Univision Communications Inc. Announces Strong Third-Quarter Results; Effective Sales and Strong Programming Drive Growth and Improved Performance

Business Wire, Oct 27, 1998

LOS ANGELES--(BUSINESS WIRE)--Oct. 27, 1998--Univision Communications Inc. (NYSE:UVN) Tuesday announced substantial increases in net revenues and broadcast cash flow for the third quarter ended Sept. 30, 1998.

Fueled by the continuing strength of high-quality programming and improvements in the quality of its sales operations, Univision reported its eighth consecutive quarter of sustained growth since its initial public offering.

Net revenues increased to $138.9 million in the third quarter of 1998, a 22 percent increase over the prior year. EBITDA in the third quarter of 1998 increased by 15 percent to $47.1 million from $41.0 million in the third quarter of 1997.

As a result of the company's initial public offering in September 1996 and the related restructuring, the net program license fee payable to Univision's programming suppliers, Televisa and Venevision, increased from 13.0 percent of net revenues in the third quarter of 1997 to 14.8 percent of net revenues in the third quarter of 1998, exclusive of World Cup revenues which are not subject to the license fee.

Had the revised license fee been in effect in 1997, EBITDA would have increased by 20 percent in the third quarter to $47.1 million from $39.2 million in 1997's third quarter.

Net income available to common stockholders for the three- and nine-month periods ended Sept. 30 decreased from $24.9 million to $4.8 million and from $50.0 million to $2.0 million, respectively, due to a non-recurring second-quarter pre-tax charge of $42.6 million ($20.6 million net of both the related tax benefit and the increase in the annualized effective tax rate due to lower pre-tax income), resulting from a special bonus award to selected employees that was funded by a contribution from a majority stockholder.

On a comparable basis, excluding this non-recurring charge in 1998 and adjusting 1997 for the impact of a non-recurring tax benefit, net income available to common stockholders for the three- and nine-month periods would have increased by 33 percent from $6.7 million to $8.9 million and by 54 percent from $14.7 million to $22.6 million, respectively.

As a result, both basic and diluted earnings per common share on net income available to common stockholders decreased from $0.29 and $0.21 in the third quarter of 1997, respectively, to $0.06 and $0.04 for the third quarter of 1998, respectively.

For the nine months, basic and diluted earnings per common share on net income decreased from $0.59 and $0.43, respectively, to $0.02 each. Excluding the 1998 special bonus award and the 1997 non-recurring tax benefit, basic and diluted earnings per common share on net income available to common stockholders would have increased by 25 percent from $0.08 to $0.10 and by 33 percent from $0.06 to $0.08 for the third quarter in 1997 compared with 1998, respectively.

For the nine months, basic and diluted earnings per common share on net income would have increased by 53 percent from $0.17 to $0.26 and by 54 percent from $0.13 to $0.20.

"Univision's third-quarter performance demonstrates advertisers' increasing commitment to the Hispanic consumer and is the result of Univision's strategy of building a strong sales team," said Henry Cisneros, president and chief operating officer.

"Univision's upfront results, current sales pacings, record levels of new business sales, higher ratings levels and successful launches of new programs this fall have helped Univision differentiate itself from the rest of the broadcast industry and have firmly positioned the company to maintain its strong growth in the periods ahead."

George Blank, Univision's executive vice president and chief financial officer, said, "Univision's continuing ratings dominance of Spanish-language television and our ongoing success in attracting advertisers to the growing Hispanic market has resulted in another strong financial performance in the third quarter.

"Univision continues to outpace average growth rates in television advertising overall, as reflected by our 22 percent net revenue growth. Additionally, our 20 percent EBITDA growth on a comparable license fee basis demonstrates Univision's underlying rapid cash flow growth."

Univision Communications is the leading Spanish-language television broadcaster in the United States. Its operations include the Univision network, the most popular Spanish-language broadcast network in the U.S.; the Univision Television Group, which owns and operates 13 full-power and eight low-power television stations, including full-power stations in 12 of the top 15 Hispanic markets; and Galavision, the most-watched Spanish-language cable network in the country.

Visit Univision at www.univision.net and Galavision at www.galavision.com. -0-

                    Univision Communications Inc.
               Three- and Nine-Month Operating Results
              ($ in Millions, Except Per-Share Amounts)
                              (Unaudited)

                                Three Months Ended
                                     Sept. 30,
                               1998            1997        Change

Net Revenues                $  138.9       $   113.9         22%
Broadcast Cash Flow (BCF)(a)    50.3            43.8         15%
EBITDA(a,b)                     47.1            41.0         15%
Net Income                       5.0            25.1        (80%)
Net Income Available to
  Common Stockholders(c)         4.8(d)         24.9(e)     (81%)

Basic EPS:
Net income per share
  available to common
  stockholders                  0.06            0.29          --
Weighted average common
  shares outstanding            85.9            85.2          --

Diluted EPS:
Net income per share
  available to common
  stockholders                  0.04            0.21          --
Weighted average common
  shares outstanding           116.0           116.9          --


                                Nine Months Ended
                                     Sept. 30,
                               1998            1997        Change

Net Revenues                $  417.6       $   321.9         30%
Broadcast Cash Flow (BCF)(a)   140.8           116.7         21%
EBITDA(a,b)                    131.8           108.5         21%
Net Income                       2.5            50.4        (95%)
Net Income Available to
  Common Stockholders(c)         2.0(d)         50.0(e)     (96%)

Basic EPS:
Net income per share
  available to common
  stockholders                  0.02            0.59          --
Weighted average common
  shares outstanding            85.8            85.2          --

Diluted EPS:
Net income per share
  available to common
  stockholders                  0.02            0.43          --
Weighted average common
  shares outstanding           116.3           116.3          --

(a)  On May 13, 1998, a major stockholder contributed 1,354,665 shares
     of Class P common stock to the company, which were converted to
     Class A common shares and placed in the treasury. On May 27,
     1998, under the Univision Communications Inc. 1998 Stock Bonus
     Plan, the company granted 890,614 shares of Class A common stock
     to selected employees. These transactions resulted in a pre-tax
     income statement charge of $42.6 million, which consists of
     non-cash compensation of $27.6 million and required tax
     withholdings of $15.0 million, as well as an increase to paid-in
     capital of $45.0 million. The company has remitted the $15.0
     million of tax withholding. The company expects to receive a cash
     income tax benefit of approximately $14.0 million due to the
     deduction of the bonus payment. The net income effect on the
     three months ended Sept. 30, 1998, was $4.1 million resulting
     from an increase in the tax provision due to an increased annual
     effective tax rate. The net income effect for the nine months
     ended Sept. 30, 1998, was $20.6 million, net of both the $14.0
     million related tax benefit and an $8.0 million reduction in the
     tax provision resulting from an increase in the annualized
     effective tax rate due to lower pre-tax income. The company has
     retained the remaining 464,051 shares, with a book value of $17.4
     million, in its treasury. BCF and EBITDA exclude the total amount
     of this special bonus award of $42.6 million.

(b)  As a result of the restructuring, the net program license fee
     payable to Univision's programming suppliers, Televisa and
     Venevision, increased from 13.0% to 14.8% and 13.0% to 14.7% of
     net revenues for the three and nine months ended Sept. 30,
     1997 and 1998, respectively, exclusive of World Cup revenues
     which are not subject to the license fee. Had the revised license
     fee been in effect in 1997, EBITDA would have increased by 20% in
     the third quarter, from $39.2 million in 1997 to $47.1 million in
     1998 and by 27% in the nine months ended September, from $103.5
     million in 1997 to $131.8 million in 1998.

(c)  On a comparable basis, excluding the non-recurring special bonus
     award from 1998 and adjusting 1997 for the impact of a
     non-recurring tax benefit, net income available to common
     stockholders for the three- and nine-month periods in 1997 and
     1998 would have increased by 33% from $6.7 million to $8.9
     million and by 54% from $14.7 million to $22.6 million,
     respectively.

(d)  Includes the effect of a non-recurring special bonus award on net
     income of $4.1 million for the three months and $20.6 million for
     the nine months ended Sept. 30, 1998.

(e)  Includes a non-recurring tax benefit of $18.2 million.

(f)  Includes a non-recurring tax benefit of $35.3 million.


            Univision Communications Inc. and Subsidiaries
            Condensed Consolidated Statements of Operations
                            ($ In Millions)
                             (Unaudited)

                         Three Months Ended        Nine Months Ended
                             Sept. 30,                 Sept. 30,
                         1998         1997         1998         1997

Net revenues         $   138.9    $   113.9    $   417.6    $   321.9
Direct operating
  expenses                53.3         39.3        165.0        114.6
Selling, general and
  administrative
  expenses                35.3         30.8        111.8         90.6
Corporate charges          3.2          2.8          9.0          8.2
Depreciation and
  amortization            15.8         14.4         47.3         42.4
Operating income          31.3         26.6         84.5         66.1
Interest expense           9.1         10.0         27.8         30.4
Special Bonus Award         --           --         42.6           --
Non-recurring expense
  of acquired station
  reversal                  --           --           --         (1.0)
Equity loss in
  unconsolidated
  subsidiary               0.2           --          0.6           --
Amortization of
  deferred financing
  costs                    0.4          0.4          1.2          1.2
Income before taxes       21.6         16.2         12.3         35.5
Provision (benefit)
  for income taxes        16.6         (8.9)         9.8        (14.9)
Net income                 5.0         25.1          2.5         50.4
Preferred stock
  dividends               (0.2)        (0.2)        (0.5)        (0.4)
Net income available
  to common
  stockholders       $     4.8    $    24.9    $     2.0    $    50.0