þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 82-5134717 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated filer | þ | |||
Non-accelerated filer | ¨ | Smaller reporting company | þ | |||
Emerging growth company | ¨ |
Item Number | Page Number | |
1 | ||
1A. | ||
1B. | ||
2 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
7A. | ||
8 | ||
9 | ||
9A. | ||
9B. | ||
10 | ||
11 | ||
12 | ||
13 | ||
14 | ||
15 | ||
16 | ||
Item 1. | Business |
• | obtained total radio industry listener and revenue levels from the Radio Advertising Bureau; |
• | derived historical market revenue statistics and market revenue share percentages from data published by Miller Kaplan, Arase LLP, a public accounting firm that specializes in serving the broadcasting industry and BIA/Kelsey (“BIA”), a media and telecommunications advisory services firm; and |
• | derived all audience share data and audience rankings, including ranking by population, from surveys of people ages 12 and over, listening Monday through Sunday, 6 a.m. to 12 midnight, as reported in the Nielsen Audio Market Report. |
• | Amended and Restated Credit Agreement, dated as of December 23, 2013, by and among Cumulus Media Inc., Cumulus Media Holdings Inc., as borrower, certain lenders, JPMorgan Chase Bank, N.A., as lender and Administrative Agent, Royal Bank of Canada and Macquarie Capital (USA) Inc., as co-syndication agents, and Credit Suisse AG, Cayman Islands Branch, Fifth Third Bank, Goldman Sachs Bank USA and ING Capital LLC, as co-documentation agents (“the Canceled Credit Agreement”), pursuant to which Old Cumulus had outstanding term loans in the amount of $1.7 billion (the “Predecessor Term Loan”); |
• | Indenture, dated as of May 13, 2011, among Cumulus Media Inc., the Guarantors named therein and U.S. Bank National Association, as Trustee, as supplemented, and pursuant to which Old Cumulus had outstanding senior notes with a face value of $610.0 million (“7.75% Senior Notes”); and |
• | Rights Agreement, dated as of June 5, 2017, between Cumulus Media Inc. and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”). |
• | In accordance with the Plan, on the Effective Date each share of Old Cumulus’s Class A common stock, par value $0.01 per share (the “old Class A common stock”), Class B common stock, par value $0.01 per share (the “old |
• | On the Effective Date, our certificate of incorporation was amended and restated to authorize the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0000001 per share (“new Class A common stock”),100,000,000 shares of Class B common stock, par value $0.0000001 per share (“new Class B common stock” and, together with the new Class A common stock, the “new common stock”) and 100,000,000 shares of preferred stock (see Note 11, “Stockholders’ Equity”); |
• | On the Effective Date, we issued 11,052,211 shares of new Class A common stock and 5,218,209 shares of new Class B common stock; |
• | On the Effective Date, we issued 3,016,853 Series 1 warrants to purchase shares of new common stock; |
• | After the Effective Date, we also issued or will issue 712,736 Series 2 warrants (the “Series 2 warrants” and, together with the Series 1 warrants, the “Warrants”) to purchase shares of new common stock; |
• | We entered into a $1.3 billion credit agreement (the “Credit Agreement” or “Term Loan”) with Wilmington Trust, N.A., as administrative agent (the “Agent”) and the lenders named therein (see Note 9, “Long-Term Debt”); |
• | The holders of claims with respect to the Predecessor Term Loan received the following in full and complete satisfaction of their respective claims thereunder: (i) a pro rata share of the Term Loan and (ii) a pro rata share of 83.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Long-Term Incentive Plan (the “Incentive Plan”) (see Note 11, “Stockholders’ Equity”); |
• | The holders of unsecured claims against Old Cumulus, including claims arising from the 7.75% Senior Notes received, in the aggregate, 16.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Incentive Plan; |
• | Our board of directors was reconstituted to consist of our President and Chief Executive Officer and six independent directors selected by the holders of the Predecessor Term Loan; and |
• | Intercompany Claims and Interests (as defined in the Plan) were canceled without any distribution on account of such Intercompany Claims and Interests. |
Automotive | Food products | Retail | ||
Entertainment | Home products | Restaurants | ||
Financial | Professional services | Telecommunications/Media |
• | a station’s share of audiences and the demographic groups targeted by advertisers (as measured by ratings surveys); |
• | the supply and demand for radio advertising time and for time targeted at particular demographic groups; and |
• | certain additional qualitative factors, such as the brand loyalty of listeners to a specific station. |
Market | Stations | |||
Abilene, TX | 4 | |||
Albany, GA | 6 | |||
Albuquerque, NM | 8 | |||
Allentown, PA | 2 | |||
Amarillo, TX | 6 | |||
Ann Arbor, MI | 4 | |||
Appleton, WI | 4 | |||
Atlanta, GA | 4 | |||
Baton Rouge, LA | 5 | |||
Beaumont, TX | 5 | |||
Birmingham, AL | 6 | |||
Bloomington, IL | 5 | |||
Boise, ID | 6 | |||
Bridgeport, CT | 2 | |||
Buffalo, NY | 5 | |||
Charleston, SC | 5 | |||
Chattanooga, TN | 4 | |||
Chicago, IL | 3 | |||
Cincinnati, OH | 5 | |||
Colorado Springs, CO | 6 | |||
Columbia, MO | 7 | |||
Columbia, SC | 5 | |||
Columbus-Starkville, MS | 5 | |||
Dallas, TX | 8 | |||
Des Moines, IA | 5 | |||
Detroit, MI | 3 | |||
Erie, PA | 4 | |||
Eugene, OR | 5 | |||
Fayetteville, AR | 7 | |||
Fayetteville, NC | 4 | |||
Flint, MI | 5 | |||
Florence, SC | 8 | |||
Fort Smith, AR | 3 | |||
Fort Walton Beach, FL | 5 | |||
Fresno, CA | 5 | |||
Grand Rapids, MI | 5 | |||
Green Bay, WI | 6 | |||
Harrisburg, PA | 5 | |||
Houston, TX | 1 | |||
Huntsville, AL | 6 | |||
Indianapolis, IN | 6 | |||
Johnson City, TN | 5 | |||
Kansas City, MO | 6 | |||
Knoxville, TN | 4 | |||
Kokomo, IN | 1 |
Market | Stations | |||
Lafayette, LA | 5 | |||
Lake Charles, LA | 6 | |||
Lancaster, PA | 2 | |||
Lexington, KY | 6 | |||
Little Rock, AR | 7 | |||
Los Angeles, CA | 2 | |||
Macon, GA | 6 | |||
Melbourne, FL | 4 | |||
Memphis, TN | 4 | |||
Minneapolis, MN | 5 | |||
Mobile, AL | 5 | |||
Modesto, CA | 6 | |||
Montgomery, AL | 6 | |||
Muncie, IN | 2 | |||
Muskegon, MI | 5 | |||
Myrtle Beach, SC | 5 | |||
Nashville, TN | 5 | |||
New London, CT | 3 | |||
New Orleans, LA | 4 | |||
New York, NY | 4 | |||
Oklahoma City, OK | 7 | |||
Oxnard-Ventura, CA | 4 | |||
Pensacola, FL | 5 | |||
Peoria, IL | 5 | |||
Providence, RI | 6 | |||
Reno, NV | 4 | |||
Saginaw, MI | 4 | |||
Salt Lake City, UT | 6 | |||
San Francisco, CA | 7 | |||
Santa Barbara, CA | 1 | |||
Savannah, GA | 7 | |||
Shreveport, LA | 5 | |||
Springfield, MA | 2 | |||
Stockton, CA | 2 | |||
Syracuse, NY | 4 | |||
Tallahassee, FL | 5 | |||
Toledo, OH | 6 | |||
Topeka, KS | 7 | |||
Tucson, AZ | 5 | |||
Washington, DC | 3 | |||
Westchester, NY | 1 | |||
Wichita Falls, TX | 4 | |||
Wilkes-Barre, PA | 6 | |||
Wilmington, NC | 5 | |||
Worcester, MA | 3 | |||
York, PA | 4 | |||
Youngstown, OH | 8 |
Name | Age | Position(s) | ||
Mary G. Berner | 59 | President and Chief Executive Officer | ||
John Abbot | 56 | Executive Vice President, Treasurer and Chief Financial Officer | ||
Richard S. Denning | 52 | Executive Vice President, Secretary and General Counsel | ||
Suzanne M. Grimes | 60 | Executive Vice President of Corporate Marketing and President of Westwood One |
Item 1A. | Risk Factors |
• | personal digital audio and video devices (e.g. smart phones, tablets); |
• | satellite delivered digital radio services that offer numerous programming channels such as Sirius Satellite Radio; |
• | audio programming by internet content providers, internet radio stations such as Pandora, cable systems, direct broadcast satellite systems and other digital audio broadcast formats; |
• | low power FM radio stations, which are non-commercial FM radio broadcast outlets that serve small, localized areas; |
• | applications that permit users to listen to programming on a time-delayed basis and to fast-forward through programming and/or advertisements (e.g. podcasts); and |
• | search engine and e-commerce websites where a significant portion of their revenues are derived from advertising dollars such as Google and Yelp. |
• | another radio station in the market were to convert its programming format to a format similar to our station or launch aggressive promotional campaigns; |
• | a new station were to adopt a competitive format; |
• | we experience increased competition from non-radio sources; |
• | there is a shift in population, demographics, audience tastes or other factors beyond our control; |
• | an existing competitor were to strengthen its operations; or |
• | any one or all of our stations were unable to maintain or increase advertising revenue or market share for any other reasons. |
• | economic conditions in the areas where our stations are located and in the nation as a whole; |
• | national and local demand for radio advertising; |
• | the popularity of the programming offered by our stations; |
• | changes in the population demographics in the areas where our stations are located; |
• | local and national advertising price fluctuations, which can be affected by the availability of programming, the popularity of programming, and the relative supply of and demand for commercial advertising; |
• | the capability and effectiveness of our sales organization; |
• | our competitors’ activities, including increased competition from other advertising-based mediums; |
• | decisions by advertisers to withdraw or delay planned advertising expenditures for any reason; and |
• | other factors beyond our control. |
• | our achievement of certain expected revenue results, including as a result of factors or events that are unexpected or otherwise outside of our control; |
• | our ability to generate sufficient cash flows to service our debt and other obligations and our ability to access capital, including debt or equity; |
• | general economic or business conditions affecting the radio broadcasting industry which may be less favorable than expected, decreasing spending by advertisers; |
• | changes in market conditions which could impair our intangible assets and the effects of any material impairment of our intangible assets; |
• | our ability to execute our business plan and strategy; |
• | our ability to attract, motivate and/or retain key executives and associates; |
• | increased competition in the radio broadcasting industry and our ability to respond to changes in technology in order to remain competitive; |
• | disruptions or security breaches of our information technology infrastructure; |
• | the impact of current, pending or future legislation and regulations, antitrust considerations, and pending or future litigation or claims; |
• | changes in regulatory or legislative policies or actions or in regulatory bodies; |
• | changes in uncertain tax positions and tax rates; |
• | changes in the financial markets; |
• | changes in capital expenditure requirements; |
• | changes in interest rates; |
• | the possibility that we may be unable to achieve any expected cost-saving or operational synergies in connection with any acquisitions or business improvement initiatives, or achieve them within the expected time periods; and |
• | other risks and uncertainties referenced from time to time in this Form 10-K and other filings of ours with the SEC or not currently known to us or that we do not currently deem to be material. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
7/31/2018 | 8/31/2018 | 9/30/2018 | 10/31/2018 | 11/30/2018 | 12/31/2018 | ||||||||||||||||||
Cumulus (1) | $ | 100.00 | $ | 81.44 | $ | 70.86 | $ | 54.07 | $ | 54.07 | $ | 51.67 | |||||||||||
S&P 500 Index | 100.00 | 100.43 | 93.46 | 95.13 | 95.13 | 86.39 | |||||||||||||||||
NASDAQ Index | 100.00 | 99.22 | 86.76 | 90.39 | 90.39 | 81.82 | |||||||||||||||||
Radio Index (2) | 100.00 | 96.44 | 91.24 | 90.34 | 90.34 | 83.01 |
(1) | As discussed in further detail above, the Company's common stock was delisted from the NASDAQ as of November 22, 2017 and relisted on August 1, 2018, therefore, the Company's stock price performance was calculated starting after that date. |
(2) | The Radio Index consists of the following companies: Beasley Broadcast Group, Inc., iHeartMedia, Inc. (formerly Clear Channel Holdings, Inc.), Emmis Communications Corp., Entercom Communications Corp., Urban One, Inc. (formerly Radio One, Inc.), and Saga Communications, Inc. |
Item 6. | Selected Financial Data |
Successor Company | Predecessor Company | ||||||||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | Year Ended December 31, 2015 | Year Ended December 31, 2014 | ||||||||||||||||||
STATEMENT OF OPERATIONS DATA: | |||||||||||||||||||||||
Net revenue | $ | 686,436 | $ | 453,924 | $ | 1,135,662 | $ | 1,141,400 | $ | 1,168,679 | $ | 1,263,423 | |||||||||||
Content costs | 238,888 | 163,885 | 409,213 | 432,077 | 396,426 | 433,596 | |||||||||||||||||
Selling, general & administrative expenses | 276,551 | 195,278 | 471,300 | 468,603 | 477,327 | 470,441 | |||||||||||||||||
Depreciation and amortization | 34,060 | 22,046 | 62,239 | 87,267 | 102,105 | 115,275 | |||||||||||||||||
LMA fees | 2,471 | 1,809 | 10,884 | 12,824 | 10,129 | 7,195 | |||||||||||||||||
Corporate expenses (including non-cash stock-based compensation expense) | 31,714 | 17,169 | 59,062 | 40,148 | 73,403 | 76,428 | |||||||||||||||||
Loss (gain) on sale of assets or stations | 103 | 158 | (2,499 | ) | (95,695 | ) | 2,856 | (1,342 | ) | ||||||||||||||
Impairment of intangible assets and goodwill (1) | — | — | 335,909 | 604,965 | 565,584 | — | |||||||||||||||||
Impairment charges - equity interest in Pulser Media Inc. | — | — | — | — | 19,364 | — | |||||||||||||||||
Operating income (loss) | 102,649 | 53,579 | (210,446 | ) | (408,789 | ) | (478,515 | ) | 161,830 | ||||||||||||||
Reorganization items, net (2) | — | 466,201 | (31,603 | ) | — | — | — | ||||||||||||||||
Interest expense | (50,718 | ) | (260 | ) | (126,952 | ) | (138,634 | ) | (141,679 | ) | (145,533 | ) | |||||||||||
Interest income | 36 | 50 | 136 | 493 | 433 | 1,388 | |||||||||||||||||
Gain (loss) on early extinguishment of debt | 201 | — | (1,063 | ) | 8,017 | 13,222 | — | ||||||||||||||||
Other (expense) income, net | (3,096 | ) | (273 | ) | (363 | ) | 2,039 | 14,205 | 4,338 | ||||||||||||||
Income (loss) from continuing operations before income taxes | 49,072 | 519,297 | (370,291 | ) | (536,874 | ) | (592,334 | ) | 22,023 | ||||||||||||||
Income tax benefit (expense) | 12,353 | 176,859 | 163,726 | 26,154 | 45,840 | (10,254 | ) | ||||||||||||||||
Net income (loss) | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | $ | (546,494 | ) | $ | 11,769 | ||||||||
Income (loss) attributable to common shareholders | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | $ | (546,494 | ) | $ | 11,769 | ||||||||
Basic (loss) income per common share | $ | 3.07 | $ | 23.73 | $ | (7.05 | ) | $ | (17.45 | ) | $ | (18.72 | ) | $ | 0.40 | ||||||||
Diluted (loss) income per common share | $ | 3.05 | $ | 23.73 | $ | (7.05 | ) | $ | (17.45 | ) | $ | (18.72 | ) | $ | 0.40 |
Successor Company | Predecessor Company | ||||||||||||||||||||||
Period from June 4, 2018 through December 31, | Period from January 1, 2018 through June 3, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||
2018 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||
OTHER DATA: | |||||||||||||||||||||||
Cash flows related to: | |||||||||||||||||||||||
Operating activities | $ | 32,398 | $ | 29,132 | $ | 86,596 | $ | 35,745 | $ | 90,413 | $ | 136,796 | |||||||||||
Investing activities | $ | (33,098 | ) | $ | (14,019 | ) | $ | (25,842 | ) | $ | 83,898 | $ | (7,961 | ) | $ | (15,572 | ) | ||||||
Financing activities | $ | (57,613 | ) | $ | (38,652 | ) | $ | (88,148 | ) | $ | (19,997 | ) | $ | (50,085 | ) | $ | (146,745 | ) | |||||
Capital expenditures | $ | (15,684 | ) | $ | (14,019 | ) | $ | (31,932 | ) | $ | (23,037 | ) | $ | (19,236 | ) | $ | (19,006 | ) | |||||
Successor Company | Predecessor Company | ||||||||||||||||||||||
December 31, 2018 | December 31, 2017 | December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||||||
BALANCE SHEET DATA: | |||||||||||||||||||||||
Total assets | $ | 1,775,152 | $ | 2,027,319 | $ | 2,412,691 | $ | 3,002,388 | $ | 3,717,572 | |||||||||||||
Long-term debt (including current portion) (3) | $ | 1,243,299 | $ | 2,332,209 | $ | 2,384,157 | $ | 2,402,901 | $ | 2,457,258 | |||||||||||||
Total stockholders’ equity (deficit) | $ | 389,829 | $ | (696,115 | ) | $ | (491,738 | ) | $ | 16,032 | $ | 541,580 |
(1) | Impairment charges in 2017, 2016 and 2015 were recorded in connection with our interim and annual impairment testing under ASC 350. See Note 7, “Intangible Assets and Goodwill,” in the consolidated financial statements included elsewhere in this Form 10-K for further discussion. |
(2) | Reorganization items recorded in connection with our chapter 11 cases. See Note 3, “Fresh Start Accounting,” in the consolidated financial statements included elsewhere in this Form 10-K for further discussion. |
(3) | Long-term debt was classified in the Company's liabilities subject to compromise as of December 31, 2017. |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
Successor Company | Predecessor Company | Predecessor Company | Non- GAAP | |||||||||||||||||||||||||||||
Period from June 4, 2018 through December 31, | Period from January 1, 2018 through June 3, | Non-GAAP Combined Period Year Ended December 31, | Year ended December 31, | Year ended December 31, | 2018 vs 2017 Change | 2017 vs 2016 Change | ||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2016 | $ | % | $ | % | ||||||||||||||||||||||||
STATEMENT OF OPERATIONS DATA: | ||||||||||||||||||||||||||||||||
Net revenue | $ | 686,436 | $ | 453,924 | $ | 1,140,360 | $ | 1,135,662 | $ | 1,141,400 | $ | 4,698 | 0.4 | % | $ | (5,738 | ) | -0.5 | % | |||||||||||||
Content costs | 238,888 | 163,885 | 402,773 | 409,213 | 432,077 | (6,440 | ) | -1.6 | % | (22,864 | ) | -5.3 | % | |||||||||||||||||||
Selling, general & administrative expenses | 276,551 | 195,278 | 471,829 | 471,300 | 468,603 | 529 | 0.1 | % | 2,697 | 0.6 | % | |||||||||||||||||||||
Depreciation and amortization | 34,060 | 22,046 | 56,106 | 62,239 | 87,267 | (6,133 | ) | -9.9 | % | (25,028 | ) | -28.7 | % | |||||||||||||||||||
Local marketing agreement fees | 2,471 | 1,809 | 4,280 | 10,884 | 12,824 | (6,604 | ) | -60.7 | % | (1,940 | ) | -15.1 | % | |||||||||||||||||||
Corporate expenses (including stock-based compensation expense) | 31,714 | 17,169 | 48,883 | 59,062 | 40,148 | (10,179 | ) | -17.2 | % | 18,914 | 47.1 | % | ||||||||||||||||||||
Loss (gain) on sale of assets or stations | 103 | 158 | 261 | (2,499 | ) | (95,695 | ) | 2,760 | ** | 93,196 | ** | |||||||||||||||||||||
Impairment of intangible assets and goodwill | — | — | — | 335,909 | 604,965 | (335,909 | ) | ** | (269,056 | ) | ** | |||||||||||||||||||||
Operating income (loss) | 102,649 | 53,579 | 156,228 | (210,446 | ) | (408,789 | ) | 366,674 | ** | 198,343 | -48.5 | % | ||||||||||||||||||||
Reorganization items, net | — | 466,201 | 466,201 | (31,603 | ) | — | ** | ** | ** | ** | ||||||||||||||||||||||
Interest expense | (50,718 | ) | (260 | ) | (50,978 | ) | (126,952 | ) | (138,634 | ) | 75,974 | -59.8 | % | 11,682 | -8.4 | % | ||||||||||||||||
Interest income | 36 | 50 | 86 | 136 | 493 | (50 | ) | -36.8 | % | (357 | ) | -72.4 | % | |||||||||||||||||||
Gain (loss) on early extinguishment of debt | 201 | — | 201 | (1,063 | ) | 8,017 | 1,264 | ** | (9,080 | ) | ** | |||||||||||||||||||||
Other (expense) income, net | (3,096 | ) | (273 | ) | (3,369 | ) | (363 | ) | 2,039 | (3,006 | ) | ** | (2,402 | ) | ** | |||||||||||||||||
Income (loss) from continuing operations before income taxes | 49,072 | 519,297 | 568,369 | (370,291 | ) | (536,874 | ) | 938,660 | ** | 166,583 | ** | |||||||||||||||||||||
Income tax benefit | 12,353 | 176,859 | 189,212 | 163,726 | 26,154 | 25,486 | 15.6 | % | 137,572 | ** | ||||||||||||||||||||||
Net income (loss) | $ | 61,425 | $ | 696,156 | $ | 757,581 | $ | (206,565 | ) | $ | (510,720 | ) | $ | 964,146 | ** | $ | 304,155 | -59.6 | % | |||||||||||||
OTHER DATA: | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 153,835 | $ | 80,512 | $ | 234,347 | $ | 217,751 | $ | 205,867 | $ | 16,596 | 7.6 | % | $ | 11,884 | 5.8 | % |
** | Calculation is not meaningful. |
Predecessor Company | ||||
Period from January 1, 2018 through June 3, 2018 | ||||
Gain on settlement of Liabilities subject to compromise (a) | $ | 726,831 | ||
Fresh start adjustments (b) | (179,291 | ) | ||
Professional fees (c) | (54,386 | ) | ||
Non-cash claims adjustments (d) | (15,364 | ) | ||
Rejected executory contracts (e) | (5,976 | ) | ||
Other (f) | (5,613 | ) | ||
Reorganization items, net | $ | 466,201 |
Successor Company | Predecessor Company | Non- GAAP Combined | 2018 vs 2017 | |||||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | $ Change | % Change | |||||||||||||||||
Bank borrowings – Term Loan | $ | 50,028 | $ | — | $ | 50,028 | $ | — | $ | 50,028 | ** | |||||||||||
7.75% Senior Notes | — | — | — | 43,335 | (43,335 | ) | ** | |||||||||||||||
Bank borrowings – Predecessor Term Loan | — | — | — | 72,362 | (72,362 | ) | ** | |||||||||||||||
Other, including debt issue cost amortization | 690 | 260 | 950 | 11,255 | (10,305 | ) | ** | |||||||||||||||
Interest expense | $ | 50,718 | $ | 260 | $ | 50,978 | $ | 126,952 | $ | (75,974 | ) | ** |
** | Calculation is not meaningful. |
Successor Company | Predecessor Company | Non- GAAP Combined | ||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | 2018 vs 2017 % Change | ||||||||||||||
GAAP net income (loss) | $ | 61,425 | $ | 696,156 | $ | 757,581 | $ | (206,565 | ) | ** | ||||||||
Income tax benefit | (12,353 | ) | (176,859 | ) | (189,212 | ) | (163,726 | ) | 15.6 | % | ||||||||
Non-operating expenses, including net interest expense | 53,777 | 483 | 54,260 | 127,179 | (57.3 | )% | ||||||||||||
Local marketing agreement fees | 2,471 | 1,809 | 4,280 | 10,884 | (60.7 | )% | ||||||||||||
Depreciation and amortization | 34,060 | 22,046 | 56,106 | 62,239 | (9.9 | )% | ||||||||||||
Stock-based compensation expense | 3,404 | 231 | 3,635 | 1,614 | 125.2 | % | ||||||||||||
Loss (gain) on sale of assets or stations | 103 | 158 | 261 | (2,499 | ) | ** | ||||||||||||
Impairment of intangible assets and goodwill | — | — | — | 335,909 | ** | |||||||||||||
Reorganization items, net | — | (466,201 | ) | (466,201 | ) | 31,603 | ** | |||||||||||
Acquisition-related and restructuring costs | 11,194 | 2,455 | 13,649 | 19,492 | ** | |||||||||||||
Franchise and state taxes | (45 | ) | 234 | 189 | 558 | (66.1 | )% | |||||||||||
(Gain) loss on early extinguishment of debt | (201 | ) | — | (201 | ) | 1,063 | ** | |||||||||||
Adjusted EBITDA | $ | 153,835 | $ | 80,512 | $ | 234,347 | $ | 217,751 | 7.6 | % |
** | Calculation is not meaningful. |
Predecessor Company | ||||||||||||||
Year Ended December 31, | 2017 vs 2016 | |||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
7.75% Senior Notes | $ | 43,335 | $ | 47,275 | $ | (3,940 | ) | (8.3 | )% | |||||
Bank borrowings — term loans and revolving credit facilities | 72,362 | 79,451 | (7,089 | ) | (8.9 | )% | ||||||||
Other, including debt issue cost amortization | 11,255 | 11,908 | (653 | ) | (5.5 | )% | ||||||||
Interest expense | $ | 126,952 | $ | 138,634 | $ | (11,682 | ) | (8.4 | )% |
Predecessor Company | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | % Change | |||||||||
GAAP net loss | $ | (206,565 | ) | $ | (510,720 | ) | 59.6 | % | |||
Income tax benefit | (163,726 | ) | (26,154 | ) | ** | ||||||
Non-operating expenses, including net interest expense | 127,179 | 136,102 | (6.6 | )% | |||||||
Local marketing agreement fees | 10,884 | 12,824 | (15.1 | )% | |||||||
Depreciation and amortization | 62,239 | 87,267 | (28.7 | )% | |||||||
Stock-based compensation expense | 1,614 | 2,948 | (45.3 | )% | |||||||
(Gain) loss on sale of assets or stations | (2,499 | ) | (95,695 | ) | (97.4 | )% | |||||
Impairment of intangible assets and goodwill | 335,909 | 604,965 | (44.5 | )% | |||||||
Reorganizations items, net | 31,603 | — | ** | ||||||||
Acquisition-related and restructuring costs | 19,492 | 1,817 | ** | ||||||||
Franchise and state taxes | 558 | 530 | 5.3 | % | |||||||
Gain on early extinguishment of debt | 1,063 | (8,017 | ) | ** | |||||||
Adjusted EBITDA | $ | 217,751 | $ | 205,867 | 5.8 | % | |||||
** Calculation is not meaningful |
Period from June 4, 2018 through December 31, 2018 (Successor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 477,118 | $ | 207,702 | $ | 1,616 | $ | 686,436 | ||||||||
% of total revenue | 69.5 | % | 30.3 | % | 0.2 | % | 100.0 | % |
Period from January 1, 2018 through June 3, 2018 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 303,317 | $ | 149,715 | $ | 892 | $ | 453,924 | ||||||||
% of total revenue | 66.8 | % | 33.0 | % | 0.2 | % | 100.0 | % |
Year Ended December 31, 2017 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 786,963 | $ | 346,165 | $ | 2,534 | $ | 1,135,662 | ||||||||
% of total revenue | 69.3 | % | 30.5 | % | 0.2 | % | 100.0 | % |
Period from June 4, 2018 through December 31, 2018 (Successor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Adjusted EBITDA | $ | 131,509 | $ | 39,743 | $ | (17,417 | ) | $ | 153,835 |
Period from January 1, 2018 through June 3, 2018 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Adjusted EBITDA | $ | 76,009 | $ | 19,210 | $ | (14,707 | ) | $ | 80,512 |
Year Ended December 31, 2017 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Adjusted EBITDA | $ | 197,775 | $ | 54,260 | $ | (34,284 | ) | $ | 217,751 |
Year Ended December 31, 2017 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 786,963 | $ | 346,165 | $ | 2,534 | $ | 1,135,662 | ||||||||
% of total revenue | 69.3 | % | 30.5 | % | 0.2 | % | 100.0 | % | ||||||||
$ Change from year ended December 31, 2016 | $ | (15,433 | ) | $ | 9,555 | $ | 140 | $ | (5,738 | ) | ||||||
% Change from year ended December 31, 2016 | (1.9 | )% | 2.8 | % | 5.8 | % | (0.5 | )% |
Year Ended December 31, 2016 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 802,396 | $ | 336,610 | $ | 2,394 | $ | 1,141,400 | ||||||||
% of total revenue | 70.3 | % | 29.5 | % | 0.2 | % | 100.0 | % |
Year Ended December 31, 2017 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Adjusted EBITDA | $ | 197,775 | $ | 54,260 | $ | (34,284 | ) | $ | 217,751 | |||||||
$ change from year ended December 31, 2016 | $ | (13,569 | ) | $ | 28,897 | $ | (3,444 | ) | $ | 11,884 | ||||||
% change from year ended December 31, 2016 | (6.4 | )% | 113.9 | % | 11.2 | % | 5.8 | % |
Year Ended December 31, 2016 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Adjusted EBITDA | $ | 211,344 | $ | 25,363 | $ | (30,840 | ) | $ | 205,867 |
Period from June 4, 2018 through December 31, 2018 (Successor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
GAAP net income (loss) | $ | 112,385 | $ | 24,713 | $ | (75,673 | ) | $ | 61,425 | |||||||
Income tax benefit | — | — | (12,353 | ) | (12,353 | ) | ||||||||||
Non-operating (income) expense, including net interest expense | (6 | ) | 500 | 53,283 | 53,777 | |||||||||||
Local marketing agreement fees | 2,402 | — | 69 | 2,471 | ||||||||||||
Depreciation and amortization | 16,619 | 14,595 | 2,846 | 34,060 | ||||||||||||
Stock-based compensation expense | — | — | 3,404 | 3,404 | ||||||||||||
Loss (gain) on sale of assets or stations | 104 | (1 | ) | — | 103 | |||||||||||
Loss on early extinguishment of debt | — | — | (201 | ) | (201 | ) | ||||||||||
Acquisition-related and restructuring costs | 5 | (64 | ) | 11,253 | 11,194 | |||||||||||
Franchise and state taxes | — | — | (45 | ) | (45 | ) | ||||||||||
Adjusted EBITDA | $ | 131,509 | $ | 39,743 | $ | (17,417 | ) | $ | 153,835 |
Period from January 1, 2018 through June 3, 2018 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
GAAP net (loss) income | $ | (477,966 | ) | $ | 259,441 | $ | 914,681 | $ | 696,156 | |||||||
Income tax benefit | — | — | (176,859 | ) | (176,859 | ) | ||||||||||
Non-operating (income) expense, including net interest expense | (2 | ) | 204 | 281 | 483 | |||||||||||
Local marketing agreement fees | 1,809 | — | — | 1,809 | ||||||||||||
Depreciation and amortization | 10,251 | 9,965 | 1,830 | 22,046 | ||||||||||||
Stock-based compensation expense | — | — | 231 | 231 | ||||||||||||
Loss on sale of assets or stations | 14 | — | 144 | 158 | ||||||||||||
Reorganization items, net | 541,903 | (251,487 | ) | (756,617 | ) | (466,201 | ) | |||||||||
Acquisition-related and restructuring costs | — | 1,087 | 1,368 | 2,455 | ||||||||||||
Franchise and state taxes | — | — | 234 | 234 | ||||||||||||
Adjusted EBITDA | $ | 76,009 | $ | 19,210 | $ | (14,707 | ) | $ | 80,512 |
Year Ended December 31, 2017 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
GAAP net (loss) income | $ | (185,223 | ) | $ | 28,861 | $ | (50,203 | ) | $ | (206,565 | ) | |||||
Income tax benefit | — | — | (163,726 | ) | (163,726 | ) | ||||||||||
Non-operating expense, including net interest expense | (6 | ) | 537 | 126,648 | 127,179 | |||||||||||
Local marketing agreement fees | 10,884 | — | — | 10,884 | ||||||||||||
Depreciation and amortization | 38,734 | 21,836 | 1,669 | 62,239 | ||||||||||||
Stock-based compensation expense | — | — | 1,614 | 1,614 | ||||||||||||
(Gain) loss on sale of assets or stations | (2,523 | ) | — | 24 | (2,499 | ) | ||||||||||
Reorganization Cost | — | — | 31,603 | 31,603 | ||||||||||||
Impairment of intangible assets and goodwill | 335,909 | — | — | 335,909 | ||||||||||||
Acquisition-related and restructuring costs | — | 3,026 | 16,466 | 19,492 | ||||||||||||
Franchise and state taxes | — | — | 558 | 558 | ||||||||||||
Loss on early extinguishment of debt | — | — | 1,063 | 1,063 | ||||||||||||
Adjusted EBITDA | $ | 197,775 | $ | 54,260 | $ | (34,284 | ) | $ | 217,751 |
Year Ended December 31, 2016 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
GAAP net loss | $ | (363,046 | ) | $ | (8,692 | ) | $ | (138,982 | ) | $ | (510,720 | ) | ||||
Income tax benefit | — | — | (26,154 | ) | (26,154 | ) | ||||||||||
Non-operating expense, including net interest expense | 13 | 122 | 135,967 | 136,102 | ||||||||||||
Local marketing agreement fees | 12,824 | — | — | 12,824 | ||||||||||||
Depreciation and amortization | 54,071 | 31,178 | 2,018 | 87,267 | ||||||||||||
Stock-based compensation expense | — | — | 2,948 | 2,948 | ||||||||||||
Gain on sale of assets or stations | (95,667 | ) | — | (28 | ) | (95,695 | ) | |||||||||
Impairment of intangible assets and goodwill | 603,149 | 1,816 | — | 604,965 | ||||||||||||
Acquisition-related and restructuring costs | — | 939 | 878 | 1,817 | ||||||||||||
Franchise and state taxes | — | — | 530 | 530 | ||||||||||||
Gain on early extinguishment of debt | — | — | (8,017 | ) | (8,017 | ) | ||||||||||
Adjusted EBITDA | $ | 211,344 | $ | 25,363 | $ | (30,840 | ) | $ | 205,867 |
Successor Company | Predecessor Company | ||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | 2017 | 2016 | ||||||||||||
Repayments of borrowings under term loans and revolving credit facilities and adequate protection payments | $ | 56,500 | $ | 37,802 | $ | 81,652 | $ | 20,000 | |||||||
Interest payments | $ | 49,785 | $ | — | $ | 96,225 | $ | 126,515 | |||||||
Capital expenditures | $ | 15,684 | $ | 14,019 | $ | 31,932 | $ | 23,037 |
Successor Company | Predecessor Company | ||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||||||||
Net cash provided by operating activities | $ | 32,398 | $ | 29,132 | $ | 86,596 | $ | 35,745 |
Successor Company | Predecessor Company | ||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||||||||
Net cash (used in) provided by investing activities | $ | (33,098 | ) | $ | (14,019 | ) | $ | (25,842 | ) | $ | 83,898 |
Successor Company | Predecessor Company | ||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year ended December 31, 2016 | ||||||||||||
Net cash used in financing activities | $ | (57,613 | ) | $ | (38,652 | ) | $ | (88,148 | ) | $ | (19,997 | ) |
• | projected operating revenues and expenses over a five-year period; |
• | the estimation of initial and on-going capital expenditures (based on market size); |
• | depreciation on initial and on-going capital expenditures (we calculated depreciation using accelerated double declining balance guidelines over five years for the value of the tangible assets necessary for a radio station to go on the air); |
• | the estimation of working capital requirements (based on working capital requirements for comparable companies); and |
• | amortization of the intangible asset — the FCC license. |
l | Nature, frequency, and severity of current and cumulative financial reporting losses. A pattern of objectively-measured recent financial reporting losses is heavily weighted as a source of negative evidence. Three year cumulative pre-tax losses generally are considered to be significant negative evidence regarding future profitability. Also, the strength and trend of the Company's earnings, as well as other relevant factors, are considered. In certain circumstances, historical information may not be as relevant because of changes in the business operations; | |||
l | Sources of future taxable income. Future reversals of existing temporary differences are heavily-weighted sources of objectively verifiable positive evidence. Projections of future taxable income exclusive of reversing temporary differences and carryforwards are a source of positive evidence only when the projections are combined with a history of recent profits and can be reasonably estimated. Otherwise, these projections are considered inherently subjective and generally will not be sufficient to overcome negative evidence that includes relevant cumulative losses in recent years, particularly if the projected future taxable income is dependent on an anticipated turnaround to profitability that has not yet been achieved. In such cases, we generally give these projections of future taxable income limited weight for the purposes of our valuation allowance assessment pursuant to GAAP; | |||
l | Taxable income in prior carryback year(s), if carryback is permitted under the tax law, would be considered significant positive evidence, depending on availability, when evaluating current period losses; and | |||
l | Tax planning strategies. If necessary and available, tax planning strategies would be implemented to accelerate taxable amounts to utilize expiring carry forwards. These strategies would be a source of additional positive evidence and, depending on their nature, could be heavily weighted. |
Contractual Cash Obligations | Total | Less Than 1 Year | 1 to 3 Years | 3 to 5 years | After 5 Years | ||||||||||||||
Long-term debt (1) | $ | 1,243,299 | $ | 13,000 | $ | 26,000 | $ | 1,204,299 | $ | — | |||||||||
Lease Commitments (2) | 174,757 | 33,830 | 53,400 | 39,516 | 48,011 | ||||||||||||||
Other contractual obligations (3) | 712,323 | 244,489 | 341,342 | 113,221 | 13,271 | ||||||||||||||
Total contractual cash obligations | $ | 2,130,379 | $ | 291,319 | $ | 420,742 | $ | 1,357,036 | $ | 61,282 |
(1) | Based on amounts outstanding, interest rates and required repayments as of December 31, 2018. Assumes that outstanding indebtedness will not be refinanced prior to scheduled maturity. |
(2) | Net of future minimum sublease income. |
(3) | Consists of contractual obligations for goods or services including broadcast rights that are enforceable and legally binding obligations that include all significant terms. |
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
Item 8. | Financial Statements and Supplementary Data |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
/s/ Mary G. Berner | /s/ John Abbot |
President, Chief Executive Officer and Director | Executive Vice President, Treasurer and Chief Financial Officer |
Item 9B. | Other Information |
Item 10. | Directors and Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Plan Category | To be Issued Upon Exercise of Outstanding Options Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) | ||||||
Equity Compensation Plans Approved by Stockholders | 581,124 | $ | 25.47 | 1,041,068 | |||||
Equity Compensation Plans Not Approved by Stockholders | — | — | — | ||||||
Total | 581,124 | $ | 25.47 | 1,041,068 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits, Financial Statement Schedules |
First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (incorporated by reference to Exhibit 2.1 to Cumulus Media Inc.'s Current Report on Form 8-K filed with the SEC on June 4, 2018) | ||
Amended and Restated Certificate of Incorporation of Cumulus Media Inc. (incorporated by reference to Exhibit 3.1 to Cumulus Media Inc.'s Current Report on Form 8-K filed with the SEC on June 4, 2018) | ||
Amended and Restated Bylaws of Cumulus Media Inc. (incorporated by reference to Exhibit 3.2 to Cumulus Media Inc.'s Current Report on Form 8-K filed with the SEC on June 4, 2018) | ||
Form of Global Warrant Certificate (incorporated by reference to Exhibit 4.1 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | ||
Form of Class A common stock certificate (incorporated by reference to Exhibit 4.3 to Cumulus Media Inc.’s Registration Statement on Form S-8 filed with the SEC on June 4, 2018) | ||
Form of Credit Agreement dated as of June 4, 2018, among Holdings, as borrower, the subsidiaries of Holdings party thereto as borrowers, Intermediate Holdings as guarantor, Wilmington Trust, National Association, as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | ||
Warrant Agreement, dated as of June 4, 2018, among the Company, Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.2 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | ||
10.3 * | Form of Indemnification Agreement (incorporated by reference to Exhibit 10.3 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.4 * | Cumulus Media Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.5 * | Form of Restricted Stock Unit Agreement (Non-Senior Executive) (incorporated by reference to Exhibit 10.5 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.6 * | Form of Restricted Stock Unit Agreement (Senior Executive) (incorporated by reference to Exhibit 10.6 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.7 * | Form of Restricted Stock Unit Agreement (Director) (incorporated by reference to Exhibit 10.7 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.8 * | Form of Stock Option Agreement (Non-Senior Executive) (incorporated by reference to Exhibit 10.8 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.9 * | Form of Stock Option Agreement (Senior Executive) (incorporated by reference to Exhibit 10.9 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
10.10 * | Form of Stock Option Agreement (Director) (incorporated by reference to Exhibit 10.10 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on June 4, 2018) | |
Credit Agreement, dated as of August 17, 2018, among certain subsidiaries of Cumulus Media New Holdings Inc., as borrowers, certain lenders, Cumulus Media Intermediate Inc., as a guarantor, and Deutsche Bank AG New York Branch, as a lender and Administrative Agent (incorporated by reference to Exhibit 10.11 to Cumulus Media Inc.’s Quarterly Report on Form 10-Q filed with the SEC on August 20, 2018) | ||
Form of Employment Agreement, dated September 29, 2015, by and between the Company and Mary G. Berner (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 30, 2015) | ||
First Amendment to Employment Agreement, dated March 30, 2016, by and between Cumulus Media Inc. and Richard S. Denning (incorporated by reference to Exhibit 10.2 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on March 31, 2016) | ||
Second Amendment to Employment Agreement, dated August 26, 2016, by and between Cumulus Media Inc. and Richard S. Denning (incorporated by reference to Exhibit 10.1 to Cumulus Media Inc.’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2016) | ||
Third Amendment to Employment Agreement, dated October 25, 2017, by and between Cumulus Media Inc. and Richard S. Denning (incorporated by reference to Exhibit 10.18 to Cumulus Media Inc.’s Annual Report on Form 10-K filed with the SEC on March 29, 2018) | ||
Employment Agreement, dated July 1, 2016, by and between Cumulus Media Inc. and John Abbot (incorporated by reference to Exhibit 10.18 to Cumulus Media Inc.’s Annual Report on Form 10-K filed with the SEC on March 16, 2017) | ||
Amended and Restated Employment Agreement, dated October 25, 2017, by and between Cumulus Media Inc. and John Abbot (incorporated by reference to Exhibit 10.20 to Cumulus Media Inc.’s Annual Report on Form 10-K filed with the SEC on March 29, 2018) | ||
Employment Agreement, dated as of December 13, 2015, by and between Cumulus Media Inc. and Suzanne Grimes (incorporated by reference to Exhibit 10.3 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on March 31, 2016) | ||
First Amendment to Employment Agreement, dated March 30, 2016, by and between Cumulus Media Inc. and Suzanne Grimes (incorporated by reference to Exhibit 10.4 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on March 31, 2016) | ||
Second Amendment to Employment Agreement, dated January 26, 2018, by and between Cumulus Media Inc. and Suzanne Grimes (incorporated by reference to Exhibit 10.1 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on February 1, 2018) | ||
First Amendment to Employment Agreement, dated March 30, 2016, by and between Cumulus Media Inc. and Mary G. Berner (incorporated by reference to Exhibit 10.5 to Cumulus Media Inc.’s Current Report on Form 8-K filed with the SEC on March 31, 2016) | ||
Second Amendment to Employment Agreement, dated October 26, 2017, by and between Cumulus Media Inc. and Mary Berner (incorporated by reference to Exhibit 10.25 to Cumulus Media Inc.’s Annual Report on Form 10-K filed with the SEC on March 29, 2018) | ||
21.1 ** | Subsidiaries. | |
23.1 ** | Consents of PricewaterhouseCoopers LLP. ( Successor and Predecessor Company) | |
31.1 ** | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 ** | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 ** | Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | INS XBRL Instance Document. | |
101.SCH | SCH XBRL Taxonomy Extension Schema Document. | |
101.CAL | CAL XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | DEF XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | LAB XBRL Taxonomy Extension Labels Linkbase Document. | |
101.PRE | PRE XBRL Taxonomy Extension Presentation Linkbase Document. | |
* | Management contract or compensatory plan or arrangement. | |
** | Filed or furnished herewith. |
(b) | Exhibits. See Exhibits above. |
(c) | Financial Statement Schedules. Schedule II – Valuation and Qualifying Accounts. |
Item 16. | Form 10-K Summary |
CUMULUS MEDIA INC. | |||
By | /s/ John Abbot | ||
John Abbot Executive Vice President, Treasurer and Chief Financial Officer |
Signature | Title | Date | ||
/s/ Mary G. Berner | President, Chief Executive Officer and | March 18, 2019 | ||
Mary G. Berner | Director | |||
/s/ John Abbot | Executive Vice President, Treasurer and | March 18, 2019 | ||
John Abbot | Chief Financial Officer (Principal Financial and Accounting Officer) | |||
/s/ Andrew W. Hobson | Director | March 18, 2019 | ||
Andy W. Hobson | ||||
/s/ David M. Baum | Director | March 18, 2019 | ||
David M. Baum | ||||
/s/ Matthew C. Blank | Director | March 18, 2019 | ||
Matthew C. Blank | ||||
/s/ Thomas H. Castro | Director | March 18, 2019 | ||
Thomas H. Castro | ||||
/s/ Joan Hogan Gillman | Director | March 18, 2019 | ||
Joan Hogan Gillman | ||||
/s/ Brian G. Kushner | Director | March 18, 2019 | ||
Brian G. Kushner |
Page | ||
(1) | Financial Statements | |
(2) | Financial Statement Schedule | |
Successor Company | Predecessor Company | |||||||
December 31, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 27,584 | $ | 102,891 | ||||
Restricted cash | 2,454 | 8,999 | ||||||
Accounts receivable, less allowance for doubtful accounts of $5,483 and $4,322 in 2018 and 2017, respectively | 250,111 | 235,247 | ||||||
Trade receivable | 3,390 | 4,224 | ||||||
Assets held for sale | 80,000 | — | ||||||
Prepaid expenses and other current assets | 31,452 | 42,259 | ||||||
Total current assets | 394,991 | 393,620 | ||||||
Property and equipment, net | 235,898 | 191,604 | ||||||
Broadcast licenses | 935,652 | 1,203,809 | ||||||
Other intangible assets, net | 193,535 | 82,994 | ||||||
Goodwill | — | 135,214 | ||||||
Other assets | 15,076 | 20,078 | ||||||
Total assets | $ | 1,775,152 | $ | 2,027,319 | ||||
Liabilities and Stockholders’ Equity (Deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 101,320 | $ | 36,157 | ||||
Trade payable | 2,578 | — | ||||||
Current portion of long-term debt | 13,000 | — | ||||||
Total current liabilities | 116,898 | 36,157 | ||||||
Term loan | 1,230,299 | — | ||||||
Other liabilities | 25,742 | 54 | ||||||
Deferred income taxes | 12,384 | — | ||||||
Total liabilities not subject to compromise | 1,385,323 | 36,211 | ||||||
Liabilities subject to compromise | — | 2,687,223 | ||||||
Total liabilities | 1,385,323 | 2,723,434 | ||||||
Commitments and Contingencies (Note 16) | ||||||||
Stockholders’ equity (deficit): | ||||||||
Predecessor Class A common stock, par value $0.01 per share; 93,750,000 shares authorized; 32,031,054 shares issued, and 29,225,765 shares outstanding at December 31, 2017 | — | 320 | ||||||
Predecessor Class C common stock, par value $0.01 per share; 80,609 shares authorized issued and outstanding at December 31, 2017 | — | 1 | ||||||
Predecessor treasury stock, at cost, 2,806,187 shares at December 31, 2017 | — | (229,310 | ) | |||||
Predecessor additional paid-in-capital | — | 1,626,428 | ||||||
Predecessor accumulated deficit | — | (2,093,554 | ) | |||||
Successor Class A common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 12,995,080 shares issued and outstanding at December 31, 2018 | — | — | ||||||
Successor Class B common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 3,560,604 shares issued and outstanding at December 31, 2018 | — | — | ||||||
Successor additional paid-in-capital | 328,404 | — | ||||||
Successor retained earnings | 61,425 | — | ||||||
Total stockholders’ equity (deficit) | 389,829 | (696,115 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 1,775,152 | $ | 2,027,319 |
Successor Company | Predecessor Company | |||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||
Net revenue | $ | 686,436 | $ | 453,924 | $ | 1,135,662 | $ | 1,141,400 | ||||||||
Operating expenses: | ||||||||||||||||
Content costs | 238,888 | 163,885 | 409,213 | 432,077 | ||||||||||||
Selling, general & administrative expenses | 276,551 | 195,278 | 471,300 | 468,603 | ||||||||||||
Depreciation and amortization | 34,060 | 22,046 | 62,239 | 87,267 | ||||||||||||
LMA fees | 2,471 | 1,809 | 10,884 | 12,824 | ||||||||||||
Corporate expenses (including stock-based compensation expense of $3,404, $231, $1,614, and $2,948, respectively) | 31,714 | 17,169 | 59,062 | 40,148 | ||||||||||||
Loss (gain) on sale of assets or stations | 103 | 158 | (2,499 | ) | (95,695 | ) | ||||||||||
Impairment of intangible assets and goodwill | — | — | 335,909 | 604,965 | ||||||||||||
Total operating expenses | 583,787 | 400,345 | 1,346,108 | 1,550,189 | ||||||||||||
Operating income (loss) | 102,649 | 53,579 | (210,446 | ) | (408,789 | ) | ||||||||||
Non-operating (expense) income: | ||||||||||||||||
Reorganization items, net | — | 466,201 | (31,603 | ) | — | |||||||||||
Interest expense | (50,718 | ) | (260 | ) | (126,952 | ) | (138,634 | ) | ||||||||
Interest income | 36 | 50 | 136 | 493 | ||||||||||||
Gain (loss) on early extinguishment of debt | 201 | — | (1,063 | ) | 8,017 | |||||||||||
Other (expense) income, net | (3,096 | ) | (273 | ) | (363 | ) | 2,039 | |||||||||
Total non-operating (expense) income, net | (53,577 | ) | 465,718 | (159,845 | ) | (128,085 | ) | |||||||||
Income (loss) before income taxes | 49,072 | 519,297 | (370,291 | ) | (536,874 | ) | ||||||||||
Income tax benefit | 12,353 | 176,859 | 163,726 | 26,154 | ||||||||||||
Net income (loss) | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | ||||||
Basic and diluted earnings (loss) per common share (see Note 14, “Earnings (loss) Per Share”): | ||||||||||||||||
Basic: Income (loss) per share | $ | 3.07 | $ | 23.73 | $ | (7.05 | ) | $ | (17.45 | ) | ||||||
Diluted: Income (loss) per share | $ | 3.05 | $ | 23.73 | $ | (7.05 | ) | $ | (17.45 | ) | ||||||
Weighted average basic common shares outstanding | 20,028,227 | 29,338,329 | 29,306,374 | 29,270,455 | ||||||||||||
Weighted average diluted common shares outstanding | 20,164,638 | 29,338,329 | 29,306,374 | 29,270,455 |
Class A Common Stock | Class B Common Stock | Class C Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Value | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Total | |||||||||||||||||||||||||||||||
Balance at December 31, 2015 (Predecessor) | 31,987,862 | $ | 320 | 80,609 | $ | 1 | 2,805,743 | $ | (229,310 | ) | $ | 1,621,865 | $ | (1,376,844 | ) | $ | 16,032 | ||||||||||||||||||||||||
Net loss | — | (510,720 | ) | (510,720 | ) | ||||||||||||||||||||||||||||||||||||
Conversion of equity upon exercise of warrants | 43,192 | — | — | — | — | — | — | — | 2 | — | 2 | ||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | — | — | — | 2,948 | — | 2,948 | ||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | 444 | — | — | — | — | ||||||||||||||||||||||||||||||
Balance at December 31, 2016 (Predecessor) | 32,031,054 | $ | 320 | — | $ | — | 80,609 | $ | 1 | 2,806,187 | $ | (229,310 | ) | $ | 1,624,815 | $ | (1,887,564 | ) | $ | (491,738 | ) | ||||||||||||||||||||
Net loss | — | — | — | — | (206,565 | ) | (206,565 | ) | |||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | — | — | — | 1,614 | — | 1,614 | ||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | (1 | ) | 575 | 574 | |||||||||||||||||||||||||||||
Balance at December 31, 2017 (Predecessor) | 32,031,054 | $ | 320 | — | $ | — | 80,609 | $ | 1 | 2,806,187 | $ | (229,310 | ) | $ | 1,626,428 | $ | (2,093,554 | ) | $ | (696,115 | ) | ||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | (44,000 | ) | (44,000 | ) | ||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | 247 | — | 247 | ||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | 231 | — | 231 | ||||||||||||||||||||||||||||||
Balance at June 3, 2018 (Predecessor) | 32,031,054 | $ | 320 | — | $ | — | 80,609 | $ | 1 | 2,806,187 | $ | (229,310 | ) | $ | 1,626,906 | $ | (2,137,554 | ) | $ | (739,637 | ) | ||||||||||||||||||||
Implementation of Plan and Application of Fresh Start Accounting: | |||||||||||||||||||||||||||||||||||||||||
Cancellation of Predecessor equity | (32,031,054 | ) | (320 | ) | — | — | (80,609 | ) | (1 | ) | (2,806,187 | ) | 229,310 | (1,626,906 | ) | — | (1,397,917 | ) | |||||||||||||||||||||||
Elimination of accumulated deficit | — | — | — | — | — | — | — | — | — | 2,137,554 | 2,137,554 | ||||||||||||||||||||||||||||||
Issuance of Successor common stock | 11,052,211 | — | 5,218,209 | — | — | — | — | — | 264,394 | — | 264,394 | ||||||||||||||||||||||||||||||
Issuance of Successor warrants | — | — | — | — | — | — | — | — | 60,606 | — | 60,606 | ||||||||||||||||||||||||||||||
Balance at June 4, 2018 (Successor) | 11,052,211 | $ | — | 5,218,209 | $ | — | — | $ | — | — | $ | — | $ | 325,000 | $ | — | $ | 325,000 | |||||||||||||||||||||||
Net income | 61,425 | 61,425 | |||||||||||||||||||||||||||||||||||||||
Conversion of Class B common stock | 1,692,849 | — | (1,692,849 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Exercise of warrants | 221,657 | — | 35,244 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Issuance of Successor common stock | 28,363 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | — | — | 3,404 | — | 3,404 | ||||||||||||||||||||||||||||
Balance at December 31, 2018 (Successor) | 12,995,080 | $ | — | 3,560,604 | $ | — | — | $ | — | — | $ | — | $ | 328,404 | $ | 61,425 | $ | 389,829 |
Successor Company | Predecessor Company | |||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 34,060 | 22,046 | 62,239 | 87,267 | ||||||||||||
Amortization of debt issuance costs/discounts | 71 | — | 9,394 | 9,961 | ||||||||||||
Provision for doubtful accounts | 5,313 | 5,993 | 5,807 | 1,103 | ||||||||||||
Loss (gain) on sale of assets or stations | 103 | 158 | (2,499 | ) | (95,695 | ) | ||||||||||
Non-cash reorganization items, net | — | (523,651 | ) | 25,921 | — | |||||||||||
Impairment of intangible assets and goodwill | — | — | 335,909 | 604,965 | ||||||||||||
Impairment charges -- equity interest in Next Radio and Pulser Media | 3,170 | — | — | — | ||||||||||||
Deferred income taxes | (27,411 | ) | (179,455 | ) | (168,226 | ) | (27,831 | ) | ||||||||
Stock-based compensation expense | 3,404 | 231 | 1,614 | 2,948 | ||||||||||||
(Gain) loss on early extinguishment of debt | (201 | ) | — | 1,063 | (8,017 | ) | ||||||||||
Other | 153 | — | — | — | ||||||||||||
Changes in assets and liabilities (excluding acquisitions and dispositions): | ||||||||||||||||
Accounts receivable | (39,699 | ) | 12,697 | (9,469 | ) | 10,740 | ||||||||||
Trade receivable | 1,831 | (997 | ) | 761 | (839 | ) | ||||||||||
Prepaid expenses and other current assets | (4,700 | ) | (5,831 | ) | (7,655 | ) | (7,017 | ) | ||||||||
Other assets | 3,981 | (436 | ) | (1,451 | ) | (1,106 | ) | |||||||||
Accounts payable and accrued expenses | (10,077 | ) | 7,777 | 46,587 | (16,816 | ) | ||||||||||
Trade payable | (676 | ) | 190 | (1,486 | ) | 176 | ||||||||||
Other liabilities | 1,651 | (5,746 | ) | (5,348 | ) | (13,374 | ) | |||||||||
Net cash provided by operating activities | 32,398 | 29,132 | 86,596 | 35,745 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds from sale of assets or stations | 586 | — | 6,090 | 106,935 | ||||||||||||
Acquisition | (18,000 | ) | — | — | — | |||||||||||
Capital expenditures | (15,684 | ) | (14,019 | ) | (31,932 | ) | (23,037 | ) | ||||||||
Net cash (used in) provided by investing activities | (33,098 | ) | (14,019 | ) | (25,842 | ) | 83,898 | |||||||||
Cash flows from financing activities: | ||||||||||||||||
Repayment of borrowings under term loan and revolving credit facilities | (56,500 | ) | — | (81,652 | ) | (20,000 | ) | |||||||||
Adequate protection payments on term loan | — | (37,802 | ) | (6,405 | ) | — | ||||||||||
Proceeds from exercise of warrants | — | — | — | 3 | ||||||||||||
Financing costs | (1,113 | ) | (850 | ) | (91 | ) | — | |||||||||
Net cash used in financing activities | (57,613 | ) | (38,652 | ) | (88,148 | ) | (19,997 | ) | ||||||||
(Decrease) increase in cash and cash equivalents | (58,313 | ) | (23,539 | ) | (27,394 | ) | 99,646 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 88,351 | 111,890 | 139,284 | 39,638 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 30,038 | $ | 88,351 | $ | 111,890 | $ | 139,284 |
Successor Company | Predecessor Company | ||||||||||||||
Period from June 4, 2018 through December 31, | Period from January 1, 2018 through June 3, | Year Ended December 31, | Year Ended December 31, | ||||||||||||
2018 | 2018 | 2017 | 2016 | ||||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||
Interest paid | $ | 49,785 | $ | — | $ | 96,225 | $ | 126,515 | |||||||
Income taxes paid | 7,266 | 1,992 | 3,781 | 4,451 | |||||||||||
Supplemental disclosures of non-cash flow information: | |||||||||||||||
Trade revenue | $ | 26,516 | $ | 18,973 | $ | 40,080 | $ | 37,691 | |||||||
Trade expense | 27,098 | 17,964 | 38,633 | 36,158 | |||||||||||
Transfer of deposit from escrow - WKQX acquisition | 4,750 | — | — | — | |||||||||||
Transfer of deposit from escrow - Los Angeles land and building sale | — | — | — | 6,000 | |||||||||||
Transfer of property and equipment from assets held for sale | — | — | 30,150 | — | |||||||||||
Supplemental disclosures of non-cash reorganization items impact on changes in assets and liabilities: | |||||||||||||||
Accounts receivable | $ | — | $ | (11 | ) | $ | — | $ | — | ||||||
Prepaid expenses and other current assets | — | 21,077 | — | — | |||||||||||
Property and equipment | — | (121,732 | ) | — | — | ||||||||||
Other intangible assets, goodwill and other assets | — | 283,217 | — | — | |||||||||||
Accounts payable, accrued expenses and other liabilities | — | (36,415 | ) | — | — | ||||||||||
Cancellation of 7.75% Senior Notes | — | (610,000 | ) | — | — | ||||||||||
Cancellation of Predecessor Company Term Loan | — | (1,684,407 | ) | — | — | ||||||||||
Issuance of Successor Company Term Loan | — | 1,300,000 | — | — | |||||||||||
Cancellation of Predecessor Company stockholders' equity | — | 649,620 | — | — | |||||||||||
Issuance of Successor Company stockholders' equity | — | (325,000 | ) | — | — | ||||||||||
Reconciliation of cash and cash equivalents and restricted cash to the Consolidated Balance Sheet: | |||||||||||||||
Cash and cash equivalents | $ | 27,584 | $ | 50,046 | $ | 102,891 | $ | 131,259 | |||||||
Restricted cash | 2,454 | 38,305 | 8,999 | 8,025 | |||||||||||
Total cash and cash equivalents and restricted cash | $ | 30,038 | $ | 88,351 | $ | 111,890 | $ | 139,284 |
• | Amended and Restated Credit Agreement, dated as of December 23, 2013, by and among Cumulus Media Inc., Cumulus Media Holdings Inc., as borrower, certain lenders, JPMorgan Chase Bank, N.A., as lender and Administrative Agent, Royal Bank of Canada and Macquarie Capital (USA) Inc., as co-syndication agents, and Credit Suisse AG, Cayman Islands Branch, Fifth Third Bank, Goldman Sachs Bank USA and ING Capital LLC, as co-documentation agents (“the Canceled Credit Agreement”), pursuant to which Old Cumulus had outstanding term loans in the amount of $1.7 billion (the “Predecessor Term Loan”); |
• | Indenture, dated as of May 13, 2011, among Cumulus Media Inc., the Guarantors named therein and U.S. Bank National Association, as Trustee, as supplemented, and pursuant to which Old Cumulus had outstanding senior notes with a face value of $610.0 million (“7.75% Senior Notes”); and |
• | Rights Agreement, dated as of June 5, 2017, between Cumulus Media Inc. and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”). |
• | In accordance with the Plan, on the Effective Date each share of Old Cumulus’s Class A common stock, par value $0.01 per share (the “old Class A common stock”), Class B common stock, par value $0.01 per share (the “old Class B common stock”), and Class C common stock, par value $0.01 per share (the "old Class C common stock" and together with the old Class A common stock and the old Class B common stock, the “old common stock”) outstanding immediately prior to the Effective Date, including all stock options, warrants or other rights, including rights issued under the Rights Agreement, to purchase such old common stock, were extinguished, canceled and discharged, and each such share, option or warrant has no further force or effect. Furthermore, all of Old Cumulus’s equity award agreements under prior incentive plans, and the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect; |
• | On the Effective Date, the Company’s certificate of incorporation was amended and restated to authorize the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0000001 per share (“new Class A common stock”), 100,000,000 shares of Class B common stock, par value $0.0000001 per share (“new Class B common stock” and, together with the new Class A common stock, the “new common stock”) and 100,000,000 shares of preferred stock (see Note 11, “Stockholders’ Equity”); |
• | On the Effective Date, the Company issued 11,052,211 shares of new Class A common stock and 5,218,209 shares of new Class B common stock; |
• | On the Effective Date, the Company issued 3,016,853 Series 1 warrants to purchase shares of new common stock; |
• | After the Effective Date, the Company also issued or will issue 712,736 Series 2 warrants (the “Series 2 warrants” and, together with the Series 1 warrants, the “Warrants”) to purchase shares of new common stock; |
• | The Company entered into a $1.3 billion credit agreement (the “Credit Agreement” or “Term Loan”) with Wilmington Trust, N.A., as administrative agent (the “Agent”) and the lenders named therein (see Note 9, “Long-Term Debt”); |
• | The holders of claims with respect to the Predecessor Term Loan received the following in full and complete satisfaction of their respective claims thereunder: (i) a pro rata share of the Term Loan and (ii) a pro rata share of 83.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Long-Term Incentive Plan (the “Incentive Plan”) (see Note 11, “Stockholders’ Equity”); |
• | The holders of unsecured claims against Old Cumulus including claims arising from the 7.75% Senior Notes received, in the aggregate, 16.5% of the new common stock and warrants issued, subject to dilution by certain issuances under the Incentive Plan; |
• | The Company’s board of directors was reconstituted to consist of the Company’s President and Chief Executive Officer and six independent directors selected by the holders of the Predecessor Term Loan; and |
• | Intercompany Claims and Interests (as defined in the Plan) were canceled without any distribution on account of such Intercompany Claims and Interests. |
Enterprise Value | $ | 1,675,000 | |
Less: Cash balance difference (1) | (20,000 | ) | |
Less: Effect of deferred tax liability (2) | (30,000 | ) | |
Plus: Fair value of non-debt current liabilities | 114,573 | ||
Plus: Fair value of non-debt long term liabilities | 63,921 | ||
Reorganization value | $ | 1,803,494 |
Predecessor Company As of June 3, 2018 | Reorganization Adjustments | Fresh Start Adjustments | Successor Company As of June 4, 2018 | ||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 108,480 | $ | (58,434 | ) | (1) | $ | — | $ | 50,046 | |||||
Restricted cash | 13,720 | 24,585 | (2) | — | 38,305 | ||||||||||
Accounts receivable | 215,724 | — | — | 215,724 | |||||||||||
Trade receivable | 5,221 | — | — | 5,221 | |||||||||||
Prepaid expenses and other current assets | 49,912 | (19,990 | ) | (3) | — | 29,922 | |||||||||
Total current assets | 393,057 | (53,839 | ) | — | 339,218 | ||||||||||
Property and equipment, net | 193,574 | — | 121,732 | (12) | 315,306 | ||||||||||
Broadcast licenses | 1,203,809 | — | (285,309 | ) | (13) | 918,500 | |||||||||
Other intangible assets, net | 75,056 | — | 137,402 | (13) | 212,458 | ||||||||||
Goodwill | 135,214 | — | (135,214 | ) | (14) | — | |||||||||
Other assets | 18,012 | — | — | 18,012 | |||||||||||
Total assets | $ | 2,018,722 | $ | (53,839 | ) | $ | (161,389 | ) | $ | 1,803,494 | |||||
Liabilities and Stockholders’ Equity (Deficit) | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable and accrued expenses | $ | 108,448 | $ | 6,253 | (4) | $ | (128 | ) | (15) | $ | 114,573 | ||||
Current portion of Term Loan | — | 13,000 | (5) | — | 13,000 | ||||||||||
Total current liabilities | 108,448 | 19,253 | (128 | ) | 127,573 | ||||||||||
Term loan | — | 1,268,983 | (5) | 18,017 | (16) | 1,287,000 | |||||||||
Other liabilities | 2,801 | 21,312 | (6) | 13 | (17) | 24,126 | |||||||||
Deferred income taxes | — | 50,437 | (7) | (10,642 | ) | (18) | 39,795 | ||||||||
Total non-current liabilities | 2,801 | 1,340,732 | 7,388 | 1,350,921 | |||||||||||
Liabilities subject to compromise | 2,647,110 | (2,647,110 | ) | (8) | — | — | |||||||||
Total liabilities | 2,758,359 | (1,287,125 | ) | 7,260 | 1,478,494 | ||||||||||
Stockholders’ (deficit) equity: | |||||||||||||||
Predecessor Class A common stock | 320 | (320 | ) | (9) | — | — | |||||||||
Predecessor Class C common stock | 1 | (1 | ) | (9) | — | — | |||||||||
Predecessor treasury stock | (229,310 | ) | 229,310 | (9) | — | — | |||||||||
Predecessor additional paid-in-capital | 1,626,906 | (1,626,906 | ) | (9) | — | — | |||||||||
Successor Class A common stock | — | — | — | — | |||||||||||
Successor Class B common stock | — | — | — | — | |||||||||||
Successor additional-paid-in-capital | — | 325,000 | (10) | — | 325,000 | ||||||||||
(Accumulated deficit) retained earnings | (2,137,554 | ) | 2,306,203 | (11) | (168,649 | ) | (19) | — | |||||||
Total stockholders’ (deficit) equity | (739,637 | ) | 1,233,286 | (168,649 | ) | 325,000 | |||||||||
Total liabilities and stockholders’ (deficit) | $ | 2,018,722 | $ | (53,839 | ) | $ | (161,389 | ) | $ | 1,803,494 |
Payment of professional fees | $ | 3,118 | |||
Adequate protection payment | 1,326 | ||||
Payment of contract cure claims | 20,341 | ||||
Funding of professional fee escrow amount | 32,517 | ||||
Other fees and expenses | 1,132 | ||||
Net cash payments | $ | 58,434 |
2. | Reflects net additions to restricted cash giving effect to the funding of professional fee escrow account for professional fees accrued and the payment of restructuring fees (dollars in thousands): |
Funding of professional fee escrow account | $ | 32,517 | ||||
Payment of restructuring fees | (7,932 | ) | ||||
Net changes to restricted cash | $ | 24,585 |
Accounts payable and accrued expenses | $ | 66,515 | ||||
Other liabilities | 21,364 | |||||
Deferred tax liability | 237,247 | |||||
Accounts payable, accrued expenses and other liabilities | 325,126 | |||||
Predecessor Term Loan | 1,684,407 | |||||
7.75% Senior Notes | 610,000 | |||||
Accrued interest | 27,577 | |||||
Long-term debt and accrued interest | 2,321,984 | |||||
Total Liabilities subject to compromise | $ | 2,647,110 |
Liabilities subject to compromise | $ | 2,647,110 | |||||||
Cash payments at the Effective Date | (33,657 | ) | |||||||
Liabilities reinstated at the Effective Date: | |||||||||
Accounts payable | (3,215 | ) | |||||||
Other liabilities | (21,160 | ) | |||||||
Deferred tax liability | (50,437 | ) | |||||||
Total liabilities reinstated at the Effective Date | (74,812 | ) | |||||||
Adjustment for deferred tax liability impact | (186,810 | ) | |||||||
Fair value of common stock issued to Predecessor Term Loan holders, 7.75% Senior Notes holders and unsecured creditors | (264,394 | ) | |||||||
Fair value of warrants issued to Predecessor Term Loan holders, 7.75% Senior Notes holders and unsecured creditors | (60,606 | ) | |||||||
Fair value of Term Loan provided by Predecessor Term Loan holders | (1,300,000 | ) | |||||||
Gain on settlement of Liabilities subject to compromise | $ | 726,831 |
9. | Pursuant to the Plan, all equity interests of the Predecessor that were issuable or issued and outstanding immediately prior to the Effective Date were canceled. The elimination of the carrying value of the canceled equity interests was recorded as an offset to retained earnings (accumulated deficit). |
10. | In settlement of the Predecessor Term Loan, 7.75% Senior Notes, and other general unsecured claims, the Company issued new common stock and Successor warrants. |
11. | Adjustment made to accumulated deficit consisted of the following (dollars in thousands): |
Cancellation of Predecessor equity | $ | 1,397,917 | ||||
Gain on settlement of Liabilities subject to compromise | 726,831 | |||||
Income tax benefit | 184,005 | |||||
Other items | (2,550 | ) | ||||
Total adjustment to retained earnings | $ | 2,306,203 |
Estimated Useful Life | Successor Company | Predecessor Company | ||||||||||
Land | N/A | $ | 159,464 | $ | 86,287 | |||||||
Broadcasting and other equipment | 3 to 30 years | 58,369 | 248,607 | |||||||||
Computer and capitalized software costs | 1 to 3 years | 11,791 | 34,924 | |||||||||
Furniture and fixtures | 5 years | 4,432 | 15,571 | |||||||||
Leasehold improvements | 5 years | 24,089 | 46,471 | |||||||||
Buildings | 9 to 20 years | 26,964 | 51,994 | |||||||||
Construction in progress | N/A | 30,197 | 30,197 | |||||||||
315,306 | 514,051 | |||||||||||
Less: accumulated depreciation | — | (320,477 | ) | |||||||||
Property and equipment, net | $ | 315,306 | $ | 193,574 |
Successor Company | Predecessor Company | Difference | |||||||||||||||
Broadcast licenses | $ | 918,500 | $ | 1,203,809 | $ | (285,309 | ) | ||||||||||
Other intangible assets | 212,458 | 75,056 | 137,402 | ||||||||||||||
$ | 1,130,958 | $ | 1,278,865 | $ | (147,907 | ) |
a. | Broadcast licenses ($918.5 million as of June 4, 2018): The fair value of broadcast licenses was determined using the Greenfield approach, a derivation of the income approach that isolates the income that is properly attributable to the license alone. It is based upon modeling a hypothetical “Greenfield” build-up to a normalized enterprise that, by design, lacks inherent goodwill and has other assets that have essentially been paid for or added as part of the build-up process. |
b. | Other intangible assets ($212.5 million as of June 4, 2018): |
i. | Broadcasting, affiliate and producer relationships ($162.0 million as of June 4, 2018): The customer relationship intangibles including broadcasting and affiliate and producer relationships were valued utilizing the excess earning method, a derivation of the income approach that considers cash flows related to the customers after accounting for a fair return to the other supporting assets of the business. |
ii. | Trademarks and trade names ($21.2 million as of June 4, 2018): In estimating the fair value of trademarks and trade names, management used the relief from royalty method, a derivation of the income approach, for analyzing the trade names. |
iii. | Tower income contracts ($15.1 million as of June 4, 2018): The fair value of these were determined utilizing a discounted cash flow analysis. |
iv. | Advertiser backlog ($12.0 million as of June 4, 2018): The fair value of advertiser backlog was analyzed using the multi-period excess earning method. Estimated duration of advertiser backlog as of the Effective Date was used as a point of recognition for net sales attributable to that backlog. |
v. | Leasehold intangible asset, net ($2.2 million as of June 4, 2018): The fair value of leasehold interests was determined utilizing a discounted cash flow analysis, wherein leases for real property were assessed for favorable or unfavorable contract rental rates. |
Property and equipment fair value adjustment | $ | 121,732 | |||
Intangible assets fair value adjustment | (147,907 | ) | |||
Goodwill adjustment | (135,214 | ) | |||
Term Loan fair value adjustment | (18,017 | ) | |||
Other assets and liabilities fair value adjustments | 115 | ||||
Net loss on fresh start adjustments | $ | (179,291 | ) | ||
Tax impact on fresh start adjustments | 10,642 | ||||
Net impact on retained earnings | $ | (168,649 | ) |
Predecessor Company | ||||
Period from January 1, 2018 through June 3, 2018 | ||||
Gain on settlement of Liabilities subject to compromise (a) | $ | 726,831 | ||
Fresh start adjustments (b) | (179,291 | ) | ||
Professional fees (c) | (54,386 | ) | ||
Non-cash claims adjustments (d) | (15,364 | ) | ||
Rejected executory contracts (e) | (5,976 | ) | ||
Other (f) | (5,613 | ) | ||
Reorganization items, net | $ | 466,201 |
Successor Company | Predecessor Company | ||||||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||||||||||||
Cumulus Radio Station Group | |||||||||||||||||||||
Advertising revenues (broadcast, digital, non-traditional revenue (“NTR”) and trade) | $ | 474,157 | $ | 301,804 | $ | 783,034 | $ | 798,587 | |||||||||||||
Non-advertising revenues (tower rental and other) | 2,961 | 1,513 | 3,929 | 3,809 | |||||||||||||||||
Total Cumulus Radio Station Group revenue | $ | 477,118 | $ | 303,317 | $ | 786,963 | $ | 802,396 | |||||||||||||
Westwood One | |||||||||||||||||||||
Advertising revenues (broadcast, digital and trade) | $ | 199,912 | $ | 143,215 | $ | 326,901 | $ | 320,001 | |||||||||||||
Non-advertising revenues (license fees and other) | 7,790 | 6,500 | 19,264 | 16,609 | |||||||||||||||||
Total Westwood One revenue | $ | 207,702 | $ | 149,715 | $ | 346,165 | $ | 336,610 | |||||||||||||
Other (1) | $ | 1,616 | $ | 892 | $ | 2,534 | $ | 2,394 | |||||||||||||
Total Revenue | $ | 686,436 | $ | 453,924 | $ | 1,135,662 | $ | 1,141,400 |
(1) | Other is comprised of revenue from certain digital commerce and broadcast software sales and services. |
Successor Company | Predecessor Company | ||||||||
Estimated Useful Life | As of December 31, 2018 | As of December 31, 2017 | |||||||
Land | N/A | $ | 79,670 | $ | 86,308 | ||||
Broadcasting and other equipment | 3 to 30 years | 77,812 | 240,740 | ||||||
Computer and capitalized software costs | 1 to 3 years | 17,681 | 29,793 | ||||||
Furniture and fixtures | 5 years | 5,269 | 15,278 | ||||||
Leasehold improvements | 5 years | 25,812 | 42,504 | ||||||
Buildings | 9 to 20 years | 28,689 | 51,549 | ||||||
Construction in progress | N/A | 15,946 | 32,463 | ||||||
250,879 | 498,635 | ||||||||
Less: accumulated depreciation | (14,981 | ) | (307,031 | ) | |||||
$ | 235,898 | $ | 191,604 |
Cumulus Radio Station Group | Westwood One | Consolidated | |||||||||||||||
Balance as of January 1, 2018 (Predecessor Company) | |||||||||||||||||
Goodwill | $ | 1,278,526 | $ | 304,280 | $ | 1,582,806 | |||||||||||
Accumulated impairment losses | (1,278,526 | ) | (169,066 | ) | (1,447,592 | ) | |||||||||||
Balance as of January 1, 2018 (Predecessor Company) | $ | — | $ | 135,214 | $ | 135,214 | |||||||||||
Balance as of June 3, 2018 (Predecessor Company) | |||||||||||||||||
Goodwill | $ | 1,278,526 | $ | 304,280 | $ | 1,582,806 | |||||||||||
Accumulated impairment losses | (1,278,526 | ) | (169,066 | ) | (1,447,592 | ) | |||||||||||
Balance as of June 3, 2018 (Predecessor Company) | $ | — | $ | 135,214 | $ | 135,214 | |||||||||||
Impact of fresh start accounting | — | (135,214 | ) | (135,214 | ) | ||||||||||||
Balance as of June 4, 2018 (Successor Company) | $ | — | $ | — | $ | — |
Intangible Assets: | Indefinite-Lived | Definite-Lived | Total | ||||||||||||||
Balance as of January 1, 2018 (Predecessor Company) | $ | 1,203,809 | $ | 82,994 | $ | 1,286,803 | |||||||||||
Dispositions | — | — | — | ||||||||||||||
Amortization | — | (7,938 | ) | (7,938 | ) | ||||||||||||
Balance as of June 3, 2018 (Predecessor Company) | $ | 1,203,809 | $ | 75,056 | $ | 1,278,865 | |||||||||||
Impact of fresh start accounting | (264,109 | ) | 116,202 | (147,907 | ) | ||||||||||||
Balance as of June 4, 2018 (Successor Company) | $ | 939,700 | $ | 191,258 | $ | 1,130,958 | |||||||||||
Disposals | (340 | ) | (22 | ) | (362 | ) | |||||||||||
Amortization | — | (18,885 | ) | (18,885 | ) | ||||||||||||
Acquisitions | 17,476 | — | 17,476 | ||||||||||||||
Balance as of December 31, 2018 (Successor Company) | $ | 956,836 | $ | 172,351 | $ | 1,129,187 |
2019 | $ | 25,307 | |
2020 | 20,312 | ||
2021 | 20,211 | ||
2022 | 20,111 | ||
2023 | 16,377 | ||
Thereafter | 70,033 | ||
Total other intangibles, net | $ | 172,351 |
• | projected operating revenues and expenses over a five-year period; |
• | the estimation of initial and on-going capital expenditures (based on market size); |
• | depreciation on initial and on-going capital expenditures (the Company calculated depreciation using accelerated double declining balance guidelines over five years for the value of the tangible assets necessary for a radio station to go on the air); |
• | the estimation of working capital requirements (based on working capital requirements for comparable companies); and |
• | amortization of the intangible asset — the FCC license. |
Successor Company | Predecessor Company | |||||||
December 31, 2018 | December 31, 2017 | |||||||
Accrued employee costs | $ | 23,599 | $ | 9,528 | ||||
Accrued third party content costs | 28,963 | 5,205 | ||||||
Accounts payable | 11,695 | 1,928 | ||||||
Accrued other | 37,063 | 19,496 | ||||||
Total accounts payable and accrued expenses | $ | 101,320 | $ | 36,157 |
Successor Company | Predecessor Company | |||||||
December 31, 2018 | December 31, 2017 | |||||||
Predecessor Term Loan | $ | — | $ | 1,722,209 | ||||
7.75% Senior Notes | — | 610,000 | ||||||
Long-term debt, net subject to compromise | $ | — | $ | 2,332,209 | ||||
Less: Amounts reclassified to liabilities subject to compromise | — | (2,332,209 | ) | |||||
Term Loan | $ | 1,230,299 | $ | — | ||||
Plus: Current portion | 13,000 | — | ||||||
Total long-term debt | $ | 1,243,299 | $ | — |
2019 | $ | 13,000 | |
2020 | 13,000 | ||
2021 | 13,000 | ||
2022 | 1,204,299 | ||
$ | 1,243,299 |
Successor Company | Predecessor Company | |||||||||
December 31, 2018 | December 31, 2017 | |||||||||
Term Loan: | ||||||||||
Gross value | $ | 1,243,299 | $ | — | ||||||
Fair value - Level 2 | $ | 1,182,688 | $ | — | ||||||
Predecessor Term Loan: | ||||||||||
Gross value | $ | — | $ | 1,722,209 | ||||||
Fair value - Level 2 | $ | — | $ | 1,481,100 | ||||||
7.75% Senior Notes: | ||||||||||
Gross value | $ | — | $ | 610,000 | ||||||
Fair value - Level 2 | $ | — | $ | 105,988 |
a. | the retention or dismissal of outside auditors by the Company; |
b. | any dividends or distributions to the stockholders of the Company; |
c. | any material sale of assets, recapitalization, merger, business combination, consolidation, exchange of stock or other similar reorganization involving the Company or any of its subsidiaries; |
d. | the adoption of any new or amended charter; |
e. | other than in connection with any management equity or similar plan adopted by the Board, any authorization or issuance of equity interests, or any security or instrument convertible into or exchangeable for equity interests, in the Company or any of its subsidiaries; and |
f. | the liquidation of the Company or any of its subsidiaries. |
i. | 12,995,080 shares designated as Class A common stock; |
ii. | 3,560,604 shares designated as Class B common stock |
i. | 93,750,000 shares designated as Class A common stock; |
ii. | 75,000,000 shares designated as Class B common stock; |
iii. | 80,609 shares designated as Class C common stock, and |
iv. | 100,000,000 shares of preferred stock. |
• | stock options (including incentive options and nonstatutory options); |
• | restricted stock; |
• | stock appreciation rights; |
• | dividend equivalents; |
• | other stock-based awards; |
• | performance awards; and |
• | cash awards. |
Successor Company | |||||||||||
Period from June 4, 2018 through December 31, 2018 | |||||||||||
Grants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Weighted Average Grant Date Fair Value | ||||||||
Stock option grants | 581,124 | $ | 25.47 | 4.4 | $ | 7.60 | |||||
Restricted stock unit grants | 600,031 | Not Applicable | 4.4 | $ | 15.00 | ||||||
Total grants in the successor period | 1,181,155 |
Successor Company | |||||
Period from June 4, 2018 through December 31, 2018 | |||||
Stock option grants | $ | 853 | |||
Restricted stock unit grants | 2,551 | ||||
Total expense | $ | 3,404 |
Predecessor Company | ||||||||||
Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | ||||||||
Stock option grants * | — | 76,250 | 389,938 |
Predecessor Company | |||||||||||||||||
Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||
Stock option grants | $ | 231 | $ | 1,614 | $ | 2,948 |
Successor Company | Predecessor Company | |||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||
Current income tax expense (benefit) | ||||||||||||||||||
Federal | $ | 6,170 | $ | (1,430 | ) | $ | — | $ | — | |||||||||
State and local | 8,888 | 4,026 | 4,504 | 1,678 | ||||||||||||||
Total current income tax | $ | 15,058 | $ | 2,596 | $ | 4,504 | $ | 1,678 | ||||||||||
Deferred tax benefit | ||||||||||||||||||
Federal | $ | (20,641 | ) | $ | (138,311 | ) | $ | (157,277 | ) | $ | (19,496 | ) | ||||||
State and local | (6,770 | ) | (41,144 | ) | (10,953 | ) | (8,336 | ) | ||||||||||
Total deferred tax | (27,411 | ) | (179,455 | ) | (168,230 | ) | (27,832 | ) | ||||||||||
Total income tax benefit | $ | (12,353 | ) | $ | (176,859 | ) | $ | (163,726 | ) | $ | (26,154 | ) |
Successor Company | Predecessor Company | |||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | Year Ended December 31, 2016 | |||||||||||||||
Pretax income (loss) at federal statutory rate | $ | 10,284 | $ | 109,052 | $ | (129,602 | ) | $ | (187,906 | ) | ||||||||
State income tax, net of federal tax | 7,493 | (25,288 | ) | (11,729 | ) | (1,812 | ) | |||||||||||
Meals and entertainment | 154 | 107 | 350 | 429 | ||||||||||||||
Bankruptcy costs | (19,088 | ) | 12,286 | 5,478 | — | |||||||||||||
Change in state tax rates | (819 | ) | 78 | 255 | (1,618 | ) | ||||||||||||
Section 162 disallowance | 472 | 187 | 1,867 | 538 | ||||||||||||||
Change in federal tax rate | — | — | (91,384 | ) | — | |||||||||||||
Charges to goodwill with no tax basis | — | — | — | 163,630 | ||||||||||||||
(Decrease) increase in valuation allowance | (104,629 | ) | 29,188 | 58,254 | 32 | |||||||||||||
Worthless stock loss | (115,439 | ) | — | — | ||||||||||||||
Tax effect of sale of assets | 72,797 | (73,205 | ) | — | — | |||||||||||||
Cancellation of debt income | 22,087 | (152,099 | ) | — | — | |||||||||||||
Other reorganization charges | 35,331 | — | — | |||||||||||||||
Change in uncertain tax positions | (2,733 | ) | — | — | — | |||||||||||||
Provision to return | 1,244 | — | (72 | ) | 336 | |||||||||||||
Other adjustments | 385 | 2,943 | 2,857 | 217 | ||||||||||||||
Net income tax benefit | $ | (12,353 | ) | $ | (176,859 | ) | $ | (163,726 | ) | $ | (26,154 | ) |
Successor Company | Predecessor Company | ||||||||
2018 | 2017 | ||||||||
Noncurrent deferred tax assets: | |||||||||
Accounts receivable | $ | 962 | $ | 948 | |||||
Advertising relationships | — | 954 | |||||||
Other liabilities | 7,076 | 20,486 | |||||||
Debt costs | — | 6,987 | |||||||
Interest limitation | 1,335 | — | |||||||
Tax credits | 41 | 2,249 | |||||||
Net operating loss | 8,304 | 75,832 | |||||||
Noncurrent deferred tax assets | 17,718 | 107,456 | |||||||
Less: valuation allowance | — | (75,460 | ) | ||||||
Net noncurrent deferred tax assets | $ | 17,718 | $ | 31,996 | |||||
Noncurrent deferred tax liabilities: | |||||||||
Intangible assets | $ | 6,610 | $ | 242,822 | |||||
Property and equipment | 23,492 | 8,417 | |||||||
Other | — | 7 | |||||||
Noncurrent deferred tax liabilities | 30,102 | 251,246 | |||||||
Net noncurrent deferred tax liabilities | 12,384 | 219,250 | |||||||
Net deferred tax liabilities | $ | 12,384 | $ | 219,250 |
Successor Company | Predecessor Company | ||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year Ended December 31, 2017 | |||||||||||
Balance at beginning of period | $ | 8,466 | $ | 8,587 | $ | 11,890 | |||||||
Increase for prior year positions | — | 176 | 447 | ||||||||||
Decrease for prior year positions | (834 | ) | (297 | ) | (3,316 | ) | |||||||
Settlements | (73 | ) | — | — | |||||||||
Lapse of statute of limitations | (1,772 | ) | — | (434 | ) | ||||||||
Balance at end of period | $ | 5,787 | $ | 8,466 | $ | 8,587 |
Successor Company | Predecessor Company | ||||||||||||||||||||||||||
Period from June 4, 2018 through December 31, 2018 | Period from January 1, 2018 through June 3, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||||||||||||||||||
Basic Earnings (Loss) Per Share | |||||||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||||||
Undistributed net income (loss) from operations | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | |||||||||||||||||
Basic net income (loss) attributable to common shares | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | |||||||||||||||||
Denominator: | |||||||||||||||||||||||||||
Basic weighted average shares outstanding | 20,028 | 29,338 | 29,306 | 29,270 | |||||||||||||||||||||||
Basic undistributed net income (loss) per share attributable to common shares | $ | 3.07 | $ | 23.73 | $ | (7.05 | ) | $ | (17.45 | ) | |||||||||||||||||
Diluted Earnings (Loss) Per Share | |||||||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||||||
Undistributed net income (loss) from operations | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | |||||||||||||||||
Diluted net income (loss) attributable to common shares | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) | |||||||||||||||||
Denominator: | |||||||||||||||||||||||||||
Basic weighted average shares outstanding | 20,028 | 29,338 | 29,306 | 29,270 | |||||||||||||||||||||||
Effect of dilutive options and restricted stock units | 136 | — | — | — | |||||||||||||||||||||||
Diluted weighted average shares outstanding | 20,164 | 29,338 | 29,306 | 29,270 | |||||||||||||||||||||||
Diluted undistributed net income (loss) per share attributable to common shares | $ | 3.05 | $ | 23.73 | $ | (7.05 | ) | $ | (17.45 | ) |
Year Ending December 31: | Future Minimum Rent Under Operating Leases | Future Minimum Sublease Income | Future Minimum Commitments Under Failed Sale Leaseback Agreement | Net Commitments | ||||||||||||
2019 | $ | 34,356 | $ | (1,719 | ) | $ | 1,193 | $ | 33,830 | |||||||
2020 | 29,242 | (1,719 | ) | 1,557 | 29,080 | |||||||||||
2021 | 22,717 | 1,603 | 24,320 | |||||||||||||
2022 | 19,885 | 1,650 | 21,535 | |||||||||||||
2023 | 16,280 | 1,701 | 17,981 | |||||||||||||
Thereafter | 45,959 | 2,052 | 48,011 | |||||||||||||
$ | 168,439 | $ | (3,438 | ) | $ | 9,756 | $ | 174,757 |
Allocation | Amount | ||||
Broadcast licenses | $ | 17,476 | |||
Property and equipment | 524 | ||||
Total purchase price | $ | 18,000 |
Predecessor Company | Successor Company | ||||||||||||||||||
Three Months Ended March 31, 2018 | Period April 1, 2018 through June 3, 2018 | Period June 4, 2018 through June 30, 2018 | Three Months Ended September 30, 2018 | Three Months Ended December 31, 2018 | |||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2018 | |||||||||||||||||||
Net revenue | $ | 263,679 | $ | 190,245 | $ | 95,004 | $ | 282,254 | $ | 309,178 | |||||||||
Operating income (loss) | $ | 25,144 | $ | 28,435 | $ | 13,738 | $ | 43,355 | $ | 45,562 | |||||||||
(Loss) income before income taxes | $ | (5,119 | ) | $ | 524,416 | $ | 7,586 | $ | 17,791 | $ | 23,695 | ||||||||
Net (loss) income | $ | (5,001 | ) | $ | 701,157 | $ | 4,980 | $ | 12,713 | $ | 43,732 | ||||||||
Basic: | |||||||||||||||||||
(Loss) income per share | $ | (0.17 | ) | $ | 23.90 | $ | 0.25 | $ | 0.64 | $ | 2.19 | ||||||||
Diluted: | |||||||||||||||||||
(Loss) income per share | $ | (0.17 | ) | $ | 23.90 | $ | 0.25 | $ | 0.63 | $ | 2.18 | ||||||||
Predecessor Company | |||||||||||||||||||
Three Months Ended March 31, 2017 | Three Months Ended June 30, 2017 | Three Months Ended September 30, 2017 | Three Months Ended December 31, 2017 | ||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017 | |||||||||||||||||||
Net revenue | $ | 264,030 | $ | 290,531 | $ | 287,240 | $ | 293,861 | |||||||||||
Operating income (loss) | $ | 20,522 | $ | 47,326 | $ | 42,931 | $ | (321,225 | ) | ||||||||||
(Loss) income before income taxes | $ | (13,421 | ) | $ | 12,906 | $ | 6,531 | $ | (376,307 | ) | |||||||||
Net (loss) income | $ | (7,395 | ) | $ | 5,672 | $ | 1,274 | $ | (206,116 | ) | |||||||||
Basic: | |||||||||||||||||||
(Loss) income per share | $ | (0.25 | ) | $ | 0.19 | $ | 0.04 | $ | (7.03 | ) | |||||||||
Diluted: | |||||||||||||||||||
(Loss) income per share | $ | (0.25 | ) | $ | 0.19 | $ | 0.04 | $ | (7.03 | ) |
Period from January 1, 2018 through June 3, 2018 (Predecessor Company) | ||||||||||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||||||||||
Net revenue | $ | 303,317 | $ | 149,715 | $ | 892 | $ | 453,924 |
Period from June 4, 2018 through December 31, 2018 (Successor Company) | ||||||||||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||||||||||
Net revenue | $ | 477,118 | $ | 207,702 | $ | 1,616 | $ | 686,436 |
Year Ended December 31, 2017 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 786,963 | $ | 346,165 | $ | 2,534 | $ | 1,135,662 |
Year Ended December 31, 2016 (Predecessor Company) | ||||||||||||||||
Cumulus Radio Station Group | Westwood One | Corporate and Other | Consolidated | |||||||||||||
Net revenue | $ | 802,396 | $ | 336,610 | $ | 2,394 | $ | 1,141,400 |
Successor Company | Predecessor Company | ||||||||||||||||||||||
Period from June 4, 2018 through December 31, | Period from January 1, 2018 through June 3, | December 31, | December 31, | ||||||||||||||||||||
2018 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Adjusted EBITDA by segment | |||||||||||||||||||||||
Cumulus Radio Station Group | $ | 131,509 | $ | 76,009 | $ | 197,775 | $ | 211,344 | |||||||||||||||
Westwood One | 39,743 | 19,210 | 54,260 | 25,363 | |||||||||||||||||||
Segment Adjusted EBITDA | 171,252 | 95,219 | 252,035 | 236,707 | |||||||||||||||||||
Adjustments to reconcile to GAAP measure | |||||||||||||||||||||||
Corporate and other expense | (17,417 | ) | (14,707 | ) | (34,284 | ) | (30,840 | ) | |||||||||||||||
Income tax benefit | 12,353 | 176,859 | 163,726 | 26,154 | |||||||||||||||||||
Non-operating expense, including net interest expense | (53,777 | ) | (483 | ) | (127,179 | ) | (136,102 | ) | |||||||||||||||
Local marketing agreement fees | (2,471 | ) | (1,809 | ) | (10,884 | ) | (12,824 | ) | |||||||||||||||
Depreciation and amortization | (34,060 | ) | (22,046 | ) | (62,239 | ) | (87,267 | ) | |||||||||||||||
Stock-based compensation expense | (3,404 | ) | (231 | ) | (1,614 | ) | (2,948 | ) | |||||||||||||||
(Loss) gain on sale or disposal of assets or stations | (103 | ) | (158 | ) | 2,499 | 95,695 | |||||||||||||||||
Reorganization items, net | — | 466,201 | (31,603 | ) | — | ||||||||||||||||||
Impairment of intangible assets | — | — | (335,909 | ) | (604,965 | ) | |||||||||||||||||
Loss on early extinguishment of debt | 201 | — | (1,063 | ) | 8,017 | ||||||||||||||||||
Acquisition-related and restructuring costs | (11,194 | ) | (2,455 | ) | (19,492 | ) | (1,817 | ) | |||||||||||||||
Franchise and state taxes | 45 | (234 | ) | (558 | ) | (530 | ) | ||||||||||||||||
Consolidated GAAP net income (loss) | $ | 61,425 | $ | 696,156 | $ | (206,565 | ) | $ | (510,720 | ) |
Fiscal Year | Balance at Beginning of Period | Charged to Costs and Expenses | Additions/(Deductions) | Balance at End of Period | ||||||||||||
Allowance for doubtful accounts | ||||||||||||||||
2018 Successor Company (Period from June 4, 2018 through December 31, 2018) | $ | — | $ | 5,313 | $ | — | $ | 5,313 | ||||||||
2018 Predecessor Company (Period from Jan 1, 2018 through June 3, 2018) | $ | 4,322 | $ | 5,993 | $ | (10,315 | ) | $ | — | |||||||
2017 Predecessor Company | $ | 4,691 | $ | 5,808 | $ | (6,177 | ) | $ | 4,322 | |||||||
2016 Predecessor Company | $ | 4,923 | $ | 1,103 | $ | (1,335 | ) | $ | 4,691 | |||||||
Valuation allowance on deferred taxes | ||||||||||||||||
2018 Successor Company (Period from June 4, 2018 through December 31, 2018) | $ | 104,629 | $ | — | $ | (104,629 | ) | $ | — | |||||||
2018 Predecessor Company(Period from Jan 1, 2018 through June 3, 2018) | $ | 75,460 | $ | 29,169 | $ | — | $ | 104,629 | ||||||||
2017 Predecessor Company | $ | 17,205 | $ | 58,255 | $ | — | $ | 75,460 | ||||||||
2016 Predecessor Company | $ | 17,173 | $ | 32 | $ | — | $ | 17,205 |
2-L Corporation | Louisiana |
Atlanta Radio, LLC | Delaware |
Broadcast Software International LLC | Delaware |
Catalyst Media, LLC | Delaware |
Chicago FM Radio Assets, LLC | Delaware |
Chicago Radio Assets, LLC | Delaware |
CMI Receivables Funding LLC | Delaware |
CMP Houston-KC, LLC | Delaware |
CMP KC LLC | Delaware |
CMP Susquehanna LLC | Delaware |
CMP Susquehanna Radio Holdings LLC | Delaware |
Consolidated IP Company LLC | Delaware |
Cumulus Broadcasting LLC | Delaware |
Cumulus Intermediate Holdings LLC | Delaware |
Cumulus Licensing LLC | Delaware |
Cumulus Media Intermediate Inc. | Delaware |
Cumulus Media New Holdings Inc | Delaware |
Cumulus Network Holdings LLC | Delaware |
Cumulus Radio LLC | Delaware |
Detroit Radio, LLC | Delaware |
Deer Power Tower Venture, LLC | Delaware |
DC Radio Assets, LLC | Delaware |
Dial Communications Global Media, LLC | Delaware |
Incentrev-Radio Half Off, LLC | Delaware |
IncentRev LLC | Delaware |
222 JV Clear Channel | Delaware |
KLIF Broadcasting, LLC | Delaware |
KLIF Lico, LLC | Delaware |
KLOS-FM Radio Assets, LLC | Delaware |
KPLX Lico, LLC | Delaware |
LA Radio, LLC | Delaware |
Minneapolis Radio Assets, LLC | Delaware |
NASH Country, LLC | Delaware |
Nashville Radio Tower Joint Venture | Delaware |
NY Radio Assets, LLC | Delaware |
POP Radio, LP | Delaware |
Radar/Cumulus Entertainment LLC | Delaware |
Radio Assets, LLC | Delaware |
Radio License Holdings LLC | Delaware |
Radio License Holding CBC, LLC | Delaware |
Radio License Holding SRC LLC | Delaware |
Radio Metroplex, LLC | Delaware |
Radio Networks, LLC | Delaware |
San Francisco Radio Assets, LLC | Delaware |
Shoreview FM Group | Delaware |
Susquehanna Media LLC | Delaware |
Susquehanna Pfaltzgraff LLC | Delaware |
Susquehanna Radio LLC | Delaware |
WBAP-KSCS Assets, LLC | Delaware |
Westwood One, LLC | Delaware |
Westwood One Radio Networks, LLC | Delaware |
WPLJ Radio, LLC | Delaware |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 18, 2019 | By: | /s/ Mary G. Berner | |
Mary G. Berner | |||
Title: President and Chief Executive Officer |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 18, 2019 | By: | /s/ John Abbot | |
John Abbot | |||
Executive Vice President, Treasurer and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Mary G. Berner | |||
Name: | Mary G. Berner | ||
Title: | President and Chief Executive Officer | ||
/s/ John Abbot | |||
Name: | John Abbot | ||
Title: | Executive Vice President, Treasurer and Chief Financial Officer |
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Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Mar. 11, 2019 |
Jun. 30, 2018 |
|
Document Information [Line Items] | |||
Document type | 10-K | ||
Amendment flag | false | ||
Document period end date | Dec. 31, 2018 | ||
Document fiscal year focus | 2018 | ||
Document fiscal period focus | FY | ||
Trading symbol | CMLS | ||
Entity registrant name | CUMULUS MEDIA INC | ||
Entity central index key | 0001058623 | ||
Current fiscal year end date | --12-31 | ||
Entity well-known seasoned issuer | No | ||
Entity current reporting status | Yes | ||
Entity voluntary filers | No | ||
Entity filer category | Accelerated Filer | ||
Entity public float | $ 239.3 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 13,092,968 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 3,555,622 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Allowance for doubtful accounts | $ 5,483 | $ 4,322 |
Class A Common Stock | ||
Common stock, par value (USD per share) | $ 0.0000001 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 93,750,000 |
Common stock, shares issued | 12,995,080 | 32,031,954 |
Common stock, shares outstanding | 12,995,080 | 29,225,765 |
Class C Common Stock | ||
Common stock, par value (USD per share) | $ 0.01 | |
Common stock, shares authorized | 80,609 | |
Common stock, shares issued | 80,609 | |
Common stock, shares outstanding | 80,609 | |
Class B Common Stock | ||
Common stock, par value (USD per share) | $ 0.0000001 | |
Common stock, shares authorized | 100,000,000 | |
Common stock, shares issued | 3,560,604 | |
Common stock, shares outstanding | 3,560,604 |
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Income Statement [Abstract] | ||||
Stock-based compensation expense | $ 231 | $ 3,404 | $ 1,614 | $ 2,948 |
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies | Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies Cumulus Media Inc. (and its consolidated subsidiaries, except as the context may otherwise require, “CUMULUS MEDIA,” “we,” “us,” “our,” or the “Company”) is a Delaware corporation, organized in 2018, and successor to a Delaware corporation with the same name that was organized in 2002. Nature of Business A leader in the radio broadcasting industry, CUMULUS MEDIA combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million people reached each week through its 433 owned-and-operated stations broadcasting in 88 U.S. media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Together, the Cumulus Radio Station Group and Westwood One platforms make CUMULUS MEDIA one of the few media companies that can provide advertisers with national reach and local impact. The Cumulus Radio Station Group and Westwood One are the exclusive radio broadcast partners to some of the largest brands in sports, entertainment, news, and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, and more. Additionally, the Company is the nation's leading provider of country music and lifestyle content through its NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events. Basis of Presentation As previously disclosed, on November 29, 2017 (the “Petition Date”), CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.), a Delaware corporation (“Old Cumulus”) and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the "Chapter 11 Cases") were jointly administered under the caption In re Cumulus Media Inc., et al, Case No. 17-13381. On May 10, 2018, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 769] (the “Confirmation Order”), which confirmed the First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 446] (the “Plan”), as modified by the Confirmation Order. On June 4, 2018 (the “Effective Date”), Old Cumulus satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan was substantially consummated, and Old Cumulus and the other Debtors emerged from Chapter 11. On June 29, 2018, the Bankruptcy Court entered an order closing the Chapter 11 Cases of all of the Debtors other than Old Cumulus, whose case will remain open until its estate has been fully administered including resolving outstanding claims and the Bankruptcy Court enters an order closing its case. In connection with its emergence, Old Cumulus implemented a series of internal reorganization transactions authorized by the Plan pursuant to which it transferred substantially all of its remaining assets to an indirectly wholly owned subsidiary of reorganized Cumulus Media Inc. (formerly known as CM Emergence Newco Inc.), a Delaware corporation (“CUMULUS MEDIA” or the “Company”), prior to winding down its business. References to “Successor” or “Successor Company” relate to the balance sheet and results of operations of CUMULUS MEDIA on and subsequent to June 4, 2018. References to “Predecessor”, “Predecessor Company” or “Old Cumulus” refer to the balance sheet and results of operations of Old Cumulus prior to June 4, 2018. Upon filing for bankruptcy and up through and including the emergence from Chapter 11 on the Effective Date, the Company applied Accounting Standards Codification (“ASC”) 852 - Reorganizations (“ASC 852”) in preparing its consolidated financial statements (see Note 2, “Emergence from Chapter 11” and Note 3 “Fresh Start Accounting”). As a result of the application of fresh start accounting and the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and consequently the consolidated financial statements on and after June 4, 2018 are not comparable to the consolidated financial statements prior to that date. Refer to Note 3, “Fresh Start Accounting” for additional information. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Revision of Previously Issued Financial Statements During the third quarter of 2018, the Company determined that it had an error in the classification of certain content related costs in the Condensed Consolidated Statements of Operations in previous periods. The Company should have presented the amounts within content costs rather than within selling, general and administrative costs. In the accompanying Consolidated Statements of Operations, the previous periods have been revised to correct this misclassification. This reclassification resulted in an increase in Content costs of $4.2 million for the Predecessor Company Period from January 1, 2018 through June 3, 2018. For the Predecessor Company years ended December 31, 2017 and 2016, the reclassification was $6.2 million and $4.3 million, respectively. The correction was not material to the Predecessor or Successor results. Reverse Stock Split On October 12, 2016, the Predecessor Company effected a one-for-eight (1:8) reverse stock split (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every eight shares of each class of the Predecessor Company's outstanding common stock were combined into one share of the same class of common stock and the authorized shares of each class of the Predecessor Company's common stock were reduced by the same ratio. No fractional shares were issued in connection with the Reverse Stock Split. The number and exercise price of the Predecessor Company's outstanding stock options and warrants were adjusted proportionally, as appropriate. The par value of the Predecessor Company's common stock was not adjusted as a result of the Reverse Stock Split. All authorized, issued and outstanding stock and per share amounts for the Predecessor Company contained within the accompanying consolidated financial statements and these footnotes have been adjusted to reflect this Reverse Stock Split for all periods presented. Reportable Segments The Company operates in two reportable segments, for which there is discrete financial information available and whose operating results are reviewed by the chief operating decision maker, the Cumulus Radio Station Group and Westwood One. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including significant estimates related to revenue recognition, bad debts, intangible assets, income taxes, stock-based compensation, contingencies, litigation, valuation assumptions for impairment analysis, certain expense accruals and, if applicable, purchase price allocation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, and which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts and results may differ materially from these estimates. Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and certain items that are excluded from net income (loss) and recorded as a separate component of stockholders' equity (deficit). During the years ended December 31, 2018 and 2017, the Company had no items of other comprehensive income (loss) and, therefore, comprehensive income (loss) does not differ from reported net income (loss). Going Concern Considerations In accordance with the requirements of Accounting Standards Update (“ASU”), 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), or Accounting Standards Codification ("ASC") 205-40, the Company has the responsibility to evaluate at each reporting period, including interim periods, whether conditions and/or events raise substantial doubt about the Company's ability to meet its future financial obligations. In its evaluation for this report, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due for 12 months following the date of issuance of this Annual Report on Form 10-K. During the pendency of the Chapter 11 Cases, the Company’s ability to continue as a going concern was contingent upon a variety of factors, including the Bankruptcy Court’s approval of the Plan and the Company’s ability to successfully implement the Plan. As a result of the effectiveness of the Plan and the expectation that it will continue to generate positive cash flows from operating activities, the Company believes it has the ability to meet its obligations for at least one year from the date of issuance of this Form 10-K. Cash and Cash Equivalents The Company considered all highly liquid investments with original maturities of three months or less to be cash equivalents. Accounts Receivable, Allowance for Doubtful Accounts and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determined the allowance based on several factors, including the length of time receivables are past due, trends and current economic factors. All balances are reviewed and evaluated quarterly on a consolidated basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. In the opinion of management, credit risk with respect to accounts receivable is limited as a result of the large number of customers and the geographic diversification of the Company’s customer base. The Company performs credit evaluations of its customers as needed and believes that adequate allowances for any uncollectible accounts receivable are maintained. Assets Held for Sale During the year ended December 31, 2015, the Company entered into an agreement to sell certain land in the Company's Washington, DC market to a third party. The asset was classified as held for sale in the Consolidated Balance Sheet at December 31, 2016. At December 31, 2017, the sale of this asset was subject to Bankruptcy Court approval, and consequently, the asset no longer met the definition of held for sale and was classified on the Consolidated Balance Sheet as Property and Equipment, net. As a result of the Company's emergence from Chapter 11 and as of December 31, 2018, the asset again met the criteria to be classified as held for sale at fair value less estimated selling costs in the Consolidated Balance Sheet. The closing of the transaction is subject to various conditions and approvals which remain pending. Dispositions On August 30, 2016, the Company completed the sale of certain land and buildings in Los Angeles for $110.6 million in cash. In conjunction with this sale, the Company recorded a net gain of $94.0 million, which is included in (gain) loss on sale of assets or stations in the accompanying Consolidated Statements of Operations for the year ended December 31, 2016. Property and Equipment Property and equipment are stated at cost. Property and equipment acquired in business combinations accounted for under the purchase method of accounting are recorded at their estimated fair values on the date of acquisition. Equipment held under capital leases is stated at the present value of minimum future lease payments. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets. Equipment held under capital leases and leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the remaining term of the lease. Depreciation of construction in progress is not recorded until the assets are placed into service. Impairment of Long-Lived Assets Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Intangible Assets As of December 31, 2018, the Company’s intangible assets are comprised of broadcast licenses and certain other intangible assets. Intangible assets acquired in a business combination which are determined to have an indefinite useful life, including the Company’s broadcast licenses, are not amortized, but instead tested for impairment at least annually, or if a triggering event occurs. Intangible assets with definite useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In determining that the Company’s broadcast licenses qualified as indefinite lived intangibles, management considered a variety of factors including the Federal Communications Commission’s (“FCC”) historical record of renewing broadcast licenses, the cost to the Company of renewing such licenses, the relative stability and predictability of the radio industry and the relatively low level of capital investment required to maintain the physical plant of a radio station. The Company's evaluation of the recoverability of its indefinite-lived assets, which include FCC licenses and goodwill, is based on certain judgments and estimates. Future events may impact these judgments and estimates. If events or changes in circumstances were to indicate that an asset’s carrying value is not recoverable, a write-down of the asset would be recorded through a charge to operations. Debt Issuance Costs The costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the related debt using the effective interest method. In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03. The amendments in ASU 2015-03 require that debt issuance costs be presented in the Consolidated Balance Sheet as a direct deduction from the carrying amount of long-term debt, consistent with debt discounts or premiums. As a result of the Company’s chapter 11 cases, the Company expensed the entire balance of $25.9 million of deferred financing costs and debt discount during the fourth quarter of 2017 to reorganization items, net, in the Consolidated Statements of Operations. Revenue Recognition Revenue is derived primarily from the sale of commercial airtime to local and national advertisers. On January 1, 2018 the Company adopted Accounting Standards Update No. 2014-09, Revenue From Contracts with Customers ("ASC 606") using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under ASC 605 - Revenue Recognition ("ASC 605"). Under current and prior revenue guidance, revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those good or services. Broadcast advertising revenue is recognized as commercials are broadcast. In those instances in which the Company functions as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis. In those instances where the Company functions as an agent or sales representative, the effective commission is presented as revenue with no corresponding operating expenses. Local Marketing Agreements A number of radio stations, including certain of our stations, have entered into Local Marketing Agreements (“LMAs”). In a typical LMA, the licensee of a station makes available, for a fee and reimbursement of its expenses, airtime on its station to a party which supplies programming to be broadcast during that airtime, and collects revenues from advertising aired during such programming. LMAs are subject to compliance with the antitrust laws and the Communications Laws, including the requirement that the licensee must maintain independent control over the station and, in particular, its personnel, programming, and finances. As of December 31, 2018 and 2017, the Company operated two and four radio stations under LMAs, respectively. The stations operated under LMAs contributed $3.5 million, $2.6 million, $23.9 million, and $23.2 million for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016, respectively, to the consolidated net revenue of the Company. Stock-based Compensation Expense Stock-based compensation expense recognized for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016, was $3.4 million, $0.2 million, $1.6 million, and $2.9 million, respectively. For awards with service conditions, stock-based compensation expense is recognized on a straight-line basis over the requisite service period for the entire award. In addition, the Successor Company made an accounting policy election to recognize forfeitures of share-based awards as they occur in the period of forfeiture rather than estimating the number of awards expected to be forfeited at the grant date and subsequently adjusting the estimate when awards are actually forfeited. For stock options with service conditions only, the Company utilizes the Black-Scholes option pricing model to estimate the fair value of options issued. The fair value of stock options is determined by the Company’s stock price, historical stock price volatility, the expected term of the award, risk-free interest rates and expected dividends. If other assumptions are used, the results could differ. For restricted stock awards with service conditions only, the Company utilizes the intrinsic value method. For restricted stock awards with performance conditions, the Company evaluates the probability of vesting of the awards in each reporting period and calculates stock-based compensation expense based on this assessment. Trade Transactions The Company provides commercial airtime in exchange for goods and services used principally for promotional, sales, programming and other business activities. An asset and liability is recorded at the fair value of the goods or services received. Trade revenue is recorded and the liability is relieved when commercials are broadcast and trade expense is recorded and the asset relieved when goods or services are consumed. Trade valuation is based upon management’s estimate of the fair value of the products, supplies and services received. For the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016, amounts reflected under trade transactions were: (1) trade revenues of $26.5 million, $19.0 million, $40.1 million and $37.7 million, respectively; and (2) trade expenses of $27.1 million, $18.0 million, $38.6 million and $36.2 million, respectively. Income Taxes The Company uses the liability method of accounting for deferred income taxes. Except for goodwill, deferred income taxes are recognized for all temporary differences between the tax and financial reporting bases of our assets and liabilities based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The Tax Cuts and Jobs Act (“the Act”) was enacted on December 22, 2017. The Act, among other changes, reduced the US federal corporate tax rate from 35% to 21% effective January 1, 2018. During the fourth quarter of 2018, the Company completed its accounting for the tax effects of enactment of the Act and recorded an adjustment to deferred tax benefit of approximately $0.9 million during 2018 related to the remeasurement of deferred tax assets and liabilities. See Note 13, “Income Taxes” for further discussion. A valuation allowance is recorded against a deferred tax asset to measure its net realizable value when it is not more likely than not that the benefits of its recovery will be recognized. The Company continually reviews the adequacy of our valuation allowance, if any, on our deferred tax assets and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740, Income Taxes ("ASC 740"). See Note 13, “Income Taxes” for further discussion. Earnings Per Share Basic income (loss) per share is computed on the basis of the weighted average number of common shares outstanding. The Company allocates undistributed net income (loss) from continuing operations between each class of common stock on an equal basis after any allocations for preferred stock dividends in accordance with the terms of the Company’s third amended and restated certificate of incorporation, as amended (the “amended and restated certificate of incorporation (the "Charter”)). Non-vested restricted shares of Class A common stock and Company Warrants (defined below) are considered participating securities for purposes of calculating basic weighted average common shares outstanding in periods in which the Company recorded net income. Diluted earnings per share is computed in the same manner as basic earnings per share after assuming the issuance of common stock for all potentially dilutive equivalent shares, which includes stock options and certain other outstanding warrants to purchase common stock. Antidilutive instruments are not considered in this calculation. Under the two-class method, net income is allocated to common stock and participating securities to the extent that each security may share in earnings, as if all of the earnings for the period had been distributed. Earnings are allocated to each participating security and common share equally, after deducting dividends declared or accreted on preferred stock. Fair Values of Financial Instruments The carrying values of cash equivalents, restricted cash, accounts receivables, accounts payable, trade payables and receivables and accrued expenses approximate fair value because of the short term to maturity of these instruments (See Note 10, "Fair Value Measurements"). Accounting for National Advertising Agency Contract The Company has engaged Katz Media Group, Inc. (“Katz”) as its national advertising sales agent. The Company’s contract with Katz has several economic elements that principally reduce the overall expected commission rate below the stated base rate. The Company estimates the overall expected commission rate over the entire contract period and applies that rate to commissionable revenue throughout the contract period with the goal of estimating and recording a stable commission rate over the life of the contract. The potential commission adjustments are estimated and combined in the Consolidated Balance Sheets with the contractual termination liability. That liability is accreted to commission expense to effectuate the stable commission rate over the term of the contract. Over the term of the contract with Katz, management updates its assessment of the effective commission expense attributable to national sales in an effort to record a consistent commission rate in each period. The Company’s accounting for and calculation of commission expense to be realized over the life of the Katz contract requires management to make estimates and judgments that affect reported amounts of commission expense in each period. Actual results may differ from management’s estimates. Variable Interest Entities The Company accounted for entities qualifying as variable interest entities (“VIEs”) in accordance with ASC Topic 810, Consolidation (“ASC 810”). VIEs are required to be consolidated by the primary beneficiary. The primary beneficiary is the entity that holds the majority of the beneficial interests in the VIE. A VIE is an entity for which the primary beneficiary’s interest in the entity can change with changes in factors other than the amount of investment in the entity. From time to time, the Company enters into an LMA in connection with pending acquisitions or dispositions of radio stations and the requirements of ASC 810 may apply, depending on the facts and circumstances related to each transaction. Supplemental Cash Flow Information The following summarizes supplemental cash flow information to be read in conjunction with the Consolidated Statements of Cash Flows for the Successor Company period from June 4, 2018 through December 31, 2018, the Predecessor Company period from January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016:
Adoption of New Accounting Standards ASU 2014-09 and related updates - Revenue from Contracts with Customers (“ASU 2014-09”) or (“ASC 606”). On January 1, 2018, the Company adopted ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services and satisfaction of performance obligations to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company applied the modified retrospective method to contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported under the previous accounting standards. There was not a material impact to revenues as a result of the recognition of revenue in accordance with ASC 606 for the year ended December 31, 2018, and there have not been significant changes to the Company's business processes, systems, or internal controls as a result of implementing the standard. As of December 31, 2018, the Company recorded an asset of approximately $6.5 million related to the unamortized portion of commission expense on new local direct revenue. See Note 4, “Revenues” for further details. ASU 2016-01 - Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). In January 2016, the FASB issued ASU 2016-01 which enhances the reporting model for financial instruments including aspects of recognition, measurement, presentation and disclosure. This ASU revises the accounting requirements related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This ASU also changes certain disclosure requirements associated with the fair value of financial instruments. These changes require an entity to measure, at fair value, investments in equity securities and other ownership interests in an entity - including investments in partnerships, unincorporated joint ventures and limited liability companies that do not result in consolidation and are not accounted for under the equity method - and recognize the changes in fair value within net income. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. In February 2018, the FASB issued ASU 2018-03 - Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2018-03”) which provides an option for a company to “un-elect” the measurement alternative and elect to account for the changes in the fair value of investments through current earnings for certain equity investments that do not have readily determinable fair values as well. However, once a company makes this election for a particular investment, it must apply the fair value through current earnings model to all identical investments and/or similar investments from the same issuer. Further, a company cannot elect the measurement alternative for future purchases of identical or similar investments of the same issuer. However, the Company had no financial assets and/or liabilities that fell within the requirements of this update during the 2018 fiscal year, therefore there was no impact to the Consolidated Financial Statements. The Company will adopt ASU 2018-03 on a prospective basis and un-elect the measurement alternative if applicable. ASU 2016-15 - Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). In August 2016, the FASB issued ASU 2016-15 which provides guidance for several new and/or revised disclosures pertaining to the classification of certain cash receipts and cash payments on the statement of cash flows, including contingent consideration payments made after a business acquisition. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. The Company adopted ASU 2016-15 as of January 1, 2018 and there was no impact to the Consolidated Financial Statements. ASU 2016-18 - Restricted Cash (“ASU 2016-18”). In November 2016, the FASB issued ASU 2016-18 which provides guidance for the accounting for the disclosure of restricted cash on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. The Company adopted ASU 2016-18 as of January 1, 2018. Upon adoption of ASU 2016-18 on January 1, 2018, the Company included restricted cash balances along with cash and cash equivalents as of the end of the period and beginning of the period, respectively, in its Consolidated Cash Flows for all periods presented. Additionally, separate line items showing changes in restricted cash balances have been eliminated from the Consolidated Statement of Cash Flows. The Predecessor Company held $9 million and $8 million in restricted cash as of December 31, 2017 and December 31, 2016, respectively. ASU 2017-01 - Clarifying the Definition of a Business (“ASU 2017-01”). In January 2017, the FASB issued guidance that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The new standard is effective for fiscal years, and interim periods within fiscal years, beginning after December 15, 2017. The Company adopted ASU 2017-01 as of January 1, 2018 on a prospective basis and there was no material impact to the Consolidated Financial Statements. ASU 2017-09 - Scope of Modification Accounting (“ASU 2017-09”). In May 2017, the FASB issued an update to guidance on Topic 718, Compensation—Stock Compensation that clarifies when changes to the terms or conditions of a share-based award must be accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award, as equity or liability, changes as a result of the change in terms or conditions. ASU 2017- 09 is effective for annual periods, and interim periods within annual periods, beginning after December 15, 2017. The Company adopted ASU 2017-09 as of January 1, 2018 on a prospective basis and there was no material impact to the Consolidated Financial Statements. ASU 2018-02 - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). In February 2018, the FASB issued ASU 2018-02 which provides the option to reclassify stranded tax effects related to the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Act”) in accumulated other comprehensive income to retained earnings. The adjustment relates to the change in the U.S. corporate income tax rate. The adoption of this ASU did not impact the Company's Consolidated Financial Statements. Recent Accounting Standards Updates ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). In June 2016, the FASB issued ASU 2016-13 which requires entities to estimate loss of financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its Consolidated Financial Statements. ASU 2016-02 - Leases (“ASU 2016-02”). In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, which provides updated guidance for the accounting for leases. This update requires lessees to recognize assets and liabilities for the rights and obligations created by leases with a term longer than one year. Leases will be classified as either financing or operating, thereby impacting the pattern of expense recognition in the statement of operations. In July 2018, the FASB issued ASU 2018-10 - Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11 - Targeted Improvements (“ASU 2018-11”), which provides technical corrections and clarification to ASU 2016-02. ASU 2016-02 and amendments ASU 2018-10 and ASU 2018-11 will be effective for fiscal years beginning after December 15, 2018, and interim periods thereafter. Early adoption is permitted. The standard permits two approaches, one requiring retrospective application of the new guidance with restatement of prior years, and one requiring prospective application of the new guidance. The Company anticipates adopting this standard on January 1, 2019 using a modified retrospective approach and electing the practical expedients allowed under the standard. The Company is in the process of aggregating and evaluating lease arrangements, implementing new controls and processes, and implementing a lease accounting system. Based on a preliminary assessment, the Company expects most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption. The impact to the Company’s balance sheet is estimated to result in a 7% to 11% and 9% to 13% increase in assets and liabilities respectively. The impact on the Company's results of operations and cash flows is not expected to be material. ASU 2018-07 - Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting (“ASU 2018-07”). The standard aligns the accounting for share-based payment awards issued to employees and non- employees. Changes to the accounting for non-employee awards include: (1) equity-classified share-based payment awards issued to non-employees will now be measured on the grant date, instead of the previous requirement to re-measure the awards through the performance completion date; (2) for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition; and (3) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The guidance should be applied to all new awards granted after the date of adoption. In addition, the modified retrospective approach should be used on all liability-classified awards that have not been settled and equity- classified awards for which a measurement date has not been established by the adoption date by re-measurement at fair value as of the adoption date with a cumulative effect adjustment to opening retained earnings in the fiscal year of adoption. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than an entity’s adoption of ASC 606. The Company is currently evaluating the impact of adopting ASU 2018-07 on its Consolidated Financial Statements. ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, the FASB issued ASU 2018-13, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The update eliminates the following disclosure requirements for all entities: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the entity’s policy for the timing of transfers between levels of the fair value hierarchy, and the entity’s valuation processes for Level 3 fair value measurements. ASU 2018-13 adds the following disclosure requirements: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and for recurring and nonrecurring Level 3 fair value measurements, the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated. ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019, and interim periods thereafter. Early adoption is permitted for any removed or modified disclosures. The Company is currently evaluating the impact of adopting ASU 2016-13 on its Consolidated Financial Statements. |
Emergence from Chapter 11 |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emergence from Chapter 11 | Emergence from Chapter 11 On May 10, 2018, the Bankruptcy Court entered the Confirmation Order confirming the Plan. On the Effective Date, June 4, 2018, the Plan became effective and the Debtors emerged from Chapter 11. Plan of Reorganization A plan of reorganization determines the rights and satisfaction of claims of various creditors and security holders, but the ultimate settlement of certain claims is subject to the uncertain outcome of various litigation, negotiations and bankruptcy court decisions for a period of time after a plan of reorganization is confirmed. Cancellation of Certain Prepetition Obligations In connection with the effectiveness of and pursuant to the terms of the Plan, on the Effective Date, the obligations of Old Cumulus and its subsidiaries under the following agreements were satisfied and discharged:
Additional Matters Contemplated by the Plan
The foregoing description of certain matters effected pursuant to the Plan and the transactions related to and contemplated thereunder, is not intended to be a complete description of, or a substitute for, a full and complete reading of the Plan. Fresh Start Accounting Upon filing for bankruptcy and up through and including the emergence from Chapter 11 on the Effective Date, the Company qualified for fresh start accounting under ASC 852 because (i) the holders of voting shares of the Predecessor Company received less than 50% of the voting shares of the Successor Company and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. ASC 852 requires that fresh start accounting be applied when the Bankruptcy Court enters a confirmation order confirming a plan of reorganization, or as of a later date when all material conditions precedent to the effectiveness of a plan of reorganization are resolved, which for CUMULUS MEDIA was the Effective Date. Upon the application of fresh start accounting, CUMULUS MEDIA allocated the reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, Business Combinations (“ASC 805”). Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. Liabilities existing as of the Effective Date, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted discount rates. Deferred taxes were determined in conformity with applicable accounting standards. Predecessor Company accumulated depreciation, accumulated amortization, and accumulated deficit were eliminated. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Company’s consolidated financial statements after June 3, 2018 are not comparable to the Company’s consolidated financial statements as of or prior to that date. Reorganization Value As set forth in the Plan, the enterprise value of the Successor Company was estimated to be between $1.5 billion and $1.7 billion. Based on the estimates and assumptions discussed below, CUMULUS MEDIA estimated the enterprise value to be $1.675 billion, which was confirmed by the Bankruptcy Court. Management estimated the enterprise value of the Successor Company utilizing the guideline public company method and discounted cash flow method (“DCF”). The use of each approach provides corroboration for the other approach. To estimate enterprise value utilizing the guideline public company method, management applied valuation multiples, derived from the operating data of publicly-traded benchmark companies, to the same operating data of CUMULUS MEDIA. The guideline public company analysis identified a group of comparable companies giving consideration to lines of business and markets served, size and geography. The valuation multiples were derived based on projected financial measures of revenue and earnings before interest, taxes, depreciation and amortization and applied to projected operating data of CUMULUS MEDIA. To estimate enterprise value utilizing the discounted cash flow method, management established an estimate of future cash flows for the period 2018 to 2024 with a terminal value and discounted the estimated future cash flows to present value. The expected cash flows for the period 2018 to 2024 with a terminal value were based upon certain financial projections and assumptions provided to the Bankruptcy Court. The expected cash flows for the period 2018 to 2024 were derived from earnings forecasts and assumptions regarding revenue growth and margin projections, as applicable. A terminal value was included, calculated using the constant growth method, based on the cash flows of the final year of the forecast period. The Company’s enterprise value represents the fair value of its interest-bearing debt and equity capital, while the reorganization value is derived from the enterprise value by adding back non-interest-bearing liabilities. The following table reconciles the enterprise value to the estimated reorganization value as of the Effective Date (dollars in thousands):
(1) Difference in the estimated cash balance in the reorganization value versus the actual cash on hand as of June 3, 2018. (2) Difference in the assumed effect of deferred taxes in the reorganization value versus the actual deferred taxes as of June 3, 2018. Condensed Consolidated Balance Sheet The adjustments set forth in the following Condensed Consolidated Balance Sheet reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs (dollars in thousands).
Reorganization adjustments 1.Reflects cash payments and the funding of professional fee escrow account from the implementation of the Plan as follows (dollars in thousands):
3.Reflects the reclassification of $17.8 million debt issuance costs from prepaid expense to offset the Term Loan as well as the write-off of $2.2 million of certain assets which do not benefit the Successor Company. 4.Represents the reinstatement of certain accounts payable and accrued expenses that were previously classified as Liabilities subject to compromise as well as accrued state income taxes. 5.Represents the current and non-current portion, net of debt issuance costs of $18.0 million, of the Term Loan. 6.Represents the reinstatement of tax liabilities, lease liabilities and long-term deposits from Liabilities subject to compromise. 7.Represents the partial reinstatement of the deferred tax liability of $50.4 million of the original $237.2 million that was included in Liabilities subject to compromise. 8.Liabilities subject to compromise immediately prior to the Effective Date consisted of the following (dollars in thousands):
Liabilities subject to compromise have been, or will be settled as follows in accordance with the Plan (dollars in thousands):
Refer to Note 11, “Stockholders’ Equity” for the determination of fair value of equity issued to unsecured creditors.
Fresh Start adjustments 12.Reflects the increase in net book value of property and equipment to the estimated fair value as of the Effective Date. The following table summarizes the components of property and equipment, net as of June 4, 2018, and the fair value as of the Effective Date (dollars in thousands):
To estimate the fair value of personal property such as broadcasting and other equipment, the Company utilized a combination of the cost approach and market approach. The Company recognized the contributory value associated with the necessary installation, engineering, and set-up costs related to the installed component of equipment by using the cost approach. The market approach was used for assets where a viable, transparent secondary market existed, such as motor vehicle assets. To estimate the fair value of real property, the Company considered the cost approach and sales comparison approach. Buildings were primarily valued using the cost approach, under which the Company developed a replacement cost new for the improvements and applied deductions for physical depreciation based on the age of the assets. Land was valued under the sales comparison approach, whereby the Company researched transactions involving comparable parcels to provide an indication of the fair value of the various subject parcels. 13.The Company recorded an adjustment to intangible assets of $147.9 million as follows (dollars in thousands):
The fair values of broadcasting licenses and other intangible assets were determined as follows:
14.Reflects the elimination of the Predecessor goodwill balance of $135.2 million. 15.Reflects the elimination of the carrying value of short-term deferred rent to adjust accounts payable and accrued expenses to estimated fair value. 16.Represents the fair value adjustment of the Term Loan including the elimination of debt issuance costs of $18.0 million incurred prior to and upon emergence from bankruptcy. The fair value of debt is comprised of $13.0 million of short-term debt and $1,287.0 million of long-term debt. The fair value of the Term Loan was determined based on a market approach utilizing market yields and was estimated to be 100% of par value. 17.Represents the increase of a liability related to a failed sale leaseback transaction and elimination of the carrying value of long-term deferred rent in accordance with fresh start reporting to adjust net book value to estimated fair value. 18.Reflects the impact of fresh start adjustments on deferred taxes. 19.Reflects the cumulative impact of the fresh start accounting adjustments discussed above on accumulated deficit as follows (dollars in thousands):
Reorganization Items, Net Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Consolidated Statement of Operations as follows (dollars in thousands):
(a) Liabilities subject to compromise have been, or will be settled in accordance with the Plan. (b) Revaluation of certain assets and liabilities upon the adoption of fresh start accounting. (c) Legal, financial advisory and other professional costs directly associated with the reorganization process. (d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court. (e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts. (f) Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process and the write-off of Predecessor director and officer insurance policies. As of December 31, 2018, total cash paid by the Predecessor Company related to Reorganization Items, net was $57.8 million. |
Fresh Start Accounting |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganization under Chapter 11 of US Bankruptcy Code Disclosure | Emergence from Chapter 11 On May 10, 2018, the Bankruptcy Court entered the Confirmation Order confirming the Plan. On the Effective Date, June 4, 2018, the Plan became effective and the Debtors emerged from Chapter 11. Plan of Reorganization A plan of reorganization determines the rights and satisfaction of claims of various creditors and security holders, but the ultimate settlement of certain claims is subject to the uncertain outcome of various litigation, negotiations and bankruptcy court decisions for a period of time after a plan of reorganization is confirmed. Cancellation of Certain Prepetition Obligations In connection with the effectiveness of and pursuant to the terms of the Plan, on the Effective Date, the obligations of Old Cumulus and its subsidiaries under the following agreements were satisfied and discharged:
Additional Matters Contemplated by the Plan
The foregoing description of certain matters effected pursuant to the Plan and the transactions related to and contemplated thereunder, is not intended to be a complete description of, or a substitute for, a full and complete reading of the Plan. Fresh Start Accounting Upon filing for bankruptcy and up through and including the emergence from Chapter 11 on the Effective Date, the Company qualified for fresh start accounting under ASC 852 because (i) the holders of voting shares of the Predecessor Company received less than 50% of the voting shares of the Successor Company and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. ASC 852 requires that fresh start accounting be applied when the Bankruptcy Court enters a confirmation order confirming a plan of reorganization, or as of a later date when all material conditions precedent to the effectiveness of a plan of reorganization are resolved, which for CUMULUS MEDIA was the Effective Date. Upon the application of fresh start accounting, CUMULUS MEDIA allocated the reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, Business Combinations (“ASC 805”). Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. Liabilities existing as of the Effective Date, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted discount rates. Deferred taxes were determined in conformity with applicable accounting standards. Predecessor Company accumulated depreciation, accumulated amortization, and accumulated deficit were eliminated. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Company’s consolidated financial statements after June 3, 2018 are not comparable to the Company’s consolidated financial statements as of or prior to that date. Reorganization Value As set forth in the Plan, the enterprise value of the Successor Company was estimated to be between $1.5 billion and $1.7 billion. Based on the estimates and assumptions discussed below, CUMULUS MEDIA estimated the enterprise value to be $1.675 billion, which was confirmed by the Bankruptcy Court. Management estimated the enterprise value of the Successor Company utilizing the guideline public company method and discounted cash flow method (“DCF”). The use of each approach provides corroboration for the other approach. To estimate enterprise value utilizing the guideline public company method, management applied valuation multiples, derived from the operating data of publicly-traded benchmark companies, to the same operating data of CUMULUS MEDIA. The guideline public company analysis identified a group of comparable companies giving consideration to lines of business and markets served, size and geography. The valuation multiples were derived based on projected financial measures of revenue and earnings before interest, taxes, depreciation and amortization and applied to projected operating data of CUMULUS MEDIA. To estimate enterprise value utilizing the discounted cash flow method, management established an estimate of future cash flows for the period 2018 to 2024 with a terminal value and discounted the estimated future cash flows to present value. The expected cash flows for the period 2018 to 2024 with a terminal value were based upon certain financial projections and assumptions provided to the Bankruptcy Court. The expected cash flows for the period 2018 to 2024 were derived from earnings forecasts and assumptions regarding revenue growth and margin projections, as applicable. A terminal value was included, calculated using the constant growth method, based on the cash flows of the final year of the forecast period. The Company’s enterprise value represents the fair value of its interest-bearing debt and equity capital, while the reorganization value is derived from the enterprise value by adding back non-interest-bearing liabilities. The following table reconciles the enterprise value to the estimated reorganization value as of the Effective Date (dollars in thousands):
(1) Difference in the estimated cash balance in the reorganization value versus the actual cash on hand as of June 3, 2018. (2) Difference in the assumed effect of deferred taxes in the reorganization value versus the actual deferred taxes as of June 3, 2018. Condensed Consolidated Balance Sheet The adjustments set forth in the following Condensed Consolidated Balance Sheet reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs (dollars in thousands).
Reorganization adjustments 1.Reflects cash payments and the funding of professional fee escrow account from the implementation of the Plan as follows (dollars in thousands):
3.Reflects the reclassification of $17.8 million debt issuance costs from prepaid expense to offset the Term Loan as well as the write-off of $2.2 million of certain assets which do not benefit the Successor Company. 4.Represents the reinstatement of certain accounts payable and accrued expenses that were previously classified as Liabilities subject to compromise as well as accrued state income taxes. 5.Represents the current and non-current portion, net of debt issuance costs of $18.0 million, of the Term Loan. 6.Represents the reinstatement of tax liabilities, lease liabilities and long-term deposits from Liabilities subject to compromise. 7.Represents the partial reinstatement of the deferred tax liability of $50.4 million of the original $237.2 million that was included in Liabilities subject to compromise. 8.Liabilities subject to compromise immediately prior to the Effective Date consisted of the following (dollars in thousands):
Liabilities subject to compromise have been, or will be settled as follows in accordance with the Plan (dollars in thousands):
Refer to Note 11, “Stockholders’ Equity” for the determination of fair value of equity issued to unsecured creditors.
Fresh Start adjustments 12.Reflects the increase in net book value of property and equipment to the estimated fair value as of the Effective Date. The following table summarizes the components of property and equipment, net as of June 4, 2018, and the fair value as of the Effective Date (dollars in thousands):
To estimate the fair value of personal property such as broadcasting and other equipment, the Company utilized a combination of the cost approach and market approach. The Company recognized the contributory value associated with the necessary installation, engineering, and set-up costs related to the installed component of equipment by using the cost approach. The market approach was used for assets where a viable, transparent secondary market existed, such as motor vehicle assets. To estimate the fair value of real property, the Company considered the cost approach and sales comparison approach. Buildings were primarily valued using the cost approach, under which the Company developed a replacement cost new for the improvements and applied deductions for physical depreciation based on the age of the assets. Land was valued under the sales comparison approach, whereby the Company researched transactions involving comparable parcels to provide an indication of the fair value of the various subject parcels. 13.The Company recorded an adjustment to intangible assets of $147.9 million as follows (dollars in thousands):
The fair values of broadcasting licenses and other intangible assets were determined as follows:
14.Reflects the elimination of the Predecessor goodwill balance of $135.2 million. 15.Reflects the elimination of the carrying value of short-term deferred rent to adjust accounts payable and accrued expenses to estimated fair value. 16.Represents the fair value adjustment of the Term Loan including the elimination of debt issuance costs of $18.0 million incurred prior to and upon emergence from bankruptcy. The fair value of debt is comprised of $13.0 million of short-term debt and $1,287.0 million of long-term debt. The fair value of the Term Loan was determined based on a market approach utilizing market yields and was estimated to be 100% of par value. 17.Represents the increase of a liability related to a failed sale leaseback transaction and elimination of the carrying value of long-term deferred rent in accordance with fresh start reporting to adjust net book value to estimated fair value. 18.Reflects the impact of fresh start adjustments on deferred taxes. 19.Reflects the cumulative impact of the fresh start accounting adjustments discussed above on accumulated deficit as follows (dollars in thousands):
Reorganization Items, Net Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Consolidated Statement of Operations as follows (dollars in thousands):
(a) Liabilities subject to compromise have been, or will be settled in accordance with the Plan. (b) Revaluation of certain assets and liabilities upon the adoption of fresh start accounting. (c) Legal, financial advisory and other professional costs directly associated with the reorganization process. (d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court. (e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts. (f) Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process and the write-off of Predecessor director and officer insurance policies. As of December 31, 2018, total cash paid by the Predecessor Company related to Reorganization Items, net was $57.8 million. |
Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Adoption of ASC Topic 606 - Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under ASC 605 - Revenue Recognition (“ASC 605”). Revenue Recognition Under current and prior revenue guidance, revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following table presents revenues disaggregated by revenue source (dollars in thousands):
Advertising Revenues Substantially all of the Company’s revenues are from advertising, primarily generated through (i) the sale of broadcast radio advertising time and advertising and promotional opportunities across digital audio networks to local, regional, and national advertisers and (ii) remote/event revenue. The Company considers each advertising element a separate contract, and thus a separate performance obligation, as a result of both the customer’s and the Cumulus Radio Station Group or Westwood One’s respective ability to stop transferring promised goods or services during the contract term without notice or penalty. Thus, revenue associated with these contracts is recognized at the time advertising or other services, for example hosting an event, is delivered. The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is not significant. There are no further obligations for returns, refunds or similar obligations related to the contracts. The Company records deferred revenues when cash payments are received in advance of performance, including amounts which are refundable. Non-Advertising Revenues Non-advertising revenue does not constitute a material portion of the Company’s revenue and primarily consists of licensing content and tower rental agreements, and to a lesser degree, sublease income, and satellite rental income. Rental agreements typically range from one to five years with renewal clauses. Such agreements typically contain a stated recurring monthly amount due, which is recognized upon delivery of services or passage of time. These agreements contain a single performance obligation. Trade and Barter Transactions The Company provides advertising time in exchange for goods or services such as products, supplies, or services. Trade revenue totaled $26.5 million, $19.0 million, $40.1 million and $37.7 million for the period June 4, 2018 through December 31, 2018 (Successor Company), the period January 1, 2018 through June 3, 2018 (Predecessor Company), the year ended December 31, 2017 (Predecessor Company) and the year ended December 31, 2016 (Predecessor Company), respectively. Programming barter revenue is derived from an exchange of programming content, to be broadcast on the Company’s airwaves, for commercial inventory, usually in the form of commercial placements inside of the show exchanged. The revenue is recognized as the commercial spots are aired, in the same pattern as the Company’s normal cash spot revenue is recognized. Trade and barter value is based upon management’s estimate of the fair value of the products, supplies or services received. Variable Consideration Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduces revenue recognized accordingly. The Company has not had, nor does it believe that there will be, significant changes to its estimates of variable consideration. In addition, variable consideration has not historically been material to the Company’s financial statements. Customer Options that Provide a Material Right ASC 606 requires the allocation of a portion of a transaction price of a contract to additional goods or services transferred to a customer that are considered to be a separate performance obligation and provide a material right to the customer. To satisfy the requirement of accounting for the material right, the Company considers both the transaction price associated with each spot as well as the timing of revenue recognition for the spots. Customers are often provided bonus spots, which are radio advertising spots, free of charge, explicitly within the contract terms or implicitly agreed upon with the customer consistent with industry standard practices. The Company typically runs these bonus spots concurrent with paid spots. As the delivery and revenue recognition for both paid and bonus spots generally occur within the same period, the time of delivery and recognition of revenue is insignificant. Principal versus Agent Considerations In those instances in which the Company functions as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis. In those instances where the Company functions solely as an agent or sales representative, the Company’s effective commission is presented as revenue on a net basis with no corresponding operating expenses. Westwood One maintains revenue sharing agreements and inventory representation agreements with various radio companies. For all revenue sharing and inventory representation agreements, the Company performs an analysis in accordance with ASC 606 to determine if the amounts should be recorded on a gross or net basis. Consistent with the prior revenue recognition guidance, Westwood One continues to record all revenue sharing agreements on a gross basis with the shared revenue amount recorded within Content costs in the Consolidated Statements of Operations and inventory representation agreements on a net basis. Practical Expedients The Company applied the completed contract practical expedient guidance under ASC 606 to contracts that were not considered completed as of January 1, 2018. The Company capitalizes certain incremental costs of obtaining contracts with customers which it expects to recover. For contracts with a client whose customer life covers a year or less, companies may use a practical expedient that allows the option to expense commissions as they are incurred. For contracts where the new and renewal commission rates are commensurate, management used the contract life for the amortization period. As such, the Company will continue to expense commissions as incurred for the revenue streams where the new and renewal commission rates are commensurate and the contract life is less than one year. These costs are recorded within Sales, General and Administrative expense in our Consolidated Statements of Operations. The Company does not apply the practical expedient option to new local direct contracts, as the commission rates for new and renewal contracts is not commensurate and the customer life is typically in excess of one year. As of December 31, 2018, the Company recorded an asset of approximately $6.5 million related to the unamortized portion of commission expense on new local direct revenue. Under the previous guidance of ASC 605, commission expense on new local direct revenue would have been expensed as incurred. Under certain practical expedients elected, the Company did not disclose the amount of consideration allocated to the remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for reporting periods presented before January 1, 2018. The Company has elected to apply the practical expedient which allows it to not disclose information about remaining performance obligations that have original expected durations of one year or less. The Company has contracts with customers which the Company believes will produce revenue beyond one year. From these contracts, the Company estimates it will recognize approximately $6.0 million of revenue in 2019. |
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Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash As of December 31, 2018 and 2017, the Company’s Consolidated Balance Sheets included approximately $2.5 million and $9.0 million, respectively, in restricted cash. Restricted cash is used primarily to collateralize standby letters of credit for certain leases and insurance policies. |
Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment consisted of the following as of December 31, 2018 and 2017 (dollars in thousands):
Depreciation expense for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016 was $15.2 million, $14.2 million, $28.7 million, and $31.1 million, respectively. In connection with the application of fresh start accounting on June 3, 2018, the Company recorded fair value adjustments disclosed in Note 3, “Fresh Start Accounting.” Accumulated depreciation was therefore eliminated as of that date. The Company capitalizes certain costs related to software developed or obtained for internal use in accordance with ASC 350-40, Intangibles-Goodwill and Other-Internal Use Software. The Company evaluates these long-lived assets for impairment whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. As a result of the annual impairment assessment, there was no impairment to capitalized costs related to our internally developed software as of December 31, 2018. The Company is currently evaluating alternatives related to capitalized software associated with certain internally developed systems and will assess the recoverability of those costs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The table presented above does not reflect certain assets in the Company's Washington, DC market which has been classified as held for sale in the accompanying Consolidated Balance Sheet at December 31, 2018 as disclosed in Note 1, "Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies." |
Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill The carrying value of goodwill by reportable segments is as follows (dollars in thousands):
Prior to the application of fresh start accounting, goodwill represented the excess of the amount paid to acquire businesses over the fair value of their net assets at the date of the acquisition. The Company eliminated goodwill upon application of fresh start accounting (see Note 3, “Fresh Start Accounting”). The Successor Company had no goodwill as of December 31, 2018. In performing the Company's 2016 annual impairment testing of goodwill, the Company recorded a non-cash impairment charge of $568.1 million, reducing the goodwill in the Cumulus Radio Station Group to $0.0 million at December 31, 2016. The Company did not incur any impairment charges related to goodwill during the year ended December 31, 2017. Intangible Assets In connection with the Company’s adoption of fresh start accounting on the Effective Date, intangible assets and related accumulated amortization of the Predecessor Company were eliminated. Intangible assets of the Successor Company were identified and valued at their fair value, as determined management with the assistance of valuation specialists. The Company’s intangible assets are as follows (dollars in thousands):
As part of fresh start accounting, the Company removed existing intangibles and accumulated amortization and recorded an adjustment of $147.9 million to reflect the fair value of intangibles. (See Note 3, “Fresh Start Accounting"). The Company's definite-lived intangible assets primarily consist of broadcast advertising and affiliate relationships, while the Company's indefinite-lived assets consist of broadcasting license and trademarks. Total amortization expense related to the Company’s definite-lived intangible assets was $18.9 million, $7.9 million, $33.5 million and $56.2 million for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016, respectively. As of December 31, 2018, future amortization expense related to the Company's definite-lived intangible assets was estimated as follows (dollars in thousands):
The Company performs annual impairment testing of its Federal Communications Commission ("FCC") licenses and goodwill as of December 31 of each year and on an interim basis if events or circumstances indicate that FCC licenses or goodwill may be impaired. The Company reviews the carrying value of its definite-lived intangible assets, primarily broadcast advertising and affiliate relationships, for recoverability prior to its annual impairment test of goodwill and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Impairment Test - Definite-Lived Intangibles The Company tests definite-lived intangible assets for recoverability by comparing the net carrying value of an asset group to its undiscounted cash flows. As of December 31, 2018, based on the results of the recoverability test, the Company determined that the future undiscounted cash flows expected to result from the continued use of the assets and their eventual disposition continued to exceed the carrying value of the applicable asset groups and were therefore recoverable. The Company did not recognize any impairment charges for its definite-lived intangible assets in 2018 as a result of this analysis. During the second quarter of 2016, the Company recorded an impairment charge to its definite-lived intangible assets of $1.8 million at the Westwood One segment for all customer lists and trademark definite-lived intangible assets related to the print publication of NASH Country Weekly as the Company re-positioned the print publication to a digital only medium. There were no similar impairments in 2017 or 2018. Annual Impairment Test - FCC Licenses As part of the annual impairment testing of indefinite-lived intangibles the Company tests its FCC licenses for impairment during the fourth quarter of each year and on an interim basis if events or circumstances indicate that the asset may be impaired. As part of the overall planning associated with the test, the Company determined that its geographic markets are the appropriate unit of accounting for FCC license impairment testing and therefore the Company has combined its FCC licenses within each geographic market cluster into a single unit of accounting for impairment testing purposes. For the impairment test, we utilized the income approach, specifically the Greenfield Method. This approach values a license by calculating the value of a hypothetical start-up company that initially has no assets except the asset to be valued (the license). The value of the asset under consideration (the license) can be considered as equal to the value of this hypothetical start-up company. In completing the appraisals, we considered if there were any other factors that might affect the carrying value of the asset. The estimated fair values of our FCC licenses represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the Company and willing market participants at the measurement date. The estimated fair value also assumes the highest and best use of the asset by market participants, considering a use of the asset that is physically possible, legally permissible and financially feasible. A basic assumption in our valuation of these FCC licenses was that these radio stations were new radio stations, signing on the air as of the date of the valuation. We assumed the competitive situation that existed in those markets as of that date, except that these stations were just beginning operations. In estimating the value of the licenses, we began with market revenue projections. Next, we estimated the percentage of the market’s total revenue, or market share, that market participants could reasonably expect an average start-up station to attain, as well as the duration (in years) required to reach the average market share. The estimated average market share was computed based on market share data, by station type (i.e., AM and FM) and signal strength. After market revenue and market shares were estimated, operating expenses, including depreciation based on assumed investments in fixed assets and future capital expenditures of a start-up station or operation are similarly estimated based on industry-average cost data. Appropriate estimated income taxes were then subtracted, estimated depreciation added back, estimated capital expenditures subtracted, and estimated working capital adjustments were made to calculate estimated free cash flow during the build-up period until a steady state or mature “normalized” operation is achieved. The analysis included overall future market revenue rates of decline for the residual years after the projection period of (0.75)% and a weighted average cost of capital of 9.0%. The residual year value and cash flow growth rates were estimated based on a perpetual nominal market growth rate, which was based on long-term industry projections obtained from third party sources. The weighted average cost of capital was based on (i) the cost of equity, which included estimates of the risk-free return, stock risk premiums and industry beta; (ii) the cost of debt, which included estimates for corporate borrowing rates; and (iii) estimated average percentages of equity and debt in other radio broadcasters capital structures. In order to estimate what listening audience share could be expected to be achieved for each station by market, we analyzed the average local commercial share garnered by similar AM and FM stations competing in those radio markets. We may make adjustments to the listening share and revenue share based on a station's signal coverage within the market and the surrounding area population as compared to the other stations in the market. Based on our knowledge of the industry and familiarity with similar markets, we determined that approximately three years would be required for the stations to reach maturity. We also incorporated the following additional assumptions into the discounted cash flow valuation model:
As a result of the impairment test, there was no impairment as of December 31, 2018. As of December 31, 2017, the Company recorded a non-cash impairment charge of $335.9 million. As of December 31, 2016 the Company recorded a non-cash impairment charge of $35.0 million. If the macroeconomic conditions of the radio industry or the underlying material assumptions are less favorable than those projected by the Company or if a triggering event occurs or circumstance change that would more likely than not reduce the fair value of FCC licenses below the amounts reflected in the Consolidated Balance Sheet, the Company may be required to recognize additional impairment charges in future periods. |
Accounts Payable and Accrued Expenses |
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Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following as of December 31, 2018 and 2017 (dollars in thousands):
In connection with the filing of the Bankruptcy Petitions, $108.2 million of accounts payable and accrued expenses outstanding under the Predecessor Company, were reclassified to Liabilities subject to compromise in the Consolidated Balance Sheet as of December 31, 2017. |
Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt The Company’s long-term debt consisted of the following at December 31, 2018 and 2017 (dollars in thousands):
In connection with the filing of the Bankruptcy Petitions, all amounts outstanding under the Predecessor Term Loan and the 7.75% Senior Notes had been reclassified to Liabilities subject to compromise in the Consolidated Balance Sheet as of December 31, 2017. Future maturities of the Term Loan (dollars in thousands):
Credit Agreement On the Effective Date, Cumulus Media New Holdings Inc., a Delaware corporation (“Holdings”) and an indirectly wholly-owned subsidiary of the Company, and certain of the Company’s other subsidiaries, entered into the Credit Agreement with the holders of claims with respect to the Predecessor Term Loan under the Canceled Credit Agreement, as term loan lenders. Pursuant to the Credit Agreement, the lenders party thereto were deemed to have provided Holdings and its subsidiaries that are party thereto as co- borrowers with a $1.3 billion senior secured Term Loan. Amounts outstanding under the Credit Agreement bear interest at a per annum rate equal to (i) the London Inter-bank Offered Rate (“LIBOR”) plus an applicable margin of 4.50%, subject to a LIBOR floor of 1.00%, or (ii) the Alternative Base Rate (as defined below) plus an applicable margin of 3.50%, subject to an Alternative Base Rate floor of 2.00%. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. At December 31, 2018, the Term Loan bore interest at 7.03% per annum. Amounts outstanding under the Term Loan amortize in equal quarterly installments of 0.25% of the original principal amount of the Term Loan with the balance payable on the maturity date. The maturity date of the Term Loan is May 15, 2022. The Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature. Events of default in the Credit Agreement include, among others: (a) the failure to pay when due the obligations owing thereunder; (b) the failure to perform (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against Holdings or any of its subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use, any one or more of, any material FCC licenses; (g) any representation or warranty made, or report, certificate or financial statement delivered, to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in Credit Agreement). Upon the occurrence of an event of default, the Agent may, with the consent of, or upon the request of, the required lenders, accelerate the Term Loan and exercise any of its rights as a secured party under the Credit Agreement and the ancillary loan documents provided, that in the case of certain bankruptcy or insolvency events with respect to a borrower, the Term Loan will automatically accelerate. The Credit Agreement does not contain any financial maintenance covenants. The Credit Agreement provides that Holdings will be permitted to enter into either a revolving credit facility or receivables facility providing commitments of up to $50.0 million, subject to certain conditions. The borrowers may elect, at their option, to prepay amounts outstanding under the Credit Agreement without premium or penalty (except that any prepayment during the period of six months following the closing of the Credit Agreement would require a premium equal to 1.00% of the prepaid principal amount). The borrowers may be required to make mandatory prepayments of the Term Loan upon the occurrence of specified events as set forth in the Credit Agreement, including upon the sale of certain assets and from Excess Cash Flow (as defined in the Credit Agreement). On October 11, 2018, the Company purchased $50.2 million of face value of the Term Loan for $50.0 million, a discount to par value of 0.40%. On March 18, 2019, the Company purchased $25.4 million of face value of the Term Loan for $25.0 million, a discount to par value of 1.50%. Amounts outstanding under the Credit Agreement are guaranteed by Cumulus Media Intermediate Inc. (“Intermediate Holdings”), which is a subsidiary of the Company, and the present and future wholly-owned subsidiaries of Holdings that are not borrowers thereunder, subject to certain exceptions as set forth in the Credit Agreement (the “Guarantors”) and secured by a security interest in substantially all of the assets of Holdings, the subsidiaries of Holdings party to the Credit Agreement as borrowers, and the Guarantors. As of December 31, 2018, the Company was compliance with all required covenants under the Credit Agreement. Revolving Credit Agreement On August 17, 2018, Holdings entered into a $50.0 million revolving credit facility (the “Revolving Credit Facility”) pursuant to a credit agreement (the “Revolving Credit Agreement”), dated as of August 17, 2018, with certain subsidiaries of Holdings as borrowers, Intermediate Holdings as a guarantor, certain lenders, and Deutsche Bank AG New York Branch as a lender and Administrative Agent. The Revolving Credit Facility matures on August 17, 2023. Availability under the Revolving Credit Facility is tied to a borrowing base formula that is based on 85% of the accounts receivable of the borrowers and the guarantors, subject to customary reserves and eligibility criteria. Under the Revolving Credit Facility, up to $10.0 million of availability may be drawn in the form of letters of credit. Borrowings under the Revolving Credit Facility bear interest, at the option of Holdings, based on (i) LIBOR plus a percentage spread (ranging from 1.25% to 1.75%) based on the average daily excess availability under the Revolving Credit Facility or (ii) the Alternative Base Rate (as defined below) plus a percentage spread (ranging from 0.25% to 0.75%) based on the average daily excess availability under the Revolving Credit Facility. The Alternative Base Rate is defined, for any day, as the per annum rate equal to the highest of (i) the federal funds rate plus 1/2 of 1.0%, (ii) the rate identified as the “Prime Rate” and normally published in the Money Rates section of the Wall Street Journal, and (iii) one-month LIBOR plus 1.0%. In addition, the unused portion of the Revolving Credit Facility will be subject to a commitment fee ranging from 0.250% to 0.375% based on the utilization of the facility. The Revolving Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature. Events of default in the Revolving Credit Agreement include, among others: (a) the failure to pay when due the obligations owing thereunder; (b) the failure to perform (and not timely remedy, if applicable) certain covenants; (c) certain defaults and accelerations under other indebtedness; (d) the occurrence of bankruptcy or insolvency events; (e) certain judgments against Holdings or any of its subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the ability to use, any one or more of, any material FCC licenses; (g) any representation or warranty made, or report, certificate or financial statement delivered, to the lenders subsequently proven to have been incorrect in any material respect; and (h) the occurrence of a Change in Control (as defined in Credit Agreement). Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Revolving Credit Agreement and the ancillary loan documents as a secured party. The Revolving Credit Agreement does not contain any financial maintenance covenants with which the Company must comply. However, if average excess availability under the Revolving Credit Facility is less than the greater of (a) 12.50% of the total commitments thereunder or (b) $5.0 million, the Company must comply with a fixed charge coverage ratio of not less than 1.0:1.0. Amounts outstanding under the Revolving Credit Agreement are guaranteed by Intermediate Holdings and the present and future wholly-owned subsidiaries of Holdings that are not borrowers thereunder, subject to certain exceptions as set forth in the Revolving Credit Agreement (the “Revolver Guarantors”) and secured by a security interest in substantially all of the assets of Holdings, the subsidiaries of Holdings party to the Credit Agreement as borrowers, and the Revolver Guarantors. As of December 31, 2018, $2.8 million was outstanding in the form of a letter of credit under the Revolving Credit Facility. As of December 31, 2018, the Company was in compliance with all required covenants under the Revolving Credit Agreement. Canceled Credit Agreement The Canceled Credit Agreement consisted of a term loan with a stated maturity date in December 2020. At December 31, 2017, there was $1.7 billion outstanding under the Predecessor Term Loan. Amounts outstanding under the Predecessor Term Loan amortized at a rate of 1.0% per annum of the original principal amount of the Predecessor Term Loan, payable quarterly, with the balance payable on the maturity date. Borrowings under the Predecessor Term Loan bore interest based on the Base Rate (as defined below) or LIBOR, plus 3.25% on LIBOR-based borrowings and 2.25% on Base Rate-based borrowings. LIBOR-based borrowings were subject to a LIBOR floor of 1.0%. Base Rate-based borrowings were subject to a Base Rate floor of 2.0%. Base Rate was defined, for any day, as the rate per annum equal to the highest of (i) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 0.5%, (ii) the prime commercial lending rate of JPMorgan Chase Bank, N.A., as established from time to time, and (iii) 30 day LIBOR plus 1.0%. As a result of the filing of the Bankruptcy Petitions, Old Cumulus was required to make adequate protection payments on the Predecessor Term Loan. The amounts of these payments were calculated under the same terms as the interest and at the rates described above. During the pendency of Bankruptcy Petitions, ASC 852 required Old Cumulus to recognize the adequate protection payments as reductions in the principal balance of the Predecessor Term Loan. As a result, Old Cumulus applied adequate protection payments of approximately $37.8 million to the principal balance of the Predecessor Term Loan for the period from January 1, 2018 through June 3, 2018, which in turn, caused interest expense in 2018 to be lower by approximately $37.1 million than it would have been absent the filing of the Bankruptcy Petitions. On the Effective Date, the Predecessor Term Loan was canceled and all liabilities thereunder were discharged. 7.75% Senior Notes On May 13, 2011, Old Cumulus issued the 7.75% Senior Notes. On September 16, 2011, Old Cumulus and one of its subsidiaries entered into a supplemental indenture with the trustee under the indenture governing the 7.75% Senior Notes which provided for, among other things, the (i) assumption by such subsidiary of all obligations of Old Cumulus related to the 7.75% Senior Notes; (ii) substitution of that subsidiary for Old Cumulus as issuer; (iii) release of Old Cumulus from all obligations as original issuer; and (iv) guarantee by Old Cumulus of all of the subsidiary issuer's obligations, in each case under the indenture and the 7.75% Senior Notes. Interest on the 7.75% Senior Notes was payable May 1 and November 1 of each year. The 7.75% Senior Notes were scheduled to mature on May 1, 2019. While under bankruptcy protection, Old Cumulus did not make interest payments or recognize interest expense on the 7.75% Senior Notes. As a result, Old Cumulus's interest expense for the period from January 1, 2018 through June 3, 2018, was approximately $22.1 million lower than it would have been absent the filing of the voluntary petitions for reorganization. On the Effective Date, the 7.75% Senior Notes were canceled and all liabilities thereunder were discharged. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The three levels of the fair value hierarchy to be applied when determining fair value of financial instruments are described below: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities; and Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table shows the gross amount and fair value of the Term Loan, the Predecessor Term Loan and the 7.75% Senior Notes (dollars in thousands):
As of December 31, 2018, the Company obtained trading prices from a third party of 95.13% to calculate the fair value of the Term Loan. As of December 31, 2017, Old Cumulus obtained trading prices from a third party of 86.0% to calculate the fair value of the Predecessor Term Loan, and 17.4% to calculate the fair value of the 7.75% Senior Notes. |
Stockholders' Equity |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Successor Common Stock Pursuant to the Company’s amended and restated certificate of incorporation (the “Charter”), the Company is authorized to issue an aggregate of 300,000,000 shares of stock divided into three classes consisting of: (i) 100,000,000 shares of new Class A common stock; (ii) 100,000,000 shares of new Class B common stock; and (iii) 100,000,000 shares of preferred stock. Each share of new Class A common stock is entitled to one vote per share on each matter submitted to a vote of the Company’s stockholders. Except as provided below and as otherwise required by the Charter, the Company’s bylaws or by applicable law, the holders of new Class A common stock shall vote together as one class on all matters submitted to a vote of stockholders generally (or if any holders of shares of preferred stock are entitled to vote together with the holders of common stock, as a single class with such holders of shares of preferred stock). Holders of new Class B common stock are generally not entitled to vote such shares on matters submitted to a vote of the Company’s stockholders. Notwithstanding the foregoing, holders of new Class B common stock are entitled to one vote per share of new Class B common stock, voting as a separate class, on any proposed amendment or modification of any specific rights or obligations that affect holders of new Class B common stock and that do not similarly affect the rights or obligations of the holders of new Class A common stock. In addition, holders of new Class B common stock are entitled to one vote per share of new Class B common stock, voting together with the holders of new Class A common stock, on each of the following matters, if and only if any such matter is submitted to a vote of the stockholders (provided that the Company may take action on any of the following without a vote of the stockholders to the extent permitted by law):
The Charter and bylaws do not provide for cumulative voting. The holders of a plurality of the shares of new common stock entitled to vote and present in person or represented by proxy at any meeting at which a quorum is present and which is called for the purpose of electing directors will be entitled to elect the directors of the Company. The holders of a majority of the shares of new common stock issued and outstanding and entitled to vote, and present in person or represented by proxy, will constitute a quorum for the transaction of business at all meetings of the stockholders. Subject to the preferences applicable to any preferred stock outstanding at any time, if any, the holders of shares of new common stock shall be entitled to receive such dividends and other distributions in cash, property or shares of stock as may be declared thereon by the Board from time to time out of the assets or funds legally available; except that in the case of dividends or other distributions payable on the new Class A common stock or new Class B common stock in shares of such stock, including distributions pursuant to stock splits or dividends, only new Class A common stock will be distributed with respect to new Class A common stock and only new Class B common stock will be distributed with respect to new Class B common stock. In no event will any of the new Class A common stock or new Class B common stock be split, divided or combined unless each other class is proportionately split, divided or combined. As of the date hereof, no shares of preferred stock are outstanding. The Charter provides that the Board may, by resolution, establish one or more classes or series of preferred stock having the number of shares and relative voting rights, designations and other rights, preferences, and limitations as may be fixed by them without further stockholder approval. The holders of any such preferred stock may be entitled to preferences over holders of common stock with respect to dividends, or upon a liquidation, dissolution, or the Company’s winding up, in such amounts as are established by the resolutions of the Board approving the issuance of such shares. The new Class B common stock is convertible at any time, or from time to time, at the option of the holders (provided that the prior consent of any governmental authority required to make such conversion lawful shall have been obtained and a determination by the Company has been made that the applicable holder does not have an attributable interest in another entity that would cause the Company to violate applicable law) into new Class A common stock on a share-for-share basis. No holder of new common stock has any preemptive right to subscribe for any shares of the Company’s capital stock issuable in the future. If the Company is liquidated (either partially or completely), dissolved or wound up, whether voluntarily or involuntarily, the holders of new common stock shall be entitled to share ratably in the Company’s net assets remaining after payment of all liquidation preferences, if any, applicable to any outstanding preferred stock. In connection with the Company’s emergence from Chapter 11 and in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 1145 of the Bankruptcy Code, the Company issued a total of 11,052,211 shares of new Class A common stock, 5,218,209 shares of new Class B common stock, 3,016,853 Series 1 warrants and issued or will issue 712,736 Series 2 warrants to holders of certain claims against the Predecessor Company. The holders of claims with respect to the Predecessor Term Loan received 83.5% of the new common stock and warrants issued. The holders of unsecured claims, including claims arising from the 7.75% Senior Notes, received, or will receive in the aggregate, 16.5% of the new common stock and warrants issued. During the period from June 4, 2018 to December 31, 2018, certain holders of new Class B common stock elected to exchange 1,692,849 shares of new Class B common stock for an equal number of shares of new Class A common stock. As of December 31, 2018, the Successor Company had 16,555,404 aggregate issued and outstanding shares of new common stock consisting of:
Successor Stock Purchase Warrants On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, as warrant agent. In accordance with the Plan and pursuant to the Warrant Agreement, on the Effective Date, the Company (i) issued 3,016,853 Series 1 warrants to purchase shares of new Class A common stock or new Class B common stock, on a one-for-one basis with an exercise price of $0.0000001 per share, to certain claimants with claims against the Predecessor Company and (ii) issued or will issue 712,736 Series 2 warrants to purchase shares of new Class A common stock or new Class B common stock on a one-for- one basis with an exercise price of $0.0000001 per share, to other claimants. The Warrants expire on June 4, 2038. The number of shares of new common stock for which a Warrant is exercisable is subject to adjustment from time to time upon the occurrence of specified events, including: (1) the subdivision or combination of the new common stock into a greater or lesser number of shares (2) upon a reclassification or recapitalization of the Company in which holders of new common stock are entitled to receive cash, stock or securities in exchange for new common stock and (3) a Change of Control (as defined in the Warrant Agreement). The Communications Act of 1934, as amended (the “Communications Act”) restricts the Company from having more than 25% of its capital stock owned or voted by non-U.S. persons, foreign governments or non-U.S. corporations. The Company applied for a declaratory ruling from the FCC to increase the level of foreign ownership of the Company greater than that permitted under the Communications Act. Pursuant to the Warrant Agreement, upon receipt of the declaratory ruling from the FCC, the Company is required to exchange new common stock for outstanding Warrants to the extent permitted by the declaratory ruling, subject to proration among the holders of Warrants as set forth therein. If the declaratory ruling will not allow the Company to exchange for new common stock for all of the outstanding Warrants, then, in addition to proration among holders, all remaining Series 2 warrants will be mandatorily exchanged for Series 1 warrants. Predecessor Common Stock The Predecessor Company was authorized to issue an aggregate of 268,830,609 shares of stock divided into four classes consisting of:
In accordance with the Plan, each share of old common stock outstanding prior to the Effective Date, including all options, warrants or other rights, including rights issued under the Rights Agreement, to purchase such old common stock, were extinguished, canceled and discharged, and each such share, option or warrant has no further force or effect. Furthermore, all of Old Cumulus’s equity award agreements under prior incentive plans, and the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect. Predecessor Warrants 2009 Warrants In June 2009, in connection with the execution of an amendment to Old Cumulus's then-existing credit agreement, the Predecessor Company issued warrants to the lenders thereunder that allowed them to acquire up to 156,250 shares of old Class A common stock at an exercise price of $1.17 per share (the “2009 Warrants”). None of the 2009 warrants were converted during the period from December 31, 2017 to June 3, 2018, and as of such date there were 40,057 of the 2009 Warrants outstanding. The Predecessor 2009 Warrants were canceled in their entirety as of the Effective Date. Citadel Warrants As a component of Old Cumulus’s September 16, 2011 acquisition of Citadel Broadcasting Corporation (the “Citadel Merger”) and the related financing transactions, the Predecessor Company issued warrants to purchase an aggregate of 9.0 million shares of old Class A common stock (the “Citadel Warrants”) under a warrant agreement dated September 16, 2011. The Citadel Warrants were exercisable at any time prior to June 3, 2030 at an exercise price of $0.01 per share with each Citadel warrant providing the right to purchase one share. As of June 3, 2018, 31,955 Citadel Warrants remained outstanding. The Citadel Warrants were canceled in their entirety as of the Effective Date. Crestview Warrants Also on September 16, 2011, but pursuant to a separate warrant agreement, Old Cumulus issued warrants to purchase 1.0 million shares of Class A common stock with an exercise price, as adjusted, of $34.56 per share (the “Crestview Warrants”). As of June 3, 2018, all 1.0 million Crestview Warrants remained outstanding. The Crestview Warrants were canceled in their entirety as of the Effective Date. |
Stock-Based Compensation Expense |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense | Stock-Based Compensation Expense Successor Share-Based Compensation In accordance with the Plan and the approval of the Board, the Long-Term Incentive Plan (the “Incentive Plan”) became effective as of the Effective Date. The Incentive Plan is intended to, among other things, help attract, motivate and retain key employees and directors and to reward them for making major contributions to the success of the Company. The Incentive Plan permits awards to be made to employees, directors, or consultants of the Company or an affiliate of the Company. Unless otherwise determined by the Board, the Board’s compensation committee will administer the Incentive Plan. The Incentive Plan generally provides for the following types of awards:
The aggregate number of shares of new Class A common stock reserved for issuance pursuant to the Incentive Plan is 2,222,223 on a fully diluted basis. Awards can be made under the Incentive Plan for a period of ten years from June 4, 2018, subject to the right of the stockholders and the Board to terminate the Incentive Plan at any time. On or about the Effective Date and pursuant to the Plan, the Company granted 562,217 restricted stock units (“RSUs”) and 562,217 stock options (“Options”) under the Incentive Plan and the terms of the relevant restricted stock unit agreements (the “Restricted Stock Unit Agreements”) and stock option agreements (the “Option Agreements”), as applicable, to certain employees, including its executive officers (collectively, “Management”), representing an aggregate of 1,124,434 shares of new Class A common stock (collectively, the “Management Emergence Awards”). Fifty percent (50%) of the RSUs granted to Management vest ratably on each of December 31, 2018, 2019 and 2020, subject to certain performance-based criteria. Of the remaining fifty percent (50%) of the RSUs and one hundred percent (100%) of the Options granted to Management, 30% will vest on or about each of the first two anniversaries of the issuance date, and 20% will vest on or about each of the third and fourth anniversaries of the issuance date. The vesting of each of the Management Emergence Awards is also subject to, among other things, each such employee’s continued employment with the Company. If an employee’s employment is terminated by the Company or its subsidiaries without Cause, by the employee for Good Reason (each, as defined in the award agreement) or by reason of death or Disability (as defined in the award agreement), such employee will become vested in an additional tranche of the unvested Management Emergence Awards as if the employee’s employment continued for one (1) additional year following the qualifying termination date; provided, that with respect to the Chief Executive Officer and Chief Financial Officer, (i) an amount equal to 50% of the unvested components of the Management Emergence Awards will accelerate and vest (75% if such termination occurs on or before the first (1st) anniversary of the Effective Date) and (ii) vested Options will remain outstanding until the expiration date of such Option. If an employee’s employment is terminated by the Company or its subsidiaries without Cause or by the employee for Good Reason, in either instance at any time within the three month period immediately preceding, or the twelve month period immediately following, a Change in Control (as defined in the award agreement), such employee will become vested in all unvested Management Emergence Awards. In addition, on or about the Effective Date and pursuant to the Plan, the Company granted each non-employee director certain RSUs and Options under the Incentive Plan and the terms of the relevant Restricted Stock Unit Agreements and Option Agreements, as applicable, representing an aggregate of 56,721 shares of new Class A common stock (the “Director Emergence Awards”). The RSUs and Options granted to each non-employee director vest in four equal installments on the last day of each calendar quarter, commencing on June 30, 2018. The vesting of each of the Director Emergence Awards is also subject to, among other things, each such non-employee director’s continued role as a director with the Company. Upon a Change in Control, all unvested Director Emergence Awards will fully vest. For stock options with service conditions only, we utilize the Black-Scholes option pricing model to estimate the fair value of options issued. The fair value of stock options is determined by the Company’s stock price, historical stock price volatility, the expected term of the awards, risk-free interest rates and expected dividends. If other assumptions are used, the results could differ. For restricted stock awards with service conditions only, we utilize the intrinsic value method. For restricted stock awards with performance conditions, we evaluate the probability of vesting of the awards in each reporting period and adjust compensation cost based on this assessment. The total grants awarded during the period from June 4, 2018 through December 31, 2018 are presented in the table below:
There were no exercises, forfeitures or cancellations of Successor Company stock options during the period from June 4, 2018 through December 31, 2018. As of December 31, 2018, 14,180 of the Successor Company stock options were vested and 28,363 restricted stock units were exercised. As of December 31, 2018, the total fair value of vested options was $121,241 and fair value of restricted stock exercised was $425,445. The total share-based compensation expense included in “Corporate expenses” in the accompanying Consolidated Statements of Operations for the period from June 4, 2018 through December 31, 2018 was as follows (in thousands):
As of December 31, 2018, there was $12.9 million of unrecognized compensation cost related to unvested stock-based compensation arrangements. Predecessor Share-Based Compensation Upon adopting ASC 718 for awards with service conditions, the Predecessor Company made an election to recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award. In addition, the Predecessor Company made an accounting policy election to recognize forfeitures of share-based awards as they occur in the period of forfeiture rather than estimating the number of awards expected to be forfeited at the grant date and subsequently adjusting the estimate when awards are actually forfeited. For stock options with service conditions only, the Company utilized the Black-Scholes option pricing model to estimate the fair value of options issued. The fair value of stock options was determined by the Company’s stock price, historical stock price volatility, the expected term of the awards, risk-free interest rates and expected dividends. If other assumptions were used, the resulting fair value could have differed. For restricted stock awards the Company utilized the intrinsic value method. The total grants awarded during the Period from January 1, 2018 through June 4, 2018 period, and the year ended December 31, 2017 are presented in the table below:
* Upon emergence from Chapter 11, these stock option grants were extinguished. There were no exercises, forfeitures or cancellations of Predecessor Company stock options during the period from January 1, 2018 through June 3, 2018. On May 18, 2017 the Predecessor Company adopted the 2017 Supplemental Incentive Plan (the "2017 SIP"), which provided participating executives of the Company with the opportunity to earn cash payments in ratable installments over the last three quarters of 2017, based on the Company's year-to-date performance at the end of each respective period, commencing with the second quarter of 2017. In order to be eligible to participate in the 2017 SIP, each participant therein had to agree to the cancellation of all of such participant's respective outstanding equity incentive awards. During the year ended December 31, 2017, the participants forfeited an aggregate of 963,493 options. There were no exercises of Predecessor Company stock options for the year ended December 31, 2017. The total share-based compensation expense included in “Corporate expenses” in the accompanying Consolidated Statements of Operations for the period from January 1, 2018 through June 3, 2018 and the years ended December 31, 2017 and 2016 was as follows (in thousands):
As described in Note 11 “Stockholders' Equity”, all of Old Cumulus’s equity award agreements under prior incentive plans, and the awards granted pursuant thereto, were extinguished, canceled and discharged and have no further force or effect. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Under the Plan of reorganization, a substantial portion of the Predecessor Company’s prepetition debt securities and other obligations were extinguished and the Company recognized cancellation of debt income (“CODI”). The Internal Revenue Code of 1986, as amended (“IRC”), provides that a debtor in a bankruptcy case may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of any CODI realized by the debtor company as a result of the consummation of a plan of reorganization. Substantially all of the Company’s unutilized tax attributes have been eliminated as a result of the statutory reduction that occurs on the first day of the Company’s tax year subsequent to the date of emergence. In conjunction with the Plan, the Company implemented a series of internal reorganization transactions through which it transferred the assets of Old Cumulus to an indirect wholly-owned subsidiary of the Successor Company. The transfer of assets for income tax purposes results in a taxable sale of assets, whereby the Company receives a step up in the tax basis of the underlying assets transferred, resulting in a future tax benefit. The application of fresh start accounting on the Effective Date of June 4, 2018 resulted in the re-measurement of deferred income taxes associated with the revaluation of the Company’s assets and liabilities. As a result, net deferred income tax liabilities decreased $10.6 million. Income tax benefit for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016 consisted of the following (dollars in thousands):
Total income tax benefit differed from the amount computed by applying the federal statutory tax rate of 21.0% for the Successor Company period June 4, 2018 through December 31, 2018 and the Predecessor Company period January 1, 2018 through June 3, 2018 and 35.0% for the Predecessor Company years ended December 31, 2017 and 2016 as a result of the following (dollars in thousands):
The Tax Cuts and Jobs Act (“the Act”) was enacted on December 22, 2017. The Act, among other changes, reduced the US federal corporate tax rate from 35% to 21% effective January 1, 2018. At December 31, 2017, the Company had not completed its accounting for the tax effects of enactment of the Act; however, it recorded provisional estimates related to the remeasurement of deferred tax assets and liabilities based on the federal rate reduction. In accordance with Staff Accounting Bulletin No.118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), changes to these provisional amounts were required to be finalized within 12 months of the date of enactment and recorded in the period in which the analysis was completed. As of December 31, 2018, the Company finalized its accounting for the Act and recorded an adjustment to deferred tax benefit of approximately $0.9 million during 2018 related to the remeasurement of deferred tax assets and liabilities. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below (dollars in thousands):
Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences between the tax and financial reporting bases of our assets and liabilities and other tax attributes, such as net operating loss carryforwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse. At December 31, 2018, the Successor Company had recorded no valuation allowance, because of the net deferred tax liability position of the successor entity and expected future taxable income. At December 31, 2017 the Predecessor Company recorded a valuation allowance of $75.5 million. The Predecessor Company valuation allowance related to the impact of the Company's Bankruptcy Petition and corresponding changes in judgment regarding the Company's ability to recover its federal and state net operating loss carryforwards and certain other tax attributes. As a result, the Predecessor Company maintained a full valuation on federal loss carryforwards and state net operating loss carryforwards. At December 31, 2018, Company had federal net operating loss carryforwards, which are available to offset future taxable income, of approximately $37.8 million and have an indefinite carryforward period. At December 31, 2018, the Company had state net operating loss carryforwards available to offset future income of approximately $41.1 million which, if not utilized, will expire between 2023 and 2039. All tax attribute carryovers attributable to the Predecessor periods were utilized during 2018 to offset the taxable sale of assets or reduced at the end of 2018 because of attribute reduction resulting from cancellation of debt income. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. For interest and penalties, the Company recorded income tax benefit of $0.3 million for the Successor Company period from June 4, 2018 through December 31, 2018, income tax expense of $0.1 million for the Predecessor Company period from January 1, 2018 through June 3, 2018, and income tax benefit of $1.8 million for the Predecessor Company year ended December 31, 2017. The total interest and penalties accrued was $0.1 million, $0.4 million, and $0.3 million as of the Successor Company period ended December 31, 2018 and Predecessor Company periods ended June 3, 2018 and for the year ended December 31, 2017, respectively. The total unrecognized tax benefits and accrued interest and penalties at December 31, 2018 was $5.8 million. The $5.8 million represents the unrecognized tax benefits and accrued interest and penalties that, if recognized, would favorably affect the effective income tax rate in future periods. Of the $5.8 million total unrecognized tax benefits and accrued interest and penalties, $0.3 million relates to items which are expected to change significantly within the next 12 months. Substantially all federal, state, and local income tax returns have been closed for the tax years through 2014. The following table reconciles unrecognized tax benefits during the relevant years (in thousands):
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share As discussed in Note 2, "Emergence from Chapter 11", on the Effective Date, the old common stock awards and warrants then outstanding under the Company’s prior equity compensation plans were extinguished without recovery. The Company calculates basic earnings (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding, excluding restricted shares. The Company calculates diluted earnings (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including stock options and restricted stock awards. Warrants generally are included in basic and diluted shares outstanding if there is little or no consideration paid upon exercise of the Warrants. Antidilutive instruments are not considered in this calculation. The Company applies the two-class method to calculate earnings per share. Because both classes share the same rights in dividends and earnings, earnings per share (basic and diluted) are the same for both classes. The following table presents the reconciliation of basic to diluted weighted average common shares (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has non-cancelable operating leases, primarily for land, tower space, office-space, certain office equipment and vehicles. The operating leases generally contain renewal options for periods ranging from one to ten years and require the Company to pay all executory costs such as maintenance and insurance. Rental expense for operating leases was approximately $14.8 million, $21.6 million, $23.6 million, and $25.2 million for the Predecessor Company period January 1, 2018 through June 3, 2018, Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended 2016, respectively. Future minimum payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year), future minimum sublease income to be received and a lease commitment under a failed sale leaseback agreement as of December 31, 2018 are as follows (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Future Commitments The radio broadcast industry’s principal ratings service is Nielsen Audio (“Nielsen”), which publishes surveys for domestic radio markets. Certain of the Company’s subsidiaries have agreements with Nielsen under which they receive programming ratings information. The remaining aggregate obligation under the agreements with Nielsen is approximately $151.2 million, as of December 31, 2018, and is expected to be paid in accordance with the agreements through December 2021. The Company engages Katz Media Group, Inc. (“Katz”) as its national advertising sales agent. The national advertising agency contract with Katz contains termination provisions that, if exercised by the Company during the term of the contract, would obligate the Company to pay a termination fee to Katz, based upon a formula set forth in the contract. The Company is committed under various contractual agreements to pay for broadcast rights that include sports and news services and to pay for talent, executives, research, weather information and other services. The Company from time to time enters into radio network contractual obligations to guarantee a minimum amount of revenue share to contractual counterparties on certain programming in future years. As of December 31, 2018, the Company believes that it will meet all such material minimum obligations. On February 1, 2018 and March 9, 2018, respectively, the Company and Merlin Media, LLC (“Merlin”) amended their LMA under which the Company programmed two FM radio stations owned by Merlin. The Company ceased programming one of the stations (“WLUP”) on March 9, 2018, but continued to program the other FM station (“WKQX”) under the amended LMA. On April 3, 2018, the Company entered into an asset purchase agreement with Merlin, pursuant to which it agreed to purchase WKQX and certain intellectual property for $18.0 million in cash. On April 10, 2018, the Court approved the purchase and the Company made a payment in escrow of $4.75 million. On June 15, 2018, the Company closed on the purchase of WKQX. The table below summarizes the purchase price allocation among the tangible and intangible assets acquired in the WKQX purchase (dollars in thousands):
Legal Proceedings In August 2015, the Company was named as a defendant in two separate putative class action lawsuits relating to its use and public performance of certain sound recordings fixed prior to February 15, 1972 (the "Pre-1972 Recordings"). The first suit, ABS Entertainment, Inc., et. al. v, Cumulus Media Inc., was filed in the United States District Court for the Central District of California and alleged, among other things, copyright infringement under California state law, common law conversion, misappropriation and unfair business practices. On December 11, 2015, this suit was dismissed without prejudice. The second suit, ABS Entertainment, Inc., v. Cumulus Media Inc., was filed in the United States District Court for the Southern District of New York and claimed, among other things, common law copyright infringement and unfair competition. The New York lawsuit was stayed pending an appeal before the Second Circuit involving unrelated third parties over whether the owner of a Pre-1972 Recording holds an exclusive right to publicly perform that recording under New York common law. On December 20, 2016, the New York Court of Appeals held that New York common law does not recognize a right of public performance for owners of pre-1972 Recordings. As a result of that case (to which Cumulus Media Inc. was not a party) the New York case against Cumulus Media Inc., was voluntarily dismissed by the plaintiffs on April 3, 2017. On October 11, 2018, President Trump signed the Orrin G. Hatch-Bob Goodlatte Music Modernization Act into law, which, among other things, provides new federal rights going forward for owners of pre-1972 Recordings. The question of whether public performance rights existed for Pre-1972 recordings under state law prior to the enactment of the new Music Modernization Act is still being litigated in the Ninth Circuit as a result of a case filed in California. Cumulus is not a party to that case, and the Company is not yet able to determine what effect that proceeding will have, if any, on its financial position, results of operations or cash flows. The Company currently is, and expects that from time to time in the future it will be, party to, or a defendant in, various other claims or lawsuits that are generally incidental to its business. The Company expects that it will vigorously contest any such claims or lawsuits and believes that the ultimate resolution of any such known claim or lawsuit will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Quarterly Results (Unaudited) |
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Quarterly Results (Unaudited) | Quarterly Results (Unaudited) The following table presents the Company’s selected unaudited quarterly results for each of the periods and quarters during 2018 and 2017 (dollars in thousands, except per share data):
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Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | Segment Data The Company operates in two reportable segments for which there is discrete financial information available and whose operating results are reviewed by the chief operating decision maker, the Cumulus Radio Station Group and Westwood One. Cumulus Radio Station Group revenue is derived primarily from the sale of broadcasting time on our owned or operated stations to local, regional, and national advertisers. Westwood One revenue is generated primarily through network advertising on our owned or operated stations and on its approximately 8,000 affiliate stations. The Company also reports information for Corporate and Other. Corporate includes overall executive, administrative and support functions for both of the Company’s reportable segments, including accounting, finance, legal, human resources, information technology and programming functions. In 2018, we changed the allocation of certain segment employee costs to align with the management reporting structure. For comparability, we have reclassified prior year segment financial results to reflect these changes. These reclassifications only affect our segment reporting and do not impact our consolidated financial results. The Company presents segment adjusted EBITDA (“Adjusted EBITDA”) as this is the financial metric by which management and the chief operating decision maker allocate resources of the Company and analyze the performance of the Company’s reportable segments. Management also uses this measure to determine the contribution of the Company's core operations to the funding of its corporate resources utilized to manage operations and non-operating expenses including debt service and acquisitions. In addition, Adjusted EBITDA is a key metric for purposes of calculating and determining compliance with certain covenants contained in the Company’s Credit Agreement. In determining Adjusted EBITDA, the Company excludes from net income items not related to core operations and those that are non-cash including: interest, taxes, depreciation, amortization, stock-based compensation expense, gain or loss on the exchange, sale, or disposal of any assets or stations, early extinguishment of debt, local marketing agreement fees, expenses relating to acquisitions or divestitures, restructuring costs, reorganization items and non-cash impairments of assets, if any. Management believes that Adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, is commonly employed by the investment community as a measure for determining the market value of a media company and comparing the operational and financial performance among media companies. Management has also observed that Adjusted EBITDA is routinely utilized to evaluate and negotiate the potential purchase price for media companies. Given the relevance to our overall value, management believes that investors consider the metric to be extremely useful. Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), operating income, cash flows from operating activities or any other measure for determining the Company’s operating performance or liquidity that is calculated in accordance with GAAP. In addition, Adjusted EBITDA may be defined or calculated differently by other companies, and comparability may be limited. The Company’s financial data by segment is presented in the tables below (in thousands):
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 13, 2019, the Company announced that it had entered into an agreement to sell six radio stations to Educational Media Foundation (“EMF”) for $103.5 million in cash. On the same day the Company also announced that it had entered into a swap agreement with Entercom Communications Corp. (“Entercom”) under which the Company will obtain three stations in Indianapolis in exchange for three Cumulus stations in two markets. Under the terms of the agreement with EMF, EMF will acquire WYAY-FM (Atlanta, GA), WPLJ-FM (New York, NY), KFFG-FM (San Francisco, CA), WZAT-FM (Savannah, GA), WXTL-FM (Syracuse, NY), and WRQX-FM (Washington, DC) from the Company for a gross purchase price of $103.5 million. Under the terms of the swap agreement with Entercom, the Company will receive WNTR-FM, WXNT- AM, and WZPL-FM in Indianapolis and Entercom will receive WNSH-FM (New York, NY) and WMAS-FM and WHLL-AM (both in Springfield, MA). In connection with the swap agreement, each party will commence a local marketing agreement to program the other party’s stations beginning on March 1, 2019. The transactions are subject to customary closing conditions, including regulatory approval. The Company expects to complete both transactions during the second quarter of 2019. |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II CUMULUS MEDIA INC. FINANCIAL STATEMENT SCHEDULE VALUATION AND QUALIFYING ACCOUNTS
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Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | Cumulus Media Inc. (and its consolidated subsidiaries, except as the context may otherwise require, “CUMULUS MEDIA,” “we,” “us,” “our,” or the “Company”) is a Delaware corporation, organized in 2018, and successor to a Delaware corporation with the same name that was organized in 2002. Nature of Business A leader in the radio broadcasting industry, CUMULUS MEDIA combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million people reached each week through its 433 owned-and-operated stations broadcasting in 88 U.S. media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Together, the Cumulus Radio Station Group and Westwood One platforms make CUMULUS MEDIA one of the few media companies that can provide advertisers with national reach and local impact. The Cumulus Radio Station Group and Westwood One are the exclusive radio broadcast partners to some of the largest brands in sports, entertainment, news, and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, and more. Additionally, the Company is the nation's leading provider of country music and lifestyle content through its NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events. |
Basis of Presentation | Basis of Presentation As previously disclosed, on November 29, 2017 (the “Petition Date”), CM Wind Down Topco Inc. (formerly known as Cumulus Media Inc.), a Delaware corporation (“Old Cumulus”) and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Petitions”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the "Chapter 11 Cases") were jointly administered under the caption In re Cumulus Media Inc., et al, Case No. 17-13381. On May 10, 2018, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law and Order Confirming the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 769] (the “Confirmation Order”), which confirmed the First Amended Joint Plan of Reorganization of Cumulus Media Inc. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 446] (the “Plan”), as modified by the Confirmation Order. On June 4, 2018 (the “Effective Date”), Old Cumulus satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan was substantially consummated, and Old Cumulus and the other Debtors emerged from Chapter 11. On June 29, 2018, the Bankruptcy Court entered an order closing the Chapter 11 Cases of all of the Debtors other than Old Cumulus, whose case will remain open until its estate has been fully administered including resolving outstanding claims and the Bankruptcy Court enters an order closing its case. In connection with its emergence, Old Cumulus implemented a series of internal reorganization transactions authorized by the Plan pursuant to which it transferred substantially all of its remaining assets to an indirectly wholly owned subsidiary of reorganized Cumulus Media Inc. (formerly known as CM Emergence Newco Inc.), a Delaware corporation (“CUMULUS MEDIA” or the “Company”), prior to winding down its business. References to “Successor” or “Successor Company” relate to the balance sheet and results of operations of CUMULUS MEDIA on and subsequent to June 4, 2018. References to “Predecessor”, “Predecessor Company” or “Old Cumulus” refer to the balance sheet and results of operations of Old Cumulus prior to June 4, 2018. Upon filing for bankruptcy and up through and including the emergence from Chapter 11 on the Effective Date, the Company applied Accounting Standards Codification (“ASC”) 852 - Reorganizations (“ASC 852”) in preparing its consolidated financial statements (see Note 2, “Emergence from Chapter 11” and Note 3 “Fresh Start Accounting”). As a result of the application of fresh start accounting and the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and consequently the consolidated financial statements on and after June 4, 2018 are not comparable to the consolidated financial statements prior to that date. Refer to Note 3, “Fresh Start Accounting” for additional information. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Reportable Segments | Reportable Segments The Company operates in two reportable segments, for which there is discrete financial information available and whose operating results are reviewed by the chief operating decision maker, the Cumulus Radio Station Group and Westwood One. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including significant estimates related to revenue recognition, bad debts, intangible assets, income taxes, stock-based compensation, contingencies, litigation, valuation assumptions for impairment analysis, certain expense accruals and, if applicable, purchase price allocation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, and which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts and results may differ materially from these estimates. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and certain items that are excluded from net income (loss) and recorded as a separate component of stockholders' equity (deficit). During the years ended December 31, 2018 and 2017, the Company had no items of other comprehensive income (loss) and, therefore, comprehensive income (loss) does not differ from reported net income (loss). |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considered all highly liquid investments with original maturities of three months or less to be cash equivalents. |
Accounts Receivable, Allowance for Doubtful Accounts and Concentration of Credit Risk | Accounts Receivable, Allowance for Doubtful Accounts and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determined the allowance based on several factors, including the length of time receivables are past due, trends and current economic factors. All balances are reviewed and evaluated quarterly on a consolidated basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. In the opinion of management, credit risk with respect to accounts receivable is limited as a result of the large number of customers and the geographic diversification of the Company’s customer base. The Company performs credit evaluations of its customers as needed and believes that adequate allowances for any uncollectible accounts receivable are maintained. |
Assets Held for Sale | Assets Held for Sale During the year ended December 31, 2015, the Company entered into an agreement to sell certain land in the Company's Washington, DC market to a third party. The asset was classified as held for sale in the Consolidated Balance Sheet at December 31, 2016. At December 31, 2017, the sale of this asset was subject to Bankruptcy Court approval, and consequently, the asset no longer met the definition of held for sale and was classified on the Consolidated Balance Sheet as Property and Equipment, net. As a result of the Company's emergence from Chapter 11 and as of December 31, 2018, the asset again met the criteria to be classified as held for sale at fair value less estimated selling costs in the Consolidated Balance Sheet. The closing of the transaction is subject to various conditions and approvals which remain pending. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Property and equipment acquired in business combinations accounted for under the purchase method of accounting are recorded at their estimated fair values on the date of acquisition. Equipment held under capital leases is stated at the present value of minimum future lease payments. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets. Equipment held under capital leases and leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the remaining term of the lease. Depreciation of construction in progress is not recorded until the assets are placed into service. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. |
Intangible Assets and Goodwill | Intangible Assets As of December 31, 2018, the Company’s intangible assets are comprised of broadcast licenses and certain other intangible assets. Intangible assets acquired in a business combination which are determined to have an indefinite useful life, including the Company’s broadcast licenses, are not amortized, but instead tested for impairment at least annually, or if a triggering event occurs. Intangible assets with definite useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In determining that the Company’s broadcast licenses qualified as indefinite lived intangibles, management considered a variety of factors including the Federal Communications Commission’s (“FCC”) historical record of renewing broadcast licenses, the cost to the Company of renewing such licenses, the relative stability and predictability of the radio industry and the relatively low level of capital investment required to maintain the physical plant of a radio station. The Company's evaluation of the recoverability of its indefinite-lived assets, which include FCC licenses and goodwill, is based on certain judgments and estimates. Future events may impact these judgments and estimates. If events or changes in circumstances were to indicate that an asset’s carrying value is not recoverable, a write-down of the asset would be recorded through a charge to operations. |
Debt Issuance Costs | Debt Issuance Costs The costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the related debt using the effective interest method. |
Revenue Recognition | Revenue Recognition Revenue is derived primarily from the sale of commercial airtime to local and national advertisers. On January 1, 2018 the Company adopted Accounting Standards Update No. 2014-09, Revenue From Contracts with Customers ("ASC 606") using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented in accordance with ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under ASC 605 - Revenue Recognition ("ASC 605"). Under current and prior revenue guidance, revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those good or services. Broadcast advertising revenue is recognized as commercials are broadcast. |
Local Marketing Agreements | Local Marketing Agreements A number of radio stations, including certain of our stations, have entered into Local Marketing Agreements (“LMAs”). In a typical LMA, the licensee of a station makes available, for a fee and reimbursement of its expenses, airtime on its station to a party which supplies programming to be broadcast during that airtime, and collects revenues from advertising aired during such programming. LMAs are subject to compliance with the antitrust laws and the Communications Laws, including the requirement that the licensee must maintain independent control over the station and, in particular, its personnel, programming, and finances. |
Stock-based Compensation Expense | Stock-based Compensation Expense Stock-based compensation expense recognized for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016, was $3.4 million, $0.2 million, $1.6 million, and $2.9 million, respectively. For awards with service conditions, stock-based compensation expense is recognized on a straight-line basis over the requisite service period for the entire award. In addition, the Successor Company made an accounting policy election to recognize forfeitures of share-based awards as they occur in the period of forfeiture rather than estimating the number of awards expected to be forfeited at the grant date and subsequently adjusting the estimate when awards are actually forfeited. For stock options with service conditions only, the Company utilizes the Black-Scholes option pricing model to estimate the fair value of options issued. The fair value of stock options is determined by the Company’s stock price, historical stock price volatility, the expected term of the award, risk-free interest rates and expected dividends. If other assumptions are used, the results could differ. For restricted stock awards with service conditions only, the Company utilizes the intrinsic value method. For restricted stock awards with performance conditions, the Company evaluates the probability of vesting of the awards in each reporting period and calculates stock-based compensation expense based on this assessment. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for deferred income taxes. Except for goodwill, deferred income taxes are recognized for all temporary differences between the tax and financial reporting bases of our assets and liabilities based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The Tax Cuts and Jobs Act (“the Act”) was enacted on December 22, 2017. The Act, among other changes, reduced the US federal corporate tax rate from 35% to 21% effective January 1, 2018. During the fourth quarter of 2018, the Company completed its accounting for the tax effects of enactment of the Act and recorded an adjustment to deferred tax benefit of approximately $0.9 million during 2018 related to the remeasurement of deferred tax assets and liabilities. See Note 13, “Income Taxes” for further discussion. A valuation allowance is recorded against a deferred tax asset to measure its net realizable value when it is not more likely than not that the benefits of its recovery will be recognized. The Company continually reviews the adequacy of our valuation allowance, if any, on our deferred tax assets and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740, Income Taxes ("ASC 740"). See Note 13, “Income Taxes” for further discussion. |
Earnings per Share | Earnings Per Share Basic income (loss) per share is computed on the basis of the weighted average number of common shares outstanding. The Company allocates undistributed net income (loss) from continuing operations between each class of common stock on an equal basis after any allocations for preferred stock dividends in accordance with the terms of the Company’s third amended and restated certificate of incorporation, as amended (the “amended and restated certificate of incorporation (the "Charter”)). Non-vested restricted shares of Class A common stock and Company Warrants (defined below) are considered participating securities for purposes of calculating basic weighted average common shares outstanding in periods in which the Company recorded net income. Diluted earnings per share is computed in the same manner as basic earnings per share after assuming the issuance of common stock for all potentially dilutive equivalent shares, which includes stock options and certain other outstanding warrants to purchase common stock. Antidilutive instruments are not considered in this calculation. Under the two-class method, net income is allocated to common stock and participating securities to the extent that each security may share in earnings, as if all of the earnings for the period had been distributed. Earnings are allocated to each participating security and common share equally, after deducting dividends declared or accreted on preferred stock. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The carrying values of cash equivalents, restricted cash, accounts receivables, accounts payable, trade payables and receivables and accrued expenses approximate fair value because of the short term to maturity of these instruments (See Note 10, "Fair Value Measurements"). |
Accounting for National Advertising Agency Contract | Accounting for National Advertising Agency Contract The Company has engaged Katz Media Group, Inc. (“Katz”) as its national advertising sales agent. The Company’s contract with Katz has several economic elements that principally reduce the overall expected commission rate below the stated base rate. The Company estimates the overall expected commission rate over the entire contract period and applies that rate to commissionable revenue throughout the contract period with the goal of estimating and recording a stable commission rate over the life of the contract. The potential commission adjustments are estimated and combined in the Consolidated Balance Sheets with the contractual termination liability. That liability is accreted to commission expense to effectuate the stable commission rate over the term of the contract. Over the term of the contract with Katz, management updates its assessment of the effective commission expense attributable to national sales in an effort to record a consistent commission rate in each period. The Company’s accounting for and calculation of commission expense to be realized over the life of the Katz contract requires management to make estimates and judgments that affect reported amounts of commission expense in each period. Actual results may differ from management’s estimates. |
Variable Interest Entities | Variable Interest Entities The Company accounted for entities qualifying as variable interest entities (“VIEs”) in accordance with ASC Topic 810, Consolidation (“ASC 810”). VIEs are required to be consolidated by the primary beneficiary. The primary beneficiary is the entity that holds the majority of the beneficial interests in the VIE. A VIE is an entity for which the primary beneficiary’s interest in the entity can change with changes in factors other than the amount of investment in the entity. From time to time, the Company enters into an LMA in connection with pending acquisitions or dispositions of radio stations and the requirements of ASC 810 may apply, depending on the facts and circumstances related to each transaction. |
Adoption of New Accounting Standards and Recent Accounting Standards Updates | Adoption of New Accounting Standards ASU 2014-09 and related updates - Revenue from Contracts with Customers (“ASU 2014-09”) or (“ASC 606”). On January 1, 2018, the Company adopted ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services and satisfaction of performance obligations to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company applied the modified retrospective method to contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported under the previous accounting standards. There was not a material impact to revenues as a result of the recognition of revenue in accordance with ASC 606 for the year ended December 31, 2018, and there have not been significant changes to the Company's business processes, systems, or internal controls as a result of implementing the standard. As of December 31, 2018, the Company recorded an asset of approximately $6.5 million related to the unamortized portion of commission expense on new local direct revenue. See Note 4, “Revenues” for further details. ASU 2016-01 - Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). In January 2016, the FASB issued ASU 2016-01 which enhances the reporting model for financial instruments including aspects of recognition, measurement, presentation and disclosure. This ASU revises the accounting requirements related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This ASU also changes certain disclosure requirements associated with the fair value of financial instruments. These changes require an entity to measure, at fair value, investments in equity securities and other ownership interests in an entity - including investments in partnerships, unincorporated joint ventures and limited liability companies that do not result in consolidation and are not accounted for under the equity method - and recognize the changes in fair value within net income. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. In February 2018, the FASB issued ASU 2018-03 - Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2018-03”) which provides an option for a company to “un-elect” the measurement alternative and elect to account for the changes in the fair value of investments through current earnings for certain equity investments that do not have readily determinable fair values as well. However, once a company makes this election for a particular investment, it must apply the fair value through current earnings model to all identical investments and/or similar investments from the same issuer. Further, a company cannot elect the measurement alternative for future purchases of identical or similar investments of the same issuer. However, the Company had no financial assets and/or liabilities that fell within the requirements of this update during the 2018 fiscal year, therefore there was no impact to the Consolidated Financial Statements. The Company will adopt ASU 2018-03 on a prospective basis and un-elect the measurement alternative if applicable. ASU 2016-15 - Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). In August 2016, the FASB issued ASU 2016-15 which provides guidance for several new and/or revised disclosures pertaining to the classification of certain cash receipts and cash payments on the statement of cash flows, including contingent consideration payments made after a business acquisition. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. The Company adopted ASU 2016-15 as of January 1, 2018 and there was no impact to the Consolidated Financial Statements. ASU 2016-18 - Restricted Cash (“ASU 2016-18”). In November 2016, the FASB issued ASU 2016-18 which provides guidance for the accounting for the disclosure of restricted cash on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter. The Company adopted ASU 2016-18 as of January 1, 2018. Upon adoption of ASU 2016-18 on January 1, 2018, the Company included restricted cash balances along with cash and cash equivalents as of the end of the period and beginning of the period, respectively, in its Consolidated Cash Flows for all periods presented. Additionally, separate line items showing changes in restricted cash balances have been eliminated from the Consolidated Statement of Cash Flows. The Predecessor Company held $9 million and $8 million in restricted cash as of December 31, 2017 and December 31, 2016, respectively. ASU 2017-01 - Clarifying the Definition of a Business (“ASU 2017-01”). In January 2017, the FASB issued guidance that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The new standard is effective for fiscal years, and interim periods within fiscal years, beginning after December 15, 2017. The Company adopted ASU 2017-01 as of January 1, 2018 on a prospective basis and there was no material impact to the Consolidated Financial Statements. ASU 2017-09 - Scope of Modification Accounting (“ASU 2017-09”). In May 2017, the FASB issued an update to guidance on Topic 718, Compensation—Stock Compensation that clarifies when changes to the terms or conditions of a share-based award must be accounted for as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award, as equity or liability, changes as a result of the change in terms or conditions. ASU 2017- 09 is effective for annual periods, and interim periods within annual periods, beginning after December 15, 2017. The Company adopted ASU 2017-09 as of January 1, 2018 on a prospective basis and there was no material impact to the Consolidated Financial Statements. ASU 2018-02 - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). In February 2018, the FASB issued ASU 2018-02 which provides the option to reclassify stranded tax effects related to the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Act”) in accumulated other comprehensive income to retained earnings. The adjustment relates to the change in the U.S. corporate income tax rate. The adoption of this ASU did not impact the Company's Consolidated Financial Statements. Recent Accounting Standards Updates ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). In June 2016, the FASB issued ASU 2016-13 which requires entities to estimate loss of financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its Consolidated Financial Statements. ASU 2016-02 - Leases (“ASU 2016-02”). In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, which provides updated guidance for the accounting for leases. This update requires lessees to recognize assets and liabilities for the rights and obligations created by leases with a term longer than one year. Leases will be classified as either financing or operating, thereby impacting the pattern of expense recognition in the statement of operations. In July 2018, the FASB issued ASU 2018-10 - Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11 - Targeted Improvements (“ASU 2018-11”), which provides technical corrections and clarification to ASU 2016-02. ASU 2016-02 and amendments ASU 2018-10 and ASU 2018-11 will be effective for fiscal years beginning after December 15, 2018, and interim periods thereafter. Early adoption is permitted. The standard permits two approaches, one requiring retrospective application of the new guidance with restatement of prior years, and one requiring prospective application of the new guidance. The Company anticipates adopting this standard on January 1, 2019 using a modified retrospective approach and electing the practical expedients allowed under the standard. The Company is in the process of aggregating and evaluating lease arrangements, implementing new controls and processes, and implementing a lease accounting system. Based on a preliminary assessment, the Company expects most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption. The impact to the Company’s balance sheet is estimated to result in a 7% to 11% and 9% to 13% increase in assets and liabilities respectively. The impact on the Company's results of operations and cash flows is not expected to be material. ASU 2018-07 - Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting (“ASU 2018-07”). The standard aligns the accounting for share-based payment awards issued to employees and non- employees. Changes to the accounting for non-employee awards include: (1) equity-classified share-based payment awards issued to non-employees will now be measured on the grant date, instead of the previous requirement to re-measure the awards through the performance completion date; (2) for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition; and (3) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The guidance should be applied to all new awards granted after the date of adoption. In addition, the modified retrospective approach should be used on all liability-classified awards that have not been settled and equity- classified awards for which a measurement date has not been established by the adoption date by re-measurement at fair value as of the adoption date with a cumulative effect adjustment to opening retained earnings in the fiscal year of adoption. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than an entity’s adoption of ASC 606. The Company is currently evaluating the impact of adopting ASU 2018-07 on its Consolidated Financial Statements. ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, the FASB issued ASU 2018-13, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The update eliminates the following disclosure requirements for all entities: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the entity’s policy for the timing of transfers between levels of the fair value hierarchy, and the entity’s valuation processes for Level 3 fair value measurements. ASU 2018-13 adds the following disclosure requirements: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and for recurring and nonrecurring Level 3 fair value measurements, the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated. ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019, and interim periods thereafter. Early adoption is permitted for any removed or modified disclosures. The Company is currently evaluating the impact of adopting ASU 2016-13 on its Consolidated Financial Statements. |
Fair Value Measurements | The three levels of the fair value hierarchy to be applied when determining fair value of financial instruments are described below: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities; and Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Cash Flow Statement | The following summarizes supplemental cash flow information to be read in conjunction with the Consolidated Statements of Cash Flows for the Successor Company period from June 4, 2018 through December 31, 2018, the Predecessor Company period from January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016:
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Fresh Start Accounting (Tables) |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Reorganization Value | The following table reconciles the enterprise value to the estimated reorganization value as of the Effective Date (dollars in thousands):
(1) Difference in the estimated cash balance in the reorganization value versus the actual cash on hand as of June 3, 2018. (2) Difference in the assumed effect of deferred taxes in the reorganization value versus the actual deferred taxes as of June 3, 2018. |
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Schedule of Fresh-Start Adjustments | Reflects cash payments and the funding of professional fee escrow account from the implementation of the Plan as follows (dollars in thousands):
The adjustments set forth in the following Condensed Consolidated Balance Sheet reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs (dollars in thousands).
The Company recorded an adjustment to intangible assets of $147.9 million as follows (dollars in thousands):
Reflects net additions to restricted cash giving effect to the funding of professional fee escrow account for professional fees accrued and the payment of restructuring fees (dollars in thousands):
Liabilities subject to compromise immediately prior to the Effective Date consisted of the following (dollars in thousands):
Liabilities subject to compromise have been, or will be settled as follows in accordance with the Plan (dollars in thousands):
Reflects the cumulative impact of the fresh start accounting adjustments discussed above on accumulated deficit as follows (dollars in thousands):
Adjustment made to accumulated deficit consisted of the following (dollars in thousands):
The following table summarizes the components of property and equipment, net as of June 4, 2018, and the fair value as of the Effective Date (dollars in thousands):
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Schedule of Reorganization Items | Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Consolidated Statement of Operations as follows (dollars in thousands):
(a) Liabilities subject to compromise have been, or will be settled in accordance with the Plan. (b) Revaluation of certain assets and liabilities upon the adoption of fresh start accounting. (c) Legal, financial advisory and other professional costs directly associated with the reorganization process. (d) The carrying value of certain claims were adjusted to the estimated value of the claim that will be allowed by the Bankruptcy Court. (e) Non-cash expenses to record estimated allowed claim amounts related to rejected executory contracts. (f) Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process and the write-off of Predecessor director and officer insurance policies. As of December 31, 2018, total cash paid by the Predecessor Company related to Reorganization Items, net was $57.8 million. |
Revenues (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table presents revenues disaggregated by revenue source (dollars in thousands):
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Property and Equipment | Property and equipment consisted of the following as of December 31, 2018 and 2017 (dollars in thousands):
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Intangible Assets and Goodwill (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The carrying value of goodwill by reportable segments is as follows (dollars in thousands):
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Schedule of Indefinite-Lived Intangible Assets [Table Text Block] | The Company’s intangible assets are as follows (dollars in thousands):
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Estimated Future Amortization Expense | As of December 31, 2018, future amortization expense related to the Company's definite-lived intangible assets was estimated as follows (dollars in thousands):
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Accounts Payable and Accrued Expenses (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following as of December 31, 2018 and 2017 (dollars in thousands):
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Long-Term Debt (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Long-term Debt | The Company’s long-term debt consisted of the following at December 31, 2018 and 2017 (dollars in thousands):
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Future Maturities of Long-Term Debt | Future maturities of the Term Loan (dollars in thousands):
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Fair Value Measurements (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gross Amounts and Fair Value of Company's First Lien Term Loan, Second Lien Term Loan, Revolving Credit Facility and 7.75% Senior Notes | The following table shows the gross amount and fair value of the Term Loan, the Predecessor Term Loan and the 7.75% Senior Notes (dollars in thousands):
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Stock-Based Compensation Expense (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The total grants awarded during the period from June 4, 2018 through December 31, 2018 are presented in the table below:
The total grants awarded during the Period from January 1, 2018 through June 4, 2018 period, and the year ended December 31, 2017 are presented in the table below:
The total share-based compensation expense included in “Corporate expenses” in the accompanying Consolidated Statements of Operations for the period from January 1, 2018 through June 3, 2018 and the years ended December 31, 2017 and 2016 was as follows (in thousands):
The total share-based compensation expense included in “Corporate expenses” in the accompanying Consolidated Statements of Operations for the period from June 4, 2018 through December 31, 2018 was as follows (in thousands):
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Tax Expense (Benefit) | Income tax benefit for the Successor Company period June 4, 2018 through December 31, 2018, the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company year ended December 31, 2017 and the Predecessor Company year ended December 31, 2016 consisted of the following (dollars in thousands):
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Total Income Tax Expense (Benefit) Differed From Amount Computed by Applying Federal Statutory Tax Rate | Total income tax benefit differed from the amount computed by applying the federal statutory tax rate of 21.0% for the Successor Company period June 4, 2018 through December 31, 2018 and the Predecessor Company period January 1, 2018 through June 3, 2018 and 35.0% for the Predecessor Company years ended December 31, 2017 and 2016 as a result of the following (dollars in thousands):
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Tax Effects of Temporary Differences That Give Rise to Significant Portions of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2018 and 2017 are presented below (dollars in thousands):
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Schedule of Unrecognized Tax Benefits Roll Forward | The following table reconciles unrecognized tax benefits during the relevant years (in thousands):
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Earnings (Loss) Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings per Common Share | The following table presents the reconciliation of basic to diluted weighted average common shares (in thousands):
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments under Non-Cancelable Operating Leases | Future minimum payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year), future minimum sublease income to be received and a lease commitment under a failed sale leaseback agreement as of December 31, 2018 are as follows (in thousands):
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The table below summarizes the purchase price allocation among the tangible and intangible assets acquired in the WKQX purchase (dollars in thousands):
|
Quarterly Results (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results | The following table presents the Company’s selected unaudited quarterly results for each of the periods and quarters during 2018 and 2017 (dollars in thousands, except per share data):
|
Segment Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The Company’s financial data by segment is presented in the tables below (in thousands):
|
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Out of Period Adjustment) (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Successor | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prior Period Reclassification Adjustment | $ 4.2 | |
Predecessor | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prior Period Reclassification Adjustment | $ 6.2 | $ 4.3 |
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Dispositions) (Detail) - Land and Building - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Aug. 30, 2016 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | ||
Proceeds from Sale of Property, Plant, and Equipment | $ 110.6 | |
Gain (Loss) on Disposition of Property Plant Equipment | $ 94.0 |
Nature of Business, Basis of Presentation and Summary of Significant Accounting Policies (Local Marketing Agreements) (Detail) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 03, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
station
|
Dec. 31, 2018
USD ($)
station
|
Dec. 31, 2017
USD ($)
station
|
|
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Number of radio stations | 8,000 | 8,000 | ||
Marketing Agreement [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Number of radio stations | 2 | 2 | 4 | |
Revenue from Contract with Customer, Including Assessed Tax | $ | $ 2.6 | $ 3.5 | $ 23.9 | $ 23.2 |
Fresh Start Accounting (Reconciliation of Reorganization Value) (Detail) $ in Thousands |
Jun. 04, 2018
USD ($)
|
---|---|
Reorganizations [Abstract] | |
Enterprise Value | $ 1,675,000 |
Less: Cash balance difference (1) | (20,000) |
Less: Effect of deferred tax liability (2) | (30,000) |
Plus: Fair value of non-debt current liabilities | 114,573 |
Plus: Fair value of non-debt long term liabilities | 63,921 |
Reorganization value | $ 1,803,494 |
Fresh Start Accounting (Cash Payments) (Detail) $ in Thousands |
Jun. 04, 2018
USD ($)
|
---|---|
Reorganizations [Abstract] | |
Payment of professional fees | $ 3,118 |
Adequate protection payment | 1,326 |
Payment of contract cure claims | 20,341 |
Funding of professional fee escrow amount | 32,517 |
Other fees and expenses | 1,132 |
Net cash payments | $ 58,434 |
Fresh Start Accounting (Net Restricted Cash) (Detail) $ in Thousands |
Jun. 04, 2018
USD ($)
|
---|---|
Reorganizations [Abstract] | |
Funding of professional fee escrow account | $ 32,517 |
Payment of restructuring fees | (7,932) |
Net changes to restricted cash | $ 24,585 |
Fresh Start Accounting (Schedule of Liabilities Subject of Compromise) (Detail) - USD ($) $ in Thousands |
Jun. 04, 2018 |
Jun. 03, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Accounts payable and accrued expenses | $ 66,515 | ||
Other liabilities | 21,364 | ||
Deferred tax liability | $ 50,437 | 237,247 | |
Accounts payable, accrued expenses and other liabilities | 325,126 | ||
Accrued interest | 27,577 | ||
Long-term debt and accrued interest | 2,321,984 | ||
Total liabilities subject to compromise | 2,647,110 | 2,647,110 | |
Predecessor Company | |||
Debt Instrument [Line Items] | |||
Accounts payable and accrued expenses | $ 108,200 | ||
Total liabilities subject to compromise | $ 2,687,223 | ||
Term Loan | |||
Debt Instrument [Line Items] | |||
Total liabilities subject to compromise | $ 1,700,000 | ||
Term Loan | Predecessor Company | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,684,407 | ||
Senior Notes at 7.75% | Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 610,000 |
Fresh Start Accounting (Cumulative Impact of Reorganization Adjustments) (Detail) - USD ($) $ in Thousands |
Jun. 04, 2018 |
Jun. 03, 2018 |
---|---|---|
Reorganizations [Abstract] | ||
Total liabilities subject to compromise | $ 2,647,110 | $ 2,647,110 |
Cash payments at the Effective Date | (33,657) | |
Accounts payable | (3,215) | |
Other liabilities | (21,160) | |
Deferred tax liability | (50,437) | $ (237,247) |
Total liabilities reinstated at the Effective Date | (74,812) | |
Adjustment for deferred tax liability impact | (186,810) | |
Fair value of common stock issued to Predecessor Term Loan holders, 7.75% Senior Notes holders and unsecured creditors | (264,394) | |
Fair value of warrants issued to Predecessor Term Loan holders, 7.75% Senior Notes holders and unsecured creditors | (60,606) | |
Fair value of Term Loan provided by Predecessor Term Loan holders | (1,300,000) | |
Gain on settlement of Liabilities subject to compromise | $ 726,831 |
Fresh Start Accounting (Adjustments to Accumulated Deficit) (Detail) $ in Thousands |
Jun. 04, 2018
USD ($)
|
---|---|
Reorganizations [Abstract] | |
Cancellation of Predecessor equity | $ 1,397,917 |
Gain on settlement of Liabilities subject to compromise | 726,831 |
Income tax benefit | 184,005 |
Other items | (2,550) |
Total adjustment to retained earnings | $ 2,306,203 |
Fresh Start Accounting (Accumulated Deficit Adjustments) (Detail) $ in Thousands |
Jun. 04, 2018
USD ($)
|
---|---|
Fresh-Start Adjustment [Line Items] | |
Goodwill adjustment | $ (135,214) |
Net impact on retained earnings | 2,306,203 |
Fresh Start Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Property and equipment fair value adjustment | 121,732 |
Intangible assets fair value adjustment | (147,907) |
Goodwill adjustment | (135,214) |
Term Loan fair value adjustment | (18,017) |
Other assets and liabilities fair value adjustments | 115 |
Net loss on fresh start adjustments | (179,291) |
Tax impact on fresh start adjustments | 10,642 |
Net impact on retained earnings | $ (168,649) |
Fresh Start Accounting (Schedule on Reorganization Items Incurred) (Detail) - USD ($) $ in Thousands |
5 Months Ended | |
---|---|---|
Jun. 04, 2018 |
Jun. 03, 2018 |
|
Fresh-Start Adjustment [Line Items] | ||
Professional fees | $ (3,118) | |
Other | $ (1,132) | |
Predecessor | ||
Fresh-Start Adjustment [Line Items] | ||
Gain on settlement of Liabilities subject to compromise (a) | $ 726,831 | |
Fresh start adjustments (b) | (179,291) | |
Professional fees | (54,386) | |
Non-cash claims adjustments (d) | (15,364) | |
Rejected executory contracts (e) | (5,976) | |
Other | (5,613) | |
Reorganization items, net | $ 466,201 |
Revenues (Non-Advertising Revnues) (Detail) |
Dec. 31, 2018 |
---|---|
Minimum | |
Disaggregation of Revenue [Line Items] | |
Lessor, operating lease, term of contract | 1 year |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Lessor, operating lease, term of contract | 5 years |
Revenues (Trade and Barter Transactions) (Details) - USD ($) $ in Thousands |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Successor | ||||
Revenue from External Customer [Line Items] | ||||
Trade revenue | $ 26,516 | |||
Predecessor | ||||
Revenue from External Customer [Line Items] | ||||
Trade revenue | $ 18,973 | $ 40,080 | $ 37,691 |
Revenues (Practical Expedients) (Detail) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Contract with customer asset | $ 6.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 6.0 |
Restricted Cash (Narrative) (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Restricted cash | $ 9,000 | |
Successor | ||
Restricted cash | $ 2,454 |
Property and Equipment (Narrative) (Detail) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Successor | ||||
Depreciation expense | $ 15.2 | |||
Predecessor | ||||
Depreciation expense | $ 14.2 | $ 28.7 | $ 31.1 |
Intangible Assets and Goodwill (Changes in Goodwill) (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Jun. 04, 2018 |
Jun. 03, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Goodwill [Line Items] | ||||
Goodwill | $ (135,214) | |||
Radio Station Group | ||||
Goodwill [Line Items] | ||||
Goodwill | 0 | |||
Westwood One | ||||
Goodwill [Line Items] | ||||
Goodwill | (135,214) | |||
Predecessor | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 1,582,806 | $ 1,582,806 | ||
Accumulated impairment losses | (1,447,592) | (1,447,592) | ||
Total | 135,214 | 135,214 | ||
Predecessor | Radio Station Group | ||||
Goodwill [Line Items] | ||||
Goodwill | 1,278,526 | 1,278,526 | ||
Accumulated impairment losses | (1,278,526) | (1,278,526) | ||
Total | 0 | 0 | ||
Predecessor | Westwood One | ||||
Goodwill [Line Items] | ||||
Goodwill | 304,280 | 304,280 | ||
Accumulated impairment losses | (169,066) | (169,066) | ||
Total | $ 135,214 | $ 135,214 | ||
Successor | ||||
Goodwill [Line Items] | ||||
Total | $ 0 | 0 | ||
Successor | Radio Station Group | ||||
Goodwill [Line Items] | ||||
Total | 0 | |||
Successor | Westwood One | ||||
Goodwill [Line Items] | ||||
Total | $ 0 |
Intangible Assets and Goodwill (Estimated Future Amortization Expense) (Detail) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 25,307 |
2020 | 20,312 |
2021 | 20,211 |
2022 | 20,111 |
2023 | 16,377 |
Thereafter | 70,033 |
Total other intangibles, net | $ 172,351 |
Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Jun. 03, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Accounts payable and accrued expenses | $ 66,515 | ||
Successor | |||
Accrued employee costs | $ 23,599 | ||
Accrued third party content costs | 28,963 | ||
Accounts payable | 11,695 | ||
Accrued other | 37,063 | ||
Total accounts payable and accrued expenses | $ 101,320 | ||
Predecessor | |||
Accrued employee costs | $ 9,528 | ||
Accrued third party content costs | 5,205 | ||
Accounts payable | 1,928 | ||
Accrued other | 19,496 | ||
Total accounts payable and accrued expenses | 36,157 | ||
Accounts payable and accrued expenses | $ 108,200 |
Long-Term Debt (Future Maturities of Long-Term Debt) (Detail) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2019 | $ 13,000 |
2020 | 13,000 |
2021 | 13,000 |
2022 | 1,204,299 |
Long-term debt | $ 1,243,299 |
Long-Term Debt (7.75% Senior Note) (Detail) - 7.75% Senior Notes - USD ($) $ in Millions |
5 Months Ended | |||
---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
May 13, 2011 |
|
Debt Instrument [Line Items] | ||||
Interest rate | 7.75% | 7.75% | ||
Predecessor Company | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.75% | |||
Interest expense (decrease) increase | $ (22.1) |
Fair Value Measurements (Narrative) (Detail) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
7.75% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading prices rate to calculate the fair value | 17.40% | |
7.75% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 7.75% | 7.75% |
Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading prices rate to calculate the fair value | 95.13% | 86.00% |
Income Taxes (Income Tax Expense (Benefit)) (Detail) - USD ($) $ in Thousands |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Successor | ||||
Current income tax expense | ||||
Federal | $ 6,170 | |||
State and local | 8,888 | |||
Total current income tax | 15,058 | |||
Deferred tax benefit | ||||
Federal | (20,641) | |||
State and local | (6,770) | |||
Total deferred tax | (27,411) | |||
Net income tax benefit | $ (12,353) | |||
Predecessor | ||||
Current income tax expense | ||||
Federal | $ (1,430) | $ 0 | $ 0 | |
State and local | 4,026 | 4,504 | 1,678 | |
Total current income tax | 2,596 | 4,504 | 1,678 | |
Deferred tax benefit | ||||
Federal | (138,311) | (157,277) | (19,496) | |
State and local | (41,144) | (10,953) | (8,336) | |
Total deferred tax | (179,455) | (168,230) | (27,832) | |
Net income tax benefit | $ (176,859) | $ (163,726) | $ (26,154) |
Leases (Narrative) (Detail) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Predecessor | |||||
Operating Leased Assets [Line Items] | |||||
Rental expense for operating leases | $ 14.8 | $ 23.6 | $ 25.2 | ||
Successor | |||||
Operating Leased Assets [Line Items] | |||||
Rental expense for operating leases | $ 21.6 | ||||
Minimum | |||||
Operating Leased Assets [Line Items] | |||||
Operating leases renewal option period | 1 year | ||||
Maximum | |||||
Operating Leased Assets [Line Items] | |||||
Operating leases renewal option period | 10 years |
Commitments and Contingencies (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Apr. 10, 2018 |
Dec. 31, 2018 |
Apr. 03, 2018 |
|
Merlin Media LLC | |||
Supply Commitment [Line Items] | |||
Asset purchase agreement | $ 18,000 | ||
Escrow payment | $ 4,750 | ||
Nielsen Audio | |||
Supply Commitment [Line Items] | |||
Remaining aggregate obligation under the agreements with Nielsen Audio | $ 151,200 |
Commitments and Contingencies (Acquisition) (Detail) - WKQX $ in Thousands |
Jun. 15, 2018
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Broadcast licenses | $ 17,476 |
Property and equipment | 524 |
Total purchase price | $ 18,000 |
Quarterly Results (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 03, 2018 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Jun. 03, 2018 |
Jun. 30, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Predecessor Company | ||||||||||||||
Net revenue | $ 190,245 | $ 263,679 | $ 293,861 | $ 287,240 | $ 290,531 | $ 264,030 | $ 453,924 | $ 453,924 | $ 1,135,662 | $ 1,141,400 | ||||
Operating income (loss) | 28,435 | 25,144 | (321,225) | 42,931 | 47,326 | 20,522 | 53,579 | (210,446) | (408,789) | |||||
(Loss) income before income taxes | 524,416 | (5,119) | (376,307) | 6,531 | 12,906 | (13,421) | 519,297 | (370,291) | (536,874) | |||||
Net (loss) income | $ 701,157 | $ (5,001) | $ (206,116) | $ 1,274 | $ 5,672 | $ (7,395) | $ 696,156 | $ (206,565) | $ (510,720) | |||||
Basic: | ||||||||||||||
(Loss) income per share (in USD per share) | $ 23.90 | $ (0.17) | $ (7.03) | $ 0.04 | $ 0.19 | $ (0.25) | ||||||||
Diluted: | ||||||||||||||
(Loss) income per share (in USD per share) | $ 23.90 | $ (0.17) | $ (7.03) | $ 0.04 | $ 0.19 | $ (0.25) | ||||||||
Successor Company | ||||||||||||||
Net revenue | $ 95,004 | $ 309,178 | $ 282,254 | $ 686,436 | ||||||||||
Operating income (loss) | 13,738 | 45,562 | 43,355 | 102,649 | ||||||||||
(Loss) income before income taxes | 7,586 | 23,695 | 17,791 | 49,072 | ||||||||||
Net (loss) income | $ 4,980 | $ 43,732 | $ 12,713 | $ 61,425 | ||||||||||
Basic: | ||||||||||||||
(Loss) income per share (in USD per share) | $ 0.25 | $ 2.19 | $ 0.64 | |||||||||||
Diluted: | ||||||||||||||
(Loss) income per share (in USD per share) | $ 0.25 | $ 2.18 | $ 0.63 |
Segment Data (Narrative) (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2018
segment
station
| |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 2 |
Affiliate stations | station | 8,000 |
Subsequent Events (Detail) - Subsequent Event $ in Millions |
Feb. 13, 2019
USD ($)
market
station
|
---|---|
Educational Media Foundation | |
Subsequent Event [Line Items] | |
Number of radio stations selling | station | 6 |
Proceeds from divestiture of businesses | $ | $ 103.5 |
Entercom | |
Subsequent Event [Line Items] | |
Proceeds from divestiture of businesses | $ | $ 103.5 |
Number of radio stations exchanging | station | 3 |
Number of markets for radio stations exchanging | market | 2 |
Schedule II, Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 03, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Allowance for doubtful accounts | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | $ 4,322 | $ 0 | $ 4,691 | $ 4,923 |
Charged to Costs and Expenses | 5,993 | 5,313 | 5,808 | 1,103 |
Additions/(Deductions) | (10,315) | 0 | (6,177) | (1,335) |
Balance at End of Period | 0 | 5,313 | 4,322 | 4,691 |
Valuation allowance on deferred taxes | ||||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | 75,460 | 104,629 | 17,205 | 17,173 |
Charged to Costs and Expenses | 29,169 | 58,255 | 32 | |
Additions/(Deductions) | 0 | (104,629) | 0 | 0 |
Balance at End of Period | $ 104,629 | $ 0 | $ 75,460 | $ 17,205 |
Label | Element | Value |
---|---|---|
Successor [Member] | ||
Intangible Assets, Net (Including Goodwill) | us-gaap_IntangibleAssetsNetIncludingGoodwill | $ 1,130,958,000 |
Unrecognized Tax Benefits | us-gaap_UnrecognizedTaxBenefits | 8,466,000 |
Predecessor [Member] | ||
Unrecognized Tax Benefits | us-gaap_UnrecognizedTaxBenefits | 8,587,000 |
Indefinite-lived Intangible Assets [Member] | Successor [Member] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | us-gaap_IndefiniteLivedIntangibleAssetsExcludingGoodwill | 939,700,000 |
Finite-Lived Intangible Assets [Member] | Successor [Member] | ||
Finite-Lived Intangible Assets, Net | us-gaap_FiniteLivedIntangibleAssetsNet | $ 191,258,000 |
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