Programming Distribution and Markets (Subscriber Base) The following table sets forth information regarding the markets in which TVA operates pay television systems and distributes programming (as of September 30, 1999): Average Pay Television Class ABC Revenue per Programming Service Launch TV TV Month per Channels Date Homes(a) Homes(a) Subscribers Subscriber Offered -------------- -------------- -------------- -------------- -------------- -------------- Owned Systems MMDS TVA Sistema Sao Paulo ............ September 1991 4,367,286 2,955,793 60,312 25.33 30 Rio de Janeiro ....... March 1992 3,015,016 1,397,624 92,259 25.23 29 TVA Sul Curitiba ............. March 1992 639,794 328,184 12,692 19.43 15 Cable(b) TVA Sistema Sao Paulo ............ October 1994 2,630,425 1,917,608 99,924 26.63 56 TVA Sul Curitiba ............. January 1995 379,704 263,560 19,653 23.01 44 Camboriu ............. June 1996 37,618 22,686 6,491 23.26 51 Foz do Iguacu ........ June 1996 46,669 29,151 8,510 19.84 55 Florianopolis ........ September 1996 155,382 53,001 5,331 26.85 49 -------------- Total MMDS and Cable Subscribers ............... -- -- -- 305,172 25.13 -- Subscribers Awaiting Installation .............. -- -- -- 2,869 -- -- -------------- Total Subscribers-Owned Systems ................... -- -- -- 308,041 -- -- Households Receiving TVA Programming Owned Systems ............. -- -- -- 308,041 -- -- -------------- Operating Ventures MMDS TV Filme, Inc. Brasilia ............. July 1993 464,473 273,135 40,492 N/A 27 Goiania .............. December 1994 319,434 140,498 7,989 N/A 25 Belem ................ December 1994 197,293 123,820 19,285 N/A 25 Campina Grande ....... August 1999 N/A 23,142 2,043 N/A 24 Cable Canbras TVA Ten cities(c) ........ April 1996 222,358 152,773 80,462 -- 50 -------------- Total-Operating Ventures -- -- -- 150,271 -- -- Independent Operators (52 Independent Operators)........... -- -- -- 212,033 -- -- -------------- Total ..................... -- -- -- 670,345 -- -- (a) This data is based on information provided by Pay TV Survey and IBGE. (b) The Company's Cable Systems in Sao Paulo, Curitiba, Camboriu, Foz do Iguacu and Florianopolis had approximately 797,988, 196,223, 18,055, 19,900 and 29,822 Homes Passed, respectively, as of September 30, 1999. (c) The ten cities served by Canbras TVA are Santo Andre, Sao Bernardo, Mogidas Cruzes, Santa Branca, Sao Vicente, Praia Grande, Santos, Cubatao, Guaruja and Bertioga. TEVECAP S.A. AND SUBSIDIARIES Consolidated Balance Sheet for the periods ended September 30, 1999, June 30, 1999 and September 30, 1998 (in thousands of U.S. dollars) ASSETS Sep-98 Jun-99 Sep-99 ------ ------ ------ ------ Cash and cash equivalents 2,950 972 4,219 Accounts receivable, net 29,679 12,590 8,376 Inventories, net 16,651 11,967 10,468 Film exhibition rights 1,898 1,301 2,057 Prepaid and other assets 6,366 7,737 4,073 Accounts receivable from related parties 410 765 811 Other accounts receivable 5,983 2,299 2,467 ------ ------ ------ Total current assets 63,937 37,631 32,471 ====== ====== ====== Property plant and equipment, net 297,587 281,039 274,010 Investments Equity basis 1,612 3,480 3,521 Cost basis investees 48,905 49,104 6,676 Concessions, net 12,496 11,218 10,792 Loans to related companies 29,608 27,446 6,265 Debt issuance costs, net 6,437 5,100 914 Other 2,025 2,035 27,684 ------- ------- ------- TOTAL ASSETS 462,607 417,053 362,333 ======= ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Loans 55,516 17,789 12,928 Film suppliers 11,289 11,303 12,122 Other suppliers 18,839 13,459 11,865 Deficit in discontinued operations (Galaxy Brasil and TVA Banda c) 4,596 44,462 -- Taxes payable other than income taxes 11,007 17,010 17,151 Accrued payroll and related liabilities 5,631 2,573 2,713 Advance payments received from subscribers 2,345 1,199 1,304 Other accounts payable 6,488 6,691 5,076 ------- ------- ------ Total current liabilities 115,711 114,486 63,159 ======= ======= ====== Loans 268,022 261,888 57,279 Loans from shareholders 67,235 118,296 117,767 Provision from claims 6,869 5,403 17,720 Liability to fund equity investee 158 -- 6,086 ------- ------- ------- Total long-term liabilities 342,284 385,587 198,852 ======= ======= ======= Minority Interest 3,761 3,440 3,383 Shareholders' equity 851 (86,460) 96,939 Paid-in capital 387,806 387,803 387,803 Accumulated deficit (285,991) (434,058) (434,058) Net Income (Loss) (100,964) (40,205 143,194 -------- ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 462,607 417,053 362,333 ======== ======= ======= TEVECAP S.A. AND SUBSIDIARIES Consolidated Statements of Operations For the three months ended September 30, 1999, June 30, 1999 and September 30, 1998 and six and nine months ended June 30 and September 30, 1999 (in thousands of U.S. dollars) accumulated 3Q98 2Q99 3Q99 Jun/99 Set/99 ---- ---- ---- ------ ------ Gross revenues Monthly subscription 35,356 25,111 22,631 49,241 71,872 Installation 865 780 444 1,169 1,613 Advertising 774 415 271 720 991 Indirect programming 4,199 (94) 1,281 1,760 3,041 Other 3,229 6,624 2,347 9,196 11,543 Taxes on revenues (3,481) (3,215) (1,953) (5,452) (7,405) ------ ------ ------ ------ ------ Net revenue 40,942 29,620 25,021 56,634 81,655 ====== ====== ====== ====== ====== Direct operating expenses Payroll and benefits (3,893) (1,820) (1,330) (4,132) (6,762) Programming (12,729) (6,594) (6,664) (15,195) (21,859) Transponder lease cost (558) (642) (607) (854) (1,460) Technical assistance (540) (449) (329) (705) (1,034) Vehicle rentals (71) (44) (22) (59) (81) TVA magazine (2,044) (724) (389) (1,442) (1,831) Pole rental (250) (798) (609) (1,658) (2,267) Other costs (2,597) 104 (504) (1,406) (3,876) ------- ------- ------- ------- ------- (22,682) (10,967) (10,454) (25,450) (39,171) ======= ======= ======= ======= ======= Selling, general and administrative expenses Payroll and benefits (5,525) (4,379) (4,382) (7,209) (8,325) Advertising and promotion (2,119) (682) (924) (1,238) (2,162) Rent (1,238) (323) (581) (1,025) (1,606) Other administrative expenses (594) (3,050) (1,392) (5,473) (6,865) Other general expenses (5,298) (1,166) (1,535) (2,460) (3,997) ------ ------ ------ ------- ------ (14,774) (9,600) (8,814) (17,405) (22,955) ======= ====== ====== ======= ======= EBITDA 3,486 9,053 5,753 13,779 19,529 ===== ===== ===== ====== ====== Real devaluation impact on balance sheet accounts - 660 1,592 7,383 8,975 Provision for equipment and inventory obsolescence (31) 544 13 544 557 Depreciation (11,826) (13,888) (14,284) (27,245) (41,529) Amortization (426) (426) (426) (852) (1,278) ------ ------ ------ ------ ------- Operating loss from continuing operations (8,797) (4,057) (7,352) (6,391) (13,746) ====== ====== ====== ====== ======= Interest income 220 (4,107) 3,007 17,937 20,944 Interst expenses (11,703) (12,886) (767) (23,974) (24,741) Translation gain (loss) 366 282 567 (551) 16 Equity in losses of affiliates (1,904) (3,107) (7,498) (3,611) (11,109) Other nonoperating (expenses) income, net (2,451) (2,914) 172,782 (1,038) 171,746 ------- ------- ------- ------ ------- Income (loss) from continuing operations before income taxes and minority interest (24,269) (26,789) 160,740 (17,628) 143,110 Income taxes - - - - - Income (loss) from continuing operations before minority interest (24,269) (26,789) 160,740 (17,628) 143,110 Minority interest 217 143 58 25 84 ------- ------ ------- ------- ------- Net income (loss) from continuing operations (24,052) (6,646) 160,797 (17,603) 143,194 ======= ====== ======= ======= ======= Loss from discontinued operations (GLB and TVA Banda C) (12,619) (16,168) 22,602 (22,602) - ------- ------- -------- ------- ------- Net income (loss) (36,671) (42,814) 183,399 (40,205) 143,194 ======= ======= ======== ======= =======