UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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

                      For the year ended December 31, 2000

                                       or

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

              For the transition period from           to
                                             ---------    ---------

                          Commission File No. 333-05017

                         United Australia/Pacific, Inc.
             (Exact name of registrant as specified in its charter)

        State of Colorado                                        84-1341958
  (State or other jurisdiction of                            (I.R.S. Employer
  incorporation or organization)                             Identification No.)

  4643 South Ulster Street, #1300
          Denver, Colorado                                          80237
(Address of principal executive offices)                          (Zip code)

       Registrant's telephone number, including area code: (303) 770-4001



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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

The  Company has no  publicly-traded  shares of capital  stock.  As of March 26,
2001, the Company had 22,961,728 shares of common stock outstanding.


<PAGE>
<TABLE>
<CAPTION>
                                                    UNITED AUSTRALIA/PACIFIC, INC.
                                                   2000 ANNUAL REPORT ON FORM 10-K

                                                          Table of Contents

                                                                                                                 Page
                                                                                                                Number
                                                                                                                ------

                                                                PART I
<S>           <C>                                                                                                 <C>
Item 1.       Business....................................................................................         2

Item 2.       Properties..................................................................................        15

Item 3.       Legal Proceedings...........................................................................        15

Item 4.       Submission of Matters to a Vote of Security Holders.........................................        15

                                                               PART II

Item 5.       Market for the Registrant's Common Equity and Related Stockholder Matters...................        16

Item 6.       Selected Financial Data.....................................................................        17

Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations.......        18

Item 7A.      Quantitative and Qualitative Disclosures about Market Risk..................................        24

Item 8.       Financial Statements and Supplementary Data.................................................        25

Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........        25


                                                               PART III

Item 10.      Directors and Executive Officers of the Registrant..........................................        26

Item 11.      Executive Compensation......................................................................        28

Item 12.      Security Ownership of Certain Beneficial Owners and Management..............................        33

Item 13.      Certain Relationships and Related Transactions..............................................        33


                                                               PART IV

Item 14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K.............................        34


</TABLE>

<PAGE>
                                     PART I

ITEM 1.  BUSINESS
-----------------

(a)  GENERAL DEVELOPMENT OF BUSINESS
     -------------------------------

United  Australia/Pacific,  Inc.  (the  "Company" or "United  A/P") is a leading
provider of pay television, telephone and Internet services in Australia and New
Zealand.  The Company,  a Colorado  corporation formed on October 14, 1994, is a
majority owned subsidiary of United Asia/Pacific  Communications,  Inc. ("UAP"),
which is an indirect wholly owned subsidiary of UnitedGlobalCom,  Inc. (together
with all of its  subsidiaries  other  than  the  Company  and its  subsidiaries,
"United").  United is a global broadband communications provider of video, voice
and data services with operations in over 26 countries  throughout the world. In
addition to the  Company,  United's  operations  include its  interest in United
Pan-Europe  Communications  N.V.  ("UPC"),  one of the  largest  pay  television
operators in Europe, as well as its other investments in Europe,  Asia and Latin
America.  As of December 31, 2000, United's networks reached almost 22.7 million
homes and served 10.5 million video  subscribers,  0.7 million  telephone access
lines and 0.5 million broadband data accounts.

In June  1999,  we and our  subsidiaries  contributed  our  interests  in Austar
Entertainment Pty Limited ("Austar"),  Saturn Communications  Limited ("Saturn")
and XYZ Entertainment Pty Limited ("XYZ  Entertainment") to United Austar,  Inc.
These interests were then contributed to Austar United  Communications  Limited,
an Australian  corporation  ("Austar United"),  in exchange for shares in Austar
United. Substantially all of our operations are conducted through Austar United,
one of the fastest growing broadband  communications  companies in Australia and
New Zealand.  Austar United  completed its initial public  offering in July 1999
(the  "Austar  United  IPO")  and is  publicly  traded on the  Australian  Stock
Exchange  under the symbol  "AUN".  As of December 31, 2000, we own 72.9% of the
ordinary  shares of Austar  United.  In March 2001,  Austar  United  announced a
A$200.0  ($111.8)  million  shareholder  rights  offering.  We have committed to
purchase our pro rata share of the shares  offered and to purchase all remaining
shares unsubscribed by the other  shareholders.  If we acquire all of the shares
in the  rights  offering,  our  interest  in  Austar  United  will  increase  to
approximately 81.0%.

Austar United's 100% owned operating company,  Austar, is the second largest pay
television  operator  in  Australia  and the largest  operator  in the  regional
Australia  market.  Austar's  service area comprises  approximately  2.1 million
homes  outside  of  the  major  capital  cities  and  represents   one-third  of
Australia's total homes.  Austar United's 100% owned  subsidiary,  Austar United
Broadband Pty Limited  ("AUB"),  established in August 1999,  launched a dial-up
Internet  service  (Austarnet)  and  a  high-speed   broadband  service  (chello
broadband)  in  Australia  in early  2000.  AUB also began to offer  interactive
television and mobile telephone  services in regional  Australia in 2000. Austar
United's  50.0% owned  subsidiary,  XYZ  Entertainment,  is the exclusive  owner
and/or  distributor of five key programming  channels in Australia to Austar and
Foxtel.  These are the two  largest  pay  television  operators  whose  combined
subscriber bases represent approximately 83.0% of all pay television subscribers
in Australia.  Austar United's wholly owned subsidiary,  Saturn, was merged with
Telstra New Zealand Limited  ("Telstra NZ") in April 2000 to form Telstra Saturn
Limited  ("TelstraSaturn").  TelstraSaturn  is the only  provider of  integrated
telephone, pay television and Internet services in New Zealand over one network.


                                       2
<PAGE>


ORGANIZATION OF THE COMPANY

The following  chart  summarizes  our  organizational  structure.  The interests
indicated  below are summaries of our approximate  direct and indirect  economic
interests  in our  principal  businesses.  Our  interest  in Austar  United  may
increase as a result of our standby commitment to purchase all of its shares not
subscribed for in the upcoming rights offering.

          ***********************************************************
          *                                                         *
          *               United Australia/Pacific, Inc.            *
          *                                                         *
          ***********************************************************
                                       *
                             100.0%    *
          ***********************************************************
          *                                                         *
          *                    United Austar, Inc.                  *
          *                                                         *
          ***********************************************************
                                       *
                              72.9%    *
          ***********************************************************
          *                                                         *
          *           Austar United Communications Limited          *
          *                    ("Austar United")                    *
          *                                                         *
          ***********************************************************
                                       *
                                       *
********************************************************************************
* Operating System            Principal Business                     Ownership *
* ----------------            ------------------                     --------- *
*                                                                              *
* Austar               Regional Australia                              100.0%  *
*                      MMDS and DTH multi-channel television                   *
*                       systems                                                *
* Austar United                                                                *
*  Broadband           Australia                                       100.0%  *
*                      Internet, telephone and interactive                     *
*                       television                                             *
*                                                                              *
* TelstraSaturn        New Zealand (Wellington/Christchurch)            50.0%  *
*                      Wireline pay television, telephone and                  *
*                       Internet systems                                       *
*                                                                              *
* XYZ Entertainment    Australian Programming                           50.0%  *
*                                                                              *
********************************************************************************

(b)  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
     ---------------------------------------------

We operate in the pay television and telecommunications industry. Our reportable
segments  are  both  by  line  of  business  (pay   television,   telephone  and
Internet/data)  and by the primary countries in which we operate - Australia and
New Zealand. For additional  information applicable to this Item, see Note 13 to
the consolidated financial statements contained in Item 14.

(c)  NARRATIVE DESCRIPTION OF BUSINESS
     ---------------------------------

OVERVIEW

We believe that we are  well-positioned  to capitalize on the increasing  demand
for pay  television,  telephone  and  Internet  services  in  Australia  and New
Zealand.  As of December 31, 2000, our pay television  operating  systems had an
aggregate of approximately 2.2 million  television homes serviceable and 442,209
subscribers,  compared to approximately 2.2 million television homes serviceable
and  398,486  subscribers  as of December  31,  1999.  During this same  period,
programming  subscribers of XYZ  Entertainment  increased to  approximately  1.1
million at December  31,  2000 from  approximately  0.9 million at December  31,
1999.

While we expect that a substantial portion of our expected growth will come from
the continued development of Austar, we are also anticipating significant growth
by our New  Zealand  pay  television  and  telecommunications  venture  which we
believe has attractive growth prospects. With the formation of TelstraSaturn, we
have plans to create a  state-of-the-art  national  broadband network which will
include  a  submarine   fiber   backbone   linking   Auckland,   Wellington  and
Christchurch.

                                       3
<PAGE>
<TABLE>
<CAPTION>
The following table sets forth certain operating data:

                                                                        As of December 31, 2000
                                     -----------------------------------------------------------------------------------------------
                                                                Homes in                     Two-way
                                     United A/P     System       Service       Homes          Homes         Basic          Basic
                                     Ownership     Ownership      Area         Passed        Passed      Subscribers    Penetration
                                     ----------    ---------   -----------   -----------   -----------   -----------   -------------
<S>                                    <C>           <C>        <C>           <C>            <C>          <C>              <C>
VIDEO:
  Austar............................   72.9%         100.0%     2,085,000     2,083,108      260,620        421,165        20.2%
  TelstraSaturn.....................   36.5%          50.0%       141,000        95,437       95,437         21,044        22.1%
                                                                ---------     ---------      -------      ---------
     Total..........................                            2,226,000     2,178,545      356,057        442,209
                                                                ---------     ---------      -------      ---------

DATA:
  TelstraSaturn.....................   36.5%          50.0%       141,000        95,437        N/A           45,146        47.3%
  Austar United Broadband...........   72.9%         100.0%     2,085,000     1,409,300        N/A           79,663         5.7%
     Total..........................                            ---------     ---------      -------      ---------
                                                                2,226,000     1,504,737        N/A          124,809
                                                                ---------     ---------      -------      ---------

PROGRAMMING:
  XYZ Entertainment (1).............   36.5%          50.0%        N/A           N/A           N/A        5,457,665          N/A
                                                                ---------     ---------      -------      ---------

                                                                     Subscribers                    Lines
                                     United A/P     System     -------------------------   -------------------------
                                     Ownership     Ownership   Residential    Business     Residential    Business
                                     ----------    ---------   -----------   -----------   -----------   -----------
TELEPHONY:
  TelstraSaturn.....................   36.5%          50.0%        32,093         1,493       37,723          4,339
  Austar United Broadband...........   72.9%         100.0%         7,626             -        7,626              -
     Total..........................                            ---------     ---------      -------      ---------
                                                                   39,719         1,493       45,349          4,339
                                                                ---------     ---------      -------      ---------


                                                                        As of December 31, 1999
                                     -----------------------------------------------------------------------------------------------
                                                                Homes in                     Two-way
                                     United A/P     System       Service       Homes          Homes         Basic          Basic
                                     Ownership     Ownership      Area         Passed        Passed      Subscribers    Penetration
                                     ----------    ---------   -----------   -----------   -----------   -----------   -------------
VIDEO:
  Austar............................   69.1%         100.0%     2,085,000     2,083,108            -        381,763        18.3%
  Saturn............................   69.1%         100.0%       141,000        87,029       87,029         16,723        19.2%
                                                                ---------     ---------      -------      ---------
     Total..........................                            2,226,000     2,170,137       87,029        398,486
                                                                ---------     ---------      -------      ---------

DATA:
  Saturn............................   69.1%         100.0%       141,000        87,029        N/A            6,772         7.8%
                                                                ---------     ---------      -------      ---------

PROGRAMMING:
  XYZ Entertainment (1).............   34.6%          50.0%        N/A           N/A           N/A        4,670,000          N/A
                                                                ---------     ---------      -------      ---------


                                                                     Subscribers                    Lines
                                     United A/P     System     -------------------------   -------------------------
                                     Ownership     Ownership   Residential    Business     Residential    Business
                                     ----------    ---------   -----------   -----------   -----------   -----------
TELEPHONY:
  Saturn............................   69.1%         100.0%        22,406           992       26,194          2,272
                                                                ---------     ---------      -------      ---------
</TABLE>

(1)  This figure represents the total estimated number of channels for which XYZ
     Entertainment customers have subscribed.

                                       4
<PAGE>


AUSTAR

Austar is the largest provider of pay television  services in regional Australia
with  a  service  area   encompassing   approximately   2.1  million  homes,  or
approximately  one-third  of  Australia's  total  homes.  Austar is the only pay
television  provider in  substantially  all of its service areas. As of December
31, 2000, Austar had 421,165 pay television subscribers (20.2% penetration). Due
to the low housing  densities that  characterize  Austar's service area,  Austar
primarily  employs digital  direct-to-home  ("DTH") satellite and wireless cable
technologies to deliver its service.  These  technologies have enabled Austar to
deploy its services quickly.

The  following  table sets forth the summary  operating  statistics  in Austar's
markets:
<TABLE>
<CAPTION>

                                                                                     As of December 31,
                                                                      -----------------------------------------------
                                                                          2000             1999             1998
                                                                      -------------    --------------   -------------
     <S>                                                                <C>               <C>             <C>
     Homes in service area:
       Metropolitan homes...........................................    1,527,000         1,527,000       1,527,000
       Non-metropolitan homes.......................................      558,000           558,000         558,000
                                                                        ---------         ---------       ---------
                                                                        2,085,000         2,085,000       2,085,000
                                                                        =========         =========       =========

     Net annual gain in basic subscribers...........................       39,402            93,042          92,516
     Total basic subscribers........................................      421,165           381,763         288,721
</TABLE>

DISTRIBUTION   SYSTEMS.   Austar  uses  both  digital  DTH  and  wireless  cable
distribution  technologies for delivery of pay television and data services.  At
present,  approximately  85.0% of Austar's  subscribers  are serviced by digital
DTH, while 15.0% receive service via wireless cable.  Austar constructs and owns
the microwave multi-point  distribution system ("MMDS") transmission  facilities
and installs and retains ownership of all customer  premises  equipment for both
its DTH and wireless cable customers.

In addition to digital DTH and wireless  cable,  Austar has  constructed a cable
network in Darwin, a market containing  approximately  29,000 serviceable homes.
Darwin is outside the satellite's  footprint and dense vegetation makes wireless
cable service impractical.

PROGRAMMING  AND PRICING.  Austar offers some of the widest range of programming
available in Australia.  Its  programming  agreements  allow Austar to establish
different service levels or tiers at multiple price points. Austar began tiering
its program  offerings in October 1998. By tiering its services,  Austar permits
its  subscribers to select  programming  that is customized to their  interests,
which we believe is a valuable tool in ensuring our product meets customer value
expectations.  Tiering also provides customers with a lower-priced basic service
that both enhances sales opportunities for additional services in the future and
helps reduce the level of customer churn.

                                       5
<PAGE>

BASIC PACKAGE:
<TABLE>
<CAPTION>

     Channel                                               Programming Genre
     -------                                               -----------------
     <S>                                                   <C>
     Disney Channel...............................         Family entertainment
     Sky News.....................................         Local and world news
     Fox Sports...................................         Sports
     Fox Sports Two...............................         Sports, including Rugby League games
     TV-1.........................................         General entertainment
     Discovery Channel............................         Documentary, adventure, history and lifestyle
     Nickelodeon/Nick at Nite.....................         Children's and family entertainment
     arena........................................         General entertainment
     Channel [V]..................................         Music video
     The Lifestyle Channel........................         Personal and home improvement
     thecomedychannel.............................         Comedy
     The Weather Channel..........................         Weather
     CNBC.........................................         International financial news
     CNN International............................         International news
     Sky Racing...................................         Live racing
     National Geographic (2)......................         Documentary
     TCM(1) (3)...................................         Library movies
     Cartoon Network (2) (3)......................         Cartoons
     Music Country................................         Country music videos
     TVSN (1).....................................         Shopping
     Austar Audio (1).............................         12 digital radio channels
     ----------------
     (1)  Not available to wireless cable subscribers.
     (2)  Limited viewing hours for wireless cable subscribers.
     (3)  These two networks share the same channel on digital DTH.

AUSTAR DELUXE(1):

     Channel                                               Programming Genre
     -------                                               -----------------

     Fx (2).......................................         General entertainment
     Fox8 (2).....................................         General entertainment
     UKTV.........................................         English general entertainment
     Hallmark.....................................         Made for TV movies
     ESPN.........................................         Sports
     C7 Sports....................................         Sports, including Australian Football League
     ---------
     (1)  Digital DTH and cable only.
     (2)  Not available to cable subscribers in Darwin.
</TABLE>

MOVIES:

      Channel                                               Programming Genre
      -------                                               -----------------

     Showtime (1).................................         Recent release movies
     Encore (1)...................................         Library movies
     Movie One (2)................................         Recent release movies
     Movie Extra (2)(3)...........................         Recent release movies
     Movie Greats (2)(3)..........................         Library movies
     ---------
     (1)  Columbia, Universal, Paramount and Fox Studios.
     (2)  Disney, MGM Warner, Dreamworks and Village Roadshow Studies.
     (3)  Not available to wireless cable subscribers.


                                       6
<PAGE>


At December 31, 2000, Austar's pricing was:

                                                                MMDS       DTH
                                                                 A$         A$
                                                               -------   -------

     Basic Service, including "the Guide".................      34.25     40.85
     Movie Network (1)....................................      12.10     12.10
     Showtime and Encore (1)..............................      12.10     12.10
     Movie One ...........................................       9.80         -
     C7 Sports ...........................................       7.60         -
     World Movies (2).....................................       6.95      6.95
     Adults Only (Pay per Night)..........................       6.95      6.95
     Main Event (Pay-per-View) (3)........................      varies per event

     ---------
     (1)  Subscribers  have the  choice of either  Showtime  and Encore or Movie
          Network.
     (2)  Not available to all wireless cable subscribers.
     (3)  Main Event  available  to digital  DTH  subscribers  but only  certain
          events are available to wireless cable subscribers.

PROGRAMMING  AGREEMENTS.  Austar's programming agreement with Foxtel provides it
with the exclusive  rights to distribute  Showtime,  Encore and TV-1 via digital
DTH and wireless cable throughout  Austar's service area until December 2006. In
addition,  Austar has an agreement with a News  Corporation  Limited  subsidiary
pursuant to which Austar has the exclusive  right to  distribute  Fox Sports and
Fox Sports Two over the same technologies throughout Austar's service area until
2006.  Austar's  programming  agreement  for  C7  Sports  provides  Austar  with
non-exclusive  Australian  Football  League  ("AFL")  coverage.  Austar has also
entered into an agreement with C&W Optus that provides Austar with non-exclusive
distribution rights for the three C&W Optus movie channels, Movie Network, Movie
Greats and Movie Extra,  until December 2006.  Austar has another agreement with
C&W Optus giving it rights to distribute additional C&W Optus programming.

Austar  has  exclusive  rights in its  service  area to  distribute  via DTH and
wireless  cable five  channels of  programming  supplied  by XYZ  Entertainment:
Discovery Channel,  Nickelodeon,  The Lifestyle Channel,  Channel [V] and arena.
The Disney  Channel is provided to Austar under a licensing  agreement that runs
until September 2005. Austar also obtains at competitive price levels additional
programming from a number of independent  sources,  including Time Warner, ESPN,
Seven Network,  National  Geographic,  Music Country and Sky Racing. The Weather
Channel,  the Adults Only  channel and certain  pay-per-view  events are sourced
from entities in which we have an ownership interest.

Austar's  rights  to  distribute  certain   programming  are  dependent  on  its
supplier's  ability to provide such programming to Austar. In the event that any
of Austar's programming suppliers are unable to supply programming to Austar, we
are confident that we will be able to secure alternative sources of programming.

MARKETING,  BILLING AND CUSTOMER  SUPPORT.  Austar has focused its marketing and
sales  efforts  to  support a  strategy  of rapid  penetration  of its  markets.
Austar's   comprehensive   marketing   and  sales   organization   consists   of
approximately  220 direct sales  representatives  and over 480 national customer
service and telemarketing  personnel at Austar's  National  Customer  Operations
Center ("NCOC").  These sales channels are supported by an integrated  marketing
program of television,  radio and print  advertising and extensive use of direct
mail.

Austar's 24 offices,  located throughout its operating area, serve its customers
in  surrounding  areas and provide Austar with a local  presence.  These offices
perform  several key  functions,  including  responding  to  customer  inquires,
booking  installations,  providing  customer  maintenance  services,  collecting
subscription fees, liaising with installation contractors and marketing Austar's
services.

Austar uses contractors to install reception equipment at the customer premises.
We believe Austar achieves  significant savings through the outsourcing of these
services.  Austar has established  installation  guidelines,  quality  assurance
standards  and training  seminars  for  installation  contractors.  In addition,
Austar's  own  installation  teams  perform  quality  assurance  checks  on  its
contractors,  as well as conduct  difficult  installations  and installations at
multiple dwelling units.

The NCOC,  which  services  all of Austar's  subscribers,  is a  technologically
advanced,   scalable,   fully  integrated   subscriber  facility  that  features
sophisticated  subscriber  management  software,  an automated response unit and
predictive dialer  technology.  It also manages Austar's digital virtual private
network.  Incoming  calls from  Austar's  service  area are directed to the NCOC

                                       7
<PAGE>


where customer service  representatives  provide sales and service  information.
The NCOC's  on-site  customer  service  professionals  undergo  training  in all
aspects of customer support to efficiently process installation  orders,  handle
customer inquiries  including  programming and technical questions and implement
Austar's  customer  retention  program,   which  includes  contacting  customers
immediately   after   installation   to  ensure   satisfaction   and  monitoring
cancellation requests.

Billing  services  are also  handled  through  the  NCOC.  Austar  bills for its
services in advance on a monthly basis.  Customers have several methods by which
they can pay including  direct debit from their bank account,  automatic  credit
card  billing,  by mail or in person at one of Austar's  local  offices,  retail
stores, or at the post office. Austar has implemented a number of procedures for
managing customers with delinquent accounts.

Austar's  monthly  churn  averaged  2.9% during 2000,  2.9% during 1999 and 3.9%
during 1998. Austar believes that this ratio is likely to decline in the future,
although  there can be no such  assurances.  Factors which Austar  believes will
contribute to the decline in customer churn include:  the continued  enhancement
of the price  value  relationship  as more  content  is added  and the  existing
content improves, the tiering of services and tailoring packages to customers, a
further  reduction in the level of product  sampling in a maturing  market,  the
introduction in 1998 of annual and six-month  subscriber  contracts and improved
customer communications combined with loyalty programs.

COMPETITION.  Austar  is  the  sole  provider  of  pay  television  services  in
substantially all of its service area. Its only major pay television  competitor
is Foxtel,  which operates a cable system in a segment of Austar's  116,000-home
Gold Coast  service  area.  As of December  31, 2000,  Austar had  approximately
29,760  subscribers  in  the  Gold  Coast.   Austar  also  experiences   limited
competition from free-to-air channels.

We do not believe that Austar's market generally has sufficient  housing density
to justify the  construction  of  competitive  cable  systems.  The  majority of
Austar's  market  consists of small cities and towns with less than 20,000 homes
and relatively low household densities of 25 to 75 homes per square kilometer as
compared to 100 to 130 homes per square kilometer in Australia's largest cities.
While  we  believe  that  household   densities  could  support  wireline  cable
construction in areas representing  approximately  20.0% of Austar's total homes
passed,  the small size of these  markets  reduces  the  attractiveness  of such
construction.  Furthermore,  Austar holds the  exclusive  satellite and wireless
cable  distribution  rights to key sports,  movie and other  programming for its
service area, thus limiting the  programming  that a satellite or wireless cable
competitor could offer in Austar's service area.

NEW BUSINESS  OPPORTUNITIES.  We are pursing new business opportunities in three
main areas (i) provision of high-speed Internet/data services, (ii) provision of
interactive television services and (iii) resale of mobile telephone services.

Austar launched  high-speed and traditional  Internet access services in markets
in early 2000 using  wireless  cable  technologies  and began  delivering  these
services  in some of its  operating  areas via  digital  DTH at the end of 2000.
Austar will  benefit  from  United's  experience  in rolling  out  Internet/data
services.  In particular,  Austar intends to use chello broadband,  the Internet
portal and content service of United's European subsidiary,  UPC, to support the
deployment of its Internet/data  offerings to its service area. These high-speed
services  provide  customers  with  downstream  transmission  speeds  (from  the
Internet  to the  subscriber)  that are much  faster  than  traditional  dial-up
modems.  We believe that the provision of  Internet/data  services  represents a
significant  market  opportunity due to the combination of substantial  consumer
demand  for  Internet  access,  the  limited  capacity  of the  public  switched
telephone network in regional Australia and the lack of a broadband alternative.
Austar also launched the resale of mobile telephone products in October 2000.

Austar has licensed an operating  system for interactive  television for digital
set-top  boxes  with Open TV,  Inc.  This  operating  system  enables  Austar to
introduce  an enhanced  electronic  programming  guide,  interactive  television
applications  and  transactional   services  such  as  home  banking  and  other
electronic commerce.  The introduction of these services should continue to help
Austar  realize its  objectives  of  increasing  revenue and  decreasing  churn.
Moreover,  these services should also generate incremental revenues with minimal
capital  expenditures  because  these  applications  utilize  existing  customer
premise equipment.

In December 2000, we opened retail stores in three cities, Maroochydore,  Cairns
and  Townsville.  These stores  provide our customers  with the  opportunity  to
experience  the latest  technology  first hand and learn more about our products
and  services.  Products  include  interactive  television,  mobile  phones  and
Internet services.

                                       8
<PAGE>


MANAGEMENT AND EMPLOYEES. Austar United and its subsidiaries' management include
seven United employees. As of December 31, 2000, Austar United had approximately
1,700 employees. A number of these employees are parties to an "award" governing
the minimum  conditions of their employment  including  probationary  periods of
employment, rights upon termination, vacation, overtime and dispute resolution.

TELSTRASATURN

TelstraSaturn is the only provider of integrated  telephone,  pay television and
Internet services in New Zealand.  These services are currently  provided in the
greater  Wellington  area over a hybrid  fiber  cable  ("HFC")  network  with an
overlay of traditional  telephone lines. Service to Christchurch was launched in
early 2001. TelstraSaturn plans to create a state-of-the-art  national broadband
network  which  will  include  a  submarine  fiber  backbone  linking  Auckland,
Wellington and Christchurch during the next five years. Austar United owns 50.0%
of  TelstraSaturn,  a joint  venture  with  Telstra.  As of December  31,  2000,
TelstraSaturn's  network  had  95,437  serviceable  homes  for  pay  television,
telephone and data. As of that date,  TelstraSaturn  had 21,044 cable television
subscribers  (22.1%  penetration),  32,093 residential  telephony  customers and
45,146 data subscribers.

TELEPHONE  SERVICES.  TelstraSaturn  offers full-feature local and long distance
telephone  services and is the only full service  telephone  provider  competing
with Telecom New Zealand ("Telecom"), the incumbent telephone provider.

     Residential Services:
     ---------------------
       Local access
       Domestic and international long distance
       Full suite of switch-based features (e.g., voicemail, call waiting, last
         number dialed, etc.)
       Traditional dial-up Internet access
       High speed cable modem service

     Business Services:
     ------------------
       Local access
       Domestic and international long distance service
       Full suite of switch-based features
       Centrex services
       High speed cable modem service
       Data services

TelstraSaturn has an interconnect  agreement with Telcom,  pursuant to which the
parties  permit calls  originating on one party's system to be terminated on the
other system.


                                       9
<PAGE>


PAY TELEVISION SERVICES. TelstraSaturn's programming strategy is to offer a wide
variety of high-quality channels at competitive prices.  TelstraSaturn  provides
its customers  both pay  television  and  free-to-air  channels and is currently
offering a single tier of service  consisting  of 28  channels.  TelstraSaturn's
standard pay television package currently consists of the following channels:
<TABLE>
<CAPTION>
     Channel                                                 Programming Genre
     -------                                                 -----------------
     <S>                                                     <C>
     TVI, TV2, TV3, TV4..................................    General entertainment (retransmitted)
     BBC World...........................................    World news
     CNBC................................................    World financial news
     CNN International...................................    World news
     MCM.................................................    Music video
     Channel V...........................................    Music video
     Discovery...........................................    Science and nature
     National Geographic.................................    Culture and nature
     Animal Planet.......................................    Animal entertainment
     TCM.................................................    Classic movies
     Cartoon Network.....................................    Children's cartoon programming
     Trackside...........................................    TAB racing
     Kidzone.............................................    Local children's programming
     Weather Channel.....................................    Live weather from NZ MetService
     Program Guide.......................................    Programming line-up
     FTV.................................................    Fashion TV
     Music Country.......................................    Country music video
     Elijah Television...................................    Non-denominational religious programming
     Worldnet............................................    U.S. information service news and science
     TelstraSaturn SportsNet.............................    Local/international sports
     TelstraSaturn Home Cinema Preview Channel...........    Pay-per-view movie previews
     TelstraSaturn Montage Channel.......................    A montage of TelstraSaturn's channels
     TelstraSaturn on Screen Guide.......................    An on-screen channel guide
     Prime Channel.......................................    General entertainment (retransmitted)
     BBC World Service...................................    BBC world service radio
</TABLE>

In addition, TelstraSaturn offers 21 channels of pay-per-view movies pursuant to
distribution   agreements  with  Hollywood  Studios,   including  Warner  Bros.,
Twentieth Century Fox, Universal Studios and Columbia TriStar. Eighteen of these
channels,  branded "Saturn Home Cinema," feature general new release and library
movies with programming  provided by four leading  Hollywood  studios.  The most
popular  movies are scheduled as "near video on demand" with  frequent  starting
times  (generally  every 15 or 30 minutes)  over  multiple  channels.  The three
remaining  channels  are adult movie  channels  and are  available to hotels and
motels only. The pay-per-view  movies are priced comparable to home video rental
rates.  TelstraSaturn has been achieving pay-per-view buy rates of 100%, i.e. an
average of at least one pay-per-view buy per subscriber per month. TelstraSaturn
is exploring the possibility of expanding its pay-per-view  offerings to include
sporting events and adult movies for its residential customers.

TelstraSaturn is currently negotiating with a number of programming providers to
expand its channel offerings.  TelstraSaturn believes that its relationship with
Austar United provides it with a competitive advantage in obtaining a wide array
of quality programming at attractive prices.

INTERNET/DATA SERVICES. Currently, TelstraSaturn offers both traditional dial-up
and high speed cable modem-based Internet access to its business and residential
customers  via  Paradise.  It also  provides a platform  for other ISPs to offer
Internet/data  services. We believe that the provision of Internet/data services
represents  significant revenue potential.  TelstraSaturn is able to offer these
Internet/data  services as part of a more attractive  bundle of services for its
customers.  This  increases  both the  take-up  rate for all of  TelstraSaturn's
services  and the  take-up  rate for  second  phone  lines,  thereby  generating
incremental revenue. It also ensures that its customers will use TelstraSaturn's
telephone network for their data traffic.

PRICING. With its unique bundle of services, TelstraSaturn can offer a number of
attractive  multiple  service  bundles,  ranging from an entry level  package of

                                       10
<PAGE>


cable television service,  plus local telephone access and free local calls, for
NZ$49.90 per month to a package of two telephone lines (free local calls), cable
television  service  and  unlimited  internet  usage  for  NZ$99.95  per  month.
TelstraSaturn is able to offer a savings of 20.0% based on a customer buying the
services  separately from multiple  providers.  These bundles are proving a very
effective  means to drive  penetration  and  increase  revenue per home.  Sky TV
("Sky"),  TelstraSaturn's primary competitor, charges subscribers a monthly rate
of  approximately  NZ$42.20 for five channels of UHF programming with a one-time
installation fee of NZ$25.00 per subscriber.  Sky's digital satellite service is
NZ$35.92 per month and has an installation fee of NZ$199.00.

MARKETING;  CUSTOMER SUPPORT.  TelstraSaturn's marketing strategy uses promotion
techniques proven in existing  subscription  television markets such as the U.S.
and Europe, including direct sales campaigns (door-to-door selling), direct mail
and   telemarketing   supported  by  a  mass  media  brand  awareness   program.
TelstraSaturn  already  enjoys very high and  positive  brand  awareness  in the
market. There is considerable  interest in purchasing its products and services.
Direct sales have proven to be the most  effective  technique in other new build
markets,  particularly  in areas  where pay  television  is in its  introductory
stage.  Each of these  techniques  aims to communicate the selling points of the
telephone service,  cable television and internet services and in particular the
advantages of purchasing multiple services from one provider. Homes are released
for marketing on a node by node basis as construction is completed, which allows
for a very targeted marketing program tailored to the unique demographic profile
of the  territory  and  enables  TelstraSaturn  to  capitalize  on  the  product
awareness  resulting  from  its  construction  efforts.   TelstraSaturn's  sales
strategy is designed  to include an  emphasis  on the  bundled  offering  and to
capitalize on the value, quality and customer service advantages associated with
a one-stop service provider.  Customer service centers are located in Wellington
and Christchurch.  The call management  technology  employed by TelstraSaturn is
scaleable  and can be  configured to support a national  network  expansion.  In
addition,  TelstraSaturn  is  currently  developing  a  sophisticated  marketing
database  to assist  the sales  force in a  targeted  sales  approach  in future
marketing campaigns.

COMPETITION.   TelstraSaturn's   major  telephone  competitor  is  Telecom,  New
Zealand's largest  telecommunications  service provider with nearly a 100% share
of local loop revenues,  75.0% of national and  international  toll revenues and
60.0% of cellular  revenues.  During 1996 and 1997,  Telecom  constructed an HFC
network to 70,000 homes in various parts of New Zealand and began offering a pay
television service. In 1998, Telecom discontinued its pay television service and
Telecom  now  appears to be pursuing an  asymmetrical  digital  subscriber  line
("ADSL") strategy for high speed internet access.

There are currently  four  broadcast  networks in New Zealand as well as several
other  free-to-air  regional  channels.  The largest  provider  of  subscription
television  services  in New  Zealand  is Sky,  which  operates  a  five-channel
encrypted  UHF  subscription  television  service  and has  recently  launched a
20-channel digital satellite service.  Sky offers a popular sports channel on an
exclusive  basis.  Telecom has entered into a resale  agreement  with Sky and is
currently  experimenting with a bundled product in competition to TelstraSaturn.
This is currently  available on a very limited basis.  TelstraSaturn has entered
into a similar resale agreement with Sky but has not offered this product as the
returns are unattractive.

MANAGEMENT  AND  EMPLOYEES.  United  has  appointed  two  of  its  employees  to
management  positions at TelstraSaturn.  As of December 3l, 2000,  TelstraSaturn
had approximately 790 full-time employees.  Substantially all of TelstraSaturn's
employees are employed under individual employment contracts.

XYZ ENTERTAINMENT

Austar  United and Foxtel  each own 50.0% of XYZ  Entertainment,  a  programming
venture that purchases,  produces, edits, packages and transmits programming for
the Australian pay television market. XYZ Entertainment  currently supplies five
channels of programming (the "XYZ Channels") in key genres to Austar and Foxtel,
Australia's  two largest pay television  operators,  for  distribution  to their
subscribers.  XYZ  Entertainment  collects a monthly fee per  subscriber.  As of
December  31,  2000,  XYZ  Entertainment   provided  programming  for  1,091,533
subscribers.

                                       11
<PAGE>


Each of the XYZ Channels is separately  managed as to product design and content
strategy  by Austar  United  or one of XYZ  Entertainment's  licensors  or joint
venture partners. The channels are:
<TABLE>
<CAPTION>
     Channel                                          Programming Genre
     -------                                          -----------------
     <S>                                              <C>
     arena........................................    Drama, comedy, general entertainment,
                                                        programming and library movies
     Channel [V]..................................    Music video with local presenters
     Discovery Channel............................    Documentary, adventure, history and lifestyle
     The Lifestyle Channel........................    Personal and home improvements
     Nickelodeon/Nick at Nite.....................    Children's educational, entertainment and
                                                        cartoons/family-oriented drama and
                                                        entertainment
     MusicMAX.....................................    Music videos
</TABLE>

MARKETING  AND  DISTRIBUTION.  XYZ  Entertainment's  goal is to acquire  quality
programming  that will engender viewer loyalty.  XYZ  Entertainment  focuses its
marketing efforts on creating,  building and supporting  channel  identification
and brand awareness.  The XYZ Channels also work closely with their distributors
on cooperative marketing efforts.

XYZ  Entertainment has granted a subsidiary of Austar United the exclusive right
to distribute  the XYZ Channels.  This  subsidiary in turn  distributes  them to
Austar and Foxtel  pursuant to  contracts  with terms  ranging  from eight to 25
years for delivery  through DTH,  wireless  cable and cable to their  respective
subscribers  bases. As a result,  the XYZ Channels are available to the majority
of Australia's  approximately six million television households.  In particular,
the cable carriage agreement with Foxtel, which expires in 2020, requires Foxtel
to carry  the XYZ  Channels  on its  basic  package  and  provides  for  minimum
subscriber guarantees.  C&W Optus also has an agreement for the DTH and wireless
cable  distribution  of the XYZ  Channels  outside  of  Austar's  service  area,
although C&W Optus has not committed to a commercial roll-out of DTH or wireless
cable services.

PRODUCTION  AND  ACQUISITION  OF  PROGRAMMING.  XYZ  Entertainment  produces  or
licenses  programming  from a wide array of suppliers for its  channels.  As the
first Australian pay television programming provider, XYZ Entertainment has long
standing  relationships  with  international  content  providers,   as  well  as
Australian programming producers and on-air personalities.  We believe that this
provides XYZ Entertainment with a significant competitive advantage in acquiring
and producing new programming for the Australian pay television market.

In July 1995, XYZ  Entertainment and Discovery Asia executed a 12-year exclusive
carriage agreement whereby a localized version of the Discovery Channel replaced
the existing documentary channel developed by XYZ Entertainment. We believe that
this arrangement  allows XYZ Entertainment to offer  subscribers  higher quality
programming at a lower cost to XYZ Entertainment.

XYZ  Entertainment  and  Nickelodeon,  a division of Viacom,  have established a
50/50  Australian  joint  venture that  produces and  distributes  an Australian
version of  Nickelodeon/Nick  at Nite, which began distribution in October 1995.
This  channel  contains  both  locally   produced  and   internationally-sourced
programming.  XYZ Entertainment  pays the joint venture a monthly per subscriber
license  distribution fee and profits of the joint venture are shared equally by
Nickelodeon and XYZ Entertainment.

Since March 1997, XYZ Entertainment has produced a music video channel,  Channel
[V].  Under a long term  agreement  with  Channel  [V] Music  Networks,  a joint
venture  between Star TV and several record  companies  including BMG, EMI, Sony
and  Warner  Music,  XYZ  Entertainment  can  use  the  Channel  [V]  trademark,
promotional  materials and management and has access to Channel [V]'s  favorable
record  programming  arrangements.  A  significant  portion of the  content  for
Channel [V] is produced locally, some of which is distributed internationally to
other Channel [V] Music Network channels.

XYZ Entertainment  produces  promotional  materials and acquires programming for
arena  and The  Lifestyle  Channel  at prices  its  management  considers  to be
favorable.  XYZ  Entertainment is pursuing supply agreements and potential joint
venture arrangements with a number of other international programming suppliers.
We  believe  there  is a  sufficient  supply  of  programming  available  to XYZ
Entertainment at competitive rates.

EMPLOYEES.  As of December 31, 2000, XYZ  Entertainment  had  approximately  100
employees.

                                       12
<PAGE>


OTHER INTERESTS

Main Event Television (formerly Content Co.) was established in August 1998 as a
joint venture among Austar (33.3%), Optus (33.3%) and Foxtel (33.3%). Main Event
Television produces Adults Only, a pay-per-night adult channel,  and Main Event,
a pay-per-view event channel, for the joint venture parties.

The Weather Channel  Australia Pty Limited  (formerly Weather 21), 100% owned by
Austar United,  is a Sydney-based  company which produces The Weather Channel in
its own  production  studio.  The Weather  Channel,  launched  in January  1999,
provides 24-hour weather coverage and is currently offered exclusively to Austar
subscribers in the basic package.

In January  2000,  AUB  acquired a 50.0%  interest in Massive  Media Pty Limited
("Massive Media").  Massive Media owns 100% of Massive  Interactive Pty Limited,
an Internet  development company, and 75.0% of Massive Technologies Pty Limited,
a software company focused on Internet applications development.

In April 2000,  Saturn  purchased  Paradise Net Limited,  an ISP that has 33,000
subscribers, primarily residential, throughout New Zealand. Paradise Net Limited
was subsequently merged into TelstraSaturn.

In April 2000, AUB purchased Artson Pty Limited, an ISP that does business under
the name "OntheNet" and has approximately 6,000 subscribers on the Gold Coast in
Queensland, Australia.

In June  2000,  AUB  acquired  certain  assets  of  Ultranet,  an ISP  that  has
approximately 5,000 subscribers in the Townsville area.

In October 2000, AUB acquired certain assets of eisa Limited,  a Melbourne based
ISP. These assets include  approximately  49,100 subscribers in metropolitan and
regional Australia.

In October 2000,  Austar  United  acquired a 51.2%  interest in TVSN.  TVSN is a
retailer of merchandise  over both the pay television and Internet  platforms in
Australia and New Zealand.  TVSN produces all of its content from its production
studio in Sydney.

After a decision in February  2000 by the  Australian  Communications  Authority
("ACA") to allow the  conversion of licenses,  Austar United paid A$43.1 ($24.9)
million to convert its five year  apparatus  licenses to fifteen  year  spectrum
licenses.

In  November  2000,   Austar  United  purchased  certain  spectrum  rights  from
Television and Radio Broadcasting Services Pty Limited ("TARBS").  This spectrum
will  give  Austar  United  bandwidth  in  several  cities  (Sydney,  Melbourne,
Brisbane,  Camberra, Adelaide and Perth) suitable for high speed broadband data,
video  (including  interactive  television)  and ultimately  voice telephony and
potentially Voice over Internet Provider ("IP") technology.

TECHNOLOGIES EMPLOYED BY THE COMPANY

We currently use three principal transmission  technologies in the deployment of
our pay television services in Australia and New Zealand. These technologies are
as follows:  (i) DTH satellite broadcast  services,  (ii) MMDS or wireless cable
and (iii)  wireline  cable or CATV,  the  technology  with which pay  television
services are most frequently  delivered in the United States.  We have carefully
evaluated the characteristics of the markets in which we are currently operating
or planning to operate pay television systems and have chosen what we believe to
be  the  most  appropriate   transmission   technology  for  each.  While  these
transmission  technologies  are, in  general,  similar  with  respect to picture
quality,  all such technologies  offer improved picture quality compared to what
has historically been offered by over-the-air broadcasters.

DTH  transmits  encoded  signals  directly  from a satellite  to a  subscriber's
premises,  where it is decoded.  Currently in  Australia,  all DTH  subscription
television  services are transmitted via the Optus Network  Satellite using High
Performance  Beams ("HP Beams")  covering  certain  geographic  areas  (commonly
referred to as a satellite  "footprint").  All of Austar's  franchise  areas are
within  the  Optus  Network  Satellite  footprint.  Since  this  signal  will be
transmitted  at a high  power  level and  frequency  utilizing  MPEG II  digital
technology,  its reception can be  accomplished  with a relatively  small (26-35
inch) dish mounted on a rooftop or in the yard for the households located within
the innermost satellite transmission footprint and with a slightly larger (35-47
inch) dish for the households located outside the innermost footprint. Austar is
using DTH  transmission  technology  for homes in its MMDS  markets that are not
reachable by its MMDS signals as well as for homes in its franchise  areas where
household densities do not support the construction of MMDS systems.

                                       13
<PAGE>


MMDS is a microwave  distribution  system for which frequency bands are utilized
for  transmission of the  programming  services.  MMDS signals  originate from a
head-end facility, which receives  satellite-delivered  programming services and
delivers such  programming  via an encoded  microwave  signal from  transmitters
located on a tower or on top of a building to a small receiving  antenna located
at a  subscriber's  premises,  where the  microwave  signals are  decoded.  MMDS
transmission  requires a clear line-of-sight  because microwave frequencies will
not pass through  obstructions;  however,  many signal blockages can be overcome
through the use of low power  signal  repeaters  which  retransmit  an otherwise
blocked  signal  over a limited  area.  The initial  construction  costs of MMDS
generally are  significantly  lower than a wireline cable or DTH system.  We are
using MMDS  transmission  technology  in Australia,  where  housing  density and
topography make MMDS the most cost effective technology.

A wireline  cable  television  system is a network  of  coaxial  or  fiber-optic
transmission  cables through which  programming is transmitted to a subscriber's
premises  from the system's  head-end  facility,  which  receives  satellite and
tape-delivered  programming.  Wireline cable television  offers a wide bandwidth
that generally allows the transmission of a larger number of channels than MMDS.
When  constructed  with a HFC  network,  as we are  doing  in New  Zealand,  the
system's  infrastructure can be used to deliver telephone and data services. The
primary  disadvantages  of a wireline  cable  network  are the  higher  costs of
construction, especially in areas of low housing density, and the length of time
required to construct the network. We are constructing wireline cable systems in
New Zealand and, due to topography  and housing  densities,  are  constructing a
wireline cable system in one market in Australia.

REGULATION

AUSTRALIA.  The provision of  subscription  television  services in Australia is
regulated  by the  Australian  federal  government  under  various  Commonwealth
statutes.  In addition,  State and Territory laws,  including  environmental and
consumer contract legislation,  may impact the construction and maintenance of a
transmission system for subscription  television services,  the content of those
services, as well as on various aspects of the subscription  television business
itself.

The Australia  Broadcasting Services Act of 1992 ("BSA") regulates the ownership
and operation of all  categories of television  and radio  services in Australia
including wireline cable, DTH, MMDS or any other means of transmission.  The BSA
regulates  subscription  television  broadcasting  services  by  requiring  each
service to have an individual  license.  Companies  associated  with Austar hold
approximately  150  television  broadcasting  licenses.  Each  license is issued
subject  to  certain  conditions.  The  government  may vary or  revoke  license
conditions or may, by written notice, specify additional conditions.

Foreign ownership of "company interests" of pay television broadcasting licenses
is limited to 20.0% by a single  foreign person and an aggregate of 35.0% by all
foreign persons. The BSA licenses used for distributing  Austar's pay television
services are held by Australian companies for the purposes of the BSA.

EMPLOYEES

The Company has no employees.  Certain  management,  technical,  administrative,
accounting,  tax, legal,  financial reporting and other services for the Company
are  currently  provided by United and UAP pursuant to the terms of a management
agreement.  In addition,  United  supplies  certain  employees to Austar United,
Austar, AUB and TelstraSaturn  pursuant to a secondment  agreement.  See Item 13
"Certain Relationships and Related Transactions."

(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
    ----------------------------------------------------------------------------

For  information  applicable  to this  Item,  see the notes to the  consolidated
financial statements contained in Item 14.


                                       14
<PAGE>


ITEM 2.  PROPERTIES
-------------------

Our executive offices are located in Denver, Colorado, in space leased by United
and provided to the Company through the UAP Management Agreement as described in
Item 13  "Certain  Relationships  and  Related  Transactions."  In  management's
opinion,  these  facilities are  sufficient to meet the current and  foreseeable
future needs of its operating companies.

Austar United and Austar lease office space in Sydney for administrative offices
and Austar has  established  four  regional  offices in leased  space in certain
areas where it has launched  service.  Austar also leases  locations for smaller
local  offices in most of its  markets  to handle  local  customer  maintenance,
marketing and installation, however, a number of these sites have been closed in
the past year.  In  addition,  Austar  leases  facilities  to house the head-end
facility and  transmitter  tower in each of its markets.  The NCOC is located in
leased  facilities in the Gold Coast.  Generally,  these Austar  facilities  are
leased with terms of three to six years, with renewal options in many instances.
Austar  believes that its leased  facilities are sufficient for its  foreseeable
needs and that it has access to a sufficient supply of additional  facilities in
its various markets, should it require more space.

In the fourth quarter of 2000, Austar agreed to enter into an agreement to lease
premises  being  built on the Gold  Coast  subject to  certain  conditions.  The
premises  will provide  facilities  for all customer  service and  technical and
administrative  staff currently located on the Gold Coast. It is anticipated the
premises will be ready for use in 2002.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

We are not a party to any material legal proceedings, nor are we currently aware
of any threatened  material legal proceedings.  From time to time, we may become
involved in litigation  relating to claims arising from operations in the normal
course of business.

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

No matters have been  submitted to a vote of security  holders during the fourth
quarter of the year ended December 31, 2000.

                                       15
<PAGE>

                                     PART II


ITEM 5.  MARKET  FOR  THE  REGISTRANT'S  COMMON  EQUITY  AND RELATED STOCKHOLDER
         MATTERS
--------------------------------------------------------------------------------

The common stock of the Company is not publicly traded.  The Company has paid no
cash  dividends  since  formation.  The  Company  is a holding  company  with no
independent  operations  of its own  and,  as  such,  its  ability  to pay  cash
dividends is dependent upon  distributions  from its operating  companies.  Such
distributions  are limited by contractual or other obligations of such operating
companies and by the Company's bond indentures.  In addition, the ability of the
operating  companies to distribute funds may be limited by the current or future
regulations of the countries in which they are located.

Austar  United's  ordinary  shares are traded on the  Australian  Stock Exchange
under the symbol  "AUN".  The  following  table  shows the range of high and low
sales prices reported on the Australian  Stock  Exchange,  since Austar United's
IPO in July 1999.
                                                               High        Low
                                                               ----        ---
Year ended December 31, 1999:
   Third Quarter (from July 1999)........................    A$5.510     A$4.460
   Fourth Quarter........................................    A$6.700     A$4.350
Year ended December 31, 2000:
   First Quarter.........................................    A$9.900     A$5.523
   Second Quarter........................................    A$8.500     A$4.850
   Third Quarter.........................................    A$6.550     A$3.900
   Fourth Quarter........................................    A$4.800     A$1.590

                                       16
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------

The following selected consolidated financial data as of and for the years ended
December  31,  2000,  1999,  1998,  1997 and 1996  have  been  derived  from the
Company's audited consolidated financial statements. The data set forth below is
qualified by reference to and should be read in  conjunction  with the Company's
audited  consolidated  financial  statements  including  the  notes  and  Item 7
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."
<TABLE>
<CAPTION>
                                                                                   For the Years Ended December 31,
                                                              ---------------------------------------------------------------------
                                                                  2000           1999           1998           1997         1996
                                                               ----------     ----------     ----------     ----------   ----------
                                                                         (In thousands, except share and per share amounts)
<S>                                                            <C>            <C>            <C>            <C>          <C>
Statement of Operations Data:
  Revenue....................................................  $  177,313     $  151,722     $   89,819     $   68,961   $   24,977
  Operating expense..........................................    (155,716)      (118,731)       (71,149)       (52,703)     (22,865)
  Selling, general and administrative expense................     (77,709)       (76,348)       (55,434)       (53,312)     (34,041)
  Depreciation and amortization..............................    (105,899)      (104,720)       (97,140)       (80,802)     (36,269)
                                                               ----------     ----------     ----------     ----------   ----------
    Operating loss...........................................    (162,011)      (148,077)      (133,904)      (117,856)     (68,198)
  Gain on issuance of common equity securities
   by subsidiary.............................................      61,172        248,758              -              -            -
  Interest income............................................      15,481          6,253            207          1,569        5,544
  Interest expense...........................................     (80,303)       (69,470)       (56,705)       (43,994)     (22,194)
  Other income (expense), net................................       3,042         (7,936)        (5,590)        (6,385)          90
  Income tax benefit (expense)...............................         727           (993)             -              -            -
  Minority interest in subsidiary............................      58,559         18,407              -          1,018        2,186
  Share in results of affiliated companies, net..............     (18,068)        (6,351)       (10,299)        (2,408)      (5,414)
                                                               ----------     ----------     ----------     ----------   ----------
  Net (loss) income .........................................  $ (121,401)    $   40,591     $ (206,291)     $(168,056)  $  (87,986)
                                                               ==========     ==========     ==========     ==========   ==========
  Basic net (loss) income per common share...................  $    (6.59)    $     2.28     $   (14.02)    $   (12.12)  $    (6.44)
                                                               ==========     ==========     ==========     ==========   ==========
  Basic weighted-average number of shares outstanding........  18,426,187     17,810,254     14,718,857     13,864,941   13,670,832
                                                               ==========     ==========     ==========     ==========   ==========
  Diluted net (loss) income per common share.................  $    (6.59)    $     2.23     $   (14.02)    $   (12.12)  $    (6.44)
                                                               ==========     ==========     ==========     ==========   ==========
  Diluted weighted-average number of shares outstanding.       18,426,187     18,199,726     14,718,857     13,864,941   13,670,832
                                                               ==========     ==========     ==========     ==========   ==========
Other Data:
  Operating loss.............................................  $ (162,011)    $ (148,077)    $ (133,904)    $ (117,856)  $  (68,198)
    Depreciation and amortization............................     105,899        104,720         97,140         80,802       36,269
    Non-cash stock-based compensation........................       9,439         22,540              -              -            -
                                                              -----------     ----------     ----------     ----------   ----------
    Consolidated Adjusted EBITDA (1).........................  $  (46,673)    $  (20,817)    $  (36,764)    $  (37,054)  $  (31,929)
                                                              ===========     ==========     ==========     ==========   ==========
</TABLE>
-------------
(1)  "Adjusted EBITDA"  represents net operating  earnings before  depreciation,
     amortization  and  stock-based  compensation  charges.   Industry  analysts
     generally  consider  Adjusted  EBITDA to be a helpful  way to  measure  the
     performance of cable television  operations and  communications  companies.
     Adjusted  EBITDA should not,  however,  be considered a replacement for net
     income,  cash flows or for any other  measure of  performance  or liquidity
     under U.S. GAAP, or as an indicator of a company's  operating  performance.
     The  Company's  presentation  of Adjusted  EBITDA may not be  comparable to
     statistics  with a  similar  name  reported  by  other  companies.  Not all
     companies and analysts calculate EBITDA in the same manner.
<TABLE>
<CAPTION>
                                                                                      As of December 31,
                                                           -----------------------------------------------------------------------
                                                               2000           1999           1998          1997           1996
                                                           ------------   ------------   ------------   -----------    -----------
Balance Sheet Data:                                                                     (In thousands)
<S>                                                          <C>           <C>            <C>            <C>            <C>
  Cash, cash equivalents, restricted cash and
   short-term liquid investments..........................   $ 107,094     $ 275,421      $     944      $  25,089      $  37,860
  Property, plant and equipment, net......................   $ 124,479     $ 219,394      $ 110,351      $ 183,101      $ 193,170
  Total assets............................................   $ 599,251     $ 666,591      $ 216,032      $ 279,032      $ 319,323
  Senior discount notes and other long-term debt..........   $ 693,135     $ 669,096      $ 424,726      $ 387,094      $ 250,057
  Total liabilities.......................................   $ 785,305     $ 747,425      $ 510,661      $ 431,769      $ 315,276
  Total stockholders' (deficit) equity....................   $(254,861)    $(176,654)     $(294,629)     $(164,153)     $   4,047
</TABLE>
                                       17
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
--------------------------------------------------------------------------------

The following  discussion and analysis of the Company's  financial condition and
results of operations  covers the years ended  December 31, 2000,  1999 and 1998
and should be read in  conjunction  with the  Company's  condensed  consolidated
financial  statements and related notes thereto included elsewhere herein.  Such
consolidated  financial statements provide additional  information regarding the
Company's financial activities and condition.

We have no employees of our own. UAP, our parent,  provides various  management,
financial reporting,  accounting and other services for us pursuant to the terms
of the UAP  Management  Agreement.  Until June 24, 1999,  Austar and Saturn were
also parties to technical  service  agreements with UAP for which such operating
companies paid to UAP fees based on their respective  gross revenues.  Effective
June 24, 1999,  these  technical  service  agreements  with UAP were assigned to
Austar United and a management  agreement  between  United and Austar United was
executed  pursuant to which United  performs  certain  technical and  consulting
services in return for a monthly  fee.  See Item 13 "Certain  Relationships  and
Related Transactions."

Certain  statements in this report may constitute  "forward-looking  statements"
within  the  meaning  of  the  federal  securities  laws.  Such  forward-looking
statements  may include,  among other things,  statements  concerning our plans,
objectives and future economic prospects,  expectations,  beliefs,  future plans
and strategies,  anticipated events or trends and similar expressions concerning
matters that are not historical facts. Such  forward-looking  statements involve
known and unknown  risks,  uncertainties  and other  factors which may cause the
actual results, performance or achievements of the Company (or entities in which
the Company has interests), or industry results, to be materially different from
any future  results,  performance or  achievements  expressed or implied by such
forward-looking statements. Such factors include, among other things, changes in
television   viewing   preferences  and  habits  by  subscribers  and  potential
subscribers,  their acceptance of new technology,  programming  alternatives and
new services  offered by the Company,  our ability to secure adequate capital to
fund system growth and development,  risks inherent in investment and operations
in foreign countries, changes in government regulation, changes in the nature of
key strategic relationships with partners and joint venturers, and other factors
referenced in this report. These forward-looking statements speak only as of the
date of this report,  and we expressly disclaim any obligation or undertaking to
disseminate any updates or revisions to any forward-looking  statement contained
herein, to reflect any change in the Company's expectations with regard thereto,
or any other change in events,  conditions  or  circumstances  on which any such
statement is based.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2000,  we had invested  approximately  $535.7  million in our
projects.  These fundings do not include  amounts  contributed  by  shareholders
other  than the  Company,  proceeds  from the  Austar  United  IPO or  operating
subsidiary bank borrowings.
<TABLE>
<CAPTION>
                                                                                                  As of
                                                                                               December 31,
     Sources of Fundings:                                                                         2000
                                                                                               -------------
                                                                                              (In thousands)
     <S>                                                                                         <C>
     Senior discount notes proceeds, net of offering costs................................       $244,652
     Cash contributions and other equity from parent (1)(2)...............................        283,958
     Cash received for interest...........................................................          7,124
                                                                                                 --------
          Total...........................................................................       $535,734
                                                                                                 ========

                                                                                                  As of
                                                                                               December 31,
     Uses of Fundings:                                                                            2000
                                                                                               -------------
                                                                                              (In thousands)
     Austar United (1)....................................................................       $418,811
     Saturn...............................................................................         44,612
     XYZ Entertainment....................................................................         16,738
     Other (2)............................................................................         55,573
                                                                                                 --------
          Total...........................................................................       $535,734
                                                                                                 ========
</TABLE>
     (1)  Includes  issuance/use  of $29.8  million  and $6.2  million in United
          convertible preferred stock in 1995 and 1998, respectively, to acquire
          additional economic interests in Australia.
     (2)  Includes  $17.2  million  paid by United to purchase  2.0% of UAP from
          Kiwi Cable in December 1999.

                                       18
<PAGE>

As of December 31, 2000, our working  capital and projected  operating cash flow
are not  sufficient  to fund our budgeted  expenditures  and pay interest on our
indebtedness over the next 12 months. Based on current plans, Austar United will
need approximately A$135.5 ($75.7) million, in addition to its $106.2 million of
cash on hand,  to continue to fund the  operations of its business and cover the
variable capital expenditure cost of getting digital set top boxes and broadband
data equipment into homes and businesses in its market in regional Australia and
New Zealand.  In March 2001,  Austar United announced a A$200.0 ($111.8) million
pro rata renounceable  rights issue which is expected to be completed by the end
of May 2001.  United will  underwrite  the issue and  subscribe for its pro rata
entitlement. In addition, United has agreed to acquire any shares not subscribed
to by other  shareholders.  We believe the proceeds  from this  offering will be
sufficient for Austar  United's  funding  requirements  through 2001. Our senior
discount notes (the "Notes") begin accruing interest on a cash-pay basis May 15,
2001,  with the first  payment of $34.5  million due November  15, 2001.  We are
considering  alternatives to payment of this interest,  including refinancing of
the Notes. There can be no assurance that we will be successful in obtaining all
or a portion of our anticipated funding needs.

On April 23, 1999, Austar executed a A$400.0 ($262.3) million  syndicated senior
secured debt  facility  (the "Austar Bank  Facility")  to refinance the existing
bank facility and to fund Austar's  subscriber  acquisition  and working capital
needs.  The Austar Bank  Facility  consists of two  sub-facilities:  (i) A$200.0
million  amortizing  term facility  ("Tranche 1") and (ii) A$200.0  million cash
advance  facility  ("Tranche  2").  Tranche 1 was used to refinance the existing
bank facility,  and Tranche 2 is available upon the  contribution  of additional
equity on a 2:1 debt-to-equity basis. The Austar Bank Facility bears interest at
the  professional  market rate in Australia  plus a margin ranging from 1.75% to
2.25% based upon certain debt to cash flow ratios.  The average rate incurred on
this  facility  was 7.4% and 7.6% during the years ended  December  31, 2000 and
1999,  respectively.  The Austar Bank Facility is fully repayable pursuant to an
amortization  schedule beginning December 31, 2002 and ending March 31, 2006. As
of December 31,  2000,  Austar had drawn  A$200.0  million  under  Tranche 1 and
A$200.0  million  under  Tranche 2, for a total  outstanding  balance of A$400.0
($223.5) million.

In September  2000,  TelstraSaturn  completed a NZ$900.0  ($399.6)  million debt
facility  agreement (the  "TelstraSaturn  Bank Facility") to refinance  NZ$300.0
($133.2) million of an existing facility,  finance capital expenditures to build
the cable  network in New  Zealand and acquire  spectrum  and other  businesses.
Tranche A of the facility,  which totals NZ$380.0 ($168.7) million, is available
immediately.  Tranche B of the facility, which totals NZ$520.0 ($230.9) million,
requires  an equity  contribution  from  Telstra  and  Austar  United of NZ$0.50
($0.22) for every NZ$1.00 ($0.43) of Tranche B debt drawn.  The interest rate on
the facility is a floating  rate plus a 1.75%  margin.  As of December 31, 2000,
the balance on the TelstraSaturn Bank Facility was NZ$320.0 ($142.1) million.

STATEMENTS OF CASH FLOWS

We had cash and cash  equivalents  of $5.6  million as of December  31,  2000, a
decrease of $0.4 million  from $6.0  million as of December  31, 1999.  Cash and
cash  equivalents  as of December  31, 1999  increased  $5.8  million  from $0.2
million as of December 31, 1998 to $6.0 million as of December 31, 1999.
<TABLE>
<CAPTION>

                                                                                     For the Years Ended December 31,
                                                                             -----------------------------------------------
                                                                                 2000              1999             1998
                                                                             ------------      ------------     ------------
                                                                                              (In thousands)
     <S>                                                                      <C>               <C>              <C>
     Cash flow from operating activities..................................    $ (46,936)        $ (18,856)       $ (23,842)
     Cash flow from investing activities..................................     (172,018)         (388,410)         (83,181)
     Cash flow from financing activities..................................      229,102           415,089           94,667
     Effect of exchange rates on cash.....................................      (10,559)           (1,976)             193
                                                                              ---------         ---------        ---------
     Net (decrease) increase in cash and cash equivalents.................         (411)            5,847          (12,163)
     Cash and cash equivalents at beginning of period.....................        6,028               181           12,344
                                                                              ---------         ---------        ---------
     Cash and cash equivalents at end of period...........................    $   5,617         $   6,028        $     181
                                                                              =========         =========        =========
</TABLE>

YEAR ENDED DECEMBER 31, 2000

Cash and cash  equivalents  decreased  $0.4  million  from  $6.0  million  as of
December 31, 1999 to $5.6 million as of December 31, 2000.  Principal sources of
cash during the year ended December 31, 2000 included net proceeds from the sale

                                       19
<PAGE>

of short-term liquid  investments of $132.0 million,  proceeds from the issuance
of  common  equity   securities  by  a  subsidiary  of  $102.4   million,   cash
contributions  from parent of $69.4  million,  borrowings on bank  facilities of
$57.6 million and other sources totaling $6.1 million.

During the year ended December 31, 2000,  cash was used  principally for capital
expenditures  of $113.8 million as Austar  continues to expand its business into
the data market, purchase of additional shares in its subsidiary, United Austar,
Inc. for $65.6  million,  the funding of operating  activities of $46.9 million,
the  purchase  of  spectrum  under  the  agreement  with  Television  and  Radio
Broadcasting  Services  Pty Ltd.  ("TARBS")  of $63.4  million,  the purchase of
additional  spectrum and fees to convert five year apparatus license  agreements
to fifteen year spectrum licenses of $33.0 million,  investments in and advances
to affiliated  companies of $16.9 million, new acquisitions of $16.2 million and
other uses totaling  $12.1  million,  including the effect of exchange  rates on
cash of $10.6 million.

YEAR ENDED DECEMBER 31, 1999

Cash and cash  equivalents  increased  $5.8  million  from  $0.2  million  as of
December 31, 1998 to $6.0 million as of December 31, 1999.  Principal sources of
cash during the year ended  December 31, 1999 included  proceeds from the Austar
United IPO of $292.8  million,  borrowings  on the Austar Bank  Facility and the
Saturn Bank Facility of $229.9 million,  cash contributions from parent of $29.7
million and other investing and financing sources totaling $1.4 million.

During the year ended  December  31,  1999,  cash was used  principally  for net
purchases of short-term liquid investments of $264.7 million, payment of the old
Austar  bank  facility  of $129.1  million,  purchases  of  property,  plant and
equipment  totaling  $117.8  million to continue new  subscriber  connections at
Austar  and the  build-out  of  existing  projects,  the  funding  of  operating
activities  of  $18.9  million,   deferred  financing  costs  of  $8.0  million,
investments  in and advances to  affiliated  companies of $5.2 million and other
uses totaling $4.3 million.

YEAR ENDED DECEMBER 31, 1998

Cash and cash  equivalents  decreased  $12.1  million  from $12.3  million as of
December 31, 1997 to $0.2 million as of December 31, 1998.  Principal sources of
cash during the year ended  December 31, 1998 included cash  contributions  from
parent of $58.9  million,  borrowings  on the old Austar bank  facility of $39.5
million,  net proceeds from the sale of short-term  investments of $11.6 million
and other sources totaling $0.3 million.

During the year ended  December  31,  1998,  cash was used  principally  for the
purchase of property, plant and equipment totaling $71.5 million to continue new
subscriber  connections and the build-out of existing  projects,  the funding of
operating  activities of $23.8 million,  investments in affiliated companies and
acquisition of assets of $11.4 million,  the  deconsolidation  of Saturn of $9.9
million,  the payment of capital leases and other debt of $3.3 million and other
investing and financing uses of $2.5 million.

RESULTS OF OPERATIONS

EXCHANGE RATES. We translate  revenue and expense from our foreign  subsidiaries
using the weighted-average exchange rates during the period. These rates and the
spot rates for the end of each period are listed below.
<TABLE><CAPTION>
                                                 Australian                                              Australian
                                                   Dollars                                                Dollars
                                                 ----------                                              ----------
     <S>                                           <C>        <C>                                          <C>
     For the year ended December 31, 2000........  1.7361     Spot rate as of December 31, 2000..........  1.7897
     For the year ended December 31, 1999........  1.5475     Spot rate as of December 31, 1999..........  1.5244
     For the year ended December 31, 1998........  1.5958     Spot rate as of December 31, 1998..........  1.6332
</TABLE>

REVENUE.  Our revenue  increased  $25.6  million and $61.9 million for the years
ended December 31, 2000 and 1999,  respectively,  compared to the  corresponding
amounts in the prior year as follows:
<TABLE><CAPTION>
                                                                                          For the Years Ended December 31,
                                                                                  -----------------------------------------------
                                                                                      2000              1999             1998
                                                                                  ------------      ------------     ------------
                                                                                                   (In thousands)
     <S>                                                                            <C>               <C>              <C>
     Video................................................................          $163,938           $146,881         $89,819
     Telephone............................................................             3,898              4,107               -
     Internet/data........................................................             5,067                  -               -
     Other................................................................             4,410                734               -
                                                                                    --------           --------         -------
        Total revenue.....................................................          $177,313           $151,722         $89,819
                                                                                    ========           ========         =======
</TABLE>
                                       20
<PAGE>

Our revenue increased $25.6 million,  or 16.9%, from $151.7 million for the year
ended  December 31, 1999 to $177.3 million for the year ended December 31, 2000,
despite a 12.2%  devaluation  of the Australian  dollar to the U.S.  dollar from
period to period.  This increase was primarily due to Austar's video  subscriber
growth  (421,165 at December 31, 2000 compared to 381,763 at December 31, 1999).
The average monthly revenue per video  subscriber  remained flat from an average
per  subscriber of A$53.71  ($34.71) for the year ended  December 31, 1999 to an
average rate of A$53.68  ($30.92) per subscriber for the year ended December 31,
2000.

Our revenue  increased $61.9 million,  or 68.9%, from $89.8 million for the year
ended  December 31, 1998 to $151.7 million for the year ended December 31, 1999,
including a 3.0%  strengthening of the Australian dollar to the U.S. dollar from
period to period.  This increase was primarily due to Austar's video  subscriber
growth  (381,763 at December 31, 1999  compared to 288,721 at December 31, 1998)
and increased  average monthly revenue per video  subscriber as Austar continues
to expand the content of its television service. The average monthly revenue per
video  subscriber  increased  A$6.71  ($5.26) from an average per  subscriber of
A$47.00  ($29.45)  for the year ended  December  31, 1998 to an average  rate of
A$53.71  ($34.71) per  subscriber  for the year ended December 31, 1999, a 14.3%
increase.

ADJUSTED  EBITDA.  Adjusted  EBITDA loss  increased  $25.9 million and decreased
$16.0  million for the years  ended  December  31, 2000 and 1999,  respectively,
compared to the corresponding amounts in the prior year as follows:
<TABLE>
<CAPTION>

                                                                                          For the Years Ended December 31,
                                                                                  -----------------------------------------------
                                                                                      2000             1999             1998
                                                                                  ------------      ------------     ------------
                                                                                                   (In thousands)
          <S>                                                                      <C>                <C>              <C>
     Video................................................................         $(12,586)           $(10,923)       $(27,166)
     Telephone............................................................           (3,839)             (1,160)              -
     Internet/data........................................................          (21,007)                  -               -
     Other................................................................           (9,241)             (8,734)         (9,598)
                                                                                   --------            --------        --------
        Total Adjusted EBITDA.............................................         $(46,673)           $(20,817)       $(36,764)
                                                                                   ========            ========        ========
</TABLE>

Our Adjusted  EBITDA loss increased by $25.9 million,  or 124.5%,  from negative
$20.8 million for the year ended December 31, 1999 to negative $46.7 million for
the year ended  December  31,  2000.  This  increase in Adjusted  EBITDA loss is
primarily due to Austar United's  development and start-up costs associated with
the launch of AUB's Internet  business,  as well as increased  programming costs
payable in U.S. dollars as the Australian  dollar continued to weaken during the
year,  higher  costs for new  branding  and  product  launch,  higher  costs for
marketing and  advertising  during the Olympics,  increased  churn following the
Olympics and increased churn from partial absorption of the new Australian goods
and services tax.

Our Adjusted  EBITDA loss  improved by $16.0  million,  or 43.5%,  from negative
$36.8 million for the year ended December 31, 1998 to negative $20.8 million for
the year ended December 31, 1999.  This  improvement in Adjusted EBITDA loss for
the comparable  periods from year to year was primarily due to Austar  achieving
incremental  sales growth while keeping  certain costs fixed,  such as the NCOC,
corporate management staff and media-related marketing costs.

GAIN ON ISSUANCE OF COMMON EQUITY  SECURITIES BY SUBSIDIARY.  We recorded a gain
of $61.2 and $248.8  million on the  issuance of common  equity  securities  and
restructuring  of assets of Austar United for the years ended  December 31, 2000
and 1999, respectively.

Restructuring of Assets.  In June 1999, the 25.0% interest in XYZ  Entertainment
held by UAP was exchanged for an 8.3% ownership interest in United Austar, Inc.,
increasing  our interest in XYZ  Entertainment  to 50.0%.  Based on the carrying
value of our  investment in United  Austar,  Inc., we recognized a gain of $22.3
million from the resulting  step-up in the carrying  amount of our investment in
United Austar, Inc., in accordance with SAB 51.

Initial Public Offering. On July 27, 1999, Austar United successfully  completed
the Austar  United IPO,  selling 103.5 million  shares on the  Australian  Stock
Exchange  raising gross and net proceeds at A$4.70  ($3.03) per share of A$486.5
($313.6)  million  and  A$453.6  ($292.8)  million,  respectively.  Based on the
carrying  value of our  investment  in  Austar  United as of July 27,  1999,  we
recognized a gain of $226.5  million from the resulting  step-up in the carrying
amount  of our  investment  in  Austar  United,  in  accordance  with SAB 51. No
deferred  taxes were recorded  related to this gain due to our intent on holding
our investment in Austar United indefinitely.

                                       21
<PAGE>



March 2000 Offering.  On March 29, 2000, Austar United successfully  completed a
second  offering  selling 20.0 million shares on the  Australian  Stock Exchange
raising gross and net proceeds at A$8.50  ($5.20) per share of A$170.0  ($104.0)
million and A$167.5 ($102.4) million, respectively.  Based on the carrying value
of our investment in Austar United as of March 29, 2000, we recognized a gain of
$61.2  million  from  the  resulting  step-up  in  the  carrying  amount  of our
investment in Austar United,  in accordance  with SAB 51. No deferred taxes were
recorded  related to this gain due to our intent on holding  our  investment  in
Austar United indefinitely.

INTEREST  INCOME.  Interest income  increased $9.2 million from $6.3 million for
the year ended  December 31, 1999 to $15.5  million for the year ended  December
31, 2000.  The increase was  attributable  to the increase in short-term  liquid
investment balances due to the equity offerings in 1999 and 2000.

Interest  income  increased  $6.1  million  from $0.2 million for the year ended
December  31, 1998 to $6.3 million for the year ended  December  31, 1999.  This
increase was  primarily  due to the  increase in  short-term  liquid  investment
balances due to the Austar United IPO.

INTEREST EXPENSE. Interest expense increased $10.8 million, or 15.5%, from $69.5
million for the year ended December 31, 1999 to $80.3 million for the year ended
December 31, 2000.  This  increase  was due to interest  expense  related to the
Austar Bank  Facility  which was $18.5 million in 2000 compared to $16.4 million
in 1999 and continued accretion on the Notes.

Interest expense  increased $12.8 million,  or 22.6%, from $56.7 million for the
year ended  December 31, 1998 to $69.5  million for the year ended  December 31,
1999.  This  increase  was due to  interest  expense  related to the Austar Bank
Facility,  which was $16.4  million in 1999 compared to $7.5 million in 1998 and
continued accretion on the Notes.

MINORITY  INTEREST  IN  SUBSIDIARY.  The  minority  interests'  share of  losses
increased  $40.2  million,  or  218.5%,  from $18.4  million  for the year ended
December 31, 1999 to $58.6 million for the year ended December 31, 2000.  Austar
United's  IPO in July  1999 and  second  offering  in  March  2000  reduced  our
ownership  from  100%  to a  cumulative  72.9%  as of  December  31,  2000.  For
accounting  purposes,  we  continue  to  consolidate  100%  of  the  results  of
operations of Austar United, then deduct the minority interests' share of losses
before arriving at net income (loss).

SHARE IN RESULTS OF  AFFILIATED  COMPANIES.  Our share in results of  affiliated
companies  totaled a loss of $18.1  million,  $6.4 million and $10.3 million for
the years ended December 31, 2000, 1999 and 1998, respectively, as follows:
<TABLE>
<CAPTION>

                                                                                          For the Years Ended December 31,
                                                                                  -----------------------------------------------
                                                                                      2000             1999             1998
                                                                                  ------------      ------------     ------------
                                                                                                   (In thousands)
     <S>                                                                           <C>                <C>              <C>
     XYZ Entertainment (1)................................................         $  7,049            $    (27)       $     55
     TelstraSaturn/Saturn (2) (3).........................................          (24,503)             (6,324)        (10,354)
     Other................................................................             (614)                  -               -
                                                                                   --------            --------        --------
       Total share in results of affiliated companies... .................         $(18,068)           $ (6,351)       $(10,299)
                                                                                   ========            ========        ========
</TABLE>
     (1)  In September  1998,  UAP acquired an additional  25.0% interest in XYZ
          Entertainment,  which  was  exchanged  for an  8.3%  direct  ownership
          interest in United Austar, Inc. in June 1999, increasing our ownership
          to 50.0%.
     (2)  Effective  January 1, 1998, we discontinued  consolidating the results
          of  operations  of  Saturn  and  returned  to  the  equity  method  of
          accounting due to certain  minority  shareholder's  rights.  Effective
          August 1, 1999, we increased our ownership  interest in Saturn to 100%
          and began consolidating its results of operations.
     (3)  On April 6,  2000,  Saturn  merged  with  Telstra  NZ, a wholly  owned
          subsidiary of Telstra.  We discontinued  consolidating  the results of
          operations of Saturn and returned to the equity method of accounting.

PROVISION FOR LOSSES ON INVESTMENT  RELATED  COSTS.  The provision for losses on
marketable  equity  securities  and  investment  related  costs  consists of our
write-off of various non-strategic investments.

                                       22
<PAGE>


SELECTED  QUARTERLY  FINANCIAL  DATA.  The  following  table  presents  selected
unaudited operating results for each of the last eight quarters through December
31, 2000. The Company believes that all necessary adjustments have been included
in the  amounts  stated to present  fairly the  quarterly  results  when read in
conjuction  with the Company's  consolidated  financial  statements  and related
notes  included  elsewhere  in this Form  10-K.  Results of  operations  for any
particular quarter are not necessarily indicative of results of operations for a
full year or predictive of future periods.
<TABLE>
<CAPTION>
                                                                                             For the Three Months Ended
                                                                             -----------------------------------------------------
                                                                              March 31,   June 30,     September 30,  December 31,
                                                                                2000        2000           2000          2000
                                                                             ----------   ----------   -------------  ------------
                                                                                                   (In thousands)
<S>                                                                          <C>          <C>           <C>            <C>
Statement of Operations Data (Unaudited):
  Revenue...............................................................     $   46,344   $   42,547    $   43,913     $   44,509
                                                                             ==========   ==========    ==========     ==========
  Operating loss........................................................     $  (36,795)  $  (33,810)   $  (39,474)    $  (51,932)
                                                                             ==========   ==========    ==========     ==========
  Net income (loss).....................................................     $   19,447   $  (43,373)   $  (49,103)    $  (48,372)
                                                                             ==========   ==========    ==========     ==========

  Net income (loss) per common share:
     Basic net income (loss)............................................           1.09        (2.44)        (2.76)         (2.39)
                                                                             ==========   ==========    ==========     ==========
     Diluted net income (loss)..........................................           1.06        (2.44)        (2.76)         (2.39)
                                                                             ==========   ==========    ==========     ==========

  Weighted average number of common shares outstanding:

     Basic .............................................................     17,810,299   17,810,299    17,810,299     20,253,766
                                                                             ==========   ==========    ==========     ==========
     Diluted............................................................     18,298,249   17,810,299    17,810,299     20,253,766
                                                                             ==========   ==========    ==========     ==========


                                                                                            For the Three Months Ended
                                                                             -----------------------------------------------------
                                                                              March 31,   June 30,     September 30,  December 31,
                                                                                2000        2000           2000          2000
                                                                             ----------   ----------   -------------  ------------
                                                                                                   (In thousands)
Statement of Operations Data (Unaudited):
  Revenue...............................................................     $   30,432   $   34,388    $   41,745     $   45,157
                                                                             ==========   ==========    ==========     ==========
  Operating loss........................................................     $  (28,944)  $  (45,742)   $  (28,158)    $  (45,233)
                                                                             ==========   ==========    ==========     ==========
  Net (loss) income.....................................................     $  (47,535)  $  (52,269)   $  185,420     $  (45,025)
                                                                             ==========   ==========    ==========     ==========
  Net (loss) income per common share:
     Basic net (loss) income............................................          (2.67)       (2.93)       10.41           (2.53)
                                                                             ==========   ==========    =========      ==========
     Diluted net (loss) income..........................................          (2.67)       (2.93)       10.13           (2.53)
                                                                             ==========   ==========    =========      ==========

  Weighted average number of common shares outstanding:
     Basic .............................................................     17,810,249   17,810,249    17,810,249     17,810,270
                                                                             ==========   ==========    ==========     ==========
     Diluted............................................................     17,810,249   17,810,249    18,298,249     17,810,270
                                                                             ==========   ==========    ==========     ==========
</TABLE>

NEW ACCOUNTING  PRINCIPLES.  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 SFAS 133,  accounting  for changes in fair
market 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
the Effective Date of FASB Statement No. 133 ("SFAS 137").  SFAS 137 amended the
effective date of SFAS 133,  which is effective for the Company's  first quarter
2001. The adoption does not have a material  effect on the Company's  results of
operation.

                                       23
<PAGE>


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------------------------------------------------------------------

INVESTMENT PORTFOLIO

We do not use derivative  financial  instruments in our  non-trading  investment
portfolio.  We place our cash and cash  equivalent  investments in highly liquid
instruments that meet high credit quality standards with original  maturities at
the date of purchase of less than three months. Also, our short-term investments
are placed in liquid  instruments  that meet high credit quality  standards with
original  maturities at the date of purchase of between three and twelve months.
Credit exposure is limited to any one issue, issuer or type of instrument. These
investments  are subject to interest  rate risk and will fall in value if market
interest  rates  increase,  however,  we do not  expect any  material  loss with
respect to our investment portfolio.

IMPACT OF FOREIGN CURRENCY RATE CHANGES

We are exposed to foreign  exchange rate  fluctuations  related to the operating
subsidiaries'  monetary  assets and  liabilities  and the  financial  results of
foreign  subsidiaries when their respective  financial statements are translated
into U.S.  dollars during  consolidation.  Our exposure to foreign exchange rate
fluctuations  also  arises  from  intercompany  charges  such  as  the  cost  of
equipment,  management  fees  and  certain  other  charges.  These  intercompany
accounts are predominantly denominated in the functional currency of the foreign
subsidiary.

Our operating  companies' monetary assets and liabilities are subject to foreign
currency exchange risk as certain  equipment  purchases and payments for certain
operating expenses,  such as programming expenses, are denominated in currencies
other than their own functional currency. In addition,  certain of our operating
companies  have notes payable and notes  receivable  which are  denominated in a
currency other than their own functional currency. Foreign currency rate changes
also affect our share in results of our unconsolidated affiliates.

In general,  we and our operating companies do not execute hedge transactions to
reduce our exposure to foreign currency exchange rate risk. Accordingly,  we may
experience  economic  loss and a negative  impact on  earnings  and equity  with
respect to our holdings  solely as a result of foreign  currency  exchange  rate
fluctuations.

The countries in which our operating companies now conduct business generally do
not restrict the removal or  conversion of local or foreign  currency,  however,
there  is no  assurance  this  situation  will  continue.  We may  also  acquire
interests in companies that operate in countries where the removal or conversion
of currency is restricted.

INTEREST RATE SENSITIVITY

The table below provides  information  about our primary debt  obligations.  The
information  is presented in U.S.  dollar  equivalents,  which is our  reporting
currency.  The  instrument's  actual  cash  flows are  denominated  in both U.S.
dollars (the Notes) and Australian dollars (Austar Bank Facility).
<TABLE>
<CAPTION>
                                                                             As of December 31, 2000
                                                                          -----------------------------
                                                                          Book Value         Fair Value
                                                                          ----------         ----------
                                                               (U.S. dollars, in thousands, except interest rates)
     <S>                                                                   <C>                <C>
     Long-term and short-term  debt:
       Fixed rate USD denominated Notes......................              $466,241           $320,365
         Average interest rate...............................                 14.0%              24.5%
       Variable rate A$ denominated Austar Bank Facility.....              $223,501           $223,501
         Average interest rate...............................                  7.4%               7.4%
</TABLE>

The table  below  presents  principal  cash flows and  related  weighted-average
interest  rates  by  expected  maturity  dates  for our  debt  obligations.  The
information  is presented in U.S.  dollar  equivalents,  which is our  reporting
currency.  The  instrument's  actual  cash  flows are  denominated  in both U.S.
dollars (the Notes) and Australian dollars (Austar Bank Facility).

                                       24
<PAGE>
<TABLE>
<CAPTION>
                                                                       As of December 31, 2000
                                              ------------------------------------------------------------------------------
                                               2001       2002       2003       2004       2005     Thereafter      Total
                                              -------   --------   --------   --------   --------   -----------   ----------
                                                                     (U.S. dollars, in thousands)
<S>                                            <C>       <C>       <C>        <C>        <C>         <C>           <C>
Long-term and short-term debt:
  Fixed rate USD denominated Notes..........   $  -      $    -    $     -    $     -    $     -     $466,241      $466,241
  Variable rate A$ denominated
     Austar Bank Facility...................   $  -      $7,177    $39,474    $63,057    $75,873     $ 37,920      $223,501
</TABLE>

We use interest rate swap  agreements from time to time, to manage interest rate
risk on our floating rate debt facilities.  Interest rate swaps are entered into
depending on our assessment of the market, and generally are used to convert the
floating rate debt to fixed rate debt.  Interest  differentials paid or received
under these swap  agreements  are  recognized  over the life of the contracts as
adjustments to the effective  yield of the underlying  debt, and related amounts
payable  to,  or  receivable  from,  the  counterparties  are  included  in  the
consolidated balance sheet.

Currently,  we have four interest rate swaps to manage interest rate exposure on
the  Austar  Bank  Facility.  Two of these  swap  agreements  expire in 2002 and
effectively  convert an aggregate  principal amount of A$50.0 ($27.9) million of
variable  rate,  long-term debt into fixed rate  borrowings.  The other two swap
agreements  expire in 2004 and convert an aggregate  principal amount of A$100.0
($55.9) million of variable rate, long-term debt into fixed rate borrowings.  As
of December 31, 2000, the weighted-average fixed rate under these agreements was
5.7% compared to a weighted-average variable rate of 8.5%.

Fair values of the  interest  rate swap  agreements  are based on the  estimated
amounts  that  we  would  receive  or pay to  terminate  the  agreements  at the
reporting  date,  taking into  account  current  interest  rates and the current
creditworthiness of the counterparties.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

The consolidated financial statements of the Company and the financial statement
schedules  required  by  Regulation  S-X are  filed  under  Item  14  "Exhibits,
Financial Statement Schedules and Reports on Form 8-K."

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
-------------------------------------------------------------------------

None.


                                       25
<PAGE>
                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

The directors and executive  officers of the Company and their ages,  along with
their  respective  position  with the  Company as of March 1, 2001 are set forth
below. All officers are appointed for an indefinite term serving at the pleasure
of the Board. The number of members on the Company's Board is currently fixed at
two.
<TABLE>
<CAPTION>
     Name                            Age        Position
     ----                            ---        --------
     <S>                              <C>       <C>
     Gene W. Schneider                74        Chairman of the Board
     Michael T. Fries                 38        Director, President and Chief Executive Officer
     John C. Porter                   43        Chief Executive Officer - Austar United
     Jonathan G. Morphett             42        Chief Financial Officer - Austar United
     Bruce M. Mann                    45        Managing Director - Austar
</TABLE>

GENE W. SCHNEIDER  has served  as  Chairman of the Board for the Company and UAP
since their  respective  formation dates. He has also been Chairman of the Board
of Directors of United since its inception in May 1989.  Mr.  Schneider has also
served as United's Chief Executive  Officer since October 1995 and served as its
President from October 1997 until he  relinquished  the title in September 1998.
Since June 1999, Mr.  Schneider has served as a director of Austar  United.  Mr.
Schneider  served  as a member  of the  Supervisory  Board of UPC from July 1995
until February 1999,  when he became an advisor to the Supervisory  Board.  From
May 1989 to November  1991, Mr.  Schneider  served as Chairman of United Artists
Entertainment  Company,  then the third largest cable television company and the
largest theater owner in the world. He was a founder of United Cable  Television
Corporation  in the early  1950's  and,  as its  Chairman  and  Chief  Executive
Officer,  helped  build  United Cable into the  eighth-largest  multiple  system
operator in the United  States prior to its merger with United  Artists in 1989.
He has been  active in cable  television  affairs and has served on the Board of
the National Cable Television  Association ("NCTA"),  and on numerous committees
and special  projects  thereof,  since the NCTA's inception in the early 1950's.
Mr. Schneider is one of the original  inductees into the NCTA's Cable Television
Pioneers.  Mr.  Schneider  is an  advisor  to the  Supervisory  Board of  chello
broadband  N.V. and the Chairman of the Board of Advance  Display  Technologies,
Inc.

MICHAEL T. FRIES has served as a director of the Company and UAP since  November
1996. He also serves as the Company's  President and Chief Executive Officer. He
became a director  of United in November  1999 and has also served as  President
and Chief Operating Officer of United since September 1998. Mr. Fries has served
as a member of the UPC Supervisory Board since September 1998 and as Chairman of
the UPC  Supervisory  Board since February 1999. He has also served as President
and  Chief  Executive  Officer  of  UAP  since  June  1995  and  December  1995,
respectively,  and  Executive  Chairman  of Austar  United  since June 1999.  In
addition,  since September 1998, Mr. Fries has served as the President of United
Latin America,  Inc.  ("ULA"),  a wholly owned subsidiary of United.  In January
2000, he became a member of the chello broadband N.V.  Supervisory  Board and in
November 2000, a member of the Priority  Telecom N.V.  Supervisory  Board.  From
March 1990 to June 1995, Mr. Fries served as Senior Vice President, Development,
in which capacity he was responsible for managing United's  acquisitions and new
business   development   activities,   including  United's  expansion  into  the
Asia/Pacific, Latin America and European markets.

JOHN C. PORTER  has served as the  Chief  Executive  Officer  and a director  of
Austar United since June 1999 and served as the Managing Director of Austar from
July 1997 to  December  1999.  In these  positions,  Mr.  Porter  is the  senior
operating liaison for  telecommunications  projects in the Asia/Pacific  region.
From January 1997 to August 1999, Mr. Porter also served as the Chief  Operating
Officer of UAP. From 1995 until  January 1997, he served as the Chief  Operating
Officer for Austar,  where he was  responsible  for the design and deployment of
Austar's    multi-channel/multi-point     distribution    system/satellite/cable
television  network.  Prior to joining Austar, Mr. Porter served as President of
the Ohio Division of Time Warner, Inc., which had over 250,000 cable customers.

JONATHAN G. MORPHETT  has served as Chief  Financial  Officer for Austar  United
since August 2000. Mr. Morphett is responsible  for the financial  operations of
Austar United.  Immediately prior to joining Austar United,  Mr. Morphett served
as the Managing  Director,  Corporate  Finance,  for Morgan  Stanley Dean Witter
("Morgan  Stanley") in Sydney where he was a key player in  establishing  a full
service investment bank in Australia.  Previously,  he worked for thirteen years
in Morgan  Stanley's New York office.  Mr. Morphett has extensive  experience in
debt and equity financing  transactions,  mergers and acquisitions and corporate
structuring.  He has  worked  primarily  in the  telecommunications  and  energy
sector.

                                       26
<PAGE>


BRUCE M. MANN has served as Managing  Director of Austar since  January 2000. In
this position,  Mr. Mann has profit and loss and operational  responsibility for
Austar's  more than  400,000 pay  television  customers  as well as  operational
responsibility  for the Company's  mobile  telephony and data  businesses.  From
April 1995 to December 1999, Mr. Mann served as Austar's  Executive  Director of
Marketing and Programming where he had  responsibility  for the group's consumer
marketing and sales efforts as well as its programming  function.  Additionally,
Mr. Mann has served as a director  of XYZ  Entertainment  since 1997.  From 1994
until joining Austar, Mr. Mann served as President,  National Division, of Cross
Country  Wireless,  Inc., a U.S. provider of wireless  multi-channel  television
services where he had operational and profit and loss  responsibility  for Cross
Country's MMDS joint venture with Heartland  Communications.  From 1991 to 1994,
Mr. Mann served as Vice  President-Marketing  of Washington  Redskins/Jack  Kent
Cooke  Stadium,  Inc.,  and was  responsible  for its sports  and  entertainment
related promotion, advertising and marketing.

No family relationships exist between any named executive officer or director of
the Company.

During the past five years,  none of the above directors and executive  officers
of the Company has had any  involvement  in such legal  proceedings  as would be
material to an evaluation of his ability or integrity.

SENIOR  MANAGEMENT.  The  following  lists other  officers who are not executive
officers of the Company but who make  significant  contributions  to the Company
and its subsidiaries.

JAMES R. CLARK became a Vice President of the Company and UAP in August 1999. He
is also a Vice  President  of ULA, a position  he has held since June 1999.  Mr.
Clark has served as Vice  President of Regional  Operations for United since May
1999, where he oversees all operations in Asia/Pacific and Latin America.  Prior
to his current positions,  he served as the Regional Manager of Austar from 1997
to May 1999.  From  January  1996 to 1997,  he served  as  Satellite  Operations
Manager at Austar,  where he was  responsible  for  launching  direct  broadcast
satellite  service in rural  Australia.  Prior to joining  Austar,  from 1990 to
1995,  Mr. Clark served as Regional Vice  President for The Disney Channel where
he managed sales and marketing in eight mid-west states,  serving over 1,000,000
subscribers.

VALERIE L. COVER has served as Controller for the Company since its formation in
October 1994 and for UAP since January 1997.  Ms. Cover is  responsible  for the
accounting,  financial  reporting and  information  technology  functions of the
Company. She has served as Controller of United since October 1990 and as a Vice
President of United since December 1996.  Prior to joining  United,  she was the
Director of Corporate  Accounting at United  Artists from May 1989 until October
1990 and Manager of Financial Reporting at United Cable from June 1986 until May
1989.

KEVIN M. ONG has served as Vice President of the Company since May 1996. Mr. Ong
is  responsible  for the finance  operations  of the Company.  He also serves as
Regional  Vice-President of Finance for United. Prior to joining United, Mr. Ong
served in  various  financial  and senior  management  positions  with U.S.  and
international cable television operators. From 1988 to 1994, Mr. Ong served as a
Director with Jones  Intercable,  Inc. and the Treasurer of Jones  International
Limited,   where  he  was  responsible  for  financial  operations  and  various
accounting functions.

ELLEN P. SPANGLER  has  served as Vice  President  and  Secretary of the Company
since July 1997.  Ms.  Spangler is responsible  for the legal  operations of the
Company.  Ms.  Spangler has also served as Senior Vice President of Business and
Legal Affairs and Secretary of United since December 1996. In February 1999, she
became a member of the Supervisory  Board for UPC. Prior to assuming her current
position,  from  February 1991 to December  1996,  Ms.  Spangler  served as Vice
President  of United  where her  responsibilities  included  business  and legal
affairs, programming and assisting on development projects.

FREDERICK G. WESTERMAN  III became  Vice  President and Treasurer of the Company
and UAP in August 1999. His  responsibilities  include oversight and planning of
the Company's financial and treasury operations.  He has also served as United's
Chief  Financial  Officer since June 1999.  From December 1997 to June 1999, Mr.
Westerman served as Treasurer for EchoStar  Communications  Corporation where he
was responsible for corporate  finance,  treasury  operations,  risk management,
corporate budgeting and investor relations. From June 1993 to September 1997, he
served as Vice President of Equity Research for UBS Securities LLC (a subsidiary
of Union Bank of  Switzerland)  where he was  responsible  for primary  research
coverage of cable television and satellite communications and secondary coverage
of media and entertainment.

                                       27
<PAGE>


ITEM 11.  EXECUTIVE COMPENSATION
--------------------------------

All of the  officers of the Company are employed by United,  the  indirect  100%
stockholder of the Company.  The Company pays no separate  compensation to these
officers;   however,   the  Company  and  United   Management,   Inc.   ("United
Management"),  an indirect wholly owned  subsidiary of United,  are parties to a
Management  Agreement,  pursuant to which the Company  pays United  Management a
management fee for certain services provided to the Company. Effective March 31,
1997, United Management assigned its rights and obligations under the Management
Agreement to UAP in the UAP Management Agreement. United Management and UAP also
became  parties  to a  similar  management  agreement  (the  "United  Management
Agreement") effective March 31, 1997.

Certain members of senior  management of Austar United are U.S.  expatriates who
are  employed  by United  and have been  seconded  to the  respective  operating
companies.  Austar  United  reimburses  United  for  compensation  paid to these
employees.  Gene W. Schneider,  the Company's Chairman, is also the Chairman and
Chief  Executive  Officer  of United  and  spends  only a portion of his time on
matters  pertaining  to the Company and its  operations.  Michael T. Fries,  the
Company's President and Chief Executive Officer, is also an officer and employee
of United and spends  only a portion  of his time on matters  pertaining  to the
Company and its  operations.  The  services of Messrs.  Schneider  and Fries are
provided to the Company pursuant to the United Management  Agreement.  While the
Company and its  operating  companies  do not  reimburse  United  directly for a
specified  portion of the  compensation  United  pays to Messrs.  Schneider  and
Fries, UAP pays a management fee to United under the United Management Agreement
for certain services,  including those of Messrs. Schneider and Fries, performed
on behalf of the Company.

SUMMARY COMPENSATION TABLE
--------------------------

The following table sets forth the aggregate annual compensation paid during the
fiscal  years ended  December  31, 2000,  1999 and 1998 to the  Company's  Chief
Executive  Officer  and  each of the  four  most  highly  compensated  executive
officers  whose  annual  salary and bonus  exceeded  $100,000 for the year ended
December  31, 2000.  In  addition,  the  information  in this  section  reflects
compensation received by the named executive officers for all services performed
for the Company, United, Austar United and their respective affiliates:
<TABLE>
<CAPTION>
                                                                           Compensation Table
                                          ---------------------------------------------------------------------------------------
                                                                                                     Long-Term
                                                                                                    Compensation
                                                          Annual Compensation                          Awards
                                          -----------------------------------------------------    --------------
                                                                                     Other           Securities
                                                                                     Annual          Underlying        All Other
                                            Year      Salary         Bonus       Compensation(1)   Options (#)(2)    Compensation
                                          -------   ----------    ------------   ---------------   --------------    ------------
<S>                                        <C>      <C>            <C>             <C>              <C>               <C>
Gene W. Schneider                          2000     $558,413       $      -        $     -          1,600,000(3)       $6,371(4)
 Chairman of the Board                     1999     $498,548       $      -        $     -          2,568,839(5)       $6,155(4)
 Chief Executive Officer, United           1998     $450,000       $      -        $ 5,793(6)         762,500(7)       $5,512(4)

Michael T. Fries                           2000     $448,173       $      -        $ 2,714(6)       1,200,000(8)       $6,371(4)
 President and Chief Executive Officer     1999     $332,365       $      -        $ 4,497(6)       6,204,285(9)       $6,155(4)
 President and Chief Operating Officer,    1998     $300,000       $275,000(10)    $31,041(11)        725,000(12)      $5,632(4)
  United

John C. Porter                             2000     $266,290       $ 31,125        $97,071(13)         50,000(14)      $6,371(15)
 Chief Executive Officer, Austar United    1999     $252,500       $ 32,226        $25,723(16)      4,880,850(17)      $5,952(15)
  (from June 1999)                         1998     $245,913       $ 30,000        $60,081(18)         50,000(19)      $5,632(15)
 Chief Operating Officer, UAP
  (until August 1999)

Jonathan G. Morphett                       2000     $ 65,385(20)   $      -        $18,412(21)      1,000,000(22)      $1,586(23)
 Chief Financial Officer, Austar United

Bruce M. Mann                              2000     $209,231       $ 24,900        $30,408(24)        525,000(25)      $5,959(26)
 Executive Director, Austar                1999     $200,000       $ 26,445        $18,188(27)      3,158,197(28)      $5,620(26)
                                           1998     $181,457       $ 41,470        $21,839(29)         40,000(30)      $5,296(26)
</TABLE>
                                       28
<PAGE>

(1)  With  respect to U.S.  employees  on foreign  assignment,  the  Company tax
     equalizes them for taxes due at the foreign  location and in the U.S. Where
     such tax  equalization  results  in a net  payment by the  Company  for the
     employee  in a  particular  year,  it will be  included  in  "other  annual
     compensation"  and the  benefit  will be so  noted in a  footnote  for such
     employee.
(2)  The number of securities  underlying  options have been adjusted to reflect
     United's  2-for-1 stock split on November 30, 1999, the  relinquishment  of
     options under UAP's phantom stock option plan in exchange for options under
     Austar  United  Executive  Share Option Plan (the "Austar  United Plan") in
     July 1999 and UPC's 3-for-1 stock split on March 20, 2000.
(3)  Pursuant  to the ULA  Phantom  Stock  Option  Plan  (the "ULA  Plan"),  Mr.
     Schneider was granted  phantom options based on 100,000 shares of ULA Class
     A common  stock on  December  6,  2000.  Also  includes  options to acquire
     1,500,000  shares of United  Class A common  stock.  The Board of Directors
     approved this grant subject to shares  becoming  available  under  United's
     1993 Employee Stock Option Plan ("United's Employee Plan") upon stockholder
     approval. Such approval will be sought at United's next annual meeting.
(4)  Amounts  consist of matching  employer  contributions  made by United under
     United's  employee  401(k) plan of $5,100,  $4,800 and $4,800 for the years
     ended December 31, 2000,  1999 and 1998,  respectively,  with the remainder
     consisting  of term  life  insurance  premiums  paid  by  United  for  such
     officer's benefit.
(5)  Pursuant to United's  Employee Plan, Mr.  Schneider was granted  options to
     acquire 290,523 shares of United Class A common stock on December 17, 1999.
     Pursuant to the Austar United Plan,  Mr.  Schneider was granted  options to
     acquire  2,153,316  ordinary  shares  of Austar  United  on July 20,  1999.
     Pursuant to the chello  broadband  Phantom  Stock  Option Plan (the "chello
     Plan"), Mr. Schneider was granted phantom options based on 125,000 ordinary
     shares of chello broadband,  an indirect  subsidiary of United, on June 11,
     1999.
(6)  Represents the value of personal use of United's airplane.
(7)  Pursuant to United's  Employee Plan, Mr.  Schneider was granted  options to
     acquire  200,000  shares of United Class A common stock on October 8, 1998.
     Pursuant to the UPC Phantom Stock Option Plan (the "UPC Phantom Plan"), Mr.
     Schneider was granted phantom options based on 562,500 ordinary shares A of
     UPC on September 24, 1998.
(8)  Pursuant to the ULA Plan,  Mr. Fries was granted  phantom  options based on
     200,000  shares of ULA  Class A common  stock on  December  6,  2000.  Also
     includes  options  to  acquire  1,000,000  shares of United  Class A common
     stock.  The  Board of  Directors  approved  this  grant  subject  to shares
     becoming available under United's Employee Plan upon stockholder  approval.
     Such approval will be sought at United's next annual meeting.
(9)  Pursuant to  United's  Employee  Plan,  Mr.  Fries was  granted  options to
     acquire 100,000 shares of United Class A common stock on December 17, 1999.
     Pursuant  to the Austar  United  Plan,  Mr.  Fries was  granted  options to
     acquire  6,029,285  ordinary  shares  of Austar  United  on July 20,  1999.
     Pursuant to the chello Plan, Mr. Fries was granted phantom options based on
     75,000 ordinary shares of chello broadband on June 11, 1999.
(10) Includes a $25,000  moving  allowance when Mr. Fries was relocated from the
     Company's  Australia  offices  back  to its  principal  office  in  Denver,
     Colorado.
(11) Represents payments for living expense, including rent, relating to foreign
     assignment of $30,824,  and $217 which represents the value of personal use
     of United's airplane.
(12) Pursuant to  United's  Employee  Plan,  Mr.  Fries was  granted  options to
     acquire  200,000  shares of United Class A common  stock on  September  18,
     1998.  Pursuant  to the UPC Phantom  Plan,  Mr.  Fries was granted  phantom
     options  based on 225,000  ordinary  shares A of UPC on September 24, 1998.
     Pursuant to the ULA Plan,  Mr. Fries was granted  phantom  options based on
     300,000 shares of ULA Class A common stock on September 18, 1998.
(13) Represents  payments  related to foreign  assignment  consisting of housing
     allowance of $32,020,  home leave airfare of $27,430 and other  payments of
     $37,621,  including car  allowance,  cost of living  adjustment,  dependent
     education and tax preparation.
(14) Pursuant to  United's  Employee  Plan,  Mr.  Porter was granted  options to
     acquire 50,000 shares of United Class A common stock on December 6, 2000.
(15) Amounts  consist of matching  employer  contributions  made by United under
     United's  employee 401 (k) plan of $5,100,  $4,800 and $4,800 for the years
     ended December 31, 2000,  1999 and 1998,  respectively,  with the remainder
     consisting  of term  life  insurance  premiums  paid  by  United  for  such
     officer's benefit.
(16) Represents  payments  related to foreign  assignment  of $25,723  including
     housing allowance and cost of living adjustment.
(17) Pursuant to the Austar  United  Plan,  Mr.  Porter was  granted  options to
     acquire 4,880,850 ordinary shares of Austar United on July 20, 1999.
(18) Represents  payments  related to foreign  assignment  consisting of housing
     allowance of $46,834 and cost of living adjustment of $13,247.
(19) Pursuant to  United's  Employee  Plan,  Mr.  Porter was granted  options to
     acquire 50,000 shares of United Class A common stock on December 18, 1998.
(20) Mr.  Morphett  commenced his employment  with Austar United in August 2000.
     Accordingly,  the salary information  included in the table represents only
     five months of employment.

                                       29
<PAGE>

(21) Represents  payments  related to foreign  assignment of $18,412,  including
     housing  allowance,  cost of living  adjustment,  car allowance,  dependent
     education and tax preparation.
(22) Pursuant to the Austar  United Plan,  Mr.  Morphett was granted  options to
     acquire 1,000,000 ordinary shares of Austar United on December 20, 2000.
(23) Amount  consists of matching  employer  contributions  made by United under
     United's  employee  401(k) plan of $1,385 for the year ended  December  31,
     2000 with the remainder  consisting of term life insurance premiums paid by
     United for such officer's benefit.
(24) Represents  payments  related to foreign  assignment of $30,408,  including
     housing allowance,  car allowance,  cost of living  adjustment,  home leave
     airfare and tax preparation.
(25) Pursuant to United's Employee Plan, Mr. Mann was granted options to acquire
     25,000 shares of United Class A common stock on December 6, 2000.  Pursuant
     to the Austar United Plan, Mr. Mann was granted  options to acquire 500,000
     ordinary shares of Austar United on December 20, 2000.
(26) Amount  consists of matching  employer  contributions  made by United under
     United's  employee  401(k) plan of $4,688,  $4,468 and $4,464 for the years
     ended December 31, 2000,  1999 and 1998,  respectively,  with the remainder
     consisting  of term  life  insurance  premiums  paid  by  United  for  such
     officer's benefit.
(27) Represents  payments  related to foreign  assignment of $18,188,  including
     housing allowance and cost of living adjustment.
(28) Pursuant to the Austar United Plan, Mr. Mann was granted options to acquire
     3,158,197 ordinary shares of Austar United on July 20, 1999.
(29) Represents  payments  related to foreign  assignment of $21,839,  including
     housing allowance and cost of living adjustment.
(30) Pursuant to United's Employee Plan, Mr. Mann was granted options to acquire
     40,000 shares of United Class A common stock on December 18, 1998.


OPTION GRANTS TABLE
-------------------

Messrs.  Schneider,  Fries,  Porter,  Morphett and Mann, as employees of United,
have been granted  options to acquire stock of United  and/or its  subsidiaries.
The following table sets forth information concerning options to purchase shares
of United Class A common stock,  ULA common stock and ordinary  shares of Austar
United  granted to these  named  executives  during  2000.  The  Company has not
granted any options to acquire its stock.
<TABLE>
<CAPTION>
                                                      Option Grants in the Year Ended December 31, 2000(1)
                               --------------------------------------------------------------------------------------------------
                                                                                                     Potential Realizable Value
                                                                                                       at Assumed Annual Rate
                                                                                                     of Stock Price Appreciation
                                                      Individual Grants                                  for Option Term (2)
                               ----------------------------------------------------------------   ----------------------------------
                               Number of    Percentage of
                               Securities   Total Options                 Market
                               Underlying    Granted to                   Price
                               Options      Employees in  Exercise      on Grant     Expiration
                               Granted (#)  Fiscal Year   Price ($/Sh)  Date ($/Sh)     Date      0% ($)       5% ($)      10% ($)
                               -----------  ------------  ------------  -----------  ----------  ---------  -----------  -----------
<S>                            <C>              <C>         <C>         <C>           <C>        <C>        <C>          <C>
Gene W. Schneider
 United Class A Common Stock.. 1,500,000(3)(6)  39.5%       $14.8125     $14.8125(3)  12/06/10          -   $13,973,252  $35,410,965
 ULA Common Stock.............   100,000(4)     15.9%       $19.2300     $19.2300(5)  12/06/10          -   $ 1,209,364  $ 3,064,767
Michael T. Fries
 United Class A Common Stock.. 1,000,000(3)(6)  26.4%       $14.8125     $14.8125(3)  12/06/10          -   $ 9,315,502  $23,607,310
 ULA Common Stock.............   200,000(4)     31.7%       $19.2300     $19.2300(5)  12/06/10          -   $ 2,418,729  $ 6,129,534
John C. Porter
 United Class A Common Stock..    50,000(6)      1.3%       $14.8125     $14.8125     12/06/10          -   $   465,775  $ 1,180,366
Jonathan G. Morphett
 Austar United Shares......... 1,000,000        33.7%      A$ 1.7500    A$ 2.3520(7)  12/20/10   $602,000   $ 2,081,160  $ 4,350,482
Bruce M. Mann
 United Class A Common Stock..    25,000(6)      0.7%       $14.8125     $14.8125     12/06/10          -   $   232,888  $   590,183
 Austar United Shares.........   500,000        16.8%      A$ 1.7500    A$ 2.3520(7)  12/20/10   $301,000   $ 1,040,580  $ 2,175,241
</TABLE>

(1)  Except as otherwise  noted,  all stock options  granted  during Fiscal 2000
     vest in 48 equal monthly increments following the date of grant. Vesting of
     the options granted would be accelerated upon a change of control of United
     as defined in the respective options plans.
(2)  The potential  gains shown are net of the option  exercise price and do not
     include the effect of any taxes associated with exercise. The amounts shown
     are  for  the  assumed  rates  of  appreciation  only,  do  not  constitute
     projections of future stock price  performance,  and may not necessarily be
     realized.  Actual gains,  if any, on stock option  exercises  depend on the
     future performance of the underlying  securities of the respective options,
     continued  employment of the optionee through the term of the options,  and
     other factors.

                                       30
<PAGE>

(3)  On December 6, 2000,  United's Board of Directors approved option grants to
     Messrs.  Schneider  and Fries for shares of Class A common  stock of United
     with an  exercise  price of  $14.8125.  Such  grants are  subject to shares
     becoming  available under United's Employee Plan upon stockholder  approval
     at which time the option  grants will be  effective.  For  purposes of this
     table,  the  options  are treated as if granted on December 6, 2000 and are
     included for purposes of determining  the  percentage  amounts of the total
     option grants for all the named executive  officers.  Assuming  stockholder
     approval is received, the grants will become effective in 2001.
(4)  Upon exercise, ULA may pay these phantom options in cash, shares of Class A
     common stock of United or, if publicly traded, its shares of Class A common
     stock.
(5)  Market  price based on fair market  value of ULA shares of common  stock as
     determined by its board of directors at the time of grant.
(6)  United Class A common stock options granted in Fiscal 2000 vest as to 1/8th
     of the shares six months  after the grant date and  thereafter  in 42 equal
     monthly increments.
(7)  The price per share on December  31, 2000 in U.S.  dollars is $1.21 and has
     been determined based on the exchange rate of 1.7897 on December 31, 2000.


AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION TABLE
------------------------------------------------------------

The following  table sets forth  information  concerning the exercise of options
and concerning  unexercised options held by each of the executive officers named
in the Summary Compensation Table above as of December 31, 2000.
<TABLE>
<CAPTION>
                                    Aggregated Option Exercises in Year Ended December 31, 2000 and Period-End Option Values
                                    ----------------------------------------------------------------------------------------

                                                                      Number of Securities         Value of Unexercised
                                                                     Underlying Unexercised            In-the-Money
                                                                     Options at FY-End(#)(1)      Options at FY-End($)(2)
                                    Shares Acquired    Value      ----------------------------  ----------------------------
                                    on Exercise(#)   Realized($)  Exerciseable  Unexerciseable  Exerciseable  Unexerciseable
                                    ---------------  -----------  ------------  --------------  ------------  --------------
<S>                                  <C>            <C>            <C>            <C>          <C>           <C>
Gene W. Schneider
 United Class A Common Stock             -               -            753,421     1,741,666       $5,655,015     $  847,959
 UPC Shares (4)...................       -               -            515,625        46,875       $4,532,045     $  412,004
 Austar United Shares.............       -               -          1,635,345       517,971      A$  588,724    A$  186,470
 ULA Common Stock (5).............       -               -            109,375       115,625       $1,637,344     $  233,906
 chello Shares (6)................       -               -             46,875        78,125      euro558,964    euro931,606

Michael T. Fries
 United Class A Common Stock         140,792(7)     $5,060,616(7)     326,708     1,162,500(3)    $2,414,690     $  738,281
 UPC Shares (4)...................       -               -            121,875       103,125       $1,043,989     $  883,375
 Austar United Shares.............       -               -          4,578,964     1,450,321      A$1,648,427    A$  522,115
 ULA Common Stock (5).............       -          $1,665,625          6,250       331,250       $   64,063     $1,345,313
 chello Shares (6)................       -          $  654,425          9,275        46,875      euro110,600    euro558,964

John C. Porter
 United Class A Common Stock          13,543        $  628,391          3,125        75,000       $   26,367     $  210,938
 Austar United Shares.............       -               -          3,772,590       828,260      A$1,358,132    A$  298,174

Jonathan G. Morphett
 Austar United Shares.............       -               -             83,333       916,667      A$   34,167    A$  375,833

Bruce M. Mann
 United Class A Common Stock             -               -             20,000        45,000       $  168,750     $  168,750
 Austar United Shares.............       -               -          2,554,473     1,103,724      A$  919,610    A$  422,341
</TABLE>

(1)  The number of securities  underlying  options have been adjusted to reflect
     United's  2-for-1 stock split on November 30, 1999, the  relinquishment  of
     options under UAP's phantom stock option plan in exchange for options under
     the Austar United Plan in July 1999, and UPC's 3-for-1 stock split on March
     20, 2000.
(2)  The value of the options reported above is based on the following  December
     31, 2000 closing prices: $13.625 per share of United's Class A common stock
     as  reported  by NASDAQ;  $10.50  per UPC  ordinary A share (in the form of
     American  depositary  shares) as  reported by NASDAQ;  and A$2.16  (US$1.21
     based on a 1.7897  conversion  rate on December 31, 2000) per Austar United
     ordinary share as reported by the Australian  Stock  Exchange  Limited.  In
     addition, the exercise prices for UPC options have been converted from euro
     to U.S.  dollars based on a conversion rate of 1.0611 on December 31, 2000.
     The value for the phantom  options of ULA is based on the fair market value
     of  $19.23  per share as  determined  by the Board of United at or prior to
     December  31,  2000,  and the value for the options of chello  broadband is
     based on the fair market value of  euro21.00 per share (US$19.79 based on a
     conversion  rate of 1.0611  on  December  31,  2000) as  determined  by the
     Supervisory Board of chello broadband.

                                       31
<PAGE>

(3)  Includes an option for  1,500,000  shares of United's  Class A common stock
     with  respect  to Mr.  Schneider  and an  option  for  1,000,000  shares of
     United's Class A common stock with respect to Mr. Fries that United's Board
     of  Directors  approved  on  December  6, 2000  subject to shares  becoming
     available  under  United's  Employee Plan upon  stockholder  approval.  For
     purposes of this  table,  the options are treated as if granted on December
     6, 2000, although these grants are not effective until stockholder approval
     is received.
(4)  Represents the number of shares underlying phantom stock options, which UPC
     may pay in cash or  shares of Class A common  stock of  United or  ordinary
     shares A of UPC, at its election upon exercise thereof.
(5)  Represents the number of shares underlying phantom stock options, which ULA
     may pay in cash or shares of Class A common stock of United or, if publicly
     traded, shares of ULA, at its election upon exercise thereof.
(6)  Represents the number of shares  underlying  phantom stock  options,  which
     chello  broadband  may pay in cash or  shares  of Class A  common  stock of
     United, ordinary shares A of UPC or, if publicly traded, ordinary shares of
     chello broadband, at its election upon exercise thereof.
(7)  Represents options exercised by the Fries Family Partnership LLLP, of which
     the general partner is a trust and the trustee of the trust may be replaced
     at Mr. Fries' option.

AGREEMENTS WITH EMPLOYEES

Many of the employees  serving as senior  management in the Company's  operating
companies are parties to employment  agreements typically with terms of three to
five years. The agreements generally provide for a specified base salary as well
as a bonus set at a  specified  percentage  of the base  salary,  which bonus is
based on the  performance of the respective  company and employee and subject to
approval by senior management.  The employment  agreements generally provide for
cost  of  living  differentials,  relocation  and  moving  expenses,  automobile
allowances  and income tax  equalization  payments,  if  necessary,  to keep the
employee's tax liability the same as it would be in the United States.

Of the persons identified in the Summary  Compensation  Table,  Messrs.  Porter,
Morphett and Mann have such an employment  agreement with United. The agreements
with Mr. Porter,  Mr.  Morphett and Mr. Mann terminate on May 30, 2003, July 30,
2004 and March 20, 2003,  respectively.  These employment agreements provide for
an annual base salary of $277,750 for Mr. Porter,  $200,000 for Mr. Morphett and
$220,000  for Mr.  Mann and  eligibility  for an  annual  bonus of up to a fixed
percentage  of the base salary,  based on the  performance  of their  respective
entities  as well as the  individual's  performance  and  subject to approval by
senior management. All are entitled to participate in United's employee benefits
and salaries, each of which are subject to periodic review.

COMPENSATION OF DIRECTORS

All of the  directors  of the Company are also  directors or officers of United,
UAP and/or officers of the Company.  They receive no separate cash  compensation
for serving as directors of the Company. The Company, however, reimburses all of
its directors  for travel and  out-of-pocket  expenses in connection  with their
attendance at Board meetings.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's Board of Directors has no separate  Compensation  Committee as the
Company currently does not have any employees.  United's Compensation Committee,
none of the members of which are employees or executive officers of the Company,
determines  the  compensation  of the  Company's  executive  officers  in  their
capacity as employees of United.  Directors or executive officers of the Company
may  serve  on  the  Boards  of  Directors  of  Austar,  TelstraSaturn  and  XYZ
Entertainment  and as part of their duties may  determine  the  compensation  of
those operating  companies'  employees.  None of the employees of such operating
companies, however, are directors of the Company.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Articles of Incorporation  eliminate the personal liability of its
directors to the Company and its stockholders for monetary damages for breach of
the directors' fiduciary duties in certain circumstances. The Company's Articles
of  Incorporation  and Bylaws  provide  that the  Company  shall  indemnify  its
officers  and  directors  to the fullest  extent  permitted  by law. The Company
believes  that  such  indemnification  covers  at  least  negligence  and  gross
negligence on the part of indemnified parties.

                                       32
<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

As of March 1, 2001, UAP owned 22,961,678 shares of the Company, evidencing over
99.9% of all  outstanding  common stock.  Such percentage is based on 22,961,728
shares of the Company's common stock issued and outstanding on March 1, 2001.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

RELATIONSHIP WITH UAP AND UNITED

The Company is currently a direct, majority owned subsidiary of UAP, which is an
indirect,  wholly owned subsidiary of United.  The Company's  operations to date
have been funded by capital contributions from United and UAP, proceeds from the
Notes,  minority  shareholder  contributions,  subsidiary bank debt and proceeds
from the Austar United IPO and the second offering in March 2000.

The  Company  and UAP are parties to the UAP  Management  Agreement  pursuant to
which UAP agreed to  continue  to perform  certain  administrative,  accounting,
financial  reporting and other services,  including  providing office space, for
the Company,  which has no separate  employees  of its own.  Pursuant to the UAP
Management Agreement,  the management fee was 0.75 million for the first year of
such  agreement  (beginning May 1, 1996),  and it increases on each  anniversary
date of the UAP  Management  Agreement by 8.0% per year.  The management fee for
the  first  year of the UAP  Management  Agreement  was  calculated  based on an
estimate of staff hours to accomplish  the various  administrative,  accounting,
financial  reporting and other  services to be provided to the Company under the
UAP  Management  Agreement.  The  percentage  those  hours  constituted  of  the
respective  employees'  annual work hours was then  multiplied by the employment
cost to United for such employees.

Effective June 24, 1999, United and Austar United executed a management services
agreement  pursuant to which United  performs  certain  technical and consulting
services  in return for a monthly  management  fee.  The  monthly fee payable by
Austar  United to United in 1999 is $0.2  million per month.  This amount may be
adjusted  before  January 1 of each year by the board of directors of United but
may not  increase  by more  than  15.0% in any one  year.  This  agreement  also
requires that Austar United  reimburse  United for all direct and other expenses
reasonably  incurred by United on behalf of Austar  United.  The agreement  will
continue through December 31, 2010.

Austar and Saturn  were  parties to  technical  assistance  agreements  with UAP
whereby  such  operating  companies  paid to UAP fees based on their  respective
gross revenues. The operating systems reimbursed United for certain direct costs
incurred  by  United,   including  salaries  and  benefits  relating  to  senior
management  positions,  pursuant  to  the  terms  of  the  technical  assistance
agreements. Effective June 24, 1999, the rights under these technical assistance
agreements  were  assigned  to  Austar  United  as  part  of  the  restructuring
associated with the Austar United IPO.

TAX SHARING AGREEMENT

The Company is included as a member of United's consolidated tax return and is a
member of the United consolidated group (as long as non-United  ownership of the
Company  does not exceed  20.0%).  United and the  Company  are parties to a tax
sharing  agreement that defines the parties' rights and obligations with respect
to tax  liabilities  and benefits  relating to the Company and its operations as
part of the consolidated group of United. In general,  United is responsible for
filing  consolidated tax returns and paying the associated taxes and the Company
will  reimburse  United for the portion of the tax cost  relating to the Company
and its operations.

                                       33
<PAGE>

                                     PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a)  Index to Financial Statements
<TABLE>
<CAPTION>
                                                                                                                        Page
                                                                                                                       Number
                                                                                                                       ------
         <S>                                                                                                            <C>
          UNITED AUSTRALIA/PACIFIC, INC.
          Report of Independent Public Accountants.................................................................      F-1
          Consolidated Balance Sheets as of December 31, 2000 and 1999.............................................      F-2
          Consolidated Statements of Operations and Comprehensive (Loss) Income for the Years Ended
            December 31, 2000, 1999 and 1998.......................................................................      F-3
          Consolidated Statements of Stockholders' Deficit for the Years Ended December 31, 2000,
            1999 and 1998..........................................................................................      F-4
          Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998...............      F-5
          Notes to Consolidated Financial Statements...............................................................      F-7

          UNITED AUSTRALIA/PACIFIC, INC.
          Report of Independent Public Accountants (Parent only)...................................................      F-23
          Schedule I - Condensed Financial Information of the Registrant (Parent only).............................      F-24
          Schedule II - Valuation and Qualifying Accounts..........................................................      F-27
</TABLE>

     (b)  Reports on Form 8-K filed during the quarter:

          Date of Filing        Date of Event         Item Reported
          --------------        -------------         -------------
          December 12, 2000     November 30, 2000     Item 5 - Acquired spectrum
                                                      rights

     (c)  Exhibits:

          3.1     Articles of Incorporation of the Company, as amended. (1)

          3.2     Articles of  Amendment  to Articles  of  Incorporation  of the
                  Company. (2)

          3.3     By-Laws of the Company. (1)

          4.1     The Article of Incorporation,  as amended,  and the By-Laws of
                  the Company are included as Exhibits 3.1 - 3.3.

          4.2     The  Indenture  dated as of May 14, 1996,  between the Company
                  and American Bank National  Association  (now known as Firstar
                  Bank  of   Minnesota   N.A.   (the   "Trustee"))   (the  "1996
                  Indenture"). (3)

          4.3     Supplemental  Indenture  dated as of June 30, 1997 between the
                  Company and Trustee with respect to the 1996 Indenture (4).

          4.4     Supplemental  Indenture dated as of July 20, 1999, between the
                  Company and Trustee with respect to the 1996 Indenture. (5)

          4.5     The  Indenture  dated as of September  23,  1997,  between the
                  Company and Trustee (the "1997 Indenture"). (6)

          4.6     Supplemental  Indenture dated as of July 20, 1999, between the
                  Company and Trustee with respect to the 1997 Indenture. (5)

          4.7     Form of  Warrant  Agreement  dated as of  November  15,  1997,
                  between the Company and Trustee. (6)

                                       34
         <PAGE>


          10.1    A$400,000,000   Syndicated   Senior   Secured  Debt   Facility
                  Agreement dated April 23, 1999, among Austar, Chase Securities
                  Australia  Limited,  the  Guarantors  named  therein  and  the
                  financial institutions named therein. (7)

          10.2    XYZ  Shareholders  Agreement  dated  September 6, 1995,  among
                  Century  United  Programming  Ventures  Pty Limited  ("CUPV"),
                  Foxtel Management Pty Limited  ("Foxtel"),  XYZ Entertainment,
                  Century United Programming  Ventures ("CPVC") and the Company.
                  (1)

          10.3    Shareholders   Deed  dated  June  30,  1995,   among   Century
                  Communications  Corporation,  CPVC,  United,  the  Company and
                  CUPV. (1)

          10.4    Channel  Supply  Agreement  dated  June 30,  1995,  among  XYZ
                  Entertainment,  CUPV and East Coast Pay Television Pty Limited
                  ("ECT"). (1)

          10.5    Management   Agreement  dated  May  1,  1996,  between  United
                  Management and the Company. (1)

          10.6    Tax Allocation  Agreement dated May 8, 1996, among United, UAP
                  and the Company. (1)

          10.7    Management  Services  Agreement  dated June 24, 1999,  between
                  United   International   Holdings,   Inc.  doing  business  as
                  UnitedGlobalCom, Inc. ("United") and Austar United. (2)

          10.8    Registration  Rights  Agreement  dated June 16,  1999  between
                  Austar  United  and UIH  Austar,  Inc.  (now  known as  United
                  Austar, Inc.) (2)

          10.9    Master  Seconded  Employee  Services  Agreement dated June 16,
                  1999, between United and Austar United. (2)

          10.10   General  Agreement  dated  June 16,  1999  between  United and
                  Austar United. (2)

          10.11   Shareholders  Agreement  dated  April 6, 2000,  among  Telstra
                  Corporation  Limited  ("TCL"),  Telstra  Holdings  Pty Limited
                  ("THPL"),  Austar United,  Saturn Holdings Company Pty Limited
                  ("Saturn NZ") and Saturn. (8)

          10.12   Merger Agreement dated April 6, 2000, between THPL and Saturn.
                  (8)

          10.13   Warranty  Agreement dated April 6, 2000, between TCL and AUCL.
                  (8)

          10.14   Offer to Acquire  Shares dated April 6, 2000,  between  Saturn
                  and THPL. (8)

          10.15   TARB's Acquisition Agreement. (9)

          10.16   *1993  Stock  Option Plan of United,  effective  June 1, 1993.
                  (10)

          10.17   *UPC Phantom Stock Option Plan, effective March 20, 1998. (11)

          10.18   *Austar  United  Communications  Executive  Share Option Plan,
                  effective June 1999.

          10.19   *ULA Phantom Stock Option Plan, effective June 6, 1997. (12)

          10.20   *chello  broadband  Phantom Stock Option Plan,  effective June
                  19, 1998. (13)

                                       35
          <PAGE>


          10.21   Executive  Service  Agreement,  effective June 1, 2000,  among
                  United, Austar United and John Porter.

          10.22   Executive Service Agreement,  effective August 21, 2000, among
                  United, Austar United and Jonathan Morphett.

          10.23   Executive Service  Agreement,  effective March 20, 2000, among
                  United, Austar United and Bruce Mann.

          12.1    Statement re: Ratio of Earnings to Fixed Charges.

          21.1    List of Subsidiaries.

          23.1    Consent of Independent Public Accountants--Arthur Andersen LLP
                  (United Australia/Pacific, Inc.).

          24.1    Power of Attorney.

---------------------
*    Management compensation plan.

(1)  Incorporated by reference from the Company's Registration Statement on Form
     S-4 filed on May 31, 1996 (SEC File No. 333-05017).
(2)  Incorporated by reference from the Company's Form 10-K for the period ended
     December 31, 1999, filed on March 30, 2000 (SEC File No. 333-05017).
(3)  Incorporated  by reference  from the Form 10-K of United for the year ended
     February 29, 1996 (SEC File No. 0-21974).
(4)  Incorporated  by  reference  from the  Company's  Form 10-Q for the quarter
     ended June 30, 1997, filed on August 14, 1997 (SEC File No. 333-05017).
(5)  Incorporated  by reference from the Company's  Report on Form 8-K, filed on
     July 28, 1999 (SEC File No. 333-05017).
(6)  Incorporated by reference from the Company's Registration Statement on Form
     S-4 Exchange Offer, filed on November 6, 1997 (SEC File No. 333-39707).
(7)  Incorporated  by reference  from the Form 10-K of United for the ten months
     ended December 31, 1998 (File No. 0-21974).
(8)  Incorporated  by  reference  from the  Company's  Form 10-Q for the quarter
     ended March 31, 2000, filed on May 15, 2000 (SEC File No. 333-05017).
(9)  Incorporated  by  reference  from the  Company's  Form 10-Q for the quarter
     ended  September  30,  2000,  filed on  November  14,  2000  (SEC  File No.
     333-05017).
(10) Incorporated  by reference  from  Amendment No. 1 to United's  Registration
     Statement on Form S-1 filed on June 23, 1993 (SEC File No. 33-61376).
(11) Incorporated by reference from UPC's Form S-1 Registration  Statement filed
     on November 24, 1998 (SEC File No. 333-67895).
(12) Incorporated  by  reference  from  United's  Form  10-K for the year  ended
     December 31, 2000, filed on April 2, 2001 (SEC File No. 0-21974).
(13) Incorporated  by reference from UPC's Form 10-K for the year ended December
     31, 2000, filed on April 2, 2001 (SEC File No. 000-25365).


     (d)   Separate Financial Statements and Related Schedules.
           See Index to Financial Statements in (a) above.


                                       36
<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the  undersigned,  thereunto duly  authorized,  in the City of Denver,
State of Colorado, on this 2nd day of April 2001.


                                             United Australia/Pacific, Inc.
                                             a Colorado corporation

                                             By:  /s/ Valerie L. Cover
                                             -----------------------------------
                                             Valerie L. Cover
                                             Controller


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has caused this Report to be signed by the following  persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>

                                          Title of Position
       Signature                          Held With the Registrant                      Date
       ---------                          ------------------------                      ----
<S>                                       <C>                                        <C>


 /s/ VALERIE L. COVER                     Controller                                 April 2, 2001
-------------------------------           (Principal Accounting Officer)
 Valerie L. Cover


        *                                 Director, President and                    April 2, 2001
------------------------------            Chief Operating Officer
 Michael T. Fries


        *                                 Chairman of the Board                      April 2, 2001
------------------------------
 Gene W. Schneider


 /s/ FREDERICK G. WESTERMAN III           Vice President/Treasurer                   April 2, 2001
-------------------------------           (Chief Financial Officer)
 Frederick G. Westerman III




*  By: /s/ VALERIE L. COVER
------------------------------
      Valerie L. Cover
      Attorney-in-fact
</TABLE>



                                       37


<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To United Australia/Pacific, Inc.:

We  have  audited  the  accompanying   consolidated  balance  sheets  of  United
Australia/Pacific, Inc. (a Colorado corporation and majority owned subsidiary of
United  Asia/Pacific  Communications,  Inc.) and subsidiaries as of December 31,
2000  and  1999  and the  related  consolidated  statements  of  operations  and
comprehensive  (loss) income,  stockholders'  deficit and cash flows for each of
the three  years in the period  ended  December  31,  2000.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to  obtain  reasonable  assurance  about  whether  the  consolidated   financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of United
Australia/Pacific,  Inc. and  subsidiaries as of December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2000 in conformity with  accounting  principles
generally accepted in the United States.


                               ARTHUR ANDERSEN LLP

Denver, Colorado
March 30, 2001




                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                                            UNITED AUSTRALIA/PACIFIC, INC.
                                             CONSOLIDATED BALANCE SHEETS
                                (Stated in thousands, except share and per share amounts)

                                                                                                                As of December 31,
                                                                                                             -----------------------
                                                                                                                2000        1999
                                                                                                             ----------- -----------
<S>                                                                                                           <C>         <C>
ASSETS
Current assets:
  Cash and cash equivalents.............................................................................      $  5,617    $  6,028
  Short-term liquid investments.........................................................................       101,477     269,393
  Subscriber receivables, net...........................................................................         8,969       8,177
  Related party receivables.............................................................................         3,095       1,645
  Other receivables.....................................................................................         2,255       6,196
  Inventory.............................................................................................        12,151      14,193
  Prepaids and other current assets.....................................................................        10,697       5,146
                                                                                                              --------    --------
       Total current assets.............................................................................       144,261     310,778
Investments in and advances to affiliated companies, accounted for under the equity
 method, net............................................................................................        64,991      28,546
Property, plant and equipment, net of accumulated depreciation of $294,935 and $261,891, respectively...       124,479     219,394
Goodwill and other intangible assets, net of accumulated amortization of $20,088 and
 $23,536, respectively .................................................................................       254,387      91,346
Deferred financing costs, net of accumulated amortization of $6,826 and $4,427, respectively............        10,846      16,377
Other non-current assets, net...........................................................................           287         150
                                                                                                              --------    --------
       Total assets.....................................................................................      $599,251    $666,591
                                                                                                              ========    ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable......................................................................................      $  5,554    $ 16,463
  Accrued liabilities...................................................................................        41,325      32,151
  Accrued liabilities - spectrum licenses...............................................................        16,763           -
  Construction payables.................................................................................             -       4,370
  Current portion of due to parent......................................................................        18,583      12,754
  Current portion of other long-term debt...............................................................         1,366       1,500
                                                                                                              --------    --------
       Total current liabilities........................................................................        83,591      67,238
Due to parent...........................................................................................         8,068       9,621
Senior discount notes...................................................................................       466,241     407,945
Other long-term debt....................................................................................       226,894     261,151
Deferred tax liability..................................................................................            67       1,014
Other long-term liabilities.............................................................................           444         456
                                                                                                              --------    --------
       Total liabilities................................................................................       785,305     747,425
                                                                                                              --------    --------
Minority interest in subsidiary.........................................................................        68,807      95,820
                                                                                                              --------    --------
Stockholders' deficit:
  Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding............             -           -
  Common stock, $0.01 par value, 30,000,000 shares authorized, 22,961,728 and 17,810,299
   shares issued and outstanding, respectively..........................................................           230         178
  Additional paid-in capital............................................................................       371,498     305,100
  Deferred compensation.................................................................................        (8,904)    (18,343)
  Accumulated deficit...................................................................................      (562,050)   (440,649)
  Other cumulative comprehensive loss...................................................................       (55,635)    (22,940)
                                                                                                              --------    --------
       Total stockholders' deficit......................................................................      (254,861)   (176,654)
                                                                                                              --------    --------
Commitments and contingencies (Notes 14 and 15)
       Total liabilities and stockholders' deficit......................................................      $599,251    $666,591
                                                                                                              ========    ========

                     The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                                           F-2
<PAGE>
<TABLE>
<CAPTION>
                                             UNITED AUSTRALIA/PACIFIC, INC.
                          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
                               (Stated in thousands, except share and per share amounts)

                                                                                                   For the Years Ended
                                                                                                       December 31,
                                                                                        --------------------------------------------
                                                                                            2000            1999            1998
                                                                                        ------------    ------------    ------------
<S>                                                                                      <C>    <C>    <C>    <C>    <C>    <C>
Revenue..............................................................................    $  177,313      $  151,722      $   89,819

Operating expense, including related party expense of $2,414, $4,381 and $4,124,
 respectively........................................................................      (155,716)       (118,731)        (71,149)
Selling, general and administrative expense, including management fees and
 allocated expense from related party of $995, $21,767 and $5,475, respectively......       (77,709)        (76,348)        (55,434)
Depreciation and amortization........................................................      (105,899)       (104,720)        (97,140)
                                                                                         ----------      ----------      ----------
       Operating loss................................................................      (162,011)       (148,077)       (133,904)

Gain on issuance of common equity securities by subsidiary...........................        61,172         248,758               -
Gain on sale of assets...............................................................         9,874               -               -
Interest income......................................................................        15,481           6,253             207
Interest expense, including related party expense of $0, $0 and $1,079,
 respectively........................................................................       (80,303)        (69,470)        (56,705)
Provision for losses on investment related costs.....................................          (938)         (4,949)         (4,462)
Other expense, net...................................................................        (5,894)         (2,987)         (1,128)
                                                                                         ----------      ----------      ----------
       (Loss) income before income taxes and other items.............................      (162,619)         29,528        (195,992)

Income tax benefit (expense) ........................................................           727            (993)              -
Minority interest in subsidiaries....................................................        58,559          18,407               -
Share in results of affiliated companies, net........................................       (18,068)         (6,351)        (10,299)
                                                                                         ----------      ----------      ----------
        Net (loss) income ...........................................................    $ (121,401)     $   40,591      $ (206,291)
                                                                                         ==========      ==========      ==========
Foreign currency translation adjustments.............................................    $  (32,695)     $    6,251      $     (227)
                                                                                         ----------      ----------      ----------
       Comprehensive (loss) income...................................................    $ (154,096)     $   46,842      $ (206,518)
                                                                                         ==========      ==========      ==========
Net (loss) income per common share:
       Basic net (loss) income.......................................................    $    (6.59)     $     2.28      $   (14.02)
                                                                                         ==========      ==========      ==========
       Diluted net (loss) income.....................................................    $    (6.59)     $     2.23      $   (14.02)
                                                                                         ==========      ==========      ==========
Weighted-average number of common shares outstanding:
       Basic.........................................................................    18,426,187      17,810,254      14,718,857
                                                                                         ==========      ==========      ==========
       Diluted.......................................................................    18,426,187      18,199,726      14,718,857
                                                                                         ==========      ==========      ==========

                   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                                          F-3
<PAGE>
<TABLE>
<CAPTION>
                                                    UNITED AUSTRALIA/PACIFIC, INC.
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                             (Stated in thousands, except share amounts)

                                                                                                            Other
                                                                                                          Cumulative
                                             Common Stock       Additional                               Comprehensive
                                         --------------------    Paid-In      Deferred     Accumulated      Income
                                           Shares      Amount    Capital    Compensation     Deficit       (Loss)(1)       Total
                                         ----------  --------   ----------  ------------   -----------   -------------   ---------
<S>                                      <C>           <C>       <C>          <C>           <C>            <C>           <C>
Balances, December 31, 1997............. 13,864,941    $ 139     $139,621     $      -      $(274,949)     $(28,964)     $(164,153)

Issuance of capital stock to parent
 related to cumulative capital
 contributions..........................  3,945,308       39          (39)           -              -             -              -

Cash contributions from parent..........          -        -       58,947            -              -             -         58,947

Non-cash contributions from parent......          -        -       17,095            -              -             -         17,095

Net loss................................          -        -            -            -       (206,291)            -       (206,291)

Change in cumulative translation
 adjustments............................          -        -            -            -              -          (227)          (227)
                                         ----------    -----     --------     --------      ---------      --------      ---------
Balances, December 31, 1998............. 17,810,249      178      215,624            -       (481,240)      (29,191)      (294,629)

Warrants exercised......................         50        -            1            -              -             -              1

Cash contributions from parent..........          -        -       29,659            -              -             -         29,659

Non-cash contributions from parent......          -        -       20,449            -              -             -         20,449

Equity transactions of subsidiary.......          -        -       40,883      (40,883)             -             -              -

Amortization of deferred compensation...          -        -       (1,516)      22,540              -             -         21,024

Net income..............................          -        -            -            -         40,591             -         40,591

Change in cumulative translation
 adjustments............................          -        -            -            -              -         6,251          6,251
                                         ----------    -----     --------     --------      ---------      --------      ---------
Balances, December 31, 1999............. 17,810,299      178      305,100      (18,343)      (440,649)      (22,940)      (176,654)

Issuance of capital stock to parent for
 capital contributions..................  5,151,429       52          (52)           -              -                            -

Cash contributions from parent..........          -        -       69,382            -              -             -         69,382

Amortization of deferred compensation...          -        -       (2,932)       9,439              -             -          6,507

Net loss................................          -        -            -            -       (121,401)            -       (121,401)

Change in cumulative translation
 adjustments............................          -        -            -            -              -       (32,695)       (32,695)
                                         ----------    -----     --------     --------      ---------      --------      ---------
Balances, December 31, 2000............. 22,961,728    $ 230     $371,498     $ (8,904)     $(562,050)     $(55,635)     $(254,861)
                                         ==========    =====     ========     ========      =========      ========      =========

(1)  Represents foreign currency translation adjustments only.

                   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                                            F-4
<PAGE>
<TABLE>
<CAPTION>
                                                 UNITED AUSTRALIA/PACIFIC, INC.
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Stated in thousands)

                                                                                               For the Years Ended December 31,
                                                                                          ------------------------------------------
                                                                                             2000            1999            1998
                                                                                          ----------      ----------      ----------
<S>                                                                                       <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income.......................................................................  $ (121,401)     $  40,591       $(206,291)
Adjustments to reconcile net (loss) income to net cash flows from operating
 activities:
   Gain on issuance of common equity securities by subsidiary...........................     (61,172)      (248,758)              -
   Gain on sale of assets...............................................................      (9,874)             -               -
   Share in results of affiliated companies, net........................................      18,068          6,351          10,299
   Minority interest in subsidiaries....................................................     (58,559)       (18,407)              -
   Depreciation and amortization........................................................     105,899        104,720          97,140
   Allocation of expense accounted for as capital contributions by parent...............           -          3,216           4,622
   Stock-based compensation expense.....................................................       9,439         22,540               -
   Provision for losses on marketable equity securities and investment related costs....         938          4,949           4,462
   Accretion of interest on senior notes and amortization of deferred financing costs...      61,831         56,069          49,508
   Increase in receivables, net.........................................................      (5,394)        (1,107)         (2,757)
   Increase in other assets.............................................................      (8,399)        (4,890)         (5,719)
   Increase in accounts payable, accrued liabilities and other..........................      21,688         15,870          24,894
                                                                                          ----------      ---------       ---------
Net cash flows from operating activities................................................     (46,936)       (18,856)        (23,842)
                                                                                          ----------      ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term liquid investments...............................................  (1,583,260)      (266,378)           (763)
Sale of short-term liquid investments...................................................   1,715,260          1,676          12,325
Investments in and advances to affiliated companies.....................................     (16,859)        (5,177)        (11,389)
Purchase of additional shares in subsidiary.............................................     (65,601)             -               -
(Deconsolidation) consolidation of New Zealand subsidiary...............................         (52)           613          (9,881)
New acquisitions, net of cash acquired..................................................     (16,168)             -               -
Dividends received from affiliate.......................................................       5,464              -               -
Capital expenditures....................................................................    (113,786)      (117,819)        (71,466)
Spectrum license fees...................................................................     (96,422)             -               -
Other...................................................................................        (594)        (1,325)         (2,007)
                                                                                          ----------      ---------       ---------
Net cash flows from investing activities................................................    (172,018)      (388,410)        (83,181)
                                                                                          ----------      ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contributed from parent............................................................      69,382         29,659          58,947
Proceeds from issuance of common equity securities by subsidiary, net...................     102,403        292,784               -
Proceeds from issuance of common stock in connection with subsidiary option plan........         631            807               -
Warrants exercised......................................................................           -              1               -
Borrowings on the Austar Bank Facility and Saturn Bank Facility.........................      57,587        229,928          39,519
Payment of the old Austar Bank Facility.................................................           -       (129,149)              -
Deferred financing costs and other......................................................         (24)        (8,014)           (473)
Payment of capital leases and other debt, net...........................................        (877)          (927)         (3,326)
                                                                                          ----------      ---------       ---------
Net cash flows from financing activities................................................     229,102        415,089          94,667
                                                                                          ----------      ---------       ---------
EFFECT OF EXCHANGE RATES ON CASH........................................................     (10,559)        (1,976)            193
                                                                                          ----------      ---------       ---------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........................................        (411)         5,847         (12,163)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..........................................       6,028            181          12,344
                                                                                          ----------      ---------       ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD................................................  $    5,617      $   6,028       $     181
                                                                                          ==========      =========       =========

                   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                                            F-5
<PAGE>
<TABLE>
<CAPTION>
                                                 UNITED AUSTRALIA/PACIFIC, INC.
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Stated in thousands)

                                                                                               For the Years Ended December 31,
                                                                                          ------------------------------------------
                                                                                             2000            1999            1998
                                                                                          ----------      ----------      ----------
<S>                                                                                       <C>             <C>             <C>
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash capital contributions from parent..............................................  $        -      $  17,233       $  12,473
                                                                                          ==========      =========       =========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest..................................................................  $   17,582      $  11,977       $   5,323
                                                                                          ==========      =========       =========
Cash received for interest..............................................................  $   17,906      $   2,747       $     144
                                                                                          ==========      =========       =========
DECONSOLIDATION (2000 and 1998)/CONSOLIDATION (1999) OF NEW ZEALAND SUBSIDIARY:
Working capital.........................................................................  $   (7,319)     $  10,162       $   4,159
Property, plant and equipment...........................................................      93,202        (80,656)        (26,484)
(Record) eliminate investment in Saturn.................................................     (62,857)        21,974               -
Goodwill and other assets...............................................................      35,451         (5,737)         (2,805)
Notes payable and other debt............................................................     (58,529)        54,870           3,833
Minority interest.......................................................................           -              -          11,416
                                                                                          ----------      ---------       ---------
Cash (relinquished) received............................................................  $      (52)     $     613       $  (9,881)
                                                                                          ==========      =========       =========
PURCHASE OF ADDITIONAL SHARES IN SUBSIDIARY:
Goodwill................................................................................  $  (49,042)     $       -       $       -
Investment in net assets................................................................     (16,559)             -               -
                                                                                          ----------      ---------       ---------
Cash paid...............................................................................  $  (65,601)     $       -       $       -
                                                                                          ==========      =========       =========
AGREEMENT WITH TVSN:
Working capital.........................................................................  $      521      $       -       $       -
Property, plant and equipment...........................................................      (4,111)             -               -
Goodwill................................................................................     (36,225)             -               -
Notes payable and other debt............................................................      13,239              -               -
Minority interest.......................................................................      18,142              -               -
Gain on sale of assets..................................................................       9,874              -               -
                                                                                          ----------      ---------       ---------
Cash received...........................................................................  $    1,440      $       -       $       -
                                                                                          ==========      =========       =========

                    The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                                         F-6
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   ORGANIZATION AND NATURE OF OPERATIONS

United Australia/Pacific,  Inc. (the "Company" or "United A/P") a majority owned
subsidiary of United Asia/Pacific Communications,  Inc. ("UAP") which is in turn
an indirect  wholly owned  subsidiary of  UnitedGlobalCom,  Inc.  ("United") was
formed on October  14,  1994,  for the  purpose  of  developing,  acquiring  and
managing foreign pay television, programming and telephony operations.

The following chart presents a summary of the Company's  ownership structure and
its  significant  investments  in  pay  television,  programming  and  telephony
operations as of December 31, 2000.

          ***********************************************************
          *                                                         *
          *                         United                          *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *      United International Properties, Inc. ("UIPI")     *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                           UAP                           *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                      The Company                        *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                    United Austar, Inc.                  *
          *                                                         *
          ***********************************************************
                                       *
                              72.9%    *
          ***********************************************************
          *          Austar United Communications Limited           *
          *                    ("Austar United")                    *
          *                                                         *
          ***********************************************************
                                       *
                                       *
          ***********************************************************
          *                                                         *
          *Australia:                                               *
          * Austar Entertainment Pty Limited ("Austar")     100.0%  *
          * Austar United Broadband Pty Limited ("AUB")     100.0%  *
          * XYZ Entertainment Pty Limited ("XYZ                     *
          *  Entertainment")                                 50.0%  *
          *New Zealand:                                             *
          * Telstra Saturn Limited ("TelstraSaturn")         50.0%  *
          *                                                         *
          ***********************************************************

As of December 31, 2000, the Company's  working capital and projected  operating
cash flow are not sufficient to fund its budgeted  expenditures and pay interest
on its  indebtedness  over the next 12 months.  Based on current  plans,  Austar
United  will need  approximately  A$135.5  ($75.7)  million,  in addition to its
$106.2  million  of cash on hand,  to  continue  to fund the  operations  of its
business and cover the variable capital  expenditure cost of getting digital set
top boxes and broadband  data  equipment into homes and businesses in its market
in regional Australia and New Zealand.  In March 2001, Austar United announced a
A$200.0 ($111.8) million pro rata renounceable rights issue which is expected to
be completed no later than the end of May 2001. United will underwrite the issue
and subscribe for its pro rata  entitlement.  In addition,  United has agreed to
acquire any shares not subscribed to by other shareholders. The Company believes
the proceeds from this offering will be sufficient for Austar  United's  funding
requirements  through 2001.  The Company's  senior  discount notes (the "Notes")

                                      F-7
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

begin accruing interest on a cash-pay basis May 15, 2001, with the first payment
of $34.5 million due November 15, 2001. The Company is considering  alternatives
to payment of this interest, including refinancing of the Notes. There can be no
assurance  that the Company will be  successful in obtaining all or a portion of
its anticipated funding needs.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States ("U.S.  GAAP")  requires  management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

The accompanying  consolidated  financial statements include the accounts of the
Company and all subsidiaries where the Company exercises a controlling financial
interest  through  the  ownership  of a majority  voting  interest.  The Company
consolidated the operations of its New Zealand subsidiary,  Saturn, from July 1,
1996  through  December 31,  1998.  During the first seven  months of 1999,  the
Company  accounted for its investment in Saturn under the equity method in order
to  comply  with the  consensus  guidance  of the  Emerging  Issues  Task  Force
regarding  Issue 96-16 ("EITF  96-16"),  and related rules of the Securities and
Exchange  Commission  ("SEC"),   because  the  minority  shareholder  of  Saturn
("SaskTel")  had  participating  approval or veto rights with respect to certain
significant decisions of Saturn in the ordinary course of business.  Immediately
prior to Austar United's initial public offering  ("Austar United IPO"),  Austar
United  issued  13,659,574  shares of Austar  United to SaskTel  for their 35.0%
interest in Saturn and began consolidating  Saturn's results effective August 1,
1999. Effective April 1, 2000, the Company again discontinued  consolidating the
results of Saturn due to the formation of TelstraSaturn,  a 50/50 joint venture,
which is accounted for under the equity  method.  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS AND SHORT-TERM LIQUID INVESTMENTS

Cash and cash equivalents  include cash and investments with original maturities
of less than three months. Short-term liquid investments include certificates of
deposit,   commercial  paper  and  government  securities  which  have  original
maturities  greater  than three months but less than twelve  months.  Short-term
liquid investments are classified as available-for-sale and are reported at fair
market value.

INVENTORIES

Inventories  are  stated at the  lower of cost  (first-in,  first-out  basis) or
market.

INVESTMENTS  IN AND ADVANCES TO  AFFILIATED  COMPANIES,  ACCOUNTED FOR UNDER THE
EQUITY METHOd

For those investments in unconsolidated  subsidiaries and companies in which the
Company's voting interest is 20.0% to 50.0%, the Company's  investments are held
through a combination  of voting common stock,  preferred  stock,  debentures or
convertible debt and/or the Company exerts  significant  influence through board
representation  and  management  authority,  the equity  method of accounting is
used.  Under this  method,  the  investment,  originally  recorded  at cost,  is
adjusted to  recognize  the  Company's  proportionate  share of net  earnings or
losses of the  affiliate,  limited to the extent of the Company's  investment in
and advances to the  affiliate,  including any debt  guarantees or other funding
commitments.  The  Company's  proportionate  share of net  earnings or losses of
affiliates  includes  the  amortization  of the  excess  of its  cost  over  its
proportionate interest in each affiliate's net tangible assets.

PROPERTY, PLANT AND EQUIPMENT

Property,  plant  and  equipment  is stated  at cost.  Additions,  replacements,
installation costs and major improvements are capitalized,  and costs for normal
repair and  maintenance of property,  plant and equipment are charged to expense
as incurred.  Upon disconnection of a microwave multi-point  distribution system
("MMDS") or direct-to-home  ("DTH") subscriber,  the remaining book value of the
subscriber   equipment,   excluding   converters   which  are   recovered   upon
disconnection,  and the unamortized portion of capitalized labor are written off
and accounted for as additional depreciation expense. Depreciation is calculated
using the straight-line method over the estimated economic life of the asset.

                                      F-8
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The  economic  lives of property,  plant and  equipment  at  acquisition  are as
follows:

      Subscriber premises equipment and converters..........  3-10 years
      MMDS/DTH distribution facilities......................  5-10 years
      Cable distribution networks...........................  5-10 years
      Office equipment, furniture and fixtures..............  3-10 years
      Buildings and leasehold improvements..................  3-10 years
      Other.................................................  3-10 years

GOODWILL AND OTHER INTANGIBLE ASSETS

The excess of investments  in  consolidated  subsidiaries  over the net tangible
asset value at acquisition is amortized using the  straight-line  method over 15
years.  The acquisition of MMDS licenses has been recorded at fair market value,
and  amortization  expense is computed using the  straight-line  method over the
term of the  license,  up to a maximum of 15 years.  Spectrum  license  fees are
amortized over the term of the license, up to a maximum of 15 years.

RECOVERABILITY OF TANGIBLE AND INTANGIBLE ASSETS

The  Company  evaluates  the  carrying  value  of all  long-lived  tangible  and
intangible  assets whenever events or circumstances  indicate the carrying value
of assets may exceed their recoverable amounts. An impairment loss is recognized
when the  estimated  future  cash  flows  (undiscounted  and  without  interest)
expected to result from the use of an asset are less than the carrying amount of
the asset. Measurement of an impairment loss is based on fair value of the asset
if the asset is expected to be held and used,  which would generally be computed
using discounted cash flows. Measurement of an impairment loss for an asset held
for sale would be based on fair market value less estimated costs to sell.

DEFERRED FINANCING COSTS

Costs to obtain debt  financing are  capitalized  and amortized over the life of
the debt facility using the effective interest method.

SUBSCRIBER PREPAYMENTS AND DEPOSITS

Payments  received in advance  for pay  television  services  are  deferred  and
recognized as revenue when the  associated  services are provided.  Deposits are
recorded  as a  liability  upon  receipt and  refunded  to the  subscriber  upon
disconnection.

REVENUE RECOGNITION

Revenue is primarily  derived  from the sale of pay  television,  telephone  and
Internet  data  services  to  subscribers  and is  recognized  in the period the
related  services are  provided.  Initial  installation  fees are  recognized as
revenue  in  the  period  in  which  the  installation  occurs,  to  the  extent
installation  fees are equal to or less than  direct  selling  costs,  which are
expensed.  To the extent  installation  fees exceed direct  selling  costs,  the
excess fees are deferred and amortized  over the average  contract  period.  All
installation   fees  and  related  costs  with  respect  to  reconnections   and
disconnections  are  recognized  in the  period  in which  the  reconnection  or
disconnection  occurs because  reconnection fees are charged at a level equal to
or less than related reconnection costs.

CONCENTRATION OF CREDIT RISK

Financial  instruments that potentially subject the Company to concentrations of
credit risk  consist  primarily of  subscriber  receivables.  Concentrations  of
credit risk with respect to subscriber  receivables are limited due to the large
number of customers comprising the Company's customer base.

STOCK-BASED COMPENSATION

Stock-based  compensation is recognized using the intrinsic value method for the
Austar United Plan,  which results in  compensation  expense for the  difference
between  the grant  price and the fair market  value of the  ordinary  shares of
Austar United on the initial  public  offering date of July 27, 1999 for options
granted prior to July 27, 1999.

STAFF ACCOUNTING BULLETIN NO. 51 ("SAB 51") ACCOUNTING POLICY

Gains realized as a result of stock issuances by the Company's  subsidiaries are
recorded in the statement of operations,  except for any transactions which must
be credited directly to equity in accordance with the provisions of SAB 51.

                                      F-9
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

INCOME TAXES

The Company accounts for income taxes under the asset and liability method which
requires  recognition  of deferred tax assets and  liabilities  for the expected
future income tax  consequences of transactions  which have been included in the
financial statements or tax returns. Under this method,  deferred tax assets and
liabilities  are  determined  based  on the  difference  between  the  financial
statement  and tax basis of assets,  liabilities  and loss  carryforwards  using
enacted tax rates in effect for the year in which the  differences  are expected
to reverse. Net deferred tax assets are then reduced by a valuation allowance if
management believes it more likely than not that they will not be realized.

BASIC AND DILUTED NET (LOSS) INCOME PER SHARE

Basic net (loss)  income per share is  determined  by dividing net (loss) income
available to common stockholders by the weighted-average number of common shares
outstanding during each period. Diluted net (loss) income per share includes the
effects  of  potentially  issueable  common  stock,  but only if  dilutive.  The
Company's warrants (see Note 8) are included in the Company's diluted net income
per share amounts for 1999.

FOREIGN OPERATIONS AND FOREIGN EXCHANGE RATE RISK

The functional  currency for the Company's foreign  operations is the applicable
local currency for each  affiliate  company.  Assets and  liabilities of foreign
subsidiaries  are translated at exchange rates in effect at period-end,  and the
statements of operations and cash flows are  translated at the average  exchange
rates during the period.  Exchange  rate  fluctuations  on  translating  foreign
currency financial  statements into U.S. dollars that result in unrealized gains
or losses are referred to as  translation  adjustments.  Cumulative  translation
adjustments are recorded as a separate  component of  stockholders'  deficit and
are included in other cumulative comprehensive (loss) income.

Transactions  denominated  in  currencies  other  than the  local  currency  are
recorded based on exchange rates at the time such transactions arise. Subsequent
changes in  exchange  rates  result in  transaction  gains and losses  which are
reflected in income as unrealized (based on period-end translations) or realized
upon settlement of the transactions.

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

Certain of the  Company's  foreign  operating  companies  have notes payable and
notes  receivable  that are  denominated  in a  currency  other  than  their own
functional currency.  In general, the Company and the operating companies do not
execute hedge  transactions to reduce the Company's exposure to foreign currency
exchange rate risks. Accordingly, the Company may experience economic loss and a
negative  impact on earnings and equity with respect to its holdings solely as a
result of foreign currency exchange rate fluctuations.

NEW ACCOUNTING PRINCIPLES

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  SFAS  133,  accounting  for  changes  in fair  market  value of a
derivative  depends on its intended use and designation.  In June 1999, the FASB
approved  Statement of Financial  Accounting  Standard No. 137,  "Accounting for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of FASB  Statement No. 133 ("SFAS 137").  SFAS 137 amends the effective  date of
SFAS 133, which is effective for the Company's  first quarter 2001. The adoption
does not have a material effect on the Company's results of operations.

RECLASSIFICATIONS

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

                                      F-10
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.   ACQUISITIONS AND OTHER

NON-CONSOLIDATED (EQUITY METHOD) ENTITIES

Effective  January 20, 2000,  AUB acquired a 50.0% interest in Massive Media Pty
Limited  ("Massive  Media") for A$4.4  ($2.8)  million  including  A$0.6  ($0.4)
million in Austar United shares and A$3.8 ($2.4) million in cash.  Massive Media
owns 100% of Massive Interactive Pty Limited, an Internet  development  company,
and 75.0% of Massive  Technologies  Pty Limited,  a software  company focused on
Internet development.

On April 1, 2000,  Saturn  purchased  Paradise Net Limited,  an Internet Service
Provider ("ISP") in New Zealand for cash of approximately A$14.6 ($8.4) million,
A$4.9 ($2.8) million of which was funded by Austar United.  Paradise Net Limited
was merged into TelstraSaturn along with the rest of Saturn's operations.

On April 6, 2000,  Austar  United  merged Saturn with Telstra NZ, a wholly owned
subsidiary of Telstra, to form a 50/50 joint venture, TelstraSaturn.  Telstra is
the largest telecommunications company in Australia. TelstraSaturn offers voice,
data and video to New Zealand's business and residential market.

CONSOLIDATED ENTITIES

On April 27, 2000, AUB purchased  Artson Pty Limited,  an ISP that does business
under the name "OntheNet" for A$6.0 ($3.5) million in cash.  "OntheNet" operates
on the Gold Coast in Queensland, Australia.

On June 27,  2000,  AUB acquired  the  business  assets of  Ultranet,  an ISP in
Australia, for A$1.8 ($1.1) million payable over four months.

On October 6, 2000,  Austar United  acquired  certain assets of eisa Limited,  a
Melbourne based ISP, for A$14.3 ($8.4) million.

On October 19,  2000,  TVSN  Limited  ("TVSN")  shareholders  voted to accept an
alliance  between TVSN and Austar  United.  Austar United  received 51.2% of the
shares  in  TVSN,  on a  fully  diluted  basis,  in  return  for  procuring  its
subsidiaries  to carry the TVSN content.  For accounting  purposes,  the Company
recorded this as a partial sale of the assets contributed to TVSN,  resulting in
a gain of $9.9 million.

SPECTRUM ACQUISITIONS

In February 2000,  Austar United paid A$43.1 ($24.9) million to convert its five
year apparatus licenses to fifteen year spectrum licenses.

In October 2000, the Company was successful in acquiring  additional spectrum in
Sydney and  Melbourne  in an  auction  conducted  by the ACA for  A$14.1  ($8.1)
million.

In November 2000, Austar United purchased from Television and Radio Broadcasting
Services  Pty Limited  ("TARBS")  certain  spectrum  rights for A$140.0  ($80.7)
million in cash, of which A$110.0 ($63.4) million has been paid. The balance due
of A$30.0 ($17.3) million plus interest is payable on or before August 31, 2001.

OTHER

On March 29,  2000,  Austar  United  sold 20.0  million  ordinary  shares on the
Australian  Stock  Exchange (the "March 2000  Offering")  at Australian  dollars
("A$")  8.50  ($5.20) per share for gross and net  proceeds of A$170.0  ($104.0)
million and A$167.5 ($102.4) million, respectively.  Based on the carrying value
of the Company's  investment in Austar United as of March 29, 2000,  the Company
recognized a gain of $61.2  million  resulting  from the step-up in the carrying
amount of the Company's  investment in Austar United, in accordance with SAB 51.
No deferred taxes were recorded related to this gain due to the Company's intent
on holding its investment in Austar United indefinitely.

In June 1999, the 25.0% interest in XYZ Entertainment  held by UAP was exchanged
for an 8.3% ownership interest in United Austar,  Inc.  increasing the Company's
interest  in XYZ  Entertainment  to 50.0%.  Based on the  carrying  value of the
Company's  investment in United Austar,  Inc., the Company  recognized a gain of
$22.3  million  from  the  resulting  step-up  in  the  carrying  amount  of its
investment in United Austar, Inc., in accordance with SAB 51.

In June 1999, the Company's  interest in Austar,  XYZ  Entertainment  and Saturn
were  contributed  to Austar  United in exchange for new shares issued by Austar
United. On July 27, 1999, Austar United acquired from SaskTel its 35.0% interest
in Saturn in exchange for approximately  13.7 million of Austar United's shares,
thereby  increasing Austar United's  ownership  interest in Saturn from 65.0% to
100%. In addition,  Austar United successfully  completed the Austar United IPO,
selling 103.5 million shares on the Australian  Stock Exchange raising gross and
net proceeds at A$4.70 ($3.03) per share of A$486.5 ($313.6) million and A$453.6

                                      F-11
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

($292.8)  million,  respectively.  Based on the carrying  value of the Company's
investment in Austar United as of July 27, 1999,  the Company  recognized a gain
of $226.5  million  from the  resulting  step-up in the  carrying  amount of the
Company's  investment in Austar United,  in accordance  with SAB 51. No deferred
taxes were recorded  related to this gain due to the Company's intent on holding
its investment in Austar United indefinitely.

The  Austar  United  IPO and  concurrent  issuances  of shares in  exchange  for
additional assets reduced the Company's ownership interest in Austar United from
91.7% to approximately  69.2%. The Company  purchased  additional  shares in its
subsidiary,  United Austar,  Inc.,  from UAP for $65.6 million during the fourth
quarter 2000,  bringing the Company's  ownership interest in Austar United as of
December  31,  2000 to 72.9%.  Including  all vested  stock  options  granted to
employees,  the Company's ownership interest in Austar United on a fully diluted
basis was approximately 70.4% at December 31, 2000.

4.   CASH AND CASH EQUIVALENTS AND SHORT-TERM LIQUID INVESTMENTS
<TABLE><CAPTION>
                                                                            As of December 31, 2000
                                                                ----------------------------------------------
                                                                    Cash          Short-term
                                                                  and Cash          Liquid
                                                                Equivalents      Investments         Total
                                                                -------------    -------------    ------------
                                                                                (In thousands)
     <S>                                                           <C>             <C>              <C>
     Cash....................................................      $5,617          $      -         $  5,617
     Certificates of deposit.................................           -           101,376          101,376
     Government securities...................................           -               101              101
                                                                   ------          --------         --------
        Total................................................      $5,617          $101,477         $107,094
                                                                   ======          ========         ========

                                                                            As of December 31, 1999
                                                                ----------------------------------------------
                                                                    Cash          Short-Term
                                                                  and Cash          Liquid
                                                                Equivalents      Investments         Total
                                                                -------------    -------------    ------------
                                                                                (In thousands)

     Cash....................................................      $6,028          $     -          $  6,028
     Certificates of deposit.................................           -           269,043          269,043
     Government securities...................................           -               350              350
                                                                   ------          --------         --------
        Total................................................      $6,028          $269,393         $275,421
                                                                   ======          ========         ========
</TABLE>

5.   INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANIES
<TABLE>
<CAPTION>
                                                           As of December 31, 2000
                           --------------------------------------------------------------------------------------
                              Investments in                       Cumulative Share       Cumulative
                              and Advances to        Dividends       in Results of        Translation
                           Affiliated Companies      Received     Affiliated Companies    Adjustments      Total
                           --------------------    ------------   --------------------    -----------     -------
                                                              (In thousands)
     <S>                         <C>                 <C>              <C>                   <C>           <C>
     XYZ Entertainment......    $ 44,306             $(5,464)         $(11,515)             $(1,387)      $25,940
     TelstraSaturn..........      66,629                   -           (24,503)              (5,007)       37,119
     Other..................       2,860                   -              (614)                (314)        1,932
                                --------             -------          --------              -------       -------
          Total.............    $113,795             $(5,464)         $(36,632)             $(6,708)      $64,991
                                ========             =======          ========              =======       =======

                                                          As of December 31, 1999
                           --------------------------------------------------------------------------------------
                              Investments in                       Cumulative Share       Cumulative
                              and Advances to        Dividends       in Results of        Translation
                           Affiliated Companies      Received     Affiliated Companies    Adjustments      Total
                           --------------------    ------------   --------------------    -----------     -------
                                                              (In thousands)

     XYZ Entertainment......    $ 44,306             $     -          $(18,564)             $ 2,804       $28,546
                                --------             -------          --------              -------       -------
          Total.............    $ 44,306             $     -          $(18,564)             $ 2,804       $28,546
                                ========             =======          ========              =======       =======
</TABLE>

                                      F-12
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December  31, 2000 and 1999,  the  Company had the  following  differences
related  to the  excess  of its cost  over its  proportionate  interest  in each
affiliate's net tangible assets  included in the above table.  Such  differences
are being amortized over 15 years.
<TABLE><CAPTION>
                                                                  As of December 31, 2000      As of December 31, 1999
                                                                ---------------------------  ---------------------------
                                                                   Basis      Accumulated       Basis      Accumulated
                                                                Difference    Amortization   Difference    Amortization
                                                                ------------ --------------  ------------ --------------
                                                                                     (In thousands)
     <S>                                                          <C>           <C>           <C>            <C>
     XYZ Entertainment.....................................       $22,483       $(3,159)      $25,791        $(1,609)
     TelstraSaturn.........................................        21,405          (995)            -              -
                                                                  -------       -------       -------        -------
          Total............................................       $43,888       $(4,154)      $25,791        $(1,609)
                                                                  =======       =======       =======        =======
</TABLE>

TELSTRASATURN

Condensed  financial  information for TelstraSaturn stated in U.S. dollars is as
follows:
<TABLE>
<CAPTION>
                                                                   As of December 31,
                                                                ------------------------
     BALANCE SHEET                                                  2000       1999 (1)
                                                                -----------  -----------
                                                                   (In thousands)
     <S>                                                         <C>          <C>
     Current assets...........................................   $ 27,282     $ 10,537
     Non-current assets.......................................    191,301       99,145
                                                                 --------     --------
          Total assets........................................   $218,583     $109,682
                                                                 ========     ========

     Current liabilitites.....................................   $ 35,874     $ 34,612
     Non-current liabilities..................................    142,875       58,230
     Minority interest........................................      6,415        6,719
     Shareholder's equity.....................................     33,419       10,121
                                                                 --------     --------
          Total liabilities and stockholders' equity..........   $218,583     $109,682
                                                                 ========     ========
</TABLE>
<TABLE>
<CAPTION>

                                                                                                    For the Years
                                                                 April 1 to   January 1 to        Ended December 31,
                                                                December 31,   March 31,       ------------------------
     STATEMENT OF OPERATIONS                                        2000        2000 (1)         1999 (1)     1998 (1)
                                                                -----------  --------------    -----------  -----------
                                                                                      (In thousands)
     <S>                                                         <C>           <C>              <C>          <C>

     Revenue..................................................   $ 64,672      $  5,293         $ 10,917     $  1,693
     Operating, selling, general and administrative expense...    (92,104)       (5,949)         (17,528)     (12,206)
     Depreciation and amortization............................    (20,276)       (3,068)          (7,996)      (3,435)
                                                                 ---------     --------         --------     --------
          Operating loss......................................    (47,708)       (3,724)         (14,607)     (13,948)
     Other....................................................     (1,297)          190           (1,328)      (1,293)
                                                                 --------      --------         --------     --------
          Net loss............................................   $(49,005)     $ (3,534)        $(15,935)    $(15,241)
                                                                 ========      ========         ========     ========

     (1)  Represents  condensed financial  information for Saturn,  prior to the
          TelstraSaturn merger.
</TABLE>
                                      F-13
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.  PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                          <C>            <C>
     Subscriber premises equipment and converters...............  $292,213       $276,725
     MMDS distribution facilities...............................    60,597         64,373
     Cable distribution networks................................     2,655         91,298
     Office equipment, furniture and fixtures...................    25,504         23,111
     Buildings and leasehold improvements.......................     5,670          5,645
     Other......................................................    32,775         20,133
                                                                  --------       --------
                                                                   419,414        481,285
        Accumulated depreciation................................  (294,935)      (261,891)
                                                                  --------       --------
        Net property, plant and equipment.......................  $124,479       $219,394
                                                                  ========       ========
</TABLE>
7.  GOODWILL AND OTHER INTANGIBLE ASSETS
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                          <C>            <C>
     Goodwill...................................................  $159,920       $104,363
     License fees and other intangible assets...................   114,555         10,519
                                                                  --------       --------
                                                                   274,475        114,882
     Accumulated amortization...................................   (20,088)       (23,536)
                                                                  --------       --------
        Net goodwill and other intangible assets................  $254,387       $ 91,346
                                                                  ========       ========
</TABLE>

8.  SENIOR DISCOUNT NOTES
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                          <C>            <C>
     May 1996 Notes.............................................  $421,372       $369,111
     September 1997 Notes.......................................    44,869         38,834
                                                                  --------       --------
        Total senior notes (the "Notes")........................  $466,241       $407,945
                                                                  ========       ========
</TABLE>

THE NOTES

The 14.0% senior notes were issued by the Company in May 1996 and September 1997
at a discount from their principal amount of $488.0 million,  resulting in gross
proceeds of $255.0 million. On and after May 15, 2001, cash interest will accrue
and will be payable  semi-annually  on each May 15 and November  15,  commencing
November 15, 2001.  The Notes are due May 15, 2006.  Effective May 16, 1997, the
interest  rate on these  notes  increased  by an  additional  0.75% per annum to
14.75%. On October 14, 1998, the Company consummated an equity sale resulting in
gross proceeds to the Company of $70.0 million,  reducing the interest rate from
14.75% to 14.0% per annum.  Due to the increase in the interest  rate  effective
May 16, 1997 until  consummation of the equity sale, the Notes will accrete to a
principal  amount of $492.9  million  on May 15,  2001,  the date cash  interest
begins to accrue.  The quoted fair market value of these notes was approximately
$320.4   million  and  $414.0   million  as  of  December  31,  2000  and  1999,
respectively.

In November 1997,  pursuant to the terms of the indentures  governing the Notes,
the Company issued warrants to purchase  488,000 shares of its common stock. The
warrants  are  exercisable  through May 15, 2006 at a price of $10.45 per share,
which would result in gross proceeds of $5.1 million upon exercise. The warrants
were valued at $3.7 million and have been reflected as an additional discount to
the Notes on a pro rata basis and as an increase in additional  paid-in capital.
Warrants to acquire 50 shares were exercised November 24, 1999. No warrants were
exercised during 2000.
                                      F-14
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.  OTHER LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                          <C>            <C>
     Austar Bank Facility.......................................  $223,501       $202,703
     Saturn Bank Facility.......................................         -         57,685
     Capitalized leases and other...............................     4,759          2,263
                                                                  --------     ----------
                                                                   228,260        262,651
        Less current portion....................................    (1,366)        (1,500)
                                                                  --------       --------
        Total other long-term debt..............................  $226,894       $261,151
                                                                  ========       ========
</TABLE>

AUSTAR BANK FACILITY

On April 23,  1999,  Austar  executed a new  A$400.0  million  ($262.3  million)
syndicated  senior secured debt facility  ("Austar Bank  Facility") to refinance
the existing  bank  facility and to fund  Austar's  subscriber  acquisition  and
working capital needs. The Austar Bank Facility consists of two  sub-facilities:
(i) A$200.0  million  amortizing  term  facility  ("Tranche 1") and (ii) A$200.0
million cash advance facility ("Tranche 2"). Tranche 1 was used to refinance the
existing bank  facility,  and Tranche 2 is available  upon the  contribution  of
additional equity on a 2:1 debt-to-equity  basis. The Austar Bank Facility bears
interest at the professional market rate in Australia plus a margin ranging from
1.75% to 2.25% based upon  certain  debt to cash flow  ratios.  The average rate
incurred on this facility was 7.4% and 7.6% during the years ended  December 31,
2000 and  1999,  respectively.  The  Austar  Bank  Facility  is fully  repayable
pursuant to an  amortization  schedule  beginning  December  31, 2002 and ending
March 31, 2006. As of December 31, 2000,  Austar had drawn A$200.0 million under
Tranche 1 and A$200.0 million under Tranche 2, for a total  outstanding  balance
of A$400.0 ($223.5) million.

DEBT MATURITIES

The  Company's  maturities  of its  other  long-term  debt  are as  follows  (in
thousands):

     Year ended December 31, 2001...........................  $  1,366
     Year ended December 31, 2002...........................     8,412
     Year ended December 31, 2003...........................    40,264
     Year ended December 31, 2004...........................    63,432
     Year ended December 31, 2005...........................    76,278
     Thereafter.............................................    38,508
                                                              --------
                                                              $228,260
                                                              ========
OTHER FINANCIAL INSTRUMENTS

Interest  rate swap  agreements  are used by the Company  from time to time,  to
manage  interest rate risk on its floating rate debt  facilities.  Interest rate
swaps are entered into depending on the Company's  assessment of the market, and
generally  are used to  convert  the  floating  rate  debt to fixed  rate  debt.
Interest  differentials  paid  or  received  under  these  swap  agreements  are
recognized  over the life of the contracts as adjustments to the effective yield
of the underlying  debt, and related amounts payable to, or receivable from, the
counterparties are included in the consolidated balance sheets.

Currently,  the Company has four  interest  rate swaps to manage  interest  rate
exposure on the Austar Bank  Facility.  Two of these swap  agreements  expire in
2002 and  effectively  convert an aggregate  principal  amount of A$50.0 ($27.9)
million of variable rate,  long-term debt into fixed rate borrowings.  The other
two swap agreements expire in 2004 and convert an aggregate  principal amount of
A$100.0  ($55.9)  million  of  variable  rate,  long-term  debt into  fixed rate
borrowings. As of December 31, 2000, the weighted-average fixed rate under these
agreements   was  5.7%   compared  to  a   weighted-average   variable  rate  of
approximately 8.5%.

Fair values of the  interest  rate swap  agreements  are based on the  estimated
amounts that the Company would receive or pay to terminate the agreements at the
reporting  date,  taking into  account  current  interest  rates and the current
creditworthiness of the counterparties.

                                      F-15
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.  RELATED PARTY

Effective  May 1,  1996,  the  Company  and  United  Management,  Inc.  ("United
Management"),  an indirect wholly owned subsidiary of United, executed a 10-year
management  services agreement (the "Management  Agreement"),  pursuant to which
United  Management  performs  certain  administrative,   accounting,   financial
reporting and other services for the Company, which has no separate employees of
its own.  Pursuant to the  Management  Agreement,  the  management fee was $0.75
million for the first year of such  agreement  (beginning  May 1, 1996),  and it
increases on each anniversary date of the Management Agreement by 8.0% per year.
Effective March 31, 1997, United Management  assigned its rights and obligations
under the  Management  Agreement to UAP, the  Company's  immediate  parent,  and
extended  the  agreement  for 20 years  from  that  date  (the  "UAP  Management
Agreement").  In  addition,  the  Company  reimburses  UAP  or  United  for  any
out-of-pocket  expenses  including travel,  lodging and entertainment  expenses,
incurred by UAP or United on behalf of the Company. For the years ended December
31,  2000,  1999 and 1998,  the  Company  recorded  nil,  $3.2  million and $4.6
million, respectively, in corporate general and administrative expense allocated
from United,  due to excess  expense  incurred at United not  considered  in the
management agreement.  For the year ended  December 31, 2000, 1999 and 1998, the

Company recorded $1.0 million, $0.9 million and $0.9 million,  respectively,  in
management  fees due from the Company to UAP.  The Company also  recorded  $17.6
million  of  non-cash  stock-based  compensation  expense  related  to UAP stock
appreciation rights for the period January 1, 1999 through the Austar United IPO
date.  This plan was  discontinued  in July 1999 upon  Austar  United's  initial
public offering.

Effective June 24, 1999, United and Austar United executed a management services
agreement  pursuant to which United  performs  certain  technical and consulting
services  in return for a monthly  management  fee.  The  monthly fee payable by
Austar  United to United in 2000 is $0.2  million per month.  This amount may be
adjusted  before  January 1 of each year by the board of directors of United but
may not  increase  by more  than  15.0% in any one  year.  This  agreement  also
requires that Austar United  reimburse  United for all direct and other expenses
reasonably  incurred by United on behalf of Austar  United.  The agreement  will
continue through December 31, 2010.

Austar and Saturn  were  parties to  technical  assistance  agreements  with UAP
whereby  such  operating  companies  paid to UAP fees based on their  respective
gross revenues. The operating systems reimbursed United for certain direct costs
incurred  by  United,   including  salaries  and  benefits  relating  to  senior
management  positions,  pursuant  to  the  terms  of  the  technical  assistance
agreements. For the years ended December 31, 1999 and 1998, the Company recorded
$3.2 million and $4.1 million,  respectively,  in related party  management fees
under  these  agreements.  Effective  June 24,  1999,  the  rights  under  these
management  fee  agreements  were  assigned  to  Austar  United  as  part of the
restructuring  associated with the Austar United IPO.  Accordingly,  the related
party  management  fees  recorded  for the year  ended  December  31,  2000 were
eliminated during the Austar United consolidation.

Included in the amount due to parent is the following:
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                          <C>            <C>
     United A/P.................................................  $ 2,972        $ 1,977
     Austar United technical assistance agreement obligations,
      including management fees of $3,600 and $1,200,
      respectively..............................................    9,550          2,874
     Austar technical assistance agreement obligations,
      including deferred management fees of $8,068 and $9,472,
      respectively (1)..........................................   11,830         13,889
     Saturn technical assistance agreement obligations,
      including deferred management fees of $0 and $149,
      respectively..............................................        -          1,820
     Other......................................................    2,299          1,815
                                                                  -------        -------
                                                                   26,651         22,375
          Less current portion..................................  (18,583)       (12,754)
                                                                  -------        -------
          Total due to parent...................................  $ 8,068        $ 9,621
                                                                  =======        =======
</TABLE>
     (1)  Austar United and UAP have the option of converting  these  management
          fees into equity.

                                      F-16
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.  STOCKHOLDERS' DEFICIT

EQUITY TRANSACTIONS OF SUBSIDIARY

Variable  plan  accounting  for stock  options and the  recognition  of deferred
compensation expense by Austar United affect the equity accounts of the Company.
The following  represents the effect on additional  paid-in capital and deferred
compensation as a result of these equity transactions:
<TABLE>
<CAPTION>
                                                                   For the Years Ended
                                                                       December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                          <C>            <C>
     Variable plan accounting for stock options.................  $     -        $40,883
     Deferred compensation expense..............................        -        (40,883)
     Amortization of deferred compensation......................    6,507         21,024
                                                                  -------        -------
          Total.................................................  $ 6,507        $21,024
                                                                  =======        =======
</TABLE>

AUSTAR UNITED PLAN

On June 17, 1999,  Austar  United  established  a stock option plan (the "Austar
United Plan").  Effective on Austar United's IPO date of July 27, 1999,  certain
employees  of United and Austar  United were  granted  options  under the Austar
United Plan in direct  proportion to their previous holding of UAP options under
the UAP Plan along with retroactive  vesting through the initial public offering
date to reflect  vesting under the UAP Plan. The maximum term of options granted
under the Austar  United Plan is ten years.  The options  vest in equal  monthly
increments  over the four-year  period  following  the date of grant.  Under the
Austar United Plan,  options to purchase a total of 28,760,709  shares have been
authorized,  of which 1,115,580 were available for grant. The Austar United Plan
was accounted for as a variable plan prior to Austar United's IPO and as a fixed
plan  effective  July 27, 1999.  For the years ended December 31, 2000 and 1999,
$9.4  million  and $4.9  million,  respectively,  of  compensation  expense  was
recognized under this plan in the statement of operations.

For purposes of the pro forma  disclosures  presented  below,  Austar United has
computed the fair values of all options  granted during the years ended December
31, 2000 and 1999 using the  Black-Scholes  single-option  pricing model and the
following weighted-average assumptions:
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
     <S>                                                          <C>            <C>
     Risk-free interest rate....................................   5.27%           5.81%
     Expected life.............................................. 7 years         7 years
     Expected volatility........................................  55.48%          40.44%
     Expected dividend yield....................................      0%              0%
</TABLE>

The total fair value of  options  granted  was  approximately  A$5.5  ($3.1) and
A$88.0  ($57.7)  million  for the  years  ended  December  31,  2000  and  1999,
respectively.  These amounts are amortized using the  straight-line  method over
the vesting period of the options. Cumulative compensation expense recognized in
pro forma net  income,  with  respect to  options  that are  forfeited  prior to
vesting,  is adjusted as a reduction  of pro forma  compensation  expense in the
period of forfeiture.  For the years ended December 31, 2000 and 1999, pro forma
stock-based  compensation,  net of the effect of  forfeitures  and net of actual
compensation  expense recorded in the  consolidated  statement of operations was
A$22.0 ($11.5) million and a credit of A$12.1 ($7.9) million, respectively.

                                      F-17
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of stock option activity for the Austar United Plan is as follows:
<TABLE>
<CAPTION>
                                                                            For the Years Ended December 31,
                                                          -------------------------------------------------------------------
                                                                        2000                              1999
                                                          ---------------------------------   -------------------------------
                                                             Number           Weighted-          Number         Weighted-
                                                               of              Average             of            Average
                                                             Shares        Exercise Price        Shares       Exercise Price
                                                          -------------   -----------------   -------------  ----------------
     <S>                                                    <C>                <C>             <C>               <C>
     Outstanding at beginning of period.................    24,845,031         A$  2.27                  -       A$     -
     Granted during the period..........................     2,967,500         A$  2.33         25,631,736       A$  2.26
     Cancelled during the period........................      (851,652)        A$  4.39           (102,455)      A$  3.75
     Exercised during the period........................      (310,330)        A$  3.09           (684,250)      A$  1.83
                                                            ----------         --------         ----------       --------

     Outstanding at end of period.......................    26,650,549         A$  2.20         24,845,031       A$  2.27
                                                            ==========         ========         ==========       ========

     Exercisable at end of period.......................    17,279,095         A$  2.01         11,564,416       A$  1.90
                                                            ==========         ========         ==========       ========
</TABLE>

The combined weighted-average fair values and weighted-average exercise prices
of options are as follows:
<TABLE>
<CAPTION>
                                                                         For the Years Ended December 31,
                                              ----------------------------------------------------------------------------------
                                                                2000                                       1999
                                              ---------------------------------------    ---------------------------------------
                                                 Number         Fair       Exercise         Number         Fair       Exercise
          Exercise Price                       of Options       Value        Price        of Options      Value         Price
------------------------------------------    -------------   ----------   ----------    -------------  ----------    ----------
<S>                                             <C>           <C>           <C>            <C>           <C>           <C>
Less than market price....................      2,627,500      A$  1.60     A$  1.75       22,334,236    A$  3.58      A$  1.91
Equal to market price.....................         10,000      A$  3.86     A$  6.25        3,222,500    A$  2.47      A$  4.70
Greater than market price.................        330,000      A$  3.75     A$  6.80           75,000    A$  2.43      A$  4.70
                                                ---------      --------     --------       ----------    --------      --------
   Total..................................      2,967,500      A$  1.85     A$  2.33       25,631,736    A$  3.43      A$  2.26
                                                =========      ========     ========       ==========    ========      ========
</TABLE>

The following table summarizes  information about the Austar United Plan options
outstanding and exercisable at December 31, 2000:
<TABLE>
<CAPTION>
                                                                Options Outstanding                      Options Exercisable
                                                --------------------------------------------------  -----------------------------
                                                                Weighted-Average
                                                                   Remaining      Weighted-Average                Weighted-Average
                                                               Contractual Life       Exercise                        Exercise
Exercise Price Range (Australian dollars)          Number          (Years)             Price           Number          Price
------------------------------------------      -------------  -----------------  ----------------  ------------  ----------------
<S>                                               <C>                <C>              <C>            <C>              <C>
A$1.75 - A$1.80...........................        23,166,646         8.71             A$  1.79       16,090,607       A$  1.80
A$4.70....................................         3,163,174         8.59             A$  4.70        1,114,790       A$  4.70
A$6.25 - A$6.43...........................           250,729         9.30             A$  6.42           61,875       A$  6.42
A$7.55 - A$8.28...........................            70,000         9.30             A$  8.18           11,823       A$  8.27
                                                  ----------         ----             --------       ---------        --------
   Total..................................        26,650,549         8.70             A$  2.20       17,279,095       A$  2.01
                                                  ==========         ====             ========       ==========       ========
</TABLE>

12.  INCOME TAXES

In  general,  a U.S.  corporation  may claim a foreign  tax credit  against  its
federal income tax expense for foreign income taxes paid or accrued. Because the
Company must calculate its foreign tax credit separately for dividends  received
from each  foreign  corporation  in which the Company owns 10.0% to 50.0% of the
voting stock, and because of certain other limitations, the Company's ability to
claim a  foreign  tax  credit  may be  limited,  particularly  with  respect  to
dividends  paid out of  earnings  subject to a high rate of foreign  income tax.
Generally, the Company's ability to claim a foreign tax credit is limited to the
amount of U.S. taxes the Company pays with respect to its foreign source income.

                                      F-18
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In calculating  its foreign  source income,  the Company is required to allocate
interest  expense and  overhead  incurred in the U.S.  between its  domestic and
foreign  activities.  Accordingly,  to the extent  U.S.  borrowings  are used to
finance equity contributions to its foreign subsidiaries,  the Company's ability
to claim a foreign tax credit may be significantly  reduced.  These  limitations
and the  inability of the Company to offset  losses in one foreign  jurisdiction
against  income earned in another  foreign  jurisdiction  could result in a high
effective tax rate on the Company's earnings.

The Company is included  as a member of  United's  consolidated  tax return and,
after the  offering  of the May 1996  Notes,  remained  a member  of the  United
consolidated  group.  United  and  the  Company  are  parties  to a tax  sharing
agreement that defines the parties' rights and  obligations  with respect to tax
liabilities  and benefits  relating to the Company and its operations as part of
the consolidated  group of United. In general,  United is responsible for filing
consolidated  tax returns and paying the associated  taxes, and the Company will
reimburse United for the portion of the tax cost relating to the Company and its
operations.  For financial reporting  purposes,  the Company accounts for income
taxes  as if it  filed  separate  income  tax  returns  in  accordance  with the
fundamental  provisions of the tax sharing agreement.  Any differences in income
tax expense (benefit)  allocated to the Company by United in accordance with the
tax sharing agreement and the income tax expense (benefit) will be accounted for
as a  deemed capital  distribution or contribution.  Because the  Company  holds

certain of its foreign  investments  through  affiliates  which hold investments
accounted for under the equity method in foreign  corporations,  taxable  income
(loss) generated does not flow through to the Company for U.S. federal and state
tax purposes even though the Company  records its  allocable  share of affiliate
income  (losses)  for  financial  reporting  purposes.  Accordingly,  due to the
indefinite  reversal of such amounts in future  periods,  no deferred tax assets
have  been  established  for tax basis in excess  of the  Company's  book  basis
(approximately $23.0 million and $16.0 million as of December 31, 2000 and 1999,
respectively)  in investments in affiliated  companies who, in turn, have equity
investments in foreign corporations.

The Company's  United States tax net operating  losses,  totaling  approximately
$21.6 million at December 31, 2000,  expire  beginning in 2014 through 2029. The
significant components of the net deferred tax asset are as follows:
<TABLE>
<CAPTION>
                                                                     As of December 31,
                                                                 -------------------------
                                                                    2000           1999
                                                                 ----------     ----------
                                                                      (In thousands)
     <S>                                                         <C>            <C>

Deferred tax assets:
  Basis differences in property, plant and equipment...........  $    482       $    482
  Accrued interest expense on the Notes........................    72,322         52,040
  U.S. tax net operating loss carryforward.....................     8,212          8,323
  Basis difference in marketable equity securities.............     1,696          1,696
  Other........................................................       839              -
  Tax net operating loss carryforward of consolidated foreign
   subsidiaries (1)............................................    69,725        156,470
                                                                 --------       --------
Gross deferred tax assets......................................   153,276        219,011
Deferred tax liabilities:
  Other........................................................       (67)        (1,014)
                                                                 --------       --------
Gross deferred tax liabilities.................................       (67)        (1,014)
                                                                 --------       --------
Valuation allowance for deferred tax assets....................  (153,276)      (219,011)
                                                                 --------       --------
Deferred tax liabilities, net..................................  $    (67)      $ (1,014)
                                                                 ========       ========
</TABLE>
(1)  For Australian income tax purposes, the net operating loss carryforward may
     be limited in the event of a change in control of Austar or a change in the
     business.
                                      F-19
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The difference  between income tax (benefit)  expense  provided in the financial
statements and the expected  income tax (benefit)  expense at statutory rates is
reconciled as follows:
<TABLE>
<CAPTION>
                                                                                             For the Years Ended December 31,
                                                                                     ---------------------------------------------
                                                                                         2000            1999            1998
                                                                                     -------------  ---------------  -------------
                                                                                                    (In thousands)
<S>                                                                                    <C>             <C>             <C>
Expected income tax (benefit) expense at the U.S. statutory rate of 35.0%.........     $(56,917)       $ 12,177        $(68,597)
Tax effect of permanent and other differences:
  Change in valuation reserve.....................................................       59,234          66,968          64,624
  Gain on issuance of common equity securities by subsidiary......................      (23,245)        (94,528)              -
  Non-deductible expenses and other...............................................       16,161           8,603           5,577
  International rate differences..................................................        6,483           3,325          (1,251)
  State tax, net of federal (benefit) expense.....................................       (4,879)          1,044          (6,189)
  Non-deductible interest accretion on the Notes..................................        1,886           1,693           2,605
  Amortization of outside basis differences.......................................          550             788           1,412
  Amortization of licenses........................................................            -             923           1,819
                                                                                       --------        --------        --------
Total income tax benefit (expense)................................................     $   (727)       $    993        $      -
                                                                                       ========        ========        ========
</TABLE>

SEGMENT INFORMATION

The Company's segment information is as follows:
<TABLE>
<CAPTION>
                                               For the Year Ended December 31, 2000                 As of December 31, 2000
                                      ----------------------------------------------------   -------------------------------------
                                                             Internet/                         Capital      Long-Lived     Total
                                         Video    Telephone    Data      Other     Total     Expenditures    Assets(1)     Assets
                                       --------   ---------  --------   --------  --------   ------------   -----------   --------
                                                     (In thousands)                                       (In thousands)
<S>                                    <C>         <C>        <C>       <C>       <C>           <C>           <C>         <C>
Revenue:
  Australia.........................   $163,094    $   732   $  4,189   $ 4,410   $172,425     $113,786      $124,479     $520,693
  New Zealand(2)....................        844      3,166        878         -      4,888            -             -            -
  Other.............................          -          -          -         -          -            -             -       78,558
                                       --------    -------   --------   -------   --------     --------      --------     --------
    Total...........................   $163,938    $ 3,898   $  5,067   $ 4,410   $177,313     $113,786      $124,479     $599,251
                                       ========    =======   ========   =======   ========     ========      ========     ========
Adjusted EBITDA:(3)
  Australia.........................   $(12,333)   $(3,482)  $(21,255)  $(6,528)  $(43,598)
  New Zealand(2)....................       (253)      (357)       248    (1,344)    (1,706)
  Other.............................          -          -          -    (1,369)    (1,369)
                                       --------    -------   --------   -------   --------
    Total...........................   $(12,586)   $(3,839)  $(21,007)  $(9,241)  $(46,673)
                                       ========    =======   ========   =======   ========


                                               For the Year Ended December 31, 1999                 As of December 31, 1999
                                      ----------------------------------------------------   -------------------------------------
                                                             Internet/                         Capital      Long-Lived     Total
                                         Video    Telephone    Data      Other     Total     Expenditures    Assets(1)     Assets
                                       --------   ---------  --------   --------  --------   ------------   -----------   --------
                                                     (In thousands)                                       (In thousands)
Revenue:
  Australia.........................   $145,602    $     -   $      -   $     -   $145,602     $ 94,513      $123,617     $563,627
  New Zealand(4)....................      1,279      4,107          -       734      6,120       23,306        95,777       76,139
  Other.............................          -          -          -         -           -           -             -       26,825
                                       --------    -------   --------   -------   --------     --------      --------     --------
    Total...........................   $146,881    $ 4,107   $      -   $   734   $151,722     $117,819      $219,394     $666,591
                                       ========    =======   ========  ========   ========     ========      ========     ========
Adjusted EBITDA:(3)
  Australia.........................   $(10,005)   $     -   $      -   $(4,381)  $(14,386)
  New Zealand(4)....................       (918)    (1,160)         -       (47)    (2,125)
  Other.............................          -          -          -    (4,306)    (4,306)
                                       --------    -------   --------   -------   --------
    Total...........................   $(10,923)   $(1,160)  $      -   $(8,734)  $(20,817)
                                       ========    =======   ========   =======   ========

                                      F-20
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                                               For the Year Ended December 31, 1998                 As of December 31, 1998
                                      ----------------------------------------------------   -------------------------------------
                                                             Internet/                         Capital      Long-Lived     Total
                                         Video    Telephone    Data      Other     Total     Expenditures    Assets(1)     Assets
                                       --------   ---------  --------   --------  --------   ------------   -----------   --------
                                                     (In thousands)                                       (In thousands)
Revenue:
  Australia.........................   $ 86,408    $     -   $      -   $     -   $ 86,406     $ 71,197       $110,351    $181,169
  New Zealand.......................          -          -          -         -          -            -              -      23,789
  Other.............................      3,411          -          -         -      3,411          269              -      11,074
                                       --------    -------   --------   -------   --------     --------       --------    --------
    Total...........................   $ 89,819     $    -   $      -   $     -   $ 89,819     $ 71,466       $110,351    $216,032
                                       ========    =======   ========   =======   ========     ========       ========    ========
Adjusted EBITDA:(3)
  Australia.........................   $(27,065)   $     -   $      -   $(4,124)  $(31,189)
  New Zealand.......................          -          -          -         -          -
  Other.............................       (101)         -          -    (5,474)    (5,575)
                                       --------    -------   --------   -------   --------
    Total...........................   $(27,166)   $     -   $      -   $(9,598)  $(36,764)
                                       ========    =======   ========   =======   ========
</TABLE>
(1)  Represents property, plant and equipment, net.
(2)  Represents  the period  from  January 1, 2000  through  March 31, 2000 when
     Saturn was consolidated.
(3)  "Adjusted EBITDA"  represents net operating  earnings before  depreciation,
     amortization  and  stock-based  compensation  charges.   Industry  analysts
     generally  consider  Adjusted  EBITDA to be a helpful  way to  measure  the
     performance of cable television  operations and  communications  companies.
     Adjusted  EBITDA should not,  however,  be considered a replacement for net
     income,  cash flows or for any other  measure of  performance  or liquidity
     under U.S. GAAP, or as an indicator of a company's  operating  performance.
     The  Company's  presentation  of Adjusted  EBITDA may not be  comparable to
     statistics  with a  similar  name  reported  by  other  companies.  Not all
     companies and analysts calculate EBITDA in the same manner.
(4)  Represents  the period from August 1, 1999  through  December 31, 1999 when
     Saturn was consolidated.

Adjusted  EBITDA  reconciles  to the  consolidated  statement of  operations  as
follows:
<TABLE>
<CAPTION>
                                                                           For the Years Ended December 31,
                                                                    ----------------------------------------------
                                                                        2000            1999             1998
                                                                    -------------   --------------   -------------
                                                                                    (In thousands)
     <S>                                                              <C>             <C>             <C>
     Operating loss...............................................    $(162,011)      $(148,077)      $(133,904)
     Depreciation and amortization................................      105,899         104,720          97,140
     Non-cash stock-based compensation expense....................        9,439          22,540               -
                                                                      ---------       ---------       ---------
          Consolidated Adjusted EBITDA............................    $ (46,673)      $ (20,817)      $ (36,764)
                                                                      =========       =========       =========
</TABLE>

14.  COMMITMENTS

The Company has MMDS and programming  license fees and  programming  commitments
due annually as follows (in thousands):

     Year ended December 31, 2001.................................    $ 17,771
     Year ended December 31, 2002.................................      17,771
     Year ended December 31, 2003.................................      17,771
     Year ended December 31, 2004.................................      17,771
     Year ended December 31, 2005.................................      17,771
     Thereafter...................................................      35,543
                                                                      --------
                                                                      $124,398
                                                                      ========

The  Company  has various  lease  agreements  for office  space,  equipment  and
vehicles.  Rent expense under these lease agreements totaled $2.1 million,  $4.1
million and $2.6 million for the years ended  December 31, 2000,  1999 and 1998,
respectively.

                                      F-21
<PAGE>

                         UNITED AUSTRALIA/PACIFIC, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has operating lease obligations as follows (in thousands):

     Year ended December 31, 2001.................................    $  9,942
     Year ended December 31, 2002.................................       8,411
     Year ended December 31, 2003.................................       7,991
     Year ended December 31, 2004.................................       7,756
     Year ended December 31, 2005.................................       8,326
     Thereafter...................................................      17,681
                                                                      --------
                                                                      $ 60,107
                                                                      ========

The September  1997  five-year  agreement  with Optus  Networks to lease a 54MHz
transponder has been  renegotiated  under a new agreement to lease an additional
transponder. Satellite fees payable annually are approximately as follow:

     Year ended December 31, 2001.................................    $  6,070
     Year ended December 31, 2002.................................       7,016
     Year ended December 31, 2003.................................       7,711
     Year ended December 31, 2004.................................       7,711
     Year ended December 31, 2005.................................       7,711
     Thereafter...................................................      69,397
                                                                      --------
                                                                      $105,616
                                                                      ========

15.  CONTINGENCIES

The  Company  is  not a  party  to any  material  legal  proceedings,  nor is it
currently aware of any threatened material legal proceedings. From time to time,
the Company may become involved in litigation  relating to claims arising out of
its operations in the normal course of its business.










                                      F-22
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To United Australia/Pacific, Inc.:

We have audited, in accordance with auditing standards generally accepted in the
United   States,    the    consolidated    financial    statements   of   United
Australia/Pacific,  Inc.  included  in this Form 10-K and have issued our report
thereon  dated March 30, 2001.  Our audit was made for the purpose of forming an
opinion on the basic  consolidated  financial  statements  taken as a whole. The
following  schedule is the  responsibility  of the Company's  management  and is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and  is  not  part  of  the  basic  consolidated  financial
statements.  This schedule has been subjected to the auditing procedures applied
in the audit of the basic consolidated  financial statements as indicated in our
report with respect  thereto and, in our  opinion,  based on our audits,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic  consolidated  financial  statements taken as a
whole.




                               ARTHUR ANDERSEN LLP

Denver, Colorado
March 30, 2001




                                      F-23
<PAGE>
<TABLE>
<CAPTION>
                                           UNITED AUSTRALIA/PACIFIC, INC.
                                                    PARENT ONLY
                                                    SCHEDULE 1
                                    Condensed Financial Information of the Registrant
                                 (Stated in thousands, except share and per share amounts)



                                                                                                             As of December 31,
                                                                                                      ------------------------------
                                                                                                           2000             1999
                                                                                                      -------------    -------------
<S>                                                                                                     <C>              <C>
ASSETS
Current assets:
  Cash and cash equivalents........................................................................     $    655         $    298
  Short-term liquid investments....................................................................          201              497
  Related party receivables and costs to be reimbursed.............................................          327              327
  Other current assets.............................................................................            1               10
                                                                                                        --------         --------
     Total current assets..........................................................................        1,184            1,132
Investments in and advances to affiliated companies, accounted for under the
  equity method, net...............................................................................      205,782          223,675
Deferred financing costs, net of accumulated amortization of $2,775 and $1,927,
  respectively.....................................................................................        7,606            8,461
                                                                                                        --------         --------
     Total assets..................................................................................     $214,572         $233,268
                                                                                                        ========         ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Related party payables...........................................................................     $  2,972         $  1,977
  Accounts payable.................................................................................          220                -
                                                                                                        --------         --------
     Total current liabilities.....................................................................        3,192            1,977
Senior discount notes..............................................................................      466,241          407,945
                                                                                                        --------         --------
     Total liabilities.............................................................................      469,433          409,922

Stockholders' deficit:
  Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and
    outstanding....................................................................................           -                -
  Common stock, $0.01 par value, 30,000,000 shares authorized, 22,961,728 and
    17,810,299 shares issued and outstanding, respectively.........................................          230              178
  Additional paid-in capital.......................................................................      371,498          305,100
  Deferred compensation............................................................................       (8,904)         (18,343)
  Accumulated deficit..............................................................................     (562,050)        (440,649)
  Other cumulative comprehensive loss..............................................................      (55,635)         (22,940)
                                                                                                        --------         --------
     Total stockholders' deficit...................................................................     (254,861)        (176,654)
                                                                                                        --------         --------
     Total liabilities and stockholders' deficit...................................................     $214,572         $233,268
                                                                                                        ========         ========
</TABLE>



                                                        F-24
<PAGE>
<TABLE>
<CAPTION>
                                            UNITED AUSTRALIA/PACIFIC, INC.
                                                   PARENT ONLY
                                                   SCHEDULE 1
                             Condensed Information as to the Operations of the Registrant
                                             (Stated in thousands)


                                                                                           For the Years Ended December 31,
                                                                                  --------------------------------------------------
                                                                                      2000               1999              1998
                                                                                  -------------      --------------    -------------
<S>                                                                                <C>                 <C>              <C>
Corporate general and administrative expense, including management
  fees to related party of $995, $921 and $853, respectively....................   $  (1,368)          $  (4,301)       $  (5,689)
                                                                                   ---------           ---------        ---------
     Operating loss.............................................................      (1,368)             (4,301)          (5,689)

Interest income.................................................................          52                  40               81
Interest expense................................................................     (59,144)            (52,017)         (48,108)
Other expense, net..............................................................           1                  (1)            (836)
                                                                                   ---------           ---------        ---------
     Loss before other item.....................................................     (60,459)            (56,279)         (54,552)

Share in results of affiliated companies, net...................................     (60,942)             96,870         (151,739)
                                                                                   ---------           ---------        ---------

     Net (loss) income..........................................................   $(121,401)          $  40,591        $(206,291)
                                                                                   =========           =========        =========

Foreign currency translation adjustments........................................   $ (32,695)          $   6,251        $    (227)
                                                                                   ---------           ---------        ---------
Comprehensive (loss) income.....................................................   $(154,096)          $  46,842        $(206,518)
                                                                                   =========           =========        =========
</TABLE>




                                                        F-25
<PAGE>
<TABLE>
<CAPTION>
                                             UNITED AUSTRALIA/PACIFIC, INC.
                                                     PARENT ONLY
                                                     SCHEDULE 1
                             Condensed Information as to the Cash Flows of the Registrant
                                                (Stated in thousands)

                                                                                                  For the Years Ended
                                                                                                      December 31,
                                                                                      ----------------------------------------------
                                                                                         2000             1999             1998
                                                                                     -------------    -------------    -------------
<S>                                                                                   <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income...............................................................      $(121,401)        $ 40,591        $(206,291)
Adjustments to reconcile net (loss) income to net cash flows from
 operating activities:
   Share in results of affiliated companies, net................................         60,942          (96,870)         151,739
   Allocation of expense accounted for as capital contributions by parent.......              -            3,216            4,622
   Accretion of interest on senior notes and amortization of deferred
    financing costs.............................................................         59,144           52,017           48,108
   Decrease in related party receivables and other assets.......................          1,011              157              603
   Increase in accounts payable, accrued liabilities and other..................            219              921            2,332
                                                                                      ---------         --------        ---------
Net cash flows from operating activities........................................            (85)              32            1,113
                                                                                      ---------         --------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term liquid investments.......................................         (1,084)               -             (763)
Sale of short-term liquid investments...........................................          1,379              266           12,325
Investments in and advances to affiliated companies and other investments.......        (69,235)         (29,659)         (72,570)
                                                                                      ---------         --------        ---------
Net cash flows from investing activities........................................        (68,940)         (29,393)         (61,008)
                                                                                      ---------         --------        ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contributed from parent....................................................         69,382           29,659           58,947
Deferred financing costs........................................................              -                -               (7)
                                                                                      ---------         --------        ---------
Net cash flows from financing activities........................................         69,382           29,659           58,940
                                                                                      ---------         --------        ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS................................            357              298             (955)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..................................            298                -              955
                                                                                      ---------        ---------        ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD........................................      $     655        $     298        $       -
                                                                                      =========        =========        =========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash capital contributions from parent......................................      $       -        $  17,233        $  12,473
                                                                                      =========        =========        =========
</TABLE>


                                                       F-26
<PAGE>
<TABLE>
<CAPTION>
                                          UNITED AUSTRALIA/PACIFIC, INC.
                                         VALUATION AND QUALIFYING ACCOUNTS
                                                   SCHEDULE II
                                              (Stated in thousands)

                                                            Balance at                                      Write-offs    Balance at
                                                           Beginning of     Charged to                       and Other      End of
                    Descriptions                              Period         Expense        Acquisitions    Deductions      Period
------------------------------------------------------     -------------   -------------    ------------    ----------    ----------
<S>                                                           <C>             <C>               <C>          <C>           <C>
Allowance for doubtful subscriber receivables:
   Year ended December 31, 2000........................       $  823          $3,794            $ 28         $(3,606)       $1,039
   Year ended December 31, 1999........................       $    -          $3,479            $ 83         $(2,739)       $  823
   Year ended December 31, 1998........................       $    -          $  876            $  -         $  (876)       $    -
Allowance for investment in affiliates:
   Year ended December 31, 2000........................       $    -          $    -            $  -         $     -        $    -
   Year ended December 31, 1999........................       $4,384          $    -            $  -         $(4,384)       $    -
   Year ended December 31, 1998........................       $    -          $4,384            $  -         $     -        $4,384

</TABLE>






                                                       F-27