Entravision Communications Corp (EVC) 2012 Q1 法說會逐字稿

Welcome to the Entravision Communications Corporation first quarter 2012 earnings conference call. As a reminder, all participants will be in 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. I would like to turn the conference over to Walter Ulloa, Chairman and Chief Executive Officer. Mr. Ulloa, please begin.

Thank you, Andrew. Good afternoon, everyone, and welcome to Entravision's first quarter 2012 earnings conference call. Joining me today is Philip Wilkinson, 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 certainties that could impact actual results.

This call is the property of Entravision Communications Corporation. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Entravision Communications Corporation is strictly prohibited. Also, this call will include certain non-GAAP financial measures. The Company has provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's press release. The press release is available on the Company's website and was filed with the SEC in a Form 8-K.

During the first quarter, we continued to execute our strategic plan and generated improved year-over-year results. Our core advertising revenues grew 4% during the quarter despite the challenges presented by the mixed economic environment and the ongoing stabilization of the US advertising market. Our core radio and television stations remain strongly positioned with the most densely populated US Hispanic markets, and we continue to successfully expand our online and digital capabilities in reach. Turning to our financial results for the quarter, our consolidated revenue was $46.5 million, up 6% versus the same period in 2011.

Excluding incremental political revenue from last year, first quarter revenue remained at 6%-plus as we generated a very small amount of political revenue in the quarter. Operating expenses increased 3% to $31 million in the quarter. Consolidated EBITDA grew 12% to $11.6 million versus last year, and free cash flow was $1.4 million. In our television division, total revenue was up 8% in the quarter. Excluding retransmission fees, our television revenues rose 6% during the first quarter. Local revenue grew 12%, and national revenue was up 1%.

Our ad category performance during the first quarter was led by automotive which finished up 36%. We continued to experience strong momentum in automotive as the first quarter represented our eighth consecutive quarter of double-digit growth for television dating back to the second quarter, 2010. The largest auto advertisers during the quarter were Chrysler Group, Ford, Toyota, Honda, and General Motors. Our current second quarter 2012 automotive pacing continues to reflect strong signs of growth led by the import auto brands of Toyota, Honda, Nissan, and Mazda. We continue to experience growth across all auto segment tiers.

Tier one corporate was up 25%,and now accounts for 18% of our auto category revenues. Tier two, dealer associations, was up 48% and now represents 52% of the auto category. And, tier three, local dealers, was up 25% and now represents 30% of our television auto category revenue. Overall, the television division experienced growth in 6 of our top 10 categories in first quarter including services, automotive, retail, health care, travel and leisure, and product brand names.

Softness during the quarter was led by telecom, which was down 42%, as declines came from all major category players including AT&T, Verizon, Cricket, Metro PCS, and Sprint. Telecom category finished the first quarter 2012 as our seventh ranked advertising category in the television division. While we do not anticipate a significant improvement in the category in the remaining quarters of 2012, we do expect the revenue declines from this category to shrink because of lower comparables in quarters two, three, and four.

We also experienced declines in fast food, finance, and grocery convenient stores during the quarter. Political revenue for our television business was less than $50,000 in the first quarter. We successfully added 52 new advertisers who invested $10,000 or more in the first quarter. New clients for our television division included the Culinary Workers Union, Allstate Insurance, Colorado Health Foundation, Tri-County Health Department, and the Centers for Medicare and Medicaid.

Turning to our ratings performance, our Univision affiliates extended their ratings leadership positions in the February 2012 sweeps, among all adults, 18 to 34 regardless of language. Here is the summary of our February performance. Seven of our Univision television stations ranked number one or two, sign on to sign off. Additionally, seven of our Univision affiliates are either number one or two among all adults, 18 to 49. Nine of our TeleFutura television stations are the number two ranked Spanish language television station in their markets in adults, 18 to 34, and adults, 18 to 49 regardless of language.

Nine of our Univision television affiliates are number one or two in the early local news, and in early network news, 10 of our Univision television stations are ranked either one or two, again, regardless of language. In late local news, nine of our Univision television stations are ranked either one or two, again.

In Entravision markets combined, our Univision TeleFutura television affiliates aired 43 of the top 50 Spanish language programs among adults, 18 to 34, 18 to 49, and 25 to 54. The top two Spanish language programs in Entravision markets were the annual blockbuster awards show, Premio Lo Nuestro, and a soccer match between the Mexican national team and Colombia's national team. At our radio division, revenues were flat in the first quarter when you compare our results to the same period in 2011. Local increased five points over Q1 2011 while national was down 12%. Local was up 5% in January, 9% in February, and March saw a 2% increase. National continues to recover more slowly than local.

We have added one additional seller to our national sales rep from LER during the quarter, and we are in the process of adding two additional sellers in the second quarter to help generate more national sales. Political revenue in the first quarter for radio was only $57,000. Political spending was below our expectation in the quarter, but we are still confident that the spending in this category will accelerate as we have already placed more political advertising in the second quarter than we did in the second quarter of 2008, a comparable presidential election year.

We recorded revenue growth in the first quarter in four of our top categories in our radio business. During the quarter, the automotive category, which was our second largest category in the quarter, finished up 32%. When we break out the auto category, we see an increase of 60% in tier one. Tier two was up 47%, and tier three grew 20%. The tier one growth comes mainly from Ford Motor Company, which spent $177,000 with us compared to $66,000 in the Q1 of 2011. This was a 70% increase. Tier two growth was driven by a 78% increase from Southern California Toyota dealers.

In addition to automotive, our other top categories by spending during the first quarter were services, our top category for the quarter, increased 12%. Travel and leisure increased 3%. Retail was up 37%, and fast food restaurants experienced a decrease of 20% created by mostly a decrease in Taco Bell and McDonalds. Even with McDonalds' reduced spending, they were the top advertiser in the radio division in the quarter.

Telecommunications continues to negatively effect our revenue as in previous quarters with Verizon decreasing 23% and AT&T reducing their spending by 65%. This was offset partially by increases from T-Mobile and Cricket Communications. In the first quarter, we added 42 new radio advertisers who spent more than $10,000 which in total represented $747,000 in revenue for the quarter. New advertisers included Rapido Express, Center of Disease Control, Azteca America, Casa Ford, Federal Secretaria de Salud, and Universal Nissan.

In the first quarter of 2012, our Los Angeles radio cluster generated a 5% increase in total revenue. Entravision's Los Angeles radio cluster continues to perform much better than our peers. According to revenue data from Miller Kaplan, the Spanish language radio segment's total revenue for the first quarter increased 4% while the entire market saw a decrease of 4% in the quarter.

Our Los Angeles revenue growth continues to be propelled by our local revenue from our three Spanish language formats in the number one radio market in the nation. Our cluster increased local revenue by 13% for the quarter by focusing on local direct business. In addition, we are continuing to focus on intensive, cold call strategies and training of our account executives to take advantage of exciting new commissions -- incentives to help grow new business. These initiatives seem to be working as we've seen a steady improvement in billing for our Los Angeles cluster locally.

National sales are trailing local sales. As a result, we have implemented strategies within LER to further target differences in our radio cluster formats, and we are aggressively delivering integrated marketing solutions in idea-driven opportunities to national advertisers. For the winter 2012 radio ratings, ten of our markets are surveyed by Arbitron, and our stations continue to be ranked among the leaders in adults, 18 to 34, against all competitors regardless of language. In the full week, Monday through Sunday, 6 AM to 12 midnight, eight of our radio stations are in the top ten most listened to radio stations in their markets. In morning drive, El Vacilon del Mandril, our Tricolor stations, and El Show de El Genio on our Jose-formatted radio stations are in the top ten in eight markets. Our cornerstone afternoon drive program, Erazno y La Chocolata is in the top ten in five of our markets.

Turning to our interactive or digital division, our interactive initiatives are becoming an increasingly important component of our sales platform and growth strategy. The investment we have made in our digital capabilities allows us to offer compelling, multi-platform advertising opportunities that leverage the strength and reach of our core radio and television assets across key new channels such as online social media and mobile.

These integrated advertising opportunities allow clients to reach and engage our audience across multiple touch points, supporting client retention while also attracting new clients who are eager to implement integrated marketing campaigns. We continue to make progress with our interactive and digital initiatives which currently account for almost 2% of our total revenue. Our interactive revenues have grown for 15 straight quarters including a significant growth of 28% during the first quarter over the same period last year.

The launch of our new television and video platform allows us to -- televisions sites and video platform allowed us to greatly increase the amount of video content we publish online. In the first quarter, we published 8,500 local news stories. This is 400% more over the same period last year. Consequentially, we have seen our interactive audience increase video consumption by 350%. These video stores appear on our television and radio websites and across our mobile platform. By increasing the amount of our digital content, we have been able to steadily grow our online audience. For this first quarter, consolidated visits across our entire digital network increased 40% over the same period last year.

We continue to explore with innovative products like Busca, our local, Latino digital marketplace. Since we launched this product, we have secured more than 800 new advertisers and generated more than $1 million in revenue. We are working on the addition of paid search components to make Busca an even more compelling product for our local advertisers. One major area of focus for Entravision is social media. We continue to build a strong following for our media -- for our television and radio properties websites via Twitter and Facebook. We finished the first quarter with excess of 300,000 followers on our social media channels which represent a growth of over 110% when compared to the same period last year.

Our mobile platform growth is accelerating. We are now running mobile campaigns and managing Hispanic mobile communities for a number of advertisers including Bud Light, Chevrolet, McDonalds, AEG, Nissan, Metro PCS, [Herparas] and many others. This first quarter, we sent more than 1 million text messages to our audience, and our mobile revenue increased 140% over the same period last year. The first quarter was another record for our mobile initiatives. All in all, we continue to make great progress with our digital platform and our focus on furthering this business during 2012 as we launch new initiatives in the areas of display advertising and paid search.

We are delivering a steadily growing and engaged audience across key digital platforms including online social media and mobile. We continue to utilize this multi-platform audience to deliver new, unique, and robust advertising opportunities to our partners in making our traditional broadcasting business more compelling, complete, and integrated. As we look at the 2012 second quarter, we continue to see positive trends across our core radio and television assets.

As I pointed out earlier, we saw very little political revenue in the first quarter, mostly as a result of Texas moving their primary to the second quarter. That said, our political revenue in the second quarter is turning much higher than planned as a result of the Obama for America campaign which has already started in the key battleground states of Colorado, Nevada, and Florida where Entravision operates significant media clusters serving the Latino communities in those states. In conclusion, our radio and television stations remain extremely well positioned across the nation's key Hispanic markets and stand to benefit from the rapidly growing Latino population.

The strong competitive position of our core assets is supported by our growing digital presence as we continue to drive increased online and mobile engagement and grow our target audience. Our digital investments have served to greatly strengthen our advertising sales capabilities which are providing us with new avenues for growth. As we move through 2012, we will continue to execute our strategic plan with the goal of driving improved performance from our business.

Finally, as all of you know, Philip Wilkinson, our President and COO, will be stepping down from this position at the end of this month. Philip will remain as an important consultant and advisor to the Company as a co-founder, Entravision Board member, and one of our largest shareholders. He is currently working on a number projects for Entravision and will continue doing so in the future. We thank you, Philip, for all you have done and will do for Entravision. I will now turn the call over to Chris Young for a review of our financials.

Thank you, Walter, and good afternoon, everyone. As Walter has discussed, net revenue for the quarter was $46.5 million, up 6%. Operating expenses increased 3% to $31 million, and consolidated adjusted EBITDA increased 12% to $11.6 million. Net revenue for the quarter was up 6% to $46.5 million compared to $44 million in the same quarter of last year. Television net revenue was up 8% to $33.2 million for the quarter compared to $30.7 million in the same quarter of last year. Radio net revenue was flat at $13.4 million for the quarter.

The increase in our television segment was primarily attributable to an increase in local advertising and an increase in retransmission consent revenue. Excluding retransmission consent revenue and political revenue, core TV advertising revenue was up 6% for the quarter. Retrans revenue for the quarter was $5 million compared to $4.2 million in the same quarter of last year. Retransmission consent revenue for the year 2012 will be approximately $20 million.

Operating expenses for the quarter were 31.0 million, up 3%. Excluding non-cash compensation expense, operating expenses for the quarter were $30.9 million, up 3%. The increase was primarily attributable to variable expenses relating to the increase in net revenue. Corporate expenses for the quarter were up 4% to $3.9 million compared to $3.7 million in the same quarter of last year. The increase was primarily attributable to the increase in interactive media-related expenses and salary expense.

Free cash flow, which we define as, consolidated adjusted EBITDA less CapEx less cash interest and cash taxes and dividend payments plus interest income for the quarter, was $1.4 million, or $0.02 per share. Cash interest expense for the quarter was $8.5 million. Cash CapEx for the quarter was $1.2 million. Turning to our balance sheet, as of March 31, 2012, our total debt was $383.8 million and our trailing, 12-month consolidated adjusted EBITDA was $56.7 million. Our total debt to EBITDA as adjusted was 6.8 times. Cash on the books was $51.2 million at March 31, 2012. Net of this cash on the books, total net leverage was 5.9 times.

In February 2012, we entered into an amendment to our 2010 revolving credit facility agreement. Effective March 31, 2012, the financial covenants shall not be applicable unless any loans are outstanding on the relevant date. There are no outstanding balances on this facility at this time. The amendment changed certain thresholds for financial covenants relating to total leverage, fixed charge coverage, and cash interest coverage ratio.

On April 27, 2012, we gave notice of our intention to redeem $20 million of 8.75% notes outstanding on May 30, 2012. The redemption price for the redeemed notes will be at 103% of principal amount plus all accrued and unpaid interest. Following this redemption, approximately $363.8 million in principle amount of the notes will remain outstanding. We will fund the redemption with cash on hand. This concludes our formal remarks. Walter, Philip, and I would be happy to take your questions at this time.

(Operator Instructions) The first question comes from James Dix of Wedbush. Please go ahead.

Good afternoon, everybody. Just a couple of things, any more color you can give on what your core pacings look like for TV and radio in the second quarter? Apart from the -- what you talked about for political? And then, I had two follow-ups relating to TV.

Hi, James. What we do with respect to forward-looking comments, we talk about the month that is closed and the revenue that's on the books. For this case, that's April. So, for television on a core basis, we're pacing plus mid-single digits for TV. We're pacing a negative mid-single digits for radio for the same month. Political moves the needle probably about one percentage point either way. I think to add to that though, that April -- since we've closed the books in April, we started to see late in April a pick up in business. We're hopeful that that's a low point that we're building off of once the quarter is done.

James, this is Walter. Particularly in radio, as Chris pointed out -- in April, TV was up mid-single digits and continues strong into May. Radio, on the other hand, was soft and lagging, but in the last couple weeks of April, particularly the last week, we saw momentum building in April in radio. And, we've seen significant -- we've made significant gains in pace over the last couple of weeks in that business.

In radio. Okay. Great. That's very helpful. And then, I guess, on TV. Philip, I want to make sure I get one last shot at you while you're still not a consultant. When you look at your TV revenue in your markets, which markets have recovered from the recession and gotten close to or past their pre-recession peaks? And, which have recovered least? And, do you think you have any insight as to what accounts for those differences?

Well, thanks, James. I appreciate you taking the opportunity. I think we mentioned last go-around when we finished Q4 and we had our announcement that the mountain states had really picked up. We were very pleased to see the Denvers, the Vegas, the Colorado Springs, the Albuquerques that we operate had turned the corner. We had tough time over the last couple of years in the mountain states [prove]. The East Coast continues to do fairly well. Texas is stable. We have seen -- had difficulty in southern California although Palm Springs just finished -- I saw the Miller Kaplan there. We finished almost 28% up over the prior year first quarter, and the market finished 8.7%. So, I would say at a 4X, 3X beating the industry at least television with -- that's a positive sign for southern California. Little bit of struggle still for San Diego. The El Pasos of the world, 2X the market. We finished up 15.7%, and the market was up 7.7% all TV. On a margin side, we're seeing growth in 10, 11, of the top 15 TV markets. Again, Vegas, Denver, El Paso, Albuquerque. So, I think we've turned the corner. The economy is definitely improving -- baby steps. It seems to be widespread across the country. We still would like to see a little bit better growth there in southern California.

Great, one last one. Just on political. Do you think you're going to see much impact from Super PAC money coming in and that money not being subject to the same lowest unit rate rules? Or, are you not really looking for much of your mix in political spending to be from Super PACs, and that it will be fairly traditional mix versus what you've seen in prior election years? Thanks.

It's Walter. Quick comment on that question. I'm sure Philip has some information to follow up with, but we started out with -- as I said earlier in my remarks -- with a very soft political start. We compare this political cycle with 2008. That's how we look at it so when we see how we did in the first quarter with political, it's much less than first quarter 2008. And, that's why we're so pleased with the strength that we showed in our other categories in the quarter. But, in the second quarter, which we thought would be the softest quarter of the year in political, we're actually seeing some strength. I talked about Obama for America -- that campaign. That's on the air, and it's in four of our markets and doing very well. We expect that to continue.

As far as the Super PAC commitment to our market, we expect to see some of that. We did $8 million in total political revenue in 2008, and we said before the year started, we thought we'd do close to $10 million. Now with a slow start, we've got a lot of ground to make up, but we like what we're seeing right now. We think that the majority of our political revenue will come in the second half of the year. What we've seen certainly throughout the country with the entry of political PACs -- or Super PACs -- into the advertising mix with no limits basically. We think a lot of that will certainly be invested in the Latino markets or Latino states or states like Colorado, Nevada, New Mexico, and Florida where there are large Latino populations.

I agree. I think, really, James, though, as Walter mentioned, we are going to see a lot more activity in the August, September, October, in general. You typically do in Spanish language television and media -- the general versus the primary. So, we expect heavy spending, which will include PACs, in August, September, and October, and that one week in November.

Great. Thanks very much.

Next question comes from Michael Kupinksi of Noble Financial. Please go ahead.

Thanks for taking the questions, I appreciate it. Am I correct that the Obama campaign is largely targeting radio right now rather than television? Or is it across both TV and radio platforms at this point?

We've seen it across TV and radio.

Okay.

And their commitment to both medias is pretty strong.

Okay. And, you indicated that the political is coming in a little bit better than what you were budgeting for in the second quarter.

In the second quarter, right.

Right, in the second quarter.

In the first quarter, we underdelivered in that category.

Right. And so, am I -- if I were to assume, like $1 million in television political, you think that that's on target? Or, you think that might be a little light?

For Q1?

For Q2.

I'm sorry, Q2.

That may be a little bit on the high side, Michael.

And then, in radio, maybe $225,000 or so?

What's that?

In radio, maybe $225,000 or so?

It's possible.

Okay.

That's possible.

And, if we looked at the auto category, you're growing faster than the English language peers. I know that you provided a breakout between the tiers, but what is auto as a percent of total television at this point? And a percent of total radio at this time?

I think auto was about 22% of the quarter --.

It's 22% of our total revenue, and radio automotive represents 14% of our total revenue. Overall, just under -- call it 20% rounded of our total revenue. One fifth of our total revenue.

And so, auto is a category for television for you, at least. You still have some room to grow. Especially if your English language peers are in the 25%-plus range at this time, right?

Right. We were always -- we got the second wave of the recovery dollars with respect to auto, and English language folks shot up to 25% back in 2010. We've been grinding it, slowly but surely, back up towards that level, and we think that 25% level is achievable.

What was the high for you going back a ways -- what would be the high?

I think back in 2006, we were close to 25%, 26% total revenue.

25%, 26% of total revenue.

And, if we go back to the telecom category, I know that that was a weak category for you last year. Can you give me some thoughts on the telecom category. Are you seeing any traction there? What's happening on that particular category?

I think the good news is that the comps start getting easier beginning next quarter. Second quarter of last year, I think we were hit with a 51% or 52% decline in telecom last year. So, that's the good news. The hope is that -- and we also had signs -- folks like AT&T starting to come back into radio in Q2. That's a good sign. The hope is that in the second half of the year you start to see this thing flatten out. It's tough to say that this is going to be a growth category for us again this coming year, and the hope is that that growth will return back in 2013.

The feeling is that the softness in telecom for us at least will continue through the rest of the year, and we expect to turn the corner in 2013.

Fair enough. Finally, your thoughts on the $20 million bond redemption versus a $40 million bond redemption. What are the criteria that you would like to see before committing to another redemption at this point?

Well, we take a look at where we are, how much cash we have, and how we feel about our performance to date, and we'll call it like we see it as we roll through. We've got the ability to do another $20 million before the end of July. We'll watch that as we continue down the road here and keep our options open on that front. Of course we have another window that opens up for another $40 million beginning August 1. We'll keep that in mind as we go. There's no real set of quantifiable criteria that we check off the boxes before we make a decision. It's something that we play through day by day.

I just was curious whether or not you felt that you wanted to see some better visibility on the economy or revenue traction or anything like that in terms of before you make a commitment to repurchasing -- redeeming more bonds at this point?

I think that's a fair statement, Mike. We do want to see more visibility -- a little more clarity here as we head into the second half of the year.

But at this point, the prospects are still there for you to do another redemption this year. That's still on the table.

It's possible, yes.

And, I think doing the first $20 million -- making that announcement was a vote of confidence of what we're seeing thus far. It's a glass half empty or half full, however you want to see it. We think it's a positive step.

Okay. Fair enough. Thank you very much.

Thanks, Mike.

The next question comes from Anil Gupta of Imperial Capital. Please go ahead.

Hey, thanks for taking the question. Just one quick one, building on the last one about the cash balance and where you see a prudent use of that money. Can you talk a little bit about the M&A outlook and what you're seeing in the market in terms of either stations you've looked at before that are either on the market or valuations you're seeing out there. Can you just give us an idea as to what you're seeing and what you're outlook is in terms of any acquisition opportunities that you're seeing right now?

I think the market is starting to become a little more active with regards to acquisitions. We get calls all the time, and we look at different things here and there. There's nothing that we're spending any time on [days]. We certainly look for ways to strengthen our existing clusters. So, if we could do, for example, some type of a joint sales agreement with an existing broadcaster and given our strong position in many of our markets, that would be -- that certainly is something that we find would be accretive. Use our existing infrastructure in one of our important markets, and then perhaps do a joint sales agreement with someone, either TV or radio. As far as going out and doing any acquisitions at this time, we have nothing to talk about.

Okay. Thanks. The second question is, I think earlier today there was an announcement between Disney and Univision about an English-speaking news network focused at Hispanic audiences. Any sort of commentary you can provide around what does that mean for Entravision? Do you foresee any increased competition or pricing pressure in the market? Or do you think this is more validity that this is a big market that the media world is focused on?

Well, we don't think this announcement has any impact on us. We believe that we've always been big believers in the notion that it's never been about the language when it comes to our business, it's always about the culture. And the language of culture is Spanish, and that's how we deliver the best entertainment, news and information to our audience. It's an interesting announcement, and we wish them all the luck.

(Operator Instructions) The next question comes from Bishop Cheen of Wells Fargo. Please go ahead.

Hi, everyone. Thank you for taking the question. Thank you for the update. Just a couple of housekeeping things because I had some connectivity problems, I guess you would say. Pacings -- I think you said for radio you're starting to finally see some acceleration in late April, but before you saw that where were you? Were you down? Were you flat?

Well, we said we were down in April.

April, we finished out negative mid-single digits.

Okay.

But we started to see in late April acceleration of that business. We don't think that's going to be indicative of where we'll end up.

Down negative mid-single digits, right?

What was slowing us down with our radio business is national. Our local was strong through the first quarter and was okay in April, but the national was soft. Now, what's happened over the last couple weeks -- two, three weeks -- we've seen a huge change in our radio business. National is firming up and building strength every week.

Right, we heard that from Cumulus yesterday on their call that the signs that national is rebounding and awakening just in the last 2 weeks. Now, TV you were up mid-single digits, correct? Pacing up?

That's right. For April.

For April. And is that all in with everything political -- whatever you got?

It's still mid-single digits core or with political. Just for April. The politicals being -- it's going to be back-end of the quarter heavy as far as the pace is concerned. It really has needle-moving event as far as April was concerned for TV.

Okay. All right. And, your Q is going to be filed when?

Two days.

Okay.

Most likely tomorrow.

All right. Just kind of stepping back 1,000 feet, when I look at free cash flow. You're sort of all over the map. For example, in 2009, it was 15% of EBITDA, but in 2010 -- political year -- was 32% of EBITDA. 2011, because you had a lot of extra costs that you were looking to do, it was like 5% of EBITDA. So, I'm trying to get a feel if this is a better year. You're going to reduce your debt, and you're going to reduce your cost of capital. Any thoughts about free cash flow, either as a percentage of EBITDA or a hard number?

Yes, I definitely think that 2012 should be a significantly better year than 2011. Remember in '11, we also did the dividend which gets factored into the free cash flow.

Right.

You should see considerable -- based on that alone, you should see considerable difference as you move ahead. It's tough not to give you a number, but give you color beyond that. It should be significantly improved.

I could do bigger than a bread box because -- you're right. If I back out the dividend for '11, it gets closer to a teenage -- kind of 15% of EBITDA number in 2011.

Right.

Is it closer to 15% or closer to 30%?

If you just look at -- if you just look at that '11 number adjusting for the dividend number, I think the consensus out there has that number doubling. That's beyond the realm of possibility.

Okay. All right. So, that gets you into the 20%-something probably.

Right.

Fair enough. Political. I know this is all heavily back-end. It's going to be six weeks on either -- in Q3 and Q4. But, for Q1, political grossed -- I think that's gross number -- just about $1 million? $0.5 million on TV, $0.5 million on radio?

No. Our political total was $100,000. About $100,000, between TV and radio.

Okay. Sorry. I misunderstood. All right. And again, [bogeys] and we don't know, but it was something like $8 million in 2008?

Correct.

$8.1 million in 2008.

Right. Could you remind us again in what it was in 2010?

2010 it was $7.1 million.

Okay. And this is kind of a mood ring question, how does it feel to you this year?

It feels, like we said earlier, part of the reason that we underdelivered political in the first quarter was due to the fact that we have a lot of media assets in Texas, and the primary in Texas was moved to the second quarter. So that was the most impactful event in the quarter with regards to political. But now that that primary has been moved to second quarter, and so there's still -- the results of that to come to fruition. And then on top of that we're seeing Obama for America advertising in four battleground states. As we talk to people across the country, New Mexico for example, number of raises in New Mexico. We expect to see political dollars there. Florida, for example, another important state. California is going to have some propositions that will generate a lot of activity. So, we still remain pretty bullish about our political potential for the year.

Plus, I think the primary season on the Republican side dragged on a little longer than we were thinking it would. As we talked about before, the money doesn't start flowing our way on the political spend until we flip into general election mode. That took its own time to get through, and I think that was somewhat of a disappointment.

All right. This is all good. All right. Last one for me. Talk that color -- telecom, I think we said something like it was down 42% in 2011, one of your worst categories.

That's correct.

In Q1, did you quantify how much it was up?

It was down.

Oh, it continues to be down.

Right. Right, it was down -- it was down 42%.

In Q1.

In television. In radio, it was down in the 30%s, I believe.

Down 20%.

20% in radio.

We've got one more quarter --.

Are you seeing any turnaround there?

The only turnaround we're seeing that Chris pointed to is the lower comps which will come in the second, third, and fourth quarter. No, we don't see it bouncing back in any significant way in 2012.

But it's still your seventh largest category.

Right. But, that's pretty -- and in radio was number seven.

Okay.

Television -- I can look at it quickly here, but it wasn't much better than that.

Okay. I think that's --.

Television was seven also.

Yes. I think that's pretty much the end of my grand inquisition. Thank you.

The next question comes from Aaron Watts of Deutsche Bank.

Hi. Just one from me. I'm curious because you're in a unique position where you've got a view on both radio, a little bit of digital, and TV. I'm curious as you talk to your advertisers on the local level when they're making decisions on where to spend their ad budgets if you're seeing any pull back or shifting from radio to digital? From TV to digital? Just curious about the movements there? And then if you have any insight on the national level on some of the shifts going on, if any, I'd be curious to hear your thoughts there, too.

I think if there's any softness with regard to the radio story, it's on the national front. Local actually feels pretty good for us. We were up 5% for the quarter. Things continue to look good for second quarter on the local front. They are starting to firm up a bit for national. The real struggle has been the national ebb and flow of the process. It hurt us in Q1. National was down 12% against that plus 5% local. And we'll see where we end up for Q2. Really locally, things -- it's in part, going hand and hand with how the economies -- the local economies at the local level are doing, and locally things feel good.

And, on the national side, you don't think it's any big shifting around of ad budgets, it's more just a lull -- temporary lull.

I think that's the right way to put it. It feels more like a lull than some kind of a secular seismic event that is bantered about from time to time.

If anything, we're seeing more of an integration of digital with our broadcast media, and therefore the solutions that we offer -- integrated solutions -- if anything, the digital is helping propel the broadcasting expenditure.

That's a good point. Okay. Great. Thanks for the color.

Thanks.

At this time, I would like to turn the conference back over to Management for any closing remarks.

Thank you, Andrew. This concludes our first quarter 2012 earnings call. We look forward to speaking to all of you again in August when we will announce our second quarter results. Thank you.

Thank you for participating in the Entravision Communications Corporation conference call. This concludes today's event. You may now disconnect.