Entravision Communications Corp (EVC) 2007 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Entravision Communications Corporation third quarter 2007 earnings conference call. During the presentation all participants will be in a listen only mode. Afterward we will conduct a question and answer session. (OPERATOR INSTRUCTIONS). A rebroadcast will be available beginning today at 7 p.m. eastern standard time through November 8th. So access please dial (800)633-8284 or (402)977-9140 and enter reservation number 21349945. As a reminder, this conference is being recorded Thursday November 1st, 2007. I would now like to turn the conference call over to Mr. Walter Ulloa. Please go ahead sir.

Thank you operator. Good afternoon everyone and welcome to Entravision's third quarter earnings conference call. Joining me today on the call is Philip Wilkinson, our president and COO, and John DeLorenzo our Executive Vice President and Chief Financial Officer. Before we begin I must inform you this conference will contain forward-looking statements 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. In addition 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 Communication Corporation is strictly prohibited. Also this call will include certain non-GAAP financial measures. These non-GAAP financial measures have taken into account the pro forma treatment for the company's sale of its radio assets in Tucson and Dallas during the third and fourth quarters of 2006 respectively. Whereby the company has elected to eliminate its broadcasting results from those markets for the prior year period so that year-over-year comparisons will be meaningful. The company has provided a reconciliation to most directly comparable GAAP measures in today's press else. The press release is available on the company's website and was filed with the SEC in a form 8K.

Overall, we continue to execute on our operating and strategic plans and remain well positioned to capitalize on the growth of the Hispanic market. In the quarter we face a number of comparison challenges over a year ago period, which benefited from World Cup and political advertising and our Las Angeles promotional event Reventon which was moved to the second quarter this year. In addition we are confronted with the soft overall advertising environment. Our television and radio stations continue to deliver solid audience share results and our sales teams are working hard to further penetrate existing accounts and expand our total advertising base. We are continuing to prudently investment in the business and our employees remain focused on driving operating efficiencies and controlling costs. Looking at our consolidated results third quarter pro forma revenue to decreased 3% to $74.3 million. Consolidated adjusted EBITDA decreased 4% to $26.9 million and free cash flow increased 25% to $0.15 per share. In the third quarter of last year we benefited from $2.3 million of nonrecurring World Cup and political revenue as well as about $1.3 revenue from our largest yearly radio promotion, Reventon. Earnings per share for the third quarter was a -$0.01 per share, slightly below expectations.

Turning to television segment revenue decreased 2% in the third quarter, in the comparable period last year revenue increased 8% with national up 20%. Results for the quarter were largely impacted by difficult World Cup comparisons. Total World Cup advertising on our television stations for the third quarter 2006 represented about $1.4 million. In addition we had $.847 million of nonrecurring political advertising revenue in the quarter. Overall for the quarter local television revenue was flat while national revenue decreased 4%. Our largest categories for the quarter included automotive, services, telecom, and fast food. Our largest television advertising category, automotive held up fairly well in the third quarter and finished --2% versus third quarter 2006 despite a significant investment by automotive in last year's World Cup. Automotive represented bout 31% of our total television revenue in the third quarter. We are optimistic that our strength in the automotive catagory will continue into the fourth quarter based on October's results which reflect the auto category pacing 15% above prior year.

Our fastest growing category for the TV division in the third quarter was telecom which grew 51% or $1.5 million year to year. Growth in telecom was driven by significant increases from Cricket Communications, Metro PCS, AT&T, Verizon Wireless, Quest, and Cingular wireless. Retail our fifth strongest television advertising catagory grew approximately 11% in the quarter. We did see some softness in a few categories in the the third quarter including services down 9% at a result of a drop off in advertising by the insurance industry. However our largest insurance advertiser, (Inaudible) Insurance, increased their budget by 176% in the quarter so that is clearly a healthy sign that this category will rebound. The finance category also had a drop in the quarter and the grocery category was down due to consolidation in that industry. During the third quarter we signed on 48 new advertising clients who spent over $10,000 each with our television group. The categories for these advertisers included health care, automotive and services.

Turning to our recent ratings performance for July, 2007 our Univision Affiliate Group continues to dominate ratings in respective markets and Telefutura in many of our markets the number two ranked spanish television station. Overall according to July 2007 survey seven of our Univision affiliates were ranked either one or two in prime time adults 18 to 34 regardless of language. One of our Univision affiliates enjoyed triple-digit growth, Orlando up 200%. Three other shining stars were Boston up 67%, McKellan South Texas grew 41%, and San Angelo rose 40% in prime time adults 18 to 34. Looking at local earning news our group ratings were up 18%. Adults 25 to 54 and flat adults 18 to 49 year-over-year. Additionally in 12 of our local news markets our stations were either number one or number two, adults 18-34 regardless of language, which places us in a favorable position as we enter the presidential election cycle. Locally, our Boston Univision affiliate's early local news enjoyed 400% growth over last year. Additionally Corpus Christi early local news was up 79%. McKellan South Texas early local news rose 78%. And Orlando grew its early local news 50% in adults 18 to 34. Our local late news showed similar success as eight of our Univision affiliates were either number one or two regardless of language adults 18 to 34. Our Santa Barbara Univision's late local news enjoyed triple-digit growth up 800% year-over-year and our Orlando late local news ratings grew 67% over a year ago adults 18 to 34.

Taking a look at the Univision National News program our group ratings 9% for both adults 25 to 54 and adults 18 to 49. In mid-July we expanded our newscast on KINC Las Vegas to 7 days a week adding a 6 p.m. and 11:00 p.m. broadcast on Saturdays and Sunday. Our newscast [Notice Quince Semana] is a terrific success story and is currently the number one rated early evening newscast Monday to Friday in the market. Extending the strong brand to the weekend was a logical next step. During the July sweeps KINCE early local weekend news outperformed all other early weekend newscasts 18 to 34 and adults 18 to 49. Our local late weekend newscast was number one among adults 18 to 34 against all other late local newscasts regardless of language.

Telefutura also continue to post impressive ratings gains, and in the majority of our markets they are the second most watched Spanish language television station right behind our Univision affiliate. Year over year our Telefutura Television Group held steady sign on to sign off, our Las Vegas Telefutura affiliate growth up 100% year-over-year in adults 18 to 34. Other shining stars with McKellan South Texas Telefutura affiliate up 50% and [Umale] central up 33%. Our Telefuturas group prime time also steady over last year in adults 18 to 34. The local shining stars during this same time period Tampa up 200% and Telefutura affiliate in McKellan South Texas saw its prime time ratings grow 50%. We expect the ratings success that our Univision and Telefutura affiliates have enjoyed over several quarters to continue in the November survey.

Our radio division had a soft quarter as pro forma revenue decreased 6%. The overall industry is expected to be down low to mid single digits according to the Radio Advertising Bureau. We face difficult comparisons from third quarter 2006 where we benefited from $300,000 in World Cup advertising and Reventon, which generated $1.3 million in revenues. As you recall we moved Reventon from the third quarter this year to the second quarter due to artist availability. If you eliminate these numbers from last year our radio division would have finished the quarter flat. In addition the overall advertising market was soft. National revenue was flat while local advertising which represents 76% of our revenue was down 8%. Mostly as a result of moving Reventon to the second quarter. Despite challenging advertising environment, according to [Miller Kaplan] we continue to outperform the market in Denver, El Paso, Las Vegas, Phoenix and Sacramento. We would have out performed the market in Los Angeles but for having to overcome $1.6 million of nonrecurring revenue from World Cup and Reventon. We experience growth of six out of the top ten categories. The largest increases came from telecommunications up 51%, travel and leisure which saw a 10% increase, and a 19% increase in beverage category. Advertising categories that were down the quarter in our radio division included automotive, retail, and finance.

Auto advertising has been turning down in the second half of the year. Overall down 8% in third quarter with tier one down 37% and tier two down 1%, offset by increase in tier three local automotive dealers of 5%. The tier one decrease in radio division came mainly from domestic automakers such as Chevrolet, GMC, and Ford. However Dodge expenditures were up 29%. These numbers were also impacted by Hyundai deciding not to advertise in th quarter. Despite a continuing softness in tier one domestic radio advertising, the automotive category in our radio group is up 13% as of September 30th.

For the quarter we welcome new 19 new advertisers to Entravision radio who spent more than $10,000 each. First time advertisers included MedVed, Autoplex, 7-Eleven, Pizza Loca, Sacramento Autoplaza, and Rio Grande Regional Hospital. Looking at the released summer book I am pleased to report a 6% share increase for our radio group among adults 18 to 34 over our spring 2007 book. We saw double digit rating growth for our clusters in Denver, El Paso, Salinas, Monterrey and El Paso. In mid-July, KSSE the flag ship radio station for the Los Angeles cluster and Super Estrella network adjusted its musical playlist based on internal research to reflect the core likes of audience. This music adjustment included a small number of English top 40 hits which tested extremely with the core Spanish dominant KSSE listeners. The results were encouraging as KSSE showed some positive gains in the 2007 summer arbitron book in key demos including double digit increases in persons 18 to 34, 18 to 49 and women 18 to 34. Monthly trends show that KSSE September was remarkably stronger than July prior to the music tweak on KSSE and our key demo adults 18 to 34 September versus July we experienced a 19% increase in morning drive, a 37% gain in middays, afternoon drive increased 29% and evening grew 91%. Super Estrella showed even stronger gains with an increase of 30% plus across all day parts reaching women 18 to 34. We had experienced the same gains in other Super Estrella markets in the same demos for the total week for a total combined increase of 37% in Albuquerque, Denver, El Paso, Las Vegas, Phoenix, Salinas and Sacramento.

These rating gains indicate that our Super Estrella stations are delivering the right mix of music for our market places.. (Inaudible) por Manana and [Erasmo] y Chocolate continue to perform well for us. (Inaudible) por Manana saw tremendous growth in both Sacramento up 30% and Denver which increased 44% in average quarter persons in our key demo adults 18 to 34, spring 2007 compared to summer 2007. In addition, (Inaudible) is the number one ranked morning show in adults 18 to 34 regardless of language, in Denver, Stockton, Modesto, Reno and Palm Springs. And number one in spanish in Sacramento and number three overall. in this same demo Erasmo y Chocolate seen a year-over-year increase of 39% combined in Los Angeles, Phoenix, Las Vegas, Sacramento, Monterey and Denver. The move of Erasmo y Chocolate to afternoon will continue to pay off as arbitron's personal people meter becomes the currency in Los Angeles in January.

For the quarter our out door operating division reported revenue increases of 2% driven by a 12% increase in local and a 5% decrease in national. Strong categories for the quarter included services, entertainment, and retail. New clients in the quarter included Apple Computer, Corona Beer, and Dr. Pepper. While we continue to generate respectable double digit gains in local business at outdoor division, nationwide the national business primarily in New York remained soft.

In conclusion although we are operating in a challenging fourth quarter due to nonrecurring political revenue of approximately $2 million and soft local marketplaces, we remain optimistic as we close out 2007 and enter the new year as a result of our television and ratings growth in key markets, our stellar sales team, and the belief that Colorado, New Mexico, Nevada, Florida and Arizona will be battle ground states in the upcoming presidential elections. Further more, the Hispanic market remains vibrant driven by positive demographic and economic trends. We have a diversified base of media properties and our strategically well positioned with our focus on the fastest growing and most densely populated hispanic markets. With that I'll turn call over to John DeLorenzo for financial review.

Thank you Walter and good afternoon everyone. As Walter has discussed pro forma net revenue for the quarter was $74.3 million down 3%. Pro forma operating expenses decreased 1% to $44.2 million and pro forma consolidated adjusted EBITDA decreased 3.7% to $26.9 million. Free cash flow which define as consolidated adjusted EBITDA minus capital expenditures, cash interest, cash taxes plus interest income was $0.15 per share up 25%. Operating expenses for the quarter decreased to $44.2 million a decrease of $1.5 million or 3% Excluding the 2006 operating expenses incurred by our radio stations in the Tucson and Dallas markets that we sold in 2006, operating expenses would have decreased by 1%. The decrease was primarily attributable to expenses related to our large promotional event in Las Angeles, Reventon which we moved from third quarter to the second quarter this year. The decrease was partially offset by increases in salary exspence, increase in utility expense associated with DTV and increases in news expense.

Corporate expense for the quarter decreased $4 million from $4.6 million, a decrease of $.6 million. The decrease was primarily attributable to a decrease in bonuses. Free cash flow was $15.5 million or $0.15 per share in the third quarter of 2007, up from $0.12 per share in the third quarter of 2006. The EPS for third quarter 2007 was -$0.01 per share compared to EPS of flat per share or $0.00 per share in the third quarter of 2006. The negative $0.01 per share was lower than the guidance of $0.02 per share primarily due to the decrease in value of our swap agreements as interest rates have declined, we would have been in line with guidance if we exclude the decrease in value of our swap agreements.

Turning to balance sheet as of September 30, 2007 our total debt was $495 million. Our trailing 12 month EBITDA as adjusted was $97 million. Our net debt to EBITDA as adjusted was four times, and cash on the books was $104 million September 30, 2007. Our board of directors has approved the repurchase of up to $100 million of class A common stock on November 1st 2006. In the the third quarter of 2007 we repurchased 4.8 million shares of class A common stock for approximately $42.4 million. We have repurchased 6.5 million shares of class A common stock for approximately $56 million since the inception of our current stock repurchase plan. This in addition to the 19.7 million shares of class U common stock that we purchased from Univision in 2006.

Turning to our outlook for the fourth quarter 2007 we are once again providing pro forma guidance information. With the sale of the companies radio assets in the Dallas market in the forth quarter of 2006 the company will no longer have broadcasting in that market. As a result in accordance with the company policy the company has elected to present its guidance on a pro forma basis by eliminating net revenue of $444,000 in the market for the prior periods so that the comparisons between the periods will be meaningful. The company expects approximately $.2 million in operating expense and $.4 million in corporate expenses related to stock option compensation in the fourth quarter 2007. For the fourth quarter of 2007, the company expects net revenues to decrease by low single digits to flat and operating expenses to increase by low single digits percentages as compared to the fourth quarter of 2006. It should be noted that the company has difficult revenue comparisons over the fourth quarter of 2006 due to $2.9 million of political revenue that except for a small amount is nonrecurring in the fourth quarter of 2007 and accounts for approximately 4% of our growth. Excluding noncash stock based compensation corporate expenses are expected to be approximately flat as compared to the fourth quarter of 2006. Depreciation and amortization is expected to be between 11.5 and $11.7 million, net interest expense for free cash flow purposes is expected to be between $7.9 and $8.1 million. We expect to have increased noncash interest expense due to the decrease in value of our swap agreements as interest rated have declined. We expect CapEx to be approximately $3 million for the quarter of 2007. We expect $5 million in digital expenses and approximately $11 of maintenance CapEx for a total of $16 million of CapEx in 2007. The digital expenses include the remaining digital conversions, HD upgrades at our radio division and digital board upgrades at outdoor. Fourth quarter earnings per share is expected to be $0.02 per share and free cash flow to be $0.12 per share based on 100 million share outstanding. This concludes our formal remarks. Walter, Philip and I would be happy to take your questions. Operator?

Thank you. (OPERATOR INSTRUCTIONS). Our first question comes from the line of James Dix with Deutsche Bank. Please proceed with your question.

Good afternoon, gentlemen. Couple of questions. First in terms of the health of the business, are you seeing any signs of the impact on the Hispanic consumer in your markets from the downturns and the subprime and the construction industries. Some of those general macro trends. Have you seen any impact in terms of reduced budgets our cancellation that think are attributal to that? I guess related to that, if you can give any color on local versus national pacing that you're seeing for the fourth quarter.

Hi James, this is Philip. How are you?

Quite well.

As far as the financial category for the TV, we were down double digits. Most of that was banks, Wells Fargo and WaMu. And they're advertising their checking accounts and their savings accounts. We did see a softness in the mortgage business. Obviously that whole subprime imploded I think was around August. And we saw some significant cancellations on the local side. But for the most part, on the TV we saw about a $.48 million drop and that was primarily from banks and some of that was creative issues and/or laying off for the quarter and expecting to be back this quarter. Radio was down double digits, again the same thing due to Wells Fargo and WaMu. Although we had softness in the mortgage companies that were advertising primarily locally with us. But it wasn't the impact on the finance that we thought it would be it was mainly the banks, as I said. As far as the business, July we finished minus six due primarily to nonreturning World Cup, as Walter said. That was a tough nut to crack, that comp from last year. August improved to a minus six in July to a minus two but we saw slower domestic auto. And we did see that primarily on the local side. It was mainly tier three which is local car dealers. Our September business we continue to improve with a finish of a plus two. That's straight up. And that's revenue growth for TV. We basically are plus four if you X out the political from prior year. October we're done with October we finished minus six. But that's up against as John mentioned and Walter said as well. We had almost $2 million in political on the TV side. Without political we were plus seven. You can see the trend. July minus six. August minus two. September plus two, x out the big number from October political last year and we're plus seven. We're pacing flat for November. But we had five days, almost a $1 million, $.9 million worth of political last year. And so if you take that political out which is nonreturning real dollars, we're at a plus eight so we moved up a another point in November and our December is pacing at a plus 12. We have seen significant turn around since July, August. And we're also seeing that in and part of that is being helped in many categories, but in the back half of this quarter it's primarily the auto which is totally turned around for us. I don't know if that helps.

Very much so, thanks a lot.

Also James, this is John, if you look at apples to apples with political. General television market for the quarter was down 6.5, we were down just a little bit over 2. So in effect in our television business we have kept pace, we basically beat the general market by 400 basis points. Radio was a little weaker, was also in radio we had to deal with Reventon and some political as well.

John just one follow-up. OpEx was down a little bit, less than I was expecting. Anything in particular there beyond that shifting of that concert that helped control that.

One of the big events on the OpEx is the concert clearly that was $1.1million I think it was. Also in the quarter bonuses were down significantly as a lot of our sales and general management didn't achieve their quarterly bonuses. That was the other big factor and we did save some money on some ratings costs.

Okay. Okay. Thanks very much.

Thank you. Our next question comes from the line of Marci Ryvicker with Wachovia Capital Management. Please proceed with your question.

This is actually Tim Shlock for Marci Ryvicker. Just got a couple of quick questions. First your radio ratings continue to be weak in LA. When do you think your revenue is going to be impacted by these ratings declines? And can you comment on what you're doing to improve the rates? And what do you feel is the reason you're still losing share?

In our opening remarks we talked about the Los Angeles radio cluster and specifically Super Estrella and we're doing some important adjustments to our KSSE Super Estrella format. We've add add some English pop to the mix as well as reggaeton so it's still primarily pop. Call it 80% pop and 15 to 20% -- I should say 80% spanish pop and 15 to 20% english pop and reggaeton. And what we've seen so far in our research very positive. And we believe the trends that we saw from prior to July when we tracked how the station was doing to how it's doing today and through September we see some significant growth in our key demo adults 18 to 34. We experienced a 19% increase in morning drive from July to September. A 37% gain in midday. Afternoon drive increased 29% and evening grew 91% so we believe based upon the research and all the work that we do that we're on the right track and we believe that KSSE Super Estrella will rebound in the coming book.

Okay. And just one more question. On you outdoor business it seems that you're outdoor business has been experiences weakness that is not just temporary. At what point do you get frustrated enough with its performance that you look to monetize it?

We get that question asked on our calls. It's the same answer we have. Which is we continue to review all our assets periodically and we see how they're performing and at the appropriate time we'll make a decision whether we believe we should be in that business.

In addition to that, I don't think we categorize the weakness that we're seeing in outdoor as a permanent weakness. It's very cyclical, its much more cyclical of a business and its basically one factor which is very soft national New York and we hope to see that come back.

Okay. Thank you very much.

Thank you. Our next question comes from the line of David Miller with SMH Capital. Please proceed with your question.

Hey guys, good afternoon. My question focuses on political for '08. Obviously, it's beneficial for you guys in the sense that there is no candidate from California or Texas this year. So you guys obviously benefit on the station platform for the assets that you have in California and Texas. But there's a candidate from Arizona, obviously, Mr. McCain. And Walter I'm curious about what your sense is of the overall tone there for your Arizona platform whether it be TV or radio or what have you. Is there a lot of spending going on or do you sense that theres a lot of sense that theres a lot of spending going on on the grounds that Giuliani thinks they can beat him? Or is it the opposite in the sense that everyone is going to vote for McCain anyway and so most of the other republic candidates are sort of opting out of the advertising platform? I'm curious about your thoughts there thanks.

Okay David. Thank you. We're positive about our prospects in 2008 for -- in the political category for the reasons you just outlined. One, as we all know, primaries have been moved up much earlier in the cycle. We're seeing major primaries in states like California, Florida, and early in the first quarter we've got a primary in Nevada as well in January. So we think we're going to benefit from that political advertising as well as the presidential. As I indicated in my remarks, we expect to see Nevada, New Mexico, Colorado, Arizona, as you pointed out, and Florida as key swing states. And we have as you know a number of assets in each of those states. We profited from these assets in the last election in 2006 and certainly in 2004, the last presidential election. We think that we're going see some significant political advertising in those five markets. We had about $5.3 million of total political advertising in 2004. And we certainly expect to go beyond that in 2008. So again, we're very bullish about our business overall. We think the fact that we have significant media assets in five important swing states is going to bear well for us in next year's elections.

But David specifically on your question about Arizona I think it's too early to tell whats going to happen between McCain and Giuliani as far as dollars, whether advertiser--their campaigns are going to spend advertising dollars to try to beat McCain in his home state.

We haven't seen anything yet on that by the way, David, but again it will be interesting.

Okay. Fair enough. And then John what was the final long term debt balance in the quarter. Did you pay anything down? Or does it still stand where it was last quarter. No we haven't paid any down, we've amortized a very little bit, so I think all in we're about $497.5 million most of it to term loan. Thank you.

Our next question comes from the line of David Joyce with Miller Tabak. Please proceed with your question.

Thank you, a couple of questions. I was just wondering if there any new media update anything you can tangibly point to on you online revenue maybe from TV and radio stations. Anything you've got airing yet on digital TV or HD radio?

Well, just overall David we're currently deriving very little revenue from our internet initiatives however we are currently in the process of developing our company wide internet strategy for television and radio division, we're spending a lot of time on this internally. And we plan to have the majority of our stations running with viable websites by the second quarter of 2008. That said we have some successful -- very successful station websites, a number on markets already including our El Paso Univision affiliate, our San Diego Univision affiliate, the (inaudible) here in LA, Super Estrella in Los Angeles which is our biggest revenue producer for the radio division. That are designed to keep our audiences engaged and informed and as I said earlier we expect to spend more time certainly in company resources on our internet initiative through this quarter and into '08. For HD radio we haven't seen any revenue from that based on the lack of HD receivers.

Separate topic. Are you seeing any change in relative day part ratings versus Telemundo like during the day or in the evening or is it still pretty much than status quo?

We continue to dominate our markets in television. Not only do we have our Univision programming which is so powerful and our local news which we do so well and just is a great lead in to our prime. But also we've got Telefutura in 18 of our markets. Hopefully, by first quarter it will be in 19 of our markets. And as we've said on other occasions in many of our markets our Telefutura affiliate is the number two spanish language station in the market behind our Univision station. We're well positioned here with our television business as well as our radio business.

Okay. And finally, on your stock buybacks was that done in the open market or was that done with the new Univision owners.

It was done on the open market.

Okay. Thank you.

Thank you. Our next question comes from the line of Victor Miller with Bear Stearns. Please proceed with your question.

Good afternoon I didnt catch all of your remarks so I apologize if you've covered these. First of all about 45% of your revenues we think for the TV and radio business come from the California and Florida markets. Could you talk about those two markets in particular. Because there's been so much attention paid to those, especially in the real estate side.

Could you talk a little bit louder? For some reason we have trouble hearing you. Can you repeat the question?

Sure, a great portion of your revenues comes from California and Florida, probably more than most broadcasters. I'm just wondering if you could talk about those markets in particular because those have been in the spotlight with the concerns of the real estate market in particular. Two , could you talk a little bit about the Univision relationship and when you might either act to maybe buy in the shares from Univision or whether they're interested in doing that and secondly when you're going into the cycle re-trans negotiation cycle you think when your going to start gearing up for the

Let me just say I'll start with the last part of the question first, the re-transmission negotiations or discussions. We've talked to Univision informally about this matter. But we have not had any formal discussions or anything definitive about how we're going to proceed. We expect to work with them. We believe as they believe that our programming, Univision and Telefutura programming has significant value. So we look forward to those discussions with the satellite providers and the cable industry. As far as our Univision relationship goes, I think the question was related to the stock that they hold. Again, we've had informal talks with them about the shares that they own and what their plans are. But it's still too early to say anything about those discussions. Because again they're informal and have been rather brief. Perhaps at some other time we'll have more to say about that. Your first question had to do with California and Florida. Whether we're experiencing any particular softness in California or Florida, is that correct?

That's correct.

I'm make a couple of comments on that. I'm sure Philip has more to say about it. We haven't seen specifically, that we can point to specifically regarding California and Florida. We have been cycling through a rather soft advertising environment. We had some significant comps in third quarter with World Cup and political. We've got over $2.5 million of political in the fourth quarter that we're having to -- that we're up against. But you know it's --I don't think there's any one area we can point to and say there's a significant issue related to the economy. I think it's just overall I'll say we believe there's a malaise and we just need to continue to do what we do and focus on our business and the fundamentals and we believe that the economy will rebound and we'll be back to the kind of growth we've enjoyed in the past.

Thank you.

Phil you want to add to that?

No. I think your covered it. Just Florida we're absent the political, we're experiencing pretty strong growth. I just looked this BOB this morning and Tampa is up 47% in local growth in fourth quarter. Those are developing markets for us both Orlando and Tampa. We feel very strong about those They'll continue to grow for a long time. And California, again x the political, which the bulk of the political nationally went to San Diego in fourth quarter last year. Absent that political, local and national for fourth quarter California is holding its own in many categories and doing well locally and nationally. Again x the political.

Is there any market, Phil, that's giving you particular headaches or region of the country?

There are always one or two. And we're having some headaches up in New England. I'm having a little bit of a softness in Boston and Hartford on the local side. For the most part there's no real region we can point to that's softer than the other.

Thank you.

Our next question comes from the line of Eileen Furukawa with Citigroup. Please proceed with your question.

Hi, thanks for taking my questions. You talk about the outdoor business being up in the local side and weak in the national side which is contrary to what we've seen from some of your outdoor peers. I'm just wondering what your seeing there that is different from your peers? And also with your relationship with Univision now have going private have your noticed any dealings with them from when they were a public company? And last is a clarification. Can you tell us of your interest rate expense, how much was related to swap charge and what should we expect from that line item going forward?

I'll finish. This is John. I'll do the last question first. Regarding our swap, I'm going to turn to the page and so I can give you the exact numbers. But as you know we had a significant interest rate cut in the quarter. Therefore, the value of the swap is going to go down. The swap is kept on the books as an asset, adjust it and mark to mark that at the end of every quarter so that being the case. We had a differential of about $10.3 million just in the value of the swap. That doesn't change the benefit we get or the fixed interest rate that we're going to carry through to the end of the term of the loan. But it's on the books and it gets adjusted as interest rates go up and down. Bear in mind that of that $10.3 million you got to apply our tax rate so the net affect is probably 50% of that.

What should we expect your interest expense to look like?

Well I suspect that we'll probably--we gave you in my remarks the best number today which also took into account that there was another decrease of 25 basis points. We don't know the answer of that until the day we get the swap sheets from the three -- we had two swaps in place with until the end of the quarter. It's partially market. It's partiality interest rates. It's really a guess. This surprised us. I don't think we anticipated the 50 point basis cut. We did get a little aggressive on our interest expense projection for the fourth quarter that we gave you because there has been another quarter point decline. I think we're at $8.8 million I think was the interest expense for the fourth quarter.

As to the question about the outdoor business and why you know our national is a little softer than the other, I'll call it outdoor businesses like Lamar, Clear Channel, and CBS. I think one of the reasons is that most of our outdoor assets are in the two largest markets in the country, Los Angeles and New York. Their assets are spread out more across the country in lets say top 20 markets. We've seen a softness in New York and Los Angeles and that impacts our national business more than it would impact their business given the size of the scale of their business. But we've got great assets so we expect the market to rebound in those two markets on a national side. With regards to our relationship with Univision I think the question was now that they're private and we're public or now that their private and owned by different owners, that relationship remains strong. It's a relationship that is important to both of us. We represent about 25% of the broadcast distribution. They depend on us and we depend on them. I think it will always be strong.

Okay. And any reason why -- okay. That's good. Thanks a lot.

Our next question comes from the line of Lee Westerfield BMO Capital. Please proceed with your question.

Thanks gentlemen. Good evening and I do apologize for jumping on later on so if some of this has already been covered we can be very quick. In the radio division, Los Angeles, roughly speaking what percentage of radio revenue is coming out of Los Angeles so that I can better understand the tos and fros here. And outside the LA market how did the morning show syndication for [Peolin] where you had particular strong ratings in the past. How that monetization may have been going. And than secondly on the television side, this is just so refresh my memory, what if any significant events are coming up in 2008 from a sporting standpoint?

The last part of the question Tee, could you repeat it--

TV sports events in 2008, that come to mind are the Olympics. But what else comes to mind?

Okay as it relates to, I think there was three parts to your question. The second part was [Peolin] and whether we're monetizing those rating in the markets where we air Peolin. And the answer is yes. We continue our revenue and our ratings in those markets, Denver being a terrific example of how well we're doing with Peolin. I think in this last book it was the number one morning show in the market in any language. And I can see by looking at the numbers how we've been able to convert those ratings to revenue and that goes for all the markets where we have Peolin in. I think practically everyone of them are up significantly over last year as a result of Peolin. There was the first, part of your question had to do with ----

You asked how much of our radio revenues are generated from Los Angeles. About the high 30s, bear in mind that's both the English and Spanish formats in the marketplace.

If we take the Spanish and break that out it's about 25%. And then Phil, you have a comment on the television sports? Next year's sports events?

Obviously no World Cup. We've got the start of some--got MLS, we've got League of Mexicana which is very popular. Live boxing and a of course a whole slew of entertainment specials, which we're coming up on one next week, which is Latin Grammies, which Univision has the exclusive broadcast. We'll have that next year as well. We do very well revenue wise. And the Premios in May are just block busters for us. But no new big sporting events.

You could consider the election a sporting event.

Could be.

Many do. Okay. That's helpful. That clears up the questions. Thank you.

(OPERATOR INSTRUCTIONS).

Operator?

Yes, one moment. There are no further questions at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.

Thank you operator. This concludes our third quarter conference call. We look forward to speaking with you in the first quarter of 2008 when we report our fourth quarter and full year 2007 results. Thank you very much for participating.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.