================================================================================





                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                      For the Quarter Ended March 31, 2001

                        Commission File Number 333-64709


                            Telemundo Holdings, Inc.
             (Exact name of registrant as specified in its charter)



                 Delaware                                         13-3993031
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)



          2290 West 8th Avenue
            Hialeah, Florida                                       33010
(Address of principal executive offices)                         (Zip Code)





       Registrant's telephone number, including area code: (305) 889-7068

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_  No ___

         As of May 11, 2001 there were 10,000 shares of common stock of the
registrant outstanding, all of which were owned by an affiliate. There is no
established public trading market for the registrant's common stock.



================================================================================


<PAGE>

                    TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

                                      INDEX



                                                                            Page
PART I. FINANCIAL INFORMATION:                                               No.
                                                                            ----

  Item 1. Financial Statements

    Consolidated Statements of Operations for the Three Months
       Ended March 31, 2001 and 2000 (Unaudited)...............................2

    Consolidated Balance Sheets at March 31, 2001 (Unaudited)
       and December 31, 2000...................................................3

    Consolidated Statement of Changes in Stockholders' Equity
       for the Three Months Ended March 31, 2001 (Unaudited)...................4

    Consolidated Statements of Cash Flows for the Three Months
       Ended March 31, 2001 and 2000 (Unaudited)...............................5

    Notes to Consolidated Financial Statements (Unaudited).....................6

  Item 2. Management's Discussion and Analysis of Results of
             Operations and Financial Condition...............................10

  Item 3. Quantitative and Qualitative Disclosures about Market Risk..........15

PART II. OTHER INFORMATION, AS APPLICABLE

  Item 6. Exhibits and Reports on Form 8-K....................................15

SIGNATURE.....................................................................16



                                       1
<PAGE>


PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS  (Unaudited)

(In thousands)

Three Months Ended March 31                                 2001        2000
--------------------------------------------------------------------------------

Net revenue............................................   $ 51,093     $ 44,244
                                                          --------     --------

Costs and expenses:
  Direct operating costs...............................     19,344       16,061
  Selling, general and administrative expenses.........     15,655       13,324
  Corporate expenses...................................      1,686        1,490
  Depreciation and amortization........................      8,378        7,427
                                                          --------     --------
                                                            45,063       38,302
                                                          --------     --------

Operating income.......................................      6,030        5,942

Interest expense, net..................................     (9,748)      (9,355)
                                                          --------     --------
Loss before income taxes and minority interest.........     (3,718)      (3,413)
Income tax benefit.....................................      1,043          620
Minority interest......................................       (614)        (442)
                                                          --------     --------

Net loss...............................................   $ (3,289)    $ (3,235)
                                                          ========     ========


See notes to consolidated financial statements


                                       2
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
<TABLE>
<CAPTION>
                                                                                  March 31,        December 31,
Assets                                                                                2001                2000
--------------------------------------------------------------------------------------------------------------
                                                                                (Unaudited)
<S>                                                                              <C>                 <C>
Current assets:
    Cash and cash equivalents ..............................................     $   6,763           $   3,284
    Accounts receivable, less allowance for doubtful accounts of $4,511
        and $8,219 .........................................................        32,336              37,859
    Television programming .................................................         5,011               5,109
    Prepaid expenses and other .............................................         3,183               4,111
    Due from Network Company, net ..........................................        19,881              13,719
                                                                                 ---------           ---------
             Total current assets ..........................................        67,174              64,082
Property and equipment, net ................................................        69,803              71,067
Television programming .....................................................         1,434               1,456
Other assets ...............................................................        10,398              10,619
Broadcast licenses and other intangible assets, net ........................       612,295             614,136
                                                                                 ---------           ---------

                                                                                 $ 761,104           $ 761,360
                                                                                 =========           =========
<CAPTION>
Liabilities and Stockholders' Equity
--------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                 <C>
Current liabilities:
    Accounts payable and accrued expenses ..................................     $  30,045           $  42,305
    Television programming obligations .....................................         1,892               2,218
    Current portion of long-term debt ......................................         5,187               5,031
    Financial liabilities ..................................................         1,275                --
                                                                                 ---------           ---------
            Total current liabilities ......................................        38,399              49,554
Long-term debt, net of current portion .....................................       413,452             400,199
Deferred taxes, net ........................................................        71,602              69,738
Other liabilities ..........................................................        24,016              24,192
                                                                                 ---------           ---------
                                                                                   547,469             543,683
                                                                                 ---------           ---------

Minority interest ..........................................................         5,652               5,627
                                                                                 ---------           ---------

Contingencies and commitments

Stockholders' equity:
    Common stock, $.01 par value, 10,000 shares authorized and outstanding..          --                  --
    Additional paid-in capital .............................................       228,706             228,706
    Retained earnings (accumulated deficit) ................................       (19,945)            (16,656)
    Accumulated other comprehensive loss ...................................          (778)               --
                                                                                 ---------           ---------
                                                                                   207,983             212,050
                                                                                 ---------           ---------

                                                                                 $ 761,104           $ 761,360
                                                                                 =========           =========
</TABLE>




See notes to consolidated financial statements


                                       3
<PAGE>


TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)

(In thousands, except share data)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------

                                                                              Retained        Accumulated
                                      Number of                Additional     Earnings           Other
                                        Shares       Common     Paid-In    (Accumulated     Comprehensive   Stockholders'
                                     Outstanding     Stock      Capital      Deficit)           Loss           Equity
                                     -----------     -----      -------      --------           ----           ------
<S>                                       <C>        <C>       <C>          <C>                <C>            <C>
Balance, December 31, 2000.........       10,000     $    -    $228,706     $(16,656)          $     -        $212,050

Net loss...........................            -          -           -       (3,289)                -          (3,289)
Cumulative adoption of new
   accounting principle - SFAS
   No. 133.........................            -          -           -            -             2,344           2,344
Other comprehensive loss...........            -          -           -            -            (3,122)         (3,122)
                                          ------     ------    --------     --------           -------        --------

Balance, March 31, 2001............       10,000     $    -    $228,706     $(19,945)          $  (778)       $207,983
                                          ======     ======    ========     ========           =======        ========
</TABLE>



See notes to consolidated financial statements


                                       4
<PAGE>


TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)

(In thousands)

<TABLE>
<CAPTION>
Three Months Ended March 31                                                             2001          2000
----------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss ......................................................................     $ (3,289)     $ (3,235)
Adjustments to reconcile net loss to net cash
provided by operating activities:
    Depreciation and amortization .............................................        8,378         7,427
    Interest accretion ........................................................        4,628         4,138
    Provision for losses on accounts receivable ...............................          301           271
    Minority interest .........................................................          614           442
    Deferred taxes ............................................................       (1,350)       (1,346)
Changes in assets and liabilities:
    Accounts receivable .......................................................        5,680         3,652
    Television programming ....................................................          120        (1,416)
    Television programming obligations ........................................         (326)          551
    Due from Network Company, net .............................................       (6,162)        1,655
    Accounts payable and accrued expenses and other ...........................      (11,237)       (8,764)
                                                                                    --------      --------

                  Net cash (used in) provided by operating activities .........       (2,643)        3,375
                                                                                    --------      --------

CASH FLOWS FROM INVESTING ACTIVITY:

Additions to property and equipment ...........................................       (1,663)       (1,511)
                                                                                    --------      --------

                  Net cash used in investing activity .........................       (1,663)       (1,511)
                                                                                    --------      --------
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowing under Credit Facilities ...............................       10,000          --
Payments under Credit Facilities ..............................................       (1,219)       (6,125)
Payments to minority interest partner .........................................         (996)         (905)
                                                                                    --------      --------

                  Net cash provided by (used in) financing activities .........        7,785        (7,030)
                                                                                    --------      --------

Increase (decrease) in cash and cash equivalents ..............................        3,479        (5,166)
Cash and cash equivalents, beginning of period ................................        3,284         7,204
                                                                                    --------      --------

Cash and cash equivalents, end of period ......................................     $  6,763      $  2,038
                                                                                    ========      ========

Supplemental cash flow information:
    Interest paid .............................................................     $  5,001      $  7,319
                                                                                    ========      ========

    Income taxes paid, including Puerto Rico withholding taxes ................     $     24      $    953
                                                                                    ========      ========
</TABLE>


See notes to consolidated financial statements


                                       5
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
--------------------------------------------------------------------------------

1.       BUSINESS

Telemundo Holdings, Inc. ("Holdings", and collectively with its subsidiaries,
the "Company") is one of two national Spanish-language television broadcast
companies currently operating in the United States. The Company owns and
operates eight full-power UHF television stations serving the following Hispanic
Market Areas ("Market Areas" refers to Designated Market Area, a term developed
by Nielsen Media Research, Inc. and used by the television industry to describe
a geographically distinct television market) in the United States--Los Angeles,
New York, Miami, San Francisco, Chicago, Houston, San Antonio and Denver. The
Company also owns and operates the leading full-power VHF television station and
related production facilities in Puerto Rico. The Company's stations broadcast a
wide variety of network programming, including telenovelas (soap operas), talk
shows, movies, entertainment programs, national and international news, sporting
events, children's programming, music, comedy and dramatic series. Network
programming is provided by Telemundo Network Group LLC (the "Network Company"),
an affiliate of the Company. In addition, the Company supplements its network
programming with local programming focused on local news and community events.

2.       MERGER AND RELATED TRANSACTIONS

Holdings was originally formed as a holding company in connection with the
August 1998 acquisition of Telemundo Group, Inc. (consequently a wholly-owned
subsidiary of Holdings) by Liberty Media Corporation (together with its
subsidiaries, "Liberty"), Sony Pictures Entertainment Inc. (together with its
subsidiaries, "Sony Pictures") and Station Partners, LLC ("Station Partners")
(the "Merger").

In connection with the Merger, the Network Company entered into an affiliation
agreement with the Company and related affiliation agreements with the Company's
stations (collectively, the "Affiliation Agreement"), pursuant to which the
Network Company provides network programming to the Company, and the Company and
the Network Company pool and share advertising revenue pursuant to a revenue
sharing arrangement. Pursuant to the Affiliation Agreement, the Company receives
a formula-based share of pooled advertising revenue generated by the Company and
the Network Company. The following revenue sources (collectively, the "Aggregate
Net Advertising Receipts") are included in the pooled revenue: (i) 61% of the
net advertising revenue received by the Network Company pursuant to the sale of
network advertising and (ii) 100% of the net advertising revenue received by the
Company (excluding WKAQ in Puerto Rico) from the sale of local and national spot
advertising time. The pooled revenue is shared between the Company and the
Network Company, with the Company's share based on the following formula for the
first year of the agreement: (i) 80% of the first $130 million of Aggregate Net
Advertising Receipts; plus (ii) 55% of the incremental Aggregate Net Advertising
Receipts above $130 million up to $230 million; plus (iii) 45% of the
incremental Aggregate Net Advertising Receipts above $230 million. After the
first year, the threshold levels (i.e., $130 million and $230 million) increase
3% annually.

The Company incurs non-network marketing/promotional expenditures, programming
expenditures and capital expenditures for its stations. All network programming
costs are borne by the Network Company. As part of the Affiliation Agreement,
the Network Company and the Company agreed, subject to various conditions, to
incur certain programming, marketing/promotional and capital expenditures in
each year. These expenditures may be reduced or eliminated based on financial
tests, which assume such expenditures produce positive financial results (i.e.,
incremental revenue). The Company can also elect to incur a portion of such
expenditures in a subsequent year.


                                       6
<PAGE>


TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
--------------------------------------------------------------------------------

3.       THE RESTRUCTURING AND RELATED TRANSACTIONS

The former stockholders of Holdings consummated a restructuring of interests on
December 15, 2000 (the "Restructuring"). As part of the Restructuring, each of
Sony Pictures, Station Partners and Liberty contributed, among other things, all
of their capital stock in Holdings to Telemundo Communications Group, Inc., a
Delaware Corporation ("TCG"), in exchange for shares of common stock of TCG. In
connection with the Restructuring, Holdings' voting interests are now
beneficially owned, indirectly through ownership of voting interests of TCG, by
Bron-Villanueva Capital, LLC ("BV Capital"), Sony Pictures, Liberty and Station
Partners. Station Partners is currently owned by Council Tree Hispanic
Broadcasters II, L.L.C. ("Council Tree") and Bastion Capital Fund, L.P.
("Bastion") through its subsidiary, BCF Media, LLC, a Delaware limited liability
company ("BCF"). Bastion is an affiliate of BV Capital. Liberty's interest in
TCG is subject to an irrevocable proxy, subject to certain conditions, in favor
of Station Partners to vote all of the shares of common stock of TCG
beneficially owned by Liberty.

As a part of the Restructuring, Council Tree purchased membership interests in
Station Partners from a former shareholder of Holdings. Also in connection with
the Restructuring, Council Tree (through an affiliate) contributed KMAS-TV
("KMAS"), Channel 24, Steamboat Springs, Colorado, KSBS-LP, Channel 67, Denver,
Colorado, KMAS-LP, Channel 63, Estes Park, Colorado and K34FB, Channel 34,
Pueblo, Colorado (collectively, the "Denver Stations"), valued at $15 million,
to Station Partners, which subsequently contributed the Denver Stations to the
Company.

As a result of the Restructuring, TCG, through its subsidiary, Telemundo Network
Interest, Inc. ("TNI"), acquired 67% of the membership interests in the Network
Company, all of whose membership interests were previously owned by Liberty and
Sony Pictures. Specifically, Liberty contributed, through the contribution of
100% of the capital stock of one of its subsidiaries to TCG, 50% of the
outstanding membership interests of the Network Company in exchange for shares
of TCG. In addition, Sony Pictures contributed, through a subsidiary, 17% of the
outstanding membership interests of the Network Company to TCG in exchange for
shares of TCG. As a result, Sony Pictures retained 33% of the Network Company's
membership interests and TCG is the managing member of the Network Company.

4.       UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the accompanying unaudited consolidated financial
statements of the Company include all material adjustments (consisting of only
normal recurring accruals) necessary to present fairly the Company's unaudited
financial position at March 31, 2001, and the results of operations and cash
flows for all periods presented. The unaudited results of operations for interim
periods are not necessarily indicative of the results to be expected for the
year ending 2001.

For a summary of significant accounting policies, which have not changed from
December 31, 2000, and additional financial information, see the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.

Certain reclassifications have been made in the prior year's financial
statements to conform with the current year's presentation.

5.       TRANSACTIONS WITH AFFILIATES

Sony Pictures and TCG, through subsidiaries, own the Network Company. TCG is the
Company's sole shareholder. Pursuant to the Affiliation Agreement, the Company
recorded $12.4 million and $7.4 million in incremental net revenue for the three
months ended March 31, 2001 and 2000, respectively, the outstanding portion of
which is included in Due from Network Company, net. In addition, the Network
Company pays certain costs on behalf of the Company and the Company pays certain
costs on behalf of the Network Company, which are fully reimbursed. The Company
believes these costs to be at fair value and the outstanding balances are
included in Due from Network Company, net.


                                       7
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
--------------------------------------------------------------------------------

As a result of the Affiliation Agreement, the Company relies solely on the
Network Company for all of its network programming and is dependent, to a
significant extent, on the ability of the Network Company to generate
advertising revenue. The Spanish-language television market share for the
Company's stations are dependent upon the Network Company's ability to produce
or acquire and distribute programming which attracts significant viewer levels.
If the programming provided by the Network Company fails to attract viewers,
each of the Company's and the Network Company's ability to attract advertisers
and generate revenue and profits will be impaired. There can be no assurance
that the programming provided by the Network Company will achieve or maintain
satisfactory viewership levels or that the Company or the Network Company will
be able to generate significant advertising revenue.

6.       RECENT ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards 133 ("SFAS 133"), Accounting for Derivative Instruments and Hedging
Activities, as amended by SFAS 137, Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133,
and SFAS 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities. SFAS 133 requires that all derivatives be recorded as either assets
or liabilities measured at fair value on the balance sheet and establishes
criteria for designation and effectiveness of derivative transactions for which
hedge accounting is applied. The Company assesses the initial and ongoing
effectiveness of its hedging relationships in accordance with its documented
policies. As a result of the adoption of this standard as of January 1, 2001,
the Company recorded a transition adjustment reflecting a one-time after-tax
unrealized gain of $2.3 million to other comprehensive income.

The impact of the adoption of SFAS No. 133 relates to the Company's two interest
rate swaps, which are used to manage financing costs associated with changes in
variable interest rates on its $350 million senior secured credit facilities
("Credit Facilities"). The interest rate swap transactions qualify as cash flow
hedges and are recorded on the consolidated balance sheet as of March 31, 2001
as follows: $1.3 million financial liabilities and $778,000 accumulated other
comprehensive loss, net of income taxes of $497,000. The Company will apply the
assertions relating to SFAS No. 133 on a quarterly basis.

7.       COMPREHENSIVE LOSS

Comprehensive loss consists of net loss and changes in the value of derivatives
in accordance with the adoption of SFAS No. 133. The components of the Company's
comprehensive loss is as follows (in thousands):

                                                              Three Months Ended
                                                                March 31, 2001
                                                                --------------
             Net loss.....................................         $(3,289)
             Cumulative adoption of new accounting
                principle - SFAS No. 133, net of
                income taxes of $1,498....................           2,344
             Unrealized loss on derivatives,
                net of income taxes of $1,995.............          (3,122)
                                                                   -------
             Comprehensive loss...........................         $(4,067)
                                                                   =======

8.       ACQUISITION AND RELATED FINANCING

On February 9, 2001, the Company entered into a definitive agreement to purchase
the independent full-power UHF Spanish-language television station KWHY-TV,
Channel 22, in Los Angeles and its related low-power television station, KWHY-LP
(collectively, "KWHY") for approximately $239.0 million (the "KWHY
Acquisition"). The Federal Communications Commission ("FCC") approved the KWHY
Acquisition on April 26, 2001 and issued a public notice of the approval on May
2, 2001. The time period during which third parties may petition the FCC for
reconsideration of the approval expires on June 1, 2001 and the time period
during which the FCC may reconsider the approval on its own motion expires on
June 11, 2001. The Company anticipates that it will fund the KWHY Acquisition
through a combination of an equity contribution from TCG and borrowings to be
obtained in connection with a refinancing of the Company's existing Credit
Facilities.


                                       8
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
--------------------------------------------------------------------------------

On February 8, 2001, Holdings entered into a letter agreement with Credit Suisse
First Boston ("CSFB") pursuant to which CSFB has committed to provide $500
million senior secured credit facilities (the "Refinanced Credit Facilities"),
and to structure, arrange and syndicate the Refinanced Credit Facilities. The
closing of the Refinanced Credit Facilities is subject to satisfaction of
customary conditions precedent, including the absence of material adverse
changes in financial, banking or capital market conditions.



                                       9
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
--------------------------------------------------------------------------------

Introduction

Telemundo Holdings, Inc. ("Holdings", and collectively with its subsidiaries,
the "Company") is one of two national Spanish-language television broadcast
companies currently operating in the United States. The Company owns and
operates eight full-power UHF television stations serving the following Hispanic
Market Areas ("Market Areas" refers to Designated Market Area, a term developed
by Nielsen Media Research, Inc. and used by the television industry to describe
a geographically distinct television market) in the United States--Los Angeles,
New York, Miami, San Francisco, Chicago, Houston, San Antonio and Denver. Seven
of these stations serve the seven largest Hispanic Market Areas in the United
States. Four of these markets are among the five largest general Market Areas in
the United States. The Company also owns and operates the leading full-power VHF
television station and related production facilities in Puerto Rico and 17
domestic low-power television stations.

The Company's stations broadcast a wide variety of network programming,
including telenovelas (soap operas), talk shows, movies, entertainment programs,
national and international news, sporting events, children's programming, music,
comedy and dramatic series. In addition, the Company supplements its network
programming with local programming focused on local news and community events.
Network programming is provided 24-hours a day to the Company's U.S. stations by
Telemundo Network Group LLC (the "Network Company"), an affiliate of the
Company. The Company's Puerto Rico station, WKAQ, broadcasts a similar variety
of programs. However, while WKAQ airs certain of the Network Company's
programming, a substantial amount of its programming is either internally
developed and produced, or acquired directly by the station from third party
producers unrelated to the Network Company. Including the Company's owned and
operated stations, the Network Company currently serves 81 markets in the United
States, including 49 of the 50 largest Hispanic markets, and reaches
approximately 88% of all U.S. Hispanic households.

Holdings was originally formed as a holding company in connection with the
August 1998 acquisition of Telemundo Group, Inc. (consequently a wholly-owned
subsidiary of Holdings) by Liberty Media Corporation (together with its
subsidiaries, "Liberty"), Sony Pictures Entertainment Inc. (together with its
subsidiaries, "Sony Pictures") and Station Partners, LLC ("Station Partners")
(the "Merger"). The former stockholders of Holdings consummated a restructuring
of interests on December 15, 2000 (the "Restructuring"). As part of the
Restructuring, each of Sony Pictures, Station Partners and Liberty contributed,
among other things, all of their capital stock in Holdings to Telemundo
Communications Group, Inc. ("TCG"), in exchange for shares of common stock of
TCG. In connection with the Restructuring, Holdings' voting interests are now
beneficially owned indirectly through ownership of voting interests of TCG, by
Bron-Villanueva Capital, LLC ("BV Capital"), Sony Pictures, Liberty and Station
Partners. Station Partners is currently owned by Council Tree Hispanic
Broadcasters II, L.L.C. ("Council Tree") and by Bastion Capital Fund, L.P.
("Bastion") through its subsidiary, BCF Media, LLC, a Delaware limited liability
company ("BCF"). Bastion is an affiliate of BV Capital. Liberty's interest in
TCG is subject to an irrevocable proxy, subject to certain conditions, in favor
of Station Partners to vote all of the shares of common stock of TCG
beneficially owned by Liberty.

As a part of the Restructuring, Council Tree purchased membership interests in
Station Partners from a former shareholder of Holdings. Also in connection with
the Restructuring, Council Tree (through an affiliate) contributed KMAS-TV
("KMAS"), Channel 24, Steamboat Springs, Colorado, KSBS-LP, Channel 67, Denver,
Colorado, KMAS-LP, Channel 63, Estes Park, Colorado and K34FB, Channel 34,
Pueblo, Colorado (collectively, the "Denver Stations"), valued at $15 million,
to Station Partners, which subsequently contributed the Denver Stations to the
Company.

As a result of the Restructuring, TCG, through its subsidiary, Telemundo Network
Interest, Inc. ("TNI"), acquired 67% of the membership interests in the Network
Company, all of whose membership interests were previously owned by Liberty and
Sony Pictures. Specifically, Liberty contributed, through the contribution of
100% of the capital stock of one of its subsidiaries to TCG, 50% of the
outstanding membership interests of the Network Company in exchange for shares
of TCG. In addition, Sony Pictures contributed, through a subsidiary, 17% of the


                                       10
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION (Continued)
--------------------------------------------------------------------------------

outstanding membership interests of the Network Company to TCG in exchange for
shares for TCG. As a result, Sony Pictures retained 33% of the Network Company's
membership interests and TCG is the managing member of the Network Company.

In connection with the Merger, the Network Company entered into an affiliation
agreement with the Company and related affiliation agreements with the Company's
stations (collectively, the "Affiliation Agreement"), pursuant to which the
Network Company provides network programming to the Company, and the Company and
the Network Company pool and share advertising revenue pursuant to a revenue
sharing arrangement. Pursuant to the Affiliation Agreement, the Company receives
a formula-based share of pooled advertising revenue generated by the Company and
the Network Company. The following revenue sources (collectively, the "Aggregate
Net Advertising Receipts") are included in the pooled revenue: (i) 61% of the
net advertising revenue received by the Network Company pursuant to the sale of
network advertising and (ii) 100% of the net advertising revenue received by the
Company (excluding WKAQ in Puerto Rico) from the sale of local and national spot
advertising time. The pooled revenue is shared between the Company and the
Network Company, with the Company's share based on the following formula for the
first year of the agreement: (i) 80% of the first $130 million of Aggregate Net
Advertising Receipts; plus (ii) 55% of the incremental Aggregate Net Advertising
Receipts above $130 million up to $230 million; plus (iii) 45% of the
incremental Aggregate Net Advertising Receipts above $230 million. After the
first year, the threshold levels (i.e., $130 million and $230 million) increase
3% annually.

The Company incurs non-network marketing/promotional expenditures, programming
expenditures and capital expenditures for its stations. All network programming
costs are borne by the Network Company. As part of the Affiliation Agreement,
the Network Company and the Company agreed, subject to various conditions, to
incur certain programming, marketing/promotional and capital expenditures in
each year. These expenditures may be reduced or eliminated based on financial
tests, which assume such expenditures produce positive financial results (i.e.,
incremental revenue). The Company can also elect to incur a portion of such
expenditures in a subsequent year.

The following discussion and analysis of results of operations and financial
condition should be read in conjunction with the Company's consolidated
financial statements and related notes. Except for historical information
contained herein, certain matters discussed are "forward-looking statements"
within the meaning of section 27A of the Securities Act of 1933 and section 21E
of the Securities Exchange Act of 1934. Forward-looking statements are not
guarantees of future performance and are subject to certain risks and
uncertainties, including (without limitation) those risks associated with
operating in a competitive market; effect of national and local economic
conditions; the Company's outstanding indebtedness and debt leverage;
restrictions imposed by the terms of the Company's indebtedness; changes in
advertising revenue which are caused by changes in national and local economic
conditions; the relative popularity of the Network Company's and the Company's
programming; the demographic characteristics of the Company's markets; the
impact of the 2000 Census on the Company's markets and other factors outside the
Company's control; future capital requirements; the impact of competition; the
ability of third party program suppliers to produce quality programming,
including its impact on market share and advertising revenue in each of the
Company's markets; the strength or weakness of the advertising market; the cost
of programming; changes in technology and standards in the Company's industry;
the loss of key employees; the ability to attract and retain qualified
personnel; the modification or termination of the Affiliation Agreement; the
impact of litigation; the ability to retain the licenses issued by the Federal
Communications Commission ("FCC Licenses") and the impact of current or pending
legislation and regulations, including Federal Communications Commission ("FCC")
rulemaking proceedings; business disruptions including catastrophic events;
increases in the costs and the impact of potential utility interruptions and
other factors which may be described from time to time in filings of the Company
with the Securities and Exchange Commission. The Company disclaims any
obligation to update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.


                                       11
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION (Continued)
--------------------------------------------------------------------------------

Results of Operations

Net revenue for the three months ended March 31, 2001 as compared to the
corresponding period of 2000 was as follows (in thousands):

                                            Three Months Ended
                                                 March 31,
                                           -------------------
                                              2001        2000      Change
                                           -------     -------     -------

      Local.............................   $28,087     $22,370       26 %
      National spot.....................     8,919       9,542       (7)%
      Incremental revenue from
        Affiliation Agreement...........    12,386       7,369       68 %
      Other revenue.....................     1,701       4,963      (66)%
                                           -------     -------

      Net revenue.......................   $51,093     $44,244       16 %
                                           =======     =======


Local revenue at the Company's domestic television stations increased by 40% for
the three months ending March 31, 2001 from the corresponding period of the
prior year, which was primarily the result of increases in audience share at the
Company's major stations and continued growth in the local Spanish-language
television markets. Local revenue at WKAQ-Puerto Rico increased by 6% for the
three months ending March 31, 2001 from the corresponding period of the prior
year as a result of increases in audience share. The decrease in national spot
revenue is primarily the result of a decrease in internet related advertising
from the prior year.

Telemundo network's average share of the Spanish-language television audience
(Adults 18-49) was 23% during the fourth quarter of 2000 and 26% during the
first quarter of 2001 compared to 19% during the fourth quarter of 1999 and 20%
during the first quarter of 2000. Throughout 2000 and the first quarter of 2001,
the Company's audience share levels have increased significantly as a result of
various successful programming initiatives. A change in audience share typically
has a delayed impact on revenue.

Incremental revenue from the Affiliation Agreement represents the share of the
pooled revenue pursuant to the Affiliation Agreement in excess of revenue
generated by the Company's U.S. stations. The amount of incremental revenue
recognized in any period is impacted by the timing of the attainment of the
Aggregate Net Advertising Receipts thresholds discussed above.

Other revenue decreased by 66% for the three months ending March 31, 2001 from
the corresponding period of the prior year, which was primarily the result of
the elimination of materially all U.S. paid programming (i.e., infomercials) at
the end of the second quarter of 2000.

Direct operating costs increased by 20% for the three months ended March 31,
2001 from the corresponding period of the prior year. This was primarily the
result of an increase in costs incurred to enhance and expand local news in the
U.S.

Selling, general and administrative expenses increased by 17% for the three
months ended March 31, 2001 from the corresponding period of the prior year.
This was primarily the result of the payment of increased sales commissions
relating to the increase in local revenue and an increase in advertising
expenditures.

Corporate expenses increased by $196,000 for the three months ending March 31,
2001 from the comparable period of the prior year.


                                       12
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION (Continued)
--------------------------------------------------------------------------------

As a result of the above, the operating income before depreciation and
amortization improved by $1.0 million for the three months ending March 31, 2001
from the comparable period of the prior year.

Depreciation and amortization increased by $951,000 for the three months ended
March 31, 2001 from the corresponding period of the prior year. This was
primarily a result of the additions to property and equipment during 2000,
including those relating to upgrading stations to a digital technology platform.

Interest expense, net increased by $393,000 for the three months ended March 31,
2001 from the corresponding period of the prior year. This was primarily the
result of an increase in interest accreted on the $218.8 million aggregate
principal amount at maturity 11.5% Senior Discount Notes due 2008.

The income tax benefit for the three months ended March 31, 2001 results
primarily from the tax effect of changes in federal, state and Puerto Rico
deferred temporary differences, offset in part by a current provision for
federal and state income taxes. The income tax benefit for the three months
ended March 31, 2000 results primarily from the tax effect of changes in
federal, state and Puerto Rico deferred temporary differences, offset in part by
a current provision for federal and state income taxes and Puerto Rico
withholding taxes related to intercompany interest. The Company is in a net
operating loss position for federal income tax purposes. The Company's uses of
its net operating loss carryforwards are subject to certain limitations imposed
by Section 382 of the Internal Revenue Code and their use will be limited.

Minority interest represents the accounting impact of distributions to the 25.5%
partner in Video 44, which is based on a minimum preferred distribution to such
partner. Video 44 is a partnership that owns and operates WSNS-Chicago.

Liquidity and Sources of Capital

Cash flows used in and provided from operating activities were $2.6 million and
$3.4 million for the three months ended March 31, 2001 and 2000, respectively.
The decrease is primarily the result of changes in certain asset and liability
accounts, and the timing of the payments of accounts payable, taxes and
interest, offset in part by the increase in operating income before depreciation
and amortization.

The Company had working capital of $28.8 million at March 31, 2001.

Capital expenditures of approximately $1.7 million were made during the three
months ended March 31, 2001 to replace and upgrade equipment and facilities,
including upgrading stations to a digital technology platform. The Company
expects to incur capital expenditures of approximately $20 million in 2001 in
connection with the continued conversion to digital technology as well as
regular maintenance capital spending.

The Company's principal sources of liquidity are cash from operations and a $150
million revolving credit facility with a final maturity of September 30, 2005
(the "Revolving Credit Facility"). The Company plans on financing cash needs
through cash generated from operations and the Revolving Credit Facility, under
which there was $57 million outstanding at March 31, 2001.

On February 9, 2001, the Company entered into a definitive agreement to purchase
the independent full-power UHF Spanish-language television station KWHY-TV,
Channel 22, in Los Angeles and its related low-power television station, KWHY-LP
(collectively, "KWHY") for approximately $239.0 million (the "KWHY
Acquisition"). The Federal Communications Commission ("FCC") approved the KWHY
Acquisition on April 26, 2001 and issued a public notice of the approval on May
2, 2001. The time period during which third parties may petition the FCC for
reconsideration of the approval expires on June 1, 2001 and the time period
during which the FCC may reconsider the approval on its own motion expires on
June 11, 2001. The Company anticipates that it will fund the KWHY Acquisition
through a combination of an equity contribution from TCG and borrowings to be
obtained in


                                       13
<PAGE>

TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION (Continued)
--------------------------------------------------------------------------------

connection with a refinancing of the Company's existing $350 million senior
secured credit facilities (the "Credit Facilities").

On February 8, 2001, Holdings entered into a letter agreement with Credit Suisse
First Boston ("CSFB") pursuant to which CSFB has committed to provide $500
million senior secured credit facilities (the "Refinanced Credit Facilities"),
and to structure, arrange and syndicate the Refinanced Credit Facilities. The
closing of the Refinanced Credit Facilities is subject to satisfaction of
customary conditions precedent, including the absence of material adverse
changes in financial, banking or capital market conditions.

The Company's interest income and expense are sensitive to changes in the
general level of U.S. and certain European interest rates. In this regard,
changes in these rates affect the interest earned on the Company's cash
equivalents as well as interest paid on its Credit Facilities. To mitigate the
impact of fluctuations in interest rates, the Company had entered into two fixed
rate for London Interbank Offered Rates ("LIBOR") swap transactions in late
1998. The Company uses derivative financial instruments to manage financing
costs associated with changes in interest rates. Interest rate swaps involve the
periodic exchange of payments without the exchange of underlying principal or
notional amounts. Net payments are recognized as an adjustment to interest. The
Company does not use any of these instruments for trading purposes. If the
Company were to have borrowings outstanding for the maximum amount possible
under the Revolving Credit Facility, it would have $150 million principal amount
subject to change in interest rates, whereby a change of 100 basis points would
have approximately a $1.5 million impact on pre-tax earnings and pre-tax cash
flows over a one-year period.

The Company's credit risk associated with these derivative contracts is
generally limited to the unrealized gain on those contracts with a positive fair
market value, should any counterparty fail to perform as contracted. The
counterparty to the Company's derivative contracts is a major international
financial institution. The Company continually monitors the credit quality of
this financial institution and does not expect non-performance by the
counterparty.


                                       14
<PAGE>


TELEMUNDO HOLDINGS, INC. AND SUBSIDIARIES
------------------------------------------------------------------------------

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is included in the "Liquidity and Capital
Resources" section of the Company's Management's Discussion and Analysis of
Results of Operations and Financial Condition contained in this document.

PART II. OTHER INFORMATION

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits
                  --------

                  None.


         (b)      Reports on Form 8-K
                  -------------------

                  On February 1, 2001, a Report on Form 8-K was filed describing
                  the consummation of the Restructuring.


                                       15
<PAGE>

                                    SIGNATURE
                                    ---------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           TELEMUNDO HOLDINGS, INC.
                                                 (Registrant)



                                       By: /s/  Vincent L. Sadusky
                                           -------------------------------------
Dated: May 11, 2001                        Vincent L. Sadusky
                                           Chief Financial Officer and Treasurer


                                       16