Good day, and welcome to the Entravision Communications First Quarter 2014 Earnings Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Walter Ulloa. Mr. Ulloa, the floor is yours, sir.

Thank you, Mike. Good afternoon, everyone, welcome to Entravision's First Quarter 2014 Earnings Conference Call. Joining me today is 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 the property of Entravision Communications Corporation. Any redistribution, retransmission or rebroadcast of this call in any form without the 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 on Form 8-K. We generated strong financial results during the first quarter, and we are off to a solid start in 2014. Our core television and radio properties outperformed the broader market once again. And we made additional progress strengthening our digital offerings and marketing and sales capabilities. Our strong position in key Latino markets nationwide and the expansion of our multimedia offerings gives us the unique ability to deliver robust, multi-platform campaigns to reach the rapidly expanding Latino population. Consolidated first quarter revenue was $52.7 million, up 7% compared to the first quarter of 2013. We generated consolidated adjusted EBITDA growth of 12% and year-over-year free cash flow growth of 172%. Operating expenses were up 5% for the quarter. EPS for the quarter was $0.05 per share compared to negative $0.01 per share in the first quarter of 2013. Free cash flow, as defined in…

Thank you, Walter, and good afternoon, everyone. As Walter has discussed, net revenue for the quarter was $52.7 million, up 7%. Operating expenses increased 5% to $33.5 million, and consolidated adjusted EBITDA increased 12% to $15 million. During the first quarter of 2014, the company declared and paid a cash dividend of $0.025 per share to shareholders of the company's Class A, B and U shares of common stock. The total amount of cash disbursed for the dividend was $2.2 million. The company also announced today that the Board of Directors has declared a quarterly cash dividend of $0.025 per share to shareholders of the company's common stock payable on June 30, 2014. The total amount of cash to be disbursed for this quarterly dividend will be approximately $2.2 million. For the quarter, television net revenue was up 8% to $37.7 million compared to $35 million in the same quarter of last year. The increase in our TV segment was primarily attributable to increases in local advertising revenue and retransmission consent revenue. Radio net revenue for the quarter was up 6% to $14.9 million compared to $14.1 million in the same quarter of last year. The increase for radio was attributable to an increase in national advertising revenue. Excluding retransmission consent revenue and political advertising revenue, core TV advertising revenue was up 3% for the quarter versus TV industry core spot revenue of 1%. This is the 10th quarter -- consecutive quarter where our core TV revenue has outperformed that of the industry. Core radio advertising revenue was up 5%. Retransmission consent revenue for the quarter was $6.7 million compared to $5.3 million in the same quarter of last year. Retransmission consent revenue for the year 2014 is now estimated to be approximately $25 million. Operating expense for the quarter…

[Operator Instructions] The first question comes from Michael Kupinski of Noble Financial.

A couple of questions. I was wondering if you can just talk a little bit about, what was political in the quarter? I guess it was about $400,000, $500,000, or can you quantify that?

Political in this quarter and in the first quarter was about $605,000.

Okay. And it looks like World Cup is off to a really strong start. You've got some advance bookings there. Do you -- and that's obviously coming in a little bit better than expected. Any thoughts on what political could be for the year at this point?

Well, what we've told the market and all of our investors is that, in 2010, total political was about $7.1 million. And we are looking to grow that by 20% in 2014. Q1, we had a moderate amount of -- or modest amount of political. Q2, probably be the same. But then, the bulk of political will hit in late in Q3 and then, of course, heavy in Q4.

And then auto category seems to be continuing to be pretty strong. I was just wondering, where is auto in terms of as a percent of revenues versus its peak cycle?

Auto rate now for TV, Michael, is about 26% of our TV revenue, and it's about 14% of our radio revenue. But you still have some room to grow compared to our peak back in, call it, the 2006 range where auto was close to 30% of our total revenue.

And I know that you guys are looking at kind of tuck-in type acquisitions and things like that. Can you talk a little bit about the M&A environment, particularly for digital? Any thoughts there? Or does it look like you might try to build out further investments in that space? Or do you think that there's more acquisition opportunities? Any thoughts on that?

Mike, we continue to monitor and look at acquisitions, media acquisitions, that will enhance our entire media platform. Digital is a place where we spend a lot of time and work, and identifying digital opportunities that would enhance the digital platform that we continue to build and strengthen.

The next question we have comes from Amy Yong of Macquarie Capital.

This is Andrew for Amy. Just had 2 questions, 1 follow-up on the M&A question. Just interested to know if you have any markets that you'd like to participate in or expand in? And what's your strategy to expand your portfolio? And secondly, was there any impact at all from the SEC retrans limits on the joint station negotiations?

Well, I'll take the latter part -- or the second part of that question first. We have not seen any or do not expect any impact on our -- any JSAs that we have. I believe we have 9 JSAs, 6 with Univision, and those are already attributable. And the 3, the other 3, we believe will seek some relief through an exclusionary provision that the FCC has included in their report and order. So we don't see any or very -- we don't see any impact on our business as a result of the FCC's latest rule-making. As far as acquisitions, I mean, in other markets, I assume that you're referring to broadcast acquisitions. And I'll just say that there's nothing -- does not appear to be anything right now that we're interested in. There's been a lot of consolidation that's taken place over the last 12 to 18 months. But most of that, all of that has been in English language. And -- but we'll continue to look around and see what's out there. And if there's something that comes our way that either strengthens our broadcast platform or maybe allows us to enter a new market, certainly, we'll take a look.

But our strong preference would be to strengthen our existing platforms -- our coverage in existing markets, that's kind of a lower-risk, higher-return opportunity for us. And that would be clearly be our preference if we're looking at the M&A environment, overall.

And on radio, is there anything, potential consolidation that you see there or do you think the market is pretty much -- the opportunity has gone there?

Well, I wouldn't say it's gone. But there doesn't appear to be any opportunity right now. I mean, that could change. Who knows what will happen over the next couple of years. But right now, the opportunities are just one-offs here and there and not much else.

The next question we have comes from Larry Haverty of GAMCO.

I'm just curious, what is your average weighted cost of -- that interest rate seems awfully low and -- or the interest expense seems awfully low in the first quarter. And secondarily, how much was retrans last year?

The cost of the debt is pretty straightforward, it's a LIBOR plus 2.5% instrument, and we have a floor on that LIBOR at 1%. And last I checked, LIBOR was in the 20-, 25-basis-point range, so we're at that 1%. So 3.5% is our cost of debt. It will be at that level through the end of 2014 -- to the end of 2015, I should say. And then we...

You should get more of it.

We should get more of it. So noted. And then in 2016, we do have $186 million of that debt, which is -- goes into a fixed-rate agreement, where that rate will be 5.23% for that $186 million. And then the balance of our debt will be -- continue to be at that floating rate. If LIBOR continues to be under 1%, we'll be at that 3.5% number from then on. So you'll have to figure out what you think LIBOR is going to do to figure out what our interest expense is going to be beyond 2016.

And retransmission revenue was, last year, was $22 million? Is that right?

Retrans revenue for the year?

For the year, for 2013.

It was $22.2 million.

The next question we have comes from Tracy Young of Evercore.

A couple questions, if I could. First question, I may have missed this, but the 2Q pacing numbers for radio and for television. And then if you could give us some sense of health care -- did it drop off in the end of March or are you still seeing some growth there?

The pacing numbers for Q2, Tracy, are mid-single digits for television and radio, or said differently, consolidated revenue, excluding retrans. Health care was a strong category for us, in Q1 was even stronger in March than it was in January. And the window now is closed, so the health care industry has pulled back its advertising. We expect to see it come back in a strong way here in the fourth quarter of 2000 -- of this year, when the window reopens.

But right now, the category in Q2 is pacing flat.

But it was up -- the category -- the total category across all of our media was up 77% in the first quarter versus Q1 2013.

Okay. And then it sounds like you're making some interesting changes on the radio side. Is there more investment that we should be expecting this quarter?

I don't think there's more investment that investors should expect. I mean, we've been building this content unit here for a while and got some terrific and talented people working in it. And we're just starting to see the results of all of our work and that we're -- we now have become the #1 syndicator of Spanish-language content -- audio content in the country. And so that provides us with a number of opportunities for advertisers and sponsors.

We did, I should add, Tracy, we re-upped Erazno's contract, who's the biggest personality in the space now here in the country. And that represents about 2 percentage points of our radio OE increase in the quarter, and you could expect to see that for the balance of the year. He did get a hefty increase, but largely based on performance.

[Operator Instructions] Next, we have James Dix of Wedbush Securities.

A couple of things. I guess just first, as you look at kind of the second and third quarter and the impact of the World Cup, I know this has been kind of a parlor game in the past. But any sense as to how incremental you think that the sales that you've booked there are to your underlying revenue on the TV and then the radio side? And then second -- secondly, there's obviously been, on the TV side of things, a lot of interest in the FCC's new rules. It doesn't seem to me as though there's any big implication for you directly, at least, for example, the joint sales agreement side. But do you think there's any potential restrictions or maybe potential opportunities that might get opened up for you as these rules play out and they affect potentially stations that come on the market? Or do you think there's maybe not all that much that's going to change there?

Well, let me just -- I'll respond to the second part of the question, first. I mean, we don't expect, and again, any impact from -- on our company as a result of the latest rule-making by the FCC as it relates to the JSAs. We see little, if any, impact on our business. As for any divestitures that may take place in the future, certainly, there's possibility. If there was something that would enhance our current media clusters, particularly along the U.S.-Mexican border, that would be interesting. But other than that, we'll just wait and see. As for incremental revenue, it's still too early to tell. The business is building every week. But as to what's going to be incremental, it's not -- I don't think -- I'm not comfortable putting a percentage on it yet.

Okay, great. And then just one longer-term thing. How do you think of Telemundo as a competitor to Univision? They've made some traction in recent years in terms of their share of prime time. And then, obviously, Comcast continues to make some investment in them. I mean, how do you think people should be thinking about kind of the long-term competitive balance or where we are in terms of where the shares are between Univision and Telemundo right now on the television side?

Well, I mean, Telemundo has made progress with its programming slate and continues to improve. I mean, they're owned by a massive telecom media company, which is only going to get bigger as a result of this merger that they're working on. So sure, they are a contender. They're an important company.

Next, we have Michael Kupinski, Noble Financial.

Just more of a theoretical or just kind of a longer-term view type question. Historically, Spanish television and radio has always been viewed as a discretionary buy. I think advertisers viewed advertising in core radio or core television in more English-language and then discretionarily would buy Spanish-language stations, I think, if the economy was good. Do you have a sense that, that is still the case? Or do you think that there's a shift going on among advertisers that are now viewing Spanish as a must-have? And I ask that question predominantly because, obviously, you are outperforming the English-language peers right now again. But I'm just wondering if there's a shift, especially given the fact that I believe you picked up some really unique advertisers that I don't think you've had in the past, including Jaguar and maybe a few others that are more luxury carmakers and so forth, which seems kind of a unique to me. And I was just wondering if you can give us your overall thoughts about that.

Well, just briefly, Mike, I mean, the Latino market continues to grow significantly year after year. It's only going to become more important to the U.S. across every level of society. Certainly, spending is an important metric for our economy. It's approaching a $2 trillion market in consumer spending more -- year after year or cycle after cycle, we're seeing more investment in our markets in political. And I believe, based upon what we've seen in the last few years, that there's less of this -- if budgets are cut, there's less of a tendency to cut the Latino budgets or Latino media spend, and that's because number -- most advertisers now are looking to the Latino community for growth. It is a population of larger families growing at a rate unlike any other ethnic group in the country. So it's natural that more advertisers would be looking to the Latino media and population to increase their market share or case lot sales.

And then the likes of Walmart, it indicated that their -- they believe that their growth is going to come from more non-Caucasian type of customers. Have you seen the likes of a Walmart, for instance, increasing their budgets with you at this point?

We have, we have seen them. I'm not sure about this quarter, but I know that in the fourth quarter, they were strong. But I'm not sure about this quarter as I speak to you. But yes, they went out and identified that -- or said publicly that their growth, they expect it to come from the multiethnic, multicultural segments of the U.S. population. So they're looking and spending in -- with multiethnic media.

Walmart was relatively -- was essentially flat for the quarter. But just look at the new advertisers. I'm looking at our new advertiser list. To your point, Lexus put on about an additional $100,000 in advertising, brand-new advertiser for us. That's a sign of just a product expansion to the higher end of the product offerings that I think is attributable to exactly what you're talking about. We're becoming much more of a core part of budget.

Tracy Young, Evercore.

Just 2 follow-ups on retrans. Should we assume that the $25 million is basically spread out evenly by quarter? And then, are there any other deals that we should know about or contracts that are coming up?

Sure. For the retrans balance of the year, you put in about $6.1 million per quarter, it gets you to that $25 million -- should be pretty straight through. And as far as new deals are concerned, everything on the retrans front, it's essentially locked up through 2017. So there's not really any new deal out there that would cause any material pop.

Well, this concludes our question-and-answer session. I would now like to turn the conference back over to management for any closing remarks. Gentlemen?

Thank you, Mike, and thank you, everyone, for participating in our first quarter earnings call. We look forward to speaking to all of you later this year, in August, and when we'll announce our second quarter results. Thank you.

And we thank you, sir, for your time and to the rest of the management team. The conference call has now concluded. We thank you, all, for attending today's presentation. At this time, you may disconnect your lines. Thank you, and take care, everyone.