Use these links to rapidly review the documentINDEX

---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

---

FORM 10-K

|ý | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934    
|- | ----------------------------------------------------------------------------------------
|  | For the fiscal year ended December 31, 2002, or                                         
|o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|  | For the transition period from  to                                                      

Commission File Number0-24516

---

LOGO

HISPANIC BROADCASTING CORPORATION(Exact name of registrant as specified in its charter)

Delaware
(State of Incorporation)

99-0113417
(I.R.S. Employer Identification No.)


3102
Oak Lawn Avenue, Suite 215
Dallas, Texas 75219
Telephone (214) 525-7700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Securities
registered pursuant to Section 12(b) of the Act: Class A Common Stock

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 X    No

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.

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act).    YES X    No

On
June 28, 2002 (the last business day of the Company's most recently completed second quarter), the aggregate market price of the Class A Common Stock, $.001 par value,
of the Company, held by non-affiliates of the Company was approximately $1,746 million. (For purposes hereof, directors, executive officers and 10% or greater shareholders of the Company
have been deemed affiliates).

On
March 15, 2003, there were 80,554,583 outstanding shares of Class A Common Stock, $.001 par value per share.

---

---

---



HISPANIC BROADCASTING CORPORATION
INDEX TO FORM 10-K



|          |  |                                                                                       |  | Page
Number
|--------- |  | ------------------------------------------------------------------------------------- |  | -----------
|PART I.   |  |                                                                                      
|Item 1.   |  | Business                                                                              |  | 3          
|Item 2.   |  | Properties                                                                            |  | 19         
|Item 3.   |  | Legal Proceedings                                                                     |  | 19         
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                   |  | 20         
|PART II.  |  |                                                                                      
|Item 5.   |  | Market for Registrant's Class A Common Stock and Related Stockholder Matters          |  | 21         
|Item 6.   |  | Selected Financial Data                                                               |  | 22         
|Item 7.   |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 23         
|Item 7a.  |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 30         
|Item 8.   |  | Financial Statements and Supplementary Data                                           |  | 31         
|Item 9.   |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 56         
|PART III. |  |                                                                                      
|Item 10.  |  | Directors and Executive Officers of the Registrant                                    |  | 57         
|Item 11.  |  | Executive Compensation                                                                |  | 58         
|Item 12.  |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 60         
|Item 13.  |  | Certain Relationships and Related Transactions                                        |  | 62         
|Item 14.  |  | Controls and Procedures                                                               |  | 62         
|PART IV.  |  |                                                                                      
|Item 15.  |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      |  | 63         

2

---



PART I.

ITEM 1.BUSINESS

General

Hispanic Broadcasting Corporation (the "Company") is the largest Spanish-language radio broadcasting company, as measured in gross revenues, and the
9th largest radio broadcaster in the United States(a). As of December 31, 2002, the Company owned and operated 62 radio stations in 15 markets. Our stations are
located in 15 of the top twenty-five largest Hispanic markets in the United States, including Los Angeles, New York, Miami, Chicago, Houston, San Francisco/San Jose, Dallas/Fort Worth, San
Antonio, McAllen/Brownsville/Harlingen, Phoenix, San Diego, El Paso, Fresno, Las Vegas and Albuquerque. In addition, we also operate HBC Radio Network, which is one of the largest Spanish-language
radio broadcast networks in the United States in terms of audience delivery, and HBCi which operates the Company's Internet website at www.hispanicbroadcasting.comand a network of Hispanic
community-focused bilingual websites at www.netmio.com.

The
Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports
filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 ("Exchange Act") will be available free of charge on the Company's website at www.hispanicbroadcasting.com, beginning on
April 1, 2003 and, in the future for so long as the Company remains subject to the reporting
requirements of the Exchange Act, as soon as reasonably practicable after the reports are filed with or furnished to the Securities and Exchange Commission.

Our
strategy is to own and program top performing Spanish-language and other Hispanic-targeted radio stations, principally in the 15 largest Hispanic markets in the United States. The
Company programs 47 radio formats on 62 radio stations. As of the Fall 2002 Arbitron Ratings Book, we operated the leading Spanish-language radio station in the adult 25-54 age group, as
measured by
audience share, in 9 of the 15 largest markets and, during this same period, we operated 14 top-ten ranked radio stations, regardless of language or format, in such station's market.

We
intend to acquire or develop Hispanic-targeted radio stations in the leading Hispanic markets. The Company historically has acquired under-performing radio stations with good signal
coverage of the target population and converted the existing station format to a Hispanic-targeted format. In addition, the Company also seeks to acquire radio stations whose radio signals might
eventually be upgraded or improved. The Company's acquisition strategy typically results in a new, start-up acquisition generating operating losses for 12 to 18 months from the date of that
acquisition. We believe that the largest Hispanic markets are generally underserved by the existing Hispanic-targeted radio stations. As a result, we expect our acquisitions will achieve an acceptable
level of profitability as we build audiences and as more and more advertisers target Hispanics.

On
June 11, 2002, the Company entered into an Agreement and Plan of Reorganization with Univision Communications Inc. ("Univision") and Univision Acquisition Corporation, a
wholly-owned subsidiary of Univision. Pursuant to the terms of the agreement, the Company will become a wholly-owned subsidiary of Univision. Univision is a Spanish-language media company based in the
United States. Its operations include: Univision Network, a Spanish-language broadcast television network located in the United States; TeleFutura Network, a 24-hour general-interest
Spanish-language broadcast television network; Univision Television Group, which owns and operates 22 Univision Network television stations and 1 UPN television station; TeleFutura Television Group,
which owns and operates 27 TeleFutura Network television stations; Galavisión, a Spanish-language cable network; Univision Music Group, which includes the Univision Music label,
Fonovisa Records label, and a 50% interest in Mexican based Disa Records label as well as Fonomusic and America Musical Publishing companies; and Univision Online, an Internet company in the U.S.
Hispanic market located atwww.univision.com.

---

3

---

In
the merger, the stockholders of the Company will exchange each share of their capital stock in the Company for the right to receive 0.85 share of the Class A common stock of
Univision. As a result of the merger, the stockholders of the Company will acquire approximately 93 million shares of Class A common stock of Univision, which will, assuming no exercise
of options or warrants, represent approximately 29% of the outstanding shares of Univision and approximately 14% of the outstanding voting power of Univision as of March 15, 2003.

The
stockholders of the Company and Univision each approved the merger on February 28, 2003. On March 26, 2003, the Company and Univision reached an agreement with the
United States Department of Justice ("DOJ") regarding the merger. The closing of the merger also is conditioned on the approval of the Federal Communications Commission (the "FCC") and other customary
closing conditions. We anticipate receiving FCC approval during April 2003 and closing the merger shortly thereafter.

4

---

The
following table sets forth certain information regarding the radio stations that we owned and programmed as of December 31, 2002:

|   |  |                               |  | No. of Stations
|-- |  | ----------------------------- |  | ---------------
|
|
|1  |  | Los Angeles                   |  | 1              
|2  |  | New York                      |  | 1              
|3  |  | Miami                         |  | 2              
|4  |  | Chicago                       |  | 2              
|5  |  | Houston                       |  | 2              
|6  |  | San Francisco/San Jose        |  | 0              
|7  |  | Dallas/Fort Worth             |  | 2              
|8  |  | San Antonio                   |  | 2              
|9  |  | McAllen/Brownsville/Harlingen |  | 1              
|10 |  | Phoenix                       |  | 0              
|11 |  | San Diego                     |  | 0              
|13 |  | El Paso                       |  | 2              
|16 |  | Fresno                        |  | 0              
|17 |  | Las Vegas                     |  | 1              
|20 |  | Albuquerque                   |  | 0              
|   |  |                               |  |                
|   |  | Total                         |  | 16             
|   |  |                               |  |                

---

The
Company believes Hispanic-targeted radio broadcasting has significant growth potential for the following reasons:



5

---



The
Company was incorporated under the laws of the State of Delaware in 1992. The Company's principal executive offices are located at 3102 Oak Lawn Avenue, Suite 215, Dallas, Texas
75219 and the telephone number is (214) 525-7700.

Hispanic-Targeted Radio

Due to differences in origin, Hispanics are not a homogeneous group. The music, culture, customs and Spanish dialects vary from one radio market to another.
Consequently, the Company programs its stations in a manner responsive to the local preferences of the target demographic audience in each of the markets it serves. A well-researched mix
of Spanish-language music and on-air programming at an individual station can attract a wide audience targeted by advertisers. Programming is continuously monitored to maintain its quality
and relevance to the target audience. Most music formats are primarily variations of Regional Mexican, Tropical, Tejano and Contemporary music styles. Hispanics who may use English along with Spanish,
or perhaps favor English over Spanish, are also reached by the Company's stations through English-language formats tailored to the tastes of Hispanic audiences.
The Company currently programs stations in the classis rock, smooth jazz, and rhythmic/contemporary hit formats in this fashion. A brief description of the Company's primary programming formats
follows:

Regional Mexican.Regional Mexican consists of various types of music played in different regions of Mexico. Ranchera music,
originating in Jalisco, Mexico, is a traditional folkloric music commonly referred to as Mariachi music. Mariachi music features acoustical instruments and is considered the music indigenous to
Mexicans who have lived in the country towns. Nortena means northern, and is representative of Northern Mexico. Featuring an accordion, Nortena has a Polka sound with a distinct Mexican flavor. Banda
is a regional music from the state of Sinaloa, Mexico and is popular in California. Banda is reminiscent of marching band music with mostly brass orchestrations. Mexican Cumbia represents a regional
Mexican version of the tropical cumbia style. Grupo music is a synthesizer based modern version of traditional regional music and it covers all the principal styles of the regional genre.

Tropical.The Tropical format primarily consists of Salsa, Merengue, and Cumbia music. Salsa is dance music combining Latin
Caribbean rhythms with jazz. Salsa includes music from Puerto Rico, Cuba, and the Dominican Republic and is popular with Hispanics living in New York, Miami and Chicago. Merengue music is
up-tempo dance music originating in the Dominican Republic. There are also regional derivatives of tropical in Mexico, Central and South America, all based substantially on the Colombian
cumbia style.

Tejano.Tejano music originated in Texas and is based on Mexican themes but is indigenous to Texas. It is a combination of
contemporary rock, Ranchera, and country music. The lyrics are primarily sung in Spanish. The on-air talent speak in Spanish and English.

Contemporary.The Contemporary format includes pop, Latin rock, and ballads. This format is similar to English adult
contemporary and contemporary hit radio stations. A contemporary station may focus on softer music or may be quite up tempo depending on the age target.

Full Service.The Full Service format includes all the traditional radio services: music, news, sports, traffic reports,
special information programs and weather.

News/Talk.News includes local, national, international reports and weather, business, traffic and sports. Talk includes
commentary, analysis, discussion, interviews, call-ins and information shows.

Mexican Spanish Oldies.The Spanish Oldies format includes songs of all styles that were hits in Mexico in the 1960s and
1970s.

6

---

Rhythmic.The Rhythmic format includes Latin-oriented hip-hop, top 40 and contemporary music. The
on-air talent speak primarily in English.

Company's Stations

The following table sets forth information regarding the formats and target demographics of the radio stations owned and programmed by the Company as of
December 31, 2002:

|Ranking of
Market by
Hispanic
Population(a) |  | Market(b)         |  | Station  |  | Station Format          |  | Primary
Demographic
Market
|------------------------------------------- |  | ----------------- |  | -------- |  | ----------------------- |  | --------------------------
|1                                           |  | Los Angeles       |  | KLVE(FM) |  | Contemporary            |  | A 25-54                   
|                                            |  |                   |  | KSCA(FM) |  | Regional Mexican        |  | A 25-54                   
|                                            |  |                   |  | KTNQ(AM) |  | Spanish Oldies          |  | A 35+                     
|                                            |  |                   |  | KRCD(FM) |  | Spanish Oldies          |  | A 35+                     
|                                            |  |                   |  | KRCV(FM) |  | Spanish Oldies          |  | A 35+                     
|2                                           |  | New York          |  | WCAA(FM) |  | Contemporary            |  | A 18-34                   
|                                            |  |                   |  | WADO(AM) |  | News/Talk               |  | A 35+                     
|3                                           |  | Miami             |  | WAMR(FM) |  | Contemporary            |  | A 25-54                   
|                                            |  |                   |  | WRTO(FM) |  | Tropical                |  | A 18-34                   
|                                            |  |                   |  | WAQI(AM) |  | News/Talk               |  | A 35+                     
|                                            |  |                   |  | WQBA(AM) |  | News/Talk               |  | A 35+                     
|4                                           |  | Chicago           |  | WOJO(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  |                   |  | WIND(AM) |  | News/Talk               |  | A 25-54                   
|                                            |  |                   |  | WVIV(AM) |  | Contemporary            |  | A 18-49                   
|5                                           |  | Houston           |  | KLTN(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  |                   |  | KOVE(FM) |  | Contemporary            |  | A 18-49                   
|                                            |  |                   |  | KPTY(FM) |  | Rhythmic (English)      |  | A 18-34                   
|                                            |  |                   |  | KLTO(FM) |  | Rhythmic (English)      |  | A 18-34                   
|                                            |  |                   |  | KOBT(FM) |  | Contemporary            |  | A 18-34                   
|                                            |  |                   |  | KLAT(AM) |  | Full Service            |  | A 25-54                   
|                                            |  |                   |  | KRTX(AM) |  | Tejano                  |  | A 25-54                   
|                                            |  |                   |  | KQBU(FM) |  | Regional Mexican        |  | A 18-49                   
|6                                           |  | San Francisco     |  | KSOL(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  | San Jose          |  | KSQL(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  |                   |  | KEMR(FM) |  | Contemporary            |  | A 18-49                   
|7                                           |  | Dallas/Fort Worth |  | KLNO(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  |                   |  | KHCK(FM) |  | Tejano                  |  | A 25-49                   
|                                            |  |                   |  | KDXX(FM) |  | Contemporary            |  | A 18-49                   
|                                            |  |                   |  | KDOS(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  |                   |  | KESS(FM) |  | Regional Mexican        |  | A 18-49                   
|                                            |  |                   |  | KESS(AM) |  | Regional Mexican/Sports |  | A 18-54                   
|                                            |  |                   |  | KHCK(AM) |  | Tejano                  |  | A 25-49                   
|8                                           |  | San Antonio       |  | KXTN(FM) |  | Tejano                  |  | A 25-54                   
|                                            |  |                   |  | KROM(FM) |  | Regional Mexican        |  | A 25-54                   
|                                            |  |                   |  | KXTN(AM) |  | Tejano                  |  | A 25-54                   
|                                            |  |                   |  | KCOR(AM) |  | Contemporary            |  | A 18-49                   

7

---

|   |  |                               |  | KBBT(FM)    |  | Rhythmic (English)     |  | A 18-34
|-- |  | ----------------------------- |  | ----------- |  | ---------------------- |  | -------
|   |  |                               |  | KCOR(FM)    |  | Contemporary           |  | A 18-49
|   |  |                               |  | KVCQ(FM)(c) |  | N/A                    |  | N/A    
|   |  |                               |  | KBAE(FM)(c) |  | Oldies                 |  | A 25-54
|9  |  | McAllen/Brownsville/Harlingen |  | KGBT(FM)    |  | Regional Mexican       |  | A 25-54
|   |  |                               |  | KBTQ(FM)    |  | Rhythmic (English)     |  | A 18-34
|   |  |                               |  | KGBT(AM)    |  | News/Talk              |  | A 25-54
|10 |  | Phoenix                       |  | KHOT(FM)    |  | Regional Mexican       |  | A 25-54
|   |  |                               |  | KHOV(FM)    |  | Regional Mexican       |  | A 25-54
|   |  |                               |  | KOMR(FM)    |  | Contemporary           |  | A 18-34
|   |  |                               |  | KMRR(FM)    |  | Contemporary           |  | A 18-34
|   |  |                               |  | KKMR(FM)    |  | Contemporary           |  | A 18-49
|11 |  | San Diego                     |  | KLQV(FM)    |  | Contemporary           |  | A 25-54
|   |  |                               |  | KLNV(FM)    |  | Regional Mexican       |  | A 18-49
|13 |  | El Paso                       |  | KBNA(FM)    |  | Contemporary           |  | A 25-54
|   |  |                               |  | KBNA(AM)    |  | Contemporary           |  | A 25-54
|   |  |                               |  | KAMA(AM)    |  | Spanish Oldies         |  | A 35+  
|16 |  | Fresno                        |  | KZOL(FM)    |  | Regional Mexican       |  | A 18-49
|17 |  | Las Vegas                     |  | KISF(FM)    |  | Regional Mexican       |  | A 18-49
|   |  |                               |  | KLSQ(AM)    |  | Spanish Oldies         |  | A 35+  
|   |  |                               |  | KQMR(FM)    |  | Contemporary           |  | F 25-54
|20 |  | Albuquerque                   |  | KJFA(FM)    |  | Regional Mexican       |  | A 18-49
|   |  |                               |  | KIOT(FM)    |  | Classic Rock (English) |  | A 25-64
|   |  |                               |  | KVVF(FM)    |  | Contemporary           |  | A 18-49
|   |  |                               |  | KKSS(FM)    |  | Rhythmic (English)     |  | A 18-34
|   |  |                               |  | KAJZ(FM)    |  | Smooth Jazz (English)  |  | A 25-54

---

The
following table sets forth selected information with regard to Company owned radio station FCC licenses:

|Station/Market            |  | Date
Acquired |  | License
Expiration Date |  | Broadcast
Frequency
|------------------------- |  | ------------- |  | ----------------------- |  | -------------------
|KLVE(FM), Los Angeles, CA |  | 10/85         |  | 12/01/05                |  | 107.5 MHz          
|KSCA(FM), Los Angeles, CA |  | 09/99         |  | 12/01/05                |  | 101.9 MHz          
|KTNQ(AM), Los Angeles, CA |  | 10/85         |  | 12/01/05                |  | 1020 kHz           
|KRCD(FM), Los Angeles, CA |  | 01/00         |  | 12/01/05                |  | 103.9 MHz          
|KRCV(FM), Los Angeles, CA |  | 01/00         |  | 12/10/05                |  | 98.3 MHz           
|WCAA(FM), New York, NY    |  | 05/98         |  | 06/01/06                |  | 105.9 MHz          

8

---

|WADO(AM), New York, NY                      |  | 08/94 |  | 06/01/06 |  | 1280 kHz 
|------------------------------------------- |  | ----- |  | -------- |  | ---------
|WAMR(FM), Miami, FL                         |  | 08/94 |  | 02/01/04 |  | 107.5 MHz
|WRTO(FM), Miami, FL                         |  | 10/89 |  | 02/01/04 |  | 98.3 MHz 
|WAQI(AM), Miami, FL                         |  | 10/89 |  | 02/01/04 |  | 710 kHz  
|WQBA(AM), Miami, FL                         |  | 08/94 |  | 02/01/04 |  | 1140 kHz 
|WOJO(FM), Chicago, IL                       |  | 02/97 |  | 12/01/04 |  | 105.1 MHz
|WIND(AM), Chicago, IL                       |  | 02/97 |  | 12/01/04 |  | 560 kHz  
|WVIV(AM), Chicago, IL                       |  | 07/95 |  | 12/01/04 |  | 1200 kHz 
|KLTN(FM), Houston, TX                       |  | 05/98 |  | 08/01/05 |  | 102.9 MHz
|KOVE(FM), Houston, TX                       |  | 07/01 |  | 08/01/05 |  | 106.5 MHz
|KPTY(FM), Houston, TX                       |  | 02/97 |  | 08/01/05 |  | 104.9 MHz
|KLTO(FM), Houston, TX                       |  | 02/97 |  | 08/01/05 |  | 105.3 MHz
|KOBT(FM), Houston, TX                       |  | 02/97 |  | 08/01/05 |  | 100.7 MHz
|KLAT(AM), Houston, TX                       |  | 02/97 |  | 08/01/05 |  | 1010 kHz 
|KRTX(AM), Houston, TX                       |  | 02/97 |  | 08/01/05 |  | 980 kHz  
|KQBU(FM), Houston, TX                       |  | 02/97 |  | 08/01/05 |  | 93.3 MHz 
|KSOL(FM), San Francisco/San Jose, CA        |  | 02/97 |  | 12/01/05 |  | 98.9 MHz 
|KSQL(FM), San Francisco/San Jose, CA        |  | 02/97 |  | 12/01/05 |  | 99.1 MHz 
|KEMR(FM), San Francisco/San Jose, CA        |  | 04/02 |  | 12/01/05 |  | 105.7 MHz
|KLNO(FM), Dallas/Ft. Worth, TX              |  | 09/99 |  | 08/01/05 |  | 94.1 MHz 
|KHCK(FM), Dallas/Ft. Worth, TX              |  | 07/95 |  | 08/01/05 |  | 99.1 MHz 
|KDXX(FM), Dallas/Ft. Worth, TX              |  | 06/95 |  | 08/01/05 |  | 107.1 MHz
|KDOS(FM), Dallas/Ft. Worth, TX              |  | 04/95 |  | 08/01/05 |  | 107.9 MHz
|KESS (FM), Dallas/Ft. Worth, TX             |  | 08/94 |  | 08/01/05 |  | 107.9 MHz
|KESS(AM), Dallas/Ft. Worth, TX              |  | 08/94 |  | 08/01/05 |  | 1270 kHz 
|KHCK(AM), Dallas/Ft. Worth, TX              |  | 12/94 |  | 08/01/05 |  | 1480 kHz 
|KXTN(FM), San Antonio, TX                   |  | 02/97 |  | 08/01/05 |  | 107.5 MHz
|KROM(FM), San Antonio, TX                   |  | 02/97 |  | 08/01/05 |  | 92.9 MHz 
|KXTN(AM), San Antonio, TX                   |  | 02/97 |  | 08/01/05 |  | 1310 kHz 
|KCOR(AM), San Antonio, TX                   |  | 02/97 |  | 08/01/05 |  | 1350 kHz 
|KBBT(FM), San Antonio, TX                   |  | 09/00 |  | 08/01/05 |  | 98.5 MHz 
|KCOR(FM), San Antonio, TX                   |  | 09/00 |  | 08/01/05 |  | 95.1 MHz 
|KVCQ(FM), San Antonio, TX                   |  | 12/02 |  | 08/01/05 |  | 97.7 MHz 
|KBAE(FM), San Antonio, TX                   |  | 12/02 |  | 08/01/05 |  | 96.3 MHz 
|KGBT(FM), McAllen/Brownsville/Harlingen, TX |  | 02/97 |  | 08/01/05 |  | 98.5 MHz 
|KBTQ(FM), McAllen/Brownsville/Harlingen, TX |  | 02/97 |  | 08/01/05 |  | 96.1 MHz 
|KGBT(AM), McAllen/Brownsville/Harlingen, TX |  | 02/97 |  | 08/01/05 |  | 1530 kHz 
|KHOT(FM), Phoenix, AZ                       |  | 04/99 |  | 10/01/05 |  | 105.9 MHz
|KHOV(FM), Phoenix, AZ                       |  | 10/01 |  | 10/01/05 |  | 105.3 MHz
|KOMR(FM), Phoenix, AZ                       |  | 10/01 |  | 10/01/05 |  | 106.3 MHz
|KMRR(FM), Phoenix, AZ                       |  | 10/01 |  | 10/01/05 |  | 100.3 MHz
|KKMR(FM), Phoenix, AZ                       |  | 10/01 |  | 10/01/05 |  | 106.5 MHz
|KLQV(FM), San Diego, CA                     |  | 08/98 |  | 12/01/05 |  | 102.9 MHz
|KLNV(FM), San Diego, CA                     |  | 08/98 |  | 12/01/05 |  | 106.5 MHz
|KBNA(FM), El Paso, TX                       |  | 02/97 |  | 08/01/05 |  | 97.5 MHz 
|KBNA(AM), El Paso, TX                       |  | 02/97 |  | 08/01/05 |  | 920 kHz  
|KAMA(AM), El Paso, TX                       |  | 02/97 |  | 08/01/05 |  | 750 kHz  
|KZOL(FM), Fresno, CA                        |  | 03/02 |  | 12/01/05 |  | 107.9 MHz
|KISF(FM), Las Vegas, NV                     |  | 04/99 |  | 10/01/05 |  | 103.5 MHz

9

---

|KLSQ(AM), Las Vegas, NV   |  | 08/95 |  | 10/01/05 |  | 870 kHz  
|------------------------- |  | ----- |  | -------- |  | ---------
|KQMR(FM), Las Vegas, NV   |  | 03/02 |  | 10/01/05 |  | 99.3 MHz 
|KJFA(FM), Albuquerque, NM |  | 08/02 |  | 10/01/05 |  | 101.3 MHz
|KIOT(FM), Albuquerque, NM |  | 08/02 |  | 10/01/05 |  | 102.5 MHz
|KVVF(FM), Albuquerque, NM |  | 08/02 |  | 10/01/05 |  | 101.7 MHz
|KKSS(FM), Albuquerque, NM |  | 08/02 |  | 10/01/05 |  | 105.1 MHz
|KAJZ(FM), Albuquerque, NM |  | 08/02 |  | 10/01/05 |  | 105.1 MHz

Competition

Radio broadcasting is a highly competitive business. The Company's radio stations compete for audiences and advertising revenues with other radio stations of all
formats, as well as with other media, such as newspapers, magazines, television, cable television, outdoor advertising, online, and direct mail, within their respective markets. In addition, the radio
broadcasting industry is subject to competition from new media technologies that are being developed or introduced such as (1) satellite-delivered digital audio radio service, which has
resulted and is expected to result in the introduction of new subscriber based satellite radio services with numerous niche formats; and (2) audio programming by cable systems, direct broadcast
satellite systems, Internet content providers, personal communications services and other digital audio broadcast formats.

The
FCC adopted a plan in 1999 for the establishment of non-commercial "microbroadcasting" stations, low-powered FM stations that will be designed to serve small
localized areas and that in some localized areas may cause interference with regular broadcast by existing radio stations. Satellite delivered audio provides a medium for the delivery by satellite or
supplemental terrestrial means of multiple new audio programming formats to local and/or national audiences. XM Satellite Radio launched its commercial service on September 25, 2001 and Sirius
Satellite Radio launched service on February 14, 2002. The Company entered into a Programming Partner Agreement with XM Satellite Radio in 1998, in which the Company agreed to develop, produce
and supply to XM Satellite Radio certain Spanish-language
programming to be distributed over one or more audio channels of the digital audio radio service implemented by XM Satellite Radio in the continental United States.

Audience
ratings and market shares are subject to change and any adverse change in the Company's ratings in a particular market could have a material adverse effect on the revenues of
stations located in that market. Future operations are further subject to many variables which could have an adverse effect upon the Company's financial performance. These variables include economic
conditions, both general and relative to the broadcasting industry; shifts in population and other demographics; the level of competition for advertising dollars with other radio stations and other
entertainment and communications media; fluctuations in operating costs; technological changes and innovations; changes in labor conditions; and changes in governmental regulations and policies and
actions of federal regulatory bodies, including the FCC, the Federal Trade Commission ("FTC"), and the DOJ. Although the Company believes that each of its stations does or will be able to compete
effectively in its respective market, there can be no assurance that any such station will be able to maintain or increase its current audience ratings and advertising revenues. Radio stations can
quickly change formats. Any radio station could shift its format to duplicate the format of any of the Company's stations. If a station converted its programming to a format similar to that of a
station owned by the Company, the ratings and operating income of the Company's station could be adversely affected.

10

---

Regulation of the Company's Business

Existing Regulation and Legislation.

Radio broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the "Communications Act"). The Communications Act
prohibits the operation of a radio broadcast station except under a license issued by the FCC and empowers the FCC, among other things, to issue, renew, revoke and modify broadcast licenses; assign
frequency bands; determine stations' frequencies, locations and power; regulate the equipment used by stations; adopt other regulations to carry out the provisions of the Communications Act; impose
penalties for violation of such regulations; and impose fees for processing applications and other administrative functions. The Communications Act prohibits the assignment of a license or the
transfer of control of a licensee without prior approval of the FCC.

The
Telecommunications Act of 1996 (the "1996 Act") significantly changed both the broadcast ownership rules and the process for renewal of broadcast station licenses. The 1996 Act
relaxed local radio ownership restrictions. The 1996 Act also established a "two-step" renewal process that limits the FCC's discretion to consider applications filed in competition with
an incumbent's renewal application.
This new regulatory flexibility has engendered aggressive local, regional, and national acquisition campaigns. Relaxation of previous station ownership limitations on leading incumbents (i.e.,
existing networks and major station groups) has increased sharply the competition for radio station acquisitions, and the prices of attractive stations.

Multiple Ownership Restrictions.

The FCC has promulgated rules that, among other things, limit the ability of individuals and entities to own or have an official position or ownership interest
above a certain level (an "attributable" interest, as defined more fully below) in broadcast stations, as well as other specified mass media entities.

The
1996 Act and the FCC's subsequently issued rule changes eliminated the national ownership restriction, allowing a single entity to own nationally any number of AM or FM broadcast
stations. The 1996 Act and the FCC's rules also greatly eased local radio multiple ownership restrictions. The maximum number of radio stations in which a person or entity is allowed to hold an
"attributable interest" depends on the number of radio stations within the defined market. In markets with more than 45 commercial radio stations, an entity may own, operate or control a maximum of
eight stations, with no more than five in either service (AM or FM). In markets of 30-44 stations, an entity may own as many as seven stations, with no more than four in either service; in
markets with 15-29 stations, an entity may own as many as six stations, with no more than four in either service. In markets with 14 stations or less, an entity may own as many as five
stations or 50% of all of the stations, whichever is less, with no more than three stations in either service. It should be noted, however, that the DOJ has precluded certain entities from acquiring
the maximum number of radio stations allowed in a market under the 1996 Act because of anti-trust concerns. Thus, it is possible that the Company would, in certain instances, be unable to
acquire the maximum number of stations allowed in a market under the 1996 Act. The FCC has placed limitations on time brokerage (local marketing) agreements ("LMA") through which the licensee of one
radio station provides the programming for another licensee's station in the same market. In LMA situations, stations operating in the same service (e.g., both stations are AM) with substantial
contour overlap are prohibited from duplicating more than 25% of their programming. Moreover, in determining the number of stations that a single entity may control, an entity programming a station
pursuant to an LMA is required, under certain circumstances, to count that station toward its numerical maximum even though it does not own the station.

The
FCC's regulations limit the number of radio stations an entity may own or control in markets where the entity also owns or controls one or more television stations. The FCC currently
permits an

11

---

entity to own or control more than one radio station in a market in which the entity also owns or controls one or more television stations, depending on the number of independent voices existing in
the market. The FCC's regulations also prohibit an entity from owning both a radio station and a daily newspaper of general circulation in the same market, but the FCC has initiated a proceeding and
sought public comment on whether it should relax or eliminate its radio/newspaper cross-ownership restriction.

Expansion
of the Company's broadcast operations in particular areas and nationwide will continue to be subject to the FCC's ownership rules and any further changes the FCC or Congress
may adopt. Significantly, the 1996 Act requires the FCC to review its remaining ownership rules bienniallyas part of its regulatory reform obligationsto determine whether its
various rules are still necessary. In November 2001, the FCC issued a Notice of Proposed Rule Making which solicits public comment on the current local radio multiple ownership rules; the
interim processing guidelines announced by the FCC in the November 2002 Notice remain in effect. Also, in September 2002, the FCC issued another Notice of Proposed Rule Making into which
it merged the November 2001 Notice and the comments which had been filed into a more comprehensive proceeding to address many other broadcast and other media matters affecting radio, TV,
newspapers, etc.; the latter proceeding remains pending at the FCC at this time. The Company cannot predict the impact of future announcements in the biennial review process or any other agency or
legislative initiatives upon the FCC's broadcast rules.

Under
the FCC's ownership rules, a direct or indirect purchaser of certain types of securities of the Company could violate FCC regulations if that purchaser owned or acquired an
"attributable" interest in other media properties in the same areas as stations owned by the Company or in a manner otherwise prohibited by the FCC. All officers and directors of a licensee, as well
as general partners, limited partners who are not properly "insulated" from management activities, and stockholders who own five percent or more of the outstanding voting stock of a licensee (either
directly or indirectly), are generally deemed to have an "attributable interest" in the licensee. Certain institutional investors who exert no control or influence over a licensee may own up to twenty
percent of such outstanding voting stock without the interest being considered "attributable". In addition to the foregoing limitations, under the FCC's "equity/debt plus" standard, if an investor's
interest in a licensee corporation exceeds thirty-three percent of the aggregated debt and equity of the company (i.e., the "total asset value" of the company), the investor's interest is considered
attributable if the investor is also either a major program supplier to the licensee or a same-market media entity. Insulated limited partnership interests (as to which the licensee
certifies that the limited partners are not "materially involved" in the management and operation of the subject media property), and voting stock held by minority stockholders where there is a single
majority stockholder, are generally not considered attributable interests.

License Grant and Renewal.

Under the 1996 Act, the FCC has implemented an eight year license term provision for radio stations. The 1996 Act also requires renewal of a broadcast license if
the FCC finds that (1) the station has served the public interest, convenience, and necessity; (2) there have been no serious violations of either the Communications Act or the FCC's
rules and regulations by the licensee; and (3) there have been no other serious violations which, taken together, constitute a pattern of abuse. In making its determination, the FCC may still
consider petitions to deny a renewal application but cannot consider whether the public interest would be better served by a person/entity other than the renewal applicant. Instead, competing
applications for the same frequency may be accepted only after the FCC has denied an incumbent's application for renewal of license.

Although
in the vast majority of cases the FCC grants broadcast license renewal applications when petitions to deny are filed against them, there can be no assurance that any of the
Company's stations' licenses will be renewed.

12

---

Alien Ownership Restrictions.

The Communications Act restricts the ability of foreign entities or individuals to own or hold certain interests in broadcast licenses. Foreign governments,
representatives of foreign governments, non-U.S. citizens, representatives of non-U.S. citizens, and corporations or partnerships organized under the laws of a foreign nation
are barred from holding broadcast licenses. Non-U.S. citizens, collectively, may directly or indirectly own or vote up to twenty percent of the capital stock of a licensee. In addition, a
broadcast license may not be granted to or held by any corporation that is controlled, directly or indirectly, by any other corporation more than one-fourth of whose capital stock is owned
or voted by non-U.S. citizens or their representatives, by foreign governments or their representatives, or by non-U.S. corporations, if the FCC finds that the public interest
will be served by the refusal to grant or revocation of such license. The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before a
broadcast license may be granted to or held by any such corporation, and the FCC has made such an affirmative finding only in limited circumstances. The Company, which serves as a holding company for
subsidiaries that serve as licensees for the stations, therefore may be restricted from having more than one-fourth of its stock owned or voted directly or indirectly by
non-U.S. citizens, foreign governments, representatives of non-U.S. citizens or foreign governments, or foreign corporations. Our certificate of incorporation prohibits the
ownership, voting and transfer of our capital stock in violation of the FCC restrictions, and prohibits the issuance of capital stock or the voting rights such capital stock represents to or for the
account of aliens or corporations otherwise subject to domination or control by aliens in excess of the FCC limits. The certificate of incorporation authorizes our board of directors to enforce these
prohibitions.

Other Regulations Affecting Radio Broadcasting Stations.

Although the FCC has significantly reduced its regulation of radio broadcast stations, the FCC rules and policies, and rules and policies of other federal
agencies, currently regulate matters such as political advertising practices, equal employment opportunities, application procedures and other areas affecting the business and operations of radio
broadcast stations.

Antitrust Matters.

An important element of the Company's growth strategy involves the acquisition of additional radio stations, many of which are likely to require preacquisition
antitrust review by the FTC or the DOJ.
Following passage of the 1996 Act, the DOJ has become more aggressive in reviewing proposed acquisitions of radio stations and radio station networks, particularly in instances where the proposed
acquirer seeks to acquire another radio station in a market in which it already owns stations. The DOJ has, in some cases, obtained consent decrees requiring radio station divestitures in specific
markets based on allegations that proposed acquisitions would lead to unacceptable concentration levels. There can be no assurance that the DOJ or the FTC will not seek to bar the Company from
acquiring additional radio stations in a market where the Company already owns stations.

The
FCC has been increasingly aggressive in independently examining issues of market concentration when considering radio station acquisitions. The FCC has delayed its approval of
several radio station purchases by various parties because of market concentration concerns. Moreover, the FCC has followed an informal policy of giving specific public notice of its intention to
conduct additional ownership concentration analysis and soliciting public comment on the issue of concentration and its effect on competition and diversity with respect to certain applications for
consent to radio station acquisitions.

13

---

Environmental Matters.

As the owner, lessee or operator of various real properties and facilities, the Company is subject to various federal, state and local environmental laws and
regulations. Historically, compliance with such laws and regulations has not had a material adverse effect on the Company's business. There can be no assurance, however, that compliance with existing
or new environmental laws or regulations will not require the Company to make significant expenditures in the future.

Recent Developments, Proposed Legislation and Regulation.

The FCC has approved the introduction of new technologies to the radio broadcasting industry, including terrestrial delivery of digital audio broadcasting on both
the AM and FM bands. In 1997, the FCC granted two licenses for national, satellite-delivered digital audio broadcasting services. These services are capable of delivering multiple,
high-quality audio channels. The Company is unable to predict the effect such new technology will have on the Company's financial condition or results of operations. In addition, cable
television operators and direct satellite broadcast television companies market service commonly referred to as "cable radio" which provides subscribers with several high-quality channels
of music, news and other information. Technical considerations currently limit this technology to fixed locations.

Congress
and the FCC currently have under consideration, and 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. For example, the FCC has adopted rules which, with limited exceptions, require the holder of an FCC construction permit to complete
construction of new or modified facilities within three (3) years of grant. In November 2002, the FCC adopted new broadcast equal employment opportunity rules which became effective on
March 10, 2003. In addition to the changes and proposed changes noted above, such matters include, for example, the license renewal process, spectrum use fees, political advertising rates, and
potential restrictions on the advertising of certain products (liquor, beer and wine, for example). Other matters that could affect the Company's broadcast properties include technological innovations
and developments generally affecting competition in the mass communications industry. The foregoing does not purport to be a complete summary of all the provisions of the Communications Act, or the
1996 Act, nor of the regulations and policies of the FCC thereunder. Proposals for revised regulations and requirements are currently pending before Congress and federal regulatory agencies, and
additional regulations will undoubtedly be considered in the future from time to time. Also, various of the foregoing matters are now, or may become, the subject of court litigation, and the Company
cannot predict the outcome of any such litigation or the impact on its broadcast business.

Risk Factors

Decreases in Operating Income from Our Los Angeles Stations Could Significantly Reduce Our Overall Results of Operations.

The portion of our overall net revenue attributable to the Los Angeles market was 23.9% for the year ended December 31, 2002. In addition, the portion of
our overall operating income attributable to the Los Angeles market was 41.7% for the year ended December 31, 2002. Increased competition for advertising dollars with other radio stations and
communications media in the Los Angeles metropolitan area, both from other radio stations and from other advertising media such as television and newspapers, and other competitive and economic factors
have and may continue to cause a decline in revenue generated by our Los Angeles stations. A significant decline in the revenue of the Los Angeles stations could significantly reduce our overall
results of operations.

14

---

Significant Control by the Tichenor Family May Impact or Constrain Our Future Actions.

As of March 15, 2003, McHenry T. Tichenor, Jr., our Chairman, President and Chief Executive Officer, and his family held voting control over approximately
16.2% of the shares of our Class A Common Stock. Since these shares are subject to a voting agreement, the Tichenor family can exert significant influence over the election of our board of
directors and other management decisions.

Clear Channel's Ownership of All Our Class B Common Stock Means that Clear Channel May Have a Class Vote on Mergers, Consolidations, and Sales of Substantially All Our
Assets.

As of March 15, 2003, Clear Channel Communications, Inc. ("Clear Channel") owned no shares of our Class A Common Stock and thus was not
entitled to vote in the election of our directors. However, Clear Channel does own all the outstanding shares of our Class B Common Stock, par value $.001 per share, which accounts for
approximately 26.0% of our common stock. As long as Clear Channel owns at least 20.0% of our common stock, Clear Channel will have a class vote regarding, and could potentially veto, the following:



Shares
of our Class B Common Stock are generally convertible into shares of our Class A Common Stock, at the holder's option, subject to any necessary governmental
consents, including the consent of the FCC. Because of the FCC's multiple ownership rules, which limit the number of radio stations that a company may own or have an attributable interest in, in any
single market, Clear Channel may not presently convert its shares of our Class B Common Stock into shares of our Class A Common Stock if such conversion would create an attributable
interest, without first obtaining the consent of the FCC.

In
addition, Clear Channel owns a significant percentage of our common stock. Consequently, significant direct or indirect sales of our common stock by Clear Channel could significantly
reduce our stock price and could impair our ability to raise money.

Hispanic Broadcasting and Clear Channel are Each Engaged in the Radio Broadcasting Business and Compete with Each Other for Advertising Revenues, Which May Give Rise to Actual
or Potential Conflicts of Interest Between the Two Companies.

The similarity of the respective businesses of the Company and Clear Channel gives rise to potential conflicts of interest between the two companies. The Company
and Clear Channel are each engaged in the radio broadcasting business in certain markets, and as a result, are competing with each other for advertising revenues. As of December 31, 2002, Clear
Channel owned, programmed, or sold airtime for 1,184 radio stations in the United States, as well as radio stations in a number of foreign countries. Clear Channel also owned or programmed 34
television stations and was one of the world's largest outdoor advertising companies based on its total inventory of advertising display faces. Clear Channel's television and outdoor advertising
operations may also be deemed to compete with our

15

---

business. In addition, conflicts could arise with respect to transactions involving the purchase or sale of radio broadcasting companies, particularly Spanish-language radio broadcasting companies,
the issuance of additional equity securities, or the payment of dividends by the Company. For instance, Clear Channel currently owns a 40% equity interest in Grupo ACIR Comunicaciones, one of the
largest radio broadcasters in Mexico.

We May Compete Directly or Indirectly With Clear Channel in the Future With Respect to Acquisitions and Investment Opportunities in New Lines of Business and New Markets, but
We May Lack the Financial Resources Necessary to Compete with Clear Channel in these New Lines and Markets.

Clear Channel is engaged in the Spanish-language radio broadcasting business in the United States, other than through its ownership of shares in the Company.
Clear Channel may from time to time acquire domestic Spanish-language radio broadcasting companies or an interest in such companies, individually or as part of a larger group. Furthermore, Clear
Channel may from time to time seek to make international acquisitions of, or investments in, companies engaged in the Spanish-language radio broadcasting business outside the United States, and we may
compete with Clear Channel for such acquisition or investment opportunities. To the extent we enter into new lines of business, we may compete directly or indirectly with Clear Channel, and we may
compete with Clear Channel in the future with respect to acquisitions and investment opportunities in these areas.

Because
we are significantly smaller than Clear Channel, we may lack the financial resources necessary to compete with Clear Channel in these new lines of business and new markets.
Similarly, while Clear Channel could pursue very large business expansions, acquisition opportunities could arise which require greater financial resources than those available to us.

Cancellations or Reductions of Advertising Could Adversely Affect Our Results of Operation

In the competitive radio broadcasting industry, the success of each of our radio stations is primarily dependent upon its share of the overall advertising revenue
within its market. Although we believe that each of our stations can compete effectively in its broadcast area, we cannot be sure that any of our stations can maintain or increase its current audience
ratings or market share, or that advertisers will not decrease the amount they spend on advertising. Shifts in population, demographics, audience tastes and other factors beyond our control could
cause us to lose market share. Our stations also compete for audiences and advertising revenue directly with other radio and television stations. If a competing station converts to a format similar to
that of one of our stations, or if one of our competitors strengthens its operations, our stations could suffer a reduction in ratings and advertising revenue.

We
believe that adverting is a discretionary business expense, meaning that spending on advertising may decline during an economic recession or downturn. Consequently, a recession or
downturn in the U.S. economy or the economy of an individual geographic market in which we operate stations could reduce our advertising revenue and, therefore, results of operations. We do not obtain
long-term commitments from our advertisers, and advertisers may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases of advertising could
reduce our revenue, especially if we are unable to replace such purchases. Our expense levels are based, in part, on expected future revenue and are relatively fixed once set. Therefore, unforeseen
fluctuations in adverting sales could reduce our operating results.

16

---

Our Acquisition Strategy Could Pose Risks.

We intend to grow through the acquisition of radio stations and other assets we believe will complement our existing portfolio. Our acquisition strategy involves
numerous risks, including:



Part
of our strategy is to acquire radio stations and convert them to a Spanish-language or other Hispanic-targeted format. This conversion strategy requires a heavy initial investment
of both financial and management resources. Start-up stations typically incur losses for a period approximately 12 to 18 months from the date of launch of a station's format because of the
time required to build up ratings and station loyalty. We cannot guarantee that this strategy will be successful in any given market, even though we may incur substantial costs and losses in
implementing this part of our strategy.

International Acquisition Opportunities Pose Risks to Which We are Not Accustomed, Such as Risks of Foreign Currency Fluctuations, Foreign Taxation, and Additional or Novel
Legal Restrictions.

We continue to explore international opportunities. If we make one or more international acquisitions, we will face new risks that we do not face in the United
States, such as foreign currency risks, foreign ownership restrictions, foreign taxation, restrictions on withdrawal of foreign investments and earnings, possible expropriation and other risks.

We May Not be Able to Secure Financing Necessary for Acquisition Opportunities, or We May have to Secure Financing on Unfavorable Terms.

We face stiff competition from other companies for acquisition opportunities. If the prices sought by sellers of existing radio stations continue to rise, we may
find fewer acceptable acquisition opportunities. In addition, the purchase price of possible acquisitions could require additional debt or equity financing. We can give no assurance that either we
will obtain the needed financing or that we will obtain such financing on attractive terms. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and
may limit our ability to withstand competitive pressures. Additional equity financing or the issuance of our shares in connection with an acquisition would dilute the ownership interest of our
stockholders. We may not have sufficient capital resources to complete acquisitions.

Caution Concerning Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 21E of the Exchange Act. Forward-looking statements are not statements of
historical facts, but rather reflect our current
expectations concerning future results and events. You can identify these forward-looking statements by our use of works such as "anticipates," "believes," "continues," "expects," "intends," "likely,"
"may," "opportunity," "plans," "potential," "project," "will," and similar expressions to indicate forward-looking statements, whether in the negative or the affirmative. We cannot guarantee that we
actually will achieve these plans, intentions or expectations. These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond our control, which could

17

---

cause actual results to differ materially from those forecast or anticipated in such forward-looking statements. These risks, uncertainties and factors include, but are not limited to:



You
should not place undue reliance on these forward-looking statements, which reflect our view only as of the date of this report. We undertake no obligation to update these statements
or publicly release the result of any revisions to these statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Signal Improvements

From time to time, the Company has sought to improve the signal coverage of selected stations it owns. In addition, the Company has and will in the future seek to
acquire and/or to participate in proceedings at the FCC that would allow the radio signals of the Company's existing radio stations or stations it might acquire in the future to be upgraded or
improved. A proceeding to change the signal coverage of one of our radio stations can take years to complete. As a result, the Company may have to invest or spend money during the upgrade process
without knowing if the process will ultimately be successful. The upgrade process is typically subjected to one or more objections and/or counterproposals by other station owners. These objections
require time to resolve and might result in additional, unforeseen payments or costs in order to complete the upgrade. At December 31, 2002, the Company had invested approximately
$4.6 million in various upgrade proceedings or efforts with respect to its stations and is obligated to pay in the future approximately $0.8 million associated with one upgrade project.
The Company is also working a variety of upgrade moves that, if successful, could obligate the Company to pay additional amounts to complete the upgrades. There can be no assurances that any pending
or future upgrades will be successfully concluded. Any investment the Company makes, is obligated to make, or has made in upgrade attempts that prove to be unsuccessful would likely require
write-downs or write-offs. The Company's current exposure associated with various uncompleted upgrade projects, if partially or totally written off as a result of unsuccessful outcomes of
these projects, would not be material to the overall financial position of the Company.

18

---

Industry Segments

The Company considers radio broadcasting to be its only operating segment.

Employees

As of January 25, 2003, the Company employed 1,051 persons on a full-time basis, including corporate employees and 90 employees (at WCAA(FM)
and WADO(AM) in New York City) who are subject to two collective bargaining agreements. The Company considers its employee relations to be good.

Seasonality

Our Company's performance and that of the radio industry as a whole is affected by seasonal revenue fluctuations and variation in demand between local and
national advertisers. The Company's revenues vary throughout the year. As is typical in the radio broadcasting industry, the first calendar quarter generally produces the lowest revenues. The second
and third quarters generally produce the highest revenues. Revenues are also affected by audience share performance of each of the Company's radio stations as reported by The Arbitron Company. Revenue
performance of a radio station tends to lag behind the audience share ratings

ITEM 2.PROPERTIES

The Company's corporate headquarters is in Dallas, Texas. The Company has leased approximately 11,000 square feet at 3102 Oak Lawn Avenue in Dallas, Texas. The
initial term of this lease expires in 2013, and the Company has one option to extend the lease for one additional five-year term.

The
types of properties required to support each of the Company's radio stations listed in Item 1 above include office and transmitter sites. A radio station's studios are generally
housed with its offices in downtown or business districts. A radio station's transmitter sites generally are located in a manner that provides maximum market coverage subject to the station's FCC
license and FCC rules and regulations.

The
offices and studios of the Company's radio stations are located in leased or owned facilities. These leases generally have expiration dates that range from three to fifteen years.
The Company either owns or leases its transmitter and antenna sites. These leases generally have expiration dates that range from one to seventeen years. The Company does not anticipate any
difficulties in renewing those leases that expire within the next several years or in leasing other space, if required.

A
substantial amount of the Company's operating income was generated by the Company's Los Angeles stations during 2002. Accordingly, the offices, studios, transmitter sites and antenna
sites used in the operation of the Company's Los Angeles stations may be material to the Company's overall operations.

As
noted in Item 1 above, as of December 31, 2002, the Company owned and operated 62 radio stations in 15 markets throughout the United States. Therefore, except as set forth
above, no one property is material to the Company's overall operations. The Company believes that its properties are in good condition and suitable for its operations. The Company owns substantially
all of the equipment used in its radio broadcasting business.

ITEM 3.LEGAL PROCEEDINGS

The Company is subject to legal proceedings and other claims which have arisen in the ordinary course of business and as described below and have not been fully
adjudicated. These actions, when

19

---

ultimately concluded, will not, in the opinion of management, have a material adverse effect upon the financial position or results of operation of the Company.

On
June 12, 2002, Spanish Broadcasting System, Inc. ("SBS") filed Spanish Broadcasting System, Inc. v. Clear Channel Communications, Inc. and Hispanic
Broadcasting Corporation in the United States District Court for the Southern District of Florida. SBS alleged a variety of claims against the defendants including claims for federal and state
antitrust violations under the Sherman Act, the Florida Antitrust Act, and California's Cartwright Act. Plaintiff's complaint also included numerous other state law causes of action including, among
others, tortuous interference, defamation, and violation of the California Unfair Competition Act. The plaintiff, and both defendants, own and operate radio stations throughout the United States, and
plaintiff's claims arose out of steps the defendants allegedly took to undermine plaintiff's radio station business. On July 31, 2002, plaintiff amended its complaint. The amended complaint
sought actual damages in excess of $500 million before any trebling under federal or state statute along with attorney fees and other unspecified damages. On January 31, 2003, the United
States District Court entered a final order dismissing the case with prejudice. On February 14, 2003, SBS filed a motion for reconsideration of the order which dismissed the case. SBS has
announced that, if its motion for reconsideration is not granted, then it will appeal the dismissal order. The Company is vigorously contesting this matter.

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

None.

20

---



PART II.

ITEM 5.MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Price Range of Class A Common Stock

The Class A Common Stock is traded on the New York Stock Exchange under the symbol "HSP." The following table sets forth for each of the periods presented
below, the high and low closing sale prices per share:

High

LowYear Ended December 31, 2001First Quarter

$
37.44

$
17.90Second Quarter


28.69


15.69Third Quarter


27.74


14.11Fourth Quarter


26.00


15.90Year Ended December 31, 2002First Quarter

$
31.65

$
22.67Second Quarter


29.94


23.75Third Quarter


25.97


16.40Fourth Quarter


27.22


16.70


As
of December 31, 2002, there were approximately 109 and 1 record holders of the Class A and Class B Common Stock, respectively. This figure does not include an
estimate of the indeterminate number of beneficial holders whose shares of Class A Common Stock may be held of record by brokerage firms and clearing agencies.

Dividend Policy

The Company has never paid a cash dividend on its common stock and does not anticipate paying cash dividends in the foreseeable future. The Company intends to
retain any earnings for use in the growth of its business. The Company currently is restricted from paying any cash dividends on its capital stock under its credit agreement.

Stock Options

In May 1997, the stockholders of the Company approved a stock incentive plan ("Long-Term Incentive Plan"). Securities authorized for issuance
under equity compensation plans as of December 31, 2002 are as follows:

|Plan category                                              |       | Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a) |           | Weighted-average
exercise price of
outstanding options
warrants and rights
(b) |       | Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a)
(c)
|---------------------------------------------------------- | ----- | ----------------------------------------------------------------------------------------------- | --------- | ------------------------------------------------------------------------------ | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plans approved by security holders     |       | 5,635,306                                                                                       |           | $                                                                              | 22.47 |                                                                                                                                               
|Equity compensation plans not approved by security holders |       |                                                                                                |           |                                                                                |      |                                                                                                                                               
|                                                           |       |                                                                                                 |           |                                                                                |       |                                                                                                                                               
|                                                           | Total |                                                                                                 | 5,635,306 |                                                                                | $     | 22.47                                                                                                                                         
|                                                           |       |                                                                                                 |           |                                                                                |       |                                                                                                                                               

21

---

ITEM 6.SELECTED FINANCIAL DATA

The selected consolidated financial data listed below should be read with Item 7, Management's Discussion and Analysis of Financial Condition and Results of
Operations and with the Company's consolidated financial statements including notes thereto, included elsewhere in this report. The following table presents selected consolidated financial data for
the Company and its subsidiaries for the years ended December 31, 2002, 2001, 2000, 1999 and 1998 (in thousands, except per share data):

|                                                    |                                | Year Ended December 31, |          
|--------------------------------------------------- | ------------------------------ | ----------------------- | ---------
|
|Statement of Operations Data:                       |                                |                         |          
|Net revenues                                        |                                | $                       | 256,545  
|Operating expenses                                  |                                |                         | 78,768   
|Wages, salaries and benefits                        |                                |                         | 85,955   
|Provision for bad debts                             |                                |                         | 2,633    
|Depreciation and amortization                       |                                |                         | 12,267   
|Corporate expenses                                  |                                |                         | 10,992   
|                                                    |                                |                         |          
|Operating income                                    |                                |                         | 65,930   
|                                                    |                                |                         |          
|Other income (expense):                             |                                |                         |          
|                                                    | Interest income (expense), net |                         |          
|                                                    | Other, net                     |                         |          
|                                                    |                                |                         |          
|                                                    |                                |                         | 557      
|                                                    |                                |                         |          
|Income before income tax                            |                                |                         | 66,487   
|Income tax                                          |                                |                         | 26,274   
|                                                    |                                |                         |          
|Net income                                          |                                | $                       | 40,213   
|                                                    |                                |                         |          
|Net income per common share(a):                     |                                |                         |          
|                                                    |                                | Basic                   |          
|                                                    |                                | Diluted                 |          
|Weighted average common shares outstanding(a):      |                                |                         |          
|                                                    | Basic                          |                         |          
|                                                    | Diluted                        |                         |          
|Statement of Cash Flow Data:                        |                                |                         |          
|Net cash provided by operating activities           |                                | $                       | 74,625   
|Net cash used in investing activities               |                                |                         | (113,055 
|Net cash provided by (used in) financing activities |                                |                         | 19,060   
|Other Operating Data(b):                            |                                |                         |          
|EBITDA                                              |                                | $                       | 78,197   
|Balance Sheet Data (at end of period):              |                                |                         |          
|Working capital                                     |                                | $                       | 70,807   
|Net intangible assets                               |                                |                         | 1,166,090
|Total assets                                        |                                |                         | 1,325,788
|Long-term debt, less current portion                |                                |                         | 16,429   
|Stockholders' equity                                |                                |                         | 1,142,219

---

22

---



ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the consolidated results of operations and cash flows of the Company for the years ended December 31, 2002, 2001 and 2000 and
consolidated financial condition as of December 31, 2002 and 2001 should be read in conjunction with the consolidated financial statements of the Company and its subsidiaries and the related
notes included elsewhere in this report.

General

The Company's primary source of revenues is the sale of broadcasting time for advertising. In 2002, we generated approximately 66.4% of our gross revenues from
local advertising, which is sold primarily by each individual local radio station's sales staff, and approximately 26.6% from national spot advertising, which is sold by independent advertising sales
representatives. The balance of our 2002 revenues came from network sales, political sales, miscellaneous revenues such as rental income from tower sites, and from our Internet operation.

Our
most significant operating expenses are sales expenses, programming expenses, and advertising and promotion expenses. Operating expenses are affected in part by the timing of
promotion campaigns to improve audience ratings, the timing of acquisitions, and the financial performance of our new station formats.

The
Company has historically purchased under-performing radio stations with good signal coverage and converted the formats to a variety of Hispanic-targeted formats. As a result, the
historical financial performance of acquired radio stations is not a good indicator of future financial performance. A new start-up radio station typically generates operating losses in
the first 12 to 18 months of operation. The magnitude of operating losses is determined in part by the size of the market served by the radio station, the amount of promotion expense required
to attract an audience to the station, and the size of the acquisition. Thus, the Company's financial results in any given year can be affected by the timing, number, acquisition cost and operating
expenses of its start-up stations in that year.

EBITDA
consists of operating income or loss excluding depreciation and amortization. The Company has included EBITDA data because EBITDA is commonly used as a measure of performance for
broadcast companies and is used to measure a company's ability to service its debt and other obligations. EBITDA is not calculated in accordance with generally accepted accounting principles. This
measure should not be considered in isolation or as a substitute for or as superior to operating income, cash flows from operating activities or any other measure for determining operating performance
or liquidity that is calculated in accordance with generally accepted accounting principles. EBITDA does not take into account the Company's debt service requirements and other commitments and,
accordingly, it is not necessarily indicative of an amount that may be available for dividends,
reinvestment in the Company's business or other discretionary uses. In addition, our definition of EBITDA is not necessarily comparable to similarly titled measures reported by other companies. Below

23

---

is a reconciliation of the Company's operating income to EBITDA for the most recent five years (in thousands):

|                              |  | Year Ended December 31,
|----------------------------- |  | -----------------------
|
|Operating income              |  | $                      
|Depreciation and amortization |  |                        
|                              |  |                        
|EBITDA                        |  | $                      
|                              |  |                        

In 2001 and 2000, the Company funded its acquisitions with available cash. In addition, the Company's financial performance benefited from
interest income generated on the Company's available cash balances. In 2002, the Company used its excess cash to acquire more radio stations and borrowed from its $180.0 million revolving
credit facility (the "Credit Facility"). As a result, interest income and securities gains will decline and interest expense and long-term obligations will increase.

On
June 11, 2002, the Company agreed to merge with Univision. Univision will acquire the Company in an all-stock transaction. In the merger, the stockholders of the
Company will exchange each share of their capital stock in the Company for the right to receive 0.85 share of the Class A common stock of Univision. The boards of directors of both companies
approved the merger, the stockholders of each company voted in favor of the merger on February 28, 2003, and the DOJ, Univision and the Company have reached an agreement regarding the merger.
The merger is subject to approval by the FCC and customary closing conditions. The Company expects that the merger will close in April 2003.

Results of Operations for the year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

The results of operations for the year ended December 31, 2002 are not comparable to the results of operations for the same period in 2001 primarily due to
the programming format change on KQBU(FM) in Houston on August 18, 2001 and the acquisitions of KOVE(FM) in Houston on July 20, 2001, KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM) in Phoenix
on October 31, 2001, KQMR(FM) in Las Vegas on March 22, 2002, KZOL(FM) in Fresno on March 29, 2002, KSOL(FM) in San Jose on April 1, 2002 and KIOT(FM), KVVF(FM), KJFA(FM),
KAJZ(FM) and KKSS(FM) in Albuquerque on November 1, 2002. In addition, in January 2002, the Company launched HBC Sales Integration, Inc. ("HBCSi"). The Company has adopted the
marketing name HBCSi to brand all aspects of its national and network sales efforts, including HBC Radio Network sales, new business development, and, in cooperation with Katz Hispanic Media, national
spot advertising sales.

Net
revenues increased by $15.7 million or 6.5% to $256.5 million for the year ended December 31, 2002 from $240.8 million for the same period in 2001. Net
revenues increased for the year ended December 31, 2002 primarily because of (a) revenues from start-up stations acquired or reformatted in 2001 and 2002, which represent an
increase of $5.6 million, and (b) revenue growth in New York, Miami, San Antonio and San Diego, and on Houston and Dallas stations that were not considered start-ups. The revenue growth
was offset by a revenue decline in Los Angeles and on San Francisco stations that were not considered start-ups, which collectively represent an increase of $9.0 million.

Operating
expenses increased by $3.4 million or 4.5% to $78.8 million for the year ended December 31, 2002 from $75.4 million for the same period in 2001.
Operating expenses increased for the year ended December 31, 2002 because of (a) $4.8 million of expense for start-up stations acquired or reformatted in 2001 or 2002,
and (b) partially offset by $2.1 million decrease in promotions spending for stations in Los Angeles, Miami, Chicago and San Francisco. As a percentage of net revenues,

24

---

operating expenses decreased to 30.7% from 31.3% for the years ended December 31, 2002 and 2001, respectively.

Wages,
salaries and benefits increased by $9.6 million or 12.6% to $86.0 million for the year ended December 31, 2002 from $76.4 million for the same period
in 2001. Wages, salaries and benefits for the year ended December 31, 2002 increased because of (a) start-up stations, which represent an increase of $2.8 million,
(b) expenses related to the launch of HBCSi, which represent an increase of $2.0 million, (c) costs associated with increased ratings in Dallas, which represent an increase of
$1.1 million, (d) group insurance in various markets, which represent an increase of $1.2 million, and (e) costs associated with the corporate office, which represent an
increase of $0.6 million. As a percentage of net revenues, wages, salaries and benefits increased to 33.5% from 31.7% for the years ended December 31, 2002 and 2001, respectively.

The
provision for bad debts decreased $1.7 million or 39.5% to $2.6 million for the year ended December 31, 2002 from $4.3 million for the same period in
2001. The provision for bad debts decreased due to (a) uncollectability of certain notes receivable in 2001, which represented $0.5 million, and (b) decrease in bad debt expense
in 2002 for stations in Los Angeles and Dallas, which represents a decrease of $1.0 million. As a percentage of net revenues, the provision for bad debts decreased to 1.0% from 1.8% for the
years ended December 31, 2002 and 2001, respectively.

Corporate
expenses increased $7.2 million or 194.6% to $10.9 million for the year ended December 31, 2002 from $3.7 million for the same period in 2001.
Included in corporate expenses are merger expenses of $5.1 million for the year ended December 31, 2002, related to the Company's pending merger with Univision and an increase in legal
and professional fees unrelated to the pending merger. As a percentage of net revenues, corporate expenses increased to 4.2% from 1.5% for the years ended December 31, 2002 and 2001,
respectively.

Depreciation
and amortization for the year ended December 31, 2002 decreased 66.2% to $12.3 million, compared to $36.4 million for the same period in 2001. The
decrease is due to the adoption of SFAS No. 142,Goodwill and Other Intangible Assets.SFAS No. 142 requires that goodwill and intangible
assets with indefinite useful lives no longer be amortized.

Interest
income (expense), net decreased to $0.6 million from $3.4 million for the years ended December 31, 2002 and 2001, respectively. The decrease for the year
ended December 31, 2002 compared to the same period in 2001 was due to cash and cash equivalents and interest rates being higher in 2001 than in 2002.

Other,
net decreased to zero from $2.9 million for the year ended December 31, 2002 compared to 2001. The decrease was due to the gain from the sale of marketable equity
securities in 2001 and a final arbitration award received by the Company in 2001.

Federal
and state income taxes are being provided at an effective rate of 39.5% and 39.2% for the years ended December 31, 2002 and 2001, respectively. The increase in the
effective rate is due to merger expenses in 2002 which are not deductible for tax purposes.

For
the year ended December 31, 2002, the Company's net income totaled $40.2 million ($0.37 per common share) compared to $31.0 million ($0.28 per common share) in
the same period in 2001.

Our
business was affected by general economic conditions, which were more favorable in 2002 than last year due to the events of September 11, 2001. The revenue growth of the
Company was impacted by its Los Angeles operations, which experienced a net revenue decline of 5.8% for the year ended December 31, 2002 compared to last year due to increased competition. The
Company's Los Angeles
operations accounted for approximately 23.9% of total consolidated net revenues for the year ended December 31, 2002. The financial impact on the Company of the increased competition in Los
Angeles has been partially offset by the Company's success in adding to its station line-up and

25

---

geographically diversifying its revenue streams over the last few years. Corporate expenses increased in the year of 2002 compared to the same period in 2001 primarily as a result of merger costs and
higher legal and professional fees unrelated to the merger. The Company estimates that merger costs incurred in 2003 will approximate $14.0 million. Of that amount, approximately
$10.7 million is attributable to investment banking fees and the reimbursement of out-of-pocket expenses.

Results of Operations for the Year Ended December 31, 2001 Compared to the Year Ended December 31, 2000

The results of operations for the year ended December 31, 2001 are not comparable to the results of operations for the same period in 2000 primarily due to
the acquisition of KLNO(FM) in Dallas on September 24, 1999 (the station operated under a time brokerage agreement until January 31, 2000 when the Company began programming the station
in a Spanish-language format), the start-up of radio stations KRCD(FM) and KRCV(FM) in Los Angeles on January 31, 2000, the start-up of radio stations KCOR(FM) and
KBBT(FM) in San Antonio on September 15, 2000 and September 29, 2000, respectively, the programming format changes on radio stations KDXX(AM/FM), KDXT(FM) and KDOS(FM) in Dallas on
February 1, 2000 and KQBU(FM) in Houston on August 18, 2001, the acquisition of KOVE(FM) in Houston on July 20, 2001 and KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM) in Phoenix on
October 31, 2001, and the elimination of KTNQ(AM) in Los Angeles as a separately programmed radio station on January 1, 2001.

Net
revenues increased by $3.2 million or 1.3% to $240.8 million for the year ended December 31, 2001 from $237.6 million for the same period in 2000. Net
revenues increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of (a) revenue growth in Dallas and San Diego, and on Houston and Phoenix
stations that were not considered start-ups. The revenue growth was offset by a revenue decline in Chicago and on Los Angeles and San Antonio stations that were not considered start-ups or reformats,
which collectively represent an increase of $3.0 million, and (b) revenues from start-up stations acquired or reformatted in 2000 and 2001, which represented an increase of
$0.1 million.

Operating
expenses increased by $9.7 million or 14.8% to $75.4 million for the year ended December 31, 2001 from $65.7 million for the same period in 2000.
Operating expenses increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of (a) promotion expenses to address direct competition in the
key markets of Los Angeles, Chicago and Miami, which represented an increase of $4.1 million, (b) rent associated with the expansion of the Company's studio facilities in Los Angeles,
San Francisco, Miami and New York, which represented an increase of $2.7 million, (c) trade expenses due to additional promotion campaigns for Los Angeles and Miami, which represented an
increase of $0.8 million, and (d) an impairment loss on an investment, which
represented an increase of $0.8 million. As a percentage of net revenues, operating expenses increased to 31.3% from 27.7% for the years ended December 31, 2001 and 2000, respectively.

Wages,
salaries and benefits increased by $6.4 million or 9.1% to $76.4 million for the year ended December 31, 2001 from $70.0 million for the same period in
2000. Wages, salaries and benefits increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of (a) additional personnel associated with
start-up stations, which represented an increase of $4.6 million, (b) personnel costs associated with the programming changes in New York and Miami, which represented an
increase of $2.2 million, (c) additional costs incurred to hire experienced sales personnel in Los Angeles and Houston, which represented an increase of $0.5 million,
(d) higher staffing costs in the corporate office, which represented an increase of $0.6 million, (e) partially offset by a decrease in personnel costs associated with
on-air talent in Los Angeles, which represented a decrease of $1.1 million, and (f) costs associated with decreased ratings in Chicago, which represented a decrease of
$0.4 million. As a percentage of net revenues, wages, salaries and benefits increased to 31.7% from 29.5% for the years ended December 31, 2001 and 2000, respectively.

26

---

The
provision for bad debts increased by $0.5 million or 13.2% to $4.3 million for the year ended December 31, 2001 from $3.8 million for the same period in
2000. The provision for bad debts increased for the year ended December 31, 2001, compared to the same period in 2000 primarily because of the estimated uncollectability of certain notes
receivable. As a percentage of net revenues, the provision increased to 1.8% from 1.6% for the years ended December 31, 2001 and 2000, respectively.

Corporate
expenses decreased by $0.2 million or 5.1% to $3.7 million for the year ended December 31, 2001, from $3.9 million for the same period in 2000. The
decrease was primarily due to lower legal and professional fees in 2001. As a percentage of net revenues, corporate expenses decreased to 1.5% from 1.6% for the years ended December 31, 2001
and 2000, respectively.

EBITDA
for the year ended December 31, 2001 decreased $13.2 million or 14.0% to $81.0 million compared to $94.2 million for the same period in 2000. As a
percentage of net revenues, EBITDA decreased to 33.6% from 39.6% for the years ended December 31, 2001 and 2000, respectively.

Depreciation
and amortization for the year ended December 31, 2001 increased $2.1 million to $36.4 million, compared to $34.3 million for the same period in
2000. The increase is due to the acquisitions of KOVE(FM) in Houston and KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM) in Phoenix, and capital expenditures.

Interest
income, net decreased to $3.4 million from $7.1 million for the years ended December 31, 2001 and 2000, respectively. The decrease for the year ended
December 31, 2001, compared to the same
period in 2000 was due to cash and cash equivalents being higher in 2000 than in 2001 and lower interest rates in 2001.

Other,
net increased to $2.9 million for the year ended December 31, 2001, from $1.6 million in the same period in 2000. The increase was due to gains on the sales
of securities and the final award received by the Company related to an arbitration proceeding.

Federal
and state income taxes are being provided at an effective rate of 39.2% and 39.5% for the years ended December 31, 2001 and 2000, respectively. The decrease in the
effective rate is due to a lower effective state tax rate.

For
the year ended December 31, 2001, the Company's net income totaled $31.0 million ($0.28 per common share) compared to $41.5 million ($0.38 per common share) in
the same period in 2000.

Liquidity and Capital Resources

Net cash provided by operating activities for the year ended December 31, 2002 was $74.6 million as compared to $79.9 million for the same
period in 2001. The $5.3 million decrease from 2001 to 2002 is due to merger expenses of $5.1 million being recognized in 2002 and changes in operating assets and liabilities. Net cash
used in investing activities was $113.1 and $130.0 million for the years ended December 31, 2002 and 2001, respectively. The $16.9 million decrease from 2001 to 2002 is due to the
Houston and Phoenix acquisitions in 2001 being an amount greater than the aggregate cost of the 2002 acquisitions in Las Vegas, Fresno, San Jose and Albuquerque. Net cash provided by financing
activities was $19.1 and net cash used in financing activities was $6.0 million for the years ended December 31, 2002 and 2001, respectively. The $25.1 million increase from 2001
to 2002 is due to a $15.0 million borrowing from the Credit Facility in 2002 and the purchase of $10.1 million of Class A Common Stock by the Company in 2001.

The
Company paid $101.7 and $114.1 million for radio station acquisitions for the years ended December 31, 2002 and 2001, respectively. These acquisitions were funded with
available cash, except $15.0 million of the 2002 amount was funded with an amount borrowed from the Credit Facility.

27

---

Generally,
the Company's capital expenditures are made with cash provided by operations. Capital expenditures totaled $11.5 and $14.3 million for the years ended
December 31, 2002 and 2001, respectively. Approximately $4.3 million of the capital expenditures incurred during the year ended December 31, 2002 related to radio signal upgrade
projects for three different radio stations in Dallas
and Houston, transmitter projects in San Francisco, Phoenix, San Antonio, Miami, New York, Chicago, McAllen and Los Angeles, and the build-out of studio and office space in Las Vegas,
Phoenix, Dallas, Fresno, Albuquerque, San Francisco, Los Angeles, Miami and Houston compared to $10.0 million incurred in the same period of 2001 related to radio signal upgrade projects
affecting five different radio stations in Houston and Dallas and the build-out of studio and office space in Los Angeles, San Francisco, New York, Miami, Phoenix and San Antonio.

The
short-term liquidity needs of the Company are $151.2 million which is the sum of current liabilities, excluding the current portion of long-term
obligations, and the current portion of long-term obligations as shown in the table below. The long-term liquidity needs of the Company are shown in the table below.

Available
cash on hand plus cash flow provided funds available under lines of credit by operations was sufficient to fund the Company's operations, meet its debt obligations, and to fund
capital expenditures. Management believes the Company will have sufficient cash on hand and cash provided by operations to finance its operations, satisfy its debt service requirements, and to fund
capital expenditures. Management regularly reviews potential acquisitions. Future acquisitions will be financed primarily through proceeds from borrowings under the Credit Facility, available cash on
hand, and proceeds from securities offerings.

The
Company expects to terminate the Credit Facility after the merger with Univision has been completed. Upon termination of the Credit Facility, Univision will pay the outstanding
borrowings, if any, and the Company will fund future capital needs through Univision.

Stockholders' Equity

In 2001, the Company purchased 685,500 shares of its Class A Common Stock at a weighted average price per share of $14.75.

Material Contractual Obligations

The scheduled maturities of long-term obligations, future minimum rental payments under noncancellable operating leases and radio station acquisition
commitments of the Company as of December 31, 2002 are as follows (in thousands):

Payments Due by PeriodTotal

Less than
1 year

1-3
years

4-5
years

After 5
yearsLong-term obligations

$
16,436

$
15,007

$
16

$
19

$
1,394Operating leases


78,027


8,742


15,957


12,932


40,396Radio station acquisitions


105,000


105,000








Total contractual cash obligations

$
199,463

$
128,749

$
15,973

$
12,951

$
41,790


The Company borrowed $15.0 million from the Credit Facility on April 1, 2002. For the year ended December 31, 2001, no amount
was borrowed or outstanding on the Credit Facility. As of December 31, 2002, the Company had $165.0 million of credit available under the Credit Facility. Borrowings under the Credit
Facility bear interest at a rate based on LIBOR plus an applicable margin as determined by the Company's leverage ratio. The Credit Facility is secured by the stock of the Company's subsidiaries.
Availability under the Credit Facility reduces quarterly commencing September 30, 1999 and ending December 31, 2004. Our ability to make additional borrowings under

28

---

the Credit Facility is subject to compliance with certain financial ratios and other conditions set forth in the Credit Facility.

Recently Issued Accounting Pronouncements

In April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145,Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS No. 145 rescinds FASB Statement No. 4, Reporting Gains and
Losses from Extinguishment of Debtand requires recognition of gain or loss on extinguishment of debt to income or loss from continuing operations in the financial statements.
The Company is required to adopt the provisions of SFAS No. 145 effective January 1, 2003. Management does not believe adoption of this statement will materially impact the Company's
financial position or results of operations.

Critical Accounting Policies

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different
results under different assumptions and conditions. The Company believes that its critical accounting policies are limited to those described below.



The Company records impairment losses when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flow
estimated to be generated by those assets is less than the carrying amount of those assets. When specific assets are determined to be impaired, the cost basis of the assets is reduced to reflect their
current fair market value.

We
performed a recoverability assessment of all of our long-lived assets using an undiscounted cash flow model as of December 31, 2002. Based on our assumptions, all
long-lived assets were determined to be recoverable.



Our revenue is derived primarily from the sale of advertising time to local and national advertisers. We recognize revenue as commercials are broadcast. Revenues
from barter transactions are recognized as income when commercials are broadcast. Barter transactions are recorded at the estimated fair value of the goods or services received.



The allowance for doubtful accounts is estimated using a combination of the aging of the accounts receivable balances and knowledge related to the ability of the
Company to collect specific accounts. Older accounts receivable are seen to be less likely to be collected and require a greater allowance. Specific accounts which are estimated to not be collected
increase the allowance.



The Company records impairment losses when events and circumstances indicate that indefinite-lived intangible assets or cost in excess of fair value of net assets
acquired might be impaired. The reporting unit is defined as an individual radio market. To the extent a reporting unit's carrying amount exceeds its fair value, the reporting unit's indefinite-lived
intangible assets or cost in excess of fair value of net assets acquired may be impaired and we perform the second step of the impairment test. In the second step, we compare the implied fair value of
the reporting unit's indefinite-lived intangible assets

29

---

or cost in excess of fair value of net assets acquired, determined by allocating the reporting unit's fair value to all of its assets (recognized and unrecognized) and liabilities in a manner similar
to a purchase price allocation in accordance with SFAS No. 141, to its carrying amount, both of which are measured as of the end of the year. When the indefinite-lived intangible assets or cost
in excess of fair value of net assets acquired is determined to be impaired, the basis of the assets is reduced to reflect the implied fair value. We performed an impairment assessment of the
indefinite-lived intangible assets or cost in excess of fair value of net assets acquired as of January 1, 2002 and December 31, 2002 and determined there was no impairment.



Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

For
additional information on our significant accounting policies, see Note 1 to our accompanying consolidated financial statements.

Inflation

Inflation has affected our financial performance due to higher operating expenses. Although the exact impact of inflation is indeterminable, we have offset these
higher costs by increasing the effective advertising rates of most of our radio stations.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to interest rate risk on both the interest earned on cash and cash equivalents and interest paid on borrowings under the Credit Facility. A
change of 10% in the interest rate earned on short-term investments and interest paid under the Credit Facility would not have had a significant impact on our historical financial
statements.

30

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

|                                                                                                                |  | Page
Number
|--------------------------------------------------------------------------------------------------------------- |  | -----------
|Independent Auditors' Report                                                                                    |  | 32         
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                                    |  | 33         
|Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2002, 2001 and 2000 |  | 34         
|Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2002, 2001 and 2000            |  | 35         
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000                      |  | 36         
|Notes to Consolidated Financial Statements                                                                      |  | 37         

31

---



INDEPENDENT AUDITORS' REPORT

The
Board of Directors
Hispanic Broadcasting Corporation:

We
have audited the accompanying consolidated balance sheets of Hispanic Broadcasting Corporation and subsidiaries (the "Company") as of December 31, 2002 and 2001 and the related
consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2002. In
connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule included at Item 14(a) (2). These consolidated financial
statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial
statement schedule 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 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 Hispanic Broadcasting Corporation and
subsidiaries as of December 31, 2002 and 2001 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2002,
in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As
discussed in Note 1 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and
SFAS No. 142,Goodwill and Other Intangible Assets.



Dallas, Texas
February 23, 2003, except for Note 2 which is as of March 17, 2002

32

---



HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        (in thousands except share information)    ASSETS

|                                                                                                                |                                                                                                                                                                                                                                  | December 31,                               |          
|--------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------
|
|Current assets:                                                                                                 |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                | Cash and cash equivalents                                                                                                                                                                                                        |                                            | $        
|                                                                                                                | Accounts receivable, net of allowance of $2,669 in 2002 and $3,458 in 2001                                                                                                                                                       |                                            |          
|                                                                                                                | Prepaid expenses and other current assets                                                                                                                                                                                        |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  | Total current assets                       |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Property and equipment, net of accumulated depreciation and amortization                                        |                                                                                                                                                                                                                                  |                                            | 55,837   
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Cost in excess of fair value of net assets acquired net of accumulated amortization of $12,380 in 2002 and 2001 |                                                                                                                                                                                                                                  |                                            | 85,245   
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Intangible assets, net of accumulated amortization                                                              |                                                                                                                                                                                                                                  |                                            | 1,080,845
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Restricted cash                                                                                                 |                                                                                                                                                                                                                                  |                                            |         
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Deferred charges and other assets                                                                               |                                                                                                                                                                                                                                  |                                            | 10,578   
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  | Total assets                               |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                            |                                                                                                                                                                                                                                 
|Current liabilities:                                                                                            |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                | Accounts payable                                                                                                                                                                                                                 |                                            | $        
|                                                                                                                | Accrued expenses                                                                                                                                                                                                                 |                                            |          
|                                                                                                                | Income taxes payable                                                                                                                                                                                                             |                                            |          
|                                                                                                                | Current portion of long-term obligations                                                                                                                                                                                         |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  | Total current liabilities                  |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Long-term obligations, less current portion                                                                     |                                                                                                                                                                                                                                  |                                            | 16,429   
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Deferred income taxes                                                                                           |                                                                                                                                                                                                                                  |                                            | 143,323  
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Minority interest                                                                                               |                                                                                                                                                                                                                                  |                                            | 1,341    
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|Commitments and contingencies (Note 11)                                                                         |                                                                                                                                                                                                                                  |                                            |          
|Stockholders' equity:                                                                                           |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                | Preferred Stock, cumulative, $.001 par value; authorized 5,000,000 shares; no shares issued or outstanding                                                                                                                       |                                            |          
|                                                                                                                | Class A Common Stock, $.001 par value; authorized 175,000,000 shares in 2002 and 2001; issued 81,201,689 shares and outstanding 80,516,189 shares in 2002 and issued 80,923,786 shares and outstanding 80,238,286 shares in
2001 |                                            |          
|                                                                                                                | Class B Common Stock, convertible, $.001 par value; authorized 50,000,000 shares; issued and outstanding 28,312,940 shares                                                                                                       |                                            |          
|                                                                                                                | Additional paid-in capital                                                                                                                                                                                                       |                                            |          
|                                                                                                                | Retained earnings                                                                                                                                                                                                                |                                            |          
|                                                                                                                | Treasury stock, at cost, 685,500 shares                                                                                                                                                                                          |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  | Total stockholders' equity                 |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          
|                                                                                                                |                                                                                                                                                                                                                                  | Total liabilities and stockholders' equity |          
|                                                                                                                |                                                                                                                                                                                                                                  |                                            |          

See accompanying notes to consolidated financial statements.

33

---

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME        (in thousands except per share data)

|                                            |                                         | Year Ended December 31,                                                           |        
|------------------------------------------- | --------------------------------------- | --------------------------------------------------------------------------------- | -------
|
|Revenues                                    |                                         | $                                                                                 | 292,384
|Agency commissions                          |                                         |                                                                                   | 35,839 
|                                            |                                         |                                                                                   |        
|Net revenues                                |                                         |                                                                                   | 256,545
|Operating expenses                          |                                         |                                                                                   | 78,768 
|Wages, salaries and benefits                |                                         |                                                                                   | 85,955 
|Provision for bad debts                     |                                         |                                                                                   | 2,633  
|Depreciation and amortization               |                                         |                                                                                   | 12,267 
|Corporate expenses                          |                                         |                                                                                   | 10,992 
|                                            |                                         |                                                                                   |        
|Operating income                            |                                         |                                                                                   | 65,930 
|                                            |                                         |                                                                                   |        
|Other income (expense):                     |                                         |                                                                                   |        
|                                            | Interest income                         |                                                                                   |        
|                                            | Interest expense                        |                                                                                   |        
|                                            | Other, net                              |                                                                                   |        
|                                            |                                         |                                                                                   |        
|                                            |                                         |                                                                                   | 557    
|                                            |                                         |                                                                                   |        
|Income before income tax                    |                                         |                                                                                   | 66,487 
|Income tax                                  |                                         |                                                                                   | 26,274 
|                                            |                                         |                                                                                   |        
|Net income                                  |                                         | $                                                                                 | 40,213 
|                                            |                                         |                                                                                   |        
|Net income per common share:                |                                         |                                                                                   |        
|                                            | Basic and diluted                       |                                                                                   | $      
|Weighted average common shares outstanding: |                                         |                                                                                   |        
|                                            | Basic                                   |                                                                                   |        
|                                            | Diluted                                 |                                                                                   |        
|Comprehensive income:                       |                                         |                                                                                   |        
|                                            | Net income                              |                                                                                   | $      
|                                            | Other comprehensive income, net of tax: |                                                                                   |        
|                                            |                                         | Unrealized gain on marketable equity securities (net of tax of $268)              |        
|                                            |                                         | Reclassification adjustment for gains included in net income (net of tax of $268) |        
|                                            |                                         |                                                                                   |        
|Comprehensive income                        |                                         | $                                                                                 | 40,213 
|                                            |                                         |                                                                                   |        

See
accompanying notes to consolidated financial statements.

34

---



HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY        (in thousands except share information)

|                                                                     |                                                                                   |   |   | Common Stock |   |    |   | Retained
earnings
(accumulated
deficit) |    |   |   | Accummulated
other
comprehensive
income |   |   |        
|-------------------------------------------------------------------- | --------------------------------------------------------------------------------- | - | - | ------------ | - | -- | - | --------------------------------------- | -- | - | - | --------------------------------------- | - | - | -------
|
|
|Balance at December 31, 1999                                         |                                                                                   | $ |  |              | $ | 40 |   | $                                       | 14 |   | $ | 1,034,791                               |   | $ | (8,592 
|Net proceeds from issuance of 149,111 shares of Class A Common Stock |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 2,324                                   |   |   |       
|Two-for-one stock split                                              |                                                                                   |   |  |              |   | 41 |   |                                         | 14 |   |   | (55                                     | ) |   |       
|Tax benefit of stock options exercised                               |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 653                                     |   |   |       
|Options issued to non employees for services                         |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 242                                     |   |   |       
|Net income                                                           |                                                                                   |   |  |              |   |   |   |                                         |   |   |   |                                        |   |   | 41,531 
|                                                                     |                                                                                   |   |   |              |   |    |   |                                         |    |   |   |                                         |   |   |        
|Balance at December 31, 2000                                         |                                                                                   |   |  |              |   | 81 |   |                                         | 28 |   |   | 1,037,955                               |   |   | 32,939 
|Proceeds from issuance of 278,435 shares of Class A Common Stock     |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 4,094                                   |   |   |       
|Purchase of 685,500 shares of Class A Common Stock                   |                                                                                   |   |  |              |   |   |   |                                         |   |   |   |                                        |   |   |       
|Tax benefit of stock options exercised                               |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 729                                     |   |   |       
|Options issued to non employees for services                         |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 129                                     |   |   |       
|Net income                                                           |                                                                                   |   |  |              |   |   |   |                                         |   |   |   |                                        |   |   | 30,969 
|Other comprehensive income:                                          |                                                                                   |   |   |              |   |    |   |                                         |    |   |   |                                         |   |   |        
|                                                                     | Unrealized gain on marketable equity securities (net of tax of $268)              |   |   |             |   |    |  |                                         |    |  |   |                                         |  |   |        
|                                                                     | Reclassification adjustment for gains included in net income (net of tax of $268) |   |   |             |   |    |  |                                         |    |  |   |                                         |  |   |        
|Total comprehensive income                                           |                                                                                   |   |  |              |   |   |   |                                         |   |   |   |                                        |   |   |       
|                                                                     |                                                                                   |   |   |              |   |    |   |                                         |    |   |   |                                         |   |   |        
|Balance at December 31, 2001                                         |                                                                                   |   |  |              |   | 81 |   |                                         | 28 |   |   | 1,042,907                               |   |   | 63,908 
|Proceeds from issuance of 277,903 shares of Class A Common Stock     |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 4,065                                   |   |   |       
|Tax benefit of stock options exercised                               |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 984                                     |   |   |       
|Options issued to non employees for services                         |                                                                                   |   |  |              |   |   |   |                                         |   |   |   | 141                                     |   |   |       
|Net income                                                           |                                                                                   |   |  |              |   |   |   |                                         |   |   |   |                                        |   |   | 40,213 
|                                                                     |                                                                                   |   |   |              |   |    |   |                                         |    |   |   |                                         |   |   |        
|Balance at December 31, 2002                                         |                                                                                   | $ |  |              | $ | 81 |   | $                                       | 28 |   | $ | 1,048,097                               |   | $ | 104,121
|                                                                     |                                                                                   |   |   |              |   |    |   |                                         |    |   |   |                                         |   |   |        

See accompanying notes to consolidated financial statements.

35

---

HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS        (in thousands)

|                                               |                                                                                                                                       | Year Ended December 31,                                        |                                          
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | -----------------------------------------
|
|Cash flows from operating activities:          |                                                                                                                                       |                                                                |                                          
|                                               | Net income                                                                                                                            |                                                                | $                                        
|                                               | Adjustments to reconcile net income to net cash provided by operating activities:                                                     |                                                                |                                          
|                                               |                                                                                                                                       | Provision for bad debts                                        |                                          
|                                               |                                                                                                                                       | Depreciation and amortization                                  |                                          
|                                               |                                                                                                                                       | Minority interest                                              |                                          
|                                               |                                                                                                                                       | Amortization of debt facility fee included in interest expense |                                          
|                                               |                                                                                                                                       | Deferred income taxes                                          |                                          
|                                               |                                                                                                                                       | Changes in operating assets and liabilities:                   |                                          
|                                               |                                                                                                                                       |                                                                | Accounts receivable, net                 
|                                               |                                                                                                                                       |                                                                | Prepaid expenses and other current assets
|                                               |                                                                                                                                       |                                                                | Accounts payable                         
|                                               |                                                                                                                                       |                                                                | Accrued expenses                         
|                                               |                                                                                                                                       |                                                                | Income taxes payable                     
|                                               |                                                                                                                                       |                                                                | Other, net                               
|                                               |                                                                                                                                       |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|Cash flows from investing activities:          |                                                                                                                                       |                                                                |                                          
|                                               | Acquisitions of radio stations                                                                                                        |                                                                |                                          
|                                               | Cash deposited in restricted cash account related to the Fresno Acquisition, the San Jose Acquisition and the Albuquerque Acquisition |                                                                |                                          
|                                               | Property and equipment acquisitions                                                                                                   |                                                                |                                          
|                                               | Dispositions of property and equipment                                                                                                |                                                                |                                          
|                                               | Additions to intangible assets                                                                                                        |                                                                |                                          
|                                               | Increase in deferred charges and other assets                                                                                         |                                                                |                                          
|                                               | Proceeds from the sale of securities included in deferred charges and other assets                                                    |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|Cash flows from financing activities:          |                                                                                                                                       |                                                                |                                          
|                                               | Borrowings on long-term obligations                                                                                                   |                                                                |                                          
|                                               | Payments on long-term obligations                                                                                                     |                                                                |                                          
|                                               | Proceeds from stock issuances                                                                                                         |                                                                |                                          
|                                               | Purchase of treasury stock                                                                                                            |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|                                               |                                                                                                                                       |                                                                |                                          
|Net decrease in cash and cash equivalents      |                                                                                                                                       |                                                                | (19,370                                  
|Cash and cash equivalents at beginning of year |                                                                                                                                       |                                                                | 59,587                                   
|                                               |                                                                                                                                       |                                                                |                                          
|Cash and cash equivalents at end of year       |                                                                                                                                       | $                                                              | 40,217                                   
|                                               |                                                                                                                                       |                                                                |                                          

See accompanying notes to consolidated financial statements.

36

---



HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies



Hispanic Broadcasting Corporation (the "Company"), through its subsidiaries, owns and operates 62 Spanish-language and other Hispanic-targeted radio stations
serving in 15 of the top 25 markets throughout the United States (Los Angeles, New York City, Miami, Chicago, Houston, San Francisco/San Jose, Dallas/Fort Worth, San Antonio,
McAllen/Brownsville/Harlingen, Phoenix, San Diego, El Paso, Fresno, Las Vegas and Albuquerque). The Company also owns and operates HBC Sales Integration, which is one of the largest Spanish-language
radio broadcast networks in the United States in terms of audience delivery and HBCi which operates the Company's radio station Internet websites.



The accompanying consolidated financial statements include the accounts of Hispanic Broadcasting Corporation and its wholly-owned subsidiaries. The Company
consolidates the accounts of subsidiaries when it has a controlling financial interest (over 50%) in the outstanding voting shares of the subsidiary.

All
significant intercompany accounts and transactions have been eliminated in consolidation.



The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and related notes to the consolidated financial statements. Actual results could differ from those estimates.



Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less.



Restricted cash is legally restricted cash held in escrow accounts for pending acquisitions.



The Company uses the equity method to account for investments when it does not have a controlling interest but has the ability to exercise significant influence
over the operating and/or financial decisions of the investee. Investments where the Company does not exert significant influence are accounted for using the cost method. Investments at
December 31, 2002 and 2001 (included in deferred charges and other assets) consist of interests in entities which are involved in radio broadcasting and the ownership of transmission towers.



Property and equipment are recorded at cost. Expenditures for significant renewals and betterments are capitalized. Repairs and maintenance are charged to expense
as incurred. Gains or

37

---

losses from disposition of property and equipment are recognized in the statement of income and comprehensive income.

Depreciation
is provided in amounts sufficient to relate the asset cost to operations over the estimated useful lives on a straight-line basis. Leasehold improvements are
depreciated over the remaining life of the lease or the estimated service life of the asset, whichever is shorter. The estimated useful lives are as follows:

Land improvements

15 yearsBuildings and improvements

3 - 40 yearsBroadcast and other equipment

2 - 30 yearsFurniture and fixtures

2 - 10 years




In 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 142,Goodwill and
Other Intangible Assets. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized and to be tested for impairment at
least annually in accordance with the provisions of SFAS No. 142. The Company adopted the provisions of SFAS No. 142 on July 1, 2001 and January 1, 2002 for intangible
assets acquired in business combinations completed after June 30, 2001 and prior to July 1, 2001, respectively.

On
January 1, 2002, we were required by SFAS No. 142 to reassess the useful lives of all intangible assets acquired on or before June 30, 2001, and make any
necessary remaining amortization period adjustments by March 31, 2002. No remaining amortization period adjustments were necessary. In addition, to the extent that an intangible asset is
identified as having an indefinite useful life, we are required to perform a transitional test to determine if there is an asset impairment in accordance with the provisions of SFAS No. 142.
Any impairment loss is measured as of January 1, 2002 and recognized as the cumulative effect of a change in accounting principle in the six months ended June 30, 2002.

In
connection with the transitional impairment evaluation, SFAS No. 142 requires us to perform an assessment of whether there is an indication that indefinite-lived intangible
assets or cost in excess of fair value of net assets acquired is impaired as of January 1, 2002. To accomplish this, we identified the reporting units and determined the carrying value of each
reporting unit. The Company defines its reporting unit to be an individual radio market. To the extent a reporting unit's carrying amount exceeds its fair value, the reporting unit's cost in excess of
fair value of net assets acquired may be impaired and we must perform the second step of the transitional impairment test. In the second step, we must compare the implied fair value of the reporting
unit's cost in excess of fair value of net assets acquired, determined by allocating the reporting unit's fair value to all of its assets (recognized and unrecognized) and liabilities in a manner
similar to a purchase price allocation in accordance with SFAS No. 141, to its carrying amount, both of which would be measured as of January 1, 2002. Any transitional impairment loss is
recognized as the cumulative effect of a change in accounting principle in our statement of income. No impairment loss was recognized for the year ended December 31, 2002 as a result of the
transitional test discussed above.

The
Company also performed an assessment of whether there is an indication that cost in excess of fair value of net assets acquired is impaired as of December 31, 2002. The same
valuation methodology was followed as was previously discussed related to the transitional impairment test. No impairment loss was recognized for the year ended December 31, 2002 as a result of
this test.

Intangible
assets are recorded at cost. Amortization of intangible assets is provided in amounts sufficient to charge the asset cost to operations over the estimated useful lives on a
straight-line basis. Broadcast licenses, cost in excess of fair value of net assets acquired and certain other intangible assets have indefinite useful lives and are not subject to
amortization for the year ended December 31, 2002.

38

---

The estimated useful lives of other intangible assets with definite useful lives is 3 to 40 years. For the years ended December 31, 2001 and 2000, intangible assets acquired prior to
July 1, 2001 are subject to amortization. The estimated useful lives are as follows:

Broadcast licenses

40 yearsCost in excess of fair value of net assets acquired

principally 40 yearsOther intangible assets

3 - 40 years


As
of December 31, 2001 and 2000, the Company evaluated the propriety of the carrying amount of intangible assets, including cost in excess of fair value of net assets acquired,
as well as the amortization period to determine whether current events or circumstances warrant adjustments to the carrying value and/or revised estimates of useful lives. This evaluation consisted of
the projection of undiscounted income before depreciation, amortization, and interest for each of the Company's radio stations over the remaining estimated useful life of the broadcast licenses. If
such projections indicated that undiscounted cash flows were not expected to be adequate to recover the carrying amounts of the related intangible assets, a loss is recognized to the extent the
carrying amount of the asset exceeds its fair value. The Company believes that no impairment of cost in excess of fair value of net assets acquired and other intangible assets has occurred and that no
reduction of the estimated useful lives was warranted.



Revenue is derived primarily from the sale of advertising time to local and national advertisers. Revenue is recognized as commercials are broadcast.



The Company incurs various marketing and promotional costs to add and maintain listenership. These costs are charged to expense in the year incurred and totaled
approximately $9.9, $9.5 and $5.7 million for the years ended December 31, 2002, 2001 and 2000, respectively.



Barter transactions represent advertising time exchanged for promotional items, advertising, supplies, equipment and services. Barter transactions are recorded at
the estimated fair value of the goods or services received. Revenues from barter transactions are recognized as income when commercials are broadcast. Expenses are recognized when goods or services
are received or used. Barter transactions are not significant to the Company's consolidated financial statements.



Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

Earnings Per Share

Basic earnings per common share is based on net earnings after preferred stock dividend requirements, if any, and the weighted average number of common shares
outstanding during each year. Diluted earnings per common share reflects the incremental increase in the weighted average

39

---

number of common shares due to the dilutive effect of stock options and the Employee Stock Purchase Plan.



The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable and payable, approximate fair value due to the relatively
short maturity of these instruments. The carrying amount of long-term obligations, including the current portion, approximates fair value based upon quoted interest rates for the same or
similar debt issues.



In the opinion of management, credit risk with respect to accounts receivable is limited due to the large number of diversified customers and the geographic
diversification of the Company's customer base. The Company performs ongoing credit evaluations of its customers and believes that adequate allowances for uncollectible accounts receivable are
maintained.



The Company accounts for stock options issued to employees and directors using the intrinsic-value method as outlined under Accounting Principles Board Opinion
No. 25 ("APB 25"),Accounting for Stock Issued to Employeesand related interpretations including FASB Interpretation No. 44, Accounting for Certain Transactions
involving Stock Compensation(an interpretation of APB Opinion No. 25), issued March 2000, to account
for its fixed plan stock options.

Under
APB 25, the Company does not recognize compensation expense related to employee stock options since options are not granted at a price below the market value of the underlying
common stock on the date of grant. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 123,Accounting for Stock-Based
Compensation, and Emerging Issues Task Force No. 96-18Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services, the Company includes in operating expenses in the statement of income and comprehensive income, the cost of stock
options (calculated using the fair-value method) issued to persons who are not employees or directors.

For
purposes of pro forma disclosures, the estimated fair value of the options is expensed over the options' vesting period. Pro forma net income and earnings per share disclosures as if
the Company recorded compensation expense based on the fair value for stock-based awards have been presented in accordance with the provisions of SFAS No. 148, Accounting for Stock-Based CompensationTransition and
Disclosure, and are as follows (in thousands, except per share information):

Year Ended December 31,2002

2001

2000Net income as reported

$
40,213

$
30,969

$
41,531Stock-based employee compensation expense, net of related tax effects, included in net income as reported


56


51


95Stock-based employee compensation expense determined under fair value-based method, net of related tax effects


(9,959
)

(8,937
)

(7,905
)Pro forma net income

$
30,310

$
22,083

$
33,721Net income per common share:As reportedbasic and diluted

$
0.37

$
0.28

$
0.38Pro formabasic and diluted

$
0.28

$
0.20

$
0.31


40

---

The
weighted average fair value at date of grant for options granted in the years ended December 31, 2002, 2001 and 2000 was $13.91, $12.62 and $16.46 per share, respectively. The
fair value of these options was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

2002

2001

2000Risk free interest rate

3.76
%
4.57
%
5.96
%Dividend yield

0.00
%
0.00
%
0.00
%Volatility factor

58.61
%
59.42
%
57.82
%Weighted average expected life

6 years

6 years

6 years




SFAS No. 130,Reporting Comprehensive Income,establishes guidelines for the reporting and display of
comprehensive income and its components in financial statements. Comprehensive income includes unrealized gains on equity securities classified as available-for-sale and
included as a component of stockholders' equity.



In 2001, the Financial Accounting Standards Board issued SFAS No. 144,Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 supersedes SFAS No. 121,Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. SFAS No. 144 retains the requirements of SFAS No. 121 to (a) recognize an impairment loss only if the
carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and (b) measure an impairment loss as the difference between the carrying amount and fair
value of the assets. The statement also removes goodwill from its scope and covers the accounting for the disposal of long-lived assets. The Company adopted the provisions of SFAS
No. 144 on January 1, 2002.

2. Pending Merger

On June 11, 2002, the Company agreed to merge with Univision. Univision will acquire the Company in an all-stock transaction. In the merger,
the stockholders of the Company will exchange each share of their capital stock in the Company for the right to receive 0.85 share of the Class A common stock of Univision. The boards of
directors of both companies approved the merger, the stockholders of each company voted in favor of the merger on February 28, 2003, and the DOJ, Univision and the Company have reached an
agreement regarding the merger. The merger is subject to approval by the FCC and customary closing conditions. The Company expects that the merger will close in April 2003.

Included
in corporate expenses are merger expenses of $5.1 million for the year ended December 31, 2002. The Company estimates that merger costs incurred in 2003 will
approximate $14.0 million.

3. Related Party Transactions

Clear Channel Communications, Inc. ("Clear Channel") owns all the outstanding shares of the Company's Class B common stock, which accounts for
approximately 26.0% of the Company's common stock. Transactions with Clear Channel are consummated on terms similar to those with unrelated parties. The Company earned revenues from transactions with
Clear Channel related to the sale of airtime, rental of space on transmission towers and other miscellaneious transactions. Expenses were incurred by the Company from transactions with Clear Channel
related to national representation fees, rental of space on transmission towers, outdoor advertising and other miscellaneous transactions. The

41

---

net expense from these transactions is $3.8, $6.7 and $2.6 million for the years ended December 31, 2002, 2001 and 2000, respectively.

A
director of the Company, Mr. Ernesto Cruz, is employed by Credit Suisse First Boston, Inc. ("CSFB") which provides the Company with investment banking services. The Company paid
this firm $2.0 million in fees for investment banking services related to the merger for the year ended December 31, 2002.

4. Acquisitions and Radio Signal Upgrades



On August 10, 2001, the Company entered into an asset purchase agreement to acquire for $16.0 million the assets of KQMR(FM), serving the Las Vegas
market (the "Las Vegas Acquisition"). On March 22, 2002, the Company closed on the Las Vegas Acquisition. The Company used its available cash to fund the acquisition.

The
fair value of the assets acquired in the Las Vegas Acquisition as of March 22, 2002 is as follows (in thousands):

Broadcast and other equipment

$
26Broadcast licenses


15,952Other intangible assets


57$
16,035


On
October 10, 2001, the Company entered into an asset purchase agreement to acquire for $5.0 million the assets of KZOL(FM), serving the Fresno market (the "Fresno
Acquisition"). On March 29, 2002, the Company closed on the Fresno Acquisition. The Company used its available cash to fund the acquisition.

The
fair value of the assets acquired in the Fresno Acquisition as of March 29, 2002 is as follows (in thousands):

Broadcast and other equipment

$
88Furniture and fixtures


2Broadcast licenses


4,898Other intangible assets


34$
5,022


On
December 17, 2001, the Company entered into an asset purchase agreement to acquire for $58.0 million the assets of KEMR(FM) (formerly KSOL(FM)), serving the San Jose and
San Francisco markets (the "San Jose Acquisition"). On April 1, 2002, the Company closed on the San Jose Acquisition. The Company used its available cash to fund the acquisition along with
$15.0 million borrowed from the $180.0 million revolving credit facility (the "Credit Facility") on April 1, 2002.

42

---

The
fair value of the assets acquired in the San Jose Acquisition as of April 1, 2002 is as follows (in thousands):

Land and improvements

$
99Buildings and improvements


57Broadcast and other equipment


246Furniture and fixtures


13Broadcast licenses


57,412Other intangible assets


464$
58,291


On
August 26, 2002, the Company entered into an asset purchase agreement to acquire for $22.5 million the assets of KJFA(FM), KIOT(FM), KVVF(FM), KKSS(FM) and KAJZ(FM),
serving the Albuquerque market (the "Albuquerque Acquisition"). On November 1, 2002, the Company closed on the Albuquerque Acquisition. The Company used its available cash to fund the
acquisition.

The
fair value of the assets acquired in the Albuquerque Acquisition as of November 1, 2002 is as follows (in thousands):

Land and improvements

$
132Buildings and improvements


412Broadcast and other equipment


1,074Furniture and fixtures


94Broadcast licenses


20,431Other intangible assets


244$
22,387


The
intangible assets acquired in the Las Vegas Aquisition, the Fresno Acquisition, the San Jose Acquisition and the Albuquerque Acquisition are not subject to amortization.

Radio
stations KPTY(FM) in Houston and KESS(FM) (formerly KDXX(FM)) and KDXX(FM) (formerly KDXT(FM)) in Dallas have been involved in a variety of proceedings before the Federal
Communications Commission to improve each of the stations' signal coverage. The radio signal upgrade projects for KPTY(FM) in Houston and KESS(FM) in Dallas were substantially completed in
February 2002 and the stations began broadcasting according to their new authorized signal authority. The upgrade costs of $35.0 million incurred by the Company and included in deferred
charges and other assets were reclassified to intangible assets during 2002. The radio signal upgrade project for KDXX(FM) in Dallas was substantially completed in July 2002 and the station
began broadcasting according to its new authorized signal authority. The upgrade costs of $2.6 million incurred by the Company and included in deferred charges and other assets were
reclassified to intangible assets during 2002 and are not subject to amortization.



On April 24, 2001, the Company entered into an asset purchase agreement to acquire for $80.0 million the FCC licenses of a radio station
broadcasting at 106.5 MHz (KOVE(FM)), serving the Houston market (the "Houston Acquisition"). The Houston Acquisition closed on July 20, 2001. The asset acquisition was funded with available
cash.

43

---

The
fair value of the assets acquired in the Houston Acquisition as of July 20, 2001 is as follows (in thousands):

Land and improvements

$
164Buildings and improvements


1,436Broadcast and other equipment


428Broadcast licenses


77,863Other intangible assets


173$
80,064


On
September 4, 2001, the Company entered into an asset purchase agreement to acquire for $34.0 million the assets of KOMR(FM), KMRR(FM), KKMR(FM) and KHOV(FM), serving the
Phoenix market (the "Phoenix Acquisition"). The Phoenix Acquisition closed on October 31, 2001. The asset acquisition was funded with available cash.

The
fair value of the assets acquired in the Phoenix Acquisition as of October 31, 2001 is as follows (in thousands):

Prepaid expenses and other current assets

$
24Land and improvements


17Buildings and improvements


352Broadcast and other equipment


1,635Furniture and fixtures


48Broadcast licenses


31,708Other intangible assets


282$
34,066


The
intangible assets acquired in the Houston Acquisition and the Phoenix Acquisition are not subject to amortization.



On October 15, 1999, the Company entered into an asset purchase agreement to acquire for $75.0 million the assets of KRCD(FM) and KRCV(FM), serving
the Los Angeles market (the "Los Angeles Acquisition"). The Los Angeles Acquisition closed on January 31, 2000. The asset acquisition was funded with a portion of the proceeds from the
November 1999 secondary public stock offering (the "November 1999 Offering"). The stations' programming was converted to a single Spanish-language format in February 2000.

On
May 31, 2000, the Company entered into an asset purchase agreement to acquire for $45.0 million the assets of KCOR(FM) and KBBT(FM), serving the San Antonio market. The
KCOR(FM) and KBBT(FM) acquisitions closed on September 15, 2000 and September 29, 2000, respectively. The asset acquisitions were funded with a portion of the proceeds from the
November 1999 Offering. The stations' programming was converted to separate Hispanic-targeted formats.



On January 2, 2003, the Company entered into an agreement to acquire for approximately $32.9 million the assets of WVIV(FM) (formerly WXXY(FM)),
serving the Chicago market (the

44

---

"Chicago Acquisition"). The Chicago Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the Chicago Acquisition during the second quarter
of 2003. The Company plans to use its available cash to fund the acquisition along with borrowings from the Credit Facility.

On
February 13, 2003, the Company entered into an agreement to acquire for $32.0 million the stock of a company which owns and operates WKAQ(FM), WKAQ(AM), WUKQ(FM) and
WUKQ(AM), serving the Puerto Rico market (the "Puerto Rico Acquisition"). The Puerto Rico Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close
on the Puerto Rico Acquisition during the second quarter of 2003 and plans to borrow from the Credit Facility to fund the acquisition.

On
March 3, 2003, the Company entered into an agreement to acquire for $24.0 million the assets of KNGT(FM), serving the Sacramento market and a tower located near Dallas,
Texas (the "Sacramento Acquisition"). The Sacramento Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the Sacramento Acquisition during
the second quarter of 2003. The Company plans to borrow from the Credit Facility to fund the acquisition.

On
March 17, 2003, the Company entered into an agreement to acquire for $16.0 million the assets of KTND(FM), serving the Austin market (the "Austin Acquisition"). The
Austin Acquisition is subject to regulatory approvals and customary closing conditions. The Company expects to close on the Austin Acquisition during the third quarter of 2003. The Company plans to
borrow from the Credit Facility to fund the acquisition.



Unaudited pro forma results of operations for the years ended December 31, 2002 and 2001, calculated as though the Houston Acquisition, the Phoenix
Acquisition, the Las Vegas Acquisition, the Fresno Acquisition, the San Jose Acquisition, the Albuquerque Acquisition, the Chicago Acquisition, the Puerto Rico Acquisition, the Sacremento Acquisition
and the Austin Acquisition had occurred at the beginning of each year, is as follows (in thousands, except per share data):

Pro forma
Year Ended December 31,2002

2001Net revenues

$
274,139

$
265,717Operating income


66,209


44,663Net income


38,242


26,815Net income per common share:Basic


0.35


0.25Diluted


0.35


0.24


The
pro forma information is presented for comparative purposes only and does not purport to be indicative of what would have occurred had the acquisitions actually been made at such
dates, nor is it indicative of future operating results.

45

---

5. Property and Equipment

Property and equipment consists of the following (in thousands):

December 31,2002

2001Land and improvements

$
13,133

$
10,790Buildings and improvements


19,295


17,622Broadcast and other equipment


56,322


49,794Furniture and fixtures


18,980


16,642107,730


94,848Less accumulated depreciation and amortization


51,893


40,420$
55,837

$
54,428


6. Intangible Assets

Intangible assets consist of the following (in thousands):

December 31,2002

2001Broadcast licenses

$
1,159,868

$
1,018,237Other intangible assets


19,531


17,6641,179,399


1,035,901Less accumulated amortization


98,554


97,746$
1,080,845

$
938,155


Intangible
assets as of December 31, 2002 are summarized as follows (in thousands):

|                                              |  | Gross Carrying
Amount |           | Accumulated
Amortization |   | Net Amount
|--------------------------------------------- |  | --------------------- | --------- | ------------------------ | - | ----------
|Intangible assets subject to amortization     |  | $                     | 12,976    |                          | $ | 11,091    
|Intangible assets not subject to amortization |  |                       | 1,264,048 |                          |   | 99,843    
|                                              |  |                       |           |                          |   |           
|                                              |  | $                     | 1,277,024 |                          | $ | 110,934   
|                                              |  |                       |           |                          |   |           

Amortization
expense for the years ended December 31, 2002, 2001 and 2000 is $0.5, $26.7 and $26.6 million, respectively. Estimated amortization expense of intangible
assets acquired as of December 31, 2002 with finite useful lives are summarized as follows (in thousands):

Year

Amount2003

$
6042004


4752005


2532006


1052007


105


46

---

The
reconciliation of reported net income to adjusted net income, which is adjusted for the effect of amortization of intangible assets with an indefinite useful life (net of income
taxes) is as follows (in thousands except per share data):

Year Ended December 31,2002

2001

2000Reported net income

$
40,213

$
30,969

$
41,531Broadcast licenses amortization, net of income tax





14,827


13,431Cost in excess of fair value of net assets acquired amortization, net of income tax





1,637


1,554Other intangible assets amortization, net of income tax





86


77Adjusted net income

$
40,213

$
47,519

$
56,593


Year Ended December 31,2002

2001

2000Adjusted net income per common share:Basic:Reported net income

$
0.37

$
0.28

$
0.38Broadcast licenses amortization, net of income tax





0.14


0.12Cost in excess of fair value of net assets acquired amortization, net of income tax





0.02


0.01Other intangible assets amortization, net of income tax








Adjusted net income

$
0.37

$
0.44

$
0.51Diluted:Reported net income

$
0.37

$
0.28

$
0.38Broadcast licenses amortization, net of income tax





0.14


0.12Cost in excess of fair value of net assets acquired amortization, net of income tax





0.01


0.01Other intangible assets amortization, net of income tax








Adjusted net income

$
0.37

$
0.43

$
0.51


7. Investments

The Company recognized an impairment loss of $0.8 million in 2001 associated with an investment. The fair market value of the investment was determined to
be zero based on a review of current financial information. The loss is included in operating expenses for the year ended December 31, 2001.

In
2001, the Company sold marketable equity securities. Included in other income, net for the year ended December 31, 2001 is a realized gain of $2.5 million from the sale
of these securities.

47

---

8. Accrued Expenses

Accrued expenses consist of the following (in thousands):

December 31,2002

2001Wages, salaries and benefits payable

$
3,304

$
4,193Commissions payable


5,816


5,411Advertising payable


296


1,343Other accrued expenses


5,975


5,021$
15,391

$
15,968


9. Minority Interest

On May 10, 1999, the Company purchased a 24.5% interest in Rawhide Radio, LLC ("Rawhide"). Rawhide owns radio stations KVCQ(FM) in Cuero, Texas and
KBAE(FM) in Llano, Texas. On May 24, 2002, the Company entered into a purchase agreement to acquire an additional 51.0% ownership interest for $3.0 million. The additional 51.0%
ownership interest was acquired in a non-cash transaction by reducing notes receivable held by the Company, which were issued by the seller of the 51.0% interest. The acquisition closed on
December 3, 2002. The investment in Rawhide was accounted for using the equity method from its inception on May 10, 1999 through December 2, 2002. After the acquisition of the
additional interest, the Company owns a 75.5% interest in Rawhide. The accounts of Rawhide are consolidated with the Company starting on December 3, 2002 and the outside ownership interest in
the partnership has been recorded as minority interest.

10. Long-Term Obligations

The following is a summary of long-term obligations outstanding as of December 31, 2002 and 2001 (in thousands):

2002

2001Revolving credit facility payable to banks; aggregate commitment of $180.0 million; interest rate based on LIBOR plus an applicable margin as determined by the Company's leverage ratio; interest rate at
December 31, 2002 is 2.1%; payable through December 2004; secured by 100% of the common stock of the Company's wholly-owned subsidiaries; the Company is required to comply with certain financial and nonfinancial covenants

$
15,000

$
Prize awards net of imputed interest (10% to 12%), payable in varying annual installments through 2044


1,419


1,424Other long-term obligation


17


16,436


1,424Less current portion


7


6$
16,429

$
1,418


The
Company's ability to make additional borrowings under the Credit Facility is subject to compliance with certain financial ratios and other conditions set forth in the Credit
Facility. As of

48

---

December 31, 2002, the Company had $165.0 million of credit available. The Credit Facility commitment began reducing on September 30, 1999 and continues quarterly through
December 31, 2004.

Maturities
of long-term obligations for the five years subsequent to December 31, 2002 are as follows (in thousands):

Year

Amount2003

$
72004


15,0072005


82006


92007


10Thereafter


1,394


Interest
paid for the years ended December 31, 2002, 2001 and 2000 amounted to $1.0, $0.9 and $0.7 million, respectively.

11. Commitments and Contingencies

The Company leases office space and other property under noncancellable operating leases. Terms of the leases vary from one to thirty years. Certain leases have
contingent rent clauses whereby rent is increased based on a change in the Consumer Price Index. Various leases have renewal options of three to twenty years. Future minimum rental payments under
noncancellable operating leases in effect at December 31, 2002 are summarized as follows (in thousands):

Year

Amount2003

$
8,7422004


8,2622005


7,6952006


6,9352007


5,997Thereafter


40,396


Rent
expense for the years ended December 31, 2002, 2001 and 2000 was $8.9, $8.5 and $5.0 million, respectively.

The
Company is subject to legal proceedings and other claims which have arisen in the ordinary course of business and as described below and have not been fully adjudicated. These
actions, when ultimately concluded, will not, in the opinion of management, have a material adverse effect upon the financial position or results of operation of the Company.

On
June 12, 2002, Spanish Broadcasting System, Inc. ("SBS") filed Spanish Broadcasting System, Inc. v. Clear Channel Communications, Inc. and Hispanic
Broadcasting Corporation in the United States District Court for the Southern District of Florida. SBS alleged a variety of claims against the defendants including claims for federal and state
antitrust violations under the Sherman Act, the Florida Antitrust Act, and California's Cartwright Act. SBS's complaint also included numerous other state law causes of action including, among others,
tortious interference, defamation, and violation of
the California Unfair Competition Act. The plaintiff, and both defendants, own and operate radio stations throughout the United States, and SBS's claims arose out of steps the defendants allegedly
took to undermine SBS's radio station business. On July 31, 2002, plaintiff amended its

49

---

complaint. The amended complaint sought actual damages in excess of $500 million before any trebling under federal or state statute along with attorney fees and other unspecified damages. On
January 31, 2003, the United States District Court entered a final order dismissing the case with prejudice. On February 14, 2003, SBS filed a motion for reconsideration of the order
which dismissed the case. SBS has announced that, if its motion for reconsideration is not granted, then it will appeal the dismissal order. The Company is vigorously contesting this matter.

12. Stockholders' Equity



In 2001, the Company purchased 685,500 shares of its Class A Common Stock at a weighted average price per share of $14.75.

Clear
Channel owns all of the issued and outstanding Class B Common Stock. The rights of the Class A and Class B Common Stock are identical except that the
Class B Common Stock has no voting rights, except in certain matters. Shares of Class B Common Stock are convertible into shares of Class A Common Stock, at Clear Channel's
option, subject to any necessary governmental consents, including the consent of the FCC.



The Company is authorized to issue 5,000,000 shares of $.001 par value Preferred Stock. The Preferred Stock may be issued in series, with the rights and
preferences of each series established by the Company's Board of Directors.

13. Operating Expenses

Operating expenses consist of the following (in thousands):

Year Ended December 31,2002

2001

2000Rent

$
8,638

$
8,241

$
4,741General promotion


9,905


10,680


7,374Music fees and licenses


8,328


7,046


6,554Special events


9,565


8,376


8,866Representative commissions


6,464


6,445


6,797Other operating expenses


35,868


34,611


31,409$
78,768

$
75,399

$
65,741


50

---

14. Corporate Expenses

Corporate expenses consist of the following (in thousands):

Year Ended December 31,2002

2001

2000Travel costs

$
525

$
420

$
462Outside consulting


702


503


367Telecommunication costs


355


398


292Legal and professional fees


7,379


777


1,012Other corporate expenses


2,031


1,620


1,746$
10,992

$
3,718

$
3,879


15. Income Taxes

The provision for income tax consists of the following (in thousands):

Year Ended December 31,2002

2001

2000Current:Federal

$
2,011

$
9,117

$
15,552State


426


1,205


3,548Total current tax


2,437


10,322


19,100Deferred:Federal


20,078


8,102


6,640State


3,759


1,518


1,320Total deferred tax


23,837


9,620


7,960Total income tax

$
26,274

$
19,942

$
27,060


The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2002 and 2001 are as follows (in
thousands):

2002

2001Deferred tax assets:Net operating losses

$
922

$
922Other intangible assets


1,459


1,871Long-term obligationsprize awards


553


556Allowance for doubtful accounts receivable


1,437


1,347Other


2,288


749Total deferred tax assets


6,659


5,445Deferred tax liabilities:Broadcast licenses


138,043


115,053Property and equipment


4,538


2,492Other


7,401


7,386Total deferred tax liabilities


149,982


124,931Net deferred tax liabilities

$
143,323

$
119,486


51

---

The
reconciliation of income tax expense computed at the federal statutory tax rate to the Company's actual income tax expense is as follows (in thousands):

Year Ended December 31,2002

2001

2000Federal income tax at statutory rate

$
23,271

$
17,819

$
24,007State income taxes, net of federal benefit


2,720


1,770


3,163Nondeductible and non-taxable items, net


283


353


(110
)$
26,274

$
19,942

$
27,060


As
of December 31, 2002, the Company had tax net operating loss carryforwards for state tax purposes of approximately $16.5 million which expire in years 2005 through 2022
if not used.

Income
taxes paid for the years ended December 31, 2002, 2001 and 2000 amounted to $2.6, $8.0 and $22.9 million, respectively.

16. Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands):

Year Ended December 31,2002

2001

2000Numerator:Net income

$
40,213

$
30,969

$
41,531Denominator:Denominator for basic earnings per share


108,723


108,872


108,858Effect of dilutive securities:Stock options


804


733


1,514Employee Stock Purchase Plan


16


12


16Denominator for diluted earnings per share


109,543


109,617


110,388


Stock
options which were excluded from the computation of diluted earnings per share due to their antidilutive effect amounted to 2.1, 1.7 and 0.6 million shares for the years
ended December 31, 2002, 2001 and 2000.

17. Retirement Plan

The Company has a defined contribution retirement savings plan (the "Plan"). The Plan covers all employees who have reached the age of 18 years. The
Company matches participants' contributions to the Plan in an amount not to exceed $1,500 annually. The Company, at the sole discretion of the Board of Directors, may make additional supplemental
contributions to the Plan. The Company's expenses related to the Plan for the years ended December 31, 2002, 2001 and 2000 amounted to $0.6, $0.6 and $0.6 million, respectively.

52

---

18. Supplemental Cash Flows Information

Noncash investing and financing activities for the year ended December 31, 2002 are as follows (in thousands):

Increase (Decrease)Property
and
equipment,
net

Intangible
assets, net

Restricted
cash

Deferred
charges
and other
assetsAmounts reclassified due to the completion of radio station upgrades

$
29

$
36,830

$


$
(36,859
)Amounts reclassified due to radio station acquisitions


(18
)

4,760


(4,401
)

(341
)$
11

$
41,590

$
(4,401
)
$
(37,200
)


19. Stock Options

In May 1997, the stockholders of the Company approved a stock incentive plan ("Long-Term Incentive Plan"), to be administered by the Board of
Directors or by a committee of the Board of Directors. The maximum number of shares of Class A Common Stock that may be the subject of awards at any one time shall be ten percent of the total
number of shares of Class A Common Stock outstanding. Options
granted under the Long-Term Incentive Plan have a ten-year term and vest over various periods up to five years.

The
stockholders of the Company also approved an Employee Stock Purchase Plan in May 1997. Under the plan, shares of the Company's common stock may be purchased at
six-month intervals at 85% of the lower of the fair market value on the first or the last day of each six-month period. Employees may purchase shares having a value not
exceeding 15% of their gross compensation during an offering period. During 2002, 2001 and 2000, employees purchased 45,754, 55,980 and 37,768 common shares at average prices of $19.85, $23.35 and
$29.64, respectively.

The
Company granted 1,025,500, 844,000 and 2,169,400 stock options in 2002, 2001 and 2000, respectively, to various employees of the Company under its Long-Term Incentive
Plan. The exercise prices of options outstanding at December 31, 2002 ranged from $8.22 to $50.57 per share, the market prices at dates of grant.

53

---

The
following is a summary of stock options outstanding and exercisable for the years ended December 31, 2000, 2001 and 2002 (in thousands, except per share data):

Number
Of Shares

Weighted Average
Exercise Price Per ShareStock Options Outstanding:Options outstanding at December 31, 1999

2,952

$
17.31Granted

2,169


27.23Forfeited

(221
)

25.26Exercised

(118
)

11.75Options outstanding at December 31, 2000

4,782


21.58Granted

844


21.39Forfeited

(390
)

23.78Exercised

(222
)

12.50Options outstanding at December 31, 2001

5,014


21.72Granted

1,025


24.52Forfeited

(172
)

24.85Exercised

(232
)

13.59Options outstanding at December 31, 2002

5,635


22.47Exercisable Stock Options:Options exercisable at December 31, 1999

69

$
14.49Vested

623


14.09Exercised

(118
)

11.75Options exercisable at December 31, 2000

574


14.62Vested

1,082


20.16Exercised

(222
)

12.50Options exercisable at December 31, 2001

1,434


18.15Vested

1,312


20.83Exercised

(232
)

13.59Options exercisable at December 31, 2002

2,514


20.04


54

---

The
following is a summary of stock options outstanding and exercisable at December 31, 2002:

|Range of
Exercise Prices
Per Share |  | Shares
Under Option
(in thousands) |  | Weighted Average
Exercise Price Per Share |       | Weighted Average
Remaining
Contractual Life
(in years)
|---------------------------------- |  | ---------------------------------- |  | ----------------------------------------- | ----- | ------------------------------------------------------
|Stock Options Outstanding:         |  |                                    |  |                                           |      
|$8.22 - $11.75                     |  | 672                                |  | $                                         | 11.69 |                                                       
|12.34 - 18.13                      |  | 622                                |  |                                           | 17.63 |                                                       
|18.75 - 28.02                      |  | 3,296                              |  |                                           | 22.05 |                                                       
|28.75 - 41.84                      |  | 1,039                              |  |                                           | 33.52 |                                                       
|50.57                              |  | 6                                  |  |                                           | 50.57 |                                                       
|                                   |  |                                    |  |                                           |       |                                                       
|                                   |  | 5,635                              |  |                                           |       |                                                       
|                                   |  |                                    |  |                                           |       |                                                       
|Exercisable Stock Options:         |  |                                    |  |                                           |      
|$8.22 - $11.75                     |  | 672                                |  | $                                         | 11.69 |                                                       
|12.34 - 18.13                      |  | 427                                |  |                                           | 17.53 |                                                       
|18.75 - 28.02                      |  | 1,006                              |  |                                           | 21.21 |                                                       
|32.25 - 41.84                      |  | 409                                |  |                                           | 33.50 |                                                       
|                                   |  |                                    |  |                                           |       |                                                       
|                                   |  | 2,514                              |  |                                           |       |                                                       
|                                   |  |                                    |  |                                           |       |                                                       

20. Quarterly Results of Operations (Unaudited)

The following is a summary of the quarterly results of operations for the years ended December 2002 and 2001 (in thousands, except per share data):

|                              |                                               | First
Quarter |   | Second
Quarter |      | Third
Quarter |        | Fourth
Quarter
|----------------------------- | --------------------------------------------- | ------------- | - | -------------- | ---- | ------------- | ------ | --------------
|Year ended December 31, 2002: |                                               |               |   |                |      |               |        |               
|                              | Net revenues                                  |               | $ | 51,951         |      | $             | 68,596 |               
|                              | Net income                                    |               |   | 6,926          |      |               | 10,434 |               
|                              | Net income per common share:                  |               |   |                |      |               |        |               
|                              |                                               | Basic         |   |                | 0.06 |               |        | 0.10          
|                              |                                               | Diluted       |   |                | 0.06 |               |        | 0.09          
|                              | Comprehensive income                          |               |   | 6,926          |      |               | 10,434 |               
|Year ended December 31, 2001: |                                               |               |   |                |      |               |        |               
|                              | Net revenues                                  |               | $ | 47,796         |      | $             | 65,896 |               
|                              | Net income                                    |               |   | 3,618          |      |               | 10,246 |               
|                              | Net income per common sharebasic and diluted |               |   | 0.03           |      |               | 0.09   |               
|                              | Comprehensive income                          |               |   | 3,618          |      |               | 11,319 |               

21. Subsequent Events

On February 28, 2003, the Company paid the $15.0 million principal balance on the Credit Facility. The Company expects to terminate the Credit
Facility after the merger with Univision has been completed. Upon termination of the Credit Facility, Univision will pay the outstanding borrowings, if any, and the Company will fund future capital
needs through Univision.

55

---

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

56

---



PART III.

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning the executive officers of the Company and the current directors:

|Name                     |  | Position with Company                                        |  | Age
|------------------------ |  | ------------------------------------------------------------ |  | ---
|McHenry T. Tichenor, Jr. |  | Chairman of the Board, President and Chief Executive Officer |  | 47 
|Jeffrey T. Hinson        |  | Senior Vice President, Chief Financial Officer and Treasurer |  | 48 
|Gary B. Stone            |  | Senior Vice President and Chief Operating Officer            |  | 51 
|McHenry T. Tichenor      |  | Director                                                     |  | 70 
|Robert W. Hughes         |  | Director                                                     |  | 67 
|James M. Raines          |  | Director                                                     |  | 63 
|Ernesto Cruz             |  | Director                                                     |  | 48 

McHenry
T. Tichenor, Jr. has been the Chairman of the Board, President, Chief Executive Officer, and a director of the Company since February 14, 1997. From 1981 until
February 14, 1997, Mr. Tichenor was the President, Chief Executive Officer, and a director of Tichenor Media System, Inc. ("Tichenor Media"). McHenry T. Tichenor, Jr. is the son
of McHenry T. Tichenor.

Jeffrey
T. Hinson has served as the Senior Vice President and Chief Financial Officer of the Company since February 14, 1997. From October 1995 until February 14,
1997, Mr. Hinson served as the Chief Financial Officer, Treasurer, and a director of Tichenor Media.

Gary
B. Stone has served as the Senior Vice President and Chief Operating Officer of the Company since March 1, 2001 and Vice President and General Manager of the Los Angeles and
Houston radio
stations. Mr. Stone previously served as a Vice President with Tichenor Media and started his career with Tichenor in 1985.

McHenry
T. Tichenor has been a director and an employee of the Company since February 14, 1997. From 1981 until February 14, 1997, Mr. Tichenor served as the Vice
Chairman and a director of Tichenor Media. McHenry T. Tichenor is the father of McHenry T. Tichenor, Jr.

Mr. Hughes
became a director of the Company on February 14, 1997. Mr. Hughes is Chairman of Prime Management Group in Austin, Texas. In that capacity, he also serves
as Chairman of Prime New Ventures and Prime II Investments and has served in such positions for more than five years. Mr. Hughes also serves as Chairman of Grande Communications. For the past
35 years, he has primarily been involved in the cable television industry.

Mr. Raines
became a director of the Company on August 5, 1996. Mr. Raines is the President of James M. Raines & Company, a private investment firm, and has
served in such position for more than five years. Mr. Raines serves on the Board of Directors of Waddell & Reed Financial, Inc.

Mr. Cruz
became a director of the Company on August 5, 1996. Mr. Cruz is a Managing Director of Credit Suisse First Boston, Inc. and has served in this
position for more than five years. Mr. Cruz is also head of global equity capital markets of Credit Suisse First Boston, Inc. Mr. Cruz serves on the Group Executive Board of
Credit Suisse First Boston, Inc.

57

---

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16 of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers and persons who own more than 10% of
a registered class of the Company's equity securities to file various reports with the Securities and Exchange Commission concerning their holdings of, and transactions in, securities of the Company.
Copies of these filings must be furnished to the Company.

Based
solely on its review of the copies of such forms received by it, or written responses from certain reporting persons that no such forms were required to be filed by those persons,
the Company believes that during the year ended December 31, 2002, directors, executive officers and beneficial owners of more than 10% of the Company's Class A Common Stock were in
compliance with the applicable filing requirements except that Robert W. Hughes, a director of the Company, filed three statements of
changes in beneficial ownership regarding an aggregate of seven transactions after the filing deadline for such reports.

ITEM 11.EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning the compensation of each individual who served as Chief Executive Officer during the year ended
December 31, 2002, and each of the other executive officers whose total cash compensation exceeded $100,000 for services rendered in all capacities for the year ended December 31, 2002
(the "Named Executive Officers"):

|                            |  |      |  | Annual Compensation |         | Long-Term Compensation |   |         | 
|--------------------------- |  | ---- |  | ------------------- | ------- | ---------------------- | - | ------- | 
|
|
|
|McHenry T. Tichenor, Jr.    |  | 2002 |  | $                   | 400,000 |                        | $ | 621,155 | 
|Chairman, President and CEO |  | 2001 |  |                     | 300,000 |                        |   | 519,437 | 
|                            |  | 2000 |  |                     | 300,000 |                        |   | 581,653 | 
|Gary B. Stone               |  | 2002 |  |                     | 280,000 |                        |   | 314,653 | 
|Senior Vice President       |  | 2001 |  |                     | 354,062 |                        |   | 88,418  | 
|COO(4)                      |  | 2000 |  |                     | 500,000 |                        |   | 94,651  | 
|Jeffrey T. Hinson           |  | 2002 |  |                     | 300,000 |                        |   | 387,271 | 
|Senior Vice President       |  | 2001 |  |                     | 250,000 |                        |   | 212,802 | 
|and CFO                     |  | 2000 |  |                     | 250,000 |                        |   | 273,315 | 

---

58

---

Options

The following table sets forth certain information concerning options granted to the Named Executive Officers during the year ended December 31, 2002:

|                         |  | Individual Grants |  |     |   |  
|------------------------ |  | ----------------- |  | --- | - | -
|
|
|
|
|McHenry T. Tichenor, Jr. |  | 100,000           |  | 9.8 | % | $
|                         |  | 50,000            |  | 4.9 | % |  
|Gary B. Stone            |  | 40,000            |  | 3.9 | % |  
|Jeffrey T. Hinson        |  | 40,000            |  | 3.9 | % |  

The following table sets forth certain information regarding stock options exercised by the Named Executive Officers during the year ended
December 31, 2002, including the aggregate value of gains on the date of exercise. In addition, the table sets forth the number of shares covered by both exercisable and nonexercisable stock
options as of December 31, 2002. Also reported are the values of "in the money" options which represent the positive spread between the exercise price of any existing stock options and the
Common Stock price as of December 31, 2002.

|                         |  |   |  |   |  | Number of Securities
Underlying Unexercised
Options at Fiscal Year End (#) |  | Value of Unexercised
In-the-Money
Options at Fiscal Year End ($) | 
|------------------------ |  | - |  | - |  | -------------------------------------------------------------------------- |  | ---------------------------------------------------------------- | 
|
|
|McHenry T. Tichenor, Jr. |  |  |  |  |  | 210,334                                                                    |  | 220,666                                                          | 
|Gary B. Stone            |  |  |  |  |  | 101,760                                                                    |  | 155,732                                                          | 
|Jeffrey T. Hinson        |  |  |  |  |  | 177,332                                                                    |  | 170,668                                                          | 

Employment Agreements

On February 14, 1997, the Company entered into an Employment Agreement with McHenry T. Tichenor, Jr. to serve as President and Chief Executive Officer of
the Company. This employment agreement provided for a five year term at an annual base salary of $260,000 plus increases in the base salary and incentive compensation as determined by the Compensation
Committee of the Board of Directors. Upon termination by the Company without cause or by Mr. Tichenor for good reason, the Company was obligated to pay Mr. Tichenor a lump sum amount
equal to the estimated payments of salary and bonus remaining through the end of the term of the agreement. Furthermore, Mr. Tichenor's employment agreement provided that Mr. Tichenor
agreed not to compete with the Company for a period of one year following the date his employment agreement was terminated.

On
April 2, 2002, the Company entered into an Amended and Restated Employment Agreement with McHenry T. Tichenor, Jr. to serve as Chairman, President and Chief Executive Officer
of the Company. Mr. Tichenor's current employment agreement provides for a three year term which automatically renews for an additional two year term if neither the Company nor
Mr. Tichenor elect to terminate the agreement. Mr. Tichenor's annual base salary under the employment agreement is $400,000 which shall be increased annually by the Compensation
Committee by at least 5%. The employment agreement also provides for Mr. Tichenor to be awarded additional bonus compensation as determined by the Compensation Committee. The employment
agreement provides Mr. Tichenor with an initial grant of stock options to purchase 100,000 shares of Class A Common Stock. Upon

59

---

termination of the employment agreement by the Company without cause or by Mr. Tichenor for good reason, the Company is obligated to pay Mr. Tichenor three times the amount of his then
current annual base salary and prior year's bonus. Furthermore, Mr. Tichenor's employment agreement provides that Mr. Tichenor agrees not to compete with the Company for a minimum period
of one year following the date his employment is terminated.

On
March 1, 2001, the Company entered into an Employment, Nonsolicitation and Arbitration Agreement with Gary Stone to serve as the Senior Vice President and Chief Operating
Officer. Mr. Stone's agreement provides for a three-year term at an annual base salary of $262,500 plus profit sharing and a discretionary bonus. Increases in the base salary,
profit sharing and discretionary bonus are to be approved by the Compensation Committee. Mr. Stone's employment agreement provides for the Company to loan him up to $1.5 million. The
loan requires interest only payments at 6% annual interest and matures on July 22, 2006. On July 30, 2001 and September 11, 2001, the Company advanced Mr. Stone $400,000
and $767,000, respectively. As of December 31, 2002, Mr. Stone can borrow up to $235,603 more under the terms of the loan. The loan is secured by 130,000 shares of Class A Common
Stock owned by Mr. Stone. Upon termination by the Company without cause, the Company is obligated to either give Mr. Stone 180 days written notice or pay 180 days base
salary plus a pro rata portion of estimated bonuses, to be paid in a lump sum or six semi-monthly payments. Furthermore, Mr. Stone's employment agreement provides that
Mr. Stone agrees not to compete with the Company for a period of one year following the date his employment is terminated.

On
November 5, 2001, the Company entered into an Employment, Noncompetition and Arbitration Agreement with Jeffrey T. Hinson to serve as the Senior Vice President and Chief
Financial Officer. The employment agreement provides for a three-year term at an annual base salary of $300,000 and shall be increased 5% each January 1 during the term of the
employment agreement. Mr. Hinson's compensation also includes profit sharing and an annual bonus. The employee's base salary, profit sharing and annual bonus shall be reviewed by the
Compensation Committee not less frequently than on an annual basis. Mr. Hinson's cash compensation attributable to any calendar year (i.e., base salary and profit sharing paid during a calendar
year, plus the annual bonus attributable to such calendar year, but paid the following year) during the initial employment term (including calendar year 2001) shall not be less than $600,000.

Director Compensation

Each member of the Board of Directors other than McHenry T. Tichenor, Jr. and McHenry T. Tichenor is to receive an annual fee of $50,000, payable annually
in advance. McHenry T. Tichenor receives an annual director fee of $20,000, which is paid on a quarterly basis. The directors may elect to receive directors fees in cash or shares of the
Company's Class A Common Stock. Each non-employee director receives a one-time grant of 2,500 options of the Company's Class A Common Stock when they attend their
first meeting of the Board of Directors. These options are fully exercisable commencing six months from the date of grant and expire ten years after the date of grant. The Company also reimburses
directors for expenses related to attending board or committee meetings. In addition, in June 1998, March 1999, May 2000, October 2000, May 2001 and June 2002
each outside director was granted options to purchase 4,000, 5,000, 6,000, 6,000, 6,000 and 6,000 shares of Class A Common Stock, respectively. These options vested six months following their
date of grant.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding ownership of the Class A Common Stock as of December 31, 2002 by (i) each person
known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Class A Common Stock, (ii) each director of the Company,

60

---

(iii) the chief executive officer and each other current executive officers of the Company named in the Summary Compensation Table, and (iv) all directors and executive officers of the
Company as a group:

|Name                                                        |  | Amount and Nature of
Beneficial Ownership of
Class A Common Stock |        | Percent of Class
|----------------------------------------------------------- |  | ----------------------------------------------------------------- | ------ | ----------------
|McHenry T. Tichenor, Jr.                                    |  | 12,987,689                                                        | (1)    | 16.1            
|McHenry T. Tichenor                                         |  | 12,725,229                                                        | (2)    | 15.8            
|Warren W. Tichenor                                          |  | 12,832,555                                                        | (3)    | 15.9            
|Janus Capital Management, LLC                               |  | 5,358,820                                                         | (4)    | 6.7             
|Franklin Advisers, Inc.                                     |  | 4,604,300                                                         | (5)    | 5.7             
|Robert W. Hughes                                            |  | 59,000                                                            | (6)(7) | *               
|James M. Raines                                             |  | 30,000                                                            | (6)    | *               
|Ernesto Cruz                                                |  | 47,000                                                            | (6)(8) | *               
|Jeffrey T. Hinson                                           |  | 471,208                                                           | (6)    | *               
|Gary B. Stone                                               |  | 318,554                                                           | (6)    | *               
|All Directors and Executive Officers as a Group (7 persons) |  | 13,926,229                                                        |        | 17.3            

---

61

---

As
of December 31, 2002, Clear Channel and its affiliates owned no shares of Class A Common Stock. However, Clear Channel and its affiliates owned all of the outstanding
shares of the Company's Class B Common Stock (28,312,940 shares), which accounted for approximately a 26.0% interest in the common stock of the Company.

The
Compensation Committee believes that equity ownership by the executive officers, managers, and other employees of the Company provides incentive to build stockholder value and aligns
the interests of these employees with the interests of stockholders. Upon hiring executive officers, managers, and certain other key employees, the Option Committee, a subcommittee of the Compensation
Committee, typically approves stock option grants under the Incentive Plan, subject to applicable vesting periods. Thereafter, the Option Committee considers awarding additional grants, usually on an
annual basis, under the Incentive Plan. The Option Committee believes these additional annual grants will provide incentives for executive officers, managers, and key employees to remain with the
Company. Options are granted at the current market price of the Company's Class A Common Stock and, consequently, have value only if the price of the Company's Class A Common Stock
increases over the exercise price. The size of the initial and periodic grants to employees other than the CEO and the executive officers are proposed by the CEO, reviewed and, when appropriate,
revised and approved by the Option Committee. The Option Committee establishes the size of the initial and periodic grants to the CEO and the executive officers.

At
the 1997 Annual Meeting, the stockholders approved the Incentive Plan, which meets the requirements of Section 162(m) of the Internal Revenue Code. The Company's present
intention is that awards under the Incentive Plan comply with Section 162(m).

Securities
authorized for issuance under equity compensation plans as of December 31, 2002 are as follows:

|Plan category                                              |       | Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a) |           | Weighted-average
exercise price of
outstanding options
warrants and rights
(b) |       | Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a)
(c)
|---------------------------------------------------------- | ----- | ----------------------------------------------------------------------------------------------- | --------- | ------------------------------------------------------------------------------ | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plans approved by security holders     |       | 5,635,306                                                                                       |           | $                                                                              | 22.47 |                                                                                                                                               
|Equity compensation plans not approved by security holders |       |                                                                                                |           |                                                                                |      |                                                                                                                                               
|                                                           |       |                                                                                                 |           |                                                                                |       |                                                                                                                                               
|                                                           | Total |                                                                                                 | 5,635,306 |                                                                                | $     | 22.47                                                                                                                                         
|                                                           |       |                                                                                                 |           |                                                                                |       |                                                                                                                                               

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following transactions were entered into between the Company and certain current directors, officers and beneficial owners of five percent or more of the
Company's Class A Common Stock.

The
Company employs McHenry T. Tichenor to consult on various matters. For the year ended December 31, 2002, Mr. Tichenor's salary was $50,000.

Mr. Stone's
employment agreement provides for the Company to loan him up to $1.5 million. The loan requires interest only payments at 6% annual interest and matures on
July 22, 2006. On July 30, 2001 and September 11, 2001, the Company advanced Mr. Stone $400,000 and $767,000, respectively. As of December 31, 2002, Mr. Stone
can borrow up to $235,603 more under the terms of the loan. The loan is secured by 130,000 shares of Class A Common Stock owned by Mr. Stone.

62

---

The
Company engaged CSFB to advise the Company on the merger with Univision. Ernesto Cruz, a director of the Company, is employed by CSFB. In 2002, the Company paid CSFB
$2.0 million in fees for their services.

ITEM 14.CONTROLS AND PROCEDURES

Our principal executive and financial officers have concluded, based on their evaluation as of a date within 90 days before the filing of this
Form 10-K, that our disclosure controls and procedures (as defined in Rule 13a-14 of the Securities Exchange Act of 1934) are effective to ensure that information
we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and
include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our principal executive and
financial officers, as appropriate to allow timely decisions regarding required disclosure.

Subsequent
to our evaluation, there were no significant changes in internal controls or other factors that could significantly affect these internal controls.

63

---



PART IV.

ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



Hispanic Broadcasting Corporation and Subsidiaries  Valuation and Qualifying Accounts  For the years ended December 31, 2002, 2001 and 2000(in thousands)

|                                      |              |                                 |  | Additions |       |  |   |      
|------------------------------------- | ------------ | ------------------------------- |  | --------- | ----- |  | - | -----
|
|For the year ended December 31, 2002: |              |                                 |  |           |       |  |   |      
|                                      | Current:     |                                 |  |           |       |  |   |      
|                                      |              | Allowance for Doubtful Accounts |  | $         | 3,458 |  | $ | 2,378
|                                      | Non current: |                                 |  |           |       |  |   |      
|                                      |              | Allowance for Doubtful Accounts |  |           |      |  |   | 255  
|For the year ended December 31, 2001: |              |                                 |  |           |       |  |   |      
|                                      | Current:     |                                 |  |           |       |  |   |      
|                                      |              | Allowance for Doubtful Accounts |  |           | 3,181 |  |   | 4,289
|For the year ended December 31, 2000: |              |                                 |  |           |       |  |   |      
|                                      | Current:     |                                 |  |           |       |  |   |      
|                                      |              | Allowance for Doubtful Accounts |  |           | 1,855 |  |   | 3,757

|Exhibit
Number |  | Description                                                                                                                                                                                                                                                                                                     
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            |  | Agreement and Plan of Reorganization, dated June 11, 2002, by and among Univision Communications Inc., Univision Acquisition Corporation and Hispanic Broadcasting Corporation (incorporated by reference to Univision
Communications Inc. Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).

64

---

|2.2  |  | Univision Stockholder Support Agreement, dated June 11, 2002, by and among Univision Communications Inc., Hispanic Broadcasting Corporation, and A. Jerrold Perenchio (incorporated by reference to Univision Communications Inc. Current Report on Form
8-K, dated June 12, 2002, File No. 001-12223).                                                                                                                                                                                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.3  |  | HBC Stockholder Support Agreement, dated June 11, 2002, by and among Univision Communications Inc., Univision Acquisition Corporation, and the stockholders listed on Exhibit A thereto (incorporated by reference to Univision Communications Inc.
Current Report on Form 8-K, dated June 12, 2002, File No. 001-12223).                                                                                                                                                                             
|3.1  |  | Second Amended and Restated Certificate of Incorporation of the Company dated February 14, 1997 (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed March 3, 1997).                                                                                                                                                                                                                                                                                                             
|3.2  |  | Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated June 4, 1998 (incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q filed on November 12, 1998).                                                                                                                                                                                                                                                                          
|3.3  |  | Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated June 3, 1999 (incorporated by reference to Exhibit 3.3 to the Company's Form 10-Q filed on August 12, 1999).                                                                                                                                                                                                                                                                            
|3.4  |  | Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company dated May 25, 2000 (incorporated by reference to Exhibit 3.4 to the Company's Form 10-Q filed on August 11, 2000).                                                                                                                                                                                                                                                                            
|3.5  |  | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Amendment No. 3 to Form S-1 (Registration No. 33-78370) filed on July 8, 1994).                                                                                                                                                                                                                                                                                       
|4.1  |  | Specimen certificate for the Class A Common Stock (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Amendment No. 3 to Form S-1 (Registration No. 33-78370) filed on July 8, 1994).                                                                                                                                                                                                                                                                                
|4.2  |  | Specimen certificate for the Class B Common Stock (incorporated by reference to Exhibit 4.2 to the Company's Form 10-Q filed on August 13, 2002).                                                                                                                                                                                                                                                                                                                                                     
|10.1 |  | Registration Rights Agreement, dated February 14, 1997, by and among the Company, McHenry T. Tichenor, Sr., McHenry T. Tichenor, Jr., Warren W. Tichenor, William E. Tichenor, Jean T. Russell, McHenry T. Tichenor, Jr., as Custodian for David T.
Tichenor, Alta Subordinated Debt Partners III, L.P., Prime II Management, LP, PrimeComm, LP, Ricardo A. del Castillo, Jeffrey Hinson and David D. Lykes (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed March 3,
1997).
|10.2 |  | Employment Agreement, dated February 14, 1997, by and between the Company and McHenry T. Tichenor, Jr. (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed March 3, 1997).                                                                                                                                                                                                                                                                                                     
|10.3 |  | Amended and Restated Employment Agreement, dated April 2, 2002, by and between Hispanic Broadcasting Corporation and McHenry T. Tichenor, Jr. (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 15,
2002).                                                                                                                                                                                                                                                           
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

65

---

|10.4  |  | Amended and Restated Stockholders Agreement by and among the Company and each of the stockholders listed on the signature page thereto (incorporated by reference to Exhibit 10.7 to Amendment No. 2 of Schedule 13D of McHenry T.
Tichenor filed November 19, 2002).                                         
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5  |  | Amendment to Amended and Restated Stockholders Agreement by and among the Company and each of the stockholders listed on the signature page thereto (incorporated by reference to Exhibit 10.8 to Amendment No. 2 of Schedule 13D of
McHenry T. Tichenor filed November 19, 2002).                            
|10.6  |  | Registration Rights Agreement, dated February 14, 1997, by and among the Company and Clear Channel Communications, Inc. (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed March 3, 1997).                                                                                            
|10.7  |  | Credit Agreement among the Company and its subsidiaries, The Chase Manhattan Bank, as administrative agent, and certain other lenders, dated February 14, 1997 without Exhibits (Schedules omitted) (incorporated by reference to Exhibit 10.5 to the
Company's Form 8-K filed on May 14, 1997).              
|10.8  |  | Credit Agreement Amendment No. 1 among the Company and its subsidiaries, the Chase Manhattan Bank, as administrative agent, and certain other lenders, dated May 6, 1999 without Exhibits (Schedules omitted) (incorporated by reference to Exhibit 10.12
to the Company's Form 10-K filed on March 30, 2000).
|10.9  |  | Hispanic Broadcasting Corporation Long-Term Incentive Plan (incorporated by reference to Appendix A to the Company's Definitive Proxy Statement filed on April 24, 1997 (Commission File No. 000-24516)).                                                                                                     
|10.10 |  | Amendment to Long-Term Incentive Plan, dated March 31, 2003.                                                                                                                                                                                                                                                  
|10.11 |  | Hispanic Broadcasting Corporation Amended and Restated 1997 Employee Stock Purchase Plan (incorporated by reference to the Company's Form S-8 filed on December 31, 1997).                                                                                                                                    
|10.12 |  | Second Amended and Restated 1997 Employee Stock Purchase Plan, dated April 15, 2002 (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on August 13, 2002).                                                                                                                          
|10.13 |  | Employment, Nonsolicitation and Arbitration Agreement, dated March 1, 2001, by and between HBC Management Company, Inc. and Gary Stone (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 14, 2001).                                                                          
|10.14 |  | Employment, Noncompetition and Arbitration Agreement, dated November 5, 2001, by and between HBC Management Company, Inc. and Jeffrey T. Hinson (incorporated by reference to Exhibit 10.17 to the Company's Form 10-K filed on April 1,
2002).                                                               
|10.15 |  | Asset Purchase Agreement, dated January 2, 2003, by and among Big City Radio, Inc., Big City Radio-Chi, L.L.C. and HBC Illinois, Inc.                                                                                                                                                                         
|10.16 |  | First Amendment to Asset Purchase Agreement, dated January 9, 2003, by and among Big City Radio, Inc., Big City Radio-Chi, L.L.C. and HBC Illinois, Inc.                                                                                                                                                      
|10.17 |  | Stock Purchase Agreement, dated February 13, 2003, by and between Hispanic Broadcasting Corporation and Fundación Angel Ramos, Inc.                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                               

66

---

|10.18 |  | Asset Purchase Agreement, dated March 3, 2003, by and among First Broadcasting Investments, L.P., HBC Sacramento, Inc., HBC License Corporation and HBC Broadcasting Texas, L.P.
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.19 |  | Asset Purchase Agreement, dated March 17, 2003, by and among Simmons Lone Star Media, Ltd., Simmons-Austin, LLC, HBC Broadcasting Texas, L.P. and HBC License Corporation.      
|11    |  | Statement Regarding Computation of Per Share Earnings.                                                                                                                          
|21    |  | Subsidiaries of the Company.                                                                                                                                                    
|23    |  | Consent of KPMG LLP.                                                                                                                                                            
|24    |  | Power of Attorney (included on Signature Page).                                                                                                                                 

Registrant
agrees to furnish supplementally a copy of any omitted schedules to the Commission upon request.

The
Company filed a report on Form 8-K dated November 14, 2002, disclosing that McHenry T. Tichenor, Jr., Chief Executive Officer and Jeffrey T. Hinson, Chief
Financial Officer submitted unqualified certifications to the SEC, relating to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002,
pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

67

---



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 31, 2003.

| |  | HISPANIC BROADCASTING CORPORATION
| |  | ---------------------------------
| |  | By:                              

Each
person whose signature appears below authorizes McHenry T. Tichenor, Jr. and Jeffrey T. Hinson, or either of them, each of whom may act without joinder of the other, to execute in
the name of each such person who is then an officer or director of the Registrant and to file any amendments to this annual report on Form 10-K necessary or advisable to enable the
Registrant to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments
may make such changes in such report as such attorney-in-fact may deem appropriate.

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

|Name                                                |  | Title                                                                                      |  | Date          
|--------------------------------------------------- |  | ------------------------------------------------------------------------------------------ |  | --------------
|                                                    |  |                                                                                            |  |               
|/s/MCHENRY T. TICHENOR, JR.McHenry T. Tichenor, Jr. |  | President, Chief Executive Officer and
Chairman of the Board of Directors                  |  | March 31, 2003
|/s/JEFFREY T. HINSONJeffrey T. Hinson               |  | Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer) |  | March 31, 2003
|/s/DAVID P. GEROWDavid P. Gerow                     |  | Vice President, Controller and Secretary
(Principal Accounting Officer)                    |  | March 31, 2003
|/s/MCHENRY T. TICHENORMcHenry T. Tichenor           |  | Director                                                                                   |  | March 31, 2003
|/s/ROBERT W. HUGHESRobert W. Hughes                 |  | Director                                                                                   |  | March 31, 2003
|/s/JAMES M. RAINESJames M. Raines                   |  | Director                                                                                   |  | March 31, 2003
|/s/ERNESTO CRUZErnesto Cruz                         |  | Director                                                                                   |  | March 31, 2003

68

---

Certification

I,
McHenry T. Tichenor, Jr., certify that:

Date:
March 31, 2003

| | /s/MCHENRY T. TICHENOR, JR.McHenry T. Tichenor, Jr.
President and Chief Executive Officer
| | -----------------------------------------------------------------------------------------

---

Certification

I,
Jeffrey T. Hinson, certify that:

Date:
March 31, 2003

| | /s/JEFFREY T. HINSONJeffrey T. Hinson
Senior Vice President/Chief Financial Officer
Principal Financial Officer
| | ---------------------------------------------------------------------------------------------------------------

---