Acquisitions and Dispositions

2013 Acquisitions and Dispositions

Green Bay Purchase

On December 31, 2013, the Company completed the purchase of five radio stations in Green Bay, Wisconsin from Clear Channel for $17.6 million in cash (the "Green Bay Purchase"). The Company had been operating the stations under an LMA agreement with Clear Channel since April 10, 2009.

Revenues attributable to the stations acquired in the Green Bay Purchase were not material to the Company’s consolidated statement of operations for the year ended December 31, 2013.

The table below summarizes the preliminary purchase price allocation in the Green Bay Purchase (dollars in thousands):



Allocation	Amount
Property and equipment (see Note 5)	$	1,111
Broadcast licenses	6,991
Fair value of exercised put option (See Note 8 "Green Bay Option")	9,534
Total purchase price	$	17,636

WestwoodOne Acquisition

On December 12, 2013, Cumulus completed the acquisition of WestwoodOne, Inc. (formerly known as Dial Global, Inc., "WestwoodOne"), an independent, full-service radio network company offering news, sports, formats, prep services, talk and music programming, jingles and imaging, and special events, as well as national advertising sales representation (the WestwoodOne Acquisition"). The WestwoodOne Acquisition added sports, news, talk, music and programming services content – enabling the Company to provide an even broader array of programming content to approximately 10,000 U.S. radio stations, other media platforms and international platforms. Content acquired through the WestwoodOne Acquisition included NFL, NCAA, NASCAR, Olympics, AP Radio News, NBC News and other popular programming.

In connection with the WestwoodOne Acquisition, all of the issued and outstanding shares of capital stock of WestwoodOne were automatically canceled and converted into the right to receive an aggregate of approximately $45.0 million in cash, and WestwoodOne repaid all of its outstanding indebtedness. The payment of the purchase price to complete the WestwoodOne Acquisition (including the cash used to repay approximately $215.0 million of WestwoodOne’s outstanding indebtedness) was funded from cash on hand, which included $235.0 million in cash proceeds from the Townsquare Transaction (defined below). As a result of the WestwoodOne Acquisition, WestwoodOne became a wholly owned subsidiary of the Company.

Although the WestwoodOne Acquisition was not subject to the pre-closing notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act, the Antitrust Division of the Department of Justice (“DOJ”) is conducting a review of the transaction. Pursuant to an agreement entered into at the closing of the WestwoodOne Acquisition, $22.5 million of the purchase price was placed in escrow (the “Escrow Fund”) pending the completion of the DOJ investigation. The Escrow Fund will be available to compensate Cumulus for expenses in defending the investigation and to the extent Cumulus incurs any loss as a result of any final remedial action taken by the DOJ with respect to its investigation.

Revenues of $10.0 million attributable to WestwoodOne were included in the Company’s consolidated statement of operations for the year ended December 31, 2013.

The table below summarizes the preliminary purchase price allocation in the WestwoodOne Acquisition (dollars in thousands):



Allocation	Amount
Current assets	$	91,171
Property and equipment (see Note 5)	23,714
Other intangibles	150,900
Goodwill	104,675
Other assets	4,946
Current liabilities	(68,907		)
Other liabilities	(46,499		)
Total purchase price	$	260,000

The material assumptions utilized in the valuation of intangible assets acquired include expected overall future market revenue growth rates for the residual year of approximately 2.0% and a weighted average cost of capital of 10%. Goodwill is equal to the difference between the purchase price and the value assigned to the tangible and intangible assets acquired and liabilities assumed. The Company intends to treat the acquisition as a taxable asset acquisition pursuant to Internal Revenue Code Section 338(g). As such, all of the acquired goodwill balance is deductible for income tax purposes.

The definite-lived intangible assets acquired in the WestwoodOne Acquisition are being amortized in relation to the expected economic benefits of such assets over their estimated useful lives and consist of the following (dollars in thousands):



Description	Estimated Useful Life in Years	Fair Value
Affiliate relationships	9	$	150,900

Townsquare Transaction

On November 14, 2013, the Company completed the sale to Townsquare Media, LLC (“Townsquare”) of 53 radio stations in 12 small and mid-sized markets for $235.0 million in cash and the swap with Townsquare of 15 radio stations in two small and mid-sized markets in exchange for five radio stations in Fresno, California (together, the "Townsquare Transaction"). The Company used the cash proceeds from the Townsquare Transaction to fund a portion of the purchase price payable to complete the WestwoodOne Acquisition.

Revenues attributable to the assets acquired in the Townsquare Transaction were not material to the Company’s consolidated statement of operations for the year ended December 31, 2013.

The table below summarizes the preliminary purchase price allocation in the Townsquare Transaction (dollars in thousands):



Allocation	Amount
Current assets	$	1,860
Property and equipment (see Note 5)	6,345
Broadcast licenses	9,900
Goodwill	13,680
Other assets	246
Other intangibles	552
Current liabilities	(400		)
Total purchase price	32,183
Less: Carrying value of stations transferred	(159,053		)
Add: Cash received	235,028
Gain on asset exchange	$	108,158

The material assumptions utilized in the valuation of intangible assets acquired and liabilities assumed included overall future market revenue growth rates for the residual year of approximately 2.0% and a weighted average cost of capital of 10%. Goodwill is equal to the difference between the purchase price and the value assigned to the tangible and intangible assets acquired and liabilities assumed. All of the acquired goodwill balance is deductible for tax purposes.

The definite-lived intangible assets acquired in the Townsquare Transaction are being amortized in relation to the expected economic benefits of such assets over their estimated useful lives and consist of the following (dollars in thousands):



Description	Estimated Useful Life in Years	Fair Value
Advertising relationships	5	$	552

WFME Asset Exchange

On January 8, 2013, the Company completed its previously announced asset exchange (the “WFME Asset Exchange”) with Family Stations, Inc., pursuant to which it exchanged its WDVY station in New York plus $40.0 million in cash for Family Stations’ WFME station in Newark, New Jersey. The total purchase price is subject to an increase of up to $10 million if certain future conditions are met as detailed in the purchase agreement. The Company has estimated the fair value of the contingent consideration to be less than $0.1 million as of December 31, 2013. Any future change in the estimated fair value of the contingent consideration will be recorded in the Company’s results of operations in the period of such change. This acquisition provided Cumulus with a radio station in the United States’ largest media market for the national NASH entertainment brand based on the country music lifestyle.

The table below summarizes the purchase price allocation in the WFME Asset Exchange (dollars in thousands):



Allocation	Amount
Other assets	$	1,460
Goodwill	11,461
Broadcast license	27,100
Property and equipment (see Note 5)	62
Total purchase price	40,083
Less: Cash consideration	(40,000		)
Less: Carrying value of station transferred	(52		)
Less: Contingent consideration	(31		)
Gain on asset exchange	$	—

The material assumptions utilized in the valuation of intangible assets acquired included overall future market revenue growth rates for the residual year of approximately 2.0% and a weighted average cost of capital of 10.0%. Goodwill is equal to the difference between the purchase price and the value assigned to the tangible and intangible assets acquired and liabilities assumed. All of the acquired goodwill balance is deductible for tax purposes.

Pamal Broadcasting Asset Purchase

On January 17, 2013, the Company completed the acquisition of WMEZ-FM and WXBM-FM from Pamal Broadcasting Ltd. for a purchase price of $6.5 million (the "Pamal Broadcasting Asset Purchase"). The transaction was part of the Company’s ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters.

Revenues attributable to the assets acquired in the Pamal Broadcasting Asset Purchase were not material to the Company’s consolidated statement of operations for the year ended December 31, 2013.

The table below summarizes the purchase price allocation in the Pamal Broadcasting Asset Purchase (dollars in thousands):



Allocation	Amount
Property and equipment (see Note 5)	$	783
Broadcast licenses	5,700
Total purchase price	$	6,483

2012 Acquisitions and Dispositions

Townsquare Asset Exchange

On July 31, 2012, the Company completed its sale of 55 stations in eleven non-strategic markets to Townsquare (“Townsquare Asset Exchange”) in exchange for ten of Townsquare’s radio stations in Bloomington, IL and Peoria, IL, plus approximately $114.9 million in cash. The transaction was part of the Company’s ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters. The stations sold by the Company operated in the following markets: Augusta, ME; Bangor, ME; Binghamton, NY; Bismarck, ND; Grand Junction, CO; Killeen-Temple, TX; New Bedford, MA; Odessa-Midland, TX; Presque Isle, ME; Sioux Falls, SD and Tuscaloosa, AL.

Revenues of $10.3 million and $4.7 million attributable to the acquired radio stations in Bloomington, IL and Peoria, IL were included in the Company’s consolidated statement of operations for the acquired years ended December 31, 2013 and 2012.

The table below summarizes the purchase price allocation in the Townsquare Asset Exchange (dollars in thousands):



Allocation	Amount
Current assets	$	149
Property and equipment (see Note 5)	4,690
Broadcast licenses	11,900
Goodwill	3,014
Other intangibles	200
Current liabilities	(207		)
Total purchase price	19,746
Less: Carrying value of stations transferred	(71,697		)
Add: Cash received	114,918
Gain on asset exchange	$	62,967

The material assumptions utilized in the valuation of intangible assets acquired and liabilities assumed included overall future market revenue growth rates for the residual year of approximately 2.0% and a weighted average cost of capital of 10%. Goodwill was equal to the difference between the purchase price and the value assigned to tangible and intangible assets acquired and liabilities assumed. $1.1 million of the acquired goodwill balance is deductible for tax purposes.

The definite-lived intangible assets acquired in the Townsquare Asset Exchange are being amortized in relation to the expected economic benefits of such assets over their estimated useful lives and consist of the following (dollars in thousands):



Description	Estimated Useful Life in Years	Fair Value
Advertising relationships	6	$	200

AR Broadcasting Asset Purchase

On September 25, 2012, the Company entered into an asset purchase agreement with AR Broadcasting, LLC, AR Licensing, LLC, CMP KC Corp. and CMP Houston-KC, LLC to acquire the KCHZ-FM and KMJK-FM radio stations operated in the Kansas City market for an aggregate purchase price of $16.8 million (the "AR Broadcasting Asset Purchase"). The transaction was part of the Company's ongoing efforts to focus on radio stations in larger markets and geographically strategic regional clusters.

On December 6, 2012, the Company completed the acquisition of KCHZ-FM for a purchase price of $11.2 million. The Company paid $10.0 million in cash at closing with the remaining $1.2 million paid in January 2013 upon closing of the acquisition of KMJK-FM.

On January 28, 2013 the Company completed the AR Broadcasting Asset Purchase, acquiring KMJK-FM for a purchase price of $6.9 million.

Revenues attributable to the assets acquired in the AR Broadcasting Asset Purchase were not material to the Company's consolidated statement of operations for the year ended December 31, 2013.

The table below summarizes the purchase price allocation among the tangible and intangible assets acquired and liabilities assumed in the AR Broadcasting Asset Purchase (dollars in thousands):



Allocation	Amount
Current assets	$	93
Property and equipment (see Note 5)	1,256
Other assets	23
Broadcast licenses	16,850
Current liabilities	(152		)
Total purchase price	$	18,070

Pro Forma Financial Information

The following pro forma financial information assumes the WestwoodOne Acquisition and the Townsquare Transaction occurred as of January 1, 2012 and the Townsquare Asset Exchange occurred as of January 1, 2011. This pro forma financial information has been prepared based on estimates and assumptions, which management believes are reasonable, and is not necessarily indicative of the consolidated financial position or results of operations that Cumulus would have achieved had either the WestwoodOne Acquisition or the Townsquare Transaction actually occurred on January 1, 2012 or the Townsquare Asset Exchange actually occurred on January 1, 2011, or on any other historical date, nor is it reflective of the Company's expected actual financial position or results of operations for any future period (dollars in thousands):



	Unaudited Supplemental Pro Forma Data
	Year Ended December 31
Description	2013		2012			2011
Net revenues	$	1,245,715	$	1,263,188		$	466,044
Net income (loss)	68,110		(164,781		)	51,301

The pro forma financial information set forth above for the years ended December 31, 2013, and 2012 includes adjustments to reflect: (i) depreciation and amortization expense based on the fair value of long-lived assets acquired in the WestwoodOne Acquisition, the Townsquare Transaction and the Townsquare Asset Exchange; (ii) the elimination of interest expense and the loss on extinguishment of debt in connection with the WestwoodOne Acquisition, as all of WestwoodOne's outstanding indebtedness (including preferred stock) was repaid in connection therewith and (iii) certain other pro forma adjustments that would be required to be made to prepare pro forma financial information under ASC Topic 805, Business Combinations.

Pro forma financial information for the Green Bay Purchase, WFME Asset Exchange, AR Broadcasting Asset Purchase and the Pamal Broadcasting Asset Purchase is not required, as such information is not material to the Company's financial statements.