ENTRAVISION COMMUNICATIONS CORPORATION SANTA MONICA, Calif., Nov. 2, 2017 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and nine-month periods ended September 30, 2017.
Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 11. Unaudited financial highlights are as follows:
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 % 2017 2016 %
Change Change
Net revenue
Revenue from advertising and retransmission consent $70,612 $65,281 8% $198,631 $188,223 6%
Revenue from spectrum usage rights 263,943 - * 263,943 - *
------- --- ------- ---
Total Net Revenue 334,555 65,281 412% 462,574 188,223 146%
Cost of revenue - television (spectrum usage rights) (1) 12,131 - * 12,131 - *
Cost of revenue - digital media (1) 9,910 2,281 334% 20,424 6,493 215%
Operating expenses (2) 43,044 40,187 7% 123,281 119,135 3%
Corporate expenses (3) 8,209 5,728 43% 19,695 16,625 18%
Foreign currency (gain) loss (58) - * 293 - *
Consolidated adjusted EBITDA (4) 262,416 17,841 1371% 289,910 48,623 496%
Free cash flow (5) $268,849 $11,928 2154% $281,717 $30,285 830%
Net income $157,208 $5,415 2803% $163,321 $13,402 1119%
Net income per share, basic $1.74 $0.06 2800% $1.81 $0.15 1107%
Net income per share, diluted $1.71 $0.06 2750% $1.78 $0.15 1087%
Weighted average common shares outstanding, basic 90,517,492 89,590,135 90,370,679 89,208,732
Weighted average common shares outstanding, diluted 92,161,108 91,489,975 91,985,946 91,188,958
(1) Cost of revenue - digital media consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized. Cost of revenue - television (spectrum usage rights) consists primarily of the carrying value of spectrum usage rights surrendered in the FCC auction for broadcast spectrum.
(2) Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $0.3 million and $0.1 million of non-cash stock-based compensation for three-month periods ended September 30, 2017 and 2016, respectively, and $0.8 million and $0.7 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2017 and 2016, respectively. Operating expenses do not include corporate
expenses, foreign currency (gain) loss, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment and other income (loss).
(3) Corporate expenses include $0.8 million and $0.7 million of non-cash stock-based compensation for the three-month periods ended September 30, 2017 and 2016, respectively, and $2.3 million and $1.9 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2017 and 2016, respectively.
(4) Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization less
syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our credit facility and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and
syndication programming amortization and does include syndication programming payments. While many in the financial community and we consider consolidated adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities,
operating income and net income. As consolidated adjusted EBITDA excludes non-cash gain (loss) on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation expense, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization and includes
syndication programming payments, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important non-cash financial line items. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated adjusted EBITDA is also used to make executive compensation decisions.
(5) Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, and capital expenditures plus non-cash cost of revenue - spectrum usage rights. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.
Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During the third quarter, we achieved revenue growth driven by increases in our digital media segment attributable to the acquisition of Headway. This growth in our digital media segment offset decreases in our television and radio segments, which were affected by decreases in local and national advertising revenue and the loss of political advertising revenue compared to 2016. We also improved our free cash flow and net income over the third quarter of 2016, due primarily to our receipt of proceeds related to our participation in the Federal Communications Commission auction for broadcast spectrum. We continued to build our digital footprint and, looking ahead, we remain well positioned to build on our success in further attracting Latino audiences, expanding our advertiser base to the benefit of our shareholders."
Quarterly Cash Dividend
The Company announced today that its Board of Directors has approved a quarterly cash dividend to shareholders of $0.05 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $4.5 million. The quarterly dividend will be payable on December 29, 2017 to shareholders of record as of the close of business on December 14, 2017, and the common stock will trade ex-dividend on December 13, 2017. As previously announced, the Company currently anticipates that future cash dividends will be paid on a quarterly basis; however, any decision to pay future cash dividends will be subject to approval by the Board.
Acquisition of NBC Affiliate KMIR-TV and MyNetworkTV Affiliate KPSE-LD Serving Palm Springs, California
On November 1, 2017, the Company completed the acquisition of television stations KMIR-TV, the local NBC affiliate, and KPSE-LD, the local MyNetworkTV affiliate, both of which serve the Palm Springs, California area, for an aggregate $21 million.
New Univision Agreements
On October 2, 2017, the Company entered into an affiliation agreement which supersedes and replaces the Company's prior affiliation agreements with Univision. Additionally, on the same date, the Company entered into a new proxy agreement and new marketing and sales agreements with Univision, each of which supersedes and replaces the Company's prior such agreements with Univision. The term of each of these new agreements expires on December 31, 2026 for all of the Company's Univision and UniMás network affiliate stations, except that each new agreement will expire on December 31, 2021 with respect to the Company's Univision and UniMás network affiliate stations in Orlando, Florida; Tampa, Florida; and Washington, D.C.
Financial Results
Three-Month Period Ended September 30, 2017 Compared to Three-Month Period Ended
September 30, 2016
(Unaudited)
Three-Month Period
Ended September 30,
-------------------
2017 2016 % Change
---- ---- --------
Net revenue
Revenue from advertising and retransmission consent $70,612 $65,281 8%
Revenue from spectrum usage rights 263,943 - *
------- ---
Total Net Revenue 334,555 65,281 412%
Cost of revenue - television (spectrum usage rights) (1) 12,131 - *
Cost of revenue - digital media (1) 9,910 2,281 334%
Operating expenses (1) 43,044 40,187 7%
Corporate expenses (1) 8,209 5,728 43%
Depreciation and amortization 4,337 3,812 14%
Foreign currency (gain) loss (58) - *
--- ---
Operating income 256,982 13,273 1836%
Interest expense, net (3,500) (3,823) (8)%
Income before income taxes 253,482 9,450 2582%
Income tax expense (96,167) (4,035) 2283%
------- ------
Net income (loss) before equity in net income (loss) of nonconsolidated affiliates 157,315 5,415 2805%
Equity in net income (loss) of nonconsolidated affiliates, net of tax (107) - *
---- ---
Net income $157,208 $5,415 2803%
======== ======
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.
Net revenue from advertising increased to $70.6 million for the three-month period ended September 30, 2017 from $65.3 million for the three-month period ended September 30, 2016, an increase of $5.3 million. Of the overall increase, $11.4 million was attributable to our digital media segment and was primarily due to the acquisition of 100% of the stock of several entities collectively doing business as Headway ("Headway") during the second quarter of 2017, which did not contribute to net revenue in prior periods. The overall increase was partially offset by a decrease in our radio segment of $2.3 million due primarily to decreases in local and national advertising revenue, and a decrease in political advertising revenue, which was not material in 2017. Additionally, the overall increase was partially offset by a decrease in our television segment of $3.8 million due primarily to a decrease in local and national revenue and a decrease in political advertising revenue, which was not material in 2017, partially offset by an increase in retransmission consent revenue.
Net revenue from spectrum usage rights was $263.9 million for the three-month period ended September 30, 2017. We did not have revenue from spectrum usage rights in 2016.
Cost of revenue related to revenue from spectrum usage rights was $12.1 million for the three-month period ended September 30, 2017. We did not have revenue from spectrum usage rights in 2016.
Cost of revenue in our digital media segment increased to $9.9 million for the three-month period ended September 30, 2017 from $2.3 million for the three-month period ended September 30, 2016, an increase of $7.6 million, primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to cost of revenue in prior periods.
Operating expenses increased to $43.0 million for the three-month period ended September 30, 2017 from $40.2 million for the three-month period ended September 30, 2016, an increase of $2.8 million. Of the overall increase, $4.3 million was attributable to our digital media segment and was primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to operating expenses in prior periods. The overall increase was partially offset by a decrease in expenses associated with the decrease in advertising revenue and a decrease in rent expense.
Corporate expenses increased to $8.2 million for the three-month period ended September 30, 2017 from $5.7 million for the three-month period ended September 30, 2016, an increase of $2.5 million. The increase was primarily due to increases in expenses associated with the FCC auction for broadcast spectrum, salary expense and non-cash stock-based compensation expense.
Nine-Month Period Ended September 30, 2017 Compared to Nine-Month Period Ended
September 30, 2016
(Unaudited)
Nine-Month Period
Ended September 30,
-------------------
2017 2016 % Change
---- ---- --------
Net revenue
Revenue from advertising and retransmission consent $198,631 $188,223 6%
Revenue from spectrum usage rights 263,943 - *
------- ---
Total Net Revenue 462,574 188,223 146%
Cost of revenue - television (spectrum usage rights) (1) 12,131 - *
Cost of revenue - digital media (1) 20,424 6,493 215%
Operating expenses (1) 123,281 119,135 3%
Corporate expenses (1) 19,695 16,625 18%
Depreciation and amortization 12,460 11,724 6%
Foreign currency (gain) loss 293 - *
--- ---
Operating income 274,290 34,246 701%
Interest expense, net (10,609) (11,423) (7)%
Income before income taxes 263,681 22,823 1055%
------- ------
Income tax expense (100,185) (9,421) 963%
-------- ------
Net income (loss) before equity in net loss of nonconsolidated affiliates 163,496 13,402 1120%
Equity in net loss of nonconsolidated affiliates, net of tax (175) - *
---- ---
Net income $163,321 $13,402 1119%
======== =======
(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.
Net revenue from advertising increased to $198.6 million for the nine-month period ended September 30, 2017 from $188.2 million for the nine-month period ended September 30, 2016, an increase of $10.4 million. Of the overall increase, $20.3 million was attributable to our digital media segment and was primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to net revenue in prior periods. The overall increase was partially offset by a decrease in our radio segment of $5.8 million due primarily to decreases in local and national advertising revenue, and a decrease in political advertising revenue, which was not material in 2017. Additionally, the overall increase was partially offset by a decrease in our television segment of $4.1 million due primarily to a decrease in local revenue and a decrease in political advertising revenue, which was not material in 2017, partially offset by an increase in national advertising revenue and an increase in retransmission consent revenue.
Net revenue from spectrum usage rights was $263.9 million for the nine-month period ended September 30, 2017. We did not have revenue from spectrum usage rights in 2016.
Cost of revenue related to revenue from spectrum usage rights was $12.1 million for the nine-month period ended September 30, 2017. We did not have revenue from spectrum usage rights in 2016.
Cost of revenue in our digital media segment increased to $20.4 million for the nine-month period ended September 30, 2017 from $6.5 million for the nine-month period ended September 30, 2016, an increase of $13.9 million, primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to cost of revenue in prior periods.
Operating expenses increased to $123.3 million for the nine-month period ended September 30, 2017 from $119.1 million for the nine-month period ended September 30, 2016, an increase of $4.2 million. Of the overall increase, $7.2 million was attributable to our digital media segment and was primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to operating expenses in prior periods. The overall increase was partially offset by decreases in expenses associated with the decrease in advertising revenue, rent expense, ratings service expense and event expense.
Corporate expenses increased to $19.7 million for the nine-month period ended September 30, 2017 from $16.6 million for the nine-month period ended September 30, 2016, an increase of $3.1 million. The increase was primarily due to expenses associated with the FCC auction for broadcast spectrum, legal and financial due diligence costs related to the Headway acquisition and non-cash stock-based compensation expense.
Segment Results
The following represents selected unaudited segment information:
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 % Change 2017 2016 % Change
---- ---- -------- ---- ---- --------
Net Revenue
Revenue from advertising and retransmission consent
Television $36,547 $40,363 (9)% $112,021 $116,143 (4)%
Radio 16,934 19,169 (12)% 49,816 $55,605 (10)%
Digital 17,131 5,749 198% 36,794 $16,475 123%
------ ----- ------ -------
Total $70,612 $65,281 8% $198,631 $188,223 6%
Revenue from spectrum usage rights $263,943 $ - * $263,943 $ - *
Total Net Revenue $334,555 $65,281 412% $462,574 $188,223 146%
Cost of Revenue (1)
Television 12,131 - * 12,131 $ - *
Digital 9,910 2,281 334% 20,424 $6,493 215%
----- ----- ------ ------
Total $22,041 $2,281 866% $32,555 $6,493 401%
Operating Expenses (1)
Television 20,161 21,151 (5)% 60,516 $62,299 (3)%
Radio 15,953 16,422 (3)% 47,294 $48,486 (2)%
Digital 6,930 2,614 165% 15,471 $8,350 85%
----- ----- ------ ------
Total $43,044 $40,187 7% $123,281 $119,135 3%
Corporate Expenses (1) $8,209 $5,728 43% $19,695 $16,625 18%
Foreign currency (gain) loss $(58) $ - * $293 $ - *
Consolidated adjusted EBITDA (1) $262,416 $17,841 1371% $289,910 $48,623 496%
(1) Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 1.
Entravision Communications Corporation will hold a conference call to discuss its 2017 third quarter results on November 2, 2017 at 5 p.m. Eastern Time. To access the conference call, please dial 412-317-5440 ten minutes prior to the start time. The call will be webcast live and archived for replay on the investor relations portion of the Company's web site located at www.entravision.com.
Entravision Communications Corporation is a leading global media company that reaches and engages U.S. Latinos across acculturation levels and media channels, as well as consumers in Mexico and other markets in Latin America. The Company's comprehensive portfolio incorporates integrated media and marketing solutions comprised of acclaimed television, radio, digital properties, events, and data analytics services. Entravision has 55 primary television stations and is the largest affiliate group of both the Univision and UniMás television networks. Entravision also owns and operates 49 primarily Spanish-language radio stations featuring nationally recognized talent, as well as the Entravision Audio Network and Entravision Solutions, a coast-to-coast national spot and network sales and marketing organization representing Entravision's owned and operated, as well as its affiliate partner, radio stations. Entravision's Pulpo digital advertising unit is the #1-ranked online advertising platform in Hispanic reach according to comScore Media Metrix®, and Entravision's digital group also includes Headway, a leading provider of mobile, programmatic, data and performance digital marketing solutions primarily in the United States, Mexico and other markets in Latin America. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.
This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the Securities and Exchange Commission.
Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands; unaudited)
September 30, December 31,
2017 2016
---- ----
ASSETS
Current assets
Cash and cash equivalents $55,980 $61,520
Restricted cash 231,096 -
Trade receivables, net of allowance for
doubtful accounts 72,651 65,072
Prepaid expenses and other current assets 6,583 4,870
----- -----
Total current assets 366,310 131,462
Property and equipment, net 56,606 55,368
Intangible assets subject to amortization,
net 25,691 13,120
Intangible assets not subject to
amortization 241,298 220,701
Goodwill 69,042 50,081
Deferred income taxes - 44,677
Other assets 5,474 2,512
----- -----
Total assets $764,421 $517,921
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term
debt $3,750 $3,750
Accounts payable and accrued expenses 49,117 30,810
------ ------
Total current liabilities 52,867 34,560
Long-term debt, less current maturities,
net of unamortized debt issuance costs 283,998 286,697
Other long-term liabilities 26,083 13,208
Deferred income taxes 59,720 -
------ ---
Total liabilities 422,668 334,465
------- -------
Stockholders' equity
Class A common stock 7 7
Class B common stock 2 2
Class U common stock 1 1
Additional paid-in capital 896,070 904,867
Accumulated deficit (552,702) (718,444)
Accumulated other comprehensive income
(loss) (1,625) (2,977)
------ ------
Total stockholders' equity 341,753 183,456
------- -------
Total liabilities and
stockholders' equity $764,421 $517,921
======== ========
Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Net revenue
Revenue from advertising and retransmission consent $70,612 $65,281 $198,631 $188,223
Revenue from spectrum usage rights 263,943 - 263,943 -
------- --- ------- ---
Total Net Revenue 334,555 65,281 462,574 188,223
Expenses:
Cost of revenue - television (spectrum usage rights) 12,131 - 12,131 -
Cost of revenue - digital media 9,910 2,281 20,424 6,493
Direct operating expenses 30,231 28,238 87,238 84,341
Selling, general and administrative expenses 12,813 11,949 36,043 34,794
Corporate expenses 8,209 5,728 19,695 16,625
Depreciation and amortization 4,337 3,812 12,460 11,724
Foreign currency (gain) loss (58) - 293 -
--- --- --- ---
77,573 52,008 188,284 153,977
------ ------ ------- -------
Operating income 256,982 13,273 274,290 34,246
Interest expense (3,756) (3,894) (11,084) (11,619)
Interest income 256 71 475 196
Income before income taxes 253,482 9,450 263,681 22,823
Income tax expense (96,167) (4,035) (100,185) (9,421)
------- ------ -------- ------
Income (loss) before equity in net income (loss) of nonconsolidated 157,315 5,415 163,496 13,402
affiliate
Equity in net income (loss) of nonconsolidated affiliate, net of tax (107) - (175) -
---- --- ---- ---
Net income $157,208 $5,415 $163,321 $13,402
======== ====== ======== =======
Basic and diluted earnings per share:
Net income per share, basic $1.74 $0.06 $1.81 $0.15
===== ===== ===== =====
Net income per share, diluted $1.71 $0.06 $1.78 $0.15
===== ===== ===== =====
Cash dividends declared per common share $0.05 $0.03 $0.11 $0.09
===== ===== ===== =====
Weighted average common shares outstanding, basic 90,517,492 89,590,135 90,370,679 89,208,732
========== ========== ========== ==========
Weighted average common shares outstanding, diluted 92,161,108 91,489,975 91,985,946 91,188,958
========== ========== ========== ==========
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Cash flows from operating activities:
Net income 157,208 $5,415 163,321 $13,402
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 4,337 3,812 12,460 11,724
Cost of revenue - television (spectrum usage rights) 12,131 - 12,131 -
Deferred income taxes 96,086 3,965 99,514 8,887
Amortization of debt issue costs 226 195 595 579
Amortization of syndication contracts 93 99 311 289
Payments on syndication contracts (85) (87) (300) (270)
Equity in net income (loss) of nonconsolidated affiliate 107 - 175 -
Non-cash stock-based compensation 1,089 744 3,149 2,634
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (791) 221 12,790 5,804
(Increase) decrease in prepaid expenses and other assets (383) (569) (1,830) (952)
Increase (decrease) in accounts payable, accrued expenses 130 684 (8,862) (3,192)
and other liabilities
Net cash provided by operating activities 270,148 14,479 293,454 38,905
------- ------ ------- ------
Cash flows from investing activities:
Purchases of short-term investments - - - (30,000)
Proceeds from maturity of short term investments - 30,000 - 30,000
Purchases of property and equipment (2,343) (2,215) (9,639) (6,960)
Purchases of intangible assets (32,588) - (32,588) -
Purchases of investments - (250) (2,200) (250)
Deposits on acquisitions (1,050) - (1,240) -
Purchase of a business, net of cash acquired - - (7,489) -
--- --- ------ ---
Net cash provided by (used in) investing activities (35,981) 27,535 (53,156) (7,210)
------- ------ ------- ------
Cash flows from financing activities:
Net proceeds from stock option exercises (515) 615 11 1,885
Payments on long-term debt (938) (938) (2,813) (2,813)
Dividends paid (4,532) (2,802) (10,179) (8,371)
Repurchase of Class A common stock (1,778) - (1,778) -
Net cash used in financing activities (7,763) (3,125) (14,759) (9,299)
------ ------ ------- ------
Effect of exchange rates on cash, cash equivalents and restricted cash 35 - 17 -
--- --- --- ---
Net increase (decrease) in cash, cash equivalents and restricted cash 226,439 38,889 225,556 22,396
Cash, cash equivalents and restricted cash:
Beginning 60,637 31,431 61,520 47,924
------ ------ ------ ------
Ending $287,076 $70,320 $287,076 $70,320
======== ======= ======== =======
Entravision Communications Corporation
Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities
(In thousands; unaudited)
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Consolidated adjusted EBITDA (1) 262,416 17,841 289,910 48,623
Interest expense (3,756) (3,894) (11,084) (11,619)
Interest income 256 71 475 196
Income tax expense (96,167) (4,035) (100,185) (9,421)
Amortization of syndication contracts (93) (99) (311) (289)
Payments on syndication contracts 85 87 300 270
Equity in net losses of nonconsolidated affiliates (107) - (175) -
Non-cash stock-based compensation included in direct operating (276) (79) (806) (700)
expenses
Non-cash stock-based compensation included in corporate expenses (813) (665) (2,343) (1,934)
Depreciation and amortization (4,337) (3,812) (12,460) (11,724)
Net income 157,208 5,415 163,321 13,402
Depreciation and amortization 4,337 3,812 12,460 11,724
Cost of revenue - television (spectrum usage rights) 12,131 - 12,131 -
Deferred income taxes 96,086 3,965 99,514 8,887
Amortization of debt issue costs 226 195 595 579
Amortization of syndication contracts 93 99 311 289
Payments on syndication contracts (85) (87) (300) (270)
Equity in net income (loss) of nonconsolidated affiliate 107 - 175 -
Non-cash stock-based compensation 1,089 744 3,149 2,634
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (791) 221 12,790 5,804
(Increase) decrease in prepaid expenses and other assets (383) (569) (1,830) (952)
Increase (decrease) in accounts payable, accrued expenses and other 130 684 (8,862) (3,192)
liabilities
Cash flows from operating activities 270,148 14,479 293,454 38,905
======= ====== ======= ======
(1) Consolidated adjusted EBITDA is defined on page 1.
Entravision Communications Corporation
Reconciliation of Free Cash Flow to Cash Flows From Operating Activities
(In thousands; unaudited)
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:
Three-Month Period Nine-Month Period
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Consolidated adjusted EBITDA (1) $262,416 $17,841 $289,910 $48,623
Net interest expense (1) (3,273) (3,628) (10,014) (10,844)
Cash paid for income taxes (82) (70) (671) (534)
Capital expenditures (2) (2,343) (2,215) (9,639) (6,960)
Cost of revenue - television (spectrum usage rights) 12,131 - 12,131 -
------ --- ------ ---
Free cash flow (1) 268,849 11,928 281,717 30,285
Capital expenditures (2) 2,343 2,215 9,639 6,960
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (791) 221 12,790 5,804
(Increase) decrease in prepaid expenses and other assets (383) (569) (1,830) (952)
Increase (decrease) in accounts payable, accrued expenses and other liabilities 130 684 (8,862) (3,192)
--- --- ------ ------
Cash Flows From Operating Activities $270,148 $14,479 $293,454 $38,905
======== ======= ======== =======
(1) Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.
(2) Capital expenditures are not part of the consolidated statement of operations.
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SOURCE Entravision Communications Corporation
