Welcome to the Cumulus Media Quarterly Earnings Conference Call. I’ll now turn it over to Collin Jones, Senior Vice President of Corporate Development & Strategy. Sir, you may proceed.

Thank you, Operator. Welcome, everyone, to our second quarter 2020 earnings conference call. I'm joined today by our President and CEO, Mary Berner; and our CFO, Frank Lopez-Balboa. Before we start, please note that certain statements in today's press release and discussed on this call may constitute forward-looking statements under federal securities laws. Actual results may differ materially from the results expressed or implied in forward-looking statements. These statements are based on management's current assessments and assumptions, and they are subject to a number of risks and uncertainties. In addition, we will also use certain non-GAAP financial measures. We believe the supplementary information is useful to investors, although it should not be considered superior to the measures presented in accordance with GAAP. A full description of these risks as well as financial reconciliations to non-GAAP terms are in our press release and SEC filings. The press release can be found in the Investor Relations portion of our website and our Form 10-Q was also filed with the SEC shortly before this call. A recording of today's call will be available for about a month and details for how to access that replay can also be found on our website. With that, I’ll now turn it over to our President and CEO, Mary Berner.

Thanks, Collin, and good morning, everyone. I'd like to start the call by reiterating a point we made on our last call. This company executed a turnaround before this pandemic crisis and built a track record of both delivering strong financial results and disciplined execution. Notably, we completed a wholesale transformation of the company's organization and culture. We achieved multiple years of revenue and EBITDA growth, including industry-leading digital revenue growth. We expanded our assets from our on-air foundation to become a multi-channel multi-platform media company with profitable beachheads in high growth segments of the audio ecosystem. We generated significant and consistent free cash flow. We paid down a material level of debt, and we established a strong and flexible balance sheet. As a result, the company entered the pandemic with significant momentum and in a position of strength and, as such, is well equipped to deal with and navigate through this disruption regardless of how long it takes. I also told you that to weather the impacts of the COVID-19 crisis we would rely on our core and well-honed management practices: acute focus, decisive action, and efficient execution. During Q2, those practices paid off as we made fast and meaningful progress to address the revenue impacts of the pandemic, bolster our staying power, and position ourselves for long-term success when the crisis abates. During the quarter, on top of what we announced on our last call, we enacted significant additional and largely permanent expense cuts, bringing the total expected realized fixed cost reductions to $85 million for the year. We made meaningful progress in mitigating top-line declines through the execution of numerous revenue initiatives and tactics that helped us to drive sequential revenue improvement each month in the quarter and continued year-over-year and profitable growth in digital. We substantially increased our liquidity cushion, building cash by $91 million in the quarter through free cash flow generation and the completion of the long-awaited sale of land in Bethesda, Maryland. We paved the way for a significant additional liquidity inclusion by entering into an agreement to monetize our Tower portfolio and related assets for $213 million. While the timing of a return to a more predictable environment continues to be a matter of considerable speculation, these quick and substantive actions have set us up well to operate smoothly through even a protracted economic downturn while continuing to execute on our growth initiatives and drive long-term shareholder value. And in the short term, we continue to operate with an intense focus on revenue recovery, expense reductions, and cash management. That said, Q2 was obviously a tough quarter. On a same-station basis, which excludes the impact of M&A, EBITDA for the quarter was a negative $6.3 million on a revenue decline of 46.6%. As we noted on our last call, we experienced meaningful advertiser cancellations and declines in bookings that hit particularly hard in April and May. However, we did see sequential improvement on both top and bottom lines in each month through the quarter, and that improvement also continued through July. To give a bit more color on our results on the station side, our Diary markets outperformed our PPM markets, which experienced more acute impacts from shutdowns. From a channel perspective, network performed somewhat better than spot, reflecting its efficiency, exposure to large national advertisers, and our ability to use our pricing and inventory tools to create tailored custom networks. Political in the quarter was not a huge factor given the delayed primaries, but it's starting to ramp up as we move into Q3. Our digital initiatives, which we built organically and profitably from day one, were a bright spot in the quarter. In aggregate, digital continued its growth, increasing by 3.6% on the same-station basis. Podcasting had a particularly strong quarter with continued organic revenue growth of more than 25%, finishing the quarter with new records for revenue and downloads, which reached 95 million in June, up 16% from May and 41% year-over-year. In particular, we benefited from our strength in News/Talk whereas of July 15, we had five of the top 25 podcasts in the category on Apple's Rancor, including Powerhouse News/Talk talents Mark Levin and Dan Bongino, as well as Ben Shapiro, who is now ranked by Podtrac as the country's fifth largest podcast overall. In addition, our performance also benefited from the expansion of our podcast portfolio into sports, business, money, tech, and the life and entertainment verticals, and we continue to develop partnerships in those areas. So before I move to our expense initiatives, I do want to take a moment to recognize our entire Cumulus workforce for its efforts. The actions we took this quarter were extremely difficult, not just because of the shared personal impacts of employee-related cost reductions, both permanent and temporary, but also because across the company, decisions we made had to support our goal of maximizing the momentum of our growth strategies while preserving financial flexibility, all with extremely limited visibility. At every turn, the team stepped up and executed without missing a beat. More importantly, the commitment of Cumulus employees to the company has not wavered even during this enormously stressful time. In fact, in our Summer Culture Survey, to which well over half of our employees responded, 96% of them said that they're proud to work at Cumulus, the highest results in the five years that we've been conducting these surveys. Nearly 90% are excited about their future with the company. The loyalty and resolve of our workforce are extraordinary assets for Cumulus and deeply appreciated by our leadership team and me. Turning now to the expense actions we've taken to respond to the revenue pressure we're facing from COVID-19, last quarter we told you that we had already executed approximately $60 million of fixed cost reductions that will be realized through the course of 2020, on top of naturally occurring variable cost declines. This quarter, we executed an additional $25 million of largely permanent expense actions, bringing our total expected realized fixed cost reductions in 2020 to approximately $85 million. Frank will give you more detail on this in his remarks. On the liquidity front, our relentless focus on building our cash paid off. We ended the quarter with nearly $200 million in cash, up $91 million since March. We generated $28 million of cash from operations, despite the EBITDA decline, through rigorous management of working capital. Also contributing to that increase was the $66 million of net proceeds from the sale of our Bethesda, Maryland property. Finally, we were pleased to announce that on Friday, we entered into an agreement to monetize our Tower portfolio and related assets in a deal with Vertical Bridge for $213 million of gross proceeds. This deal was transacted at 14.25 times multiple, reflecting our continuing effort to drive accretive value from the disposition of non-core assets. This transaction will also facilitate substantial further debt pay down and increase our future cash resources. So we're delighted with the deal. Now looking ahead into Q3, we're seeing meaningful momentum in bookings and fully expect that results will be materially better than Q2. At the moment, overall pacing is down in the low 30s. But we do want to note that the outlook continues to be somewhat clouded by continued uncertainty around the economic and health impacts of the virus. On the spot side, we're still seeing better performance in smaller versus larger markets, and we're also seeing some decent recovery in categories like professional services and general services which were less directly impacted by COVID, as opposed to entertainment, which is still significantly depressed. Digital continues to grow year-over-year and is pacing substantially better than the Q2 performance driven by our podcast business. We're also starting to see a bit of political come in. It's still early days in this Presidential Election year and though we do expect some ramp-up into September, historically, the largest chunk of political has been in the fourth quarter, and we expect that pattern will hold true for us this year as well. One thing to note is that we do have a decent amount of business on the books currently particularly in September related to Professional Sports play-by-play, so we're obviously monitoring that as a potential risk if games are shifted or canceled, though in the case of cancellation, we'd expect to realize largely offsetting expense benefits. So while the sequential improvements we're seeing are encouraging, the short-term picture does remain challenged. That said, the cost actions we've taken will meaningfully mitigate revenue declines. Additionally, our current cash balance and a path to more cash through the Tower deal give us confidence in our ability to not only stay the course but to capitalize on the rebounding economy when and where it occurs, and continue our aggressive debt reduction and invest to drive growth. With that, I'll turn the call over to Frank.

Thank you, Mary. As Mary mentioned, we're pleased with how our actions this quarter have set us up to work through these current challenges and favorably position the company for future success. I’ll start with some more detail on the second quarter, and I'll speak on the same-station basis, followed by some more color on our outlook, liquidity position, and the Tower deal. In Q2, total revenue was $146 million, down 46.6% from Q2 2019. As Mary noted, the quarter was very challenged by both advertiser and sports cancellations. But on a monthly basis, however, we did see sequential improvement as April finished down 51%, May was down 50%, and June was down 39%. The impact of professional play-by-play sports disruption accounted for about 400 basis points in decline in the quarter driven by national rights for the NCAA, NHL, and the Masters shifting from April to November, as well as local rights predominantly for Major League Baseball. From an advertiser standpoint, as you would expect, except for political and government, which finished up in the quarter, every other category was weak. Although categories like general services and financial held up relatively better than did the categories that were most directly impacted by the pandemic, such as entertainment, travel, and beauty. As Mary noted, political is not a huge factor in the quarter given shifting primaries, and digital was the bright spot for us, growing overall 3.6%, with our podcasting business growing on an entirely organic basis by more than 25%. Moving down the P&L, expenses declined by $59 million or 28% driven by both reductions in variable costs related to revenue declines, and active fixed cost reductions. We now expect to realize approximately $85 million in benefits from our fixed costs actions. Of these, about $36 million were achieved in Q2 and approximately $40 million will be achieved through the balance of the year. If we break this down between temporary and permanent, approximately $19 million of the $85 million relate to permanent actions, which have an annualized benefit of approximately $36 million. The amount of temporary costs that will return over time will largely depend on revenue recovery in 2021. Putting revenues and expenses together for the quarter, EBITDA finished at negative $6.3 million. As Mary discussed, we generated $28 million of cash from operations despite the EBITDA decline through rigorous management of working capital. We cut our original 2020 CapEx spend projections of $30 million by more than 40% or approximately $13 million and are focusing only on items that are mission critical. This resulted in CapEx spend in Q2 of about $2.5 million. Our cash taxes this year have been materially reduced both as a result of the operating performance and also benefits from the CARES Act, which has allowed us to file for approximately $2.5 million of refunds for amounts paid in 2019. Additionally, we continue to expect to get an approximately $8 million benefit from the deferral of our payroll taxes in 2020, and we saw $1 million reduction of payroll taxes in Q2 from the employee pension tax credit. On June 24, we completed and announced the sale of land we owned in Bethesda, Maryland. The total proceeds for this deal was $74.1 million, but since we had already received $5 million in 2019, and after netting transaction expenses, we received $66 million in the quarter. All told, our free cash flow generation and the M&A proceeds increased cash in the quarter by $91 million, allowing us to finish with a balance of $197 million as of June 30. This liquidity and the expected proceeds from the monetization of the Tower portfolio which I'll discuss in a minute give us confidence in our ability to withstand a number of economic scenarios. For the first half of the year, our net debt decreased slightly over $1 billion to $884 million, a reduction of approximately $124 million. As a reminder, we do not have financial maintenance covenants in either our term loan or bonds; they do not mature until 2026. Now, to the announcement this morning, as we mentioned on previous calls, we had been exploring strategic alternatives for our Tower portfolio. On Friday, we entered into a definitive agreement to monetize substantially all of our Tower portfolio and related assets for $213 million. In summary, we're selling 250 tower locations, broken down between a sale leaseback with the assets that we need to run our business and outright sale of the other assets of these sites, including land and intangibles. The sale portion of the transaction represents about a third of the value, while the sale leaseback portion represents the other two-thirds. Considering our new lease costs of $13.5 million in year one, foregoing current third-party tower rental income of $2.3 million, and eliminating associated cash expenses of $800,000, the transaction is an effective multiple of 14.25 times. The sale leaseback transaction will be accounted for as a financing lease. And as a result, lease payments will run through interest expense and amortization of financing lease liability. For the assets we're selling, our approximate tax basis is $40 million, the majority of which relates to the assets that are being sold and not leaseback. We do expect that the gain on the sale for tax purposes will be largely sheltered by NOLs generated this year. The final amount available to offset gains will be determined based on our performance for the balance of the year. If the entire sale occurred in one closing under our credit agreement and indenture we will be required to repay approximately $95 million of that debt closing on a pro rata basis as a result of the sale leaseback, with the balance of the net proceeds of the sale required to pay down debt as well as subject to our 12-month reinvestment rate. We expect to close at least 85% of the transaction in an initial closing in Q4 with subsequent closings to the extent necessary. Pro forma for this transaction, we anticipate this debt or debt will be in a net in the range of $700 million. In sum, this is a fantastic transaction for the company and will allow us to make further progress against our goals of reducing debt, increasing liquidity, and growing shareholder value. We're also still working toward the potential monetization of the valuable piece of property in Nashville that we hope to bring to market once commercial real estate activity reaches more typical levels. Given the current environment, our expectations are that a transaction with this property will not occur until sometime in 2021. Lastly, in the quarter, we finally received the SEC's order on a petition for declaratory ruling is favorable. The lifting of the foreign ownership cap is really a mechanical exercise that we needed solely for the purpose of simplifying our share class structure. As a result of the SEC order during the quarter, we were able to convert all of our outstanding Series 1 and Series 2 warrants entitled Class A or Class B shares. We now have 17.7 million Class A shares outstanding and 2.6 million Class B shares outstanding.

Thank you. Your first response is from John Janedis of Wolfe Research. Please go ahead.

Thanks. Good morning. I have two quick questions. First, I appreciate the update on advertising, especially in light of the sales decline in the low 30s for the quarter. Did July reflect that same level? Secondly, regarding digital advertising, do you see larger incremental opportunities for the future compared to what you anticipated before the pandemic?

Yes, so our actual July results were down about 32%. So we did see improvement. And then in August, we continued to have more orders in the books and we're constructive in the quarter. But as Mary talked about, there's a lot of uncertainty. On the digital side, I'll pass it back over to Mary.

I'm sorry, could you repeat the questions? You asked a question on digital; I couldn’t hear you?

Yes, sure. Just given the growth you saw in the second quarter, when you think of that longer-term planning, are the incremental opportunities larger for you going forward than you thought possibly pre-pandemic?

That's a good question. I would say the opportunities remain strong. If you look at podcasting, which we discussed, we're very proud of our performance. Currently, as we mentioned, the pacing for Q3 continues to be strong. For the year, we've already booked more than 20%; specifically, we've booked 24% more than all of 2019. Regarding our streaming business, it is performing significantly better than spot, currently down slightly but with a lot of upside potential. Our local digital services, which we refer to as C-suite, are performing twice as well as broadcast. We are encouraged that our focus is yielding results and those channels continue to grow.

Thank you. The next response is from Zack Silver with B. Riley. Please go ahead.

Thanks for taking my question, I have three. First, could you explain the decision to close Westwood One news this quarter and its potential impact on the P&L moving forward? Second, what specific Fall sports exposure do you have this fall? Lastly, would you ever consider licensing some of your higher profile podcast titles to others or engaging in exclusive deals? Thank you.

Okay, so I'll take one and three, and Frank, you can take two. So with regard to Westwood One news, the radio news business has always been one that's expensive, from both a production and rights fee standpoint and it's somewhat difficult to monetize. That's the reason why in the past, we got out of representing ABC News and CBS News. So even with a dramatically reduced cost base, the business model was tough, and we were coming up on a decision to continue in the business. It made more sense from an EBITDA perspective to move on from that this quarter. I would say it's not huge in terms of top-line or EBITDA pickup though. And so that's Westwood One news. And then I think your question was about licensing our content, I think you talk about podcast content?

Yes, so just licensing, so I guess sub-licensing some of your higher profile podcasts and not having that content on the platform, but actually getting license payments, and somebody else would put that on their platform on an exclusive basis?

First of all, I want to emphasize that we have maintained a very disciplined approach in this area. We have consistently been profitable since day one, and our growth has been entirely organic. We are focusing on an ad-supported model, leveraging our business strategies, sales execution, marketing capabilities, and strong relationships with national advertisers and agencies to monetize and grow the podcasts of our content partners as well as our own original podcasts produced through our radio station. Our podcasts are already distributed across multiple platforms. Our strategy is centered around ad monetization, which enables us to operate without the costs and risks associated with creating and producing unproven content.

And then moving to sports. Look, we're obviously focused on the NFL, which is our largest property and appeared in the fourth quarter in sports and the NCAA. You've read as well as we have that their plan is to move forward with opening. I would say our sports exposure in the third quarter, I'm not going to give you specific numbers, but I'd say it is larger than our sports exposure was in the second quarter. Having said that, if sports are canceled or delayed the assertion expenses will go away with that. And so, there will be an EBITDA impact but hopefully it didn't, but the top line could be impacted like it occurred in the second quarter.

Thank you. There are no further questions in the queue at this time.

Thank you. That concludes our call.

Okay, this concludes our call. I'm sorry.

I'll say just thank you all for joining us today. And of course, we look forward to speaking with you again soon. Have a great day and week. Thank you.

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