Entravision Communications Corporation (EVC) Q1 2012 Earnings Report, Transcript and Summary

This is the Chorus Call operator. Welcome to the Entravision Communications Corporation First Quarter 2012 Earnings Conference Call. [Operator Instructions] For your information, this conference is being recorded. I would like to turn the conference over to Walter Ulloa, Chairman and Chief Executive Officer. Mr. Ulloa, please begin.

Thank you, Andrew. Good afternoon, everyone, and welcome to Entravision's first quarter 2012 earnings conference call. Joining me today is Philip Wilkinson, our President and Chief Operating Officer; and Chris Young, our Executive Vice President and Chief Financial Officer. Before we begin, I must inform you that this conference call will contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to our SEC filings for a list of risks and uncertainties that could impact actual results. This call is a property of Entravision Communications Corporation. Any redistribution, retransmission or rebroadcast of this call in any form without express written consent of Entravision Communications Corporation is strictly prohibited. Also, this call will include certain non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's press release. The press release is available on the company's website and was filed with the SEC in a Form 8-K. During the first quarter, we continued to execute our strategic plan and generated improved year-over-year results. Our core advertising revenues grew 4% during the quarter despite the challenges presented by the mixed economic environment and the ongoing stabilization of the U.S. advertising market. Our core radio and television stations remained strongly positioned with the most densely populated U.S. Hispanic markets and we continue to successfully expand our online and digital capabilities and reach. Turning to our financial results for the quarter. Our consolidated revenue was $46.5 million, up 6% versus the same period in 2011. Excluding incremental political revenue from last year, first quarter revenue remained plus 6% as we generated a very small amount of political revenue in the quarter. Operating expenses increased 3% to $31 million in the quarter. Consolidated EBITDA grew 12% $11.6 million versus last year, and free cash flow was $1.4 million. In our television division, total revenue was up 8% in the quarter. Excluding retransmission fees, our television revenue rose 6% during the first quarter. Local revenue grew 12% and national revenue was up 1%. Our ad category performance during the first quarter was led by automotive, which finished up 36%. We continued to experience strong momentum in automotive as the first quarter represented our eighth consecutive quarter of double-digit growth for television dating back to the second quarter 2010. The large -- the largest auto advertisers during the quarter were Chrysler Group, Ford, Toyota, Honda and General Motors. Our current second quarter 2012 automotive pacing continues to reflect strong signs of growth led by the import auto brands of Toyota, Honda, Nissan and Mazda. We continued to experience growth across all auto segment tiers. Tier 1 corporate was up 25% and now accounts for 18% of our auto category revenues. Tier 2 dealers associations was up 48% and now represents 52% of the auto category. And Tier 3 local dealers was up 25% and now represents 30% of our television auto category revenue. Overall, the television division experienced growth in 6 of our top 10 categories in first quarter, including services, automotive, retail, healthcare, travel and leisure and product brand names. Softness during the quarter was led by telecom, which was down 42% as declines came from all major category players, including AT&T, Verizon, Cricket, MetroPCS and Sprint. Telecom category finished first quarter 2012 as our seventh-ranked advertising category in the television division. And while we do not anticipate a single -- a significant improvement in the category in the remaining quarters of 2012, we do expect the revenue declines from this category to shrink because of lower comparables in quarters 2, 3 and 4. We also experienced declines in fast food, finance and grocery convenience stores during the quarter. Political revenue for our television business was less than $50,000 in the first quarter. We successfully added 52 new advertisers who invested $10,000 or more in the first quarter. New clients for our television division included the Culinary Workers Union, Allstate Insurance, Colorado Health Foundation, Tri-County Health Department, and the Centers for Medicare and Medicaid. Turning to our ratings performance, our Univision affiliates extended their ratings leadership positions in the February 2012 Sweeps. Among all adults, 18 to 34, regardless of language, here is the summary of our February performance. 7 of our Univision television stations ranked #1 or #2, sign-on to sign-off. Additionally, 7 of our Univision affiliates are either #1 or 2 among all adults 18 to 49. 9 of our TeleFutura television stations are the #2 ranked Spanish language television station in their markets in adults 18 to 34 and adults 18 to 49, regardless of language. 9 of our Univision television affiliates are #1 or 2 in the early local news. And in early network news, 10 of our Univision television stations are ranked either 1 or 2, again regardless of language. In late local news, 9 of our Univision television stations are ranked either 1 or 2 again. In Entravision markets combined, our Univision and TeleFutura television affiliates aired 43 of the top 50 Spanish language programs among adults 18 to 34, 18 to 49 and 25 to 54. The top 2 Spanish-language programs in Entravision markets were the Annual Blockbuster Awards show, [indiscernible] and a soccer match between the Mexican national team and Colombia's national team. At our radio division, revenues were flat in the first quarter when you compare our results for the same period in 2011. Local increased 5 points over Q1 2011, while national was down 12%. Local was up 5% in January, 9% in February, and March saw a 2% increase. National continues to recover more slowly than local. We have added one additional seller to our national sales rep from LER during the quarter but we're in the process of adding 2 additional sellers in the second quarter to help generate more national sales. Political revenue in the first quarter for radio was only $57,000. Political spending was below our expectation in the quarter. We were still -- we are still confident that the spending in this category will accelerate as we have already placed more political advertising in the second quarter than we did in the second quarter of 2008 of comparable presidential election year. Recorded revenue growth in the first quarter in 4 of our top categories in our radio business. During the quarter, the automotive category, which is our second-largest category in the quarter, finished up 32%. When you break out the auto category, we see an increase of 60% in Tier 1, Tier 2 was up 47% and Tier 3 grew 20%. The Tier 1 growth comes mainly from Ford Motor Company, which spent $177,000 with us compared to $66,000 in the Q1 of 2011. This was a 70% increase. Tier 2 growth was driven by a 78% increase from Southern California Toyota dealers. In addition to automotive, our top -- other top categories by spending during the first quarter were services, our top category for the quarter, increased 12%; travel and leisure increased 3%; retail was up 37%; and fast food restaurants experienced a decrease of 20%, created by mostly a decrease in Taco Bell and McDonald's. Even with McDonald's reduced spending, they were the top advertiser in the radio division in the quarter. Telecommunications continues to negatively affect our revenue as in previous quarters with Verizon decreasing 23% and AT&T reducing their spending by 65%. This was offset partially by increases with -- from T-Mobile and Cricket Communications. In the first quarter, we added 42 new radio advertisers. We spent more than $10,000, which in total represent $747,000 in revenue for the quarter. New advertisers included Rapido Express, Center of Disease Control, Azteca Medica, Casa Ford, Federal Secretaría de Salud and Universal Nissan. In the first quarter of 2012, our Los Angeles radio cluster generated a 5% increase in total revenue. Entravision's Los Angeles radio cluster continues to perform much better than our peers. According to revenue data from Miller Kaplan, the Spanish language radio segment's total revenue for first quarter increased 4%, while the entire markets saw a decreased of 4% in the quarter. Our Los Angeles revenue growth continues to be propelled by our local revenue from our 3 Spanish language formats in the #1 radio market in the nation. Our cluster increased local revenue by 13% for the quarter by focusing on local direct business. In addition, we are continuing to focus on intensive, cold-cost strategies and training of our account executives to take advantage of exciting new commissions, incentives to help grow new business. These initiatives seem to be working as we've seen a steady improvement in billing for our Los Angeles cluster, locally. National sales are trailing local sales. As a result, we have implemented strategies within LER to further target differences in our radio cluster formats and we are aggressively delivering integrated marketing solutions and idea-driven opportunities to national advertisers. For the Winter 2012 radio ratings, 10 of our markets are surveyed by Arbitron and our stations continue to be ranked among the leaders in adults 18 to 34 against all competitors regardless of language. In the full week, Monday through Sunday, 6, 8 to 12 midnight, 8 of our radio stations are in the top 10 most-listened-to radio stations in their markets. In Morning Drive, El Vacilón del Mandril, our Tricolor stations, and El show del Genio [ph] on our Jose-formatted radio stations are in the top 10 in 8 markets. In our Cornerstone afternoon drive program, Erazno Y Chokolata, is in the top 10 in 5 of our markets. Turning to our interactive or Digital division, our interactive initiatives are becoming an increasingly important component of our sales platform and growth strategy. The investment we have made in our digital capabilities allows us to offer compelling multi-platform advertising opportunities that leverage the strength and reach of our core radio and television assets across key new channels such as online, social media and mobile. These integrated advertising opportunities allow clients to reach and engage our audience across multiple touch points, supporting client retention, while also attracting new clients who are eager to implement integrated marketing campaigns. We continue to make progress with our interactive and digital initiatives, which currently account for almost 2% of our total revenue. Our interactive revenues have grown for 15 straight quarters, including a significant growth of 28% during the first quarter over the same period last year. The launch of our new television and video platform allows us to -- television sites and video platform allowed us to greatly increase the amount of video content we publish online. In the first quarter, we published 8,500 local news stories. This is a 400% more over the same period last year. Consequentially, we have seen our interactive audience increase video consumption by 350%. These video storage appear on our television and radio websites and across our mobile platform. By increasing the amount of our digital content, we have been able to steadily grow our online audience. For this first quarter, consolidated visits across our entire digital network increased 40% over the same period last year. We continue to explore with innovative products like Busca, our local Latino digital marketplace. Since we launched this product, we have secured more than 800 new advertisers and generated more than $1 million in revenue. We are working on the addition of paid search components to make Busca an even more compelling product for our local advertisers. One major area of focus for Entravision is social media. We continue to build a strong following for our medias -- for our television and radio properties, websites via Twitter and Facebook. We finished the first quarter with excess of 300,000 followers on our social media channels which represent a growth of over 110% when compared to the same period last year. Our mobile platform growth is accelerating. We are now running mobile campaigns and managing the Hispanic mobile communities. Our number of advertisers, including Bud Light, Chevrolet and McDonald's, AEG, Nissan, MetroPCS or Paris [ph] and many others. This first quarter, we sent more than 1 million text messages to our audience and our mobile revenue increased 140% over the same period last year. The first quarter was another record for our mobile initiatives. All in all, we continue to make great progress with our digital platform and are focused on furthering this business during 2012 as we launch new initiatives in the areas of display advertising and paid search. We are delivering a steadily growing and engaged audience across key digital platforms, including online, social media and mobile. We continue to utilize this multi-platform audience to deliver new, unique and robust advertising opportunities to our partners, and making our traditional broadcasting business more compelling, complete and integrated. As we look at the 2012 second quarter, we continue to see positive trends across our core radio and television assets. As I pointed out earlier, we saw very little political revenue in the first quarter, mostly as a result of Texas moving their primary to the second quarter. That said, our political revenue in the second quarter is trending much higher than planned, as a result of the Obama for America campaign, which has already started in the key battleground states of Colorado, Nevada and Florida where Entravision operates significant media clusters serving the Latino communities in those states. In conclusion, our radio and television stations remain extremely well positioned across the nation's key Hispanic markets and stand to benefit from the rapidly growing Latino population. The strong competitive position of our core assets is supported by our growing digital presence as we continue to drive increased online and mobile engagement and grow our target audience. Our digital investments have served to greatly strengthen our advertising sales capabilities, which are providing us with new avenues for growth. As we move through 2012, we will continue to execute our strategic plan with the goal of driving improved performance from our business. And finally, as all of you know, Philip Wilkinson, our President and CEO, will be stepping down from his position at the end of this month. Philip will remain an important consultant and advisor to the company as a cofounder, Entravision board member and one of our largest shareholders. He is currently working on a number of projects for Entravision and will continue doing so in the future. We thank you for all you've done and will do for Entravision. I will now turn the call over to Chris Young for a review of our financials.

Thank you, Walter, and good afternoon, everyone. As Walter has discussed, net revenue for the quarter was $46.5 million, up 6%. Operating expenses increased 3% to $31.0 million and consolidated adjusted EBITDA increased 12% to $11.6 million. Net revenue for the quarter was up 6% to $46.5 million compared to $44 million in the same quarter of last year. Television net revenue was up 8% to $33.2 million for the quarter compared to $30.7 million in the same quarter of last year. Radio net revenue was flat at $13.4 million for the quarter. The increase in our television segment was primarily attributable to an increase in local advertising and an increase in retransmission consent revenue. Excluding retransmission consent revenue and political revenue, core TV advertising revenue was up to 6% for the quarter. Retrans revenue for the quarter was $5 million compared to $4.2 million in the same quarter of last year. Retransmission consent revenue for the year 2012 will be approximately $20 million. Operating expenses for the quarter were $31.0 million, up 3%. Excluding noncash compensation expense, operating expenses for the quarter were $30.9 million, up 3%. The increase was primarily attributable to variable expenses relating to the increase in net revenue. Corporate expenses for the quarter were up 4% to $3.9 million compared to $3.7 million in the same quarter of last year. The increase was primarily attributable to the increase in interactive media-related expenses and salary expense. Free cash flow which we defined as consolidated adjusted EBITDA, less CapEx, less cash interest and cash taxes and dividend payments plus interest income for the quarter was $1.4 million or $0.02 per share. Cash, interest expense for the quarter was $8.5 million. Cash, CapEx for quarter was $1.2 million. Turning to our balance sheet, as of March 31, 2012, our total debt was $383.8 million and our trailing 12-month consolidated adjusted EBITDA was $56.7 million. Our total debt-to-EBITDA, as adjusted, was 6.8x. Cash on the books was $51.2 million at March 31, 2012. Net of this cash on the books, total net leverage was 5.9x. In February 2012, we entered into an amendment to our 2010 revolving credit facility agreement. Effective March 31, 2012, the financial covenants shall not be applicable unless any loans are outstanding on a relevant date. There are no outstanding balances on this facility at this time. The amendment changes in thresholds for financial covenants relating the total leverage, fixed charge, coverage and cash interest coverage ratio. On April 27, 2012, we gave notice of our intention to redeem 20 million of our 8 3/4 notes outstanding on May 30, 2012. The redemption price for the redeemed notes will be at 103% of principal amount plus all accrued and unpaid interest. Following this redemption, approximately $363.8 million in principal amount of the notes will remain outstanding. We will fund the redemption with cash on hand. This concludes our formal remarks. Walter, Philip, and I would be happy to take your questions at this time. Andrew, I'll turn it over to you.

[Operator Instructions] The first question comes from James Dix of Wedbush.

Just a couple of things. Anymore color you can give on what your core pacings look like for TV and radio in the second quarter apart from the -- what you talked about for political? And then I had 2 follow-ups relating to TV.

Hey, James. What we do with respect to forward-looking comments, we talked about the month that is closed and the revenue that's on the books and for this case, that's April. But for television on a quarter basis, we're pacing plus mid-single digits for TV. We're pacing a negative mid-single digits for radio for the same month. Political moves the needle, probably about 1 percentage point either way. I think to add to that though, that April since we've closed the books on April, we've started to see late in April a picked-up in business. So we're hopeful that that's a low point that we're building off of once the quarter is done [ph].

And James, this is Walter. Particularly in the radio, as Chris pointed out, in April, TV was up mid-single digits and continues strong into May. Radio, on the other hand, was soft and lagging but in the last couple of weeks of April, particularly last week, we saw a momentum building in April. In radio, we've seen significant -- we've made significant gains in pace over the last couple of weeks. In that business.

All right. Okay, great. That's very helpful. And then, I guess on TV. I guess, Phil, if I want to make sure I get one last shot at you while you're still not a consultant. I guess, for -- when you look at your TV revenue in your markets, which markets have recovered from the recession and gotten close to or past their kind of their pre-recession peaks and which have recovered least, and do you think you have any insight as to what accounts for those differences?

Well, and thanks, James. I appreciate that you gave [ph] me an opportunity. The -- I think we'd mentioned last quarter around when we finished Q4, we had our announcement that the Mountain states had really picked up. We were very, very pleased to see the Denver, the Vegas, the Colorado Springs, the Albuquerques that we operate had turned the corner. We had tough time over the last couple of years in the mountain states. Improve the East Coast continues to do fairly well. Taxes is stable. We have seen -- we had difficulty in Southern California, although Palm Springs just finished its Southern Miller Kaplan in there. We finished almost 28% up over the prior year first quarter and the market finished 8.7%. So I would say at a 4x, 3x, beat in the industry, at least the television [Audio Gap] that's a positive sign for Southern California. A little bit of struggle still in San Diego. The El Pasos of the world, 2x in the market, we've finished up 15.7% and the market was up 7.7%, all TV. So and on the margin side, we're seeing growth in 10, 11 of the top 15 TV markets. Again, Vegas, Denver, El Paso and Albuquerque. So I think we've turned the corner and the economy's definitely improving, baby steps. And it seems to be widespread across the country. We still would like to see a little bit -- better growth there in Southern California.

Okay, great. And then, one last one. Just on political. Do you think you're going to see much impact from Super PAC money coming in and that money not being subject to the same lowest unit rate rules or are you not really looking for much of your mix in political spending to be from Super PACs and that will be fairly traditional mix versus what you've seen in prior election years?

It's Walter. Quick comment on that, on that question. I'm sure Philip has some information to follow-up with. But we started out with as I said earlier in my remarks, with a very soft political start. And we compare this political cycle with 2008. That's how we look at it. So when we see how we did in the first quarter with political, it's much less than first quarter 2008. And that's why we're still pleased with the strength that we showed in our other categories in the quarter. But in the second quarter, which we thought would be the softest quarter of the year in political, we're actually seeing some strength and I talked about Obama for America, that campaign, that's on the air and it's in 4 of our markets and doing very well. We expect that to continue. As far as the Super PAC commitment to our market, we expect to see some of that. We did $8 million in total political revenue in 2008, and we said before the year started, we thought we'd do close to $10 million with the slow start, we've got a lot of ground to make up. But we like what we're seeing right now. We think that the majority of our political revenue will come in the second half of the year. And what we've seen and certainly throughout the country, with the entry in political PACs in -- or Super PACs into the advertising mix with no limits basically, we think a lot of that will certainly be vested in the Latino markets or Latino states or states like Colorado and Nevada, New Mexico and Florida, where there are large Latino populations.

Yes, I agree. I think really, James, though, as Walter mentioned, we're going to see a lot more activity in the August, September, October, and generally, we typically do in Spanish-language television, media vis-à-vis the general versus the primary. So we expect -- having said that, which will include PACs in August, September and October and that one week of November.

Next question comes from Michael Kupinski of Noble Financial.

Am I correct that the Obama campaign is largely targeting radio right now rather than television or is it across both TV and radio platforms at this point?

We're seeing it across TV and radio. And their commitment to both media is pretty strong.

Okay. And you indicated that the political is coming in a little bit better than what you were budgeting for in the second quarter?

In the second quarter right. In the first quarter we underdelivered in that category.

Right. And so if I were to assume like $1 million in television political, do you think that that's on target or you think that might be a little bit light?

For Q1?

For Q2.

For Q2.

For Q2. That may be a little bit on the high side, Michael.

Okay. All right. And then in radio maybe like $225,000 or so?

What's that?

In radio maybe $225,000 or so?

It's possible. That's possible.

And then -- and if we looked at the auto category, you're growing faster than the English-language peers and I know that you provided the breakout between the tiers but what is auto as a percent of total television at this point and a percent of total radio rate at this time?

I think auto was about 22% of the quarter. It's 22% of our total revenue in radio, automotive represents 14% of our total revenue. Overall, just under 20% -- call it 20% rounded of our total revenue, 1/5 of our total revenue.

Okay. And so, auto as a category for television for you at least, you still have some room to grow kind of thing, especially if your English-language peers are kind of in the 25%-plus range at this time right?

Right. We were always -- we got the second wave of the recovery dollars with respect to auto, and English language folks could shot up to 25% back in 2010 and we've been grinding slowly but surely back up towards that level and we think that 25% level is achievable.

What was the high for you guys going back ways? What would be the high?

I think back in 2006, we were close to 20%, 26%, 25%?

25%, 26% of total revenue.

Okay. And if we go back to the telecom category, I know that, that was the -- a weak category for you guys last year. Can you give me some thoughts on the telecom category, are you seeing any traction there, or what's happening in that particular category?

I think the good news is that the comps started getting easier beginning next quarter. Second quarter of last year is I think weak. We were hit with a 51% or 52% decline in telecom last year. So that's the good news. The hope is that we also had signs of folks like AT&T starting to come back into radio in Q2, that's a good sign. I hope that in the second half of the year, you'll start to see this thing flatten out. So it's tough to say that this is going to be a growth category for us again this coming year and I hope that, that growth will kind of return back in 2013.

And the feeling is that the softness in telecom for us at least will continue through the rest of the year and we expect to turn the corner in 2013.

Okay, fair enough. And then finally, your thoughts on the $20 million bond reduction versus a $40 million bond redemption. What are the criteria that would you like to see before committing to another redemption at this point?

Well, we take a look at where we are. And how much cash we have and how we feel about our performance to date and we'll call it like we see it as we roll through. So we've got the ability to do another $20 million before the end of July. We'll watch that as we continue down the road here and keep our options open on that front. Of course, we have another window that opens up for another $40 million beginning August 1. But we'll keep that in mind is we go. There's no real set of quantifiable criteria that we check off the boxes before we make a decision. It's something that we can't just kind of play through day by day.

I just thought it was curious whether or not you felt that you wanted to see some better visibility on the economy or revenue traction or anything like that in terms of -- before you make a commitment to repurchasing or redeeming more bond at this point.

I think that's a fair statement, Mike. We do want to see more visibility, a little more clarity here as we head into the second half of the year.

Okay. But at this point, that the prospects are still there for you to do another redemption if -- this year. I mean that's still on the table?

It's possible, yes.

And I think doing the first $20 million, making that announcement, was a vote of confidence of what we're seeing thus far. So, it's kind of half glass -- half-empty or half-full however, you want to see it but we think it's a positive step.

The next question comes from Anil Gupta of Imperial Capital.

Just one quick one kind of building on the last one about the cash balance and where you see a prudent use of that money. Could talk a little about the M&A outlook and kind of what you're seeing in the market in terms of either stations you've looked at before that are either on the market or valuations you're seeing out there but -- can you just kind of give us an idea as to what you're seeing and what you're kind of outlook is in terms of any acquisition opportunities that you're seeing right now?

Well, I think the market is starting to become a little more active with regards to acquisition. We get calls all the time, and we look at different things here and there. But there's nothing that we're spending any time on [Audio Gap] days. We certainly look for ways to strengthen our existing clusters, so we could do for example, some type of a joint sales agreement with an existing broadcaster and given our strong position in many of our markets, that would be -- that's certainly is something that we find to be accretive, use our existing infrastructure in one of our important markets and then, perhaps do a joint sales agreement with someone either TV or radio. But as far as going out and doing any acquisitions at this time, we have nothing to talk about.

Okay, thanks. And then the second question, is I think earlier today there was an announcement between Disney and Univision about an English-speaking news network focused on Hispanic audiences. Any sort of commentary you could provide around what does that mean for Entravision? Do you see -- do you foresee any sort of increased competition or pricing pressure in the market or do you think this is kind of more a validity that this is a big market that the media world is focused on?

Well, we don't think this announcement has any impact on us. We believe that -- we've always been big believers in the notion that it's never been about the language when it comes to our business, it's always about the culture. And the language of culture is Spanish and that's how we deliver the best entertainment, news and information to our audience. So it's an interesting announcement and we wish them all the luck.

[Operator Instructions] The next question comes from Bishop Cheen of Wells Fargo.

All right, so just a couple of housekeeping things because I had some connectivity problems, I guess you would say. Pacings, I you said for radio you're starting to finally see some acceleration in late April. So -- but before you saw that, where were you, were you down, were you flat?

Well, we said we were down in April.

April, we finished out negative mid-single digits. But we -- already in late April an acceleration of that business so we don't think that's going to be indicative of where we'll end up.

Down negative mid-single digits, right?

Right. What was dragging us -- what was slowing us down with our radio businesses is national. Local was strong through the first quarter and was okay, in April but the national was soft. Now what's happened over the last couple of weeks, 2 or 3 weeks has been a huge change in our radio business. And national is firming up and building strength every week.

Right, we heard that from Cumulus yesterday on their call.[ph] Signs that national has is rebounding and awakening just in the last 2 weeks. Now TV, you were up mid-single digits, correct? Pacing up?

That's right. That's for April.

For April. And is that all in? Everything, political, whatever you got?

It's still mid-single digits core or with political. Just for April. The political is being -- it's going to be back end of the quarter heavy as far as the other pace is concerned. So we really have a needle-moving [ph] event as far as April was concerned for TV.

Okay. All right. And your Q was going to be filed when?

Two days. Tomorrow. Most likely tomorrow.

All right. Okay. And then, I just kind of stepping back a thousand feet, when I look at free cash flow, you're sort of all over the map for example in 2009, it was kind of 15% of EBITDA. But in 2010 political was 32% of EBITDA. 2011 because you had a lot of extra costs that you were looking to do is like 5% of EBITDA. So I'm trying to get a feel if this is a better year, you're going to reduce your debt, you're going to reduce your cost of capital. Any thoughts about free cash flow either as a percentage of EBITDA or hard number?

I definitely think that 2012 should be a significantly better year than 2011. I mean remember in '11 we also did a dividend, which gets back to the end of the free cash flow so... You should see considerable -- based on that alone, you should see considerable difference as you move ahead and I know it's tough to -- tough not to give you a number but to give you color beyond that. So it should be significantly improved.

I can do bigger than a bread box because you're right. If I back up the dividend, for '11, it gets closer to a teenage kind of 15% of EBITDA number in 2011.

Correct.

So is it closer to 15% or closer to 30%?

Well, if you just look at the -- if you look at that '11 number adjusting for the dividend number, I think the consensus out there has that number doubling. It's beyond our [indiscernible] possibility.

Okay. So that gets you into the 20-something percentage probably?

Right.

Okay, fair enough. And then political. So I know this is all heavily back end. It's going to be 6 weeks [indiscernible] in Q3 and Q4. But for Q1, political gross, I think that's gross number, just about a mil, $500,000 on TV, $500,000 on radio?

No. Our political total was $100,000. Just about $100,000 between TV and Radio.

Okay. Sorry. All right. Understood. All right. And again, Bonkies [ph] and we don't know but it was something like $8 million in 2008 with political?

Correct. $8.1 million in 2008.

Right. Could you remind us again what it was in 2010?

2010, it was $7.1 million.

Okay. And this is kind of a mood-ring question. How does it feel to you this year?

It feels -- like we said earlier, part of the reason that we underdelivered political in the first quarter was due to the fact that have a lot of media assets in Texas and the primary in Texas was moved to the second quarter. And that was I think the most impactful event in the quarter with regards to political. But now that, that primary has been moved to second quarter, and so there's still results of that to come to fruition. And then on top of that, we're seeing Obama for America advertising in 4 of our battleground states. And as we talk to people across the country, in New Mexico, for example, a number of races in New Mexico, we expect to see political dollars there. Florida for example, another important state. California is going to have some propositions that will generate a lot of activity. So we still remain pretty bullish about our political potential for the year.

Plus I think the primary season on the Republican side dragged on a little longer than we were thinking it would and has been talked about before the money doesn't start flowing our way on the political spend until we flip into general election mode. That took its own time to get through and I think that was somewhat of a disappointment.

All right. This all good. All right. Last one for me. [indiscernible] telecom I think we said something like it was down 42% in 2011, one of your worst categories?

That's correct.

And in Q1, did you quantify how much it was up?

It was down.

It was -- it continues to be down in Q1

Right, right. It was down. And it was down 42%.

That was Q1?

In television and in radio, it was down in the 30s I believe.

Down 20% in radio.

20% in radio.

We've got one more quarter.

Are you seeing any turnaround here?

The only turnaround we're seeing that Chris pointed out -- pointed to is the lower comps, which will come in the second, third and fourth quarter. But no, we don't see it bouncing back in any significant way in 2012.

But it's still your seventh-largest category?

Right. But that's pretty down. In radio it was #7. Then television, I can take a look at it quickly here but it wasn't much better than that. Television was 7 also.

The next question comes from Aaron Watts of Deutsche Bank.

Just one for me. I'm curious because you're in a kind of unique position where you've got a view on both radio, a little bit of digital and TV. So I'm curious as you talk to your advertisers on the local level when they're making decisions on where to spend their ad budgets. If you're seeing any pullback or shifting from radio to digital, from TV to digital, just curious about the movements there. And then if you have any insight on the national level and some of the shifts going on, if any, I'd be curious to hear your thoughts there too.

Well, I think if there's any softness with regard to the radio story, it's on the national front. The local actually feels pretty good for us. We are up 5% for the quarter and things continue to look good for second quarter on the local front. They are starting to firm up a bit for national but the real struggles been the national, the ebb and flow of the process. And it hurt us in Q1, national was down 12% against that plus 5% local. And we'll see where we end up for Q2. But really locally and things -- it's in part going hand-in-hand with how the economies, the local economies at the local level are doing. And locally, things feel good.

And on the national side, you don't think it's any big shifting around of ad budgets, it's more just a low, temporary low?

Yes I think that's the way to put it. It feels more like a low than some kind of a secular seismic event that's better to balance from time to time.

If anything, we've seen more of an integration of digital with our broadcast media and therefore, the solutions that we offer integrated solutions, if anything, the digital is helping propel the broadcasting expenditure.

At this time, I would like to turn the conference back over to management for any closing remarks.

Thank you, Andrew. This concludes our first quarter 2012 earnings call. We look forward to speaking to all of you again in August when we will announce our second quarter results. Thank you.

Thank you for participating in the Entravision Communications Corporation conference call. This concludes today's events. You may now disconnect.