---

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UNITED PAN-EUROPE COMMUNICATIONS N.V.
(DEBTOR-IN-POSSESSION)

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

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FORM 10-Q/A(Amendment No. 1)

|(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, 2003                         
|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 number: 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(I.R.S. 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, 2003 was:

443,417,525
ordinary shares A, including
shares represented by American Depository Receipts

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Explanatory Note

We are filing this Form 10-Q/A (Amendment No. 1) for the quarter ended March 31, 2003 to amend Item No. 1 to revise our previous disclosure to reflect a
gain from the dilution of our interest in UPC Germany in July 2002 in the consolidated financial statements for the fiscal year ended December 31, 2002. Our Form 10-K for the fiscal year ended
December 31, 2002 has been amended to reflect this change. See Note 15 to our unaudited condensed consolidated financial statements for a detailed explanation. We are also amending Item No. 4
to clarify our disclosure regarding disclosure controls and procedures and changes in internal controls.

PART IFINANCIAL INFORMATION

|        |                                                                                                               |  | Page
Number
|------- | ------------------------------------------------------------------------------------------------------------- |  | -----------
|Item 1. | Financial Statements                                                                                          |  |            
|        | Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002                              |  | 2          
|        | Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and 2002            |  | 4          
|        | Condensed Consolidated Statements of Shareholders' Equity (Deficit) for the Three Months Ended March 31, 2003 |  | 5          
|        | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002            |  | 6          
|        | Notes to Condensed Consolidated Financial Statements                                                          |  | 7          
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations                         |  | 35         
|Item 3. | Quantitative and Qualitative Disclosure About Market Risk                                                     |  | 48         
|Item 4. | Controls and Procedures                                                                                       |  | 53         

PART IIOTHER INFORMATION

|        |                                                     |  | Page
Number
|------- | --------------------------------------------------- |  | -----------
|Item 1. | Legal Proceedings                                   |  | 54         
|Item 2. | Changes in Securities and Use of Proceeds           |  | 54         
|Item 3. | Defaults Upon Senior Securities                     |  | 54         
|Item 4. | Submission of Matters to a Vote of Security Holders |  | 54         
|Item 5. | Other Information                                   |  | 54         
|Item 6. | Exhibits and Reports on Form 8-K                    |  | 57         

1

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PART IFINANCIAL INFORMATION

Item 1.

UNITED PAN-EUROPE COMMUNICATIONS N.V.        (DEBTOR-IN-POSSESSION)        CONDENSED CONSOLIDATED BALANCE SHEETS        (Stated in thousands of Euros, except par value and number of
shares)  (Unaudited)

|                                                      |                                                                                                   | As of
March 31,
2003 |         | As of
December 31,
2002
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------- | -------------------- | ------- | -----------------------
|ASSETS:                                               |                                                                                                   |                      |         |                        
|Current assets                                        |                                                                                                   |                      |         |                        
|                                                      | Cash and cash equivalents                                                                         |                      | 248,839 |                        
|                                                      | Restricted cash                                                                                   |                      | 36,412  |                        
|                                                      | Subscriber receivables, net of allowance for doubtful accounts of 43,572 and 52,232, respectively |                      | 95,679  |                        
|                                                      | Costs to be reimbursed by affiliated companies                                                    |                      | 5,850   |                        
|                                                      | Other receivables                                                                                 |                      | 38,055  |                        
|                                                      | Deferred financing costs, net                                                                     |                      | 56,284  |                        
|                                                      | Prepaid expenses and other current assets                                                         |                      | 83,532  |                        
|                                                      |                                                                                                   |                      |         |                        
|                                                      |                                                                                                   | Total current assets |         | 564,651                
|Marketable equity securities of parent, at fair value |                                                                                                   | 15,618               |         | 12,760                 
|Investments in and advances to affiliated companies   |                                                                                                   | 105,854              |         | 114,575                
|Property, plant and equipment, net                    |                                                                                                   | 3,016,594            |         | 3,175,363              
|Goodwill, net                                         |                                                                                                   | 990,822              |         | 995,946                
|Other intangible assets, net                          |                                                                                                   | 73,595               |         | 76,331                 
|Derivative assets                                     |                                                                                                   | 976                  |         |                       
|Other assets                                          |                                                                                                   | 6,159                |         | 3,740                  
|                                                      |                                                                                                   |                      |         |                        
|                                                      |                                                                                                   | Total assets         |         | 4,774,269              
|                                                      |                                                                                                   |                      |         |                        

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

2

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|                                                   |                                                                                                            | As of
March 31,
2003                                  |            | As of
December 31,
2002 |           
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ---------- | ----------------------- | ----------
|
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT):    |                                                                                                            |                                                       |            |                         |           
|Current liabilities                                |                                                                                                            |                                                       |            |                         |           
|Not subject to compromise:                         |                                                                                                            |                                                       |            |                         |           
|                                                   | Accounts payable, including related party payables of 5,908 and 5,189 respectively                         |                                                       | 161,672    |                         | 166,679   
|                                                   | Accrued liabilities                                                                                        |                                                       | 256,091    |                         | 281,211   
|                                                   | Subscriber prepayments and deposits                                                                        |                                                       | 170,105    |                         | 121,749   
|                                                   | Derivative liabilities                                                                                     |                                                       |           |                         | 10,133    
|                                                   | Short-term debt                                                                                            |                                                       | 59,535     |                         | 58,363    
|                                                   | Current portion of long-term debt                                                                          |                                                       | 3,147,014  |                         | 3,212,302 
|                                                   |                                                                                                            |                                                       |            |                         |           
|                                                   |                                                                                                            | Total current liabilities not subject to compromise   |            | 3,794,417               |           
|                                                   |                                                                                                            |                                                       |            |                         |           
|Subject to compromise:                             |                                                                                                            |                                                       |            |                         |           
|                                                   | Accounts payable                                                                                           |                                                       | 36,889     |                         | 36,889    
|                                                   | Accrued liabilities                                                                                        |                                                       | 342,309    |                         | 351,500   
|                                                   | Current portion of long-term debt, including related party debt of 2,280,824 and 2,358,380 respectively    |                                                       | 4,881,701  |                         | 5,043,346 
|                                                   |                                                                                                            |                                                       |            |                         |           
|                                                   |                                                                                                            | Total current liabilities subject to compromise       |            | 5,260,899               |           
|                                                   |                                                                                                            |                                                       |            |                         |           
|Long-term liabilities not subject to compromise:   |                                                                                                            | .                                                     |            |                         |           
|                                                   | Long term debt                                                                                             |                                                       | 420,589    |                         | 427,444   
|                                                   | Other long-term liabilities                                                                                |                                                       | 81,826     |                         | 83,999    
|                                                   |                                                                                                            |                                                       |            |                         |           
|                                                   |                                                                                                            | Total long-term liabilities not subject to compromise |            | 502,415                 |           
|                                                   |                                                                                                            |                                                       |            |                         |           
|Commitments and contingencies (Note 8)             |                                                                                                            |                                                       |            |                         |           
|Minority interests in subsidiaries                 |                                                                                                            | 1,541                                                 |            | 1,660                   |           
|                                                   |                                                                                                            |                                                       |            |                         |           
|Convertible preferred stock subject to compromise: |                                                                                                            |                                                       |            |                         |           
|                                                   | Convertible preferred stock                                                                                |                                                       | 1,664,689  |                         | 1,664,689 
|                                                   |                                                                                                            |                                                       |            |                         |           
|Shareholders' equity (deficit)                     |                                                                                                            |                                                       |            |                         |           
|                                                   | Priority stock, 0.02 par value, 300 shares authorized, issued and outstanding                              |                                                       |           |                         |          
|                                                   | Ordinary stock, 0.02 par value, 1,000,000,000 shares authorized, 443,417,525 shares issued and outstanding |                                                       | 8,868      |                         | 443,418   
|                                                   | Additional paid-in capital                                                                                 |                                                       | 3,175,136  |                         | 2,740,586 
|                                                   | Deferred compensation                                                                                      |                                                       | (12,995    | )                       | (16,888   
|                                                   | Accumulated deficit                                                                                        |                                                       | (9,856,986 | )                       | (9,903,309
|                                                   | Accumulated other comprehensive income                                                                     |                                                       | 236,285    |                         | 207,246   
|                                                   |                                                                                                            |                                                       |            |                         |           
|                                                   |                                                                                                            | Total shareholders' equity (deficit)                  |            | (6,449,692              | )         
|                                                   |                                                                                                            |                                                       |            |                         |           
|                                                   |                                                                                                            | Total liabilities and shareholders' equity (deficit)  |            | 4,774,269               |           
|                                                   |                                                                                                            |                                                       |            |                         |           

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

3

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        (DEBTOR-IN-POSSESSION)        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        (Stated in thousands of Euros, except par value and
number of shares)  (Unaudited)

|                                                                        |                                                                                                          | For the Three Months
Ended March 31,                                     |            
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | -----------
|
|Service and other revenue                                               |                                                                                                          | 359,100                                                                  |            
|Operating expense (exclusive of items shown separately below)           |                                                                                                          | (158,423                                                                 | )          
|Selling, general and administrative expense                             |                                                                                                          | (98,082                                                                  | )          
|Depreciation and amortization                                           |                                                                                                          | (166,616                                                                 | )          
|Impairment and restructuring charges                                    |                                                                                                          |                                                                         |            
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Operating income (loss)                                                  |            
|Interest income                                                         |                                                                                                          | 3,569                                                                    |            
|Interest expense                                                        |                                                                                                          | (82,377                                                                  | )          
|Interest expense-related party                                          |                                                                                                          |                                                                         |            
|Foreign currency exchange gain (loss)                                   |                                                                                                          | 133,355                                                                  |            
|Other income (expense), net                                             |                                                                                                          | 66,486                                                                   |            
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Net income (loss) before income taxes and other items                    |            
|Reorganization expenses, net                                            |                                                                                                          | (7,641                                                                   | )          
|Income tax benefit (expense)                                            |                                                                                                          | (488                                                                     | )          
|Minority interests in subsidiaries                                      |                                                                                                          | (65                                                                      | )          
|Share in results of affiliates, net                                     |                                                                                                          | (2,495                                                                   | )          
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Income (loss) before cumulative effect of change in accounting principle |            
|Cumulative effect of change in accounting principle                     |                                                                                                          |                                                                         |            
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Net income (loss)                                                        |            
|                                                                        |                                                                                                          |                                                                          |            
|Basic and diluted net income (loss) attributable to common shareholders |                                                                                                          | 46,323                                                                   |            
|                                                                        |                                                                                                          |                                                                          |            
|Net income (loss) per common share:                                     |                                                                                                          |                                                                          |            
|                                                                        | Basic net income (loss) per ordinary share before cumulative effect of change in accounting principle    |                                                                          | 0.10       
|                                                                        | Cumulative effect of change in accounting principle                                                      |                                                                          |           
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Basic net income (loss)                                                  |            
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        | Diluted net income (loss) per ordinary share before cumulative effect of change in accounting principle. |                                                                          | 0.07       
|                                                                        | Cumulative effect of change in accounting principle                                                      |                                                                          |           
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Diluted net income (loss)                                                |            
|                                                                        |                                                                                                          |                                                                          |            
|Weighted-average number of ordinary shares outstanding:                 |                                                                                                          |                                                                          |            
|                                                                        | Basic                                                                                                    |                                                                          | 443,417,525
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        | Diluted                                                                                                  |                                                                          | 645,504,396
|                                                                        |                                                                                                          |                                                                          |            
|Other comprehensive income (loss), net of tax:                          |                                                                                                          |                                                                          |            
|                                                                        | Net income (loss)                                                                                        |                                                                          | 46,323     
|                                                                        | Foreign currency translation adjustments                                                                 |                                                                          | 19,777     
|                                                                        | Change in fair value of derivative assets                                                                |                                                                          | 6,402      
|                                                                        | Change in unrealized gain in available-for-sale securities                                               |                                                                          | 2,860      
|                                                                        |                                                                                                          |                                                                          |            
|                                                                        |                                                                                                          | Comprehensive income (loss)                                              |            
|                                                                        |                                                                                                          |                                                                          |            

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

4

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        (DEBTOR-IN-POSSESSION)        CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)        (Stated in thousands of Euros, except
number of shares)  (Unaudited)

|                                                    |  | Priority Stock |  | Ordinary Stock |  |             |  |          |   |           |  | Accumulated
Other
Comprehensive
Income |   |            |  
|--------------------------------------------------- |  | -------------- |  | -------------- |  | ----------- |  | -------- | - | --------- |  | -------------------------------------- | - | ---------- | -
|
|
|
|Balances, December 31, 2002                         |  | 300            |  |               |  | 443,417,525 |  | 443,418  |   | 2,740,586 |  | (16,888                                | ) | (9,903,309 | )
|Decrease in nominal value                           |  |               |  |               |  |            |  | (434,550 | ) | 434,550   |  |                                       |   |           |  
|Amortization of deferred compensation               |  |               |  |               |  |            |  |         |   |          |  | 3,893                                  |   |           |  
|Net income                                          |  |               |  |               |  |            |  |         |   |          |  |                                       |   | 46,323     |  
|Unrealized gain in available-for-sale securities    |  |               |  |               |  |            |  |         |   |          |  |                                       |   |           |  
|Change in fair value of derivative assets           |  |               |  |               |  |            |  |         |   |          |  |                                       |   |           |  
|Change in foreign currency translation adjustments. |  |               |  |               |  |            |  |         |   |          |  |                                       |   |           |  
|                                                    |  |                |  |                |  |             |  |          |   |           |  |                                        |   |            |  
|Balances, March 31, 2003                            |  | 300            |  |               |  | 443,417,525 |  | 8,868    |   | 3,175,136 |  | (12,995                                | ) | (9,856,986 | )
|                                                    |  |                |  |                |  |             |  |          |   |           |  |                                        |   |            |  

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

5

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        (DEBTOR-IN-POSSESSION)        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 income (loss)                                                                       |                                                     | 46,323                                                     |         
|Adjustments to reconcile net income (loss) to net cash flows from operating activities: |                                                     |                                                            |         
|                                                                                        | Depreciation and amortization                       |                                                            | 166,616 
|                                                                                        | Non cash impairment and restructuring charges       |                                                            |        
|                                                                                        | Reorganization expenses                             |                                                            | 7,641   
|                                                                                        | Stock-based compensation expense                    |                                                            | 3,893   
|                                                                                        | Accretion of interest expense                       |                                                            | 12,693  
|                                                                                        | Amortization of deferred financing costs            |                                                            | 3,235   
|                                                                                        | Foreign exchange (gain) losses,net                  |                                                            | (128,421
|                                                                                        | Loss on derivative assets                           |                                                            | 4,383   
|                                                                                        | Cumulative effect of change in accounting principle |                                                            |        
|                                                                                        | Minority interests in subsidiaries                  |                                                            | 65      
|                                                                                        | Share in results of affiliated companies            |                                                            | 2,495   
|                                                                                        | Gain on extinguishment of liabilities               |                                                            |        
|                                                                                        | Gain on DIC loan                                    |                                                            | (69,364 
|                                                                                        | Other                                               |                                                            | (113    
|                                                                                        | Changes in assets and liabilities:                  |                                                            |         
|                                                                                        |                                                     | Decrease in restricted cash                                |         
|                                                                                        |                                                     | Increase in receivables                                    |         
|                                                                                        |                                                     | Increase (decrease) in other current liabilities           |         
|                                                                                        |                                                     | Increase in deferred taxes and other long-term liabilities |         
|                                                                                        |                                                     |                                                            |         
|Net cash flows from operating activities                                                |                                                     | 70,542                                                     |         
|                                                                                        |                                                     |                                                            |         
|Cash flows from investing activities:                                                   |                                                     |                                                            |         
|Restricted cash deposited, net                                                          |                                                     | (18,060                                                    | )       
|Purchase of derivatives                                                                 |                                                     | (9,090                                                     | )       
|Dividends received                                                                      |                                                     |                                                           |         
|Capital expenditures                                                                    |                                                     | (42,915                                                    | )       
|Proceeds received from the sale of assets                                               |                                                     | 663                                                        |         
|Acquisitions, net of cash acquired                                                      |                                                     |                                                           |         
|                                                                                        |                                                     |                                                            |         
|Net cash flows from investing activities                                                |                                                     | (69,402                                                    | )       
|                                                                                        |                                                     |                                                            |         
|Cash flows from financing activities:                                                   |                                                     |                                                            |         
|Proceeds from long-term and short-term borrowings                                       |                                                     | 1,381                                                      |         
|Repayments of long-term and short-term borrowings                                       |                                                     | (3,810                                                     | )       
|                                                                                        |                                                     |                                                            |         
|Net cash flows from financing activities                                                |                                                     | (2,429                                                     | )       
|                                                                                        |                                                     |                                                            |         
|Effect of exchange rates on cash                                                        |                                                     | (4,934                                                     | )       
|                                                                                        |                                                     |                                                            |         
|Net decrease in cash and cash equivalents                                               |                                                     | (6,223                                                     | )       
|Cash and cash equivalents at beginning of period                                        |                                                     | 255,062                                                    |         
|                                                                                        |                                                     |                                                            |         
|Cash and cash equivalents at end of period                                              |                                                     | 248,839                                                    |         
|                                                                                        |                                                     |                                                            |         
|Supplemental cash flow disclosures:                                                     |                                                     |                                                            |         
|                                                                                        | Cash paid for reorganization expenses               |                                                            | (2,868  
|                                                                                        |                                                     |                                                            |         
|                                                                                        | Cash paid for interest                              |                                                            | (63,703 
|                                                                                        |                                                     |                                                            |         
|                                                                                        | Cash received for interest                          |                                                            | 2,200   
|                                                                                        |                                                     |                                                            |         

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

6

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UNITED PAN-EUROPE COMMUNICATIONS N.V.        (DEBTOR-IN-POSSESSION)        NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        (Unaudited)

1.     Organization and Nature of Operations

United Pan-Europe Communications N.V. ("UPC" or the "Company"), a 53.1% owned subsidiary of UnitedGlobalCom Inc, ("United"), was formed for the
purpose of acquiring and developing multi-channel television and telecommunications systems in Europe. UPC operates broadband communications networks in 11 European countries through its three primary
divisions, UPC Distribution, UPC Media andPriority Telecom. UPC Distribution comprises the local operating systems and provides video, telephone and
internet services for residential customers, (Triple Play). UPC Media provides broadband internet and interactive digital products and services, transactional television services such as pay per view
movies, digital broadcast and post-production services, and thematic channels for distribution on UPC's network, third party networks and DTH platforms.Priority
Telecomfocuses on providing network solutions to the business customer. In 2003, as part of the ongoing realignment of the business, UPC has formed an Investments Division,
which will manage UPC's non-consolidated investment assets. UPC continues to focus on rationalizing its investment portfolio to maximize value.

All
monetary amounts included in the items of Part I and II of this quarterly report on Form 10 Q are stated in Euros, unless indicated otherwise.

The
following chart presents a summary of the Company's significant investments as of March 31, 2003.

|                  |                                      | UPC's Equity
Ownership(1) |       
|----------------- | ------------------------------------ | ------------------------- | ------
|UPC 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% 
|Hungary:          |                                      |                           |       
|                  | UPC Magyarorszag                     |                           | 100.0%
|                  | Monor Telefon Tarsasag Rt. ("Monor") |                           | 98.9% 
|The Netherlands:  |                                      |                           |       
|                  | UPC Nederland                        |                           | 100.0%
|Norway:           |                                      |                           |       
|                  | UPC Norge AS ("UPC Norge")           |                           | 100.0%
|Sweden:           |                                      |                           |       
|                  | UPC Sweden                           |                           | 100.0%
|                  |                                      |                           |       

7

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|Slovak Republic:  |                                                   |  |       
|----------------- | ------------------------------------------------- |  | ------
|                  | Trnavatel                                         |  | 95.0% 
|                  | Kabeltel                                          |  | 100.0%
|                  | UPC Slovensko s.r.o                               |  | 100.0%
|Romania:          |                                                   |  |       
|                  | Eurosat                                           |  | 100.0%
|                  | AST Romania                                       |  | 100.0%
|Poland:           |                                                   |  |       
|                  | UPC Polska, Inc ("UPC Polska")                    |  | 100.0%
|                  | Wizja TV B.V                                      |  | 100.0%
|UPC Media:        |                                                   |  |       
|Pan-European      |                                                   |  |       
|                  | chello broadband N.V. ("chello broadband")        |  | 85.3% 
|The Netherlands:  |                                                   |  |       
|                  | UPC Programming B.V. ("UPCtv")                    |  | 100.0%
|                  | Extreme Sports Channel VOF                        |  | 70.0% 
|Priority Telecom: |                                                   |  |       
|                  | Priority Telecom N.V. ("Priority Telecom")        |  | 71.5% 
|UPC Investments:  |                                                   |  |       
|Poland:           |                                                   |  |       
|                  | Telewizyjna Korporacja Partycpacyjna S.A. ("TKP") |  | 25.0% 
|                  | Fox Kids Poland Inc                               |  | 20.0% 
|Malta:            |                                                   |  |       
|                  | Melita Cable TV P.L.C. ("Melita")                 |  | 50.0% 
|Germany:          |                                                   |  |       
|                  | EWT/TSS Group                                     |  | 28.7% 
|                  | PrimaCom AG ("PrimaCom")                          |  | 25.0% 
|Spain:            |                                                   |  |       
|                  | Iberian Programming Services ("IPS")              |  | 50.0% 
|United Kingdom:   |                                                   |  |       
|                  | Xtra Music Ltd                                    |  | 50.0% 
|                  | Reality TV Ltd                                    |  | 49.0% 
|                  |                                                   |  |       

8

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|Other: |                             |  |      
|------ | --------------------------- |  | -----
|       | SBS Broadcasting SA ("SBS") |  | 21.2%
|       | MTV Polska VOF              |  | 50.0%

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2.     Reorganization Under Bankruptcy Code

Historically, 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, telephone 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 2004, 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.

Defaults and Waivers

In 2002, 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 its 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
113.0 million (USD 100.6 million) on its 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. In addition, on May 1, 2002, August 1, 2002,
November 1, 2002,

9

---

February 1,
2003 and May 1, 2003, the Company failed to make required interest payments in the aggregate amount of 38.9 million, 123.5 million, 36.5 million,
117.8 million and 34.2 million, respectively, on its outstanding 107/8% Senior Notes due 2007 and 111/4% Senior Notes due 2009, 107/8% Senior
Notes due 2009, and 111/4% Senior Notes due 2010 and 111/2% Senior Notes due 2010. Neither the trustees for the defaulted notes nor the requisite number of holders of
those notes accelerated the payment of principal and interest under those notes.

UPC's
failure to make these interest payments on its senior notes, and the resulting Events of Default under the indentures relating to the senior notes and senior discount notes, gave
rise to potential 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 certain operating companies within this group. 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 ownschello broadband N.V.The Company's interest in EWT is held indirectly through UPC Germany GmbH ("UPC Germany"), in which the
Company held a 51% interest until July 30, 2002 upon which date the EWT Facility was refinanced by the majority shareholder. The occurrence of matured cross events of default under the UPC
Distribution Bank Facility and the Exchangeable Loan would have given the creditors under those facilities the right to accelerate the maturity of the loans and to foreclose upon the collateral
securing the loans.

On
March 4, 2002, UPC received the first waivers from the lenders under the UPC Distribution Bank Facility, the EWT Facility and the Exchangeable Loan for the potential cross
events of defaults under such facilities that existed or may have existed as a result of its failure to make the interest payment due on February 1, 2002 on its 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 and any resulting cross
defaults. During the period from June 4, 2002 to September 27, 2002, the Company received bi-weekly waivers from the bank lenders and United. On September 27, 2002,
the bank lenders and United extended the coverage of the waivers to all its outstanding senior notes and senior discount notes and any resulting cross defaults,

10

---

and
the duration of the waivers until March 31, 2003. By entering into the Restructuring Agreement described below, the Company received an extension of the waiver for the Exchangeable Loan
until at least September 3, 2003. Pursuant to a letter dated April 4, 2003, the bank lenders extended the duration of the waiver until September 30, 2003.

The
bank waiver 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 UPC of the terms of that waiver. The waiver under the
UPC Distribution Bank Facility originally subjected UPC to a 100 million drawdown limitation under that facility, subject to certain conditions, during the period in which the waiver is in
place. As of May 2, 2003, the Company has met the conditions, as a result, no further limitations on the drawdown under the UPC Distribution Bank Facility exists. In addition, the waiver to the
UPC Distribution Bank Facility includes amendments to the UPC Distribution Bank Facility which



Agreement for Restructuring

On February 1, 2002, the Company signed a Memorandum of Understanding with United and its subsidiary, 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 its indebtedness at the holding company level.

11

---

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 steering committee and its advisors completed the due diligence about the Company and the Company's
current financial condition.

On
September 30, 2002, the Company announced that a binding agreement ("the Restructuring Agreement") had been reached with United and the members of the ad hoc noteholders
committee on a recapitalization plan for the Company. If implemented under its current terms, the agreed recapitalization will substantially delever its balance sheet eliminating approximately
4.0 billion accreted value of senior notes and senior discount notes, accrued interest on the senior notes of 0.3 billion, 0.9 billion of Exchangeable Loan debt, and
1.7 billion of convertible preference shares (all amounts as of March 31, 2003) in exchange for equity issued by a newly formed Delaware corporation, New UPC, Inc. ("New UPC").
The Restructuring Agreement consists primarily of the following key terms:



On
April 9, 2003, UPC sold six million shares of SBS to UnitedGlobalCom Europe B.V. for 100 million. As the Company completed the sale of its SBS shares to United prior to
the completion of the restructuring described below, the proceeds from the sale reduced the Maximum Subscription Amount to zero and, as a result, the Company's third-party noteholders do not have the
right to subscribe for any shares of New UPC's common stock. UPC transferred the proceeds from the sale of the SBS shares to UPC Holding B.V., which, in turn, transferred these funds to UPC
Distribution Holding B.V., as part of a 125 million funding contemplated in the UPC Distribution Bank Facility waiver.

Unless
the parties agree to an extension, any party to the Restructuring Agreement may terminate its obligations under the agreement after September 3, 2003, the date nine months
after the filing of the

12

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Chapter 11
Case; however, no creditor may change or withdraw its acceptance or rejection of the Plan (as defined below) absent order of the U.S. Bankruptcy Court (as defined below) for cause
shown.

The Plan of Reorganization

In order to effectuate the restructuring, on December 3, 2002 (the "Petition Date"), the Company filed a petition for relief under Chapter 11 (the "Chapter
11 Case") of the United States Bankruptcy Code (the "U.S. Bankruptcy Code") and the Company filed a pre-negotiated plan of reorganization, dated December 3, 2002 (the "Plan"), with
the United States Bankruptcy Court for the Southern District of New York (the "U.S. Bankruptcy Court"). The first amended Plan was filed with the U.S. Bankruptcy Court on December 23, 2002 and
second amended Plan was filed with the U.S. Bankruptcy Court on January 7, 2003. The Plan, as amended and modified by the first modifications dated February 18, 2003, was confirmed by
the U.S. Bankruptcy Court on February 20, 2003. In general, the Plan provides for the transfer of New UPC common stock for various claims against, and equity interests in, the Company, as
contemplated by the Memorandum of Understanding and Restructuring Agreement.

Akkoord

In order to achieve fully the restructuring, including the distributions contemplated by the Plan, it was also necessary to effect the restructuring under the
laws of certain non-U.S. jurisdictions, including Dutch law. Accordingly, in conjunction with the commencement of the Chapter 11 Case, on December 3, 2002, the Company commenced a
moratorium of payments in The Netherlands under Dutch bankruptcy law (the "Dutch Bankruptcy Case"). On December 3, 2002, the Company filed a proposed plan of compulsory composition (the
"Akkoord") with the Amsterdam Court (Rechtbank) (the "District Court") under the Dutch Faillissementswet(the "Dutch Bankruptcy Code"). The Company submitted a revision to theAkkoordto the
District Court on December 23, 2002 and a subsequent revision on January 7, 2003. The District Court ratified theAkkoordon
March 13, 2003. On March 21,
2003, InterComm Holdings L.L.C. ("ICH"), a creditor in the Dutch moratorium proceeding with a EUR 1.00 claim and one vote, based on a claim against the Company, appealed the District Court's
ratification of theAkkoord. On April 15, 2003, the Dutch Court of Appeals confirmed the judgment by the District Court of March 13, 2003
that ratified theAkkoord. On April 23, 2003, ICH appealed the ratification of theAkkoordto the
Dutch Supreme Court. The Dutch Supreme Court has scheduled briefs to be submitted by May 23, 2003 and is expected to rule on the appeal expeditiously. UPC believes the appeal is without merit.
The U.S. Bankruptcy Court has already overruled a similar objection brought by ICH in the parallel United States Chapter 11 process. UPC does not expect that this appeal will affect the successful
completion of UPC's restructuring, which in all other respects has been finalized. The appeal, however, is expected to delay completion of the restructuring beyond June 30, 2003.

Dutch Implementing Offer

Unlike the U.S. Bankruptcy Code, the Dutch Bankruptcy Code does not provide for theAkkoordto reorganize or
cancel any of the equity interests, ownership interests or shares in the Company. Therefore, in order to facilitate implementation of the Plan with respect to certain of the UPC Ordinary Shares A in
accordance with Dutch law, New UPC commenced an offer, solely with respect to holders of UPC

13

---

Ordinary
Shares A who were not U.S. Persons (as defined in Rule 902(k) of Regulation S promulgated under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), "U.S.
Persons") and were not located or residing within the United States, to deliver shares of New UPC common stock to such holders of UPC Ordinary Shares A in consideration for the delivery by such
holders of their UPC Ordinary Shares A to New UPC (the "Dutch Implementing Offer").

Extraordinary General Meeting of Shareholders

Similarly, the Dutch Bankruptcy Code does not provide for the Dutch Bankruptcy Case to exempt compliance from otherwise applicable corporate law. Therefore, in
order to facilitate implementation of the Plan, the Company held an extraordinary meeting of the holders of the UPC Ordinary Shares A, the UPC Priority Shares and the UPC Preference Shares A (the
"Extraordinary General Meeting") to approve certain amendments to the Company's Articles of Association and other shareholder proposals (the "Shareholder Proposals").

At
UPC's Extraordinary General Meeting of shareholders, which was held on February 19, 2003, the following amendments were adopted:



14

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Summary of Status of the Restructuring

As of the date of the filing of this Quarterly Report on Form 10-Q, the restructuring of the Company has not been completed, but is in the
final stages. The Plan, which provides for the transfer of New UPC common stock for various claims against, and equity interests in the Company, has been confirmed by the U.S. Bankruptcy Court. In
addition, theAkkoord, which was filed to effect the restructuring under Dutch law, has been ratified by the District Court. An appeal was filed against
the ratification of theAkkoord, and on April 15, 2003, the Dutch Court of Appeals confirmed the judgment by the District Court. On
April 23, 2003, a further appeal was filed with the Dutch Supreme Court, but the Company believes it is without merit and intends to oppose it vigorously. The Dutch Supreme Court has scheduled
briefs to be submitted by May 23, 2003. The Dutch Implementing Offer, which was scheduled to expire on April 24, 2003, has been extended to June 30, 2003. The Dutch Implementing
Offer will become unconditional on the Effective Date of the Plan and the settlement of the Dutch Implementing Offer will occur no later than five Euronext business days after the Dutch Implementing
Offer becomes unconditional. Certain amendments to UPC's Articles of Association were adopted during an Extraordinary General Meeting of its shareholders. One of the amendments was effective
immediately, two amendments will become effective upon the Effective Date of the Plan and the remaining amendments will become effective upon the later to occur of the effective date of the Plan and
the date of the delisting of the Company's Ordinary

15

---

Shares
A from Euronext Amsterdam. The Plan and theAkkoordare expected to become effective and the Company's restructuring complete soon after the
appeal against theAkkoordis resolved. From and after the Effective Date of the Plan, the Company expects to operate its businesses and properties as a
reorganized entity pursuant to the terms of the Plan.

UPC
believes subscriber growth has been impacted in some countries by the Company's financial restructuring; however, the Company believes the restructuring has not had a material
adverse effect on its subsidiaries or its relationships with suppliers and employees.

UPC
has experienced net losses since formation. As of March 31, 2003, as a result of the events of default and potential cross events of default as described above, UPC's senior
notes, senior discount notes, the Exchangeable Loan and the UPC Distribution Bank Facility have been classified as current liabilities and there is substantial uncertainty whether UPC's sources of
capital, working capital and projected operating cash flow will 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. UPC's ability to continue as a going concern is dependent on (i) completion of the restructuring and (ii) UPC's ability to generate the
cash flows required to enable it to recover the carrying value of 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. Due to the uncertainty of UPC's ability to continue as a going concern, the Report of Independent Accountant in the audited financial statements for the year ended
December 31, 2002, includes a modification in this respect. Following the successful completion of the planned restructuring, UPC believes that the Company will have sufficient sources of
capital, working capital and operating cash flows to enable the Company to continue as a going concern.

As
part of the Plan, the Company has rejected certain leases and contracts, as allowed by the Bankruptcy Code.

3.     Basis of Presentation

Basis of Presentation

As discussed in Note 2, the Company filed a petition for relief under Chapter 11 of the U.S Bankruptcy Code and the Company filed a Plan with the
U.S. Bankruptcy Court. In order to fully achieve the restructuring, including the distributions contemplated by the Plan, it was also necessary to effect the restructuring under the laws of certain
non-U.S. jurisdictions, including Dutch law. Accordingly, in conjunction with the commencement of the Chapter 11 Case, on December 3, 2002, the Company commenced a moratorium
of payments in The Netherlands under Dutch bankruptcy law. The petition affects only the Company's Dutch corporate parent and does not include any of its subsidiaries. UPC is operating its business as
a debtor-in-possession.

The
accompanying consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles. The preparation of
financial statements in conformity with United States generally accepted accounting principles requires

16

---

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. The financial statements have been prepared on a going-concern basis,
which contemplates continuity of operations, realization of assets, and liquidation of liabilities and commitments in the normal cause of business. As a result of the Company's recurring losses from
operations and net capital deficiency, and the Chapter 11 Case and related circumstances, realization of assets and liquidation of liabilities are subject to significant uncertainty. These
matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern depends on, among other things, its
ability to successfully complete the financial restructuring and maintain business and financial operations consistent with those expected in the Plan (see Note 2).

While
operating as a debtor-in-possession, the Company may sell or otherwise dispose of assets and liquidate or settle liabilities for amounts other than those
reflected in the consolidated financial statements. Further, the Plan could materially change the amounts and classifications reported in the consolidated financial statements.

In
connection with the Chapter 11 Case, the Company is required to prepare its consolidated financial statements as of March 31, 2003, in accordance with Statement of
Position 90-7, Financial Reporting by Entities in Reorganization Under Bankruptcy Code ("SOP 90-7"), issued by the American Institute of Certified Public Accountants. In accordance with
SOP 907, all of the Company's pre-petition liabilities that are subject to compromise under the proposed Plan are segregated in the Company's consolidated balance sheet
as liabilities and convertible preferred stock subject to compromise. These liabilities and the convertible preferred stock are recorded at the amounts expected to be allowed as claims in the
Chapter 11 Case rather than at the estimated amounts for which those allowed claims may be settled as a result of the approval of the Plan. The amounts for Chapter 11 related reorganization
expenses included in the consolidated debtor-in-possession statement of operations consist of professional fees of 7.6 million for the three months period ended
March 31, 2003.

17

---

Liabilities
and convertible preferred stock included in the consolidated debtor-in-possession balance sheet as of March 31, 2003, which are subject to
compromise under the terms of the Plan, are summarized as follows (in thousands of Euros):

|Cinenova                    |                                                                       | 11,667   
|--------------------------- | --------------------------------------------------------------------- | ---------
|Philips                     |                                                                       | 25,222   
|                            |                                                                       |          
|                            | Total accounts payable                                                |          
|                            |                                                                       |          
|Accrued interest            |                                                                       | 342,309  
|                            |                                                                       |          
|July 1999 notes             |                                                                       | 1,465,803
|October 1999 notes          |                                                                       | 1,000,295
|January 2000 notes          |                                                                       | 1,554,022
|The Exchangeable Loan       |                                                                       | 861,581  
|                            |                                                                       |          
|                            | Total senior notes, senior discount notes and other debt (see Note 7) |          
|                            |                                                                       |          
|Convertible preferred stock |                                                                       | 1,664,689
|                            |                                                                       |          
|                            | Total liabilities subject to compromise                               |          
|                            |                                                                       |          

In
accordance with SOP 907 interest expense is reported only to the extent that it will be paid during the bankruptcy proceedings or that it is an allowed claim. The
interest expense allowed as a claim is nil for the three months ended March 31, 2003. The contractual interest expense is 122.1 million for the three months ended March 31, 2003.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

New Accounting Principles

In August 2001, the Financial Accounting Standards Board issued SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). This statement
addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS 143 requires that
the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset and reported as a liability. This statement is effective for fiscal years beginning after June 15, 2002. The Company
has adopted SFAS 143 and determined, that based on its analyses, that although it has asset retirement obligations relating to certain contracts, it cannot make a reasonable estimate of the
fair value of the liability due to the contingent nature of the obligation and uncertainty about the timing of the settlement, if any. To date, the Company has not made any cash payments with respect
to the settlement of any potential asset retirement obligation.

In
January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, Consolidation of Variable Interest Entities-an
Interpretation of ARB No. 51("FIN 46"). FIN 46 requires

18

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certain
variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is effective immediately for
variable interest entities created or acquired after January 31, 2003. It applies in the first fiscal year or interim period beginning after June 15, 2003 for variable interest entities
created or acquired prior to February 1, 2003. The Company is currently evaluating the potential impact, if any, the adoption of FIN 46 will have on its financial position and results of
operations.

Stock-Based Compensation

The Company accounts for its stock-based compensation plans using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, ("APB 25"). The Company has provided pro forma disclosures of net loss as if the fair value based
method of accounting for these plans, as prescribed by Statement of Financial Accounting Standards No. 123,Accounting for Stock-Based
Compensation, ("SFAS 123"), had been applied. SFAS 123 is amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure
and Amendment of FASB Statement No. 123("SFAS 148"). The intrinsic
value method results in compensation expense for the difference between the grant price and the fair market value at each new measurement date. In addition, the Company,chello
broadbandandPriority Telecomhave stock-based compensation plans which are equivalent to stock appreciation rights.
Accordingly, variable plan accounting is used in which compensation expense and deferred compensation is recorded based on the difference between the grant price and the market value of the underlying
shares at each financial statement date. For our plans, which follow fixed plan accounting,
compensation expense and deferred compensation is recorded based on the difference between the grant price and the market value of the underlying shares at grant date. The Company has adopted the
disclosure requirements of SFAS 123.

Based
upon Black-Scholes single option pricing model, the total aggregate fair value of options granted was nil for the three-month period ended March 31, 2003. The amount of the
total aggregate fair values is being amortized using the straight-line method over the vesting period of the options. Cumulative compensation expense recognized in pro forma net income,
with respect to options that are forfeited prior to vesting, is adjusted as a reduction of pro forma compensation expense in the period of forfeiture. Stock-based compensation, net of the effect of
forfeitures and net of actual compensation expense recorded in the statement of operations, was 17.3 million and 20.4 million, for the three month period ended March 31,

19

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2003
and March 31, 2002, respectively. This stock-based compensation had the following pro forma effect on net income (in thousands):

|                                                                                                                   |                                        | For the Three Months Ended March 31, |     
|------------------------------------------------------------------------------------------------------------------ | -------------------------------------- | ------------------------------------ | ----
|
|
|Basic net income (loss) attributable to common shareholders, as reported                                           |                                        | 46,323                               |     
|Add: Stock-based compensation expense included in reported net income (loss), net of related tax effects           |                                        | 3,893                                |     
|Deduct: Total stockbased compensation expense determined under fair value based method, net of related tax effects |                                        | (17,324                              | )   
|                                                                                                                   |                                        |                                      |     
|Pro forma net income (loss)                                                                                        |                                        | 32,892                               |     
|                                                                                                                   |                                        |                                      |     
|Earnings per share:                                                                                                |                                        |                                      |     
|                                                                                                                   | Basic earnings per shareas reported   |                                      | 0.10
|                                                                                                                   |                                        |                                      |     
|                                                                                                                   | Basic earnings per sharepro forma     |                                      | 0.07
|                                                                                                                   |                                        |                                      |     
|                                                                                                                   | Diluted earnings per shareas reported |                                      | 0.07
|                                                                                                                   |                                        |                                      |     
|                                                                                                                   | Diluted earnings per sharepro forma   |                                      | 0.05
|                                                                                                                   |                                        |                                      |     

4.     Acquisition, Disposition and Other

Tevel

UPC's 100% indirect subsidiary, Cable Network Zuid-oost Brabant Holding B.V. ("Cable Brabant"), holds through its 100% subsidiary U.C.T.
Netherlands B.V. ("UCTN") and its 100% subsidiary, Tishdoret Achzakot Ltd ("Tishdoret"), a 46% interest in Tevel Israel Communications Ltd. ("Tevel") the largest cable operator in
Israel. The economic and regulatory situation in Israel together with the instability in the region led the Company to write the value of this minority investment down to zero at the year end 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. In connection with the original
acquisition of the cable assets in Israel, Cable Brabant is indebted to the First International Bank of Israel in the principal amount of 55 million ("the FiBI loan"), which was due, together
with accrued interest, on November 9, 2002. The FiBI loan is secured by a pledge of half of the shares in Tevel. UPC's indirect subsidiary Cable Brabant sold all of its material assets
(including the shares in UCTN, and indirectly the shares in Tishdoret and Tevel) to the First International Bank of Israel. The parties consider this to be the full repayment of the FiBI loan of
approximately 69 million. This transaction closed on February 24, 2003, resulting in a gain of approximately 69 million from the extinguishment of this obligation.

20

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5.     Property, Plant and Equipment

|                                             |                                    | As of
March 31,
2003 |            | As of
December 31,
2002 |           
|-------------------------------------------- | ---------------------------------- | -------------------- | ---------- | ----------------------- | ----------
|
|Cable distribution networks                  |                                    | 3,449,980            |            | 3,461,209               |           
|Subscriber premises equipment and converters |                                    | 900,302              |            | 890,589                 |           
|DTH, MMDS and distribution facilities        |                                    | 87,610               |            | 87,666                  |           
|IT systems, office equipment and fixtures    |                                    | 293,220              |            | 295,300                 |           
|Buildings and leasehold improvements         |                                    | 141,000              |            | 144,606                 |           
|Other                                        |                                    | 58,513               |            | 58,711                  |           
|                                             |                                    |                      |            |                         |           
|                                             |                                    | 4,930,625            |            | 4,938,081               |           
|                                             | Accumulated depreciation           |                      | (1,914,031 | )                       | (1,762,718
|                                             |                                    |                      |            |                         |           
|                                             | Property, plant and equipment, net |                      | 3,016,594  |                         | 3,175,363 
|                                             |                                    |                      |            |                         |           

6.     Goodwill and Other Intangible Assets

The following table presents the movement of net goodwill during 2003:

|              |                 | As of
December 31,
2002 |         | Acquisitions |     | Cumulative
Translation
Adjustment
& Other |        | As of
March 31,
2003
|------------- | --------------- | ----------------------- | ------- | ------------ | --- | ----------------------------------------- | ------ | --------------------
|
|Distribution: |                 |                         |         |              |     |                                           |        |                     
|              | The Netherlands |                         | 610,704 |              |    |                                           | 163    |                     
|              | Austria         |                         | 133,963 |              |    |                                           |       |                     
|              | Belgium         |                         | 13,634  |              |    |                                           | (1,276 | )                   
|              | Norway          |                         | 8,607   |              |    |                                           | (677   | )                   
|              | Hungary         |                         | 70,517  |              | 195 |                                           | (1,685 | )                   
|              | Sweden          |                         | 136,275 |              |    |                                           | (1,105 | )                   
|              | Other           |                         | 22,246  |              |    |                                           | (739   | )                   
|              |                 |                         |         |              |     |                                           |        |                     
|Total         |                 | 995,946                 |         | 195          |     | (5,319                                    | )      | 990,822             
|              |                 |                         |         |              |     |                                           |        |                     

The
following table presents other intangible assets, as of March 31, 2003 and December 31, 2002:

|             |                         | As of March 31, 2003 |         | As of December 31, 2002
|------------ | ----------------------- | -------------------- | ------- | -----------------------
|
|
|License fees |                         | 114,803              |         | (42,661                
|Other        |                         | 7,549                |         | (6,096                 
|             |                         |                      |         |                        
|             | Total intangible assets |                      | 122,352 |                        
|             |                         |                      |         |                        

21

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The
aggregate amortization expense on goodwill and other intangibles for the three months ended March 31, 2003 and 2002 was 3.2 million and 9.8 million,
respectively. The Company's future estimated amortization expenses are as follows:

|Nine Months Ended December 31, 2003   |       | 8,664 
|------------------------------------- | ----- | ------
|Twelve Months Ended December 31, 2004 |       | 7,684 
|Twelve Months Ended December 31, 2005 |       | 7,460 
|Twelve Months Ended December 31, 2006 |       | 7,359 
|Twelve Months Ended December 31, 2007 |       | 7,358 
|Thereafter                            |       | 35,070
|                                      |       |       
|                                      | Total |       
|                                      |       |       

7.     Long-Term Debt

|                               |                         | As of
March 31,
2003 |            | As of
December 31,
2002 |           
|------------------------------ | ----------------------- | -------------------- | ---------- | ----------------------- | ----------
|
|July 1999 Notes                |                         | 1,465,803            |            | 1,513,558               |           
|October 1999 Notes             |                         | 1,000,295            |            | 1,027,625               |           
|January 2000 Notes             |                         | 1,554,022            |            | 1,607,706               |           
|UPC Distribution Bank Facility |                         | 3,127,759            |            | 3,140,139               |           
|Exchangeable Loan              |                         | 861,581              |            | 894,457                 |           
|UPC Polska Notes               |                         | 358,922              |            | 359,951                 |           
|DIC Loan (see Note 4)          |                         |                     |            | 54,438                  |           
|Other                          |                         | 80,922               |            | 85,218                  |           
|                               |                         |                      |            |                         |           
|                               |                         | 8,449,304            |            | 8,683,092               |           
|                               | Less current portion(1) |                      | (8,028,715 | )                       | (8,255,648
|                               |                         |                      |            |                         |           
|                               | Total                   |                      | 420,589    |                         | 427,444   
|                               |                         |                      |            |                         |           

---

The
UPC Polska Notes are currently classified as long term debt on the basis of waivers that UPC Polska has obtained regarding certain covenant violations, on loans it owes to the
Company and its affiliates. These waivers extend until April 1, 2004, but are subject to early termination upon the occurrence of certain conditions, including termination of waivers on certain cross
defaults on the

22

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Company's
and its affiliates loans. If such cross defaults or other conditions were to occur and would not be cured, the waivers on UPC Polska's loans from the Company and its affiliates could
terminate, which in turn could allow the UPC Polska Notes to be accelerated.

8.     Guarantees, Commitments and Contingencies

Guarantees

The Company has entered into agreements that contain features, which meet the definition of a guarantee under FIN 45. FIN 45 defines a guarantee to be a contract
that contingently requires the Company to make payments (either in cash, financial instruments, other assets, common shares of the Company or through provision of services) to a third party based upon
changes in an underlying economic characteristic (such as interest rates or market value) that is related to an asset, a liability or an equity security of the other party. The Company has the
following major types of guarantees that are subject to the disclosure requirements of FIN 45:

Business sale agreements

In connection with agreements for the sale of portions of the Company's business, including certain discontinued operations, the Company typically retained the
liabilities of a business, which relate to events occurring prior to its sale, such as tax, environmental, litigation and employment matters. The Company generally indemnifies the purchaser of its
business in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Company. These types of indemnification guarantees typically extend for a
number of years.

The
Company is unable to estimate the maximum potential liability for these types of indemnification guarantees as the business sale agreements do not specify a maximum amount and the
amounts are dependent upon the outcome of future contingent events, the nature and the likelihood of which cannot be determined at this time.

Historically,
the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements
with respect to these indemnification guarantees.

Lease agreements

The Digital Media Center ("DMC") sub-lease transponder capacity to a third party. Under this sub-lease agreement, the Company guaranteed certain performance
criteria. These issued performance guarantees are fully matched with the guarantees received under the lease agreements between UPC and the third party.

Indemnification of lenders and agents under credit facilities

Under its credit facilities, the Company has agreed to indemnify its lenders under such facilities against costs or losses resulting from changes in laws and
regulation, which would increase the lenders'

23

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costs,
and for legal action brought against the lenders. These indemnifications generally extend for the term of the credit facilities and do not provide for any limit on the maximum potential
liability.

Historically,
the Company has not made any significant indemnification payments under such agreements and no material amounts have been accrued in the accompanying financial statements
with respect to these indemnification guarantees.

Other indemnification agreements

The DMC has third party contracts for the play out of channels from the DMC, which require the DMC to perform according to industry standard practice, with
penalties attached should performance drop below the agreed criteria. Additionally, UPC Media's interactive service group also entered into third party contracts for the delivery of interactive
content with certain performance criteria guarantees.

The
Company has certain franchise obligations under which the Company must meet performance requirements to construct networks under certain circumstances. Non-performance of
these obligations could result in penalties being levied against the Company. The Company continues to meet its obligations so as not to incur such penalties.

In
the ordinary course of business, the Company provides customers with certain performance guarantees, should a service outage occur in excess of a certain period in time, UPC will
compensate those customers for the outage.

Historically,
the Company has not made any significant payments under any of these indemnifications or guarantees. In certain cases, due to the nature of the agreement, the Company has
not been able to estimate its maximum potential loss, the maximum potential loss has not been specified.

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. As these legal proceedings are
resolved, to the extent that UPC has any liability and such liability is owed by the Company, and to the extent the Plan and Akkoord become effective, UPC will distribute shares of New UPC Common
Stock as provided under the Plan and theAkkoordin satisfaction of such claim.

On
July 4, 2001, InterComm Holdings L.L.C., 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 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 for a maximum of 192 million, plus reasonable fees and costs. The ICF Party

24

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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. UPC is vigorously defending the arbitration proceedings and has filed appropriate counter claims. The ICF party withdrew its claims on January 31,
2003; this arbitration is however still pending as a result of the decision of UPC and its affiliates to maintain their counterclaims. On February 14, 2003, the ICF Party served a new demand
for arbitration on UPC, Belmarken and UPC France in which the ICF Party filed again claims similar to those withdrawn on January 31, 2003. UPC and its affiliates have answered such new demand
for arbitration on April 29, 2003 and will, again deny vigorously the merit of these claims.

On
December 3, 2002, UPC filed a petition for relief under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New
York. For further details, please see Note 2 "Reorganization Under Bankruptcy Code".

In
order to achieve fully the restructuring contemplated by the Plan under the U.S. Chapter 11 Case, including the distributions contemplated by the Plan, it was also necessary to effect
the restructuring under the laws of certain non-U.S. jurisdictions, including Dutch law. Accordingly, in conjunction with the commencement of the U.S. Chapter 11 Case, on
December 3, 2002, UPC commenced the "Dutch Bankruptcy Case. On December 3, 2002, UPC filed theAkkoordwith the "Dutch Bankruptcy Court"
under the Dutch Bankruptcy Code. UPC submitted a revision to the Akkoordto the Dutch Bankruptcy Court on December 23, 2002 and a subsequent revision on January 7, 2003. The Dutch Bankruptcy
Court
ratified theAkkoordon March 13, 2003. On March 21, 2003, InterComm Holdings L.L.C. ("ICH"), a creditor in the Dutch moratorium
proceeding with a EUR 1.00 claim and one vote, based on a claim against the Company, appealed the District Court's ratification of theAkkoord. On
April 15, 2003, the Dutch Court of Appeals confirmed the judgment by the District Court of March 13, 2003 that ratified theAkkoord. On
April 23, 2003, ICH appealed the ratification of theAkkoordto the Dutch Supreme Court. The Dutch Supreme Court has scheduled briefs to be
submitted by May 23, 2003 and is expected to rule on the appeal expeditiously. UPC believes the appeal is without merit. The U.S. Bankruptcy Court has already overruled a similar objection
brought by ICH in the parallel United States Chapter 11 process. UPC does not expect that this appeal will affect the successful completion of UPC's restructuring, which in all other respects has been
finalized. The appeal, however, is expected to delay completion of the restructuring beyond June 30, 2003.

On
December 3, 2002, Europe Movieco Partners Limited ("Movieco") filed a request for arbitration (the "Request") against the Company with the International Court of Arbitration of
the International Chamber of Commerce. The Request contains claims, which are based on a cable affiliation agreement entered into between the parties on December 21, 1999 (the "CAA"). The
arbitral proceedings were suspended from December 17, 2002 to March 18, 2003. They have been reactivated and are currently pending. Movieco claims (i) USD 11.3 million plus
interest, (ii) USD 3.8 million (or such higher sum as may be due at the date of the award), plus interest (iii) legal and arbitration costs (iv) an order for specific
performance of the CAA or, in the alternative, damages for breach of that agreement, to be assessed. UPC has denied the claims in their entirety and has filed counterclaims.

25

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9.     Stockholders' Deficit

Accumulated Other Comprehensive Income (Loss)

|                                                        |                                              | As of
March 31,
2003 |         | As of
December 31,
2002 |        
|------------------------------------------------------- | -------------------------------------------- | -------------------- | ------- | ----------------------- | -------
|
|Forein currency translation adjustments                 |                                              | 251,404              |         | 231,627                 |        
|Fair value of derivative assets                         |                                              | (3,731               | )       | (10,133                 | )      
|Unrealized gain (loss) on available-for-sale securities |                                              | (11,388              | )       | (14,248                 | )      
|                                                        |                                              |                      |         |                         |        
|                                                        | Total accumulated other comprehensive income |                      | 236,285 |                         | 207,246
|                                                        |                                              |                      |         |                         |        

Number of Shares Potentially Exercisable

As of March 31, 2003, the aggregate number of shares potentially exercisable under the Company's stock option plans and shares which could be issued as a
result of conversion of convertible securities issued by the Company, were as follows:

|                   |                                                | For the Three
Months Ended
March 31, 2003
|------------------ | ---------------------------------------------- | -----------------------------------------
|
|Exchangeable Loan  |                                                | 136,797,268                              
|Preference Shares  |                                                | 48,314,874                               
|Stock option plans |                                                | 16,974,728                               
|                   |                                                |                                          
|                   | Total number of shares potentially exercisable |                                          
|                   |                                                |                                          

10.     Segments and Geographic Information

The Company's business has historically been derived from cable television. Commencing in 1998, the Company began launching telephone and internet services over
parts of its upgraded network. The Company is managed internally as three primary businesses, UPC Distribution, UPC Media andPriority Telecom(with the
UPC Media division managing thechello broadbandand programming businesses). UPC Distribution focuses on providing cable television, DTH, internet and
telephone services to residential customers and is comprised of the local operating systems. UPC Media includes,chello broadband,the internet access
provider, and UPCtv, which provides video content and programming as well as UPC's digital products. UPC Media provides broadband internet and interactive digital products and services, transactional
television services such as pay per view movies, digital broadcast and post production services, and thematic channels for distribution on our network, third party networks and DTH platforms. Priority Telecomis focused on providing telephone and internet services to business customers. In 2003, UPC has formed an Investment Division, which
manages UPC's non-consolidated investment assets.

The
Company evaluates performance and allocates resources based on the results of these divisions. The key operating performance criteria used in this evaluation include revenue growth
and "Adjusted EBITDA". Adjusted EBITDA is not a generally accepted accounting principle ("GAAP") measure. The most directly comparable financial measure to Adjusted EBITDA that is calculated and
presented in

26

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accordance
with GAAP is income (loss) before income taxes and other items. Adjusted EBITDA represents net operating earnings before depreciation, amortization, stock-based compensation charges, and
impairment and restructuring charges. Adjusted EBITDA is one of the primary measures used by the Company's chief decision makers to measure the Company's operating results and to measure segment
profitability and performance. Management believes that Adjusted EBITDA is meaningful to investors because it provides an analysis of operating results using the same measures used by the Company's
chief decision makers, that Adjusted EBITDA provides investors with the means to evaluate the financial results of the Company compared to other companies within the same industry and it is common
practice for institutional investors and investment bankers to use various multiples of current or projected Adjusted EBITDA for purposes of estimating current or prospective enterprise value. The
Company's calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view adjusted EBITDA as an
alternative to GAAP measure of income as a measure of performance, or to cash flows from operating investing and financing activities as a measure of liquidity. In addition, Adjusted EBITDA does not
take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. Adjusted EBITDA excludes non-cash and cash stock-based
compensation charges, which result from the Company's and its subsidiaries' stock option and phantom stock option plans.

27

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A
summary of the segment information by geographic area is as follows:

|                          |                                | Revenues for the Three Months Ended March 31, |        
|------------------------- | ------------------------------ | --------------------------------------------- | -------
|
|
|Triple Play(1):           |                                |                                               |        
|                          | The Netherlands                |                                               | 127,382
|                          | Austria                        |                                               | 55,714 
|                          | Belgium                        |                                               | 6,923  
|                          | Czech Republic                 |                                               | 9,772  
|                          | Norway                         |                                               | 21,786 
|                          | Hungary                        |                                               | 31,845 
|                          | France                         |                                               | 24,767 
|                          | Poland                         |                                               | 19,020 
|                          | Sweden                         |                                               | 15,950 
|                          | Other                          |                                               | 9,633  
|                          |                                |                                               |        
|                          | Total Triple Play Distribution |                                               | 322,792
|                          |                                |                                               |        
|Germany                   |                                |                                              |        
|DTH                       |                                | 9,202                                         |        
|Corporate                 |                                |                                              |        
|Other                     |                                | 6,471                                         |        
|Intercompany Eliminations |                                |                                              |        
|                          |                                |                                               |        
|                          | Total Distribution             |                                               | 338,465
|                          |                                |                                               |        
|Priority Telecom          |                                | 26,604                                        |        
|UPC Media                 |                                | 20,671                                        |        
|UPC Investments           |                                | 123                                           |        
|Intercompany Eliminations |                                | (26,763                                       | )      
|                          |                                |                                               |        
|                          | Total                          |                                               | 359,100
|                          |                                |                                               |        

---

28

---

|             |                                | Triple Play Revenues for the
Three Months Ended March 31, 2003
|------------ | ------------------------------ | --------------------------------------------------------------
|
|
|Triple Play: |                                |                                                               
|             | The Netherlands                |                                                               
|             | Austria                        |                                                               
|             | Belgium                        |                                                               
|             | Czech Republic                 |                                                               
|             | Norway                         |                                                               
|             | Hungary                        |                                                               
|             | France                         |                                                               
|             | Poland                         |                                                               
|             | Sweden                         |                                                               
|             | Other                          |                                                               
|             |                                |                                                               
|             | Total Triple Play Distribution |                                                               
|             |                                |                                                               

|             |                                | Triple Play Revenues for the
Three Months Ended March 31, 2002
|------------ | ------------------------------ | --------------------------------------------------------------
|
|
|Triple Play: |                                |                                                               
|             | The Netherlands                |                                                               
|             | Austria                        |                                                               
|             | Belgium                        |                                                               
|             | Czech Republic                 |                                                               
|             | Norway                         |                                                               
|             | Hungary                        |                                                               
|             | France                         |                                                               
|             | Poland                         |                                                               
|             | Sweden                         |                                                               
|             | Other                          |                                                               
|             |                                |                                                               
|             | Total Triple Play Distribution |                                                               
|             |                                |                                                               

---

29

---

|                 |                                | Adjusted EBITDA for the Three Months Ended March 31, |        
|---------------- | ------------------------------ | ---------------------------------------------------- | -------
|
|
|Triple Play(1):  |                                |                                                      |        
|                 | The Netherlands                |                                                      | 48,188 
|                 | Austria                        |                                                      | 20,879 
|                 | Belgium                        |                                                      | 2,653  
|                 | Czech Republic                 |                                                      | 4,643  
|                 | Norway                         |                                                      | 5,682  
|                 | Hungary                        |                                                      | 14,510 
|                 | France                         |                                                      | 1,070  
|                 | Poland                         |                                                      | 4,873  
|                 | Sweden                         |                                                      | 6,594  
|                 | Other                          |                                                      | 4,006  
|                 |                                |                                                      |        
|                 | Total Triple Play Distribution |                                                      | 113,098
|                 |                                |                                                      |        
|Germany          |                                |                                                     |        
|DTH              |                                | 1,216                                                |        
|Corporate        |                                | (17,861                                              | )      
|Other            |                                | 5,139                                                |        
|                 |                                |                                                      |        
|                 | Total Distribution             |                                                      | 101,592
|                 |                                |                                                      |        
|Priority Telecom |                                | 2,601                                                |        
|UPC Media        |                                | 2,465                                                |        
|UPC Investments  |                                | (170                                                 | )      
|                 |                                |                                                      |        
|                 | Total                          |                                                      | 106,488
|                 |                                |                                                      |        

---

30

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Following is a reconciliation of Adjusted EBITDA to UPC's net income (loss) for the three months ended March 31, 2003 and 2002.

|                                                    |                                                                          | For the Three Months
Ended March 31, |        
|--------------------------------------------------- | ------------------------------------------------------------------------ | ------------------------------------ | -------
|
|
|Adjusted EBITDA                                     |                                                                          | 106,488                              |        
|Depreciation and amortization                       |                                                                          | (166,616                             | )      
|Impairment and restructuring charges                |                                                                          |                                     |        
|Stock-based compensation                            |                                                                          | (3,893                               | )      
|                                                    |                                                                          |                                      |        
|                                                    | Operating income (loss)                                                  |                                      | (64,021
|Interest income                                     |                                                                          | 3,569                                |        
|Interest expense                                    |                                                                          | (82,377                              | )      
|Foreign exchange gain (loss)                        |                                                                          | 133,355                              |        
|Other income (expense)                              |                                                                          | 66,486                               |        
|                                                    |                                                                          |                                      |        
|                                                    | Net income (loss) before income taxes and other items                    |                                      | 57,012 
|Reorganization expenses, net                        |                                                                          | (7,641                               | )      
|Income tax benefit (expense)                        |                                                                          | (488                                 | )      
|Minority interests in subsidiaries                  |                                                                          | (65                                  | )      
|Share in results of affiliates, net                 |                                                                          | (2,495                               | )      
|                                                    |                                                                          |                                      |        
|                                                    | Income (loss) before cumulative effect of change in accounting principle |                                      | 46,323 
|Cumulative effect of change in accounting principle |                                                                          |                                     |        
|                                                    |                                                                          |                                      |        
|                                                    | Net income (loss)                                                        |                                      | 46,323 
|                                                    |                                                                          |                                      |        

31

---

|                              |                 | Total Assets
|----------------------------- | --------------- | ------------
|
|
|Corporate and UPC Investments |                 | 518,687     
|UPC Media                     |                 | 71,802      
|Priority Telecom              |                 | 235,347     
|Distribution:                 |                 |             
|                              | The Netherlands |             
|                              | Austria         |             
|                              | Belgium         |             
|                              | Czech Republic  |             
|                              | Norway          |             
|                              | Hungary         |             
|                              | France          |             
|                              | Poland          |             
|                              | Sweden          |             
|                              | Other           |             
|                              |                 |             
|Total                         |                 | 4,774,269   
|                              |                 |             

11.   Impairment and Restructuring Charges

During 2001, in reviewing the current and long-range plan, the Company implemented a Company-wide restructuring plan to both lower
operating expenses and strengthen its competitive and financial position. Management began implementation of the plan during the second half of 2001 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.

32

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The
following table summarizes these costs by type and related segment of the business as per March 31, 2003.

|                                                                                     |  | Employee
Severance &
Termination
Costs |   | Office
Closures |   | Programming
and Lease
Contracts
Termination Costs |   | Asset
Disposal
Losses and
Other Costs |   | Total
Impairment and
Restructuring
Charges |  
|------------------------------------------------------------------------------------ |  | -------------------------------------- | - | --------------- | - | ------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------ | -
|
|Impairment and restructuring liability, December 31, 2002                            |  | 18,545                                 |   | 13,550          |   | 35,184                                            |   | 4,195                                 |   | 71,474                                     |  
|                                                                                     |  |                                        |   |                 |   |                                                   |   |                                       |   |                                            |  
|Total impairment and restructuring charges for the three months ended March 31, 2003 |  |                                       |   |                |   |                                                  |   |                                      |   |                                           |  
|Cash paid during three months ended March 31, 2003                                   |  | (5,674                                 | ) | (1,416          | ) | (1,550                                            | ) | (879                                  | ) | (9,519                                     | )
|Non-cash release of restructuring liability                                          |  |                                       |   |                |   |                                                  |   |                                      |   |                                           |  
|                                                                                     |  |                                        |   |                 |   |                                                   |   |                                       |   |                                            |  
|Impairment and restructuring liability, March 31, 2003                               |  | 12,871                                 |   | 12,134          |   | 33,634                                            |   | 3,316                                 |   | 61,955                                     |  
|                                                                                     |  |                                        |   |                 |   |                                                   |   |                                       |   |                                            |  
|Short-term portion impairment and restructuring liability                            |  | 7,233                                  |   | 5,423           |   | 888                                               |   | 3,253                                 |   | 16,797                                     |  
|Long-term portion impairment and restructuring liability                             |  | 5,638                                  |   | 6,711           |   | 32,746                                            |   | 63                                    |   | 45,158                                     |  
|                                                                                     |  |                                        |   |                 |   |                                                   |   |                                       |   |                                            |  
|Impairment and restructuring liability, March 31, 2003                               |  | 12,871                                 |   | 12,134          |   | 33,634                                            |   | 3,316                                 |   | 61,955                                     |  
|                                                                                     |  |                                        |   |                 |   |                                                   |   |                                       |   |                                            |  

12.   Other Income (Expense)

The other income of 66.5 million for the three months ended March 31, 2003, relates primarily to the gain on the Tevel transaction (see
Note 4). The other expense of 62.4 million for the three months ended March 31, 2002, consists primarily of a gain relating to the restructuring and cancellation of costs
associated with excess capacity of certainPriority Telecomvendor contracts of 124.5 million and a loss of 177.8 million in connection
with the mark-to-market valuations of our cross currency and interest rate derivative contracts from period to period.

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13.   Basic and Diluted Net Income (Loss) Attributable to Common Shareholders

|         |                                                               | For the Three Months
Ended March 31, |       
|-------- | ------------------------------------------------------------- | ------------------------------------ | ------
|
|
|Basic:   |                                                               |                                      |       
|         | Net income (loss)                                             |                                      | 46,323
|         | Accretion of Series 1 convertible preferred stock             |                                      |      
|         |                                                               |                                      |       
|         | Basic net income (loss) attributable to common shareholders   |                                      | 46,323
|Diluted: |                                                               |                                      |       
|         | Accretion of Series 1 convertible preferred stock             |                                      |      
|         |                                                               |                                      |       
|         | Diluted net income (loss) attributable to common shareholders |                                      | 46,323
|         |                                                               |                                      |       

---

14.   Subsequent Events

Polish Restructuring

UPC Polska has met with representatives of UPC (which through subsidiaries holds debt obligations of UPC Polska) and certain holders of the UPC Polska Notes
(other than UPC and its affiliates) to discuss a process for, and terms of, a restructuring of those obligations and notes. UPC and its advisors and the noteholders and their advisors have had
substantive discussions with UPC Polska about the terms of a possible debt restructuring. As of the date of the filing of this Quarterly Report on Form 10-Q, UPC Polska has not
entered into a definitive agreement with either UPC, its affiliates or the noteholders' regarding the terms of a debt restructuring.

Cross Currency swaps

In November 2002, UPC's cross currency swaps on UPC Distribution Bank Facility were frozen at a settlement price of 64.6 million. Of the
64.6 million obligation, 12.0 million has been paid with the remaining 52.6 million being recorded under short-term debt as per March 31, 2003. As per
May 15, 2003, 41.5 million of this obligation has been repaid.

15.   Restatement of Financial Statements

We consolidated the financial results of UPC Germany prior to July 2002, as we held an indirect approximate 51% majority voting equity interest. At the end
of July 2002, our ownership interest in UPC Germany was reduced from approximately 51% to approximately 29% as a result of a pre-existing call right held by the minority
shareholder, which became exercisable in February 2002 as a result of certain events of default under several of our debt agreements. Accordingly, we deconsolidated UPC Germany effective
August 1, 2002. Upon deconsolidation, our net negative investment in UPC Germany was 150.3 million. Previously we concluded that generally accepted accounting principles precluded the

34

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recognition
of a gain upon deconsolidation because there were significant uncertainties regarding the realization of such gain. Based on further analysis, we revised our conclusion, and as such we
have restated our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2003, to recognize a gain from the reversal of this net negative
investment, effective August 1, 2002. This restatement affected our previously issued unaudited condensed consolidated financial statements as follows:

|                                                |  | March 31, 2003 |  
|----------------------------------------------- |  | -------------- | -
|
|
|Deferred gain on sale of assets                 |  | 150,321        |  
|Long-term liabilities not subject to compromise |  | 652,736        |  
|Accumulated deficit                             |  | (10,007,307    | )
|Stockholders' equity (deficit)                  |  | (6,600,013     | )

The
restatement had no effect on the net income (loss) for the three months ended March 31, 2003 or 2002, respectively.

The
restatement had no effect on total cash flow from operating, investing or financing activities.

35

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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 successfully
complete the restructuring as anticipated. 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 public accountants KPMG Accountants N.V. on our consolidated financial statements for the year ended December 31, 2002, includes a paragraph that
states that we are currently under bankruptcy court supervision in both the United States and in the Netherlands, have suffered substantial recurring losses from operations, are currently in default
under certain of our senior notes and senior discount notes, obtained waivers from the lenders under the UPC Distribution Bank Facility and the Exchangeable Loan for potential events of cross
defaults, and have a net capital deficiency. Management expects the Company to incur operating losses at least through 2004. Accordingly there is substantial doubt about our ability to continue as a
going concern. Our management's plans in regard to these matters are described in Note 2 of the Notes to the Condensed Consolidated Financial Statements contained in this Quarterly Report on
Form 10-Q. Our 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 KPMG Accountants N.V. 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 period ended March 31, 2003, and 2002, 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. All capitalized terms used and not otherwise defined in Item
2Management's Discussion and Analysis of Financial Condition and Results of Operations have the meanings given to them in Notes to the Consolidated Financial Statements contained in
Part IFinancial Statements.

Reorganization Under Bankruptcy Code

For information regarding the reorganization under bankruptcy code, see Note 2 to our condensed consolidated financial statements included elsewhere
herein.

Summary of Status of the Restructuring

As of the date of the filing of this Quarterly Report on Form 10-Q, our restructuring has not been completed, but is in the final stages. The
Plan, which provides for the transfer of New UPC common stock

36

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for
various claims against, and interests in our equity, has been confirmed by the U.S. Bankruptcy Court. In addition, theAkkoord, which was filed to
effect the restructuring under Dutch law, has been ratified by the District Court. An appeal was filed against the ratification of theAkkoord, and on
April 15, 2003, the Dutch Court of Appeals confirmed the judgment by the District Court. On April 23, 2003, a further appeal was filed with the Dutch Supreme Court, but we believe it is
without merit and intend to oppose it vigorously. The Dutch Supreme Court has scheduled briefs to be submitted by May 23, 2003. The Dutch Implementing Offer, which was scheduled to expire on
April 24, 2003, has been extended to June 30, 2003. The Dutch Implementing Offer will become unconditional on the Effective Date of the Plan and the settlement of the Dutch Implementing
Offer will occur no later than five Euronext business days after the Dutch Implementing Offer becomes unconditional. Certain amendments to our Articles of Association were adopted during an
Extraordinary General Meeting of our shareholders. One of the amendments was effective immediately, two amendments will become effective upon the effective date of the Plan and the remaining
amendments will become effective upon the later to occur of the effective date of the Plan and the date of the delisting of the our Ordinary Shares A from Euronext Amsterdam. The Plan and the Akkoordare expected to become effective and our restructuring complete soon after the appeal against the Akkoordis resolved. From and after the Effective Date of the Plan, we expect to operate our businesses
and properties as a reorganized entity pursuant
to the terms of the Plan.

We
believe subscriber growth has been impacted in some countries by our financial restructuring; however, we believe the restructuring has not had a material adverse effect on our
subsidiaries or our relationships with suppliers and employees.

We
have experienced net losses since formation. As of March 31, 2003, as a result of the events of default and potential cross events of default as described in Note 2 to
our condensed consolidated financial statements included elsewhere herein., our senior notes, senior discount notes, the Exchangeable Loan and the UPC Distribution Bank Facility have been classified
as current liabilities and there is substantial uncertainty whether our sources of capital, working capital and projected operating cash flow will 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. Our ability to continue as a going concern is dependent on
(i) completion of the restructuring and (ii) our ability to generate the cash flows required to enable us to recover the carrying value of our assets and satisfy our liabilities, in the
normal course of business, at the amounts stated in the consolidated financial statements. Due to the uncertainty of our ability to continue as a going concern, the Report of Independent Accountant in
the audited financial statements for the year ended December 31, 2002, includes a modification in this respect. Following the successful completion of the planned restructuring, we believe that
we will have sufficient sources of capital, working capital and operating cash flows to enable us to continue as a going concern.

Description of Business

We own and operate broadband communications networks in 11 countries in Europe. Our operations are organized into three principal divisions: UPC Distribution, UPC
Media andPriority Telecom. UPC Distribution delivers video, internet and telephone services to residential customers (the "Triple Play"). UPC Media
provides broadband internet and interactive digital products and services, transactional television services such as pay per view movies, digital broadcast and post production services, and thematic
channels for distribution on our network, third party networks and DTH platforms.Priority Telecomoperates our competitive local exchange carrier
("CLEC") business and provides telephone and data network solutions to the business market. ThePriority Telecombrand is also used to offer telephone
services to residential customers through UPC Distribution. In addition, as part of the ongoing realignment of the business, we have formed an Investments Division, which will manage our
non-consolidated investment assets. We continue to focus on rationalizing our investment portfolio to maximize value.

37

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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 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 organic growth in new services, which have resulted in significant growth in our consolidated revenues and
expenditures.

Results of Operations

Revenue

Revenue increased 12.8 million, or 3.7%, from 346.3 million for the three months ended March 31, 2002 to 359.1 million for the three
months ended March 31, 2003. The increase in revenue is mainly due to a combination of organic subscriber growth and the increase in average revenue per subscriber in our Triple Play business.
The following table provides revenue detail for our operating segments for the three months ended March 31, 2003 and 2002.

|                             |                    | Revenue
|---------------------------- | ------------------ | -------
|
|
|
|Triple Play Distribution(1)  |                    | 322,792
|Germany(2)                   |                    |       
|DTH                          |                    | 9,202  
|Corporate                    |                    |       
|Other(3)                     |                    | 6,471  
|                             |                    |        
|                             | Total Distribution |        
|Priority Telecom(4)          |                    | 26,604 
|UPC Media(5)                 |                    | 20,671 
|UPC Investment(6)            |                    | 123    
|Intercompany Eliminations(7) |                    | (26,763
|                             |                    |        
|                             | Total              |        
|                             |                    |        

---

38

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UPC Distribution.Revenue for UPC Distribution increased 11.6 million from 326.8 million for the three months
ended March 31, 2002 to 338.5 million for the three months ended March 31, 2003, a 3.6% increase. This increase is attributable to:



Priority Telecom.Revenue forPriority Telecomdecreased 5.5 million
from 32.1 million for the three months ended March 31, 2002 to 26.6 million for the three months ended March 31, 2003. This decrease is attributable to:



UPC Media.Revenue for UPC Media increased 2.2 million from 18.5 million for the three months ended
March 31, 2002 to 20.7 million for the three months ended March 31, 2003. This increase is attributable to:



Intercompany eliminations.Intercompany eliminations decreased by 4.5 million from 31.3 million for the three
months ended March 31, 2002 to 26.8 million for the three months ended March 31, 2003. The intercompany elimination of 26.8 million for the three months ended
March 31, 2003, relates to inter-divisional revenue that is received byPriority Telecom, UPC Media, and UPC Distribution.



39

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Operating Expenses

Operating expenses include direct costs and costs relating to network operations, customer operations, customer care, billing and collecting, broadcasting,
programming, content and franchise fees. The following table shows the operating expenses for three months ended March 31, 2003 and 2002.

|                               |                    | Operating Expenses
|------------------------------ | ------------------ | ------------------
|
|
|
|Germany(1)                     |                    |                  
|Distribution excluding Germany |                    | 161,327           
|                               |                    |                   
|                               | Total Distribution |                   
|Priority Telecom(2)            |                    | 15,058            
|UPC Media(3)                   |                    | 6,906             
|UPC Investment(4)              |                    |                  
|Intercompany Eliminations      |                    | (24,868           
|                               |                    |                   
|                               | Total              |                   
|                               |                    |                   

---

Operating
expenses decreased 29.6 million, or 15.7%, from 188.0 million for the three months ended March 31, 2002 to 158.4 million for the three months ended
March 31, 2003. This decrease is attributable to:



40

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Selling, General & Administrative Expenses

Selling, general and administrative expenses ("SG&A expenses") include costs relating to human resources, IT, general services, management, finance, legal, and
marketing. SG&A expenses also include stock-based compensation charges.

|                               |                    | Selling General & Administrative Expenses
|------------------------------ | ------------------ | -----------------------------------------
|
|
|
|Germany(1)                     |                    |                                         
|Distribution excluding Germany |                    | 75,694                                   
|                               |                    |                                          
|                               | Total Distribution |                                          
|Priority Telecom(2)            |                    | 8,946                                    
|UPC Media(3)                   |                    | 11,300                                   
|UPC Investment(4)              |                    | 293                                      
|Stock-based compensation       |                    | 3,893                                    
|Intercompany Eliminations      |                    | (2,044                                   
|                               |                    |                                          
|                               | Total              |                                          
|                               |                    |                                          

---

SG&A
expenses decreased 12.2 million, or 11.0%, from 110.3 million for the three months ended March 31, 2002 to 98.1 million for the three months ended
March 31, 2003. This decrease is attributable to:



41

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Adjusted EBITDA

We refer to our segment information in the accompanying notes to the unaudited condensed consolidated financial statements for a definition of Adjusted EBITDA and
a reconciliation of total Adjusted EBITDA to consolidated net income (loss).

Adjusted
EBITDA increased 51.7 million, for the three months ended March 31, 2003 compared to the three months ended March 31, 2002 primarily due to increased
revenues, improved gross margin and continued cost control across all our operating segments. The following table provides Adjusted EBITDA detail for our operating segments.

|                            |                    | Adjusted EBITDA |        
|--------------------------- | ------------------ | --------------- | -------
|
|
|
|Triple Play Distribution(1) |                    | 113,098         |        
|Germany(2)                  |                    |                |        
|DTH                         |                    | 1,216           |        
|Corporate                   |                    | (17,861         | )      
|Other(3)                    |                    | 5,139           |        
|                            |                    |                 |        
|                            | Total Distribution |                 | 101,592
|                            |                    |                 |        
|Priority Telecom(4)         |                    | 2,601           |        
|UPC Media(5)                |                    | 2,465           |        
|UPC Investment(6)           |                    | (170            | )      
|                            |                    |                 |        
|                            | Total              |                 | 106,488
|                            |                    |                 |        

---

UPC Distribution.Adjusted EBITDA for UPC Distribution increased 36.4 million, or 55.9%, from 65.2 million for
the three months ended March 31, 2002 to 101.6 million for the three months ended March 31, 2003. This movement is attributed to:



42

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Priority Telecom.Adjusted EBITDA forPriority Telecomimproved by
7.3 million from negative 4.7 million for the three months ended March 31, 2002 to positive 2.6 million for the three months ended March 31, 2003. This movement is
attributable to:



UPC Media.Adjusted EBITDA for UPC Media improved by 8.0 million from negative 5.6 million for the three months
ended March 31, 2002 to positive 2.5 million for the three months ended March 31, 2003. This movement is attributable to:



Depreciation and Amortization

During the three months ended March 31, 2003, our depreciation and amortization expense decreased 6.0 million to 166.6 million from
172.6 million for the three months ended March 31, 2002, a 3.5% decrease is due to the deconsolidation of UPC Germany as of August 1, 2002.

Interest Income

During the three months ended March 31, 2003, interest income decreased 2.4 million to 3.6 million from 6.0 million, a 40.4% decrease.
The decrease primarily resulted from decreased cash balances.

Interest Expense

During the three months ended March 31, 2003, interest expense, including interest expense related party, decreased 147.8 million to
82.4 million, from 230.2 million during the three months ended March 31, 2002, a 64.2% decrease. This decrease was primarily due to the cessation of accruing interest on our
senior notes and accreting interest on our senior discount notes on December 3, 2002, when we filed a petition of relief under Chapter 11 of the U.S. Bankruptcy Code in accordance with SOP
907. Should our

43

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restructuring
(as detailed above) be successful, these notes will be exchanged for equity in New UPC. In addition, the decrease in interest expense is attributable to an increase of the euro against
the U.S. dollar.

|                       |                    | For the Three Months Ended March 31, |        
|---------------------- | ------------------ | ------------------------------------ | -------
|
|
|Cash Current Pay:      |                    |                                      |        
|                       | Bank               |                                      | (66,449
|                       | Senior Notes       |                                      |       
|                       |                    |                                      |        
|                       |                    | (66,449                              | )      
|                       |                    |                                      |        
|Non-Cash Accretion:    |                    |                                      |        
|                       | Discount Notes     |                                      | (12,693
|                       | Exchangeable Loan  |                                      |       
|                       | Deferred Financing |                                      | (3,235 
|                       |                    |                                      |        
|                       |                    | (15,928                              | )      
|                       |                    |                                      |        
|Total Interest Expense |                    | (82,377                              | )      
|                       |                    |                                      |        

Foreign Exchange Gain (Loss)

Foreign exchange gain (loss) and other expense reflect a gain of 133.4 million for three months ended March 31, 2003 as compared to a loss of
56.1 million for three months ended March 31, 2002. The gain during 2003 was primarily a result of a significant foreign exchange gain on our dollar denominated senior notes as the euro
strengthened against the U.S. dollar.

Other Income (Expense)

The other income of 66.5 million for the three months ended March 31, 2003, relates primarily to the gain on the Tevel transaction (see
Note 4 of our consolidated financial statements). The other expense of 62.4 million for the three months ended March 31, 2002, consist of a gain relating to the restructuring and
cancellation of costs associated with excess capacity of certainPriority Telecomvendor contracts of 124.5 million and a loss of
177.8 million in connection with the mark-to-market valuations of our cross currency and interest rate derivative contracts from period to period.

Reorganization Expenses, Net

In connection with the Chapter 11 Case, we are required to prepare our consolidated financial statements as of December 31, 2002, in accordance with
Statement of Position 907, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code ("SOP 907"), issued by the American Institute of Certified Public
Accountants. The reorganization expenses for the three months ended March 31, 2003 included professional fees of 7.6 million.

Share in Results of Affiliated Companies, Net

For the three months ended March 31, 2003, our share in net losses of affiliated companies decreased 18.8 million to 2.5 million from
21.3 million for the three months ended March 31, 2002, a 88.3% decrease. The decrease is primarily due to our investments in PrimaCom and SBS. No losses being recorded for PrimaCom
during the first three months of 2003, as we had completely written off our investment in PrimaCom at June 30, 2002. Our losses in SBS decreased during 2003 as SBS showed improved financial
results compared to 2002.

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Cumulative Effect of Change in Accounting Principle

Effective January 1, 2002, we adopted SFAS 142, which establishes that goodwill and intangible assets with indefinite lives will not be amortized,
but will be tested for impairment on an annual basis and whenever indicators of impairment arise. The adoption of SFAS 142 on January 1, 2002, resulted in a cumulative decrease of income
of 1,498.9 million and a cumulative decrease of net goodwill of 1,498.9 million during the three months period ended March 31, 2002. The amount of net loss as shown for the first
quarter of 2002 has been restated to include the effect of adoption of SFAS 142 of January 1, 2002. The following table represents the cumulative effect of change in accounting principle
by reporting unit:

|      |                 | For the Three Months
Ended March 31, 2002 |         
|----- | --------------- | ----------------------------------------- | --------
|
|      | The Netherlands |                                           | (491,737
|      | Czech Republic  |                                           | (98,463 
|      | Norway          |                                           | (43,572 
|      | Hungary         |                                           | (56,071 
|      | France          |                                           | (178,692
|      | Poland          |                                           | (409,906
|      | Sweden          |                                           | (189,447
|      | Other           |                                           | (30,983 
|      |                 |                                           |         
|Total |                 | (1,498,871                                | )       
|      |                 |                                           |         

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Liquidity and Capital Resources

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



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 holding company levels 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 and the terms of such financing were acceptable to us.

In
addition, we have financed our systems from our UPC Distribution Bank Facility 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.

In
2003 and thereafter, we anticipate that the sources of capital possibly available to us will include working capital and operating cash flows, proceeds from the disposal of
non-core investments, 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 recapitalization satisfactorily and are able to implement a rationalization of our non-core investments and
continue to improve our operating performance, we believe that our existing cash balances, 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. Should our planned debt restructuring and recapitalization be unsuccessful or our operating results fall behind our current business
plan, there will be uncertainty whether we have sufficient funds to meet our planned capital expenditures and/or existing debt commitments and it will be doubtful we are 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
and the UPC Distribution Facility may be accelerated at any time, subject, in the case of the Exchangeable Loan, and the UPC Distribution 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.

46

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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                       |  | 59,535                
|Long term debt                        |  | 8,028,715             
|Operating Leases                      |  | 50,432                
|Programming and satellite commitments |  | 41,242                
|Purchase commitments                  |  | 32,771                
|                                      |  |                       
|Total Contractual Cash                |  | 8,212,695             
|                                      |  |                       

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. Should our planned debt
restructuring be successful, our senior and senior discount notes, to which these indentures apply, will be exchanged for equity in New UPC.

Sources of Capital

We had approximately 248.8 million of cash and cash equivalents on hand as of March 31, 2003. Of our 248.8 million of cash and cash
equivalents on hand, USD 107.0 million is held by UPC Polska, our Polish subsidiary, and, as a result of the limitations imposed by the indentures governing the UPC Polska Notes, is limited in
its utilization. Our ability to access our borrowing capacity at the holding company and subsidiary level was restricted or eliminated as a result of the payment defaults under our senior notes in the
first twelve months of 2002 and the first quarter of 2003. To date, our principal sources of capital have been debt and equity capital raised at our holding company level and debt securities and bank
debt issued or borrowed by subsidiaries. As of the date of the filing, we have no restrictions to make additional drawings under 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 resulted in a reduced capital expenditure program for 2002 and 2003, as we focused 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

47

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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 2003, we plan a slight increase on capital expenditures. Customer premise equipment ("CPE") costs decreased in 2002 and are expected to decrease further based on current
prices, which are negotiated centrally, and continue to decrease as market rates for such equipment continue to fall. In addition, tighter field controls have been implemented leading to higher rates
of CPE retrieval.

We
expect that network and upgrade capital expenditure will also see a reduction as we are limiting additional network investment primarily to that needed to cover maintenance and costs
necessary to support expansion of services. We expect our existing network to largely cope with the anticipated increase in traffic. In addition, we plan to limit new build expenditures primarily to
these areas where essential franchise commitments require investment and to limit additional upgrade investment until such a time that existing upgraded areas are fully serviced, although in certain
areas of Eastern Europe, we are upgrading our network to launch internet services.

Statements of Cash Flows

As of March 31, 2003 we had cash and cash equivalents of 248.8 million, a decrease of 6.2 million from 255.1 million as of
December 31, 2002. As of March 31, 2002 we had cash and cash equivalents of 641.2 million, a decrease of 213.8 million from 855.0 million as December 31,
2001.

|                                                 |  | For the Three Months
Ended March 31, |  
|------------------------------------------------ |  | ------------------------------------ | -
|
|
|Cash flows from operating activities             |  | 70,542                               |  
|Cash flows from investing activities             |  | (69,402                              | )
|Cash flows from financing activities             |  | (2,429                               | )
|Effect of exchange rates on cash                 |  | (4,934                               | )
|                                                 |  |                                      |  
|Net decrease in cash and cash equivalents        |  | (6,223                               | )
|Cash and cash equivalents at beginning of period |  | 255,062                              |  
|                                                 |  |                                      |  
|Cash and cash equivalents at end of period       |  | 248,839                              |  
|                                                 |  |                                      |  

For the three months period ended March 31, 2003

Principal sources of cash during the three month period ended March 31, 2003, included 70.5 million from operating activities, 1.4 million of
proceeds from long- and short-term borrowings, and 0.7 million from investing activities.

Principal
uses of cash during the three month period ended March 31, 2003, included 3.8 million for repayment of long- and short-term debt
facilities, 42.9 million of capital expenditures, 9.1 million for purchase of derivatives, and 18.1 million for restricted cash deposited.

For the three months period ended March 31, 2002

Principal sources of cash during the three month period ended March 31, 2002, included 8.0 million of dividends received, and proceeds of
0.7 million from long- and short-term debt facilities.

Principal
uses of cash during the three month period ended March 31, 2002, included 61.5 million for operating activities, 102.0 million for capital expenditures,
24.1 million for acquisitions, and 31.9 million for the repayment of long- and short-term debt facilities.

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New Accounting Principles

In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, Consolidation of Variable Interest
Entitiesan Interpretation of ARB No. 51("FIN 46"). FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the
entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN 46 is effective immediately for variable interest entities created or acquired after January 31, 2003. It applies in
the first fiscal year or interim period beginning after June 15, 2003 for variable interest entities created or acquired prior to February 1, 2003. We are currently evaluating the
potential impact, if any, the adoption of FIN 46 will have on our financial position and results of operations.

Item 3.    Quantitative and Qualitative Disclosure About Market Risk

Investment Portfolio

As of March 31, 2003, we had cash and cash equivalents of approximately 248.8 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 are subject to interest
rate risk and foreign exchange fluctuations (with respect to amounts invested in currencies outside the European Monetary Union). However, we do not expect any material losses with respect to our
investment portfolio.

Credit Risk

We monitor the financial risk of our trade counter parties. Subject to a materiality test, new vendors go through a credit check before a contract is awarded.
Periodical financial analyses are made of a group of vendors that provide material proprietary services or products. As of March 31, 2003, we believe our portfolio of these vendors as a whole
meets our internal criteria for acceptability.

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.

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. 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

49

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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.

The
table below provides information about UPC's and its consolidated subsidiaries' foreign currency risk for cash, which is denominated in foreign currencies outside of the European
Monetary Union as of March 31, 2003. The information is presented in Euro equivalents, as the Euro is our reporting currency.

|                          |  | Amount Outstanding
as of March 31, 2003
|------------------------- |  | ---------------------------------------
|
|
|Cash and Cash Equivalents |  |                                        
|USD Cash                  |  | 129,653                                

We
are risk averse towards foreign currency risk and therefore actively seek to manage our foreign currency risk by entering into hedge instruments where 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 we refer to Note 8 of our audited consolidated financial statements for the year ended
December 31, 2002, as included in our form 10-K. The interest rates of the notes are included in the interest rate sensitivity tables to which we refer.

The
table below provides information about our foreign currency exchange risk for debt, which is denominated in foreign currencies outside of the European Monetary Union as of
March 31, 2003, including cash flows, based on the expected repayment date and related weighted-average interest rates for debt. The instruments' actual cash flows are denominated in foreign
currency. The information is presented in Euro equivalents, which is our reporting currency and is based on classification of

50

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indebtedness
in our consolidated financial statements for the three months ended March 31, 2003. Contractual maturities of the indebtedness differ from the information shown in the tables.

|                                               |  | Amount Outstanding as of March 31, 2003 |  | Expected Repayment as of March 31, 2003
|---------------------------------------------- |  | --------------------------------------- |  | ---------------------------------------
|
|
|Dollar Denominated Facilities                  |  |                                         |  |                                        
|UPC Senior Notes due 2009(1)                   |  | 700,313                                 |  | 63,028                                 
|UPC Senior Notes due 2007(1)                   |  | 156,223                                 |  | 12,498                                 
|UPC Senior Notes due 2009(1)                   |  | 219,090                                 |  | 19,718                                 
|UPC Senior Notes due 2010(1)                   |  | 209,909                                 |  | 18,892                                 
|UPC Senior Discount Notes due 2009(1)          |  | 552,443                                 |  | 40,548                                 
|UPC Senior Discount Notes due 2009(1)          |  | 341,633                                 |  | 26,259                                 
|UPC Senior Discount Notes due 2010(1)          |  | 678,455                                 |  | 58,790                                 
|UPC Senior Notes due 2010(1)                   |  | 519,910                                 |  | 46,972                                 
|PCI Notes                                      |  | 13,340                                  |  | 13,340                                 
|UPC Polska 1998 Senior Discount Notes          |  | 175,918                                 |  | 47,636                                 
|UPC Polska 1999 Senior Discount Notes          |  | 163,876                                 |  | 45,344                                 
|UPC Polska 1999 Series C Senior Discount Notes |  | 19,128                                  |  | 7,282                                  
|Exchangeable Loan(1)                           |  | 861,581                                 |  | 861,581                                

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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. 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, where possible, our interest rate exposure through the use of these instruments.

For
descriptions of our senior notes, senior discount notes and the Exchangeable Loan we refer to Note 8 of our audited consolidated financial statements for the year ended
December 31, 2002, as included in our form 10-K.

51

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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, 2003, 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 and is based on classification of
indebtedness in our consolidated financial statements for the three months ended March 31, 2003. Contractual maturities of the indebtedness differ from the information shown in the table.

|                                                          |                                       | Amount Outstanding
as of March 31, 2003 |           | Expected Repayment as of March 31,
|--------------------------------------------------------- | ------------------------------------- | --------------------------------------- | --------- | ----------------------------------
|
|
|Fixed and Variable Rate Facilities                        |                                       |                                         |           |                                   
|Fixed rate UPC Senior Notes due 2009(1)                   |                                       | 700,313                                 |           | 63,028                            
|                                                          | Average interest rate                 |                                         | 10.875    | %                                 
|Fixed rate UPC Senior Notes due 2007(1)                   |                                       | 69,166                                  |           | 5,533                             
|                                                          | Average interest rate                 |                                         | 10.875    | %                                 
|Fixed rate UPC Senior Notes due 2009(1)                   |                                       | 69,774                                  |           | 5,582                             
|                                                          | Average interest rate                 |                                         | 11.250    | %                                 
|Fixed rate UPC Senior Notes due 2009(1)                   |                                       | 213,057                                 |           | 17,045                            
|                                                          | Average interest rate                 |                                         | 10.875    | %                                 
|Fixed rate UPC Senior Discount Notes due 2009(1)          |                                       | 552,433                                 |           | 40,548                            
|                                                          | Average interest rate                 |                                         | 12.500    | %                                 
|Fixed rate UPC Senior Discount Notes due 2009(1)          |                                       | 144,410                                 |           | 10,175                            
|Average interest rate                                     |                                       | 13.375                                  | %         | 88.600                            
|Fixed rate UPC Senior Discount Notes due 2009(1)          |                                       | 341,633                                 |           | 26,259                            
|                                                          | Average interest rate                 |                                         | 13.375    | %                                 
|Fixed rate UPC Senior Notes due 2007(1)                   |                                       | 156,223                                 |           | 12,498                            
|                                                          | Average interest rate                 |                                         | 10.875    | %                                 
|Fixed rate UPC Senior Notes due 2009(1)                   |                                       | 219,090                                 |           | 19,718                            
|                                                          | Average interest rate                 |                                         | 11.250    | %                                 
|Fixed rate UPC Senior Discount Notes due 2010(1)          |                                       | 678,455                                 |           | 58,790                            
|                                                          | Average interest rate                 |                                         | 13.750    | %                                 
|Fixed rate UPC Senior Notes due 2010(1)                   |                                       | 209,909                                 |           | 18,892                            
|                                                          | Average interest rate                 |                                         | 11.500    | %                                 
|Fixed rate UPC Senior Notes due 2010(1)                   |                                       | 519,910                                 |           | 46,792                            
|                                                          | Average interest rate                 |                                         | 11.250    | %                                 
|Fixed rate UPC Senior Notes due 2010(1)                   |                                       | 145,748                                 |           | 11,660                            
|                                                          | Average interest rate                 |                                         | 11.250    | %                                 
|Fixed rate PCI Notes                                      |                                       | 13,340                                  |           | 13,340                            
|                                                          | Average interest rate                 |                                         | 9.875     | %                                 
|Fixed rate UPC Polska 1998 Senior Discount Notes          |                                       | 175,918                                 |           | 47,636                            
|                                                          | Average interest rate                 |                                         | 14.500    | %                                 
|Fixed rate UPC Polska 1999 Senior Discount Notes          |                                       | 163,876                                 |           | 45,344                            
|                                                          | Average interest rate                 |                                         | 14.500    | %                                 
|Fixed rate UPC Polska 1999 Series C Senior Discount Notes |                                       | 19,128                                  |           | 7,282                             
|                                                          | Average interest rate                 |                                         | 7.000     | %                                 
|Fixed rate Exchangeable Loan(1)                           |                                       | 861,581                                 |           | 861,581                           
|                                                          | Average interest rate                 |                                         | 6.000     | %                                 
|Variable rate UPC Distribution Bank Facility              |                                       | 3,127,759                               |           | 3,127,759                         
|                                                          | EURIBOR/USDLIBOR +0.75%4%            |                                         |           |                                   
|                                                          | Average interest rate                 |                                         | 8.060     | %                                 
|Capital lease obligations                                 |                                       | 49,718                                  |           | 49,718                            
|                                                          | Average interest rate                 |                                         | Various   |                                   
|Other debt                                                |                                       | 17,863                                  |           | 17,863                            
|                                                          | Average interest rate                 |                                         | Various   |                                   
|                                                          |                                       |                                         |           |                                   
|                                                          | Total debt                            |                                         | 8,449,304 |                                   
|                                                          |                                       |                                         |           |                                   
|Short term debt                                           |                                       |                                         |           |                                   
|Operating leases                                          |                                       |                                         |           |                                   
|Programming and satellite commitments                     |                                       |                                         |           |                                   
|Purchase commitments                                      |                                       |                                         |           |                                   
|                                                          |                                       |                                         |           |                                   
|                                                          | Total commitments and short term debt |                                         |           |                                   
|                                                          |                                       |                                         |           |                                   
|                                                          | Total debt and commitments            |                                         |           |                                   
|                                                          |                                       |                                         |           |                                   

---

52

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Equity Prices

As of March 31, 2003, we are exposed to equity price fluctuations related to our investments in equity securities. Our investment in UGC Holdings 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 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.

We
evaluate our investments in publicly traded securities accounted for under the equity method for impairment in accordance with APB 18 and SAB 59. Under APB 18, a loss in value of an
investment accounted for under the equity method, which is other than a temporary decline, should be recognized
as a realized loss, establishing a new carrying value for the investment. Factors we consider in making this evaluation include: the length of time and the extent to which the market value has been
less than cost, the financial condition and near-term prospects of the issuer, including cash flows of the investee and any specific events which may influence the operations of the issuer
and the intent and ability of us to retain our investments for a period of time sufficient to allow for any anticipated recovery in market value. A current fair value of an investment that is less
than its carrying amount may indicate a loss in value of the investment.

|            |  | Number of Shares |  | Fair Value as of
March 31, 2003
|----------- |  | ---------------- |  | -------------------------------
|
|United      |  | 5,569,240        |  | 15,618                         
|PrimaCom AG |  | 4,948,039        |  | 1,781                          
|SBS         |  | 6,000,000        |  | 78,061                         

As
of March 31, 2003, we are also exposed to equity price fluctuations related to our debt that 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. The information is presented in Euro equivalents, which is our reporting currency and is based on
classification of indebtedness in our consolidated financial statements for the three months ended March 31, 2003. Contractual maturities of the indebtedness differ from the information shown
in the table.

|                     |                | Amount Outstanding
as of March 31, 2003 |  |         |  |        
|-------------------- | -------------- | --------------------------------------- |  | ------- |  | -------
|
|
|
|
|Exchangeable Loan(1) |                | 861,581                                 |  | 861,581 |  | 861,581
|                     | 6.0% per annum |                                         |  |         |  |        

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Cross-Currency and Interest Rate Swaps

We entered into an interest rate swap in respect of 1,725 million of the UPC Distribution Bank Facility to fix the EURIBOR portion of the interest
calculation at 4.5475% for the period ending April 15, 2003. This swap qualifies as an accounting cash flow hedge as defined by SFAS 133. Accordingly, the changes in fair value of this
instrument are recorded through other comprehensive income in the consolidated statement of shareholders' equity. As per April 15, 2003, the interest rate swap expired and ceased to exist. In
the first quarter of 2003, we have bought protection on the interest rate exposure on the Euro denominated bank indebtedness for 2003 and 2004. As a result, the net rate (without the applicable

53

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margin)
is capped at 3% for an amount totaling 2.7 billion. The changes in fair value of these caps are recorded through other income in the consolidated statement of operations.

The
consolidated balance sheet reflects these instruments as derivative assets or liabilities as appropriate.

Item 4.    Controls and Procedures

(a)Evaluation of disclosure controls and procedures.



(b)Changes in internal controls.



54

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PART IIOTHER INFORMATION

Item 1.    Legal Proceedings

For information regarding developments in certain legal proceedings to which the Company or any of its subsidiaries is a party, see Notes 8 and 15 to our
condensed consolidated financial statements included elsewhere herein.

Item 2.    Changes in Securities and Use of Proceeds

None.

Item 3.    Defaults upon Senior Securities

For information regarding the defaults on our senior securities, see Note 2 to our condensed consolidated financial statements included elsewhere herein.

Item 4.    Submission of Matters to a Vote of Security Holders

For information regarding submission of matters to a vote of security holders, see Note 2 to our condensed consolidated financial statements included
elsewhere herein.

Item 5.    Other information

Summary Operating Data

In the tables below, the "UPC Paid In Ownership" column shows the percentage we own of the operating systems in which we have an interest. The operating data set
forth below reflect the aggregate statistics of the operating systems in which we have an ownership interest.

|                 |                 | As at March 31, 2003
|---------------- | --------------- | --------------------
|
|Multi Channel TV |                 |                     
|                 | Norway          |                     
|                 | Sweden          |                     
|                 | Belgium         |                     
|                 | France          |                     
|                 | The Netherlands |                     
|                 | Austria         |                     
|                 |                 |                     
|                 |                 | Total Western Europe
|                 |                 |                     
|                 | Poland          |                     
|                 | Hungary         |                     
|                 | Czech Republic  |                     
|                 | Romania         |                     
|                 | Slovak Republic |                     
|                 |                 |                     
|                 |                 | Total Eastern Europe
|                 |                 |                     
|                 |                 | Total               
|                 |                 |                     

---

55

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|                    |                   | As at March 31, 2003     
|------------------- | ----------------- | -------------------------
|
|Cable Telephony     |                   |                          
|                    | Norway            |                          
|                    | France            |                          
|                    | The Netherlands   |                          
|                    | Austria           |                          
|                    |                   |                          
|                    |                   | Total cable telephony    
|                    |                   |                          
|Non-cable Telephony |                   |                          
|                    | Czech Republic(4) |                          
|                    | Hungary(4)        |                          
|                    |                   |                          
|                    |                   | Total non-cable telephony
|                    |                   |                          
|                    |                   | Total                    
|                    |                   |                          

---

|         |                 | As at March 31, 2003
|-------- | --------------- | --------------------
|
|Internet |                 |                     
|         | Norway          |                     
|         | Sweden          |                     
|         | Belgium         |                     
|         | France          |                     
|         | The Netherlands |                     
|         | Austria         |                     
|         |                 |                     
|         |                 | Total Western Europe
|         |                 |                     
|         | Poland          |                     
|         | Hungary         |                     
|         | Czech Republic  |                     
|         | Slovak Republic |                     
|         |                 |                     
|         |                 | Total Eastern Europe
|         |                 |                     
|         |                 | Total               
|         |                 |                     

---

56

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Residential Revenue Generating Units

The operating data set forth below reflect the aggregate statistics of the operating systems in which we have an ownership interest. Revenue Generating Units, or
("RGUs"), is separately an Analog Basic Subscriber, Digital Subscriber, DTH Subscriber, Residential Telephony Subscriber or Broadband Internet Subscriber. A home may contain one or more RGUs. For
example, if a residential customer in our Dutch system subscribed to our analog cable service digital cable service, telephone service and high-speed internet service, the customer would
constitute four RGUs.

|              |                 | As at
March 31,
2003
|------------- | --------------- | --------------------
|Total RGUs(1) |                 |                     
|              | Norway          |                     
|              | Sweden          |                     
|              | Belgium         |                     
|              | France          |                     
|              | The Netherlands |                     
|              | Austria         |                     
|              |                 |                     
|              |                 | Total Western Europe
|              |                 |                     
|              | Poland          |                     
|              | Hungary         |                     
|              | Czech Republic  |                     
|              | Romania         |                     
|              |                 |                     
|              | Slovak Republic |                     
|              |                 |                     
|              |                 | Total Eastern Europe
|              |                 |                     
|              |                 | Total               
|              |                 |                     

---

57

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Item 6.    Exhibits and Reports on Form 8-K

|     |  |                                                                                                    
|---- |  | ---------------------------------------------------------------------------------------------------
|(a)  |  | Exhibits                                                                                           
|31.1 |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|31.2 |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|32.1 |  | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2 |  | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|(b)  |  | Reports on Form 8-K filed during the Quarter                                                       

|Date of Report    |  | Date of Event     |  | Item Reported                                                                                                                                                                                                                                                                         
|----------------- |  | ----------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|January 8, 2003   |  | January 8, 2003   |  | Item 5 & 7Announcement that on January 8, 2003, the United States Bankruptcy Court approved the second amended disclosure statement for UPC's pending Chapter 11 Bankruptcy case.                                                                                                    
|January 10, 2003  |  | January 9, 2003   |  | Item 5 & 7Announcement that on January 9, 2003, UPC and New UPC filed a second amended plan or reorganization and related second amended disclosure statement with the United States Bankruptcy Court and submitted a revision to the draft plan
of compulsory composition (Akkoord).
|January 15, 2003  |  | January 9, 2003   |  | Item 5 & 7Correction of certain information in the second amended disclosure statement dated January 7, 2003, filed by UPC to UPC'ss Report on Form 8-K filed on January 8, 2003.                                                                                                    
|January 28, 2003  |  | January 27, 2003  |  | Item 7 & 9Announcement that on January 27, 2003, UPC filed with the United States Bankruptcy Court its monthly unaudited parent only operating report for the period from December 3, 2003 to December 31, 2002.                                                                     
|February 14, 2003 |  | February 12, 2003 |  | Item 7 & 9Announcement that on February 12, 2003, UPC filed a motion with the United States Bankruptcy Court for an order authorizing the transfer of shares of SBS of UPC and the sale of SBS shares to United.                                                                     
|February 20, 2003 |  | February 18, 2003 |  | Item 7 & 9Announcement that on February 18, 2003, UPC filed with the United States Bankruptcy Court its monthly unaudited parent only operating report for the period from January 1, 2003 to January 31, 2003.                                                                      
|February 21, 2003 |  | February 20, 2003 |  | Item 5 & 7Announcement that on February 21, 2003, the United States Bankruptcy Court confirmed the second amended plan of reorganization, dated January 7, 2003, as modified, filed by UPC and New UPC.                                                                              
|                  |  |                   |  |                                                                                                                                                                                                                                                                                       

58

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|March 3, 2003  |  | March 3, 2003  |  | Item 5 & 7Announcement that on March 3, 2003, UPC's creditors voted in favour of the compulsory composition, theAkkoord.                                                             
|-------------- |  | -------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|March 14, 2003 |  | March 13, 2003 |  | Item 5 & 7Announcement that on March 13, 2003, the Dutch Bankruptcy Court ratified theAkkoordsubject to an appeal period.                                                            
|March 25, 2003 |  | March 21, 2003 |  | Item 5 & 7Announcement that on March 21, 2003, InterComm Holding, L.L.C. and three of its affiliates filed an appeal against the Dutch Bankruptcy Court's ratification of theAkkoord.
|March 31, 2003 |  | March 31, 2003 |  | Item 7 & 9Announcement that on March 31, 2003, United issued a press release on its operating and financial results for the fourth quarter and year ended December 31, 2002.         

59

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

| |  | UGC EUROPE, INC.a Delaware corporation
| |  | --------------------------------------
| |  | By:                                   
| |  | By:                                   

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