Cumulus Reports Third Quarter 2011 Results

Each of the CMP Acquisition and the Citadel Acquisition has been accounted for as a business combination using the acquisition method of accounting and, accordingly, resulted in the recognition of assets acquired and liabilities assumed at fair value. However, as of the date hereof, we have completed only preliminary allocations of fair value to the assets acquired and the liabilities assumed. Final allocations of fair value may differ materially from these preliminary allocations.

In connection with its reorganization pursuant to the Chapter 11 of Title 11 of the U.S. Bankruptcy Code, Citadel adopted fresh-start reporting as of June 1, 2010 (the “Fresh-Start Date”) in accordance with accounting guidance on reorganizations. Citadel's financial results included herein for the nine months ended September 30, 2010 include the results of both the “Predecessor” entity prior to the Fresh-Start Date and the “Successor” entity from and after such date. The combined operating results of Citadel including the Successor and Predecessor entities are not necessarily indicative of the results that may be expected for a full fiscal year. Combined financial information for both the Predecessor and Successor entities for the nine months ended September 30, 2010 is not prepared in accordance with GAAP. However, we believe that the combined financial results are useful to aid in an assessment of ongoing financial and operational performance and trends.

The supplemental unaudited pro forma financial information below is based upon currently available information and estimates and assumptions that we believe are reasonable as of the date hereof. Any of the factors underlying these estimates and assumptions may change, and the estimates and assumptions may not be representative of facts existing at any future date.

The supplemental unaudited pro forma financial information is presented for illustrative and informational purposes only and is not intended to represent or be indicative of what our results of operations would have been had the transactions described above occurred on the date indicated. The supplemental unaudited pro forma financial information should be read in connection with the historical financial statements and related footnotes of each of the Company, CMP and Citadel, and also should not be considered representative of our future results of operations. For additional information, see "Forward-Looking Statements" above, including the risk factors referred to therein.

CUMULUS MEDIA INC.
Pro Forma Condensed Consolidated Statements of Operations
(Dollars in thousands)
(Unaudited)
				Three Months												Nine Months
				Ended September 30,												Ended September 30,
				2011						2010						2011						2010
	Net revenues			$	297,005			(A)		$	302,707			(A)		$	851,310			(A)		$	873,223			(A)
	Operating expenses:
	Direct operating expenses (excluding depreciation and
		amortization and including LMA fees)			186,982						186,398						539,727						547,872
	Depreciation and amortization				30,058			(B)			33,728			(B)			89,629			(B)			102,212			(B)
	Corporate, general and administrative expenses (excluding
		non-cash stock-based compensation expenses)			12,161			(A)			9,550			(A)			33,214			(A)			19,441			(A)
	Loss (gain) on exchange of assets or stations				394						17						(14,477	)					878
	Realized loss on derivative instrument				1,436						746						2,681						1,810
	Non-cash stock-based compensation expenses				9,606			(C)			6,614						35,617			(C)			9,061
	Other operating expenses				-						-						-						7,215
			Total operating expenses		240,637			(D)			237,053						686,391			(D)			688,489
			Operating income		56,368						65,654						164,919						184,734
	Non-operating (expense) income:
		Interest expense, net			(51,147	)		(E)			(51,994	)		(E)			(152,943	)		(E)			(153,519	)		(E)
		Loss on early extinguishment of debt			-						-						(4,366	)					-
		Other income (expense), net			212						(6	)					(961	)					(3,207	)
			Total non-operating expense, net		(50,935	)		(F)			(52,000	)					(158,270	)		(F)			(156,726	)		(G)
	Income before income taxes				5,433						13,654						6,649						28,008
	Income tax expense				(20,102	)		(H)			(7,133	)		(H)			(16,836	)		(H)			(36,854	)		(H)
			Net (loss) income	$	(14,669	)				$	6,521					$	(10,187	)				$	(8,846	)

Footnotes to Supplemental Unaudited Pro Forma Financial Information
(A)	Termination of the CMP Management Agreement. Prior to the completion of the CMP Acquisition, Cumulus managed CMP's business pursuant to a management agreement (the “CMP Management Agreement”). Under the terms of the CMP Management Agreement, CMP was required to pay to Cumulus the greater of $4.0 million or 4% of the adjusted EBITDA on an annual basis of certain of CMP's subsidiaries. Such amounts have been eliminated from net revenues and corporate general and administrative expenses in the accompanying pro forma condensed consolidated statements of operations. For the three and nine months ended September 30, 2011, $0.3 million and $2.3 million, respectively, was eliminated, and for the three and nine months ended September 30, 2010, $1.0 million and $3.0 million, respectively, was eliminated.
(B)	Adjustments related to acquisition method of accounting. Depreciation and amortization expense has been adjusted to reflect the effects of the preliminary valuation of property and equipment and definite-lived intangible assets resulting from the application of the acquisition method of accounting to the CMP Acquisition and the Citadel Acquisition.
(C)	Acquisition-related non-cash stock-based compensation expenses. Reflects the elimination of non-cash stock-based compensation expenses of $20.0 million incurred by Citadel in the three and nine months ended September 30, 2011 due to the acceleration of vesting of certain outstanding equity awards resulting from the completion of the Citadel Acquisition.
(D)	Acquisition-related costs. Reflects the elimination of non-recurring transaction-related costs incurred by each of Cumulus, CMP and Citadel in the three and nine month periods ended September 30, 2011. Included in Citadel's historical amounts were transaction-related costs incurred prior to September 16, 2011 in the aggregate amount of $20.4 million and $28.4 million during the three and nine months ended September 30, 2011, respectively, and $16.2 million of transaction-related corporate general and administrative expenses (primarily termination-related compensation expenses) incurred subsequent to September 16, 2011 in each of the three and nine months ended September 30, 2011. Also reflects the elimination of acquisition-related expenses of $23.1 million and $29.2 million incurred by Cumulus and CMP during the three and nine months ended September 30, 2011.
(E)	Interest expense. Reflects outstanding borrowings assuming completion of the Global Refinancing (defined below). As part of its previously announced global refinancing (the "Global Refinancing"), in May 2011, Cumulus issued $610.0 million aggregate principal amount of 7.75% senior notes due 2019, the proceeds of which were used to, among other things, repay amounts outstanding under Cumulus' then-existing term loan facility. Also, as part of the Global Refinancing and in connection with the completion of the Citadel Acquisition, on September 16, 2011, the Company obtained financing in the amount of $2.9 billion, which was used in part for the repayment of certain outstanding indebtedness of each of Cumulus, CMP and Citadel.
(F)	Gain on equity investment. Cumulus Media recognized a gain of $11.6 million, representing the adjustment to fair value of its previously held equity interest in CMP at the time of the CMP Acquisition, and this amount has been excluded from the accompanying pro forma condensed consolidated statements of operations for both the three and nine months ended September 30, 2011.
(G)	Reorganization items. The following, which were a direct result of Citadel’s emergence from bankruptcy pursuant to Chapter 11 of Title 11 of the U.S. Bankruptcy Code, were eliminated from the accompanying pro forma statement of operations for the nine months ended September 30, 2010:
		Gain on extinguishment of debt				$	(139,813	)
		Revaluation of assets and liabilities					(921,801	)
		Supplemental executive retirement plan					10,510
		Professional fees					31,666
		Rejected executory contracts					5,361
						$	(1,014,077	)
(H)	Income tax effect of pro forma adjustments. Adjustments to reflect the income tax impacts resulting from the pro forma adjustments to the accompanying pro forma condensed consolidated statements of operations were based on an estimated combined federal and state statutory income tax rate of 38.0%. Included in each of the three and nine months ended September 30, 2011 is also an adjustment to income tax expense in the amount of $71.2 million to reverse the effect of releasing the valuation allowance against the Company's deferred tax assets at the time of the Citadel Acquisition. In addition, the adjustment for the nine months ended September 30, 2010 does not include any amount related to the adjustment for the reorganization gain recognized by Citadel (see Note G) since no income tax expense was recognized on this amount in Citadel’s historical financial statements.

Reconciliation of Non-GAAP Financial Measures to Most Directly Comparable GAAP Measures

The following tables reconcile net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on both an actual and a pro forma basis for the three and nine months ended September 30, 2011 and 2010 (dollars in thousands):

				Three Months Ended							Nine Months Ended
				September 30,							September 30,
				2011				2010			2011					2010
	Actual
	Net income			$	59,538			$	9,731		$	76,998				$	21,891
		Income tax (benefit) expense			(70,633	)			1,391			(66,114	)				2,753
		Non-operating expenses, including net interest expense			7,686				7,592			27,642					23,815
		LMA fees			530				607			1,670					1,500
		Depreciation and amortization			11,219				2,222			15,231					7,130
		Non-cash stock-based compensation expense			956				556			2,143					1,015
		Gain on exchange of assets or stations			-				-			(15,278	)				-
		Realized loss on derivative instrument			1,436				746			2,681					1,810
	Adjusted EBITDA			$	10,732			$	22,845		$	44,973				$	59,914
				Three Months Ended							Nine Months Ended
				September 30,							September 30,
				2011				2010			2011					2010
	Pro Forma
	Net (loss) income			$	(14,669	)		$	6,521		$	(10,187	)			$	(8,846	)
		Income tax expense			20,102				7,133			16,836					36,854
		Non-operating expenses, including net interest expense			50,935				52,000			158,270					156,726
		LMA fees			530				607			1,670					1,500
		Depreciation and amortization			30,058				33,728			89,629					102,212
		Non-cash stock-based compensation expense			9,606				6,614			35,617					9,061
		Loss (gain) on exchange of assets or stations			394				17			(14,477	)				878
		Realized loss on derivative instrument			1,436				746			2,681					1,810
	Adjusted EBITDA			$	98,392			$	107,366		$	280,039				$	300,195

The following tables reconcile operating (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to free cash flow on both an actual and a pro forma basis for the three and nine months ended September 30, 2011 and 2010 (dollars in thousands):

			Three Months Ended								Nine Months Ended
			September 30,								September 30,
	Actual		2011				2010				2011					2010
	Operating (loss) income		$	(3,409	)		$	18,714			$	38,526				$	48,459
	Add:
		Non-cash expenses, including stock-based compensation		956				556				2,143					1,015
		Depreciation and amortization		11,219				2,222				15,231					7,130
		Gain on exchange of assets or stations		-				-				(15,278	)				-
		Realized loss on derivative instrument		1,436				746				2,681					1,810
	Less:
		Interest expense, net of interest income, excluding
		non-cash charge/credit for change in value of swap
		arrangements and amortization of debt issuance costs		(19,503	)			(6,918	)			(34,971	)				(20,933	)
		Income taxes paid		(4,997	)			-				(5,141	)				(259	)
		Capital expenditures		(1,380	)			(405	)			(2,885	)				(902	)
	Free cash flow			($15,678	)		$	14,915			$	306				$	36,320
			Three Months Ended								Nine Months Ended
			September 30,								September 30,
	Pro Forma		2011				2010				2011					2010
	Operating income		$	56,368			$	65,654			$	164,919				$	184,734
	Add:
		Non-cash expenses, including stock-based compensation		9,606				6,614				35,617					9,061
		Depreciation and amortization		30,058				33,728				89,629					102,212
		Loss (gain) on exchange of assets or stations		394				17				(14,477	)				878
		Realized loss on derivative instrument		1,436				746				2,681					1,810
	Less:
		Interest expense, net of interest income, excluding
		non-cash charge/credit for change in value of swap
		arrangements and amortization of debt issuance costs		(48,075	)			(48,968	)			(143,812	)				(144,435	)
		Income taxes paid		(4,997	)			-				(5,141	)				(259	)
		Capital expenditures		(1,380	)			(405	)			(2,885	)				(902	)
	Free cash flow		$	43,410			$	57,386			$	126,531				$	153,099

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