Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CUMULUS MEDIA INC | cmls8-kcompletionofacquisi.htm |
Exhibit 99.1
CUMULUS MEDIA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements give effect to the completion on November 14, 2013 of Cumulus Media Inc.’s (the “Company” or “Cumulus”) previously announced: (i) sale to Townsquare Media, LLC (“Townsquare”) of 53 radio stations in 12 small and mid-sized markets for approximately $238.0 million in cash; and (ii) swap of 15 radio stations in two small and mid-sized markets with Townsquare, which stations are accounted for as a discontinued operation, in exchange for five radio stations in Fresno, California (the "Acquired Fresno Operations"), which acquired stations are being accounted for as a business combination (such transactions together, the “Townsquare Transaction”).
The following unaudited pro forma condensed consolidated financial statements consist of Cumulus’ historical condensed consolidated balance sheet and condensed consolidated statements of operations as of and for the periods set out below, adjusted on an unaudited pro forma basis solely to reflect the completion of the Townsquare Transaction:
• | an unaudited pro forma condensed consolidated balance sheet as of September 30, 2013, giving effect to the completion of the Townsquare Transaction as if it had occurred on September 30, 2013; | |||
• | unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2013 and for the years ended December 31, 2012, 2011 and 2010, giving effect to the completion of the Townsquare Transaction as if it had occurred on January 1, 2010; and | |||
• | notes to the unaudited pro forma condensed consolidated financial information. | |||
The results of the Acquired Fresno Operations were not included in the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2011 or 2010 as such results are not required to be included therein under authoritative guidance related to the preparation and presentation of pro forma financial information.
The following Cumulus historical financial data has been derived from the Company’s historical audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Form 10-K") and the Company's historical unaudited condensed consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 2013 (the "2013 Third Quarter Form 10-Q"). The following unaudited pro forma condensed consolidated financial information should be read in conjunction with Cumulus’ financial statements and notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section contained in the 2012 Form 10-K and the 2013 Third Quarter Form 10-Q.
The following unaudited condensed consolidated financial information was prepared in accordance with accounting principles generally accepted in the United States of America, and should be read in conjunction with the accompanying notes to the unaudited pro forma condensed consolidated financial information presented below.
The specific assumptions and adjustments underlying and included in the following unaudited pro forma condensed consolidated financial statements relate only to the completion of the Townsquare Transaction. Specifically, adjustments to the following unaudited pro forma condensed statements of operations give effect to certain events that are (i) directly attributable to the completion of the Townsquare Transaction, (ii) factually supportable, and (iii) expected to have a continuing impact on the Company’s results. Adjustments to the following unaudited pro forma condensed balance sheet give effect to certain events that are directly attributable to the completion of the Townsquare Transaction, and that are factually supportable regardless of whether they are expected to have a continuing impact on the Company or are expected to be non-recurring.
The following unaudited pro forma condensed consolidated financial statements have been provided for informational purposes only and should not be considered indicative of Cumulus’ actual historical financial position or results of operations had the Townsquare Transaction occurred as of any of the dates indicated or any other date. Actual amounts may differ materially from those presented in the accompanying pro forma information.
CUMULUS MEDIA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands, except for per share data)
As of September 30, 2013
As Reported (A) | Less: Discontinued Operations (B) | Add: Cash Proceeds and Assets Acquired (C) | Pro Forma Combined | ||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 64,170 | $ | (4 | ) | $ | 238,000 | (D) | $ | 302,166 | |||||
Restricted cash | 3,729 | — | — | 3,729 | |||||||||||
Accounts receivable, less allowance for doubtful accounts of $3,728 | 194,872 | (10,979 | ) | (G) | 2,036 | (G) | 185,929 | ||||||||
Trade receivable | 7,821 | (1,036 | ) | — | 6,785 | ||||||||||
Deferred income taxes | 30,575 | 6,502 | 189 | 37,266 | |||||||||||
Prepaid expenses and other current assets | 23,640 | (287 | ) | 134 | 23,487 | ||||||||||
Total current assets | 324,807 | (5,804 | ) | 240,359 | 559,362 | ||||||||||
Property and equipment, net | 240,915 | (11,370 | ) | 5,434 | 234,979 | ||||||||||
Broadcast licenses | 1,640,829 | (61,384 | ) | 17,539 | 1,596,984 | ||||||||||
Other intangible assets, net | 194,653 | (8,957 | ) | 854 | 186,550 | ||||||||||
Goodwill | 1,205,195 | (66,808 | ) | 8,469 | 1,146,856 | ||||||||||
Other assets | 70,740 | — | 100 | 70,840 | |||||||||||
Total assets | $ | 3,677,139 | $ | (154,323 | ) | $ | 272,755 | $ | 3,795,571 | ||||||
Liabilities and Stockholders’ Equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable and accrued expenses | $ | 91,728 | $ | (1,200 | ) | $ | 199 | $ | 90,727 | ||||||
Trade payable | 7,107 | (1,080 | ) | — | 6,027 | ||||||||||
Current portion of long-term debt | 38,092 | — | — | 38,092 | |||||||||||
Other current liabilities | 3,714 | — | 288 | 4,002 | |||||||||||
Total current liabilities | 140,641 | (2,280 | ) | 487 | 138,848 | ||||||||||
Long-term debt, excluding 7.75% senior notes | 1,966,230 | — | — | 1,966,230 | |||||||||||
7.75% senior notes | 610,000 | — | — | 610,000 | |||||||||||
Series B cumulative redeemable preferred stock | 77,241 | — | — | 77,241 | |||||||||||
Other liabilities | 39,587 | (107 | ) | — | 39,480 | ||||||||||
Deferred income taxes | 575,007 | (17,003 | ) | 2,512 | 560,516 | ||||||||||
Total liabilities | 3,408,706 | (19,390 | ) | 2,999 | 3,392,315 | ||||||||||
Stockholders’ equity: | |||||||||||||||
Class A common stock, par value $0.01 per share; 750,000,000 shares authorized; 191,473,932 shares issued and 167,300,363 shares outstanding | 1,914 | — | — | 1,914 | |||||||||||
Class B common stock, par value $0.01 per share; 600,000,000 shares authorized; 15,424,944 shares issued and outstanding | 154 | — | — | 154 | |||||||||||
Class C common stock, par value $0.01 per share; 644,871 shares authorized issued and outstanding | 6 | — | — | 6 | |||||||||||
Treasury stock, at cost, 24,173,569 shares | (250,917 | ) | — | — | (250,917 | ) | |||||||||
Additional paid-in-capital | 1,510,329 | — | — | 1,510,329 | |||||||||||
Accumulated deficit | (993,053 | ) | (134,933 | ) | (F) | 269,756 | (F) | (858,230 | ) | ||||||
Total stockholders’ equity | 268,433 | (134,933 | ) | 269,756 | 403,256 | ||||||||||
Total liabilities and stockholders’ equity | $ | 3,677,139 | $ | (154,323 | ) | $ | 272,755 | $ | 3,795,571 | ||||||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CUMULUS MEDIA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For The Nine Months Ended September 30, 2013
(Dollars in thousands, except for share and per share data)
As Reported (A) | Less: Discontinued Operations (E) | Add: Acquired Fresno Operations (H) | Pro Forma Combined | ||||||||||||
Broadcast revenues | $ | 802,704 | $ | (52,941 | ) | $ | 10,536 | $ | 760,299 | ||||||
Management fees | 917 | — | — | 917 | |||||||||||
Net revenues | 803,621 | (52,941 | ) | 10,536 | 761,216 | ||||||||||
Operating expenses: | |||||||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 509,972 | (27,631 | ) | 8,034 | 490,375 | ||||||||||
Depreciation and amortization | 86,809 | (3,996 | ) | 712 | 83,525 | ||||||||||
LMA fees | 2,356 | (62 | ) | — | 2,294 | ||||||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $2,259) | 33,365 | — | — | 33,365 | |||||||||||
Gain on sale of stations | (3,662 | ) | — | — | (3,662 | ) | |||||||||
Gain on derivative instrument | (2,672 | ) | — | — | (2,672 | ) | |||||||||
Total operating expenses | 626,168 | (31,689 | ) | 8,746 | 603,225 | ||||||||||
Operating income | 177,453 | (21,252 | ) | 1,790 | 157,991 | ||||||||||
Non-operating expense: | |||||||||||||||
Interest expense, net | (133,279 | ) | — | — | (133,279 | ) | |||||||||
Loss on early extinguishment of debt | (4,539 | ) | — | — | (4,539 | ) | |||||||||
Other expense, net | (400 | ) | 1 | — | (399 | ) | |||||||||
Total non-operating expense, net | (138,218 | ) | 1 | — | (138,217 | ) | |||||||||
Income from continuing operations before income taxes | 39,235 | (21,251 | ) | 1,790 | 19,774 | ||||||||||
Income tax expense | (14,087 | ) | 8,607 | (I) | (725 | ) | (I) | (6,205 | ) | ||||||
Income from continuing operations | 25,148 | (12,644 | ) | 1,065 | 13,569 | ||||||||||
Net income | 25,148 | (12,644 | ) | 1,065 | 13,569 | ||||||||||
Less: dividends declared and accretion of redeemable preferred stock | 10,676 | — | — | 10,676 | |||||||||||
Income attributable to common shareholders | $ | 14,472 | $ | (12,644 | ) | $ | 1,065 | $ | 2,893 | ||||||
Basic and diluted income per common share | |||||||||||||||
Basic: Income from continuing operations per share | $ | 0.06 | $ | 0.02 | |||||||||||
Income per share | $ | 0.06 | $ | 0.02 | |||||||||||
Diluted: Income from continuing operations per share | $ | 0.06 | $ | 0.02 | |||||||||||
Income per share | $ | 0.06 | $ | 0.02 | |||||||||||
Weighted average basic common shares outstanding | 176,994,583 | 176,994,583 | |||||||||||||
Weighted average diluted common shares outstanding | 180,032,349 | 180,032,349 | |||||||||||||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CUMULUS MEDIA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For The Year Ended December 31, 2012
(Dollars in thousands, except for share and per share data)
As Reported (A) | Less: Discontinued Operations (E) | Add: Acquired Fresno Operations (H) | Pro Forma Combined | ||||||||||||
Broadcast revenues | $ | 1,073,901 | $ | (74,310 | ) | $ | 15,602 | $ | 1,015,193 | ||||||
Management fees | 2,681 | — | — | 2,681 | |||||||||||
Net revenues | 1,076,582 | (74,310 | ) | 15,602 | 1,017,874 | ||||||||||
Operating expenses: | |||||||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 661,511 | (38,627 | ) | 11,068 | 633,952 | ||||||||||
Depreciation and amortization | 142,143 | (6,568 | ) | 703 | 136,278 | ||||||||||
LMA fees | 3,556 | (91 | ) | — | 3,465 | ||||||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $18,779) | 57,438 | — | — | 57,438 | |||||||||||
Gain on derivative instrument | (12 | ) | — | — | (12 | ) | |||||||||
Impairment of intangible assets | 127,141 | (1,156 | ) | — | 125,985 | ||||||||||
Total operating expenses | 991,777 | (46,442 | ) | 11,771 | 957,106 | ||||||||||
Operating income | 84,805 | (27,868 | ) | 3,831 | 60,768 | ||||||||||
Non-operating (expense) income: | |||||||||||||||
Interest expense, net | (198,628 | ) | — | — | (198,628 | ) | |||||||||
Loss on early extinguishment of debt | (2,432 | ) | — | — | (2,432 | ) | |||||||||
Other expense, net | (2,474 | ) | (5 | ) | — | (2,479 | ) | ||||||||
Total non-operating expense, net | (203,534 | ) | (5 | ) | — | (203,539 | ) | ||||||||
(Loss) income from continuing operations before income taxes | (118,729 | ) | (27,873 | ) | 3,831 | (142,771 | ) | ||||||||
Income tax benefit (expense) | 26,552 | 11,289 | (I) | (1,552 | ) | (I) | 36,289 | ||||||||
(Loss) income from continuing operations | (92,177 | ) | (16,584 | ) | 2,279 | (106,482 | ) | ||||||||
Income from discontinued operations, net of taxes | 59,448 | — | — | 59,448 | |||||||||||
Net (loss) income | (32,729 | ) | (16,584 | ) | 2,279 | (47,034 | ) | ||||||||
Less: dividends declared and accretion of redeemable preferred stock | 21,432 | — | — | 21,432 | |||||||||||
(Loss) income attributable to common shareholders | $ | (54,161 | ) | $ | (16,584 | ) | $ | 2,279 | $ | (68,466 | ) | ||||
Basic and diluted (loss) income per common share | |||||||||||||||
Basic: Loss from continuing operations per share | $ | (0.70 | ) | $ | (0.79 | ) | |||||||||
Income from discontinued operations per share | $ | 0.37 | $ | 0.37 | |||||||||||
Loss per share | $ | (0.33 | ) | $ | (0.42 | ) | |||||||||
Diluted: Loss from continuing operations per share | $ | (0.70 | ) | $ | (0.79 | ) | |||||||||
Income from discontinued operations per share | $ | 0.37 | $ | 0.37 | |||||||||||
Loss per share | $ | (0.33 | ) | $ | (0.42 | ) | |||||||||
Weighted average basic common shares outstanding | 162,603,882 | 162,603,882 | |||||||||||||
Weighted average diluted common shares outstanding | 162,603,882 | 162,603,882 | |||||||||||||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CUMULUS MEDIA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For The Year Ended December 31, 2011
(Dollars in thousands, except for share and per share data)
As Reported (A) | Less: Discontinued Operations (E) | Pro Forma Combined | |||||||||
Broadcast revenues | $ | 517,171 | $ | (53,919 | ) | $ | 463,252 | ||||
Management fees | 2,792 | — | 2,792 | ||||||||
Net revenues | 519,963 | (53,919 | ) | 466,044 | |||||||
Operating expenses: | |||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 316,253 | (31,332 | ) | 284,921 | |||||||
Depreciation and amortization | 51,148 | (2,418 | ) | 48,730 | |||||||
LMA fees | 2,525 | (100 | ) | 2,425 | |||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $10,744) | 90,761 | — | 90,761 | ||||||||
Gain on exchange of assets or stations | (15,278 | ) | 1,061 | (14,217 | ) | ||||||
Realized loss on derivative instrument | 3,368 | — | 3,368 | ||||||||
Total operating expenses | 448,777 | (32,789 | ) | 415,988 | |||||||
Operating income | 71,186 | (21,130 | ) | 50,056 | |||||||
Non-operating (expense) income: | |||||||||||
Interest expense, net | (86,989 | ) | — | (86,989 | ) | ||||||
Loss on early extinguishment of debt | (4,366 | ) | — | (4,366 | ) | ||||||
Other expense, net | 39 | 22 | 61 | ||||||||
Gain on equity investment in Cumulus Media Partners, LLC | 11,636 | — | 11,636 | ||||||||
Total non-operating expense, net | (79,680 | ) | 22 | (79,658 | ) | ||||||
(Loss) income from continuing operations before income taxes | (8,494 | ) | (21,108 | ) | (29,602 | ) | |||||
Income tax benefit (expense) | 3,313 | 8,549 | (I) | 11,862 | |||||||
(Loss) income from continuing operations | (5,181 | ) | (12,559 | ) | (17,740 | ) | |||||
Income from discontinued operations, net of taxes | 69,041 | — | 69,041 | ||||||||
Net income | 63,860 | (12,559 | ) | 51,301 | |||||||
Less: dividends declared and accretion of redeemable preferred stock | 6,961 | — | 6,961 | ||||||||
Income attributable to common shareholders | $ | 56,899 | $ | (12,559 | ) | $ | 44,340 | ||||
Basic and diluted (loss) income per common share | |||||||||||
Basic: Loss from continuing operations per share | $ | (0.17 | ) | $ | (0.34 | ) | |||||
Income from discontinued operations per share | $ | 0.97 | $ | 0.97 | |||||||
Income per share | $ | 0.80 | $ | 0.63 | |||||||
Diluted: Loss from continuing operations per share | $ | (0.17 | ) | $ | (0.34 | ) | |||||
Income from discontinued operations per share | $ | 0.97 | $ | 0.97 | |||||||
Income per share | $ | 0.80 | $ | 0.63 | |||||||
Weighted average basic common shares outstanding | 70,890,393 | 70,890,393 | |||||||||
Weighted average diluted common shares outstanding | 70,890,393 | 70,890,393 | |||||||||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CUMULUS MEDIA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For The Year Ended December 31, 2010
(Dollars in thousands, except for share and per share data)
As Reported (A) | Less: Discontinued Operations (E) | Pro Forma Combined | |||||||||
Broadcast revenues | $ | 232,494 | $ | (47,199 | ) | $ | 185,295 | ||||
Management fees | 4,146 | — | 4,146 | ||||||||
Net revenues | 236,640 | (47,199 | ) | 189,441 | |||||||
Operating expenses: | |||||||||||
Direct operating expenses (excluding depreciation, amortization and LMA fees) | 143,717 | (28,625 | ) | 115,092 | |||||||
Depreciation and amortization | 8,214 | (1,002 | ) | 7,212 | |||||||
LMA fees | 2,054 | (144 | ) | 1,910 | |||||||
Corporate, general and administrative expenses (including stock-based compensation expense of $2,451) | 18,519 | — | 18,519 | ||||||||
Realized loss on derivative instrument | 1,957 | — | 1,957 | ||||||||
Impairment of intangible assets | 671 | — | 671 | ||||||||
Total operating expenses | 175,132 | (29,771 | ) | 145,361 | |||||||
Operating income | 61,508 | (17,428 | ) | 44,080 | |||||||
Non-operating (expense) income: | |||||||||||
Interest expense, net | (30,307 | ) | — | (30,307 | ) | ||||||
Terminated transaction expense | (7,847 | ) | — | (7,847 | ) | ||||||
Other expense, net | 108 | — | 108 | ||||||||
Total non-operating expense, net | (38,046 | ) | — | (38,046 | ) | ||||||
Income from continuing operations before income taxes | 23,462 | (17,428 | ) | 6,034 | |||||||
Income tax (expense) benefit | (1,505 | ) | 7,058 | (I) | 5,553 | ||||||
Income from continuing operations | 21,957 | (10,370 | ) | 11,587 | |||||||
Income from discontinued operations, net of taxes | 7,445 | — | 7,445 | ||||||||
Net income | $ | 29,402 | $ | (10,370 | ) | $ | 19,032 | ||||
Basic and diluted income per common share | |||||||||||
Basic: Income from continuing operations per share | $ | 0.52 | $ | 0.29 | |||||||
Income from discontinued operations per share | $ | 0.18 | $ | 0.18 | |||||||
Income per share | $ | 0.70 | $ | 0.47 | |||||||
Diluted: Income from continuing operations per share | $ | 0.51 | $ | 0.29 | |||||||
Income from discontinued operations per share | $ | 0.17 | $ | 0.17 | |||||||
Income per share | $ | 0.68 | $ | 0.46 | |||||||
Weighted average basic common shares outstanding | 40,341,011 | 40,341,011 | |||||||||
Weighted average diluted common shares outstanding | 41,189,161 | 41,189,161 | |||||||||
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CUMULUS MEDIA INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed consolidated financial statements give effect to the completion, on November 14, 2013 of Cumulus Media Inc.’s (the “Company” or “Cumulus”) previously announced: (i) sale to Townsquare Media, LLC (“Townsquare”) of 53 radio stations in 12 small and mid-sized markets for approximately $238.0 million in cash; and (ii) swap of 15 radio stations in two small and mid-sized markets with Townsquare, which stations will be accounted for as a discontinued operation, in exchange for five stations in Fresno, California, which acquired stations are being accounted for as a business combination (such transactions together, the "Townsquare Transaction").
The accompanying unaudited pro forma condensed consolidated balance sheet is presented as if all components of the Townsquare Transaction occurred on September 30, 2013. The accompanying unaudited pro forma condensed consolidated statements of operations are presented as if the radio stations sold and swapped in the Townsquare Transaction were disposed of on January 1, 2010, and as if the five radio stations acquired in Fresno, California were acquired on January 1, 2012.
A. | Includes the results of the Company’s radio stations sold and swapped in the Townsquare Transaction, which were not historically reported as discontinued operations. | ||
B. | Represents the elimination of the assets and liabilities attributable to the Company's radio stations sold and swapped in the Townsquare Transaction. | ||
C. | Represents the pro forma purchase price allocation based upon the estimated fair values attributable to the five Fresno, CA radio stations acquired in the Townsquare Transaction. | ||
D. | Represents cash proceeds received from the sale of the Company's radio stations in the Townsquare Transaction. | ||
E. | Represents the historical financial results of the Company’s radio stations sold and swapped in the Townsquare Transaction. | ||
F. | Represents a pre-tax book gain of $110.2 million for which the related tax expense will be offset by the release of valuation allowance associated with the consumption of available net operating loss carryforwards. In addition to these items, these adjustments include a deferred tax benefit associated with the release of valuation allowance in the amount of $24.6 million with respect to sources of taxable income from the settlement of deferred tax liabilities associated with the Company's disposition of indefinite lived intangibles and the acquisition of certain deferred tax liabilities associated with the five Fresno, CA radio stations acquired in the Townsquare Transaction. | ||
G. | Less allowance for doubtful accounts of $0.3 million and $0.1 million for the discontinued operations and assets acquired, respectively. | ||
H. | Represents the financial results of the five Fresno, CA radio stations acquired in the Townsquare Transaction. | ||
I. | Reflects the tax effect at a blended federal and state statutory rate of 40.5%. | ||