Good day and welcome to the Entravision Communications’ Fourth Quarter 2014 Earnings Conference Call and Webcast. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference call over to Mr. Walter Ulloa, CEO. Mr. Ulloa, the floor is yours sir.

Thank you, Mike. Good afternoon, everyone. Welcome to Entravision’s fourth 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 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 expressed 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 fourth quarter results and marked the end of a highly successful year for Entravision. Our performance in the quarter was driven by strong radio and digital revenue as well as the impact of higher political revenues across our TV station group. Our operating results drove solid consolidated adjusted EBITDA and free cash flow during the quarter. Looking at 2014, we made steady progress throughout the year transforming Entravision into a multimedia company that delivers highly targeted, highly engaged Latino audiences across all traditional and digital platforms. We expanded our digital products and capabilities throughout the year, including acquiring Pulpo Media last summer. We continue our transformation from a pure-play broadcasting company to a global integrated media and technology company serving the Latino community in the United States, Mexico and Latin America. We also remain committed to returning capital to shareholders for…

Thank you, Walter and good afternoon everyone. As Walter has discussed, net revenue for the quarter was $65.3 million, up 9%. Operating expenses increased 6% to $38.2 million and consolidated adjusted EBITDA increased 8% to $21.3 million. Net revenue for the year was $242 million, up 8%. Operating expenses increased 5% to $142.7 million and consolidated adjusted EBITDA increased 9% to $79.3 million. During the fourth quarter of 2014, the company declared and paid a cash dividend of $0.025 a share to shareholders of the company’s Class A, Class B and Class U common stock. The total amount of cash disbursed for the dividend was $2.2 million. For the year, the total amount of cash disbursed for dividends declared and paid was $8.9 million. The company also announced today that the Board of Directors declared a quarterly cash dividend of $0.025 a share to shareholders of the company’s common stock payable on March 31, 2015. The total amount of cash to be disbursed with this quarterly dividend will be again approximately $2.2 million. As previously announced, we currently anticipate making cash dividends on a quarterly basis in future periods. Also as part of our previously announced $20 million share repurchase program, the company repurchased 1.7 million shares of Class A common stock for approximately $9.1 million in the fourth quarter of 2014. As of February 26, 2015, the company has repurchased a total of 2.5 million shares of Class A common stock for approximately $12.5 million at an average price of $5.08. In addition during the fourth quarter of 2014, the company voluntarily prepaid $20 million of term loans under the company’s senior secured term loan credit facility. During the year, the company made principal term loan payments of $23.8 million. The ending balance of the term loans as of…

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question we have comes from James Dix of Wedbush Securities. Please go ahead.

Hey, good afternoon guys. A couple of things, I guess just in terms of your first quarter pace in TV I mean it sounds like at least on a combined basis TV and radio are pacing pretty strongly in auto, I was just wondering within TV are there any categories would stand out to you in terms of what’s driving that pace like on a core basis down a little bit. And then secondly, any color you can give just on your operating expense outlook for 2015, I know there is a couple of things that you are flowing in for the full year, I guess operating expenses were up 5% or so for the full year ‘14, but just any outlook you could give on that? And then finally just on the digital side of things, when you look at your ad revenue by format such as Walter you mentioned audio in particular, but it sounds like you have got a full array of types of formats that you are selling audio, display, video. I am just wondering like kind of what the mix is there and what you – how you see that mix changing over time across the digital segment? Thanks.

Okay. James, I will answer the first question. You wanted to know I think get some kind of glimpse of Q1. We indicated to you that our auto pacing or combined radio and TV was plus 11 and the point there was that audio – auto has bounced back here. It appears to be bouncing back in the first quarter. We are pleased with what we are seeing at least so far. And as far as categories that are, I will say, hurting us, telecom is the most – is the one that stands out the biggest. I will turn the second question over to Chris and then come back on the digital question.

Yes. Hey, James. So just to add to that point, telecom has been a real dare for us so far in the quarter. Last year, we had a sizable campaign primarily from MetroPCS, but hasn’t really come back and that’s something that’s been a bit problematic. As far as operating expenses are concerned for the year, if you look at TV and radio on a combined basis, it should be in the low single-digits. That will be accentuated by the fact that we are comping up against periods in the prior year, where we did not have the Pulpo expense. So, that’s really what’s going to be the primary expense driver beyond that low single-digit number.

Okay.

And as far as the question you asked about our digital revenue, what kind of – if we could break it out, I guess in terms of categories, I mean, right now we are looking at display, which represents about 50% of the total revenue, video is about 25%, and mobile is 25%, but certainly mobile is the fastest growing of the three and we believe we are certainly highly confident that mobile will continue to grow at a faster rate than the other two. We also believe that video mobile and mobile promotions and native content will be strong growth drivers for us in 2015 in our digital business.

Okay, great. That’s very helpful. Thank you.

Thanks, James.

The next question we have comes from Michael Kupinski of Noble Financial.

Thank you. I have several questions here. One is in terms of the ratings that you indicated, Walter, in your radio group, is that what’s driving the favorable pacings in the first quarter or is the book out there to where you are actually selling the ratings? And if not because typically I think the ratings book usually takes about 6 months before you really start to reflect that into the CTMs and so forth, I was just wondering if we could assume then that maybe the second quarter is going to show similar strong growth?

I believe that’s a bet we can all make, Mike. We have put – we made a number of changes in 2014 in our radio business. We consolidated KLLY and KDLD. That’s been a huge success. In fact you said, it takes about 6 months to see the results of any change, but we did see it in December, we had a big December that has flowed into January. Piolin has had some terrific ratings. Erazno continues to be one of the top talents in our business. And then of course Genio Lucas, which is also very strong in the morning on our Jose format. So, we think right now we are – our position for radio growth in 2015 is excellent. I don’t think there has ever been – I don’t believe that anyone in our business has ever assembled the kind of talent we have under the Entravision umbrella. And we intend to do everything we can to monetize this opportunity at the highest level.

Keep in mind, Mike….

I am sorry, most of that coming then from the radio network, local revenue is probably down I would assume.

Coming up from everywhere, it’s coming from our local revenues it’s coming from Entravision solutions, our syndicated programming as you know is white hot. Right now, our radio business is performing. We have never seen it perform like this in the history that we have owned it, but of course taking a lot of work to get us what we are.

And once we get a couple of books in which will take a little more time, then you should expect to see national revenue really falls. The national typically buys ratings were at the local level, but not necessarily depend upon ratings to make a buying and the real acceleration that we have seen over the past several weeks or months, I should say, is from local pacing is actually up double-digits and that’s not ratings pace. Now, once ratings kick in, you should expect to see an acceleration.

We just received a $500,000 order yesterday for a fast food client and it’s a $0.5 million on one of our syndicated networks and this client has never been with us before, so, which is indication of [indiscernible].

Perfect. And then just – I am sorry for the open-ended question, but any update on the discussions with Univision?

No, we have no update, but we do intend to get back to that here probably after – probably mid-March, reconnect with them and see if we can get whatever issues are out there taken care of, but we don’t expect anything that can’t be resolved by both of us working together.

And in terms of your digital operations, would you expect that this business would be similar to television in that? It would benefit from political advertising in 2016. Do you have any indications on that?

We do. Pulpo had some positive experience with political in 2012. So, we think now with the combination of our assets with a bigger, stronger Pulpo platform, with the Luminar data that overlays the Pulpo ad network, the political revenue we are going to be able to generate from this particular business will be very positive.

Final question on, now that your balance sheet is pretty much in order, are you looking more aggressively at acquisitions these days and if so what are you seeing and where are the best opportunity digital, radio, television and other what are you seeing out there?

Well, we are open to look at everything, right. Broadcast certainly is something that we have been involved with for many years, but I think a lot of time – lot of our time now is spent looking at the well-run post revenue digital companies. And we want companies that are not startups, but have revenue and prospects for good growth and to complement the core digital businesses that we already have built and acquired.

Perfect, thank you.

[Operator Instructions] Next we have John Kornreich of J.K. Media.

Yes, I have three questions. On retrans $26.4 million versus $22.2 million, I think that’s a lot more than you had guided to at the beginning of the year. Would this then suggest that we are probably looking at a flat year in ‘15 at the $26 million level?

John, I may have mentioned to you and I think I have said publicly, there were some true-up payments that were one-time during the course of 2014 that caused that number to drift up from what we originally guided. We still think there is going to be some modest growth in retrans for 2015, call it, low to mid single-digits.

Of the $26.4 million base?

Correct, of the $26.4 million base.

Okay. Remind us what did you pay for Pulpo?

Its $15 million in cash, plus a $3 million earn-out.

Okay. And why is it operating at breakeven right now with $14 million of revenue?

Well, we had guided previously and we are still sticking to that, that’s going to be a $1.5 million cash flow generator in 2015.

Okay.

If you look at it from that basis, we feel it’s going to be accretive next year – this year.

Okay. Did I hear you say that – in TV in the fourth quarter I thought I heard you say that “core” advertising was down 9%?

That’s right.

But you made a comment that local was flat, national was up 1%?

That’s including all-in. That’s both including – that’s including Affordable Care, excluding political.

Political is in the national?

That’s correct.

Which was up 1%, I understand. And getting back to retrans negotiations, I don’t know if you care to comment does the rather abrupt departure of Andy Hobson set those negotiations back?

That’s a good question. We are not getting expecting any issues arising from Andy’s departure. We have got a dialogue with many folks over Univision and that composition continues to be pretty fluid without Andy at the financial helm. So, we are continuing on without that.

Okay. And lastly why is CapEx jumping almost $5 million?

CapEx is jumping up. We previously guided $10 million for the year. We came in at about $8.5 million to $8.6 million. We had about a $1.5 million rolled into this year. We have got – the Pulpo acquisition has got about $1 million in related CapEx that’s going.

Okay.

That’s a new item. And then we have got – our LA Studios is going through a refurbishing and that’s going to be about $1 million ticket item. So add that $3.5 million to the traditional $10 million that we typically do it, I think we have $13.5 million.

I recognized that radio is turning positively and it might turn even dramatically with the help of LA. It’s interesting, I mean, the spread for the year was $12 million on $70 million of radio revenue. And if you would allocate like a third of the corporate expense to radio, because it is sort of the revenues, there is very little profit. Why our margin is our low in radio in general granted they will get better?

Well, our radio division generates margins that are generated around the 20% range. As you know, it’s a fixed cost business. We made a lot of cuts to this business back in 2008, 2009, but the reality is that the revenue dropped off further than the expense cuts and we have been struggling against that ever since. The good news is we finally have a content slate on track to generate some decent ratings that will help ramp up revenue to what we think is going to create margin opportunities far and above what we are currently generating now.

Okay, that’s great. Thank you for all the answers. I will see you in Florida.

Thanks, John.

Next we have Tracy Young of Evercore.

Hi. Could you give us a little bit of color on the healthcare category what that represented as a percentage of revenues in TV and how that did in the quarter?

Healthcare for television was approximately 11% of our TV business. It was $4 million in the fourth quarter of 2014.

Okay, thank you. In terms of LA, did you give comparison of how you did in that market versus now Miller Kaplan or could you give us some comparison versus the radio market in general?

For the fourth quarter.

Yes.

We are all scrambling here looking for documentation.

And then I guess just following up on John’s question on radio, you have added some great talents for the – to your roster, should we be concerned that expenses are going to go up as a result of that?

Well, on the expense front, Piolin is really the only addition to our lineup and that’s more of a barter deal as far as – as we generate revenue, a portion of that revenue will go towards Piolin. So, I am not looking at a fixed cost base that’s going to be material to our expenses in radio. So, short answer to your question is no, we don’t see any material impact certainly this year.

Okay.

So, as far as the market information is concerned fourth quarter, our LA cluster was at a plus 2% in the markets, general market was a minus 1% and the Spanish market was a minus 4.4%.

Great, thank you very much.

Thanks, Tracy.

Well, at this time, we are showing no further questions. We will go ahead and conclude today’s question-and-answer session. I would now like to turn the conference back over to Mr. Ulloa for any closing remarks. Sir?

Thank you, Mike and thank you everyone for participating on our fourth quarter and 2014 year end call. We look forward to speaking to all of you in May where we will deliver our first quarter earnings results. Thank you.

We thank you sir and to Mr. Young for your time today. The conference call is now concluded. Again we thank you all for attending today’s presentation. At this time you may disconnect your lines. Thank you and take care everyone.