================================================================================
                       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 March 31, 2000

                                        OR

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from __________ to __________

                                 TV FILME, INC.
             (Exact name of Registrant as Specified in its Charter)

                         COMMISSION FILE NUMBER: 0-28670

         DELAWARE                                      98-0160214
(State or Other Jurisdiction of          (I.R.S. Employer Identification Number)
 Incorporation or Organization)

                C/O ITSA-INTERCONTINENTAL TELECOMUNICACOES LTDA.
                               SCS, QUADRA 07-BL.A
                          ED. EXECUTIVE TOWER, SALA 601
                             70.300-911 BRASILIA-DF
                                     BRAZIL
          (Address, Including Zip Code, of Principal Executive Offices)

                               011-55-61-314-9908
              (Registrant's Telephone Number, Including Area Code)

          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.
  [X]Yes [ ]No

          Indicate by check mark whether the  registrant has filed all documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. [ ]Yes [X]No*

*Although a bankruptcy plan has been confirmed by the U.S.  Bankruptcy Court for
the District of Delaware,  no securities  have yet been  distributed  under such
plan.

          Indicate  the  number of shares  outstanding  of each of the  issuer's
classes of Common Stock, as of the latest practicable date.

         CLASS                                    OUTSTANDING

  Common Stock, par value $0.01                   10,824,594 shares
  per share.                                      as of May 11, 2000
================================================================================

<PAGE>

                                 TV FILME, INC.

                                      INDEX



PART I.    FINANCIAL INFORMATION                                        PAGE NO.

ITEM 1. Financial Statements

        Consolidated Balance Sheets as of December 31, 1999
        and March 31, 2000 (Unaudited)....................................     2

        Unaudited Consolidated Statements of Operations for the Three
        Months Ended March 31, 1999 and the Three Months Ended
        March 31, 2000....................................................     3

        Unaudited Consolidated Statement of Changes in Stockholders'
        Equity at March 31, 2000..........................................     4

        Unaudited Consolidated Statements of Cash Flows for the Three
        Months Ended March 31, 1999 and March 31, 2000....................     5

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

ITEM 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations.........................................     8

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk........    13


PART II.   OTHER INFORMATION

ITEM 1. Legal Proceedings.................................................    14

ITEM 2. Changes in Securities and Use of Proceeds.........................    14

ITEM 3. Defaults Upon Senior Securities...................................    14

ITEM 4. Submission of Matters to a Vote of Security Holders...............    14

ITEM 5. Other Information.................................................    14

ITEM 6. Exhibits and Reports on Form 8-K..................................    14

SIGNATURES

                                       1
<PAGE>

                         PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
                         TV FILME, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<S>                                                          <C>                      <C>
                                                                   DECEMBER 31,             MARCH 31,
                                                                       1999                   2000
                                                               ---------------------   --------------------
                                                                              (UNAUDITED)
                                                                             (IN THOUSANDS)
ASSETS
Current assets:
Cash and cash equivalents..................................    $     42,175                     40,232
     Accounts receivable, net..............................           2,474                      2,060
     Supplies..............................................           2,750                      2,760
     Prepaid expenses and other current assets.............           5,700                      5,868
                                                               ---------------------   --------------------
         Total current assets..............................          53,099                     50,920
Property, plant and equipment, net.........................          25,005                     24,328
Other assets...............................................           5,218                      7,114
                                                               ---------------------   --------------------
         Total assets......................................    $     83,322                     82,362
                                                               =====================   ====================

LIABILITIES AND CAPITAL DEFICIENCY Current liabilities:
     Accounts payable......................................    $      6,168                $    5,745
     Payroll and other benefits payable....................           1,577                      1,758
     Accrued interest payable..............................          18,776                     23,282
     Accrued liabilities and taxes payable.................           7,543                      9,100
     Senior notes in default...............................         140,000                    140,000
                                                               ---------------------   --------------------
         Total current liabilities.........................         174,064                    179,885
Deferred installation fees.................................             900                        695
Capital deficiency:
     Cumulative translation adjustment.....................          (7,182)                    (7,733)
     Preferred stock, $.01 par value, 1,000,000 shares
         authorized, no shares issued......................              --                         --
     Common stock, $.01 par value, 50,000,000 shares
         authorized, 10,824,594 and 10,824,594 shares
         issued and outstanding............................             108                        108
     Additional paid-in capital............................          45,657                     45,657
     Accumulated deficit...................................        (130,225)                  (136,250)
                                                               ---------------------   --------------------
         Total capital deficiency..........................         (91,642)                   (98,218)
                                                               ---------------------   --------------------
         Total liabilities and capital deficiency..........    $     83,322                    $82,362
                                                               =====================   ====================

                             See accompanying notes.
</TABLE>

                                       2
<PAGE>

                         TV FILME, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)


                                                    THREE MONTHS ENDED MARCH 31,
                                             -----------------------------------
                                                         1999             2000
                                                      ----------     -----------
                                                         (In thousands, except
                                                             per share data)

Revenues..........................................      $  6,576     $   5,911
Operating costs and expenses:
    System operating - Note 2.....................         3,229         2,600
    Selling, general and administrative...........         3,606         4,018
    Depreciation and amortization.................         4,032         3,095
                                                      ------------  ------------
        Total operating costs and expenses........        10,867         9,713
                                                      ------------  ------------
        Operating loss............................        (4,291)       (3,802)
Other income (expense):
    Interest and other expense ...................        (5,871)       (5,794)
    Interest and other income.....................         2,143         1,382
    Interest income (expense), net................        (3,728)       (4,412)
    Monetary (loss) gain..........................       (26,994)        2,189
                                                      ------------  ------------
        Total other expense (income), net.........       (30,722)       (2,223)
                                                      ------------  ------------
Net loss..........................................      $(35,013)    $  (6,025)
                                                      ============  ============
Net loss per share................................      $  (3.23)    $   (0.56)
                                                      ============  ============
Weighted average number of shares of
    common stock and common stock
    equivalents outstanding.......................        10,825        10,825
                                                      ============  ============



















                             See accompanying notes.

                                       3
<PAGE>

                         TV FILME, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIENCY

                                   (UNAUDITED)

                    FOR THE THREE MONTHS ENDED MARCH 31, 2000



<TABLE>
<S>                             <C>                       <C>           <C>             <C>             <C>

                                                           ADDITIONAL        OTHER
                                       COMMON STOCK          PAID-IN     COMPREHENSIVE   ACCUMULATED
                                   SHARES     PAR VALUE      CAPITAL         LOSS          DEFICIT          TOTAL
                                 ------------------------- ------------ ---------------- -------------  -------------

                                                                   (IN THOUSANDS)

BALANCE AT DECEMBER 31, 1999     10,824,594       $ 108     $ 45,657      $ (7,182)       $ (130,225)    $ (91,642)
Cumulative translation
     adjustment................          --          --           --          (551)               --          (551)
Net loss for the period........          --          --           --            --            (6,025)       (6,025)
                                 ============= =========== ============ ================ =============  =============
BALANCE AT MARCH 31, 2000......  10,824,594       $ 108     $ 45,657      $ (7,733)       $ (136,250)    $ (98,218)
                                 ============= =========== ============ ================ =============  =============






























                             See accompanying notes.
</TABLE>

                                       4
<PAGE>

                         TV FILME, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)


                                                    THREE MONTHS ENDED MARCH 31,
                                                           1999             2000

                                                             (IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss................................................   $ (35,013)  $ (6,025)
Adjustments to reconcile net loss to net cash
           provided by operating activities:
      Depreciation and amortization.....................       4,032      3,095
      Provision for losses on accounts receivable.......         162        236
      Authorization of debt issuance costs..............        (605)         0
      Increase (decrease) in deferred installation fees.         215       (305)
      Monetary loss (gain)..............................      26,994     (2,169)
Changes in operating assets and liabilities:
      Increase (decrease) in accounts receivable........        (592)       295
      Decrease in supplies..............................         241         69
      Increase in prepaid expenses and other current
      assets............................................        (926)      (121)
      Decrease (increase) in other assets...............         238     (1,771)
      Increase (decrease) in accounts payable...........         528       (498)
      Decrease (increase) in payroll and other benefits         (547)       150
           Payable
      Increase in accrued interest payable..............       4,506      4,506
      Increase in accrued liabilities and taxes payable.         235      1,537
                                                           ==========  =========
Net cash provided by operating activities...............        (532)    (1,001)
                                                           ==========  =========

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions:
      Property, plant and equipment.....................      (2,032)    (1,514)
                                                           ==========  =========
Net cash used in investing activities...................      (2,032)    (1,514)
                                                           ==========  =========


CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in payables to affiliates......................           0          0
                                                           ==========  =========
Net cash provided by financing activities...............           0          0
                                                           ==========  =========
Effect of exchange rate changes on cash.................     (10,453)       572
                                                           ==========  =========
Net change in cash and cash equivalents.................     (13,017)    (1,943)
                                                           ==========  =========
Cash and cash equivalents at beginning of period........      57,492     42,175
                                                           ==========  =========
Cash and cash equivalents at end of period..............   $  44,475   $  40,232
                                                           ==========  =========





                             See accompanying notes.

                                       5
<PAGE>

                         TV FILME, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          A. COMPANY BACKGROUND

          The Company  develops,  owns and  operates pay  television  systems in
markets in  Brazil.  Through  its  subsidiaries,  the  Company  has  established
wireless cable operating systems in the cities of Brasilia,  Goiania,  Belem and
Campina Grande and has been awarded  licenses to operate pay television  systems
in eight additional markets in Brazil. All significant intercompany transactions
and balances have been eliminated in consolidation.

          As discussed in Note 4, on June 15, 1999,  the Company  failed to make
the  required  interest  payment on its Senior  Notes  which  caused an event of
default to occur.  In  connection  therewith,  the Company  selected a financial
advisor,   BT  Alex.  Brown,   Inc.,  to  assist  it  in  evaluating   strategic
alternatives,  including a possible debt  restructuring,  and issues  associated
with the Company's  debt service  requirement.  On August 12, 1999,  the Company
reached an agreement in principle with a committee  representing  holders of the
Company's  outstanding  12-7/8%  Senior  Notes due 2004.  Under the terms of the
agreement in principle,  the senior  noteholders will receive a $25 million cash
payment and their  existing  notes will be converted into (i) new Senior Secured
Notes in the aggregate  principal amount of $35 million,  subject to adjustment,
with  a  five  year   maturity   and   interest  of  12%  per  annum   (interest
payable-in-kind  at the Company's option through the first 24 months),  and (ii)
80% of the new common equity of the reorganized company. Current management will
receive 15% of the new common equity,  and the existing  common  stockholders of
the Company will receive 5% of the new common equity of the reorganized  company
in exchange for their  current  stake.  All  outstanding  stock  options will be
cancelled. The reorganized company will be a newly-formed Cayman Islands holding
company,    and   the   new   Senior   Secured   Notes   will   be   issued   by
ITSA-Intercontinental  Telecomunicacoes  Ltda., a wholly-owned  subsidiary of TV
Filme, Inc.

          On January 26,  2000,  the Company  filed a voluntary  petition  under
chapter 11 of the United States Bankruptcy Code,  together with a pre-negotiated
Plan of  Reorganization  implementing  the  agreed  upon  restructuring  and the
Disclosure  Statement relating to such Plan, with the U.S.  Bankruptcy Court for
the District of Delaware.  The court approved the Disclosure  Statement on March
1, 2000. Following approval of the adequacy of the Disclosure Statement, ballots
respecting  the Plan were  circulated to those  parties  entitled to vote on the
Plan,  and the Plan was  confirmed  at a hearing by the court on April 10, 2000.
Overwhelming  majorities  of holders of the Company's  12-7/8%  Senior Notes due
2004  and  holders  of  the  Company's  common  stock  voted  in  favor  of  the
restructuring set forth in the Plan. Effectuation of the Plan is contingent upon
obtaining  approval of the  restructuring  contemplated by the Plan from Agencia
Nacional de  Telecomunicacoes,  the Brazilian  government  agency that regulates
telecommunications  services  in Brazil,  and the  Central  Bank of Brazil.  The
Brazilian  Telecommunications  Agency  ("ANATEL") issued a response on April 28,
2000,  indicating  full support for the  restructuring  and  indicating  that no
further approval is necessary from the Agency.  The Company continues to operate
and manage its affairs as debtor in possession. No trustee has been appointed.

          These conditions raise  substantial  doubt as to the Company's ability
to continue as a going  concern.  The  Financial  Statements  do not include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets or the amounts and  classification of liabilities that
may result from the outcome of this uncertainty.

          B. METHOD OF PRESENTATION

         The consolidated financial statements of the Company have been prepared
in accordance with generally accepted accounting principles in the United States
in U.S. dollars.  Effective January 1, 1998, the Company  determined that Brazil
ceased  to  be a  highly  inflationary  economy  under  Statement  of  Financial
Accounting  Standards No. 52.  Accordingly,  as of January 1, 1998,  the Company
began using the REAL as the functional  currency of its Brazilian  subsidiaries.
As a result,  all assets and  liabilities  are translated into dollars at period
end exchange  rates and all income and expense  items are  translated  into U.S.
dollars at the average exchange rate prevailing  during the period.

                                       6

<PAGE>

          C. ALLOWANCE FOR DOUBTFUL ACCOUNTS

          The  Company had an  allowance  for  doubtful  accounts of $651,000 at
December  31, 1999 and  $727,000  at March 31,  2000.  Charges to the  allowance
during the three months ended March 31, 2000 were $159,000.

2.        RELATED PARTY TRANSACTIONS

          Substantially  all  programming is supplied by a subsidiary of Tevecap
S.A.  ("Tevecap"),  a  stockholder  of the  Company,  pursuant to a  programming
contract. Amounts paid to such affiliate during the three months ended March 31,
1999 and 2000 were approximately $1,968,000 and $652,000, respectively.

3.        STOCK OPTION PLAN

          In connection  with the Company's  initial  public  offering in August
1996, the Board of Directors of the Company adopted and the  stockholders of the
Company approved the 1996 Stock Option Plan (such plan, as subsequently  amended
in September 1997 and October 1998, is  hereinafter  referred to as the "Plan").
The Plan  provides for the grant of stock  options to officers,  key  employees,
consultants  and  directors  of the  Company.  The Plan is  administered  by the
Compensation  Committee  of the Board  and the total  number of shares of Common
Stock  for which  options  may be  granted  pursuant  to the Plan is  1,736,432,
subject   to  certain   adjustments   reflecting   changes   in  the   Company's
capitalization.  The Plan allows the granting of incentive stock options,  which
may not have an  exercise  price  below the  greater  of par value or the market
value on the date of grant,  and  non-qualified  stock  options,  which  have no
restrictions  as to exercise price other than the exercise price cannot be below
par value. All options must be exercised no later than 10 years from the date of
grant.  Options to purchase 407,000 shares of Common Stock were granted upon the
consummation  of the Company's  initial  public  offering,  297,000 of which are
exercisable at $10.00 per share, and 110,000 of which were exercisable at $11.00
per share, and which generally vest 20% per year for five years beginning on the
first anniversary of consummation of the Initial Public Offering.

          Additional options to purchase Common Stock were granted as follows:


                                    NUMBER OF      EXERCISE
                   DATE              OPTIONS         PRICE
               ==============    ==============  =============
               Dec. 1996             10,000        $ 11.750
               Feb.  1997            10,000        $ 11.750
               July  1997            15,000        $ 10.125
               Oct.  1997           308,500        $  6.000
               Dec. 1997            150,000        $  5.625
               July  1998            10,000        $  3.875


          Of the total number of options which were  exercisable as of March 31,
2000, 210,000 options have expired in accordance with their terms.

          Pro  forma  disclosure  information  has  not  been  presented  as all
outstanding  options  are  expected  to be  cancelled  in  conjunction  with the
Company's  restructuring  process under Chapter 11 of the U.S.  Bankruptcy  Code
(see Note 1).

4.        LONG-TERM DEBT IN DEFAULT

          On December 20, 1996, the Company issued $140 million principal amount
of 12-7/8% Senior Notes due December 15, 2004 (the "Senior Notes"). The proceeds
of the Senior Notes were loaned to  ITSA-Intercontinental  Telecomunicacoes S.A.
and its subsidiaries ("ITSA") and evidenced by an intercompany note. Interest is
payable  semi-annually  in  arrears  on June 15 and  December  15 of each  year,
commencing on June 15, 1997. Of the $140 million  loaned to ITSA,  approximately
$33.5  million  was  used to  purchase  U.S.  government  securities,  scheduled
interest and principal  payments on which was in an amount sufficient to provide

                                       7
<PAGE>

for payment in full when due of the first four  scheduled  interest  payments on
the Senior  Notes,  the last of which  occurred on December 15, 1998.  Until the
third quarter of 1999,  debt issuance costs were  capitalized and amortized over
the period of the debt under the effective yield method (see below).

          The Senior Notes are  redeemable on or after  December 15, 2000 at the
option  of the  Company,  in whole or in part from  time to time,  at  specified
redemption prices declining annually to 100% of the principal amount on or after
December  15, 2003,  plus accrued  interest.  The Senior Notes  contain  certain
covenants  that,  among other things,  limit the ability of the Company to incur
additional  indebtedness and pay dividends or make certain other  distributions.
Upon a change of  control,  the Company is required to make an offer to purchase
the Senior Notes at a purchase  price equal to 101% of the  aggregate  principal
amount thereof, plus accrued and unpaid interest, if any. In accordance with the
covenants of the Senior Notes and the Company's  current  level of leverage,  at
March 31, 2000 it is unable to make any dividend payments.

          Under the  provisions  of the Senior  Note  indenture,  the Company is
required to make  semi-annual  interest  payments on June 15 and  December 15 of
each year to the  noteholders.  On June 15, 1999, the Company failed to make the
required interest payment, and did not make the payment within the subsequent 30
day grace period  allowable  under the terms of the  indenture,  which caused an
event of  default to occur.  While the  Company  has  reached  an  agreement  in
principle  with  a  committee  representing  holders  of  the  Senior  Notes  to
restructure  this  obligation,   and  a  pre-arranged   plan  implementing  such
restructuring  has been approved by the  bankruptcy  court (as described in Note
1),  the  restructuring  transaction  contemplated  by the plan has not yet been
effected.  As a result of this event of default,  the Company has classified the
Senior Notes  as a current  liability in the  accompanying  balance  sheet.  The
agreement in  principle  was reached in August  1999;  accordingly,  the Company
wrote off the deferred  debt  issuance cost of $3.3 million in the third quarter
1999.

5.        FOREIGN EXCHANGE CONTRACTS

          At December 31, 1999 and March 31, 2000, the Company had $28.0 million
and $28.0 million,  respectively,  of foreign  exchange  contracts.  The Company
regularly enters into such contracts  typically with a duration of six months or
less.  The contracts  held at December 31, 1999 expired in February 2000 and the
contracts  held as of March 31, 2000  expired in April 2000.  In general,  these
contracts  permit  the  Company to receive  in REAIS,  at  maturity,  the dollar
equivalent of the contract  value  calculated  using the exchange rate as of the
maturity  date. At maturity,  the Company is required to pay the contract  value
plus interest using the Brazilian  interbank lending rate during the life of the
contract. Net contract gains, if any, are subject to a 20% tax levied in Brazil.
Realized  gains and  losses  are  reported  in  "Interest  and  other  expense."
Unrealized losses as of March 31, 2000 totaled $0.7 million.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

          THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS
AND  UNCERTAINTIES.  THE COMPANY'S ACTUAL RESULTS MAY DIFFER  SIGNIFICANTLY FROM
THE  RESULTS  DISCUSSED  IN  THE  FORWARD-LOOKING   STATEMENTS.   THE  FOLLOWING
DISCUSSION  SHOULD  BE READ  IN  CONJUNCTION  WITH  THE  CONSOLIDATED  FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, INCLUDED ELSEWHERE IN THIS FORM 10-Q.

RESULTS OF OPERATIONS

          Although the Company's financial  statements are presented pursuant to
United States generally  accepted  accounting  principles in U.S.  dollars,  the
Company's transactions are consummated in both REAIS and U.S. dollars. Inflation
and  devaluation  in Brazil  have had,  and are  currently  having,  substantial
effects on the Company's results of operations and financial condition.  See "--
Inflation and Exchange Rates."

                                       8
<PAGE>

          As a result of the  changes  in  exchange  rates  during  the  periods
presented,  the  period-to-period   comparisons  of  the  Company's  results  of
operations  are not  necessarily  meaningful and should not be relied upon as an
indication of future performance.


<TABLE>


                                                                        Three Months Ended March 31
                                                       ---------------------------------------------------------------
<S>                                                     <C>            <C>              <C>          <C>
                                                            1999        % OF REVENUE        2000      % OF REVENUE
                                                        (In thousands, except subscriber, per share and share data)

Revenue...........................................       $  6,576            100%        $  5,911         100%
Operating costs and expenses
   System operating...............................          3,229             49%           2,600          44%
   Selling, general and administrative............          3,606             55%           4,018          68%
   Depreciation and amortization..................          4,032             61%           3,095          52%
                                                         ==========       ===========   ==========     ==========
        Total operating costs and expenses........         10,867            165%           9,713         164%
                                                         ==========       ===========   ==========     ==========
        Operating loss............................         (4,291)           (65)%         (3,802)        (64)%
Other income (expense):
   Interest and other expense.....................         (5,871)           (89)%         (5,794)        (98)%
   Interest and other income......................          2,143             33%           1,382          23%
Monetary loss.....................................        (26,994)          (410)%          2,189          37%
      Total other expense (income), net...........        (30,722)          (467)%         (2,223)        (38)%
                                                         ==========       ==========    ==========     ==========
Net loss..........................................        (35,013)          (532)%         (6,025)       (102)%
                                                         ==========       ==========    ==========     ==========
Net loss per share................................       $  (3.23)                       $  (0.56)
Weighted average number of shares of                     ==========                     ==========
   Common stock and common stock
   Equivalents....................................         10,825                          10,825
Other Data:                                              ==========                     ==========
   EBITDA (a).....................................       $   (895)                       $   (707)
                                                         ==========                     ==========
   Number of subscribers at end of period ........         75,413                          72,282
                                                         ==========                     ==========
   Exchange rate (R $: US $) at end of period.....        1.722:1                         1.747:1
                                                         ==========                     ==========
</TABLE>

===============
(a) EBITDA is defined as  operating  loss plus  depreciation,  amortization  and
non-cash  charges.  While EBITDA  should not be  construed  as a substitute  for
operating  loss or a better  measure of liquidity  than cash flow from operating
activities,  which are  determined in accordance  with U.S. GAAP, it is included
herein to provide additional information regarding the ability of the Company to
meet its capital  expenditures,  working capital  requirements and debt service.
EBITDA,  however,  is not necessarily a measure of the Company's ability to fund
its cash needs.

          NET LOSS. Net loss for the three months ended March 31, 2000 decreased
to $6.0 million  versus $35.0 million for the three months ended March 31, 1999,
due to a monetary loss  associated  with the  company's  net  dollar-denominated
liability  position  caused by a 51%  devaluation  of the REAL  against the U.S.
dollar.

          REVENUES.  The Company's revenues for the three months ended March 31,
2000  decreased by 10%  compared to the three  months ended March 31, 1999,  due
primarily to converting from a post-paid to a pre-paid subscription model in our
largest market,  Brasilia. This change had no effect on the Company's cash flow;
however,  recognize  revenues  were reduced by $0.7 million in March and will be
reduced by approximately $0.6 million in April as a result of this transition.

          SYSTEM OPERATING  EXPENSES.  For the three months ended March 31, 2000
compared to the three  months ended March 31, 1999,  system  operating  expenses
decreased by 19%,  primarily due to a decrease in programming  costs (12%) and a
decrease in  compensation  and benefits  expenses  (20%) related to lower priced
packages now offered by the Company.

                                       9
<PAGE>

          SELLING,  GENERAL AND ADMINISTRATIVE  EXPENSES.  Selling,  general and
administrative  ("SG&A") expenses  increased during the three months ended March
31, 2000 by 11% compared to the three months ended March 31, 1999, primarily due
to the restructuring  costs associated with the Company's  restructuring as well
as due to expenses  related to the  transition to the new pre-paid  subscription
model in the Brasilia system.

          DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased
in the three  months  ended  March 31, 2000 by 23% over the three  months  ended
March 31,  1999,  primarily  due to the  reduction  in asset  values on a dollar
basis, and assets becoming fully depreciated.

          INTEREST INCOME AND INTEREST EXPENSE. Interest income decreased in the
three  months  ended March 31, 2000 by 36% over the three months ended March 31,
1999,  primarily  due to a decrease in the average cash balance  between the two
periods. Interest expense decreased slightly in the three months ended March 31,
2000 by 1.3% over the three months ended March 31, 1999.

          MONETARY  LOSS.  The Company  generated  a monetary  gain in the three
months  ended March 31, 2000 of $2.2  million due to its net  dollar-denominated
monetary liability position throughout the period compared to a monetary loss of
$26.7 million in the months ended March 31, 1999.

EVENT OF DEFAULT ON SENIOR NOTES

          Under the  provisions  of the Senior Note  indenture,  the Company was
required to make a semi-annual  interest payment on June 15, 1999; however,  the
Company  failed to make this  payment  which caused an event of default upon the
expiration of the 30 day grace period  permitted under the indenture.  While the
Company has reached an  agreement  in  principle  with a committee  representing
holders of the Senior Notes to  restructure  this  obligation and a pre-arranged
plan implementing  such  restructuring has been approved by the bankruptcy court
(see Notes 1 and 4), the  transaction has not yet been effected and there can be
no assurance that the transaction  will be completed  successfully.  The Company
does not expect to make the past due interest  payment,  or any future  interest
payments, on the currently outstanding Senior Notes.

LIQUIDITY AND CAPITAL RESOURCES

          The pay television  business is capital  intensive.  From 1993 through
the first part of 1996, the Company raised an aggregate of  approximately  $16.8
million  through a series of private  equity  placements to Tevecap and Warburg,
Pincus  Investors,  L.P. In August 1996,  TV Filme  completed an initial  public
offering  with net proceeds to the Company of $24.4 million and in December 1996
TV Filme completed the sale of the Senior Notes with net proceeds to the Company
of approximately  $134.0 million. In the past, working capital requirements have
been  primarily  met by (i) venture  capital  financings,  (ii) capital  markets
financings,  (iii) vendor financing which generally  requires payment within 420
days of shipment,  some of which had been  supported by  irrevocable  letters of
credit  guaranteed by Abril and certain of its  affiliates  and (iv)  borrowings
from Abril and  certain  affiliates.  As of March 31,  2000,  the Company had no
outstanding  borrowings  from Abril and its  affiliates and the Company does not
expect to borrow from Abril or its affiliates in the future.

          As of March 31,  2000,  the Company had no amounts  outstanding  under
letters of credit. As of January 1, 1999, the Company had import lines of credit
in the aggregate amount of $30.5 million with four commercial  banks. In January
1999,  in  conjunction  with the  devaluation  of the REAL,  all import lines of
credit were cancelled by the banks. Further import purchases by the Company will
have to be individually  negotiated with the banks.  While the Company  believes
that lines of credit,  additional  vendor financing and other credit  facilities
are available, the terms and conditions of such financing vehicles are uncertain
and may not be available  on terms  acceptable  to the  Company.  As a result of
reclassifying  its Senior Notes as a current liability (see "Event of Default on
Senior  Notes"),  the Company had negative  working capital at March 31, 2000 of
$129 million.  Net cash used in operating  activities for the three months ended
March 31, 2000 was $1 million.

          On February 4, 1999, the Company received notice from the Nasdaq Stock
Market,  Inc.  that its common  stock was  delisted,  effective  on the close of

                                       10
<PAGE>

trading that day. The delisting was a  consequence  of the Company's  failure to
meet  certain  standards  for  continued  listing on Nasdaq,  including  the net
tangible assets and minimum bid price  requirements.  The Company's common stock
was  immediately  quoted on the OTC  Bulletin  Board.  The effects of the Nasdaq
delisting include,  without limitation,  the limited release of market prices of
the common  stock,  limited news  coverage of the Company,  and  restriction  of
investors'  interest in the Company,  and may have a material  adverse effect on
the  trading  market  and prices for the common  stock,  thereby  affecting  the
Company's ability to issue additional securities or secure additional financing.
In addition, because the common stock is deemed penny stock under the Securities
Enforcement Penny Stock Reform Act of 1990, additional disclosure is required in
connection with trading in the common stock,  including delivery of a disclosure
schedule  explaining  the  nature  and  risk of the  penny  stock  market.  Such
requirements could severely limit the liquidity of the common stock.

          In order to assist the Company in evaluating  strategic  alternatives,
including  a  possible  debt  restructuring,  and  issues  associated  with  the
Company's debt service  requirements,  the Company has selected BT Alex.  Brown,
Inc.  (now  Deutsche  Bank) as its financial  advisor.  On August 13, 1999,  the
Company reached an agreement in principle with a committee  representing holders
of the Company's  outstanding  12-7/8% Senior Notes due 2004. Under the terms of
the agreement in principle,  the senior  noteholders  will receive a $25 million
cash  payment and their  existing  notes will be  converted  into (i) new Senior
Secured  Notes in the  aggregate  principal  amount of $35  million,  subject to
adjustment,  with a five year  maturity and interest of 12% per annum  (interest
payable-in-kind  at the Company's option through the first 24 months),  and (ii)
80% of the new common equity of the reorganized company. Current management will
receive 15% of the new common equity,  and the existing  common  stockholders of
the Company will receive 5% of the new common equity of the reorganized  company
in exchange for their  current  stake.  All  outstanding  stock  options will be
cancelled. The reorganized company will be a newly-formed Cayman Islands holding
company,    and   the   new   Senior   Secured   Notes   will   be   issued   by
ITSA-Intercontinental  Telecomunicacoes  Ltda., a wholly-owned  subsidiary of TV
Filme,  Inc.  This  agreement in principle is subject to execution of definitive
documentation,  and is to be effected  pursuant to a pre-arranged plan which has
received  court  approval  under  Chapter  11 of the U.S.  Bankruptcy  Code.  In
addition,  the Agencia Nacional de  Telecomunicacoes,  the Brazilian  government
agency that  regulates  telecommunications  in Brazil,  and the Central  Bank of
Brazil must approve the proposed restructuring.  In the process of reviewing the
proposed  restructuring,  the Central  Bank may examine the  original  approvals
granted when the Secured  Notes were issued and there is a risk that the Central
Bank may  impose  charges or  additional  taxes  with  respect  to the  original
transaction  relating  to the  Secured  Notes.  There can be no  assurance  that
approval  of the  restructuring  will be given or as to whether  any  charges or
taxes may be imposed. Moreover, charges or taxes imposed by the Central Bank may
result in the  restructuring  not being feasible and may have a material adverse
effect on the Company's financial condition and results of operations. There can
be no assurance that the proposed  restructuring  transaction  will be completed
successfully.

          The Company made capital  expenditures of  approximately  $1.5 million
during the three  months ended March 31, 2000.  Such capital  expenditures  were
financed  with the  proceeds  from  the  Senior  Notes  offering  and from  cash
generated from the Company's operations.

          In September 1997, the Brazilian Ministry of Communications  announced
the  bidding  process  by which  additional  pay-TV  licenses  would be  awarded
throughout  the country.  This award process  commenced in October 1997.  Due to
legal  challenges  made to the bidding process by several  bidders,  the bidding
process had been  postponed  for all  markets.  However,  on May 13,  1998,  the
Superior Justice Tribunal issued a favorable ruling allowing the bidding process
with respect to a number of the smaller markets to go forward. In July 1998, the
license process for the smaller markets was reinstated and in the fourth quarter
of 1998,  the  Company was awarded  licenses  to operate  pay-TV  systems in the
following seven cities:  Bauru,  Campina Grande,  Caruaru,  Franca, Porto Velho,
Uberaba and Presidente  Prudente.  The Company paid an aggregate of $5.0 million
for these seven  licenses,  and launched its operation in Campina  Grande during
the second quarter of 1999. Following a favorable ruling by the Superior Justice
Tribunal in the fourth quarter of 1998,  with respect to the remaining  markets,
on March 10,  1999 ANATEL  initiated  the bid  process  for these  markets.  The
Company  decided not to  participate in this process at that time.  However,  in
October 1999, the Company  participated  in a bidding  process for the cities of
Belo  Horizonte,  Campinas,  Sao Jose dos Campos and  Vitoria.  The  Company was
successful in its bids for Belo  Horizonte  and Vitoria,  for which it offered a
total of approximately $2.3 million.

          The Company from time to time may selectively pursue joint ventures or
acquisitions  in the pay  television  industry,  although  it  currently  has no
understanding, commitment or agreement with respect to any such joint venture or
acquisitions.  The  Company  currently  believes  that its  cash and  internally
generated  funds will be  sufficient  to fund its  obligations  pursuant  to the

                                       11
<PAGE>

          agreement in principle with the committee of noteholders  and the cash
requirements  for its four  existing  systems and eight new markets for at least
the next twelve  months.  As of March 31, 2000, of the  Company's  approximately
$40.2 million in cash and cash  equivalents,  approximately  $12.6 million (31%)
was invested in U.S.  dollar  denominated  securities.  In the longer term,  the
Company's  funding  needs are  subject to a variety of  factors,  including  its
ability  to   successfully   complete  the  debt   restructuring   and  plan  of
reorganization  under chapter 11 of the Bankruptcy  Code, the number and size of
new  system  launches  or  acquisitions,   the   implementation  of  alternative
transmission  technologies  and the  offering of  additional  telecommunications
services.  Accordingly,  there can be no assurance that the Company will be able
to meet its future funding needs.

          As described in Notes 1 and 4 to the financial statements, the Company
is in default on its Senior Notes and has entered into a Restructuring Agreement
with certain Specified  Holders and filed a voluntary  petition under chapter 11
of the United States  Bankruptcy Code,  together with a  pre-negotiated  Plan of
Reorganization and the Disclosure Statement relating to such Plan, with the U.S.
Bankruptcy  Court for the  District of Delaware.  The effect of this  bankruptcy
proceeding on the Company's  future  liquidity and capital  resources  cannot be
determined at this time.

INFLATION AND EXCHANGE RATES

          Inflation and exchange rate  variations  have had, and are expected to
continue  to  have  for  the  foreseeable  future,  substantial  effects  on the
Company's  results  of  operations  and  financial  condition.   In  periods  of
inflation,  many of the Company's expenses will tend to increase.  Generally, in
periods of  inflation,  a company is able to raise its prices to offset the rise
of its expenses and may set its prices without governmental regulation. However,
under a Brazilian law designed to reduce inflation, the prices which the Company
may  charge  to a  particular  subscriber  may not be  increased  until the next
anniversary  of the  subscriber's  initial  subscription  date  and may  only be
increased by a percentage no greater than the  percentage of the increase in the
general  inflation rate which occurred  during the  subscriber's  contract year.
Thus,  the  Company  is less  able to  offset  expense  increases  with  revenue
increases.  Accordingly,  inflation  may have a material  adverse  effect on the
Company's results of operations and financial condition.

          Generally,  inflation in Brazil has been accompanied by devaluation of
the  Brazilian  currency  relative  to the U.S.  dollar.  The  Company  collects
substantially  all of its revenues in REAIS,  but pays certain of its  expenses,
including  a  significant  portion of its  equipment  costs,  substantially  all
interest  expense and most of its  programming  costs, in U.S.  dollars.  To the
extent the REAL depreciates at a rate greater than the rate at which the Company
is able to raise prices,  the value of the  Company's  revenues (as expressed in
U.S. dollars) is adversely affected.  This effect on the Company's revenues also
negatively impacts the Company's ability to fund U.S. dollar-based expenditures.

          As of January 1, 1998,  the  Company's  financial  statements  reflect
foreign   exchange  gains  and  losses   associated  with  monetary  assets  and
liabilities  denominated  in currencies  other than the REAL.  As a result,  the
devaluation of the REAL against the U.S.  dollar has caused,  and is expected to
cause, for the foreseeable  future, the Company to record a loss associated with
its U.S. dollar monetary  liabilities and a gain associated with its U.S. dollar
monetary assets. Given that the Company has a net U.S. dollar monetary liability
position,  the net effect of the devaluation of the REAL against the U.S. dollar
is to generate losses in the Company's financial statements. In order to protect
against a possible further devaluation of the REAL, the Company may from time to
time enter into certain foreign exchange  contracts.  See "Item 3.  Quantitative
and Qualitative Disclosures about Market Risk."

RECENT ECONOMIC EVENTS

          The economic and  financial  turmoil in Southeast  Asia and the former
Soviet  Republics  during  1997  and  1998 has had an  impact  on many  emerging
markets, including Brazil. As a result of these events, the Brazilian government
originally took  significant  measures to protect the REAL, as well as the gains
achieved over the last several years by the REAL Plan.  Among other actions,  in
October 1997,  Brazil's Central Bank  significantly  raised short-term  interest
rates,  and, in November  1997, the Brazilian  government  announced a series of
austerity  measures,  generally  including  budget cuts,  restrictions on public
indebtedness,  tax increases,  export  incentives and  restrictions  on imports.
These measures were designed to improve the country's fiscal and current account
deficits  and relieve  pressure on the REAL.  While  short-term  interest  rates
declined  somewhat  during the second  quarter of 1998,  they returned to levels
approaching 37% per annum by the end of the year and have only recently begun to
decline. Even with rates at this level, the government continued to experience a

                                       12
<PAGE>

reduction in foreign  currency  reserves which were being used to purchase REAIS
as a means to protect the relative value of the REAL versus the U.S. dollar. Due
to the continued reduction in foreign currency reserves,  and other reasons, the
Brazilian  government sought support from the  International  Monetary Fund (the
"IMF").  On November 13, 1998, the IMF announced an aid package of more than $41
billion. To secure funds from the IMF, in October 1998 the Brazilian  government
announced  additional  austerity  measures  including  pension  plan  reform and
significant  spending cuts, which have been approved by the Brazilian  Congress.
As part of these  additional  austerity  measures,  effective in June 1999,  the
government increased the financial  transactions tax (CPMF), from 0.2% to 0.38%.
This tax is levied on the value of all financial  transactions,  including  bank
withdrawals,  checks, and stock and fund purchases.  Also,  effective in January
1999, the Brazilian  government increased the public pension system contribution
by  corporations,  from 2% of revenue to 3% of revenue  and for the first  time,
subjected financial income,  including accrued intercompany  interest income, to
this tax.  Despite  these  additional  austerity  measures,  in January 1999 the
Brazilian   government  devalued  the  REAL  and  subsequently   eliminated  the
established  trading band, thereby allowing the REAL to float freely against the
U.S. dollar.  These measures have had, and will have for the foreseeable future,
an impact on the Company's financial results.

          Soon after the 1997  austerity  measures were  initiated,  the Company
began to experience a significant  increase in customer delinquency rates which,
among  other  things,  resulted  in the  Company  significantly  increasing  its
provisions for doubtful  accounts and increasing  service  disconnections.  This
trend  continued  throughout  1998 and 1999 and the first  quarter of 2000.  The
Company has undertaken  several steps to address the impact of the deterioration
in its operating environment,  such as performing credit checks on potential new
subscribers,  changing the way it compensates  its sales force to emphasize high
quality sales and implementing  cost reduction  measures,  including a headcount
reduction.  In addition,  as  previously  discussed  the Company has become more
aggressive  in  canceling  delinquent  subscriber  accounts.  There  can  be  no
assurance that the steps taken by the Company or measures taken by the Brazilian
government will be successful,  or that the increase in delinquent  payments and
service disconnections will abate.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          The  Company's  primary  market  risk  exposure  is  foreign  currency
exchange  rate risk between the U.S.  dollar and the  Brazilian  REAL due to the
Company having all of its operations  based in Brazil,  and most of its revenues
and some of its expenses  denominated  in REAIS while  substantially  all of its
debt and many of its expenses and capital  equipment  needs are  denominated  in
dollars. In addition,  for operating  purposes,  the Company holds a significant
portion of its available cash in REAIS.

          The Company  manages its risk exposure on its  available  cash held in
REAIS by purchasing,  from time to time,  foreign  currency  exchange  contracts
which have the  effect of  "locking-in"  a dollar  based  exchange  rate for the
Company's  cash held in Brazil.  The Company  believes that the cost of managing
risk exposure to its dollar-denominated debt and expenses is too high to warrant
an attempt at mitigating this risk.

          In an effort to protect  against a possible  devaluation  of the REAL,
the Company  entered into the following  foreign  currency hedge contracts which
were  outstanding  as of March 31, 2000 (these  contracts  were entered into for
purposes other than trading purposes):

--------------------------------------------------------------------------------
CONTRACT VALUE  EXCHANGE RATE  PREMIUM %  % CDI  CONTRACT DATE   EXPIRATION DATE
US$28,000,000   R$1.770:US$1   +6.8%       100%  Feb. 11, 2000   April 11, 2000
--------------------------------------------------------------------------------

Upon  expiration of the above  contract,  the Company entered into the following
foreign  currency hedge contracts to protect against further  devaluation of the
REAL.

--------------------------------------------------------------------------------
CONTRACT VALUE  EXCHANGE RATE  PREMIUM %  % CDI  CONTRACT DATE   EXPIRATION DATE
US$28,000,000   R$1.739:US$1   +2.8%       99.5% April 11, 2000  June 12, 2000
--------------------------------------------------------------------------------

The above  contracts  require  the Company to pay, on the  expiration  date,  an
amount equal to the calculated  interest (CDI--see below) on the contract value.

                                       13
<PAGE>

On the expiration  date,  the Company is to receive or pay an amount,  in REAIS,
calculated as follows:  the "Contract  Value R$" divided by the "Exchange  Rate"
times the sum of (the R$/US$ exchange rate in effect on the expiration date plus
the "Premium %) less the "Contract Value R$." If the Company receives a net gain
from such a transaction,  it is required to pay 20% of the net gain in Brazilian
federal income tax.

"CDI" is the  CERTIFICADO DE DEPOSITO  INTERBANCARIO,  or the interbank  lending
rate within Brazil.

The Company has not entered into contracts for market risk sensitive instruments
for trading purposes.


                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS.

          On January 26,  2000,  the Company  filed a voluntary  petition  under
chapter 11 of the United States Bankruptcy Code,  together with a pre-negotiated
Plan of Reorganization and the Disclosure  Statement relating to such Plan, with
the U.S.  Bankruptcy Court for the District of Delaware.  The court approved the
Disclosure Statement on March 1, 2000. Following approval of the adequacy of the
Disclosure  Statement,  ballots  respecting  the Plan were  circulated  to those
parties entitled to vote on the Plan, and the Plan was confirmed at a hearing by
the court on April 10, 2000.  Overwhelming  majorities  of holders of the Senior
Notes  and  holders  of  the  Company's  common  stock  voted  in  favor  of the
restructuring set forth in the Plan. Effectuation of the Plan is contingent upon
obtaining  approval of the  restructuring  contemplated by the Plan from Agencia
Nacional de  Telecomunicacoes,  the Brazilian  government  agency that regulates
telecommunications  services  in Brazil,  and the  Central  Bank of Brazil.  The
Brazilian  Telecommunications  Agency  ("ANATEL") issued a response on April 28,
2000,  indicating  full support for the  restructuring  and  indicating  that no
further approval is necessary from the Agency.  The Company continues to operate
and manage its affairs as debtor in possession. No trustee has been appointed.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

          None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

          No defaults upon senior  securities  occurred during the quarter ended
March  31,  2000.  An event of  default  which  occurred  in June  1999 has been
previously  reported in Item 3 of Part II of the Company's  Quarterly  Report on
Form 10-Q for the period ended June 30, 1999.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          On  March  7,  2000,   ballots   respecting   the  Company's  Plan  of
Reorganization  under chapter 11 of the Bankruptcy  Code were  circulated to the
Company's security holders entitled to vote on the Plan. Overwhelming majorities
of holders of the Senior Notes and holders of the  Company's  common stock voted
in favor of the restructuring set forth in the Plan, which was then confirmed by
the  bankruptcy  court on April 10, 2000.  The  following are the results of the
vote:

<TABLE>
<CAPTION>

                                           Accepting                       Rejecting
                                           ---------                       ---------
                                   # of holders   Amount              # of holders   Amount
                                   ------------   ------              ------------   ------
<S>                                  <C>          <C>                      <C>       <C>

Class 2 (Senior Secured Claims):      71          108,361,000              1         910,000


Class 4 (Equity Intrests):            36          6,711,388                5         14,000
</TABLE>

ITEM 5.   OTHER INFORMATION.

          None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

          (a) EXHIBITS

          27. Financial Data Schedule.

          (b) REPORTS ON FORM 8-K

          During the first quarter of 2000,  the Company filed a Current  Report
on Form 8-K on February 10, 2000,  pursuant to Item 3 thereof,  announcing that,
on January 26, 2000, the Company filed a voluntary  petition under chapter 11 of

                                       14

<PAGE>

the United  States  Bankruptcy  Code,  together  with a  pre-negotiated  Plan of
Reorganization  and the  Disclosure  Statement  relating to such Plan,  with the
United States Bankruptcy Court for the District of Delaware.

                                       15
<PAGE>

                                   SIGNATURES

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

DATED:   May 12, 2000



                                    TV FILME, INC.
                                    (Registrant)


                                    /s/ Hermano Studart Lins de Albuguerque
                                    ---------------------------------------
                                    Hermano Studart Lins de Albuquerque
                                    Chief Executive Officer (Principal
                                    Executive Officer)


                                    /s/ Carlos Andre Studar Lins de Albuquerque
                                    -------------------------------------------
                                    Carlos Andre Studart Lins de Albuquerque
                                    Acting Chief Financial Officer (Principal
                                    Financial and Accounting Officer)



                                       16
<PAGE>

                                  EXHIBIT INDEX



NO.     DESCRIPTION

27      Financial Data Schedule