Entravision Communications Corporation Reports Fourth Quarter And Full Year 2017 Results

PR Newswire

SANTA MONICA, Calif., March 14, 2018

SANTA MONICA, Calif., March 14, 2018 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 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 Months Ended							Twelve Months Ended
	December 31,							December 31,
	2017		2016		% Change			2017		2016		% Change
Net revenue:
Revenue from advertising and retransmission consent	$	73,460	$	70,291		5	%	$	272,091	$	258,514		5	%
Revenue from spectrum usage rights		-		-	*				263,943		-	*
	$	73,460	$	70,291		5	%	$	536,034	$	258,514		107	%

Cost of revenue - television (spectrum usage rights) (1)		209		-	*				12,340		-	*
Cost of revenue - digital media (1)		11,782		3,043		287	%		32,206		9,536		238	%
Operating expenses (2)		45,118		41,102		10	%		168,399		160,237		5	%
Corporate expenses (3)		8,242		7,918		4	%		27,937		24,543		14	%
Foreign currency (gain) loss		57		-	*				350		-	*

Consolidated adjusted EBITDA (4)		11,199		20,620		(46)	%		51,400		69,243		(26)	%

Free cash flow (5)	$	5,901	$	14,919		(60)	%	$	287,618	$	45,204		536	%

Net income	$	12,972	$	7,003		85	%	$	176,293	$	20,405		764	%

Net income per share, basic	$	0.14	$	0.08		75	%	$	1.95	$	0.23		748	%
Net income per share, diluted	$	0.14	$	0.08		75	%	$	1.92	$	0.22		773	%

Weighted average common shares outstanding, basic		89,980,200		89,733,294					90,272,257		89,340,589
Weighted average common shares outstanding, diluted		91,613,199		91,642,487					91,891,957		91,303,056

(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 Federal Communications Commission ("FCC") auction for broadcast spectrum.
(2) Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.6 million of non-cash stock-based compensation for the three-month periods ended December 31, 2017 and 2016, respectively, and $1.2 million and $1.3 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 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 $2.5 million and $1.8 million of non-cash stock-based compensation for the three-month periods ended December 31, 2017 and 2016, respectively, and $4.9 million and $3.7 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 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, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated adjusted EBITDA because that measure is defined in the agreement governing our current credit facility ("the 2017 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, syndication programming amortization and does include syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, acquisitions and dispositions and certain pro-forma cost savings.
(5) Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, and capital expenditures plus revenue from FCC spectrum incentive auction less related cash expenses. 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 fourth 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 offsets decreases in both 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 continued to build our digital footprint and, looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, and expanding our advertiser base to the benefit of our shareholders."

Financial Results
Three-Month Period Ended December 31, 2017 Compared to Three-Month Period Ended
December 31, 2016
(Unaudited)

	Three Months Ended
	December 31,
	2017		2016		% Change
Net, revenue from advertising and retransmission consent	$	73,460	$	70,291		5	%

Cost of revenue - television (spectrum usage rights) (1)		209		-	*
Cost of revenue - digital media (1)		11,782		3,043		287	%
Operating expenses (1)		45,118		41,102		10	%
Corporate expenses (1)		8,242		7,918		4	%
Depreciation and amortization		3,951		3,618		9	%
Foreign currency (gain) loss		57		-	*

Operating income		4,101		14,610		(72)	%
Interest expense, net		(5,326)		(3,746)		42	%
Other income (loss)		262		-	*
Gain (loss) on debt extinguishment		(3,306)		(161)		1953	%

Income before income taxes		(4,269)		10,703	*
Income tax (expense) benefit		17,376		(3,700)	*

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates		13,107		7,003		87	%
Equity in net income (loss) of nonconsolidated affiliates		(135)		-	*
Net income	$	12,972	$	7,003		85	%

(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.

Net revenue from advertising and retransmission consent increased to $73.5 million for the three-month period ended December 31, 2017 from $70.3 million for the three-month period ended December 31, 2016, an increase of $3.2 million. Of the overall increase, $13.6 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 television segment of $7.3 million due primarily to a decrease in both 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. Additionally, the overall increase was partially offset by a decrease in our radio segment of $3.1 million due primarily to decreases in both local and national advertising revenue, and a decrease in political advertising revenue, which was not material in 2017.

Cost of revenue related to revenue from spectrum usage rights was $0.2 million for the three-month period ended December 31, 2017. We did not incur cost of revenue from spectrum usage rights in 2016.

Cost of revenue in our digital media segment increased to $11.8 million for the three-month period ended December 31, 2017 from $3.0 million for the three-month period ended December 31, 2016, an increase of $8.8 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 $45.1 million for the three-month period ended December 31, 2017 from $41.1 million for the three-month period ended December 31, 2016, an increase of $4.0 million. The increase was primarily attributable to the acquisition of Headway during the second quarter of 2017, which did not contribute to operating expenses in prior periods, an increase in salary expense and an increase in bad debt expense. The overall increase was partially offset by a decrease in expenses associated with the decrease in television and radio advertising revenue and a decrease in expenses for ratings services and promotional events.

Corporate expenses increased to $8.2 million for the three-month period ended December 31, 2017 from $7.9 million for the three-month period ended December 31, 2016, an increase of $0.3 million. The increase was primarily due to an increase in non-cash stock-based compensation expense.

Income tax expense for the three-month period ended December 31, 2017 includes a one-time provisional tax benefit of $17.3 million. This net tax benefit primarily consists of the net tax impact to our deferred taxes from the corporate rate reduction as a result of the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act.

Twelve-month Period Ended December 31, 2017 Compared to Twelve-month Period Ended
December 31, 2016
(Unaudited)

	Twelve Months Ended
	December 31,
	2017		2016		% Change
Net revenue:
Revenue from advertising and retransmission consent	$	272,091	$	258,514		5	%
Revenue from spectrum usage rights		263,943		-	*
Total net revenue		536,034		258,514		107	%

Cost of revenue - television (spectrum usage rights) (1)		12,340		-	*
Cost of revenue - digital media (1)		32,206		9,536		238	%
Operating expenses (1)		168,399		160,237		5	%
Corporate expenses (1)		27,937		24,543		14	%
Depreciation and amortization		16,411		15,342		7	%
Foreign currency (gain) loss		350		-	*

Operating income		278,391		48,856		470	%
Interest expense, net		(15,935)		(15,169)		5	%
Other income (loss)		262		-	*
Gain (loss) on debt extinguishment		(3,306)		(161)		1953	%

Income before income taxes		259,412		33,526		674	%
Income tax (expense) benefit		(82,809)		(13,121)		531	%

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates		176,603		20,405		765	%
Equity in net income (loss) of nonconsolidated affiliates		(310)		-	*

Net income	$	176,293	$	20,405		764	%

(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.

Net revenue from advertising and retransmission consent increased to $272.1 million for the twelve-month period ended December 31, 2017 from $258.5 million for the twelve-month period ended December 31, 2016, an increase of $13.6 million. Of the overall increase, $34.0 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 television segment of $11.5 million due 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. Additionally, the overall increase was partially offset by a decrease in our radio segment of $8.9 million due to decreases in both local and national advertising revenue, and a decrease in political advertising revenue, which was not material in 2017.

Net revenue from spectrum usage rights was $263.9 million for the twelve-month period ended December 31, 2017. We did not generate revenue from spectrum usage rights in 2016.

Cost of revenue related to revenue from spectrum usage rights was $12.3 million for the twelve-month period ended December 31, 2017. We did not incur cost of revenue from spectrum usage rights in 2016.

Cost of revenue in our digital media segment increased to $32.2 million for the twelve-month period ended December 31, 2017 from $9.5 million for the twelve-month period ended December 31, 2016, an increase of $22.7 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 $168.4 million for the twelve-month period ended December 31, 2017 from $160.2 million for the twelve-month period ended December 31, 2016, an increase of $8.2 million. The increase was primarily attributable 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 television and radio advertising revenue and decreases in rent expense, ratings service expense and event expense.

Corporate expenses increased to $27.9 million for the twelve-month period ended December 31, 2017 from $24.5 million for the twelve-month period ended December 31, 2016, an increase of $3.4 million. The increase was primarily due to expenses associated with the FCC auction for broadcast spectrum and non-cash stock-based compensation expense.

Income tax expense for the twelve-month period ended December 31, 2017 includes a one-time provisional tax benefit of $17.3 million. This net tax benefit primarily consists of the net tax impact to our deferred taxes from the corporate rate reduction as a result of the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act.

Segment Results
The following represents selected unaudited segment information:

	Three Months Ended							Twelve Months Ended
	December 31,							December 31,
	2017		2016		% Change			2017		2016		% Change
Net Revenue
Revenue from advertising and retransmission consent
Television	$	36,038	$	43,380		(17)	%	$	148,059	$	159,523		(7)	%
Radio		17,118		20,242		(15)	%		66,934		75,847		(12)	%
Digital		20,304		6,669		204	%		57,098		23,144		147	%
Total	$	73,460	$	70,291		5	%	$	272,091	$	258,514		5	%

Revenue from spectrum usage rights (television)	$	-	$	-	*			$	263,943	$	-	*

Total Net Revenue	$	73,460	$	70,291		5	%	$	536,034	$	258,514		107	%

Cost of Revenue (1)
Television		209		-	*				12,340		-	*
Digital		11,782		3,043		287	%		32,206		9,536		238	%
Total	$	11,991	$	3,043		294	%	$	44,546	$	9,536		367	%

Operating Expenses (1)
Television		21,214		21,312		(0)	%		81,730		83,611		(2)	%
Radio		16,021		16,904		(5)	%		63,315		65,390		(3)	%
Digital		7,883		2,886		173	%		23,354		11,236		108	%
Total	$	45,118	$	41,102		10	%	$	168,399	$	160,237		5	%

Corporate Expenses (1)	$	8,242	$	7,918		4	%	$	27,937	$	24,543		14	%

Foreign currency (gain) loss	$	57	$	-	*			$	350	$	-	*

Consolidated adjusted EBITDA (1)	$	11,199	$	20,620		(46)	%	$	51,400	$	69,243		(26)	%

(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 fourth quarter and full year results on March 14, 2018 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, through its television and radio segments, reaches and engages U.S. Hispanics across acculturation levels and media channels. Additionally, our digital segment, whose operations are located primarily in Spain, Mexico, and Argentina and other countries in Latin America, reaches a global market. The Company's expansive portfolio encompasses integrated marketing and media solutions, comprised of television, radio, and digital properties 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.

(Financial Table Follows)

Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands; unaudited)

	December 31,		December 31,
	2017		2016
ASSETS
Current assets
Cash and cash equivalents	$	39,560	$	61,520
Restricted Cash		222,294	$	-
Trade receivables, net of allowance for doubtful accounts		84,348		65,072
Prepaid expenses and other current assets		6,260		4,870
Total current assets		352,462		131,462
Property and equipment, net		60,337		55,368
Intangible assets subject to amortization, net		26,758		13,120
Intangible assets not subject to amortization		251,163		220,701
Goodwill		70,557		50,081
Deferred income taxes		-		44,677
Other assets		4,690		2,512
Total assets	$	765,967	$	517,921


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	3,000	$	3,750
Accounts payable and accrued expenses		59,522		30,810
Total current liabilities		62,522		34,560
Long-term debt, less current maturities, net of unamortized debt issuance costs		292,489		286,697
Other long-term liabilities		21,447		13,208
Deferred income taxes		40,639		—
Total liabilities		417,097		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		888,650		904,867
Accumulated deficit		(539,730)		(718,444)
Accumulated other comprehensive income (loss)		(60)		(2,977)
Total stockholders' equity		348,870		183,456
Total liabilities and stockholders' equity	$	765,967	$	517,921

Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)

	Three-Month Period				Twelve-Month Period
	Ended December 31,				Ended December 31,
	2017		2016		2017		2016
Net revenue
Revenue from advertising and retransmission consent	$	73,460	$	70,291	$	272,091	$	258,514
Revenue from spectrum usage rights		-		-		263,943		-
		73,460		70,291		536,034		258,514
Expenses:
Cost of revenue - television (spectrum usage rights)		209		-		12,340		-
Cost of revenue - digital media		11,782		3,043		32,206		9,536
Direct operating expenses		32,045		29,098		119,283		113,439
Selling, general and administrative expenses		13,073		12,004		49,116		46,798
Corporate expenses		8,242		7,918		27,937		24,543
Depreciation and amortization		3,951		3,618		16,411		15,342
Foreign currency (gain) loss		57		-		350		-
		69,359		55,681		257,643		209,658
Operating income		4,101		14,610		278,391		48,856
Interest expense		(5,625)		(3,850)		(16,709)		(15,469)
Interest income		299		104		774		300
Other income (loss)		262		-		262		-
Gain (loss) on debt extinguishment		(3,306)		(161)		(3,306)		(161)
Income before income taxes		(4,269)		10,703		259,412		33,526
Income tax (expense) benefit		17,376		(3,700)		(82,809)		(13,121)

Income (loss) before equity in net income (loss) of nonconsolidated affiliate		13,107		7,003		176,603		20,405
Equity in net income (loss) of nonconsolidated affiliate		(135)		-		(310)		-
Net income	$	12,972	$	7,003	$	176,293	$	20,405

Basic and diluted earnings per share:
Net income per share, basic	$	0.14	$	0.08	$	1.95	$	0.23
Net income per share, diluted	$	0.14	$	0.08	$	1.92	$	0.22

Cash dividends declared per common share, basic	$	0.05	$	0.03	$	0.16	$	0.13
Cash dividends declared per common share, diluted	$	0.05	$	0.03	$	0.16	$	0.12

Weighted average common shares outstanding, basic		89,980,200		89,733,294		90,272,257		89,340,589
Weighted average common shares outstanding, diluted		91,613,199		91,642,487		91,891,957		91,303,056

Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)

	Three-Month Period				Twelve-Month Period
	Ended December 31,				Ended December 31,
	2017		2016		2017		2016
Cash flows from operating activities:
Net income	$	12,972	$	7,003	$	176,293	$	20,405
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,951		3,618		16,411		15,342
Cost of revenue - television (spectrum usage rights)		209		-		12,340		-
Deferred income taxes		(17,551)		3,641		81,963		12,528
Non-cash interest		2,642		197		3,237		776
Amortization of syndication contracts		141		109		452		398
Payments on syndication contracts		(145)		(118)		(445)		(388)
Equity in net (income) loss of nonconsolidated affiliate		135		-		310		-
Non-cash stock-based compensation		2,942		2,401		6,091		5,035
(Gain) loss on sale of property		28		-		28		-
(Gain) loss on debt extinguishment		3,306		161		3,306		161
Changes in assets and liabilities:
(Increase) decrease in trade receivables		(12,376)		(4,407)		414		1,397
(Increase) decrease in prepaid expenses and other current assets		917		1,391		(913)		439
Increase (decrease) in accounts payable, accrued expenses and other liabilities		6,424		4,395		(2,438)		1,203
Net cash provided by operating activities		3,595		18,391		297,049		57,296
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		50		-		50		-
Purchases of property and equipment		(2,439)		(2,093)		(12,078)		(9,053)
Purchases of intangibles		-		-		(32,588)		-
Purchase of a business, net of cash acquired		(21,008)		-		(28,497)		-
Purchases of short term investments: CDs		-		-		-		(30,000)
Proceeds from short term investments: CDs		-		-		-		30,000
Purchases of investments		(250)		(250)		(2,450)		(500)
Deposits on acquisition		1,050		-		(190)		-
Net cash used in investing activities		(22,597)		(2,343)		(75,753)		(9,553)
Cash flows from financing activities:
Proceeds from stock option exercises		697		(1,105)		708		780
Tax payments related to shares withheld for share-based compensation plans		(798)		-		(798)		-
Payments on long-term debt		(290,750)		(20,937)		(293,563)		(23,750)
Dividends paid		(4,491)		(2,806)		(14,670)		(11,177)
Repurchase of Class A common stock		(3,552)		-		(5,330)		-
Termination of swap agreements		(2,441)		-		(2,441)		-
Proceeds from borrowings on long-term debt		298,500		-		298,500		-
Payments of capitalized debt offering and issuance costs		(3,382)		-		(3,382)		-
Net cash used in financing activities		(6,217)		(24,848)		(20,976)		(34,147)
Effect of exchange rates on cash, cash equivalents and restricted cash		(3)		-		14		-
Net increase (decrease) in cash and cash equivalents		(25,222)		(8,800)		200,334		13,596
Cash and cash equivalents:
Beginning		287,076		70,320		61,520		47,924
Ending	$	261,854	$	61,520	$	261,854	$	61,520

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				Twelve-Month Period
	Ended December 31,				Ended December 31,
	2017			2016	2017			2016
Consolidated adjusted EBITDA (1)	$	11,199	$	20,620	$	51,400	$	69,243
Net revenue - FCC spectrum incentive auction		-		-		263,943		-
Expenses - FCC spectrum incentive auction		(209)		-		(14,443)		-
Interest expense		(5,625)		(3,850)		(16,709)		(15,469)
Interest income		299		104		774		300
Gain (loss) on debt extinguishment		(3,306)		(161)		(3,306)		(161)
Income tax (expense) benefit		17,376		(3,700)		(82,809)		(13,121)
Amortization of syndication contracts		(141)		(109)		(452)		(398)
Payments on syndication contracts		145		118		445		388
Non-cash stock-based compensation included in direct operating
expenses		(430)		(630)		(1,236)		(1,330)
Non-cash stock-based compensation included in corporate expenses		(2,512)		(1,771)		(4,855)		(3,705)
Depreciation and amortization		(3,951)		(3,618)		(16,411)		(15,342)
Other income (loss)		262		-		262		-
Equity in net income (loss) of nonconsolidated affiliates		(135)		-		(310)		-
Net income		12,972		7,003		176,293		20,405

Depreciation and amortization		3,951		3,618		16,411		15,342
Cost of revenue - television (spectrum usage rights)		209		-		12,340		-
Deferred income taxes		(17,551)		3,641		81,963		12,528
Amortization of debt issuance costs		2,642		197		3,237		776
Amortization of syndication contracts		141		109		452		398
Payments on syndication contracts		(145)		(118)		(445)		(388)
Equity in net (income) loss of nonconsolidated affiliate		135		-		310		-
Non-cash stock-based compensation		2,942		2,401		6,091		5,035
(Gain) loss on sale of property		28		-		28		-
(Gain) loss on debt extinguishment		3,306		161		3,306		161
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(12,376)		(4,407)		414		1,397
(Increase) decrease in prepaid expenses and other assets		917		1,391		(913)		439
Increase (decrease) in accounts payable, accrued expenses and other liabilities		6,424		4,395		(2,438)		1,203
Net cash provided by (used in ) operating activities	$	3,595	$	18,391	$	297,049	$	57,296

(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				Twelve-Month Period
	Ended December 31,				Ended December 31,
		2017		2016		2017		2016
Consolidated adjusted EBITDA (1)	$	11,199	$	20,620	$	51,400	$	69,243
Net, cash interest expense (1)		(2,685)		(3,549)		(12,698)		(14,393)
Cash paid for income taxes		(174)		(59)		(846)		(593)
Capital expenditures (2)		(2,439)		(2,093)		(12,078)		(9,053)
Net revenue - FCC spectrum incentive auction		-		-		263,943		-
Expenses - FCC spectrum incentive auction		-		-		(2,103)		-
Free cash flow (1)		5,901		14,919		287,618		45,204

Capital expenditures (2)		2,439		2,093		12,078		9,053
Other income (loss)		262		-		262		-
(Gain) loss on sale of property		28		-		28		-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(12,376)		(4,407)		414		1,397
(Increase) decrease in prepaid expenses and other assets		917		1,391		(913)		439
Increase (decrease) in accounts payable, accrued expenses and other liabilities		6,424		4,395		(2,438)		1,203
Cash Flows From Operating Activities	$	3,595	$	18,391	$	297,049	$	57,296


(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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Entravision Communications Corporation Reports Fourth Quarter And Full Year 2017 Results

Entravision Communications Corporation Reports Fourth Quarter And Full Year 2017 Results