Entravision Communications Corporation Reports Fourth Quarter And Full Year 2017 Results


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PR Newswire 14-Mar-2018 4:20 PM
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SANTA MONICA, Calif., March 14, 2018 /PRNewswire/ --Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and twelve-month periods ended December 31, 2017.
Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data). This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure is included beginning on page 11. Unaudited financial highlights are as follows:
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Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 % Change 2017 2016 % Change
Net revenue:
Revenue from advertising and retransmission consent $ 73,460 $ 70,291 5 % $ 272,091 $ 258,514 5 %
Revenue from spectrum usage rights - - * 263,943 - *
$ 73,460 $ 70,291 5 % $ 536,034 $ 258,514 107 %

Cost of revenue - television (spectrum usage rights) (1) 209 - * 12,340 - *
Cost of revenue - digital media (1) 11,782 3,043 287 % 32,206 9,536 238 %
Operating expenses (2) 45,118 41,102 10 % 168,399 160,237 5 %
Corporate expenses (3) 8,242 7,918 4 % 27,937 24,543 14 %
Foreign currency (gain) loss 57 - * 350 - *

Consolidated adjusted EBITDA (4) 11,199 20,620 (46) % 51,400 69,243 (26) %

Free cash flow (5) $ 5,901 $ 14,919 (60) % $ 287,618 $ 45,204 536 %

Net income $ 12,972 $ 7,003 85 % $ 176,293 $ 20,405 764 %

Net income per share, basic $ 0.14 $ 0.08 75 % $ 1.95 $ 0.23 748 %
Net income per share, diluted $ 0.14 $ 0.08 75 % $ 1.92 $ 0.22 773 %

Weighted average common shares outstanding, basic 89,980,200 89,733,294 90,272,257 89,340,589
Weighted average common shares outstanding, diluted 91,613,199 91,642,487 91,891,957 91,303,056

(1) Cost of revenue digital media consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized. Cost of revenue television (spectrum usage rights) consists primarily of the carrying value of spectrum usage rights surrendered in the Federal Communications Commission ("FCC") auction for broadcast spectrum.
(2) Operating expenses include direct operating and selling, general and administrative expenses. Included in operating expenses are $0.4 million and $0.6 million of non-cash stock-based compensation for the three-month periods ended December 31, 2017 and 2016, respectively, and $1.2 million and $1.3 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 2017 and 2016, respectively. Operating expenses do not include corporate expenses, foreign currency (gain) loss, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment and other income (loss).
(3) Corporate expenses include $2.5 million and $1.8 million of non-cash stock-based compensation for the three-month periods ended December 31, 2017 and 2016, respectively, and $4.9 million and $3.7 million of non-cash stock-based compensation for the twelve-month periods ended December 31, 2017 and 2016, respectively.
(4) Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, 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 the agreement governing our current credit facility ("the 2017 Credit Facility") and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization and does include 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.
(5) Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, and capital expenditures plus revenue fromFCC spectrum incentive auction less related cash expenses.Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, and less interest income.
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Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During the fourth quarter, we achieved revenue growth driven by increases in our digital media segment attributable to the acquisition of Headway. This growth in our digital media segment offsets decreases in both our television and radio segments, which were affected by decreases in local and national advertising revenue and the loss of political advertising revenue compared to 2016. We continued to build our digital footprint and, looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, and expanding our advertiser base to the benefit of our shareholders."
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Financial Results
Three-Month Period Ended December 31, 2017 Compared to Three-Month Period Ended
December 31, 2016
(Unaudited)

Three Months Ended
December 31,
2017 2016 % Change
Net, revenue from advertising and retransmission consent $ 73,460 $ 70,291 5 %

Cost of revenue - television (spectrum usage rights) (1) 209 - *
Cost of revenue - digital media (1) 11,782 3,043 287 %
Operating expenses (1) 45,118 41,102 10 %
Corporate expenses (1) 8,242 7,918 4 %
Depreciation and amortization 3,951 3,618 9 %
Foreign currency (gain) loss 57 - *

Operating income 4,101 14,610 (72) %
Interest expense, net (5,326) (3,746) 42 %
Other income (loss) 262 - *
Gain (loss) on debt extinguishment (3,306) (161) 1953 %

Income before income taxes (4,269) 10,703 *
Income tax (expense) benefit 17,376 (3,700) *

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates 13,107 7,003 87 %
Equity in net income (loss) of nonconsolidated affiliates (135) - *
Net income $ 12,972 $ 7,003 85 %

(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.
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Net revenue from advertising and retransmission consent increased to $73.5 million for the three-month period ended December 31, 2017 from $70.3 million for the three-month period ended December 31, 2016, an increase of $3.2 million. Of the overall increase, $13.6 million was attributable to our digital media segment and was primarily due to the acquisition of 100% of the stock of several entities collectively doing business as Headway ("Headway") during the second quarter of 2017, which did not contribute to net revenue in prior periods. The overall increase was partially offset by a decrease in our television segment of $7.3 million due primarily to a decrease in both local and national revenue and a decrease in political advertising revenue, which was not material in 2017, partially offset by an increase in retransmission consent revenue. Additionally, the overall increase was partially offset by a decrease in our radio segment of $3.1 million due primarily to decreases in both local and national advertising revenue, and a decrease in political advertising revenue, which was not material in 2017.
Cost of revenue related to revenue from spectrum usage rights was $0.2 million for the three-month period ended December 31, 2017. We did not incur cost of revenue from spectrum usage rights in 2016.
Cost of revenue in our digital media segment increased to $11.8 million for the three-month period ended December 31, 2017 from $3.0 million for the three-month period ended December 31, 2016, an increase of $8.8 million, primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to cost of revenue in prior periods.
Operating expenses increased to $45.1 million for the three-month period ended December 31, 2017 from $41.1 million for the three-month period ended December 31, 2016, an increase of $4.0 million. The increase was primarily attributable to the acquisition of Headway during the second quarter of 2017, which did not contribute to operating expenses in prior periods, an increase in salary expense and an increase in bad debt expense. The overall increase was partially offset by a decrease in expenses associated with the decrease in television and radio advertising revenue and a decrease in expenses for ratings services and promotional events.
Corporate expenses increased to $8.2 million for the three-month period ended December 31, 2017 from $7.9 million for the three-month period ended December 31, 2016, an increase of $0.3 million. The increase was primarily due to an increase in non-cash stock-based compensation expense.
Income tax expense for the three-month period ended December 31, 2017 includes a one-time provisional tax benefit of $17.3million. This net tax benefit primarily consists of the net tax impact to our deferred taxes from the corporate rate reduction as a result of the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act.
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Twelve-month Period Ended December 31, 2017 Compared to Twelve-month Period Ended
December 31, 2016
(Unaudited)

Twelve Months Ended
December 31,
2017 2016 % Change
Net revenue:
Revenue from advertising and retransmission consent $ 272,091 $ 258,514 5 %
Revenue from spectrum usage rights 263,943 - *
Total net revenue 536,034 258,514 107 %

Cost of revenue - television (spectrum usage rights) (1) 12,340 - *
Cost of revenue - digital media (1) 32,206 9,536 238 %
Operating expenses (1) 168,399 160,237 5 %
Corporate expenses (1) 27,937 24,543 14 %
Depreciation and amortization 16,411 15,342 7 %
Foreign currency (gain) loss 350 - *

Operating income 278,391 48,856 470 %
Interest expense, net (15,935) (15,169) 5 %
Other income (loss) 262 - *
Gain (loss) on debt extinguishment (3,306) (161) 1953 %

Income before income taxes 259,412 33,526 674 %
Income tax (expense) benefit (82,809) (13,121) 531 %

Net income (loss) before equity in net income (loss) of nonconsolidated affiliates 176,603 20,405 765 %
Equity in net income (loss) of nonconsolidated affiliates (310) - *

Net income $ 176,293 $ 20,405 764 %

(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.
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Net revenue from advertising and retransmission consent increased to $272.1 million for the twelve-month period ended December 31, 2017 from $258.5 million for the twelve-month period ended December 31, 2016, an increase of $13.6 million. Of the overall increase, $34.0 million was attributable to our digital media segment and was primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to net revenue in prior periods. The overall increase was partially offset by a decrease in our television segment of $11.5 million due to a decrease in local revenue and a decrease in political advertising revenue, which was not material in 2017, partially offset by an increase in national advertising revenue and an increase in retransmission consent revenue. Additionally, the overall increase was partially offset by a decrease in our radio segment of $8.9 million due to decreases in both local and national advertising revenue, and a decrease in political advertising revenue, which was not material in 2017.
Net revenue from spectrum usage rights was $263.9 million for the twelve-month period ended December 31, 2017. We did not generate revenue from spectrum usage rights in 2016.
Cost of revenue related to revenue from spectrum usage rights was $12.3 million for the twelve-month period ended December 31, 2017. We did not incur cost of revenue from spectrum usage rights in 2016.
Cost of revenue in our digital media segment increased to $32.2 million for the twelve-month period ended December 31, 2017 from $9.5 million for the twelve-month period ended December 31, 2016, an increase of $22.7 million, primarily due to the acquisition of Headway during the second quarter of 2017, which did not contribute to cost of revenue in prior periods.
Operating expenses increased to $168.4 million for the twelve-month period ended December 31, 2017 from $160.2 million for the twelve-month period ended December 31, 2016, an increase of $8.2 million. The increase was primarily attributable to the acquisition of Headway during the second quarter of 2017, which did not contribute to operating expenses in prior periods. The overall increase was partially offset by decreases in expenses associated with the decrease in television and radio advertising revenue and decreases in rent expense, ratings service expense and event expense.
Corporate expenses increased to $27.9 million for the twelve-month period ended December 31, 2017 from $24.5 million for the twelve-month period ended December 31, 2016, an increase of $3.4 million. The increase was primarily due to expenses associated with the FCC auction for broadcast spectrum and non-cash stock-based compensation expense.
Income tax expense for the twelve-month period ended December 31, 2017 includes a one-time provisional tax benefit of $17.3million. This net tax benefit primarily consists of the net tax impact to our deferred taxes from the corporate rate reduction as a result of the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act.
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Segment Results
The following represents selected unaudited segment information:

Three Months Ended Twelve Months Ended
December 31, December 31,
2017 2016 % Change 2017 2016 % Change
Net Revenue
Revenue from advertising and retransmission consent
Television $ 36,038 $ 43,380 (17) % $ 148,059 $ 159,523 (7) %
Radio 17,118 20,242 (15) % 66,934 75,847 (12) %
Digital 20,304 6,669 204 % 57,098 23,144 147 %
Total $ 73,460 $ 70,291 5 % $ 272,091 $ 258,514 5 %

Revenue from spectrum usage rights (television) $ - $ - * $ 263,943 $ - *

Total Net Revenue $ 73,460 $ 70,291 5 % $ 536,034 $ 258,514 107 %

Cost of Revenue (1)
Television 209 - * 12,340 - *
Digital 11,782 3,043 287 % 32,206 9,536 238 %
Total $ 11,991 $ 3,043 294 % $ 44,546 $ 9,536 367 %

Operating Expenses (1)
Television 21,214 21,312 (0) % 81,730 83,611 (2) %
Radio 16,021 16,904 (5) % 63,315 65,390 (3) %
Digital 7,883 2,886 173 % 23,354 11,236 108 %
Total $ 45,118 $ 41,102 10 % $ 168,399 $ 160,237 5 %

Corporate Expenses (1) $ 8,242 $ 7,918 4 % $ 27,937 $ 24,543 14 %

Foreign currency (gain) loss $ 57 $ - * $ 350 $ - *

Consolidated adjusted EBITDA (1) $ 11,199 $ 20,620 (46) % $ 51,400 $ 69,243 (26) %

(1) Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 1.
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Entravision Communications Corporation will hold a conference call to discuss its 2017 fourth quarter and full year results on March 14, 2018 at 5 p.m. Eastern Time. To access the conference call, please dial 412-317-5440 ten minutes prior to the start time. The call will be webcast live and archived for replay on the investor relations portion of the Company's web site located at www.entravision.com.
Entravision Communications Corporation is a leading global media company that, through its 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, and Argentina and other countries in Latin America, reaches a global market. The Company's expansive portfolio encompasses integrated marketing and media solutions, comprised of television, radio, and digital properties and data analytics services. Entravision has 55 primary television stations and is the largest affiliate group of both the Univision and UniMs television networks. Entravision also owns and operates 49 primarily Spanish-language radio stations featuring nationally recognized talent, as well as the Entravision Audio Network and Entravision Solutions, a coast-to-coast national spot and network sales and marketing organization representing Entravision's owned and operated, as well as its affiliate partner, radio stations. Entravision'sPulpo digital advertising unit is the #1-ranked online advertising platform in Hispanic reach according to comScore Media Metrix, and Entravision's digital group also includes Headway, a leading provider of mobile, programmatic, data and performance digital marketing solutions primarily in the United States, Mexico and other markets in Latin America. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.
This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the Securities and Exchange Commission.
(Financial Table Follows)
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Entravision Communications Corporation
Consolidated Balance Sheets
(In thousands; unaudited)

December 31, December 31,
2017 2016
ASSETS
Current assets
Cash and cash equivalents $ 39,560 $ 61,520
Restricted Cash 222,294 $ -
Trade receivables, net of allowance for doubtful accounts 84,348 65,072
Prepaid expenses and other current assets 6,260 4,870
Total current assets 352,462 131,462
Property and equipment, net 60,337 55,368
Intangible assets subject to amortization, net 26,758 13,120
Intangible assets not subject to amortization 251,163 220,701
Goodwill 70,557 50,081
Deferred income taxes - 44,677
Other assets 4,690 2,512
Total assets $ 765,967 $ 517,921


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 3,000 $ 3,750
Accounts payable and accrued expenses 59,522 30,810
Total current liabilities 62,522 34,560
Long-term debt, less current maturities, net of unamortized debt issuance costs 292,489 286,697
Other long-term liabilities 21,447 13,208
Deferred income taxes 40,639
Total liabilities 417,097 334,465

Stockholders' equity
Class A common stock 7 7
Class B common stock 2 2
Class U common stock 1 1
Additional paid-in capital 888,650 904,867
Accumulated deficit (539,730) (718,444)
Accumulated other comprehensive income (loss) (60) (2,977)
Total stockholders' equity 348,870 183,456
Total liabilities and stockholders' equity $ 765,967 $ 517,921
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Entravision Communications Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2017 2016 2017 2016
Net revenue
Revenue from advertising and retransmission consent $ 73,460 $ 70,291 $ 272,091 $ 258,514
Revenue from spectrum usage rights - - 263,943 -
73,460 70,291 536,034 258,514
Expenses:
Cost of revenue - television (spectrum usage rights) 209 - 12,340 -
Cost of revenue - digital media 11,782 3,043 32,206 9,536
Direct operating expenses 32,045 29,098 119,283 113,439
Selling, general and administrative expenses 13,073 12,004 49,116 46,798
Corporate expenses 8,242 7,918 27,937 24,543
Depreciation and amortization 3,951 3,618 16,411 15,342
Foreign currency (gain) loss 57 - 350 -
69,359 55,681 257,643 209,658
Operating income 4,101 14,610 278,391 48,856
Interest expense (5,625) (3,850) (16,709) (15,469)
Interest income 299 104 774 300
Other income (loss) 262 - 262 -
Gain (loss) on debt extinguishment (3,306) (161) (3,306) (161)
Income before income taxes (4,269) 10,703 259,412 33,526
Income tax (expense) benefit 17,376 (3,700) (82,809) (13,121)

Income (loss) before equity in net income (loss) of nonconsolidated affiliate 13,107 7,003 176,603 20,405
Equity in net income (loss) of nonconsolidated affiliate (135) - (310) -
Net income $ 12,972 $ 7,003 $ 176,293 $ 20,405

Basic and diluted earnings per share:
Net income per share, basic $ 0.14 $ 0.08 $ 1.95 $ 0.23
Net income per share, diluted $ 0.14 $ 0.08 $ 1.92 $ 0.22

Cash dividends declared per common share, basic $ 0.05 $ 0.03 $ 0.16 $ 0.13
Cash dividends declared per common share, diluted $ 0.05 $ 0.03 $ 0.16 $ 0.12

Weighted average common shares outstanding, basic 89,980,200 89,733,294 90,272,257 89,340,589
Weighted average common shares outstanding, diluted 91,613,199 91,642,487 91,891,957 91,303,056
[End Table]
[Start Table]
Entravision Communications Corporation
Consolidated Statements of Cash Flows
(In thousands; unaudited)

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2017 2016 2017 2016
Cash flows from operating activities:
Net income $ 12,972 $ 7,003 $ 176,293 $ 20,405
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 3,951 3,618 16,411 15,342
Cost of revenue - television (spectrum usage rights) 209 - 12,340 -
Deferred income taxes (17,551) 3,641 81,963 12,528
Non-cash interest 2,642 197 3,237 776
Amortization of syndication contracts 141 109 452 398
Payments on syndication contracts (145) (118) (445) (388)
Equity in net (income) loss of nonconsolidated affiliate 135 - 310 -
Non-cash stock-based compensation 2,942 2,401 6,091 5,035
(Gain) loss on sale of property 28 - 28 -
(Gain) loss on debt extinguishment 3,306 161 3,306 161
Changes in assets and liabilities:
(Increase) decrease in trade receivables (12,376) (4,407) 414 1,397
(Increase) decrease in prepaid expenses and other current assets 917 1,391 (913) 439
Increase (decrease) in accounts payable, accrued expenses and other liabilities 6,424 4,395 (2,438) 1,203
Net cash provided by operating activities 3,595 18,391 297,049 57,296
Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles 50 - 50 -
Purchases of property and equipment (2,439) (2,093) (12,078) (9,053)
Purchases of intangibles - - (32,588) -
Purchase of a business, net of cash acquired (21,008) - (28,497) -
Purchases of short term investments: CDs - - - (30,000)
Proceeds from short term investments: CDs - - - 30,000
Purchases of investments (250) (250) (2,450) (500)
Deposits on acquisition 1,050 - (190) -
Net cash used in investing activities (22,597) (2,343) (75,753) (9,553)
Cash flows from financing activities:
Proceeds from stock option exercises 697 (1,105) 708 780
Tax payments related to shares withheld for share-based compensation plans (798) - (798) -
Payments on long-term debt (290,750) (20,937) (293,563) (23,750)
Dividends paid (4,491) (2,806) (14,670) (11,177)
Repurchase of Class A common stock (3,552) - (5,330) -
Termination of swap agreements (2,441) - (2,441) -
Proceeds from borrowings on long-term debt 298,500 - 298,500 -
Payments of capitalized debt offering and issuance costs (3,382) - (3,382) -
Net cash used in financing activities (6,217) (24,848) (20,976) (34,147)
Effect of exchange rates on cash, cash equivalents and restricted cash (3) - 14 -
Net increase (decrease) in cash and cash equivalents (25,222) (8,800) 200,334 13,596
Cash and cash equivalents:
Beginning 287,076 70,320 61,520 47,924
Ending $ 261,854 $ 61,520 $ 261,854 $ 61,520
[End Table]
[Start Table]
Entravision Communications Corporation
Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities
(In thousands; unaudited)
The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2017 2016 2017 2016
Consolidated adjusted EBITDA (1) $ 11,199 $ 20,620 $ 51,400 $ 69,243
Net revenue - FCC spectrum incentive auction - - 263,943 -
Expenses - FCC spectrum incentive auction (209) - (14,443) -
Interest expense (5,625) (3,850) (16,709) (15,469)
Interest income 299 104 774 300
Gain (loss) on debt extinguishment (3,306) (161) (3,306) (161)
Income tax (expense) benefit 17,376 (3,700) (82,809) (13,121)
Amortization of syndication contracts (141) (109) (452) (398)
Payments on syndication contracts 145 118 445 388
Non-cash stock-based compensation included in direct operating
expenses (430) (630) (1,236) (1,330)
Non-cash stock-based compensation included in corporate expenses (2,512) (1,771) (4,855) (3,705)
Depreciation and amortization (3,951) (3,618) (16,411) (15,342)
Other income (loss) 262 - 262 -
Equity in net income (loss) of nonconsolidated affiliates (135) - (310) -
Net income 12,972 7,003 176,293 20,405

Depreciation and amortization 3,951 3,618 16,411 15,342
Cost of revenue - television (spectrum usage rights) 209 - 12,340 -
Deferred income taxes (17,551) 3,641 81,963 12,528
Amortization of debt issuance costs 2,642 197 3,237 776
Amortization of syndication contracts 141 109 452 398
Payments on syndication contracts (145) (118) (445) (388)
Equity in net (income) loss of nonconsolidated affiliate 135 - 310 -
Non-cash stock-based compensation 2,942 2,401 6,091 5,035
(Gain) loss on sale of property 28 - 28 -
(Gain) loss on debt extinguishment 3,306 161 3,306 161
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (12,376) (4,407) 414 1,397
(Increase) decrease in prepaid expenses and other assets 917 1,391 (913) 439
Increase (decrease) in accounts payable, accrued expenses and other liabilities 6,424 4,395 (2,438) 1,203
Net cash provided by (used in ) operating activities $ 3,595 $ 18,391 $ 297,049 $ 57,296

(1) Consolidated adjusted EBITDA is defined on page 1.
[End Table]
[Start Table]
Entravision Communications Corporation
Reconciliation of Free Cash Flow to Cash Flows From Operating Activities
(In thousands; unaudited)

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

Three-Month Period Twelve-Month Period
Ended December 31, Ended December 31,
2017 2016 2017 2016
Consolidated adjusted EBITDA (1) $ 11,199 $ 20,620 $ 51,400 $ 69,243
Net, cash interest expense (1) (2,685) (3,549) (12,698) (14,393)
Cash paid for income taxes (174) (59) (846) (593)
Capital expenditures (2) (2,439) (2,093) (12,078) (9,053)
Net revenue - FCC spectrum incentive auction - - 263,943 -
Expenses - FCC spectrum incentive auction - - (2,103) -
Free cash flow (1) 5,901 14,919 287,618 45,204

Capital expenditures (2) 2,439 2,093 12,078 9,053
Other income (loss) 262 - 262 -
(Gain) loss on sale of property 28 - 28 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (12,376) (4,407) 414 1,397
(Increase) decrease in prepaid expenses and other assets 917 1,391 (913) 439
Increase (decrease) in accounts payable, accrued expenses and other liabilities 6,424 4,395 (2,438) 1,203
Cash Flows From Operating Activities $ 3,595 $ 18,391 $ 297,049 $ 57,296
[End Table]
[Start Table]

(1) Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.

(2) Capital expenditures are not part of the consolidated statement of operations.
[End Table]
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SOURCE Entravision Communications Corporation

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