Attached files
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8-K - FORM 8-K - CUMULUS MEDIA INC | g27876e8vk.htm |
EX-99.1 - EX-99.1 - CUMULUS MEDIA INC | g27876exv99w1.htm |
EXHIBIT
99.2
INDEX TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
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Table of Contents
Unaudited
Pro Forma Condensed Consolidated Financial Information
Unless the context requires otherwise, or as specifically
described below:
| the terms Cumulus Media, we, our, and the Company refer to Cumulus Media Inc. and its consolidated subsidiaries; | |
| the term Refinancing refers to Cumulus Medias offering and sale of $610.0 million of its 7.75% Senior Notes due 2019 (the 2019 Notes Offering) and the use of the proceeds therefrom to prepay the term loan outstanding under our existing senior secured credit facilities under the credit agreement, dated as of June 7, 2006, among Cumulus Media Inc., the lenders party thereto and the administrative agent thereunder (as amended, the Existing Credit Agreement); | |
| the term Refinancing As Adjusted Basis means as adjusted to reflect the Refinancing; | |
| the term CMP refers to Cumulus Media Partners, LLC and its consolidated subsidiaries; | |
| the term CMP Acquisition refers to our acquisition, completed on August 1, 2011, of the 75.0% of the equity interests of CMP that we did not own; | |
| the term CMP Pro Forma Basis means on a pro forma as adjusted basis to reflect the Refinancing and the CMP Acquisition, with CMP designated as an unrestricted subsidiary under the Existing Credit Agreement; | |
| the term Citadel refers to Citadel Broadcasting Corporation and its consolidated subsidiaries; | |
| the term Citadel Acquisition refers to the pending merger of Citadel with one of our wholly-owned subsidiaries. At the effective time of the Citadel Acquisition, each outstanding share of common stock of Citadel will be converted automatically into the right to receive, at the election of the holder (subject to certain limitations set forth in the agreement and plan of merger, dated March 9, 2011, by and among Cumulus Media, Citadel and the other parties signatory thereto (the Citadel merger agreement) which governs the terms and conditions of the Citadel Acquisition), (i) $37.00 in cash, (ii) 8.525 shares of Cumulus Media common stock, or (iii) a combination thereof (the merger consideration). Additionally, in connection with and prior to the closing of the Citadel Acquisition, (i) each outstanding unvested option to acquire shares of Citadel common stock issued under Citadels equity incentive plan will automatically vest, and all outstanding options at the effective time of the Citadel Acquisition will be deemed exercised pursuant to a cashless exercise, with the resulting net number of Citadel shares to be converted into the right to receive the merger consideration, and (ii) each outstanding warrant to purchase Citadel common stock will become exercisable for the merger consideration, subject to any applicable Federal Communications Commission (FCC) limitations. Holders of unvested restricted shares of Citadel common stock will be eligible to receive the merger consideration for their shares pursuant to the original vesting schedule for such shares. Elections by Citadel stockholders are subject to adjustment such that the maximum number of shares of our common stock that may be issued in the Citadel Acquisition is 151,485,282 shares (the Maximum Stock Scenario Cap) and the maximum amount of cash payable by us in the Citadel Acquisition is $1,408,728,600 (the Maximum Cash Scenario). | |
| the term Citadel Pro Forma Basis refers to the Refinancing, the Citadel Acquisition and the Global Refinancing (defined below), but excluding the CMP Acquisition and any transactions related thereto, including repayment of any indebtedness or other obligations of CMP as otherwise contemplated under the Global Refinancing; | |
| the term Acquisitions refers, together, to the CMP Acquisition and the Citadel Acquisition; |
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Table of Contents
| the term Equity Investment means the investment by affiliates of (i) Crestview Partners (Crestview), (ii) Macquarie Capital (USA) Inc. (MIHI LLC) and (iii) UBS Securities LLC (UBS Securities and, together with Crestview and MIHI LLC, the Investors), of up to an aggregate of $500.0 million of our equity securities, the proceeds of which will be used to pay a part of the cash portion of the purchase price for, and which investment is conditioned on the closing of, the Citadel Acquisition, and the agreement governing the terms and conditions of the Equity Investment is referred to as the Investment Agreement; | |
| the term Global Refinancing refers to our expected entry into one or more credit facilities, substantially on terms as previously disclosed, with a syndicate of lenders, agents and arrangers pursuant to which Cumulus Media expects to obtain senior secured financing of $2.415 billion in order to complete the Citadel Acquisition and related refinancing (the Acquisition Credit Facility), the repayment of certain outstanding indebtedness of each of Cumulus, CMP and Citadel, and the redemption of certain preferred stock of CMP Susquenna Radio Holdings Corp., a subsidiary of CMP (Radio Holdings), and our other financing transactions contemplated in connection with the Citadel Acquisition; and | |
| the term Overall Pro Forma Basis means on a pro forma basis as adjusted to reflect the Refinancing, the CMP Acquisition, the Citadel Acquisition and the Global Refinancing. |
The following unaudited selected pro forma condensed
consolidated financial information is based on the historical
consolidated financial statements of each of Cumulus Media, CMP
and Citadel, each of which have previously been, or are being
herewith, filed with the Securities and Exchange Commission (the
SEC).
The following unaudited pro forma condensed consolidated
financial information is intended to provide information about
how each of the CMP Acquisition and the Citadel Acquisition, and
the related refinancing transactions, might have affected
Cumulus Medias historical consolidated financial
statements if such transactions had closed as of January 1,
2010 in the case of the statements of operations information,
and as of June 30, 2011 in the case of the balance sheet
information.
The unaudited pro forma condensed consolidated financial
information is presented on the following bases (in each case
also giving pro forma effect to the completion of the 2019 Notes
Offering only on the statement of operations information as of
December 31, 2010, as such offering was completed on
April 29, 2011):
| a CMP Pro Forma Basis, giving effect to the CMP Acquisition (including certain developments in its business); | |
| a Citadel Pro Forma Basis, giving effect to the Citadel Acquisition and the Global Refinancing (excluding any portion thereof related to refinancing of any indebtedness or other obligations of CMP); and |
| an Overall Pro Forma Basis, giving effect to the CMP Acquisition (including certain developments in its business), the Citadel Acquisition and the Global Refinancing. |
Pursuant to the Citadel merger agreement, Cumulus Media has
agreed to issue to holders of Citadel common stock (including
holders of warrants to acquire Citadel common stock) a number of
shares of Cumulus Media common stock up to the Maximum Stock
Scenario (plus an additional number of shares based upon the
number of shares of Citadel common stock that are issued upon
the exercise of stock options to purchase shares of Citadel
common stock prior to the closing date of the Citadel
Acquisition) and has agreed to pay to holders of Citadel common
stock (including holders of warrants to acquire Citadel common
stock) an amount of cash up to the Maximum Cash Scenario (plus
an additional amount based on the number of shares of Citadel
common stock that are issued upon the exercise of stock options
to purchase shares of Citadel common stock prior to the closing
date of the Citadel Acquisition, less the cash value of any
dissenting shares), with the actual number of shares to be
issued, and the amount of cash to be paid, dependent upon
elections to be made by Citadel stockholders and warrant holders
prior to the completion of the Citadel Acquisition. For purposes
of this
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unaudited pro forma condensed consolidated financial
information, Cumulus Media has assumed that the merger
consideration will consist of $1,254.9 million in cash and
the issuance of 114,574,365 shares of Cumulus Media Class A
common stock (which represents the arithmetic mean, or
midpoint of the amount of cash which would be
payable, and the number of shares of Cumulus Media common stock
which would be issuable, to holders of Citadel common stock in
each of the Maximum Cash Scenario and the Maximum Stock
Scenario, and further assumes that all of the equity
consideration in the Citadel Acquisition would be issued in the
form of Cumulus Media Class A common stock), which shares
have an assumed aggregate value of $316.2 million (based on
an assumed price per share of Cumulus Media Class A common
stock of $2.76, the closing price of such common stock on the
Nasdaq Global Select Market on August 22, 2011, the most
recent practicable date). If Citadel stockholders and warrant
holders make elections such that the merger consideration is
payable at the Maximum Cash Scenario, Cumulus Media would
potentially draw an additional $70.0 million under the
revolving credit facility from what is borrowed under the
mid-point model presented, which would result in incremental
interest expense of $1.9 million for the six months ended
June 30, 2011 and $3.9 million for the twelve months
ended December 31, 2010 in each of the following Citadel
Pro Forma Basis and Overall Pro Forma Basis Condensed
Consolidated Statements of Operations.
The CMP Acquisition is being accounted for, and the Citadel
Acquisition will be accounted for, as a business combination
under the acquisition method and, accordingly, is expected to
result in the recognition of assets acquired and liabilities
assumed at fair value. However, as of the date hereof, Cumulus
Media has not performed the valuation studies necessary to
estimate the fair values of the assets it has acquired or
expects to acquire, as applicable, and the liabilities it has
assumed or expects to assume, as applicable, to reflect the
allocation of the applicable purchase price to the respective
fair values.
For purposes of preparing the following pro forma adjustments to
reflect the CMP Acquisition, Cumulus Media has estimated the
fair values of the indefinite-lived intangible assets based on
information available as of December 31, 2010. For purposes
of preparing the pro forma adjustments to reflect the Citadel
Acquisition, Cumulus Media has carried forward the net book
value of the tangible assets and indefinite-lived and
definite-lived intangible assets from those appearing in
Citadels consolidated financial statements as of
December 31, 2010, which have previously been filed with
the SEC, as Cumulus Media does not have any independent
third-party valuations or other valuation studies estimating the
value of these intangible assets. However, due to Citadels
application of fresh-start accounting upon its emergence from
bankruptcy on June 3, 2010, Citadels tangible assets
and intangible assets were adjusted to fair value during 2010.
For each of the CMP Acquisition and the Citadel Acquisition, the
excess of the consideration transferred or expected to be
transferred, as applicable, over the fair value of the net
assets acquired or expected to be acquired, as applicable, has
been presented as an adjustment to goodwill. Cumulus Media
has not estimated the fair value of other assets acquired or
expected to be acquired or liabilities assumed or expected to be
assumed, as applicable, including, but not limited to, current
assets, property and equipment, current liabilities, other
miscellaneous liabilities and other finite-lived intangible
assets and related deferred tax liabilities. A final
determination of these fair values will be based upon appraisals
prepared or to be prepared by independent third parties and on
the actual tangible and identifiable intangible assets and
liabilities that exist or existed as of the closing date of each
respective acquisition. The actual allocations of the
consideration transferred may differ materially from the
preliminary allocations assumed in this unaudited pro forma
condensed consolidated financial information.
The presentation of financial information on a Citadel and an
Overall Pro Forma Basis for the year ended December 31,
2010 includes the combined results of operations of Citadel for
its predecessor and successor periods. In connection with its
emergence from bankruptcy on June 3, 2010, as detailed in
its filings with the SEC from time to time since that date and
in accordance with accounting guidance on reorganizations,
Citadel adopted fresh-start accounting as of May 31, 2010.
Historical financial results of Citadel are presented for the
Predecessor entity for periods prior to
Citadels emergence from bankruptcy and for the
Successor entity for periods after Citadels
emergence from bankruptcy. As a result, financial results of
periods prior to Citadels adoption of fresh-start
accounting are not comparable to financial results of periods
after that date. The combined operating results of Citadel
including the Successor and Predecessor periods in 2010 are not
necessarily indicative of the results that may be expected for a
full fiscal year. Presentation of the combined financial
information of the Predecessor and Successor for the twelve
months ended December 31, 2010 is not in accordance with
accounting
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principles generally accepted in the United States
(GAAP). However, the Company believes that the
combined financial results are useful for their respective
investors to assess Citadels ongoing financial and
operational performance and trends.
The unaudited pro forma condensed consolidated financial
information below is based upon currently available information
and estimates and assumptions that Cumulus Media believes are
reasonable as of the date hereof. These estimates and
assumptions relate to matters including, but not limited to,
Cumulus Medias stock price at the date of closing of the
Citadel Acquisition (assumed to be $2.76 per share, the closing
price of Cumulus Medias common stock on the Nasdaq Global
Select Market on August 22, 2011, the most recent
practicable date), which was, and will be, used to determine a
portion of the actual purchase price in each of the CMP
Acquisition and the Citadel Acquisition, the LIBOR rate in
effect for borrowings at the date of closing of the Global
Refinancing, which will be used to determine the interest rate
on borrowings under the Acquisition Credit Facility, and the
form of the investment in Cumulus Medias equity securities
to be made by MIHI LLC pursuant to the Investment Agreement,
which is assumed to be common stock, all of which will impact,
among other things, Cumulus Medias available cash,
interest expense and stockholders equity. Cumulus Media
has also assumed that the radio stations and other assets that
Cumulus Media will be required to divest in connection with
obtaining DOJ, FCC and other federal regulatory approvals
required to complete the Citadel Acquisition will not be
material to its consolidated financial position or results of
operations and, as a result, Cumulus Media has not made a
provision in this unaudited pro forma condensed consolidated
financial information for any such divestitures.
Any of the factors underlying these estimates and assumptions
may change or prove to be materially different, and the
estimates and assumptions may not be representative of facts
existing at the closing date of the Citadel Acquisition or at
the date of the final purchase price allocation relating to
either the CMP Acquisition or the Citadel Acquisition. The
unaudited pro forma condensed consolidated financial information
is presented for illustrative and informational purposes only
and is not intended to represent or be indicative of what
Cumulus Medias financial condition or results of
operations would have been had the transactions described above
occurred on or as of the dates indicated. The unaudited pro
forma condensed consolidated financial information also should
not be considered representative of Cumulus Medias future
financial condition or results of operations. In addition to the
pro forma adjustments to Cumulus Medias historical
consolidated financial statements, various other factors are
expected to have an effect on Cumulus Medias financial
condition and results of operations, both before and after the
closing of the Citadel Acquisition and the related financing
transactions.
You should read the following unaudited pro forma condensed
consolidated financial information in conjunction with the
information under the heading Managements Discussion
and Analysis of Financial Condition and Results of
Operations, in each of Cumulus Medias and
Citadels Annual Reports on
Form 10-K
for the fiscal year ended December 31, 2010 and Quarterly
Reports on
Form 10-Q
for the six months ended June 30, 2011, each of which has
previously been filed with the SEC. You should also read this
information in conjunction with each of Cumulus Medias,
CMPs and Citadels consolidated financial statements
and related notes, each of which have previously been filed, or
are being herewith filed, with the SEC.
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Table of Contents
Unaudited
CMP Pro Forma Basis Condensed Consolidated Statement of
Operations
for the Six Months Ended June 30, 2011
for the Six Months Ended June 30, 2011
CMP |
||||||||||||||||||||
Cumulus |
Pro Forma |
CMP |
||||||||||||||||||
Media |
CMP |
KC LLC |
Basis |
Pro Forma |
||||||||||||||||
Historical | Historical | Historical(A) | Adjustments | Basis | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Broadcast revenues
|
$ | 124,787 | $ | 88,007 | $ | (3,756 | ) | $ | | $ | 209,038 | |||||||||
Management fees
|
2,250 | | | (2,000 | )(B) | 250 | ||||||||||||||
Net revenues
|
127,037 | 88,007 | (3,756 | ) | (2,000 | ) | 209,288 | |||||||||||||
Operating expenses:
|
||||||||||||||||||||
Station operating expenses (excluding depreciation, amortization
and local marketing agreement (LMA) fees)
|
76,713 | 50,131 | (3,073 | ) | | 123,771 | ||||||||||||||
Depreciation and amortization
|
4,012 | 3,899 | (877 | ) | | 7,034 | ||||||||||||||
LMA fees
|
1,141 | (90 | ) | | | 1,051 | ||||||||||||||
Corporate general and administrative expenses
|
17,271 | 5,004 | (1,072 | ) | (2,000 | )(B) | 19,203 | |||||||||||||
Gain on exchange of assets or stations
|
(15,278 | ) | | | | (15,278 | ) | |||||||||||||
Realized loss on derivative instrument
|
1,244 | | | | 1,244 | |||||||||||||||
Total operating expenses
|
85,103 | 58,944 | (5,022 | ) | (2,000 | ) | 137,025 | |||||||||||||
Operating income
|
41,934 | 29,063 | 1,266 | | 72,263 | |||||||||||||||
Non-operating (expense) income:
|
||||||||||||||||||||
Interest (expense) income, net
|
(15,496 | ) | (12,165 | ) | 3,129 | (9,055 | )(C) | (33,587 | ) | |||||||||||
Loss on extinguishment of debt
|
(4,366 | ) | | | | (4,366 | ) | |||||||||||||
Other (expense) income, net
|
(93 | ) | (271 | ) | 131 | | (233 | ) | ||||||||||||
Total non-operating (expense) income, net
|
(19,955 | ) | (12,436 | ) | 3,260 | (9,055 | ) | (38,186 | ) | |||||||||||
Income (loss) before income taxes and equity in net losses of
affiliate
|
21,979 | 16,627 | 4,526 | (9,055 | ) | 34,077 | ||||||||||||||
Income tax (expense) benefit
|
(4,519 | ) | (8,279 | ) | 32 | 3,441 | (D) | (9,325 | ) | |||||||||||
Net income (loss)
|
$ | 17,460 | $ | 8,348 | $ | 4,558 | $ | (5,614 | ) | $ | 24,752 | |||||||||
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Unaudited
CMP Pro Forma Basis Condensed Consolidated Statement of
Operations
for the Year Ended December 31, 2010
for the Year Ended December 31, 2010
CMP |
||||||||||||||||||||
Cumulus |
Pro Forma |
CMP |
||||||||||||||||||
Media |
CMP |
KC LLC |
Basis |
Pro Forma |
||||||||||||||||
Historical | Historical | Historical(A) | Adjustments | Basis | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Broadcast revenues
|
$ | 259,187 | $ | 188,718 | $ | (7,043 | ) | $ | | $ | 440,862 | |||||||||
Management fees
|
4,146 | | | (4,000 | )(B) | 146 | ||||||||||||||
Net revenues
|
263,333 | 188,718 | (7,043 | ) | (4,000 | ) | 441,008 | |||||||||||||
Operating expenses:
|
||||||||||||||||||||
Station operating expenses (excluding depreciation, amortization
and LMA fees)
|
159,807 | 103,103 | (6,086 | ) | | 256,824 | ||||||||||||||
Depreciation and amortization
|
9,098 | 8,576 | (1,780 | ) | | 15,894 | ||||||||||||||
LMA fees
|
2,054 | | | | 2,054 | |||||||||||||||
Corporate general and administrative expenses
|
18,519 | 8,397 | (1,138 | ) | (4,000 | )(B) | 21,778 | |||||||||||||
Loss on sale of assets
|
| 29 | | | 29 | |||||||||||||||
Realized loss on derivative instrument
|
1,957 | | | | 1,957 | |||||||||||||||
Impairment of intangible assets and goodwill
|
671 | 3,296 | (3,296 | ) | | 671 | ||||||||||||||
Total operating expenses
|
192,106 | 123,401 | (12,300 | ) | (4,000 | ) | 299,207 | |||||||||||||
Operating income
|
71,227 | 65,317 | 5,257 | | 141,801 | |||||||||||||||
Non-operating (expense) income:
|
||||||||||||||||||||
Interest (expense) income, net
|
(30,307 | ) | (28,171 | ) | 6,034 | (18,391 | )(C) | (70,835 | ) | |||||||||||
Terminated transaction expense
|
(7,847 | ) | | | | (7,847 | ) | |||||||||||||
Other income (expense), net
|
108 | 349 | (350 | ) | | 107 | ||||||||||||||
Total non-operating (expense) income, net
|
(38,046 | ) | (27,822 | ) | 5,684 | (18,391 | ) | (78,575 | ) | |||||||||||
Income (loss) before income taxes and equity in net losses of
affiliate
|
33,181 | 37,495 | 10,941 | (18,391 | ) | 63,226 | ||||||||||||||
Income tax (expense) benefit
|
(3,779 | ) | (18,210 | ) | 847 | 6,989 | (D) | (14,153 | ) | |||||||||||
Net income (loss)
|
$ | 29,402 | $ | 19,285 | $ | 11,788 | $ | (11,402 | ) | $ | 49,073 | |||||||||
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Unaudited
CMP Pro Forma Basis Condensed Consolidated Balance Sheet as of
June 30, 2011
CMP |
||||||||||||||||||||
Cumulus |
Pro Forma |
CMP |
||||||||||||||||||
Media |
CMP |
KC LLC |
Basis |
Pro Forma |
||||||||||||||||
Historical | Historical | Historical(A) | Adjustments | Basis | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Assets
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 29,553 | $ | 16,133 | $ | (1,481 | ) | $ | | $ | 44,205 | |||||||||
Restricted cash
|
600 | 600 | | | 1,200 | |||||||||||||||
Accounts receivable, less allowance for doubtful accounts
|
40,603 | 36,052 | (1,434 | ) | | 75,221 | ||||||||||||||
Trade receivable
|
4,149 | 1,245 | (13 | ) | | 5,381 | ||||||||||||||
Prepaid expenses and other current assets
|
4,243 | 6,390 | 234 | (1,000 | )(B) | 9,867 | ||||||||||||||
Total current assets
|
79,148 | 60,420 | (2,694 | ) | (1,000 | ) | 135,874 | |||||||||||||
Property and equipment, net
|
37,981 | 22,765 | (4,951 | ) | | 55,795 | ||||||||||||||
Intangible assets, net
|
170,745 | 242,919 | (15,233 | ) | 19,037 | (E) | 417,468 | |||||||||||||
Goodwill
|
60,422 | 79,700 | | 433,091 | (E) | 573,213 | ||||||||||||||
Deferred financing costs
|
17,433 | 3,935 | (130 | ) | | 21,238 | ||||||||||||||
Long-term investments
|
| 4,000 | | 2,400 | (E) | 6,400 | ||||||||||||||
Other assets
|
1,472 | 324 | (45 | ) | | 1,751 | ||||||||||||||
Total assets
|
$ | 367,201 | $ | 414,063 | $ | (23,053 | ) | $ | 453,528 | $ | 1,211,739 | |||||||||
Liabilities and Stockholders Equity (Deficit)
|
||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable and accrued expenses
|
$ | 28,687 | $ | 22,853 | $ | (10,737 | )(A) | $ | (1,000 | )(B) | $ | 39,803 | ||||||||
Trade payable
|
4,074 | 1,065 | | | 5,139 | |||||||||||||||
Current portion of long-term debt
|
| 93,228 | (86,228 | )(A) | | 7,000 | ||||||||||||||
Total current liabilities
|
32,761 | 117,146 | (96,965 | ) | (1,000 | ) | 51,942 | |||||||||||||
Long-term debt
|
610,000 | 612,234 | | | 1,222,234 | |||||||||||||||
Other liabilities
|
17,887 | 7,536 | (23 | )(A) | (1,485 | )(E) | 23,915 | |||||||||||||
Deferred income taxes
|
29,029 | 85,839 | | (A) | 7,234 | (E) | 122,102 | |||||||||||||
Total liabilities
|
689,677 | 822,755 | (96,988 | ) | 4,749 | 1,420,193 | ||||||||||||||
Stockholders equity (deficit):
|
||||||||||||||||||||
Class A common stock
|
596 | | | 116 | (L) | 712 | ||||||||||||||
Class B common stock
|
58 | | | | 58 | |||||||||||||||
Class C common stock
|
6 | | | | 6 | |||||||||||||||
Class D common stock
|
| | | 66 | (L) | 66 | ||||||||||||||
Treasury stock, at cost
|
(251,148 | ) | | | (251,148 | ) | ||||||||||||||
Additional
paid-in-capital
|
959,885 | 310,850 | (367 | )(A) | (232,356 | )(O) | 1,038,012 | |||||||||||||
Accumulated deficit
|
(1,031,873 | ) | (787,019 | ) | 74,302 | (A) | 724,353 | (O) | (1,020,237 | ) | ||||||||||
Noncontrolling interest
|
| 67,477 | | (43,400 | )(E) | 24,077 | ||||||||||||||
Total stockholders(deficit) equity
|
(322,476 | ) | (408,692 | ) | 73,935 | 448,779 | (208,454 | ) | ||||||||||||
Total liabilities and stockholders equity (deficit)
|
$ | 367,201 | $ | 414,063 | $ | (23,053 | ) | $ | 453,528 | $ | 1,211,739 | |||||||||
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Unaudited
Citadel Pro Forma Basis Condensed Consolidated Statement of
Operations
for the Six Months Ended June 30, 2011
for the Six Months Ended June 30, 2011
June 30, 2011 | ||||||||||||||||
Citadel |
||||||||||||||||
Cumulus |
Pro Forma |
Citadel |
||||||||||||||
Media |
Citadel |
Basis |
Pro Forma |
|||||||||||||
Historical | Historical(M) | Adjustments | Basis | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Broadcast revenues
|
$ | 124,787 | $ | 345,018 | $ | | $ | 469,805 | ||||||||
Management fees
|
2,250 | | | 2,250 | ||||||||||||
Net revenues
|
127,037 | 345,018 | | 472,055 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Station operating expenses (excluding depreciation, amortization
and LMA fees)
|
76,713 | 233,032 | | 309,745 | ||||||||||||
Depreciation and amortization
|
4,012 | 46,117 | | 50,129 | ||||||||||||
LMA fees
|
1,141 | 208 | | 1,349 | ||||||||||||
Corporate general and administrative expenses
|
17,271 | 27,818 | | 45,089 | ||||||||||||
(Gain) loss on exchange of assets or stations
|
(15,278 | ) | 404 | | (14,874 | ) | ||||||||||
Realized loss on derivative instrument
|
1,244 | | | 1,244 | ||||||||||||
Other operating expenses
|
| 8,674 | | 8,674 | ||||||||||||
Total operating expenses
|
85,103 | 316,253 | | 401,356 | ||||||||||||
Operating income
|
41,934 | 28,765 | | 70,699 | ||||||||||||
Non-operating (expense) income:
|
||||||||||||||||
Interest expense, net
|
(15,496 | ) | (24,496 | ) | (36,986 | )(I) | (76,978 | ) | ||||||||
Write off of deferred financing costs
|
| (1,048 | ) | | (1,048 | ) | ||||||||||
Loss on extinguishment of debt
|
(4,366 | ) | | | (4,366 | ) | ||||||||||
Other (expense) income, net
|
(93 | ) | | | (93 | ) | ||||||||||
Total non-operating expense, net
|
(19,955 | ) | (25,544 | ) | (36,986 | ) | (82,485 | ) | ||||||||
Income (loss) before income taxes and equity in net losses of
affiliate
|
21,979 | 3,221 | (36,986 | ) | (11,786 | ) | ||||||||||
Income tax (expense) benefit
|
(4,519 | ) | (1,120 | ) | 14,055 | (D) | 8,416 | |||||||||
Net income (loss)
|
$ | 17,460 | $ | 2,101 | $ | (22,931 | ) | $ | (3,370 | ) | ||||||
P-9
Table of Contents
Unaudited
Citadel Pro Forma Basis Condensed Consolidated Statement of
Operations
for the Year Ended December 31, 2010
for the Year Ended December 31, 2010
December 31, 2010 | |||||||||||||||||||||||||
Citadel |
|||||||||||||||||||||||||
Cumulus |
Predecessor |
Successor |
Combined |
Pro Forma |
Citadel |
||||||||||||||||||||
Media |
Citadel |
Citadel |
Citadel |
Basis |
Pro Forma |
||||||||||||||||||||
Historical | Historical(M) | Historical(M) | Historical(M) | Adjustments | Basis | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Broadcast revenues
|
$ | 259,187 | $ | 295,424 | $ | 444,142 | $ | 739,566 | $ | | $ | 998,753 | |||||||||||||
Management fees
|
4,146 | | | | | 4,146 | |||||||||||||||||||
Net revenues
|
263,333 | 295,424 | 444,142 | 739,566 | | 1,002,899 | |||||||||||||||||||
Operating expenses:
|
|||||||||||||||||||||||||
Station operating expenses (excluding depreciation, amortization
and LMA fees)
|
159,807 | 194,685 | 278,231 | 472,916 | | 632,723 | |||||||||||||||||||
Depreciation and amortization
|
9,098 | 11,365 | 58,564 | 69,929 | 20,204 | (K) | 99,231 | ||||||||||||||||||
LMA fees
|
2,054 | 455 | 379 | 834 | | 2,888 | |||||||||||||||||||
Corporate general and administrative expenses
|
18,519 | 8,929 | 26,394 | 35,323 | 6,500 | (G) | 60,342 | ||||||||||||||||||
Loss on sale of assets
|
| 859 | 271 | 1,130 | | 1,130 | |||||||||||||||||||
Realized loss on derivative instrument
|
1,957 | | | | | 1,957 | |||||||||||||||||||
Impairment of intangible assets and goodwill
|
671 | | | | | 671 | |||||||||||||||||||
Other operating (expenses) income
|
| (5 | ) | 7,215 | 7,210 | | 7,210 | ||||||||||||||||||
Total operating expenses
|
192,106 | 216,288 | 371,054 | 587,342 | 26,704 | 806,152 | |||||||||||||||||||
Operating income (loss)
|
71,227 | 79,136 | 73,088 | 152,224 | (26,704 | ) | 196,747 | ||||||||||||||||||
Non-operating (expense) income:
|
|||||||||||||||||||||||||
Interest expense, net
|
(30,307 | ) | (17,771 | ) | (46,349 | ) | (64,120 | ) | (59,090 | )(I) | (153,517 | ) | |||||||||||||
Terminated transaction expense
|
(7,847 | ) | | | | | (7,847 | ) | |||||||||||||||||
Other income (expense), net
|
108 | 1,014,077 | (20,969 | ) | 993,108 | (993,108 | )(K) | 108 | |||||||||||||||||
Total non-operating (expense) income, net
|
(38,046 | ) | 996,306 | (67,318 | ) | 928,988 | (1,052,198 | ) | (161,256 | ) | |||||||||||||||
Income (loss) before income taxes and equity in net losses of
affiliate
|
33,181 | 1,075,442 | 5,770 | 1,081,212 | (1,078,902 | ) | 35,491 | ||||||||||||||||||
Income tax (expense) benefit
|
(3,779 | ) | (5,737 | ) | (7,553 | ) | (13,290 | ) | 24,633 | (D) | 7,564 | ||||||||||||||
Net income (loss)
|
$ | 29,402 | $ | 1,069,705 | $ | (1,783 | ) | $ | 1,067,922 | $ | (1,054,269 | ) | $ | 43,055 | |||||||||||
P-10
Table of Contents
Unaudited
Citadel Pro Forma Basis Condensed Consolidated Balance Sheet as
of June 30, 2011
Citadel |
||||||||||||||||
Cumulus |
Pro Forma |
Citadel |
||||||||||||||
Media |
Citadel |
Basis |
Pro Forma |
|||||||||||||
Historical | Historical(M) | Adjustments | Basis | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets
|
||||||||||||||||
Current assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 29,553 | $ | 104,803 | $ | (3,475 | )(I) | $ | 130,881 | |||||||
Restricted cash
|
600 | 2,400 | | 3,000 | ||||||||||||
Accounts receivable, less allowance for doubtful accounts
|
40,603 | 140,554 | (2,931 | )(N) | 178,226 | |||||||||||
Trade receivable
|
4,149 | 1,847 | | 5,996 | ||||||||||||
Deferred tax asset
|
| 12,049 | | 12,049 | ||||||||||||
Prepaid expenses and other current assets
|
4,243 | 17,488 | | 21,731 | ||||||||||||
Total current assets
|
79,148 | 279,141 | (6,406 | ) | 351,883 | |||||||||||
Property and equipment, net
|
37,981 | 196,008 | | 233,989 | ||||||||||||
Intangible assets, net
|
170,745 | 1,075,891 | | 1,220,805 | ||||||||||||
Goodwill
|
60,422 | 763,849 | 274,946 | (F) | 1,099,217 | |||||||||||
Deferred Financing costs
|
17,433 | 17,988 | 18,338 | (I) | 53,759 | |||||||||||
Other assets
|
1,472 | 19,477 | | 46,780 | ||||||||||||
Total assets
|
$ | 367,201 | $ | 2,352,354 | $ | 286,878 | $ | 3,006,433 | ||||||||
Liabilities and Stockholders Equity (Deficit)
|
||||||||||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable and accrued expenses
|
$ | 28,687 | $ | 48,537 | $ | (6,542 | )(N) | $ | 70,682 | |||||||
Trade payable
|
4,074 | 1,313 | | 5,387 | ||||||||||||
Total current liabilities
|
32,761 | 49,850 | (6,542 | )(N) | 76,069 | |||||||||||
Long-term debt
|
610,000 | 696,500 | 945,152 | (I) | 2,251,652 | |||||||||||
Other liabilities
|
17,887 | 54,068 | | 71,955 | ||||||||||||
Deferred income taxes
|
29,029 | 255,756 | | 284,785 | ||||||||||||
Total liabilities
|
689,677 | 1,056,174 | 938,610 | 2,684,461 | ||||||||||||
Stockholders equity (deficit):
|
||||||||||||||||
Class A common stock
|
596 | 5 | 2,051 | (L) | 2,652 | |||||||||||
Class B common stock
|
58 | 19 | (19 | )(F) | 58 | |||||||||||
Class C common stock
|
6 | | | 6 | ||||||||||||
Successor equity held in reserve
|
| 7,887 | (7,887 | )(F) | | |||||||||||
Treasury stock, at cost
|
(251,148 | ) | (6,575 | ) | 6,575 | (251,148 | ) | |||||||||
Additional
paid-in-capital
|
959,885 | 1,294,526 | (606,757 | )(O) | 1,647,654 | |||||||||||
(Accumulated deficit) Retained earnings
|
(1,031,873 | ) | 318 | (45,695 | )(O) | (1,077,250 | ) | |||||||||
Total stockholders (deficit) equity
|
(322,476 | ) | 1,296,180 | (651,732 | ) | 321,972 | ||||||||||
Total liabilities and stockholders equity (deficit)
|
$ | 367,201 | $ | 2,352,354 | $ | 286,878 | $ | 3,006,433 | ||||||||
P-11
Table of Contents
Unaudited
Overall Pro Forma Basis Condensed Consolidated Statement of
Operations
for the Six Months Ended June 30, 2011
for the Six Months Ended June 30, 2011
Citadel |
||||||||||||||||||||||||||||
Pro Forma |
||||||||||||||||||||||||||||
CMP |
and Global |
|||||||||||||||||||||||||||
Cumulus |
Pro Forma |
CMP |
Refinancing |
Overall |
||||||||||||||||||||||||
Media |
CMP |
Basis |
Pro Forma |
Citadel |
Basis |
Pro Forma |
||||||||||||||||||||||
Historical | Historical | Adjustments | Basis | Historical(M) | Adjustments | Basis | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Broadcast revenues
|
$ | 124,787 | $ | 88,007 | $ | (3,756 | )(A) | $ | 209,038 | $ | 345,018 | $ | $ | 554,056 | ||||||||||||||
Management fees
|
2,250 | | (2,000 | )(B) | 250 | | | 250 | ||||||||||||||||||||
Net revenues
|
127,037 | 88,007 | (5,756 | ) | 209,288 | 345,018 | | 554,306 | ||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||
Station operating expenses (excluding depreciation, amortization
and LMA fees)
|
76,713 | 50,131 | (3,073 | )(A) | 123,771 | 233,032 | | 356,803 | ||||||||||||||||||||
Depreciation and amortization
|
4,012 | 3,899 | (877 | )(A) | 7,034 | 46,117 | | 53,151 | ||||||||||||||||||||
LMA fees
|
1,141 | (90 | ) | | 1,051 | 208 | | 1,259 | ||||||||||||||||||||
Corporate general and administrative expenses
|
17,271 | 5,004 | (3,072 | )(A,B) | 19,203 | 27,818 | | 47,021 | ||||||||||||||||||||
(Gain) loss on exchange of assets or stations
|
(15,278 | ) | | | (15,278 | ) | 404 | | (14,874 | ) | ||||||||||||||||||
Realized loss on derivative instrument
|
1,244 | | | 1,244 | | | 1,244 | |||||||||||||||||||||
Other operating expenses
|
| | | | 8,674 | 8,674 | ||||||||||||||||||||||
Total operating expenses
|
85,103 | 58,944 | (7,022 | ) | 137,025 | 316,253 | | 453,278 | ||||||||||||||||||||
Operating income
|
41,934 | 29,063 | 1,266 | 72,263 | 28,765 | | 101,028 | |||||||||||||||||||||
Non-operating expense:
|
||||||||||||||||||||||||||||
Interest expense, net
|
(15,496 | ) | (12,165 | ) | (5,926 | )(A,C) | (33,587 | ) | (24,496 | ) | (42,883 | )(I) | (100,966 | ) | ||||||||||||||
Write off of deferred financing costs
|
(1,048 | ) | (1,048 | ) | ||||||||||||||||||||||||
Loss on extinguishment of debt
|
(4,366 | ) | (4,366 | ) | (4,366 | ) | ||||||||||||||||||||||
Other (expense) income, net
|
(93 | ) | (271 | ) | 131 | (233 | ) | | | (233 | ) | |||||||||||||||||
Total non-operating expense, net
|
(19,955 | ) | (12,436 | ) | (5,795 | ) | (38,186 | ) | (25,544 | ) | (42,883 | ) | (106,613 | ) | ||||||||||||||
Income (loss) before income taxes and equity in net losses of
affiliate
|
21,979 | 16,627 | (4,529 | ) | 34,077 | 3,221 | (42,883 | ) | (5,585 | ) | ||||||||||||||||||
Income tax (expense) benefit
|
(4,519 | ) | (8,279 | ) | 3,473 | (A,D) | (9,325 | ) | (1,120 | ) | 16,295 | (D) | 5,850 | |||||||||||||||
Net income (loss)
|
$ | 17,460 | $ | 8,348 | $ | (1,056 | ) | $ | 24,752 | $ | 2,101 | $ | (26,588 | ) | $ | 265 | ||||||||||||
P-12
Table of Contents
Unaudited
Overall Pro Forma Basis Condensed Consolidated Statement of
Operations
for the Year Ended December 31, 2010
for the Year Ended December 31, 2010
Citadel |
|||||||||||||||||||||||||||||||||||||
Pro Forma |
|||||||||||||||||||||||||||||||||||||
CMP |
and Global |
||||||||||||||||||||||||||||||||||||
Cumulus |
Pro Forma |
CMP |
Predecessor |
Successor |
Combined |
Refinancing |
Overall |
||||||||||||||||||||||||||||||
Media |
CMP |
Basis |
Pro Forma |
Citadel |
Citadel |
Citadel |
Basis |
Pro Forma |
|||||||||||||||||||||||||||||
Historical | Historical | Adjustments | Basis | Historical(M) | Historical(M) | Historical(M) | Adjustments | Basis | |||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||
Broadcast revenues
|
$ | 259,187 | $ | 188,718 | $ | (7,043 | )(A) | $ | 440,862 | $ | 295,424 | $ | 444,142 | $ | 739,566 | $ | | $ | 1,180,428 | ||||||||||||||||||
Management fees
|
4,146 | | (4,000 | )(B) | 146 | | | | | 146 | |||||||||||||||||||||||||||
Net revenues
|
263,333 | 188,718 | (11,043 | ) | 441,008 | 295,424 | 444,142 | 739,566 | | 1,180,574 | |||||||||||||||||||||||||||
Operating expenses:
|
|||||||||||||||||||||||||||||||||||||
Station operating expenses (excluding depreciation, amortization
and LMA fees)
|
159,807 | 103,103 | (6,086 | )(A) | 256,824 | 194,685 | 278,231 | 472,916 | | 729,740 | |||||||||||||||||||||||||||
Depreciation and amortization
|
9,098 | 8,576 | (1,780 | )(A) | 15,894 | 11,365 | 58,564 | 69,929 | 20,204 | (K) | 106,027 | ||||||||||||||||||||||||||
LMA fees
|
2,054 | | | 2,054 | 455 | 379 | 834 | | 2,888 | ||||||||||||||||||||||||||||
Corporate general and administrative expenses
|
18,519 | 8,397 | (5,138 | )(A,B) | 21,778 | 8,929 | 26,394 | 35,323 | 6,500 | (G) | 63,601 | ||||||||||||||||||||||||||
Loss on sale of assets
|
| 29 | | 29 | 859 | 271 | 1,130 | | 1,159 | ||||||||||||||||||||||||||||
Realized loss on derivative instrument
|
1,957 | | | 1,957 | | | | | 1,957 | ||||||||||||||||||||||||||||
Impairment of intangible assets and goodwill
|
671 | 3,296 | (3,296 | )(A) | 671 | | | | | 671 | |||||||||||||||||||||||||||
Other operating expenses
|
| | | | (5 | ) | 7,215 | 7,210 | | 7,210 | |||||||||||||||||||||||||||
Total operating expenses
|
192,106 | 123,401 | (16,300 | ) | 299,207 | 216,288 | 371,054 | 587,342 | 26,704 | 913,253 | |||||||||||||||||||||||||||
Operating income (loss)
|
71,227 | 65,317 | 5,257 | 141,801 | 79,136 | 73,088 | 152,224 | (26,704 | ) | 267,321 | |||||||||||||||||||||||||||
Non-operating (expense) income:
|
|||||||||||||||||||||||||||||||||||||
Interest expense, net
|
(30,307 | ) | (28,171 | ) | (12,357 | )(A,C) | (70,835 | ) | (17,771 | ) | (46,349 | ) | (64,120 | ) | (68,301 | )(I) | (203,256 | ) | |||||||||||||||||||
Terminated transaction expense
|
(7,847 | ) | | | (7,847 | ) | | | | | (7,847 | ) | |||||||||||||||||||||||||
Other income (expense), net
|
108 | 349 | (350 | )(A) | 107 | 1,014,077 | (20,969 | ) | 993,108 | (993,108 | )(K) | 107 | |||||||||||||||||||||||||
Total non-operating (expense) income, net
|
(38,046 | ) | (27,822 | ) | (12,707 | ) | (78,575 | ) | 996,306 | (67,318 | ) | 928,988 | (1,061,409 | ) | (210,996 | ) | |||||||||||||||||||||
Income (loss) before income taxes and equity in net losses of
affiliate
|
33,181 | 37,495 | (7,450 | ) | 63,226 | 1,075,442 | 5,770 | 1,081,212 | (1,088,113 | ) | 56,325 | ||||||||||||||||||||||||||
Income tax (expense) benefit
|
(3,779 | ) | (18,210 | ) | 7,836 | (A,D) | (14,153 | ) | (5,737 | ) | (7,553 | ) | (13,290 | ) | 28,134 | (D) | 691 | ||||||||||||||||||||
Net income (loss)
|
$ | 29,402 | $ | 19,285 | $ | 386 | $ | 49,073 | $ | 1,069,705 | $ | (1,783 | ) | $ | 1,067,922 | $ | (1,059,979 | ) | $ | 57,016 | |||||||||||||||||
P-13
Table of Contents
Unaudited
Overall Pro Forma Basis Condensed Consolidated Balance Sheet
as of June 30, 2011
as of June 30, 2011
Citadel |
||||||||||||||||||||||||||||
CMP |
and Global |
|||||||||||||||||||||||||||
Cumulus |
Pro Forma |
CMP |
Refinancing |
Overall |
||||||||||||||||||||||||
Media |
CMP |
Basis |
Pro Forma |
Citadel |
Pro Forma Basis |
Pro Forma |
||||||||||||||||||||||
Historical | Historical | Adjustments | Basis | Historical(M) | Adjustments | Basis | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 29,553 | $ | 16,133 | $ | (1,481 | )(A,C) | $ | 44,205 | $ | 104,803 | $ | (30,123 | )(I) | $ | 118,885 | ||||||||||||
Restricted cash
|
600 | 600 | | 1,200 | 2,400 | | 3,600 | |||||||||||||||||||||
Accounts receivable, less allowance for doubtful accounts
|
40,603 | 36,052 | (1,434 | )(A) | 75,221 | 140,554 | (2,931 | )(N) | 212,844 | |||||||||||||||||||
Trade receivable
|
4,149 | 1,245 | (13 | ) | 5,381 | 1,847 | | 7,228 | ||||||||||||||||||||
Deferred tax asset
|
| | | | 12,049 | | 12,049 | |||||||||||||||||||||
Prepaid expenses and other current assets
|
4,243 | 6,390 | (766 | )(A,B) | 9,867 | 17,488 | | 27,355 | ||||||||||||||||||||
Total current assets
|
79,148 | 60,420 | (3,694 | ) | 135,874 | 279,141 | (33,054 | ) | 381,961 | |||||||||||||||||||
Property and equipment, net
|
37,981 | 22,765 | (4,951 | )(A) | 55,795 | 196,008 | | 251,803 | ||||||||||||||||||||
Intangible assets, net
|
170,745 | 242,919 | 3,804 | (A,E) | 417,468 | 1,075,891 | | 1,467,528 | ||||||||||||||||||||
Goodwill
|
60,422 | 79,700 | 447,821 | (E,J) | 587,943 | 763,849 | 274,946 | (F) | 1,626,738 | |||||||||||||||||||
Deferred financing costs
|
17,433 | 3,935 | (130 | )(A,C) | 21,238 | 17,988 | 14,533 | (I) | 53,759 | |||||||||||||||||||
Long-term investments
|
| 4,000 | 2,400 | (E) | 6,400 | | | 6,400 | ||||||||||||||||||||
Other assets
|
1,472 | 324 | (45 | )(A) | 1,751 | 19,477 | | 47,059 | ||||||||||||||||||||
Total assets
|
$ | 367,201 | $ | 414,063 | $ | 445,205 | $ | 1,226,469 | $ | 2,352,354 | $ | 256,425 | $ | 3,835,248 | ||||||||||||||
Liabilities and Stockholders Equity (Deficit)
|
||||||||||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||||||
Accounts payable and accrued expenses
|
$ | 28,687 | $ | 22,853 | (11,737 | )(A,B) | $ | 39,803 | 48,537 | (7,424 | )(N) | $ | 80,916 | |||||||||||||||
Trade payable
|
4,074 | 1,065 | | 5,139 | 1,313 | | 6,452 | |||||||||||||||||||||
Derivative instrument
|
| | | | | | | |||||||||||||||||||||
Current portion of long-term debt
|
| 93,228 | (86,228 | )(A,C) | 7,000 | | (7,000 | )(I) | | |||||||||||||||||||
Total current liabilities
|
32,761 | 117,146 | (97,965 | ) | 51,942 | 49,850 | (14,424 | ) | 87,368 | |||||||||||||||||||
Long-term debt
|
610,000 | 612,234 | | 1,222,234 | 696,500 | 964,311 | (I) | 2,883,045 | ||||||||||||||||||||
Other liabilities
|
17,887 | 7,536 | (1,508 | )(A) | 23,915 | 54,068 | (1,485 | )(I) | 76,498 | |||||||||||||||||||
Deferred income taxes
|
29,029 | 85,839 | 7,234 | (E) | 122,102 | 255,756 | | 377,858 | ||||||||||||||||||||
Total liabilities
|
689,677 | 822,755 | (92,239 | ) | 1,420,193 | 1,056,174 | 948,402 | 3,424,769 | ||||||||||||||||||||
Stockholders equity (deficit):
|
||||||||||||||||||||||||||||
Class A common stock
|
596 | | 116 | (L) | 712 | 5 | 2,051 | (L) | 2,652 | |||||||||||||||||||
Class B common stock
|
58 | | | 58 | 19 | (19 | )(F) | 58 | ||||||||||||||||||||
Class C common stock
|
6 | | | 6 | | | 6 | |||||||||||||||||||||
Class D common stock
|
| | 66 | (L) | 66 | | | 66 | ||||||||||||||||||||
Successor equity held in reserve
|
| | | | 7,887 | (7,887 | )(F) | | ||||||||||||||||||||
Treasury stock, at cost
|
(251,148 | ) | | | (251,148 | ) | (6,575 | ) | 6,575 | (251,148 | ) | |||||||||||||||||
Additional paid-in-capital
|
959,885 | 310,850 | (232,723 | )(A,E) | 1,038,012 | 1,294,526 | (606,757 | )(0) | 1,725,781 | |||||||||||||||||||
(Accumulated deficit) Retained earnings
|
(1,031,873 | ) | (787,019 | ) | 798,655 | (C,E) | (1,020,237 | ) | 318 | (47,133 | )(0) | (1,067,052 | ) | |||||||||||||||
Noncontrolling interest
|
| 67,477 | (28,670 | )(J) | 38,807 | | (38,807 | )(J) | | (J) | ||||||||||||||||||
Total stockholders (deficit) equity
|
(322,476 | ) | (408,692 | ) | 537,444 | (193,724 | ) | 1,296,180 | (691,977 | ) | 410,479 | |||||||||||||||||
Total liabilities and stockholders equity (deficit)
|
$ | 367,201 | $ | 414,063 | $ | 445,205 | $ | 1,226,469 | $ | 2,352,354 | $ | 256,425 | $ | 3,835,248 | ||||||||||||||
P-14
Table of Contents
Footnotes
to Pro Forma Adjustments
A. | Adjustments to reflect the KC Restructuring. On February 4, 2011, CMP, CMP Susquehanna Holdings Corp., a wholly-owned subsidiary of CMP and the parent company of Radio Holdings (Radio Holdco) and CMP KC, LLC, a wholly owned subsidiary of CMP (KC LLC), entered into a restructuring support agreement (the KC Restructuring Agreement) with the lenders under KC LLCs credit facility (the CMP KC Credit Facility) regarding a restructuring of KC LLCs debt (the KC Restructuring). The KC Restructuring is expected to be implemented through a pre-packaged plan of reorganization filed with the United States Bankruptcy Court for the District of Delaware (the Pre-packaged Bankruptcy Proceeding). Cumulus Media expects that the Pre-packaged Bankruptcy Proceeding will occur, and the KC Restructuring is contemplated to be completed, during the second half of 2011. If the KC Restructuring is completed in accordance with the terms and conditions of the KC Restructuring Agreement, among other things: (1) Radio Holdco will distribute all of the outstanding common stock of Radio Holdings to CMP; (2) KC LLCs outstanding debt and owners interest of $96.4 million at June 30, 2011 will be reduced to $20 million; (3) all of the equity of Radio Holdco will be transferred to the lenders under the CMP KC Credit Facility or their nominee; and (4) Cumulus Media will continue to manage the radio stations of KC LLC through the end of 2011, at which time the management agreement with respect thereto will be subject to annual renewal thereafter. |
Because Cumulus Media does not expect that CMP will have a
continuing ownership interest in KC LLC upon consummation of the
KC Restructuring, pro forma adjustments have been made to
exclude KC LLCs financial condition and results of
operations as of and for the six months ended June 30, 2011
and for the year ended December 31, 2010 from CMPs
corresponding historical results of operations and financial
condition in the accompanying unaudited pro forma condensed
consolidated financial information, and these related footnotes.
B. | Adjustments to reflect the termination of the CMP Management Agreement and write off of deferred financing fees and debt discount, net of tax. Prior to the completion of the CMP Acquisition, Cumulus Media managed the CMP 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 Media the greater of $4.0 million or 4% of Radio Holdcos adjusted EBITDA on an annual basis. Such amount has been eliminated in the consolidated pro forma statements of operations. At June 30, 2011, Cumulus Media had deferred revenue of $1.0 million and CMP had prepaid expenses of $1.0 million related to this agreement. Upon the closing of the CMP Acquisition, the CMP Management Agreement was terminated. |
(Dollars in thousands)
|
||||
CMP and Overall Pro Forma Basis Balance Sheet as of
June 30, 2011 Adjustments:
|
||||
Elimination of prepaid management fee and deferred revenue:
|
||||
Pro forma adjustment to line item, Prepaid expenses and
other current assets
|
$ | 1,000 | ||
Pro forma adjustment to line item, Accounts payable and
accrued expenses
|
$ | 1,000 | ||
CMP and Overall Pro Forma Basis Statement of Operations for
the Six Months Ended June 30, 2011 Adjustments:
|
||||
Elimination of management fee income and expense:
|
||||
Pro forma adjustment to line item, Management fees
|
$ | 2,000 | ||
Pro forma adjustment to line item, Corporate general and
administrative expenses
|
$ | 2,000 | ||
CMP and Overall Pro Forma Basis Statement of Operations for
the Year Ended December 31, 2010 Adjustments:
|
||||
Elimination of 2011 management fee income and expense:
|
||||
Pro forma adjustment to line item, Management fees
|
$ | 4,000 | ||
Pro forma adjustment to line item, Corporate general and
administrative expenses
|
$ | 4,000 |
C. | Adjustments to reflect issuance of the 2019 Notes. Pro forma adjustments reflect amortization of the deferred financing costs associated with the issuance of the 2019 Notes for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively. Deferred financing fees are amortized through interest expense using the effective interest method. As a result, interest expense on a CMP Pro Forma Basis was $33.6 million and $70.8 million for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively. |
P-15
Table of Contents
For the |
||||||||||||
Six Months |
For the |
|||||||||||
Ended |
Year Ended |
|||||||||||
June 30, |
December 31, |
|||||||||||
Pro Forma Basis Statements of Operations Adjustments
|
Interest Rate | 2011 | 2010 | |||||||||
(Dollars in thousands) | ||||||||||||
Pro Forma Basis Interest Expense:
|
||||||||||||
2019 Notes
|
7.75% | $ | 23,638 | $ | 47,275 | |||||||
CMP (excluding KC LLC) debt interest expense
|
n/a | 9,036 | 22,137 | |||||||||
Amortization of deferred financing fees and related amortization
|
n/a | 913 | 1,423 | |||||||||
$ | 33,587 | a | $ | 70,835 | a | |||||||
(a) | Represents pro forma interest expense for the respective periods presented, which is equal to the historical interest expense of Cumulus Media and CMP plus the adjustments for pro forma additional interest expense as set out below: |
For the |
||||||||
Six Months |
For the |
|||||||
Ended |
Year Ended |
|||||||
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(Dollars in thousands) | ||||||||
Historical Cumulus Media interest expense
|
$ | 15,496 | $ | 30,307 | ||||
Historical CMP interest expense (excluding KC LLC)
|
9,036 | 22,137 | ||||||
Combined historical Cumulus Media and CMP (excluding KC
LLC) interest expense
|
$ | 24,532 | $ | 52,444 | ||||
Interest expense on a CMP Pro Forma Basis
|
33,587 | 70,835 | ||||||
Interest expense adjustment on a CMP Pro Forma Basis
|
$ | 9,055 | $ | 18,391 | ||||
D. | Adjustments to reflect income tax impacts of pro forma adjustments. Adjustments to reflect the income tax impacts resulting from the pro forma adjustments to the condensed consolidated statements of operations and balance sheets based on an estimated combined federal and state statutory income tax rate of 38.0% are set forth below: |
For the |
||||||||
Six Months |
For the |
|||||||
Ended |
Year Ended |
|||||||
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(Dollars in thousands) | ||||||||
CMP Pro Forma Basis Income Tax (Expense) Benefit:
|
||||||||
Pro forma interest expense adjustments (see note C)
|
$ | 9,055 | $ | 18,391 | ||||
Assumed combined federal and state statutory income tax rate
|
38% | 38% | ||||||
Pro forma adjustment to line item, Income tax (expense)
benefit
|
$ | 3,441 | $ | 6,989 | ||||
Citadel Pro Forma Basis Income Tax (Expense) Benefit:
|
||||||||
Pro forma interest expense adjustments
|
$ | 36,986 | $ | 59,090 | ||||
Pro forma corporate general and administrative expense
adjustment (see note G)
|
| 6,500 | ||||||
Pro forma depreciation and amortization adjustments (Citadel Pro
Forma Basis) (see note K)
|
| 20,204 | ||||||
Pro forma net debt extinguishment adjustment (see note K)
|
| (20,969 | ) | |||||
$ | 36,986 | $ | 64,825 | |||||
Assumed combined federal and state statutory income tax rate
|
38% | 38% | ||||||
Pro forma adjustment to line item, Income tax (expense)
benefit
|
$ | 14,055 | $ | 24,633 | ||||
Overall Pro Forma Basis Income Tax (Expense) Benefit:
|
||||||||
Pro forma interest expense adjustments
|
$ | 42,883 | $ | 68,301 | ||||
Pro forma corporate general and administrative adjustment (see
note G)
|
| 6,500 | ||||||
Pro forma depreciation and amortization adjustments (Overall Pro
Forma Basis) (see note K)
|
| 20,204 | ||||||
Pro forma net debt extinguishment adjustment (see note K)
|
| (20,969 | ) | |||||
$ | 42,883 | $ | 74,036 | |||||
Assumed combined federal and state statutory income tax rate
|
38% | 38% | ||||||
Pro forma adjustment to line item, Income tax (expense)
benefit
|
$ | 16,295 | $ | 28,134 | ||||
P-16
Table of Contents
As of |
||||
June 30, |
||||
2011 | ||||
Citadel Pro Forma Basis:
|
||||
Historical Citadel deferred financing costs
|
$ | 17,988 | ||
Severance to be paid to Citadel employees and executives in
connection with the Citadel Acquisition
|
24,200 | |||
Make-whole provision related to redemption of Citadel senior
notes due 2018 (the Citadel Senior Notes)
|
31,000 | |||
Total to be tax effected
|
73,188 | |||
Assumed combined federal and state statutory income tax rate
|
38% | |||
Tax effect impacting Citadel Pro Forma Basis adjustment to line
item, Accumulated
deficit(a)
|
$ | 27,811 | ||
As of |
||||
June 30, |
||||
2011 | ||||
Overall Pro Forma Basis:
|
||||
Historical CMP deferred financing costs
|
$ | 3,805 | ||
Historical Citadel deferred financing costs
|
17,988 | |||
Historical liability related to future interest payments
recorded resultant from CMPs 2009 debt exchange (the
2009 CMP Exchange Offer) and debt issuance costs
|
(1,485 | ) | ||
Severance to be paid to Citadel employees and executives in
connection with the Citadel Acquisition
|
24,200 | |||
Make-whole provision related to redemption of Citadel Senior
Notes
|
31,000 | |||
Total to be tax effected
|
75,508 | |||
Assumed combined federal and state statutory income tax rate
|
38% | |||
Tax effect impacting Overall Pro Forma Basis adjustment to line
item, Accumulated
deficit(a)
|
$ | 28,693 | ||
(a) | Refer to Note O for reconciliation of Accumulated deficit. |
E. | Adjustments to reflect the CMP Acquisition. The CMP Acquisition resulted in the issuance by Cumulus Media of 9,945,714 shares of its common stock and the elimination of CMP and KC LLCs historical members equity. The amount reflected in retained earnings (accumulated deficit) in the accompanying unaudited pro forma condensed consolidated balance sheet includes the gain recognized on Cumulus Medias existing equity interest in CMP. The gain of $11.6 million is the difference between the estimated fair value of Cumulus Medias investment in CMP immediately prior to the completion of the CMP Acquisition and the book value of such investment, which had been reduced to zero in Cumulus Medias historical consolidated financial statements as a result of CMPs accumulated historical losses. |
The following table sets forth a preliminary purchase price
allocation for the CMP Acquisition as of June 30, 2011
(dollars in thousands):
Equity consideration paid in CMP Acquisition
|
$ | 78,309 | a | |
Fair value of non-controlling interestspreferred stock
|
24,077 | b | ||
Assumption of debt
|
619,234 | c | ||
Total purchase price
|
$ | 721,620 | ||
Fair value of Cumulus Medias equity interest in CMP
immediately prior to the completion of the CMP Acquisition
|
11,636 | e | ||
Total fair value for allocation
|
$ | 733,256 | ||
Current assets
|
56,726 | d | ||
Intangible assets
|
246,723 | f | ||
Plant, property and equipment, net
|
17,814 | d | ||
Other assets
|
10,484 | d | ||
Current liabilities
|
(12,181 | )d | ||
Other long-term liabilities
|
(6,028 | )d | ||
Deferred income tax liabilities
|
(93,073 | )g | ||
Allocation to goodwill
|
512,791 | h | ||
Total purchase price allocation
|
$ | 733,256 | ||
(a) | Represents the estimated fair value (based on a price per share of Cumulus Media Class A common stock of $3.51, the closing price of such common stock on the Nasdaq Global Select Market on |
P-17
Table of Contents
August 1, 2011, the closing date of the CMP Acquisition) of 9,945,714 shares of Cumulus Media common stock issued to the CMP Sellers. In addition, includes $43.4 million of Cumulus Media Class A common stock issuable upon exercise of warrants to purchase shares of common stock of a subsidiary of CMP, which were amended in connection with the CMP Acquisition to become exercisable for shares of Cumulus Media Class D common stock. | ||
(b) | Represents the estimated fair value of the non-controlling interest in preferred stock, and warrants to purchase common stock, of Radio Holdings currently held by third parties after the completion of the CMP Acquisition. | |
(c) | Consists of $7.0 million of short-term debt under that certain term loan and revolving credit agreement (the CMPSC Credit Agreement) of CMP Susquehanna Corporation, a wholly owned subsidiary of CMP (CMPSC), $586.1 million of long-term debt pursuant to the CMPSC Credit Agreement and an aggregate amount of $26.1 million related to CMPSCs 9.875% senior subordinated notes due 2014 (the CMP 9.875% Notes) and Variable Rate Senior Secured Notes due 2014 (the CMP 2014 Notes) . | |
(d) | Represents the book value of CMP, adjusted as follows: |
CMP historical current assets
|
$ | 60,420 | ||
Exclusion of KC LLC (see note A)
|
(2,694 | ) | ||
Elimination of amounts related to CMP Management Agreement (see
note B)
|
(1,000 | ) | ||
Current assets for CMP Acquisition purchase price allocation
|
$ | 56,726 | ||
CMP historical plant property and equipment
|
$ | 22,765 | ||
Exclusion of KC LLC (see note A)
|
(4,951 | ) | ||
Plant, property and equipment for CMP Acquisition purchase price
allocation
|
$ | 17,814 | ||
Deferred financing costs and other assets
|
$ | 4,259 | ||
Long-term investments
|
4,000 | |||
Exclusion of KC LLC (see note A)
|
(175 | ) | ||
Fair value adjustment to CMPs investment in
San Francisco Giants
|
2,400 | |||
Other assets for CMP Acquisition purchase price allocation
|
$ | 10,484 | ||
CMP historical current liabilities, excluding short-term debt
|
$ | 23,918 | ||
Exclusion of KC LLC (see note A)
|
(10,737 | ) | ||
Elimination of amounts related to CMP Management Agreement (see
note B)
|
(1,000 | ) | ||
Current liabilities for CMP Acquisition purchase price allocation
|
$ | 12,181 | ||
CMP historical other long-term liabilities
|
$ | 7,536 | ||
Exclusion of KC LLC (see note A)
|
(23 | ) | ||
Elimination of accrued bond interest
|
(1,485 | ) | ||
Other long-term liabilities for CMP Acquisition purchase price
allocation
|
$ | 6,028 | ||
(e) | Represents the estimated fair value of Cumulus Medias previously existing equity interest in CMP, which was not acquired in the CMP Acquisition. | |
(f) | Includes an adjustment of $19.0 million to fair value of CMPs FCC license intangible assets. The adjustment is based upon fair value information as of June 30, 2011. | |
(g) | The historical deferred income tax assets of CMP were adjusted by the FCC license intangible assets fair value adjustment of $19.0 million multiplied by an estimated combined federal and state statutory income tax rate of 38%: |
Pro forma adjustment to fair value the FCC license intangible
assets
|
$ | 19,037 | ||
Assumed combined federal and state statutory income tax rate
|
38% | |||
Pro forma adjustment to line item, Deferred income
taxes
|
$ | 7,234 | ||
(h) | Represents allocation to goodwill resulting from the CMP Acquisition. Below is a reconciliation of CMP historical goodwill as of June 30, 2011 and the CMP Pro Forma Basis goodwill adjustment resulting from the CMP Acquisition: |
P-18
Table of Contents
CMP Preliminary purchase price allocation to goodwill as of
June 30, 2011
|
$ | 512,791 | ||
Less: Existing CMP goodwill balance at June 30, 2011
|
79,700 | |||
CMP Pro Forma Basis goodwill adjustment
|
$ | 433,091 | ||
F. | Adjustments to reflect the Citadel Acquisition. For purposes of this unaudited pro forma condensed consolidated financial information, Cumulus Media has assumed that the merger consideration will consist of a payment of $1,254.9 million in cash (which represents the arithmetic mean, or midpoint, of the amount of cash which would be payable to holders of Citadel common stock and warrants in each of the Maximum Stock Scenario and the Maximum Cash Scenario), and the issuance of 114,574,365 shares of Cumulus Class A common stock (which represents the arithmetic mean, or midpoint, of the number of shares of Cumulus Media Class A common stock that would be issued to holders of Citadel common stock and warrants in each of the Maximum Stock Scenario and the Maximum Cash Scenario, and has further assumed that all of the equity consideration payable in the Citadel Acquisition would be in the form of Cumulus Media Class A common stock), which shares have an assumed aggregate value of $316.2 million (based on an assumed price per share of Cumulus Media common stock of $2.76, the closing price of such common stock on the Nasdaq Global Select Market on August 22, 2011, the most recent practicable date). Because applicable accounting guidance prohibits the inclusion of the impact of any cash flow from operations generated by CMP or expected to be generated by Citadel prior to the closing date of each respective transaction in this unaudited condensed consolidated pro forma financial information, and also prohibits the inclusion of any expected cost synergies related thereto, in the event of the Maximum Cash Scenario, an additional $70.0 million of borrowings under the revolving credit facility under the Acquisition Credit Facility and a corresponding increase of $1.9 million and $3.9 million in interest expense for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively, would be required to fund such payments, and would also be included in the presentation on an Overall Pro Forma Basis. |
The final adjustment to reflect the issuance of Cumulus Media
common stock in the Citadel Acquisition will depend upon the
actual number of shares of Cumulus Media common stock issued and
the market price thereof on the closing date, and could be
materially different from that presented herein. The Citadel
Acquisition will also result in the elimination of
Citadels historical equity, including $7.9 million of
successor equity held in reserve. Cumulus Media has also
eliminated $2.9 million of intercompany receivables and
payables. However, due to the related intercompany revenue and
expense being recorded in the same line item category, no
elimination is required for the statement of operations.
The cash portion of the purchase price in the Citadel
Acquisition is expected to be funded pursuant to the Global
Refinancing. The Overall Pro Forma Basis adjustments include an
assumed $25.3 million in payments received pursuant to the
acceleration and cashless exercise provisions relating to
options to purchase Citadel common stock (and unvested
restricted common stock) pursuant to the agreement
P-19
Table of Contents
governing the terms and conditions of the Citadel Acquisition
(the merger agreement). Additional information is
set forth below:
(Dollars in thousands)
|
||||
Cash consideration to Citadel stockholders and warrant holders
|
$ | 1,254,901 | a | |
Equity consideration to Citadel stockholders and warrant holders
|
316,225 | a | ||
Assumption of debt
|
696,500 | |||
Total purchase price
|
$ | 2,267,626 | ||
Current assets
|
$ | 279,141 | ||
Intangible assets
|
1,050,060 | |||
Plant, property and equipment, net
|
196,008 | |||
Other assets
|
63,296 | |||
Current liabilities
|
(49,850 | ) | ||
Other long-term liabilities
|
(54,068 | ) | ||
Deferred tax liabilities
|
(255,756 | ) | ||
Allocation to goodwill
|
1,038,795 | b | ||
Total purchase price allocation
|
$ | 2,267,626 | ||
(a) | In accordance with the terms of the merger agreement, the amount of cash and Cumulus Media common stock to be issued in the Citadel Acquisition may vary depending upon certain elections made (or deemed to be made) by Citadel stockholders and warrant holders, subject to certain maximum amounts. | |
(b) | Represents additional goodwill generated by the Citadel Acquisition at June 30, 2011 as follows: |
Citadel preliminary purchase price allocation to goodwill
|
$ | 1,038,795 | ||
Less: Existing Citadel goodwill balance
|
763,849 | |||
Citadel Pro Forma Basis goodwill adjustment
|
$ | 274,946 | ||
G. | Adjustment to recognize additional severance and retention bonuses to be paid to Citadel employees and executives in connection with the Citadel Acquisition. Severance amounts of $17.7 million and retention bonuses of $13.0 million were negotiated as a part of the merger agreement, or will otherwise be due under preexisting agreements, and will be accounted for in accordance with ASC 805, Business Combinations. Retention bonuses of $6.5 million for pre-acquisition services will be payable as of the date of the closing of the Citadel Acquisition and are reflected in the Overall Pro Forma Basis Condensed Consolidated Balance Sheet. The remaining $6.5 million of retention bonuses for post-acquisition services will be payable subsequent to the closing of the Citadel Acquisition and are reflected in the Overall Pro Forma Basis Condensed Consolidated Statements of Operations. |
H. | Adjustments to reflect Equity Investment. Pursuant to the terms of the Investment Agreement, Cumulus Media has agreed to sell up to $500.0 million, in the aggregate, of its equity securities to the Investors, net of fees of $21.4 million. To the extent that the consideration payable in the Citadel Acquisition requires the payment of cash in an amount less than the Maximum Cash Scenario, the Investors commitments will be reduced, subject to a minimum investment of $395.0 million. In addition, under certain circumstances in which Cumulus Media does not require MIHI LLCs full investment to consummate the Citadel Acquisition, MIHI LLC may elect to reduce its investment by an equivalent amount. Based on the assumed cash consideration payable to Citadel stockholders of $1,254.9 million, the value of the equity securities to be sold pursuant to the Investment Agreement is $373.6 million, net of fees of $21.4 million. |
This Investment Agreement provides that MIHI LLC may, at its
option, elect to receive up to its full $125.0 million
commitment amount in shares of a newly created class of
perpetual redeemable, non-convertible preferred stock. This
preferred stock would pay dividends at a rate of 10% per annum
for the first six months from issuance, 14% per annum through
the second anniversary of issuance, 17% per annum plus the
positive change in LIBOR from the closing of the Equity
Investment to each even-numbered anniversary thereof (the
LIBOR Increase Amount) through the fourth
anniversary of issuance, and 20% per annum plus the LIBOR
Increase Amount thereafter. Dividends would be payable in cash
but,
P-20
Table of Contents
at the option of Cumulus Media, up to 50% of the dividends
could be
paid-in-kind.
Assuming MIHI LLC elected to receive $125.0 million of its
investment in preferred stock and Cumulus Media paid cash
dividends thereon, the Overall Pro Forma Basis financial
information would have reflected dividend interest expense of
$15.2 million, of which $7.6 million would be payable
in cash. This redeemable preferred stock would be classified as
a liability and any related dividend would be recorded in the
statement of operations.
I. | Adjustments to reflect the debt to be incurred pursuant to the Global Refinancing. In connection with the repayment of the outstanding indebtedness of each of Cumulus Media, CMP (excluding KC LLC) and Citadel contemplated by the Global Refinancing, the debt of Cumulus Media, CMP and Citadel will be eliminated. Additionally, $1.5 million of non-cash accrued interest on exchanged notes related to the CMPSC Credit Agreement has been eliminated in the accompanying unaudited pro forma condensed consolidated financial information. As a result, interest expense on an Overall Pro Forma Basis is $101.0 million and $203.3 million for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively. Cumulus Media expects to record deferred financing fees of $53.8 million and debt discount of $25.1 million and related amortization of $4.6 million and $10.5 million for the six months ended June 30, 2011 and for the year ended December 31, 2010, respectively, in connection with the Global Refinancing. |
Overall Pro Forma Balance Sheet Adjustments | Amounts | |||
(Dollars in thousands) | ||||
Change in current portion of Long-Term Debt:
|
||||
Current portion of long-term debt:
|
||||
Elimination of CMP current portion of debt related to term loan
under CMPSC Credit Agreement
|
$ | (93,228 | ) | |
Exclusion of KC LLC historical financial condition
|
86,228 | |||
P-21
Table of Contents
Overall Pro Forma Balance Sheet Adjustments | Amounts | |||
(Dollars in thousands) | ||||
Overall Pro Forma Basis adjustment
|
$ | (7,000 | ) | |
Change in Long-Term Debt:
|
||||
Acquisition Credit Facility:
|
||||
First lien term loan
|
1,325,000 | |||
Second lien term loan
|
790,000 | |||
Revolving credit facility
|
183,145 | |||
Debt discount on Acquisition Credit Facility
|
(25,100 | ) | ||
Total Acquisition Credit Facility, net of debt discount
|
2,273,045 | |||
Repayment of outstanding amounts under CMPSC Credit Agreement
|
(586,073 | ) | ||
Repayment of CMP 9.875% Notes and CMP 2014 Notes
|
(26,161 | ) | ||
Repayment of outstanding amounts under Citadels term loan
and revolving credit facilities (the Citadel Credit
Facilities)
|
(296,500 | ) | ||
Repayment of Citadel Senior Notes
|
(400,000 | ) | ||
Overall Pro Forma Basis long-term debt adjustment
|
$ | 964,311 | ||
Change in Deferred Financing Costs:
|
||||
Deferred financing costs under CMPSC Credit Agreement
|
$ | (3,935 | ) | |
Deferred financing costs under Citadel Credit Facilities
|
(17,988 | ) | ||
Deferred financing costs associated with Acquisition Credit
Facility
|
36,326 | (a) | ||
Exclusion of KC LLC deferred financing costs
|
130 | |||
Overall Pro Forma Basis adjustment to line item, Deferred
financing costs
|
$ | 14,533 | ||
Change in Cash and Cash Equivalents:
|
||||
Proceeds from borrowings under Acquisition Credit Facility, net
of $25.1 million of debt discount
|
$ | 2,273,045 | ||
Proceeds from Equity Investment, net
|
373,600 | |||
Redemption of Radio Holdings preferred stock
|
(38,807 | ) | ||
Repayment of existing Cumulus Media, CMP and Citadel debt
at June 30, 2011
|
(1,315,734 | ) | ||
Cash payments to Citadel stockholders and warrant holders
|
(1,254,901 | ) | ||
Make whole provision payment pursuant to Citadel Senior Notes
|
(31,000 | ) | ||
Deferred financing costs associated with Acquisition Credit
Facility
|
(36,326 | )(a) | ||
Overall Pro Forma Basis adjustment to line item, Cash and
cash equivalents
|
$ | (30,123 | ) | |
(a) | Represents debt issuance costs incurred related to the Global Refinancing as set forth below (assumes the Acquisition Credit Facility is closed on September 16, 2011): |
2019 Notes (actual) and Acquisition Credit Facility debt
issuance costs
|
$ | 17,433 | ||
Additional Acquisition Credit Facility fees:
|
||||
Commitment fee
|
29,112 | |||
Upfront fee
|
3,000 | |||
Ticking fee
|
4,214 | |||
36,326 | ||||
Total debt issuance costs to be incurred
|
$ | 53,759 | ||
P-22
Table of Contents
For the |
||||||||||||
Six Months |
For the |
|||||||||||
Ended |
Year Ended |
|||||||||||
Pro Forma |
June 30, |
December 31, |
||||||||||
Overall Pro Forma Basis Statement Of Operations Adjustments | Interest Rate | 2011 | 2010 | |||||||||
(Dollars in thousands) | ||||||||||||
Pro forma interest expense:
|
||||||||||||
2019 Notes
|
7.75% | (a) | $ | 23,638 | $ | 47,275 | ||||||
First lien term loan under Acquisition Credit Facility
|
5.75% | (b) | 38,094 | 76,188 | ||||||||
Second lien term loan under Acquisition Credit Facility
|
7.50% | (b) | 29,625 | 59,250 | ||||||||
Revolving credit facility under Acquisition Credit Facility
|
5.50% | (c) | 5,036 | 10,073 | ||||||||
Amortization of deferred financing fees and original issue
discount
|
n/a | 4,573 | 10,471 | |||||||||
Overall Pro Forma Basis adjustment to line item Interest
expense, net
|
$ | 100,966 | (d) | $ | 203,256 | (d) | ||||||
(a) | Actual interest rate on 2019 Notes. | |
(b) | In accordance with the commitment by the agents and lenders under the Acquisition Credit Facility (the Debt Commitment), there is expected to be a 1.25% and 1.5% LIBOR floor on first and second lien term loans thereunder, respectively. Due to the 30 day LIBOR rate being below the respective floors as of the most recent practicable date, Cumulus Media used the respective floors plus a spread of 450 basis points and 600 basis points, the spread provided for such loans in the Debt Commitment, for the first and second lien term loans, respectively, to determine, on an Overall Pro Forma Basis, the interest rate. | |
(c) | In accordance with the Debt Commitment, there is expected to be a 1.0% LIBOR floor on borrowings under the revolving credit facility. Due to the 30 day LIBOR rate being below this floor as of the most recent practicable date, Cumulus Media used this floor plus a spread of 450 basis points, the spread provided for such loans in the Debt Commitment, to determine, on an Overall Pro Forma Basis, the interest rate. | |
(d) | Represents interest expense on an Overall Pro Forma Basis for the periods presented, respectively, which is equal to the historical interest expense for Cumulus Media, CMP and Citadel for the periods presented, plus the additional interest expense pro forma adjustment as set forth below: |
For the |
||||||||
Six Months |
For the |
|||||||
Ended |
Year Ended |
|||||||
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
Interest expense on an Overall Pro Forma Basis
|
$ | 100,966 | $ | 203,256 | ||||
Historical Cumulus Media interest expense
|
15,496 | 30,307 | ||||||
Historical CMP interest expense
|
12,165 | 28,171 | ||||||
Historical Citadel interest expense
|
24,496 | 64,120 | ||||||
Less: Combined historical Cumulus Media, CMP and Citadel
interest expense
|
52,157 | 122,598 | ||||||
Interest expense adjustment on an Overall Pro Forma Basis
|
$ | 48,809 | e | $ | 80,658 | f | ||
(e) | Consists of $5.9 million and $42.9 million of pro forma interest expense adjustments on a CMP Pro Forma Basis and an Overall Pro Forma Basis, respectively, for the six months ended June 30, 2011. | |
(f) | Consists of $12.4 million and $68.3 million of pro forma interest expense adjustments on a CMP Pro Forma Basis and an Overall Pro Forma Basis, respectively, for the year ended December 31, 2010. |
Adjustments to recognize the debt to be incurred pursuant to
the Global Refinancing, assuming the CMP Acquisition had not
been completed. Pursuant to the Global Refinancing, all
then-outstanding indebtedness of each of Cumulus Media and
Citadel will be refinanced. The current portion of debt related
to existing debt has been eliminated in connection therewith. As
a result, interest expense on a Citadel Pro Forma Basis
increased to $77.0 million and $153.5 million for the
six months ended June 30, 2011 and the year ended
December 31, 2010, respectively, inclusive of amortization
of deferred financing costs. Cumulus recorded deferred financing
costs of $53.8 million and debt discount of
$15.5 million and related amortization of $4.6 million
and $8.8 million for the six months ended June 30,
2011 and the year ended December 31, 2010, respectively,
P-23
Table of Contents
associated with the debt incurred pursuant to the Global
Refinancing. Deferred financing fees are amortized through
interest expense using the effective interest method.
Citadel Pro Forma Basis balance sheet adjustments (dollars in
thousands)
|
Amounts | |||
Change in long-term debt:
|
||||
Acquisition Credit Facility:
|
||||
First lien term loan
|
$ | 1,325,000 | ||
Second lien term loan
|
148,992 | |||
Debt discount on Acquisition Credit Facility
|
(15,485 | ) | ||
Revolving credit facility
|
183,145 | |||
Total debt incurred pursuant to Global Refinancing, net of $15.5
million of debt discount
|
$ | 1,641,652 | ||
Repayment of Citadel Credit Facilities
|
(296,500 | ) | ||
Repayment of Citadel Senior Notes
|
(400,000 | ) | ||
Citadel Pro Forma Basis adjustment to line item, Long-term
debt
|
$ | 945,152 | ||
Change in deferred financing costs:
|
||||
Deferred financing costs and related amortization of Citadel
Credit Facilities and of any unamortized original issue discount
or fees or expenses
|
(17,988 | ) | ||
Deferred financing costs associated with the Acquisition Credit
Facility
|
36,326 | (a) | ||
Citadel Pro forma adjustment to line item, Deferred
financing costs
|
$ | 18,338 | ||
Change in cash and cash equivalents:
|
||||
Debt incurred pursuant to Global Refinancing, net of $15.5
million of debt discount
|
$ | 1,641,652 | ||
Proceeds from Investment Agreement, net
|
373,600 | |||
Repayment of Citadel long-term debt
|
(696,500 | ) | ||
Cash payments to Citadel stockholders
|
(1,254,901 | ) | ||
Make whole premium in connection with the repayment of Citadel
Senior Notes
|
(31,000 | ) | ||
Deferred financing fees associated with Acquisition Credit
Facility
|
(36,326 | )(a) | ||
Citadel Pro Forma Basis adjustment to line item, Cash and
cash equivalents
|
$ | (3,475 | ) | |
(a) | Represents debt issuance costs to be incurred related to the Global Refinancing, assuming the CMP Acquisition had not been completed, and the Acquisition Credit Facility is closed on September 16, 2011 as set forth below: |
2019 Notes (actual) and Acquisition Credit Facility debt
issuance costs
|
$ | 17,433 | ||
Additional Acquisition Credit Facility fees:
|
||||
Commitment fee
|
29,112 | |||
Upfront fee
|
3,000 | |||
Ticking fee
|
4,214 | |||
36,326 | ||||
Total debt issuance costs to be incurred
|
$ | 53,759 | ||
Citadel |
For the |
For The |
||||||||||
Pro Forma |
Six Months Ended |
Year Ended |
||||||||||
Basis |
June 30, |
December 31, |
||||||||||
Citadel Pro Forma Basis statement of operations adjustment
|
Interest Rate | 2011 | 2010 | |||||||||
(dollars in thousands) | ||||||||||||
Pro forma interest
expensee:
|
||||||||||||
2019 Notes
|
7.75 | %a | $ | 23,638 | $ | 47,275 | ||||||
First lien term loan under Acquisition Credit Facility
|
5.75 | %b | 38,094 | 76,187 | ||||||||
Second lien term loan under Acquisition Credit Facility
|
7.50 | %b | 5,587 | 11,174 | ||||||||
Revolving line of credit under Acquisition Credit Facility
|
5.50 | %c | 5,036 | 10,073 | ||||||||
Amortization of deferred financing fees and debt discount
|
n/a | 4,623 | 8,807 | |||||||||
Citadel Pro Forma Basis adjustment to line item, Interest
expense
|
$ | 76,978 | d | $ | 153,517 | d | ||||||
(a) | Actual interest rate on 2019 Notes. | |
(b) | In accordance with the Debt Commitment there is expected to be a 1.25% and 1.5% LIBOR floor on first and second lien term loans, respectively, under the Acquisition Credit Facility. Due to the 30 day LIBOR rate being below the respective floors as of the most recent practicable date, for purposes of this unaudited condensed consolidated financial information, Cumulus Media used the respective floors plus a spread of 450 basis points and 600 basis points, the spread provided for such loans in the Debt Commitment, for the first and second lien term loans, respectively, to determine, on a Citadel Pro Forma Basis, the interest rate. |
P-24
Table of Contents
(c) | Assumed interest rate has been determined in accordance with the terms contained in the Debt Commitment and calculated based on a LIBOR floor of 1.0% plus a spread of 450 basis points since the LIBOR rate on the most recent practicable date was below the 1.0% floor. | |
(d) | Represents interest expense on a Citadel Pro Forma Basis for the six months ended June 30, 2011 and the year ended December 31, 2010, which is equal to the historical interest expense for both Cumulus Media and Citadel, plus additional interest expense pro forma adjustment as set forth below: |
For the |
For The |
|||||||
Six Months Ended |
Year Ended |
|||||||
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
Interest expense on a Citadel Pro Forma Basis
|
$ | 76,978 | $ | 153,517 | ||||
Historical Cumulus Media interest expense
|
15,496 | 30,307 | ||||||
Historical Citadel interest expense
|
24,496 | 64,120 | ||||||
Less: Combined historical Cumulus Media and Citadel interest
expense
|
39,992 | 94,427 | ||||||
Interest expense adjustment on a Citadel Pro Forma Basis
|
$ | 36,986 | $ | 59,090 | ||||
For every $100.0 million change in amounts outstanding
under the revolving credit facility under the Acquisition Credit
Facility, interest expense would change by $2.8 million and
$5.5 million for the six months ended June 30, 2011
and the year ended December 31, 2010, respectively.
(e) | Pro forma interest expense does not include $31.0 million of make whole premium related to the Citadel Senior Notes. |
Interest
rate sensitivity analyses
The accompanying unaudited pro forma condensed consolidated
financial information includes certain adjustments for pro forma
interest expense, which are reflected in the accompanying
unaudited pro forma condensed consolidated statements of
operations. These pro forma adjustments are based upon certain
assumptions contained in these notes to unaudited pro forma
condensed consolidated financial information. Assuming a pro
forma 1/8% positive or negative change in the interest rate on
borrowings under the Acquisition Credit Facility, it is
estimated that the interest expense on borrowings under the
Acquisition Credit Facility would have changed by
$1.4 million and $1.7 million on a Citadel and Overall
Pro Forma Basis, respectively, for the six months ended
June 30, 2011, and $2.8 million and $3.4 million
on a Citadel and an Overall Pro Forma Basis, respectively, for
the year ended December 31, 2010, in each case assuming the
Maximum Cash Scenario (refer to note (I)).
J. | Accrual and payment of CMP preferred stock and related dividends. Pursuant to the terms of the agreement governing the CMP Acquisition, in connection with the closing of the Citadel Acquisition, Cumulus Media has agreed to redeem the outstanding CMP preferred stock at par value plus accrued dividends. On a CMP Pro Forma Basis, Cumulus Media does not contemplate the acquisition of Citadel and as such, does not include the redemption of the CMP preferred stock, nor the accrual of dividends on said stock. On an Overall Pro Forma Basis, Cumulus Media includes the assumption that the Citadel Acquisition will have been completed and as such, recorded an adjustment which increased the CMP preferred stock by $14.7 million to reflect its redemption value of $38.8 million in noncontrolling interest. Additionally, Cumulus Media assumes the redemption of the $38.8 million of CMP preferred stock, resulting in $0.0 million of noncontrolling interest on an Overall Pro Forma Basis. |
K. | Adjustments to increase pro forma depreciation and amortization expense to reflect the impact of the increase in estimated fair value of tangible assets and amortizable intangible assets due to Citadels application of fresh-start accounting. Net fresh start accounting valuation adjustments in connection with Citadels application of fresh-start accounting increased the book value of Citadels assets, excluding goodwill, by $543.8 million. In addition to revaluing existing assets, Citadel recorded certain previously unrecognized assets, including customer and affiliate relationships and income contracts. |
P-25
Table of Contents
The following table summarizes the adjustments described above:
Twelve Months |
||||||||||||
Ended |
||||||||||||
Fair |
Estimated |
December 31, |
||||||||||
(Dollars in millions)
|
Value | Useful Life | 2010 | |||||||||
Historical amortization and depreciation
|
$ | 69.9 | ||||||||||
Intangible assets:
|
||||||||||||
Customer and affiliate relationships
|
$ | 238.9 | 4 to 6 years | $ | 66.0 | |||||||
Other intangibles
|
36.7 | 4 to 6 years | 10.0 | |||||||||
275.6 | 76.0 | |||||||||||
Property and Equipment:
|
||||||||||||
Land and improvements
|
89.3 | 3 to 25 years | 0.4 | |||||||||
Buildings and improvements
|
34.1 | 3 to 25 years | 3.3 | |||||||||
Towers
|
54.7 | 5 to 10 years | 5.5 | |||||||||
Equipment and vehicles
|
24.8 | 2 to 12 years | 4.9 | |||||||||
202.9 | 14.1 | |||||||||||
Total
|
$ | 478.5 | 90.1 | |||||||||
Overall Pro Forma Basis depreciation and amortization
expense adjustment
|
$ | 20.2 |
Adjustment for reorganization items, as shown below, which were
a direct result of Citadels filing for protection pursuant
to Chapter 11 of Title 11 of the U.S. Bankruptcy Code
(the Bankruptcy Code):
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 | |||
Net debt extinguishment loss
|
20,969 | (a) | ||
Overall Pro Forma Basis adjustment to line item, Other
income (expense), net
|
$ | (993,108 | ) | |
(a) | On the date Citadel emerged from protection under the Bankruptcy Code (the Citadel Emergence Date), debt outstanding under its Predecessor Senior Credit and Term Facility was converted into debt outstanding under a new term loan facility (the Emergence Term Loan Facility). A valuation adjustment of $19.1 million was recorded to reflect the Emergence Term Loan Facility at its estimated fair value upon issuance. This valuation adjustment was being amortized as a reduction of interest expense, net, over the contractual term of the Emergence Term Loan Facility. |
Pursuant to the terms of the Emergence Term Loan Facility, a
prepayment penalty of $38.0 million was incurred. This was
netted against the write off of the unamortized balance of the
valuation adjustment of $17.1 million, which resulted in
Citadel incurring a loss on the extinguishment of debt of
$21.0 million in the year ended December 31, 2010 as
follows:
Citadel financial statement line item
|
||||
(Dollars in thousands)
|
||||
Early termination penalty
|
$ | 38,030 | ||
Write-off of fair value valuation adjustment at
December 31, 2010
|
(17,061 | ) | ||
Net debt extinguishment loss
|
$ | 20,969 | ||
P-26
Table of Contents
L. | Adjustments to reflect the issuance of shares. On each of a CMP Pro Forma Basis, Citadel Pro Forma Basis and an Overall Pro Forma Basis, Cumulus Media assumes the issuance of shares of its Class A and Class D (only pursuant to the CMP Acquisition) common stock, each with a par value of $0.01 per share, in order to effect each respective transaction. Resulting changes to the par value are illustrated below (dollars in thousands): |
Elimination of |
||||||||||||||||
Number of |
Historical |
Pro Forma |
||||||||||||||
Shares
|
Par Value | Par Value | Adjustment | |||||||||||||
CMP Pro Forma Basis:
|
||||||||||||||||
Issuance of Class A common stock
|
11,583,206 | $ | 116 | $ | | $ | 116 | |||||||||
Issuance of Class D common stock
|
6,630,476 | 66 | | 66 | ||||||||||||
Citadel and Overall Pro Forma Basis:
|
||||||||||||||||
Issuance of Class A common stock
|
205,588,190 | $ | 2,056 | $ | (5 | ) | $ | 2,051 |
M. | Adjustments to reconcile Citadel financial statement line items per the Unaudited Pro Forma Condensed Consolidated Financial Information to the amounts reported in Citadels quarterly report on Form 10-Q for the quarter ended June 30, 2011 and its annual report on Form 10-K for the year ended December 31, 2010. Included below is a reconciliation between line items reported in the Unaudited Pro Forma Condensed Consolidated Financial Information and amounts reported in Citadels quarterly report on Form 10-Q for the six months ended June 30, 2011 and its annual report on Form 10-K for the year ended December 31, 2010, as applicable. |
To reconcile items included in the Unaudited Overall Pro Forma
Basis Condensed Consolidated Statement of Operations (dollars in
thousands):
For the |
For The |
|||||||||||
Six Months |
Year Ended |
|||||||||||
Ended |
December 31, |
|||||||||||
June 30, |
2010 | |||||||||||
2011 | Predecessor | Successor | ||||||||||
To reconcile station operating expenses (excluding
depreciation, amortization and
LMA fees) as reported to the unaudited pro forma condensed consolidated financial information included herein: |
||||||||||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||||||||||
Station operating expenses (excluding depreciation, amortization
and LMA fees)
|
$ | 233,032 | $ | 194,685 | $ | 278,231 | ||||||
Citadels financial statements:
|
||||||||||||
Cost of revenue, exclusive of depreciation and amortization and
including non-cash compensation expense of $1,391, $526, and
$954, respectively
|
$ | 137,528 | $ | 116,103 | $ | 164,594 | ||||||
Selling, general and administrative expenses, including non-cash
compensation expense of $4,717, $785, and $3,244, respectively
|
95,504 | 78,582 | 113,637 | |||||||||
$ | 233,032 | $ | 194,685 | $ | 278,231 | |||||||
To reconcile gain on exchange of assets or stations and other
operating expenses
as reported to the unaudited pro forma condensed consolidated financial information included herein: |
||||||||||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||||||||||
Loss on exchange of assets or stations
|
$ | 402 | $ | 859 | $ | 271 | ||||||
Other operating expenses (income)
|
8,676 | (5 | ) | 7,215 | ||||||||
$ | 9,078 | 854 | 7,486 | |||||||||
Citadels financial statements:
|
||||||||||||
Other, net
|
$ | 9,078 | $ | 854 | $ | 7,486 | ||||||
To reconcile interest expense, net as reported to the
unaudited pro forma
condensed consolidated financial information included herein: |
||||||||||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||||||||||
Interest expense, net
|
$ | 25,544 | $ | 17,771 | $ | 46,349 | ||||||
Citadels financial statements:
|
||||||||||||
Interest expense, net
|
$ | 24,496 | $ | 17,771 | $ | 45,365 | ||||||
Write-off of deferred financing costs and debt discount upon
extinguishment of debt and other debt-related fees
|
1,048 | | 984 | |||||||||
$ | 25,540 | $ | 17,771 | $ | 46,349 | |||||||
P-27
Table of Contents
To reconcile items included in the Unaudited Overall Pro Forma
Basis Condensed Consolidated Balance Sheet (dollars in
thousands):
As of |
||||
June 30, |
||||
2011 | ||||
To reconcile restricted cash, deferred tax asset, and prepaid
expenses and other
current assets with the unaudited pro forma condensed consolidated financial information included herein: |
||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||
Restricted cash
|
$ | 2,400 | ||
Deferred tax asset
|
12,049 | |||
Prepaid expenses and other current assets
|
17,488 | |||
$ | 31,937 | |||
Citadels financial statements:
|
||||
Prepaid expenses and other current assets
|
$ | 31,937 | ||
To reconcile accounts receivable with the unaudited pro forma
condensed consolidated financial information included herein:
|
||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||
Accounts receivable, less allowance for doubtful accounts
|
$ | 140,554 | ||
Trade receivable
|
1,847 | |||
$ | 142,401 | |||
Citadels financial statements:
|
||||
Accounts receivable, net
|
$ | 142,401 | ||
To reconcile Intangible assets, net, deferred financing
costs, and other
assets with the unaudited pro forma condensed consolidated financial information included herein: |
||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||
Intangible assets, net
|
$ | 1,075,891 | ||
Deferred financing costs
|
17,988 | |||
Other assets
|
19,477 | |||
$ | 1,113,356 | |||
Citadels financial statements:
|
||||
FCC licenses
|
$ | 887,975 | ||
Customer and affiliate relationships, net
|
162,085 | |||
Other assets, net
|
63,296 | |||
$ | 1,113,356 | |||
To reconcile accounts payable and accrued expenses and trade
accounts payable
with the unaudited pro forma condensed consolidated financial information included herein: |
||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||
Accounts payable and accrued expenses
|
$ | 48,537 | ||
Trade payable
|
1,313 | |||
$ | 49,850 | |||
To reconcile presentation in Citadels financial
statements to that within Cumulus Medias financial
statements:
|
||||
Accounts payable, accrued liabilities and other liabilities
|
$ | 49,850 | ||
To reconcile long-term debt with the unaudited pro forma
condensed consolidated financial information presented
herein:
|
||||
Unaudited Pro Forma Condensed Consolidated Financial Information:
|
||||
Long-term debt
|
$ | 696,500 | ||
Citadels financial statements:
|
||||
Senior debt, less current portion
|
$ | 296,500 | ||
Citadel Senior Notes
|
400,000 | |||
$ | 696,500 | |||
P-28
Table of Contents
N. | To present a reconciliation for the Citadel Pro Forma Basis and Overall Pro Forma Basis adjustments to accounts payable and accrued expenses: |
Amounts
|
||||
(Dollars in thousands)
|
||||
Citadel Pro Forma Basis adjustments to Accounts payable and
accrued expenses
|
||||
Severance to be paid to Citadel employees and executives in
connection with the Citadel Acquisition
|
$ | 24,200 | ||
Elimination of intercompany balances
|
(2,931 | ) | ||
Tax benefit (Note D)
|
(27,811 | ) | ||
Citadel Pro Forma Basis adjustment to line item, Accounts
payable and accrued expenses
|
$ | (6,542 | ) | |
Overall Pro Forma Basis adjustments to Accounts payable and
accrued expenses
|
||||
Severance to be paid to Citadel employees and executives in
connection with the merger
|
$ | 24,200 | ||
Elimination of intercompany balances
|
(2,931 | ) | ||
Tax benefit from severance to be paid and Citadel and CMP
deferred financing fees
|
(28,693 | ) | ||
Overall Pro Forma Basis adjustment to line item, Accounts
payable and accrued expenses
|
$ | (7,424 | ) | |
O. | To present a reconciliation for the CMP, Citadel and Overall Pro Forma Basis adjustments to accumulated deficit and additional paid-in-capital: |
(Dollars in thousands)
|
||||
CMP Pro Forma Basis
|
||||
Accumulated deficit:
|
||||
CMP historical accumulated deficit
|
$ | 787,019 | ||
KC LLC historical accumulated deficit
|
(74,302 | ) | ||
Elimination of Cumulus Media ownership interest in CMP
|
11,636 | |||
CMP Pro Forma Basis adjustment
|
$ | 724,353 | ||
Additional
paid-in-capital:
|
||||
Exclusion of CMP historical financial condition (less KC LLC)
|
$ | (310,483 | ) | |
Equity consideration to CMP Sellers
|
78,127 | |||
CMP Pro Forma Basis adjustment
|
$ | (232,356 | ) | |
Citadel Pro Forma Basis
|
||||
Accumulated deficit:
|
||||
Citadel historical accumulated deficit
|
$ | (318 | ) | |
Severance to be paid to Citadel employees and executives in
connection with the Citadel Acquisition
|
(24,200 | ) | ||
Write off of Citadel historical deferred financing costs
|
(17,988 | ) | ||
Payment of make whole provision related to redemption of Citadel
Senior Notes
|
(31,000 | ) | ||
Tax benefit (Note D)
|
27,811 | |||
Citadel Pro Forma Basis adjustment
|
$ | (45,695 | ) | |
Additional
paid-in-capital:
|
||||
$373.6 million of Cumulus Media equity securities to be
sold to the Investors, net of fees of $21.4 million
|
$ | 373,600 | ||
Elimination of Citadel historical additional
paid-in-capital
|
(1,294,526 | ) | ||
Recognition of $0.01 par value of class A common stock
to be issued
|
(2,577 | ) | ||
Equity consideration to Citadel stockholders and warrant holders
|
316,225 | |||
Citadel Pro Forma Basis and Overall Pro Forma Basis adjustment
|
$ | (607,278 | ) | |
Overall Pro Forma Basis
|
||||
Accumulated deficit:
|
||||
Citadel historical accumulated deficit
|
$ | (318 | ) | |
Severance to be paid to Citadel employees and executives in
connection with the Citadel Acquisition
|
(24,200 | ) | ||
Payment of make whole provision related to redemption of Citadel
Senior Notes
|
(31,000 | ) | ||
Write-off Citadel historical deferred financing costs
|
(17,988 | ) | ||
Write off of CMP historical deferred financing costs
|
(3,805 | ) |
P-29
Table of Contents
(Dollars in thousands)
|
||||
Write off of liability related to future interest payments
recorded resultant from 2009 CMP Exchange Offer, and debt
issuance costs
|
1,485 | |||
Tax benefit from the write off of historical Citadel and CMP
deferred financing costs, write off of liability related to
future interest payments, exclusion of KC LLC historical
financial condition, severance to be paid to Citadel employees
and executives, and payment of make whole provision related to
redemption of Citadel Senior Notes
|
28,693 | |||
Overall Pro Forma Basis adjustment
|
$ | (47,133 | ) | |
Appendix
to Pro Forma Adjustments
The following tables have been prepared to assist the reader in
reconciling line items in the accompanying unaudited pro forma
condensed consolidated financial information that have multiple
footnote references so that the reader can better understand the
nature of each pro forma adjustment being made to the respective
line item, with the exception of those line items in the Overall
Pro Forma Basis balance sheet and income statement under
CMP Pro Forma Basis adjustments that reflect only
the addition of the KC LLC, and CMP Pro Forma Basis adjustments
shown in the CMP Pro Forma Basis balance sheet and income
statement.
Reconciliation of line items in the CMP Pro Forma Basis
condensed consolidated balance sheet that have multiple footnote
references:
For the |
||||||||
Six Months |
For the |
|||||||
Ended |
Year Ended |
|||||||
June 30, |
December 31, |
|||||||
(Dollars in thousands)
|
2011 | 2010 | ||||||
Corporate general and administrative expenses:
|
||||||||
Exclusion of KC LLC historical results of operations
|
$ | (1,072 | ) | $ | (1,138 | ) | ||
Elimination of CMP historical expense incurred in conjunction
with CMP Management Agreement
|
(2,000 | ) | (4,000 | ) | ||||
CMP Pro Forma Basis adjustment
|
$ | (3,072 | ) | $ | (5,138 | ) | ||
Interest expense, net:
|
||||||||
Exclusion of KC LLC historical results of operations
|
$ | 3,129 | $ | 6,034 | ||||
Elimination of CMP historical interest expense, net
|
(9,055 | ) | (18,391 | ) | ||||
CMP Pro Forma Basis adjustment
|
$ | (5,926 | ) | $ | (12,357 | ) | ||
Income tax (expense) benefit:
|
||||||||
Exclusion of KC LLC historical results of operations
|
$ | 32 | $ | 847 | ||||
Elimination of CMP historical income tax expense
|
3,441 | 6,989 | ||||||
CMP Pro Forma Basis adjustment
|
$ | 3,473 | $ | 7,836 | ||||
(Dollars in thousands)
|
||||
Cash and cash equivalents:
|
||||
Exclusion of KC LLC historical financial condition
|
$ | 1,481 | ||
CMP Pro Forma Basis cash and cash equivalents adjustment
|
| |||
CMP Pro Forma Basis adjustment
|
$ | 1,481 | ||
Prepaid expenses and other current assets:
|
||||
Exclusion of KC LLC historical financial condition
|
$ | 234 | ||
CMP prepaid expense specific to CMP Management Agreement
|
(1,000 | ) | ||
CMP Pro Forma Basis adjustment
|
$ | (766 | ) | |
Intangible assets, net:
|
||||
Exclusion of KC LLC historical financial condition
|
$ | (15,233 | ) | |
Adjustment to fair value of CMPs FCC license intangible
assets
|
19,037 | |||
CMP Pro Forma Basis adjustment
|
$ | 3,804 | ||
Goodwill:
|
||||
CMP Pro Forma Basis adjustment to Goodwill
|
$ | 433,091 | ||
Dividend related to the CMP preferred stock
|
14,730 | |||
CMP Pro Forma Basis adjustment
|
$ | 447,821 | ||
Accounts payable and accrued expenses:
|
||||
Exclusion of KC LLC historical financial condition
|
$ | (10,737 | ) |
P-30
Table of Contents
(Dollars in thousands)
|
||||
Cumulus Media deferred revenue specific to CMP Management
Agreement
|
(1,000 | ) | ||
CMP Pro Forma Basis adjustment
|
$ | (11,737 | ) | |
Additional Paid-in capital:
|
||||
Exclusion of KC LLC historical financial condition
|
$ | (367 | ) | |
Exclusion of CMP historical financial condition (less KC LLC)
|
(310,483 | ) | ||
Equity consideration to CMP Sellers
|
78,127 | |||
CMP Pro Forma Basis adjustment
|
$ | (232,723 | ) | |
Accumulated deficit:
|
||||
CMP historical accumulated deficit
|
$ | 787,019 | ||
Removal of historical Cumulus Media ownership interest in CMP
|
11,636 | |||
CMP Pro Forma Basis adjustment
|
$ | 798,655 | ||
P-31