<PAGE>

================================================================================
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000.

                                       OR

   [ ] TRANSITION REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES
                                EXCHANGE ACT 1934

        FROM THE TRANSITION PERIOD FROM _____________ TO _____________

                        COMMISSION FILE NUMBER 000-22877

                              @ ENTERTAINMENT, INC.
             (Exact Name of Registrant as Specified in Its Charter)

            DELAWARE                                       06-1487156
 (State or Other Jurisdiction of                           (I.R.S. Employer
 Incorporation of Organization)                            Identification No.)

4643 ULSTER STREET
SUITE 1300
DENVER, COLORADO                                           80237
(Address of Principal Executive Offices)                   (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:        (303)770-4001

Indicate by check (X) 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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days      Yes  X       No
                                          ----        ----

The number of shares outstanding of @ Entertainment, Inc.'s common stock as of
June 30, 2000, was:

           Common Stock                                1,000

<PAGE>



                              @ ENTERTAINMENT, INC.

                                 FORM 10-Q INDEX

                    FOR QUARTERLY PERIOD ENDED JUNE 30, 2000

<TABLE>
<CAPTION>

                                                                                             PAGE NO.
<S>                                                                                             <C>
PART I     FINANCIAL INFORMATION
           Item 1. Financial Statements
                     @ Entertainment
                        Consolidated Balance Sheets.......................................       2-3
                        Consolidated Statements of Operations..............................      4
                        Consolidated Statements of Comprehensive Loss......................      5
                        Consolidated Statements of Cash Flows..............................      6
                        Notes to Consolidated Financial Statements........................       7-12

           Item 2. Management's Discussion and Analysis of
                        Financial Condition and Results of Operations.....................       13-21

           Item 3. Quantitative and Qualitative Disclosures About Market Risk.............       21

PART II    OTHER INFORMATION

             Item 1. Legal Proceedings.....................................................      22

             Item 2. Changes in Securities and Use of Proceeds.............................      22

             Item 3. Defaults Upon Senior Securities.......................................      22

             Item 4. Submission of Matters to a Vote of Security Holders...................      22

             Item 5. Other Information.....................................................      22

             Item 6. Exhibits and Reports on Form 8-K......................................      22

</TABLE>

                                       1
<PAGE>



                              @ ENTERTAINMENT, INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>

                                                                                JUNE 30,          DECEMBER 31,
                                                                                  2000                1999
                                                                             ----------------    --------------
                                                                             (UNAUDITED)
                                                                                      (IN THOUSANDS)
<S>                                                                              <C>              <C>
Current assets:
      Cash and cash equivalents                                                   $ 16,093         $ 35,520
      Trade accounts receivable, net of allowance for doubtful accounts
           of $4,177 in 2000 and $3,090 in 1999                                     13,081           12,808
      Programming and broadcast rights                                               8,835            7,200
      VAT recoverable                                                                4,049            9,623
      Prepayments                                                                    3,566            1,883
      Other current assets                                                           1,647            1,162
                                                                           ---------------- ----------------
           Total current assets                                                     47,271           68,196
                                                                           ---------------- ----------------
Property, plant and equipment:
      Cable television systems assets                                              124,710          123,845
      D-DTH, transmission and production equipment                                 131,961           82,327
      Construction in progress                                                       9,245            7,400
      Vehicles                                                                       1,740            1,943
      Other                                                                         16,613           15,871
                                                                           ---------------- ----------------
                                                                                   284,269          231,386
      Less accumulated depreciation                                                (31,882)         (12,602)
                                                                           ---------------- ----------------
           Net property, plant and equipment                                       252,387          218,784

Inventories for construction                                                         6,526            5,511
Intangibles, net                                                                   854,691          906,987
Investments in affiliated companies                                                 18,916           19,393
                                                                           ---------------- ----------------

           Total assets                                                         $1,179,791       $1,218,871
                                                                           ================ ================

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.



                                       2
<PAGE>



                              @ ENTERTAINMENT, INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>

                                                                                 JUNE 30,       DECEMBER 31,
                                                                                   2000             1999
                                                                            ----------------- ---------------
                                                                              (UNAUDITED)
                                                                                      (IN THOUSANDS)
<S>                                                                               <C>               <C>
Current liabilities:
    Accounts payable and accrued expenses                                          $ 103,013        $ 72,963
    Accrued interest                                                                     236             243
    Deferred revenue                                                                   7,132           4,009
                                                                            ----------------- ---------------
       Total current liabilities                                                     110,381          77,215
                                                                            ----------------- ---------------

Long-term liabilities:
    Notes payable and accrued interest to UPC                                        290,721         220,149
    Notes payable                                                                    334,329         314,547
                                                                            ----------------- ---------------
       Total liabilities                                                             735,431         611,911
                                                                            ----------------- ---------------

Commitments and contingencies (note 6)

Stockholder's equity:
    Common stock, $.01 par value; 1,000 shares authorized, shares issued
        and outstanding 1,000 as of June 30, 2000 and December 31, 1999                    -               -
    Paid-in capital                                                                  824,462         812,549
    Accumulated other comprehensive loss                                            (104,976)        (61,412)
    Accumulated deficit                                                             (275,126)       (144,177)
                                                                            ----------------- ---------------
          Total stockholder's equity                                                 444,360         606,960
                                                                            ----------------- ---------------

          Total liabilities and stockholder's equity                             $ 1,179,791     $ 1,218,871
                                                                            ================= ===============
</TABLE>




     See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>



                              @ ENTERTAINMENT, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                             SUCCESSOR         PREDECESSOR         SUCCESSOR       PREDECESSOR
                                                              (NOTE 2)           (NOTE 2)           (NOTE 2)          (NOTE 2)
                                                           --------------    ---------------     ---------------  --------------
                                                             THREE MONTHS ENDED JUNE 30,           SIX MONTHS ENDED JUNE 30,
                                                           ----------------------------------    --------------------------------
                                                               2000               1999              2000              1999
                                                          ----------------    --------------    --------------    --------------
                                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                              <C>               <C>               <C>               <C>
Revenues                                                         $ 30,116          $ 21,056          $ 56,790          $ 39,855

Operating expenses:
   Direct operating expenses                                       26,001            40,984            57,887            59,001
   Selling, general and administrative expenses                    17,420            21,589            29,980            37,209
   Depreciation and amortization                                   26,418            13,294            52,464            22,699
                                                          ----------------    --------------    --------------    --------------
Total operating expenses                                           69,839            75,867           140,331           118,909
                                                          ----------------    --------------    --------------    --------------
   Operating loss                                                 (39,723)          (54,811)          (83,541)          (79,054)

Interest and investment income                                        321               919               640             2,413
Interest expense                                                  (18,208)          (12,532)          (34,537)          (24,377)
Equity in (losses)/profits of affiliated companies                    162            (1,555)               38              (530)
Foreign exchange loss net                                          (7,225)             (951)           (9,617)           (1,989)
Non-operating expense                                                (128)                -              (198)                -
Impairment of D-DTH equipment                                      (2,606)                -            (3,694)                -
                                                          ----------------    --------------    --------------    --------------
   Loss before income taxes                                       (67,407)          (68,930)         (130,909)         (103,537)

Income tax expense                                                     (3)               (8)              (40)              (27)
                                                          ----------------    --------------    --------------    --------------
   Net loss                                                       (67,410)          (68,938)         (130,949)         (103,564)

   Accretion of redeemable preferred stock                              -            (1,227)                -            (2,018)
                                                          ----------------    --------------    --------------    --------------

Net loss applicable to holders of common stock                  $ (67,410)        $ (70,165)        $(130,949)        $(105,582)
                                                          ================    ==============    ==============    ==============


Basic and diluted net loss per common share                           N/A           $ (2.10)              N/A           $ (3.16)
                                                          ================    ==============    ==============    ==============
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.

                                       4

<PAGE>





                              @ ENTERTAINMENT, INC.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                             SUCCESSOR (NOTE 2)   PREDECESSOR (NOTE 2)  SUCCESSOR (NOTE 2)  PREDECESSOR (NOTE 2)
                                             ------------------   --------------------  ------------------  -------------------
                                                   THREE MONTHS ENDED JUNE 30,               SIX MONTHS ENDED JUNE 30,
                                             -----------------------------------------  ---------------------------------------
                                                 2000                    1999                 2000                  1999
                                             -------------         ---------------       ---------------        -------------
                                                                              (IN THOUSANDS)
<S>                                          <C>                     <C>                 <C>                    <C>
Net loss                                     $  (67,410)             $ (68,938)            $  (130,949)           $ (103,564)
Other comprehensive income/(loss):
    Translation adjustment                   $  (42,928)             $   3,224             $   (43,564)           $  (25,955)
                                             ----------              ---------             -----------            ----------
Comprehensive loss                           $ (110,338)             $ (65,714)            $  (174,513)           $ (129,519)
                                             ==========              =========             ===========            ==========

</TABLE>


      See accompanying notes to unaudited consolidated financial statements


                                       5
<PAGE>





                              @ ENTERTAINMENT, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                         SUCCESSOR (NOTE 2)       PREDECESSOR (NOTE 2)
                                                                      ------------------------ -------------------------
                                                                       SIX MONTHS ENDED JUNE    SIX MONTHS ENDED JUNE
                                                                              30, 2000                 30, 1999
                                                                      --------------------------------------------------
                                                                                       (IN THOUSANDS)
<S>                                                                               <C>                       <C>
Cash flows from operating activities:
    Net loss                                                                      $ (130,949)               $ (103,564)
    Adjustments to reconcile net loss to
      net cash used in operating activities:
      Depreciation and amortization                                                   52,464                    22,699
      Amortization of notes payable discount and issue costs                          20,545                    16,707
      Equity in (profits)/losses of affiliated companies                                 (38)                     (530)
      Impairment of D-DTH equipment                                                    3,694
      Unrealized foreign exchange (gains) and losses                                   4,032
      Other                                                                                -                       473
      Changes in operating assets and liabilities:
        Accounts receivable                                                             (980)                     (201)
        Other current assets                                                           2,643                       977
        Programming and broadcast rights                                              (1,635)                   (3,664)
        Accounts payable                                                                (330)                   (5,789)
        Accrued interest                                                                   -                         -
        Deferred revenue                                                               3,344                     1,836
        Interest payable to UPC                                                       12,932                         -
        Other                                                                              -                         -
                                                                     ------------------------ -------------------------
             Net cash used in operating activities                                   (34,278)                  (71,056)
                                                                     ------------------------ -------------------------
Cash flows from investing activities:
        Construction and purchase of property, plant and equipment                   (50,981)                  (20,311)
        Other investments                                                                  -                    (1,753)
        Purchase of intangibles                                                       (2,603)                     (145)
                                                                     ------------------------ -------------------------
             Net cash used in investing activities                                   (53,584)                  (22,209)
                                                                     ------------------------ -------------------------
Cash flows from financing activities:
        Proceeds from issuance of notes and warrants                                       -                   109,755
        Proceeds from issuance of preferred stock and warrants                             -                    48,295
        Proceeds from issuance of common stock                                             -                     1,601
        Costs to obtain loans                                                              -                    (5,156)
        Proceeds from loans from UPC                                                  57,640                         -
        Capital increase from UPC                                                     11,913                         -
        Repayment of notes payable                                                      (763)                        -
                                                                     ------------------------ -------------------------
             Net cash provided by financing activities                                68,790                   154,495
                                                                     ------------------------ -------------------------
             Net increase/(decrease) in cash and cash equivalents                    (19,072)                   61,230
             Effect of exchange rates on cash and cash equivalents                      (355)

Cash and cash equivalents at beginning of period                                      35,520                    13,055
                                                                     ------------------------ -------------------------
Cash and cash equivalents at end of period                                          $ 16,093                  $ 74,285
                                                                     ======================== =========================
Supplemental cash flow information:
        Cash paid for interest                                                         $ 880                   $ 7,159
                                                                     ======================== =========================
        Cash paid for income taxes                                                      $ 31                      $ 53
                                                                     ======================== =========================
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.



                                       6
<PAGE>





                              @ENTERTAINMENT, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2000 AND 1999

1.       BASIS OF PRESENTATION

The information furnished by @Entertainment, Inc. and its subsidiaries
("@Entertainment" or the "Company") has been prepared in accordance with United
States generally accepted accounting principles ("U.S. GAAP") and the rules and
regulations of the Securities and Exchange Commission ("SEC"). Certain
information and footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to these rules and regulations. The
accompanying consolidated balance sheets, statements of operations, statements
of comprehensive loss and statements of cash flows are unaudited but in the
opinion of management reflect all adjustments which are necessary for a fair
statement of the Company's consolidated results of operations and cash flows for
the interim periods and the Company's financial position as of June 30, 2000.
The accompanying unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the notes
thereto included in the Company's 1999 Annual Report on Form 10-K filed with the
SEC (the "1999 Annual Report"). The interim financial results are not
necessarily indicative of the results of the full year.

2.       CONSUMMATION OF UPC TENDER OFFER AND MERGER

On June 2, 1999, the Company entered into an Agreement and Plan of Merger (the
"Merger Agreement") with United Pan-Europe Communications N.V. (`UPC'), whereby
UPC and its wholly-owned subsidiary, Bison Acquisition Corp. (`Bison'),
initiated a tender offer to purchase all of the outstanding shares of the
Company in an all cash transaction valuing the Company's shares of common stock
at $19.00 per share.

The tender offer, initiated pursuant to the Merger Agreement, closed at 12:00
midnight on August 5, 1999. On August 6, 1999, Bison reported that it had
accepted for payment a total of 33,701,073 shares of the Company's common stock
(including 31,208 shares tendered pursuant to notices of guaranteed delivery)
representing approximately 99% of the Company's outstanding shares of common
stock (the `Acquisition'). In addition, UPC acquired 100% of the outstanding
Series A and Series B 12% Cumulative Preference Shares of the Company and
acquired all of the outstanding warrants and stock options.

Also on August 6, 1999, Bison was merged with and into the Company with the
Company continuing as the surviving corporation (the `Merger'). Accordingly, the
Company became a wholly-owned subsidiary of UPC. UnitedGlobalCom, Inc. is the
majority stockholder of UPC. The Company believes that a Change of Control (as
defined in the indentures governing the @Entertainment and Poland
Communications, Inc. ("PCI") notes) occurred on August 6, 1999 as a result of
the Acquisition and Merger.

The Company prior to the Acquisition, is herein referred to as the `Predecessor'
while the Company after the Acquisition is referred to as the `Successor'.

The Acquisition was accounted for under the purchase method of accounting, with
all of the purchase accounting adjustments `pushed-down' to the consolidated
financial statements of @Entertainment. Accordingly, the purchase price was
allocated to the underlying assets and liabilities based upon their estimated
fair values and any excess to goodwill. The Company restated some of its assets
and liabilities on August 5, 1999. At that date, the notes of the Company and
PCI were restated to reflect the market value and as a result were increased by
$61.9 million and deferred financing costs of $16.1 million and deferred
revenues of $2.0 million were written down to zero. The consideration paid by
UPC for all outstanding shares, warrants and options totalled $812.5 million. At
that time the Company had negative net assets of approximately $53.3 million and
existing goodwill at net book value of $37.5 million, which was realized on
previous transactions. As a result of the above considerations, UPC realized
goodwill of approximately $979.3 million. In the second quarter 2000, this
figure increased by $12.0 million to $991.3 million due to the results of an
arbitration between the Company and Telewizyjna Korporacja Partycypacyjna
("TKP"). See Note 6 Commitments and Contingencies for a discussion of this
arbitration. As a result of the Acquisition, UPC pushed down its basis to the
Company establishing a new basis of accounting as of the Acquisition date.
@Entertainment allocated goodwill between the business segments based on the
investment model used for the acquisition.

The following pro forma condensed consolidated results for the six months ended
June 30, 2000, give effect to the Acquisition as if it had occurred at the
beginning of the period presented. This pro forma condensed consolidated
financial information does not purport to represent what the Company's results
would actually have been if such transaction had in fact occurred on such date.
The pro forma adjustments are based upon the assumptions that goodwill and the
amortization thereon would be pushed down as if the transactions had occurred at
the beginning of the period presented. Additionally, interest expense related to
the deferred financing costs was removed for each of the periods presented.
There was no tax effect from these adjustments because of the significant net
losses.


                                       7
<PAGE>

<TABLE>
<CAPTION>

                                                                SIX MONTHS ENDED JUNE    SIX MONTHS ENDED JUNE 30, 1999 (UNADITED)
                                                                 30, 2000 (UNAUDITED)
                                                                ----------------------- -----------------------------------------
<S>                                                               <C>                     <C>                 <C>
                                                                     Historical             Historical            Pro Forma
Service and other revenue                                         $            56,790     $         39,855      $        39,855
                                                                ======================  ===================  ====================
Net loss                                                          $          (130,949)    $       (103,564)     $      (133,942)
                                                                ======================  ===================  ====================

</TABLE>

3. FINANCIAL POSITION AND BASIS OF ACCOUNTING

   These consolidated financial statements have been prepared on a going concern
basis which contemplates the continuation and expansion of trading activities as
well as the realization of assets and liquidation of liabilities in the ordinary
course of business. Pay television operators typically experience losses and
negative cash flow in their initial years of operation due to the large capital
investment required for the construction or acquisition of their cable networks,
acquisition of programming rights, acquisition of reception systems for
digital direct-to-home satellite broadcast ("D-DTH") business and the
administrative costs associated with commencing operations. Consistent with
this pattern, the Company has incurred substantial operating losses since
inception. The Company expects to experience substantial operating losses and
negative cash flows for at least the next year in association with the
expansion of the D-DTH and programming businesses. As of June 30, 2000, the
Company has negative working capital and significant commitments under
non-cancelable operating leases and contracts for programming rights.
Additionally, the Company is currently and is expected to continue to be
highly leveraged. The ability of the Company to meet its debt service
obligations will depend on the future operating performance and financial
results of the Company as well as its ability to obtain additional third
party financing to support the planned expansion, as well as obtaining
additional financing from its parent, UPC. The Company's current cash on hand
will be insufficient to satisfy all of its commitments and to complete its
current business plan for its D-DTH, cable and programming business.

    Management of the Company believes that significant opportunities exist
for pay television providers capable of delivering high quality,
Polish-language programming on a multi-channel basis. As such, the Company
has focused its financial and business efforts toward its position in the
cable, D-DTH and programming markets. The Company's business strategy is
designed to increase its market share and subscriber base and to maximize
revenue per subscriber. To accomplish its objectives and to capitalize on its
competitive advantages, the Company intends to (i) develop and control the
content of programming on its cable and D-DTH systems; (ii) increase its
distribution capabilities through internal growth and through acquisitions;
(iii) implement additional revenue generating services; (iv) control its
management of subscribers by using advanced integrated management information
systems; and (v) establish Wizja TV as the leading brand name in the Polish
pay television industry; and (vi) implement additional revenue generating
services over its cable and D-DTH systems. If the Company's plans or
assumptions change, if its assumptions prove inaccurate, if it consummates
unanticipated investments in or acquisitions of other companies, if it
experiences unexpected costs or competitive pressures, or if existing cash,
and projected cash flow from operations prove to be insufficient, the Company
may need to obtain greater amounts of additional financing. While it is the
Company's intention to enter only into new financing or refinancing that it
considers advantageous, there can be no assurance that such sources of
financing would be available to the Company in the future, or, if available,
that they could be obtained on terms acceptable to the Company. The Company
is also dependent on its parent, UPC, to provide financing to achieve the
Company's business strategy. UPC has declared that it will continue to
financially support @ Entertainment and its subsidiaries as a going concern,
and accordingly enable @ Entertainment and its subsidiaries to meet their
financial obligations if and when needed, for the period at least through
January 31, 2001.

Several of the Company's Polish subsidiaries have statutory shareholders' equity
less than the legally prescribed limits because of accumulated losses. The
management of these companies will have to make decisions on how to increase the
shareholders' equity to be in compliance with the Polish Commercial Code. The
Company is currently considering several alternatives, including the conversion
of intercompany debt into equity, in order to resolve these deficiencies.

4.      CAPITAL CONTRIBUTIONS

In the second quarter of 2000, UPC made a capital contribution of $11.9
million and additional loans of $10.6 million to the Company to fund the
Company's activities. On June 30, 2000, the Company had, on a consolidated
basis, approximately $625.0 million aggregate principal amount of
indebtedness outstanding, of which approximately $290.7 million was owed to
UPC. All of the loans from UPC to @Entertainment bear interest at 9.75% per
annum and mature in 2029. Loans from UPC with an aggregate principal amount
of $150 million have been subordinated to the Company's Senior Discount Notes
due 2008, Series C Senior Discount Notes and Senior Discount Notes due 2009.

5.       RECLASSIFICATIONS

Certain amounts have been reclassified in the corresponding period's unaudited
consolidated financial statements to conform to the unaudited consolidated
financial statement presentation for the three and six months ended June 30,
2000.

6.       PER SHARE INFORMATION

Basic loss per share has been computed by dividing net loss attributable to
common stockholders by the weighted average number of common shares outstanding
during the period. The effect of potential common shares (stock options and
warrants outstanding) on earnings per share, i.e. dilutive loss per share is the
same as basic loss per share.

The following table provides a reconciliation of the numerator and denominator
in the loss per share calculation:


                                       8
<PAGE>

<TABLE>
<CAPTION>


                                                  SUCCESSOR (NOTE 2) PREDECESSOR (NOTE 2) SUCCESSOR (NOTE 2) PREDECESSOR (NOTE 2)
                                                  ------------------ -------------------  ------------------ --------------------
                                                  THREE MONTHS ENDED THREE MONTHS ENDED   SIX MONTHS ENDED   SIX MONTHS ENDED
                                                   JUNE 30, 1999       JUNE 30, 1999       JUNE 30, 1999      JUNE 30, 1999
                                                     (UNAUDITED)        (UNAUDITED)          (UNAUDITED)       (UNAUDITED)
                                                  -------------------------------------------------------------------------------
<S>                                                    <C>                 <C>                <C>                <C>
Net loss attributable to common
  stockholders (in thousands)                          (67,410)            (70,165)           (130,949)          (105,582)
Basic weighted average number of common
  shares outstanding (in thousands)                       N/A               33,408               N/A               33,385
                                                   ----------------- -------------------  ------------------ --------------------
Loss per share-basic and diluted                          N/A              $ (2.10)              N/A              $ (3.16)
                                                   ================== ===================  ================== ====================


</TABLE>



7.       COMMITMENTS AND CONTINGENCIES

PROGRAMMING, BROADCAST AND EXHIBITION RIGHTS

The Company has entered into long-term programming agreements and agreements for
the purchase of certain exhibition or broadcast rights with a number of third
party content providers for its D-DTH and cable systems. The agreements have
terms which range from one to seven years and require that the license fees be
paid either at a fixed amount payable at the time of execution or based upon a
guaranteed minimum number of subscribers connected to the system each month. At
June 30, 2000, the Company had an aggregate minimum commitment in relation to
these agreements of approximately $197,839,000 over the next seven years,
approximating $32,365,000 for the remainder of 2000, $55,679,000 in 2001,
$48,771,000 in 2002, $32,263,000 in 2003, $20,124,000 in 2004 and $8,637,000 in
2005 and thereafter.

PURCHASE COMMITMENTS

As of June 30, 2000, the Company had an aggregate minimum commitment toward the
purchase of the D-DTH reception systems from Philips Electronics B.V. of
approximately $20,000,000 through November 30, 2000.

LEASES

The Company leases transponders on the Astra satellites, D-DTH technical
equipment, conduits and several offices and warehouses. At June 30, 2000 the
Company had an aggregate minimum commitment in relation to those leases of
approximately $170,040,000 over the next seven years, approximately
$12,260,000 for the remainder of 2000, $22,990,000 in 2001, $22,850,000 in
2002, $22,782,000 in 2003, $22,507,000 in 2004 and $66,651,000 in 2005 and
thereafter.

LITIGATION AND CLAIMS

From time to time, the Company is subject to various claims and suits arising
out of the ordinary course of business. While the ultimate result of all such
matters not yet settled, is not presently determinable, based upon current
knowledge and facts, management does not expect that their resolution will have
a material adverse effect on the Company's consolidated financial position or
results of operations.

ARBITRATION RELATING TO TELEWIZYJNA KORPORACJA PARTYCYPACYJNA  ("TKP")

On April 17, 1998, the Company signed a binding letter of intent with TKP, the
parent company of Canal+ Polska, which provided for bringing together the
Company's Wizja TV programming platform and the Canal+ Polska premium pay
television channel and for the joint development and operation of a D-DTH
service in Poland. The establishment of the joint venture was subject to the
execution of definitive agreements, regulatory approvals and certain other
closing conditions.

The definitive agreements were not agreed and executed by the parties by the
date set forth in the letter of intent (the `Signature Date'). Therefore, the
Company terminated the letter of intent on June 1, 1998. TKP and its
shareholders informed the Company that they believe the Company did not
have the right to terminate the letter of intent.

Under the terms of the letter of intent, TKP was obligated to pay the Company a
$5 million break-up fee within 10 days of the Signature Date if the definitive
agreements were not executed by the Signature Date, unless the failure to obtain
such execution was caused by the Company's breach of any of its obligations
under the letter of intent. If there was any such breach by the Company, the
Company was obligated to pay TKP $10 million. However, if any breach of the
letter of intent by TKP caused


                                       9
<PAGE>

the definitive agreements not to be executed, TKP was obligated to pay the
Company a total of $10 million (including the $5 million break-up fee).

The Company demanded monies from TKP as a result of the failure to execute the
definitive agreements by the Signature Date. While the Company was waiting for
the expiration of the 10-day period for payment of the break-up fee, TKP
initiated arbitration proceedings before a three member arbitration tribunal in
Geneva, Switzerland. In their claim, TKP and its shareholders alleged that
the Company breached its obligation to negotiate in good faith and to use its
best efforts to agree and execute the definitive agreements and claimed the
Company is obligated to pay TKP $10 million pursuant to the letter of intent.
The Company answered and brought counterclaims against TKP and its shareholders.
The arbitration hearings were conducted in Geneva in June 1999. On June 26,
2000, the arbitration tribunal awarded TKP $10 million plus interest and costs
and dismissed the Company's request for damages against TKP and its
shareholders.

PCBV MINORITY STOCKHOLDER'S CLAIM

On or about July 8, 1999, certain minority shareholders ("the minority
shareholders") of Poland Cablevision (Netherlands) B.V. ("PCBV"), a subsidiary
of PCI, filed a lawsuit against the Company, @Entertainment, and certain other
defendants, in United States District Court, Southern District of Ohio, Eastern
Division, Civil Action No. C2-99-621. The relief sought by the minority
shareholders included: (1) unspecified damages in excess of $75,000, (2) an
order lifting the restrictions against transfer of shares set forth in the
Shareholders' Agreement among PCBV's shareholders, as amended (the
"Shareholders' Agreement") so that the minority shareholders could liquidate
their shares in PCBV, (3) damages in the amount of 1.7 percent of the payment
made by UPC for the shares of the Company as set forth in the Agreement and Plan
of Merger between the Company and UPC dated June 2, 1999, and (4) attorneys'
fees and costs incurred in prosecuting the lawsuit.

The amended complaint set forth eight claims for relief based on allegations
that the defendants, including the Company and PCI, committed the following
wrongful acts: (1) breached a covenant not to compete contained in the
Shareholders' Agreement relating to the shareholders of PCBV, (2) breached a
covenant in the Shareholders' Agreement requiring that any contract entered into
by PCBV with any other party affiliated with PCI be commercially reasonable or
be approved by certain of the minority shareholders, (3) breached a provision in
the Shareholders' Agreement that allegedly required co-defendant Chase
International Corp. ("CIC") to offer the minority shareholders the right to
participate in certain sales of PCBV shares and that required CIC to give
written notice of any offer to purchase the minority shareholders' shares in
PCBV, (4) breached their fiduciary duties to the minority shareholders, (5)
breached the agreement between PCBV and CIC, which allegedly limited the amount
of management fees that could be paid annually by PCBV, (6) made false and
misleading statements in various documents filed with the Securities and
Exchange Commission, (7) colluded to defraud the minority shareholders by
failing to make reference in certain Forms 8-K, 8-KA and 14D-1 to the minority
shareholders or their alleged rights and claims, (8) colluded to divert assets
of PCBV to affiliates of PCI and PCBV, including the Company, that allegedly
compete with PCI and PCBV.

On or about March 31, 2000 the parties to the lawsuit reached a settlement. In
accordance with the settlement, on June 2, 2000, Wizja TV B.V., an affiliate of
PCI, purchased approximately 1.4% of the outstanding shares of PCBV for a price
of approximately $2.2 million. The case has been dismissed and releases
exchanged.

In addition to the Ohio lawsuit, other minority shareholders of PCBV
(representing an additional approximately 6% of the shares of PCBV) have
asserted similar claims against PCI but have not yet filed suit. The
aforementioned settlement does not include the remaining minority shareholders.

8.      SEGMENT INFORMATION

The Company and its subsidiaries operate in four business segments: (1) cable
television, (2) D-DTH television, (3) programming, and (4) corporate. The
Company accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices. During
1999 and in prior years, the Company presented its operations in three
business segments: (1) cable television, (2) D-DTH television and
programming, and (3) corporate. Due to the increasing size of the D-DTH
segment, in January 2000, management decided to separate D-DTH operations
into a distinct segments and present the Company's operations in four
business segments. Certain amounts have been reclassified in the 1999
unaudited consolidated financial statements to conform to the presentation of
unaudited consolidation financial statements for the six months ended June
30, 2000.

 In addition to other operating statistics, the Company measures its financial
performance by EBITDA, an acronym for earnings before interest, taxes,
depreciation and amortization. The Company defines EBITDA to be net loss
adjusted for interest and investment income, depreciation and amortization,
interest expense, foreign currency gains and losses, equity in losses of
affiliated companies, income taxes and minority interest. The items excluded
from EBITDA are significant components in understanding and assessing the
Company's financial performance. The Company believes that EBITDA and related
measures of cash flow from operating activities serve as important financial
indicators in measuring and comparing the operating performance of media
companies. EBITDA is not a U.S. presentation of GAAP measure of loss or cash
flow from operations and should not be considered as an alternative to cash
flows from operations as a measure of liquidity.


                                       10
<PAGE>


                              SELECTED SEGMENT DATA
                     (UNAUDITED IN THOUSANDS OF US DOLLARS)

<TABLE>
<CAPTION>

                                                CABLE       D-DTH      PROGRAMMING    CORPORATE     TOTAL
                                                -----       -----      -----------    ---------     -----
<S>                                           <C>          <C>            <C>         <C>       <C>
THREE MONTHS ENDED JUNE 30, 2000
(Successor note 2)

Revenues from external customers               $ 17,177    $ 12,253      $    686      $     -   $   30,116
Intersegment revenues                                 -           -        13,316            -       13,316
Operating loss                                  (10,716)    (10,711)      (17,468)        (828)     (39,723)
EBITDA                                              381      (1,112)      (11,746)        (828)     (13,305)
Segment total assets                            497,374     376,803       291,495       14,119    1,179,791

THREE MONTHS ENDED JUNE 30, 1999 (RESTATED)
(Predecessor note 2)

Revenues from external customers               $ 15,481    $  5,406      $    169      $     -   $   21,056
Intersegment revenues                                 -           -         7,673            -        7,673
Operating loss                                   (6,116)    (29,853)      (15,742)      (3,100)     (54,811)
EBITDA                                              149     (23,982)      (14,589)      (3,095)     (41,517)
Segment total assets                            174,063      59,932        83,484       68,697      386,176

SIX MONTHS ENDED JUNE 30, 2000
(Successor note 2)

Revenues from external customers               $ 34,030    $ 21,638      $  1,122      $     -   $   56,790
Intersegment revenues                                 -           -        25,584            -       25,584
Operating loss                                  (21,173)    (23,705)      (37,519)      (1,144)     (83,541)
EBITDA                                            1,430      (5,350)      (26,013)      (1,144)     (31,077)
Segment total assets                            497,374     376,803       291,495       14,119    1,179,791

SIX MONTHS ENDED JUNE 30, 1999 (RESTATED)
(Predecessor note 2)

Revenues from external customers               $ 30,264    $  8,847      $    744      $     -     $ 39,855
Intersegment revenues                                 -           -        12,805            -       12,805
Operating loss                                  (10,380)    (40,367)      (23,546)      (4,761)     (79,054)
EBITDA                                            1,834     (32,448)      (20,988)      (4,753)     (56,355)
Segment total assets                            174,063      59,932        83,484       68,697      386,176

</TABLE>

9.       JOINT VENTURE WITH MTV

On March 1, 2000, UPC Programming B.V., an affiliate of the Company, entered
into joint a venture with MTV Networks B.V. for a 50% equity interest in MTV
Polska for the purpose of producing MTV and VH1 programming for distribution
in Poland. The Company has agreed to sell certain assets of its subsidiary,
Ground Zero Media, to UPC Programming B.V., which will in turn contribute
these assets to the joint venture. As a result of the joint venture,
MTV Polska has licensed the right to distribute the MTV and VH1 programming
in Poland to UPC Programming B.V. In turn, UPC Programming B.V. will sub
licence those carriage rights to Polska Telewizja Kablowa and UPC Broadcast
Centre Limited for distribution in Poland.

                                       11
<PAGE>




10.      BROADCASTING LICENSE

Subsequent to March 31, 2000, Polska Telewizja Cyfrowa Sp. z o.o., owned in
part by a subsidiary of the Company, filed applications with the National
Broadcast Council for broadcasting licences for Wizja Sport and Wizja Jeden .
At the same time Polska Telewizja Cyfrowa Sp. z o.o. filed another
application with the National Broadcast Council for a satellite platform
license for Wizja Sport, Wizja Jeden and certain third part programming. The
license has been approved by the National Broadcast Council but not yet
issued. Upon issuance, Polska Telewizja Cyfrowa Sp. z o.o. will be a
broadcaster under the Polish law.

11.      SUBSEQUENT EVENTS

On July 26, 2000 the Polish Ministry of Telecommunication issued a 15-year data
transmission license to Polska Telewizja Kablowa Operator Sp. z o.o., owned by
subsidiaries of the Company, authorizing that company to provide data
transmission service to its customers throughout the territory of Poland, using
its own networks and those leased from other licensed operators. This license
will allow the PTK Operator Sp. z o.o. to provide broadband internet services to
its customers.

As of June 30, 2000, about 76% of the Company's cable plant runs thorugh
conduits leased from the Polish national telephone company ("TP S.A."). If
the Company uses the cables for a purpose other than cable television, such
as data transmission, telephone, or Internet access, such use could be
considered a violation of the terms of certain conduit agreements, unless
this use is expressly authorized by TP S.A. There is no guarantee that TP
S.A. would give its approval to permit other uses of the conduits.


                                       12
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

The following discussion and analysis provides information concerning the
results of operations and financial condition of the Company. Such discussion
and analysis should be read in conjunction with the accompanying unaudited
consolidated financial statements of the Company. Additionally, the following
discussion and analysis should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
audited consolidated financial statements included in Part II of the Company's
1999 Annual Report. The following discussion focuses on material trends, risks
and uncertainties affecting the results of operations and financial condition of
the Company.

Certain statements in this Quarterly Report on Form 10-Q constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, that are not historical facts but rather reflect
the Company's current expectations concerning future results and events. The
words "believes," "expects," "intends," "plans," "anticipates," "likely,"
"will", "may", "shall" and similar expressions identify such forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company (or entities in which the Company has
interests), or industry results, to differ materially from future results,
performance or achievements expressed or implied by such forward-looking
statements.

Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this Quarterly
Report on Form 10-Q. The Company undertakes no obligation to publicly release
the result of any revisions to these forward-looking statements which may be
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events, conditions or circumstances.

The risks, uncertainties and other factors that might cause such differences
include but are not limited to: (i) general economic conditions in Poland and in
the pay television business in Poland; (ii) changes in regulations the Company
operates under; (iii) uncertainties inherent in new business strategies,
including the Company's satellite television business, new product launches and
development plans, which the Company has not used before; (iv) rapid technology
changes; (v) changes in, or failure or inability to comply with government
regulations; (vi) the development and provision of programming for new
television and telecommunications technologies; (vii) the continued strength of
competitors in the multichannel video programming distribution industry and
satellite services industry and the growth of satellite delivered programming;
(viii) future financial performance, including availability, terms and
deployment of capital; (ix) the ability of vendors to deliver required
equipment, software and services on schedule at the budgeted cost; (x) the
Company's ability to attract and hold qualified personnel; (xi) changes in the
nature of strategic relationships with joint ventures; (xii) the overall market
acceptance of those products and services, including acceptance of the pricing
of those products and services; (xiii) possible interference by satellites in
adjacent orbital positions with the satellites currently being used for the
Company's satellite television business; (xiv) acquisition opportunities; and
(xv) the Company's new ownership structure.

OVERVIEW

On June 2, 1999, the Company entered into an Agreement and Plan of Merger (the
"Merger Agreement") with United Pan-Europe Communications N.V. (`UPC'), whereby
UPC and its wholly-owned subsidiary, Bison Acquisition Corp. (`Bison'),
initiated a tender offer to purchase all of the outstanding shares of the
Company in an all cash transaction valuing the Company's shares of common stock
at $19.00 per share.

The tender offer, initiated pursuant to the Merger Agreement, closed at 12:00
midnight on August 5, 1999. On August 6, 1999, Bison reported that it had
accepted for payment a total of 33,701,073 shares of the Company's common stock
(including 31,208 shares tendered pursuant to notices of guaranteed delivery)
representing approximately 99% of the Company's outstanding shares of common
stock (the `Acquisition'). In addition, UPC acquired 100% of the outstanding
Series A and Series B 12% Cumulative Preference Shares of the Company and
acquired all of the outstanding warrants and stock options.

On August 6, 1999, Bison, UPC's wholly-owned subsidiary, was merged with and
into the Company with the Company continuing as the surviving corporation (the
"Merger"). Accordingly, the Company became a wholly-owned subsidiary of
UPC. UnitedGlobalCom, Inc. is the majority stockholder of UPC.

Until the limited launch of the Company's D-DTH business on July 1, 1998 and
subsequent full-scale launch on September 18, 1998, the Company's revenues were
derived entirely from its cable television business and programming related
thereto. The Company's revenue has increased $9.0 million or 42.7% from $21.1
million in the three months ended June 30, 1999 to $30.1 million in the three
months ended June 30, 2000 and $16.9 million or 42.4% from $39.9 million in the
six months ended June 30, 1999 to $56.8 million in the six months ended June 30,
2000. This increase was due primarily to internal growth in subscribers


                                       13
<PAGE>

through new network expansion, increases in cable subscription rates, further
development of the Wizja TV programming package and advertising sales.

Prior to June 1997, the Company's expenses were primarily incurred in connection
with its cable television business and programming related thereto. Since June
1997, the Company has been incurring, in addition to expenses related to its
cable television and programming businesses, expenses in connection with the
operation of its D-DTH business and Wizja TV.

The Company generated an operating loss of $39.7 million for the three months
ended June 30, 2000 and $83.5 million for the six months ended June 30, 2000,
primarily due to the significant costs associated with development of the
Company's D-DTH and programming businesses, promotion of those businesses and
the development, production and acquisition of programming for Wizja TV.

The Company divides operating expenses into (i) direct operating expenses, (ii)
selling, general and administrative expenses, and (iii) depreciation and
amortization. Direct operating expenses consist of programming expenses,
maintenance and related expenses necessary to service, maintain and operate the
Company's cable systems and D-DTH programming platform, billing and collection
expenses and customer service expenses. Selling, general and administrative
expenses consist principally of administrative costs, including office related
expenses, professional fees and salaries, wages and benefits of non-technical
employees, advertising and marketing expenses, bank fees and bad debt expense.
Depreciation and amortization consist of depreciation of property, plant and
equipment and amortization of intangible assets.

SEGMENT RESULTS OF OPERATIONS

The Company classifies its business into four segments: (1) cable television,
(2) D-DTH television, (3) programming, and (4) corporate. Information about the
operations of the Company in these different business segments is set forth
below based on the nature of the services offered. During 1999 and in the prior
years, the Company presented its operations in three business segments: (1)
cable television, (2) D-DTH television and programming, and (3) corporate. Due
to the increasing size of the D-DTH segment, in January 2000, management decided
to separate D-DTH operations into a distinct segment and present the Company's
operations in four business segments. Certain amounts have been reclassified in
the 1999 unaudited consolidated financial statements to conform to the
presentation of unaudited consolidated financial statements for the six months
ended June 30, 2000.

In addition to other operating statistics, the Company measures its financial
performance by EBITDA, an acronym for earnings before interest, taxes,
depreciation and amortization. The Company defines EBITDA to be net loss
adjusted for interest and investment income, depreciation and amortization,
interest expense, foreign currency gains and losses, equity in losses of
affiliated companies, income taxes and minority interest. The items excluded
from EBITDA are significant components in understanding and assessing the
Company's financial performance. The Company believes that EBITDA and related
measures of cash flow from operating activities serve as important financial
indicators in measuring and comparing the operating performance of media
companies. EBITDA is not a U.S. presentation of GAAP measure of loss or cash
flow from operations and should not be considered as an alternative to cash
flows from operations as a measure of liquidity.

The following table presents the segment results of the Company's operations for
the six months ended June 30, 2000 and 1999.


                                       14
<PAGE>



                          SEGMENT RESULTS OF OPERATIONS
                    (UNAUDITED, IN MILLIONS OF U.S. DOLLARS)

<TABLE>
<CAPTION>

                                       THREE MONTHS ENDED        THREE MONTHS ENDED      SIX MONTHS ENDED       SIX MONTHS ENDED

                                         JUNE 30, 2000             JUNE 30, 1999           JUNE 30, 2000          JUNE 30, 1999
                                          (SUCCESSOR)              (PREDECESSOR)            (SUCCESSOR)           (PREDECESSOR)
                                     -----------------------  -----------------------  ---------------------  ---------------------
<S>                                                <C>                      <C>                    <C>                    <C>
Revenues
Cable                                               17,177                   15,481                 34,030                 30,264
D-DTH                                               12,253                    5,406                 21,638                  8,847
Programming                                         14,002                    7,842                 26,706                 13,549
Corporate and Other                                      -
Intersegment elimination (1)                       (13,316)                  (7,673)               (25,584)               (12,805)
                                   ------------------------  -----------------------  ---------------------  ---------------------
TOTAL                                               30,116                   21,056                 56,790                 39,855


Operating loss
Cable                                              (10,716)                  (6,116)               (21,173)               (10,380)
D-DTH                                              (10,711)                 (29,853)               (23,705)               (40,367)
Programming                                        (17,468)                 (15,742)               (37,519)               (23,546)
Corporate and Other                                   (828)                  (3,100)                (1,144)                (4,761)
                                   ------------------------  -----------------------  ---------------------  ---------------------
TOTAL                                              (39,723)                 (54,811)               (83,541)               (79,054)


EBITDA
Cable                                                  381                      149                  1,430                  1,834
D-DTH                                               (1,112)                 (23,982)                (5,350)               (32,448)
Programming                                        (11,746)                 (14,589)               (26,013)               (20,988)
Corporate and Other                                   (828)                  (3,095)                (1,144)                (4,753)
                                   ------------------------  -----------------------  ---------------------  ---------------------
TOTAL                                               (13,305)                 (41,517)               (31,077)               (56,355)

</TABLE>

(1) Comprised of Wizja TV programming costs charged to the cable segment and
D-DTH segment by the programming segment in the six months ended June 30,
2000 and 1999.

The Company for six months ended June 30, 1999 prior to the Acquisition is
herein referred to as "Predecessor" and the Company for the six months ended
June 30, 2000 after the Acquisition is herein referred to as "Successor".

CABLE SEGMENT OVERVIEW

The Company operates the largest cable television system in Poland with
approximately 1,793,300 homes passed and approximately 1,038,300 total
subscribers as at June 30, 2000. The Company continues to realize subscriber
growth mainly through a combination of new network build-out and acquisitions.

The Company's revenues in its cable segment have been and will continue to be
derived primarily from monthly subscription fees for cable television services
and one-time installation fees for connection to its cable television networks.
The Company charges cable subscribers fixed monthly fees for their choice of
service packages and for other services, such as premium channels, tuner rentals
and additional outlets, all of which are included in monthly subscription fees.
Through its cable segment, the Company currently offers broadcast, intermediate
(in limited areas) and basic packages of cable service. At June 30, 2000,
approximately 71.7% of the Company's cable subscribers received its basic
package. Currently, almost all of the Company's cable revenue is derived from
monthly subscription fees.

During 1998 and 1999, management completed several strategic actions in support
of its business and operating strategy. On June 5, 1998, the Company began
providing the Wizja TV programming package, with its initial 11 channels of
primarily Polish-language programming, to its basic subscribers. Since that
date, the basic Wizja TV package has been expanded to 25 channels. On September
18, 1999, the Company launched a proprietary premium channel called Wizja Sport.
The Company is


                                       15
<PAGE>

planning to launch internet services on certain of its cable networks in the
coming months and has been investing in upgrading its networks to provide this
service.

CABLE TELEVISION REVENUE. Revenue increased $1.7 million or 11.0% from $15.5
million in the three months ended June 30, 1999 to $17.2 million in the three
months ended June 30, 2000 and increased $3.7 million or 12.2% from $30.3
million in the six months ended June 30, 1999 to $34.0 million in the six months
ended June 30, 2000. This increase was primarily attributable to a 5.9% increase
in the number of basic and intermediate subscribers from approximately 747,600
at June 30, 1999 to approximately 791,400 at June 30, 2000, as well as an
increase in monthly subscription rates. The increase in basic and intermediate
subscribers was primarily due to build-out of the Company's existing cable
networks.

As of June 30, 2000, about 76% of the Company's cable plant runs through
conduits leased from the Polish national telephone company ("TP S.A."). If
the Company uses the cables for a purpose other than cable television, such
as data transmission, telephone, or Internet access, such use could be
considered a violation of the terms of certain conduit agreements, unless
this use is expressly authorized by TP S.A. There is no guarantee that TP
S.A. would give its approval to permit other uses of the conduits.

Revenue from monthly subscription fees represented almost all of the Company's
cable television revenue for the three and six months ended June 30, 2000 and
1999. During the three and six months ended June 30, 2000, the Company generated
approximately $1.2 million and $2.1 million, respectively, of premium
subscription revenue as a result of providing the HBO Poland service pay movie
channel and Wizja Sport to cable subscribers as compared to $0.5 million and
$1.1 million for the same periods in 1999.

DIRECT OPERATING EXPENSES. Direct operating expenses decreased $2.2 million, or
21.0%, from $10.5 million for the three months ended June 30, 1999 to $8.3
million for the three months ended June 30, 2000, and decreased $0.7 million or
3.4% from $20.6 million in the six months ended June 30, 1999 to $19.9 in the
six months ended June 30, 2000, principally as a result of restructuring of the
programming agreements. Direct operating expenses decreased from 67.7% of
revenues for the three months ended June 30, 1999 to 48.3% of revenues for the
three months ended June 30, 2000 and decreased from 68.0% of revenues in the six
months ended June 30, 1999 to 58.5% of revenues in the six months ended June 30,
2000.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $3.7 million or 77.1% from $4.8 million for
the three months ended June 30, 1999 to $8.5 million for the three months ended
June 30, 2000 and increased $4.9 million or 62.8% from $7.8 million in the six
months ended June 30, 1999 to $12.7 million in the six months ended June 30,
2000. This increase was attributable mainly due to the cost of providing
programming guides to customers and increased selling and marketing
activities compared to the previous year.

As a percentage of revenue, selling, general and administrative expenses
increased from 31.0% for the three months ended June 30, 1999 to approximately
49.4% for the three months ended June 30, 2000 and increased from 25.7% of
revenue for the six months ended June 30, 1999 to 37.4% for the six months ended
June 30, 2000.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense rose $4.8
million, or 76.2%, from $6.3 million for the three months ended June 30, 1999 to
$11.1 million for the three months ended June 30, 2000 and increased $10.4
million or 85.2% from $12.2 million in the six months ended June 30, 1999 to
$22.6 in the six months ended June 30, 2000, principally as a result of
depreciation and amortization of additional goodwill pushed down as a result of
the Acquisition and the continued build-out of the Company's cable networks.
Depreciation and amortization expense as a percentage of revenues increased from
40.6% for the three months ended June 30, 1999 to 64.5% for the three months
ended June 30, 2000 and increased from 40.3% in the six months ended June 30,
1999 to 66.5% in the six months ended June 30, 2000.

Each of these factors contributed to an operating loss of $6.1 million, $10.7
million, for the three months ended June 30, 1999 and 2000, respectively, and
$10.4 million and $21.2 million for the six months ended June 30, 1999 and
2000, respectively.

D-DTH  SEGMENT OVERVIEW

The Company's D-DTH roll-out strategy was to lease D-DTH reception systems to
380,000 initial subscribers at promotional prices in the start-up phase of its
D-DTH service. The launch of its D-DTH service has been supported by the
Company's development of the Wizja TV programming package, which the Company
believes addresses the demand for high-quality Polish-language programming in
Poland. Between April, 1999 and November 7, 1999, the Company switched its
policy from leasing to selling DTH reception systems and sold such systems to
customers at a price substantially reduced by promotional incentives. Beginning
on November 8, 1999, the Company returned to leasing the DTH reception systems
to its customers.

As of June 30, 2000, the Company had approximately 378,200 D-DTH subscribers as
compared to 146,095 at June 30, 1999. The number of Philips Electronics B.V.
authorized electronics retailers distributing the Wizja TV package increased
from 1,152 as of June 30, 1999 to 1,339 as of June 30, 2000.

At June 30, 2000 approximately 59.7% of D-DTH subscribers received premium
service as compared to approximately 55.2% at June 30, 1999. The Company
currently provides two premium channels (1) HBO Poland Service, a
Polish-language version of HBO's premium movie channel and (2) Wizja Sport, the
Company's proprietary sport channel.

D-DTH REVENUE. Revenue increased $6.9 million or 127.8% from $5.4 million for
the three months ended June 30, 1999 to $12.3 million for three months ended
June 30, 2000 and increased $12.8 million or 145.5% from $8.8 million in the six
months ended



                                       16
<PAGE>

June 30, 1999 to $21.6 in the six months ended June 30, 2000. This increase was
primarily due to an increased number of D-DTH subscribers from 146,095 at June
30, 1999 to 378,200 at June 30, 2000.

During the three and six months ended June 30, 2000 the Company generated
approximately $2.9 million and $5.1 million of premium subscription revenue,
respectively, as a result of providing the HBO Poland service pay movie channel
and Wizja Sport to its subscribers, as compared to $1.1 million and $1.7 million
for the three and six months ended June 30, 1999, respectively.

DIRECT OPERATING EXPENSES. Direct operating expenses decreased $13.4 million,
or 59.3%, from $22.6 million for the three months ended June 30, 1999 to $9.2
million for the three months ended June 30, 2000 and decreased $7.4 million
or 29.6% from $25.0 million in the six months ended June 30, 1999 to $17.6
million in the six months ended June 30, 2000. These decreases principally
resulted from the Company switching its policy from selling to leasing its
D-DTH reception systems. Between April 1, 1999 and November 8, 1999 the
Company was selling its reception systems to customers. Beginning November 8,
1999 the Company returned to leasing its reception systems. As the reception
systems were sold on a promotional basis the Company recognized a loss of
$22.2 million in the three and six months ended June 30, 1999. Direct
operating expenses amounted to 74.8% and 81.5% of revenues for the three and
six months ended June 30, 2000, respectively, compared to 418.5% and 280.9%
of revenues for the three and six months ended June 30, 1999, respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $2.7 million or 39.3% from $6.8 million for
the three months ended June 30, 1999 to $4.1 million for the three months
ended June 30, 2000 and decreased $6.9 million or 42.3% from $16.3 million in
the six months ended June 30, 1999 to $9.4 million in the six months ended
June 30, 2000. The decrease in selling, general and administrative expenses
over the corresponding 1999 period was attributable mainly to sales and
marketing expenses associated with aggressive promotion of the Company's
D-DTH service during the six months ended June 30, 1999 as compared to the
six months ended June 30, 2000. As a percentage of revenue, selling, general
and administrative expenses amounted to approximately 125.9% and 33.3% for
the three months ended June 30, 1999 and 2000, respectively and 183.1% and
43.5% for the six months ended June 30, 1999 and 2000, respectively.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased $3.7
million or 62.7% from $5.9 million for the three months ended June 30, 1999
to $9.6 million for the three months ended June 30, 2000 and increased $10.5
million or 132.9% from $7.9 million in the six months ended June 30, 1999 to
$18.4 million in the six months ended June 30, 2000, principally as a result
of additional goodwill pushed down as a result of the Acquisition and
continued growth in D-DTH subscribers' base. Depreciation and amortization
expense as a percentage of revenues amounted to 109.3% and 78.0% for the
three months ended June 30, 1999 and 2000, respectively and 88.8% and 85.2%
for the six months ended June 30, 1999 and 2000, respectively.

Each of these factors contributed to an operating loss of $10.7 million and
$23.7 million for the three and six months ended June 30, 2000, respectively,
compared to an operating loss of $29.9 million and $40.4 million for the three
and six months ended June 30, 1999.

PROGRAMMING SEGMENT OVERVIEW

The principal objectives of the Company for the programming segment is to
develop, acquire and distribute high-quality Polish-language programming that
can be commercially exploited throughout Poland through its D-DTH and cable
television systems, and to develop and maximize advertising sales.

The Company, both directly and through other joint ventures, produces
television programming for distribution. The Company has developed a
multi-channel, primarily Polish-language programming platform under the brand
name Wizja TV. Wizja TV's current channel line-up includes three channels,
Wizja Jeden, Wizja Pogoda and Wizja Sport, that are owned and operated by the
Company, two channels, MTV Polska and VHI, that are operated as a joint
venture with MTV Networks B.V. and 20 channels that are produced by third
parties, 11 of which are broadcast under exclusive agreements for pay
television in Poland.

PROGRAMMING REVENUE. Revenue increased $6.2 million or 79.5% from $7.8 million
for the three months ended June 30, 1999 to $14.0 million for three months ended
June 30, 2000 and increased $13.2 million or 97.8% from $13.5 million in the six
months ended June 30, 1999 to $26.7 in the six months ended June 30, 2000.

The programming segment generates most of its revenue from the cable and D-DTH
segments through providing its Wizja TV programming package. The intersegment
revenue represented $7.7 million or 98.7% and $12.8 million or 94.8% for the
three and


                                       17
<PAGE>

six months ended June 30, 1999, respectively, and $13.3 million or
95.0% and $25.6 million or 95.9% for the three and six months ended June 30,
2000, respectively.

DIRECT OPERATING EXPENSES. Direct operating expenses increased $6.2 million,
or 39.7%, from $15.6 million for the three months ended June 30, 1999 to
$21.8 million for the three months ended June 30, 2000 and increased $19.8
million or 75.6% from $26.2 million in the six months ended June 30, 1999 to
$46.0 million in the six months ended June 30, 2000. These increases
principally were the result of a $16.8 million increase in programming costs
and maintenance expenses associated with the satellite up-link and studio
facility located in Maidstone, United Kingdom, and costs associated with the
lease of three transponders on the Astra satellites which provide the
capability to deliver the Company's Polish-language programming platform to
cable and D-DTH customers in Poland. Direct operating expenses amounted to
155.7% of revenues and 172.3% of revenue for the three and six months ended
June 30, 2000, respectively, compared to 200.0% revenues and 194.1% of
revenue for the three and six months ended June 30, 1999, respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $2.9 million or 42.0% from $6.9 million for
the three months ended June 30, 1999 to $4.0 million for the three months
ended June 30, 2000 and decreased $1.7 million or 20.2% from $8.4 million in
the six months ended June 30, 1999 to $6.7 in the six months ended June 30,
2000. The decrease in selling, general and administrative expenses over the
corresponding 1999 period was attributable mainly to decrease in professional
fees associated with obtaining long-term programming contracts and
broadcast/exhibition rights. As a percentage of revenue, selling, general and
administrative expenses amounted to approximately 88.5% and 28.6% for the
three months ended June 30, 1999 and 2000 and 62.2% and 25.1% for the six
months ended June 30, 1999 and 2000, respectively.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization charges
increased $4.5 million or 375.0% from $1.2 million for the three months ended
June 30, 1999 to $5.7 million for the three months ended June 30, 2000 and
increased $8.9 million or 342.3% from $2.6 million for the six months ended
June 30, 1999 to $11.5 million for the six months ended June 30, 2000,
principally as a result of amortization of additional goodwill pushed down as
a result of the Acquisition. Depreciation and amortization expense as a
percentage of revenues amounted to 15.4% and 40.7% respectively for the three
months ended June 30, 1999 and 2000 and 19.3% and 43.1% and for the six
months ended June 30, 1999 and 2000, respectively.

Each of these factors contributed to an operating loss of $17.5 million and
$37.5 million for the three and six months ended June 30, 2000, respectively,
compared to an operating loss of $15.7 million and $23.5 million for the three
and six months ended June 30, 1999.

CORPORATE SEGMENT OVERVIEW

The Company's corporate segment consists of corporate overhead costs. The
Company continues to evaluate opportunities for improving its operations and
reducing its cost structure. Corporate expenses amounted to $0.8 million and
$1.1 million for the three and six months ended June 30, 2000, respectively
as compared to $3.1 million and $4.8 million for the corresponding periods in
1999. This reduction was primarily due to reduced activities of
@Entertainment as a corporate office as a result of the Acquisition.

NON-OPERATING RESULT

INTEREST EXPENSE. Interest expense increased $5.7 million, or 45.6%, from
$12.5 million for the three months ended June 30, 1999 to $18.2 million for
the three months ended June 30, 2000 and increased $10.1 million or 41.4%
from $24.4 million in the six months ended June 30, 1999 to $34.5 in the six
months ended June 30, 2000. Interest expense increased mainly as a result of
the additional financing from UPC for the six months ended June 30, 2000.

INTEREST AND INVESTMENT INCOME. Interest and investment income decreased $0.6
million, or 66.7%, from $0.9 million for the three months ended June 30, 1999 to
$0.3 million for the three months ended June 30, 2000 and decreased $1.8 million
or 75.0% from $2.4 million in the six months ended June 30, 1999 to $0.6 in the
six months ended June 30, 2000, primarily due to the reduction in the level of
cash used to fund the Company's operations.

EQUITY IN PROFITS OF AFFILIATED COMPANIES. The Company recorded $0.2 million of
equity in profits of affiliated companies for the three months ended June 30,
2000 compared to $1.6 million of equity in losses of affiliated companies for
the three months ended June 30, 1999 and $0.0 million of equity in losses of
affiliated companies for the six months ended June 30, 2000 compared to $0.5
million of equity in losses of affiliated companies for the six months ended
June 30, 1999.

FOREIGN EXCHANGE LOSS, NET. For the three months ended June 30, 2000, foreign
exchange loss amounted to $7.2 million, as compared to $1.0 million for the
three months ended June 30, 1999. For the six months ended June 30, 2000,
foreign exchange loss amounted to $9.6 million, as compared to $2.0 million for
the six months ended June 30, 1999. Increase in foreign exchange loss primarily
due to fluctuation of the Polish currency during the three months ended June 30,
2000.


                                       18
<PAGE>


NET LOSS. For the three months ended June 30, 1999 and 2000, the Company had net
losses of $68.9 million and $67.4 million, respectively. For the six months
ended June 30, 199 and 2000, the Company had net losses of $103.6 million and
$130.9 million, respectively. These losses were the result of the factors in the
four segments discussed above.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS. Net loss applicable to common
stockholders increased from a loss of $70.2 million for the three months ended
June 30, 1999 to a loss of $67.4 million for the three months ended June 30,
2000 and increased from a loss of $105.6 million for the six months ended June
30, 1999 to a loss of $130.9 million for the six months ended June 30, 2000 due
to the factors in the four segments discussed above.

LIQUIDITY AND CAPITAL RESOURCES

The Company has met its cash requirements in recent years primarily with (i)
capital contributions and loans from certain of the Company's principal
stockholders, (ii) borrowings under available credit facilities, (iii) cash
flows from operations, (iv) the sale of approximately $200 million of common
stock through the Company's initial public equity offering in August 1997, (v)
the sale of $252 million aggregate principal amount at the maturity of the
14 1/2% Senior Discount Notes in July 1998 with gross proceeds of approximately
$125 million, ("@Entertainment Notes"), (vi) the sale of $36,001,321 principal
amount at maturity of its Series C Senior Discount Notes in January 1999 with
gross proceeds of $9.8 million, ("Series C Notes"), (vii) the sale of its
14 1/2% Senior Discount Notes and Warrants in January 1999 with gross proceeds
of $96.1 million, ("Discount Notes") and (viii) the sale of the Series A 12%
Cumulative Preference Shares, the Series B 12% Cumulative Preference Shares
and Warrants in January 1999 with gross proceeds of $48.2 million.

Since the acquisition of all of the outstanding stock of the Company by UPC on
August 6, 1999, the Company has met its capital requirements primarily through
capital contributions and loans from UPC.

Pursuant to the indentures governing the 9 7/8% Senior Notes due 2003 ("PCI
Notes"), the @Entertainment Notes, the Series C Notes, and the Discount Notes,
the Company is subject to certain restrictions and covenants, including, without
limitation, covenants with respect to the following matters:

    a.  limitation on indebtedness;

    b.  limitation on restricted payments;

    c.  limitation on issuances and sales of capital stock of restricted
        subsidiaries;

    d.  limitation on transactions with affiliates;

    e.  limitation on liens;

    f.  limitation on guarantees of indebtedness by subsidiaries;

    g.  purchase of the notes upon a change of control;

    h.  limitation on sale of assets;

    i. limitation on dividends and other payment restrictions affecting
       restricted subsidiaries;

    j.  limitation on investments in unrestricted subsidiaries;

    k.  consolidations, mergers, and sale of assets;

    l.  limitation on lines of business; and

    m. provision of financial statements and reports.

The Company is in compliance with these covenants.

The indentures covering each of the @Entertainment Notes, Series C Notes,
Discount Notes and the PCI Notes provide that, following a Change of Control (as
defined therein), each noteholder had the right, at such holder's option, to
require the respective issuer to offer to repurchase all or a portion of such
holder's notes at the repurchase prices, described below. The Company believes
that the August 6, 1999 acquisition by UPC of the Company constituted a Change
of Control. Accordingly, Entertainment and PCI made offers to repurchase (the
"Offers") from the holders the @Entertainment Notes, Series C


                                       19
<PAGE>

Notes, Discount Notes and the PCI Notes. The Offers expired at 12:01 PM, New
York City time, on November 2, 1999.

In accordance with the terms of the indentures governing the @Entertainment
Notes, Series C Notes, Discount Notes and the PCI Notes, @Entertainment was
required to offer to repurchase the @Entertainment Notes, Series C Notes,
Discount Notes at 101% of their accreted value on the Expiration Date plus
accrued and unpaid interest and PCI was required to offer to repurchase the
PCI Notes at the purchase price 101% of principal. As of August 5, 1999,
@Entertainment had $376,943,000 aggregate principal amount at maturity of
@Entertainment Notes, Series C Notes, Discount Notes outstanding and PCI had
$129,668,000 aggregate principal amount at maturity of PCI Notes outstanding.
Pursuant to the Offers, @Entertainment purchased $49,139,000 aggregate
principal amount of @Entertainment Notes, Series C Notes, Discount Notes for
an aggregate price of $26,455,014 and PCI purchased $113,237,000 aggregate
principal amount of PCI Notes for an aggregate price of $114,369,370.

UPC financed the repurchase of the @Entertainment Notes, Series C Notes,
Discount Notes and PCI Notes and the Company's operating activities by making
loans of $217.3 million to @Entertainment in the fourth quarter of 1999.

In the first six months of 2000, UPC made a capital contribution of $11.9
million and additional loans of $57.6 million. On June 30, 2000, the Company
had, on a consolidated basis, approximately $625.0 million aggregate
principal amount of indebtedness outstanding, of which $290.7 million was
owed to UPC. All of the loans from UPC to @Entertainment bear interest at
9.75% per annum payable at maturity, and mature in 2029. Loans from UPC with
an aggregate principal amount of $150 million have been subordinated to the
@Entertainment Notes, the Series C Notes and the Discount Notes.

The Company had negative cash flows from operating activities of $34.3
million for the six months ended June 30, 2000 and $71.1 million for the six
months ended June 30, 1999, primarily due to the significant operating costs
associated with the development and launch of its D-DTH service and the Wizja
TV programming platform and due to the operating loss for the respective
quarters.

Cash used for the purchase and build-out of the Company's cable television
networks, purchase of D-DTH equipment including set top decoders, and the
purchase of other property, plant, and equipment was $51.0 million in six
months ended June 30, 2000 and, $20.3 million in six months ended June 30,
1999. The six month over six month increase primarily relates to the
Company's capital expenditures associated with the expansion of its existing
cable networks and the development of its D-DTH service.

On June 30, 2000, the Company was committed to pay at least $387.9 million in
guaranteed payments (including but not limited to payments for D-DTH
reception systems and payments of guaranteed minimum amounts due under
programming agreements and satellite transponder leases) over the next eight
years of which at least approximately $47.1 million was committed through the
end of 2000.

As of June 30, 2000, the Company has negative working capital and significant
commitments under non-cancelable operating leases and contracts for
programming rights.

The Company's cash on hand will be insufficient to satisfy all of its
commitments and to complete its current business plan for its D-DTH and
programming businesses. UPC and the Company are evaluating various
alternatives to meet the Company's capital needs. Future sources of financing
for the Company could include public or private debt or bank financing or any
combination thereof, subject to the restrictions contained in the indentures
governing the outstanding senior indebtedness of the Company, UPC, and United
GlobalCom, Inc., UPC's parent. Moreover, if the Company's plans or
assumptions change, if its assumptions prove inaccurate, if it consummates
unanticipated investments in or acquisitions of other companies, if it
experiences unexpected costs or competitive pressures, or if existing cash,
and projected cash flow from operations prove to be insufficient, the Company
may need to obtain greater amounts of additional financing. While it is the
Company's intention to enter only into new financing or refinancings that it
considers advantageous, there can be no assurance that such sources of
financing would be available to the Company in the future, or, if available,
that they could be obtained on terms acceptable to the Company. The Company
is also dependent on its parent, UPC, to provide financing to achieve the
Company's business strategy. UPC has declared that it will continue to
financially support the Company and its subsidiaries as a going concern, and
accordingly enable the Company and its subsidiaries to meet their financial
obligations if and when needed, for the period at least through January 31,
2001.

YEAR 2000 COMPLIANCE

The Company has not experienced any problems with its computer systems
relating to distinguishing twenty-first century dates from twentieth century
dates, which generally are referred to as year 2000 problems. The Company is
also not aware of any material year 2000 problems with its clients or
vendors. The Company has not incurred material expenses or experienced any
material operation disruptions as a result of any year 2000 problems.

CURRENT OR  ACCUMULATED EARNINGS AND PROFITS

For the six months ended June 30, 2000, the Company had no current or
accumulated earnings and profits. Therefore, none of the interest which accreted
during the six months ended June 30, 2000 with respect to the Company's 14 1/2%
Senior Discount Notes


                                       20
<PAGE>

due 2008, 14 1/2% Series B Discount Notes due 2008, 14 1/2% Senior Discount
Notes due 2009, 14 1/2% Series B Discount Notes due 2009 and its Series C
Senior Discount Notes will be deemed to be a `Dividend Equivalent Portion' as
such term is defined in Section 163(e)(5)(B) of the Internal Revenue Code, as
amended.

IMPACT OF NEW ACCOUNTING STANDARDS NOT YET ADOPTED

The Financial Accounting Standards Board (`FASB') recently issued Statement of
Financial Accounting Standards No. 133, `Accounting for Derivative Instruments
and Hedging Activities' (`SFAS 133'), which requires that companies recognize
all derivatives as either assets or liabilities in the balance sheet at fair
value. Under this statement, accounting for changes in fair value of a
derivative depends on its intended use and designation. In June 1999, the FASB
approved Statement of Financial Accounting Standards No. 137, "Accounting for
Derivative Instruments and Hedging Activities Deferral of Effective Date of FASB
Statement No. 133' (`SFAS 137'). SFAS 137 amends the effective date of SFAS 133,
which will apply to the Company as of the first quarter 2001. The Company is
currently assessing the effect of this new standard.

On December 3, 1999 the SEC Staff Accounting Bulletin No. 101 ("SAB 101") was
released and provides the staff's views in applying generally accepted
accounting principles to selected revenue recognition issues. On March 24 and
June 26, 2000, the staff issued the Staff Accounting Bulletin No. 101A and
No. 101B, respectively, to delay the implementation date of SAB 101, which
now will be implemented in the Company in the fourth quarter of 2000, instead
of the Company's first quarter of 2000, as originally provided in SAB 101.
The Company is currently assessing the effect of this new guidance.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

The principal market risk (i.e., the risk of loss arising from adverse changes
in market rates and prices) to which the Company is exposed is foreign exchange
rate risk from fluctuations in the Polish zloty currency exchange rate. The
Company's long term debt is primarily subject to a fixed rate, and therefore
variations in the interest rate do not have a material impact on net interest
expense.

FOREIGN EXCHANGE AND OTHER INTERNATIONAL MARKET RISKS

Operating in international markets involves exposure to movements in currency
exchange rates. Currency exchange rate movements typically affect economic
and financing growth, inflation, interest rates, governmental actions and
other factors. These changes, if material, can cause the Company to adjust
its financing and operating strategies. The discussion of changes in currency
exchange rates below does not incorporate these other important economic
factors.

International operations constitute 100% of the Company's consolidated operating
loss for the six months ended June 30, 2000. Some of the Company's operating
and financing expenses and capital expenditures are expected to continue to
be denominated in or indexed in U.S. dollars. By contrast, substantially all
of the Company's revenues are denominated in zloty. Therefore, any
devaluation of the zloty against the U.S. dollar that the Company is unable
to offset through price adjustments will require it to use a larger portion
of its revenue to service its U.S. dollar denominated obligations and
contractual commitments.

The Company estimates that a further 10% change in foreign exchange rates would
impact reported operating loss by approximately $5.1 million. In other terms a
10% depreciation of the Polish zloty and British pound against the U.S. dollar,
would result in a $5.1 million increase in the reported operating loss. This was
estimated using 10% of the Company's operating loss after adjusting for unusual
impairment and other items including U.S. dollar denominated or indexed
expenses. The Company believes that this quantitative measure has inherent
limitations because, as discussed in the first paragraph of this section, it
does not take into account any governmental actions or changes in either
customer purchasing patterns or the Company's financing or operating strategies.

The Company does not generally hedge translation risk. While the Company may
consider entering into transactions to hedge the risk of exchange rate
fluctuations, there is no assurance that it will be able to obtain hedging
arrangements on commercially satisfactory terms. Therefore, shifts in currency
exchange rates may have an adverse effect on the Company's financial results and
on its ability to meet its U.S. dollar denominated debt obligations and
contractual commitments.

Poland has historically experienced high levels of inflation and significant
fluctuations in the exchange rate for the zloty. The Polish government has
adopted policies that slowed the annual rate of inflation from approximately
250% in 1990 approximately 11.8% in 1998 and approximately 7.3% in 1999. The
rate of inflation for the six months ended June 30, 2000 was approximately
6.4%. The exchange rate for the zloty has stabilized and the rate of
devaluation of the zloty has generally decreased since 1991 and the zloty has
depreciated against the U.S. dollar by approximately 17.4% for the year ended
December 31, 1999 and 5.8% in the first six months of 2000. The Polish zloty
was released to float freely against the U.S. dollar in April 2000. Inflation
and currency exchange fluctuations may have, a material adverse effect on the
business, financial condition and results of operations of the Company.

                                       21
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in litigation from time to time in the ordinary course
of business. In management's opinion, the litigation in which the Company is
currently involved, and which has not been settled, individually and in the
aggregate, is not material to the Company's business, financial condition or
results of operations. See also Note 6 to the unaudited consolidated financial
statements, for a description of the Company's arbitration relating to TKP and
PCBV minority stockholders' claim.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS:

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION:

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

11 Statement re computation of per share earnings (contained in Note 5 to
Unaudited Financial Statements in this Quarterly Report on Form 10-Q)

Exhibit 27 - FINANCIAL DATA SCHEDULE

(b)      Reports on Form 8-K

None.


                                       22
<PAGE>

SIGNATURES

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

                                           @ ENTERTAINMENT, Inc.

                                           By: /s/ Nimrod J. Kovacs
                                           -------------------------
                                           Nimrod J. Kovacs
                                           Chief Executive Officer


                                           By: /s/ Simon Boyd
                                           ------------------------
                                           Simon Boyd
                                           Chief Financial Officer,
                                          (Principal Financial and
                                           Principal Accounting Officer)

DATE:  August 14, 2000



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