XML 26 R16.htm IDEA: XBRL DOCUMENT

The Company and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

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

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

On March 11, 2020, the World Health Organization (the “WHO”) declared COVID-19 a pandemic. On March 13, 2020, a Presidential proclamation was issued declaring a national emergency in the United States as a result of COVID-19.

The COVID-19 pandemic has affected the Company’s business and, subject to the extent and duration of the pandemic and the continuing economic crisis that has resulted from the pandemic, is anticipated to continue to affect the Company’s business, from both an operational and financial perspective, in future periods.

In the quarter ended September 30, 2020, the global, U.S. and local economies declined at a slower rate than during the quarter ended June 30, 2020. With the exception of political advertising as the Company enters the height of the election cycle, the Company continued to experience significant cancellations of advertising and a significant decrease in new advertising placements in its television segment and especially its radio segment that the Company had begun to experience during the last half of March 2020, although the Company experienced this decrease at a slower rate than it did during the quarter ended June 30, 2020. The impact on the Company’s radio segment continues to be significantly greater than that on its television segment because radio audiences declined at a much greater rate as a result of fewer people commuting to work or driving in general as a result of a combination of lockdown, shelter-in-place, stay-at-home or similar orders that were still in effect in various parts of the United States during the quarter ended September 30, 2020, and changes in personal behavior regardless of whether such lockdown, shelter-in-place, stay-at-home or similar orders were still in effect in certain parts of the United States during this period.

To partially address this situation, the Company has continued to significantly reduce some of its advertising rates, primarily in its radio segment, although the rate of decrease in the Company’s advertising rates is at a slower pace than it was during the quarter ended June 30, 2020 and has been somewhat moderated by political advertising in the Company’s inventory during the election cycle. the Company has also eased credit terms for certain of its advertising clients to help them manage their own cash flow and address other financial needs.

Primarily during the quarter ended March 31, 2020 and early in the quarter ended June 30, 2020, the Company engaged in a small number of layoffs and significant number of furloughs of employees as a result of the pandemic. Subsequent to the end of the quarter ended September 30, 2020 the Company terminated these previously furloughed employees. The Company does not expect that severance expense associated with these terminations will be material. The Company will continue to monitor this situation closely and may institute such further layoffs or furloughs as it may feel are appropriate at a future date. The Company has elected to defer the employer portion of the social security payroll tax (6.2%) as outlined within the Coronavirus Aid, Relief and Economic Security Act of 2020, commonly known as the CARES Act. The deferral is effective from March 27, 2020 through December 31, 2020. The deferred amount will be paid in two installments and the amount will be considered timely paid if 50% of the deferred amount is paid by December 31, 2021 and the remainder by December 31, 2022.

In order to preserve cash during this period, the Company has instituted certain cost reduction measures. On March 26, 2020, the Company suspended repurchases under its share repurchase program. Effective April 16, 2020, the Company instituted a 2.5%-22.5% reduction in salaries company-wide, depending on the amount of then-current compensation. Effective May 16, 2020, the Company suspended company matching of employee contributions to their 401(k) retirement plans. The Company also reduced its dividend by 50% beginning in the second quarter of 2020, and it may do so in future periods. Additionally, effective May 28, 2020, the Board of Directors decreased its annual non-employee director fees by 20% for the Board year ending at the 2021 shareholders meeting. The Company will continue to monitor all of these actions closely in light of current and changing conditions and may institute such additional actions as it may feel are appropriate at a future date.

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

Restricted Cash

As of September 30, 2020 and December 31, 2019, 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 network affiliation agreement with Univision provides certain of the Company’s owned stations the exclusive right to broadcast Univision’s primary network and UniMás network programming in their respective markets. Under the network affiliation agreement, the Company retains the right to sell no less than four minutes per hour of the available advertising time on stations that broadcast Univision network programming, and the right to sell approximately four and a half minutes per hour of the available advertising time on stations that broadcast UniMás network programming, subject to adjustment from time to time by Univision.

Under the network affiliation agreement, Univision acts as the Company’s exclusive third-party sales representative for the sale of certain national advertising on the Univision- and UniMás-affiliate television stations, and the Company pays certain sales representation fees to Univision relating to sales of all advertising for broadcast on its Univision- and UniMás-affiliate television stations. During the three-month periods ended September 30, 2020 and 2019, the amount the Company paid Univision in this capacity was $2.3 million and $2.0 million, respectively. During the nine-month periods ended September 30, 2020 and 2019, the amount the Company paid Univision in this capacity was $5.9 and $6.0 million, respectively.

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

Under the Company’s 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, 2020, the amount due to the Company from Univision was $6.3 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, 2020 and 2019, retransmission consent revenue accounted for approximately $9.1 and $8.8 million, respectively, of which $6.6 million and $7.0 million, respectively, relate to the Univision proxy agreement. During the nine-month periods ended September 30, 2020 and 2019, retransmission consent revenue accounted for approximately $28.0 million and $26.6 million, respectively, of which $20.3 million and $20.7 million, respectively, relate to the Univision proxy agreement. The term of the proxy agreement extends with respect to any MVPD for the length of the term of any retransmission consent agreement in effect before the expiration of the proxy agreement.

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

Stock-Based Compensation

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

Stock-based compensation expense related to grants of stock options and restricted stock units was $0.8 million for each of the three-month periods ended September 30, 2020 and 2019. Stock-based compensation expense related to grants of stock options and restricted stock units was $2.4 million and $2.5 million for the nine-month periods ended September 30, 2020 and 2019, respectively.

Stock Options

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

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

Restricted Stock Units

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

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



	Nine-month Period
	Ended September 30, 2020
	Number Granted		Weighted Average Fair Value
Restricted stock units		287	$	1.67

As of September 30, 2020, there was approximately $2.0 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.2 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,
	2020		2019			2020			2019
Basic earnings per share:
Numerator:
Net income (loss)	$	9,016	$	(12,217	)	$	(24,238	)	$	(27,072	)

Denominator:
Weighted average common shares outstanding		84,185,728		84,765,694			84,208,924			85,404,250

Per share:
Net income (loss) per share	$	0.11	$	(0.14	)	$	(0.29	)	$	(0.32	)

Diluted earnings per share:
Numerator:
Net income (loss)	$	9,016	$	(12,217	)	$	(24,238	)	$	(27,072	)

Denominator:
Weighted average common shares outstanding		84,185,728		84,765,694			84,208,924			85,404,250
Dilutive securities:
Stock options and restricted stock units		677,292		-			-			-
Diluted shares outstanding		84,863,020		84,765,694			84,208,924			85,404,250

Per share:
Net income (loss) per share	$	0.11	$	(0.14	)	$	(0.29	)	$	(0.32	)

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

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.

Impairment

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

Goodwill and indefinite life intangibles are not amortized but are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that the assets might be impaired. The annual testing date is October 1. As noted in the Annual Report on Form 10-K for the year ended December 31, 2019, the Company recorded impairment charges of goodwill in its digital reporting unit totaling $27.7 million during the year ended December 31, 2019. In addition, the Company recorded impairment charges of FCC licenses in its television and radio reporting units in the amount of $4.0 million and $0.2 million, respectively, during the year ended December 31, 2019.

Due to the continuing economic crisis resulting from the COVID-19 pandemic, the Company experienced a decline in performance across all its reporting units beginning late in the first quarter of 2020. Additionally, the digital reporting unit was already facing declining results prior to the onset of the pandemic, caused by continuing competitive pressures and rapid changes in the digital advertising industry, which then further accelerated late in the first quarter of 2020 as a result of the economic crisis brought about from the pandemic. The results of the television and radio reporting units prior to the onset of the pandemic and the resulting economic crisis were exceeding internal budgets, driven in large part by political advertising revenue, but declined sharply in the last few weeks of the first quarter of 2020. As a result, the Company updated its internal forecasts of future performance and determined that triggering events had occurred during the first quarter of 2020 that required interim impairment assessments. The Company determined that no triggering events had occurred during the second or third quarters of 2020 that required interim impairment assessments events.

The Company conducted a review of the fair value of the television and digital reporting units in the first quarter of 2020. Although the radio unit also experienced declines, there is no goodwill in the radio reporting unit. The estimated fair value of each reporting unit assessed 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 reporting units. 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 each 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 television and digital media industries. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company’s reporting units. The Company also estimated the terminal value multiple based on comparable publicly-traded companies in the television and digital media industries. 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 $0.8 million for the three-month period ended March 31, 2020. The fair value of the Company’s television reporting unit exceeded its carrying value by 28%, resulting in no impairment charge. No impairment charges of goodwill were recorded during the second or third quarters of 2020.

The carrying amount of goodwill for each of the Company’s operating segments for the nine-month period ended September 30, 2020 is as follows (in thousands):

		December 31, 2019		Impairment			September 30, 2020
Television	$	40,549		-		$	40,549
Radio		-		-			-
Digital		5,962		(800	)		5,162
Consolidated	$	46,511	$	(800	)	$	45,711

The Company also conducted a review of certain of the indefinite life intangible assets in its television and radio reporting units using an income approach during the three-month period ended March 31, 2020. 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, as adjusted by the Company to reflect current market conditions. 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 carrying values of certain FCC licenses exceeded their fair values. As a result, the Company recorded impairment charges of FCC licenses in its television and radio reporting units in the amount of $23.5 million and $8.8 million, respectively, during the three-month period ended March 31, 2020. No impairment charges of FCC licenses were recorded during the second or third quarters of 2020.

The carrying amount of intangible assets not subject to amortization for each of the Company’s operating segments for the nine-month period ended September 30, 2020 is as follows (in thousands):

	December 31, 2019		Impairment			Assets Sold			September 30, 2020
Television	$	157,165	$	(23,457	)	$	(3,434	)	$	130,274
Radio		95,379		(8,800	)		-			86,579
Digital	-			-			-		-
Consolidated	$	252,544	$	(32,257	)	$	(3,434	)	$	216,853

The Company also conducted a review of certain of its long-lived assets using a two-step approach during the three-month period ended March 31, 2020. In the first step, the carrying value of the asset group is compared to the projected undiscounted cash flows to determine recoverability. If the asset carrying value is not recoverable, then the fair value of the asset group is determined in the second step using an income approach. The income approach requires the Company to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and useful lives.

Based on the assumptions and estimates described above, the carrying values of long-lived assets in the digital reporting unit exceeded their fair values. As a result, the Company recorded impairment charges related to Intangibles subject to amortization of $5.3 million, and property and equipment of $1.5 million, during the three-month period ended March 31, 2020. No impairment charges related to Intangibles subject to amortization were recorded during the second or third quarters of 2020.

Treasury Stock

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

Treasury stock is included as a deduction from equity in the Stockholders’ Equity section of the 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, 2020, the Company did not repurchase any shares of Class A common stock. As of September 30, 2020, the Company has repurchased a total of approximately 8.6 million shares of Class A common stock, for an aggregate purchase price of approximately $32.2 million, or an average price per share of $3.76, since the beginning of the share repurchase program. As of September 30, 2020, 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 and to terminate the credit agreement relating thereto (the “2013 Credit Agreement”), (b) to pay fees and expenses in connection with the 2017 Credit Facility, and (c) for general corporate purposes.

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

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

The amounts outstanding under the 2017 Credit Facility may be prepaid at the Company’s option without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a LIBOR rate loan. The principal amount of the Term Loan B Facility shall be paid in installments on the dates and in the respective amounts set forth in the 2017 Credit Agreement, with the final balance due on the Maturity Date.

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

•

incur liens on the Company’s property or assets;

•

make certain investments;

•

incur additional indebtedness;

•

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

•

dispose of certain assets;

•

make certain restricted payments;

•

make certain acquisitions;

•

enter into substantially different lines of business;

•

enter into certain transactions with affiliates;

•

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

•

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

•

enter into sale and leaseback transactions;

•

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

•

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

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

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

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

The carrying amount of the Term Loan B Facility as of September 30, 2020 was $214.1 million, net of $1.9 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of September 30, 2020 was approximately $203.0 million. The estimated fair value is based on quoted prices in markets where trading occurs infrequently.

As of September 30, 2020, the Company believes that it is in compliance with all covenants in the 2017 Credit Agreement.

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, 2020
	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	$	49.5	$	-	$	49.5		$	-
Certificates of deposit	$	2.8	$	-	$	2.8		$	-
Corporate bonds	$	50.4	$	-	$		50.4	$	-


	December 31, 2019
	Total Fair Value
	and Carrying
	Value on Balance		Fair Value Measurement Category
	Sheet		Level 1		Level 2			Level 3
Assets:
Money market account	$	21.3	$	-	$	21.3		$	-
Certificates of deposit	$	6.1	$	-	$	6.1		$	-
Corporate bonds	$	85.6	$	-	$	85.6		$	-

As of September 30, 2020, the Company held investments in a money market fund, certificates of deposit and corporate bonds. All certificates of deposit are within the current FDIC insurance limits and the majority of corporate bonds are investment grade.

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

As of September 30, 2020, 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	$	2,796	$	34	$	49,898	$	480
Due after one year through five years		-		-		-		-
Total	$	2,796	$	34	$	49,898	$	480

The Company’s available for sale debt securities are considered for credit losses under the guidance of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326), which the Company adopted on January 1, 2020. As of September 30, 2020, the Company determined that a credit loss allowance is not required. Refer to “Newly Adopted Accounting Standards” discussion below.

Included in interest income for the three- and nine-month periods ended September 30, 2020 was interest income related to the Company’s available for sale securities of $0.4 million and $1.4 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, 2020 (in millions):

	Foreign Currency Translation			Marketable Securities			Total
Accumulated other comprehensive income (loss) as of December 31, 2019	$	(0.5	)	$	0.4		$	(0.1	)
Other comprehensive income (loss)		(0.2	)		(0.3	)		(0.5	)
Income tax (expense) benefit		-			0.1			0.1
Other comprehensive income (loss), net of tax		(0.2	)		(0.2	)		(0.4	)
Accumulated other comprehensive income (loss) as of March 31, 2020		(0.7	)		0.2			(0.5	)
Other comprehensive income (loss)		0.5			0.7			1.2
Income tax (expense) benefit		-			(0.2	)		(0.2	)
Other comprehensive income (loss), net of tax		0.5			0.5			1.0
Accumulated other comprehensive income (loss) as of June 30, 2020		(0.2	)		0.7			0.5
Other comprehensive income (loss)		(0.3	)		(0.2	)		(0.5	)
Income tax (expense) benefit		-			-			-
Other comprehensive income (loss), net of tax		(0.3	)		(0.2	)		(0.5	)
Accumulated other comprehensive income (loss) as of September 30, 2020	$	(0.5	)	$	0.5		$	-

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 the U.S. dollar.

Cost of Revenue

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

Assets Held For Sale

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

During the third quarter of 2019, the Company entered into an agreement to sell a vacated building that previously housed the operations of two of its television stations in the Palm Springs, California market million. The transaction met the criteria for classification as assets held for sale as of June 30, 2020 and closed on September 30, 2020 for $0.9 million.

On January 22, 2020, the Company entered into an agreement with ION Media Stations, Inc. to sell television station KMCC-TV, serving the Las Vegas area, for $4.0 million. The transaction met the criteria for classification as assets held for sale as of March 31, 2020 and closed on April 2, 2020. The resulting gain of $0.6 million is included in other operating gain in the consolidated statements of operation.

On March 30, 2020, the Company entered into an agreement to sell a building and related improvements in the Houston, Texas area for approximately $5.4 million. The transaction met the criteria for classification as assets held for sale and the carrying value of $0.2 million is presented separately in the consolidated balance sheet as of September 30, 2020. Due to certain government approval delays resulting from the COVID-19 pandemic, the Company anticipates that the transaction will close in the fourth quarter of 2020.

During the first quarter of 2020, the Company listed for sale a building and related improvements in the Laredo, Texas area for approximately $2.9 million. The transaction met the criteria for classification as assets held for sale and the carrying value of $2.0 million is presented separately in the consolidated balance sheet as of September 30, 2020.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

Newly Adopted Accounting Standards

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. The Company adopted ASU 2018-15 on January 1, 2020, which did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements by requiring that Level 3 fair value disclosures include the range and weighted average of significant unobservable inputs used to develop those fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The Company adopted ASU 2018-13 on January 1, 2020, which did not have an impact on the Company’s financial statements and related disclosures since the Company does not have any Level 3 financial assets.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). ASU 2016-13 makes significant changes to the accounting for credit losses on financial instruments presented on an amortized cost basis and disclosures about them. The new current expected credit loss (“CECL”) impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers reasonable and supportable forecasts of future economic conditions in addition to information about past events and current conditions. The standard provides significant flexibility and requires a high degree of judgment with regards to pooling financial assets with similar risk characteristics and adjusting the relevant historical loss information in order to develop an estimate of expected lifetime losses. The Company evaluated its financial instruments and determined that its trade accounts receivables are subject to the new current expected credit loss model and the Company’s available for sale debt securities are subject to the new modified credit impairment guidance.

Account Receivables

The Company adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach. Adoption of the new standard did not have a material impact on the Company’s consolidated financial statements.

The allowance for doubtful accounts is based on the Company’s assessment of the collectibility of customer accounts. The Company periodically reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay.

The Company's exposure to credit losses may increase if its customers are adversely affected by changes such as economic pressures or uncertainty associated with local or global economic recessions, disruptions associated with the current COVID-19 pandemic, or other customer-specific factors. Although the Company has historically not experienced significant credit losses, it will continue to periodically review the allowance and make necessary adjustments accordingly.

Available for Sale Debt Securities

ASU 2016-13 made changes to the accounting for available for sale debt securities. Under the new guidance, at each reporting date, entities must evaluate their individual available for sale debt securities that are in an unrealized loss position and determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The amount of the decline related to credit losses are recorded as a credit loss expense in earnings with a corresponding allowance for credit losses, and the amount of the decline not related to credit losses are recorded through other comprehensive income, net of tax.

As of the adoption date on January 1, 2020, the Company applied the new credit impairment guidance for available for sale debt securities on a prospective basis. Adoption of the new standard did not have a material impact on our consolidated financial statements. Refer to “Fair Value Measurements” discussion above.