As filed with the Securities and Exchange Commission on February 12, 2004

Registration Number 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

LIBERMAN BROADCASTING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

4832

20-0888078

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

1845 West Empire Avenue

Burbank, California 91504

(818) 563-5722

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Brett Zane

Chief Financial Officer

Liberman Broadcasting Corporation

1845 West Empire Avenue

Burbank, California 91504

(818) 563-5722

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Joseph K. Kim, Esq.

David J. Johnson, Jr., Esq.

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071-2899

Telephone: (213) 430-6000

Fax: (213) 430-6407

Cynthia A. Rotell, Esq.

Latham & Watkins LLP

633 West Fifth Street, Suite 4000

Los Angeles, California 90071

Telephone: (213) 485-1234

Fax: (213) 891-8763

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

CALCULATION OF REGISTRATION FEE

(1)	Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(2)	Includes shares which the underwriters have the option to purchase to cover over-allotments, if any.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED FEBRUARY 12, 2004

LOGO

Liberman Broadcasting Corporation

Class A Common Stock

We are selling shares of Class A common stock and the selling stockholder is selling shares of Class A common stock. We will not receive any of the proceeds from the shares of Class A common stock sold by the selling stockholder.

Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price of the Class A common stock is expected to be between $ and $ per share. We will apply to list our Class A common stock on The NASDAQ National Market under the symbol “LBIM.”

The underwriters have an option to purchase a maximum of additional shares to cover over-allotments of shares.

Investing in our Class A common stock involves risks. See “ Risk Factors” on page 7.


	Price to Public	Underwriting Discounts and Commissions	Proceeds to Liberman Broadcasting Corporation	Proceeds to Selling Stockholder
Per Share	$	$	$	$
Total	$	$	$	$

Delivery of the shares of Class A common stock will be made on or about , 2004.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Joint Book-Running Managers


Credit Suisse First Boston		Deutsche Bank Securities

UBS Investment Bank

The date of this prospectus is , 2004.

TABLE OF CONTENTS


		Page
PROSPECTUS SUMMARY		1
RISK FACTORS		7
FORWARD-LOOKING STATEMENTS		17
USE OF PROCEEDS		18
DIVIDEND POLICY		19
DILUTION		20
CAPITALIZATION		21
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA		22
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		24
BUSINESS		40
REGULATION OF TELEVISION AND RADIO BROADCASTING		48
MANAGEMENT		57


		Page
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		60
PRINCIPAL AND SELLING STOCKHOLDERS		61
DESCRIPTION OF CAPITAL STOCK		63
DESCRIPTION OF INDEBTEDNESS		66
SHARES ELIGIBLE FOR FUTURE SALE		70
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS		71
UNDERWRITING		75
NOTICE TO CANADIAN RESIDENTS		78
LEGAL MATTERS		79
EXPERTS		79
WHERE YOU CAN FIND MORE INFORMATION		79
INDEX TO FINANCIAL STATEMENTS		F-1

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Dealer Prospectus Delivery Obligation

Until , 2004 (25 days after the commencement of the offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

PROSPECTUS SUMMARY

You should read the entire prospectus, including “Risk Factors” and our financial statements and related notes, before making an investment decision. Unless otherwise indicated, the information contained in this prospectus assumes that the underwriters’ over-allotment option is not exercised. In this prospectus, we use the terms “we,” “us” and “our” to refer to Liberman Broadcasting Corporation, a Delaware corporation and the successor to LBI Holdings I, Inc., together with its subsidiaries. “Liberman Broadcasting” refers to Liberman Broadcasting Corporation and its predecessor on an unconsolidated basis. “LBI Media Holdings” refers to LBI Media Holdings, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Liberman Broadcasting, on an unconsolidated basis, and “LBI Media” refers to LBI Media, Inc., a California corporation and a direct, wholly owned subsidiary of LBI Media Holdings, together with its subsidiaries.

Our Company

We are the largest privately held, Spanish-language broadcaster in the United States based on revenues. We have created radio and television clusters in Los Angeles and Houston, the first and fourth largest Hispanic markets in the United States, respectively, based on Hispanic television households. Our Los Angeles cluster consists of five Spanish-language radio stations (four FM and one AM), one AM station with time-brokered programming and a television station. Our Houston cluster consists of seven Spanish-language radio stations (five FM and two AM), two AM stations with time-brokered programming and a television station. We also own television stations serving Dallas and San Diego, the sixth and twelfth largest Hispanic markets in the United States, respectively, based on Hispanic television households. In addition, we operate a television production facility, Empire Burbank Studios, in Burbank, California that we use to produce most of our television programming, and we have television production facilities in Houston and Dallas that will allow us to produce local programming for those markets.

Jose and Lenard Liberman, father and son, founded our company in 1987 and together have over 55 years of operating experience in the broadcasting industry. We view Jose Liberman as an industry pioneer having owned and operated the first Spanish-language FM station in the Los Angeles market in the mid-1970s. Lenard Liberman manages our day-to-day operations and, together with his father, has primary responsibility for our strategic direction. In addition, we have assembled a management team of industry veterans to direct our sales and programming.

We seek to own and operate radio and television stations in the nation’s largest and most densely populated Hispanic markets. Our strategy is to increase revenue and cash flow in our markets by reformatting acquired stations with our focused programming, creating dynamic promotions, formulating targeted marketing to our local markets and implementing strict cost controls. We have grown our total net revenues from $27.1 million in 1998 to $71.0 million in 2002, and our Adjusted EBITDA margin for 2002 was 52.4%. For the same period, our net loss increased from $4.6 million in 1998 to $17.9 million in 2002. However, for the nine months ended September 30, 2003, our net income increased to $7.2 million compared to a net loss of $15.6 million during the same period in 2002. For a reconciliation of Adjusted EBITDA to net cash (used in) provided by operating activities, see footnote (1) under “Selected Historical Consolidated Financial and Other Data.”

Operating Strategy

The principal components of our operating strategy are set forth below:

Develop popular stations by targeting the local community. We create radio and television programming specifically tailored to the preferences of each of the Hispanic populations living in our markets to create a highly

local station identity. We believe our ability to produce locally targeted programming gives us an advantage over most other Spanish-language broadcasters that develop and distribute their programming on a national or regional basis. As a result, we have generally been able to achieve and maintain strong station ratings in our markets.

Capitalize on our complementary radio and television stations to capture a greater share of advertising revenue. We own Spanish-language radio and television stations in both the Los Angeles and Houston markets and have been able to create substantial cross-selling and cross-promotional opportunities. We create cross-selling opportunities by offering our advertisers a customized package that allows them to cross-advertise on radio and television, as well as to cross-merchandise through product integration in our programming. We believe that we are able to capture a larger share of advertising revenues in our markets because of our ability to cross-sell and cross-promote our radio and television stations. We use a portion of our spot inventory time at both our radio and television stations to air advertisements that promote our other stations and programs.

Develop a diverse local advertiser base. Consistent with our locally targeted programming strategy, our sales strategy is focused on establishing direct relationships with the local advertising community. We believe that local advertisers are more responsive to Hispanic advertising opportunities in our markets and are less ratings sensitive and more recession resistant than national advertisers. Local advertising accounted for approximately 83% of our gross revenue in 2002. In addition, our large and diverse client base resulted in no single advertiser accounting for more than 5% of our net revenues in 2002.

Offer cost-effective advertising and value-added services to our advertisers. We support advertisers’ media campaigns with creative promotions utilizing our radio and television clusters and offer our studio facilities to provide value-added services to our advertisers such as free commercial production. These unique services allow us to cross-sell our broadcasting properties and attract new customers currently not advertising on radio or television.

Utilize cost-effective television programming to drive cash flow growth. Our television programming consists of both internally produced and purchased programming, which, when combined with our long-form advertising, creates an effective programming line-up for our television stations. Our in-house television production facilities provide us with an efficient cost structure to create programming, such as our popular talk shows José Luis Sin Censura and El Show de María Laria and our reality-based programs Buscando Amor and Segunda Cita. In addition, we realize programming synergies between our radio and television assets by featuring our radio formats and on-air radio personalities in our television programming. As we acquire additional television stations, we are able to leverage our programming library across a broader base of stations, thereby increasing our profitability.

Acquisition Strategy

Our acquisition strategy focuses on identifying and acquiring selected assets of radio and television stations in the largest, most densely populated and fastest growing U.S. Hispanic markets to build market-leading Hispanic radio and television clusters. At the time of acquisition, these stations often do not target the local Hispanic market, but are ones which we believe can be successfully reformatted to capture this audience. In analyzing our acquisition opportunities, we consider the following criteria for a station:

•

the size and density of the Hispanic population and general economic conditions in the market;

•

our ability to expand coverage in an existing cluster or develop a new cluster in a market where we believe we can acquire a meaningful share of the Hispanic audience;

•

our ability to acquire underdeveloped properties that offer the potential for significant improvement in revenues and cash flow through the application of our operating, administrative and programming expertise; and

•

the power and quality of the station’s broadcasting signal.

We have built a long-term track record of acquiring and developing underperforming radio and television stations that has enabled us to achieve significant increases in our net revenue over the past decade. Since our founding in 1987, we have developed 16 Spanish-language, start-up radio and television stations by reformatting acquired stations with our focused programming, executing creative promotions, conducting targeted marketing tailored to our local markets and implementing strict cost controls. For example, we entered the Houston market through the acquisition of selected assets of five radio stations and one television station in March 2001 and since then have acquired selected assets of four additional radio stations in the market. Within two and one-half years after entering the Houston market, we built the second-highest rated Hispanic radio station group and the second-highest rated Hispanic television station in that market. We believe that our record of successfully executing our acquisition strategy in new Hispanic markets positions us well to continue to create top-ranked Hispanic station groups in other Hispanic markets. On January 12, 2004, we entered the Dallas-Fort Worth market with the acquisition of selected assets of KMPX-TV for an aggregate purchase price of $37.0 million.

Hispanic Market Opportunity

We believe the Hispanic community represents an attractive market for future growth. The U.S. Hispanic population is the largest minority group in the United States and the fastest growing segment of the U.S. population, growing at approximately seven times the rate of the non-Hispanic U.S. population as reported in the 2000 U.S. Census. The U.S. Hispanic population grew 9.8% from April 2000 to July 2002, accounting for 50% of all U.S. population growth during this period, and is expected to reach approximately 43.7 million people, or 15% of the total U.S. population, by 2010 according to the U.S. Census Bureau.

In addition, advertisers have begun to direct more advertising dollars towards U.S. Hispanics and, consequently, Spanish-language radio and television advertising has grown at more than twice the rate of total radio and television advertising from 1997 to 2002. As advertisers continue to recognize the buying power of the U.S. Hispanic population, especially in areas where the concentration of Hispanics is very high and where a significant percentage of the retail purchases are made by Hispanic customers, we expect the gap in advertising rates between Spanish-language and English-language media to narrow.

We believe we are well positioned to capitalize on the growing Hispanic advertising market given the concentration of the Hispanic population in certain markets, our strong position in two of the five largest Hispanic markets in the United States, Los Angeles and Houston, based on Hispanic television households, and our record of successfully executing our acquisition strategy in new Hispanic markets.

Corporate Information

Liberman Broadcasting was incorporated in Delaware on February 3, 2004. Before this offering and subject to Federal Communications Commission, or FCC, approval, we intend to reincorporate our current parent entity, LBI Holdings, I, Inc., a California corporation, into a Delaware corporation, by merging it with and into Liberman Broadcasting, with Liberman Broadcasting as the surviving entity. Unless otherwise indicated, the information contained in this prospectus assumes the merger has taken place. Our principal executive offices are located at 1845 West Empire Avenue, Burbank, California 91504 and our telephone number is (818) 563-5722.

The Offering


Class A common stock offered by:
Liberman Broadcasting		shares
Selling stockholder		shares

Total		shares

Common stock to be outstanding after this offering:
Class A common stock		shares
Class B common stock		shares

Total		shares


Relative rights of Class A and Class B common stock	There will be two classes of common stock outstanding after this offering: Class A common stock and Class B common stock. Except with respect to voting and conversion, the rights of holders of Class A common stock and Class B common stock are the same. Each share of Class A common stock is entitled to one vote, and each share of Class B common stock is entitled to ten votes. Class A common stock and Class B common stock vote as a single class with respect to all matters submitted to a vote of stockholders. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder. See “Description of Capital Stock.”

Use of proceeds	We expect to use the net proceeds from this offering for the repayment of our debt. See “Use of Proceeds.”

Proposed NASDAQ National Market symbol	LBIM


Risk factors		See “Risk Factors” for a discussion of factors you should carefully consider before deciding to invest in shares of our Class A common stock.

The number of shares of Class A common stock to be outstanding after the offering assumes shares of Class A common stock will be issued at the closing of this offering upon the exercise of all warrants outstanding immediately before the offering and that the underwriters’ over-allotment option is not exercised.

Summary Consolidated Financial and Other Data

The following table sets forth our summary historical consolidated financial data for the fiscal years ended December 31, 1998, 1999, 2000, 2001 and 2002, the nine months ended September 30, 2002 and 2003 and as of September 30, 2003. The summary historical consolidated financial data for the fiscal years ended December 31, 2000, 2001 and 2002 were derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary historical consolidated financial data for the fiscal years ended December 31, 1998 and 1999 were derived from our audited consolidated financial statements not included in this prospectus. Our summary historical consolidated financial data for the nine months ended September 30, 2002 and 2003 and as of September 30, 2003 were derived from our unaudited consolidated financial statements. Operating results for the nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the entire year ended December 31, 2003. This summary financial data should be read in conjunction with, and is qualified in its entirety by reference to, “Selected Historical Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.


	Year Ended December 31,															Nine Months Ended September 30,
	1998			1999			2000			2001			2002			2002			2003
	(dollars in thousands, except per share amounts)
Operating Data:
Net revenues:
Radio	$	16,538		$	19,420		$	28,709		$	31,585		$	39,311		$	29,000		$	34,136
Television		10,603			16,997			21,843			28,072			31,685			22,941			27,766

Total net revenues		27,141			36,417			50,552			59,657			70,996			51,941			61,902
Operating expenses (exclusive of noncash employee compensation, depreciation and amortization and impairment of broadcast license shown below)		11,182			17,739			22,550			26,744			33,782			23,696			29,317
Noncash employee compensation		—			—			1,240			1,398			3,642			2,926			1,457
Depreciation and amortization		3,980			4,435			4,637			8,673			3,131			2,339			2,565
Impairment of broadcast license		—			—			—			—			1,750			1,750			—

Operating income		11,979			14,243			22,125			22,842			28,691			21,230			28,563
Interest expense, net		16,589			17,037			17,893			29,537			38,074			28,339			21,282
Loss on sale of property and equipment		—			6			—			—			388			388			4

(Loss) income before income taxes and cumulative effect of accounting change		(4,610	)		(2,800	)		4,232			(6,695	)		(9,771	)		(7,497	)		7,277
Income tax expense		3			6			74			81			42			31			60

(Loss) income before cumulative effect of accounting change		(4,613	)		(2,806	)		4,158			(6,776	)		(9,813	)		(7,528	)		7,217
Cumulative effect of accounting change		—			—			—			—			(8,106	)		(8,106	)		—

Net (loss) income	$	(4,613	)	$	(2,806	)	$	4,158		$	(6,776	)	$	(17,919	)	$	(15,634	)	$	7,217

Net (loss) income per share:
Basic	$	(23,064	)	$	(14,029	)	$	20,790		$	(33,877	)	$	(89,594	)	$	(78,173	)	$	36,086
Diluted		(23,064	)		(14,029	)		20,790			(33,877	)		(89,594	)		(78,173	)		33,725
Weighted average shares outstanding used to compute net (loss) income per share:
Basic		200			200			200			200			200			200			200
Diluted		200			200			200			200			200			200			214

Other Data:
Adjusted EBITDA(1)	$	15,959		$	18,678		$	28,002		$	32,913		$	37,214		$	28,245		$	32,585
Adjusted EBITDA margin(2)		58.8	%		51.3	%		55.4	%		55.2	%		52.4	%		54.4	%		52.6	%
Cash flows (used in) provided by operating activities	$	(10,492	)	$	1,609		$	9,591		$	6,631		$	15,405		$	7,739		$	7,698
Cash flows (used in) investing activities		(60,647	)		(9,693	)		(13,507	)		(108,677	)		(37,419	)		(6,614	)		(47,888	)
Cash flows provided by (used in) financing activities		70,706			11,475			(215	)		102,692			22,279			2,599			39,063


	As of September 30, 2003
	Actual			As Adjusted(3)
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	269
Working capital		9,712
Broadcast licenses, net		239,394
Total assets		333,042
Total long-term debt		303,104
Total stockholders’ deficiency		(22,091	)

(1)

We define Adjusted EBITDA as net (loss) income plus cumulative effect of accounting change, income tax expense, loss on sale of property and equipment, net interest expense, impairment of broadcast license, depreciation and amortization and noncash employee compensation. Management considers this measure an important indicator of our liquidity relating to our operations because it eliminates the effects of noncash items. This measure 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, such as cash flows from operating activities, operating income and net income. In addition, our definition of Adjusted EBITDA may differ from those of many companies reporting similarly named measures.

We discuss Adjusted EBITDA and the limitations of this financial measure in more detail under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measure.”

The table set forth below reconciles net cash (used in) provided by operating activities, calculated and presented in accordance with accounting principles generally accepted in the United States, to Adjusted EBITDA:


	Year Ended December 31,															Nine Months Ended Sept. 30,
	1998			1999			2000			2001			2002			2002			2003
	(in thousands)
Net cash (used in) provided by operating activities	$	(10,492	)	$	1,609		$	9,591		$	6,631		$	15,405		$	7,739		$	7,698
Add:
Gain on sale of investments		152			—			—			—			53			53			—
Income tax expense		3			6			74			81			42			31			60
Interest expense, net		16,589			17,037			17,893			29,537			38,074			28,339			21,282
Less:
Amortization of deferred financing costs		(1,223	)		(502	)		(502	)		(3,825	)		(8,192	)		(7,811	)		(1,217	)
Accretion on subordinated notes		—			—			—			(2,556	)		(940	)		(1,912	)		(697	)
Provision for doubtful accounts		(83	)		(179	)		(96	)		(170	)		(862	)		(230	)		(900	)
Changes in operating assets and liabilities:
Accounts receivable		291			366			2,142			1,901			3,701			2,186			4,340
Program rights		1,998			769			102			(314	)		317			919			18
Amounts due from related parties		192			704			(487	)		456			(88	)		320			(8	)
Prepaid expenses and other current assets		(343	)		(289	)		(71	)		656			101			(322	)		(476	)
Employee advances		39			(59	)		11			124			511			97			100
Accounts payable and accrued expenses		640			(642	)		(446	)		133			5			428			(757	)
Accrued interest		8,590			(243	)		(357	)		321			(10,733	)		(1,467	)		2,693
Program rights payable		(382	)		117			209			56			(58	)		—			16
Amounts due to related parties		(7	)		(16	)		(61	)		15			(34	)		(53	)		(73	)
Deferred state income tax payable		(5	)		—			—			(133	)		(31	)		(21	)		(50	)
Other assets and liabilities		—			—			—			—			(57	)		(51	)		556

Adjusted EBITDA	$	15,959		$	18,678		$	28,002		$	32,913		$	37,214		$	28,245		$	32,585

(2)	Adjusted EBITDA margin means Adjusted EBITDA divided by total net revenues.

(3)

Gives effect to (a) the issuance of approximately $68.4 million aggregate principal amount at maturity of LBI Media Holdings’ 11% Senior Discount Notes in October 2003 and the use of the approximately $38.6 million in net proceeds to repay amounts outstanding under LBI Media’s senior credit facility, (b) the acquisition of selected assets of KMPX-TV in January 2004 and (c) the offering of shares of our Class A common stock at an assumed initial public offering price of $ per share, less the underwriting discount and estimated offering expenses payable by us, and the application of the net proceeds as described under “Use of Proceeds” as if they had occurred on September 30, 2003.

RISK FACTORS

You should carefully consider the risks described below before investing in our Class A common stock. Although the risks described below are all of the risks that we believe are material, they are not the only risks relating to our business and the Class A common stock. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. Any of the following risks could have a material adverse effect on our business, financial condition or results of operations. The trading price of our Class A common stock could decline due to any of these risks and, therefore, you may lose all or part of your investment.

Risks Related to Our Business

We may suffer a decrease in advertising revenues due to competitive forces.

The success of our radio and television stations is primarily dependent upon their share of overall advertising revenues within their markets, especially in Los Angeles and Houston. Our stations compete for audiences and advertising revenue directly with other Spanish-language radio and television stations, and many of the owners of those competing stations have greater resources than we do. Two of our largest competitors, each of whom has greater resources than we do, merged and became our first competitor to operate both radio and television stations in Los Angeles, Houston and Dallas, markets in which we derive substantially all of our revenues. As the Hispanic population grows in the United States, more stations may begin competing with us by converting to a format similar to that of our stations.

In addition, our stations compete for audiences and advertising revenue with other media, including cable television and to a lesser extent, satellite television, newspapers, magazines, the Internet and outdoor advertising. We anticipate that our radio stations may also compete with satellite-based radio services in the future. Our failure to offer advertisers effective, high quality media outlets could cause them to allocate more of their advertising budgets to our competitors, which could cause a decrease in our net revenues and adversely affect our results of operations and financial condition.

The loss of key personnel could disrupt our business and result in a loss of advertising revenues.

Our success depends in large part on the continued efforts, abilities and expertise of our officers and key employees and our ability to hire and retain qualified personnel. The loss of any member of our management team, particularly either of our founders, Jose and Lenard Liberman, could disrupt our operations and hinder or prevent implementation of our business plan, which could have a material and adverse effect on our business, financial condition and results of operations. In addition, if Lenard Liberman ceases to serve as an officer of our company or ceases to have an oversight role with respect to our operations and we are not able to replace him with a person of comparable experience within 180 days following his departure, this will trigger an event of default under LBI Media’s senior credit facility, which could in turn cause a cross-default under the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes.

Our growth depends on successfully executing our acquisition strategy.

As we have done in the past, we intend to continue to supplement our internal growth by acquiring media properties that complement or augment our existing markets. We may be unable to identify or complete acquisitions for many reasons, including:

•

competition among buyers;

•

the need for regulatory approvals, including FCC and antitrust approvals;

•

the high valuations of media properties; and

•

the need to raise additional financing, which may be limited by the terms of our debt instruments, including LBI Media’s senior credit facility and the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes.

If we are unable to successfully execute our acquisition strategy, our growth may be impaired.

In addition, future acquisitions by us could also result in the following consequences:

•

issuances of equity securities;

•

incurrence of debt and contingent liabilities;

•

impairment of goodwill and other intangibles; and

•

other acquisition-related expenses.

Furthermore, after we have completed an acquisition, our management must be able to assume significantly greater responsibilities, which may cause them to divert their attention from our existing operations. We believe that these challenges are more pronounced when we enter new markets rather than expand further in existing markets.

If we cannot successfully develop and integrate our recent and future acquisitions, our financial results could be adversely effected.

To develop and integrate our recent and future acquisitions, we may need to:

•

reformat stations with Spanish-language programming and build advertiser, listener and/or viewer support;

•

integrate and improve operations and systems and the management of a station or group of stations;

•

retain or recruit key personnel to manage acquired assets;

•

realize sales efficiencies and cost reduction benefits from acquired assets; and

•

operate successfully in markets in which we may have little or no prior experience.

In addition, there is a risk that the stations we have acquired or may acquire in the future may not enhance our financial performance or yield other anticipated benefits. If we are unable to completely integrate into our business the operations of the properties that we have recently acquired or that we may acquire in the future, our costs could increase. Also, in the event that the operations of a new station do not meet our expectations, we may restructure or write-off the value of some portion of the assets of the new station.

If we are unable to convert acquired stations successfully to a Spanish-language format, anticipated revenues from these acquisitions may not be realized.

Our acquisition strategy has often involved acquiring English-language stations and converting them to a Spanish-language format. We intend to continue this strategy with some of our future acquisitions. This conversion process may require a heavy initial investment of both financial and management resources. We may incur losses for a period of time after a format change due to the time required to build up ratings and station loyalty. These format conversions may be unsuccessful in any given market, and we may incur substantial costs and losses in implementing this strategy.

Cancellations or reductions of advertising could adversely affect our results of operations.

We do not generally obtain long-term commitments from our advertisers. As a result, our advertisers may cancel, reduce or postpone orders without penalty. Cancellations, reductions or delays in purchases of advertising

could adversely affect our revenue, especially if we are unable to replace these purchases. Our expense levels are based, in part, on expected future revenue and are relatively fixed once set. Therefore, unforeseen decreases in advertising sales could have a material adverse impact on our operating results.

We have a substantial amount of debt, which will require a significant amount of cash and could adversely affect our financial condition and prevent us from fulfilling our obligations under our debt instruments.

We currently have a substantial amount of debt. At September 30, 2003, after giving effect to (a) the acquisition of selected assets of KMPX-TV in January 2004 and (b) this offering and the application of net proceeds as described under “Use of Proceeds,” we would have had total indebtedness of approximately $ million.

Since our total capitalization consists of % debt, we are considered highly leveraged and will have to devote substantial resources to repaying our debt on its scheduled payment dates. Based on our current interest rates and assuming no additional borrowings or principal payments on LBI Media’s senior credit facility until its maturity in 2009, as of September 30, 2003, we would have needed approximately $152.0 million over the next five years to meet our principal and interest payments under our debt agreements, of which approximately $20.6 million would be due over the next year. Our substantial indebtedness could require us to dedicate a substantial portion of our cash flow from operations to pay principal and interest on our debt, which would reduce availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes.

Our business may not generate sufficient cash flow from operations, or future borrowings may not be available to us under LBI Media’s senior credit facility or from other sources, in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. The commitment level under LBI Media’s senior credit facility automatically reduces each quarter beginning June 30, 2005 until it is fully amortized at September 30, 2009. LBI Media’s senior subordinated notes mature in 2012 and LBI Media Holdings’ senior discount notes mature in 2013. In addition, LBI Media’s ability to borrow funds under its senior credit facility depends on LBI Media’s ability to meet the financial covenants in the agreements governing its facility, including a minimum interest coverage test and a maximum leverage ratio test. If we are unable to pay our debts, we will be required to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling additional debt or equity securities. We may not be able to refinance any of our debt or sell additional debt or equity securities or our assets on favorable terms, if at all. If we are unable to generate sufficient cash flow, refinance our debt on favorable terms or sell additional debt or equity securities or our assets, it could have a material adverse effect on our financial condition and on our ability to make payments on our debt.

The restrictive covenants in our debt instruments may affect our ability to operate our business successfully.

The indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes and the terms of LBI Media’s senior credit facility contain various provisions that limit our ability to, among other things:

•

incur or guarantee additional debt and issue preferred stock;

•

receive dividends or distributions from our subsidiaries;

•

make investments and other restricted payments;

•

issue or sell capital stock of restricted subsidiaries;

•

grant liens;

•

transfer or sell assets;

•

consolidate, merge or transfer all or substantially all of our assets; and

•

enter into transactions with affiliates.

Liberman Broadcasting is dependent on cash distributions from its subsidiaries to meet its obligations. The restrictive covenants in LBI Media’s senior credit facility and the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes may limit its subsidiaries’ ability to distribute cash to it. As a result, Liberman Broadcasting may not be able to meet Liberman Broadcasting’s obligations as they become due. In addition, LBI Media’s senior credit facility requires that LBI Media maintain specific financial ratios. If we fail to comply with the restrictive covenants contained in the applicable indentures and LBI Media’s senior credit facility or maintain the financial ratios required by LBI Media’s senior credit facility, this would constitute an event of default.

If there were an event of default under LBI Media’s senior credit facility, LBI Media’s senior subordinated notes, LBI Media Holdings’ senior discount notes or any other future indebtedness, the holders of the affected indebtedness could declare all of that indebtedness immediately due and payable, which, in turn, could cause the acceleration of the maturity of all of our other indebtedness. We may not have sufficient funds available, or we may not have access to sufficient capital from other sources, to repay any accelerated debt. Even if we could obtain additional financing, the terms of the financing may not be favorable to us. In addition, substantially all of our subsidiaries’ assets are subject to liens securing LBI Media’s senior credit facility. If amounts outstanding under LBI Media’s senior credit facility are accelerated, its lenders could foreclose on these liens. Our assets may not be sufficient to repay borrowings under LBI Media’s senior credit facility and the amounts due under LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes in full. Any event of default under the senior credit facility, LBI Media’s senior subordinated notes, LBI Media Holdings’ senior discount notes or any other future indebtedness could have a material adverse effect on our business, financial condition and results of operations.

The loss of our status as an S corporation may result in us having less cash available for our operations.

Liberman Broadcasting has elected to be treated as an S corporation, and all of our subsidiaries have elected to be treated as qualified subchapter S subsidiaries for federal income tax purposes. As a result, our profits and losses are taxed directly to our stockholders. After this offering, Liberman Broadcasting will not qualify as an S corporation, and none of our subsidiaries will qualify as subchapter S subsidiaries for federal income tax purposes. Thus, our taxable income will be subject to tax at regular corporate rates and will not flow through to our stockholders for reporting on their own tax returns, and certain of our deductions may no longer be available. We will likely have less cash available to us as a result of losing our S corporation status. In addition, the loss of our S corporation status could be applied retroactively, resulting in us and our subsidiaries owing taxes for past periods.

If we are unable to maintain our FCC license for any station, we would have to cease operations at that station.

The success of our television and radio operations depends on acquiring and maintaining broadcast licenses issued by the FCC, which are typically issued for a maximum term of eight years and are subject to renewal. Our FCC licenses are next subject to renewal at various times in 2005 and 2006. Any renewal applications submitted by us may not be approved, and the FCC may impose conditions or qualifications that could restrict our television and radio operations. In addition, third parties may challenge our renewal applications.

If we violate the Communications Act of 1934, as amended, or the rules and regulations of the FCC, the FCC may issue cease-and-desist orders or admonishments, impose fines, renew a license for less than eight years or revoke our licenses. The FCC has the right to revoke a license before the end of its term for acts committed by the licensee or its officers, directors or stockholders. If the FCC were to issue an order denying a license renewal application or revoking a license, we would be required to cease operating the radio or television station covered by the license, which could have a material adverse effect on our operations. In addition, our San Diego television station is a low power television station, and its operations may suffer adverse effects, or be forced to cease, as a result of interference issues involving full power television stations operating in its geographic area or on the same or proximate channels.

Our failure to maintain our FCC broadcast licenses could cause a default under LBI Media’s senior credit facility and cause an acceleration of our indebtedness.

LBI Media’s senior credit facility requires us to maintain all of our material FCC licenses. If the FCC were to revoke any of our material licenses, our lenders could declare all amounts outstanding under the senior credit facility to be immediately due and payable, which would cause a cross-default under the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes. If our indebtedness is accelerated, we may not have sufficient funds to pay the amounts owed.

Risks Related to Our Class A Common Stock and This Offering

Our two principal stockholders can control the outcome of all matters voted upon by our stockholders and can prevent actions that a stockholder may otherwise view favorably.

Before this offering, Jose and Lenard Liberman, our President and Executive Vice President, controlled 100% of the outstanding shares of our common stock. After this offering, Jose and Lenard Liberman will control 100% of the outstanding shares of our Class B common stock. The Class B common stock gives the holder ten votes per share compared to the one vote per share of the Class A common stock offered hereby. As a result, the Libermans will have % of the total voting power of all common stockholders. Thus, the Libermans will be able to elect all the members of our board of directors, approve significant corporate transactions, such as acquisitions and block unsolicited tender offers, without the approval of our public stockholders. This concentration of ownership could delay, defer or prevent a change in control of our company or impede a merger, consolidation, takeover or other business combination that you, as a stockholder, may otherwise view favorably.

In addition, our board of directors has determined that we are a “controlled company” under the Nasdaq rules, because Jose and Lenard Liberman control more than 90% of our voting power. Therefore, we are exempt from some of the corporate governance rules of Nasdaq, including the requirement to have a majority of independent directors.

Our charter documents and Delaware law contain provisions that may delay, defer or discourage a change of control.

Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us, even if the change in control would be beneficial to stockholders. These provisions include the following:

•

prohibition of cumulative voting in the election of directors;

•

ability of the board of directors to authorize the issuance of preferred stock in series without stockholder approval; and

•

advance notice requirements for stockholder proposals and nominations for election to the board of directors.

We are also governed by the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales or other transactions resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 15.0% or more of the corporation’s outstanding voting stock. The statute could delay, defer or prevent a change of control of our company.

In addition, a change in control would be an event of default under our senior credit facility and trigger the rights of holders of our subsidiaries’ notes to cause our subsidiaries to repurchase such notes. These events would add to the cost of an acquisition, which could deter a third party from acquiring us. The completion of this offering will not constitute a change of control for purposes of LBI Media’s senior credit facility or under our subsidiaries’ notes.

The price of our Class A common stock may be volatile, which could cause investors to incur trading losses and lose all or a portion of their investments.

Prior to this offering, there has been no public market for our Class A common stock. We cannot predict the extent to which investor interest will lead to the development of an active and liquid trading market in our Class A common stock. The initial public offering price for the shares of our Class A common stock will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of the market price of the Class A common stock that will prevail in the trading market. The market price of the Class A common stock may decline below the initial public offering price. Some companies that have had volatile market prices for their securities have been subject to securities class action suits filed against them. If a suit were to be filed against us, regardless of the outcome, it could result in substantial costs and a diversion of our management’s attention and resources. This could have a material adverse effect on our business, results of operations and financial condition.

Future sales of our Class A common stock in the public market may depress our stock price.

The market price of our Class A common stock could decline as a result of sales by our stockholders of a large number of shares of our Class A common stock in the market after this offering or the perception that such sales may occur. These sales might also make it more difficult for us to sell additional equity securities at a time and price that we deem appropriate. There will be approximately shares of Class A common stock outstanding after this offering, including the shares offered hereby and assuming the exercise of warrants for shares of Class A common stock. Of these shares, shares of Class A common stock, including the shares offered hereby, will be freely tradable immediately upon completion of this offering without restriction or further registration under the Securities Act of 1933, except for shares purchased by our “affiliates” as defined in Rule 144 under the Securities Act. In addition, the shares of Class A common stock that will be issued upon the exercise of warrants at closing will be subject to the 180-day lock-up agreement between the underwriters and such stockholders.

We will also have outstanding shares of Class B common stock immediately after this offering that may be converted into an equivalent number of shares of Class A common stock at any time at the option of the holders. All of the shares of Class A common stock that can be issued upon conversion of Class B common stock will be affiliate securities immediately after this offering as defined in Rule 144 under the Securities Act. Subject to the 180-day lock-up agreement between the underwriters and each holder of Class B common stock, all of these affiliate securities may be sold in the future without registration under the Securities Act to the extent permitted under Rule 144 under the Securities Act. All of these affiliate securities will be eligible for sale under Rule 144 subject to the applicable holding period, volume limitations, manner of sale and notice requirements set forth in the applicable SEC rules. So long as the holders are considered affiliates of us, none of these affiliate securities will be eligible for sale without regard to these restrictions under Rule 144(k). Credit Suisse First Boston LLC may, in its sole discretion and at any time without notice, release these stockholders from the 180-day lock-up restriction on the sale of their shares.

We currently do not intend to pay dividends on our common stock.

We do not expect to pay dividends on our common stock in the foreseeable future. In addition, the agreements governing our indebtedness, including LBI Media’s senior credit facility and the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes, restrict our ability to pay dividends. Accordingly, if you purchase shares in this offering, the price of our Class A common stock may be required to appreciate in order to realize a gain on your investment.

You will suffer an immediate and substantial dilution in the net tangible book value of the Class A common stock you purchase.

The initial offering price is expected to be substantially higher than the net tangible book value per share of our outstanding Class A common stock immediately after this offering. Accordingly, based on an assumed initial public offering price of $ per share, purchasers of our Class A common stock in this offering will experience immediate and substantial dilution of approximately $ per share in net tangible book value of the Class A common stock. In addition, as of September 30, 2003, there were warrants outstanding to purchase shares of Class A common stock at an exercise price of $0.01 per share. If all of these warrants are exercised on the date of the closing of this offering, as expected, investors purchasing shares in this offering would suffer total dilution of $ per share.

Risks Related to the Television and Radio Industries

Our television and radio stations could be adversely affected by changes in the advertising market or a recession in the U.S. economy or in the economies of the regions in which we operate.

Revenue generated by our television and radio stations depends primarily upon the sale of advertising and is, therefore, subject to various factors that influence the advertising market for the broadcasting industry as a whole, including:

•

changes in the financial condition of advertisers, which may reduce their advertising budgets; and

•

changes in the tax laws applicable to advertisers.

We also believe that advertising is largely a discretionary business expense. Advertising expenditures generally tend to decline during an economic recession or downturn. In addition, shifts in populations and demographics could adversely affect advertising expenditures. Consequently, our television and radio station revenues are likely to be adversely affected by shifts in Hispanic populations and demographics, a recession or downturn in the economies of Southern California, Houston or Dallas or other events or circumstances that adversely affect advertising activity. In general, our national advertising revenue declined in 2001 due in large part to the economic recession and the terrorist attack on September 11, 2001. Foreign hostilities and further terrorist attacks may affect our revenues and results of operations in the future.

Changes in the rules and regulations of the FCC could result in increased competition for our broadcast stations that could lead to increased competition in our markets.

Recent and prospective actions by the FCC could cause us to face increased competition in the future. The recent or prospective changes include:

•

relaxation of restrictions on the participation by regional telephone operating companies in cable television and other direct-to-home audio and video technologies;

•

establishment of a Class A television service for low-power stations that makes those stations primary stations and gives them protection against full-service stations;

•

licensing of low-power FM radio stations designed to serve small localized areas and niche audiences;

•

competition from direct broadcast satellite television providing the programming of traditional over-the-air stations, including local and out-of-market network stations;

•

competition from satellite radio companies providing continuous, nationwide digital radio services; and

•

revision of restrictions on cross-ownership (i.e., ownership of both television and radio stations in combination with newspapers and/or cable television systems in the same market) and caps on the number of stations or market share that a particular company may own or control, locally or nationally.

The required conversion to digital television may impose significant costs that might not be balanced by consumer demand, and we may have difficulty meeting certain FCC deadlines.

The FCC has allocated an additional television channel to most television station owners so that each full-service television station can broadcast a digital television signal on the additional channel while continuing to broadcast an analog signal on the station’s original channel. 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 the end of 2006 if the market penetration of digital television receivers reaches certain levels by that time.

The FCC adopted rules that allow television broadcasters to initially satisfy the obligation to begin broadcasting a digital television signal by broadcasting a signal that serves, at least, each full-service television station’s applicable community of license, rather than to broadcast at full authorized power. These rules have permitted us to operate our digital television facilities in Los Angeles, Houston and Dallas at lower power pursuant to special temporary authority from the FCC. We began broadcasting with a digital signal on KRCA-TV and KZJL-TV in November 2002 and August 2003, respectively, and KMPX-TV, which we acquired in January 2004, has been broadcasting with a digital signal since July 2003.

We intend to explore the most effective use of digital broadcast technology for each of our stations. We may not, however, derive commercial benefits from the development of our digital broadcasting capacity. Although we believe that proposed alternative and supplemental uses of our analog and digital spectrum will continue to grow in number, the viability and success of each proposed alternative or supplemental use of spectrum involves a number of contingencies and uncertainties. The FCC or Congress may take future actions with respect to regulatory control of these activities, and these actions may have a material adverse effect on us. Also, our final costs to convert our television stations to full-service digital television could be significant, and there may not be sufficient consumer demand for digital television services to recover our investment in digital television facilities.

Because our full-service television stations rely on “must carry” rights to obtain cable carriage, new laws or regulations that eliminate or limit the scope of our cable carriage rights could have a material adverse impact on our television operations.

Pursuant to the “must carry” provisions of the Cable Television Consumer Protection and Competition Act of 1992, a broadcaster may demand carriage on a specific channel on cable systems within its market. However, the future of those “must carry” rights is uncertain as they relate to the extent of carriage of digital television stations. The current FCC rules only require carriage of a single digital signal and only after a station has ceased to broadcast its analog television signals. It is not certain what, if any, “must carry” rights television stations will have with respect to simultaneous carriage of analog and digital signals during the transition from analog to digital broadcasting or to carriage of multiple digital signals. New laws or regulations that eliminate or limit the scope of our cable carriage rights could have a material adverse impact on our television operations.

Under the 1992 Cable Act, each broadcast station is required to elect, every three years, whether to exercise their “must carry” rights. Each of our full-power television stations elected “must carry” on local cable systems for the three year election period which commenced January 1, 2003. The required election date for the next three year election period commencing January 1, 2006 will be October 1, 2005. If the law were changed to eliminate or materially alter “must carry” rights, our business could be adversely affected.

Direct broadcast satellite companies may not continue to carry our local broadcast station signals.

The Satellite Home Viewer Improvement Act of 1999 allows, but does not require, direct broadcast satellite television companies (such as DirecTV and EchoStar/Dish Network) to transmit local broadcast television station signals back to their subscribers in local markets. In exchange for this privilege, however, the 1999 Satellite Act

requires that in television markets in which a direct broadcast satellite company elects to pick-up and retransmit any local broadcast station signals, the direct broadcast satellite provider must also offer to its subscribers signals from all other qualified local broadcast television stations in that market. This is known as the “carry one/carry all” rule. Our full-power broadcast television stations in Los Angeles and Houston have qualified for carriage under this rule, and are currently being carried on both satellite systems. We expect that our full-power broadcast television station in Dallas will be carried on both satellite systems by the end of February 2004. However, there can be no assurance that direct broadcast satellite operators will continue to carry local stations in our markets. The 1999 Satellite Act is scheduled to expire in November 2004. A bill has been introduced in Congress to extend the 1999 Satellite Act for an additional five years, but there can be no assurance as to what, if any, action will be taken regarding an extension.

We may have difficulty obtaining regulatory approval for acquisitions in our existing markets and, potentially, new markets.

We have acquired in the past, and may continue to acquire in the future, additional television and radio stations. The agencies responsible for enforcing the federal antitrust laws, the Federal Trade Commission, or FTC, and the Department of Justice, may investigate certain acquisitions. The Department of Justice has, on several occasions, negotiated settlements, without initiating litigation, with broadcasters seeking to increase their ownership of television and radio stations in specific markets, in which the broadcasters have been required to divest one or more stations in order to complete a transaction. The Department of Justice has, in certain cases, examined television and radio ownership concentrations where a transaction would result in a single entity controlling more than 40% of the advertising revenue in a particular market or where, after the transaction, two companies would control more than 70% of the advertising revenue in a particular market. The Department of Justice has also in certain cases examined whether a combination would result in undue concentration in a particular format or in formats appealing to particular audience demographics.

Any decision by the Department of Justice or FTC to challenge a proposed acquisition could affect our ability to consummate an acquisition or to consummate it on the proposed terms. The FTC or Department of Justice could seek to bar us from acquiring additional television or radio stations in any market where our existing stations already have a significant market share.

We must respond to the rapid changes in technology, services and standards which characterize our industry in order to remain competitive.

The television and radio broadcasting industry is subject to technological change, evolving industry standards and the emergence of new media technologies. Several new media technologies are being employed or developed, including the following:

•

audio programming by cable television systems, direct broadcast satellite systems, Internet content providers and Internet-based audio radio services;

•

satellite digital audio radio service with numerous channels and sound quality equivalent to that of compact discs;

•

In-Band On-Channel^™ digital radio, which could provide multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services;

•

low-power FM radio, with additional FM radio broadcast outlets that are designed to serve local interests;

•

streaming video programming delivered via the Internet;

•

video-on-demand programming offered by cable television companies; and

•

digital video recorders with hard-drive storage capacity that offer time-shifting of programming and the capability of deleting advertisements when playing back the recorded programs.

We may not have the resources to acquire new technologies or to introduce new services that could compete with other new technologies. We may encounter increased competition arising from new technologies. If we are unable to keep pace with and adapt our television and radio stations to these developments, it could harm our competitive position, financial condition and results of operations.

FORWARD-LOOKING STATEMENTS

This prospectus includes both historical and “forward-looking statements” as that term is defined by the federal securities laws. We have based these forward-looking statements on our current expectations and projections about future results. When we use words in this document such as “anticipates,” “intends,” “plans,” “believes,” “estimates,” “expects,” “may,” “will” and similar expressions, we do so to identify forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements. These forward-looking statements are affected by risks, uncertainties and assumptions that we make, including, among other things, the factors that are described in “Risk Factors.”

You should be aware that any forward-looking statement made by us in this prospectus, or elsewhere, speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this prospectus after the date of this prospectus. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this prospectus or elsewhere might not occur.

USE OF PROCEEDS

We estimate that the net proceeds to us from the sale by us of shares of our Class A common stock, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, will be $ million ($ million if the underwriters exercise their option to acquire additional shares from us in full), based upon an assumed initial public offering price of $ per share. We will not receive any proceeds from the sale of shares by the selling stockholder.

We expect to use the net proceeds to repay:

•

a portion of LBI Media’s senior credit facility, which matures in 2009 and, as of December 31, 2003, bore interest at rates between 3.69% and 3.70% per annum;

•

a portion of LBI Media’s 10¹/8% senior subordinated notes due 2012 at a redemption price of 110.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date;

•

a portion of LBI Media Holdings’ 11% senior discount notes due 2013 at a redemption price of 111.0% of the accreted value thereof to the redemption date;

•

all of Liberman Broadcasting’s 9% subordinated notes due 2014 outstanding at a redemption price of 100.0% of the principal amount thereof, plus accrued and unpaid interest to the redemption date; and

•

to use the remaining net proceeds for general corporate purposes.

Pending these uses, we intend to invest the net proceeds in short-term, interest-bearing, investment grade securities.

DIVIDEND POLICY

We currently intend to retain our future earnings, if any, to repay debt or to finance the further expansion and continued growth of our business. In addition, our ability to pay cash dividends is restricted under the terms of LBI Media’s senior credit facility and the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes. Future dividends, if any, will be determined by our board of directors.

DILUTION

Our net tangible book value as of September 30, 2003 was $(277.2) million. On September 30, 2003, on a pro forma basis, after giving effect to the issuance of approximately $68.4 million of LBI Media Holdings’ 11% Senior Discount Notes due 2013 in October 2003 and the use of the net proceeds thereof and our acquisition of selected assets of KMPX-TV in January 2004, our net tangible book value was $(271.6) million, or $ per share of common stock. We have calculated this amount by:

•

subtracting our total liabilities from our total tangible assets; and

•

then dividing the difference by the number of shares of common stock outstanding.

If we give effect to our sale of shares of Class A common stock in this offering at an assumed initial public offering price of $ per share, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us, our adjusted pro forma net tangible book value as of September 30, 2003 would have been $ million, or $ per share. This amount represents an immediate dilution of $ per share to new investors. The following table illustrates this per share dilution:


Assumed initial public offering price per share		$
Pro forma net tangible book value per share as of September 30, 2003	$
Increase in net tangible book value per share attributable to new investors

Pro forma net tangible book value per share after this offering

Dilution per share to new investors		$

The following table summarizes on the basis described above, as of September 30, 2003, the difference between the number of shares of Class A common stock (and Class B common stock convertible into Class A common stock) purchased from us, the total consideration paid for the Class A common stock (and Class B common stock convertible into Class A common stock), and the average price per share paid by existing stockholders and by new investors, at an assumed initial public offering price of $ per share before deducting underwriting discounts and commissions and estimated offering expenses payable by us (and assuming that the underwriters do not exercise the over-allotment option):


	Shares Purchased			Total Consideration			Average Price Per Share
	Number	Percent		Amount	Percent		Average Price Per Share
Existing stockholders			%	$		%	$
New investors

Total		100.0	%	$	100.0	%

The tables above assume the issuance of shares of Class A common stock upon the exercise of warrants at the closing of this offering.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2003 on:

•

an actual basis;

•

an as adjusted basis to give effect to (a) the issuance of approximately $68.4 million of LBI Media Holdings’ 11% Senior Discount Notes due 2013 in October 2003 and the use of the net proceeds thereof to repay $38.6 million of indebtedness outstanding under LBI Media’s senior credit facility and (b) the acquisition of selected assets of KMPX-TV in January 2004; and

•

an as adjusted basis to further reflect (a) the sale of shares of our Class A common stock by us in this offering at an assumed initial offering price of $ per share and the use of the net proceeds payable to us as set forth under “Use of Proceeds” and (b) the issuance of shares of Class A common stock upon the exercise of warrants.

The information in this table should be read in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Historical Consolidated Financial and Other Data” and our consolidated financial statements and related notes included elsewhere in this prospectus.


	As of September 30, 2003
	Actual			As Adjusted			As Adjusted for the Offering
	(in thousands)
Cash and cash equivalents	$	269		$	269		$

Long-term debt (including current portion):
Senior credit facility	$	126,950		$	123,850		$
Senior subordinated notes due 2012		150,000			150,000
Senior discount notes due 2013		—			40,000
Subordinated notes due 2014		23,436			23,436
Empire Burbank loan		2,718			2,718

Total long-term debt	$	303,104		$	340,004		$

Stockholders’ deficiency:
Common stock, $0.01 par value:
Common stock; 1,000 shares authorized, actual and as adjusted; 200 shares issued and outstanding, actual and as adjusted; no shares authorized, issued and outstanding, as adjusted for the offering		1			1
Class A common stock; no shares authorized, issued and outstanding, actual and as adjusted; shares authorized and shares issued and outstanding, as adjusted for the offering		—			—
Class B common stock; no shares, authorized, issued and outstanding, actual and as adjusted; shares authorized and shares issued and outstanding, as adjusted for the offering		—			—
Additional paid-in capital		50			50
Retained deficit		(22,155	)		(22,155	)
Accumulated other comprehensive income		14			14

Total stockholders’ deficiency		(22,090	)		(22,090	)

Total capitalization	$	281,012		$	317,912		$

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

The following selected financial data as of and for the years ended December 31, 1998, 1999, 2000, 2001 and 2002 is derived from our audited consolidated financial statements. The selected historical consolidated financial data as of December 31, 2001 and 2002 and for the fiscal years ended December 31, 2000, 2001 and 2002 were derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected historical consolidated financial data as of December 31, 2000 was derived from our audited consolidated financial statements not included in this prospectus. The selected historical consolidated financial data as of and for the fiscal years ended December 31, 1998 and 1999 were derived from our audited consolidated financial statements not included in this prospectus. The financial data for the nine months ended September 30, 2002 and 2003 and as of September 30, 2003 have been derived from our unaudited consolidated financial statements. The unaudited consolidated financial statements reflect, in the opinion of management, all adjustments necessary for the fair presentation of the financial condition and the results of operations for such periods. Operating results for the nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the entire year ended December 31, 2003.

The financial data set forth below should be read in conjunction with, and are qualified in their entirety by, reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included elsewhere in this prospectus.


	Year Ended December 31,															Nine Months Ended September 30,
	1998			1999			2000			2001			2002			2002			2003
	(dollars in thousands, except per share amounts)
Consolidated Statement of Operations Data:
Net revenues:
Radio	$	16,538		$	19,420		$	28,709		$	31,585		$	39,311		$	29,000		$	34,136
Television		10,603			16,997			21,843			28,072			31,685			22,941			27,766

Total net revenues		27,141			36,417			50,552			59,657			70,996			51,941			61,902
Operating expenses (exclusive of noncash employee compensation, depreciation and amortization and impairment of broadcast license shown below)		11,182			17,739			22,550			26,744			33,782			23,696			29,317
Noncash employee compensation		—			—			1,240			1,398			3,642			2,926			1,457
Depreciation and amortization		3,980			4,435			4,637			8,673			3,131			2,339			2,565
Impairment of broadcast license		—			—			—			—			1,750			1,750			—

Total operating expenses		15,162			22,174			28,427			36,815			42,305			30,711			33,339

Operating income		11,979			14,243			22,125			22,842			28,691			21,230			28,563
Interest expense, net		16,589			17,037			17,893			29,537			38,074			28,339			21,282
Loss on sale of property and equipment		—			6			—			—			388			388			4

(Loss) income before income taxes and cumulative effect of accounting change		(4,610	)		(2,800	)		4,232			(6,695	)		(9,771	)		(7,497	)		7,277
Income tax expense		3			6			74			81			42			31			60

(Loss) income before cumulative effect of accounting change		(4,613	)		(2,806	)		4,158			(6,776	)		(9,813	)		(7,528	)		7,217
Cumulative effect of accounting change		—			—			—			—			(8,106	)		(8,106	)		—

Net (loss) income	$	(4,613	)	$	(2,806	)	$	4,158		$	(6,776	)	$	(17,919	)	$	(15,634	)	$	7,217

Net (loss) income per share:
Basic	$	(23,064	)	$	(14,029	)	$	20,790		$	(33,877	)	$	(89,594	)	$	(78,173	)	$	36,086
Diluted		(23,064	)		(14,029	)		20,790			(33,877	)		(89,594	)		(78,173	)		33,725
Weighted average shares outstanding used to compute net (loss) income per share:
Basic		200			200			200			200			200			200			200
Diluted		200			200			200			200			200			200			214
Unaudited Pro Forma Income Statement Data:
Income before taxes and cumulative effect of accounting change	$	(4,610	)	$	(2,800	)	$	4,232		$	(6,695	)	$	(9,771	)	$	(7,497	)	$	7,277
Pro forma provision for (benefit from) income taxes (see Note 16)		(99	)		204			705			727			(82	)		(63	)		2,882

Income (loss) before cumulative effect of accounting change		(4,511	)		(3,004	)		3,527			(7,422	)		(9,689	)		(7,434	)		4,395
Cumulative effect of accounting change, net of tax		—			—			—			—			(5,350	)		(5,350	)		—

Pro forma net income (loss)	$	(4,511	)	$	(3,004	)	$	3,527		$	(7,422	)	$	(15,039	)	$	(12,784	)	$	4,395

Pro forma net income (loss) per share—basic	$	(22,556	)	$	(15,020	)	$	17,637		$	(37,108	)	$	(75,194	)	$	(63,921	)	$	21,974
Pro forma net income (loss) per share—diluted		(22,556	)		(15,020	)		17,637			(37,108	)		(75,194	)		(63,921	)		20,536

Other Data:
Adjusted EBITDA(1)	$	15,959		$	18,678		$	28,002		$	32,913		$	37,214		$	28,245		$	32,585
Adjusted EBITDA margin(2)		58.8	%		51.3	%		55.4	%		55.2	%		52.4	%		54.4	%		52.6	%
Cash flows (used in) provided by operating activities		(10,492	)		1,609			9,591			6,631			15,405			7,739			7,698
Cash flows used in investing activities		(60,647	)		(9,693	)		(13,507	)		(108,677	)		(37,419	)		(6,614	)		(47,888	)
Cash flows provided by (used in) financing activities		70,706			11,475			(215	)		102,692			22,279			2,599			39,063


	As of December 31,															As of Sept. 30, 2003
	1998			1999			2000			2001			2002			As of Sept. 30, 2003
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	1,226		$	4,617		$	486		$	1,131		$	1,397		$	269
Working capital (deficit)		3,978			4,545			(7,069	)		(4,902	)		4,355			9,712
Broadcast licenses, net		95,587			92,990			89,797			181,294			198,323			239,394
Total assets		126,027			135,547			141,234			252,393			284,673			333,042
Total long-term debt (4)		126,769			138,284			133,840			233,057			262,663			303,104
Total stockholders’ deficiency		(5,889	)		(8,668	)		(4,700	)		(11,363	)		(29,316	)		(22,091	)

(1)


	Year Ended December 31,															Nine Months Ended Sept. 30,
	1998			1999			2000			2001			2002			2002			2003
	(in thousands)
Net cash (used in) provided by operating activities	$	(10,492	)	$	1,609		$	9,591		$	6,631		$	15,405		$	7,739		$	7,698
Add:
Gain on sale of investments		152			—			—			—			53			53			—
Income tax expense		3			6			74			81			42			31			60
Interest expense, net		16,589			17,037			17,893			29,537			38,074			28,339			21,282
Less:
Amortization of deferred financing costs		(1,223	)		(502	)		(502	)		(3,825	)		(8,192	)		(7,811	)		(1,217	)
Accretion on subordinated notes		—			—			—			(2,556	)		(940	)		(1,912	)		(697	)
Provision for doubtful accounts		(83	)		(179	)		(96	)		(170	)		(862	)		(230	)		(900	)
Changes in operating assets and liabilities:
Accounts receivable		291			366			2,142			1,901			3,701			2,186			4,340
Program rights		1,998			769			102			(314	)		317			919			18
Amounts due from related parties		192			704			(487	)		456			(88	)		320			(8	)
Prepaid expenses and other current assets		(343	)		(289	)		(71	)		656			101			(322	)		(476	)
Employee advances		39			(59	)		11			124			511			97			100
Accounts payable and accrued expenses		640			(642	)		(446	)		133			5			428			(757	)
Accrued interest		8,590			(243	)		(357	)		321			(10,733	)		(1,467	)		2,693
Program rights payable		(382	)		117			209			56			(58	)		—			16
Amounts due to related parties		(7	)		(16	)		(61	)		15			(34	)		(53	)		(73	)
Deferred state income tax payable		(5	)		—			—			(133	)		(31	)		(21	)		(50	)
Other assets and liabilities		—			—			—			—			(57	)		(51	)		556

Adjusted EBITDA	$	15,959		$	18,678		$	28,002		$	32,913		$	37,214		$	28,245		$	32,585

(2)	Adjusted EBITDA margin means Adjusted EBITDA divided by net revenues.

(3)	Represents cash paid for interest. Does not include accrued but unpaid interest expense.

(4)	In October 2003, LBI Media Holdings issued approximately $68.4 million aggregate principal amount at maturity of 11% Senior Discount Notes due 2013 and used approximately $38.6 million of the net proceeds to repay outstanding amounts under LBI Media’s senior credit facility.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Historical Consolidated Financial and Other Data” and our consolidated financial statements and related notes included elsewhere in this prospectus. The following discussion and analysis discusses the financial condition and results of our operations on a consolidated basis, unless otherwise indicated.

Overview

We own and operate radio and television stations in Los Angeles, California and Houston, Texas and television stations in Dallas, Texas and San Diego, California. Our radio stations consist of four FM and two AM stations serving Los Angeles, California and its surrounding area and five FM and four AM stations serving Houston, Texas and its surrounding area. Our four television stations consist of three full-power stations serving Los Angeles, California, Houston, Texas and Dallas, Texas and a low-power station serving San Diego, California. In addition, we operate a television production facility, Empire Burbank Studios, in Burbank, California that we primarily use to produce our core programming for all of our television stations, and we have television production facilities in Houston and Dallas that will allow us to produce local programming for those markets.

We operate in two reportable segments, radio and television. We generate revenue from sales of local, regional and national advertising time on our radio and television stations, the sale of time on a contractual basis to brokered or infomercial customers on our radio and television stations, and, to a lesser extent, the leasing of our production facilities to outside entertainment companies. Advertising rates are, in large part, based on each station’s ability to attract audiences in demographic groups targeted by advertisers. We recognize revenues when the commercials are broadcast or the brokered time is made available to the customer. We incur commissions from agencies on local, regional and national advertising, and our net revenue reflects deductions from gross revenue for commissions to these agencies.

Our primary expenses are employee compensation, including commissions paid to our sales staff and our national representative firm, marketing, promotion and selling, technical, programming, engineering and general and administrative. Our programming expenses for television consist of costs related to the production of original programming content, production of local newscasts and the acquisition of programming content from other sources.

On March 20, 2001, we completed our acquisition of selected assets of our radio stations KTJM-FM, KJOJ-FM, KQUE-AM, KJOJ-AM and KSEV-AM for an aggregate purchase price of $46.2 million (including acquisition costs). These stations are located in the Houston, Texas market. As a result of these acquisitions, we began broadcasting outside of Southern California for the first time. We began airing Spanish-language programming on three of these stations in July 2001.

On March 20, 2001, we completed our acquisition of selected assets of KZJL-TV, licensed to Houston, Texas, for an aggregate purchase price of $57.8 million (including acquisition costs). The acquisition marked our first television station in the Houston, Texas market.

On October 11, 2002, we completed our acquisition of selected assets of KQQK-FM, licensed to Houston, Texas, for an aggregate purchase price of $25.6 million (including acquisition costs). The purchase was pursuant to an asset purchase agreement, dated as of April 5, 2002, with El Dorado, as amended on October 8, 2002. On April 22, 2003, we also acquired selected assets of radio station KEYH-AM, licensed in the Houston, Texas market, from El Dorado. We purchased KEYH-AM for an aggregate purchase price of approximately $6.5 million (including acquisition costs). We began operating both KQQK-FM and KEYH-AM on May 20, 2002 under two time brokerage agreements and have significantly changed the format, customer base, revenue stream and employee base of these stations.

On October 11, 2002, we also completed our acquisition of selected assets of KIOX-FM and KXGJ-FM, licensed to El Campo and Bay City, Texas, respectively, for an aggregate purchase price of approximately $3.5 million (including acquisition costs) and have significantly changed the format, customer base, revenue stream and employee base of this station.

On May 15, 2003, we completed our acquisition of selected assets of KMXN-FM, licensed to Garden Grove, California, for an aggregate purchase price of $35.6 million (including acquisition costs) and subsequently changed the station’s call letters to KEBN-FM. We began operating the station in January 2003 under a time brokerage agreement and have significantly changed the format, customer base, revenue stream and employee base of this station.

On January 12, 2004, we completed our acquisition of selected assets of KMPX-TV serving the Dallas-Fort Worth, Texas market for an aggregate purchase price of $37.0 million and have significantly changed the format, customer base, revenue stream and employee base of this station.

We generally experience lower operating margins several months following the acquisition of selected assets of radio and television stations. This is primarily due to the time it takes to fully implement our formatting changes, build our advertiser base and gain viewer or listener support.

From time to time, we engage in discussions with third parties concerning our possible acquisition of additional radio or television stations or related assets. Any such discussions may or may not lead to our acquisition of additional broadcasting assets.

Non-GAAP Financial Measure

We use the term “Adjusted EBITDA” throughout this prospectus. Adjusted EBITDA consists of net (loss) income plus cumulative effect of accounting change, income tax expense, loss on sale of property and equipment, net interest expense, impairment of broadcast license, depreciation and amortization and noncash employee compensation.

This term, as we define it, may not be comparable to a similarly titled measure employed by other companies and is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States, or GAAP.

Management considers this measure an important indicator of our liquidity relating to our operations, as it eliminates the effects of noncash items. This measure 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 GAAP, such as cash flows from operating activities, operating income and net income.

We believe Adjusted EBITDA is useful to an investor in evaluating our liquidity and cash flow because:

•

it is widely used in the broadcasting industry to measure a company’s liquidity and cash flow without regard to items such as depreciation and amortization and impairment of broadcast licenses. We believe that by eliminating such effects, Adjusted EBITDA provides a meaningful measure of liquidity; and

•

it gives investors another measure to evaluate and compare the results of our operations from period to period by removing the impact of noncash expense items, such as noncash employee compensation, cumulative effects of accounting change and impairment of broadcast licenses.

Our management uses Adjusted EBITDA:

•

as a measurement of liquidity and cash flows because it assists in comparing our liquidity on a consistent basis as it removes the impact of noncash items from our operating results;

•

in presentations to our board of directors to enable them to have the same consistent measurement basis of liquidity and cash flow used by management;

•

as a measure for determining our operating budget; and

•

as a measure for planning and forecasting capital expenditures.

The SEC recently adopted rules regulating the use of non-GAAP financial measures, such as Adjusted EBITDA, in filings with the SEC and in disclosures and press releases. These rules require non-GAAP financial measures to be presented with and reconciled to the most nearly comparable financial measure calculated and presented in accordance with GAAP. We have included a presentation of net cash (used in) provided by operating activities and a reconciliation to Adjusted EBITDA on a consolidated basis under “Summary Consolidated Financial and Other Data” and “Selected Historical Consolidated Financial and Other Data.”

Results of Operations

Separate financial data for each of our operating segments is provided below. We evaluate the performance of our operating segments based on the following:


	Year Ended December 31,						Nine Months Ended September 30,
	2000		2001		2002		2002		2003
							(unaudited)
	(in thousands)
Net revenues:
Radio	$	28,709	$	31,585	$	39,311	$	29,000	$	34,136
Television		21,843		28,072		31,685		22,941		27,766

Total	$	50,552	$	59,657	$	70,996	$	51,941	$	61,902

Total operating expenses before noncash employee compensation, depreciation and amortization and impairment of broadcast license:
Radio	$	13,185	$	14,455	$	18,624	$	12,774	$	15,649
Television		9,365		12,289		15,158		10,922		13,667

Total	$	22,550	$	26,744	$	33,782	$	23,696	$	29,316

Noncash employee compensation:
Radio	$	1,240	$	1,398	$	3,642	$	2,926	$	1,457

Total	$	1,240	$	1,398	$	3,642	$	2,926	$	1,457

Depreciation and amortization:
Radio	$	1,964	$	3,678	$	1,421	$	1,113	$	1,029
Television		2,673		4,995		1,710		1,226		1,536

Total	$	4,637	$	8,673	$	3,131	$	2,339	$	2,565

Impairment of broadcast license:
Television	$	—	$	—	$	1,750	$	1,750	$	—

Total	$	—	$	—	$	1,750	$	1,750	$	—

Operating income:
Radio	$	12,320	$	12,054	$	15,624	$	12,187	$	16,000
Television		9,805		10,788		13,067		9,043		12,563

Total	$	22,125	$	22,842	$	28,691	$	21,230	$	28,563

Adjusted EBITDA(1):
Radio	$	15,524	$	17,130	$	20,687	$	16,226	$	18,487
Television		12,478		15,783		16,527		12,019		14,098

Total	$	28,002	$	32,913	$	37,214	$	28,245	$	32,585

Total assets:
Radio	$	66,692	$	113,329	$	139,159	$	107,234	$	177,032
Television		70,108		125,529		125,100		124,047		128,800
Corporate		4,434		13,535		20,414		26,282		27,210

Total	$	141,234	$	252,393	$	284,673	$	257,563	$	333,042

(1)

Nine Months Ended September 30, 2003 Compared to the Nine Months Ended September 30, 2002

Net Revenues. Net revenues increased by $10.0 million, or 19.2%, to $61.9 million for the nine months ended September 30, 2003, from $51.9 million for the same period in 2002. This change was primarily attributable to revenue growth from both our radio and television segments in the Los Angeles, San Diego and Houston markets, resulting from (i) our successful programming, (ii) our customer retention and expanding new advertiser base, and (iii) a favorable Spanish-language advertising environment.

Net revenues for our radio segment increased by $5.1 million, or 17.7%, to $34.1 million for the nine months ended September 30, 2003, from $29.0 million for the same period in 2002. This increase was primarily attributable to (i) a full nine months of operations for four of our radio stations in Houston, two of which we began operating in May 2002 and two of which we began operating in October 2002 and (ii) revenue growth from our other radio properties operating in the Los Angeles and Houston markets, primarily reflecting the factors noted above.

Net revenues for our television segment increased by $4.8 million, or 21.0%, to $27.8 million for the nine months ended September 30, 2003, from $22.9 million for the same period in 2002. This increase was largely attributable to (i) revenue growth in our Los Angeles and Houston markets, as we continue to benefit from the success of our popular programming and greater market presence, and (ii) additional broadcasting revenues in our San Diego market, as we began programming our station KSDX-LP with Spanish-language programming in February 2003. These increases were offset by a modest decline in revenues from the leasing of our television production facility.

Total operating expenses. Total operating expenses increased by $2.6 million, or 8.6%, to $33.3 million for the nine months ended September 30, 2003 from $30.7 million for the same period in 2002. This increase was primarily the result of a $5.6 million increase in program and technical and selling, general and administrative expenses due to:

(i)

a $2.0 million increase in program and technical expenses related to (a) additional production of in-house television program, (b) incremental expenses related to a full nine months of operations for four of our radio stations in Houston, two of which we began operating in May 2002 and two of which we began operating in October 2002, and (c) overall company growth, and

(ii)

a $3.6 million increase in selling, general and administrative expenses related to (a) an increase in local marketing agreement costs relating to asset acquisitions completed in 2002 and during the second quarter of 2003, (b) the addition of four radio stations in Houston, two of which we began operating in May 2002 and two of which we began operating in October 2002, and (c) general expense increases resulting from overall company growth, including sales commissions.

The overall increase in operating expenses was also attributable to a $0.2 million increase in depreciation expense. However, these increases were offset in part by a $1.8 million decrease in impairment of broadcast license and a $1.4 million decrease in noncash employee compensation. Our deferred compensation liability can increase due to changes in the applicable employee’s vesting percentage, which is based on time and performance measures, and can increase or decrease based on changes in our net value.

Total operating expenses for our radio segment increased by $1.3 million, or 7.9%, to $18.1 million for the nine months ended September 30, 2003, from $16.8 million for the same period of 2002. This increase was primarily the result of a $2.8 million increase in program and technical and selling, general and administrative expenses primarily due to:

(i)

a $0.8 million increase in program and technical expenses related to (a) the incremental costs associated with a full nine months of operations for four of our radio stations in Houston, two of which we began operating in May 2002 and two of which we began operating in October 2002, and (b) overall company growth, and

(ii)

a $2.0 million increase in selling, general and administrative expenses related to (a) an increase in local marketing agreement costs, (b) the addition of four radio stations in Houston, two of which we began operating in May 2002 and two of which we began operating in October 2002 and (c) general expense increases resulting from overall company growth, including sales commissions.

The increase in total operating expenses for our radio segment was offset in part by a $0.1 million decrease in depreciation expense and a $1.4 million decrease in noncash employee compensation.

Total operating expenses for our television segment increased by $1.3 million, or 9.4%, to $15.2 million for the nine months ended September 30, 2003, from $13.9 million, for the same period in 2002. This increase was primarily the result of a $2.8 million increase in program and technical and selling, general and administrative expenses primarily due to:

(i)

a $1.2 million increase in program and technical expenses related to (a) additional production of in-house programming and (b) overall company growth,

(ii)

a $1.6 million increase in promotional, selling, general and administrative expenses related to overall company growth, including sales commissions.

The increase in total operating expenses for our television segment was also the result of a $0.3 million increase in depreciation expense, however, this change was offset by a $1.8 million decrease in impairment of broadcast license. During the nine months ended September 30, 2002, we recorded this $1.8 million noncash impairment charge to reduce the carrying value of one of our broadcast licenses.

Interest expense. Interest expense decreased by $7.0 million, or 24.9%, to $21.4 million for the nine months ended September 30, 2003, from $28.4 million for the same period of 2002. This change was primarily due to $8.6 million in costs incurred in connection with refinancing the former senior credit facility and senior notes of our wholly owned subsidiary, LBI Media, Inc., in July 2002. These charges were offset in part by an increase in interest expense resulting from a higher average debt balance during the first nine months of 2003, as compared to the same period in 2002. Since the third quarter of 2002, we have used available cash and incurred additional debt under our subsidiary’s senior credit facility to finance approximately $71.2 million in asset acquisitions.

Interest and other income. Interest and other income decreased by approximately $23,000 to $73,000 for the nine months ended September 30, 2003, from $96,000 for the same period in 2002. This decrease was primarily the result of a $53,000 gain recorded during the first quarter of 2002 relating to the sale of certain marketable securities. This was offset in part by additional interest earned during the first nine months of 2003 on a $1.9 million loan made to a stockholder in July 2002.

Net income (loss). We recognized net income of $7.2 million for the nine months ended September 30, 2003, as compared to a net loss of $15.6 million for the same period of 2002, a change of $22.8 million. This change was the result of the factors noted above and our adoption of SFAS 142 in the first quarter of 2002, which resulted in a noncash charge of $8.1 million to reduce the carrying value of certain of our broadcast licenses. This charge is reflected as a cumulative effect of accounting change in our condensed consolidated statement of operations for the nine months ended September 30, 2002.

Adjusted EBITDA. Adjusted EBITDA increased by $4.3 million, or 15.4%, to $32.6 million for the nine months ended September 30, 2003 from $28.2 million for the same period in 2002. This increase was primarily attributable to net revenue growth in all of our radio and television markets, along with moderate increases in operating expenses. For a reconciliation of Adjusted EBITDA to net cash (used in) provided by operating activities, see footnote (1) under “Selected Historical Consolidated Financial and Other Data.”

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Net revenues. Net revenues increased by $11.3 million, or 19.0%, to $71.0 million for the year ended December 31, 2002 from $59.7 million in 2001. This increase was primarily attributable to (i) revenue growth and a full year of operations for our Houston radio and television properties acquired in March 2001, (ii) revenues from four additional radio stations in the Houston market, two of which we began operating in May 2002 and two of which we began operating in October 2002 and (iii) revenue growth from our Los Angeles television station. Collectively, these factors accounted for $12.6 million of the overall increase in net revenues.

Net revenues for our radio segment increased by $7.7 million, or 24.5%, to $39.3 million for the year ended December 31, 2002 from $31.6 million in 2001. This increase was primarily attributable to (i) revenue growth and a full year of operations for our Houston properties acquired in March 2001 and (ii) revenues from four additional radio stations in Houston, two of which we began operating in May 2002 and two of which we began operating in October 2002.

Net revenues for our television segment increased by $3.6 million, or 12.9%, to $31.7 million for the year ended December 31, 2002 from $28.1 million in 2001. This increase was largely attributable to a full year of operations for our Houston station acquired in March 2001, and improvements in both our Los Angeles and Houston markets, as we benefited from ratings increases and our targeted sales approach. This increase was offset in part by a decline in revenues from the leasing of our television production facility, Empire Burbank Studios.

Total operating expenses. Total operating expenses increased by $5.5 million, or 14.9%, to $42.3 million for the year ended December 31, 2002 from $36.8 million in 2001. This increase was primarily the result of:

(1)

a $7.0 million increase in program and technical, promotional and selling, and general and administrative expenses primarily related to (a) a full year of operations for our Houston radio and television properties acquired in March 2001, and additional expenses related to the four new radio stations in Houston, two of which we began operating under local marketing agreements in May 2002 and two of which we began operating in October 2002, which collectively accounted for $5.8 million of the overall increase and (b) additional costs associated with an increase in the production of Spanish-language television programming for our Los Angeles, Houston and San Diego stations, which accounted for $0.9 million of the overall increase;

(2)

a $2.2 million increase in noncash employee compensation. Our deferred compensation liability can increase due to changes in the applicable employee’s vesting percentage, which is based on time and performance measures, and can increase or decrease based on changes in our “net value.” During 2002, our “net value” increased and the portion of the vested awards also increased. Therefore, the amount of deferred compensation increased;

(3)

a $0.8 million increase in depreciation expense primarily resulting from (a) additional capital expenditures for our Houston radio and television properties, which accounted for $0.4 million of the increase and (b) the completion of construction on our Los Angeles digital television transmission facilities in April 2002, which accounted for $0.2 million of the increase; and

(4)

a $1.8 million noncash impairment charge to reduce the carrying value of one of our broadcast licenses.

The increase in program and technical, promotional and selling, and general and administrative expenses includes $0.9 million in local marketing payments related to the two radio stations that we began operating under time brokerage agreements in May 2002, and $0.4 million in legal expenses related to the settlement of certain litigation. The overall increase in operating expenses was offset in part by a $6.3 million decrease in amortization expense resulting from the adoption of SFAS 142 under which our broadcast licenses are no longer amortized.

Total operating expenses for our radio segment increased by $4.2 million, or 21.3%, to $23.7 million for the year ended December 31, 2002 from $19.5 million in 2001. This increase was primarily the result of:

(1)

a $4.2 million increase in program and technical, promotional and selling, and general and administrative expenses related to (a) a full year of operations for our Houston properties acquired in March 2001 and (b) additional expenses related to the four new stations in Houston, two of which we began operating under local marketing agreements in May 2002 and two of which we began operating in October 2002;

(2)

(3)

a $0.5 million increase in depreciation expense resulting primarily from additional capital expenditures at our Houston properties.

The increase in program and technical, promotional and selling, and general and administrative expenses includes $0.9 million in local marketing payments related to the two radio stations that we began operating under time brokerage agreements in May 2002. The increase in total operating expenses was offset in part by a $2.8 million decrease in amortization expense resulting from the adoption of SFAS 142 under which our broadcast licenses are no longer amortized.

Total operating expenses for our television segment increased by $1.3 million, or 7.7%, to $18.6 million for the year ended December 31, 2002 from $17.3 million in 2001. The increase was primarily the result of a $1.8 million noncash impairment charge to reduce the carrying value of one of our broadcast licenses, resulting primarily from the effects of increased competition in the station’s respective market. This increase was also attributable to a $2.9 million increase in program and technical, promotional and selling and general and administrative expenses primarily related to (a) a full year of operations for our Houston station acquired in March 2001 and (b) additional production costs associated with new Spanish-language television programs that began airing in late 2001 and the first quarter of 2002. The overall increase in operating expenses was offset in part by a $3.5 million decrease in amortization expense resulting from the adoption of SFAS 142 under which our broadcast licenses are no longer amortized. The increase in operating expenses for our television segment includes $0.4 million in legal expenses related to certain litigation that we settled in the first quarter of 2002.

Interest expense. Interest expense increased by $8.2 million to $38.2 million for the year ended December 31, 2002 from $30.0 million in 2001. This increase was due primarily to our July 2002 refinancing of our senior credit facility and other outstanding debt, which resulted in (i) a noncash write off of $6.1 million in previously deferred financing costs and (ii) a $2.5 million early redemption penalty on our old senior subordinated notes. In addition, we incurred additional interest during 2002 due to a full twelve months of accretion on our subordinated notes and accelerated amortization of deferred financing costs relating to the March 2001 refinancing of our outstanding indebtedness. These charges were slightly offset by decreased borrowings under LBI Media’s old senior credit facility during the first six months of 2002.

Interest and other income. Interest and other income decreased by $0.3 million to $0.2 million for the year ended December 31, 2002, compared to $0.5 million in 2001. This decrease was primarily the result of a decline in interest rates during 2002, as compared to 2001.

Net income (loss). As a result of the above factors we recognized a net loss of $17.9 million for the year ended December 31, 2002, compared to a net loss of $6.8 million for the year ended December 31, 2001, a decrease of $11.1 million. This decrease was the result of the factors noted above and our adoption of SFAS 142 in the first quarter of 2002, which resulted in a noncash charge of $8.1 million to reduce the value of certain of our broadcast licenses.

Adjusted EBITDA. Adjusted EBITDA increased by $4.3 million, or 13.1%, to $37.2 million for the year ended December 31, 2002 from $32.9 million for the same period in 2001. This increase was primarily attributable to the improved performance and a full year of operations of our Houston radio and television properties, which were acquired in March 2001. For a reconciliation of Adjusted EBITDA to net cash (used in) provided by operating activities, see footnote (1) under “Selected Historical Consolidated Financial and Other Data.”

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Net revenues. Net revenues increased by $9.1 million, or 18.0%, to $59.7 million for the year ended December 31, 2001 from $50.6 million for the year ended December 31, 2000. The increase was primarily attributable to (i) the acquisition in March 2001 of our Houston radio and television properties and (ii) revenue growth from our Los Angeles television station, which factors collectively accounted for $8.8 million of the overall increase. Our revenue growth was also the result of the continued growth of our customer base and the increased amount of inventory sold and increased rates for that advertising at our existing stations.

Net revenues for our radio segment increased by $2.9 million, or 10.0%, to $31.6 million for the year ended December 31, 2001 from $28.7 million for the year ended December 31, 2000. This increase was primarily attributable to net revenues from our Houston radio properties that we acquired in March 2001.

Net revenues for our television segment increased by $6.2 million, or 28.5%, to $28.1 million for the year ended December 31, 2001 from $21.9 million for the year ended December 31, 2000. This growth was attributable to increases in the number of advertisers, the amount of inventory sold and the advertising rates for our Los Angeles station, KRCA-TV, as well as net revenues from our Houston television station that we acquired in March 2001.

Total operating expenses. Total operating expenses increased by $8.4 million, or 29.5%, to $36.8 million for the year ended December 31, 2001 from $28.4 million for the year ended December 31, 2000. This increase was largely attributable to:

(1)

a $4.2 million increase in program and technical, promotional and selling, general and administrative expense, primarily due to the addition of our Houston radio and television properties acquired in March 2001, which accounted for $3.7 million of the increase; and

(2)

a $4.0 million increase in depreciation and amortization expense, primarily attributable to our Houston radio and television properties, which accounted for $3.9 million of the increase.

The overall increase in operating expenses includes $0.3 million in legal expenses related to litigation that we settled in the first quarter of 2002.

Total operating expenses for our radio segment increased by $3.1 million, or 19.2%, to $19.5 million for the year ended December 31, 2001 from $16.4 million for the year ended December 31, 2000. This increase resulted primarily from:

(1)

a $1.3 million increase in program and technical, promotional and selling, and general and administrative expenses in connection with our Houston radio properties;

(2)

a $1.7 million increase in depreciation and amortization expense in connection with our Houston radio properties; and

(3)

$0.2 million increase in noncash employee compensation, resulting from an increase in the vested portions of the respective awards.

Total operating expenses for our television segment increased by $5.3 million, or 43.6%, to $17.3 million for the year ended December 31, 2001, from $12.0 million for the year ended December 31, 2000. The increase was primarily a result of:

(1)

a $2.9 million increase in program and technical, promotional and selling, and general and administrative expenses primarily related to our Houston television station, KZJL-TV, which was acquired in March 2001;

(2)

a $2.3 million increase in depreciation and amortization expense; and

(3)

additional costs associated with an increase in the production of Spanish-language television programming.

These increases include $0.3 million in legal expenses related to litigation that we settled in the first quarter of 2002.

Interest expense. Interest expense increased by $11.9 million to $30.0 million for the year ended December 31, 2001 from $18.1 million for the year ended December 31, 2000. The increase was a result of increased borrowings under LBI Media’s senior credit facility to finance the acquisition of our Houston radio and television properties in March 2001. This increase was offset by a decline in the average interest rate on our outstanding borrowings, resulting from the March 2001 refinancing of our outstanding indebtedness.

Interest and other income. Interest and other income increased by $0.3 million to $0.5 million for the year ended December 31, 2001 from $0.2 million for the year ended December 31, 2000. The increase resulted from our higher cash balances in 2001.

Net income. As a result of the above factors, we recognized a net loss of $6.8 million for the year ended December 31, 2001, compared to net income of $4.2 million for the year ended December 31, 2000, a decrease of $11.0 million.

Adjusted EBITDA. Adjusted EBITDA increased by $4.9 million, or 17.5%, to $32.9 million for the year ended December 31, 2001 from $28.0 million for the year ended December 31, 2000. This growth can be attributed to increased revenue from our radio and television stations in Los Angeles and the acquisition of our Houston properties in March 2001. For a reconciliation of Adjusted EBITDA to net cash (used in) provided by operating activities, see footnote (1) under “Selected Historical Consolidated Financial and Other Data.”

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations and available borrowings under LBI Media’s $170.0 million revolving senior credit facility. Amounts available under LBI Media’s senior credit facility will begin decreasing quarterly, commencing on June 30, 2005 until the facility matures on September 30, 2009. Borrowings under LBI Media’s senior credit facility bear interest at a rate based on LIBOR or a base rate, plus an applicable margin that is dependent upon LBI Media’s leverage ratio (as defined in the senior credit facility). As of September 30, 2003, LBI Media had $127.0 million outstanding under the senior credit facility. Under the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes, LBI Media is limited in its ability to borrow under the senior credit facility. LBI Media may borrow up to $150.0 million under the senior credit facility without having to meet any restrictions under the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes, but any amount over $150.0 million that LBI Media requests to borrow under the senior credit facility will be subject to LBI Media’s and LBI Media Holdings’ compliance with specified leverage ratios (as defined in the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes). LBI Media may increase the borrowing capacity under its senior credit facility by up to an additional $30.0 million, subject to participation by the existing lenders or new lenders acceptable to the administrative agent under the senior credit facility and subject to restrictions in the indentures governing LBI Media’s senior subordinated notes and LBI Media Holdings’ senior discount notes.

LBI Media’s senior credit facility contains customary restrictive covenants that, among other things, limit LBI Media’s ability to incur additional indebtedness and liens in connection therewith, pay dividends and make capital expenditures above certain limits. Under the senior credit facility, LBI Media must also maintain specified financial ratios, such as a maximum total leverage ratio, a maximum senior leverage ratio, a minimum

ratio of EBITDA (as defined in the senior credit agreement) to interest expense and a minimum ratio of EBITDA (as defined in the senior credit agreement) to fixed charges. As of September 30, 2003, LBI Media was in compliance with these covenants.

In July 2002, LBI Media issued $150.0 million of senior subordinated notes that mature in 2012. Under the terms of LBI Media’s senior subordinated notes, LBI Media will pay semi-annual interest payments of approximately $7.6 million each January 15 and July 15. After giving effect to the partial redemption of LBI Media’s senior subordinated notes with the net proceeds of this offering, the semi-annual interest payments will be approximately $ million. The indenture governing LBI Media’s senior subordinated notes contains certain restrictive covenants that, among other things, limit LBI Media’s ability to incur additional indebtedness and pay dividends. As of September 30, 2003, LBI Media was in compliance with all these covenants. We plan to redeem a portion of LBI Media’s senior subordinated notes with the net proceeds from this offering.

In October 2003, LBI Media Holdings issued $68.4 million aggregate principal amount at maturity of senior discount notes that mature in 2013. Under the terms of the notes, cash interest will not accrue or be payable on the notes prior to October 15, 2008 and instead the accreted value of the notes will increase until such date. Thereafter, cash interest on the notes will accrue at a rate of 11% per year payable semi-annually on each April 15 and October 15; provided, however, that LBI Media Holdings may make a cash interest election on any interest payment date prior to October 15, 2008. If LBI Media Holdings makes a cash interest election, the principal amount of the notes at maturity will be reduced to the accreted value of the notes as of the date of the cash interest election and cash interest will begin to accrue at a rate of 11% per year from the date we make such election. The indenture governing the senior discount notes contains certain restrictive covenants that, among other things, limit LBI Media Holdings’ ability to incur additional indebtedness and pay dividends. LBI Media Holdings’ senior discount notes are structurally subordinated to LBI Media’s senior credit facility and senior subordinated notes. We plan to redeem a portion of LBI Media Holdings’ senior discount notes with the net proceeds from this offering.

In March 2001, Liberman Broadcasting issued $30.0 million principal amount of 9% subordinated notes. The 9% subordinated notes are subordinate in right of payment to LBI Media’s senior credit facility and LBI Media’s senior subordinated notes and are structurally subordinated to LBI Media Holdings’ senior discount notes. The 9% subordinated notes will mature on the earliest of (i) January 31, 2014, (ii) their acceleration following the occurrence and continuance of a material event of default, (iii) a merger, sale or similar transaction involving Liberman Broadcasting or substantially all of the subsidiaries of Liberman Broadcasting, (iv) a sale or other disposition of a majority of Liberman Broadcasting’s issued and outstanding capital stock or other rights giving a third party a right to elect a majority of Liberman Broadcasting’s board of directors and (v) the date on which the warrants issued in connection with Liberman Broadcasting’s 9% subordinated notes are repurchased pursuant to the call options applicable to the warrants. Interest is not payable until maturity. We plan to redeem all of the outstanding 9% subordinated notes with the net proceeds of this offering.

In connection with these 9% subordinated notes, Liberman Broadcasting also issued warrants to purchase shares of our common stock. The warrants have a put feature, which would allow the warrant holders at any time on or after the maturity date of the 9% subordinated notes, to require Liberman Broadcasting to repurchase the warrants at fair market value under certain events, and a call feature, which would allow Liberman Broadcasting to repurchase the warrants at its option under certain events. Certain mergers, combinations or sales of assets of Liberman Broadcasting, however, will not trigger the put right, even though such events would have accelerated the obligations under the 9% subordinated notes. We expect that these warrants will be exercised for shares of Class A common stock at the closing of this offering.

One of our indirect, wholly owned subsidiaries, Empire Burbank Studios, borrowed $3.25 million from City National Bank in July 1999, of which approximately $2.7 million was outstanding as of September 30, 2003. To secure that borrowing on a non-recourse basis, Empire Burbank Studios executed a mortgage on its property in Burbank, California in favor of City National Bank as security for the loan. The loan bears interest at 8.13% per annum. It is payable in monthly principal and interest payments of approximately $32,000 through maturity in August 2014.

For both our radio and television segments, we have historically funded, and will continue to fund, expenditures for operations, administrative expenses, capital expenditures and debt service from our operating cash flow and borrowings under LBI Media’s senior credit facility. For our television segment, our planned uses of liquidity during the next twelve months will include completion on the construction of a corporate office and production facility in Houston, Texas, which we estimate to cost approximately $3.3 million. We will also construct a new analog antenna at the same site as our digital antenna in Houston, Texas. We estimate the cost to be approximately $1.3 million for this project. We will also incur approximately $3.0 million in costs to relocate our Dallas antenna to a new tower site. For our radio segment, our planned uses of liquidity during the next twelve months will include additional capital expenditures related to the corporate office building and production facility noted above, from which all of our radio stations in Houston will ultimately broadcast. We may also upgrade several of our radio towers located in the Houston market for approximately $3.5 million. We believe that our cash on hand, cash provided by our operating activities and borrowings under LBI Media’s senior credit facility will be sufficient to permit us to fund operations for at least the next twelve months.

Cash and cash equivalents were $0.3 million and $1.4 million at September 30, 2003 and December 31, 2002, respectively.

Net cash flow provided by operating activities was $7.7 million for the nine months ended September 30, 2003 and 2002 and $15.4 million for the year ended December 31, 2002.

Net cash flow used in investing activities was $47.9 million and $6.6 million for the nine months ended September 30, 2003 and 2002, respectively, and $37.4 million for the year ended December 31, 2002. The increase in net cash flow used in investing activities is primarily attributable to the purchase of selected assets of two radio stations during the first nine months of 2003, requiring $39.2 million in cash, and an increase in capital expenditures to $6.3 million during the first nine months of 2003 from $3.5 million during the first nine months of 2002. The increase in capital expenditures is primarily attributable to additional costs incurred to construct our new corporate facilities in Houston, which accounted for approximately $3.4 million of the total expenditures during the first nine months of 2003.

Net cash flow provided by financing activities was $39.1 million and $2.6 million for the nine months ended September 30, 2003 and 2002, respectively, and $22.3 million for the year ended December 31, 2002. The change in our net cash flow provided by financing activities is primarily attributable to the additional funds required during the first nine months of 2003 to acquire selected assets of two radio stations.

We have certain cash obligations and other commercial commitments, which will impact our short- and long-term liquidity. At September 30, 2003, such obligations and commitments were LBI Media’s senior credit facility, LBI Media’s senior subordinated notes, Liberman Broadcasting’s subordinated notes, certain non-recourse debt of one of our wholly owned subsidiaries, our operating leases and obligations to acquire selected assets of a television station as follows:


	Payments due by Period from September 30, 2003
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		After 5 Years
Long term debt	$	303,103,882	$	159,769	$	363,049	$	50,877,429	$	251,703,635
Operating leases		9,080,362		1,027,397		2,003,841		1,791,922		4,257,202
Asset purchases		35,500,000		35,500,000		—		—		—

Total contractual cash obligations	$	347,684,244	$	36,687,166	$	2,366,890	$	52,669,351	$	255,960,837

The above table does not include LBI Media Holdings’ senior discount notes issued in October 2003, any interest payments under our long-term debt, or any deferred compensation amounts we may ultimately pay. Asset purchases in the table above reflects our obligations under a definitive agreement to acquire selected assets of a television station serving the Dallas-Fort Worth, Texas market. We completed the acquisition in January 2004.

The following table displays our contractual obligations as of September 30, 2003, on an adjusted basis to give effect to (a) the issuance of LBI Media Holdings’ senior discount notes in October 2003 and the use of the net proceeds of that offering to redeem debt outstanding under LBI Media’s senior credit facility, (b) our acquisition of selected assets of KMPX-TV in January 2004 and (c) the offering of our Class A common stock hereby and the application of net proceeds as described under “Use of Proceeds.”


	Pro Forma As Adjusted for the Offering Payments due by Period from September 30, 2003
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		After 5 Years
Long term debt	$		$		$		$		$
Operating leases		9,080,362		1,027,397		2,003,841		1,791,922		4,257,202

Total contractual cash obligations	$		$		$		$		$

The above table does not include any interest payments under our long-term debt or any deferred compensation amounts we may ultimately pay.

We have used, and expect to continue to use, a significant portion of our capital resources to fund acquisitions. Future acquisitions will be funded from amounts available under LBI Media’s senior credit facility, the proceeds of future equity or debt offerings and our internally generated cash flows. We currently anticipate that funds generated from operations and available borrowings under LBI Media’s senior credit facility will be sufficient to meet our anticipated cash requirements for the foreseeable future.

Inflation

We believe that inflation has not had a material impact on our results of operations for each of our fiscal years in the three-year period ended December 31, 2002. However, there can be no assurance that future inflation would not have an adverse impact on our operating results and financial condition.

Seasonality

Seasonal net revenue fluctuations are common in the television and radio broadcasting industry and result primarily from fluctuations in advertising expenditures by local and national advertisers. Our first fiscal quarter generally produces the lowest net broadcast revenue for the year.

Market Risk

Our exposure to market risk is currently confined to our cash and cash equivalents, changes in interest rates related to borrowings under LBI Media’s senior credit facility, and changes in the fair value of LBI Media’s senior subordinated notes, LBI Media Holdings’ senior discount notes and Liberman Broadcasting’s subordinated notes. Because of the short-term maturities of our cash and cash equivalents, we do not believe that an increase in market rates would have any significant impact on the realized value of our investments. We currently do not hedge interest rate exposure and are not exposed to the impact of foreign currency fluctuations.

We are exposed to changes in interest rates on LBI Media’s variable rate senior credit facility. A hypothetical 10% increase in the interest rates applicable to the year ended December 31, 2002 would have increased interest expense by approximately $0.6 million. Conversely, a hypothetical 10% decrease in the interest rates applicable to the year ended December 31, 2002 would have decreased interest expense by approximately $0.6 million. At December 31, 2002, we believe that the carrying value of amounts payable under LBI Media’s senior credit facility approximates its fair value based upon current yields for debt issues of similar quality and terms.

The fair value of our fixed rate long-term debt is sensitive to changes in interest rates. Based upon a hypothetical 10% increase in the interest rate, assuming all other conditions affecting market risk remain constant, the market value of our fixed rate debt would have decreased by approximately $8.6 million at December 31, 2002. Conversely, a hypothetical 10% decrease in the interest rate, assuming all other conditions affecting market risk remain constant, would have resulted in an increase in market value of approximately $9.4 million at December 31, 2002. Management does not foresee nor expect any significant change in our exposure to interest rate fluctuations or in how such exposure is managed in the future.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to allowance for doubtful accounts, acquisitions of radio station and television station assets, intangible assets, deferred compensation and commitments and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following accounting policies and the related judgments and estimates affect the preparation of our consolidated financial statements.

Acquisitions of radio station and television assets

Our radio and television station acquisitions have consisted primarily of the FCC licenses to broadcast in a particular market (broadcast license). We generally acquire the existing format and change it upon acquisition. As a result, a substantial portion of the purchase price for the assets of a radio or television station is allocated to its broadcast license. The allocations assigned to acquired broadcast licenses and other assets are subjective by their nature and require our careful consideration and judgment. We believe the allocations represent appropriate estimates of the fair value of the assets acquired.

Allowance for bad debts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. A considerable amount of judgment is required in assessing the likelihood of ultimate realization of these receivables including the current creditworthiness of each advertiser. If the financial condition of our advertisers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Intangible assets

Under the Financial Accounting Standards Board’s new rules (Statement of Accounting Standard (“SFAS”) No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets”), we no longer amortize intangible assets deemed to have indefinite lives. Instead, SFAS 142 requires that we review intangible assets with indefinite lives for impairment upon adoption and at least annually thereafter. We believe our broadcast licenses have indefinite lives under SFAS 142 and, accordingly, amortization expense is no longer recorded effective January 1, 2002.

Upon adoption of SFAS 142 in the first quarter of 2002, we recorded a noncash charge of approximately $8.1 million to reduce the carrying value of certain of our broadcast licenses, which resulted primarily from the effects of increased competition in the stations’ respective markets. In the third quarter of 2002, we recorded an additional $1.8 million noncash impairment write-down relating to one of our broadcast licenses, which also primarily resulted from increased competition in that station’s market. In calculating the impairment charges, the fair value of our broadcast licenses was determined using the discounted cash flow approach. This approach requires the projection of future cash flows and the restatement of these cash flows into their present valuation equivalent through the use of a discount rate.

The assessment of the fair values of our broadcast licenses are estimates which require careful consideration and judgments. If the operating results of our stations or conditions in the markets in which they operate change or fail to develop as anticipated, our estimates of the fair values may change in the future and result in impairment charges.

Deferred compensation

We have entered into employment agreements with certain employees. In addition to annual compensation and other benefits, these agreements provide the executives with the ability to participate in the increase of our “net value” over certain base amounts. As part of the calculation of this incentive compensation, we used the income and market valuation approaches to determine our “net value.” The income approach analyzes future cash flows and discounts them to arrive at a current estimated fair value. The market approach uses recent sales and offering prices of similar properties to determine estimated fair value. Based on our “net value” as determined in these reports, and based on the percentage of incentive compensation that has vested (as set forth in the employment agreements), we record noncash employee compensation expense (and a corresponding deferred compensation liability).

Our deferred compensation liability can increase based on changes in the applicable employee’s vesting percentage and can increase or decrease based on changes in our “net value.” We have two deferred compensation components that comprise the employee’s vesting percentage: (i) a component that vests in varying amounts over time; and (ii) a component that vests upon the attainment of certain performance measures (each unique to the individual agreements). We account for the time vesting component over the vesting periods specified in the employment agreements and account for the performance based component when we consider it probable that the performance measures will be attained.

Assuming no change in our “net value” from that at September 30, 2003, we would expect to record an additional $0.4 million of noncash deferred compensation expense through the end of 2003 relating solely to the time vesting portion of the deferred compensation.

Commitments and contingencies

We periodically record the estimated impacts of various conditions, situations or circumstances involving uncertain outcomes. These events are called “contingencies,” and our accounting for these events is prescribed by SFAS No. 5, “Accounting for Contingencies.”

The accrual of a contingency involves considerable judgment on the part of our management. We use our internal expertise, and outside experts (such as lawyers), as necessary, to help estimate the probability that a loss has been incurred and the amount (or range) of the loss. We currently do not have any material contingencies that we believe requires accrual or disclosure in our consolidated financial statements.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets,” effective for fiscal years beginning after December 15, 2001. The adoption of SFAS 141 did not have a material impact on our financial position or results of operations. As described above, under SFAS 142, we no longer amortize intangible assets deemed to have indefinite lives.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We adopted SFAS No. 144 on January 1, 2002. The adoption of the new standard did not have a material impact on our results of operations or financial position.

In January 2003, the FASB issued FIN No. 46, Consolidation of Variable Interest Entities. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The provisions of FIN 46 became effective immediately for all arrangements entered into after January 31, 2003. For arrangements entered into with variable interest entities created prior to January 31, 2003, the provisions of FIN 46 become effective for the first interim or annual period ending after March 15, 2004. We are in the process of evaluating this pronouncement and currently believe that the adoption of FIN 46 will not have a material impact on our results of operations or financial position.

BUSINESS

Market data and other statistical information used throughout this prospectus are based on industry publications, government publications and reports by market research firms or other published independent sources, including the United States Census Bureau, Arbitron and Nielsen surveys, Hispanic Business, Inc. and Television Bureau Advertising (TVB). Some data are also based on our good faith estimates, which are derived from our review of internal surveys, as well as independent sources. We have not independently verified the information and cannot guarantee its accuracy or completeness.

Overview

Operating Strategy

The principal components of our operating strategy are set forth below:

Develop popular stations by targeting the local community

Not all Spanish-speaking people have the same, or even similar, cultural and ethnic backgrounds. As a result, we create radio and television programming specifically tailored to the preferences of each of our Hispanic populations living in our markets to create a highly recognizable local station identity. We believe we are particularly skilled at programming to the tastes and preferences of the Hispanics of Mexican heritage, which comprise 80%, 76% and 85% of the Hispanic populations in Los Angeles, Houston and Dallas, respectively according to a 2002 survey by the U.S. Census Bureau. We believe our ability to produce locally targeted programming gives us an advantage over most other Spanish-language broadcasters that develop and distribute their programming on a national or regional basis. As a result, we have generally been able to achieve and maintain strong station ratings in our markets.

Capitalize on our complementary radio and television stations to capture a greater share of advertising revenue

We own Spanish-language radio and television stations in both the Los Angeles and Houston markets and have been able to create substantial cross-selling and cross-promotional opportunities. We create cross-selling opportunities by offering our advertisers a customized package that allows them to cross-advertise on radio and television, as well as to cross-merchandise through product integration in our programming. This allows us to effectively compete for a significant portion of an advertiser’s Hispanic budget since advertisers have historically spent over 80% of these budgets on radio and television. We believe that we are able to capture a larger share of advertising revenues in our markets because of our ability to cross-sell and cross-promote our radio and television stations. We use a portion of our spot inventory time at both our radio and television stations to air advertisements that promote our other stations and programs.

Offer radio and television packages to advertisers. We offer both radio and television advertising packages in the Los Angeles and Houston markets. Our strategy is to offer the benefits of one medium to complement the sale of the other. Specifically, we offer our advertisers the opportunity to cross-advertise on radio and television, as well as to cross-merchandise through product integration in our programming.

Cross-promote our radio and television stations. We utilize a portion of our spot inventory time at both our radio and television stations to run advertisements promoting our other stations and programs. This cross-promotion helps us capitalize on the strong ratings and targeted audience of our stations with no incremental cash outlay. In addition, we utilize our radio and television stations to create complementary programs that attract our radio listeners to our television programs and our television viewers to our radio stations. For example, in Los Angeles and Houston, we produce music variety television shows hosted by our radio station disc jockeys that feature music industry news, interviews and videos of songs played on our popular radio stations in those markets.

Develop a diverse local advertiser base

Consistent with our locally targeted programming strategy, our sales strategy is focused on establishing direct relationships with the local advertising community. Local advertising accounted for approximately 83% of our gross revenue in 2002. We believe that local advertisers are more responsive to Hispanic advertising opportunities in our markets. Other advantages of our locally focused sales strategy include:

•

our cash flows have been generally less vulnerable to ratings fluctuations as a result of our strong relationships with our advertisers; and

•

our cash flows have been relatively more recession resistant because local advertising has historically been less cyclical than national advertising.

An additional advantage is that our large and diverse client base resulted in no single advertiser accounting for more than 5% of our net revenues in 2002.

Offer cost-effective advertising and value-added services to our advertisers

We believe that we differentiate ourselves from other Spanish-language broadcasters by offering advertisers the greatest value for their advertising dollar. We support advertisers’ media campaigns with creative promotions utilizing our radio and television clusters and offer our studio facilities to provide value-added services to our advertisers such as free commercial production. These unique services allow us to cross-sell our broadcasting properties and attract new customers currently not advertising on radio or television. As a result, we have been able to significantly increase our advertiser base.

Utilize cost-effective television programming to drive cash flow growth

Our television programming consists of both internally produced and purchased programming, which, when combined with our long-form advertising, creates an effective programming line-up for our television stations.

Our in-house television production facilities provide us with an efficient cost structure to create programming, such as our popular talk shows José Luis Sin Censura and El Show de María Laria and our reality-based programs Buscando Amor and Segunda Cita. In addition, we realize programming synergies between our radio and television assets by featuring our radio formats and on-air radio personalities in our television programming. As we acquire additional television stations, we are able to leverage our programming library across a broader base of stations, thereby increasing our profitability. Furthermore, we supplement our internally produced programming with purchased programs, primarily Spanish-language movies, which we obtain from numerous producers in Latin America.

Acquisition Strategy

•

the size and density of the Hispanic population and general economic conditions in the market;

•

our ability to expand coverage in an existing cluster or develop a new cluster in a market where we believe we can acquire a meaningful share of the Hispanic audience;

•

the power and quality of the station’s broadcasting signal.

Hispanic Market Opportunity

In addition, advertisers have begun to direct more advertising dollars towards U.S. Hispanics and, consequently, Spanish-language radio and television advertising has grown at more than twice the rate of total radio and television advertising from 1997 to 2002. Spanish-language advertising rates have been rising faster in recent years when compared to the general media, yet Spanish-language rates are still lower than those for English-language media. As advertisers continue to recognize the buying power of the U.S. Hispanic population,

especially in areas where the concentration of Hispanics is very high and where a significant percentage of the retail purchases are made by Hispanic customers, we expect the gap in advertising rates between Spanish-language and English-language media to narrow. As U.S. Hispanic consumer spending continues to grow relative to overall consumer spending, industry analysts expect that advertising expenditures targeted to Hispanics will increase significantly, eventually closing the gap between the current level of advertising targeted to Hispanics and the buying power that the Hispanic population in the U.S. represents.

Our Markets

The following table sets forth certain demographic information about the markets in which our radio and television stations operate.


Market	Total Population	Hispanic Population	% Hispanic Population		% Hispanic Population of Mexican Descent		Hispanic Population Growth(4)
Los Angeles(1)	16,728,229	7,085,906	42	%	80	%	48	%
Houston(2)	4,346,443	1,393,635	32	%	76	%	80	%
Dallas(3)	5,462,360	1,284,998	24	%	85	%	145	%
San Diego County	2,813,678	809,318	29	%	90	%	58	%
Total U.S. (for comparison)	280,540,330	37,872,475	13	%	63	%	69	%

Source: American Community Survey Profile 2002 by the U.S. Census Bureau

(1)	Represents the Los Angeles consolidated metropolitan statistical area.

(2)	Represents the Houston consolidated metropolitan statistical area.

(3)	Represents the Dallas-Fort Worth consolidated metropolitan statistical area.

(4)	Represents growth from 1990 to 2002.

Our Radio and Television Stations

The following tables set forth certain information about our radio and television stations and their broadcast markets.

Radio Stations


Market/Station(1)	DMA Rank(2)	Hispanic Market Rank(3)	Frequency	Format	Station Audience Share(4)
*Los Angeles*	2	1
KBUE-FM/KBUA-FM/KEBN-FM(5)			105.5/94.3/94.3	Norteña	2.9
KHJ-AM			930	Ranchera	1.0
KWIZ-FM			96.7	Sonidero, Cumbia	0.7
KVNR-AM(6)			1480	Time Brokered	—

Total					4.6

*Houston*	11	4
KTJM-FM/KJOJ-FM(7)			98.5/103.3	Norteña	2.1
KQQK-FM/KIOX-FM(8)			107.9/96.9	Spanish Pop	1.0
KQUE-AM			1230	Ranchera	0.9
KEYH-AM/KXGJ-FM(9)			850/101.7	Sonidero, Cumbia	0.5
KSEV-AM(6)			700	Time Brokered	1.2
KJOJ-AM(6)			880	Time Brokered	—

Total					5.7

(1)	Our radio stations are in some instances licensed to communities other than the named principal community for the market.

(2)	Represents rank among U.S. designated market areas.

(3)	Represents rank among U.S. Hispanic markets by Hispanic television households.

(4)	Represents the most recent four book average percentage of listeners, ages 12 and older, listening to our radio stations during a specified period of time. Source: Arbitron surveys for Winter 2003, Spring 2003, Summer 2003 and Fall 2003.

(5)

KBUA-FM and KEBN-FM (formerly KMXN-FM) currently simulcast the signal of KBUE-FM in the San Fernando Valley and Orange County, respectively. We completed our acquisition of selected assets of KMXN-FM on May 15, 2003. We had been operating the station under a local marketing agreement since January 7, 2003 and had changed the station’s format.

(6)	Three of our stations, KVNR-AM, KSEV-AM and KJOJ-AM, are operated by third parties under time brokerage agreements. We receive a monthly fee from the third parties for the air time and the third parties receive revenues from their sale of advertising spots.

(7)	KJOJ-FM simulcasts the signal of KTJM-FM.

(8)	KIOX-FM simulcasts the signal of KQQK-FM.

(9)	KXGJ-FM simulcasts the signal of KEYH-AM.

Television Stations


Station	Channel	Market	DMA Rank(1)	Hispanic Market Rank(2)	Number of Hispanic TV Households
KRCA	62	Los Angeles	2	1	1,585,390
KZJL	61	Houston	11	4	399,220
KMPX	29	Dallas	7	6	324,120
KSDX	29	San Diego	26	12	192,170

Source: Nielsen Media Research, January, 2003

(1)	Represents rank among U.S. designated market areas.

(2)	Represents rank among U.S. Hispanic markets by Hispanic TV households.

Programming

Radio. In programming our Spanish-language radio stations, we target the Spanish-speaking portion of the Hispanic population that is dominant in the local markets in which we operate. We tailor the format of each of

our radio stations to reach a specific target demographic in the market in order to maximize our overall listener base without causing direct format competition among our stations. We determine the optimal format for each of our stations based upon extensive local market research. To create brand awareness and loyalty in the local community, we enhance our programming by sending on-air talent to participate in local promotional activities, such as “live remote broadcasts,” that are aired from special events or client locations and other street level promotions. These types of activities also provide attractive promotional and advertising opportunities for our clients. We also promote our radio stations in our television programming airing in these markets.

The following provides a description of our Spanish-language radio stations:

•

KBUE-FM/KBUA-FM/KEBN-FM (Que Buena) plays contemporary, up-tempo, regional Mexican music that includes Norteña, Banda, Corrido and Ranchera music. The target audience for these stations is adult listeners aged 18 to 49.

•

KHJ-AM (La Ranchera) plays traditional Ranchera, also known as Mariachi music. The target audience for this station is adult listeners aged 25 to 49.

•

KWIZ-FM (Sonido) plays music similar in style to Cumbia and Salsa. The target audience for this station is adult listeners aged 18 to 49.

•

KTJM-FM/KJOJ-FM (La Raza) plays contemporary, up-tempo, regional Mexican music, similar to the music played on Que Buena, which includes Norteña, Banda, Corrido and Ranchera music. The target audience for these stations is adult listeners aged 18 to 49.

•

KQUE-AM (Radio Ranchito) plays traditional Ranchera music. The target audience for this station is adult listeners aged 25 to 49.

•

KQQK-FM/KIOX-FM (XO) plays contemporary, up-tempo, Spanish pop music. The target audience for these stations is adult listeners aged 18 to 49.

•

KEYH-AM/KXGJ-FM (Sonido) plays music similar in style to Cumbia and Salsa. The target audience for these stations is adult listeners aged 18 to 49.

Three of our radio stations are operated by third parties under time brokered agreements. Our time brokered stations are a source of stable cash flow given that they are typically operated under long-term contracts with annual price escalators, and we do not incur any of the programming costs associated with these stations. Currently, stations KVNR-AM in the Los Angeles market and KJOJ-AM in the Houston market broadcast Vietnamese-language programming. According to the 2000 U.S. Census, Los Angeles and Houston represent the first- and third-largest Vietnamese markets, respectively, in the United States. Station KSEV-AM in Houston broadcasts an English-language talk format.

Television. Our programming content consists primarily of internally produced programs such as single topic talk shows, reality dating shows, local news, and musical variety shows, as well as purchased programs including Spanish-language movies. We own or have the rights to a library of more than 3,200 hours of Spanish-language movies, children’s shows and other programming content available for broadcast on our television stations.

We seek to maximize our television group’s profitability by broadcasting Spanish-language programming and selling long-form advertising. In February 2003, we began programming our station KSDX-TV in San Diego with Spanish-language programming from our Los Angeles television station master control facilities.

Production Facilities

We own Empire Burbank Studios, a fully equipped television production complex next to our offices in Burbank, California. The studio provides us with all of the physical facilities needed to produce our own Spanish-language television programming without the variable expense of renting these services from an outside

vendor. We believe this enables us to produce our programming at a very low cost as compared to our competitors. Owning our own production facilities also enables us to control the content of the programs we produce on air. We currently produce the following highly rated Spanish-language programs at our Burbank facilities:

•

Los Angeles al Día: a local live talk show that airs on KRCA-TV every weekday morning from 7:30 AM to 9:00 AM;

•

Noticias 62 En Vivo: three local news shows airing in Los Angeles and anchored by Emmy award winner, Jesús Javier, that airs on KRCA-TV every weekday from 12:00 PM to 12:30 PM, 7:00 PM to 7:30 PM and from 9:00 PM to 9:30 PM;

•

Los Angeles En Vivo: a local Los Angeles live variety show hosted by Penelope Menchaca that airs on KRCA-TV every weekday from 12:30 PM to 1:00 PM;

•

El Show de María Laria: a talk show hosted by Emmy award winning María Laria that airs on KRCA-TV and KSDX-TV every weekday from 3:00 PM to 4:00 PM and on KZJL-TV and KMPX-TV every weekday from 5:00 PM to 6:00 PM;

•

Que Buena TV: a music-oriented variety show centered around the music played by our KBUE-FM, KBUA-FM and KEBN-FM radio stations that airs on KRCA-TV every weekday from 4:00 PM to 5:00 PM;

•

Buscando Amor: a reality-based dating show that airs on KRCA-TV every weekday from 5:00 PM to 6:00 PM, on KSDX-TV every weekday from 9:00 PM to 10:00 PM, and on KZJL-TV and KMPX-TV every weekday from 6:00 PM to 7:00 PM;

•

José Luis Sin Censura: a fast-paced talk show hosted by well-known Spanish television personality José Luis Gonzáles that airs on KRCA-TV and KSDX-TV every weekday from 11:00 AM to 12:00 PM and 6:00 PM to 7:00 PM and on KZJL-TV and KMPX-TV every weekday from 1:00 PM to 2:00 PM and 9:00 PM to 10:00 PM; and

•

Segunda Cita: the sequel to Buscando Amor, a show that airs on KRCA-TV every weekday from 9:30 PM to 10:00 PM, on KSDX-TV every weekday from 7:00 PM to 7:30 PM, and on KZJL-TV and KMPX-TV every weekday from 8:30 PM to 9:00 PM.

In addition, we produce La Raza TV, a music-oriented variety show centered around Norteña music played by our KTJM-FM/KJOJ-FM radio station, on location in Houston. The show airs on KZJL-TV and KMPX-TV weekdays from 4:00 PM to 5:00 PM.

We sell three of our locally produced shows, El Show de María Laria, José Luis Sin Censura and Buscando Amor to independent broadcasters outside of our markets which allows us to recoup a portion of the production costs. We also lease a portion of our Empire Burbank Studios to third parties which offsets a portion of the cost associated with that facility.

We recently moved into new studios and production facilities in Houston and Dallas, enabling us to produce local programming. We plan to begin producing additional local programming in the Houston market during the second half of 2004. We anticipate producing similar local programming in Dallas in 2005.

Sales and Advertising

Most of our net revenues are generated from the sale of local, regional and national advertising for broadcast on our radio and television stations. For the year ended December 31, 2002, approximately 83% of our gross revenues were generated from the sale of local advertising and approximately 14% of our gross revenues were generated from the sale of regional and national advertising. Local sales are made by our sales staffs located in Los Angeles, Houston, and Dallas. National sales are made by our national sales representative, Spanish Media Rep Team, Inc., an affiliate of our two principal stockholders, in exchange for a commission from us that is based on a percentage of our net revenues from the advertising sold.

We believe that advertisers can reach the Hispanic community more cost effectively through radio and television broadcasting than through printed advertisements. Advertising rates charged by radio and television stations are based primarily on:

•

A station’s audience share within the demographic groups targeted by the advertisers;

•

The number of radio and television stations in the market competing for the same demographic groups; and

•

The supply and demand for radio and television advertising time.

A radio or television station’s listenership or viewership is reflected in ratings surveys that estimate the number of listeners or viewers tuned to the station. Each station’s ratings are used by its advertisers to consider advertising with the radio or television station and are used by us to, among other things, chart audience growth, set advertising rates and adjust programming.

Competition

Radio and television broadcasting are highly competitive businesses. The financial success of each of our radio and television stations depends in large part on our ability to increase our market share of the available advertising revenue, the economic health of the market and our audience ratings. In addition, our advertising revenue depends upon the desire of advertisers to reach our audience demographic.

Our Spanish-language radio stations compete against other Spanish-language radio stations in their markets for audiences and advertising revenue. In Los Angeles, our radio stations compete primarily against Univision Radio (formerly Hispanic Broadcasting Corporation), Spanish Broadcasting Systems, Inc. and Entravision Communications Corporation, three of the largest Hispanic group radio station operators in the United States. In Houston, our radio stations compete primarily against Univision Radio.

Our television stations primarily compete against Univision Communications, Inc. and Telemundo Communications Group, Inc. for audiences and advertising revenue in the Los Angeles, Houston, and Dallas markets.

Two of our competitors, Univision Communications, Inc. and Hispanic Broadcasting Corporation, merged with each other. The combined company has resources substantially greater than ours and is our first competitor to operate both radio and television stations in the Los Angeles, Houston, and Dallas markets.

Employees

As of December 31, 2003, we had approximately 419 employees, of which approximately 330 were full-time employees. We had approximately 190 full-time employees in television and approximately 140 full-time employees in radio. None of our employees are represented by labor unions, and we have not entered into any collective bargaining agreements. We believe that our relations with our employees are good.

Properties and Facilities

The types of properties required to support our radio and television stations include offices, studios and transmitter and antenna sites. Through our wholly owned subsidiary, we own studio and office space at 1845 West Empire Avenue, Burbank, California 91504. This property is subject to a mortgage in favor of City National Bank, with whom one of our indirect subsidiaries has entered into a loan agreement. See “Description of Other Indebtedness—Empire Burbank Loan.” We also own studio and office space at 1813 Victory Place, Burbank, California 91504. In addition, we own studio and production facilities in Houston and Dallas, Texas for our operations there. We own a number of our transmitter and antenna sites and lease or license the remainder from third parties. We generally select our tower and antenna sites to provide maximum market coverage. In general, we do not anticipate difficulties in renewing these site leases. No single facility is material to us, and we believe our facilities are generally in good condition and suitable for our operations.

Legal Proceedings

From time to time, we are involved in litigation incidental to the conduct of our business, but we are not currently a party to any material lawsuit or proceeding against us.

REGULATION OF TELEVISION AND RADIO BROADCASTING

General

The FCC regulates television and radio broadcast stations pursuant to the Communications Act of 1934, as amended. Among other things, the FCC:

•

determines the particular frequencies, locations and operating power of stations;

•

issues, renews, revokes and modifies station licenses;

•

regulates equipment used by stations; and

•

adopts and implements regulations and policies that directly or indirectly affect the ownership, changes in ownership, control, operation and employment practices of stations.

A licensee’s failure to observe the requirements of the Communications Act or FCC rules and policies may result in the imposition of various sanctions, including admonishment, fines, the grant of renewal terms of less than eight years, the grant of a license with conditions or, in the case of particularly egregious violations, the denial of a license renewal application, the revocation of an FCC license or the denial of FCC consent to acquire additional broadcast properties.

Congress and the FCC have had under consideration or reconsideration, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation, ownership and profitability of our television and radio stations, result in the loss of audience share and advertising revenue for our television and radio broadcast stations or affect our ability to acquire additional television and radio broadcast stations or finance such acquisitions. These matters may include:

•

changes to the license authorization and renewal process;

•

proposals to impose spectrum use or other fees on FCC licensees;

•

changes to the FCC’s equal employment opportunity regulations and other matters relating to involvement of minorities and women in the broadcasting industry;

•

proposals to change rules relating to political broadcasting including proposals to grant free air time to candidates;

•

changes regarding enforcement of the FCC’s rules on broadcasting indecent or obscene material, including increases in fines and changes in procedures for revocation of licenses;

•

proposals to adopt new public interest obligations on television broadcasters during and after the transition to digital television, including new or expanded obligations regarding children’s television programming;

•

proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages;

•

changes in broadcast multiple ownership, foreign ownership, cross-ownership and ownership attribution policies; and

•

proposals to alter provisions of the tax laws affecting broadcast operations and acquisitions.

We cannot predict what changes, if any, might be adopted, nor can we predict what other matters might be considered in the future, nor can we judge in advance what impact, if any, the implementation of any particular proposal or change might have on our business.

FCC Licenses

Television and radio stations operate pursuant to licenses that are granted by the FCC for a term of eight years, subject to renewal upon application to the FCC. During the periods when renewal applications are pending, petitions to deny license renewal applications may be filed by interested parties, including members of the public. The FCC may hold hearings on renewal applications if it is unable to determine that renewal of a

license would serve the public interest, convenience and necessity, or if a petition to deny raises a “substantial and material question of fact” as to whether the grant of the renewal applications would be inconsistent with the public interest, convenience and necessity. However, the FCC is prohibited from considering competing applications for a renewal applicant’s frequency, and is required to grant the renewal application if it finds:

•

that the station has served the public interest, convenience and necessity;

•

that there have been no serious violations by the licensee of the Communications Act or the rules and regulations of the FCC; and

•

that there have been no other violations by the licensee of the Communications Act or the rules and regulations of the FCC that, when taken together, would constitute a pattern of abuse.

If as a result of an evidentiary hearing, the FCC determines that the licensee has failed to meet the requirements for renewal and that no mitigating factors justify the imposition of a lesser sanction, the FCC may deny a license renewal application. Historically, FCC licenses have generally been renewed. We have no reason to believe that our licenses will not be renewed in the ordinary course, although there can be no assurance to that effect. The non-renewal of one or more of our stations’ licenses could have a material adverse effect on our business.

The FCC licenses some television stations as low power television stations. Low power television stations generally operate at lower power and cover a smaller geographic area than full-service television stations, are not entitled to carriage by cable television and direct broadcast satellite operators and must accept interference from, and eliminate interference to, full-service television stations. Our station KSDX-LP in San Diego is a low power television station.

Transfer and Assignment of Licenses

The Communications Act requires prior consent of the FCC for the assignment of a broadcast license or the transfer of control of a corporation or other entity holding a license. In determining whether to approve an assignment of a television or radio broadcast license or a transfer of control of a broadcast licensee, the FCC considers a number of factors pertaining to the licensee including compliance with various rules limiting common ownership of media properties, the “character” of the licensee and those persons holding “attributable” interests therein, the Communications Act’s limitations on foreign ownership and compliance with the FCC rules and regulations.

To obtain the FCC’s prior consent to assign or transfer a broadcast license, appropriate applications must be filed with the FCC. If the application to assign or transfer the license involves a substantial change in ownership or control of the licensee, for example, the transfer or acquisition of more than 50% of the voting equity, the application must be placed on public notice for a period of 30 days during which petitions to deny the application may be filed by interested parties, including members of the public. If an assignment application does not involve new parties, or if a transfer of control application does not involve a “substantial” change in ownership or control, it is a pro forma application, which is not subject to the public notice and 30-day petition to deny procedure. The regular and pro forma applications are nevertheless subject to informal objections that may be filed any time until the FCC acts on the application. If the FCC grants an assignment or transfer application, interested parties have 30 days from public notice of the grant to seek reconsideration of that grant. The FCC has an additional ten days to set aside such grant on its own motion. When ruling on an assignment or transfer application, the FCC is prohibited from considering whether the public interest might be served by an assignment or transfer to any party other than the assignee or transferee specified in the application.

The merger of LBI Holdings I, Inc. into Liberman Broadcasting, and the issuance of the Class A common stock offered hereby, will require the consent of the FCC. However, such transactions will not involve a substantial change in ownership and will require only a pro forma application for FCC consent.

Foreign Ownership Rules

Under the Communications Act, a broadcast license may not be granted to or held by persons who are not U.S. citizens, by any corporation that has more than 20% of its capital stock owned or voted by non-U.S. citizens or entities or their representatives, by foreign governments or their representatives or by non-U.S. corporations. Furthermore, the Communications Act provides that no FCC broadcast license may be granted to or held by any corporation directly or indirectly controlled by any other corporation of which more than 25% of its capital stock is owned of record or voted by non-U.S. citizens or entities or their representatives, or foreign governments or their representatives or by non-U.S. corporations, if the FCC finds the public interest will be served by the refusal or revocation of such license. These restrictions apply similarly to partnerships, limited liability companies and other business organizations. Thus, the licenses for our stations could be revoked if more than 25% of our outstanding capital stock is issued to or for the benefit of non-U.S. citizens in excess of these limitations.

Multiple Ownership and Cross-Ownership Rules

The FCC generally applies its other broadcast ownership limits to “attributable” interests held by an individual, corporation or other association or entity. In the case of a corporation holding broadcast licenses, the interests of officers, directors and those who, directly or indirectly, have the right to vote 5% or more of the stock of a licensee corporation are generally deemed attributable interests, as are positions as an officer or director of a corporate parent of a broadcast licensee.

Stock interests held by insurance companies, mutual funds, bank trust departments and certain other passive investors that hold stock for investment purposes only become attributable with the ownership of 20% or more of the voting stock of the corporation holding broadcast licenses. On December 3, 2001, the FCC reinstated the single majority shareholder exemption to these attribution rules, which provides that the interests of minority shareholders in a corporation are not attributable if a single entity holds 50% or more of that corporation’s voting stock.

A time brokerage agreement with another television or radio station in the same market creates an attributable interest in the brokered television or radio station as well for purposes of the FCC’s local television or radio station ownership rules, if the agreement affects more than 15% of the brokered television or radio station’s weekly broadcast hours.

Debt instruments, non-voting stock, options and warrants for voting stock that have not yet been exercised, insulated limited partnership interests where the limited partner is not “materially involved” in the media-related activities of the partnership and minority voting stock interests in corporations where there is a single holder of more than 50% of the outstanding voting stock whose vote is sufficient to affirmatively direct the affairs of the corporation generally do not subject their holders to attribution.

However, the FCC now applies a rule, known as the equity-debt-plus rule, that causes certain creditors or investors to be attributable owners of a station, regardless of whether there is a single majority shareholder or other applicable exception to the FCC’s attribution rules. Under this rule, a major programming supplier (any programming supplier that provides more than 15% of the station’s weekly programming hours) or a same-market media entity will be an attributable owner of a station if the supplier or same-market media entity holds debt or equity, or both, in the station that is greater than 33% of the value of the station’s total debt plus equity. For purposes of the equity-debt-plus rule, equity includes all stock, whether voting or nonvoting, and, equity held by insulated limited partners in limited partnerships. Debt includes all liabilities, whether long-term or short-term. If a party were to purchase stock which, in combination with other of our debt or equity interests, amounts to more than 33% of the value of one or more of our station’s total debt plus equity and such party were a major programming supplier or a same-market media entity, such interest could result in a violation of one of the ownership rules. As a result of such violation, we may be unable to obtain from the FCC one or more authorizations needed to conduct our broadcast business and may be unable to obtain FCC consents for certain future acquisitions unless either we or the investor were to remedy the violation.

On June 2, 2003, the FCC adopted new rules governing media ownership. On September 3, 2003, the U.S. Court of Appeals for the Third Circuit issued a stay of the rules, which were to become effective as of September 4, 2003, pending the outcome of legal proceedings concerning them. The FCC subsequently announced that transactions involving broadcast properties will be reviewed for regulatory compliance under its “old” ownership rules, which remain in effect as a result of the stay. These ongoing legal proceedings, as well as Congressional and FCC action on the multiple ownership and cross ownership rules, could dramatically change the new rules or affect our ability to acquire additional radio and televisions stations.

Local Television Ownership Rule

Under the local television ownership rule currently in effect, an owner may operate two television stations assigned to the same market (defined as the Designated Market Area (DMA) created by the Nielsen media research firm) so long as either:

•

the television stations do not have overlapping broadcast signals; or

•

there will remain after the transaction eight independently owned, full power noncommercial or commercial operating television stations in the market and one of the two commonly-owned stations is not ranked in the top four based upon audience share.

The FCC will consider waiving these ownership restrictions in certain cases involving failing or failed stations or stations which are not yet built.

Should they become effective, the FCC’s new local television ownership rules will allow an entity to own two television stations in any market with at least five television stations. However, no single entity may own more than one television station ranked among the top four in a local market based on audience ratings.

The FCC’s new rules would also allow, in certain circumstances, common ownership of three television stations in a single market. In the largest markets—those with 18 or more television stations—a company would be permitted to own three TV stations, although this portion of the rule also would be subject to the “top four” limitation described above.

The FCC’s new local television ownership rules also include a provision for waiver of the “top four” standard in certain circumstances. In markets with 11 or fewer television stations, the FCC would allow parties to seek waivers of the “top four” restriction and evaluate on a case-by-case basis whether joint ownership would serve the public interest.

Local Radio Ownership

The Communications Act and the FCC impose specific limits on the number of commercial radio stations an entity can own in a single market. The local radio ownership rules are as follows:

•

In a radio market with 45 or more commercial radio stations, a party may own, operate or control up to eight commercial radio stations, not more than five of which are in the same service (AM or FM).

•

In a radio market with between 30 and 44 (inclusive) commercial radio stations, a party may own, operate or control up to seven commercial radio stations, not more than four of which are in the same service (AM or FM).

•

In a radio market with between 15 and 29 (inclusive) commercial radio stations, a party may own, operate or control up to six commercial radio stations, not more than four of which are in the same service (AM or FM).

•

In a radio market with 14 or fewer commercial radio stations, a party may own, operate or control up to five commercial radio stations, not more than three of which are in the same service (AM or FM), except that a party may not own, operate, or control more than 50% of the radio stations in such market.

The FCC’s new ownership rules retain the numerical limits and define local radio markets using a geographic market approach assigned by Arbitron rather than a signal contour method. The new local radio ownership rule also would include both commercial and noncommercial stations in counting the number of stations in a given radio market. Because of the change in market definition, our Houston radio cluster does not comply with the new rules but the “grandfathering” provisions of the FCC’s new rules permit us to retain it. We may not, however, be able to sell the entire cluster to a single party in the future. In addition, the radio market definition under the new rules could limit the number of additional radio stations that we can acquire.

Cross-Ownership Restrictions

The cross-ownership rules currently in effect generally prohibit common ownership of a newspaper and a broadcast property in the same market. The cross-ownership rules do permit a television station owner to own one radio station in the same market as its television station. In addition, a television station owner is permitted to own additional radio stations, not to exceed the local ownership limits for the market, as follows:

•

in markets where 20 media voices will remain, an owner may own an additional five radio stations, or, if the owner only has one television station, an additional six radio stations; and

•

in markets where ten media voices will remain, an owner may own an additional three radio stations.

A “media voice” includes each independently-owned and operated full-power television and radio station and each daily newspaper that has a circulation exceeding 5% of the households in the market, plus one voice for all cable television systems operating in the market.

The FCC’s new ownership rules would replace the existing newspaper/broadcast cross-ownership restriction as well as the radio/television cross-ownership limits with new “cross-media limits.”

Smaller Markets. In markets with three or fewer television stations in the DMA, the FCC’s new rules would prohibit cross-ownership among television stations, radio stations and daily newspapers.

Mid-Sized Markets. In markets with between four and eight television stations in the DMA, media combinations would be limited to one of the three following:

•

A daily newspaper or newspapers, one television station, and up to half of the radio stations permissible under the local radio ownership limits;

•

A daily newspaper or newspapers and as many radio stations as permissible under the local radio ownership limits (but no television stations); or

•

Two television stations (if permissible under the local television ownership rule) and as many radio stations as permissible under the local radio ownership limits (but no daily newspapers).

Large Markets. In markets with nine or more television stations in the DMA, there would be no limits on television, newspaper and radio cross-ownership. Local television and radio ownership limits still exist in such markets.

National TV Ownership Limit

The FCC’s current rules prohibit a single entity from reaching more than 35% of nationwide television households. Legislation was recently enacted that requires the FCC to raise that cap to 39%. The rules provide for a so-called “UHF discount,” a 50% “discount” that the FCC grants to UHF stations in calculating an entity’s national audience reach.

Our ability to acquire additional television and radio stations, our acquisition strategy and our business may be significantly affected by the new multiple ownership and cross-ownership rules, ongoing FCC or Congressional review or amendment to the new rules, as well as litigation challenging and possible court action upon the new rules.

Because of these multiple and cross-ownership rules, if a shareholder, officer or director of Liberman Broadcasting or one of its subsidiaries holds an “attributable” interest in one or more of our stations, that shareholder, officer or director may violate the FCC’s rules if that person or entity also holds or acquires an attributable interest in other television or radio stations or daily newspapers, depending on their number and location. If an attributable shareholder, officer or director of Liberman Broadcasting or one of its subsidiaries violates any of these ownership rules, we may be unable to obtain from the FCC one or more authorizations needed to conduct our broadcast business, and may be unable to obtain FCC consents for certain future acquisitions.

Programming and Operation

The Communications Act requires broadcasters to serve the “public interest.” Since 1981, the FCC has gradually relaxed or eliminated many of the more formalized procedures it developed to promote the broadcast of certain types of programming responsive to the needs of a broadcast station’s community of license. Nevertheless, a broadcast licensee continues to be required to present programming in response to community problems, needs and interests and to maintain certain records demonstrating its responsiveness. The FCC will consider complaints from the public about a broadcast station’s programming when it evaluates the licensee’s renewal application, but complaints also may be filed and considered at any time. Stations also must follow various FCC rules that regulate, among other things, political broadcasting, the broadcast of obscene or indecent programming, sponsorship identification, the broadcast of contests and lotteries, certain types of advertising such as for out-of-state lotteries and gambling casinos, and technical operation.

The FCC requires that licensees must not discriminate in hiring practices. In light of a 2001 court ruling that vacated FCC requirements that licensees follow certain specific practices with respect to minority hiring, the FCC has adopted employment-related rules that require licensees to engage in certain recruiting and “outreach” efforts, among other things, and to make several new filings to the FCC.

The FCC rules also prohibit a broadcast licensee from simulcasting more than 25% of its programming on another radio station in the same broadcast service (that is, AM/AM or FM/FM). The simulcasting restriction applies if the licensee owns both radio broadcast stations or owns one and programs the other through a local marketing agreement, provided that the contours of the radio stations overlap in a certain manner.

“Must Carry” Rules and Satellite Home Viewer Improvement Act of 1999

FCC regulations implementing the 1992 Cable Act require each full-service television broadcaster to elect, at three year intervals beginning October 1, 1993, to either:

•

require carriage of its signal by cable systems in the station’s market, which is referred to as “must carry” rules; or

•

negotiate the terms on which such broadcast station would permit transmission of its signal by the cable systems within its market which is referred to as “retransmission consent.”

We have elected “must carry” with respect to each of our full-power stations for the three-year election cycle beginning January 1, 2003. Our next election will be due on October 1, 2005.

Under the FCC’s rules currently in effect, cable systems are only required to carry one signal from each local broadcast television station. The cable systems that carry our stations’ analog signals will not be required to

carry our digital signal until we discontinue our analog broadcasting. Also, under current FCC rules, the cable systems will be required to carry only one channel of digital signal from each of our stations, even though we may be capable of broadcasting multiple programs simultaneously within the bandwidth that the FCC has allotted to us for digital broadcasting.

The Satellite Home Viewer Improvement Act of 1999 allows satellite carriers to deliver “distant” broadcast programming to subscribers who are unable to obtain television network programming over the air from local television stations. It also allows satellite carriers to provide subscribers with “local-into-local” programming, but imposes a requirement analogous to the Cable Act’s “must carry” rules: Any satellite company that has chosen to provide local-into-local service must provide subscribers with all of the local broadcast television signals that are assigned to the market and where television licensees ask to be carried on the satellite system. We have taken advantage of this law to secure carriage of our full-service stations in those markets where the satellite operators have implemented local-into-local service.

Time Brokerage Agreements

We have entered into time brokerage agreements under which we are given the right to broker time on stations owned by third parties, or agree that other parties may broker time on our stations. Historically, we have only purchased time on stations owned by third parties prior to purchasing selected assets of that station. By using time brokerage agreements, we can provide programming and other services to a station proposed to be acquired before we receive all applicable FCC and other governmental approvals. As indicated, we have, from time to time, entered into time brokerage agreements giving third parties the right to broker time on stations owned by us.

FCC rules and policies generally permit time brokerage agreements if the station licensee retains ultimate responsibility for and control of the applicable station. As a part of that requirement, the licensee of a time-brokered station is required to maintain certain personnel at the time-brokered station. We may not be able to air all of our scheduled programming on a station with which we have time brokerage agreements and we may not receive the anticipated revenue from the sale of advertising for that programming. Likewise, we may not receive the payments from the time brokers to whom we have sold time on our stations.

Stations may enter into cooperative arrangements known as joint sales agreements. Under the typical joint sales agreement, a station licensee obtains, for a fee, the right to sell substantially all of the commercial advertising on a separately owned and licensed station in the same market. It also involves the provision by the selling party of certain sales, accounting and services to the station whose advertising is being sold. Unlike a time brokerage agreement, the typical joint sales agreement does not involve programming. While the FCC’s current rules do not consider joint sales agreements to be attributable for multiple ownership purposes, joint sales agreements for radio stations would become attributable under the FCC’s new media ownership rules, and the FCC has indicated that it will consider whether television joint sales agreements should be attributable in a future rulemaking proceeding.

As part of its increased scrutiny of television and radio station acquisitions, the Department of Justice has stated publicly that it believes that time brokerage agreements and joint sales agreements could violate the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if such agreements take effect prior to the expiration of the waiting period under that Act. Furthermore, the Department of Justice has noted that joint sales agreements may raise antitrust concerns under Section 1 of the Sherman Antitrust Act and has challenged them in certain locations. The Department of Justice also has stated publicly that it has established certain revenue and audience share concentration benchmarks with respect to television and radio station acquisitions, above which a transaction may receive additional antitrust scrutiny. The “Risk Factors—Risks Related to the Television and Radio Industries” section of this prospectus contains a more complete discussion of this issue and the risks to which we are exposed as a result.

Digital Television Services

The FCC has adopted rules for implementing digital television service in the U.S. Implementation of digital television will improve the technical quality of television signals and provide broadcasters the flexibility to offer new services, including, but not limited to, high-definition television and data broadcasting.

The FCC has established service rules and adopted a table of allotments for digital television. Under the table, certain eligible broadcasters with a full-service television station are allocated a separate channel for digital television operation. Stations will be permitted to phase in their digital television operations over a period of years after which they will be required to surrender their license to broadcast the analog, or non-digital television signal. In addition, the FCC adopted rules that allow television broadcasters to initially satisfy the obligation to begin broadcasting a digital television signal by broadcasting a signal that serves, at least, each full-service television station’s applicable community of license, rather than to broadcast at full authorized power. These rules have permitted us to operate our digital television facilities in Los Angeles, Houston and Dallas at lower power pursuant to special temporary authority from the FCC. We began broadcasting with a digital signal on KRCA-TV and KZJL-TV in November 2002 and August 2003, respectively, and KMPX-TV, which we acquired in January 2004, has been broadcasting with a digital signal since July 2003.

We have developed a plan for complying with the FCC’s continuing digital television requirements. We may be required to return one of our channels for each station to the government by the end of 2006, and, in the case of KRCA-TV, we will need to change the frequency on which our digital station operates, except that these deadlines may be extended until digital television receivers reach an 85% market penetration.

Equipment and other costs associated with the transition to digital television, including the necessity of temporary dual-mode operations and the relocation of stations from one channel to another, will impose some near-term financial costs on television stations providing the services. The potential also exists for new sources of revenue to be derived from digital television. We cannot predict the overall effect the transition to digital television might have on our business.

Digital Radio Services

The FCC has recently adopted rules authorizing the implementation of terrestrial digital audio broadcasting technology, including In-Band On-Channel^™ technology for FM radio stations. Digital audio broadcasting’s advantages over traditional analog broadcasting technology include improved sound quality and the ability to offer a greater variety of auxiliary services. In-Band On-Channel^™ technology permits FM stations to transmit radio programming in both analog and digital formats, or in digital only formats, using the bandwidth that the radio station is currently licensed to use. It is unclear what effect those regulations will have on our business or the operations of our radio stations.

The FCC has allocated spectrum to a new technology, satellite digital audio radio service, to deliver satellite-based audio programming to a national or regional audience. The nationwide reach of the satellite digital audio radio service could allow niche programming aimed at diverse communities that we are targeting. Two companies that hold licenses for authority to offer multiple channels of digital, satellite-delivered radio could compete with conventional terrestrial radio broadcasting. These competitors have commenced their operations.

Radio Frequency Radiation

The FCC has adopted rules limiting human exposure to levels of radio frequency radiation. These rules require applicants for renewal of broadcast licenses or modification of existing licenses to inform the FCC whether the applicant’s broadcast facility would expose people or employees to excessive radio frequency radiation. We believe that all of our stations are in compliance with the FCC’s current rules regarding radio frequency radiation exposure.

Low-Power Radio Broadcast Service

The FCC has adopted rules creating a new low-power FM radio service. The low-power FM service consists of two classes of radio stations, with maximum power levels of either 10 watts or 100 watts. The 10 watt stations reach an area with a radius of between one and two miles and the 100 watt stations reach an area with a radius of approximately three and one-half miles. Each of these low-power FM stations is required to avoid interference with other existing FM stations, as currently required of full-powered FM stations.

The low-power FM service is exclusively non-commercial. It is difficult to predict what impact, if any, the new low-power FM service will have on competition for our stations’ audiences. Because of the legislation passed by Congress in 2000, which protected incumbent radio broadcasters on frequency three channels away, and because of certain FCC interference standards, we expect that low-power FM service will cause little or no signal interference with our stations.

MANAGEMENT

The following sets forth information about our directors, executive officers and key non-executive employees:


Name	Position(s)	Age*
Directors, Executive Officers and Key Non-Executive Employee
Jose Liberman	Co-Founder, President and Director	78
Lenard Liberman	Co-Founder, Executive Vice President, Secretary and Director	42
Brett Zane	Chief Financial Officer	37
Eduardo Leon	Vice President—Programming	39
Andrew Mars	Corporate Vice President—Sales	48

*	All ages are as of December 31, 2003.

Jose Liberman co-founded Liberman Broadcasting, Inc., in 1987 together with his son, Lenard, and has served as our President and as a member on our board of directors since our formation. Mr. Liberman started his career in radio broadcasting in 1957 with the purchase of XERZ in Mexico and the establishment of a radio advertising representative firm in Mexico. In 1976, Mr. Liberman acquired KLVE-FM, the first Los Angeles FM station to utilize a Hispanic format. In 1979, he purchased KTNQ-AM and combined it with KLVE to create the first Hispanic AM/FM combination in Los Angeles.

Lenard Liberman has served as our Executive Vice President and Secretary and has been a member of our board of directors since our formation in 1987. Mr. Liberman also served as our Chief Financial Officer from April 2002 to April 2003. Mr. Liberman manages all day-to-day operations including acquisitions and financings. He received his juris doctorate degree and masters of business administration degree from Stanford University in 1987.

Brett Zane has served as our Chief Financial Officer since April 2003. From 1994 until March 2003, Mr. Zane served as Vice President and Chief Financial Officer of Logistics Express, Inc., North America’s largest independent provider of logistics and distribution services to the industrial gas industry. In addition, Mr. Zane served as a director for ALEMBIC, a captive property and casualty insurance company domiciled in the Cayman Islands, from 1994 to May 2003. From 1988 until December 1990, Mr. Zane worked in the Capital Markets and Mergers and Acquisitions Departments of Prudential Securities, Inc. and received his masters of business administration from the UCLA Andersen Graduate School of Management in 1993.

Eduardo Leon is considered by us as a key non-executive employee and has served as our Vice President of Programming since 1998. He is responsible for all programming aspects of our radio stations. Prior to joining us, Mr. Leon was the program director from 1996 to 1998 at radio station WLEY-FM in Chicago, which is owned by Spanish Broadcasting Systems, Inc. In 1992, he founded Radio Ideas, a Spanish-language radio consulting company.

Andrew Mars joined Liberman Broadcasting, Inc. in 1990 as Vice President and station manager of KWIZ-FM and has served as Corporate Vice President of Sales since 1995. Prior thereto, Mr. Mars was director of sales for WODS-FM in Boston. He previously served as a local sales manager at CBS Radio in Los Angeles.

Board Composition

Our board of directors is currently composed of two directors. Upon the completion of this offering, we intend to increase the size of our board of directors to four by nominating and electing two additional directors, including an independent director as defined under Nasdaq rules. We intend to increase the size of our board of directors to five by adding a second independent director within 90 days from the closing of this offering.

Our board of directors has determined that we are a “controlled company” under the rules of the Nasdaq Stock Market, because Jose and Lenard Liberman control more than 90% of our voting power. As a result, we are not required to have a board composed of a majority of independent directors.

Board Committees

At the time this offering closes, our board of directors will establish an audit committee. The audit committee will provide assistance to the board of directors in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting, internal control and legal compliance function. The audit committee will also oversee the audit efforts of our independent accountants and take those actions it deems necessary to satisfy itself that the accountants are independent of management. The audit committee will consist of Lenard Liberman, and . is an independent director under the rules of the Nasdaq Stock Market. The board of directors will replace and Lenard Liberman with independent directors within 90 days and one year, respectively, after this offering closes.

As a “controlled company” under the Nasdaq rules, we do not currently intend to establish a compensation committee or nominating committee.

Compensation Committee Interlocks and Insider Participation

We do not and after this offering, will not, have a compensation committee. Our board of directors is responsible for determining the compensation of our executive officers. Jose Liberman and Lenard Liberman, our President and Executive Vice President, respectively, were our only two directors for 2003 and determined the compensation of all executive officers for 2003. Jose Liberman and Lenard Liberman are also directors and Jose Liberman is an executive officer of Spanish Media Rep Team, Inc. Otherwise, no executive officer of our company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors.

Director Compensation

Our directors do not currently receive any cash compensation for services on our board of directors or any committee thereof.

Executive Compensation

The following table describes the compensation we paid to our three executive officers during the fiscal years ended December 31, 2003, 2002 and 2001:

Summary Compensation Table


	Year	Annual Compensation				All Other Compensation
Name and Principal Position(s)	Year	Salary		Bonus		All Other Compensation
Jose Liberman(1) President	2003 2002 2001	$	60,000 60,000 60,000	$	— — —	$	61,186 25,450 24,424

Lenard Liberman(2) Executive Vice President and Secretary	2003 2002 2001		240,000 240,000 215,500		— — —		49,988 24,479 62,919

Brett Zane(3) Chief Financial Officer	2003		158,080		—		—

(1)	Mr. Jose Liberman’s salary has been increased to $120,000 for 2004. All other compensation includes payments by us for Mr. Liberman’s personal taxes and tax preparation and planning, personal travel and leasing of personal vehicles.

(2)	Mr. Lenard Liberman’s salary has been increased to $300,000 for 2004. All other compensation includes payments by us for Mr. Liberman’s personal taxes and tax preparation and planning, personal travel and leasing of personal vehicles.

(3)	Mr. Zane is our Chief Financial Officer and receives a base annual salary of $215,000 per year.

Indemnification of Directors and Executive Officers and Limitation of Liability

After this offering, Liberman Broadcasting will be governed by the Delaware General Corporation Law. Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit indemnification for liabilities, including reimbursement for expenses incurred, arising under the Securities Act. This indemnification may, however, be unenforceable as against public policy.

As permitted by Delaware law, Liberman Broadcasting’s certificate of incorporation, which will become effective upon the closing of this offering, includes a provision that eliminates the personal liability of Liberman Broadcasting’s directors for monetary damages for breach of fiduciary duty as a director, except for liability:

•

for any breach of the director’s duty of loyalty to us or our stockholders;

•

for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

•

under Section 174 of the Delaware law regarding unlawful dividends and stock purchases; or

•

for any transaction from which the director derived an improper personal benefit.

As permitted by Delaware law, Liberman Broadcasting’s certificate of incorporation provides that:

•

Liberman Broadcasting is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, so long as the person being indemnified acted in good faith and in a manner the person reasonably believed to be in or not opposed to our best interests, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful;

•

Liberman Broadcasting is permitted to indemnify its other employees and agents to the extent that it indemnifies its officers and directors, unless otherwise required by law;

•

Liberman Broadcasting is required to advance expenses to its directors and officers incurred in connection with a legal proceeding to the fullest extent permitted by Delaware law, subject to very limited exceptions; and

•

the rights conferred in Liberman Broadcasting’s certificate of incorporation are not exclusive.

Before the closing of this offering, Liberman Broadcasting intends to enter into indemnity agreements with each of its current directors and officers to give such directors and officers additional contractual assurances regarding the scope of the indemnification set forth in our amended and restated certificate of incorporation and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

Before the closing of this offering, we also intend to obtain directors’ and officers’ liability insurance.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Shareholder Loans

As of September 30, 2003, we had outstanding loans, including accrued interest, aggregating $230,596 and $2,271,013 to Jose and Lenard Liberman, respectively. For Jose Liberman, we made loans of $146,590, $4,432 and $75,000 on December 20, 2001, July 14, 2002 and July 29, 2002, respectively. Jose Liberman repaid the loan for $4,432 on February 14, 2003. For Lenard Liberman, we made loans of $243,095, $32,000 and $1,916,563 on December 20, 2001, June 14, 2002 and July 9, 2002, respectively.

Each of these loans bears interest at the alternative federal short-term rate published by the Internal Revenue Service for the month in which the advance was made, which rate was 2.48%, 2.91% and 2.84% for December 2001, June 2002 and July 2002, respectively. Each loan matures on the seventh anniversary of the date on which the loan was made. Under the Sarbanes-Oxley Act of 2002, we may not make any additional personal loans to Jose or Lenard Liberman, and the maturity dates of the existing loans may not be extended.

Stock Purchase Agreement

In January 1998, we entered into a stock purchase agreement with Lenard Liberman, Jose Liberman and Jose’s wife, Esther Liberman. If either Lenard or Jose seeks to dispose of his common stock, we have the right to acquire that common stock at the lesser of the offer price or a price agreed upon by the stockholders, subject to adjustment every three years, beginning in 2004. If we do not exercise our right to repurchase the stock, the remaining stockholder has the right to purchase that stock at the same price. If neither we nor the remaining stockholder exercises our rights to purchase the stock, the stockholder may transfer the stock free and clear of the restrictions set forth in the stock repurchase agreement for a period of 30 days. After the expiration of the 30-day period, the transfer restrictions contained in the stock purchase agreement will be reinstated.

In addition, if Lenard or Jose and his wife die, we will have the right to repurchase their stock at a price agreed upon by the stockholders, subject to adjustment every three years, beginning in 2004. If we do not exercise our repurchase right, the remaining stockholder has the right to purchase that stock at the same price. If neither we nor the remaining stockholder exercises our rights to purchase the stock, the stock may be transferred free and clear of the restrictions contained in the stock purchase agreement.

Payments for stock purchased under the stock purchase agreement may be in cash or in the form of a promissory note, which will be payable in five equal annual installments commencing on the first anniversary of the issuance of the promissory note.

The parties intend to terminate this agreement prior to the closing of this offering.

Spanish Media Rep Team

Jose and Lenard Liberman own and operate our national sales representative, Spanish Media Rep Team, Inc., or SMRT. SMRT receives a 15% commission from us for any advertising time it sells, which is based upon the commission rates we paid to former third party national sales representative firms. We paid approximately $1,339,000 and $1,603,000 to SMRT for services provided to us for the year ended December 31, 2002 and for the nine months ended September 30, 2003, respectively.

L.D.L. Enterprises, Inc.

Lenard Liberman is the sole shareholder of L.D.L. Enterprises, Inc., a mail order business. From time to time, we allow L.D.L. Enterprises to use, free of charge, unsold advertising time on our television stations.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our Class A and Class B common stock as of February 10, 2004, after giving effect to the offering of our Class A common stock herein, the exercise of all of our outstanding warrants and our reincorporation, by:

•

each person known by us to be a beneficial owner of more than 5% of our outstanding Class A and Class B common stock;

•

each of our directors;

•

each of our executive officers;

•

all directors and officers as a group; and

•

all selling stockholders.

The amounts and percentage of Class A and Class B common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

The Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of our stockholders. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to ten votes per share. Holders of shares of our Class B common stock may elect at any time to convert their shares into an equal number of shares of Class A common stock, provided that any necessary consent by the FCC has been obtained.

Percentage of beneficial ownership of Class A common stock and Class B common stock after this offering is based on shares of Class A common stock and shares of Class B common stock, respectively, outstanding as of February 10, 2004, after giving effect to this offering, the exercise of all of our outstanding warrants and our reincorporation. The number of beneficially owned shares of Class A common stock excludes shares of Class A common stock issuable upon conversion of shares of our Class B common stock.


Name and Address of Beneficial Owner(1)	Class A Common Stock					Class B Common Stock		Percent of Total Economic Interest			Percent of Total Voting Power
	Before Offering		Shares Being Offered	After Offering		Number	%	Before Offering		After Offering	Before Offering		After Offering
	Number	%	Shares Being Offered	Number	%	Number	%	Before Offering		After Offering	Before Offering		After Offering
Jose Liberman(2)				—	—			46.7	%		46.7	%
Lenard D. Liberman(3)				—	—			46.7	%		46.7	%
Brett Zane	—	—	—	—	—	—	—	—		—	—		—
All officers and directors as a group (3 persons)				—	—			93.5	%		93.5	%

(1)	The address for each person or entity named above is Liberman Broadcasting Corporation, 1845 West Empire Avenue, Burbank, California 91504.

(2)	Of the shares of Class B common stock, shares are held by Mr. Jose Liberman in his capacity as trustee of the Esther Liberman 2003 Annuity Trust and shares are held by Mr. Jose Liberman in his capacity as trustee of the Jose Liberman 2003 Annuity Trust.

(3)	The shares of Class A common stock being sold by Mr. Lenard Liberman consist of shares of Class B common stock that will be converted into Class A common stock immediately before this offering.

DESCRIPTION OF CAPITAL STOCK

Upon the closing of this offering, our authorized capital stock will consist of shares of Class A common stock, shares of Class B common stock and shares of preferred stock.

Common Stock

General. Except with respect to voting and conversion, shares of Class A common stock and Class B common stock are the same in all respects.

Voting. Holders of shares of Class A common stock are entitled to one vote per share, and holders of shares of Class B common stock are entitled to ten votes per share. All actions submitted to a vote of our stockholders are voted on by holders of Class A common stock and Class B common stock voting together as a single class.

Dividends and Other Distributions. Each share of Class A common stock and Class B common stock is equal in respect of dividends and other distributions in cash, stock or property (including distributions upon our liquidation and consideration to be received upon a sale or conveyance of all or substantially all of our assets), except that in the case of dividends or other distributions payable on the Class A common stock or Class B common stock in shares of such stock, including distributions pursuant to stock splits or dividends, only Class A common stock will be distributed with respect to Class A common stock, and only Class B common stock will be distributed with respect to Class B common stock. In no event will any of the Class A common stock or Class B common stock be split, divided or combined unless each other class is proportionately split, divided or combined.

Convertibility of Class B Common Stock into Class A Common Stock. All of the Class B common stock outstanding currently is beneficially owned by Mr. Jose Liberman and Mr. Lenard Liberman. The Class B common stock is convertible at any time, or from time to time, at the option of the holder of such Class B common stock, and without cost to such holder (except any transfer taxes that may be payable, as in the case of any transfer of Class A common stock, if certificates are to be issued in a name other than that in which the certificate surrendered is registered), into Class A common stock on a share-for-share basis.

In addition to conversions into Class A common stock as described above, a record or beneficial owner of shares of Class B common stock may transfer such shares of Class B common stock (whether by sale, assignment, gift, bequest, appointment or otherwise) to any transferee.

Preemptive Rights. Neither the Class A common stock nor the Class B common stock carry any preemptive rights enabling a holder to subscribe for or receive shares of our common stock of any other class or other securities convertible into shares of our stock. Our board of directors possesses the power to issue shares of authorized but unissued Class A common stock, Class B common stock and preferred stock without further stockholder action.

Liquidation, Dissolution or Winding Up. In the event of any liquidation, dissolution or winding up of our company, whether voluntarily or involuntarily, after payment or provision for payment of our debts and other liabilities and the preferential amounts to which the holders of any stock ranking prior to the Class A common stock and the Class B common stock in the distribution of assets shall be entitled upon liquidation, the holders of our Class A common stock and Class B common stock shall be entitled to share pro rata in our remaining assets according to their respective interests.

NASDAQ Trading. We will apply to list our Class A common stock on The NASDAQ National Market for trading under the symbol “LBIM”.

Transfer Agent and Registrar. The transfer agent and registrar for the Class A common stock will be .

Preferred Stock

Shares of preferred stock may be issued by us from time to time in one or more series. Except as may be provided in a certificate of designation or by law, shares of any series of our preferred stock that have been redeemed (whether through the operation of a sinking fund or otherwise) or purchased by us or which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes shall be retired and shall not be reissued. Our board of directors is authorized to fix or alter the designations and powers, preferences and relative, participating, optional or other rights, if any, and qualifications, limitations or restrictions thereof, including, without limitation, the dividend rate (and whether dividends are cumulative), conversion rights, if any, voting rights, rights and terms of redemption (including sinking fund provisions, if any), redemption price and liquidation preferences of any wholly unissued series of preferred stock, and the number of shares constituting any such series and the designation thereof, or any of them, and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of such series then outstanding.

Warrants

In March 2001, in connection with the issuance of Liberman Broadcasting’s subordinated notes, we issued warrants to purchase up to 14.02 shares, or 6.55%, of our common stock. We expect these warrants to be exercised for shares of Class A common stock at the closing of this offering.

Anti-Takeover Provisions

Delaware Law

Liberman Broadcasting is governed by the provisions of Section 203 of the Delaware Law. In general, Section 203 prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales or other transactions resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of the company’s voting stock. The statute could delay, defer or prevent a change in control of our company.

Certificate of Incorporation and Bylaw Provisions

Various provisions contained in Liberman Broadcasting’s certificate of incorporation and bylaws could delay or discourage some transactions involving an actual or potential change in control of Liberman Broadcasting or its management and may limit the ability of stockholders to remove current management or approve transactions that stockholders may deem to be in their best interests and could adversely affect the price of our Class A common stock. These provisions:

•

authorize our board of directors to establish one or more series of undesignated preferred stock, the terms of which can be determined by the board of directors at the time of issuance;

•

prohibit cumulative voting in the election of directors unless required by applicable law—under cumulative voting, a minority stockholder holding a sufficient percentage of a class of shares may be able to ensure the election of one or more directors;

•

state that special meetings of our stockholders may be called only by the chairman of the board of directors, our chief executive officer, by the board of directors after a resolution is adopted by a majority of the total number of authorized directors;

•

establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting;

•

allow our directors, not our stockholders, to fill vacancies on our board of directors; and

•

provide that the authorized number of directors may be changed only by resolution of the board of directors.

Foreign Ownership

Our certificate of incorporation restricts the ownership, voting and transfer of our Class A and Class B common stock in accordance with the foreign ownership provisions of the Communications Act. Our certificate of incorporation authorizes our board of directors to adopt such provisions as it deems necessary to enforce the foreign ownership restrictions, including the inclusion of a legend on our Class A and Class B common stock certificates regarding foreign ownership restrictions. In addition, our certificate of incorporation provides that shares of Class A and Class B common stock determined by the board of directors to be owned beneficially by an alien or an entity directly or indirectly owned by aliens in whole or in part shall always be subject to redemption by action of the board to the extent necessary, in the board’s sole judgment, to comply with the foreign ownership restrictions of the Communications Act.

DESCRIPTION OF INDEBTEDNESS

Senior Credit Facility

The description below is a description of the principal terms of the senior secured credit facility of our indirect, wholly owned subsidiary, LBI Media, and is subject to, and qualified in its entirety by, reference to the definitive documentation.

LBI Media’s senior credit facility provides for a $170.0 million senior secured reducing revolving credit facility. LBI Media has the option to request its lenders to increase the amount of the reducing revolving credit facility by an amount equal to no more than $30.0 million in the aggregate; however, its lenders are not obligated to do so. Letters of credit are also available to LBI Media under the credit agreement. Aggregate letters of credit outstanding at any time may not exceed the lesser of $5.0 million or the available revolving commitment amount. The credit facility matures on September 30, 2009.

Interest and Commitment Fee. The revolving loans bear interest through maturity: (1) if a Base Rate (as defined below) loan, then at the sum of the Base Rate plus the Applicable Margin (as defined below), or (2) if a LIBOR loan, then at the sum of LIBOR plus the Applicable Margin. The Base Rate is the higher of (i) Fleet National Bank’s prime commercial lending rate and (ii) the Federal Funds Effective Rate (as published by the Federal Reserve Bank of New York) plus 0.5%.

The Applicable Margin for the loans is based on LBI Media’s total leverage ratio (total debt to EBITDA (as defined in the credit agreement)). For Base Rate loans, the Applicable Margin will range from 0.25% to 1.75% and for LIBOR loans, the Applicable Margin will range from 1.50% to 3.00%. Upon the occurrence of an event of default discussed below, interest accrues at the rate otherwise applicable plus 2.00% so long as an event of default is continuing.

LBI Media pays an annual commitment fee on the unused portion of the revolving credit facility based on its utilization rate of the revolver. If LBI Media borrows less than 50% of the revolving credit commitment, it must pay an annual commitment fee of 0.500% times the unused portion. If LBI Media borrows 50% or more of the total revolving loan commitment, then it must pay an annual commitment fee of 0.375% times the unused portion.

Amortization. The commitment to lend revolving loans is automatically reduced each quarter beginning June 30, 2005 until it is fully amortized on September 30, 2009.

Mandatory Prepayments. LBI Media is required to prepay borrowings under the senior credit facility with:

•

100% of the net proceeds from non-ordinary course asset sales with aggregate net cash payments in excess of $3.5 million in any fiscal year, which we have not reinvested in assets in the same line of business within 170 days after receipt of the proceeds, subject to a limit of $5.0 million that may be reinvested in real estate after the date of the credit agreement and other limited exceptions; and

•

100% of insurance proceeds in excess of $250,000 per occurrence and $500,000 for all occurrences resulting from damage or destruction of assets that have not been used to replace such damage or destruction or otherwise reinvested in like assets within 180 days after receipt of the proceeds (or committed to be so reinvested within that period with those proceeds actually invested within 360 days).

All such mandatory prepayments must be applied to reduce outstanding amounts under the revolving facility and permanently reduce the aggregate commitment amount, with pro rata reductions in scheduled commitment reductions. In addition, LBI Media is required to prepay borrowings under the senior credit facility with (i) 100% of the net cash proceeds from the incurrence of indebtedness under the indenture relating to LBI Media’s senior subordinated notes (with no reductions in commitments) and (ii) 100% of the net cash proceeds from the incurrence of indebtedness under the indenture relating to LBI Media Holdings’ senior discount notes (with no reductions in commitments).

Voluntary Prepayments. LBI Media may prepay borrowings under the senior credit facility and reduce commitments at any time at its option subject to a minimum amount of $500,000.

Securities and Guarantees. The loans under the senior credit facility are secured by a lien on substantially all of LBI Media’s tangible and intangible property, including accounts receivable, inventory, equipment, intellectual property and real property, and by a pledge of all of the shares of stock, partnership interests and limited liability company interests of LBI Media’s direct and indirect subsidiaries, of which LBI Media now owns or later acquires more than a 50% interest or of which LBI Media now or later controls.

LBI Media’s obligations under the senior credit facility are guaranteed by each of its subsidiaries and the guarantees are secured by substantially all of the assets of its subsidiaries.

Covenants. LBI Media’s senior credit facility contains customary covenants for a senior credit facility, including restrictions on LBI Media’s ability and its subsidiaries’ ability to:

•

declare dividends or redeem or repurchase capital stock;

•

prepay, redeem or purchase debt;

•

incur liens and engage in sale-leaseback transactions;

•

make loans and investments;

•

incur or guaranty additional indebtedness;

•

enter into capital leases;

•

sell or discount notes and accounts receivable;

•

amend or otherwise alter debt and other material agreements, including LBI Media Holdings’ senior discount notes, LBI Media’s senior subordinated notes and Empire Burbank’s loan described below;

•

change our name, identity, organizational structure or governing documents;

•

issue or transfer capital stock;

•

make capital expenditures;

•

enter into management agreements or certain restrictive agreements;

•

change our fiscal year;

•

engage in mergers, acquisitions and asset sales;

•

transact with affiliates; and

•

alter the business we conduct.

In addition, Liberman Broadcasting and LBI Media Holdings are prohibited from incurring additional debt with a current cash pay component without the consent of lenders with a majority of the revolving loan commitment.

LBI Media and its subsidiaries are allowed to make acquisitions in similar lines of business provided that (i) no default or event of default exists before or after the acquisition, (ii) the agent receives detailed financial statements showing pro forma compliance with the covenants of the senior credit facility, (iii) the lenders with a majority of the revolving line commitment approve any acquisition greater than $50 million, and (iv) certain other conditions are met.

The senior credit facility also contains financial covenants, including a maximum ratio of total debt (which excludes Empire Burbank’s debt, LBI Media’s senior subordinated notes, LBI Media Holdings’ senior discount notes, and Liberman Broadcasting’s subordinated notes) to EBITDA (as defined in the senior credit facility), a

maximum ratio of senior debt (total debt minus all debt expressly subordinated to this credit facility, including LBI Media’s senior subordinated notes) to EBITDA, a minimum ratio of EBITDA to cash interest expense, a minimum ratio of EBITDA to fixed charges and a maximum limit on annual capital expenditures.

Events of Default. Events of default under the senior credit facility include, but are not limited to:

•

failure to pay principal when due or interest within three business days after due;

•

material breach of any representation or warranty contained in the loan documents;

•

covenant defaults;

•

events of bankruptcy;

•

cross-defaults to other indebtedness, including defaults in LBI Media’s senior subordinated notes or LBI Media Holdings’ senior discount notes;

•

the existence of certain environmental and ERISA claims or liabilities;

•

loss or material impairment of material licenses;

•

a change of control of our company; and

•

the failure to find a qualified replacement for Lenard Liberman within 180 days after he no longer serves as an officer of, or has any oversight role with respect to, our company.

We plan to repay a portion of the outstanding debt under LBI Media’s senior credit facility with net proceeds from this offering.

10¹/8% Senior Subordinated Notes due 2012

On July 9, 2002, LBI Media issued $150,000,000 aggregate principal amount of 10¹/8% senior subordinated notes due 2012 at par. LBI Media’s senior subordinated notes mature on July 15, 2012. Interest on the senior subordinated notes is payable semi-annually in arrears, on January 15 and July 15 of each year. LBI Media’s obligations under its senior subordinated notes are guaranteed on a senior subordinated basis by each of LBI Media’s existing and future domestic restricted subsidiaries. The senior subordinated notes are general unsecured senior subordinated obligations of LBI Media, subordinated to all of LBI Media’s senior debt, including the senior credit facility.

The senior subordinated notes are redeemable in whole or in part on or after July 15, 2007 at specified redemption prices. At any time prior to July 15, 2005, LBI Media may also redeem up to 35% of the aggregate principal amount of its senior subordinated notes at a redemption price of 110.125% of the principal amount, plus accrued and unpaid interest, with all or a portion of the net cash proceeds of one or more underwritten public offerings of common stock of LBI Media or Liberman Broadcasting.

The senior subordinated notes contain covenants that require LBI Media and the subsidiary guarantors to comply with certain limitations on the incurrence of additional indebtedness, issuance of equity, payment of dividends and on certain other business activities. In addition, the indenture governing the senior subordinated notes restricts the ability of our subsidiaries to distribute cash to us. We plan to redeem a portion of the senior subordinated notes with net proceeds of this offering.

11% Senior Discount Notes due 2013

On October 10, 2003, LBI Media Holdings issued $68,428,000 aggregate principal amount at maturity of 11% senior discount notes due 2013 at 58.456% par value. The senior discount notes mature on October 15, 2013. No cash interest will accrue on the senior discount notes prior to October 15, 2008, and instead the accreted value of each senior discount note will increase until such date. The senior discount notes will begin to

accrue cash interest at a rate of 11% per annum commencing October 15, 2008, and LBI Media Holdings will pay cash interest thereafter semiannually on April 15 and October 15 of each year, commencing on April 15, 2009. LBI Media Holdings may, however, make a cash interest election on any interest payment date prior to October 15, 2008, in which case the outstanding principal amount at maturity of each senior discount note will, on such interest payment date, be reduced to the accreted value of such senior discount note as of such interest payment date, and cash interest (accruing at a rate of 11% per annum from the cash interest election date) will be payable with respect to such senior discount note on each interest payment date thereafter. The senior discount notes are senior unsecured obligations of LBI Media Holdings and are not guaranteed by Liberman Broadcasting or any of its subsidiaries. The senior discount notes are structurally subordinated to LBI Media’s senior credit facility and LBI Media’s senior subordinated notes.

The senior discount notes are redeemable in whole or in part on or after October 15, 2008 at specified redemption prices. At any time prior to October 15, 2006, LBI Media Holdings may also redeem up to 40% of the aggregate principal amount of its senior discount notes at a redemption price of 111.000% of the accreted value of the senior discount notes up to the redemption date (or if a cash interest election has been made, 111.000% of the principal amount at maturity of the senior discount notes, plus accrued and unpaid interest), with all or a portion of the net cash proceeds of one or more equity offerings of common stock of LBI Media Holdings or Liberman Broadcasting.

The senior discount notes contain covenants that require LBI Media Holdings to comply with certain limitations on the incurrence of additional indebtedness, issuance of equity, payment of dividends and on certain other business activities. In addition, the indenture governing the senior discount notes restricts the ability of its subsidiaries to distribute cash to LBI Media Holdings. We plan to redeem a portion of the senior discount notes with the net proceeds from this offering.

9% Subordinated Notes due 2014

In March 2001, Liberman Broadcasting issued $30.0 million aggregate principal amount of 9% subordinated notes to a group of investors led by Alta Communications, Inc. We intend to repay all of the outstanding 9% subordinated notes with the net proceeds of this offering.

Empire Burbank Loan

In July 1999, Empire Burbank Studios, Inc., our indirect, wholly owned subsidiary, issued an installment note to City National Bank in the aggregate principal amount of $3.25 million. As of September 30, 2003, approximately $2.7 million was outstanding on the installment note. In connection with the note, Empire Burbank Studios executed a mortgage in favor of City National Bank as security for the loan. The mortgage encumbers the property owned by Empire Burbank Studios at 1845 West Empire Avenue, Burbank, California 91504, which we use as our principal office and studio space. The note bears interest at the rate of 8.13% per annum and is payable in monthly principal and interest payments of approximately $32,000 through August 2014.

Pursuant to the senior credit facility, LBI Media agreed not to, and to cause Empire Burbank Studios not to, make any optional payment or prepayment under the Empire Burbank loan documents (except in connection with a refinancing permitted under the senior credit facility) and not to, and to cause Empire Burbank Studios not to, amend, modify or change the Empire Burbank loan documents in a manner that would materially and adversely affect the respective lenders of the senior credit facility and note holders, as the case may be, without their consent. LBI Media also agreed to cause Empire Burbank Studios not to engage in any business other than the ownership of the Burbank office and studio property and the lease, sublease and renting of the same property.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, shares of Class A common stock and shares of Class B common stock will be outstanding, assuming the exercise of warrants for shares of Class A common stock at the closing of this offering. As described below, no shares of our common stock currently outstanding (other than the shares being offered hereby by the selling stockholder) will be available for sale immediately after this offering due to certain contractual and securities law restrictions on resales.

Of the shares of Class A common stock outstanding after this offering, the shares offered for sale through the underwriters will be freely tradable without restriction or further registration under the Securities Act, except for any shares which may be acquired by our affiliates as that term is defined in Rule 144 under the Securities Act, which shares will be subject to the resale limitations of Rule 144. All of our outstanding shares of Class B common stock immediately after this offering, which may be converted into an equivalent number of shares of Class A common stock at any time at the option of the holders of Class B common stock, will be affiliate securities, as that term is defined in Rule 144, and may in the future be sold without restriction under the Securities Act to the extent permitted by Rule 144 or any applicable exemption under the Securities Act.

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned its, his or her shares of common stock for at least one year from the date such securities were acquired from us or an affiliate of ours would be entitled to sell within any three-month period a number of shares that does not exceed the greater of one percent of the then outstanding shares of our common stock (approximately shares immediately after this offering) and the average weekly trading volume of our common stock during the four calendar weeks preceding a sale by such person. Sales under Rule 144 are also subject to certain manner-of-sale provisions, notice requirements and the availability of current public information about us. Under Rule 144(k), however, a person who has held restricted securities for a minimum of two years from the later of the date such securities were acquired from us or an affiliate of ours and who is not, and for the three months prior to the sale of such restricted securities has not been, an affiliate of ours, is free to sell such shares of our common stock without regard to volume, manner-of-sale and the other limitations contained in Rule 144. None of our outstanding shares of Class B common stock are currently eligible for sale under Rule 144(k), because all such shares are currently held by affiliates of ours. The foregoing summary of Rule 144 is not intended to be a complete discussion thereof.

Commencing one year after the date of this prospectus, approximately outstanding affiliate securities will be eligible for sale under Rule 144 subject to applicable holding period, volume limitation, manner-of-sale and notice requirements set forth in applicable SEC rules and none of the affiliate securities will be saleable without regard to these restrictions under Rule 144(k).

Our executive officers and directors, who will collectively hold after this offering all of our outstanding shares of Class B common stock and no shares of Class A common stock, have agreed, subject to specified exceptions, that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our Class A common stock or Class B common stock or securities convertible into or exchangeable or exercisable for any shares of our Class A common stock or Class B common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our Class A common stock or Class B common stock, whether any of these transactions are to be settled by delivery of our Class A common stock or Class B common stock or other securities, in cash or otherwise or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement without, in each case, the prior written consent of Credit Suisse First Boston LLC and Deutsche Bank Securities Inc. for a period of 180 days after the date of this prospectus.

Prior to this offering, there has been no established market for our common stock, and no predictions can be made about the effect, if any, that market sales of shares of our Class A common stock or the availability of such shares for sale will have on the market price prevailing from time to time. Nevertheless, the actual sale of, or the perceived potential for the sale of, our Class A common stock in the public market may have an adverse effect on the market price for our Class A common stock and Class B common stock.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

General

The following is a summary of certain material United States federal income tax considerations related to the ownership and disposition of our Class A common stock that may be relevant to you if you acquire our Class A common stock pursuant to this offering. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations promulgated under the Code and administrative and judicial interpretations of the Code, all as of the date of this prospectus and all of which are subject to change, possibly with retroactive effect. The Internal Revenue Service is referred to as the “IRS” in this summary.

This summary discusses only the tax consequences to the initial investors who purchase our Class A common stock pursuant to the initial offering and does not discuss the tax consequences applicable to subsequent purchasers of our Class A common stock. This summary deals only with Class A common stock held as capital assets within the meaning of Section 1221 of the Code. It does not discuss all of the tax considerations that may be relevant to holders of our Class A common stock in light of their particular circumstances or to holders of Class A common stock subject to special rules, such as financial institutions, regulated investment companies, holders subject to the alternative minimum tax, insurance companies, pension funds, tax-exempt organizations, expatriates, partnerships or pass through entities, dealers in securities or currencies, traders who elect to mark to market their securities or persons holding the Class A common stock as part of a hedging or constructive sale transaction, “straddle,” conversion transaction, or other integrated transaction, or foreign currency effects on holders of the Class A common stock whose functional currency is not the United States dollar. We have not requested a ruling from the IRS on the tax consequences of owning our Class A common stock. As a result, the IRS could disagree with portions of this discussion. Persons considering the purchase of our Class A common stock should consult with their own tax advisors about the application of the United States federal income tax laws to their particular situations as well as any tax considerations under other United States federal tax laws (such as estate and gift tax laws), or the laws of any state, local or foreign jurisdiction.

As used in this prospectus, the term “U.S. Holder” means a beneficial owner of Class A common stock that is, for United States federal income tax purposes:

•

a citizen or individual resident of the United States;

•

a corporation, or other entity treated as a corporation, created in or under the laws of the United States or of any political subdivision thereof;

•

an estate the income of which is subject to United States federal income taxation regardless of its source; or

•

a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or a trust that has a valid election in effect under applicable United States Treasury regulations to be treated as a U.S. person.

As used in this prospectus, the term “Non-U.S. Holder” means a beneficial owner of Class A common stock that is an individual, corporation, trust or estate that is not a U.S. Holder.

If an entity treated as a partnership for U.S. federal income tax purposes holds shares of Class A common stock, the tax treatment of a partner will generally depend on the status of the partner and upon the activity of the partnership. Accordingly, partnerships which hold shares of Class A common stock, and partners in such partnerships, should consult their tax advisors.

Distributions to U.S. Holders

If distributions are paid on the shares of our Class A common stock, these distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, and will constitute a tax-free return of capital that is applied against your tax basis in the Class A common stock to the extent these distributions exceed those earnings and profits. Distributions in excess of our current and accumulated earnings and profits and your tax basis in the Class A common stock will be treated as a gain from the sale or exchange of the Class A common stock, the treatment of which is discussed below. Currently, certain U.S. Holders who are individuals are subject to a maximum tax rate on dividends equal to 15%, which corresponds to the maximum tax rate for long-term capital gains. However, under current legislation for tax years beginning after December 31, 2008, dividends will be taxed at the same rate as other items of ordinary income.

Distributions to Non-U.S. Holders

Dividends paid to a Non-U.S. Holder that are not effectively connected with the conduct of a U.S. trade or business of the Non-U.S. Holder generally will be subject to U.S. federal withholding tax at a 30% rate or, if an income tax treaty applies and certain certification requirements are satisfied, a lower rate specified by the applicable income tax treaty. In order to receive a reduced income tax treaty rate, a Non-U.S. Holder must provide us with an IRS Form W-8BEN or other appropriate version of IRS Form W-8 certifying qualification for the reduced rate. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

Withholding generally is imposed on the gross amount of a distribution, regardless of whether we have sufficient earnings and profits to cause the distribution to be a dividend for U.S. federal income tax purposes. However, we may elect to withhold on less than the gross amount of the distribution if we determine that the distribution is not paid out of our current or accumulated earnings and profits, based on our reasonable estimates.

A Non-U.S. Holder eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty may obtain a refund of any excess amounts withheld by filing with the IRS an appropriate claim for a refund together with the required information.

Dividends that are effectively connected with a Non-U.S. Holder’s conduct of a trade or business within the United States and, if an income tax treaty applies, attributable to a Non-U.S. Holder’s U.S. permanent establishment, are exempt from U.S. federal withholding tax if the Non-U.S. Holder furnishes to us or our paying agent IRS Form W-8EC1 and other applicable requirements are met. However, dividends exempt from U.S. federal withholding tax because they are “effectively connected” or attributable to a U.S. permanent establishment under an applicable income tax treaty are subject to U.S. federal income tax at the rates applicable to U.S. citizens and residents. In addition, any such effectively connected dividends received by a foreign corporation may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate specified by an applicable income tax treaty.

Gain on Disposition of Class A Common Stock by U.S. Holders

A U.S. Holder will recognize gain or loss on the sale or exchange of our Class A common stock to the extent of the difference between the amount realized on such sale or exchange and the holder’s adjusted tax basis in such shares. Such gain or loss generally will constitute long-term capital gain or loss if the holder has held such shares for more than one year. Currently, individual U.S. Holders are subject to a maximum tax rate of 15% on long-term capital gain.

Gain on Disposition of Class A Common Stock by Non-U.S. Holders

A Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to gain recognized on a sale or other disposition of our Class A common stock unless one of the following applies:

•

the gain is effectively connected with a Non-U.S. Holder’s conduct of a trade or business within the United States and, if an income tax treaty applies, the gain is attributable to a Non-U.S. Holder’s U.S. permanent establishment. In such case, the Non-U.S. Holder will, unless an applicable income tax treaty provides otherwise, generally be taxed on its net gain derived from the sale at regular graduated U.S. federal income tax rates, and in the case of a foreign corporation, may also be subject to the branch profits tax described above; or

•

a Non-U.S. Holder who is an individual holds our Class A common stock as a capital asset (generally, an asset held for investment purposes), is present in the United States for 183 or more days in the taxable year of the sale or other disposition, and certain other conditions are met. In such a case, the Non-U.S. Holder will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by certain U.S. source capital losses (even though the Non-U.S. Holder is not considered a resident of the U.S.); or

•

we are or have been a “United States real property holding corporation” (a “USRPHC”) for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of the sale or other disposition and the period such Non-U.S. Holder held our Class A common stock (the shorter period hereinafter referred to as the “lookback period”); provided that if our Class A common stock is regularly traded on an established securities market, this rule will generally not cause any gain to be taxable unless the Non-U.S. Holder actually or constructively holds more than 5% of our Class A common stock at some time during the lookback period. We do not believe that we are a USRPHC and do not expect to become one in the future. However, we could become a USRPHC as a result of future changes in assets or operations.

Information Reporting and Backup Withholding Tax

Under certain circumstances, United States Treasury regulations may require information reporting and backup withholding on certain payments on Class A common stock.

A U.S. Holder may be subject to information reporting and backup withholding (currently at a rate of 28%) with respect to dividends on, and the proceeds from the sale or redemption of, Class A common stock, unless such holder (a) is an entity that is exempt from withholding (including, among others, corporations and certain tax-exempt organizations) and when required, demonstrates this fact, or (b) provides the payor with its correct taxpayer identification number (“TIN”), which, for an individual, is ordinarily his or her social security number, and otherwise complies with applicable requirements of the backup withholding rules.

Dividends on Class A common stock paid to a Non-U.S. Holder will generally be exempt from backup withholding, provided the Non-U.S. Holder meets applicable certification requirements or otherwise establishes an exemption. We must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid to that holder and the U.S. federal withholding tax withheld, if any, with respect to those dividends. Pursuant to applicable income tax treaties or other agreements, the IRS may make these reports available to the tax authorities in the country in which the Non-U.S. Holder resides.

Under United States Treasury regulations, payments on the sale or redemption of our Class A common stock effected through a foreign office of a broker to its customer generally are not subject to information reporting or backup withholding. However, if the broker is a U.S. person, a controlled foreign corporation, a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period, a foreign partnership with significant United States ownership, or a United States branch of a foreign bank or insurance company, then information reporting (but not backup withholding) will be

required, unless the broker has in its records documentary evidence that the beneficial owner of the payment is not a U.S. person or is otherwise entitled to an exemption, and other applicable certification requirements are met. Information reporting and backup withholding generally will apply to sale or redemption payments effected at a United States office of any United States or foreign broker, unless the broker has in its records documentary evidence that the beneficial owner of the payment is not a U.S. person or is otherwise entitled to an exemption, and other applicable certification requirements are met.

Backup withholding does not represent an additional income tax. Any amounts withheld from a payment to a holder under the backup withholding rules will be allowed as a credit against the holder’s United States federal income tax liability and may entitle the holder to a refund, provided that the required information or returns are timely furnished by the holder to the IRS.

UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated , 2004, we and the selling stockholder have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston LLC and Deutsche Bank Securities Inc. are acting as representatives, the following respective numbers of shares of Class A common stock:


Underwriter		Number of Shares
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
UBS Securities LLC

Total

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of Class A common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

We have granted to the underwriters a 30-day option to purchase up to additional shares from us at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of Class A common stock.

The underwriters propose to offer the shares of Class A common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. The underwriters and selling group members may allow a discount of $ per share on sales to other broker/dealers. After the initial public offering, the representatives may change the public offering price and concession and discount to broker/dealers.

The following table summarizes the compensation and estimated expenses we and the selling stockholder will pay:

Per Share

Total

Without
Over-allotment

With
Over-allotment

Without
Over-allotment

With
Over-allotment

Underwriting Discounts and Commissions paid by us

Expenses payable by us

Underwriting Discounts and Commissions paid by selling stockholder

Expenses payable by the selling stockholder

The representatives have informed us that the underwriters do not expect sales to accounts over which the underwriters have discretionary authority to exceed 5% of the shares of Class A common stock being offered.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any shares of our Class A common stock or Class B common stock or securities convertible into or exchangeable or exercisable for any shares of our Class A common stock or Class B common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus, subject to certain exceptions.

Our officers and directors and all of our stockholders have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our Class A common stock or Class B common stock or securities convertible into or exchangeable or exercisable for any shares of our Class A common stock or Class B common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our Class A common stock or Class B common stock, whether any of these transactions are to be settled by delivery of our Class A common stock or Class B common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston LLC for a period of 180 days after the date of this prospectus, subject to certain exceptions.

We and the selling stockholder have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We will apply to list the shares of Class A common stock on The NASDAQ National Market.

In the ordinary course of their business, some of the underwriters and their affiliates have from time to time provided, and may in the future provide, investment banking, financial advisory and other services to us and our affiliates for which they have received, or expect to receive, customary fees. In addition, affiliates of Credit Suisse First Boston LLC and UBS Securities LLC are lenders under LBI Media’s senior credit facility and will receive a portion of the net proceeds of the offering upon repayment of a portion of the senior credit facility. See “Description of Indebtedness—Senior Credit Facility.” Furthermore, in the ordinary course of business, Credit Suisse First Boston LLC holds a portion of LBI Media’s senior subordinated notes and will receive a portion of the net proceeds of the offering upon repayment of a portion of the senior subordinated notes. See “Description of Indebtedness—10¹/8% Senior Subordinated Notes due 2012.”

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions, penalty bids and passive market making in accordance with Regulation M under the Securities Exchange Act of 1934.

•

Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

•

Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.

•

Syndicate covering transactions involve purchases of the Class A common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

•

Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the Class A common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

•

In passive market making, market makers in the Class A common stock who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchases of our Class A common stock until the time, if any, at which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our Class A common stock or preventing or retarding a decline in the market price of the Class A common stock. As a result the price of our Class A common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The NASDAQ National Market and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

The distribution of the Class A common stock in Canada is being made only on a private placement basis exempt from the requirement that we and the selling stockholder prepare and file a prospectus with the securities regulatory authorities in each province where trades of Class A common stock are made. Any resale of the Class A common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the Class A common stock.

Representations of Purchasers

By purchasing Class A common stock in Canada and accepting a purchase confirmation a purchaser is representing to us, the selling stockholder and the dealer from whom the purchase confirmation is received that

•

the purchaser is entitled under applicable provincial securities laws to purchase the Class A common stock without the benefit of a prospectus qualified under those securities laws,

•

where required by law, that the purchaser is purchasing as principal and not as agent, and

•

the purchaser has reviewed the text above under “Resale Restrictions.”

Rights of Action—Ontario Purchasers Only

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares, for rescission against us and the selling stockholder in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us or the selling stockholder. In no case will the amount recoverable in any action exceed the price at which the shares were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we and the selling stockholder will have no liability. In the case of an action for damages, we and the selling stockholder will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein and the selling stockholder may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment

Canadian purchasers of Class A common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the Class A common stock in their particular circumstances and about the eligibility of the Class A common stock for investment by the purchaser under relevant Canadian legislation.

LEGAL MATTERS

The validity of the shares of our Class A common stock offered by this prospectus will be passed upon for us and the selling stockholder by O’Melveny & Myers LLP and for the underwriters by Latham & Watkins LLP, Los Angeles, California.

EXPERTS

The consolidated financial statements of LBI Holdings I, Inc. at December 31, 2002 and 2001, and for each of the three years in the period ended December 31, 2002, and the balance sheet of Liberman Broadcasting Corporation at February 10, 2004, appearing in this Prospectus and Registration Statement, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act to register the shares offered by this prospectus. The term “registration statement” means the original registration statement and any and all amendments thereto, including the schedules and exhibits to the original registration statement or any amendment. This prospectus is part of that registration statement. This prospectus does not contain all of the information set forth in the registration statement or the exhibits to the registration statement. For further information with respect to us and the shares we are offering pursuant this prospectus, you should refer to the registration statement and its exhibits and schedules. Statements contained in this prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete, and you should refer to the copy of that contract or other documents filed as an exhibit to the registration statement. You may read or obtain a copy of the registration statement at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room and the SEC’s copy charges by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains registration statements, reports, proxy, information statements and other information regarding registrants that file electronically with the SEC. The address of the website is http://www.sec.gov.

Liberman Broadcasting is not yet subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, as amended. Upon completion of this offering, Liberman Broadcasting will become subject to such information and periodic reporting requirements.

We intend to furnish holders of the shares of Class A common stock offered in this offering with annual reports containing audited consolidated financial statements together with a report by our independent accountants.

INDEX TO FINANCIAL STATEMENTS


		Page
LBI Holdings I, Inc.
Report of Independent Auditors		F-2

Consolidated Balance Sheets as of December 31, 2001 and 2002 and September 30, 2003 (unaudited)		F-3

Consolidated Statements of Operations for the Years Ended December 31, 2000, 2001 and 2002 and the Nine Months Ended September 30, 2002 and 2003 (unaudited)		F-4

Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2000, 2001 and 2002 and the Nine Months Ended September 30, 2003 (unaudited)		F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 2001 and 2002 and the Nine Months Ended September 30, 2002 and 2003 (unaudited)		F-6

Notes to Consolidated Financial Statements		F-7

Liberman Broadcasting Corporation
Report of Independent Auditors		F-28

Balance Sheet as of February 10, 2004		F-29

F-1

REPORT OF INDEPENDENT AUDITORS

Board of Directors

LBI Holdings I, Inc.

We have audited the accompanying consolidated balance sheets of LBI Holdings I, Inc. as of December 31, 2001 and 2002, and the related consolidated statements of operations, stockholders’ deficiency, and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of LBI Holdings I, Inc. at December 31, 2001 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

As more fully described in Note 1, the Company changed its method of accounting for indefinite-lived intangible assets as of January 1, 2002.

Los Angeles, California

March 14, 2003, except for Notes 12, 13, 14 and 15,

as to which the date is February 9, 2004

F-2

LBI HOLDINGS I, INC.

CONSOLIDATED BALANCE SHEETS


	As of December 31,						As of September 30, 2003
	2001			2002			As of September 30, 2003
							(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,131,349		$	1,396,636		$	269,120
Short-term investments		332,810			135,110			142,330
Accounts receivable (less allowance for doubtful accounts of $161,030, $627,738 and $943,086 in 2001, 2002 and 2003, respectively)		7,147,148			9,986,636			13,426,452
Current portion of program rights, net		895,165			1,054,655			1,168,109
Amounts due from related parties		819,133			730,761			718,120
Current portion of employee advances		46,825			58,632			65,099
Prepaid expenses and other current assets		1,100,595			1,201,697			725,810

Total current assets		11,473,025			14,564,127			16,515,040

Property and equipment, net		46,817,209			49,044,267			53,907,537
Program rights, excluding current portion		1,659,560			1,817,659			1,722,089
Deferred financing costs, net		10,602,736			14,835,992			15,300,350
Broadcast licenses, net		181,293,995			198,323,152			239,393,860
Acquisition costs		—			475,937			379,870
Notes receivable from related parties		389,685			2,455,666			2,501,609
Employee advances, excluding current portion		156,975			656,265			750,299
Escrow funds		—			2,500,000			1,500,000
Other assets		—			—			1,071,168

Total assets	$	252,393,185		$	284,673,065		$	333,041,822

Liabilities and stockholders’ deficiency
Current liabilities:
Accounts payable and accrued expenses	$	1,773,911		$	1,768,958		$	2,526,134
Accrued interest		2,347,376			8,093,827			3,867,967
Program rights payable		—			58,324			42,324
Amounts due to related parties		99,872			133,695			206,475
Notes payable to related parties		1,861,607			—			—
Current portion of long-term debt		10,292,061			154,093			159,772

Total current liabilities		16,374,827			10,208,897			6,802,672

Long-term debt, net of current portion		222,765,265			262,509,077			302,944,110
Accrued interest		2,144,997			7,131,630			8,664,455
Deferred compensation		2,638,000			6,280,000			7,737,000
Redeemable stock purchase warrants		19,600,000			27,500,000			28,500,000
Deferred state income taxes		232,716			263,916			313,516
Other liabilities		—			95,095			171,284

Commitments and contingencies

Stockholders’ deficiency:
Common stock, $0.01 par value:
Authorized shares—1,000
Issued and outstanding shares—200		2			2			2
Additional paid-in capital		49,998			49,998			49,998
Retained deficit		(11,453,414	)		(29,372,240	)		(22,155,125	)
Accumulated other comprehensive income		40,794			6,690			13,910

Total stockholders’ deficiency		(11,362,620	)		(29,315,550	)		(22,091,215	)

Total liabilities and stockholders’ deficiency	$	252,393,185		$	284,673,065		$	333,041,822

See accompanying notes.

F-3

LBI HOLDINGS I, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended December 31,									Nine Months Ended September 30,
	2000			2001			2002			2002			2003
										(unaudited)
Revenues	$	56,128,789		$	66,530,464		$	79,867,254		$	58,413,543		$	70,801,373
Less agency commissions		5,576,650			6,873,360			8,871,451			6,472,573			8,899,580

Net revenues		50,552,139			59,657,104			70,995,803			51,940,970			61,901,793
Operating expenses:
Program and technical, exclusive of noncash employee compensation of $94,000, $216,000, $968,000, $572,000 and $330,000 for the years ended December 31, 2000, 2001 and 2002, and the nine months ended September 30, 2002 and 2003, respectively, and depreciation, amortization and impairment of broadcast license shown below		6,387,961			8,623,718			10,379,110			7,385,091			9,413,140
Promotional, exclusive of depreciation, amortization and impairment of broadcast license shown below		2,476,827			2,526,973			2,042,698			1,206,749			1,204,973
Selling, general and administrative, exclusive of noncash employee compensation of $1,146,000, $1,182,000, $2,674,000, $2,354,000 and $1,127,000 for the years ended December 31, 2000, 2001 and 2002, and the nine months ended September 30, 2002 and 2003, respectively, and depreciation, amortization and impairment of broadcast license shown below		13,685,002			15,592,732			21,359,841			15,104,154			18,698,346
Noncash employee compensation		1,240,000			1,398,000			3,642,000			2,926,000			1,457,000
Depreciation		1,674,515			2,347,165			3,131,101			2,339,089			2,565,232
Amortization		2,962,799			6,326,025			—			—			—
Impairment of broadcast license		—			—			1,750,000			1,750,000			—

Total operating expenses		28,427,104			36,814,613			42,304,750			30,711,083			33,338,691

Operating income		22,125,035			22,842,491			28,691,053			21,229,887			28,563,102
Interest expense		(18,132,988	)		(30,010,979	)		(38,211,860	)		(28,435,199	)		(21,354,953	)
Interest and other income		240,238			473,634			137,750			96,135			72,966
Loss on sale of property and equipment		—			—			(388,169	)		(388,169	)		(4,000	)

Income before income taxes and cumulative effect of accounting change		4,232,285			(6,694,854	)		(9,771,226	)		(7,497,346	)		7,277,115
Provision for income taxes		74,274			80,583			41,600			31,200			60,000

Income before cumulative effect of accounting change		4,158,011			(6,775,437	)		(9,812,826	)		(7,528,546	)		7,217,115
Cumulative effect of accounting change		—			—			(8,106,000	)		(8,106,000	)		—

Net income (loss)	$	4,158,011		$	(6,775,437	)	$	(17,918,826	)	$	(15,634,546	)	$	7,217,115

Basic earnings (loss) per share:
Income (loss) before cumulative effect of accounting change	$	20,790		$	(33,877	)	$	(49,064	)	$	(37,643	)	$	36,086
Cumulative effect of accounting change		—			—			(40,530	)		(40,530	)		—

Net income (loss)	$	20,790		$	(33,877	)	$	(89,594	)	$	(78,173	)	$	36,086

Weighted average shares outstanding		200			200			200			200			200

Diluted earnings (loss) per share:
Income (loss) before cumulative effect of accounting change	$	20,790		$	(33,877	)	$	(49,064	)	$	(37,643	)	$	33,725
Cumulative effect of accounting change		—			—			(40,530	)		(40,530	)		—

Net income (loss)	$	20,790		$	(33,877	)	$	(89,594	)	$	(78,173	)	$	33,725

Weighted average shares outstanding		200			200			200			200			214

Unaudited pro forma income statement data:
Income (loss) before taxes and cumulative effect of accounting change	$	4,232,285		$	(6,694,854	)	$	(9,771,226	)	$	(7,497,346	)	$	7,277,115
Pro forma provision for (benefit from) income taxes (see Note 16)		704,923			726,754			(82,339	)		(63,178	)		2,882,406

Income (loss) before cumulative effect of accounting change		3,527,362			(7,421,608	)		(9,688,887	)		(7,434,168	)		4,394,709
Cumulative effect of accounting change, net of tax		—			—			(5,349,960	)		(5,349,960	)		—

Pro forma net income (loss)	$	3,527,362		$	(7,421,608	)	$	(15,038,847	)	$	(12,784,128	)	$	4,394,709

Pro forma net income (loss) per share—basic		17,637			(37,108	)		(75,194	)		(63,921	)		21,974
Pro forma net income (loss) per share—diluted		17,637			(37,108	)		(75,194	)		(63,921	)		20,536

See accompanying notes.

F-4

LBI HOLDINGS I, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY


	Common Stock			Additional Paid-in Capital		Retained Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Deficiency
	Number of Shares	Amount		Additional Paid-in Capital		Retained Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Deficiency
Balances at December 31, 1999	200	$	2	$	49,998	$	(8,796,988	)	$	78,815		$	(8,668,173	)
Net income							4,158,011						4,158,011
Unrealized loss on investment in marketable securities										(150,495	)		(150,495	)

Comprehensive income													4,007,516
Distributions to stockholders							(39,000	)					(39,000	)

Balances at December 31, 2000	200		2		49,998		(4,677,977	)		(71,680	)		(4,699,657	)
Net loss							(6,775,437	)					(6,775,437	)
Unrealized gain on investment in marketable securities										112,474			112,474

Comprehensive loss													(6,662,963	)

Balances at December 31, 2001	200		2		49,998		(11,453,414	)		40,794			(11,362,620	)
Net loss							(17,918,826	)					(17,918,826	)
Unrealized gain on investment in marketable securities										18,872			18,872
Adjustment to unrealized gain due to sale of investment in marketable securities										(52,976	)		(52,976	)

Comprehensive loss													(17,952,930	)

Balances at December 31, 2002	200		2		49,998		(29,372,240	)		6,690			(29,315,550	)
Net income (unaudited)							7,217,115						7,217,115
Unrealized gain on investment in marketable securities (unaudited)										7,220			7,220

Comprehensive income (unaudited)													7,224,335

Balances at September 30, 2003 (unaudited)	200	$	2	$	49,998	$	(22,155,125	)	$	13,910		$	(22,091,215	)

See accompanying notes.

F-5

LBI HOLDINGS I, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31,									Nine Months Ended September 30,
	2000			2001			2002			2002			2003
										(unaudited)
Operating activities
Net income (loss)	$	4,158,011		$	(6,775,437	)	$	(17,918,826	)	$	(15,634,546	)	$	7,217,115
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Cumulative effect of accounting change		—			—			8,106,000			8,106,000			—
Depreciation and amortization		4,637,314			8,673,190			3,131,101			2,339,089			2,565,232
Impairment of broadcast license		—			—			1,750,000			1,750,000			—
Amortization of deferred financing costs		501,823			3,825,383			8,191,718			7,811,134			1,216,871
Accretion on subordinated notes		—			2,555,667			940,396			1,912,060			696,811
Noncash employee compensation		1,240,000			1,398,000			3,642,000			2,926,000			1,457,000
Gain on sale of investments		—			—			(52,976	)		(52,976	)		—
Loss on sale of property and equipment		—			—			388,169			388,169			4,000
Provision for doubtful accounts		96,000			170,221			861,660			229,779			900,240
Changes in operating assets and liabilities:
Accounts receivable		(2,141,818	)		(1,901,207	)		(3,701,148	)		(2,185,542	)		(4,340,056	)
Program rights		(101,969	)		314,310			(317,589	)		(919,285	)		(17,884	)
Amounts due from related parties		487,114			(456,179	)		88,372			(319,972	)		8,209
Prepaid expenses and other current assets		70,303			(655,844	)		(101,102	)		322,259			475,887
Employee advances		(10,669	)		(123,904	)		(511,097	)		(96,622	)		(100,501	)
Accounts payable and accrued expenses		446,249			(133,114	)		(4,947	)		(428,235	)		757,176
Accrued interest		356,205			(321,270	)		10,733,079			1,467,588			(2,693,035	)
Program rights payable		(208,938	)		(56,187	)		58,324			—			(16,000	)
Amounts due to related parties		61,183			(15,206	)		33,823			52,643			72,780
Deferred state income tax payable		—			132,716			31,200			20,800			49,600
Other assets and liabilities		—			—			57,109			51,020			(555,804	)

Net cash provided by operating activities		9,590,808			6,631,139			15,405,266			7,739,363			7,697,641

Investing activities
Purchase of property and equipment		(4,044,227	)		(13,953,528	)		(5,004,892	)		(3,488,632	)		(6,340,598	)
Acquisition costs		(704,606	)		—			(475,937	)		(1,154,058	)		(379,870	)
Purchase of investments		(258,160	)		—			—			—			—
Acquisition of television and radio station property and equipment		—			(6,212,072	)		(2,181,161	)		—			(1,075,417	)
Acquisition of broadcast licenses		—			(88,511,787	)		(26,885,157	)		(2,228	)		(38,094,771	)
Amounts deposited in escrow for the acquisition of broadcast licenses		(8,500,000	)		—			(2,500,000	)		(157,500	)		(1,500,000	)
Loans to related parties		—			—			(2,027,995	)		(2,027,995	)		—
Repayment of note receivable due from related party		—			—			—			—			4,432
Deposits made towards capital expenditure projects		—			—			—			—			(514,105	)
Proceeds from sale of investments		—			—			216,592			216,592			—
Proceeds from sale of property and equipment		—			—			1,439,705			—			12,500

Net cash used in investing activities		(13,506,993	)		(108,677,387	)		(37,418,845	)		(6,613,821	)		(47,887,829	)

Financing activities
Proceeds from issuance of long-term debt and bank borrowings, net of financing costs		5,632,157			246,064,151			250,434,147			227,218,955			47,724,274
Payments on notes payable to related parties		—			(2,000,000	)		(1,861,607	)		(1,861,607	)		—
Payments on long-term debt		(5,807,942	)		(141,372,109	)		(226,293,674	)		(222,757,767	)		(8,661,602	)
Distributions to stockholders		(39,000	)		—			—			—			—

Net cash (used in) provided by financing activities		(214,785	)		102,692,042			22,278,866			2,599,581			39,062,672

Net (decrease) increase in cash and cash equivalents		(4,130,970	)		645,794			265,287			3,725,123			(1,127,516	)
Cash and cash equivalents at beginning of period		4,616,525			485,555			1,131,349			1,131,349			1,396,636

Cash and cash equivalents at end of period	$	485,555		$	1,131,349		$	1,396,636		$	4,856,472		$	269,120

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	15,975,609		$	19,302,035		$	15,612,970		$	9,880,361		$	8,911,193

TITLE OF EACH CLASS OF

SECURITIES TO BE REGISTERED

PROPOSED MAXIMUM

AGGREGATE

OFFERING PRICE (1)(2)

AMOUNT OF

REGISTRATION

FEE

Class A Common Stock, $0.01 par value

LIBERMAN BROADCASTING CORP S-1