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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1996 COMMISSION FILE NUMBER: 001-12223
UNIVISION COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE NO. 95-4398884
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION)
UNIVISION COMMUNICATIONS INC.
1999 AVENUE OF THE STARS, SUITE 3050
LOS ANGELES, CALIFORNIA 90067
TEL: (310) 556-7676
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days YES NO X .
----- -----
There were 42,612,180 shares of Common Stock, $.01 par value, outstanding as of
October 31, 1996.
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
PART I - FINANCIAL INFORMATION:
Financial Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 1. Consolidated Financial Statements
Condensed Consolidated Statements of Operations for the three and nine
months ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Condensed Consolidated Balance Sheets at September 30, 1996 and December 31, 1995 . . . . . . . . . . . 6
Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Notes to the Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 14
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 6. Exhibits and Reports on form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FINANCIAL TERMS
The following terms are used in this Form 10-Q to refer to the companies and
operations indicated:
"Acquisition" means the December 1992 acquisition of the Network and UTG
(excluding the Chicago and Houston O&Os) by Perenchio, Televisa and Venevision.
"Affiliated Stations" means the nine full-power and fourteen low-power
television stations with which the Company has Affiliation Agreements.
"Affiliation Agreements" means the affiliation agreements between the Company
and each Affiliated Station and Cable Affiliate.
"Broadcast Affiliates" means the O&Os and the Affiliated Stations.
"Broadcast Cashflow" means earnings before corporate charges, interest, taxes,
depreciation and amortization.
"Cable Affiliates" means the approximately 740 cable television systems with
which Univision has Affiliation Agreements. These cable television systems
retransmit the Network satellite signal and are not located in DMAs where the
Company has full-power Broadcast Affiliates.
"Combined Net Time Sales" means time sales of both UTG and the Network from
broadcasting, including barter and trade and television subscription revenues,
less advertising commissions, certain special event revenues, music license
fees, outside affiliate compensation and taxes other than withholding taxes.
"EBITDA" means earnings before interest, taxes, depreciation and amortization.
"Entravision" means Entravision Communications, Inc., L.L.C., which owns seven
of the Company's Affiliated Stations.
"Galavision" means the Galavision Spanish-language general entertainment basic
cable network owned by the Company effective as of July 1, 1996.
"Hispanic" means all persons in the U.S. of Hispanic descent or origin.
"Hispanic Households" means all U.S. households with a head of household who is
of Hispanic descent or origin, regardless of the language spoken in the
household.
"Network" or "UNLP" means the Univision Spanish-language television network
owned by the Company and one of the Company's subsidiaries; the Network is a
partnership that prior to the Reorganization was controlled by the Principal
Stockholders.
"New Bank Facility" - The Company's new credit agreement dated September 26,
1996, which provides for aggregate commitments of up to $600 million and
imposes financial and other restrictions on the Company.
"Old Bank Facility" means UTG's old bank credit agreement that was terminated
as part of the Reorganization.
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"O&Os" means the eleven full-power and seven low-power television stations
owned and operated by the Company.
"Offering" means the sale of shares of Class A Common Stock by the Company in
its initial public offering consummated on October 2, 1996.
"PCI" means Perenchio Communications, Inc. which changed its name to Univision
Communications Inc. in June 1996.
"Perenchio" means A. Jerrold Perenchio and his affiliates.
"Principal Stockholders" means Perenchio, Televisa and Venevision.
"Program Cost Sharing Agreement" means the cost sharing agreement among the
Network, Televisa and Venevision (which was terminated as part of the
Reorganization).
"Program License Agreements" means the amended and restated program license
agreements between the Company and Televisa and the Company and Venevision
(which became effective as part of the Reorganization).
"PTIH" means PTI Holdings, Inc., a subsidiary of the Company.
"Reorganization" means the reorganization of the Company immediately prior to
the closing of the Offering.
"Sponsor Loans" means the loans made to the Company by Televisa and Venevision
each quarter since the Acquisition.
"Televisa" means Grupo Televisa, S.A. and its affiliates.
"UCI" or the "Company" means Univision Communications Inc. and its wholly-owned
subsidiaries, after giving effect to the Reorganization.
"Univision Affiliates" means the Broadcast Affiliates and the Cable Affiliates.
"UTG" means Univision Television Group, Inc., the Company's subsidiary that
owns and operates the O&Os.
"UNHP" means The Univision Network Holding Limited Partnership, the entity that
owned substantially all of the partnership interests in the Network prior to
the Reorganization and that was liquidated as part of the Reorganization.
"Venevision" means Corporacion Venezolana de Television, C.A. and its
affiliates.
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FINANCIAL INTRODUCTION
UCI's initial public offering of its Class A Common Stock was declared
effective on September 26, 1996. UCI also entered into a New Bank Facility on
September 26, 1996.
UCI did not complete all of the transactions of the Reorganization until
October 2, 1996 (see Note 5). The historical results of UCI in this document
include the operations of UTG and exclude the operations of the Network since
the Network was acquired after September 30, 1996. Pro forma financial
statements and management's discussion and analysis of financial condition and
results of operations have been provided in Part II (Item 5) of this document
which reflects the combined operations of the Network and UTG as if the
Network were acquired on January 1, 1995.
The businesses of UTG and the Network prior to the Reorganization were under
separate management and ownership structures and were operated as two distinct
businesses. Notwithstanding this separation, the business operations of UTG and
the Network remained substantially dependent on one another. UTG is dependent
on the Network for programming and advertising sales support while UTG
represents 78% of the Network's total coverage of Hispanic Households in the
U.S.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial statements. The interim financial statements are unaudited
but include all adjustments, which are of a normal recurring nature, that
management considers necessary to fairly present the financial position and the
results of operations for such periods. Results of operations of interim
periods are not necessarily indicative of results for a full year. These
financial statements should be read in conjunction with the audited
consolidated financial statements of UCI (formerly PCI), and UNHP included in
the Company's Form S-1.
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PART 1, ITEM 1.
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ----------------------------
1996 1995 1996 1995
---------------------------- ----------------------------
(Restated) (Restated)
<S> <C> <C> <C> <C>
Net revenues $ 48,462 $ 42,777 $ 139,882 $ 125,056
Direct operating expenses 8,324 7,527 24,600 22,643
Selling, general and administrative expenses 13,942 13,320 44,641 39,063
Corporate charges 2,566 1,798 6,050 4,863
Depreciation and amortization 8,909 8,417 26,057 24,954
----------- ----------- ----------- -----------
Operating income 14,721 11,715 38,534 33,533
Interest expense 11,906 10,251 32,206 30,934
Amortization of deferred financing costs 843 949 2,592 3,269
Non recurring expense of acquired station - 1,750 - 1,750
Minority interest in net income (loss)
of consolidated subsidiary (2,125) 36 (1,851) 525
---------- ----------- ---------- -----------
Income (loss) before taxes and extraordinary
loss on extinguishment of debt 4,097 (1,271) 5,587 (2,945)
Provision for income taxes 1,639 - 2,235 -
----------- ----------- ----------- -----------
Income (loss) before extraordinary loss on
extinguishment of debt 2,458 (1,271) 3,352 (2,945)
Extraordinary loss on extinguishment of debt
(net of tax benefit of $1,615 and $2,151 in the
three and nine month periods ended 9/30/96) (10,913) (433) (11,558) (433)
---------- ---------- ---------- ----------
Net loss $ (8,455) $ (1,704) $ (8,206) $ (3,378)
========== ========== ========== ==========
Income (loss) per share before extraordinary loss $ 0.15 $ (0.56) $ 0.20 $ (1.29)
Extraordinary loss per share (0.66) (0.19) (0.69) (0.19)
----------- ----------- ----------- -----------
Net loss per share $ (0.51) $ (0.75) $ (0.49) $ (1.48)
=========== =========== =========== ===========
Weighted average common shares outstanding 16,640,056 2,280,105 16,640,056 2,280,105
=========== =========== ========== ===========
</TABLE>
See notes to condensed consolidated financial statements
5
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ----------------
<S> <C> <C>
ASSETS (Unaudited) (Restated)
Current assets:
Cash and cash equivalents $ 93,462 $ 14,029
Trade accounts receivable, less allowance for doubtful accounts
of $4,761 in 1996 and $3,853 in 1995 33,850 37,951
Due from the Network 43,468 -
Prepaid expenses and other 5,393 3,043
----------- -----------
Total current assets 176,173 55,023
Property and equipment, less accumulated depreciation
of $18,707 in 1996 and $13,888 in 1995 28,886 25,557
Intangible assets, less accumulated amortization
of $107,662 in 1996 and $86,498 in 1995 428,663 449,383
Deferred financing costs, less accumulated amortization
of $ - 0 - in 1996 and $13,597 in 1995 8,645 12,193
Deferred income taxes 2,000 2,000
Other assets 2,441 1,746
----------- -----------
Total assets $ 646,808 $ 545,902
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------------
<C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT (Unaudited) (Restated)
Current liabilities:
Accounts payable and accrued liabilities $ 35,982 $ 41,266
Due to the Network - 64,505
Accrued interest - 6,281
Program rights obligations 677 1,899
Current portion of long-term debt 30,311 17,313
----------- -----------
Total current liabilities 66,970 131,264
Bank debt and other 370,760 150,022
Senior Subordinated Notes - 92,050
Junior Subordinated Notes 8,487 7,768
Other long-term liabilities 1,424 1,301
Program rights obligations, net of current portion 416 753
Related party debt 120,701 112,381
Sponsor Loans, including accrued interest 148,941 108,361
Minority interest 17,208 19,059
Stockholders' deficit:
Common Stock, $.01 par value (47,660,000 shares
authorized and 2,280,105 shares issued and outstanding) 23 23
Preferred Stock, $.01 par value (108,000 shares
authorized and 90,000 shares issued and outstanding) 1 1
Accumulated deficit (88,123) (77,081)
----------- -----------
Total stockholders' deficit (88,099) (77,057)
----------- -----------
Total liabilities and stockholders' deficit $ 646,808 $ 545,902
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
7
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
------------- -------------
(Restated)
<S> <C> <C>
Net loss $ (8,206) $ (3,378)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation 4,893 3,775
Amortization of intangible assets and deferred financing costs 23,756 24,448
Accretion of interest 13,477 9,056
Non recurring expense of acquired station - 1,750
Minority interest (1,851) 525
Extraordinary loss on extinguishment of debt 13,709 433
Changes in assets and liabilities:
Accounts receivable 4,101 250
Due to the Network (18,084) (20,392)
Prepaid and other assets (3,046) 1,314
Accrued interest portion of long-term debt (5,284) (3,843)
Accounts payable and accrued liabilities (6,281) (2,418)
Obligations for program rights (2,003) (3,915)
Other, net 122 811
------------ -------------
Net cash provided by operating activities 15,303 8,416
Cash flow from investing activities:
Acquisition of property and equipment (8,236) (7,677)
------------ ------------
Net cash used in investing activities (8,236) (7,677)
Cash flow from financing activities:
Proceeds from issuance of long-term debt 436,000 39,000
Repayments of long-term debt (202,250) (69,543)
Proceeds from Sponsor Loans 38,381 33,606
Reduction in Sponsor Loans - Program Cost Sharing Agreement (5,074) -
Defeasance of Senior Subordinated Notes (70,276) -
Repurchase of Senior Subordinated Notes (25,881) (4,365)
Advances to the Network (29,889) 9,739
Distribution to the partners (60,000) -
Deferred financing costs (8,645) (62)
------------ ------------
Net cash provided by financing activities 72,366 8,375
Net increase in cash and cash equivalents 79,433 9,114
Cash and cash equivalents, beginning of year 14,029 5,869
------------- -------------
Cash and cash equivalents, end of period $ 93,462 $ 14,983
============= =============
Supplemental disclosure of cash flow information:
Interest paid during the period $ 25,921 $ 24,272
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
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UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. ORGANIZATION AND ACQUISITION
Through October 1, 1996, Univision Communications Inc. ("UCI") and its 80%
owned subsidiary, PTI Holdings, Inc. ("PTIH") were beneficially owned by
affiliates of A. Jerrold Perenchio (together with his affiliates
"Perenchio"), affiliates of Grupo Televisa, S.A. de C.V. (together with
its affiliates, "Televisa") and Dennevar, B.V., an affiliate of Venevision
International Limited (together with its affiliates, "Venevision"),
(collectively, the "Principal Stockholders"). Perenchio Television, Inc.
("PTI") was a wholly-owned subsidiary of PTIH and Univision Television
Group, Inc. ("UTG") was a wholly-owned subsidiary of PTI. PTI was merged
with and into PTIH. UCI and PTIH are holding companies and otherwise
inactive. UCI and its subsidiaries are referred to as "the Company".
Effective October 2, 1996, as part of the Offering and Reorganization,
PTIH became a wholly-owned subsidiary of the Company and the Company and
one of the Company's subsidiaries acquired UNHP and the Network. On
October 2, 1996, UNHP was liquidated. Each of Televisa and Venevision
also own warrants to acquire from UCI additional shares of UCI, which
warrants cannot be exercised by either Televisa or Venevision (or by any
other non-U.S. citizen) unless the foreign ownership restrictions of the
Communications Act of 1934 are amended to permit increased alien
ownership. Subject to certain restrictions, Televisa and Venevision may
transfer such warrants. In the event Televisa and Venevision exercise
these warrants, their ultimate ownership of UCI would be 20.3% each.
On December 17, 1992 (effective close of business December 16, 1992),
Univision Station Group, Inc. ("USG") and KTVW, Inc. ("KTVW") were
acquired by Perenchio, Televisa and Venevision with USG as the surviving
corporation changing its name to UTG.
UCI and its subsidiaries had no operations prior to the acquisitions. The
aggregate purchase price for USG and KTVW was approximately $489,000,000,
including approximately $11,000,000 of acquisition costs. A subordinated
note due from PTIH to the seller (which was subsequently sold to a third
party and then sold to the public as a series of notes) financed
$5,442,000 of the purchase price. These subordinated notes are not
guaranteed in any form by PTI nor secured by its assets. The acquisition
was accounted for under the purchase method of accounting. Accordingly,
the assets acquired and liabilities assumed have been recorded at the fair
values at the date of the acquisition. In addition to current assets and
liabilities, the purchase price was allocated principally to property and
equipment of approximately $22,000,000 and intangible assets of
approximately $473,000,000 comprised of approximately $270,000,000
attributable to affiliation agreements, approximately $156,500,000
attributable to FCC television broadcast licenses and approximately
$46,500,000 attributable to all other intangible assets including
goodwill.
On August 2, 1994, the Company completed its acquisition of all of the
stock of Combined Broadcasting of Chicago, Inc. The purchase price was
approximately $36,000,000, plus the assumption of program rights
obligations totaling approximately $11,000,000. The unpaid portion
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of program rights obligations is payable in varying amounts through the
year 1999. The acquisition was financed with borrowings from the Bank
Facility. Substantially all of the purchase price has been allocated to
intangible assets.
On September 30, 1994, the Company completed its acquisition of all of the
stock of Pueblo Broadcasting Corporation which owned and operated a
television station affiliated with the Network serving Houston, Texas.
The purchase price was approximately $20,000,000 and was financed with
borrowings from the Old Bank Facility and cash generated through
operations. Substantially all of the purchase price has been allocated to
intangible assets. The impact of the Chicago and Houston acquisitions were
not material to the Company's financial statements taken as a whole.
The accompanying interim period 1995 financial statements have been
restated to reflect an expense of $1,750,000 which had been previously
accrued as part of the purchase price of an acquired station. The loss
per share impact of this restatement on the loss before extraordinary loss
and net loss applicable to common stockholders is $(0.77).
The Company owns and operates eleven Spanish-language full-power
television stations serving New York, Los Angeles, Miami, San Antonio, San
Francisco, Fresno, Dallas, Phoenix, Albuquerque, Houston and Chicago and
seven Spanish-language low-power television stations serving Hartford,
Forth Worth, Philadelphia, Tucson, Austin, Albuquerque and Bakersfield.
The Company's television stations are affiliated with the Spanish-language
television network owned and operated by The Univision Network Limited
Partnership (the "Network"), which is also ultimately beneficially owned
by the Principal Stockholders.
Through October 1, 1996, the businesses of UTG and the Network were under
separate management and ownership structures. Notwithstanding this
separation, the business operations of UTG and the Network remain
substantially dependent on one another. UTG is dependent on the Network
for programming and advertising sales support while UTG represented 78% of
the Network's total coverage of Hispanic Households in the U.S.
2. UNAUDITED FINANCIAL STATEMENTS
Certain reclassifications have been made to the prior year financial
statements to conform with the current presentation.
3. EARLY EXTINGUISHMENT OF DEBT
During the quarter ended September 30, 1996, UTG purchased at a premium
$11,775,000 face amount of its 11 -3/4% Senior Subordinated Notes due 2001
(the "Senior Subordinated Notes"), resulting in an extraordinary loss of
$931,000, including the write-off of the related financing costs. The
remaining face amount of the Senior Subordinated Notes of $67,625,000
was defeased, resulting in an extraordinary loss of $11,597,000,
including the write-off of the remaining related financing costs of
$8,946,000. During the nine months ended September 30, 1996, UTG
purchased and/or defeased at a premium $92,050,000 face amount of its
Senior Subordinated Notes, resulting in an extraordinary loss of
$13,709,000, including the write-off of the related financing costs. The
related income tax benefits netted against these extraordinary losses were
$1,615,000 and $2,151,000 for the three and nine month periods ended
September 30, 1996. During the three and
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nine months ended September 30, 1995, UTG purchased at a premium
$4,050,000 face amount of its Senior Subordinated Notes, resulting in an
extraordinary loss of $433,000, including the write-off of the related
financing costs.
4. WEIGHTED AVERAGE SHARES
Historical weighted average common shares outstanding, for the three and
nine month periods ended September 30, 1996, are based on the actual shares
of Common Stock outstanding at September 30, 1996 and include the effect of
outstanding warrants, with an exercise price of $0.13 per share, as Common
Stock equivalents since in both 1996 periods income was generated before
taxes and extraordinary loss on extinguishment of debt and, therefore, such
warrants are dilutive. For the three and nine month periods ended
September 30, 1995, such warrants were excluded from the historical
weighted average common shares outstanding since their effect was
anti-dilutive.
As required, historical weighted average common shares outstanding have
been retroactively restated to reflect the stock dividend of 227.010528
shares for each common share, that occurred on October 2, 1996. Historical
weighted average common shares have not been adjusted for the common stock
issued in connection with the exchange of the preferred stock of PCI, the
exchange of the common stock of PTIH, the acquisition of the partnership
interests of UNHP, and the Offering all of which closed on October 2, 1996.
Weighted average common shares outstanding have been calculated as
follows:
<TABLE>
<CAPTION>
1996 1995
--------------- ---------------
<S> <C> <C>
Historical weighted average common shares outstanding 10,000 10,000
Reorganization stock dividend (227.010528 shares
for each common share) 2,270,105 2,270,105
--------------- ---------------
Weighted average common shares before dilutive effect
of common stock equivalents 2,280,105 2,280,105
--------------- ---------------
Common stock equivalents:
Warrants 14,440,820 -
Consideration upon exercise of warrants
($0.1288 for each warrant) $1,859,978
Less: Repurchased shares with proceeds from warrants
(assuming $23 per share) (80,869) -
-------------- ---------------
Common stock equivalents 14,359,951 -
--------------- ---------------
Weighted average common shares 16,640,056 2,280,105
=============== ===============
</TABLE>
Effective October 2, 1996, the Company issued additional common stock in
exchange for the outstanding preferred stock of PCI, the outstanding
common stock of PTIH and the partnership interests in UNHP. Subsequent to
these transactions, and the Offering of Class A Common Stock that closed
on October 2, 1996, the Company had 42,612,180 weighted average common
shares outstanding before common stock equivalents.
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5. THE OFFERING AND REORGANIZATION
On September 26, 1996, UCI's initial public offering of 9,395,500 shares
of its Class A Common Stock was declared effective. In connection with
the Offering, on October 2, 1996 the operations of UTG and the Network
were combined and the ownership reorganized under UCI.
Concurrent with the Offering, the Company exchanged PCI preferred stock
and PTIH common and preferred stock outstanding for PCI common stock
resulting in 126,666 common shares outstanding prior to the
Reorganization.
The Company consummated the following transactions concurrent with the
Offering and Reorganization:
(a) On September 30, 1996, the Company entered into the New Bank Facility
and repaid $165 million owing under, and terminated, the Old Bank
Facility;
(b) On September 30, 1996, the Company defeased UTG's Senior Subordinated
Notes by, among other things, depositing $74.2 million with the
trustee under the indenture governing such notes;
(c) On September 30, 1996, the Network made a distribution to its partners
in the amount of $60 million. UCI advanced the Network $60 million to
fund this distribution;
(d) On September 30, 1996, the Program License Agreements were amended,
the Program Cost Sharing Agreement (which required Televisa and
Venevision to reimburse the Company for one-half of the cost of
certain productions produced or acquired by the Company) was
terminated and the management fee to the Principal Stockholders of 3%
of Combined Net Time Sales was eliminated. Under the amended Program
License Agreements, the royalty rate will be 11% from October 1, 1996
through December 31, 1996 and will increase to 13.5% for 1997 and to
15% for all years thereafter, and the Company will receive no cost
sharing reimbursements;
(e) On October 2, 1996, the Company acquired the Network from its partners
in exchange for 19,014.5 shares of Common Stock and $40 million in
cash, UTG became a wholly-owned subsidiary of the Company, and the
Company effected a dividend of 227.0 shares on each share of Class P
Common Stock, Class T Common Stock and Class V Common Stock, and the
warrants were adjusted to reflect the new capital structure of the
Company;
(f) On October 2, 1996, the Company paid $88 million to the Principal
Stockholders and their affiliates, representing payment of outstanding
principal of and accrued interest on certain debentures and accrued
dividends on certain preferred stock issued by the Company and its
subsidiaries in connection with the "Acquisition" and approximately
$43 million to the Principal Stockholders and their affiliates,
representing full payment of outstanding principal of, and interest
on, certain notes issued in payment of certain accrued dividends as of
December 31, 1995;
(g) On October 2, 1996, the Company paid $149 million to Televisa and
Venevision, representing full payment of outstanding principal of, and
accrued interest on, all amounts owed to them by UTG with respect to
Sponsor Loans made subsequent to the Acquisition, and the obligations
to make the Sponsor Loans terminated;
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(h) On October 2, 1996, the Company paid $15.3 million to Televisa,
representing full payment of outstanding principal of and accrued
interest on the note issued by the Company as of July 1, 1996 to
Televisa as payment for the acquisition of Galavision.
As a result of the Reorganization and the Offering, Univision will report
financial information on a consolidated basis that includes the Network.
Accordingly, supplemental data giving effect to the above, on a consistent
basis with that presented in the Company's Form S-1, are included herein
on a pro forma basis. See Supplemental Data in Part II, Item 5.
13
<PAGE> 15
PART I, ITEM 2
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following management's discussion and analysis describes the results of
operations of UCI for the three and nine month periods ended September 30, 1996
as compared to the three and nine month periods ended September 30, 1995.
RESULTS OF OPERATIONS
Prior to the Reorganization, UCI's major asset was its investment in UTG and
substantially all of its revenues were derived from UTG. UTG's net revenues
are derived from the O&Os and include gross advertising revenues generated from
the sale of national and local spot advertising time plus an allocation of
Network gross revenues, net of agency commissions. Based on the current
Affiliation Agreements, the Network and UTG share net advertising revenues.
The net advertising revenues shared consist of the local and national
advertising revenues generated by the O&Os and the portion of Network
advertising revenues that is represented by each O&O's percentage of total
Network coverage. These revenues are allocated 62% to the O&Os and 38% to the
Network. For example, if an O&O represents 20% of the Network's coverage, then
the sum of 20% of Network advertising revenues and all of such O&O's national
and local advertising revenues would be allocated 62% to UTG and 38% to the
Network. Also included in net revenues are other miscellaneous revenues.
Direct operating expenses consist of programming and news costs and general
operating costs.
UCI CONSOLIDATED
REVENUES. Net revenues increased to $48,462,000 for the three months ended
September 30, 1996 from $42,777,000 for the same period in 1995, an increase of
$5,685,000 or 13.3%. The increase is due to higher local and national spot net
revenues of $4,565,000, primarily from Los Angeles, Houston, Chicago and Miami,
with increases at all other stations except for New York and San Francisco, and
an increase in UCI's share of Network net revenues of $2,968,000. These net
revenue increases were predominantly driven by increased prices for advertising
spots. These net increases were partially offset by the Network's share of
higher local and national net revenues of $1,598,000.
A major initiative has been implemented to improve the performance of the New
York station. In addition to improvements in the station's sales and research
organizations, a significant advertising and promotional campaign has been
implemented to increase the awareness among advertisers about the New York
Hispanic community and the advertisers' ability to reach that audience through
the New York station.
The San Francisco decrease is due to an overall softness in the San Francisco
advertising market. In order to improve its signal and coverage, the Company
is in the process of building and relocating the San Francisco station's tower
and transmitter. This should be completed in the latter part of 1997.
14
<PAGE> 16
Net revenues increased to $139,882,000 for the nine months ended September 30,
1996 from $125,056,000 for the same period in 1995, an increase of $14,826,000
or 11.9%. The increase is due to higher local and national spot net revenues
of $16,657,000, primarily from Los Angeles, Miami, Houston and Chicago, with
increases at all other stations except for New York, and an increase in UCI's
share of Network net revenues of $4,867,000. These net increases were
partially offset by the Network's share of higher local and national net
revenues of $6,330,000.
EXPENSES. Direct operating expenses increased to $8,324,000 and $24,600,000 for
the three and nine months ended September 30, 1996 from $7,527,000 and
$22,643,000 for the same periods in 1995, an increase of $797,000 or 10.6% and
$1,957,000 or 8.6%, respectively. For both periods, the increase is primarily
due to increases in programming, news, and technical costs. As a percentage of
net revenues, direct operating expenses decreased from 17.6% in the three
months ended September 30, 1995 to 17.2% in 1996 and decreased from 18.1% in
the nine months ended September 30, 1995 to 17.6% in 1996.
Selling, general and administrative expenses increased to $13,942,000 and
$44,641,000 for the three and nine months ended September 30, 1996 from
$13,320,000 and $39,063,000 for the same periods in 1995, an increase of
$622,000 or 4.7% and $5,578,000 or 14.3%, respectively. For both periods, the
increase is primarily due to increased selling costs associated with higher
sales, increases in corporate sales support and increased research fees. As a
percentage of net revenues, selling, general and administrative expenses
decreased from 31.1% in the three months ended September 30, 1995 to 28.8% in
1996 and increased from 31.2% in the nine months ended September 30, 1995 to
31.9% in 1996.
CORPORATE CHARGES. Corporate charges increased to $2,566,000 and $6,050,000
for the three and nine months ended September 30, 1996 from $1,798,000 and
$4,863,000 for the same periods in 1995, an increase of $768,000 or 42.7% and
$1,187,000 or 24.4%, respectively. The increase is primarily due to the
accrual of additional compensation costs. As a percentage of net revenues,
corporate charges increased from 4.2% in the three months ended September 30,
1995 to 5.3% in 1996 and increased from 3.9% in the nine months ended September
30, 1995 to 4.3% in 1996.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased to
$8,909,000 and $26,057,000 for the three and nine months ended September 30,
1996 from $8,417,000 and $24,954,000 for the same periods in 1995, an increase
of $492,000 or 5.8% and $1,103,000 or 4.4%, respectively. For both periods,
the increase is primarily a result of increased capital expenditures.
OPERATING INCOME. As a result of the above factors, operating income increased
to $14,721,000 and $38,534,000 for the three and nine months ended September
30, 1996 from $11,715,000 and $33,533,000 for the same periods in 1995, an
increase of $3,006,000 or 25.7% and $5,001,000 or 14.9%, respectively. As a
percentage of net revenues, operating income increased from 27.4% in the three
months ended September 30, 1995 to 30.4% in 1996 and increased from 26.8% in
the nine months ended September 30, 1995 to 27.5% in 1996.
INTEREST EXPENSE. Interest expense increased to $11,906,000 and $32,206,000
for the three and nine months ended September 30, 1996 from $10,251,000 and
$30,934,000 for the same periods in 1995, an increase of $1,655,000 or 16.1%
and $1,272,000 or 4.1%, respectively. For both periods, the increase is
primarily a result of increased Sponsor Loan and related party debt balances
offset in part by a decrease in bank debt interest.
15
<PAGE> 17
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS. As a result of the above factors,
income before extraordinary items increased to $2,458,000 and $3,352,000 for
the three and nine months ended September 30, 1996 from losses of $1,271,000
and $2,945,000 for the same periods in 1995.
EXTRAORDINARY LOSS. During the three months ended September 30, 1996, UTG
purchased at a premium, $11,775,000 face amount of its Senior Subordinated
Notes, resulting in an extraordinary loss of $931,000, including the write-off
of the related financing costs. The remaining face amount of the Senior
Subordinated Notes of $67,625,000 was defeased, resulting in an extraordinary
loss of $11,597,000, including the write-off of the remaining related
financing costs of $8,946,000. During the nine months ended September 30,
1996, UTG purchased and/or defeased at a premium $92,050,000 face amount of its
Senior Subordinated Notes, resulting in an extraordinary loss of $13,709,000,
including the write-off of the related financing costs. The related income tax
benefits of $1,615,000 and $2,151,000 for the three and nine months ended
September 30, 1996 are netted against the extraordinary losses. During the
three and nine months ended September 30, 1995, UTG purchased at a premium
$4,050,000 face amount of its Senior Subordinated Notes, resulting in an
extraordinary loss of $433,000, including the write-off of the related
financing costs.
NET LOSS. As a result of the above factors, the net loss increased to
$8,455,000 and $8,206,000 for the three and nine months ended September 30,
1996 from $1,704,000 and $3,378,000 for the same periods in 1995, an increase
of $6,751,000 and $4,828,000, respectively. As a percentage of net revenues,
the net loss increased from 4.0% in the three months ended September 30, 1995
to 17.4% in 1996 and increased from 2.7% in the nine months ended September 30,
1995 to 5.9% in 1996.
UCI LIQUIDITY AND CAPITAL RESOURCEs
Univision's primary source of cash flow is its broadcasting operations. Funds
for debt service, capital expenditures and operations historically have been
provided by income from operations and by borrowings. Capital expenditures
include UTG and the Network based on UCI acquiring the Network on October 2,
1996.
The proceeds of the Offering and borrowings under the New Bank Facility, along
with cash flow from operations, provided the resources necessary to repay the
amounts owing under and to terminate the Old Bank Facility, to defease the
Senior Subordinated Notes, make a $100 million distribution and payment to the
Network partners, pay all outstanding principal and accrued interest on all
amounts loaned by the Principal Stockholders to UTG as Sponsor Loans,
reclassify the preferred stock and pay accrued dividends thereon and repay
other related party debt, pay the Galavision note, and to fund the Entravision
investment. Additional amounts under the New Bank Facility, together with cash
flow from operations, will be used for debt service, capital expenditures,
working capital and other general corporate purposes.
In connection with the Reorganization, the Company entered into the New Bank
Facility with a syndicate of commercial banks and other lenders. The New Bank
Facility consisted of a $400 million amortizing term loan (the "Term Facility")
with a final maturity of December 31, 2003 and a $200 million reducing
revolving credit facility (the "Revolving Credit Facility") maturing on the
same date.
The New Bank Facility will also permit the lenders thereunder to advance up to
an additional $250 million of term loans (the "Incremental Facility") although
there are no commitments at this time to lend any such additional amounts.
16
<PAGE> 18
The Term Facility amortizes quarterly commencing in 1997 with $40 million
required to be repaid during 1997. The Revolving Credit Facility will have
quarterly scheduled reductions in availability beginning in 1999. If any loans
are made available under the Incremental Facility, such loans will be amortized
beginning on March 31, 1999 and will be repaid in full on or before August 31,
2004.
In addition to the scheduled amortization of the Term Facility and scheduled
reductions of the Revolving Credit Facility described above, 66 2/3% of "excess
cash flow" of the Company (50% if certain leverage tests are satisfied) will be
applied each year first to ratably reduce loans made under the Term Facility
and the Incremental Facility and thereafter to reduce the availability under
the Revolving Credit Facility. In addition, proceeds from the sale or other
disposition of assets outside of the ordinary course of business and 80% of the
proceeds of equity offerings by the Company (other than the Offering) will be
similarly applied. Any such mandatory prepayments will ratably reduce each
remaining installment or scheduled reduction of the Term Facility, the
Revolving Credit Facility or the Incremental Facility, as the case may be.
The New Bank Facility may be voluntarily prepaid by the Company at any time
without premium or penalty.
Loans made under the New Bank Facility bear interest at rates determined by
reference to the ratio of the Company's total indebtedness to EBITDA for the
four fiscal quarters most recently concluded (the "Leverage Ratio"). Interest
rates range from a reserve-adjusted Eurodollar rate plus 0.75% to 1.50% per
annum. The Company has the option to elect a prime rate also determined by
reference to the Leverage Ratio. Under such option interest rates range from
the prime rate to the prime rate plus 0.25% per annum.
The New Bank Facility is guaranteed by the Company's subsidiaries and is
secured by a security interest in substantially all of the personal property
assets of the Company and its subsidiaries (subject to limitations of federal
law in the case of FCC licenses of the O&Os).
The New Bank Facility contains limitations on the incurrence of debt and liens
by the Company and its subsidiaries, the payment of dividends and the
disposition of assets, financial performance tests and other restrictions
typical of leveraged credits.
In addition to customary events of default, it will be an event of default if a
change of control occurs (defined as a person or person other than A. Jerrold
Perenchio or his permitted transferees gaining voting control of the Company).
Financing activities to fund Univision's operations are anticipated to be
favorably impacted by the increased availability of funds under the New Bank
Facility, partially offset by additional cash requirements for the New Bank
Facility in the form of debt acquisition costs, additional quarterly principal
payments and monthly interest as contrasted with semi-annual interest payments
on the Senior Subordinated Notes and deferred interest on the Sponsor Loans.
The Company expects to explore both Spanish-language television and other media
acquisition opportunities to complement and capitalize on the Company's
existing business and management. The purchase price for such acquisitions may
be paid (i) with cash derived from operating cash flow, proceeds available
under the New Bank Facility or proceeds from future debt or equity offerings or
(ii) with equity or debt securities of the Company or (iii) with any
combination thereof.
17
<PAGE> 19
As a result of net operating loss carryforwards attributable to the
Acquisition, net operating losses since the Acquisition and anticipated tax
consequences of the Reorganization, the Company will have available a deferred
tax asset of approximately $90,000,000 to offset future taxes arising from
operations.
Future free cash flows of the Company will be substantially different from
historical free cash flows after the Reorganization and revision of the various
agreements among the Principal Stockholders due to the (i) amendments in the
Program License Agreements, (ii) discontinuance of Sponsor Loans to the
Company, (iii) elimination of the management fee, (iv) termination of the
Program Cost Sharing Agreement, and (v) changes in debt and capital structure.
Capital expenditures totaled $14,472,000 and $10,717,000, which includes the
Network based on UCI acquiring the Network on October 2, 1996 (excluding
capitalized transponder lease obligations), for the nine month periods ended
September 30, 1996 and 1995, respectively. Univision anticipates that total
capital expenditures for 1996 will be approximately $20,000,000, with an
expected carryover into 1997 of $7,000,000 as a result of timing of station
relocation projects. In addition to normal capital maintenance and several
tower and antenna replacements, the Company is also in the process of upgrading
and relocating several of its television station facilities. Capital spending
in 1997, excluding the carryover from 1996, may approximate $20,000,000 to
$24,000,000 pending decisions on other station relocations.
SEASONALITY
The advertising revenues of Univision Communications Inc. vary over the
calendar year. Historically, approximately 30% of total advertising revenues
have been generated in the fourth quarter and 20% in the first quarter with the
remainder approximately equally split between the second and third quarters.
Because of the relatively fixed nature of the costs of Univision Communications
Inc.'s business, seasonal variations in operating income are more pronounced
than those of revenues.
18
<PAGE> 20
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. None
ITEM 2. None
ITEM 3. None
ITEM 4. On September 30, 1996, the stockholders of UCI met and unanimously
authorized the Reorganization and the Offering and elected Harold
Gaba as a director to fill a board vacancy, effective upon
consummation of the Reorganization. A. Jerrold Perenchio, Robert V.
Cahill, Ray Rodriguez, Gustavo Cisneros, Lawrence W. Dam, Alan F.
Horn and John G. Perenchio continued as directors after such
meeting.
ITEM 5. OTHER INFORMATION.
Supplemental pro forma unaudited condensed consolidated statements
of operations.
Supplemental pro forma unaudited condensed consolidated balance
sheet.
Supplemental pro forma Management's Discussion and Analysis of
Financial Condition and Results of Operations.
19
<PAGE> 21
PART II, ITEM 5 - OTHER INFORMATION
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated statements of
operations and unaudited pro forma consolidated condensed balance sheet
(collectively, the "Pro Forma Statements") give effect to the Reorganization
and the sale of the 9,395,500 shares of Class A Common Stock and the
application of the net proceeds therefrom as if such transactions had occurred
as of January 1, 1995, in the case of the statements of operations data, and as
of September 30, 1996, in the case of the balance sheet data.
The pro forma statements do not purport to represent what the Company's
consolidated financial position or results of operations would actually have
been if such transactions in fact had occurred on the dates assumed or to
project consolidated financial position or results of operations for any future
date or period.
The pro forma adjustments are based upon available information and upon certain
assumptions that management of the Company believes are reasonable. The
Reorganization, wherein the Company has acquired 100% of UNHP and the 20%
minority interests of its subsidiary PTIH as of October 2, 1996, has been
accounted for using the purchase method of accounting. The aggregate fair value
of the minority interests acquired is approximately $203 million. Accordingly,
the acquisition of the minority interests have been allocated to the individual
assets and liabilities based on their relative fair values as of the closing of
the Reorganization. Management has allocated the fair value of the minority
interests acquired to intangible assets. Management has concluded that a 20
year economic useful life for the acquisition of the minority interests is
appropriate based on the competitive environment in which the Company operates,
its highly leveraged nature and the historical performance of the Company.
The pro forma statements and accompanying notes should be read in conjunction
with the historical consolidated financial statements of PCI and UNHP,
including the notes thereto, included in the Company's Form S-1 filed with the
Securities and Exchange Commission.
20
<PAGE> 22
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues $ 92,902 $ 79,310 $ 263,758 $ 232,008
Direct operating expenses 30,847 27,245 88,128 80,740
Selling, general and administrative expenses 23,710 20,869 71,554 62,267
Corporate charges 2,841 2,448 6,755 6,573
Depreciation and amortization 13,570 13,474 41,307 39,937
------------- ------------- ------------- -------------
Operating income 21,934 15,274 56,014 42,491
Interest expense 10,968 10,996 32,714 33,637
Amortization of deferred financing costs 308 308 926 926
Non recurring expense of acquired station - 1,750 - 1,750
------------- ------------- ------------- -------------
Income before taxes and extraordinary
loss on extinguishment of debt 10,658 2,220 22,374 6,178
Provision for income taxes 38 - 128 2,500
------------- ------------- ------------- -------------
Income before extraordinary loss on
extinguishment of debt 10,620 2,220 22,246 3,678
Extraordinary loss on extinguishment of debt - - - (20,745)
------------- ------------- ------------- ------------
Net income (loss) $ 10,620 $ 2,220 $ 22,246 $ (17,067)
============= ============= ============= ============
Income per share before extraordinary loss $ 0.19 $ 0.04 $ 0.39 $ 0.06
Extraordinary loss per share - - - (0.36)
------------- ------------- ------------- ------------
Net income (loss) per share $ 0.19 $ 0.04 $ 0.39 $ (0.30)
============= ============= ============= ============
Weighted average common shares outstanding 56,972,131 56,972,131 56,972,131 56,972,131
============= ============= ============= =============
Other Data:
Broadcast cash flow $ 38,345 $ 31,196 $ 104,076 $ 89,001
EBITDA $ 35,504 $ 28,748 $ 97,321 $ 82,428
</TABLE>
See notes to condensed consolidated financial statements.
21
<PAGE> 23
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS SUBTOTAL ADJUSTMENTS
------------------------------ FOR PRIOR TO FOR PRO
UCI UNHP CONTROL REORGANIZATION OFFERING OFFERING (a) FORMA
-------- -------- --------- -------------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 93,462 $ 103 $ 93,565 $ 50,000 (d) $ (5,376) $ 28,796 $ 23,420
(148,941) (c)
Accounts receivable, net 33,850 47,316 81,166 - 81,166 - 81,166
Due from (to) the Network 43,468 (43,468) - - - - -
Other current assets 5,393 10,237 15,630 - 15,630 (2,961) 12,669
-------- -------- --------- --------- --------- --------
Total current assets 176,173 14,188 190,361 (98,941) 91,420 25,835 117,255
Property and equipment, net 28,886 73,655 102,541 - 102,541 - 102,541
Intangible assets, net 428,663 21,475 450,138 203,044 (b) 653,182 - 653,182
Deferred tax asset 2,000 - 2,000 - 2,000 - 2,000
Other assets 11,086 514 11,600 - 11,600 - 11,600
-------- -------- --------- --------- --------- --------- ---------
Total assets 646,808 109,832 756,640 104,103 860,743 25,835 886,578
========= ======== ========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Accounts payable and accrued
liabilities 35,982 33,835 69,817 - 69,817 1,348 68,469
Current portion of long-term
debt and capital lease
obligations 30,311 2,252 32,563 (10,000) (d) 42,563 - 42,563
Other current liabilities 677 4,886 5,563 - 5,563 - 5,563
Liabilities to be settled
upon reorganization - - - (171,389) 171,389 171,389 -
-------- -------- --------- --------- --------- --------- ---------
Total current liabilities 66,970 40,973 107,943 (181,389) 289,332 172,737 116,595
Bank debt 370,000 - 370,000 (40,000) (d) 410,000 - 410,000
Capital leases and other 760 54,934 55,694 - 55,694 - 55,694
Related party debt 120,701 - 120,701 120,701 (c) - - -
Junior Subordinated Notes 8,487 49,975 58,462 - 58,462 - 58,462
Sponsor Loans 148,941 - 148,941 148,941 (c) - - -
Other liabilities 1,840 1,934 3,774 - 3,774 - 3,774
Minority interest 17,208 - 17,208 17,208 (e) - - -
Preferred stock 1 - 1 1 (f) - - -
Common stock 23 - 23 (309) (h, i) 332 (94) 426
Paid in capital - - - 40,308 (g, h) 169,256 (198,478) 367,734
(209,564) (b, e)
Accumulated deficit (88,123) (37,984) (126,107) - (126,107) - (126,107)
-------- --------- --------- --------- --------- --------- ---------
Total stockholders' equity
(deficit) (88,099) (37,984) (126,083) 169,564 43,481 198,572 242,053
-------- --------- --------- --------- --------- --------- ---------
Total liabilities and
stockholders' equity $646,808 $ 109,832 $ 756,640 $ 104,103 $ 860,743 $ 25,835 $ 886,578
======== ========= ========= ========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
22
<PAGE> 24
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(a) The adjustments reflected in this column represent the receipt of the
proceeds of the Offering net of related offering costs and the liabilities
incurred in connection with the Reorganization and the payment thereof.
(b) Represents recording of $203,044 of goodwill related to the acquisition of
the minority interests in PTIH and UNHP.
(c) Eliminates the debt that was refinanced subsequent to September 30, 1996.
(d) Records additional borrowings subsequent to September 30, 1996 under the
New Bank Facility of $50,000. As of September 30, 1996, $400,000 was
outstanding under the New Bank Facility.
(e) Eliminates the effects of historical minority interest of PTIH.
(f) Reflects the reclassification from Preferred to Common Stock of $1.
(g) Records the issuance of Common Stock in connection with the Reorganization
and the Offering offset by stock issuance costs of $17,524.
(h) Records the $40,000 cash payment made subsequent to September 30, 1996,
together with the issuance of 4,335,499 shares of Common Stock in exchange
for the partners' interests in UNHP.
(i) Reconciliation of stockholders' equity (deficit) is as follows:
<TABLE>
<CAPTION>
STOCKHOLDERS'
EQUITY
-------------
<S> <C>
Historical balance $ (126,083)
Issuance of Common Stock 426
Paid in capital
Records stock proceeds 216,002
Elimination of minority interest 6,520
Records goodwill 203,044
Records distribution to partners (40,000)
Reclassification of reorganization share value (332)
Records Offering costs (17,524)
------------
Pro forma balance $ 242,053
============
</TABLE>
23
<PAGE> 25
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
PRO FORMA RESULTS
The following management's discussion and analysis describes the results of
operations of UCI on a pro forma basis, excluding the effects of all
intercompany transactions of the Company, for the three and nine month periods
ended September 30, 1996 as compared to the three and nine month periods ended
September 30, 1995.
RESULTS OF OPERATIONS
As a result of the Reorganization, UCI's major assets are its investments in
UTG and the Network, from which substantially all of its revenues are derived.
UTG's net revenues are derived from the O&Os and include gross advertising
revenues generated from the sale of national and local spot advertising time,
net of agency commissions. The Network net revenues include gross advertising
revenues generated from the sale of network advertising, net of agency
commissions and station compensation to the Affiliated Stations. Also included
in net revenues are other miscellaneous revenues.
Direct operating expenses consist of programming and news costs and general
operating costs.
REVENUES. Net revenues increased to $92,902,000 for the three months ended
September 30, 1996 from $79,310,000 for the same period in 1995, an increase of
$13,592,000 or 17.1%. The increase is due to higher net revenues of the O&Os
of $5,685,000 and of the Network of $7,907,000. The O&Os' increase, which is
predominantly driven by increased prices for advertising spots, is primarily
from Los Angeles, Houston, Chicago and Miami, with increases at all other O&Os
except for New York and San Francisco. The Network's increase is due primarily
to rate increases and increased volume on previously lower demand dayparts as
compared to 1995.
A major initiative has been implemented to improve the performance of the New
York station. In addition to improvements to the station's sales and research
organizations, a significant advertising and promotional campaign has been
implemented to increase the awareness among advertisers about the New York
Hispanic community and the advertisers' ability to reach that audience through
the New York station.
The San Francisco decrease is due to an overall softness in the San Francisco
advertising market. In order to improve its signal and coverage, the Company
is in the process of building and relocating the San Francisco station's tower
and transmitter. This should be completed in the latter part of 1997.
Net revenues increased to $263,758,000 for the nine months ended September 30,
1996 from $232,008,000 for the same period in 1995, an increase of $31,750,000
or 13.7%. The increase is due to higher net revenues of the O&Os of
$14,826,000 and of the Network of $16,924,000. The O&Os' increase, which is
predominantly driven by increased prices for advertising spots, is primarily
from Los Angeles, Miami, Houston and Chicago, with increases at all other O&Os
except for New York. The Network's increase is due primarily to rate increases
and increased volume on previously lower demand dayparts as compared to 1995.
24
<PAGE> 26
EXPENSES. Direct operating expenses increased to $30,847,000 and $88,128,000
for the three and nine months ended September 30, 1996 from $27,245,000 and
$80,740,000 for the same periods in 1995, an increase of $3,602,000 or 13.2%
and $7,388,000 or 9.2%, respectively. For both periods, the increase is
primarily due to higher license fees payable to Televisa and Venevision under
the Program License Agreements based on higher Combined Net Time Sales and
increases in news and technical costs. As a percentage of net revenues, direct
operating expenses decreased from 34.4% in the three months ended September 30,
1995 to 33.2% in 1996 and decreased from 34.8% in the nine months ended
September 30, 1995 to 33.4% in 1996.
Selling, general and administrative expenses increased to $23,710,000 and
$71,554,000 for the three and nine months ended September 30, 1996 from
$20,869,000 and $62,267,000 for the same periods in 1995, an increase of
$2,841,000 or 13.6% and $9,287,000 or 14.9%, respectively. For both periods,
the increase is primarily due to increased selling costs associated with higher
sales, increases in corporate sales support and increased research fees. As a
percentage of net revenues, selling, general and administrative expenses
decreased from 26.3% in the three months ended September 30, 1995 to 25.5% in
1996 and increased from 26.8% in the nine months ended September 30, 1995 to
27.1% in 1996.
BROADCAST CASH FLOW. As a result of the above factors, broadcast cash flow
increased to $38,345,000 and $104,076,000 for the three and nine months ended
September 30, 1996 from $31,196,000 and $89,001,000 for the same periods in
1995, an increase of $7,149,000 or 22.9% and $15,075,000 or 16.9%,
respectively. As a percentage of net revenues, broadcast cash flow increased
from 39.3% in the three months ended September 30, 1995 to 41.3% in 1996 and
increased from 38.4% in the nine months ended September 30, 1995 to 39.5% in
1996.
CORPORATE CHARGES. Corporate charges increased to $2,841,000 and $6,755,000
for the three and nine months ended September 30, 1996 from $2,448,000 and
$6,573,000 for the same periods in 1995, an increase of $393,000 or 16.1% and
$182,000 or 2.8%, respectively. The increase is primarily due to the accrual
of additional compensation costs. As a percentage of net revenues, corporate
charges remained at 3.1% in the three months ended September 30, 1995 and 1996
and decreased from 2.8% in the nine months ended September 30, 1995 to 2.6% in
1996.
EBITDA. As a result of the above factors, EBITDA increased to $35,504,000 and
$97,321,000 for the three and nine months ended September 30, 1996 from
$28,748,000 and $82,428,000 for the same periods in 1995, an increase of
$6,756,000 or 23.5% and $14,893,000 or 18.1%, respectively. As a percentage of
net revenues, EBITDA increased from 36.2% in the three months ended September
30, 1995 to 38.2% in 1996 and increased from 35.5% in the nine months ended
September 30, 1995 to 36.9% in 1996.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased to
$13,570,000 and $41,307,000 for the three and nine months ended September 30,
1996 from $13,474,000 and $39,937,000 for the same periods in 1995, an increase
of $96,000 or .7% and $1,370,000 or 3.4%, respectively. For both periods, the
increase is primarily a result of increased capital expenditures.
OPERATING INCOME. As a result of the above factors, operating income increased
to $21,934,000 and $56,014,000 for the three and nine months ended September
30, 1996 from $15,274,000 and $42,491,000 for the same periods in 1995, an
increase of $6,660,000 or 43.6% and $13,523,000 or 31.8%, respectively. As a
percentage of net revenues, operating income increased from 19.3% in the
25
<PAGE> 27
three months ended September 30, 1995 to 23.6% in 1996 and increased from 18.3%
in the nine months ended September 30, 1995 to 21.2% in 1996.
INTEREST EXPENSE. Interest expense decreased to $10,968,000 and $32,714,000
for the three and nine months ended September 30, 1996 from $10,996,000 and
$33,637,000 for the same periods in 1995, a decrease of $28,000 or .3% and
$923,000 or 2.7%, respectively. For both periods, the decrease is primarily a
result of lower bank borrowings, partially offset by additional interest
expense from the Junior Subordinated Notes.
INCOME BEFORE EXTRAORDINARY ITEMS. As a result of the above factors, income
before extraordinary items increased to $10,620,000 and $22,246,000 for the
three and nine months ended September 30, 1996 from $2,220,000 and $3,678,000
for the same periods in 1995, an increase of $8,400,000 or 378.4% and
$18,568,000 or 504.8%, respectively. As a percentage of net revenues, income
before extraordinary items increased from 2.8% in the three months ended
September 30, 1995 to 11.4% in 1996 and increased from 1.6% in the nine months
ended September 30, 1995 to 8.4% in 1996.
EXTRAORDINARY LOSS. During the nine months ended September 30, 1995, on a pro
forma basis, the Senior Subordinated Notes were defeased on January 1, 1995 at
a price of 107 with a face amount of $99,600,000, resulting in an extraordinary
loss of $23,245,000, including the write- off of the related deferred
financing costs of $16,273,000. The related income tax benefit of $2,500,000
is netted against the extraordinary loss.
NET INCOME (LOSS). As a result of the above factors, net income increased to
$10,620,000 and $22,246,000 for the three and nine months ended September 30,
1996 from net income of $2,220,000 for the three months ended September 30,
1995, an increase of $8,400,000 or 378.4% and a net loss of $17,067,000 for the
nine months ended September 30, 1995, an increase of $39,313,000. As a
percentage of net revenues, net income increased from 2.8% in the three months
ended September 30, 1995 to 11.4% in 1996 and from a net loss in the nine
months ended September 30, 1995 compared to net income of 8.4% in 1996.
26
<PAGE> 28
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------- PRO FORMA PRO
UCI UNHP CONSOL. ADJUSTMENTS FORMA
---------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $ 48,462 $ 44,440 $ 92,902 $ - $ 92,902
Direct operating expenses 8,324 22,523 30,847 - 30,847
Selling, general and administrative expenses 13,942 12,511 26,453 (2,743)(a) 23,710
Corporate charges 2,566 275 2,841 - 2,841
Depreciation and amortization 8,909 2,123 11,032 2,538 (b) 13,570
---------- ---------- ---------- --------- ---------
Operating income 14,721 7,008 21,729 205 21,934
Interest expense 11,906 2,867 14,773 (3,805)(c) 10,968
Amortization of deferred financing costs 843 - 843 (535)(d) 308
Minority interest (2,125) - (2,125) 2,125 (e) -
---------- ----------- ---------- --------- ---------
Income before taxes and extraordinary
loss on extinguishment of debt 4,097 4,141 8,238 2,420 10,658
Provision (benefit) for income taxes 1,639 14 1,653 (1,615)(f) 38
---------- ---------- ---------- --------- ---------
Income before extraordinary loss on
extinguishment of debt 2,458 4,127 6,585 4,035 10,620
Extraordinary loss on extinguishment of debt (10,913) - (10,913) 10,913 -
---------- ---------- ---------- --------- ---------
Net income (loss) $ (8,455) $ 4,127 $ (4,328) $ 14,948 $ 10,620
========== ========== ========== ========= =========
Earnings per share before extraordinary
loss on extinguishment of debt $ 0.15 $ 0.19
Earnings (loss) per share $ (0.51) $ 0.19
Weighted average common
shares outstanding (g) 16,640,056 56,972,131
Other Data:
Broadcast cash flow 26,196 9,406 35,602 2,743 38,345
EBITDA 23,630 9,131 32,761 2,743 35,504
</TABLE>
See notes to condensed consolidated financial statements.
27
<PAGE> 29
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------- PRO FORMA PRO
UCI UNHP CONSOL. ADJUSTMENTS FORMA
---------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $ 42,777 $ 36,533 $ 79,310 $ - $ 79,310
Direct operating expenses 7,527 19,718 27,245 - 27,245
Selling, general and administrative expenses 13,320 9,878 23,198 (2,329)(a) 20,869
Corporate charges 1,798 650 2,448 - 2,448
Depreciation and amortization 8,417 2,519 10,936 2,538 (b) 13,474
---------- ---------- ---------- --------- ---------
Operating income 11,715 3,768 15,483 (209) 15,274
Interest expense 10,251 1,909 12,160 (1,164)(c) 10,996
Amortization of deferred financing costs 949 - 949 (641)(d) 308
Non recurring expense of acquired station 1,750 - 1,750 - 1,750
Minority interest 36 - 36 (36)(e) -
---------- ---------- ---------- --------- ---------
Income (loss) before taxes and extraordinary
loss on extinguishment of debt (1,271) 1,859 588 1,632 2,220
Provision for income taxes - - - - -
---------- ---------- ---------- --------- ---------
Income (loss) before extraordinary loss on
extinguishment of debt (1,271) 1,859 588 1,632 2,220
Extraordinary loss on extinguishment of debt (433) - (433) 433 -
---------- ---------- ---------- --------- ---------
Net income (loss) $ (1,704) $ 1,859 $ 155 $ 2,065 $ 2,220
========== ========== ========== ========= =========
Earnings (loss) per share before extraordinary
loss on extinguishment of debt $ (0.56) $ 0.04
Earnings (loss) per share $ (0.75) $ 0.04
Weighted average common
shares outstanding (g) 2,280,105 56,972,131
Other Data:
Broadcast cash flow 21,930 6,937 28,867 2,329 31,196
EBITDA 20,132 6,287 26,419 2,329 28,748
</TABLE>
See notes to condensed consolidated financial statements.
28
<PAGE> 30
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------- PRO FORMA PRO
UCI UNHP CONSOL. ADJUSTMENTS FORMA
---------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $ 139,882 $ 123,876 $ 263,758 $ $ 263,758
Direct operating expenses 24,600 63,528 88,128 88,128
Selling, general and administrative expenses 44,641 34,699 79,340 (7,786)(a) 71,554
Corporate charges 6,050 705 6,755 6,755
Depreciation and amortization 26,057 7,636 33,693 7,614 (b) 41,307
---------- ---------- ---------- ----------- ---------
Operating income 38,534 17,308 55,842 172 56,014
Interest expense 32,206 7,666 39,872 (7,158)(c) 32,714
Amortization of deferred financing costs 2,592 - 2,592 (1,666)(d) 926
Minority interest (1,851) - (1,851) 1,851 (e) -
---------- ---------- ---------- ----------- ---------
Income before taxes and extraordinary
loss on extinguishment of debt 5,587 9,642 15,229 7,145 22,374
Provision (benefit) for income taxes 2,235 44 2,279 (2,151)(f) 128
---------- ---------- ---------- ----------- ---------
Income before extraordinary loss on
extinguishment of debt 3,352 9,598 12,950 9,296 22,246
Extraordinary loss on extinguishment of debt (11,558) - (11,558) 11,558 -
---------- ---------- ---------- ----------- ---------
Net income (loss) $ (8,206) $ 9,598 $ 1,392 $ 20,854 $ 22,246
========== ========== ========== =========== =========
Earnings per share before extraordinary
loss on extinguishment of debt $ 0.20 $ 0.39
Earnings (loss) per share $ (0.49) $ 0.39
Weighted average common
shares outstanding (g) 16,640,056 56,972,131
Other Data:
Broadcast cash flow 70,641 25,649 96,290 7,786 104,076
EBITDA 64,591 24,944 89,535 7,786 97,321
</TABLE>
See notes to condensed consolidated financial statements.
29
<PAGE> 31
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------- PRO FORMA PRO
UCI UNHP CONSOL. ADJUSTMENTS FORMA
---------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $ 125,056 $ 106,952 $232,008 $ $232,008
Direct operating expenses 22,643 58,097 80,740 80,740
Selling, general and administrative expenses 39,063 30,092 69,155 (6,888)(a) 62,267
Corporate charges 4,863 1,710 6,573 6,573
Depreciation and amortization 24,954 7,369 32,323 7,614 (b) 39,937
---------- ---------- -------- ------- --------
Operating income 33,533 9,684 43,217 (726) 42,491
Interest expense 30,934 5,760 36,694 (3,057)(c) 33,637
Amortization of deferred financing costs 3,269 - 3,269 (2,343)(d) 926
Non recurring expense of acquired station 1,750 - 1,750 1,750
Minority interest 525 - 525 (525)(e) -
---------- ---------- --------- -------- --------
Income (loss) before taxes and extraordinary
loss on extinguishment of debt (2,945) 3,924 979 5,199 6,178
Provision for income taxes - - - 2,500 (f) 2,500
---------- ---------- --------- --------- --------
Income (loss) before extraordinary loss on
extinguishment of debt (2,945) 3,924 979 2,699 3,678
Extraordinary loss on extinguishment of debt (433) - (433) (20,312) (20,745)
---------- ---------- --------- -------- --------
Net income (loss) $ (3,378) $ 3,924 $ 546 $(17,613) $(17,067)
========== ========== ========== ======== ========
Earnings (loss) per share before extraordinary
loss on extinguishment of debt $ (1.29) $ 0.06
Loss per share $ (1.48) $ (0.30)
Weighted average common
shares outstanding (g) 2,280,105 56,972,131
Other Data:
Broadcast cash flow 63,350 18,763 82,113 6,888 89,001
EBITDA 58,487 17,053 75,540 6,888 82,428
</TABLE>
See notes to condensed consolidated financial statements.
30
<PAGE> 32
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(a) Reverses the historical management fee of $2,329, $6,888, $2,743 and $7,786
provided by the Network for the three and nine month periods ended
September 30, 1995 and September 30, 1996, respectively. The pro forma
adjustment for the effect of eliminating the historical cost sharing
arrangements has not been presented because the historical license fee, net
of the historical cost sharing, approximates the license fee on a pro forma
basis.
(b) Represents the amortization of an additional $203,044 of goodwill arising
from the Company's acquisition of minority interest, that occurred as part
of the Reorganization, as if the acquisition had occurred as of January 1,
1995. The goodwill is being amortized over 20 years.
(c) Represents the reversal of the historical interest expense related to the
refinanced debt and records the interest expense of $8,869, $27,225, $7,941
and $24,595 for the three and nine month periods ended September 30, 1995
and September 30, 1996, respectively, relating to the borrowings under the
New Bank Facility incurred in connection with the Reorganization.
(d) Represents the reversal of the historical amortization of deferred financing
costs relating to refinanced debt and amortization of $308, $926, $308 and
$926 recorded for the three and nine month periods ended September 30, 1995
and September 30, 1996, respectively, related to the $8,645 pro forma
deferred financing costs related to the borrowings under the New Bank
Facility incurred in connection with the Reorganization.
(e) Eliminates the historical effect of preferred stock dividends to minority
stockholders of PTIH, related party debt interest expense and the minority
interest participation in the income (loss) applicable to common
stockholders.
(f) No provision for income taxes (other than certain state income taxes) has
been recorded on a pro forma basis for the three and nine months ended
September 30, 1996 and the three months ended September 30, 1995 because the
historical debt is assumed to be extinguished as of January 1, 1995,
resulting in the recording of an extraordinary loss on the extinguishment of
debt (net of income tax benefits), at January 1, 1995, and the utilization
of previously unrecognized net operating losses. The provision for income
taxes included in the unaudited pro forma consolidated condensed statements
of operations for the nine months ended September 30, 1995 is based on an
effective tax rate of 40%. This tax provision, presented on a pro forma
basis, is offset by an income tax benefit arising from the extraordinary
loss on the extinguishment of debt.
(g) Pro forma weighted average common shares outstanding for the three and nine
months ended September 30, 1996 and September 30, 1995 include the effects
of outstanding warrants with an exercise price of $0.13 per share. The
warrants are considered Common Stock equivalents and impact primary weighted
average common shares outstanding by the number of shares issuable upon
exercise of the warrants less the number of shares that could have been
repurchased by the Company with the proceeds from the exercise of the
warrants based on the price of Common Stock described below. As there was no
market for the Common Stock during the periods presented, the public
offering price of $23.00 per share was utilized for all periods.
31
<PAGE> 33
Weighted average common shares outstanding have been calculated as follows:
<TABLE>
<CAPTION>
PRO FORMA
-----------
<S> <C>
Pro forma weighted average common shares outstanding $ 126,666
Reorganization stock dividend (227.010528 shares
for each common share) 28,754,515
Reorganization shares issued 4,335,499
Public offering shares issued 8,170,000
Additional shares issued to underwriters 1,225,500
-----------
Weighted average common shares before dilutive effect
of common stock equivalents 42,612,180
-----------
Common stock equivalents:
Warrants 14,440,820
Consideration upon exercise of warrants
($0.1288 for each warrant) $1,859,978
Less: Repurchased shares with proceeds from warrants
(assuming $23 per share) (80,869)
-----------
Common stock equivalents 14,359,951
-----------
Weighted average common shares $56,972,131
===========
</TABLE>
32
<PAGE> 34
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.0 Computation of Primary and Fully Diluted Earnings Per
Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
The registrant did not file any reports on Form 8-K during
the quarter.
33
<PAGE> 35
EXHIBIT 11
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
COMPUTATION OF HISTORICAL PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
(Restated) (Restated)
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Income (loss) before extraordinary loss on
extinguishment of debt $ 2,458 $ (1,271) $ 3,352 $ (2,945)
Extraordinary loss on extinguishment of debt (10,913) (433) (11,558) (433)
----------- ----------- ----------- ----------
Net loss applicable to common stock $ (8,455) $ (1,704) $ (8,206) $ (3,378)
----------- ----------- ----------- ----------
NUMBER OF SHARES ON WHICH NET LOSS PER SHARE IS BASED:
Historical weighted average common shares outstanding 10,000 10,000 10,000 10,000
Reorganization stock dividend (227.010528 shares
for each common share) 2,270,105 2,270,105 2,270,105 2,270,105
----------- ----------- ------------ ----------
Weighted average common shares before
dilutive effect of common stock equivalents 2,280,105 2,280,105 2,280,105 2,280,105
----------- ----------- ------------ ----------
Common stock equivalents:
Warrants 14,440,820 - 14,440,820 -
Consideration upon exercise of warrants
($0.1288 for each warrant) $1,859,978
Less: Repurchased shares with proceeds from warrants
(assuming $23 per share) (80,869) - (80,869) -
----------- ------------ ----------- ----------
Common stock equivalents 14,359,951 - 14,359,951 -
----------- ----------- ----------- ----------
Pro forma weighted average common shares 16,640,056 2,280,105 (a) 16,640,056 2,280,105 (a)
=========== =========== =========== ==========
PRIMARY EARNINGS PER SHARE:
Income (loss) per share before extraordinary loss $ 0.15 $ (0.56) $ 0.20 $(1.29)
Extraordinary loss (0.66) (0.19) (0.69) (0.19)
----------- ----------- ----------- -----------
Net loss per share $(0.51) $ (0.75) $(0.49) $(1.48)
=========== =========== =========== ===========
FULLY DILUTED EARNINGS PER SHARE (b)
Income (loss) before extraordinary loss on
extinguishment of debt $ 2,458 $ (1,271) $ 3,352 $ (2,945)
Extraordinary loss on extinguishment of debt (10,913) (433) (11,558) (433)
----------- ----------- ---------- ----------
Net loss applicable to common stock $ (8,455) $ (1,704) $ (8,206) $ (3,378)
----------- ----------- ---------- ----------
NUMBER OF SHARES ON WHICH NET LOSS PER SHARE IS BASED:
Historical weighted average common shares outstanding 10,000 10,000 10,000 10,000
Reorganization stock dividend (227.010528 shares
for each common share) 2,270,105 2,270,105 2,270,105 2,270,105
----------- ----------- ----------- -----------
Weighted average common shares before dilutive
effect of common stock equivalents 2,280,105 2,280,105 2,280,105 2,280,105
----------- ----------- ----------- -----------
Common stock equivalents:
Warrants 14,440,820 - 14,440,820 -
Consideration upon exercise of warrants
($0.1288 for each warrant) $1,859,978
Less: Repurchased shares with proceeds from warrants
(assuming $23 per share) (80,869) - (80,869) -
----------- ----------- ---------- -----------
Common stock equivalents 14,359,951 - 14,359,951 -
----------- ----------- ----------- -----------
Pro forma weighted average common shares 16,640,056 2,280,105 (a) 16,640,056 2,280,105 (a)
=========== =========== =========== ===========
FULLY DILUTED EARNINGS PER SHARE:
Income (loss) per share before extraordinary loss $ 0.15 $ (0.56) $ 0.20 $ (1.29)
Extraordinary loss per share (0.66) (0.19) (0.69) (0.19)
---------- ----------- ---------- -----------
Net loss per share $ (0.51) $ (0.75) $ (0.49) $ (1.48)
=========== =========== =========== ===========
</TABLE>
(a) For the three and nine months ended September 30, 1995, losses were
generated before extraordinary loss on extinguishment of debt and the
warrants were excluded from the weighted average common shares outstanding
since their effect were anti-dilutive.
(b) This calculation is presented in accordance with the Securities Exchange
Act of 1934, although it is not required disclosure under APB Opinion No.
15.
See notes to condensed consolidated financial statements.
<PAGE> 36
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIVISION COMMUNICATIONS INC.
(Registrant)
By /s/ George W. Blank
----------------------------------
November 13, 1996 George W. Blank
Los Angeles, California Executive Vice President and
Chief Financial Officer
34
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIVISION
COMMUNICATIONS INC. AND SUBSIDIARIES STATEMENTS OF EARNINGS AND BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 93,462
<SECURITIES> 0
<RECEIVABLES> 38,611
<ALLOWANCES> 4,761
<INVENTORY> 0
<CURRENT-ASSETS> 176,173
<PP&E> 47,593
<DEPRECIATION> 18,707
<TOTAL-ASSETS> 646,808
<CURRENT-LIABILITIES> 66,970
<BONDS> 379,247
0
1
<COMMON> 23
<OTHER-SE> (88,123)
<TOTAL-LIABILITY-AND-EQUITY> 646,808
<SALES> 139,882
<TOTAL-REVENUES> 139,882
<CGS> 24,600
<TOTAL-COSTS> 24,600
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,593
<INTEREST-EXPENSE> 32,206
<INCOME-PRETAX> 5,587
<INCOME-TAX> 2,235
<INCOME-CONTINUING> 3,352
<DISCONTINUED> 0
<EXTRAORDINARY> (11,558)
<CHANGES> 0
<NET-INCOME> (8,206)
<EPS-PRIMARY> (.49)
<EPS-DILUTED> (.49)
</TABLE>
