CLAXSON

CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION - BY SEGMENT

(In Thousands of U.S. dollars)

Operating Depre- Consolidated

expenses ciation Operating

Net (before depr. & amorti- Total Income

Revenues and amort.) zation expenses (loss)

For the Three Months

Ended June 30,

2004

Pay TV $12,344 $9,036 $795 $9,831 $2,513

Broadcast 10,593 7,283 658 7,941 2,652

Internet & Broadband 31 279 7 286 (255)

Corporate -- 578 -- 578 (578)

Total $22,968 $17,176 $1,460 $18,636 $4,332

2003

Pay TV $11,803 $11,109 $984 $12,093 $(290)

Broadcast 7,887 6,149 500 6,649 1,238

Internet & Broadband 56 935 7 942 (886)

Corporate -- 1,072 -- 1,072 (1,072)

Total $19,746 $19,265 $1,491 $20,756 $(1,010)

Operating Depre- Consolidated

expenses ciation Operating

Net (before depr. & amorti- Total Income

Revenues and amort.) zation expenses (loss)

For the Six Months

Ended June 30,

2004

Pay TV $23,689 $18,939 $1,636 $20,575 $3,114

Broadcast 19,538 14,833 1,374 16,207 3,331

Internet & Broadband 57 540 7 547 (490)

Corporate -- 1,904 -- 1,904 (1,904)

Total $43,284 $36,216 $3,017 $39,233 $4,051

2003

Pay TV $23,859 $20,609 $1,738 $22,347 $1,512

Broadcast 14,276 11,771 1,336 13,107 1,169

Internet & Broadband 84 1,423 7 1,430 (1,346)

Corporate -- 2,507 -- 2,507 (2,507)

Total $38,219 $36,310 $3,081 $39,391 $(1,172)

CLAXSON

BALANCE SHEETS

(In Thousands of U.S. dollars)

As of As of

June 30, December 31,

2004 2003

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $7,236 $7,682

Restricted investments -- 213

Accounts receivable, net 26,255 25,249

Other current assets 6,625 7,409

Total current assets 40,116 40,553

RESTRICTED INVESTMENTS -- 750

PROPERTY AND EQUIPMENT, net 17,206 19,107

PROGRAMMING RIGHTS, net 5,117 4,804

INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES 1,047 1,061

INVESTMENTS IN EQUITY SECURITIES 94 54

GOODWILL 51,874 53,627

BROADCAST LICENSES 19,196 21,160

OTHER ASSETS 4,786 4,223

TOTAL ASSETS $139,436 $145,339

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable, accrued and other

liabilities $29,633 $30,928

Current portion of programming rights

obligations 8,919 10,082

Current portion of long-term debt 9,630 14,657

Total current liabilities 48,182 55,667

LONG-TERM LIABILITIES:

Long-term debt, net of current portion 75,378 73,616

Other long-term liabilities 4,576 4,935

Total long-term liabilities 79,954 78,551

MINORITY INTEREST 825 1,128

SHAREHOLDERS' EQUITY 10,475 9,993

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $139,436 $145,339

CLAXSON

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands of U.S. dollars, except per share data)

Three Months Ended Six Months Ended

June 30, June 30,

2004 2003 2004 2003

NET REVENUES:

Subscriber-based fees $9,928 $9,339 $19,439 $19,132

Advertising 12,074 8,886 21,990 15,912

Production services 717 615 1,328 1,527

Other 249 906 527 1,648

Total net revenues 22,968 19,746 43,284 38,219

OPERATING EXPENSES:

Product, content and technology 10,695 8,658 20,849 17,469

Marketing and sales 2,667 3,284 7,044 6,664

Corporate and administration 3,814 4,565 8,323 9,419

Depreciation and amortization 1,460 1,491 3,017 3,081

Impairment of goodwill -- 2,758 -- 2,758

Total operating expenses 18,636 20,756 39,233 39,391

OPERATING INCOME (LOSS) 4,332 (1,010) 4,051 (1,172)

INTEREST EXPENSE (541) (596) (999) (1,254)

OTHER INCOME (EXPENSE), NET (247) 904 (55) 845

FOREIGN CURRENCY EXCHANGE GAIN (LOSS) (1,523) 2,624 (759) 9,932

NET GAIN FROM UNCONSOLIDATED

AFFILIATES 678 83 875 105

PROVISION FOR INCOME TAXES (392) (73) (652) (834)

MINORITY INTEREST (24) 43 3 84

NET INCOME $2,283 $1,975 $2,464 $7,706

NET INCOME PER COMMON SHARE (Basic) $0.12 $0.11 $0.13 $0.41

NET INCOME PER COMMON SHARE (Diluted) $0.11 $0.10 $0.12 $0.40

NUMBER OF SHARES USED IN PER SHARE

CALCULATIONS (Basic) 19,491 18,678 19,469 18,678

NUMBER OF SHARES USED IN PER SHARE

CALCULATIONS (Diluted) 19,926 19,428 19,927 19,428

CLAXSON

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of U.S. dollars)

Six Months Ended

June 30,

2004 2003

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $2,464 $7,706

Adjustments to reconcile net loss to

net cash (used in) provided by

operating activities:

Amortization of programming rights 2,501 2,035

Share-based compensation 33 26

Depreciation and amortization 3,017 3,081

Accrued and unpaid interest 380 182

Exchange rate (gain) loss 759 (9,932)

Impairment of goodwill -- 2,758

(Gain) from unconsolidated subsidiaries (875) (105)

Minority interest (3) (84)

Changes in operating assets and liabilities (4,815) (944)

Net cash provided by operating activities 3,461 4,723

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment (942) (1,380)

Payments for acquisition of minority interest -- (2,416)

Transaction costs paid (1,152) (1,319)

Dividends distributions to minority owners

of subsidiaries (380) --

Investment in unconsolidated subsidiaries -- (110)

Dividends from unconsolidated subsidiaries 247 --

Proceeds on sale of investment in unconsolidated

subsidiaries 625 362

Net cash (used in) provided by investing

activities (1,602) (4,863)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net repayments of short/long-term debt (3,351) (3,782)

Restricted cash released in guaranty of

Chilean syndicated loan 907 694

Proceeds from exercised stock options 52 --

Net cash used in financing activities (2,392) (3,088)

EFFECT OF FOREIGN CURRENCY TRANSLATION ON

CASH AND CASH EQUIVALENTS 87 (527)

NET DECREASE IN CASH AND CASH EQUIVALENTS (446) (3,755)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,682 8,072

CASH AND CASH EQUIVALENTS, END OF PERIOD $7,236 $4,317