Good afternoon and welcome to the Entravision Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] 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 over to Walter Ulloa. Please go ahead.

Thank you, Anita. Good afternoon, everyone, and welcome to Entravision's third quarter 2017 earnings conference call. Joining me on the call today is Jeff Liberman, 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 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 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. Our third quarter results include the financial impacts of Entravision's participation in the recent FCC TV broadcast spectrum auction. Earlier in the year, we announced that we have generated approximately $264 million in auction proceeds related to the spectrum before stations and through markets. This gain has been recorded as revenue in the third quarter. In addition, auction-related expenses include a non-cash charge of $12 million, as well as approximately $2.1 million in corporate expense that have also been included in the current quarter's results. Excluding the revenue from the auction results, our core advertising revenue in the quarter was largely in line with our expectations as a result of non-returning political revenue in our television and radio segments. This decline in revenue was offset by higher revenues at our digital…

Thank you, Walter, and good afternoon, everyone. As Walter has discussed, total net revenue for the quarter was up 412% at $334.6 million compared to $65.3 million in the same quarter of last year. Operating expenses increased 7% to $43 million in consolidated adjusted EBITDA was $262.4 million. Excluding revenue and expenses relating to the auction total revenue was up 8% over the prior year to $70.6 million, while EBITDA was down 29% versus the prior year at $12.7 million. During the third quarter of 2017, the company paid a cash dividend of $0.05 per share to shareholders of the company's Class A, B and U common stock. The total amount of cash dispersed for the dividend was $4.5 million. The company announced today that the Board of Directors has declared a quarterly cash dividend of $0.05 per share to shareholders of the company's common stock payable on December 29, 2017. The total amount of cash to be dispersed with this quarterly dividend will be approximately $4.5 million. As previously announced, we currently anticipate making cash dividends on a quarterly basis in future periods. The company also announced today that on October 2, 2017, the company entered into a new affiliation agreement, which is superseded and replace the company's prior affiliation agreement with Univision. Additionally, on the same date, the company entered into a new proxy agreement, and new marketing and sales agreement with Univision, each of which superseded and replace the company's prior such agreements with Univision. The terms of each of these agreements expire on December 31, 2026 for all of the companies Univision and UniMas network affiliates stations. Except that the new agreements will expire on December 31, 2021, with respect to the company's Univision and UniMas network affiliate stations in Orlando, Tampa and Washington, D.C. On…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] At this time, we will pause momentarily to assemble our roster. The first question comes from Michael Kupinski with Noble Capital. Please go ahead.

Thank you. And thanks for taking my questions. First, I was just wondering, in terms of your TV pacings how is that reflective of the TV acquisitions that you made in this quarter? Is it reflected in those numbers or how do you account for those?

No, Michael, the pacings, that deal just closed yesterday and the pacings are not factoring in the incremental revenue and expense, or the revenue I should say from the KMIR acquisition.

Got you, and I was wondering if you can, do you have any thoughts in terms of either annual revenues or what type of quarterly revenues those stations might generate?

Yeah, Michael, I don't know if we're going to break those out on this call. I think what we want to do is get our arms around the operation and convey those on our next quarterly call.

Okay. In terms of the…

And I just - go ahead.

I'm sorry.

Go ahead, Mike.

Yeah, in terms of the loss of the San Diego affiliation, I thought that was roughly $1.5 million in the quarter in revenues and cash flow and I was just wondering, based on the pacing data, it would seem like the impact was more than that. Can you just kind of give us some color on what that affiliation change means in terms of the quarter?

Sure. It was about $3 million in revenue against $1 million in expense, so that was kind of contributing about $2 million in cash flow. And then offset by - so that's the loss. And then offset by the incremental about, call it, little less than a $1 million in revenue from Azteca with $0.5 million in expense. So there is about $0.5 million of incremental cash flow to offset. So net of those two, you're correct, it's about $1.5 million cash flow hit as a result of the affiliation swap.

Got you, and in terms of the corporate expenses, we're a little elevated. Is that what you're referring to by the $2.1 million extra expenses related to spectrum auction? Is that where it's…

There were $2.1 million in incremental corporate expenses associated with the auction that we booked, commensurate with the booking of the revenue.

And so, $6 million would be roughly a good run-rate for that line item going into the next quarter?

Going into the next quarter, yeah, a little less than that, maybe around between $5.7 million and $5.8 million.

And can you just talk a little bit about what's going on with - in terms of radio what the weakness is related. I know that you got a big lift your of your networks there for a while with La Chokolata and so forth. But the - it seems like your radio is certainly underperforming the rest of the industry at this point. Can you just kind of talk what the issues are?

Yeah, Michael, this is Jeff Liberman. We've been working really hard on, as we call it, a revenue enhancement plan and we've been concentrating really on the Lucas show and also the De Erazno y La Chokolata show at first year. And we are starting to see some improvement through that enhancement plan in our outside markets, meaning outside markets, not in Los Angeles as rapidly. As you know, LA is a very competitive marketplace and it's going to take us a little bit longer to get to that point where we're starting to see these increases in Los Angeles.

Just I'd add a little bit of color to that Michael, just to put it in the context. It's really about our competition in the Los Angeles market. We talked about that core pace being at minus 6 for fourth quarter. If you were to exclude LA, we're down to a minus one, so for the radio division. So really it's one market that we're focused on getting turned around.

Got you. And are you - on your television side, given the pacing data, that's also pretty weak. Is there any specific issues in the television space as well?

I think the real headwind for TV, once you kind of filter out the Telemundo issue, you're essentially looking at flattish pacing. The real concern with the TV segment is just auto. Autos is weakening on us and I don't think that's much of a surprise. But that's something that we have to contend with, not TVB numbers just came out earlier today. And excluding political TV growth rates were minus 10 for the industry. So to finish off flat, I guess, we'll take it compared to where the industry ended up.

Yeah, and some of that are related to an AE [ph] stabilization and the ratings at Univision?

Yeah, ratings for Univision have actually improved somewhat over the past, I will call it 9 to 12 months, so if you're looking at the annual comps, they're getting easier and their ratings are starting to improve. So if anything we're hoping that will be a tailwind going forward.

And also, Michael, in terms of Univision's ratings…

Are you on mute?

No, no.

Okay. I can hear you, never mind.

We haven't seen the impact of any decline in the ratings from the Univision programming like across our markets. Now, granted we're in high-density, high growth Latino markets. So perhaps that's part of the reason. And the other reason I think is the fact that we - our news programming is so strong and number one in 14 of 18 markets, when you go head-to-head against Telemundo.

Got you. And can you just talk quickly in my question, I promise. Last question, the M&A environment and what the outlook is there, I know, that you have a lot of cash to deploy at this point. So if you can give us an update?

We continue to look at a number of opportunities, but nothing to announce. Our focus is, we're looking in two areas, right. First, television, where we might be able to bolster existing clusters by adding an English language television affiliate like we did in Palm Springs, but we're looking for markets that are high density Hispanic markets, if we're going that direction. The area we're looking at is in digital, we continue to look for digital acquisitions, it might enhance our current platform. We're pleased with what we've done so far with digital. Digital will be 20% or more of our total revenue by the end of the year. That's what we forecast to that kind of growth less than two years ago. And we believe, we are well-positioned to reach that goal, and then, of course, we're now going to move on to increasing that goal to 30%, but that will be for 2018 and beyond.

Got you. Thanks. That's all my questions. Thank you.

Thank you.

Thank you, Mike.

[Operator Instructions] The next question comes from Gordon Hodge with Tracker Research. Please go ahead.

Yeah, good afternoon. I just had a couple of questions. One, just want to verify that the fourth quarter TV pacing whether that included retrans or not?

Fourth quarter does not include retrans. No, that's just advertising pace.

That's just - that's what I thought. Okay, great. And then, on the subject of retrans, nice increase this quarter. I was wondering, I know with the renegotiation with innovation. I'm just wondering, if that reflected any kind of catch up, where they haven't been paying you on a new split basis, they're enjoying new higher retrans numbers. And if that's an indicative number going forward or was there someone - like I said, one-time catch up in that?

No, that's a good point. There was about a $700.000 catch up payment in that $8.5 million number that we booked for third. So you're looking at retrans - overall you're looking at retrans rates to go up between mid and high single digits for the next - through the end of our new term of 2026. So that's the growth profile, we're looking at now. But you should not run rate that $8.5 million into the next quarter. It should be somewhere in the mid-$7 million dollar range.

Okay, very good. And then, last question, just I'm curious whether you had a noticeable impact or enjoyed a noticeable impact from the Gold Cup this year. I think it was held for last year, but it was in second quarter instead of third this year. Or the Copa…

I think the Gold Cup was generally a positive experience but you're not talking about anything that really was material towards our overall performance was concerned.

Got it, very good. Thanks.

Thanks, Gordon.

Next question is a follow-up from Michael Kupinski with ‎Noble Capital. Please go ahead.

Thank you. I was wondering if you can give us a little update on the prospect of further spectrum sales. I know that you were potential working on at least one market for that. I was wondering if that is still ongoing or if there's been some resolution there?

There are conversations that are ongoing on multiple markets - in multiple markets on that front, Michael. But we don't have anything to report as of right now.

Okay. And then in terms of, I think that in one of your other markets that your - there were some prospects that there you might see that the ability maybe to rent the station. Is that still on the table at this point?

Yes, all of the one-offs with respect to channel sharing opportunities that we're still hunting down on, Michael. So that I don't think anything definitive in either direction has been determined yet. It's all still open.

Okay, but they're still ongoing. That's a good thing. Okay, that's all I have. Thank you.

Thank you, Michael.

This concludes our question-and-answer session. I would like to turn the conference back over to Walter Ulloa for any closing remarks.

Thank you, Anita. And thank you everyone for participating in our third quarter investor call and earnings results. We look forward to speaking to all of your in the first quarter of 2018, when we will announce our fourth quarter 2017 earnings results and full year results. Thank you.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.