What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-08-10 compared with 2020-05-08 · 264 added, 135 removed, 259 unchanged (61% of the section changed)

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In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results and timing of selected events in future periods may differ materially from those anticipated or implied in these forward-looking statements as a result of many factors, including those discussed under Item 1A , "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 10-K"), under Item 1A , "Risk Factors" in this 10-Q and elsewhere in this 10-Q.

See also " Cautionary Note Regarding Forward-Looking Statements " at the beginning of this 10-Q.

In an effort to contain the COVID-19 pandemic or slow its spread, governments around the world have enacted various measures, including orders to close all businesses not deemed "essential", isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities.

While to date, these measures have not had a severe direct impact on our performance, customer payment delays and requests to modify contractual payment terms have negatively impacted our liquidity and cash flows to some extent and are expected to have a more significant impact in future periods, including the second quarter of 2020.

As discussed in more detail below, we cannot estimate the impact that the COVID-19 pandemic and related government actions may have on our business or liquidity in the future.

To date, these measures have had some impact on our business, including with respect to the timing of executing new or renewal contracts, the impact of closed movie theaters on our customers, customer payment delays and requests to modify contractual payment terms.

These conditions have negatively impacted our liquidity and cash flows to some extent and are expected to continue to have an impact in future periods.

As discussed in more detail below, we cannot quantify the impact that the COVID-19 pandemic and related government actions may have on our business or liquidity in the future.

We have taken actions to mitigate the impact of COVID-19 and will continue to actively monitor the situation.

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The full extent of the impact of the COVID-19 pandemic on our business, operations and financial results will depend on numerous evolving factors that we cannot currently predict.

See Item 1A "Risk Factors" for additional details.

See Item 1A , "Risk Factors" in this 10-Q and Item 1A "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 for additional details.

We are a global information and analytics company that measures advertising, content, and the consumer audiences of each, across media platforms.

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Percentages may not add due to rounding.

Three Months Ended March 31,

(In thousands)

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

(In thousands) Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue

Revenues $ 88,566 100.0 % $ 96,888 100.0 % $ 178,094 100.0 % $ 199,182 100.0 %

Cost of revenues 44,949 50.8 % 51,994 53.7 % 90,747 51.0 % 105,401 52.9 %

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Amortization of intangible assets 6,846 7.7 % 8,076 8.3 % 13,764 7.7 % 16,181 8.1 %

Impairment of goodwill — — % 224,272 231.5 % — — % 224,272 112.6 %

Impairment of intangible asset — — % 17,308 17.9 % — — % 17,308 8.7 %

Settlement of litigation, net — — % 5,000 5.2 % — — % 5,000 2.5 %

Impairment of right-of-use and long-lived assets — — % — — % 4,671 2.6 % — — %

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Interest expense, net (8,856) (10.0) % (8,242) (8.5) % (17,702) (9.9) % (15,001) (7.5) %

Other income, net

Gain from foreign currency transactions

Other income (expense), net 1,477 1.7 % (3,081) (3.2) % 8,671 4.9 % (112) (0.1) %

Loss from foreign currency transactions (944) (1.1) % (464) (0.5) % (140) (0.1) % (426) (0.2) %

Loss before income taxes (11,065) (12.5) % (283,996) (293.1) % (24,664) (13.8) % (310,339) (155.8) %

Income tax benefit (provision)

Income tax benefit 664 0.7 % 4,463 4.6 % 1,079 0.6 % 3,292 1.7 %

Net loss $ (10,401) (11.7) % $ (279,533) (288.5) % $ (23,585) (13.2) % $ (307,047) (154.2) %

Our products and services are organized around solution groups that address customer needs.

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These costs include, but are not limited to, employee costs, costs to acquire data, operational overhead, data centers, and our technology that supports multiple solution groups.

Revenues for the three months ended March 31, 2020 and 2019 are as follows:

Three Months Ended March 31,

(In thousands)

Revenues from these three solution groups for the three months ended June 30, 2020 and 2019 were as follows:

Three Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Variance % Variance

Ratings and Planning (1)

$ 63,779 72.0 % $ 68,922 71.1 % $ (5,143) (7.5) %

Analytics and Optimization (1)

16,894 19.1 % 17,293 17.9 % (399) (2.3) %

Movies Reporting and Analytics 7,893 8.9 % 10,673 11.0 % (2,780) (26.0) %

Total revenues $ 88,566 100.0 % $ 96,888 100.0 % $ (8,322) (8.6) %

(1) Beginning April 1, 2020, on a prospective basis only, we plan to classify revenue from certain new and extended custom agreements for services that utilize our syndicated data set as Ratings and Planning.

Prior to April 1, 2020, revenue from these agreements was classified as Analytics and Optimization.

We do not expect a material impact to either Ratings and Planning revenue or Analytics and Optimization revenue from this change, which is intended to better reflect our categorization of the underlying services.

Revenues decreased by $12.8 million , or 12.5% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 .

(1) In the second quarter of 2020, we began classifying revenue from certain new and extended custom agreements for services that utilize our syndicated data set, previously classified under Analytics and Optimization, as Ratings and Planning.

The impact was not material to either solution group.

Revenues decreased by $8.3 million, or 8.6%, for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Ratings and Planning revenue is comprised of revenue from our digital, television and cross-platform products.

Ratings and Planning revenue decreased $7.1 million in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 .

The decrease was largely driven by lower revenue from our syndicated digital products.

While retention of syndicated digital enterprise customers remained high, revenue from our syndicated digital products represented 50% and 51% of our Ratings and Planning revenue in the first quarter of 2020 and 2019, respectively.

TV and cross-platform revenues were lower as a result of lower national TV from the effects of consolidation of certain customers.

Local TV revenue was higher, offsetting these decreases, from the impact of new business entered into in 2019.

Analytics and Optimization revenue decreased by $6.0 million in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 , due to lower sales and deliveries across all products in this solution group in the first quarter of 2020.

Movies Reporting and Analytics revenue increased by $0.2 million in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 .

The increase related to revenue from new products and from new customers gained during 2019.

As described under "Liquidity and Capital Resources" below, the COVID-19 pandemic has negatively impacted our cash collections from customers, particularly in recent weeks.

To date, however, we have not seen a severe impact on our revenue performance, which may be due to our largely subscription-based business model.

We believe the effects of COVID-19, including any impact on customer demand for our products and services, may not be fully reflected in our revenues and results of operations until future periods.

Ratings and Planning revenue decreased $5.1 million in the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

The decrease was largely driven by lower revenue from our syndicated digital products due in part to the COVID-19 pandemic.

While retention of syndicated digital enterprise customers remained high, revenue from our syndicated digital products represented 48% and 50% of our Ratings and Planning revenue in the second quarter of 2020 and 2019, respectively.

TV revenues were higher due in part to our new partnership with LiveRamp, additional deliveries of addressable TV solutions, and the impact of new Local TV business entered into in 2019.

Cross-platform revenues were lower due to fewer customer deliveries.

Analytics and Optimization revenue decreased by $0.4 million in the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

The decrease was primarily due to a decline in activation usage and fewer deliveries of lift and survey products, due in part to the COVID-19 pandemic, during the second quarter of 2020.

The decline was partially offset by approximately $1.0 million in revenue from a one-time recovery of revenue-sharing fees pertaining to one of our lift products.

Movies Reporting and Analytics revenue decreased by $2.8 million in the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Revenue was impacted by some smaller customers under short-term contracts pausing service in connection with theater closures.

We expect theater closures to continue affecting movies revenue for the foreseeable future.

During the quarter ended June 30, 2020, we signed or renewed contracts with eight significant customers, including three major domestic studios and one international studio.

However, the uncertainty around theater re-openings delayed the renewals of several customers.

Revenues for these three solution groups for the six months ended June 30, 2020 and 2019 were as follows:

Six Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Variance % Variance

Ratings and Planning (1)

$ 127,300 71.5 % $ 139,499 70.0 % $ (12,199) (8.7) %

Analytics and Optimization (1)

32,395 18.2 % 38,751 19.5 % (6,356) (16.4) %

Movies Reporting and Analytics 18,399 10.3 % 20,932 10.5 % (2,533) (12.1) %

Total revenues $ 178,094 100.0 % $ 199,182 100.0 % $ (21,088) (10.6) %

The impact was not material to either solution group.

Revenues decreased by $21.1 million, or 10.6%, for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Ratings and Planning revenue decreased by $12.2 million in the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

The decrease was largely driven by lower revenue from our syndicated digital products due in part to the COVID-19 pandemic.

While retention of syndicated digital enterprise customers remained high, revenue from our syndicated digital products represented 49% and 51% of our Ratings and Planning revenue for the six months ended June 30, 2020 and 2019, respectively.

TV revenues were lower as a result of the effects of consolidation of certain customers.

The decrease was partially offset by increases from our new partnership with LiveRamp, additional deliveries of addressable TV solutions, and the impact of new Local TV business entered into in 2019.

Cross-platform revenues were lower due to fewer customer deliveries.

Analytics and Optimization revenue decreased by $6.4 million in the six months ended June 30, 2020 as compared to the six months ended June 30, 2019, due to lower sales and deliveries across all products in this solution group, due in part to the COVID-19 pandemic, in the first six months of 2020.

These declines were partially offset by approximately $1.0 million in revenue from a one-time recovery of revenue-sharing fees pertaining to one of our lift products.

Movies Reporting and Analytics revenue decreased by $2.5 million in the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Revenue was impacted by some smaller customers under short-term contracts pausing service in connection with theater closures.

We expect theater closures to continue affecting movies revenue for the foreseeable future.

During the quarter ended June 30, 2020, we signed or renewed contracts with eight significant customers, including three major domestic studios and one international studio.

However, the uncertainty around theater re-openings delayed the renewals of several customers.

Cost of Revenues

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Additionally, cost of revenues includes allocated overhead, lease expense and other facilities-related costs.

Cost of revenues for the three months ended March 31, 2020 and 2019 are as follows:

Three Months Ended March 31,

(In thousands)

Cost of revenues for the three months ended June 30, 2020 and 2019 were as follows:

Three Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue

$ Change % Change

Data costs $ 15,459 17.5 % $ 16,737 17.3 % $ (1,278) (7.6) %

Employee costs 9,862 11.1 % 14,137 14.6 % (4,275) (30.2) %

Systems and bandwidth costs 6,034 6.8 % 5,495 5.7 % 539 9.8 %

Panel costs 4,832 5.5 % 4,884 5.0 % (52) (1.1) %

Lease expense and depreciation 4,187 4.7 % 3,853 4.0 % 334 8.7 %

Sample and survey costs 1,421 1.6 % 1,489 1.5 % (68) (4.6) %

Technology 1,416 1.6 % 1,444 1.5 % (28) (1.9) %

Professional fees 747 0.8 % 1,920 2.0 % (1,173) (61.1) %

Royalties and resellers 382 0.4 % 802 0.8 % (420) (52.4) %

Other 609 0.7 % 1,233 1.3 % (624) (50.6) %

Total cost of revenues $ 44,949 50.8 % $ 51,994 53.7 % $ (7,045) (13.5) %

Cost of revenues decreased $7.6 million , or 14.2% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 .

The decrease was largely attributable to decreases in employee costs, professional fees, sample and survey costs, and data costs, offset by an increase in lease and depreciation expense.

Cost of revenues decreased $7.0 million, or 13.5%, for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Employee costs decreased $4.3 million primarily due to a reduction in headcount.

Data costs decreased by $1.3 million primarily due to reclassification of costs to systems and bandwidth to better reflect the nature of services provided.

Professional fees decreased $1.2 million primarily due to a decrease in consulting services.

Cost of revenues for the six months ended June 30, 2020 and 2019 were as follows:

Six Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Data costs $ 30,726 17.3 % $ 32,798 16.5 % $ (2,072) (6.3) %

Employee costs 20,142 11.3 % 29,102 14.6 % (8,960) (30.8) %

Systems and bandwidth costs 11,792 6.6 % 10,776 5.4 % 1,016 9.4 %

Panel costs 9,948 5.6 % 10,322 5.2 % (374) (3.6) %

Lease expense and depreciation 8,134 4.6 % 7,264 3.6 % 870 12.0 %

Technology 2,863 1.6 % 2,916 1.5 % (53) (1.8) %

Sample and survey costs 2,677 1.5 % 3,938 2.0 % (1,261) (32.0) %

Professional fees 1,842 1.0 % 4,252 2.1 % (2,410) (56.7) %

Royalties and resellers 1,369 0.8 % 1,708 0.9 % (339) (19.8) %

Other 1,254 0.7 % 2,325 1.2 % (1,071) (46.1) %

Total cost of revenues $ 90,747 51.0 % $ 105,401 52.9 % $ (14,654) (13.9) %

Cost of revenues decreased $14.7 million, or 13.9%, for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Employee costs decreased $9.0 million primarily due to a reduction in headcount and a decrease in stock-based compensation expense.

Professional fees decreased $2.4 million primarily due to a decrease in consulting services.

Data costs decreased $2.1 million primarily due reclassification of costs to systems and bandwidth to better reflect the nature of the services provided.

Sample and survey costs decreased $1.3 million due to lower sales and deliveries of digital custom marketing solutions.

Data costs decreased $0.8 million primarily due to lower compliance audit costs.

Lease expense and depreciation increased $0.5 million primarily due to increases in depreciation related to capitalized internally developed software.

Selling and Marketing

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It also includes costs related to online and offline advertising, industry conferences, promotional materials, public relations, other sales and marketing programs and allocated overhead, which is comprised of lease expense and other facilities-related costs, and depreciation expense generated by general purpose equipment and software.

Selling and marketing expenses for the three months ended March 31, 2020 and 2019 are as follows:

Three Months Ended March 31,

(In thousands)

Selling and marketing expenses for the three months ended June 30, 2020 and 2019 were as follows:

Three Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Employee costs $ 13,322 15.0 % $ 18,591 19.2 % $ (5,269) (28.3) %

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Professional fees 557 0.6 % 754 0.8 % (197) (26.1) %

Travel — — % 880 0.9 % (880) (100.0) %

Other 845 1.0 % 1,505 1.6 % (660) (43.9) %

Total selling and marketing expenses $ 16,007 18.1 % $ 23,329 24.1 % $ (7,322) (31.4) %

Selling and marketing expenses decreased by $5.6 million , or 22.7% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 , largely attributable to a decrease in employee costs as a result of lower headcount and a decrease in stock-based compensation expense.

Selling and marketing expenses decreased by $7.3 million, or 31.4%, for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019, largely attributable to a decrease in employee costs as a result of lower headcount, a decrease in sales commissions, and lower travel costs resulting from the COVID-19 pandemic.

Selling and marketing expenses for the six months ended June 30, 2020 and 2019 were as follows:

Six Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Employee costs $ 28,482 16.0 % $ 38,954 19.6 % $ (10,472) (26.9) %

Lease expense and depreciation 2,670 1.5 % 3,205 1.6 % (535) (16.7) %

Professional fees 1,263 0.7 % 1,460 0.7 % (197) (13.5) %

Travel 622 0.3 % 1,704 0.9 % (1,082) (63.5) %

Other 2,183 1.2 % 2,846 1.4 % (663) (23.3) %

Total selling and marketing expenses $ 35,220 19.8 % $ 48,169 24.2 % $ (12,949) (26.9) %

Selling and marketing expenses decreased by $12.9 million, or 26.9%, for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Employee costs decreased $10.5 million as a result of lower headcount, a decrease in sales commissions, and a decrease in stock-based compensation expense.

Travel costs decreased $1.1 million primarily due to the reduction in travel resulting from the COVID-19 pandemic.

Research and Development

Research and development expenses include product development costs, consisting primarily of employee costs including salaries, benefits, stock-based compensation and other related costs for personnel associated with research and development activities, third-party expenses to develop new products and third-party data costs and allocated overhead, which is comprised of lease expense and other facilities-related costs, and depreciation expense related to general purpose equipment and software.

Research and development expenses for the three months ended March 31, 2020 and 2019 are as follows:

Three Months Ended March 31,

(In thousands)

Research and development expenses for the three months ended June 30, 2020 and 2019 were as follows:

Three Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Employee costs $ 7,323 8.3 % $ 13,018 13.4 % $ (5,695) (43.7) %

Technology 1,072 1.2 % 1,040 1.1 % 32 3.1 %

Lease expense and depreciation 1,037 1.2 % 1,498 1.5 % (461) (30.8) %

Professional fees 232 0.3 % 840 0.9 % (608) (72.4) %

Other 101 0.1 % 487 0.5 % (386) (79.3) %

Total research and development expenses $ 9,765 11.0 % $ 16,883 17.4 % $ (7,118) (42.2) %

Research and development expenses decreased by $8.1 million , or 44.4% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 .

The decrease was primarily attributable to a decrease in employee costs, professional fees and lease and depreciation expense.

Research and development expenses decreased by $7.1 million, or 42.2%, for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Employee costs decreased $5.7 million as a result of lower headcount and a decrease in stock-based compensation expense.

Professional fees decreased $1.0 million due to a decrease in consulting services.

Lease expense and depreciation decreased $0.4 million primarily as a result of a decrease in lease expense as we terminated various leases or executed certain subleases.

Professional fees decreased $0.6 million primarily due to a decrease in consulting services.

Research and development expenses for the six months ended June 30, 2020 and 2019 were as follows:

Six Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Employee costs $ 14,597 8.2 % $ 26,788 13.4 % $ (12,191) (45.5) %

Lease expense and depreciation 2,226 1.2 % 3,066 1.5 % (840) (27.4) %

Technology 2,149 1.2 % 2,119 1.1 % 30 1.4 %

Professional fees 621 0.3 % 2,209 1.1 % (1,588) (71.9) %

Other 308 0.2 % 917 0.5 % (609) (66.4) %

Total research and development expenses $ 19,901 11.2 % $ 35,099 17.6 % $ (15,198) (43.3) %

Research and development expenses decreased by $15.2 million, or 43.3%, for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Employee costs decreased $12.2 million as a result of lower headcount and a decrease in stock-based compensation expense.

Professional fees decreased $1.6 million primarily due to a decrease in consulting services.

General and Administrative

General and administrative expenses consist primarily of employee costs including salaries, benefits, stock-based compensation and other related costs, and related expenses for executive management, finance, human capital, legal and other administrative functions, as well as professional fees, overhead, including allocated overhead, which is comprised of lease expense and other facilities-related costs, depreciation expense related to general purpose equipment and software, and expenses incurred for other general corporate purposes.

General and administrative expenses for the three months ended March 31, 2020 and 2019 are as follows:

Three Months Ended March 31,

(In thousands)

General and administrative expenses for the three months ended June 30, 2020 and 2019 were as follows:

Three Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Employee costs $ 6,968 7.9 % $ 8,548 8.8 % $ (1,580) (18.5) %

Professional fees 2,754 3.1 % 4,770 4.9 % (2,016) (42.3) %

Bad debt expense 1,098 1.2 % 118 0.1 % 980 NM (1)

Technology 553 0.6 % 268 0.3 % 285 106.3 %

Lease expense and depreciation 526 0.6 % 651 0.7 % (125) (19.2) %

Other 1,842 2.1 % 2,577 2.7 % (735) (28.5) %

Total general and administrative expenses $ 13,741 15.5 % $ 16,932 17.5 % $ (3,191) (18.8) %

General and administrative expenses decreased by $4.0 million , or 20.5% , for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 .

The decrease was primarily attributable to a decrease in employee costs, offset by an increase in other costs.

A decrease of $4.7 million in employee costs was primarily due to a $3.3 million decrease in cash and stock compensation resulting from separation agreements for executives who exited in March 2019, as well as a result of lower headcount and a decrease in stock-based compensation expense.

Other costs increased $0.9 million primarily due to an increase in bad debt expense (due to increased reserves related to customer groups that we believe will be more impacted by the current economic environment) and an increase in our accounts receivable balance compared with March 31, 2019, offset by a decrease in transition services agreement costs which ended in January 2019.

The increase in our accounts receivable balance is related to the cash collection delays described under "Liquidity and Capital Resources" below;

this trend has continued into the second quarter of 2020.

(1) Not meaningful (NM).

General and administrative expenses decreased by $3.2 million, or 18.8%, for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Professional fees decreased $2.0 million primarily due to fees incurred in the three months ended June 30, 2019 related to the issuance of Common Stock and warrants in June 2019 and reduced audit fees in 2020 as compared to 2019.

Employee costs decreased $1.6 million primarily as a result of lower headcount and stock-based compensation in the second quarter of 2020 as compared with 2019.

These decreases were offset by an increase in bad debt expense of $1.0 million primarily due to increased reserves related to customers more impacted by the current economic environment.

General and administrative expenses for the six months ended June 30, 2020 and 2019 were as follows:

Six Months Ended June 30,

(In thousands) 2020 % of Revenue 2019 % of Revenue $ Change % Change

Employee costs $ 13,532 7.6 % $ 19,809 9.9 % $ (6,277) (31.7) %

Professional fees 7,365 4.1 % 9,559 4.8 % (2,194) (23.0) %

Bad debt expense 1,590 0.9 % — — % 1,590 NM (1)

Technology 1,116 0.6 % 412 0.2 % 704 170.9 %

Lease expense and depreciation 1,112 0.6 % 1,311 0.7 % (199) (15.2) %

Transition services agreement — — % 667 0.3 % (667) (100.0) %

Other 4,569 2.6 % 4,719 2.4 % (150) (3.2) %

Total general and administrative expenses $ 29,284 16.4 % $ 36,477 18.3 % $ (7,193) (19.7) %

(1) Not meaningful (NM).

General and administrative expenses decreased by $7.2 million, or 19.7%, for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

A decrease of $6.3 million in employee costs in 2020 compared to 2019 was primarily due to $3.3 million in severance costs for executives who exited in March 2019, as well as lower headcount and a decrease in stock-based compensation expense.

Professional fees decreased $2.2 million primarily due to fees related to the issuance of Common Stock and warrants in June 2019 and reduced audit fees in 2020 as compared to 2019.

These decreases were offset by an increase in bad debt expense of $1.6 million primarily due to increased reserves related to customers impacted by the current economic environment.

Investigation and Audit Related

We did not incur any expenses related to the previously disclosed Audit Committee investigation and prior-year audits during the three months ended March 31, 2020 .

The investigation and audit related expenses for the three months ended March 31, 2019 related to ongoing fees for the previously disclosed SEC investigation which was resolved in September 2019.

We did not incur any expenses related to the previously disclosed Audit Committee investigation and prior-year audits during the three and six months ended June 30, 2020.

The investigation and audit related expenses for the three and six months ended June 30, 2019 related to ongoing fees for the previously disclosed SEC investigation which was resolved in September 2019.

We do not expect to incur additional expenses for this matter.

Impairment of Goodwill and Intangible Asset

In the second quarter of 2019, as a result of a sustained decline in our stock price and market capitalization, changes in management, and lower revenue, among other factors, we performed an interim impairment review of our goodwill and long-lived assets.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $224.3 million impairment charge in the second quarter of 2019.

Also in the second quarter of 2019, changes in our projected revenue in certain non-U.S.

geographic markets due to the changing international competitive landscape, as well as significant reductions in international staffing during the quarter, resulted in a change in our long-term view of the viability of our strategic alliance intangible asset.

Our assessment yielded that the benefit of the strategic alliance would not be realized, and as a result we recorded a $17.3 million impairment charge in the second quarter of 2019.

There were no comparable charges in the three or six months ended June 30, 2020.

Impairment of Right-of-use and Long-lived Assets

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The impairment charge was driven by changes in our projected undiscounted cash flows for certain properties, primarily as a result of changes in the real estate market related to the COVID-19 pandemic, that led to an increase in the estimated marketing time and a reduction of expected receipts.

While this is a non-cash charge, it is expected to reduce depreciation expense by $0.2 million on an annualized basis starting in 2021.

For further information refer to Footnote 2 , Summary of Significant Accounting Policies .

Interest Expense, Net

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Interest expense relates to interest on our senior secured convertible notes ("Notes"), secured term note (the "Secured Term Note") and our finance leases.

During the three months ended March 31, 2020 and 2019 , we incurred interest expense, net of $8.8 million and $6.8 million , respectively.

The increase in interest expense, net was primarily driven by the interest rate reset feature on the Notes, which reset the interest rate from 6.0% to 12.0% in January 2019, and the issuance of the Secured Term Note in December 2019.

Other Income, Net

Other income, net represents income and expenses incurred that are generally not part of our regular operations.

The following is a summary of other income, net for the three months ended March 31, 2020 and 2019:

Three Months Ended March 31,

During the three months ended June 30, 2020 and 2019, we incurred interest expense, net of $8.9 million and $8.2 million, respectively, and $17.7 million and $15.0 million during the six months ended June 30, 2020 and 2019, respectively.

The increase in interest expense, net for the three months ended June 30, 2020 compared with the three months ended June 30, 2019 was primarily due to the issuance of the Secured Term Note in December 2019.

The increase in interest expense, net for the six months ended June 30, 2020 compared with the six months ended June 30, 2019 was primarily driven by the interest rate reset feature on the Notes, which reset the interest rate from 6.0% to 12.0% in January 2019, and the issuance of the Secured Term Note in December 2019.

Other Income (Expense), Net

Other income (expense), net represents income and expenses incurred that are generally not part of our regular operations.

The following is a summary of other income (expense), net for the three and six months ended June 30, 2020 and 2019:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2020 2019 2020 2019

Change in fair value of warrants liability

Change in fair value of financing derivatives $ 2,300 $ (3,000) $ 4,687 $ 1,100

Change in fair value of warrants liability (758) — 3,893 —

Change in fair value of investment in equity securities — (304) — (2,016)

Total other income, net

Other income, net for the three months ended March 31, 2020 was driven primarily by the gain from the changes in fair value of our financing derivatives and warrants liability.

Other income, net for the three months ended March 31, 2019 primarily relates to the gain from the changes in fair value of our financing derivatives, offset by loss related to the decline in the fair value of our investment in equity securities, which were disposed in 2019.

Gain from Foreign Currency Transactions

Other (65) 223 91 804

Total other income (expense), net $ 1,477 $ (3,081) $ 8,671 $ (112)

Other income, net for the three and six months ended June 30, 2020 was driven primarily by the gain from the changes in fair value of our financing derivatives offset by the change in fair value of our warrants liability.

Other expense, net for the three and six months ended June 30, 2019 primarily relates to gains and losses from the changes in fair value of our financing derivatives, and the loss due to the decline in the fair value of our investment in equity securities, which were disposed in 2019.

Loss from Foreign Currency Transactions

Our foreign currency transactions are recorded as a result of fluctuations in the exchange rate between the transactional currency and the functional currency of foreign subsidiary transactions.

Because our international currency exposures that relate to the translation to U.S.

Our international currency exposures that relate to the translation to U.S.

Dollars are in a net liability position and our international currency exposures that relate to the translation from U.S.

Dollars are in a net asset position, the strength of the U.S.

Dollar in the three months ended March 31, 2020 results in benefits for those positions when translated to U.S.

For the three months ended March 31, 2020 , the gain from foreign currency transactions was $0.8 million .

The gains were primarily driven by fluctuations in the Chilean Peso against the U.S.

Dollars are in a net asset position.

Dollar strengthened during the first quarter of 2020 which was offset by weakness of the U.S.

Dollar in the second quarter of 2020.

This resulted in losses for our positions when translated to U.S.

Dollars during the second quarter of 2020 and minimal losses for the first half of 2020.

For the three and six months ended June 30, 2020, the loss from foreign currency transactions was $0.9 million and $0.1 million, respectively.

The losses were primarily driven by fluctuations in the Chilean Peso against the U.S.

Dollar and Euro.

For the three months March 31, 2019 , the gain from foreign currency transactions was immaterial.

Benefit (Provision) for Income Taxes

For the three and six months ended June 30, 2019, the gain from foreign currency transactions was immaterial.

Benefit for Income Taxes

A valuation allowance has been established against our net U.S.

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As a result, our income tax position is primarily related to foreign tax activity.

During the three months ended March 31, 2020, we recorded an income tax benefit of $0.4 million , resulting in an effective tax rate of (3.1)% .

During the three months ended March 31, 2019, we recorded an income tax provision of $1.2 million , resulting in an effective tax rate of 4.4%.

During the three and six months ended June 30, 2020, we recorded an income tax benefit of $0.7 million and $1.1 million, respectively, resulting in an effective tax rate of (6.0)% and (4.4)%, respectively.

During the three and six months ended June 30, 2019, we recorded an income tax benefit of $4.5 million and $3.3 million, respectively, resulting in an effective tax rate of (1.6)% and (1.1)%, respectively.

These effective tax rates differ from the U.S.

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The COVID-19 pandemic has a global reach, and many countries are introducing measures that provide relief to taxpayers in a variety of ways.

We are currently evaluating these measures, including the CARES Act in the United States, but these did not have a material impact on our income tax provision for the three months ended March 31, 2020.

We are currently evaluating these measures, including the CARES Act in the United States, but these did not have an impact on our income tax provision for the three and six months ended June 30, 2020.

Recent Accounting Pronouncements

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The limitations of such non-GAAP measures include the following:

Adjusted EBITDA does not reflect tax or interest payments that represent a reduction in cash available to us (or, in the

case of interest paid in Common Stock, that represent additional dilution to our existing stockholders);

• Adjusted EBITDA does not reflect tax or interest payments that represent a reduction in cash available to us (or, in the case of interest paid in Common Stock, that represent additional dilution to our existing stockholders);

• Depreciation and amortization are non-cash charges and the assets being depreciated may have to be replaced in the future.

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The following table presents a reconciliation of net loss (GAAP) to Adjusted EBITDA for each of the periods identified:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2020 2019 2020 2019

Net loss (GAAP) $ (10,401) $ (279,533) $ (23,585) $ (307,047)

Income tax (benefit) provision

Interest expense, net 8,856 8,242 17,702 15,001

Amortization expense of finance leases

Amortization of intangible assets 6,846 8,076 13,764 16,181

Depreciation 3,404 3,005 6,788 6,111

Amortization expense of finance leases 394 787 784 1,361

Income tax benefit (664) (4,463) (1,079) (3,292)

EBITDA 8,435 (263,886) 14,374 (271,685)

Stock-based compensation expense 2,346 4,304 5,004 11,257

Investigation and audit related — 2,354 — 3,196

Settlement of certain litigation, net — 5,000 — 5,000

Restructuring — 2,949 — 2,879

Impairment of goodwill — 224,272 — 224,272

Impairment of intangible asset — 17,308 — 17,308

Private placement issuance cost — 1,154 — 1,154

Impairment of right-of-use and long-lived assets — — 4,671 —

Other income, net (1)

Other (income) expense, net (1)

(1,542) 3,304 (8,434) 916

Adjusted EBITDA $ 9,239 $ (3,241) $ 15,615 $ (5,703)

(1) Adjustments to other income, net reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income, net and certain legal expenses defined by the Notes and classified as general and administrative expenses on our Condensed Consolidated Statements of Operations and Comprehensive Loss.

(1) Adjustments to other (income) expense, net reflect non-cash changes in the fair value of financing derivatives, warrants liability and equity securities investment included in other income (expense), net and certain legal expenses defined by the Notes and classified as general and administrative expenses on our Condensed Consolidated Statements of Operations and Comprehensive Loss.

We sold our investment in equity securities in 2019.

The following table presents a reconciliation of net loss (GAAP) to non-GAAP net loss for each of the periods identified:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2020 2019 2020 2019

Net loss (GAAP) $ (10,401) $ (279,533) $ (23,585) $ (307,047)

Amortization of intangible assets 6,846 8,076 13,764 16,181

Stock-based compensation expense 2,346 4,304 5,004 11,257

Investigation and audit related — 2,354 — 3,196

Amortization of intangible assets

Impairment of right-of-use and long-lived assets — — 4,671 —

Settlement of certain litigation, net — 5,000 — 5,000

Restructuring — 2,949 — 2,879

Other income, net (1)

Impairment of goodwill — 224,272 — 224,272

Impairment of intangible asset — 17,308 — 17,308

Private placement issuance cost — 1,154 — 1,154

Other (income) expense, net (1)

(1,542) 3,304 (8,434) 916

Non-GAAP net loss $ (2,751) $ (10,812) $ (8,580) $ (24,884)

We sold our investment in equity securities in 2019.

Liquidity and Capital Resources

The following table summarizes our cash flows:

Three Months Ended March 31,

The following table summarizes our cash flows for each of the periods identified:

Six Months Ended June 30,

(In thousands) 2020 2019

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Net cash used in investing activities (7,881) (6,807)

Net cash used in financing activities

Net cash (used in) provided by financing activities (1,046) 21,048

Effect of exchange rate changes on cash, cash equivalents and restricted cash (544) 91

Net decrease in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash (11,263) 3,628

Our principal uses of cash historically consisted of cash paid for payroll and other operating expenses, payments related to investments in equipment, primarily to support our consumer panels and technical infrastructure required to deliver our products and services and support our customers, and service of our debt and lease facilities.

In prior years, we also incurred significant professional fees relating to our Audit Committee's investigation, subsequent audit and compliance efforts, as well as management changes and various legal proceedings.

As of March 31, 2020 , our principal sources of liquidity consisted of cash, cash equivalents and restricted cash totaling $56.6 million , including $19.7 million in restricted cash.

As of June 30, 2020, our principal sources of liquidity consisted of cash, cash equivalents and restricted cash totaling $55.5 million, including $19.6 million in restricted cash.

Our principal sources of liquidity have historically been our cash and cash equivalents, as well as cash flow generated from our operations.

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See "Secured Term Note" below.

In January 2020 and April 2020, we paid our quarterly accrued interest liability on the Notes in cash;

the interest amount was accrued in short term liabilities as of December 31, 2019 and March 31, 2020, respectively.

In January 2020, April 2020 and July 2020, we paid our quarterly accrued interest liability on the Notes in cash;

the interest amount was accrued in short term liabilities as of December 31, 2019, March 31, 2020 and June 30, 2020, respectively.

The COVID-19 pandemic and related government mandates and restrictions have had a significant impact on the media, advertising and entertainment industries in which we operate.

While to date, the COVID-19 pandemic has not had a severe direct impact on our performance, customer payment delays and requests to modify contractual payment terms have negatively impacted our liquidity and cash flows to some extent and are expected to have a more significant impact in the future.

In the second quarter of 2020, we have continued to see delays in cash collections, leading our management team to take actions to mitigate the near-term impact on our liquidity.

These actions have included freezing hiring, exiting non-critical consultants and contractors, terminating or negotiating reductions in vendor agreements and leases, and reducing certain travel, marketing, recruiting and other corporate

activities not deemed critical to the business in the current environment.

Our management team is analyzing a range of scenarios for the business that are contingent on the duration and magnitude of the COVID-19 pandemic and its effects, and we will consider additional actions as warranted in the best interests of our employees, customers, partners and stockholders.

To date, the COVID-19 pandemic has had some impact on our business, including with respect to the timing of executing new or renewal contracts, the impact of closed movie theaters on our customers, customer payment delays and requests to modify contractual payment terms.

These conditions have negatively impacted our liquidity and cash flows to some extent and are expected to continue to have an impact in future periods.

In the second quarter of 2020, we continued to see delays in cash collections, leading our management team to take actions to mitigate the near-term impact on our liquidity.

These actions included freezing hiring, exiting non-critical consultants and contractors, terminating or negotiating reductions in vendor agreements and leases, reducing compensation for our senior leadership team and board of directors, and reducing certain travel, marketing, recruiting and other corporate activities not deemed critical to the business in the current environment.

In addition to its impact on operations, the spread of COVID-19 has led to disruption and volatility in global capital and credit markets.

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The CARES Act, among other things, includes tax provisions for the deferral of certain employer payroll tax liabilities, refundable employee retention credits, rollbacks of Tax Cuts and Jobs Act ("TCJA") limitations on net operating losses, the acceleration of alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

To preserve our cash balances, we began deferring certain payroll taxes starting in April 2020, as permitted by the CARES Act.

In addition, we plan to claim the refundable employee retention credit created by the CARES Act during the second quarter of 2020.

We began deferring certain payroll taxes starting in April 2020, as permitted by the CARES Act.

In addition, we began claiming the refundable employee retention credit created by the CARES Act during 2020.

We continue to assess the effect of the CARES Act and additional legislation and government guidance related to the COVID-19 pandemic.

Our liquidity could be negatively affected by a decrease in demand for our products and services or by additional losses from operations, as well as payment of expenses incurred in prior periods in addition to current period expenses.

It is possible that changes in consumer behavior will impact our customers' operations, and thus their demand for our services and ability to pay, even after the spread of COVID-19 has been contained and businesses are permitted to reopen.

While we are taking actions (as described above) to mitigate the impact of COVID-19, further reduce operating costs and improve our working capital balance, these steps may not be successful or adequate to offset declines.

If our efforts to reduce costs are not sufficient, or if customer demand or cash collection efforts are further impacted by the COVID-19 pandemic, we may not be able to maintain our compliance with the affirmative and negative covenants in our Notes and Secured Term Note or to meet our financial obligations to our vendors.

It is possible that long-term changes in consumer behavior will impact our customers' operations, and thus their demand for our services and ability to pay, even after the spread of COVID-19 has been contained and businesses are permitted to resume normal operations.

While we are taking actions (as described above) to mitigate the impact of COVID-19, control costs and improve our working capital balance, these steps may not be successful or adequate to offset future declines.

If our efforts to control costs are not sufficient, or if customer demand or cash collection efforts are further impacted by the COVID-19 pandemic, we may not be able to maintain our compliance with the affirmative and negative covenants in our Notes and Secured Term Note or to meet our financial obligations to our vendors or others.

Our liquidity could be significantly affected if we are unable to maintain compliance with the covenants in our Notes and Secured Term Note, including the minimum cash balance requirements described in Footnote 4 , Long-term Debt, to our Condensed Consolidated Financial Statements.

If we fail to comply with our covenants, we could be required to redeem the Notes and the Secured Term Note at a premium.

As of March 31, 2020, there was $217.0 million outstanding under the Notes and the Secured Term Note.

As of June 30, 2020, there was $217.0 million outstanding under the Notes and the Secured Term Note.

The source of funds for any redemption of our debt would be our available cash and other financing, to the extent available.

Based on our current plans, including the cost-reduction initiatives described above and other actions within management's control, we do not anticipate a breach of these covenants that would result in an event of default under the Notes or the Secured Term Note;

however, subsequent to March 31, 2020, the holders of the Notes have questioned our compliance with the minimum cash balance requirements therein.

Based on our current plans, including continued cost management and other actions within management's control, we do not anticipate a breach of these covenants that would result in an event of default under the Notes or the Secured Term Note;

however, during the quarter ended June 30, 2020, the holders of the Notes questioned our compliance with the minimum cash balance requirements therein.

As noted, any breach of covenants under the Notes could have a material impact on our liquidity.

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Restricted cash represents our requirement to collateralize the Secured Term Note, outstanding letters of credit, international payroll processing exposures and lines of credit related to certain of our corporate credit card programs and international payroll processing exposures.

As of March 31, 2020 and December 31, 2019 , we had $19.7 million and $20.2 million of restricted cash, respectively.

As of June 30, 2020 and December 31, 2019, we had $19.6 million and $20.2 million of restricted cash, respectively.

Letters of Credit

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to issue standby letters of credit on our behalf.

As of March 31, 2020 , $3.3 million in letters of credit are outstanding and are cash collateralized under the Security Agreement with Wells Fargo Bank, N.A.

As of June 30, 2020, $3.3 million in letters of credit are outstanding and are cash collateralized under the Security Agreement with Wells Fargo Bank, N.A.

Issuance and Sale of Common Stock and Warrants

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In January 2020, the Series B-1 Warrants expired unexercised.

On August 3, 2020, the Series B-2 Warrants expired unexercised.

For additional information on the Private Placement, refer to Footnote 5 , Stockholders' Equity .

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On May 17, 2018, we issued and sold to Starboard $50.0 million of Notes in exchange for $15.0 million in cash and 1,400,000 shares of Common Stock.

Later in 2018 we issued an aggregate of $4.0 million in Notes to Starboard, bringing the total balance of the Notes as of March 31, 2020 to $204.0 million .

On November 6, 2019, we entered into an amendment with Starboard that prescribed the terms under which we may redeem the Notes for cash in the event of a qualifying change of control, as defined in the amendment.

The Notes contain certain affirmative and restrictive covenants with which we must comply, including covenants with respect to (i) limitations on additional indebtedness, (ii) limitations on liens, (iii) limitations on certain payments, (iv) maintenance of certain minimum cash balances ( $40.0 million effective August 6, 2019) and (v) the timely filing of certain disclosures with the SEC.

We are in compliance with the Notes covenants as of March 31, 2020 , inclusive of our restricted cash balances.

Later in 2018 we issued an aggregate of $4.0 million in Notes to Starboard, bringing the total balance of the Notes as of June 30, 2020 to $204.0 million.

The Notes contain certain affirmative and restrictive covenants with which we must comply, including covenants with respect to (i) limitations on additional indebtedness, (ii) limitations on liens, (iii) limitations on certain payments, (iv) maintenance of certain minimum cash balances (currently $40.0 million) and (v) the timely filing of certain disclosures with the SEC.

We are in compliance with the Notes covenants as of June 30, 2020, inclusive of our restricted cash balances.

As discussed above, any breach of these covenants could have a significant negative effect on our liquidity.

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must comply, including (i) maintenance of a minimum cash collateral balance of $14.8 million, (ii) provision of certain financial statements, (iii) limitations on additional indebtedness and liens, (iv) limitations on repayment of debt, (v) limitations on repurchase of stock, and (vi) limitations on disposition of assets.

is in compliance with the Secured Term Note covenants as of March 31, 2020.

is in compliance with the Secured Term Note covenants as of June 30, 2020.

For additional information on the Notes, refer to Footnote 4 , Long-term Debt .

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depreciation, non-cash operating lease expense, amortization expense of finance leases and intangible assets, impairment of right-of-use assets, stock-based compensation, deferred tax provision, change in the fair value of financing derivatives, warrants liability and equity securities, accretion of debt discount, and amortization of deferred financing costs.

Net cash used in operating activities for the three months ended March 31, 2020 was $4.8 million compared to net cash used of $1.6 million for the three months ended March 31, 2019 .

The increase in cash used in operating activities during the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 was primarily attributable to an increase in interest paid on the Notes by $3.1 million due to an increase in the interest rate from 6.0% to 12.0% on January 30, 2019, as well as a net decrease in operating assets and liabilities of $0.5 million for the three months ended March 31, 2020 as compared to a net increase of $3.2 million for the three months ended March 31, 2019 .The shift from a net decrease in operating assets and liabilities to a net

increase relates to higher accounts receivable balances as customer payments were delayed into the second quarter of 2020, as well as payments of our accounts payable balances from prior year.

Net cash used in operating activities for the six months ended June 30, 2020 was $1.8 million compared to net cash used of $10.7 million for the six months ended June 30, 2019.

The decrease in cash used in operating activities during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019 was primarily attributable to a decrease in the net loss, offset by an increase in cash interest paid on the Notes in 2020 of $9.2 million, as well as a net decrease in operating assets and liabilities of $9.9 million for the six months ended June 30, 2020 as compared to a net increase of $16.9 million for the six months ended June 30, 2019.

The shift from a net increase in operating assets and liabilities to a net decrease is primarily due to payments of our accounts payable and accrual balances from the prior year during the six months ended June 30, 2020.

Included in our decrease of operating assets and liabilities is an increase in contract liability related to an upfront payment resulting from a new contract, which increased our cash balance by $9.4 million during the second quarter of 2020.

Investing Activities

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The extent of these investments will be affected by our ability to expand relationships with existing customers, grow our customer base and introduce new digital formats, as well as constraints on cash expenditures in the current economic environment.

Net cash used in investing activities for the three months ended March 31, 2020 was $3.9 million compared to net cash used in investing activities of $4.2 million for the three months ended March 31, 2019 .

This decrease in cash used in investing activities was attributable to a $1.8 million decrease in purchases of property and equipment and a decrease of $0.7 million from the sale of investments, offset by an increase of $0.8 million in capitalized internally developed software.

Net cash used in investing activities for the six months ended June 30, 2020 was $7.9 million compared to net cash used in investing activities of $6.8 million for the six months ended June 30, 2019.

This increase in cash used in investing activities was attributable to an increase of $2.2 million in payments for capitalized internally developed software and a $0.7 million decline in receipts from the sale of an investment in 2019 that did not recur in 2020, partially offset by a $1.8 million decrease in purchases of property and equipment in 2020 compared with 2019.

Financing Activities

Net cash used in financing activities during the three months ended March 31, 2020 was $0.5 million compared to net cash used in financing activities of $1.5 million during the three months ended March 31, 2019 .

The decrease in cash used by financing activities was attributable to a decrease of $1.1 million from the net settlement of equity awards for tax withholdings, a decrease of $1.0 million in principal payment on finance leases and software license arrangements and a decrease of $1.2 million from proceeds received from the exercise of stock options.

Net cash used in financing activities during the six months ended June 30, 2020 was $1.0 million compared to net cash provided by financing activities of $21.0 million during the six months ended June 30, 2019.

The shift from cash provided by financing activities to cash used in financing activities was largely due to cash proceeds of $19.9 million from the sale of shares of Common Stock and warrants in the Private Placement during 2019 and cash proceeds of $4.3 million from the sale-leaseback transaction during 2019.

Contractual Payment Obligations

We are subject to certain contractual arrangements that are long-term in nature.

The information set forth below summarizes our contractual obligations as of March 31, 2020 that are fixed and determinable.

(In thousands)

The information set forth below summarizes our contractual obligations as of June 30, 2020 that are fixed and determinable.

(In thousands) Total Less Than

1 Year 1-3 Years 3-5

Long-term debt obligations (1)

$ 217,000 $ — $ 217,000 $ — $ —

Unconditional purchase obligations with MVPDs (2)

93,078 36,299 47,518 9,261 —

Operating lease obligations (3)

69,198 6,360 21,517 18,597 22,724

Finance lease obligations (4)

4,070 1,180 2,876 14 —

Sale-leaseback financing transaction (5)

2,545 2,545 — — —

Other long-term obligations (6)

9,206 5,838 3,368 — —

Total $ 395,097 $ 52,222 $ 292,279 $ 27,872 $ 22,724

(1) In 2018, we entered into several agreements with Starboard whereby we issued Notes in exchange for cash and shares of Common Stock.

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If these arrangements are canceled by the MVPDs, we have the ability to terminate contracts with our end customers.

Commitments reflected herein relate to future data obligations after March 31, 2020 .

(3) Operating lease obligations represent future lease commitments, primarily for real estate leases, accounted for under ASC 842.

(4) Finance lease obligations represent future lease commitments, primarily for equipment leases, accounted for under ASC 842.

Commitments reflected herein relate to future data obligations after June 30, 2020.

(3) Operating lease obligations represent future lease commitments, primarily for real estate leases, accounted for under ASC 842, Leases.

(4) Finance lease obligations represent future lease commitments, primarily for equipment leases, accounted for under ASC 842, Leases.

(5) We entered into a sale-leaseback arrangement with a vendor in June 2019.

See Footnote 4 , Long-term Debt for more information.

(6) Other long-term obligations include future commitments for our data center arrangements, software licenses and the right to access cloud-based solutions under long-term contracts.

(6) Other long-term obligations include long-term contracts for the acquisition of viewing data from non-MVPD partners, the right to access cloud-based solutions, and future commitments for our data center arrangements.

Future Capital Requirements

Our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors, including the timing of cash collections from our customers, trade payables, service of our debt and lease facilities, and expenses from ongoing compliance efforts and legal proceedings.

As discussed above, we have experienced delays in customer payments and requests to modify contractual payment terms in connection with the COVID-19 pandemic and related government mandates and restrictions.

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The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the amounts reported in our Condensed Consolidated Financial Statements and the accompanying Notes to Condensed Consolidated Financial Statements.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, including (with respect to the three months ended March 31, 2020) the ongoing and potential impacts of the COVID-19 pandemic and related government mandates and restrictions.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, including (with respect to the three and six months ended June 30, 2020) the ongoing and potential impacts of the COVID-19 pandemic and related government mandates and restrictions.

Actual results may differ from these estimates.

Our critical accounting policies are those that are both material to the presentation of our financial condition and results of operations and require management's most subjective and complex judgments.

Other than our accounting policies related to the impairment charges recorded for right-of-use and long-lived assets (which relate to the impact of COVID-19 on local real estate markets), there have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2020 as compared to the critical accounting policies and estimates disclosed in our 2019 10-K .

Impairment of Right-of-use and Long-lived Assets

We apply the provisions of Accounting Standards Codification ("ASC") 360, Property, Plant and Equipment , to determine whether our right-of use ("ROU") and related long-lived assets may be impaired.

Other than our accounting policies related to the impairment charges recorded for right-of-use and long-lived assets (which relate to the impact of the COVID-19 pandemic on local real estate markets), there have been no material changes to our critical accounting policies and estimates during the three and six months ended June 30, 2020 as compared to the critical accounting policies and estimates disclosed in our 2019 10-K .

Impairment of Right-of-use ("ROU") and Long-lived Assets

We apply the provisions of Accounting Standards Codification ("ASC") 360, Property, Plant and Equipment , to determine whether our ROU and related long-lived assets may be impaired.

We evaluate our ROU and long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis