EX-99.1 2 d623693dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

ENTRAVISION COMMUNICATIONS CORPORATION REPORTS

THIRD QUARTER 2013 RESULTS

SANTA MONICA, CALIFORNIA, November 6, 2013 – Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and nine-month periods ended September 30, 2013.

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 8. Unaudited financial highlights are as follows:

 

    Three-Month Period     Nine-Month Period  
    Ended September 30,     Ended September 30,  
    2013     2012     % Change     2013     2012     % Change  

Net revenue

  $ 57,786      $ 58,486        (1 )%    $ 163,823      $ 159,501        3

Operating expenses (1)

    33,991        32,886        3     99,311        96,403        3

Corporate expenses (2)

    5,011        4,465        12     14,244        12,527        14

Consolidated adjusted EBITDA (3)

    19,864        21,640        (8 )%      53,241        51,521        3

Free cash flow (4)

  $ 11,919      $ 10,545        13   $ 25,552      $ 19,209        33

Free cash flow per share, basic and diluted (4)

  $ 0.14      $ 0.12        17   $ 0.29      $ 0.22        32

Net income (loss) applicable to common stockholders

  $ (21,384   $ 7,233        NM      $ (17,268   $ 5,904        NM   

Net income (loss) per share applicable to common stockholders, basic and diluted

  $ (0.24   $ 0.08        NM      $ (0.20   $ 0.07        NM   

Weighted average common shares outstanding, basic

    87,959,856        85,940,225          87,170,106        85,861,671     

Weighted average common shares outstanding, diluted

    87,959,856        86,386,655          87,170,106        86,220,868     

 

(1) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.3 million of non-cash stock-based compensation for each of the three-month periods ended September 30, 2013 and 2012, and $0.8 million and $0.6 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2013 and 2012, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment and other income (loss).
(2) Corporate expenses include $1.0 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended September 30, 2013 and 2012, respectively, and $2.7 million and $1.1 million of non-cash stock-based compensation for the nine-month periods ended September 30, 2013 and 2012, respectively.
(3) 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.
(4) Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, and capital expenditures. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, less non-cash interest expense relating to discount amortization on our $324 million aggregate principal amount of 8.750% senior secured first lien notes (the “Notes”), and less interest income. Free cash flow per share is defined as free cash flow divided by the basic or diluted weighted average common shares outstanding.


Entravision Communications

Page 2 of 9

 

Commenting on the Company’s earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, “During the third quarter, we recorded continued growth in core advertising revenue (excluding retransmission consent revenue and political advertising revenue) as both our television and radio segments outperformed their respective industry averages. Our improved core revenue performance was offset by decreased political revenue, which benefited from the presidential election last year, and was not material in 2013. As a result, net revenue was off modestly in the quarter; however, we improved our free cash flow over the third quarter of 2012 as we benefited from the successful refinancing of our debt. Our audience shares remain strong in the nation’s most densely populated Hispanic markets, and we believe we are well positioned to benefit as the U.S. Hispanic market continues to expand and advertisers increasingly recognize the importance of reaching our target audience.”

Financial Results

Three-Month Period Ended September 30, 2013 Compared to Three-Month Period Ended

September 30, 2012

(Unaudited)

 

     Three-Month Period  
     Ended September 30,  
     2013     2012     % Change  

Net revenue

   $ 57,786      $ 58,486        (1 )% 

Operating expenses (1)

     33,991        32,886        3

Corporate expenses (1)

     5,011        4,465        12

Depreciation and amortization

     3,613        4,013        (10 )% 
  

 

 

   

 

 

   

Operating income (loss)

     15,171        17,122        (11 )% 

Interest expense, net

     (5,340     (8,661     (38 )% 

Gain (loss) on debt extinguishment

     (29,404     —          NM   
  

 

 

   

 

 

   

Income (loss) before income taxes

     (19,573     8,461        NM   

Income tax (expense) benefit

     (1,811     (1,228     47
  

 

 

   

 

 

   

Net income (loss)

   $ (21,384   $ 7,233        NM   
  

 

 

   

 

 

   

 

(1) Operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $57.8 million for the three-month period ended September 30, 2013 from $58.5 million for the three-month period ended September 30, 2012, a decrease of $0.7 million. Of the overall decrease, $1.2 million was generated by our television segment and was primarily attributable to a decrease in political advertising revenue, which was not material in 2013, partially offset by increases in local advertising revenue and retransmission consent revenue. This decrease was partially offset by a $0.5 million increase that was generated by our radio segment and was primarily attributable to an increase in local advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $34.0 million for the three-month period ended September 30, 2013 from $32.9 million for the three-month period ended September 30, 2012, an increase of $1.1 million. The increase was primarily attributable to an increase in salary expense and an increase in expenses associated with the increase in local advertising revenue.

Corporate expenses increased to $5.0 million for the three-month period ended September 30, 2013 from $4.5 million for the three-month period ended September 30, 2012, an increase of $0.5 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

During the three-month period ended September 30, 2013, we recorded a loss on debt extinguishment of $29.4 million related to the premium associated with the redemption of our Notes, the unamortized bond discount, and finance costs.


Entravision Communications

Page 3 of 9

 

Nine-Month Period Ended September 30, 2013 Compared to Nine-Month Period Ended

September 30, 2012

(Unaudited)

 

     Nine-Month Period  
     Ended September 30,  
     2013     2012     % Change  

Net revenue

   $ 163,823      $ 159,501        3

Operating expenses (1)

     99,311        96,403        3

Corporate expenses (1)

     14,244        12,527        14

Depreciation and amortization

     11,388        12,436        (8 )% 
  

 

 

   

 

 

   

Operating income (loss)

     38,880        38,135        2

Interest expense, net

     (20,989     (26,707     (21 )% 

Gain (loss) on debt extinguishment

     (29,534     (1,230     NM   
  

 

 

   

 

 

   

Income (loss) before income taxes

     (11,643     10,198        NM   

Income tax (expense) benefit

     (5,625     (4,294     31
  

 

 

   

 

 

   

Net income (loss)

   $ (17,268   $ 5,904        NM   
  

 

 

   

 

 

   

 

(1) Operating expenses and corporate expenses are defined on page 1.

Net revenue increased to $163.8 million for the nine-month period ended September 30, 2013 from $159.5 million for the nine-month period ended September 30, 2012, an increase of $4.3 million. Of the overall increase, $2.8 million was generated by our television segment and was primarily attributable to increases in local and national advertising revenue, and retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013. Additionally, $1.5 million of the overall increase was generated by our radio segment and was primarily attributable to increases in local and national advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $99.3 million for the nine-month period ended September 30, 2013 from $96.4 million for the nine-month period ended September 30, 2012, an increase of $2.9 million. The increase was primarily attributable to an increase in expenses associated with the increase in net revenue and an increase in salary expense, partially offset by a decrease in bad debt expense.

Corporate expenses increased to $14.2 million for the nine-month period ended September 30, 2013 from $12.5 million for the nine-month period ended September 30, 2012, an increase of $1.7 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

Loss on debt extinguishment increased to $29.5 million for the nine-month period ended September 30, 2013 from $1.2 million for the nine-month period ended September 30, 2012, an increase of $28.3 million. The increase was primarily attributable to the premium associated with the redemption of our Notes, the unamortized bond discount, and finance costs.


Entravision Communications

Page 4 of 9

 

Segment Results

The following represents selected unaudited segment information:

 

     Three-Month Period     Nine-Month Period  
     Ended September 30,     Ended September 30,  
     2013      2012      % Change     2013      2012      % Change  

Net Revenue

                

Television

   $ 39,747       $ 40,903         (3 )%    $ 114,289       $ 111,466         3

Radio

     18,039         17,583         3     49,534         48,035         3
  

 

 

    

 

 

      

 

 

    

 

 

    

Total

   $ 57,786       $ 58,486         (1 )%    $ 163,823       $ 159,501         3

Operating Expenses (1)

                

Television

   $ 20,032       $ 19,573         2   $ 58,519       $ 57,314         2

Radio

     13,959         13,313         5     40,792         39,089         4
  

 

 

    

 

 

      

 

 

    

 

 

    

Total

   $ 33,991       $ 32,886         3   $ 99,311       $ 96,403         3

Corporate Expenses (1)

   $ 5,011       $ 4,465         12   $ 14,244       $ 12,527         14

Consolidated adjusted EBITDA (1)

   $ 19,864       $ 21,640         (8 )%    $ 53,241       $ 51,521         3

 

(1) Operating expenses, Corporate expenses, and Consolidated adjusted EBITDA are defined on page 1.

Entravision Communications Corporation will hold a conference call to discuss its 2013 third quarter results on November 6, 2013 at 5 p.m. Eastern Time. To access the conference call, please dial 412-858-4600 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 diversified Spanish-language media company utilizing a combination of television, radio and digital operations to reach Latino consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both the top-ranked Univision television network and Univision’s UniMas network, with television stations in 19 of the nation’s top 50 Latino markets. The company owns and/or operates 56 primary television stations and also operates one of the nation’s largest groups of primarily Spanish-language radio stations, consisting of 49 owned and operated radio stations. Additionally, Entravision has a variety of cross-platform digital content and sales offerings designed to capitalize on the company’s leadership position within the Latino broadcasting community. 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)

For more information, please contact:

 

Christopher T. Young   Mike Smargiassi/Brad Edwards
Chief Financial Officer   Brainerd Communicators, Inc.
Entravision Communications Corporation   212-986-6667
310-447-3870  


Entravision Communications

Page 5 of 9

 

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands)

 

     September 30,     December 31,  
     2013     2012  
     (Unaudited)        
ASSETS     

Current assets

    

Cash and cash equivalents

   $ 53,546      $ 36,130   

Trade receivables, net of allowance for doubtful accounts

     52,017        48,030   

Prepaid expenses and other current assets

     5,434        4,245   
  

 

 

   

 

 

 

Total current assets

     110,997        88,405   

Property and equipment, net

     59,589        61,435   

Intangible assets subject to amortization, net

     20,446        22,349   

Intangible assets not subject to amortization

     220,701        220,701   

Goodwill

     36,647        36,647   

Other assets

     7,284        8,514   
  

 

 

   

 

 

 

Total assets

   $ 455,664      $ 438,051   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities

    

Current maturities of long-term debt

   $ 3,750      $ 150   

Advances payable, related parties

     118        118   

Accounts payable and accrued expenses

     29,025        39,158   
  

 

 

   

 

 

 

Total current liabilities

     32,893        39,426   

Long-term debt, less current maturities (net of bond discount of $0 and $2,982)

     371,250        340,664   

Other long-term liabilities

     6,874        7,359   

Deferred income taxes

     50,256        45,201   
  

 

 

   

 

 

 

Total liabilities

     461,273        432,650   
  

 

 

   

 

 

 

Stockholders’ equity (deficit)

    

Class A common stock

     6        5   

Class B common stock

     2        2   

Class U common stock

     1        1   

Additional paid-in capital

     937,071        930,814   

Accumulated deficit

     (942,689     (925,421
  

 

 

   

 

 

 

Total stockholders’ equity (deficit)

     (5,609     5,401   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity (deficit)

   $ 455,664      $ 438,051   
  

 

 

   

 

 

 


Entravision Communications

Page 6 of 9

 

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,  
     2013     2012     2013     2012  

Net revenue

   $ 57,786      $ 58,486      $ 163,823      $ 159,501   
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Direct operating expenses

     25,860        23,293        76,073        67,803   

Selling, general and administrative expenses

     8,131        9,593        23,238        28,600   

Corporate expenses

     5,011        4,465        14,244        12,527   

Depreciation and amortization

     3,613        4,013        11,388        12,436   
  

 

 

   

 

 

   

 

 

   

 

 

 
     42,615        41,364        124,943        121,366   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     15,171        17,122        38,880        38,135   

Interest expense

     (5,352     (8,671     (21,017     (26,730

Interest income

     12        10        28        23   

Gain (loss) on debt extinguishment

     (29,404     —          (29,534     (1,230
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (19,573     8,461        (11,643     10,198   

Income tax (expense) benefit

     (1,811     (1,228     (5,625     (4,294
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) applicable to common stockholders

   $ (21,384   $ 7,233      $ (17,268   $ 5,904   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share:

        

Net income (loss) per share applicable to common stockholders, basic and diluted

   $ (0.24   $ 0.08      $ (0.20   $ 0.07   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding, basic

     87,959,856        85,940,225        87,170,106        85,861,671   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding, diluted

     87,959,856        86,386,655        87,170,106        86,220,868   
  

 

 

   

 

 

   

 

 

   

 

 

 


Entravision Communications

Page 7 of 9

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

 

     Three-Month Period     Nine-Month Period  
     Ended September 30,     Ended September 30,  
     2013     2012     2013     2012  

Cash flows from operating activities:

        

Net income (loss)

   $ (21,384   $ 7,233      $ (17,268   $ 5,904   

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

        

Depreciation and amortization

     3,613        4,013        11,388        12,436   

Deferred income taxes

     1,761        1,080        5,055        3,485   

Amortization of debt issue costs

     408        569        1,438        1,706   

Amortization of syndication contracts

     148        175        450        556   

Payments on syndication contracts

     (344     (435     (995     (1,369

Non-cash stock-based compensation

     1,276        765        3,518        1,763   

(Gain) loss on debt extinguishment

     29,404        —          29,534        1,230   

Changes in assets and liabilities:

        

(Increase) decrease in accounts receivable

     626        260        (3,701     (3,511

(Increase) decrease in prepaid expenses and other assets

     (869     (879     (1,323     (1,056

Increase (decrease) in accounts payable, accrued expenses and other liabilities

     (9,473     (5,468     (10,111     (7,466
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     5,166        7,313        17,985        13,678   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

        

Purchases of property and equipment and intangibles

     (2,963     (2,855     (7,568     (6,502
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (2,963     (2,855     (7,568     (6,502
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

        

Proceeds from issuance of common stock

     348        23        2,740        23   

Payments on long-term debt

     (364,997     —          (365,047     (20,600

Proceeds from borrowings on long-term debt

     375,000        —          375,000        —     

Payments of capitalized debt offering and issuance costs

     (74     —          (5,694     (80
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     10,277        23        6,999        (20,657
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     12,480        4,481        17,416        (13,481

Cash and cash equivalents:

        

Beginning

     41,066        40,757        36,130        58,719   
  

 

 

   

 

 

   

 

 

   

 

 

 

Ending

   $ 53,546      $ 45,238      $ 53,546      $ 45,238   
  

 

 

   

 

 

   

 

 

   

 

 

 


Entravision Communications

Page 8 of 9

 

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,  
     2013     2012     2013     2012  

Consolidated adjusted EBITDA (1)

   $ 19,864      $ 21,640      $ 53,241      $ 51,521   

Interest expense

     (5,352     (8,671     (21,017     (26,730

Interest income

     12        10        28        23   

Income tax (expense) benefit

     (1,811     (1,228     (5,625     (4,294

Amortization of syndication contracts

     (148     (175     (450     (556

Payments on syndication contracts

     344        435        995        1,369   

Non-cash stock-based compensation included in direct operating expenses

     (297     (45     (776     (101

Non-cash stock-based compensation included in selling, general and administrative expenses

     —          (222     —          (546

Non-cash stock-based compensation included in corporate expenses

     (979     (498     (2,742     (1,116

Depreciation and amortization

     (3,613     (4,013     (11,388     (12,436

Gain (loss) on debt extinguishment

     (29,404     —          (29,534     (1,230
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     (21,384     7,233        (17,268     5,904   

Depreciation and amortization

     3,613        4,013        11,388        12,436   

Deferred income taxes

     1,761        1,080        5,055        3,485   

Amortization of debt issue costs

     408        569        1,438        1,706   

Amortization of syndication contracts

     148        175        450        556   

Payments on syndication contracts

     (344     (435     (995     (1,369

Non-cash stock-based compensation

     1,276        765        3,518        1,763   

(Gain) loss on debt extinguishment

     29,404        —          29,534        1,230   

Changes in assets and liabilities:

        

(Increase) decrease in accounts receivable

     626        260        (3,701     (3,511

(Increase) decrease in prepaid expenses and other assets

     (869     (879     (1,323     (1,056

Increase (decrease) in accounts payable, accrued expenses and other liabilities

     (9,473     (5,468     (10,111     (7,466
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from operating activities

   $ 5,166      $ 7,313      $ 17,985      $ 13,678   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Consolidated adjusted EBITDA is defined on page 1.


Entravision Communications

Page 9 of 9

 

Entravision Communications Corporation

Reconciliation of Free Cash Flow to Net Income (Loss)

(In thousands; unaudited)

The most directly comparable GAAP financial measure is net income (loss). A reconciliation of this non-GAAP measure to net income (loss) for each of the periods presented is as follows:

 

     Three-Month Period     Nine-Month Period  
     Ended September 30,     Ended September 30,  
     2013     2012     2013     2012  

Consolidated adjusted EBITDA (1)

   $ 19,864      $ 21,640      $ 53,241      $ 51,521   

Net interest expense (1)

     4,932        8,092        19,551        25,001   

Cash paid for income taxes

     50        148        570        809   

Capital expenditures (2)

     2,963        2,855        7,568        6,502   
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow (1)

     11,919        10,545        25,552        19,209   

Capital expenditures (2)

     2,963        2,855        7,568        6,502   

Amortization of debt issue costs

     (408     (569     (1,438     (1,706

Non-cash income tax expense

     (1,761     (1,080     (5,055     (3,485

Amortization of syndication contracts

     (148     (175     (450     (556

Payments on syndication contracts

     344        435        995        1,369   

Non-cash stock-based compensation included in direct operating expenses

     (297     (45     (776     (101

Non-cash stock-based compensation included in selling, general and administrative expenses

     —          (222     —          (546

Non-cash stock-based compensation included in corporate expenses

     (979     (498     (2,742     (1,116

Depreciation and amortization

     (3,613     (4,013     (11,388     (12,436

Gain (loss) on debt extinguishment

     (29,404     —          (29,534     (1,230
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (21,384   $ 7,233      $ (17,268   $ 5,904   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.
(2) Capital expenditures is not part of the consolidated statement of operations.