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:LBTYANASDAQ: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
http://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
http://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. DATASOURCE:
UnitedGlobalCom, Inc. CONTACT: Investors, UGC, Richard S.L. Abbott,
+1-303-220-6682, or , or UGC Europe, Claire Appleby,
+44-20-7-838-2004, or ; or Bert Holtkamp, Corporate Communications
- UGC Europe, +31-20-778-9447, or Web site:
http://www.unitedglobal.com/
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