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 June 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 August 5, 2019, there were 60,688,900 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 SIX-MONTH PERIODS ENDED JUNE 30, 2019

TABLE OF CONTENTS

		Page Number
	PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	4
	CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF JUNE 30, 2019 AND DECEMBER 31, 2018	4
	CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2019 AND JUNE 30, 2018	5
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2019 AND JUNE 30, 2018	6
	CONSOLIDATED STATEMENTS OF STOCKHOLDERS’  EQUITY (UNAUDITED) FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2019 AND JUNE 30, 2018	7
	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2019 AND JUNE 30, 2018	9
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	10
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	40
ITEM 4.	CONTROLS AND PROCEDURES	41
	PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	43
ITEM 1A.	RISK FACTORS	43
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	43
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	43
ITEM 4.	MINE SAFETY DISCLOSURES	43
ITEM 5.	OTHER INFORMATION	43
ITEM 6.	EXHIBITS	44

1

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;

• 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;

• 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;

2

• the effect of changesin broadcast transmission standards by the Advanced Television Systems Committee's (the “ATSC”) 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)

	June 30,			December 31,
	2019			2018
ASSETS
Current assets
Cash and cash equivalents	$	52,631			46,733
Marketable securities		113,349			132,424
Restricted cash		732			732
Trade receivables, (including related parties of $5,145 and $4,530) net of allowance for doubtful accounts of $3,032 and $3,395		69,841			79,308
Assets held for sale		1,179			1,179
Prepaid expenses and other current assets (including related parties of $274 and $274)		12,558			10,672
Total current assets		250,290			271,048
Property and equipment, net of accumulated depreciation of $187,226 and $187,375		74,502			64,939
Intangible assets subject to amortization, net of accumulated amortization of $95,646 and $93,793 (including related parties of $7,712 and $8,327)		19,442			22,598
Intangible assets not subject to amortization		254,598			254,598
Goodwill		51,857			74,292
Operating leases right of use asset		46,206			-
Other assets		2,684			2,934
Total assets	$	699,579		$	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 $2,415 and $1,948)		46,198			51,034
Operating lease liabilities		11,420			-
Total current liabilities		60,618			54,034
Long-term debt, less current maturities, net of unamortized debt issuance costs of $2,718 and $2,709		239,032			240,541
Long-term operating lease liabilities		41,091			-
Other long-term liabilities		7,516			16,418
Deferred income taxes		48,401			46,684
Total liabilities		396,658			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 60,718,613; 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		846,345			862,299
Accumulated deficit		(543,019	)		(528,164	)
Accumulated other comprehensive income (loss)		(414	)		(1,412	)
Total stockholders' equity		302,921			332,732
Total liabilities and stockholders' equity	$	699,579		$	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						Six-Month Period
	Ended June 30,						Ended June 30,
	2019			2018			2019			2018
Net Revenue	$	69,241		$	74,329		$	133,921		$	141,167
Expenses:
Cost of revenue - digital media		8,859			11,384			16,501			22,009
Direct operating expenses (including related parties of $2,007, $2,208, $3,969 and $4,256) (including non-cash stock-based compensation of $116, $76, $250 and $293)		29,655			31,117			58,585			62,150
Selling, general and administrative expenses		13,545			12,673			27,359			25,967
Corporate expenses (including non-cash stock-based compensation of $719, $1,100, $1,385 and $2,133)		6,501			6,266			13,395			12,241
Depreciation and amortization (includes direct operating of $2,968, $2,560, $5,462 and $5,097; selling, general and administrative of $1,176, $1,301, $2,445 and $2,614; and corporate of $162, $153, $315 and $242) (including related parties of $307, $307, $615 and $614)		4,306			4,019			8,222			7,958
Change in fair value contingent consideration		(2,735	)		(913	)		(2,376	)		1,187
Impairment charge		22,368			-			22,368			-
Foreign currency (gain) loss		(82	)		(17	)		50			196
Other operating (gain) loss		(1,597	)		(273	)		(3,593	)		(295	)
Operating income (loss)		(11,579	)		10,073			(6,590	)		9,754
Interest expense		(3,554	)		(4,001	)		(7,044	)		(7,399	)
Interest income		857			1,039			1,776			1,952
Dividend income		251			417			506			545
Income (loss) before income taxes		(14,025	)		7,528			(11,352	)		4,852
Income tax benefit (expense)		(2,252	)		(2,652	)		(3,345	)		(1,721	)
Income (loss) before equity in net income (loss) of nonconsolidated affiliate		(16,277	)		4,876			(14,697	)		3,131
Equity in net income (loss) of nonconsolidated affiliate, net of tax		(2	)		(36	)		(158	)		(98	)
Net income (loss)	$	(16,279	)	$	4,840		$	(14,855	)	$	3,033
Basic and diluted earnings per share:
Net income (loss) per share, basic and diluted	$	(0.19	)	$	0.05		$	(0.17	)	$	0.03
Cash dividends declared per common share	$	0.05		$	0.05		$	0.10		$	0.05
Weighted average common shares outstanding, basic		85,359,998			88,959,935			85,728,820			89,635,759
Weighted average common shares outstanding, diluted		85,359,998			90,021,949			85,728,820			90,805,086

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						Six-Month Period
	Ended June 30,						Ended June 30,
	2019			2018			2019			2018
Net income (loss)	$	(16,279	)	$	4,840		$	(14,855	)	$	3,033
Other comprehensive income (loss), net of tax:
Change in foreign currency translation		(318	)		(550	)		(288	)		(260	)
Change in fair value of available for sale securities		523			(3	)		1,286			(1,242	)
Total other comprehensive income (loss)		205			(553	)		998			(1,502	)
Comprehensive income  (loss)	$	(16,074	)	$	4,287		$	(13,857	)	$	1,531

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
Tax payments related to shares withheld for share-based  compensation plans		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

7

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share and per share data)

	Number of Common Shares										Class A													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
																					0						0
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

See Notes to Consolidated Financial Statements

8

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Six-Month Period
	Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	(14,855	)	$	3,033
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		8,222			7,958
Impairment charge		22,368			-
Deferred income taxes		1,472			1,029
Non-cash interest		489			538
Amortization of syndication contracts		249			352
Payments on syndication contracts		(227	)		(360	)
Equity in net (income) loss of nonconsolidated affiliate		158			98
Non-cash stock-based compensation		1,635			2,425
(Gain) loss on disposal of property and equipment		161			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		9,619			9,170
(Increase) decrease in prepaid expenses and other assets		2,680			(6,547	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(12,301	)		(780	)
Net cash provided by operating activities		19,670			16,916
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		-			33
Purchases of property and equipment		(13,982	)		(5,710	)
Purchases of intangible assets		-			(3,153	)
Purchase of a businesses, net of cash acquired		-			(3,563	)
Purchases of marketable securities		(1,160	)		(159,403	)
Proceeds from marketable securities		21,681			25,000
Purchases of investments		(300	)		(35	)
Net cash provided by (used in) investing activities		6,239			(146,831	)
Cash flows from financing activities:
Proceeds from stock option exercises		-			106
Tax payments related to shares withheld for share-based compensation plans		(751	)		(2,239	)
Payments on long-term debt		(1,500	)		(1,500	)
Dividends paid		(8,540	)		(8,960	)
Repurchase of Class A common stock		(9,008	)		(7,660	)
Payment of contingent consideration		-			(2,015	)
Payments of capitalized debt costs		(225	)		-
Net cash used in financing activities		(20,024	)		(22,268	)
Effect of exchange rates on cash, cash equivalents and restricted cash		13			(10	)
Net increase (decrease) in cash, cash equivalents and restricted cash		5,898			(152,193	)
Cash, cash equivalents and restricted cash:
Beginning		47,465			261,854
Ending	$	53,363		$	109,661
Supplemental disclosures of cash flow information:
Cash payments for:
Interest	$	6,555		$	6,861
Income taxes	$	1,873		$	692
Supplemental disclosures of non-cash investing and financing activities:
Capital expenditures financed through accounts payable, accrued expenses and other liabilities	$	1,530		$	400
Contingent consideration included in accounts payable, accrued expenses and other liabilities	$	5,743		$	11,280

See Notes to Consolidated Financial Statements

9

ENTRAVISION COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 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 June 30, 2019, based upon the type of advertising medium, which segments are television, radio and digital. As of June 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 June 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 June 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the six-month periods ended June 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $4.0 million and $4.3 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 June 30, 2019, the amount due to the Company from Univision was $5.1 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During each of the three-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $9.1 million, of which $7.0 million and $7.5 million, respectively, relate to the Univision proxy agreement. During the six-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $17.8 million and $18.0 million, respectively, of which $13.7 million and $15.1 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 $1.2 million for the three-month periods ended June 30, 2019 and 2018, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $1.6 million and $2.4 million for the six-month periods ended June 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 June 30, 2019, there was de minimis 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):

	Six-Month Period
	Ended June 30, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

As of June 30, 2019, there was approximately $3.1 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.3 years.

Income (Loss) Per Share

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

	Three-Month Period					Six-Month Period
	Ended June 30,					Ended June 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03
Diluted earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Dilutive securities:
Stock options and restricted stock units	-				1,062,014		-			1,169,327
Diluted shares outstanding		85,359,998			90,021,949		85,728,820			90,805,086
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03

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 six-month periods ended June 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 952,026 and 1,001,636 equivalent shares of dilutive securities for the three- and six-month periods ended June 30, 2019, respectively.

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For the three- and six-month periods ended June 30, 2018, a total of 242,735 and 139,468 shares of dilutive securities, respectively, were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares.

Goodwill 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.

The Company conducted a review of the fair value of the digital reporting unit in the second quarter 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 $22.4 million during the quarter ended June 30, 2019.

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

	December 31, 2018		Currency			Impairment			June 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(22,368	)		11,308
Consolidated	$	74,292	$	(67	)	$	(22,368	)	$	51,857

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. 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.

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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.  

The Company repurchased 0.4 million shares of Class A common stock at an average price of $2.95, for an aggregate purchase price of approximately $1.3 million, during the three-month period ended June 30, 2019. As of June 30, 2019, the Company has repurchased a total of approximately 7.0 million shares of Class A common stock, for an aggregate purchase price of approximately $28.1 million, or an average price per share of $3.98, since the beginning of the share repurchase program. All such repurchased shares were retired as of June 30, 2019.

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 to (a) 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 2013 Credit Agreement, (b) 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 its 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”).

In the event the Company engages in a transaction that has the effect of reducing the yield of any loans outstanding under the Term Loan B Facility within six months of the Closing Date, the Company will owe 1% of the amount of the loans so repriced or replaced to the Lenders thereof (such fee, the “Repricing Fee”). Other than the Repricing Fee, 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;

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• 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 June 30, 2019 was $242.0 million, net of $2.7 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of June 30, 2019 was $233.7 million. The estimated fair value is based on quoted prices in markets where trading occurs infrequently.

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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):

	June 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	$	37.2	$	-	$	37.2		$	-
Certificates of deposit	$	7.8	$	-	$	7.8		$	-
Corporate bonds	$	105.6	$	-	$		105.6	$	-
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 June 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.

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As of June 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	$	2,880	$	1	$	29,997	$	41
Due after one year through five years		4,882		19		75,206		323
Total	$	7,762	$	20	$	105,203	$	364

The Company periodically reviews its available for sale securities for other-than-temporary impairment. For the three- and six-month periods ended June 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 six-month periods ended June 30, 2019 was interest income related to the Company’s available-for-sale securities of $0.8 and $1.7 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 six-month periods ended June 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	)

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.

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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.  As of June 30, 2019, the Company adjusted the selling price to current market conditions and believes that the long-lived asset continues to meet the criteria for classification as an asset held for sale. Assets held for sale are classified as current assets as management believes the sale will be completed within one year.

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 this ASU 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 this ASU 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 in the process of assessing the impact of this ASU 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 this ASU 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.  

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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 June 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 this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of 2019 which 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 the rule in the first quarter of 2019 and included a statement of stockholders’ equity in our Form 10-Q.

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 ad, 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.

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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 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 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.

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 six-month periods ended (in thousands):

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Broadcast advertising	$	37,237	$	41,533	$	71,945	$	79,242
Digital advertising		16,804		20,558		31,276		38,802
Spectrum usage rights		3,952		523		9,036		631
Retransmission consent		9,086		9,143		17,846		17,996
Other		2,162		2,572		3,818		4,496
Total revenue	$	69,241	$	74,329	$	133,921	$	141,167

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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 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 six-month periods ended (in thousands):

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Local direct	$	6,456	$	7,059	$	12,511	$	13,975
Local agency		14,966		15,521		28,666		30,114
National agency		15,815		18,953		30,768		35,153
Total  revenue	$	37,237	$	41,533	$	71,945	$	79,242

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 six-month period ended June 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 *		June 30, 2019
Deferred revenue	$	2,759	1,593	(2,759	)	$	1,593

* The amount disclosed in the decrease column reflects revenue that has been recorded in the six-month period ended June 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 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.

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

(in thousands)
Remainder of 2019	$	5,747
2020		11,620
2021		9,222
2022		7,788
2023		6,177
2024 and thereafter		36,646
Total minimum payments	$	77,200
Less amounts representing interest		(29,048	)
Present value of minimum lease payments	$	48,152

The weighted average remaining lease term and the weighted average discount rate used to calculate the Company’s lease liabilities as of June 30, 2019 were 14.0 years and 6.2%, respectively.

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

(in thousands)	Six-Month Period Ended June 30, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	2,910
Non-cash additions to operating lease assets	$	4,359

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 six-months ended June 30, 2019:

	Three-Month Period		Six-Month Period
	Ended June 30,		Ended June 30,
(in thousands)	2019		2019
Operating lease cost	$	2,560	$	4,957
Variable lease cost	369		790
Short-term lease cost	182		289
Total lease cost	$	3,111	$	6,036

For the three-month periods ended June 30, 2019 lease cost of $1.4 million, $1.6 million and $0.1 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively. For the six-month periods ended June 30, 2019 lease cost of $2.7 million, $3.0 million and $0.3 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 June 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 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.

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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 generated17% and20% of its revenue outside the United States during the three-month periods ended June 30, 2019 and June 30, 2018, respectively. The Company generated 16% and 19% of its revenue outside the United States during the six-month periods ended June 30, 2019 and June 30, 2018, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Six-Month Period
	Ended June 30,						%			Ended June 30,						%
		2019			2018		Change				2019			2018		Change
Net revenue
Television	$	38,071		$	36,531			4	%	$	76,324		$	71,022			7	%
Radio		14,366			17,240			(17	)%		26,321			31,343			(16	)%
Digital		16,804			20,558			(18	)%		31,276			38,802			(19	)%
Consolidated		69,241			74,329			(7	)%		133,921			141,167			(5	)%
Cost of revenue - digital media		8,859			11,384			(22	)%		16,501			22,009			(25	)%
Direct operating expenses
Television		15,157			15,038			1	%		30,084			30,588			(2	)%
Radio		9,528			10,935			(13	)%		19,036			21,609			(12	)%
Digital		4,970			5,144			(3	)%		9,465			9,953			(5	)%
Consolidated		29,655			31,117			(5	)%		58,585			62,150			(6	)%
Selling, general and administrative expenses
Television		5,634			5,551			1	%		11,448			11,523			(1	)%
Radio		4,396			4,502			(2	)%		9,171			9,108			1	%
Digital		3,515			2,620			34	%		6,740			5,336			26	%
Consolidated		13,545			12,673			7	%		27,359			25,967			5	%
Depreciation and amortization
Television		2,562			2,277			13	%		4,822			4,481			8	%
Radio		571			621			(8	)%		903			1,240			(27	)%
Digital		1,173			1,121			5	%		2,497			2,237			12	%
Consolidated		4,306			4,019			7	%		8,222			7,958			3	%
Segment operating profit (loss)
Television		14,718			13,665			8	%		29,970			24,430			23	%
Radio		(129	)		1,182		*				(2,789	)		(614	)		354	%
Digital		(1,713	)		289		*				(3,927	)		(733	)		436	%
Consolidated		12,876			15,136			(15	)%		23,254			23,083			1	%
Corporate expenses		6,501			6,266			4	%		13,395			12,241			9	%
Change in fair value contingent consideration		(2,735	)		(913	)		200	%		(2,376	)		1,187		*
Impairment charge		22,368			-		*				22,368			-		*
Foreign currency (gain) loss		(82	)		(17	)		382	%		50			196			(74	)%
Other operating (gain) loss		(1,597	)		(273	)		485	%		(3,593	)		(295	)		1,118	%
Operating income (loss)		(11,579	)		10,073		*				(6,590	)		9,754		*
Interest expense	$	(3,554	)	$	(4,001	)		(11	)%	$	(7,044	)	$	(7,399	)		(5	)%
Interest income		857			1,039			(18	)%		1,776			1,952			(9	)%
Dividend income		251			417			(40	)%		506			545			(7	)%
Income (loss) before income taxes		(14,025	)		7,528		*				(11,352	)		4,852		*
Capital expenditures
Television	$	7,661		$	1,942					$	14,002		$	4,023
Radio		199			81						581			162
Digital		121			181						240			247
Consolidated	$	7,981		$	2,204					$	14,823		$	4,432
	June 30,			December 31,
Total assets		2019			2018
Television		506,267			487,929
Radio		138,577			121,020
Digital		54,735			81,460
Consolidated	$	699,579		$	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, which is subject to customary closing conditions, including the prior consent of the FCC, is currently expected to close in the second half of 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 June 30, 2019 was $69.2 million. Of that amount, revenue attributed to our television segment accounted for approximately 55%, revenue attributed to our digital segment accounted for approximately 24% 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 that 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 second quarter of 2019, our consolidated revenue decreased to $69.2 million from $74.3 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 in our television segment. Our audience shares remained strong in the nation’s most densely populated Hispanic markets.

Net revenue in our television segment increased to $38.1 million for the three-month period ended June 30, 2019 from $36.5 million for the three-month period ended June 30, 2018, an increase of approximately $1.6 million, or 4%. The increase was primarily due to an increase in revenue from spectrum usage rights, 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 was not material in 2019. We generated a total of $9.1 million in retransmission consent revenue for each of the three-month periods ended June 30, 2019 and 2018.

Net revenue in our radio segment decreased to $14.4 million for the three-month period ended June 30, 2019 from $17.2 million for the three-month period ended June 30, 2018. This decrease of approximately $2.8 million, or 17%, 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 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 $16.8 million for the three-month period ended June 30, 2019 from $20.6 million for the three-month period ended June 30, 2018. This decrease of approximately $3.8 million, or 18%, 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 U.S. 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.  The digital advertising industry is dynamic and undergoing rapid changes in technology and competition and we expect this trend to continue. We must remain adaptable to meet these dynamic and rapid changes and may need to adjust our business strategies accordingly.

We incurred an impairment charge related to goodwill in our digital reporting unit in the amount of $22.4 million during the three-month period ended June 30, 2019. Due to lower than anticipated performance of our digital reporting unit in the second quarter of 2019, 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 an interim impairment assessment for our digital reporting unit.

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.

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 June 30, 2019 and 2018, the amount we paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the six-month periods ended June 30, 2019 and 2018, the amount we paid Univision in this capacity was $4.0 million and $4.3 million, respectively.

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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 each of the three-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $9.1 million, of which $7.0 million and $7.5 million, respectively, relate to the Univision proxy agreement. During the six-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $17.8 million and $18.0 million, respectively, of which $13.7 million and $15.1 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. The Company is in the process of assessing the impact of this ASU 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 this ASU 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 in the process of assessing the impact of this ASU on its Consolidated Financial Statements.

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Three- and Six-Month Periods Ended June 30, 2019 and 2018

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

	Three-Month Period									Six-Month Period
	Ended June 30,						%			Ended June 30,						%
	2019			2018			Change			2019			2018			Change
Statements of Operations Data:
Net Revenue	$	69,241		$	74,329			(7	)%	$	133,921		$	141,167			(5	)%
Cost of revenue - digital media		8,859			11,384			(22	)%		16,501			22,009			(25	)%
Direct operating expenses		29,655			31,117			(5	)%		58,585			62,150			(6	)%
Selling, general and administrative expenses		13,545			12,673			7	%		27,359			25,967			5	%
Corporate expenses		6,501			6,266			4	%		13,395			12,241			9	%
Depreciation and amortization		4,306			4,019			7	%		8,222			7,958			3	%
Change in fair value contingent consideration		(2,735	)		(913	)		200	%		(2,376	)		1,187		*
Impairment charge		22,368			-		*				22,368			-		*
Foreign currency (gain) loss		(82	)		(17	)		382	%		50			196			(74	)%
Other operating (gain) loss		(1,597	)		(273	)		485	%		(3,593	)		(295	)		1118	%
		80,820			64,256			26	%		140,511			131,413			7	%
Operating income (loss)		(11,579	)		10,073		*				(6,590	)		9,754		*
Interest expense		(3,554	)		(4,001	)		(11	)%		(7,044	)		(7,399	)		(5	)%
Interest income		857			1,039			(18	)%		1,776			1,952			(9	)%
Dividend income		251			417			(40	)%		506			545			(7	)%
Income before income (loss) taxes		(14,025	)		7,528		*				(11,352	)		4,852		*
Income tax benefit (expense)		(2,252	)		(2,652	)		(15	)%		(3,345	)		(1,721	)		94	%
Income (loss) before equity in net income (loss) of
nonconsolidated affiliate		(16,277	)		4,876		*				(14,697	)		3,131		*
Equity in net income (loss) of nonconsolidated affiliate, net of tax		(2	)		(36	)		(94	)%		(158	)		(98	)		61	%
Net income  (loss)	$	(16,279	)	$	4,840		*			$	(14,855	)	$	3,033		*
Other Data:
Capital expenditures		7,981			2,204						14,823			4,432
Consolidated adjusted EBITDA (adjusted for non-cash stock-based compensation) (1)											20,636			21,803
Net cash provided by operating activities											19,670			16,916
Net cash provided by (used in) investing activities											6,239			(146,831	)
Net cash used in financing activities											(20,024	)		(22,268	)

(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 June 30): 2019, 3.2 to 1; 2018, 4.9 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):

	Six-Month Period
	Ended June 30,
		2019			2018
Consolidated adjusted EBITDA	$	20,636		$	21,803
Interest expense		(7,044	)		(7,399	)
Interest income		1,776			1,952
Dividend income		506			545
Income tax expense		(3,345	)		(1,721	)
Equity in net loss of nonconsolidated affiliates		(158	)		(98	)
Amortization of syndication contracts		(249	)		(352	)
Payments on syndication contracts		227			360
Non-cash stock-based compensation included in direct operating expenses		(250	)		(292	)
Non-cash stock-based compensation included in corporate expenses		(1,385	)		(2,133	)
Depreciation and amortization		(8,222	)		(7,958	)
Change in fair value contingent consideration		2,376			(1,187	)
Impairment charge		(22,368	)		-
Non-recurring cash severance charge		(948	)		(782	)
Other operating gain (loss)		3,593			295
Net income (loss)		(14,855	)		3,033
Depreciation and amortization		8,222			7,958
Impairment charge		22,368			-
Deferred income taxes		1,472			1,029
Non-cash interest		489			538
Amortization of syndication contracts		249			352
Payments on syndication contracts		(227	)		(360	)
Equity in net (income) loss of nonconsolidated affiliate		158			98
Non-cash stock-based compensation		1,635			2,425
(Gain) loss on disposal of property and equipment		161			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		9,619			9,170
(Increase) decrease in prepaid expenses and other assets		2,680			(6,547	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(12,301	)		(780	)
Cash flows from operating activities	$	19,670		$	16,916

Consolidated Operations

Net Revenue. Net revenue decreased to $69.2 million for the three-month period ended June 30, 2019 from $74.3 million for the three-month period ended June 30, 2018, a decrease of $5.1 million. Of the overall decrease, approximately $3.8 million was attributable to our digital segment and was primarily due to declines in both international and domestic revenue.  The decline in revenue is driven by a trend whereby revenue is shifting more to automated self-service platforms, referred to in our industry as programmatic revenue. Additionally, approximately $2.8 million 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. The overall decrease in revenue was partially offset by an increase in our television segment of approximately $1.6 million and was primarily due to an increase in revenue from spectrum usage rights, 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 is not material in 2019.

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Net revenue decreased to $133.9 million for the six-month period ended June 30, 2019 from $141.2 million for the six-month period ended June 30, 2018, a decrease of $7.3 million. Of the overall decrease, approximately $7.5 million was attributable to our digital segment and was primarily due to declines in both international and domestic revenue.  The decline in revenue is driven by a trend whereby revenue is shifting more to automated self-service platforms, referred to in our industry as programmatic revenue. Additionally, approximately $5.0 million 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. The overall decrease in revenue was partially offset by an increase in our television segment of approximately $5.3 million and was primarily due to an increase in revenue from spectrum usage rights, 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 is not 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 in 2019 compared to 2018.

Cost of revenue-Digital. Cost of revenue in our digital segment decreased to $8.9 million for the three-month period ended June 30, 2019 from $11.4 million for the three-month period ended June 30, 2018, a decrease of $2.5 million, primarily due to 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 $16.5 million for the six-month period ended June 30, 2019 from $22.0 million for the six-month period ended June 30, 2018, a decrease of $5.5 million, primarily due to 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 $29.7 million for the three-month period ended June 30, 2019 from $31.1 million for the three-month period ended June 30, 2018, a decrease of $1.4 million. The decrease was primarily 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. As a percentage of net revenue, direct operating expenses increased to 43% for the three-month period ended June 30, 2019 from 42% for the three-month period ended June 30, 2018.

Direct operating expenses decreased to $58.6 million for the six-month period ended June 30, 2019 from $62.1 million for the six-month period ended June 30, 2018, a decrease of $3.5 million. Of the overall decrease, approximately $2.6 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 $0.5 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 advertising revenue, partially offset by an increase in fees due to networks related to retransmission consent agreements. In addition, approximately $0.4 million of the overall decrease was attributable to our digital segment primarily due to a decrease in expenses associated with the decrease in revenue. As a percentage of net revenue, direct operating expenses remained constant at 44% for each of the six-month periods ended June 30, 2019 and 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 $13.5 million for the three-month period ended June 30, 2019 from $12.7 million for the three-month period ended June 30, 2018, an increase of $0.8 million. The increase was primarily due to an increase in severance expense in our digital segment. As a percentage of net revenue, selling, general and administrative expenses increased to 20% for the three-month period ended June 30, 2019 from 17% for the three-month period ended June 30, 2018.

Selling, general and administrative expenses increased to $27.4 million for the six-month period ended June 30, 2019 from $26.0 million for the six-month period ended June 30, 2018, an increase of $1.4 million. The increase was primarily due to an increase in severance expense and an increase in bad debt expense in our digital segment. As a percentage of net revenue, selling, general and administrative expenses increased to 20% for the six-month period ended June 30, 2019 from 18% for the six-month period ended June 30, 2018.

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

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Corporate Expenses. Corporate expenses increased to $6.5 million for the three-month period ended June 30, 2019 from $6.3 million for the three-month period ended June 30, 2018, an increase of $0.2 million. The increase was primarily due to an increase in audit fees. As a percentage of net revenue, corporate expenses increased to 9% for the three-month period ended June 30, 2019 from 8% for the three-month period ended June 30, 2018.

Corporate expenses increased to $13.4 million for the six-month period ended June 30, 2019 from $12.2 million for the six-month period ended June 30, 2018, an increase of $1.2 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. As a percentage of net revenue, corporate expenses increased to 10% for the six-month period ended June 30, 2019 from 9% for the six-month period ended June 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 $4.3 million for the three-month period ended June 30, 2019 compared to $4.0 million for the three-month period ended June 30, 2018.  The increase was primarily attributable to the acquisition of Smadex, S.L. (“Smadex”) in June 2018.

Depreciation and amortization increased to $8.2 million for the six-month period ended June 30, 2019 compared to $8.0 million for the six-month period ended June 30, 2018. The increase was primarily attributable to the acquisition of Smadex in June 2018.

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 $2.7 million for the three-month period ended June 30, 2019 compared to income of $0.9 million for the three-month period ended June 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 six-month period ended June 30, 2019, compared to an expense of $1.2 million for the six-month period ended June 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 U.S., 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 gain of $0.1 million for the three-month period ended June 30, 2019. There was no currency impact during the three-month period ended June 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 $0.1 million for the six-month period ended June 30, 2019 compared to a foreign currency loss of $0.2 million for the six-month period ended June 30, 2018. Foreign currency loss was primarily due to currency fluctuations that affected our digital segment operations located outside the U.S., primarily related to our Headway business.

Other operating gain. Other operating gain increased to $1.6 million for the three-month period ended June 30, 2019 from $0.3 million for the three-month period ended June 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.

Other operating gain increased to $3.6 million for the six-month period ended June 30, 2019 from $0.3 million for the six-month period ended June 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. Impairment charge related to goodwill in our digital reporting unit was $22.4 million for the three- and six-month periods ended June 30, 2019. The write-down was 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. Due to lower than anticipated performance of our digital reporting unit in the second quarter of 2019, 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 an interim impairment assessment for our digital reporting unit.

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Operating Income (Loss). As a result of the above factors, operating loss was $11.6 million for the three-month period ended June 30, 2019, compared to operating income of $10.1 million for the three-month period ended June 30, 2018. As a result of the above factors, operating loss was $6.6 million for the six-month period ended June 30, 2019, compared to operating income of $9.8million for the six-month period ended June 30, 2018.

Interest Expense, net. Interest expense, net decreased to $2.6 million for the three-month period ended June 30, 2019 from $3.0 million for the three-month period ended June 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 $5.3 million for the six-month period ended June 30, 2019 from $5.4 million for the six-month period ended June 30, 2018, a decrease of $0.1 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 six-month period ended June 30, 2019 was $3.3 million, or negative 29% of our pre-tax loss. Income tax expense for the six-month period ended June 30, 2018 was $1.7 million, or 35% of our pre-tax income.  ASC 740, “Income Taxes”, requires the Company to compute a worldwide annual effective tax rate and apply that annual effective tax rate to worldwide year-to-date pre-tax income (loss) with limited exceptions.  In computing the Company’s 2019 second quarter tax provision, due to the large non-deductible goodwill impairments recorded in Spain and the U.S. during the quarter relative to the projected worldwide pretax income for the year, the Company believes it would be unreliable to compute its annual effective tax rate including those jurisdictions. Accordingly, Spain and the U.S. have been excluded from the annual effective tax rate calculation and computed discretely based on year-to-date activities.  The annual effective tax rate on jurisdictions other than Spain and the U.S. differed from our statutory rate due to nondeductible expenses, and foreign tax rates that differ from the U.S. statutory rate.

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.

The Company intends to permanently reinvest its unremitted earnings in its foreign subsidiaries, and accordingly has not provided deferred tax liabilities on those earnings. The Company has not determined at this time an estimate of total amount of unremitted earnings, as it is not practical at this time.

Segment Operations

Television

Net Revenue. Net revenue in our television segment increased to $38.1 million for the three-month period ended June 30, 2019 from $36.5 million for the three-month period ended June 30, 2018, an increase of approximately $1.6 million, or 4%. The increase was primarily due to an increase in revenue from spectrum usage rights, 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 was not material in 2019. We generated a total of $9.1 million in retransmission consent revenue for each of the three-month periods ended June 30, 2019 and 2018.

Net revenue in our television segment increased to $76.3 million for the six-month period ended June 30, 2019 from $71.0 million for the six-month period ended June 30, 2018, an increase of approximately $5.3 million, or 7%. The increase was primarily due to an increase in revenue from spectrum usage rights 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 was not material in 2019. We generated a total of $17.8 million and $18.0 million in retransmission consent revenue for the six-month periods ended June 30, 2019 and 2018, respectively.

Direct Operating Expenses. Direct operating expenses in our television segment increased to $15.2 million for the three-month period ended June 30, 2019 from $15.0 million for the three-month period ended June 30, 2018, an increase of approximately $0.2 million. The increase was primarily due to an increase in fees due to networks related to retransmission consent agreements

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Direct operating expenses in our television segment decreased to $30.1 million for the six-month period ended June 30, 2019 from $30.6 million for the six-month period ended June 30, 2018, a decrease of approximately $0.5 million. The decrease was primarily due to a decrease inexpenses 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 remained constant at $5.6 million for each of the three-month periods ended June 30, 2019 and June 30, 2018.

Selling, general and administrative expenses in our television segment decreased to $11.4 million for the six-month period endedJune 30, 2019 from $11.5 million for the six-month period ended June 30, 2018, a decrease of approximately $0.1 million. The decrease was primarily due to a decrease in salary expense.

Radio

Net Revenue.  Net revenue in our radio segment decreased to $14.4 million for the three-month period ended June 30, 2019 from $17.2 million for the three-month period ended June 30, 2018. This decrease of approximately $2.8 million, or 17%, 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 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 radio segment decreased to $26.3 million for the six-month period ended June 30, 2019 from $31.3 million for the six-month period ended June 30, 2018. This decrease of approximately $5.0 million, or 16%, 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.  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 $9.5 million for the three-month period ended June 30, 2019 from $10.9 million for the three-month period ended June 30, 2018, a decrease of $1.4 million. The decrease was primarily due to a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expense.

Direct operating expenses in our radio segment decreased to $19.0 million for the six-month period ended June 30, 2019 from $21.6 million for the six-month period ended June 30, 2018, a decrease of $2.6 million. The decrease was primarily due to a decrease in expenses associated with the decrease in advertising revenue and a decrease in salary expense.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our radio segment decreased to $4.4 million for the three-month period ended June 30, 2019 from $4.5 million for the three-month period ended June 30, 2018, a decrease of $0.1 million. The decrease was primarily due to a decrease in salary expense.

Selling, general and administrative expenses in our radio segment increased to $9.2 million for the six-month period ended June 30, 2019 from $9.1 million for the six-month period ended June 30, 2018, an increase of $0.1 million. The increase was primarily due to an increase in promotional expense, partially offset by a decrease in salary expense.

Digital

Net Revenue.  Net revenue in our digital segment decreased to $16.8 million for the three-month period ended June 30, 2019 from $20.6 million for the three-month period ended June 30, 2018. This decrease of approximately $3.8 million, or 18%, 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 U.S. 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.  The digital advertising industry is dynamic and undergoing rapid changes in technology and competition and we expect this trend to continue. We must remain adaptable to meet these dynamic and rapid changes and may need to adjust our business strategies accordingly.

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Net revenue in our digital segment decreased to $31.3 million for the six-month period ended June 30, 2019 from $38.8 million for the six-month period ended June 30, 2018. This decrease of approximately $7.5 million, or 19%, 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 U.S. 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.  The digital advertising industry is dynamic and undergoing rapid changes in technology and competition and we expect this trend to continue. We must remain adaptable to meet these dynamic and rapid changes and may need to adjust our business strategies accordingly.

Cost of revenue.  Cost of revenue in our digital segment decreased to $8.9 million for the three-month period ended June 30, 2019 from $11.4 million for the three-month period ended June 30, 2018, a decrease of $2.5 million, primarily due to the decrease in revenue. As a percentage of digital net revenue, cost of revenue decreased to 53% for the three-month period ended June 30, 2019 from 55% for the three-month period ended June 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 $16.5 million for the six-month period ended June 30, 2019 from $22.0 million for the six-month period ended June 30, 2018, a decrease of $5.5 million, primarily due to the decrease in revenue. As a percentage of digital net revenue, cost of revenue decreased to 53% for the six-month period ended June 30, 2019 from 57% for the six-month period ended June 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 $5.0 million for the three-month period ended June 30, 2019 from $5.1 million for the three-month period ended June 30, 2018, a decrease of $0.1 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 $9.5 million for the six-month period ended June 30, 2019 from $10.0 million for the six-month period ended June 30, 2018, a decrease of $0.5 million.  The decrease was primarily due to a decrease in expenses associated with the decrease in revenue.

Selling, general and administrative expenses. Selling, general and administrative expenses in our digital segment increased to $3.5 million for the three-month period ended June 30, 2019 from $2.6 million for the three-month period ended June 30, 2018, an increase of $0.9 million. The increase was primarily due to an increase in severance expense.

Selling, general and administrative expenses in our digital segment increased to $6.7 million for the six-month period ended June 30, 2019 from $5.3 million for the six-month period ended June 30, 2018, an increase of $1.4 million. The increase was primarily due to an increase in severance expense and an increase in bad debt expense in the first quarter.

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 $19.7 million for the six-month period ended June 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 June 30, 2019, we held cash and cash equivalents of $7.3 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.

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Borrowings under the Term Loan B Facility were used on the Closing Date to (a) repay in full all of our and our subsidiaries’ outstanding obligations under the 2013 Credit Agreement and to terminate the 2013 Credit Agreement, (b) 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 June 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;

• 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;

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• 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.

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 June 30, 2019 was $242.0 million, net of $2.7 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of June 30, 2019 was $233.7 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. 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 June 30, 2019, we repurchased 0.4 million shares of our Class A common stock for an aggregate purchase price of $1.3 million, or an average price per share of $2.95. As of June 30, 2019, we have repurchased a total of approximately 7.0 million shares of our Class A common stock for aggregate purchase price of approximately $28.1 million, or an average price per share of $3.98, since the beginning of the share repurchase program. All such repurchased shares were retired as of June 30, 2019.

Consolidated Adjusted EBITDA

Consolidated adjusted EBITDA (as defined below) decreased to $20.6 million for the six-month period ended June 30, 2019 compared to $21.8 million for the six-month period ended June 30, 2018. As a percentage of net revenue, consolidated adjusted EBITDA was 15% for the six-month periods ended June 30, 2019 and 2018.

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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 June 30): 2019, 3.2 to 1; 2018, 4.9 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.

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 31.

Cash Flow

Net cash flow provided by operating activities was $19.7 million for the six-month period ended June 30, 2019, compared to net cash flow provided by operating activities of $16.9 million for the six-month period ended June 30, 2018. We had a net loss of $14.9 million for the six-month period ended June 30, 2019, which included non-cash items such as impairment loss of $22.4 million with respect to our digital reporting unit, depreciation and amortization expense of $8.2 million and non-cash stock-based compensation of $1.6 million. We had net income of $3.0 million for the six-month period ended June 30, 2018, which included non-cash items such as depreciation and amortization expense of $8.0 million and non-cash stock-based compensation of $2.4 million. We expect to have positive cash flow from operating activities for the full year 2019.

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Net cash flow provided by investing activities was $6.2 million for the six-month period ended June 30, 2019, compared to net cash flow used in investing activities of $146.8 million for the six-month period ended June 30, 2018. During the six-month period ended June 30, 2019, we had proceeds of $21.7 million from the maturity of marketable securities, spent $14.0 million in net capital expenditures and spent $1.2 million to purchase marketable securities.During the six-month period ended June 30, 2018, we spent $159.4 million to purchase of marketable securities, $3.6million on the acquisition of Smadex, $5.7million on net capital expenditures and $3.2 million on the purchase of intangible assets and received $25.0 million in proceeds from the maturity of marketable securities.We anticipate that our capital expenditures will be approximately $20.8 million during the full year 2019. Of this amount, we expect that approximately $6.3 million will beexpended 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 $20.0 million for the six-month period ended June 30, 2019, compared to net cash flow used in financing activities of $22.3 million for the six-month period ended June 30, 2018. During the six-month period ended June 30, 2019, we made dividend payments of $8.5 million, principal debt repayments of $1.5 million and spent $9.0 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 six-month period ended June 30, 2018, we made dividend payments of $9.0 million, and spent $7.7 million for the repurchase of Class A common stock under our stock repurchase program, and $2.2 million for taxes related to shares withheld for share-based compensation plans, and made contingent consideration payments of $2.0 million and principal debt repayments of $1.5 million.

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 June 30, 2019, we had $244.7 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 June 30, 2019 level, our annual interest expense would increase and cash flow from operations would decrease by approximately $2.5 million based on the outstanding balance of our term loan as of June 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 U.S., 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 June 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.

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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.

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 relating to 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 started to implement 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 the 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;

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• redesigning controls at Headway to increase the level of precision at which they function;

• 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;

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

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

We believe that a remediation plan incorporating the measures described above will remediate the material weaknesses previously identified and strengthen our internal control over financial reporting. As we finalize and continue to implement 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.

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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. 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 June 30, 2019, we repurchased 0.4 million shares of our Class A common stock for an aggregate purchase price of $1.3 million, or an average price per share of $2.95. As of June 30, 2019, we have repurchased a total of approximately 7.0 million shares of our Class A common stock for an aggregate purchase price of approximately $28.1 million, or an average price per share of $3.98, since the beginning of the share repurchase program. All such repurchased shares were retired as of June 30, 2019.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

10.1*	Executive Employment Agreement effective as of May 13, 2019 by and between the registrant and Karl Meyer.
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.

44

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: August 8, 2019

45

EX-10.1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is entered into effective as of May 13, 2019 (the “Effective Date”) by and between Entravision Communications Corporation, a Delaware corporation (the “Company”), and Karl Meyer (the “Executive”).

1.Employment.

a.The Executive shall serve as the Company’s Chief Revenue and Product Officer during the Employment Term (as defined below).  The Executive will perform such duties as assigned from time to time by the Company’s Chief Executive Officer (the “CEO”), which are expected to principally include responsibility for overseeing the Company’s revenue generation from the Company’s media platforms.  The Executive shall report directly to the CEO, or such other person as may be designated by the CEO.  In performing his duties, the Executive will abide by all applicable federal, state and local laws, as well as the Company’s bylaws, rules, regulations and policies, as may be amended from time to time.

b.The Executive shall devote his entire productive time, ability and attention to the Company’s business during the Employment Term.  The Executive shall not engage in any other business duties or pursuits whatsoever, or directly or indirectly render any services of a business, commercial or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the CEO.  The foregoing shall not preclude the Executive from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to passive private investments or from serving on the boards of directors of other entities (provided that any director position shall require the prior written consent of the CEO), as long as such activities and/or services do not interfere or conflict with his responsibilities to the Company, and any provision of this Agreement.  The Executive shall not directly or indirectly acquire, hold or retain any interest in any business competing with or similar in nature to the business of the Company, or which in any other way creates a conflict of interest, except for up to one percent (1%) ownership interests in public companies.  During the Employment Term, the Executive shall not in any way engage or participate in any business that is in competition with the Company.

2.Term.  The term of this Agreement will be for a period beginning on the Effective Date through April 30, 2022, unless the Executive’s employment is earlier terminated as provided in this Agreement (the term of such employment, the “Employment Term”).

3.Salary and Benefits.

a.Salary.  The Executive will receive an annual base salary of $500,000, payable in equal installments according to the Company’s regular paydays, less any applicable taxes and withholding (the “Base Annual Compensation”).  The Base Annual Compensation may be increased in the discretion of the Company’s Compensation Committee, with reference to the increase in base compensation given, in the same time period, to the Company’s employees and other senior executive officers and such other factors as may be considered by the Company’s Compensation Committee, in its sole discretion.

b.Bonus.  The Executive is eligible for bonus as set forth on Exhibit A hereto.

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c.Benefit Coverage.  During the Employment Term, the Company shall pay for the cost of medical and dental coverage for the Executive and the Executive’s dependents under the Company’s established medical and dental benefit plans at no cost to the Executive; provided, that if the provision of any such coverage under a fully-insured plan would subject the Company to an excise tax, then the foregoing provision shall not apply. The Executive is entitled to participate in all other executive benefit programs and plans established by the Company from time to time for the benefit of its executives generally and for which the Executive is eligible.  

d.Time Off and Holidays.  The Executive will be entitled to discretionary time off in accordance with the policies established by the Company for its employees, as may be amended from time to time.  The Executive will also be entitled to the paid holidays as set forth in the Company’s policies.

e.Automobile Allowance.  The Executive will receive $750.00 per month as an allowance in respect of automobile expenses, payable monthly, in accordance with the Company’s payroll schedule.

f.Equity Incentive Grants.  The Executive is eligible for equity incentive grants under the Entravision Communications Corporation 2004 Equity Incentive Plan.

g.Expenses.  The Company will pay on behalf of the Executive (or reimburse the Executive for) reasonable expenses incurred by the Executive at the request of, or on behalf of, the Company in performance of the Executive’s duties pursuant to this Agreement, and in accordance with the Company’s employment policies.  The Executive must prepare and submit expense reports with respect to such expenses in accordance with the Company’s policies.

h.Miscellaneous.  The Company will indemnify the Executive consistent with the Company’s other executive officers and its legal obligations under California Labor Code Section 2802.

4.Termination of Employment.

a.The Company or the Executive may terminate this Agreement and the Executive’s employment at any time, with or without Cause (as defined below).  

b.In the event the Executive is terminated for “Cause,” the Executive shall not be entitled to any severance compensation or any other compensation from the Company except for such salary and benefits as the Executive may have earned prior to the Executive’s termination.  If terminated for “Cause,” the Executive shall be ineligible for any bonus, prorated or otherwise.  For purposes of this Agreement, the Company may terminate this Agreement for “Cause” for any of the following reasons:

(i)The Executive’s continued failure to substantially perform his job duties and responsibilities, provided that written notice is provided by the Company and the performance problem is not satisfactorily cured within thirty (30) days;

(ii)The Executive’s serious misconduct, dishonesty or disloyalty, which is actually or potentially harmful to the Company;

(iii)The Executive’s willful, reckless or grossly negligent act or omission that is materially harmful to the Company;

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(iv)The Executive’s material breach of any provision of this Agreement, provided written notice of such breach is given by the Company and the Executive is given at least thirty (30) days to cure the breach; or

(v)A final determination by the Federal Communications Commission (the “FCC”) that the Executive has committed an act or omission that has directly caused the Company to be disqualified as a licensee of the FCC or to suffer sanctions by the FCC.

c.Termination without Cause or for Good Reason.  In the event that (i) the Company terminates the Executive’s employment without Cause, or (ii) the Executive voluntarily terminates his employment for Good Reason (as provided below), then, in addition to salary and benefits earned by the Executive prior to and through the Termination Date, and subject to compliance with Section 4.e., the Company will pay to the Executive severance compensation in an aggregate amount as follows: (A) the Executive’s then-current Base Annual Compensation multiplied by 0.5, plus (B) a prorated bonus amount which shall be equal to the product of: (x) the Quarterly Bonus (as such term is defined on Exhibit A) that Executive would be entitled to receive pursuant to Exhibit A, if any, had Executive’s employment not been terminated during the quarter for such Quarterly Bonus, multiplied by (y) a fraction, the numerator of which is the number of days preceding such termination in the then-current calendar quarter, and the denominator of which is 90, plus (C) if (and only if) the termination occurs in the fourth quarter of the year, a prorated bonus amount which shall be equal to the product of: (x) the Annual Bonus (as such term is defined on Exhibit A) that Executive would be entitled to receive pursuant to Exhibit A, if any, had Executive’s employment not been terminated during the fourth quarter, multiplied by (y) a fraction, the numerator of which is the number of days during the year in which Executive was employed by the Company and the denominator of which is 365.

d.Good Reason.

(i)Definition of Good Reason.  For purposes of this Agreement, “Good Reason” shall mean the existence or occurrence of any of the following conditions during the Term without the Executive’s written consent: (i) a material reduction in the Executive’s then-current Base Annual Compensation, unless such reduction is applicable generally to similarly-situated senior executives of the Company, (ii) a Change in Control (as defined below) of the Company in which the Executive is not offered continued employment as (1) a senior executive of the Company, (2) a senior executive of the surviving entity or (3) a senior executive of a separate division or subsidiary of the surviving entity (provided that such division or subsidiary must have assets and operations comparable to the assets and operations of the Company immediately prior to the Change in Control) or (iii) the requirement, within one hundred twenty (120) days following a Change in Control of the Company, that the Executive move the principal location at which Executive’s job duties will be based outside the Los Angeles, California metropolitan area.

(ii)Definition of Change in Control.  For purposes of this Agreement, “Change in Control” shall mean the sale of the Company or the sale of all or substantially all of the Company’s assets, by means of any transaction or series or related transactions (including, without limitation, any reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Company), where the Company’s stockholders of record as constituted immediately prior to such acquisition will, immediately after such acquisition, hold less than fifty percent (50%) of the voting power of the surviving or acquiring entity.

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(iii)Procedures.  Notwithstanding any provision in this Agreement to the contrary, any termination of employment by the Executive will not be for Good Reason unless: (i) Executive delivers written notice to the Company, in accordance with Section 9 below, of the initial existence of the condition which the Executive believes constitutes Good Reason within ninety (90) days of the initial existence of such condition, and which notice specifically identifies such condition, (ii) the Company fails to cure such condition within thirty (30) days after the date the Company receives such notice (the “Cure Period”), and (iii) the Executive actually terminates Executive’s employment within sixty (60) days after the expiration of the Cure Period and before the Company cures such condition.  If the Executive terminates Executive’s employment before the expiration of the Cure Period or after the Company remedies the condition (even if after the end of the Cure Period), then the Executive’s termination of employment will not be considered to be for Good Reason.

e.Payment of Severance Payments.  The payment of any consideration provided under Section 4 shall be payable in accordance with the Company’s customary payment practices, less all applicable federal and state taxes and withholdings.  Notwithstanding any provision in this Agreement to the contrary, the Company shall not have any obligation to pay any amount or provide any benefit, as the case may be, under this Agreement pursuant to Section 4, unless the Executive executes, delivers to the Company, and does not revoke (to the extent Executive is permitted to do so), a general release within sixty (60) days of the Executive’s termination of employment with the Company, which shall set forth a release of the Company and its affiliates, in a form acceptable to the Company, of all claims against the Company and its affiliates relating to the Executive’s employment and termination thereof, and which may also include an agreement to continue to comply with and be bound by, the provisions of Section 7.  Subject to Section 8, the severance consideration payable under Section 4.c. shall be made in six (6) equal monthly installments, commencing with the first payroll date that occurs coincident with or following the sixty-first (61st) day after the Executive’s “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (provided, however, that any bonus due pursuant to clauses (B) and (C) of Section 4.c. shall be paid in a lump sum at the time and in the manner specified in Exhibit A).  Subject to Section 8, each subsequent monthly installment shall thereafter be paid on a regularly scheduled payroll date of the Company.  Notwithstanding anything to the contrary in the foregoing, a termination of the Executive’s employment for purposes of this Section 4, shall be deemed to have occurred only if such termination constitutes a “separation from service” within the meaning of Code Section 409A, determined by applying the default rules thereof

5.Compliance with Section 409A of the Code.  For purposes of applying the provisions of Section 409A of the Code to this Agreement, each separately identified amount to which the Executive is entitled under this Agreement shall be treated as a separate payment.  In addition, to the extent permissible under Section 409A of the Code, any series of installment payments under this Agreement shall be treated as a right to a series of separate payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

6.Recoupment.  Notwithstanding anything in this Agreement to the contrary, all incentive compensation payments made to the Executive under this Agreement or otherwise are subject to recoupment by the Company pursuant to any recoupment policy approved by the Board, as it may be adopted, amended from time to time or as otherwise may be required by law from time to time hereafter.  

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7.Confidentiality.

a.The Executive recognizes that his employment with the Company will involve contact with information of substantial value to the Company, which is not generally known to the public and which gives the Company an advantage over its competitors who do not know or use it, including, without limitation, techniques, designs, drawings, processes, inventions, developments, equipment, prototypes, sales and customer information and business and financial information relating to the business, products, practices and techniques of the Company (hereinafter referred to as “Confidential Information”).  Confidential Information includes all information disclosed by the Company or its clients, and information learned by the Executive during the course of employment with the Company.  Notwithstanding the foregoing, Confidential Information shall not be information which: (i) has entered the public domain through no action or failure to act of the Executive; (ii) prior to disclosure hereunder was already lawfully in the Executive’s possession without any obligation of confidentiality; (iii) subsequent to disclosure hereunder is obtained by the Executive on a non-confidential basis from a third party who has the right to disclose such information to the Executive; or (iv) is ordered to be or otherwise required to be disclosed by the Executive by a court of law or other governmental body; provided, however, that the Company is notified of such order or requirement and given a reasonable opportunity to intervene.

b.At all times during and after the Executive’s employment with the Company, he will keep confidential and not use or disclose to any third party any Confidential Information, except in the course of his employment with the Company.  

c.While employed by the Company and for one (1) year thereafter, the Executive may not, either directly or through any other person or entity (i) solicit or attempt to solicit any employee, consultant, vendor or independent contractor of the Company or (ii) use Confidential Information to solicit or attempt to solicit the business of any customer, vendor or distributor of the Company which, at the time of termination or one (1) year immediately prior thereto, was listed on the Company’s customer, vendor or distributor list.

8.Payments to Specified Employees.  Notwithstanding any other Section of this Agreement, if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(b)(i) and Treasury Regulation Section 1.409A-1(i) at the time of the Executive’s separation from service, payments or distributions of property to the Executive provided under this Agreement, to the extent considered amounts deferred under a non-qualified deferred compensation plan (as defined in Code Section 409A), shall be deferred until the six (6) month anniversary of such separation from service to the extent required in order to comply with Code Section 409A and Treasury Regulation Section 1.409A-3(i)(2).  If any payments are required to be delayed pursuant to this Section 8, such payments will be made as soon as practicable on the Company’s next regularly scheduled payroll date after the six (6) month anniversary of the Executive’s separation from service without interest thereon.

9.Notices.  Notices and all other communications under this Agreement shall be in writing and shall be deemed given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the party’s last known address.

10.Waiver of Breach.  The waiver by either party, or the failure of either party to claim a breach of any provision of this Agreement, shall not operate or be construed as a waiver of any subsequent breach.

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11.Assignment.  The rights and obligations of the respective parties hereto under this Agreement shall inure to the benefit of and shall be binding upon the heirs, legal representatives, successors and assigns of the parties hereto; provided, however, that this Agreement shall not be assignable by the Executive without prior written consent of the Company.

12.Entire Agreement.  This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter hereof and contains all of the covenants and agreements between the parties with respect to said subject matter in any manner whatsoever.  Any modification of this Agreement will be effective only if it is in writing and signed by both the Executive and the Company.

13.Governing Law.  This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of California.

14.Partial Invalidity.  If any provision of this Agreement is found to be invalid or unenforceable by any court, the remaining provisions hereof shall remain in effect unless such partial invalidity or unenforceability would defeat an essential business purpose of this Agreement.

15.Remedy for Breach.  In the event any action at law or in equity or other proceeding is brought to interpret or enforce this Agreement, or in connection with any provision with this Agreement, the prevailing party shall be entitled to its reasonable attorneys’ fees and other costs reasonable incurred in such action or proceeding.

16.Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall together constitute one and the same instrument.  To the maximum extent permitted by law or any applicable governmental authority, any document may be signed and transmitted by facsimile or other electronic transmission with the same validity as if it were an ink-signed document.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.  

“Company”	Entravision Communications Corporation,
	a Delaware corporation
	By:	/s/ Walter F. Ulloa
	Walter F. Ulloa
	Chairman and Chief Executive Officer
“Executive”	/s/ Karl Meyer
	Karl Meyer

[Signature Page to Executive Employment Agreement]

Exhibit A

Executive will be eligible to receive bonus compensation as follows:

1.Quarterly Bonus.  Executive shall be eligible to receive a quarterly bonus (the “Quarterly Bonus”) of $50,000 per quarter for the first three quarters of the Company’s fiscal year, subject to reduction as follows:

a.In the event that actual Net Revenue accomplished during the applicable quarter is less than the Quarterly Target Net Revenue, then the Quarterly Bonus will be reduced by two percentage points for every one full percentage point that the achieve Net Revenue is less than the Quarterly Target Net Revenue.  For example, if Executive achieves 95% of applicable target Net Revenue, then 90% of the full Quarterly Bonus will be earned, or $45,000.

b.In the event that actual Net Revenue accomplished during the applicable quarter is less than 95% of the Quarterly Target Net Revenue, then the Quarterly Bonus will be reduced by three percentage points for every one full percentage point that the achieve Net Revenue is less than the Quarterly Target Net Revenue.  For example, if Executive achieves 90% of applicable target Net Revenue, then 70% of the full Quarterly Bonus will be earned, or $35,000.

c.In the event that actual Net Revenue accomplished during the applicable quarter is less than 88% of the Quarterly Target Net Revenue, Executive receives no bonus for such quarter.

Any Quarterly Bonus earned by the Executive will be paid within three months following the end of the quarter in which the Quarterly Bonus is earned.

2.Annual Bonus.  Executive shall be eligible to receive an annual bonus (the “Annual Bonus”) of $150,000 in the event that actual Net Revenue accomplished during the applicable year at least 101% of the Annual Target Net Revenue.  Any Annual Bonus earned by the Executive will be paid within three months following the end of the year in which the Annual Bonus is earned.

3.Overachievement.  Executive shall be eligible to receive an annual overachievement bonus (the “Overachievement Bonus”) equal to (1) $18,000 multiplied by (2) (a) every whole percentage point that the actual Net Revenue accomplished during the applicable year exceeds the Annual Target Net Revenue minus (b) one.  For example, if Executive achieves 105% of applicable target Net Revenue, then Executive shall receive an Overachievement Bonus equal to $18,000 multiplied by four, or $72,000.  The maximum Overachievement Bonus is $600,000.  Any Overachievement Bonus earned by the Executive will be paid within three months following the end of the year in which the Overachievement Bonus is earned.

4.Defined Terms.

a.“COGS”, or “Cost of Goods Sold”, means the purchase of digital inventory for the embedding or placement of content or content advertising, and shall include, if applicable, (i) the purchase of data used for targeting audience impressions, and (ii) any third-party expenses of ad serving (i.e., the placement, management and reporting of digital advertisements), in connection with an advertising order. COGS calculations shall be determined by the Company in its sole discretion.

b.“Net Revenue” means, with respect to each applicable bonus period, the gross revenue generated by the Company (excluding the Headway business unit, the “Legacy Company”) from the sale of broadcast and digitaladvertising during such bonus period, less (i) third party advertising agency commissions, (ii)all salary, bonus and commissions paid to Legacy Company sales employees (not including any marketing employees), (iii) travel expenses incurred by Legacy Company sales employees (not including any marketing employees), (iv) all compensation and fees paid to the Legacy Company’s on-air talent (excluding on-air talent employed by the Company’s news division), (v) commercial event production costs, (vi) local promotional expenses (including point of sale activations and client lead expenses), and (vii) sales and marketing materials and research (including Nielsen-related costs).  Net Revenue calculations shall be determined by the Company in its sole discretion.

c.“Annual Target Net Revenue” means Executive’s annual budgeted Net Revenue goal provided to Executive by the Company, in its discretion (and as may be adjusted from time to time by the Company).

d.“Quarterly Target Net Revenue” means Executive’s quarterly budgeted Net Revenue goal provided to Executive by the Company, in its discretion (and as may be adjusted from time to time by the Company).

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 05, 2019
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	EVC
Entity Registrant Name	ENTRAVISION COMMUNICATIONS CORP
Entity Central Index Key	0001109116
Entity Current Reporting Status	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 Tax Identification Number	954783236
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	California
Entity Address, Postal Zip Code	90404
City Area Code	310
Local Phone Number	447-3870
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		60,688,900
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

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 52,631	$ 46,733
Marketable securities	113,349	132,424
Restricted cash	732	732
Trade receivables, (including related parties of $5,145 and $4,530) net of allowance for doubtful accounts of $3,032 and $3,395	69,841	79,308
Assets held for sale	1,179	1,179
Prepaid expenses and other current assets (including related parties of $274 and $274)	12,558	10,672
Total current assets	250,290	271,048
Property and equipment, net of accumulated depreciation of $187,226 and $187,375	74,502	64,939
Intangible assets subject to amortization, net of accumulated amortization of $95,646 and $93,793 (including related parties of $7,712 and $8,327)	19,442	22,598
Intangible assets not subject to amortization	254,598	254,598
Goodwill	51,857	74,292
Operating leases right of use asset	46,206
Other assets	2,684	2,934
Total assets	699,579	690,409
Current liabilities
Current maturities of long-term debt	3,000	3,000
Accounts payable and accrued expenses (including related parties of $2,415 and $1,948)	46,198	51,034
Operating lease liabilities	11,420
Total current liabilities	60,618	54,034
Long-term debt, less current maturities, net of unamortized debt issuance costs of $2,718 and $2,709	239,032	240,541
Long-term operating lease liabilities	41,091
Other long-term liabilities	7,516	16,418
Deferred income taxes	48,401	46,684
Total liabilities	396,658	357,677
Commitments and contingencies (note 6)
Stockholders' equity
Additional paid-in capital	846,345	862,299
Accumulated deficit	(543,019)	(528,164)
Accumulated other comprehensive income (loss)	(414)	(1,412)
Total stockholders' equity	302,921	332,732
Total liabilities and stockholders' equity	699,579	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 Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Trade receivables, related parties	$ 5,145	$ 4,530
Trade receivables, allowance for doubtful accounts	3,032	3,395
Prepaid expenses and other current assets	12,558	10,672
Property and equipment, accumulated depreciation	187,226	187,375
Accumulated amortization of Intangible assets	95,646	93,793
Intangible assets subject to amortization, net	19,442	22,598
Accounts payable and accrued expenses	46,198	51,034
Unamortized debt issuance costs	2,718	2,709
Related Parties
Prepaid expenses and other current assets	274	274
Intangible assets subject to amortization, net	7,712	8,327
Accounts payable and accrued expenses	$ 2,415	$ 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	60,718,613	63,210,531
Common stock, shares outstanding	60,718,613	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 Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net Revenue	$ 69,241,000	$ 74,329,000	$ 133,921,000	$ 141,167,000
Expenses:
Direct operating expenses (including related parties of $2,007, $2,208, $3,969 and $4,256) (including non-cash stock-based compensation of $116, $76, $250 and $293)	29,655,000	31,117,000	58,585,000	62,150,000
Selling, general and administrative expenses	13,545,000	12,673,000	27,359,000	25,967,000
Corporate expenses (including non-cash stock-based compensation of $719, $1,100, $1,385 and $2,133)	6,501,000	6,266,000	13,395,000	12,241,000
Depreciation and amortization (includes direct operating of $2,968, $2,560, $5,462 and $5,097; selling, general and administrative of $1,176, $1,301, $2,445 and $2,614; and corporate of $162, $153, $315 and $242) (including related parties of $307, $307, $615 and $614)	4,306,000	4,019,000	8,222,000	7,958,000
Change in fair value contingent consideration	(2,735,000)	(913,000)	(2,376,000)	1,187,000
Impairment charge	22,368,000		22,368,000
Foreign currency (gain) loss	(82,000)	(17,000)	50,000	196,000
Other operating (gain) loss	(1,597,000)	(273,000)	(3,593,000)	(295,000)
Operating income (loss)	(11,579,000)	10,073,000	(6,590,000)	9,754,000
Interest expense	(3,554,000)	(4,001,000)	(7,044,000)	(7,399,000)
Interest income	857,000	1,039,000	1,776,000	1,952,000
Dividend income	251,000	417,000	506,000	545,000
Income (loss) before income taxes	(14,025,000)	7,528,000	(11,352,000)	4,852,000
Income tax benefit (expense)	(2,252,000)	(2,652,000)	(3,345,000)	(1,721,000)
Income (loss) before equity in net income (loss) of nonconsolidated affiliate	(16,277,000)	4,876,000	(14,697,000)	3,131,000
Equity in net income (loss) of nonconsolidated affiliate, net of tax	(2,000)	(36,000)	(158,000)	(98,000)
Net income (loss)	$ (16,279,000)	$ 4,840,000	$ (14,855,000)	$ 3,033,000
Basic and diluted earnings per share:
Net income (loss) per share, basic and diluted	$ (0.19)	$ 0.05	$ (0.17)	$ 0.03
Cash dividends declared per common share	$ 0.05	$ 0.05	$ 0.10	$ 0.05
Weighted average common shares outstanding, basic	85,359,998	88,959,935	85,728,820	89,635,759
Weighted average common shares outstanding, diluted	85,359,998	90,021,949	85,728,820	90,805,086
Digital Media
Net Revenue	$ 16,804,000	$ 20,558,000	$ 31,276,000	$ 38,802,000
Expenses:
Cost of revenue	8,859,000	11,384,000	16,501,000	22,009,000
Direct operating expenses (including related parties of $2,007, $2,208, $3,969 and $4,256) (including non-cash stock-based compensation of $116, $76, $250 and $293)	4,970,000	5,144,000	9,465,000	9,953,000
Selling, general and administrative expenses	3,515,000	2,620,000	6,740,000	5,336,000
Depreciation and amortization (includes direct operating of $2,968, $2,560, $5,462 and $5,097; selling, general and administrative of $1,176, $1,301, $2,445 and $2,614; and corporate of $162, $153, $315 and $242) (including related parties of $307, $307, $615 and $614)	1,173,000	$ 1,121,000	2,497,000	$ 2,237,000
Impairment charge	$ 22,400,000		$ 22,368,000

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Consolidated Statements of Operations (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Direct operating expenses	$ 29,655	$ 31,117	$ 58,585	$ 62,150
Non-cash stock-based compensation			1,635	2,425
Depreciation and amortization	4,306	4,019	8,222	7,958
Related Parties
Direct operating expenses	2,007	2,208	3,969	4,256
Depreciation and amortization	307	307	615	614
Direct Operating Expenses
Non-cash stock-based compensation	116	76	250	293
Depreciation and amortization	2,968	2,560	5,462	5,097
Corporate Expenses
Non-cash stock-based compensation	719	1,100	1,385	2,133
Depreciation and amortization	162	153	315	242
Selling, General and Administrative Expenses
Depreciation and amortization	$ 1,176	$ 1,301	$ 2,445	$ 2,614

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)	$ (16,279)	$ 4,840	$ (14,855)	$ 3,033
Other comprehensive income (loss), net of tax:
Change in foreign currency translation	(318)	(550)	(288)	(260)
Change in fair value of available for sale securities	523	(3)	1,286	(1,242)
Total other comprehensive income (loss)	205	(553)	998	(1,502)
Comprehensive income (loss)	$ (16,074)	$ 4,287	$ (13,857)	$ 1,531

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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)	(260)
Net income (loss)	3,033
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
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
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
Tax payments related to shares withheld for share-based compensation plans	(42)								(42)
Tax payments related to shares withheld for share-based compensation plans, 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)	(288)
Net income (loss)	(14,855)
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	60,718,613	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)	$ (1,300)							(1,302)
Repurchase of Class A common stock, Shares		(400,000)			(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	60,718,613	14,927,613	9,352,729

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ (16,279,000)	$ 1,424,000	$ 4,840,000	$ (1,808,000)	$ (14,855,000)	$ 3,033,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	4,306,000		4,019,000		8,222,000	7,958,000
Impairment charge	22,368,000				22,368,000		$ 0
Deferred income taxes					1,472,000	1,029,000
Non-cash interest					489,000	538,000
Amortization of syndication contracts					249,000	352,000
Payments on syndication contracts					(227,000)	(360,000)
Equity in net (income) loss of nonconsolidated affiliate					158,000	98,000
Non-cash stock-based compensation					1,635,000	2,425,000
(Gain) loss on disposal of property and equipment					161,000
Changes in assets and liabilities:
(Increase) decrease in accounts receivable					9,619,000	9,170,000
(Increase) decrease in prepaid expenses and other assets					2,680,000	(6,547,000)
Increase (decrease) in accounts payable, accrued expenses and other liabilities					(12,301,000)	(780,000)
Net cash provided by operating activities					19,670,000	16,916,000
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles						33,000
Purchases of property and equipment					(13,982,000)	(5,710,000)
Purchases of intangible assets						(3,153,000)
Purchase of a businesses, net of cash acquired						(3,563,000)
Purchases of marketable securities					(1,160,000)	(159,403,000)
Proceeds from marketable securities					21,681,000	25,000,000
Purchases of investments					(300,000)	(35,000)
Net cash provided by (used in) investing activities					6,239,000	(146,831,000)
Cash flows from financing activities:
Proceeds from stock option exercises						106,000
Tax payments related to shares withheld for share-based compensation plans					(751,000)	(2,239,000)
Payments on long-term debt					(1,500,000)	(1,500,000)
Dividends paid					(8,540,000)	(8,960,000)
Repurchase of Class A common stock					(9,008,000)	(7,660,000)
Payment of contingent consideration						(2,015,000)
Payments of capitalized debt costs					(225,000)
Net cash used in financing activities					(20,024,000)	(22,268,000)
Effect of exchange rates on cash, cash equivalents and restricted cash					13,000	(10,000)
Net increase (decrease) in cash, cash equivalents and restricted cash					5,898,000	(152,193,000)
Cash, cash equivalents and restricted cash:
Beginning		$ 47,465,000		$ 261,854,000	47,465,000	261,854,000	261,854,000
Ending	$ 53,363,000		$ 109,661,000		53,363,000	109,661,000	$ 47,465,000
Cash payments for:
Interest					6,555,000	6,861,000
Income taxes					1,873,000	692,000
Supplemental disclosures of non-cash investing and financing activities:
Capital expenditures financed through accounts payable, accrued expenses and other liabilities					1,530,000	400,000
Contingent consideration included in accounts payable, accrued expenses and other liabilities					$ 5,743,000	$ 11,280,000

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Basis of Presentation

6 Months Ended

Jun. 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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The Company and Significant Accounting Policies

6 Months Ended

Jun. 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 June 30, 2019, based upon the type of advertising medium, which segments are television, radio and digital. As of June 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 June 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 June 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the six-month periods ended June 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $4.0 million and $4.3 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 June 30, 2019, the amount due to the Company from Univision was $5.1 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During each of the three-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $9.1 million, of which $7.0 million and $7.5 million, respectively, relate to the Univision proxy agreement. During the six-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $17.8 million and $18.0 million, respectively, of which $13.7 million and $15.1 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 $1.2 million for the three-month periods ended June 30, 2019 and 2018, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $1.6 million and $2.4 million for the six-month periods ended June 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 June 30, 2019, there was de minimis 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):

	Six-Month Period
	Ended June 30, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

As of June 30, 2019, there was approximately $3.1 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.3 years.

Income (Loss) Per Share

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

	Three-Month Period					Six-Month Period
	Ended June 30,					Ended June 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03
Diluted earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Dilutive securities:
Stock options and restricted stock units	-				1,062,014		-			1,169,327
Diluted shares outstanding		85,359,998			90,021,949		85,728,820			90,805,086
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03

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 six-month periods ended June 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 952,026 and 1,001,636 equivalent shares of dilutive securities for the three- and six-month periods ended June 30, 2019, respectively.

For the three- and six-month periods ended June 30, 2018, a total of 242,735 and 139,468 shares of dilutive securities, respectively, were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares.

Goodwill 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.

The Company conducted a review of the fair value of the digital reporting unit in the second quarter 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 $22.4 million during the quarter ended June 30, 2019.

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

	December 31, 2018		Currency			Impairment			June 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(22,368	)		11,308
Consolidated	$	74,292	$	(67	)	$	(22,368	)	$	51,857

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. 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.  

The Company repurchased 0.4 million shares of Class A common stock at an average price of $2.95, for an aggregate purchase price of approximately $1.3 million, during the three-month period ended June 30, 2019. As of June 30, 2019, the Company has repurchased a total of approximately 7.0 million shares of Class A common stock, for an aggregate purchase price of approximately $28.1 million, or an average price per share of $3.98, since the beginning of the share repurchase program. All such repurchased shares were retired as of June 30, 2019.

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 to (a) 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 2013 Credit Agreement, (b) 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 its 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”).

In the event the Company engages in a transaction that has the effect of reducing the yield of any loans outstanding under the Term Loan B Facility within six months of the Closing Date, the Company will owe 1% of the amount of the loans so repriced or replaced to the Lenders thereof (such fee, the “Repricing Fee”). Other than the Repricing Fee, 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 June 30, 2019 was $242.0 million, net of $2.7 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of June 30, 2019 was $233.7 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):

	June 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	$	37.2	$	-	$	37.2		$	-
Certificates of deposit	$	7.8	$	-	$	7.8		$	-
Corporate bonds	$	105.6	$	-	$		105.6	$	-
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 June 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 June 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	$	2,880	$	1	$	29,997	$	41
Due after one year through five years		4,882		19		75,206		323
Total	$	7,762	$	20	$	105,203	$	364

The Company periodically reviews its available for sale securities for other-than-temporary impairment. For the three- and six-month periods ended June 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 six-month periods ended June 30, 2019 was interest income related to the Company’s available-for-sale securities of $0.8 and $1.7 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 six-month periods ended June 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	)

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.  As of June 30, 2019, the Company adjusted the selling price to current market conditions and believes that the long-lived asset continues to meet the criteria for classification as an asset held for sale. Assets held for sale are classified as current assets as management believes the sale will be completed within one year.

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 this ASU 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 this ASU 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 in the process of assessing the impact of this ASU 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 this ASU 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 June 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 this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of 2019 which 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 the rule in the first quarter of 2019 and included a statement of stockholders’ equity in our Form 10-Q.

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Revenues

6 Months Ended

Jun. 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 ad, 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 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 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.

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 six-month periods ended (in thousands):

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Broadcast advertising	$	37,237	$	41,533	$	71,945	$	79,242
Digital advertising		16,804		20,558		31,276		38,802
Spectrum usage rights		3,952		523		9,036		631
Retransmission consent		9,086		9,143		17,846		17,996
Other		2,162		2,572		3,818		4,496
Total revenue	$	69,241	$	74,329	$	133,921	$	141,167

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 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 six-month periods ended (in thousands):

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Local direct	$	6,456	$	7,059	$	12,511	$	13,975
Local agency		14,966		15,521		28,666		30,114
National agency		15,815		18,953		30,768		35,153
Total  revenue	$	37,237	$	41,533	$	71,945	$	79,242

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 six-month period ended June 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 *		June 30, 2019
Deferred revenue	$	2,759	1,593	(2,759	)	$	1,593

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

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Leases

6 Months Ended

Jun. 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 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 June 30, 2019:

(in thousands)
Remainder of 2019	$	5,747
2020		11,620
2021		9,222
2022		7,788
2023		6,177
2024 and thereafter		36,646
Total minimum payments	$	77,200
Less amounts representing interest		(29,048	)
Present value of minimum lease payments	$	48,152

The weighted average remaining lease term and the weighted average discount rate used to calculate the Company’s lease liabilities as of June 30, 2019 were 14.0 years and 6.2%, respectively.

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

(in thousands)	Six-Month Period Ended June 30, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	2,910
Non-cash additions to operating lease assets	$	4,359

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 six-months ended June 30, 2019:

	Three-Month Period		Six-Month Period
	Ended June 30,		Ended June 30,
(in thousands)	2019		2019
Operating lease cost	$	2,560	$	4,957
Variable lease cost	369		790
Short-term lease cost	182		289
Total lease cost	$	3,111	$	6,036

For the three-month periods ended June 30, 2019 lease cost of $1.4 million, $1.6 million and $0.1 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively. For the six-month periods ended June 30, 2019 lease cost of $2.7 million, $3.0 million and $0.3 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively.

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Segment Information

6 Months Ended

Jun. 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 June 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 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.

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 17% and 20% of its revenue outside the United States during the three-month periods ended June 30, 2019 and June 30, 2018, respectively. The Company generated 16% and 19% of its revenue outside the United States during the six-month periods ended June 30, 2019 and June 30, 2018, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Six-Month Period
	Ended June 30,						%			Ended June 30,						%
		2019			2018		Change				2019			2018		Change
Net revenue
Television	$	38,071		$	36,531			4	%	$	76,324		$	71,022			7	%
Radio		14,366			17,240			(17	)%		26,321			31,343			(16	)%
Digital		16,804			20,558			(18	)%		31,276			38,802			(19	)%
Consolidated		69,241			74,329			(7	)%		133,921			141,167			(5	)%
Cost of revenue - digital media		8,859			11,384			(22	)%		16,501			22,009			(25	)%
Direct operating expenses
Television		15,157			15,038			1	%		30,084			30,588			(2	)%
Radio		9,528			10,935			(13	)%		19,036			21,609			(12	)%
Digital		4,970			5,144			(3	)%		9,465			9,953			(5	)%
Consolidated		29,655			31,117			(5	)%		58,585			62,150			(6	)%
Selling, general and administrative expenses
Television		5,634			5,551			1	%		11,448			11,523			(1	)%
Radio		4,396			4,502			(2	)%		9,171			9,108			1	%
Digital		3,515			2,620			34	%		6,740			5,336			26	%
Consolidated		13,545			12,673			7	%		27,359			25,967			5	%
Depreciation and amortization
Television		2,562			2,277			13	%		4,822			4,481			8	%
Radio		571			621			(8	)%		903			1,240			(27	)%
Digital		1,173			1,121			5	%		2,497			2,237			12	%
Consolidated		4,306			4,019			7	%		8,222			7,958			3	%
Segment operating profit (loss)
Television		14,718			13,665			8	%		29,970			24,430			23	%
Radio		(129	)		1,182		*				(2,789	)		(614	)		354	%
Digital		(1,713	)		289		*				(3,927	)		(733	)		436	%
Consolidated		12,876			15,136			(15	)%		23,254			23,083			1	%
Corporate expenses		6,501			6,266			4	%		13,395			12,241			9	%
Change in fair value contingent consideration		(2,735	)		(913	)		200	%		(2,376	)		1,187		*
Impairment charge		22,368			-		*				22,368			-		*
Foreign currency (gain) loss		(82	)		(17	)		382	%		50			196			(74	)%
Other operating (gain) loss		(1,597	)		(273	)		485	%		(3,593	)		(295	)		1,118	%
Operating income (loss)		(11,579	)		10,073		*				(6,590	)		9,754		*
Interest expense	$	(3,554	)	$	(4,001	)		(11	)%	$	(7,044	)	$	(7,399	)		(5	)%
Interest income		857			1,039			(18	)%		1,776			1,952			(9	)%
Dividend income		251			417			(40	)%		506			545			(7	)%
Income (loss) before income taxes		(14,025	)		7,528		*				(11,352	)		4,852		*
Capital expenditures
Television	$	7,661		$	1,942					$	14,002		$	4,023
Radio		199			81						581			162
Digital		121			181						240			247
Consolidated	$	7,981		$	2,204					$	14,823		$	4,432
	June 30,			December 31,
Total assets		2019			2018
Television		506,267			487,929
Radio		138,577			121,020
Digital		54,735			81,460
Consolidated	$	699,579		$	690,409

* Percentage not meaningful.

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Commitments and Contingencies

6 Months Ended

Jun. 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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Subsequent Event

6 Months Ended

Jun. 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, which is subject to customary closing conditions, including the prior consent of the FCC, is currently expected to close in the second half of 2019.  

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The Company and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Restricted Cash

Restricted Cash

As of June 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 June 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $2.0 million and $2.2 million, respectively. During the six-month periods ended June 30, 2019 and 2018, the amount the Company paid Univision in this capacity was $4.0 million and $4.3 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 June 30, 2019, the amount due to the Company from Univision was $5.1 million related to the agreements for the carriage of its Univision and UniMás-affiliated television station signals. During each of the three-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $9.1 million, of which $7.0 million and $7.5 million, respectively, relate to the Univision proxy agreement. During the six-month periods ended June 30, 2019 and 2018, retransmission consent revenue accounted for approximately $17.8 million and $18.0 million, respectively, of which $13.7 million and $15.1 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 $1.2 million for the three-month periods ended June 30, 2019 and 2018, respectively. Stock-based compensation expense related to grants of stock options and restricted stock units was $1.6 million and $2.4 million for the six-month periods ended June 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 June 30, 2019, there was de minimis 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):

	Six-Month Period
	Ended June 30, 2019
	Number Granted		Weighted-Average Fair Value
Restricted stock units		178	$	3.14

As of June 30, 2019, there was approximately $3.1 million of total unrecognized compensation expense related to grants of restricted stock units that is expected to be recognized over a weighted-average period of 1.3 years.

Income (Loss) Per Share

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					Six-Month Period
	Ended June 30,					Ended June 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03
Diluted earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Dilutive securities:
Stock options and restricted stock units	-				1,062,014		-			1,169,327
Diluted shares outstanding		85,359,998			90,021,949		85,728,820			90,805,086
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03

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 six-month periods ended June 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 952,026 and 1,001,636 equivalent shares of dilutive securities for the three- and six-month periods ended June 30, 2019, respectively.

For the three- and six-month periods ended June 30, 2018, a total of 242,735 and 139,468 shares of dilutive securities, respectively, were not included in the computation of diluted income per share because the exercise prices of the dilutive securities were greater than the average market price of the common shares.

Goodwill Impairment

Goodwill 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.

The Company conducted a review of the fair value of the digital reporting unit in the second quarter 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 $22.4 million during the quarter ended June 30, 2019.

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

	December 31, 2018		Currency			Impairment			June 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(22,368	)		11,308
Consolidated	$	74,292	$	(67	)	$	(22,368	)	$	51,857

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. 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.  

The Company repurchased 0.4 million shares of Class A common stock at an average price of $2.95, for an aggregate purchase price of approximately $1.3 million, during the three-month period ended June 30, 2019. As of June 30, 2019, the Company has repurchased a total of approximately 7.0 million shares of Class A common stock, for an aggregate purchase price of approximately $28.1 million, or an average price per share of $3.98, since the beginning of the share repurchase program. All such repurchased shares were retired as of June 30, 2019.

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 to (a) 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 2013 Credit Agreement, (b) 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 its 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”).

In the event the Company engages in a transaction that has the effect of reducing the yield of any loans outstanding under the Term Loan B Facility within six months of the Closing Date, the Company will owe 1% of the amount of the loans so repriced or replaced to the Lenders thereof (such fee, the “Repricing Fee”). Other than the Repricing Fee, 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 June 30, 2019 was $242.0 million, net of $2.7 million of unamortized debt issuance costs and original issue discount. The estimated fair value of the Term Loan B Facility as of June 30, 2019 was $233.7 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):

	June 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	$	37.2	$	-	$	37.2		$	-
Certificates of deposit	$	7.8	$	-	$	7.8		$	-
Corporate bonds	$	105.6	$	-	$		105.6	$	-
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 June 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 June 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	$	2,880	$	1	$	29,997	$	41
Due after one year through five years		4,882		19		75,206		323
Total	$	7,762	$	20	$	105,203	$	364

The Company periodically reviews its available for sale securities for other-than-temporary impairment. For the three- and six-month periods ended June 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 six-month periods ended June 30, 2019 was interest income related to the Company’s available-for-sale securities of $0.8 and $1.7 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 six-month periods ended June 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	)

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.  As of June 30, 2019, the Company adjusted the selling price to current market conditions and believes that the long-lived asset continues to meet the criteria for classification as an asset held for sale. Assets held for sale are classified as current assets as management believes the sale will be completed within one year.

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 this ASU 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 this ASU 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 in the process of assessing the impact of this ASU 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 this ASU 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 June 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 this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of 2019 which 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 the rule in the first quarter of 2019 and included a statement of stockholders’ equity in our Form 10-Q.

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The Company and Significant Accounting Policies (Tables)

6 Months Ended

Jun. 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):

	Six-Month Period
	Ended June 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					Six-Month Period
	Ended June 30,					Ended June 30,
	2019			2018		2019			2018
Basic earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03
Diluted earnings per share:
Numerator:
Net income (loss)	$	(16,279	)	$	4,840	$	(14,855	)	$	3,033
Denominator:
Weighted average common shares outstanding		85,359,998			88,959,935		85,728,820			89,635,759
Dilutive securities:
Stock options and restricted stock units	-				1,062,014		-			1,169,327
Diluted shares outstanding		85,359,998			90,021,949		85,728,820			90,805,086
Per share:
Net income (loss) per share	$	(0.19	)	$	0.05	$	(0.17	)	$	0.03

Carrying Amount of Goodwill

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

	December 31, 2018		Currency			Impairment			June 30, 2019
Television	$	40,549		-			-		$	40,549
Radio		-		-			-			-
Digital		33,743		(67	)		(22,368	)		11,308
Consolidated	$	74,292	$	(67	)	$	(22,368	)	$	51,857

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):

	June 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	$	37.2	$	-	$	37.2		$	-
Certificates of deposit	$	7.8	$	-	$	7.8		$	-
Corporate bonds	$	105.6	$	-	$		105.6	$	-
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 June 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	$	2,880	$	1	$	29,997	$	41
Due after one year through five years		4,882		19		75,206		323
Total	$	7,762	$	20	$	105,203	$	364

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 six-month periods ended June 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	)

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Revenues (Tables)

6 Months Ended

Jun. 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 six-month periods ended (in thousands):

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Broadcast advertising	$	37,237	$	41,533	$	71,945	$	79,242
Digital advertising		16,804		20,558		31,276		38,802
Spectrum usage rights		3,952		523		9,036		631
Retransmission consent		9,086		9,143		17,846		17,996
Other		2,162		2,572		3,818		4,496
Total revenue	$	69,241	$	74,329	$	133,921	$	141,167

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

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2019		2018		2019		2018
Local direct	$	6,456	$	7,059	$	12,511	$	13,975
Local agency		14,966		15,521		28,666		30,114
National agency		15,815		18,953		30,768		35,153
Total  revenue	$	37,237	$	41,533	$	71,945	$	79,242

Summary of Deferred Revenue

(in thousands)	December 31, 2018		Increase	Decrease *		June 30, 2019
Deferred revenue	$	2,759	1,593	(2,759	)	$	1,593

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

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Leases (Tables)

6 Months Ended

Jun. 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 June 30, 2019:

(in thousands)
Remainder of 2019	$	5,747
2020		11,620
2021		9,222
2022		7,788
2023		6,177
2024 and thereafter		36,646
Total minimum payments	$	77,200
Less amounts representing interest		(29,048	)
Present value of minimum lease payments	$	48,152

Summary of Lease Payments and Supplemental Non-Cash Disclosures

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

(in thousands)	Six-Month Period Ended June 30, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$	2,910
Non-cash additions to operating lease assets	$	4,359

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 six-months ended June 30, 2019:

	Three-Month Period		Six-Month Period
	Ended June 30,		Ended June 30,
(in thousands)	2019		2019
Operating lease cost	$	2,560	$	4,957
Variable lease cost	369		790
Short-term lease cost	182		289
Total lease cost	$	3,111	$	6,036

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Segment Information (Tables)

6 Months Ended

Jun. 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 17% and 20% of its revenue outside the United States during the three-month periods ended June 30, 2019 and June 30, 2018, respectively. The Company generated 16% and 19% of its revenue outside the United States during the six-month periods ended June 30, 2019 and June 30, 2018, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Six-Month Period
	Ended June 30,						%			Ended June 30,						%
		2019			2018		Change				2019			2018		Change
Net revenue
Television	$	38,071		$	36,531			4	%	$	76,324		$	71,022			7	%
Radio		14,366			17,240			(17	)%		26,321			31,343			(16	)%
Digital		16,804			20,558			(18	)%		31,276			38,802			(19	)%
Consolidated		69,241			74,329			(7	)%		133,921			141,167			(5	)%
Cost of revenue - digital media		8,859			11,384			(22	)%		16,501			22,009			(25	)%
Direct operating expenses
Television		15,157			15,038			1	%		30,084			30,588			(2	)%
Radio		9,528			10,935			(13	)%		19,036			21,609			(12	)%
Digital		4,970			5,144			(3	)%		9,465			9,953			(5	)%
Consolidated		29,655			31,117			(5	)%		58,585			62,150			(6	)%
Selling, general and administrative expenses
Television		5,634			5,551			1	%		11,448			11,523			(1	)%
Radio		4,396			4,502			(2	)%		9,171			9,108			1	%
Digital		3,515			2,620			34	%		6,740			5,336			26	%
Consolidated		13,545			12,673			7	%		27,359			25,967			5	%
Depreciation and amortization
Television		2,562			2,277			13	%		4,822			4,481			8	%
Radio		571			621			(8	)%		903			1,240			(27	)%
Digital		1,173			1,121			5	%		2,497			2,237			12	%
Consolidated		4,306			4,019			7	%		8,222			7,958			3	%
Segment operating profit (loss)
Television		14,718			13,665			8	%		29,970			24,430			23	%
Radio		(129	)		1,182		*				(2,789	)		(614	)		354	%
Digital		(1,713	)		289		*				(3,927	)		(733	)		436	%
Consolidated		12,876			15,136			(15	)%		23,254			23,083			1	%
Corporate expenses		6,501			6,266			4	%		13,395			12,241			9	%
Change in fair value contingent consideration		(2,735	)		(913	)		200	%		(2,376	)		1,187		*
Impairment charge		22,368			-		*				22,368			-		*
Foreign currency (gain) loss		(82	)		(17	)		382	%		50			196			(74	)%
Other operating (gain) loss		(1,597	)		(273	)		485	%		(3,593	)		(295	)		1,118	%
Operating income (loss)		(11,579	)		10,073		*				(6,590	)		9,754		*
Interest expense	$	(3,554	)	$	(4,001	)		(11	)%	$	(7,044	)	$	(7,399	)		(5	)%
Interest income		857			1,039			(18	)%		1,776			1,952			(9	)%
Dividend income		251			417			(40	)%		506			545			(7	)%
Income (loss) before income taxes		(14,025	)		7,528		*				(11,352	)		4,852		*
Capital expenditures
Television	$	7,661		$	1,942					$	14,002		$	4,023
Radio		199			81						581			162
Digital		121			181						240			247
Consolidated	$	7,981		$	2,204					$	14,823		$	4,432
	June 30,			December 31,
Total assets		2019			2018
Television		506,267			487,929
Radio		138,577			121,020
Digital		54,735			81,460
Consolidated	$	699,579		$	690,409

* Percentage not meaningful.

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The Company and Significant Accounting Policies - Additional Information (Detail)			3 Months Ended				6 Months Ended		12 Months Ended	24 Months Ended
	May 01, 2019 USD ($)	Nov. 30, 2017 USD ($)	Jun. 30, 2019 USD ($) Location $ / shares shares	Mar. 31, 2019 USD ($)	Jun. 30, 2018 USD ($) Station shares	Mar. 31, 2018 USD ($)	Jun. 30, 2019 USD ($) Segment Station Location Market shares	Jun. 30, 2018 USD ($) shares	Dec. 31, 2018 USD ($)	Jun. 30, 2019 USD ($) Location $ / shares shares	Jan. 01, 2019 USD ($)	Apr. 11, 2018 USD ($)	Jul. 13, 2017 USD ($)
Accounting Policies [Line Items]
Number of reportable segments | Segment							3
Restricted cash			$ 732,000				$ 732,000		$ 732,000	$ 732,000
Retransmission consent revenue			$ 9,100,000		$ 9,100,000		$ 17,800,000	$ 18,000,000
Number of Class A common stock shares converted | shares							1
Shares of dilutive securities not included in computation of diluted income per share | shares			952,026		242,735		1,001,636	139,468
Impairment to goodwill			$ 22,368,000				$ 22,368,000		0
Impairment to indefinite life intangibles									0
Amount approved under share purchase												$ 30,000,000	$ 15,000,000
Aggregate purchase price of repurchased shares			1,302,000	$ 7,706,000	$ 5,258,000	$ 2,402,000
Unamortized debt issuance costs			2,718,000				2,718,000		2,709,000	2,718,000
Interest income related to available-for-sale securities			857,000		1,039,000		1,776,000	$ 1,952,000
Operating leases right of use asset			46,206,000				46,206,000			46,206,000	$ 45,800,000
Lease liabilities			48,152,000				48,152,000			48,152,000	$ 52,400,000
Available-for-Sale Securities
Accounting Policies [Line Items]
Interest income related to available-for-sale securities			800,000				$ 1,700,000
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%
Percentage of repricing fee		1.00%
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
Period considered for applicability of repricing fees		6 months
2013 Credit Facility | Term Loan B Facility
Accounting Policies [Line Items]
Carrying value of term loan			242,000,000				$ 242,000,000			242,000,000
Unamortized debt issuance costs			2,700,000				2,700,000			2,700,000
Estimated fair value of term loan			$ 233,700,000				233,700,000			$ 233,700,000
Class A common stock
Accounting Policies [Line Items]
Amount approved under share purchase												$ 15,000,000
Number of shares repurchased | shares			400,000							7,000,000
Average price of repurchased shares | $ / shares			$ 2.95							$ 3.98
Aggregate purchase price of repurchased shares			$ 1,300,000							$ 28,100,000
Stock Options And Restricted Stock Units
Accounting Policies [Line Items]
Share-based compensation expenses			800,000		1,200,000		1,600,000	2,400,000
Restricted Stock Units
Accounting Policies [Line Items]
Total unrecognized compensation expense related to grants of restricted stock units			3,100,000				$ 3,100,000			3,100,000
Weighted average period for unrecognized compensation expense related to grants of restricted stock units							1 year 3 months 18 days
Univision
Accounting Policies [Line Items]
Payment of sales representation fees to television stations			2,000,000		2,200,000		$ 4,000,000	4,300,000
Amount due from television stations for carriage			5,100,000				5,100,000			$ 5,100,000
Retransmission consent revenue			$ 7,000,000		$ 7,500,000		$ 13,700,000	$ 15,100,000
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
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			$ 22,400,000				$ 22,368,000

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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	6 Months Ended
	Jun. 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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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				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share Basic And Diluted [Abstract]
Net income (loss)	$ (16,279)	$ 1,424	$ 4,840	$ (1,808)	$ (14,855)	$ 3,033
Denominator:
Weighted average common shares outstanding, basic	85,359,998		88,959,935		85,728,820	89,635,759
Basic earnings per share:
Net income (loss) per share	$ (0.19)		$ 0.05		$ (0.17)	$ 0.03
Denominator:
Weighted average common shares outstanding, basic	85,359,998		88,959,935		85,728,820	89,635,759
Dilutive securities:
Stock options and restricted stock units			1,062,014			1,169,327
Weighted average common shares outstanding, diluted	85,359,998		90,021,949		85,728,820	90,805,086
Diluted earnings per share:
Net income (loss) per share	$ (0.19)		$ 0.05		$ (0.17)	$ 0.03

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The Company and Significant Accounting Policies - Carrying Amount of Goodwill (Detail) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Goodwill [Line Items]
Goodwill, Beginning balance		$ 74,292,000
Currency		(67,000)
Impairment	$ (22,368,000)	(22,368,000)	$ 0
Goodwill, Ending balance	51,857,000	51,857,000	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	(22,400,000)	(22,368,000)
Goodwill, Ending balance	$ 11,308,000	$ 11,308,000	$ 33,743,000

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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	Jun. 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	37.2	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	7.8	8.2
Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value and Carrying Value on Assets	105.6	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	37.2	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	7.8	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	105.6	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 Amortized Cost and Unrealized (Gains) Losses of Available for Sale Securities (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Certificates of Deposit
Amortized Cost
Due within a year	$ 2,880
Due after one year through five years	4,882
Total	7,762
Unrealized gains (losses)
Due within a year	1
Due after one year through five years	19
Total	20
Corporate Bonds
Amortized Cost
Due within a year	29,997
Due after one year through five years	75,206
Total	105,203
Unrealized gains (losses)
Due within a year	41
Due after one year through five years	323
Total	$ 364

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The Company and Significant Accounting Policies - Summary of Components of AOCI (Detail) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss)	$ (600)	$ (1,412)		$ (1,412)
Other comprehensive income (loss)	400	1,000
Income tax (expense) benefit	(200)	(200)
Total other comprehensive income (loss)	205	800	$ (553)	998	$ (1,502)
Accumulated other comprehensive income (loss)	(414)	(600)		(414)
Foreign Currency Translation
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss)	(400)	(400)		(400)
Other comprehensive income (loss)	(300)
Total other comprehensive income (loss)	(300)
Accumulated other comprehensive income (loss)	(700)	(400)		(700)
Marketable Securities
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss)	(200)	(1,000)		(1,000)
Other comprehensive income (loss)	700	1,000
Income tax (expense) benefit	(200)	(200)
Total other comprehensive income (loss)	500	800
Accumulated other comprehensive income (loss)	$ 300	$ (200)		$ 300

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Revenues - Summary of Revenues Disaggregated by Major Source (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation Of Revenue [Line Items]
Total revenue	$ 69,241	$ 74,329	$ 133,921	$ 141,167
Broadcast Advertising
Disaggregation Of Revenue [Line Items]
Total revenue	37,237	41,533	71,945	79,242
Digital Advertising
Disaggregation Of Revenue [Line Items]
Total revenue	16,804	20,558	31,276	38,802
Spectrum Usage Rights
Disaggregation Of Revenue [Line Items]
Total revenue	3,952	523	9,036	631
Retransmission Consent
Disaggregation Of Revenue [Line Items]
Total revenue	9,086	9,143	17,846	17,996
Other
Disaggregation Of Revenue [Line Items]
Total revenue	$ 2,162	$ 2,572	$ 3,818	$ 4,496

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Revenues - Summary of Disaggregation of Broadcast Advertising Revenue by Sales Channel (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation Of Revenue [Line Items]
Total revenue	$ 69,241	$ 74,329	$ 133,921	$ 141,167
Advertising
Disaggregation Of Revenue [Line Items]
Total revenue	37,237	41,533	71,945	79,242
Advertising | Local Direct
Disaggregation Of Revenue [Line Items]
Total revenue	6,456	7,059	12,511	13,975
Advertising | Local Agency
Disaggregation Of Revenue [Line Items]
Total revenue	14,966	15,521	28,666	30,114
Advertising | National Agency
Disaggregation Of Revenue [Line Items]
Total revenue	$ 15,815	$ 18,953	$ 30,768	$ 35,153

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Revenues - Summary of Deferred Revenue (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Revenue From Contract With Customer [Abstract]
Beginning Balance	$ 2,759
Increase	1,593
Decrease	(2,759)
Ending Balance	$ 1,593

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Leases - Additional Information (Detail) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)
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	14 years	14 years
Weighted average discount rate	6.20%	6.20%
Lease cost	$ 3,111	$ 6,036
Corporate Expenses
Lessee Lease Description [Line Items]
Lease cost	100	300
Direct Operating Expenses
Lessee Lease Description [Line Items]
Lease cost	1,400	2,700
Selling, General and Administrative Expenses
Lessee Lease Description [Line Items]
Lease cost	$ 1,600	$ 3,000
Maximum
Lessee Lease Description [Line Items]
Remaining term of leases		32 years

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Leases - Summary of Expected Future Payments Related to Lease Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019
Leases [Abstract]
Remainder of 2019	$ 5,747
2020	11,620
2021	9,222
2022	7,788
2023	6,177
2024 and thereafter	36,646
Total minimum payments	77,200
Less amounts representing interest	(29,048)
Present value of minimum lease payments	$ 48,152	$ 52,400

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Leases - Summary of Lease Payments and Supplemental Non-Cash Disclosures (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Cash paid for amounts included in lease liabilities:
Operating cash flows from operating leases	$ 2,910
Non-cash additions to operating lease assets	$ 4,359

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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

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Leases - Summary of Components of Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Operating lease cost	$ 2,560	$ 4,957
Variable lease cost	369	790
Short-term lease cost	182	289
Total lease cost	$ 3,111	$ 6,036

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Segment Information - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019 Segment Station Market	Jun. 30, 2018
Segment Reporting Information [Line Items]
Number of reportable segments | Segment			3
Percentage of revenue generated from outside the United States	17.00%	20.00%	16.00%	19.00%
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

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Segment Information - Separate Financial Data for Each of Company's Operating Segment (Detail) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Net revenue	$ 69,241,000	$ 74,329,000	$ 133,921,000	$ 141,167,000
Direct operating expenses	29,655,000	31,117,000	58,585,000	62,150,000
Selling, general and administrative expenses	13,545,000	12,673,000	27,359,000	25,967,000
Depreciation and amortization	4,306,000	4,019,000	8,222,000	7,958,000
Operating income (loss)	(11,579,000)	10,073,000	(6,590,000)	9,754,000
Corporate expenses	6,501,000	6,266,000	13,395,000	12,241,000
Change in fair value contingent consideration	(2,735,000)	(913,000)	(2,376,000)	1,187,000
Impairment charge	22,368,000		22,368,000		$ 0
Foreign currency (gain) loss	(82,000)	(17,000)	50,000	196,000
Other operating (gain) loss	(1,597,000)	(273,000)	(3,593,000)	(295,000)
Interest expense	(3,554,000)	(4,001,000)	(7,044,000)	(7,399,000)
Interest income	857,000	1,039,000	1,776,000	1,952,000
Dividend income	251,000	417,000	506,000	545,000
Income (loss) before income taxes	(14,025,000)	7,528,000	(11,352,000)	4,852,000
Capital expenditures	7,981,000	2,204,000	14,823,000	4,432,000
Total assets	$ 699,579,000		$ 699,579,000		690,409,000
Percentage change in net revenue	(7.00%)		(5.00%)
Percentage change in direct operating expenses	(5.00%)		(6.00%)
Percentage change in selling, general and administrative expenses	7.00%		5.00%
Percentage change in depreciation and amortization	7.00%		3.00%
Percentage change in segment operating profit (loss)	(15.00%)		1.00%
Percentage change in corporate expenses	4.00%		9.00%
Change in fair value contingent consideration	200.00%
Percentage change in foreign currency (gain) loss	382.00%		(74.00%)
Percentage change in other operating (gain) loss	485.00%		1118.00%
Percentage change in interest expense	(11.00%)		(5.00%)
Percentage change in interest income	(18.00%)		(9.00%)
Percentage change in dividend income	(40.00%)		(7.00%)
Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ 12,876,000	15,136,000	$ 23,254,000	23,083,000
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Corporate expenses	6,501,000	6,266,000	13,395,000	12,241,000
Television
Segment Reporting Information [Line Items]
Net revenue	38,071,000	36,531,000	76,324,000	71,022,000
Direct operating expenses	15,157,000	15,038,000	30,084,000	30,588,000
Selling, general and administrative expenses	5,634,000	5,551,000	11,448,000	11,523,000
Depreciation and amortization	2,562,000	2,277,000	4,822,000	4,481,000
Capital expenditures	7,661,000	1,942,000	14,002,000	4,023,000
Total assets	$ 506,267,000		$ 506,267,000		487,929,000
Percentage change in net revenue	4.00%		7.00%
Percentage change in direct operating expenses	1.00%		(2.00%)
Percentage change in selling, general and administrative expenses	1.00%		(1.00%)
Percentage change in depreciation and amortization	13.00%		8.00%
Percentage change in segment operating profit (loss)	8.00%		23.00%
Television | Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ 14,718,000	13,665,000	$ 29,970,000	24,430,000
Radio
Segment Reporting Information [Line Items]
Net revenue	14,366,000	17,240,000	26,321,000	31,343,000
Direct operating expenses	9,528,000	10,935,000	19,036,000	21,609,000
Selling, general and administrative expenses	4,396,000	4,502,000	9,171,000	9,108,000
Depreciation and amortization	571,000	621,000	903,000	1,240,000
Capital expenditures	199,000	81,000	581,000	162,000
Total assets	$ 138,577,000		$ 138,577,000		121,020,000
Percentage change in net revenue	(17.00%)		(16.00%)
Percentage change in direct operating expenses	(13.00%)		(12.00%)
Percentage change in selling, general and administrative expenses	(2.00%)		1.00%
Percentage change in depreciation and amortization	(8.00%)		(27.00%)
Percentage change in segment operating profit (loss)			354.00%
Radio | Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ (129,000)	1,182,000	$ (2,789,000)	(614,000)
Digital
Segment Reporting Information [Line Items]
Net revenue	16,804,000	20,558,000	31,276,000	38,802,000
Cost of revenue	8,859,000	11,384,000	16,501,000	22,009,000
Direct operating expenses	4,970,000	5,144,000	9,465,000	9,953,000
Selling, general and administrative expenses	3,515,000	2,620,000	6,740,000	5,336,000
Depreciation and amortization	1,173,000	1,121,000	2,497,000	2,237,000
Impairment charge	22,400,000		22,368,000
Capital expenditures	121,000	181,000	240,000	247,000
Total assets	$ 54,735,000		$ 54,735,000		$ 81,460,000
Percentage change in net revenue	(18.00%)		(19.00%)
Percentage change in cost of revenue	(22.00%)		(25.00%)
Percentage change in direct operating expenses	(3.00%)		(5.00%)
Percentage change in selling, general and administrative expenses	34.00%		26.00%
Percentage change in depreciation and amortization	5.00%		12.00%
Percentage change in segment operating profit (loss)			436.00%
Digital | Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	$ (1,713,000)	$ 289,000	$ (3,927,000)	$ (733,000)

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