has an attributable interest in other radio stations, depending on the number and location of those radio stations. Such a purchaser also may be restricted in the companies in which it may invest to the extent that those investments give rise to an attributable interest. If one of our stockholders with an attributable interest violates any of these ownership rules, we may be unable to obtain from the FCC one or more authorizations needed to conduct our radio station business and may be unable to obtain FCC consents for certain future acquisitions.

The FCC generally applies its broadcast multiple ownership rules by considering the “attributable” interests held by a person or entity. With some exceptions, a person or entity will be deemed to hold an attributable interest in a radio station if the person or entity serves as an officer, director, partner, stockholder, member, or, in certain cases, a debt holder of a company that owns that station. If an interest is attributable, the FCC treats the person or entity that holds that interest as the “owner” of the radio station in question, and that interest thus is attributed to the person in determining compliance with the FCC’s ownership rules.

With respect to a corporation, officers, directors and persons or entities that directly or indirectly hold 5% or more of the corporation’s voting stock (20% or more of such stock in the case of insurance companies, investment companies, bank trust departments and certain other “passive investors” that hold such stock for investment purposes only) generally are attributed with ownership of the radio stations owned by the corporation. As discussed below, participation in an LMA or a joint sales agreement (“JSA”) also may result in an attributable interest. See “- Local Marketing Agreements” and "-Joint Sales Agreements."

With respect to a partnership (or limited liability company), the interest of a general partner (or managing member) is attributable. The following interests generally are not attributable: (1) debt instruments, non-voting stock, options and warrants for voting stock, partnership interests, or membership interests that have not yet been exercised; (2) limited partnership or limited liability company membership interests where (a) the limited partner or member is not “materially involved” in the media-related activities of the partnership or limited liability company, and (b) the limited partnership agreement or limited liability company agreement expressly “insulates” the limited partner or member from such material involvement by inclusion of provisions specified in FCC rules; and (3) holdings of less than 5% of an entity’s voting stock, non-voting equity and debt interests (unless stock or other equity holdings, whether voting or non-voting and whether insulated or not, and/or debt interests collectively constitute more than 33% of a station’s “enterprise value," which consists of the total equity and debt capitalization, and the non-voting stockholder or equity-holder/debt holder has an attributable interest in another radio station in the same market or supplies more than 15% of the programming of the station owned by the entity in which such holder holds such stock, equity or debt interests).

Programming and Operation

The Communications Act requires broadcasters to serve the “public interest.” To satisfy that obligation broadcasters are required by FCC rules and policies to present programming that is responsive to community problems, needs and interests and to maintain certain records demonstrating such responsiveness. FCC rules require that each radio broadcaster place a list in its public inspection file at the end of each quarter which identifies important community issues and the programs the radio broadcaster used in the prior quarter to address those issues. The FCC requires that certain portions of a radio station’s public inspection file be uploaded to the FCC’s online data base.

Complaints from listeners concerning a station’s programming may be filed at any time and will be considered by the FCC both at the time they are filed and in connection with a licensee’s renewal application. FCC rules also require broadcasters to provide equal employment opportunities (“EEO”) in the hiring of personnel, to abide by certain procedures in advertising employment opportunities, to make information available on employment opportunities on their website (if they have one), and maintain certain records concerning their compliance with EEO rules. The FCC will entertain individual complaints concerning a broadcast licensee’s failure to abide by the EEO rules and also conducts random audits on broadcast licensees’ compliance with EEO rules. We have been subject to numerous EEO audits. To date, none of those audits has disclosed any major violation that would have a material adverse effect on our cash flows, financial condition or operations. Stations also must follow provisions in the Communications Laws that regulate a variety of other activities, including political advertising, the broadcast of obscene or indecent programming, sponsorship identification, the broadcast of contests and lotteries, and technical operations (including limits on radio frequency radiation). In September 2015, the FCC adopted an order revising its rules that require a radio station to broadcast the material terms and conditions of any on-air contest. Under these, stations may satisfy that disclosure obligation by posting the material terms and conditions of an on-air contest on the station’s web site or on another publicly-available Internet site instead of broadcasting them over the air.

In October 2015, the FCC made changes to certain technical rules regarding the AM radio service, and also adopted procedures designed to make it easier for owners of AM stations to use FM translators to rebroadcast their AM stations’ signals. We cannot predict at this time the extent, if any, to which those rule changes and procedures will affect our operations.

We are and have been subject to listener complaints from time to time on a variety of matters, and, while none of them has had a material adverse effect on our cash flows, financial condition or operations as a whole to date, we cannot predict whether any future complaint might have a material adverse effect on our future financial condition or results of operations.

Local Marketing Agreements

A number of radio stations, including certain of our stations, have entered into LMAs. In a typical LMA, the licensee of a station makes available, for a fee and reimbursement of its expenses, airtime on its station to a party which supplies programming to be broadcast during that airtime, and collects revenues from advertising aired during such programming. LMAs are subject to compliance with the antitrust laws and the Communications Laws, including the requirement that the licensee must maintain independent control over the station and, in particular, its personnel, programming, and finances.

A station that brokers more than 15% of the weekly programming hours on another station in its market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC’s ownership rules. As a result, a radio station may not enter into an LMA that allows it to program more than 15% of the weekly programming hours of another station in the same market that it could not own under the FCC’s multiple ownership rules.

Joint Sales Agreements

From time to time, radio stations enter into a Joint Sales Agreement ("JSA"). A typical JSA authorizes one party or station to sell another station’s advertising time and retain the revenue from the sale of that airtime in exchange for a periodic payment to the station whose airtime is being sold (which may include a share of the revenue collected from the sale of airtime). Like LMAs, JSAs are subject to compliance with antitrust laws and the Communications Laws, including the requirement that the licensee must maintain independent control over the station and, in particular, its personnel, programming, and finances.

Under the FCC’s ownership rules, a radio station that sells more than 15% of the weekly advertising time of another radio station in the same market will be attributed with the ownership of that other station. For that reason, a radio station cannot have a JSA with another radio station in the same market if the FCC’s ownership rules would otherwise prohibit that common ownership.

Content, Licenses and Royalties

We must pay royalties to song composers and publishers whenever we broadcast musical compositions. Such copyright owners of musical compositions most often rely on intermediaries known as performing rights organizations (“PROs”) to negotiate licenses with copyright users for the public performance of their compositions, collect royalties under such licenses and distribute them to copyright owners. We have obtained public performance licenses from, and pay license fees to, the three major PROs in the United States, which are the American Society of Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”) and SESAC, Inc. (“SESAC”). There is no guarantee that a given songwriter or publisher will remain associated with ASCAP, BMI or SESAC or that additional PROs will not emerge. In 2013, a new PRO was formed named Global Music Rights (“GMR”). GMR has secured the rights to certain copyrights and is seeking to negotiate individual licensing agreements with radio stations for songs in its repertoire. GMR and the Radio Music License Committee, Inc. (‘RMLC’), which negotiates music licensing fees with PROs on behalf of many U.S. radio stations, have instituted antitrust litigation against one another. The litigation is ongoing. The withdrawal of a significant number of musical composition copyright owners from the three established PROs; the emergence of one or more additional PROs; and the outcome of the GMR/RMLC litigation could impact, and in some circumstances increase, our royalty rates and negotiation costs.

Antitrust and Market Concentration Considerations

From time to time Congress and the FCC have considered, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation, ownership or profitability of our radio stations, result in the loss of audience share and advertising revenues for our radio stations, or affect our ability to acquire additional radio stations or finance such acquisitions.

Pending and potential future acquisitions, to the extent they meet specified size thresholds, will be subject to applicable waiting periods and possible review under the Hart-Scott-Rodino Act (“HSR Act”), by the Department of Justice (the "DOJ”) or the Federal Trade Commission (the “FTC”), either of which can be required to, or can otherwise decide to, evaluate a transaction to determine whether that transaction should be challenged under the federal antitrust laws. Transactions generally are subject to the HSR Act if the acquisition price or fair market value of the stations to be acquired is $90 million or more (such threshold effective April 3, 2019). Acquisitions that are not required to be reported under the HSR Act may still be investigated by the DOJ or the FTC under the antitrust laws before or after consummation. At any time before or after the consummation of a proposed acquisition, the DOJ or the FTC could take such action under the antitrust laws as it deems necessary, including seeking to enjoin the acquisition or seeking divestiture of the business acquired or certain of our other assets. The DOJ has reviewed numerous potential radio station acquisitions where an operator proposed to acquire additional stations in its existing markets or multiple stations in new markets, and has challenged a number of such transactions. Some of

these challenges have resulted in consent decrees requiring the sale of certain stations, the termination of LMAs or other relief. In general, the DOJ has more closely scrutinized radio mergers and acquisitions resulting in local market shares in excess of 35% of local radio advertising revenues, depending on format, signal strength and other factors. There is no precise numerical rule, however, and certain transactions resulting in more than 35% revenue shares have not been challenged, while certain other transactions may be challenged based on other criteria such as audience shares in one or more demographic groups as well as the percentage of revenue share. We estimate that we have more than a 35% share of radio advertising revenues in many of our markets.

We are aware that the DOJ commenced, and subsequently discontinued, investigations of several of our prior acquisitions. The DOJ can be expected to continue to enforce the antitrust laws in this manner, and there can be no assurance that future acquisitions will not be the subject of an investigation or enforcement action by the DOJ or the FTC. Similarly, there can be no assurance that the DOJ, the FTC or the FCC will not prohibit such acquisitions, require that they be restructured, or in appropriate cases, require that we divest stations we already own in a particular market or divest specific lines of business. In addition, private parties may under certain circumstances bring legal action to challenge an acquisition under the antitrust laws.

As part of its review of certain radio station acquisitions, the DOJ has stated publicly that it believes that commencement of operations under LMAs, JSAs and other similar agreements customarily entered into in connection with radio station ownership assignments and transfers prior to the expiration of the waiting period under the HSR Act could violate the HSR Act. In connection with acquisitions subject to the waiting period under the HSR Act, we will not commence operation of any affected station to be acquired under an LMA, a JSA, or similar agreement until the waiting period has expired or been terminated.

No assurances can be provided that actual, threatened or possible future DOJ or FTC action in connection with potential transactions would not have a material adverse effect on our ability to enter into or consummate various transactions, or operate any acquired stations at any time in the future.

Executive Officers of the Company

The following table sets forth certain information with respect to our executive officers as of March 11, 2019:



Name	Age	Position(s)
Mary G. Berner	59	President and Chief Executive Officer
John Abbot	56	Executive Vice President, Treasurer and Chief Financial Officer
Richard S. Denning	52	Executive Vice President, Secretary and General Counsel
Suzanne M. Grimes	60	Executive Vice President of Corporate Marketing and President of Westwood One

Mary G. Berner is our President and Chief Executive Officer. Ms. Berner was initially elected to the Board of Directors at our 2015 annual meeting of stockholders. Prior to being appointed as Chief Executive Officer in October 2015, Ms. Berner served as President and Chief Executive Officer of MPA - The Association of Magazine Media since September 2012. From 2007 to 2011, she served as Chief Executive Officer of Reader's Digest Association. Before that, from November 1999 until January 2006, she led Fairchild Publications, Inc., first as President and Chief Executive Officer and then as President of Fairchild and as an officer of Condé Nast. She has also held leadership roles at Glamour and TV Guide. Ms. Berner serves and has served on a variety of industry and not-for-profit boards. Ms. Berner received her Bachelor of Arts from the College of the Holy Cross.

John Abbot is our Executive Vice President, Treasurer, and Chief Financial Officer. Mr. Abbot joined Cumulus Media in July 2016. Prior to joining the Company, Mr. Abbot served as Executive Vice President and Chief Financial Officer of Telx Holdings Inc., a leading provider of connectivity, co-location and cloud services in the data center industry, from 2014 through 2015. Prior to Telx, which was sold to Digital Realty Trust in October 2015, Mr. Abbot served as Chief Financial Officer of Insight Communications Company, Inc., a cable television business, for eight years. During the prior nine years, he worked in the Global Media and Communications Group of the Investment Banking Division at Morgan Stanley, where he ultimately was a Managing Director. Mr. Abbot began his financial career as an associate at Goldman, Sachs & Co., and prior to that served as a Surface Warfare Officer in the U.S. Navy for six years. He received a bachelor’s degree in Systems Engineering from the U.S. Naval Academy, an ME in Industrial Engineering from The Pennsylvania State University, and an MBA from Harvard Business School.

Richard S. Denning is our Executive Vice President, Secretary and General Counsel. Prior to joining the Company in February, 2002, Mr. Denning was an attorney with Dow, Lohnes & Albertson, PLLC (“DL&A”) within DL&A’s corporate

practice group in Atlanta, advising a number of media and communications companies on a variety of corporate and transactional matters. Mr. Denning also spent four years in DL&A’s Washington, D.C. office and has extensive experience in regulatory proceedings before the FCC. Mr. Denning has been a member of the Pennsylvania Bar since 1991, the District of Columbia Bar since 1993, and the Georgia Bar since 2000. He is a graduate of The National Law Center, George Washington University.

Suzanne M. Grimes is our Executive Vice President of Corporate Marketing and President of Westwood One. Prior to joining our Company in January 2016, Ms. Grimes served as Founder and Chief Executive Officer of Jott LLC, a consultancy for media and technology start-ups, since January 2015. From December 2012 to September 2014, Ms. Grimes served as President and Chief Operating Officer of Clear Channel Outdoor North America. Prior to that, Ms. Grimes held leadership roles at News Corp, Condé Nast and Reader’s Digest and previously served on the Board of the Outdoor Advertising Association of America and MPA - The Association of Magazine Media. She currently serves on the board of the Radio Advertising Bureau. Ms. Grimes earned a Bachelor of Science degree in Business Administration from Georgetown University.

Available Information

The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Our Internet site address is www.cumulus.com. The information on our website is not incorporated by reference or part of this or any report we file with or furnish to the SEC. On our site we make available, free of charge, our most recent Annual Report on Form 10-K, subsequent quarterly reports, our proxy statements and other information we file with the SEC, as soon as reasonably practicable after such documents are filed.



Item 1A.	Risk Factors

Many statements contained or incorporated by reference in this Report are forward-looking in nature. These statements are based on our current plans, intentions or expectations, and actual results could differ materially as we cannot guarantee that we will achieve these plans, intentions or expectations. See “— Cautionary Statement Regarding Forward-Looking Statements.” Forward-looking statements are subject to numerous risks and uncertainties, including those specifically identified below. The Company cautions you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Additional factors not presently known to the Company, or that the Company does not currently believe to be material, may also cause actual results to differ materially from expectations. Except as may be required by law, the Company undertakes no obligation to update or alter these forward-looking statements, whether as a result of new information, future events, or otherwise.

We must continue to respond to the rapid changes in technology, services and standards that characterize our industry in order to remain competitive. Our failure to timely or appropriately respond to any such changes could materially adversely affect our business and results of operations.

The radio broadcasting industry is subject to technological change, evolving industry standards and the emergence of other media technologies and services with which we compete for listeners and advertising dollars. We may not have the resources to acquire and deploy other technologies or to create or introduce new services that could effectively compete with these other technologies. Competition arising from other technologies or regulatory change may have a material adverse effect on us, and on the radio broadcasting industry as a whole. Various other audio technologies and services have been developed which compete for listeners and advertising dollars traditionally spent on radio advertising including:


•	personal digital audio and video devices (e.g. smart phones, tablets);


•	satellite delivered digital radio services that offer numerous programming channels such as Sirius Satellite Radio;


•	audio programming by internet content providers, internet radio stations such as Pandora, cable systems, direct broadcast satellite systems and other digital audio broadcast formats;


•	low power FM radio stations, which are non-commercial FM radio broadcast outlets that serve small, localized areas;


•	applications that permit users to listen to programming on a time-delayed basis and to fast-forward through programming and/or advertisements (e.g. podcasts); and


•	search engine and e-commerce websites where a significant portion of their revenues are derived from advertising dollars such as Google and Yelp.

These or other new technologies have the potential to change the means by which advertisers can reach target audiences most effectively. We cannot predict the effect, if any, that competition arising from these or other technologies or regulatory change may have on the radio broadcasting industry as a whole.

We operate in a very competitive business environment and a decrease in our ratings or market share would adversely affect our revenues.

The radio broadcasting industry is very competitive. The success of each of our stations depends largely upon rates it can charge for its advertising which, in turn, depends on, among other things, the number of local advertising competitors and the overall demand for advertising within individual markets. These conditions are subject to change and highly susceptible to both micro- and macro-economic conditions.

Audience ratings and market shares fluctuate, and any adverse change in a particular market could have a material adverse effect on ratings and, consequently, the revenue of stations located in that market. While we already compete with other stations with comparable programming formats in many of our markets, any one of our stations could suffer a reduction in ratings or revenue and could require increased promotion and other expenses, and, consequently, could experience reduced operating results, if:


•	another radio station in the market were to convert its programming format to a format similar to our station or launch aggressive promotional campaigns;


•	a new station were to adopt a competitive format;


•	we experience increased competition from non-radio sources;


•	there is a shift in population, demographics, audience tastes or other factors beyond our control;


•	an existing competitor were to strengthen its operations; or


•	any one or all of our stations were unable to maintain or increase advertising revenue or market share for any other reasons.

The Telecommunications Act of 1996 (“Telecom Act”) opened up markets to competition by removing regulatory barriers to entry. The Telecom Act may allow for the further consolidation of ownership of radio broadcasting stations in markets in which we operate or may operate in the future, which could further increase competition in these markets. In addition, some competing owners may be larger and have substantially more financial and other resources than we do, which could provide them with certain advantages in competing against us. The lifting of cross ownership rules by the FCC in 2018 further removed barriers to competition from local media companies who might purchase radio station in our markets. As a result of all the foregoing, there can be no assurance that the competitive environment will not affect us, and that any one or all of our stations will be able to maintain or increase advertising revenue market share.

The success of our business is dependent upon advertising revenues, which are seasonal and cyclical, and also fluctuate as a result of a number of factors, some of which are beyond our control.

Our main source of revenue is the sale of advertising. Our ability to sell advertising depends on, among other things:


•	economic conditions in the areas where our stations are located and in the nation as a whole;


•	national and local demand for radio advertising;


•	the popularity of the programming offered by our stations;


•	changes in the population demographics in the areas where our stations are located;


•	local and national advertising price fluctuations, which can be affected by the availability of programming, the popularity of programming, and the relative supply of and demand for commercial advertising;


•	the capability and effectiveness of our sales organization;


•	our competitors’ activities, including increased competition from other advertising-based mediums;


•	decisions by advertisers to withdraw or delay planned advertising expenditures for any reason; and


•	other factors beyond our control.

Our operations and revenues also tend to be seasonal in nature, with generally lower revenue generated in the first quarter of the year and generally higher revenue generated in the second and fourth quarters of the year. The seasonality of our business reflects the adult orientation of our formats and relationship between advertising purchases on these formats and the retail cycle. This seasonality causes and will likely continue to cause a variation in our quarterly operating results. Such variations could have a material effect on the timing of our cash flows. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups.

The loss of affiliation agreements by our radio networks could materially adversely affect our financial condition and results of operations.

We have approximately 8,000 broadcast radio stations affiliated with our Westwood One network. Westwood One receives advertising inventory from its affiliated stations, either in the form of stand-alone advertising time within a specified time period or commercials inserted by its radio networks into their programming. In addition, primarily with respect to satellite radio providers, we receive a fee for providing such programming. The loss of network affiliation agreements by Westwood One could adversely affect our results of operations by reducing the audience available for our network programming and, therefore, its attractiveness to advertisers. Renewals of such agreements on less favorable terms may also adversely affect our results of operations through reductions of advertising revenue or increases expenses.

The Term Loan Agreement contains certain restrictions and limitations that could significantly affect Cumulus’s ability to operate its business, as well as significantly affect its liquidity.

The Term Loan Agreement contains a number of significant covenants that could adversely affect Cumulus’s ability to operate its businesses, as well as significantly affect its liquidity, and therefore could adversely affect Cumulus’s results of operations. These covenants restrict (subject to certain exceptions) Cumulus’s ability to: incur additional indebtedness; grant liens; consummate mergers, acquisitions, consolidations, liquidations and dissolutions; sell assets; make investments, loans and advances; make payments and modifications to subordinated and other material debt instruments; enter into transactions with affiliates; consummate sale-leaseback transactions; change its fiscal year; enter into hedging arrangements; allow third parties to manage its stations, and sell substantially all of the stations’ programming or advertising; transfer or assign FCC licenses to third parties; and change its lines of business.

The breach of any covenants or obligations in the Term Loan, not otherwise waived or amended, could result in a default under the Term Loan Agreement and could trigger acceleration of those obligations. Any default under the Term Loan could adversely affect Cumulus’s growth, financial condition, results of operations and ability to make payments on debt.

Disruptions or security breaches of our information technology infrastructure could interfere with our operations, compromise client information and expose us to liability, possibly causing our business and reputation to suffer.

Any internal technology error or failure impacting systems hosted internally or externally, or any large scale external interruption in technology infrastructure we depend on, such as power, telecommunications or the Internet, may disrupt our technology network. Any individual, sustained or repeated failure of technology could negatively impact our operations and customer service and result in increased costs or reduced revenues. Our technology systems and related data also may be vulnerable to a variety of sources of interruption as a result of events beyond our control, including natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers and other security issues. While we have in place, and continue to invest in, technology security initiatives and disaster recovery plans, these measures may not be adequate or implemented properly to prevent a business disruption and its adverse financial impact and consequences to our business's reputation.

In addition, as a part of our ordinary business operations, we may collect and store sensitive data, including personal information of our clients, listeners and employees. The secure operation of the networks and systems on which this type of information is stored, processed and maintained is critical to our business operations and strategy. Any compromise of our technology systems resulting from attacks by hackers or breaches as a result of employee error or malfeasance could result in the loss, disclosure, misappropriation of or access to clients’, listeners’, employees’ or business partners’ information. Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings, significant liability or regulatory penalties under laws protecting the privacy of personal information, disrupt operations and damage our reputation, any or all of which could have a material adverse affect our business.

We have written off, and could in the future be required to write off a significant portion of the fair value of our FCC licenses, which may adversely affect our financial condition and results of operations.

As of December 31, 2018, our (Successor Company) FCC licenses comprised 52.6% of our assets. Each year, and more frequently on an interim basis if appropriate, we are required by Accounting Standards Codification (“ASC”) Topic 350, Intangibles — Goodwill and Other (“ASC350”), to assess the fair value of our FCC broadcast licenses to determine whether the carrying value of those assets is impaired. Significant judgments are required to estimate the fair value of reporting units including estimating future cash flows, near-term and long-term revenue growth, and determining appropriate discount rates, among other assumptions. During the year ended December 31, 2017, we (Predecessor Company) recorded an impairment charge of $335.9 million on our FCC licenses. During the year ended December 31, 2016, we (Predecessor Company) recorded an impairment charge of $603.1 million on our goodwill and FCC licenses. Future impairment reviews could result in additional impairment charges. Any such impairment charges could materially adversely affect our financial results for the periods in which they are recorded.

The public market for our Class A Common Stock may be volatile.

The market price for our Class A common stock could be subject to wide fluctuations as a result of such factors as:

• the total number of shares of Class A common stock available to trade and the low trading volume of the stock;

• the total amount of our indebtedness and our ability to service that debt;

• conditions and trends in the radio broadcasting industry;

• actual or anticipated variations in our operating results, including audience share ratings and financial results;

• estimates of our future performance and/or operations;

• changes in financial estimates by securities analysts;

• technological innovations;

• competitive developments;

• adoption of new accounting standards affecting companies in general or affecting companies in the radio broadcasting industry in particular; and

• general market conditions and other factors.

Further, the stock markets, and in particular the NASDAQ Global Market, the market on which our Class A common

stock is listed, from time to time have experienced extreme price and volume fluctuations that were not necessarily related or

proportionate to the operating performance of the affected companies. In addition, general economic, political and market

conditions such as recessions, interest rate movements or international currency fluctuations, may adversely affect the market

price of our Class A common stock.

We are exposed to credit risk on our accounts receivable. This risk is heightened during periods of uncertain economic conditions.

Our outstanding accounts receivable are not covered by collateral or credit insurance. While we have procedures to monitor and limit exposure to credit risk on our receivables, which risk is heightened during periods of uncertain economic conditions, there can be no assurance such procedures will effectively limit our credit risk and enable us to avoid losses, which could have a material adverse effect on our financial condition and operating results. We also maintain reserves to cover the uncollectibilty of a portion of our accounts receivable. There can be no assurance that such bad debt reserves will be sufficient.

We are dependent on key personnel.

Our business is and is expected to continue to be managed by a small number of key management and operating personnel, and the loss of one or more of these individuals could have a material adverse effect on our business. We believe that our future success will depend in large part on our ability to attract and retain highly skilled and qualified personnel and to effectively train and manage our employee base. Although we have entered into employment and other retention agreements with some of our key management personnel that include provisions restricting their ability to compete with us under specified circumstances, we cannot be assured that all of those restrictions would be enforced if challenged in court.

We also from time to time enter into agreements with on-air personalities with large loyal audiences in their individual markets to protect our interests in those relationships that we believe to be valuable. The loss of one or more of these

personalities could result in losses of audience share in that particular market which, in turn, could adversely affect revenues in that particular market.

The broadcasting industry is subject to extensive and changing federal regulation.

The radio broadcasting industry is subject to extensive regulation by the FCC under the Communications Act. We are required to obtain licenses from the FCC to operate our stations. Licenses are normally granted for a term of eight years and are renewable. Although the vast majority of FCC radio station licenses are routinely renewed, we cannot assure you that the FCC will grant our existing or future renewal applications or that the renewals will not include conditions out of the ordinary course. The non-renewal, or renewal with conditions, of one or more of our licenses could have a material adverse effect on us.

We must also comply with the extensive FCC regulations and policies on the ownership and operation of our radio stations. FCC regulations limit the number of radio stations that a licensee can own in a market, which could restrict our ability to acquire radio stations that could be material to our overall financial performance or our financial performance in a particular market.

The FCC also requires radio stations to comply with certain technical requirements to limit interference between two or more radio stations. Despite those limitations, a dispute could arise whether another station is improperly interfering with the operation of one of our stations or another radio licensee could complain to the FCC that one our stations is improperly interfering with that licensee’s station. There can be no assurance as to how the FCC might resolve such a dispute. These FCC regulations and others may change over time, and we cannot assure you that those changes would not have a material adverse effect on our business and results of operations.

Legislation and regulation of digital media businesses, including privacy and data protection regimes, could create unexpected costs, subject us to enforcement actions for compliance failures, or cause us to change our digital media technology platform or business model.

U.S. and foreign governments have enacted, considered or are currently considering legislation or regulations that relate to digital advertising, including, for example, regulations related to the online collection and use of anonymous user data and unique device identifiers, such as Internet Protocol addresses (“IP address”), unique mobile device identifiers or geo-location data and other privacy and data protection regulation. Such legislation or regulations could affect the costs of doing business online, and could reduce the demand for our digital solutions or otherwise harm our digital operations. For example, a wide variety of state, national and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data. While we take measures to protect the security of information that we collect, use and disclose in the operation of our business, such measures may not always be effective. Data protection and privacy-related laws and regulations are evolving and could result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. In addition, it is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our business practices. Any failure, or perceived failure, by us to comply with U.S. federal, state, or international laws, including laws and regulations governing privacy, data security or consumer protection, could result in proceedings against us by governmental entities, consumers or others. Any such proceedings could force us to spend significant amounts in defense of these proceedings, distract our management, result in fines or require us to pay significant monetary damages, damage our reputation, adversely affect the demand for our services, increase our costs of doing business or otherwise cause us to change our business practices or limit or inhibit our ability to operate or expand our digital operations

The FCC has been vigorous in its enforcement of its rules and regulations, including its indecency, sponsorship identification and EAS rules, violations of which could have a material adverse effect on our business.

The Company is subject to many rules and regulations that govern the operations of its radio stations. The FCC has previously imposed, or sought to impose, fines on the Company, such as a $540,000 penalty imposed on us in early 2016 for sponsorship identification violations occurring in 2011, nearly all of which occurred prior to the Company’s ownership of the station and continued for approximately one month thereafter. The FCC also has shortened the license renewal terms for certain of our radio stations in response to rule violations. It also is not uncommon for a radio station and the FCC to seek to settle alleged rule violations prior to the issuance of an order that would impose fines and other penalties, but such settlements or consent decrees usually result in the station owner paying money to the FCC. Notwithstanding the efforts by the Company to prevent violations of FCC rules and regulations, however, it is likely that the Company will continue to be subject to such penalties (whether through the issuance of orders by the FCC or the execution of settlement agreements) given the number of radio stations owned and/or operated by the Company, and those penalties could be substantial.

FCC’s regulations prohibit the broadcast of “obscene” material at any time, and “indecent” material between the hours of 6:00 a.m. and 10:00 p.m. The FCC has historically enforced licensee compliance in this area through the assessment of monetary forfeitures. Such forfeitures may include: (i) imposition of the maximum authorized fine for egregious cases ($397,251 for a single violation, up to a maximum of $3,666,930 for a continuing violation); and (ii) imposition of fines on a per utterance basis instead of a single fine for an entire program. While we have no knowledge of any pending complaints before the FCC alleging that obscene or indecent material has been broadcast on any of our stations, such complaints may have been, or in the future may be, filed against our stations.

The FCC has recently increased its enforcement of regulations requiring a radio station to include an on-air announcement which identifies the sponsor of all advertisements and other matter broadcast by any radio station for which any money, service or other valuable consideration is received. Fines for such violations can be substantial as they are dependent on the number of times a particular advertisement is broadcast. Similarly, the FCC has recently sought to impose substantial fines on broadcasters who transmit Emergency Alert System (“EAS”) codes, or simulations thereof, in the absence of an actual emergency or authorized test of the EAS. In 2014, for instance, the FCC imposed a fine of $1.9 million on three media companies, and last year imposed a fine of $1 million on a radio broadcaster, in each case based on a determined misuse of EAS tones.

The Company is currently subject to, and may become subject to new, FCC inquiries or proceedings related to our stations’ broadcasts or operations. We cannot predict the outcome of such inquiries and proceedings, but to the extent that such inquiries or proceedings result in the imposition of fines (alone or in the aggregate), a settlement with the FCC, revocation of any of our station licenses or denials of license renewal applications, our results of operation and business could be materially adversely affected.

Legislation could require radio broadcasters to pay additional royalties, including to additional parties such as record labels or recording artists.

We currently pay royalties to song composers and publishers through BMI, ASCAP, SESAC and GMR but not to record labels or recording artists for exhibition or use of over the air broadcasts of music. From time to time, Congress considers legislation which could change the copyright fees and the procedures by which the fees are determined. The legislation historically has been the subject of considerable debate and activity by the broadcast industry and other parties affected by the proposed legislation. It cannot be predicted whether any proposed future legislation will become law or what impact it would have on our results from operations, cash flows or financial position.

We are a holding company with no material independent assets or operations and we depend on our subsidiaries for cash.

We are a holding company with no material independent assets or operations, other than our investments in our subsidiaries. Because we are a holding company, we are dependent upon the payment of dividends, distributions, loans or advances to us by our subsidiaries to fund our obligations. These payments could be or become subject to restrictions under applicable laws in the jurisdictions in which our subsidiaries operate. Payments by our subsidiaries are also contingent upon the subsidiaries’ earnings. If we are unable to obtain sufficient funds from our subsidiaries to fund our obligations, our financial condition and ability to meet our obligations may be adversely affected.

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-K contains and incorporates by reference “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). For purposes of federal and state securities laws, forward-looking statements are all statements other than those of historical fact and are typically identified by the words “believes,”, "contemplates", “expects,” “anticipates,” “continues,” “intends,” “likely,” “may,” “plans,” “potential,” “should,” “will” and similar expressions, whether in the negative or the affirmative. These statements include statements regarding the intent, belief or current expectations of Cumulus and its directors and officers with respect to, among other things, future events, financial results and financial trends expected to impact Cumulus.

Such forward-looking statements are and will be, as the case may be, subject to change and subject to many risks, uncertainties and other factors relating to our operations and business environment, which may cause our actual results to be materially different from any future results, expressed or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following:


•	our achievement of certain expected revenue results, including as a result of factors or events that are unexpected or otherwise outside of our control;


•	our ability to generate sufficient cash flows to service our debt and other obligations and our ability to access capital, including debt or equity;


•	general economic or business conditions affecting the radio broadcasting industry which may be less favorable than expected, decreasing spending by advertisers;


•	changes in market conditions which could impair our intangible assets and the effects of any material impairment of our intangible assets;


•	our ability to execute our business plan and strategy;


•	our ability to attract, motivate and/or retain key executives and associates;


•	increased competition in the radio broadcasting industry and our ability to respond to changes in technology in order to remain competitive;


•	disruptions or security breaches of our information technology infrastructure;


•	the impact of current, pending or future legislation and regulations, antitrust considerations, and pending or future litigation or claims;


•	changes in regulatory or legislative policies or actions or in regulatory bodies;


•	changes in uncertain tax positions and tax rates;


•	changes in the financial markets;


•	changes in capital expenditure requirements;


•	changes in interest rates;


•	the possibility that we may be unable to achieve any expected cost-saving or operational synergies in connection with any acquisitions or business improvement initiatives, or achieve them within the expected time periods; and


•	other risks and uncertainties referenced from time to time in this Form 10-K and other filings of ours with the SEC or not currently known to us or that we do not currently deem to be material.

Many of these factors are beyond our control or are difficult to predict, and their ultimate impact could be material. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this Form 10-K. Except as may be required by law, we do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.



Item 1B.	Unresolved Staff Comments

Not applicable.



Item 2.	Properties

The types of properties required to support each of our radio stations include studios, sales offices, and tower sites. A station’s studios are generally housed with its offices in a business district within the station’s community of license or largest nearby community. The tower sites are generally located in an area to provide maximum market coverage.

We own properties throughout our markets and also lease additional studio, office facilities, and tower sites in support of our business operations. We also lease corporate office space in Atlanta, Georgia, and office space in New York, New York; Dallas, Texas; Denver, Colorado and Los Angeles, California for the production and distribution of our radio network. We do not anticipate any difficulties in renewing any facility leases or in leasing alternative or additional space, if required. We own substantially all of our equipment used in operating our stations and network, consisting principally of transmitting antennae, transmitters, studio equipment, and general office equipment.

No single property is material to our operations. We believe that our properties are generally in good condition and suitable for our operations; however, our studios, office space and transmission facilities require periodic maintenance and refurbishment.



Item 3.	Legal Proceedings

In August 2015, the Company was named as a defendant in two separate putative class action lawsuits relating to its use and public performance of certain sound recordings fixed prior to February 15, 1972 (the "Pre-1972 Recordings"). The first suit, ABS Entertainment, Inc., et. al. v, Cumulus Media Inc., was filed in the United States District Court for the Central District

of California and alleged, among other things, copyright infringement under California state law, common law conversion, misappropriation and unfair business practices. On December 11, 2015, this suit was dismissed without prejudice. The second suit, ABS Entertainment, Inc., v. Cumulus Media Inc., was filed in the United States District Court for the Southern District of New York and claimed, among other things, common law copyright infringement and unfair competition. The New York lawsuit was stayed pending an appeal before the Second Circuit involving unrelated third parties over whether the owner of a Pre-1972 Recording holds an exclusive right to publicly perform that recording under New York common law. On December 20, 2016, the New York Court of Appeals held that New York common law does not recognize a right of public performance for owners of pre-1972 Recordings. As a result of that case (to which Cumulus Media Inc. was not a party) the New York case against Cumulus Media Inc., was voluntarily dismissed by the plaintiffs on April 3, 2017. On October 11, 2018, President Trump signed the Orrin G. Hatch-Bob Goodlatte Music Modernization Act into law, which, among other things, provides new federal rights going forward for owners of pre-1972 Recordings. The question of whether public performance rights existed for Pre-1972 recordings under state law prior to the enactment of the new Music Modernization Act is still being litigated in the Ninth Circuit as a result of a case filed in California. Cumulus is not a party to that case, and the Company is not yet able to determine what effect that proceeding will have, if any, on its financial position, results of operations or cash flows.

The Company currently is, and expects that from time to time in the future it will be, party to, or a defendant in, various other claims or lawsuits that are generally incidental to its business. The Company expects that it will vigorously contest any such claims or lawsuits and believes that the ultimate resolution of any such known claim or lawsuit will not have amaterial adverse effect on the Company’s consolidated financial position, results of operations or cash flows.



Item 4.	Mine Safety Disclosures

Not applicable.

PART II



Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information For Common Stock

Shares of our Class A common stock, par value $0.01 per share, were delisted from the National Association of Securities Dealers Automated Quotations (the "NASDAQ") Capital Market as of November 22, 2017, because the Company was not compliant with Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1). On November 29, 2017, the Company's stock began trading on the OTC Markets. After our emergence from Chapter 11, we applied for relisting on the NASDAQ Global Market and on July 27, 2018, we received notification from NASDAQ that our application was approved. Our Class A common stock began

trading on the NASDAQ Global Market at the open of business on August 1, 2018.

Holders

As of March 11, 2019, there were approximately 289 holders of record of our Class A common stock and 72 holders of record of our Class B common stock. The number of holders of our Class A common stock does not include any estimate of the number of beneficial holders whose shares may be held of record by brokerage firms or clearing agencies.

Dividends

We have not declared or paid any cash dividends on our common stock since our inception and do not currently anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain future earnings for use in our business. We are currently subject to certain restrictions under the terms of the Term Loan with respect to the payment of dividends. For a more detailed discussion of the restrictions in our Credit Agreement, see Note 9, “Long-Term Debt” in the consolidated financial statements included elsewhere in this Form 10-K.

Stock Performance Graph

The following graph compares the total stockholder return on our Class A common stock for the period from July 31, 2018, the month our stock began trading, through December 31, 2018 with that of (1) the Standard & Poor’s 500 Stock Index (“S&P 500”); (2) NASDAQ; and (3) an index (the “Radio Index”) comprised of radio broadcast and media companies (see note (1) below). The total return calculation set forth below assumes $100 invested on July 31, 2018 with reinvestment of dividends into additional shares of the same class of securities at the frequency with, and in the amounts on, which dividends were paid on such securities through December 31, 2018. The stock price performance shown in the graph below should not be considered indicative of expected future stock price performance.

CUMULATIVE TOTAL RETURN



	7/31/2018		8/31/2018		9/30/2018		10/31/2018		11/30/2018		12/31/2018
Cumulus (1)	$	100.00	$	81.44	$	70.86	$	54.07	$	54.07	$	51.67
S&P 500 Index	100.00		100.43		93.46		95.13		95.13		86.39
NASDAQ Index	100.00		99.22		86.76		90.39		90.39		81.82
Radio Index (2)	100.00		96.44		91.24		90.34		90.34		83.01


(1)	As discussed in further detail above, the Company's common stock was delisted from the NASDAQ as of November 22, 2017 and relisted on August 1, 2018, therefore, the Company's stock price performance was calculated starting after that date.


(2)	The Radio Index consists of the following companies: Beasley Broadcast Group, Inc., iHeartMedia, Inc. (formerly Clear Channel Holdings, Inc.), Emmis Communications Corp., Entercom Communications Corp., Urban One, Inc. (formerly Radio One, Inc.), and Saga Communications, Inc.

Pursuant to SEC rules, this “Stock Performance Graph” section of this Form 10-K is not deemed “filed” with the SEC and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.



Item 6.	Selected Financial Data

Set forth below is selected historical consolidated financial information as of December 31, 2018 for the Successor Company, and as of December 31, 2017, 2016, 2015 and 2014 for the Predecessor Company and for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018 and the Predecessor Company years ended December 31, 2017, 2016, 2015 and 2014 (dollars in thousands, except per share data). The selected historical consolidated financial information as of December 31, 2018 for the Successor Company and December 31, 2017 for the Predecessor Company, and for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018 and the Predecessor Company years ended December 31, 2017 and 2016, has been derived from our consolidated financial statements and related notes beginning on page F-2 of this Form 10-K. The selected historical consolidated financial information for the Predecessor Company as of December 31, 2016, 2015 and 2014, and for the years ended December 31, 2015 and 2014, has been derived from our consolidated financial statements, and related notes previously filed with the SEC but not included or incorporated by reference herein.

The selected historical consolidated financial information, which has been adjusted to reflect our October 12, 2016 one-for-eight (1:8) reverse stock split, presented below does not contain all of the information you should consider when evaluating Cumulus and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, and notes thereto, beginning on page F-2 of this Form 10-K. Various factors are expected to have an effect on our financial condition and results of operations in the future. You should also read this selected historical consolidated financial information in conjunction with the information under “Risk Factors” included elsewhere in this Annual Report on Form 10-K.



	Successor Company			Predecessor Company
	Period from June 4, 2018 through December 31, 2018			Period from January 1, 2018 through June 3, 2018			Year Ended December 31, 2017			Year Ended December 31, 2016			Year Ended December 31, 2015			Year Ended December 31, 2014
STATEMENT OF OPERATIONS DATA:
Net revenue	$	686,436		$	453,924		$	1,135,662		$	1,141,400		$	1,168,679		$	1,263,423
Content costs	238,888			163,885			409,213			432,077			396,426			433,596
Selling, general & administrative expenses	276,551			195,278			471,300			468,603			477,327			470,441
Depreciation and amortization	34,060			22,046			62,239			87,267			102,105			115,275
LMA fees	2,471			1,809			10,884			12,824			10,129			7,195
Corporate expenses (including non-cash stock-based compensation expense)	31,714			17,169			59,062			40,148			73,403			76,428
Loss (gain) on sale of assets or stations	103			158			(2,499		)	(95,695		)	2,856			(1,342		)
Impairment of intangible assets and goodwill (1)	—			—			335,909			604,965			565,584			—
Impairment charges - equity interest in Pulser Media Inc.	—			—			—			—			19,364			—
Operating income (loss)	102,649			53,579			(210,446		)	(408,789		)	(478,515		)	161,830
Reorganization items, net (2)	—			466,201			(31,603		)	—			—			—
Interest expense	(50,718		)	(260		)	(126,952		)	(138,634		)	(141,679		)	(145,533		)
Interest income	36			50			136			493			433			1,388
Gain (loss) on early extinguishment of debt	201			—			(1,063		)	8,017			13,222			—
Other (expense) income, net	(3,096		)	(273		)	(363		)	2,039			14,205			4,338
Income (loss) from continuing operations before income taxes	49,072			519,297			(370,291		)	(536,874		)	(592,334		)	22,023
Income tax benefit (expense)	12,353			176,859			163,726			26,154			45,840			(10,254		)
Net income (loss)	$	61,425		$	696,156		$	(206,565	)	$	(510,720	)	$	(546,494	)	$	11,769
Income (loss) attributable to common shareholders	$	61,425		$	696,156		$	(206,565	)	$	(510,720	)	$	(546,494	)	$	11,769
Basic (loss) income per common share	$	3.07		$	23.73		$	(7.05	)	$	(17.45	)	$	(18.72	)	$	0.40
Diluted (loss) income per common share	$	3.05		$	23.73		$	(7.05	)	$	(17.45	)	$	(18.72	)	$	0.40



	Successor Company			Predecessor Company
	Period from June 4, 2018 through December 31,			Period from January 1, 2018 through June 3,			Year Ended December 31,			Year Ended December 31,			Year Ended December 31,			Year Ended December 31,
	2018			2018			2017			2016			2015			2014
OTHER DATA:
Cash flows related to:
Operating activities	$	32,398		$	29,132		$	86,596		$	35,745		$	90,413		$	136,796
Investing activities	$	(33,098	)	$	(14,019	)	$	(25,842	)	$	83,898		$	(7,961	)	$	(15,572	)
Financing activities	$	(57,613	)	$	(38,652	)	$	(88,148	)	$	(19,997	)	$	(50,085	)	$	(146,745	)
Capital expenditures	$	(15,684	)	$	(14,019	)	$	(31,932	)	$	(23,037	)	$	(19,236	)	$	(19,006	)

	Successor Company			Predecessor Company
	December 31, 2018			December 31, 2017			December 31, 2016			December 31, 2015			December 31, 2014
BALANCE SHEET DATA:
Total assets	$	1,775,152		$	2,027,319		$	2,412,691		$	3,002,388		$	3,717,572
Long-term debt (including current portion) (3)	$	1,243,299		$	2,332,209		$	2,384,157		$	2,402,901		$	2,457,258
Total stockholders’ equity (deficit)	$	389,829		$	(696,115	)	$	(491,738	)	$	16,032		$	541,580


(1)	Impairment charges in 2017, 2016 and 2015 were recorded in connection with our interim and annual impairment testing under ASC 350. See Note 7, “Intangible Assets and Goodwill,” in the consolidated financial statements included elsewhere in this Form 10-K for further discussion.


(2)	Reorganization items recorded in connection with our chapter 11 cases. See Note 3, “Fresh Start Accounting,” in the consolidated financial statements included elsewhere in this Form 10-K for further discussion.


(3)	Long-term debt was classified in the Company's liabilities subject to compromise as of December 31, 2017.



Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations

General Overview

The following discussion of our financial condition and results of operations should be read in conjunction with the other information contained in this Form 10-K, including our consolidated financial statements and notes thereto beginning on page F-2 in this Form 10-K, as well as the information set forth in Item 1A "Risk Factors." This discussion, as well as various other sections of this Annual Report, contains and refers to statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are any statements other than those of historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial and strategic performance. Any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors. For more information, see "Cautionary Statements Regarding Forward-Looking Statements."

For additional information about certain of the matters discussed and described in the following Management's Discussion and Analysis of Financial Condition and Results of Operations, including certain defined terms used herein, see the notes to the accompanying audited consolidated financial statements included elsewhere in this Annual Report.

Our Business and Operating Overview

A leader in the radio broadcasting industry, CUMULUS MEDIA combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million people reached each week through our 433 owned-and-operated stations broadcasting in 88 US media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with our Westwood One network and numerous digital channels. Together, the Cumulus/Westwood One platforms make Cumulus one of the few media companies that can provide advertisers with national reach and local impact. Cumulus/Westwood One is the exclusive radio broadcast partner to some of the largest brands in sports, entertainment, news, and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, Westwood One News, and more. Additionally we are the nation's leading provider of country music and lifestyle content through our NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events.

We generate revenue through monetization of our programming content and other sources across the following four major revenue streams:

Broadcast advertising revenue. Most of our revenue is generated through the sale of terrestrial, broadcast radio advertising time to local, regional, and national clients. Local spot and regional spot advertising is sold by Cumulus employed sales personnel. National spot advertising for our owned-and-operated stations is marketed and sold by both Katz Media in an outsourced arrangement as well as our own internal national sales team, which collectively market to advertisers under the sales brand of Westwood One Media Sales. Network advertising airing across our owned, operated and affiliated stations is sold by our internal sales team located across the United States under the Westwood One brand to predominantly national and regional advertisers.

Digital advertising and marketing services revenue. We generate digital advertising revenue from the sale of advertising and promotional opportunities across our streaming audio network, digital commerce platform, websites and mobile applications. We operate one of the largest streaming audio advertising networks in the United States, including owned and operated internet radio simulcast stations. We also sell advertising adjacent to, or embedded in, podcasts through our network of owned and third party podcasts. In addition, we sell an array of digital marketing services such as, email marketing, geo-targeting, website building and hosting, reputation management and search engine optimization within our Cumulus C-Suite digital marketing solutions portfolio to existing and new clients of our radio stations. Additionally, our digital commerce platform utilizes couponing and discounted daily deals to create promotional opportunities for local, regional and national clients under our Sweet Deals and Incentrev brands. We also sell banner and other display ads across more than 400 local radio station websites, mobile applications, and ancillary custom client microsites.

Political advertising revenue. Political advertising revenue is generated across all of our broadcast and digital assets, but we highlight it as a separate category to distinguish its highly cyclical nature versus our core advertising revenue. Political advertising is generally strongest during even-numbered years, especially in the fourth quarter of such years, when most national and state elections are conducted. In addition to candidate advertising revenue, we also receive advertising revenue from special interest and advocacy groups.

License fees & other. All other non-advertising based revenue types in which the Company participates are aggregated in our License fees & other revenue category. This includes fees we receive for content licensing, subleases and rents (predominantly for owned towers), proprietary software licensing, and all other revenue.

Seasonality and Cyclicality

Emergence from Chapter 11

For information about our emergence from Chapter 11 see Item 1 "Business - Emergence from Chapter 11" and the notes to the accompanying audited consolidated financial statements included elsewhere in this Annual Report.

Advertising Revenue

Our primary source of revenue is the sale of advertising time. Our sales of advertising time are primarily affected by the demand from local, regional and national advertisers, which also impacts the advertising rates we charge. Advertising demand and rates are based primarily on the ability to attract audiences in the demographic groups targeted by such advertisers, as measured principally by various ratings agencies on a periodic basis. We endeavor to provide compelling programming and form connections between our on-air talent and listeners in order to develop strong listener loyalty, and we believe that the diversification of our formats and programs, including non-music formats and proprietary content, helps to insulate us from the effects of changes in the musical tastes of the public with respect to any particular format.

We strive to maximize revenue by managing our on-air inventory of advertising time and adjusting prices based on supply and demand. The optimal number of advertisements available for sale depends on the programming format of a particular radio program. Each program has a general target level of on-air inventory available for advertising. This target level of advertising inventory may vary at different times of the day but tends to remain stable over time. We seek to broaden our base of advertisers in each of our markets by providing a wide array of audience demographic segments across each cluster of stations, thereby providing potential advertisers with an effective means to reach a targeted demographic group. Our advertising contracts are generally short-term. We generate most of our revenue from local and regional advertising, which is sold primarily by a station’s sales staff.

In addition to local and regional advertising revenues, we monetize our available inventory in both national spot and network sales marketplaces using our national platform. To effectively deliver network advertising for our customers, we distribute content and programming through third party affiliates in order to reach a broader national audience. Typically, in exchange for the right to broadcast radio network programming, third party affiliates remit a portion of their advertising time to us, which is then aggregated into packages focused on specific demographic groups and sold by us to our advertiser clients that want to reach those demographic groups on a national basis.

In the broadcasting industry, we sometimes utilize trade or barter agreements that exchange advertising time for goods or services such as travel or lodging, instead of for cash. Trade revenue totaled $26.5 million, $18.9 million, $40.1 million and $37.7 million for the Successor Company from period June 4, 2018 through December 31, 2018, the Predecessor Company period from January 1, 2018 through June 3, 2018 and the Predecessor Company years ended December 31, 2017 and 2016, respectively.

We continually evaluate opportunities to increase revenues through new platforms, including technology-based initiatives. As a result of those revenue increasing opportunities, 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, if at all. In addition, as part of this evaluation we also from time to time reorganize and discontinue certain redundant and/or unprofitable content vehicles across our platform which we expect will impact our broadcast revenues in the future. To date inflation has not had a material effect on our revenues or results of operations, although no assurances can be provided that material inflation in the future would not materially adversely affect us.

Non-GAAP Financial Measure

From time to time we utilize certain financial measures that are not prepared or calculated in accordance with GAAP to assess our financial performance and profitability. Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) and segment Adjusted EBITDA are the financial metrics by which management and the chief operating decision maker allocate resources of the Company and analyze the performance of the Company as a whole and each of our reportable segments, respectively. Management also uses this measure to determine the contribution of our core operations to the funding of our corporate resources utilized to manage our operations and our non-operating expenses including debt service and acquisitions. In addition, consolidated Adjusted EBITDA is a key metric for purposes of calculating and determining our compliance with certain covenants contained in our Credit Agreement.

In determining Adjusted EBITDA, we exclude from net income items not related to core operations and those that are non-cash including: interest, taxes, depreciation, amortization, stock-based compensation expense, gain or loss on the exchange, sale, or disposal of any assets or stations, early extinguishment of debt, local marketing agreement fees, expenses relating to acquisitions, divestitures, restructuring costs, reorganization items and non-cash impairments of assets, if any.

Management believes that Adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, is commonly employed by the investment community as a measure for determining the market value of a media company and comparing the operational and financial performance among media companies. Management has also observed that Adjusted EBITDA is routinely utilized to evaluate and negotiate the potential purchase price for media companies. Given the relevance to our overall value, management believes that investors consider the metric to be extremely useful.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), operating income, cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with GAAP. In addition, Adjusted EBITDA may be defined or calculated differently by other companies, and comparability may be limited.

Consolidated Results of Operations

Analysis of Consolidated Statements of Operations

For the purposes of the analysis of the results presented herein, the Company is presenting the combined results of operations for the period June 4, 2018 to December 31, 2018 of the Successor Company with the period January 1, 2018 to June 3, 2018 of the Predecessor Company. Although this presentation is not in accordance with accounting principles generally accepted in the United States, the Company believes presenting and analyzing the combined results allows for a more meaningful comparison of results for the twelve-month period ended December 31, 2018 to the twelve months ended December 31, 2017. The following selected data from our audited consolidated statements of operations and other supplementary data should be referred to while reading the results of operations discussion that follows (dollars in thousands):



	Successor Company			Predecessor Company						Predecessor Company						Non- GAAP
	Period from June 4, 2018 through December 31,			Period from January 1, 2018 through June 3,			Non-GAAP Combined Period Year Ended December 31,			Year ended December 31,			Year ended December 31,			2018 vs 2017 Change					2017 vs 2016 Change
	2018			2018			2018			2017			2016			$			%		$			%
STATEMENT OF OPERATIONS DATA:
Net revenue	$	686,436		$	453,924		$	1,140,360		$	1,135,662		$	1,141,400		$	4,698		0.4	%	$	(5,738	)	-0.5	%
Content costs	238,888			163,885			402,773			409,213			432,077			(6,440		)	-1.6	%	(22,864		)	-5.3	%
Selling, general & administrative expenses	276,551			195,278			471,829			471,300			468,603			529			0.1	%	2,697			0.6	%
Depreciation and amortization	34,060			22,046			56,106			62,239			87,267			(6,133		)	-9.9	%	(25,028		)	-28.7	%
Local marketing agreement fees	2,471			1,809			4,280			10,884			12,824			(6,604		)	-60.7	%	(1,940		)	-15.1	%
Corporate expenses (including stock-based compensation expense)	31,714			17,169			48,883			59,062			40,148			(10,179		)	-17.2	%	18,914			47.1	%
Loss (gain) on sale of assets or stations	103			158			261			(2,499		)	(95,695		)	2,760			**		93,196			**
Impairment of intangible assets and goodwill	—			—			—			335,909			604,965			(335,909		)	**		(269,056		)	**
Operating income (loss)	102,649			53,579			156,228			(210,446		)	(408,789		)	366,674			**		198,343			-48.5	%
Reorganization items, net	—			466,201			466,201			(31,603		)	—			**			**		**			**
Interest expense	(50,718		)	(260		)	(50,978		)	(126,952		)	(138,634		)	75,974			-59.8	%	11,682			-8.4	%
Interest income	36			50			86			136			493			(50		)	-36.8	%	(357		)	-72.4	%
Gain (loss) on early extinguishment of debt	201			—			201			(1,063		)	8,017			1,264			**		(9,080		)	**
Other (expense) income, net	(3,096		)	(273		)	(3,369		)	(363		)	2,039			(3,006		)	**		(2,402		)	**
Income (loss) from continuing operations before income taxes	49,072			519,297			568,369			(370,291		)	(536,874		)	938,660			**		166,583			**
Income tax benefit	12,353			176,859			189,212			163,726			26,154			25,486			15.6	%	137,572			**
Net income (loss)	$	61,425		$	696,156		$	757,581		$	(206,565	)	$	(510,720	)	$	964,146		**		$	304,155		-59.6	%
OTHER DATA:
Adjusted EBITDA	$	153,835		$	80,512		$	234,347		$	217,751		$	205,867		$	16,596		7.6	%	$	11,884		5.8	%



**	Calculation is not meaningful.

Fresh Start Accounting Adjustments

The Company's operating results and key operating performance measures were not materially impacted by our emergence from Chapter 11. We believe that certain of our consolidated operating results for the period from January 1, 2018 through June 3, 2018 (“2018 Predecessor Period”), when combined with our consolidated operating results for the period from June 4, 2018 through December 31, 2018 (“Successor Period”) are comparable to certain operating results from the comparable prior year’s periods. Accordingly, we believe that discussing the combined results of operations and cash flows of the Predecessor Company and the Successor Company for the year ended December 31, 2018 is useful when analyzing certain financial performance measures. For items that are not comparable, we have included additional analysis to supplement the discussion.

2018 Successor Company Period June 4, 2018 through December 31, 2018 and Predecessor Company period January 1, 2018 through June 3, 2018 ("Successor and Predecessor Company year ended December 31, 2018") compared to Predecessor Company Year Ended December 31, 2017

Net Revenue

Net revenue for the Successor and Predecessor Company year ended December 31, 2018 compared to net revenue for the Predecessor Company year ended December 31, 2017 increased because of increases in national advertising revenue, digital advertising revenue and cyclical political revenue, partially offset by a decline in local broadcast advertising revenue within our radio markets and the loss of approximately $2.4 million in revenue from United States Traffic Networks (“USTN”). For a discussion of net revenue by segment and a comparison by segment of the Successor and Predecessor Company year ended December 31, 2018 and the Predecessor Company year ended December 31, 2017, see the discussion under “Segment Results of Operations”.

Content Costs

Content costs consist of all costs related to the licensing, acquisition and development of our programming. Content costs for the Successor and Predecessor Company year ended December 31, 2018 compared to the Predecessor Company year ended December 31, 2017 decreased primarily as a result of the termination or renegotiation of certain contractual agreements, in some cases in connection with the filing of the Chapter 11 Cases and a decrease in employee costs partially offset by an increase in digital costs associated with higher digital revenue during 2018.

Selling, General & Administrative Expenses

Selling, general and administrative expenses consist of expenses related to our sales efforts and distribution of our content across our platform and overhead in our markets. Selling, general and administrative expenses for the Successor and Predecessor Company year ended December 31, 2018 compared to the Predecessor Company year ended December 31, 2017 was essentially flat primarily as a result of lower sales commissions associated with lower broadcast revenue and the impact of our implementation of ASC 606 as well lower salary expense, ratings service fees and legal fees. These decreases were offset by a $4.1 million bad debt expense related to receivables from USTN.

Depreciation and Amortization

Depreciation and amortization for the Successor and Predecessor Company year ended December 31, 2018 are not directly comparable to depreciation and amortization for the Predecessor Company year ended December 31, 2017. During the Successor and Predecessor Company year ended December 31, 2018, depreciation and amortization expense decreased because of our application of fresh start accounting where the fair value of our fixed assets and intangible assets decreased.

Local Marketing Agreement Fees

Local marketing agreements are those agreements under which we program a radio station on behalf of another party. During the quarter ended March 31, 2018, the Company and Merlin Media, LLC (“Merlin”) amended their local marketing agreement under which the Company programmed two FM radio stations owned by Merlin. The Company ceased programming one of the stations (“WLUP”) on March 9, 2018. On June 15, 2018, the Company purchased the other station (“WKQX”) and certain intellectual property for $18.0 million in cash.

Corporate Expenses, Including Stock-based Compensation Expense and Acquisition-related and Restructuring Costs

Corporate expenses consist primarily of compensation and related costs for our executive, accounting, finance, human resources, information technology and legal personnel, and fees for professional services. Professional services are principally comprised of audit, consulting and outside legal services. Corporate expenses also include restructuring expenses and stock-

based compensation expense. Corporate expenses for the Successor and Predecessor Company year ended December 31, 2018 compared to the Predecessor Company year ended December 31, 2017 decreased primarily as a result of a decrease in professional fees and corporate employee costs.

Reorganization Items, Net

During the Predecessor Company period from January 1, 2018 through June 3, 2018, we recorded costs related to our Chapter 11 Cases. Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Consolidated Statements of Operations and were as follows (dollars in thousands):



	Predecessor Company
		Period from January 1, 2018 through June 3, 2018
Gain on settlement of Liabilities subject to compromise (a)		$	726,831
Fresh start adjustments (b)		(179,291		)
Professional fees (c)		(54,386		)
Non-cash claims adjustments (d)		(15,364		)
Rejected executory contracts (e)		(5,976		)
Other (f)		(5,613		)
Reorganization items, net		$	466,201

(a) Liabilities subject to compromise have been, or will be settled in accordance with the Plan.

(b) Revaluation of certain assets and liabilities upon the adoption of fresh start accounting.

(d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court.

(e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts.

(f) Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process and the write-off of Predecessor director and officer insurance policies.

Interest Expense

Total interest expense for the Successor and Predecessor Company year ended December 31, 2018 is not comparable to that of the Predecessor Company year ended December 31, 2017 as we did not pay certain interest expenses during the Predecessor Company period from January 1, 2018 through June 3, 2018. During that period we made adequate protection payments on the Predecessor Term Loan in lieu of interest payments. In accordance with ASC 852, we recognized the adequate protection payments as reductions in the principal balance of the Predecessor Term Loan. We did not make any interest payments on the 7.75% Senior Notes.

During the Successor Company period from June 4, 2018 through December 31, 2018, we recorded interest expense of approximately $50.0 million on $1.3 billion in outstanding debt at an average interest rate of approximately 6.7%. During the Predecessor Company year ended December 31, 2017, we recorded and paid interest expense in accordance with the provisions of the then outstanding debt agreements prior to the Petition Date.



	Successor Company		Predecessor Company		Non- GAAP Combined				2018 vs 2017
	Period from June 4, 2018 through December 31, 2018		Period from January 1, 2018 through June 3, 2018		Year Ended December 31, 2018		Year Ended December 31, 2017		$ Change			% Change
Bank borrowings – Term Loan	$	50,028	$	—	$	50,028	$	—	$	50,028		**
7.75% Senior Notes	—		—		—		43,335		(43,335		)	**
Bank borrowings – Predecessor Term Loan	—		—		—		72,362		(72,362		)	**
Other, including debt issue cost amortization	690		260		950		11,255		(10,305		)	**
Interest expense	$	50,718	$	260	$	50,978	$	126,952	$	(75,974	)	**



**	Calculation is not meaningful.

Other (Expense) Income, net

During the Successor and Predecessor Company year ended December 31, 2018, we recorded a non-cash charge of $3.2 million to write off our investment in NextRadio. There were no similar charges for the Predecessor Company year ended December 31, 2017.

Income Tax Benefit

We recorded an income tax benefit on continuing operations of $12.4 million for the Successor Company period from June 4, 2018 through December 31, 2018 and income tax benefit of $176.9 million for the Predecessor Company period from January 1, 2018 through June 3, 2018 as compared to a $163.7 million benefit during the Predecessor Company year ended December 31, 2017. The tax benefits recorded in the Successor and Predecessor Company year ended December 31, 2018 were primarily the result of the bankruptcy emergence, reorganization charges and related tax elections, while the tax benefit recorded in the Predecessor Company year ended December 31, 2017 was primarily the result of pre-tax losses, the effect of a corporate tax rate change pursuant to tax reform, and the establishment of a valuation allowance related to our net operating loss deferred tax assets.

Adjusted EBITDA

As a result of the factors described above, Adjusted EBITDA for the Successor and Predecessor Company year ended December 31, 2018 compared to the Predecessor Company year ended December 31, 2017 increased. For a discussion of Adjusted EBITDA by segment and a comparison by segment of the Successor and Predecessor Company year ended December 31, 2018 to the Predecessor Company year ended December 31, 2017, see the discussion under "Segment Results of Operations."

Reconciliation of Non-GAAP Financial Measure

The following table reconciles Adjusted EBITDA to net income (loss) (the most directly comparable financial measure calculated and presented in accordance with GAAP) as presented in the accompanying consolidated statements of operations (dollars in thousands):



	Successor Company			Predecessor Company			Non- GAAP Combined
	Period from June 4, 2018 through December 31, 2018			Period from January 1, 2018 through June 3, 2018			Year Ended December 31, 2018			Year Ended December 31, 2017			2018 vs 2017 % Change
GAAP net income (loss)	$	61,425		$	696,156		$	757,581		$	(206,565	)	**
Income tax benefit	(12,353		)	(176,859		)	(189,212		)	(163,726		)	15.6	%
Non-operating expenses, including net interest expense	53,777			483			54,260			127,179			(57.3	)%
Local marketing agreement fees	2,471			1,809			4,280			10,884			(60.7	)%
Depreciation and amortization	34,060			22,046			56,106			62,239			(9.9	)%
Stock-based compensation expense	3,404			231			3,635			1,614			125.2	%
Loss (gain) on sale of assets or stations	103			158			261			(2,499		)	**
Impairment of intangible assets and goodwill	—			—			—			335,909			**
Reorganization items, net	—			(466,201		)	(466,201		)	31,603			**
Acquisition-related and restructuring costs	11,194			2,455			13,649			19,492			**
Franchise and state taxes	(45		)	234			189			558			(66.1	)%
(Gain) loss on early extinguishment of debt	(201		)	—			(201		)	1,063			**
Adjusted EBITDA	$	153,835		$	80,512		$	234,347		$	217,751		7.6	%



**	Calculation is not meaningful.

Intangible Assets (including Goodwill), net. Intangible assets, net of amortization, were $1,129.2 million and $1,422.0 million as of December 31, 2018 and 2017, respectively. These intangible asset balances primarily consist of broadcast licenses and goodwill. Intangible assets, net, decreased from the prior year because our application of fresh start accounting where we recorded our assets at fair value and eliminated goodwill as of the Effective Date.

Predecessor Company Year Ended December 31, 2017 compared to Predecessor Company Year Ended December 31, 2016

Net Revenue

Net revenue for the year ended December 31, 2017 decreased $5.7 million, or 0.5%, to $1,135.7 million compared to$1,141.4 million for the year ended December 31, 2016. The decrease resulted from decreases of $12.1 million and $0.9 million in political advertising and broadcast advertising, respectively, partially offset by increases of $4.6 million and $2.7 million in digital advertising and license fees and other revenue, respectively. For a discussion of net revenue by segment and a comparison between the year ended December 31, 2017 to the year ended December 31, 2016, see the discussion under "Segment Results of Operations."

Content Costs

Content costs for the year ended December 31, 2017 decreased $22.9 million or 5.3%, to $409.2 million compared to $432.1 million for the year ended December 31, 2016. The decrease was primarily driven by the impact of an expense of $14.4 million at Westwood One incurred during the third quarter of 2016, related to payments to CBS to resolve previously disputed syndicated programming and network inventory expenses, and lower content costs at the Station Group, partially offset by higher content costs at Westwood One associated with increased revenue.

Selling, General & Administrative Expenses

Selling, general & administrative expenses for the year ended December 31, 2017 increased $2.7 million, or 0.6%, to $471.3 million compared to $468.6 million for the year ended December 31, 2016. The increase resulted primarily from an increase of $4.7 million in bad debt expense.

Depreciation and Amortization

Depreciation and amortization for the year ended December 31, 2017 decreased $25.0 million, or 28.7%, to $62.2 million compared to $87.3 million for the year ended December 31, 2016. This decrease was primarily caused by a decrease in amortization expense on our definite-lived intangible assets, which resulted from the accelerated amortization methodology we have applied since acquisition of these assets that is based on the expected pattern in which the underlying assets' economic benefits are being consumed.

Local Marketing Agreement Fees

Local marketing agreement fees for the year ended December 31, 2017 decreased $1.9 million, or 15.1%, to $10.9 million compared to $12.8 million for the year ended December 31, 2016. This decrease was primarily related to an expense of $2.7 million for a termination of a LMA in the San Francisco market in 2016.

Corporate Expenses, Including Stock-based Compensation Expense and Acquisition-related and Restructuring Costs

Corporate expenses, including stock-based compensation expense and acquisition-related and restructuring costs for the year ended December 31, 2017, increased $18.9 million or 47.1%, to $59.1 million compared to $40.1 million for the year ended December 31, 2016. This increase was primarily the result of increased professional fees related to the Company's debt restructuring efforts, partially offset by decreases in professional services and stock-based compensation expenses.

Impairment of Intangible Assets and Goodwill

During the year ended December 31, 2017, we recorded impairment charges related to our FCC license intangible assets of $335.9 million. During the year ended December 31, 2016, we recorded impairment charges related to goodwill and intangible assets, including FCC licenses, of $568.1 million and $36.9 million, respectively. For additional information on these charges, see Note 7, Intangible Assets and Goodwill in the consolidated financial statements included elsewhere in this Form 10-K.

(Gain) Loss on Sale of Assets or Stations

During the year ended December 31, 2017, we recorded a gain on sale of assets or stations of $2.5 million primarily related to the sale of land in Salt Lake City, Utah. During the year ended December 31, 2016, we recorded a gain on sale of assets or stations of $95.7 million, primarily related to the sale of real property in Los Angeles, California.

Reorganization Items, Net

During the year ended December 31, 2017, we recorded costs related to our chapter 11 cases of $31.6 million.

Interest Expense

Interest expense for the year ended December 31, 2017 decreased $11.7 million to $127.0 million compared to $138.6 million for the year ended December 31, 2016 as we did not pay certain interest expenses after the Petition Date. The following summary details the components of our interest expense (dollars in thousands):



	Predecessor Company
	Year Ended December 31,				2017 vs 2016
	2017		2016		$ Change			% Change
7.75% Senior Notes	$	43,335	$	47,275	$	(3,940	)	(8.3	)%
Bank borrowings — term loans and revolving credit facilities	72,362		79,451		(7,089		)	(8.9	)%
Other, including debt issue cost amortization	11,255		11,908		(653		)	(5.5	)%
Interest expense	$	126,952	$	138,634	$	(11,682	)	(8.4	)%

The decrease in interest expense related to the 7.75% Senior Notes was a result of forgoing interest payments in connection with the bankruptcy petitions. As a result, the Company's interest expense for the year ended December 31, 2017 was approximately $3.9 million lower than it would have been absent the filing of the voluntary petitions for reorganization.

In addition, during the pendency of our Chapter 11 cases, we made adequate protection payments on the Predecessor Term Loan in lieu of interest payments. In accordance with ASC 852, we recognized the adequate protection payments as reductions in the principal balance of the Predecessor Term Loan.

Income Tax Benefit

We recorded an income tax benefit from operations of $163.7 million in 2017 as compared to an income tax benefit of $26.2 million during the prior year. The tax benefits recorded in both periods were primarily the result of the pre-tax losses on operations net of the amount of intangible assets impairment and, in 2017, the effect of tax reform and the establishment of a valuation allowance related to our net operating loss deferred tax assets. The Tax Cuts and Jobs Act (“the Act”) was enacted on December 22, 2017. The Act, among other changes, reduces the US federal corporate tax rate from 35% to 21% for tax years after 2017. At December 31, 2017, the Company had not completed its accounting for the tax effects of enactment of the Act; however, in certain cases, it made a reasonable estimate of the effects on its existing deferred tax balances. As described in Note 13 "Income Taxes", the Company completed its accounting for the Act during 2018.

Adjusted EBITDA

As a result of the factors described above, Adjusted EBITDA for the year ended December 31, 2017 increased $11.9 million, or 5.8%, to $217.8 million compared to $205.9 million for the year ended December 31, 2016.

Reconciliation of Non-GAAP Financial Measure

The following table reconciles Adjusted EBITDA to net loss (the most directly comparable financial measure calculated and presented in accordance with GAAP) as presented in the accompanying consolidated statements of operations (dollars in thousands):



	Predecessor Company
	Year Ended December 31,
	2017			2016			% Change
GAAP net loss	$	(206,565	)	$	(510,720	)	59.6	%
Income tax benefit	(163,726		)	(26,154		)	**
Non-operating expenses, including net interest expense	127,179			136,102			(6.6	)%
Local marketing agreement fees	10,884			12,824			(15.1	)%
Depreciation and amortization	62,239			87,267			(28.7	)%
Stock-based compensation expense	1,614			2,948			(45.3	)%
(Gain) loss on sale of assets or stations	(2,499		)	(95,695		)	(97.4	)%
Impairment of intangible assets and goodwill	335,909			604,965			(44.5	)%
Reorganizations items, net	31,603			—			**
Acquisition-related and restructuring costs	19,492			1,817			**
Franchise and state taxes	558			530			5.3	%
Gain on early extinguishment of debt	1,063			(8,017		)	**
Adjusted EBITDA	$	217,751		$	205,867		5.8	%

** Calculation is not meaningful

Intangible Assets (including Goodwill), net. Intangible assets, net of amortization, were $1,422.0 million and $1,791.9 as of December 31, 2017 and 2016, respectively. These intangible asset balances primarily consist of broadcast licenses and goodwill. Intangible assets, net, decreased from the prior year primarily as a result of impairment charges related to goodwill and indefinite-lived intangible assets and amortization recognized on definite-lived intangible assets.

Segment Results of Operations

The Company operates in two reportable segments, for which there is discrete financial information available and whose operating results are reviewed by the chief operating decision maker, the Cumulus Radio Station Group and Westwood One. Cumulus Radio Station Group revenue is derived primarily from the sale of broadcasting time to local, regional, and national advertisers. Westwood One revenue is generated primarily through network advertising. Corporate and Other includes overall executive, administrative and support functions for both of our reportable segments, including programming, finance, legal, human resources and information technology functions.

As described above, Adjusted EBITDA is a non-GAAP financial metric utilized by management to analyze the performance of each of our reportable segments. The reconciliation of segment Adjusted EBITDA to net loss is presented in Note 18, "Segment Data" of the notes to the consolidated financial statements.

The Company’s financial data by segment is presented in the tables below:



	Period from June 4, 2018 through December 31, 2018 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	477,118		$	207,702		$	1,616		$	686,436
% of total revenue	69.5		%	30.3		%	0.2		%	100.0		%



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	303,317		$	149,715		$	892		$	453,924
% of total revenue	66.8		%	33.0		%	0.2		%	100.0		%



	Year Ended December 31, 2017 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	786,963		$	346,165		$	2,534		$	1,135,662
% of total revenue	69.3		%	30.5		%	0.2		%	100.0		%

Net revenue for the Successor and Predecessor Company year ended December 31, 2018 compared to the Predecessor Company year ended December 31, 2017 increased. The increase resulted from an increase in revenue at Westwood One, partially offset by a decrease at the Cumulus Radio Station Group, while Corporate and Other revenue was essentially flat. The decrease in revenue at the Cumulus Radio Station Group was primarily driven by decreases in local advertising revenue and the loss of revenue from WLUP. The increase in revenue at Westwood One was primarily driven by increases in broadcast and digital revenue partially offset by the loss of approximately $2.4 million in revenue from USTN.



	Period from June 4, 2018 through December 31, 2018 (Successor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	131,509	$	39,743	$	(17,417	)	$	153,835



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	76,009	$	19,210	$	(14,707	)	$	80,512



	Year Ended December 31, 2017 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	197,775	$	54,260	$	(34,284	)	$	217,751

Adjusted EBITDA for the Successor and Predecessor Company year ended December 31, 2018 compared to the Predecessor Company year ended December 31, 2017 increased as a result of adjusted EBITDA increases at each segment. Adjusted EBITDA at the Cumulus Radio Station Group increased as a result of lower costs, the increase at Westwood One was a result of increased revenues and certain lower content expenses, partially offset by the $4.1 million in bad debt expense and $2.4 million in lost revenue related to USTN and increases in expenses related to higher revenue. Adjusted EBITDA at Corporate and Other increased as a result of a decline in expenses.



	Year Ended December 31, 2017 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	786,963		$	346,165		$	2,534		$	1,135,662
% of total revenue	69.3		%	30.5		%	0.2		%	100.0		%
$ Change from year ended December 31, 2016	$	(15,433	)	$	9,555		$	140		$	(5,738	)
% Change from year ended December 31, 2016	(1.9		)%	2.8		%	5.8		%	(0.5		)%



	Year Ended December 31, 2016 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Net revenue	$	802,396		$	336,610		$	2,394		$	1,141,400
% of total revenue	70.3		%	29.5		%	0.2		%	100.0		%

Net revenue for the Predecessor Company year ended December 31, 2017 decreased $5.7 million, or 0.5%, to $1,135.7 million, compared to $1,141.4 million for the Predecessor Company year ended December 31, 2016. The decrease resulted from decreases of $15.4 million in the Cumulus Radio Station Group, partially offset by an increase of $9.6 million and $0.1 million in Westwood Once and Corporate and Other revenue, respectively. The decrease in revenue at Cumulus Radio Station Group was primarily driven by decreases local advertising revenue and political advertising revenue. The increase in revenue at Westwood One was primarily driven by increases in broadcast revenue.



	Year Ended December 31, 2017 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
Adjusted EBITDA	$	197,775		$	54,260		$	(34,284	)	$	217,751
$ change from year ended December 31, 2016	$	(13,569	)	$	28,897		$	(3,444	)	$	11,884
% change from year ended December 31, 2016	(6.4		)%	113.9		%	11.2		%	5.8		%



	Year Ended December 31, 2016 (Predecessor Company)
	Cumulus Radio Station Group		Westwood One		Corporate and Other			Consolidated
Adjusted EBITDA	$	211,344	$	25,363	$	(30,840	)	$	205,867

Adjusted EBITDA for the Predecessor Company year ended December 31, 2017 increased $11.9 million, or 5.8%, to $217.8 million from $205.9 million for the Predecessor Company year ended December 31, 2016. The increase resulted from an Adjusted EBITDA increase of $28.9 million at Westwood One, partially offset by decreases of $13.6 million and $3.4 million in the Cumulus Radio Station Group and Corporate and Other, respectively. Adjusted EBITDA at Westwood One increased as a result of $9.6 million of increased revenues and a $14.4 million decrease in expenses at Westwood One related to payments to CBS during 2016, to resolve previously disputed syndicated programming and network inventory expenses, partially offset by increases in expenses related to the higher revenue. Adjusted EBITDA at Radio Station Group decreased as a result of a $15.4 million decline in revenue which was partially offset by lower expenses, which included a $3.2 million expense in 2016 related to a one-time correction to music licensing fees and a decrease in content and personnel expenses.

The following tables reconcile segment net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to segment Adjusted EBITDA for the periods presented above (dollars in thousands):



	Period from June 4, 2018 through December 31, 2018 (Successor Company)
	Cumulus Radio Station Group			Westwood One			Corporate and Other			Consolidated
GAAP net income (loss)	$	112,385		$	24,713		$	(75,673	)	$	61,425
Income tax benefit	—			—			(12,353		)	(12,353		)
Non-operating (income) expense, including net interest expense	(6		)	500			53,283			53,777
Local marketing agreement fees	2,402			—			69			2,471
Depreciation and amortization	16,619			14,595			2,846			34,060
Stock-based compensation expense	—			—			3,404			3,404
Loss (gain) on sale of assets or stations	104			(1		)	—			103
Loss on early extinguishment of debt	—			—			(201		)	(201		)
Acquisition-related and restructuring costs	5			(64		)	11,253			11,194
Franchise and state taxes	—			—			(45		)	(45		)
Adjusted EBITDA	$	131,509		$	39,743		$	(17,417	)	$	153,835



	Period from January 1, 2018 through June 3, 2018 (Predecessor Company)
	Cumulus Radio Station Group			Westwood One		Corporate and Other			Consolidated
GAAP net (loss) income	$	(477,966	)	$	259,441	$	914,681		$	696,156
Income tax benefit	—			—		(176,859		)	(176,859		)
Non-operating (income) expense, including net interest expense	(2		)	204		281			483
Local marketing agreement fees	1,809			—		—			1,809
Depreciation and amortization	10,251			9,965		1,830			22,046
Stock-based compensation expense