UGC Reports Fourth Quarter and Full Year Results

UGC Reports Fourth Quarter and Full Year Results

All 2004 Guidance Targets Achieved or Exceeded

DENVER, March 14 /PRNewswire-FirstCall/ -- UnitedGlobalCom, Inc. ("UGC")(1) (NASDAQ:UCOMA), today announces operating and financial results for the fourth quarter and year-ended December 31, 2004.

Highlights for the fiscal year include:

* Revenue growth of 34% to $2.53 billion

* Operating Cash Flow growth of 40% to $879 million(2)

* Net RGU additions of 552,800 on an organic basis(3)

* Net loss of $(382) million compared to net income of $2.0 billion(4)

* Free Cash Flow growth of 272% to $219 million(5)

Mike Fries, President and Chief Executive Officer of UGC said, "Our 2004 results were excellent across the board, as we achieved or exceeded all of our public guidance targets. Organic subscriber growth was robust as we added 552,800 RGUs for the full year, excluding acquisitions, compared to guidance of 500,000. This solid performance was driven by record fourth quarter net additions of over 250,000 RGUs. At year-end 2004, we had over 11.6 million consolidated RGUs and growth remains strong in early 2005. During the first two months of the year, we've added over 100,000 RGUs."

"On a reported basis, revenue and Operating Cash Flow (OCF) in fiscal 2004 increased 34% and 40%, respectively, in part due to favorable foreign currency (FX) movements. Adjusting for FX changes and excluding acquisitions, our full year organic revenue growth was 10.5%, modestly ahead of our 10% guidance target. Due to the strong RGU growth we generated toward the end of the year, our fourth quarter organic revenue growth accelerated significantly, increasing 4.0% on a sequential basis from the third quarter. Our full year OCF growth was 20% on an organic basis, consistent with our guidance on that metric and despite the additional costs associated with our better than expected subscriber additions. And, excluding approximately $22 million of fourth quarter costs associated with the termination and settlement of a Dutch programming contract (MovieCo), our organic cash flow growth rate for the full year would have been 24%."

"We made significant progress on a number of our strategic initiatives during the fourth quarter, including the launch of our digital phone (VoIP) services in The Netherlands and Hungary, as well as successful trials of 30 Mbps broadband Internet speeds and "off-net" voice and data services outside of our cable footprint. We have added over 55,000 digital phone subscribers since October of last year, and this month we expect to begin the commercial launch of our digital phone products across France. In addition, we are planning upcoming launches of digital phone services in Austria, Norway, Sweden, Belgium, Poland and Czech Republic and, in total, we expect to have 5.5 million VoIP homes serviceable this Summer."

"Consistent with our strategy of disciplined footprint expansion, we completed several acquisitions in the quarter, including Irish pay-TV provider Chorus, an indirect 14% interest in Belgian cable company Telenet, and in February 2005, we closed the acquisition of Telemach, the largest cable company in Slovenia. We applied the same disciplined approach to the purchase of ZoneVision, a global programming company with a significant presence in Eastern Europe."

"We continue to have strong access to the senior secured and institutional debt markets, as evidenced by the latest partial refinancing of our European credit facility. Last week, we closed three new tranches totaling EUR 3.0 billion, primarily to refinance existing debt. The total facility size has increased from EUR 3.5 billion to EUR 3.8 billion, of which EUR 2.8 billion was outstanding at close. We have full access to our increased revolver capacity of EUR 1.0 billion, which can be used for financing potential acquisitions and general corporate purposes. The average maturity of the loan has been extended to approximately 6 years, with no amortization payments required until 2010. In addition, the average credit spread on the facility has been reduced to 262 basis points over Euribor."

"Looking ahead to fiscal 2005, we announced today aggressive guidance targets that we believe position UGC as the fastest growing public cable company in terms of Operating Cash Flow. Including a full year of Noos' results in France and, together with other announced acquisitions, we expect to grow revenue and OCF by 20% on a consolidated basis in 2005. In addition, driven by data and digital phone launches, we expect to add at least 800,000 net new RGUs, an improvement of 34% compared to last year."

Recent Events

On March 10, 2005, the Chilean Supreme Court dismissed the appeal challenging the prior regulatory approval of the combination of UGC's wholly-owned Chilean subsidiary, VTR GlobalCom S.A. ("VTR"), with Metropolis Intercom S.A. ("Metropolis"). The combination of VTR and Metropolis had been previously approved, subject to certain conditions, by the Chilean anti-trust tribunal in October 2004.

On January 18, 2005, Liberty Media International, Inc. (LMI) (NASDAQ:LBTYA)(NASDAQ:LBTYB) and UGC announced that the two companies reached an agreement to combine the businesses under a single entity to be named Liberty Global, Inc. Liberty Global will be one of the largest owners and operators of broadband communications systems outside the United States with ownership interests in companies serving more than 14 million RGUs in 17 countries.

Fiscal 2004 Results

Our significant and consolidated operating subsidiaries in Europe include UPC Broadband -- our cable television and broadband division with operations in 13 countries, and chellomedia -- our media and programming division, which also includes our Competitive Local Exchange Carrier (CLEC), Priority Telecom. In Latin America, our primary operation is VTR, our cable television and broadband provider in Chile. Please refer to the end of this press release for additional segment financial information.

Revenue

Revenue for the year ended December 31, 2004 was $2.53 billion, an increase of 34% or $634 million compared to the same period in 2003. Excluding the impact of foreign exchange rates and the acquisitions of Noos and Chorus, organic year-over-year revenue growth was approximately 10.5% for fiscal 2004 as a result of higher average monthly revenue per subscriber (ARPU) and RGU growth. Please refer to the table on page 11 for additional information.

Total European revenue increased 34% to $2.2 billion for the year ended December 31, 2004, primarily due to a 35% increase in our core triple play operation, UPC Broadband. Revenue in Western Europe increased 18%, or $215 million (excluding Noos and Chorus) compared to the same period in 2003, while revenue in Central and Eastern Europe increased 30% or $106 million. In Chile, revenue at VTR increased 31% or $70 million for the year ended December 31, 2004 compared to last year.

Revenue for the three months ended December 31, 2004 was $775 million, an increase of 50% compared to the same period last year. On a sequential basis from September 30, 2004, revenue increased 18% or approximately 71% on an annualized basis. On an organic basis our sequential revenue growth in the fourth quarter was 4.0%. This represents a meaningful acceleration of our revenue growth compared to our previous results this year driven primarily by faster customer growth resulting from aggressive new product launches.

Average monthly revenue (ARPU) per RGU, excluding acquisitions, for the three months ended December 31, 2004 was $20.67, an increase of 16.6% compared to the same period in 2003. Excluding foreign currency movements, the organic increase in ARPU per RGU was approximately 8% year-over-year. ARPU per customer relationship was $25.62 for the three months ended December 31, 2004, a sequential increase of 10% from $23.30 in third quarter 2004. Excluding foreign currency movements, the organic increase in ARPU per customer relationships was 4.3% on a sequential basis.

Operating Cash Flow

Operating Cash Flow (OCF) for the year ended December 31, 2004 was $879 million, an increase of 40% compared to the prior year. Excluding the impact of foreign exchange rate fluctuations and acquisitions, our organic OCF growth was approximately 20% for the period, in line with our guidance of 20% for the full year. Excluding approximately $22 million of fourth quarter charges associated with the termination and settlement of a Dutch programming contract, our organic cash flow growth rate for the full year would have been 24%. Please refer to the table on page 12 for additional information.

Total European OCF increased 36% to $778 million for the year ended December 31, 2004, primarily due to a 35% increase at UPC Broadband. OCF in Western Europe increased 39% to $626 million (including Noos and Chorus), while OCF in Central and Eastern Europe increased 39% to $182 million. Excluding Noos and Chorus, OCF in Western Europe increased 27% to $573 million. In Chile, 2004 OCF increased 55% to $109 million as compared to 2003.

For the year ended December 31, 2004, our consolidated OCF margin was 34.8% compared to 33.2% for the same period last year. However, our consolidated OCF margin decreased sequentially to 30.8% for fourth quarter 2004, compared to 36.7% in the third quarter. Excluding the results of Noos and Chorus and approximately $22 million of costs associated with the termination and settlement of a Dutch programming contract, our fourth quarter overall OCF margin was 35.8% compared to 36.1% for the same period last year.

Net Income (Loss)

Net loss was $382 million or $(0.50) per share for the year ended December 31, 2004, which compares with net income of $2.0 billion or $7.41 per share for the prior year. The 2003 result was due primarily to a $2.2 billion gain related to the extinguishment of debt.

Free Cash Flow and Capital Expenditures

Free Cash Flow (FCF) for the year ended December 31, 2004 was $219 million, a $160 million improvement compared to $59 million of FCF in 2003. The increase was driven by a 78% improvement in cash flow from operating activities, offset by a 44% increase in reported capital expenditures. For the three months ended December 31, 2004, FCF was $39 million, a 192% increase or $25 million improvement compared to the same period last year despite higher marketing costs associated with the 72% increase in subscriber growth between the periods.

Capital expenditures for the year ended December 31, 2004 were $480 million (19.0% of revenues) compared to $333 million (17.6% of revenues) for fiscal year 2003. The primary reason for the increase was higher spending on customer premise equipment (CPE) due to the significant increase in RGU growth in fourth quarter 2004 compared to the same period last year, as well as foreign currency movements.

Balance Sheet, Leverage, and Liquidity

At December 31, 2004, total long-term debt was $4.8 billion and we had cash and cash equivalents (including short-term liquid investments) of $1.0 billion. Net debt to annualized Operating Cash Flow(6) or consolidated leverage ratio was 4.0x compared to 5.4x for the same period in the prior year. Excluding approximately $22 million of costs associated with the MovieCo programming contract, our year-end leverage was 3.8x.

In addition to our cash balances, as a result of the partial refinancing of our European Credit Facility, we currently have EUR 1.0 billion available under the revolvers. Together with the market value of our interests in the publicly traded securities of SBS Broadcasting and Austar United, we have total liquidity of approximately $3.0 billion.

Operating Statistics

Total RGUs were over 11.6 million at December 31, 2004, including 1.9 million RGUs at Noos and Chorus. Excluding Noos and Chorus, total RGUs at December 31, 2004 were 9.7 million. Since December 31, 2003, we added 552,800 net new RGUs (excluding acquisitions), which exceeded our full year guidance target of 500,000 RGUs by 11%.

In terms of net additions by product and excluding acquisitions, we added a total of 264,800 broadband Internet subscribers during 2004, including 216,800 in Europe. Together with the 211,200 broadband Internet subscribers we acquired from Noos and Chorus, our total broadband Internet subscriber base now exceeds 1.4 million. Digital video RGU additions were over 100,000 for the year driven primarily by the success of our digital HITs product in France. Including the acquisition of Noos' and Chorus' digital subscribers, we had a total of 725,100 digital subscribers at the end of the year. Telephony additions were 70,200 for the year including 42,000 during the fourth quarter following our commercial VoIP launches in The Netherlands and Hungary, and we had a total of 803,500 telephony subscribers at December 31, 2004.

During the fourth quarter of 2004, we added 254,200 net new RGUs (excluding acquisitions) which represents the strongest single quarter in the Company's history and a 72% improvement compared to last year's fourth quarter. In Europe we added 218,500 RGUs during the fourth quarter and in Chile we added 35,600 RGUs. We ended 2004 with a backlog of over 60,000 RGUs awaiting installation which is approximately double our normal backlog due to the strong demand we are experiencing for our new broadband Internet and VoIP products.

2005 Guidance

In 2005, we expect to generate a significant increase in customer growth compared to 2004 driven primarily by the continued aggressive rollout of digital phone services across Europe as well as continued broadband product innovation. As a result we expect to add 800,000 net new RGUs in 2005, a 34% increase compared to the 599,000 RGUs that we added in 2004 (which includes approximately 47,000 net gain at Noos, which we acquired in July of last year).

We expect revenue to increase 20% for 2005 compared to 2004, including the impact of announced acquisitions (i.e. Noos, Chorus, Telemach, and ZoneVision) and assuming an average exchange rate of 1.24 dollars per euro for the full year. Operating Cash Flow is also expected to increase by 20% on the same basis.

Capital expenditures for the year are expected to range between 20% and 22% of sales, an increase from 19% in 2004. The spending increase is primarily to support such new product launches as digital phone, and resultant higher RGU growth anticipated this year, as well as to support the upgrade of approximately 1.0 million new two way homes, primarily in Central and Eastern Europe. In addition, we expect to continue to be meaningfully Free Cash Flow positive in fiscal 2005.

About UnitedGlobalCom

UGC is a leading international provider of video, voice, and broadband Internet services with operations in 16 countries, including 13 countries in Europe. Based on the Company's operating statistics at December 31, 2004, UGC's networks reached approximately 16.0 million homes passed and served over 11.6 million RGUs, including approximately 9.5 million video subscribers, 1.4 million broadband Internet subscribers, and 803,500 telephone subscribers.

Forward Looking Statements: Except for historical information contained herein, this press release contains forward-looking statements, including guidance given for 2005. The statements about the Company's proposed merger with Liberty Media International ("LMI") and the proposed VTR/Metropolis combination are also forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include our ability to complete the proposed merger with LMI by obtaining the approval of holders of a majority of the aggregate voting power of our shares not beneficially owned by LMI, Liberty Media Corporation ("Liberty") or any of their respective subsidiaries or any of the executive officers of directors of LMI, Liberty or the Company and satisfaction of other conditions necessary to close the merger, satisfaction of the conditions necessary to complete the proposed VTR/Metropolis combination, continued use by subscribers and potential subscribers of the Company's services, changes in the technology and competition, our ability to achieve expected operational efficiencies and economies of scale, our ability to generate expected revenue and achieve assumed margins including, to the extent annualized figures imply forward- looking projections, continued performance comparable with the period annualized, as well as other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. These forward- looking statements speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any guidance and other forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Additional Information

UnitedGlobalCom, Inc. ("UGC") and Liberty Media International, Inc. ("LMI") have filed a preliminary Joint Proxy Statement relating to their proposed merger as well as a related Schedule 13E-3. Liberty Global, Inc. ("Liberty Global") plans to shortly file a Registration Statement on Form S-4 which will contain a Prospectus/Joint Proxy Statement with respect to the proposed merger. UGC AND LMI STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THESE DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS WHEN AVAILABLE) BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. Investors may obtain these documents free of charge at the SEC's website at www.sec.gov. In addition, copies of the Prospectus/Joint Proxy Statement and other related documents filed by the parties to the merger may be obtained free of charge by directing a request to UnitedGlobalCom, Inc., 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237, Attention: Investor Relations Department, telephone: 303-770-4001.

Participants in Solicitation

UGC and its directors and executive officers may be deemed to be participants in the solicitation of proxies from UGC's stockholders in connection with the special meeting of stockholders to be held to approve the merger with LMI through the formation of a new holding company to be named Liberty Global. Information concerning UGC's directors and executive officers and their direct and indirect interests in UGC and LMI is set forth in UGC's and LMI's preliminary Joint Proxy Statement filed with the SEC on February 14, 2005. A definitive proxy statement will be mailed to UGC stockholders when available. Stockholders may obtain these documents (when available) free of charge at the SEC's website at www.sec.gov. In addition, copies of the definitive Prospectus/Joint Proxy Statement (when available) may be obtained free of charge by directing a request to UnitedGlobalCom, Inc., 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237, Attention: Investor Relations Department, telephone: 303-770-4001. UGC STOCKHOLDERS SHOULD READ THE PROSPECTUS/JOINT PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CAREFULLY BEFORE MAKING ANY VOTING DECISION BECAUSE IT CONTAINS IMPORTANT INFORMATION.

Please visit http://www.unitedglobal.com/ for further information.

New Basis of Accounting Effective January 1, 2004

On January 5, 2004, Liberty Media Corporation (together with its subsidiaries "LMC") acquired 8,198,016 shares of Class B common stock from our founding stockholders in exchange for securities of LMC and cash (the "Founders Transaction"). Upon completion of this transaction, the restriction on LMC's right to exercise its voting power over us was terminated. LMC then had the ability to elect our entire board of directors and control us. LMC acquired its cumulative interest in us over a period of several years in separate acquisitions. LMC's largest acquisition of us occurred in January 2002 whereby its economic and voting interest increased from approximately 11% and 37%, respectively, to approximately 73% and 94%, respectively. Because of certain voting and standstill agreements entered into between LMC and our founding stockholders in connection with this January 2002 transaction, LMC was unable to control us and therefore accounted for its investment in us under the equity method of accounting. Upon consummation of the Founders Transaction, our financial statements changed to reflect the push down of LMC's basis and, as a result, we have a new basis of accounting effective January 1, 2004. Accordingly, for periods prior to January 1, 2004 the assets and liabilities of UnitedGlobalCom, Inc. and the related consolidated financial statements are sometimes referred to herein as "UGC Pre-Founders Transaction," and for periods subsequent to January 1, 2004 the assets and liabilities of UnitedGlobalCom, Inc. and the related consolidated financial statements are sometimes referred to herein as "UGC Post-Founders Transaction."

1) Also referred to as the "Company," "we," "us," "our," and
similar terms.
2) Please see page 14 for an explanation of Operating Cash Flow and
a reconciliation of Operating Cash Flow to Net Income (Loss).
3) RGUs or Revenue Generating Units excluding the impact of acquisitions.
Please see footnote (4) on page 17 for a definition. Organic growth,
for RGU Net Gain and Revenue & OCF, excludes acquisitions and the
impact of foreign exchange rate movements as applicable.
4) Net income in 2003 primarily due to $2.2 billion gain on the
extinguishment of debt.
5) Please see page 14 for an explanation of Free Cash Flow and a
reconciliation of Free Cash Flow to Net Cash Flows from operating
activities.
6) Represents net debt / Operating Cash Flow annualized for the three
months ended December 31, 2004.

UnitedGlobalCom, Inc.
Consolidated Balance Sheets
(In thousands, except par value and number of shares)

UGC UGC
Post-Founders Pre-Founders
Transaction Transaction
December 31, December 31,
Assets 2004 2003
Current assets:
Cash and cash equivalents $1,028,993 $310,361
Restricted cash 43,640 25,052
Short-term liquid investments 48,965 2,134
Trade receivables, net 184,222 140,075
Other receivables 134,110 65,157
Other current assets, net 98,525 79,542
Total current assets 1,538,455 622,321

Long-term assets:
Investments in affiliates,
accounted for using
the equity method 345,790 95,238
Other investments 262,091 206,325
Property and equipment, net 4,193,095 3,342,743
Goodwill 2,170,705 2,519,831
Intangible assets, net 445,172 252,236
Other assets, net 178,989 60,977
Total assets $9,134,297 $7,099,671

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $345,535 $225,540
Accrued liabilities 462,927 302,597
Subscriber advance
payments and deposits 332,765 141,108
Accrued Interest 88,608 102,949
Notes payable, related party 108,414 102,728
Current portion of debt 34,325 310,804
Other current liabilities 49,675 82,149
Other current liabilities
subject to compromise -- 336,916
Total current liabilities 1,422,249 1,604,791

Long-term liabilities:
Long-term portion of debt 4,844,624 3,615,902
Other long-term liabilities 375,103 383,725
Total liabilities 6,641,976 5,604,418

Commitments and contingencies
Minority interests in subsidiaries 96,378 22,761
Stockholders' equity:
Preferred stock, $0.01 par value,
10,000,000 shares authorized,
nil shares issued and outstanding -- --
Class A common stock, $0.01 par value,
1,000,000,000 shares authorized,
413,206,357 and 287,350,970
shares issued, respectively 4,132 2,873
Class B common stock, $0.01 par value,
1,000,000,000 shares authorized,
11,165,777 and 8,870,332 shares issued,
respectively 112 89
Class C common stock, $0.01 par value,
400,000,000 shares authorized,
379,603,223 and 303,123,542 share
issued and outstanding, respectively 3,796 3,031
Additional paid-in capital 2,624,159 5,852,896
Deferred compensation (1,851) --
Treasury stock, at cost (75,844) (70,495)
Accumulated deficit (382,355) (3,372,737)
Accumulated other comprehensive
income (loss) 223,794 (943,165)
Total stockholders' equity 2,395,943 1,472,492
Total liabilities and
stockholders' equity $9,134,297 $7,099,671

UnitedGlobalCom, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share data)

UGC UGC
Post-Founders Pre-Founders
Transaction Transaction
Year Ended Year Ended
December 31, December 31,
2004 2003 2002
Statements of Operations
Revenue $2,525,446 $1,891,530 $1,515,021
Operating costs and expenses:
Operating (1,014,628) (785,132) (789,457)
Selling, general and
administrative ("SG&A") (631,585) (477,516) (429,190)
Depreciation and
amortization (operating) (935,185) (808,663) (730,001)
Impairment of long-lived
assets (operating) (38,915) (402,239) (436,153)
Restructuring charges
and other (operating) (29,019) (35,970) (1,274)
Stock-based compensation (SG&A) (116,661) (38,024) (28,228)
Operating loss (240,547) (656,014) (899,282)

Interest income 23,823 13,054 38,315
Interest expense (283,280) (327,132) (680,101)
Foreign currency
transaction gains, net 26,753 153,808 485,938
Realized and unrealized (losses)
gains on derivative
instruments, net (60,237) (35,424) 138,398
Gains on extinguishment of debt 35,787 2,183,997 2,208,782
Gains on sale of investments
and other, net 12,325 279,442 117,262
Other expense, net (13,455) (43,665) (80,617)
Income (loss) before income taxes
and other items (498,831) 1,568,066 1,328,695
Income tax benefit (expense), net 101,105 (50,344) (201,182)
Minority interests in losses
(earnings) of subsidiaries
and other, net 3,062 183,182 (67,103)
Share in results of affiliates, net 12,309 294,464 (72,142)
Income (loss) before cumulative
effect of change in accounting
principle (382,355) 1,995,368 988,268
Cumulative effect of change
in accounting principle, net of tax -- -- (1,344,722)
Net income (loss) $(382,355) $1,995,368 $(356,454)

Earnings per share:
Basic earnings (loss) per share
before cumulative effect of change
in accounting principle $(0.50) $7.41 $2.29
Cumulative effect of change
in accounting principle -- -- (3.13)
Basic earnings (loss) per share $(0.50) $7.41 $(0.84)
Diluted earnings (loss) per share
before cumulative effect of change
in accounting principle $(0.50) $7.41 $2.29
Cumulative effect of change in
accounting principle -- -- (3.12)
Diluted earnings (loss) per share $(0.50) $7.41 $(0.83)

Statements of Comprehensive
Income (Loss)
Net income (loss) $(382,355) $1,995,368 $(356,454)
Other comprehensive
income (loss):
Foreign currency
translation adjustments 195,429 61,440 (864,104)
Change in fair value of
derivative contracts -- -- 13,443
Reclassification adjustment
for expired derivative contracts
included in net income -- 10,616 --
Net unrealized gains on
available-for-sale securities 56,417 97,318 4,029
Reclassification adjustment for
gains on available-for-sale
securities included
in net income (10,517) -- --
Other -- (194) (77)
Other comprehensive income (loss)
before income taxes 241,329 169,180 (846,709)
Provision for income taxes
related to net unrealized gains
on available-for-sale securities (17,535) -- --
Other comprehensive income (loss) 223,794 169,180 (846,709)
Comprehensive income (loss) $(158,561) $2,164,548 $(1,203,163)

UnitedGlobalCom, Inc.
Consolidated Statements of Cash Flows
(In thousands)

UGC UGC
Post-Founders Pre-Founders
Transaction Transaction
Year Ended Year Ended
December 31, December 31,
2004 2003 2002
Cash Flows from
Operating Activities
Net income (loss) $(382,355) $1,995,368 $(356,454)
Adjustments to reconcile net
income (loss) to net cash flows
from operating activities:
Depreciation and amortization 935,185 808,663 730,001
Impairment of long-lived assets,
restructuring charges and other 67,934 438,209 437,427
Stock-based compensation 65,827 29,242 28,228
Accretion of interest on senior
notes and amortization of
deferred financing costs 21,588 50,733 234,247
Unrealized foreign currency
transaction gains, net (5,526) (116,454) (491,313)
Realized and unrealized losses
(gains) on derivative instruments 60,237 35,424 (138,398)
Gain on extinguishment of debt (35,787) (2,183,997) (2,208,782)

Gains on sale of investments
and other, net (12,325) (279,442) (117,262)
Deferred income tax (benefit)
expense, net (130,518) (23,420) 104,068
Minority interests in (losses)
earnings of subsidiaries
and other, net (3,062) (183,182) 67,103
Share in results of affiliates, net (12,309) (294,464) 72,142
Cumulative effect of change
in accounting principle -- -- 1,344,722
Other non-cash items 14,755 32,009 102,326

Change in assets and liabilities:
Change in receivables
and other assets (72,169) 40,870 46,803
Change in accounts payable,
accrued liabilities and other 188,127 42,533 (148,466)
Net cash flows from
operating activities 699,602 392,092 (293,608)

Cash Flows from
Investing Activities
Cash paid for acquisitions,
net of cash acquired (710,549) (2,150) (22,617)
Cash paid for acquisition,
to be refunded by seller (52,128) -- --
Capital expenditures (480,133) (333,124) (335,192)
Purchases of short-term
liquid investments (293,734) (1,000) (117,221)
Proceeds from sale of
short-term liquid investments 246,981 45,561 152,405
Restricted cash released
(deposited), net (17,298) 24,825 40,357
Investments in and
loans to affiliates (144,699) (20,931) (2,590)
Proceeds from sale of
investments in affiliates 696 45,447 --
Purchase of interest rate caps (21,442) (9,750) --
Cash paid to settle
interest rate swaps (66,411) (58,038) --
Dividends received from affiliates 17,098 4,714 11,276
Proceeds received upon
repayment of debt securities 115,592 -- --
Other 1,826 3,092 16,319
Net cash flows from
investing activities (1,404,201) (301,354) (257,263)

Cash Flows from Financing Activities
Issuance of common stock 1,076,811 1,354 200,006
Proceeds from issuance of
convertible senior notes 604,595 -- --
Proceeds from notes
payable to shareholder 5,371 -- 102,728
Proceeds from issuance of debt 1,547,867 23,161 42,742
Repayments of debt (1,803,081) (233,506) (321,961)
Financing costs (62,448) (2,233) (18,293)
Purchase of treasury shares (5,349) -- --
Net cash flows from
financing activities 1,363,766 (211,224) 5,222

Effects of Exchange Rates on Cash 59,465 20,662 35,694
Increase (Decrease) in
Cash and Cash Equivalents 718,632 (99,824) (509,955)
Cash and Cash Equivalents,
Beginning of Year 310,361 410,185 920,140
Cash and Cash Equivalents,
End of Year $1,028,993 $310,361 $410,185

Revenue

The following table provides an analysis of our revenue by business segment for the years ended December 31, 2004 and 2003 (in thousands, except percentages). The first two columns present our consolidated revenue for each comparative period. The third and fourth columns present the U.S. dollar change and percent change, respectively, from period to period. The fifth and sixth columns present the U.S. dollar change and percent change, respectively, after removing foreign currency translation effects, or "F/X." These columns demonstrate what the revenue change would have been had exchange rates remained the same as the comparative period in the prior year. These amounts are based on the Euro for the Netherlands, Austria, France, Ireland, Belgium, chellomedia, UGC Europe corporate and other, Norwegian Krone for Norway, Swedish Krona for Sweden, Hungarian Forint for Hungary, Polish Zloty for Poland, Czech Koruna for Czech Republic, Slovak Koruna for Slovak Republic, Romanian Leu for Romania, Chilean Peso for Chile, and U.S. dollars for Brazil, Peru and other UGC corporate. Certain percentages are denoted as not meaningful ("n/m"). At the bottom of the table we subtract the consolidated revenue from our material acquisitions in 2004, Noos and Chorus (Ireland), to present our revenue growth without the results of these new businesses.

Year Ended December 31,
Increase
(Decrease)
Increase Excluding
(Decrease) F/X Effects
Europe (UGC Europe): 2004 2003 $ % $ %
UPC Broadband
The Netherlands $716,932 $592,223 $124,709 21.1% $60,999 10.3%
Austria 299,874 260,162 39,712 15.3% 13,268 5.1%
France
(excluding Noos)128,862 113,946 14,916 13.1% 3,532 3.1%
France (Noos) 183,930 -- 183,930 -- 183,930 --

Norway 112,378 95,284 17,094 17.9% 11,815 12.4%
Sweden 88,080 75,057 13,023 17.4% 5,104 6.8%
Belgium 37,472 31,586 5,886 18.6% 2,558 8.1%
Ireland (Chorus) 48,953 -- 48,953 -- 48,953 --
Total Western
Europe 1,616,481 1,168,258 448,223 38.4% 330,159 28.3%
Hungary 217,507 165,450 52,057 31.5% 31,105 18.8%
Poland 108,979 85,356 23,623 27.7% 16,388 19.2%
Czech Republic 79,905 63,348 16,557 26.1% 10,262 16.2%
Slovak Republic 32,671 25,467 7,204 28.3% 3,209 12.6%
Romania 26,955 20,189 6,766 33.5% 5,532 27.4%
Total Central
and Eastern
Europe 466,017 359,810 106,207 29.5% 66,496 18.5%
Corporate
and other 26,273 32,563 (6,290) (19.3%) (8,173) (25.1%)
Total UPC
Broadband 2,108,771 1,560,631 548,140 35.1% 388,482 24.9%

Chellomedia
Priority Telecom 118,956 121,330 (2,374) (2.0%) (12,982) (10.7%)
Media 125,016 98,463 26,553 27.0% 15,459 15.7%
Investments 840 528 312 59.1% 239 45.3%
Total
chellomedia 244,812 220,321 24,491 11.1% 2,716 1.2%
Intercompany
eliminations (138,983) (127,055) (11,928) (9.4%) 381 0.3%
Total Europe 2,214,600 1,653,897 560,703 33.9% 391,579 23.7%

Latin America:
Broadband
Chile (VTR) 299,951 229,835 70,116 30.5% 36,314 15.8%
Brazil, Peru
and other 7,883 7,789 94 1.2% 94 1.2%
Total Latin
America 307,834 237,624 70,210 29.5% 36,408 15.3%
Corporate and other 3,012 9 3,003 n/m 3,003 n/m

Total UGC $2,525,446 $1,891,530 $633,916 33.5% $430,990 22.8%

Less Noos and Chorus $(232,883) -- $(232,883) --
Total UGC, excluding
Noos and Chorus $ 401,033 21.2% $198,107 10.5%

Operating Cash Flow

The following table provides an analysis of our Operating Cash Flow by business segment for the years ended December 31, 2004 and 2003 (in thousands, except percentages). The first two columns present our consolidated Operating Cash Flow for each comparative period. The third and fourth columns present the U.S. dollar change and percent change, respectively, from period to period. The fifth and sixth columns present the U.S. dollar change and percent change, respectively, after removing foreign currency translation effects. These columns demonstrate what the Operating Cash Flow change would have been had exchange rates remained the same as the comparative period in the prior year. These amounts are based on the Euro for the Netherlands, Austria, France, Belgium, Ireland, chellomedia, UGC Europe corporate and other, Norwegian Krone for Norway, Swedish Krona for Sweden, Hungarian Forint for Hungary, Polish Zloty for Poland, Czech Koruna for Czech Republic, Slovak Koruna for Slovak Republic, Romanian Leu for Romania, Chilean Peso for Chile, and U.S. dollars for Brazil, Peru and other UGC corporate. At the bottom of the table we subtract the consolidated operating cash flow from our material acquisitions in 2004, Noos and Chorus (Ireland), to present our operating cash flow growth without the results of these new businesses.

Year Ended December 31,
Increase
(Decrease)
Increase Excluding
(Decrease) F/X Effects
Europe (UGC Europe): 2004 2003 $ % $ %
UPC Broadband
The Netherlands $361,265 $267,075 $94,190 35.3% $63,021 23.6%
Austria 111,950 98,278 13,672 13.9% 4,238 4.3%
France (other
than Noos) 12,905 13,920 (1,015) (7.3%) (2,007)(14.4%)
France (Noos) 40,785 -- 40,785 -- 40,785 --
Norway 37,066 27,913 9,153 32.8% 7,384 26.5%
Sweden 33,421 31,827 1,594 5.0% (1,225) (3.8%)
Belgium 16,751 12,306 4,445 36.1% 3,003 24.4%
Ireland (Chorus) 11,795 -- 11,795 -- 11,795 --
Total Western
Europe 625,938 451,319 174,619 38.7% 126,994 28.1%
Hungary 86,418 63,357 23,061 36.4% 15,084 23.8%
Poland 36,315 24,886 11,429 45.9% 9,338 37.5%
Czech Republic 33,888 24,657 9,231 37.4% 6,699 27.2%
Slovak Republic 13,766 10,618 3,148 29.6% 1,507 14.2%
Romania 11,978 7,931 4,047 51.0% 3,941 49.7%
Total Central
and Eastern
Europe 182,365 131,449 50,916 38.7% 36,569 27.8%
Corporate
and other (83,604) (46,091) (37,513) (81.4%) (30,594)(66.4%)
Total UPC
Broadband 724,699 536,677 188,022 35.0% 132,969 24.8%

Chellomedia
Priority Telecom 17,183 14,530 2,653 18.3% 1,090 7.5%
Media 36,335 22,874 13,461 58.8% 10,166 44.4%
Investments (502) (1,033) 531 51.4% 579 56.1%
Total
chellomedia 53,016 36,371 16,645 45.8% 11,835 32.5%
Total Europe 777,715 573,048 204,667 35.7% 144,804 25.3%

Latin America:
Broadband
Chile (VTR) 108,752 69,951 38,801 55.5% 26,721 38.2%
Brazil, Peru
and other 426 87 339 389.7% 339 389.7%
Total Latin
America 109,178 70,038 39,140 55.9% 27,060 38.6%
Corporate and other (7,660) (14,204) 6,544 46.1% 6,544 46.1%
Total UGC $879,233 $628,882 $250,351 39.8% $178,408 28.4%

Less Noos
and Chorus $(52,580) -- $(52,580) --
Total UGC, excluding
Noos and Chorus $197,771 31.4% $ 125,828 20.0%

Supplemental Financial Information:

Revenue
The table below highlights Revenue by segment:

12 months 12 months Year/Year
(thousands) Dec-04 Dec-03 Change
UPC Broadband - W Europe $1,383,598 $1,168,258 18%
UPC Broadband - C&E Europe 466,017 359,810 30%
Total UPC Broadband 1,849,615 1,528,068 21%
Chellomedia 244,812 220,321 11%
VTR 299,951 229,835 31%
Other (1) (101,815) (86,694) 17%
Subtotal $2,292,563 $1,891,530 21%
Add: Noos & Chorus 232,883 0 n.a.
UGC Consolidated $2,525,446 $1,891,530 34%

Revenue
The table below highlights Revenue by segment:
3 months 3 months Year/Year 3 months Sequential
(thousands) Dec-04 Dec-03 Change Sep-04 Change
UPC Broadband
- W Europe $375,014 $315,407 19% $340,859 10%
UPC Broadband
- C&E Europe 132,614 96,460 37% 116,111 14%
Total UPC Broadband 507,628 411,867 23% 456,970 11%
Chellomedia 66,238 57,741 15% 61,713 7%
VTR 83,414 68,168 22% 75,096 11%
Other (1) (26,908) (21,912) 23% (24,002) 12%
Subtotal $630,372 $515,864 22% $569,777 11%
Add: Noos & Chorus 144,197 0 n.a. 88,686 n.a.
UGC Consolidated $774,569 $515,864 50% $658,463 18%

(1) Primarily inter-company eliminations, corporate and other, and other
Latin America broadband.

The following is provided for informational purposes to highlight revenues in the functional currency of VTR (Chilean Pesos) and the primary functional currency of UGC Europe (Euros), as follows:

12 months 12 months Year/Year
(thousands, except for VTR) Dec-04 Dec-03 Change
UPC Broadband - W Europe EUR 1,113,504 EUR 1,031,659 8%
UPC Broadband - C&E Europe 374,850 317,740 18%
Total UPC Broadband 1,488,354 1,349,399 10%
Chellomedia 196,991 194,559 1%
Other (1) (90,756) (83,444) 9%
Subtotal 1,594,589 1,460,514 9%
Add: Noos & Chorus 185,540 0 n.a.
UGC Europe - Total EUR 1,780,129 EUR 1,460,514 22%

VTR (millions) CP182,541 CP157,676 16%

(thousands, 3 months 3 months Year/Year 3 months Sequential
except for VTR) Dec-04 Dec-03 Change Sep-04 Change
UPC Broadband
- W Europe EUR 290,972 EUR 265,288 10% EUR 278,652 4%
UPC Broadband
- C&E Europe 102,894 81,035 27% 94,920 8%
Total UPC Broadband 393,866 346,323 14% 373,572 5%
Chellomedia 51,393 48,514 6% 50,450 2%
Other (1) (22,708) (20,048) 13% (23,394) -3%
Subtotal 422,551 374,789 13% 400,628 5%
Add: Noos & Chorus 113,039 0 n.a. 72,501 n.m.
UGC Europe
- Total EUR 535,590 EUR 374,789 43% EUR 473,129 13%

VTR (millions) CP49,377 CP42,547 16% CP47,177 5%

(1) Primarily inter-company eliminations and corporate and other.

Operating Cash Flow
The table below highlights Operating Cash Flow ("OCF") by segment:

12 months 12 months Year/Year
(thousands) Dec-04 Dec-03 Change
UPC Broadband - W Europe $573,358 $451,319 27%
UPC Broadband - C&E Europe 182,365 131,449 39%
Total UPC Broadband 755,723 582,768 30%
Chellomedia 53,016 36,371 46%
VTR 108,752 69,951 55%
Other (1) (90,838) (60,208) 51%
Subtotal $826,653 $628,882 31%
Add: Noos & Chorus 52,580 0 n.a.
UGC Consolidated $879,233 $628,882 40%

OCF Margin (% of revenues) 34.8% 33.2% 5%
OCF Margin (without Noos & Chorus) 36.1% 33.2% 8%

3 months 3 months Year/Year 3 months Sequential
(thousands) Dec-04 Dec-03 Change Sep-04 Change
UPC Broadband
- W Europe $143,522 $129,762 11% $149,600 -4%
UPC Broadband
- C&E Europe 45,620 33,894 35% 47,324 -4%
Total UPC Broadband 189,142 163,656 16% 196,924 -4%
Chellomedia 17,532 9,830 78% 13,988 25%
VTR 33,810 22,067 53% 25,925 30%
Other (1) (36,569) (9,539) 283% (12,911) 183%
Subtotal $203,915 $186,014 10% $223,926 -9%
Add: Noos & Chorus 34,803 0 n.a. 17,777 n.m.
UGC Consolidated $238,718 $186,014 28% $241,703 -1%

OCF Margin
(% of revenues) 30.8% 36.1% -15% 36.7% -16%
OCF Margin
(without Noos
& Chorus) 32.3% 36.1% -10% 39.3% -18%

(1) Primarily corporate and other, and other Latin America broadband.

The following is provided for informational purposes to highlight Operating Cash Flow in the functional currency of VTR (Chilean Pesos) and the primary functional currency of UGC Europe (Euros), as follows:

12 months 12 months Year/Year
(thousands, except for VTR) Dec-04 Dec-03 Change
UPC Broadband - W Europe EUR 461,837 EUR 397,428 16%
UPC Broadband - C&E Europe 146,896 115,753 27%
Total UPC Broadband 608,733 513,181 19%
Chellomedia 42,535 32,028 33%
Corporate and other (66,889) (40,587) 65%
Subtotal 584,379 504,622 16%
Add: Noos & Chorus 41,801 0 n.a.
UGC Europe - Total EUR 626,180 EUR 504,622 24%

OCF Margin (% of revenues) 35.2% 34.6% 2%
OCF Margin (without Noos & Chorus) 36.6% 34.6% 6%

VTR (in millions) CP66,082 CP47,801 38%
OCF Margin (% of revenues) 36.2% 30.3% 19%

(thousands, 3 months 3 months Year/Year 3 months Sequential
except for VTR) Dec-04 Dec-03 Change Sep-04 Change
UPC Broadband
- W Europe EUR 111,358 EUR 109,014 2% EUR 122,331 -9%
UPC Broadband
- C&E Europe 35,396 28,253 25% 38,700 -9%
Total UPC Broadband 146,754 137,267 7% 161,031 -9%
Chellomedia 13,602 8,223 65% 11,432 19%
Corporate and other (26,324) (5,063) 420% (12,235) 115%
Subtotal 134,032 140,427 -5% EUR 160,228 -16%
Add: Noos & Chorus 27,306 0 n.a. 14,495 n.m.
UGC Europe
- Total EUR 161,338 EUR 140,427 15% EUR 174,723 -8%

OCF Margin
(% of revenues) 30.1% 37.5% -20% 36.9% -18%
OCF Margin
(without Noos
& Chorus) 31.7% 37.5% -15% 40.0% -21%

VTR (in millions) CP20,015 CP13,815 45% CP16,299 23%
OCF Margin
(% of revenues) 40.5% 32.5% 25% 34.5% 17%

Operating Cash Flow Definition and Reconciliation

Operating Cash Flow is the primary measure used by our chief operating decision makers to evaluate segment operating performance and to decide how to allocate resources to segments. As we use the term, Operating Cash Flow is defined as revenue less operating, selling, general and administrative expenses (excluding depreciation and amortization, impairment of long-lived assets, restructuring charges and other and stock-based compensation). We believe Operating Cash Flow is meaningful because it provides investors a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that is used by our internal decision makers. Our internal decision makers believe Operating Cash Flow is a meaningful measure and is superior to other available GAAP measures because it represents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons and benchmarking between segments in the different countries in which we operate and identify strategies to improve operating performance. For example, our internal decision makers believe that the inclusion of impairment and restructuring charges within Operating Cash Flow distorts the ability to efficiently assess and view the core operating trends in our segments. In addition, our internal decision makers believe our measure of Operating Cash Flow is important because analysts and investors use it to compare our performance to other companies in our industry. We reconcile the total of the reportable segments' Operating Cash Flow to our consolidated net income as presented in our consolidated statements of operations, because we believe consolidated net income is the most directly comparable financial measure to total segment operating performance. Investors should view Operating Cash Flow as a supplement to, and not a substitute for, operating income, net income, cash flow from operating activities and other GAAP measures of income as a measure of operating performance.

We are unable to provide a reconciliation of forecasted Operating Cash Flow to the most directly comparable GAAP measure, net income (loss), because certain items are out of our control and/or cannot be reasonably predicted. For example, it is impractical to: (1) estimate future fluctuations in interest rates on our variable-rate debt facilities; (2) estimate the fluctuations in exchange rates relative to the U.S. dollar and its impact on our results of operations; (3) estimate the financial results of our non- consolidated affiliates; and (4) estimate changes in circumstances that lead to gains and/or losses such as sales of investments in affiliates and other assets. Any and/or all of these items could be significant to our financial results.

The table below highlights the reconciliation of Operating Cash Flow to Net income (loss):

3 months 3 months 3 months 12 months 12 months
(thousands) Dec-04 Sep-04 Dec-03 Dec-04 Dec-03
Total segment
Operating
Cash Flow $238,718 $241,703 $186,014 $879,233 $628,882
Depreciation and
amortization (267,887) (235,186) (210,456) (935,185) (808,663)
Impairment of
long-lived assets (22,317) 25 (402,680) (38,915) (402,239)
Restructuring
charges and
other (18,270) (1,824) (29,084) (29,019) (35,970)
Stock-based
compensation (52,767) (12,178) (9,377) (116,661) (38,024)
Operating
income (loss) (122,523) (7,460) (465,583) (240,547) (656,014)
Interest
expenses, net (71,651) (53,616) (60,868) (259,457) (314,078)
Gains on
extinguishment
of debt 0 0 0 35,787 2,183,997
Gains (losses)
on sale of
investments
and other, net 12,096 646 (1,879) 12,325 279,442
Realized and
unrealized
(losses) gains
on foreign
currency
transactions and
derivative
instruments and
other expenses,
net (16,556) 2,005 (28,020) (46,939) 74,719
Income (loss)
before income
taxes and other
items (198,634) (58,425) (556,350) (498,831) 1,568,066
Other, net 131,025 (11,785) 175,656 116,476 427,302
Net income (loss) ($67,609) ($70,210) ($380,694) ($382,355) $1,995,368

Free Cash Flow Definition and Reconciliation

Free Cash Flow is not a GAAP measure of liquidity. We define Free Cash Flow as net cash flows from operating activities less capital expenditures. We believe our presentation of free cash flow provides useful information to our investors because it can be used to gauge our ability to service debt and fund new investment opportunities. Investors should view free cash flow as a supplement to, and not a substitute for, GAAP cash flows from operating, investing and financing activities as a measure of liquidity.

The table below highlights the reconciliation of net cash flows from operating activities and Free Cash Flow:

12 months 12 months Year/Year
(thousands) Dec-04 Dec-03 Change
Net cash flows from
operating activities $699,602 $392,092 78%
Capital expenditures (480,133) (333,124) 44%
Free cash flow $219,469 $58,968 272%

3 months 3 months Year/Year 3 months Sequential
(thousands) Dec-04 Dec-03 Change Sep-04 Change
Net cash flows
from operating
activities $226,255 $118,651 91% $175,064 29%
Capital
expenditures (187,576) (105,426) 78% (116,696) 61%
Free cash
flow $38,679 $13,225 192% $58,368 -34%

The following table is provided for informational purposes only to highlight revenue and Operating Cash Flow of UPC Distribution, B.V. (UPCD). UPCD is the borrower of record on our European Credit Facility.

Revenue 12 months 9 months 3 months
(in thousands of Euros) Dec-04 Sept-04 Dec-04
Triple Play:
The Netherlands 576,853 424,014 152,839
Austria 241,453 180,860 60,593
Belgium 30,156 22,219 7,937
Czech Republic 64,315 47,659 16,656
Norway 90,452 66,210 24,242
Hungary 174,952 126,970 47,982
France (excluding Noos) 103,713 76,791 26,922
France (Noos) 146,400 72,501 73,899
Poland 87,633 62,578 25,055
Sweden 70,877 52,438 18,439
Slovak 26,292 19,438 6,854
Romania 21,658 15,311 6,347
Total Triple Play
UPC Broadband 1,634,754 1,166,989 467,765
chello Access 74,455 55,429 19,026
Corporate and Other 21,122 15,264 5,858
Eliminations (75,205) (55,869) (19,336)
Total UPC Holding BV 1,655,126 1,181,813 473,313

Operating Cash Flow 12 months 9 months 3 months
(in thousands of Euros) Dec-04 Sept-04 Dec-04
Triple Play:
The Netherlands 290,849 217,785 73,064
Austria 90,276 70,521 19,755
Belgium 13,490 10,172 3,318
Czech Republic 27,333 21,465 5,868
Norway 29,839 22,291 7,548
Hungary 69,546 51,523 18,023
France (excluding Noos) 10,428 8,568 1,860
France (Noos) 32,347 14,495 17,852
Poland 29,259 22,340 6,919
Sweden 26,955 21,142 5,813
Slovak 11,101 8,668 2,433
Romania 9,657 7,504 2,153
Total Triple Play UPC Broadband 641,080 476,474 164,606
chello Access 48,031 34,896 13,135
Corporate and Other 25,630) (20,630) (5,000)
Total UPC Holding BV 663,481 490,740 172,741

The Revenue and Operating Cash Flow of UPCD for the twelve-month period ended December 31, 2004 includes twelve months of UPC Poland and six months of Noos. UPC Poland and Noos were transferred into UPCD in July 2004. The Operating Cash Flow of UPCD for the twelve and three months ended December 31, 2004 excludes corporate costs, which primarily relates to costs on a programming agreement.

Please note that for Q4 2004 chello access has been contributed into UPCD at December 31, 2004. We are currently reviewing intercompany arrangements with respect to interactive, arrivo, VOD and other services to be procured by UPCD from chellomedia. Currently these services are not settled in cash and as a result are not included in OCF. Total Q4 2004 amount with respect to these service totaled approximately Euro 1.9 million.

The above selected historic financial data of UPCD (the "Unaudited Data") contained herein are unaudited, were not reviewed by the Company's certified public accountants and are subject to possible adjustments. The Unaudited Data represent management accounts prepared by the management of the Company. While presented with numerical specificity, the Unaudited Data were not prepared with a view to public disclosure. As such, the Unaudited Data should not be relied on, although management believes that the Unaudited Data is accurate.

Consolidated Operating Statistics

The table below shows operating statistics for UGC on a consolidated basis (excluding acquisitions):(1)

As of As of As of As of As of
Dec-04 Sep-04 Jun-04 Mar-04 Dec-03
Video
Homes Passed 12,429,600 12,338,500 12,323,500 12,288,800 12,260,100
Basic Analog
Subscribers 7,151,800 7,082,300 7,075,200 7,079,000 7,084,900
Basic Penetration 57.5% 57.4% 57.4% 57.6% 57.8%
Quarterly Net
Basic Subscriber
Change 69,500 7,100 (3,800) (5,900) 42,400

Digital
Subscribers 239,600 223,100 195,000 161,200 138,700
Digital
Penetration 1.9% 1.8% 1.6% 1.3% 1.1%
Quarterly Net
Digital Subscriber
Change 16,500 28,100 33,800 22,500 6,400

DTH Subscribers 249,600 213,800 213,800 204,100 196,900

MMDS Subscribers 61,400 63,500 63,100 63,000 64,100

Broadband Internet
Broadband
Internet Homes
Serviceable 7,716,500 7,484,900 7,326,900 7,127,100 7,045,000
Broadband
Internet
Subscribers 1,187,500 1,095,000 1,031,000 983,300 922,700
Penetration 15.4% 14.6% 14.1% 13.8% 13.1%
Quarterly Net
Subscriber Change 92,500 64,000 47,700 60,600 56,200

Telephone
Telephone Homes
Serviceable 5,488,200 4,507,400 4,488,500 4,467,700 4,467,800
Telephone
Subscribers 803,000 761,000 756,700 741,800 732,800
Penetration 14.6% 16.9% 16.9% 16.6% 16.4%
Quarterly Net
Subscriber Change 42,000 4,300 14,900 9,000 15,100

Total RGUs 9,692,900 9,438,700 9,334,800 9,232,400 9,140,100
Quarterly Net
Subscriber
Change 254,200 103,900 102,400 92,300 147,600
ARPU per RGU (2) $20.67 $18.96 $18.50 $18.69 $17.72
Constant ARPU
per RGU (3) $20.67 $20.00 $19.77 $19.15 $19.13

Customer
Relationships 7,787,900 7,645,300 7,633,200 7,625,000 7,624,300
ARPU per Customer
Relationship (4) $25.62 $23.30 $22.51 $22.52 n.a.
Constant ARPU per
Customer
Relationship (5) $25.62 $24.57 $24.05 $23.07 n.a.

RGUs by region:
Europe
(UGC Europe) 8,651,600 8,433,100 8,358,400 8,286,200 8,214,900
Chile (VTR) 1,009,300 973,700 944,700 914,600 894,000
Other 32,000 31,900 31,700 31,600 31,200
Total RGUs 9,692,900 9,438,700 9,334,800 9,232,400 9,140,100

Growth Growth
vs. 3Q04 vs. 4Q03
Video
Homes Passed 91,100 169,500
Basic Analog Subscribers 69,500 66,900
Basic Penetration n.m. n.m.
Quarterly Net Basic Subscriber Change n.m. n.m.

Digital Subscribers 16,500 100,900
Digital Penetration n.m. n.m.
Quarterly Net Digital Subscriber Change n.m. n.m.

DTH Subscribers 35,800 52,700

MMDS Subscribers (2,100) (2,700)

Broadband Internet
Broadband Internet Homes Serviceable 231,600 671,500
Broadband Internet Subscribers 92,500 264,800
Penetration n.m. n.m.
Quarterly Net Subscriber Change n.m. n.m.

Telephone
Telephone Homes Serviceable 980,800 1,020,400
Telephone Subscribers 42,000 70,200
Penetration n.m. n.m.
Quarterly Net Subscriber Change 876.7% 178.1%

Total RGUs 254,200 552,800
Quarterly Net Subscriber Change n.m. n.m.
ARPU per RGU (2) 9.0% 16.6%
Constant ARPU per RGU (3) 3.4% 8.1%

Customer Relationships 142,600 163,600
ARPU per Customer Relationship (4) 10.0% n.a.
Constant ARPU per Customer Relationship (5) 4.3% n.a.

RGUs by region:
Europe (UGC Europe) 218,500 436,700
Chile (VTR) 35,600 115,300
Other 100 800
Total RGUs 254,200 552,800

(1) The operating statistics exclude Noos, Chorus and two other minor
acquisitions which closed in the fourth quarter. Please refer to
page 17 for definitions regarding the Consolidated Operating
Statistics.
(2) ARPU per RGU is calculated as follows: average monthly broadband
revenue for the period as indicated, divided by the average of the
opening and closing RGUs for the period.
(3) Constant ARPU per RGU is calculated as follows: average monthly
broadband revenue converted at the same average exchange rates for
the three months ended December 31, 2004 for each period as
indicated, divided by the average of the opening and closing RGUs for
the period.
(4) ARPU per Customer Relationship is calculated as follows: average
monthly broadband revenue for the period as indicated, divided by the
average of the opening and closing Customer Relationships for the
period.
(5) Constant ARPU per Customer Relationship is calculated as follows:
average monthly broadband revenue converted at the same average
exchange rates for the three months ended December 31, 2004 for each
period as indicated, divided by the average of the opening and
closing Customer Relationships for the period.

Capital Expenditures Update

The table below highlights our capital expenditures per NCTA cable industry guidelines:

12 months 12 months Year/Year
(thousands) Dec-04 Dec-03 Change
Customer Premises Equipment $146,944 $94,739 55%
Commercial -- -- --
Scaleable Infrastructure 73,633 42,755 72%
Line Extensions 31,686 67,104 -53%
Upgrade/Rebuild 48,755 28,430 71%
Support Capital 92,087 70,670 30%
Noos & Chorus 53,383 -- n.m.
Intangibles & Other 33,645 29,426 14%
Total Capital Expenditures $480,133 $333,124 44%
Capital Expenditures (% of Revenue) 19.0% 17.6% 8%

3 months 3 months Year/Year 3 months Sequential
(thousands) Dec-04 Dec-03 Change Sep-04 Change
Customer Premises
Equipment $45,271 $21,113 114% $35,193 29%
Commercial -- -- -- -- --
Scaleable
Infrastructure 27,744 18,634 49% 17,214 61%
Line Extensions 12,096 15,638 -23% 10,317 17%
Upgrade/Rebuild 17,920 12,923 39% 13,597 32%
Support Capital 32,079 20,137 59% 19,642 63%
Noos & Chorus 44,397 -- n.m. 8,986 394%
Intangibles & Other 8,069 16,981 -52% 11,747 -31%
Total Capital
Expenditures $187,576 $105,426 78% $116,696 61%
Capital Expenditures
(% of Revenue) 24.2% 20.4% 18% 17.7% 37%

Consolidated Operating Data

31-Dec-04

Two-way
Homes Homes Customer Total
Passed (1) Passed (2) Relationships(3) RGUs (4)
Europe:
The
Netherlands 2,620,000 2,497,800 2,289,000 2,921,700
France 4,580,700 3,316,500 1,612,000 2,382,700
Austria 946,900 943,700 578,000 931,400
Norway 486,600 244,400 341,000 447,800
Sweden 421,600 281,200 292,300 406,000
Ireland 317,300 24,200 202,700 217,500
Belgium 155,500 155,500 148,100 164,800
Total Western
Europe 9,528,600 7,463,300 5,463,100 7,471,900

Poland 1,884,800 569,100 1,000,700 1,047,600
Hungary 1,006,500 675,800 922,200 1,003,400
Czech Republic 729,000 322,200 401,200 428,200
Romania 518,700 3,900 357,100 357,300
Slovak
Republic 413,200 168,800 298,400 306,300
Total Central
and Eastern
Europe 4,552,200 1,739,800 2,979,600 3,142,800
Total
Europe 14,080,800 9,203,100 8,442,700 10,614,700

Latin America:
Chile 1,793,900 1,070,700 636,000 1,009,300
Brazil 15,400 15,400 15,400 16,400
Peru 66,800 30,300 13,900 15,600
Total Latin
America 1,876,100 1,116,400 665,300 1,041,300
Grand
Total 15,956,900 10,319,500 9,108,000 11,656,000

Video
Analog Cable Digital Cable DTH MMDS
Subscribers(5) Subscribers(6) Subscribers(7) Subscribers(8)
Europe:
The
Netherlands 2,285,500 56,700 -- --
France 1,523,200 545,800 -- --
Austria 501,400 35,000 -- --
Norway 341,000 35,400 -- --
Sweden 292,300 37,700 -- --
Ireland 112,900 14,500 -- 89,000
Belgium 134,900 -- -- --
Total Western
Europe 5,191,200 725,100 -- 89,000

Poland 994,200 -- -- --
Hungary 720,900 -- 140,400 --
Czech Republic 295,700 -- 90,100 --
Romania 357,000 -- -- --
Slovak
Republic 250,300 -- 14,600 32,200
Total Central
and Eastern
Europe 2,618,100 -- 245,100 32,200
Total
Europe 7,809,300 725,100 245,100 121,200

Latin America:
Chile 504,600 -- 4,500 13,900
Brazil -- -- -- 15,300
Peru 12,400 -- -- --
Total
Latin
America 517,000 -- 4,500 29,200
Grand
Total 8,326,300 725,100 249,600 150,400

Internet Telephony
Homes Homes
Serviceable(9) Subscribers(10) Serviceable(11) Subscribers(12)

Europe:
The
Netherlands 2,497,800 397,400 2,250,500 182,100
France 3,316,500 247,100 707,800 66,600
Austria 943,700 242,500 910,400 152,500
Norway 244,400 48,500 151,200 22,900
Sweden 281,200 76,000 -- --
Ireland 14,500 600 24,200 500
Belgium 155,500 29,900 -- --
Total Western
Europe 7,453,600 1,042,000 4,044,100 424,600

Poland 569,100 53,400 -- --
Hungary 675,800 73,200 415,600 68,900
Czech Republic 322,200 42,400 -- --
Romania 3,900 300 -- --
Slovak
Republic 162,100 9,200 -- --
Total Central
and Eastern
Europe 1,733,100 178,500 415,600 68,900
Total
Europe 9,186,700 1,220,500 4,459,700 493,500

Latin America:
Chile 1,070,700 176,300 1,052,700 310,000
Brazil 15,400 1,100 -- --
Peru 30,300 3,200 -- --
Total Latin
America 1,116,400 180,600 1,052,700 310,000
Grand
Total 10,303,100 1,401,100 5,512,400 803,500

(1) "Homes Passed" are homes that can be connected to our networks
without further extending the distribution plant, except for DTH and
MMDS homes. With respect to DTH, we do not count homes passed. With
respect to MMDS, one home passed is equal to one MMDS subscriber.
(2) "Two-way Homes Passed" are homes passed by our networks where
customers can request and receive the installation of a two-way
addressable set-top converter, cable modem, transceiver and/or voice
port which, in most cases, allows for the provision of video and
Internet services and, in some cases, telephony services.
(3) "Customer Relationships" are the number of customers who receive at
least one level of service without regard to which service(s) they
subscribe.
(4) "Revenue Generating Unit" is separately an Analog Cable Subscriber,
Digital Cable Subscriber, DTH Subscriber, MMDS Subscriber, Internet
Subscriber or Telephony Subscriber. A home may contain one or more
RGUs. For example, if a residential customer in our Austrian system
subscribed to our analog cable service, digital cable service,
telephony service and high-speed broadband Internet access service,
the customer would constitute four RGUs. "Total RGUs" is the sum of
Analog, Digital Cable, DTH, MMDS, Internet and Telephony
Subscribers. In some cases, non-paying subscribers are counted as
subscribers during their free promotional service period. Some of
these subscribers choose to disconnect after their free service
period.
(5) "Analog Cable Subscriber" is comprised of basic cable video
customers that are counted on a per connection basis. We have
approximately 1.34 million "lifeline" customers that are counted on
a per connection basis, representing the least expensive regulated
tier of basic cable service, with only a few channels. Commercial
contracts such as hotels and hospitals are counted on an equivalent
bulk unit (EBU) basis. EBU is calculated by dividing the bulk price
charged to accounts in an area by the most prevalent price charged
to non-bulk residential customers in that market for the comparable
tier of service.
(6) "Digital Cable Subscriber" is a customer with one or more digital
converter boxes that receives our digital video service. A Digital
Cable Subscriber is counted as one Analog Cable Subscriber in column
5 of the table above whether such customer receives only our digital
video service or both analog and digital video services.
(7) "DTH Subscriber" is a home or commercial unit that receives our
video programming broadcast directly to the home via a
geosynchronous satellite.
(8) "MMDS Subscriber" is a home or commercial unit that receives our
video programming via a multipoint microwave (wireless) distribution
system.
(9) "Internet Homes Serviceable" are homes that can be connected to our
broadband networks, where customers can request and receive Internet
access services.
(10) "Internet Subscriber" is a home or commercial unit with one or more
cable modems connected to our broadband networks, where a customer
has requested and is receiving high-speed Internet access services.
(11) "Telephony Homes Serviceable" are homes that can be connected to our
networks, where customers can request and receive voice services.
(12) "Telephony Subscriber" is a home or commercial unit connected to our
networks, where a customer has requested and is receiving voice
services.

Source: UnitedGlobalCom, Inc.

CONTACT: Investors, UGC, Richard S.L. Abbott, +1-303-220-6682, or
ir@unitedglobal.com, or UGC Europe, Claire Appleby, +44-20-7-838-2004, or
ir@ugceurope.com; or Bert Holtkamp, Corporate Communications - UGC Europe,
+31-20-778-9447, or communications@ugceurope.com

Web site: http://www.unitedglobal.com/

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