The Company and Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

The Company and Significant Accounting Policies

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

The Company is a diversified global media, marketing and technology company serving clients in the United States and around the world. The Company’s management has determined that the Company operates in three reportable segments as of September 30, 2021, based upon the type of advertising medium, which segments are digital, television, and radio.

The Company’s digital segment, whose operations are located primarily in Latin America, Spain and Southeast Asia, provides innovative advertising solutions in high growth markets to advertisers and publishers, including some of the world's leading technology companies. Through its television and radio segments, the Company reaches and engages U.S. Hispanics across acculturation levels and media channels.

The Company provides a suite of digital advertising solutions that offer advertisers the opportunity to reach and engage with their target audiences by providing access to digital inventory at scale. These solutions include those offered by Cisneros Interactive in Latin America and MediaDonuts Pte. Ltd. (“MediaDonuts") in Southeast Asia, each of which maintains sales partnerships with major global media platforms.

As of September 30, 2021, the Company owns and/or operates 53 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. The Company’s television operations comprise the largest affiliate group of both the top-ranked primary television network of Univision Communications Inc. (“Univision”) and Univision’s UniMás network. The television segment includes revenue generated from advertising, retransmission consent agreements and the monetization of the Company’s spectrum assets.

As of September 30, 2021, the Company's radio operations consist of 46 operational radio stations, 37 FM and 9 AM, in 16 markets located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas. Entravision also operates Entravision Solutions as its national sales representation division, through which it sells advertisements and syndicates radio programming to more than 100 markets across the United States.

The Impact of the COVID-19 Pandemic on the Company’s Business

Notwithstanding a worldwide increase in COVID-19 cases throughout the summer, the COVID-19 pandemic did not have a significant impact on the Company’s business during the quarter ended September 30, 2021. Subject to the extent and duration of possible resurgences of the pandemic and the continuing economic crisis that has resulted from the pandemic, the Company anticipates that the pandemic will continue to have a diminishing or little effect on its business, from both an operational and financial perspective, in future periods.

During the quarter ended September 30, 2021, the Company did not experience material cancellations of advertising or a decrease in new advertising placements in its television and radio segments, continuing a trend the Company had begun to experience earlier this year. At this time, the Company does not know if certain behavioral changes by audiences in their television viewership

and radio listening habits during the pandemic have changed permanently. The Company has also continued to ease credit terms for certain of its advertising clients to help them manage their own cash flow and address other financial needs.

In order to preserve cash during this period, the Company instituted certain cost reduction measures that are still in effect. On March 26, 2020, the Company suspended repurchases under its share repurchase program. Effective May 16, 2020, the Company suspended company matching of employee contributions to their 401(k) retirement plans. The Company also reduced its dividend by 50% beginning in the second quarter of 2020, and it may continue to do so in future periods. Other cost reduction measures that the Company instituted during 2020 were restored to original levels by the end of 2020. The Company will continue to monitor all of these actions closely in light of current and changing conditions and may institute such additional actions as the Company may believe are appropriate at a future date.

Additionally, the Company elected to defer the employer portion of the social security payroll tax (6.2%) as provided in the Coronavirus Aid, Relief and Economic Security Act of 2020, commonly known as the CARES Act. The deferral was effective from March 27, 2020 through December 31, 2020. The deferred amount will be paid in two installments and the amount will be considered timely paid if 50% of the deferred amount is paid by December 31, 2021 and the remainder is paid by December 31, 2022.

The Company believes that its liquidity and capital resources remain adequate and that it can meet current expenses for at least the next twelve months from a combination of cash on hand and cash flows from operations.

Restricted Cash

As of September 30, 2021 and December 31, 2020, the Company’s balance sheet includes $0.7 million in restricted cash, which was deposited into a separate account as collateral for the Company’s letters of credit.

Related Party

Substantially all of the Company’s television stations are Univision- or UniMás-affiliated television stations. The network affiliation agreement with Univision provides certain of the Company’s owned stations the exclusive right to broadcast Univision’s primary network and UniMás network programming in their respective markets. Under the network affiliation agreement, the Company retains the right to sell no less than four minutes per hour of the available advertising time on stations that broadcast Univision network programming, and the right to sell approximately four and a half minutes per hour of the available advertising time on stations that broadcast UniMás network programming, subject to adjustment from time to time by Univision.

Under the network affiliation agreement, Univision acts as the Company’s exclusive third-party sales representative for the sale of certain national advertising on the Univision- and UniMás-affiliate television stations, and the Company pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on its Univision- and UniMás-affiliate television stations. During the three-month periods ended September 30, 2021 and 2020, the amount the Company paid Univision in this capacity was $2.1 million and $2.3 million, respectively. During the nine-month periods ended September 30, 2021 and 2020, the amount the Company paid Univision in this capacity was $6.0 million and $5.9 million, respectively

The Company also generates revenue under two marketing and sales agreements with Univision, which give it the right to manage the marketing and sales operations of Univision-owned Univision affiliates in six markets – Albuquerque, Boston, Denver, Orlando, Tampa and Washington, D.C.

Under the Company’s current proxy agreement with Univision, the Company grants Univision the right to negotiate the terms of retransmission consent agreements for its Univision- and UniMás-affiliated television station signals. Among other things, the proxy agreement provides terms relating to compensation to be paid to the Company by Univision with respect to retransmission consent agreements entered into with multichannel video programming distributors, (“MVPDs”). As of September 30, 2021, the amount due to the Company from Univision was $6.2 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During each of the three-month periods ended September 30, 2021 and 2020, retransmission consent revenue accounted for approximately $9.1 million, of which $6.4 million and $6.6 million, respectively, relate to the Univision proxy agreement. During the nine-month periods ended September 30, 2021 and 2020, retransmission consent revenue accounted for approximately $28.1 million and 28.0 million, respectively, of which $19.7 million and $20.3 million, respectively, relate to the Univision proxy agreement. The term of the proxy agreement extends with respect to any MVPD for the length of the term of any retransmission consent agreement in effect before the expiration of the proxy agreement.

Univision currently owns approximately 11% of the Company’s common stock on a fully-converted basis. The Company’s Class U common stock, all of which is held by Univision, has limited voting rights and does not include the right to elect directors. Each share of Class U common stock is automatically convertible into one share of the Company’s Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer of such shares of Class U common stock to a third party that is not an affiliate of Univision. In addition, as the holder of all of the Company’s issued and outstanding Class U common stock, so long as Univision holds a certain number of shares of Class U common stock, the Company may not, without the

consent of Univision, merge, consolidate or enter into a business combination, dissolve or liquidate the Company or dispose of any interest in any Federal Communications Commission (“FCC”) license with respect to television stations which are affiliates of Univision, among other things.

Stock-Based Compensation

The Company measures all stock-based awards using a fair value method and recognizes the related stock-based compensation expense in the consolidated financial statements over the requisite service period. As stock-based compensation expense recognized in the Company’s consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

Stock-based compensation expense related to grants of restricted stock units was $1.1 million and $0.8 million for the three-month periods ended September 30, 2021 and 2020, respectively. Stock-based compensation expense related to grants of restricted stock units was $3.3 million and $2.4 million for the nine-month periods ended September 30, 2021 and 2020, respectively

Stock Options

Stock-based compensation expense related to stock options is based on the fair value on the date of grant using the Black-Scholes option pricing model and is amortized over the vesting period, generally between 1 to 4 years.

For the three- and nine-month periods ended September 30, 2021 and 2020, there was no stock-based compensation expense related to grants of stock options. All grants of stock options have been fully expensed.

Restricted Stock Units

Stock-based compensation expense related to restricted stock units is based on the fair value of the Company’s stock price on the date of grant and is amortized over the vesting period, generally between 1 to 4 years.

The following is a summary of non-vested restricted stock units granted (in thousands, except grant date fair value data):

	Nine-Month Period
	Ended September 30, 2021
	Number Granted	Weighted Average Fair Value
Restricted stock units	85	$	4.69

As of September 30, 2021, there was approximately $3.0 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.3 years.

Income (Loss) Per Share

The following table illustrates the reconciliation of the basic and diluted income (loss) per share computations required by Accounting Standards Codification (ASC) 260-10, “Earnings per Share” (in thousands, except share and per share data):

Basic income (loss) per share is computed as net income (loss) divided by the weighted average number of shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and restricted stock awards.

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2021		2020		2021		2020
Basic earnings per share:
Numerator:
Net income (loss) attributable to common stockholders	$	12,131	$	9,016	$	25,424	$	(24,238	)
Denominator:
Weighted average common shares outstanding		85,390,333		84,185,728		85,207,992		84,208,924
Per share:
Net income (loss) per share attributable to common stockholders	$	0.14	$	0.11	$	0.30	$	(0.29	)
Diluted earnings per share:
Numerator:
Net income (loss) attributable to common stockholders	$	12,131	$	9,016	$	25,424	$	(24,238	)
Denominator:
Weighted average common shares outstanding		85,390,333		84,185,728		85,207,992		84,208,924
Dilutive securities:
Stock options and restricted stock units		2,925,399		677,292		2,486,403		-
Diluted shares outstanding		88,315,732		84,863,020		87,694,395		84,208,924
Per share:
Net income (loss) per share attributable to common stockholders	$	0.14	$	0.11	$	0.29	$	(0.29	)

For the three- and nine-month periods ended September 30, 2021, a total of 327 and 337 shares of dilutive securities, respectively, were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares.

For the three-month period ended September 30, 2020, a total of 144,865 shares of dilutive securities were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares. For the nine-month period ended September 30, 2020, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The number of securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was 627,613 equivalent shares of dilutive securities for the nine-month period ended September 30, 2020.

Impairment

The Company has identified each of its three operating segments to be separate reporting units: television, radio and digital. The carrying values of the reporting units are determined by allocating all applicable assets (including goodwill) and liabilities based upon the unit in which the assets are employed and to which the liabilities relate, considering the methodologies utilized to determine the fair value of the reporting units.

Goodwill and indefinite life intangibles are not amortized but are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that the assets might be impaired. The annual testing date is October 1. As noted in the Company’s 2020 10-K, the Company recorded impairment charges of goodwill in its digital reporting unit totaling $0.8 million during the year ended December 31, 2020. Additionally, the Company recorded impairment charges of FCC licenses in its television and radio reporting units in the amount of $23.5 million and $9.0 million, respectively, during the year ended December 31, 2020. In addition, the Company recorded impairment charges related to intangible assets subject to amortization of $5.3 million, and property and equipment of $1.5 million, respectively, during the year ended December 31, 2020. The Company determined there were no triggering events during the three and nine-month periods ended September 30, 2021.

The carrying amount of intangible assets not subject to amortization for each of the Company’s operating segments for the nine-month period ended September 30, 2021 is as follows (in thousands):

	December 31, 2020		Impairment			Transfer to Assets Held for Sale			September 30, 2021
Television	$	130,274	$	-		$	-		$	130,274
Radio		86,379		(1,326	)		(6,174	)		78,879
Digital	-			-			-		-
Consolidated	$	216,653	$	(1,326	)	$	(6,174	)	$	209,153

The Company recorded impairment charges of $1.3 million related to indefinite lived intangible assets, and $0.3 million related to property and equipment. See the further discussion under “Assets Held for Sale” below.

Treasury Stock

On July 13, 2017, the Board of Directors approved a share repurchase of up to $15.0 million of the Company’s outstanding Class A common stock. On April 11, 2018, the Board of Directors approved the repurchase of up to an additional $15.0 million of the Company’s Class A common stock, for a total repurchase authorization of up to $30.0 million. On August 27, 2019, the Board of Directors approved the repurchase of up to an additional $15.0 million of the Company’s Class A common stock, for a total repurchase authorization of up to $45.0 million. Under the share repurchase program, the Company is authorized to purchase shares from time to time through open market purchases or negotiated purchases, subject to market conditions and other factors. The share repurchase program may be suspended or discontinued at any time without prior notice. On March 26, 2020, the Company suspended share repurchases under the plan in order to preserve cash during the continuing economic crisis resulting from the COVID-19 pandemic.

Treasury stock is included as a deduction from equity in the Stockholders’ Equity section of the Consolidated Balance Sheets. Shares repurchased pursuant to the Company’s share repurchase program are retired during the same calendar year.

During the three- and nine-month periods ended September 30, 2021, the Company did not repurchase any shares of Class A common stock. As of September 30, 2021, the Company has repurchased a total of approximately 8.6 million shares of Class A common stock at an average price per share of $3.76, for an aggregate purchase price of approximately $32.2 million, since inception of the share repurchase program. All such repurchased shares were retired as of September 30, 2021.

2017 Credit Facility

On November 30, 2017 (the “Closing Date”), the Company entered into its 2017 Credit Facility pursuant to the 2017 Credit Agreement. The 2017 Credit Facility consists of a $300.0 million senior secured Term Loan B Facility (the “Term Loan B Facility”), which was drawn in full on the Closing Date. In addition, the 2017 Credit Facility provides that the Company may increase the aggregate principal amount of the 2017 Credit Facility by up to an additional $100.0 million plus the amount that would result in its first lien net leverage ratio (as such term is used in the 2017 Credit Agreement) not exceeding 4.0 to 1.0, subject to the Company satisfying certain conditions.

Borrowings under the Term Loan B Facility were used on the Closing Date (a) to repay in full all of the Company’s and its subsidiaries’ outstanding obligations under the Company’s previous credit facility and to terminate the credit agreement relating thereto (the “2013 Credit Agreement”), (b) to pay fees and expenses in connection with the 2017 Credit Facility, and (c) for general corporate purposes.

The 2017 Credit Facility is guaranteed on a senior secured basis by certain of the Company’s existing and future wholly-owned domestic subsidiaries, and is secured on a first priority basis by the Company’s and those subsidiaries’ assets.

The Company’s borrowings under the 2017 Credit Facility bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Eurodollar Rate (as defined in the 2017 Credit Agreement) plus 2.75%; or (ii) the Base Rate (as defined in the 2017 Credit Agreement) plus 1.75%. The Term Loan B Facility expires on November 30, 2024 (the “Maturity Date”).

The amounts outstanding under the 2017 Credit Facility may be prepaid at the Company’s option without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a LIBOR

rate loan. The principal amount of the Term Loan B Facility shall be paid in installments on the dates and in the respective amounts set forth in the 2017 Credit Agreement, with the final balance due on the Maturity Date.

Subject to certain exceptions, the 2017 Credit Facility contains covenants that limit the ability of the Company and its restricted subsidiaries to, among other things:

incur liens on the Company’s property or assets;

make certain investments;

incur additional indebtedness;

consummate any merger, dissolution, liquidation, consolidation or sale of substantially all assets;

dispose of certain assets;

make certain restricted payments;

make certain acquisitions;

enter into substantially different lines of business;

enter into certain transactions with affiliates;

use loan proceeds to purchase or carry margin stock or for any other prohibited purpose;

change or amend the terms of the Company’s organizational documents or the organization documents of certain restricted subsidiaries in a materially adverse way to the lenders, or change or amend the terms of certain indebtedness;

enter into sale and leaseback transactions;

make prepayments of any subordinated indebtedness, subject to certain conditions; and

change the Company’s fiscal year, or accounting policies or reporting practices.

The 2017 Credit Facility also provides for certain customary events of default, including the following:

default for three (3) business days in the payment of interest on borrowings under the 2017 Credit Facility when due;

default in payment when due of the principal amount of borrowings under the 2017 Credit Facility;

failure by the Company or any subsidiary to comply with the negative covenants and certain other covenants relating to maintaining the legal existence of the Company and certain of its restricted subsidiaries and compliance with anti-corruption laws;

failure by the Company or any subsidiary to comply with any of the other agreements in the 2017 Credit Agreement and related loan documents that continues for thirty (30) days (or ten (10) days in the case of failure to comply with covenants related to inspection rights of the administrative agent and lenders and permitted uses of proceeds from borrowings under the 2017 Credit Facility) after the Company’s officers first become aware of such failure or first receive written notice of such failure from any lender;

default in the payment of other indebtedness if the amount of such indebtedness aggregates to $15.0 million or more, or failure to comply with the terms of any agreements related to such indebtedness if the holder or holders of such indebtedness can cause such indebtedness to be declared due and payable;

certain events of bankruptcy or insolvency with respect to the Company or any significant subsidiary;

final judgment is entered against the Company or any restricted subsidiary in an aggregate amount over $15.0 million, and either enforcement proceedings are commenced by any creditor or there is a period of 30 consecutive days during which the judgment remains unpaid and no stay is in effect;

any material provision of any agreement or instrument governing the 2017 Credit Facility ceases to be in full force and effect; and

any revocation, termination, substantial and adverse modification, or refusal by final order to renew, any media license, or the requirement (by final non-appealable order) to sell a television or radio station, where any such event or failure is reasonably expected to have a material adverse effect.

The Term Loan B Facility does not contain any financial covenants. In connection with the Company entering into the 2017 Credit Agreement, the Company and its restricted subsidiaries also entered into a Security Agreement, pursuant to which the Company

and all of the companies existing in future wholly-owned domestic subsidiaries (the "Guarantors") each granted a first priority security interest in the collateral securing the 2017 Credit Facility for the benefit of the lenders under the 2017 Credit Facility.

On April 30, 2019, the Company entered into an amendment to the 2017 Credit Agreement, which became effective on May 1, 2019.

The 2017 Credit Agreement contains a covenant that the Company deliver its financial statements and certain other information for each fiscal year within 90 days after the end of each fiscal year. As a result of the Company’s expanding business operations, primarily related to the acquisition of a majority interest in Cisneros Interactive in October 2020, the Company did not deliver its financial statements for the year ended December 31, 2020 and other information within 90 days after the end of the fiscal year ended December 31, 2020, and therefore the Company did not satisfy the requirement of this covenant in the 2017 Credit Agreement. However, the 2017 Credit Agreement provides an additional period of 30 days for the Company to satisfy such covenant. On April 12, 2021, the Company filed its 2020 10-K with the SEC. The Company believes it is in compliance with all covenants in the 2017 Credit Agreement and has satisfied the requirements of the 2017 Credit Agreement with respect to the delivery of the Company’s financial statements and other information for the fiscal year ended December 31, 2020.

On June 4, 2021, the Company entered into the Second Amendment (the "Amendment") to the 2017 Credit Agreement, by and among the Company, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively, the “Lenders”). The Amendment amends the 2017 Credit Agreement, primarily to permit additional investments in restricted subsidiaries that are not loan parties, and make certain changes to the definition of “Consolidated Net Income” for the purpose of calculating EBITDA as defined by the 2017 Credit Agreement. Pursuant to the Amendment, the Company agreed to pay to the Lenders consenting to the Amendment a fee equal to 0.375% of the aggregate principal amount of the outstanding loans held by such Lenders under the 2017 Credit Agreement as of June 4, 2021. This fee totaled approximately $0.6 million and will be amortized as interest expense over the remaining term of the Term Loan B.

The carrying amount of the Term Loan B Facility as of September 30, 2021 was $211.0 million, net of $2.0 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of September 30, 2021 was approximately $210.3 million. The estimated fair value is based on quoted prices in markets where trading occurs infrequently.

Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date.

ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.

Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis in the Consolidated Balance Sheets (in millions):

	September 30, 2021
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
(in millions)	Sheet		Level 1		Level 2		Level 3
Assets:
Money market account	$	88.3	$	-	$	88.3	$	-
Liabilities:
Contingent consideration	$	104.7	$	-	$	-	$	104.7
	December 31, 2020
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
	Sheet		Level 1		Level 2		Level 3
Assets:
Money market account	$	59.9	$	-	$	59.9	$	-
Certificates of deposit	$	2.8	$	-	$	2.8	$	-
Corporate bonds	$	25.2	$	-	$	25.2	$	-

The Company held investments in a money market fund, certificates of deposit and corporate bonds. All certificates of deposit are within the current FDIC insurance limits and the majority of corporate bonds are investment grade.

The Company’s available for sale securities are comprised of certificates of deposit and bonds. These securities are valued using quoted prices for similar attributes in active markets (Level 2). Since these investments are classified as available for sale, they are recorded at their fair market value within Cash and cash equivalents and Marketable securities in the Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income.

As of September 30, 2021, all of the available for sale securities have matured.

Included in interest income for the nine-month period ended September 30, 2021 was interest income related to the Company’s available for sale securities of $0.2 million. There was no interest income related to the Company’s available for sale securities for the three-month period ended September 30, 2021.

The fair value of the contingent consideration is related to the acquisition of the remaining 49% of the issued and outstanding shares of stock of Cisneros Interactive, and the acquisition of MediaDonuts, and was estimated by applying the real options approach using level 3 inputs as further discussed in Note 7.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes foreign currency translation adjustments and changes in the fair value of available for sale securities.

The following table provides a roll-forward of accumulated other comprehensive income (loss) for the three- and nine-month periods ended September 30, 2021 (in millions):

	Foreign Currency Translation			Marketable Securities			Total
Accumulated other comprehensive income (loss) as of December 31, 2020	$	(1.4	)	$	0.4		$	(1.0	)
Other comprehensive income (loss)		0.4			(0.1	)		0.3
Income tax (expense) benefit		-			-			-
Other comprehensive income (loss), net of tax		0.4			(0.1	)		0.3
Accumulated other comprehensive income (loss) as of March 31, 2021		(1.0	)		0.3			(0.7	)
Other comprehensive income (loss)		(0.3	)		-			(0.3	)
Income tax (expense) benefit		-			-			-
Other comprehensive income (loss), net of tax		(0.3	)		-			(0.3	)
Accumulated other comprehensive income (loss) as of June 30, 2021		(1.3	)		0.3			(1.0	)
Other comprehensive income (loss)		0.2			-			0.2
Income tax (expense) benefit		-			-			-
Other comprehensive income (loss), net of tax		0.2			-			0.2
Accumulated other comprehensive income (loss) as of September 30, 2021	$	(1.1	)	$	0.3		$	(0.8	)

Foreign Currency

The Company’s reporting currency is the U.S. dollar. All transactions initiated in foreign currencies are translated into U.S. dollars in accordance with ASC Topic 830, “Foreign Currency Matters” and the related rate fluctuation on transactions is included in the consolidated statements of operations.

For foreign operations with the local currency as the functional currency, assets and liabilities are translated from the respective local currencies into U.S. dollars at the exchange rate prevailing at the balance sheet date and equity is translated at historical rates. Revenues and expenses are translated at the average exchange rate for the period. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive (income) loss.

Based on recent data reported by the International Monetary Fund, Argentina has been identified as a country with a highly inflationary economy. According to U.S. GAAP, a registrant should apply highly inflationary accounting in the first reporting period after such determination. Therefore, the Company transitioned the accounting for its Argentine operations to highly inflationary status as of July 1, 2018 and, commencing that date, changed the functional currency from the Argentine peso to the U.S. dollar.

Cost of Revenue

Cost of revenue related to the Company’s digital segment consists primarily of the costs of online media acquired from third-party publishers.

Assets Held For Sale

Assets are classified as held for sale when the carrying value is expected to be recovered through a sale rather than through their continued use and all of the necessary classification criteria have been met. Assets held for sale are recorded at the lower of their carrying value or estimated fair value less selling costs and classified as current assets. Depreciation is not recorded on assets classified as held for sale.

On March 30, 2020, the Company entered into an agreement to sell a building and related improvements in the Houston, Texas area for approximately $5.4 million. The transaction closed during the third quarter of 2021 and other operating gain of $2.3 million was recorded in the Consolidated Statements of Operations for the three- and nine-month periods ended September 30, 2021.

During the first quarter of 2020, the Company listed for sale a building and related improvements in the Laredo, Texas area for approximately $2.9 million. The transaction met the criteria for classification as assets held for sale and the carrying value of $2.0 million is presented as Assets Held for Sale in the Consolidated Balance Sheet as of September 30, 2021.

During the first quarter of 2021, the Company entered into negotiations to sell the assets of radio station WNUE-FM in Orlando, Florida, for $4.0 million. On April 12, 2021, the Company entered into an asset purchase agreement for these assets. The carrying value of the assets was $4.0 million, reflecting an impairment charge of $1.3 million that was recorded in the first quarter of 2021. The transaction closed during the third quarter of 2021.

During the first quarter of 2021, the Company entered into negotiations to sell a building and related improvements in the Tampa, Florida area. As of September 30, 2021, the fair value of the assets was $0.9 million, which resulted in an impairment charge of $0.3 million during the nine-month period ended September 30, 2021. The transaction met the criteria for classification as assets held for sale and the adjusted carrying value is presented as Assets Held for Sale in the Consolidated Balance Sheet as of September 30, 2021. The transaction is anticipated to close during the fourth quarter of 2021.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company does not expect the new guidance to have a material impact on its consolidated financial statements.

There were no other new accounting pronouncements that were issued or became effective since the issuance of the 2020 10-K that had, or are expected to have, a material impact on the Company’s consolidated financial statements.

Newly Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted ASU 2019-12 on January 1, 2021, which did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.