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


                       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 September 30, 1998

                                            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 : __________

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

                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 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                      10,825,139 shares
     per share.                                         as of November 13, 1998.

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

<PAGE>
                                 TV FILME, INC.

                                      INDEX


PART I.  FINANCIAL INFORMATION                                          PAGE NO.
------------------------------                                          --------

ITEM 1. Financial Statements

        Consolidated  Balance  Sheets  as of  December  31,  1997  and
        September 30, 1998 (Unaudited).........................................2

        Unaudited Consolidated  Statements of Operations for the Three
        and Nine  Months  Ended  September  30, 1997 and the Three and
        Nine Months Ended September 30, 1998...................................3

        Unaudited  Consolidated  Statement of Changes in Stockholders'
        Equity at September 30, 1998...........................................4

        Unaudited  Consolidated  Statements of Cash Flows for the Nine
        Months  Ended  September  30, 1997 and the Nine  Months  Ended
        September 30, 1998.....................................................5

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

ITEM 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations..............................................9

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk............15


PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.....................................................16

ITEM 2. Changes in Securities and Use of Proceeds.............................16

ITEM 3. Defaults Upon Senior Securities.......................................16

ITEM 4. Submission of Matters to a Vote of Security Holders...................16

ITEM 5. Other Information.....................................................16

ITEM 6. Exhibits and Reports on Form 8-K......................................16

SIGNATURES


<PAGE>

                    PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
          --------------------

                    TV FILME, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                          DECEMBER 31,         SEPTEMBER 30,
                                                                              1997                 1998
                                                                      --------------------     -----------
                                                                                               (Unaudited)
                                                                                     (In thousands)
<S>                                                                          <C>                    <C>     
ASSETS
Current assets:
   Cash and cash equivalents......................................           $ 80,975               $ 67,554
   Accounts receivable, net.......................................              7,832                  4,708
   Supplies.......................................................              5,303                  5,226
   Prepaid expenses and other current assets......................              3,178                  4,003
   Interest receivable............................................                679                    584
   Pledged securities-current.....................................             16,645                  8,323
                                                                      ---------------        ---------------
       Total current assets.......................................            114,612                 90,398
Property, plant and equipment, net................................             63,405                 53,387
Debt issuance costs, net..........................................              6,298                  4,943
Other assets......................................................              2,082                  2,849
                                                                      ---------------        ---------------
       Total assets...............................................           $186,397               $151,577
                                                                      ===============        ===============

LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
  Accounts payable................................................           $  12,724               $  7,066
  Payroll and other benefits payable..............................               2,103                  3,363
  Accrued interest payable........................................                 751                  5,257
  Accrued liabilities and taxes payable...........................               1,111                    992
  Payables to affiliates-current..................................                 200                     --
                                                                       ---------------        ---------------
       Total current liabilities..................................              16,889                 16,678
Deferred installation fees........................................               7,178                  4,494
Senior Notes......................................................             140,000                140,000
Stockholders' equity:
Accumulated other comprehensive loss
   Cumulative translation adjustment.............................                  --                 (2,678)
   Preferred stock, $.01 par value, 1,000,000                     
     shares authorized, no shares issued.........................                  --                     --
   Common stock, $.01 par value, 50,000,000                       
     shares authorized, 10,825,139 and 10,825,139
     shares issued and outstanding................................                 108                    108
   Additional paid-in capital.....................................              45,657                 45,657
   Accumulated deficit............................................             (23,435)               (52,682)
                                                                       ----------------       ----------------
       Total stockholders' equity.................................              22,330                 (9,595)
                                                                       ---------------        ----------------
       Total liabilities and stockholders' equity.................            $186,397               $151,577
                                                                       ===============        ===============
</TABLE>









                                                       See accompanying notes.


                                                                  2

<PAGE>

                    TV FILME, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS

                              (Unaudited)



<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED SEPTEMBER 30,        NINE MONTHS ENDED SEPTEMBER 30,
                                                    1997               1998               1997               1998
                                                  --------           --------           --------           --------
                                                                    (In thousands, except per share data)

<S>                                               <C>                <C>                <C>                <C>     
Revenues ...............................          $ 13,691           $ 11,049           $ 37,108           $ 35,127
Operating costs and expenses:
   System operating - Note 2 ...........             4,771              5,178             12,921             15,214
   Selling, general and administrative .             6,947              6,279             18,688             22,257
   Depreciation and amortization .......             3,290              5,845              8,417             16,496
                                                  --------           --------           --------           --------
      Total operating costs and expenses            15,008             17,302             40,026             53,967
                                                  --------           --------           --------           --------
      Operating loss ...................            (1,317)            (6,253)            (2,918)           (18,840)
Other income (expense):
   Interest and other expense - Note 2 .            (4,756)            (4,793)           (14,446)           (14,242)
   Interest and other income ...........             1,996              2,680              7,231              7,424
   Monetary loss .......................                --             (1,080)                --             (3,589)
   Exchange and translation losses .....              (430)                --             (1,529)                --
                                                  --------           --------           --------           --------
      Total other expense ..............            (3,190)            (3,193)            (8,744)           (10,407)
                                                  --------           --------           --------           --------
Net loss ...............................          $ (4,507)          $ (9,446)          $(11,662)          $(29,247)
                                                  ========           ========           ========           ========

Net loss per share, basic and diluted ..          $  (0.41)          $  (0.87)          $  (1.06)          $  (2.70)
                                                  ========           ========           ========           ========

Weighted average number of shares of
  common stock and common
  stock equivalents outstanding ........            10,978             10,825             10,982             10,825
                                                  ========           ========           ========           ========
</TABLE>









                                                       See accompanying notes.


                                                                  3
<PAGE>

                    TV FILME, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                              (Unaudited)

             For the nine months ended September 30, 1998


<TABLE>
<CAPTION>
                                                                                  Accumulated
                                                                    Additional       Other
                                          Common Stock               Paid-In     Comprehensive     Accumulated
                                     Shares         Par Value        Capital          Loss            Deficit           Total
                                   ----------      ----------      ----------      ----------       ----------       ----------
                                                                   (In thousands, except shares)
<S>                                <C>             <C>             <C>             <C>              <C>              <C>       
BALANCE AT DECEMBER 31, 1997       10,825,139      $      108      $   45,657      $       --       $  (23,435)      $   22,330
Cumulative translation
   adjustment ...............              --              --              --          (2,678)              --           (2,678)
Net loss for the period .....              --              --              --              --          (29,247)         (29,247)
                                   ----------      ----------      ----------      ----------       ----------       ----------
BALANCE AT SEPTEMBER 30, 1998      10,825,139      $      108      $   45,657      $   (2,678)      $  (52,682)      $   (9,595)
                                   ==========      ==========      ==========      ==========       ==========       ==========
</TABLE>











                                                       See accompanying notes.


                                                                  4
<PAGE>

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

                              (Unaudited)

<TABLE>
<CAPTION>
                                                                     Nine Months Ended September 30,
                                                                     -------------------------------
                                                                         1997             1998
                                                                       ---------       ---------
                                                                             (In thousands)
<S>                                                                    <C>             <C>       
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ........................................................      $ (11,662)      $ (29,247)
Adjustments to reconcile net loss to net cash provided
     by operating activities:
     Depreciation and amortization ..............................          8,417          16,804
     Provision for losses on accounts receivable ................          2,414           5,845
     Amortization of debt issuance costs ........................            590           1,355
     Decrease in deferred installation fees .....................           (532)         (2,317)
     Monetary loss ..............................................             --           3,589
     Changes in operating assets and liabilities:
     Increase in accounts receivable ............................         (6,944)         (3,178)
     Increase in supplies .......................................         (2,353)           (233)
     Increase in prepaid expenses and other current assets ......         (2,016)         (1,010)
     Increase (decrease) in accrued interest receivable .........           (597)             95
     Increase in other assets ...................................           (485)         (1,313)
     Decrease in pledged securities .............................          8,112           8,322
     Increase (decrease) in accounts payable ....................          4,095          (5,363)
     Increase in payroll and other benefits payable .............          1,046           1,383
     Increase in accrued interest payable .......................          4,754           4,506
     Increase (decrease) in accrued liabilities and taxes payable            500             (42)
                                                                       ---------       ---------
Net cash provided by (used in) operating activities .............          5,339            (804)
                                                                       ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment ...................................        (30,180)        (10,122)
                                                                       ---------       ---------
Net cash used in investing activities ...........................        (30,180)        (10,122)
                                                                       ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term debt .....................................         (2,122)             --
Debt issuance costs .............................................           (819)             --
Issuance of common stock and warrants ...........................          3,763              --
Decrease in payables to affiliates ..............................           (200)           (200)
                                                                       ---------       ---------
Net cash provided by (used in) financing activities .............            622            (200)
                                                                       ---------       ---------
Effect of exchange rate changes on cash .........................             --          (2,295)
                                                                       ---------       ---------
Net change in cash and cash equivalents .........................        (24,219)        (13,421)
Cash and cash equivalents at beginning of period ................        116,355          80,975
                                                                       ---------       ---------
Cash and cash equivalents at end of period ......................      $  92,136       $  67,554
                                                                       =========       =========
</TABLE>








                                                       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

         In connection  with an initial  public  offering  (the "Initial  Public
Offering") of its common stock,  $.01 par value per share (the "Common  Stock"),
TV Filme,  Inc. (the  "Company")  was formed in April 1996 to become the holding
company of and successor to ITSA-Intercontinental  Telecomunicacoes S.A. and its
subsidiaries  ("ITSA").  The transfer of ITSA to the Company has been  accounted
for in a manner  similar to a pooling of interests.  ITSA was formed in May 1994
as a holding company for and successor to TV Filme Servicos de  Telecomunicacoes
S.A. ("TVFSA"). The transfer of TVFSA to ITSA has been accounted for in a manner
similar to a pooling of interests.

         In connection  with the Initial Public  Offering,  the Company  entered
into  a  restructuring  (the  "Restructuring")  pursuant  to  which  all  of the
preferred  stock of ITSA was converted  into common stock of ITSA,  based on the
conversion rates at the date of issuance of the preferred  stock.  Each share of
common  stock of ITSA was  exchanged  for 1,844  shares  of Common  Stock of the
Company. As all of the preferred stock of ITSA has been converted and there were
no preferred dividends paid or due as a result of the conversion,  all preferred
and common stock issuances of the  predecessor  companies have been reflected as
issuances  of Common  Stock of the  Company.  Prior to the  consummation  of the
Initial  Public  Offering and the  Restructuring,  TVFSA  operated the Company's
wireless  cable  system  in  Brasilia,  and held the  licenses  to  operate  the
Company's  wireless  cable  systems in Brasilia,  Goiania and Belem.  ITSA owned
substantially all of TVFSA, TV Filme Goiania Servicos de Telecomunicacoes  Ltda.
("TV Filme Goiania") and TV Filme Belem Servicos de Telecomunicacoes  Ltda. ("TV
Filme  Belem").  Pursuant to the  Restructuring,  (i) 51% of the voting stock of
TVFSA was  transferred to an entity,  all of which is owned by certain  existing
shareholders of ITSA who are Brazilian nationals, with ITSA retaining 49% of the
voting stock and 83% of the  economic  interests  in TVFSA;  (ii) the  operating
assets of the wireless cable system of Brasilia were  transferred  from TVFSA to
TV Filme Brasilia  Servicos de  Telecomunicacoes  Ltda.  ("TV Filme  Brasilia"),
which is  substantially  owned by ITSA;  and (iii) TVFSA  entered  into  various
agreements with ITSA and its subsidiaries pursuant to which, among other things,
TVFSA has authorized  ITSA to operate the existing  wireless cable systems under
its current  licenses.  Subsequent to the  Restructuring  and the Initial Public
Offering, the Company owns 100% of ITSA, which holds 49% of the voting stock and
83% of the economic  interests of TVFSA and 100% of TV Filme Brasilia,  TV Filme
Goiania and TV Filme  Belem.  As of November  1997,  the licenses to operate the
existing  wireless cable systems were  transferred from TV Filme Servicos to the
respective operating companies, TV Filme Brasilia, TV Filme Goiania and TV Filme
Belem.

         Accordingly,  the  consolidated  financial  statements  of the  Company
include ITSA and its subsidiaries on a historical basis since May 1994 as though
they have been part of the Company for all periods  presented.  All  significant
intercompany transactions and balances have been eliminated in consolidation.

         The Company develops, owns and operates subscription television systems
in  mid-sized  markets in Brazil.  The Company has  established  wireless  cable
operating systems in the cities of Brasilia, Goiania and Belem.


                                       6
<PAGE>

     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.  Until December 31, 1997,  amounts in Brazilian  currency were
remeasured  into U.S.  dollars in accordance  with the  methodology set forth in
Statement of Financial Accounting Standards No. 52 ("SFAS 52") as its applies to
entities operating in highly inflationary economies.  Supplies,  property, plant
and equipment, intangibles and deferred installation fees and the related income
statement  accounts were  remeasured at exchange rates in effect when the assets
were acquired or the liabilities were incurred. All other assets and liabilities
were remeasured at period end exchange  rates;  and all other income and expense
items were remeasured at average  exchange rates  prevailing  during the period.
Remeasurement  adjustments  were  included in  exchange  and  translation  gains
(losses).

         Effective January 1, 1998, the Company determined that Brazil ceased to
be a highly inflationary  economy under SFAS 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.  In addition,  the Company recorded a loss associated with holding a net
foreign currency monetary liability position.

         In management's  opinion,  all adjustments  (consisting  only of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating  results  for the first  nine  months  are not  necessarily
indicative of the results that may be expected for a full year.

     c.  NET LOSS PER SHARE

         The Company adopted the provisions of Statement of Financial Accounting
Standards No. 128,  "Earnings Per Share" ("SFAS 128"),  for year-end 1997.  SFAS
128, which  supersedes  APB Opinion No. 15,  "Earnings Per Share," was issued in
February 1997. SFAS 128 requires dual presentation of basic and diluted earnings
per share ("EPS") for complex capital structures on the face of the statement of
operations.  Basic EPS is computed by  dividing  income or loss by the  weighted
average number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution from the exercise or conversion of securities into common
stock.  The basic or diluted  EPS  measured  under  SFAS 128 are not  materially
different than if measured under APB No. 15.

     d.  ALLOWANCE FOR DOUBTFUL ACCOUNTS

         The Company had an allowance  for doubtful  accounts of  $1,710,000  at
December 31, 1997 and $2,331,000 at September 30, 1998. Charges to the allowance
during the three months ended September 30, 1998 were $2,992,000.

     e.  COMPREHENSIVE INCOME

         The Company has adopted Statement of Financial Accounting Standards No.
130, "Reporting  Comprehensive  Income" ("SFAS 130").  SFAS 130  establishes new
rules for the reporting and display of comprehensive  income and its components;
however,  the  adoption of this  statement  had no impact on the  Company's  net
income or shareholders' equity.  SFAS 130 requires foreign currency  translation
adjustments to be included in other comprehensive income.

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 and nine months ended
September 30, 1997 and 1998 were  approximately  $2,600,000  and $ 7,900,000 and
$2,700,000 and  $8,100,000,  respectively.  Through  September 1997, the Company
purchased from Tevecap a program guide which it  distributed to its  subscribers
monthly. In October 1997, the Company discontinued  purchasing the program guide
produced by Tevecap and began producing and  distributing its own program guide.
Amounts  paid to Tevecap for the program  guide 


                                       7
<PAGE>

during the three and nine months ended September 30, 1997 and 1998 were $323,000
and $679,000 and $ 0 and $ 0, res.pectively.

         The Company  purchased two licenses to operate  wireless  cable systems
from  Abril S.A.  ("Abril")  for  $400,000  each,  payable in four equal  annual
installments,   which  do  not  bear  interest.   The  $200,000  which  remained
outstanding as of December 31, 1997 was repaid in February 1998.

3.   STOCK OPTION PLAN

         In connection with the Initial Public Offering,  the Board of Directors
of the  Company  (the  "Board")  adopted  and the  stockholders  of the  Company
approved  the 1996 Stock  Option Plan (such  plan,  as  subsequently  amended in
September 1997, 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, as of October 1, 1998, 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 Initial
Public  Offering,  297,000  of which are  exercisable  at  $10.00  per share and
110,000 of which are  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


4.   LONG-TERM DEBT

         On December 20,  1996,  the Company  issued  $140.0  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  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 is in an amount
sufficient  to provide for payment in full when due of the first four  scheduled
interest  payments on the Senior Notes.  Debt issuance costs are capitalized and
amortized over the period of the debt under the effective yield method.

         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


                                       8
<PAGE>

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
September 30, 1998 it is unable to make any dividend payments.

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,  devaluation and general economic  conditions in Brazil have had, and
may continue to have, substantial effects on the Company's results of operations
and  financial  condition.  See "-Inflation  and  Exchange  Rates"  and "-Recent
Economic Events."

<TABLE>
<CAPTION>
                                                              Three Months Ended September 30,
                                                ----------------------------------------------------------
                                                                  % of                             % of
                                                   1997          Revenue           1998           Revenue
                                                ---------       ---------        ---------       ---------
                                                (In thousands, except subscriber, per share and share data)

<S>                                             <C>                   <C>        <C>                   <C> 
Revenues .................................      $  13,691             100%       $  11,049             100%
Operating costs and expenses:
      System operating ...................          4,771              35%           5,178              47%
      Selling, general and administrative           6,947              51%           6,279              57%
      Depreciation and amortization ......          3,290              24%           5,845              53%
                                                ---------       ---------        ---------       ---------
        Total operating costs and expenses         15,008             110%          17,302             157%
                                                ---------       ---------        ---------       ---------
           Operating loss ................         (1,317)            (10%)         (6,253)            (57%)
Other income (expense):
      Interest and other expense .........         (4,756)            (35%)         (4,793)            (43%)
      Interest and other income ..........          1,996              15%           2,680              24%
      Monetary loss ......................             --              --           (1,080)            (10%)
      Exchange and translation losses ....           (430)             (3%)             --              --
                                                ---------       ---------        ---------       ---------
Net loss .................................      $  (4,507)            (33%)      $  (9,446)            (86%)
                                                =========       =========        =========       =========
Net loss per share, basic and diluted ....      $   (0.41)                       $   (0.87)
                                                =========                        =========
Weighted average number of common
  stock and common stock equivalents .....         10,978                           10,825
                                                =========                        =========
Other Data:
      EBITDA(a) ..........................      $   1,973                        $    (408)
                                                =========                        =========
      Number of subscribers at
        end of period(b) .................        114,913                           93,273
                                                =========                        =========
</TABLE>


                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                               Nine Months Ended September 30,
                                                 ----------------------------------------------------------
                                                                   % of                             % of
                                                    1997          Revenue           1998           Revenue
                                                 ---------       ---------        ---------       ---------
                                                 (In thousands, except subscriber, per share and share data)

<S>                                              <C>                   <C>        <C>                   <C> 
Revenues ..................................      $  37,108             100%       $  35,127             100%
Operating costs and expenses:
      System operating ....................         12,921              35%          15,214              43%
      Selling, general and administrative .         18,688              50%          22,257              63%
      Depreciation and amortization .......          8,417              23%          16,496              47%
                                                 ---------       ---------        ---------       ---------
         Total operating costs and expenses         40,026             108%          53,967             154%
                                                 ---------       ---------        ---------       ---------
         Operating loss ...................         (2,918)             (8%)        (18,840)            (54%)
Other Income (expense):
      Interest and other expense ..........        (14,446)            (39%)        (14,242)            (41%)
      Interest and other income ...........          7,231              19%           7,424              21%
      Monetary loss .......................             --              --           (3,589)            (10%)
      Exchange and translation losses .....         (1,529)             (4%)             --              --
                                                 ---------       ---------        ---------       ---------
Net loss ..................................      $ (11,662)            (31%)      $ (29,247)            (83%)
                                                 =========       =========        =========       =========
Net loss per share, basic and diluted .....      $   (1.06)                       $   (2.70)
                                                 =========                        =========
Weighted average number of common
    stock and common stock equivalents ....         10,982                           10,825
                                                 =========                        =========
Other Data:
      EBITDA(a) ...........................      $   5,499                        $  (2,344)
                                                 =========                        =========
      Number of subscribers at
      end of period(b) ....................        114,913                           93,273
                                                 =========                        =========
</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 United States  generally
accepted  accounting  principles,  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.

(b)      In the third  quarter of 1998,  the Company  became more  aggressive in
cancelling  delinquent  subscriber  accounts.  The  Company  expects to generate
additional  write-offs in the fourth  quarter of 1998,  but the quantity of such
write-offs is as yet undetermined.

         REVENUES. The Company's revenues primarily consist of monthly fees paid
by  subscribers  for the  programming  package,  as well  as  installation  fees
recognized  for the  period,  net of sales  taxes.  For the three  months  ended
September  30, 1998 compared to the same period in 1997,  revenues  decreased by
approximately  $2.6 million,  or approximately 19%, primarily due to the loss of
revenue  associated with higher levels of delinquency,  lower  installation fees
and the effects of an 8% average devaluation of the REAL against the U.S. dollar
between the respective periods, partially offset by revenues associated with the
Company's  proprietary premium channel.  See "-Recent Economic Events".  For the
nine  months  ended  September  30,  1998  compared  to the same period in 1997,
revenues  decreased  by  approximately  $2.0  million,  or  approximately  5.3%,
primarily due to loss of revenue  associated  with higher levels of delinquency,
lower installation fees and the effects of an 8% average devaluation of the REAL
against  the U.S.  dollar  between  the  respective  periods,  offset in part by
revenues from the Company's proprietary premium channel.

                                       10
<PAGE>

         SYSTEM  OPERATING  EXPENSES.   System  operating  expenses  consist  of
programming  costs  (including  costs  associated  with developing and producing
proprietary programming content), costs for the programming guide distributed to
subscribers,  a portion of costs of compensation  and benefits for the Company's
employees, transmitter site rentals and other miscellaneous costs. For the three
months ended  September 30, 1998  compared with the same period in 1997,  system
operating expenses increased by approximately $0.4 million,  or 8.5%,  primarily
due to additional  programming  costs associated with the Company's  proprietary
premium  channel   (approximately   $0.2  million)  and  higher  other  expenses
(approximately  $0.2  million).  For the nine months  ended  September  30, 1998
compared to the same period in 1997,  system  operating  expenses  increased  by
approximately  $2.3 million,  or  approximately  17.7%,  primarily due to higher
compensation expenses  (approximately $0.7 million) associated with the addition
of customer  service,  collection and other  personnel,  additional  programming
costs  primarily  associated  with the  Company's  proprietary  premium  channel
(approximately $0.2 million), costs associated with the development and on-going
operation of the  Company's  proprietary  premium  channel  (approximately  $0.8
million),   higher  programming  guide  expenses  (approximately  $0.2  million)
reflecting  the full cost of the  programming  guide  compared to the first nine
months of 1997 when the Company  received a one-time  credit from the publisher,
and higher other expenses (approximately $0.4 million).

          SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  For the three months
ended September 30, 1998 compared to the same period in 1997,  selling,  general
and administrative ("SG&A") expenses decreased by approximately $0.7 million, or
approximately  9.6%,  primarily due to a decrease in advertising and promotional
expense  (approximately  $0.4 million) and other  expenses  (approximately  $0.3
million).  For the nine months  ended  September  30, 1998  compared to the same
period in 1997,  SG&A  expenses  increased by  approximately  $3.6  million,  or
approximately 19%, primarily due to (i) a higher provision for doubtful accounts
(approximately $3.3 million) resulting from an increase in customer  delinquency
rates, and (ii) an increase in compensation and benefits expenses (approximately
$1.3 million) incurred as a result of salary increases and costs associated with
the  termination of employment of a portion of the Company's work force pursuant
to the Company's cost reduction efforts. This increase was partially offset by a
decrease in advertising and promotion expense  (approximately $1.0 million).  In
each of the periods,  the higher  customer  delinquency  rates also  resulted in
significant increases in service disconnections. See "--Recent Economic Events."

         DEPRECIATION AND AMORTIZATION  EXPENSES.  Depreciation and amortization
expenses consist primarily of depreciation of decoder boxes,  headend facilities
and  installation  costs.  Beginning with the first quarter of 1998, these costs
are being  capitalized and depreciated  over a four-year  period.  For the three
months  ended   September  30,  1998  compared  to  the  same  period  in  1997,
depreciation and amortization  expense increased by approximately  $2.6 million,
or  approximately  78%. For the nine months ended September 30, 1998 compared to
the same period in 1997,  depreciation  and  amortization  expense  increased by
approximately $8.1 million,  or approximately 96%. In each case, the increase is
primarily due to the Company's change in its  depreciation  schedule for decoder
boxes and installation costs from a five-year to a four-year period.

         OPERATING  LOSS. For the three- and nine-month  periods ended September
30, 1998, the Company  generated a loss of approximately  $6.3 million and $18.8
million,  respectively,  primarily  due  to  expenses  in  connection  with  the
Company's business and the decrease in revenue,  as explained above. The Company
may continue to generate operating losses as it expands its existing systems and
develops additional systems.

         INTEREST EXPENSE. Interest expense was essentially unchanged during the
three-month period ended  September  30, 1998 compared to the three-month period
ended  September  30,  1997.   Interest  expense  decreased  slightly  for   the
nine-month  period  ended  September  30, 1998 compared to the  nine-month  


                                       11
<PAGE>

period  ended  September  30,  1997,  primarily  as a  result  of  decreases  in
short-term borrowings of the Company.

         INTEREST  INCOME.  Interest  income  increased  for both the three- and
nine-month  periods  ended  September  30,  1998  compared  to  the  three-  and
nine-month periods ended September 30, 1997, respectively, primarily as a result
of a higher  proportion of the Company's  cash  denominated  in REAIS which earn
higher rates of interest.

         MONETARY  LOSS.  Beginning on January 1, 1998, in accordance  with SFAS
52, monetary losses resulted from the  depreciation of the REAL against the U.S.
dollar, given the Company's net dollar-denominated  monetary liability position.
See footnote 1b. "Method of Presentation" contained in the Notes to Consolidated
Financial Statements and " - Inflation and Exchange Rates."

         EXCHANGE AND TRANSLATION LOSSES.  Exchange and translation losses arose
prior to January 1, 1998,  due to the  remeasurement  of  short-term  assets and
liabilities  from REAIS to U.S. dollars in accordance with SFAS 52 for companies
in highly inflationary economies. Unless Brazil returns to a highly inflationary
status,  the  Company  does not  believe  it will  record  future  exchange  and
translation gains or losses.

         INCOME  TAXES.  The  Company  did not have  taxable  income  during the
nine-month  period ended  September 30, 1998 and expects to generate  losses for
the foreseeable future. Brazilian marginal corporate tax rates are approximately
33.0%.

         NET LOSS. As explained above,  net losses in the periods  presented are
primarily  attributable to the significant  expenses incurred in connection with
the development of the Company's  business and net interest expenses  associated
with the Senior Notes.

LIQUIDITY AND CAPITAL RESOURCES

         The pay television business is a capital intensive business.  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 the 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,  (ii)  capital
markets  financings,  (iii) vendor  financing which generally  requires  payment
within 360 days of shipment,  some of which has been  supported  by  irrevocable
letters of credit  guaranteed  by Abril and certain of its  affiliates  and (iv)
borrowings from Abril and certain of its  affiliates.  As of September 30, 1998,
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  September 30, 1998,  approximately  $3.2 million was outstanding
under letters of credit with maturities ranging from 270 days to 360 days. As of
September  30,  1998,  the Company had import  lines of credit in the  aggregate
amount of $30.5 million with four commercial banks, of which approximately $27.3
million was available on such date. The Company currently believes that lines of
credit as described  above and  additional  vendor  financing  are  available on
acceptable  terms.  As a result of the Initial  Public  Offering  and the Senior
Notes offering,  the Company had positive  working capital at September 30, 1998
in the amount of $72.3  million.  Net cash used in operating  activities for the
three months ended September 30, 1998 was approximately $0.8 million.


                                       12
<PAGE>

         The Company made capital  expenditures of  approximately  $10.1 million
during the nine months ended September 30, 1998. Such capital  expenditures were
financed  with the  proceeds  from  the  Senior  Notes  offering  and from  cash
generated from the Company's operations. For the remaining three months of 1998,
the Company anticipates  capital  expenditures of approximately $9.0 million, of
which $3.0 million will be incurred in its existing  operating  markets,  and an
additional  $6.0 million (see  discussion  below) will be incurred in connection
with the  development  of new  markets  awarded to the  Company  in October  and
November of this year.

         In September 1997, the Brazilian  Ministry of Communications  announced
the  bidding  process  by  which  additional  pay-TV  licenses  will 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. The status of the
bidding process with respect to the remaining  markets requires further judicial
action. The Company cannot predict when such judicial action will occur. In July
1998, the license  process for the smaller markets was reinstated and in October
and November 1998, the Company was awarded licenses to operate pay-TV systems in
the following six cities:  Bauru, Campina Grande,  Caruaru,  Franca, Porto Velho
and  Uberaba.  The Company will pay an aggregate of $3.8 million for its six new
licenses.  The Company  intends to  continue  to pursue  licenses as they become
available  for bid;  however,  there can be no  assurance as to the grant of any
additional  concessions  and  licenses and the timing of any  additional  grants
generally.  The  Company  also 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  believes  that its cash and  internally
generated funds will be sufficient to fund the cash  requirements  for its three
existing systems and six new markets for at least the next twelve months.  As of
September  30, 1998, of the  Company's  approximately  $76.5 million in cash and
cash equivalents,  approximately $26.2 million (34%) 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  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
funding needs in the longer term.

INFLATION AND EXCHANGE RATES

         Inflation  and exchange rate  variations  have had, and may continue to
have,  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 in its  expenses  and may set its  prices  without
government   regulation.   However,  under  Brazilian  law  designed  to  reduce
inflation, the rates which the Company may charge to a particular subscriber may
not  be  increased  until  the  next  anniversary  of the  subscriber's  initial
subscription  date.  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.  Devaluation of the REAL may
also have an adverse effect on the Company.  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 raises prices,
the value of the  Company's  revenues  (as  expressed in U.S.  dollars)  will be
adversely affected.  This effect on the Company's revenues may negatively impact
the  Company's  ability  to fund U.S.  dollar-based  expenditures.  Accordingly,
devaluation  of the REAL may have a  material  adverse


                                       13
<PAGE>

effect on the Company's results of operations and financial condition.  Further,
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.  See footnote  1b.  "Method of
Presentation" contained in the Notes to Consolidated Financial Statements.  As a
result,  the  devaluation  of the REAL  against  the U.S.  dollar will cause 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
devaluation  of the real the  Company  may from time to time enter into  certain
foreign exchange contracts.

RECENT ECONOMIC EVENTS

          The economic and  financial  turmoil in Southeast  Asia and the Soviet
Union during 1997 and 1998 has had an impact on many emerging markets, including
Brazil.  As a  result  of these  events,  the  Brazilian  government  has  taken
significant measures to protect the real, as well as the gains achieved over the
last several years by the Real Plan.  Among other actions,  on October 27, 1997,
Brazil's Central Bank  significantly  raised short-term  interest rates, and, on
November  10, 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,
which  continue to have a negative  impact on  Brazil's  economic  growth,  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  have  since  returned  to  levels
approaching  42% per  annum.  Even  with  rates at this  level,  the  government
continues to experience a reduction in foreign currency reserves which are 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 has sought support from
the International Monetary Fund ("IMF"). On November 13, 1998, the IMF announced
an aid package of more than $41 billion of which $37 billion  will be  available
to Brazil over the next twelve months.  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 yet to be approved
by the Brazilian Congress.  As part of the austerity package,  the government is
also seeking to increase  its  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, the Brazilian
government  intends  to  increase  the public  pension  system  contribution  by
corporations from 2% of revenue to 3% of revenue.  These measures,  if approved,
will have both a direct and indirect impact on the Company's  financial results.
Indirectly,  these measures, in conjunction with high short-term interest rates,
will result in continued  tightening of consumer  credit and increased  rates of
unemployment,  causing the Company to have  increased  difficulty  in generating
additional sales and in reducing rates of customer delinquency.  Directly, these
measures will reduce the Company's net revenue by  approximately 1% and increase
its cash expenses by approximately  0.18%. Had these measures been introduced as
of January 1, 1998, the effect on the Company's  results  through  September 30,
1998 would have been a reduction  of net revenues of $400,000 and an increase in
expenses of $250,000. 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 has  continued  during the first  three  quarters  of 1998 and the Company
anticipates  that this trend  will  continue  for the  foreseeable  future.  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  cancelling  delinquent  subscriber  accounts.  While the Company
believes its current difficulties are short-term in nature


                                       14
<PAGE>

and the steps it has undertaken are adequate to address these issues,  there can
be no  assurance  that the steps taken by the  Company or measures  taken by the
government will be successful,  or that the increase in delinquent  payments and
service disconnections will abate.

YEAR 2000 COMPLIANCE

         Similar to all businesses, the Company may be affected by the inability
of certain computer software and firmware to distinguish  between the years 1900
and 2000 due to a commonly-used programming convention. Unless such programs are
modified  or  replaced  prior to  January 1,  2000,  calculations  based on date
arithmetic or logical operations performed by such programs may be incorrect.

         Management's  plan to address the effect of the Year 2000 issue focuses
on the following areas:  applications  systems  (including the Company's billing
system and accounting  software),  transmission  systems (including the encoding
and  decoding  processes  used in  transmission  of the  television  signals  to
customers),  infrastructure  (including  personal  computers  and  servers  used
throughout the Company),  and other third party business partners and suppliers.
Management's  analysis and review of these areas is  comprised  primarily of the
following  five  phases:  developing  an  inventory  of  hardware,  software and
embedded chips;  assessing the degree to which each area is currently  compliant
with Year 2000 requirements; performing renovations, repairs and replacements as
needed to attain  compliance;  testing to ensure compliance;  and,  developing a
contingency  plan for each  area if the  Company's  initial  efforts  to  attain
compliance are either unsuccessful or untimely.

         Management is currently in the process of concluding  its inventory and
assessment  phases and expects to complete  these phases by February  1999.  The
renovation,  repair and replacement  phase and the testing phase have commenced;
however,  the Company expects to continue these phases  throughout  1999.  Costs
incurred to date have  primarily  consisted  of labor from the  redeployment  of
existing information services and operational resources.  The Company expects to
spend  approximately  $1.0 million for these Year 2000 compliance  efforts which
will be expenses as incurred.

          Further,  the  Company  has  completed  evaluation  and testing of its
proprietary Subscriber Management System (SMS) which controls internal processes
such as telemarketing  and sales control,  customer service,  dispatch,  service
orders and billing.  The Company believes that the SMS is Year 2000 compliant on
a stand-alone basis.  However,  certain third-party  software and hardware which
interact  with  the  SMS  remain  in  the  inventory  and   assessment   phases.
Accordingly, complete compliance for the Company's SMS has yet to be determined.

         Also, the Company has formed a contingency  team to develop a work plan
in the event that certain  programs and  hardware  are not fully  compliant  and
operational  before January 1, 2000. The costs  associated  with this effort are
currently  being  evaluated  and  cannot  yet be  determined.  In the event that
certain,  or all, of the contingency plans are deployed,  the Company will incur
additional costs; however, as the contingency plans are not yet developed, these
costs are indeterminable at present.

         Although the Company does not presently  anticipate a material business
interruption as a result of the Year 2000 issue,  the worst case scenario if all
of the Company's Year 2000 efforts fail would result in a daily loss of revenues
of approximately $130,000, calculated based upon 1998 revenues through September
30, 1998.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------

         This requirement is not currently applicable to the Company.


                                       15
<PAGE>

                           PART II - OTHER INFORMATION
                           ---------------------------

Item 1.  Legal Proceedings.
         -----------------

         None.

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

         None.

Item 3.  Defaults Upon Senior Securities.
         --------------------------------

         None.

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

         None.

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

         No  reports on Form 8-K were filed by the  Company  during the  quarter
ended September 30, 1998.


                                       16
<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:  November 12, 1998


                                    TV FILME, INC.
                                    (Registrant)


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


                                       17
<PAGE>

                                  Exhibit Index
                                  -------------


No.                      Description
---                      -----------

27                       Financial Data Schedule







                                       18