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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

(Mark One)

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarter ended March 31, 2002

or

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File No. 000-25365

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United Pan-Europe Communications N.V.(Exact name of Registrant as specified in its charter)

The Netherlands(State or other jurisdiction of
incorporation or organization)

98-0191997(IRS Employer Identification No.)Boeing Avenue 53,
Schiphol Rijk, The Netherlands(Address of principal executive offices)

1119 PE(zip code)


(31) 20-778-9840(Registrant's telephone number, including area code)

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Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

The
number of shares outstanding of the Registrant's common stock as of May 14, 2002 was 443,417,525 ordinary shares A, including shares represented by American Depository
Receipts.

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UNITED PAN-EUROPE COMMUNICATIONS N.V.    TABLE OF CONTENTS

|                                                                                             |                                                                                                                 | Page
Number
|-------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | -----------
|PART IFINANCIAL INFORMATION                                                                 |                                                                                                                 |            
|Item 1Financial Statements                                                                  |                                                                                                                 | 2          
|                                                                                             | Condensed Consolidated Balance Sheets as of March 31, 2002 (Unaudited) and December 31, 2001                    |            
|                                                                                             | Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2002 and 2001 (Unaudited)  |            
|                                                                                             | Condensed Consolidated Statement of Shareholders' Deficit for the Three Months Ended March 31, 2002 (Unaudited) |            
|                                                                                             | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2002 and 2001 (Unaudited)  |            
|                                                                                             | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                |            
|Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                                 | 26         
|Item 3Quantitative and Qualitative Disclosure About Market Risk                             |                                                                                                                 | 41         
|PART IIOTHER INFORMATION                                                                    |                                                                                                                 |            
|Item 3Defaults Upon Senior Securities                                                       |                                                                                                                 | 49         
|Item 5Other Information                                                                     |                                                                                                                 | 50         
|Item 6Exhibits and Reports on Form 8-K                                                      |                                                                                                                 | 57         

1

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PART IFINANCIAL INFORMATION

UNITED PAN-EUROPE COMMUNICATIONS N.V.    CONDENSED CONSOLIDATED BALANCE SHEETS    (Stated in thousands of Euros, except share and per share amounts)

Item 1.    Financial Statements

|                                                    |                                                                                                           | As of
March 31,
2002                        |            | As of
December 31,
2001 |           
|--------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ---------- | ----------------------- | ----------
|
|ASSETS:                                             |                                                                                                           |                                             |            |                         |           
|Current assets                                      |                                                                                                           |                                             |            |                         |           
|                                                    | Cash and cash equivalents                                                                                 |                                             | 641,210    |                         | 855,001   
|                                                    | Restricted cash                                                                                           |                                             | 6,008      |                         | 36,322    
|                                                    | Subscriber receivables, net of allowance for doubtful accounts of 50,758 and 39,990, respectively         |                                             | 135,198    |                         | 142,460   
|                                                    | Costs to be reimbursed by affiliated companies                                                            |                                             | 14,363     |                         | 11,319    
|                                                    | Other receivables                                                                                         |                                             | 55,431     |                         | 77,367    
|                                                    | Deferred financing costs, net                                                                             |                                             | 143,591    |                         | 147,210   
|                                                    | Prepaid expenses and other current assets                                                                 |                                             | 92,522     |                         | 64,494    
|                                                    |                                                                                                           |                                             |            |                         |           
|                                                    |                                                                                                           | Total current assets                        |            | 1,088,323               |           
|Other investments                                   |                                                                                                           | 35,173                                      |            | 32,336                  |           
|Investments in and advances to affiliated companies |                                                                                                           | 166,944                                     |            | 193,648                 |           
|Property, plant and equipment, net                  |                                                                                                           | 3,695,271                                   |            | 3,754,330               |           
|Goodwill and other intangible assets, net           |                                                                                                           | 3,035,826                                   |            | 3,003,503               |           
|Derivative assets                                   |                                                                                                           | 29,012                                      |            | 146,934                 |           
|Other assets                                        |                                                                                                           | 8,777                                       |            | 10,540                  |           
|                                                    |                                                                                                           |                                             |            |                         |           
|                                                    |                                                                                                           | Total assets                                |            | 8,059,326               |           
|                                                    |                                                                                                           |                                             |            |                         |           
|LIABILITIES AND SHAREHOLDERS' DEFICIT:              |                                                                                                           |                                             |            |                         |           
|Current liabilities                                 |                                                                                                           |                                             |            |                         |           
|                                                    | Accounts payable, including related party payables of 5,949 and 5,065, respectively                       |                                             | 238,049    |                         | 362,460   
|                                                    | Accrued liabilities                                                                                       |                                             | 667,827    |                         | 713,449   
|                                                    | Subscriber prepayments and deposits                                                                       |                                             | 147,981    |                         | 99,554    
|                                                    | Short-term debt                                                                                           |                                             | 82,282     |                         | 86,843    
|                                                    | Current portion of long-term debt, including related party debt of 2,683,114 and 2,590,245, respectively  |                                             | 9,381,046  |                         | 9,188,098 
|                                                    |                                                                                                           |                                             |            |                         |           
|                                                    |                                                                                                           | Total current liabilities                   |            | 10,517,185              |           
|Long-term debt                                      |                                                                                                           | 491,512                                     |            | 469,990                 |           
|Other long-term liabilities                         |                                                                                                           | 257,087                                     |            | 243,962                 |           
|                                                    |                                                                                                           |                                             |            |                         |           
|                                                    |                                                                                                           | Total liabilities                           |            | 11,265,784              |           
|                                                    |                                                                                                           |                                             |            |                         |           
|Commitments and contingencies (see Note 9)          |                                                                                                           |                                             |            |                         |           
|Minority interests in subsidiaries                  |                                                                                                           | 152,231                                     |            | 152,096                 |           
|Convertible preferred stock                         |                                                                                                           | 1,541,240                                   |            | 1,505,435               |           
|Shareholders' deficit                               |                                                                                                           |                                             |            |                         |           
|                                                    | Priority stock, 1.0 par value, 300 shares authorized, issued and outstanding                              |                                             | -          |                         | -         
|                                                    | Ordinary stock, 1.0 par value, 1,000,000,000 shares authorized, 443,417,525 shares issued and outstanding |                                             | 443,418    |                         | 443,418   
|                                                    | Additional paid-in capital                                                                                |                                             | 2,766,602  |                         | 2,766,492 
|                                                    | Deferred compensation                                                                                     |                                             | (45,408    | )                       | (52,088   
|                                                    | Accumulated deficit                                                                                       |                                             | (8,178,729 | )                       | (7,651,418
|                                                    | Other cumulative comprehensive income                                                                     |                                             | 114,188    |                         | 147,173   
|                                                    |                                                                                                           |                                             |            |                         |           
|                                                    |                                                                                                           | Total shareholders' deficit                 |            | (4,899,929              | )         
|                                                    |                                                                                                           |                                             |            |                         |           
|                                                    |                                                                                                           | Total liabilities and shareholders' deficit |            | 8,059,326               |           
|                                                    |                                                                                                           |                                             |            |                         |           

The accompanying notes are an integral part of these consolidated financial statements.

2

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        (Stated in thousands of Euros, except share and per share amounts)        (Unaudited)

|                                                                                                                                |                                                                                            | For the Three Months
Ended March 31, |         
|------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------ | --------
|
|Service and other revenue                                                                                                       |                                                                                            | 346,312                              |         
|Operating expense                                                                                                               |                                                                                            | (188,031                             | )       
|Selling, general and administrative expense                                                                                     |                                                                                            | (110,257                             | )       
|Depreciation and amortization                                                                                                   |                                                                                            | (172,632                             | )       
|Impairment and restructuring charges                                                                                            |                                                                                            | (3,943                               | )       
|                                                                                                                                |                                                                                            |                                      |         
|                                                                                                                                | Net operating loss                                                                         |                                      | (128,551
|Interest income                                                                                                                 |                                                                                            | 5,985                                |         
|Interest expense                                                                                                                |                                                                                            | (171,789                             | )       
|Interest expense related party                                                                                                  |                                                                                            | (58,416                              | )       
|Foreign exchange gain (loss) and other income (expense), net                                                                    |                                                                                            | (242,997                             | )       
|                                                                                                                                |                                                                                            |                                      |         
|                                                                                                                                | Net loss before income taxes and other items                                               |                                      | (595,768
|Share in results of affiliated companies                                                                                        |                                                                                            | (21,303                              | )       
|Minority interests in subsidiaries                                                                                              |                                                                                            | (190                                 | )       
|Income tax benefit                                                                                                              |                                                                                            | 1,244                                |         
|                                                                                                                                |                                                                                            |                                      |         
|                                                                                                                                | Net loss before extraordinary gain and cumulative effect of change in accounting principle |                                      | (616,017
|Extraordinary gain                                                                                                              |                                                                                            | 124,511                              |         
|Cumulative effect of change in accounting principle                                                                             |                                                                                            | -                                    |         
|                                                                                                                                |                                                                                            |                                      |         
|                                                                                                                                | Net loss                                                                                   |                                      | (491,506
|                                                                                                                                |                                                                                            |                                      |         
|Basic net loss attributable to common shareholders (See Note 13)                                                                |                                                                                            | (527,311                             | )       
|                                                                                                                                |                                                                                            |                                      |         
|Basic and diluted net loss per ordinary share before extraordinary gain and cumulative effect of change in accounting principle |                                                                                            | (1.47                                | )       
|                                                                                                                                |                                                                                            |                                      |         
|Basic and diluted net loss per ordinary share                                                                                   |                                                                                            | (1.19                                | )       
|                                                                                                                                |                                                                                            |                                      |         
|Weighted-average number of ordinary shares outstanding                                                                          |                                                                                            | 443,417,525                          |         
|                                                                                                                                |                                                                                            |                                      |         

The
accompanying notes are an integral part of these consolidated financial statements.

3

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UNITED PAN-EUROPE COMMUNICATIONS N.V.    CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT    (Stated in thousands of Euros, except share and per share amounts)    (Unaudited)

|                                                              |  | Priority Stock |  | Ordinary Stock |  |             |  |         |  |           |  | Other Cumulative
Comprehensive
Income
(Loss)(1) |   |            |  
|------------------------------------------------------------- |  | -------------- |  | -------------- |  | ----------- |  | ------- |  | --------- |  | ----------------------------------------------- | - | ---------- | -
|
|
|Balances, December 31, 2001                                   |  | 300            |  | -              |  | 443,417,525 |  | 443,418 |  | 2,766,492 |  | (52,088                                         | ) | (7,651,418 | )
|Deferred compensation expense related to stock options, net   |  | -              |  | -              |  | -           |  | -       |  | 110       |  | (110                                            | ) | -          |  
|Amortization of deferred compensation                         |  | -              |  | -              |  | -           |  | -       |  | -         |  | 6,790                                           |   | -          |  
|Accrual of Dividend on Series 1 Convertible Preferred Stock   |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | (34,280    | )
|Accretion of Discount of Series 1 Convertible Preferred Stock |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | (1,525     | )
|Unrealized loss on investments                                |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | -          |  
|Change in fair value of derivative assets                     |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | -          |  
|Change in cumulative translation adjustments                  |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | -          |  
|Net loss                                                      |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | (491,506   | )
|                                                              |  |                |  |                |  |             |  |         |  |           |  |                                                 |   |            |  
|Total comprehensive loss                                      |  | -              |  | -              |  | -           |  | -       |  | -         |  | -                                               |   | -          |  
|                                                              |  |                |  |                |  |             |  |         |  |           |  |                                                 |   |            |  
|Balances, March 31, 2002                                      |  | 300            |  | -              |  | 443,417,525 |  | 443,418 |  | 2,766,602 |  | (45,408                                         | ) | (8,178,729 | )
|                                                              |  |                |  |                |  |             |  |         |  |           |  |                                                 |   |            |  

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The
accompanying notes are an integral part of these consolidated financial statements.

4

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS        (Stated in thousands of Euros)        (Unaudited)

|                                                                               |                                                     | For the Three Months
Ended March 31,                                  |         
|------------------------------------------------------------------------------ | --------------------------------------------------- | --------------------------------------------------------------------- | --------
|
|Cash flows from operating activities:                                          |                                                     |                                                                       |         
|Net loss                                                                       |                                                     | (491,506                                                              | )       
|Adjustments to reconcile net loss to net cash flows from operating activities: |                                                     |                                                                       |         
|                                                                               | Depreciation and amortization                       |                                                                       | 172,632 
|                                                                               | Amortization of deferred financing costs            |                                                                       | 4,926   
|                                                                               | Non cash impairment and restructuring charges       |                                                                       | 3,943   
|                                                                               | Accretion of interest expense                       |                                                                       | 90,418  
|                                                                               | Share in results of affiliated companies            |                                                                       | 21,303  
|                                                                               | Compensation expense related to stock options       |                                                                       | 6,790   
|                                                                               | Minority interests in subsidiaries                  |                                                                       | 190     
|                                                                               | Exchange rate differences in loans                  |                                                                       | 60,073  
|                                                                               | Cumulative effect of change in accounting principle |                                                                       | -       
|                                                                               | Loss (gain) on derivative assets                    |                                                                       | 177,809 
|                                                                               | Extraordinary gain                                  |                                                                       | (124,511
|                                                                               | Other                                               |                                                                       | 1,964   
|                                                                               | Changes in assets and liabilities:                  |                                                                       |         
|                                                                               |                                                     | Decrease in restricted cash                                           |         
|                                                                               |                                                     | Decrease (increase) in receivables                                    |         
|                                                                               |                                                     | Increase (decrease) in other current liabilities                      |         
|                                                                               |                                                     | Increase (decrease) in deferred taxes and other long-term liabilities |         
|                                                                               |                                                     |                                                                       |         
|Net cash flows from operating activities                                       |                                                     | (61,526                                                               | )       
|                                                                               |                                                     |                                                                       |         
|Cash flows from investing activities:                                          |                                                     |                                                                       |         
|Investments in and advances to affiliated companies                            |                                                     | -                                                                     |         
|Dividends received                                                             |                                                     | 8,031                                                                 |         
|Capital expenditures                                                           |                                                     | (102,017                                                              | )       
|Acquisitions, net of cash acquired                                             |                                                     | (24,060                                                               | )       
|                                                                               |                                                     |                                                                       |         
|Net cash flows from investing activities                                       |                                                     | (118,046                                                              | )       
|                                                                               |                                                     |                                                                       |         
|Cash flows from financing activities:                                          |                                                     |                                                                       |         
|Proceeds from long-term and short-term borrowings                              |                                                     | 657                                                                   |         
|Repayments of long-term and short-term borrowings                              |                                                     | (31,874                                                               | )       
|                                                                               |                                                     |                                                                       |         
|Net cash flows from financing activities                                       |                                                     | (31,217                                                               | )       
|                                                                               |                                                     |                                                                       |         
|Effect of exchange rates on cash                                               |                                                     | (3,002                                                                | )       
|                                                                               |                                                     |                                                                       |         
|Net decrease in cash and cash equivalents                                      |                                                     | (213,791                                                              | )       
|Cash and cash equivalents at beginning of period                               |                                                     | 855,001                                                               |         
|                                                                               |                                                     |                                                                       |         
|Cash and cash equivalents at end of period                                     |                                                     | 641,210                                                               |         
|                                                                               |                                                     |                                                                       |         
|Supplemental cash flow disclosures:                                            |                                                     |                                                                       |         
|                                                                               | Cash paid for interest                              |                                                                       | (10,680 
|                                                                               |                                                     |                                                                       |         
|                                                                               | Cash received for interest                          |                                                                       | 7,786   
|                                                                               |                                                     |                                                                       |         

The
accompanying notes are an integral part of these consolidated financial statements.

5

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Nature of Operations

United Pan-Europe Communications N.V. ("UPC" or the "Company"), whose parent company is UnitedGlobalCom Inc. ("United"), which owns an indirect
ownership interest in UPC through UGC Holdings Inc. ("UGC Holdings") of 53.1%, offers communication services in many European countries through its three primary divisions, UPC Distribution,
UPC Media andPriority Telecom. UPC Distribution, which comprises the local operating systems, provides video, telephone and internet services for
residential customers, (Triple Play). UPC Media comprises the converging internet content and programming business and, in 2001, the internet access business.Priority
Telecomfocuses on providing network solutions to the business customer.

The
following chart presents a summary of the Company's significant investments as of March 31, 2002.

|                 |                                      | UPC's Ownership |      
|---------------- | ------------------------------------ | --------------- | -----
|Distribution:    |                                      |                 |      
|Austria:         |                                      |                 |      
|                 | Telekabel Group                      |                 | 95.0 
|Belgium:         |                                      |                 |      
|                 | UPC Belgium                          |                 | 100.0
|Czech Republic:  |                                      |                 |      
|                 | KabelNet                             |                 | 100.0
|                 | Kabel Plus                           |                 | 99.9 
|France:          |                                      |                 |      
|                 | Médiaréseaux S.A                     |                 | 92.0 
|Germany:         |                                      |                 |      
|                 | EWT/TSS Group                        |                 | 51.0 
|                 | PrimaCom AG ("PrimaCom")             |                 | 25.0 
|Hungary:         |                                      |                 |      
|                 | UPC Magyarorszag                     |                 | 100.0
|                 | Monor Telefon Tarsasag Rt. ("Monor") |                 | 98.9 
|The Netherlands: |                                      |                 |      
|                 | UPC Nederland                        |                 | 100.0
|                 | Alkmaar                              |                 | 100.0
|Norway:          |                                      |                 |      
|                 | UPC Norge AS. ("UPC Norge")          |                 | 100.0
|Sweden:          |                                      |                 |      
|                 | UPC Sweden                           |                 | 100.0
|Slovak Republic: |                                      |                 |      

6

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|                  | Trnavatel                                  |  | 95.0  | %   
|----------------- | ------------------------------------------ |  | ----- | ----
|                  | Kabeltel                                   |  | 100.0 | %   
|                  | UPC Slovensko s.r.o.                       |  | 100.0 | %   
|Romania:          |                                            |  |      
|                  | Eurosat                                    |  | 51.0  | %   
|                  | AST Romania                                |  | 100.0 | %   
|Poland:           |                                            |  |      
|                  | UPC Polska, Inc ("UPC Polska")             |  | 100.0 | %   
|                  | TKP                                        |  | 25.0  | %   
|Media:            |                                            |  |      
|Pan-European      |                                            |  |      
|                  | chello broadband N.V. ("chello broadband") |  | 100.0 | %(3)
|Spain:            |                                            |  |      
|                  | Iberian Programming Services ("IPS")       |  | 50.0  | %   
|United Kingdom:   |                                            |  |      
|                  | Xtra Music Ltd                             |  | 50.0  | %   
|The Netherlands:  |                                            |  |      
|                  | UPC Programming B.V. ("UPCtv")             |  | 100.0 | %   
|Poland:           |                                            |  |      
|                  | Wizja TV B.V                               |  | 100.0 | %   
|Other:            |                                            |  |      
|                  | SBS Broadcasting SA ("SBS")                |  | 21.2  | %   
|Priority Telecom: |                                            |  |      
|                  | Priority Telecom N.V. ("Priority Telecom") |  | 79.1  | %(4)
|Investments:      |                                            |  |      
|Malta:            |                                            |  |      
|                  | Melita Cable TV P.L.C. ("Melita")          |  | 50.0  | %   

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7

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2. Risks and Going Concern Uncertainties

The Company has incurred substantial operating losses and negative cash flows from operations, which have been driven by continuing development efforts, including
the introduction of new services such as digital video, telephony and internet. Additionally, substantial capital expenditures have been required to deploy these services and to acquire businesses.
Management expects the Company to incur operating losses at least through 2005, primarily as a result of the continued introduction of these new services, which are in the early stages of deployment,
as well as continued depreciation expense. During 2001, the Company reviewed their current and long-range plan for all segments of their business and the Company hired a strategic
consultant to assist the Company in the process. The Company worked extensively with this consultant to revise the Company's strategic and operating plans. The Company has revised their strategic
vision, no longer focusing on an aggressive digital roll-out, but on increasing sales of products and services that have better gross margins and are profitable. The revised business plan
focuses on average revenue per subscriber and margin improvement, increased penetration of new service products within existing upgraded homes, efficient deployment of capital and focus on products
with positive net present values.

Viewing
the Company's funding requirements and the Company's possible lack of access to debt and equity capital in the near term, UPC determined that it would not make interest payments
on UPC's senior notes and senior discount notes, as they fell due. On February 1, 2002, UPC failed to make required interest payments in the aggregate amount of EUR 113.0 million (USD
100.6 million) on their outstanding 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010 and 111/2% Senior Notes due 2010. The indentures
related to UPC's senior notes and senior discount notes provide that failing to make interest payments constitutes, an "Event of Default" under the notes if UPC is in default of the payment of
interest on any of the notes for a period of time in excess of 30 days. Since UPC failed to make the interest payments on the first three series of notes upon expiration of this
30-day grace period on March 3, 2002, Events of Default occurred under the related indentures. The occurrence of these Events of Default constituted cross Events of Default under
the indentures related to the remaining series of senior notes and senior discount notes. The occurrence of the various Events of Default gives
the trustees under the related indentures, or requisite number of holders of such notes, the right to accelerate the maturity of all of the Company's senior notes and senior discount notes and to
foreclose on the collateral securing the loan. As of May 15, 2002, neither the trustees for those notes nor the requisite number of holders of those notes have accelerated the payment of
principal and interest under those notes. In addition, on May 1, 2002, UPC failed to make required interest payments in the aggregate amount of EUR 38.9 million on their outstanding
107/8% Senior Notes due 2007 and 111/4% Senior Notes due 2009.

8

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On
February 1, 2002, UPC signed a Memorandum of Understanding with United and UGC Holdings (the "Memorandum of Understanding"). The Memorandum of Understanding is a
non-binding agreement in principle with United and UGC Holdings to enter into negotiations with the holders of the Company's senior notes and senior discount notes to attempt to reach
agreement on a means to restructure the Company's indebtedness at the holding company level.

UPC's
failure to make the February 1, 2002 interest payment on UPC's outstanding 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010 and
111/2% Senior Notes due 2010, and the resulting Events of Default under the indentures relating to the Company's senior notes and senior discount notes, gave rise to cross events of
default under the following credit and loan facilities:



The
UPC Distribution Bank Facility is secured by share pledges to the banks on UPC Distribution Holding B.V., which is the holding company of most companies within the UPC Distribution
group, and over operating companies within this group. The EWT Facility is secured by share pledges of EWT to RBS. The occurrence of the cross events of default under those facilities give the
creditors under those facilities the right to accelerate the maturity of the loans and to foreclose upon the collateral securing
the loans. The Exchangeable Loan is secured by pledges over the stock of Belmarken, its wholly owned subsidiary UPC Holding B.V. and UPC Internet Holding B.V., which owns chello broadband N.V.The
Exchangeable Loan continued to be held by United as of May 15, 2002.

On
March 4, 2002, UPC received waivers from the lenders under the UPC Distribution Bank Facility, the EWT Facility and the Exchangeable Loan for the cross events of defaults under
such facilities that existed or may exist as a result of the Company's failure to make the interest payment due on February 1, 2002 on the Company's outstanding 107/8% Senior
Notes due 2009, 111/4% Senior Notes due 2010 and within the applicable cure periods, or any resulting cross defaults.

Each
of these waivers will remain effective until the earlier of



9

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In
addition, each of these waivers contains certain other conditions and undertakings and will terminate if there is a default by UPC of the terms of that waiver. The waiver under the
UPC Distribution Bank Facility subjects UPC to a EUR 100 million drawdown limitation under that facility, during the period in which the waiver is in place.

As
of May 15, 2002, UPC had not made the interest payment on the 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010, 111/2%
Senior Notes due 2010, 107/8% Senior Notes due 2007 and the 111/4% Senior Notes due 2009 and none of the defaults described above have had a material adverse effect on
the operations of UPC's subsidiaries or their or UPC's relationships with customers, suppliers and employees.

The
occurrence of the events of default described above also triggered the right of the holders of a minority interest in the Company's 51% owned subsidiary, UPC Germany, to acquire from
UPC for nominal consideration shares of UPC Germany constituting 22% of UPC Germany's outstanding shares. On March 5, 2002, UPC received notice of the holders' notice of exercise. After
settlement of this exercise, UPC's interest in UPC Germany will be reduced to 29%. The involved parties are in discussion about this exercise notice.

During
the month of March 2002, UPC met with representatives of United, which currently holds the Exchangeable Loan and a significant portion of the Company's senior notes and
senior discount notes, and a steering committee representing the holders of the Company's senior notes and senior discount notes (other than United) to begin preliminary discussions with respect to a
process for, and terms of, a restructuring of those notes and the Exchangeable Loan. United and its advisors and the noteholders' steering committee and its advisors completed the due diligence about
UPC and the Company's current financial condition. UPC has not reached any decisions with either United or the noteholders' steering committee regarding the terms or timing of a debt restructuring.
UPC expects that this process will take a number of months to complete. If completed, the restructuring will result in substantial dilution of UPC's existing shareholders, a loss of some or all of the
value of the Company's outstanding securities, including the Company's ordinary shares, preference shares and senior notes and senior discount notes, as well as the Exchangeable Loan. Since UPC is in
discussions with United and the noteholders' steering committee, UPC cannot predict the terms or the timing of the Company's restructuring. In addition, UPC cannot assure you that the Company will be
able to reach agreement with either United or the noteholders on mutually satisfactory terms for the debt restructuring.

If
UPC is unable to reach agreement on the terms of the debt restructuring or is otherwise unable to successfully complete an agreed upon restructuring plan for the Company's debt, UPC
may seek relief under (i) a debt moratorium, leading to a suspension of payments or, (ii) bankruptcy proceeding under applicable laws. If UPC seeks relief under either of these
proceedings, or any other laws that may be available to the Company, holders of the Company's outstanding securities, including the Company's ordinary shares, preference shares and senior notes and
senior discount notes, as well as the Exchangeable Loan, may lose some or all of the value of their investment in the Company's securities. Such proceedings could result in material changes in the
nature of UPC's business, material adverse changes to UPC's financial conditions and results of operations or the Company's liquidation.

10

---

In
a separate transaction on February 1, 2002, UPC amended two swap agreements with a bank effective as of January 31, 2002. The swap agreements were entered into in
connection with the issuance of some of the Company's senior notes and senior discount notes. The swap agreements were subject to early termination upon the occurrence of certain events, including the
defaults described above. The amendment provides that the bank's obligations to the Company under the swap agreements have been substantially fixed and the agreements will be unwound on or prior to
July 30, 2002. In settlement of the bank's obligations to the Company, the bank will deliver to the Company approximately EUR 400 million, subject to adjustment in the case of certain
circumstances, in aggregate principal amount of the Company's senior notes and senior discount notes held by that bank. On delivery of the senior notes and senior discount notes, UPC's indebtedness
will be reduced by approximately EUR 400 million and UPC will recognize a gain.

UPC
has experienced net losses since formation. As of December 31, 2001, there was substantial uncertainty whether UPC's sources of capital, working capital and projected
operating cash flow would be sufficient to fund the Company's expenditures and service the Company's indebtedness over the next year. Accordingly, there is substantial doubt regarding the Company's
ability to continue as a going concern. In addition, as a result of the events of default described above, UPC's senior notes, senior discount notes, the Exchangeable Loan and the UPC Distribution
Bank Facility have been classified as current liabilities. UPC's ability to continue as a going concern is dependent on (i) UPC's ability to restructure the July 1999 Notes,
October 1999 Notes, January 2000 Notes, the Exchangeable Loan and the convertible preferred stock and (ii) UPC's ability to generate the cash flows required to enable it to
recover the Company's assets and satisfy the Company's liabilities, in the normal course of business, at the amounts stated in the consolidated financial statements. The report of the Company's
independent accountant, Arthur Andersen, on the Company's consolidated financial statements for the year ended December 31, 2001, includes a paragraph that states that the Company has suffered
recurring losses from operations and has a net capital deficiency that raises doubt about the Company's ability to continue as a going concern.

3. Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting
principles for interim financial information and are in the form prescribed by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by
U.S. GAAP for complete financial statements. The interim unaudited consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of and
for the year ended December 31, 2001. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. The
preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.

Certain
prior period amounts have been reclassified to conform with current period presentation.

11

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3. Basis of Presentation (Continued)

New Accounting Principles

The Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") effective
January 1, 2002. Under SFAS 142, goodwill and intangible assets with indefinite lives are no longer amortized, but are tested for impairment on an annual basis and whenever indicators of
impairment arise. In addition, goodwill on equity method investments is no longer amortized, but tested for impairment in accordance with APB 18. The goodwill impairment test, which is based on fair
value, is performed on a reporting unit level. All recognized intangible assets that are deemed not to have an indefinite life are amortized over their estimated useful lives.

The
following table presents the pro forma effect on net loss from the reduction of amortization expense and the reduction of amortization of excess basis on equity method investments,
as a result of the adoption of SFAS 142:

|                                                          |                                                        | Three Months Ended March 31, |         
|--------------------------------------------------------- | ------------------------------------------------------ | ---------------------------- | --------
|
|
|Net loss as reported                                      |                                                        | (491,506                     | )       
|Add Back:                                                 |                                                        |                              |         
|Goodwill amortization                                     |                                                        | -                            |         
|Amortization of excess basis on equity investments        |                                                        | -                            |         
|                                                          |                                                        |                              |         
|                                                          | Adjusted net loss                                      |                              | (491,506
|                                                          |                                                        |                              |         
|Net loss per ordinary share:                              |                                                        |                              |         
|Basic and diluted net loss per oridnary share as reported |                                                        | (1.19                        | )       
|Add back:                                                 |                                                        |                              |         
|Goodwill amortization                                     |                                                        | -                            |         
|Amortization of excess basis on equity investments        |                                                        | -                            |         
|                                                          |                                                        |                              |         
|                                                          | Adjusted basic and diluted net loss per ordinary share |                              | (1.19   
|                                                          |                                                        |                              |         

The
Company is still in the process of comparing the fair value of its reporting units with their respective carrying amounts, including goodwill. This process will enable the Company to
identify any potential goodwill impairment from the adoption of SFAS 142. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test will be performed to measure the amount of impairment loss. It is possible
that a substantial cumulative effect adjustment may be required as a result of this process. As of March 31, 2002, net goodwill of approximately 2.9 billion is included in the
accompanying consolidated balance sheets.

In
April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement
No. 13, and Technical Corrections." ("SFAS 145"). SFAS 145, which updates, clarifies and simplifies existing accounting pronouncements, addresses the reporting of debt
extinguishments and accounting

12

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for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. The provisions of SFAS 145 are generally effective for the Company's 2003 fiscal
year, or in the case of specific provisions, for transactions occurring after May 15, 2002 or financial statements issued on or after May 15, 2002. For certain provisions, including the
rescission of Statement 4, early application is encouraged. UPC has not adopted SFAS 145 and is currently evaluating the impact of SFAS 145 on the Company's consolidated financial
statements. The Company does not believe that the adoption of SFAS 145 will have a material impact on the Company's net loss, financial position or cash flows.

4. Impairment and Restructuring Charges

During 2001, the Company implemented a restructuring plan to both lower operating expenses and strengthen its competitive and financial position, by eliminating
certain employee positions, reducing office space and related overhead expenses, recognizing losses related to excess capacity under certain contracts and cancellation of certain programming
contracts. The Company also incurred certain restructuring charges during the three months ended March 31, 2002 related to employee severance and termination costs.

The
following table summarizes these costs by type and related segment of the business.

|                                                          |  | Employee
Severance &
Termination
Costs |   | Office
Closures |   | Programming
and Lease
Contracts
Termination |   | Assets
Disposal
Losses and
Other Costs |   | Total
Impairment and
Restructuring
Charges |  
|--------------------------------------------------------- |  | -------------------------------------- | - | --------------- | - | ------------------------------------------- | - | -------------------------------------- | - | ------------------------------------------ | -
|
|Impairment and restructuring liability, December 31, 2001 |  | 37,556                                 |   | 11,140          |   | 102,052                                     |   | 16,228                                 |   | 166,976                                    |  
|                                                          |  |                                        |   |                 |   |                                             |   |                                        |   |                                            |  
|Priority Telecom                                          |  | 3,800                                  |   | -               |   | -                                           |   | -                                      |   | 3,800                                      |  
|UPC Media                                                 |  | 143                                    |   | -               |   | -                                           |   | -                                      |   | 143                                        |  
|                                                          |  |                                        |   |                 |   |                                             |   |                                        |   |                                            |  
|Total impairment and restructuring charges 2002           |  | 3,943                                  |   | -               |   | -                                           |   | -                                      |   | 3,943                                      |  
|                                                          |  |                                        |   |                 |   |                                             |   |                                        |   |                                            |  
|Cash paid during 2002                                     |  | (10,733                                | ) | (6,755          | ) | (5,099                                      | ) | (3,593                                 | ) | (26,180                                    | )
|Non-cash release of restructuring liability               |  | -                                      |   | -               |   | (10,197                                     | ) | (4,621                                 | ) | (14,818                                    | )
|                                                          |  |                                        |   |                 |   |                                             |   |                                        |   |                                            |  
|Impairment and restructuring liability, March 31, 2002    |  | 30,766                                 |   | 4,385           |   | 86,756                                      |   | 8,014                                  |   | 129,921                                    |  
|                                                          |  |                                        |   |                 |   |                                             |   |                                        |   |                                            |  

Employee severance and termination costs.These costs relate to termination salaries, benefits, outplacement and other
related costs to the employees involuntarily terminated. The total workforce reduction was effected through a combination of involuntary terminations and reorganizing operations to permanently
eliminate open positions resulting from normal employee attrition. Salaries and benefits earned during the transition period have not been included in the restructuring charge.

Office closures.In addition to the decrease in employee positions, the restructuring plan provided for reduction in office
space and related overhead expenses. Office closure and consolidation costs are the estimated costs to close specifically identified facilities, costs associated with obtaining subleases, lease-
termination costs and other related costs.

13

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Programming and Lease Contract Termination Costs.These costs relate to costs associated with the restructuring, cancellation
or recognition of costs associated with excess capacity of certain contracts.

The
following table summarizes the number of employees to be terminated during 2002 in accordance with the restructuring by both division and function and the number of employees still
to be terminated as of March 31, 2002:

|                                   |       | Total
Number of
Employees
2002 |     | Remaining
Number of
Employees, as of
March 31, 2002
|---------------------------------- | ----- | ------------------------------ | --- | ---------------------------------------------------
|Division:                          |       |                                |     |                                                    
|UPC Distribution                   |       | 873                            |     | 604                                                
|Priority Telecom                   |       | 23                             |     | 5                                                  
|UPC Media                          |       | 86                             |     | 21                                                 
|Corporate                          |       | 4                              |     | 3                                                  
|                                   |       |                                |     |                                                    
|                                   | Total |                                | 986 |                                                    
|                                   |       |                                |     |                                                    
|Function:                          |       |                                |     |                                                    
|Programming                        |       | 1                              |     | -                                                  
|Network Operations                 |       | 498                            |     | 408                                                
|Customer Operations                |       | 112                            |     | 37                                                 
|Customer Care                      |       | 92                             |     | 51                                                 
|Billing and Collection             |       | 4                              |     | 3                                                  
|Customer Acquisition and Marketing |       | 164                            |     | 78                                                 
|Administration                     |       | 115                            |     | 56                                                 
|                                   |       |                                |     |                                                    
|                                   | Total |                                | 986 |                                                    
|                                   |       |                                |     |                                                    

14

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5. Investments in and Advances to Affiliated Companies

Equity Method Investments

|           |  | As of March 31, 2002
|---------- |  | --------------------
|
|
|Tevel      |  | 114,278             
|Melita     |  | 12,748              
|Xtra Music |  | 14,039              
|IPS        |  | 10,065              
|SBS        |  | 261,999             
|PrimaCom   |  | 345,096             
|TKP        |  | 30,000              
|Other, net |  | 60,937              
|           |  |                     
|Total      |  | 849,162             
|           |  |                     

|           |  | As of December 31, 2001
|---------- |  | -----------------------
|
|
|Tevel      |  | 114,278                
|Melita     |  | 12,881                 
|Xtra Music |  | 14,039                 
|IPS        |  | 10,065                 
|SBS        |  | 261,999                
|PrimaCom   |  | 345,096                
|TKP        |  | 30,000                 
|Other, net |  | 51,413                 
|           |  |                        
|Total      |  | 839,771                
|           |  |                        

Marketable Equity Securities of United, at Fair Value

UPC Holds 5,569,240 Class A common shares of United as of March 31, 2002. The fair value of these shares was approximately 34.5 million as of
March 31, 2002, including a cumulative unrealized gain of approximately 7.9 million.

15

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6. Property, Plant and Equipment

|                                             |                                    | As of
March 31,
2002 |            | As of
December 31,
2001 |           
|-------------------------------------------- | ---------------------------------- | -------------------- | ---------- | ----------------------- | ----------
|
|Cable distribution networks                  |                                    | 3,501,554            |            | 3,513,362               |           
|Subscriber premises equipment and converters |                                    | 821,554              |            | 793,809                 |           
|DTH, MMDS and distribution facilities        |                                    | 81,544               |            | 117,692                 |           
|IT systems, office equipment and fixtures    |                                    | 280,775              |            | 289,376                 |           
|Buildings and leasehold improvements         |                                    | 172,601              |            | 168,186                 |           
|Other                                        |                                    | 105,442              |            | 73,893                  |           
|                                             |                                    |                      |            |                         |           
|                                             |                                    | 4,963,470            |            | 4,956,318               |           
|                                             | Accumulated depreciation           |                      | (1,268,199 | )                       | (1,201,988
|                                             |                                    |                      |            |                         |           
|                                             | Property, plant and equipment, net |                      | 3,695,271  |                         | 3,754,330 
|                                             |                                    |                      |            |                         |           

7. Goodwill and Other Intangible Assets

|                        |                                                  | As of
March 31,
2002 |           | As of
December 31,
2001 |          
|----------------------- | ------------------------------------------------ | -------------------- | --------- | ----------------------- | ---------
|
|Goodwill                |                                                  | 3,487,539            |           | 3,450,665               |          
|Other intangible assets |                                                  | 129,822              |           | 137,364                 |          
|                        |                                                  |                      |           |                         |          
|                        |                                                  | 3,617,361            |           | 3,588,029               |          
|                        | Accumulated amortization goodwill                |                      | (540,606  | )                       | (543,891 
|                        | Accumulated amortization other intangible assets |                      | (40,929   | )                       | (40,635  
|                        |                                                  |                      |           |                         |          
|                        | Goodwill and other intangible assets, net        |                      | 3,035,826 |                         | 3,003,503
|                        |                                                  |                      |           |                         |          

16

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8. Long-Term Debt

|                               |                      | March 31,
2002 |            | December 31,
2001 |           
|------------------------------ | -------------------- | -------------- | ---------- | ----------------- | ----------
|
|July 1999 Notes                |                      | 1,851,449      |            | 1,796,252         |           
|October 1999 Notes             |                      | 1,246,226      |            | 1,207,569         |           
|January 2000 Notes             |                      | 2,011,345      |            | 1,942,684         |           
|UPC Distribution Bank Facility |                      | 3,173,326      |            | 3,163,834         |           
|Exchangeable Loan              |                      | 1,032,307      |            | 992,816           |           
|@Entertainment Notes           |                      | 405,451        |            | 384,144           |           
|DIC Loan                       |                      | 53,931         |            | 53,762            |           
|Other                          |                      | 98,523         |            | 117,027           |           
|                               |                      |                |            |                   |           
|                               |                      | 9,872,558      |            | 9,658,088         |           
|                               | Less current portion |                | (9,381,046 | )                 | (9,188,098
|                               |                      |                |            |                   |           
|                               | Total                |                | 491,512    |                   | 469,990   
|                               |                      |                |            |                   |           

All
non-Euro denominated borrowings are recorded each period using the period end spot rate with the result being recorded as foreign exchange gain or loss. As discussed in
Note 2 "Risks and Going Concern Uncertainties", as of March 3, 2002, the Company is in default under its senior notes and senior discount notes, the UPC Distribution Bank Facility, the
Exchangeable Loan and the EWT Facility. Accordingly, these borrowings have been reclassified to current portion of long-term debt.

Exchangeable Loan

The Exchangeable Loan was transferred to United on January 30, 2002, as a part of a transaction between Liberty Media Corporation ("Liberty"), the original
holder of the Exchangeable Loan, and United. United may exchange the notes for UPC's ordinary shares at USD 6.85 per share under certain circumstances before or after May 29, 2002.

UPC Distribution Bank Facility

As indicated in Note 2, the Company is in default under the terms of this facility as a result of the missed interest payments during the first quarter of
2002. The Company has obtained a 90 day waiver of default from the banks syndicate which expires on June 3, 2002. During the period of waiver, the Company is permitted to borrow another
100 million under the facility, subject to certain conditions. As at March 31, 2002, UPC has not made any drawdown under this facility.

17

---

Derivative Instruments

In connection with certain borrowings, the Company has entered into both cross-currency swaps and interest rate swaps providing economic hedges to both currency
and interest rate exposure. The following table details the fair value of the derivative instruments outstanding by related borrowing:

|Borrowing                      |                         | Type of Instrument                |  | As of
March 31,
2002 |        | As of
December 31,
2001 |        
|------------------------------ | ----------------------- | --------------------------------- |  | -------------------- | ------ | ----------------------- | -------
|
|July 1999 Notes                |                         | Cross currency/interest rate swap |  | 31,683               |        | 101,736                 |        
|October 1999 Notes             |                         | Cross currency/interest rate swap |  | 21,715               |        | 55,522                  |        
|January 2000 Notes             |                         | Cross currency/interest rate swap |  | 4,000                |        | 36,741                  |        
|UPC Distribution Bank Facility |                         | Cross currency/interest rate swap |  | (28,386              | )      | (47,065                 | )      
|                               |                         |                                   |  |                      |        |                         |        
|                               | Total derivative assets |                                   |  |                      | 29,012 |                         | 146,934
|                               |                         |                                   |  |                      |        |                         |        

Of
the above derivative instruments, only the 1.725 billion interest rate swap on the UPC Distribution Bank Facility qualifies as an accounting cash flow hedge. Accordingly, the
changes in fair value of this instrument are recorded through other comprehensive income in the consolidated statement of shareholders' equity (deficit).

The
remaining instruments are marked-to-market each period with the corresponding fair value gain or loss recorded as a part of foreign exchange gain (loss) and
other income (expense) in the accompanying consolidated statements of operations. For the quarters ended March 31, 2002 and 2001, the Company recorded a loss of 177.8 million and 45.9
million, respectively, in connection with the mark-to-market valuations.

Certain
derivative instruments outlined above include set-off provisions, which provide for early termination upon the occurrence of certain events including an event of
default. In an event of default, any amount payable to one party by the other party, will, at the option of the non-defaulting party set off against any matured obligation owed by the
non-defaulting party to such defaulting party. If UPC is the defaulting party and the counterparty to the swap holds bonds of UPC, these bonds may be used to settle the obligation of the
counterparty to UPC. In such an event of settlement, UPC would recognize a gain upon the delivery of the bonds next quarter. The amount of bonds, which must be delivered, is based on the principal
(i.e.) face amount of the bonds held, and not the fair value, which is substantially less.

The
condensed consolidated balance sheets reflect these instruments as derivative assets or liabilities as appropriate.

9. Commitments and Contingencies

Purchase Options

Under the UPC Germany Shareholders Agreement, the 49% shareholder has an option to put his interest in UPC Germany to UPC in exchange for approximately
10.6 million of UPC's ordinary shares A, as adjusted for final settlement. The option expires March 31, 2003. UPC has the option to pay for the put, if exercised, in either its
10.6 million shares or the equivalent value of cash on such date. If the option is not exercised, upon its expiration, the 49% shareholder has the right to demand that UPC

18

---

contribute cash and/or other assets (including stock) to UPC Germany equal to approximately 358.8 million, representing the remainder of UPC's contribution obligation to UPC Germany. UPC has
effective ownership of 51% of EWT/TSS Group through its 51% owned subsidiary UPC Germany. Pursuant to the agreement to acquire EWT/TSS Group, UPC is required to fulfill a so-called
contribution obligation by no later than March 2003, by contribution of certain assets amounting to approximately 358.8 million. The 49% owner in UPC Germany may call for 22% of the
ownership interest in certain circumstances such as a material default by UPC under its financing agreements, in exchange for the Euro equivalent of 1 Deutsche Mark. On March 5, 2002, UPC
received notice of the holders' notice of exercise. Upon settlement of the exercise, UPC's interest in UPC Germany will be reduced to 29% and the Company would no longer consolidate UPC Germany in its
results. In
addition, the Company believes the delivery of the shares also extinguishes the contribution obligation. For details on revenue, Adjusted EBITDA and total assets of UPC Germany as of March 31,
2002, see footnote 10 "Segment and geographic information" of the notes to the condensed consolidated financial statements.

Litigation and Claims

The following is a description of certain legal proceedings to which UPC or one of UPC's subsidiaries is a party. In addition, from time to time, UPC may become
involved in litigation relating to claims arising out of our operations in the normal course of the Company's business. In the opinion of the Company's management, the ultimate resolution of these
legal proceedings would not be likely to have a material adverse effect on UPC's subsidiaries' business, results of operations, financial condition or liquidity.

On
July 4, 2001, InterComm Holdings LLC, InterComm France CVOHA ("ICF I"), InterComm France II CVOHA ("ICF II"), and Reflex Participations ("Reflex," collectively with ICF I and
ICF II, the "ICF Party") served a demand for arbitration on UPC, UGC Holdings, and its subsidiaries, Belmarken Holding B.V. and UPC France Holding B.V.. The claimants allege breaches of obligations
allegedly owed by UPC in connection with the ICF Party's position as a minority shareholder in Médiaréseaux S.A. The claimants seek relief in the nature of immediate
acceleration of an alleged right to require UPC or an affiliate to purchase all or any of the remaining shares in Médiareséaux S.A. from the ICF Party and/or compensatory
damages, but in either case no less than EUR 70 million, plus reasonable fees and costs. The ICF Party has not specified from which entity it is seeking such relief; however, UGC Holdings is
not a party to any agreement with the claimants and has been dismissed from the proceedings. UPC and its affiliates, as respondents, deny these claims and intend to defend against claimants'
allegations vigorously. On July 23, 2001 the ICF Party obtained an order granted by the civil court of Meaux (Juge de l'execution of the Tribunal de Grande
Instanceof Meaux) for the attachment of Médiaréseaux S.A.'s shares held by UPC France Holding B.V. by means of unilateral proceedings without
enabling the latter to defend itself. This attachment order has since been dissolved. UPC is vigorously defending the arbitration proceedings and has filed appropriate counter claims.

On
April 26, 2002, the Company received notice that certain former shareholders of Cignal Global Communications ("Cignal") have filed law suit against the Company in the District
Court in Amsterdam, The Netherlands, claiming USD 200 million on the basis that the Company failed to honour certain option rights which were granted to those shareholders in connection with
acquisition of Cignal by Priority Telecom N.V., a subsidiary of the Company. The Company believes that it has complied in full with its obligations to these shareholders through the successful
consummation of the

19

---

initial public offering of Priority Telecom N.V. on September 27, 2001. Accordingly, the Company believes that the Cignal shareholders' claims are without merit and intends to defend this suit
vigorously.

10. Segment and Geographic Information

The Company is managed internally as three primary divisions, UPC Distribution, UPC Media andPriority Telecom. In
addition, Corporate, IT and Other is a separate reporting segment. UPC Distribution focuses on providing cable television, DTH, internet and telephony services to residential customers and is
comprised of the local operating systems.chello broadbandserves as the internet access provider and was, in February 2001, combined with the
programming businesses led by UPCtv under one management team as UPC Media.Priority Telecomis focused on providing services to business customers.
Corporate, IT and Other relates primarily to centralized activities, which support multiple platforms/services.

The
Company evaluates performance and allocates resources based on the results of these divisions. The key operating performance criteria used in this evaluation includes revenue growth
and net operating earnings before depreciation, amortization, stock-based compensation expense and impairment charges ("Adjusted EBITDA"). Industry analysts generally consider EBITDA to be a helpful
way to measure the performance of cable television operations and communications companies. Adjusted EBITDA should not, however, be considered a replacement for net income, cash flows or any other
measure of performance or liquidity under generally accepted accounting principles, or as an indicator of a company's operating performance. The presentation of Adjusted EBITDA may not be comparable
to statistics with a similar name reported by other companies. Not all companies and analysts calculate Adjusted EBITDA in the same manner. As the Company increases its bundling of products, the
allocation of indirect operating and selling, general and administrative expenses between individual products will become increasingly difficult and may not represent the actual Adjusted EBITDA for
individual products.

20

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10. Segment and Geographic Information (Continued)

A
summary of the segment information is as follows:

|                          |                                | Revenues for the Three Months
Ended March 31, |        
|------------------------- | ------------------------------ | --------------------------------------------- | -------
|
|
|Triple Play(1):           |                                |                                               |        
|The Netherlands           |                                | 115,863                                       |        
|Austria                   |                                | 50,074                                        |        
|Belgium                   |                                | 6,510                                         |        
|Czech Republic            |                                | 8,218                                         |        
|Norway                    |                                | 18,973                                        |        
|Hungary                   |                                | 27,966                                        |        
|France                    |                                | 25,539                                        |        
|Poland                    |                                | 21,934                                        |        
|Sweden                    |                                | 13,436                                        |        
|Germany                   |                                | 12,285                                        |        
|Other                     |                                | 8,783                                         |        
|                          |                                |                                               |        
|                          | Total Triple Play Distribution |                                               | 309,581
|                          |                                |                                               |        
|DTH                       |                                | 7,212                                         |        
|Programming               |                                | -                                             |        
|Other                     |                                | 10,040                                        |        
|Intercompany Eliminations |                                | -                                             |        
|                          |                                |                                               |        
|                          | Total Distribution             |                                               | 326,833
|                          |                                |                                               |        
|Priority Telecom          |                                | 32,116                                        |        
|UPC Media                 |                                | 18,515                                        |        
|Corporate, IT & Other     |                                | 123                                           |        
|Intercompany Eliminations |                                | (31,275                                       | )      
|                          |                                |                                               |        
|                          | Total                          |                                               | 346,312
|                          |                                |                                               |        

21

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|                |                                | Triple Play Revenue for the
Three Months Ended March 31, 2002
|--------------- | ------------------------------ | -------------------------------------------------------------
|
|
|Triple Play:    |                                |                                                              
|The Netherlands |                                | 65,808                                                       
|Austria         |                                | 21,724                                                       
|Belgium         |                                | 3,962                                                        
|Czech Republic  |                                | 7,265                                                        
|Norway          |                                | 13,273                                                       
|Hungary         |                                | 19,456                                                       
|France          |                                | 16,188                                                       
|Poland          |                                | 20,934                                                       
|Sweden          |                                | 9,337                                                        
|Germany         |                                | 12,225                                                       
|Other           |                                | 8,960                                                        
|                |                                |                                                              
|                | Total Triple Play Distribution |                                                              
|                |                                |                                                              

|                |                                | Triple Play Revenue for the
Three Months Ended March 31, 2001
|--------------- | ------------------------------ | -------------------------------------------------------------
|
|
|Triple Play:    |                                |                                                              
|The Netherlands |                                | 62,990                                                       
|Austria         |                                | 20,845                                                       
|Belgium         |                                | 3,904                                                        
|Czech Republic  |                                | 8,159                                                        
|Norway          |                                | 12,351                                                       
|Hungary         |                                | 14,463                                                       
|France          |                                | 14,882                                                       
|Poland          |                                | 20,356                                                       
|Sweden          |                                | 8,439                                                        
|Germany         |                                | 12,330                                                       
|Other           |                                | 7,229                                                        
|                |                                |                                                              
|                | Total Triple Play Distribution |                                                              
|                |                                |                                                              

---

22

---

|                      |                                | Adjusted EBITDA
for the
Three Months Ended March 31, |       
|--------------------- | ------------------------------ | ---------------------------------------------------- | ------
|
|
|Triple Play (1):      |                                |                                                      |       
|The Netherlands       |                                | 28,665                                               |       
|Austria               |                                | 16,226                                               |       
|Belgium               |                                | 2,243                                                |       
|Czech Republic        |                                | 3,897                                                |       
|Norway                |                                | 4,258                                                |       
|Hungary               |                                | 12,037                                               |       
|France                |                                | (2,212                                               | )     
|Poland                |                                | 3,632                                                |       
|Sweden                |                                | 4,295                                                |       
|Germany               |                                | 6,533                                                |       
|Other                 |                                | 2,962                                                |       
|                      |                                |                                                      |       
|                      | Total Triple Play Distribution |                                                      | 82,536
|                      |                                |                                                      |       
|DTH                   |                                | 524                                                  |       
|Programming           |                                | -                                                    |       
|Other                 |                                | 4,815                                                |       
|                      |                                |                                                      |       
|                      | Total Distribution             |                                                      | 87,875
|                      |                                |                                                      |       
|Priority Telecom      |                                | (4,676                                               | )     
|UPC Media             |                                | (5,575                                               | )     
|Corporate, IT & Other |                                | (22,810                                              | )     
|                      |                                |                                                      |       
|                      | Total                          |                                                      | 54,814
|                      |                                |                                                      |       

---

23

---



10. Segment and Geographic Information (Continued)

|                |  | Third Party Revenue by
Geographical Area
for the
Three Months Ended March 31,
|--------------- |  | -----------------------------------------------------------------------------
|
|
|The Netherlands |  | 137,518                                                                      
|Austria         |  | 51,426                                                                       
|Belgium         |  | 6,510                                                                        
|Czech Republic  |  | 11,241                                                                       
|Norway          |  | 22,937                                                                       
|Hungary         |  | 31,933                                                                       
|France          |  | 25,765                                                                       
|Poland          |  | 23,309                                                                       
|Sweden          |  | 13,640                                                                       
|Germany         |  | 12,491                                                                       
|Other           |  | 9,542                                                                        
|                |  |                                                                              
|                |  | 346,312                                                                      
|                |  |                                                                              

|                 |                 | Total Assets
|---------------- | --------------- | ------------
|
|
|Corporate        |                 | 1,017,828   
|UPCMedia         |                 | 104,286     
|Priority Telecom |                 | 662,765     
|Distribution:    |                 |             
|                 | The Netherlands |             
|                 | Austria         |             
|                 | Belgium         |             
|                 | Czech Republic  |             
|                 | Norway          |             
|                 | Hungary         |             
|                 | France          |             
|                 | Poland          |             
|                 | Sweden          |             
|                 | Germany         |             
|                 | Other           |             
|                 |                 |             
|Total            |                 | 8,059,326   
|                 |                 |             

24

---

11. Extraordinary Gain

The extraordinary gain relates to restructuring and cancellation of costs associated with excess capacity of certainPriority Telecom
N.V.vendor contracts.

12. Comprehensive Income (Loss)

The components of total comprehensive income (loss) are as follows:

|                                   |                                                 | For the Three Months
Ended March 31, |        
|---------------------------------- | ----------------------------------------------- | ------------------------------------ | -------
|
|
|Net loss                           |                                                 | (491,506                             | )      
|Other comprehensive income (loss): |                                                 |                                      |        
|                                   | Change in unrealized gain (loss) on investments |                                      | 3,008  
|                                   | Change in fair value of derivative assets       |                                      | 8,002  
|                                   | Change in cumulative translation adjustments    |                                      | (43,995
|                                   |                                                 |                                      |        
|                                   |                                                 | Total comprehensive income (loss)    |        
|                                   |                                                 |                                      |        

13. Basic Net Loss Attributable to Common Shareholders

|                                                   |  | For the Three Months
Ended March 31, |  
|-------------------------------------------------- |  | ------------------------------------ | -
|
|
|Net loss                                           |  | (491,506                             | )
|Accretion of Series 1 convertible preferred stock  |  | (35,805                              | )
|                                                   |  |                                      |  
|Basic net loss attributable to common shareholders |  | (527,311                             | )
|                                                   |  |                                      |  

14. Related Party Transactions

On January 30, 2002 United, UGC Holding's parent company, acquired approximately USD 1,435 million and EUR 263 million principal
amount at maturity of UPC's outstanding senior notes and senior discount notes as well as the EUR 1.0 billion Exchangeable Loan. As of March 31, 2002 these notes and the Exchangeable
Loan are classified as EUR 2,683.1 million related party debt and the interest expense on these notes and the Exchangeable Loan are classified as interest expense related party.

15. Subsequent Events

Bankruptcy filing Tevel

UPC's wholly owned, indirect subsidiary, Cable Network Zuid-oost Brabant Holding B.V. ("Cable Brabant"), holds an indirect 46.6% interest in Tevel
Israel Communications Ltd. ("Tevel"), the largest cable operator in Israel. The economic and regulatory situation in Israel together with the current volatility in the region, led UPC to write
the value of this minority investment down to zero at December 31, 2001. On April 22, 2002, Tevel filed for court protection from creditors and a trustee was appointed by the Israeli
Court to form a plan of reorganization. The trustee has until June 2002 to formulate a plan (or make significant progression towards a plan) that is acceptable to the different classes of
creditors.

25

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These
forward-looking statements may include, and be identified by statements concerning our future plans and strategies, objectives and future economic prospects, expectations, beliefs, anticipated events
or trends and similar expressions concerning matters that are not historical facts, such as our contemplated restructuring. These forward-looking statements involve both known and unanticipated risks,
uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from what we say or imply with the forward-looking
statements. These factors include, among other things, changes in television viewing preferences and habits by our subscribers and potential subscribers, their acceptance of new technology,
programming alternatives and new video services we may offer. They also include the timing, cost, and effectiveness of technological developments, competitive factors, our ability to complete
announced transactions and to manage and grow our newer telephone, digital and internet/data services. With respect to our announced restructuring, these factors include our ability to negotiate the
terms of this proposed restructuring with our bondholders, banks and other debt holders. These forward-looking statements apply only as of the time of this Quarterly Report on
Form 10-Q and we have no obligation or plans to provide updates or revisions to these forward-looking statements or any other changes in events or circumstances on which these
forward-looking statements are based.

The
report of our independent accountants, Arthur Andersen, on our consolidated financial statements for the year ended December 31, 2001, includes a paragraph that states that we
have suffered recurring losses from operations and have a net capital deficiency that raises substantial doubt about our ability to continue as a going concern. Our management's plans in regard to
these matters are described in the Notes to the Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q-Note 2. Our condensed
consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might
result, should we be unable to continue as a going concern. Investors in our company should review carefully the report of Arthur Andersen. There can be no assurance we will be able to continue as a
going concern.

The
following discussion and analysis of financial condition and results of operations covers the three month periods ended March 31, 2002 and 2001, and should be read together
with our consolidated financial statements and related notes included elsewhere herein. These consolidated financial statements provide additional information regarding our financial activities and
condition.

All
monetary amounts in Management's Discussion and Analysis are stated in Euros, unless indicated otherwise.

Recent Developments

On January 2, 2002, our stock was trading below the USD 3.00 minimum bid price on the Nasdaq National Market ("Nasdaq") and has not traded above
USD 3.00 to date. On February 14, 2002, we were informed, through a notification from Nasdaq, that we would be delisted on May 15, 2002, if the stock does not trade for 10
consecutive trading days above USD 3.00 during a 90 day period, beginning February 15, 2002. As of May 15, 2002, we do not meet the minimum bid price requirements, consequently
our ADRs will, as expected, be delisted from Nasdaq before end of May 2002.

Our
shares will commence trading on the Over the Counter Bulletin Board ("OTC BB") in the United States in due course. We do not expect the delisting to affect the normal course of
business for UPC's operating companies. We will be eligible to relist on the Nasdaq if we complete our balance sheet restructuring and are in compliance with Nasdaq rules.

26

---

Viewing
our funding requirements and our possible lack of access to debt and equity capital in the near term, we determined that we would not make interest payments on our senior notes
and senior discount notes, as they fell due. On February 1, 2002, we failed to make required interest payments in the aggregate amount of EUR 113.0 million (USD 100.6 million) on
our outstanding 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010 and 111/2% Senior Notes due 2010. The indentures related to our senior notes and
senior discount notes provide that failing to make interest payments constitutes an "Event of Default" under the notes if we are in default of the payment of interest on any of the notes for a period
of time in excess of 30 days. Since we failed to make the interest payments on the first three series of notes upon expiration of this 30-day grace period on March 3, 2002,
Events of Default occurred under the related indentures. The occurrence of these Events of Default constituted cross Events of Default under the indentures related to the remaining series of senior
notes and senior discount notes. The occurrence of the various Events of Default gives the trustees under the related indentures, or requisite number of holders of such notes, the right to accelerate
the maturity of all of our senior notes and senior discount notes. As of May 15, 2002, neither the trustees for those notes nor the requisite number of holders of those notes have accelerated
the payment of principal and interest under those notes. In addition, on May 1, 2002, we failed to make required interest payments in the aggregate amount of 38.9 million on their
outstanding 107/8% Senior Notes due 2007 and 111/4% Senior Notes due 2009.

On
February 1, 2002, as more fully described in the Form 8-K we filed with the Securities and Exchange Commission on that date, we signed a Memorandum of
Understanding with United and UGC Holdings. The Memorandum of Understanding describes a non-binding agreement in principle with United and UGC Holdings to enter into negotiations with the
holders of our senior notes and senior
discount notes to attempt to reach agreement on a means to restructure our indebtedness at the holding company level.

Our
failure to make the February 1, 2002, interest payments on our outstanding 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010, and
111/2% Senior Notes due 2010, and the resulting Events of Default under the indentures relating to our senior notes and senior discount notes, gave rise to cross events of default under
the following credit and loan facilities:



The
UPC Distribution Bank Facility is secured by share pledges to the banks on UPC Distribution Holding B.V., which is the holding company of most companies within the UPC Distribution
group, and over operating companies within this group. The EWT Facility is secured by share pledges over EWT to RBS. The occurrence of the cross events of default under those facilities give the
creditors under those facilities the right to accelerate the maturity of the loans and to foreclose upon the collateral securing the loans. The Enchangeable Loan is secured by pledges over the stock
of Belmarken, its wholly owned subsidiary UPC Holding B.V. and UPC Internet Holding B.V., which ownschello broadband N.V.The Exchangeable Loan
continued to be held by United as of May 15, 2002.

On
March 4, 2002, as more fully described in the Form 8-K we filed with the Securities and Exchange Commission on that date, we received waivers from the
lenders under the UPC Distribution

27

---

Bank Facility, the EWT Facility and the Exchangeable Loan for the cross events of defaults under such facilities that existed or may exist as a result of our failure to make the interest payment due
on February 1, 2002, on our outstanding 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010 and 111/2% Senior Notes due 2010, within the
applicable cure periods, or any resulting cross defaults.

Each
of these waivers will remain effective until the earlier of



In
addition, each of these waivers contains certain other conditions and undertakings and will terminate if there is a default by us of the terms of that waiver. The waiver under the UPC
Distribution Bank Facility subjects us to a EUR 100 million drawdown limitation under that facility, subject to certain conditions, during the period in which the waiver is in place.

As
of May 15, 2002, we had not made the interest payments on the 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010, 111/2%
Senior Notes due 2010, 107/8% Senior Notes due 2007, 111/4% Senior Notes due 2009, as more fully described in the Form 8-K's, which we filed with the
Securities and Exchange Commission on February 1, 2002 and May 1, 2002, and none of the defaults described above have had a material adverse effect on the operations of our subsidiaries
or their or our relationships with customers, suppliers and employees.

The
occurrence of the events of default described above also triggered the right of the holders of a minority interest in our 51% owned subsidiary, UPC Germany, to acquire from us for
nominal consideration shares of UPC Germany constituting 22% of UPC Germany's outstanding shares. On March 5, 2002, we received notice of the holders' notice of exercise. After settlement of
this exercise, our interest in UPC Germany will be reduced to 29%. The involved parties are in discussion about this exercise notice.

During
the month of March 2002, we met with representatives of United, which currently holds the Exchangeable Loan and a significant portion of our senior notes and senior
discount notes, and a steering committee representing the holders of our senior notes and senior discount notes (other than United) to begin preliminary discussions with respect to a process for, and
terms of, a restructuring of those notes and the Exchangeable Loan. United and its advisors and the noteholders' steering committee and its advisors completed the due diligence about us and our
current financial condition. We have not reached any decisions with either United or the noteholders' steering committee regarding the terms or timing of a debt restructuring. We expect that this
process will take a number of months to complete. If completed, the restructuring will result in substantial dilution of our existing shareholders, a loss of some or all of the value of our
outstanding securities, including our ordinary
shares, preference shares and senior notes and senior discount notes, as well as the Exchangeable Loan. Since we are in discussions with United and the noteholders' steering committee, we cannot
predict the terms or the timing of our restructuring. In addition, we cannot assure you that we will be able to reach agreement with either United or the noteholders on mutually satisfactory terms for
the debt restructuring.

28

---

If
we are unable to reach agreement on the terms of the debt restructuring or are otherwise unable to successfully complete an agreed upon restructuring plan for our debt, we may seek
relief under a debt moratorium, leading to a suspension of payments, or bankruptcy proceeding under applicable laws. If we seek relief under either of these proceedings, or any other laws that may be
available to us, holders of our outstanding securities, including our ordinary shares, preference shares and senior notes and senior discount notes, as well as the Exchangeable Loan, may lose some or
all of the value of their investment in our securities. Such proceedings could result in material changes in the nature of our business, material adverse changes to our financial condition and results
of operations or our liquidation.

In
a separate transaction on February 1, 2002, we amended two swap agreements with a bank effective as of January 31, 2002 and as more fully described in the
Form 8-K we filed with the Securities and Exchange Commissions on such date. The swap agreements were entered into in connection with the issuance of some of our senior notes and
senior discount notes. The swap agreements were subject to early termination upon the occurrence of certain events, including the defaults described above. The amendment provides that the bank's
obligations to us under the swap agreements have been substantially fixed and the agreements will be unwound on or prior to July 30, 2002. In settlement of the bank's obligations to us, the
bank is entitled to offset, and will deliver to us, approximately EUR 400 million, subject to adjustment in the case of certain circumstances, in aggregate principal amount of our senior notes
and senior discount notes held by that bank. Upon offset against, and delivery to us of, the senior notes and senior discount notes, our indebtedness will be reduced by approximately EUR
400 million and we will recognize an extraordinary gain.

We
have experienced net losses since formation. As of March 31, 2002, there was substantial uncertainty whether our sources of capital, working capital and projected operating
cash flow would be sufficient to fund our expenditures and service our indebtedness over the next year. Accordingly, there is substantial doubt regarding our ability to continue as a going concern. In
addition, as a result of the events of default described above, our senior notes, senior discount notes, the Exchangeable Loan and the UPC Distribution Bank Facility have been classified as current
liabilities. Our ability to continue as a going concern is dependent on (i) our ability to restructure the July 1999 Notes, October 1999 Notes, January 2000 Notes, the
Exchangeable Loan and the convertible preferred stock and (ii) our ability to generate the cash flows required to enable us to recover our assets and satisfy our liabilities, in the normal
course of business, at the amounts stated in the consolidated financial statements. The report of our independent public accountant, Arthur Andersen, on our consolidated financial statements for the
year ended December 31, 2001, includes a paragraph that states that we have suffered recurring losses from operations and have a net capital deficiency that raises doubt about our ability to
continue as a going concern.

Description of Businesses

We own and operate broadband communications networks and services in 17 countries in Europe and in Israel. Our operations are organized into three principal
divisions. UPC Distribution, which delivers video, internet and telephone services to residential customers (the "Triple Play"). UPC Media, which comprises our converging chello broadbandinternet
business and our content and programming businesses, led by UPCtv. UPC Media's operations also include our digital products.Priority Telecom,which operates our CLEC business and provides telephone and data network solutions to the business market. The Priority Telecombrand is
also used to offer telephone services to residential customers through UPC Distribution.

Our
subscriber base is one of the largest of any group of broadband communications networks operated across Europe. Our goal is to enhance our position as a leading
pan-European distributor of video programming services and to become a leading pan-European provider of telephone, internet and enhanced video services, offering a
one-stop shopping solution for residential and business

29

---

communication needs. We plan to execute on this goal by increasing the penetration of our new services, such as digital video, telephone and internet, primarily within our existing customer base.

Since
formation, we have developed largely through acquisitions and growth in new services, which have resulted in significant growth in our consolidated revenues and expenditures.

During
2001, we reviewed our current and long-range plan for all segments of our business and we hired a strategic consultant to assist us in the process. We worked
extensively with this consultant to revise our strategic and operating plans. Our strategic vision has changed our focus from an aggressive digital roll-out to increasing the volume of our
sales of products and services that have better gross margins and are profitable. The revised business plan focuses on average revenue per subscriber and margin improvement, increased penetration of
new service products within existing upgraded homes, efficient deployment of capital and focus on products with positive net present values.



The following table presents an overview of our revenues by segment for the three months ended March 31, 2002 and 2001.

|                            |                    | Revenue for the Three Months Ended March 31, |        
|--------------------------- | ------------------ | -------------------------------------------- | -------
|
|
|Triple Play Distribution(1) |                    | 309,581                                      |        
|DTH                         |                    | 7,212                                        |        
|Programming                 |                    | -                                            |        
|Other                       |                    | 10,040                                       |        
|Intercompany Eliminations   |                    | -                                            |        
|                            |                    |                                              |        
|                            | Total Distribution |                                              | 326,833
|                            |                    |                                              |        
|Priority Telecom            |                    | 32,116                                       |        
|UPC Media                   |                    | 18,515                                       |        
|Corporate, IT & Other       |                    | 123                                          |        
|Intercompany Eliminations   |                    | (31,275                                      | )      
|                            |                    |                                              |        
|                            | Total              |                                              | 346,312
|                            |                    |                                              |        

---

Revenue
increased 12.9 million, or 3.9%, from 333.4 million for three months ended March 31, 2001 to 346.3 million for the three months ended March 31,
2002. Of this increase, 31.0 million is from UPC
Distribution, 2.2 million is from UPC Media, and 7.3 million from the decrease in intercompany eliminations. The improvement was partially off-set by the 26.8 million
decrease in the revenue ofPriority Telecomand the 0.8 million decrease in the revenue of Corporate, IT and Other.

UPC Distribution.For the three months ended March 31, 2002, revenue from UPC Distribution increased
31.0 million to 326.8 million, from 295.9 million for the three months ended March 31, 2001, a 10.5% increase. Increases of 49.7 million from Triple Play and
21.9 million from the decrease in intercompany eliminations were partially offset by a 14.5 million decrease in DTH, 22.4 million in Programming and 3.8 million in Other.

Of
the 49.7 million increase in Triple Play revenue, 13.2 million is from cable television and digital, 11.6 million from telephone, and 25.0 million from
internet. The increase of Triple Play revenue is a

30

---

combination of an increase in RGUs through organic growth, as well as an increase in average revenue per subscriber ("ARPU"). At March 31, 2002, Triple Play RGUs were 8,435,700, which
represents an increase of 359,000 from March 31, 2001 when RGUs were 8,076,700 proforma for the disposal of Uniport and the Polish DTH business.

The
14.5 million decrease in DTH revenue is attributable to the fact that our Polish DTH business, which generated revenue of 17.6 million for the three months ended
March 31, 2001, was as of December 7, 2001 contributed to Telewizyjna Korporacja Partycypacyjna S.A. ("TKP"), a newly formed, non consolidated, joint venture with Canal+, in which we
have a 25% investment.

UPC
Distribution no longer has any programming revenue due to the closure of the sports channels in the central European region.

Other
revenue is primarily revenue recognized for the provision of network related services toPriority Telecom.UPC Distribution has
entered into agreements withPriority Telecomfor the provision by UPC Distribution of network, maintenance and operations services. This intercompany
revenue is eliminated in our consolidated results.

Priority Telecom.Priority Telecomrevenue decreased 26.8 million from
58.9 million for the three months ended March 31, 2001 to 32.1 million for the three months ended March 31, 2002. The decrease in revenue is primarily attributable to the
unwind of the international wholesale voice and data business.

UPC Media.UPC Media revenue increased 2.2 million from 16.4 million for the three months ended
March 31, 2001 to 18.5 million for the three months ended March 31, 2002. Of the UPC Media increase,chello broadbandrevenue
increased 0.6 million from 13.2 million for the three months ended March 31,
2001 to 13.8 million for the three months ended March 31, 2002.chello broadbandincreased revenue through stable subscriber growth, and
improved average revenue per subscriber, this was however offset by the new franchise fee in place from January 1, 2002, by which UPC Distribution payschello
broadband20% of its internet access revenues, compared to 40% in 2001. UPCtv revenue increased 1.5 million from 3.1 million for the three months ended
March 31, 2001 to 4.7 million for the three months ended March 31, 2002. The growth in UPC Distribution's cable television and digital subscribers, on which UPCtv is dependent,
positively impacted UPCtv's revenue.

Corporate, IT and Other.Corporate, IT, and Other revenue decreased 0.8 million from 0.9 million for the three
months ended March 31, 2001 to 0.1 million for the three months ended March 31, 2002. The decrease in revenue is primarily attributable to the decrease in management fees. We no
longer receive management fees from Tevel, which filed for bankruptcy protection in March 2002.

Intercompany eliminations.Intercompany eliminations decreased by 7.3 million from 38.6 million for the three
months ended March 31, 2001 to 31.3 million for the three months ended March 31, 2002. The intercompany elimination of 31.3 million for the three months ended
March 31, 2002, relates to inter-divisional revenue that is received byPriority Telecom, UPC Media, and UPC Distribution. Priority Telecomreceived
6.2 million of switch and other revenue from UPC Distribution forPriority
Telecom's services relating to UPC Distribution's residential customers. UPC Media received 13.9 million from UPC Distribution of which 12.2 million and
1.7 million relates tochello broadbandand UPCtv, respectively.chello broadbandprovides
affiliated local operators withchello broadbandportals and content, interactive services and two-way voice and video. UPCtv provides programming
services to UPC Distribution. UPC Distribution received 11.3 million in revenue fromPriority Telecom,primarily relating to revenue recognized
for the provision of network related services.

31

---



The following table presents an overview of our Adjusted EBITDA by segment for the three months ended March 31, 2002 and 2001.

|                            |                    | Adjusted EBITDA(1) for the Three Months Ended March 31, |       
|--------------------------- | ------------------ | ------------------------------------------------------- | ------
|
|
|Triple Play Distribution(2) |                    | 82,536                                                  |       
|DTH                         |                    | 524                                                     |       
|Programming                 |                    | -                                                       |       
|Other                       |                    | 4,815                                                   |       
|                            |                    |                                                         |       
|                            | Total Distribution |                                                         | 87,875
|                            |                    |                                                         |       
|Priority Telecom            |                    | (4,676                                                  | )     
|UPC Media                   |                    | (5,575                                                  | )     
|Corporate, IT & Other       |                    | (22,810                                                 | )     
|                            |                    |                                                         |       
|                            | Total              |                                                         | 54,814
|                            |                    |                                                         |       

---

For
the three months ended March 31, 2002, Adjusted EBITDA improved by 115.6 million, or 190.1%, from negative 60.8 million for the three months ended
March 31, 2001 to positive 54.8 million for the three months ended March 31, 2002. Of this improvement, 68.9 million is from UPC Distribution, 16.5 million is from Priority Telecom, 30.0 million is from UPC Media and 0.3 million is from Corporate, IT and Other.

UPC Distribution.UPC Distribution Adjusted EBITDA increased by 68.9 million, from 19.0 million for the three
months ended March 31, 2001 to 87.9 million for the three months ended March 31, 2002. Of the increase, 46.3 million is from Triple Play, 6.0 million is from DTH,
12.2 million is from Programming and 4.4 million is from Other. These increases are the result of a number of factors including: increase operational efficiencies achieved by cost
control, improvements in processes and systems and organizational rationalization; improved gross margins brought about by continued negotiations with major vendors; and the improvements in gross
profit brought about by successfully driving higher service penetration in existing customer base and continuing to achieve increased ARPU.

Priority Telecom.For the three months ended March 31, 2002, Adjusted EBITDA fromPriority
Telecomincreased 16.5 million to a negative 4.7 million, from a negative 21.2 million for the three months ended March 31, 2002. The
16.5 million improvement in Adjusted EBITDA relates primarily to cost savings through the unwind of international wholesale voice and data business.

32

---

UPC Media.UPC Media Adjusted EBITDA improved 30.0 million from negative 35.6 million for the three months
ended March 31, 2001 to negative 5.6 million for the three months ended March 31, 2002. Of the 30.0 million increase 21.0 million is fromchello
broadband, and 9.0 million from UPCtv.chello broadband'sAdjusted EBITDA improved 21.0 million, from negative
20.1 million for the three months ended March 31, 2001 to positive 0.8 million for the three months ended March 31, 2002. Improved Adjusted EBITDA is primarily attributable
to the material drop in direct costs as a result of the carve out of the internet access business (including the AORTA backbone) to UPC Distribution. UPC Distribution now owns the internet access
business (including the AORTA backbone) and therefore incurs the corresponding costs. In addition,chello broadbandoperational expenses have decreased
through cost control and operational efficiencies. Adjusted EBITDA from UPCtv improved 9.0 million to negative 6.4 million from negative 15.4 million for the three months ended
March 31, 2002. UPCtv provides programming to UPC Distribution operating companies as well as to non-UPC service customers. The improvement in Adjusted EBITDA reflects increased
revenue, a rationalised cost base and cost savings through closure of channels.

Corporate, IT and Other.For the year three months ended March 31, 2002, Adjusted EBITDA from Corporate, IT and Other
improved 0.3 million to negative 22.8 million, from 23.1 million for the three months ended March 31, 2001. Adjusted EBITDA for Corporate, IT and Other includes costs for
our
corporate functions, development costs relating of our digital set-top computer, the research of new technologies and development of our integrated pan-European IT platform.

The
Company's consolidated Adjusted EBITDA reconciles to the consolidated statements of operations as follows:

|                                     |                              | For the Three Months Ended March 31, |       
|------------------------------------ | ---------------------------- | ------------------------------------ | ------
|
|
|Operating loss                       |                              | (128,551                             | )     
|Depreciation and amortization        |                              | 172,632                              |       
|Stock-based compensation             |                              | 6,790                                |       
|Impairment and restructuring charges |                              | 3,943                                |       
|                                     |                              |                                      |       
|                                     | Consolidated Adjusted EBITDA |                                      | 54,814
|                                     |                              |                                      |       

Operating Expenses

Operating expenses include direct costs and costs relating to network operations, customer operations, customer care, billing and collecting, broadcasting,
technology, programming, content and franchise fees.

Our
consolidated operating expenses decreased 67.3 million from 255.3 million for the three months ended March 31, 2001 to 188.0 million for the three months
ended March 31, 2002. The decrease consisted of a 52.1 million decrease in direct costs and 15.2 million decrease in operating expenses. Of the 52.1 million decrease in
direct costs, 20.2 million is attributable to business telephony, 25.2 million to programming and 8.9 million to internet. These decreases were partially offset by
2.1 million increase in
television and other direct costs. Business telephony costs decreased 20.2 million from 38.1 million for the three months ended March 31, 2001 to 18.0 million for the three
months ended March 31, 2002. This decrease is primarily attributable to the closure of the international wholesale voice and data business. Programming costs decreased 25.2 million from
29.1 million for the three months ended March 31, 2001 to 3.9 million for the three months ended March 31, 2002. This decrease is primarily attributable to the
deconsolidation of Poland DTH and the closure of the sport channels in the central European region. The 8.9 million decrease in internet direct costs reflects a

33

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reallocation from direct costs to operating expenses, which is a result of the transfer of the internet access business fromchello broadbandto UPC
Distribution. The 15.2 million decrease in operating expenses is primarily attributable to decrease in network and customer operations, programming and content costs, and is the result of
numerous initiatives targeted to improve operational efficiencies.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include costs relating to human resources, IT, general services, management, finance, and customer acquisition costs.
Selling, general and administrative expenses include stock-based compensation.

Our
consolidated selling, general and administrative expenses, decreased 29.7 million from 140.0 million for the three months ended March 31, 2001 to
110.3 million for the three months ended March 31, 2002. Tight cost controls resulted in 35.7 million decrease in departmental costs. This was partially offset by a
6.1 million increase in stock based compensation expense.

Depreciation and Amortization

During the three months ended March 31, 2002, our depreciation and amortization expense decreased 72.5 million to 172.6 million, from
245.2 million for the three months ended March 31, 2001, a 29.6% decrease. This is mainly due to the fact that, in accordance with the adoption of SFAS 141, we ceased amortizing
goodwill.

Interest Expense

During the three months ended March 31, 2002 as compared to the three months ended March 31, 2001, interest expense increased 12.0 million to
230.2 million, from 218.2 million, a 5.5% increase. The increase in 2002 relates to accretion on our discount notes and the Exchangeable Loan, which are not currently cash pay. Of the
interest expense for the three months ended March 31, 2002, 58.4 million is classified as
Interest Expense Related Party due to United's acquisition of a portion of our senior notes and senior discount notes and the Exchangeable Loan in the first quarter of 2002.

|                       |                    | For the Three Months Ended March 31, |        
|---------------------- | ------------------ | ------------------------------------ | -------
|
|
|Cash Current Pay:      |                    |                                      |        
|                       | Bank               |                                      | (62,614
|                       | Senior Notes       |                                      | (72,247
|                       |                    |                                      |        
|                       |                    | (134,861                             | )      
|                       |                    |                                      |        
|Non-Cash Accretion:    |                    |                                      |        
|                       | Discount Notes     |                                      | (75,095
|                       | Exchangeable Loan  |                                      | (15,323
|                       | New DIC Loan       |                                      | -      
|                       | Deferred Financing |                                      | (4,926 
|                       |                    |                                      |        
|                       |                    | (95,344                              | )      
|                       |                    |                                      |        
|Total Interest Expense |                    | (230,205                             | )      
|                       |                    |                                      |        

34

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In the first quarter of 2002, we commenced discussions with holders of our senior notes and senior discount notes, as well as with United, our parent, as holder of the Exchangeable Loan
and such notes, aimed at reaching an agreement on restructuring of such indebtedness, including the reduction or elimination of such indebtedness. If a satisfactory restructuring is agreed upon, it
could result in a substantial reduction in our cash and non-cash interest expenses in 2002 and thereafter. However, the discussions are in an early phase and no assurance can be given
whether or when a restructuring could occur or the terms of a restructuring. If we are unable to restructure our indebtedness, it is likely that our cash and non-cash interest expense will
increase in 2002 and thereafter as a result of accretion in value of our senior discount notes and the interest on potential additional draw downs on the UPC Distribution Bank Facility.

Foreign Exchange Gain (Loss) and Other Income (Expense)

The net loss from foreign exchange gain (loss) and other income (expense) increased 150.8 million from a loss of 92.1 million for the three months
ended March 31, 2001 to a loss of 242.9 million for the three months ended March 31, 2002, due primarily to a significant decrease in the fair value of our cross currency and
interest rate derivative contracts from period to period. For the quarter ended March 31, 2002, we recorded a loss of 177.8 million in connection with the mark-to-market valuations.

Extraordinary Gain

This gain relates to the restructuring and cancellation of costs associated with excess capacity of certainPriority Telecom
N.V.vendor contracts.

Share in Results of Affiliated Companies, Net

For the three months ended March 31, 2002, our share in net losses of affiliated companies decreased 24.8 million to 21.3 million, from
46.1 million for the three months ended March 31, 2001, a 54% decrease. The decrease for the three months ended March 31, 2002, relates to lower losses from our investments in
SBS, PrimaCom. In addition, we do not record any losses on Tevel as we have completely written off their assets.

Cumulative effect of Accounting Change

Effective January 1, 2001, we adopted SFAS No. 133, "Accounting for Derivative and Hedging Activities" ("SFAS 133"), which establishes
accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. All derivatives, whether designated in
hedging relationships or not, are required to be recorded on the balance sheet at fair value. The adoption of SFAS 133 on January 1, 2001, resulted in a cumulative increase to income of
35.3 million and a cumulative increase to Other Comprehensive Income ("OCI") of 36.7 million. The increase to income was attributable to a loss of approximately 36.7 million
reclassified from OCI for the value of certain warrants held by the Company, which are derivatives and are not designated as a hedging instrument, and income of approximately 58.0 million
related to gains associated with the cross currency swaps which are held by the Company, which do not qualify as hedging instruments as defined by SFAS 133. We use derivative instruments to
manage exposures to foreign currency and interest rate risks.

New Accounting Principles

We adopted SFAS 142, "Goodwill and Other Intangible Assets," effective January 1, 2002. Under SFAS 142, goodwill and intangible assets with
indefinite lives are no longer amortized, but are tested for impairment on an annual basis and whenever indicators of impairment arise. In addition, goodwill on equity method investments is no longer
amortized, but tested for impairment in accordance with

35

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APB 18. The goodwill impairment test, which is based on fair value, is performed on a reporting unit level. All recognized intangible assets that are deemed not to have an indefinite life are
amortized over their estimated useful lives. We are still in the process of comparing the fair value of our reporting units with their respective carrying amounts, including goodwill. This process
will enable us to identify any potential goodwill impairment from the adoption of SFAS 142. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is
considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test will be performed to measure the amount of impairment loss.
It is possible that a substantial cumulative effect adjustment may be required as a result of this process. As of March 31, 2002, net goodwill of approximately 2.9 billion is included in
the accompanying condensed consolidated balance sheets.

In
April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections." ("SFAS 145"). SFAS 145, which updates, clarifies and simplifies existing accounting pronouncements, addresses the
reporting of debt extinguishments and accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. The provisions of SFAS 145 are
generally effective for our 2003 fiscal year, or in the case of specific provisions, for transactions occurring after May 15, 2002 or financial statements issued on or after May 15,
2002. For certain provisions, including the rescission of Statement 4, early application is encouraged. We have not adopted SFAS 145 and are currently evaluating the impact of
SFAS 145 on our
consolidated financial statements. We do not believe that the adoption of SFAS 145 will have a material impact on our net loss, financial position or cash flows.

Statements of Cash Flows

We had cash and cash equivalents of 641.2 million as of March 31, 2002, a decrease of 213.8 million from 885.0 million as of
December 31, 2001.

Cash Flows from Operating Activities

During the three months ended March 31, 2002, net cash flow used in operating activities was 61.5 million compared to a use of 393.8 million
for the comparable period in 2001. This decrease of cash used for operating activities was mainly related to a decrease in cash used to reduce current liabilities, a decrease of cash used in operating
expense, and a decrease of cash used in selling, general and administrative expense resulting in an improvement of Adjusted EBITDA. The 30.3 million of restricted cash that was released related
mainly to the fact that the Canal + transaction stipulated that 30.0 million of the proceeds had to be used to fund TKP. This 30.0 million funding obligation was classified
as restricted cash as at December 31, 2001 and was paid to TKP in February 2002.

Cash Flows from Investing Activities

We used 118.0 million of net cash flow in investing activities during the three months ended March 31, 2002, compared to 241.1 million for
the three months ended March 31, 2001. This decrease of 123.1 million was primarily related to a decrease in capital expenditure.

During
the three months period ended March 31, 2002, we acquired the remaining 30% of AST Romania we did not previously own for a consideration of 24.1 million.
Capital expenditure equaled 102.0 million.

During
the three months period ended March 31, 2001, we acquired Alkmaar for 22.9 million, net of cash acquired. Capital expenditure represented 212.3 million.

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Cash Flows from Financing Activities

We had 31.2 million of cash outflows from financing activities during the three months ended March 31, 2002, compared to 173.8 million of
cash inflows for three months ended March 31, 2001. The decrease of 205.0 million related to the fact that we did not have substantial proceeds from long- and
short-term borrowings, whereas we had 200.0 million cash inflows from the Distribution Bank Facility in the first three months of 2001. In addition, the interest payment due on our
outstanding 107/8% Senior Notes due 2009, 111/4% Senior Notes due 2010 and 111/2% Senior Notes due 2010 of 113.0 million on February 1, 2002
was not paid.

In
2002 we paid down 31.8 million on various long-term and short-term debt facilities, and we had 0.7 million of proceeds from long-term
and short-term borrowings.

In
2001 we paid down of 26.2 on various long-term and short-term debt facilities and there was a drawdown of 200.0 million from the UPC Distribution Bank
Facility.

Consolidated Capital Expenditures

Since 1995, we have been upgrading our existing cable television system infrastructure and constructing our new-build infrastructure with
two-way high capacity technology to support digital video, telephone and internet/data services. Capital expenditures for the upgrade and new-build construction can be reduced
at our discretion, although such reductions require lead-time in order to complete work-in-progress and can result in higher total costs of construction. At the end
of 2001, we completed a strategic review of the business, which has resulted in a reduced capital expenditure programme for 2002, as we focus on increasing penetration of new services in our existing
upgraded footprint and efficient deployment of capital on a limited basis, aimed at causing product deployment to result in positive net present values.

In
addition to the network infrastructure and related equipment and capital resources described above, development of our newer businesses,chello broadband,
Priority Telecom,our digital distribution platform and DTH, including expansion into Central Europe, requires capital expenditures for construction and development of our
pan-European distribution and programming facilities, including our origination facility, network operating center, and related support systems and equipment.

For
the year 2002, we plan a significant reduction on capital expenditures. Customer premise equipment ("CPE") costs in 2002 are expected to decrease based on current negotiated prices,
which are continuing to decrease further as market rates for such equipment continue to fall aided by centrally led contract negotiations. In addition, tighter field controls have been implemented
leading to higher rates of CPE retrieval.

Network
and upgrade capital expenditure will also see a significant reduction as we plan to limit additional network investment primarily to that needed to cover maintenance and costs
necessary to support expansion of services with our existing network being expected to largely cope with the anticipated increase in traffic. In addition, we plan to limit new build expenditures
primarily to that in areas where essential franchise commitments require investment and to limit additional upgrade investment until such a time that existing upgraded areas are fully serviced.

Liquidity and Capital Resources

Historically, we have financed our operations and acquisitions primarily from:



37

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In
general, we have been primarily dependent on the capital markets in the past to fund acquisitions, developing systems and products and corporate overhead, using the cash contributed
by United Europe, Inc. upon formation and debt and equity raised at the UPC Corporate level for such purposes.
However, going forward we may not be able to access the capital markets as a source of capital. Our current plans do not anticipate such access, although we might access such markets if we were able.

In
addition, we have financed our well-established systems and, when possible, our developing systems, with debt at the subsidiary levels and with operating cash flow.
Well-established systems generally have stable positive cable cash flows that are used to partially offset funding necessary for new product offerings, including telephone and
internet/data. Developing systems are at various stages of construction and development and generally depend on us for some of the funding for their operating needs until alternative financing can be
secured.

In
2002 and thereafter, we anticipate that the sources of capital possibly available to us to include working capital and operating cash flows, proceeds from the disposal of
non-core investments, and further internal reorganization and alignment of businesses, draw downs under the UPC Distribution Bank Facility and vendor financing. We do not anticipate access
to the capital markets as a source of funding unless we are able to restructure our existing indebtedness. If we are able to complete our planned debt restructuring satisfactorily and are able to
implement a rationalization of our non-core investments and improve our operating performance, we believe that our existing cash balance, our working capital and operating cash flow and
draw downs available under the UPC Distribution Bank Facility, will be sufficient to fund operations for the foreseeable future. However, during the period in which the waivers are in place in
relation to the cross events of default under our UPC Distribution Bank Facility we have a draw down limitation of 100 million under this facility. Should the planned debt restructuring,
further internal reorganization and alignment of businesses and the investment rationalization program be unsuccessful, or should operating results fall behind our current business plan, there is
uncertainty whether we will have sufficient funds to meet our expenditure or debt commitments and as such not be able to continue as a going concern.

Liquidity Requirements

As a result of our failure to pay interest when due on certain of our senior notes, the maturity of those notes, our senior discount notes, the Exchangeable Loan,
the UPC Distribution Facility and the EWT Facility may be accelerated at any time, subject, in the case of the Exchangeable Loan, the UPC Distribution Facility and the EWT Facility to conditional
waivers granted by the holders of such indebtedness. Consequently, all such indebtedness has been classified as current portion of long-term debt.

38

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The table below shows the maturity dates of our future obligations, based on the classification of our defaulted indebtedness as current portion of long-term debt.

|                                   |                        | Payments due by Period
|---------------------------------- | ---------------------- | ----------------------
|
|
|Contractual Obligations            |                        |                       
|Short term debt                    |                        | 82,282                
|Long term debt                     |                        | 9,381,046             
|Operating Leases                   |                        | 47,497                
|Unconditional Purchase Obligations |                        | 12,609                
|Other Long term Obligations        |                        | 26,997                
|                                   |                        |                       
|                                   | Total Contractual Cash |                       
|                                   |                        |                       

Even
if the indebtedness described above were not defaulted and were classified as short- or long-term indebtedness in accordance with the contractual terms of the
indebtedness, we would have substantial liquidity requirements in 2002 and thereafter. For example, cash payable in 2002 under the existing contractual terms of our senior notes, senior discount
notes, the Exchangeable Loan, UPC Distribution Bank Facility and other short- and long-term debt amounts to approximately 550.0 million. In addition, principal payments scheduled in
2002 under the existing contract terms such debt amount to approximately 145.6 million.

Our
non-restricted cash and cash equivalents were 641.2 million at March 31, 2002, however our ability to draw on available cash under borrowing facilities may
be limited because of existing defaults and because we do not anticipate being able to access the capital markets in the short term, we have therefore commenced discussions aimed at restructuring our
outstanding indebtedness, including our senior notes, senior discount notes and the Exchangeable Loan.

Restrictions under our July 1999, October 1999 and January 2000 Indentures

Our activities are restricted by the covenants of our indentures dated July 30, October 29, 1999 and January 20, 2000, under which our senior
notes and senior discount notes were issued. Among other things, our indentures place certain limitations on our ability, and the ability of our subsidiaries, to borrow money, pay dividends or
repurchase stock, make investments, create certain liens, engage in certain transactions with affiliates, and sell certain assets or merge with or into other companies.

Under
the terms of our indentures, if we raise additional common equity, we will be permitted to incur additional debt.

Amsterdam ExchangeNegative Equity

As of March 31, 2002 we had negative shareholders' equity. This does not affect the fundamentals of our business and is a function of significant capital
investment with correspondingly high depreciation and amortization charges, typical of the telecommunications industry. Upon occurrence of the event, we promptly reported this deficit to the Euronext.
As expected, the Euronext stock exchange has put our shares on the so called "penalty bench" until such time as we return to positive shareholders' equity. In addition, on February 14, 2002,
Euronext removed our shares from the AEX index after a three-month notice period. This has not, however, resulted in a delisting of our shares, which are still freely tradeable. We believe that the
status of our shares on Euronext will not have an impact on our business operations, although we believe it will have a negative effect on our stock price and could adversely affect our ability to
raise equity in the future.

39

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By
letter of February 15, 2002, Euronext confirmed that once a company has been referred to the penalty bench it is Euronext's consistent policy not to lift the measure until such
time as a financial restructuring of a company has been completed resulting in the shareholders' equity of such a company meeting at least the level required in order to be listed on the Euronext, and
other Euronext requirements according to its rules are satisfied. Euronext confirmed that we would need to satisfy the following in order for the penalty bench measure imposed on us to be lifted:



In
accordance with article 108A, book 2 of the Dutch Civil Code, we will address the issue of negative equity at our next general shareholders' meeting.

Nasdaq National Market Listing Requirements

Our ordinary shares are traded in the form of American Depositary Receipts ("ADRs") on the Nasdaq National Market ("Nasdaq") under the symbol "UPCOY." Nasdaq has
traditionally maintained certain rules regarding bid prices for continued listing on the market. Following our third quarter results announcement on November 14, 2001 and as a result of
reporting negative shareholders equity we are currently listed on the Nasdaq National Market under Standard Two. The minimum bid price applicable to us for continued listing under Standard Two is USD
3.00.

On
September 27, 2001, Nasdaq announced a suspension of the minimum bid requirements for continued listing. The suspension of these requirements remained in effect until
January 2, 2002, when they were reinstated.

On
January 2, 2002, our stock was trading below the USD 3.00 minimum bid price and has not traded above USD 3.00 to date. On February 14, 2002, we were informed, through a
notification from Nasdaq, that we would be delisted on May 15, 2002, if the stock does not trade for 10 consecutive trading days above USD 3.00 during a 90 day period, beginning
February 15, 2002. As of May 15, 2002, we do not meet the minimum bid price requirements, consequently our ADRs will, as expected, be delisted from Nasdaq before end of May 2002.

Our
shares will commence trading on the Over the Counter Bulletin Board ("OTC BB") in the United States in due course. We do not expect the delisting to affect the normal course of
business for UPC's operating companies. We will be eligible to relist on the Nasdaq if we complete our balance sheet restructuring and are in compliance with Nasdaq rules.

Sources of Capital

We had approximately 641.2 million of cash and cash equivalents on hand as of March 31, 2002. In addition, we had additional borrowing capacity at
the holding company and subsidiary level, although our ability to access such capacity may be restricted or eliminated as a result of defaults arising in the first quarter of 2002, as discussed in
Item 2 "Recent Developments". To date, our principal sources of capital have been debt and equity capital raised at the UPC corporate level and debt securities and bank debt issued or borrowed by
subsidiaries. We do not expect to access these sources of capital in 2002 and thereafter, unless we are able to restructure our existing indebtedness.

As
per March 31, 2002, the amount outstanding under the UPC Distribution Bank Facility has not increased as compared to amounts outstanding as of December 31, 2001. As of
March 31, 2002, 3.2 billion is outstanding under this Facility.

40

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In
May 2001, we completed the placement of the Exchangeable Loan, receiving proceeds of USD 856.8 million (1.0 billion). The holder of the Exchangeable Loan
has the right to exchange the loan, which was borrowed by our wholly-owned subsidiary, Belmarken, into our ordinary shares under certain circumstances at USD 6.85 per share. The Exchangeable Loan was
transferred to United on January 30, 2002, as a part of a transaction between Liberty, the original holder of the Exchangeable Loan, and United. We may exchange the loan for our ordinary shares
at USD 6.85 per share subject to certain conditions.

Matters Pertaining to Arthur Andersen

Our independent accountant, Arthur Andersen, has informed us that on March 14, 2002, its U.S. affiliate, Arthur Andersen LLP, was indicted by
the U.S. Department of Justice on federal obstruction of justice charges arising from the U.S. government's investigation of Enron Corp. Arthur Andersen LLP has indicated
that it intends to contest vigorously the indictment. Our Audit Committee has been carefully monitoring this situation. As a public company, we are required to file with the SEC periodic financial
statements audited or reviewed by an independent accountant. The Securities and Exchange Commission ("SEC") has said that it will continue accepting financial statements audited by Arthur
Andersen LLP and its non-U.S. affiliates, so long as they are able to make certain representations to its clients. Our access to the capital markets and our ability to make
timely SEC filings could be impaired if the SEC ceases accepting financial statements audited by Arthur Andersen, if Arthur Andersen becomes unable to make the required representations to us or if for
any other reason Arthur Andersen is unable to perform required audit-related services for us. In such a case, we would promptly seek to engage new independent accountants or take such
other actions as may be necessary to enable us to maintain access to the capital markets and timely financial reporting.

Item 3.    Quantitative and Qualitative Disclosure About Market Risk

Investment Portfolio

As of March 31, 2002, we had cash and cash equivalents of approximately 641.2 million. We have invested this cash in highly liquid instruments,
which meet high credit quality standards with original maturities at the date of purchase of less than three months. These investments will be subject to interest rate risk and foreign exchange
fluctuations (with respect to amounts invested in currencies
outside the European Monetary Union) however, the Company does not expect any material losses with respect to its investment portfolio.

Inflation and Foreign Currency Exchange Rate Losses

To date, we have not been impacted materially by inflation.

The
value of our monetary assets and liabilities is affected by fluctuations in foreign currency exchange rates as accounts payable for certain equipment purchases and certain operating
expenses, such as DTH and programming expenses, are denominated in currencies other than the functional currency of the entity making such payments. We and some of our operating companies have notes
payable and notes receivable that are denominated in, and loans payable that are linked to, a currency other than their own functional currency, exposing us to foreign currency exchange risks on these
monetary assets and liabilities. Historically, we have not hedged our exposure to foreign currency exchange rate operating risks. Accordingly, we may experience economic loss and a negative impact on
earnings and equity with respect to our holdings solely as a result of foreign currency exchange rate fluctuations. In connection with our offerings of senior notes in July 1999,
October 1999 and January 2000 we entered into cross-currency swap agreements, exchanging U.S. dollar denominated obligations for Euro denominated obligations.

41

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The
functional currency for our operations generally is the applicable local currency for each operating company. We have consolidated operations in countries outside of the European
Monetary Union including Norway, Sweden, Poland, Hungary, Romania, Slovak Republic and Czech Republic, and operations which report in U.S. dollars. Assets and liabilities of foreign subsidiaries are
translated at the exchange rates in effect at period-end, and the statements of operations are translated at the average exchange rates during the period. Exchange rate fluctuations on
translating foreign currency financial statements into Euros result in unrealized gains or losses referred to as translation adjustments. Cumulative translation adjustments are recorded as a separate
component of shareholders' equity. Transactions denominated in currencies other than the local currencies are recorded based on exchange rates at the time such transactions arise. Subsequent changes
in exchange rates result in transaction gains and losses, which are reflected in income as unrealized, based on period-end translations, or realized upon settlement of the transactions.

Cash
flows from our operations in foreign countries are translated based on their reporting currencies. As a result, amounts related to assets and liabilities reported on the
consolidated statements of cash flows will not agree to changes in the corresponding balances on the consolidated balance sheets. The effects of exchange rate changes on cash balances held in foreign
currencies are reported as a separate line below cash flows from financing activities.

Impact of Foreign Currency Rate Changes

We are exposed to foreign exchange rate fluctuations related to our monetary assets and liabilities, including those of our operating subsidiaries, which are
denominated in currencies outside of the European Monetary Union, notably the EUR/USD risk arising from our U.S. dollar denominated liabilities. Our exposure to foreign exchange rate fluctuations also
arises from intercompany charges.

We
are risk adverse towards foreign currency risk and therefore actively manage our foreign currency risk by entering into hedge instruments were appropriate and available to us in the
financial markets. We use cross currency swaps, currency deposits and forward contracts to hedge the exposure. We actively monitor the various financial instruments available to us and expect to shift
the use of instruments to less credit capacity intensive instruments in the near future, driven by the current credit risk appetite in the financial markets. We have consistently managed our foreign
currency risk through the use of these instruments.

For
descriptions of our senior notes, senior discount notes and the Exchangeable Loan, the UPC Distribution Bank Facility we refer to our audited consolidated financial statements for
the year December 31, 2001 included in our Form 10-K, Note 9 of our audited consolidated financial statements. The interest rates of the notes are included in the
interest rate sensitivity tables to which we refer.

The
tables below provide information about UPC and our consolidated subsidiaries' foreign currency exchange risk for cash and debt which is denominated in foreign currencies outside of
the European Monetary Union as of March 31, 2002, including cash flows based on the expected repayment date and related weighted-average interest rates for debt. The information is presented in

42

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Euro equivalents, which is our reporting currency. The instruments' actual cash flows are denominated in U.S. dollars.

|                                                    |  | Amount Outstanding as of March 31, 2002 |  | Expected Repayment(1) as of March 31,
|--------------------------------------------------- |  | --------------------------------------- |  | -------------------------------------
|
|
|Dollar Denominated Facilities                       |  |                                         |  |                                      
|UPC Senior Discount Notes due 2009                  |  | 634,441                                 |  | 96,888                               
|UPC Senior Discount Notes due 2009                  |  | 392,070                                 |  | 52,052                               
|UPC Senior Discount Notes due 2010                  |  | 786,905                                 |  | 108,895                              
|UPC Senior Notes due 2010                           |  | 683,737                                 |  | 80,339                               
|PCI Notes                                           |  | 17,313                                  |  | 2,523                                
|@Entertainment 1998 Senior Discount Notes           |  | 195,190                                 |  | 48,589                               
|@Entertainment 1999 Senior Discount Notes           |  | 173,579                                 |  | 38,543                               
|@Entertainment 1999 Series C Senior Discount Notes. |  | 19,369                                  |  | 6,190                                
|Exchangeable Loan                                   |  | 1,032,307                               |  | 1,032,307                            

---

In
connection with our offering of senior notes in July 1999, October 1999 and January 2000, as well as the UPC Distribution Bank Facility, we entered into
cross-currency and interest rate swap agreements, exchanging U.S. dollar-denominated obligations for Euro denominated obligations.

On
February 1, 2002, we amended certain swap agreements with one of our banks. The swap agreements were entered into in connection with the issuance of certain of our notes. The
swap agreements were subject to early termination upon the occurrence of certain events. The amendment provides that the bank's obligations to us under the swap agreements have been substantially
fixed and the agreements will be unwound on or prior to July 30, 2002. In settlement of the bank's obligations to us, the bank will deliver to us approximately 400 million, subject to
adjustment in the case of certain circumstances, in aggregate principle amount of our senior notes described above held by that bank.

Interest Rate Sensitivity

We actively manage our exposure to interest rates and use various financial instruments like interest rate swaps, interest rate caps and fixed and floating rate
credit instruments, when available to us and appropriate. While part of our fixed rate bonds have been swapped back to floating rate by way of swaps, we aim at fixing a minimum 50% of the interest
rates on our bank debt to average tenors with a minimum tenor of one year. We actively monitor the various financial instruments available to us and expect to shift the use of instruments to less
credit capacity intensive instruments in the near future, driven by the current credit risk appetite in the financial markets. We have consistently managed our interest rate exposure through the use
of these instruments.

For
descriptions of our senior notes, senior discount notes, the Exchangeable Loan, the UPC Distribution Bank Facility and other debt we refer to our audited consolidated financial
statements for the year December 31, 2001 included in our Form 10-K, Note 9.

43

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The
table below provides information about our financial instruments that are sensitive to changes in interest rates as of March 31, 2002, including cash flows based on the
expected repayment dates and the related weighted-average interest rates. The information is presented in Euro equivalents, which is our reporting currency.

|                                  |                                                                    | Amount Outstanding as of March 31, 2002 |  | Expected Repayment(1) as of March 31,
|--------------------------------- | ------------------------------------------------------------------ | --------------------------------------- |  | -------------------------------------
|
|
|Variable Rate Facilities          |                                                                    |                                         |  |                                      
|UPC 10.875% Senior Notes due 2009 |                                                                    | 917,008                                 |  | 112,333                              
|                                  | EURIBOR + 4.15% and 8.54%, average rate in 2002 of 8.19% and 8.54% |                                         |  |                                      
|UPC 10.875% Senior Notes due 2007 |                                                                    | 229,252                                 |  | 26,937                               
|                                  | EURIBOR + 4.80% and 9.92%, average rate in 2002 of 8.17% and 9.92% |                                         |  |                                      
|UPC 11.25% Senior Notes due 2009  |                                                                    | 287,228                                 |  | 33,749                               
|                                  | EURIBOR + 4.80% and 9.92%, average rate in 2001 of 8.17% and 9.92% |                                         |  |                                      
|UPC Distribution Bank Facility(1) |                                                                    | 3,173,326                               |  | 3,173,326                            
|                                  | EURIBOR/USD LIBOR + 0.75%-4.00%, average rate in 2002 of 7.15%     |                                         |  |                                      

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|                                                   |                       | Amount Outstanding as of March 31, 2002 |        | Expected Repayment(1) as of March 31,
|-------------------------------------------------- | --------------------- | --------------------------------------- | ------ | -------------------------------------
|
|
|Fixed Rate Facilities                              |                       |                                         |        |                                      
|UPC Senior Notes due 2009                          |                       | 300,000                                 |        | 35,250                               
|                                                   | Average interest rate |                                         | 10.875 | %                                    
|UPC Senior Discount Notes due 2009                 |                       | 634,441                                 |        | 96,888                               
|                                                   | Average interest rate |                                         | 12.500 | %                                    
|UPC Senior Discount Notes due 2009                 |                       | 392,070                                 |        | 52,052                               
|                                                   | Average interest rate |                                         | 13.375 | %                                    
|UPC Senior Discount Notes due 2009                 |                       | 137,241                                 |        | 16,713                               
|                                                   | Average interest rate |                                         | 13.375 | %                                    
|UPC Senior Notes due 2007                          |                       | 100,000                                 |        | 11,250                               
|                                                   | Average interest rate |                                         | 10.875 | %                                    
|UPC Senior Notes due 2009                          |                       | 100,435                                 |        | 11,801                               
|                                                   | Average interest rate |                                         | 11.250 | %                                    
|UPC Senior Discount Notes due 2010                 |                       | 786,905                                 |        | 108,895                              
|                                                   | Average interest rate |                                         | 13.750 | %                                    
|UPC Senior Notes due 2010                          |                       | 341,872                                 |        | 41,879                               
|                                                   | Average interest rate |                                         | 11.250 | %                                    
|UPC Senior Notes due 2010                          |                       | 683,737                                 |        | 80,339                               
|                                                   | Average interest rate |                                         | 11.250 | %                                    
|UPC Senior Notes due 2010                          |                       | 198,831                                 |        | 22,368                               
|                                                   | Average interest rate |                                         | 11.250 | %                                    
|PCI Notes                                          |                       | 17,313                                  |        | 2,523                                
|                                                   | Average interest rate |                                         | 9.875  | %                                    
|@Entertainment 1998 Senior Discount Notes          |                       | 195,190                                 |        | 48,589                               
|                                                   | Average interest rate |                                         | 14.500 | %                                    
|@Entertainment 1999 Senior Discount Notes          |                       | 173,579                                 |        | 38,543                               
|                                                   | Average interest rate |                                         | 14.500 | %                                    
|@Entertainment 1999 Series C Senior Discount Notes |                       | 19,369                                  |        | 6,190                                
|                                                   | Average interest rate |                                         | 7.000  | %                                    
|DIC Loan                                           |                       | 53,931                                  |        | -                                    
|                                                   | Average interest rate |                                         | 10.000 | %                                    
|Exchangeable Loan                                  |                       | 1,032,307                               |        | 1,032,307                            
|                                                   | Average Interest rate |                                         | 6.000  | %                                    

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Equity Prices

As of March 31, 2002, we are exposed to equity price fluctuations related to our investments in equity securities. Our investment in United is classified
as available for sale. Changes in the price of the stock are reflected as unrealized gains (losses) in our statement of shareholders' equity, until such

45

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time as the stock is sold and any unrealized gain (loss) will be reflected in the statement of operations. Our investments in PrimaCom and SBS are accounted for under the equity method of accounting.

|            |  | Number
of Shares |  | Fair Value
as of
March 31,
2002
|----------- |  | ---------------- |  | -------------------------------
|
|United      |  | 5,569,240        |  | 34,538                         
|PrimaCom AG |  | 4,948,039        |  | 8,758                          
|SBS         |  | 6,000,000        |  | 130,330                        

As
of March 31, 2002, we are also exposed to equity price fluctuations related to our debt, which is convertible into our ordinary shares. The table below provides information
about our convertible debt, including expected cash flows and related weighted-average interest rates.

|                  |                | Amount Outstanding
as of March 31, 2002 |  | Expected Repayment
as of March 31,
|----------------- | -------------- | --------------------------------------- |  | ----------------------------------
|
|
|Convertible Debt  |                |                                         |  |                                   
|DIC Loan          |                | 53,391                                  |  | -                                 
|                  | 10% per annum  |                                         |  |                                   
|Exchangeable Loan |                | 1,032,307                               |  | 1,032,307                         
|                  | 6.0% per annum |                                         |  |                                   

Cross-Currency and Interest Rate Swaps

Concurrent with the closing of our senior notes offering in July 1999, we entered into a cross-currency swap, swapping the
USD 800.0 million, 107/8% fixed rate coupon into fixed and variable rate Euro obligations at a rate of 1.06 U.S. dollars per Euro. Of the Euro obligations (50%) have
a fixed interest rate of 8.54% through August 1, 2004, thereafter switching to a variable interest rate of EURIBOR + 4.15%. The remaining 50% have a variable interest rate of
EURIBOR + 4.15% through August 1, 2009 (as of March 31, 2002, three months EURIBOR was 3.29%). The cross-currency swap provides the bank with the right to terminate the
swap at market value commencing August 1, 2004 with the payment of a call premium equal to the call premium on the notes, which we would pay to the holders of the notes if the notes are called
on or after August 1, 2004.

Concurrent
with the closing of our senior notes in October 1999, we entered into cross-currency swaps, swapping the USD 252.0 million, 111/4% coupon into
fixed and variable rate Euro obligations at a rate of 1.049 U.S. dollars per Euro, and swapping the USD 200.0 million 107/8% coupon into fixed and variable rate Euro notes at a
rate of 1.049 U.S. dollars per Euro. Of the swapped USD 252.0 million senior notes, 50% have a fixed interest rate of 9.92% through November 1, 2004, thereafter switching to a variable
rate of EURIBOR + 4.80%. The remaining 50% have a variable interest rate of EURIBOR + 4.80%. Of the swapped USD 200.0 million, 50% have a fixed interest rate of
9.92% through November 1, 2004, thereafter switching to a variable rate of EURIBOR + 4.80%. The remaining 50% have a variable interest rate of EURIBOR + 4.80% (as of
March 31, 2002 three months EURIBOR was 3.29%). The cross-currency swaps provide the bank with the right to terminate the swaps at fair value commencing November 1, 2004 with the payment
of a call premium equal to the call premium on the notes, which we would pay to the USD 252.0 million and USD 200.0 million senior note holders if the notes are called on or after
November 1, 2004.

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In
January 2000, we closed a bond offering consisting of four tranches: USD 300.0 million of senior notes due 2010 with a 111/2% coupon; USD
600.0 million and EUR 200.0 million of senior notes due 2010 with a 111/4% coupon; and USD 1,000.0 million aggregate principal amount of ten year
133/4% senior discount notes due 2010. We have entered into cross-currency swaps, swapping a total of USD 300 million of the 111/2% series coupon into a fixed Euro
coupon of 10% at a rate of 1.01 U.S. dollars per Euro until August 2008.

In
October 2000, we closed the EUR 4.0 billion UPC Distribution Bank Facility. The facility is structured in different tranches, with one tranche denominated in dollars for
the amount of USD 347.5 million. Concurrent with the closing, we entered into cross currency and interest rate swaps, pursuant to which a USD 347.5 million obligation under the UPC
Distribution Bank Facility was swapped at an average rate of 0.852 Euros per U.S. dollar until November 29, 2002. In addition we entered into an interest rate swap in respect of
1,725 million to fix the EURIBOR portion of the interest calculation at 4.5475% for the period ending April 15, 2003.

On
January 31, 2002, we amended certain of the above mentioned swap agreements with a bank. The swap agreements were subject to early termination upon the occurrence of certain
events. The amendment provides that the bank's obligations to us under the swap agreements have been substantially fixed at approximately 400 million, and the agreements will be unwound on or
prior to July 30, 2002. In settlement of the bank's obligations to us, the bank is entitled to offset, and will deliver to us, approximately 400 million, subject to adjustment in the
case of certain circumstances, in aggregate principal amount of our Senior Notes held by that bank. The fair value of the Senior Notes to be delivered is substantially less than 400 million.
Upon offset against, and delivery to UPC of, the Senior Notes and senior discount notes, our indebtedness will be reduced by approximately 400 million and we will recognise an extraordinary
gain.

The
following table details the fair value of the derivate instruments outstanding as of March 31, 2002 by related borrowing:

|Borrowing                      |  | Type of Instrument                |  | As of
March 31,
2002 |   | As of
December 31,
2001 |  
|------------------------------ |  | --------------------------------- |  | -------------------- | - | ----------------------- | -
|
|July 1999 Notes                |  | Cross currency/interest rate swap |  | 31,683               |   | 101,736                 |  
|October 1999 Notes             |  | Cross currency/interest rate swap |  | 21,715               |   | 55,522                  |  
|January 2000 Notes             |  | Cross currency/interest rate swap |  | 4,000                |   | 36,741                  |  
|UPC Distribution Bank Facility |  | Cross currency/interest rate swap |  | (28,386              | ) | (47,065                 | )
|                               |  |                                   |  |                      |   |                         |  
|Total derivative assets        |  |                                   |  | 29,012               |   | 146,934                 |  
|                               |  |                                   |  |                      |   |                         |  

Of
the above derivative instruments, only the 1.725 billion interest rate swap on the UPC Distribution Bank Facility qualifies as an accounting cash flow hedge. Accordingly, the
changes in fair value of this instrument are recorded through other comprehensive income in the consolidated statement of shareholders' equity (deficit).

The
remaining instruments are marked-to-market each period with the corresponding fair value gain or loss recorded as a part of foreign exchange gain (loss) and
other income (expense) in the accompanying consolidated statements of operations. For the quarters ended March 31, 2002 and 2001, the Company recorded a loss of 177.8 million and 45.9
million, respectively, in connection with the mark-to-market valuations.

Certain
derivative instruments outlined above include set-off provisions, which provide for early termination upon the occurrence of certain events including an event of
default. In an event of default, any amount payable to one party by the other party, will, at the option of the non-defaulting party set off against any matured obligation owed by the
non-defaulting party to such defaulting party. If we are

47

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the defaulting party and the counterparty to the swap holds bonds of us, these bonds may be used to settle the obligation of the counterparty to us. In such an event of settlement, we would recognize
a gain upon the delivery of the bonds next quarter. The amount of bonds, which must be delivered, is based on the principal (i.e.) face amount of the bonds held, and not the fair value, which is
substantially less.

The
consolidated balance sheets reflect these instruments as derivative assets or liabilities as appropriate.

48

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PART IIOTHER INFORMATION

Item 3.    Defaults Upon Senior Securities

Information regarding default on senior securities is contained in Part I, Item 2 "Recent Developments".

49

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Item 5.    Other Information

|                            |                        | As at March 31, 2002
|--------------------------- | ---------------------- | --------------------
|
|Multi Channel TV            |                        |                     
|Consolidated companies:     |                        |                     
|Norway                      |                        | 100.0%              
|Sweden                      |                        | 100.0%              
|Belgium                     |                        | 100.0%              
|France(4)                   |                        | 92.0%               
|The Netherlands             |                        | 100.0%              
|Austria                     |                        | 95.0%               
|Germany (EWT/TSS)(5)        |                        | 51.0%               
|                            |                        |                     
|                            | Total Western Europe   |                     
|                            |                        |                     
|Poland                      |                        | 100.0%              
|Hungary                     |                        | 98.9100.0%         
|Czech Republic              |                        | 99.9100.0%         
|Romania                     |                        | 51.0100.0%         
|Slovak Republic             |                        | 95.0100.0%         
|                            |                        |                     
|Total Eastern Europe        |                        |                     
|                            |                        |                     
|Total consolidated          |                        |                     
|                            |                        |                     
|Non-consolidated companies: |                        |                     
|Germany (PrimaCom)(6)       |                        | 25.0%               
|Israel                      |                        | 46.6%               
|Malta                       |                        | 50.0%               
|Poland (TKP)(7)             |                        | 25.0%               
|                            |                        |                     
|                            | Total non-consolidated |                     
|                            |                        |                     
|                            | Total                  |                     
|                            |                        |                     

---

50

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|                        |                           | As at March 31, 2002
|----------------------- | ------------------------- | --------------------
|
|Cable Telephone         |                           |                     
|Consolidated companies: |                           |                     
|Norway                  |                           | 100.0%              
|France                  |                           | 92.0%               
|The Netherlands         |                           | 100.0%              
|Austria                 |                           | 95.0%               
|Germany(EWT/TSS)       |                           | 51.0%               
|                        |                           |                     
|                        | Total consolidated        |                     
|                        |                           |                     
|Non-cable Telephone     |                           |                     
|Consolidated companies: |                           |                     
|Czech Republic(1)       |                           | 99.9100.0%         
|Hungary(1)              |                           | 98.9100.0%         
|                        |                           |                     
|                        | Total non-cable Telephone |                     
|                        |                           |                     
|                        | Total                     |                     
|                        |                           |                     

---

51

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|                            |                        | As at March 31, 2002
|--------------------------- | ---------------------- | --------------------
|
|Internet                    |                        |                     
|Consolidated companies:     |                        |                     
|Norway                      |                        | 100.0%              
|Sweden                      |                        | 100.0%              
|Belgium                     |                        | 100.0%              
|France                      |                        | 92.0%               
|The Netherlands             |                        | 100.0%              
|Austria                     |                        | 95.0%               
|Germany (EWT/TSS)           |                        | 51.0%               
|                            |                        |                     
|                            | Total Western Europe   |                     
|                            |                        |                     
|Poland                      |                        | 100.0%              
|Hungary                     |                        | 98.9100.0%         
|Czech Republic              |                        | 99.9100.0%         
|                            |                        |                     
|                            | Total Eastern Europe   |                     
|                            |                        |                     
|                            | Total consolidated     |                     
|                            |                        |                     
|Non-consolidated companies: |                        |                     
|Germany (PrimaCom)          |                        | 25.0%               
|Israel                      |                        | 46.6%               
|Malta                       |                        | 50.0%               
|                            |                        |                     
|                            | Total non-consolidated |                     
|                            |                        |                     
|                            | Total                  |                     
|                            |                        |                     

---

52

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|                            |                           | As at March 31, 2001
|--------------------------- | ------------------------- | --------------------
|
|Multi Channel TV            |                           |                     
|Consolidated companies:     |                           |                     
|Norway                      |                           | 100.0%              
|Sweden                      |                           | 100.0%              
|Belgium                     |                           | 100.0%              
|France                      |                           | 92.0%               
|The Netherlands             |                           | 100.0%              
|Austria                     |                           | 95.0%               
|Germany (EWT/TSS)           |                           | 51.0%               
|                            |                           |                     
|                            | Total Western Europe      |                     
|                            |                           |                     
|Poland                      |                           | 100.0%              
|Hungary                     |                           | 98.9100.0%         
|Czech Republic              |                           | 99.9100.0%         
|Romania                     |                           | 51.0100.0%         
|Slovak Republic             |                           | 95.0100.0%         
|                            |                           |                     
|                            | Total Eastern Europe      |                     
|                            |                           |                     
|                            | Total consolidated        |                     
|                            |                           |                     
|Non-consolidated companies: |                           |                     
|Germany (Primacom)          |                           | 25.0%               
|Israel                      |                           | 46.6%               
|Malta                       |                           | 50.0%               
|                            |                           |                     
|                            | Total non-consolidated    |                     
|                            |                           |                     
|Disposed Operations         |                           |                     
|Poland(4)                   |                           | 100.0%              
|                            |                           |                     
|                            | Total Disposed Operations |                     
|                            |                           |                     
|                            | Total                     |                     
|                            |                           |                     

---

53

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|                        |                           | As at March 31, 2001
|----------------------- | ------------------------- | --------------------
|
|Cable Telephone         |                           |                     
|Consolidated companies: |                           |                     
|Norway                  |                           | 100.0%              
|France                  |                           | 92.0%               
|The Netherlands         |                           | 100.0%              
|Austria                 |                           | 95.0%               
|Germany (EWT/TSS)       |                           | 51.0%               
|                        |                           |                     
|                        | Total consolidated        |                     
|                        |                           |                     
|Non-cable Telephone     |                           |                     
|Consolidated companies: |                           |                     
|Czech Republic(1)       |                           | 99.9100.0%         
|Hungary(1)              |                           | 98.9100%           
|                        |                           |                     
|                        | Total non-cable Telephone |                     
|                        |                           |                     
|Disposed operations     |                           |                     
|The Netherlands(2)      |                           | 80%                 
|                        |                           |                     
|                        | Total Disposed Operations |                     
|                        |                           |                     
|                        | Total                     |                     
|                        |                           |                     

---

54

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|                            |                        | As at March 31, 2001
|--------------------------- | ---------------------- | --------------------
|
|Internet                    |                        |                     
|Consolidated companies:     |                        |                     
|Norway                      |                        | 100.0%              
|Sweden                      |                        | 100.0%              
|Belgium                     |                        | 100.0%              
|France                      |                        | 92.0%               
|The Netherlands             |                        | 100.0%              
|Austria                     |                        | 95.0%               
|Germany (EWT/TSS)           |                        | 51.0%               
|                            |                        |                     
|                            | Total Western Europe   |                     
|                            |                        |                     
|Poland                      |                        | 100.0%              
|Hungary                     |                        | 98.9100.0%         
|Czech Republic              |                        | 100.0%              
|Slovak Republic             |                        | 95.0100%           
|                            |                        |                     
|                            | Total Eastern Europe   |                     
|                            |                        |                     
|                            | Total consolidated     |                     
|                            |                        |                     
|Non-consolidated companies: |                        |                     
|Germany (PrimaCom)          |                        | 25.0%               
|Israel                      |                        | 46.6%               
|Malta                       |                        | 50.0%               
|                            |                        |                     
|                            | Total non-consolidated |                     
|                            |                        |                     
|                            | Total                  |                     
|                            |                        |                     

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55

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Residential Revenue Generating Units

The operating data set forth below reflect the aggregate statistics of the operating systems in which the Company has an ownership interest. Revenue Generating
Units ("RGUs") are the sum of basic cable, digital, residential internet, residential telephone and DTH subscribers. For example, if a residential customer in our Austrian system subscribed to our
basic cable service, digital video service, telephone service and internet services, the customer would constitute four RGUs.

|                        |                           | As at
March 31,
2002 |           | As at
March 31,
2001
|----------------------- | ------------------------- | -------------------- | --------- | --------------------
|Total RGUs              |                           |                      |           |                     
|Consolidated companies: |                           |                      |           |                     
|Norway                  |                           | 412,800              |           | 366,900             
|Sweden                  |                           | 326,500              |           | 292,900             
|Belgium                 |                           | 148,100              |           | 140,900             
|France                  |                           | 526,700              |           | 478,000             
|The Netherlands         |                           | 2,824,400            |           | 2,680,200           
|Austria                 |                           | 803,600              |           | 715,200             
|Germany (EWT/TSS)       |                           | 579,100              |           | 575,700             
|                        |                           |                      |           |                     
|                        | Total Western Europe      |                      | 5,621,200 |                     
|                        |                           |                      |           |                     
|Poland                  |                           | 1,015,600            |           | 1,047,000           
|Hungary                 |                           | 807,100              |           | 746,600             
|Czech Republic          |                           | 359,100              |           | 415,600             
|Romania                 |                           | 319,700              |           | 287,600             
|Slovak Republic         |                           | 313,000              |           | 330,100             
|                        |                           |                      |           |                     
|                        | Total Eastern Europe      |                      | 2,814,500 |                     
|                        |                           |                      |           |                     
|Disposed operations:    |                           |                      |           |                     
|The Netherlands(1)      |                           | -                    |           | 44,300              
|Poland (TKP)(2)         |                           | -                    |           | 388,800             
|                        |                           |                      |           |                     
|                        | Total disposed operations |                      | -         |                     
|                        |                           |                      |           |                     
|                        | Total consolidated        |                      | 8,435,700 |                     
|                        |                           |                      |           |                     

---

56

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Item 6.    Exhibits and Reports on Form 8-K

|Date Filed        |  | Date of Event    |  | Item Reported                                                                                                                                                                                                
|----------------- |  | ---------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|February 1, 2002  |  | February 1, 2002 |  | Item 5Announcement of signing a Memorandum of Understanding with United and UGC Holdings for restructuring our debt.                                                                                        
|March 4, 2002     |  | March 4, 2002    |  | Item 5Announcement of our receipt of waivers from the lenders of under the UPC Distribution Bank Facility, the EWT Facility and the Exchangeable Loan for the cross events of default under such facilities.
|February 20, 2002 |  | December 7, 2001 |  | Amendment to Report on Form 8-K filed on December 21, 2001 reporting unaudited pro forma financial information regarding the disposition of our Polish and United Kingdom DTH assets.                        

57

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

| |  | UNITED PAN-EUROPE COMMUNICATIONS N.V.
| |  | -------------------------------------
| |  | By:                                  
| |  | Date: May 15, 2002                   

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