Univision Communications Inc. (NYSE: UVN), the leading
Spanish-language media company in the United States, today
announced financial results for the third quarter ended September
30, 2006. Net revenue increased 7.8% to $536.1 million from $497.5
million in 2005. Pro forma operating income before depreciation and
amortization1 increased 12.2% to $202.5 million in 2006 from $180.5
million in 2005. Pro forma net income1 increased 22.2% to $96.8
million in 2006 from $79.2 million in 2005 and pro forma diluted
earnings per share1 increased 26.1% to $0.29 in 2006 from $0.23 in
2005. The television business was the main driver of the financial
results for the third quarter 2006, generating net revenue growth
of 14.8% and pro forma operating income before depreciation and
amortization1 growth of 23.3%. The advertising-related businesses,
which exclude the music business, grew third quarter 2006 net
revenue by 13.4% to $506.6 million from $446.7 million in 2005 and
pro forma operating income before depreciation and amortization1 by
19.3% to $204.2 million from $171.1 million in 2005. During the
third quarter 2006, the 2006 FIFA World Cup� contributed an
estimated $24.7 million of incremental net revenue and an estimated
$0.3 million of incremental pro forma operating income before
depreciation and amortization1. Excluding the estimated incremental
impact of the World Cup, third quarter 2006 net revenues increased
2.8% and pro forma operating income before depreciation and
amortization1 increased 12.1%. A. Jerrold Perenchio, Chairman and
Chief Executive Officer, said, �This was another successful quarter
for Univision, as reflected in our strong financial performance and
continuing ratings leadership. We are very pleased with the
momentum we are experiencing in the key areas of our business, as
we continue to benefit from the strength of our assets and the
rapidly increasing interest in Spanish-language media in the U.S.
We remain on track to complete the previously announced sale of
Univision during the first quarter of 2007.� Ray Rodriguez,
President and Chief Operating Officer, said, �Univision continues
to grow and deliver excellent results. The Univision Network
further strengthened its competitive position, delivering more
18-34 year old viewers than at least one of the major
English-language networks on four out of every five nights of the
third quarter. TeleFutura delivered double-digit audience growth in
primetime and total day among the major demographics, our radio
group achieved another quarter of strong ratings results, and
Univision.com was once again named the #1 Spanish-language website
by Simmons Research.� Andrew W. Hobson, Senior Executive Vice
President, Chief Financial Officer and Chief Strategic Officer,
said, �Univision achieved strong third quarter earnings, driven by
notable revenue growth in our advertising-related businesses. In
particular, our results were bolstered by our television business,
which delivered growth of 14.8% in net revenues and 23.3% in pro
forma operating income before depreciation and amortization2.� The
following tables set forth the Company�s unaudited financial
performance for the three and nine months ended September 30, 2006
and 2005 by segment (in millions): Three Months Ended September 30,
Net Revenues Operating Income (Loss) Before Depreciation and
Amortization2 � 2006� � 2005� Pro Forma 2006 � 2005� � Television $
394.2� $ 343.3� $ 159.6� $ 129.4� Radio 103.2� 96.9� 42.3� 41.6�
Music 29.5� 50.8� (1.7) 9.4� Internet � 9.2� � 6.5� � 2.3� � 0.1�
Consolidated $ 536.1� $ 497.5� $ 202.5� $ 180.5� Nine Months Ended
September 30, Net Revenues Operating Income (Loss) Before
Depreciation and Amortization2 � 2006� � 2005� Pro Forma 2006 �
2005� � Television $ 1,206.3� $ 992.3� $ 463.1� $ 349.7� Radio
280.0� 267.6� 105.5� 102.4� Music 107.0� 161.9� 0.3� 28.5� Internet
� 26.5� � 17.2� � 5.6� � (0.9) Consolidated $ 1,619.8� $ 1,439.0� $
574.5� $ 479.7� TELEVISION HIGHLIGHTS Univision Network The
following table sets forth the total primetime audience and
rankings of the country�s leading broadcast and cable television
networks for the third quarter 2006, as measured by Nielsen�s
National Television Index (NTI). Total U.S. Primetime Network
Audience Statistics 3rd Quarter 2006 � Rank* Network Adult 18-34
Avg. Audience (000) Adult 18-49 Avg. Audience (000) 1� FOX 1,602�
3,205� 2� NBC 1,259� 3,076� 3� ABC 1,142� 2,796� 4� CBS 1,111�
3,053� 5� UNIVISION 1,088� 1,894� 6� USA 509� 1,189� 7� UPN 486�
943� 8� MTV 461� 594� 9� WB 456� 899� 10� TBS 450� 879� � Source:
NTI, 06/26/06-09/24/06. Primetime defined as M-Sa 8-11p, Su 7-11p.
Note: the CW Network has been excluded due to the lack of data in
the third quarter (launched week of 9/18/06) *By Adults 18-34 The
Univision Network was once again solidly positioned as the #5
network in the country in primetime among all Adults 18-34, 18-49
and Total Viewers 2+ as measured by Nielsen�s NTI. On four out of
every five nights of the third quarter, Univision attracted more
total Adult viewers 18-34 than ABC, CBS, NBC or FOX. Univision was
the #2 network in the country in primetime among all Adults 18-24,
proving that Univision is more popular among these young adult
viewers than ABC, CBS, NBC, UPN and WB. Compared to all previous
third quarters, Univision achieved its second highest primetime and
total day Adult 18-49 audience levels in the 2006 third quarter.
Over the course of the third quarter, Univision increased
viewership 13% among Adults 18-34 and 14% among Adults 18-49 in
primetime. In July, Univision�s broadcast of the third annual
�Premios Juventud� (Youth Awards) set record-breaking audience
levels, reaching 10.4 million viewers and ranking as the #1 network
of the night in any language among all Adults 18-34 with more
viewers than the primetime lineups of ABC, CBS, NBC and FOX.
Viewership increased 12% among Adults 18-34, 17% among Adults
18-49, 13% among Total Viewers 2+, 44% among Teens 12-17 and 20%
among Kids 2-11, compared to the special�s broadcast last year.
Locally, Univision stations were ranked as the #1 station in any
language in primetime during the 2006 July Sweeps among Adults
18-34 in New York, Los Angeles, Dallas, Houston, San Antonio,
Sacramento, Phoenix, Fresno and Bakersfield, and among Adults 18-49
in New York, Los Angeles, Miami, Dallas, Houston, Phoenix,
Sacramento, Bakersfield and Fresno. In total day, Univision
stations were ranked as the #1 station in 13 major markets among
Adults 18-34, including the nation�s two largest markets � New York
and Los Angeles. TeleFutura Network The TeleFutura Network achieved
significant audience growth in the 2006 third quarter, increasing
primetime viewership 23% among Adults 18-34 and 17% among Adults
18-49, compared to third quarter last year. In total day,
TeleFutura�s viewership increased 17% among Adults 18-34 and 11%
among Adults 18-49. The Network�s audience growth was bolstered by
a slate of successful movies in primetime, in addition to very
strong audience levels for both the 4:00 p.m. weekday novela block,
which increased 62% among Adults 18-34 and 53% among Adults 18-49,
and the 10:00 p.m. weeknight mini-series, which increased 48% among
Adults 18-34 and 19% among Adults 18-49. In the third quarter,
TeleFutura was the #2 Spanish-language network, behind only
Univision, in early morning, weekend daytime and weekend primetime
among Hispanic Adults 18-34 and 18-49. Galavisi�n Network
Galavisi�n remained the #1 cable network among Hispanics during the
third quarter, attracting more Hispanic viewers 18-49 in primetime
than any other cable network, regardless of language. In the 2006
third quarter, Galavisi�n attracted more Adults 18-49 than in any
previous third quarter, increasing audience levels 8% in primetime
and 5% in total day, compared to third quarter last year.
Galavisi�n�s third quarter Adult 18-49 audience was nearly three
times the size of the combined audience of all other measured
Spanish-language cable networks in primetime and more than three
times the size of their combined audience in total day. RADIO
HIGHLIGHTS Univision Radio�s net revenue grew 6.5% in the third
quarter, out-performing the industry as a whole, which was flat, as
reported by the Radio Advertising Bureau. In the 2006 Arbitron
summer book, Univision Radio�s outstanding programming and
effective cross promotion with Univision�s local television
stations resulted in audience share growth among major demographics
in key markets compared to the summer book last year. In Los
Angeles, Univision increased its cluster share 28% among Adults
25-54 and 24% among Adults 18-34. KSCA and KLVE once again ranked
as the #1 and #2 stations in the market among all Adults 25-54 and,
for the first time since 2001, among all Persons 12+ (Hispanic and
Non-Hispanic) as well. Univision Radio�s Miami cluster audience
share also experienced notable growth, increasing Adult 25-54 and
18-34 shares 28% and 46%, respectively. In San Francisco, Houston,
San Diego, and Las Vegas, markets that have recently attracted new
Spanish-language competition, Univision Radio increased audience
share more than 30% among Adults 25-54. MUSIC HIGHLIGHTS Univision
Music Group maintained its solid #1 position in the U.S. Latin
music industry, with an average of 33 of the top 100 Latin album
titles sold during the 2006 third quarter, according to Nielsen
Soundscan. During the third quarter, Univision Music Group artists
received a total of 25 nominations for the 7th Annual Latin GRAMMY�
Awards, which will air tonight on the Univision Television Network.
Despite maintaining its leading position, Univision Music Group�s
significant financial downturn continued into the third quarter of
2006, which the Company attributes to underperforming releases,
slippage in the release schedule and a continued high level of
returns compounded by political and economic factors impacting
music sales in the industry. INTERNET HIGHLIGHTS Univision Online
continued to experience significant growth in the 2006 third
quarter, increasing page impressions 40% and unique visits 49%
compared to third quarter last year. Also in the 2006 third
quarter, Univision.com was named the most visited Spanish-language
website among Hispanic Internet users, according to a study
conducted by Simmons Research. The study found that
Spanish-dominant and bilingual Hispanics online visit Univision.com
two times more often than Yahoo! en Espa�ol and AOL Latino, four
times more often than MSN Latino and 20 times more often than
Terra.com. Univision.com, which now delivers 11 million unique
browsers per month, has remained the #1 Spanish-language website
since the first industry study of online Hispanics was conducted in
2001. NO EARNINGS CALL AND WEBCAST, DISCONTINUING EARNINGS GUIDANCE
As a result of Univision Communications� agreement to be acquired
for cash by an investor group including Madison Dearborn Partners,
Providence Equity Partners, Texas Pacific Group, Thomas H. Lee
Partners and Saban Capital Group, the Company will not conduct a
third quarter earnings conference call or webcast. Furthermore, the
Company does not intend to provide earnings guidance during the
pendency of the proposed acquisition. ABOUT UNIVISION Univision
Communications Inc. is the premier Spanish-language media company
in the United States. Its operations include Univision Network, the
most-watched Spanish-language broadcast television network in the
U.S. reaching 99% of U.S. Hispanic Households; TeleFutura Network,
a general-interest Spanish-language broadcast television network,
which was launched in 2002 and now reaches 87% of U.S. Hispanic
Households; Galavisi�n, the country�s leading Spanish-language
cable network; Univision Television Group, which owns and operates
62 television stations in major U.S. Hispanic markets and Puerto
Rico; Univision Radio, the leading Spanish-language radio group
which owns and/or operates 69 radio stations in 16 of the top 25
U.S. Hispanic markets and 4 stations in Puerto Rico; Univision
Music Group, which includes Univision Records, Fonovisa Records,�La
Calle Records and Mexico-based Disa Records as well as Fonomusic
and America Musical Publishing companies; and Univision Online, the
premier Spanish-language Internet destination in the U.S. located
at www.univision.com. Univision Communications also has a 50%
interest in TuTv, a joint venture formed to broadcast Televisa�s
pay television channels in the U.S., and a non-voting 14.9%
interest in Entravision Communications Corporation, a public
Spanish-language media company. Univision Communications is
headquartered in Los Angeles with television network operations in
Miami and television and radio stations and sales offices in major
cities throughout the United States. For more information, please
visit www.univision.net. Safe Harbor This document contains
forward-looking statements that involve risks and uncertainties,
including those relating to the Company's future success and
growth. Factors that could cause actual results to differ
materially from those expressed or implied by the forward-looking
statements include cancellations or reductions in advertising;
regional downturns in economic conditions in those areas where our
principal radio and television stations are located; changes in the
rules and regulations of the FCC; an increase in the preference
among Hispanics for English-language programming; the need for any
unanticipated expenses; competitive pressures from other
broadcasters and other entertainment and news media; unanticipated
interruptions in our broadcasting for any reason, including acts of
terrorism; write-downs of the carrying value of assets due to
impairment; failure to achieve profitability, growth or anticipated
cash flows from acquisitions; and delay or failure to close the
proposed acquisition. Actual results may differ materially due to
these risks and uncertainties as well as those described in the
Company's filings with the Securities and Exchange Commission. The
Company assumes no obligation to update forward-looking information
contained in this press release. RECONCILIATION OF PRO FORMA
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION, PRO FORMA
NET INCOME AND PRO FORMA DILUTED EARNINGS PER SHARE The Company
uses the key indicator of pro forma operating income before
depreciation and amortization primarily to evaluate the Company�s
operating performance and for planning and forecasting future
business operations. Operating income before depreciation and
amortization is commonly used as a measure of performance for
broadcast companies, which is used by investors to measure a
company�s ability to service debt and other cash needs, and
provides investors the opportunity to evaluate the Company�s
performance as it is viewed by management. This indicator is
presented on a pro forma basis to exclude Televisa litigation costs
and payments made under protest, strategic alternative costs,
stock-based compensation expense related to SFAS No. 123R
Accounting For Stock-Based Compensation and an asset impairment
charge. Pro forma net income and pro forma diluted earnings per
share are used by management to evaluate financial performance
without the effect of these charges, the gain from the sale of 7.2
million shares of Entravision stock and a tax benefit realized from
the reversal of the valuation allowance relating to the non
temporary decline in the fair value of the Entravision investment.
Pro forma operating income before depreciation and amortization,
pro forma net income and pro forma diluted earnings per share are
not, and should not be used as, indicators of or alternatives to
operating income, net income, diluted earnings per share or cash
flow as reflected in the consolidated financial statements, they
are not measures of financial performance under generally accepted
accounting principles (�GAAP�) and should not be considered in
isolation or as substitutes for measures of performance prepared in
accordance with GAAP. Since the definitions of pro forma operating
income before depreciation and amortization, pro forma net income
and pro forma diluted earnings per share may vary among companies
and industries they should not be used as measures of performance
among companies. The tables below set forth a reconciliation of pro
forma operating income before depreciation and amortization to
operating income for each segment and consolidated net income,
which are the most directly comparable GAAP financial measures.
Also, information reconciling pro forma net income and pro forma
diluted earnings per share to net income and diluted earnings per
share, which are the most directly comparable GAAP financial
measures, are presented. Unaudited In millions Three Months Ended
September 30, 2006 Consolidated Television Radio Music Internet �
Pro forma operating income (loss) before depreciation and
amortization $ 202.5� $ 159.6� $ 42.3� $ (1.7) $ 2.3� Depreciation
and amortization 22.9� 17.3� 3.4� 1.6� 0.6� Stock compensation
expense 3.2� 2.3� 0.8� -� 0.1� Televisa litigation costs and
payments made under protest 2.7� 2.7� -� -� -� Strategic
alternative costs � 3.8� � 3.7� � 0.1� � -� � -� Operating income
(loss) $ 169.9� $ 133.6� $ 38.0� $ (3.3) $ 1.6� Unaudited In
millions, except share and per share data Three Months Ended
September 30, 2006 As Reported Pro Forma Adjustments Pro Forma �
Operating income $ 169.9� $ 9.73 $ 179.6� Other (income) expense:
Interest expense, net 21.8� 21.8� Amortization of deferred
financing costs 0.6� 0.6� Stock dividend (0.5) (0.5) Equity income
in unconsolidated subsidiaries and other (0.6) (0.6) Gain on sale
of Entravision stock (0.2) 0.2� -� Noncontrolling interest in
variable interest entity � (0.9) � � (0.9) Income before taxes
149.7� 9.5� 159.2� Provision for income taxes � 61.6� � 0.84 �
62.4� Net income $ 88.1� $ 8.7� $ 96.8� � Diluted earnings per
share $ 0.26� $ 0.03� $ 0.29� Weighted average common shares
outstanding 338,601,630� 338,601,630� 338,601,630� Unaudited In
millions Three Months Ended September 30, 2005 Consolidated
Television Radio Music Internet � Operating income before
depreciation and amortization $ 180.5� $ 129.4� $ 41.6� $ 9.4� $
0.1� Depreciation and amortization � 22.7� � 16.8� � 2.9� � 2.5� �
0.5� Operating income (loss) 157.8� $ 112.6� $ 38.7� $ 6.9� $ (0.4)
Other (income) expense: Interest expense, net 22.1� Amortization of
deferred financing costs 0.8� Stock dividend (0.5) Equity income in
unconsolidated subsidiaries and other (0.5) Noncontrolling interest
in variable interest entities � 2.6� Income before taxes 133.3�
Provision for income taxes � 54.1� Net income $ 79.2� � Diluted
earnings per share $ 0.23� Weighted average common shares
outstanding 342,696,516� Unaudited In millions Nine Months Ended
September 30, 2006 Consolidated Television Radio Music Internet �
Pro forma operating income before depreciation and amortization $
574.5� $ 463.1� $ 105.5� $ 0.3� $ 5.6� Depreciation and
amortization 68.6� 51.5� 9.4� 6.1� 1.6� Stock compensation expense
9.3� 6.4� 2.6� 0.1� 0.2� Asset impairment charge 1.6� -� 1.6� -� -�
Televisa litigation costs and payments made under protest 10.6�
10.6� -� -� -� Strategic alternative costs � 11.2� � 11.1� � 0.1� �
-� � -� Operating income (loss) $ 473.2� $ 383.5� $ 91.8� $ (5.9) $
3.8� Unaudited In millions, except share and per share data Nine
Months Ended September 30, 2006 As Reported Pro Forma Adjustments
Pro Forma � Operating income $ 473.2� $ 32.75 $ 505.9� Other
(income) expense: Interest expense, net 69.6� 69.6� Amortization of
deferred financing costs 2.0� 2.0� Stock dividend (1.4) (1.4)
Equity income in unconsolidated subsidiaries and other (1.7) (1.7)
Gain on sales of Entravision stock (1.4) 1.46 -� Noncontrolling
interest in variable interest entity � 0.6� � 0.2� � 0.8� Income
before taxes 405.5� 31.1� 436.6� Provision for income taxes �
156.0� � 10.57 � 166.5� Net income $ 249.5� $ 20.6� $ 270.1� �
Diluted earnings per share $ 0.74� $ 0.06� $ 0.80� Weighted average
common shares outstanding 338,333,983� 338,333,983� 338,333,983�
Unaudited In millions Nine Months Ended September 30, 2005
Consolidated Television Radio Music Internet � Operating income
(loss) before depreciation and amortization $ 479.7� $ 349.7� $
102.4� $ 28.5� $ (0.9) Depreciation and amortization � 69.9� �
49.8� � 8.9� � 9.9� � 1.3� Operating income (loss) $ 409.8� $
299.9� $ 93.5� $ 18.6� $ (2.2) Unaudited In millions, except share
and per share data Nine Months Ended September 30, 2005 As Reported
Pro Forma Adjustments Pro Forma � Operating income $ 409.8� $ -� $
409.8� Other (income) expense: Interest expense, net 60.5� 60.5�
Amortization of deferred financing costs 2.5� 2.5� Stock dividend
(1.4) (1.4) Equity income in unconsolidated subsidiaries and other
(0.8) (0.8) Nontemporary decline in fair value of investment 48.3�
(48.3) -� Noncontrolling interest in variable interest entities �
1.9� � -� � 1.9� Income before taxes 298.8� 48.3� 347.1� Provision
for income taxes � 139.1� � -� � 139.1� Net income $ 159.7� $ 48.3�
$ 208.0� � Diluted earnings per share $ 0.46� $ 0.14� $ 0.60�
Weighted average common shares outstanding 347,732,460�
347,732,460� 347,732.460� The following table reconciles pro forma
operating income before depreciation and amortization excluding the
estimated incremental impact of the World Cup to net income and
diluted earnings per share for the three months ended September 30,
2006: Unaudited In millions � Pro forma operating income before
depreciation and amortization excluding the estimated incremental
impact of the World Cup $ 202.2� Operating (income) expense
adjustments: Incremental impact of the World Cup (0.3) Depreciation
and amortization 22.9� Stock compensation expense 3.2� Televisa
litigation costs and payments made under protest 2.7� Strategic
alternative costs � 3.8� Operating income 169.9� Other (income)
expense: Interest expense, net 21.8� Amortization of deferred
financing costs 0.6� Stock dividend (0.5) Equity income in
unconsolidated subsidiaries and other (0.6) Gain on sale of
Entravision stock (0.2) Noncontrolling interest in variable
interest entity � (0.9) Income before taxes 149.7� Provision for
income taxes � 61.6� Net income $ 88.1� � Diluted earnings per
share $ 0.26� Weighted average common shares outstanding
338,601,630� UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In
millions, except share and per share data) (Unaudited) � Three
Months Ended September 30, Nine Months Ended September 30, � 20068
� 2005� � 20068 � 2005� � Net revenues: Television, radio and
Internet services $ 506.6� $ 446.7� $ 1,512.8� $ 1,277.1� Music
products and publishing � 29.5� � 50.8� � 107.0� � 161.9� Total net
revenues � 536.1� � 497.5� � 1,619.8� � 1,439.0� � Direct operating
expenses of television, radio and Internet services 172.2� 151.0�
549.3� 451.5� Direct operating expenses of music products and
publishing � 20.1� � 27.3� � 69.1� � 91.8� Total direct operating
expenses (excluding depreciation and amortization) 192.3� 178.3�
618.4� 543.3� Selling, general and administrative expenses
(excluding depreciation and amortization) 151.0� 138.7� 459.6�
416.0� Depreciation and amortization � 22.9� � 22.7� � 68.6� �
69.9� Operating expenses � 366.2� � 339.7� � 1,146.6� � 1,029.2�
Operating income 169.9� 157.8� 473.2� 409.8� Other expense
(income): Interest expense, net 21.8� 22.1� 69.6� 60.5�
Amortization of deferred financing costs 0.6� 0.8� 2.0� 2.5� Stock
dividend (0.5) (0.5) (1.4) (1.4) Equity income in unconsolidated
subsidiaries and other (0.6) (0.5) (1.7) (0.8) Non temporary
decline in fair value of investment -� -� -� 48.3� Gain on sales of
Entravision stock (0.2) -� (1.4) -� Noncontrolling interest in
variable interest entities � (0.9) � 2.6� � 0.6� � 1.9� Income
before income taxes 149.7� 133.3� 405.5� 298.8� Provision for
income taxes � 61.6� � 54.1� � 156.0� � 139.1� Net income 88.1�
79.2� 249.5� 159.7� Other comprehensive income (loss): Currency
translation adjustment � 0.2� � -� � (1.7) � 0.2� Comprehensive
income $ 88.3� $ 79.2� $ 247.8� $ 159.9� Net income per common
share: Basic $ 0.29� $ 0.25� $ 0.82� $ 0.50� Diluted $ 0.26� $
0.23� $ 0.74� $ 0.46� Weighted average common shares outstanding:
Basic 306.5� 313.6� 305.8� 318.5� Diluted 338.6� 342.7� 338.3�
347.7� UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (In millions, except share and per share data) �
September 30, 2006 December 31, 2005 ASSETS (Unaudited) Current
assets: Cash and cash equivalents $ 250.7� $ 99.4� Accounts
receivable, net 454.1� 395.5� Program rights 29.6� 29.9� Income
taxes -� 3.2� Deferred tax assets 29.1� 23.1� Prepaid expenses and
other � 44.9� � 82.5� Total current assets 808.4� 633.6� � Property
and equipment, net 591.7� 563.9� Intangible assets, net 4,324.5�
4,271.6� Goodwill 2,265.0� 2,231.2� Deferred financing costs, net
6.5� 7.1� Program rights 17.4� 26.0� Investments in equity method
investees 54.4� 54.6� Investments in cost method investees 161.0�
299.8� Other assets � 31.5� � 40.5� Total assets $ 8,260.4� $
8,128.3� � LIABILITIES AND STOCKHOLDERS� EQUITY Current
liabilities: Accounts payable and accrued liabilities $ 244.2� $
283.5� Income taxes 25.1� -� Accrued interest 19.5� 25.7� Accrued
license fees 17.8� 20.5� Program rights obligations 18.6� 15.8�
Current portion of long-term debt and capital lease obligations �
253.8� � 564.0� Total current liabilities 579.0� 909.5� � Long-term
debt 1,043.5� 935.5� Capital lease obligations 46.2� 33.8� Program
rights obligations 14.2� 20.9� Deferred tax liabilities 1,055.3�
1,019.8� Other long-term liabilities � 60.6� � 60.0� Total
liabilities $ 2,798.8� $ 2,979.5� � Noncontrolling interest in
variable interest entity � 51.9� � 57.9� � Stockholders� equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; no
shares issued or outstanding -� -� Common stock, $0.01 par value;
1,040,000,000 shares authorized; 307,625,799 shares issued and
307,624,585 shares outstanding in 2006 and 304,982,531 shares
issued and outstanding in 2005 3.1� 3.0� Paid-in-capital 4,202.3�
4,133.9� Deferred compensation -� (1.3) Retained earnings 1,206.0�
956.5� Accumulated other comprehensive losses � (1.7) � (1.2) Total
stockholders� equity � 5,409.7� � 5,090.9� Total liabilities and
stockholders� equity $ 8,260.4� $ 8,128.3� UNIVISION COMMUNICATIONS
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In
millions) (Unaudited) � Nine Months Ended September 30, � 2006� �
2005� � Net income $ 249.5� $ 159.7� Adjustments to reconcile net
income to net cash from operating activities: Depreciation 61.6�
59.0� Amortization of intangible assets and deferred financing
costs 9.0� 13.4� Deferred income taxes 38.9� 33.8� Stock dividend
(1.4) (1.4) Non temporary decline in fair value of investment -�
48.3� Noncontrolling interest in variable interest entities 0.6�
1.9� Equity income in unconsolidated subsidiaries (1.5) (0.8) Loss
(gain) on sale of property and equipment 0.2� (1.7) Gain on sales
of Entravision stock (1.4) -� Share-based compensation 9.3� -�
Earnings distribution from equity investments 0.4� (3.8) Other
non-cash items 1.0� 0.9� Changes in operating assets and
liabilities, net of assets acquired and liabilities assumed:
Accounts receivable, net (57.7) (42.6) Program rights 8.8� 1.9�
Deferred tax assets (6.0) -� Prepaid expenses and other 38.0� 9.9�
Accounts payable and accrued liabilities (29.6) 28.4� Income taxes
receivable 3.2� -� Income taxes payable 23.4� 13.6� Income tax
benefit from share-based awards -� 3.8� Accrued interest (6.2)
16.3� Accrued license fees (2.7) 6.0� Program rights obligations
(3.9) (8.9) Other, net � (2.7) � (7.3) Net cash provided by
operating activities � 330.8� � 330.4� � Cash flow from investing
activities: Acquisitions, net of acquired cash (12.7) (219.7)
Proceeds from sales of Entravision stock 52.7� -� Capital
expenditures (61.8) (65.1) Distributions to Disa partner (4.8)
(1.9) Proceeds from sale of property and equipment -� 5.1� Other,
net � -� � (1.4) Net cash used in investing activities � (26.6) �
(283.0) � Cash flow from financing activities: Proceeds from
issuance of long-term debt 375.0� 333.0� Repayment of long-term
debt (587.0) (96.5) Proceeds from stock options exercised 40.5�
4.6� Purchase of treasury shares -� (392.6) Income tax benefit from
stock-based awards 20.0� -� Deferred financing costs � (1.4) � -�
Net cash used in financing activities � (152.9) � (151.5) � Net
increase (decrease) in cash 151.3� (104.1) Cash and cash
equivalents, beginning of period � 99.4� � 189.9� Cash and cash
equivalents, end of period $ 250.7� $ 85.8� � Supplemental
disclosure of cash flow information: Interest paid $ 45.6� $ 56.4�
Income taxes paid $ 78.2� $ 66.5� 1 Operating income before
depreciation and amortization is presented on a pro forma basis and
excludes certain charges totaling $9.7 and $32.7 million for the
three and nine months ended September 30, 2006, respectively. Net
income and diluted earnings per share in 2006 are presented on a
pro forma basis to exclude net after tax charges totaling $8.7 and
$20.6 million for the three and nine months ended September 30,
2006, respectively. See pages 6 through 9 for a reconciliation of
non-GAAP (Generally Accepted Accounting Principles) terms and pro
forma measures to the most directly comparable GAAP financial
measure. 2 Operating income before depreciation and amortization is
presented on a pro forma basis and excludes certain charges
totaling $9.7 and $32.7 million for the three and nine months ended
September 30, 2006, respectively. Net income and diluted earnings
per share in 2006 are presented on a pro forma basis to exclude net
after tax charges totaling $8.7 and $20.6 million for the three and
nine months ended September 30, 2006, respectively. See pages 6
through 9 for a reconciliation of non-GAAP (Generally Accepted
Accounting Principles) terms and pro forma measures to the most
directly comparable GAAP financial measure. 3 For the three months
ended September 30, 2006, the Company incurred charges of $3.8
million for strategic alternative costs, $2.7 million for Televisa
litigation costs and payments made under protest and $3.2 million
for stock-based compensation expense related to SFAS No. 123R. 4
The pro forma adjustment reflects the tax impact of the pretax pro
forma adjustments. 5 For the nine months ended September 30, 2006,
the Company incurred charges of $10.6 million for Televisa
litigation costs and payments made under protest, $11.2 million for
strategic alternative costs, $9.3 million for stock-based
compensation expense related to SFAS No. 123R and $1.6 million for
an asset impairment charge. 6 The Company recognized a gain of $1.4
million from the sale of 7.2 million shares of Entravision stock
for the nine months ended September 30, 2006. 7 The pro forma
adjustment reflects the tax impact of the pretax pro forma
adjustments. 8 The 2006 financial information includes a charge for
Televisa litigation costs, strategic alternative costs, stock-based
compensation expense related to SFAS No. 123R, an asset impairment
charge, a gain from the sale of 7.2 million shares of Entravision
stock and the tax benefit realized from the reversal of the
valuation allowance relating to the non temporary decline in the
fair value of the Entravision investment. Univision Communications
Inc. (NYSE: UVN), the leading Spanish-language media company in the
United States, today announced financial results for the third
quarter ended September 30, 2006. Net revenue increased 7.8% to
$536.1 million from $497.5 million in 2005. Pro forma operating
income before depreciation and amortization(1) increased 12.2% to
$202.5 million in 2006 from $180.5 million in 2005. Pro forma net
income(1) increased 22.2% to $96.8 million in 2006 from $79.2
million in 2005 and pro forma diluted earnings per share(1)
increased 26.1% to $0.29 in 2006 from $0.23 in 2005. The television
business was the main driver of the financial results for the third
quarter 2006, generating net revenue growth of 14.8% and pro forma
operating income before depreciation and amortization(1) growth of
23.3%. The advertising-related businesses, which exclude the music
business, grew third quarter 2006 net revenue by 13.4% to $506.6
million from $446.7 million in 2005 and pro forma operating income
before depreciation and amortization(1) by 19.3% to $204.2 million
from $171.1 million in 2005. During the third quarter 2006, the
2006 FIFA World Cup(TM) contributed an estimated $24.7 million of
incremental net revenue and an estimated $0.3 million of
incremental pro forma operating income before depreciation and
amortization(1). Excluding the estimated incremental impact of the
World Cup, third quarter 2006 net revenues increased 2.8% and pro
forma operating income before depreciation and amortization(1)
increased 12.1%. A. Jerrold Perenchio, Chairman and Chief Executive
Officer, said, "This was another successful quarter for Univision,
as reflected in our strong financial performance and continuing
ratings leadership. We are very pleased with the momentum we are
experiencing in the key areas of our business, as we continue to
benefit from the strength of our assets and the rapidly increasing
interest in Spanish-language media in the U.S. We remain on track
to complete the previously announced sale of Univision during the
first quarter of 2007." Ray Rodriguez, President and Chief
Operating Officer, said, "Univision continues to grow and deliver
excellent results. The Univision Network further strengthened its
competitive position, delivering more 18-34 year old viewers than
at least one of the major English-language networks on four out of
every five nights of the third quarter. TeleFutura delivered
double-digit audience growth in primetime and total day among the
major demographics, our radio group achieved another quarter of
strong ratings results, and Univision.com was once again named the
#1 Spanish-language website by Simmons Research." Andrew W. Hobson,
Senior Executive Vice President, Chief Financial Officer and Chief
Strategic Officer, said, "Univision achieved strong third quarter
earnings, driven by notable revenue growth in our
advertising-related businesses. In particular, our results were
bolstered by our television business, which delivered growth of
14.8% in net revenues and 23.3% in pro forma operating income
before depreciation and amortization(2)." The following tables set
forth the Company's unaudited financial performance for the three
and nine months ended September 30, 2006 and 2005 by segment (in
millions): -0- *T Three Months Ended September 30,
-------------------------------------------------------- Operating
Income (Loss) Before Depreciation and Net Revenues Amortization(2)
--------------------------- ---------------------------- Pro Forma
2006 2005 2006 2005 ------------- ------------- --------------
------------- Television $ 394.2 $ 343.3 $ 159.6 $ 129.4 Radio
103.2 96.9 42.3 41.6 Music 29.5 50.8 (1.7) 9.4 Internet 9.2 6.5 2.3
0.1 ------------- ------------- -------------- -------------
Consolidated $ 536.1 $ 497.5 $ 202.5 $ 180.5 =============
============= ============== ============= *T -0- *T Nine Months
Ended September 30,
-------------------------------------------------------- Operating
Income (Loss) Before Depreciation and Net Revenues Amortization(2)
--------------------------- ---------------------------- Pro Forma
2006 2005 2006 2005 ------------- ------------- --------------
------------- Television $ 1,206.3 $ 992.3 $ 463.1 $ 349.7 Radio
280.0 267.6 105.5 102.4 Music 107.0 161.9 0.3 28.5 Internet 26.5
17.2 5.6 (0.9) ------------- ------------- --------------
------------- Consolidated $ 1,619.8 $ 1,439.0 $ 574.5 $ 479.7
============= ============= ============== ============= *T
TELEVISION HIGHLIGHTS Univision Network The following table sets
forth the total primetime audience and rankings of the country's
leading broadcast and cable television networks for the third
quarter 2006, as measured by Nielsen's National Television Index
(NTI). -0- *T Total U.S. Primetime Network Audience Statistics 3rd
Quarter 2006 Adult 18-34 Adult 18-49 Rank* Network Avg. Audience
(000) Avg. Audience (000) ----- --------- -----------------------
----------------------- 1 FOX 1,602 3,205 2 NBC 1,259 3,076 3 ABC
1,142 2,796 4 CBS 1,111 3,053 5 UNIVISION 1,088 1,894 6 USA 509
1,189 7 UPN 486 943 8 MTV 461 594 9 WB 456 899 10 TBS 450 879
Source: NTI, 06/26/06-09/24/06. Primetime defined as M-Sa 8-11p, Su
7-11p. Note: the CW Network has been excluded due to the lack of
data in the third quarter (launched week of 9/18/06) *By Adults
18-34 *T The Univision Network was once again solidly positioned as
the #5 network in the country in primetime among all Adults 18-34,
18-49 and Total Viewers 2+ as measured by Nielsen's NTI. On four
out of every five nights of the third quarter, Univision attracted
more total Adult viewers 18-34 than ABC, CBS, NBC or FOX. Univision
was the #2 network in the country in primetime among all Adults
18-24, proving that Univision is more popular among these young
adult viewers than ABC, CBS, NBC, UPN and WB. Compared to all
previous third quarters, Univision achieved its second highest
primetime and total day Adult 18-49 audience levels in the 2006
third quarter. Over the course of the third quarter, Univision
increased viewership 13% among Adults 18-34 and 14% among Adults
18-49 in primetime. In July, Univision's broadcast of the third
annual "Premios Juventud" (Youth Awards) set record-breaking
audience levels, reaching 10.4 million viewers and ranking as the
#1 network of the night in any language among all Adults 18-34 with
more viewers than the primetime lineups of ABC, CBS, NBC and FOX.
Viewership increased 12% among Adults 18-34, 17% among Adults
18-49, 13% among Total Viewers 2+, 44% among Teens 12-17 and 20%
among Kids 2-11, compared to the special's broadcast last year.
Locally, Univision stations were ranked as the #1 station in any
language in primetime during the 2006 July Sweeps among Adults
18-34 in New York, Los Angeles, Dallas, Houston, San Antonio,
Sacramento, Phoenix, Fresno and Bakersfield, and among Adults 18-49
in New York, Los Angeles, Miami, Dallas, Houston, Phoenix,
Sacramento, Bakersfield and Fresno. In total day, Univision
stations were ranked as the #1 station in 13 major markets among
Adults 18-34, including the nation's two largest markets - New York
and Los Angeles. TeleFutura Network The TeleFutura Network achieved
significant audience growth in the 2006 third quarter, increasing
primetime viewership 23% among Adults 18-34 and 17% among Adults
18-49, compared to third quarter last year. In total day,
TeleFutura's viewership increased 17% among Adults 18-34 and 11%
among Adults 18-49. The Network's audience growth was bolstered by
a slate of successful movies in primetime, in addition to very
strong audience levels for both the 4:00 p.m. weekday novela block,
which increased 62% among Adults 18-34 and 53% among Adults 18-49,
and the 10:00 p.m. weeknight mini-series, which increased 48% among
Adults 18-34 and 19% among Adults 18-49. In the third quarter,
TeleFutura was the #2 Spanish-language network, behind only
Univision, in early morning, weekend daytime and weekend primetime
among Hispanic Adults 18-34 and 18-49. Galavision Network
Galavision remained the #1 cable network among Hispanics during the
third quarter, attracting more Hispanic viewers 18-49 in primetime
than any other cable network, regardless of language. In the 2006
third quarter, Galavision attracted more Adults 18-49 than in any
previous third quarter, increasing audience levels 8% in primetime
and 5% in total day, compared to third quarter last year.
Galavision's third quarter Adult 18-49 audience was nearly three
times the size of the combined audience of all other measured
Spanish-language cable networks in primetime and more than three
times the size of their combined audience in total day. RADIO
HIGHLIGHTS Univision Radio's net revenue grew 6.5% in the third
quarter, out-performing the industry as a whole, which was flat, as
reported by the Radio Advertising Bureau. In the 2006 Arbitron
summer book, Univision Radio's outstanding programming and
effective cross promotion with Univision's local television
stations resulted in audience share growth among major demographics
in key markets compared to the summer book last year. In Los
Angeles, Univision increased its cluster share 28% among Adults
25-54 and 24% among Adults 18-34. KSCA and KLVE once again ranked
as the #1 and #2 stations in the market among all Adults 25-54 and,
for the first time since 2001, among all Persons 12+ (Hispanic and
Non-Hispanic) as well. Univision Radio's Miami cluster audience
share also experienced notable growth, increasing Adult 25-54 and
18-34 shares 28% and 46%, respectively. In San Francisco, Houston,
San Diego, and Las Vegas, markets that have recently attracted new
Spanish-language competition, Univision Radio increased audience
share more than 30% among Adults 25-54. MUSIC HIGHLIGHTS Univision
Music Group maintained its solid #1 position in the U.S. Latin
music industry, with an average of 33 of the top 100 Latin album
titles sold during the 2006 third quarter, according to Nielsen
Soundscan. During the third quarter, Univision Music Group artists
received a total of 25 nominations for the 7th Annual Latin
GRAMMY(R) Awards, which will air tonight on the Univision
Television Network. Despite maintaining its leading position,
Univision Music Group's significant financial downturn continued
into the third quarter of 2006, which the Company attributes to
underperforming releases, slippage in the release schedule and a
continued high level of returns compounded by political and
economic factors impacting music sales in the industry. INTERNET
HIGHLIGHTS Univision Online continued to experience significant
growth in the 2006 third quarter, increasing page impressions 40%
and unique visits 49% compared to third quarter last year. Also in
the 2006 third quarter, Univision.com was named the most visited
Spanish-language website among Hispanic Internet users, according
to a study conducted by Simmons Research. The study found that
Spanish-dominant and bilingual Hispanics online visit Univision.com
two times more often than Yahoo! en Espanol and AOL Latino, four
times more often than MSN Latino and 20 times more often than
Terra.com. Univision.com, which now delivers 11 million unique
browsers per month, has remained the #1 Spanish-language website
since the first industry study of online Hispanics was conducted in
2001. NO EARNINGS CALL AND WEBCAST, DISCONTINUING EARNINGS GUIDANCE
As a result of Univision Communications' agreement to be acquired
for cash by an investor group including Madison Dearborn Partners,
Providence Equity Partners, Texas Pacific Group, Thomas H. Lee
Partners and Saban Capital Group, the Company will not conduct a
third quarter earnings conference call or webcast. Furthermore, the
Company does not intend to provide earnings guidance during the
pendency of the proposed acquisition. ABOUT UNIVISION Univision
Communications Inc. is the premier Spanish-language media company
in the United States. Its operations include Univision Network, the
most-watched Spanish-language broadcast television network in the
U.S. reaching 99% of U.S. Hispanic Households; TeleFutura Network,
a general-interest Spanish-language broadcast television network,
which was launched in 2002 and now reaches 87% of U.S. Hispanic
Households; Galavision, the country's leading Spanish-language
cable network; Univision Television Group, which owns and operates
62 television stations in major U.S. Hispanic markets and Puerto
Rico; Univision Radio, the leading Spanish-language radio group
which owns and/or operates 69 radio stations in 16 of the top 25
U.S. Hispanic markets and 4 stations in Puerto Rico; Univision
Music Group, which includes Univision Records, Fonovisa Records, La
Calle Records and Mexico-based Disa Records as well as Fonomusic
and America Musical Publishing companies; and Univision Online, the
premier Spanish-language Internet destination in the U.S. located
at www.univision.com. Univision Communications also has a 50%
interest in TuTv, a joint venture formed to broadcast Televisa's
pay television channels in the U.S., and a non-voting 14.9%
interest in Entravision Communications Corporation, a public
Spanish-language media company. Univision Communications is
headquartered in Los Angeles with television network operations in
Miami and television and radio stations and sales offices in major
cities throughout the United States. For more information, please
visit www.univision.net. Safe Harbor This document contains
forward-looking statements that involve risks and uncertainties,
including those relating to the Company's future success and
growth. Factors that could cause actual results to differ
materially from those expressed or implied by the forward-looking
statements include cancellations or reductions in advertising;
regional downturns in economic conditions in those areas where our
principal radio and television stations are located; changes in the
rules and regulations of the FCC; an increase in the preference
among Hispanics for English-language programming; the need for any
unanticipated expenses; competitive pressures from other
broadcasters and other entertainment and news media; unanticipated
interruptions in our broadcasting for any reason, including acts of
terrorism; write-downs of the carrying value of assets due to
impairment; failure to achieve profitability, growth or anticipated
cash flows from acquisitions; and delay or failure to close the
proposed acquisition. Actual results may differ materially due to
these risks and uncertainties as well as those described in the
Company's filings with the Securities and Exchange Commission. The
Company assumes no obligation to update forward-looking information
contained in this press release. RECONCILIATION OF PRO FORMA
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION, PRO FORMA
NET INCOME AND PRO FORMA DILUTED EARNINGS PER SHARE The Company
uses the key indicator of pro forma operating income before
depreciation and amortization primarily to evaluate the Company's
operating performance and for planning and forecasting future
business operations. Operating income before depreciation and
amortization is commonly used as a measure of performance for
broadcast companies, which is used by investors to measure a
company's ability to service debt and other cash needs, and
provides investors the opportunity to evaluate the Company's
performance as it is viewed by management. This indicator is
presented on a pro forma basis to exclude Televisa litigation costs
and payments made under protest, strategic alternative costs,
stock-based compensation expense related to SFAS No. 123R
Accounting For Stock-Based Compensation and an asset impairment
charge. Pro forma net income and pro forma diluted earnings per
share are used by management to evaluate financial performance
without the effect of these charges, the gain from the sale of 7.2
million shares of Entravision stock and a tax benefit realized from
the reversal of the valuation allowance relating to the non
temporary decline in the fair value of the Entravision investment.
Pro forma operating income before depreciation and amortization,
pro forma net income and pro forma diluted earnings per share are
not, and should not be used as, indicators of or alternatives to
operating income, net income, diluted earnings per share or cash
flow as reflected in the consolidated financial statements, they
are not measures of financial performance under generally accepted
accounting principles ("GAAP") and should not be considered in
isolation or as substitutes for measures of performance prepared in
accordance with GAAP. Since the definitions of pro forma operating
income before depreciation and amortization, pro forma net income
and pro forma diluted earnings per share may vary among companies
and industries they should not be used as measures of performance
among companies. The tables below set forth a reconciliation of pro
forma operating income before depreciation and amortization to
operating income for each segment and consolidated net income,
which are the most directly comparable GAAP financial measures.
Also, information reconciling pro forma net income and pro forma
diluted earnings per share to net income and diluted earnings per
share, which are the most directly comparable GAAP financial
measures, are presented. -0- *T Unaudited In millions Three Months
Ended September 30, 2006
---------------------------------------------- Consolidated
Television Radio Music Internet ------------ ---------- ------
------ -------- Pro forma operating income (loss) before
depreciation and amortization $ 202.5 $ 159.6 $42.3 $(1.7) $ 2.3
Depreciation and amortization 22.9 17.3 3.4 1.6 0.6 Stock
compensation expense 3.2 2.3 0.8 - 0.1 Televisa litigation costs
and payments made under protest 2.7 2.7 - - - Strategic alternative
costs 3.8 3.7 0.1 - - ------------ ---------- ------ ------
-------- Operating income (loss) $ 169.9 $ 133.6 $38.0 $(3.3) $ 1.6
============ ========== ====== ====== ======== *T -0- *T Unaudited
In millions, except share and per share data Three Months Ended
September 30, 2006 ----------------------------------------- Pro
Forma As Reported Adjustments Pro Forma ------------- -------------
------------- Operating income $ 169.9 $ 9.7(3) $ 179.6 Other
(income) expense: Interest expense, net 21.8 21.8 Amortization of
deferred financing costs 0.6 0.6 Stock dividend (0.5) (0.5) Equity
income in unconsolidated subsidiaries and other (0.6) (0.6) Gain on
sale of Entravision stock (0.2) 0.2 - Noncontrolling interest in
variable interest entity (0.9) (0.9) ------------- -------------
------------- Income before taxes 149.7 9.5 159.2 Provision for
income taxes 61.6 0.8(4) 62.4 ------------- -------------
------------- Net income $ 88.1 $ 8.7 $ 96.8 =============
============= ============= Diluted earnings per share $ 0.26 $
0.03 $ 0.29 Weighted average common shares outstanding 338,601,630
338,601,630 338,601,630 *T -0- *T Unaudited In millions Three
Months Ended September 30, 2005
---------------------------------------------- Consolidated
Television Radio Music Internet ------------- ---------- ------
----- -------- Operating income before depreciation and
amortization $ 180.5 $ 129.4 $41.6 $9.4 $ 0.1 Depreciation and
amortization 22.7 16.8 2.9 2.5 0.5 ------------- ---------- ------
----- -------- Operating income (loss) 157.8 $ 112.6 $38.7 $6.9 $
(0.4) ========== ====== ===== ======== Other (income) expense:
Interest expense, net 22.1 Amortization of deferred financing costs
0.8 Stock dividend (0.5) Equity income in unconsolidated
subsidiaries and other (0.5) Noncontrolling interest in variable
interest entities 2.6 ------------- Income before taxes 133.3
Provision for income taxes 54.1 ------------- Net income $ 79.2
============= Diluted earnings per share $ 0.23 Weighted average
common shares outstanding 342,696,516 *T -0- *T Unaudited In
millions Nine Months Ended September 30, 2006
----------------------------------------------- Consolidated
Television Radio Music Internet ------------ ---------- -------
------ -------- Pro forma operating income before depreciation and
amortization $ 574.5 $ 463.1 $105.5 $ 0.3 $ 5.6 Depreciation and
amortization 68.6 51.5 9.4 6.1 1.6 Stock compensation expense 9.3
6.4 2.6 0.1 0.2 Asset impairment charge 1.6 - 1.6 - - Televisa
litigation costs and payments made under protest 10.6 10.6 - - -
Strategic alternative costs 11.2 11.1 0.1 - - ------------
---------- ------- ------ -------- Operating income (loss)$ 473.2 $
383.5 $ 91.8 $(5.9) $ 3.8 ============ ========== ======= ======
======== *T -0- *T Unaudited In millions, except share and per
share data Nine Months Ended September 30, 2006
----------------------------------------- Pro Forma As Reported
Adjustments Pro Forma ------------- ------------- -------------
Operating income $ 473.2 $ 32.7(5) $ 505.9 Other (income) expense:
Interest expense, net 69.6 69.6 Amortization of deferred financing
costs 2.0 2.0 Stock dividend (1.4) (1.4) Equity income in
unconsolidated subsidiaries and other (1.7) (1.7) Gain on sales of
Entravision stock (1.4) 1.4(6) - Noncontrolling interest in
variable interest entity 0.6 0.2 0.8 ------------- -------------
------------- Income before taxes 405.5 31.1 436.6 Provision for
income taxes 156.0 10.5(7) 166.5 ------------- -------------
------------- Net income $ 249.5 $ 20.6 $ 270.1 =============
============= ============= Diluted earnings per share $ 0.74 $
0.06 $ 0.80 Weighted average common shares outstanding 338,333,983
338,333,983 338,333,983 *T -0- *T Unaudited In millions Nine Months
Ended September 30, 2005
----------------------------------------------- Consolidated
Television Radio Music Internet ------------ ---------- -------
------ -------- Operating income (loss) before depreciation and
amortization $ 479.7 $ 349.7 $102.4 $28.5 $ (0.9) Depreciation and
amortization 69.9 49.8 8.9 9.9 1.3 ------------ ---------- -------
------ -------- Operating income (loss)$ 409.8 $ 299.9 $ 93.5 $18.6
$ (2.2) ============ ========== ======= ====== ======== *T -0- *T
Unaudited In millions, except share and per share data Nine Months
Ended September 30, 2005 -----------------------------------------
Pro Forma As Reported Adjustments Pro Forma -------------
------------- ------------- Operating income $ 409.8 $ - $ 409.8
Other (income) expense: Interest expense, net 60.5 60.5
Amortization of deferred financing costs 2.5 2.5 Stock dividend
(1.4) (1.4) Equity income in unconsolidated subsidiaries and other
(0.8) (0.8) Nontemporary decline in fair value of investment 48.3
(48.3) - Noncontrolling interest in variable interest entities 1.9
- 1.9 ------------- ------------- ------------- Income before taxes
298.8 48.3 347.1 Provision for income taxes 139.1 - 139.1
------------- ------------- ------------- Net income $ 159.7 $ 48.3
$ 208.0 ============= ============= ============= Diluted earnings
per share $ 0.46 $ 0.14 $ 0.60 Weighted average common shares
outstanding 347,732,460 347,732,460 347,732.460 *T The following
table reconciles pro forma operating income before depreciation and
amortization excluding the estimated incremental impact of the
World Cup to net income and diluted earnings per share for the
three months ended September 30, 2006: -0- *T Unaudited In millions
Pro forma operating income before depreciation and amortization
excluding the estimated incremental impact of the World Cup $ 202.2
Operating (income) expense adjustments: Incremental impact of the
World Cup (0.3) Depreciation and amortization 22.9 Stock
compensation expense 3.2 Televisa litigation costs and payments
made under protest 2.7 Strategic alternative costs 3.8
--------------- Operating income 169.9 Other (income) expense:
Interest expense, net 21.8 Amortization of deferred financing costs
0.6 Stock dividend (0.5) Equity income in unconsolidated
subsidiaries and other (0.6) Gain on sale of Entravision stock
(0.2) Noncontrolling interest in variable interest entity (0.9)
--------------- Income before taxes 149.7 Provision for income
taxes 61.6 --------------- Net income $ 88.1 ===============
Diluted earnings per share $ 0.26 Weighted average common shares
outstanding 338,601,630 *T -0- *T UNIVISION COMMUNICATIONS INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME (In millions, except share and per share data) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30,
------------------- ------------------- 2006(8) 2005 2006(8) 2005
--------- --------- --------- --------- Net revenues: Television,
radio and Internet services $ 506.6 $ 446.7 $1,512.8 $1,277.1 Music
products and publishing 29.5 50.8 107.0 161.9 --------- ---------
--------- --------- Total net revenues 536.1 497.5 1,619.8 1,439.0
--------- --------- --------- --------- Direct operating expenses
of television, radio and Internet services 172.2 151.0 549.3 451.5
Direct operating expenses of music products and publishing 20.1
27.3 69.1 91.8 --------- --------- --------- --------- Total direct
operating expenses (excluding depreciation and amortization) 192.3
178.3 618.4 543.3 Selling, general and administrative expenses
(excluding depreciation and amortization) 151.0 138.7 459.6 416.0
Depreciation and amortization 22.9 22.7 68.6 69.9 ---------
--------- --------- --------- Operating expenses 366.2 339.7
1,146.6 1,029.2 --------- --------- --------- --------- Operating
income 169.9 157.8 473.2 409.8 Other expense (income): Interest
expense, net 21.8 22.1 69.6 60.5 Amortization of deferred financing
costs 0.6 0.8 2.0 2.5 Stock dividend (0.5) (0.5) (1.4) (1.4) Equity
income in unconsolidated subsidiaries and other (0.6) (0.5) (1.7)
(0.8) Non temporary decline in fair value of investment - - - 48.3
Gain on sales of Entravision stock (0.2) - (1.4) - Noncontrolling
interest in variable interest entities (0.9) 2.6 0.6 1.9 ---------
--------- --------- --------- Income before income taxes 149.7
133.3 405.5 298.8 Provision for income taxes 61.6 54.1 156.0 139.1
--------- --------- --------- --------- Net income 88.1 79.2 249.5
159.7 Other comprehensive income (loss): Currency translation
adjustment 0.2 - (1.7) 0.2 --------- --------- --------- ---------
Comprehensive income $ 88.3 $ 79.2 $ 247.8 $ 159.9 =========
========= ========= ========= Net income per common share: Basic $
0.29 $ 0.25 $ 0.82 $ 0.50 Diluted $ 0.26 $ 0.23 $ 0.74 $ 0.46
Weighted average common shares outstanding: Basic 306.5 313.6 305.8
318.5 Diluted 338.6 342.7 338.3 347.7 *T -0- *T UNIVISION
COMMUNICATIONS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share data) September 30,
December 31, 2006 2005 -------------- ------------- ASSETS
(Unaudited) Current assets: Cash and cash equivalents $ 250.7 $
99.4 Accounts receivable, net 454.1 395.5 Program rights 29.6 29.9
Income taxes - 3.2 Deferred tax assets 29.1 23.1 Prepaid expenses
and other 44.9 82.5 -------------- ------------- Total current
assets 808.4 633.6 Property and equipment, net 591.7 563.9
Intangible assets, net 4,324.5 4,271.6 Goodwill 2,265.0 2,231.2
Deferred financing costs, net 6.5 7.1 Program rights 17.4 26.0
Investments in equity method investees 54.4 54.6 Investments in
cost method investees 161.0 299.8 Other assets 31.5 40.5
-------------- ------------- Total assets $ 8,260.4 $ 8,128.3
============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable and accrued liabilities $
244.2 $ 283.5 Income taxes 25.1 - Accrued interest 19.5 25.7
Accrued license fees 17.8 20.5 Program rights obligations 18.6 15.8
Current portion of long-term debt and capital lease obligations
253.8 564.0 -------------- ------------- Total current liabilities
579.0 909.5 Long-term debt 1,043.5 935.5 Capital lease obligations
46.2 33.8 Program rights obligations 14.2 20.9 Deferred tax
liabilities 1,055.3 1,019.8 Other long-term liabilities 60.6 60.0
-------------- ------------- Total liabilities $ 2,798.8 $ 2,979.5
-------------- ------------- Noncontrolling interest in variable
interest entity 51.9 57.9 -------------- -------------
Stockholders' equity: Preferred stock, $0.01 par value; 10,000,000
shares authorized; no shares issued or outstanding - - Common
stock, $0.01 par value; 1,040,000,000 shares authorized;
307,625,799 shares issued and 307,624,585 shares outstanding in
2006 and 304,982,531 shares issued and outstanding in 2005 3.1 3.0
Paid-in-capital 4,202.3 4,133.9 Deferred compensation - (1.3)
Retained earnings 1,206.0 956.5 Accumulated other comprehensive
losses (1.7) (1.2) -------------- ------------- Total stockholders'
equity 5,409.7 5,090.9 -------------- ------------- Total
liabilities and stockholders' equity $ 8,260.4 $ 8,128.3
============== ============= *T -0- *T UNIVISION COMMUNICATIONS
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In
millions) (Unaudited) Nine Months Ended September 30,
----------------- 2006 2005 -------- -------- Net income $ 249.5 $
159.7 Adjustments to reconcile net income to net cash from
operating activities: Depreciation 61.6 59.0 Amortization of
intangible assets and deferred financing costs 9.0 13.4 Deferred
income taxes 38.9 33.8 Stock dividend (1.4) (1.4) Non temporary
decline in fair value of investment - 48.3 Noncontrolling interest
in variable interest entities 0.6 1.9 Equity income in
unconsolidated subsidiaries (1.5) (0.8) Loss (gain) on sale of
property and equipment 0.2 (1.7) Gain on sales of Entravision stock
(1.4) - Share-based compensation 9.3 - Earnings distribution from
equity investments 0.4 (3.8) Other non-cash items 1.0 0.9 Changes
in operating assets and liabilities, net of assets acquired and
liabilities assumed: Accounts receivable, net (57.7) (42.6) Program
rights 8.8 1.9 Deferred tax assets (6.0) - Prepaid expenses and
other 38.0 9.9 Accounts payable and accrued liabilities (29.6) 28.4
Income taxes receivable 3.2 - Income taxes payable 23.4 13.6 Income
tax benefit from share-based awards - 3.8 Accrued interest (6.2)
16.3 Accrued license fees (2.7) 6.0 Program rights obligations
(3.9) (8.9) Other, net (2.7) (7.3) -------- -------- Net cash
provided by operating activities 330.8 330.4 -------- -------- Cash
flow from investing activities: Acquisitions, net of acquired cash
(12.7) (219.7) Proceeds from sales of Entravision stock 52.7 -
Capital expenditures (61.8) (65.1) Distributions to Disa partner
(4.8) (1.9) Proceeds from sale of property and equipment - 5.1
Other, net - (1.4) -------- -------- Net cash used in investing
activities (26.6) (283.0) -------- -------- Cash flow from
financing activities: Proceeds from issuance of long-term debt
375.0 333.0 Repayment of long-term debt (587.0) (96.5) Proceeds
from stock options exercised 40.5 4.6 Purchase of treasury shares -
(392.6) Income tax benefit from stock-based awards 20.0 - Deferred
financing costs (1.4) - -------- -------- Net cash used in
financing activities (152.9) (151.5) -------- -------- Net increase
(decrease) in cash 151.3 (104.1) Cash and cash equivalents,
beginning of period 99.4 189.9 -------- -------- Cash and cash
equivalents, end of period $ 250.7 $ 85.8 ======== ========
Supplemental disclosure of cash flow information: Interest paid $
45.6 $ 56.4 Income taxes paid $ 78.2 $ 66.5 *T (1) Operating income
before depreciation and amortization is presented on a pro forma
basis and excludes certain charges totaling $9.7 and $32.7 million
for the three and nine months ended September 30, 2006,
respectively. Net income and diluted earnings per share in 2006 are
presented on a pro forma basis to exclude net after tax charges
totaling $8.7 and $20.6 million for the three and nine months ended
September 30, 2006, respectively. See pages 6 through 9 for a
reconciliation of non-GAAP (Generally Accepted Accounting
Principles) terms and pro forma measures to the most directly
comparable GAAP financial measure. (2) Operating income before
depreciation and amortization is presented on a pro forma basis and
excludes certain charges totaling $9.7 and $32.7 million for the
three and nine months ended September 30, 2006, respectively. Net
income and diluted earnings per share in 2006 are presented on a
pro forma basis to exclude net after tax charges totaling $8.7 and
$20.6 million for the three and nine months ended September 30,
2006, respectively. See pages 6 through 9 for a reconciliation of
non-GAAP (Generally Accepted Accounting Principles) terms and pro
forma measures to the most directly comparable GAAP financial
measure. (3) For the three months ended September 30, 2006, the
Company incurred charges of $3.8 million for strategic alternative
costs, $2.7 million for Televisa litigation costs and payments made
under protest and $3.2 million for stock-based compensation expense
related to SFAS No. 123R. (4) The pro forma adjustment reflects the
tax impact of the pretax pro forma adjustments. (5) For the nine
months ended September 30, 2006, the Company incurred charges of
$10.6 million for Televisa litigation costs and payments made under
protest, $11.2 million for strategic alternative costs, $9.3
million for stock-based compensation expense related to SFAS No.
123R and $1.6 million for an asset impairment charge. (6) The
Company recognized a gain of $1.4 million from the sale of 7.2
million shares of Entravision stock for the nine months ended
September 30, 2006. (7) The pro forma adjustment reflects the tax
impact of the pretax pro forma adjustments. (8) The 2006 financial
information includes a charge for Televisa litigation costs,
strategic alternative costs, stock-based compensation expense
related to SFAS No. 123R, an asset impairment charge, a gain from
the sale of 7.2 million shares of Entravision stock and the tax
benefit realized from the reversal of the valuation allowance
relating to the non temporary decline in the fair value of the
Entravision investment.
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