Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Financial Assets and Liabilities and Non-Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Fair values as of September 30, 2014 and December 31, 2013 were as follows (dollars in thousands):



				Fair Value Measurements at September 30, 2014 Using
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Equity interest in Pulser Media (2)	$	10,105		$	—	$	—	$	10,105
Total assets	$	10,105		$	—	$	—	$	10,105
Financial liabilities:
Other current liabilities
Contingent consideration (3)	$	(181	)	$	—	$	—	$	(181	)
Total liabilities	$	(181	)	$	—	$	—	$	(181	)



				Fair Value Measurements at December 31, 2013 Using
	Total Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Interest Rate Cap (1)	$	22		$	—	$	22	$	—
Equity interest in Pulser Media (2)	104			—		—		104
Total assets	$	126		$	—	$	22	$	104
Financial liabilities:
Other current liabilities
Contingent consideration (3)	$	(31	)	$	—	$	—	$	(31	)
Total liabilities	$	(31	)	$	—	$	—	$	(31	)

(1)

Pursuant to the Interest Rate Cap, the Company pays a fixed interest rate on a $71.3 million notional amount of its term loan. The fair value of the Interest Rate Cap is determined based on a discounted cash flow analysis of the expected future cash flows using observable inputs, including interest rates and yield curves. Derivative valuations incorporate adjustments that are necessary to reflect the credit risk.

(2)

On September 13, 2013, the Company and Pulser Media (the parent company of Rdio) ("Pulser"), entered into a five year strategic promotional partnership and sales arrangement (the "Rdio Agreement"). In exchange for $75 million of promotional commitments over five years, Cumulus will receive a 15% equity interest in Pulser, with the opportunity to earn additional equity, see Note 13 "Commitments and Contingencies". The fair value of the equity interest in Pulser was determined using inputs that are supported by little or no market activity (a Level 3 measurement). At September 30, 2014 the fair value of the equity interest in Pulser approximated its cost basis and the Company determined that the investment was not impaired.


(3)	The fair value of the contingent consideration was determined using inputs that are supported by little or no market activity (a Level 3 measurement). Contingent consideration represents the fair value of the additional cash consideration potentially payable as part of the WFME Asset Exchange and Wise Brothers Acquisition. See Note 2 “Acquisitions and Dispositions”.

Schedule of Gross Amounts and Fair Value

The following table shows the gross amount and fair value of the Company’s Term Loan, Securitization Facility and 7.75% Senior Notes (dollars in thousands):



	September 30, 2014		December 31, 2013
Term Loan:
Carrying value	$	1,953,875	$	2,025,000
Fair value - Level 2	1,914,798		2,025,000
Securitization Facility:
Carrying value	$	—	$	25,000
Fair value - Level 2	—		25,000
7.75% Senior Notes:
Carrying value	$	610,000	$	610,000
Fair value - Level 2	620,675		641,598

WFME Asset Exchange

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Quantitative Information Regarding Significant Unobservable Inputs

Quantitative information regarding the significant unobservable inputs related to the WFME Asset Exchange contingent consideration as of September 30, 2014 was as follows (dollars in thousands):



Fair Value		Valuation Technique	Unobservable Inputs
$	31	Income Approach	Total term	5 years
			Conditions	3
			Bond equivalent yield discount rate	0.1	%

Wise Brother Media Inc

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Quantitative Information Regarding Significant Unobservable Inputs

Quantitative information regarding the significant unobservable inputs related to the Wise Brothers Acquisition contingent consideration as of September 30, 2014 was as follows (dollars in thousands):



Fair Value		Valuation Technique	Unobservable Inputs
$	150	Income Approach	Total term	2 years
			Conditions	4

Equity interest in Pulser Media

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Schedule of Components of Change in Fair Value

The reconciliation below contains the components of the change in fair value associated with the equity interest in Pulser from January 1, 2014 to September 30, 2014 (dollars in thousands):



Description	Equity Interest in Pulser
Fair value balance at January 1, 2014	$	104
Add: Additions to equity interest in Pulser	10,001
Fair value balance at September 30, 2014	$	10,105

Contingent Consideration

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Schedule of Components of Change in Fair Value

The reconciliation below contains the components of the change in continuing contingency associated with the contingent consideration from January 1, 2014 to September 30, 2014 (dollars in thousands):



Description	Contingent Consideration
Fair value balance at January 1, 2014	$	(31	)
Add: Wise Brothers Acquisition	(150		)
Fair value balance at September 30, 2014	$	(181	)

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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