ATLANTA, Aug. 6, 2014 (GLOBE NEWSWIRE) -- Cumulus Media Inc. (Nasdaq:CMLS) (the "Company," "we," "us," or "our") today announced operating results for the three and six months ended June 30, 2014.

Operating highlights are as follows (in thousands, except percentages) (footnotes follow):
  Three Months Ended June 30,
  Actual Pro Forma (2)
  2014 2013 % Change 2013 % Change
Revenue:          
Broadcast advertising  $ 301,188  $ 257,080 17.2%  $ 305,189 (1.3)%
Digital advertising 12,946 5,912 119.0% 6,541 97.9%
Political advertising 3,782 1,078 250.8% 1,185 219.2%
License fees & other 10,331 6,236 65.7% 9,033 14.4%
Net revenue  $ 328,247  $ 270,306 21.4%  $ 321,948 2.0%
Adjusted EBITDA (1)  $ 100,522  $ 103,061 (2.5)%  $ 110,864 (9.3)%
           
           
  Six Months Ended June 30,
  Actual Pro Forma (2)
  2014 2013 % Change 2013 % Change
Revenue:          
Broadcast advertising  $ 571,454  $ 463,719 23.2%  $ 572,164 (0.1)%
Digital advertising 22,571 10,382 117.4% 11,601 94.6%
Political advertising 5,957 1,958 204.2% 2,065 188.5%
License fees & other 20,309 12,086 68.0% 17,653 15.0%
Net revenues  $ 620,291  $ 488,145 27.1%  $ 603,483 2.8%
Adjusted EBITDA (1)  $ 159,268  $ 156,506 1.8%  $ 169,406 (6.0)%
           
    As of  
    June 30, 2014 December 31, 2013 % Change  
Cash and cash equivalents    $ 20,117  $ 32,792 (38.7)%  
           
Term loans    $ 1,993,875  $ 2,025,000 (1.5)%  
7.75% Senior Notes   610,000 610,000 —%  
Secured loan   25,000 (100.0)%  
Total debt    $ 2,603,875  $ 2,660,000 (2.1)%  
           
Total common stock and warrants outstanding   234,891,200 234,479,385    
           
(1)  Adjusted EBITDA is not a financial measure calculated or presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). For additional information, see "Non-GAAP Financial Measure and Definition" and "Reconciliation of Non-GAAP Financial Measure to Most Directly Comparable GAAP Measure" included herein.
           
(2) Pro forma information assumes that the acquisition of WestwoodOne, Inc., which was completed in December 2013 (the "WestwoodOne Acquisition"), and the sale to Townsquare Media, LLC ("Townsquare") of 53 radio stations in 12 small and mid-sized markets and the swap of 15 radio stations in two small and mid-sized markets with Townsquare in exchange for five radio stations in Fresno, California, which was completed in November 2013 (the "2013 Townsquare Transaction"), both occurred as of January 1, 2013. The 2014 amounts in the table above give effect to Cumulus' accounting policies and presentation of our financial information on acquired businesses, which policies and presentation have not been applied to the 2013 pro forma information for WestwoodOne. Such policies and presentation impact revenue and expense recognition of certain WestwoodOne producer contracts and the classification of trade revenue separate from trade expense, and if applied to 2013 pro forma financial information would have increased revenues but would have had no impact on Adjusted EBITDA. The pro forma financial information should not be considered indicative of our actual financial position or results of operations had the WestwoodOne Acquisition or the 2013 Townsquare Transaction occurred as of the date indicated or any other date. The pro forma financial information should also not be considered representative of our future financial condition or results of operations.

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013

Net Revenue

The following table presents our revenues, by source, as a percentage of total net revenues for the periods presented:
  Actual Pro Forma
  Three Months Ended June 30,
  2014 2013 2013
Revenue:      
Broadcast advertising 91.8% 95.1% 94.8%
Digital advertising 3.9% 2.2% 2.0%
Political advertising 1.2% 0.4% 0.4%
License fees & other 3.1% 2.3% 2.8%
Net revenue 100.0% 100.0% 100.0%

On an actual basis, net revenues for the three months ended June 30, 2014 increased $57.9 million, or 21.4%, to $328.2 million, compared to $270.3 million for the three months ended June 30, 2013. The increase resulted from increases of $44.1 million, $7.0 million, $2.7 million and $4.1 million in broadcast advertising, digital advertising, political advertising and license fees and other revenue, respectively. These increases were primarily attributable to the addition of the operations of WestwoodOne, which was acquired by the Company in December 2013. The increases were partially offset by decreases in local spot and national spot revenue. The increase in political advertising was due to additional activity associated with mid-term and gubernatorial elections in the current period.

On a pro forma basis, net revenues for the three months ended June 30, 2014 increased $6.3 million, or 2.0%, to $328.2 million, from $321.9 million for the three months ended June 30, 2013. Broadcast advertising revenue decreased by $4.0 million, primarily due to a $9.4 million decrease in network spot revenue, a $9.8 million decrease in local spot revenue and a decrease of $2.6 million in national spot revenue. These decreases were partially offset by a $2.9 million increase in revenue from the addition of two radio stations being operated under a local marketing agreement ("LMA") in the Chicago market and the benefit from $14.9 million of reduced producer revenue shares at WestwoodOne. Digital advertising revenue increased by $6.4 million, primarily due to increased Rdio user generation activity and digital commerce generated by our Sweetjack platform. Political advertising increased by $2.6 million due to primary activity associated with mid-term and gubernatorial elections and license fees and other increased by $1.3 million.

Content Costs

Content costs consist of all costs related to the licensing, acquisition and development of our programming.

The following table presents our content costs as a percentage of total net revenues for the periods presented:
  Actual Pro Forma
  Three Months Ended June 30,
  2014 2013 2013
Content costs 31.0% 23.0% 27.1%

On an actual basis, content costs for the three months ended June 30, 2014 increased $39.5 million, or 63.5%, to $101.8 million, compared to $62.3 million for the three months ended June 30, 2013. This increase was primarily attributable to the addition of the operations of WestwoodOne. Content costs in the prior period were reduced by credits related to music publishing royalty reductions that amplify the period over period comparison.

On a pro forma basis, content costs for the three months ended June 30, 2014 increased $14.7 million, or 16.9%, from $87.1 million for the three months ended June 30, 2013. This increase was primarily attributable to increases of $3.6 million in music publishing royalty expenses related to the credits received in the prior year period, $14.9 million related to increased producer revenue share payments and in house production costs and $0.5 million of expenses related to the addition of the two radio stations being operated under the LMA in the Chicago market. These increases were partially offset by a decrease of $4.3 million attributable to expense synergies related to our acquisition of WestwoodOne.

Other Direct Operating Expenses

Other direct operating expenses consist of expenses related to the distribution and monetization of our content across our platform and overhead expenses.

On an actual basis, other direct operating expenses for the three months ended June 30, 2014 increased $18.5 million, or 18.5%, to $118.4 million, compared to $99.9 million for the three months ended June 30, 2013. This increase was primarily attributable to the addition of approximately $14.2 million in expenses related to the operations of WestwoodOne and increases of $1.9 million in employee benefits across our broadcast platform, as well as $2.4 million of expenses related to the LMA in the Chicago market.

On a pro forma basis, other direct operating expenses for the three months ended June 30, 2014 increased $2.7 million, or 2.3%, from $115.7 million for the three months ended June 30, 2013. This increase was primarily attributable to an increase of $1.9 million in employee benefits across our broadcast platform, $1.4 million in ratings and other sales expenses and $2.4 million of expenses related to the LMA in the Chicago market. These increases were partially offset by $3.0 million in expense synergies related to our acquisition of WestwoodOne.

Corporate Expenses, Including Stock-based Compensation Expense

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

Corporate expenses, including stock-based compensation expense, for the three months ended June 30, 2014 increased $11.6 million, or 148.8%, to $19.3 million, compared to $7.7 million for the three months ended June 30, 2013. This increase was primarily due to an increase of $8.0 million in acquisition related restructuring expenses and legal costs related to the integration of WestwoodOne, a $1.7 million increase in stock-based compensation expense partially driven by stock options granted to employees of WestwoodOne and a $1.9 million increase in other overhead costs.

On a pro forma basis, corporate expenses, including stock-based compensation expense, for the three months ended June 30, 2014 increased $3.3 million, or 20.8%, from $15.9 million for the three months ended June 30, 2013. This increase was primarily due to restructuring expenses and legal costs related to the integration of WestwoodOne.

Capital Expenditures

Capital expenditures for the three months ended June 30, 2014 totaled $9.9 million, comprised of $1.3 million related to ongoing maintenance and upgrades across our broadcast platform and $8.6 million related to one time investments at WestwoodOne. Capital expenditures during the three months ended June 30, 2013 were $2.8 million.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

Net Revenue

The following table presents our revenues, by source, as a percentage of total net revenues for the periods presented:
  Actual Pro Forma
  Six Months Ended June 30,
  2014 2013 2013
Revenue:      
Broadcast advertising 92.1% 95.0% 94.9%
Digital advertising 3.6% 2.1% 1.9%
Political advertising 1.0% 0.4% 0.3%
License fees & other 3.3% 2.5% 2.9%
Net revenue 100.0% 100.0% 100.0%

On an actual basis, net revenues for the six months ended June 30, 2014 increased $132.2 million, or 27.1%, to $620.3 million, compared to $488.1 million for the six months ended June 30, 2013. The increase resulted from increases of $107.8 million, $12.2 million, $4.0 million and $8.2 million in broadcast advertising, digital advertising, political advertising and license fees and other revenue, respectively. These increases were primarily attributable to the addition of the operations of WestwoodOne, which was acquired by the Company in December 2013. The increases were partially offset by decreases in local spot and national spot revenue. The increase in political advertising was due to additional activity associated with mid-term and gubernatorial elections in the current period.

On a pro forma basis, net revenues for the six months ended June 30, 2014 increased $16.8 million, or 2.8%, to $620.3 million, from $603.5 million for the six months ended June 30, 2013. Broadcast advertising revenue decreased by $0.7 million, primarily due to the reorganization and discontinuation of redundant and/or unprofitable content vehicles across our platform following the acquisition of WestwoodOne. Digital advertising revenue increased by $11.0 million, primarily due to revenue from Rdio user generation activity and digital commerce revenue generated by our Sweetjack platform. Political advertising revenue increased by $3.9 million due to primary activity associated with mid-term and gubernatorial elections and license fees and other increased by $2.6 million.

Content Costs

The following table presents our content costs as a percentage of total net revenues for the periods presented:
  Actual Pro Forma
  Six Months Ended June 30,
  2014 2013 2013
Content costs 33.9% 25.4% 31.3%

On an actual basis, content costs for the six months ended June 30, 2014 increased $86.1 million, or 69.3%, to $210.3 million, compared to $124.2 million for the six months ended June 30, 2013. This increase was primarily attributable to the addition of the operations of WestwoodOne. Content costs in the prior period also included credits related to music publishing royalty reductions.

On a pro forma basis, content costs for the six months ended June 30, 2014 increased $21.3 million, or 11.3%, from $189.0 million for the six months ended June 30, 2013. This increase was primarily attributable to increases of $2.5 million in music publishing royalty expenses due to credits received in the second quarter of 2013, $27.9 million related to increased producer revenue share payments and in house production costs and approximately $0.7 million of expenses related to the addition of two radio stations being operated under the LMA in the Chicago market. These increases were partially offset by a decrease of $9.8 million related to expense synergies related to our our acquisition of WestwoodOne.

Other Direct Operating Expenses

On an actual basis, other direct operating expenses for the six months ended June 30, 2014 increased $40.3 million, or 20.8%, to $233.7 million, compared to $193.4 million for the six months ended June 30, 2013. This increase was primarily attributable to the addition of expenses related to the operations of WestwoodOne in addition to expenses related to the LMA in the Chicago market.

On a pro forma basis, other direct operating expenses for the six months ended June 30, 2014 increased $7.2 million, or 3.2%, from $226.5 million for the six months ended June 30, 2013. This increase was primarily attributable to an increase of $2.8 million in employee benefits across our broadcast platform, $4.2 million in ratings and other sales expenses and approximately $4.5 million of expenses related to the LMA in the Chicago market. These increases were partially offset by $4.3 million in expense synergies related to our acquisition of WestwoodOne.

Corporate Expenses, Including Stock-based Compensation Expense

On an actual basis, corporate expenses, including stock-based compensation expense, for the six months ended June 30, 2014 increased $16.7 million, or 76.7%, to $38.5 million, compared to $21.8 million for the six months ended June 30, 2013. This increase was primarily due to an increase of $12.2 million in acquisition related restructuring expenses and legal costs related to the WestwoodOne acquisition, a $3.1 million increase in stock-based compensation expense partially driven by stock options granted to employees of WestwoodOne and a $1.4 million increase in other overhead costs.

On a pro forma basis, corporate expenses, including stock-based compensation expense, for the six months ended June 30, 2014 increased $1.2 million or 3.2% from $37.3 for the six months ended June 30, 2013. This increase was primarily due to restructuring expenses related to the integration of WestwoodOne.

Capital Expenditures

Capital expenditures for the six months ended June 30, 2014 totaled $11.2 million, the majority of which related to one time investments in WestwoodOne. Capital expenditures during the six months ended June 30, 2013 were $4.8 million.

Sale of San Francisco Baseball Associates, LLC Interest

On April 15, 2014, the Company sold its Class B Membership Interest of 1.59% in the San Francisco Baseball Associates, LLC for $13.0 million, recognizing a gain on the sale of $3.2 million. The proceeds from the sale were used to make voluntary principal payments on the Company's outstanding debt.

Earnings Call Information

Cumulus Media Inc. will host a teleconference today at 11:00 AM eastern time to discuss its second quarter 2014 operating results. The conference call dial-in number for domestic callers is 877-830-7699. International callers should dial 660-422-3366 for conference call access.

Please call five to ten minutes in advance to ensure that you are connected prior to the presentation. The call also may be accessed via webcast at www.cumulus.com.

Following completion of the call, a replay can be accessed until 12:00 AM eastern time, September 7, 2014. Domestic callers can access the replay by dialing 855-859-2056, replay code 74656885#. International callers should dial 404-537-3406 for conference replay access.

Forward-Looking Statements

Certain statements in this release may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are statements other than historical fact and relate to our intent, belief or current expectations primarily with respect to certain historical and 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, including, but not limited to risks and uncertainties relating to the need for additional funds to service our debt and to execute our business strategy, our inability to renew one or more of our broadcast licenses, changes in interest rates, the timing of, and our ability to complete any acquisitions or dispositions pending from time to time, costs and synergies resulting from the integration of any completed acquisitions, our ability to effectively manage costs, our ability to manage growth, the popularity of radio as a broadcasting and advertising medium, changing consumer tastes, the impact of general economic conditions in the United States or in specific markets in which we currently do business, industry conditions, including existing competition and future competitive technologies and cancellation, disruptions or postponements of advertising schedules in response to national or world events, our ability to generate revenues from new sources, including local commerce and technology-based initiatives, the impact of regulatory rules or proceedings that may affect our business, or any acquisitions, from time to time, other risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K") and subsequently filed Forms 10-Q. Many of these risks and uncertainties are beyond our control, and the unexpected occurrence or failure to occur of any such events or matters could significantly alter our actual results of operations or financial condition. Cumulus Media Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.

About Cumulus Media Inc. (Nasdaq:CMLS)

Cumulus Media Inc. ( CMLS) combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands in order to deliver premium choices for listeners, provide substantial reach for advertisers and create opportunities for shareholders. As the largest pure-play radio broadcaster in the United States, Cumulus provides exclusive content that is fully distributed through approximately 460 owned-and-operated stations in 90 U.S. media markets (including eight of the top 10), more than 10,000 broadcast radio affiliates and numerous digital channels. Cumulus is well-positioned in the widening digital audio space through a significant stake in the Rdio digital music service, featuring 25 million songs on-demand in addition to custom playlists and exclusive curated channels. Cumulus is also the leading provider of country music and lifestyle content through its ‎NASH brand, which will serve country fans through radio programming, NASH magazine, concerts, licensed products and television/video. For more information, visit www.cumulus.com
CUMULUS MEDIA INC.
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share data)
         
         
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
Revenue:        
Broadcast advertising  $ 301,188  $ 257,080  $ 571,454  $ 463,719
Digital advertising 12,946 5,912 22,571 10,382
Political advertising 3,782 1,078 5,957 1,958
License fees and other 10,331 6,236 20,309 12,086
Net revenue 328,247 270,306 620,291 488,145
Operating expenses:        
Content costs 101,802 62,255 210,295 124,206
Other direct operating expenses 118,389 99,894 233,724 193,374
Depreciation and amortization 29,071 27,604 57,952 55,200
LMA fees 1,648 738 3,205 1,684
Corporate expenses (including stock-based compensation expense of $4,154, $2,470, $8,245 and $5,134, respectively) 19,264 7,742 38,458 21,760
(Gain) loss on sale of assets or stations (360) 227 (898) 1,536
Gain on derivative instrument (2,106) (2,844)
Total operating expenses 269,814 196,354 542,736 394,916
Operating income 58,433 73,952 77,555 93,229
Non-operating (expense) income:        
Interest expense (36,468) (44,197) (72,733) (88,719)
Interest income 342 364 672 634
Loss on early extinguishment of debt (4,539) (4,539)
Other income (expense), net 3,593 (393) 3,529 (106)
Total non-operating expense, net (32,533) (48,765) (68,532) (92,730)
Income from continuing operations before income taxes 25,900 25,187 9,023 499
Income tax expense (10,763) (10,073) (3,155) (12,049)
Income (loss) from continuing operations 15,137 15,114 5,868 (11,550)
Income from discontinued operations, net of taxes 11,987 29,662
Net income  $ 15,137  $ 27,101  $ 5,868  $ 18,112
Basic and diluted income (loss) per common share:        
Basic: Income (loss) from continuing operations per share  $ 0.06  $ 0.05  $ 0.03  $ (0.11)
Income from discontinued operations per share  $ —   $ 0.06  $ —   $ 0.17
Income per share  $ 0.06  $ 0.11  $ 0.03  $ 0.06
Diluted: Income (loss) from continuing operations per share  $ 0.06  $ 0.05  $ 0.02  $ (0.11)
Income from discontinued operations per share $ —   $ 0.06 $ —   $ 0.17
Income per share  $ 0.06  $ 0.11  $ 0.02  $ 0.06
Weighted average basic common shares outstanding 224,456,934 176,481,592 220,104,481 175,619,586
Weighted average diluted common shares outstanding 229,069,397 179,553,341 226,180,298 178,678,090
 
CUMULUS MEDIA INC.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(Dollars in thousands)
     
  Pro Forma
  Three Months Ended June 30, 2013 Six Months Ended June 30, 2013
Revenue:    
Broadcast advertising  $ 305,189  $ 572,164
Digital advertising 6,541 11,601
Political advertising 1,185 2,065
License fees & other 9,033 17,653
Net revenue 321,948 603,483
Operating expenses:    
Content costs 87,113 188,969
Other direct operating expenses 115,679 226,541
Depreciation and amortization 32,940 65,872
LMA fees 738 1,684
Corporate expenses (including stock-based compensation expense of $4,321 and $9,082, respectively) 15,946 37,276
Loss on sale of assets or stations 227 1,536
Gain on derivative instrument (2,106) (2,844)
Total operating expenses 250,537 519,034
Operating income 71,411 84,449
Non-operating (expense) income:    
Interest expense (44,197) (88,719)
Interest income 364 634
Loss on early extinguishment of debt (4,539) (4,539)
Other expense, net (393) (106)
Total non-operating expense, net (48,765) (92,730)
Income (loss) from continuing operations before income taxes 22,646 (8,281)
Income tax expense (19,485) (16,060)
Net income (loss)  $ 3,161  $ (24,341)

Non-GAAP Financial Measure and Definition

We utilize certain financial measures that are not prepared or calculated in accordance with GAAP to assess our financial performance and profitability. The non-GAAP financial measure used in this release is Adjusted EBITDA.

We define Adjusted EBITDA as net income (loss) before any non-operating expenses, including depreciation and amortization, stock-based compensation expense, gain or loss on sale of assets or stations (if any), gain or loss on derivative instruments (if any), impairment of intangible assets and goodwill (if any), acquisition-related and restructuring costs (if any) and franchise taxes.

Adjusted EBITDA is the financial metric utilized by management to analyze the cash flow generated by our business. This measure isolates the amount of income generated by our core operations after the incurrence of corporate, general and administrative expenses. Management also uses this measure to determine the contribution of our core operations, including the corporate resources employed to manage the operations, to the funding of our other operating expenses and to the funding of debt service and acquisitions. In addition, Adjusted EBITDA is a key metric for purposes of calculating and determining our compliance with certain covenants contained in our credit facility.

In deriving this measure, management excludes depreciation, amortization, and stock-based compensation expense, as these do not represent cash payments for activities directly related to our core operations. Management excludes any gain or loss on the exchange or sale of any assets as it does not represent a cash transaction. Management also excludes any gain or loss on derivative instruments as it does not represent a cash transaction nor are they associated with core operations. Expenses relating to acquisitions and restructuring costs are also excluded from the calculation of Adjusted EBITDA as they are not directly related to our core operations. Management excludes any impairment of goodwill and intangible assets as they do not require a cash outlay.

Management believes that Adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, nevertheless is commonly employed by the investment community as a measure for determining the market value of a media company. Management has also observed that Adjusted EBITDA is routinely employed to evaluate and negotiate the potential purchase price for media companies and is a key metric for purposes of calculating and determining compliance with certain covenants in our credit facility. 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, operating income, cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with GAAP.

A quantitative reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, is provided below.

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

The following table reconciles net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA for the three and six months ended June 30, 2014 and 2013 (dollars in thousands):
  Actual Pro Forma
  Three Months Ended June 30,
  2014 2013 2013
Net income  $ 15,137  $ 27,101  $ 3,161
Income tax expense 10,763 10,073 19,485
Non-operating expenses, including interest expense 32,533 48,765 48,765
LMA fees 1,648 738 738
Depreciation and amortization 29,071 27,604 32,940
Stock-based compensation expense 4,154 2,470 4,321
(Gain) loss on sale of assets or stations (360) 227 227
Gain on derivative instrument (2,106) (2,106)
Acquisition-related and restructuring costs 7,277 3,157
Franchise and state taxes 299 176 176
Discontinued operations:      
Income from discontinued operations, net of tax (11,987)
Adjusted EBITDA  $ 100,522  $ 103,061  $ 110,864
       
       
  Actual Pro Forma
  Six Months Ended June 30,
  2014 2013 2013
Net income (loss)  $ 5,868  $ 18,112  $ (24,341)
Income tax expense 3,155 12,049 16,060
Non-operating expenses, including interest expense 68,532 92,730 92,730
LMA fees 3,205 1,684 1,684
Depreciation and amortization 57,952 55,200 65,872
Stock-based compensation expense 8,245 5,134 9,082
(Gain) loss on sale of assets or stations (898) 1,536 1,536
Gain on derivative instrument (2,844) (2,844)
Acquisition-related and restructuring costs 12,660 2,214 9,274
Franchise and state taxes 549 353 353
Discontinued operations:      
Income from discontinued operations, net of tax (29,662)
Adjusted EBITDA  $ 159,268  $ 156,506  $ 169,406

The following supplemental unaudited pro forma financial information is intended to provide you with information about how the WestwoodOne Acquisition and the 2013 Townsquare Transaction might have affected our historical consolidated quarterly financial statements during each completed quarterly period during 2013 and the year ended December 31, 2013 as if such transactions had closed as of January 1, 2013. This pro forma information is presented for illustrative purposes only, and should not be considered indicative of our actual historical financial position or results of operations had the WestwoodOne Acquisition or the 2013 Townsquare Transaction occurred as of the date indicated or any other date. This pro forma financial information should also not be considered representative of our future financial condition or results of operations.
CUMULUS MEDIA INC.
Pro Forma Condensed Consolidated Statements of Operations
(Dollars in thousands)
(Unaudited)
           
  Q1 Q2 Q3 Q4 Year Ended December 31, 2013
Revenue:          
Broadcast advertising  $ 266,975  $ 305,189  $ 297,147  $ 309,982  $ 1,179,293
Digital advertising 5,060 6,541 6,169 7,244 25,014
Political advertising 880 1,185 1,235 1,554 4,854
License fees & other 8,620 9,033 9,417 9,484 36,554
Net revenues 281,535 321,948 313,968 328,264 1,245,715
Operating expenses:          
Content costs 101,856 87,113 94,461 109,008 392,438
Other direct operating expenses 110,862 115,679 112,572 121,355 460,468
Depreciation and amortization 32,932 32,940 32,949 34,060 132,881
LMA fees 946 738 609 1,423 3,716
Corporate expenses (including stock-based compensation expense) 21,330 15,946 13,429 22,686 73,391
Loss (gain) on asset or station sale 1,309 227 (5,198) (23) (3,685)
Realized (gain) loss on derivative instrument (738) (2,106) 172 820 (1,852)
Total operating expenses 268,497 250,537 248,994 289,329 1,057,357
Operating income 13,038 71,411 64,974 38,935 188,358
Non-operating (expense) income:          
Interest expense (44,522) (44,197) (45,674) (44,054) (178,447)
Interest income 270 364 480 352 1,466
Loss on early extinguishment of debt (4,539) (30,395) (34,934)
Other income (expense), net 287 (393) (139) (57) (302)
Total non-operating expense, net (43,965) (48,765) (45,333) (74,154) (212,217)
(Loss) income from continuing operations before income taxes (30,927) 22,646 19,641 (35,219) (23,859)
Income tax benefit (expense) 3,425 (19,485) (14,732) 1,078 (29,714)
Pro forma net (loss) income  $ (27,502)  $ 3,161  $ 4,909  $ (34,141)  $ (53,573)

Reconciliation of Pro Forma Non-GAAP Financial Measure to a Comparable Pro forma GAAP Measure

The following table reconciles pro forma net (loss) income to pro forma Adjusted EBITDA for each quarter during 2013, and for the year ended December 31, 2013 (dollars in thousands):
           
  Q1 Q2 Q3 Q4 Year Ended December 31, 2013
Pro forma net (loss) income  $ (27,502)  $ 3,161  $ 4,909  $ (34,141)  $ (53,573)
Income tax (benefit) expense (3,425) 19,485 14,732 (1,078) 29,714
Non-operating expenses, including net interest expense 43,965 48,765 45,333 74,154 212,217
LMA fees 946 738 609 1,423 3,716
Depreciation and amortization 32,932 32,940 32,949 34,060 132,881
Stock-based compensation expense 4,761 4,321 2,712 3,766 15,560
Loss (gain) on asset or station sale 1,309 227 (5,198) (23) (3,685)
(Gain) loss on derivative instrument (738) (2,106) 172 820 (1,852)
Acquisition-related and restructuring costs 6,117 3,157 1,141 16,822 27,237
Franchise and state taxes 177 176 176 613 1,142
Pro forma Adjusted EBITDA  $ 58,542  $ 110,864  $ 97,535  $ 96,416  $ 363,357
CONTACT: For further information, please contact:         Cumulus Media Inc.         J.P. Hannan         Senior Vice President, Treasurer and Chief Financial Officer         404-260-6600         jp.hannan@cumulus.com

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