---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

---

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2001

Commission File Number: 001-12223

---

UNIVISION COMMUNICATIONS INC.

Incorporated in Delaware

I.R.S. Employer Identification Number: 95-4398884

1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
Tel: (310) 556-7676

Securities registered pursuant to Section 12 (b) of the Act:

|Title of Each Class                  |  | Name of Each Exchange
on which Registered
|------------------------------------ |  | -----------------------------------------
|Class A Common Stock, Par Value $.01 |  | New York Stock Exchange                  

Securities registered pursuant to Section 12 (g) of the Act:None

---

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

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o

There
were 141,432,737 shares of Class A Common Stock, $.01 par value, outstanding as of February 14, 2002. The aggregate market value of the Class A Common Stock of
the Company held by non-affiliates on February 14, 2002 was approximately $5,900,000,000. This calculation does not include the value of any of the outstanding shares of
Class P, Class T or Class V Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

---

---

---



TABLE OF CONTENTS

|PART I  
|--------
|Item 1. 
|Item 2. 
|Item 3. 
|Item 4. 
|PART II 
|Item 5. 
|Item 6. 
|Item 7. 
|Item 7A.
|Item 8. 
|Item 9. 
|PART III
|Item 10.
|Item 11.
|Item 12.
|Item 13.
|PART IV 
|Item 14.

1

---



Forward-Looking Statements

All statements, other than statements of historical fact, contained within this report constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases you can identify forward-looking statements by terms such as "may," "intend," "might," "will," "should," "could," "would," "expect," "believe,"
"estimate," "potential," "expect," "plan" or the negative of these terms, and similar expressions intended to identify forward-looking statements.

These
forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Also, these forward-looking
statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do
not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this report.

Factors
that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, those described in "Risk
Factors" or in the documents incorporated by reference in this report.

2

---

PART I

ITEM 1. Business

Univision Communications Inc., together with its wholly owned subsidiaries (the "Company"), is the leading Spanish-language media company in the United
States with operations during 2001 in three business segments:



At
December 31, 2001, the Company had an approximate 32% interest in Entravision Communications Corporation ("Entravision"), a diversified Spanish-language media company that owns
and operates the majority of the Company's non-owned full-power broadcast affiliates. Entravision operates in 21 of the nation's top 50 Hispanic markets and owns 35 of the
Company's affiliated stations. The Company also holds a 50% interest in Mexico-based Disa Records, the second largest Spanish-language record label in the world, specializing in regional Mexican
music.

The
Company is a Delaware corporation, and its principal executive offices are located at 1999 Avenue of the Stars, Suite 3050, Los Angeles, California 90067, telephone number
(310) 556-7676. The Company's stock is traded on the New York Stock Exchange (UVN) and is part of the Standard & Poor's S&P 500 Index. The terms "Company," "we," "us" and
"our" refer collectively to the parent company and the subsidiaries through which our various business are conducted, unless the context otherwise requires.

Recent Developments

On December 7, 2000, the Company announced that it would acquire from USA Broadcasting, Inc. for $1.1 billion in cash, 13
full-power television stations, minority interests in four additional full-power television stations and Station Works, LLC, the master control operating system for the station
group. On June 12, 2001, the Company acquired the first three full-power stations, the Station Works facility, and the
minority ownership interests in the four additional full-power stations for $294,069,000 in cash. On August 21, 2001, the Company acquired the remaining 10 full-power
stations through the issuance of non-interest bearing notes aggregating approximately $808,000,000. The Company made a payment under the notes of approximately $216,000,000 in
September 2001 and made the remaining payment of approximately $592,000,000 in January 2002 with funds from its existing credit facility and proceeds received from the issuance of
mandatory convertible preferred stock to Grupo Televisa, S.A. and its affiliates ("Televisa"). During the interim period between the acquisition of the stations in August 2001 and the
respective maturity dates for the notes, the Company continued to operate these stations as English-language Home Shopping Network ("HSN") channels as required by the purchase agreement with USA
Broadcasting. Each station entered into an affiliation agreement with HSN (an affiliate of USA Broadcasting) and agreed to broadcast up to 24-hours per day of HSN programming until
October 1, 2001 with respect to two New York stations and until January 14, 2002 with respect to the Boston, Chicago, Cleveland, Houston, Los Angeles, Orlando, Philadelphia and Tampa
stations. In August 2001, the Company also acquired the majority interest in the Washington, D.C. station (in which it had previously acquired the minority interest from USA Broadcasting) for
an additional $59,000,000 through a

3

---

bankruptcy court proceeding. At December 31, 2001, the Company had a minority interest of $69,875,000 in the San Francisco, Denver and St. Louis stations, which were part of the USA
Broadcasting acquisition. In January 2002, the Company purchased the majority interest in the San Francisco station for approximately $41,000,000. The majority of the stations acquired from USA
Broadcasting are part of the TeleFutura Television Group.

In
June 2001, the Company purchased for $26,000,000 an approximate 20% non-voting preferred stock equity interest in Equity Broadcasting Corporation ("Equity
Broadcasting"), which is the ninth-largest broadcasting corporation in the United States with more than 40 full-power and 60 low-power television stations. In addition, in
September 2001, the Company purchased an additional 4.9% of Equity Broadcasting's Class A common stock for approximately $2,500,000. This investment is accounted for under the cost
method. On September 28, 2001, the Company loaned Equity Broadcasting approximately $20,000,000, which created an interest-bearing note receivable due to the Company from Equity Broadcasting.
In December 2001, the Company acquired two full-power and four low-power television stations from Equity Broadcasting, and the entire note receivable plus interest was applied to the purchase
price.

Also,
in June 2001, Univision Music, Inc. acquired a 50% interest in Monterrey, Mexico-based Disa Records, S.A. de C.V. ("Disa") from the Chavez family. Disa Records is the
second-largest independent Spanish-language record label in the world; it represents more than 50 artists and owns a large catalog of more than 1,000 master recordings of Mexican regional music. The
Chavez family maintains a 50% ownership in Disa Records and continues to manage the business. The Company has a call right and the Chavez family has a put right starting in June 2006, which
will require the Company to purchase the remaining 50% interest for $75,000,000, subject to certain upward adjustments.

On
October 11, 2001, the Company entered into an asset purchase agreement to acquire stations in Killeen and El Paso, Texas from White Knight Broadcasting for approximately
$30,000,000. Concurrently, the Company assigned its right to acquire the El Paso station to Entravision for approximately $18,000,000. In January 2002, the Company acquired the Killeen station
for $12,000,000, and Entravision acquired the El Paso station.

On
December 19, 2001, the Company, Televisa and Corporacion Venezolana de Television, C.A. (VENEVISION), a leading international producer of Spanish-language television and
Venezuela's leading television network, together with Venevision Investments LLC and its affiliates ("Venevision"), reached a multi-faceted global alliance. Under this comprehensive agreement,
Univision Network, TeleFutura Network and Galavisión will now have exclusive U.S. broadcast rights to Televisa and Venevision programming (with certain limited exceptions), the most
popular Spanish-language programming in the world, through 2017. As part of the agreements, Televisa made an equity investment in the Company of $375,000,000 and received Class B Preferred
Stock that automatically converted, on February 25, 2002, into 10,594,500 shares, based on an arms-length negotiated 6% discount, of the Company's Class A Common Stock upon expiration of
the waiting period under the Hart-Scott-Rodino Act. The parties also agreed to amend the Company's charter documents to eliminate or modify certain governance rights held by the directors
elected by Televisa and Venevision and to eliminate the right of holders of the Company's Class T Common Stock and Class V Common Stock to elect additional directors upon a change in
federal law increasing the percentage that non-U.S. citizens may own in companies that own television stations. In connection with the changes to the Company's charter documents, the
Company issued warrants to both Televisa and Venevision to purchase in the aggregate, in the case of Televisa, 9,000,000 warrants to acquire 6,274,864 additional shares of Class A Common Stock
and 2,725,136 additional shares of Class T Stock and, in the case of Venevision, 2,800,000 warrants to acquire 74,864 additional shares of Class A Common Stock and 2,725,136
Class V Stock. The warrants were issued in exchange for the value of certain rights previously held by the holders of shares of Class T and Class V Stock. The exercise price of
the warrants is $38.261 per share. At December 31, 2001, Televisa and Venevision owned a total of 9,002,000 and 30,237,700 warrants, respectively, which includes warrants issued in
December 1992. The 1992 warrants are

4

---

exercisable for Class T and Class V Common Stock at an exercise price of $0.0322 per share. In addition, the Company agreed to acquire Televisa's music recording company, Fonovisa Music
Group ("Fonovisa"), North America's premier Latin music label, for 6 million shares of Class A Common Stock and warrants to purchase 100,000 shares of Class A Common Stock
at an exercise price of $38.261 per share.

The
Company also agreed to form a venture with Televisa to engage in the exploitation in the U.S. of Televisa's pay television channels (but excluding general entertainment
channels and novelas). Televisa's existing channels include music video channels and movie channels.

Effective
February 1, 2002, the Company entered into a time brokerage agreement with Raycom Media, Inc. ("Raycom") to manage its two stations in Puerto Rico. Under the
agreement, the Company will program WLII-TV 11 in San Juan and WSUR-TV 9 in Ponce, collectively branded as "Teleonce" on behalf of Raycom. The new programming under the
agreement will also be telecast through WORA-TV 5 in Mayaguez, the long-term western affiliate to Teleonce. The management fee to the Company will be approximately $500,000 per
year. In addition, the Company entered into an option agreement that expires on December 31, 2004 to acquire these stations for $190,000,000. The purchase price will be reduced if certain
earnings targets are met during the period prior to the expiration of the option agreement.

Broadcasting

The Company's principal business segment is broadcasting, which consists of the Univision, TeleFutura and Galavisión television networks, the
Univision Television Group ("UTG") owned-and-operated broadcast television stations (collectively, the "UTG O&Os"), the TeleFutura Television Group ("TTG")
owned-and-operated broadcast television stations (collectively, the "TTG O&Os") and the Company's television production business.

Univision Network, Univision Television Group and Univision Network Affiliates

Univision Network.The Univision Network is the leading Spanish-language television network in the U.S., reaching more than
97% of all U.S. "Hispanic Households" (those with a head of household who is of Hispanic descent or origin, regardless of the language spoken in the household). It is the most watched television
network (English or Spanish-language) among Hispanic Households and had a 79% average share in prime time of the U.S. Spanish-language network television audience in the 2000-2001 season.
From its operations center in Miami, the Univision Network provides its broadcast and cable affiliates with 24 hours per day of Spanish-language programming with a prime time schedule of
substantially all first-run programming (i.e., no re-runs) throughout the year. The operations center also provides production
facilities for Univision Network's news and entertainment programming.

Univision Television Group.At December 31, 2001, UTG owned-and-operated 16
full-power (15 of which are affiliated with Univision Network) and six low-power stations, representing approximately 73% of its Network broadcast distribution. Fifteen of the
UTG O&Os broadcast Univision Network's programming, and most produce local news and other programming of local importance, cover special events and may acquire programs from other suppliers. These
full-power UTG O&Os are located in 11 of the top 15 designated market areas ("DMAs") in terms of numbers of Hispanic HouseholdsLos Angeles, New York, Miami, Houston, Chicago,
Dallas, San Francisco, San Antonio, Phoenix, Fresno and Sacramento. According to the November 2001 Nielsen Station Index ("NSI") Survey, which measures local station viewing of all households
in a specific DMA, three of the full-power UTG O&Os (located in Fresno, Houston and Miami) rank as the top station in their respective DMAs, English- or Spanish-language, based on total
audience rank of adults 18 to 49 years of age. UTG's Bakersfield full-power station is a UPN affiliate. UTG's six low-power, Spanish-language television stations serve
the Austin, Bakersfield, Fort Worth, Phoenix, Santa Rosa and Tucson DMAs. As of December 31, 2001, Univision Network had 16 full-power and 27 low-power television
station affiliates ("UTG Affiliated Stations") and

5

---

approximately 1,352 cable affiliates. As of December 31, 2001, each of the UTG O&Os and its full-power affiliated stations ranked first in Spanish-language television viewership in
its DMA.

Univision
Network produces and acquires programs, makes those programs available to its affiliates, including the UTG O&Os, and sells network advertising. The full-power UTG
O&Os and full-power Univision Network affiliated stations together reach approximately 7.8 million, or approximately 77%, of Hispanic Households. The low-power UTG O&Os
and low-power Univision Network affiliated stations (including translators) together reach approximately .9 million, or approximately 9%, of Hispanic Households. The cable
affiliates and direct broadcast systems reach approximately 1.2 million, or approximately 11%, of Hispanic Households.

Affiliation Agreements.Each of Univision Network's affiliates has the right to preempt
(i.e., to decline to broadcast at all or at the time scheduled by Univision Network), without prior Univision Network permission, any and all Univision
Network programming that it deems unsatisfactory, unsuitable or contrary to the public interest or to substitute programming it believes is of greater local interest, provided that Univision Network
consents to any rescheduling of preempted programming.

Each
affiliation agreement grants Univision Network's affiliate the right of first refusal to Univision Network's entire program schedule.    The affiliation agreements
generally provide that 50% of all advertising time be retained by Univision Network for Univision Network advertising and the other 50% of the time be allocated to Univision Network's affiliate for
local and national spot advertising. However, this allocation may be modified at Univision Network's discretion.

The
UTG Affiliated Stations retain 100% of all local and national advertising revenues, and Univision Network retains 100% of network advertising revenues.

Univision
Network from time to time may enter into affiliation agreements with additional stations in new DMAs based upon its perception of the market for Spanish-language television and
the Hispanic market in the station's DMA.

Cable Affiliates.Univision Network has historically used cable affiliates to reach communities that could not support a
broadcast affiliate because of the relatively small number of Hispanic Households. Cable affiliation agreements may cover an individual system operator or a multiple system operator. Cable affiliation
agreements are for the most part non-exclusive, thereby giving Univision Network the right to license all forms of distribution in cable markets. Cable affiliates generally receive
Univision Network's programming for a fee based on the number of subscribers. Univision Network retains 100% of the allocation of network advertising revenues attributable to cable affiliates and
provides certain cable affiliates with two minutes of local advertising time per hour. Cable affiliates retain 100% of local and national advertising revenues.

Affiliate Rank.According to the November 2001 Nielsen Hispanic Station Index ("NHSI") and the November 2001
NSI, 11 of the 15 full-power UTG O&Os (Los Angeles, New York, Miami, Houston, Chicago, Dallas/Ft. Worth, San Francisco, San Antonio, Phoenix, Fresno and Sacramento) ranked first among
Spanish-language television stations in their respective DMAs. No data was available for the other four full-power UTG O&Os (Philadelphia, Atlanta, Killeen/Waco and Cleveland), which
became
Univision Network affiliates in January 2002. In addition, 15 of the 16 full-power UTG Affiliated Stations (McAllen/Brownsville, Albuquerque, Denver, El Paso, Tampa, Orlando,
Boston, Las Vegas, Corpus Christi, Salines/Monterey, Hartford/New Haven, Laredo, Yuma/El Centro, Santa Barbara-Santa Maria-San Luis Obisbo, Odessa/Midland) also ranked first among
Spanish-language television stations in their respective DMAs. No data was available for the Portland affiliate, which became a Univision Network affiliate in January 2002.

TeleFutura Network and TeleFutura Television Group

TeleFutura Network.On January 14, 2002, the Company launched a new 24-hour general-interest Spanish-
language broadcast network, TeleFutura, to meet the diverse preferences of the multi-faceted U.S.

6

---

Hispanic community. TeleFutura Network's signal covers approximately 72% of all U.S. Hispanic households through TeleFutura O&Os (14 full-power and 12 low-power television
stations) and TeleFutura Network's affiliates, 1 full-power and 17 low-power stations ("TTG Affiliated Stations"). The TeleFutura Network is designed to counter-program
traditional Spanish-language lineups and draw additional viewers to Spanish-language television.

TeleFutura Television Group.The TTG O&Os consist of 14 full-power and 12 low-power Spanish-language
television stations, representing approximately 85% of the TeleFutura Network broadcast distribution. The TTG O&Os include full-power stations in 8 of the top 10 U.S. Hispanic markets. The
14 full-power TTG O&Os are located in Los Angeles, New York (2 stations), Miami, Houston, Chicago, Dallas, San Francisco, Phoenix, Washington, Tampa, Orlando, Boston and Tucson. The 12
low-power TTG O&Os serve the Hartford, Lompoc, Paso Robles, Philadelphia, Phoenix, San Antonio, San Luis Obispo, Santa Barbara, Santa Maria and Tucson markets. In addition, the TeleFutura
Network expects to enter into affiliation agreements with broadcast television stations and cable television systems to provide TeleFutura Network programming.

After
being acquired from USA Broadcasting in August 2001, eight of the 14 full-power TTG O&Os,i.e., the Los Angeles,
New York (2 stations), Houston, Chicago, Tampa, Orlando and Boston stations were operated as English-language Home Shopping Network ("HSN") channels as required by the terms of the Company's
acquisition agreement with USA Broadcasting. See "Recent Developments" and Note 14 to Notes to Consolidated Financial Statements.

Galavisión

The Company also owns Galavisión Network ("Galavisión"), the leading U.S. Spanish-language general entertainment basic cable
television network, which reaches approximately 5 million Hispanic cable and direct broadcast system subscribers. According to Nielsen Media Research ("Nielsen"), Galavisión
reaches over 75% of all Hispanic Households that subscribe to cable and direct broadcast systems. Galavisión's programming line-up includes sports, music, bicultural shows,
educational children's programming, news,novelas, variety, monthly specials and movies.

The
Company programs its three networks so that Galavisión, Univision Network and TeleFutura Network generally will not run the same type of program simultaneously.

Music Recording and Publishing

In April 2001, the Company launched Univision Music Group, its music publishing and recording division, which is led by music industry veteran,
José Behar, and is headquartered in Los Angeles. Univision Music Group consists of the Company's formation of a wholly-owned subsidiary, Univision Music, Inc., and its
majority-owned subsidiary Univision Music LLC. Univision Music, Inc. owns 98% of Univision Music LLC, 1% is owned by the Company and 1% is owned by Diara, Inc., which is wholly-owned by
José Behar. Under the terms of the operating agreement for Univision Music LLC, Diara's ownership interest escalates to 20% by the end of the fifth year of operations. In 2006, Diara
has a put right and Univision Music, Inc. has a call right that would require Univision Music, Inc. to purchase all of Diara's interest in Univision Music LLC. See Note 3 to Notes
to Consolidated Financial Statements.

Also,
in June 2001, Univision Music, Inc. acquired a 50% interest in Monterrey, Mexico-based Disa Records, S.A. de C.V. ("Disa") from the Chavez family. Disa Records is the
second-largest independent Spanish-language record label in the world; it represents more than 50 artists and owns a large catalog of more than 1,000 master recordings of Mexican regional music. The
Chavez family maintains a 50% ownership in Disa Records and continues to manage the business. The Company has a call right and the Chavez family has a put right starting in June 2006, that will
require the Company to purchase the remaining 50% interest for $75,000,000, subject to certain upward adjustments.

In
December 2001, as part of the transaction with Televisa (see "Recent Developments"), the Company agreed to acquire Fonovisa, Televisa's Latin music company.
Fonovisa has approximately 120

7

---

recording artists on its roster and owns a substantial record and music publishing catalog. The Company expects the acquisition to be completed in the second quarter of 2002. The Company and
Mr. Behar are re-negotiating his employment contract to take into account the Fonovisa agreement.

Upon
completion of the Fonovisa acquisition, Univision Music Group will have three recording labelsUnivision Music, Disa and Fonovisaand is expected to be among
the leaders in record sales of Latin music in the U.S. and Puerto Rico.

The
Univision Music label signed several young Latin artists in 2001, some of whom already have achieved great success. A number of the first releases in 2001 shot almost immediately to
top positions onBillboard Magazine'sLatin chartsan event that usually takes new artists and their labels several years and multiple
albums to accomplish. With its two current labels, Univision Music and Disa, Univision Music Group has recording contracts with several artists whose recordings have achieved gold record status
(100,000 units in the Spanish-music industry).

Internet

Through its online subsidiary, Univision Online, Inc., the Company develops, publishes and distributes content for online services intended to appeal to a
broad consumer interest in entertainment, sports, recreation, travel, news, and personal finance. The Company's Internet portal,Univision.com, is
directed at Hispanics in the United States, Mexico and Latin America. Working from offices in New York, Miami, Los Angeles and Mexico City, Univision Online is producing a substantial percentage of
its own Spanish-language programming content, including streaming video featuring stars of Univision Network, TeleFutura Network, Galavisión and the sports and entertainment fields. The
Company launched its Internet operations in the third quarter of 2000 and has significantly expanded its Internet business in 2001. In its first full year of operations, Univision.combecame the #1
Spanish-language website for U.S. Hispanics based on Nielsen Media Research in May/June 2001.

Use
of the Internet by U.S. Hispanics is climbing rapidly. In 1998, fewer than 10% of U.S. Hispanic households had Internet access. By 2001, the percentage had more than tripled to
32.3%, and it is projected to continue to increase rapidly in the next two years. In 2001, Spanish-speaking and bilingual Internet users in the U.S. visited Univision.comthree times more often than
they did Yahoo! En Español and four times more often than they did Terra, based on Nielsen
Media Research conducted in May/June 2001. Also in 2001, page views grew by a 10.8% monthly compounded rate based on 2001Univision.comAudit
Bureau Circulation Interactive ("ABCi") audits. As a result of these factors, Univision Online attracted more than 45 advertisers from major consumer product companies in 2001, including firms buying
advertising across all of the Company's media platforms.

During
2001, Univision Online entered into various strategic content and marketing alliances, including the following:



8

---



The Hispanic Audience in the United States

Management believes that Spanish-language television, in general, and the Company, in particular, have benefited and will continue to benefit from a number of
factors, including projected Hispanic population growth, high Spanish-language retention among Hispanics, increasing Hispanic buying power and greater advertiser spending on Spanish-language media.
Unless otherwise noted, the research data provided below, pertaining to the Hispanic audience in the U.S., was derived from "The Hispanic Consumer Market Report in 1999 and Forecasts to 2020:
Standard & Poor's DRI, 2000."

Hispanic Population Growth and Concentration.The Hispanic population of the U.S. increased by 58% between 1990 and 2000 to
35.3 million according to the 2000 U.S. Census. This rate of growth was more than 4 times that of the total U.S. population and approximately 7 times that of the U.S. non-Hispanic
population. While Hispanics accounted for 12.5% of the U.S. population in 2000, the U.S. Census Bureau projects that the Hispanic percentage will double to approximately 25% of the total U.S.
population by the middle of this century, confirming a fundamental shift in the ethnic makeup of the country. According to the 2000 U.S. Census, Hispanics accounted for 27% of the population of New
York City and 46.5% of Los Angeles, the two cities with the largest total and the largest Hispanic populations. Approximately 50% of all Hispanics are located in the seven U.S. cities with the largest
Hispanic populations, and the Company, through the UTG O&Os and the TTG O&Os, owns two stations in six of these cities, and three stations in the New York market.

Spanish-Language Use.Approximately 68% of all Hispanics, regardless of income or educational level, speak Spanish at home.
This percentage is expected to remain relatively constant through 2010. Consequently the number of Hispanics speaking Spanish in the home is expected to increase significantly in the foreseeable
future. As shown in the chart below, the number of Hispanics who speak Spanish in the home is expected to grow from 16.2 million in 1990 to 23.5 million in 2002 and
29.3 million in 2010. The Company believes that the strong Spanish-language retention among Hispanics indicates that the Spanish-language media has been and will continue to be an important
source of news, sports and entertainment for Hispanics.

Spanish Language Use

Hispanic Population in Millions

Source:
Standard & Poor's DRI

9

---



Greater Hispanic Buying Power.The Hispanic population represents estimated total consumer expenditures of
$523 billion in 2002 (7.7% of the total U.S. consumer expenditures), an increase of 143% since 1990. Hispanics are expected to account for $1 trillion of U.S. consumer spending (9.5% of the
U.S. total consumer expenditures) by 2010, far outpacing the expected growth in total U.S. consumer expenditures.

In
addition to the anticipated growth of the Hispanic population, the Hispanic audience has several other characteristics that the Company believes make it attractive to advertisers. The
Company believes the larger size (averaging 3.5 persons per household compared to the general public's average of 2.6 persons per household) and younger age of Hispanic Households leads Hispanics to
spend more per household on many categories of goods. The average Hispanic Household spends 49% more per year on food at home, 24% more on clothing, 88% more on footwear, 19% more on phone services,
and 52% more on laundry and household cleaning products than the average non-Hispanic household. Hispanics are expected to continue to account for a disproportionate share of growth in
spending nationwide in many important consumer categories as the Hispanic population and its disposable income continue to grow. These factors make Hispanics an attractive target audience for many
major U.S. advertisers.

Increased Spanish-Language Advertising.According to "Hispanic Business" magazine, $2.22 billion of total advertising
expenditures were directed towards Spanish-language media in 2001, representing a five-year cumulative growth rate of 13.1%. Of these amounts, approximately 58.8% of the
$2.22 billion in advertising expenditures in 2001 targeting Hispanics was directed towards Spanish-language television advertising. The Company believes that major advertisers have found that
Spanish-language television advertising is a more cost-effective means to target the growing Hispanic audience than English-language broadcast media. See "Advertising."

Ratings

During the last five years, Univision Network has consistently ranked first in prime time television among all Hispanic adults. In addition, Univision Network has
successfully increased its audience ratings compared to both the Spanish-language and the English-language broadcast networks. Spanish-language television prime time is from 7 p.m. to
11 p.m., Eastern and Pacific Standard Times, Sunday through Saturday. English-language television prime time is from 8 p.m. to 11 p.m., Eastern and Pacific Standard Times, Monday
through Saturday and 7 p.m. to 11 p.m., Eastern and Pacific Standard Times, Sunday. The following table shows that Univision Network's prime time audience ratings, Sunday
through Saturday during the last five years, among Hispanic adults aged 18 to 49, the age segment most targeted by advertisers, is considerably higher than the other networks:

Prime Time Ratings Among Hispanic Adults Aged 18 to 49

Network

1997

1998

1999

2000

2001Univision

10.1

10.2

11.0

9.7

9.8ABC

2.3

2.0

2.1

2.2

1.8CBS

1.5

1.3

1.3

1.3

1.4FOX

2.9

2.7

2.5

2.4

2.4NBC

2.5

2.3

2.2

2.1

1.9Telemundo

1.6

1.5

1.4

2.5

2.5Univision share

48.3
%
51.0
%
53.7
%
48.0
%
49.5
%


---

Source:
Nielsen Hispanic Television Index ("NHTI")

In
addition, Univision Network has consistently had between 95% and 100% of the 20 most widely watched programs among all Hispanic Households during the past five years.

10

---

Program License Agreements

Through the Program License Agreements (amended and restated as of December 19, 2001), the Company has the exclusive right until December 2017 to
air in the U.S. all Spanish-language programming produced by or for Televisa and Venevision (with certain limited exceptions). Televisa, which is the world's largest producer of Spanish-language
television programs, is the leading media and entertainment company in Mexico with an approximate 73% share of Mexico's viewing audience during 2001. Venevision is Venezuela's leading television
network with an approximate 48% share of its viewing audience during 2001. The Program License Agreements provide Univision Network, TeleFutura Network and Galavisión with access to
programming to fill up to 100% of their daily schedules. Televisa and Venevision programming represented approximately 36% and 11%, respectively, of Univision Network's non-repeat
broadcast hours in 2001.

The
Program License Agreements allow the Company long-term access to Televisa and Venevision programs and the ability to terminate unsuccessful programs and replace them with
other Televisa and Venevision programs without paying for the episodes that are not broadcast. Accordingly, the Company has more programs available to it and greater programming flexibility than any
of its competitors. This program availability and flexibility permits the Company to adjust programming on all its networks to best meet the tastes of its viewers.

Televisa
and Venevision programs available to the Company are defined under the Program License Agreements as all programs produced by or for each of them in the Spanish-language or with
Spanish subtitles other than programs for which they do not own U.S. broadcast rights or as to which third parties have a right to a portion of the revenues from U.S. broadcasts
("Co-produced Programs"). Televisa and Venevision have also agreed through their affiliates to use their best efforts to coordinate with the Company to permit the Company to acquire U.S.
Spanish-language rights to certain Co-produced Programs and to special events produced by others, sporting events, political conventions, election coverage, parades, pageants and variety
shows.

In
consideration of access to the programming of Televisa and Venevision, the Company pays Televisa and Venevision aggregate royalties based upon time sales of Univision Network, UTG and
Galavisión from broadcasting, including trade, television subscription and barter revenues, less advertising commissions, certain special event revenues, music license fees, outside
affiliate compensation, time sales relating to advertising sold to Televisa and provided to Venevision and taxes other than withholding taxes ("Combined Net Time Sales"). Aggregate royalties to
Televisa and Venevision are 15% of Combined Net Time Sales. Under terms of the expanded programming agreement, the Company will pay Televisa an additional fee of 3% on incremental Combined Net Time
Sales of Univision Network, UTG and Galavisión over and above 2001 amounts, as well as a 12% royalty fee on TeleFutura Net Time Sales (calculated in a manner similar to Combined Net
Time Sales), subject to certain adjustments. TeleFutura's royalty fee to Televisa for 2002 will be zero. In 2003, the minimum royalty fee will be $5,000,000, increasing by $2,500,000 per year
thereafter, subject to a maximum annual minimum royalty fee of $12,500,000, resulting in a minimum royalty fee of $7,500,000 in 2004, $10,000,000 in 2005 and $12,500,000 for the years 2006 through
2017. Venevision will be paid up to 3% of additional royalty fees on incremental Combined Net Time Sales over a 2001 base amount on Univision Network, UTG and Galavisión if Venevision
programs contribute 30% or more of Univision Network and Galavisión's ratings. In addition, Venevision will receive royalty fees based on the ratings delivered by the Venevision
programs broadcast on TeleFutura. Other than Venevision programs broadcast on TeleFutura, the Company is obligated to pay such aggregate royalties to Televisa and Venevision each year throughout the
term regardless of the amount of Televisa and Venevision programming used by the Company.

Additionally,
pursuant to the Amended and Restated Program License Agreements, Televisa and Venevision have the right to use, without charge, advertising time that the Company does not
sell to advertisers or that the Company does not use. There are limitations on the ability of Televisa and

11

---

Venevision to use such time for telemarketing products, and such time may be preempted to the extent sold to a paying advertiser. In addition, Venevision will receive $5,000,000 per year of free
non-preemptable advertising, and Televisa will purchase $5,000,000 of non-preemptable advertising per year for its own use. Each of Televisa and Venevision may also purchase
for its own use non-preemptable advertising time at the lowest spot rate for the applicable time period. Further, the Company will purchase $5,000,000 per year in
non-preemptable advertising from Televisa and receive $5,000,000 per year in non-preemptable advertising from Venevision. The Company will account for this arrangement as a net
barter transaction, with no effect on revenues, expenses, EBITDA or net income on an annual basis. During 2001, Televisa and Venevision did not purchase non-preemptable time from the
Company, and the Company did not purchase or receive any advertising from Televisa or Venevision.

The
Company has a right to license Televisa and Venevision programs in Puerto Rico commencing in 2002. Before May 2005, the Company will have a right of first refusal on their
programs (subject to preexisting commitments) and will pay a program performance fee based on the ratings delivered by the licensed programs. The Company will pay Televisa and Venevision an annual
minimum license fee for certain programs in the aggregate of $2,400,000 subject to reductions due to program cancellation. After 2005, if the Company has exercised its option to acquire certain
stations and networks in Puerto Rico, the Company's rights will be exclusive in a manner similar to the overall Program License Agreements, and the Company will pay Televisa 12% of Puerto Rico net
time sales (calculated in a manner similar to Combined Net Time Sales) and Venevision the greater of 6% of Puerto Rico net time sales and the amount that a program performance fee based on ratings of
Venevision programs would produce (but not more than 12% of Puerto Rico net time sales) on programs licensed by it.

The
Program License Agreements are between the Company, on the one hand, and affiliates of Televisa and Venevision, on the other hand. The performance of Televisa's and Venevision's
affiliates under the Program License Agreements has been unconditionally guaranteed by Grupo Televisa, S.A. and Corporacion Venezolana de Television, C.A. (VENEVISION), respectively. Pursuant to their
respective guarantees, Televisa has agreed to produce each year for the Company's use at least 8,531 hours of programs, which will be representative of the quality of programs produced by Televisa
during calendar year 2000, and Corporacion Venezolana de Television, C.A. (VENEVISION) has agreed to use commercially reasonable efforts to produce or acquire programs for the Company's use at least
to the same extent in terms of quality and quantity as in calendar years 1989, 1990 and 1991.

Advertising

During the last three years, no single advertiser has accounted for more than 5% of the Company's gross advertising revenues.

None
of the UTG O&Os currently receives its proportionate share of advertising revenues commensurate with its audience share. The Company focuses much of its sales efforts on
demonstrating to advertisers its ability to reach the Hispanic audience in order to narrow the gap between its share of advertising revenues and its audience share.

The
Company's advertising revenues are derived from network advertising, national spot advertising and local advertising. The Company's network advertising revenues come from diverse
industries, with advertising for food and beverages, personal care products, automobiles, other household goods and telephone services representing the majority of network advertising revenues.
National spot advertising represents time sold to national and regional advertisers based outside a station's DMA and is the means by which most new national and regional advertisers begin marketing
to Hispanics. National spot advertising primarily comes from new advertisers wishing to test a market and from regional retailers and manufacturers without national distribution. To a lesser degree,
national spot advertising comes from advertisers wanting to enhance network advertising in a given market. Local advertising revenues are

12

---

generated from both local merchants and service providers and regional and national businesses and advertising agencies located in a particular DMA.

Marketing

The Company's Univision Network, TeleFutura Network and its owned-and-operated stations' account executives are divided into three groups:
network sales; national spot sales; and local sales. The account executives responsible for network sales target and negotiate with accounts that advertise nationally. The national spot sales force
represents each broadcast affiliate for all sales placed from outside its DMA. The local sales force represents the owned-and-operated stations for all sales placed from within
its DMA.

In
addition, Univision Network, TeleFutura Network and the owned-and-operated stations' sales departments utilize research, including both ratings and demographic
information, to negotiate sales contracts as well as target major national advertisers that are not purchasing advertising time or who are under-purchasing advertising time on Spanish-language
television.

Galavisión
sells advertising time and also utilizes a cable affiliate relations sales group that is responsible for generating cable subscriber fee revenues for the
Company.

Univision
Online, Inc. launched an Internet portal directed at Hispanics in the United States, Mexico and Latin America in 2000. Univision Online, Inc. generates
advertising revenues primarily from large national advertisers in the United States and is represented by a separate sales force. Univison Online, Inc. recognizes revenues when served on its
portal.

Univision
Music Group, which was formed by the Company in 2001, generates revenues from its music recording and publishing businesses. The sales, distribution and manufacturing of
products are provided by Universal Music & Video Distribution, Corp. on behalf of Univision Music Group.

Competition

The broadcasting and cable business is highly competitive. Competition for advertising revenues is based on the size of the market that the particular medium can
reach, the cost of such advertising and the effectiveness of such medium.

The
Company competes for viewers and revenues with other Spanish-language and English-language television stations and networks, including the four principal English-language television
networks, ABC, CBS, NBC and Fox, and in certain cities, UPN and WB. Certain of these English-language networks and others have begun producing Spanish-language programming and simulcasting certain
programming in English and Spanish. Several cable broadcasters have recently commenced or announced their intention to commence Spanish-language services as well. The Company also competes for viewers
and revenues with independent television stations, other video media, suppliers of cable television programs, direct broadcast systems, newspapers, magazines, radio and other forms of entertainment
and advertising. The Company's affiliates located near the Mexican border also compete for viewers with television stations operated in Mexico, many of which are affiliated with a Televisa network and
owned by Televisa.

Telemundo
is the Company's largest competitor that broadcasts Spanish-language television programming. As of December 31, 2001, Telemundo reached approximately 88% of all Hispanic
Households. In most of the Company's DMAs, the Company's affiliates compete directly with a station owned by or affiliated with Telemundo. In October 2001, NBC, a division of General Electric,
announced that it had reached an agreement for the acquisition of 100% of the equity of Telemundo Communications Group, Inc., which owns and operates the Telemundo network. The agreement is
subject to customary regulatory approvals, and as of March 13, 2002, the acquisition by NBC had not been completed.

13

---

The
rules and policies of the Federal Communications Commission ("FCC") encourage increased competition among different electronic communications media. As a result of rapidly developing
technology, the Company may experience increased competition from other free or pay systems by which information and entertainment are delivered to consumers, such as direct broadcast satellite and
video dial tone services.

Univision
Online competes for advertising revenues with numerous direct competitors, including Web-based portals and individual Web sites providing content, commerce,
community and similar features, and with other media companies, such as those with newspaper or magazine publications, radio stations and broadcast stations or networks.

Univision
Music Group competes with other music labels for Latin recording artists. Its major competitors are Sony Discos, Fonovisa (see Note 3 to Notes to Consolidated Financial
Statements), WEA Latina, BMG Latin and EMI Latin.

Employees

As of December 31, 2001, the Company employed approximately 2,440 full-time employees. At December 31, 2001, approximately 15.1% of the
Company's employees, located in Chicago, Fresno, Los Angeles, San Francisco and New York were represented by unions. The Company has collective bargaining agreements covering the union employees at
five of the UTG O&Os. Those agreements have varying expiration dates during 2002, 2003 and 2004. Management believes that its relations with its non-union and union employees, as well as
with the union representatives, are good.

Federal Regulation and New Technologies

The ownership, operation and sale of TV stations, including those licensed to subsidiaries of the Company, are subject to the jurisdiction of the FCC under the
Communications Act of 1934, as amended (the "Communications Act"). FCC rules cover allotment of TV channels to particular communities; approval of station operating parameters; issuance, renewal,
revocation or modification of licenses; changes in the ownership or control of licensees; regulation of equipment; and the ownership, operation, and employment practices of TV stations. The FCC has
the power to impose penalties, including fines or license revocations, for violations of its rules.

Programming and Operation.The Communications Act requires broadcasters to serve the "public interest." Stations must
periodically document their presentation of programming responsive to local community problems, needs and interests. Complaints concerning programming may be considered by the FCC at any time.
Stations also must follow various laws and rules that regulate, among other things, political advertising, sponsorship identification, the advertisement of contests and lotteries, the quantity of
educational and informational programming directed to children, the amount and content of commercials in and adjacent to children's programming, the advertising of cigarettes or smokeless tobacco,
obscene and indecent broadcasts, and technical operations.

New Licenses.TV channels are allotted to particular communities. The FCC may change such allotments from time to time. The
FCC periodically accepts applications for authority to construct new TV stations on unused allotted channels. Auctions are held by the FCC if more than one party files an application for the same
unused allotment. A petition to deny a winning application must be resolved through FCC consideration of the applicant's qualifications and the application's compliance with FCC rules. The Company was
the high bidder in an auction for an unused allotted channel in Blanco, Texas. The Company's application was challenged by an unsuccessful competitor on technical grounds, and an FCC decision is
pending.

Assignments and Transfers.Assignment of a license or transfer of control of a broadcast licensee requires prior FCC consent.
An application seeking such consent must be filed with the FCC. Public notice

14

---

is provided of such filings, and interested parties may petition to deny such applications. The FCC considers the qualifications of the purchaser, the compliance of the transaction with rules, and
other factors in order to determine whether the public interest would be served by such change in ownership. An evidentiary hearing may be conducted if there are unresolved substantial and material
questions of fact.

License renewal.Broadcast licenses initially are issued for a period specified in the license. Broadcast licenses are
normally renewed for an eight-year term (subject to short-term renewals in certain circumstances). Licensees seeking renewal must file an application containing certain
required information. During the consideration of that application, interested parties may petition to deny the renewal application. The FCC will grant the renewal application and dismiss any
petitions to deny if it determines that the licensee meets statutory renewal standards based on a review of the preceding license term. Competing applications for the frequency licensed to the renewal
applicant may not be filed unless and until the FCC has determined that the incumbent is not qualified to continue to hold the license.

Ownership Restrictions.Complex FCC regulations limit the "attributable interests" that may be held by a single party. In
general, officers, directors, general partners and parties with the power to vote or control the vote of 5% or more of the outstanding voting power of a licensee are considered to hold an attributable
interest in that entity, although certain passive investors must have a 20% or greater voting interest to be considered to have an "attributable interest." Also, any party that holds a financial
interest (whether equity or debt) in excess of 33% of a licensee's total capital is "attributable" if such party is either a significant program supplier to the licensee or has another media interest
in the same market. In addition, a TV licensee that provides more than 15% of the programming of another station in the local market is considered to have an attributable interest in that station.

Detailed
FCC rules regulate the extent to which a party may have an attributable interest in more than one full-power TV station in the same area. Common ownership of
multiple TV stations is permitted where the stations are in different Nielsen DMAs, and common ownership of two TV stations in the same DMA is permitted where there is no Grade B contour overlap among
the stations, where a specified number of separately-owned full-power TV stations will remain after the combination is created, or where certain waiver criteria are met. A federal
appellate court recently found the FCC's rule establishing a national cap on the ownership of TV stations to be arbitrary, capricious and contrary to law and remanded the rule to the FCC for further
consideration. A party may have attributable interests in both TV and radio stations in the same local market. The specific number of such stations is governed by FCC rules, depending primarily on the
number of independent media voices in the market.

Alien Ownership.The Communications Act generally prohibits foreign parties from having a 20% or greater interest in a
licensee entity, or more than a 25% interest in the parent entity of a licensee. The Company believes that, as presently organized, it complies with the FCC's foreign ownership restrictions.

Network Affiliate Issues.FCC rules affect the network-affiliate relationship. Among other things, these rules require
network affiliation agreements to (i) prohibit networks from requiring affiliates to clear time previously scheduled for other use, (ii) permit an affiliate to preempt network programs
it believes are unsuitable for its audience, or (iii) permit affiliates to substitute programs believed to be of greater local or national importance programming for network programming. An FCC
proceeding to review certain of these rules remains outstanding. The FCC has waived its "spot sale rule" to permit the Company to represent its affiliates in the sale of non-network
advertising time.

Other Matters.The FCC has numerous other regulations and policies that affect its licensees. The FCC has adopted rules to
assist TV viewing by the physically handicapped. For example, a schedule establishes the date by which new programming must be closed captioned in order to assist viewing by the hearing impaired. All
new Spanish-language programming must be closed captioned by January 2010. Programming first exhibited prior to January 1, 1998 is subject to a different compliance schedule. The rules
contain certain exceptions, and waivers may be granted on a showing of undue burden.

15

---

Television
stations must make an election every third year to exercise either "must-carry" or "retransmission consent" rights in connection with local cable carriage.
Stations electing must-carry may require carriage on certain channels on cable systems within its market. Must carry rights are not absolute, however, and are dependent on a number of
factors, which may or may not be present in a particular case. Cable systems are prohibited from carrying the signals of stations electing retransmission consent until an agreement is negotiated with
the station. Under certain circumstances, the network non-duplication rule allows network affiliates to require that cable operators black out duplicative network programming carried on
more distant signals.

Advanced Television Technology.The FCC has adopted rules requiring a transition from analog to digital transmissions (DTV)
by 2006. The new DTV standard should allow better picture quality and/or the simultaneous transmission of multiple program or data streams by a TV station. A fee is due to the FCC if DTV is used to
provide subscription services to the public. The FCC has allotted to most full-power TV stations one additional channel for DTV. One TV station operated by the Company did not receive a
paired DTV channel.

At
some point an election will have to be made to retain either the additional or original channel at the conclusion of the transition. As part of the DTV transition, however, certain
existing television stations will be relocated, thus freeing the existing channels for other uses. As part of that plan, the FCC has required that the Company's application for a new television
station at Blanco, Texas, be amended to specify an alternative channel. The Company cannot predict whether it will be able to successfully amend its application or whether the FCC might waive or
modify its requirement with respect to the Blanco application.

The
FCC set May 1, 2002, as the deadline for initial DTV operations by all commercial TV stations. It has said it will grant extensions of that date for good cause. The FCC
presently plans for the DTV transition period to end by 2006. Congress, however, has required the FCC to grant an extension of that deadline under specific circumstances. Questions regarding cable
carriage of DTV signals are still largely unresolved.

The
FCC has acknowledged that DTV channel allotment may involve displacement of existing low-power TV stations, particularly in major television markets. Accordingly, the
Company's low-power broadcast affiliates may be materially adversely affected. The impact of the DTV transition upon the Company's low-power stations may be reduced because the
FCC has issued certificates of eligibility for Class A status for most of the Company's existing low-power stations. Class A stations are a new regulatory classification
recently mandated by Congress that have greater protection against displacement than low-power TV stations.

In
addition, it is not yet clear when and to what extent DTV will become available through the various media; whether and how TV broadcast stations will be able to avail themselves of or
profit by the transition to DTV; the extent of any potential interference; whether viewing audiences will make choices among services upon the basis of such differences; whether and how quickly the
viewing public will embrace the new digital TV sets; or to what extent the DTV standard will be compatible with the digital standards adopted by cable and other multi-channel video programming
services.

Direct Broadcast Satellite Systems.DBS systems provide programming on a subscription basis to consumers that have purchased
and installed a satellite signal receiving dish and associated decoder equipment. Federal laws and FCC rules regulate the rebroadcast of TV station signals by DBS operators. With certain exceptions,
DBS systems must carry, on request, all local full-power TV signals in DMAs in which the satellite carrier carries at least one local TV broadcast signal. All stations operated by the
Company made timely elections for DBS carriage, and the Company intends to obtain DBS carriage for each of its eligible stations.

16

---

Recent Developments, Proposed Legislation and Regulation.Congress and the FCC may in the future adopt new laws, regulations
and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation and ownership of the Company's broadcast properties. Such matters include, for example, equal
employment opportunities regulations, spectrum use fees, political advertising rates, standardized and enhanced public interest disclosure requirements and potential restrictions on the advertising of
certain products. Other matters that could affect the Company's broadcast properties include assignment by the FCC of channels for additional broadcast stations or wireless cable systems, as well as
technological innovations and developments generally affecting competition in the mass communications industry.

The
foregoing does not purport to be a complete summary of all of the provisions of the Communications Act, or of the regulations and policies of the FCC thereunder. Proposals for
additional or revised regulations and requirements are pending before, and are considered by, Congress and federal regulatory agencies from time to time. Management is unable at this time to predict
the outcome of any of the pending FCC rulemaking proceedings referenced above, the outcome of any reconsideration or appellate proceedings concerning any changes in FCC rules or policies noted above,
the possible outcome of any proposed or pending Congressional legislation, or the impact of any of those changes on the Company's broadcast operations.

17

---



RISK FACTORS

You should carefully consider the following discussion of risks, and the other information included or incorporated by reference in this report in evaluating the
Company and our business. The risks described below are not the only ones facing the Company. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair
our business operations. In assessing these risks, you should also refer to the other information contained or incorporated by reference in this report, including our financial statements and related
notes.

Risks Factors Relating to our Company

Cancellations or reductions of advertising could cause our quarterly results to fluctuate and, therefore, could adversely affect the market price of our securities.

We derive substantially all of our revenues from advertisers in diverse industries. Other than network advertising, some of which is presold on an annual basis,
we rarely obtain long-term commitments from advertisers, and advertisers generally may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases
of advertising could, and often do, occur as a result of a strike, a general economic downturn, an economic downturn in one or more industries or in one or more geographic areas, or a failure to agree
on contractual terms. Since the middle of the third quarter of 2000, there has been a general slowdown in the advertising industry. As a result of this slowdown, some of our advertisers have
cancelled, reduced or postponed their orders with us. If this trend continues, and if we are unable to replace any lost or delayed advertising orders, our results of operations would be adversely
affected. In addition, breaking events, such as those occurring on September 11, 2001, require us to program without any advertising and, thus, these events have a negative effect on our
revenues.

If we cannot manage our growth and integrate acquired businesses or assets effectively, we may lose business and experience reduced profitability.

As a result of our recent acquisition of stations from USA Broadcasting, together with acquisitions that we made in the last quarter of 2001 and early 2002 and
expect to make in the remainder of the first half of 2002, we have significantly increased our business within a short period of time. The number of our wholly
owned-and-operated full-power television stations has more than doubled, and this may result in a strain on our infrastructure and internal systems. If we are to
grow successfully, we must:



We
may not be able to accomplish all or any of these tasks, and our failure to do so would have a material adverse effect on our operating results. If we do not effectively manage our
growth, our advertisers could reduce or cancel their advertising orders.

Failure of new stations and our new network to produce projected revenues could adversely affect our financial results and expected growth.

If our new stations and our new network do not generate substantial revenues within the expected time periods, it could harm our financial results and our
expected growth. We may incur significant expenses related to:



18

---



If we are unable to convert acquired stations successfully to a Spanish-language format, anticipated revenues from such acquisitions will be diminished.

We have converted the English-language stations that we recently acquired, including those from USA Broadcasting and Equity Broadcasting, and we intend to convert
any stations we acquire in the future to a Spanish-language format. This conversion process may require a heavy initial investment of both financial and management resources. We may incur losses for a
period of time after a format change due to the time required to build up ratings and station loyalty. These format conversions may be unsuccessful in any given market, and we may incur substantial
costs and losses in implementing this strategy.

We are subject to risks associated with future acquisitions and joint ventures.

We intend to continue to pursue acquisitions of businesses and stations and to enter into joint venture arrangements that could complement or expand our business.
We will not be able to acquire other businesses if we cannot identify suitable acquisition opportunities or obtain acceptable financing. The negotiation of potential acquisitions or joint ventures, as
well as the integration of an acquired business or station, could require us to incur significant costs and cause diversion of management's time and resources. Future acquisitions by us could result
in the following consequences:



We
may not be able to raise additional funds on terms acceptable to us or in amounts sufficient for us to meet our requirements. In addition, even after we enter into acquisition
agreements (including those that we have recently executed), the acquisitions may not close as conditions set forth in such agreements may not be satisfied. Failure to achieve the anticipated benefits
of any acquisition or to successfully integrate the operations of the acquired companies could also adversely affect our business and results of operations.

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

We face intense competition in the broadcasting and cable business. We compete for viewers and revenues with other Spanish-language broadcasting companies, such
as Telemundo Group, Inc. (which announced in October 2001 that it will be acquired by NBC pending customary regulatory approvals), as well as English-language television stations and
networks, some of which have begun producing Spanish-language programming and simulcasting programming in English and Spanish. Several cable broadcasters have recently commenced, or announced their
intention to commence, Spanish-language services as well. In addition, TV Azteca, the second largest producer of Spanish-language programming in the world, has launched a new television network, which
now reaches approximately 28% of U.S. Hispanics.

We
also compete for viewers and revenues with independent television stations, other video media, suppliers of cable television programs, direct broadcast satellite systems (including
two which were started

19

---

in 1996 for broadcast outside the U.S. and in which Televisa and Venevision, respectively, have substantial interests), newspapers, magazines, the Internet, radio, outdoor and other forms of
entertainment and advertising. In addition, our affiliates located near the Mexican border compete for viewers with television stations operated in Mexico, many of which are affiliated with a Televisa
network and owned by Televisa. Many of our competitors have greater financial resources than us, and increased competition for viewers and revenues may have a material adverse effect on our financial
condition and results of operations.

Because the U.S. Hispanic population is highly concentrated geographically, a regional downturn in economic conditions or other negative event in particular markets could have
a material adverse affect on our operations.

Approximately 33% of all U.S. Hispanics live in the Los Angeles, New York and Miami-Fort Lauderdale markets, and the top ten U.S. Hispanic markets
collectively account for approximately 56% of the U.S. Hispanic population. Our revenues are similarly concentrated in these key markets. As a result, a significant decline in revenue from our
operations in these markets, whether due to a general regional economic downturn, increased competition or otherwise, could have a material adverse effect on our financial performance.

Our new Internet portal and our Music Group operated at a loss in 2001 and could also lose money in future years.

We recently launched our proprietary Internet portal and entered the music recording and publishing business. We intend to continue to direct both financial and
managerial resources to further upgrading and developing our presence on the Internet and in the music industry. Our Internet and music operations resulted in net losses in 2001, and we expect that
our Internet portal will operate at a loss during 2002. These business segments may operate at a loss in future years and the portal may never operate at a profit.

We are dependent upon key personnel.

Our business is dependent upon the performance of key individuals, including A. Jerrold Perenchio, our Chairman of the Board, President and Chief Executive
Officer. The loss of the services of Mr. Perenchio could have a material adverse effect on us. Our continued success will also be dependent on our ability to attract and retain quality general
managers and other management personnel for our new and existing stations and networks.

Because of our concentrated share ownership, Mr. Perenchio has control over our policies, affairs and all other aspects of our business and future direction.

Mr. Perenchio beneficially owns all of our outstanding Class P common stock, which gives him ten votes per share compared to the one vote per share
of all other capital stock. Our Class A and Class P common stock vote together on all matters. As of December 31, 2001, Mr. Perenchio had 73% of the voting power of all
holders of Class A common stock and Class P common stock (who vote as a single class to elect our Class A/P directors), and, assuming no exercise of options or warrants, 69% of
our overall voting power, with respect to substantially all matters submitted to a vote (subject to supermajority board approvals), including election of directors, proxy contests, mergers, tender
offers
and other purchases of our common stock that could give our stockholders the opportunity to realize a premium over the then prevailing market price for their shares of common stock.

The required conversion to digital television could impose significant costs on us.

The FCC requires us to provide a digitally transmitted signal by May 1, 2002 for all of our U.S. television stations and, generally, to stop broadcasting
analog signals by 2006. The Company has filed the necessary extensions with the FCC for most of its stations which it does not anticipate will be digitally

20

---

ready by May 1, 2002. Our costs to convert our television stations to digital television will be significant. In addition, several of our stations that operate on frequencies above Channel 51
will be required to relocate to new, as yet unidentified, channels. The cost to supply both digital and analog signals between 2002 and 2006 will also be significant. Moreover, the FCC may impose
additional public service obligations on television broadcasters in return for their use of the digital television spectrum, which could add to our operational costs.

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

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



We are subject to ongoing regulation by the FCC, which is beyond our control and which could negatively impact our operations.

Our operations are subject to extensive and changing regulation on an ongoing basis by the FCC, which enforces the Communications Act. Approval by the FCC is
required for the issuance, renewal and assignment of station operating licenses and the transfer of control of station licensees. Our FCC licenses will come up for renewal from time to time, and such
renewal may be subject to challenge on a number of grounds. If we are unable to maintain our FCC license at any station, we would have to cease operations at that station. In addition, if the FCC were
to revoke or fail to renew any of our significant licenses for any reason, our lenders could declare all amounts then outstanding to be immediately due and payable, and we may not have sufficient
funds to pay the amounts owed.

The
FCC also regulates ownership and control by foreign interests. If we fail to comply with the foreign ownership restrictions included in our certificate of incorporation, or if we
depart from representations made to the FCC, the FCC has the ability to enforce such foreign ownership restrictions through warnings, fines, cancellations of licenses or other actions.

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

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

21

---

If any of our transmission equipment fails or becomes unavailable for any reason, the resulting interruption in broadcasting could negatively impact our financial results.

Television broadcasting requires the use of sensitive technical equipment. We broadcast our programs to our affiliates on three separate satellites from four
transponders, one of which is owned and three of which are leased on a long-term basis pursuant to two lease agreements. If any of these transponders or satellites fails for any reason
(including but not limited to, failure or damage resulting from any act of terrorism, war, act of God or other force majeure), there can be no assurance that other transponders or satellites would be
available to us, or if available, whether the use of such other transponders or
satellites could be obtained on favorable terms. A disruption of transmission could reduce advertising revenues during and after the disruption and could have a material adverse effect on our results
of operations.

We
also own or lease remote antenna space and microwave transmitter space near each of our owned-and-operated stations. The loss of any of these antenna tower
leases, or the destruction of or substantial damage to any of the transmitter towers from any cause (including but not limited to, destruction or damage resulting from any act of terrorism, war, act
of God or other force majeure), could similarly curtail our operations and reduce our revenues.

Our substantial indebtedness could adversely affect our financial health.

At December 31, 2001, we had total indebtedness in excess of $1 billion. Our substantial indebtedness could have important consequences to you. For
example, it could:



In
addition, we may incur additional indebtedness in the future. The terms of the Indentures governing our existing indebtedness will allow us to incur additional debt subject to certain
limitations. If new debt is added to current debt levels, the related risks described above could intensify. If such debt financing is not available when required or is not available on acceptable
terms, we may be unable to grow our business, take advantage of business opportunities, respond to competitive pressures or refinance maturing debt, any of which could have a material adverse effect
on our operating results and financial condition.

We will require a significant amount of cash to service our indebtedness. Our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures and expansion efforts and any strategic acquisitions we
may make in the future, will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond
our control. We cannot assure that our business will generate sufficient cash flow from operations in the future or that future borrowings will be available to us in an amount sufficient to enable us
to repay indebtedness or to fund other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the Senior Notes, on or before maturity. We cannot assure that we will
be able to refinance any of our indebtedness on commercially reasonable terms or at all.

22

---



ITEM 2. Properties

The principal buildings owned or leased by the Company are described below:

Principal Properties of the Company(1)

|Location        |  | Aggregate
Size of Property
in Square Feet
(Approximate) |  | Owned
or
Leased |  | Lease
Expiration
Date |    
|--------------- |  | ------------------------------------------------------- |  | --------------- |  | --------------------- | ---
|Miami, FL       |  | 292,039                                                 |  | Owned           |  |                      |    
|Miami, FL       |  | 272,422                                                 |  | Leased          |  | 10/23/07              | (2)
|Los Angeles, CA |  | 166,400                                                 |  | Leased          |  | 10/31/21              | (3)
|New York, NY    |  | 63,500                                                  |  | Leased          |  | 6/30/10               | (2)
|Teaneck, NJ     |  | 47,617                                                  |  | Leased          |  | 7/31/12               | (2)

---

The
Miami owned facilities house Univision Network and TeleFutura Network administration, operations (including uplink facilities), sales, production, news. In addition,
Galavisión operations and WLTV, the Miami station, occupy space in Univision Network's facility. The Company broadcasts its programs to the Company's affiliates on three separate
satellites from four transponders, one of which is owned and three of which are leased pursuant to two lease agreements that expire in 2012. In addition, the Company uses a fifth transponder for news
feeds.

The
Company owns or leases remote antenna space and microwave transmitter space near each of its owned-and-operated stations. Additionally, the Company leases
space in public warehouses and storage facilities, as needed,near some of its owned-and-operated stations.

The
Company believes that its principal properties, whether owned or leased, are suitable and adequate for the purposes for which they are used and are suitably maintained for such
purposes. Except for the inability to renew any leases of property on which antenna towers stand or under which the Company leases transponders (neither of which are known risks), the inability to
renew any lease would not have a material adverse effect on the Company's financial condition or results of operations since the Company believes alternative space on reasonable terms is available in
each city.

ITEM 3. Legal Proceedings

The Company is involved in certain litigation arising in the ordinary course of business. Management has accrued amounts it believes are reasonable and any
amounts in excess of those accruals, either
alone or in the aggregate, would not be material to the Company. See Note 8 to Notes to Consolidated Financial Statements.

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

Not applicable.

Executive Officers

The executive officers of the Company serve at the discretion of its Board of Directors subject to certain employment agreements. Messrs. Blank, Rodriguez,
Kranwinkle and Hobson have employment agreements with the Company.

23

---

The
executive officers of the Company are as follows:

|Name                  |  | Age |  | Position                                                                                                 
|--------------------- |  | --- |  | ---------------------------------------------------------------------------------------------------------
|A. Jerrold Perenchio  |  | 71  |  | Chairman of the Board and Chief Executive Officer                                                        
|George W. Blank       |  | 50  |  | Executive Vice President and Chief Financial Officer                                                     
|Robert V. Cahill      |  | 70  |  | Vice Chairman and Secretary                                                                              
|C. Douglas Kranwinkle |  | 61  |  | Executive Vice President and General Counsel                                                             
|Ray Rodriguez         |  | 51  |  | President and Chief Operating Officer of Univision Network,
    TeleFutura Network and Galavisión Network
|Andrew Hobson         |  | 40  |  | Executive Vice President                                                                                 

Mr. A.
Jerrold Perenchio has been Chairman of the Board and Chief Executive Officer of the Company since December 1992. From December 1992 through
January 1997, he was also the Company's President. Mr. Perenchio has owned and been active in Chartwell Partners LLC since it was formed in 1983. Chartwell Partners LLC is an investment
firm that is active in the media and communications industry.

Mr. Blank
has been Executive Vice President and Chief Financial Officer of UTG since December 1992 and Chief Financial Officer of the Univision Network since 1995.

Mr. Cahill
has been Vice Chairman and Secretary of the Company since May 2001. From December 1992 until May 2001, Mr. Cahill was Secretary and Vice
President of the Company. Mr. Cahill has been Executive Vice President and General Counsel of Chartwell Partners, an affiliate of Mr. Perenchio, since 1985.

Mr. Kranwinkle
has been the Executive Vice President and General Counsel of the Company since September 2000. From January 1989 until September 2000,
Mr. Kranwinkle was a partner of O'Melveny & Myers LLP, a law firm. While at O'Melveny & Myers LLP, Mr. Kranwinkle was the managing partner of its New York office from
December 1993 until June 1997, and the firm's managing partner from April 1996 until September 2000.

Mr. Rodriguez
has been President and Chief Operating Officer of Univision Network since December 1992. In addition, Mr. Rodriguez has been President and Chief
Operating Officer of TeleFutura Network and Galavisión Network since August 2001.

Mr. Andrew
Hobson has been Executive Vice President of the Company since 2001. From 1994 to 2000, Mr. Hobson was an Executive Vice President of the Univision Network.
Mr. Hobson served as a Principal at Chartwell Partners, an affiliate of Mr. Perenchio from 1990 to 1994. Mr. Hobson is a member of the Board of Directors of Entravision.

24

---



PART II

ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters

The
Company's Class A Common Stock is listed on the New York Stock Exchange and is traded under the symbol "UVN". The table below lists the high and low sales prices for the
Class A Common Stock as reported on the New York Stock Exchange for each full quarterly period within the two most recent fiscal years.

Price RangeHigh

Low2000First Quarter

$
57.22

$
44.03Second Quarter

$
57.78

$
46.25Third Quarter

$
62.69

$
33.06Fourth Quarter

$
43.94

$
24.002001First Quarter

$
52.25

$
32.25Second Quarter

$
47.10

$
33.50Third Quarter

$
43.42

$
16.30Fourth Quarter

$
41.71

$
22.73


At
February 14, 2002, the approximate number of stockholders of record of the Company's Class A Common Stock was 191.

No
cash dividends were paid on any class of the Company's common stock in 2001. The Company has never declared or paid dividends on any class of its common stock. The Company's current
bank facility agreement restricts the payment of cash dividends on common stock. The Company currently intends to retain any earnings for use in its business and does not anticipate paying any cash
dividends on its common stock in the foreseeable future. Future dividend policy will depend on the Company's earnings, capital requirements, financial condition and other factors considered relevant
by the Board of Directors.

25

---

ITEM 6. Selected Financial Data

Presented below is the selected historical financial data of Univision Communications Inc.

FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA  (In thousands, except share and per-share data)

|                                                                     |                                            | 2001 |           | 2000        |   | 1999      |             | 1998 |         | 1997        |  
|-------------------------------------------------------------------- | ------------------------------------------ | ---- | --------- | ----------- | - | --------- | ----------- | ---- | ------- | ----------- | -
|Income Statement Data (for the years ended December 31)              |                                            |      |           |             |   |           |             |      |         |             |  
|Net revenues                                                         |                                            | $    | 887,870   |             | $ | 863,459   |             | $    | 693,090 |             | $
|Direct operating expenses                                            |                                            |      | 355,761   |             |   | 312,381   |             |      | 241,870 |             |  
|Selling, general and administrative expenses                         |                                            |      | 231,610   |             |   | 223,023   |             |      | 184,159 |             |  
|Depreciation and amortization                                        |                                            |      | 84,069    |             |   | 66,765    |             |      | 62,583  |             |  
|                                                                     |                                            |      |           |             |   |           |             |      |         |             |  
|Operating income                                                     |                                            |      | 216,430   |             |   | 261,290   |             |      | 204,478 |             |  
|Interest expense, net                                                |                                            |      | 53,463    |             |   | 30,097    |             |      | 27,459  |             |  
|Amortization of deferred financing costs                             |                                            |      | 2,488     |             |   | 1,361     |             |      | 1,441   |             |  
|Special bonus award                                                  |                                            |      |          |             |   |          |             |      |        |             |  
|Equity loss in unconsolidated subsidiaries                           |                                            |      | 42,897    |             |   | 4,828     |             |      | 498     |             |  
|Non-recurring expense (reversal) of acquired station                 |                                            |      |          |             |   |          |             |      |        |             |  
|                                                                     |                                            |      |           |             |   |           |             |      |         |             |  
|Income before taxes and extraordinary loss on extinguishment of debt |                                            |      | 117,582   |             |   | 225,004   |             |      | 175,080 |             |  
|Provision (benefit) for income taxes                                 |                                            |      | 62,865    |             |   | 108,081   |             |      | 91,536  |             |  
|                                                                     |                                            |      |           |             |   |           |             |      |         |             |  
|Income before extraordinary loss on extinguishment of debt           |                                            |      | 54,717    |             |   | 116,923   |             |      | 83,544  |             |  
|Extraordinary loss on extinguishment of debt, net of tax             |                                            |      | (2,306    | )           |   |          |             |      | (2,611  | )           |  
|                                                                     |                                            |      |           |             |   |           |             |      |         |             |  
|Net income                                                           |                                            |      | 52,411    |             |   | 116,923   |             |      | 80,933  |             |  
|Preferred stock dividends                                            |                                            |      | (70       | )           |   | (518      | )           |      | (540    | )           |  
|                                                                     |                                            |      |           |             |   |           |             |      |         |             |  
|Net income available to common stockholders                          |                                            | $    | 52,341    |             | $ | 116,405   |             | $    | 80,393  |             | $
|                                                                     |                                            |      |           |             |   |           |             |      |         |             |  
|Earnings Per Share Available to Common Stockholders(a)               |                                            |      |           |             |   |           |             |      |         |             |  
|Basic Earnings Per Share                                             |                                            |      |           |             |   |           |             |      |         |             |  
|                                                                     | Income before extraordinary loss           |      | $         | 0.26        |   | $         | 0.57        |      | $       | 0.43        |  
|                                                                     | Net income                                 |      | $         | 0.25        |   | $         | 0.57        |      | $       | 0.42        |  
|                                                                     | Weighted average common shares outstanding |      |           | 208,110,727 |   |           | 204,893,438 |      |         | 192,971,418 |  
|Diluted Earnings Per Share                                           |                                            |      |           |             |   |           |             |      |         |             |  
|                                                                     | Income before extraordinary loss           |      | $         | 0.23        |   | $         | 0.49        |      | $       | 0.35        |  
|                                                                     | Net income                                 |      | $         | 0.22        |   | $         | 0.49        |      | $       | 0.34        |  
|                                                                     | Weighted average common shares outstanding |      |           | 239,817,378 |   |           | 238,963,587 |      |         | 236,236,626 |  
|Balance Sheet Data (at end of year)                                  |                                            |      |           |             |   |           |             |      |         |             |  
|Current assets                                                       |                                            | $    | 596,093   |             | $ | 249,612   |             | $    | 177,910 |             | $
|Total assets                                                         |                                            |      | 3,163,544 |             |   | 1,448,305 |             |      | 974,457 |             |  
|Current liabilities                                                  |                                            |      | 269,680   |             |   | 362,961   |             |      | 141,901 |             |  
|Long-term debt                                                       |                                            |      | 1,662,018 |             |   | 377,689   |             |      | 303,138 |             |  
|Stockholders' equity                                                 |                                            |      | 813,280   |             |   | 695,272   |             |      | 513,778 |             |  
|Other Data                                                           |                                            |      |           |             |   |           |             |      |         |             |  
|Broadcast cash flow                                                  |                                            | $    | 312,155   |             | $ | 342,147   |             | $    | 281,085 |             | $
|EBITDA                                                               |                                            |      | 300,499   |             |   | 328,055   |             |      | 267,061 |             |  

---

26

---



ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        Form 10-K  Management's Discussion and Analysis of Financial Condition and Results of Operations

Univision Communications Inc., together with its wholly owned subsidiaries (the "Company"), had operations during 2001 in three business segments:



Substantially
all of the Company's revenues have been derived from the Broadcasting segment, including the three networks, the 22 owned-and-operated stations that
comprise the Univision Television Group ("UTG"), and the 26 owned-and-operated stations that comprise the TeleFutura Television Group ("TTG"). The 26 TTG owned-and-operated
stations are referred to collectively as the "TTG O&Os".

UTG's
net revenues are derived from its owned-and-operated stations (collectively, the "UTG O&Os") and include gross advertising revenues generated from the sale
of national and local spot advertising time, net of agency commissions. Univision Network's net revenues include gross advertising revenues generated from the sale of Univision Network advertising,
net of agency commissions and station compensation to Univision Network's affiliates (16 full-power and 27 low-power stations), as well as subscriber fees.

After
being acquired from USA Broadcasting in 2001, 10 of the Company's owned-and-operated stations were operated as English-language Home Shopping Network
("HSN") channels as required by the purchase agreement with USA Broadcasting. Each station entered into an affiliation agreement with HSN (an affiliate of USA Broadcasting) and agreed to broadcast up
to 24-hours per day of HSN programming until October 1, 2001 with respect to two New York stations and until January 14, 2002 with respect to the Boston, Chicago, Cleveland,
Houston, Los Angeles, Orlando, Philadelphia and Tampa stations. Accordingly, TTG's net revenues include fees paid to the Company under the HSN affiliation agreements. These agreements resulted in an
approximate breakeven in EBITDA (defined below) for 2001.

Also
included in net revenues are Galavisión's gross advertising revenues, net of agency commissions, Galavisión's subscriber fee revenues, net revenues of
Univision Online, net revenues from Univision Music Group, and miscellaneous revenues.

Direct
operating expenses consist of programming, news and general operating costs.

"EBITDA"
is defined as earnings before interest, taxes, depreciation and amortization and non-recurring charges and is the sum of operating income plus depreciation and amortization. The
Company has included EBITDA data because such data is commonly used as a measure of performance for broadcast companies and is also used by investors to measure a company's ability to service debt.
EBITDA is not, and should not be used as, an indicator of or an alternative to operating income, net income or cash flow as reflected in the consolidated financial statements, is not a measure of
financial performance under

27

---

generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles.

Critical Accounting Policies

Program Rights for Television Broadcast

Costs incurred in connection with the production of or purchase of rights to programs to be broadcast within one year are classified as current assets, while
costs of those programs to be broadcast subsequently are considered non-current. Program costs are charged to operating expense as the programs are broadcast.

Revenue Recognition

Net revenues comprise gross revenues from the Company's broadcast, cable, internet and music businesses, including subscriber fees, a network service fee payable
to the Company by the affiliated stations, less agency commissions and compensation costs paid to certain affiliated stations. The Company's gross revenues are recognized when advertising spots are
aired for its broadcast and cable businesses and served for its Internet business. Univision Music Group gross revenues are recognized based on product shipments to distributors less an allowance for
returns. Substantially all of the Company's net revenues are derived from the advertising revenues of its broadcast and cable businesses.

Accounting for Intangibles

On June 30, 2001, the Financial Accounting Standards Board issued SFAS No. 142 "Goodwill and Other Intangible Assets". Under SFAS No. 142,
goodwill and other intangibles with an indefinite life, such as broadcast licenses, associated with acquisitions consummated prior to June 30, 2001 will not be amortized after
December 31, 2001 and those related to acquisitions after June 30, 2001 will never be amortized. However, goodwill and other intangibles will be subject to at least an annual assessment
for impairment and more frequently if circumstances indicate a possible impairment exists. The Company is in the process of evaluating the effect of SFAS No. 142 as it relates to assessing
impairment of its intangible assets and does not expect any impairment losses at adoption. In addition, under SFAS No. 142, an acquired intangible asset should be separately recognized if the
benefit of the intangible is obtained through contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed, rented, or exchanged. Intangible assets with measurable
lives will be amortized over their respective useful lives. The adoption of SFAS No. 142 will result in a substantial reduction of intangible amortization expense for the Company in 2002 since
broadcast licenses, affiliation agreements and goodwill will no longer be amortized. In 2001, the Company's amortization of goodwill and other intangibles was approximately $41,000,000; however, since
most of the Company's intangible amortization is non-deductible for tax purposes, the Company only realized a $5,000,000 tax benefit. In 2002, the Company's expected intangible
amortization expense will be approximately $1,000,000, primarily related to favorable tower leases resulting from acquisitions.

Year Ended December 31, 2001 ("2001"), Compared to Year Ended December 31, 2000 ("2000")

Revenues.Net revenues were $887,870,000 in 2001 compared to $863,459,000 in 2000, an increase of
$24,411,000 or 2.8%. The Company's broadcast segment revenues were $871,993,000 in 2001 compared to $862,931,000 in 2000, an increase of $9,062,000 or 1%. Univision Network had an increase of
approximately 19% in the average price of advertising spots offset in part by a decrease in volume of approximately 16%. UTG O&Os had lower prices for advertising spots of approximately 4%, while the
number of spots sold remained essentially flat. UTG O&Os had decreases in revenues attributable primarily to the Miami, Los Angeles and New York stations and increases in revenues from the Dallas, San
Antonio, Chicago, Fresno and Phoenix stations. The USA Broadcasting acquired stations had revenues of

28

---

$9,879,000 in 2001. The Company's Internet segment had revenues of $6,207,000 in 2001 compared to $528,000 in 2000, an increase of $5,679,000. The Company's music segment, which began operations in
April 2001, generated revenues of $9,670,000 in 2001.

Expenses.Direct operating expenses, which include corporate charges of $328,000 and $344,000 in 2001
and 2000, respectively, increased to $355,761,000 in 2001 from $312,381,000 in 2000, an increase of $43,380,000 or 13.9%. The Company's broadcast segment direct operation expenses were $325,691,000 in
2001 compared to $297,678,000 in 2000, an increase of $28,013,000 or 9.4%. The increase was primarily the result of: (a) increased programming charges associated with cancelled shows, including
a cost reduction charge of $3,635,000, and other increased programming costs associated with entertainment and movies accounted for $7,550,000 of the increase, offset in part by lower license fees
paid under our program license agreements of $1,468,000 and the elimination of programming costs associated with a show cancelled in 2000 and reduced novela purchasing costs aggregating $4,166,000;
(b) increased sports-related programming costs of $16,956,000, including a cost reduction charge of $1,684,000; (c) offset in part by the elimination of 2000 news cost related to the
presidential election of $862,000. The USA Broadcasting acquired stations and TeleFutura direct operating expenses were $9,654,000 in 2001. The Company's Internet segment had direct operating expenses
of $24,248,000 in 2001 compared to $14,703,000 in 2000, an increase of $9,545,000 due to the business becoming fully operational in 2001 from its third quarter launch in 2000. The Company's music
segment had direct operating expenses of $5,822,000 in 2001. As a percentage of net revenues, direct operating expenses increased from 36.2% in 2000 to 40.1% in 2001.

Selling,
general and administrative expenses, which include corporate charges of $11,328,000 and $13,748,000 in 2001 and 2000, respectively, increased to $231,610,000 in 2001 from
$223,023,000 in 2000, an increase of $8,587,000 or 3.9%. The Company's broadcast segment selling, general and administrative expenses were $208,517,000 in 2001 compared to $205,593,000 in 2000, an
increase of $2,924,000 or 1.4%. The increase is due to a charge of $6,573,000 for a cost reduction initiative primarily related to severance costs, an increase in employee benefit costs of $4,750,000,
a charge for bad debt of $4,830,000 to adequately provide for the weak economic climate currently being experienced. These increases were offset by a reduction in discretionary compensation costs of
$16,047,000, the elimination of 2000 costs related to the Company's national advertising campaign of $3,796,000, a decrease in selling costs of $2,700,000 and a decrease in promotions of $1,695,000.
The
USA Broadcasting acquired stations and TeleFutura selling, general and administrative expenses were $10,271,000 in 2001. The Company's Internet segment had selling, general and administrative expenses
of $17,465,000 in 2001 compared to $17,430,000 in 2000, an increase of $35,000. The Company's music segment had selling, general and administrative expenses of $5,628,000 in 2001.

Depreciation and Amortization.Depreciation and amortization increased to $84,069,000 in 2001 from
$66,765,000 in 2000, an increase of $17,304,000 or 25.9%. Depreciation and amortization for the broadcast segment increase by $13,687,000 to $78,215,000 in 2001 from $64,528,000 in 2000 due primarily
to an increase in amortization resulting primarily from the acquisition of certain USA Broadcasting stations acquired on June 12, 2001 (see Note 2) and increased depreciation related to
increased capital expenditures. Depreciation and amortization for the Internet segment increased by $3,593,000 to $5,830,000 in 2001 from $2,237,000 in 2000 due primarily to increased depreciation
related to increased capital expenditures. Depreciation and amortization for the music segment was $24,000 in 2001.

Operating Income.As a result of the above factors, operating income decreased to $216,430,000 in
2001 from $261,290,000 in 2000, a decrease of $44,860,000 or 17.2%. The Company's broadcast segment had operating income of $259,570,000 in 2001 and $295,132,000 in 2000, a decrease of $35,562,000,
which includes an operating loss for the USA Broadcasting acquired stations and TeleFutura of $19,251,000. The Company's Internet segment had an operating loss of $41,336,000 in 2001 and $33,842,000
in 2000, an increase of $7,494,000. The Company's music segment had an operating loss of $1,804,000. As a percentage of net revenues, operating income decreased from 30.3% in 2000 to 24.4% in 2001.

29

---

Interest Expense, Net.Interest expense increased to $53,463,000 in 2001 from $30,097,000 in 2000, an
increase of $23,366,000 or 77.6%. The increase is due primarily to increased borrowings associated with the Company's increased investment in Entravision Communications Corporation ("Entravision")
during the latter part of 2000 and the acquisition of certain USA Broadcasting stations.

Equity Loss in Unconsolidated Subsidiaries and Other.Equity loss in unconsolidated subsidiaries and
other increased to $42,897,000 in 2001 from $4,828,000 in 2000, an increase of $38,069,000. The increase is due primarily to a charge of $15,919,000 relating to the dissolution of the Company's joint
venture in Ask Jeeves en Español, Inc. and equity losses of $19,754,000 relating to Entravision.

Provision for Income Taxes.In 2001, the Company reported an income tax provision of $62,865,000,
representing $50,045,000 of current tax expense and $12,820,000 of deferred tax expense. In 2000, the Company reported an income tax provision of $108,081,000, representing $104,823,000 of current tax
expense and $3,258,000 of deferred tax expense. The total effective tax rate was 53.5% in 2001 and 48.0% in 2000. The Company's effective tax rate of 53.5% for 2001 is higher than the 48.0% for 2000
since the Company's relatively fixed permanent non-deductible tax differences have a greater effect as book pre-tax income decreases.

Extraordinary Loss on Extinguishment of Debt, Net of Tax.The Company's extraordinary loss on
extinguishment of debt of $2,306,000 in 2001 is due to the write-off of deferred financing costs related to its terminated credit facilities.

Net Income.As a result of the above factors, net income in 2001 was $52,411,000 compared to
$116,923,000 in 2000, a decrease of $64,512,000 or 55.2%. On a comparable basis, excluding, in 2000, Univision Online losses of $20,568,000, equity losses in unconsolidated subsidiaries of $2,863,000
and executive resignation costs of $1,186,000 and in 2001, Univision Online losses of $27,563,000, equity losses in unconsolidated subsidiaries of $23,610,000, the cost reduction initiative charge of
$7,076,000, USA Broadcasting acquired stations and TeleFutura losses of $23,095,000 which includes interest, depreciation and amortization charges, Univision Music Group losses of $3,056,000 and the
extraordinary loss of $2,306,000 (all net of tax), net income decreased by $2,423,000 or 1.7% to $139,117,000 in 2001 from $141,540,000 in 2000. As a percentage of net revenues, net income decreased
from 13.6% in 2000 to 5.9% in 2001. On a comparable basis, as a percentage of net revenues, net income decreased from 16.4% in 2000 to 16.1% in 2001.

Corporate Charges.Corporate charges decreased to $11,656,000 in 2001 from $14,092,000 in 2000, a
decrease of $2,436,000 or 17.3%. The decrease is primarily due to costs associated with compensation and benefits. As a percentage of net revenues, corporate charges decreased from 1.6% in 2000 to
1.3% in 2001.

EBITDA.EBITDA decreased to $300,499,000 in 2001 from $328,055,000 in 2000, a decrease of $27,556,000
or 8.4%. As a percentage of net revenues, EBITDA decreased from 38.0% in 2000 to 33.8% in 2001.

On
a comparable basis, excluding Univision Online losses of $35,506,000, the cost reduction initiative charge of $11,892,000, USA Broadcasting acquired station losses of $10,046,000 and
Univision Music Group losses of $1,780,000 in 2001 and Univision Online losses of $31,605,000 and executive resignation costs of $2,000,000 in 2000, EBITDA decreased by $1,937,000 or .5% to
$359,723,000 in 2001 from $361,660,000 in 2000. As a percentage of net revenues, EBITDA, on a comparable basis, decreased from 41.9% in 2000 to 41.7% in 2001.

Year Ended December 31, 2000 ("2000"), Compared to Year Ended December 31, 1999 ("1999")

Revenues.Net revenues were $863,459,000 in 2000 compared to $693,090,000 in 1999, an increase of
$170,369,000 or 24.6%. The Company's broadcast segment revenues were $862,931,000 in 2000 compared to $693,090,000 in 1999, an increase of $169,841,000 or 24.5%. Univision Network had an increase of

30

---

approximately 19% in the average price of advertising spots and an increase in volume of approximately 9%. UTG O&Os, on a same-station basis, after adjusting for the March 31, 1999
sale of the Albuquerque station, had an increase of approximately 5% in the number of spots sold and an 11% increase in the price for advertising spots. While there were increases at all UTG O&Os, the
primary increases were derived from the Los Angeles, New York, Miami, San Francisco and Dallas stations. The Company's Internet segment, that was launched in the third quarter of 2000, had revenues of
$528,000.

Expenses.Direct operating expenses, which include corporate charges of $344,000 and $300,000 in 2000
and 1999, respectively, increased to $312,381,000 in 2000 from $241,870,000 in 1999, an increase of $70,511,000 or 29.2%.%. The Company's broadcast segment direct operating expenses were $297,678,000
in 2000 compared to $241,359,000 in 1999, an increase of $56,319,000 or 23.3%. The increase was primarily due to increased license fees paid or payable, under the Company's Program License Agreements,
to Televisa and Venevision of $26,000,000 as a result of higher net revenues. The programsA Que No Te Atreves, A
MillónandEstamos Unidosincreased programming costs by
$1,451,000, $498,000 and $457,000 and purchased novelas increased programming costs by $1,218,000. The increase in all other programming costs associated with entertainment programs and movies was
$5,617,000. Sports-related programming costs increased by $5,228,000, which includes $5,051,000 related to Mexican League Soccer, Road to the World Cup Soccer and the Gold Cup 2000 soccer games,
$2,185,000 due to increased boxing costs and $1,163,000 related toRepública Deportiva. These increases in sports-related programming
costs were partially offset by the elimination of 1999 costs related to the Pan American Games of $1,791,000 and Major League Soccer of $1,665,000. News costs increased by $10,909,000, which includes
$1,308,000 of costs for the programUltima Hora, $1,696,000 of costs for increased airings ofAquí y
Ahoraand $2,259,000 of cost increases due to the addition of early morning news at the Los Angeles station, morning news at the New York and Miami stations and weekend news at
the Dallas, San Francisco, Chicago and San Antonio stations. Technical costs increased by $4,941,000 due in part to the support required for increased news programming and higher repair and
maintenance costs. The Internet segment direct operating expenses were $14,703,000 in 2000 compared to $511,000 in 1999, an increase of $14,192,000. As a percentage of net revenues, direct operating
expenses increased from 34.9% in 1999 to 36.2% in 2000.

Selling,
general and administrative expenses, which include corporate charges of $13,748,000 and $13,724,000 in 2000 and 1999, respectively, increased to $223,023,000 in 2000 from
$184,159,000 in 1999, an increase of $38,864,000 or 21.1%. The Company's broadcast segment selling, general and administrative expenses were $205,593,000 in 2000 compared to $182,218,000 in 1999, an
increase of $23,375,000 or 12.8%. The increase is due in part to selling costs of $8,532,000 resulting from higher sales, $3,796,000 of costs associated with the Company's national advertising
campaign, $2,000,000 related to employee benefits, severance and other compensation costs, $2,000,000 related to an executive resignation. These increases were partially offset by a decrease in 1999
costs related to community affairs of $2,000,000 and acquisition-related costs of $1,151,000. The Internet segment selling, general and administrative expenses were $17,430,000 in 2000 compared to
$1,941,000 in 1999, an increase of $15,489,000. As a percentage of net revenues, selling, general and administrative expenses decreased from 26.6% in 1999 to 25.8% in 2000.

Depreciation and Amortization.Depreciation and amortization increased to $66,765,000 in 2000 from
$62,583,000 in 1999, an increase of $4,182,000 or 6.7%. Depreciation and amortization for the broadcast segment increase by $1,979,000 to $64,528,000 in 2000 from $62,549,000 in 1999 due primarily to
an increase in depreciation related to increased capital expenditures that were partially offset by a decrease in goodwill amortization. Depreciation and amortization for the Internet segment increase
by $2,203,000 to $2,237,000 in 2000 from $34,000 in 1999 due primarily to increased depreciation related to increased capital expenditures.

Operating Income.As a result of the above factors, operating income increased to $261,290,000 in
2000 from $204,478,000 in 1999, an increase of $56,812,000 or 27.8%. The Company's broadcast segment had operating income of $295,132,000 in 2000 and $206,964,000 in 1999, an increase of $88,168,000.
The

31

---

Company's Internet segment had an operating loss of $33,842,000 in 2000 and $2,486,000 in 1999, an increase of $31,356,000. As a percentage of net revenues, operating income increased from 29.5% in
1999 to 30.3% in 2000.

Interest Expense, Net.Interest expense increased to $30,097,000 in 2000 from $27,459,000 in 1999, an
increase of $2,638,000 or 9.6%. The increase is due primarily to increased bank borrowings associated with the Company's increased investment in Entravision and higher interest rates during 2000 as
compared to 1999.

Provision for Income Taxes.In 2000, the Company reported an income tax provision of $108,081,000,
representing $104,823,000 of current tax expense and $3,258,000 of deferred tax expense. In 1999, the Company reported an income tax provision of $91,536,000, representing $82,730,000 of current tax
expense and $8,806,000 of deferred tax expense. The total effective tax rate was 48.0% in 2000 and 52.3% in 1999. The Company's effective tax rate of 48.0% for 2000 is lower than the 52.3% for 1999
since the Company's relatively fixed permanent non-deductible tax differences have a smaller effect as book pre-tax income increases.

Net Income.As a result of the above factors, net income in 2000 was $116,923,000 compared to
$80,933,000 in 1999, an increase of $35,990,000 or 44.5%. On a comparable basis, excluding, net of tax, in 1999, the extraordinary loss on extinguishment of debt of $2,611,000, the Internet business
start-up cost of $1,497,000 and the equity loss in unconsolidated subsidiary of $295,000 and in 2000, Internet costs of $20,568,000, the equity losses in unconsolidated subsidiaries of
$2,863,000 and executive resignation costs of $1,186,000, net income increased by $56,204,000 or 65.9% to $141,540,000 in 2000 from $85,336,000 in 1999. As a percentage of net revenues, net income
increased from 11.7% in 1999 to 13.6% in 2000.

Corporate Charges.Corporate charges increased to $14,092,000 in 2000 from $14,024,000 in 1999, an
increase of $68,000 or .5%. The increase is primarily due to costs associated with compensation and benefits. As a percentage of net revenues, corporate charges decreased from 2.0% in 1999 to 1.6% in
2000.

EBITDA.EBITDA increased to $328,055,000 in 2000 from $267,061,000 in 1999, an increase of
$60,994,000 or 22.8%. As a percentage of net revenues, EBITDA decreased from 38.5% in 1999 to 38.0% in 2000.

On
a comparable basis, excluding Internet net costs of $31,605,000 in 2000 and $2,452,000 in 1999 and executive resignation costs of $2,000,000 in 2000, EBITDA increased by $92,147,000
or 34.2% to $361,660,000 in 2000 from $269,513,000 in 1999. As a percentage of net revenues, EBITDA, on a comparable basis, increased from 38.9% in 1999 to 41.9% in 2000.

Liquidity and Capital Resources

The Company's primary source of cash flow is its broadcasting operations. Funds for debt service, capital expenditures and operations historically have been
provided by income from operations and by borrowings.

Capital
expenditures totaled $130,188,000 for the twelve months ended December 31, 2001. This amount excludes the capitalized lease obligations of the Company. In addition to
performing normal capital improvements, the Company is still in the process of replacing and upgrading several towers, transmitters and antennas. In 2001, the Company substantially completed the
construction of its television station facilities in Los Angeles, Phoenix and Bakersfield and incurred costs of approximately $57,000,000 related to these projects. The build-out of
TeleFutura Network in Miami also began in 2001 and the Company incurred costs of approximately $24,500,000. In 2002, the Company plans on spending a total of approximately $115,000,000 that will
consist of $41,500,000 for digital technology, $13,700,000 for the completion of the build-out of TeleFutura Network and station facilities, $7,500,000 for Univision Network facilities
expansion, $8,500,000 for the completion of the construction of the Los Angeles and Phoenix

32

---

stations and approximately $43,800,000 for normal capital improvements and management information systems. The Company expects to fund its capital expenditure requirements primarily from its
operating cash flow and, if necessary, from proceeds available under its bank facility.

On
July 18, 2001, the Company issued 7.85% Senior Notes due 2011 (the "Notes"), which have a face value of $500,000,000 and bear simple interest at 7.85%, to qualified
institutional buyers. The Company received net proceeds of $495,370,000 from the issuance of the Notes, which along with cash from operations was used to repay a $500,000,000 temporary credit facility
with Goldman Sachs. The Company will pay interest on the Notes on January 15 and July 15 of each year. The Notes are the Company's senior unsecured obligations, are equal in right of
payment with all of the Company's existing and future senior unsecured indebtedness, are senior in right of payment to any of the Company's future subordinated indebtedness and are fully and
unconditionally guaranteed by all of the Company's guarantors, who are described below. The Company has the option to redeem all or a portion of the Notes at any time at the redemption prices set
forth in the note agreement. The
indenture does not contain any provisions that would require us to repurchase or redeem or otherwise modify the terms of the Notes upon a change of control. The indenture does not limit our ability to
incur indebtedness or require the maintenance of financial ratios or specified levels of net worth or liquidity.

Concurrent
with the issuance of the Senior Notes on July 18, 2001, the Company entered into a new five-year credit agreement with a syndicate of commercial lenders
from whom the Company received commitments of $1.22 billion. The new credit agreement consists of a $500,000,000 revolving credit facility and a $720,000,000 term loan. Each of the credit
facilities will mature on July 18, 2006. At December 31, 2001, the Company had borrowings of $465,000,000 outstanding under its term loan and $25,000,000 outstanding under its revolving
credit facility.

The
subsidiaries that guarantee the Company's obligations under the new revolving credit facility and term loan also guarantee the Notes. Initially, the subsidiary guarantors under the
new credit facilities are all of our domestic subsidiaries other than certain immaterial subsidiaries and, until final payment of the purchase price for the additional stations to be acquired from USA
Broadcasting, the subsidiary that was created to acquire those stations. The guarantees of the obligations under the revolving credit facility, term loan and the Notes will be released if our senior
unsecured debt is rated BBB or better by Standard & Poor's Rating Services and Baa2 or better by Moody's Investor Service, Inc. The guarantees of such subsidiary will be reinstated if
such ratings fall below BBB- by Standard & Poor's or Baa3 by Moody's. The Company's senior unsecured debt is currently rated BB+ by Standard & Poor's Rating Services and Baa3
by Moody's Investor Service, Inc.

Loans
made under the new revolving credit facility and term loan will bear interest determined by reference to LIBOR or a base rate equal to the higher of the prime rate of Chase
Manhattan Bank or 0.50% per annum over the federal funds rate. The interest rate margins for the first six months after the closing of the initial borrowing under the facilities for the revolving
credit facility and term loans will be 0.25% above the base rate or 1.25% above LIBOR. Thereafter, depending on the rating assigned by rating agencies to our senior unsecured debt, the LIBOR interest
rate margin will range from 0.75% to 1.5% per annum and the base rate margin will range from 0% to 0.50% per annum. Interest will generally be payable quarterly.

The
new credit agreement contains customary covenants, including restrictions on liens and dividends, and financial covenants relating to interest coverage and maximum leverage. Under
the new credit agreement, the Company will also be limited in the amount of other debt we can incur and in our ability to engage in mergers, sell assets and make material changes to our program
license agreements with Televisa or Venevision in a manner the lenders determine is materially adverse to the Company.

The
Company's primary interest rate exposure results from changes in the short-term interest rates applicable to the Company's LIBOR loans. The Company borrows at the U.S.
prime rate from time to time but attempts to maintain these loans at a minimum. Based on the Company's overall interest rate

33

---

exposure on its LIBOR loans at December 31, 2001, a change of 10% in interest rates would have an impact of approximately $1,600,000 on pre-tax earnings and pre-tax
cash flows over a one-year period.

On
December 19, 2001, the Company, Televisa and Venevision reached a multi-faceted global alliance. Under this comprehensive agreement, Univision Network, TeleFutura Network and
Galavisión will now have exclusive U.S. broadcast rights to Televisa and Venevision programming (with certain limited exceptions), the most popular Spanish-language programming in the
world, through 2017. As part of the agreements, Televisa made an equity investment in the Company of $375,000,000 and received Class B Preferred Stock that automatically converted, on
February 25, 2002, into 10,594,500 shares, based on an arms-length negotiated 6% discount, of the Company's Class A Common Stock upon expiration of the waiting period under the
Hart-Scott-Rodino Act. The parties also agreed to amend the Company's charter documents to eliminate or modify certain governance rights held by the directors elected by Televisa and
Venevision and to eliminate the right of holders of the Company's Class T Common Stock and Class V Common Stock to elect additional directors upon a change in federal law increasing the
percentage that non-U.S. citizens may own in companies that own television stations. In connection with the changes to the Company's charter documents, the Company issued warrants to both
Televisa and Venevision to purchase in the aggregate, in the case of Televisa, 9,000,000 warrants to acquire 6,274,864 additional shares of Class A Common Stock and 2,725,136 additional shares
of Class T Stock and, in the case of Venevision, 2,800,000 warrants to acquire 74,864 additional shares of Class A Common Stock and 2,725,136 Class V Stock. The warrants were
issued in exchange for the value of certain rights previously held by the holders of shares of Class T and Class V Stock. The exercise price of the warrants is $38.261 per share. At
December 31, 2001, Televisa and Venevision owned a total of 9,002,000 and 30,237,700 warrants, respectively, which includes warrants issued in December 1992. The 1992 warrants are
exercisable for Class T and Class V Common Stock at an exercise price of $0.0322 per share. In addition, the Company agreed to acquire Televisa's music recording company, Fonovisa Music
Group ("Fonovisa"), North America's premier Latin music label, for 6 million shares of Class A Common Stock and warrants to purchase an additional 100,000 Shares of Class A
Common Stock at an exercise price of $38.261 per share.

On
December 7, 2000, the Company announced that it would acquire from USA Broadcasting, Inc. for $1.1 billion in cash, 13 full-power television stations,
minority interests in four additional full-power television stations and Station Works, LLC, the master control operating system for the station group. On June 12, 2001, the Company
acquired the first three full-power stations, the Station Works facility, and the minority ownership interests in the four additional full-power stations for $294,069,000 in
cash. On August 21, 2001, the Company acquired the remaining 10 full-power stations through the issuance of non-interest bearing notes aggregating approximately
$808,000,000. The Company made a payment under the notes of approximately $216,000,000 in September 2001 and made the remaining payment of approximately $592,000,000 in January 2002 with
funds from its existing credit facility and proceeds received from the issuance of mandatory convertible preferred stock to Televisa. During the interim period between the acquisition of the stations
in August 2001 and the respective maturity dates for the notes, the Company continued to operate these stations as English-language Home Shopping Network ("HSN") channels as required by the
purchase agreement with USA Broadcasting. Each station entered into an affiliation agreement with HSN (an affiliate of USA Broadcasting) and agreed to broadcast up to 24-hours per day of
HSN programming until October 1, 2001 with respect to two New York stations and until January 14, 2002 with respect to the Boston, Chicago, Cleveland, Houston, Los Angeles, Orlando,
Philadelphia and Tampa stations. In August 2001, the Company also acquired the majority interest in the Washington, D.C. station (in which it had previously acquired the minority interest from
USA Broadcasting) for an additional $59,000,000 through a bankruptcy court proceeding. At December 31, 2001, the Company had a minority interest of $69,875,000 in the San Francisco, Denver and
St. Louis stations, which were part of the USA Broadcasting acquisition. In January 2002, the Company purchased the
majority interest in the San Francisco station for approximately $41,000,000. The majority of the stations acquired from USA Broadcasting are part of the TeleFutura Television Group.

34

---

In
June 2001, the Company purchased for $26,000,000 an approximate 20% non-voting preferred stock equity interest in Equity Broadcasting Corporation ("Equity
Broadcasting"), which is the ninth-largest broadcasting corporation in the United States with more than 40 full-power and 60 low-power television stations. In addition, in
September 2001, the Company purchased an additional 4.9% of Equity Broadcasting's Class A common stock for approximately $2,500,000. This investment is accounted for under the cost
method. On September 28, 2001, the Company loaned Equity Broadcasting approximately $20,000,000, which created an interest-bearing note receivable due to the Company from Equity Broadcasting.
In December 2001, the Company acquired two full power and four low-power television Stations from Equity Broadcasting, and the entire note receivable plus interest was applied to the purchase
price.

Also,
in June 2001, Univision Music, Inc. acquired a 50% interest in Monterrey, Mexico-based Disa Records, S.A. de C.V. ("Disa") from the Chavez family. Disa Records is the
second-largest independent Spanish-language record label in the world; it represents more than 50 artists and owns a large catalog of more than 1,000 master recordings of Mexican regional music. The
Chavez family maintains a 50% ownership in Disa Records and continues to manage the business. The Company has a call right and the Chavez family has a put right starting in June 2006, that will
require the Company to purchase the remaining 50% interest for $75,000,000, subject to certain upward adjustments.

On
October 11, 2001, the Company entered into an asset purchase agreement to acquire stations in Killeen and El Paso, Texas from White Knight Broadcasting for approximately
$30,000,000. Concurrently, the Company assigned its right to acquire the El Paso station to Entravision for approximately $18,000,000. In January 2002, the Company acquired the Killeen station
for $12,000,000 and Entravision acquired the El Paso station.

In
the third quarter of 2001, the Company decided to dissolve its joint venture in Ask Jeeves en Español, Inc.; consequently, the Company's equity loss in
unconsolidated subsidiaries/other amount for 2001 reported includes a charge of $15,919,000 or $9,472,000 net of tax. The original charge of $16,804,000 in the third quarter of 2001 was changed to
reflect an additional collection of cash in the fourth quarter related to the investment. The Company will recover approximately $25,800,000 in cash, comprised of $19,400,000, received in 2001, as a
return of capital and $6,400,000 related to a tax benefit from its original investment of approximately $40,000,000 in Ask Jeeves en Español, Inc.

Effective
February 1, 2002, the Company entered into a time brokerage agreement with Raycom Media, Inc. ("Raycom") to manage its two stations in Puerto Rico. Under the
agreement, the Company will program WLII-TV 11 in San Juan and WSUR-TV 9 in Ponce, collectively branded as "Teleonce" on behalf of Raycom. The new programming under the
agreement will also be telecast through WORA-TV
5 in Mayaguez, the long-term western affiliate to Teleonce. The management fee to the Company will be approximately $500,000 per year. In addition, the Company entered into an option
agreement that expires on December 31, 2004 to acquire these stations for $190,000,000. The purchase price will be reduced if certain earnings targets are met during the period prior to the
expiration of the option agreement.

In
July 2000, the Federal Communications Commission released a Public Notice giving official notification that the Company was the winning bidder for a construction permit for a
new television station assigned to Blanco, Texas with a winning bid of $18,798,000. On August 1, 2000, the Company made the required 20% down payment of $3,759,600 while awaiting final approval
by the FCC. The details and costs regarding the construction of the new station are still in the planning phase.

On
August 9, 2000, the Company acquired the Spanish-language broadcast rights in the U.S. to the 2002 and 2006 FIFA World Cup soccer games and other 2000-2006 FIFA
events. A series of payments totaling $150,000,000 is due over the term of the agreement. In addition to these payments, and consistent with past coverage of the World Cup games, the Company will be
responsible for all costs associated with advertising, promotion and broadcast of the World Cup games, as well as the production of certain television programming related to the World Cup games. The
costs for the 2002 World Cup games,

35

---

including program right and production costs, will be approximately $55,000,000. The funds for these payments are expected to come from income from operations and/or borrowings from the Company's
bank facilities.

The
Company expects to explore additional acquisition opportunities in both Spanish-language television and other media to complement and capitalize on our existing business and
management. The purchase price for the acquisitions and investments described above as well as any future acquisitions may be paid with (a) cash derived from operating cash flow,
(b) proceeds available under bank facilities, (c) proceeds from future debt or equity offerings, or (d) any combination thereof. Based on our current level of operations and
planned capital expenditures, the Company believes that its cash flow from operations, together with available cash and available borrowings under the new credit facility will be adequate to meet
future liquidity needs for at least the next twelve months.

Seasonality

The advertising revenues of the Company vary over the calendar year. Historically, approximately 30% of total advertising revenues have been generated in the
fourth quarter and 20% in the first quarter, with the remainder split approximately equally between the second and third quarters, exclusive of special programming such as the World Cup Games. Because
of the relatively fixed nature of the costs of the Company's business, seasonal variations in operating income are more pronounced than those of revenues.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

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

ITEM 8. Financial Statements and Supplementary Data

See pages F-1 through F-67

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

Not applicable

PART III

Item 10. Directors and Executive Officers of the Registrant

The information relating to directors required by this item will be contained under the captions "Board Of Directors" in a definitive Proxy Statement, which the
registrant will file with the Securities and Exchange Commission not later than 120 days after December 31, 2001 (the "Proxy Statement"), and such information is incorporated herein by
reference.

The
information relating to executive officers required by this item is included herein in Part I under the caption "Executive Officers".

The
information required pursuant to Item 405 of Regulation S-K will be contained under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in
the Company's Proxy Statement, and such information is incorporated herein by reference.

Item 11. Executive Compensation

The information required by this item will be contained under the caption "Summary Table of Executive Compensation," and "Employment Agreements and Arrangements"
in the Company's Proxy Statement, and such information is incorporated herein by reference.

36

---

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this item will be contained under the caption "Security Ownership of Certain Beneficial Owners and Management" in the Company's Proxy
Statement, and such information is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

The information required by this item is contained under the caption "Certain Relationships And Related Transactions" in the Company's Proxy Statement, and such
information is incorporated herein by reference.

37

---



PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

|Exhibit
Number |      | Description                                                                                                                                                                                         
|-------------- | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            | (5)  | Amended and Restated Certificate of Incorporation of the Company                                                                                                                                    
|3.2            |      | Amended and Restated Bylaws of the Company                                                                                                                                                          
|3.3            | (7)  | Certificate of Amendment of Restated Certificate of Incorporation of the Company                                                                                                                    
|4.1            | (6)  | Form of specimen stock certificate                                                                                                                                                                  
|4.4            | (1)  | Indenture dated as of December 17, 1992 relating to PTI Holdings, Inc.'s Subordinated Ten Year Notes due 2002 (including the form of notes)                                                         
|4.5            | (2)  | Indenture dated as of December 17, 1992 relating to The Univision Network Holding Limited Partnership's Subordinated Ten Year Notes due 2002 (including form of notes)                              
|4.6            | (3)  | First Supplemental Indenture dated as of October 1, 1993 relating to PTI Holdings, Inc.'s Subordinated Ten Year Notes due 2002                                                                      
|4.7            | (3)  | First Supplemental Indenture dated as of October 1, 1993 relating to The Univision Network Holding Limited Partnership's Subordinated Ten Year Notes due 2002                                       
|4.8            | (11) | Indenture dated as of July 18, 2001, among Univision Communications Inc. and The Bank of New York as Trustee                                                                                        
|4.9            | (11) | Form of Supplemental Indenture to be delivered by additional guarantors, among Univision Communications Inc., the Guaranteeing Subsidiaries to be named therein, and The Bank of New York as Trustee
|10.1           | (6)  | Form of Indemnification Agreement between the Company and each of its executive officers and directors                                                                                              
|10.2           | (6)  | Registration Rights Agreement dated as of October 2, 1996                                                                                                                                           
|10.3           | (5)  | 1996 Performance Award Plan                                                                                                                                                                         
|10.4           | (4)  | Employment Agreement dated as of January 1, 1995, between Univision Television Group, Inc. and George W. Blank                                                                                      
|10.6           |      | Second Amended and Restated Program License Agreement dated as of December 19, 2001 by and between Venevision International Corp. and the Company                                                   
|10.7           |      | Second Amended and Restated Program License Agreement dated as of December 19, 2001 by and between Productora de Teleprogramas, S.A. de C.V. and the Company                                        
|10.8           | (6)  | Participation Agreement dated as of October 2, 1996 by and among the Company, Perenchio, Televisa, Venevision and certain of their affiliates                                                       
|10.9           |      | Amended and Restated International Program Rights Agreement dated as of December 19, 2001 by and among the Company, Venevision International, Inc. and Grupo Televisa, S.A.                         
|10.10          | (6)  | Amended and Restated Warrants issued to Televisa dated as of October 2, 1996                                                                                                                        
|10.10.1        |      | Amended and Restated Warrant issued to Televisa dated as of December 19, 2001                                                                                                                       
|               |      |                                                                                                                                                                                                     

38

---

|10.10.2 |      | Warrant Purchase Agreement dated as of December 19, 2001 by and between Grupo Televisa, S.A. and the Company                                                                                                                                                                                                                                                                               
|------- | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.10.3 |      | Warrants issued to Grupo Televisa, S.A. dated as of December 19, 2001                                                                                                                                                                                                                                                                                                                      
|10.11   | (6)  | Amended and Restated Warrant issued to Venevision dated as of October 2, 1996                                                                                                                                                                                                                                                                                                              
|10.11.1 |      | Form of Amended and Restated Warrant issued to Venevision                                                                                                                                                                                                                                                                                                                                  
|10.11.2 |      | Warrant Purchase Agreement dated as of December 19, 2001 by and between VVI Investments Corporation and the Company                                                                                                                                                                                                                                                                        
|10.11.3 |      | Warrants issued to VVI Investments Corporation dated as of December 19, 2001                                                                                                                                                                                                                                                                                                               
|10.11.4 |      | Warrant Purchase Agreement dated as of December 19, 2001 by and between Venevision Investments LLC and the Company                                                                                                                                                                                                                                                                         
|10.11.5 |      | Warrants issued to Venevision Investments LLC dated as of December 19, 2001                                                                                                                                                                                                                                                                                                                
|10.12   | (10) | Credit Agreement dated as of July 18, 2001 among Univision Communications Inc., a Delaware corporation, Univision of Puerto Rico Inc., a Delaware corporation, the lenders from time to time party hereto, the Chase Manhattan Bank, as
Administrative Agent, and BNP Paribas, as Documentation Agent                                                                                      
|10.13   |      | Subsidiary Guaranty dated as of July 18, 2001 made by the Univision guarantors to the Credit Agreement dated as of July 18, 2001 among Univision Communications Inc., a Delaware corporation, Univision of Puerto Rico Inc., a
Delaware corporation, the lenders from time to time party hereto, the Chase Manhattan Bank, as Administrative Agent, and BNP Paribas, as Documentation Agent
|10.15   | (5)  | Employment Agreement dated as of January 1, 1995 between the Univision Network Limited Partnership and Ray Rodriguez                                                                                                                                                                                                                                                                       
|10.16   | (9)  | Employment Agreement dated as of August 17, 2000 between the Univision Communications Inc. and C. Douglas Kranwinkle                                                                                                                                                                                                                                                                       
|10.17   |      | Employment Agreement dated as of January 1, 1996 between The Univision Network Limited Partnership and Andrew Hobson                                                                                                                                                                                                                                                                       
|10.30   | (7)  | Co-Production Agreement between the Company and Televisa                                                                                                                                                                                                                                                                                                                                   
|10.31   | (8)  | Reimbursement Agreement between the Company and Chartwell Services Inc.                                                                                                                                                                                                                                                                                                                    
|10.32   |      | Reimbursement Agreement between the Company and Chartwell Services New York, Inc. dated as of May 24, 2000                                                                                                                                                                                                                                                                                 
|10.33   |      | Amendment to Employment Agreement dated as of December 17, 2001 between Univision Communications Inc. and George W. Blank                                                                                                                                                                                                                                                                  
|10.33.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between Univision Communications Inc. and George W. Blank                                                                                                                                                                                                                                                                  
|10.34   |      | Amendment to Employment Agreement dated as of December 17, 2001 between The Univision Network Limited Partnership and Ray Rodriguez                                                                                                                                                                                                                                                        
|10.34.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between The Univision Network Limited Partnership and Ray Rodriguez                                                                                                                                                                                                                                                        
|        |      |                                                                                                                                                                                                                                                                                                                                                                                            

39

---

|10.35   |      | Amendment to Employment Agreement dated as of December 17, 2001 between Univision Communications Inc. and C. Douglas Kranwinkle                         
|------- | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|10.35.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between Univision Communications Inc. and C. Douglas Kranwinkle                         
|10.36   |      | Amendment to Employment Agreement dated as of December 17, 2001 between Univision Communications Inc. and Andrew Hobson                                 
|10.36.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between Univision Communications Inc. and Andrew Hobson                                 
|10.37   | (12) | Stock Purchase Agreement between USA Broadcasting, Inc. and Univision Communications Inc. dated as of January 17, 2001                                  
|10.38   | (12) | First Amendment to Stock Purchase Agreement between USA Broadcasting, Inc. and Univision Communications Inc. dated as of January 17, 2001               
|10.39   | (12) | Second Amendment to Stock Purchase Agreement between USA Broadcasting, Inc. and Univision Communications Inc. dated as of January 17, 2001              
|10.40   |      | Share Purchase Agreement dated as of December 19, 2001 by and between Fonovisa L.L.C. and Univision Communications Inc.                                 
|10.41   |      | Letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001                                           
|10.42   |      | First Amendment dated January 11, 2002 to Letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001 
|10.43   |      | Second Amendment dated January 11, 2002 to letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001
|10.44   |      | Third Amendment dated February 27, 2002 to letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001
|10.45   |      | Fourth Amendment dated March 7, 2002 to letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001   
|21.1    |      | Subsidiaries of the Company                                                                                                                             
|23.1    |      | Consents of expertsArthur Andersen LLP                                                                                                                 
|23.2    |      | Consents of expertsMcGladrey & Pullen, LLP                                                                                                             
|24.1    |      | Power of Attorney (contained on "Signatures" page)                                                                                                      
|99.1    |      | Letter to the SEC dated March 25, 2002 re: Confirmation of Arthur Andersen Representations                                                              

---

40

---

Schedule IIValuation
and Qualifying Accounts

All
other schedules for which provision is made in the applicable accounting regulation of the Securities Exchange Act of 1934 are not required under the related instructions or are
inapplicable, and therefore have been omitted.

On
December 28, 2001 the Company filed a Form 8-K, Item 5 (Other Events), noting that on December 19, 2001, the Company, Grupo Televisa, S.A. and
Venevision International Inc. announced that they reached a multi-faceted global alliance. A copy of the press release describing the alliance and its related transactions was filed as an
exhibit to Form 8-K.

Refer
to pages F-36 to F-67 for the separate financial statements of Entravision Communication Corporation, which is a significant subsidiary of the Company that
is less than 50% owned and is not required to be consolidated in the financial statements of the Company. At December 31, 2001, the Company accounted for its 32% investment in Entravision
Communication Corporation using the equity method of accounting.

41

---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on March 26, 2002.

| |  | UNIVISION COMMUNICATIONS INC.
| |  | -----------------------------
| |  | By:                          

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates so indicated.

Each
person whose signature appears below hereby authorizes Robert V. Cahill and George W. Blank, or either of them, as attorneys-in-fact to sign on his behalf,
individually, and in the capacity stated below, and to file all amendments and/or supplements to this Annual Report on Form 10-K.

|/s/A. JERROLD PERENCHIOA. Jerrold Perenchio |  | Chairman of the Board and Chief Executive Officer                                                                                    |  | March 26, 2002
|------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------ |  | --------------
|/s/GEORGE W. BLANKGeorge W. Blank           |  | Executive Vice President and Chief Financial Officer, in his capacities, as Chief Financial Officer and Principal Accounting Officer |  | March 26, 2002
|Emilio Azcarraga Jean                       |  | Director                                                                                                                             |  | March __, 2002
|/s/HAROLD GABAHarold Gaba                   |  | Director                                                                                                                             |  | March 26, 2002
|/s/ALAN HORNAlan Horn                       |  | Director                                                                                                                             |  | March 26, 2002
|/s/JOHN G. PERENCHIOJohn G. Perenchio       |  | Director                                                                                                                             |  | March 26, 2002
|/s/ALEJANDRO RIVERAAlejandro Rivera         |  | Director                                                                                                                             |  | March 26, 2002
|/s/RAY RODRIGUEZRay Rodriguez               |  | Director                                                                                                                             |  | March 26, 2002
|/s/JUAN VILLALONGAJuan Villalonga           |  | Director                                                                                                                             |  | March 26, 2002

42

---



INDEX TO EXHIBITS

|Exhibit
Number |      | Description                                                                                                                                                                                         
|-------------- | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            | (5)  | Amended and Restated Certificate of Incorporation of the Company                                                                                                                                    
|3.2            |      | Amended and Restated Bylaws of the Company                                                                                                                                                          
|3.3            | (7)  | Certificate of Amendment of Restated Certificate of Incorporation of the Company                                                                                                                    
|4.1            | (6)  | Form of specimen stock certificate                                                                                                                                                                  
|4.4            | (1)  | Indenture dated as of December 17, 1992 relating to PTI Holdings, Inc.'s Subordinated Ten Year Notes due 2002 (including the form of notes)                                                         
|4.5            | (2)  | Indenture dated as of December 17, 1992 relating to The Univision Network Holding Limited Partnership's Subordinated Ten Year Notes due 2002 (including form of notes)                              
|4.6            | (3)  | First Supplemental Indenture dated as of October 1, 1993 relating to PTI Holdings, Inc.'s Subordinated Ten Year Notes due 2002                                                                      
|4.7            | (3)  | First Supplemental Indenture dated as of October 1, 1993 relating to The Univision Network Holding Limited Partnership's Subordinated Ten Year Notes due 2002                                       
|4.8            | (11) | Indenture dated as of July 18, 2001, among Univision Communications Inc. and The Bank of New York as Trustee                                                                                        
|4.9            | (11) | Form of Supplemental Indenture to be delivered by additional guarantors, among Univision Communications Inc., the Guaranteeing Subsidiaries to be named therein, and The Bank of New York as Trustee
|10.1           | (6)  | Form of Indemnification Agreement between the Company and each of its executive officers and directors                                                                                              
|10.2           | (6)  | Registration Rights Agreement dated as of October 2, 1996                                                                                                                                           
|10.3           | (5)  | 1996 Performance Award Plan                                                                                                                                                                         
|10.4           | (4)  | Employment Agreement dated as of January 1, 1995, between Univision Television Group, Inc. and George W. Blank                                                                                      
|10.6           |      | Second Amended and Restated Program License Agreement dated as of December 19, 2001 by and between Venevision International Corp. and the Company                                                   
|10.7           |      | Second Amended and Restated Program License Agreement dated as of December 19, 2001 by and between Productora de Teleprogramas, S.A. de C.V. and the Company                                        
|10.8           | (6)  | Participation Agreement dated as of October 2, 1996 by and among the Company, Perenchio, Televisa, Venevision and certain of their affiliates                                                       
|10.9           |      | Amended and Restated International Program Rights Agreement dated as of December 19, 2001 by and among the Company, Venevision International, Inc. and Grupo Televisa, S.A.                         
|10.10          | (6)  | Amended and Restated Warrants issued to Televisa dated as of October 2, 1996                                                                                                                        
|10.10.1        |      | Amended and Restated Warrant issued to Televisa dated as of December 19, 2001                                                                                                                       
|10.10.2        |      | Warrant Purchase Agreement dated as of December 19, 2001 by and between Grupo Televisa, S.A. and the Company                                                                                        
|               |      |                                                                                                                                                                                                     

43

---

|10.10.3 |      | Warrants issued to Grupo Televisa, S.A. dated as of December 19, 2001                                                                                                                                                                                                                                                                                                                      
|------- | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.11   | (6)  | Amended and Restated Warrant issued to Venevision dated as of October 2, 1996                                                                                                                                                                                                                                                                                                              
|10.11.1 |      | Form of Amended and Restated Warrant issued to Venevision                                                                                                                                                                                                                                                                                                                                  
|10.11.2 |      | Warrant Purchase Agreement dated as of December 19, 2001 by and between VVI Investments Corporation and the Company                                                                                                                                                                                                                                                                        
|10.11.3 |      | Warrants issued to VVI Investments Corporation dated as of December 19, 2001                                                                                                                                                                                                                                                                                                               
|10.11.4 |      | Warrant Purchase Agreement dated as of December 19, 2001 by and between Venevision Investments LLC and the Company                                                                                                                                                                                                                                                                         
|10.11.5 |      | Warrants issued to Venevision Investments LLC dated as of December 19, 2001                                                                                                                                                                                                                                                                                                                
|10.12   | (10) | Credit Agreement dated as of July 18, 2001 among Univision Communications Inc., a Delaware corporation, Univision of Puerto Rico Inc., a Delaware corporation, the lenders from time to time party hereto, the Chase Manhattan Bank, as
Administrative Agent, and BNP Paribas, as Documentation Agent                                                                                      
|10.13   |      | Subsidiary Guaranty dated as of July 18, 2001 made by the Univision guarantors to the Credit Agreement dated as of July 18, 2001 among Univision Communications Inc., a Delaware corporation, Univision of Puerto Rico Inc., a
Delaware corporation, the lenders from time to time party hereto, the Chase Manhattan Bank, as Administrative Agent, and BNP Paribas, as Documentation Agent
|10.15   | (5)  | Employment Agreement dated as of January 1, 1995 between the Univision Network Limited Partnership and Ray Rodriguez                                                                                                                                                                                                                                                                       
|10.16   | (9)  | Employment Agreement dated as of August 17, 2000 between the Univision Communications Inc. and C. Douglas Kranwinkle                                                                                                                                                                                                                                                                       
|10.17   |      | Employment Agreement dated as of January 1, 1996 between The Univision Network Limited Partnership and Andrew Hobson                                                                                                                                                                                                                                                                       
|10.30   | (7)  | Co-Production Agreement between the Company and Televisa                                                                                                                                                                                                                                                                                                                                   
|10.31   | (8)  | Reimbursement Agreement between the Company and Chartwell Services Inc.                                                                                                                                                                                                                                                                                                                    
|10.32   |      | Reimbursement Agreement between the Company and Chartwell Services New York, Inc. dated as of May 24, 2000                                                                                                                                                                                                                                                                                 
|10.33   |      | Amendment to Employment Agreement dated as of December 17, 2001 between Univision Communications Inc. and George W. Blank                                                                                                                                                                                                                                                                  
|10.33.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between Univision Communications Inc. and George W. Blank                                                                                                                                                                                                                                                                  
|10.34   |      | Amendment to Employment Agreement dated as of December 17, 2001 between The Univision Network Limited Partnership and Ray Rodriguez                                                                                                                                                                                                                                                        
|10.34.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between The Univision Network Limited Partnership and Ray Rodriguez                                                                                                                                                                                                                                                        
|10.35   |      | Amendment to Employment Agreement dated as of December 17, 2001 between Univision Communications Inc. and C. Douglas Kranwinkle                                                                                                                                                                                                                                                            
|        |      |                                                                                                                                                                                                                                                                                                                                                                                            

44

---

|10.35.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between Univision Communications Inc. and C. Douglas Kranwinkle                         
|------- | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|10.36   |      | Amendment to Employment Agreement dated as of December 17, 2001 between Univision Communications Inc. and Andrew Hobson                                 
|10.36.1 |      | Amendment to Employment Agreement dated as of November 14, 2001 between Univision Communications Inc. and Andrew Hobson                                 
|10.37   | (12) | Stock Purchase Agreement between USA Broadcasting, Inc. and Univision Communications Inc. dated as of January 17, 2001                                  
|10.38   | (12) | First Amendment to Stock Purchase Agreement between USA Broadcasting, Inc. and Univision Communications Inc. dated as of January 17, 2001               
|10.39   | (12) | Second Amendment to Stock Purchase Agreement between USA Broadcasting, Inc. and Univision Communications Inc. dated as of January 17, 2001              
|10.40   |      | Share Purchase Agreement dated as of December 19, 2001 by and between Fonovisa L.L.C. and Univision Communications Inc.                                 
|10.41   |      | Letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001                                           
|10.42   |      | First Amendment dated January 11, 2002 to Letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001 
|10.43   |      | Second Amendment dated January 11, 2002 to letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001
|10.44   |      | Third Amendment dated February 27, 2002 to letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001
|10.45   |      | Fourth Amendment dated March 7, 2002 to letter Agreement by and between Univision Communications Inc. and Grupo Televisa S.A. dated December 19, 2001   
|21.1    |      | Subsidiaries of the Company                                                                                                                             
|23.1    |      | Consents of expertsArthur Andersen LLP                                                                                                                 
|23.2    |      | Consents of expertsMcGladrey & Pullen, LLP                                                                                                             
|24.1    |      | Power of Attorney (contained on "Signatures" page)                                                                                                      
|99.1    |      | Letter to SEC dated March 25, re: Confirmation of Arthur Andersen Representations                                                                       

---

45

---

46

---



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To
the Stockholders of Univision Communications Inc.:

We
have audited in accordance with auditing standards generally accepted in the United States, the consolidated financial statements of Univision Communications Inc. (a Delaware
corporation) and subsidiaries for the years ended December 31, 2001, 2000 and 1999 included in Item 8 of this Form 10-K and have issued our report thereon dated
February 4, 2002. Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The schedule listed in Item 14(b) of this
Form 10-K is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the
basic consolidated financial statements. The schedule for the years ended December 31, 1999, 2000 and 2001 has been subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial
statements taken as a whole.

ARTHUR ANDERSEN LLP

Roseland,
New Jersey
February 4, 2002

47

---



SCHEDULE II

UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        VALUATION AND QUALIFYING ACCOUNTS        For the Years Ended December 31, 1999, 2000 and 2001  (Dollars in
thousands)

|                                                     |  |   |          | Additions |   |         |   |   |      
|---------------------------------------------------- |  | - | -------- | --------- | - | ------- | - | - | -----
|
|
|For the Year Ended December 31, 1999                 |  |   |          |           |   |         |   |   |      
|Allowance for doubtful accounts                      |  | $ | (8,079   | )         | $ | (1,192  | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|Accumulated amortization of intangible assets        |  | $ | (219,859 | )         | $ | (39,171 | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|Accumulated amortization of deferred financing costs |  | $ | (3,650   | )         | $ | (1,441  | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|For the Year Ended December 31, 2000                 |  |   |          |           |   |         |   |   |      
|Allowance for doubtful accounts                      |  | $ | (7,625   | )         | $ | (3,106  | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|Accumulated amortization of intangible assets        |  | $ | (258,151 | )         | $ | (38,737 | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|Accumulated amortization of deferred financing costs |  | $ | (5,091   | )         | $ | (1,361  | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|For the Year Ended December 31, 2001                 |  |   |          |           |   |         |   |   |      
|Allowance for doubtful accounts                      |  | $ | (8,754   | )         | $ | (8,680  | ) | $ | (709)
|Allowance for returns                                |  |   |         |           |   | (689    | ) |   |     
|                                                     |  |   |          |           |   |         |   |   |      
|Allowance for doubtful accounts and returns          |  | $ | (8,754   | )         | $ | (9,369  | ) | $ | (709 
|                                                     |  |   |          |           |   |         |   |   |      
|Accumulated amortization of intangible assets        |  | $ | (296,888 | )         | $ | (40,969 | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      
|Accumulated amortization of deferred financing costs |  | $ | (6,452   | )         | $ | (2,488  | ) | $ |     
|                                                     |  |   |          |           |   |         |   |   |      

---

48

---



UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                              |                                                                                                                 | Page
|------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ----
|Univision Communications Inc.                                 |                                                                                                                 |     
|                                                              | Report of Independent Public Accountants                                                                        |     
|                                                              | Consolidated Balance Sheets at December 31, 2001 and 2000                                                       |     
|                                                              | Consolidated Statements of Income for the Years Ended December 31, 2001, 2000 and 1999                          |     
|                                                              | Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1999, 2000 and 2001 |     
|                                                              | Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999                      |     
|                                                              | Notes to Consolidated Financial Statements                                                                      |     
|Financial Statements of Entravision Communication Corporation |                                                                                                                 | F-36

F-1

---



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Univision Communications Inc.:

We
have audited the accompanying consolidated balance sheets of Univision Communications Inc. (a Delaware corporation) and subsidiaries as of December 31, 2001 and 2000,
and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These consolidated financial
statements are the responsibility of the Company's management of Univision Communications Inc. and subsidiaries. Our responsibility is to express an opinion on these financial statements based
on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Univision Communications Inc. and
subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity
with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Roseland,
New Jersey
February 4, 2002

F-2

---



UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS  (In thousands, except share and per-share data)

|                                                                                                                                                                                                                |                                                                                                                                                                                   | December 31,               |          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ---------
|
|Current assets:                                                                                                                                                                                                 |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                | Cash                                                                                                                                                                              |                            | $        
|                                                                                                                                                                                                                | Accounts receivable, less allowance for doubtful accounts and returns of $11,492 in 2001 and $8,754 in 2000                                                                       |                            |          
|                                                                                                                                                                                                                | Program rights                                                                                                                                                                    |                            |          
|                                                                                                                                                                                                                | Prepaid expenses and other                                                                                                                                                        |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   | Total current assets       |          
|Property and equipment, net, less accumulated depreciation of $142,661 in 2001 and $103,087
in 2000                                                                                                             |                                                                                                                                                                                   |                            | 445,483  
|Intangible assets, net, less accumulated amortization of $337,857 in 2001 and $296,888 in 2000                                                                                                                  |                                                                                                                                                                                   |                            | 1,532,095
|Deferred financing costs, net, less accumulated amortization of $1,747 in 2001 and $6,452 in 2000                                                                                                               |                                                                                                                                                                                   |                            | 20,935   
|Deferred income taxes, net                                                                                                                                                                                      |                                                                                                                                                                                   |                            |         
|Program rights                                                                                                                                                                                                  |                                                                                                                                                                                   |                            | 18,862   
|Investment in unconsolidated subsidiaries                                                                                                                                                                       |                                                                                                                                                                                   |                            | 535,777  
|Other assets                                                                                                                                                                                                    |                                                                                                                                                                                   |                            | 14,299   
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|Total assets                                                                                                                                                                                                    |                                                                                                                                                                                   | $                          | 3,163,544
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                            |                                                                                                                                                                                   |                            |          
|Current liabilities:                                                                                                                                                                                            |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                | Accounts payable and accrued liabilities                                                                                                                                          |                            | $        
|                                                                                                                                                                                                                | Income taxes                                                                                                                                                                      |                            |          
|                                                                                                                                                                                                                | Accrued interest                                                                                                                                                                  |                            |          
|                                                                                                                                                                                                                | Accrued license fees                                                                                                                                                              |                            |          
|                                                                                                                                                                                                                | Deferred advertising revenues                                                                                                                                                     |                            |          
|                                                                                                                                                                                                                | Program rights obligations                                                                                                                                                        |                            |          
|                                                                                                                                                                                                                | Current portion of long-term debt and capital lease obligations                                                                                                                   |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   | Total current liabilities  |          
|Long-term debt including accrued interest                                                                                                                                                                       |                                                                                                                                                                                   |                            | 985,509  
|Notes payable due USA Broadcasting                                                                                                                                                                              |                                                                                                                                                                                   |                            | 592,175  
|Capital lease obligations                                                                                                                                                                                       |                                                                                                                                                                                   |                            | 84,334   
|Deferred advertising revenues                                                                                                                                                                                   |                                                                                                                                                                                   |                            | 13,960   
|Program rights obligations                                                                                                                                                                                      |                                                                                                                                                                                   |                            | 10,919   
|Deferred tax liabilities                                                                                                                                                                                        |                                                                                                                                                                                   |                            | 5,657    
|Other long-term liabilities                                                                                                                                                                                     |                                                                                                                                                                                   |                            | 18,530   
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   | Total liabilities          |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|Redeemable convertible preferred stock, $.01 par value, with a conversion rate of 28.252 to Class A Common Stock (375,000 shares issued and outstanding at December 31, 2001)                                   |                                                                                                                                                                                   |                            | 369,500  
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|Redeemable convertible 6% preferred stock, $.01 par value, with a conversion price of $8.171875 to Class A Common Stock (0 and 6,000 shares issued and outstanding at December 31, 2001 and 2000, respectively) |                                                                                                                                                                                   |                            |         
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|Stockholders' equity:                                                                                                                                                                                           |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                | Preferred stock, $.01 par value (10,000,000 shares authorized; 0 issued and outstanding)                                                                                          |                            |          
|                                                                                                                                                                                                                | Common stock, $.01 par value (492,000,000 shares authorized; 210,479,125 and 207,081,700 shares issued including shares in treasury, at December 31, 2001 and 2000, respectively) |                            |          
|                                                                                                                                                                                                                | Paid-in-capital                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                | Retained earnings                                                                                                                                                                 |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            | 835,473  
|                                                                                                                                                                                                                | Less common stock held in treasury (1,017,180 shares at cost at December 31, 2001 and 2000)                                                                                       |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   | Total stockholders' equity |          
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          
|Total liabilities and stockholders' equity                                                                                                                                                                      |                                                                                                                                                                                   | $                          | 3,163,544
|                                                                                                                                                                                                                |                                                                                                                                                                                   |                            |          

See Notes to Consolidated Financial Statements

F-3

---



UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF INCOME        For the Years Ended December 31,  (In thousands, except share and
per-share data)

|                                                                            |  | 2001 |             | 2000 |   | 1999        |  
|--------------------------------------------------------------------------- |  | ---- | ----------- | ---- | - | ----------- | -
|Net revenues                                                                |  | $    | 887,870     |      | $ | 863,459     |  
|                                                                            |  |      |             |      |   |             |  
|Direct operating expenses                                                   |  |      | 355,761     |      |   | 312,381     |  
|Selling, general and administrative expenses                                |  |      | 231,610     |      |   | 223,023     |  
|Depreciation and amortization                                               |  |      | 84,069      |      |   | 66,765      |  
|                                                                            |  |      |             |      |   |             |  
|Operating income                                                            |  |      | 216,430     |      |   | 261,290     |  
|Interest expense, net                                                       |  |      | 53,463      |      |   | 30,097      |  
|Amortization of deferred financing costs                                    |  |      | 2,488       |      |   | 1,361       |  
|Equity loss in unconsolidated subsidiaries                                  |  |      | 42,897      |      |   | 4,828       |  
|                                                                            |  |      |             |      |   |             |  
|Income before taxes and extraordinary loss on extinguishment of debt        |  |      | 117,582     |      |   | 225,004     |  
|Provision for income taxes                                                  |  |      | 62,865      |      |   | 108,081     |  
|                                                                            |  |      |             |      |   |             |  
|Income before extraordinary loss on extinguishment of debt                  |  |      | 54,717      |      |   | 116,923     |  
|Extraordinary loss on extinguishment of debt, net of tax                    |  |      | (2,306      | )    |   |            |  
|                                                                            |  |      |             |      |   |             |  
|Net income                                                                  |  |      | 52,411      |      |   | 116,923     |  
|Preferred stock dividends                                                   |  |      | (70         | )    |   | (518        | )
|                                                                            |  |      |             |      |   |             |  
|Net income available to common stockholders                                 |  | $    | 52,341      |      | $ | 116,405     |  
|                                                                            |  |      |             |      |   |             |  
|Basic Earnings Per Share                                                    |  |      |             |      |   |             |  
|Income per share available to common stockholders before extraordinary loss |  | $    | 0.26        |      | $ | 0.57        |  
|Extraordinary loss per share                                                |  |      | (0.01       | )    |   |            |  
|                                                                            |  |      |             |      |   |             |  
|Net income per share available to common stockholders                       |  | $    | 0.25        |      | $ | 0.57        |  
|                                                                            |  |      |             |      |   |             |  
|Weighted average common shares outstanding                                  |  |      | 208,110,727 |      |   | 204,893,438 |  
|                                                                            |  |      |             |      |   |             |  
|Diluted Earnings Per Share                                                  |  |      |             |      |   |             |  
|Income per share available to common stockholders before extraordinary loss |  | $    | 0.23        |      | $ | 0.49        |  
|Extraordinary loss per share                                                |  |      | (0.01       | )    |   |            |  
|                                                                            |  |      |             |      |   |             |  
|Net income per share available to common stockholders                       |  | $    | 0.22        |      | $ | 0.49        |  
|                                                                            |  |      |             |      |   |             |  
|Weighted average common shares outstanding                                  |  |      | 239,817,378 |      |   | 238,963,587 |  
|                                                                            |  |      |             |      |   |             |  

See
Notes to Consolidated Financial Statements

F-4

---



UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY        For the Years Ended December 31, 1999, 2000
and 2001  (In thousands)

|                                                         |  | Common
Stock |       | Paid-in-
Capital |   | Retained
Earnings |   | Common
Stock in
Treasury |         | Total |  
|-------------------------------------------------------- |  | ------------ | ----- | ---------------- | - | ----------------- | - | ------------------------ | ------- | ----- | -
|Balance, January 1, 1999                                 |  | $            | 1,818 |                  | $ | 387,863           |   | $                        | 22,369  |       | $
|Net income for the year                                  |  |              |      |                  |   |                  |   |                          | 80,933  |       |  
|Preferred stock dividends declared                       |  |              |      |                  |   |                  |   |                          | (540    | )     |  
|Exercise of warrants                                     |  |              | 202   |                  |   | (202              | ) |                          |        |       |  
|Exercise of stock options including related tax benefits |  |              | 23    |                  |   | 38,714            |   |                          |        |       |  
|                                                         |  |              |       |                  |   |                   |   |                          |         |       |  
|Balance, December 31, 1999                               |  |              | 2,043 |                  |   | 426,375           |   |                          | 102,762 |       |  
|Net income for the year                                  |  |              |      |                  |   |                  |   |                          | 116,923 |       |  
|Preferred stock dividends declared                       |  |              |      |                  |   |                  |   |                          | (518    | )     |  
|Conversion of redeemable convertible 6% preferred stock  |  |              | 4     |                  |   | 2,996             |   |                          |        |       |  
|Exercise of stock options including related tax benefits |  |              | 24    |                  |   | 66,856            |   |                          |        |       |  
|                                                         |  |              |       |                  |   |                   |   |                          |         |       |  
|Balance, December 31, 2000                               |  |              | 2,071 |                  |   | 496,227           |   |                          | 219,167 |       |  
|Net income for the year                                  |  |              |      |                  |   |                  |   |                          | 52,411  |       |  
|Preferred stock dividends declared                       |  |              |      |                  |   |                  |   |                          | (70     | )     |  
|Conversion of redeemable convertible 6% preferred stock  |  |              | 7     |                  |   | 5,993             |   |                          |        |       |  
|Exercise of stock options including related tax benefits |  |              | 27    |                  |   | 59,640            |   |                          |        |       |  
|                                                         |  |              |       |                  |   |                   |   |                          |         |       |  
|Balance, December 31, 2001                               |  | $            | 2,105 |                  | $ | 561,860           |   | $                        | 271,508 |       | $
|                                                         |  |              |       |                  |   |                   |   |                          |         |       |  

See
Notes to Consolidated Financial Statements

F-5

---



UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS        For the Years Ended December 31,  (In thousands)

|                                                                           |                                                                       | 2001 |          | 2000       |   | 1999     |         
|-------------------------------------------------------------------------- | --------------------------------------------------------------------- | ---- | -------- | ---------- | - | -------- | --------
|Net income                                                                 |                                                                       | $    | 52,411   |            | $ | 116,923  |         
|Adjustments to reconcile net income to net cash from operating activities: |                                                                       |      |          |            |   |          |         
|                                                                           | Depreciation                                                          |      |          | 43,100     |   |          | 28,028  
|                                                                           | Loss on sale of fixed assets                                          |      |          | 137        |   |          | 1       
|                                                                           | Equity loss in unconsolidated subsidiaries                            |      |          | 42,589     |   |          | 4,828   
|                                                                           | Amortization of intangible assets and financing costs                 |      |          | 43,596     |   |          | 40,098  
|                                                                           | Non-cash items                                                        |      |          | (3,040     | ) |          |        
|                                                                           | Extraordinary loss on extinguishment of debt, net of tax              |      |          | 2,306      |   |          |        
|Changes in assets and liabilities:                                         |                                                                       |      |          |            |   |          |         
|                                                                           | Accounts receivable, net                                              |      |          | (10,961    | ) |          | (13,081 
|                                                                           | Intangible assets, net                                                |      |          |           |   |          | (41     
|                                                                           | Deferred income taxes                                                 |      |          | 13,439     |   |          | 5,533   
|                                                                           | License fees payable                                                  |      |          | 125,926    |   |          | 127,441 
|                                                                           | Payment of license fees                                               |      |          | (127,921   | ) |          | (124,451
|                                                                           | Program rights                                                        |      |          | 124        |   |          | (26,441 
|                                                                           | Prepaid expenses and other assets                                     |      |          | (13,017    | ) |          | (16,785 
|                                                                           | Accounts payable and accrued liabilities                              |      |          | (13,009    | ) |          | 27,693  
|                                                                           | Income taxes                                                          |      |          | 398        |   |          | 16,995  
|                                                                           | Income tax benefit from options exercised                             |      |          | 30,261     |   |          | 41,401  
|                                                                           | Accrued interest                                                      |      |          | 27,121     |   |          | 9,140   
|                                                                           | Program rights obligations                                            |      |          | 3,734      |   |          | (858    
|                                                                           | Other, net                                                            |      |          | 101        |   |          | (186    
|                                                                           |                                                                       |      |          |            |   |          |         
|Net cash provided by operating activities                                  |                                                                       |      | 217,295  |            |   | 236,238  |         
|                                                                           |                                                                       |      |          |            |   |          |         
|Cash flow from investing activities:                                       |                                                                       |      |          |            |   |          |         
|                                                                           | Station acquisitions                                                  |      |          | (529,009   | ) |          |        
|                                                                           | Investment in unconsolidated subsidiaries                             |      |          | (175,807   | ) |          | (393,292
|                                                                           | Capital expenditures                                                  |      |          | (130,188   | ) |          | (64,669 
|                                                                           | Proceeds from dissolution of investment in Ask Jeeves en Español, Inc |      |          | 19,385     |   |          |        
|                                                                           | Proceeds from sale of Albuquerque station                             |      |          |           |   |          |        
|                                                                           | Other                                                                 |      |          | (556       | ) |          | 11      
|                                                                           |                                                                       |      |          |            |   |          |         
|Net cash used in investing activities                                      |                                                                       |      | (816,175 | )          |   | (457,950 | )       
|                                                                           |                                                                       |      |          |            |   |          |         
|Cash flow from financing activities:                                       |                                                                       |      |          |            |   |          |         
|                                                                           | Proceeds from issuance of long-term debt                              |      |          | 1,217,350  |   |          | 390,000 
|                                                                           | Proceeds from Senior Notes                                            |      |          | 495,370    |   |          |        
|                                                                           | Proceeds from convertible preferred stock                             |      |          | 375,000    |   |          |        
|                                                                           | Repayment of long-term debt                                           |      |          | (1,167,686 | ) |          | (155,814
|                                                                           | Exercise of stock options                                             |      |          | 27,889     |   |          | 20,688  
|                                                                           | Preferred stock dividends paid                                        |      |          | (130       | ) |          | (547    
|                                                                           | Purchase of Junior Subordinated Notes                                 |      |          |           |   |          |        
|                                                                           | Deferred financing costs                                              |      |          | (22,612    | ) |          | (645    
|                                                                           |                                                                       |      |          |            |   |          |         
|Net cash provided by (used in) financing activities                        |                                                                       |      | 925,181  |            |   | 253,682  |         
|                                                                           |                                                                       |      |          |            |   |          |         
|Net increase in cash                                                       |                                                                       |      | 326,301  |            |   | 31,970   |         
|Cash beginning of year                                                     |                                                                       |      | 54,528   |            |   | 22,558   |         
|                                                                           |                                                                       |      |          |            |   |          |         
|Cash end of year                                                           |                                                                       | $    | 380,829  |            | $ | 54,528   |         
|                                                                           |                                                                       |      |          |            |   |          |         
|Supplemental disclosure of cash flow information:                          |                                                                       |      |          |            |   |          |         
|                                                                           | Interest paid                                                         |      | $        | 29,116     |   | $        | 20,657  
|                                                                           |                                                                       |      |          |            |   |          |         
|                                                                           | Income taxes paid                                                     |      | $        | 18,946     |   | $        | 43,910  
|                                                                           |                                                                       |      |          |            |   |          |         

See Notes to Consolidated Financial Statements.

F-6

---



UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES        Notes to Consolidated Financial Statements        December 31, 2001

1. Organization of the Company

The operations of Univision Communications Inc. and its wholly owned subsidiaries (the "Company"), the leading Spanish-language media company in the United
States, include Univision Network, the most-watched Spanish-language television network in the United States; Univision Television Group ("UTG"), which owns and operates 16
full-power and 6 low-power television stations ("UTG O&Os"), including full-power stations in 11 of the top 15 U.S. Hispanic markets; Galavisión, the
country's leading Spanish-language cable network; Univision Music Group, which includes a 50% interest in Disa Records ("Disa"), one of the leading music publishing and recording companies in Mexico
and Univision Online, Inc. ("Univision Online"), which operates the Company's Internet portal,Univision.com. Univision Network's signal covers
97 percent of all U.S. Hispanic households through UTG O&Os, Univision Network's affiliates (16 full-power and 27 low-power stations) and cable affiliates.

UTG's
15 full-power, Spanish-language television stations are located in Los Angeles, New York, Miami, Houston, Chicago, Dallas, San Francisco, San Antonio, Phoenix, Fresno,
Sacramento, Cleveland, Atlanta, Philadelphia and Killeen, and the Company's one English-language, full-power television station is located in Bakersfield. UTG also owns and operates 6
low-power, Spanish-language television stations serving Austin, Bakersfield, Fort Worth, Phoenix, Santa Rosa and Tucson. The Company's Spanish-language television stations are affiliated
with Univision Network, and the English-language station is affiliated with UPN (United Paramount Network).

On
January 14, 2002, the Company launched TeleFutura, which consists of TeleFutura Network and TeleFutura Television Group ("TTG"). TTG owns and operates 14 full-power
and 12 low-power
television stations ("TTG O&Os"), including full-power stations in 8 of the top 10 U.S. Hispanic markets. TeleFutura Network's signal covers approximately 72% of all U.S. Hispanic
households through TTG O&Os and TeleFutura Network's affiliates (1 full-power and 17 low-power stations). The TTG's 14 full-power, Spanish-language television
stations are located in Los Angeles, New York (2 stations), Miami, Houston, Chicago, Dallas, San Francisco, Phoenix, Washington, Tampa, Orlando, Boston, and Tucson. TTG also owns and operates 12
low-power, Spanish-language television stations serving Hartford, Lompoc, Paso Robles, Philadelphia, Phoenix, San Antonio, San Luis Obispo, Santa Barbara, Santa Maria and Tucson.

2. Significant Accounting Policies



The consolidated financial statements include the accounts and operations of the Company. All significant intercompany accounts and transactions have been
eliminated. For investments in which the Company owns or controls less than 20% of the voting shares and does not have significant influence over operating and financial policies, the cost method of
accounting is used. For investments in which the Company owns or controls more than 20% of the voting shares and does have significant influence over operating and financial policies, the equity
method of accounting is used. Accordingly, the Company's share of the earnings and losses of these companies are included in the equity loss in unconsolidated subsidiaries in the accompanying
consolidated statements of income of the Company. Certain reclassifications have been made to the prior year's financial statements to conform to the current year's presentation.

F-7

---



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.



In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS
No. 144 supercedes SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets to be Disposed of" and the accounting and reporting provisions of Accounting Principles
Board Opinion No. 30, "Reporting the Results of Operations." However, SFAS No. 144 retains the fundamental provisions of SFAS No. 121 for (a) recognition and measurement of
the impairment of long-lived assets to be held and used and (b) measurement of long-lived assets to be disposed of by sale. SFAS No. 144 is effective for
financial statements issued for fiscal years beginning after December 15, 2001, and interim periods within those years. The Company will adopt this statement in 2002 and is currently assessing
the impact of this new standard.



Property and equipment is carried on the basis of lower of cost or market. Depreciation and amortization is provided using the straight-line method
over the estimated useful lives of the assets. Buildings and improvements are depreciated over 5 to 40 years, broadcast and other equipment over 3 to 7 years. Leasehold improvements are
amortized over the remaining life of the lease. Depreciation and amortization include depreciation on property and equipment of $43,100,000 in 2001, $28,028,000 in 2000 and $23,412,000 in 1999, of
which $36,242,000, $23,358,000 and $19,996,000, respectively, relate to direct operating expenses and $6,858,000, $4,670,000 and $3,416,000, respectively, relate to selling, general and administrative
expenses.



Intangible assets consist of amounts by which the cost of acquisitions exceeded the fair values assigned to net tangible assets. The intangible assets primarily
represent broadcasting licenses, affiliation agreements, acquisition costs and goodwill. In 2001, acquisition costs and substantially all other intangible assets were amortized using the
straight-line method over 20 to 40 years.

F-8

---

Intangible
assets and accumulated amortization consist of the following as of December 31, 2001 and 2000:

2001

2000(In thousands)Broadcast licenses

$
1,205,391

$
286,949Affiliation agreements


427,041


427,041Goodwill and other intangible assets


237,520


95,4421,869,952


809,432Accumulated amortization


(337,857
)

(296,888
)$
1,532,095

$
512,544


On
June 30, 2001, the Financial Accounting Standards Board issued SFAS No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets". SFAS
No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting and eliminates the pooling method of accounting. SFAS
No. 141 will not have an impact on the Company's business since the Company has historically accounted for all business combinations using the purchase method of accounting. With the adoption
of SFAS No. 142, goodwill and other intangibles with an indefinite life, such as broadcast licenses, associated with acquisitions consummated prior to June 30, 2001 will not be amortized
after December 31, 2001 and those related to acquisitions after June 30, 2001 will never be amortized. However, goodwill and other intangibles will be subject to at least an annual
assessment for impairment and more frequently if circumstances indicate a possible impairment exists. The Company is in the process of evaluating the effect of SFAS No. 142 as it relates to
assessing impairment of its intangible assets and does not expect any impairment losses at adoption. In addition, under SFAS No. 142, an acquired intangible asset should be separately
recognized if the benefit of the intangible is obtained through contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed, rented, or exchanged. Intangible
assets with measurable lives will be amortized over their respective useful lives.

The
adoption of SFAS No. 142 will result in a substantial reduction of intangible amortization expense for the Company in 2002 since broadcast licenses, affiliation agreements and
goodwill will no longer be amortized. In 2001, the Company's amortization of goodwill and other intangibles was approximately $41,000,000; however, since most of the Company's intangible amortization
is non-deductible for tax purposes, the Company only realized a $5,000,000 tax benefit. In 2002, the Company's expected intangible amortization expense will be approximately $1,000,000,
primarily related to favorable tower leases acquired. Below is the unaudited, pro-forma effect this accounting change would have had on reported

F-9

---

income before extraordinary loss, net income and earnings-per-share amounts had SFAS No. 142 had been in effect:

|                                                                                      |  | 2001 |             | 2000 |   | 1999        |  
|------------------------------------------------------------------------------------- |  | ---- | ----------- | ---- | - | ----------- | -
|
|Reported income before extraordinary items available to common stockholders           |  | $    | 54,647      |      | $ | 116,405     |  
|Reduction of intangible amortization                                                  |  |      | 36,125      |      |   | 34,750      |  
|Elimination of equity method goodwill amortization                                    |  |      | 397         |      |   | (521        | )
|                                                                                      |  |      |             |      |   |             |  
|                                                                                      |  |      | 36,522      |      |   | 34,229      |  
|                                                                                      |  |      |             |      |   |             |  
|Adjusted income before extraordinary items available to common stockholders           |  |      | 91,169      |      |   | 150,634     |  
|Extraordinary loss on extinguishment of debt                                          |  |      | (2,306      | )    |   |            |  
|                                                                                      |  |      |             |      |   |             |  
|Adjusted net income available to common stockholders                                  |  | $    | 88,863      |      | $ | 150,634     |  
|                                                                                      |  |      |             |      |   |             |  
|Basic Earnings Per Share                                                              |  |      |             |      |   |             |  
|Reported income before extraordinary items per share available to common stockholders |  | $    | 0.26        |      | $ | 0.57        |  
|Reduction of intangible amortization                                                  |  |      | 0.18        |      |   | 0.17        |  
|Elimination of equity method goodwill amortization                                    |  |      |            |      |   |            |  
|                                                                                      |  |      |             |      |   |             |  
|                                                                                      |  |      | 0.18        |      |   | 0.17        |  
|                                                                                      |  |      |             |      |   |             |  
|Adjusted income before extraordinary items per share available to common stockholders |  |      | 0.44        |      |   | 0.74        |  
|Extraordinary loss on extinguishment of debt                                          |  |      | (0.01       | )    |   |            |  
|                                                                                      |  |      |             |      |   |             |  
|Adjusted net income per share available to common stockholders                        |  | $    | 0.43        |      | $ | 0.74        |  
|                                                                                      |  |      |             |      |   |             |  
|Weighted average common shares outstanding                                            |  |      | 208,110,727 |      |   | 204,893,438 |  
|                                                                                      |  |      |             |      |   |             |  
|Diluted Earnings Per Share                                                            |  |      |             |      |   |             |  
|Reported income before extraordinary items per share available to common stockholders |  | $    | 0.23        |      | $ | 0.49        |  
|Reduction of intangible amortization                                                  |  |      | 0.15        |      |   | 0.15        |  
|Elimination of equity method goodwill amortization                                    |  |      |            |      |   |            |  
|                                                                                      |  |      |             |      |   |             |  
|                                                                                      |  |      | 0.15        |      |   | 0.15        |  
|                                                                                      |  |      |             |      |   |             |  
|Adjusted income before extraordinary items per share available to common stockholders |  |      | 0.38        |      |   | 0.64        |  
|Extraordinary loss on extinguishment of debt                                          |  |      | (0.01       | )    |   |            |  
|                                                                                      |  |      |             |      |   |             |  
|Adjusted net income per share available to common stockholders                        |  | $    | 0.37        |      | $ | 0.64        |  
|                                                                                      |  |      |             |      |   |             |  
|Weighted average common shares outstanding                                            |  |      | 239,817,378 |      |   | 238,963,587 |  
|                                                                                      |  |      |             |      |   |             |  

F-10

---

Subsequent to acquisitions, the Company continually evaluates whether later events and circumstances have occurred which indicate that the
remaining estimated useful life of intangible assets may warrant revision or that the remaining balance of such assets may not be recoverable. The Company has evaluated its intangible asset balances
at December 31, 2001 and has determined that these assets have not been impaired.



Deferred financing costs are amortized over the life of the related debt using the straight-line method.



Costs incurred in connection with the production of or purchase of rights to programs to be broadcast within one year are classified as current assets, while
costs of those programs to be broadcast subsequently are considered non-current. Program costs are charged to operating expense as the programs are broadcast.



Accounts payable and accrued liabilities consist of the following as of December 31, 2001 and 2000:

2001

2000(In thousands)Trade accounts payable and accruals

$
70,635

$
58,905Severance and legal


15,573


7,313Galavisión cable launch support


3,774


6,046Purchase accounting liabilities


14,553


1,568Research liabilities


940


1,478Accrued compensation


7,570


22,470Other


6,976


8,638$
120,021

$
106,418




Net revenues comprise gross revenues from the Company's broadcast, cable, internet and music businesses, including subscriber fees, a network service fee payable
to the Company by the affiliated stations, less agency commissions and compensation costs paid to certain affiliated stations. The Company's gross revenues are recognized when advertising spots are
aired for its broadcast and cable businesses and when served for its Internet business. Univision Music Group gross revenues are recognized based on product shipments to distributors less an allowance
for returns. Substantially all of the Company's net revenues are derived from the advertising revenues of its broadcast and cable businesses. No one advertiser represented more than 5% of gross
advertising revenues of the Company in 2001, 2000 or 1999.

F-11

---



Income taxes are recognized during the year in which transactions enter into the determination of financial statement income. Deferred taxes are provided for
temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws (see Note 9).



In June 1998, the Financial Accounting Standards Board issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." In
June 2000, the Financial Accounting Standards Board issued SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities," which amended SFAS No. 133.
These Statements establish accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or a liability measured at its fair value. The Statements require that changes in the derivative's fair value be recognized currently in earnings unless specific hedge
accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement and requires that a
company formally document, designate and assess the effectiveness of transactions that receive hedge accounting. The Company was required to adopt these standards in the first quarter of 2001.

The
Company has evaluated the requirements of these statements and believes that it currently has no derivative instruments or hedging activities under the guidelines of SFAS Nos. 133
and 138.



The Company's Board of Directors approved a two-for-one stock split for all common stockholders of record as of July 28, 2000. The
common stock split became effective in the form of a stock dividend payable on August 11, 2000. Each stockholder received one new share of common stock for each outstanding share of the
Company's common stock held as of the record date. All references to the number of shares and to per-share data included in the consolidated financial statements and footnotes have been
adjusted to reflect the stock split on a retroactive basis.



SFAS No. 143 addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. This statement is effective for fiscal years beginning after June 15, 2002. The Company is currently assessing the impact of this new standard.

F-12

---



3. Related Party Transactions



The Company has entered into a number of agreements with both Grupo Televisa, S.A. and its affiliates ("Televisa") and Corporacion Venezolana de Television, C.A.
(VENEVISION) and its affiliates ("Venevision"). The Company has Program License Agreements with both Televisa and Venevision with a royalty fee of 15% of Combined Net Time Sales (time sales from
broadcasting, including trade, television subscription and barter revenues, less advertising commissions, certain special event revenues, music license fees, outside affiliate compensation, time sales
relating to advertising sold to Televisa and provided to Venevision and taxes other than withholding taxes) of Univision Network, UTG and Galavisión until the termination of the
agreements on December 2017. The Company paid Televisa and Venevision aggregate net royalties of approximately $125,926,000 in 2001, $127,394,000 in 2000 and $101,395,000 in 1999. In
December 2001, the Program License Agreement was amended and restated. Under terms of the expanded programming agreement, the Company will pay Televisa an additional royalty fee of 3% on
incremental Combined Net Time Sales of Univision Network, UTG and Galavisión over and above 2001 amounts, as well as a 12% royalty fee on TeleFutura Net Time Sales (calculated in a
manner similar to Combined Net Time Sales), subject to certain adjustments. TeleFutura's royalty fee for 2002 will be zero. In 2003, the minimum royalty fee will be $5,000,000, increasing by
$2,500,000 per year thereafter, subject to a maximum annual minimum royalty fee of $12,500,000, resulting in a minimum royalty fee of $7,500,000 in 2004, $10,000,000 in 2005 and $12,500,000 for the
years 2006 through 2017. Venevision will be paid up to 3% of additional royalty fees on incremental Combined Net Time Sales over a 2001 base amount on Univision Network, UTG and
Galavisión over a base amount for 2001 if Venevision programs contribute 30% or more of Univision Network's and Galavisión's ratings. In addition, Venevision will receive
royalty fees based on the ratings delivered by the Venevision programs broadcast on TeleFutura. The obligations of their respective affiliates have been guaranteed by, in the case of Televisa, Grupo
Televisa, S.A. and in the case of Venevision, Corporacion Venezolana de Television, C.A. (VENEVISION). Under the Program License Agreement, the Company has the exclusive right to air in the United
States all Spanish-language programming (with certain limited exceptions) produced by or for Televisa and Venevision.

Additionally,
pursuant to the Amended and Restated Program License Agreements, Televisa and Venevision have the right to use, without charge, advertising time that the Company does not
sell to advertisers or that the Company does not use. There are limitations on the ability of Televisa and Venevision to use such time for telemarketing products, and such time may be preempted to the
extent sold to a paying advertiser. In addition, Venevision will receive $5,000,000 per year in free non-preemptable advertising and Televisa will purchase $5,000,000 of
non-preemptable advertising per year for its own use. Further, the Company will purchase $5,000,000 per year in non-preemptable advertising from Televisa and will receive
$5,000,000 per year in non-preemptable free advertising from Venevision. The Company will account for this arrangement as a net barter transaction, with no effect on revenues, expenses,
EBITDA or net income on an annual basis. Each of Televisa and Venevision may also purchase for its own use non-preemptable time at the lowest spot rate for the applicable time period.
Televisa purchased non-preemptable time from the Company, which resulted in advertising revenues of approximately $3,000,000 and $1,784,000 in 2000 and 1999, respectively. In 2001, the
Company had no advertising revenues from Televisa and Venevision. The Company did not purchase any advertising from Televisa or Venevision in 2001, 2000 and 1999.

F-13

---

The
Company reached an agreement with Televisa and Venevision on the right to license their programs in Puerto Rico commencing in 2002. Before May 2005, the Company will have a
right of first refusal on their programs (subject, in the case of Televisa, to a preexisting commitment) and will pay a program performance fee based on the ratings delivered by the licensed programs.
The Company will pay Televisa and Venevision an annual minimum license fee for certain programs in the aggregate of $2,400,000 subject to reductions due to program cancellation. After 2005, if the
Company has exercised its option to acquire certain stations and networks in Puerto Rico, the Company's rights will be exclusive in a manner similar to the overall Program License Agreements, and will
pay Televisa 12% of Puerto Rico net time sales (calculated in a manner similar to Combined Net Time Sales) and Venevision the greater of 6% of Puerto Rico net time sales and the amount that a program
performance fee based on ratings of Venevision programs would produce (but not more than 12% of Puerto Rico net time sales) on programs licensed by it.



The Company granted Televisa and Venevision certain rights to exploit various programming produced by the Company or its subsidiaries for use on Univision Network
and Galavisión on a royalty-free basis. These rights cover all countries outside of the U.S. for programs produced before our initial public offering or that replace such
programs ("Grandfathered Programs") and cover Mexico and Venezuela for all other programs. For Grandfathered Programs, the rights described above will revert back to the Company from Televisa or
Venevision when the applicable Program License Agreement terminates. For other programs, Televisa or Venevision's rights revert back to the Company when that entity owns less than 30% of the Company
securities it owned on the date of our initial public offering (other than on account of a merger or similar transaction). The Company also granted Televisa and Venevision certain
rights for Mexico and Venezuela, respectively, to license programs produced by the Company or its subsidiaries for use on TeleFutura or other networks we may own.



Pursuant to a Participation Agreement, Mr. Perenchio, Televisa and Venevision, the principal stockholders of the Company, have also agreed that none of
them will enter into certain transactions involving Spanish-language television broadcasting or a Spanish-language television network in the U.S. without first offering the Company the opportunity to
acquire a 50% economic interest. The Participation Agreement provides that if the Company elects to participate in any of these transactions, the offeror party will have substantial control over
management of such transaction.



The Company has a Registration Rights Agreement with Mr. Perenchio, Televisa and Venevision, pursuant to which the Company has agreed to file registration
statements covering the Company's securities owned by them. As of March 1, 2002, Mr. Perenchio had the right to demand three registration statements, Venevision had the right to demand
two and Televisa had the right to demand one. In addition, the Company gave these stockholders various piggyback registration rights. In general, the Company will pay all fees, costs and expenses of
any such registration statements.

F-14

---



The Company reimburses Chartwell Services, Inc. and Chartwell Services New York, Inc., affiliates of Mr. Perenchio (collectively, "Chartwell
Services"), for office space used by the Company and related expenses and for compensation of certain Chartwell Services employees who devote time to the Company activities pursuant to agreements
entered into between the Company and Chartwell Services. For 2001, the Company agreed to reimburse Chartwell Services approximately $529,000 for one-half of the salary, benefits and
payroll taxes relating to the Company's Vice Chairman and Corporate Secretary, Robert Cahill, and the salary, benefits and payroll taxes of support staff. In addition, options for 25,000 shares each
of Class A Common Stock were granted during 2001 to two Chartwell Services employees who devote time to the Company activities. For 2001, the Company agreed to reimburse Chartwell Services
approximately $344,000 for office space, transportation and other administrative costs and approximately $46,000 for tickets and related expenses at various sporting events. Pursuant to the agreements
between the Company and Chartwell Services, Chartwell Services will continue
providing the services subject to such agreement through December 2002, subject to automatic one-year extensions.

The
Company and Mr. Perenchio entered into an agreement in March 2001 with respect to boxing promotion activities. Under that agreement, the activities were to be conducted
by a subsidiary of the Company, any profits were to be divided 70% to Mr. Perenchio and 30% to the Company, and Mr. Perenchio agreed to indemnify the Company for any losses from such
activities unless the Company exercised an option to acquire Mr. Perenchio's interest. During 2001, Mr. Perenchio reimbursed the expenses the Company incurred in the amount of $3,800,000
in respect of the boxing activity. Mr. Perenchio and the Company are no longer engaged in boxing promotion. Also during 2001, a production company owned by Mr. Perenchio used certain
facilities and personnel of the Company in connection with program development pursuant to an understanding that any programs so developed would be offered to the Company at an arms-length
negotiated price. Prior to year-end Mr. Perenchio reimbursed the Company for the actual cost of such usage in the amount of $6,900,000.



The Company agreed to form a 50/50 joint venture with Televisa to engage in the exploitation in the United States of Televisa's pay television channels
(but excluding general entertainment channels and novelas). Televisa's existing channels include music video channels and movie channels. The venture will be jointly controlled by Televisa and the
Company with each agreeing to fund $20,000,000 in the first three years of the venture.



In December 2001, the Company entered into a share purchase agreement with Televisa pursuant to which Televisa purchased 375,000 preferred shares in
exchange for $375,000,000. The preferred shares automatically converted into 10,594,500 shares of the Company's Class A Common Stock upon expiration of the waiting period under the
Hart-Scott-Rodino Act on February 25, 2002.

F-15

---



In December 2001, the Company, Televisa and Venevision agreed to certain amendments to the Company's charter documents, and the Company issued to both
Televisa and Venevision warrants to purchase additional shares of the Company's Common Stock (see Note 12).



The Company agreed to acquire from Televisa the Fonovisa Music Group ("Fonovisa") for 6 million shares of the Company's Class A Common Stock and
100,000 warrants to purchase the Company's Class A Common Stock (having an exercise price of $38.261 per share). Fonovisa is comprised of four entities (one in the United States, two in Mexico
and one in Costa Rica) and is considered to be one of the top record labels featuring Spanish-language music. The Company expects to merge Fonovisa into Univision Music Group, which includes a 50%
ownership stake in Mexican-label Disa Records.



In 2001, the Company formed a wholly-owned subsidiary Univision Music, Inc. Univision Music, Inc. owns 98% of Univision Music LLC, 1% is owned by
the Company and 1% is owned by Diara, Inc ("Diara"). Diara's ownership escalates to 20% by the end of year 5. Diara's President and sole stockholder is Jose Behar. In 2006, Diara has a put right and
Univision Music, Inc. has a call right which would require Univision Music, Inc. to purchase all of Diara's interest in Univision Music LLC. The purchase price will be equal to 20% of
ten times the average of Univision Music LLC's year four and year five earnings before interest, taxes, depreciation and amortization. The parties can elect not to exercise the put or call right and
continue to maintain the same ownership structure for an additional five years. If this happens the purchase price will be equal to 20% of ten times the average of Univision Music LLC's year six and
year seven earnings before interest, taxes, depreciation and amortization. The Company is in the process of amending the arrangement with Jose Behar as a result of the acquisition of Fonovisa. Also,
the Company extended a loan of $3,500,000 to Mr. Behar in April 2001, which bears interest of 5% on $2,500,000 and is payable in equal installments plus interest on each fiscal
anniversary over the five year contract. The remaining $1,000,000 bears interest at 5% and is payable in April 2006.

F-16

---

4. Property and Equipment

Property and equipment, and accumulated depreciation and amortization, consist of the following as of December 31, 2001 and 2000:

2001

2000(In thousands)Land and improvements

$
22,013

$
17,937Building and improvements


179,482


54,777Broadcast equipment


222,760


129,519Transponder equipment


51,628


42,884Other equipment


50,977


35,536Construction in progress


61,284


69,667588,144


350,320Accumulated depreciation and amortization


(142,661
)

(103,087
)$
445,483

$
247,233


5. Debt

Long-term debt (excluding capital leasessee Note 6) consists of the following as of December 31, 2001 and 2000:

2001

2000(In thousands)Bank Term Facility

$
465,000

$
156,900Revolving Credit Facility


25,000


180,000Temporary Credit Facility





100,000Senior Notes payable


495,509


Junior Subordinated Notes payable, including accrued interest


87,070


77,3891,072,579


514,289Current portion


(87,070
)

(216,000
)Long-term debt

$
985,509

$
298,289


On
July 18, 2001, the Company entered into a new five-year credit agreement with a syndicate of commercial lenders from whom the Company received commitments of
$1.22 billion. The new credit agreement consists of a $720,000,000 term loan (the "Term Facility") and a $500,000,000 revolving credit facility (the "Revolving Credit Facility"). Each of the
credit facilities will mature on July 18, 2006.

Loans
made under the new revolving credit facility and term loan will bear interest determined by reference to LIBOR or a base rate equal to the higher of the prime rate of Chase
Manhattan Bank or
0.50% per annum over the federal funds rate. The interest rate margins for the first six months after the closing of the initial borrowing under the facilities for the revolving credit facility and
term loans will be 0.25% above the base rate or 1.25% above LIBOR. Thereafter, depending on the rating assigned by rating agencies to our senior unsecured debt, the LIBOR interest rate margin will
range from 0.75% to 1.5% per

F-17

---

annum and the base rate margin will range from 0% to 0.50% per annum. Interest will generally be payable quarterly.

The
new credit agreement contains customary covenants, including restrictions on liens and dividends, and financial covenants relating to interest coverage and maximum leverage. Under
the new credit agreement, the Company will also be limited in the amount of other debt we can incur and in our ability to engage in mergers, sell assets and make material changes to our program
license agreements with Televisa or Venevision in a manner the lenders determine is materially adverse to the Company.

On
July 18, 2001, the Company also issued 7.85% Senior Notes due 2011 (the "Notes"), which have a face value of $500,000,000 and bear simple interest at 7.85%, to qualified
institutional buyers. The Company received net proceeds of $495,370,000 from the issuance of the Notes, which along with cash from operations was used to repay the remaining bank facility balances. At
December 31, 2001, the discount on the Senior Notes was $4,491,000. The Company will pay interest on the Notes on January 15 and July 15 of each year. The Notes are the Company's
senior unsecured obligations, are equal in right of payment with all of the Company's existing and future senior unsecured indebtedness, are senior in right of payment to any of the Company's future
subordinated indebtedness and are fully and unconditionally guaranteed by all of the Company's guarantors, who are described below. The Company has the option to redeem all or a portion of the Notes
at any time at the redemption prices set forth in the note agreement. The indenture does not contain any provisions that would require us to repurchase or redeem or otherwise modify the terms of the
Notes upon a change of control. The indenture does not limit our ability to incur indebtedness or require the maintenance of financial ratios or specified levels of net worth or liquidity.

The
subsidiaries that are guaranteeing the Company's obligations under the new revolving credit facility and term loan are also guaranteeing the Notes. Initially, the subsidiary
guarantors under the new credit facilities are all of our domestic subsidiaries other than certain immaterial subsidiaries and, until final payment of the purchase price for the additional stations to
be acquired from USA Broadcasting, the special purpose subsidiary that was created to acquire those stations. The guarantees of the obligations under the revolving credit facility, term loan and the
Notes will be released if our senior unsecured debt is rated BBB or better by Standard & Poor's Rating Services and Baa2 or better by Moody's Investor Service, Inc. The guarantees of
such subsidiary will be reinstated if such ratings fall below BBB- by Standard & Poor's or Baa3 by Moody's. The Company's senior unsecured debt is currently rated BB+ by
Standard & Poor's Rating Services and Baa3 by Moody's Investor Service, Inc.

The
Junior Subordinated Notes have a face value of $7,306,000 and $50,020,000 and bear simple interest at 7%. The Junior Subordinated Notes are unsecured; all interest and principal is
due on December 17, 2002. The Junior Subordinated Notes were discounted at an effective rate of approximately 12.5%. During 1999, the Company purchased, at a premium, $14,074,000 face amount of
the Junior Subordinated Notes (see
Note 11). The discounts on the Junior Subordinated Notes with a face value of $57,326,000 at December 31, 2001 and 2000, are $6,536,000 and $12,205,000, respectively. The discounts,
which are shown as a reduction of the related debt, are being amortized under the effective interest method over the term of the Junior Subordinated Notes. The maturity value of the Junior
Subordinated Notes at December 31, 2001 and 2000, are $93,606,000 and $89,594,000, respectively.

F-18

---

Long-term
debt (excluding capital leasessee Note 6) matures as follows:

Amount(In thousands)Year ending December 31:2002

$
87,0702006


490,000Thereafter


495,509Total

$
1,072,579


The
Company estimates that the fair value of the bank debt, the Junior Subordinated Notes and the Senior Notes at December 31, 2001, approximates book value.

Interest
expense, net, reflected in the accompanying consolidated statements of income, comprises the following for the years ended December 31:

2001

2000

1999(In thousands)Bank facility

$
25,296

$
18,784

$
16,261Junior Subordinated Notes


9,682


8,604


8,020Senior Notes


14,614





Capital leases (see Note 6)


4,335


3,342


3,283Othernet


(464
)

(633
)

(105
)$
53,463

$
30,097

$
27,459


F-19

---



6. Commitments

The Company is obligated under long-term operating leases expiring at various dates through 2024 for office, studio, automobile, tower and transponder
rentals. The Company is also obligated under long-term capital lease obligations through 2021. The following is a schedule by year of future annual rentals under operating and capital
leases as of December 31, 2001:

Operating
Leases

Capital
Leases(In thousands)Year ending December 31:2002

$
18,223

$
12,2642003


15,745


12,2642004


15,384


12,0122005


14,305


10,6202006


13,117


9,016Thereafter


63,284


107,963Total minimum lease payments

$
140,058


164,139Interest





(74,845
)Total present value of minimum lease payments





89,294Current portion





(4,960
)Capital lease obligation, less current portion




$
84,334


Rent
expense totaled $24,661,000 in 2001, $16,332,000 in 2000 and $11,952,000 in 1999.

In
February 2002, the Company entered a new five-year contract with Nielsen Media Research ("Nielsen"), expiring in December 2006, to provide television
audience measurement services for Univision Network and TeleFutura Network. The aggregate payment for Univision Network and TeleFutura Network is approximately $51,700,000, payable over five years in
increasing installments through December 31, 2006. The Company also entered into a five-year contract with Nielsen for TTG O&Os for approximately $14,200,000, payable over five
years in increasing installments through January 31, 2007. UTG O&Os have various Nielsen contracts extending through October 2003 with aggregate payments of approximately $32,600,000. At
December 31, 2001, the aggregate payments remaining under these contracts are approximately $14,730,000, with most of UTG O&Os' contracts expiring in October 2003.

In
January 2001, Univision Network entered into a program license agreement with Coral International Television Corp. (the exclusive distributing agent for Radio Caracas
Television) to acquire approximately 780 hours of new novelas per year and approximately 800 hours of existing novelas through January 2011. The aggregate payment under the
contract is approximately $85,250,000, payable over ten years in increasing installments, with an aggregate payment remaining under the contract of approximately $78,760,000 at December 31,
2001.

In
June 2001, Univision Network entered into a program license agreement with RCN to acquire approximately 300 hours of new novelas per year and approximately
50 hours of existing novelas through June 2007. The aggregate payment under the contract is approximately $41,440,000 payable over five years,

F-20

---

in increasing installments, with an aggregate payment remaining under the contract of approximately $38,450,000 at December 31, 2001.

In
2001, the Company entered into several program license agreements to acquire 935 movies. The agreements commence in January 2002 and expire on different dates through
December 2006. The aggregate payments under the agreements are approximately $12,688,000 during 2002, $12,688,000 during 2003, $12,688,000 during 2004, $2,256,000 during 2005 and $1,755,000
during 2006 for a total of $42,075,000.

In
January 2002, as a result of its acquisition of the USA Broadcasting stations; the Company acquired English-language programming contracts and recorded a liability of
approximately $24,600,000 that will be payable through February 2009. The Company is trying to sub-license or arrange a buyout of this programming to reduce its liability.

In
April 2001, the Company launched a music publishing and recording division, Univision Music Group. In June 2001, Univision Music Group acquired a 50% interest in Disa
Records. The Company has a call right and the Chavez family has a put right starting in June 2006, that will require the Company to purchase the remaining 50% interest for $75,000,000, subject
to certain upward adjustments. Disa Records is a Mexico-based music recording and publishing company with a large complement on Latin artists.

On
July 18, 2000, the FCC released a Public Notice giving official notification that the Company was the winning bidder at $18,798,000 for a construction permit for a new
television station assigned to Blanco Texas. On August 1, 2000, the Company made its required 20% down payment of $3,759,600 while awaiting final approval by the FCC. The details and costs
regarding the construction of the new station are still in the planning phase.

On
August 9, 2000, the Company acquired the Spanish-language broadcast rights in the U.S. to the 2002 and 2006 FIFA World Cup soccer games and other 2000-2006 FIFA
events. A series of payments totaling $150,000,000 is due over the term of the agreement. In addition to these payments, and consistent with past coverage of the World Cup games, the Company will be
responsible for all costs associated with advertising, promotion and broadcast of the World Cup games, as well as the production of certain television programming related to the World Cup games. The
costs for the 2002 World Cup games will be approximately $55,000,000. The funds for these payments are expected to come from income from operations and/or borrowings from the Company's bank
facilities.

As
of December 31, 2001, the Company is committed to pay minimum annual base compensation approximating $7,150,000, pursuant to two major talent contracts through
December 31, 2002. These payments do not include amounts payable upon the attainment of certain annual revenue levels or upon the performance of other contractual provisions.

On
December 7, 2000, the Company announced that it would acquire 13 full-power television stations, minority interests in four additional full-power
television stations and Station Works, the master control operating system, from USA Broadcasting for $1.1 billion in cash. On June 12, 2001, the Company acquired the first three
stations and the Station Works facility, together with the minority ownership interests in the
four additional stations for $294,069,000 in cash, excluding legal and consulting fees. On August 21, 2001, the Company acquired the remaining ten USA Broadcasting stations through the issuance
of notes aggregating approximately $808,000,000. The Company made a payment under the notes of

F-21

---

approximately $216,000,000 in September 2001 and made the remaining payment of approximately $592,000,000, with funds from its existing credit facility and the proceeds from the issuance of
Preferred Stock (see Note 12) in January 2002.

Effective
February 1, 2002, the Company entered into a time brokerage agreement with Raycom Media, Inc. ("Raycom") to manage its two stations in Puerto Rico. Under the
agreement, the Company will program WLII-TV 11 in San Juan and WSUR-TV 9 in Ponce, collectively branded as "Teleonce" on behalf of Raycom. The new programming under the
agreement will also be telecast through WORA-TV 5 in Mayaguez, the long-term western affiliate to Teleonce. The management fee to the Company will be approximately $500,000 per
year. In addition, the Company entered into an option agreement that expires on December 31, 2004 to acquire these stations for $190,000,000. The purchase price will be reduced if certain
earnings targets are met during the period prior to the expiration of the option agreement.

7. Employee Benefits

The Company has a 401(k) retirement savings plan (the "401(k) Plan") covering all eligible employees who have completed one year of service. The 401(k) Plan
allows the employees to defer a portion of their annual compensation, and the Company may match a portion of the employees' contributions. For the years ended December 31, 2001, 2000 and 1999,
the Company made matching cash contributions to the 401(k) Plan totaling $5,563,000, $4,944,000 and $4,101,000, respectively. The Company matched 100% of the first 6% of eligible compensation that
employees contributed to the 401(k) Plan for 1999 through 2001. Effective January 1, 2002, the Company will match 100% of the first 3% of eligible employee compensation.

8. Contingencies

There are various legal actions and other claims pending against the Company incidental to its business and operations. In the opinion of management, the
resolution of these matters will not have a material effect on the consolidated financial position or results of operations.

The
Company maintains insurance coverage for various risks, where deemed appropriate by management, at rates and on terms which management considers reasonable. The Company
self-insures certain portions of its employee health benefits as well as the deductible portion of certain insurance coverage for various risks, including those associated with windstorm
and earthquake damage. The Company has recorded estimated liabilities for these uninsured portions of risks. In management's opinion, the potential exposure
in future periods, if uninsured losses in excess of amounts provided were to be incurred, would not be material to the consolidated financial position or results of operations.

F-22

---

9. Income Taxes

The Company files a consolidated federal income tax return. The income tax provision for the years ended December 31, 2001, 2000 and 1999 comprised the
following charges:

2001

2000

1999(In thousands)Current:Federal

$
43,249

$
90,143

$
70,592State


6,796


14,680


12,138Deferred:Federal


11,079


2,801


5,937State


1,741


457


2,869Total

$
62,865

$
108,081

$
91,536


The
Company accounts for income taxes under the liability method pursuant to SFAS No. 109 "Accounting for Income Taxes." Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's
deferred tax assets and liabilities as of December 31, 2001 and 2000 are as follows:

2001

2000(In thousands)Deferred tax assets:Accrued severance and litigation

$
2,800

$
4,500Equity loss in unconsolidated subsidiaries


9,300


1,400Accrued vacation


2,300


1,800Deferred compensation


2,300


2,300Allowance for doubtful accounts


4,700


2,800Accrued facility-related costs


1,600


1,800Capital loss carryforward


3,000


Operating loss carryforward


1,400


3,500Other assets, net


2,043


2,782Total deferred tax assets


29,443


20,882Deferred tax liabilities:Property and equipment, net


14,300


11,900Intangible assets, net


20,800


1,200Total deferred tax liabilities


35,100


13,100Total net deferred tax assets (liabilities)

$
(5,657
)
$
7,782


At
December 31, 2001, the Company has net operating loss carryforwards of $3,900,000 that expire in 2004 and 2005, resulting from the 1992 acquisitions. The tax benefit relating
to the recognition of these items was applied to reduce goodwill related to the acquisitions. The Company also has a capital loss carryforward of $7,500,000 relating to the dissolution of the Ask
Jeeves en Español Joint Venture.

F-23

---

As
a result of various acquisitions, the Company recorded goodwill representing the consideration given in excess of the net assets related to the transactions. Some of the amortization
of this goodwill is not deductible for tax purposes, and, in accordance with SFAS No. 109, no deferred tax liability was accrued. Consequently, through 2001, the Company's effective tax rate
provided was greater than the statutory rate. The non-deductible intangible amortization permanent difference was $31,194,000 and $30,763,000 for the years ended December 31, 2001
and 2000, respectively. Commencing in 2002, with the adoption of SFAS No. 142, goodwill and other intangibles will no longer be subject to amortization for book purposes. As a result, the
majority of the above permanent difference will be eliminated and the future statutory tax rate will be closer to the effective tax rate.

For
the years ended December 31, 2001 and 2000, a reconciliation of the federal statutory tax rate to the Company's effective tax rate is as follows:

2001

2000

1999Federal statutory tax rate

35.0
%
35.0
%
35.0
%State and local income taxes, net of federal tax benefit

5.5

5.7

5.7Junior Subordinated Notes

1.2

0.6

1.4Goodwill amortization

10.9

6.2

8.2Sale of Albuquerque station





1.3Other

0.9

0.5

0.7Total effective tax rate

53.5
%
48.0
%
52.3
%


10. Earnings Per Share

The Company is required to calculate basic earnings per share, which is computed by dividing income available to common stockholders (the numerator) by the
weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders is computed by deducting both the dividends declared in the period on
preferred stock (whether or not paid) and dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations and also net income. The
Company is also required to compute diluted earnings per share, which is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares
that would have been outstanding if the dilutive potential common shares had been issued. In addition, in computing the dilutive effect of convertible securities, the numerator is adjusted to add back
the convertible preferred stock dividends. The following is the reconciliation of the numerator and the denominator of the basic and diluted earnings-per-share

F-24

---

computations for income before extraordinary loss on extinguishment of debt as required by SFAS No. 128 "Earnings Per Share":

|                                  |                                                                              | For the Year Ended 2001 |        | For the Year Ended 2000
|--------------------------------- | ---------------------------------------------------------------------------- | ----------------------- | ------ | -----------------------
|
|
|Income before extraordinary items |                                                                              | $                       | 54,717 |                        
|Less preferred stock dividends    |                                                                              |                         | (70    | )                      
|                                  |                                                                              |                         |        |                        
|Basic Earnings Per Share          |                                                                              |                         |        |                        
|                                  | Income before extraordinary items per share available to common stockholders |                         |        | 54,647                 
|                                  |                                                                              |                         |        |                        
|Effect of Dilutive Securities     |                                                                              |                         |        |                        
|                                  | Warrants                                                                     |                         |        |                       
|                                  | Options                                                                      |                         |        |                       
|                                  | Convertible preferred stock                                                  |                         |        | 70                     
|                                  |                                                                              |                         |        |                        
|Diluted Earnings Per Share        |                                                                              |                         |        |                        
|                                  | Income before extraordinary items per share available to common stockholders |                         | $      | 54,717                 
|                                  |                                                                              |                         |        |                        



|                                  |                                                                              | For the Year Ended 1999
|--------------------------------- | ---------------------------------------------------------------------------- | -----------------------
|
|Income before extraordinary items |                                                                              | $                      
|Less preferred stock dividends    |                                                                              |                        
|                                  |                                                                              |                        
|Basic Earnings Per Share          |                                                                              |                        
|                                  | Income before extraordinary items per share available to common stockholders |                        
|                                  |                                                                              |                        
|Effect of Dilutive Securities     |                                                                              |                        
|                                  | Warrants                                                                     |                        
|                                  | Options                                                                      |                        
|                                  | Convertible preferred stock                                                  |                        
|                                  |                                                                              |                        
|Diluted Earnings Per Share        |                                                                              |                        
|                                  | Income before extraordinary items per share available to common stockholders |                        
|                                  |                                                                              |                        

---

F-25

---



10. Earnings Per Share (Continued)

11. Early Extinguishment of Debt

In 2001, the Company's extraordinary loss on extinguishment of debt of $2,306,000 is due to the write-off of deferred financing cost related to its
terminated credit facilities.

In
1999, the Company purchased, at a premium, $14,074,000 face amount of its Junior Subordinated Notes, resulting in an extraordinary loss of $2,611,000, including a related income tax
provision of $246,000. The tax provision was due to an extraordinary tax gain resulting from a higher permanent discounted note basis for tax versus book purposes.

12. Common Stock, Preferred Stock and Warrants

The Company's common stock consists of Class A, Class P, Class T and Class V shares. The Class A shares are listed on the New
York Stock Exchange and are primarily held by non-affiliates. The Class P, T, and V shares are held by affiliates and are not traded. All classes of common stock have substantially
the same rights, with the exception of Class P shares, which have ten votes per share on all matters on which shareholders are entitled to vote, and Class T and V which each have the
right to elect one member of the Company's board of directors.

The
Company had 10,000,000 shares of preferred stock, $.01 par value, authorized at December 31, 2001, and 2000. The Company had 6,000 shares of redeemable convertible 6%
preferred stock, $.01 par value, issued and outstanding at December 31, 2000 and accrued preferred stock dividends of $60,000. In 2001, the 6,000 redeemable convertible 6% preferred stock
shares were redeemed and converted into a total of 734,224 shares of Class A Common Stock, resulting in an increase to common stock of approximately $8,000 and to
paid-in-capital of $5,993,000.

On
December 19, 2001, the Company, Televisa and Venevision reached a multi-faceted global alliance. Under this comprehensive agreement, Univision Network, TeleFutura Network and
Galavisión will now have exclusive U.S. broadcast rights to Televisa and Venevision programming (with certain limited exception), the most popular Spanish-language programming in the
world, through 2017. As part of the agreements, Televisa made an equity investment in the Company of $375,000,000 and received Class B Preferred Stock that automatically converted, on
February 25, 2002, into 10,594,500 shares, based on an

F-26

---

arms-length negotiated 6% discount, of the Company's Class A Common Stock upon expiration of the waiting period under the Hart-Scott-Rodino Act. The parties also agreed to amend
the Company's charter documents to eliminate or modify certain governance rights held by the directors elected by Televisa and Venevision and to eliminate the right of holders of the Company's
Class T Common Stock and Class V Common Stock to elect additional directors upon a change in federal law increasing the percentage that non-U.S. citizens may own in companies
that own television stations. In connection with the changes to the Company's charter documents, the Company issued warrants to both Televisa and Venevision to purchase in the aggregate, in the case
of Televisa, 9,000,000 warrants to acquire 6,274,864 additional shares of Class A Common Stock and 2,725,136 additional shares of Class T Stock and, in the case of Venevision, 2,800,000
warrants to acquire 74,864 additional shares of Class A Common Stock and 2,725,136 Class V Stock. The warrants were issued in exchange for the value of certain rights previously held by
the holders of shares of Class T and Class V Stock. The exercise price for the warrants is $38.261 per share. At December 31, 2001, Televisa and Venevision owned a total of
9,002,000 and 30,237,700 warrants, respectively, which includes warrants issued in December 1992. The 1992 warrants are exercisable for Class T and Class V Common Stock at an
exercise price of $0.0322 per share. In addition, the Company agreed to acquire Televisa's music recording company, Fonovisa Music
Group ("Fonovisa"), North America's premier Latin music label, for 6 million shares of Class A Common Stock and warrants to purchase an additional 100,000 shares of Class A
Common Stock at an exercise price of $38.261 per share.

The
Televisa and Venevision warrants cannot be exercised by either Televisa or Venevision (or by any other non-U.S. citizen) if such exercise would result in a violation of
the foreign ownership restrictions of the Communications Act of 1934. Subject to certain restrictions, Televisa and Venevision may transfer such warrants. If Televisa and Venevision were to exercise
their warrants (excluding the Fonovisa transaction described above), their ultimate ownership of the Company would be approximately 13% for Televisa and 19% for Venevision. Following the Fonovisa
transaction the ownership of the Company would be approximately 15% for Televisa and 18% for Venevision.

13. Investments in Unconsolidated Subsidiaries

Investments in unconsolidated subsidiaries consist of the following as of December 31, 2001 and 2000:

2001

2000(In thousands)Entravision Communications Corporation

$
341,590

$
361,279Disa Records


95,720


Investment in minority interest stations


69,875


Equity Broacasting Corporation


28,592


Ask Jeeves en Español, Inc





39,360Cocorojo L.L.C.





109$
535,777

$
400,748


The
Company's investments in unconsolidated subsidiaries are all accounted for under the equity method of accounting except for its investment in Equity Broadcasting Corporation ("Equity
Broadcasting"), which is accounted for under the cost method of accounting since the Company owns primarily non-voting preferred stock.

F-27

---

Entravision
Communications Corporation ("Entravision") is the largest affiliate group of the Company. Entravision operates in 21 of the nation's top 50 Hispanic markets and owns 35 of
the Company's affiliated stations. At December 31, 2001, the Company had an approximate 32% equity interest in Entravision and the Company's equity interest in Entravision's net book value
approximates the carrying value of the Company's investment in Entravision. During 2001, the Company reported an Entravision equity loss from unconsolidated subsidiary of $19,754,000, which represents
the Company's share of Entravision's net loss reported from December 1, 2000, through November 30, 2001. The Company recognizes its share of Entravision's net income or loss on a
one-month lag.

In
the third quarter of 2001, the Company decided to dissolve its joint venture in Ask Jeeves en Español, Inc.; consequently, the Company's equity loss in
unconsolidated subsidiaries/other amount for 2001 reported includes a charge of $15,919,000 or $9,472,000 net of tax. The original charge of $16,804,000 in the third quarter of 2001 was changed to
reflect an additional collection of cash in the fourth quarter related to the investment. The Company will recover approximately $25,800,000 in cash, comprised of $19,400,000, received in 2001, as a
return of capital and $6,400,000 related to a tax benefit from its original investment of approximately $40,000,000 in Ask Jeeves en Español, Inc.

The
Company also dissolved its investment in Cocorojo L.L.C. during 2001.

In
June 2001, the Company completed the acquisition of a 50% interest in Disa Records for approximately $75,000,000 in cash. In addition, the Company agreed to provide $5,000,000
per year of advertising to Disa Records for the five-year period July 1, 2001 to June 30, 2006. The remaining advertising to be provided, net of agency commissions, is
recorded in the accompanying balance sheet as deferred advertising revenues current and long-term. This will be recognized as revenues when the advertisements are provided. Mexico-based
Disa Records, S.A. de C.V. is the second largest independent Spanish-language record label in the world.

In
June 2001, the Company purchased for $26,000,000 an approximate 20% non-voting preferred stock equity interest in Equity Broadcasting, which is the ninth-largest
broadcasting corporation in the United States with more than 40 full-power and 60 low-power television stations. In addition, in September 2001, the Company purchased an
additional 4.9% of Equity Broadcasting's Class A common stock for approximately $2,500,000. This investment is accounted for under the cost method.

In
2001, the Company acquired a minority-interest in the San Francisco, Denver, St. Louis and Washington D.C. stations that were part of the USA Broadcasting acquisition for $78,727,000.
In August 2001, the Company acquired the majority interest in the Washington, D.C. station for $59,000,000 through a bankruptcy court proceeding. In January 2002, the Company purchased
the remaining interest in the San Francisco station for $41,000,000.

14. Business Acquisitions

On December 7, 2000, the Company announced that it would acquire 13 full-power television stations, minority interests in four additional
full-power television stations in San Francisco, Washington, Denver and St. Louis and Station Works, the master control operating system, from USA Broadcasting for $1.1 billion in
cash. On June 12, 2001, the Company acquired the first three stations and the Station Works facility, together with the minority ownership interests in the four additional stations for
$294,069,000 in cash, excluding legal and consulting fees. On August 21, 2001, the Company acquired the remaining ten

F-28

---

USA Broadcasting stations through the issuance of notes aggregating approximately $808,000,000. The Company made a payment under the notes of approximately $216,000,000 in September 2001 and
made the remaining payment of approximately $592,000,000 in January 2002. The cost for the full-power stations and Station Works was $1,021,271,000 and for the minority interest
stations was $78,729,000. The Company has received an appraisal on the acquisition and the purchase price allocation is as follows:

(In thousands)Purchase price

$
1,021,271Net assets acquired


(58,086
)Acquisition costs


5,606Excess purchase price


968,791FCC licenses


(835,993
)Other intangible assets


(131,150
)Tower space lease


(1,648
)


In
August 2001, the Company acquired the majority interest in the Washington, D.C. station, in which it had acquired a minority interest from USA Broadcasting, for an additional
$59,000,000 through a bankruptcy court proceeding. In January 2002, the Company purchased the remaining interest in the San Francisco station for approximately $41,000,000. The Company
currently has a minority interest in the Denver and St. Louis stations.

On
September 28, 2001, the Company loaned Equity Broadcasting approximately $20,000,000, which created an interest-bearing note receivable due to the Company from Equity
Broadcasting. In December 2001, the Company acquired two full-power and four low-power television stations from Equity Broadcasting, and the entire note receivable plus interest was applied to
the purchase price.

15. 1996 Performance Award Plan

In 1996, the Company adopted a 1996 Performance Award Plan (the "Plan") that reserves shares of Class A Common Stock for issuance to Company officers, key
employees and other eligible persons as determined by the Board of Directors or Plan Committee (as appointed by the Board). The Company has adopted the disclosure-only provisions of SFAS
No. 123 "Accounting for Stock-Based Compensation." Accordingly, no compensation cost has been recognized for the Plan. Had compensation cost for the Plan been determined based on the fair value
at the grant date for awards in 2001, 2000 and 1999 consistent

F-29

---

with the provisions of SFAS No. 123, the Company's net income and earnings per share available to common stockholders would have been reduced to the pro forma amounts indicated below:

|                                                                |  | Basic Earnings Per Share |        | Diluted Earnings Per Share
|--------------------------------------------------------------- |  | ------------------------ | ------ | --------------------------
|
|
|Net income available to common stockholdersas reported         |  | $                        | 52,341 |                           
|Net income available to common stockholderspro forma           |  |                          | 17,977 |                           
|Earnings per share available to common stockholdersas reported |  |                          | 0.25   |                           
|Earnings per share available to common stockholderspro forma   |  |                          | 0.09   |                           

The
fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in
2001, 2000 and 1999, respectively: dividend yield of 0%, expected volatility of 45.385%, 41.584% and 36.385%, risk-free interest rate of 4.38%, 5.58% and 6.05% and expected life of six,
six and five years.

The
Plan was amended and restated as of February 16, 2000, primarily to increase the maximum number of shares of Class A Common Stock that may be granted from 22,000,000 to
37,200,000. The maximum number of shares that may be granted to any individual during any calendar year is 2,000,000. The maximum number of shares that may be granted during any calendar year is
5,500,000 unless the Committee gives its unanimous consent. The Plan provides that shares granted come from the Company's authorized but unissued Class A Common Stock and any shares of the
Company's Class A Common Stock held as treasury shares. Grants may be in the form of either nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock
awards, restricted stock unit awards, performance share awards, stock bonuses or cash bonus awards.

The
price of the options granted pursuant to the Plan may not be less than 100% of the fair market value of the shares on the date of grant (110% in the case of an incentive stock option
granted to any person owning more than 10% of the Company's total combined voting power). No award will be exercisable after ten years from the date granted. Unless approved by the Committee, no award
may vest at a rate greater than 25% per year, other than in the case of awards granted in lieu of cash bonuses, which may vest at the rate of 50% per year.

F-30

---

Information
regarding the Plan for 2001, 2000 and 1999 is as follows:

2001

2000

1999Number of shares under stock options:Outstanding at beginning of year

18,292,020

17,150,536

16,151,668Granted

3,872,200

3,602,700

3,307,000Exercised

(2,663,200
)
(2,431,716
)
(2,235,132
)Canceled

(36,500
)
(29,500
)
(73,000
)Outstanding at end of year

19,464,520

18,292,020

17,150,536Available for grant at end of year

9,474,100

13,309,800

1,683,000Exercisable at end of year

10,572,570

9,400,070

8,314,200Weighted average exercise price:Granted

$35.34

$36.28

$43.28Exercised

$10.45

$10.48

$7.37Canceled

$29.82

$31.12

$16.31Outstanding at end of year

$27.09

$22.93

$18.38Exercisable at end of year

$20.59

$15.01

$10.19Weighted average fair value of options granted during the period

$17.49

$17.86

$18.03


F-31

---

Options OutstandingRange of
Exercise Prices

Number Outstanding at
December 31, 2001

Weighted Average
Remaining
Contractual Life

Weighted Average
Exercise Price$
5.75$10.00

2,265,700

4.7 Years

$
5.76$
10.01$20.00

6,481,420

6.4 Years

$
16.38$
20.01$30.00

2,000

7.4 Years

$
27.28$
30.01$40.00

7,195,400

9.3 Years

$
35.36$
40.01$50.00

3,467,000

8.0 Years

$
43.49$
50.01$56.63

53,000

8.3 Years

$
53.3819,464,520


Options ExercisableRange of
Exercise Prices

Number Exercisable at
December 31, 2001

Weighted Average Exercise Price$
5.75$10.00

2,265,700

$
5.76$
10.01$20.00

5,501,420

$
16.49$
20.01$30.00

1,000

$
27.28$
30.01$40.00

1,088,000

$
35.67$
40.01$50.00

1,702,950

$
43.66$
50.01$56.63

13,500

$
53.3310,572,570


During
the year ended December 31, 2001, 2,663,200 options were exercised for 2,663,200 shares of Class A Common Stock, resulting in increases to common stock of $26,632
and to paid-in-capital of $59,667,000, which included a tax benefit of $31,777,000 associated with the transactions.

F-32

---



16. Business Segments

The Company's principal business segment is broadcasting, which includes the operations of the Company's Univision Network, TeleFutura Network,
Galavisión and owned-and-operated stations. Beginning in the third quarter of 1999, the Company began allocating resources to Univision Online, which launched
its Internet portal during the third quarter of 2000. In April 2001, the Company also launched Univision Music Group, its music publishing and recording division. The Company manages its
broadcast, Internet and music businesses separately based on the fundamental differences in their operations. Presented below is segment information pertaining to the Company's broadcasting, music and
Internet businesses.

|                                             |  | Twelve Months Ended
December 31, 2001
|-------------------------------------------- |  | -------------------------------------
|
|
|Net revenues                                 |  | $                                    
|Direct operating expenses                    |  |                                      
|Selling, general and administrative expenses |  |                                      
|Depreciation and amortization                |  |                                      
|                                             |  |                                      
|Operating income (loss)                      |  | $                                    
|                                             |  |                                      
|Capital expenditures                         |  | $                                    
|                                             |  |                                      
|Total assets                                 |  | $                                    
|                                             |  |                                      



|                                             |  | Twelve Months Ended
December 31, 2000
|-------------------------------------------- |  | -------------------------------------
|
|
|Net revenues                                 |  | $                                    
|Direct operating expenses                    |  |                                      
|Selling, general and administrative expenses |  |                                      
|Depreciation and amortization                |  |                                      
|                                             |  |                                      
|Operating income (loss)                      |  | $                                    
|                                             |  |                                      
|Capital expenditures                         |  | $                                    
|                                             |  |                                      
|Total assets                                 |  | $                                    
|                                             |  |                                      

F-33

---

17. Quarterly Financial Information (unaudited)

|                                                    |                                  | 1st
Quarter |         | 2nd
Quarter |   | 3rd
Quarter |      | 4th
Quarter |         | Total
Year
|--------------------------------------------------- | -------------------------------- | ----------- | ------- | ----------- | - | ----------- | ---- | ----------- | ------- | ----------
|
|2001                                                |                                  |             |         |             |   |             |      |             |         |           
|Net revenues                                        |                                  | $           | 194,865 |             | $ | 237,524     |      | $           | 221,694 |           
|Income before extraordinary loss                    |                                  |             | 6,007   |             |   | 28,903      |      |             | 8,890   |           
|Net income                                          |                                  |             | 6,007   |             |   | 28,573      |      |             | 6,914   |           
|Net income available to common stockholders         |                                  |             | 5,937   |             |   | 28,573      |      |             | 6,914   |           
|Earnings Per Share Available to Common Stockholders |                                  |             |         |             |   |             |      |             |         |           
|Basic Earnings Per Share                            |                                  |             |         |             |   |             |      |             |         |           
|                                                    | Income before extraordinary loss |             | $       | 0.03        |   | $           | 0.14 |             | $       | 0.04      
|                                                    | Net income                       |             |         | 0.03        |   |             | 0.14 |             |         | 0.03      
|Diluted Earnings Per Share                          |                                  |             |         |             |   |             |      |             |         |           
|                                                    | Income before extraordinary loss |             | $       | 0.03        |   | $           | 0.12 |             | $       | 0.04      
|                                                    | Net income                       |             |         | 0.03        |   |             | 0.12 |             |         | 0.03      
|2000                                                |                                  |             |         |             |   |             |      |             |         |           
|Net revenues                                        |                                  | $           | 181,543 |             | $ | 231,073     |      | $           | 211,989 |           
|Net income                                          |                                  |             | 20,802  |             |   | 33,488      |      |             | 27,620  |           
|Net income available to common stockholders         |                                  |             | 20,667  |             |   | 33,353      |      |             | 27,485  |           
|Earnings Per Share Available to Common Stockholders |                                  |             |         |             |   |             |      |             |         |           
|Basic Earnings Per Share                            |                                  |             |         |             |   |             |      |             |         |           
|                                                    | Income before extraordinary loss |             | $       | 0.10        |   | $           | 0.16 |             | $       | 0.13      
|                                                    | Net income                       |             |         | 0.10        |   |             | 0.16 |             |         | 0.13      
|Diluted Earnings Per Share                          |                                  |             |         |             |   |             |      |             |         |           
|                                                    | Income before extraordinary loss |             | $       | 0.09        |   | $           | 0.14 |             | $       | 0.12      
|                                                    | Net income                       |             |         | 0.09        |   |             | 0.14 |             |         | 0.12      

18. Subsequent Events

On October 11, 2001, the Company entered into an asset purchase agreement to acquire stations in Killeen and El Paso, Texas from White Knight Broadcasting
for approximately $30,000,000. Concurrently, the Company assigned its right to acquire the El Paso station to Entravision for approximately $18,000,000. In January 2002, the Company acquired
the Killeen station for $12,000,000 and Entravision acquired the El Paso station.

At
December 31, 2001, the Company had a minority interest of $69,875,000 in the San Francisco, Denver and St. Louis stations, which were part of the USA Broadcasting acquisition.
In January 2002, the Company purchased the remaining interest in the San Francisco station for approximately $41,000,000.

F-34

---

In
connection with the acquisition of the USA Broadcasting stations, the Company made its final payment of approximately $592,000,000, with funds from its existing credit facility and
the proceeds from the issuance of preferred stock (see Note 12) in January 2002.

Effective
February 1, 2002, the Company entered into a time brokerage agreement with Raycom Media, Inc. ("Raycom") to manage its two stations in Puerto Rico. Under the
agreement, the Company will program WLII-TV 11 in San Juan and WSUR-TV 9 in Ponce, collectively branded as "Teleonce" on behalf of Raycom. The new programming under the
agreement will also be telecast through WORA-TV 5 in Mayaguez, the long-term western affiliate to Teleonce. The management fee to the Company will be approximately $500,000 per
year. In addition, the Company entered into an option agreement that expires on December 31, 2004 to acquire these stations for $190,000,000. The purchase price will be reduced if certain
earnings targets are met during the period prior to the expiration of the option agreement.

F-35

---



INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
Entravision Communications Corporation
Santa Monica, California

We
have audited the accompanying consolidated balance sheets of Entravision Communications Corporation and subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of operations, equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Entravision Communications Corporation and
subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity
with accounting principles generally accepted in the United States of America.



Pasadena,
California
February 8, 2002

F-36

---



ENTRAVISION COMMUNICATIONS CORPORATION        CONSOLIDATED BALANCE SHEETS        (In thousands, except share and per share data)

|                                                                                                                                                                                                                    |                                                                                                                                                            | December 31,                                                                                                                           |                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | --------------------------
|
|ASSETS                                                                                                                                                                                                              |                                                                                                                                                            |                                                                                                                                        |                           
|Current assets                                                                                                                                                                                                      |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Cash and cash equivalents                                                                                                                                  |                                                                                                                                        | $                         
|                                                                                                                                                                                                                    | Receivables:                                                                                                                                               |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            | Trade, net of allowance for doubtful accounts of 2001 $4,851; 2000 $5,966 (including amounts due from Univision of 2001 $599; 2000 $0) |                           
|                                                                                                                                                                                                                    | Prepaid expenses and other current assets (including amounts from related parties of 2001 $1,189; 2000 $273)                                               |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Deferred taxes                                                                                                                                             |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        | Total current assets      
|Property and equipment, net                                                                                                                                                                                         |                                                                                                                                                            |                                                                                                                                        | 181,135                   
|Intangible assets, net                                                                                                                                                                                              |                                                                                                                                                            |                                                                                                                                        | 1,268,351                 
|Other assets, including amounts due from related parties of 2001 $322; 2000 $562 and deposits on acquisitions of 2001 $431; 2000 $2,689                                                                             |                                                                                                                                                            |                                                                                                                                        | 12,080                    
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            | $                                                                                                                                      | 1,535,517                 
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY                                                                                                                                        |                                                                                                                                                            |                                                                                                                                        |                           
|Current liabilities                                                                                                                                                                                                 |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Current maturities of long-term debt                                                                                                                       |                                                                                                                                        | $                         
|                                                                                                                                                                                                                    | Advances payable, related parties                                                                                                                          |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Accounts payable and accrued expenses (including related parties of 2001 $1,699; 2000 $711 which includes amounts due to Univision 2001 $1,145; 2000 $362) |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        | Total current liabilities 
|Notes payable, less current maturities                                                                                                                                                                              |                                                                                                                                                            |                                                                                                                                        | 249,428                   
|Other long-term liabilities                                                                                                                                                                                         |                                                                                                                                                            |                                                                                                                                        | 2,313                     
|Deferred taxes                                                                                                                                                                                                      |                                                                                                                                                            |                                                                                                                                        | 176,992                   
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        | Total liabilities         
|Commitments and Contingencies                                                                                                                                                                                       |                                                                                                                                                            |                                                                                                                                        |                           
|Series A mandatorily redeemable convertible preferred stock, $0.0001 par value, 11,000,000 shares authorized; shares issued and outstanding 2001 and 2000 5,865,102 (liquidation value 2001 $100,970; 2000 $93,060) |                                                                                                                                                            |                                                                                                                                        | 90,720                    
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|Stockholders' equity                                                                                                                                                                                                |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Preferred stock, $0.0001 par value, 39,000,000 shares authorized, none issued and outstanding                                                              |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Class A common stock, $0.0001 par value, 260,000,000 shares authorized; shares issued and outstanding 2001 66,147,794; 2000 65,626,063                     |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Class B common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and outstanding 2001 and 2000 27,678,533                              |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Class C common stock, $0.0001 par value, 25,000,000 shares authorized; shares issued and outstanding 2001 and 2000 21,983,392                              |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Additional paid-in capital                                                                                                                                 |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Deferred compensation                                                                                                                                      |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Accumulated deficit                                                                                                                                        |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        | 987,395                   
|                                                                                                                                                                                                                    | Less stock subscription notes receivable                                                                                                                   |                                                                                                                                        |                           
|                                                                                                                                                                                                                    | Treasury stock, Class A common stock, $.0001 par value 2001, 3,684 shares; 2000 none                                                                       |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        | Total stockholders' equity
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           
|                                                                                                                                                                                                                    |                                                                                                                                                            | $                                                                                                                                      | 1,535,517                 
|                                                                                                                                                                                                                    |                                                                                                                                                            |                                                                                                                                        |                           

See Notes to Consolidated Financial Statements

F-37

---



ENTRAVISION COMMUNICATIONS CORPORATION        CONSOLIDATED STATEMENTS OF OPERATIONS        (In thousands, except share, per share and per L.L.C. membership unit data)

|                                                                                  |                                                                                                                                                                                   | Years Ended Decemjber 31,                                     |            
|--------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | -----------
|
|Net revenue (including amounts from Univision of $1,519, $4,338 and $2,748)       |                                                                                                                                                                                   | $                                                             | 208,908    
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Expenses:                                                                         |                                                                                                                                                                                   |                                                               |            
|                                                                                  | Direct operating expenses (including related parties national representation fees of $5,555, $4,145 and $3,149; which includes amounts to Univision of $5,001, $4,145 and $3,149) |                                                               |            
|                                                                                  | Selling, general and administrative expenses (excluding non-cash stock-based compensation of $3,243, $5,822 and $29,143)                                                          |                                                               |            
|                                                                                  | Corporate expenses (including related parties of $210, $527 and $522)                                                                                                             |                                                               |            
|                                                                                  | Non-cash stock-based compensation                                                                                                                                                 |                                                               |            
|                                                                                  | Depreciation and amortization                                                                                                                                                     |                                                               |            
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   |                                                               | 281,728    
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Operating loss                                                |            
|Interest expense (including amounts to Univision of $0, $3,645 and $701)          |                                                                                                                                                                                   |                                                               | (22,265    
|Non-cash interest expense relating to related-party beneficial conversion options |                                                                                                                                                                                   |                                                               |           
|Gain on sale of media properties                                                  |                                                                                                                                                                                   |                                                               | 4,977      
|Interest income                                                                   |                                                                                                                                                                                   |                                                               | 1,287      
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Loss before income taxes                                      |            
|Income tax benefit                                                                |                                                                                                                                                                                   |                                                               | 22,999     
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Net loss before equity in earnings of nonconsolidated affiliates                  |                                                                                                                                                                                   |                                                               | (65,822    
|Equity in net income (loss) of nonconsolidated affiliates                         |                                                                                                                                                                                   |                                                               | 27         
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Net loss                                                      |            
|Accretion of preferred stock redemption value                                     |                                                                                                                                                                                   |                                                               | 10,117     
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Net loss applicable to common stock                                               |                                                                                                                                                                                   | $                                                             | (75,912    
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Loss per share, basic and diluted                                                 |                                                                                                                                                                                   | $                                                             | (0.66      
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Weighted average common shares outstanding, basic and diluted                     |                                                                                                                                                                                   |                                                               | 115,223,005
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Pro forma:                                                                        |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Provision for income tax benefit                              |            
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Net loss                                                      |            
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  | Per share data:                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Net loss per share, basic and diluted                         |            
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   | Weighted average common shares outstanding, basic and diluted |            
|                                                                                  |                                                                                                                                                                                   |                                                               |            
|Loss per L.L.C. membership unit                                                   |                                                                                                                                                                                   |                                                               |            
|                                                                                  |                                                                                                                                                                                   |                                                               |            

See Notes to Consolidated Financial Statements

F-38

---



ENTRAVISION COMMUNICATIONS CORPORATION        CONSOLIDATED STATEMENTS OF  MANDATORILY REDEEMABLE PREFERRED STOCK AND EQUITY        Year ended December 31, 1999 and
for the period from January 1, 2000 through August 2, 2000        (In thousands, except share and L.L.C. membership unit data)

|                                                                                                 |  | Entravision
Communications
Company,
L.L.C. |         | Common
Stock of
Member
Corporations |   | Additional
Paid-in
Capital of
Member
Corporations |   | Deferred
Compensation |         | Accumulated
Deficit |   | Notes
Receivable
Stockholder
and Members |   | Total |        
|------------------------------------------------------------------------------------------------ |  | ------------------------------------------ | ------- | ----------------------------------- | - | ------------------------------------------------- | - | --------------------- | ------- | ------------------- | - | ---------------------------------------- | - | ----- | -------
|Balance, December 31, 1998                                                                       |  | $                                          | 14,064  |                                     | $ | 1,256                                             |   | $                     | 16,329  |                     | $ |                                         |   | $     | (6,217 
|Increase in conversion option on subordinated note agreement relating to acquisition of business |  |                                            | 13,915  |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Estimated value of subordinated note conversion option                                           |  |                                            | 2,500   |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Conversion of 813 Class A membership units into 813 Class E and F membership units               |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Interest earned on notes and subscriptions receivable from member                                |  |                                            | 23      |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Increase in notes and subscriptions receivable from member                                       |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Compensation expense attributable to employee equity awar                                        |  |                                            | 29,143  |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Repurchase of 250 shares of Telecorpus, Inc. common stock                                        |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       | (61    
|Net loss                                                                                         |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       | (39,957
|Distributions and dividends to members and stockholders                                          |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       | (2,400 
|                                                                                                 |  |                                            |         |                                     |   |                                                   |   |                       |         |                     |   |                                          |   |       |        
|Balance, December 31, 1999                                                                       |  |                                            | 59,645  |                                     |   | 1,256                                             |   |                       | 16,329  |                     |   |                                         |   |       | (48,635
|Interest earned on notes and subscriptions receivable                                            |  |                                            | 14      |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Estimated value of Univision subordinated note conversion option                                 |  |                                            |        |                                     |   |                                                  |   |                       | 31,600  |                     |   |                                         |   |       |       
|Estimated value of subordinated note conversion option                                           |  |                                            |        |                                     |   |                                                  |   |                       | 19,537  |                     |   |                                         |   |       |       
|Restricted employee equity awards of 33,923 Class D L.L.C. units                                 |  |                                            | 6,920   |                                     |   |                                                  |   |                       |        |                     |   | (6,920                                   | ) |       |       
|Amortization of deferred compensation                                                            |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   | 392                                      |   |       |       
|Unrestricted employee equity awards of 16,050 Class D L.L.C. units                               |  |                                            | 3,852   |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       |       
|Net loss for the period through August 2, 2000                                                   |  |                                            |        |                                     |   |                                                  |   |                       |        |                     |   |                                         |   |       | (63,542
|Reclassification of accumulated deficit                                                          |  |                                            | (44,711 | )                                   |   |                                                  |   |                       | (67,466 | )                   |   |                                         |   |       | 112,177
|To give effect to reorganization                                                                 |  |                                            | (25,720 | )                                   |   | (1,256                                            | ) |                       |        |                     |   | 6,528                                    |   |       |       
|                                                                                                 |  |                                            |         |                                     |   |                                                   |   |                       |         |                     |   |                                          |   |       |        
|Balance, August 2, 2000                                                                          |  | $                                          |        |                                     | $ |                                                  |   | $                     |        |                     | $ |                                         |   | $     |       
|                                                                                                 |  |                                            |         |                                     |   |                                                   |   |                       |         |                     |   |                                          |   |       |        

See Notes to Consolidated Financial Statements.

F-39

---



ENTRAVISION COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF MANDATORILY REDEEMABLE PREFERRED STOCK AND EQUITY
For the period from August 2, 2000 through December 31, 2001
(In thousands, except share data)

|                           |                                                                                                                                                                           | Mandatorily Redeemable Preferred Stock |           | Number of Common Shares |        |        |            |            |            |            |            |            |       |       |   |   |   |   |   |   |  
|-------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | --------- | ----------------------- | ------ | ------ | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ----- | ----- | - | - | - | - | - | - | -
|
|
|
|Balance, August 2, 2000    |                                                                                                                                                                           |                                       |           | $                       |       |        |           |            |           |            |           |            |      |       | $ |  |   | $ |  |   | $
|                           | Adjustments to give effect to reorganization                                                                                                                              |                                        |          |                         |        |       |            | 5,538,175  |            | 27,678,533 |            |           |       |      |   |   | 1 |   |   | 3 |  
|                           | Interest earned on subscriptions receivable                                                                                                                               |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Issuance of common stock in initial public offering, including exchange of Univision note payable for 21,983,392 Class C common shares, and net of $52,217 issuance costs |                                        |          |                         |        |       |            | 52,900,000 |            |           |            | 21,983,392 |       |      |   |   | 5 |   |   |  |  
|                           | Issuance of common stock and exchange of stock options in connection with the acquisition of Z-Spanish Media                                                              |                                        |          |                         |        |       |            | 7,187,888  |            |           |            |           |       |      |   |   | 1 |   |   |  |  
|                           | Issuance of preferred stock upon conversion of subordinated note                                                                                                          |                                        | 5,865,102 |                         |        | 78,154 |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Accretion of redemption value on preferred stock                                                                                                                          |                                        |          |                         |        | 2,449  |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Amortization of deferred compensation                                                                                                                                     |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Stock options granted to non-employees                                                                                                                                    |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Net loss for the period from August 2, 2000 through December 31, 2000                                                                                                     |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           |                                                                                                                                                                           |                                        |           |                         |        |        |            |            |            |            |            |            |       |       |   |   |   |   |   |   |  
|Balance, December 31, 2000 |                                                                                                                                                                           | 5,865,102                              |           |                         | 80,603 |        | 65,626,063 |            | 27,678,533 |            | 21,983,392 |            |      |       |   | 7 |   |   | 3 |   |  
|                           | Interest earned on subscriptions receivable                                                                                                                               |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Issuance of common stock upon exercise of stock options                                                                                                                   |                                        |          |                         |        |       |            | 521,731    |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Accretion of redemption value on preferred stock                                                                                                                          |                                        |          |                         |        | 10,117 |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Amortization of deferred compensation                                                                                                                                     |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Stock options granted to non-employees                                                                                                                                    |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Treasury stock repurchase                                                                                                                                                 |                                        |          |                         |        |       |            | (3,684     | )          |           |            |           |       | 3,684 |   |   |  |   |   |  |  
|                           | Reclassification of subscriptions receivable to current assets                                                                                                            |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           | Net loss for the year ended December 31, 2001                                                                                                                             |                                        |          |                         |        |       |            |           |            |           |            |           |       |      |   |   |  |   |   |  |  
|                           |                                                                                                                                                                           |                                        |           |                         |        |        |            |            |            |            |            |            |       |       |   |   |   |   |   |   |  
|Balance, December 31, 2001 |                                                                                                                                                                           | 5,865,102                              |           | $                       | 90,720 |        | 66,144,110 |            | 27,678,533 |            | 21,983,392 |            | 3,684 |       | $ | 7 |   | $ | 3 |   | $
|                           |                                                                                                                                                                           |                                        |           |                         |        |        |            |            |            |            |            |            |       |       |   |   |   |   |   |   |  

See Notes to Consolidated Financial Statements.

F-40

---



ENTRAVISION COMMUNICATIONS CORPORATION        CONSOLIDATED STATEMENTS OF CASH FLOWS        (In thousands)

|                                                                        |                                                                                                  | Years Ended December 31,                                                   |                                                                    
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------- | -------------------------------------------------------------------
|
|Cash Flows from Operating Activities                                    |                                                                                                  |                                                                            |                                                                    
|                                                                        | Net loss                                                                                         |                                                                            | $                                                                  
|                                                                        | Adjustments to reconcile net loss to net cash provided by operating activities:                  |                                                                            |                                                                    
|                                                                        |                                                                                                  | Depreciation and amortization                                              |                                                                    
|                                                                        |                                                                                                  | Deferred tax expense (benefit)                                             |                                                                    
|                                                                        |                                                                                                  | Amortization of debt issue costs                                           |                                                                    
|                                                                        |                                                                                                  | Amortization of syndication contracts                                      |                                                                    
|                                                                        |                                                                                                  | Intrinsic value of subordinated note conversion option                     |                                                                    
|                                                                        |                                                                                                  | Net (income) loss in equity method investees                               |                                                                    
|                                                                        |                                                                                                  | Non-cash stock-based compensation                                          |                                                                    
|                                                                        |                                                                                                  | (Gain) loss on disposal of media properties and other assets               |                                                                    
|                                                                        |                                                                                                  | Changes in assets and liabilities, net of effect of business combinations: |                                                                    
|                                                                        |                                                                                                  |                                                                            | (Increase) in accounts receivable                                  
|                                                                        |                                                                                                  |                                                                            | (Increase) in prepaid expenses and other assets                    
|                                                                        |                                                                                                  |                                                                            | Increase (decrease) in accounts payable, accrued expenses and other
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|Cash Flows from Investing Activities                                    |                                                                                                  |                                                                            |                                                                    
|                                                                        | Purchases of property and equipment                                                              |                                                                            |                                                                    
|                                                                        | Proceeds from disposal of media properties and other assets                                      |                                                                            |                                                                    
|                                                                        | Cash deposits and purchase price on acquisitions                                                 |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|Cash Flows from Financing Activities                                    |                                                                                                  |                                                                            |                                                                    
|                                                                        | Proceeds from issuance of common stock                                                           |                                                                            |                                                                    
|                                                                        | Principal payments on notes payable                                                              |                                                                            |                                                                    
|                                                                        | Proceeds from borrowings on notes payable                                                        |                                                                            |                                                                    
|                                                                        | Dividends paid to members for income taxes                                                       |                                                                            |                                                                    
|                                                                        | Purchase and retirement of common stock                                                          |                                                                            |                                                                    
|                                                                        | Payments of deferred debt costs                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|Cash and Cash Equivalents                                               |                                                                                                  |                                                                            |                                                                    
|                                                                        | Beginning                                                                                        |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        | Ending                                                                                           |                                                                            | $                                                                  
|                                                                        |                                                                                                  |                                                                            |                                                                    
|Supplemental Disclosures of Cash Flow Information                       |                                                                                                  |                                                                            |                                                                    
|                                                                        | Cash payments for:                                                                               |                                                                            |                                                                    
|                                                                        |                                                                                                  | Interest                                                                   |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  | Income taxes                                                               |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|Supplemental Disclosures of Non-Cash Investing and Financing Activities |                                                                                                  |                                                                            |                                                                    
|                                                                        | Conversion of notes payable into preferred stock and Class C common shares                       |                                                                            | $                                                                  
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        | Property and equipment acquired under capital lease obligations and included in accounts payable |                                                                            | $                                                                  
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        | Issuance of note payable in connection with redemption of common stock of member corporations    |                                                                            | $                                                                  
|                                                                        |                                                                                                  |                                                                            |                                                                    
|Assets Acquired and Debt and Equity Issued in Business Combinations     |                                                                                                  |                                                                            |                                                                    
|                                                                        | Current and other assets, net of cash acquired                                                   |                                                                            | $                                                                  
|                                                                        | Property and equipment                                                                           |                                                                            |                                                                    
|                                                                        | Intangible assets                                                                                |                                                                            |                                                                    
|                                                                        | Current and other liabilities                                                                    |                                                                            |                                                                    
|                                                                        | Deferred taxes                                                                                   |                                                                            |                                                                    
|                                                                        | Notes payable                                                                                    |                                                                            |                                                                    
|                                                                        | Increase in subordinated note conversion option                                                  |                                                                            |                                                                    
|                                                                        | Estimated fair value of properties exchanged                                                     |                                                                            |                                                                    
|                                                                        | Estimated fair value allocated to purchase option agreement                                      |                                                                            |                                                                    
|                                                                        | Issuance of common stock and exchange of stock options                                           |                                                                            |                                                                    
|                                                                        | Less cash deposits from prior year                                                               |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        |                                                                                                  |                                                                            |                                                                    
|                                                                        | Exercise of options granted in business combinations                                             |                                                                            | $                                                                  
|                                                                        |                                                                                                  |                                                                            |                                                                    

See Notes to Consolidated Financial Statements

F-41

---



ENTRAVISION COMMUNICATIONS CORPORATION        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS, REORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES



Entravision Communications Corporation (together with its subsidiaries, hereinafter, individually and collectively, "ECC" or the "Company") is a diversified
Spanish-language media company utilizing a combination of television, radio, outdoor and publishing operations to reach Hispanic consumers in the United States of America. The Company operates 40
television stations in 25 markets located primarily in the Southwestern United States of America, consisting primarily of Univision Communications Inc. ("Univision") affiliated stations. Radio
operations consist of a Spanish-language radio network, which provides programming to substantially all of the Company's 53 operational radio stations, 38 FM and 15 AM, in 23 markets located primarily
in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas. The Company's outdoor operations consist of approximately 11,200 billboards located in Los Angeles and New York.
Publishing operations consist of a newspaper publication in New York.

Pursuant
to Univision network affiliation agreements, Univision acts as the Company's exclusive sales representative for the sale of all national advertising aired on Univision
television stations. Proceeds of national sales are remitted to the Company by Univision, net of an agency commission and a network representation fee. The Univision primary network affiliation
agreements expire through December 2021.



On August 2, 2000, the Company completed an underwritten initial public offering (the "IPO") of 46,435,458 shares of its Class A common stock at a
price of $16.50 per share. The Company also sold 6,464,542 shares of its Class A common stock directly to Univision at a price of $15.47 per share. The net proceeds to the Company, after
deducting underwriting discounts and commissions, and offering expenses, were approximately $814 million.

Effective
August 2, 2000, an exchange transaction ("Exchange Transaction") was consummated whereby the direct and indirect membership interests in Entravision Communications
Company, L.L.C. ("ECC LLC") were exchanged for Class A or Class B common stock of ECC. The Class B common stock was issued to Walter F. Ulloa, Philip C. Wilkinson and Paul A.
Zevnik (and certain trusts and related entities of such individuals) in exchange for their direct and indirect membership interests in ECC LLC. The remaining individual members and stockholders (other
than Messrs. Ulloa, Wilkinson and Zevnik) of the Cabrillo Broadcasting Corporation, Golden Hills Broadcasting Corporation, Las Tres Palmas Corporation, Tierra Alta Broadcasting, Inc.,
KSMS, Inc., Valley Channel 48, Inc., and Telecorpus, Inc. (collectively, the "Affiliates") exchanged their LLC membership units and common shares of the respective corporations
for Class A common stock of ECC. Accordingly, the Affiliates became wholly owned subsidiaries of ECC, and ECC LLC became a wholly owned subsidiary of the Affiliates. The number of shares of
common stock of ECC issued to the members of ECC LLC and the stockholders of the Affiliates was determined in such a manner that the ownership interests in ECC equaled the direct and indirect
ownership interests in ECC LLC immediately prior to the exchange. Prior to the Exchange Transaction, ECC LLC and its Affiliates were considered to be under common control and, as such, the Exchange
Transaction was accounted for in a manner similar to a pooling of interests.

ECC
LLC membership units were exchanged into Class A or Class B shares of common stock of the Company at an exchange ratio of 17 shares of common stock per membership unit.
As a result, for all periods prior to the Exchange Transaction, ECC LLC membership units have been reflected as shares of ECC common stock in these notes to consolidated financial statements.

F-42

---

Additionally,
effective with the Exchange Transaction, Univision exchanged its $120 million subordinated note (see Note 5) into 21,983,392 shares of ECC Class C
common stock.

The
financial statements presented for the years ended December 31, 1999 and for the period from January 1, 2000 through August 2, 2000 are those combined statements
of ECC LLC and the Affiliates prior to the Exchange Transaction.



The accompanying consolidated financial statements include the accounts of ECC and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.



The Company accounts for its investment in its less than majority-owned investees using the equity method under which the Company's share of the net income (loss)
is recognized in the Company's statement of operations. Condensed financial information is not provided as these operations are not considered to be significant.



The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

The
Company's operations are affected by numerous factors including changes in audience acceptance (i.e., ratings), priorities of advertisers, new laws and governmental regulations and
policies and technological advances. The Company cannot predict if any of these factors might have a significant impact on the television, radio, outdoor and publishing advertising industries in the
future, nor can it predict what impact, if any, the occurrence of these or other events might have on the Company's operations. Significant estimates and assumptions made by management are used for,
but not limited to, the allowance for doubtful accounts, the estimated useful lives of long-lived and intangible assets, the recoverability of such assets by their estimated future
undiscounted cash flows, and the purchase price allocations used in the Company's business combinations.



For purposes of reporting cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash
equivalents.



Interest rate cap agreements are principally used by the Company in the management of interest rate exposure. The differential to be paid or received is accrued
as interest rates change and is recorded in the statement of operations.

F-43

---



Property and equipment are recorded at cost. Depreciation and amortization are provided using accelerated and straight-line methods over the following
estimated useful lives:

YearsBuildings and land improvements

39Outdoor advertising displays

15Transmission, studio and broadcast equipment

5-15Office and computer equipment

3-7Transportation equipment

5Leasehold improvements

Lesser of the life of the lease or economic life of the asset




Intangible assets consisting of the following items are amortized on a straight-line method over the following estimated useful lives:

YearsFCC licenses

15Television network affiliation agreements

15Goodwill

15Time brokerage agreements

15Customer base

15Radio network

15Other

1-15


Deferred
debt costs related to the Company's credit facility are amortized using a method, which approximates the effective interest method over the life of the related indebtedness.
Favorable leasehold interests are amortized over the term of the underlying lease. Presold advertising contracts are amortized over the term of the underlying contracts.



The Company reviews its long-lived assets and intangibles related to those assets periodically and upon the occurrence of events or changes in
circumstances that indicate that the recoverability of the carrying value of an asset should be assessed. Management determines potential impairment by comparing the carrying value of the
long-lived assets and identified goodwill with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should
the sum of the expected future net undiscounted cash flows be less than the carrying value, the Company may be required to recognize an impairment loss at that date. An impairment loss would be the
amount, if any, by which the carrying value exceeds the fair value of the long-lived assets and identified goodwill.

F-44

---

Goodwill
not identified with specific assets or groups of assets is evaluated to determine whether events or circumstances warrant a write-down or revised estimates of useful
lives. The Company determines potential impairment by comparing the carrying value of reportable segments or independently managed business components with the estimated future net undiscounted cash
flows expected to result from the use of the respective assets, including cash flows from disposition. Should the sum of the expected future net undiscounted cash flows be less than the carrying
value, the Company may be required to recognize an impairment loss at that date.

Impairment
losses, if any, are measured by comparing the amount by which the carrying value exceeds the fair value (estimated using discounted future cash flows) of the segment or
business component.

Management
has determined that no impairment of long-lived assets, intangibles or goodwill currently exists. In making this determination, the assumptions about future cash
flows on the assets under evaluation are critical. Some stations evaluated had limited cash flow in 2001 due to planned conversion of format or station power. The assumptions about cash flows after
conversion reflect management's estimates of how these stations are expected to perform based on similar stations and markets and possible proceeds from the sale of the assets. If these expected
increases or sale proceeds are not realized, future impairment losses may be recorded.



The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts
receivable. The Company from time to time may have bank deposits in excess of the FDIC insurance limits. As of December 31, 2001, substantially all deposits are maintained in one financial
institution. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

The
Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade receivable credit risk exposure is limited. A valuation allowance is
provided for known and anticipated credit losses. Estimated losses for bad debts are provided for in the financial statements through a charge to expense which aggregated $2.0 million,
$2.2 million and $0.8 million for the years ended December 31, 2001, 2000 and 1999, respectively. During the year ended December 31, 2000 the Company's allowance for
doubtful accounts was increased through business acquisitions in the amount of $6.3 million. The net charge off of bad debts aggregated $4.0 million, $3.5 million and
$0.6 million for the years ended December 31, 2001, 2000 and 1999, respectively.



The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that
value:

The
carrying amount of cash and cash equivalents approximates fair value because of the short maturity of those instruments.

The
carrying amount of long-term debt approximates the fair value of the Company's long-term debt based on the quoted market prices for the same or similar issues
or on the current rates offered to the Company for debt of the same remaining maturities with similar collateral requirements. Mandatorily redeemable convertible preferred stock is stated at
redemption value less the unamortized discount. The

F-45

---

discount is accreted into the carrying value of the mandatorily redeemable preferred stock through the date at which the preferred stock is redeemable at the option of the holder with a charge to
accumulated deficit using the effective-interest method. Due to the inherent uncertainties regarding the ability and ultimate timing of either the redemption or conversion of these preferred shares
and the accretion method used, it is not practical for management to determine their fair value.



Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when it is determined to be more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.



Amounts incurred for advertising costs with third parties are expensed as incurred. Advertising expense totaled approximately $2.1 million,
$2.5 million and $0.9 million for the years ended December 31, 2001, 2000 and 1999, respectively.



Television and radio revenue related to the sale of advertising is recognized at the time of broadcast. Network compensation from Univision's primary network is
recognized ratably over the period of the agreement. Network compensation aggregated $0.6 million, $4.3 million and $2.7 million for the years ended December 31, 2001, 2000
and 1999, respectively. Revenue for outdoor advertising space is recognized ratably over the term of the contract, which is typically less than twelve months. Publishing advertising revenue is
recognized when advertisements are published and circulation revenue is recognized based on the date of publication, net of provisions for related returns.



The Company operates certain stations under local marketing agreements and time brokerage agreements whereby the Company sells and retains all advertising
revenue. The broadcast station licensee retains responsibility for ultimate control of the station in accordance with all FCC rules and regulations. The Company pays a fixed fee to the station owner,
as well as all expenses of the station, and performs other functions. The financial results of the local marketing and time brokerage agreements operated stations are included in the Company's
statement of operations from the date of commencement of the respective agreement.



The Company exchanges broadcast time for certain merchandise and services. Trade revenue and the related assets are recorded when spots air at the fair value of
the goods or services received or time aired, whichever is more readily determinable. Trade expense and the related liability are recorded when the

F-46

---

goods or services are used or received. Trade revenue related to exchange transactions was approximately $9.2 million, $6.5 million and $1.3 million for the years ended
December 31, 2001, 2000 and 1999, respectively. Trade costs for exchange transactions were approximately $7.4 million, $6.5 million and $1.3 million for the years ended
December 31, 2001, 2000 and 1999, respectively.



The Company accounts for stock-based employee compensation under the requirements of Accounting Principles Board (APB) Opinion No. 25, which does not
require compensation to be recorded if the consideration to be received is at least equal to fair value of the common stock to be received at the measurement date.

Nonemployee
stock-based transactions are accounted for under the requirements of Statements of Financial Accounting Standards ("SFAS") 123, "Accounting for Stock-Based Compensation,"
which requires compensation to be recorded based on the fair value of the securities issued or the services received, whichever is more reliably measurable.



The following table sets forth the calculation of the Company's net loss per share for the period from August 2, 2000 (the date of the Company's
reorganization) through December 31, 2000:

(In thousands,
except share and
per share data)Net loss

$
28,698Accretion of preferred stock redemption value


2,449Net loss attributable to common stock

$
31,147Shares


115,287,988Net loss per share, basic and diluted

$
0.27


Basic
earnings per share is computed as net loss less accretion of the discount on Series A mandatorily redeemable preferred stock divided by the weighted average number of shares
outstanding for the period. Diluted earnings per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and convertible securities.

For
the year ended December 31, 2001 and the period from August 2, 2000 through December 31, 2000, all dilutive securities have been excluded, as their inclusion
would have had an antidilutive effect on earnings per share. As of December 31, 2001, the securities whose conversion would result in an incremental number of shares that would be included in
determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive is as follows: 5,595,311 stock options, 349,678 unvested stock grants subject to
repurchase and 5,865,102 shares of Series A mandatorily redeemable convertible preferred stock.

F-47

---



Basic earnings per membership unit is computed as net loss divided by the number of membership units outstanding as of the last day of each period. Diluted
earnings per unit reflects the potential dilution that could occur from membership units through options and convertible securities.

For
the period from January 1, 2000 through August 2, 2000, the date of the Exchange Transaction, and for the year ended December 31, 1999 all dilutive securities
have been excluded, as their inclusion would have had an antidilutive effect on earnings per membership unit.

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

For the period from
January 1, 2000
through
August 2, 2000

Year Ended
December 31, 1999(In thousands, except unit
and per unit data)Net loss

$
63,542

$
39,957Less loss of member corporations


2,886


3,547Net loss applicable to L.L.C. members

$
60,656

$
36,410L.L.C. membership units outstanding


1,953,924


1,903,951Loss per L.L.C. membership unit

$
31.04

$
19.12




The pro forma income tax information is included in these financial statements for all periods prior to the Exchange Transaction to show what the significant
effects might have been on the historical statements of operations had the Company and its Affiliates not been treated as flow-through entities
not subject to income taxes. The pro forma information reflects a benefit for income taxes at the assumed effective rate for the years ended December 31, 2000 and 1999.

The
weighted average number of shares of common stock outstanding during the years ended December 31, 2000 and 1999, used to compute pro forma basic and diluted net loss per share
is based on the conversion ratio used to exchange ECC LLC membership units and member corporation shares for shares of ECC's common stock in the Exchange Transaction.



For the years ended December 31, 2001, 2000 and 1999, the Company had no components of comprehensive income.



Certain amounts in the prior year financial statements and related footnote disclosures were reclassified to conform to the current year presentation with no
effect on net loss or stockholders' equity.

F-48

---



In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 141, "Business Combinations" and SFAS 142, "Goodwill and Other
Intangible Assets." The most significant changes made by SFAS No. 141 are: (i) requiring that the purchase method of accounting be used for all business combinations initiated after
June 30, 2001, and (ii) establishing specific criteria for the recognition of intangible assets separately from goodwill.

SFAS
No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets (i.e., post acquisition accounting) and is effective for the Company on
January 1, 2002. The most significant changes made by SFAS No. 142 are (i) goodwill and indefinite-lived intangible assets will no longer be amortized; (ii) goodwill and
indefinite-lived intangible assets will be tested for impairment at least annually; and (iii) the amortization of intangible assets with finite lives will no longer be limited to
forty years. Management is in the process of determining the expected impact on earnings and existing goodwill and other intangibles upon adoption. As of December 31, 2001, the net book value
of intangible assets, which management believes will meet the indefinite life criterion includes goodwill, FCC licenses, Univision network affiliation agreements and the Company's radio network,
totaled approximately $1.2 billion. The amortization expense related to these assets for the year ended December 31, 2001 was approximately $87 million.

In
June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations," which addresses financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for the Company beginning January 1, 2003. Management does
not expect that adoption of this standard will have a material impact on the Company's financial statements.

In
August 2001, the FASB issued SFAS No. 144, "Accounting For The Impairment or Disposal of Long-Lived Assets," which addresses accounting and financial
reporting for the impairment or disposal of long-lived assets. This statement is effective for the Company as of January 1, 2002. Management does not expect that adoption of this
standard will have a material effect on the Company's results of operations or financial position.

F-49

---



2. BUSINESS ACQUISITIONS AND DISPOSITIONS



During the years ended December 31, 2001, 2000 and 1999, the Company made the following acquisitions, some of which were asset acquisitions and did not
constitute a business. All business acquisitions have been accounted for as purchase business combinations with the operations of the businesses included subsequent to their acquisition dates. The
allocation of the respective purchase prices is generally based upon management's estimates of the discounted future cash flows to be generated from the media properties for intangible assets, and
replacement cost for tangible assets, and as it relates to certain 2001 acquisitions, reflects management's preliminary allocation of purchase price. All business combinations completed on or before
June 30, 2001 have been accounted for under APB No. 16. Business combinations entered into subsequent to June 30, 2001 have been accounted for in accordance with SFAS
No. 141 and the applicable paragraphs of SFAS No. 142.

During
2001, the Company acquired the license for radio station KXGM-FM in Dallas, Texas in exchange for approximately $19.2 million in cash and two of the Company's
radio station licenses with a fair market value of approximately $11.2 million. This exchange transaction was accounted for at fair value with no gain or loss recognized. In a separate
transaction, the Company acquired radio station KDVA-FM in Phoenix, Arizona for approximately $10.1 million.

Additionally
in separate transactions, the Company acquired television stations in Hagerstown, Maryland, Reno, Nevada, Carson City, Nevada and Melbourne, Florida for an aggregate
purchase price of approximately $11.8 million. Additionally, the Company acquired a construction permit for a television station in Santa Barbara, California for approximately
$4.8 million.



In April 2000, the Company acquired all of the outstanding capital stock of Latin Communications Group Inc. ("LCG") for approximately
$256 million, plus the assumption of certain liabilities. LCG operated 17 radio stations located in California, Colorado, New Mexico and Washington D.C. and also owned and operated two
Spanish-language publications. In connection with this acquisition, the Company issued a $90 million convertible subordinated note. The subordinated note contained two conversion rights, a
voluntary option to the holder at any time after December 31, 2000 and the second automatically upon the effectiveness of the IPO and the Exchange Transaction. Effective with the Exchange
Transaction, as discussed in Note 1, the subordinated note converted into 5,865,102 shares of Series A mandatorily redeemable convertible preferred stock of ECC.

In
connection with the $90 million convertible subordinated note, the Company recorded non-cash interest expense of approximately $8.1 million during the year
ended December 31, 2000. Upon conversion, the carrying value of the note, net of the unamortized beneficial conversion discount of $11.4 million, was recorded as Series A
mandatorily redeemable convertible preferred stock (see Note 11).



In August 2000, the Company acquired all of the outstanding capital stock of Z-Spanish Media Corporation ("Z-Spanish Media").
Z-Spanish Media owned 33 radio stations and an outdoor billboard business. The purchase price, as amended, consisted of approximately $222 million in cash, 7,187,888 shares of
newly-issued Class A common stock of the Company after the reorganization as discussed in Note 1, and the assumption of certain liabilities including approximately $110 million of
outstanding debt

F-50

---

and $2.4 million in connection with the December 2000 settlement with Hispanic Broadcasting Corporation to satisfy a contract dispute in a proposed exchange of certain radio stations
between the parties. Furthermore, to comply with a preliminary Department of Justice inquiry, seven of Z-Spanish Media's radio stations were transferred to a trust. The beneficiaries of
the trust are the former stockholders of Z-Spanish Media. The net proceeds from the sale of these stations will be remitted to the former stockholders of Z-Spanish Media. As of
December 31, 2001, two of the stations had not yet been sold.

In
connection with this acquisition, the Company issued approximately 1.5 million stock options to purchase its Class A common stock in exchange for Z-Spanish
Media's previously outstanding stock options. In connection with these stock options, the Company also recorded as additional purchase price approximately $12.4 million for the excess of the
estimated fair value over the intrinsic value of
the unvested options. Additionally, during 2001 the Company recognized approximately $0.8 million as non-cash stock-based compensation with respect to the remaining unvested
options.

Additionally,
as part of this business combination, the Company has adopted a plan to restructure its radio division. In accordance with this plan, management recorded approximately
$1.4 million relating to employee termination and exit costs of the acquired business. These amounts were recorded as a purchase accounting adjustment, resulting in an increase in goodwill and
have been included in accrued expenses in the accompanying consolidated balance sheet. Substantially all of the termination and exit costs have been paid by December 31, 2001.

During
2001, the Company finalized its purchase price allocation in which approximately $176.4 million was assigned from goodwill to the radio network intangible asset. As a
result, deferred tax liabilities increased approximately $70.6 million with a corresponding increase in goodwill.



In August 2000, the Company acquired the Federal Communications Commission ("FCC") licenses of radio stations KACD(FM) Santa Monica, California, and
KBCD(FM) Newport Beach, California, from Citicasters Co., a subsidiary of Clear Channel Communications, Inc., for approximately $85 million in cash.



In September 2000, the Company acquired certain assets relating to the operations of radio stations KFRQ(FM), KKPS(FM), KVPA(FM) and KVLY(FM) from Sunburst
Media, LP for $55 million in cash.



In October 2000, the Company acquired approximately 1,200 outdoor display faces located in New York from Infinity Broadcasting Corporation for a total of
approximately $168 million in cash.



In December 2000, the Company acquired certain assets of television station WUNI-TV in Boston, Massachusetts. The aggregate purchase price paid
of $47.5 million consisted of $10 million in cash and a note payable in the amount of $37.5 million (see Note 5).

F-51

---



Also during 2000, the Company acquired four additional television stations for an aggregate purchase price of $82.3 million and two radio stations for an
aggregate purchase price of $14 million.

During
the year ended December 31, 1999, in several separate transactions, the Company acquired nine television stations for an aggregate purchase price of $69.4 million
and four radio stations for an aggregate purchase price of $2.6 million. The excess of cost over the fair value of net assets acquired relating to these acquisitions aggregated
$67.1 million.

The
following is a summary of the purchase price allocation for the 2001, 2000 and 1999 acquisitions:

|                                                            |  | 2001 |       | 2000 |   | 1999    |  
|----------------------------------------------------------- |  | ---- | ----- | ---- | - | ------- | -
|
|Current and other assets                                    |  | $    | 0.2   |      | $ | 25.8    |  
|Property and equipment                                      |  |      | 3.7   |      |   | 128.3   |  
|Intangible assets                                           |  |      | 57.5  |      |   | 1,164.0 |  
|Current and other liabilities                               |  |      |      |      |   | (25.8   | )
|Deferred taxes                                              |  |      | (3.0  | )    |   | (123.3  | )
|Notes payable                                               |  |      |      |      |   | (40.0   | )
|Increase in subordinated note conversion option             |  |      |      |      |   |        |  
|Estimated fair value of properties exchanged                |  |      | (11.2 | )    |   |        |  
|Estimated fair value allocated to purchase option agreement |  |      |      |      |   | (3.5    | )
|Issuance of common stock and exchange of stock options      |  |      |      |      |   | (131.0  | )
|Less cash deposits from prior year                          |  |      | (2.5  | )    |   | (8.5    | )
|                                                            |  |      |       |      |   |         |  
|Net cash paid                                               |  | $    | 44.7  |      | $ | 986.0   |  
|                                                            |  |      |       |      |   |         |  



In November and December 2001, the Company sold three of its radio stations, KCAL-AM in Redlands, California, KSZZ-AM in San
Bernardino, California and KHOT-AM in Madera, California for an aggregate amount of approximately $7.5 million. The gain on the sale of these radio stations was approximately
$3.4 million.

In
June 2001, the Company sold two of its radio stations, KEWE-AM and KHHZ-FM in Oroville, California, for an aggregate amount of approximately
$2.6 million. The gain on the sale of these radio stations was approximately $1.6 million.

In
August 2000, the Company sold certain outdoor advertising display faces and related assets located in Joliet, Illinois for $1 million in cash. In December 2000,
the Company sold all of its assets relating to
radio station WACA-AM in Wheaton, Maryland for $2.5 million in cash. No gain or loss was recognized as a result of these dispositions.



In January 2002, the Company acquired two television stations in El Paso, Texas and Corpus Christi, Texas for an aggregate purchase price of
$18.3 million.

F-52

---



The Company has also entered into an agreement to acquire a radio station in Denver, Colorado for $47.5 million. Management intends to close on this
transaction upon receiving FCC approval, which it anticipates receiving during 2002.



The following pro forma results of continuing operations give effect to the Company's 2001, 2000 and 1999 acquisitions discussed above as if they had occurred on
January 1, 2000, 1999 and 1998, respectively. The unaudited pro forma results have been prepared using the historical financial statements of the Company and each acquired entity, if considered
a business. The unaudited pro forma results give effect to certain adjustments including amortization of goodwill, depreciation of property and equipment, interest expense and the related tax effects
as if the Company had been a tax paying entity since January 1, 1999. Additionally, pro forma basic and diluted net loss per share has been calculated as if the reorganization had occurred as
of January 1, 1999.

December 31,2001

2000

1999(Unaudited)

(Unaudited)

(Unaudited)(In millions of dollars, except per share data)Net revenue

$
208.9

$
200.8

$
159.0Net loss


(76.2
)

(141.7
)

(133.7
)Basic and diluted net loss per share

$
(0.66
)
$
(2.13
)
$
(2.21
)


The
above pro forma financial information does not purport to be indicative of the results of operations had the acquisitions actually taken place on the dates indicated above. Due to
the Company's growth through acquisitions, the period to period comparison may not be meaningful and neither historical nor proforma financial information is intended to be a projection of future
results or trends.

F-53

---

3. PROPERTY AND EQUIPMENT

Property and equipment at December 31 consists of:

2001

2000(In millions of dollars)Buildings

$
20.2

$
9.6Construction in progress


7.6


13.2Outdoor advertising displays


84.1


83.9Leasehold improvements and land improvements


5.2


3.5Transmission, studio and other broadcast equipment


75.2


59.6Office and computer equipment


12.6


8.3Transportation equipment


2.7


2.0207.6


180.1Less accumulated depreciation and amortization


39.2


21.2168.4


158.9Land


12.7


10.4$
181.1

$
169.3


4. INTANGIBLE ASSETS

Intangible assets at December 31 consist of:

2001

2000(In millions of dollars)FCC licenses

$
668.6

$
647.5Television network affiliation agreements


62.7


56.2Goodwill


404.6


338.0Time brokerage agreements


46.8


46.8Customer base


45.6


22.1Radio network


176.4


176.4Other


52.5


40.31,457.2


1,327.3Less accumulated amortization


188.8


71.9$
1,268.4

$
1,255.4


F-54

---

5. LONG-TERM DEBT AND NOTES PAYABLE

Notes payable at December 31 are summarized as follows:

2001

2000(In millions of dollars)Credit facility

$
199.0

$
200.0Note payable for station acquisition, due in annual principal installments of $7.5 million through January 2006. Interest is payable quarterly commencing January 2002. The note may be paid in cash or the Company's Class A common stock, at the sole
discretion of the Company(A)


37.5


37.5Time brokerage contract payable, due in annual installments of $1 million bearing interest at LIBOR (1.9% at December 31, 2001) through June 2011


10.0


11.0Other


6.2


6.5252.7


255.0Less reduction of long-term debt (A)


37.5


215.2


255.0Less current maturities


3.3


2.5$
211.9

$
252.5


---



The Company has a credit facility in the amount of $600 million, of which $199 million and $200 million were outstanding at
December 31, 2001 and 2000, respectively. The credit facility is secured by substantially all of the Company's assets as well as the pledge of the stock of several of the Company's
subsidiaries, including the special purpose subsidiaries formed to hold our FCC licenses. The credit facility consists of a
$250 million revolving facility and a $150 million Term A loan, both bearing interest at LIBOR (1.9% at December 31, 2001) plus a margin ranging from 0.875% to 2.75% based on the
Company's leverage, and a $200 million Term B loan bearing interest at LIBOR plus 2.75%. The revolving facility expires on December 31, 2007. The Term A loan commitment expired on
July 31, 2001. Upon expiration of the Term A loan commitment, the Company has a $150 million incremental loan facility with substantially the same terms, expiring on December 31,
2007. The Term B loan expires on December 31, 2008. The line-of-credit facility contains scheduled quarterly reductions in the amount that is available ranging from
$6.3 million to $18.8 million, commencing September 30, 2002. The Term B loan contains scheduled quarterly reductions in the amount that is available ranging from
$0.5 million to $42.5 million, commencing September 30, 2001. In addition, the Company pays a quarterly loan commitment fee ranging from 0.25% to 0.75% per annum, which is levied
upon the unused portion of the amount available. All of the outstanding balance at December 31, 2001 and 2000 was under the Term B loan.

F-55

---

The
credit facility also contains a mandatory prepayment clause in the event the Company should liquidate any assets if the proceeds are not utilized to acquire assets of the same type
within one year, receive insurance or condemnation proceeds which are not fully utilized toward the replacement of such assets, or have excess cash flows (as defined in our credit agreement), 50% of
which shall be used to reduce the outstanding loan balance.

The
credit facility contains certain financial covenants relating to maximum total debt ratio, total interest coverage ratio, a fixed charge coverage ratio and a ceiling on annual
capital expenditures. The covenants become increasingly restrictive in the later years of the facility. The credit facility also contains restrictions on the incurrence of additional debt, the payment
of dividends, acquisitions and the sale of assets over a certain limit. Additionally, the Company is required to enter into interest rate agreements if its leverage exceeds certain limits as defined
in the agreement. No such agreements have been entered into at December 31, 2001 or 2000.

In
February 2002, the Company entered into negotiations with its bank to amend its credit facility and repay the balance due under the Term B loan and reduce the credit facility
to $400 million. It is anticipated that the Term B loan will be repaid with the proceeds from a contemplated debt offering of senior subordinated notes. Aggregate maturities of
long-term debt and notes payable at December 31, 2001 are as follows:

Years Ending December 31,

Amount(In millions
of dollars)2002

$
3.32003


3.22004


3.12005


3.32006


3.3Thereafter


199.0$
215.2




On December 30, 1996, the Company issued a $10 million subordinated note to Univision. This note was subordinated to all senior debt. The note was
due December 30, 2021 with interest at 7.01% per annum, for which Univision agreed to provide the Company with network compensation equal to the amount of annual interest due. Under a separate
agreement, Univision had the option to exchange the note into Class A membership units of ECC LLC representing a 27.9% interest in the Company, at the holder's option at any time prior to
maturity. During 1999 certain conditions restricting the exchange of the note were eliminated and, as such, the Company recorded non-cash interest expense of $2.5 million based on
the estimated intrinsic value of the option feature at the date the note was entered into.

On
March 2, 2000, the note was amended and increased to $120 million, and the option exchange feature was increased from 27.9% to 40%, resulting in additional
non-cash interest expense of $31.6 million during the quarter ended March 31, 2000 based on the estimated intrinsic value of the option feature. The intrinsic value of the
exchange option feature was determined using an estimate by

F-56

---

management based primarily on the estimated IPO price as the fair market value. On August 2, 2000, the note was exchanged for Class C common stock of the Company, as described in
Note 1.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses at December 31 consist of:

2001

2000(In millions of dollars)Accounts payable

$
3.4

$
5.0Accrued payroll and compensated absences


5.9


7.0Income taxes payable





3.0Executive employment agreement and bonuses





2.2Professional fees and transaction costs


1.2


5.1Accrued interest


3.8


0.7Deferred revenue


2.7


2.0Accrued purchase option agreement


1.5


Accrued national representation fees


1.5


0.9Other


5.2


4.4$
25.2

$
30.3


F-57

---



7. INCOME TAXES

Prior to the reorganization of the Company as described in Note 1, the combined organization included various taxpaying and non-taxpaying
entities. Each of the entities filed separate federal and state tax returns. Deferred taxes were not provided for the difference between the book and tax basis of intangible assets, broadcast
equipment, and furniture and fixtures for the non-taxpaying entities. As a result of the reorganization and Exchange Transaction on August 2, 2000 the Company recorded a net
deferred tax liability with a corresponding charge to tax expense of approximately $10.5 million. The provision for income taxes for the years ended December 31 is as follows:

2001

2000

1999(In millions of dollars)CurrentFederal

$


$


$
0.2State


0.8


1.2


0.1Deferred


(23.8
)

(4.1
)

(0.4
)$
(23.0
)
$
(2.9
)
$
(0.1
)


The
income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 34% to pretax income for the years ended December 31 due
to the following:

2001

2000

1999(In millions of dollars)Computed "expected" tax (benefit)

$
(30.2
)
$
(32.3
)
$
(13.6
)Change in income tax resulting from:State taxes, net of federal benefit


(5.0
)

(3.2
)

(1.4
)Non-deductible expenses


12.2


22.1


15.0Effect of change in tax status





10.5


Other








(0.1
)$
(23.0
)
$
(2.9
)
$
(0.1
)


F-58

---

The
components of the deferred tax assets and liabilities at December 31 consist of the following:

2001

2000(In millions of dollars)Deferred tax assets:Accrued expenses

$
4.7

$
2.2Accounts receivable


1.9


3.3Net operating loss carryforward


28.0


12.8Stock-based compensation


0.2


0.334.8


18.6Deferred tax liabilities:Intangible assets


(192.5
)

(125.1
)Property and equipment


(14.8
)

(14.7
)(207.3
)

(139.8
)$
(172.5
)
$
(121.2
)


The
deferred tax amounts have been classified in the accompanying balance sheets at December 31 as follows:

2001

2000(In millions of dollars)Current assets

$
4.5

$
11.2Non-current liabilities


(177.0
)

(132.4
)$
(172.5
)
$
(121.2
)


The
Company has recorded deferred tax assets of $34.8 million, including the benefit of approximately $78.5 million in federal net operating loss carryforwards which expire
through 2020.

8. COMMITMENTS

The Company has agreements with certain media research and rating providers, expiring at various dates through December 2006, to provide television and
radio audience measurement services. Pursuant to these agreements, the Company is obligated to pay these providers a total of $18.8 million in increasing annual amounts. The annual commitments
range from $0.3 million to $5.4 million.

F-59

---



The Company leases facilities and broadcast equipment under various operating lease agreements with various terms and conditions, expiring at various dates
through December 2025. The approximate future minimum lease payments under these operating leases at December 31, 2001 are as follows:

Years Ending December 31,

Amount(In millions of dollars)2002

$
6.12003


5.52004


4.52005


4.02006


3.4Thereafter


19.1$
42.6


Total
rent expense under operating leases, including rent under month-to-month arrangements, was approximately $23.2 million, $9.4 million and
$2.0 million for the years ended December 31, 2001, 2000 and 1999, respectively.



The Company has entered into employment agreements (the "Agreements") with two executive officers, who are also stockholders and directors, through
August 2005. The Agreements provide that a minimum annual base salary and a bonus be paid to each of the executives. The Company accrued approximately $0, $1.6 million and
$1.1 million of bonuses payable to these executives for the years ended December 31, 2001, 2000 and 1999, respectively. Additionally, the Agreements provide for a continuation of each
executive's annual base salary and annual bonus through the end of the employment period if the executive is terminated due to a permanent disability or without cause, as defined in the Agreements.

The
Company also has an employment arrangement with its executive vice president which provides for an annual base salary and bonus. Additionally, in 1997 the employee was awarded
922,828 shares of Class A common stock in the Company, which vested through January 2000. The estimated fair value associated with this award of was approximately $27.7 million.
The Company has recorded $26.3 million of compensation expense in connection with this award for the year ended December 31, 1999.

In
January 1999, the Company entered into an employment agreement with a senior vice president which expires on January 4, 2002 and provides for an annual base salary and
bonus to be paid to the employee. As part of this agreement, the Company originally granted an option to the employee to purchase Class A common stock. As amended in April 2000, the
Company sold the employee 82,195 shares of restricted Class A common stock at $0.01 per share. The Company may repurchase the restricted shares at $0.01 per share. The number of shares subject
to the Company's repurchase option is eliminated proportionately over three years from the original grant date. The intrinsic value of the original option at the grant date was determined by
management using the estimated IPO price. In accordance with APB No. 25, the Company recorded $2.8 million in compensation expense during 1999 attributable to the original option grant,
which is reflected as non-cash stock-based compensation in the statement of

F-60

---

operations. This amount approximates the total intrinsic value of the amended employee restricted Class A common stock purchase. Accordingly, no amounts have been recorded for
non-cash stock-based compensation for this grant during the years ended December 31, 2001 and 2000.

9. RELATED-PARTY TRANSACTIONS

Related-party transactions not discussed elsewhere consist of the following:

In
August 2001, the Company entered into a joint venture agreement to establish an exclusive national advertising representative for all Spanish-language radio stations owned or
operated by the joint venture partners, as well as radio stations currently represented by the third party. The joint venture is owned equally and is co-managed with each party having
equal representation on its board of directors.

The
Company has unsecured advances of $0.1 million and $0.2 million payable to related parties, which are due on demand at December 31, 2001 and 2000, respectively.

The
Company has unsecured stock subscriptions due from officer/director/stockholders of the Company amounting to $0.6 million at December 31, 2001 and 2000 respectively.
The advances are due on demand and have been recorded as a reduction of equity at December 31, 2000. The stock subscriptions were paid in full in 2002 and have been included in other current
assets as of December 31, 2001. In addition, the Company has unsecured advance receivables due on demand from related parties amounting to $0.3 million at December 31, 2001 and
2000. At December 31, 2001 and 2000, the Company also has notes receivable totaling $0.6 million from two officers which bear interest ranging from 6.02% to 9.75% and are due from
August 2002 through October 2005.

Prior
to July 2001, the Company utilized the services of a law firm, a partner of which is a stockholder and director. Total legal fees incurred with this law firm aggregated
approximately $0.3 million, $3.6 million and $0.5 million for the years ended December 31, 2001, 2000 and 1999, respectively.
Approximately $0.1 million and $0.8 million of the fees for the years ended December 31, 2001 and 2000, respectively, have been recorded as debt and stock issuance costs.

10. 401(K) SAVINGS PLAN

The Company has multiple 401(k) savings plans covering substantially all employees. The Company currently matches the amounts contributed by each participant up
to the maximum amount allowable under the plans for its defined contribution plans. Additionally, the Company has a 401(k) savings plan which allows discretionary matching contributions. Employer
matching contributions for the year ended December 31, 2001 and 2000 aggregated approximately $0.3 million and $0.4 million, respectively.

11. STOCKHOLDERS' EQUITY



The First Restated Certificate of Incorporation of ECC authorizes both common and preferred stock. The common stock has three classes identified as A, B and C
which have similar rights and privileges, except the Class B common stock provides ten votes per share as compared to one vote per share for all other classes of common stock. Univision, as the
holder of all Class C common stock, is entitled to vote as a separate class to elect two directors, and has the right to vote as a separate class on certain material transactions.
Class B and C common stock is convertible at the holder's option into one fully paid and

F-61

---

nonassessable share of Class A common stock and is required to be converted into one share of Class A common stock upon certain events as defined in the First Restated Certificate of
Incorporation.

In
April 2000, the Company granted an unrestricted stock award to an executive vice president and officer totaling 240,737 shares of Class A common stock. As a result of
this grant the Company recorded a non-cash stock-based compensation charge of $3.4 million.

In
May 2000, the Company granted restricted stock awards to employees, directors and consultants totaling 494,496 Class A shares of common stock. As a result of these
grants, the Company recorded a deferred non-cash stock-based compensation charge of $6.9 million that is being amortized over the three-year vesting period beginning in
the second quarter of 2000. Approximately $2.3 million and
$1.3 million of the deferred charge has been amortized during the years ended December 31, 2001 and 2000, respectively.

On
March 19, 2001, the Company's Board of Directors approved a stock repurchase program. The Company is authorized to repurchase up to $35.0 million of outstanding
Class A common stock from time to time in open market transactions at prevailing market prices, block trades and private repurchases. The extent and timing of any repurchases will depend on
market conditions and other factors. The Company intends to finance stock repurchases, if and when made, with available cash on hand and cash provided by operations. No shares of Class A common
stock had been repurchased under the stock repurchase program as of December 31, 2001.



The Company is authorized to issue up to 50 million shares of preferred stock with a par value of $0.0001, in one or more series. The Company's Board of
Directors (the "Board") is authorized to establish the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series, as well
as the qualifications, limitations or restrictions. As of December 31, 2001, the Company has designated 11 million shares as Series A mandatorily redeemable convertible preferred
stock, of which 5,865,102 shares are outstanding.

The
Series A preferred stock is convertible into Class A common stock on a share-per-share basis at the option of the holder at any time and accrues
dividends at 8.5% of the liquidation value ($15.35 per share) per annum, compounded annually and payable upon the liquidation of the Company or redemption. There were approximately
$11.0 million and $3.1 million of dividends in arrears at December 31, 2001 and 2000, respectively. All accrued and unpaid dividends are to be waived and forgiven upon the
conversion of the Series A preferred stock into Class A common stock. The Series A preferred stock is subject to redemption at face value plus accrued dividends at the option of
the holder at any time after April 2006, and must be redeemed in full in April 2010. The Company also has the right to redeem the Series A preferred stock at its option at any
time one year after its issuance, provided that the trading price of the Class A common stock equals or exceeds 130% of the IPO price of the Class A common stock for 15 consecutive
trading days immediately before such redemption. The Series A redemption price per share is equal to the sum of the original issue price per share ($15.35) plus accrued and unpaid dividends.

The
Company is recording a periodic charge to accumulated deficit to accrete the Series A preferred stock up to its redemption value. During the years ended December 31,
2001 and 2000, the Company recorded accretion charges of $10.1 million and $2.4 million, respectively.

F-62

---

12. EQUITY INCENTIVE PLANS

In June 2000, the Company adopted a 2000 Omnibus Equity Incentive Plan that allows for the award of up to 11,500,000 shares of Class A common stock.
Awards under the plan may be in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock or stock units. The Plan is administered by a committee,
which is appointed by the Board. This committee determines the type, number, vesting requirements and other features and conditions of such awards.

The
Company issued a total of 1,154,605 stock options in 2001, and 5,583,876 stock options in 2000 to various employees and non-employee directors of the Company under its
2000 Omnibus Equity Incentive Plan. Included in the 2000 grants are 1,494,161 stock options which were granted in exchange for stock options of Z-Spanish Media as a result of the business
acquisition as described in Note 2.

The
following is a summary of stock options outstanding and exercisable for the years ended December 31:

|                                      |                                   | 2001 |       | 2000
|------------------------------------- | --------------------------------- | ---- | ----- | ----
|
|
|Number of shares under stock options: |                                   |      |       |     
|                                      | Outstanding at beginning of year  |      | 5,511 |     
|                                      | Granted                           |      | 1,155 |     
|                                      | Exercised                         |      | 522   |     
|                                      | Forfeited                         |      | 549   |     
|                                      |                                   |      |       |     
|                                      | Outstanding at end of year        |      | 5,595 |     
|                                      |                                   |      |       |     
|                                      | Available to grant at end of year |      | 5,905 |     
|                                      |                                   |      |       |     
|                                      | Exercisable at end of year        |      | 1,660 |     
|                                      |                                   |      |       |     

The
following table summarizes information about stock options outstanding at December 31, 2001:

|             |  | Options Outstanding |  | Options Exercisable
|------------ |  | ------------------- |  | -------------------
|
|$16.3816.50 |  | 3,939,681           |  | 8.62               
|$10.0313.37 |  | 851,380             |  | 9.11               
|$6.699.95   |  | 804,250             |  | 8.23               
|             |  |                     |  |                    
|             |  | 5,595,311           |  | 8.64               
|             |  |                     |  |                    

The
Company's fair value calculation for the Z-Spanish Media acquisition exchange options was made using the Black-Scholes option-pricing model with the following
assumptions: expected life of one year; volatility of 50%; risk-free interest rate of 5.89% and no dividends during the expected life. The fair value of these options was recorded as
additional purchase price in the business acquisition and is not included in the pro forma compensation expense below.

F-63

---

During
2001 and 2000, the Company recognized $0.2 and $0.7 million, respectively, of non-cash stock-based compensation expense relating to the intrinsic value of the
unvested options exchanged in the Z-Spanish Media acquisition.

SFAS
No. 123 requires the disclosure of pro forma net income and earnings per share had the Company adopted the fair value method. Under SFAS No. 123, the fair value of
stock-based awards to employees is calculated through the use of option-pricing models. These models require subjective assumptions, including future stock price volatility and expected time to
exercise, which greatly affect the calculated value.

The
Company's 2001 and 2000 fair value calculation for pro forma purposes was made using the Black-Scholes option-pricing model with the following assumptions:

2001

2000Weighted average fair value

$7.61

$9.08Expected volatility

50% to 88%

50%Risk free interest rate

5.40% to 6.07%

6.07%Expected lives

6.0 years

6.0 yearsDividend rate






Had
compensation expense for the stock option grants been determined based on the fair value at the grant date for awards consistent with the methods of SFAS No. 123, the
Company's net loss would have increased the pro forma amounts for the years ended December 31, 2001 and 2000 as follows:

2001

2000Net loss applicable to common stockholdersAs reported

$
(75,912
)
$
(94,689
)Pro forma

$
(82,082
)
$
(97,231
)Net loss per share applicable to common stockholders, basic and dilutedAs reported

$
(0.66
)
$
(0.27
)Pro forma

$
(0.71
)
$
(0.29
)


On
April 4, 2001, the Company's Board of Directors adopted the 2001 Employee Stock Purchase Plan (the "Purchase Plan"). The Purchase Plan was approved by the Company's
stockholders on May 10, 2001 at the Annual Meeting of Stockholders. Subject to adjustments in the capital structure, as defined in the Purchase Plan, the maximum number of shares of
Class A common stock that will be made available for sale under the Purchase Plan is 600,000, plus an annual increase of 600,000 shares on the first day of each of the next ten calendar years,
beginning January 1, 2002. All of the Company's employees are eligible to participate in the Purchase Plan, provided that they have completed six months of continuous service as an employee as
of an offering date. Under the terms of the Purchase Plan, employees may elect to have up to 15% of their compensation withheld to purchase shares each offering period. The purchase price of the stock
is 85% of the lower of the day preceding the beginning-of-period or end-of-period market price. The first offering period under the Purchase Plan
commenced on August 15, 2001. As of December 31, 2001, approximately $0.4 million was withheld for the Purchase Plan.

F-64

---

13. LITIGATION AND SUBSEQUENT EVENTS

The Company is subject to various outstanding claims that arose in the ordinary course of business and to other legal proceedings. In the opinion of management,
any liability of the Company which may arise out of or with respect to these matters will not materially adversely affect the financial position, results of operations or cash flows of the Company.

The
Company has initiated arbitration asserting that a former advertising representative breached contracts, that the breaches support an immediate termination for cause, and that the
breaches caused the Company several million dollars of damage. The former representative has filed an answer asserting that the termination was without cause, and filed a counterclaim asserting that
the Company is liable to the former representative for several million dollars of damage. The Company has filed an answer denying the assertions of the counterclaim. No accrual has been recorded as
the matter is in an early stage in the proceedings and the ultimate benefit or liability, if any, cannot be reasonably estimated.

Additionally,
a subsidiary of the Company acquired in a 2000 business combination was involved in a lawsuit and a default judgment was ordered against the subsidiary. The Company is an
indirect successor-in-interest for the liabilities of the subsidiary and accrued $500,000 for the judgment and related legal fees.

14. SEGMENT DATA

Upon the completion of the business and asset acquisitions during 2000, management determined that the Company operates in four reportable segments based upon the
type of advertising medium which
consists of television broadcasting, radio broadcasting, outdoor advertising and newspaper publishing. Information about each of the operating segments follows:



The Company operates 40 television stations primarily in the Southwestern United States and consisting primarily of Univision affiliates.



The Company operates 53 radio stations (38 FM and 15 AM) located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas.



The Company's outdoor advertising segment owns approximately 11,200 billboards in Los Angeles and New York.



The Company's newspaper publishing operation consists of a publication in New York.

Segment
operating profit (loss) is defined as operating profit (loss) before corporate expenses and non-cash stock-based compensation. There have been no significant sources
of revenue generated outside the United States of America during the years ended December 31, 2001, 2000 and 1999. Additionally there are no significant assets held outside the United States of
America. The accounting policies applied to determine the segment information are generally the same as those described in the summary of

F-65

---

significant accounting policies. The Company evaluates the performance of its operating segments based on separate financial data for each operating segment as provided below.

|                                              |            | Twelve Months Ended
December 31, |        
|--------------------------------------------- | ---------- | -------------------------------- | -------
|
|
|Net revenue:                                  |            |                                  |        
|                                              | TV         |                                  | $      
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        
|Direct expenses:                              |            |                                  |        
|                                              | TV         |                                  |        
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        
|Selling, general and administrative expenses: |            |                                  |        
|                                              | TV         |                                  |        
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        
|Depreciation and amortization:                |            |                                  |        
|                                              | TV         |                                  |        
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        
|Segment operating profit (loss):              |            |                                  |        
|                                              | TV         |                                  |        
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        
|Corporate expenses                            |            |                                  | 15,636 
|Non-cash stock-based compensation             |            |                                  | 3,243  
|                                              |            |                                  |        
|Operating (loss)                              |            | $                                | (72,820
|                                              |            |                                  |        
|Total assets:                                 |            |                                  |        
|                                              | TV         |                                  | $      
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        
|Capital expenditures:                         |            |                                  |        
|                                              | TV         |                                  | $      
|                                              | Radio      |                                  |        
|                                              | Outdoor    |                                  |        
|                                              | Publishing |                                  |        
|                                              |            |                                  |        
|                                              |            | Consolidated                     |        
|                                              |            |                                  |        

F-66

---

15. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the quarterly results of operations for the years ended December 31, 2001 and 2000:

|                              |                                                 | First Quarter |   | Second Quarter |   | Third Quarter |         | Fourth Quarter |   | Total   |  
|----------------------------- | ----------------------------------------------- | ------------- | - | -------------- | - | ------------- | ------- | -------------- | - | ------- | -
|
|Year ended December 31, 2001: |                                                 |               |   |                |   |               |         |                |   |         |  
|                              | Net revenue                                     |               | $ | 43,954         |   | $             | 56,864  |                | $ | 54,468  |  
|                              | Net loss                                        |               |   | (19,547        | ) |               | (10,901 | )              |   | (13,498 | )
|                              | Net loss applicable to common stock             |               |   | (20,968        | ) |               | (12,442 | )              |   | (15,068 | )
|                              | Net loss per share, basic and diluted           |               |   | (0.18          | ) |               | (0.11   | )              |   | (0.13   | )
|Year ended December 31, 2000: |                                                 |               |   |                |   |               |         |                |   |         |  
|                              | Net revenue                                     |               | $ | 17,264         |   | $             | 35,660  |                | $ | 45,049  |  
|                              | Net loss                                        |               |   | (36,584        | ) |               | (17,427 | )              |   | (25,212 | )
|                              | Net loss applicable to common stock             |               |   |               |   |               |        |                |   | (16,581 | )
|                              | Net loss per share, basic and diluted           |               |   |               |   |               |        |                |   | (0.14   | )
|                              | Pro forma net loss                              |               |   | (34,813        | ) |               | (14,586 | )              |   | (14,598 | )
|                              | Pro forma net loss per share, basic and diluted |               |   | (1.08          | ) |               | (0.45   | )              |   | (0.30   | )

Certain
adjustments were recorded in the fourth quarters of 2001 and 2000 for changes from preliminary allocations of purchase price for certain purchase business combinations.
Adjustments recorded in the fourth quarter of 2001 resulted in an increase of approximately $3 million in net loss applicable to common stock or approximately $0.03 net loss per common share.

F-67

---

QuickLinks