(Former name, former address and former fiscal year, if changed since last report)

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 whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨

As of ~~May 5,~~August 4, 2004, there were ~~59,502,343~~59,505,093 shares, $0.0001 par value per share, of the registrant’s Class A common stock outstanding, ~~and~~ 27,678,533 shares, $0.0001 par value per share, of the registrant’s Class B common stock outstanding and 36,926,600 shares, $0.0001 par value per share, of the registrant’s Class U common stock outstanding.

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2003.


		March 31, 2004			December 31, 2003			June 30, 2004			December 31, 2003
		(Unaudited)						(Unaudited)
ASSETS	ASSETS
Current assets
Cash and cash equivalents		$	13,348		$	19,806		$	12,887		$	19,806
Trade receivables (including related parties of $575 and $795), net of allowance for doubtful
accounts of $5,114 and $4,749			42,245			49,518
Trade receivables (including related parties of $681 and $795), net of allowance for doubtful accounts of $5,852 and $4,749									55,804			49,518
Assets held for sale			33,662			34,683			8,407			34,683
Prepaid expenses and other current assets (including related parties of $1,061 and $1,650)			5,902			5,823
Prepaid expenses and other current assets (including related parties of $915 and $1,650)									5,122			5,823

Total current assets			95,157			109,830			82,220			109,830
Property and equipment, net			161,885			170,624			158,541			170,624
Intangible assets subject to amortization, net			140,327			144,903			135,755			144,903
Intangible assets not subject to amortization			862,515			862,670			862,515			862,670
Goodwill			379,545			379,545			379,545			379,545
Other assets (including related parties of $259 and $277)			17,944			19,396
Other assets (including related parties of $261 and $277)									18,566			19,396

		$	1,657,373		$	1,686,968		$	1,637,142		$	1,686,968

LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt		$	1,186		$	1,191		$	1,179		$	1,191
Advances payable, related parties			118			118			118			118
Accounts payable and accrued expenses (including related parties of $2,264 and $2,261)			21,856			26,568
Accounts payable and accrued expenses (including related parties of $2,332 and $2,261)									29,233			26,568

Total current liabilities			23,160			27,877			30,530			27,877
Notes payable, less current maturities			358,392			376,424			321,372			376,424
Other long-term liabilities			687			397			979			397
Deferred taxes			121,689			124,000			125,613			124,000

Total liabilities			503,928			528,698			478,494			528,698

Commitments and contingencies
Series A mandatorily redeemable convertible preferred stock, $0.0001 par value, 11,000,000 shares authorized; shares issued and outstanding 2004 and 2003 5,865,102 (liquidation value of $121,390 and $118,865)			115,300			112,269
Series A mandatorily redeemable convertible preferred stock, $0.0001 par value, 11,000,000 shares authorized; shares issued and outstanding 2004 and 2003 5,865,102 (liquidation value of $123,916 and $118,865)									118,412			112,269

Stockholders’ equity
Preferred stock, $0.0001 par value, 39,000,000 shares authorized; shares issued and outstanding Series U convertible preferred stock, 2004 and 2003 369,266			—			—			—			—
Class A common stock, $0.0001 par value, 260,000,000 shares authorized; shares issued and outstanding 2004 59,487,943; 2003 59,434,048			6			6
Class A common stock, $0.0001 par value, 260,000,000 shares authorized; shares issued and outstanding 2004 59,505,095; 2003 59,434,048									6			6
Class B common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and outstanding 2004 and 2003 27,678,533			3			3			3			3
Class C common stock, $0.0001 par value, 25,000,000 shares authorized; no shares issued or outstanding 2004 and 2003			—			—
Class U common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and outstanding 2004 and 2003 none									—			—
Additional paid-in capital			1,183,378			1,182,978			1,183,489			1,182,978
Accumulated deficit			(145,242	)		(136,986	)		(143,262	)		(136,986	)

			1,038,145			1,046,001			1,040,236			1,046,001
Treasury stock, Class A common stock, $0.0001 par value, 2004 and 2003 5,101 shares			—			—			—			—

Total stockholders’ equity			1,038,145			1,046,001			1,040,236			1,046,001

		$	1,657,373		$	1,686,968		$	1,637,142		$	1,686,968


	Three-Month Period Ended March 31,
	2004			2003			Six-Month Period Ended June 30,
				(As reclassified Note 1)			2004			2003
Cash flows from operating activities:
Net loss	$	(5,225	)	$	(6,652	)	$	(132	)	$	(5,481	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		10,787			10,854			22,034			21,821
Deferred income taxes		(2,311	)		(2,200	)		1,613			(1,500	)
Amortization of debt issue costs		816			503			1,610			1,050
Amortization of syndication contracts		75			151			167			325
Equity in net loss of nonconsolidated affiliates		111			49
Equity in net (earnings) loss of nonconsolidated affiliates								41			(211	)
Non-cash stock-based compensation		(40	)		302			(42	)		1,149
Gain on sale of media properties and other assets		(1,004	)		—
(Gain) loss on sale of media properties and other assets								(3,396	)		58
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
Decrease in accounts receivable		7,319			3,542
Increase in accounts receivable								(6,642	)		(3,210	)
Increase in prepaid expenses and other assets		(362	)		(965	)		(1,004	)		(799	)
Decrease in accounts payable, accrued expenses and other liabilities		(4,594	)		(4,767	)
Increase in accounts payable, accrued expenses and other liabilities								2,371			858
Effect of discontinued operations		—			185			—			272

Net cash provided by operating activities		5,572			1,002			16,620			14,332

Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		8,168			—			37,022			4
Purchases of property and equipment and intangibles		(3,396	)		(2,989	)		(6,813	)		(110,077	)
Distribution from nonconsolidated affiliate		300			—			300			—
Refunds (deposits) for acquisitions		501			(3,015	)
Refunds for acquisitions								501			—

Net cash provided by (used in) investing activities		5,573			(6,004	)		31,010			(110,073	)

Cash flows from financing activities:
Proceeds from issuance of common stock		442			432			555			548
Principal payments on notes payable		(52,036	)		(108	)		(89,074	)		(7,450	)
Proceeds from borrowing on notes payable		34,000			—			34,000			100,000
Payments of deferred debt and offering costs		(9	)		(8	)		(30	)		(541	)

Net cash provided by (used in) financing activities		(17,603	)		316			(54,549	)		92,557

Net decrease in cash and cash equivalents		(6,458	)		(4,686	)		(6,919	)		(3,184	)
Cash and cash equivalents:
Beginning		19,806			12,201			19,806			12,201

Ending	$	13,348		$	7,515		$	12,887		$	9,017

Supplemental disclosures of cash flow information:
Cash payments for:
Interest	$	10,610		$	10,126		$	11,897		$	12,267

Income taxes	$	275		$	548		$	671		$	1,009

Supplemental disclosures of non-cash investing and financing activities:
Property and equipment acquired under capital lease obligations and included in accounts payable	$	285		$	156		$	218		$	249
Issuance of Class A common shares for partial payment for Big City Radio stations							$	—		$	37,785

The condensed consolidated financial statements included herein have been prepared by Entravision Communications Corporation, or the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2003 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2004 or any other future period.

On July 3, 2003, the Company sold substantially all of the assets and certain specified liabilities related to its publishing segment to CPK NYC, LLC for aggregate consideration of approximately $19.9 million. The Company’s consolidated financial statements for the ~~three-months~~three- and six-month periods ended ~~March 31,~~June 30, 2003 and related disclosures have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144 (see Note 3).

Univision Communications Inc. currently owns approximately 28% of the Company’s common stock on a fully converted basis. In connection with Univision’s merger with Hispanic Broadcasting Corporation, or HBC, in September 2003, Univision entered into an agreement with the U.S. Department of Justice, or DOJ, pursuant to which Univision agreed, among other things, to sell enough of its holdings of the Company’s stock so that its ownership of the Company will not exceed 15% by March 26, 2006 and 10% by March 26, 2009.

Also pursuant to Univision’s agreement with DOJ, in September 2003 Univision exchanged all 36,926,623 of its shares of the Company’s Class A and Class C common stock that it previously owned (14,943,231 shares of Class A common stock and 21,983,392 shares of Class C common stock) for 369,266 shares of the Company’s new Series U preferred stock. ~~This~~The Series U preferred stock was mandatorily convertible into common stock when and if the Company created a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than a nominal liquidation preference). The Company created such a new class of common stock, its new Class U common stock, during the second quarter of 2004, and the 369,266 shares of the Company’s Series U preferred stock held by Univision were converted into 36,926,600 shares of the Company’s new Class U common stock effective as of July 1, 2004. Neither the original exchange ~~did not change~~of Univision’s Class A and Class C common for Series U preferred stock, nor the subsequent conversion of such Series U preferred stock into Class U common stock, changed Univision’s overall equity interest in the Company, nor did iteither have any impact on the Company’s existing television station affiliation agreements with Univision.

The ~~Series~~Class U ~~preferred~~common stock has limited voting rights and does not include the right to elect ~~directors~~directors. However, as the holder of all of the Company’s issued and ~~carries a nominal liquidation preference at its par value over~~outstanding Class U common ~~stockholders.~~stock, Univision currently has the right to approve any merger, consolidation or other business combination involving the Company, any dissolution of the Company and any assignment of the FCC licenses for any of the Company’s Univision-affiliated television stations. Each share of ~~Series~~Class U ~~preferred~~common stock is automatically convertible into ~~100 shares~~one share (subject to adjustment for stock splits, dividends or combinations) of the Company’s Class A common stock in connection with any transfer to a third party that is not an affiliate of Univision. The Series U preferred stock is also mandatorily convertible into common stock when and if the Company creates a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than the nominal liquidation preference). The Company currently anticipates creating such a new class of common stock during the second quarter of 2004, subject to obtaining stockholder approval at its 2004 Annual Meeting of Stockholders scheduled to be held on May 26, 2004.

The Company received reimbursements from Univision for corporate expenses the Company incurred in connection with Univision’s merger with HBC in amounts of $0.5 million and $2.0 million for the ~~aggregate amount of $1.5 million during the three-month period~~three- and six-month periods ended ~~March 31, 2003.~~

In the first quarter, the Company adopted Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46) with no effect on the Company’s financial statements.June 30, 2003, respectively.

Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock option plans. As allowed by SFAS No. 123, the Company has elected to continue to account for its employee stock-based compensation plan using the intrinsic value method in accordance with Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations, which does not require compensation to be recorded if the consideration to be received is at least equal to the fair value of the common stock to be issued at the measurement date. Under the requirements of SFAS No. 123, nonemployee stock-based transactions require compensation to be recorded based on the fair value of the securities issued or the services received, whichever is more reliably measurable.

The following table illustrates the effect on net ~~loss~~income (loss) and net ~~loss~~income (loss) per share had employee compensation costs for the stock-based compensation plan been determined based on grant date fair values of awards under the provisions of SFAS No. 123, for the ~~three-month~~three- and six-month periods ended ~~March 31,~~June 30, 2004 and 2003 (unaudited; in thousands, except per share data):


	Three-Month Period Ended March 31,						Three-Month Period Ended June 30,						Six-Month Period Ended June 30,
	2004			2003			2004			2003			2004			2003
Net loss applicable to common stockholders
Net income (loss) applicable to common stockholders
As reported	$	(8,256	)	$	(9,376	)	$	1,978		$	(1,623	)	$	(6,276	)	$	(11,004	)
Deduct total stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects		(2,660	)		(2,078	)		(2,164	)		(2,910	)		(4,824	)		(4,988	)

Pro forma	$	(10,916	)	$	(11,454	)	$	(186	)	$	(4,533	)	$	(11,100	)	$	(15,992	)

Net loss per share applicable to common stockholders, basic and diluted
Net income (loss) per share applicable to common stockholders, basic and diluted
As reported	$	(0.09	)	$	(0.08	)	$	0.02		$	(0.01	)	$	(0.07	)	$	(0.09	)

Pro forma	$	(0.13	)	$	(0.10	)	$	0.00		$	(0.04	)	$	(0.13	)	$	(0.13	)

The Company granted ~~1,960,000~~2,025,000 stock options for employees and directors and 78,000 stock options for non-employees during the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004. These stock options have an average exercise price of ~~$10.27~~$10.24 and an average fair value of ~~$4.80.~~$6.26.

The following table illustrates the reconciliation of the basic and diluted earnings (loss) per share computations required by Statement of Financial Accounting Standards (SFAS) No. 128, “Earnings Per Share” (unaudited; in thousands, except share and per share data):

Basic ~~loss~~earnings (loss) per share is computed as net ~~loss~~earnings (loss) less accretion of the discount which includes accrued dividends on Series A mandatorily redeemable convertible preferred stock divided by the weighted average number of shares

outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and convertible securities.

For the three-month period ended June 30, 2003 and six-month periods ended ~~March 31,~~June 30, 2004 and 2003, all dilutive securities have been excluded as their inclusion would have had an anti-dilutive effect on loss per share. For the ~~three-months~~six-month period ended ~~March 31,~~June 30, 2004, the securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not anti-dilutive is as follows: ~~528,466~~438,845 equivalent shares of stock options, 36,926,600 equivalent shares of Series U convertible preferred stock and 5,865,102 equivalent shares of Series A mandatorily redeemable convertible preferred stock.

The Series A preferred stock and 7,576,040 stock options were not included in the computation of diluted income per share for the three-month period ended June 30, 2004, because the effect of the Series A preferred stock was anti-dilutive and the exercise prices of the options were greater than the average market price of the common shares during this period.

As discussed above, the Series U preferred stock iswas mandatorily convertible into common stock when and if the Company ~~creates~~created a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than ~~the~~a nominal liquidation preference). The Company ~~currently intends to create~~created such a new class of common stock, ~~in connection with~~ its new Class U common stock, during the second quarter of 2004, ~~Annual Meeting~~and all of ~~Stockholders.~~the Company’s Series U preferred stock held by Univision was converted into shares of the Company’s new Class U common stock effective as of July 1, 2004. If the Series U preferred stock had been treated as common stock outstanding, the basic weighted average common shares outstanding ~~basic and diluted,~~ would have been ~~124,067,130~~124,086,068 for the six-month period ended June 30, 2004. The basic net loss per share would have changed from $(0.07) to $(0.05) for the six-month period ended June 30, 2004, and earnings per share for the three-month period ended ~~March 31, 2004. The net loss per share, basic and diluted,~~June 30, 2004 would have ~~changed from $(0.09) to $(0.07) for the three-month period ended March 31, 2004.~~remained unchanged at $0.02.

In February 2004, the Company sold the assets of radio station KZFO-FM in the Fresno, California market to Univision for approximately $8.0 million.

In May 2004, the Company sold the assets of radio stations WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market for an aggregate amount of approximately $28.8 million.

~~The~~On July 2, 2004, the Company ~~recently entered into a Share Repurchase Agreement with TSG Capital Fund III, L.P., the holder~~repurchased 2,542,006 shares of ~~all of the Company’s outstanding~~its Series A mandatorily redeemable convertible preferred stock ~~or Series A preferred stock.~~from TSG Capital Fund III, L.P. for $55 million, funded by additional borrowings of $50 million under the Company’s bank credit facility and available cash on hand of $5 million. Under ~~the~~a revised Share Repurchase Agreement with TSG Capital, the Company agreed to ~~purchase~~repurchase the remaining 3,323,096 shares of Series A preferred stock from TSG Capital ~~for a cash price that may vary depending on when~~by June 30, 2005, subject to the purchase closes. If the purchase closes by May 27, 2004, the price will be $126.2 million. If the purchase closes after May 27, 2004 but on or before June 28, 2004, the price will be $126.9 million. If the purchase closes after June 28, 2004 but on or before July 29, 2004, the price will be $127.7 million. If the purchase does not close by July 29, 2004, the Share Repurchase Agreement will terminate. In addition, the closingapproval of the ~~repurchase is conditioned upon~~Company’s Board of Directors and subject to the ~~receipt~~Company’s having entered into, by September 30, 2004, a senior bank refinancing transaction of ~~all necessary bank consents and the completion,~~at least $400 million on terms acceptable to the Company in its sole ~~discretion, of an offering of preferred stock. As of~~discretion. The revised Share Repurchase Agreement replaced in its entirety the prior Share Repurchase Agreement described in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2004,~~2004.

The $55 million repurchase price for the ~~aggregate liquidation preference~~2,542,006 shares of ~~the~~ Series A preferred stock ~~was $121.4 million. The amount~~repurchased by ~~which~~ the ~~repurchase price exceeds the~~Company represented a premium of approximately $3.7 million to such shares’ carrying value of(or $1.3 million to the ~~Series A preferred stock~~liquidation value) on July 2, 2004. This premium will ~~affect~~be reflected as a reduction in the Company’s net income ~~available~~applicable to common stockholders and the related earnings per ~~share.~~share for the three-month period ending September 30, 2004. The premium associated with the remaining 3,323,096 outstanding shares of Series A preferred stock will be reflected as a reduction in the Company’s net income applicable to common stockholders and the related earnings per share over the period from July 1, 2004 through June 30, 2005.

In December 2003, the Company entered into a definitive agreement to sell radio station KRVA-AM in the Dallas, Texas market for approximately $3.5 million in cash. This disposition is currently expected to close in the ~~second~~third quarter of 2004.

In ~~January~~June 2004, the Company entered into a definitive ~~agreements~~agreement to ~~sell~~acquire radio ~~stations WNDZ-AM, WRZA-FM and WZCH-FM~~station KBMB-FM in the ~~Chicago, Illinois~~Sacramento, California market for an aggregate ~~amount~~ of approximately ~~$29.0~~$17.4 million in cash. ~~These dispositions are~~This acquisition is currently expected to close in the ~~second~~third or fourth quarter of 2004.

Summarized ~~financial information~~balance sheet data regarding the Company’s assets held for sale in the ~~Fresno, California,~~ Dallas, Texas ~~Chicago, Illinois markets~~market and land in the San Jose, California market ~~(which has a carrying value and fair market value of $5.2 million)~~ is as follows ~~(in~~as of June 30, 2004 (unaudited; in thousands):


	March 31, 2004		December 31, 2003		June 30, 2004
Property and equipment, net	$	7,219	$	2,721	$	5,270
Favorable lease rights subject to amortization		190		194
FCC licenses not subject to amortization		26,253		31,768		3,137

Total assets held for sale	$	33,662	$	34,683	$	8,407

None of the 2004 dispositions or planned dispositions qualifies as a sale of a business, nor do they qualify for discontinued operations presentation as they are not a component of an entity.

On July 3, 2003, the Company sold substantially all of the assets and certain specified liabilities related to its publishing segment to CPK NYC, LLC for aggregate consideration of approximately $19.9 million. In the sale, the Company received $18.0 million in cash and an unsecured, subordinated promissory note in the principal amount of $1.9 million. The note bears interest at a rate of 8.0% per annum compounded annually, and all principal and accrued interest on the note are due and payable on July 3, 2008. The Company used the cash proceeds from this disposition to repay a portion of the indebtedness then outstanding under its bank credit facility.

The cash portion of the purchase price is subject to adjustment based on the working capital of the publishing segment as of the closing date. The Company currently anticipates that this favorable adjustment will be finalized during the ~~second or~~ third quarter of 2004 and that such adjustment will not have a material effect on the Company’s consolidated financial statements.

As a result of the Company’s decision to sell its publishing segment, the Company’s consolidated financial statements for the ~~three-month period~~three- and six-month periods ended ~~March 31,~~June 30, 2003 and related disclosures have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144. The Company has not made any allocation of interest expense or corporate expense to discontinued operations.

Summarized ~~Statement~~Statements of Operations data for the discontinued publishing operations is as follows ~~(unaudited,~~(unaudited; in thousands):


	Three-Month Period Ended March 31,					Three-Month Period Ended June 30,					Six-Month Period Ended June 30,
	2004		2003			2004		2003			2004		2003
Net revenue	$	—	$	4,758		$	—	$	4,871		$	—	$	9,516
Loss from discontinued operations		—		(265	)
Net loss from discontinued operations							—		(1	)		—		(272	)

The Company operates in three reportable segments: television broadcasting, radio broadcasting and outdoor advertising.

The Company owns and/or operates 45 primary television stations located primarily in the southwestern United States, consisting primarily of Univision affiliates.

The Company owns and/or operates 5754 radio stations ~~(42~~(40 FM and 1514 AM) located primarily in Arizona, California, Colorado, Florida, ~~Illinois,~~ Nevada, New Mexico and Texas.

The Company owns approximately 10,900 outdoor advertising faces located primarily in Los Angeles and New York.

Separate financial data for each of the Company’s operating segments is provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses and non-cash stock-based compensation. There were no significant sources of revenue generated outside the United States during the ~~three-month~~three- and six-month periods ended ~~March 31,~~June 30, 2004 and 2003. The Company evaluates the performance of its operating segments based on the following (unaudited, in thousands):


	Three-Month Period Ended March 31,						% Change		Three-Month Period Ended June 30,						% Change			Six-Month Period Ended June 30,							% Change
	2004			2003			% Change		2004			2003					2004				2003				% Change
Net Revenue
Television	$	27,578		$	25,479		8	%	$	36,046		$	32,368		% Change	11	%		$	63,624			$	57,847		10	%
Radio		18,319			16,259		13	%		24,711			23,478		5	%			43,031				39,737		8	%
Outdoor		6,151			6,532		-6	%		8,188			8,302		(1	)%			14,340				14,834		(3	)%

Consolidated		52,048			48,270		8	%		68,945			64,148		7	%			120,995				112,418		8	%

Direct operating expenses
Television		12,643			11,831		7	%		13,938			12,632		10	%			26,581				24,463		9	%
Radio		8,107			7,798		4	%		9,234			9,134		1	%			17,341				16,933		2	%
Outdoor		5,252			4,936		6	%		5,561			5,311		5	%			10,813				10,246		6	%

Consolidated		26,002			24,565		6	%		28,733			27,077		6	%			54,735				51,642		6	%

Selling, general and administrative expenses
Television		5,513			5,798		-5	%		4,527			5,736		(21	)%			10,039				11,534		(13	)%
Radio		5,641			4,956		14	%		5,707			5,521		3	%			11,348				10,477		8	%
Outdoor		1,504			1,063		41	%		1,101			1,103		0	%			2,605				2,166		20	%

Consolidated		12,658			11,817		7	%		11,335			12,360		(8	)%			23,992				24,177		(1	)%

Depreciation and amortization
Television		3,580			3,805		-6	%		3,545			3,666		(3	)%			7,125				7,471		(5	)%
Radio		1,975			1,820		9	%		1,902			1,938		(2	)%			3,877				3,759		3	%
Outdoor		5,232			5,229		0	%		5,800			5,362		8	%			11,032				10,591		4	%

Consolidated		10,787			10,854		-1	%		11,247			10,966		3	%			22,034				21,821		1	%

Segment operating profit (loss)
Television		5,842			4,045		44	%		14,036			10,334		36	%			19,879				14,379		38	%
Radio		2,596			1,685		54	%		7,868			6,885		14	%			10,465				8,568		22	%
Outdoor		(5,837	)		(4,696	)	24	%		(4,274	)		(3,474	)	23	%			(10,110	)			(8,169	)	24	%

Consolidated		2,601			1,034		152	%		17,630			13,745		28	%			20,234				14,778		37	%

Corporate expenses		4,013			2,426		65	%		4,120			3,701		11	%			8,133				6,126		33	%
Gain on sale of assets		(1,004	)		—		*			(2,392	)		—		*				(3,396	)			—		*
Non-cash stock-based compensation		(40	)		302		*			(2	)		846		*				(42	)			1,149		*

Operating loss	$	(368	)	$	(1,694	)	-78	%
Operating income									$	15,904		$	9,198		73	%		$	15,539			$	7,503		107	%

Capital expenditures
Television									$	2,261		$	2,620					$	4,024			$	5,050
Radio										680			2,583						1,773				3,407
Outdoor										408			201						708				274

Consolidated									$	3,349		$	5,404					$	6,505			$	8,731

Total assets:
Television	$	377,130		$	384,321				$	382,160		$	390,665
Radio		1,018,308			918,129					1,030,039			1,058,641
Outdoor		228,273			250,451					224,943			245,755
Assets held for sale		33,662			7,486					—			4,310

Consolidated	$	1,657,373		$	1,560,387				$	1,637,142		$	1,699,371

Capital Expenditures
Television	$	1,763		$	2,144
Radio		1,093			727
Outdoor		300			73

Consolidated	$	3,156		$	2,944

The Company is subject to various outstanding claims and other legal proceedings that arose in the ordinary course of business. The Company is a party to one action, which management does not believe is material, from plaintiffs seeking unspecified ~~damages.~~damages for certain employment-related claims. An accrual has been made in the consolidated financial statements as necessary to provide for management’s best estimate of the probable liability associated with this action. While the Company’s legal counsel cannot express an opinion on this matter, management believes that any liability of the Company that may arise out of or with respect to this matter will not materially adversely affect the financial position, results of operations or cash flows of the Company.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are a diversified Spanish-language media company with a unique portfolio of television, radio and outdoor advertising assets, reaching approximately ~~80%~~75% of all Hispanics in the United States. We operate in three reportable segments: television broadcasting, radio broadcasting and outdoor advertising. Our net revenue for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 was ~~$52~~$121 million. Of that amount, revenue generated by our television segment accounted for 53%, revenue generated by our radio segment accounted for 35% and revenue generated by our outdoor segment accounted for 12%.

As of the date of filing this report, we own and/or operate 45 primary television stations that are located primarily in the southwestern United States. We own and/or operate 5754 radio stations ~~(42~~(40 FM and 1514 AM) located primarily in Arizona, California, Colorado, Florida, ~~Illinois,~~ Nevada, New Mexico and Texas. Our outdoor advertising segment consists of approximately 10,900 advertising faces located primarily in Los Angeles and New York. The comparability of our results between the ~~three-month~~three- and six-month periods ended ~~March 31,~~June 30, 2004 and 2003 is significantly affected by acquisitions and ~~dispositions.~~dispositions in those periods.

We generate revenue from sales of national and local advertising time on television and radio stations and advertising on our billboards. Advertising rates are, in large part, based on each medium’s ability to attract audiences in demographic groups targeted by advertisers. We recognize advertising revenue when commercials are broadcast and when outdoor advertising services are provided. We do not obtain long-term commitments from our advertisers and, consequently, they may cancel, reduce or postpone orders without penalties. We pay commissions to agencies for local, regional and national advertising. For contracts directly with agencies, we record commissions as deductions from gross revenue. Seasonal revenue fluctuations are common in the broadcasting and outdoor advertising industries and are due primarily to variations in advertising expenditures by both local and national advertisers.

Our primary expenses are employee compensation, including commissions paid to our sales staffs and our national representative firms, marketing, promotion and selling, technical, local programming, engineering and general and administrative. Our local programming costs for television consist primarily of costs related to producing a local newscast in most of our markets.

Despite the war with Iraq and a relatively weak economic environment, we experienced growth for the year ended December 31, 2003, with net revenue of $238 million. Of that amount, revenue generated by our television segment accounted for 51%, revenue generated by our radio segment accounted for 36% and revenue generated by our outdoor segment accounted for 13%.

We made several key acquisitions during 2003, most notably the three FM radio stations in the Los Angeles market that we acquired from Big City Radio, Inc. Those stations were successfully integrated into our existing Los Angeles radio operations, and by mid-year we had already exceeded the Arbitron ratings that we originally had only hoped to reach by year-end in the market. Our radio division as a whole also posted strong results despite the departure from our company of a popular Spanish-language radio personality, and we successfully moved the headquarters of our radio network from Campbell, California to Los Angeles, the nation’s largest Hispanic market and the heart of the U.S. entertainment industry.

Consistent with our strategy of focusing on core media assets, we completed the sale of our publishing operations in July 2003. We also finished the year with a ratio of net debt (which we define as total debt less cash exceeding $5 million) to EBITDA as adjusted of 5.4 to 1, despite our acquisition of the Los Angeles radio assets earlier in the year. In addition, we made improvements in managing our expenses in 2003 by completing a rigorous budgeting process to reduce operating costs and overhead.

On the other hand, there were factors that limited our growth in 2003, and which represent both challenges and opportunities for the current year. Foremost among these factors was the weak economy for most of 2003, but we are encouraged by the national recovery that appeared to take hold during the later part of 2003. We were also relatively disappointed by the performance by our outdoor segment in 2003. We have responded to this challenge by making high-level changes in our outdoor management and sales staff, and we intend to monitor developments closely during this transitional period. In addition, although we experienced significant ratings gains in the Los Angeles radio market during 2003, one of our key goals for 2004 is to accelerate revenue growth in that market commensurate with our ratings success.

In February 2004, we sold the assets of radio station KZFO-FM in the Fresno, California market to Univision for approximately $8.0 million.

In May 2004, we sold the assets of radio stations WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market for an aggregate amount of approximately $28.8 million.

In December 2003, we entered into a definitive agreement to sell radio station KRVA-AM in the Dallas, Texas market for approximately $3.5 million in cash. We currently expect this disposition to close in the ~~second~~third quarter of 2004.

In ~~January~~June 2004, we entered into a definitive ~~agreements~~agreement to ~~sell~~acquire radio ~~stations WNDZ-AM, WRZA-FM and WZCH-FM~~station KBMB-FM in the ~~Chicago, Illinois~~Sacramento, California market for ~~an aggregate amount of~~ approximately ~~$29.0~~$17.4 million in cash. We currently expect ~~these dispositions~~this acquisition to close in the ~~second~~third or fourth quarter of 2004.

Univision currently owns approximately 28% of our common stock on a fully converted basis. In connection with its merger with Hispanic Broadcasting Corporation in September 2003, Univision entered into an agreement with the U.S. Department of Justice, or DOJ, pursuant to which Univision agreed, among other things, to sell enough of its holdings of our stock so that its ownership of our company will not exceed 15% by March 26, 2006 and 10% by March 26, 2009.

Also pursuant to Univision’s agreement with DOJ, in September 2003 Univision exchanged all of its shares of our Class A and Class C common stock that it previously owned for shares of our new Series U preferred stock. ~~This exchange did not change Univision’s overall equity interest in our company, nor did it have any impact on our existing television station affiliation agreements with Univision.~~ The Series U preferred stock has limited voting rights, does not include the right to elect directors and is automatically convertible into shares of our Class A common stock in connection with any transfer to a third party that is not an affiliate of Univision. The Series U preferred stock is alsowas mandatorily convertible into ~~36,926,600 shares of~~ common stock when and if we ~~create~~created a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than ~~the~~a nominal liquidation preference). We ~~anticipate creating~~created such a new class of common stock, our new Class U common stock, during the second quarter of 2004, ~~subject~~and the shares of our Series U preferred stock held by Univision were converted into 36,926,600 shares of our new Class U common stock effective as of July 1, 2004. Neither the original exchange of Univision’s Class A and Class C common for our Series U preferred stock, nor the subsequent conversion of such Series U preferred stock into our new Class U common stock, changed Univision’s overall equity interest in our company, nor did either have any impact on our existing television station affiliation agreements with Univision.

The Class U common stock has limited voting rights and does not include the right to ~~obtaining stockholder approval at~~elect directors. However, as the holder of all of our ~~2004 Annual Meeting~~issued and outstanding Class U common stock, Univision currently has the right to approve any merger, consolidation or other business combination involving our company, any dissolution of ~~Stockholders scheduled~~our company and any assignment of the FCC licenses for any of our company’s Univision-affiliated television stations. Each share of Class U common stock is automatically convertible into one share (subject to ~~be held on May 26, 2004.~~adjustment for stock splits, dividends or combinations) of our Class A common stock in connection with any transfer to a third party that is not an affiliate of Univision.

~~Three-Month~~Three- and Six-Month Periods Ended ~~March 31,~~June 30, 2004 and 2003 (Unaudited)

The following table sets forth selected data from our operating results for the ~~three-month~~three- and six-month periods ended ~~March 31,~~June 30, 2004 and 2003 (in thousands):


	Three-Month Period Ended March 31,								Three-Month Period Ended June 30,								Six-Month Period Ended June 30,
	2004			2003			% Change		2004			2003			% Change		2004			2003			% Change
Statement of operations data:
Statements of operations data:
Net revenue	$	52,048		$	48,270		8	%	$	68,945		$	64,148		7	%	$	120,995		$	112,418		8	%

Direct operating expenses		26,002			24,565		6	%		28,733			27,077		6	%		54,735			51,642		6	%
Selling, general and administrative expenses		12,658			11,817		7	%		11,335			12,360		(8	)%		23,992			24,177		(1	)%
Corporate expenses		4,013			2,426		65	%		4,120			3,701		11	%		8,133			6,126		33	%
Gain on sale of assets		(1,004	)		—		*			(2,392	)		—		*			(3,396	)		—		*
Non-cash stock-based compensation		(40	)		302		*			(2	)		846		*			(42	)		1,149		*
Depreciation and amortization		10,787			10,854		-1	%		11,247			10,966		3	%		22,034			21,821		1	%

		52,416			49,964		5	%		53,041			54,950		(3	)%		105,456			104,915		1	%
Operating loss		(368	)		(1,694	)	-78	%

Operating income										15,904			9,198		73	%		15,539			7,503		107	%
Interest expense		(6,872	)		(6,311	)	9	%		(6,630	)		(7,112	)	(7	)%		(13,502	)		(13,422	)	1	%
Interest income		90			15		500	%		67			14		379	%		156			29		*

Loss before income taxes		(7,150	)		(7,990	)	-11	%
Income tax benefit		2,036			1,652		23	%
Income (loss) before income taxes										9,341			2,100		345	%		2,193			(5,890	)	*
Income tax benefit (expense)										(4,320	)		(1,183	)	265	%		(2,284	)		470		*

Loss before equity in net loss of nonconsolidated affiliates		(5,114	)		(6,338	)	-19	%
Equity in net loss of nonconsolidated affiliates		(111	)		(49	)	127	%
Income (loss) before equity in net earnings (loss) of nonconsolidated affiliates										5,021			917		448	%		(91	)		(5,420	)	(98	)%
Equity in net earnings (loss) of nonconsolidated affiliates										70			260		(73	)%		(41	)		211		*

Loss before discontinued operations		(5,225	)		(6,387	)	-18	%
Income (loss) before discontinued operations										5,091			1,177		333	%		(132	)		(5,209	)	(97	)%
Loss from discontinued operations		—			(265	)	-100	%		—			(1	)	*			—			(272	)	*

Net loss	$	(5,225	)	$	(6,652	)	-21	%
Net income (loss)									$	5,091		$	1,176		333	%	$	(132	)	$	(5,481	)	(98	)%

Other Data:
Broadcast cash flow (1)	$	13,388		$	11,888		13	%
EBITDA as adjusted (adjusted for non-cash stock-based compensation) (1)	$	9,375		$	9,462		-1	%
Broadcast cash flow									$	28,877		$	24,711		17	%	$	42,268		$	36,599		15	%
EBITDA as adjusted (adjusted for non-cash stock-based compensation)									$	24,757		$	21,010		18	%	$	34,135		$	30,473		12	%
Cash flows provided by operating activities	$	5,872		$	1,002		486	%	$	11,048		$	13,330		(17	)%	$	16,620		$	14,332		16	%
Cash flows provided by (used in) investing activities	$	5,273		$	(6,004	)	*		$	25,437		$	(104,069	)	*		$	31,010		$	(110,073	)	*
Cash flows provided by (used in) financing activities	$	(17,603	)	$	316		*		$	(36,946	)	$	92,241		*		$	(54,549	)	$	92,557		*
Capital asset and intangible expenditures	$	3,396		$	2,989		14	%	$	3,417		$	104,073		(97	)%	$	6,813		$	110,077		(94	)%

Our calculation of EBITDA as adjusted included herein is substantially similar to the measures used in the financial covenants included in our bank credit facility and in the indenture governing our senior subordinated notes. In those instruments, EBITDA as adjusted is referred to as “operating cash flow” and “consolidated cash flow,” respectively. Under our bank credit facility as currently amended, we cannot incur additional indebtedness if the incurrence of such indebtedness would result in our ratio of net debt to operating cash flow having exceeded 6.5 to 1 on a pro forma basis for the prior full four quarters. Under the indenture, the corresponding ratio of net indebtedness to consolidated cash flow cannot exceed 7.1 to 1 on the same basis. The actual ratios of net indebtedness to each of operating cash flow and consolidated cash flow as of ~~March 31,~~June 30, 2004 and 2003 were ~~5.4~~4.6 to 1 and ~~5.3~~6.0 to 1, respectively. We entered into the bank credit facility in September 2000 and issued our senior subordinated notes in March 2002, so we were not subject to the same calculations and covenants in prior years. For consistency of presentation, however, the foregoing historical ratios assume that our current definitions had been applied for all periods.

performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. In addition, our definitions of broadcast cash flow and EBITDA as adjusted differ from those of many companies reporting similarly named measures.

Broadcast cash flow and EBITDA as adjusted are non-GAAP measures. The most directly comparable GAAP financial measure to each of broadcast cash flow and EBITDA as adjusted is net ~~loss.~~income (loss). A reconciliation of these non-GAAP measures to net ~~loss~~income (loss) follows (unaudited; in thousands):


	Three-Month Period Ended March 31,						Three-Month Period Ended June 30,						Six-Month Period Ended June 30,
	2004			2003			2004			2003			2004			2003
Broadcast cash flow	$	13,388		$	11,888		$	28,877		$	24,711		$	42,268		$	36,599
Corporate expenses		4,013			2,426			4,120			3,701			8,133			6,126

EBITDA as adjusted		9,375			9,462			24,757			21,010			34,135			30,473
Gain on sale of assets		(1,004	)		—			(2,392	)		—			(3,396	)		—
Non-cash stock-based compensation		(40	)		302			(2	)		846			(42	)		1,149
Depreciation and amortization		10,787			10,854			11,247			10,966			22,034			21,821

Operating loss		(368	)		(1,694	)
Operating income								15,904			9,198			15,539			7,503
Interest expense		(6,872	)		(6,311	)		(6,630	)		(7,112	)		(13,502	)		(13,422	)
Interest income		90			15			67			14			156			29

Loss before income taxes		(7,150	)		(7,990	)
Income tax benefit		2,036			1,652
Income (loss) before income taxes								9,341			2,100			2,193			(5,890	)
Income tax benefit (expense)								(4,320	)		(1,183	)		(2,284	)		470

Loss before equity in net loss of nonconsolidated affiliates		(5,114	)		(6,338	)
Equity in net loss of nonconsolidated affiliates		(111	)		(49	)
Income (loss) before equity in net earnings (loss) of nonconsolidated affiliates								5,021			917			(91	)		(5,420	)
Equity in net earnings (loss) of nonconsolidated affiliates								70			260			(41	)		211

Loss before discontinued operations		(5,225	)		(6,387	)
Income (loss) before discontinued operations								5,091			1,177			(132	)		(5,209	)
Loss from discontinued operations		—			(265	)		—			(1	)		—			(272	)

Net loss	$	(5,225	)	$	(6,652	)
Net income (loss)							$	5,091		$	1,176		$	(132	)	$	(5,481	)

Net Revenue. Net revenue increased to ~~$52.0~~$68.9 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$48.3~~$64.1 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$3.7~~$4.8 million. The overall increase came from our television and radio segments, which together accounted for an increase of ~~$4.1~~$4.9 million. The increase from these segments was attributable to increased advertising sold (referred to as “inventory” in our industry), and increased rates for that inventory. The overall increase in net revenue was partially offset by a decrease in revenue from our outdoor segment of $0.1 million.

Net revenue increased to $121.0 million for the six-month period ended June 30, 2004 from $112.4 million for the six-month period ended June 30, 2003, an increase of $8.6 million. The overall increase came from our television and radio segments, which together accounted for an increase of $9.1 million. The increase from these segments was attributable to increased inventory sold, increased rates for that inventory and increased revenue due to a full ~~three-month~~six-month period of operations of our 2003 acquisitions. The overall increase in net revenue was partially offset by a decrease in revenue from our outdoor segment of ~~$0.4~~$0.5 million.

We currently anticipate that the number of advertisers purchasing Spanish-language advertising will continue to rise and will result in greater demand for our inventory. We expect that this increased demand will, in turn, allow us to continue to increase our rates, resulting in continued increases in net revenue in future periods.

Direct Operating Expenses. Direct operating expenses increased to ~~$26.0~~$28.7 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$24.6~~$27.1 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$1.4~~$1.6 million. The overall increase came primarily from our television and radio segments, which together accounted for ~~$1.1~~$1.4 million of the increase. The increase from these segments was primarily attributable to an increase in commissions and national representation fees associated with the increase in net revenue and an increase in news costs due to the addition of newscasts. The overall increase also came from an increase in outdoor direct operating expenses, which accounted for $0.2 million of the overall increase. As a percentage of net revenue, direct operating expenses remained unchanged at 42% for each of the three-month periods ended June 30, 2004 and 2003.

Direct operating expenses increased to $54.7 million for the six-month period ended June 30, 2004 from $51.6 million for the six-month period ended June 30, 2003, an increase of $3.1 million. The overall increase came primarily from our television and radio segments, which together accounted for $2.5 million of the increase. The increase from these segments was primarily attributable to an increase in commissions and national representation fees associated with the increase in net revenue, an increase in ratings services

expenses, an increase in news costs due to the addition or expansion of newscasts and a full ~~three-month~~six-month period of operations of our 2003 acquisitions. The overall increase also came from an increase in outdoor direct operating expenses, which accounted for ~~$0.3~~$0.6 million of the overall increase. As a percentage of net revenue, direct operating expenses decreased to ~~50%~~45% for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 from ~~51%~~46% for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003. Direct operating expenses as a percentage of net revenue decreased because direct operating expense increases were outpaced by ~~higher~~ increases in net revenue.

We currently anticipate that, as our net revenue increases in future periods, our direct operating expenses correspondingly will continue to increase. However, on a long-term basis, we expect that net revenue increases will continue to outpace direct operating expense increases such that direct operating expenses as a percentage of net revenue will continue to decrease in future periods.

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~increased~~decreased to ~~$12.7~~$11.3 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$11.8~~$12.4 million for the three-month period ended ~~March 31,~~June 30, 2003, a decrease of $1.1 million. The overall decrease came from our television segment, which accounted for a decrease of $1.2 million. The decrease was primarily attributable to a one-time recovery of prior year expenses of $1.0 million in accordance with the terms of an amendment to our marketing and sales agreement with Univision and a reduction of losses incurred by our TeleFutura stations. The overall decrease was partially offset by an increase of ~~$0.9 million.~~$0.1 million from our radio segment. The ~~overall~~ increase ~~came~~from this segment was primarily ~~from~~attributable to an increase in ~~outdoor~~salaries and rent expense. As a percentage of net revenue, selling, general and administrative expenses decreased to 16% for the three-month period ended June 30, 2004 from 19% for the three-month period ended June 30, 2003. Selling, general and administrative expenses as a percentage of net revenue decreased because selling, general and administrative expenses decreased while net revenue increased.

Selling, general and administrative expenses decreased to $24.0 million for the six-month period ended June 30, 2004 from $24.2 million for the six-month period ended June 30, 2003, a decrease of $0.2 million. The overall decrease came from our television segment, which accounted for a decrease of $1.5 million. The decrease was primarily attributable to a one-time recovery of prior year expenses of $1.0 million in accordance with the terms of an amendment to our marketing and sales agreement with Univision and a reduction of losses incurred by our TeleFutura stations under the marketing and sales agreement of $0.5 million. The overall decrease was partially offset by an increase of $1.3 million ~~of the overall increase.~~from our radio and outdoor segments. The increase from ~~this segment~~these segments was primarily attributable to severance amounts paid to the former president of our outdoor ~~division. The overall increase also came from our television and radio segments, which~~

~~together accounted for $0.4 million of the increase. The increase from these segments was primarily attributable to~~division, an increase in ~~insurance costs,~~salaries, an increase in rent expense and a full ~~three-month~~six-month period of operations of our 2003 acquisitions. As a percentage of net revenue, selling, general and administrative expenses ~~remained unchanged at 24%~~decreased to 20% for ~~each~~the six-month period ended June 30, 2004 from 22% for the six-month period ended June 30, 2003. Selling, general and administrative expenses as a percentage of ~~the three-month periods ended March 31, 2004~~net revenue decreased because selling, general and ~~2003.~~administrative expenses decreased while net revenue increased.

On a long-term basis, although we currently anticipate that selling, general and administrative expenses will increase in future periods, we expect that net revenue increases will continue to outpace selling, general and administrative expense increases such that selling, general and administrative expenses as a percentage of net revenue will continue to decrease in future periods.

Corporate Expenses. Corporate expenses increased to ~~$4.0~~$4.1 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$2.4~~$3.7 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$1.6~~$0.4 million. The increase was primarily attributable to a ~~$1.5~~$0.5 million reimbursement from Univision in the ~~first~~second quarter of 2003 (offset by ~~$0.3~~$0.2 million of Univision-related expenses in the ~~first~~second quarter of 2003) for legal and other costs associated with the third-party information request that we received in connection with the merger between Univision and Hispanic Broadcasting Corporation. The increase was also attributable to higher wages and legal expenses, partially offset by lower insurance expenses. As a percentage of net revenue, corporate expenses remained unchanged at 6% for each of the three-month periods ended June 30, 2004 and ~~wages.~~2003. Excluding the prior year Univision reimbursement and related expenses, corporate expenses as a percentage of net revenue still remained unchanged at 6% for each of the three-month periods ended June 30, 2004 and 2003.

Corporate expenses increased to $8.1 million for the six-month period ended June 30, 2004 from $6.1 million for the six-month period ended June 30, 2003, an increase of $2.0 million. The increase was primarily attributable to a $2.0 million reimbursement from Univision in the first half of 2003 (offset by $0.5 million of Univision-related expenses in the first half of 2003) for legal and other costs associated with the third-party information request that we received in connection with the merger between Univision and Hispanic Broadcasting Corporation. The increase was also attributable to higher wages and legal expenses, partially offset by lower insurance expenses. As a percentage of net revenue, corporate expenses increased to 8%7% for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 from 5% for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003. Excluding the prior year Univision reimbursement and related expenses, corporate expenses as a percentage of net revenue remained unchanged at 8%7% for each of the ~~three-month~~six-month periods ended ~~March 31,~~June 30, 2004 and 2003.

We currently anticipate that corporate expenses will continue to increase in future periods, primarily due to higher accounting, legal and other costs associated with our compliance with the Sarbanes-Oxley Act of 2002. Nevertheless, we expect that these increases will be outpaced by net revenue increases such that corporate expenses as a percentage of net revenue will decrease in future periods.

Gain on Sale of Assets. Gain on sale of assets was ~~$1.0~~$2.4 million for the three-month period ended ~~March 31,~~June 30, 2004. The gain was primarily due to the sale of the assets of radio ~~station~~stations WRZA-FM, WZCH-FM and WNDZ-AM in the Chicago, Illinois market. Gain on sale of assets was $3.4 million for the six-month period ended June 30, 2004. The gain was primarily due to the sale of the assets of radio stations WRZA-FM, WZCH-FM and WNDZ-AM in the Chicago, Illinois market and KZFO-FM in the Fresno, ~~California.~~California market.

Depreciation and Amortization. Depreciation and amortization ~~decreased~~increased to ~~$10.8~~$11.2 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$10.9~~$11.0 million for the three-month period ended ~~March 31,~~June 30, 2003, ~~a decrease~~an increase of ~~$0.1~~$0.2 million. Depreciation and amortization increased to $22.0 million for the six-month period ended June 30, 2004 from $21.8 million for the six-month period ended June 30, 2003, an increase of $0.2 million.

Non-Cash Stock-Based Compensation. Non-cash stock-based compensation decreased to $0 for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$0.3~~$0.8 million for the three-month period ended ~~March 31,~~June 30, 2003, a decrease of ~~$0.3~~$0.8 million. Non-cash stock-based compensation decreased to $0 for the six-month period ended June 30, 2004 from $1.1 million for the six-month period ended June 30, 2003, a decrease of $1.1 million. Non-cash stock-based compensation consists primarily of compensation expense relating to restricted and unrestricted stock awards granted to our employees during the second quarter of 2000. As of May 2003, all non-cash stock-based compensation expense related to the restricted and unrestricted stock awards made in 2000 has been fully recognized. However, there will continue to be non-cash stock-based compensation costs in the future for any equity instruments that have been or may be granted to non-employees.

Operating ~~Loss.~~Income. As a result of the above factors, operating ~~loss decreased~~income increased to ~~$0.4~~$15.9 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$1.7~~$9.2 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of $6.7 million. As a ~~decrease~~result of ~~$1.3~~the above factors, operating income increased to $15.5 million for the six-month period ended June 30, 2004 from $7.5 million for the six-month period ended June 30, 2003, an increase of $8.0 million.

Interest Expense. Interest expense ~~increased~~decreased to ~~$6.9~~$6.6 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$6.3~~$7.1 million for the three-month period ended ~~March 31,~~June 30, 2003, a decrease of $0.5 million. The decrease was primarily attributable to a reduction of indebtedness paid from the proceeds of the disposal of our publishing operations in July 2003, the sale of our radio assets in the Fresno, California and Chicago, Illinois markets and cash flow generated from operations.

Interest expense increased to $13.5 million for the six-month period ended June 30, 2004 from $13.4 million for the six-month period ended June 30, 2003, an increase of ~~$0.6~~$0.1 million. The ~~overall~~ increase was primarily attributable to ~~$100 million of~~ additional borrowings under our bank credit facility in April 2003, ~~to fund the cash portion of the purchase price for the three radio stations we acquired from Big City Radio. The increase was~~ partially offset by a reduction of indebtedness paid from the proceeds ~~from~~of the disposal of our publishing operations in July 2003, the sale of our radio assets in the Fresno, California and ~~from~~Chicago, Illinois markets and cash flow generated from operations.

Income Tax Benefit. Our expected tax rate is approximately 40% of pre-tax income or loss, adjusted for permanent tax differences. For the years ended December 31, 2003 and 2002, the tax benefit was less than the expected 40% of the pre-tax loss because of the non-deductible portion of certain items, including non-cash stock-based compensation for financial statement purposes that will not be deductible for tax purposes, state taxes, foreign taxes, the expected disallowance of state net operating loss carryforward amounts and meals and entertainment. We currently have approximately $128 million in net operating loss carryforwards expiring through 2023 that we expect will be utilized prior to their expiration.

~~Loss~~Income (Loss) Before Discontinued Operations. As a result of the above factors, income before discontinued operations increased to $5.1 million for the three-month period ended June 30, 2004 from $1.2 million for the three-month period ended June 30, 2003, an increase of $3.9 million. As a result of the above factors, loss before discontinued operations decreased to $0.1 million for the six-month period ended June 30, 2004 from $5.2 million for the ~~three-month~~six-month period ended ~~March 31, 2004 from $6.4 million for the three-month period ended March 31,~~June 30, 2003, a decrease of ~~$1.2~~$5.1 million.

Net Revenue. Net revenue in our television segment increased to ~~$27.6~~$36.0 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$25.5~~$32.4 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$2.1~~$3.6 million. Of the overall increase, ~~$1.9~~$3.0 million was attributable to our Univision stations and ~~$0.2~~$0.6 million was attributable to our other stations. The overall increase was primarily attributable to an increase in both local and national advertising sales due to an increase in rates.

Net revenue in our television segment increased to $63.6 million for the six-month period ended June 30, 2004 from $57.8 million for the six-month period ended June 30, 2003, an increase of $5.8 million. Of the overall increase, $4.9 million was

attributable to our Univision stations and $0.9 million was attributable to our other stations. The overall increase was primarily attributable to an increase in both local and national advertising sales due to a combination of an increase in rates and inventory sold.

Direct Operating Expenses. Direct operating expenses in our television segment increased to $13.9 million for the three-month period ended June 30, 2004 from $12.6 million for the three-month period ended ~~March 31, 2004 from $11.8 million for the three-month period ended March 31,~~June 30, 2003, an increase of ~~$0.8~~$1.3 million. The increase was primarily attributable to an increase in national representation fees and commissions associated with the increase in net revenue, an increase in the cost of ratings services and an increase in news costs due to the addition of newscasts in the Santa Barbara market.

Direct operating expenses in our television segment increased to $26.6 million for the six-month period ended June 30, 2004 from $24.5 million for the six-month period ended June 30, 2003, an increase of $2.1 million. The increase was primarily attributable to an increase in national representation fees and commissions associated with the increase in net revenue, an increase in the cost of ratings services and an increase in news costs due to the addition or expansion of newscasts in the San Diego, Santa Barbara and Boston markets.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our television segment decreased to ~~$5.5~~$4.5 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$5.8~~$5.7 million for the three-month period ended ~~March 31,~~June 30, 2003, a decrease of ~~$0.3~~$1.2 million. The decrease was primarily attributable to ~~operational improvements~~a one-time recovery of prior year expenses of $1.0 million in accordance with the terms of an amendment to our marketing and sales agreement with Univision. Additionally, selling, general and administrative expenses decreased by $0.4 million due to a reduction of losses incurred by our TeleFutura ~~stations.~~stations under the marketing and sales agreement, which were partially offset by increases in salaries.

Selling, general and administrative expenses in our television segment decreased to $10.0 million for the six-month period ended June 30, 2004 from $11.5 million for the six-month period ended June 30, 2003, a decrease of $1.5 million. The decrease was primarily attributable to a one-time recovery of prior year expenses of $1.0 million in accordance with the terms of an amendment to our marketing and sales agreement with Univision. Additionally, selling, general and administrative expenses decreased by $0.5 million due to a reduction of losses incurred by our TeleFutura stations under the marketing and sales agreement

Net Revenue. Net revenue in our radio segment increased to ~~$18.3~~$24.7 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$16.3~~$23.5 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$2.0~~$1.2 million. The increase was primarily attributable to a combination of an increase in local sales rates and inventory sold, ~~by Lotus/Entravision Reps LLC, as well as~~primarily from our Los Angeles market.

Net revenue ~~associated with~~in our radio segment increased to $43.0 million for the six-month period ended June 30, 2004 from $39.7 million for the six-month period ended June 30, 2003, an increase of $3.3 million. The increase was primarily attributable to a combination of an increase in local sales rates and inventory sold and increased revenue due to a full ~~three-month~~six-month period of operations of our 2003 acquisitions. ~~Lotus/Entravision Reps is a joint venture we entered into in August 2001 with Lotus Hispanic Reps Corp.~~

Direct Operating Expenses. Direct operating expenses in our radio segment increased to ~~$8.1~~$9.2 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$7.8~~$9.1 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$0.3~~$0.1 million. The increase was primarily attributable to an increase in local commissions and ~~national representation fees associated with~~other sales related expenses due to the increase in net ~~revenue~~revenue.

Direct operating expenses in our radio segment increased to $17.3 million for the six-month period ended June 30, 2004 from $16.9 million for the six-month period ended June 30, 2003, an increase of $0.4 million. The increase was primarily attributable to an increase in local commissions and ~~a full three-month period of operations of our 2003 acquisitions.~~other sales related expenses due to the increase in net revenue.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our radio segment increased to ~~$5.6~~$5.7 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$5.0~~$5.5 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$0.6~~$0.2 million. The increase was primarily attributable to an increase in salaries ~~increase in~~and rent ~~expense and a full three-month period of operations of our 2003 acquisitions.~~expense.

Selling, general and administrative expenses in our radio segment increased to $11.3 million for the six-month period ended June 30, 2004 from $10.5 million for the six-month period ended June 30, 2003, an increase of $0.8 million. The increase was primarily attributable to an increase in salaries and rent expense.

Net Revenue. Net revenue in our outdoor segment decreased to ~~$6.2~~$8.2 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$6.5~~$8.3 million for the three-month period ended ~~March 31,~~June 30, 2003, a decrease of ~~$0.3~~$0.1 million. The decrease was attributable to a decrease in national advertising sales, which was partially offset by an increase in local advertising sales.

Net revenue in our outdoor segment decreased to $14.3 million for the six-month period ended June 30, 2004 from $14.8 million for the six-month period ended June 30, 2003, a decrease of $0.5 million. The decrease was attributable to a decrease in national advertising sales, which was partially offset by an increase in local advertising sales.

We currently anticipate that net revenue from our outdoor segment will ~~continue to be flat~~increase moderately in ~~the short term primarily due to weakened demand in our Los Angeles market. In~~ the latter half of ~~2003, however, we currently anticipate moderate increases~~2004 due to increased market demand resulting in ~~net revenue from~~greater occupancy on our ~~outdoor segment.~~billboards.

Direct Operating Expenses. Direct operating expenses in our outdoor segment increased to $5.6 million for the three-month period ended June 30, 2004 from $5.3 million for the three-month period ended ~~March 31, 2004 from $4.9 million for the three-month period ended March 31,~~June 30, 2003, an increase of ~~$0.4~~$0.3 million. The increase was primarily attributable to higher lease rents for our billboard locations.

Direct operating expenses in our outdoor segment increased to $10.8 million for the six-month period ended June 30, 2004 from $10.2 million for the six-month period ended June 30, 2003, an increase of $0.6 million. The increase was primarily attributable to higher lease rents for our billboard locations.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our outdoor segment were flat at $1.1 million for each of the three-month periods ended June 30, 2004 and 2003.

Selling, general and administrative expenses in our outdoor segment increased to ~~$1.5~~$2.6 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 from ~~$1.1~~$2.2 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003, an increase of $0.4 million. The increase was primarily attributable to severance amounts paid to the former president of our outdoor division.

While we have a history of operating losses, we also have a history of generating significant positive cash flow from our operations. We expect to fund anticipated cash requirements (including acquisitions, anticipated capital expenditures, payments of principal and interest on outstanding indebtedness and share repurchases) with cash flow from operations and externally generated funds, such as proceeds from any debt or equity offering and our bank credit facility. ~~As noted above under “Subsequent Event,” we~~

have entered into a Share Repurchase Agreement with the holder of all of our outstanding Series A preferred stock under which we agreed to purchase the Series A preferred stock for a cash price that may vary depending on when we close the purchase. We expect that we will finance our obligations under the Share Repurchase Agreement with external sources of funds and that any such financing will be supplemented by additional borrowings under our bank credit facility. Currently, we are actively seeking external financing and expect that, in connection therewith, we will amend our bank credit facility to, among other things, adjust upward the covenant relating to maximum total debt ratio. We currently anticipate that ~~except in connection with the repurchase of our Series A preferred stock,~~ funds generated from operations and available borrowings under our existing bank credit facility will be sufficient to meet our anticipated cash requirements for the foreseeable future.

Recently, we have taken the following actions with respect to matters affecting our liquidity and capital resources:

Please see “Bank Credit Facility” and “Series A Mandatorily Redeemable Convertible Preferred Stock” below.

~~Our~~As we announced on July 23, 2004, we currently anticipate refinancing our existing bank credit facility with a new $400 million senior secured facility, expected to consist of a 6 ½-year revolver and a 7 ½-year term loan. We intend to use the proceeds of loans made under the new facility to refinance outstanding borrowings under our existing bank credit facility and for general corporate purposes, as well as to fund the anticipated repurchase of the remaining shares of our Series A preferred stock by June 30, 2005.

Currently, our primary sources of liquidity are cash provided by operations and available borrowings under our existing bank credit facility. ~~We have a~~That existing $400 million bank credit facility is comprised of a $250 million revolving facility and a $150 million incremental loan facility. In November 2003, we obtained commitments from participating banks for $50 million of the total amount

available under the incremental loan facility. Our ability to borrow the remaining $100 million under the incremental loan facility remains subject to additional bank commitments.

The revolving facility expires in 2007 and our ability to draw under the incremental loan facility expires in September 2004. The incremental loan facility had been due to expire in September 2003, but we amended our bank credit facility in that month to extend its maturity for an additional year. The original $250 million amount of the revolving facility is subject to an automatic quarterly reduction, and had been reduced to ~~$203~~$194 million as of ~~March 31,~~June 30, 2004. Our ability to make additional borrowings under the bank credit facility is subject to compliance with certain financial ratios and other conditions set forth in the bank credit facility.

Our bank credit facility is secured by substantially all of our assets, as well as the pledge of the stock of substantially all of our subsidiaries, including our special purpose subsidiary formed to hold our Federal Communications Commission, or FCC, licenses.

In connection with the issuance of our senior subordinated notes (discussed below under the caption “Debt and Equity Financing”), we amended our bank credit facility to conform to certain provisions in the indenture governing our senior subordinated notes. On April 16, 2003, we further amended our bank credit facility in connection with our acquisition of three radio stations from Big City Radio to, among other things, adjust upward the existing covenants relating to maximum total debt ratio and remove the existing cap on the incurrence of subordinated indebtedness. On May 10, 2004, in connection with the anticipated repurchase of our Series A preferred stock, we again amended our bank credit facility to, among other things, further adjust upward the existing covenants relating to maximum total debt ratio. Please see “Broadcast Cash Flow and EBITDA as Adjusted” below.

The revolving facility bears interest at LIBOR ~~(1.125%~~(1.625% at ~~March 31,~~June 30, 2004) plus a margin ranging from 0.875% to 3.25% based on our leverage. In addition, we pay a quarterly loan commitment fee ranging from 0.25% to 0.75% per annum, which is levied upon the unused portion of the amount available. As of ~~March 31,~~June 30, 2004, ~~$126~~$90 million was outstanding under our bank credit facility and ~~$77~~$104 million was available for future borrowings. On July 1, 2004, we drew an additional $50 million under the bank credit facility to fund, together with available cash on hand, the repurchase of 2,542,006 shares of our Series A preferred stock from TSG Capital.

Our bank credit facility contains a mandatory prepayment clause, triggered in the event that we liquidate any assets if the proceeds are not utilized to acquire assets of the same type within 180 days, receive insurance or condemnation proceeds which are not fully utilized toward the replacement of such assets or have excess cash flow, as defined in our bank credit facility, 50% of which excess cash flow shall be used to reduce our outstanding loan balance.

Our bank credit facility contains certain financial covenants relating to maximum total debt ratio, minimum total interest coverage ratio and fixed charge coverage ratio. The covenants become increasingly restrictive in the later years of the bank credit facility. Our bank credit facility also requires us to maintain our FCC licenses for our broadcast properties and contains restrictions on the incurrence of additional debt, the payment of dividends, the making of acquisitions and the sale of assets over a certain limit. Additionally, we are required to enter into interest rate agreements if our leverage exceeds certain limits.

We can draw on our revolving facility without prior approval for working capital needs and for acquisitions having an aggregate maximum consideration of less than $25 million. Acquisitions having an aggregate maximum consideration of $25 million or greater but less than or equal to $100 million are conditioned upon our delivery to the agent bank of a covenant compliance certificate showing pro forma calculations assuming such acquisition had been consummated and revised revenue projections for the acquired stations. For acquisitions having an aggregate maximum consideration in excess of $100 million, majority lender consent of the bank group is required.

On April 16, 2003, we issued 3,766,478 shares of our Class A common stock as a portion of the purchase price for the three radio stations we acquired from Big City Radio.

On May 9, 2002, we filed a shelf registration statement with the SEC to register up to $500 million of equity and debt securities, which we may offer from time to time. That shelf registration statement has been declared effective by the SEC. We have not yet issued any securities under the shelf registration statement. We intend to use the proceeds of any issuance of securities under the shelf registration statement to fund acquisitions or capital expenditures, to reduce or refinance debt or other obligations and for general corporate purposes.

On March 18, 2002, we issued $225 million of our senior subordinated notes due 2009. The senior subordinated notes bear interest at 8¹/8% per year, payable semi-annually on March 15 and September 15 of each year. The net proceeds from our senior subordinated notes were used to repay all indebtedness then outstanding under our bank credit facility and for general corporate purposes.

Broadcast cash flow (as defined below) increased to ~~$13.4~~$28.9 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$11.9~~$24.7 million for the three-month period ended ~~March 31,~~June 30, 2003, an increase of ~~$1.5~~$4.2 million, or ~~13%~~17%. As a percentage of net revenue, broadcast cash flow increased to ~~26%~~42% for the three-month period ended ~~March 31,~~June 30, 2004 from ~~25%~~39% for the three-month period ended ~~March 31,~~June 30, 2003.

Broadcast cash flow increased to $42.3 million for the six-month period ended June 30, 2004 from $36.6 million for the six-month period ended June 30, 2003, an increase of $5.7 million, or 15%. As a percentage of net revenue, broadcast cash flow increased to 35% for the six-month period ended June 30, 2004 from 33% for the six-month period ended June 30, 2003.

We currently anticipate that broadcast cash flow will continue to increase in future periods, both in absolute dollars and as a percentage of net revenue, as we believe that net revenue increases will continue to outpace increases in direct operating and selling, general and administrative expenses.

EBITDA as adjusted (as defined below) ~~decreased~~increased to ~~$9.4~~$24.8 million for the three-month period ended ~~March 31,~~June 30, 2004 from ~~$9.5~~$21.0 million for the three-month period ended ~~March 31,~~June 30, 2003, ~~a decrease~~an increase of ~~$0.1~~$3.8 million, or ~~1%. Excluding the $1.2 million net reimbursement from Univision in 2003, EBITDA as adjusted increased $1.2 million, or 14%~~18%. As a percentage of net revenue, EBITDA as adjusted ~~decreased~~increased to ~~18%~~36% for the three-month period ended ~~March 31,~~June 30, 2004 from ~~20%~~33% for the three-month period ended ~~March 31,~~June 30, 2003. ~~Excluding the $1.2 million net reimbursement from Univision,~~

EBITDA as adjusted asincreased to $34.1 million for the six-month period ended June 30, 2004 from $30.5 million for the six-month period ended June 30, 2003, an increase of $3.6 million, or 12%. As a percentage of net revenue, EBITDA as adjusted increased to ~~18%~~28% for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 from ~~17%~~27% for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003.

We currently anticipate that EBITDA as adjusted will continue to increase in future periods, both in absolute dollars and as a percentage of net revenue, as we believe that net revenue increases will continue to outpace increases in direct operating, ~~and~~ selling, general and administrative and corporate expenses.

Broadcast cash flow means operating loss before corporate expenses, gain on sale of assets, depreciation and amortization and non-cash stock-based compensation. EBITDA as adjusted means broadcast cash flow less corporate expenses. We use the term EBITDA as adjusted because that measure does not include non-cash stock-based compensation. We evaluate and project the liquidity and cash flows of our business using several measures, including broadcast cash flow and EBITDA as adjusted. We consider these measures as important indicators of liquidity relating to our operations, as they eliminate the effects of non-cash gain on sale of assets, non-cash depreciation and amortization and non-cash stock-based compensation awards. We use these measures to evaluate liquidity and cash flow improvement from year to year as they eliminate non-cash expense items. We believe that our investors should use these measures because they may provide a better comparability of our liquidity to that of our competitors.

While we and many in the financial community consider broadcast cash flow and EBITDA as adjusted to be important, they should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. In addition, our definitions of broadcast cash flow and EBITDA as adjusted differ from those of many companies reporting similarly named measures.

Broadcast cash flow and EBITDA as adjusted are non-GAAP measures. For a reconciliation of each of broadcast cash flow and EBITDA as adjusted to net loss, their most directly comparable GAAP financial measure, please see page16.

Net cash flow provided by operating activities increased to ~~$5.6~~$16.6 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 from ~~$1.0~~$14.3 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003.

Net cash flow provided ~~from~~by investing activities was ~~$5.6~~$31.0 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 compared to net cash flow used in investing activities of ~~$6.0~~$110.1 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003. WeDuring the six-month period ended June 30, 2004, we received proceeds of ~~$8.2~~$37.0 million from the sale of assets, primarily radio ~~station~~stations KZFO-FM in the Fresno, California market and WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market. We also received a refund of a deposit of $0.5 million, received a return of capital of $0.3 million and spent ~~$3.4~~$6.8 million on capital expenditures.

Net cash flow used byin financing activities was ~~$17.6~~$54.5 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004 compared to net cash flow provided ~~from~~by financing activities of ~~$0.3~~$92.6 million for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2003. During the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2004, we borrowed $34 million under our incremental loan facility and paid ~~$52~~$89 million under our revolving ~~facility.~~and incremental loan facilities. We received net proceeds of ~~$0.4~~$0.6 million from the exercise of stock options issued under our 2000 Omnibus Equity Incentive Plan and from the sale of shares issued under our 2001 Employee Stock Purchase ~~Plan, or the Employee Stock Purchase~~ Plan.

During the remainder of 2004, we anticipate that our capital expenditures will be approximately ~~$13~~$10 million, including approximately $0.4 million in digital television capital expenditures. We anticipate paying for these capital expenditures out of net cash flow from operations.

As part of the transition from analog to digital television, full-service television station owners may be required to stop broadcasting analog signals and to relinquish their analog channels to the FCC by 2006 if the market penetration of digital television receivers reaches certain levels by that time. We currently expect that the cost to complete construction of digital television facilities for our full-service television stations between 2004 and 2006 will be approximately $17 million. In addition, we will be required to broadcast both digital and analog signals through this transition period, but we do not expect those incremental costs to be significant. We intend to finance the conversion to digital television out of cash flow from operations. The amount of our anticipated capital expenditures may change based on future changes in business plans, our financial condition and general economic conditions.

We continually review, and are currently reviewing, opportunities to acquire additional television and radio stations, as well as other broadcast or media opportunities targeting the Hispanic market in the United States. We expect to finance any future acquisitions through funds generated from operations, borrowings under our bank credit facility and additional debt and equity financing. Any additional financing, if needed, might not be available to us on reasonable terms or at all. Any failure to raise capital when needed could seriously harm our business and our acquisition strategy. If additional funds are raised through the issuance of equity securities, the percentage of ownership of our existing stockholders will be reduced. Furthermore, these equity securities might have rights, preferences or privileges senior to those of our Class A common stock.

As noted above under “Subsequent ~~Event,”~~Event” in Note 2 to Consolidated Financial Statements, on July 2, 2004 we ~~have entered into~~repurchased 2,542,006 shares of our Series A mandatorily redeemable convertible preferred stock from TSG Capital Fund III, L.P. for $55 million, funded by additional borrowings of $50 million under our existing bank credit facility and available cash on hand of $5 million. Under a revised Share Repurchase Agreement with TSG Capital, we agreed to repurchase the ~~holder~~remaining 3,323,096 shares of ~~all of our outstanding~~ Series A preferred stock ~~under which we agreed~~from TSG Capital by June 30, 2005, subject to ~~purchase~~ the ~~Series A preferred stock~~approval of our Board of Directors and subject to our having entered into, by September 30, 2004, a senior bank refinancing transaction of at least $400 million on terms acceptable to us in our sole discretion. The price of the anticipated repurchase reflects a small premium to the liquidation value at the time of such repurchase. The revised Share Repurchase Agreement replaced in its entirety the prior Share Repurchase Agreement described in our Quarterly Report on Form 10-Q for ~~a cash price that may vary depending on when we close~~ the ~~purchase.~~ quarter ended March 31, 2004.

In the event that we do not close the repurchase of our Series A preferred stock as we currently anticipate, it is important to note that the holders of a majority of our Series A preferred stock currently have the right on or after April 19, 2006 to require us to redeem any and all or their preferred stock at the original issue price plus accrued dividends. On April 19, 2006 such redemption price on the remaining 3,323,096 shares of Series A preferred stock will be ~~$143.5~~$82.3 million, and our Series A preferred stock would continue to accrue a dividend of 8.5% per year. The remaining outstanding Series A preferred stock is convertible into ~~5,865,102~~3,323,096 shares of our Class A common stock at the option of the holder at anytime. If, however, we do not repurchase our outstanding Series A preferred stock and the holders thereof do not elect to convert their shares of Series A preferred stock into shares of our Class A common stock and, as a result, we are required to pay the redemption price in 2006, we anticipate that we would finance such payment with borrowings under our bank credit facility or the proceeds of any debt or equity offering.

We have agreements with certain media research and ratings providers, expiring at various dates through December 2006, to provide television and radio audience measurement services. We lease facilities and broadcast equipment under various operating lease agreements with various terms and conditions, expiring at various dates through December 2025.

Our material contractual obligations at ~~March 31,~~June 30, 2004 are as follows ~~(in~~(unaudited; in thousands):


	Payments Due by Period										Payments Due by Period
Contractual Obligations	Total amounts committed		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total amounts committed		Less than 1 year		1-3 years		3-5 years		More than 5 years
Senior subordinated notes	$	225,000	$	—	$	—	$	225,000	$	—	$	225,000	$	—	$	—	$	225,000	$	—
Series A preferred stock (1)		143,482		—		143,482		—		—		137,284		55,000		82,284		—		—
Bank credit facility and other borrowings		134,578		1,186		53,283		76,075		4,034		97,551		1,179		54,730		39,640		2,002
Media research and ratings providers (2)		19,891		7,828		12,063		—		—		19,891		7,828		12,063		—		—
Operating leases (2)(3)		68,600		9,100		16,900		11,900		30,700		68,600		9,100		16,900		11,900		30,700

Total contractual obligations	$	591,551	$	18,114	$	225,728	$	312,975	$	34,734	$	548,326	$	73,107	$	165,977	$	276,540	$	32,702

We have also entered into employment agreements with certain of our key employees, including ~~Messrs.~~Walter F. Ulloa, Philip C. Wilkinson, Jeffery A. Liberman and John F. DeLorenzo. Our obligations under these agreements are not reflected in the table above.

Other than lease commitments, legal contingencies incurred in the normal course of business, ~~and~~ employment contracts for key employees and the interest rate swap agreements described more fully in Item 3 below, we do not have any off-balance sheet financing arrangements or liabilities. We do not have any majority-owned subsidiaries or any interests in or relationships with any special-purpose entities that are not included in the consolidated financial statements.

On March 19, 2001, our Board of Directors approved a stock repurchase program. We are authorized to repurchase up to $35 million of our outstanding Class A common stock from time to time in open market transactions at prevailing market prices, block trades and private repurchases. The extent and timing of any repurchases will depend on market conditions and other factors. We intend to finance stock repurchases, if and when made, with our available cash on hand and cash provided by operations. To date, no shares of Class A common stock have been repurchased under the stock repurchase program.

On April 4, 2001, our Board of Directors adopted the 2001 Employee Stock Purchase Plan. Our stockholders approved the Employee Stock Purchase Plan on May 10, 2001 at our 2001 Annual Meeting of Stockholders. Subject to adjustments in our capital structure, as defined in the Employee Stock Purchase Plan, the maximum number of shares of our Class A common stock that will be made available for sale under the Employee Stock Purchase Plan is 600,000, plus an annual increase of up to 600,000 shares on the first day of each of the ten calendar years beginning on January 1, 2002. All of our employees are eligible to participate in the Employee Stock Purchase Plan, provided that they have completed six months of continuous service as employees as of an offering date. There are two offering periods annually under the Employee Stock Purchase Plan, one which commences on February 15 and concludes on August 14, and the other which commences on August 15 and concludes on the following February 14. As of ~~March 31,~~June 30, 2004, approximately 272,106 shares had been purchased under the Employee Stock Purchase Plan.

Market risk represents the potential loss that may impact our financial position, results of operations or cash flows due to adverse changes in the financial markets. We are exposed to market risk from changes in the base rates on our variable rate debt. Under our bank credit facility, if we exceed certain leverage ratios we would be required to enter into derivative financial instrument

transactions, such as swaps or interest rate caps, in order to manage or reduce our exposure to risk from changes in interest rates. Under no circumstances do we enter into derivatives or other financial instrument transactions for speculative purposes.

Our revolving facility loan bears interest at a variable rate at LIBOR ~~(1.125%~~(1.625% as of ~~March 31,~~June 30, 2004) plus a margin ranging from 0.875% to 3.25% based on our leverage. As of ~~March 31,~~June 30, 2004, we had ~~$126~~$90 million of variable rate bank debt outstanding. Our bank credit facility requires us to enter into interest rate agreements if our leverage exceeds certain limits as defined in the agreement. We have two interest rate swap agreements, each with a notional amount of $82.5 million. The first agreement provides for a LIBOR-based rate floor of 1% and rate ceiling of 6% and terminates on March 31, 2005. The second agreement, which begins after the first

agreement expires, provides for a LIBOR-based rate floor of 1.78% and rate ceiling of 7% and terminates on March 31, 2006. Because this portion of our long-term debt is subject to interest at a variable rate, our earnings will be affected in future periods by changes in interest rates. In the event that the LIBOR rate falls below the floor rate, we would still have to pay the floor rate plus the margin based on our leverage at such time. If the LIBOR rate falls below the floor rate during or close to the swap agreement period we would record the fair market value as a liability on the balance sheet and interest expense on the income statement. In the event that the LIBOR rate rises above the ceiling rate, we would only have to pay the ceiling rate plus the applicable margin. The fair market value of the swap would be recorded as an asset on the balance sheet and a reduction of interest expense on the income statement. Due to the short-term nature of these agreements and ~~the~~our projection that the interest rate floor or ceiling will not be reached during the term, the estimated fair value of these agreements is zero as of ~~March 31,~~June 30, 2004.

We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) that is required to be included in our periodic SEC reports. There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We currently and from time to time are involved in litigation incidental to the conduct of our business, but we are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us.

~~None.~~No repurchases of equity securities required to be disclosed by this item were consummated pursuant to our stock repurchase program during the period covered by this report, and no repurchases of our equity securities have been consummated pursuant to our stock repurchase program since it was approved by our Board of Directors on March 19, 2001. Our stock repurchase program was publicly announced on that same date, and authorizes us to repurchase up to $35 million of our outstanding Class A common stock.

~~None.~~We held our annual meeting of stockholders on May 26, 2004. At that meeting, our Class A and Class B stockholders:

1. Elected eight Class A/B directors to serve until our 2005 annual meeting of stockholders or until his or her successor is duly elected and qualified:

2. Amended and restated our certificate of incorporation to, among other things, authorize the creation of the Class U common stock issued to Univision upon conversion of our Series U preferred stock:

3. Adopted the Entravision Communications Corporation 2004 Equity Incentive Plan:

4. Ratified the appointment of McGladrey & Pullen, LLP, as our independent auditors for the current fiscal year:

We filed one Current Report on Form 8-K with the SEC during the quarter ended ~~March 31,~~June 30, 2004:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Page Number

	PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

	CONSOLIDATED BALANCE SHEETS AS OF ~~MARCH 31,~~JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003	4

	CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE ~~THREE-MONTH~~THREE- AND SIX-MONTH PERIODS ENDED ~~MARCH 31,~~JUNE 30, 2004 AND ~~MARCH 31,~~JUNE 30, 2003	5

	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE ~~THREE-MONTH~~SIX-MONTH PERIODS ENDED ~~MARCH 31,~~JUNE 30, 2004 AND ~~MARCH 31,~~JUNE 30, 2003	6

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	7

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2224

ITEM 4.	CONTROLS AND PROCEDURES	2325

	PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	2426

ITEM 2.	CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES	2426

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2426

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	2426

ITEM 5.	OTHER INFORMATION	2427

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K	2427


Name	For	Withheld
Walter F. Ulloa	323,306,925	8,076,348
Philip C. Wilkinson	323,071,110	8,312,163
Paul A. Zevnik	323,049,361	8,333,912
Darryl B. Thompson	313,422,873	17,960,400
Michael S. Rosen	321,875,448	9,507,825
Esteban E. Torres	322,273,068	9,110,205
Patricia Diaz Dennis	322,545,360	8,837,913
Jesse Casso, Jr.	322,545,340	8,837,933


Votes For		305,435,748
Votes Against		21,557,861
Abstentions		29,510
Broker Non-Votes		4,360,154


Votes For		305,717,918
Votes Against		21,291,901
Abstentions		13,300
Broker Non-Votes		4,360,154


Votes For		329,158,263
Votes Against		2,220,188
Abstentions		4,822
Broker Non-Votes		0


	Three-Month Period Ended June 30, 2004					Three-Month Period Ended June 30, 2003
	Income (Numerator)		Shares (Denominator)	Per Share Amount		Income (Numerator)			Shares (Denominator)	Per Share Amount
Basic earnings per share:
Net income (loss) applicable to common stockholders	$	1,978	87,178,430	$	0.02	$	(1,623	)	123,235,021	$	(0.01	)

Effect of dilutive securities
Series U convertible preferred stock		—	36,926,600				—		—
Stock options		—	349,224				—		—

Diluted earnings per share:
Net income (loss) applicable to common stockholders	$	1,978	124,454,254	$	0.02	$	(1,623	)	123,235,021	$	(0.01	)



3.1		Second Amended and Restated Certificate of Incorporation

10.1		~~Master Network Affiliation Agreement, dated as of August 14, 2002, by and between Entravision Communications Corporation and Univision Network Limited Partnership~~2004 Equity Incentive Plan

10.2		~~Master Network Affiliation~~Fifth Amendment to Credit Agreement, dated as of ~~March 17,~~May 10, 2004, among Entravision Communications Corporation, the Lenders (as defined therein), Union Bank of California, N.A., Credit Suisse First Boston, The Bank of Nova Scotia and Fleet National Bank

10.3		Share Repurchase Agreement, dated as of June 25, 2004, by and between Entravision Communications Corporation and ~~TeleFutura~~TSG Capital Fund III, L.P.

31.1		Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

31.2		Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

32		Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


ENTRAVISION COMMUNICATIONS CORPORATION

By:		/s/ JOHN F. DELORENZO

		John F. DeLorenzo Executive Vice President, Treasurer and Chief Financial Officer