Entravision Communications Corp (EVC) 2009 Q2 法說會逐字稿

Welcome to the Entravision Communications Corporation second quarter 2009 earnings conference call. As a reminder, all participants will be in a listen-only mode.There will be an opportunity for you to ask questions at the end of today's presentation. (Operator Instructions). For your information this conference is being recorded. Now I would like to turn the conference over to Mr. Walter Ulloa, Chairman and Chief Executive Officer. Mr. Ulloa.

Thank you, B.J. Welcome to Entravision second quarter 2009 earnings conference call. Joining me today is Philip Wilkinson our 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 the actual results.

In addition, this call is the property of Entravision Communication 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 in Form 8-K.

In addition to the announced sale of the Company's Outdoor Division at March 31, 2008, Outdoor was classified as a discontinued operation and the result of operations are separately reported for all periods presented. We continue to operate in a very challenging environment and our results reflect the soft local and national advertising markets that are impacting virtually all media businesses. Despite the macro challenges we are aggressively managing our costs, capitalizing on nontraditional revenue opportunities and focusing on driving audience share. Our cost initiatives are on track to generate approximately $20 million in savings in 2009 and we continue to review our operations for additional efficiencies. Our assets remain well positioned in key Hispanic markets and we are committed to ensuring our stations have the proper support to deliver quality content and drive audience shares. The successful execution of these initiatives will ensure we are maximizing our cash flows and will place us in a solid position when the economy improves.

Turning to our financial results for the quarter, our consolidated second quarter revenue fell 23% versus the same period in 2008 to 48.7 million. Consolidated adjusted EBITDA decreased 27% to 16.3 million versus last year while free cash flow per share decreased 45%. The second quarter of 2008 benefited from $231,000 of political revenue versus only 32,000 of political revenue in this year's second quarter.

Turning to our television division, excluding retransmission fees revenue decreased 26% in the second quarter versus the prior year period. Local and national revenue fell 22% and 30% respectively. The decrease was primarily the result of continued softness in the automotive and fast food restaurant categories. Auto was off 67% in second quarter '09, with weaknesses among all major brands and automotive tiers. Tier 1 decline 57%, Tier 2 spending was down 77%, and Tier 3 investments were off 62%. However, July 2009, auto sales figures have confirmed that pent-up demand exists among US consumers and is providing local dealerships with a new sense of confidence which has us cautiously optimistic that the worst of our auto declines are indeed behind us. At the same time, we are seeing encouraging signs from our fast food category that includes new activity from Burger King and What-A-Burger, which bodes well for the category in the third quarter. The growth of our services and healthcare categories continued in the second quarter. The services category was driven by strong performance from its auto insurance and legal subcategories while healthcare providers and related services continue to see strong results in their investment in Spanish language media.

Our sales teams continue to focus efforts on their the fast growing advertising categories and we were successful in adding 66 new advertisers who invested $10,000 or more in the second quarter with our television group. We generated 2.9 million in retransmission revenues in the second quarter which reflects the recent execution of multiyear regional transmission agreements with cable and satellite providers. These agreements represent new incremental revenue and are structured to deliver significant revenue increases in the early years of the contract.

Turning to our are recent radio's performance our Univision Affiliates continued their solid performance and ability to grow their audience share. This is a significant accomplishment when traditional media outlets are seeing their audience erode and speak to the power of the Univision brand and the resilience of the Hispanic market. In fact, the July Nielson survey which ended last week was a huge success for our nine meter markets where Entravision Univision Affiliates experienced continued audience growth. Our stations in the meter markets are up 14% year-to-year in households; and in our local people meter markets we are up 20% in adults 18 to 34, a 25% in adults 18 to 49 and 50% in adults 25 to 54. With results like we received in our metered markets we are looking forward to July results for all our television markets which will be published later this month. Our Prime Time block is up 8% over the prior year in household in July in our meter markets, and in our local people meter markets we are up 56% among adult 18 to 34, 38% up in adults 18 to 49 and 50% in adult 25 to 54. In our local people meter markets our early news cast experience a combined 40% increase in adults 18to 34, 30% in adults 18 to 49 and up 29% in adults 25 to 54 over July 2008. Our late, local newscast also increase year-to-year up 33% in adults 18 to 34 in July.

With excitement building over the 2010 World Cup we aired games of the Gold Cup also known as [Copa de Oro] in July. International soccer tournament played every two years. The ratings were our best ever for the Gold Cup up 55% of the previous tournament. The tournament had its largest gains in San Diego which averaged 3.1 house hold rating on our station KBNT, up 82% over the 2007 tournament. Albuquerque, KLUZ, it is household rating watt at 2.2 up 69% over the past tournament and Las Vegas, which achieved a 3.7 household rating in the Gold Cup tournament. The ratings for the final rematch of the 2007 game between Mexico and the US was up 400% over the time period average in Entravision meter markets led by San Diego's 4.9 rating up 880% over the time period and Las Vegas with a 4.7 rating up 370%. Boston, Hartford and Washington, DC, all had increases over the time period of 500% or more. This was the most successful year for the Gold Cup on our air. And the ratings performance of our television stations in this year's [Copa de Oro] certainly bodes well for the 2010 World Cup which we anticipate will drive revenue and audience in the coming year. By June 12 all of our Univision and Telefutura had completed the conversion to digital transmission. Data provided by Nielson shows audience levels at our television stations as largely unaffected as a result of the conversion to digital. In fact, in our meter markets most of our Univision Affiliates have reached or exceeded the weekly June figures for the period immediately prior to the final conversion date.

Turning to radio, our radio division revenue decreased 29% in the second quarter. National revenue was off 28% while local revenue declined 30%. On a monthly basis revenue strengthened as the quarter progressed. We saw 31% decrease in revenue in both April and May, but June showed some improvement with the month finishing down 26%. We saw growth in only one of our top ten categories with growth increasing by 2%. However, we experienced a decrease in spending in each of our top five categories compared to second quarter 2008. These categories in order of spending are Travel and Leisure down 19%, Services down 46%, Retail down 10%, Automotive down 61%, and Fast Food down 8%. Within the automotive category Tier 1 was down 100%, Tier 2 down 89% and Tier 3 was down 36%. We saw an increase in spending in 6 of our top 10 advertisers in the quarter compared to second quarter of 2008.

Largest increase came from Levi Strauss who was a new advertiser for this year. They spent over $260,000 with us in the quarter with their sponsorship of [Revertone]. We also saw increased spending from AT&T up 19%, Burger King up 4%, Tecate up 258%, JCPenny up 11% and Taco Bell up 134%. Our radio stations continue a solid ratings performance in the second quarter for the 10 markets released to date for the Spring Arbitron Survey. In our key demo of adults 18 to 34 we saw an increase of 15% year-over-year and in the 12-plus demo we saw an increase of 28%. We generated ratings growth in a number of markets. In Los Angeles our new format El Gato contemporary hit Mexican regional station continues to increase adults 18 to 34 audience, share up 188% over the same period last year to 2.3 share from a 0.8 share when it was Indy 103.1. El Gato continues to increase over the initial quarter up 15% this quarter. Since the format switch our cue audience among adults 18 to 34 is up 167% from the same period last year. The switch to El Gato helped take the total average quarter hour share of the Entravision radio cluster in Los Angeles up 37% year-to-year from a 4.3 to a 5.9 share. [Reventone] Super Estrella once again exceeded all of our expectations and was our most successful event since it began in 1998. More than 13,000 fans enjoyed their favorite artists from Super Estrella at Staple Center for a 6 hour concert that featured top latin musical artists, such as (inaudible - highly accented). and three other artist. These sponsors included Southwest Airlines, Bud Light, Levy's, McDonald's, Arco, Target and [ViArta] Super Markets. We specially proud of the success of our radio division with this year's [Reventone] given the challenges we faced throughout the year.

A launch of the Jose format during the first quarter resulted in an increase in audience share in almost every market that has been released to date compared to the same period last year in adults 18 to 34. Phoenix increased 225%, Modesto is up 91%, Denver rose 73%, Sacramento experienced a 55% increase and Palm Springs is up 8%. Our Los Angeles Jose station grew to a 1.9 share from a 1.1 share, this represents a 73% increase year-over-year.

Interactive is an iatrical part of our long-term growth strategy. We continue leveraging the mass reach of our broadcast television and radio assets to drive traffic to our online and mobile interactive properties. I'm pleased to announce our interactive growth for the second quarter despite the overall challenging environment our Interactive revenue increasing 30% in the second quarter, traffic grew 12%. We now are experiencing monthly more than 1.2 million visits and 11 million page views. During the second quarter we streamed more than three million hours of online radio programming. This makes us one of the largest online radio streaming operations targeting US Latinos.

In the first quarter we launched mobile marketing capabilities for our television and radio stations. We are now actively engaging with our mobile audience and connecting them with advertisers. At the end of second quarter we had executed more than 30 on air mobile integrated campaigns. We continue to see increased interest from our advertisers and strong response from our audience with our mobile platform. We also finalized in the second quarter the development of our online automotive marketplace. [Car] We are piloting this interactive program in two key markets El Paso and Orlando. This is initially a local solution that provides new advertising opportunities to our local auto dealers targeting US Latinos. We do believe the ultimate potential scope of this project is complete national coverage even beyond our television and radio terrestrial footprint.

In the second quarter we started the development of our classified ad strategy, based on the category success and general markets for sites like Craigslist. com and others, we believe we have an opportunity to increase traffic page views and revenue with our own local and national sites for the Latino classified category. And in the second quarter we launched a digital news initiative to review our resources and on air work flow in order to transform our traditional newsroom into local multimedia digital content centers that produced content for the three screens, the 360 experience. In conclusion the Hispanic market continues to expand and we are uniquely positioned to deliver this valuable audience to advertisers. We are committed to operate our business as efficiently as possible without sacrificing the quality of the service we provide our audiences. We are taking the right steps to strength the position of our assets and we are aggressively pursuing new business and building our nontraditional revenue streams. With our strong market share and position in the most dynamic Hispanic markets we remain optimistic about long-term prospects.

At this time I want to turn the call over to Chris Young for review of our financials.

Thank you, Walter. Good afternoon, everyone. The Company sold the Outdoor Advertising business in May of 2008 to Lamar Advertising for 101.5 million including an adjustment for working capital and no longer has outdoor operations. In accordance with FAS144, Accounting for the Impairment or Disposal of Long Lived Assets, the Company reported the results of the Outdoor operations in discontinued operations within the consolidated statements of operations. As the Outdoor unit has been included in discontinued Ops the following results do not include the Outdoor segment. As Walts discussed , net revenue for the quarter was 48.7 million down 23%. Operating expenses decreased 7.3 million to 29.6 million and consolidated adjusted EBITDA decreased 27% to 16.3 million. Free cash flow which we define as consolidated adjusted EBITDA minus capital expenditures, cash interest, cash taxes plus interest income was 5.2 million or $0.06 per share. Operating expenses for the quarter decreased to 29.6 million from 36.9 million a decrease of 7.3 million or 20%. Excluding non-cash compensation expense operating expenses for the quarter decreased to 29.3 million from 36.5 million, a decrease of 7.2 million or 20%. The decrease was primarily attributable to a decrease in expenses associated with the decrease in net revenue along with the various cost control measures we implemented earlier this year. Corporate expenses for the quarter decreased to 3.4 million from 4.5 million, a decrease of 1.1 million or 25%. Excluding non-cash compensation expense, corporate expenses for the quarter decreased to 3 million from 4.0 million, a decrease of 1.0 million or 25%. The decrease was again primarily attributable to the various cost control measures we implemented earlier this year. Cash interest expense for the quarter was 9.2 million. Cash capital expenditures for the quarter was 1.3 million. CapEx for the year will be between 5.0 and 6.0 million. EPS for the second quarter of 2009 applicable to common shareholders was negative $0.02 a share compared to an EPS applicable to common shareholders of $0.12 per share in the second quarter of 2008.

Turning to our balance sheet as of June 30, 2009, our total debt was 365.5 million and our trailing EBITDA as adjusted was 58.1 million. Our total debt to EBITDA as adjusted was 6.29 times versus a maximum leverage covenant as defined in our recently amended credit agreement of 6.7 5 times at 6/30, 2009. Cash on the books as of June 30, 2009, was 18.8 million. The company also announced it repurchased from Univision Communications Inc. approximately 900,000 shares of Entravision class A common stock for approximately 500,000 in the second quarter of 2009. As of August 1, 2009, the total shares outstanding for Entravision was [83.624.234] million across all classes of shares. This concludes our formal remarks. Walter, Phillip and I would be happy to take your questions.

(Operator Instructions). Our first question comes from James Dix from Wedbush.

Good afternoon, gentleman. Just a couple questions. Maybe I'll break them up a little bit and maybe come around for a second round I guess. Walter, I think you talked about pacing by month for radio. I'm not sure I heard them by month for TV. If you have those that might be interesting. And then any outlook for pacings in the third quarter what's the outlook for TV and radio at this point? I guess second, it looked like radio did not accelerate maybe quite as much as expected in the second quarter. Kind of the declines decreased by around the same amount as the TV group. Is there anything going on there in terms of revenue catalysts. I guess I'll stop there. I'll let you take that and then I had a couple of followups.

Okay, James, this is Philip. How are you doing?

Good. How are you?

Pacings -- actually I think you said pacings but you may have meant we have fared through the individual month in second quarter for TV because we not going to go too far out here in terms of projections but April we were down approximately 32% for the TV combined local and national. That improved in May down 28 and we actually improved that 10 points in June to a minus 18 on the TV side and that's where we finished blended minus 26. July is in the -- I guess it is finished but it was minus 20 and small change. August pace. It is too hard to tell in August. We just started laying in a lot of local business so it is not -- I don't think it is going to be an accurate number. But we, overall, I can say that we -- things are improving. We are still -- it is still tough out there but it is not as bleak as it was two months ago, that's for sure.

Is that similar for radio? I know you gave the monthlies for the second quarter but how is radio looking going forward?

June was improved, improved actually about 5 points over the April, May finish. And July is slightly improved. But similar analysis in terms of where we think things are improving and we feel better than we did certainly a couple months ago and across most all categories. We had travel an leisure improving by June and in July we improved in services. Improved in retail. Telecom has been a tough one for us. Health care has been holding. And auto I think Walter gave you the specifics on the tiers and where we finished but I think we can honestly say that we feel we have bottomed out in second quarter on auto which is a big part of our business.

Right.

And we have seen as a result of I think just the bottoming as well as. "Cash for Clunkers" program we have seen a rise in this past July certainly in the enthusiasm and the traffic that our car dealers have experienced.

Have you gotten in material dollars on the air related to that program in terms of dealers promoting it or educating the public?

I would say that we have and we have been particularly active with this program. We were working on this program a month and a half ago and trying to educate all of our GMs and sales managers as best we could about the program. Certainly as we got closer to the program the information was better and there was some confusion the first week as you know but that seems to be clearing up and we think we are -- we expect the energy in traffic that we saw in July to certainly continue into August.

Okay. And just following up on the radio side. Did that improve the way you thought it would be in the second quarter and is the outlook for improving kind of similar for radio and TV as you look forward?

I would say it is. As Philip pointed out we felt like we hit the bottom second quarter and it does feel like third quarter is moving in a better direction. It is still too early for us to make any predictions about the second half but it feels like -- it feels better certainly than the first half.

I just wanted to step forward to 2010 for a second. Do you have any way of quantifying or giving some color on some of the catalysts that you think you're going to see next year that might be a little bit less dependent on how robust the recovery is. I'm talking specifically about World Cup which you mentioned but I guess you also will have increases in retransmission revenue and then political, obviously, should be better next year than this year. Any color you can give on those and any other things that you think are important?

We do -- part of what we look at is certainly 2006 World Cup numbers as well as 2006 political. We have already started to study those. We have tried to identify where the races are going to be in our market. Certainly Texas is going to be a big political market for us with Senator Hutchinson running for government. So we expect it to be very active in our markets. World Cup. What we do will is we look at all of our different categories and advertisers that we saw in 2006. Obviously automotive is in a different place in 2010 and will be we anticipate. So we are forecasting continuing weakness in that category but not to the degree that we have seen in 2009 but not as robust, perhaps, as we saw in 2006. And then in retrans as I said earlier, we certainly look forward to that revenue stream growing in 2010 and it does ramp up in the early years of our contracts.

And I just had one other follow-up. Chris, it looks like expenses are down around 20% year over year. Are they tracking to be down that much for the full year or are you going to be lapping a little bit of the expense cuts that you did last year and maybe full year expenses maybe down more like in the mid-teens? Just trying to get some color as to where you are in terms of your expense base.

Yes, James, they were down 20% for Q2. We are not in the business of giving guidance any more, but I think with respect to the second half of the year the expenses will still be in place and they will still be in place as well for Q1 of next year if you recall that we mutt out towards the ends of Q1 this year that will continue to play through and have an impact on Op-ex. I can't tell you whether that will be the run rate or not.

All right. Thanks very much.

Our next question comes from John Kornreich from Sandler Capital.

I have a lot of questions. Let's just start on news. What is the -- in the 18 to 49 category, or 18 to 34, whatever you consider the key, early 6:00 p.m. type news an late news, what's been -- what's the overall% increase year-over-year?

This is Walter, John. In early local news in our local people meter markets which is what all we have to look at right now for July, we saw a combined increase of 40% in adults 18 to 34, 33% adults and 29% in adults 25 to 54 over.

This is just news year-over-year?

Year, that's early local news. In our late local news we saw an increase of 33% adults 18 to 34 in July -- in our local people meter markets.

In which age group?

18 to 34.

And you have 18 to 49.

We were flat 18 to 49?

What was that?

Flat.

I can't hear you.

I said we were flat.

I thought you said a lot.

No.

In retran you did a million 9 in the first quarter, 2.9 in the second. When do you hit your stride? Is it fourth quarter or sometime next year?

Well, I'll just comment op it briefly then Chris may have something to add to that. We are not going to disclose the information on retrans other than what we saw in the quarter. I will tell you that in the second quarter we did see some catchup from the first quarter because contracts were signed late in the second but they were retro to January 1. So the second quarter includes mostly second quarter retransmission revenue with some catch up from the first quarter. Chris, do you want to add to that?

Yes, there was -- there were catch up payments, John, in the second quarter. So that was a bit elevated over the first quarter. There are a lot of moving parts to the retransmission calculations. So I think the only safe way that the plate is weighted out until you have four quarters under your belt and there is your number.

But when I see what the fourth quarter is, whatever it is, will that be pretty much what the run rate will be for two, three years?

That's a still tough one to call, just because there are a lot of moving parts to the agreement that we have.

In radio your overall margin the first half is roughly 30%. Is it fair to say that the margin in Los Angeles is much lower than that? Is there a margin in LA?

Yes, there is a margin in LA, we are looking at the numbers right now but based on the information we have, the margin in Los Angeles is right about the number that you described.

Oh, it is?

Yes.

Wow. You mean the 30% not a lot lower?

No, 30%.

Okay. That's very surprising much that's great. By what percentage is your head count down from a year ago?

Up 12%.

Okay.

12% of roughly 200 people.

In terms of cash, interest, I assume that the big bumps from first to second quarter from 6 million to 9 million, whatever it was, 5.5 to 9 million was the new agreement and that therefore 9 a quarter is where you should stay?

That's right, John. The amendment that we did in the first quarter was effective on March 16 so you really only had a couple weeks at the increased rate in the first quarter. The bump would be in large part the incremental rate.

When does that agreement end and your interest will go back down again?

The term loan or the swaps we had to fix the debt?

Both.

The swaps unwinds in October of next year.

Okay.

And the term loan matures in June of 2013.

So we are going to stay around 9 million roughly a quarter into late next year?

That's correct.

Okay.

And at the current levels.

When you said the debt was 365 is that net of the 9 million cash.

No, that is gross. It is for the new amended facility.

All of your debt is bank debt, is that correct?

363.5 million of it is bank debt then we have about $2 million in old financing notes.

Do you remember correctly that virtually all of that 363 is due all at once at the end of 2013?

That's right. It is a balloon amortization.

And very, very little before that?

There is no -- the only mandatory debt pay downs that are in the amended facility are the excess cash show suite that were put in the place with the amendments. 75% of essentially free cash flow needs to be towards bank payment.

Last question and an important one. It looks to me -- I know Univision hasn't announced their second quarter but I did look at their first quarter that in terms of ad dollars, you are doing several points worse than they are. Intuitively why do you think that is?

Well, I think the initial response would be that they have networks and the networks -- the network business has fared better in this environment certainly than the local television business.

Right.

So that would be -- that would certainly be the --

That would be the answer.

The answer, correct.

Okay. Thanks for your patience.

Our next question comes from Bishop Gene from Wells Fargo.

Hi, thanks for taking the question. Let me pick up on something that John said and go to your balance sheet. You're right up there on your covenant client leverage at roughly 6.3 times against the 6.75 times covenant. When does that covenant step down?

The covenant steps down, Bishop, in the first quarter of the next year to 6.5 times. It remains at 6.75 through the year end.

So it goes 6.5 times at March 31, 2010?

That's right. And it stays in place through the second quarter and then steps down again in the third quarter of 2010 to 6.25.

Okay. All right. But Walter, Philip, you guys have seen the good, the bad and the ugly. You know that you can play the clock all you can but the comfort level is when you get air and cushion between your covenant and your leverage. So given that the green chutes may not be as green as we would like them an directionally your negative growth is half of what it was in Q1, are you in discussions, formal or otherwise, with your secured debt holders already? Do you plan to -- how do you plan to get some cushion back in here?

Bishop, we are not in discussions with our bank group, but as of right now we have for the engaged in any discussions on that front.

And you correct me if I'm wrong. This is the tightest I have ever seen your leverage against a covenant with piece in it. You're not alone. Everybody else in the free world seems to be in the same condition. So that's why I'm so focused on this. It would seem you would want to not just let the clock take care of it.

Well, it is something Bishop, that we look at every day. We talk about this every day. We are looking at our numbers every day. We are seeing what our forecast EBITDA for the quarter versus what we need to do to be under the covenant. We We We are doing everything we can to avoid any issues with the covenants. Right now -- we knew that we were going to see some tightness in the second, third and fourth quarters of '09. The economy certainly has dictated that. But given where we are today and given what we are seeing in this quarter, third quarter, we think that we are -- we have got enough room but if that were to change certainly we would communicate with our lenders. We have a very strong relationship with them. They have confidence in us. We have always been very transparent in terms of our business and our prospects. So we would be the first ones to call them up an say let's sit down but we don't believe that that is necessary at this time.

That does sound simple. Okay, last question in this. The $20 million cost savings program that you put into effect, where are we on that in terms of how much have you already captured, how much more is left yet to go?

Well, we did this past quarter did about 5.8 million in cost cuts that were kind of play out into the P&L. The variable cuts, if you want to break down the 7.3 million in the expense cost reductions, you would have about 2.1 million of that would be variable, the fixed cuts were about 5.8 million of that 7.3 and then offsetting that are some contractual ratings agencies and some incremental interactive expense to the tune of 600 grand to offset that and that's what gets you to the 7.3. But as far as the fixed costs were concerned about 5.8 of that 20 in Q1 is about 2.5 million. So 3 and 4 you've got roughly little under 6 million to go for the balance -- 6 million per quarter the balance of the 20 million.

Right. So let me just summarize because in numbers. 5.8 captured in Q2, 2.3 captured in Q1.

About 2.5 million.

About 2.5 million captured in Q1. So we are sitting there -- I'm just rounding. About 8.3 million here. Or a little less than half of the overall 20 but I may not be counting some of the other variable costs that have already been captured as well?

Keep in mind that the variability factor. I talked about variable expense being down about 2.1. In some of that it is not just commission expense but it is also bonuses that are linked to hitting goals that aren't going to be hit.

So if you achieve all 20 by year end it should -- it certainly should have covenant then?

We think so. It all helps.

Thank you, gentlemen.

(Operator Instructions). Our next comes from Alex [Searnelli] from SM Investors..

Thank you for taking my question. Going back through the retransmission. I saw in mid-june a press release from Univision where they were saying that they believe that their revenues might double up within the next three to five years. Univision acts like your agent so I was wondering if your contracts, your stepouts as well have that -- that kind of a game for the next three to five years?

Alex, this is Chris. There is an increase we have stated that before but I can't give you any guidance with respect to the level of increase over time. There is a ramp up.

I had to try. Thank you so much. (OPerator Instructions). We have a followup from John Kornreich from Sandler Capital.

Are you had in any early talks to divest any TV stations sha.

No, we are not.

And radio?

No.

I would assume likewise you are no longer thinking about buying anything from Univision?

No. No. We do talk to Univision regularly. I mean if there were a swap out there that made some sense between us and any other broadcaster we would look at it but it would have to be something that was creative and certainly worth the trouble of going through that process.

John, keep in mind as per our credit facility we are not allowed to do acquisitions as long as we have certainly leverage limits.

But you were allowed to buy back stock?

We had a carve out in the amendment for a chunk of Univision stock but we are not allowed to buyback stock.

Okay. Thanks.

Ladies and gentlemen, that concludes the question and answer session for today. We will now turn the floor back over to our presenters for any closing remarks.

Thank you, B.J., and thank you everyone for participating in our second quarter Investor conference call. We look forward to speaking it all of you in November when we will announce our third quarter results.

We would like to thank you for participating in the Entravision Communications Corporation conference call. This concludes today's event.