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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2002

Commission File Number: 001-12223

UNIVISION COMMUNICATIONS INC.

Incorporated in Delaware

I.R.S. Employer Identification Number: 95-4398884

1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
Tel: (310) 556-7676

Securities registered pursuant to Section 12 (b) of the Act:

Securities registered pursuant to Section 12 (g) of the Act: None

        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 ý NO o.

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). YES ý NO o.

        The aggregate market value of the Class A Common Stock of the Company held by non-affiliates on June 28, 2002 (the last business day of the Company's most recently completed second fiscal quarter) was approximately $5,000,000,000. This calculation does not include the value of any of the outstanding shares of Class P, Class T or Class V Common Stock.

        There were 160,264,687 shares of Class A Common Stock, $.01 par value, outstanding as of February 13, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

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Portions of the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held May 21, 2003 are incorporated by reference into Part III hereof.

TABLE OF CONTENTS

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FORWARD-LOOKING STATEMENTS

        All statements, other than statements of historical fact, contained within this report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases you can identify forward-looking statements by terms such as "may," "intend," "might," "will," "should," "could," "would," "expect," "believe," "estimate," "potential," "expect," "plan," "anticipate" or the negative of these terms, and similar expressions intended to identify forward-looking statements.

        These forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Also, 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 federal securities laws, we do not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this report.

        Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, those described in "Risk Factors" contained in this report.

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PART I

ITEM 1. Business

        Univision Communications Inc., together with its wholly owned subsidiaries, is the leading Spanish-language media company in the United States with operations during 2002 in three business segments:

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Television:  The Company's principal business segment is television broadcasting, which consists of the Univision, TeleFutura and Galavisión national broadcast and cable television networks, 50 owned-and-operated broadcast television stations (32 full-power and 18 low-power) and the Company's television production business. At December 31, 2002, the Television segment accounted for approximately 93% of the Company's net revenues. See "—Television Broadcasting."



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Music:  The Company's music recording and music publishing business was launched in April 2001. In June 2001, the Company acquired a 50% interest in Monterey, Mexico-based Disa Records, S.A. de C.V., one of the largest independent Spanish-language record labels in the world. In April 2002, the Company acquired Televisa's record and music publishing business by acquiring the Fonovisa Music Group. The Univision Music Group currently sells more Latin music recordings in the United States than any other record company. At December 31, 2002, the Music segment accounted for approximately 6% of the Company's net revenues. See "—Music Recording and Publishing."



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Internet:  Univision Online, Inc. operates the Company's Internet portal, Univision.com, which provides Spanish-language content directed at Hispanics in the U.S., Mexico and Latin America. At December 31, 2002, the Internet segment accounted for approximately 1% of the Company's net revenues. See "—Internet."

        At December 31, 2002, the Company had an approximate 31% interest in Entravision Communications Corporation, a diversified Spanish-language media company that owns and operates the majority of the Company's non-owned full-power broadcast affiliates. Entravision operates in 20 of the nation's top 50 Hispanic markets and owns 43 of the Company's affiliated stations.

        The Company is a Delaware corporation and its principal executive offices are located at 1999 Avenue of the Stars, Suite 3050, Los Angeles, California 90067, telephone number (310) 556-7676. The Company's stock is traded on the New York Stock Exchange (UVN) and is part of the Standard & Poor's S&P 500 Index. The terms "Company," "we," "us" and "our" refer collectively to the parent company and the subsidiaries through which our various businesses are conducted, unless the context otherwise requires. Statistics throughout this report, unless otherwise stated, do not include data of Hispanic Broadcasting Corporation ("HBC") and do not give effect to the proposed acquisition by the Company of HBC.

        The Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, will be available free of charge on the Company's website at www.univision.com, beginning on April 1, 2003 and, in the future, as soon as reasonably practicable after the reports are filed with or furnished to the Securities and Exchange Commission.

Recent Developments

        The Company expects to complete its stock-for-stock acquisition of Hispanic Broadcasting Corporation ("HBC') in the near future pursuant to a definitive merger agreement dated June 11, 2002 in which each share of HBC common stock would be exchanged for the right to receive 0.85 of a share of Univision Class A common stock. HBC is the largest Spanish-language radio broadcaster in the United States and currently owns and/or operates 63 radio stations in 15 of the top 25 Hispanic

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markets. In addition, HBC operates HBC Sales Integration, which is one of the largest Spanish-language radio broadcast networks in the United States in terms of audience delivery, and HBCi, which operates HBC's Internet websites and a network of Hispanic community-focused bilingual websites at www.netmio.com. As a result of the merger, we expect to issue approximately 93 million Class A common shares, which would represent approximately 29% of our outstanding shares and approximately 14% of our outstanding voting power as of March 15, 2003 assuming no exercise of options or warrants, and we expect to reserve approximately 5 million shares for issuance pursuant to HBC stock options that we would assume in the acquisition.

        As part of the merger, the Company has reached a tentative agreement with the United States Department of Justice ("DOJ") pursuant to which the Company would exchange all of its shares of capital stock of Entravision for shares of a new class of non-voting preferred stock of Entravision that would not have any consent or other voting rights other than the right to approve (a) a merger, consolidation, business combination, reorganization, dissolution, liquidation, or termination of Entravision; (b) the direct or indirect disposition by Entravision of any interest in any FCC license with respect to any Company-affiliated television station; (c) any amendment of Entravision's charter documents adversely affecting such preferred stock; and (d) any issuance of additional shares of such preferred stock. Any shares of such preferred stock that are transferred by the Company (other than to its affiliates) would automatically convert into Class A common stock of Entravision. The shares would be convertible by the Company in connection with any transfer to a non-affiliate, and the Company would work with Entravision to convert the stock into a new but substantially similar class of common stock if such new class of common stock is authorized. In addition, the Company would be required to sell enough of its Entravision stock so that the Company's ownership of Entravision does not exceed 15% at the end of 3 years and 10% at the end of 6 years. The tentative agreement with the DOJ will have no impact on the Company's existing television station affiliation agreements with Entravision. The Company is working with the DOJ to finalize the agreement.

        On April 16, 2002, in an effort to expand its music recording and publishing business, the Company acquired the stock of Fonovisa Inc., Fonovisa S.A. de C.V., America Musical S.A. de C.V. and Fonovisa de Centroamérica S.A. (collectively, "Fonovisa"). Fonovisa is considered to be one of the top record and publishing labels featuring Spanish-language music. The consideration consisted of 6,000,000 shares of Class A Common Stock and a warrant to purchase an additional 100,000 shares of Class A Common Stock at an exercise price of $38.261 per share. The purchase agreement included certain working capital adjustments. The Company is seeking approximately $30,000,000. The Company expects this to be resolved in 2003 either through negotiation between the parties or by binding arbitration.

Television Broadcasting

        The Company's principal business segment is television broadcasting, which consists of the Univision, TeleFutura and Galavisión television networks, the Univision Television Group ("UTG") owned-and-operated broadcast television stations (collectively, the "UTG O&Os"), the TeleFutura Television Group ("TTG") owned-and-operated broadcast television stations (collectively, the "TTG O&Os") and the Company's television production business.

        The Company programs its three networks so that Univision Network, TeleFutura Network and Galavisión generally will not run the same type of program simultaneously.

Univision Network, Univision Television Group and Univision Network Affiliates

        Univision Network.    Univision Network is the leading Spanish-language television network in the U.S., reaching more than 97% of all U.S. "Hispanic Households" (those with a head of household who is of Hispanic descent or origin, regardless of the language spoken in the household). It is the most watched television network (English or Spanish-language) among Hispanic Households and had a

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higher rating among Hispanic Households in prime time than its next four competitors combined in the 2001-2002 season. From its operations center in Miami, Univision Network provides its broadcast and cable affiliates with 24 hours per day of Spanish-language programming with a prime time schedule of substantially all first-run programming (i.e., no re-runs) throughout the year. The operations center also provides production facilities for Univision Network's news and entertainment programming.

        Univision Television Group.    At December 31, 2002, UTG owned-and-operated 16 full-power (15 of which are affiliated with Univision Network) and seven low-power stations, representing approximately 73% of its Network broadcast distribution. Fifteen of the UTG O&Os broadcast Univision Network's programming, and most produce local news and other programming of local importance, cover special events and may acquire programs from other suppliers. These full-power UTG O&Os are located in 11 of the top 15 designated market areas in terms of numbers of Hispanic Households—Los Angeles, New York, Miami, Houston, Chicago, Dallas, San Francisco, San Antonio, Phoenix, Fresno and Sacramento.

        According to the November 2002 Nielsen Station Index ("NSI") Survey, which measures local station viewing of all households in a specific designated market area, three of the full-power UTG O&Os (located in Fresno, Los Angeles and Miami) rank as the top station in "total day" in their respective designated market areas, English- or Spanish-language, based on total audience rank of adults 18 to 49 years of age. UTG's Bakersfield full-power station is a UPN affiliate. UTG's seven low-power, Spanish-language television stations serve Amarillo, Austin, Bakersfield, Fort Worth, Phoenix, Santa Rosa and Tucson. As of December 31, 2002, Univision Network had 17 full-power and 33 low-power television station affiliates ("UTG Affiliated Stations") and approximately 1,146 cable affiliates. As of December 31, 2002, each of the UTG O&Os and its full-power affiliated stations ranked first in Spanish-language television viewership in its designated market area.

        Also, the Company entered into an option agreement that expires on December 31, 2004 to acquire WLII-TV 11 in San Juan and WSUR-TV 9 in Ponce for $190,000,000 from Raycom Media, Inc. and related parties. The purchase price will be reduced if certain earnings targets are met during the period prior to the expiration of the option agreement.

        Univision Network produces and acquires programs, makes those programs available to its affiliates, including the UTG O&Os, and sells network advertising. The full-power UTG O&Os and full-power UTG Affiliated Stations together reach approximately 7.6 million, or approximately 78%, of Hispanic Households. The low-power UTG O&Os and low-power UTG Affiliated Stations (including translators) together reach approximately 0.9 million, or approximately 9%, of Hispanic Households. The cable affiliates and direct broadcast systems reach approximately 1 million, or approximately 10%, of Hispanic Households.

        Affiliation Agreements.    Each of Univision Network's affiliates has the right to preempt (i.e., to decline to broadcast at all or at the time scheduled by Univision Network), without prior Univision Network permission, any and all Univision Network programming that it deems unsatisfactory, unsuitable or contrary to the public interest or to substitute programming it believes is of greater local interest, provided that Univision Network consents to any rescheduling of preempted programming.

        Each affiliation agreement grants Univision Network's affiliate the right of first refusal to Univision Network's entire program schedule. The affiliation agreements generally provide that 50% of all advertising time be retained by Univision Network for Univision Network advertising and the other 50% of the time be allocated to Univision Network's affiliate for local and national spot advertising. However, this allocation may be modified at Univision Network's discretion.

        The UTG Affiliated Stations retain 100% of all local and 85% of net national advertising revenues, and Univision Network retains 100% of network advertising revenues.

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        Univision Network from time to time may enter into affiliation agreements with additional stations in new designated market areas based upon its perception of the market for Spanish-language television and the Hispanic market in the station's designated market area.

        Cable Affiliates.    Univision Network has historically used cable affiliates to reach communities that could not support a broadcast affiliate because of the relatively small number of Hispanic Households. Cable affiliation agreements may cover an individual system operator or a multiple system operator. Cable affiliation agreements are for the most part non-exclusive, thereby giving Univision Network the right to license all forms of distribution in cable markets. Cable affiliates generally receive Univision Network's programming for a fee based on the number of subscribers. Univision Network retains 100% of the allocation of network advertising revenues attributable to cable affiliates and provides certain cable affiliates with two minutes of local advertising time per hour. Cable affiliates retain 100% of local and national advertising revenues.

        Affiliate Rank.    According to the November 2002 Nielsen Hispanic Station Index ("NHSI") and the November 2002 NSI, 11 of the 15 full-power UTG O&Os (Los Angeles, New York, Miami, Houston, Chicago, Dallas/Ft. Worth, San Antonio, San Francisco, Phoenix, Fresno and Sacramento) ranked first among Spanish-language television stations in their respective designated market areas, based on total audience rank of adults 18 to 49 years of age. No data was available for the other four full-power UTG O&Os (Philadelphia, Austin, Atlanta and Cleveland), which became UTG O&Os in January 2002. In addition, 15 of the 17 full-power UTG Affiliated Stations (McAllen/Brownsville, Albuquerque, El Paso, Denver, Tampa, Orlando, Boston, Las Vegas, Corpus Christi, Salines/Monterey, Hartford/New Haven, Laredo, Yuma/El Centro, Santa Barbara-Santa Maria-San Luis Obispo, Odessa/Midland) also ranked first among Spanish-language television stations in their respective designated market areas. No data was available for the Portland or Salt Lake City affiliates, which became UTG Affiliated Stations in January 2002 and June 2002, respectively.

TeleFutura Network, TeleFutura Television Group and TeleFutura Network Affiliates

        TeleFutura Network.    On January 14, 2002, the Company launched a new 24-hour general-interest Spanish- language broadcast network, TeleFutura, to meet the diverse preferences of the multi-faceted U.S. Hispanic community. TeleFutura Network's signal covers approximately 75% of all Hispanic Households through TeleFutura O&Os (16 full-power and 11 low-power television stations) and TeleFutura Network's affiliates, 2 full-power and 25 low-power stations ("TTG Affiliated Stations"). TeleFutura Network is designed to counter-program traditional Spanish-language lineups and draw additional viewers to Spanish-language television by offering primetime Hollywood movies dubbed in Spanish and original Spanish-language movies, primetime game shows, and sports.

        TeleFutura Television Group.    The TTG O&Os consist of 16 full-power and 11 low-power Spanish-language television stations, representing approximately 85% of TeleFutura Network broadcast distribution. The TTG O&Os include full-power stations in 9 of the top 15 U.S. Hispanic markets. The 16 full-power TTG O&Os are located in Los Angeles, New York (2 stations), Miami, Houston, Chicago, Dallas, San Francisco, Phoenix, Fresno, Denver, Washington, Orlando, Tampa, Boston, and Tucson. The 11 low-power TTG O&Os serve the Bakersfield (2 stations), Fresno, Philadelphia, Phoenix, San Antonio (3 stations), Sacramento (2 stations) and Tucson markets. In addition, TeleFutura Network expects to enter into affiliation agreements with broadcast television stations and cable television systems to provide TeleFutura Network programming.

        Affiliation Agreements.    Each of TeleFutura Network's affiliates has the right to preempt (i.e., to decline to broadcast at all or at the time scheduled by TeleFutura Network), without prior TeleFutura Network permission, any and all TeleFutura Network programming that it deems unsatisfactory, unsuitable or contrary to the public interest or to substitute programming it believes is of greater local interest.

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        Each affiliation agreement grants TeleFutura Network's affiliate the right to broadcast over the air the TeleFutura Network's entire program schedule. The affiliation agreements generally provide that a percentage of all advertising time be retained by TeleFutura Network for TeleFutura Network advertising and the remaining amount is allocated to TeleFutura Network's affiliate for local and national spot advertising. However, this allocation may be modified at TeleFutura Network's discretion.

Galavisión

        The Company also owns Galavisión Network, the leading U.S. Spanish-language general entertainment basic cable television network, which reaches 5.7 million Hispanic cable and direct broadcast system subscribers. According to Nielsen Media Research, Galavisión reaches 90% of all Hispanic Households. In addition, Galavisión's new line-up, which began airing in May 2002, averages over 55 hours of live news, sports, variety and entertainment programming each week.

Music Recording and Publishing

        Univision Music Group is composed of Univision Music, Inc., Disa Records, S.A. de C.V. and the Fonovisa Music Group. It is the leader in record sales of Latin music in the U.S. and Puerto Rico, as Univision Music Group's labels average five of the top ten best selling albums on Billboard Magazine's weekly Latin charts and accounted for approximately half of the regional Mexican music sold in the U.S. in 2002.

        In April 2001, the Company launched Univision Music Group, its music publishing and recording division, which is headquartered in Los Angeles. Univision Music Group consists of the Company's formation of a wholly-owned subsidiary, Univision Music, Inc., which is a holding company, and its majority-owned subsidiary Univision Music LLC, which owns and operates the Univision label and operates the Fonovisa label. Univision Music, Inc. owns 98% of Univision Music LLC, 1% is owned by the Company and 1% is owned by Diara, Inc., which is wholly-owned by José Behar, president of Univision Music Group. Under the terms of the operating agreement for Univision Music LLC, Diara's ownership interest escalates to 20% by the end of the fifth year of operations. In 2006, Diara has a put right and Univision Music, Inc. has a call right that would require Univision Music, Inc. to purchase all of Diara's interest in Univision Music LLC. See Note 3 to Notes to Consolidated Financial Statements.

        Also, in June 2001, Univision Music, Inc. acquired a 50% interest in Monterrey, Mexico-based Disa Records, S.A. de C.V. from the Chavez family. Disa is the second-largest independent Spanish-language record label in the world; it represents more than 50 artists and owns a large catalog of more than 1,000 master recordings of Mexican regional music. The Chavez family maintains a 50% ownership in Disa and continues to manage the business. The Company has a call right and the Chavez family has a put right starting in June 2006, that will require the Company to purchase the remaining 50% interest for $75,000,000, subject to certain upward adjustments.

        On April 16, 2002, the Company acquired the Fonovisa Music Group, Televisa's Latin music company. Fonovisa had approximately 120 recording artists on its roster and owned a substantial record and music publishing catalog. The Company is in the process of amending the arrangement with Jose Behar as a result of the acquisition of Fonovisa.

Internet

        Through its online subsidiary, Univision Online, Inc., the Company develops, publishes and distributes content for online services intended to appeal to a broad consumer interest, including entertainment, sports, news, personal finance and shopping. The Company's Internet portal, Univision.com, is primarily directed at Hispanics in the United States. Working from offices in New York, Miami, Los Angeles, Dallas and Mexico City, Univision Online produces a substantial percentage of its own Spanish-language content, including features on the stars of the Univision Network,

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TeleFutura Network, Galavisión and general sports and entertainment fields. In 2001, its first full-year of operations, Univision.com became the #1 Spanish-language website for U.S. Hispanics according to Nielsen Media Research and retained its leadership position in 2002.

        Use of the Internet by U.S. Hispanics is climbing rapidly. In 1998, fewer than 10% of Hispanic Households had Internet access. In 2000, the Company launched Univision.com and by 2002 the percentage of Hispanics online had more than tripled to 36%. It is expected to continue to increase in the next two years.

        According to a Nielsen Media Research study conducted in March 2002, Spanish-speaking and bilingual Internet users in the U.S. visited Univision.com three times more often than they did Yahoo! En Español and four times more often than they did Terra. In 2002, page views grew by a 4.8% monthly compounded rate based on 2002 Univision.com Audit Bureau Circulation Interactive ("ABCi") audits. As a result of these factors, Univision Online attracted more than 100 advertisers from major consumer product companies in 2002, including companies buying advertising across all of the Company's media platforms.

The Hispanic Audience in the United States

        Management believes that Spanish-language television, in general, and the Company, in particular, have benefited and will continue to benefit from a number of factors, including projected Hispanic population growth, high Spanish-language retention among Hispanics, increasing Hispanic buying power and greater advertiser spending on Spanish-language media. Unless otherwise noted, the research data provided below, pertaining to the Hispanic audience in the U.S., was derived from "The Hispanic Consumer Market Report in 1999 and Forecasts to 2020: Standard & Poor's DRI, 2000."

        Hispanic Population Growth and Concentration.    The Hispanic population of the U.S. increased by 58% between 1990 and 2000 to 35.3 million according to the 2000 U.S. Census. This rate of growth was more than 4 times that of the total U.S. population and approximately 7 times that of the U.S. non-Hispanic population. While Hispanics accounted for 12.5% of the U.S. population in 2000, the U.S. Census Bureau projects that the Hispanic percentage will double to approximately 25% of the total U.S. population by the middle of this century, confirming a fundamental shift in the ethnic makeup of the country. According to the 2000 U.S. Census, Hispanics accounted for 27% of the population of New York City and 46.5% of Los Angeles, the two cities with the largest total and the largest Hispanic population. Approximately 50% of all Hispanics are located in the seven U.S. cities with the largest Hispanic populations, and the Company, through the UTG O&Os and the TTG O&Os, owns two stations in five of these cities, and three stations in the New York and San Antonio markets. According to current U.S. Census estimates, there are approximately 37 million Hispanics living in the United States, which account for approximately 13% of the U.S. population.

        Spanish-Language Use.    Approximately 68% of all Hispanics, regardless of income or educational level, speak Spanish at home. This percentage is expected to remain relatively constant through 2010. Consequently the number of Hispanics speaking Spanish in the home is expected to increase significantly in the foreseeable future. As shown in the chart below, the number of Hispanics who speak Spanish in the home is expected to grow from 16.2 million in 1990 to 24.3 million in 2003 and 29.3 million in 2010. The Company believes that the strong Spanish-language retention among Hispanics indicates that the Spanish-language media has been and will continue to be an important source of news, sports and entertainment for Hispanics.

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Spanish Language Use

            Source: Standard & Poor's DRI

        Greater Hispanic Buying Power.    The Hispanic population represents estimated total consumer expenditures of $569 billion in 2003 (7.9% of the total U.S. consumer expenditures), an increase of 165% since 1990. Hispanics are expected to account for $1 trillion of U.S. consumer spending (9.5% of the U.S. total consumer expenditures) by 2010, outpacing the expected growth in total U.S. consumer expenditures.

        In addition to the anticipated growth of the Hispanic population, the Hispanic audience has several other characteristics that the Company believes make it attractive to advertisers. The Company believes the larger size (averaging 3.5 persons per household compared to the general public's average of 2.6 persons per household) and younger age of Hispanic Households leads Hispanics to spend more per household on many categories of goods. The average Hispanic Household spends 49% more per year on food at home, 24% more on clothing, 88% more on footwear, 19% more on phone services, and 52% more on laundry and household cleaning products than the average non-Hispanic household. Hispanics are expected to continue to account for a disproportionate share of growth in spending nationwide in many important consumer categories as the Hispanic population and its disposable income continue to grow. These factors make Hispanics an attractive target audience for many major U.S. advertisers.

        Increased Spanish-Language Advertising.    According to Hispanic Business magazine, $2.46 billion of total advertising expenditures were directed towards Spanish-language media in 2002, representing a five-year cumulative growth rate of 12%. Of these amounts, approximately 61.8% of the $2.46 billion in advertising expenditures in 2002 targeting Hispanics was directed towards Spanish-language television advertising. The Company believes that major advertisers have discovered Spanish-language television advertising is a more cost-effective means to target the growing Hispanic audience than English-language broadcast media. See "—Advertising."

Ratings

        During the last five years, Univision Network has consistently ranked first in prime time television among all Hispanic adults. In 2002, Univision and TeleFutura Networks have successfully increased their audience ratings compared to both the Spanish-language and the English-language broadcast networks. Spanish-language television prime time is from 7 p.m. to 11 p.m., Eastern and Pacific Standard Times, Sunday through Saturday. English-language television prime time is from 8 p.m. to 11 p.m., Eastern and Pacific Standard Times, Monday through Saturday and 7 p.m. to 11 p.m., Eastern and Pacific Standard Times, Sunday. The following table shows that Univision Network and TeleFutura Networks' prime time (7 p.m. to 11 p.m., Eastern and Pacific Standard Times) audience rating, Sunday

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through Saturday during the last five years, among Hispanic adults aged 18 to 49, the age segment most targeted by advertisers, is considerably higher than the other networks:

Prime Time Ratings Among Hispanic Adults Aged 18 to 49

Source: Nielsen Hispanic Television Index ("NHTI")

*        Univision & TeleFutura in 2002

        In addition, Univision Network has consistently had between 95% and 100% of the 20 most widely watched programs among all Hispanic Households during the past five years based on November NHTI.

Program License Agreements

        Through the Program License Agreements (amended and restated as of December 19, 2001), the Company has the exclusive right until December 2017 to air in the U.S. all Spanish-language programming produced by or for Televisa and Venevision (with certain limited exceptions). Televisa, which is the world's largest producer of Spanish-language television programs, is the leading media and entertainment company in Mexico with an approximate 74% share of Mexico's viewing audience during 2002. Venevision is Venezuela's leading television network with an approximate 52% share of its viewing audience during 2002. The Program License Agreements provide Univision Network, TeleFutura Network and Galavisión with access to programming to fill up to 100% of their daily schedules. Televisa and Venevision programming represented approximately 32% and 19%, respectively, of Univision Network's non-repeat broadcast hours in 2002. Televisa and Venevision programming represented approximately 20% and 2%, respectively, of TeleFutura Network's non-repeat broadcast hours in 2002.

        The Program License Agreements allow the Company long-term access to Televisa and Venevision programs and the ability to terminate unsuccessful programs and replace them with other Televisa and Venevision programs without paying for the episodes that are not broadcast. Accordingly, the Company has more programs available to it and greater programming flexibility than any of its competitors. This program availability and flexibility permits the Company to adjust programming on all its networks to best meet the tastes of its viewers.

        Televisa and Venevision programs available to the Company are defined under the Program License Agreements as all programs produced by or for each of them in the Spanish-language or with Spanish subtitles other than programs for which they do not own U.S. broadcast rights or as to which third parties have a right to a portion of the revenues from U.S. broadcasts ("Co-produced Programs"). Televisa and Venevision have also agreed through their affiliates to use their best efforts to coordinate with the Company to permit the Company to acquire U.S. Spanish-language rights to certain Co-produced Programs and to special events produced by others, sporting events, political conventions, election coverage, parades, pageants and variety shows.

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        In consideration of access to the programming of Televisa and Venevision, the Company pays Televisa and Venevision aggregate royalties based upon time sales of Univision Network, UTG and Galavisión from broadcasting, including trade, television subscription and barter revenues, less advertising commissions, certain special event revenues, music license fees, outside affiliate compensation, time sales relating to advertising sold to Televisa and provided to Venevision and taxes other than withholding taxes ("Combined Net Time Sales"). Aggregate royalties to Televisa and Venevision are 15% of Combined Net Time Sales. The Company also pays Televisa an additional fee of 3% on incremental Combined Net Time Sales of Univision Network, UTG and Galavisión over and above 2001 amounts, as well as a 12% royalty fee on TeleFutura Net Time Sales (calculated in a manner similar to Combined Net Time Sales), subject to certain adjustments. TeleFutura did not pay a royalty fee in 2002. In 2003, the minimum royalty fee will be $5,000,000, increasing by $2,500,000 per year thereafter, subject to a maximum annual minimum royalty fee of $12,500,000, resulting in a minimum royalty fee of $7,500,000 in 2004, $10,000,000 in 2005 and $12,500,000 for the years 2006 through 2017. Venevision will be paid up to 3% of additional royalty fees on incremental Combined Net Time Sales over a 2001 base amount on Univision Network, UTG and Galavisión if Venevision programs contribute 30% or more of Univision Network and Galavisión's ratings. In addition, Venevision will receive royalty fees based on the ratings delivered by the Venevision programs broadcast on TeleFutura. The Company is obligated to pay such aggregate royalties to Televisa and Venevision each year throughout the term regardless of the amount of Televisa and Venevision programming used by the Company.

        Additionally, pursuant to the Amended and Restated Program License Agreements, Televisa and Venevision have the right to use, without charge, advertising time that the Company does not sell to advertisers or that the Company does not use. There are limitations on the ability of Televisa and Venevision to use such time for telemarketing products, and such time may be preempted to the extent sold to a paying advertiser. In addition, Venevision will receive $5,000,000 per year in free non-preemptable advertising, which means that the Company can not sell this commercial advertising spot to a third party, and Televisa will purchase $5,000,000 of non-preemptable advertising per year for its own use. Further, the Company will purchase $5,000,000 per year in non-preemptable advertising from Televisa and will receive $5,000,000 per year in non-preemptable free advertising from Venevision. The Company accounts for this arrangement as a net barter transaction, with no effect on revenues, expenses, EBITDA or net income on an annual basis. Each of Televisa and Venevision may also purchase for its own use non-preemptable time at the lowest spot rate for the applicable time period.

        The Company has a right to license Televisa and Venevision programs in Puerto Rico commencing in 2002. Before May 2005, the Company will have a right of first refusal on their programs (subject, in the case of Televisa, to a preexisting commitment) and will pay a program performance fee based on the ratings delivered by the licensed programs. The Company will pay Televisa and Venevision an annual minimum license fee for certain programs in the aggregate of $2,400,000 subject to reductions due to program cancellation. After 2005, if the Company has exercised its option to acquire certain stations and networks in Puerto Rico, the Company's rights will be exclusive in a manner similar to the overall Program License Agreements (and the Company will also license its programs to the Puerto Rico stations and networks), and the Company will pay each of Televisa and itself 12% of Puerto Rico net time sales (calculated in a manner similar to Combined Net Time Sales) and Venevision the greater of 6% of Puerto Rico net time sales and the amount that a program performance fee based on ratings of Venevision programs would produce (but not more than 12% of Puerto Rico net time sales) on programs licensed by it.

        The Program License Agreements are between the Company, on one hand, and affiliates of Televisa and Venevision, on the other hand. The performance of Televisa's and Venevision's affiliates under the Program License Agreements has been unconditionally guaranteed by Grupo Televisa, S.A. and Corporacion Venezolana de Television, C.A. (VENEVISION), respectively. Pursuant to their

12

respective guarantees, Televisa has agreed to produce each year for the Company's use at least 8,351 hours of programs, which will be of the quality of programs produced by Televisa during the calendar year 2000, and Venevision has agreed to use commercially reasonable efforts to produce or acquire programs for the Company's use at least to the same extent of quality and quantity as in calendar years 1989, 1990 and 1991.

Advertising

        During the last three years, no single advertiser has accounted for more than 5% of the Company's gross advertising revenues.

        None of the UTG O&Os currently receives its proportionate share of advertising revenues commensurate with its audience share. The Company focuses much of its sales efforts on demonstrating to advertisers its ability to reach the Hispanic audience in order to narrow the gap between its share of advertising revenues and its audience share.

        The Company's advertising revenues are derived from network advertising, national spot advertising and local advertising. The Company's network advertising revenues come from diverse industries, with advertising for food and beverages, personal care products, automobiles, other household goods and telephone services representing the majority of network advertising revenues. National spot advertising represents time sold to national and regional advertisers based outside a station's designated market area and is the means by which most new national and regional advertisers begin marketing to Hispanics. National spot advertising primarily comes from new advertisers wishing to test a market and from regional retailers and manufacturers without national distribution. To a lesser degree, national spot advertising comes from advertisers wanting to enhance network advertising in a given market. Local advertising revenues are generated from both local merchants and service providers and regional and national businesses and advertising agencies located in a particular designated market area.

Marketing

        Univision Network, TeleFutura Network and the Company's owned-and-operated stations, account executives are divided into three groups: network sales; national spot sales; and local sales. The account executives responsible for network sales target and negotiate with accounts that advertise nationally. The national spot sales force represents each broadcast affiliate for all sales placed from outside its designated market areas. The local sales force represents the owned-and-operated stations for all sales placed from within its designated market area.

        In addition, Univision Network, TeleFutura Network and the owned-and-operated stations' sales departments utilize research, including both ratings and demographic information, to negotiate sales contracts as well as target major national advertisers that are not purchasing advertising time or who are under-purchasing advertising time on Spanish-language television.

        Galavisión sells advertising time and also utilizes a cable affiliate relations sales group that is responsible for generating cable subscriber fee revenues for the Company.

        Univision Online, Inc. generates advertising revenues primarily from large national advertisers in the United States and is represented by a separate sales force. Univision Online, Inc. recognizes primarily banner and sponsorship advertisement revenues. Banner revenues are recognized as "impressions" are delivered and sponsorship revenues are recognized ratably over their contract period. "Impressions" are defined as the number of times that an advertisement appears in pages viewed by users of the Company's online properties.

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        Univision Music Group generates revenues from its music recording and publishing businesses. The sales, distribution and manufacturing of products are provided by Universal Music & Video Distribution, Corp. on behalf of Univision Music Group.

Competition

        The television broadcasting and cable business is highly competitive. Competition for advertising revenues is based on the size of the market that the particular medium can reach, the cost of such advertising and the effectiveness of such medium.

        The Company competes for viewers and revenues with other Spanish-language and English-language television stations and networks, including the four principal English-language television networks, ABC, CBS, NBC and Fox, and in certain cities, UPN and WB. All of these named competitors are owned by companies much larger and having financial strength greater than the Company. Certain of the English-language networks and others have begun producing Spanish-language programming and simulcasting certain programming in English and Spanish. Several cable broadcasters have recently commenced or announced their intention to commence Spanish-language services as well.

        Many of our competitors have more stations, greater resources (financial or otherwise) and broader relationships with advertisers than we do. Furthermore, because our English-language competitors are perceived to reach a broader audience than we do, they have been able to attract more advertisers and command higher advertising rates than we have. As a result, the Company's television revenue share is typically about 50% of what would be expected based on its audience share. The Company strives to close the gap between audience and revenue share by persuading advertisers of the benefits they may achieve by beginning to utilize or increasing their utilization of Spanish-language television advertising.

        The Company also competes for viewers and revenues with independent television stations, other video media, suppliers of cable television programs, direct broadcast systems, newspapers, magazines, radio and other forms of entertainment and advertising. The Company's affiliates located near the Mexican border also compete for viewers with television stations operated in Mexico, many of which are affiliated with a Televisa network and owned by Televisa.

        The Company's share of overall television audience has been increasing. The Company attributes this to the growth of the U.S. Hispanic population, the quality of our programming, and the quality and experience of our management. Telemundo is the Company's largest competitor that broadcasts Spanish-language television programming. In most of the Company's designated market areas, the Company's affiliates compete directly with a station owned by or affiliated with Telemundo. Telemundo is a wholly-owned and operated subsidiary of NBC, a division of General Electric.

        The rules and policies of the Federal Communications Commission encourage increased competition among different electronic communications media. As a result of rapidly developing technology, the Company may experience increased competition from other free or pay systems by which information and entertainment are delivered to consumers, such as direct broadcast satellite and video dial tone services.

        Univision Online competes for advertising revenues with numerous direct competitors, including Web-based portals and individual Web sites providing content, commerce, community and similar features, and with other media companies, such as those with newspaper or magazine publications, radio stations and broadcast stations or networks.

        Univision Music Group's major Spanish-language competitors are Sony Discos, WEA Latina, BMG Latin and EMI Latin. The Group also competes against English-language music companies.

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Employees

        As of December 31, 2002, the Company employed approximately 3,000 full-time employees. At December 31, 2002, approximately 16% of the Company's employees, located in Chicago, Fresno, Los Angeles, San Francisco, New York and Puerto Rico, were represented by unions. The Company has collective bargaining agreements covering the union employees with varying expiration dates during 2003 and 2004. The Company is currently negotiating the collective bargaining agreements at the Los Angeles, San Francisco and Puerto Rico stations. Management believes that its relations with its non-union and union employees, as well as with the union representatives, are good.

Federal Regulation and New Technologies

        The ownership, operation and sale of TV stations, including those licensed to subsidiaries of the Company, are subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the "Communications Act"). FCC rules cover allotment of TV channels to particular communities; approval of station operating parameters; issuance, renewal, revocation or modification of licenses; changes in the ownership or control of licensees; regulation of equipment; and the ownership, operation, and employment practices of TV stations. The FCC has the power to impose penalties, including fines or license revocations, for violations of its rules.

        Programming and Operation.    The Communications Act requires broadcasters to serve the "public interest." Stations must periodically document their presentation of programming responsive to local community problems, needs and interests. Complaints concerning programming may be considered by the FCC at any time. Stations also must follow various laws and rules that regulate, among other things, political advertising, sponsorship identification, the advertisement of contests and lotteries, the quantity of educational and informational programming directed to children, the amount and content of commercials in and adjacent to children's programming, the advertising of cigarettes or smokeless tobacco, obscene and indecent broadcasts, and technical operations.

        New Licenses.    TV channels are allotted to particular communities. The FCC may change such allotments from time to time. The FCC periodically accepts applications for authority to construct new TV stations on unused allotted channels. Auctions are held by the FCC if more than one party files an application for the same unused allotment. A petition to deny a winning application must be resolved through FCC consideration of the applicant's qualifications and the application's compliance with FCC rules. The Company was the high bidder in an auction for an unused allotted channel in Blanco, Texas. The Company's application was challenged by an unsuccessful competitor on technical grounds, and an FCC decision is pending.

        Assignments and Transfers.    Assignment of a license or transfer of control of a broadcast licensee requires prior FCC consent. An application seeking such consent must be filed with the FCC. Public notice is provided of such filings, and interested parties may petition to deny such applications. The FCC considers the qualifications of the purchaser, the compliance of the transaction with rules, and other factors in order to determine whether the public interest would be served by such change in ownership. An evidentiary hearing may be conducted if there are unresolved substantial and material questions of fact.

        License renewal.    Broadcast licenses initially are issued for a period specified in the license. Broadcast licenses are normally renewed for an eight-year term (subject to short-term renewals in certain circumstances). Licensees seeking renewal must file an application containing certain required information. During the consideration of that application, interested parties may petition to deny the renewal application. The FCC will grant the renewal application and dismiss any petitions to deny if it determines that the licensee meets statutory renewal standards based on a review of the preceding license term. Competing applications for the frequency licensed to the renewal applicant may not be

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filed unless and until the FCC has determined that the incumbent is not qualified to continue to hold the license.

        Ownership Restrictions.    Complex FCC regulations limit the "attributable interests" that may be held by a single party. In general, officers, directors, general partners and parties with the power to vote or control the vote of 5% or more of the outstanding voting power of a licensee are considered to hold an attributable interest in that entity, although certain passive investors must have a 20% or greater voting interest to be considered to have an "attributable interest." Also, any party that holds a financial interest (whether equity or debt) in excess of 33% of a licensee's total capital is "attributable" if such party is either a significant program supplier to the licensee or has another media interest in the same market. In addition, a TV licensee that provides more than 15% of the programming of another station in the local market is considered to have an attributable interest in that station.

        Detailed FCC rules regulate the extent to which a party may have an attributable interest in more than one full-power TV station in the same area. Common ownership of multiple TV stations is permitted where the stations are in different Nielsen designated market areas, and common ownership of two TV stations in the same designated market area is permitted where there is no Grade B contour overlap among the stations, where a specified number of separately-owned full-power TV stations will remain after the combination is created, or where certain waiver criteria are met. A party may have attributable interests in both TV and radio stations in the same local market. The specific number of such stations is governed by FCC rules, depending primarily on the number of independent media voices in the market.

        The FCC is currently conducting its Biennial Regulatory Review of Broadcast Ownership Rules to determine whether any of its ownership rules are necessary in the public interest as a result of competition. That proceeding will look at each media ownership rule and may result in their retention, modification or elimination.

        Alien Ownership.    The Communications Act generally prohibits foreign parties from having a 20% or greater interest in a licensee entity, or more than a 25% interest in the parent entity of a licensee. The Company believes that, as presently organized, it complies with the FCC's foreign ownership restrictions.

        Network Affiliate Issues.    FCC rules affect the network-affiliate relationship. Among other things, these rules require network affiliation agreements to (i) prohibit networks from requiring affiliates to clear time previously scheduled for other use, (ii) permit an affiliate to preempt network programs it believes are unsuitable for its audience, or (iii) permit affiliates to substitute programs believed to be of greater local or national importance programming for network programming. An FCC proceeding to review certain of these rules remains outstanding. The FCC has waived its "spot sale rule" to permit the Company to represent its affiliates in the sale of non-network advertising time.

        Other Matters.    The FCC has numerous other regulations and policies that affect its licensees. The FCC has adopted rules to assist TV viewing by the physically handicapped. A schedule establishes the date by which new programming must be closed captioned in order to assist viewing by the hearing impaired. All new Spanish-language programming must be closed captioned by January 2010. Programming first exhibited prior to January 1, 1998 is subject to a different compliance schedule. The rules contain certain exceptions, and waivers may be granted on a showing of undue burden.

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        Television stations must make an election every third year to exercise either "must-carry" or "retransmission consent" rights in connection with local cable carriage. Stations electing must-carry may require carriage on certain channels on cable systems within its market. Must carry rights are not absolute, however, and are dependent on a number of factors, which may or may not be present in a particular case. Cable systems are prohibited from carrying the signals of stations electing retransmission consent until an agreement is negotiated with the station. Under certain circumstances, the network non-duplication rule allows network affiliates to require that cable operators black out duplicative network programming carried on more distant signals.

        Advanced Television Technology.    The FCC has adopted rules requiring a transition from analog to digital transmissions (DTV) by 2006. The new DTV standard should allow better picture quality and/or the simultaneous transmission of multiple program or data streams by a TV station. A fee is due to the FCC if DTV is used to provide subscription services to the public. The FCC has allotted to most full-power TV stations one additional channel for DTV. One TV station operated by the Company did not receive a paired DTV channel.

        At some point an election will have to be made to retain either the additional or original channel at the conclusion of the transition. As part of the DTV transition, however, certain existing television stations will be relocated, thus freeing the existing channels for other uses. As part of that plan, the Company sought substitution of an alternative channel for the channel initially proposed to be used by a new television station at Blanco, Texas. The FCC has amended its Television Table of Allotments to specify the alternative channel proposed by the Company.

        The FCC set May 1, 2002, as the deadline for initial DTV operations by all commercial TV stations that had been allocated DTV channels. The FCC granted extensions of that deadline to the Company for each of its stations. As of December 31, 2002, 16 of the Company's TV stations were operating paired DTV stations pursuant to FCC authorizations, and 12 had not yet commenced digital operations, but had been granted or had pending requests for extensions that would authorize their commencement of DTV operations at a future date. One of the Company's existing stations was not given a paired DTV channel. The FCC presently plans for the DTV transition period to end by 2006. Congress, however, has required the FCC to grant an extension of that deadline under specific circumstances. Questions regarding cable carriage of DTV signals are still largely unresolved.

        The FCC has acknowledged that DTV channel allotment may involve displacement of existing low-power TV stations, particularly in major television markets. Accordingly, the Company's low-power broadcast affiliates may be materially adversely affected. The impact of the DTV transition upon the Company's low-power stations may be reduced because the FCC has issued certificates of eligibility for Class A status for most of the Company's existing low-power stations. Class A stations are a new regulatory classification recently mandated by Congress that have greater protection against displacement than low-power TV stations.

        In addition, it is not yet clear when and to what extent DTV will become available through the various media; whether and how TV broadcast stations will be able to avail themselves of or profit by the transition to DTV; the extent of any potential interference; whether viewing audiences will make choices among services upon the basis of such differences; whether and how quickly the viewing public will embrace the new digital TV sets; or to what extent the DTV standard will be compatible with the digital standards adopted by cable and other multi-channel video programming services.

        Direct Broadcast Satellite Systems.    DBS systems provide programming on a subscription basis to consumers that have purchased and installed a satellite signal receiving dish and associated decoder equipment. Federal laws and FCC rules regulate the rebroadcast of TV station signals by DBS operators. With certain exceptions, DBS systems must carry, on request, all local full-power TV signals in designated market areas in which the satellite carrier carries at least one local TV broadcast signal.

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All stations operated by the Company made timely elections for DBS carriage, and the Company intends to obtain DBS carriage for each of its eligible stations.

        Recent Developments, Proposed Legislation and Regulation.    On November 7, 2002, the FCC adopted a new FCC equal employment opportunities ("EEO") rule that became effective March 10, 2003. The new rule requires broadcast licensees to provide equal opportunity in employment to all qualified job applicants, and prohibits discrimination against any person by broadcast stations because of race, color, religion, national origin or gender. The EEO rule requires each station to widely disseminate information concerning each full-time job vacancy, with limited exceptions; provide notice of each full-time job vacancy to recruitment organizations that have requested such notice; and complete a certain number of longer-term recruitment initiatives within a two-year period. Licensees are required to collect and maintain for public inspection extensive documentation regarding the station's EEO practices and results, to submit periodic reports to the FCC, and are subject to an FCC review at the mid-point of their station's license term.

        Congress and the FCC may in the future adopt new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation and ownership of the Company's broadcast properties. Such matters include, for example, spectrum use fees, political advertising rates, standardized and enhanced public interest disclosure requirements and potential restrictions on the advertising of certain products. Other matters that could affect the Company's broadcast properties include assignment by the FCC of channels for additional broadcast stations or wireless cable systems, as well as technological innovations and developments generally affecting competition in the mass communications industry.

        The foregoing does not purport to be a complete summary of all of the provisions of the Communications Act, or of the regulations and policies of the FCC thereunder. Proposals for additional or revised regulations and requirements are pending before, and are considered by, Congress and federal regulatory agencies from time to time. Management is unable at this time to predict the outcome of any of the pending FCC rulemaking proceedings referenced above, the outcome of any reconsideration or appellate proceedings concerning any changes in FCC rules or policies noted above, the possible outcome of any proposed or pending Congressional legislation, or the impact of any of those changes on the Company's broadcast operations.

RISK FACTORS

        You should carefully consider the following discussion of risks and the other information included or incorporated by reference in this report in evaluating the Company and our business as well as the business of the combined company, assuming we complete our acquisition of HBC. The risks described below are not the only ones facing the Company or the combined company. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business operations.

Regulatory agencies may oppose or impose conditions on the merger with HBC that may delay the merger's completion or lessen its anticipated benefits.

        The merger is subject to review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the HSR Act). We filed the notification and report forms required under the HSR Act, and, on February 26, 2003, we reached a tentative agreement with the United States Department of Justice (which we refer to as the DOJ). We are currently working with the DOJ to finalize the agreement. In addition, the attorneys general of seven states have requested information regarding the merger. We continue to provide information to, and cooperate with, the DOJ and the state attorneys general. We cannot assure you that we will finalize the agreement with the DOJ, in which case we may not be able to complete the merger. Furthermore, at any time before or after the completion of the merger, federal regulators could take a variety of actions under antitrust laws, including seeking to prevent the merger or seeking the divestiture of substantial assets of the Company

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or HBC. In addition, private parties as well as additional state attorneys general may challenge the merger under United States or foreign antitrust laws. We may not prevail in defending any such challenge, in which case we may not be able to complete the merger. We may also incur significant costs in defending or settling any such challenge. Any delay in the completion of the merger could diminish the anticipated benefits of the merger or result in additional transaction costs, loss of revenue or other effects associated with uncertainty about the merger. We also may agree to restrictions or conditions imposed by antitrust authorities in order to obtain regulatory approval, and these restrictions or conditions could harm the combined company's operations.

        The merger also requires the consent of the Federal Communications Commission (which we refer to as the FCC). We tendered to the FCC an application seeking consent to the merger, and, once an agreement with the DOJ is finalized, we expect the FCC to take action on our application. We cannot assure you that we will obtain FCC approval, and it is possible that we may agree to restrictions or conditions in order to obtain FCC approval, including divestiture of certain broadcast stations. Any such restrictions and conditions could harm the combined company's ability to obtain the full range of benefits anticipated from the merger.

Failure to complete the merger could negatively affect our stock price and our ability to enter an alternative transaction to achieve the benefits intended by the merger.

        If the merger is not completed for any reason, we may experience a number of adverse consequences, including a decline in our stock price to the extent that the current price reflects a market assumption that we will complete the merger. In addition, we must pay our costs related to the merger, including legal and accounting fees, even if the merger is not completed; in fact, in certain circumstances failure to close the merger may require us to pay a $100 million breakup fee to HBC. Furthermore, if the merger is terminated and if we desire to enter another merger or business combination to achieve the benefits intended by the proposed merger, we may not find a partner at an attractive price and we therefore may not be able to otherwise achieve those benefits.

Cancellations or reductions of advertising could reduce our revenues.

        We have in the past derived, and we expect the Company (and the combined company, if the acquisition of HBC is completed) to continue to derive, substantially all of its revenues from advertisers. Other than network advertising, some of which is presold on an annual basis, we generally have not obtained, and we do not expect the Company (or the combined company, if the acquisition of HBC is completed) to obtain, long-term commitments from advertisers. Therefore, advertisers generally may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases of advertising could, and often do, occur as a result of a strike, a general economic downturn, an economic downturn in one or more industries or in one or more geographic areas, or a failure to agree on contractual terms. Since the middle of the third quarter of 2000, there has been a general slowdown in the advertising industry. As a result of this slowdown, some advertisers have cancelled, reduced or postponed their orders with us. If this trend continues, and if we are unable to replace any lost or delayed advertising orders, our revenues and results of operations would be adversely affected. Similarly, future events, such as those occurring on September 11, 2001, may require us to program without any advertising, which in turn could reduce our revenues and results of operations.

Because the U.S. Hispanic population is highly concentrated geographically, our results of operations are sensitive to the economic conditions in particular markets, and negative events in those markets could reduce our revenues.

        Approximately 33% of all U.S. Hispanics live in the Los Angeles, New York and Miami-Fort Lauderdale markets, and the top ten U.S. Hispanic markets collectively account for approximately 56% of the U.S. Hispanic population. Our revenues, and the revenues of the combined company if the acquisition of HBC is completed, are similarly concentrated in these key markets. As a result, an

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economic downturn, increased competition, or another significant negative event in these markets could reduce our revenues and results of operations more dramatically than other companies that do not depend as much on these markets.

Because of our concentrated share ownership, Mr. Perenchio has control over our business and future direction, which could delay or prevent us from being acquired and could prevent our stockholders from realizing a premium for their shares of common stock.

        Mr. Perenchio beneficially owns all of our outstanding Class P common stock, which gives him ten votes per share compared to the one vote per share of all of our other capital stock. As of December 31, 2002, and assuming no exercise of options or warrants, Mr. Perenchio controlled approximately 70% of the voting power of the Class A and P common stock (which vote together to elect all of our directors except two), and approximately 66% of our overall voting power. Therefore, Mr. Perenchio has control over all matters submitted to our stockholders for vote (subject to supermajority board approvals and subject to class voting required by law), including election of directors, proxy contests, mergers, and other transactions that could give our stockholders the opportunity to realize a premium over the then prevailing market price for their shares of common stock. If we complete our acquisition of HBC, Mr. Perenchio will continue to control all such matters.

Because our full-power television stations rely on "must carry" rights to obtain cable carriage, new laws or regulations that eliminate or limit the scope of these rights could significantly reduce our ability to obtain cable carriage and therefore revenues.

        Pursuant to the "must carry" provisions of the Cable Television Consumer Protection and Competition Act of 1992, television broadcast stations may demand that a cable operator carry its signal if the cable operator serves the same market as the broadcast station. However, the broadcast station cannot demand compensation from the cable operator. A demand for carriage is commonly referred to as "must-carry." The future of "must carry" rights is uncertain, especially as they relate to the carriage of digital television. The current FCC rules relate only to the carriage of analog television signals, and it is not clear what, if any, "must-carry" rights television broadcast stations will have after a transition to digital television. Our full-power television stations rely on "must-carry" rights to obtain cable carriage. New laws or regulations that eliminate or limit the scope of these cable carriage rights could significantly reduce our ability to obtain cable carriage, which would reduce our ability to broadcast our programming and consequently our ability to generate revenues from advertising.

We may need to allocate significant amounts of our cash flow to make payments on our indebtedness, which in turn could reduce our financial flexibility and ability to fund other activities.

        At December 31, 2002, we had total indebtedness, including capital lease obligations, in excess of $1.4 billion. This could have important consequences depending on our financial needs. For example, because it could require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, the indebtedness could:

•

reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions, investments and other general corporate purposes;



•

limit our flexibility in planning for or reacting to downturns or fluctuations in our business;



•

limit our ability to borrow additional funds.

        These in turn could place us at a competitive disadvantage compared to our competitors that have less debt and therefore more financial resources to dedicate to operations.

        Assuming we continue to comply with certain financial ratios and other conditions in our bank credit agreement, our principal repayment and interest obligations and capital lease obligations through December 31, 2003 will total approximately $52 million. Our ability to meet these obligations will

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depend on our ability to continue to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond our control, and it is not certain that our business will continue to generate sufficient cash flow from operations in the future or that future borrowings or other capital will be available at all or on reasonable terms in an amount sufficient to enable us to make payments on our indebtedness. If we do incur additional indebtedness, the new debt, when added to our current debt levels, could augment the risks described above.

Failure to properly manage our rapid growth could distract our management or waste our resources.

        We have significantly increased our business within a short period of time both internally and through acquisitions. We have commenced a new network, TeleFutura, we have more than doubled the number of our wholly owned-and-operated full-power television stations since June 2001, and we have entered into two new lines of business (music and Internet) and expect to enter a third new line of business (radio) in the near future if we complete our pending acquisition of HBC.

        For example, if we complete our acquisition of HBC, we would need to combine corporate cultures, business processes and methods, operations in the television business with operations in the radio business and the approximately 3,000 Univision full-time employees as of December 31, 2002 with the approximately 1,000 Hispanic Broadcasting full-time employees on that date.

        As a result, management of the combined company would assume significantly greater responsibilities resulting from combining the two companies, and we cannot assure you that management would effectively operate the combined company. Integrating the two businesses would be difficult and may require substantial changes to the way either company currently does business.

        We may continue to grow rapidly in a short period of time. Growth in this manner could result in a strain on our infrastructure and internal systems. Failure to effectively integrate newly-acquired companies or newly-entered businesses could undermine the potential benefits intended by acquisitions or entry into new businesses, could distract our management, and could require us to unexpectedly allocate substantial resources (financial and otherwise) to the integration efforts.

ITEM 2. Properties

        The principal buildings owned or leased by the Company are described below:

Principal Properties of the Company(1)

(1)

For additional information see Note 7 to Notes to Consolidated Financial Statements.

(2)

Option to renew available.

(3)

Capital Lease.

        The Miami owned facilities house Univision Network and TeleFutura Network administration, operations (including uplink facilities), sales, production, news. In addition, Galavisión operations and WLTV, the Miami station, occupy space in Univision Network's facility. The Company broadcasts its programs to the Company's affiliates on three separate satellites from four transponders, one of which

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is owned and three of which are leased pursuant to two lease agreements that expire in 2012. In addition, the Company uses a fifth transponder for news feeds.

        The Company owns or leases remote antenna space and microwave transmitter space near each of its owned-and-operated stations. Also, the Company leases space in public warehouses and storage facilities, as needed, near some of its owned-and-operated stations.

        The Company believes that its principal properties, whether owned or leased, are suitable and adequate for the purposes for which they are used and are suitably maintained for such purposes. Except for the inability to renew any leases of property on which antenna towers stand or under which the Company leases transponders (neither of which are known risks), the inability to renew any lease would not have a material adverse effect on the Company's financial condition or results of operations since the Company believes alternative space on reasonable terms is available in each city.

ITEM 3. Legal Proceedings

        The Company is involved in litigation arising in the ordinary course of business. Management has accrued amounts it believes are reasonable and any amounts in excess of those accruals, either alone or in the aggregate, would not be material to the Company. See Note 9 to Notes to Consolidated Financial Statements.

ITEM 4. Submission of Matters to a Vote of Security Holders

        Not applicable.

Executive Officers

        The executive officers of the Company serve at the discretion of its Board of Directors subject to certain employment agreements. Messrs. Blank, Kranwinkle, Rodriguez and Hobson have employment agreements with the Company.

        The executive officers of the Company as of December 31, 2002 were as follows:

        Mr. A. Jerrold Perenchio has been Chairman of the Board and Chief Executive Officer of the Company since December 1992. From December 1992 through January 1997, he was also the Company's President. Mr. Perenchio has owned and been active in Chartwell Partners LLC since it was formed in 1983. Chartwell Partners LLC is an investment firm that is active in the media and communications industry.

        Mr. Blank has been Executive Vice President and Chief Financial Officer of the Company since December 1992.

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        Mr. Cahill has been Vice Chairman and Corporate Secretary of the Company since May 2001. From December 1992 until May 2001, Mr. Cahill was Secretary and Vice President of the Company. Mr. Cahill has been Executive Vice President and General Counsel of Chartwell Partners, an affiliate of Mr. Perenchio, since 1985.

        Mr. Hobson has been Executive Vice President of the Company since 2001. From 1994 to 2000, Mr. Hobson was an Executive Vice President of Univision Network. Mr. Hobson served as a Principal at Chartwell Partners LLC, an affiliate of Mr. Perenchio from 1990 to 1994.

        Mr. Kranwinkle has been Executive Vice President and General Counsel of the Company since September 2000. From January 1989 until September 2000, Mr. Kranwinkle was a partner of O'Melveny & Myers LLP, a law firm. While at O'Melveny & Myers LLP, Mr. Kranwinkle was the managing partner of its New York office from December 1993 until June 1997, and the firm's managing partner from April 1996 until September 2000.

        Mr. Rodriguez has been President and Chief Operating Officer of Univision Network since December 1992. In addition, Mr. Rodriguez has been President and Chief Operating Officer of TeleFutura Network and Galavisión Network since August 2001.

PART II

ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters

(a)

Market Information

        The Company's Class A Common Stock is listed on the New York Stock Exchange and is traded under the symbol "UVN". The table below lists the high and low sales prices for the Class A Common Stock as reported on the New York Stock Exchange for each full quarterly period within the two most recent fiscal years.

(b)

Holders

        At February 13, 2003, the approximate number of stockholders of record of the Company's Class A Common Stock was 212.

(c)

Cash Dividends

        No cash dividends were paid on any class of the Company's common stock in 2002. The Company has never declared or paid dividends on any class of its common stock. The Company's current credit agreement restricts the payment of cash dividends on common stock. The Company currently intends to retain any earnings for use in its business and does not anticipate paying any cash dividends on its common stock in the foreseeable future. Future dividend policy will depend on the Company's earnings, capital requirements, financial condition and other factors considered relevant by the Board of Directors.

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ITEM 6. Selected Financial Data

        Presented below is the selected historical financial data of Univision Communications Inc.

FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
(In thousands, except share and per-share data)