ENTRAVISION COMMUNICATIONS CORP, 10-Q, 2000-09-15

ENTRAVISION COMMUNICATIONS CORP
10-Q, 2000-09-15
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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-15997

ENTRAVISION COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of 95-4783236
incorporation or organization) (I.R.S. Employer Identification No.)

2425 Olympic Boulevard, Suite 6000 West
Santa Monica, California 90404
(Address of principal executive office) (Zip Code)

(310) 447-3870
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since
last report)

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]

As of September 15, 2000, there are 65,626,063 shares, $0.0001 par
value per share, of the registrant's Class A common stock outstanding,
27,678,533 shares, $0.0001 par value per share, of the registrant's Class B
common stock outstanding and 21,983,392 shares, $0.0001 par value per share, of
the registrant's Class C common stock outstanding.
<PAGE>

ENTRAVISION COMMUNICATIONS CORPORATION

TABLE OF CONTENTS

Page
Number
------
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets as of June 30, 2000 (Unaudited)
and December 31, 1999.......................................... 1

Consolidated Statements of Operations for the Three Months and
Six Months Ended June 30, 2000 (Unaudited) and 1999 (Unaudited) 2

Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2000 (Unaudited) and 1999 (Unaudited)........... 3

Notes to Consolidated Financial Statements (Unaudited)......... 4

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 12

Item 3. Quantitative and Qualitative Disclosures about Market Risk..... 23

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.............................................. 23

Item 2. Changes in Securities and Use of Proceeds...................... 24

Item 3. Defaults Upon Senior Securities................................ 25

Item 4. Submission of Matters to a Vote of Security Holders............ 25

Item 5. Other Information.............................................. 26

Item 6. Exhibits and Reports on Form 8-K............................... 27
<PAGE>

ENTRAVISION COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
June 30, 2000 December
(Unaudited) 31, 1999
------------- --------
<S> <C> <C>
ASSETS
Current assets
<S>
Cash and cash equivalents.............................................................. $ 4,606 $ 2,357
Restricted cash........................................................................ 9,597 -
Receivables:
Trade, net of allowance for doubtful accounts of 2000 $1,909; 1999 $979.............. 23,596 12,392
Related parties...................................................................... 273 273
Prepaid expenses and taxes............................................................. 5,449 355
--------- ---------
Total current assets................................................................... 43,521 15,377
Property and equipment, net.............................................................. 40,356 27,230
Intangible assets, net................................................................... 488,271 152,387
Other assets, including deposits on acquisitions of 2000 $23,303; 1999 $8,742............ 32,153 10,023
--------- ---------
$604,301 $205,017
========= =========

LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND OWNERS' EQUITY
Current liabilities
Current maturities of notes and advances payable, related parties...................... $ 231 $ 231
Current maturities of long-term debt................................................... 117,306 1,389
Accounts payable and accrued expenses (including related parties of 2000
$460; 1999 $280)..................................................................... 22,981 7,479
--------- ---------
Total current liabilities............................................................ 140,518 9,099
--------- ---------
Long-term debt
Subordinated note payable to Univision................................................. 120,000 10,000
Notes payable, less current maturities................................................. 250,004 155,917
--------- ---------
370,004 165,917
Deferred taxes........................................................................... 65,080 1,990
--------- ---------
Total liabilities.................................................................... 575,602 177,006
--------- ---------
Commitments and contingencies
Series A mandatorily redeemable convertible preferred stock, $0.0001 par value,.......... - -
11,000,000 shares authorized; no shares issued or outstanding
Members' capital
Entravision Communications Company, L.L.C.............................................. - 59,645
Common stock of member corporations.................................................... - 1,256
Additional paid-in-capital of member corporations...................................... - 16,329
Accumulated deficit.................................................................... - (48,635)
Stockholders' equity
Class A common stock, $0.0001 par value, 260,000,000 shares authorized;................ 1 -
shares issued and outstanding 2000 5,506,062
Class B common stock, $0.0001 par value, 40,000,000 shares authorized;................. 5 -
shares issued and outstanding 2000 27,678,533
Class C common stock, $0.0001 par value, 25,000,000 shares authorized; no.............. - -
shares issued or outstanding
Additional paid-in capital............................................................. 36,017 -
Deferred compensation.................................................................. (6,728) -
Accumulated deficit.................................................................... - -
--------- ---------
29,295 28,595
Less: stock subscription notes receivable................................................ (596) (584)
--------- ---------
28,699 28,011
--------- ---------
$604,301 $205,017
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.

1
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ENTRAVISION COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share, per share and per membership unit data)

<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Gross revenue (including network
compensation from Univision of $2,258,
$618, $3,304 and $1,358).................. $ 39,899 $ 16,141 $ 59,239 $ 29,154
Less agency commissions..................... 4,239 1,655 6,315 2,939
------------ ------------ ------------ ------------
Net revenue............................... 35,660 14,486 52,924 26,215
------------ ------------ ------------ ------------
Expenses:
Direct operating (including Univision
national representation fees of $1,028,
$692, $1,950 and $1,286)................ 13,073 5,896 20,956 10,568
Selling, general and administrative
(excluding non-cash stock-based
compensation of $3,563, $7,286, $3,563
and $14,572)............................ 8,588 2,924 12,337 5,434
Corporate expenses (including related
parties of $114, $70, $183 and $151).... 2,180 1,383 4,028 2,687
Non-cash stock-based compensation......... 3,563 7,286 3,563 14,572
Depreciation and amortization............. 10,260 4,059 15,137 7,380
------------ ------------ ------------ ------------
37,664 21,548 56,021 40,641
------------ ------------ ------------ ------------
Operating (loss)........................ (2,004) (7,062) (3,097) (14,426)
Interest expense (including amounts to
Univision of $2,103, $175, $2,919 and
$350)................................... (10,034) (1,933) (14,140) (3,976)
Non-cash interest expense relating to
beneficial conversion option............ (5,461) - (37,061) -
Interest income........................... 237 8 446 28
------------ ------------ ------------ ------------
Loss before income taxes................ (17,262) (8,987) (53,852) (18,374)
Income tax (expense)...................... (165) (155) (159) (81)
------------ ------------ ------------ ------------
Net (loss).............................. $ (17,427) $ (9,142) $ (54,011) $ (18,455)
============ ============ =========== ============
Loss per membership unit.................. $(8.55) $(4.23) $(26.77) $(8.62)
============ ============ =========== ============

Pro forma provision for income taxes
benefit................................. 2,676 462 4,454 1,083
============ ============ =========== ============
Pro forma net loss....................... $ (14,586) $ (8,525) $ (49,398) $ (17,291)
============ ============ =========== ============
Pro forma per share data:
Net loss per share: basic and diluted..... $(0.45) $(0.26) $(1.52) $(0.53)
============ ============ =========== ============
Pro forma weighted average common
shares outstanding: basic and diluted .. 32,635,302 32,431,427 32,501,900 32,431,427
============ ============ =========== ============
</TABLE>

See Notes to Consolidated Financial Statements.

2
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ENTRAVISION COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
2000 1999
----------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net (Loss)............................................................... $ (54,011) $(18,455)
Adjustments to Reconcile Net (Loss) to Net Cash Provided by Operating
Activities:
Depreciation and amortization............................................ 14,484 7,250
Deferred tax expense (benefit)........................................... - (106)
Amortization of debt issue costs......................................... 653 130
Intrinsic value of subordinated note exchange option..................... 37,061 -
Non-cash stock-based compensation........................................ 3,563 14,572
Changes in assets and liabilities, net of effect of business combination:
(Increase) in accounts receivable........................................ (3,705) (527)
(Increase) in prepaid expenses and other assets.......................... (3,059) (383)
Increase (decrease) in accounts payable, accrued expense and other....... 9,772 (1,526)
----------- ---------
Net cash provided by operating activities................................ 4,758 955
----------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of equipment.......................................... 25 -
Purchases of property and equipment...................................... (5,066) (5,666)
Cash deposits and purchase price on acquisitions......................... (313,860) (20,107)
----------- ---------
Net cash (used in) investing activities.................................. (318,901) (25,773)
----------- ---------
Cash Flows from Financing Activities:
Principal payments on note payable....................................... (61,796) (175)
Proceeds from borrowings on notes payable................................ 381,602 25,078
Dividends paid to members for income taxes............................... - (2,400)
Payments of deferred debt costs.......................................... (3,414) -
----------- ---------
Net cash provided by financing activities................................ 316,392 22,503
----------- ---------
Net increase (decrease) in cash and cash equivalents..................... 2,249 (2,315)
Cash and Cash Equivalents:
Beginning................................................................ 2,357 3,661
----------- ---------
Ending................................................................... $ 4,606 $ 1,346
=========== =========
Supplemental Disclosures of Cash Flow Information
Cash Payments for:
Interest............................................................... $ 7,785 $ 4,466
=========== =========
Income taxes........................................................... $ 327 $ 385
=========== =========
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Deferred stock compensation.............................................. $ 6,728 $ -
=========== =========
Assets Acquired and Debt Issued in Business Combinations:
Current assets, net of cash acquired..................................... $ 19,621 $ 86
Broadcast equipment and furniture and fixtures........................... 11,816 3,091
Intangible assets........................................................ 343,386 49,105
Other assets............................................................. 959 -
Current liabilities...................................................... (5,730) -
Deferred taxes........................................................... (63,090) (2,112)
Notes payable............................................................ - (12,000)
Other liabilities........................................................ (1,545) -
Increase in subordinated debt exchange option............................ - (13,915)
Estimated fair value allocated to option agreement....................... (3,015) -
Less cash deposits from prior year....................................... (8,500) (4,200)
----------- ---------
Net cash paid.......................................................... $ 293,902 $ 20,055
=========== =========
</TABLE>

See Notes to Consolidated Financial Statements.

3
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ENTRAVISION COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2000

1. Basis of Presentation

The condensed consolidated financial statements included herein have been
prepared by Entravision Communications Corporation (the "Company" or "ECC"),
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. These condensed consolidated financial statements and
notes thereto should be read in conjunction with the Company's audited combined
financial statements for the year ended December 31, 1999 included in the
Company's Registration Statement on Form S-1 (No. 333-35336) and the amendments
thereto. The unaudited information contained herein has been prepared on the
same basis as the Company's audited combined financial statements and, in the
opinion of the Company's management, includes all adjustments (consisting of
only normal recurring adjustments) necessary for a fair presentation of the
information for the periods presented. The interim results presented herein are
not necessarily indicative of the results of operations that may be expected for
the full fiscal year ending December 31, 2000 or any other future period.

2. Initial Public Offering

On August 9, 2000, the Company completed an underwritten initial public
offering ("IPO") of 46,435,458 shares of its Class A common stock at a price of
$16.50 per share. The Company also sold 6,464,542 shares of its Class A common
stock directly to Univision Communications Inc. ("Univision") at a price of
$15.47 per share. The net proceeds to the Company, after deducting underwriting
discounts and commissions, and offering expenses, were approximately $818
million.

3. The Company and Significant Accounting Policies

On February 11, 2000, ECC was formed. The First Restated Certificate of
Incorporation of ECC authorizes both common and preferred stock. The common
stock has three classes identified as A, B and C which have similar rights and
privileges, except the Class B common stock provides ten votes per share as
compared to one vote per share for all other classes of common stock.
Additionally, Univision, as the holder of all Class C common stock, upon
conversion of its subordinated note, is entitled to vote as a separate class to
elect two directors, and will have the right to vote as a separate class on
certain material transactions. Class B and C common stock is convertible at the
holder's option into one fully-paid and nonassessable share of Class A common
stock and is required to be converted into one share of Class A common stock
upon certain events as defined in the First Restated Certificate of
Incorporation. The Series A mandatorily redeemable convertible preferred stock
has limited voting rights, and accrues an 8.5% dividend.

Effective August 3, 2000, an exchange transaction was consummated whereby
the direct and indirect ownership interests in Entravision Communications
Company, L.L.C. (ECC LLC) were exchanged for Class A or Class B common stock of
ECC. The Class B common stock was issued to Walter F. Ulloa, Philip C.
Wilkinson and Paul A. Zevnik (and certain trusts and controlled entities of such
individuals) in exchange for their direct and indirect membership interests in
ECC LLC. Each of the remaining individuals, trust and other entities holding
direct membership interests in ECC LLC exchanged such interests for Class A
common stock of ECC. In addition, the remaining stockholders (other than
Messrs. Ulloa, Wilkinson and Zevnik) of Cabrillo Broadcasting Corporation,
Golden Hills

4
<PAGE>

Broadcasting Corporation, Las Tres Palmas Corporation, Tierra Alta Broadcasting,
Inc., KSMS-TV, Inc., Valley Channel 48, Inc. and Telecorpus, Inc. (collectively,
the "Affiliates") exchanged their common shares of the respective corporations
for Class A common stock of ECC. Accordingly, the Affiliates became wholly-owned
subsidiaries of ECC. Additionally, Univision exchanged its subordinated note
for Class C common stock. The number of shares of common stock of ECC issued to
the members of ECC LLC and the stockholders of the Affiliates was determined in
such a manner that the ownership interest in ECC equaled the direct and indirect
ownership interest in ECC LLC immediately prior to the exchange.

ECC LLC and Affiliates were considered to be under common control and, as
such, the exchange will be accounted for in a manner similar to a pooling of
interests. Accordingly, these consolidated financial statements, including
share data and the stock option exercise price, have been presented as if ECC
LLC was incorporated and the exchange transaction took place as of June 30,
2000.

Earnings Per Membership Unit

Basic earnings per membership unit is computed as net income (loss) divided
by the weighted average number of membership units outstanding for the period.
Diluted earnings per membership unit reflects the potential dilution that could
occur from membership units issuable through options and convertible securities.

For the three months and six months ended June 30, 2000 and 1999, all
dilutive securities have been excluded as their inclusion would have had an
antidilutive effect on earnings per membership unit. If options and convertible
debt securities had not been excluded, 1,530,591, 1,309,518, 736,753 and 700,887
membership units, respectively, would have been included in the denominator.

The following table sets forth the calculation of loss per membership unit:

<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2000 1999 2000 1999
---------- ---------- ---------- -----------
(In thousands of dollars, except membership units)
<S> <C> <C> <C> <C>
Earnings (Loss):
Net loss $ (17,427) $ (9,142) $ (54,011) $ (18,455)
Less loss of member corporations (736) (1,067) (1,757) (2,018)
---------- ---------- ---------- ----------
Net loss applicable to members $ (16,691) $ (8,075) $ (52,254) $ (16,437)
========== ========== ========== ==========
Membership units outstanding 1,952,035 1,907,731 1,952,035 1,907,731
========== ========== ========== ==========
</TABLE>

Pro Forma Income Tax Adjustments and Pro Forma Earnings Per Share

The pro forma income tax information is included in these financial
statements to show what the significant effects might have been on the
historical statements of operations had the Company and its affiliates not been
treated as flow-through entities not subject to income taxes. The pro forma
information reflects a benefit for income taxes at the assumed effective rate in
the three months and six months ended June 30, 2000 and 1999.

The weighted average number of shares of common stock outstanding during
the periods used to compute pro forma basic and diluted net loss per share is
based on the conversion ratio used to exchange ECC LLC membership units and
member corporation shares for shares of ECC's common stock immediately prior to
the effective date of the IPO. As of June 30, 2000, the number of shares that
would be included in determining the weighted average shares outstanding for
diluted earnings per share if their effect was not antidilutive are as follows:
27,848,495 for convertible debt securities and 549,293 for

5
<PAGE>

stock grants subject to repurchase.

New Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities, which is
required to be adopted in all fiscal quarters of all fiscal years beginning
after June 15, 2000. SFAS No. 133 permits early adoption as of the beginning of
any fiscal quarter after its issuance. The Company will adopt SFAS No. 133
effective January 1, 2001. SFAS No. 133 will require the Company to recognize
all derivatives on the balance sheet at fair value. Derivatives that are not
hedges must be adjusted to fair value through income. If the derivative is a
hedge, depending on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair value of the hedged
assets, liabilities or firm commitment through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. Because of the Company's minimal use of derivatives,
management does not anticipate that the adoption of SFAS No. 133 will have a
significant effect on the Company's earnings or financial position.

In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101,
Revenue Recognition in Financial Statements. SAB 101 provides guidance on the
recognition, presentation and disclosure of revenue in financial statements
filed with the SEC. This accounting bulletin, as amended in March 2000, is
effective beginning in the fourth quarter of 2000. Management does not believe
that the adoption of SAB 101 will have a material impact on our or our acquired
companies' financial statements.

In March 2000, FASB issued Interpretation No. 44, Accounting for Certain
Transactions Involving Stock Compensation - an interpretation of APB Opinion No.
25. Interpretation No. 44 clarifies the definition of employee for purposes of
applying APB Opinion No. 25, Accounting for Stock Issued to Employees, the
criteria for determining whether a plan qualifies as a non-compensatory plan,
the accounting consequence of various modifications to the terms of previously
fixed stock options or awards and the accounting for an exchange of stock
compensation awards in a business combination. Interpretation No. 44 is
effective July 1, 2000, but certain conclusions in Interpretation No. 44 cover
specific events that occurred after either December 15, 1998 or January 12,
2000. Management believes that Interpretation No. 44 will not have a material
effect on the financial position or the results of operations of the Company
upon adoption.

4. Business Combinations

During the six months ended June 30, 2000, the Company acquired the
following companies, all of which were accounted for as purchase business
combinations with the operations of the businesses included subsequent to their
respective acquisition dates. The allocation of the respective purchase prices
are generally based upon management's estimates of the discounted future cash
flows to be generated from the broadcast properties for intangible assets and
replacement cost for tangible assets, and reflects management's preliminary
allocation of purchase price.

Magic Media, Inc.

On July 19, 1999, the Company entered into an asset purchase agreement with
Magic Media, Inc. to acquire substantially all of the assets relating to the
operations of radio stations KATH(FM) and KOFX(FM) in El Paso, Texas for
approximately $14.0 million. The acquisition closed on January 14, 2000 and was
accounted for as a purchase business combination. The purchase price was
allocated as follows: $0.6 million to fixed assets, $10.7 million to the
Federal Communications Commission (the

6
<PAGE>

"FCC") license, $2.2 million to goodwill and $0.5 million to a noncompetition
agreement.

XHAS-TV

In March 2000, Televisora Alco S.A. de C.V., a Mexican corporation in which
the Company holds a 40% minority, limited voting interest (neutral investment
stock), executed a stock purchase agreement to acquire the outstanding capital
stock of a Mexican corporation which holds the necessary authorizations from the
Mexican government to own and operate television station XHAS, Channel 33,
Tijuana, Mexico.

In March 2000, the Company also entered into agreements to acquire a 47.5%
interest in each of Vista Television, Inc. and Channel 57, Inc. The Company has
an option, which must be exercised at the expiration of the five-year term, to
acquire an additional 47.5% interest in each of these companies for $3.5
million. Additionally, ECC entered into time brokerage agreements in connection
with these acquisitions.

The aggregate consideration paid in connection with these transactions was
approximately $35.2 million. These transactions closed on March 16, 2000. The
purchase price has been preliminarily allocated as follows: $1.0 million to
fixed assets, $27.5 million to intangibles and $6.7 million to other assets.

Latin Communications Group Inc. ("LCG")

On April 20, 2000, the Company acquired all of the outstanding capital
stock of LCG for approximately $256.0 million. LCG operates radio stations in
California, Colorado, New Mexico and Washington D.C. and also owns and operates
two Spanish-language publications. In connection with this acquisition, the
Company amended certain financial covenants related to its credit facility to
provide for this acquisition and the issuance of a $90.0 million convertible
subordinated note. Effective with the IPO, as discussed in Note 2, the
subordinated note converted into 5,865,102 shares of Series A mandatorily
redeemable convertible preferred stock of ECC. The Series A preferred stock is
convertible into Class A common stock on a share-per-share basis at the option
of the holder at any time and accrues dividends at 8.5% per annum, compounded
annually and payable upon the liquidation of the Company or redemption. All
accrued and unpaid dividends are to be waived and forgiven upon the conversion
of the Series A preferred stock into Class A common stock. The Series A
preferred stock is subject to redemption at face value plus accrued dividends at
the option of the holder for a period of 90 days beginning five years after its
issuance, and must be redeemed in full ten years after its issuance. The
Company also has the right to redeem the Series A preferred stock at its option
at any time one year after its issuance, provided that the trading price of the
Class A common stock equals or exceeds 130% of the IPO price of the Class A
common stock for 15 consecutive trading days immediately before such redemption.

In connection with the $90.0 million convertible subordinated note, the
Company will realize additional non-cash interest expense of approximately $19.5
million based on the intrinsic value of the beneficial conversion feature over
the period the note becomes convertible, of which approximately $5.5 million was
recorded through June 30, 2000.

Additionally, the Company entered into a $115.0 million term loan with its
bank group, the proceeds from which were used to finance the LCG acquisition.
Under the terms of this loan, the Company was obligated to maintain a portion of
the proceeds in a restricted bank account in an amount sufficient to cover the
future interest charges during the term of the loan. This term loan was
subsequently repaid with proceeds from the IPO.

7
<PAGE>

The excess of the purchase price over the tangible net assets of $302.7
million has been preliminarily allocated to identifiable intangibles consisting
of $219.2 million to FCC licenses, $9.8 million to presold commercial
advertising contracts, $0.2 million to a non-compete agreement and $11.2 million
to other identifiable intangibles. The remaining excess purchase price of $62.3
million was allocated to goodwill.

Pro Forma Results

The following pro forma results of continuing operations assume the 2000
and 1999 acquisitions discussed above occurred on January 1, 1999 and 1999,
respectively. The unaudited pro forma results have been prepared using the
historical financial statements of the Company and each acquired entity. The
unaudited pro forma results give effect to certain adjustments including
amortization of goodwill, depreciation of property and equipment, interest
expense and the related tax effects.

<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2000 1999 2000 1999
---------- ------------ --------- -----------
(In millions of dollars, except per membership unit)
<S> <C> <C> <C> <C>
Net Revenue $ 38.9 $ 26.4 $ 67.3 $ 47.6
Net (loss) (18.0) (13.9) (58.8) (29.5)
Basic and diluted net (loss) per $(9.21) $(7.29) $(30.12) $(15.45)
membership unit
</TABLE>

The above pro forma financial information does not purport to be indicative
of the results of operations had the 2000 and 1999 acquisitions actually taken
place on January 1, 1999 and 1998, respectively, nor is it intended to be a
projection of future results or trends.

Acquisitions Subsequent to June 30, 2000

Z-Spanish Media Corporation

On April 20, 2000, the Company agreed to acquire all of the outstanding
capital stock of Z-Spanish Media Corporation ("Z-Spanish Media"). This
transaction closed on August 9, 2000. Z-Spanish Media owns 33 radio stations and
an outdoor billboard business. The purchase price, as amended on July 25, 2000,
was approximately $448 million, including approximately $109 million of debt.
The purchase price consisted of approximately $224 million in cash and the
remainder in a newly-issued Class A common stock of the Company after the
reorganization as discussed in Note 3. To comply with a preliminary Department
of Justice inquiry, six of Z-Spanish Media's radio stations were transferred to
a trust. The beneficiary of the trust is Z-Spanish Media. If the Department of
Justice permits the Company to acquire these stations, the Company would be
obligated to purchase these stations for an aggregate purchase price of up to
$23.0 million. If the Company is not permitted to purchase these stations, the
Company would be obligated to remit the proceeds from the sale of these stations
to the former stockholders of Z-Spanish Media.

In connection with this acquisition, the Company issued approximately 1.5
million options to purchase its Class A common stock in exchange for Z-Spanish
Media's previously outstanding stock options. In connection with these stock
options, the Company will record as additional purchase price approximately $7.0
million for the excess of the estimated fair value over the intrinsic value of
the options. In addition, the Company will recognize approximately $11.0
million as non-cash stock-based compensation over the remaining three-year
vesting period.

8
<PAGE>

Citicasters Co.

In March 2000, the Company entered into an asset purchase agreement with
Citicasters Co., a subsidiary of Clear Channel Communications, Inc., to acquire
the FCC licenses relating to the operations of radio stations KACD(FM) Santa
Monica, California, and KBCD(FM) Newport Beach, California, for $85.0 million.
On March 3, 2000, the Company deposited $17 million in escrow relating to this
acquisition. This transaction closed on August 24, 2000.

Radio Stations KFRQ(FM), KKPS(FM), KVPA(FM) and KVLY(FM)

On May 22, 2000, the Company agreed to acquire certain assets relating to
the operations of radio stations KFRQ(FM), KKPS(FM), KVPA(FM) and KVLY(FM) from
Sunburst Media, LP for $55.0 million. This transaction closed on September 12,
2000.

Pending Transactions

WHCT-TV

In February 2000, the Company entered into an agreement to acquire the FCC
license of television station WHCT in Hartford, Connecticut, for $18.0 million.
Management intends to close on this transaction upon receiving FCC approval,
which it anticipates receiving in the third quarter of 2000.

WNTO-TV

On April 14, 2000, the Company agreed to acquire certain assets of
television station WNTO-TV, Orlando, Florida, for $23.0 million. The Company
anticipates that the closing of this transaction will occur in the third quarter
of 2000.

Infinity Broadcasting Corporation

On June 13, 2000, the Company agreed to acquire certain outdoor advertising
assets from Infinity Broadcasting Corporation for a total of $168.2 million.
The closing of this acquisition is subject to conditions, including the receipt
of required approvals. The Company will finance the acquisition with proceeds
from its IPO.

5. Stock Options and Grants

2000 Omnibus Equity Incentive Plan

The Company adopted a 2000 Omnibus Equity Incentive Plan that allows for
the award of up to 11,500,000 shares of Class A common stock. Awards under the
plan may be in the form of incentive stock options, nonqualified stock options,
stock appreciation rights, restricted stock or stock units. In August 2000, the
Company awarded 4,054,497 stock options to employees and consultants.

Stock Grants

In June 2000, the Company granted stock awards to employees, directors and
consultants totaling 245,276 shares of Class A common stock and 249,220 shares
of Class B common stock. As a result of these grants, the Company recorded $0.2
million in non-cash stock-based compensation during the three months ended June
30, 2000 relating to these grants. The shares contain a nominal repurchase
option that expires ratably over three to five years and as a result the
unrecognized compensation

9
<PAGE>

expense has been recorded as deferred compensation in stockholders' equity.

In addition, on April 8, 2000, the Company granted stock awards to its
Chief Financial Officer totaling 240,737 shares of Class A common stock. As a
result of this grant, the Company recorded $3.4 million in non-cash stock-based
compensation during the three months ended June 30, 2000 relating to these
grants.

6. Litigation

The Company is a defendant to a lawsuit filed in the Superior Court of the
District of Columbia by First Millenium Communications, Inc. to resolve certain
contract disputes arising out of a terminated brokerage-type arrangement with
First Millenium. The litigation primarily concerns the payment of a brokerage
fee alleged to be due in connection with the acquisition of television station
WBSV in Sarasota, Florida for $17.0 million. In addition to its various
contractual claims, First Millenium also has asserted claims for fraud, RICO,
misappropriation, breach of fiduciary duty, defamation and intentional
infliction of emotional distress. First Millenium is seeking in excess of $60
million including the right to a 10% ownership interest in WBSV and the right to
exchange such interest in the reorganization described in Note 3. First
Millenium has made similar claims relating to other pending acquisitions.

No accrual has been recorded in the accompanying financial statements
beyond the amount management believes is the remaining contractual obligation of
$0.3 million since the ultimate liability in excess of the amount recorded, if
any, cannot be reasonably estimated. Management intends to vigorously defend
against these claims and does not believe that any resolution of this litigation
is likely to have a material adverse effect on the Company's financial position,
results of operations or cash flows.

On July 20, 2000, Telemundo Network Group LLC, Telemundo Network, Inc. and
Council Tree Communications, L.L.C. filed an action against the Company and
certain of the Company's affiliates in the Circuit Court of the 11/th/ Judicial
Circuit in and for Miami-Dade County, Florida relating to the Company's
investment in XHAS-TV, Channel 33 in Tijuana, Mexico. The action seeks to have
the sale voided and other unspecified damages for breach of contract relating to
Telemundo's attempted exercise of a right of first refusal to buy the assets of
XHAS-TV. In addition to its contract claim, Telemundo asserts tortious
interference, fraud and conspiracy to defraud. The Company intends to
vigorously defend against this action.

Subsequently, the Company filed an action in the Superior Court of the
State of California for the County of San Diego against the same Telemundo
entities seeking unspecified damages and a declaratory judgment that, among
other things, Telemundo failed to timely exercise its right of first refusal
with respect to the acquisition of the assets of XHAS-TV.

The Company does not believe that any resolution of these matters is likely
to have an adverse material impact.

7. Segment Information

Upon the acquisition of LCG, management has determined that the Company
operates in three reportable segments consisting of television broadcasting,
radio broadcasting and newspaper publishing. Prior to the acquisition of LCG,
the Company had a single reportable segment. Information about each of the
operating segments follows:

Television Broadcasting

10
<PAGE>

The Company operates 31 television stations primarily in the southwestern
United States, and consist primarily of Univision affiliates.

Radio Broadcasting

The Company operates 26 radio stations (16 FM and 10 AM) located primarily
in California, Colorado, Nevada, New Mexico and Texas.

Newspaper Publishing

The Company's newspaper publishing operations consists of two publications
in New York, New York.

Separate financial data for each of the Company's operating segments is
provided below. Segment operating loss is defined as operating loss before
corporate expenses and non-cash stock-based compensation. The Company evaluates
the performance of its operating segments based on the following:

<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2000 1999 2000 1999
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Net Revenue
TV $ 22,678 $ 13,941 $ 38,917 $ 25,252
Radio 8,772 545 9,797 963
Print 4,210 - 4,210 -
-------- -------- -------- --------
Total $ 35,660 $ 14,486 $ 52,924 $ 26,215
======== ======== ======== ========
Direct Expenses
TV $ 8,720 $ 5,532 $ 15,956 $ 9,920
Radio 2,199 364 2,846 648
Print 2,154 - 2,154 -
-------- -------- -------- --------
Total $ 13,073 $ 5,896 $ 20,956 $ 10,568
======== ======== ======== ========
Selling General and Administrative
Expenses
TV $ 4,101 $ 2,774 $ 7,618 $ 5,183
Radio 3,271 150 3,503 251
Print 1,216 - 1,216 -
-------- -------- -------- --------
Total $ 8,588 $ 2,924 $ 12,337 $ 5,434
======== ======== ======== ========
Depreciation and Amortization
TV $ 5,547 $ 3,884 $ 10,008 $ 7,030
Radio 4,614 175 5,030 350
Print 99 - 99 -
-------- -------- -------- --------
Total $ 10,260 $ 4,059 $ 15,137 $ 7,380
======== ======== ======== ========
Segment Operating Profit
TV $ 4,310 $ 1,751 $ 5,335 $ 3,119
Radio (1,312) (144) (1,582) (286)
Print 741 - 741 -
-------- -------- -------- --------
Total $ 3,739 $ 1,607 $ 4,494 $ 2,833
======== ======== ======== ========

Corporate Expenses 2,180 1,383 4,028 2,687
Non-Cash Stock-Based
Compensation 3,563 7,286 3,563 14,572
-------- -------- -------- --------
Consolidated Operating (loss) $ (2,004) $ (7,062) $ (3,097) $(14,426)
======== ======== ======== ========
Total Assets
TV $515,698 $171,178 $515,698 $171,178
Radio 84,258 5,942 84,258 5,942
Print 4,345 - 4,345 -
-------- -------- -------- --------
Total $604,301 $177,120 $604,301 $177,120
======== ======== ======== ========
</TABLE>

11
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

This Form 10-Q contains forward-looking statements, including
statements under the captions "Factors that May Affect Future Results" and
elsewhere in this Form 10-Q concerning our expectations of future revenue,
expenses, the outcome of our growth and acquisition strategy and the projected
growth of the U.S. Hispanic population. Forward-looking statements often include
words or phrases such as "will likely result," "expect," "will continue,"
"anticipate," "estimate," "intend," "plan," "project," "outlook," "seek" or
similar expressions. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties and other factors, some of which
are beyond our control, are difficult to predict and could cause actual results
to differ materially from those expressed in the forward-looking statements.
Factors which could cause actual results to differ from expectations include
those under the heading "Factors that May Affect Future Results." Our results of
operations may be adversely affected by one or more of these factors. We caution
you not to place undue reliance on these forward-looking statements, which
reflect our management's view only as of the date of this Form 10-Q.

Such statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore our actual results could differ materially and adversely from
those expressed in any forward-looking statements as a result of various
factors. The section entitled "Factors That May Affect Future Results" set forth
in this Form 10-Q and similar discussions in our registration statement declared
effective by the SEC on August 1, 2000 discuss some of the important risk
factors that may affect our business, results of operations and financial
condition. You should carefully consider those risks, in addition to the other
information in this report and in our other filings with the SEC, before
deciding to invest in our company or to maintain or increase your investment. We
undertake no obligation to revise or update publicly any forward-looking
statements for any reason. The information contained in this Form 10-Q is not a
complete description of our business or the risks associated with an investment
in our common stock. We urge you to carefully review and consider the various
disclosures made by us in this report and in our other reports filed with the
SEC that discuss our business in greater detail.

We operate 31 television stations (and have three additional
television stations that are not yet operational) and 26 radio stations
primarily in the Southwestern United States where the majority of U.S. Hispanics
live, including the U.S./Mexican border markets. Our television stations consist
primarily of Univision affiliates serving 17 of the top 50 U.S. Hispanic
markets. Our radio stations consist of 16 FM and ten AM stations serving
portions of the California, Colorado, New Mexico and Texas markets.

We were organized as a Delaware limited liability company in January
1996 to combine the operations of our predecessor entities. On August 3, 2000 we
completed a reorganization in which all of the outstanding direct and indirect
membership interests of our predecessor and Univision's subordinated note and
option were exchanged for shares of our common stock.

We generate revenue from sales of national and local advertising time
on television and radio stations and advertising in our publications.
Advertising rates are, in large part, based on each station's ability to attract
audiences in demographic groups targeted by advertisers. We recognize
advertising revenue when the commercials are broadcast and publishing services
are provided. We incur

12
<PAGE>

commissions from agencies on local, regional and national advertising. Our
revenue reflects deductions from gross revenue for commissions to these
agencies.

Our primary expenses are employee compensation, including commissions paid
to our sales staffs, marketing, promotion and selling costs, technical, local
programming, engineering costs and general and administrative expenses. Our
local programming costs for television consist of costs related to producing a
local newscast in each of our markets.

We have historically not had material income tax expense or benefit
reflected in our statement of operations as the majority of our subsidiaries
have been non-taxpaying entities. Federal and state income taxes attributable
to income during such periods were incurred and paid directly by the members of
our predecessor. Accordingly, no discussion of income taxes is included in this
section. We are now a taxpaying organization. We have included in our
historical financial statements a pro forma provision for income taxes and a pro
forma net loss to show what our net income or loss would have been if we were a
taxpaying entity. We anticipate that our future effective income tax rate will
vary from 40% due to a portion of our purchase price for the LCG and Z-Spanish
Media acquisitions being allocated to non-tax deductible goodwill.

Three Months and Six Months Ended June 30, 2000
Compared to the Three Months and Six Months Ended June 30, 1999

The following table sets forth selected data from our operating results for
the three months and six months ended June 30, 1999 and 2000 (dollars in
thousands):

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, % June 30, June 30, %
2000 1999 Change 2000 1999 Change
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Gross revenue $ 39,899 $16,141 147% $ 59,239 $ 29,154 103%
Less agency commissions 4,239 1,655 156% 6,315 2,939 115%
--------- ------- --------- --------
Net revenue 35,660 14,486 146% 52,924 26,215 102%
Direct operating expenses 13,073 5,896 122% 20,956 10,568 98%
Selling, general and
administrative expenses 8,588 2,924 194% 12,337 5,434 127%
Corporate expenses 2,180 1,383 58% 4,028 2,687 50%
Depreciation and amortization 10,260 4,059 153% 15,137 7,380 105%
Non-cash stock-based
compensation 3,563 7,286 (51%) 3,563 14,572 (76%)
--------- ------- --------- --------
Operating (loss) (2,004) (7,062) 72% (3,097) (14,426) 79%
Interest expense, net 9,797 1,925 409% 13,694 3,948 247%
Non-cash interest expense relating
to beneficial conversion option 5,461 - - 37,061 - -
--------- ------- --------- --------
Loss before income tax (17,262) (8,987) (92%) (53,852) (18,374) (193%)
Income tax benefit (expense) (165) (155) (6%) (159) (81) (96%)
--------- ------- --------- --------
Net loss $ (17,427) $(9,142) (91%) $ (54,011) $(18,455) (193%)
========= ======= ========= ========
Other Data:
Broadcast cash flow $ 13,999 $ 5,666 147% $ 19,631 $ 10,213 92%
EBITDA (adjusted for non-cash
stock-based compensation) $ 11,819 $ 4,283 176% $ 15,603 $ 7,526 107%
Cash flows from operating
activities $ 3,730 $ 56 66% $ 4,758 $ 955 398%
Cash flows from investing
activities $(255,075) $(8,728) 2822% $(318,901) $(25,773) 1137%
Cash flows from financing
activities $ 252,438 $ 6,933 3541% $ 316,392 $ 22,503 1306%
</TABLE>

13
<PAGE>

Broadcast cash flow means operating income (loss) before corporate
expenses, depreciation and amortization, non-cash stock-based compensation and
gain on sale of assets. We have presented broadcast cash flow which we believe
is comparable to the data provided by other companies in the broadcast industry,
because such data is commonly used as a measure of performance for companies in
our industry. However, broadcast cash flow should not be construed as an
alternative to operating income (as determined in accordance with generally
accepted accounting principles) as an indicator of operating performance or to
cash flows from operating activities (as determined in accordance with generally
accepted accounting principles) as a measure of liquidity.

EBITDA means broadcast cash flow less corporate expenses (adjusted for non-
cash stock-based compensation) and is commonly used in the broadcast industry to
analyze and compare broadcast companies on the basis of operating performance,
leverage and liquidity. EBITDA, as presented above, may not be comparable to
similarly titled measures of other companies unless such measures are calculated
in substantially the same fashion. EBITDA should not be construed as an
alternative to operating income (as determined in accordance with generally
accepted accounting principles) as an indicator of operating performance or to
cash flows from operating activities (as determined in accordance with generally
accepted accounting principles) as a measure of liquidity.

Net Revenue. Net revenue increased to $35.7 million for the quarter ended
June 30, 2000 from $14.5 million for the quarter ended June 30, 1999, an
increase of $21.2 million. This increase was primarily attributable to the
acquisition of LCG which accounted for $11.7 million. Other acquisitions
accounted for $2.7 million of the increase. Net revenue increased to $52.9
million for the six months ended June 30, 2000, from $26.2 million for the six
months ended June 30, 1999, an increase of $26.7 million. This increase was
primarily related to the acquisition of LCG.

Direct Operating Expenses. Direct operating expenses increased to $13.1
million for the quarter ended June 30, 2000 from $5.9 million for the quarter
ended June 30, 1999, an increase of $7.2 million. This increase was primarily
attributable to the acquisition of LCG and television stations purchased in
Tampa, Florida and San Diego, California. As a percentage of net revenue,
direct operating expenses decreased to 37% for the quarter ended June 30, 2000
from 41% for the quarter ended June 30, 1999.

Direct operating expenses increased to $21.0 million for the six months
ended June 30, 2000 from $10.6 million for the six months ended June 30, 1999,
an increase of $10.4 million. This increase was primarily attributable to the
acquisition of LCG and television stations purchased in Tampa, Florida and San
Diego, California. As a percentage of net revenues, direct operating expenses
remained consistent at 40% for the six months ended June 30, 2000 and June 30,
1999.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $8.6 million for the quarter ended June 30,
2000 from $2.9 million for the quarter ended June 30, 1999, an increase of $5.7
million. This increase was primarily attributable to the acquisition of LCG and
television stations in Tampa, Florida and San Diego, California. As a
percentage of net revenue, selling, general and administrative expenses
increased to 24% for the quarter ended June 30, 2000 from 20% for the quarter
ended June 30, 1999 due to the increase in selling expenses.

Selling, general and administrative expenses increased to $12.3 million for
the six months ended June 30, 2000 from $5.4 million for the six months ended
June 30, 1999, an increase of $6.9 million. This increase was primarily
attributable to the acquisition of LCG and television stations in Tampa, Florida
and San Diego, California. As a percentage of net revenue, selling, general and
administrative

14
<PAGE>

expenses increased to 23% for the six months ended June 30, 2000 from 21% for
the six months ended June 30, 1999.

Corporate Expenses. Corporate expenses increased to $2.2 million for the
quarter ended June 30, 2000 from $1.4 million for the quarter ended June 30,
1999, an increase of $0.8 million. This increase was primarily due to the
acquisition of LCG and the hiring of additional corporate personnel due to our
growth and the costs associated with being a public company. As a percentage of
net revenue, corporate expenses decreased to 6% for the quarter ended June 30,
2000 from 10% for the quarter ended June 30, 1999 due to an increase in sales.

Corporate expenses increased to $4.0 million for the six months ended June
30, 2000 from $2.7 million for the six months ended June 30, 1999, an increase
of $1.3 million. This increase was primarily due to the acquisition of LCG and
the hiring of additional corporate personnel due to our growth and the costs
associated with being a public company. As a percentage of net revenue,
corporate expenses decreased to 8% for the six months ended June 30, 2000 from
10% for the six months ended June 30, 1999.

Depreciation and Amortization. Depreciation and amortization increased to
$10.3 million for the quarter ended June 30, 2000 from $4.1 million for the
quarter ended June 30, 1999, an increase of $6.2 million. This increase was
primarily attributable to the acquisition of LCG.

Depreciation and amortization increased to $15.1 million for the six months
ended June 30, 2000 from $7.4 million for the six months ended June 30, 1999, an
increase of $7.8 million. This increase was primarily attributable to the
acquisition of LCG.

Non-Cash Stock-Based Compensation. Non-cash stock-based compensation
decreased to $3.6 million for the quarter ended June 30, 2000 from $7.3 million
for quarter ended June 30, 1999 a decrease of $3.7 million. Non-cash stock-
based compensation consists primarily of compensation expense relating to stock
awards granted to our employees during the second quarter of 2000, and the first
six months of 1999.

Operating Loss. As a result of the above factors, we recognized an
operating loss of $2.0 million for the quarter ended June 30, 2000 compared to
an operating loss of $7.1 million for the quarter ended June 30, 1999 and an
operating loss of $3.1 million for the six months ended June 30, 2000 compared
to an operating loss of $14.4 million for the six months ended June 30, 1999.
Excluding non-cash stock-based compensation, we recognized operating income of
$1.6 million for the quarter ended June 30, 2000, compared to operating income
of $0.2 million for the quarter ended June 30, 1999, an increase of $1.3
million. The increase was primarily due to the increase in net revenue offset
by the increase in direct operating expenses.

Interest Expense, Net. Interest expense increased to $9.8 million for the
quarter ended June 30, 2000 from $1.9 million for the quarter ended June 30,
1999, an increase of $7.9 million. This increase is primarily due to increased
bank loan facilities in connection with the acquisition of LCG.

Interest expense increased to $13.7 million for the six months ended June
30, 2000 from $3.9 million for the six months ended June 30, 1999, an increase
of $9.8 million. This increase is primarily due to increased bank loan
facilities in connection with the acquisition of LCG. The non-cash interest
expense of $5.5 million for the quarter ended June 30, 2000 relates to the
estimated intrinsic value of the conversion option feature in our $90.0 million
convertible subordinated note, used to finance our acquisition of LCG. The non-
cash interest expense of $37.1 million for the six months ended June 30, 2000
relates to the estimated intrinsic value of the conversion option in our $90.0
million convertible

15
<PAGE>

subordinated note, and our subordinated note with Univision.

Net Loss. We recognized a net loss of $17.4 million for the quarter ended
June 30, 2000 compared to a net loss of $9.1 million for the quarter ended June
30, 1999. Excluding non-cash stock-based compensation and interest expense
relating to the estimated intrinsic value of the conversion option feature in
our $90.0 million convertible subordinated note, our net loss increased to $8.4
million for the quarter ended June 30, 2000 from $1.9 million for the quarter
ended June 30, 1999.

We recognized a net loss of $54.0 million for the six months ended June 30,
2000 compared to a net loss of $18.5 million for the six months ended June 30,
1999. Excluding non-cash stock-based compensation and interest expense relating
to the estimated intrinsic value of the conversion option feature in our $90.0
million convertible subordinated note and our subordinated note to Univision,
our net loss increased to $13.4 million for the six months ended June 30, 2000
from $3.9 million for the quarter ended June 30, 1999.

Broadcast Cash Flow. Broadcast cash flow increased to $14.0 million for
the quarter ended June 30, 2000 from $5.7 million for the quarter ended June 30,
1999, an increase of $8.3 million. As a percentage of net revenue, broadcast
cash flow was consistent at 39% for the quarters ended June 30, 2000 and June
30, 1999.

Broadcast cash flow increased to $19.6 million for the six months ended
June 30, 2000 from $10.2 million for the six months ended June 30, 1999, an
increase of $9.4 million. As a percentage of net revenue, broadcast cash flow
decreased to 37% for the six months ended June 30, 2000 from 39% for the six
months ended June 30, 1999.

EBITDA. EBITDA increased to $11.8 million for the quarter ended June 30,
2000 from $4.3 million for the quarter ended June 30, 1999, an increase of $7.5
million. As a percentage of net revenue, EBITDA increased to 33% for the
quarter ended June 30, 2000 from 30% for the quarter ended June 30, 1999. The
increase in EBITDA was primarily due to the increase in direct sales, general
and administrative expenses offset by the increase in net revenue.

EBITDA increased to $15.6 million for the six months ended June 30, 2000
from $7.5 million for the six months ended June 30, 1999, an increase of $8.1
million. As a percentage of net revenue, EBITDA was consistent at 29% for the
six months ended June 30, 2000 and June 30, 1999. EBITDA was unchanged due to
the increase in direct sales, general and administrative expenses offset by the
increase in net revenue.

Liquidity and Capital Resources Overview

Our primary sources of liquidity are cash provided by operations, available
borrowings under our bank credit facilities and investments made by Univision
and TSG Capital Fund III, L.P. in 2000. We intend to enter into a new $600
million credit facility which will be comprised of a $250 million revolver, a
$150 million term loan expiring in 2007 and a $200 million term loan expiring in
2008. After consummation of all of the transactions set forth in Note 4 of the
Notes to Consolidated Financial Statements (Unaudited) above, we expect to have
approximately $200 million of debt outstanding under our proposed new bank
credit facility. The new facility has been committed to and is expected to be
in place by September 30, 2000. It will replace the current credit facility for
Entravision. Our obligations under this facility will be secured by all of our
assets as well as a pledge of the stock of several of our subsidiaries,
including our special purpose subsidiaries formed to hold our FCC licenses. The
facility will contain financial covenants, including a requirement not to exceed
a maximum debt to cash flow ratio and interest and fixed charge coverage ratios.
The facility will require us to maintain our FCC

16
<PAGE>

licenses for our broadcast properties and will contain other operating
covenants, including restrictions on our ability to incur additional
indebtedness and pay dividends.

During 2000, we anticipate our capital expenditures will be approximately
$23.0 million, including the building of two studio facilities, the transition
to digital television for three stations and upgrades and maintenance on
broadcasting equipment and facility improvements to radio stations in some of
our markets, including Dallas and Phoenix. We anticipate paying for these
capital expenditures out of net cash flow from operating activities. The amount
of these capital expenditures may change based on future changes in business
plans, our financial conditions and general economic conditions.

We currently anticipate that the net proceeds from our initial public
offering, funds generated from operations and available borrowings under our
credit facilities will be sufficient to meet our anticipated cash requirements
for the foreseeable future.

We continuously review, and are currently reviewing, opportunities to
acquire additional television and radio stations as well as billboards and other
opportunities targeting the U.S. Hispanic market. We expect to finance any
future acquisitions through funds generated from operations and borrowings under
our proposed new credit facility and through additional debt and equity
financings. Any additional financings, if needed, might not be available to us
on reasonable terms or at all. Failure to raise capital when needed could
seriously harm our business and our acquisition strategy. If additional funds
were raised through the issuance of equity securities, the percentage of
ownership of our stockholders would be reduced. Furthermore, these equity
securities might have rights preferences or privileges senior to our Class A
common stock.

New Pronouncements

In June 1998, FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which is required to be adopted in all
fiscal quarters of all fiscal years beginning after June 15, 2000. SFAS No. 133
permits early adoption as of the beginning of any fiscal quarter after its
issuance. The Company will adopt SFAS No. 133 effective January 1, 2001. SFAS
No. 133 will require the Company to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. If the derivative is a hedge, depending on the nature of
the hedge, changes in the fair value of derivatives will either be offset
against the change in fair value of the hedged assets, liabilities or firm
commitment through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
Because of the Company's minimal use of derivatives, management does not
anticipate that the adoption of SFAS No. 133 will have a significant effect on
the Company's earnings or financial position.

In December 1999, the SEC issued SAB No. 101, Revenue Recognition in
Financial Statements. SAB 101 provides guidance on the recognition, presentation
and disclosure of revenue in financial statements filed with the SEC. This
accounting bulletin, as amended in March 2000, is effective beginning in the
fourth quarter of 2000. Management does not believe that the adoption of SAB
101 will have a material impact on our or our acquired companies' financial
statements.

17
<PAGE>

Interpretation No. 44 is effective July 1, 2000, but certain conclusions in
Interpretation No. 44 cover specific events that occurred after either December
15, 1998 or January 12, 2000. Management believes that Interpretation No. 44
will not have a material effect on the financial position or the results of
operations of the Company upon adoption.

FACTORS THAT MAY AFFECT FUTURE RESULTS

In future periods, our business, financial condition and results of
operations may be affected by many factors, including, without limitation, to
the following:

Risks Related to Our Business

We have a history of losses that if continued into the future could
adversely affect the market price of our Class A common stock and our ability to
raise capital.

We had net losses of approximately $3.7 million and $40.0 million for the
years ended December 31, 1998 and 1999, and $18.5 million and $54.0 million for
the six months ended June 30, 1999 and 2000. In addition, we had a pro forma
net loss of $95.5 million for the year ended December 31, 1999, and a pro forma
net loss of $58.8 million for the six months ended June 30, 2000. We believe
losses may continue while we pursue our acquisition strategy. If we cannot
generate profits in the future, it could adversely affect the market price of
our Class A common stock, which in turn could adversely affect our ability to
raise additional equity capital or to incur additional debt.

If we cannot successfully integrate our recent, pending and future
acquisitions, it could decrease our revenue or increase our costs.

We acquired LCG on April 20, 2000, we acquired Z-Spanish Media on August 9,
2000 and we have agreed to acquire certain outdoor advertising assets of
Infinity Broadcasting Corporation. As a result of these acquisitions, our
number of employees grew from 562 as of December 31, 1999 to approximately 1,050
as of June 30, 2000. To integrate these and other pending and future
acquisitions, we need to:

. retain key management and personnel of acquired companies;
. successfully merge corporate cultures and business processes;
. realize sales efficiencies and cost reduction benefits; and
. operate successfully in markets in which we may have little or no
prior experience.

In addition, after we have completed an acquisition, our management must be
able to assume significantly greater responsibilities, and this in turn may
cause them to divert their attention from our existing operations. If we are
unable to completely integrate into our business the operations of the companies
that we have recently acquired or that we may acquire in the future, our revenue
could decrease or our costs could increase.

Our acquisition of certain outdoor advertising assets from Infinity
Broadcasting Corporation is being made as a divestiture of assets in accordance
with the final written judgment of an antitrust proceeding between the
Department of Justice and Infinity Broadcasting, among others. Pursuant to the
final judgment, the Department of Justice must be satisfied, in its sole
discretion, that the divestiture of these outdoor advertising assets will remedy
the competitive harm alleged by the Department of Justice in the complaint
underlying the antitrust proceeding. The Department of Justice has informed us
in writing that it is reviewing the terms of our acquisition of such assets in
order to approve us as a buyer. If, in its sole discretion, the Department of
Justice determines that we are not an appropriate buyer for

18
<PAGE>

these assets, we will not be permitted to consummate the acquisition and our
outdoor advertising revenue will be significantly reduced.

We may require significant additional capital for future acquisitions and
general working capital needs. If our cash flow and existing working capital
are not sufficient to fund future acquisitions and our general working capital
requirements and debt service, we will have to raise additional funds by selling
equity, refinancing some or all of our existing debt or selling assets or
subsidiaries. None of these alternatives for raising additional funds may be
available on acceptable terms to us or in amounts sufficient for us to meet our
requirements. Our failure to obtain any required new financing may prevent
future acquisitions and have a material adverse effect on our ability to grow
through acquisitions.

Our substantial level of debt could limit our ability to grow and compete.

After repaying some of our outstanding indebtedness with a portion of the
proceeds from our IPO, and after the consummation of our pending acquisitions
described elsewhere in this Form 10-Q, we expect to have approximately $200
million of debt outstanding under our proposed new bank credit facility. We
expect to obtain a portion of our required capital through debt financing that
bears or is likely to bear interest at a variable rate, subjecting us to
interest rate risk. A significant portion of our cash flow from operations will
be dedicated to servicing our debt obligations and our ability to obtain
additional financing may be limited.

We may not have sufficient future cash flow to meet our debt payments, or
we may not be able to refinance any of our debt at maturity. We have pledged
substantially all of our assets to our lenders as collateral. Our lenders could
proceed against the collateral granted to them to repay outstanding indebtedness
if we are unable to meet our debt service obligations. If the amounts
outstanding under our bank credit facilities are accelerated, our assets may not
be sufficient to repay in full the money owed to such lenders.

The terms of our current bank credit facilities restrict, and our proposed
new bank credit facility will restrict, our ability to make acquisitions or
investments and to obtain additional financing.

Our bank credit facilities contain, and our proposed new bank credit
facility will contain, covenants that restrict, among other things, our ability
to:

. incur additional indebtedness;
. pay dividends;
. make acquisitions or investments; and
. merge, consolidate or sell assets.

Our bank credit facilities also require, and our proposed new bank credit
facility will require, us to maintain specific financial ratios. A breach of
any of the covenants contained in our bank credit facilities, or our proposed
new bank credit facility, could allow our lenders to declare all amounts
outstanding under such facilities to be immediately due and payable.

Our executive officers have control over our policies, affairs and all
other aspects of our business and future direction.

Walter F. Ulloa, our Chairman and Chief Executive Officer, Philip C.
Wilkinson, our President and Chief Operating Officer, and Paul A. Zevnik, our
Secretary (or trusts or controlled entities of such individuals), own all of the
shares of our Class B common stock, and have approximately 77% of the combined
voting power of our outstanding shares of common stock. The holders of our
Class B common

19
<PAGE>

stock are entitled to ten votes per share on any matter subject to a vote of the
stockholders. Accordingly, Messrs. Ulloa, Wilkinson and Zevnik have the ability
to elect each of the remaining members of our board of directors, other than the
two members of our board of directors to be appointed by Univision, and will
have control of all aspects of our business and future direction. Messrs. Ulloa,
Wilkinson and Zevnik have agreed contractually to elect themselves, Amador S.
Bustos, the President of our Radio Division, and a representative of TSG Capital
Fund III, L.P. as directors of our company. This control may discourage certain
types of transactions involving an actual or potential change of control of our
company, such as a merger or sale of our company.

Univision will have significant influence over our business and could make
certain transactions more difficult or impossible to complete.

Univision, as the holder of all of our Class C common stock, has
significant influence over material decisions relating to our business,
including the right to elect two of our directors, and the right to approve
material decisions involving our company, including any merger, consolidation or
other business combination, any dissolution of our company and any transfer of
the FCC licenses for any of our Univision-affiliated television stations.
Univision's ownership interest may have the effect of delaying, deterring or
preventing a change in control of our company and may make some transactions
more difficult or impossible to complete without its support.

Our television ratings and revenue could decline significantly if our
relationship with Univision or if Univision's success changes in an adverse
manner.

If our relationship with Univision changes in an adverse manner, or if
Univision's success diminishes, it could have a material adverse effect on our
ability to generate television advertising revenue on which our television
business depends. The ratings of Univision's network programming might decline
or Univision might not continue to provide programming, marketing, available
advertising time and other support to its affiliates on the same basis as
currently provided. Additionally, by aligning ourselves closely with Univision,
we might forego other opportunities that could diversify our television
programming and avoid dependence on any one television network. Univision's
relationships with Grupo Televisa, S.A. de C.V. and Corporacion Venezolana de
Television, C.A., or Venevision, are important to Univision's and consequently
our, continued success. For example, we could be adversely affected by the
current dispute between Univision and Televisa. Under its program license
agreements with Televisa, Univision has the first right to air Televisa's
Spanish-language programming in the United States through 2017. Televisa now
asserts that it can directly broadcast that same programming into the United
States through a direct satellite venture in Mexico.

Cancellations or reductions of advertising could cause our quarterly
results to fluctuate, which could adversely affect the market price of our Class
A common stock.

We do not obtain long-term commitments from our advertisers, and
advertisers may cancel, reduce or postpone orders without penalty.
Cancellations, reductions or delays in purchases of advertising could adversely
affect our revenue, especially if we are unable to replace such purchases.

Our expense levels are based, in part, on expected future revenue and are
relatively fixed once set. Therefore, unforeseen fluctuations in advertising
sales could adversely impact our operating results. These factors could cause
our quarterly results to fluctuate, which could adversely effect the market
price of our Class A common stock.

Risks Related to the Television, Radio, Outdoor Advertising and Publishing
Industries

20
<PAGE>

If we are unable to maintain our FCC license at any station, we may have to
cease operations at that station.

The success of our television and radio operations depends, in part, on
acquiring and maintaining broadcast licenses issued by the FCC, which are
typically issued for a maximum term of eight years and are subject to renewal.
Pending or future renewal applications submitted by us may not be approved, and
renewals may include conditions or qualifications that could restrict our
television and radio operations. In addition, third parties may challenge our
renewal applications. If the FCC were to issue an order denying a license
renewal application or revoking a license, we could be required to cease
operating the broadcast station covered by the license.

Our failure to maintain our FCC broadcast licenses could cause a default
under our credit facilities and cause an acceleration of our indebtedness.

Our bank credit facilities require us to maintain our FCC licenses. If the
FCC were to revoke any of our material licenses, our lenders could declare all
amounts outstanding under the bank credit facilities to be immediately due and
payable. If our indebtedness is accelerated, we may not have sufficient funds
to pay the amounts owed.

Displacement of any of our low-power television stations could cause our
ratings and revenue for any such station to decrease.

Our low-power television stations operate with far less power and coverage
than our full-power stations. The FCC rules under which we operate provide that
low-power television stations are treated as a secondary service. In the event
that our stations would cause interference to full-power stations, we are
required to eliminate the interference or terminate service. As a result of the
FCC's initiation of digital television service and actions by Congress to
reclaim channels previously used fro broadcasting for auction to wireless
services or assignment to public safety services, the number of available
broadcast channels has been narrowed. The result is that in a few urban markets
where we operate, including Washington, D.C. and San Diego, there are a limited
number of alternative channels to which our low-power television stations can
migrate as they are displaced by full-power broadcasters and non-broadcast
services. If we are unable to move our signals to replacement channels, we may
be unable to maintain the same level of service, which could harm our ratings
and advertising revenue or, in the worst case, cause us to discontinue
operations at those low-power stations.

The required conversion to digital television could impose significant
costs on us which may not be balanced by consumer demand.

The FCC requires us to provide a digitally transmitted signal by May 1,
2002 for all of our U.S. television stations and, generally, to stop
broadcasting analog signals by 2006. Our costs to convert our television
stations to digital television could be significant, and there may not be any
consumer demand for digital television services. The imposition of digital
television and the removal of Channels 60-69 from use for television
broadcasting have reduced available channels, which may affect our continued
ability to operate certain of our low-power television stations.

Changes in the rules and regulations of the FCC could result in increased
competition for our broadcast stations that could lead to increased competition
in our markets.

Recent and prospective actions by the FCC could cause us to face increased
competition in the future. The changes include:

21
<PAGE>

. relaxation of restrictions on the participation by regional telephone
operating companies in cable television and other direct-to-home audio
and video technologies;
. the establishment of a Class A television service for low-power
stations that make such stations primary stations and give them
protections against full-service stations;
. plans to license low-power FM radio stations that will be designed to
serve small localized areas and niche audiences; and
. permission for direct broadcast satellite television to provide the
programming of traditional over-the-air stations, including local and
out-of-market network stations.

Because our full-power television stations rely on "must carry" rights to
obtain cable carriage, new laws or regulations that eliminate or limit the scope
of our cable carriage rights could have a material adverse impact on our
television operations.

Pursuant to the "must carry" provisions of the Cable Television Consumer
Protection and Competition Act of 1992, a broadcaster may demand carriage on a
specific channel on cable systems within its market. However, the future of
those "must carry" rights is uncertain, especially as they relate to the
carriage of digital television stations. The current FCC rules relate only to
the carriage of analog television signals. It is not clear what, if any, "must
carry" rights television stations will have after they make the transition to
digital television. New laws or regulations that eliminate or limit the scope
of our cable carriage rights could have a material adverse impact on our
television operations.

Our low-power television stations do not have "must carry" rights. In
seven markets where we currently hold only a low-power license we may face
future uncertainty with respect to the availability of cable carriage. With the
exception of the San Angelo market, all of our low-power stations reach a
substantial portion of the Hispanic cable households in their respective
markets.

If we are unable to compete effectively for advertising revenue against
other stations and other media companies, some of which have greater resources
than we do, we could suffer a decrease in advertising revenues.

We compete with Spanish-language and general market media in each of our
business segments. Some of our competitors are larger and have significantly
greater resources than we do. In addition, the Telecommunications Act
facilitates the entry of other broadcasting companies into the markets in which
we operate stations or may operate stations in the future. If we are unable to
compete successfully in the markets we serve, we may suffer a decrease in
advertising revenue, which could adversely affect our business and financial
condition.

Strikes, work stoppages and slowdowns by our employees could disrupt our
publishing operations.

Our publishing business depends to a significant degree on our ability to
avoid strikes and other work stoppages by our employees. The Newspaper and Mail
Deliverers' Union of New York and Vicinity and the Newspaper Guild of New York
represent our publishing employees. Our collective bargaining agreement with
the Newspaper and Mail Deliverers' Union of New York and Vicinity expires on
March 30, 2004. Our collective bargaining agreement with the Newspaper Guild of
New York expires on June 30, 2002. Future collective bargaining agreements may
not be negotiated without service interruptions, and the results of these
negotiations may result in decreased revenue in our publishing operations.

Stockholders who desire to change control of our Company may be prevented
from doing so by provisions of our charter, applicable law and our credit
agreement.

22
<PAGE>

Our charter could make it more difficult for a third party to acquire us,
even if doing so would benefit our stockholders. Our charter provisions could
diminish the opportunities for a stockholder to participate in tender offers.
In addition, under our charter, our board of directors may issue preferred stock
that could have the effect of delaying or preventing a change in control of our
company. The issuance of preferred stock could also negatively affect the
voting power of holders of our common stock. The provisions of our charter may
have the effect of discouraging or preventing an acquisition or sale of our
business. In addition, Section 203 of the Delaware General Corporation Law
imposes restrictions on mergers and other business combinations between us and
any holder of 15% or more of our common stock.

The transfer restrictions imposed on the broadcast licenses we own also
restrict the ability of third parties to acquire us. Our licenses may only be
transferred with prior approval by the FCC. Accordingly, the number of potential
transferees of our licenses is limited, and any acquisition, merger or other
business combination involving Entravision would be subject to regulatory
approval.

In addition, the documents governing our indebtedness contain limitations
on our ability to enter into a change of control transaction. Under these
documents, the occurrence of a change of control transaction, in some cases
after notice and grace periods, would constitute an event of default permitting
acceleration of our outstanding indebtedness.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

General

Market risk represents the potential loss that may impact our financial
position, results of operations or cash flows due to adverse changes in the
financial markets. We are exposed to market risk from changes in the base rates
on our variable rate debt. We periodically enter into derivative financial
instrument transactions such as swaps or interest rate caps, in order to manage
or reduce our exposure to risk from changes in interest rates. Under no
circumstances do we enter into derivatives or other financial instrument
transactions for speculative purposes. Our credit facilities require us to
maintain an interest rate protection agreement.

Interest Rates

Our bank revolving line of credit bears interest at a variable rate of
LIBOR (7.77% at June 30, 2000) plus 1.625%, and our term loan used to finance
the LCG acquisition bears interest at LIBOR plus 4% at April 19, 2000. At June
30, 2000 we had $178.6 million of variable rate bank debt. We currently hedge a
portion of our outstanding variable rate debt by using an interest rate cap.
This interest rate cap effectively converts $50 million of our variable rate
debt to a LIBOR fixed rate of 7% for two-year period. Based on the current
level of borrowings under our credit facilities at our interest rate cap
agreements, an increase in LIBOR from the rates at June 30, 2000 to the cap
rates would not materially change our interest expense. The estimated fair
value of this interest rate cap agreement was not material and we expect to
continue to use similar types of interest rate protection agreements in the
future.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None, during the quarter ended June 30, 2000.

On July 20, 2000, Telemundo Network Group LLC, Telemundo Network, Inc. and
Council Tree

23
<PAGE>

Communications, L.L.C. filed an action against the Company and certain of the
Company's affiliates in the Circuit Court of the 11/th/ Judicial Circuit in and
for Miami-Dade County, Florida relating to the Company's investment in XHAS-TV,
Channel 33 in Tijuana, Mexico. The action seeks to have the sale voided and
other unspecified damages for breach of contract relating to Telemundo's
attempted exercise of a right of first refusal to buy the assets of XHAS-TV. In
addition to its contract claim, Telemundo asserts tortious interference, fraud
and conspiracy to defraud. We intend to vigorously defend against this action.

Subsequently, we filed an action in the Superior Court of the State of
California for the County of San Diego against the same Telemundo entities
seeking unspecified damages and a declaratory judgment that, among other things,
Telemundo failed to timely exercise its right of first refusal with respect to
the acquisition of the assets of XHAS-TV.

We do not believe that any resolution of these matters is likely to have an
adverse material impact.

Item 2. Changes in Securities and Use of Proceeds.

On April 19, 2000, we entered into an Exchange Agreement with our
predecessor, certain exchanging members and stockholders and Univision in which
an aggregate of 1,953,924 direct and indirect membership units in our
predecessor would be exchanged for an aggregate of 5,538,175 shares of our Class
A common stock and 27,678,533 shares of our Class B common stock, and
Univision's subordinated note and option would be exchanged for 21,983,392
newly-issued shares of our Class C common stock as part of our recapitalization
from a limited liability company to a C-corporation. The Exchange Agreement was
amended and restated in its entirety effective as of July 24, 2000. This
reorganization was consummated on August 3, 2000. These shares were issued
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act").

On April 20, 2000, we entered into an Acquisition Agreement and Plan of
Merger, as amended in July 2000, with our predecessor, ZSPN Acquisition
Corporation, Z-Spanish Media and certain of its stockholders pursuant to which
we agreed to acquire all of the outstanding capital stock of Z-Spanish Media for
approximately $448 million, including the repayment of approximately $109
million in debt. The transaction was consummated on August 9, 2000. The
consideration paid to the stockholders of Z-Spanish Media consisted of
approximately $224 million in cash and 7,187,902 shares of our Class A common
stock. These shares were issued pursuant to the exemption from registration
provided by Section 4(2) of the Securities Act.

(D) Use of Proceeds from Sales of Registered Securities.

On August 9, 2000, the Company completed an initial public offering (the
"Offering") of its Class A common stock. The underwriters for the Offering were
represented by Donaldson, Lufkin & Jenrette Securities Corporation, Credit
Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Salomon Smith Barney Inc., Bear, Stearns & Co. Inc. and DLJdirect
Inc. The shares of Class A common stock sold in the Offering were registered
under the Securities Act on a Registration Statement on Form S-1 (the
"Registration Statement") (Reg. No. 333-35336) that was declared effective by
the SEC on August 1, 2000. The Offering commenced on August 2, 2000.
46,435,458 shares of Class A common stock registered under the Registration
Statement were sold by the underwriters at a price of $16.50 per share. The
Company also sold 6,464,542 shares of its Class A common stock

24
<PAGE>

directly to Univision at a price of $15.47 per share. The aggregate public
offering price was approximately $866,191,522. In connection with the Offering,
the Company paid an aggregate of $47.9 million in underwriting discounts and
commissions to the Underwriters. In addition, the following table sets forth an
estimate of all expenses incurred in connection with the Offering, other than
underwriting discounts and commissions. All amounts shown are estimated except
for the fees payable to the SEC, National Association of Securities Dealers,
Inc. ("NASD") and the New York Stock Exchange.

<TABLE>
<S> <C>
SEC registration fee $ 195,519
NASD filing fee 30,500
New York Stock Exchange listing fee 500,000
Blue sky fees and expenses 7,500
Printing and engraving expenses 600,000
Legal fees and expenses 1,475,000
Accounting fees and expenses 1,398,000
Transfer agent fees 3,500
Miscellaneous 250,000
----------
Total $4,460,019
==========
</TABLE>

Use of Proceeds

The net proceeds to us from the sale of 52,900,000 shares of Class A common
stock in the Offering were approximately $818 million, after deducting the
underwriting fees and offering expenses.

We closed the acquisition of Z-Spanish Media on August 9, 2000.
Approximately $333 million of the net proceeds of the Offering were used to pay
the cash portion of the purchase price for Z-Spanish Media and to extinguish the
Z-Spanish Media indebtedness.

We intend to use the balance of the net proceeds from the Offering as
follows:

<TABLE>
<S> <C>
To repay the existing loan on LCG $115,000,000
To acquire certain billboards from Infinity Broadcasting Corporation 168,200,000
To acquire two radio stations from Citicasters Co. 68,000,000
To acquire four radio stations from Sunburst Media, LP 53,000,000
To repay part of the balance on Entravision's credit facility 50,000,000
To acquire a television station in Orlando, Florida 21,500,000
For working capital and general corporate purposes 9,300,000
------------
Total $485,000,000
============
</TABLE>

Until we use the net proceeds of the Offering as described above, we will
invest them in short-term, interest-bearing, investment grade securities.

None of the Company's net proceeds of the Offering were paid directly or
indirectly to any director, officer, general partner of the Company or their
associates, persons owning 10% or more of any class of equity securities of the
Company, or an affiliate of the Company.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

25
<PAGE>

By Unanimous Written Consent of the Sole Stockholder of Entravision
Communications Corporation, effective as of June 12, 2000, the sole stockholder
approved the authorization and sale of the Company's Class A common stock in the
initial public offering, the grant to the underwriters of an over-allotment
option, the reservation of shares of Class A common stock for issuance upon
conversion of the Class B common stock, the reservation of shares of Class A
common stock for issuance upon the conversion of shares of Class C common stock,
and the reservation of shares of Class A common stock for issuance upon the
conversion of the Series A preferred stock.

By Unanimous Written Consent of the Sole Stockholder of Entravision
Communications Corporation, effective as of June 12, 2000, the sole stockholder
approved the 2000 Omnibus Equity Incentive Plan and the reservation for issuance
under the Plan of 11,500,000 shares of Class A common stock.

By Unanimous Written Consent of the Sole Stockholder of Entravision
Communications Corporation in Lieu of Annual Meeting, effective as of June 12,
2000, the sole stockholder elected Walter F. Ulloa and Philip C. Wilkinson as
directors of the Company, effective immediately.

By Unanimous Written Consent of the Sole Stockholder of Entravision
Communications Corporation, effective July 31, 2000, the sole stockholder
elected the following individuals as directors of the Company, effective August
2, 2000, to serve until the next annual meeting of the stockholders or until
their successors are duly elected and have qualified, unless such individuals
are removed or are otherwise disqualified from serving as a director of the
Company:

Class A/B Directors Class C Directors
------------------- -----------------

Walter F. Ulloa Andrew W. Hobson
Philip C. Wilkinson Michael D. Wortsman
Paul A. Zevnik
Darryl B. Thompson
Amador S. Bustos

Item 5. Other Information.

Z-Spanish Media

On April 20, 2000, the Company agreed to acquire all of the outstanding
capital stock of Z-Spanish Media. Z-Spanish Media owns 33 radio stations and an
outdoor billboard business. The acquisition closed on August 9, 2000. The
purchase price, as amended on July 25, 2000, was approximately $448 million,
including approximately $109 million of debt. The purchase price consisted of
approximately $224 million in cash and the remainder in newly-issued Class A
common stock of the Company. In connection with this acquisition, the Company
issued approximately 1.5 million options on its Class A common stock in exchange
for Z-Spanish Media's previously outstanding stock options. In connection with
these stock options, the Company will record as additional purchase price
approximately $7.0 million for the excess of the estimated fair value over the
intrinsic value of the options. In addition, the Company will recognize
approximately $11.0 million as non-cash stock-based compensation over the
remaining three-year vesting period.

Citicasters Co.

In March 2000, the Company entered into an asset purchase agreement with
Citicasters Co., a subsidiary of Clear Channel Communications, Inc., to acquire
the FCC licenses relating to the operations

26
<PAGE>

of radio stations KACD(FM) Santa Monica, California, and KBCD(FM) Newport Beach,
California, for $85.0 million. On March 3, 2000, the Company deposited $17
million in escrow relating to this acquisition. This transaction closed on
August 24, 2000.

Radio Stations KFRQ(FM), KKPS(FM), KVPA(FM) and KVLY(FM)

On May 22, 2000, the Company agreed to acquire certain assets relating to
the operations of radio stations KFRQ(FM), KKPS(FM), KVPA(FM) and KVLY(FM) from
Sunburst Media, LP, for $55.0 million. This transaction closed on September 12,
2000.

Infinity Broadcasting Corporation

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

The following exhibits are attached hereto and incorporated herein by
reference.

<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
<C> <S>
2.1(1) Acquisition Agreement and Plan of Merger dated April 20, 2000 by and
among the registrant, Entravision Communications Company, L.L.C., ZSPN
Acquisition Corporation, Z-Spanish Media Corporation and certain of
its stockholders.
2.2(1) Exchange Agreement dated April 19, 2000 by and among the registrant,
Entravision Communications Company, L.L.C., certain exchanging members
and stockholders and Univision Communications Inc.
2.3* Amended and Restated Exchange Agreement dated July 24, 2000 by and
among the registrant, Entravision Communications Company, L.L.C.,
certain exchanging members and stockholders and Univision
Communications Inc.
2.4(1) Asset Purchase Agreement dated as of June 14, 2000 by and between the
registrant and Infinity Broadcasting Corporation.
2.5* First Amendment to Acquisition Agreement and Plan of Merger dated
August 9, 2000 by and among the registrant, Entravision Communications
Company, L.L.C., ZSPN Acquisition Corporation, Z-Spanish Media
Corporation and certain of its stockholders.
2.6(1) Asset Purchase Agreement dated as of February 29, 2000 by and between
Citicasters Co. and the registrant.
2.7* Asset Purchase Agreement dated as of May 22, 2000 by and between
Sunburst Media, LP and the registrant.
3.1* First Restated Certificate of Incorporation of registrant.
3.2* First Amended and Restated Bylaws of registrant.
10.1(1) 2000 Omnibus Equity Incentive Plan of the registrant.
10.2(1) Form of Voting Agreement by and among Walter F. Ulloa, Philip C.
Wilkinson, Paul A. Zevnik and the registrant.
10.3(1) Third Amendment to Amended and Restated Credit Agreement dated April
18,
</TABLE>

27
<PAGE>

<TABLE>
<C> <S>
2000 by and among KSMS-TV, Inc., Tierra Alta Broadcasting, Inc.,
Cabrillo Broadcasting Corporation, Golden Hills Broadcasting
Corporation, Las Tres Palmas Corporation, Valley Channel 48, Inc.,
Telecorpus, Inc., Entravision Communications Company, L.L.C., the
lender parties thereto and Union Bank of California, N.A., as agent.
10.4(1) Term Loan Agreement dated April 20, 2000 by and among LCG Acquisition
Corporation, the lender parties thereto and Union Bank of California,
N.A.
10.5(1) Security Agreement dated April 20, 2000 by and between LCG Acquisition
Corporation and Union Bank of California, N.A.
10.6(1) Pledge Agreement dated April 20, 2000 by Walter F. Ulloa and Philip C.
Wilkinson in favor of Union Bank of California, N.A.
10.7(1) Convertible Subordinated Note Purchase Agreement dated as of April 20,
2000 by and among Entravision Communications Company, L.L.C., the
registrant and certain investors
10.8(1) Subordinated Convertible Promissory Note dated April 20, 2000 in the
principal amount of $90 million from Entravision Communications
Company, L.L.C. in favor of TSG Capital Fund III, L.P.
10.9(1) Investor Rights Agreement dated April 20, 2000 by and among
Entravision Communications Company, L.L.C., the registrant and TSG
Capital Fund III, L.P.
10.10* Employment Agreement dated August 1, 2000 by and between the
registrant and Walter F. Ulloa.
10.11* Employment Agreement dated August 1, 2000 by and between the
registrant and Philip C. Wilkinson.
27.1* Financial Data Schedule.
</TABLE>
-----------------
* Filed herewith.

(1) Incorporated by reference from our Registration Statement on Form S-1, No.
333-35336, filed with the SEC on April 21, 2000, as amended by Amendment No.
1 thereto, filed with the SEC on June 14, 2000, Amendment No. 2 thereto,
filed with the SEC on July 10, 2000, Amendment No. 3 thereto, filed with the
SEC on July 11, 2000 and Amendment No. 4 thereto, filed with the SEC on July
26, 2000.

(b) Reports on Form 8-K

None.

28
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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.

ENTRAVISION COMMUNICATIONS CORPORATION

By: /s/ Jeanette Tully
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Jeanette Tully
Executive Vice President, Treasurer and
Chief Financial Officer

Dated: September 15, 2000