10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM              TO             

COMMISSION FILE NUMBER 1-15997

ENTRAVISION COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-4783236
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

(Address of principal executive offices) (Zip Code)

(310) 447-3870

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common stock	EVC	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐    No  ☒

As of November 4, 2019, there were 60,268,985 shares, $0.0001 par value per share, of the registrant’s Class A common stock outstanding, 14,927,613 shares, $0.0001 par value per share, of the registrant’s Class B common stock outstanding and 9,352,729 shares, $0.0001 par value per share, of the registrant’s Class U common stock outstanding.

ENTRAVISION COMMUNICATIONS CORPORATION

FORM 10-Q FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019

TABLE OF CONTENTS

		Page Number
	PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	4
	CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018	4
	CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018	5
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018	6
	CONSOLIDATED STATEMENTS OF STOCKHOLDERS’  EQUITY (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018	7
	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018	9
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	10
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42
ITEM 4.	CONTROLS AND PROCEDURES	42
	PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	45
ITEM 1A.	RISK FACTORS	45
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	45
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	45
ITEM 4.	MINE SAFETY DISCLOSURES	45
ITEM 5.	OTHER INFORMATION	45
ITEM 6.	EXHIBITS	46

Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. Some of the key factors impacting these risks and uncertainties include, but are not limited to:

• risks related to our substantial indebtedness or our ability to raise capital;

• provisions of our debt instruments, including the agreement dated as of November 30, 2017, as amended as of April 30, 2019, or the 2017 Credit Agreement, which governs our current credit facility, or the 2017 Credit Facility, the terms of which restrict certain aspects of the operation of our business;

• our continued compliance with all of our obligations under the 2017 Credit Agreement;

• cancellations or reductions of advertising due to the then current economic environment or otherwise;

• advertising rates remaining constant or decreasing;

• rapid changes in digital advertising;

• the impact of rigorous competition in Spanish-language media and in the advertising industry generally;

• the impact of changing preferences, if any, among U.S. Hispanic audiences for Spanish-language programming, especially among younger age groups;  

• the impact of changing preferences, if any, among audiences favoring newer forms of media over traditional media, such as television and radio;

• the ability to keep up with rapid changes, and compete effectively, in new forms of media, including digital media, and changes within digital media;

• the possible impact on our business as a result of changes in the way market share is measured by third parties;

• our relationship with Univision Communications Inc., or Univision;

• the extent to which we continue to generate revenue under retransmission consent agreements;

• subject to restrictions contained in the 2017 Credit Agreement, the overall success of our acquisition strategy and the integration of any acquired assets with our existing operations;

• our ability to implement effective internal controls to address material weaknesses identified in this report;

• industry-wide market factors and regulatory and other developments affecting our operations;

2

• the ability to manage our growth effectively, including having adequate personnel and other resources for both operational and administrative functions;

• economic uncertainty;

• the impact of any potential future impairment of our assets;

• risks related to changes in accounting interpretations;

• consequences of, and uncertainties regarding, foreign currency exchange including fluctuations thereto from time to time;  

• legal, political and other risks associated with our operations located outside the United States;

• the effect of changesin broadcast transmission standards by the Advanced Television Systems Committee's 3.0 standard (“ATSC 3.0”), as they are adopted in the broadcast industry and as they may impact our ability to monetize our spectrum assets; and

• the uncertainty and impact, including additional and/or changing costs, of mandates and other obligations that may be imposed upon us as a result of federal healthcare laws, including the Affordable Care Act, the rules and regulations promulgated thereunder, any executive action with respect thereto, and any changes with respect to any of the foregoing in Congress.  

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see the section entitled “Risk Factors,” beginning on page 33 of our Annual Report on Form 10-K for the year ended December 31, 2018.  

3

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share and per share data)

	September 30,			December 31,
	2019			2018
ASSETS
Current assets
Cash and cash equivalents	$	48,705			46,733
Marketable securities		107,486			132,424
Restricted cash		734			732
Trade receivables, (including related parties of $4,483 and $4,530) net of allowance for doubtful accounts of $2,799 and $3,395		68,809			79,308
Assets held for sale		950			1,179
Prepaid expenses and other current assets (including related parties of $274 and $274)		13,621			10,672
Total current assets		240,305			271,048
Property and equipment, net of accumulated depreciation of $185,731 and $187,375		79,392			64,939
Intangible assets subject to amortization, net of accumulated amortization of $98,373 and $93,793 (including related parties of $7,406 and $8,327)		18,019			22,598
Intangible assets not subject to amortization		251,098			254,598
Goodwill		46,511			74,292
Operating leases right of use asset		45,058			-
Other assets		7,459			2,934
Total assets	$	687,842		$	690,409
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	3,000		$	3,000
Accounts payable and accrued expenses (including related parties of $2,277 and $1,948)		46,766			51,034
Operating lease liabilities		8,843			-
Total current liabilities		58,609			54,034
Long-term debt, less current maturities, net of unamortized debt issuance costs of $2,600 and $2,709		238,400			240,541
Long-term operating lease liabilities		42,672			-
Other long-term liabilities		7,531			16,418
Deferred income taxes		54,654			46,684
Total liabilities		401,866			357,677
Commitments and contingencies (note 6)
Stockholders' equity
Class A common stock, $0.0001 par value, 260,000,000 shares authorized; shares issued and outstanding 2019 60,268,985; 2018 63,210,531		6			6
Class B common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and outstanding 2019 and 2018 14,927,613		2			2
Class U common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and outstanding 2019 and 2018 9,352,729		1			1
Additional paid-in capital		841,567			862,299
Accumulated deficit		(555,236	)		(528,164	)
Accumulated other comprehensive income (loss)		(364	)		(1,412	)
Total stockholders' equity		285,976			332,732
Total liabilities and stockholders' equity	$	687,842		$	690,409

See Notes to Consolidated Financial Statements

4

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)

	Three-Month Period						Nine-Month Period
	Ended September 30,						Ended September 30,
	2019			2018			2019			2018
Net Revenue	$	68,816		$	74,575		$	202,737		$	215,742
Expenses:
Cost of revenue - digital media		9,942			13,240			26,443			35,249
Direct operating expenses (including related parties of $2,048, $2,175, $6,017 and $6,431) (including non-cash stock-based compensation of $74, $156, $324 and $448)		30,807			31,694			89,392			93,844
Selling, general and administrative expenses		12,457			12,398			39,816			38,365
Corporate expenses (including non-cash stock-based compensation of $745, $1,130, $2,130 and $3,263)		6,785			6,913			20,180			19,154
Depreciation and amortization (includes direct operating of $2,888, $2,504, $8,350 and $7,606; selling, general and administrative of $1,134, $1,434, $3,579 and $4,048; and corporate of $168, $156, $483 and $398) (including related parties of $306, $308, $921 and $922)		4,190			4,094			12,412			12,052
Change in fair value contingent consideration		-			(114	)		(2,376	)		1,073
Impairment charge		9,075			-			31,443			-
Foreign currency (gain) loss		927			335			977			531
Other operating (gain) loss		(1,572	)		(327	)		(5,165	)		(622	)
Operating income (loss)		(3,795	)		6,342			(10,385	)		16,096
Interest expense		(3,537	)		(3,995	)		(10,581	)		(11,394	)
Interest income		825			933			2,601			2,885
Dividend income		241			457			747			1,002
Income (loss) before income taxes		(6,266	)		3,737			(17,618	)		8,589
Income tax benefit (expense)		(5,920	)		(1,443	)		(9,265	)		(3,164	)
Income (loss) before equity in net income (loss) of nonconsolidated affiliate		(12,186	)		2,294			(26,883	)		5,425
Equity in net income (loss) of nonconsolidated affiliate, net of tax		(31	)		(79	)		(189	)		(177	)
Net income (loss)	$	(12,217	)	$	2,215		$	(27,072	)	$	5,248
Basic and diluted earnings per share:
Net income (loss) per share, basic and diluted	$	(0.14	)	$	0.02		$	(0.32	)	$	0.06
Cash dividends declared per common share	$	0.05		$	0.05		$	0.15		$	0.15
Weighted average common shares outstanding, basic		84,765,694			88,852,342			85,404,250			89,371,750
Weighted average common shares outstanding, diluted		84,765,694			90,122,425			85,404,250			90,574,663

See Notes to Consolidated Financial Statements

5

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In thousands, except share and per share data)

	Three-Month Period					Nine-Month Period
	Ended September 30,					Ended September 30,
	2019			2018		2019			2018
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Other comprehensive income (loss), net of tax:
Change in foreign currency translation		(104	)		40		(392	)		(220	)
Change in fair value of available for sale securities		154			103		1,440			(1,139	)
Total other comprehensive income (loss)		50			143		1,048			(1,359	)
Comprehensive income  (loss)	$	(12,167	)	$	2,358	$	(26,024	)	$	3,889

See Notes to Consolidated Financial Statements

6

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share and per share data)

	Number of Common Shares										Common Stock												Accumulated
								Treasury			Class		Class		Class		Additional Paid-in			Accumulated			Other Comprehensive
	Class A			Class B		Class U		Stock			A		B		U		Capital			Deficit			Income (Loss)			Total
Balance, December 31, 2018		63,210,531			14,927,613		9,352,729		-			6		2		1		862,299			(528,164	)		(1,412	)		332,732
Issuance of common stock upon exercise of stock options  or awards of restricted stock units		25,059			-		-		-			-		-		-		(42	)		-			-			(42	)
Stock-based compensation expense		-			-		-		-			-		-		-		800			-			-			800
Repurchase of Class A common stock		(2,098,443	)		-		-		2,098,443			-		-		-		(7,706	)		-			-			(7,706	)
Retirement of treasury stock		-			-		-		(2,098,443	)		-		-		-		-			-			-			-
Dividends paid		-			-		-		-			-		-		-		(4,271	)		-			-			(4,271	)
Change in fair value of marketable securities		-			-		-		-			-		-		-		-			-			763			763
Foreign currency translation gain (loss)		-			-		-		-			-		-		-		-			-			30			30
Net income (loss) for the three-month period-ended March 31, 2019		-			-		-		-			-		-		-		-			1,424			-			1,424
Balance, March 31, 2019		61,137,147			14,927,613		9,352,729		-			6		2		1		851,080			(526,740	)		(619	)		323,730
Issuance of common stock upon exercise of stock options  or awards of restricted stock units		20,000			-		-		-			-		-		-		-			-			-			-
Stock-based compensation expense		-			-		-		-			-		-		-		836			-			-			836
Repurchase of Class A common stock		(438,534	)		-		-		438,534			-		-		-		(1,302	)		-			-			(1,302	)
Retirement of treasury stock		-			-		-		(438,534	)		-		-		-		-			-			-			-
Dividends paid		-			-		-		-			-		-		-		(4,269	)		-			-			(4,269	)
Change in fair value of marketable securities		-			-		-		-			-		-		-		-			-			523			523
Foreign currency translation gain (loss)		-			-		-		-			-		-		-		-			-			(318	)		(318	)
Net income (loss) for the three-month period-ended June 30, 2019		-			-		-		-			-		-		-		-			(16,279	)		-			(16,279	)
Balance, June 30, 2019		60,718,613			14,927,613		9,352,729		-			6		2		1		846,345			(543,019	)		(414	)		302,921
Issuance of common stock upon exercise of stock options  or awards of restricted stock units		21,410			-		-		-			-		-		-		(21	)		-			-			(21	)
Stock-based compensation expense		-			-		-		-			-		-		-		819			-			-			819
Repurchase of Class A common stock		(471,038	)		-		-		471,038			-		-		-		(1,349	)		-			-			(1,349	)
Retirement of treasury stock		-			-		-		(471,038	)		-		-		-		-			-			-			-
Dividends paid		-			-		-		-			-		-		-		(4,227	)		-			-			(4,227	)
Change in fair value of marketable securities		-			-		-		-			-		-		-		-			-			154			154
Foreign currency translation gain (loss)		-			-		-		-			-		-		-		-			-			(104	)		(104	)
Net income (loss) for the three-month period-ended September 30, 2019		-			-		-		-			-		-		-		-			(12,217	)		-			(12,217	)
Balance, September 30, 2019		60,268,985			14,927,613		9,352,729		-			6		2		1		841,567			(555,236	)		(364	)		285,976

See Notes to Consolidated Financial Statements

7

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share and per share data)

	Number of Common Shares										Common Stock													Accumulated
								Treasury			Class			Class		Class		Additional Paid-in			Accumulated			Other Comprehensive
	Class A			Class B		Class U		Stock			A			B		U		Capital			Deficit			Income (Loss)			Total
Balance, December 31, 2017		66,069,325			14,927,613		9,352,729		-			7			2		1		888,650			(540,325	)		(60	)		348,275
Issuance of common stock upon exercise of stock options  or awards of restricted stock units		17,356			-		-		-			-			-		-		-			-			-			-
Tax payments related to shares withheld for share-based  compensation plans		-			-		-		-			-			-		-		(43	)		-			-			(43	)
Stock-based compensation expense		-			-		-		-			-			-		-		1,249			-			-			1,249
Repurchase of Class A common stock		(500,587	)		-		-		500,587			-			-		-		(2,402	)		-			-			(2,402	)
Retirement of treasury stock		-			-		-		(500,587	)		-			-		-		-			-			-			-
Dividends paid		-			-		-		-			-			-		-		(4,518	)		-			-			(4,518	)
Change in fair value of marketable securities		-			-		-		-			-			-		-		-			-			(1,239	)		(1,239	)
Foreign currency translation gain (loss)		-			-		-		-			-			-		-		-			-			290			290
Net income (loss) for the three-month period-ended March 31, 2018		-			-		-		-			-			-		-		-			(1,808	)		-			(1,808	)
Balance, March 31, 2018		65,586,094			14,927,613		9,352,729		-			7			2		1		882,936			(542,133	)		(1,009	)		339,804
Issuance of common stock upon exercise of stock options  or awards of restricted stock units		56,147			-		-		-			-			-		-		106			-			-			106
Tax payments related to shares withheld for share-based  compensation plans		-			-		-		-			-			-		-		(12	)		-			-			(12	)
Stock-based compensation expense		-			-		-		-			-			-		-		1,176			-			-			1,176
Repurchase of Class A common stock		(1,088,086	)		-		-		1,088,086			(1	)		-		-		(5,257	)		-			-			(5,258	)
Retirement of treasury stock		-			-		-		(1,088,086	)		-			-		-		-			-			-			-
Dividends paid		-			-		-		-			-			-		-		(4,441	)		-			-			(4,441	)
Change in fair value of marketable securities		-			-		-		-			-			-		-		-			-			(3	)		(3	)
Foreign currency translation gain (loss)		-			-		-		-			-			-		-		-			-			(550	)		(550	)
Net income (loss) for the three-month period-ended June 30, 2018		-			-		-		-			-			-		-		-			4,840			-			4,840
Balance, June 30, 2018		64,554,155			14,927,613		9,352,729		-			6			2		1		874,508			(537,293	)		(1,562	)		335,662
Issuance of common stock upon exercise of stock options  or awards of restricted stock units		22,342			-		-		-			-			-		-		(29	)		-			-			(29	)
Stock-based compensation expense		-			-		-		-			-			-		-		1,286			-			-			1,286
Dividends paid		-			-		-		-			-			-		-		(4,444	)		-			-			(4,444	)
Change in fair value of marketable securities		-			-		-		-			-			-		-		-			-			103			103
Foreign currency translation gain (loss)		-			-		-		-			-			-		-		-			-			40			40
Net income (loss) for the three-month period-ended September 30, 2018		-			-		-		-			-			-		-		-			2,215			-			2,215
Balance, September 30, 2018		64,576,497			14,927,613		9,352,729		-			6			2		1		871,321			(535,078	)		(1,419	)		334,833

See Notes to Consolidated Financial Statements

8

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Nine-Month Period
	Ended September 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	(27,072	)	$	5,248
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		12,412			12,052
Impairment charge		31,443			-
Deferred income taxes		6,941			1,942
Non-cash interest		715			828
Amortization of syndication contracts		374			526
Payments on syndication contracts		(419	)		(516	)
Equity in net (income) loss of nonconsolidated affiliate		189			177
Non-cash stock-based compensation		2,454			3,711
(Gain) loss on disposal of property and equipment		158			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		10,703			8,578
(Increase) decrease in prepaid expenses and other assets		(844	)		(7,210	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(13,568	)		(2,839	)
Net cash provided by operating activities		23,486			22,497
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		-			33
Purchases of property and equipment		(21,182	)		(12,277	)
Purchases of intangible assets		-			(3,153	)
Purchase of a businesses, net of cash acquired		-			(3,522	)
Purchases of marketable securities		(1,400	)		(159,403	)
Proceeds from marketable securities		27,881			25,000
Purchases of investments		(300	)		(970	)
Deposits on acquisition		(147	)		-
Net cash provided by (used in) investing activities		4,852			(154,292	)
Cash flows from financing activities:
Proceeds from stock option exercises		-			77
Tax payments related to shares withheld for share-based compensation plans		(773	)		(2,239	)
Payments on long-term debt		(2,250	)		(2,250	)
Dividends paid		(12,767	)		(13,403	)
Repurchase of Class A common stock		(10,357	)		(7,660	)
Payment of contingent consideration		-			(2,015	)
Payments of capitalized debt costs		(225	)		-
Net cash used in financing activities		(26,372	)		(27,490	)
Effect of exchange rates on cash, cash equivalents and restricted cash		8			(11	)
Net increase (decrease) in cash, cash equivalents and restricted cash		1,974			(159,296	)
Cash, cash equivalents and restricted cash:
Beginning		47,465			261,854
Ending	$	49,439		$	102,558
Supplemental disclosures of cash flow information:
Cash payments for:
Interest	$	9,866		$	10,566
Income taxes	$	2,324		$	1,222
Supplemental disclosures of non-cash investing and financing activities:
Capital expenditures financed through accounts payable, accrued expenses and other liabilities	$	1,980		$	950
Contingent consideration included in accounts payable, accrued expenses and other liabilities	$	5,743		$	11,166

See Notes to Consolidated Financial Statements

9

ENTRAVISION COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2019

1. BASIS OF PRESENTATION

Presentation

The consolidated financial statements included herein have been prepared by Entravision Communications Corporation (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2019 or any other future period.

Certain amounts in the Company’s prior year period consolidated financial statements and notes to the financial statements have been reclassified to conform to current period presentation.

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

The Company 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, the Company’s digital segment, whose operations are located primarily in Spain, Mexico, Argentina and other countries in Latin America, reaches a global market. Entravision’s operations encompass integrated marketing and media solutions, comprised of television, radio and digital properties and data analytics services. The Company’s management has determined that the Company operates in three reportable segments as of September 30, 2019, based upon the type of advertising medium, which segments are television, radio and digital. As of September 30, 2019, the Company owns and/or operates 55 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. Radio operations consist of 49 operational radio stations, 38 FM and 11 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 syndicated radio programming to more than 100 markets across the United States. The Company operates a proprietary technology and data platform that delivers digital advertising in various advertising formats that allows advertisers to reach audiences across a wide range of Internet-connected devices on its owned and operated digital media sites; the digital media sites of its publisher partners; and on other digital media sites it can access through third-party platforms and exchanges.  

Restricted Cash

As of September 30, 2019 and December 31, 2018, 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 stations are Univision- or UniMás-affiliated television stations. The Company’s network affiliation agreements with Univision provide certain of its 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.  

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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 Company’s Univision- and UniMás-affiliate television stations, and it pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on the Company’s Univision- and UniMás-affiliate television stations. During the three-month periods ended September 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the nine-month periods ended September 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $6.0 million and $6.4 million, respectively.

The Company also generates revenue under two marketing and sales agreements with Univision, which gives the Company 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 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, 2019, the amount due to the Company from Univision was $4.5 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During the three-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $8.8 and $8.4 million, respectively, of which $7.0 million and $6.5 million, respectively, relate to the Univision proxy agreement. During the nine-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $26.6 million and $26.4 million, respectively, of which $20.7 million and $21.5 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 Class U common stock held by Univision has limited voting rights and does not include the right to elect directors. 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, the Company will not, without the consent of Univision, merge, consolidate or enter into another business combination, dissolve or liquidate the Company or dispose of any interest in any Federal Communications Commission, or FCC, license for any of its Univision-affiliated television stations, among other things. Each share of Class U common stock is automatically convertible into one share of Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision.

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 stock options and restricted stock units was $0.8 million and $1.3 million for the three-month periods ended September 30, 2019 and 2018, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $2.5 million and $3.7 million for the nine-month periods ended September 30, 2019 and 2018, 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.

As of September 30, 2019, 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.

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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, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

As of September 30, 2019, there was approximately $2.3 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 1.2 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):

	Three-Month Period					Nine-Month Period
	Ended September 30,					Ended September 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06
Diluted earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Dilutive securities:
Stock options and restricted stock units		-			1,270,083		-			1,202,913
Diluted shares outstanding		84,765,694			90,122,425		85,404,250			90,574,663
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06

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.

For the three- and nine-month periods ended September 30, 2019, 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 1,242,354 and 1,081,875 equivalent shares of dilutive securities for the three- and nine-month periods ended September 30, 2019, respectively.

For the three-month period ended September 30, 2018 there were no dilutive securities excluded from the computation of diluted income per share. For the nine-month period ended September 30, 2018, a total 92,979 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.

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Goodwill and Intangible Assets 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 of the last annual testing date, October 1, 2018, and as noted in the Annual Report on Form 10-K for the year ended December 31, 2018, the Company determined there was no impairment to goodwill and indefinite life intangibles for any of its reporting units.

Due to lower than anticipated performance of the Company’s digital reporting unit in the second quarter of 2019, changes in key personnel, and updated internal forecasts of future performance of the digital reporting unit, the Company determined that triggering events had occurred during the second quarter of 2019 that required an interim impairment assessment for its digital reporting unit. Additionally, due to further deterioration in performance and further updated internal forecasts of future performance of the digital reporting unit in the third quarter of 2019, the Company determined that triggering events had also occurred during the third quarter of 2019 that required an additional interim impairment assessment for its digital reporting unit in the amount set forth below.

The Company conducted a review of the fair value of the digital reporting unit in each of the second and third quarters of 2019. The estimated fair value of the digital goodwill was determined by using a combination of a market approach and an income approach. The market approach estimates fair value by applying sales, earnings and cash flow multiples to the reporting unit’s operating performance. The multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics to the Company’s digital reporting unit. The market approach requires the Company to make a series of assumptions, such as selecting comparable companies and comparable transactions and transaction premiums.

The income approach estimates fair value based on the estimated future cash flows of the digital reporting unit, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk of the reporting unit. The income approach also requires the Company to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. The Company estimated the discount rate on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the digital media industry. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company’s digital reporting unit. The Company also estimated the terminal value multiple based on comparable publicly-traded companies in the digital media industry. The Company estimated its revenue projections and profit margin projections based on internal forecasts about future performance.

Based on the assumptions and estimates described above, the Company concluded that the digital reporting unit carrying value exceeded its fair value, resulting in a goodwill impairment charge of $5.3 million and $27.7 million for the three- and nine-month periods ended September 30, 2019, respectively.

The carrying amount of goodwill for each of the Company’s operating segments for the nine-months ended September 30, 2019 is as follows (in thousands):

	December 31, 2018		Currency			Impairment			September 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(27,714	)		5,962
Consolidated	$	74,292	$	(67	)	$	(27,714	)	$	46,511

During the third quarter, as a result of changes in regulations in Mexico, the Company was required to prepay the license fees for its Mexico broadcast licenses for a period of 20 years. The Company elected not to make the required prepayment for station XHRIO-TV serving the Matamoros/Harlingen-Weslaco-Brownsville-McAllen market before the deadline to make such prepayment.  As a result, the Company currently expects to stop broadcasting on this station at the end of the current license term, which expires on December 31, 2021.  As such, the Company determined that triggering events had occurred during the third quarter of 2019 that required an interim impairment assessment for this broadcast license.

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The Company conducted a review of this television indefinite life intangible asset by using an income approach. The income approach estimates fair value based on the estimated future cash flows of the station that a hypothetical buyer would expect to generate, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk. The income approach requires the Company to make a series of assumptions, such as discount rates, revenue projections, and profit margin projections. The Company estimates the discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the television industry. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company. The Company estimated the revenue projections and profit margin projections based on industry information for an average station within the market. The information includes such things as estimated market share, estimated capital start-up costs, population, household income, retail sales and other expenditures that would influence advertising expenditures.

Based on the assumptions and estimates described above, the Company concluded that the license carrying value exceeded its fair value, resulting in an impairment charge of $3.5 million for the three- and nine-month periods ended September 30, 2019.

The carrying amount of intangible assets not subject to amortization for each of the Company’s operating segments for the nine-months ended September 30, 2019 is as follows (in thousands):

	December 31, 2018		Impairment			September 30, 2019
Television	$	159,019	$	(3,500	)	$	155,519
Radio		95,579		-			95,579
Digital	-			-		-
Consolidated	$	254,598	$	(3,500	)	$	251,098

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.

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

During the three-month period ended September 30, 2019, the Company repurchased 0.5 million shares of Class A common stock at an average price of $2.84, for an aggregate purchase price of approximately $1.3 million. As of September 30, 2019, the Company has repurchased a total of approximately 7.5 million shares of Class A common stock, for an aggregate purchase price of approximately $29.5 million, or an average price per share of $3.91, since the beginning of the share repurchase program. As of September 30, 2019, all such repurchased shares were retired.

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 (“2013 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.

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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 Eurodollar 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;

15

• 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 the Credit Parties 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. Pursuant to this amendment, the lenders:

i. waived any events of default that may have arisen under the 2017 Credit Agreement in connection with the Company’s failure to timely deliver audited financial statements for fiscal year 2018, and

ii. amended the 2017 Credit Agreement, giving the Company until May 31, 2019 to deliver the 2018 audited financial statements.

On May 7, 2019, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which Annual Report contained the 2018 audited financial statements. By filing its Annual Report on Form 10-K prior to May 31, 2019, the Company believes that it has complied with the affirmative covenants in the amendment to the 2017 Credit Agreement regarding delivery of the 2018 audited financial statements.

Pursuant to this amendment, the Company agreed to pay to the lenders consenting to this amendment a fee equal to 0.10% of the aggregate principal amount of the outstanding loans held by such lenders under the 2017 Credit Agreement as of May 1, 2019. This fee totaled approximately $0.2 million.

The carrying amount of the Term Loan B Facility as of September 30, 2019 was $241.4 million, net of $2.6 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of September 30, 2019 was $239.1 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.

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

	September 30, 2019
	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	$	34.7	$	-	$	34.7		$	-
Certificates of deposit	$	6.8	$	-	$	6.8		$	-
Corporate bonds	$	100.6	$	-	$		100.6	$	-
Liabilities:
Contingent Consideration	$	5.7	$	-	$		-	$	5.7
	December 31, 2018
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
	Sheet		Level 1		Level 2			Level 3
Assets:
Money market account	$	34.6	$	-	$	34.6		$	-
Certificates of deposit	$	8.2	$	-	$	8.2		$	-
Corporate bonds	$	124.2	$	-	$	124.2		$	-
Liabilities:
Contingent Consideration	$	8.1	$	-	$	-		$	8.1

As of September 30, 2019, 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 all 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 Unaudited Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income.

As of September 30, 2019, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands):

	Certificates of Deposit				Corporate Bonds
	Amortized Cost		Unrealized gains (losses)		Amortized Cost		Unrealized gains (losses)
Due within a year	$	3,766	$	15	$	45,000	$	168
Due after one year through five years		3,036		24		55,096		381
Total	$	6,802	$	39	$	100,096	$	549

The Company periodically reviews its available for sale securities for other-than-temporary impairment. For the three- and nine-month periods ended September 30, 2019, the Company did not consider any of its securities to be other-than-temporarily impaired and, accordingly, did not recognize any impairment losses.

Included in interest income for the three- and nine-month periods ended September 30, 2019 was interest income related to the Company’s available-for-sale securities of $0.8 and $2.4 million, respectively.

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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, 2019 (in millions):

	Foreign Currency Translation			Marketable Securities			Total
Accumulated other comprehensive income (loss) as of December 31, 2018	$	(0.4	)	$	(1.0	)	$	(1.4	)
Other comprehensive income (loss)		-			1.0			1.0
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		-			0.8			0.8
Accumulated other comprehensive income (loss) as of March 31, 2019		(0.4	)		(0.2	)		(0.6	)
Other comprehensive income (loss)		(0.3	)		0.7			0.4
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		(0.3	)		0.5			0.2
Accumulated other comprehensive income (loss) as of June 30, 2019		(0.7	)		0.3			(0.4	)
Other comprehensive income (loss)		(0.1	)		0.2			0.1
Income tax (expense) benefit		-			(0.1	)		(0.1	)
Other comprehensive income (loss), net of tax		(0.1	)		0.1			-
Accumulated other comprehensive income (loss) as of September 30, 2019	$	(0.8	)	$	0.4		$	(0.4	)

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 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 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.

During the second quarter of 2018, the Company relocated the operations of two of its television stations in the Palm Springs, California market and management approved the sale of the vacated building.  The building and related improvements met the criteria for classification as assets held for sale and their carrying value is presented separately in the consolidated balance sheet. During the third quarter of 2019, the Company entered into an agreement to sell the building for $1.0 million. As such, the Company recorded an impairment charge of $0.2 million to reflect the fair market value of the assets held for sale.

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Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of ASU 2018-15 on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement,” (“ASU No. 2018-13”), which modifies the disclosure requirements on fair value measurements, including the consideration of costs and benefits. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is in the process of assessing the impact of ASU 2018-13 on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), whichamends current guidance on other-than-temporary impairments of available-for-sale debt securities. This amended standard requires the use of an allowance to record estimated credit losses on these assets when the fair value is below the amortized cost of the asset. This standard also removes the evaluation of the length of time that a security has been in a loss position to avoid recording a credit loss. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is finalizing its assessment of the impact of ASU 2016-13 on its Consolidated Financial Statements.

Newly Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases transparency and comparability among organizations relating to leases. Lessees are required to recognize a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. The FASB retained a dual model for lease classification, requiring leases to be classified as finance or operating leases to determine recognition in the earnings statement and cash flows; however, substantially all leases are required to be recognized on the balance sheet. ASU 2016-02 also requires quantitative and qualitative disclosures regarding key information about leasing arrangements. ASU 2016-02 is effective using a modified retrospective approach for fiscal years and interim periods beginning after December 15, 2018. This standard allowed entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The standard also provides for certain practical expedients. 

The Company adopted ASU 2016-02 in the first quarter of 2019. As permitted under the transition guidance of the standard, the Company applied the guidance on a prospective basis as of the adoption date.  As a result, prior period amounts were not adjusted and continue to be reported in accordance with accounting guidance under ASC 840.  

The Company elected the package of practical expedients such that the Company did not reassess whether any expired or existing contracts are or contain leases.  In addition, the Company did not reassess prior conclusions reached for lease classification and did not reassess initial direct costs for existing leases.

Based on the Company’s assessment, the adoption of the guidance resulted in a material impact on the Company’s consolidated balance sheet.  However, the impact to the Company’s results of operations and cash flows through September 30, 2019 are not considered material.  As of the adoption date, the Company recognized right-of-use (“ROU”) assets of $45.8 million and lease liabilities of $52.4 million.  The difference between the ROU assets and lease liabilities is attributed to deferred rent and lease incentives which were combined and presented net within the ROU assets.  Refer to Note 4 for additional information.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-based Payment Accounting, which supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees and expands the scope of ASC Topic 718, “Compensation—Stock Compensation” to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The amendments in ASU 2018-07 are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted ASU 2018-07 in the first quarter of 2019, which adoption did not have a material impact on our condensed consolidated financial statements and related disclosures.

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In August 2018, the SEC issued a final rule to amend certain disclosure requirements that were redundant, duplicative, overlapping or superseded by other SEC disclosure requirements, US GAAP or IFRS.2 The amendments generally eliminated or otherwise reduced certain disclosure requirements of various SEC rules and regulations. However, in some cases, the amendments require additional information to be disclosed, including changes in stockholders’ equity in interim periods. The Company adopted this rule in the first quarter of 2019 and included a statement of stockholders’ equity beginning in its Quarterly Report on Form 10-Qfor the period ended March 31, 2019.

3. REVENUES

Revenue Recognition

Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

Broadcast Advertising. Television and radio revenue related to the sale of advertising is recognized at the time of broadcast. Broadcast advertising rates are fixed based on each medium’s ability to attract audiences in demographic groups targeted by advertisers and rates can vary based on the time of day and ratings of the programming airing in that day part.  

Digital Advertising. Revenue from digital advertising primarily consists of two types:

• Display advertisements on websites and mobile applications that are sold based on a cost-per-thousand impressions delivered. These impressions are delivered through the Company’s websites and through third party publishers either through direct relationships with the publishers or through digital advertising exchanges.

• Performance driven advertising whereby the customer engages the Company to drive consumers to perform an action such as the download of a mobile application, the installation of an application, or the first use of an application (typically referred to cost per action or cost per installation).

Broadcast and digital advertising revenue is recognized over time in a series as a single performance obligation as the advertisement, impression or performance advertising is delivered per the insertion order. The Company applies the practical expedient to recognize revenue for each distinct advertising service delivered at the amount the Company has the right to invoice, which corresponds directly to the value a customer has received relative to the Company’s performance. Contracts with customers are short term in nature and billing occurs on a monthly basis with payment due in 30 days. Value added taxes collected concurrent with advertising revenue producing activities are excluded from revenue.  Cash payments received prior to services rendered result in deferred revenue, which is then recognized as revenue when the advertising time or space is actually provided.

Retransmission Consent.  The Company generates revenue from retransmission consent agreements that are entered into with multichannel video programming distributors, or MVPDs. The Company grants the MVPDs access to its television station signals so that they may rebroadcast the signals and charge their subscribers for this programming. Payments are received on a monthly basis based on the number of monthly subscribers.

Retransmission consent revenues are considered licenses of functional intellectual property and are recognized over time utilizing the sale-based or usage-based royalty exception. The Company’s performance obligation is to provide the licensee access to our intellectual property. MVPD subscribers receive and consume the content monthly as the television signal is delivered.

Spectrum Usage Rights. The Company generates revenue from agreements associated with its television stations’ spectrum usage rights from a variety of sources, including but not limited to agreements with third parties to utilize excess spectrum for the broadcast of their multicast networks; charging fees to accommodate the operations of third parties, including moving channel positions or accepting interference with broadcasting operations; and modifying and/or relinquishing spectrum usage rights while continuing to broadcast through channel sharing or other arrangements. 

Revenue generated by spectrum usage rights agreements are recognized over the period of the lease or when the Company has relinquished all or a portion of its spectrum usage rights for a station or has relinquished its rights to operate a station on the existing channel free from interference.

Other Revenue. The Company generates other revenues that are related to its broadcast operations which primarily consist of representation fees earned by the Company’s radio national representation firm, talent fees for the Company’s on-air personalities, ticket and concession sales for radio events, rent from tenants of the Company’s owned facilities, barter revenue and revenue generated under joint sales agreements.  

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In the case of representation fees, the Company does not control the distinct service, the commercial advertisement, prior to delivery and therefore recognizes revenue on a net basis.  Similarly for joint service agreements, the Company does not own the station providing the airtime and therefore recognizes revenue on a net basis.  In the case of talent fees, the on-air personality is an employee of the Company and therefore the Company controls the service provided and recognizes revenue gross with an expense for fees paid to the employee.

Practical Expedients and Exemptions

The Company does not disclose the value of unsatisfied performance obligations when (i) contracts have an original expected length of one year or less, which applies to effectively all advertising contracts, and (ii) variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property, which applies to retransmission consent revenue.  

The Company applies the practical expedient to expense contract acquisition costs, such as sales commissions generated either by internal direct sales employees or through third party advertising agency intermediaries, when incurred because the amortization period is one year or less. These costs are recorded within direct operating expenses.

Disaggregated Revenue

The following table presents our revenues disaggregated by major source for the three- and nine-month periods ended (in thousands):

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Broadcast advertising	$	37,345	$	40,183	$	109,290	$	119,425
Digital advertising		17,612		22,431		48,888		61,233
Spectrum usage rights		2,669		1,178		11,705		1,809
Retransmission consent		8,795		8,432		26,641		26,428
Other		2,395		2,351		6,213		6,847
Total revenue	$	68,816	$	74,575	$	202,737	$	215,742

Contracts are entered into directly with customers or through an advertising agency that represents the customer.  Sales of advertising to customers or agencies within a station’s designated market area (“DMA”) are referred to as local revenue, whereas sales from outside the station’s DMA are referred to as national revenue. The following table further disaggregates the Company’s broadcast advertising revenue by sales channel for the three- and nine-month periods ended (in thousands):

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Local direct	$	6,781	$	6,750	$	19,292	$	20,725
Local agency		14,655		15,267		43,321		45,381
National agency		15,909		18,166		46,677		53,319
Total  revenue	$	37,345	$	40,183	$	109,290	$	119,425

Deferred Revenues

The Company records deferred revenues when cash payments are received or due in advance of its performance, including amounts which are refundable. The decrease in the deferred revenue balance for the nine-month period ended September 30, 2019 is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenues recognized that were included in the deferred revenue balance as of December 31, 2018.

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The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is not significant, typically 30 days. For certain customer types, the Company requires payment before the services are delivered to the customer.

(in thousands)	December 31, 2018		Increase	Decrease *		September 30, 2019
Deferred revenue	$	2,759	1,177	(2,759	)	$	1,177

* The amount disclosed in the decrease column reflects revenue that has been recorded in the nine-month period ended September 30, 2019.

4. LEASES

The Company’s leases are considered operating leases and primarily consist of real estate such as office space, broadcasting towers, land and land easements. ROU asset and lease liability is recognized as of lease commencement date based on the present value of the future minimum lease payments over the lease term.  As the implicit rate for operating leases is not readily determinable, the future minimum lease payments were discounted using an incremental borrowing rate.  Due to the Company’s having a centralized treasury function, the Company applied a portfolio approach to discount its domestic lease obligations using its secured publicly traded U.S. dollar denominated debt instruments interpolating the duration of the debt to the remaining lease term.  The incremental borrowing rate for international leases is the interest rate that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The Company’s operating leases are reflected within the consolidated balance sheet as right-of-use assets with the related liability presented as lease liability, current and lease liability, net of current portion. Lease expense is recognized on a straight-line basis over the lease term.

Generally, lease terms include options to renew or extend the lease.  Unless the renewal option is considered reasonably certain, the exercise of any such options have been excluded from the calculation of lease liabilities.  In addition, as permitted within the guidance, ROU assets and lease liabilities are not recorded for leases within an initial term of one year or less.  The Company’s existing leases have remaining terms of less than one year up to 32 years.  Certain of the Company’s lease agreements include rental payments based on changes in the consumer price index (“CPI”). Lease liabilities are not remeasured as a result of changes in the CPI; instead, changes in the CPI are treated as variable lease payments and recognized in the period in which the related obligation was incurred. Lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Certain real estate leases include additional costs such as common area maintenance (non-lease component), as well as property insurance and property taxes. These costs were excluded from future minimum lease payments as they are variable payments. As such, these costs were not part of the calculation of ROU assets and lease liabilities associated with operating leases upon transition.

The following table summarizes the expected future payments related to lease liabilities as of September 30, 2019:

(in thousands)
Remainder of 2019	$	2,875
2020		11,613
2021		9,214
2022		7,785
2023		6,175
2024 and thereafter		36,646
Total minimum payments	$	74,308
Less amounts representing interest		(22,793	)
Present value of minimum lease payments	$	51,515

The weighted average remaining lease term and the weighted average discount rate used to calculate the Company’s lease liabilities as of September 30, 2019 were 11.4 years and 6.3%, respectively.

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The following table summarizes lease payments and supplemental non-cash disclosures for the nine-month period ended September 30, 2019:

(in thousands)	Nine-Month Period Ended September 30, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	2,889
Non-cash additions to operating lease assets	$	-

The tables below summarize our future minimum rental commitments for operating leases as of December 31, 2018:

(in thousands)	Amount
2019	$	10,432
2020		10,677
2021		8,507
2022		7,560
2023		6,137
2024 and thereafter		38,515
	$	81,828

The following table summarizes the components of lease expense for the three- and nine-months ended September 30, 2019:

	Three-Month Period		Nine-Month Period
	Ended September 30,		Ended September 30,
(in thousands)	2019		2019
Operating lease cost	$	2,613	$	7,570
Variable lease cost		369		1,159
Short-term lease cost	252		541
Total lease cost	$	3,234	$	9,270

For the three-month periods ended September 30, 2019, lease cost of $1.6 million, $1.4 million and $0.2 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively. For the nine-month periods ended September 30, 2019 lease cost of $4.3 million, $4.4 million and $0.6 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively.

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5. SEGMENT INFORMATION

The Company’s management has determined that the Company operates in three reportable segments as of September 30, 2019, based upon the type of advertising medium, which segments are television, radio and digital. The Company’s segments results reflect information presented on the same basis that is used for internal management reporting and it is also how the chief operating decision maker evaluates the business.

Television

The Company owns and/or operates 55 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C.

Radio

The Company owns and operates 49 radio stations (38 FM and 11 AM) located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas.

The Company owns and operates a national sales representation division, Entravision Solutions, through which the Company sells advertisements and syndicates radio programming to more than 100 markets across the United States.

Digital

The Company operates a proprietary technology and data platform that delivers digital advertising in various advertising formats and which allows advertisers to reach audiences across a wide range of Internet-connected devices on the Company’s owned and operated digital media sites; the digital media sites of its publisher partners; and on other digital media sites it can access through third-party platforms and exchanges.

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Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value contingent consideration, impairment charge, foreign currency (gain) loss and other operating (gain) loss. The Company generated18% and21% of its revenue outside the United States during the three-month periods ended September 30, 2019 and September 30, 2018, respectively. The Company generated 17% and 20% of its revenue outside the United States during the nine-month periods ended September 30, 2019 and September 30, 2018, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Nine-Month Period
	Ended September 30,						%			Ended September 30,						%
		2019			2018		Change				2019			2018		Change
Net revenue
Television	$	36,421		$	36,361			0	%	$	112,745		$	107,383			5	%
Radio		14,783			15,783			(6	)%		41,104			47,126			(13	)%
Digital		17,612			22,431			(21	)%		48,888			61,233			(20	)%
Consolidated		68,816			74,575			(8	)%		202,737			215,742			(6	)%
Cost of revenue - digital media		9,942			13,240			(25	)%		26,443			35,249			(25	)%
Direct operating expenses
Television		15,661			15,315			2	%		45,745			45,903			(0	)%
Radio		9,932			10,402			(5	)%		28,968			32,011			(10	)%
Digital		5,214			5,977			(13	)%		14,679			15,930			(8	)%
Consolidated		30,807			31,694			(3	)%		89,392			93,844			(5	)%
Selling, general and administrative expenses
Television		5,497			5,147			7	%		16,945			16,670			2	%
Radio		4,209			4,274			(2	)%		13,380			13,382			(0	)%
Digital		2,751			2,977			(8	)%		9,491			8,313			14	%
Consolidated		12,457			12,398			0	%		39,816			38,365			4	%
Depreciation and amortization
Television		2,613			2,227			17	%		7,435			6,708			11	%
Radio		465			615			(24	)%		1,368			1,855			(26	)%
Digital		1,112			1,252			(11	)%		3,609			3,489			3	%
Consolidated		4,190			4,094			2	%		12,412			12,052			3	%
Segment operating profit (loss)
Television		12,650			13,672			(7	)%		42,620			38,102			12	%
Radio		177			492			(64	)%		(2,612	)		(122	)		2041	%
Digital		(1,407	)		(1,015	)		39	%		(5,334	)		(1,748	)		205	%
Consolidated		11,420			13,149			(13	)%		34,674			36,232			(4	)%
Corporate expenses		6,785			6,913			(2	)%		20,180			19,154			5	%
Change in fair value contingent consideration		-			(114	)		(100	)%		(2,376	)		1,073		*
Impairment charge		9,075			-		*				31,443			-		*
Foreign currency (gain) loss		927			335			177	%		977			531			84	%
Other operating (gain) loss		(1,572	)		(327	)		381	%		(5,165	)		(622	)		730	%
Operating income (loss)		(3,795	)		6,342		*				(10,385	)		16,096		*
Interest expense	$	(3,537	)	$	(3,995	)		(11	)%	$	(10,581	)	$	(11,394	)		(7	)%
Interest income		825			933			(12	)%		2,601			2,885			(10	)%
Dividend income		241			457			(47	)%		747			1,002			(25	)%
Income (loss) before income taxes		(6,266	)		3,737		*				(17,618	)		8,589		*
Capital expenditures
Television	$	7,460		$	6,819					$	21,462		$	10,841
Radio		86			71						667			233
Digital		64			226						304			473
Consolidated	$	7,610		$	7,116					$	22,433		$	11,547
	September 30,			December 31,
Total assets		2019			2018
Television		499,335			487,929
Radio		138,710			121,020
Digital		49,797			81,460
Consolidated	$	687,842		$	690,409

* Percentage not meaningful.

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6.COMMITMENTS AND CONTINGENCIES

The Company is subject to various outstanding claims and other legal proceedings that may arise in the ordinary course of business. In the opinion of management, any liability of the Company that may arise out of or with respect to these matters will not materially adversely affect the financial position, results of operations or cash flows of the Company.  

7. SUBSEQUENT EVENT

Acquisition of Television Station KMBH-TV

On July 31, 2019, the Company entered into an agreement with MBTV Texas Valley LLC to acquire television station KMBH-TV, serving the McAllen, Texas area, for $2.9 million.  The transaction closed on November 7, 2019.  

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a leading global media company that, through our 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, Argentina and other countries in Latin America, reaches a global market. Our operations encompass integrated marketing and media solutions, comprised of television, radio and digital properties and data analytics services. For financial reporting purposes, we report in three segments based upon the type of advertising medium: television, radio and digital. Our net revenue for the three-month period ended September 30, 2019 was $68.8 million. Of that amount, revenue attributed to our television segment accounted for approximately 53%, revenue attributed to our digital segment accounted for approximately 26% and revenue attributed to our radio segment accounted for approximately 21%.

As of the date of filing this report, own and/or operate 55 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. We own and operate 49 radio stations in 16 U.S. markets. Our radio stations consist of 38 FM and 11 AM stations located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas. We also operate Entravision Solutions as our national sales representation division, through which we sell advertisements and syndicate radio programming to more than 100 markets stations across the United States. We also provide digital advertising solutions that allow advertisers to reach primarily online Hispanic audiences worldwide. We operate a proprietary technology and data platform that delivers digital advertising in various advertising formats and which allows advertisers to reach audiences across a wide range of Internet-connected devices on our owned and operated digital media sites; the digital media sites of our publisher partners; and on other digital media sites we access through third-party platforms and exchanges.

We generate revenue primarily from sales of national and local advertising time on television stations, radio stations and digital media platforms, and from retransmission consent agreements that are entered into with MVPDs. Advertising rates are, in large part, based on each medium’s ability to attract audiences in demographic groups targeted by advertisers. We recognize advertising revenue when commercials are broadcast and when display or other digital advertisements record impressions on the websites of our third party publishers or as the advertiser’s previously agreed-upon performance criteria are satisfied. We do not obtain long-term commitments from our advertisers and, consequently, they may cancel, reduce or postpone orders without penalties. We pay commissions to agencies for local, regional and national advertising. For contracts directly with agencies, we record net revenue from these agencies. Seasonal revenue fluctuations are common in our industry and are due primarily to variations in advertising expenditures by both local and national advertisers. Our first fiscal quarter generally produces the lowest net revenue for the year. In addition, advertising revenue is generally higher during presidential election years (2020, 2024, etc.), resulting from significant political advertising and, to a lesser degree, Congressional mid-term election years (2022, 2026, etc.), resulting from increased political advertising, compared to other years.

We refer to the revenue generated by agreements with MVPDs as retransmission consent revenue, which represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. We recognize retransmission consent revenue earned as the television signal is delivered to the MVPD.

Our FCC licenses grant us spectrum usage rights within each of the television markets in which we operate. We regard these rights as a valuable asset. With the proliferation of mobile devices and advances in technology that have freed up excess spectrum capacity, the monetization of our spectrum usage rights has become a significant part of our business in recent years.  We generate revenue from agreements associated with these television stations’ spectrum usage rights from a variety of sources, including but not limited to agreements with third parties to utilize excess spectrum for the broadcast of their multicast networks; charging fees to accommodate the operations of third parties, including moving channel positions or accepting interference with broadcasting operations; and modifying and/or relinquishing spectrum usage rights while continuing to broadcast through channel sharing or other arrangements.  Revenue generated by such agreements is recognized over the period of the lease or when we have relinquished all or a portion of our spectrum usage rights for a station or have relinquished our rights to operate a station on the existing channel free from interference.  In addition, we will consider strategic acquisitions of television stations to further this strategy from time to time, as well as additional monetization opportunities expected to arise as the television broadcast industry anticipates advances in ATSC 3.0.

Our primary expenses are employee compensation, including commissions paid to our sales staff and amounts paid to our national representative firms, as well as expenses for general and administrative functions, promotion and selling, engineering, marketing, and local programming. Our local programming costs for television consist primarily of costs related to producing a local newscast in most of our markets. Cost of revenue related to our television segment consists primarily of the carrying value of spectrum usage rights that were surrendered in the FCC auction for broadcast spectrum. In addition, cost of revenue related to our digital segment consists primarily of the costs of online media acquired from third-party publishers and third party server costs. Direct operating expenses include salaries and commissions of sales staff, amounts paid to national representation firms, production and programming expenses, fees for ratings services, and engineering costs. Corporate expenses consist primarily of salaries related to corporate officers and back office functions, third party legal and accounting services, and fees incurred as a result of being a publicly traded and reporting company.

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Highlights

During the third quarter of 2019, our consolidated revenue decreased to $68.8 million from $74.6 million in the prior year period, primarily due to a decrease in advertising revenue. The decrease in advertising revenue was partially offset by an increase in revenue from spectrum usage rights and retransmission consent revenue in our television segment. Our audience shares remained strong in the nation’s most densely populated Hispanic markets.

Net revenue in our television segment remained constant at $36.4 million for the three-month periods ended September 30, 2019 and 2018. We had increases in revenue from spectrum usage rights and retransmission consent revenue, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences. Additionally, there is a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. We also experienced a decrease in political advertising revenue, which has not been material in 2019.

Net revenue in our radio segment decreased to $14.8 million for the three-month period ended September 30, 2019 from $15.8 million for the three-month period ended September 30, 2018. This decrease of approximately $1.0 million, or 6%, in net revenue was primarily due to a decrease in national advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences as well as the absence of revenue from the 2018 FIFA World Cup in 2019 compared to 2018. Additionally, there is a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media. This trend has had a more significant impact on our radio revenue as compared to television revenue, and we expect that this trend will continue.

Net revenue in our digital segment decreased to $17.6 million for the three-month period ended September 30, 2019 from $22.4 million for the three-month period ended September 30, 2018. This decrease of approximately $4.8 million, or 21%, in net revenue was a result of declines in both international and domestic revenue.  We have previously noted a trend in our domestic digital operations whereby revenue is shifting more to automated self-service platforms, referred to in our industry as programmatic revenue, and this trend is now growing in markets outside the United States. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us, which is putting pressure on margins.  In response to this, we have started to offer programmatic solutions to advertisers and strategically shift the focus of our other digital offerings to focus on generating revenue with lower associated cost of revenue.  This has contributed to a decline in the volume of revenue but led to improvement in the gross margin percentage.  Notwithstanding the foregoing, the digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes including the need to further adjust our business strategies accordingly. No assurances can be given that such adjustments will be successful.

Due to lower than anticipated performance of our digital reporting unit, and updated internal forecasts of future performance of our digital reporting unit, we determined that triggering events had occurred during the third quarter of 2019 that required interim impairment assessment for our digital reporting unit. As a result of this assessment, we incurred an impairment charge related to goodwill in our digital reporting unit in the amount of $5.3 million for the three-month period ended September 30, 2019. This impairment charge is in addition to an impairment charge we incurred during the second quarter of 2019.

During the third quarter, as a result of changes in regulations in Mexico, we were required to prepay the license fees for our Mexico broadcast licenses for a period of 20 years.  We elected not to make the required prepayment for station XHRIO-TV serving the Matamoros/Harlingen-Weslaco-Brownsville-McAllen market before the deadline to make such prepayment.  As a result, we currently expect to stop broadcasting on this station at the end of the current license term, which expires on December 31, 2021.  As such, we determined that triggering events had occurred during the third quarter of 2019 that required an interim impairment assessment for this broadcast license. As a result of this assessment, we incurred an impairment charge related to indefinite life intangible assets in our television reporting unit in the amount of $3.5 million for the three-month period ended September 30, 2019.

Relationship with Univision

Substantially all of our television stations are Univision- or UniMás-affiliated television stations. Our network affiliation agreement with Univision provides certain of our owned stations the exclusive right to broadcast Univision’s primary network and UniMás network programming in their respective markets.  Under the network affiliation agreement, we retain 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.

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Under the network affiliation agreement, Univision acts as our exclusive third-party sales representative for the sale of certain national advertising on our Univision- and UniMás-affiliate television stations, and we pay certain sales representation fees to Univision relating to sales of all advertising for broadcast on our Univision- and UniMás-affiliate television stations. During the three-month periods ended September 30, 2019 and 2018, the amount we paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the nine-month periods ended September 30, 2019 and 2018, the amount we paid Univision in this capacity was $6.0million and $6.4 million, respectively.

We also generate revenue under two marketing and sales agreements with Univision, which give us 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 current proxy agreement we have entered into with Univision, we grant Univision the right to negotiate the terms of retransmission consent agreements for our Univision- and UniMás-affiliated television station signals. Among other things, the proxy agreement provides terms relating to compensation to be paid to us by Univision with respect to retransmission consent agreements entered into with MVPDs. During the three-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $8.8 million and $8.4 million, respectively, of which $7.0 million and $6.5 million, respectively, relate to the Univision proxy agreement. During the nine-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $26.6 million and $26.4 million, respectively, of which $20.7 million and $21.5 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 our common stock on a fully-converted basis. Our Class U common stock 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 Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision. In addition, as the holder of all of our issued and outstanding Class U common stock, so long as Univision holds a certain number of shares of Class U common stock, we may not, without the consent of Univision, merge, consolidate or enter into a business combination, dissolve or liquidate our company or dispose of any interest in any FCC license with respect to television stations which are affiliates of Univision, among other things.

Critical Accounting Policies

For a description of our critical accounting policies, please refer to “Application of Critical Accounting Policies and Accounting Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on May 7, 2019.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are in the process of assessing the impact of ASU 2018-15 on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement,” (“ASU No. 2018-13”), which modifies the disclosure requirements on fair value measurements, including the consideration of costs and benefits. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. We are in the process of assessing the impact of ASU 2018-13 on our Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), whichamends current guidance on other-than-temporary impairments of available-for-sale debt securities. This amended standard requires the use of an allowance to record estimated credit losses on these assets when the fair value is below the amortized cost of the asset. This standard also removes the evaluation of the length of time that a security has been in a loss position to avoid recording a credit loss. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are finalizing the assessment of the impact of ASU 2016-13 on our Consolidated Financial Statements.

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Three- and Nine-Month Periods Ended September 30, 2019 and 2018

The following table sets forth selected data from our operating results for the three- and nine-month periods ended September 30, 2019 and 2018 (in thousands):

	Three-Month Period									Nine-Month Period
	Ended September 30,						%			Ended September 30,						%
	2019			2018			Change			2019			2018			Change
Statements of Operations Data:
Net Revenue	$	68,816		$	74,575			(8	)%	$	202,737		$	215,742			(6	)%
Cost of revenue - digital media		9,942			13,240			(25	)%		26,443			35,249			(25	)%
Direct operating expenses		30,807			31,694			(3	)%		89,392			93,844			(5	)%
Selling, general and administrative expenses		12,457			12,398			0	%		39,816			38,365			4	%
Corporate expenses		6,785			6,913			(2	)%		20,180			19,154			5	%
Depreciation and amortization		4,190			4,094			2	%		12,412			12,052			3	%
Change in fair value contingent consideration		-			(114	)		(100	)%		(2,376	)		1,073		*
Impairment charge		9,075			-		*				31,443			-		*
Foreign currency (gain) loss		927			335			177	%		977			531			84	%
Other operating (gain) loss		(1,572	)		(327	)		381	%		(5,165	)		(622	)		730	%
		72,611			68,233			6	%		213,122			199,646			7	%
Operating income (loss)		(3,795	)		6,342		*				(10,385	)		16,096		*
Interest expense		(3,537	)		(3,995	)		(11	)%		(10,581	)		(11,394	)		(7	)%
Interest income		825			933			(12	)%		2,601			2,885			(10	)%
Dividend income		241			457			(47	)%		747			1,002			(25	)%
Income before income (loss) taxes		(6,266	)		3,737		*				(17,618	)		8,589		*
Income tax benefit (expense)		(5,920	)		(1,443	)		310	%		(9,265	)		(3,164	)		193	%
Income (loss) before equity in net income (loss) of
nonconsolidated affiliate		(12,186	)		2,294		*				(26,883	)		5,425		*
Equity in net income (loss) of nonconsolidated affiliate, net of tax		(31	)		(79	)		(61	)%		(189	)		(177	)		7	%
Net income  (loss)	$	(12,217	)	$	2,215		*			$	(27,072	)	$	5,248		*
Other Data:
Capital expenditures		7,610			7,116						22,433			11,547
Consolidated adjusted EBITDA (adjusted for non-cash stock-based compensation) (1)											29,778			33,102
Net cash provided by operating activities											23,486			22,497
Net cash provided by (used in) investing activities											4,852			(154,292	)
Net cash used in financing activities											(26,372	)		(27,490	)

(1) 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), non-recurring cash expenses, 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 our 2017 Credit Agreement 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), non-recurring cash expenses, 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.

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Since consolidated adjusted EBITDA is a measure governing several critical aspects of our 2017 Credit Facility, we believe that it is important to disclose consolidated adjusted EBITDA to our investors.  We may increase the aggregate principal amount outstanding by an additional amount equal to $100.0 million plus the amount that would result in our total net leverage ratio, or the ratio of consolidated total senior debt (net of up to $75.0 million of unrestricted cash) to trailing-twelve-month consolidated adjusted EBITDA, not exceeding 4.0. In addition, beginning December 31, 2018, at the end of every calendar year, in the event our total net leverage ratio is within certain ranges, we must make a debt prepayment equal to a certain percentage of our Excess Cash Flow, which is defined as consolidated adjusted EBITDA, less consolidated interest expense, less debt principal payments, less taxes paid, less other amounts set forth in the definition of Excess Cash Flow in the 2017 Credit Agreement. The total leverage ratio was as follows (in each case as of September 30): 2019, 3.3 to 1; 2018, 5.0 to 1.

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 (loss) and net income (loss).  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), non-recurring cash expenses, 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, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important 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.

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Consolidated adjusted EBITDA is a non-GAAP measure. The most directly comparable GAAP financial measure to consolidated adjusted EBITDA is cash flows from operating activities. A reconciliation of this non-GAAP measure to cash flows from operating activities follows (in thousands):

	Nine-Month Period
	Ended September 30,
		2019			2018
Consolidated adjusted EBITDA	$	29,778		$	33,102
Interest expense		(10,581	)		(11,394	)
Interest income		2,601			2,885
Dividend income		747			1,002
Income tax expense		(9,265	)		(3,164	)
Equity in net loss of nonconsolidated affiliates		(189	)		(177	)
Amortization of syndication contracts		(374	)		(526	)
Payments on syndication contracts		419			516
Non-cash stock-based compensation included in direct operating expenses		(324	)		(448	)
Non-cash stock-based compensation included in corporate expenses		(2,130	)		(3,263	)
Depreciation and amortization		(12,412	)		(12,052	)
Change in fair value contingent consideration		2,376			(1,073	)
Impairment charge		(31,443	)		-
Non-recurring cash severance charge		(1,440	)		(782	)
Other operating gain (loss)		5,165			622
Net income (loss)		(27,072	)		5,248
Depreciation and amortization		12,412			12,052
Impairment charge		31,443			-
Deferred income taxes		6,941			1,942
Non-cash interest		715			828
Amortization of syndication contracts		374			526
Payments on syndication contracts		(419	)		(516	)
Equity in net (income) loss of nonconsolidated affiliate		189			177
Non-cash stock-based compensation		2,454			3,711
(Gain) loss on disposal of property and equipment		158			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		10,703			8,578
(Increase) decrease in prepaid expenses and other assets		(844	)		(7,210	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(13,568	)		(2,839	)
Cash flows from operating activities	$	23,486		$	22,497

Consolidated Operations

Net Revenue. Net revenue decreased to $68.8 million for the three-month period ended September 30, 2019 from $74.6 million for the three-month period ended September 30, 2018, a decrease of $5.8 million. Of the overall decrease, approximately $4.8 million was attributable to our digital segment and was primarily due to declines in both international and domestic revenue.  This decline in digital revenue is being driven by a trend whereby revenue is shifting more to programmatic revenue. Additionally, approximately $1.0 million of the overall decrease was attributable to our radio segment and was primarily due to a decrease in national advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences, as well as the absence of revenue from the 2018 FIFA World Cup revenue in 2019 compared to 2018 and a decrease in political advertising revenue, which has not been material in 2019. Revenue in our television segment remained constant with increases in revenue from spectrum usage rights and retransmission consent revenue, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences. Additionally, there is a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. The increases in revenue from spectrum usage rights and retransmission consent revenue were also partially offset by a decrease in political advertising revenue, which has not been material in 2019.

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Net revenue decreased to $202.7million for the nine-month period ended September 30, 2019 from $215.7 million for the nine-month period ended September 30, 2018, a decrease of $13.0million. Of the overall decrease, approximately $12.3million was attributable to our digital segment and was primarily due to declines in both international and domestic revenue.  This decline in digital revenue isbeing driven by a trend whereby revenue is shifting more to programmatic revenue. Additionally, approximately $6.0million of the overall decrease was attributable to our radio segment and was primarily due to decreases in local and national advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences as well as the absence of revenue from the 2018 FIFA World Cup revenue in 2019 compared to 2018 and a decrease in political advertising revenue, which has not been material in 2019. The overall decrease in revenue was partially offset by an increase in our television segment of approximately $5.3million and was primarily due to increases in revenue from spectrum usage rights and retransmission consent revenue, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences and a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. The increase in revenue in our television segment was also partially offset by a decrease in political advertising revenue, which has not been material in 2019.

We currently anticipate that for the full year 2019, net revenue will increase from spectrum usage rights and retransmission consent revenue compared to 2018. We anticipate political revenue will decrease for the full year 2019 compared to 2018.

Cost of revenue-Digital. Cost of revenue in our digital segment decreased to $9.9 million for the three-month period ended September 30, 2019 from $13.2 million for the three-month period ended September 30, 2018, a decrease of $3.3 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment and a strategic shift in our digital business designed to focus on generating revenue with lower associated costs to produce higher margins.

Cost of revenue in our digital segment decreased to $26.4 million for the nine-month period ended September 30, 2019 from $35.2 million for the nine-month period ended September 30, 2018, a decrease of $8.8 million, primarily due to a decrease in expenses associated with the decrease in revenue in our digital segment and a strategic shift in our digital business designed to focus on generating revenue with lower associated costs to produce higher margins.

Direct Operating Expenses. Direct operating expenses decreased to $30.8 million for the three-month period ended September 30, 2019 from $31.7 million for the three-month period ended September 30, 2018, a decrease of $0.9 million. Of the overall decrease, approximately $0.8 million was attributable to our digital segment and was primarily due to a decrease in expenses associated with the decrease in advertising revenue. Additionally approximately $0.5 million of the overall decrease was attributable to our radio segment and was primarily due to a decrease in expenses associated with the decrease in advertising revenue, partially offset by an increase in severance expense. The decrease was partially offset by an increase of approximately $0.4 million in our television segment, primarily due to increase in fees due to networks related to retransmission consent agreements. As a percentage of net revenue, direct operating expenses increased to 45% for the three-month period ended September 30, 2019 from 42% for the three-month period ended September 30, 2018.

Direct operating expenses decreased to $89.4 million for the nine-month period ended September 30, 2019 from $93.8 million for the nine-month period ended September 30, 2018, a decrease of $4.4 million. Of the overall decrease, approximately $3.0 million was attributable to our radio segment and was primarily due to a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expense. Additionally, approximately $1.2 million of the overall decrease was attributable to our digital segment primarily due to a decrease in expenses associated with the decrease in revenue. In addition, approximately $0.2 million of the overall decrease was attributable to our television segment and was primarily due to a decrease in expenses associated with the decrease in local advertising revenue, partially offset by an increase in fees due to networks related to retransmission consent agreements. As a percentage of net revenue, direct operating expenses increased to 44% for the nine-month period ended September 30, 2019 from 43% for the nine-month period ended September 30, 2018.

We currently anticipate that for the full year 2019, direct operating expenses will decrease as a result of a previously announced reduction in personnel and other discretionary expense cuts, both of which were implemented beginning in the second quarter of 2018.  

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $12.5 million for the three-month period ended September 30, 2019 from $12.4 million for the three-month period ended September 30, 2018, an increase of $0.1 million. The increase was primarily due to an increase in bad debt expense in our television segment. As a percentage of net revenue, selling, general and administrative expenses increased to 18% for the three-month period ended September 30, 2019 from 17% for the three-month period ended September 30, 2018.

Selling, general and administrative expenses increased to $39.8 million for the nine-month period ended September 30, 2019 from $38.4 million for the nine-month period ended September 30, 2018, an increase of $1.4 million. Of the overall increase, approximately $1.2 million was attributable to our digital segment and was primarily due an increase in severance expense and an increase in bad debt expense. Additionally approximately $0.2 million of the overall increase was attributable to our television segment and was primarily due to an increase in bad debt expense. As a percentage of net revenue, selling, general and administrative expenses increased to 20% for the nine-month period ended September 30, 2019 from 18% for the nine-month period ended September 30, 2018.

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We currently anticipate that for the full year 2019, selling, general and administrative expenses will increase as a result of severance expense that we incurred primarily in our digital segment in the first half of 2019, and bad debt expenses, partially offset by savings from a previously announcedreduction in personnel and other discretionary expense cuts, both of which were implemented beginning in the second quarter of 2018.  

Corporate Expenses. Corporate expenses decreased to $6.8 million for the three-month period ended September 30, 2019 from $6.9 million for the three-month period ended September 30, 2018, a decrease of $0.1 million. The decrease was primarily due to a decrease in non-cash stock-based compensation. As a percentage of net revenue, corporate expenses increased to 10% for the three-month period ended September 30, 2019 from 9% for the three-month period ended September 30, 2018.

Corporate expenses increased to $20.2 million for the nine-month period ended September 30, 2019 from $19.2 million for the nine-month period ended September 30, 2018, an increase of $1.0 million. The increase was primarily due to an increase in audit fees that we incurred in connection with the audit of our 2018 financial statements, partially offset by a decrease in non-cash stock-based compensation. As a percentage of net revenue, corporate expenses increased to 10% for the nine-month period ended September 30, 2019 from 9% for the nine-month period ended September 30, 2018.

We currently anticipate that for the full year 2019, corporate expenses will increase, primarily as a result of increased audit fees that we incurred in connection with the audit of our 2018 financial statements.

Depreciation and Amortization. Depreciation and amortization increased to $4.2 million for the three-month period ended September 30, 2019 compared to $4.1 million for the three-month period ended September 30, 2018.  The increase was primarily attributable to fixed assets additions in our television segment as part of the broadcast television repack following the FCC auction for broadcast spectrum.

Depreciation and amortization increased to $12.4 million for the nine-month period ended September 30, 2019 compared to $12.1 million for the nine-month period ended September 30, 2018. The increase was primarily attributable to the acquisition of Smadex, S.L. (“Smadex”) in June 2018, and fixed assets additions in our television segment as part of the broadcast television repack following the FCC auction for broadcast spectrum.

Change in fair value of contingent consideration. As a result of the change in fair value of the contingent consideration related to our acquisition of 100% of several entities collectively doing business as Headway (“Headway”), we recognized income of $0.1 million for the three-month period ended September 30, 2018. We have not completed the process, described in the agreements related to the acquisition of Headway, of finalizing the calculation of the contingent consideration, if any, related to the acquisition of Headway with respect to calendar year 2018. As a result, as of the date of this filing we are unable to determine the final amount of such contingent consideration, if any, to be paid with respect to calendar year 2018. The determination of the final amount of such contingent consideration, if any, to be paid with respect to calendar year 2018 may result in adjustment in future periods to the fair value of our liability for contingent consideration.  

As a result of the change in fair value of the contingent consideration related to our acquisition of Headway, we recognized income of $2.4 million for the nine-month period ended September 30, 2019, compared to an expense of $1.1 million for the nine-month period ended September 30, 2018.

Foreign currency (gain) loss. Our historical revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, our operating expenses are generally denominated in the currencies of the countries in which our operations are located, and we have operations in countries other than the United States, primarily those operations related to our Headway business. As a result, we have operating expense, attributable to foreign currency, that is primarily related to the operations related to our Headway business. We had a foreign currency loss of $0.9 million for the three-month period ended September 30, 2019 compared to a foreign currency loss of $0.3 million for the three-month period ended September 30, 2018. Foreign currency gain was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily related to our Headway business.

We had a foreign currency loss of $1.0 million for the nine-month period ended September 30, 2019 compared to a foreign currency loss of $0.5 million for the nine-month period ended September 30, 2018. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the United States, primarily related to our Headway business.

Other operating gain. Other operating gain increased to $1.6 million for the three-month period ended September 30, 2019 from $0.3 million for the three-month period ended September 30, 2018, primarily due to gains in connection with the required relocation of certain television stations to a different channel as part of the broadcast television repack following the FCC auction for broadcast spectrum.

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Other operating gain increased to $5.2million for the nine-month period ended September 30, 2019 from $0.6 million for the nine-month period ended September 30, 2018, primarily due to gains in connection with the required relocation of certain television stations to a different channel as part of the broadcast television repack following the FCC auction for broadcast spectrum.

Impairment. Due to lower than anticipated performance of our digital reporting unit, changes in key personnel, and updated internal forecasts of future performance of our digital reporting unit, we determined that triggering events had occurred during the second quarter of 2019 that required interim impairment assessment for our digital reporting unit. Additionally, due to further deterioration in performance and further updated internal forecasts of future performance of the digital reporting unit, we determined that triggering events had also occurred during the third quarter of 2019 that required an additional interim impairment assessment for our digital reporting unit. Impairment charges related to goodwill in our digital reporting unit were $5.3 million and $27.7 million for the three- and nine-month periods ended September 30, 2019.

As a result of changes in regulations in Mexico, we were required to prepay the license fees for our Mexico broadcast licenses for a period of 20 years.  We elected not to make the required prepayment for station XHRIO-TV serving the Matamoros/Harlingen-Weslaco-Brownsville-McAllen market before the deadline to make such prepayment.  As a result, we currently expect to stop broadcasting on this station at the end of the current license term, which expires on December 31, 2021.  As such, we determined that triggering events had occurred during the third quarter of 2019 that required an interim impairment assessment for this broadcast license. As a result of this assessment, we incurred an impairment charge related to indefinite life intangible assets in our television reporting unit in the amount of $3.5 million for the three- and nine-month periods ended September 30, 2019.

These write-downs were made pursuant to Accounting Standards Codification (ASC) 350, Intangibles – Goodwill and Other, which requires that goodwill and certain intangible assets be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the assets might be impaired.

We also recorded an impairment charge of $0.2 million to reflect the fair market value of our assets held for sale for the three- and nine-month periods ended September 30, 2019.

Operating Income (Loss). As a result of the above factors, operating loss was $3.8 million for the three-month period ended September 30, 2019, compared to operating income of $6.3 million for the three-month period ended September 30, 2018. As a result of the above factors, operating loss was $10.4 million for the nine-month period ended September 30, 2019, compared to operating income of $16.1 million for the nine-month period ended September 30, 2018.

Interest Expense, net. Interest expense, net decreased to $2.7 million for the three-month period ended September 30, 2019 from $3.1 million for the three-month period ended September 30, 2018, a decrease of $0.4 million. This decrease was primarily due to loan principal repayment in the fourth quarter of 2018.

Interest expense, net decreased to $8.0 million for the nine-month period ended September 30, 2019 from $8.5 million for the nine-month period ended September 30, 2018, a decrease of $0.5 million. This decrease was primarily due to loan principal repayment in the fourth quarter of 2018.

Income Tax Benefit (Expense).  Income tax expense for the nine-month period ended September 30, 2019 was $9.3 million, or negative 53% of our pre-tax loss. Income tax expense for the nine-month period ended September 30, 2018 was $3.2 million, or 37% of our pre-tax income.  The effective tax rate for the nine-month period ended September 30, 2019 was different than our statutory rate due to foreign and state taxes, and nondeductible expenses, primarily impairment charges. We compute our interim tax expense by projecting our effective tax rate for the year and applying the projected annual effective tax rate to the year to date pre-tax income from continuing operations for the reporting quarter. Additional “discrete" items (such as excess tax benefits from share based compensation) may adjust the year to date tax expense in the quarter in which such items occur.

Our management periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets and the amount maintained in any such allowance is highly subjective and is based on many factors, several of which are subject to significant judgment calls. Based on our analysis we determined that it was more likely than not that our deferred tax assets would be realized.

We intend to permanently reinvest our unremitted earnings in our foreign subsidiaries, and accordingly have not provided deferred tax liabilities on those earnings. We have not yet determined an estimate of the total amount of unremitted earnings.

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Segment Operations

Television

Net Revenue. Net revenue in our television segment remained constant at $36.4 million for the three-month periods ended September 30, 2019 and 2018. We had increases in revenue from spectrum usage rights and retransmission consent revenue, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences. Additionally, there is a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. The increase in revenue was also partially offset by a decrease in political advertising revenue, which has not been material in 2019. We generated a total of $8.8 million and $8.4 million in retransmission consent revenue for the three-month periods ended September 30, 2019 and 2018, respectively.

Net revenue in our television segment increased to $112.7 million for the nine-month period ended September 30, 2019 from $107.4 million for the nine-month period ended September 30, 2018, an increase of approximately $5.3 million, or 5%. The increase was primarily due to increases in revenue from spectrum usage rights and retransmission consent revenue and an increase in national advertising revenue, partially offset by a decrease in local advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences. Additionally, there is a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media. The increase in revenue was also partially offset by a decrease in political advertising revenue, which has not been material in 2019. We generated a total of $26.6 million and $26.4 million in retransmission consent revenue for the nine-month periods ended September 30, 2019 and 2018, respectively.

Direct Operating Expenses. Direct operating expenses in our television segment increased to $15.7 million for the three-month period ended September 30, 2019 from $15.3 million for the three-month period ended September 30, 2018, an increase of approximately $0.4 million. The increase was primarily due to an increase in fees due to networks related to retransmission consent agreements.

Direct operating expenses in our television segment decreased to $45.7 million for the nine-month period ended September 30, 2019 from $45.9 million for the nine-month period ended September 30, 2018, a decrease of approximately $0.2 million. The decrease was primarily due to a decrease in expenses associated with the decrease in advertising revenue, partially offset by an increase in fees due to networks related to retransmission consent agreements.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our television segment increased to $5.5 million for the three-month period ended September 30, 2019 from $5.1 million for the three-month period ended September 30, 2018, an increase of approximately $0.4 million. The increase was primarily due to an increase in bad debt expense.

Selling, general and administrative expenses in our television segment increased to $16.9 million for the nine-month period endedSeptember 30, 2019 from $16.7 million for the nine-month period ended September 30, 2018, an increase of approximately $0.2 million. The increase was primarily due to an increase in bad debt expense.

Radio

Net Revenue.  Net revenue in our radio segment decreased to $14.8 million for the three-month period ended September 30, 2019 from $15.8 million for the three-month period ended September 30, 2018. This decrease of approximately $1.0 million, or 6%, in net revenue was primarily due to a decrease in national advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences as well as the absence of revenue from the 2018 FIFA World Cup in 2019 compared to 2018 and a decrease in political advertising revenue, which has not been material in 2019. Additionally, there is a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media. This trend has had a more significant impact on our radio revenue as compared to television revenue, and we expect that this trend will continue.

Net revenue in our radio segment decreased to $41.1 million for the nine-month period ended September 30, 2019 from $47.1 million for the nine-month period ended September 30, 2018. This decrease of approximately $6.0 million, or 13%, in net revenue was primarily due to decreases in local and national advertising revenue, as a result in part of ratings declines and changing demographic preferences of audiences as well as the absence of revenue from the 2018 FIFA World Cup revenue in 2019 compared to 2018 and a decrease in political advertising revenue, which has not been material in 2019.  Additionally, there is a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media. This trend has had a more significant impact on our radio revenue as compared to television revenue, and we expect that this trend will continue.

Direct Operating Expenses. Direct operating expenses in our radio segment decreased to $9.9 million for the three-month period ended September 30, 2019 from $10.4 million for the three-month period ended September 30, 2018, a decrease of $0.5 million. The decrease was primarily due to a decrease in expenses associated with the decrease in advertising revenue, partially offset by an increase in severance expense.

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Direct operating expenses in our radio segment decreased to $29.0million for the nine-month period ended September 30, 2019 from $32.0million for the nine-month period ended September 30, 2018, a decrease of $3.0million. The decrease was primarily due to a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expense, partially offset by an increase in severance expense.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our radio segment decreased to $4.2 million for the three-month period ended September 30, 2019 from $4.3 million for the three-month period ended September 30, 2018, a decrease of $0.1 million. The decrease was primarily due to a decrease in bad debt expense.

Selling, general and administrative expenses in our radio segment remained constant at $13.4 million for the nine-month periods ended September 30, 2019 and 2018.

Digital

Net Revenue.  Net revenue in our digital segment decreased to $17.6 million for the three-month period ended September 30, 2019 from $22.4 million for the three-month period ended September 30, 2018. This decrease of approximately $4.8 million, or 21%, in net revenue was a result of declines in both international and domestic revenue.  We have previously noted a trend in our domestic digital operations whereby revenue is shifting more to programmatic revenue, and this trend is now growing in markets outside the United States. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us, which is putting pressure on margins.  In response to this, we have started to offer programmatic solutions to advertisers and strategically shift the focus of our other digital offerings to focus on generating revenue with lower associated cost of revenue.  This has contributed to a decline in the volume of revenue but led to improvement in the gross margin percentage.  Notwithstanding the foregoing, the digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes including the need to further adjust our business strategies accordingly. No assurances can be given that such adjustments will be successful.

Net revenue in our digital segment decreased to $48.9 million for the nine-month period ended September 30, 2019 from $61.2 million for the nine-month period ended September 30, 2018. This decrease of approximately $12.3 million, or 20%, in net revenue was a result of declines in both international and domestic revenue.  We have previously noted a trend in our domestic digital operations whereby revenue is shifting more to programmatic revenue, and this trend is now growing in markets outside the United States. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us, which is putting pressure on margins.  In response to this, we have started to offer programmatic solutions to advertisers and strategically shift the focus of our other digital offerings to focus on generating revenue with lower associated cost of revenue.  This has contributed to a decline in the volume of revenue but led to improvement in the gross margin percentage.  Notwithstanding the foregoing, the digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes including the need to further adjust our business strategies accordingly. No assurances can be given that such adjustments will be successful.

Cost of revenue.  Cost of revenue in our digital segment decreased to $9.9 million for the three-month period ended September 30, 2019 from $13.2 million for the three-month period ended September 30, 2018, a decrease of $3.3 million, primarily due to a decrease in expenses associated with the decrease in revenue. As a percentage of digital net revenue, cost of revenue decreased to 56% for the three-month period ended September 30, 2019 from 59% for the three-month period ended September 30, 2018. This decrease as a percentage of net revenue is a result of a strategic shift in our digital business designed to focus on generating revenue with lower associated costs to produce higher margins.

Cost of revenue in our digital segment decreased to $26.4 million for the nine-month period ended September 30, 2019 from $35.2 million for the nine-month period ended September 30, 2018, a decrease of $8.8 million, primarily due to a decrease in expenses associated with the decrease in revenue. As a percentage of digital net revenue, cost of revenue decreased to 54% for the nine-month period ended September 30, 2019 from 58% for the nine-month period ended September 30, 2018. This decrease as a percentage of net revenue is a result of a strategic shift in our digital business designed to focus on generating revenue with lower associated costs to produce higher margins.

Direct operating expenses. Direct operating expenses in our digital segment decreased to $5.2 million for the three-month period ended September 30, 2019 from $6.0 million for the three-month period ended September 30, 2018, a decrease of $0.8 million.  The decrease was primarily due to a decrease in expenses associated with the decrease in revenue.

Direct operating expenses in our digital segment decreased to $14.7 million for the nine-month period ended September 30, 2019 from $15.9 million for the nine-month period ended September 30, 2018, a decrease of $1.2 million.  The decrease was primarily due to a decrease in expenses associated with the decrease in revenue.

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Selling, general and administrative expenses. Selling, general and administrative expenses in our digital segment decreased to $2.8million for the three-month period ended September 30, 2019 from $3.0million for the three-month period ended September 30, 2018, a decrease of $0.2million. The decrease was primarily due to a decrease in salary expense.

Selling, general and administrative expenses in our digital segment increased to $9.5 million for the nine-month period ended September 30, 2019 from $8.3 million for the nine-month period ended September 30, 2018, an increase of $1.2 million. The increase was primarily due to an increase in severance expense in the first half of 2019, and an increase in bad debt expense, partially offset by a decrease in salary expense.

Liquidity and Capital Resources

We had net income of $12.2 million, $175.7 million, and $20.4 million for the years ended December 31, 2018, 2017 and 2016, respectively. We had positive cash flow from operations of $33.8 million, $301.5 million and $57.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. We generated cash flows from operations of $23.5 million for the nine-month period ended September 30, 2019. We expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations. We currently anticipate that funds generated from operations, cash on hand and available borrowings under our 2017 Credit Facility will be sufficient to meet our anticipated cash requirements for at least the next twelve months. At September 30, 2019, we held cash and cash equivalents of $7.1 million in accounts outside the United States. Our liquidity is not materially impacted by the amount held in accounts outside the United States as our operating cash flows are driven primarily by U.S. sources.

2017 Credit Facility

On November 30, 2017 (the “Closing Date”), we entered into our 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 we 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 our first lien net leverage ratio (as such term is used in the 2017 Credit Agreement) not exceeding 4.0 to 1.0, subject to us satisfying certain conditions.

Borrowings under the Term Loan B Facility were used on the Closing Date (a) to repay in full all of our and our subsidiaries’ outstanding obligations under the 2013 Credit Agreement and to terminate 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 our existing and future wholly-owned domestic subsidiaries, and is secured on a first priority basis by our and those subsidiaries’ assets.

Our 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%. As of September 30, 2019, the interest rate on our Term Loan B was 5.09%. 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 our option without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a Eurodollar 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 us and our restricted subsidiaries to, among other things:

• incur liens on our 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;

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• 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 our 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 our 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 us 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 us 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 our 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 us or any significant subsidiary;

• final judgment is entered against us 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 thirty (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.

In connection with our entering into the 2017 Credit Agreement, we and our restricted subsidiaries also entered into a Security Agreement, pursuant to which we and the Credit Parties 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, we entered into an amendment to the 2017 Credit Agreement, which became effective on May 1, 2019. Pursuant to this amendment, the lenders:

i. waived any events of default that may have arisen under the 2017 Credit Agreement in connection with our failure to timely deliver audited financial statements for fiscal year 2018, and

ii. amended the 2017 Credit Agreement, giving us until May 31, 2019 to deliver the 2018 audited financial statements.

On May 7, 2019, we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which Annual Report contained the 2018 audited financial statements. By filing our Annual Report on Form 10-K prior to May 31, 2019, we believe that we have complied with the affirmative covenants in the amendment to the 2017 Credit Agreement regarding delivery of the 2018 audited financial statements.

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Pursuant to this amendment, we agreed to pay to the lenders consenting to this amendment a fee equal to 0.10% of the aggregate principal amount of the outstanding loans held by such lenders under the 2017 Credit Agreement as of May 1, 2019. This fee totaled approximately $0.2 million.

The carrying amount of the Term Loan B Facility as of September 30, 2019 was $241.4 million, net of $2.6 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of September 30, 2019 was $239.1 million. The estimated fair value is based on quoted prices in markets where trading occurs infrequently.

Share Repurchase Program

On July 13, 2017, our Board of Directors approved a share repurchase program of up to $15.0 million of our outstanding Class A common stock. On April 11, 2018, our Board of Directors approved the repurchase of up to an additional $15.0 million of our outstanding 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 we are 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.

In the three-month period ended September 30, 2019, we repurchased 0.5 million shares of our Class A common stock for an aggregate purchase price of $1.3 million, or an average price per share of $2.84. As of September 30, 2019, we have repurchased a total of approximately 7.5 million shares of our Class A common stock for aggregate purchase price of approximately $29.5 million, or an average price per share of $3.91, since the beginning of the share repurchase program. As of September 30, 2019, all such repurchased shares were retired.

Consolidated Adjusted EBITDA

Consolidated adjusted EBITDA (as defined below) decreased to $29.8 million for the nine-month period ended September 30, 2019 compared to $33.1 million for the nine-month period ended September 30, 2018. As a percentage of net revenue, consolidated adjusted EBITDA was 15% for each of the nine-month periods ended September 30, 2019 and 2018.

Consolidated adjusted EBITDA, as defined in our 2017 Credit Agreement, 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), non-recurring cash expenses, 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 our 2017 Credit Agreement 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), non-recurring cash expenses, 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.

Since consolidated adjusted EBITDA is a measure governing several critical aspects of our 2017 Credit Facility, we believe that it is important to disclose consolidated adjusted EBITDA to our investors.  We may increase the aggregate principal amount outstanding by an additional amount equal to $100.0 million plus the amount that would result in our total net leverage ratio, or the ratio of consolidated total senior debt (net of up to $75.0 million of unrestricted cash) to trailing-twelve-month consolidated adjusted EBITDA, not exceeding 4.0. In addition, beginning December 31, 2018, at the end of every calendar year, in the event our total net leverage ratio is within certain ranges, we must make a debt prepayment equal to a certain percentage of our Excess Cash Flow, which is defined as consolidated adjusted EBITDA, less consolidated interest expense, less debt principal payments, less taxes paid, less other amounts set forth in the definition of Excess Cash Flow in the 2017 Credit Agreement. The total leverage ratio was as follows (in each case as of September 30): 2019, 3.3 to 1; 2018, 5.0 to 1.

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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 (loss) and net income (loss).  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), non-recurring cash expenses, 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, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important 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.

Consolidated adjusted EBITDA is a non-GAAP measure. For a reconciliation of consolidated adjusted EBITDA to cash flows from operating activities, its most directly comparable GAAP financial measure, please see page 32.

Cash Flow

Net cash flow provided by operating activities was $23.5 million for the nine-month period ended September 30, 2019, compared to net cash flow provided by operating activities of $22.5 million for the nine-month period ended September 30, 2018. We had a net loss of $27.1 million for the nine-month period ended September 30, 2019, which included non-cash items such as impairment loss of $31.4 million with respect to our digital and television reporting units, depreciation and amortization expense of $12.4 million and non-cash stock-based compensation of $2.5 million. We had net income of $5.2 million for the nine-month period ended September 30, 2018, which was partially reduced by non-cash items such as depreciation and amortization expense of $12.1 million and non-cash stock-based compensation of $3.7 million. We expect to have positive cash flow from operating activities for the full year 2019.

Net cash flow provided by investing activities was $4.9 million for the nine-month period ended September 30, 2019, compared to net cash flow used in investing activities of $154.3 million for the nine-month period ended September 30, 2018. During the nine-month period ended September 30, 2019, we had proceeds of $27.9 million from the maturity of marketable securities, spent $21.2 million in net capital expenditures and spent $1.4 million to purchase marketable securities. During the nine-month period ended September 30, 2018, we spent $159.4 million on the purchase of marketable securities, $3.5 million on the acquisition of Smadex, $12.3 million on net capital expenditures, $3.2 million on the purchase of intangible assets, and $1.0 million on investments offset by $25.0 million in proceeds from the maturity of marketable securities. We anticipate that our capital expenditures will be approximately $24.0 million during the full year 2019. Of this amount, we expect that approximately $6.5 million will be expended in connection with the required relocation of certain of our television stations to a different channel as part of the broadcast television repack following the FCC auction for broadcast spectrum, which amount we expect to be reimbursed to us by the FCC. The amount of our anticipated capital expenditures may change based on future changes in business plans, our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations.

Net cash flow used in financing activities was $26.4 million for the nine-month period ended September 30, 2019, compared to net cash flow used in financing activities of $27.5 million for the nine-month period ended September 30, 2018. During the nine-month period ended September 30, 2019, we made dividend payments of $12.8 million, principal debt repayments of $2.3 million, and spent $10.4 million for the repurchase of Class A common stock and $0.8 million for taxes related to shares withheld for share-based compensation plans. During the nine-month period ended September 30, 2018, we made dividend payments of $13.4 million, payments of $7.7 million for the repurchase of Class A common stock under our stock repurchase program, payments of $2.2 million for taxes related to shares withheld for share-based compensation plans, contingent consideration payments of $2.0 million and debt payments of $2.3 million.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

Market risk represents the potential loss that may impact our financial position, results of operations or cash flows due to adverse changes in the financial markets. We are exposed to market risk from changes in the base rates on our Term Loan B.

Interest Rates

As of September 30, 2019, we had $244.0 million of variable rate bank debt outstanding under our 2017 Credit Facility. The debt bears interest at the three-month Eurodollar rate plus a margin of 2.75%.

Because our debt is subject to interest at a variable rate, our earnings will be affected in future periods by changes in interest rates. If the Eurodollar were to increase by a hypothetical 100 basis points, or one percentage point, from its September 30, 2019 level, our annual interest expense would increase and cash flow from operations would decrease by approximately $2.4 million based on the outstanding balance of our term loan as of September 30, 2019.

Foreign Currency

We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar. Our historical revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, we have operations in countries other than the United States, primarily related to our Headway business, and as a result we expect an increasing portion of our future revenues to be denominated in currencies other than the U.S. dollar, primarily the Mexican peso, Argentine peso and various other Latin American currencies. The effect of an immediate and hypothetical 10% adverse change in foreign exchange rates on foreign-denominated accounts receivable at September 30, 2019 would not be material to our overall financial condition or consolidated results of operations. Our operating expenses are generally denominated in the currencies of the countries in which our operations are located, primarily the United States and, to a much lesser extent, Spain, Mexico, Argentina and other Latin American countries. Increases and decreases in our foreign-denominated revenue from movements in foreign exchange rates are partially offset by the corresponding decreases or increases in our foreign-denominated operating expenses.

Based on recent inflation trends, the economy in Argentina has been classified as highly inflationary. As a result, the Company applied the guidance in ASC 830 by remeasuring non-monetary assets and liabilities at historical exchange rates and monetary-assets and liabilities using current exchange rates (see Note 2 to Notes to Consolidated Financial Statements).

As our international operations grow, our risks associated with fluctuation in currency rates will become greater, and we will continue to reassess our approach to managing this risk. In addition, currency fluctuations or a weakening U.S. dollar can increase the amount of operating expense of our international operations, primarily those related to our Headway business. To date, we have not entered into any foreign currency hedging contracts, since exchange rate fluctuations historically have not had a material impact on our operating results and cash flows.

ITEM 4. CONTROLS AND PROCEDURES

We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of the evaluation date, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting identified in our Annual Report on Form 10-K for the year ended December 31, 2018, as described below.  

Notwithstanding the conclusion that our disclosure controls and procedures were not effective as of the end of the period covered by this report, we believe that our consolidated financial statements and other information contained in this quarterly report present fairly, in all material respects, our business, financial condition and results of operations for the interim periods presented.

42

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.  As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018, the following material weaknesses existed as of that date:

• A material weakness in our internal controls due to insufficient accounting resources and personnel.  Although the control weakness did not result in any material misstatement of our consolidated financial statements for the periods presented, it could lead to a material misstatement of account balances or disclosures. Accordingly, management has concluded that this control weakness constitutes a material weakness.

• A material weakness in our internal controls over our Headway business. Headway operates in multiple countries, uses multiple currencies and, prior to the acquisition, was a private company, not subject to U.S. accounting regulations applicable to public companies, with limited accounting and financial reporting personnel and other resources with which to address its internal controls and procedures.  Following our acquisition of Headway, management implemented controls over Headway relating to a number of areas, including revenue, accounts receivable, accounts payable, operating expenses, intercompany accounts and income taxes; however, management has determined that these controls were not designed and/or implemented with an adequate precision level such that they would prevent or detect the reporting of inaccurate information, which in turn could lead to a material misstatement.  Although this control weakness did not result in any material misstatement of our consolidated financial statements for the periods presented, it could lead to a material misstatement of account balances or disclosures.  Accordingly, management has concluded that this control weakness constitutes a material weakness.

• A material weakness in our internal controls over revenue in our broadcast and digital businesses.  The design of certain revenue controls, primarily related to the approval of the entry of customer contracts into our operating system of record; the allocation of prices to advertising inventory under advertising contracts containing multiple stations and dayparts; and our reliance upon certain information received from third parties including, in particular, information relating to digital impressions delivered by third party digital platforms, would not prevent or detect the reporting of inaccurate information, which in turn could lead to a material misstatement. Although this control weakness did not result in any material misstatement of our consolidated financial statements for the periods presented, it could lead to a material misstatement of account balances or disclosures.  Accordingly, management has concluded that this control weakness constitutes a material weakness.

Management’s Plan for Remediation

Management has discussed the material weaknesses described above with the Audit Committee and has identified certain steps necessary to remediate the material weaknesses. Management has implemented many of those steps, which include the following:

• hiring additional employees to address complex accounting matters primarily related to the expanding geographic scope of our business operations, primarily our digital operations;

• enhancing our internal controls team through hiring management-level employees and additional staff, as well as engaging third-party consultants to assist in the design and testing of key internal controls;

• redesigning controls at Headway to increase the level of precision related to revenue, accounts receivable, accounts payable, operating expenses, intercompany accounts and income taxes;

• hiring additional management, accounting, finance and information technology personnel in certain of our foreign locations to strengthen our accounting resources in these locations;

• providing additional general internal controls training for employees in key internal control roles on a company-wide basis;

• providing additional technical training for accounting personnel tasked with review of revenue contracts; and

• implementing increased monitoring controls over information obtained from third parties.

43

We believe that a remediation plan incorporating the steps described above, and possibly other steps, when fully implemented and tested, will remediate the material weaknesses previously identified and strengthen our internal control over financial reporting. As we continue to implement and test the remediation plan outlined above, we may also identify additional measures to address the material weaknesses or modify certain of the remediation procedures described above. We may also implement additional changes to our internal control over financial reporting as may be appropriate in the course of remediating the material weaknesses.  Management will continue to review our financial reporting controls and procedures and, with the input outside consultants and the continued oversight of the Audit Committee, will take such additional steps as necessary to remedy the material weaknesses previously identified, to reinforce the overall design and capability of our control environment.

Inherent Limitations on Effectiveness of Controls

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control

Other than changes noted above to remediate the previously-identified material weaknesses, there have not been any changes in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

44

PART II.

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various outstanding claims and other legal proceedings that may arise in the ordinary course of business. In the opinion of management, any liability that may arise out of or with respect to these matters will not materially adversely affect our financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

No material change.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

On July 13, 2017, our Board of Directors approved a share repurchase program of up to $15.0 million of our outstanding Class A common stock. On April 11, 2018, our Board of Directors approved the repurchase of up to an additional $15.0 million of our 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 we are 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.

In the three-month period ended September 30, 2019, we repurchased 0.5 million shares of our Class A common stock for an aggregate purchase price of $1.3 million, or an average price per share of $2.84. As of September 30, 2019, we have repurchased a total of approximately 7.5 million shares of our Class A common stock for an aggregate purchase price of approximately $29.5 million, or an average price per share of $3.91, since the beginning of the share repurchase program. As of September 30, 2019, all such repurchased shares were retired.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

45

ITEM 6. EXHIBITS

31.1*	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
31.2*	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.
32*	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase.

* Filed herewith.

46

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ENTRAVISION COMMUNICATIONS CORPORATION
By:	/s/ Christopher T. Young
	Christopher T. Young Chief Financial Officer and Treasurer

Date: November 8, 2019

47

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I, Walter F. Ulloa, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Entravision Communications Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2019

/s/ Walter F. Ulloa

Walter F. Ulloa

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I, Christopher T. Young, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Entravision Communications Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2019

/s/ Christopher T. Young

Christopher T. Young

Chief Financial Officer

EX-32

Exhibit 32

Certification of Periodic Financial Report by the Chief Executive Officer and

Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Entravision Communications Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 8, 2019
	/s/ Walter F. Ulloa
	Walter F. Ulloa Chief Executive Officer
Date: November 8, 2019
	/s/ Christopher T. Young
	Christopher T. Young Chief Financial Officer

XML

The Company and Significant Accounting Policies - Summary of Components of AOCI (Detail) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss)	$ (400)	$ (600)	$ (1,412)		$ (1,412)
Other comprehensive income (loss)	100	400	1,000
Income tax (expense) benefit	(100)	(200)	(200)
Total other comprehensive income (loss)	50	200	800	$ 143	1,048	$ (1,359)
Accumulated other comprehensive income (loss)	(364)	(400)	(600)		(364)
Foreign Currency Translation
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss)	(700)	(400)	(400)		(400)
Other comprehensive income (loss)	(100)	(300)
Total other comprehensive income (loss)	(100)	(300)
Accumulated other comprehensive income (loss)	(800)	(700)	(400)		(800)
Marketable Securities
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss)	300	(200)	(1,000)		(1,000)
Other comprehensive income (loss)	200	700	1,000
Income tax (expense) benefit	(100)	(200)	(200)
Total other comprehensive income (loss)	100	500	800
Accumulated other comprehensive income (loss)	$ 400	$ 300	$ (200)		$ 400

XML

The Company and Significant Accounting Policies - Carrying Amount of Goodwill (Detail) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018
Goodwill [Line Items]
Goodwill, Beginning balance		$ 74,292,000
Currency		(67,000)
Impairment		(27,714,000)	$ 0
Goodwill, Ending balance	$ 46,511,000	46,511,000	74,292,000
Television
Goodwill [Line Items]
Goodwill, Beginning balance		40,549,000
Goodwill, Ending balance	40,549,000	40,549,000	40,549,000
Digital
Goodwill [Line Items]
Goodwill, Beginning balance		33,743,000
Currency		(67,000)
Impairment	(5,300,000)	(27,714,000)
Goodwill, Ending balance	$ 5,962,000	$ 5,962,000	$ 33,743,000

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Separate Financial Data for Each of Company's Operating Segment

Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value contingent consideration, impairment charge, foreign currency (gain) loss and other operating (gain) loss. The Company generated 18% and 21% of its revenue outside the United States during the three-month periods ended September 30, 2019 and September 30, 2018, respectively. The Company generated 17% and 20% of its revenue outside the United States during the nine-month periods ended September 30, 2019 and September 30, 2018, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Nine-Month Period
	Ended September 30,						%			Ended September 30,						%
		2019			2018		Change				2019			2018		Change
Net revenue
Television	$	36,421		$	36,361			0	%	$	112,745		$	107,383			5	%
Radio		14,783			15,783			(6	)%		41,104			47,126			(13	)%
Digital		17,612			22,431			(21	)%		48,888			61,233			(20	)%
Consolidated		68,816			74,575			(8	)%		202,737			215,742			(6	)%
Cost of revenue - digital media		9,942			13,240			(25	)%		26,443			35,249			(25	)%
Direct operating expenses
Television		15,661			15,315			2	%		45,745			45,903			(0	)%
Radio		9,932			10,402			(5	)%		28,968			32,011			(10	)%
Digital		5,214			5,977			(13	)%		14,679			15,930			(8	)%
Consolidated		30,807			31,694			(3	)%		89,392			93,844			(5	)%
Selling, general and administrative expenses
Television		5,497			5,147			7	%		16,945			16,670			2	%
Radio		4,209			4,274			(2	)%		13,380			13,382			(0	)%
Digital		2,751			2,977			(8	)%		9,491			8,313			14	%
Consolidated		12,457			12,398			0	%		39,816			38,365			4	%
Depreciation and amortization
Television		2,613			2,227			17	%		7,435			6,708			11	%
Radio		465			615			(24	)%		1,368			1,855			(26	)%
Digital		1,112			1,252			(11	)%		3,609			3,489			3	%
Consolidated		4,190			4,094			2	%		12,412			12,052			3	%
Segment operating profit (loss)
Television		12,650			13,672			(7	)%		42,620			38,102			12	%
Radio		177			492			(64	)%		(2,612	)		(122	)		2041	%
Digital		(1,407	)		(1,015	)		39	%		(5,334	)		(1,748	)		205	%
Consolidated		11,420			13,149			(13	)%		34,674			36,232			(4	)%
Corporate expenses		6,785			6,913			(2	)%		20,180			19,154			5	%
Change in fair value contingent consideration		-			(114	)		(100	)%		(2,376	)		1,073		*
Impairment charge		9,075			-		*				31,443			-		*
Foreign currency (gain) loss		927			335			177	%		977			531			84	%
Other operating (gain) loss		(1,572	)		(327	)		381	%		(5,165	)		(622	)		730	%
Operating income (loss)		(3,795	)		6,342		*				(10,385	)		16,096		*
Interest expense	$	(3,537	)	$	(3,995	)		(11	)%	$	(10,581	)	$	(11,394	)		(7	)%
Interest income		825			933			(12	)%		2,601			2,885			(10	)%
Dividend income		241			457			(47	)%		747			1,002			(25	)%
Income (loss) before income taxes		(6,266	)		3,737		*				(17,618	)		8,589		*
Capital expenditures
Television	$	7,460		$	6,819					$	21,462		$	10,841
Radio		86			71						667			233
Digital		64			226						304			473
Consolidated	$	7,610		$	7,116					$	22,433		$	11,547
	September 30,			December 31,
Total assets		2019			2018
Television		499,335			487,929
Radio		138,710			121,020
Digital		49,797			81,460
Consolidated	$	687,842		$	690,409

* Percentage not meaningful.

XML

Revenues - Summary of Deferred Revenue (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Revenue From Contract With Customer [Abstract]
Beginning Balance	$ 2,759
Increase	1,177
Decrease	(2,759)
Ending Balance	$ 1,177

XML

Leases - Summary of Future Minimum Rental Commitments for Operating Leases (Detail) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 10,432
2020	10,677
2021	8,507
2022	7,560
2023	6,137
2024 and thereafter	38,515
Total future minimum rental commitments, operating leases	$ 81,828

XML

Subsequent Event - Additional Information (Detail) $ in Millions	Jul. 31, 2019 USD ($)
KMBH-TV
Subsequent Event [Line Items]
Cash consideration	$ 2.9

XML

The Company and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Restricted Cash

Restricted Cash

As of September 30, 2019 and December 31, 2018, 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

Related Party

Substantially all of the Company’s stations are Univision- or UniMás-affiliated television stations. The Company’s network affiliation agreements with Univision provide certain of its 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 Company’s Univision- and UniMás-affiliate television stations, and it pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on the Company’s Univision- and UniMás-affiliate television stations. During the three-month periods ended September 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the nine-month periods ended September 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $6.0 million and $6.4 million, respectively.

The Company also generates revenue under two marketing and sales agreements with Univision, which gives the Company 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 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, 2019, the amount due to the Company from Univision was $4.5 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During the three-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $8.8 and $8.4 million, respectively, of which $7.0 million and $6.5 million, respectively, relate to the Univision proxy agreement. During the nine-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $26.6 million and $26.4 million, respectively, of which $20.7 million and $21.5 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 Class U common stock held by Univision has limited voting rights and does not include the right to elect directors. 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, the Company will not, without the consent of Univision, merge, consolidate or enter into another business combination, dissolve or liquidate the Company or dispose of any interest in any Federal Communications Commission, or FCC, license for any of its Univision-affiliated television stations, among other things. Each share of Class U common stock is automatically convertible into one share of Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision.

Stock-Based Compensation

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 stock options and restricted stock units was $0.8 million and $1.3 million for the three-month periods ended September 30, 2019 and 2018, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $2.5 million and $3.7 million for the nine-month periods ended September 30, 2019 and 2018, 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.

As of September 30, 2019, 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, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

As of September 30, 2019, there was approximately $2.3 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 1.2 years.

Income (Loss) Per Share

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):

	Three-Month Period					Nine-Month Period
	Ended September 30,					Ended September 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06
Diluted earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Dilutive securities:
Stock options and restricted stock units		-			1,270,083		-			1,202,913
Diluted shares outstanding		84,765,694			90,122,425		85,404,250			90,574,663
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06

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.

For the three- and nine-month periods ended September 30, 2019, 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 1,242,354 and 1,081,875 equivalent shares of dilutive securities for the three- and nine-month periods ended September 30, 2019, respectively.

For the three-month period ended September 30, 2018 there were no dilutive securities excluded from the computation of diluted income per share. For the nine-month period ended September 30, 2018, a total 92,979 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.

Goodwill and Intangibles Assets Impairment

Goodwill and Intangible Assets 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 of the last annual testing date, October 1, 2018, and as noted in the Annual Report on Form 10-K for the year ended December 31, 2018, the Company determined there was no impairment to goodwill and indefinite life intangibles for any of its reporting units.

Due to lower than anticipated performance of the Company’s digital reporting unit in the second quarter of 2019, changes in key personnel, and updated internal forecasts of future performance of the digital reporting unit, the Company determined that triggering events had occurred during the second quarter of 2019 that required an interim impairment assessment for its digital reporting unit. Additionally, due to further deterioration in performance and further updated internal forecasts of future performance of the digital reporting unit in the third quarter of 2019, the Company determined that triggering events had also occurred during the third quarter of 2019 that required an additional interim impairment assessment for its digital reporting unit in the amount set forth below.

The Company conducted a review of the fair value of the digital reporting unit in each of the second and third quarters of 2019. The estimated fair value of the digital goodwill was determined by using a combination of a market approach and an income approach. The market approach estimates fair value by applying sales, earnings and cash flow multiples to the reporting unit’s operating performance. The multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics to the Company’s digital reporting unit. The market approach requires the Company to make a series of assumptions, such as selecting comparable companies and comparable transactions and transaction premiums.

The income approach estimates fair value based on the estimated future cash flows of the digital reporting unit, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk of the reporting unit. The income approach also requires the Company to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. The Company estimated the discount rate on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the digital media industry. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company’s digital reporting unit. The Company also estimated the terminal value multiple based on comparable publicly-traded companies in the digital media industry. The Company estimated its revenue projections and profit margin projections based on internal forecasts about future performance.

Based on the assumptions and estimates described above, the Company concluded that the digital reporting unit carrying value exceeded its fair value, resulting in a goodwill impairment charge of $5.3 million and $27.7 million for the three- and nine-month periods ended September 30, 2019, respectively.

The carrying amount of goodwill for each of the Company’s operating segments for the nine-months ended September 30, 2019 is as follows (in thousands):

	December 31, 2018		Currency			Impairment			September 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(27,714	)		5,962
Consolidated	$	74,292	$	(67	)	$	(27,714	)	$	46,511

Treasury Stock

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.

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

During the three-month period ended September 30, 2019, the Company repurchased 0.5 million shares of Class A common stock at an average price of $2.84, for an aggregate purchase price of approximately $1.3 million. As of September 30, 2019, the Company has repurchased a total of approximately 7.5 million shares of Class A common stock, for an aggregate purchase price of approximately $29.5 million, or an average price per share of $3.91, since the beginning of the share repurchase program. As of September 30, 2019, all such repurchased shares were retired.

2017 Credit Facility

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 (“2013 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 Eurodollar 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 the Credit Parties 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. Pursuant to this amendment, the lenders:

i. waived any events of default that may have arisen under the 2017 Credit Agreement in connection with the Company’s failure to timely deliver audited financial statements for fiscal year 2018, and

ii. amended the 2017 Credit Agreement, giving the Company until May 31, 2019 to deliver the 2018 audited financial statements.

On May 7, 2019, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which Annual Report contained the 2018 audited financial statements. By filing its Annual Report on Form 10-K prior to May 31, 2019, the Company believes that it has complied with the affirmative covenants in the amendment to the 2017 Credit Agreement regarding delivery of the 2018 audited financial statements.

Pursuant to this amendment, the Company agreed to pay to the lenders consenting to this amendment a fee equal to 0.10% of the aggregate principal amount of the outstanding loans held by such lenders under the 2017 Credit Agreement as of May 1, 2019. This fee totaled approximately $0.2 million.

The carrying amount of the Term Loan B Facility as of September 30, 2019 was $241.4 million, net of $2.6 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of September 30, 2019 was $239.1 million. The estimated fair value is based on quoted prices in markets where trading occurs infrequently.

Fair Value Measurements

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 Unaudited Consolidated Balance Sheets (in millions):

	September 30, 2019
	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	$	34.7	$	-	$	34.7		$	-
Certificates of deposit	$	6.8	$	-	$	6.8		$	-
Corporate bonds	$	100.6	$	-	$		100.6	$	-
Liabilities:
Contingent Consideration	$	5.7	$	-	$		-	$	5.7
	December 31, 2018
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
	Sheet		Level 1		Level 2			Level 3
Assets:
Money market account	$	34.6	$	-	$	34.6		$	-
Certificates of deposit	$	8.2	$	-	$	8.2		$	-
Corporate bonds	$	124.2	$	-	$	124.2		$	-
Liabilities:
Contingent Consideration	$	8.1	$	-	$	-		$	8.1

As of September 30, 2019, 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 all 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 Unaudited Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income.

As of September 30, 2019, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands):

	Certificates of Deposit				Corporate Bonds
	Amortized Cost		Unrealized gains (losses)		Amortized Cost		Unrealized gains (losses)
Due within a year	$	3,766	$	15	$	45,000	$	168
Due after one year through five years		3,036		24		55,096		381
Total	$	6,802	$	39	$	100,096	$	549

The Company periodically reviews its available for sale securities for other-than-temporary impairment. For the three- and nine-month periods ended September 30, 2019, the Company did not consider any of its securities to be other-than-temporarily impaired and, accordingly, did not recognize any impairment losses.

Included in interest income for the three- and nine-month periods ended September 30, 2019 was interest income related to the Company’s available-for-sale securities of $0.8 and $2.4 million, respectively.

Accumulated Other Comprehensive Income (Loss)

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, 2019 (in millions):

	Foreign Currency Translation			Marketable Securities			Total
Accumulated other comprehensive income (loss) as of December 31, 2018	$	(0.4	)	$	(1.0	)	$	(1.4	)
Other comprehensive income (loss)		-			1.0			1.0
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		-			0.8			0.8
Accumulated other comprehensive income (loss) as of March 31, 2019		(0.4	)		(0.2	)		(0.6	)
Other comprehensive income (loss)		(0.3	)		0.7			0.4
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		(0.3	)		0.5			0.2
Accumulated other comprehensive income (loss) as of June 30, 2019		(0.7	)		0.3			(0.4	)
Other comprehensive income (loss)		(0.1	)		0.2			0.1
Income tax (expense) benefit		-			(0.1	)		(0.1	)
Other comprehensive income (loss), net of tax		(0.1	)		0.1			-
Accumulated other comprehensive income (loss) as of September 30, 2019	$	(0.8	)	$	0.4		$	(0.4	)

Foreign Currency

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 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 U.S. dollar.

Cost of Revenue

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 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.

During the second quarter of 2018, the Company relocated the operations of two of its television stations in the Palm Springs, California market and management approved the sale of the vacated building.  The building and related improvements met the criteria for classification as assets held for sale and their carrying value is presented separately in the consolidated balance sheet. During the third quarter of 2019, the Company entered into an agreement to sell the building for $1.0 million. As such, the Company recorded an impairment charge of $0.2 million to reflect the fair market value of the assets held for sale.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of ASU 2018-15 on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement,” (“ASU No. 2018-13”), which modifies the disclosure requirements on fair value measurements, including the consideration of costs and benefits. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is in the process of assessing the impact of ASU 2018-13 on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), whichamends current guidance on other-than-temporary impairments of available-for-sale debt securities. This amended standard requires the use of an allowance to record estimated credit losses on these assets when the fair value is below the amortized cost of the asset. This standard also removes the evaluation of the length of time that a security has been in a loss position to avoid recording a credit loss. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is finalizing its assessment of the impact of ASU 2016-13 on its Consolidated Financial Statements.

Newly Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases transparency and comparability among organizations relating to leases. Lessees are required to recognize a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. The FASB retained a dual model for lease classification, requiring leases to be classified as finance or operating leases to determine recognition in the earnings statement and cash flows; however, substantially all leases are required to be recognized on the balance sheet. ASU 2016-02 also requires quantitative and qualitative disclosures regarding key information about leasing arrangements. ASU 2016-02 is effective using a modified retrospective approach for fiscal years and interim periods beginning after December 15, 2018. This standard allowed entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The standard also provides for certain practical expedients. 

The Company adopted ASU 2016-02 in the first quarter of 2019. As permitted under the transition guidance of the standard, the Company applied the guidance on a prospective basis as of the adoption date.  As a result, prior period amounts were not adjusted and continue to be reported in accordance with accounting guidance under ASC 840.  

The Company elected the package of practical expedients such that the Company did not reassess whether any expired or existing contracts are or contain leases.  In addition, the Company did not reassess prior conclusions reached for lease classification and did not reassess initial direct costs for existing leases.

Based on the Company’s assessment, the adoption of the guidance resulted in a material impact on the Company’s consolidated balance sheet.  However, the impact to the Company’s results of operations and cash flows through September 30, 2019 are not considered material.  As of the adoption date, the Company recognized right-of-use (“ROU”) assets of $45.8 million and lease liabilities of $52.4 million.  The difference between the ROU assets and lease liabilities is attributed to deferred rent and lease incentives which were combined and presented net within the ROU assets.  Refer to Note 4 for additional information.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-based Payment Accounting, which supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees and expands the scope of ASC Topic 718, “Compensation—Stock Compensation” to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The amendments in ASU 2018-07 are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted ASU 2018-07 in the first quarter of 2019, which adoption did not have a material impact on our condensed consolidated financial statements and related disclosures.

In August 2018, the SEC issued a final rule to amend certain disclosure requirements that were redundant, duplicative, overlapping or superseded by other SEC disclosure requirements, US GAAP or IFRS.2 The amendments generally eliminated or otherwise reduced certain disclosure requirements of various SEC rules and regulations. However, in some cases, the amendments require additional information to be disclosed, including changes in stockholders’ equity in interim periods. The Company adopted this rule in the first quarter of 2019 and included a statement of stockholders’ equity beginning in its Quarterly Report on Form 10-Q for the period ended March 31, 2019.

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

4. LEASES

The Company’s leases are considered operating leases and primarily consist of real estate such as office space, broadcasting towers, land and land easements. ROU asset and lease liability is recognized as of lease commencement date based on the present value of the future minimum lease payments over the lease term.  As the implicit rate for operating leases is not readily determinable, the future minimum lease payments were discounted using an incremental borrowing rate.  Due to the Company’s having a centralized treasury function, the Company applied a portfolio approach to discount its domestic lease obligations using its secured publicly traded U.S. dollar denominated debt instruments interpolating the duration of the debt to the remaining lease term.  The incremental borrowing rate for international leases is the interest rate that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The Company’s operating leases are reflected within the consolidated balance sheet as right-of-use assets with the related liability presented as lease liability, current and lease liability, net of current portion. Lease expense is recognized on a straight-line basis over the lease term.

Generally, lease terms include options to renew or extend the lease.  Unless the renewal option is considered reasonably certain, the exercise of any such options have been excluded from the calculation of lease liabilities.  In addition, as permitted within the guidance, ROU assets and lease liabilities are not recorded for leases within an initial term of one year or less.  The Company’s existing leases have remaining terms of less than one year up to 32 years.  Certain of the Company’s lease agreements include rental payments based on changes in the consumer price index (“CPI”). Lease liabilities are not remeasured as a result of changes in the CPI; instead, changes in the CPI are treated as variable lease payments and recognized in the period in which the related obligation was incurred. Lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Certain real estate leases include additional costs such as common area maintenance (non-lease component), as well as property insurance and property taxes. These costs were excluded from future minimum lease payments as they are variable payments. As such, these costs were not part of the calculation of ROU assets and lease liabilities associated with operating leases upon transition.

The following table summarizes the expected future payments related to lease liabilities as of September 30, 2019:

(in thousands)
Remainder of 2019	$	2,875
2020		11,613
2021		9,214
2022		7,785
2023		6,175
2024 and thereafter		36,646
Total minimum payments	$	74,308
Less amounts representing interest		(22,793	)
Present value of minimum lease payments	$	51,515

The weighted average remaining lease term and the weighted average discount rate used to calculate the Company’s lease liabilities as of September 30, 2019 were 11.4 years and 6.3%, respectively.

The following table summarizes lease payments and supplemental non-cash disclosures for the nine-month period ended September 30, 2019:

(in thousands)	Nine-Month Period Ended September 30, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	2,889
Non-cash additions to operating lease assets	$	-

The tables below summarize our future minimum rental commitments for operating leases as of December 31, 2018:

(in thousands)	Amount
2019	$	10,432
2020		10,677
2021		8,507
2022		7,560
2023		6,137
2024 and thereafter		38,515
	$	81,828

The following table summarizes the components of lease expense for the three- and nine-months ended September 30, 2019:

	Three-Month Period		Nine-Month Period
	Ended September 30,		Ended September 30,
(in thousands)	2019		2019
Operating lease cost	$	2,613	$	7,570
Variable lease cost		369		1,159
Short-term lease cost	252		541
Total lease cost	$	3,234	$	9,270

For the three-month periods ended September 30, 2019, lease cost of $1.6 million, $1.4 million and $0.2 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively. For the nine-month periods ended September 30, 2019 lease cost of $4.3 million, $4.4 million and $0.6 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively.

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Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Trade receivables, related parties	$ 4,483	$ 4,530
Trade receivables, allowance for doubtful accounts	2,799	3,395
Prepaid expenses and other current assets	13,621	10,672
Property and equipment, accumulated depreciation	185,731	187,375
Accumulated amortization of Intangible assets	98,373	93,793
Intangible assets subject to amortization, net	18,019	22,598
Accounts payable and accrued expenses	46,766	51,034
Unamortized debt issuance costs	2,600	2,709
Related Parties
Prepaid expenses and other current assets	274	274
Intangible assets subject to amortization, net	7,406	8,327
Accounts payable and accrued expenses	$ 2,277	$ 1,948
Class A common stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	260,000,000	260,000,000
Common stock, shares issued	60,268,985	63,210,531
Common stock, shares outstanding	60,268,985	63,210,531
Class B common stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	14,927,613	14,927,613
Common stock, shares outstanding	14,927,613	14,927,613
Class U common stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	9,352,729	9,352,729
Common stock, shares outstanding	9,352,729	9,352,729

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Class A common stock	Class B common stock	Class U common stock	Common Stock Class A common stock	Common Stock Class B common stock	Common Stock Class U common stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Balance, Beginning at Dec. 31, 2017	$ 348,275				$ 7	$ 2	$ 1		$ 888,650	$ (540,325)	$ (60)
Balance, Beginning, Shares at Dec. 31, 2017					66,069,325	14,927,613	9,352,729
Issuance of common stock upon exercise of stock options or awards of restricted stock units, Shares					17,356
Tax payments related to shares withheld for share-based compensation plans	(43)								(43)
Stock-based compensation expense	1,249								1,249
Repurchase of Class A common stock	(2,402)								(2,402)
Repurchase of Class A common stock, Shares					(500,587)			500,587
Retirement of treasury stock, Shares								(500,587)
Dividends paid	(4,518)								(4,518)
Change in fair value of marketable securities	(1,239)										(1,239)
Foreign currency translation gain (loss)	290										290
Net income (loss)	(1,808)									(1,808)
Balance, Ending at Mar. 31, 2018	339,804				$ 7	$ 2	$ 1		882,936	(542,133)	(1,009)
Balance, Ending, Shares at Mar. 31, 2018					65,586,094	14,927,613	9,352,729
Balance, Beginning at Dec. 31, 2017	348,275				$ 7	$ 2	$ 1		888,650	(540,325)	(60)
Balance, Beginning, Shares at Dec. 31, 2017					66,069,325	14,927,613	9,352,729
Foreign currency translation gain (loss)	(220)
Net income (loss)	5,248
Balance, Ending at Sep. 30, 2018	334,833				$ 6	$ 2	$ 1		871,321	(535,078)	(1,419)
Balance, Ending, Shares at Sep. 30, 2018					64,576,497	14,927,613	9,352,729
Balance, Beginning at Mar. 31, 2018	339,804				$ 7	$ 2	$ 1		882,936	(542,133)	(1,009)
Balance, Beginning, Shares at Mar. 31, 2018					65,586,094	14,927,613	9,352,729
Issuance of common stock upon exercise of stock options or awards of restricted stock units	106								106
Issuance of common stock upon exercise of stock options or awards of restricted stock units, Shares					56,147
Tax payments related to shares withheld for share-based compensation plans	(12)								(12)
Stock-based compensation expense	1,176								1,176
Repurchase of Class A common stock	(5,258)				$ (1)				(5,257)
Repurchase of Class A common stock, Shares					(1,088,086)			1,088,086
Retirement of treasury stock, Shares								(1,088,086)
Dividends paid	(4,441)								(4,441)
Change in fair value of marketable securities	(3)										(3)
Foreign currency translation gain (loss)	(550)										(550)
Net income (loss)	4,840									4,840
Balance, Ending at Jun. 30, 2018	335,662				$ 6	$ 2	$ 1		874,508	(537,293)	(1,562)
Balance, Ending, Shares at Jun. 30, 2018					64,554,155	14,927,613	9,352,729
Issuance of common stock upon exercise of stock options or awards of restricted stock units	(29)								(29)
Issuance of common stock upon exercise of stock options or awards of restricted stock units, Shares					22,342
Stock-based compensation expense	1,286								1,286
Dividends paid	(4,444)								(4,444)
Change in fair value of marketable securities	103										103
Foreign currency translation gain (loss)	40										40
Net income (loss)	2,215									2,215
Balance, Ending at Sep. 30, 2018	334,833				$ 6	$ 2	$ 1		871,321	(535,078)	(1,419)
Balance, Ending, Shares at Sep. 30, 2018					64,576,497	14,927,613	9,352,729
Balance, Beginning at Dec. 31, 2018	332,732				$ 6	$ 2	$ 1		862,299	(528,164)	(1,412)
Balance, Beginning, Shares at Dec. 31, 2018		63,210,531	14,927,613	9,352,729	63,210,531	14,927,613	9,352,729
Issuance of common stock upon exercise of stock options or awards of restricted stock units	(42)								(42)
Issuance of common stock upon exercise of stock options or awards of restricted stock units, Shares					25,059
Stock-based compensation expense	800								800
Repurchase of Class A common stock	(7,706)								(7,706)
Repurchase of Class A common stock, Shares					(2,098,443)			2,098,443
Retirement of treasury stock, Shares								(2,098,443)
Dividends paid	(4,271)								(4,271)
Change in fair value of marketable securities	763										763
Foreign currency translation gain (loss)	30										30
Net income (loss)	1,424									1,424
Balance, Ending at Mar. 31, 2019	323,730				$ 6	$ 2	$ 1		851,080	(526,740)	(619)
Balance, Ending, Shares at Mar. 31, 2019					61,137,147	14,927,613	9,352,729
Balance, Beginning at Dec. 31, 2018	332,732				$ 6	$ 2	$ 1		862,299	(528,164)	(1,412)
Balance, Beginning, Shares at Dec. 31, 2018		63,210,531	14,927,613	9,352,729	63,210,531	14,927,613	9,352,729
Foreign currency translation gain (loss)	(392)
Net income (loss)	(27,072)
Balance, Ending at Sep. 30, 2019	285,976				$ 6	$ 2	$ 1		841,567	(555,236)	(364)
Balance, Ending, Shares at Sep. 30, 2019		60,268,985	14,927,613	9,352,729	60,268,985	14,927,613	9,352,729
Balance, Beginning at Mar. 31, 2019	323,730				$ 6	$ 2	$ 1		851,080	(526,740)	(619)
Balance, Beginning, Shares at Mar. 31, 2019					61,137,147	14,927,613	9,352,729
Issuance of common stock upon exercise of stock options or awards of restricted stock units, Shares					20,000
Stock-based compensation expense	836								836
Repurchase of Class A common stock	(1,302)								(1,302)
Repurchase of Class A common stock, Shares					(438,534)			438,534
Retirement of treasury stock, Shares								(438,534)
Dividends paid	(4,269)								(4,269)
Change in fair value of marketable securities	523										523
Foreign currency translation gain (loss)	(318)										(318)
Net income (loss)	(16,279)									(16,279)
Balance, Ending at Jun. 30, 2019	302,921				$ 6	$ 2	$ 1		846,345	(543,019)	(414)
Balance, Ending, Shares at Jun. 30, 2019					60,718,613	14,927,613	9,352,729
Issuance of common stock upon exercise of stock options or awards of restricted stock units	(21)								(21)
Issuance of common stock upon exercise of stock options or awards of restricted stock units, Shares					21,410
Stock-based compensation expense	819								819
Repurchase of Class A common stock	(1,349)	$ (1,300)							(1,349)
Repurchase of Class A common stock, Shares		(500,000)			(471,038)			471,038
Retirement of treasury stock, Shares								(471,038)
Dividends paid	(4,227)								(4,227)
Change in fair value of marketable securities	154										154
Foreign currency translation gain (loss)	(104)										(104)
Net income (loss)	(12,217)									(12,217)
Balance, Ending at Sep. 30, 2019	$ 285,976				$ 6	$ 2	$ 1		$ 841,567	$ (555,236)	$ (364)
Balance, Ending, Shares at Sep. 30, 2019		60,268,985	14,927,613	9,352,729	60,268,985	14,927,613	9,352,729

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Segment Information - Separate Financial Data for Each of Company's Operating Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Net revenue	$ 68,816	$ 74,575	$ 202,737	$ 215,742
Direct operating expenses	30,807	31,694	89,392	93,844
Selling, general and administrative expenses	12,457	12,398	39,816	38,365
Depreciation and amortization	4,190	4,094	12,412	12,052
Operating income (loss)	(3,795)	6,342	(10,385)	16,096
Corporate expenses	6,785	6,913	20,180	19,154
Change in fair value contingent consideration		(114)	(2,376)	1,073
Impairment charge	9,075		31,443
Foreign currency (gain) loss	927	335	977	531
Other operating (gain) loss	(1,572)	(327)	(5,165)	(622)
Interest expense	(3,537)	(3,995)	(10,581)	(11,394)
Interest income	825	933	2,601	2,885
Dividend income	241	457	747	1,002
Income (loss) before income taxes	(6,266)	3,737	(17,618)	8,589
Capital expenditures	7,610	7,116	22,433	11,547
Total assets	$ 687,842		$ 687,842		$ 690,409
Percentage change in net revenue	(8.00%)		(6.00%)
Percentage change in direct operating expenses	(3.00%)		(5.00%)
Percentage change in selling, general and administrative expenses	0.00%		4.00%
Percentage change in depreciation and amortization	2.00%		3.00%
Percentage change in segment operating profit (loss)	(13.00%)		(4.00%)
Percentage change in corporate expenses	(2.00%)		5.00%
Change in fair value contingent consideration	(100.00%)
Percentage change in foreign currency (gain) loss	177.00%		84.00%
Percentage change in other operating (gain) loss	381.00%		730.00%
Percentage change in interest expense	(11.00%)		(7.00%)
Percentage change in interest income	(12.00%)		(10.00%)
Percentage change in dividend income	(47.00%)		(25.00%)
Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ 11,420	13,149	$ 34,674	36,232
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Corporate expenses	6,785	6,913	20,180	19,154
Television
Segment Reporting Information [Line Items]
Net revenue	36,421	36,361	112,745	107,383
Direct operating expenses	15,661	15,315	45,745	45,903
Selling, general and administrative expenses	5,497	5,147	16,945	16,670
Depreciation and amortization	2,613	2,227	7,435	6,708
Capital expenditures	7,460	6,819	21,462	10,841
Total assets	$ 499,335		$ 499,335		487,929
Percentage change in net revenue	0.00%		5.00%
Percentage change in direct operating expenses	2.00%		0.00%
Percentage change in selling, general and administrative expenses	7.00%		2.00%
Percentage change in depreciation and amortization	17.00%		11.00%
Percentage change in segment operating profit (loss)	(7.00%)		12.00%
Television | Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ 12,650	13,672	$ 42,620	38,102
Radio
Segment Reporting Information [Line Items]
Net revenue	14,783	15,783	41,104	47,126
Direct operating expenses	9,932	10,402	28,968	32,011
Selling, general and administrative expenses	4,209	4,274	13,380	13,382
Depreciation and amortization	465	615	1,368	1,855
Capital expenditures	86	71	667	233
Total assets	$ 138,710		$ 138,710		121,020
Percentage change in net revenue	(6.00%)		(13.00%)
Percentage change in direct operating expenses	(5.00%)		(10.00%)
Percentage change in selling, general and administrative expenses	(2.00%)		0.00%
Percentage change in depreciation and amortization	(24.00%)		(26.00%)
Percentage change in segment operating profit (loss)	(64.00%)		2041.00%
Radio | Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ 177	492	$ (2,612)	(122)
Digital
Segment Reporting Information [Line Items]
Net revenue	17,612	22,431	48,888	61,233
Cost of revenue	9,942	13,240	26,443	35,249
Direct operating expenses	5,214	5,977	14,679	15,930
Selling, general and administrative expenses	2,751	2,977	9,491	8,313
Depreciation and amortization	1,112	1,252	3,609	3,489
Capital expenditures	64	226	304	473
Total assets	$ 49,797		$ 49,797		$ 81,460
Percentage change in net revenue	(21.00%)		(20.00%)
Percentage change in cost of revenue	(25.00%)		(25.00%)
Percentage change in direct operating expenses	(13.00%)		(8.00%)
Percentage change in selling, general and administrative expenses	(8.00%)		14.00%
Percentage change in depreciation and amortization	(11.00%)		3.00%
Percentage change in segment operating profit (loss)	39.00%		205.00%
Digital | Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ (1,407)	$ (1,015)	$ (5,334)	$ (1,748)

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Revenues - Summary of Disaggregation of Broadcast Advertising Revenue by Sales Channel (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation Of Revenue [Line Items]
Total revenue	$ 68,816	$ 74,575	$ 202,737	$ 215,742
Advertising
Disaggregation Of Revenue [Line Items]
Total revenue	37,345	40,183	109,290	119,425
Advertising | Local Direct
Disaggregation Of Revenue [Line Items]
Total revenue	6,781	6,750	19,292	20,725
Advertising | Local Agency
Disaggregation Of Revenue [Line Items]
Total revenue	14,655	15,267	43,321	45,381
Advertising | National Agency
Disaggregation Of Revenue [Line Items]
Total revenue	$ 15,909	$ 18,166	$ 46,677	$ 53,319

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Leases - Summary of Lease Payments and Supplemental Non-Cash Disclosures (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$ 2,889

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 48,705	$ 46,733
Marketable securities	107,486	132,424
Restricted cash	734	732
Trade receivables, (including related parties of $4,483 and $4,530) net of allowance for doubtful accounts of $2,799 and $3,395	68,809	79,308
Assets held for sale	950	1,179
Prepaid expenses and other current assets (including related parties of $274 and $274)	13,621	10,672
Total current assets	240,305	271,048
Property and equipment, net of accumulated depreciation of $185,731 and $187,375	79,392	64,939
Intangible assets subject to amortization, net of accumulated amortization of $98,373 and $93,793 (including related parties of $7,406 and $8,327)	18,019	22,598
Intangible assets not subject to amortization	251,098	254,598
Goodwill	46,511	74,292
Operating leases right of use asset	45,058
Other assets	7,459	2,934
Total assets	687,842	690,409
Current liabilities
Current maturities of long-term debt	3,000	3,000
Accounts payable and accrued expenses (including related parties of $2,277 and $1,948)	46,766	51,034
Operating lease liabilities	8,843
Total current liabilities	58,609	54,034
Long-term debt, less current maturities, net of unamortized debt issuance costs of $2,600 and $2,709	238,400	240,541
Long-term operating lease liabilities	42,672
Other long-term liabilities	7,531	16,418
Deferred income taxes	54,654	46,684
Total liabilities	401,866	357,677
Commitments and contingencies (note 6)
Stockholders' equity
Additional paid-in capital	841,567	862,299
Accumulated deficit	(555,236)	(528,164)
Accumulated other comprehensive income (loss)	(364)	(1,412)
Total stockholders' equity	285,976	332,732
Total liabilities and stockholders' equity	687,842	690,409
Class A common stock
Stockholders' equity
Common stock	6	6
Class B common stock
Stockholders' equity
Common stock	2	2
Class U common stock
Stockholders' equity
Common stock	$ 1	$ 1

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ (12,217)	$ 2,215	$ (27,072)	$ 5,248
Other comprehensive income (loss), net of tax:
Change in foreign currency translation	(104)	40	(392)	(220)
Change in fair value of available for sale securities	154	103	1,440	(1,139)
Total other comprehensive income (loss)	50	143	1,048	(1,359)
Comprehensive income (loss)	$ (12,167)	$ 2,358	$ (26,024)	$ 3,889

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The Company and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Non-Vested Restricted Stock Units Granted

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, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

Reconciliation of Basic and Diluted 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):

	Three-Month Period					Nine-Month Period
	Ended September 30,					Ended September 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06
Diluted earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Dilutive securities:
Stock options and restricted stock units		-			1,270,083		-			1,202,913
Diluted shares outstanding		84,765,694			90,122,425		85,404,250			90,574,663
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06

Carrying Amount of Goodwill

The carrying amount of goodwill for each of the Company’s operating segments for the nine-months ended September 30, 2019 is as follows (in thousands):

	December 31, 2018		Currency			Impairment			September 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(27,714	)		5,962
Consolidated	$	74,292	$	(67	)	$	(27,714	)	$	46,511

Fair Value of Assets and Liabilities Measured on Recurring Basis

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

	September 30, 2019
	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	$	34.7	$	-	$	34.7		$	-
Certificates of deposit	$	6.8	$	-	$	6.8		$	-
Corporate bonds	$	100.6	$	-	$		100.6	$	-
Liabilities:
Contingent Consideration	$	5.7	$	-	$		-	$	5.7
	December 31, 2018
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
	Sheet		Level 1		Level 2			Level 3
Assets:
Money market account	$	34.6	$	-	$	34.6		$	-
Certificates of deposit	$	8.2	$	-	$	8.2		$	-
Corporate bonds	$	124.2	$	-	$	124.2		$	-
Liabilities:
Contingent Consideration	$	8.1	$	-	$	-		$	8.1

Summary of Amortized Cost and Unrealized (Gains) Losses of Available for Sale Securities

As of September 30, 2019, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands):

	Certificates of Deposit				Corporate Bonds
	Amortized Cost		Unrealized gains (losses)		Amortized Cost		Unrealized gains (losses)
Due within a year	$	3,766	$	15	$	45,000	$	168
Due after one year through five years		3,036		24		55,096		381
Total	$	6,802	$	39	$	100,096	$	549

Summary of Components of AOCI

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, 2019 (in millions):

	Foreign Currency Translation			Marketable Securities			Total
Accumulated other comprehensive income (loss) as of December 31, 2018	$	(0.4	)	$	(1.0	)	$	(1.4	)
Other comprehensive income (loss)		-			1.0			1.0
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		-			0.8			0.8
Accumulated other comprehensive income (loss) as of March 31, 2019		(0.4	)		(0.2	)		(0.6	)
Other comprehensive income (loss)		(0.3	)		0.7			0.4
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		(0.3	)		0.5			0.2
Accumulated other comprehensive income (loss) as of June 30, 2019		(0.7	)		0.3			(0.4	)
Other comprehensive income (loss)		(0.1	)		0.2			0.1
Income tax (expense) benefit		-			(0.1	)		(0.1	)
Other comprehensive income (loss), net of tax		(0.1	)		0.1			-
Accumulated other comprehensive income (loss) as of September 30, 2019	$	(0.8	)	$	0.4		$	(0.4	)

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Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

5. SEGMENT INFORMATION

The Company’s management has determined that the Company operates in three reportable segments as of September 30, 2019, based upon the type of advertising medium, which segments are television, radio and digital. The Company’s segments results reflect information presented on the same basis that is used for internal management reporting and it is also how the chief operating decision maker evaluates the business.

Television

The Company owns and/or operates 55 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C.

Radio

The Company owns and operates 49 radio stations (38 FM and 11 AM) located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas.

The Company owns and operates a national sales representation division, Entravision Solutions, through which the Company sells advertisements and syndicates radio programming to more than 100 markets across the United States.

Digital

The Company operates a proprietary technology and data platform that delivers digital advertising in various advertising formats and which allows advertisers to reach audiences across a wide range of Internet-connected devices on the Company’s owned and operated digital media sites; the digital media sites of its publisher partners; and on other digital media sites it can access through third-party platforms and exchanges.

Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value contingent consideration, impairment charge, foreign currency (gain) loss and other operating (gain) loss. The Company generated 18% and 21% of its revenue outside the United States during the three-month periods ended September 30, 2019 and September 30, 2018, respectively. The Company generated 17% and 20% of its revenue outside the United States during the nine-month periods ended September 30, 2019 and September 30, 2018, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Nine-Month Period
	Ended September 30,						%			Ended September 30,						%
		2019			2018		Change				2019			2018		Change
Net revenue
Television	$	36,421		$	36,361			0	%	$	112,745		$	107,383			5	%
Radio		14,783			15,783			(6	)%		41,104			47,126			(13	)%
Digital		17,612			22,431			(21	)%		48,888			61,233			(20	)%
Consolidated		68,816			74,575			(8	)%		202,737			215,742			(6	)%
Cost of revenue - digital media		9,942			13,240			(25	)%		26,443			35,249			(25	)%
Direct operating expenses
Television		15,661			15,315			2	%		45,745			45,903			(0	)%
Radio		9,932			10,402			(5	)%		28,968			32,011			(10	)%
Digital		5,214			5,977			(13	)%		14,679			15,930			(8	)%
Consolidated		30,807			31,694			(3	)%		89,392			93,844			(5	)%
Selling, general and administrative expenses
Television		5,497			5,147			7	%		16,945			16,670			2	%
Radio		4,209			4,274			(2	)%		13,380			13,382			(0	)%
Digital		2,751			2,977			(8	)%		9,491			8,313			14	%
Consolidated		12,457			12,398			0	%		39,816			38,365			4	%
Depreciation and amortization
Television		2,613			2,227			17	%		7,435			6,708			11	%
Radio		465			615			(24	)%		1,368			1,855			(26	)%
Digital		1,112			1,252			(11	)%		3,609			3,489			3	%
Consolidated		4,190			4,094			2	%		12,412			12,052			3	%
Segment operating profit (loss)
Television		12,650			13,672			(7	)%		42,620			38,102			12	%
Radio		177			492			(64	)%		(2,612	)		(122	)		2041	%
Digital		(1,407	)		(1,015	)		39	%		(5,334	)		(1,748	)		205	%
Consolidated		11,420			13,149			(13	)%		34,674			36,232			(4	)%
Corporate expenses		6,785			6,913			(2	)%		20,180			19,154			5	%
Change in fair value contingent consideration		-			(114	)		(100	)%		(2,376	)		1,073		*
Impairment charge		9,075			-		*				31,443			-		*
Foreign currency (gain) loss		927			335			177	%		977			531			84	%
Other operating (gain) loss		(1,572	)		(327	)		381	%		(5,165	)		(622	)		730	%
Operating income (loss)		(3,795	)		6,342		*				(10,385	)		16,096		*
Interest expense	$	(3,537	)	$	(3,995	)		(11	)%	$	(10,581	)	$	(11,394	)		(7	)%
Interest income		825			933			(12	)%		2,601			2,885			(10	)%
Dividend income		241			457			(47	)%		747			1,002			(25	)%
Income (loss) before income taxes		(6,266	)		3,737		*				(17,618	)		8,589		*
Capital expenditures
Television	$	7,460		$	6,819					$	21,462		$	10,841
Radio		86			71						667			233
Digital		64			226						304			473
Consolidated	$	7,610		$	7,116					$	22,433		$	11,547
	September 30,			December 31,
Total assets		2019			2018
Television		499,335			487,929
Radio		138,710			121,020
Digital		49,797			81,460
Consolidated	$	687,842		$	690,409

* Percentage not meaningful.

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The Company and Significant Accounting Policies - Carrying Amount of Intangible Assets Not Subject to Amortization (Detail) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018
Indefinite Lived Intangible Assets By Major Class [Line Items]
Intangible assets, Beginning balance		$ 254,598,000
Impairment		(3,500,000)	$ 0
Intangible assets, Ending balance	$ 251,098,000	251,098,000	254,598,000
Television
Indefinite Lived Intangible Assets By Major Class [Line Items]
Intangible assets, Beginning balance		159,019,000
Impairment	(3,500,000)	(3,500,000)
Intangible assets, Ending balance	155,519,000	155,519,000	159,019,000
Radio
Indefinite Lived Intangible Assets By Major Class [Line Items]
Intangible assets, Beginning balance		95,579,000
Intangible assets, Ending balance	$ 95,579,000	$ 95,579,000	$ 95,579,000

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The Company and Significant Accounting Policies - Additional Information (Detail)			3 Months Ended						9 Months Ended		12 Months Ended	27 Months Ended
	May 01, 2019 USD ($)	Nov. 30, 2017 USD ($)	Sep. 30, 2019 USD ($) Location $ / shares shares	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($) shares	Jun. 30, 2018 USD ($) Station	Mar. 31, 2018 USD ($)	Sep. 30, 2019 USD ($) Segment Station Location Market shares	Sep. 30, 2018 USD ($) shares	Dec. 31, 2018 USD ($)	Sep. 30, 2019 USD ($) Location $ / shares shares	Aug. 27, 2019 USD ($)	Jan. 01, 2019 USD ($)	Apr. 11, 2018 USD ($)	Jul. 13, 2017 USD ($)
Accounting Policies [Line Items]
Number of reportable segments | Segment									3
Restricted cash			$ 734,000						$ 734,000		$ 732,000	$ 734,000
Retransmission consent revenue			$ 8,800,000			$ 8,800,000			$ 26,600,000	$ 26,400,000
Number of Class A common stock shares converted | shares									1
Shares of dilutive securities not included in computation of diluted income per share | shares			1,242,354			0			1,081,875	92,979
Impairment to goodwill									$ 27,714,000		0
Impairment to indefinite life intangibles									3,500,000		0
Amount approved under share purchase													$ 45,000,000		$ 30,000,000	$ 15,000,000
Aggregate purchase price of repurchased shares			$ 1,349,000	$ 1,302,000	$ 7,706,000		$ 5,258,000	$ 2,402,000
Unamortized debt issuance costs			2,600,000						2,600,000		2,709,000	2,600,000
Interest income related to available-for-sale securities			825,000			$ 933,000			2,601,000	$ 2,885,000
Agreement amount to sell building			1,000,000
Impairment charges of assets held for sale			200,000
Operating leases right of use asset			45,058,000						45,058,000			45,058,000		$ 45,800,000
Lease liabilities			51,515,000						51,515,000			51,515,000		$ 52,400,000
Available-for-Sale Securities
Accounting Policies [Line Items]
Interest income related to available-for-sale securities			800,000						$ 2,400,000
2017 Credit Facility
Accounting Policies [Line Items]
Agreement date		Nov. 30, 2017
Additional borrowing capacity		$ 100,000,000
First lien net leverage ratio		4.00%
Certain customary events of default, number of business days to default in the payment of interest on borrowings									3 days
Certain customary events of default, number of days default continue for compliance with other agreement									30 days
Certain customary events of default, number of days default continue for financial statement delivery obligations									10 days
Certain customary events of default, indebtedness aggregate amount									$ 15,000,000
Certain customary events of default, failure in payment of final judgments aggregate amount									$ 15,000,000
Certain customary events of default, failure in payment of final judgments aggregate amount period									30 days
Percentage of fee equal to amount of outstanding loan	0.10%
Total fee amount	$ 200,000
2017 Credit Facility | Eurodollar Rate
Accounting Policies [Line Items]
Variable interest rate basis spread on debt		2.75%
2017 Credit Facility | Base Rate Margin
Accounting Policies [Line Items]
Variable interest rate basis spread on debt		1.75%
2017 Credit Facility | Term Loan B Facility
Accounting Policies [Line Items]
Senior Secured debt		$ 300,000,000
Maturity date of revolving credit facility		Nov. 30, 2024
2013 Credit Facility | Term Loan B Facility
Accounting Policies [Line Items]
Carrying value of term loan			241,400,000						$ 241,400,000			241,400,000
Unamortized debt issuance costs			2,600,000						2,600,000			2,600,000
Estimated fair value of term loan			$ 239,100,000						239,100,000			$ 239,100,000
Class A common stock
Accounting Policies [Line Items]
Amount approved under share purchase													$ 15,000,000		$ 15,000,000
Number of shares repurchased | shares			500,000									7,500,000
Average price of repurchased shares | $ / shares			$ 2.84									$ 3.91
Aggregate purchase price of repurchased shares			$ 1,300,000									$ 29,500,000
MEXICO
Accounting Policies [Line Items]
Broadcast license fees prepayment period			20 years
Broadcast license term expiry date			Dec. 31, 2021
Stock Options And Restricted Stock Units
Accounting Policies [Line Items]
Share-based compensation expenses			$ 800,000			1,300,000			2,500,000	3,700,000
Employee Stock Options
Accounting Policies [Line Items]
Share-based compensation expenses										0
Restricted Stock Units
Accounting Policies [Line Items]
Total unrecognized compensation expense related to grants of restricted stock units			2,300,000						$ 2,300,000			2,300,000
Weighted average period for unrecognized compensation expense related to grants of restricted stock units									1 year 2 months 12 days
Univision
Accounting Policies [Line Items]
Payment of sales representation fees to television stations			2,000,000			2,200,000			$ 6,000,000	6,400,000
Amount due from television stations for carriage			4,500,000						4,500,000			$ 4,500,000
Retransmission consent revenue			$ 7,000,000			$ 6,500,000			$ 20,700,000	$ 21,500,000
Common stock percentage held by Univision			11.00%						11.00%			11.00%
UniMas
Accounting Policies [Line Items]
Affiliate advertising minutes per hour for which entity has right to sell									4 minutes 30 seconds
Accounting Standards Update 2016-18
Accounting Policies [Line Items]
Restricted cash			$ 700,000						$ 700,000		$ 700,000	$ 700,000
Minimum | Employee Stock Options
Accounting Policies [Line Items]
Vesting period									1 year
Minimum | Restricted Stock Units
Accounting Policies [Line Items]
Vesting period									1 year
Minimum | Univision
Accounting Policies [Line Items]
Affiliate advertising minutes per hour for which entity has right to sell									4 minutes
Maximum | Employee Stock Options
Accounting Policies [Line Items]
Vesting period									4 years
Maximum | Restricted Stock Units
Accounting Policies [Line Items]
Vesting period									4 years
Television
Accounting Policies [Line Items]
Number of stations owned | Station									55
Impairment to indefinite life intangibles			$ 3,500,000						$ 3,500,000
Number of stations relocated | Station | Station							2
Radio
Accounting Policies [Line Items]
Number of stations owned | Station									49
Radio operations stations, number of location | Location			16						16			16
Advertisements and Syndicate Radio Programming | Minimum
Accounting Policies [Line Items]
Number of markets owned | Market									100
Digital
Accounting Policies [Line Items]
Impairment to goodwill			$ 5,300,000						$ 27,714,000

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Revenues - Summary of Revenues Disaggregated by Major Source (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation Of Revenue [Line Items]
Total revenue	$ 68,816	$ 74,575	$ 202,737	$ 215,742
Broadcast Advertising
Disaggregation Of Revenue [Line Items]
Total revenue	37,345	40,183	109,290	119,425
Digital Advertising
Disaggregation Of Revenue [Line Items]
Total revenue	17,612	22,431	48,888	61,233
Spectrum Usage Rights
Disaggregation Of Revenue [Line Items]
Total revenue	2,669	1,178	11,705	1,809
Retransmission Consent
Disaggregation Of Revenue [Line Items]
Total revenue	8,795	8,432	26,641	26,428
Other
Disaggregation Of Revenue [Line Items]
Total revenue	$ 2,395	$ 2,351	$ 6,213	$ 6,847

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Summary of Expected Future Payments Related to Lease Liabilities

The following table summarizes the expected future payments related to lease liabilities as of September 30, 2019:

(in thousands)
Remainder of 2019	$	2,875
2020		11,613
2021		9,214
2022		7,785
2023		6,175
2024 and thereafter		36,646
Total minimum payments	$	74,308
Less amounts representing interest		(22,793	)
Present value of minimum lease payments	$	51,515

Summary of Lease Payments and Supplemental Non-Cash Disclosures

The following table summarizes lease payments and supplemental non-cash disclosures for the nine-month period ended September 30, 2019:

(in thousands)	Nine-Month Period Ended September 30, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	2,889
Non-cash additions to operating lease assets	$	-

Summary of Future Minimum Rental Commitments for Operating Leases

The tables below summarize our future minimum rental commitments for operating leases as of December 31, 2018:

(in thousands)	Amount
2019	$	10,432
2020		10,677
2021		8,507
2022		7,560
2023		6,137
2024 and thereafter		38,515
	$	81,828

Summary of Components of Lease Expense

The following table summarizes the components of lease expense for the three- and nine-months ended September 30, 2019:

	Three-Month Period		Nine-Month Period
	Ended September 30,		Ended September 30,
(in thousands)	2019		2019
Operating lease cost	$	2,613	$	7,570
Variable lease cost		369		1,159
Short-term lease cost	252		541
Total lease cost	$	3,234	$	9,270

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Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Revenue	$ 68,816	$ 74,575	$ 202,737	$ 215,742
Expenses:
Direct operating expenses (including related parties of $2,048, $2,175, $6,017 and $6,431) (including non-cash stock-based compensation of $74, $156, $324 and $448)	30,807	31,694	89,392	93,844
Selling, general and administrative expenses	12,457	12,398	39,816	38,365
Corporate expenses (including non-cash stock-based compensation of $745, $1,130, $2,130 and $3,263)	6,785	6,913	20,180	19,154
Depreciation and amortization (includes direct operating of $2,888, $2,504, $8,350 and $7,606; selling, general and administrative of $1,134, $1,434, $3,579 and $4,048; and corporate of $168, $156, $483 and $398) (including related parties of $306, $308, $921 and $922)	4,190	4,094	12,412	12,052
Change in fair value contingent consideration		(114)	(2,376)	1,073
Impairment charge	9,075		31,443
Foreign currency (gain) loss	927	335	977	531
Other operating (gain) loss	(1,572)	(327)	(5,165)	(622)
Operating income (loss)	(3,795)	6,342	(10,385)	16,096
Interest expense	(3,537)	(3,995)	(10,581)	(11,394)
Interest income	825	933	2,601	2,885
Dividend income	241	457	747	1,002
Income (loss) before income taxes	(6,266)	3,737	(17,618)	8,589
Income tax benefit (expense)	(5,920)	(1,443)	(9,265)	(3,164)
Income (loss) before equity in net income (loss) of nonconsolidated affiliate	(12,186)	2,294	(26,883)	5,425
Equity in net income (loss) of nonconsolidated affiliate, net of tax	(31)	(79)	(189)	(177)
Net income (loss)	$ (12,217)	$ 2,215	$ (27,072)	$ 5,248
Basic and diluted earnings per share:
Net income (loss) per share, basic and diluted	$ (0.14)	$ 0.02	$ (0.32)	$ 0.06
Cash dividends declared per common share	$ 0.05	$ 0.05	$ 0.15	$ 0.15
Weighted average common shares outstanding, basic	84,765,694	88,852,342	85,404,250	89,371,750
Weighted average common shares outstanding, diluted	84,765,694	90,122,425	85,404,250	90,574,663
Digital Media
Net Revenue	$ 17,612	$ 22,431	$ 48,888	$ 61,233
Expenses:
Cost of revenue	9,942	13,240	26,443	35,249
Direct operating expenses (including related parties of $2,048, $2,175, $6,017 and $6,431) (including non-cash stock-based compensation of $74, $156, $324 and $448)	5,214	5,977	14,679	15,930
Selling, general and administrative expenses	2,751	2,977	9,491	8,313
Depreciation and amortization (includes direct operating of $2,888, $2,504, $8,350 and $7,606; selling, general and administrative of $1,134, $1,434, $3,579 and $4,048; and corporate of $168, $156, $483 and $398) (including related parties of $306, $308, $921 and $922)	$ 1,112	$ 1,252	$ 3,609	$ 3,489

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Subsequent Event

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Event

7. SUBSEQUENT EVENT

Acquisition of Television Station KMBH-TV

On July 31, 2019, the Company entered into an agreement with MBTV Texas Valley LLC to acquire television station KMBH-TV, serving the McAllen, Texas area, for $2.9 million.  The transaction closed on November 7, 2019.  

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Revenues

9 Months Ended

Sep. 30, 2019

Revenue From Contract With Customer [Abstract]

Revenues

3. REVENUES

Revenue Recognition

Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

Broadcast Advertising. Television and radio revenue related to the sale of advertising is recognized at the time of broadcast. Broadcast advertising rates are fixed based on each medium’s ability to attract audiences in demographic groups targeted by advertisers and rates can vary based on the time of day and ratings of the programming airing in that day part.  

Digital Advertising. Revenue from digital advertising primarily consists of two types:

• Display advertisements on websites and mobile applications that are sold based on a cost-per-thousand impressions delivered. These impressions are delivered through the Company’s websites and through third party publishers either through direct relationships with the publishers or through digital advertising exchanges.

• Performance driven advertising whereby the customer engages the Company to drive consumers to perform an action such as the download of a mobile application, the installation of an application, or the first use of an application (typically referred to cost per action or cost per installation).

Broadcast and digital advertising revenue is recognized over time in a series as a single performance obligation as the advertisement, impression or performance advertising is delivered per the insertion order. The Company applies the practical expedient to recognize revenue for each distinct advertising service delivered at the amount the Company has the right to invoice, which corresponds directly to the value a customer has received relative to the Company’s performance. Contracts with customers are short term in nature and billing occurs on a monthly basis with payment due in 30 days. Value added taxes collected concurrent with advertising revenue producing activities are excluded from revenue.  Cash payments received prior to services rendered result in deferred revenue, which is then recognized as revenue when the advertising time or space is actually provided.

Retransmission Consent.  The Company generates revenue from retransmission consent agreements that are entered into with multichannel video programming distributors, or MVPDs. The Company grants the MVPDs access to its television station signals so that they may rebroadcast the signals and charge their subscribers for this programming. Payments are received on a monthly basis based on the number of monthly subscribers.

Retransmission consent revenues are considered licenses of functional intellectual property and are recognized over time utilizing the sale-based or usage-based royalty exception. The Company’s performance obligation is to provide the licensee access to our intellectual property. MVPD subscribers receive and consume the content monthly as the television signal is delivered.

Spectrum Usage Rights. The Company generates revenue from agreements associated with its television stations’ spectrum usage rights from a variety of sources, including but not limited to agreements with third parties to utilize excess spectrum for the broadcast of their multicast networks; charging fees to accommodate the operations of third parties, including moving channel positions or accepting interference with broadcasting operations; and modifying and/or relinquishing spectrum usage rights while continuing to broadcast through channel sharing or other arrangements. 

Revenue generated by spectrum usage rights agreements are recognized over the period of the lease or when the Company has relinquished all or a portion of its spectrum usage rights for a station or has relinquished its rights to operate a station on the existing channel free from interference.

Other Revenue. The Company generates other revenues that are related to its broadcast operations which primarily consist of representation fees earned by the Company’s radio national representation firm, talent fees for the Company’s on-air personalities, ticket and concession sales for radio events, rent from tenants of the Company’s owned facilities, barter revenue and revenue generated under joint sales agreements.  

In the case of representation fees, the Company does not control the distinct service, the commercial advertisement, prior to delivery and therefore recognizes revenue on a net basis.  Similarly for joint service agreements, the Company does not own the station providing the airtime and therefore recognizes revenue on a net basis.  In the case of talent fees, the on-air personality is an employee of the Company and therefore the Company controls the service provided and recognizes revenue gross with an expense for fees paid to the employee.

Practical Expedients and Exemptions

The Company does not disclose the value of unsatisfied performance obligations when (i) contracts have an original expected length of one year or less, which applies to effectively all advertising contracts, and (ii) variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property, which applies to retransmission consent revenue.  

The Company applies the practical expedient to expense contract acquisition costs, such as sales commissions generated either by internal direct sales employees or through third party advertising agency intermediaries, when incurred because the amortization period is one year or less. These costs are recorded within direct operating expenses.

Disaggregated Revenue

The following table presents our revenues disaggregated by major source for the three- and nine-month periods ended (in thousands):

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Broadcast advertising	$	37,345	$	40,183	$	109,290	$	119,425
Digital advertising		17,612		22,431		48,888		61,233
Spectrum usage rights		2,669		1,178		11,705		1,809
Retransmission consent		8,795		8,432		26,641		26,428
Other		2,395		2,351		6,213		6,847
Total revenue	$	68,816	$	74,575	$	202,737	$	215,742

Contracts are entered into directly with customers or through an advertising agency that represents the customer.  Sales of advertising to customers or agencies within a station’s designated market area (“DMA”) are referred to as local revenue, whereas sales from outside the station’s DMA are referred to as national revenue. The following table further disaggregates the Company’s broadcast advertising revenue by sales channel for the three- and nine-month periods ended (in thousands):

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Local direct	$	6,781	$	6,750	$	19,292	$	20,725
Local agency		14,655		15,267		43,321		45,381
National agency		15,909		18,166		46,677		53,319
Total  revenue	$	37,345	$	40,183	$	109,290	$	119,425

Deferred Revenues

The Company records deferred revenues when cash payments are received or due in advance of its performance, including amounts which are refundable. The decrease in the deferred revenue balance for the nine-month period ended September 30, 2019 is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenues recognized that were included in the deferred revenue balance as of December 31, 2018.

The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is not significant, typically 30 days. For certain customer types, the Company requires payment before the services are delivered to the customer.

(in thousands)	December 31, 2018		Increase	Decrease *		September 30, 2019
Deferred revenue	$	2,759	1,177	(2,759	)	$	1,177

* The amount disclosed in the decrease column reflects revenue that has been recorded in the nine-month period ended September 30, 2019.

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ (27,072)	$ 5,248
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	12,412	12,052
Impairment charge	31,443
Deferred income taxes	6,941	1,942
Non-cash interest	715	828
Amortization of syndication contracts	374	526
Payments on syndication contracts	(419)	(516)
Equity in net (income) loss of nonconsolidated affiliate	189	177
Non-cash stock-based compensation	2,454	3,711
(Gain) loss on disposal of property and equipment	158
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	10,703	8,578
(Increase) decrease in prepaid expenses and other assets	(844)	(7,210)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(13,568)	(2,839)
Net cash provided by operating activities	23,486	22,497
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		33
Purchases of property and equipment	(21,182)	(12,277)
Purchases of intangible assets		(3,153)
Purchase of a businesses, net of cash acquired		(3,522)
Purchases of marketable securities	(1,400)	(159,403)
Proceeds from marketable securities	27,881	25,000
Purchases of investments	(300)	(970)
Deposits on acquisition	(147)
Net cash provided by (used in) investing activities	4,852	(154,292)
Cash flows from financing activities:
Proceeds from stock option exercises		77
Tax payments related to shares withheld for share-based compensation plans	(773)	(2,239)
Payments on long-term debt	(2,250)	(2,250)
Dividends paid	(12,767)	(13,403)
Repurchase of Class A common stock	(10,357)	(7,660)
Payment of contingent consideration		(2,015)
Payments of capitalized debt costs	(225)
Net cash used in financing activities	(26,372)	(27,490)
Effect of exchange rates on cash, cash equivalents and restricted cash	8	(11)
Net increase (decrease) in cash, cash equivalents and restricted cash	1,974	(159,296)
Cash, cash equivalents and restricted cash:
Beginning	47,465	261,854
Ending	49,439	102,558
Cash payments for:
Interest	9,866	10,566
Income taxes	2,324	1,222
Supplemental disclosures of non-cash investing and financing activities:
Capital expenditures financed through accounts payable, accrued expenses and other liabilities	1,980	950
Contingent consideration included in accounts payable, accrued expenses and other liabilities	$ 5,743	$ 11,166

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Leases - Additional Information (Detail) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Lessee Lease Description [Line Items]
Remaining term description of leases		The Company’s existing leases have remaining terms of less than one year up to 32 years.
Weighted average remaining lease term	11 years 4 months 24 days	11 years 4 months 24 days
Weighted average discount rate	6.30%	6.30%
Lease cost	$ 3,234	$ 9,270
Corporate Expenses
Lessee Lease Description [Line Items]
Lease cost	200	600
Direct Operating Expenses
Lessee Lease Description [Line Items]
Lease cost	1,600	4,300
Selling, General and Administrative Expenses
Lessee Lease Description [Line Items]
Lease cost	$ 1,400	$ 4,400
Maximum
Lessee Lease Description [Line Items]
Remaining term of leases		32 years

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Leases - Summary of Components of Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 2,613	$ 7,570
Variable lease cost	369	1,159
Short-term lease cost	252	541
Total lease cost	$ 3,234	$ 9,270

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The Company and Significant Accounting Policies - Summary of Amortized Cost and Unrealized (Gains) Losses of Available for Sale Securities (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Certificates of Deposit
Amortized Cost
Due within a year	$ 3,766
Due after one year through five years	3,036
Total	6,802
Unrealized gains (losses)
Due within a year	15
Due after one year through five years	24
Total	39
Corporate Bonds
Amortized Cost
Due within a year	45,000
Due after one year through five years	55,096
Total	100,096
Unrealized gains (losses)
Due within a year	168
Due after one year through five years	381
Total	$ 549

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The Company and Significant Accounting Policies - Reconciliation of Basic and Diluted Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share Basic And Diluted [Abstract]
Net income (loss)	$ (12,217)	$ (16,279)	$ 1,424	$ 2,215	$ 4,840	$ (1,808)	$ (27,072)	$ 5,248
Denominator:
Weighted average common shares outstanding, basic	84,765,694			88,852,342			85,404,250	89,371,750
Basic earnings per share:
Net income (loss) per share	$ (0.14)			$ 0.02			$ (0.32)	$ 0.06
Denominator:
Weighted average common shares outstanding, basic	84,765,694			88,852,342			85,404,250	89,371,750
Dilutive securities:
Stock options and restricted stock units				1,270,083				1,202,913
Weighted average common shares outstanding, diluted	84,765,694			90,122,425			85,404,250	90,574,663
Diluted earnings per share:
Net income (loss) per share	$ (0.14)			$ 0.02			$ (0.32)	$ 0.06

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The Company and Significant Accounting Policies - Fair Value Assets and Liabilities Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Contingent Consideration	$ 5.7	$ 8.1
Money Market Account
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	34.7	34.6
Certificates of Deposit
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	6.8	8.2
Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	100.6	124.2
Level 2 | Money Market Account
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	34.7	34.6
Level 2 | Certificates of Deposit
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	6.8	8.2
Level 2 | Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	100.6	124.2
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Contingent Consideration	$ 5.7	$ 8.1

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The Company and Significant Accounting Policies - Summary of Non-Vested Restricted Stock Units Granted (Detail) - Restricted Stock Units shares in Thousands	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number Granted | shares	178
Weighted-Average Fair Value | $ / shares	$ 3.14

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. COMMITMENTS AND CONTINGENCIES

The Company is subject to various outstanding claims and other legal proceedings that may arise in the ordinary course of business. In the opinion of management, any liability of the Company that may arise out of or with respect to these matters will not materially adversely affect the financial position, results of operations or cash flows of the Company.  

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The Company and Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

The Company and Significant Accounting Policies

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

The Company 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, the Company’s digital segment, whose operations are located primarily in Spain, Mexico, Argentina and other countries in Latin America, reaches a global market. Entravision’s operations encompass integrated marketing and media solutions, comprised of television, radio and digital properties and data analytics services. The Company’s management has determined that the Company operates in three reportable segments as of September 30, 2019, based upon the type of advertising medium, which segments are television, radio and digital. As of September 30, 2019, the Company owns and/or operates 55 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. Radio operations consist of 49 operational radio stations, 38 FM and 11 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 syndicated radio programming to more than 100 markets across the United States. The Company operates a proprietary technology and data platform that delivers digital advertising in various advertising formats that allows advertisers to reach audiences across a wide range of Internet-connected devices on its owned and operated digital media sites; the digital media sites of its publisher partners; and on other digital media sites it can access through third-party platforms and exchanges.

Restricted Cash

As of September 30, 2019 and December 31, 2018, 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 stations are Univision- or UniMás-affiliated television stations. The Company’s network affiliation agreements with Univision provide certain of its 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 Company’s Univision- and UniMás-affiliate television stations, and it pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on the Company’s Univision- and UniMás-affiliate television stations. During the three-month periods ended September 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the nine-month periods ended September 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $6.0 million and $6.4 million, respectively.

The Company also generates revenue under two marketing and sales agreements with Univision, which gives the Company 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 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, 2019, the amount due to the Company from Univision was $4.5 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During the three-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $8.8 and $8.4 million, respectively, of which $7.0 million and $6.5 million, respectively, relate to the Univision proxy agreement. During the nine-month periods ended September 30, 2019 and 2018, retransmission consent revenue accounted for approximately $26.6 million and $26.4 million, respectively, of which $20.7 million and $21.5 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 Class U common stock held by Univision has limited voting rights and does not include the right to elect directors. 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, the Company will not, without the consent of Univision, merge, consolidate or enter into another business combination, dissolve or liquidate the Company or dispose of any interest in any Federal Communications Commission, or FCC, license for any of its Univision-affiliated television stations, among other things. Each share of Class U common stock is automatically convertible into one share of Class A common stock (subject to adjustment for stock splits, dividends or combinations) in connection with any transfer to a third party that is not an affiliate of Univision.

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 stock options and restricted stock units was $0.8 million and $1.3 million for the three-month periods ended September 30, 2019 and 2018, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $2.5 million and $3.7 million for the nine-month periods ended September 30, 2019 and 2018, 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.

As of September 30, 2019, 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, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

As of September 30, 2019, there was approximately $2.3 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 1.2 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):

	Three-Month Period					Nine-Month Period
	Ended September 30,					Ended September 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06
Diluted earnings per share:
Numerator:
Net income (loss)	$	(12,217	)	$	2,215	$	(27,072	)	$	5,248
Denominator:
Weighted average common shares outstanding		84,765,694			88,852,342		85,404,250			89,371,750
Dilutive securities:
Stock options and restricted stock units		-			1,270,083		-			1,202,913
Diluted shares outstanding		84,765,694			90,122,425		85,404,250			90,574,663
Per share:
Net income (loss) per share	$	(0.14	)	$	0.02	$	(0.32	)	$	0.06

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.

For the three- and nine-month periods ended September 30, 2019, 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 1,242,354 and 1,081,875 equivalent shares of dilutive securities for the three- and nine-month periods ended September 30, 2019, respectively.

For the three-month period ended September 30, 2018 there were no dilutive securities excluded from the computation of diluted income per share. For the nine-month period ended September 30, 2018, a total 92,979 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.

Goodwill and Intangible Assets 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 of the last annual testing date, October 1, 2018, and as noted in the Annual Report on Form 10-K for the year ended December 31, 2018, the Company determined there was no impairment to goodwill and indefinite life intangibles for any of its reporting units.

Due to lower than anticipated performance of the Company’s digital reporting unit in the second quarter of 2019, changes in key personnel, and updated internal forecasts of future performance of the digital reporting unit, the Company determined that triggering events had occurred during the second quarter of 2019 that required an interim impairment assessment for its digital reporting unit. Additionally, due to further deterioration in performance and further updated internal forecasts of future performance of the digital reporting unit in the third quarter of 2019, the Company determined that triggering events had also occurred during the third quarter of 2019 that required an additional interim impairment assessment for its digital reporting unit in the amount set forth below.

The Company conducted a review of the fair value of the digital reporting unit in each of the second and third quarters of 2019. The estimated fair value of the digital goodwill was determined by using a combination of a market approach and an income approach. The market approach estimates fair value by applying sales, earnings and cash flow multiples to the reporting unit’s operating performance. The multiples are derived from comparable publicly-traded companies with similar operating and investment characteristics to the Company’s digital reporting unit. The market approach requires the Company to make a series of assumptions, such as selecting comparable companies and comparable transactions and transaction premiums.

The income approach estimates fair value based on the estimated future cash flows of the digital reporting unit, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk of the reporting unit. The income approach also requires the Company to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. The Company estimated the discount rate on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the digital media industry. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company’s digital reporting unit. The Company also estimated the terminal value multiple based on comparable publicly-traded companies in the digital media industry. The Company estimated its revenue projections and profit margin projections based on internal forecasts about future performance.

Based on the assumptions and estimates described above, the Company concluded that the digital reporting unit carrying value exceeded its fair value, resulting in a goodwill impairment charge of $5.3 million and $27.7 million for the three- and nine-month periods ended September 30, 2019, respectively.

The carrying amount of goodwill for each of the Company’s operating segments for the nine-months ended September 30, 2019 is as follows (in thousands):

	December 31, 2018		Currency			Impairment			September 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(27,714	)		5,962
Consolidated	$	74,292	$	(67	)	$	(27,714	)	$	46,511

During the third quarter, as a result of changes in regulations in Mexico, the Company was required to prepay the license fees for its Mexico broadcast licenses for a period of 20 years. The Company elected not to make the required prepayment for station XHRIO-TV serving the Matamoros/Harlingen-Weslaco-Brownsville-McAllen market before the deadline to make such prepayment.  As a result, the Company currently expects to stop broadcasting on this station at the end of the current license term, which expires on December 31, 2021.  As such, the Company determined that triggering events had occurred during the third quarter of 2019 that required an interim impairment assessment for this broadcast license.

The Company conducted a review of this television indefinite life intangible asset by using an income approach. The income approach estimates fair value based on the estimated future cash flows of the station that a hypothetical buyer would expect to generate, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk. The income approach requires the Company to make a series of assumptions, such as discount rates, revenue projections, and profit margin projections. The Company estimates the discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the television industry. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company. The Company estimated the revenue projections and profit margin projections based on industry information for an average station within the market. The information includes such things as estimated market share, estimated capital start-up costs, population, household income, retail sales and other expenditures that would influence advertising expenditures.

Based on the assumptions and estimates described above, the Company concluded that the license carrying value exceeded its fair value, resulting in an impairment charge of $3.5 million for the three- and nine-month periods ended September 30, 2019.

The carrying amount of intangible assets not subject to amortization for each of the Company’s operating segments for the nine-months ended September 30, 2019 is as follows (in thousands):

	December 31, 2018		Impairment			September 30, 2019
Television	$	159,019	$	(3,500	)	$	155,519
Radio		95,579		-			95,579
Digital	-			-		-
Consolidated	$	254,598	$	(3,500	)	$	251,098

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.

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

During the three-month period ended September 30, 2019, the Company repurchased 0.5 million shares of Class A common stock at an average price of $2.84, for an aggregate purchase price of approximately $1.3 million. As of September 30, 2019, the Company has repurchased a total of approximately 7.5 million shares of Class A common stock, for an aggregate purchase price of approximately $29.5 million, or an average price per share of $3.91, since the beginning of the share repurchase program. As of September 30, 2019, all such repurchased shares were retired.

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 (“2013 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 Eurodollar 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 the Credit Parties 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. Pursuant to this amendment, the lenders:

i. waived any events of default that may have arisen under the 2017 Credit Agreement in connection with the Company’s failure to timely deliver audited financial statements for fiscal year 2018, and

ii. amended the 2017 Credit Agreement, giving the Company until May 31, 2019 to deliver the 2018 audited financial statements.

On May 7, 2019, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which Annual Report contained the 2018 audited financial statements. By filing its Annual Report on Form 10-K prior to May 31, 2019, the Company believes that it has complied with the affirmative covenants in the amendment to the 2017 Credit Agreement regarding delivery of the 2018 audited financial statements.

Pursuant to this amendment, the Company agreed to pay to the lenders consenting to this amendment a fee equal to 0.10% of the aggregate principal amount of the outstanding loans held by such lenders under the 2017 Credit Agreement as of May 1, 2019. This fee totaled approximately $0.2 million.

The carrying amount of the Term Loan B Facility as of September 30, 2019 was $241.4 million, net of $2.6 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of September 30, 2019 was $239.1 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 Unaudited Consolidated Balance Sheets (in millions):

	September 30, 2019
	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	$	34.7	$	-	$	34.7		$	-
Certificates of deposit	$	6.8	$	-	$	6.8		$	-
Corporate bonds	$	100.6	$	-	$		100.6	$	-
Liabilities:
Contingent Consideration	$	5.7	$	-	$		-	$	5.7
	December 31, 2018
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
	Sheet		Level 1		Level 2			Level 3
Assets:
Money market account	$	34.6	$	-	$	34.6		$	-
Certificates of deposit	$	8.2	$	-	$	8.2		$	-
Corporate bonds	$	124.2	$	-	$	124.2		$	-
Liabilities:
Contingent Consideration	$	8.1	$	-	$	-		$	8.1

As of September 30, 2019, 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 all 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 Unaudited Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income.

As of September 30, 2019, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands):

	Certificates of Deposit				Corporate Bonds
	Amortized Cost		Unrealized gains (losses)		Amortized Cost		Unrealized gains (losses)
Due within a year	$	3,766	$	15	$	45,000	$	168
Due after one year through five years		3,036		24		55,096		381
Total	$	6,802	$	39	$	100,096	$	549

The Company periodically reviews its available for sale securities for other-than-temporary impairment. For the three- and nine-month periods ended September 30, 2019, the Company did not consider any of its securities to be other-than-temporarily impaired and, accordingly, did not recognize any impairment losses.

Included in interest income for the three- and nine-month periods ended September 30, 2019 was interest income related to the Company’s available-for-sale securities of $0.8 and $2.4 million, respectively.

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, 2019 (in millions):

	Foreign Currency Translation			Marketable Securities			Total
Accumulated other comprehensive income (loss) as of December 31, 2018	$	(0.4	)	$	(1.0	)	$	(1.4	)
Other comprehensive income (loss)		-			1.0			1.0
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		-			0.8			0.8
Accumulated other comprehensive income (loss) as of March 31, 2019		(0.4	)		(0.2	)		(0.6	)
Other comprehensive income (loss)		(0.3	)		0.7			0.4
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		(0.3	)		0.5			0.2
Accumulated other comprehensive income (loss) as of June 30, 2019		(0.7	)		0.3			(0.4	)
Other comprehensive income (loss)		(0.1	)		0.2			0.1
Income tax (expense) benefit		-			(0.1	)		(0.1	)
Other comprehensive income (loss), net of tax		(0.1	)		0.1			-
Accumulated other comprehensive income (loss) as of September 30, 2019	$	(0.8	)	$	0.4		$	(0.4	)

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 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 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.

During the second quarter of 2018, the Company relocated the operations of two of its television stations in the Palm Springs, California market and management approved the sale of the vacated building.  The building and related improvements met the criteria for classification as assets held for sale and their carrying value is presented separately in the consolidated balance sheet. During the third quarter of 2019, the Company entered into an agreement to sell the building for $1.0 million. As such, the Company recorded an impairment charge of $0.2 million to reflect the fair market value of the assets held for sale.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is in the process of assessing the impact of ASU 2018-15 on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement,” (“ASU No. 2018-13”), which modifies the disclosure requirements on fair value measurements, including the consideration of costs and benefits. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is in the process of assessing the impact of ASU 2018-13 on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), whichamends current guidance on other-than-temporary impairments of available-for-sale debt securities. This amended standard requires the use of an allowance to record estimated credit losses on these assets when the fair value is below the amortized cost of the asset. This standard also removes the evaluation of the length of time that a security has been in a loss position to avoid recording a credit loss. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is finalizing its assessment of the impact of ASU 2016-13 on its Consolidated Financial Statements.

Newly Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases transparency and comparability among organizations relating to leases. Lessees are required to recognize a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. The FASB retained a dual model for lease classification, requiring leases to be classified as finance or operating leases to determine recognition in the earnings statement and cash flows; however, substantially all leases are required to be recognized on the balance sheet. ASU 2016-02 also requires quantitative and qualitative disclosures regarding key information about leasing arrangements. ASU 2016-02 is effective using a modified retrospective approach for fiscal years and interim periods beginning after December 15, 2018. This standard allowed entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The standard also provides for certain practical expedients. 

The Company adopted ASU 2016-02 in the first quarter of 2019. As permitted under the transition guidance of the standard, the Company applied the guidance on a prospective basis as of the adoption date.  As a result, prior period amounts were not adjusted and continue to be reported in accordance with accounting guidance under ASC 840.  

The Company elected the package of practical expedients such that the Company did not reassess whether any expired or existing contracts are or contain leases.  In addition, the Company did not reassess prior conclusions reached for lease classification and did not reassess initial direct costs for existing leases.

Based on the Company’s assessment, the adoption of the guidance resulted in a material impact on the Company’s consolidated balance sheet.  However, the impact to the Company’s results of operations and cash flows through September 30, 2019 are not considered material.  As of the adoption date, the Company recognized right-of-use (“ROU”) assets of $45.8 million and lease liabilities of $52.4 million.  The difference between the ROU assets and lease liabilities is attributed to deferred rent and lease incentives which were combined and presented net within the ROU assets.  Refer to Note 4 for additional information.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-based Payment Accounting, which supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees and expands the scope of ASC Topic 718, “Compensation—Stock Compensation” to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The amendments in ASU 2018-07 are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted ASU 2018-07 in the first quarter of 2019, which adoption did not have a material impact on our condensed consolidated financial statements and related disclosures.

In August 2018, the SEC issued a final rule to amend certain disclosure requirements that were redundant, duplicative, overlapping or superseded by other SEC disclosure requirements, US GAAP or IFRS.2 The amendments generally eliminated or otherwise reduced certain disclosure requirements of various SEC rules and regulations. However, in some cases, the amendments require additional information to be disclosed, including changes in stockholders’ equity in interim periods. The Company adopted this rule in the first quarter of 2019 and included a statement of stockholders’ equity beginning in its Quarterly Report on Form 10-Q for the period ended March 31, 2019.

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Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. BASIS OF PRESENTATION

Presentation

The consolidated financial statements included herein have been prepared by Entravision Communications Corporation (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2019 or any other future period.

Certain amounts in the Company’s prior year period consolidated financial statements and notes to the financial statements have been reclassified to conform to current period presentation.

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Revenues (Tables)

9 Months Ended

Sep. 30, 2019

Revenue From Contract With Customer [Abstract]

Summary of Disaggregation of Revenue by Major Source and by Sales Channel

The following table presents our revenues disaggregated by major source for the three- and nine-month periods ended (in thousands):

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Broadcast advertising	$	37,345	$	40,183	$	109,290	$	119,425
Digital advertising		17,612		22,431		48,888		61,233
Spectrum usage rights		2,669		1,178		11,705		1,809
Retransmission consent		8,795		8,432		26,641		26,428
Other		2,395		2,351		6,213		6,847
Total revenue	$	68,816	$	74,575	$	202,737	$	215,742

The following table further disaggregates the Company’s broadcast advertising revenue by sales channel for the three- and nine-month periods ended (in thousands):

	Three-Month Period				Nine-Month Period
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Local direct	$	6,781	$	6,750	$	19,292	$	20,725
Local agency		14,655		15,267		43,321		45,381
National agency		15,909		18,166		46,677		53,319
Total  revenue	$	37,345	$	40,183	$	109,290	$	119,425

Summary of Deferred Revenue

(in thousands)	December 31, 2018		Increase	Decrease *		September 30, 2019
Deferred revenue	$	2,759	1,177	(2,759	)	$	1,177

* The amount disclosed in the decrease column reflects revenue that has been recorded in the nine-month period ended September 30, 2019.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 04, 2019
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Trading Symbol	EVC
Entity Registrant Name	ENTRAVISION COMMUNICATIONS CORP
Entity Central Index Key	0001109116
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	1-15997
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-4783236
Entity Address, Address Line One	2425 Olympic Boulevard
Entity Address, Address Line Two	Suite 6000 West
Entity Address, City or Town	Santa Monica
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90404
City Area Code	310
Local Phone Number	447-3870
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Class A Common stock
Security Exchange Name	NYSE
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		60,268,985
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		14,927,613
Class U common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		9,352,729

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Consolidated Statements of Operations (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Direct operating expenses	$ 30,807	$ 31,694	$ 89,392	$ 93,844
Non-cash stock-based compensation			2,454	3,711
Depreciation and amortization	4,190	4,094	12,412	12,052
Related Parties
Direct operating expenses	2,048	2,175	6,017	6,431
Depreciation and amortization	306	308	921	922
Direct Operating Expenses
Non-cash stock-based compensation	74	156	324	448
Depreciation and amortization	2,888	2,504	8,350	7,606
Corporate Expenses
Non-cash stock-based compensation	745	1,130	2,130	3,263
Depreciation and amortization	168	156	483	398
Selling, General and Administrative Expenses
Depreciation and amortization	$ 1,134	$ 1,434	$ 3,579	$ 4,048

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Leases - Summary of Expected Future Payments Related to Lease Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
Leases [Abstract]
Remainder of 2019	$ 2,875
2020	11,613
2021	9,214
2022	7,785
2023	6,175
2024 and thereafter	36,646
Total minimum payments	74,308
Less amounts representing interest	(22,793)
Present value of minimum lease payments	$ 51,515	$ 52,400

XML

Segment Information - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019 Segment Station Market	Sep. 30, 2018
Segment Reporting Information [Line Items]
Number of reportable segments | Segment			3
Percentage of revenue generated from outside the United States	18.00%	21.00%	17.00%	20.00%
Television
Segment Reporting Information [Line Items]
Number of stations owned			55
Radio
Segment Reporting Information [Line Items]
Number of stations owned			49
Advertisements and Syndicates Radio Programming | Minimum
Segment Reporting Information [Line Items]
Number of markets owned | Market			100