Hemisphere Media (HMTV) 10-Q 9 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 07, 2017
Entity Registrant Name	HEMISPHERE MEDIA GROUP, INC.
Entity Central Index Key	1,567,345
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Common Class A
Entity Common Stock, Shares Outstanding		21,806,711
Common Class B
Entity Common Stock, Shares Outstanding		20,800,998

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash	$ 155,520	$ 163,090
Accounts receivable, net of allowance for doubtful accounts of $1,737 and $1,711, respectively	22,925	25,566
Due from related parties	1,683	1,505
Programming rights	7,848	5,450
Prepaids and other current assets	11,197	7,904
Total current assets	199,173	203,515
Programming rights	11,213	10,450
Property and equipment, net	24,816	25,501
Broadcast license	41,356	41,356
Goodwill	164,887	164,887
Other intangibles, net	58,209	64,849
Deferred taxes	19,075	18,638
Equity method Investments	14,350
Other assets	600	1,245
Total Assets	533,679	530,441
Current Liabilities
Accounts payable	2,923	3,525
Due to related parties	786	413
Accrued agency commissions	3,090	6,725
Accrued compensation and benefits	4,111	4,488
Accrued marketing	5,792	6,378
Taxes payable	56	1,619
Other accrued expenses	3,206	3,610
Programming rights payable	4,465	3,293
Current portion of long-term debt	2,133
Total current liabilities	26,562	30,051
Programming rights payable	896	107
Long-term debt, net of current portion	206,285	210,270
Deferred taxes	18,266	17,829
Derivative Liability	340
Defined benefit pension obligation	2,573	2,844
Total Liabilities	254,922	261,101
Stockholders' Equity
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2017 and December 31, 2016
Additional paid-in capital	263,177	261,051
Treasury stock, at cost 3,631,770 and 3,606,696 at June 30, 2017 and December 31, 2016, respectively	(35,364)	(35,069)
Retained earnings	51,763	43,837
Accumulated comprehensive loss	(823)	(483)
Total Stockholders' Equity	278,757	269,340
Total Liabilities and Stockholders' Equity	533,679	530,441
Common Class A
Stockholders' Equity
Common stock	2	2
Common Class B
Stockholders' Equity
Common stock	$ 2	$ 2

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accounts receivable, allowance for doubtful accounts	$ 1,737	$ 1,711
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	3,631,770	3,606,696
Common Class A
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	25,140,546	24,944,913
Common Class B
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	33,000,000	33,000,000
Common stock, shares issued	20,800,998	20,800,998
Common stock, shares outstanding	20,800,998	20,800,998

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Consolidated Statements of Operations
Net revenues	$ 35,180	$ 35,031	$ 68,339	$ 66,002
Operating Expenses:
Cost of revenues	10,298	10,638	20,543	20,821
Selling, general and administrative	9,843	9,520	19,335	18,776
Depreciation and amortization	4,067	4,061	8,182	8,417
Other expenses	474	119	2,724	132
Loss on disposition of assets	2	16	2	15
Total operating expenses	24,684	24,354	50,786	48,161
Operating income	10,496	10,677	17,553	17,841
Other :
Interest expense, net	(2,598)	(2,869)	(5,226)	(5,825)
Income (Loss) from Equity Method Investments			(100)
Other income, net	121		121
Total other expenses, net	(2,477)	(2,869)	(5,105)	(5,825)
Income before income taxes	8,019	7,808	12,448	12,016
Income tax expense	(2,838)	(2,779)	(4,522)	(4,287)
Net income	$ 5,181	$ 5,029	$ 7,926	$ 7,729
Earnings per share:
Basic (in dollars per share)	$ 0.13	$ 0.12	$ 0.20	$ 0.18
Diluted (in dollars per share)	$ 0.13	$ 0.12	$ 0.19	$ 0.18
Weighted average shares outstanding:
Basic (in shares)	40,633	42,546	40,574	42,844
Diluted (in shares)	40,808	42,807	40,784	43,638

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Consolidated Statement of Comprehensive Income
Net income	$ 5,181	$ 5,029	$ 7,926	$ 7,729
Net change in fair value of cash flow hedge	(340)		(340)
Other comprehensive loss				8
Comprehensive income	$ 4,841	$ 5,029	$ 7,586	$ 7,721

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) shares in Thousands, $ in Thousands	Common StockCommon Class A	Common StockCommon Class B	Additional Paid-In Capital	Treasury StockCommon Class A	Retained Earnings	Accumulated Other Comprehensive Loss	Total
Balance at the beginning of the period at Dec. 31, 2016	$ 2	$ 2	$ 261,051	$ (35,069)	$ 43,837	$ (483)	$ 269,340
Balance at the beginning of the period (in shares) at Dec. 31, 2016	24,944	20,801
Consolidated Statements of Changes in Stockholders' Equity
Net income					7,926		7,926
Purchase of common stock				(295)			(295)
Purchase of common stock (in shares)	196
Stock-based compensation			2,122				2,122
Exercise of warrants			4				4
Exercise of warrants (in shares)	0
Other comprehensive loss						(340)	(340)
Balance at the end of the period at Jun. 30, 2017	$ 2	$ 2	$ 263,177	$ (35,364)	$ 51,763	$ (823)	$ 278,757
Balance at the end of the period (in shares) at Jun. 30, 2017	25,140	20,801

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net income	$ 7,926	$ 7,729
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,182	8,417
Program amortization	6,799	5,990
Amortization of deferred financing costs	156	250
Amortization of original issue discount	173	189
Stock-based compensation	2,122	1,989
Provision for bad debts	31	321
Loss on disposition of assets	2	15
Deferred tax expense		341
Excess tax benefits		212
Other income	(121)
Decrease (increase) in:
Accounts receivable	2,610	101
Programming rights	(9,960)	(9,436)
Due from related parties	(178)	285
Prepaids and other assets	(2,648)	(2,116)
(Decrease) increase in:
Accounts payable	(602)	15
Due to related parties	373	(634)
Accrued expenses	(5,002)	(4,773)
Programming rights payable	1,961	1,622
Taxes payable	(1,563)	(573)
Other liabilities	(271)	100
Excess tax benefits		212
Net cash provided by operating activities	9,990	10,044
Cash Flows From Investing Activities:
Funding of equity investments	(14,229)
Proceeds from sale of assets		2
Capital expenditures	(859)	(1,914)
Net cash used in investing activities	(15,088)	(1,912)
Cash Flows From Financing Activities:
Repayments of long-term debt	(1,067)	(8,278)
Financing fees	(1,114)
Purchase of common stock	(295)	(31,817)
Warrant repurchase		(976)
Warrant exercise	4	420
Exercise of stock options		155
Net cash used in financing activities	(2,472)	(40,496)
Net (decrease) in cash	(7,570)	(32,364)
Cash:
Beginning	163,090	179,532
Ending	155,520	147,168
Cash payments for:
Interest	4,926	5,488
Income taxes	$ 8,265	$ 3,493

Nature of business

Nature of business	6 Months Ended
	Jun. 30, 2017
Nature of business
Nature of business	Note 1. Nature of business Nature of business: The accompanying unaudited condensed consolidated financial statements include the accounts of Hemisphere Media Group, Inc. (“Hemisphere” or the “Company”), the parent holding company of Cine Latino, Inc. (“Cinelatino”), WAPA Holdings, LLC (formerly known as InterMedia Español Holdings, LLC) (“WAPA Holdings”), and HMTV Cable, Inc., the parent company of the entities for the acquired networks consisting of Pasiones, TV Dominicana, and Centroamerica TV (see below). Hemisphere was incorporated in Delaware on January 16, 2013 and consummated its initial public offering on April 4, 2013. In these notes, the terms “Company,” “we,” “us” or “our” mean Hemisphere and all subsidiaries included in our consolidated financial statements. We also consider for consolidation entities in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. We have no consolidating variable interests as of June 30, 2017. Refer to Note 4, “Equity method investments,” of Notes to unaudited condensed consolidated financial statements, included in this Quarterly Report on Form 10-Q for further information. Basis of presentation: The accompanying unaudited condensed consolidated financial statements for Hemisphere and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Our financial condition as of, and operating results, for the three and six months ended June 30, 2017 are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. Net earnings per common share: Basic earnings per share (“EPS”) are computed by dividing income attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive. The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS ( amounts in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator for earnings per common share calculation: Net income $ $ $ $ Denominator for earnings per common share calculation: Weighted-average common shares, basic Effect of dilutive securities Stock options, restricted stock and warrants Weighted-average common shares, diluted EPS Basic $ $ $ $ Diluted $ $ $ $ We apply the treasury stock method to measure the dilutive effect of our outstanding stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income per common share calculation. Potentially dilutive securities representing 2.0 million shares of common stock for the three and six months ended June 30, 2017, were excluded from the computation of diluted income per common share for this period because their effect would have been anti-dilutive. The net income per share amounts are the same for our Class A common stock, par value $0.0001 per share (“Class A common stock”) and Class B common stock, par value $0.0001 per share (“Class B common stock”), because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Use of estimates: In preparing these financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheet dates, and the reported revenues and expenses for the three and six months ended June 30, 2017 and 2016. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates. Recent accounting pronouncements: In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2017-09 — Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting . The amendments in this Update affect any entity that changes the terms or conditions of a share-based payment award and provides guidance on which changes to terms or conditions of an award require an entity to apply modification accounting. The amendments in this ASU are effective for all entities for annual periods, and all interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. Our consolidated financial statements would only be impacted if we were to make changes to share-based payment awards. In March 2016, the FASB issued ASU 2016-09 - Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, such as requiring all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and allowing a policy election to account for forfeitures as they occur. In addition, all related cash flows resulting from share-based payments will be reported as operating activities on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016. The new standard impacts our financial statements by increasing or decreasing our income tax provision and increasing cash flow from operating activities. In May 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers , a comprehensive revenue recognition model that supersedes the current revenue recognition requirements and most industry-specific guidance. Subsequent accounting standard updates have also been issued which amend and/or clarify the application of ASU 2014-09. The guidance provides a five-step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The guidance will be effective for the first interim period of our 2018 fiscal year and allows adoption either under a full retrospective or a modified retrospective approach. The Company has identified retransmission/subscriber fees and advertising sales as significant and is currently in the process of analyzing each of these revenue streams in accordance with the new guidance to determine the impact on the consolidated financial statements. When the Company has completed its evaluation, it will determine the method of transition that will be used in adopting the new standard.

Related party transactions

Related party transactions	6 Months Ended
	Jun. 30, 2017
Related party transactions
Related party transactions	Note 2. Related party transactions The Company has various agreements with MVS, a Mexican media and television conglomerate, which has directors and stockholders in common with the Company as follows: · An agreement through August 1, 2017, pursuant to which MVS provides Cinelatino with satellite and support services including origination, uplinking and satellite delivery of two feeds of Cinelatino’s channel (for U.S. and Latin America), master control and monitoring, dubbing, subtitling and close captioning, and other support services (the “Satellite and Support Services Agreement”). This agreement was amended on May 20, 2015, to expand the services MVS provides to Cinelatino to include commercial insertion and editing services to support advertising sales on Cinelatino’s U.S. feed. Expenses incurred under this agreement are included in cost of revenues in the accompanying unaudited condensed consolidated statements of operations. Total expenses incurred were $0.6 million for each of the three months ended June 30, 2017 and 2016, and $1.3 million for each of the six months ended June 30, 2017 and 2016. · A ten-year master license agreement through July 2017, which grants MVS the non-exclusive right (except with respect to pre-existing distribution arrangements between MVS and third party distributors in effect at the time of the consummation of our initial public offering) to duplicate, distribute and exhibit Cinelatino’s service via cable, satellite or by any other means in Latin America and in Mexico to the extent that Mexico distribution is not owned by MVS. In February 2016, MVS terminated the agreement. We continued to operate under the terms of the agreement through December 31, 2016. As of January 1, 2017, we assumed the management of all the rights for Latin American third party distributors, and MVS retained the non-exclusive right in Mexico. Pursuant to the agreement, Cinelatino receives revenue net of MVS’s distribution fee, which is presently equal to 13.5% of all license fees collected by MVS from third party distributors. Total revenues recognized were $0.6 million and $0.9 million for each of the three months ended June 30, 2017 and 2016, respectively, and $1.1 million and $2.3 million for the six months ended June 30, 2017 and 2016, respectively. · An affiliation agreement through August 1, 2017, for the distribution and exhibition of Cinelatino’s programming service through Dish Mexico (d/b/a Comercializadora de Frecuencias Satelitales, S. de R.L. de C.V.), an MVS affiliate that transmits television programming services throughout Mexico. Total revenues recognized were $0.6 million for each of the three months ended June 30, 2017 and 2016, and $1.1 million for each of the six months ended June 30, 2017 and 2016. Amounts due from MVS pursuant to the agreements noted above amounted to $1.7 million and $1.5 million at June 30, 2017 and December 31, 2016, respectively, and are remitted monthly. Amounts due to MVS pursuant to the agreements noted above amounted to $0.8 million and $0.4 million at June 30, 2017 and December 31, 2016, respectively, and are remitted monthly. We renewed the three-year consulting agreement effective April 9, 2016 with James M. McNamara, a member of the Company’s board of directors, to provide the development, production and maintenance of programming, affiliate relations, identification and negotiation of carriage opportunities, and the development, identification and negotiation of new business initiatives including sponsorship, new channels, direct-to-consumer programs and other interactive initiatives. Total expenses incurred under these agreements are included in selling, general and administrative expenses and amounted to $0.1 million for each of the three months ended June 30, 2017 and 2016, and $0.2 million and $0.1 million for the six months ended June 30, 2017 and 2016, respectively. No amounts were due to this related party at June 30, 2017 and December 31, 2016. We have entered into programming agreements with Panamax Films, LLC (“Panamax”), an entity owned by James M. McNamara, for the licensing of three specific movie titles. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.0 million for each of the three and six months ended June 30, 2017 and 2016. At June 30, 2017 and December 31, 2016, $0.1 million is included in programming rights related to these agreements. We entered into agreements to license the rights to motion pictures from Lionsgate for a total license fee of $1.0 million. Some of the titles are owned or controlled by Pantelion Films, LLC (“Pantelion”), for which Lionsgate acts as Pantelion’s exclusive licensing agent. Pantelion is a joint venture made up of several organizations, including Panamax (an entity owned by James M. McNamara), Lionsgate and Grupo Televisa. Fees paid by Cinelatino to Lionsgate may be remunerated to Pantelion in accordance with their financial arrangements. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.1 million and $0.0 million for the three months ended June 30, 2017 and 2016, respectively, and $0.2 million and $0.1 million for the six months ended June 30, 2017 and 2016, respectively. At June 30, 2017 and December 31, 2016, $0.2 million and $0.3 million, respectively, is included in programming rights. We entered into an agreement to purchase the rights to motion pictures from Frontera Productions, LLC. One of our Board members in 2017, Gabriel Brenner, holds an equity stake in this entity. The total license fee is $0.1 million. No expenses have been incurred as of June 30, 2017. Refer to Note 11 , “ Commitments ”, of Notes to unaudited condensed consolidated financial statements. We entered into a services agreement with InterMedia Advisors, LLC (“IMA”) which has officers, directors and stockholders in common with the Company for services including, without limitation, office space and operational support pursuant to a reimbursement agreement with IMA’s affiliate, InterMedia Partners VII, L.P. Expenses incurred under this agreement are included in selling, general and administrative expenses and amounted to $0.0 million for each of the three and six month periods ended June 30, 2017 and 2016. The amounts due from this related party totaled $0.0 million as of June 30, 2017 and December 31, 2016.

Goodwill and intangible assets

Goodwill and intangible assets	6 Months Ended
	Jun. 30, 2017
Goodwill and intangible assets
Goodwill and intangible assets	Note 3. Goodwill and intangible assets Goodwill and intangible assets consist of the following at June 30, 2017 and December 31, 2016 ( amounts in thousands ): June 30, December 31, 2017 2016 Broadcast license $ $ Goodwill Other intangibles Total intangible assets $ $ A summary of changes in the Company’s goodwill and other indefinite-lived intangible assets, on a net basis, for the six months ended June 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Impairment Net Balance at Broadcast license $ $ — $ — $ Goodwill — — Brands — — Other intangibles — — Total indefinite-lived intangibles $ $ — $ — $ A summary of the changes in the Company’s other amortizable intangible assets for the six months ended June 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Amortization Net Balance at Affiliate relationships $ $ — $ ) $ Advertiser relationships — ) Non-compete agreement — ) Other intangibles ) Total finite-lived intangibles $ $ $ ) $ The aggregate amortization expense of the Company’s amortizable intangible assets was $3.3 million and $3.4 million for the three months ended June 30, 2017 and 2016, respectively, and $6.7 million for each of the six months ended June 30, 2017 and 2016. The weighted average remaining amortization period is 3.8 years at June 30, 2017. Future estimated amortization expense is as follows (amounts in thousands): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $

Equity method investments

Equity method investments	6 Months Ended
	Jun. 30, 2017
Equity method investments
Equity method investments	Note 4. Equity method investments The Company makes investments that support its underlying business strategy and enable it to enter new markets. The carrying values of the Company’s equity method investments are consistent with its ownership in the underlying net assets of the investees. Certain of the Company’s equity investments are variable interest entities, for which the Company is not the primary beneficiary. On November 3, 2016, we acquired a 25% interest in PANTAYA, a newly formed joint venture with Lionsgate, to launch a Spanish-language OTT movie service. The service launched on August 1, 2017. The investment is deemed a VIE that is accounted for under the equity method. As of June 30, 2017, we have not funded any capital contributions to PANTAYA. We record income/loss on investment on a one quarter lag. Our share of the loss incurred by PANTAYA through June 30, 2017, $0.2 million, will be recorded as an offset to the investment and as Loss from equity investees in the income statement when a capital contribution is made. On November 30, 2016, we, in partnership with Colombian content producers, Radio Television Interamericana S.A., Compania de Medios de Informacion S.A.S. and NTC Nacional de Television y Comunicaciones S.A., were awarded a ten (10) year renewable television broadcast concession license for Canal Uno in Colombia the (“Canal Uno Partnership”). Canal Uno is one of only three national broadcast television networks in Colombia. The Canal Uno Partnership began operations of the network through a newly formed joint venture vehicle on May 1, 2017. The Company has a 20% interest in the JV, which is deemed a VIE that is accounted for under the equity method. For the period ended June 30, 2017, we recorded $9.1 million in Equity method investments, related to Canal Uno. We record the income/loss on investment on a one quarter lag. Through June 30, 2017, we have recorded $0.1 million in loss related to this investment. Additionally, we earned a preferred return on capital funded. Through June 30, 2017, we recorded $0.2 million of income in Other income, net. In the three and six months ended June 30, 2017, we recorded $0.1 million in income in Other income, net related to this investment. On April 28, 2017, we acquired a 25.5% interest in REMEZCLA, an influential digital media company targeting English speaking and bilingual U.S. Hispanics aged 18-35 through innovative content. For the six months ended June 30, 2017, we have recorded $5.0 million in Equity method investments related to REMEZCLA. The Company records the income/loss on investment on a one quarter lag. In the three and six months ended June 30, 2017, we recorded $0 in Other income, net related to this investment.

Income taxes

Income taxes	6 Months Ended
	Jun. 30, 2017
Income taxes
Income taxes	Note 5. Income taxes For the six months ended June 30, 2017 and 2016, our income tax expense has been computed utilizing the estimated annual effective rates of 35.9% and 35.8%, respectively. The difference between the annual effective rate of 35.9% and the statutory Federal income tax rate of 35% in the six months ended June 30, 2017, is driven by foreign withholding taxes and foreign permanent differences, which were offset by foreign tax credits. The difference between the annual effective rate of 35.8% and the statutory Federal income tax rate of 35% in the six month period ended June 30, 2016, is primarily due to state and foreign income taxes. Income tax expense for the three and six months ended June 30, 2017, was $2.8 million and $4.5 million, respectively. Income tax expense for the three and six months ended June 30, 2016, was $2.8 million and $4.3 million, respectively.

Long-term debt

Long-term debt	6 Months Ended
	Jun. 30, 2017
Long-term debt
Long-term debt	Note 6. Long-term debt Long-term debt at June 30, 2017 and December 31, 2016 consists of the following (amounts in thousands) : June 30, 2017 December 31, 2016 Senior Notes due February 2024 $ $ — Senior Notes due July 2020 — Less: Current portion — $ $ On July 31, 2014, certain of our subsidiaries (the “Borrowers”) entered into an amended credit agreement providing for a $225.0 million senior secured term loan B facility (the “Term Loan Facility”), which was due to mature on July 30, 2020. Pricing on the Term Loan Facility was set at LIBOR plus 400 basis points (subject to a LIBOR floor of 1.00%). On February 14, 2017 (the “Closing Date”), the Borrowers amended the Term Loan Facility (the “Second Amended Term Loan Facility”). The Second Amended Term Loan Facility provides for a $213.3 million senior secured term loan B facility, which matures on February 14, 2024. The Second Amended Term Loan Facility, bears interest at the Borrowers’ option of either (i) LIBOR plus a margin of 3.50% (decreased from a margin of 4.00% under the Term Loan Facility) or (ii) or an Alternate Base Rate (“ABR”) plus a margin of 2.50% (decreased from a margin of 3.00% under the Term Loan Facility). There is no LIBOR floor (a decrease from a LIBOR floor of 1.00% under the Term Loan Facility). The Second Amended Term Loan Facility, among other terms, provides for an uncommitted incremental loan option (the “Incremental Facility”) allowing for increases for borrowings under the Second Amended Term Loan Facility and borrowing of new tranches of term loans, up to an aggregate principal amount equal to (i) $65.0 million plus (ii) an additional amount (the “Incremental Facility Increase”) provided, that after giving effect to such Incremental Facility Increase (as well as any other additional term loans), on a pro forma basis, the First Lien Net Leverage Ratio (as defined in the Second Amended Term Loan Facility) for the most recent four consecutive fiscal quarters does not exceed 4.00:1.00 and the Total Net Leverage Ratio (as defined in the Second Amended Term Loan Facility) for the most recent four consecutive fiscal quarters does not exceed 6.00:1.00. The First Lien Net Leverage Ratio and the Total Net Leverage Ratio each cap the cash netted against debt up to a maximum amount of $60.0 million (increased from $45.0 million under the Term Loan Facility). Additionally, the Second Amended Term Loan Facility also provides for an uncommitted incremental revolving loan option (the “Incremental Revolving Facility”) allowing for an aggregate principal amount of up to $30.0 million, which will be secured on a pari passu basis by the collateral securing the Second Amended Term Loan Facility. The Second Amended Term Loan Facility requires the Borrowers to make amortization payments (in quarterly installments) equal to 1.00% per annum with respect to the Second Amended Term Loan Facility with any remaining amount due at final maturity. The Second Amended Term Loan Facility principal payments commenced on March 31, 2017, with a final installment due on February 14, 2024. Voluntary prepayments are permitted, in whole or in part, subject to certain minimum prepayment requirements. In addition, pursuant to the terms of the Second Amended Term Loan Facility, within 90 days after the end of each fiscal year, the Borrowers are required to make a prepayment of the loan principal in an amount equal to a percentage of the excess cash flow of the most recently completed fiscal year. Excess cash flow is generally defined as net income plus depreciation and amortization expense, less mandatory prepayments of the term loan, interest charges, income taxes and capital expenditures, and adjusted for the change in working capital. The percentage of the excess cash flow used to determine the amount of the prepayment of the loan declines from 50% to 25%, and again to 0% at lower leverage ratios. Pursuant to the terms of the Second Amended Term Loan Facility, our net leverage ratio was 2.6x at December 31, 2016, resulting in an excess cash flow percentage of 0% and therefore, no excess cash flow payment was required to be paid in 2017. In accordance with Accounting Standards Codification (“ASC”) 470 - Debt , the refinancing arrangement was deemed a modification of the Term Loan Facility and as such, an additional $1.1 million of original issue discount (“OID”) incurred in connection with the Second Amended Term Loan Facility was added to the existing OID. As of June 30, 2017, the OID balance was $2.2 million, net of accumulated amortization of $1.3 million and was recorded as a reduction to the principal amount of the Second Amended Term Loan Facility outstanding as presented on the unaudited condensed consolidated balance sheet and will be amortized as a component of interest expense over the term of the Second Amended Term Loan Facility. Financing costs of $1.4 million incurred in connection with the Second Amended Term Loan Facility were expensed in the period in accordance with ASC 470 — Debt and are included in Other expenses in the unaudited condensed consolidated statement of operations at June 30, 2017. In accordance with ASU 2015-15 Interest — Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements, deferred financing fees of $1.6 million, net of accumulated amortization of $2.3 million, are presented as a reduction to the Second Amended Term Loan Facility outstanding at June 30, 2017 as presented on the unaudited condensed consolidated balance sheet, and will be amortized as a component of interest expense over the term of the Second Amended Term Loan Facility. The carrying value of the long-term debt approximates fair value at June 30, 2017 and December 31, 2016, and was derived from quoted market prices by independent dealers (Level 2 in the fair value hierarchy under ASC 820, Fair Value Measurements and Disclosures ). The following are the maturities of our long-term debt as of June 30, 2017 ( amounts in thousands ): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $

Derivative instruments

Derivative instruments	6 Months Ended
	Jun. 30, 2017
Derivative instruments
Derivative instruments	Note 7. Derivative instruments We use derivative financial instruments in the management of our exposure to interest rate. Our strategy is to eliminate the cash flow risk on a portion of the variable rate debt caused by changes in the designated benchmark interest rate, LIBOR. The Company does not enter into or hold derivative financial instruments for speculative trading purposes. At May 4, 2017, we entered into two identical pay-fixed, receive-variable, interest rate swaps with two different counter parties, to hedge the variability in the LIBOR interest payments on an aggregate notional value of $100.0 million of our Second Amended Term Loan Facility beginning May 31, 2017, through the expiration of the swaps on March 31, 2022. At inception, these interest rate swaps were designated as cash flow hedges of interest rate risk, and as such, the effective portion of unrealized changes in market value is recorded in Accumulated other comprehensive income (“AOCI”). Any losses from hedge ineffectiveness will be recognized in current earnings. The change in the fair value of the interest rate swap agreements in the three month period ended June 30, 2017 was a loss of $0.3 million, and was included in AOCI. The Company paid $0.0 million of net interest on the settlement of the interest rate swap agreements for the three month periods ended June 30, 2017. As of June 30, 2017, the Company estimates that none of the unrealized loss included in AOCI related to these interest rate swap agreements will be realized and reported in earnings within the next twelve months. No gain or loss was recorded in earnings for the three and six months ended June 30, 2017. The fair value of the interest rate swaps as of June 30, 2017 was $0.3 million and was recorded in Derivative liability in non-current liabilities on the unaudited condensed consolidated balance sheets. By entering into derivative instrument contracts, we are exposed to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We attempt to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty. Our derivative instruments do not contain any credit-risk related contingent features.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Fair Value Measurements	Note 8. Fair Value Measurements Our derivatives are valued using a discounted cash flow analysis that incorporates observable market parameters, such as interest rate yield curves, classified as Level 2 within the valuation hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by us or the counterparty. The following table presents our assets and liabilities measured at fair value on a recurring basis and the levels of inputs used to measure fair value, which include derivatives designated as cash flow hedging instruments, as well as their location on our unaudited condensed consolidated balance sheets as of June 30, 2017 ( amounts in thousands ): Estimated Fair Value June 30, 2017 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Cash flow hedges: Derivative Liability Other non-current liabilities — $ — $ Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests. These items primarily include long-lived assets, goodwill and other intangible assets. The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The carrying value of the long-term debt approximates fair value because this instrument bears interest at a variable rate, is pre-payable, and is at terms currently available to the Company.

Stockholders' equity

Stockholders' equity	6 Months Ended
	Jun. 30, 2017
Stockholders' equity
Stockholders' equity	Note 9. Stockholders’ equity Equity incentive plans Effective May 16, 2016, the stockholders of all classes of capital stock of the Company approved at the annual stockholder meeting the Hemisphere Media Group, Inc. Amended and Restated 2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”) to increase the number of shares of Class A common stock that may be delivered under the 2013 Equity Incentive Plan to an aggregate of 7.2 million shares of our Class A common stock. At June 30, 2017, 2.8 million shares remained available for issuance of stock options or other stock-based awards under our 2013 Equity Incentive Plan (including shares of restricted Class A common stock surrendered to the Company in payment of taxes required to be withheld in respect of vested shares of restricted Class A common stock, which are available for re-issuance). The expiration date of the 2013 Equity Incentive Plan, on and after which date no awards may be granted, is April 4, 2023. The Company’s board of directors, or a committee thereof, administers the 2013 Equity Incentive Plan and has the sole and plenary authority to, among other things: (i) designate participants; (ii) determine the type, size, and terms and conditions of awards to be granted; and (iii) determine the method by which an award may be settled, exercised, canceled, forfeited or suspended. The Company’s time-based restricted stock awards and option awards generally vest in three equal annual installments beginning on the first anniversary of the grant date, subject to the grantee’s continued employment or service with the Company. The Company’s event-based restricted stock awards and option awards generally vest upon the Company’s Class A common stock attaining a $15.00 closing price per share, as quoted on the NASDAQ Global Market, on at least 10 trading days, subject to the grantee’s continued employment or service with the Company. Other event-based restricted stock awards granted to certain members of our Board vest on the day preceding the Company’s annual stockholder meeting. Stock-based compensation Stock-based compensation expense related to stock options and restricted stock was $1.1 million and $0.6 million for the three months ended June 30, 2017 and 2016, respectively, and $2.1 million and $2.0 million for the six months ended June 30, 2017 and 2016, respectively. At June 30, 2017, there was $2.7 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.7 years. At June 30, 2017, there was $3.2 million of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted-average period of 1.5 years. Stock options The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option pricing model for time-based options and the Monte Carlo simulation model for event-based options. The expected term of options granted is derived using the simplified method under ASC 718-10-S99-1/SEC Topic 14.D for “plain vanilla” options and the Monte Carlo simulation for event-based options. Expected volatility is based on the historical volatility of the Company’s competitors given its lack of trading history. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has estimated forfeitures of 1.5%, as the awards are granted to management for which the Company expects lower turnover, and has assumed no dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future. Black-Scholes Option Valuation Assumptions Six Months Ended Year Ended Risk-free interest rate — 1.6%-2.4% Dividend yield — — Volatility — 26.4%-32.4% Weighted-average expected term (years) — The following table summarizes stock option activity for the six months ended June 30, 2017 (shares and intrinsic value in thousands) : Number of shares Weighted-average Weighted-average Aggregate intrinsic Outstanding at December 31, 2016 $ $ Granted — — — — Exercised — — — — Forfeited ) — — Expired ) — — Outstanding at June 30, 2017 $ $ Vested at June 30, 2017 $ $ Exercisable at June 30, 2017 $ $ No options were granted during the six months ended June 30, 2017. At June 30, 2017, 0.3 million options granted are unvested, event-based options. Restricted stock Certain employees and directors have been awarded restricted stock under the 2013 Equity Incentive Plan. The time-based restricted stock grants vest primarily over a period of three years. The fair value and expected term of event-based restricted stock grants is estimated at the grant date using the Monte Carlo simulation model. The following table summarizes restricted share activity for the six months ended June 30, 2017 ( shares in thousands ): Number of shares Weighted-average Outstanding at December 31, 2016 $ Granted Vested ) Forfeited — — Outstanding at June 30, 2017 $ At June 30, 2017, 0.2 million shares of restricted stock issued were unvested, event-based shares. Warrants At June 30, 2017, 12.3 million warrants, exercisable into 6.1 million shares of our Class A common stock, were issued and outstanding. Each warrant entitles the holder to purchase one-half of one share of our Class A common stock at a price of $6.00 per half share. Warrants may be exercised only through the date of expiration and are only exercisable for a whole number of shares of common stock (i.e. only an even number of warrants may be exercised at any given time by a registered holder). As a result, a holder must exercise a least two warrants at an effective exercise price of $12.00 per share. At the option of the Company, 7.6 million warrants may be called for redemption, provided that the last sale price of our Class A common stock reported has been at least $18.00 per share on each of 20 trading days within the 30-day period ending on the third business day prior to the date on which notice of redemption is given. The warrants expire on April 4, 2018. During the six months ended June 30, 2017, no warrants were repurchased. There were 716 warrants exercised during the six months ended June 30, 2017.

Contingencies

Contingencies	6 Months Ended
	Jun. 30, 2017
Contingencies
Contingencies	Note 10. Contingencies We are involved in various legal actions, generally related to our operations. Management believes, based on advice from legal counsel, that the outcomes of such legal actions will not adversely affect our financial condition.

Commitments

Commitments	6 Months Ended
	Jun. 30, 2017
Commitments
Commitments	Note 11. Commitments We have entered into certain rental property contracts with third parties, which are accounted for as operating leases. Rental expense was $0.2 million for each of the three months ended June 30, 2017 and 2016, and $0.4 million and $0.3 million for the six months ended June 30, 2017 and 2016, respectively. We have certain commitments including various operating leases and funding obligations for certain equity investments. Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands) : Six months Ending June 30, Operating Leases Other Total Remainder of 2017 $ $ $ 2018 2019 2020 2021 and thereafter Total $ $ $

Subsequent events

Subsequent events	6 Months Ended
	Jun. 30, 2017
Subsequent events
Subsequent events	Note 12. Subsequent events On July 14, 2017, WAPA entered into a new collective bargaining agreement with Union de Periodistas Artes Graficas y Ramas Anexas, which remains in effect through May 31, 2022.

Nature of business (Policies)

Nature of business (Policies)	6 Months Ended
	Jun. 30, 2017
Nature of business
Basis of presentation:	Basis of presentation: The accompanying unaudited condensed consolidated financial statements for Hemisphere and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Our financial condition as of, and operating results, for the three and six months ended June 30, 2017 are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016.
Net earnings per common share:	Net earnings per common share: Basic earnings per share (“EPS”) are computed by dividing income attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive. The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS ( amounts in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator for earnings per common share calculation: Net income $ $ $ $ Denominator for earnings per common share calculation: Weighted-average common shares, basic Effect of dilutive securities Stock options, restricted stock and warrants Weighted-average common shares, diluted EPS Basic $ $ $ $ Diluted $ $ $ $ We apply the treasury stock method to measure the dilutive effect of our outstanding stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income per common share calculation. Potentially dilutive securities representing 2.0 million shares of common stock for the three and six months ended June 30, 2017, were excluded from the computation of diluted income per common share for this period because their effect would have been anti-dilutive. The net income per share amounts are the same for our Class A common stock, par value $0.0001 per share (“Class A common stock”) and Class B common stock, par value $0.0001 per share (“Class B common stock”), because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.
Use of estimates:	Use of estimates: In preparing these financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheet dates, and the reported revenues and expenses for the three and six months ended June 30, 2017 and 2016. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates.
Recent accounting pronouncements:	Recent accounting pronouncements: In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2017-09 — Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting . The amendments in this Update affect any entity that changes the terms or conditions of a share-based payment award and provides guidance on which changes to terms or conditions of an award require an entity to apply modification accounting. The amendments in this ASU are effective for all entities for annual periods, and all interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. Our consolidated financial statements would only be impacted if we were to make changes to share-based payment awards. In March 2016, the FASB issued ASU 2016-09 - Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, such as requiring all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and allowing a policy election to account for forfeitures as they occur. In addition, all related cash flows resulting from share-based payments will be reported as operating activities on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016. The new standard impacts our financial statements by increasing or decreasing our income tax provision and increasing cash flow from operating activities. In May 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers , a comprehensive revenue recognition model that supersedes the current revenue recognition requirements and most industry-specific guidance. Subsequent accounting standard updates have also been issued which amend and/or clarify the application of ASU 2014-09. The guidance provides a five-step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The guidance will be effective for the first interim period of our 2018 fiscal year and allows adoption either under a full retrospective or a modified retrospective approach. The Company has identified retransmission/subscriber fees and advertising sales as significant and is currently in the process of analyzing each of these revenue streams in accordance with the new guidance to determine the impact on the consolidated financial statements. When the Company has completed its evaluation, it will determine the method of transition that will be used in adopting the new standard.

Nature of business (Tables)

Nature of business (Tables)	6 Months Ended
	Jun. 30, 2017
Nature of business
Schedule of the computation of the common shares outstanding used in determining basic and diluted EPS	The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS ( amounts in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator for earnings per common share calculation: Net income $ $ $ $ Denominator for earnings per common share calculation: Weighted-average common shares, basic Effect of dilutive securities Stock options, restricted stock and warrants Weighted-average common shares, diluted EPS Basic $ $ $ $ Diluted $ $ $ $

Goodwill and intangible assets

Goodwill and intangible assets (Tables)	6 Months Ended
	Jun. 30, 2017
Goodwill and intangible assets
Schedule of goodwill and intangible assets	Goodwill and intangible assets consist of the following at June 30, 2017 and December 31, 2016 ( amounts in thousands ): June 30, December 31, 2017 2016 Broadcast license $ $ Goodwill Other intangibles Total intangible assets $ $
Summary of the changes in goodwill and other indefinite lived intangible assets	A summary of changes in the Company’s goodwill and other indefinite-lived intangible assets, on a net basis, for the six months ended June 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Impairment Net Balance at Broadcast license $ $ — $ — $ Goodwill — — Brands — — Other intangibles — — Total indefinite-lived intangibles $ $ — $ — $
Summary of the changes in other amortizable intangible assets	A summary of the changes in the Company’s other amortizable intangible assets for the six months ended June 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Amortization Net Balance at Affiliate relationships $ $ — $ ) $ Advertiser relationships — ) Non-compete agreement — ) Other intangibles ) Total finite-lived intangibles $ $ $ ) $
Schedule of future estimated amortization expense	Future estimated amortization expense is as follows (amounts in thousands): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $

Long-term debt (Tables)

Long-term debt (Tables)	6 Months Ended
	Jun. 30, 2017
Long-term debt
Schedule of long-term debt	Long-term debt at June 30, 2017 and December 31, 2016 consists of the following (amounts in thousands) : June 30, 2017 December 31, 2016 Senior Notes due February 2024 $ $ — Senior Notes due July 2020 — Less: Current portion — $ $
Schedule of maturities of long-term debt	The following are the maturities of our long-term debt as of June 30, 2017 ( amounts in thousands ): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis	The following table presents our assets and liabilities measured at fair value on a recurring basis and the levels of inputs used to measure fair value, which include derivatives designated as cash flow hedging instruments, as well as their location on our unaudited condensed consolidated balance sheets as of June 30, 2017 ( amounts in thousands ): Estimated Fair Value June 30, 2017 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Cash flow hedges: Derivative Liability Other non-current liabilities — $ — $

Stockholders' equity (Tables)

Stockholders' equity (Tables)	6 Months Ended
	Jun. 30, 2017
Equity incentive plans
Summary of stock option activity	The following table summarizes stock option activity for the six months ended June 30, 2017 (shares and intrinsic value in thousands) : Number of shares Weighted-average Weighted-average Aggregate intrinsic Outstanding at December 31, 2016 $ $ Granted — — — — Exercised — — — — Forfeited ) — — Expired ) — — Outstanding at June 30, 2017 $ $ Vested at June 30, 2017 $ $ Exercisable at June 30, 2017 $ $
Summary of restricted share activity	The following table summarizes restricted share activity for the six months ended June 30, 2017 ( shares in thousands ): Number of shares Weighted-average Outstanding at December 31, 2016 $ Granted Vested ) Forfeited — — Outstanding at June 30, 2017 $
Time Based Stock Option | Black Scholes Pricing Model
Equity incentive plans
Schedule of valuation assumptions	Black-Scholes Option Valuation Assumptions Six Months Ended Year Ended Risk-free interest rate — 1.6%-2.4% Dividend yield — — Volatility — 26.4%-32.4% Weighted-average expected term (years) —

Commitments (Tables)

Commitments (Tables)	6 Months Ended
	Jun. 30, 2017
Commitments
Schedule of future minimum payments for operating leases and other commitments, primarily programming	Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands) : Six months Ending June 30, Operating Leases Other Total Remainder of 2017 $ $ $ 2018 2019 2020 2021 and thereafter Total $ $ $

Nature of business (Details)

Nature of business (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Nature of business
Equity method Investments	$ 14,350		$ 14,350
Numerator for earnings per common share calculation:
Net income	$ 5,181	$ 5,029	$ 7,926	$ 7,729
Denominator for earnings per common share calculation:
Weighted-average common shares, basic	40,633	42,546	40,574	42,844
Effect of dilutive securities:
Stock options, restricted stock and warrants	175	261	210	794
Weighted-average common shares, diluted	40,808	42,807	40,784	43,638
EPS
Basic (in dollars per share)	$ 0.13	$ 0.12	$ 0.20	$ 0.18
Diluted (in dollars per share)	$ 0.13	0.12	$ 0.19	0.18
Shares excluded from the computation of diluted income per common share	2,000		2,000
Common Class A
EPS
Par value of common stock (in dollars per share)	$ 0.0001	0.0001	$ 0.0001	0.0001	$ 0.0001
Common Class B
EPS
Par value of common stock (in dollars per share)	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Colombian content producers, Radio television and NTC nacional | Television broadcast license
Nature of business
Equity method Investments	$ 9,100		$ 9,100

Related party transactions (Det

Related party transactions (Details) $ in Thousands	Apr. 09, 2016	Jun. 30, 2017USD ($)item	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)item	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)
MVS Multivision Digital Sde RLde CV and Affiliates
Related party transactions
Due from related parties, net of allowance for doubtful accounts		$ 1,700		$ 1,700		$ 1,500
Due to related parties		$ 800		800		400
MVS Multivision Digital Sde RLde CV and Affiliates | Satellite and Support Services Agreement | Cinelatino
Related party transactions
Number of channel feeds delivered through satellite | item		2
Total expense		$ 600	$ 600	1,300	$ 1,300
MVS Multivision Digital Sde RLde CV and Affiliates | Master License Agreement | Cinelatino
Related party transactions
Term of agreement		10 years
Revenue as a percentage of license fees collected from distributors in Latin America and Mexico		13.50%
Revenue recognized from related party		$ 600	900	1,100	2,300
MVS Multivision Digital Sde RLde CV and Affiliates | Affiliation Agreement | Cinelatino
Related party transactions
Revenue recognized from related party		600	600	1,100	1,100
Director | Consulting Agreement with Director
Related party transactions
Total expense		100	100	200	100
Term of agreement	3 years
Due to related parties		0		0		0
Panamax Films, LLC | Programming Agreements
Related party transactions
Total expense		0	0	$ 0	0
Number of specific movie titles to be distributed | item				3
Programming rights		100		$ 100		100
Lionsgate | Movie License Agreement | Cinelatino
Related party transactions
Total expense		100	0	200	100
Programming rights		200		200		300
License fee under agreement with related party		1,000		1,000
Inter Media Advisors LLC | Services Agreement
Related party transactions
Total expense		0	$ 0	0	$ 0
Due from related parties, net of allowance for doubtful accounts		0		0		$ 0
Frontera Productions LLC | Movie License Agreement
Related party transactions
Total expense				0
License fee under agreement with related party		$ 100		$ 100

Goodwill and intangible asset29

Goodwill and intangible assets (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Goodwill and intangible assets
Broadcast license	$ 41,356	$ 41,356
Goodwill	164,887	164,887
Other intangibles	58,209	64,849
Total intangible assets	$ 264,452	$ 271,092

Goodwill and intangible Asset30

Goodwill and intangible Assets - Indefinite Lived Net Balance (Details) $ in Thousands	Jun. 30, 2017USD ($)
Changes in the goodwill
Net balance at the beginning of the period	$ 164,887
Net balance at the end of the period	164,887
Changes in the goodwill and other indefinite lived intangible assets, on a net basis
Net balance at the beginning of the period	222,929
Net balance at the end of the period	222,929
Broadcast license
Changes in other indefinite-lived intangible assets
Net balance at the beginning of the period	41,356
Net balance at the end of the period	41,356
Brands
Changes in other indefinite-lived intangible assets
Net balance at the beginning of the period	15,986
Net balance at the end of the period	15,986
Other intangibles
Changes in other indefinite-lived intangible assets
Net balance at the beginning of the period	700
Net balance at the end of the period	$ 700

Goodwill and intangible asset31

Goodwill and intangible assets - Other Amortizable Intangible (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017
Changes in other amortizable intangible assets
Balance at the beginning of the period			$ 48,163
Additions			21
Amortization	$ (3,300)	$ (3,400)	(6,661)	$ (6,700)
Net balance at the end of the period	41,523		41,523
Future estimated amortization expense
Remainder of 2017					$ 6,617
2,018					13,212
2,019					8,462
2,020					6,042
2020 and thereafter					7,190
Total	41,523		$ 48,163		41,523
Weighted Average
Future estimated amortization expense
Remaining amortization period			3 years 9 months 18 days
Affiliate relationships
Changes in other amortizable intangible assets
Balance at the beginning of the period			$ 44,468
Amortization			(6,092)
Net balance at the end of the period	38,376		38,376
Future estimated amortization expense
Total	38,376		44,468		38,376
Advertiser relationships
Changes in other amortizable intangible assets
Balance at the beginning of the period			1,792
Amortization			(276)
Net balance at the end of the period	1,516		1,516
Future estimated amortization expense
Total	1,516		1,792		1,516
Non-compete agreement
Changes in other amortizable intangible assets
Balance at the beginning of the period			1,784
Amortization			(274)
Net balance at the end of the period	1,510		1,510
Future estimated amortization expense
Total	1,510		1,784		1,510
Other intangibles
Changes in other amortizable intangible assets
Balance at the beginning of the period			119
Additions			21
Amortization			(19)
Net balance at the end of the period	121		121
Future estimated amortization expense
Total	$ 121		$ 119		$ 121

Equity method investments - (De

Equity method investments - (Details) $ in Thousands	Apr. 28, 2017	Nov. 30, 2016item	Jun. 30, 2017USD ($)	May 01, 2017	Nov. 03, 2016
Equity Method Investments.
Equity method Investments			$ 14,350
Income (Loss) from Equity Method Investments			(100)
Return on capital equity investment			200
PANTAYA
Equity Method Investments.
Ownership Percentage					25.00%
PANTAYA | Other income net
Equity Method Investments.
Income (Loss) from Equity Method Investments			200
Colombian content producers, Radio television and NTC nacional | Television broadcast license
Equity Method Investments.
Ownership Percentage				20.00%
License life (in years)		10 years
Number of national broadcast television networks | item		3
Equity method Investments			9,100
Colombian content producers, Radio television and NTC nacional | Television broadcast license | Other income net
Equity Method Investments.
Income (Loss) from Equity Method Investments			100
REMEZCLA
Equity Method Investments.
Ownership Percentage	25.50%
Equity method Investments			5,000
REMEZCLA | Other income net
Equity Method Investments.
Income (Loss) from Equity Method Investments			$ 0
REMEZCLA | Minimum
Equity Method Investments.
Target age of people English speaking and bilingual U.S. Hispanics	18 years
REMEZCLA | Maximum
Equity Method Investments.
Target age of people English speaking and bilingual U.S. Hispanics	35 years

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income taxes
Income tax expense	$ 2,838	$ 2,779	$ 4,522	$ 4,287
Effective tax rates reconciliation
Annual income tax rate (as a percent)			35.90%	35.80%
Statutory federal income tax rate (as a percent)			35.00%	35.00%

Long-term debt (Details)

Long-term debt (Details) $ in Thousands	Feb. 14, 2017USD ($)item	Jul. 31, 2014USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)item
Long-term debt
Current portion of long-term debt			$ 2,133
Long-term debt less current portion			$ 206,285		$ 210,270
Maximum period after each fiscal year for prepayment of debt			90 days
Payment of excess cash flow			$ 0
Financing costs			1,114
Amortization of deferred financing costs			156	$ 250
Gain loss in fair value			0
Maturities of long-term debt
Remainder of 2017			1,067
2,018			2,133
2,019			2,133
2,020			2,133
2,021			204,815
Total maturities			212,281
Second Amended Term Loan Facility
Long-term debt
Long-term Debt			208,418
Amount of term loan	$ 213,300
Uncommitted accordion option base amount	65,000
Borrowing capacity	$ 30,000
Amortization payments (in percentage)	1.00%
OID	$ 1,100		2,200
Accumulated amortization of original issue discount			1,300
Deferred financing costs			1,600
Accumulated amortization			2,300
Second Amended Term Loan Facility | Other expenses
Long-term debt
Financing costs			$ 1,400
Second Amended Term Loan Facility | First Lien Net Leverage Ratio
Long-term debt
Number of consecutive fiscal quarters | item	4
Uncommitted accordion option multiplier of net leverage ratio | item	4
Second Amended Term Loan Facility | Total Net Leverage Ratio
Long-term debt
Number of consecutive fiscal quarters | item	4
Uncommitted accordion option multiplier of net leverage ratio | item	6
Second Amended Term Loan Facility | First Lien and Total Net Leverage Ratio
Long-term debt
Debt caps amount	$ 60,000
Second Amended Term Loan Facility | LIBOR
Long-term debt
Interest rate margin (as a percent)	3.50%
Second Amended Term Loan Facility | Alternate Base Rate (ABR)
Long-term debt
Interest rate margin (as a percent)	2.50%
Existing Senior Secured Term Loan B Facility
Long-term debt
Long-term Debt					$ 210,270
Amount of term loan		$ 225,000
Interest rate margin (as a percent)		4.00%
Uncommitted accordion option multiplier of net leverage ratio | item					2.6
First prepayment of debt as a percentage of excess cash flow, if lower leverage ratio is maintained			25.00%
Second prepayment of debt as a percentage of excess cash flow, if lower leverage ratio is maintained			0.00%
Existing Senior Secured Term Loan B Facility | First Lien and Total Net Leverage Ratio
Long-term debt
Debt caps amount	$ 45,000
Existing Senior Secured Term Loan B Facility | LIBOR
Long-term debt
Reference rate basis		LIBOR
Interest rate margin (as a percent)		4.00%
Interest rate floor (as a percent)		1.00%
Existing Senior Secured Term Loan B Facility | LIBOR | Minimum
Long-term debt
Interest rate floor (as a percent)		1.00%
Existing Senior Secured Term Loan B Facility | Alternate Base Rate (ABR)
Long-term debt
Interest rate margin (as a percent)		3.00%

Derivative instruments (Details

Derivative instruments (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	May 31, 2017
Derivative
Net change in fair value of cash flow hedge	$ (340)	$ (340)
Gain loss in fair value		0
Derivative Liability	340	$ 340
Interest Rate Swap
Derivative
Interest rate expense	$ 0
LIBOR | Nondesignated | Interest Rate Swap
Derivative
Notional amount			$ 100,000

Fair Value Measurements (Detail

Fair Value Measurements (Details) $ in Thousands	Jun. 30, 2017USD ($)
Fair Value Measurements
Derivative Liability	$ 340
Cash flow hedges | Other non-current liabilities
Fair Value Measurements
Derivative Liability	340
Cash flow hedges | Other non-current liabilities | Level 2
Fair Value Measurements
Derivative Liability	$ 340

Stockholders' equity - (Details

Stockholders' equity - (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017USD ($)item$ / sharesshares	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)item$ / sharesshares	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)$ / sharesshares	May 16, 2016shares
Stock-based compensation
Stock-based compensation expense (in dollars) | $	$ 1,100	$ 600	$ 2,100	$ 2,000
Common Class A
Equity incentive plans
Shares authorized for issuance						7,200
Employee and Directors Stock Options
Stock-based compensation
Unrecognized compensation cost related to unvested stock options (in dollars) | $	$ 2,700		$ 2,700
Weighted-average periods over which unrecognized compensation cost recognized			1 year 8 months 12 days
Estimated forfeitures (as a percent)	1.50%		1.50%
Number of shares
Outstanding at the beginning of the period (in shares)			2,920
Outstanding at the end of the period (in shares)	2,877		2,877		2,920
Vested at the end of the period (in shares)	1,822		1,822
Exercisable at the end of the period (in shares)	1,822		1,822
Forfeited (in shares)			(3)
Expired (in shares)			(40)
Weighted-average exercise price
Outstanding at the beginning of the period (in dollars per share) | $ / shares			$ 11.64
Outstanding at the end of the period (in dollars per share) | $ / shares	$ 11.64		11.64		$ 11.64
Vested at the end of the period (in dollars per share) | $ / shares	11.64		11.64
Exercisable at the end of the period (in dollars per share) | $ / shares	$ 11.64		11.64
Forfeited (in dollars per share) | $ / shares			12.10
Expired (in dollars per share) | $ / shares			$ 11.51
Weighted-average remaining contractual term
Outstanding			7 years 1 month 6 days		7 years 7 months 6 days
Outstanding at the end of the period			7 years 1 month 6 days		7 years 7 months 6 days
Vested at the end of the period			6 years 6 months
Exercisable at the end of the period			6 years 6 months
Aggregate intrinsic value
Outstanding at the beginning of the period (in dollars) | $			$ 1,274
Outstanding at the end of the period (in dollars) | $	$ 2,139		2,139		$ 1,274
Vested at the end of the period (in dollars) | $	1,637		1,637
Exercisable at the end of the period (in dollars) | $	1,637		$ 1,637
Valuation assumptions
Dividend yield (as a percent)			0.00%
Restricted Stock
Stock-based compensation
Unrecognized compensation cost related to unvested restricted stock (in dollars) | $	$ 3,200		$ 3,200
Weighted-average periods over which unrecognized compensation cost recognized			1 year 6 months
Number of shares
Outstanding at the beginning of the period (in shares)			561
Granted (in shares)	99
Vested (in shares)	(195)
Outstanding at the end of the period (in shares)	465		465		561
Weighted-average grant date fair value
Outstanding at the beginning of the period (in dollars per share) | $ / shares			$ 10.58
Granted (in dollars per share) | $ / shares	$ 11.10
Vested (in dollars per share) | $ / shares	11.73
Outstanding at the end of the period (in dollars per share) | $ / shares	$ 10.21		$ 10.21		$ 10.58
Restricted Stock | Common Class A
Equity incentive plans
Shares available for issuance	2,800		2,800
Time Based Restricted Stock and Stock Option
Equity incentive plans
Number of equal annual installments for vesting of awards | item	3		3
Time Based Stock Option | Black Scholes Pricing Model
Valuation assumptions
Risk-free interest rate, minimum (as a percent)					1.60%
Risk-free interest rate, maximum (as a percent)					2.40%
Volatility, minimum (as a percent)					26.40%
Volatility, maximum (as a percent)					32.40%
Weighted-average expected term					6 years 2 months 12 days
Time Based Restricted Stock
Valuation assumptions
Vesting period			3 years
Event Based Restricted Stock and Stock Option | Common Class A
Equity incentive plans
Closing price per share to be attained for vesting of awards to begin (in dollars per share) | $ / shares			$ 15
Event Based Restricted Stock and Stock Option | Common Class A | Minimum
Equity incentive plans
Number of trading days on which the closing price per share should attain the specified price per share for vesting of awards to begin | item	10		10
Event Based Stock Option
Aggregate intrinsic value
Unvested options	300		300
Event Based Restricted Stock
Number of shares
Outstanding at the end of the period (in shares)	200		200

Stockholders' equity - Warrants

Stockholders' equity - Warrants (Details)	6 Months Ended
	Jun. 30, 2017item$ / shares$ / itemshares
Warrants
Exercise price of warrants per half share | $ / item	6
Minimum number of warrants exercisable by holder (in shares)	2
Exercise price of warrants (in dollars per share) | $ / shares	$ 12
Number of warrants that may be called for redemption (in shares)	7,600,000
Number of warrants repurchased	0
Number of warrants exercised	716
Common Class A
Warrants
Issued (in shares)	12,300,000
Outstanding (in shares)	6,100,000
Number of shares entitled to warrant holders (as a percent)	0.5
Warrants exercisable into number of shares	6,100,000
Trigger price of stock in order to provide for redemption of warrants at option of the Company (in dollars per share) | $ / shares	$ 18
Number of trading days through which last sales price of common stock is reported for warrant redemption | item	20
Period of aggregate number of trading days through which last sales price of common stock is reported for warrant redemption	30 days

Commitments (Details)

Commitments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Commitments
Rental expense	$ 200	$ 200	$ 400	$ 300
Future minimum payments for operating leases
Remainder of 2017	303		303
2,018	456		456
2,019	449		449
2,020	358		358
2021 and thereafter	997		997
Total	2,563		2,563
Future minimum payments for other commitments
Remainder of 2017	8,125		8,125
2,018	7,732		7,732
2,019	2,385		2,385
2,020	622		622
2021 and thereafter	10		10
Total	18,874		18,874
Future minimum payments for operating leases and other commitments
Remainder of 2017	8,428		8,428
2,018	8,188		8,188
2,019	2,834		2,834
2,020	980		980
2021 and thereafter	1,007		1,007
Total	$ 21,437		$ 21,437