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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

OR

COMMISSION FILE NUMBER 1-15997

ENTRAVISION COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

(Address of principal executive offices) (Zip Code)

(310) 447-3870

(Registrant’s telephone number, including area code)

N/A

(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, 2004, there were 59,502,343 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.

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ENTRAVISION COMMUNICATIONS CORPORATION

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Forward-Looking Statements

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.

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PART I

FINANCIAL INFORMATION

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

See Notes to Consolidated Financial Statements

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ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)

See Notes to Consolidated Financial Statements

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ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

See Notes to Consolidated Financial Statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2004

1. BASIS OF PRESENTATION

Presentation

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.

Reclassification of discontinued operations

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 ended March 31, 2003 and related disclosures have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144 (see Note 3).

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Related party

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 exchange did not change Univision’s overall equity interest in the Company, nor did it have any impact on the Company’s 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 carries a nominal liquidation preference at its par value over common stockholders. Each share of Series U preferred stock is automatically convertible into 100 shares (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 expenses the Company incurred in connection with Univision’s merger with HBC in the aggregate amount of $1.5 million during the three-month period ended March 31, 2003.

New accounting pronouncement

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.

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Stock-based compensation

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 and net 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 periods ended March 31, 2004 and 2003 (unaudited; in thousands, except per share data):

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

Loss per share

Basic loss per share is computed as net 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 per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and convertible securities.

For the three-month periods ended March 31, 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 ended March 31, 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 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.

As discussed above, the Series U preferred stock is 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 intends to create such a new class of common stock in connection with its 2004 Annual Meeting of Stockholders. If the Series U preferred stock had been treated as common stock outstanding, the weighted average common shares outstanding, basic and diluted, would have been 124,067,130 for the three-month period ended March 31, 2004. The net loss per share, basic and diluted, would have changed from $(0.09) to $(0.07) for the three-month period ended March 31, 2004.

Disposition of assets

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.

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Subsequent event

The Company recently entered into a Share Repurchase Agreement with TSG Capital Fund III, L.P., the holder of all of the Company’s outstanding Series A mandatorily redeemable convertible preferred stock, or Series A preferred stock. Under the Share Repurchase Agreement, the Company agreed to purchase the Series A preferred stock from TSG Capital for a cash price that may vary depending on when 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 closing of the repurchase is conditioned upon the receipt of all necessary bank consents and the completion, on terms acceptable to the Company in its sole discretion, of an offering of preferred stock. As of March 31, 2004, the aggregate liquidation preference of the Series A preferred stock was $121.4 million. The amount by which the repurchase price exceeds the carrying value of the Series A preferred stock will affect net income available to common stockholders and the related earnings per share.

Pending transactions

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 quarter of 2004.

In January 2004, the Company entered into definitive agreements to sell radio stations WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market for an aggregate amount of approximately $29.0 million in cash. These dispositions are currently expected to close in the second quarter of 2004.

Summarized financial information regarding the Company’s assets held for sale in the Fresno, California, Dallas, Texas, Chicago, Illinois markets 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 thousands):

Balance Sheet data as of the dates indicated consists of (in thousands):

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.

3. DISCONTINUED OPERATIONS

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 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 ended March 31, 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.

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

4. SEGMENT INFORMATION

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

Television broadcasting

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

Radio broadcasting

The Company owns and/or operates 57 radio stations (42 FM and 15 AM) located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas.

Outdoor advertising

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

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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 periods ended March 31, 2004 and 2003. The Company evaluates the performance of its operating segments based on the following (unaudited, in thousands):

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5. LITIGATION

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. 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.

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Overview

We are a diversified Spanish-language media company with a unique portfolio of television, radio and outdoor advertising assets, reaching approximately 80% 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 period ended March 31, 2004 was $52 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 57 radio stations (42 FM and 15 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 periods ended March 31, 2004 and 2003 is significantly affected by acquisitions and dispositions.

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 of costs related to producing a local newscast in most of our markets.

Highlights

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.

Dispositions

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

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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 quarter of 2004.

In January 2004, we entered into definitive agreements to sell radio stations WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market for an aggregate amount of approximately $29.0 million in cash. We currently expect these dispositions to close in the second quarter of 2004.

Relationship with Univision

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 also mandatorily convertible into 36,926,600 shares of common stock when and if we create 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). We anticipate creating such a new class of common stock during the second quarter of 2004, subject to obtaining stockholder approval at our 2004 Annual Meeting of Stockholders scheduled to be held on May 26, 2004.

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Three-Month Periods Ended March 31, 2004 and 2003 (Unaudited)

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

* Percentage not meaningful.

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, 2004 and 2003 were 5.4 to 1 and 5.3 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.

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

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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. A reconciliation of these non-GAAP measures to net loss follows (unaudited; in thousands):

Consolidated Operations

Net Revenue. Net revenue increased to $52.0 million for the three-month period ended March 31, 2004 from $48.3 million for the three-month period ended March 31, 2003, an increase of $3.7 million. The overall increase came from our television and radio segments, which together accounted for an increase of $4.1 million. The increase from these segments was attributable to increased advertising sold (referred to as “inventory” in our industry), increased rates for that inventory and increased revenue due to a full three-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 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 increase our rates, resulting in continued increases in net revenue in future periods.

Direct Operating Expenses. Direct operating expenses increased to $26.0 million for the three-month period ended March 31, 2004 from $24.6 million for the three-month period ended March 31, 2003, an increase of $1.4 million. The overall increase came primarily from our television and radio segments, which together accounted for $1.1 million of the increase. The increase from these segments was primarily attributable to an increase in national representation fees, an increase in ratings services expenses, an increase in news costs due to the addition or expansion of newscasts and a full three-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 million of the overall increase. As a percentage of net revenue, direct operating expenses decreased to 50% for the three-month period ended March 31, 2004 from 51% for the three-month period ended March 31, 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 outpace direct operating expense increases such that direct operating expenses as a percentage of net revenue will decrease in future periods.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $12.7 million for the three-month period ended March 31, 2004 from $11.8 million for the three-month period ended March 31, 2003, an increase of $0.9 million. The overall increase came primarily from an increase in outdoor selling, general and administrative expenses, which accounted for $0.5 million of the overall increase. The increase from this segment 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

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together accounted for $0.4 million of the increase. The increase from these segments was primarily attributable to an increase in insurance costs, an increase in rent expense and a full three-month period of operations of our 2003 acquisitions. As a percentage of net revenue, selling, general and administrative expenses remained unchanged at 24% for each of the three-month periods ended March 31, 2004 and 2003.

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 outpace selling, general and administrative expense increases such that selling, general and administrative expenses as a percentage of net revenue will decrease in future periods.

Corporate Expenses. Corporate expenses increased to $4.0 million for the three-month period ended March 31, 2004 from $2.4 million for the three-month period ended March 31, 2003, an increase of $1.6 million. The increase was primarily attributable to a $1.5 million reimbursement from Univision in the first quarter of 2003 (offset by $0.3 million of Univision-related expenses in the first 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 legal expenses and wages. As a percentage of net revenue, corporate expenses increased to 8% for the three-month period ended March 31, 2004 from 5% for the three-month period ended March 31, 2003. Excluding the prior year Univision reimbursement and related expenses, corporate expenses as a percentage of net revenue remained unchanged at 8% for each of the three-month periods ended March 31, 2004 and 2003.

We currently anticipate that corporate expenses will 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 million for the three-month period ended March 31, 2004. The gain was primarily due to the sale of radio station KZFO-FM in Fresno, California.

Depreciation and Amortization. Depreciation and amortization decreased to $10.8 million for the three-month period ended March 31, 2004 from $10.9 million for the three-month period ended March 31, 2003, a decrease of $0.1 million.

Non-Cash Stock-Based Compensation. Non-cash stock-based compensation decreased to $0 for the three-month period ended March 31, 2004 from $0.3 million for the three-month period ended March 31, 2003, a decrease of $0.3 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 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. As a result of the above factors, operating loss decreased to $0.4 million for the three-month period ended March 31, 2004 from $1.7 million for the three-month period ended March 31, 2003, a decrease of $1.3 million.

Interest Expense. Interest expense increased to $6.9 million for the three-month period ended March 31, 2004 from $6.3 million for the three-month period ended March 31, 2003, an increase of $0.6 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 the disposal of our publishing operations in July 2003 and from 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 Before Discontinued Operations. As a result of the above factors, loss before discontinued operations decreased to $5.2 million for the three-month period ended March 31, 2004 from $6.4 million for the three-month period ended March 31, 2003, a decrease of $1.2 million.

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Segment Operations

Television

Net Revenue. Net revenue in our television segment increased to $27.6 million for the three-month period ended March 31, 2004 from $25.5 million for the three-month period ended March 31, 2003, an increase of $2.1 million. Of the overall increase, $1.9 million was attributable to our Univision stations and $0.2 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 $12.6 million for the three-month period ended March 31, 2004 from $11.8 million for the three-month period ended March 31, 2003, an increase of $0.8 million. The increase was primarily attributable to an increase in national representation fees 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 million for the three-month period ended March 31, 2004 from $5.8 million for the three-month period ended March 31, 2003, a decrease of $0.3 million. The decrease was primarily attributable to operational improvements of our TeleFutura stations.

Radio

Net Revenue. Net revenue in our radio segment increased to $18.3 million for the three-month period ended March 31, 2004 from $16.3 million for the three-month period ended March 31, 2003, an increase of $2.0 million. The increase was primarily attributable to a combination of an increase in rates and inventory sold by Lotus/Entravision Reps LLC, as well as revenue associated with a full three-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 million for the three-month period ended March 31, 2004 from $7.8 million for the three-month period ended March 31, 2003, an increase of $0.3 million. The increase was primarily attributable to an increase in commissions and national representation fees associated with the increase in net revenue and a full three-month period of operations of our 2003 acquisitions.

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

Outdoor

Net Revenue. Net revenue in our outdoor segment decreased to $6.2 million for the three-month period ended March 31, 2004 from $6.5 million for the three-month period ended March 31, 2003, a decrease of $0.3 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 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 in net revenue from our outdoor segment.

Direct Operating Expenses. Direct operating expenses in our outdoor segment increased to $5.3 million for the three-month period ended March 31, 2004 from $4.9 million for the three-month period ended March 31, 2003, an increase of $0.4 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 increased to $1.5 million for the three-month period ended March 31, 2004 from $1.1 million for the three-month period ended March 31, 2003, an increase of $0.4 million. The increase was primarily attributable to severance amounts paid to the former president of our outdoor division.

Liquidity and Capital Resources

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

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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 bank credit facility will be sufficient to meet our anticipated cash requirements for the foreseeable future.

Bank Credit Facility

Our primary sources of liquidity are cash provided by operations and available borrowings under our bank credit facility. We have a $400 million bank credit facility, 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 million as of March 31, 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. Please see “Broadcast Cash Flow and EBITDA as Adjusted” below.

The revolving facility bears interest at LIBOR (1.125% at March 31, 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, 2004, $126 million was outstanding under our bank credit facility and $77 million was available for future borrowings.

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.

Debt and Equity Financing

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.

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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 8 ¹/8% 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 and EBITDA as Adjusted

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

We currently anticipate that broadcast cash flow will 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 to $9.4 million for the three-month period ended March 31, 2004 from $9.5 million for the three-month period ended March 31, 2003, a decrease of $0.1 million, or 1%. Excluding the $1.2 million net reimbursement from Univision in 2003, EBITDA as adjusted increased $1.2 million, or 14%. As a percentage of net revenue, EBITDA as adjusted decreased to 18% for the three-month period ended March 31, 2004 from 20% for the three-month period ended March 31, 2003. Excluding the $1.2 million net reimbursement from Univision, EBITDA as adjusted as a percentage of net revenue increased to 18% for the three-month period ended March 31, 2004 from 17% for the three-month period ended March 31, 2003.

We currently anticipate that EBITDA as adjusted will 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.

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, 2004 and 2003 were 5.4 to 1 and 5.3 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.

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.

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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 page 16.

Cash Flow

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

Net cash flow provided from investing activities was $5.6 million for the three-month period ended March 31, 2004 compared to net cash flow used in investing activities of $6.0 million for the three-month period ended March 31, 2003. We received proceeds of $8.2 million from the sale of assets, primarily radio station KZFO-FM in the Fresno, California 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 million on capital expenditures.

Net cash flow used by financing activities was $17.6 million for the three-month period ended March 31, 2004 compared to net cash flow provided from financing activities of $0.3 million for the three-month period ended March 31, 2003. During the three-month period ended March 31, 2004, we borrowed $34 million under our incremental loan facility and paid $52 million under our revolving facility. We received net proceeds of $0.4 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 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 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.

Series A Mandatorily Redeemable Convertible Preferred Stock

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. 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 will be $143.5 million, and our Series A preferred stock would continue to accrue a dividend of 8.5% per year. The outstanding Series A preferred stock is convertible into 5,865,102 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.

Contractual Obligations

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.

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Our material contractual obligations at March 31, 2004 are as follows (in thousands):

We have also entered into employment agreements with certain of our key employees, including Messrs. Ulloa, Wilkinson, Liberman and 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, 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.

Other

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 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 August 15 and concludes the following February 14. As of March 31, 2004, approximately 272,106 shares had been purchased under the Employee Stock Purchase Plan.