UCOMA Unitedglobalcom (MM)

UGC Reports First Quarter 2005 Results Record Q1 Subscriber Growth; 2005 Guidance Targets Confirmed DENVER, May 10 /PRNewswire-FirstCall/ -- UnitedGlobalCom, Inc. ("UGC")(1) (NASDAQ:UCOMA), today announces operating and financial results for the three months ended March 31, 2005. Highlights for the quarter compared to the same period last year include: * Revenue growth of 46% to $798 million * Operating Cash Flow growth of 37% to $279 million(2) * Net RGU additions of 140,100 (using new method)(3), an increase of 101% * Net loss of $(3) million compared to net loss of $(150) million Mike Fries, President and Chief Executive Officer of UGC said, "We delivered excellent operating and financial results for the first quarter of 2005. We added 140,100 total RGUs during the period, which was more than double last year's net additions in the first quarter, driven by robust broadband data and digital phone sales. At March 31, 2005, we had approximately 11.2 million consolidated RGUs and customer growth has remained strong early in the second quarter. As a result, we believe that we're on track to meet or exceed our full year guidance for 600,000 net new RGUs(3). "On a reported basis, revenue and Operating Cash Flow (OCF) in first quarter 2005 increased 46% and 37%, respectively, in part due to favorable foreign currency (FX) movements. Using the same FX rates in effect during last year's first quarter, our revenue and OCF growth rates were 38% and 28% respectively, well ahead of our full year guidance targets of 20% growth for each of those performance measures." "We have made good progress recently on a number of our key strategic initiatives. In April, we closed on the merger or our Chilean subsidiary, VTR, with Metropolis-Intercom, which will strengthen our market leading position in broadband Internet, multi-channel video and triple-play services. We expect to benefit from a significant reduction in duplicative operating costs and other synergies as a result of the merger over the next 1-2 years. We also expect to generate meaningful synergies from merger of NTL Ireland's business with our Chorus asset, if the transaction receives regulatory approval. The Republic of Ireland is one of the fastest growing economies in Western Europe and we are well positioned to participate in the rapid growth of broadband services there." "In Europe, UPC is poised for the rapid expansion of digital phone (VoIP) services across several new markets. In the meantime, digital phone sales remain strong, averaging over 5,000 per week in the Netherlands and Hungary, and we recently began our commercial VoIP launch in France. We are also aggressively increasing the speeds of our broadband Internet products across Europe beginning with 20+ Mbps 'Extreme' products already launched in the Netherlands, Norway, Belgium, and Sweden. Finally, we recently announced our plans to migrate all of our cable subscribers to digital in the Netherlands, which we expect to begin in the fourth quarter of 2005. As a result of this initiative, we expect to eventually deploy over 2 million digital set-top boxes and enhance our leading position in the Dutch pay-TV marketplace." First Quarter 2005 Results Our 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 quarter ended March 31, 2005 was $798 million, an increase of 46% or $251 million compared to the same period in 2004. Excluding the impact of foreign exchange movements, currency adjusted year-over-year revenue growth was 38% for first quarter 2005, well ahead of our 20% full year 2005 guidance target, as a result of higher average monthly revenue per subscriber (ARPU) and RGU growth. Excluding FX movements as well as acquisitions, organic revenue growth for the first quarter 2005 was 13% compared to the same period last year. Please refer to the table on page 9 for additional information. Total European revenue increased 50% to $711 million for the quarter ended March 31, 2005 compared to the same period last year, primarily due to a 49% increase in our core triple play operation, UPC Broadband. Excluding acquisitions (primarily Noos and Chorus), revenue in Western Europe increased 16% compared to the same period in 2004, while sales in Central and Eastern Europe increased 36% on the same basis. In Chile, revenue at VTR increased 18% for the first quarter 2005 compared to same period last year. Average monthly revenue (ARPU) per RGU, excluding acquisitions, for the three months ended March 31, 2005 was $21.22, an increase of 13% compared to the same period in 2004. Excluding foreign currency movements, the organic increase in ARPU per RGU was approximately 8.6% year-over-year. ARPU per customer relationship was $26.56 for the three months ended March 31, 2005, an increase of 18% from $22.52 compared to the same period in 2004. Excluding foreign currency movements, the organic increase in ARPU per customer relationships was 13%. Operating Cash Flow Operating Cash Flow (OCF) for the quarter ended March 31, 2005 was $279 million, an increase of 37% compared to the prior year. Excluding the impact of FX movements, our OCF growth was 28% compared to the prior year period, significantly above our guidance target of 20% OCF growth for the full year. On an organic basis (excluding FX and the impact of acquisitions), OCF growth was 11% year-over-year. Excluding approximately $7 million of charges associated with the potential business combination with Liberty Media International, our organic cash flow growth rate for the quarter would have been 15%. Please refer to the table on page 10 for additional information. Total European OCF increased 43% to $261 million for the quarter ended March 31, 2005, primarily due to a 39% increase at UPC Broadband. OCF in Western Europe increased 36% to $219 million (including Noos and Chorus), while OCF in Central and Eastern Europe increased 43% to $68 million. Excluding acquisitions (primarily Noos and Chorus), OCF in Western Europe increased 17% to $188 million. In Chile, OCF for the quarter ended March 31, 2005 increased 23% to $31 million. For the quarter ended March 31, 2005, our consolidated OCF margin was 35.0% compared to 37.3% for the same period last year. On a sequential basis, however, our consolidated OCF margin increased by approximately 400 basis points compared to 31.0% in the fourth quarter of 2004 when our OCF margin suffered primarily as a result of costs associated with the settlement of a legal dispute for a Dutch programming contract (MovieCo). Excluding the results of Noos and Chorus and approximately $7 million of costs associated with the potential business combination with Liberty Media International, our first quarter overall OCF margin was 38.0% compared to 37.3% for the same period last year due primarily to the inclusion of results from lower margin broadband business in France and Ireland in the current period. Net Income (Loss) Net loss was $(3) million or ($0.00) earnings per share for the quarter ended March 31, 2005, which compares with a net loss of $(150) million or $(0.21) per share in last year's first quarter. Free Cash Flow and Capital Expenditures Free Cash Flow (FCF) for the quarter ended March 31, 2005 was negative $35 million due in part to an approximate $50 million payment related to the litigation settlement of a Dutch programming contract (MovieCo). Excluding that payment, our FCF for the period would have been a positive $14 million, which compares to $36 million that we generated in last year's first quarter. Subscriber acquisition costs and corresponding equipment costs were materially higher in this year's first quarter compared to last year given the substantial increase in our net RGU additions. Capital expenditures for the quarter ended March 31, 2005 were $167 million (21% of revenues) compared to $80 million (15% of revenues) for first quarter 2004. The primary reason for the increase was higher spending on customer premise equipment (CPE) due to the significant increase in RGU growth in first quarter 2005 compared to the same period last year, as well as foreign currency movements. Balance Sheet, Leverage, and Liquidity At March 31, 2005, total long-term debt was $4.9 billion and we had cash and cash equivalents (including short-term liquid investments) of $1.1 billion. Net debt to annualized Operating Cash Flow(4) or our consolidated leverage ratio was 3.4x compared to 3.1x for the same period in the prior year, primarily as a result of increased borrowings to finance acquisitions, which were financed with additional debt and cash on hand. In addition to our cash balances, we currently have EUR 1.0 billion of availability under the revolvers of our European credit facility subject to covenant compliance. Together with the market value of our interests in the publicly traded securities of SBS Broadcasting and Austar United, and including our cash balances at March 31, 2005, our total liquidity was approximately $3.0 billion using the market values and FX rates in effect on that date. Operating Statistics Total RGUs were approximately 11.2 million at March 31, 2005. UGC management has recently implemented a change in how we analyze RGUs with respect to our video business. As a result, we no longer "double count" a digital video subscriber also as an analog video subscriber. We are providing our subscriber results under both this "new" method as well as our "old" method for comparative purposes. During the first quarter we added 140,100 net new RGUs, which represents a 101% increase from last year's first quarter RGU additions, primarily driven by strength in our broadband Internet and digital phone (VoIP) products in Europe. Under the "old method" of double counting digital RGUs currently used by most U.S. cable companies, we added 163,100 net new RGUs during the quarter, a 77% improvement compared to the same period last year. Over the past 12 months and excluding acquisitions, the Company has added 535,700 net new RGUs on an organic basis. In terms of net additions by product, we added a total of 102,900 broadband Internet subscribers during the first quarter, including 88,300 in Europe and 14,500 in Chile. As of March 31, 2005, our broadband Internet subscriber base exceeds 1.5 million total RGUs. Telephony additions were 44,000 for the first quarter primarily driven by the early success of our digital phone (VoIP) launches in the Netherlands and Hungary. We expect our digital phone RGU additions to increase over the next several quarters as we launch the product across additional markets in Europe. 2005 Guidance We are confirming all 2005 guidance targets as set forth in our Fourth Quarter and Full Year 2004 Results press release and presentation dated March 14, 2005, copies of which are available on our website at http://www.unitedglobal.com/. 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 March 31, 2005, UGC's networks reached approximately 16.1 million homes passed and served over 11.2 million RGUs, including approximately 8.8 million video subscribers, 1.5 million broadband Internet subscribers, and 847,500 telephone subscribers. Forward-Looking Statements: Except for historical information contained herein, this press release contains forward-looking statements, including guidance given for 2005, expectations about RGU growth, planned increases in the speed of our broadband internet products and anticipated cost savings and synergies from the recent VTR-Metropolis merger. The statement about the Company's proposed business combination with Liberty Media International ("LMI") and acquisition of NTL Ireland 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, regulatory approval for the acquisition of NTL Ireland, 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 Liberty Global, Inc. ("Liberty Global") has filed a Registration Statement on Form S-4 containing a definitive joint proxy statement/prospectus related to the proposed business combination between LMI and UGC. UGC STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE BUSINESS COMBINATION. Investors may obtain a copy of the definitive joint proxy statement/prospectus and other documents related to the business combination free of charge at the SEC's website (http://www.sec.gov/). In addition, copies of the definitive joint proxy statement/prospectus 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 The directors and executive officers of UGC and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed business combination. Information regarding UGC's directors and executive officers and other participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is available in the definitive joint proxy statement/prospectus contained in the above-referenced Registration Statement. Please visit http://www.unitedglobal.com/ for further information. (1) Also referred to as the "Company," "we," "us," "our," and similar terms. (2) Please see page 11 for an explanation of Operating Cash Flow and a reconciliation of Operating Cash Flow to Net Income (Loss). (3) RGUs or Revenue Generating Units as determined by our "new" methodology to eliminate the double counting of digital video RGUs. Please see footnote (4) for more detail. (4) Represents net debt / annualized Operating Cash Flow for the three months ended March 31, 2005. UnitedGlobalCom, Inc. Condensed Consolidated Balance Sheets (In thousands, except par value and number of shares) (Unaudited) March 31, December 31, Assets 2005 2004 Current assets: Cash and cash equivalents $1,066,084 $1,028,993 Restricted cash 16,866 43,640 Short-term liquid investments 18,361 48,965 Trade receivables, net 177,375 184,222 Other receivables 66,874 134,110 Other current assets, net 150,171 98,525 Total current assets 1,495,731 1,538,455 Long-term assets: Investments in affiliates, accounted for using the equity method 311,845 345,790 Other investments 277,819 262,091 Property and equipment, net 3,984,935 4,193,095 Goodwill 2,176,803 2,170,705 Intangible assets, net 414,573 445,172 Other assets, net 216,646 178,989 Total assets $8,878,352 $9,134,297 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $313,866 $345,535 Accrued liabilities 409,160 462,927 Subscriber advance payments and deposits 343,903 332,765 Accrued interest 32,403 88,608 Notes payable, related party 103,990 108,414 Current portion of debt 7,138 34,325 Other current liabilities 50,784 49,675 Total current liabilities 1,261,244 1,422,249 Long-term liabilities: Long-term portion of debt 4,791,246 4,818,583 Other long-term liabilities 395,277 375,103 Total liabilities 6,447,767 6,615,935 Commitments and contingencies Minority interests in subsidiaries 88,978 96,378 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, 413,455,479 and 413,206,357 shares issued, respectively 4,134 4,132 Class B common stock, $0.01 par value, 1,000,000,000 shares authorized, 11,165,777 shares issued 112 112 Class C common stock, $0.01 par value, 400,000,000 shares authorized, 379,603,223 shares issued and outstanding 3,796 3,796 Additional paid-in capital 2,621,810 2,624,159 Deferred compensation (10,671) (1,851) Treasury stock, at cost (67,343) (75,844) Accumulated deficit (359,173) (356,314) Accumulated other comprehensive income 148,942 223,794 Total stockholders' equity 2,341,607 2,421,984 Total liabilities and stockholders' equity $8,878,352 $9,134,297 UnitedGlobalCom, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2005 2004 Statements of Operations Revenue $798,286 $547,342 Operating costs and expenses: Operating (327,240) (214,028) Selling, general and administrative ("SG&A") (191,714) (129,030) Depreciation and amortization (operating) (226,899) (217,694) Restructuring charges and other (operating) (4,269) (4,335) Stock-based compensation (SG&A) (8,738) (61,852) Operating income (loss) 39,426 (79,597) Interest income 7,071 3,328 Interest expense (72,179) (71,733) Foreign currency transaction losses, net (48,132) (21,852) Realized and unrealized gains (losses) on derivative instruments, net 75,339 (4,025) (Losses) gains on extinguishment of debt (11,980) 31,916 Gains on sale of investments 28,300 46 Share in results of affiliates, net (2,380) (2,213) Other expense, net (659) (7,298) Income (loss) before income taxes and other items 14,806 (151,428) Income tax (expense) benefit, net (21,903) 1,293 Minority interests in losses of subsidiaries and other, net 4,238 470 Net income (loss) $(2,859) $(149,665) Earnings per share: Basic and diluted earnings (loss) per share $(0.00) $(0.21) Statements of Comprehensive Income (Loss) Net income (loss) $(2,859) $(149,665) Other comprehensive income (loss): Foreign currency translation adjustments (91,324) (48,091) Net unrealized gains on available-for-sale securities 26,575 19,438 Reclassification adjustment for gains on available-for-sale securities included in net income -- -- Other comprehensive income (loss) before income taxes (64,749) (28,653) Provision for income taxes related to net unrealized gains on available-for-sale securities (10,103) -- Other comprehensive income (loss) (74,852) (28,653) Comprehensive income (loss) $(77,711) $(178,318) UnitedGlobalCom, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended March 31, 2005 2004 Cash Flows from Operating Activities Net income (loss) $(2,859) $(149,665) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 226,899 217,694 Impairment of long-lived assets, restructuring charges and other 4,269 4,335 Stock-based compensation (1,339) 61,852 Accretion of interest on senior notes and amortization of deferred financing costs 10,879 3,186 Unrealized foreign currency transaction gains, net 25,159 13,100 Realized and unrealized (gains) losses on derivative instruments (75,339) 4,025 Losses (gains) on extinguishment of debt 11,980 (31,916) Gains on sale of investments (28,300) (46) Deferred income tax expense (benefit), net 5,816 (5,247) Minority interests in losses of subsidiaries and other, net (4,238) (470) Share in results of affiliates, net 2,380 2,213 Other non-cash items -- 6,894 Change in assets and liabilities: Change in receivables and other assets 28,661 (17,554) Change in accounts payable, accrued liabilities and other (71,850) 7,370 Net cash flows from operating activities 132,118 115,771 Cash Flows from Investing Activities Cash paid for acquisitions, net of cash acquired (139,634) -- Cash paid for acquisition, refunded by seller 56,493 -- Capital expenditures (167,306) (80,210) Purchases of short-term liquid investments (16,233) (17,487) Proceeds from sale of short-term liquid investments 46,869 -- Restricted cash released, net 26,019 6,105 Investments in and loans to affiliates (907) (50) Proceeds from sale of investments in affiliates 35,439 -- Purchase of interest rate caps and swaps (2,559) (14,198) Settlement of interest rate caps and swaps (542) -- Dividends received from affiliates 9,840 4,801 Other 3,631 24 Net cash flows from investing activities (148,890) (101,015) Cash Flows from Financing Activities Issuance of common stock 1,016 1,076,264 Proceeds from issuance of debt 3,327,594 18,773 Repayments of debt (3,184,973) (113,557) Financing costs (44,261) (21,071) Net cash flows from financing activities 99,376 960,409 Effects of Exchange Rates on Cash (45,513) (9,741) Increase in Cash and Cash Equivalents 37,091 965,424 Cash and Cash Equivalents, Beginning of Period 1,028,993 310,361 Cash and Cash Equivalents, End of Period $1,066,084 $1,275,785 Revenue The following table provides an analysis of our revenue by business segment for the three months ended March 31, 2005 and 2004 (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, Slovenian Tolar for Slovenia, 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 and UGC corporate. Three Months Ended March 31, Increase (Decrease) Increase Excluding (Decrease) F/X Effects 2005 2004 $ % $ % Europe (UGC Europe): UPC Broadband The Nether- lands $201,442 $171,595 $29,847 17.4% $20,420 11.9% Austria 83,448 74,720 8,728 11.7% 4,857 6.5% France (excluding Noos) 36,964 31,245 5,719 18.3% 3,999 12.8% France (Noos) 94,894 -- 94,894 -- 94,894 -- Norway 32,028 25,616 6,412 25.0% 3,509 13.7% Sweden 24,281 21,987 2,294 10.4% 901 4.1% Belgium 10,122 8,971 1,151 12.8% 682 7.6% Ireland 23,261 -- 23,261 -- 23,261 -- Total Western Europe 506,440 334,134 172,306 51.6% 152,523 45.6% Hungary 67,379 50,695 16,684 32.9% 9,733 19.2% Poland 34,729 23,172 11,557 49.9% 4,750 20.5% Czech Republic 25,058 19,398 5,660 29.2% 2,405 12.4% Slovak Republic 10,008 7,973 2,035 25.5% 1,013 12.7% Romania 8,833 6,076 2,757 45.4% 1,659 27.3% Slovenia 4,099 -- 4,099 -- 4,099 -- Total Central and Eastern Europe 150,106 107,314 42,792 39.9% 23,659 22.0% Corporate and other 10,943 6,699 4,244 63.4% 3,731 55.7% Total UPC Broad- band 667,489 448,147 219,342 48.9% 179,913 40.1% chellomedia Priority Telecom 33,363 30,131 3,232 10.7% 1,687 5.6% Media (including ZoneVision) 27,808 6,784 21,024 309.9% 19,728 290.8% Investments 235 219 16 7.3% 5 2.3% Total chello- media 61,406 37,134 24,272 65.4% 21,420 57.7% Intercompany elimin- ations (17,880) (11,656) (6,224) (53.4%) (5,397) (46.3%) Total Europe 711,015 473,625 237,390 50.1% 195,936 41.4% Latin America: Broadband Chile (VTR) 84,889 71,683 13,206 18.4% 11,829 16.5% Brazil, Peru and other 2,077 2,034 43 2.1% 43 2.1% Total Latin America 86,966 73,717 13,249 18.0% 11,872 16.1% Corporate and other 305 -- 305 -- 305 -- Total UGC $798,286 $547,342 $250,944 45.8% $208,113 38.0% Operating Cash Flow The following table provides an analysis of our Operating Cash Flow by business segment for the three months ended March 31, 2005 and 2004 (in thousands, except percentages). The first two columns present our Operating Cash Flow by segment 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, Slovenian Tolar for Slovenia, 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 and UGC corporate. Three Months Ended March 31, Increase (Decrease) Increase Excluding (Decrease) F/X Effects 2005 2004 $ % $ % Europe (UGC Europe): UPC Broadband The Nether- lands $113,168 $97,654 $15,514 15.9% $10,270 10.5% Austria 39,418 34,831 4,587 13.2% 2,752 7.9% France (other than Noos) 5,939 3,861 2,078 53.8% 1,803 46.7% France (Noos) 23,810 -- 23,810 -- 23,810 -- Norway 12,587 8,742 3,845 44.0% 2,701 30.9% Sweden 11,749 10,851 898 8.3% 228 2.1% Belgium 5,287 4,760 527 11.1% 281 5.9% Ireland 6,778 -- 6,778 -- 6,778 -- Total Western Europe 218,736 160,699 58,037 36.1% 48,623 30.3% Hungary 30,175 22,238 7,937 35.7% 4,826 21.7% Poland 13,601 8,423 5,178 61.5% 2,510 29.8% Czech Republic 12,223 9,825 2,398 24.4% 815 8.3% Slovak Republic 5,313 3,884 1,429 36.8% 889 22.9% Romania 4,549 2,879 1,670 58.0% 1,106 38.4% Slovenia 1,761 -- 1,761 -- 1,761 -- Total Central and Eastern Europe 67,622 47,249 20,373 43.1% 11,907 25.2% Corporate and other (29,479) (23,320) (6,159) (26.4%) (4,804) (20.6%) Total UPC Broad- band 256,879 184,628 72,251 39.1% 55,726 30.2% chellomedia Priority Telecom 4,808 4,446 362 8.1% 138 3.1% Media (152) (6,195) 6,043 (97.5%) 6,053 (97.7%) Investments (301) 119 (420) (352.9%) (406) (341.2%) Total chello- media 4,355 (1,630) 5,985 (367.2%) 5,785 (354.9%) Total Europe 261,234 182,998 78,236 42.8% 61,511 33.6% Latin America: Broadband Chile (VTR) 30,675 25,030 5,645 22.6% 5,182 20.7% Brazil, Peru and other 306 90 216 240.0% 216 240.0% Total Latin America 30,981 25,120 5,861 23.3% 5,398 21.5% Corporate and other (12,883) (3,834) (9,049) (236.0%) (9,049) (236.0%) Total UGC $279,332 $204,284 $75,048 36.7% $57,860 28.3% 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 their 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 other 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 (thousands) Q1 2005 Q1 2004 Q4 2004 Total segment Operating Cash Flow $279,332 $204,284 $231,743 Depreciation and amortization (226,899) (217,694) (256,745) Restructuring charges and other (4,269) (4,335) (41,541) Stock-based compensation (8,738) (61,852) (52,767) Operating income (loss) 39,426 (79,597) (119,310) Interest expense, net (65,108) (68,405) (77,653) Realized and unrealized gains (losses) on derivative instruments, net 75,339 (4,025) (96,976) Foreign currency transaction losses, net (48,132) (21,852) 53,392 (Losses) gains on extinguishment of debt (11,980) 31,916 -- Gains on sale of investments 28,300 46 12,096 Share in results of affiliates, net (2,380) (2,213) 5,766 Other expense, net (659) (7,298) (3,682) Income (loss) before income taxes and other items 14,806 (151,428) (226,367) Income taxes and other (17,665) 1,763 125,259 Net income (loss) ($2,859) ($149,665) ($101,108) 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: 3 months 3 months Year/Year 3 months Sequential (thousands) Mar-05 Mar-04 Change Dec-04 Change Net cash flows from operating activities $132,118 $115,771 14% $213,858 -38% Capital expenditures (167,306) (80,210) 109% (175,179) -4% Free cash flow ($35,188) $35,561 -199% $38,679 -191% UPC Distribution, B.V. 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 3 months 3 months Sequential (in thousands of Euros) Mar-05 Dec-04 Change (%) Triple Play: The Netherlands 153,474 152,839 0.4% Austria 63,577 60,593 4.9% Belgium 7,712 7,937 -2.8% Czech Republic 19,091 16,656 14.6% Norway 24,401 24,242 0.7% Hungary 51,334 47,982 7.0% France (other than Noos) 28,162 26,922 4.6% France (Noos) 72,297 73,899 -2.2% Slovenia 3,123 -- n.a. Poland 26,459 25,055 5.6% Sweden 18,499 18,439 0.3% Slovak 7,625 6,854 11.2% Romania 6,730 6,347 6.0% Total Triple Play UPC Broadband 482,484 467,765 3.1% Corporate and Other 8,338 5,548 50.3% Total UPC Holding BV 490,822 473,313 3.7% Operating Cash Flow 3 months 3 months Sequential (in thousands of Euros) Mar-05 Dec-04 Change (%) Triple Play: The Netherlands 86,223 80,665 6.9% Austria 30,033 24,537 22.4% Belgium 4,028 3,848 4.7% Czech Republic 9,313 6,566 41.8% Norway 9,590 8,550 12.2% Hungary 22,991 19,325 19.0% France (other than Noos) 4,525 2,354 92.2% France (Noos) 17,378 18,750 -7.3% Slovenia 1,342 -- n.a. Poland 10,363 7,665 35.2% Sweden 8,952 7,179 24.7% Slovak 4,048 2,543 59.2% Romania 3,466 2,153 61.0% Total Triple Play UPC Broadband 212,252 184,135 15.3% Corporate and Other (16,697) (11,394) 46.5% Total UPC Holding BV 195,555 172,741 13.2% 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. In January 2005, we changed the structure of the internal organization to manage our Internet access business, called chello broadband, within the UPC Broadband division rather than within the chellomedia division. The segment information for the three months ended December 31, 2004 has been restated to reflect this change. Consolidated Operating Statistics The table below shows operating statistics for UGC on a consolidated basis: As of As of As of As of Mar-05 Dec-04 Sep-04 Jun-04 Video Homes Passed 16,129,800 15,956,900 15,510,100 12,323,500 Basic Analog Subscribers 7,677,200 7,604,500 7,443,300 6,882,600 Basis Penetration 47.6% 47.7% 48.0% 55.8% Quarterly Net Basic Subscriber Change (1) (34,300) 46,100 (14,200) (37,100) Digital Subscribers 719,200 696,200 654,600 191,500 Digital Penetration 4.5% 4.4% 4.2% 1.6% Quarterly Net Digital Subscriber Change (1) 23,000 27,100 28,100 33,200 DTH Subscribers 250,400 245,100 209,000 208,900 MMDS Subscribers 149,600 150,400 63,500 63,100 Broadband Internet Broadband Internet Homes Serviceable 10,536,700 10,303,100 10,032,200 7,326,900 Broadband Internet Subscribers 1,514,400 1,401,100 1,299,800 1,031,000 Penetration 14.4% 13.6% 13.0% 14.1% Quarterly Net Subscriber Change (1) 102,900 98,300 60,700 47,700 Telephone Telephone Homes Serviceable 5,675,100 5,512,400 4,507,400 4,488,500 Telephone Subscribers 847,500 803,500 761,000 756,700 Penetration 14.9% 14.6% 16.9% 16.9% Quarterly Net Subscriber Change (1) 44,000 42,000 4,300 14,900 Total RGUs 11,158,300 10,900,800 10,431,200 9,133,800 Quarterly Net Subscriber Change (1) 140,100 247,500 79,400 68,700 ARPU per RGU (2) $21.22 $20.69 $18.98 $18.52 Constant ARPU per RGU (3) $21.22 $21.08 $20.40 $20.17 Customer Relationships 9,235,800 9,108,000 8,739,200 7,633,200 ARPU per Customer Relationship (4) $26.56 $25.62 $23.30 $22.51 Constant ARPU per Customer Relationship (5) $26.56 $26.11 $25.04 $24.52 RGUs by region: Europe (UGC Europe) 10,095,100 9,864,000 9,430,400 8,162,400 Chile (VTR) 1,031,400 1,004,800 968,900 939,700 Other 31,800 32,000 31,900 31,700 Total RGUs 11,158,300 10,900,800 10,431,200 9,133,800 (1) The net adds for each period as shown include the net gain from all operations, including acquisitions, but exclude the impact from acquisitions when they were originally acquired. (2) ARPU per RGU is for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and 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 for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and is calculated as follows: average monthly broadband revenue converted at the same average exchange rates for the three months ended March 31, 2005 for each period as indicated, divided by the average of the opening and closing RGUs for the period. (4) ARPU per Customer Relationship is for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and 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 for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and is calculated as follows: average monthly broadband revenue converted at the same average exchange rates for the three months ended March 31, 2005 for each period as indicated, divided by the average of the opening and closing Customer Relationships for the period. Consolidated Operating Statistics The table below shows operating statistics for UGC on a consolidated basis: Growth Growth As of As of vs. vs. Mar-04 Dec-03 4Q04 (1) 1Q04 (1) Video Homes Passed 12,288,800 12,260,100 49,200 202,200 Basic Analog Subscribers 6,919,700 6,948,400 (34,300) (39,500) Basis Penetration 56.3% 56.7% n.m. n.m. Quarterly Net Basic Subscriber Change (1) (29,100) 36,200 n.m. n.m. Digital Subscribers 158,300 135,600 23,000 111,400 Digital Penetration 1.3% 1.1% n.m. n.m. Quarterly Net Digital Subscriber Change (1) 22,700 6,200 n.m. n.m. DTH Subscribers 199,000 191,500 5,300 51,400 MMDS Subscribers 63,000 64,100 (800) (2,400) Broadband Internet Broadband Internet Homes Serviceable 7,127,100 7,045,000 51,400 652,900 Broadband Internet Subscribers 983,300 922,700 102,900 309,600 Penetration 13.8% 13.1% n.m. n.m. Quarterly Net Subscriber Change (1) 60,600 56,200 n.m. n.m. Telephone Telephone Homes Serviceable 4,467,700 4,467,800 162,700 1,183,200 Telephone Subscribers 741,800 732,800 44,000 105,200 Penetration 16.6% 16.4% n.m. n.m. Quarterly Net Subscriber Change (1) 9,000 15,100 n.m. n.m. Total RGUs 9,065,100 8,995,100 140,100 535,700 Quarterly Net Subscriber Change (1) 69,600 141,600 n.m. n.m. ARPU per RGU (2) $18.71 $17.74 2.6% 13.4% Constant ARPU per RGU (3) $19.54 $19.51 0.7% 8.6% Customer Relationships 7,625,000 7,624,300 ARPU per Customer Relationship (4) $22.52 n.a. 3.7% 17.9% Constant ARPU per Customer Relationship (5) $23.51 n.a. 1.7% 13.0% RGUs by region: Europe (UGC Europe) 8,124,100 8,075,400 113,700 413,500 Chile (VTR) 909,400 888,500 26,600 122,000 Other 31,600 31,200 (200) 200 Total RGUs 9,065,100 8,995,100 140,100 535,700 (1) The net adds for each period as shown include the net gain from all operations, including acquisitions, but exclude the impact from acquisitions when they were originally acquired. (2) ARPU per RGU is for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and 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 for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and is calculated as follows: average monthly broadband revenue converted at the same average exchange rates for the three months ended March 31, 2005 for each period as indicated, divided by the average of the opening and closing RGUs for the period. (4) ARPU per Customer Relationship is for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and 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 for organic operations only and excludes acquisitions (i.e., Noos, Chorus and Telemach) and is calculated as follows: average monthly broadband revenue converted at the same average exchange rates for the three months ended March 31, 2005 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: (thousands) 3 months 3 months Year/Year 3 months Sequential Mar-05 Mar-04 Change Dec-04 Change Customer Premises Equipment $48,110 $28,182 71% $45,271 6% Commercial 37 -- n.m. -- n.m. Scaleable Infrastructure 17,179 11,989 43% 27,744 -38% Line Extensions 18,116 11,797 54% 12,096 50% Upgrade/Rebuild 13,280 5,386 147% 17,920 -26% Support Capital 36,079 17,221 110% 32,079 12% Acquisitions (1) 22,147 0 n.m. 31,999 -31% Intangibles & Other 12,358 5,635 119% 8,070 53% Total Capital Expenditures $167,306 $80,210 109% $175,179 -4% Capital Expenditures (% of Revenue) 21.0% 14.7% 43% 23.4% -10% (1) Includes Noos, Chorus, Telemach and Zone Vision. Consolidated Operating Data March 31, 2005 Video Analog Digital Two-way Customer Cable Cable Homes Homes Relation- Total Subscri- Subscri- Passed(1) Passed(2) ships(3) RGUs(4) bers(5) bers(6) Europe: The Nether- lands 2,629,500 2,505,600 2,272,200 2,902,300 2,213,400 55,200 France 4,588,700 3,358,800 1,616,700 1,831,200 963,200 537,500 Austria 948,700 945,500 575,600 902,500 463,700 37,200 Norway 487,800 250,200 344,800 417,400 311,200 31,000 Sweden 421,600 282,300 293,800 373,800 252,100 41,700 Ireland 317,900 29,400 201,300 202,200 95,300 16,600 Belgium 155,900 155,900 147,100 166,300 134,900 -- Total Western Europe 9,550,100 7,527,700 5,451,500 6,795,700 4,433,800 719,200 Poland 1,886,800 582,500 997,500 1,053,200 990,500 -- Hungary 1,011,500 706,600 940,700 1,023,900 719,700 -- Czech Republic 730,300 328,200 403,500 435,800 294,500 -- Romania 518,700 4,400 362,000 362,300 361,800 -- Slovak Republic 420,700 193,700 296,800 306,800 248,200 -- Slovenia 123,700 87,500 106,000 117,400 106,000 -- Total Central and Eastern Europe 4,691,700 1,902,900 3,106,500 3,299,400 2,720,700 -- Total Europe 14,241,800 9,430,600 8,558,000 10,095,100 7,154,500 719,200 Latin America: Chile 1,805,800 1,082,000 649,000 1,031,400 510,400 -- Brazil 15,400 15,100 15,100 16,200 -- -- Peru 66,800 30,300 13,700 15,600 12,300 -- Total Latin America 1,888,000 1,127,400 677,800 1,063,200 522,700 -- Grand Total 16,129,800 10,558,000 9,235,800 11,158,300 7,677,200 719,200 Grand Total -Old Method 16,129,800 10,558,000 9,235,800 11,877,500 8,396,400 719,200 (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 digital cable service, telephony service and high-speed broadband Internet access service, the customer would constitute three 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. In addition, we recently modified our RGU count methodology whereby a Digital Cable Subscriber is not counted as an Analog Cable Subscriber as well, thereby reducing RGUs accordingly. (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. As mentioned above, we no longer include a Digital Cable Subscriber as an Analog Cable Subscriber as well. (6) "Digital Cable Subscriber" is a customer with one or more digital converter boxes that receives our digital video service as just one customer. Prior to March 31, 2005, we counted certain customers, primarily at Noos, with two digital converter boxes as two customers, instead of one. As of March 31, 2005, we modified our methodology and adjusted our prior Digital Cable Subscriber count accordingly. (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. Consolidated Operating Data March 31, 2005 Video Internet Telephone DTH MMDS Homes Homes Subscri- Subscri- Service- Subscri- Service- Subscri- bers(7) bers(8) able(9) bers(10) able(11) bers(12) Europe: The Nether- lands -- -- 2,505,600 420,900 2,380,900 212,800 France -- -- 3,358,800 260,400 707,800 70,100 Austria -- -- 945,400 249,500 912,200 152,100 Norway -- -- 250,200 52,800 153,200 22,400 Sweden -- -- 282,300 80,000 -- -- Ireland -- 89,000 19,700 900 24,200 400 Belgium -- -- 155,900 31,400 -- -- Total Western Europe -- 89,000 7,517,900 1,095,900 4,178,300 457,800 Poland -- -- 582,500 62,700 -- -- Hungary 146,000 -- 706,600 85,300 426,100 72,900 Czech Republic 89,900 -- 328,200 51,400 -- -- Romania -- -- 4,400 500 -- -- Slovak Republic 14,500 32,100 182,200 12,000 -- -- Slovenia -- -- 87,500 11,400 -- -- Total Central and Eastern Europe 250,400 32,100 1,891,400 223,300 426,100 72,900 Total Europe 250,400 121,100 9,409,300 1,319,200 4,604,400 530,700 Latin America: Chile -- 13,400 1,082,000 190,800 1,070,700 316,800 Brazil -- 15,100 15,100 1,100 -- -- Peru -- -- 30,300 3,300 -- -- Total Latin America -- 28,500 1,127,400 195,200 1,070,700 316,800 Grand Total 250,400 149,600 10,536,700 1,514,400 5,675,100 847,500 Grand Total -Old Method 250,400 149,600 10,536,700 1,514,400 5,675,100 847,500 (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 digital cable service, telephony service and high-speed broadband Internet access service, the customer would constitute three 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. In addition, we recently modified our RGU count methodology whereby a Digital Cable Subscriber is not counted as an Analog Cable Subscriber as well, thereby reducing RGUs accordingly. (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. As mentioned above, we no longer include a Digital Cable Subscriber as an Analog Cable Subscriber as well. (6) "Digital Cable Subscriber" is a customer with one or more digital converter boxes that receives our digital video service as just one customer. Prior to March 31, 2005, we counted certain customers, primarily at Noos, with two digital converter boxes as two customers, instead of one. As of March 31, 2005, we modified our methodology and adjusted our prior Digital Cable Subscriber count accordingly. (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. DATASOURCE: UnitedGlobalCom, Inc. CONTACT: Richard S.L. Abbott, Investor Relations - UGC, +1-303-220-6682, , or Bert Holtkamp, Corporate Communications - UGC Europe, + 31 (0) 20 778 9447, , or Claire Appleby, Investor Relations - UGC Europe, +44 20 7 838 2004,

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