<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 JUNE 30, 1999 COMMISSION FILE NUMBER: 001-12223
------------------------
UNIVISION COMMUNICATIONS INC.
(Exact Name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE NO. 95-4398884
(State of Incorporation) (I.R.S. Employer Identification)
</TABLE>
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 /X/ No / /
.
There were 63,184,851 shares of Class A Common Stock, 19,981,045 shares of
Class P Common Stock, 9,400,992 shares of Class T Common Stock and 8,918,582 of
Class V Common Stock outstanding as of July 14, 1999.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C> <C>
PART I--FINANCIAL INFORMATION:
Financial Introduction................................................
2
Item 1. Consolidated Financial Statements
Condensed Consolidated Balance Sheets
at June 30, 1999 and December 31, 1998.................... 3
Condensed Consolidated Statements of Operations
for the three and six months ended June 30, 1999 and
1998...................................................... 4
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1999 and 1998........... 5
Notes to the Condensed Consolidated Financial Statements.... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 8
Item 3. Quantitative and Qualitative Disclosures About Market
Risk...................................................... 16
PART II--OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders......... 17
Item 6. Exhibits and Reports on form 8-K............................ 17
</TABLE>
1
<PAGE>
PART I
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FINANCIAL INTRODUCTION
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
in the Company's Annual Report on Form 10-K for December 31, 1998.
2
<PAGE>
PART I, ITEM 1
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:...................................
Cash and cash equivalents....................... $ 14,398 $ 12,966
Accounts receivable, net........................ 124,163 118,408
Program rights.................................. 7,155 5,081
Prepaid expenses and other...................... 14,991 17,536
----------- ------------
Total current assets.......................... 160,707 153,991
Property and equipment, net....................... 144,352 144,496
Intangible assets, net............................ 570,420 592,224
Deferred financing costs, net..................... 6,123 6,843
Deferred income taxes............................. 19,337 22,635
Program rights, less current portion.............. 5,363 5,398
Note receivable-Entravision....................... 10,000 10,000
Investment in unconsolidated affiliate............ 800 67
Other assets...................................... 4,765 2,675
----------- ------------
Total assets.................................. $921,867 $938,329
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities........ $ 70,834 $ 75,129
Accrued interest................................ 512 641
Accrued license fee............................. 8,121 7,572
Obligations for program rights.................. 487 438
Current portion of long-term debt............... 73,094 69,111
----------- ------------
Total current liabilities..................... 153,048 152,891
Long-term debt including accrued interest, less
current portion................................. 289,440 343,401
Capital lease obligations, less current portion... 32,490 34,034
Other long-term liabilities....................... 4,813 4,265
----------- ------------
Total liabilities............................. 479,791 534,591
----------- ------------
Redeemable convertible 6% preferred stock, $.01
par value, with a conversion price of $16.34375
to Class A Common Stock (9,000 shares issued and
outstanding at June 30, 1999 and December 31,
1998)........................................... 9,090 9,090
----------- ------------
Stockholders' equity:
Preferred stock, $.01 par value (10,000,000
shares authorized)............................ -- --
Common stock, $.01 par value (492,000,000 shares
authorized; 101,459,470 and 90,916,170 shares
issued including shares in treasury at June
30, 1999 and December 31, 1998,
respectively)................................. 1,015 909
Paid-in-capital................................. 400,042 388,772
Retained earnings............................... 49,331 22,369
----------- ------------
450,388 412,050
Less common stock held in treasury (464,051
shares at cost at June 30, 1999 and December
31, 1998)..................................... (17,402) (17,402)
----------- ------------
Total stockholders' equity...................... 432,986 394,648
----------- ------------
Total liabilities and stockholders' equity...... $921,867 $938,329
----------- ------------
----------- ------------
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
1999 1998 1999 1998
-------------- ------------ -------------- ------------
Net revenues......................................... $ 172,432 $ 173,536 $ 310,471 $ 278,681
Direct operating expenses............................ 59,048 69,476 111,837 111,817
Selling, general and administrative expenses......... 47,063 46,032 89,551 82,183
Depreciation and amortization........................ 15,377 15,872 30,618 31,432
-------------- ------------ -------------- ------------
Operating income..................................... 50,944 42,156 78,465 53,249
Interest expense..................................... 6,940 9,260 14,647 18,765
Special bonus award.................................. -- 42,608 -- 42,608
Equity loss in unconsolidated affiliate.............. 134 343 272 343
Amortization of deferred financing costs............. 360 419 720 839
-------------- ------------ -------------- ------------
Income (loss) before taxes and extraordinary loss on
extinguishment of debt............................. 43,510 (10,474) 62,826 (9,306)
Provision (benefit) for income taxes................. 22,900 (7,471) 32,983 (6,793)
-------------- ------------ -------------- ------------
Income (loss) before extraordinary loss on
extinguishment of debt............................. 20,610 (3,003) 29,843 (2,513)
Extraordinary loss on extinguishment of debt
(including a tax provision of $246)................ -- -- (2,611) --
-------------- ------------ -------------- ------------
Net income (loss).................................... 20,610 (3,003) 27,232 (2,513)
Preferred stock dividends............................ (135) (156) (270) (336)
-------------- ------------ -------------- ------------
Net income (loss) available to common stockholders... $ 20,475 $ (3,159) $ 26,962 $ (2,849)
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
BASIC EARNINGS PER SHARE
Income (loss) per share available to common
stockholders before extraordinary loss............. $ 0.22 $ (0.04) $ 0.32 $ (0.03)
Extraordinary loss per share......................... -- -- (0.03) --
-------------- ------------ -------------- ------------
Net income (loss) per share available to common
stockholders....................................... $ 0.22 $ (0.04) $ 0.29 $ (0.03)
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
Weighted average common shares outstanding........... 92,310,092 85,828,141 91,483,902 85,769,731
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
DILUTED EARNINGS PER SHARE
Income (loss) per share available to common
stockholders before extraordinary loss............. $ 0.17 $ (0.04) $ 0.25 $ (0.03)
Extraordinary loss per share......................... -- -- (0.02) --
-------------- ------------ -------------- ------------
Net income (loss) per share available to common
stockholders....................................... $ 0.17 $ (0.04) $ 0.23 $ (0.03)
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
Weighted average common shares outstanding........... 117,928,845 85,828,141 117,490,766 85,769,731
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Net income (loss)........................................................................... $ 27,232 $ (2,513)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation................................................................................ 11,029 9,718
Loss on sale of fixed assets................................................................ 197 3
Equity loss in unconsolidated subsidiary.................................................... 272 343
Amortization of intangible assets and deferred financing costs.............................. 20,309 22,553
Non-cash portion of special bonus award..................................................... -- 27,609
Extraordinary loss on extinguishment of debt................................................ 2,611 --
Changes in assets and liabilities:
Accounts receivable....................................................................... (5,755) (23,111)
License fees payable...................................................................... 46,224 35,200
Payment of license fees................................................................... (45,675) (34,647)
Program rights............................................................................ (2,039) (579)
Intangible assets......................................................................... (25) --
Deferred taxes............................................................................ 3,298 (7,393)
Prepaid expenses and other assets......................................................... 2,695 (2,506)
Accounts payable and accrued liabilities.................................................. 1,193 (880)
Accrued interest.......................................................................... 4,047 3,960
Obligations for program rights............................................................ 49 5,915
Other, net................................................................................ 721 (478)
--------- ---------
Net cash provided by operating activities................................................... 66,383 33,194
--------- ---------
Cash flow from investing activities:
Capital expenditures...................................................................... (12,370) (18,432)
Investment in unconsolidated affiliate.................................................... (1,000) (827)
Proceeds from sale of Albuquerque station................................................. 1,000 --
Other..................................................................................... 1 12
--------- ---------
Net cash used in investing activities....................................................... (12,369) (19,247)
--------- ---------
Cash flow from financing activities:
Proceeds from issuance of long-term debt.................................................. 59,000 63,000
Payments of long-term debt................................................................ (99,310) (66,750)
Exercise of options....................................................................... 5,996 1,547
Exercise of warrants...................................................................... -- 47
Preferred stock dividends paid............................................................ (270) (366)
Repurchase of Junior Subordinated Notes................................................... (17,998) --
--------- ---------
Net cash used in financing activities....................................................... (52,582) (2,522)
--------- ---------
Net increase in cash........................................................................ 1,432 11,425
Cash and cash equivalents, beginning of year................................................ 12,966 10,660
--------- ---------
Cash and cash equivalents, end of period.................................................... $ 14,398 $ 22,085
--------- ---------
--------- ---------
Supplemental disclosure of cash flow information:
Interest paid during the period........................................................... $ 10,560 $ 14,865
--------- ---------
--------- ---------
Non-cash exercise of warrants (see note 2)................................................ $ -- $ --
--------- ---------
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
1. ORGANIZATION OF THE COMPANY
Univision Communications Inc. ("Univision" or "the Company") is the leading
Spanish-language television broadcast company in the United States. The Company
and its subsidiaries include the Univision Network (the "Network"), the
most-watched Spanish-language television network in the United States; Univision
Television Group ("UTG"), which owns and operates 12 full-power and seven
low-power television stations (the "O&Os"), including full-power stations in 11
of the top 15 U.S. Hispanic markets; and Galavision, the country's leading
Spanish-language cable network. Univision's signal reaches 92 percent of all
U.S. Hispanic households through its owned-and-operated stations, broadcast
affiliates and cable affiliates.
The Company's 11 full-power Spanish-language television stations are located
in New York, Los Angeles, Miami, San Antonio, San Francisco, Fresno, Dallas,
Phoenix, Sacramento, Houston and Chicago and one English-language, full-power
television station is located in Bakersfield. The Company also owns and operates
seven Spanish-language, low-power television stations serving Hartford, Fort
Worth, Philadelphia, Tucson, Austin, Santa Rosa and Bakersfield. The Company's
Spanish-language television stations are affiliated with the Network and the
English-language station is affiliated with United Paramount Network (UPN).
2. OPTIONS & WARRANTS
During the three months ended June 30, 1999, options were exercised for
73,100 shares of Class A Common Stock, resulting in an increase to Common Stock
of $731 and an increase to Paid-in-capital of $2,448,157, which included a tax
benefit associated with the transactions of $1,107,700. For the six months ended
June 30, 1999, options were exercised for 435,600 shares of Class A Common
Stock, resulting in an increase to Common Stock of $4,356 and an increase to
Paid-in-capital of $11,371,619, which included a tax benefit associated with the
transactions of $5,379,600. During the three months ended June 30, 1999,
warrants were exercised for 711,450 shares of Class A Common Stock and 9,395,250
shares of Class T Common Stock, resulting in an increase to Common Stock of
$101,067 and a decrease to Paid-in-capital for the same amount. Instead of cash,
the Company received 11,502 warrants as consideration for the exercise; the
warrants were retired by the Company.
3. CABLE NETWORK ACQUISITION
On June 24, 1999, the Company signed a letter of intent with Cox
Communications NCC, Inc. and Empresas 1BC to acquire all of the outstanding
partnership interests of GEMS International Television, a general partnership.
The non-binding purchase price is $39,000,000 and is subject to regulatory
approvals and the successful completion of a definitive purchase agreement.
4. EARLY EXTINGUISHMENT OF DEBT
During the six months ended June 30, 1999, the Company purchased at a
premium $14,074,000 face amount of its Junior Subordinated Notes, resulting in
an extraordinary loss of $2,610,719, including a related income tax provision of
$245,739. The tax provision was due to an extraordinary tax gain resulting from
a higher permanent discounted note basis for tax versus book purposes.
6
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1999
(UNAUDITED)
5. EARNINGS PER SHARE
The following is the reconciliation of the numerators and the denominators
of the basic and diluted earnings-per-share computations for "Income (loss)
before extraordinary items" required by SFAS No. 128 (Earnings Per Share):
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, 1999 THREE MONTHS ENDED JUNE 30, 1998
-------------------------------------- --------------------------------------
INCOME SHARES PER-SHARE INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT (NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------ ----------- ----------- ------------ -----------
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE AND PER-SHARE DATA):
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before extraordinary
items............................. $ 20,610 $ (3,003)
Less preferred stock dividends...... (135) (156)
----------- -----------
Basic Earnings Per Share:
Income (loss) before extraordinary
items per share available to
common stockholders............... 20,475 92,310,092 $ 0.22 (3,159) 85,828,141 $ (0.04)
----- -----------
----- -----------
Effect of Dilutive Securities
Warrants............................ -- 22,386,788 -- --(a)
Options............................. -- 2,681,296 -- --(a)
Convertible Preferred Stock......... 135 550,669 156 --(a)
----------- ------------ ----------- ------------
Diluted Earnings Per Share:
Income (loss) before extraordinary
items per share available to
common stockholders............... $ 20,610 117,928,845 $ 0.17 $ (3,003) 85,828,141 $ (0.04)
----------- ------------ ----- ----------- ------------ -----------
----------- ------------ ----- ----------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1999 SIX MONTHS ENDED JUNE 30, 1998
-------------------------------------- --------------------------------------
INCOME SHARES PER-SHARE INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT (NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------ ----------- ----------- ------------ -----------
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE AND PER-SHARE DATA):
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before extraordinary
items............................. $ 29,843 $ (2,513)
Less preferred stock dividends...... (270) (336)
----------- -----------
Basic Earnings Per Share:
Income (loss) before extraordinary
items per share available to
common stockholders............... 29,573 91,483,902 $ 0.32 (2,849) 85,769,731 $ (0.03)
----- -----------
----- -----------
Effect of Dilutive Securities
Warrants............................ -- 23,094,092 -- --(a)
Options............................. -- 2,362,103 -- --(a)
Convertible Preferred Stock......... 270 550,669 336 --(a)
----------- ------------ ----------- ------------
Diluted Earnings Per Share:
Income (loss) before extraordinary
items per share available to
common stockholders............... $ 29,843 117,490,766 $ 0.25 $ (2,513) 85,769,731 $ (0.03)
----------- ------------ ----- ----------- ------------ -----------
----------- ------------ ----- ----------- ------------ -----------
</TABLE>
- ------------------------
(a) The Company reported a loss before extraordinary loss on extinguishment of
debt. Therefore, the options, warrants and convertible preferred stock were
excluded from the calculation of diluted EPS since the inclusion of the
potential shares would be antidilutive.
7
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
PART I, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The Company'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's net revenues include gross advertising revenues generated from the
sale of Network advertising, net of agency commissions and station compensation
to its broadcast affiliates. Also included in net revenues are Galavision's
gross advertising revenues, net of agency commissions, its subscriber fee
revenues and miscellaneous revenues.
Direct operating expenses consist of programming, news and general operating
costs.
"Broadcast cash flow" means operating income plus depreciation and
amortization and corporate charges, which are corporate costs that would be
duplicated and therefore eliminated if the Company were acquired by another
broadcasting company. "EBITDA" means earnings before interest, taxes,
depreciation and amortization and non-recurring charges and is the sum of
operating income plus depreciation and amortization. The Company has included
broadcast cash flow and EBITDA data because such data are commonly used as a
measure of performance for broadcast companies and are also used by investors to
measure a company's ability to service debt. Broadcast cash flow and EBITDA are
not, and should not be used as, indicators or alternatives to operating income,
net income or cash flow as reflected in the consolidated financial statements,
are not a measure of financial performance under generally accepted accounting
principles and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with generally accepted
accounting principles.
SIX MONTHS ENDED JUNE 30, 1999 ("1999"), COMPARED TO SIX MONTHS ENDED JUNE 30,
1998 ("1998")
REVENUES. Net revenues were $310,471,000 in 1999 compared to $278,681,000
in 1998, an increase of $31,790,000 or 11.4%. The Network accounted for
$14,200,000 or 44.7% of the increase, and the O&Os and Galavision accounted for
$15,295,000 or 48.1% and $2,295,000 or 7.2%, respectively. The Network's
increase is due primarily to an increase of approximately 11% in the average
price of advertising spots and a decrease in volume of approximately 2%.
Excluding the effect of the 1998 Men's World Cup Soccer Championship Games, the
Network's average prices would have increased by 29%. The O&Os' increase of
$15,295,000, on a same station basis, after adjusting for the March 31, 1999
sale of the Albuquerque station, was $15,915,000. This increase at the O&Os is
due primarily to an increase of approximately 6% in the number of spots sold and
a 6% increase in the price for advertising spots. Exclusive of the World Cup
Games, prices would have increased by 11%. While there were increases at all the
O&Os, except at the Fresno station, the primary increases were derived from New
York, Miami, Houston, Los Angeles, and San Antonio.
EXPENSES. Direct operating expenses, which include corporate charges of
$168,000 and $152,000 in 1999 and 1998, respectively, increased to $111,837,000
in 1999 from $111,817,000 in 1998, an increase of $20,000. The increase is a
result of higher license fees paid or payable, under the program license
agreements, to Televisa and Venevision of $11,024,000 resulting from higher
sales. The new programs associated with the Company's non-NOVELA production
participation agreement with Televisa accounted for approximately $4,361,000 of
the increase in programming costs over 1998. The remainder of the increase is
primarily due to higher technical and news costs of $3,216,000, which includes
approximately $526,000 of net cost increases due to the addition of early
morning news at the Los Angeles station. These increases were substantially
offset by the elimination of costs related to the1998 World Cup games of
$21,484,000. As a percentage of net revenues, direct operating expenses
decreased from 40.1% in 1998 to 36.0% in 1999.
8
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
Selling, general and administrative expenses, which include corporate
charges of $6,306,000 and $5,683,000 in 1999 and 1998, respectively, increased
to $89,551,000 in 1999 from $82,183,000 in 1998, an increase of $7,368,000 or
9%. The increase is due in part to increased selling costs of $2,507,000,
resulting from higher sales, increased severance and other compensation costs of
$1,214,000, increased promotional costs of $531,000 primarily related to
increased advertising and $590,000 due to increased employee benefits. As a
percentage of net revenues, selling, general and administrative expenses
decreased from 29.5% in 1998 to 28.8% in 1999.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased to
$30,618,000 in 1999 from $31,432,000 in 1998, a decrease of $814,000 or 2.6%.
The decrease is due to lower goodwill amortization offset in part by an increase
in depreciation related to increased capital expenditures.
OPERATING INCOME. As a result of the above factors, operating income
increased to $78,465,000 in 1999 from $53,249,000 in 1998, an increase of
$25,216,000 or 47.4%. As a percentage of net revenues, operating income
increased from 19.1% in 1998 to 25.3% in 1999.
INTEREST EXPENSE. Interest expense decreased to $14,647,000 in 1999 from
$18,765,000 in 1998, a decrease of $4,118,000 or 21.9%. The decrease is due
primarily to lower bank borrowings and lower interest rates during 1999 as
compared to 1998.
SPECIAL BONUS AWARD. On May 13, 1998 a major stockholder contributed
1,354,665 shares of Class P Common Stock to the Company, which were converted to
Class A Common Shares and placed in the Company's treasury. On May 27, 1998,
under the Univision Communications Inc. 1998 Stock Bonus Plan, the Company
granted 890,614 shares of Class A Common Stock to selected employees. These
transactions resulted in a pre-tax income statement charge of $42,608,000, which
consists of non-cash compensation of $27,609,000 and required tax withholdings
of $14,999,000, as well as an increase to paid-in-capital of $45,011,000. The
Company remitted the $14,999,000 of tax withholding and expected to receive a
cash income tax benefit of approximately $14,000,000. The net income effect on
the three and six months ended June 30, 1998 was $16,500,000, net of $26,108,000
of both the current and deferred tax benefits resulting from the special bonus
award. The Company has retained the remaining 464,051 shares, with a book value
of $17,402,000, in its treasury. Consistent with broadcast industry reporting,
broadcast cash flow and EBITDA exclude the total amount of this special bonus
award of $42,608,000.
PROVISION (BENEFIT) FOR INCOME TAXES. In 1999, the Company reported an
income tax provision of $32,983,000, representing $29,685,000 of current tax
expense and $3,298,000 of deferred tax expense. In 1998, the Company reported an
income tax benefit of $6,793,000, representing $600,000 of current tax expense
and $7,393,000 of a deferred tax benefit. The effective tax rate was 52.5% in
1999 and 73% in 1998. Excluding the effect of the special bonus award, the 1998
effective tax rate would have been 58%. The Company's effective tax rate of
52.5% for 1999 is lower than the 58% for 1998 since the Company's relatively
fixed permanent non-deductible tax differences have a smaller effect as book
pre-tax income increases.
NET INCOME (LOSS). As a result of the above factors, net income in 1999 was
$27,232,000 compared to a net loss of $2,513,000 in 1998, an increase of
$29,745,000.
BROADCAST CASH FLOW. Broadcast cash flow increased to $115,557,000 in 1999
from $90,516,000 in 1998, an increase of $25,041,000 or 27.7%. As a percentage
of net revenues, broadcast cash flow increased from 32.5% in 1998 to 37.2% in
1999.
9
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
CORPORATE CHARGES. Corporate charges increased to $6,474,000 in 1999 from
$5,835,000 in 1998, an increase of $639,000 or 11%. The increase is primarily
due to costs associated with compensation and benefits. As a percentage of net
revenues, corporate charges were 2.1% in 1998 and in 1999.
EBITDA. EBITDA increased to $109,083,000 in 1999 from $84,681,000 in 1998,
an increase of $24,402,000 or 28.8%. As a percentage of net revenues, EBITDA
increased from 30.4% in 1998 to 35.1% in 1999.
THREE MONTHS ENDED JUNE 30, 1999 ("1999"), COMPARED TO THREE MONTHS ENDED JUNE
30, 1998 ("1998")
REVENUES. Net revenues were $172,432,000 in 1999 compared to $173,536,000
in 1998, a decrease of $1,104,000 or .6%. The Network and the O&Os accounted for
$2,149,000 or 194.7% and $264,000 or 23.9% of the decrease, respectively. These
decreases were offset by increased revenues at Galavision of $1,309,000 or
118.6%. The Network's decrease is due primarily to an approximate 8% decline in
volume, while the average price of advertising spots remained essentially flat.
Excluding the effect of the 1998 Men's World Cup Soccer Championship Games, the
Network's average prices would have increased by 20%. The O&Os' decrease of
$264,000 includes a decrease of $730,000 due to the disposition of the
Albuquerque station on March 31, 1999. On a comparable basis net revenues for
the O&Os would have increased by $466,000. This increase at the O&Os is due
primarily to an increase of approximately 4% in the number of spots sold and a
3% increase in the price for advertising spots. Exclusive of the World Cup
Games, prices would have increased by 12%. The increases at the O&Os were
primarily derived from the stations in New York, Houston, Dallas, Miami, and San
Antonio, offset in part by declines in Los Angeles, San Francisco and Fresno.
EXPENSES. Direct operating expenses, which include corporate charges of
$87,000 and $69,000 in 1999 and 1998, respectively, decreased to $59,048,000 in
1999 from $69,476,000 in 1998, a decrease of $10,428,000 or 15%. The decrease is
due primarily to the elimination of costs related to the 1998 World Cup games of
$21,484,000. Higher sales resulted in increased license fees paid or payable,
under the program license agreements, to Televisa and Venevision of $5,727,000.
The new programs associated with the Company's non-NOVELA production
participation agreement with Televisa accounted for approximately $2,122,000 of
the increase in programming costs over 1998. The remainder of the increase is
primarily due to higher technical and news costs of $1,359,000, which includes
approximately $326,000 of net cost increases due to the addition of early
morning news at the Los Angeles station. As a percentage of net revenues, direct
operating expenses decreased from 40.0% in 1998 to 34.2% in 1999.
Selling, general and administrative expenses, which include corporate
charges of $3,206,000 and $3,124,000 in 1999 and 1998, respectively, increased
to $47,063,000 in 1999 from $46,032,000 in 1998, an increase of $1,031,000 or
2.2%. The increase is due in part to increased selling costs of $593,000,
resulting from higher sales, and $292,000 due to increased employee benefits. As
a percentage of net revenues, selling, general and administrative expenses
increased from 26.5% in 1998 to 27.3% in 1999.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased to
$15,377,000 in 1999 from $15,872,000 in 1998, a decrease of $495,000 or 3.1%.
The decrease is due to lower goodwill amortization offset in part by an increase
in depreciation related to increased capital expenditures.
OPERATING INCOME. As a result of the above factors, operating income
increased to $50,944,000 in 1999 from $42,156,000 in 1998, an increase of
$8,788,000 or 20.8%. As a percentage of net revenues, operating income increased
from 24.3% in 1998 to 29.5% in 1999.
10
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
INTEREST EXPENSE. Interest expense decreased to $6,940,000 in 1999 from
$9,260,000 in 1998, a decrease of $2,320,000 or 25.1%. The decrease is due
primarily to lower bank borrowings and lower interest rates during 1999 as
compared to 1998.
SPECIAL BONUS AWARD. On May 13, 1998 a major stockholder contributed
1,354,665 shares of Class P Common Stock to the Company, which were converted to
Class A Common Shares and placed in the Company's treasury. On May 27, 1998,
under the Univision Communications Inc. 1998 Stock Bonus Plan, the Company
granted 890,614 shares of Class A Common Stock to selected employees. These
transactions resulted in a pre-tax income statement charge of $42,608,000, which
consists of non-cash compensation of $27,609,000 and required tax withholdings
of $14,999,000, as well as an increase to paid-in-capital of $45,011,000. The
Company remitted the $14,999,000 of tax withholding and expected to receive a
cash income tax benefit of approximately $14,000,000. The net income effect on
the three and six months ended June 30, 1998 was $16,500,000, net of $26,108,000
of both the current and deferred tax benefits resulting from the special bonus
award. The Company has retained the remaining 464,051 shares, with a book value
of $17,402,000, in its treasury. Consistent with broadcast industry reporting,
broadcast cash flow and EBITDA exclude the total amount of this special bonus
award of $42,608,000.
PROVISION (BENEFIT) FOR INCOME TAXES. In 1999, the Company reported an
income tax provision of $22,900,000, representing $20,358,000 of current tax
expense and $2,542,000 of deferred tax expense. In 1998, the Company reported an
income tax benefit of $7,471,000, representing $191,000 of current tax expense
and $7,662,000 of a deferred tax benefit. The effective tax rate was 52.6% in
1999 and 71.3% in 1998. Excluding the effect of the special bonus award, the
1998 effective tax rate would have been 58%. The Company's effective tax rate of
52.6% for 1999 is lower than the 58% for 1998 since the Company's relatively
fixed permanent non-deductible tax differences have a smaller effect as book
pre-tax income increases.
NET INCOME (LOSS). As a result of the above factors, net income in 1999 was
$20,610,000 compared to a net loss of $3,003,000 in 1998, an increase of
$23,613,000.
BROADCAST CASH FLOW. Broadcast cash flow increased to $69,614,000 in 1999
from $61,221,000 in 1998, an increase of $8,393,000 or 13.7%. As a percentage of
net revenues, broadcast cash flow increased from 35.3% in 1998 to 40.4% in 1999.
CORPORATE CHARGES. Corporate charges increased to $3,293,000 in 1999 from
$3,193,000 in 1998, an increase of $100,000 or 3.1%. The increase is primarily
due to costs associated with compensation and benefits. As a percentage of net
revenues, corporate charges increased from 1.8% in 1998 to 1.9% in 1999.
EBITDA. EBITDA increased to $66,321,000 in 1999 from $58,028,000 in 1998,
an increase of $8,293,000 or 14.3%. As a percentage of net revenues, EBITDA
increased from 33.4% in 1998 to 38.5% in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company'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, which include those of UTG, the Network and
Galavision, totaled $12,370,000 for the six months ended June 30, 1999. This
amount excludes the capitalized transponder lease obligations of the Network. In
addition to performing normal capital maintenance and replacing several towers
and
11
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
antennas, the Company is also in the process of upgrading its management
information systems infrastructure and is expected to upgrade two of its
television station facilities during 1999. Furthermore, the Company expects to
make an investment in digital technology of approximately $25,000,000 over the
next three years. The Company also expects to spend approximately $6,000,000 in
capital over the next 6 to 12 months for the launch of its internet on-line
business in the early part of the year 2000. The timing of certain projects and
the internet launch will result in capital spending in 1999 of approximately
$50,000,000. In 2000, the Company will begin preparation for the relocation and
build-out of its flagship station in Los Angeles. The estimated costs and the
form of this transaction will be determined during 1999. Capital spending in
2000 will be approximately $40,000,000, exclusive of the relocation and
build-out of the Los Angeles station. Capital spending in 2001 and 2002 is
expected to approximate $35,000,000 per year.
The Company's bank facility at June 30, 1999, consisted of a $258,000,000
amortizing term loan (the "Term Facility") with a final maturity of December 31,
2003, and a $195,000,000 reducing revolving credit facility (the "Revolving
Credit Facility") also maturing on the same date. At June 30, 1999, the Company
had approximately $158,000,000 available to borrow through its Revolving Credit
Facility.
The Term Facility amortizes quarterly, with $46,000,000 required to be
repaid during 1999. For the six months ended June 30, 1999, the Company paid
$23,000,000 of the required payment and made a $20,000,000 prepayment against
its Term Facility as a result of its annual "excess cash flow" calculation based
on its 1998 operating results. These payments were funded by an increase in the
Revolving Credit Facility and subsequently repaid with cash from operations. The
Revolving Credit Facility has quarterly scheduled reductions in availability of
$2,500,000 per quarter during 1999.
Loans made under the Bank Facility bear interest, which includes interest
rate margin costs, 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"). The interest rate margins applicable to the Eurodollar
(Libor) loans range from 0.35% to 1.00% per annum. There are no interest rate
margins applicable to prime rate loans. At June 30, 1999, the interest rate
applicable to the Company's Eurodollar loans was approximately 5.67%, which
includes an interest rate margin cost of 0.35%, and the interest rate applicable
to all prime rate loans was 8%.
The Company's primary interest rate exposure results from changes in the
short-term interest rates applicable to the Company's Eurodollar loans. The
Company borrows at the U.S. prime rate from time to time but attempts to
maintain these loans at a minimum. Based on the Company's overall interest rate
exposure on its Eurodollar loans at June 30, 1999, a change of 10% in interest
rates would have an approximate $1,700,000 impact on pre-tax earnings and
pre-tax cash flows over a one-year period.
The Company's Univision Online division is evaluating business opportunities
presented by the internet, with a targeted goal of launching Online operations
(which include an e-commerce business component) in the early part of the year
2000. The Company anticipates EBITDA losses in the development stage of its
online operations. These losses are not expected to have a material impact on
the financial results of the Company.
On June 24, 1999, the Company signed a letter of intent with Cox
Communications NCC, Inc. and Empresas 1BC to acquire all of the outstanding
partnership interests of GEMS International Television, a general partnership.
The non-binding purchase price is $39,000,000 and is subject to regulatory
approvals and the successful completion of a definitive purchase agreement. The
purchase price and any acquisition costs are expected to be funded with cash
flow from operations and the Company's existing bank facility.
12
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
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 Bank Facility or proceeds from future debt or equity offerings, (ii) with
equity or debt securities of the Company or (iii) with any combination thereof.
As a result of net operating loss carryforwards, certain net operating
losses, tax consequences of a reorganization of the Company in 1996, other
timing differences and subsequent book taxable income, the Company has available
a deferred tax asset of $19,337,000 to offset future taxes payable arising from
operations. In addition, at June 30, 1999, the Company had $462,564,000 of net
remaining intangible assets that will be expensed over the next 20 years for
financial reporting purposes and will not be deductible for tax purposes.
In 1998, a joint venture between the Company and Home Shopping Network
Capital LLC formed the Home Shopping Network En Espanol LLC. The joint venture
has created a live, Spanish-language television shopping service intended for
distribution in the United States, Latin America, Portugal and Spain. On March
30, 1998, the Home Shopping Network En Espanol LLC began broadcasting three
hours of programming seven days a week on Galavision, the Company's
Spanish-language cable network. Under the terms of the agreement the Home
Shopping Network Capital LLC and the Company have approximately equal interests
in the joint venture. The Company's contribution to the joint venture during
1998 was $831,000 and during the first six months of 1999 was $1,000,000. The
capital contributions estimated to be required to be made by each party under
the agreement are $3,500,000 in 1999 and $1,669,000 in 2000, with a maximum
capital contribution limit of $6,000,000 over a five-year period. The Company
accounts for its investment in Home Shopping Network En Espanol LLC under the
equity method. No assurance can be given that the joint venture will be
successful.
YEAR 2000 ISSUES
Like most businesses today, the Company is reliant on computer systems and
other electronic and mechanical technologies in carrying out the operations of
the Network, O&Os and Galavision and managing its other resources. Some of the
Company's operations, such as signal distribution and television audience
ratings, are either carried out through or supported by third parties, while
approximately 50% of the Company's programming is sourced from third parties.
Approximately 76% of Univision's programming distribution (including commercial
spots) is provided through its O&Os with the remainder provided via its
broadcast and cable affiliates. Except for the Network and its Fresno, Miami,
Phoenix, Sacramento and San Antonio O&Os, which are located in Company-owned
properties, all other operations are situated in facilities leased from and
maintained by third parties.
The Company's business is primarily contracted through advertising agencies,
acting on behalf of advertisers, and to a lesser degree from direct local market
advertisers. No single advertiser represents more than 10% of the Company's
advertising revenues.
The sales order entry and Nielsen Media Research rating systems used by the
Company are mainframe-based. These systems are owned and maintained by
third-party vendors and located in such vendors' facilities. The remaining
computer systems of the Company are not mainframe-based and use standard
industry-specific software applications. The Year 2000 issue results from
computer software programs written to use two digits rather than four to define
the applicable year. Certain of the Company's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 instead
of the year 2000. Computer programs used by the Company's Suppliers (as defined
below) may experience the same date-recognition issues. If this occurs, the
potential exists for computer system failures
13
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
or miscalculations by computer programs used by the Company and its Suppliers,
which could cause disruption of the Company's operations.
Through its Year 2000 Project Office ("Project Office"), the Company
continues its effort to assess its Year 2000 readiness as well as that of its
advertisers, satellite service providers, programming suppliers, broadcast
affiliates, Nielsen rating service, landlords, and vendors and other suppliers
that may be critical to the Company's business (collectively, "Suppliers" unless
the context indicates otherwise). The Project Office is staffed with the
Company's two principal engineers and representatives from management
information systems and from the legal, risk management, finance, and operations
departments. An independent consulting firm with broadcasting systems
integration experience assisted with the assessment phase of the Company's Year
2000 program. Such firm is assisting the Company with the verification efforts
of its broadcasting systems and equipment.
In addressing its Year 2000 readiness, the Company has been engaged in a
five-part program that consists of the following:
- Assessment. This phase is three-fold. Part one is the location and
identification of all computer systems, software products, building
systems and equipment (with embedded systems) used within each operational
unit of the Company (the "Systems Inventory"). Part two is the
identification of mission-critical systems within each of the operational
units. Part three is the evaluation (including communicating with
manufacturers with respect to their equipment) of systems to determine
whether such systems will be able to process data before, on and after
January 1, 2000. Mission-critical systems have been given priority in the
evaluation process.
- Corrective Action. Systems and equipment that are non-compliant are being
retired, repaired or replaced. Mission-critical items are being given
priority.
- Verification. Corrective measures are to be verified by both current-date
and future-date testing. Any necessary remedial action identified during
this phase will be taken and verified. Mission-critical items are being
given priority.
- Communications. The Company implemented a communication program with its
Suppliers (1) to understand their Year 2000 issues, (2) to determine how
such issues could impact the Company's operations and (3) to determine the
Suppliers' Year 2000 mitigation plans to address or manage the issues that
relate to the Company's business and, with respect to landlords, the
leased facilities.
- Contingency Plans. Contingency plans are being formulated to continue
Network, O&O and Galavision broadcasting operations without significant
interruption prior to, during and after January 1, 2000.
Although work on the different parts of the Year 2000 program has been
taking place concurrently, the primary focus is on corrective action and
verification activities, particularly with respect to equipment (computer and
mechanical technology) that is critical to the Company's broadcasting operations
(signal, programming and commercial spot distribution on its Network, O&Os and
Galavision). The assessment of equipment critical to the Company's broadcasting
operations was completed in December 1998. The targeted date for the completion
of all phases of the Year 2000 program is September 30, 1999, subject to
Suppliers' responsiveness to the Company's inquiries of their Year 2000 issues
and timely delivery of certain Year 2000 compliant software. Verification
activities began in 1998 and will continue through 1999. The Company's
contingency planning efforts will continue into third quarter pending the
release of further Year 2000 readiness updates anticipated from several
Suppliers (including utility companies, municipalities, communications and
transportation companies) towards the second half of 1999.
14
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
STATUS OF YEAR 2000 ACTIVITIES
Based on the work completed through July 23, 1999 on the Year 2000 program:
- Equipment critical to the distribution of our broadcast signals (without
content) and for the insertion and delivery of content has been Year 2000
assessed. Approximately 95% of the corrective work identified in the
assessment phase has been completed. The remainder of the corrective work
identified for the mission critical equipment is scheduled for completion
by August 31, 1999, subject to the timely availability of Year 2000
software solutions from broadcast equipment vendors. The Company's major
satellite providers have informed the Company that the satellites carrying
the Network and Galavision feeds have been tested and are Year 2000 ready.
Corrective and testing work on the corresponding satellites' ground
systems is expected to be completed in the third quarter of 1999 for the
satellite carrying the Network feed and in the fourth quarter of 1999 for
the satellite carrying the Galavision feed.
- The systems critical to our sales, marketing and research operations have
been assessed. Corrective work identified in the assessment phase
continues with expected completion by September 30, 1999.
- The systems used in our administrative operations or by our outside
service providers (finance, payroll, benefits administration) have been
assessed. Corrective work identified in the assessment phase continues
with expected completion by September 30, 1999.
- The assessment efforts of our facilities' infrastructures (owned and
leased combined) is expected to continue through September 30, 1999.
Corrective work identified on Company-owned communications systems is
complete. Corrective work identified on Company-owned LAN and desktop
systems is being undertaken concurrently with the assessment activities
and is 85% complete. The assessment of HVAC, elevators, security and other
building systems in Company-owned facilities is complete. We continue to
work with management companies of leased facilities to ascertain their
Year 2000 readiness. Management companies have indicated that certain of
their vendors have not been responsive to their requests, and their
efforts to obtain such information continue.
- Of the total corrective work identified for all phases of our program,
approximately 75% has been completed. Capital expenditures as well as
personnel and non-personnel costs related to the Year 2000 program have
not been material. Although additional remedial and verification
activities remain to be completed, the Company does not expect that the
future costs related to the Company's internal Year 2000 issues will have
a material impact on the Company's operations, subject to completion of
the corrective work and contingency planning phases and the availability
of solutions from Suppliers. The Company will fund the costs to resolve
its Year 2000 issues primarily from its operating cash flow and, if
necessary, proceeds available under its Bank Facility.
The Company expects that its Systems will be operational and should not
experience significant disruptions due to Year 2000 issues. Because of the
uncertainties associated with assessing the preparedness of Suppliers, there is
a risk of a material adverse effect on the Company's future results of
operations if the Company's Suppliers are not capable of correcting their Year
2000 issues. The Company's major risk centers around its ability to transmit the
Network, O&Os and Galavision broadcast signals and satisfy the contractual
commitments to air the commercial spots of its advertisers. The Company's
contingency planning process is addressing these risks.
SEASONALITY
The advertising revenues of the Company 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,
15
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
FORM 10-Q
with the remainder split approximately equally between the second and third
quarters, exclusive of special programming such as the 1998 World Cup games.
Because of the relatively fixed nature of the costs of the Company's business,
seasonal variations in operating income are more pronounced than those of
revenues.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements (as defined under federal securities laws) made
by or on behalf of the Company. The Company and its representatives from time to
time may make certain verbal or written forward-looking statements regarding the
Company's performance, or events or developments the Company expects to occur or
anticipates occurring in the future. Information in this report may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 which can be identified by the use of
forward-looking terminology such as "will," "expects," "believes,"
"anticipates," "estimates," or "plans," or the negative thereof or other
variations thereon or comparable terminology. All such statements are based upon
current expectations of the Company and involve a number of business risks and
uncertainties. Actual results could vary materially from anticipated results
described in any forward-looking statement. Factors that could cause actual
results to vary materially include, but are not limited to, a lack of increase
in advertisers' spending on Univision, a decrease in the supply or quality of
programming, an increase in the cost of programming, a decrease in Univision's
ratings or audience share, an increase in preference among Hispanics for
English-language television, competitive pressures from other television
broadcasters and other entertainment and news media (some of whom use Televisa
programming), the potential impact of new technologies, changes in regional or
national economic conditions, Year 2000 issues and regulatory and other
obstacles to making acquisitions. Results actually achieved thus may differ
materially from expected results in these statements.
PART I
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is included in the "Liquidity and
Capital Resources" section of the Company's Management's Discussion and Analysis
of Financial Condition and Results of Operations contained in this document.
16
<PAGE>
UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders was held on May 25, 1999 at which
stockholders reelected Directors, an Alternate Director and also ratified the
appointment of Arthur Andersen LLP as the Company's independent public
accountant for the fiscal year 1999. The number of shares of the Company's Class
A, Class P, Class V and Series A Cumulative Convertible Preferred Stock ("Series
A") present at the meeting, by proxy or in person, collectively represented
96.9% of the voting interest of all shares of the aforementioned classes of
stock outstanding and eligible to vote at the Annual Meeting.
The holders of the Class A, Class P and Series A stock reelected all six
Class A/P Directors as follows:
<TABLE>
<CAPTION>
VOTES
NOMINEES VOTES FOR WITHHELD
- -------------------------------------------------------------- ------------- ----------
<S> <C> <C>
A. Jerrold Perenchio.......................................... 252,891,595 1,086,043
Henry Cisneros................................................ 247,501,708 6,475,930
Harold Gaba................................................... 252,917,429 1,060,209
Alan F. Horn.................................................. 252,917,629 1,060,009
John G. Perenchio............................................. 252,891,729 1,085,909
Ray Rodriguez................................................. 252,889,649 1,087,989
</TABLE>
The holders of the Class V Common Stock reelected Gustavo Cisneros as the
Class V Director and Alejandro Rivera as the Class V Alternate Director. All
8,918,582 shares of Class V Common Stock present at the meeting were voted in
favor of their reelection. Gustavo Cisneros and Henry Cisneros are not related.
Jose A. Baston Patino and Alfonso de Angoitia were elected as the Class T
Director and the Class T Alternate Director, respectively, effective as of
November 18, 1998 to fill the vacancies that resulted from Larry Dam's
resignation as the Class T Director and Emilio Romano's resignation as the
Alternate Class T Director. Messrs. Baston and de Angoitia will serve as Class T
Director and Class T Alternate until the earlier of their reelection (or their
successor's election) at the Company's next annual meeting, or their death or
resignation.
The votes cast by the holders of Class A, Class P, Class V and Series A for
the ratification of the appointment of Arthur Andersen LLP as the Company's
independent public accountant were as follows: 262,883,384 for and 7,323
withheld.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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.
17
<PAGE>
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.
<TABLE>
<S> <C> <C>
UNIVISION COMMUNICATIONS INC.
(Registrant)
By /s/ GEORGE W. BLANK
-----------------------------------
George W. Blank
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
</TABLE>
August 3, 1999
Los Angeles, California
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIVISION
COMMUNICATIONS INC. AND SUBSIDIARIES STATEMENTS OF EARNINGS AND BALANCE SHEET
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 14,398
<SECURITIES> 0
<RECEIVABLES> 132,713
<ALLOWANCES> 8,550
<INVENTORY> 0
<CURRENT-ASSETS> 160,707
<PP&E> 210,982
<DEPRECIATION> 66,630
<TOTAL-ASSETS> 921,867
<CURRENT-LIABILITIES> 153,048
<BONDS> 321,930
9,090
0
<COMMON> 1,015
<OTHER-SE> 431,971
<TOTAL-LIABILITY-AND-EQUITY> 921,867
<SALES> 310,471
<TOTAL-REVENUES> 310,471
<CGS> 111,837
<TOTAL-COSTS> 111,837
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 877
<INTEREST-EXPENSE> 14,647
<INCOME-PRETAX> 62,826
<INCOME-TAX> 32,983
<INCOME-CONTINUING> 29,843
<DISCONTINUED> 0
<EXTRAORDINARY> 2,611
<CHANGES> 0
<NET-INCOME> 27,232
<EPS-BASIC> 0.29
<EPS-DILUTED> 0.23
</TABLE>
