FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a or 15d - 16 of
the Securities Exchange Act of 1934
For the month of March 1998
Tevecap S.A.
(Exact Name as Specified in its Charter)
Tevecap Inc.
(Translation of Name into English)
SEC FILE NUMBER: 0-22267
Rua do Rocio, 313
Sao Paulo, SP Brazil
04552-904
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F ______
-----
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under Securities Exchange Act of 1934.
Yes _____ No X
-----
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with rule 12g3-2(b):82 N/A
<PAGE>
SIGNATURES
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.
TEVECAP S.A.
By: /s/ Jose Augusto P. Moreira
Jose Augusto P. Moreira
Officer
By: /s/ Claudio Cesar D'Emilio
Claudio Cesar D'Emilio
Officer
Date: March 6, 1998
<PAGE>
EXHIBIT LIST
1. One copy of the press release published on March 4, 1998, containing
relevant information on Tevecap S.A. for the twelve months ended
December 31, 1997, with financial information prepared in accordance
with Brazilian GAAP.
<PAGE>
Exhibit 1
Contact: Douglas Duran Marina Echavarria
Tevecap Ludgate Communications
(011 55 11) 821-8554 (212) 688-5144
TEVCAP ANNOUNCES FOURTH QUARTER
AND YEAR-END RESULTS
Sao Paulo, March 4th, 1998-- TEVECAP, S.A., (TVA) one of Brazil's largest and
fastest growing pay television operators and programming distributors, today
announced results for the twelve months ended December 31, 1997.
1997 Highlights
Consolidated net revenues for the twelve months ended December 31, 1997 reached
US$328.3 million, an increase of 66% versus US$198.1 million in 1996.
Subscription revenue for the twelve months amounted to US$221.2 million, a
growth of 80% versus US$123.0 million in 1996. Subscription revenue represented
67% of net revenue, versus 62% in the same period of 1996.
Installation revenue reached US$90.8 million in 1997, a growth of 47% versus
US$61.7 million in 1996. Installation revenue represented 28% of net revenue in
1997.
Direct operating expenses were US$174.1 million in 1997, a 55% increase as
compared to US$112.3 million in 1996. Direct operating expenses represented 53%
of net revenue, versus 57% in the same period of 1996.
Selling, general and administrative expenses for 1997 were US$119.1 million,
representing 36% of net revenue, as compared to US$81.5 million during 1996,
representing 41% of net revenue.
EBITDA totaled US$35.1 million in 1997, representing a growth of 710% versus
US$4.3 million during 1996.
Adjusted EBITDA for 1997 reached US$42.3 million, representing a growth of 359%
versus a US$9.2 million in 1996.
Total Operating Expenses for 1997 were US$355.8 million, a 59% increase versus
US$224.2 million in 1996.
Net loss for year end 1997 was US$81.4 million compared to a loss of US$47.9
million during 1996.
Capital expenditures (cash basis) amounted to US$242.9 million for 1997, a 61%
increase versus US$151.3 million during 1996.
Consolidated net revenues for fourth quarter 1997 reached US$86 million,
representing an increase of 30% compared to US$66.3 million during the same
quarter in 1996.
Total Operating Expenses for the fourth quarter 1997 increased by 33% from
US$73.9 million, during fourth quarter 1996, to US$98.0 million.
Net Loss for the fourth quarter was US$26.5 million compared to a loss of
US$11.2 million during the same period a year ago.
EBITDA totaled US$11.4 million in 4Q97, representing a growth of 514% versus
US$1.9 million in 4Q96, and a growth of 5% as compared to US$10.9 million in
3Q97.
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Tevcap, S.A. page 2/2
CONSOLIDATED RESULTS
Consolidated net revenues for the twelve-month period ended December 31, 1997
totaled US$328.3 million, a 66% growth versus US$198.0 million in 1996. The
increase in net revenues continues the strong, steady revenue growth the Company
has consistently demonstrated. Revenues consist primarily of subscription fees
but also include, installation, advertising, indirect programming and other
revenues, excluding taxes.
Subscription revenues were 67% of net revenues and amounted to US$221.2 million
in 1997, up 80% from US$123.0 million in 1996. Subscription revenue by
distribution technology is divided as follows: MMDS 52%, Cable 13%, C-band 11%,
and Ku-band 24%. Revenue increased as a result of an expanded subscriber base
and a higher percentage of Ku-band subscribers. The Ku-band has a higher monthly
fee than other technologies.
<TABLE>
<CAPTION>
Subscription Revenue ($000)
Technology 1997 % 1996 % Change %
- ---------- ---- - ---- - --------
<S> <C> <C> <C> <C>
MMDS 115,707 52% 100,830 82% 15%
Cable 27,755 13% 6,855 5% 305%
C-Band 25,304 11% 13,069 11% 94%
Ku-band 52,468 24% 2,266 2% 2215%
Total 221,234 100% 123,020 100% 80%
Subscription Revenue ($000)
Technology 4Q97 % 3Q97 % Change %
- ---------- ---- - ---- - --------
MMDS 27,895 45% 29,685 49% -6%
Cable 8,535 14% 8,289 14% 3%
C-Band 6,236 10% 6,940 11% -10%
Ku-band 19,522 31% 16,182 26% 21%
Total 62,188 100% 61,096 100% 2%
</TABLE>
Installation revenue comprised 28% of net revenues, reaching US$90.8 million in
the twelve-month period ended December 31, 1997, 47% more than in the same
period of 1996. This increase was the result of a strong sales performance
during the year of 1997, principally for the Ku-band operation. Comparing 4Q97
versus 3Q97 installation revenue decreased by 19%; this was caused basically by
the Hook-up fee reduction on the Ku-Band and C-Band, from $599 to $399 and $650
to $220, respectively.
Indirect programming revenue in the year ended December 31, 1997 reached US$22.8
million, a 100% growth over 1996 due to the expansion of the indirect
subscriber. This revenue consists of payments made to the Company for the sale
of its programming to affiliated companies and independent operators.
Direct operating expenses were US$174.1 million for 1997 versus US$112.3 million
in the previous year, or an increase of 55%. Direct operating expenses, as a
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<PAGE>
Tevcap, S.A. page 3/3
percentage of revenues, dropped from 57% in 1996 to 53% in 1997, and during the
fourth quarter, the Payroll & Benefits line dropped US$0.5 million; programming
line dropped US$1.3 million and TVA Magazine expenses decreased US$0.8 million.
Other expenses line decreased US$1.4 million when compared with the third
quarter of same year.
Selling, general and administrative expenses were US$119.1 million for 1997
versus US$81.5 million in 1996, or an increase of 46%. As a percentage of
revenues, selling, general and administrative expenses decreased from 41% to
36%. The 4Q97 to 3Q97 comparison shows a 9% reduction on the S,G&A, because of
cyclical nature of commissions and General Expenses reduction.
As a result, EBITDA reached US$35.1 million, an increase of 710% versus the
US$4.3 million registered in 1996. EBITDA for the fourth quarter was US$11.4
million as compared with US$10.9 million in the previous quarter, and US$1.9
million in the fourth quarter of 1996.
Adjusted EBITDA reached US$42.3 million, an increase of 359% versus the US$9.2
million adjusted EBITDA of 1996. Adjusted EBITDA includes the deferral of
Ku-band revenues of US$7.2 million for the year ended December 31, 1997. Because
of DirecTV's Hook-up fee reduction, we do not expect any adjustment on EBITDA
for 1998.
Depreciation and amortization for the twelve months period ended December 31,
1997 was US$62.5 million, as compared with US$30.5 million of the previous year.
This includes depreciation of systems, equipment, installation materials,
installation labor, amortization of organizational costs and concessions, and
allowance for equipment and inventory obsolescence.
Operating loss during 1997 was US$27.4 million, 5% more than the loss of US$26.1
million reported in 1996. The operating loss for the fourth quarter was US$12.0
million, 58% more than the loss of US$7.6 million in the same quarter of 1996.
Interest income was US$10.0 million, a 71% growth versus US$5.8 million in 1996.
Interest expenses were US$56.6 million, versus US$17.5 million in 1996. Most of
the improvement in the interest expense is attributable to the securities issue
occurred in the end of 1996, that amounts US$31.6 million per year.
Equity in losses (income) of affiliates amounted to a loss of US$6.9 million in
1997 versus a loss of US$8.5 million in the previous year, or a decrease of 20%.
This loss resulted from ESPN Brasil (US$5,858,000), Canbras (US$1,543,000), but
was offset by income from HBO (US$550,000).
Other nonoperating revenues/expenses reached US$2.1 million versus US$3.7
million in 1996.
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Tevcap, S.A. page 4/4
Minority interest amounted to US$916,000, representing the minority
shareholder's portion of the US$6.2 million aggregate losses of TVA Sul. As a
result, net loss for the year ended December 31, 1997 was US$81.4 million versus
a net loss of US$47.9 million in1996.
Capital expenditures (cash basis) for 1997 amounted to US$242.9 million, a 61%
increase from the US$151.3 million in 1996. Funds were directed mainly to the
purchase of decoders for all distribution systems, the construction of internal
networks for MMDS and cable, and cable network build-out primarily in Sao Paulo
and Curitiba.
SUBSCRIBER PERFORMANCE
Total subscriber base for 1997 reached 1,358,074 million, 36% increase versus
999,266 subscribers in the previous year.
Owned or proprietary systems grew to 546,383, a 56% growth over 349,511 in 1996.
This performance was achieved by extending the Cable system and through the
continued development of the distribution and sales operations of the Ku
business which now include the entire Brazilian Ku market. In the case of MMDS,
it is important to note that even with the transfer of 23,688 subscribers to the
Cable Operation, the MMDS operation grew by 5% in 1997.
Through independent operators, Tevecap reached 669,543 subscribers as of
December 31, 1997, as compared to 564,499 subscribers during the previous year,
a growth of 19% over 1996.
The table below outlines the number of subscribers at December 31, 1997,
September 30, 1997 and December 31, 1996 both for the owned systems (separated
by the different distribution technologies) as well as the number of households
that receive TVA programming through operating ventures and independent
operators:
<TABLE>
<CAPTION>
4Q97 3Q97 4Q97 X 4Q96 4Q97 X
3Q97 (%) 4Q96 (%)
<S> <C> <C> <C> <C> <C>
MMDS 240,913 248,732 -3% 230,320 5%
Cable 94,261 86,584 9% 46,011 105%
Digital C-band 68,309 70,081 -3% 49,858 37%
Ku-band 142,900 126,093 13% 23,322 513%
Total Owned Systems 546,383 531,490 3% 349,511 56%
Operating Ventures* 142,148 140,123 1% 85,256 67%
Independent Operators 669,543 701,537 -5% 564,499 19%
Households Receiving TVA
Programming 1,358,074 1,373,150 -1% 999,266 36%
- ----------
* Represents 100% of subscribers. On an equity subscriber basis, there
were 13,955 subscribers at December 31, 1996, 27,033 subscribers at
December 31, 1997 and 25,508 subscribers at September 30, 1997.
</TABLE>
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Tevcap, S.A. page 5/5
REVENUES BY OPERATION
The table below outlines consolidated net revenue by operation for owned systems
for the year ended December 31, 1997 and 1996.
Consolidated Net Revenues by Operation
(Monthly subscription and Installation)
1997 1996 % Change
---- ---- --------
TVA Sao Paulo 72,280 69,829 4%
TVA Rio de Janeiro 47,229 35,466 33%
TVA Sul 25,850 14,061 84%
Digital C-Band 32,193 36,800 -13%
Ku-Band 110,936 16,530 571%
TVA Sao Paulo: Net revenues amounted to US$72.3 million in 1997, up 4% when
compared to US$69.9 million in the previous year. While the number of new
subscribers increased this was offset by lower average hook-up fees. At December
31, 1997, the subscribers of both MMDS and cable systems totaled 175,845, an
increase of 19% over 1996 which had a subscriber base of 148,149.
TVA Rio: Net revenues reached US$47.2 million, an increase of 33% versus the
previous year. At the end of 1997, the subscriber base was 99,874, representing
a 25% growth over the previous year's subscriber base of 79,928. TVA Rio is
continuing to demonstrate continued growth despite rising cable competition in
this region.
TVA Sul: Net revenues amounted to US$25.8 million, 84% higher than US$14.1
million in 1996. As of December 31, 1997, the subscriber base reached 59,455, a
growth of 23% over the previous year.
C Band: Net revenues amounted to US$32.2 million, a 13% decrease versus US$36.8
million in the previous year. While the subscriber base increased by 37% during
the year and subscription fees for the quarter increased to US$23.4 million,
representing a 88% growth over the previous year, this was offset by lower
hook-up fees.
DirecTV: Net revenues amounted to US$110.9 million in the year ended December
31, 1997, representing an increase of 571% versus the US$16.5 million of the
previous year. The subscriber base grew by 513% when compared with the previous
year, reaching a total of 142,900 subscribers as of December 31, 1997.
TVA, through Galaxy Brasil, launched Brazil's first Ku-band service in July 1996
in a limited regional roll-out in the Sao Paulo area. The company became fully
operational in November 1996 when it began a nationwide publicity campaign
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<PAGE>
Tevcap, S.A. page 6/6
supported by a network of trained installers. Galaxy Brasil continues to lead
the Brazilian Ku-band market in number of subscribers, programming offer to the
customer and signal quality. Galaxy Brasil is clearly recognized as the leader
in the Brazilian DTH market, by both the consumer and the competition.
OPERATING VENTURES
Through the operating ventures, TVA has minority interests in two pay television
operators, Canbras and TV Filme, which served 142,148 subscribers as of December
31, 1997, as outlined in the table below:
Subscriber Base Ventures(*)
1997 1996 % Change
---- ---- --------
Canbras TVA 30,904 8,126 280%
TV Filme 111,244 77,130 44%
Total 142,148 85,256 67%
- ---------
* Represents paying subscribers
FINANCIAL SITUATION
Total debt reached US$461.4 million as of December 31, 1997, 12% of which was
short-term representing the financing of certain supplier payables (US$38.3
million), the accrued interest on the High Yield bonds (US$2.7 million), leasing
agreements with Citibank (US$10 million) and Eximbank financing (US$5.4
million). The remaining US$405 million is long-term and includes the principal
amount of the High Yield bonds (US$250.0 million), the Citibank leasing (US$33.5
million), Eximbank financing (US$17.9 million), certain supplier payables
(US$8.4 million) and US$95.2 million with Abril Group.
Due to the Asian turmoil of the last quarter of 1997, its possible impact on the
Brazilian economy and the delays that have affected the new Cable and MMDS
licenses to be granted by the Brazilian government, the minority shareholders
decided not to participate in the $100 million equity increase mentioned in our
last conference call. Nonetheless the full $100 million capital infusion was
completed last month solely by Abril. Tevecap today has $30 million in cash on
hand and the $60 million credit facility provided by Abril is fully available
again.
Shareholders stake
------------------
Dec, 97 Feb, 98
------- -------
Abril 56.5% 62.2%
Chase 9.3% 8.1%
Falcon 14.2% 12.3%
Hearst/ABC 20.0% 17.4%
Total 100.0% 100.0%
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Tevcap, S.A. page 7/7
TVA is one of Brazil's largest and fastest growing pay-TV operators with more
than 1.3 million direct and indirect subscribers. TVA's current owners are
Abril, 56.5%; Falcon International, 14.2%; Hearst, 10%; ABC, 10%; and CMIF,
9.3%. The company uses five technologies: MMDS, cable, digital KU band, digital
C-band and UHF to reach the Brazilian Pay-TV Market. TVA is also the country's
largest Pay-TV programming distributor, reaching over 1.3 million households. In
conjunction with Abril, TVA has formed strategic alliances and programming
partnerships to deliver Brazil's customized versions of ESPN, HBO, CINEMAX, MTV,
CMT and BRAVO for the Brazilian audience. TVA's partners include Falcon
International Communications, Disney/ABC, The Hearst Corporation, The Chase
Manhattan Bank and Hughes Communications.
Abril Group is Latin America's largest publishing and printing company. Of the
10 highest circulating magazines in Brazil, eight are published by Editora
Abril, the company's publishing division. The company publishes 200 magazines in
Brazil, nine in Portugal and four in Argentina. It pioneered the development of
electronic media in Brazil with the launch of TVA, Brazil's first subscription
television operation. It is the leader in the Brazilian home video market and is
the largest publisher of telephone directories in Latin America.
(Financial Tables To Follow)
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<PAGE>
Tevecap, S.A. page 8/8
<TABLE>
<CAPTION>
TEVECAP S.A.
Consolidated Balance Sheet
For the Periods Ended
December 31, 1997 and 1996
(in thousands of US dollars)
Dec 31, Dec 31, %
1997 1996 Change
------------------- ---------------- -------------------
<S> <C> <C> <C>
Cash and cash equivalents 1,024 104,798 -99%
Accounts receivable, net 47,002 32,296 46%
Inventories 23,590 13,095 80%
Film exhibition rights 1,291 1,061 22%
Prepaid and other assets 14,028 2,829 396%
Other accounts receivable 12,984 3,008 332%
------------------- ---------------- -------------------
Total current assets 99,919 157,087 -36%
------------------- ---------------- -------------------
Property, plant and equipment 421,972 233,593 81%
Investments
- - Equity affiliates 11,835 7,667 54%
- - Cost basis investees 30,237 16,326 85%
- - Concessions, net 13,775 17,574 -22%
Loans to related companies 19,566 15,308 28%
Prepaid expenses (High Yield Costs) 7,813 9,145 n/c
Other 2,614 2,422 8%
------------------- ---------------- -------------------
Total assets 607,731 459,122 32%
=================== ================ ===================
Short-term bank loans 56,397 18,039 213%
Film suppliers 26,184 7,012 273%
Other suppliers 66,749 52,932 26%
Taxes payable other than income taxes 12,837 8,953 43%
Accrued payroll and related liabilities 6,589 6,141 7%
Advances payments received from subscribers 4,386 10,482 -58%
Other accounts payable 4,839 4,543 7%
------------------- ---------------- -------------------
Total current liabilities 177,981 108,102 65%
Long term bank loans 309,739 250,464 n/c
Loans from related companies 95,232 2,721 3400%
Loans from shareholders 0 1,640 -100%
Provision for claims 5,907 5,045 17%
Liability to fund joint venture and equity investee 0 1,107 n/c
Deferred hook up fee revenue 12,098 4,883 148%
------------------- ---------------- -------------------
Total long-term liabilities 422,976 265,860 59%
------------------- ---------------- -------------------
Minority interest 4,802 1,778 170%
Paid-in-capital 287,962 287,962 0%
Accumulated deficit (285,990) (204,580) 40%
------------------- ---------------- -------------------
Total shareholder's equity 1,972 83,382 -98%
------------------- ---------------- -------------------
Total liabilities and shareholders' equity 607,731 459,122 32%
=================== ================ ===================
</TABLE>
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Tevecap, S.A. page 9/9
<TABLE>
<CAPTION>
TEVECAP S.A.
Fourth Quarter Consolidated Balance Sheet
For the Periods Ended
December 31 and September 30, 1997
(in thousands of US dollars)
Dec 31, Sep 30, %
1997 1997 Change
------------------- ---------------- -------------------
<S> <C> <C> <C>
Cash and cash equivalents 1,024 8,574 -88%
Accounts receivable, net 47,002 48,151 -2%
Inventories 23,590 24,583 -4%
Film exhibition rights 1,291 503 157%
Prepaid and other assets 14,028 15,170 -8%
Other accounts receivable 12,984 9,781 33%
------------------- ---------------- -------------------
Total current assets 99,919 106,762 -6%
------------------- ---------------- -------------------
Property, plant and equipment 421,972 377,818 12%
Investments
- - Equity affiliates 11,835 8,867 33%
- - Cost basis investees 30,237 27,735 9%
- - Concessions, net 13,775 14,202 -3%
Loans to related companies 19,566 20,688 -5%
Prepaid expenses 7,813 8,269 -6%
Other 2,614 2,537 3%
------------------- ---------------- -------------------
Total assets 607,731 566,878 7%
=================== ================ ===================
Short-term bank loans 56,397 59,570 -5%
Film suppliers 26,184 24,491 7%
Other suppliers 66,749 44,663 49%
Taxes payable other than income taxes 12,837 10,785 19%
Accrued payroll and related liabilities 6,589 8,204 -20%
Advances payments received from subscribers 4,386 5,514 -20%
Other accounts payable 4,839 7,333 -34%
------------------- ---------------- -------------------
Total current liabilities 177,981 160,560 11%
Long term bank loans 309,739 308,237 0%
Loans from related companies 95,232 40,861 133%
Loans from shareholders 0 3,953 -100%
Provision for claims 5,907 5,220 13%
Liability to fund joint venture and equity investee 0 877 -100%
Deferred hook up fee revenue 12,098 17,455 -31%
------------------- ---------------- -------------------
Total long-term liabilities 422,976 376,603 12%
------------------- ---------------- -------------------
Minority interest 4,802 1,288 273%
Paid-in-capital 287,962 287,962 0%
Accumulated deficit (285,990) (259,535) 10%
------------------- ---------------- -------------------
Total shareholder's equity 1,972 28,427 -93%
------------------- ---------------- -------------------
Total liabilities and shareholders' equity 607,731 566,878 7%
=================== ================ ===================
</TABLE>
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Tevecap, S.A. page 10/10
<TABLE>
<CAPTION>
TEVECAP S.A.
Consolidated Statement of Income
For the Periods Ended
December 31, 1997 and 1996
Dec. 31, % Net Dec. 31, % Net %
1997 Revenue 1996 Revenue Change
---------------- ------------- ---------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Monthly subscriptions 221,234 67% 123,020 62% 80%
Installation 90,806 28% 61,717 31% 47%
Advertising 4,947 2% 7,532 4% -34%
Indirect programming 22,810 7% 11,377 6% 100%
Other 13,649 4% 8,192 4% 67%
---------------- ------------- ---------------- ------------- ------------
Gross revenues 353,446 108% 211,838 107% 67%
Revenue taxes (25,104) -8% (13,747) -7% 83%
---------------- ------------- ---------------- ------------- ------------
Net revenue 328,342 100% 198,091 100% 66%
Direct operating expenses 174,147 53% 112,297 57% 55%
Selling, general and administrative 119,065 36% 81,455 41% 46%
expenses ---------------- ------------- ---------------- ------------- ------------
EBITDA 35,130 11% 4,339 2% 710%
Allowance for equipment and inventory 6,159 2% 2,250 1% 174%
obsolescence
Depreciation and amortization 56,381 17% 28,216 14% 100%
---------------- ------------- ---------------- ------------- ------------
Operating loss (27,410) -8% (26,127) -13% 5%
Interest income 9,965 3% 5,813 3% 71%
Interest expenses (56,553) -17% (17,520) -9% 223%
Translation (loss) gain 663 0% 473 0% 40%
Equity income (losses) of
affiliates (6,851) -2% (8,532) -4% -20%
Other nonoperating (expenses)
income, net (2,147) -1% (3,692) -2% -42%
---------------- ------------- ---------------- ------------- ------------
Loss before income taxes and
minority interest (82,333) -25% (49,585) -25% 66%
Income taxes 0 0% (156) 0% -100%
Minority interest 916 0% 1,849 1% -50%
---------------- ------------- ---------------- ------------- ------------
Net income (loss) (81,417) -25% (47,892) -24% 70%
================ ============= ================ ============= ============
</TABLE>
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Tevecap, S.A. page 11/11
<TABLE>
<CAPTION>
TEVECAP S.A.
Fourth Quarter Consolidated Statement of Income
For the Periods Ended
December 31, 1997 and September 30, 1997
% Net % Net %
4Q97 Revenue 3Q97 Revenue Change
---------------- ------------- ---------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Monthly subscriptions 62,188 72% 61,096 66% 2%
Installation 21,576 25% 26,802 29% -19%
Advertising 1,028 1% 973 1% 6%
Indirect programming 4,778 6% 6,459 7% -26%
Other 3,298 4% 3,791 4% -13%
---------------- ------------- ---------------- ------------- ------------
Gross revenues 92,868 108% 99,121 107% -6%
Revenue taxes (6,857) -8% (6,739) -7% 2%
---------------- ------------- ---------------- ------------- ------------
Net revenue 86,011 100% 92,382 100% -7%
Direct operating expenses 45,258 53% 49,165 53% -8%
Selling, general and 29,345 34% 32,311 35% -9%
administrative expenses ---------------- ------------- ---------------- ------------- ------------
EBITDA 11,048 13% 10,906 12% 5%
Allowance for equipment and
inventory obsolescence 5,218 6% (96) 0% -5535%
Depreciation and amortization 18,154 21% 15,283 17% 19%
---------------- ------------- ---------------- ------------- ------------
Operating loss (11,964) -14% (4,281) -5% 179%
Interest income 1,796 2% 1,777 2% 1%
Interest expenses (16,574) -19% (15,019) -16% 10%
Translation (loss) gain 927 1% 815 1% 14%
Equity income (losses) of
affiliates 587 1% (1,733) -2% -134%
Other nonoperating (expenses)
income, net (1,602) -2% (310) 0% 417%
---------------- ------------- ---------------- ------------- ------------
Loss before income taxes and
minority interest (26,830) -31% (18,751) -20% 43%
Income taxes 0% 0%
Minority interest 374 0% 151 0% 148%
---------------- ------------- ---------------- ------------- ------------
Net income (loss) (26,456) -31% (18,600) -20% 42%
================ ============= ================ ============= ============
</TABLE>
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Tevecap, S.A. page 12/12
<TABLE>
<CAPTION>
TEVECAP S.A.
Fourth Quarter Consolidated Statement of Income
For the Periods Ended
December 31, 1997 and 1996
% Net % Net %
4Q97 Revenue 4Q96 Revenue Change
---------------- ------------- ---------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Monthly subscriptions 62,188 72% 37,719 57% 65%
Installation 21,576 25% 22,321 34% -3%
Advertising 1,028 1% 2,170 3% -53%
Indirect programming 4,778 6% 6,099 9% -22%
Other 3,298 4% 2,900 4% 14%
---------------- ------------- ---------------- ------------- ------------
Gross revenues 92,868 108% 71,209 107% 30%
Revenue taxes (6,857) -8% (4,866) -7% 41%
---------------- ------------- ---------------- ------------- ------------
Net revenue 86,011 100% 66,343 100% 30%
Direct operating expenses 45,258 53% 34,567 52% 31%
Selling, general and administrative 29,345 34% 29,919 45% -2%
expenses
---------------- ------------- ---------------- ------------- ------------
EBITDA 11,408 13% 1,857 3% 514%
Allowance for equipment and inventory 5,218 6% (243) 0% -2247%
obsolescence
Depreciation and amortization 18,154 21% 9,669 15% 88%
---------------- ------------- ---------------- ------------- ------------
Operating loss (11,964) -14% (7,569) -11% 58%
Interest income 1,796 2% 2,312 3% -22%
Interest expenses (16,574) -19% (7,544) -11% 120%
Translation (loss) gain 927 1% (64) 0% -1548%
Equity income (losses) of
affiliates 587 1% (1,890) -3% -131%
Other nonoperating (expenses)
income, net (1,602) -2% 3,326 5% -148%
---------------- ------------- ---------------- ------------- ------------
Loss before income taxes and
minority interest (26,830) -31% (11,429) -17% 135%
Income taxes (51)
Minority interest 374 0% 316 0% 18%
---------------- ------------- ---------------- ------------- ------------
Net income (loss) (26,456) -31% (11,164) -17% 137%
================ ============= ================ ============= ============
</TABLE>
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