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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                   FORM 10-K

   FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)

<Table>
<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</Table>

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

<Table>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</Table>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                        COMMISSION FILE NUMBER 333-20307
                            ------------------------
                          POLAND COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                  NEW YORK                                      06-1070447
       (State or Other Jurisdiction of            (I.R.S. Employer of Identification No.)
       Incorporation or Organization)

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

  REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (303) 770-4001 SECURITIES
                REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<Table>
<S>                                            <C>
             TITLE OF EACH CLASS                 NAME OF EACH EXCHANGE ON WHICH REGISTERED
                    None                                           None
</Table>

          Securities registered pursuant to Section 12(g) of the Act:
                                 NOT APPLICABLE
                                (Title of Class)

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

    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. /X/

    State the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and asked prices of such common equity, as of a specified date
within 60 days prior to the date of filing. (See definition of affiliate in
Rule 405.)

                                      ZERO

    The number of shares outstanding of Poland Communications, Inc.'s common
stock as of December 31, 2001, was:

                              COMMON STOCK 18,948

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

    The Registrant meets the conditions set forth in General Instructions
(I) (1) (a) and (b) of Form 10-K and is therefore filing this Form with the
reduced disclosure format.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<Page>
                          POLAND COMMUNICATIONS, INC.
        ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE NUMBER
                                                              ------------
<S>                                                           <C>
                           PART I

ITEM 1. Business............................................        4

ITEM 2. Properties..........................................       15

ITEM 3. Legal Proceedings...................................       15

                          PART II

ITEM 5. Market for Company's Common Equity and Related
  Stockholder Matters.......................................       17

ITEM 7. Management's Discussion and Analysis of Financial
  Condition and Results of Operations.......................       20

ITEM 7A. Quantitative and Qualitative Disclosure About
  Market Risk...............................................       27

ITEM 8. Consolidated Financial Statements and Supplementary
  Data......................................................       29

ITEM 9. Changes in and Disagreements with Accountants on
  Accounting and Financial Disclosure.......................       90

                          PART IV

ITEM 14. Exhibits, Consolidated Financial Statement
  Schedules and Reports on Form 8-K.........................       90
</Table>

                                       2
<Page>
                                     PART I

    Poland Communications, Inc. ("PCI"), is a New York corporation, which is
wholly-owned subsidiary of UPC Polska, Inc., formerly @Entertainment, Inc.,
("UPC Polska"), a Delaware corporation which is wholly-owned by United
Pan-Europe Communications N.V. ("UPC"). References to the "Company" mean PCI and
its subsidiaries.

    SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

    The risks, uncertainties and other factors that might cause such differences
include, but are not limited to:

    - economic conditions in Poland generally, as well as in the pay television
      business in Poland, including decreasing levels of disposable income per
      household and increasing rates of unemployment;

    - changes in laws and regulations affecting the Company, especially those
      related to copyright and taxation;

    - changes in the television viewing preferences and habits of the Company's
      subscribers;

    - programming alternatives offered by the Company's competitors, especially
      the availability of free programming;

    - the Company's inability to comply with government regulations;

    - the continued strength of the Company's competitors;

    - future financial performance of the Company, UPC Polska and UPC, including
      availability, terms and deployment of capital; and

    - the overall market acceptance of Company's products and services,
      including acceptance of the pricing of those products and services.

    EXCHANGE RATE

    In this Annual Report on Form 10-K, references to "U.S. dollars" or "$" are
to U.S. currency, references to "Deutsche-Marks" or "DM" are to German currency,
references to "Euros" or "EUR" are to EU currency, and references to "zloty" or
"PLN" are to Polish currency. The Company has presented its primary consolidated
financial statements in accordance with generally accepted accounting principles
in the U.S. in U.S. dollars. Amounts originally measured in zloty for all
periods presented have been translated into U.S. dollars.

                                       3
<Page>
    For your convenience, this Annual Report contains certain zloty, Euro and
Deutsche-Mark amounts not derived from the consolidated financial statements
which have been translated into U.S. dollars. Readers should not assume that the
zloty, Euro, and Deutsche-Mark amounts actually represent such U.S. dollar
amounts or could be, or could have been, converted into U.S. dollars at the
rates indicated or at any other rate. Unless otherwise stated, such U.S. dollar
amounts have been derived by converting from zloty to U.S. dollars at the rate
of PLN 3.9863 = $1.00, the exchange rate quoted by the National Bank of Poland
at noon on December 31, 2001, and by converting from Euro to U.S. dollars at the
rate of EUR 1.1189 = $1.00, the exchange rate quoted by Bloomberg.com on
January 2, 2002, and by converting from Deutsche-Mark to U.S. dollars at the
rate of DM 2.2139 = $1.00, the exchange rate quoted by the National Bank of
Poland at noon on December 31, 2001. These rates may differ from the actual
rates in effect during the periods covered by the financial information
discussed herein. The Federal Reserve Bank of New York does not certify for
customs purposes a noon buying rate for zloty.

ITEM 1. BUSINESS

    GENERAL

    The Company operates one of the largest cable television systems in Poland
with approximately 1,851,900 homes passed and approximately 1,011,000 total
subscribers as of December 31, 2001. The Company's cable subscribers are located
in regional clusters encompassing eight of the ten largest cities in Poland,
including those cities which the Company believes provide the most favorable
demographics for cable television in the country. The Company's cable television
networks have been constructed with the flexibility and capacity to be
cost-effectively reconfigured to offer an array of interactive and integrated
entertainment, telecommunications and information service. Over the last two
years the Company has been upgrading its network so that it can provide two-way
telecommunication services such as Internet access.

    As a result of termination of the operation of Polish laws relating to
foreign ownership of Polish companies, effective January 1, 2001, the Company
has effected changes in the corporate structure of its operations designed to
simplify its corporate structure.

    BUSINESS STRATEGY

    The Company's principal objective under its business strategy is for its
business to become cash flow positive in the 2002. It will also focus on
enhancing its position as a leading provider of cable television in Poland by
capitalizing on favorable opportunities that it believes exist in Poland.

    The Company's business strategy is designed to increase its average revenue
per subscriber, and also, although to a lesser extent, to increase its
subscriber base.

    The Company intends to achieve these goals by:

    - increasing penetration of new service products within existing upgraded
      homes;

    - providing additional revenue-generating services to existing customers,
      including Internet services;

    - developing content tailored to the interests of existing subscribers; and

    - improving the effectiveness of the Company's sales and marketing efforts.

    The Company also intends to increase the effectiveness of its operations and
reduce its expenses by:

    - enhancing internal controls;

    - improving corporate decision-making processes;

                                       4
<Page>
    - reorganizing the Company so as to simplify its legal structure; and

    - using more local rather than expatriate employees in management, thereby
      reducing general and administrative costs.

    REGIONAL CLUSTERS

    The Company has established five regional clusters for its cable television
business encompassing eight of the ten largest cities in Poland, which the
Company believes, are among those with the strongest economies and most
favorable demographics for cable television in the country. The following table
illustrates certain operating data of each of the Company's existing regional
clusters.

              OVERVIEW OF THE COMPANY'S EXISTING CABLE SYSTEMS (1)

<Table>
<Caption>
                                                                                                          AVERAGE
                                                                                                          MONTHLY
                                                                                                        SUBSCRIPTION
                                                                                                        REVENUE PER
                                                                          BASIC AND      BASIC AND       BASIC AND
                                     TOTAL       HOMES        TOTAL      INTERMEDIATE   INTERMEDIATE    INTERMEDIATE
REGION                               HOMES      PASSED     SUBSCRIBERS   SUBSCRIBERS    PENETRATION    SUBSCRIBER (2)
------                             ---------   ---------   -----------   ------------   ------------   --------------
<S>                                <C>         <C>         <C>           <C>            <C>            <C>
North............................    574,000     444,366      292,102      209,745         47.20%           7.76
South............................    400,000     222,869       94,201       68,755         30.85%           9.36
Central..........................    920,000     452,119      260,852      151,997         33.62%           9.86
West.............................    624,000     255,343      122,383       99,807         39.09%           7.63
Katowice.........................  1,200,000     477,142      241,385      153,478         32.17%           8.86
                                   ---------   ---------    ---------      -------         ------           ----
  TOTAL..........................  3,718,000   1,851,839    1,010,923      683,782         36.92%           8.63
                                   =========   =========    =========      =======         ======           ====
</Table>

------------------------

(1) All data at or for the year ended December 31, 2001.

(2) Represents a weighted average for the Company based on the total number of
    basic and intermediate subscribers at December 31, 2001 stated in U.S.
    dollars.

    NEW INVESTMENT OPPORTUNITIES

    The Company regularly evaluates potential acquisitions of cable networks,
including network swaps with other cable operators. The Company currently has no
definitive agreement with respect to any material acquisition, although it has
discussions with other companies and assesses opportunities on an ongoing basis.
The Company may be required to apply for the approval of the Polish
Anti-Monopoly Office with respect to any acquisitions it wishes to consummate.
The Company's ability to enter into definitive agreements relating to material
acquisitions and their potential terms, as well as its ability to obtain the
necessary anti-monopoly approvals, cannot be assured.

    SERVICES AND FEES

    The Company's revenues from its business have been and will continue to be
derived primarily from:

    - monthly subscription fees for cable television services,

    - fees for Internet service, and

    - one-time installation fees.

    The Company charges cable television subscribers fixed monthly fees for
their choice of service packages and for other services such as premium channels
and rental of remote control devices. Throughout its cable television systems,
the Company currently offers three packages of cable television service:

    - basic package,

                                       5
<Page>
    - intermediate package (in selected areas of Poland); and

    - broadcast package.

    On December 31, 2001, approximately 642,900, or 63.6%, of the Company's
subscribers received the basic package, as compared to 752,900, or 70.7%, at
December 31, 2000, approximately 40,900, or 4.0%, received the intermediate
package, as compared to 45,400, or 4.3%, at December 31, 2000, and approximately
327,100, or 32.4%, received the broadcast package of service, as compared to
266,000, or 25.0%, at December 31, 2000.

    BASIC PACKAGE.  The Company's basic package includes approximately 34 to 60
channels. During 2001, this package generally included all Polish terrestrial
broadcast channels, most major European satellite programming legally available
in Poland, regional and local programming and UPC Polska's Wizja TV programming
package, consisting of proprietary and third party channels. The Company's basic
package offerings vary by location.

    On December 7, 2001, the Company's parent merged its digital satellite
direct-to-home ("D-DTH") business with the premium pay television business of
Telewizja Korporacja Partycypacyjna S.A. ("TKP"), the Polish subsidiary of Group
Canal+ S.A. In connection with this merger, the Company and its parent have
renegotiated or are in the process of renegotiating contracts with certain third
party channel providers, in an effort to reduce costs, and strengthen the
Company's programming offerings by terminating certain agreements for poorly
performing channels and entering into other agreements for popular channels
based on consumer demand and preferences.

    INTERMEDIATE PACKAGE.  The Company's intermediate package includes
approximately 20 to 22 channels. This package is offered for monthly fees equal
to approximately one-half of the amount charged for the basic package. The
intermediate package is designed to compete with small cable operators on the
basis of price, using a limited programming offering. The Company's intermediate
package offerings vary by location.

    BROADCAST PACKAGE.  The Company's broadcast package includes 6 to 12
broadcast channels for monthly fees, which are substantially less than the
amounts charged for the intermediate package.

    PREMIUM AND OTHER SERVICES.  For an additional monthly charge, certain of
the Company's cable networks have offered two premium television services--the
HBO Poland service and Wizja Sport, one of UPC Polska's proprietary channels
(although Wizja Sport was expanded into the basic package as of March 24, 2001).
UPC Polska discontinued Wizja Sport in December 2001. In connection with the
Canal+ merger, in February 2002, Canal+ Multiplex, a Polish-language premium
package of three movie, sport and general entertainment channels, began to be
distributed across the Company's network. The Company, its parent and TKP are
currently negotiating the definitive long-form channel carriage agreement for
distribution of Canal+ Multiplex. The Company offers HBO Poland and Canal+
Multiplex separately for approximately $8.80 and $9.90 per month, respectively.
The Company also offers these channels as a package at approximately $14.80 per
month.

    Other optional services include additional outlets and stereo service, which
enable a subscriber to receive from 4 to 25 radio channels in stereo. Cable
television subscribers who require the use of a tuner to receive certain of the
Company's cable services are charged an additional fee of approximately $1.00
per month. Installation fees vary according to the type of connection required
by a cable television subscriber. The standard initial installation fee is
approximately $6.00, but such fee may be subject to reductions as a result of
promotional campaigns.

    PRICING STRATEGY.  Historically, the Company has experienced high annual
churn rates and has passed on the effects of inflation through price increases.
For the years ended December 31, 2001 and 2000, the churn rate was 15.7% and
21.5%, respectively. This pricing strategy of passing on the effects of
inflation through price increases commenced in January 1997 and was designed to
increase revenue

                                       6
<Page>
per subscriber and to achieve real profit margin increases in U.S. dollar terms.
The current pricing strategy is aimed at maintaining the subscriber.

    The Company intends to concentrate on maintaining its current subscribers
and decreasing its level of churn. This reflects a change in the Company's
strategy from aggressive selling accompanied by high churn to lower subscriber
growth with lower churn. By doing so, the Company believes it will have a more
positive effect on EBITDA. The Company intends to achieve it through:

    - by employing programs designed to reward loyal subscribers--so-called
      "loyalty programs"--directed to existing subscribers,

    - by marketing offers to new subscribers with term commitments, and

    - by systematically combating piracy.

    Cable television subscribers are billed monthly in advance and, as is
customary in Poland, most of the Company's customers pay their bills through
their local post office, bank or customer offices. The Company has strict
enforcement policies to encourage timely payment. Such policies include notices
of late payment, visits from service personnel, and ultimately, disconnection
for nonpaying customers 90 days after a bill becomes past due. The Company also
employs promotional programs that encourage timely payment by subscribers. The
Company's system architecture in most networks enables it to promptly shut off
service to nonpaying customers and is designed to reduce non-authorized use of
its cable systems. The Company's bad debts expense has averaged 5.86% and 4.75%
of total revenue for fiscal years 2001 and 2000, respectively.

    INTERNET SERVICE.  During the fourth quarter of the year 2000, the Company
began providing Internet services to its cable television customers. Although
the Company does not currently have additional capital to invest in development
of this service, it intends to expand its Internet service offering at some
point in the future. Revenue of $1.6 million for fiscal year 2001 was
attributable to the Company's Internet services.

    Individual and home office Internet subscribers are charged a monthly
subscription fee of $38.90 and $51.40, respectively. The standard installation
fee is approximately $61.50 for existing cable customers and approximately
$66.50 for new customers. On December 31, 2001, approximately 8,600, or 0.9%, of
the Company's subscribers received Internet service. The maximum and minimum
connection speeds offered by the Company are 512 Kbit and 128 Kbit,
respectively.

    TECHNOLOGY AND INFRASTRUCTURE

    The Company believes the fiber-optic cable television networks that it has
constructed, which serve approximately 880,300, or 87.1%, of its subscribers,
are among the most technologically advanced in Poland and are comparable to
modern cable television networks in the United States. All of the Company's
networks that have been constructed by the Company have bandwidths of at least
550 MHz. New portions of the networks, which have recently been constructed, are
being designed to have minimum bandwidths of 860 MHz. The Company continues to
upgrade any portions of its cable television networks that have bandwidths below
550 MHz (which generally are those acquired from other entities) to at least 860
MHz in an effort to reduce the number of satellite receivers and parts inventory
required in the networks. The Company uses fiber-optic and coaxial cables,
electronic components and connectors supplied by leading Western firms in its
cable television networks.

    The Company has been able to avoid constructing its own underground conduits
in certain areas by entering into a series of agreements with regional and local
branches of the Polish national telephone company (known in the Polish
telecommunications industry as "TPSA") which permit the Company to use TPSA's
conduit infrastructure for an indefinite period of time or for fixed periods of
up to 20 years. The Company also has agreements to undertake joint construction
with another company for new conduits in certain areas. These agreements
represent a major advantage to the

                                       7
<Page>
Company since they permit the Company to minimize the costly and time-consuming
process of building new conduit infrastructure where TPSA conduit infrastructure
exists. As of December 31, 2001, approximately 74.3% of the Company's cable
television plant had been constructed utilizing pre-existing conduits of TPSA. A
substantial portion of the Company's contracts with TPSA allow for termination
by TPSA without penalty at any time either immediately upon the occurrence of
certain conditions or upon provision of three to six months' notice without
cause.

    Generally speaking, TPSA may terminate a conduit agreement immediately (and
without penalty) if:

    - the Company does not have a valid permit from the Chairman of the Office
      for Telecommunication Regulation ("URT") (which replaced the Polish State
      Agency of Radio Communications as of January 1, 2001) authorizing the
      construction and operation of a cable television network in a specified
      geographic area covering the subscribers to which the conduit delivers the
      signal;

    - the Company's cable network serviced by the conduit does not meet the
      technical specifications required by the New Telecommunication Law
      (formerly the Polish Telecommunication Act of 1990);

    - the Company does not have a contract with the cooperative authority
      allowing for the installation of the cable network; or

    - the Company does not pay the rent required under the conduit agreement.

    The Company is in compliance with all of the material conditions of the TPSA
agreements. However, any termination by TPSA of such contracts could result in
the Company losing its permits, termination of agreements with cooperative
authorities and programmers, and an inability to service customers with respect
to areas where its networks utilize the conduits that were the subject of such
TPSA contracts.

    In addition, some conduit agreements with TPSA provide that cables can be
installed in the conduit only for the use of cable television. If the Company
uses the cables for a purpose other than cable television, such as data
transmission, telephone, or Internet access, such use could be considered a
violation of the terms of certain conduit agreements, unless this use is
expressly authorized by TPSA. There is no guarantee that TPSA would give its
approval to permit other uses of the conduits. Since the fourth quarter of the
2000, the Company has been providing Internet services to its cable customers
and renegotiating certain conduit agreements with TPSA. The Company believes
that it is not in violation of any of its conduit agreements with TPSA.

COMPETITION

    The cable television industry in Poland has been, and is expected to remain,
highly competitive. The Company competes with other cable television operators,
as well as with companies employing numerous other methods of delivering
television signals to subscribers, such as by terrestrial broadcast television
signals, multi-channel multi-point distribution systems and D-DTH services. The
extent to which the Company's services are competitive with alternative delivery
systems depends, in part, upon the Company's ability to provide a greater
variety of Polish-language programming at a more reasonable price than the
programming and prices available through alternative delivery systems.

    Pay television services also face competition from a variety of other
sources of news, information and entertainment such as newspapers, cinemas, live
sporting events, interactive computer programs and home video products such as
videocassette recorders. The extent of this type of competition depends upon,
among other things, the price, variety and quality of programming offered by pay
television services and the popularity of television itself.

                                       8
<Page>
    In the cable television industry, the Company believes that competition for
subscribers is primarily based on price, program offerings, customer service,
ability to provide additional services such as Internet and quality and
reliability of cable networks.

    Operators of small cable networks, which are active throughout Poland, pose
a competitive threat to the Company because they often incur lower capital
expenditures and operating costs and therefore have the ability to charge lower
fees to subscribers than does the Company. While these operators often do not
meet the technical standards for cable systems under Polish law, enforcement of
regulations governing technical standards has historically been poor. Regardless
of the enforcement of these laws and regulations, the Company expects that
operators of small cable networks will continue to remain a competitive force in
Poland.

    During the fourth quarter of the 2000, the Company began to provide Internet
services to its customers. The Company's main competitors in this area are
telephony operators like TPSA and other cable television operators. The
Company's competitors or their affiliates have significant resources, both
financial and technological.

PIRACY

    The Company views piracy of cable services as one of its main problems in
Poland, not unlike other Central European cable and satellite operators. While
there has historically been little enforcement of penalties against commercial
exploitation of privacy, the issue is now receiving more attention from the
Polish government. In addition, UPC Polska intends to intensify its efforts in
reducing the piracy of cable services and lobbying efforts in this regard.

TRADEMARKS

    The Company, either itself, through its subsidiaries or its parent or UPC,
has filed or is in the process of filing for registration of its various
trademarks. The PTK logo was registered for use in connection with television
and programming services in July 1997. Variations of "PTK" have been registered
in Poland. Trademarks for UPC have been registered internationally.

EMPLOYEES

    At December 31, 2001, the Company had approximately 1,200 permanent
full-time employees and approximately 80 part-time employees. In addition, as of
December 31, 2001, the Company employed approximately 112 salesmen, some of whom
may have received both commissions and a nominal salary. From time to time the
Company employs additional salespersons on an as needed, commission-only basis.
In a division of one of the Company's subsidiaries, a trade union, which has
approximately 3 members, was formed in mid-1999. The Company believes that its
relations with its employees are good.

REGULATION

GENERAL

    In connection with negotiating its membership in the EU, Poland has started
to adjust its legal system to EU requirements and currently is in the process of
revising its telecommunications, broadcasting and copyright regulation. On
July 21, 2000 the Polish Parliament passed the new Telecommunications Law (the
"NTL") which changed the regulatory framework of telecommunications activities
in Poland. The NTL replaced the Communications Act of 1990 (the "Communications
Act") and became effective as of January 1, 2001.

    Until the end of the year 2000, the operation of cable television systems
was regulated primarily by the Communications Act. As of January 1, 2001, the
operation of those television systems has been

                                       9
<Page>
regulated by the NTL. Operators are also subject to the provisions of the Polish
Radio and Television Act of 1992 (the "Television Act").

    Currently the Polish telecommunications and media sector is regulated by:

    - The Polish Minister of Infrastructure (who as of July 24, 2001, assumed
      certain responsibilities of the Minister of Communications);

    - The Chairman of the Office for Telecommunications Regulation ("URT")
      (which replaced the Polish State Agency of Radiocommunications ("PAR"),
      established under the Communications Act); and

    - The Polish National Radio and Television Council (the "Council").

    Cable television operators in Poland are required to obtain permits from the
Chairman of the URT to operate public radio and television networks and must
register certain programming that they transmit over their networks with the
Council.

    Neither the Minister of Infrastructure nor the Chairman of the URT currently
has the authority to regulate the rates charged by operators of cable television
services. However, excessive rates could be challenged by the Polish
Anti-Monopoly Office should they be deemed to constitute monopolistic or other
anti-competitive practices. The cable television operators in Poland are also
subject to the Law on Copyright and Neighboring Rights of 1994 (the "Copyright
Act") which provides intellectual property rights protection to authors and
producers of programming. Under the terms of the Television Act, broadcasters in
Poland are regulated by, and must obtain a broadcasting license, from the
Council.

COMMUNICATIONS ACT

    PERMITS.  Until the end of the year 2000, the cable television operators
were required to obtain permits from PAR to install and operate cable television
systems. The Communications Act and the required permits issued by PAR had set
forth the terms and conditions for providing cable television services.

    If a cable operator breached the terms of its permits or the provisions of
the Communications Act, or if such operator has failed to acquire permits
covering areas serviced by its networks, PAR could impose penalties on such
operator, including:

    - fines;

    - the revocation of all permits covering the cable networks where such
      breach occurred; and

    - the forfeiture of the cable operator's cable networks.

    In addition, the Communications Act provided that PAR may not grant a new
permit to, or renew an expiring permit held by, any applicant that has had, or
that was controlled by an entity that has had, a permit revoked within the
previous five years.

    On July 26, 2000, the Polish Ministry of Telecommunication issued a 15-year
data transmission license to a subsidiary of the Company, authorizing that
company to provide data transmission service to its customers throughout the
territory of Poland, using its own networks and those leased from other licensed
operators. This license allowed that subsidiary to provide Internet services to
its customers. This license expired automatically with the entry of the NTL into
force, i.e. as of January 1, 2001. The subsidiary may continue the provision of
the services covered by the license. It was required, however, to notify the
Chairman of the URT about the provision of the data transmission services by the
end of March 2001, as described below. In certain cases listed below, the
Chairman of the URT may object to the provision of the services by the
subsidiary. In March 2001, the Company's subsidiary notified the Chairman of the
URT of its activities concerning the provision of data transmission services and
access to Internet. The Chairman had 21 days to respond to the Company's
notification. Since no response

                                       10
<Page>
was received from the Chairman of URT, it is assumed that the Company is legally
entitled to provide the data transmission services and access to the Internet as
described in the notification.

    As of December 31, 2001, approximately 74.3% of the Company's cable plant
runs through conduits leased from TPSA. If the Company uses the cables for a
purpose other than cable television, such as data transmission, telephone, or
Internet access, such use could be considered a violation of the terms of
certain conduit agreements, unless this use is expressly authorized by TPSA.
There is no guarantee that TPSA would give its approval to permit other uses of
the conduits. Since the fourth quarter of fiscal year 2000, the Company has been
introducing Internet services to its cable customers and renegotiating certain
conduit agreements with TPSA.

    Specifically, subsidiaries of the Company have received approximately 92
permits from PAR, covering all of the Company's basic subscribers at
December 31, 2001, including subscribers for whom the Company's permits are
deemed extended under Polish law pending the authority's response to the
Company's permit renewal applications.

    FOREIGN OWNERSHIP RESTRICTIONS.  Until January 1, 2001, the Communications
Act was in effect. It provided that permits could only be issued to and held by
Polish citizens, or companies in which foreign persons held no more than 49% of
the share capital, ownership interests and voting rights. In addition, under the
Communications Act, a majority of the management and supervisory board of any
cable television operator holding permits was required to be comprised of Polish
citizens resident in Poland. These restrictions did not apply to any permits
issued prior to July 7, 1995.

NEW TELECOMMUNICATION LAW

    Since January 1, 2001, the operation of cable and other television systems
in Poland has been regulated under the NTL, which replaced the Communications
Act.

    The NTL changes the licensing regime and the competency of telecommunication
authorities. The NTL introduces a new authority--the Chairman of the URT. The
Chairman of the URT has assumed most of the administration tasks previously
performed by the Polish Minister of Communications and PAR. The Chairman of the
URT is responsible for regulating telecommunication activities, including
exercising control over operators and managing frequencies. The duties of the
Minister of Infrastructure are limited primarily to issuing secondary
regulations. PAR along with the Polish State Telecommunications and Postal
Inspection (PITiP) were liquidated as of January 1, 2001.

    Under the NTL, cable television operators are required to obtain a permit
from the Chairman of the URT to operate public radio and television networks.
The Chairman of the URT shall grant the permit to any interested entity
authorized to do business in Poland and which complies with the conditions set
forth in the NTL. Applications for renewals of permits may be refused only if
during the validity of the permit there have been circumstances justifying the
refusal, revocation or limitation of the scope of the permit.

    Under the NTL, an NTL permit must be revoked if:

    - a final court order prohibits the operator from conducting the business
      covered by the permit;

    - the operator fails to meet the legal requirements for the grant of the
      permit;

    - the operator has failed to remedy a violation of the law within the
      designated time limit; or

    - the launching of business activity covered by the application causes a
      threat to national defense, national security or public safety and order.

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    Also, if the Chairman of the URT has not raised objections against the
notification of telecommunication activity, he can make objections during the
course of the performance of the telecommunications activity (for which the
notification was required), if:

    - the operator violates the provisions of the NTL and has not remedied the
      irregularities within the period of time specified in a decision issued by
      the Chairman of the URT, or

    - the performance of business activity causes a threat to national defense,
      national security or public safety and order.

    The NTL permit may be revoked, if the operator breaches the provisions of
the NTL, the permit or other decisions issued under the NTL in any way, does not
pay the required fees, or a decision on the liquidation or declaration of
bankruptcy of the operator has been made.

    Except for the operation of radio and television networks and public
telephone networks, the performance of all other telecommunications activities
requires only notification to the Chairman of the URT. The Chairman of the URT
may disallow the performance of such activities within 21 days of the receipt of
the notification if:

    - the notification violates the NTL;

    - the notification is incomplete; or

    - the information provided in the notification is false.

    Permits issued under the Communications Act are automatically transformed
into NTL permits, if such permits are still required under the NTL. Thus, the
permits for the installation and operation of cable television systems, granted
to the Company's subsidiaries became NTL permits. This rule does not apply to
the provisions of the permits issued under the Communications Act, the exercise
of which would constitute a violation of the NTL. All other licences,
authorizations and assignments expired by force of the law as of January 1,
2001.

    Operators, who had obtained rights expiring automatically under the NTL may
continue their telecommunications activities within their current scope,
provided that they apply for NTL permits by the end of 2001, if these activities
require an NTL permit. For telecommunications activities that only require
notification, such as data transmission, operators may continue to provide these
services, provided that they notify the Chairman of the URT by the end of
March 2001, and the Chairman does not object.

    The Company is in the process of obtaining permits from the Chairman of the
Office for Telecommunication Regulation ("URT") for several of its cable
television systems. If these permits are not obtained, URT could impose
penalties such as fines or in severe cases, revocation of all permits held by an
operator or the forfeiture of the operator's cable networks. Management of the
Company does not believe that these pending approvals result in a significant
risk to the Company.

    The NTL has eliminated most of the foreign ownership restrictions relating
to telecommunications. However, the NTL does prohibit the provision of
international telecommunications services using networks operated by foreign
entities or companies with participation of foreign entities until December 31,
2002. Until this date, UPC TK will be subject to this restriction. UPC Telewizja
Kablowa Sp. z o.o. ("UPC TK") may, however, provide international
telecommunication services using the networks of other authorized Polish
operators. It may also provide these services, with the exception of
international telephony services, by using its own radio communication networks.
Such services may, until December 31, 2002, only be provided by TPSA.

    Under the NTL all operators are required to make their networks available to
users who intend to commercially gather, process, storage, use or grant access
to information for others.

    Operators that perform their activities on the basis of an NTL permit are
required to allow other operators operating public networks to use their
buildings, lines, conduits, poles, towers and masts, in

                                       12
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particular, allowing them to use telecommunications equipment, where these
activities would be impossible without such infrastructure sharing or would
involve a significant cost. Operators are required to specify the conditions of
the joint use in an agreement. If the parties cannot agree to specific
conditions, either party may request the Chairman of the URT to issue a decision
on joint use.

TELEVISION ACT

    THE POLISH NATIONAL RADIO AND TELEVISION COUNCIL.  The Council, an
independent agency of the Polish government, was created under the Television
Act to regulate broadcasting in Poland. The Council has regulatory authority
over both the programming that cable television operators transmit over their
networks and the broadcasting operations of broadcasters.

    REGISTRATION OF PROGRAMMING.  Under the Television Act, cable television
operators must register each channel and the programming, which will be aired on
that channel with the Chairman of the Council prior to transmission. The
Company's subsidiaries have registered most of the programming that they
transmit on their cable networks, except programming transmitted on networks for
which they do not have permits. The Chairman of the Council may revoke the
registration of any of the Company's programming, or may not register all
additional programming that the Company desires to transmit over the Company's
networks. In addition, the Council may take action regarding unregistered
programming that the Company transmits over cable networks for which the Company
does not yet have NTL permits. This pertains to areas for which permit
applications cannot be made until all permit requirements are satisfied
(including obtaining agreements with the cooperative authorities, upgrading of
the acquired networks to meet technical standards where necessary and satisfying
foreign ownership limitations). Such actions could include the levying of
monetary fines against the Company, and the seizure of equipment involved in
transmitting such unregistered programming as well as criminal sanctions against
the Company's subsidiaries' management. These actions could have a material
adverse effect on the Company's business, financial condition and results of
operations.

COPYRIGHT PROTECTION

    Television operators, including cable operators, in Poland are subject to
the provisions of the Polish Copyright Act, which governs the enforcement of
intellectual property rights. In general, the holder of a Polish copyright for a
program transmitted over the cable networks of a cable television operator has a
right to receive compensation from such operator or to prevent transmission of
the program.

    The rights of Polish copyright holders are generally enforced by
organizations for collective copyright administration and protection such as
Zwiazek Autorow i Kompozytorow Scenicznych ("ZAIKS") and Zwiazek Artystow Scen
Polskich ("ZASP"), and can also be enforced by the holders themselves. Most of
the Company's cable subsidiaries operate under a contract with ZASP and all of
its cable subsidiaries operate under a contract with ZAIKS. A violation of the
Copyright Act by a cable television operator also constitutes a violation of the
NTL and of the operator's permits. See "--Television Act" for a discussion of
the penalties and consequences associated with violations of the Television Act
and "--New Telecommunications Law" for a discussion of the penalties and
consequences associated with violations of the Communications Act or the New
Telecommunications Law and of a television operator's permits.

ANTI-MONOPOLY ACT

    EXCLUSIVE PROGRAMMING AGREEMENTS.  Some of the programming agreements that
the Company has entered into for its cable networks contain exclusivity clauses
which restrict or prohibit the provider of such programming from providing such
programming to other cable operators. Although such exclusivity clauses are not
specifically prohibited under the Anti-Monopoly Act, such agreements may be
found unlawful, and therefore unenforceable, if they restrict or hinder
competition or otherwise involve the abuse of a dominant position. A decision by
the Anti-Monopoly Office to deem one or

                                       13
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more of these programming agreements as void due to the fact that it contains an
illegal exclusivity clause could have a material adverse effect on the Company's
business and financial results in that such a decision would potentially reduce
the commercial value of these contracts and could reduce the consumer of appeal
of the programming offered on the Company's cable networks.

    MARKET DOMINANCE.  Companies that obtain control of 40% or more of the
relevant market and do not encounter significant competition may be deemed to
have market dominance, and therefore face greater scrutiny from the
Anti-Monopoly Office.

    From time to time, the Company receives inquiries from and are subject to
review by various divisions of the Anti-Monopoly Office.

    ANTI-MONOPOLY PROCEEDINGS PENDING IN THE SUPREME COURT WITH RESPECT TO THE
    COMPANY AND ITS SUBSIDIARIES.

    The Anti-Monopoly Office issued a decision that the Company's subsidiary had
achieved a dominant position and abused that dominant position by: (1) failing
to create a uniform system for customer complaints, (2) increasing rates without
providing subscribers a detailed basis for the price increases, and (3) changing
the programming line-up without sufficient notice to subscribers. The Anti-
Monopoly Office did not impose a fine in connection with its decision. The
subsidiary appealed both the finding of dominance and the finding that it acted
improperly in its relations with subscribers. On appeal, the Anti-Monopoly Court
agreed with the Company's position and overturned the Anti-Monopoly Office's
decision. The Anti-Monopoly Office is appealing the Anti-Monopoly Court's
decision to the Supreme Court, which has accepted the appeal.

    In another market, the Anti-Monopoly Office issued a decision that another
subsidiary of the Company had achieved a dominant position and abused that
dominant position by: (1) increasing rates without providing subscribers a
detailed basis for the price increases; and (2) changing the programming
line-up. The Anti-Monopoly Office imposed a fine of 50,000 zloty (the equivalent
of approximately $12,500). The subsidiary appealed both the finding of dominance
and the finding that it acted improperly in its relations with subscribers. The
Anti-Monopoly Court agreed with the decision of the Anti-Monopoly Office. The
subsidiary is appealing the Anti-Monopoly Court's decision to the Supreme Court.
The appeal has not yet been accepted by the Supreme Court.

    In another market, the Anti-Monopoly Office issued a decision that another
subsidiary of the Company had achieved a dominant position and abused that
dominant position by: (1) changing the programming offer to force subscribers
into more expensive packages; and (2) infringing the consumer rights of
subscribers by failing to process customer complaints. The Anti-Monopoly Office
imposed a fine of 20,000 zloty (the equivalent of approximately $5,000). The
subsidiary appealed both the finding of dominance and the finding that it acted
improperly in its relation with subscribers. The Anti-Monopoly Court agreed with
the decision of the Anti-Monopoly Office. The subsidiary is appealing the
Anti-Monopoly Court's decision to the Supreme Court. The appeal has not yet been
accepted by the Supreme Court.

REGULATION OF COMPETITION

    EC competition law governs agreements which prevent, restrict or distort
competition and prohibits the abuse of dominant market positions through
Articles 81 and 82 of the EC Treaty.

    Article 81 (1) renders unlawful agreements and concerted practices which may
affect trade between member states and which have as their object or effect the
prevention, restriction or distortion of competition within the member states of
the European Community/European Economic Area. Article 81 (2) voids the
offending provision or the entire agreement, if the offending parts are not
severable. Article 81 (3) allows for exemption from the provisions of Articles
81 (1) and 81 (2) for agreements whose beneficial effects in improving
production or distribution or promoting technical or

                                       14
<Page>
economic progress outweigh their restrictive effects, provided that consumers
receive a fair share of the benefit, that competition will not be eliminated and
that no unnecessary restrictions are accepted. Such an exemption may only be
granted by the European Commission. Article 82 prohibits undertakings from abuse
of a dominant market position in the EC or a substantial part of it, in so far
as the abuse may affect trade between member states. A company may be dominant
in several member states or part of a single member state. A company enjoys a
dominant position whenever it possesses such market strength that it can act to
an appreciable extent independently of its competitors and customers. Generally
speaking, a market share of as little as 40% can raise concern that a firm may
be dominant. However, dominance is not unlawful per se; only the abuse of a
dominant position is prohibited by Article 82. Any action that is designed to,
or could, seriously injure competitors, suppliers, distributors, or consumers is
likely to raise issues under Article 82.

    The European Commission has the power to fine heavily (up to 10% of a
group's annual worldwide turnover) in relation to a breach of Article 81 or in
relation to abusive conduct under Article 82. Agreements or practice that breach
these provisions will be void and unenforceable in national courts and third
parties that suffer loss as a result of a breach of Article 81 or Article 82 can
sue for damages and/or seek injunctive relief. The Company does not believe that
any of its current agreements infringe Article 81(1) or Article 82 and therefore
does not intend to bring them to the attention of the European Commission. If
the European Commission were to find the agreements infringed Article 81(1) or
Article 82, the agreements would be void and unenforceable. The parties could
also be fined and liable to damages to third parties.

POLAND'S EU MEMBERSHIP APPLICATION

    In 1994 Poland made an official application for membership of the EU.
Negotiations on the terms of Poland's proposed admission to the EU commenced in
March 1998. Poland has announced 2004 as a target date for accession. If Poland
joins the EU, it would be required to implement and obey all of the laws and
regulations emanating from the European Commission, including EC competition law
in their then current versions.

ITEM 2. PROPERTIES

    On December 31, 2001, the Company owned equipment used for its cable
television business, including 92 headends for cable networks, and approximately
4,924 kilometers of cable plant. The Company has approximately 144 lease
agreements for offices, storage spaces and land adjacent to the buildings. The
total area leased amounts to approximately 28,300 square meters. The areas
leased by the Company range from 3 square meters up to 4,100 square meters. The
agreements are for specified and unspecified periods of time and those for an
unspecified period may be terminated with relatively short notice periods by
either party, usually three months.

    The Company has entered into conduit leases with TPSA (the Polish national
telephone company) and, in certain cases, with other entities. The majority of
the TPSA leases require the Company to bear the costs of the maintenance of the
cable. The Company may not sublease the conduit or cables or allow a third party
to use the conduits or cables free of charge without TPSA's consent. The rental
charge for the conduit is usually determined on each 100 meters of conduit
occupied. The agreements also contain indexation clauses for rent adjustment
purposes (based on the change of U.S. dollar exchange rates or on the increase
of real maintenance costs). A substantial portion of the Company's contracts
with TPSA for the use of such conduits permit termination by TPSA without
penalty at any time either immediately upon the occurrence of certain conditions
or upon provision of three to six months' notice without cause. Any termination
by TPSA of such contracts could result in the Company losing its permits, the
termination of agreements with cooperative authorities and programmers, and an
inability to service customers with respect to the areas where its networks
utilize the conduits that were the subject of such TPSA contracts. The Company
and its subsidiaries are in compliance with all

                                       15
<Page>
material provisions of the TPSA contracts. For a list of the reasons for which
TPSA can terminate a conduit agreement, the proportion of the Company's cable
subscribers serviced by conduits leases subject to immediate termination and the
consequences to the Company of the loss of those conduit leases, see
"Business--Technology and Infrastructure."

    The Company is renegotiating the five year lease that was entered into in
2000 for its head office in Warsaw. The Company's cable operations and main
headend have been located in this space since February 2001.

    The Company believes that its existing owned properties, lease agreements
and conduit agreements are adequate for purposes of the Company's cable
television operations.

ITEM 3. LEGAL PROCEEDINGS

    The Company is involved in litigation from time to time in the ordinary
course of business. In management's opinion, the litigation in which the Company
is currently involved, individually and in the aggregate, is not material to the
Company's business, financial condition or results of operations.

    Minority shareholders of PCBV (representing an additional approximately 6%
of the shares of PCBV, hereinafter the "Reece Group") asserted claims against
the past and present directors or officers of, or members of the Board of
Managers of, PCI, PCBV and the Company or one or more controlling shareholders
of the Company.

    The claims by the Reece Group consist of allegations previously made by
Reece Communications, Inc. ("RCI"). RCI's allegations were premised on, among
other things, alleged acts, errors, omissions, misstatements, misleading
statements or breaches of duty by the aforementioned officers, directors, or
controlling shareholders. The Company negotiated a settlement of those claims
and a simultaneous purchase of the Reece Group's PCBV shares, as well as the
purchase of all other shares of PCBV held by other minority shareholders and a
settlement of their claims. On August 28, 2001, in exchange for the release of
claims and the transfer of all outstanding shares in PCBV held by minority
shareholders, the Company and/or its affiliates paid in the aggregate
approximately $3.6 million in cash at closing and issued promissory notes for
$17.0 million, which promissory notes accrue interest at 7% per annum and are
payable in increments over a period of 36 months in cash or UPC common stock, at
the payor's election. Although as of December 31, 2001, approximately
$17.0 million in principal amount was outstanding, as of the date of this annual
report filed on Form 10-K, only $10.0 million in principal amount remains
outstanding. The Company intends to repay these notes in 2002.

    Two of the Company's subsidiaries, Telewizja Kablowa Gosat-Service Sp. z
o.o. and PTK S.A., and four unrelated Polish cable operators and HBO Polska Sp.
z o.o. ("HBO Polska") were made defendants in a lawsuit instituted by Polska
Korporacja Telewizyjna Sp. z o.o., an indirect partially-owned subsidiary of
Canal+. The lawsuit was filed in the Provincial Court in Warsaw, XX Economic
Division (Sad Wojewodzki w Warszawie, Wydzial XX Gospodarczy) (the "Court"). The
main defendant in the proceedings is HBO Polska which is accused of broadcasting
HBO television programming in Poland without a license from the Polish National
Radio and Television Council as required by the Polish Television Act and
thereby undertaking an activity constituting an act of unfair competition. The
plaintiff has asked the Court to order HBO Polska to cease broadcasting of its
programming in Poland until it has received a broadcasting license from the
Polish National Radio and Television Council, and that the defendant cable
operators be ordered (i) to cease carrying the HBO Polska programming on their
cable networks in Poland until HBO Polska has received a broadcasting license
from the Polish National Radio and Television Council, (ii) not to use their
current filters for the purpose of unscrambling the HBO Polska programming, and
(iii) in the future, to use effective encoding systems and systems of controlled
access to the HBO Polska programming. The Company does not believe that the
lawsuit will have a material adverse effect on its business operations.

                                       16
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                                    PART II

ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

DESCRIPTION OF CAPITAL STOCK

    Set forth below is certain information concerning the Company's capital
stock and a brief summary of the material provisions of the Company's capital
stock, Certificate of Incorporation and By-Laws. This description does not
purport to be complete and is qualified in its entirety by reference to the
Company's Certificate of Incorporation and By-Laws.

GENERAL

    At March 30, 2001, the Company had authorized stock of 63,000 shares, of
which (i) 27,000 shares are common stock, par value $0.01 per share ("Common
Stock"), (ii) 4,000 shares are Series A Preferred Stock, par value of $1.00 per
share ("Series A Preferred Stock"), (iii) 2,000 shares are Series C Preferred
Stock, par value of $0.01 per share ("Series C Preferred Stock") and
(iv) 30,000 shares are Debenture Stock, par value $0.0001 ("Debenture Stock").

    At March 30, 2001, there were (i) 18,948 shares of Common Stock, (ii) 4,000
shares of Series A Preferred Stock, (iii) 2,000 shares of Series C Preferred
Stock, and (iv) 14,000 shares of Debenture Stock issued, outstanding and fully
paid.

COMMON STOCK

    DIVIDENDS.  Holders of Common Stock are entitled to dividends when, as and
if declared by the Board of Directors.

    VOTING RIGHTS.  Holders of Common Stock are entitled to one vote per share
on all matters submitted to the shareholders of the Company.

    Under New York law, the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock is required to approve, among other things, a
change in the designations, preferences or limitations of the shares of Common
Stock.

    LIQUIDATION RIGHTS.  Upon liquidation, dissolution or winding-up of the
Company, the holders of Common Stock are entitled to share ratably all assets
available for distribution after payment in full of, or provision for the
payment in full of, debts and other liabilities of the Company and payment of
distributions to preferred shareholders.

SERIES A PREFERRED STOCK

    DIVIDENDS.  The holders of Series A Preferred Stock are not entitled to
receive dividends.

    VOTING RIGHTS.  The holders of Series A Preferred Stock are not entitled to
vote on any matters submitted to the shareholders of the Company, except as
otherwise required by applicable law.

    REDEMPTION.  The Company is required on October 31, 2004 (the "Redemption
Date"), to redeem the Series A Preferred Stock. At the option of the Company,
the Series A Preferred Stock may be redeemed at any prior time, in whole or in
part. The redemption price per share of Series A Preferred Stock is $10,000. Any
shares of Series A Preferred Stock that have at any time been redeemed or
repurchased by the Company will, after such redemption or repurchase, be
cancelled by the Company and will not be available for reissue.

    LIQUIDATION.  Upon liquidation, dissolution or winding up of the Company,
after payment in full of, or provision for the payment of, the debts and other
liabilities of the Company and the Debenture

                                       17
<Page>
Stock, the remaining assets available for distribution to shareholders will be
distributed first to the holders of the Series A Preferred Stock, to the extent
available, in an amount equal to $10,000 per share, but if the funds available
therefore are insufficient, then to the holders of Series A Preferred Stock on a
PRO RATA basis in accordance with the number of shares of Series A Preferred
Stock held by each holder.

SERIES C PREFERRED STOCK

    DIVIDENDS.  The holders of Series C Preferred Stock are not entitled to
receive dividends.

    VOTING RIGHTS.  The holders of Series C Preferred Stock are not entitled to
vote on any matters submitted to the shareholders of the Company, except as
otherwise required by applicable law.

    REDEMPTION.  On the Redemption Date, the Company is required to redeem the
Series C Preferred Stock. At the option of the Company, the Series C Preferred
Stock may be redeemed at any time, in whole or in part. The redemption price per
share of Series C Preferred Stock is $10,000. From and after the close of
business on the Redemption Date, unless there has been a default in the payment
of the redemption price, all rights of holders of shares of Series C Preferred
Stock which shares have been redeemed cease and thereafter such shares will not
be deemed to be outstanding for any purposes whatsoever. Any shares of Series C
Preferred Stock that have at any time been redeemed or repurchased by the
Company will, after such redemption or repurchase, be cancelled by the Company
and will not be available for reissuance.

    LIQUIDATION.  Upon liquidation, dissolution or winding up of the affairs of
the Company, after payment or provisions for the payment of the debts and other
liabilities of the Company and the Debenture Stock, the assets then available
for distribution to the shareholders will be distributed first to the holders of
the Series A Preferred Stock, to the extent available, in an amount equal to
$10,000 per share, then, to the holders of the Series C Preferred Stock, to the
extent available, in an amount equal to $10,000 per share, but if the funds
available thereafter are insufficient, then to the holders of Series C Preferred
Stock on a PRO RATA basis in accordance with the number of shares held by each
holder of Series C Preferred Stock.

DEBENTURE STOCK

    DIVIDENDS.  The holders of Debenture Stock are not entitled to receive
dividends.

    VOTING RIGHTS.  The holders of Debenture Stock are not entitled to vote on
any matters submitted to the shareholders of the Company, except as otherwise
required by applicable law.

    REDEMPTION.  On December 31, 2003, the Company is required to redeem the
Debenture Stock. The redemption price per share of Debenture Stock is $10,000
plus interest at 10% per annum compounded annually from November 3, 1999 to the
date of redemption. From and after the close of business on the redemption date,
unless there has been a default in the payment of the redemption price, all
rights of holders of shares of Debenture Stock which shares have been redeemed
cease and thereafter such shares will not be deemed to be outstanding for any
purposes whatsoever. Any shares of Debenture Stock that have at any time been
redeemed or repurchased by the Company will, after such redemption or
repurchase, be cancelled by the Company and will not be available for
reissuance.

    LIQUIDATION.  Upon liquidation, dissolution or winding up of the affairs of
the Company, after payment or provisions for the payment of the debts and other
liabilities of the Company, the assets then available for distribution to the
shareholders will be distributed first to the holders of the Debenture Stock, to
the extent available, in an amount equal to $10,000 per share, but if the funds
available thereafter are insufficient, then to the holders of Debenture Stock on
a PRO RATA basis in accordance with the number of shares held by each holder of
Debenture Stock.

                                       18
<Page>
    SECURITY.  The Company has agreed to pledge PCBV Notes with an aggregate
principal amount of $176,815,000 million to secure the redemption of the
Debenture Stock. The holders of PCI Notes will be equally and ratably secured by
the pledge.

ITEMS REQUIRING SUPERMAJORITY VOTE UNDER THE CERTIFICATE OF INCORPORATION

    The following actions require (i) the affirmative vote of at least four
directors, followed by the affirmative vote of the percentage of issued and
outstanding capital stock entitled to vote thereon at a meeting of the
shareholders as required under the New York Business Corporation Law ("NYBCL"),
if such action is required to be submitted to the shareholders under the NYBCL,
or (ii) if any such action is not approved by at least four directors, then any
such action will require the affirmative vote of at least 61% of the total
voting power of the capital stock issued and outstanding and entitled to vote
thereon, provided however that if board approval of such action is required
under the NYBCL, the action will also require the approval of the Board of
Directors at a special meeting of the Board of Directors (and for no purposes
other than the approval of actions taken pursuant to this subsection (ii)) for
which two-fifths of the total number of directors constitutes a quorum:

    a)  a fundamental change in the business of the Company or any subsidiary;

    b)  the adoption of, and approval of any modification to, the annual budget
       of the Company for each fiscal year;

    c)  an expenditure, not accounted for in the budget during any fiscal year,
       in excess of $5 million;

    d)  a merger or other business combination or the sale, lease, transfer or
       other disposition of all or any material portion of the assets;

    e)  certain encumbrances;

    f)  related-party transactions;

    g)  the issuance by the Company of third-party debt which causes the
       aggregate of all third-party debt to exceed $25 million;

    h)  certain issuances of capital stock;

    i)  the declaration of dividends or other distributions;

    j)  the repurchase or optional redemption of any capital;

    k)  the dissolution or liquidation or voluntary winding-up of the Company;

    l)  amending the Company's Certificate of Incorporation or By-Laws;

    m) the giving of certain guarantees or indemnities;

    n)  the election or removal of the Chief Executive Officer or the Chairman
       of the Board;

    o)  entering into or modifying a material employment contract;

    p)  a change in the auditors or fiscal year-end of the Company;

    q)  settling or resolving tax claims in excess of $250,000;

    r)  commencement, prosecution or compromise of material litigation or
       arbitration proceedings; and

    s)  taking steps to wind-up, dissolve or voluntarily seek the protection of
       bankruptcy laws.

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

OVERVIEW

    The Company's revenues have been and will continue to be derived primarily
from monthly subscription fees for cable television services, fees for internet
service, and one-time installation fees. The Company charges cable subscribers
fixed monthly fees for their choice of service packages and for other services
such as premium channels and rental of remote control devices. The Company
currently offers broadcast, intermediate (in limited areas) and basic packages
of cable service. On December 31, 2001, approximately 63.6% of the Company's
subscribers received the basic package compared to 70.7% for the year ended
December 31, 2000. For the year ended December 31, 2001, approximately 95.5% of
the Company's cable revenue was derived from monthly subscription fees compared
to approximately 97.3% for the year ended December 31, 2000.

    When the Company began operations in 1990, revenue from installation fees
exceeded revenue from monthly subscription fees because of the significant
number of new installations and the high amount of the installation fees
relative to the small existing subscriber base. As the Company's cable
subscriber base has grown, aggregate monthly subscription revenue has increased
and installation fees, while currently increasing on an aggregate basis, have
declined as a percentage of total revenue.

    During the fourth quarter of the year 2000, the Company began providing
Internet services to its cable television customers. Although the Company does
not currently have additional capital to invest in development of this service,
it intends to expand its Internet service offering at some point in the future.
Revenue of $1.6 million for fiscal year 2001 was attributable to the Company's
Internet services. Individual and home office Internet subscribers are charged a
monthly subscription fee of $38.90 and $51.40, respectively. The standard
installation fee is approximately $61.50 for existing cable customers and
approximately $66.50 for new customers.

    The Company has implemented a pricing strategy designed to increase revenue
per subscriber and thus its profit margin. For an additional monthly charge,
certain of the Company's cable networks have offered two premium television
services--the HBO Poland Service and Wizja Sport. In connection with the Canal+
merger, in February 2002, Canal+ Multiplex began to be distributed across the
Company's network. The Company, its parent and TKP are currently negotiating the
definitive long-form channel carriage agreement for distribution of Canal+
Multiplex. The Company offers HBO Poland and Canal+ Multiplex for approximately
$8.80 and $9.90 per month, respectively. The Company also offers these channels
as a package at approximately $14.80 per month.

    The Company generated operating losses of $53.1 million for 2001,
$44.6 million for 2000 and $38.9 million for 1999 primarily due to the purchase
of Wizja TV programming for $24.9 million, $24.4 million and $21.0 million in
2001, 2000 and 1999, respectively and the amortization of goodwill pushed down
to the Company as a result of the merger of UPC Polska into a wholly-owned
subsidiary of UPC on August 6, 1999.

CRITICAL ACCOUNTING POLICIES

    The discussion and analysis of the Company's financial condition and results
of operations are based upon the Company's consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets and liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities at the date of our financial statements.
Actual results may differ from these estimates under different assumptions or
conditions.

                                       20
<Page>
    Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties, which would potentially result in
materially different results under different assumptions and conditions. The
Company believes that its critical accounting policies are limited to those
described below. For a detailed discussion on the application of these and other
accounting policies, see Note 4 "Summary of Significant Accounting Policies" in
the notes to the consolidated financial statements.

IMPAIRMENT OF LONG-LIVED ASSETS

    The Company assesses the recoverability of a long-lived asset (mainly
property, plant and equipment, intangibles, and certain other assets) by
determining whether the carrying value of the asset can be recovered over the
remaining life of the asset through projected undiscounted future operating cash
flows, expected to be generated by such asset. If an impairment in value is
estimated to have occurred, the assets carrying value is reduced to its
estimated fair value. The assessment of the recoverability of long-lived assets
will be impacted if estimated future operating cash flows are not achieved.
Additionally if the Company's plans or assumptions change, if its assumptions
prove inaccurate, if it consummates unanticipated investments in or acquisitions
of other companies, if it experiences unexpected costs or competitive pressures,
or if existing cash, and projected cash flow from operations prove to be
insufficient, the Company may need to impair certain of its long-lived assets.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

    The allowance for doubtful accounts is based upon the Company's assessment
of probable loss related to overdue accounts receivable. Upon disconnection of
the subscriber, the account is fully reserved. The allowance is maintained on
the books either until receipt of payment, or until the account is deemed
uncollectable for a maximum of three years.

REVENUE RECOGNITION

    Revenue related to the provision of cable television and internet services
to customers are recognized in the period in which the related services are
provided. Initial installation fees related to cable television services 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.

FOREIGN CURRENCIES

    Foreign currency transactions are recorded at the exchange rate prevailing
at the date of the transactions. Assets and liabilities denominated in foreign
currencies are translated at rates of exchange at balance sheet date. Gains and
losses on foreign currency transactions are included in the consolidated
statement of operations.

    The financial statements of foreign subsidiaries are translated to U.S.
dollars using (i) exchange rates in effect at period end for assets and
liabilities, and (ii) average exchange rates during the period for results of
operations. Adjustments resulting from translation of financial statements are
reflected in accumulated other comprehensive loss as a separate component of
stockholder's equity. The Company considers all of its intercompany loans to its
Polish subsidiaries to be of a long-term investment nature. As a result, any
foreign exchange gains or losses resulting from the intercompany loans are
reported in accumulated other comprehensive loss.

                                       21
<Page>
    In addition to other operating statistics, the Company measures its
financial performance by EBITDA, an acronym for earnings before interest, taxes,
depreciation and amortization. The Company defines EBITDA to be net loss
adjusted for interest and investment income, depreciation and amortization,
interest expense, foreign currency gains and losses, equity in losses of
affiliated companies, income taxes, extraordinary items, non-recurring items
(e.g., compensation expense related to stock options), gains and losses from the
sale of assets other than in a normal course of business and minority interest.
The items excluded from EBITDA are significant components in understanding and
assessing the Company's financial performance. The Company believes that EBITDA
and related measures of cash flow from operating activities serve as important
financial indicators in measuring and comparing the operating performance of
media companies. EBITDA is not a U.S. GAAP measure of profit and loss or cash
flow from operations and should not be considered as an alternative to cash
flows from operations as a measure of liquidity. The Company reported EBITDA of
positive $1.7 million for 2001, $1.2 million for 2000 and negative $6.9 million
for 1999.

2001 COMPARED WITH 2000

    REVENUE.  Revenue from the Company's cable operations increased
$8.3 million or 12.1% from $68.8 million for the year ended December 31, 2000,
to $77.1 million for the year ended December 31, 2001. This increase was
primarily attributable to appreciation of the Polish zloty against the U.S.
dollar, as well as an increase in monthly subscription rates for cable
television service. Additionally, approximately $1.6 million, or 2.1%, of cable
revenues for fiscal year 2001 were attributable to the Company's Internet
service offering, which was first offered in December 2000.

    Revenue from monthly subscription fees as a percentage of total cable
revenue decreased 1.8% from 97.3% for the year ended December 31, 2000 to 95.5%
for the year ended December 31, 2001. During the year ended December 31, 2001,
the Company generated approximately $4.6 million in revenue from premium
services due primarily to provision of HBO Poland and Wizja Sport channels to
cable subscribers, as compared to $4.5 million for the year ended December 31,
2000 (although the Company expanded Wizja Sport into its basic package as of
March 24, 2001 and closed it as of December 31, 2001).

    DIRECT OPERATING EXPENSES.  Direct operating expenses increased
$5.5 million, or 12.2%, from $45.1 million for the year ended December 31, 2000,
to $50.6 million for the year ended December 31, 2001, principally as a result
of an increase in programming related expenses. Direct operating expenses
amounted to 65.6% of revenues for the year ended December 31, 2000, as compared
to 65.6% of revenues for the year ended December 31, 2001.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased $2.3 million, or 10.2%, from $22.5 million for
the year ended December 31, 2000 to $24.8 million for the year ended
December 31, 2001, principally as a result of increases in administrative
expenses such as costs associated with billing customers and information system
costs related to the Company's information technology department. Selling,
general and administrative expenses decreased from 32.7% of revenues for the
year ended December 31, 2000 to 32.2% for the year ended December 31, 2001.

    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expense rose
$9.0 million, or 19.7%, from $45.8 million for the year ended December 31, 2000,
to $54.8 million for the year ended December 31, 2001 principally as a result of
the continued build-out of the Company's cable networks. Depreciation and
amortization expense as a percentage of revenues increased from 66.6% for the
year ended December 31, 2000 to 71.1% for the year ended December 31, 2001.

                                       22
<Page>
    OPERATING LOSS.  Each of these factors contributed to an operating loss of
$53.1 million for the year ended December 31, 2001, compared to an operating
loss of $44.6 million for the year ended December 31, 2000.

    INTEREST EXPENSE.  Interest expense decreased $0.1 million, or 4.0%, from
$2.5 million in 2000 to $2.4 million in 2001 as a result of a partial repayment
of Deutsche Mark credit.

    INTEREST AND INVESTMENT INCOME.  Interest and investment income decreased
$0.1 million, or 33.3%, from $0.3 million in 2000 to $0.2 million in 2001,
primarily due to decrease in interest income earned from cash held at banks.

    FOREIGN EXCHANGE GAIN.  Foreign exchange differences increased $3.1 million
from positive $0.4 million in 2000 to positive $3.5 million in 2001, primarily
due to favorable exchange rate fluctuations.

    NET LOSS.  For 2000 and 2001, the Company had net losses of $46.5 million
and $52.0 million, respectively. These losses were the result of the factors
discussed above.

    NET LOSS APPLICABLE TO COMMON STOCKHOLDERS.  Net loss applicable to common
stockholders increased from $64.9 million in 2000 to $72.3 million in 2001 due
to the current year accretion of redeemable preferred stock and accrued dividend
on Mandatorily Redeemable Debenture Stock, as well as the factors discussed
above.

2000 COMPARED WITH 1999

    REVENUE.  Revenue increased $6.3 million or 10.1% from $62.5 million in the
year ended December 31, 1999 to $68.8 million in the year ended December 31,
2000. This increase was primarily attributable to a 1.9% increase in the number
of basic and intermediate subscribers from approximately 783,000 at
December 31, 1999 to approximately 798,000 at December 31, 2000, as well as an
increase in monthly subscription rates.

    Revenue from monthly subscription fees represented 94.0% of cable television
revenue for the year ended December 31, 1999 and 97.3% for the year ended
December 31, 2000. During the year ended December 31, 2000, the Company
generated approximately $4.5 million of additional premium subscription revenue
as a result of providing the HBO Poland and Wizja Sport premium channels to
cable subscribers as compared to $2.1 million for the year ended December 31,
1999 (although the Company expanded Wizja Sport into its basic package as of
March 24, 2001).

    DIRECT OPERATING EXPENSES.  Direct operating expenses decreased
$0.7 million or 1.5%, from $45.8 million for the year ended December 31, 1999 to
$45.1 million for the year ended December 31, 2000, principally as a result of
restructuring programming agreements with Wizja TV B.V., a subsidiary of the
Company's parent. Direct operating expenses decreased from 73.3% of revenues for
the year ended December 31, 1999 to 65.6% of revenues for the year ended
December 31, 2000. However, without considering the intercompany charge for
Wizja TV programming package, direct operating expenses as a percentage of
revenue would have been 30.0% and 39.7% in the year ended December 31, 2000 and
1999, respectively.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses decreased $1.0 million or 4.3% from $23.5 million for
the year ended December 31, 1999 to $22.5 million for the year ended
December 31, 2000, principally as a result of decreases in other administrative
expenses. Selling, general and administrative expenses decreased from 37.6% of
revenues for the year ended December 31, 1999 to 32.7% for the year ended
December 31, 2000.

    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expense rose
$13.8 million, or 43.1%, from $32.0 million for the year ended December 31, 1999
to $45.8 million for the year ended

                                       23
<Page>
December 31, 2000 principally as a result of depreciation and amortization of
additional goodwill pushed down as a result of the merger with UPC and the
continued build-out of the Company's cable networks. Depreciation and
amortization expense as a percentage of revenues increased from 51.2% for the
year ended December 31, 1999 to 66.6% for the year ended December 31, 2000.

    OPERATING LOSS.  Each of these factors contributed to an operating loss of
$44.6 million for the year ended December 31, 2000 and $38.9 million for the
year ended December 31, 1999.

    INTEREST EXPENSE.  Interest expense decreased $10.3 million, or 80.5%, from
$12.8 million in 1999 to $2.5 million in 2000 as a result of repurchase of
approximately 87% of the Company's 9 7/8% Senior Notes due 2003 (the "PCI
Notes") on November 2, 1999 and pay back of $6.5 million of Amerbank loan on
November 20, 1999.

    INTEREST AND INVESTMENT INCOME.  Interest and investment income increased
$0.1 million, or 50%, from $0.2 million in 1999 to $0.3 million in 2000,
primarily due to increase in interest income earned from cash held at banks.

    FOREIGN EXCHANGE GAIN/(LOSS), NET.  Foreign exchange differences increased
$4.6 million from negative $4.2 million in 1999 to positive $0.4 million in
2000, primarily due to favorable exchange rate fluctuations.

    NET LOSS.  For 1999 and 2000, the Company had net losses of $53.8 million
and $46.5 million, respectively. These losses were the result of the factors
discussed above.

    NET LOSS APPLICABLE TO COMMON STOCKHOLDERS.  Net loss applicable to common
stockholders increased from $59.8 million in 1999 to $64.9 million in 2000 due
to the current year accretion of redeemable preferred stock and accrued dividend
on Mandatorily Redeemable Debenture Stock as well as the factors discussed
above.

LIQUIDITY AND CAPITAL RESOURCES

    The Company has met its cash requirements in recent years primarily with
(i) capital contributions and loans from UPC Polska, (ii) borrowings under
available credit facilities, (iii) cash flows from operations, and (iv) the sale
of $130 million aggregate principal amount of the Company's 9 7/8% Senior Notes
due to 2003 ("PCI Notes"). The Company had negative cash flow from operating
activities of $15.5 million for 1999 due to the Company's net loss. The Company
had positive cash flows from operating activities of $12.9 million for 2000 and
$6.9 million for 2001.

    Since the acquisition of all of the outstanding stock of the Company's
parent, UPC Polska, by UPC on August 6, 1999, the Company has met its capital
requirements primarily through the sale of its Mandatorily Redeemable Debenture
Stock for $140 million to UPC Polska.

    Cash used for the purchase and expansion of the Company's cable television
networks was $23.4 million, $30.4 million and $22.1 million in 2001, 2000 and
1999, respectively.

    On December 31, 2001, the Company was committed to pay at least
$133.7 million in guaranteed payments (including but not limited to payments of
guaranteed minimum amounts due under programming agreements over the next eight
years) of which at least approximately $23.7 million was committed through the
end of 2002.

                                       24
<Page>
    The following table presents the Company's minimum future commitments under
its programming and lease contracts.

<Table>
<Caption>
                                                                                               2007 AND
                                         2002       2003       2004       2005       2006     THEREAFTER    TOTAL
                                       --------   --------   --------   --------   --------   ----------   --------
                                                                      (IN THOUSANDS)
<S>                                    <C>        <C>        <C>        <C>        <C>        <C>          <C>
Building.............................  $   339    $    --    $    --    $    --     $   --      $    --    $    339
Conduit..............................    1,019          4         --         --         --           --       1,023
Programming..........................   22,211     19,804     16,812     13,406      6,124       53,860     132,217
Other................................       56         --         --         --         --           --          56
Headend..............................       28         --         --         --         --           --          28
                                       -------    -------    -------    -------     ------      -------    --------
TOTAL................................  $23,653    $19,808    $16,812    $13,406     $6,124      $53,860    $133,663
                                       =======    =======    =======    =======     ======      =======    ========
</Table>

    On October 31, 1996, $130 million aggregate principal amount of the PCI
Notes were sold by the Company to the initial purchaser pursuant to a purchase
agreement. The initial purchaser subsequently completed a private placement of
the PCI Notes. The PCI Notes were issued pursuant to an indenture.

    Pursuant to the indenture governing the PCI Notes (the "PCI Indenture"), the
Company is subject to certain restrictions and covenants, including, without
limitation, covenants with respect to the following matters: (i) limitations on
additional indebtedness; (ii) limitations on restricted payments;
(iii) limitations on issuances and sales of capital stock of restricted
subsidiaries; (iv) limitations on transactions with affiliates; (v) limitations
on liens; (vi) limitations on guarantees of indebtedness by subsidiaries;
(vii) purchase of PCI Notes upon a change of control; (viii) limitations on sale
of assets; (ix) limitations on dividends and other payment restrictions
affecting subsidiaries; (x) limitations on investments in unrestricted
subsidiaries; (xi) limitations on lines of business; (xii) consolidations,
mergers and sale of assets; and (xiii) provision of financial statements and
reports. The Company is in compliance with these covenants. However, as
discussed further in Note 10, there is a risk that the Company could experience
an Event of Default during 2002. As this risk has been assessed by the Company
and the Company has determined it is not "virtually certain", the Company
continues to reflect these Notes as long-term.

    The Company has pledged to State Street Bank and Trust Company, the trustee
for the PCI Notes (for the benefit of the holders of the PCI Notes) intercompany
notes issued by PCBV, of a minimum aggregate principal amount (together with
cash and cash equivalents of the Company), equal to at least 110% of the
outstanding principal amount of the PCI Notes, and that, in the aggregate,
provide cash collateral or bear interest and provide for principal repayments,
as the case may be, in amounts sufficient to pay interest on the PCI Notes.
Notes payable from PCBV to the Company were $249,765,000 and $210,530,000 at
December 31, 2001 and 2000, respectively.

    The indentures covering the PCI Notes provide that, following a Change of
Control (as defined therein), each noteholder had the right, at such holder's
option, to require the respective issuer to offer to repurchase all or a portion
of such holder's PCI Notes at the repurchase prices, described below. The
Company believes that the August 6, 1999 acquisition by UPC of UPC Polska
constituted a Change of Control. Accordingly, PCI made offers to repurchase (the
"Offers") from the holders of the PCI Notes. The Offers expired at 12:01 PM, New
York City time, on November 2, 1999.

    In accordance with the terms of the indentures governing the PCI Notes, the
Company was required to offer to repurchase the PCI Notes at the purchase price
101% of principal. As of August 5, 1999, the Company had $129,668,000 aggregate
principal amount at maturity of PCI Notes outstanding. Pursuant to the Offer,
the Company has purchased $113,237,000 aggregate principal amount of PCI Notes
for an aggregate price of $114,369,370.

    To fund the repurchase of the PCI Notes and operations, as of November 3,
1999, PCI sold to UPC Polska 14,000 shares of its Mandatorily Redeemable
Debenture Stock for a total of $140 million

                                       25
<Page>
on an as-issued basis. The Debenture Stock will be redeemed on December 31, 2003
for a price of $10,000 per share plus interest at 10% per annum from
November 3, 1999 to the date of redemption, compounded annually. UPC funded UPC
Polska's purchase of the Mandatorily Redeemable Debenture Stock. To secure its
obligations under the Mandatorily Redeemable Debenture Stock, the Company has
pledged to UPC Polska intercompany notes issued by PCBV in an aggregated
principal amount of $176,815,000 as of December 31, 2001. The PCI Noteholders
are equally and ratably secured by the pledge in accordance with the terms of
the PCI Indenture.

    The Company's cash on hand will be insufficient to complete its current
business plan. As of December 31, 2001, the Company had negative working
capital. In addition to its contractual commitments described in the table
above, the Company has repayment obligations in November 2003 related to the PCI
Notes of approximately $14.5 million in principal amount, plus interest,
redemption obligations in December 2003 of approximately $140 million, plus
interest, related to the Mandatorily Redeemable Debenture Stock, and repayment
obligations beginning in 2003 of approximately $9.7 million, including interest,
related to its currently outstanding indebtedness owed to UPC Polska. The
Company has trade payables of $60.3 million currently due to UPC Polska and its
affiliates. The Company and UPC Polska are evaluating various alternatives to
meet the Company's capital needs. The Company has in the past relied on UPC
Polska to help meet its obligations. UPC Polska has in the past relied on its
parent, UPC, and UPC's affiliates to meet its obligations. UPC is negotiating a
restructuring of its indebtedness and so UPC Polska, and indirectly, the
Company, may not be able to rely on UPC for financial support. If the Company is
unable to rely on UPC Polska (and, indirectly, UPC itself) for financial
support, the Company will have to meet its obligations with cash on hand and
with funds obtained from public or private debt or bank financing or any
combination thereof, subject to the restrictions contained in the indentures
governing the outstanding senior indebtedness of the Company, UPC Polska, UPC,
and UnitedGlobalCom, Inc., UPC's parent. The Company's cash on hand will be
insufficient to satisfy all of its obligations and the Company cannot be certain
that it will be able to obtain the necessary financing at all, or on terms that
will be favorable to the Company. Moreover, if the Company's plans or
assumptions change, if its assumptions prove inaccurate, if it consummates
unanticipated investments in or acquisitions of other companies, if it
experiences unexpected costs or competitive pressures, or if existing cash, and
projected cash flow from operations prove to be insufficient, the Company may
need to obtain greater amounts of additional financing. While it is the
Company's intention to enter only into new financing or refinancing that it
considers advantageous, there can be no assurance that such sources of financing
would be available to the Company in the future, or, if available, that they
could be obtained on terms acceptable to the Company.

NEW ACCOUNTING PRINCIPLES

ADOPTED

    Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (SFAS) No.133, "Accounting for Derivative and Hedging
Activities", which establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. All derivatives, whether designated in
hedging relationships or not, are required to be recorded on the balance sheet
at fair value. The adoption of SFAS 133 did not have a material impact on the
Company's financial position, as it does not have any derivative instruments.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations,"
("SFAS 141"), which is required to be adopted July 1, 2001. SFAS 141 requires
the purchase method of accounting for all business combinations initiated after
June 30, 2001. The Company has applied SFAS 141 to its only applicable
transaction, the purchase of the minority interest in PCBV in August 28, 2001.

                                       26
<Page>
TO BE ADOPTED

    In July 2001, the Financial Accounting Standards Board issued SFAS No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142"), which requires goodwill and
intangible assets with indefinite useful lives to no longer be amortized, but to
be tested for impairment at least annually. Intangible assets that have finite
lives will continue to be amortized over their estimated useful lives. The
amortization and non-amortization provisions of SFAS 142 will be applied to all
goodwill and intangible assets acquired after June 30, 2001. Effective
January 1, 2002, we are required to apply all other provisions of SFAS 142. We
are currently evaluating the potential impact, if any, the adoption of SFAS 142
will have on our financial position and results of operations.

    In August 2001, the Financial Accounting Standards Board issued SFAS
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). This
statement addresses the financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. SFAS No. 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset and reported as a liability. This statement is effective for
fiscal years beginning after June 15, 2002. The adoption of SFAS No. 143 is not
anticipated to have a material impact on our financial position or results of
operations.

    In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
("SFAS 144"), which is effective for fiscal periods beginning after
December 15, 2001 and interim periods within those fiscal years. SFAS 144
establishes an accounting model for impairment or disposal of long-lived assets
to be disposed. We are currently evaluating the potential impact, if any, the
adoption of SFAS 144 will have on our financial position and results of
operation. We expect that we will have our SFAS 144 evaluation completed during
the fourth quarter of 2002. At this point, management is aware that the adoption
of SFAS 144 could result in material adjustments to its long-lived assets and
its statement of operations during 2002. See Notes 7 and 8 to the financial
statements for further discussion of the Company's long-lived assets which total
$508.9 million, including intangible assets of $370.1 million, which could be
impacted as a result of the adoption of SFAS 144.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The principal market risk (i.e. the risk of loss arising from adverse
changes in market rates and prices) to which the Company is exposed is foreign
exchange rate risk from fluctuations in the Polish zloty currency exchange rate.
The Company's long term debt is primarily subject to a fixed rate, and therefore
the Company is neither materially benefited nor materially disadvantaged by
variations in interest rates. The Company's major programming commitments are
denominated in US dollars or Euros. The Company revenues from subscribers are in
Polish zloty.

FOREIGN EXCHANGE AND OTHER INTERNATIONAL MARKET RISKS

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

    International operations constitute 100% of the Company's 2001 consolidated
operating loss. Some of the Company's operating expenses and capital
expenditures are expected to continue to be denominated in or indexed in U.S.
dollars. By contrast, substantially all of the Company's revenues are
denominated in zloty. Any devaluation of the zloty against the U.S. dollar that
the Company is unable

                                       27
<Page>
to offset through price adjustments will require it to use a larger portion of
its revenue to service its U.S. dollar denominated obligations and contractual
commitments.

    The Company estimates that a 10% change in foreign exchange rates would
impact reported operating loss for the year ended December 31, 2001 by
approximately $2.4 million. In other terms, a 10% depreciation of the Polish
zloty against the U.S. dollar, would result in a $2.4 million decrease in the
reported operating loss for the year ended December 31, 2001. The Company
believes that this quantitative measure has inherent limitations because, as
discussed in the first paragraph of this section, it does not take into account
any governmental actions or changes in either customer purchasing patterns or
the Company's financing or operating strategies.

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

    Poland has historically experienced high levels of inflation and significant
fluctuations in the exchange rate for the zloty. The Polish government has
adopted policies that slowed the annual rate of inflation from approximately
250% in 1990 to approximately 7.3% in 1999, 10.1% in 2000 and approximately 5.5%
in 2001. The exchange rate for the zloty has stabilized and the rate of
devaluation of the zloty has generally decreased since 1991. The zloty
depreciated against the U.S. dollar by approximately 17.4% for the year ended
December 31, 1999. However for the year ended December 31, 2000 and 2001, the
zloty has appreciated against the U.S. dollar by approximately 0.12% and 3.80%,
respectively. Inflation and currency exchange fluctuations may have a material
adverse effect on the business, financial condition and results of operations of
the Company.

<Table>
<Caption>
                                                AMOUNT
                                              OUTSTANDING
                                                 AS OF
                                             DECEMBER 31,                              EXPECTED REPAYMENT
                                                 2001                                  AS OF DECEMBER 31,
                                          -------------------   -----------------------------------------------------------------
                                            BOOK       FAIR                                                             2007 AND
                                           VALUE      VALUE       2002       2003       2004       2005       2006     THEREAFTER
                                          --------   --------   --------   --------   --------   --------   --------   ----------
                                                                              (IN THOUSANDS)
<S>                                       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
PCI Notes, net of discount..............  $14,509    $14,509      $ --     $14,509      $ --       $ --       $ --        $ --
Bank Rozwoju Exportu S.A. Deutsche --
  Mark facility.........................      407        407       407          --        --         --         --          --
                                          -------    -------      ----     -------      ----       ----       ----        ----
Total...................................  $14,916    $14,916      $407     $14,509      $ --       $ --       $ --        $ --
                                          =======    =======      ====     =======      ====       ====       ====        ====
</Table>

                                       28
<Page>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholder of Poland Communications, Inc.:

    We have audited the accompanying consolidated balance sheets of Poland
Communications, Inc. (a New York corporation) and subsidiaries as of
December 31, 2001 and 2000, and the related consolidated statements of
operations, comprehensive loss, changes in stockholder's equity and cash flows
for the years ended December 31, 2001 and 2000, and for the periods from
January 1, 1999 through August 5, 1999 and from August 6, 1999 through
December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these 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 financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the 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 financial statements referred to above present fairly,
in all material respects, the financial position of Poland Communications, Inc.
and subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years ended December 31, 2001 and 2000,
and for the periods from January 1, 1999 through August 5, 1999 and from
August 6, 1999 through December 31, 1999, in conformity with accounting
principles generally accepted in the United States.

    The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 3 to the consolidated financial statements, the Company has suffered
recurring losses from operations and has a negative working capital that raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

Arthur Andersen Sp. z o.o.

Warsaw, Poland
March 31, 2002

                                       29
<Page>
                          POLAND COMMUNICATIONS, INC.

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                               SUCCESSOR      SUCCESSOR
                                                                (NOTE 2)       (NOTE 2)
                                                              ------------   ------------
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  2001           2000
                                                              ------------   ------------
                                                                    (IN THOUSANDS)
<S>                                                           <C>            <C>
                           ASSETS
Current assets:
  Cash and cash equivalents.................................    $   3,210      $   1,442
  Trade accounts receivable, net of allowances for doubtful
    accounts of $2,765 in 2001 and $4,937 in 2000
    (note 5)................................................        6,478          8,968
  VAT recoverable...........................................           --            241
  Prepayments...............................................          733            510
  Due from affiliates.......................................           48             --
  Other current assets......................................          176            192
                                                                ---------      ---------
    Total current assets....................................       10,645         11,353
                                                                ---------      ---------
  Property, plant and equipment (note 7):
    Cable system assets.....................................      166,955        151,417
    Construction in progress................................          783          6,179
    Vehicles................................................        1,612            707
    Office, furniture and equipment.........................       11,431         10,380
    Other...................................................       12,146          1,729
                                                                ---------      ---------
                                                                  192,927        170,412
      Less accumulated depreciation.........................      (54,059)       (28,147)
                                                                ---------      ---------
      Net property, plant and equipment.....................      138,868        142,265
  Inventories for construction..............................        4,028          5,686
  Intangible assets, net (note 8)...........................      370,062        359,568
                                                                ---------      ---------
      Total assets..........................................    $ 523,603      $ 518,872
                                                                =========      =========
            LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
  Accounts payable and accrued expenses.....................    $  19,391      $  28,343
  Accrued interest..........................................          240            236
  Deferred revenue..........................................        2,646          2,182
  Current portion of notes payable (note 10)................          407             --
  Due to UPC Polska and affiliates..........................       60,343         38,316
                                                                ---------      ---------
    Total current liabilities...............................       83,027         69,077
Long term liabilities:
  Notes payable and accrued interest to UPC Polska..........        9,706          8,739
  Other payables to UPC Polska..............................           --         14,530
  Notes payable (note 10)...................................       14,509         15,344
                                                                ---------      ---------
    Total liabilities.......................................      107,242        107,690
                                                                ---------      ---------
Redeemable preferred stock (liquidation value $60,000,000;
  6,000 shares authorized, issued and outstanding)
  (note 12).................................................       43,521         38,858
Mandatorily Redeemable Debenture stock 30,000 authorized;
  14,000 shares issued and outstanding (including accrued
  dividend) (note 13).......................................      172,223        156,566
Commitments and contingencies (note 3,16,17)
Stockholder's equity:
  Common stock, $.01 par value, 27,000 shares authorized;
    18,948 shares issued and outstanding....................            1              1
  Paid-in capital...........................................      353,464        332,579
  Accumulated other comprehensive loss......................      (21,232)       (37,182)
  Accumulated deficit.......................................     (131,616)       (79,640)
                                                                ---------      ---------
    Total stockholder's equity..............................      200,617        215,758
                                                                ---------      ---------
    Total liabilities and stockholder's equity..............    $ 523,603      $ 518,872
                                                                =========      =========
</Table>

          See accompanying notes to consolidated financial statements.

                                       30
<Page>
                          POLAND COMMUNICATIONS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                     SUCCESSOR (NOTE 2)                PREDECESSOR (NOTE 2)
                                         -------------------------------------------   --------------------
                                                                        PERIOD FROM        PERIOD FROM
                                                                         AUGUST 6,          JANUARY 1,
                                          YEAR ENDED     YEAR ENDED    1999 THROUGH        1999 THROUGH
                                         DECEMBER 31,   DECEMBER 31,   DECEMBER 31,         AUGUST 5,
                                             2001           2000           1999                1999
                                         ------------   ------------   -------------   --------------------
                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>            <C>            <C>             <C>
Revenues...............................   $   77,123     $   68,781     $   27,027          $   35,434
Operating expenses:
  Direct operating expenses charged by
    third parties......................       25,687         18,150         11,615              10,636
  Direct operating expenses charged by
    affiliates.........................       24,906         26,933          9,931              13,634
  Selling, general and administrative
    expenses...........................       24,817         22,495         14,246               9,281
  Depreciation and amortization........       54,789         45,784         18,158              13,819
                                          ----------     ----------     ----------          ----------
Total operating expenses...............      130,199        113,362         53,950              47,370

  Operating loss.......................      (53,076)       (44,581)       (26,923)            (11,936)

Interest and investment (loss)/income,
  net..................................          240            257            (11)                167
Interest expense.......................       (2,398)        (2,458)        (4,253)             (8,578)
Foreign exchange gain/(loss), net......        3,512            374         (3,909)               (295)
Other income, net......................           --             --          1,977                  --
                                          ----------     ----------     ----------          ----------
  Loss before income taxes.............      (51,722)       (46,408)       (33,119)            (20,642)
Income tax expense (note 9)............         (254)          (102)           (11)                (30)
                                          ----------     ----------     ----------          ----------
  Net loss.............................      (51,976)       (46,510)       (33,130)            (20,672)
  Accretion of redeemable preferred
    stock (note 12)....................       (4,663)        (4,163)        (1,911)             (1,807)
  Accrued dividend on Mandatorily
    Redeemable Debenture stock.........      (15,657)       (14,233)        (2,333)                 --
                                          ----------     ----------     ----------          ----------
Net loss applicable to holders of
  common stock.........................   $  (72,296)    $  (64,906)    $  (37,374)         $  (22,479)
                                          ==========     ==========     ==========          ==========

Basic net loss per common share
  (note 11)............................   $(3,815.50)    $(3,425.48)    $(1,972.45)         $(1,186.35)
                                          ==========     ==========     ==========          ==========
</Table>

          See accompanying notes to consolidated financial statements.

                                       31
<Page>
                          POLAND COMMUNICATIONS, INC.

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

<Table>
<Caption>
                                                     SUCCESSOR (NOTE 2)               PREDECESSOR (NOTE 2)
                                         ------------------------------------------   --------------------
                                                                       PERIOD FROM        PERIOD FROM
                                                                        AUGUST 6,          JANUARY 1,
                                          YEAR ENDED     YEAR ENDED    1999 THROUGH       1999 THROUGH
                                         DECEMBER 31,   DECEMBER 31,   DECEMBER 31,        AUGUST 5,
                                             2001           2000           1999               1999
                                         ------------   ------------   ------------   --------------------
                                                                  (IN THOUSANDS)
<S>                                      <C>            <C>            <C>            <C>
Net loss...............................    $(51,976)      $(46,510)      $(33,130)          $(20,672)
Other comprehensive income/(loss):
  Translation adjustment...............      15,950         (1,806)       (35,376)           (15,947)
                                           --------       --------       --------           --------
Comprehensive loss.....................    $(36,026)      $(48,316)      $(68,506)          $(36,619)
                                           ========       ========       ========           ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       32
<Page>
                          POLAND COMMUNICATIONS, INC.

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

<Table>
<Caption>
                                            COMMON STOCK
                                         -------------------   PAID IN    COMPREHENSIVE   ACCUMULATED
                                          SHARES     AMOUNT     AMOUNT       INCOME         DEFICIT      TOTAL
                                         --------   --------   --------   -------------   -----------   --------
<S>                                      <C>        <C>        <C>        <C>             <C>           <C>
Balance at January 1, 1999 (Predecessor
  note 2)..............................   18,948      $ 1      $ 78,380      $    586      $ (92,528)   $(13,561)
  Net loss for seven months of 1999....       --       --            --            --        (20,672)    (20,672)
  Cumulative Translation Adjustment....       --       --            --       (15,947)            --     (15,947)
  Capital Contribution.................       --       --         6,000            --             --       6,000
  Accretion of redeemable preferred
    stock (note 12)....................       --       --        (1,807)           --             --      (1,807)
                                          ------      ---      --------      --------      ---------    --------
Balance at August 5, 1999 (Predecessor
  note 2)..............................   18,948        1        82,573       (15,361)      (113,200)    (45,987)
  Purchase accounting..................                         248,986        15,361        113,200     377,547
                                          ------      ---      --------      --------      ---------    --------
Balance at August 6, 1999 (Successor
  note 2)..............................   18,948        1       331,559            --             --     331,560
  Net loss for five months of 1999.....       --       --            --            --        (33,130)    (33,130)
  Cumulative Translation Adjustment....       --       --            --       (35,376)            --     (35,376)
  Capital Contribution.................       --       --        15,000            --             --      15,000
  Accretion of redeemable preferred
    stock (note 12)....................       --       --        (1,911)           --             --      (1,911)
  Accrued dividend on Mandatorily
    Redeemable Debenture Stock.........       --       --        (2,333)           --             --      (2,333)
                                          ------      ---      --------      --------      ---------    --------
Balance at December 31, 1999 (Successor
  note 2)..............................   18,948        1       342,315       (35,376)       (33,130)    273,810
  Net loss.............................       --       --            --            --        (46,510)    (46,510)
  Cumulative Translation Adjustment....       --       --            --        (1,806)            --      (1,806)
  Capital Contribution.................       --       --         3,860            --             --       3,860
  Purchase accounting..................       --       --         4,800            --             --       4,800
  Accretion redeemable preferred stock
    (note 12)..........................       --       --        (4,163)           --             --      (4,163)
  Accrued dividend on Mandatorily
    Redeemable Debenture Stock.........       --       --       (14,233)           --             --     (14,233)
                                          ------      ---      --------      --------      ---------    --------
Balance at December 31, 2000 (Successor
  note 2)..............................   18,948        1       332,579       (37,182)       (79,640)    215,758
  Net loss.............................       --       --            --            --        (51,976)    (51,976)
  Cumulative Translation Adjustment....       --       --            --        15,950             --      15,950
  Capital Contribution.................       --       --        41,205            --             --      41,205
  Accretion of redeemable preferred
    stock (note 12)....................       --       --        (4,663)           --             --      (4,663)
  Accrued dividend on Mandatorily
    Redeemable Debenture Stock.........       --       --       (15,657)           --             --     (15,657)
                                          ------      ---      --------      --------      ---------    --------
Balance at December 31, 2001 (Successor
  note 2)..............................   18,948      $ 1      $353,464      $(21,232)     $(131,616)   $200,617
                                          ======      ===      ========      ========      =========    ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       33
<Page>
                          POLAND COMMUNICATIONS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                   SUCCESSOR (NOTE 2)                PREDECESSOR (NOTE 2)
                                                       -------------------------------------------   --------------------
                                                                                      PERIOD FROM        PERIOD FROM
                                                                                       AUGUST 6,          JANUARY 1,
                                                        YEAR ENDED     YEAR ENDED    1999 THROUGH        1999 THROUGH
                                                       DECEMBER 31,   DECEMBER 31,   DECEMBER 31,         AUGUST 5,
                                                           2001           2000           1999                1999
                                                       ------------   ------------   -------------   --------------------
                                                                                 (IN THOUSANDS)
<S>                                                    <C>            <C>            <C>             <C>
Cash flows from operating activities:
  Net loss...........................................    $(51,976)      $(46,510)      $(33,130)           $(20,672)
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
    Depreciation and amortization....................      54,789         45,784         18,158              13,819
      Amortization of notes payable discount and
        issue cost...................................          --             --            895                  --
      Unrealized foreign exchange (gains)/losses.....      (3,608)          (956)         3,742                  --
      Other..........................................          --            (57)        (2,200)                 --
    Changes in operating assets and liabilities:
      Accounts receivable............................       2,843         (2,607)          (986)             (2,400)
      Other current assets...........................       1,703          1,129         (3,048)              2,138
      Accounts payable...............................      (3,925)         1,929          6,641              (5,566)
      Accrued interest...............................           4            914             --                 767
      Amounts due to parent..........................         922         11,802        (13,998)             21,913
      Amounts due to affiliates......................       5,454             --             --                  --
      Deferred revenue...............................         378          1,422         (1,140)                879
      Other..........................................         313             --         (1,305)                 --
                                                         --------       --------       --------            --------
        Net cash provided/(used) in operating
          activities.................................       6,897         12,850        (26,371)             10,878
                                                         --------       --------       --------            --------
Cash flows from investing activities:
  Construction and purchase of property, plant and
    equipment........................................     (23,433)       (30,451)        (9,084)            (13,025)
  Notes receivable from affiliate....................          --             --             --                 449
  Purchase of intangibles............................      (1,294)        (2,074)          (308)             (1,036)
  Purchase of subsidiaries, net of cash received.....          --             --           (954)             (6,860)
                                                         --------       --------       --------            --------
        Net cash used in investing activities........     (24,727)       (32,525)       (10,346)            (20,472)
                                                         --------       --------       --------            --------
Cash flows from financing activities:
  Proceeds from notes payable........................          --             --             50               7,713
  Repayment of notes payable.........................        (352)        (1,048)      (122,959)               (445)
  Proceeds from issuance of Mandatorily Redeemable
    Debenture stock..................................          --             --        140,000                  --
  Proceeds from Parent...............................      19,742         14,933             --                  --
  Capital contribution...............................          --          3,860         16,907               6,000
                                                         --------       --------       --------            --------
  Net cash provided by financing activities..........      19,390         17,745         33,998              13,268
                                                         --------       --------       --------            --------
  Net increase/(decrease) in cash and cash
    equivalents......................................       1,560         (1,930)        (2,719)              3,674
Effect of exchange rates on cash and cash
  equivalents........................................         208             (2)          (155)                 --
Cash and cash equivalents at beginning of period.....       1,442          3,374          6,248               2,574
                                                         --------       --------       --------            --------
Cash and cash equivalents at end of period...........    $  3,210       $  1,442       $  3,374            $  6,248
                                                         ========       ========       ========            ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       34
<Page>
                          POLAND COMMUNICATIONS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999

1.  REPORTING ENTITY

    Poland Communications, Inc. ("PCI"), is a New York corporation and was
founded in 1990 by David T. Chase, a Polish-born investor. PCI is a wholly-owned
subsidiary of UPC Polska, Inc., formerly @Entertainment, Inc. ("UPC Polska"), a
Delaware corporation which is wholly-owned subsidiary of United Pan-Europe
Communications N.V. ("UPC"). PCI owns 92.3% of the capital stock of Poland
Cablevision (Netherlands) B.V. ("PCBV"), a Netherlands corporation and
first-tier subsidiary of PCI. During 2001, the remaining 7.7% of PCBV stock was
purchased by Wizja TV BV, a wholly-owned subsidiary of UPC Polska. PCI and PCBV
are holding companies that hold controlling interests in a number of Polish
cable television companies, collectively referred to as the "UPC TK Companies".
All significant assets and operating activities of PCI and subsidiaries (the
"Company") are located in Poland.

    The period from January 1, 1999 through August 5, 1999 and the period from
August 6, 1999 through December 31, 1999 are referred to herein as the "seven
months of 1999" and "five months of 1999", respectively.

    The Company offers pay television and internet services to business and
residential customers in Poland. Its revenues are derived primarily from monthly
basic and premium service fees for cable television services.

2.  CONSUMMATION OF UPC TENDER OFFER AND MERGER

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

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

    Also on August 6, 1999, Bison was merged with and into UPC Polska with UPC
Polska continuing as the surviving corporation (the "Merger"). Accordingly, UPC
Polska became a wholly-owned subsidiary of UPC. UnitedGlobalCom, Inc. is the
majority stockholder of UPC. The Company believes that a Change of Control
occurred on August 6, 1999 as a result of the Acquisition and Merger. PCI prior
to the Acquisition, is herein referred to as the "Predecessor" while the Company
after the Acquisition is referred to as the "Successor".

    The Acquisition was accounted for under the purchase method of accounting,
with all of the purchase accounting adjustments "pushed-down" to the
consolidated financial statements of UPC Polska. Accordingly, the purchase price
was allocated to the underlying assets and liabilities based upon their
estimated fair values and any excess to goodwill. UPC Polska restated some of
its assets and liabilities at August 5, 1999. At this date the Notes of UPC
Polska and the Company were restated to reflect the market value and as a result
were increased by $61.9 million, deferred financing costs of

                                       35
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

$16.1 million and deferred revenues of $2.0 million were written down to zero.
The consideration paid by UPC for all shares outstanding, warrants and options
totaled $812.5 million. At this time UPC Polska had negative net assets of
approximately $53.3 million and existing goodwill at net book value of
$37.5 million which was realized on previous transaction. As a result of the
above considerations, UPC realized goodwill of approximately $979.3 million. As
a result of the Acquisition, UPC pushed down its basis to UPC Polska
establishing a new basis of accounting as of the acquisition date. During the
year ended December 31, 2000 this figure increased by $12.3 million to
$991.6 million mainly due to the results of an arbitration settlement between
UPC Polska and Telewizyjna Korporacja Partycypacyjna ("TKP"). As a result of the
Acquisition, UPC Polska pushed down goodwill to its subsidiaries based on the
investment model used for acquisition. The Company was allocated approximately
$417.1 million of goodwill.

3.  GOING CONCERN AND LIQUIDITY RISKS

    These consolidated financial statements have been prepared on a going
concern basis, which contemplates the continuation and expansion of trading
activities as well as the realization of assets and liquidation of liabilities
in the ordinary course of business. Pay television operators typically
experience losses and negative cash flows in their initial years of operation
due to the large capital investment required for the construction or acquisition
of their cable networks and the administrative costs associated with commencing
operations. Consistent with this pattern, the Company has incurred substantial
operating losses since inception.

    The Company relies solely on UPC Polska for its sources of liquidity and
financing. During 2001, UPC Polska reviewed its long term plan for its
operations and identified businesses which require additional financing to
become profitable. UPC Polska also assessed its ability to obtain additional
financing on terms acceptable to it. These reviews proved that today, UPC Polska
could not provide further financing to its D-DTH and programming businesses. As
a result, UPC Polska changed its business strategy and disposed of its D-DTH and
programming businesses and revised its business strategy for cable television
from aggressive growth to focus on achievement of positive cash flow. As a
result, UPC Polska and the Company expect to have positive EBITDA and positive
cash flows in 2002.

    As of December 31, 2001, the Company has negative working capital of $72.4
million and has experienced operating losses of $53.1 million and $44.6 million
during the years ended December 31, 2001 and 2000, respectively. It also has
significant commitments under non-cancelable operating leases and for
programming rights, as well as repayment obligations related to the PCI Notes.
During 2002, the Company will be required to repay the Bank Rozwoju facility of
$0.4 million. In 2003, the Company will also be required to repay approximately
$14.5 million in principal amount under the PCI Notes. It also has
$60.3 million in trade payables due to UPC Polska and affiliates which is
classified as current as of December 31, 2001.

    As of December 31, 2001, UPC Polska has a negative working capital of $382.3
million, stockholder's deficit of $244.1 million and has experienced operating
losses of $185.2 million and $179.0 million during the years ended December 31,
2001 and 2000, respectively. Additionally, UPC Polska has significant funding
obligations during 2002 and 2003, in which it does not have the current cash
available or available borrowing capacity to fund.

    The Company, since its August 6, 1999 Merger, has relied completely on
funding from its shareholder UPC Polska. The Company received funding in the
forms of capital contributions, funding from Parent and Mandatorily Redeemable
Debenture Stock from UPC Polska of $19.7 million, $18.8

                                       36
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

million and $156.9 million for the years ended December 31, 2001 and 2000 and
the 5 months of 1999, respectively. During this same period of time, UPC Polska
has relied completely on funding from its shareholder UPC. As a result of UPC's
decision to not make interest payments on its senior notes and senior discount
notes on February 1, 2002, and its failure to make the interest payment upon the
expiration of the applicable 30-day grace period, these actions constituted
Events of Default pursuant to UPC's senior notes and senior discount notes. The
occurrence of these Events of Default gave the related trustees under the
indebtedness, or requisite number of holders of such notes, the right to
accelerate the maturity of all of UPC's senior notes and senior discount notes
and then to foreclose on the collateral securing these notes. As of the date of
the filing of this Annual Report on Form 10-K, neither any of the trustees for
the respective notes nor the requisite number of holders of those notes have
accelerated the payment of principal and interest under these notes. UPC has
entered into a Memorandum of Understanding which is a non-binding agreement to
enter into negotiations with UnitedGlobalCom, Inc., UPC's parent, to attempt to
reach agreement on a means to restructure UPC's indebtedness. Although the
Company had anticipated being able to rely on UPC Polska, which is relying on
UPC, to meet these and other payment obligations, given UPC's and UPC Polska's
liquidity concerns, the Company is not certain that it will receive the
necessary financing from UPC Polska to continue normal operations. If the
Company is unable to rely on UPC Polska for financial support, it will have to
meet its payment obligations with cash on hand or with funds obtained from
public or private debt or bank financing or any combination thereof, subject to
the restrictions contained in the indentures governing the outstanding senior
indebtedness of the Company, UPC Polska, UPC and UnitedGlobalCom, Inc.

    As of December 31, 2001, a significant amount of UPC Polska's unrestricted
cash has limitations imposed on it by its indentures and notes payable to UPC.
As a result of these limitations and the potential inability of UPC to provide
necessary funding, if required by UPC Polska, UPC Polska has limited sources of
funding available to it outside of its operating cash flows. Additionally, as a
result of material adverse change provisions contained in the debt agreements
between UPC and UPC Polska, the notes payable to UPC of $444.5 million have been
classified as current in the UPC Polska financial statements. In the event UPC
accelerated payment under its notes, UPC Polska would have limited funds or
available borrowings to repay these notes. Additionally, the UPC Polska debt
agreements have various Events of Default, including the acceleration of the
payment of other debt of UPC Polska in excess of $15 million. In the event UPC
Polska's debt were to be accelerated or it were to have an other Event of
Default which were not cured in a timely manner pursuant to the respective
agreements, UPC Polska's Notes of $403.7 million would become due. UPC Polska
has evaluated the likelihood of it experiencing an Event of Default as of the
date of filing this Annual Report on Form 10-K and has determined, based on its
assessment, that it is not "virtually certain" that an Event of Default will
occur. As a result, in December 31, 2001 UPC Polska financial statements, the
amounts related to the UPC Polska Notes have been reflected as long-term. UPC
Polska's available cash on hand will be insufficient to satisfy all of its
obligations, and UPC Polska cannot be certain that it will be able to obtain the
necessary financing at all, or on terms that will be favorable to UPC Polska.

    Moreover, if the Company's plans or assumptions change, if its assumptions
prove inaccurate, if it consummates unanticipated investments in or acquisitions
of other companies, if it experiences unexpected costs or competitive pressures,
or if existing cash, and projected cash flow from operations prove to be
insufficient, the Company may need to obtain greater amounts of additional
financing. While it is the Company's intention to enter only into new financing
or refinancings that it considers advantageous, there can be no assurance that
such sources of financing would be available to the

                                       37
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

Company in the future, or, if available, that they could be obtained on terms
acceptable to the Company.

    Management of the Company believes that significant opportunities exist for
pay television providers capable of delivering high quality, Polish-language
programming on a multi-channel basis and other services on cable (i.e. data and
telephones). As such, the Company's current focus is on its cable television
market. The Company's business strategy is designed to increase its average
revenue per subscriber and also, although to a lesser extent, to increase its
subscriber base. The Company intends to achieve these goals by increasing
penetration of new service products within existing upgraded homes; providing
additional revenue-generating services to existing customers, including Internet
services; developing content tailored to the interests of existing subscribers;
and improving the effectiveness of the Company's sales and marketing efforts.

    The Company also intends to increase the effectiveness of its operations and
reduce its expenses by enhancing internal controls; improving corporate
decision-making processes; reorganizing the Company so as to simplify its legal
structure; and using local rather than expatriate employees in management,
thereby reducing general and administrative costs.

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

4.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

    The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
("U.S. GAAP").

    The Company maintains its books of accounts in Poland, the Netherlands and
in the United States of America in accordance with local accounting standards in
the respective countries. These financial statements include all adjustments to
the Company's statutory books to present these statements in accordance with
U.S. GAAP.

    The consolidated financial statements include the financial statements of
Poland Communications, Inc. and its wholly owned and majority owned
subsidiaries. All significant intercompany balances and transactions have been
eliminated in consolidation.

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of cash and other short-term investments
with original maturities of three months or less.

USE OF ESTIMATES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the

                                       38
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

financial statements and the amounts of revenues and expenses during the
reporting period. Our actual results could differ from those estimates, which
include, but are not limited to: allowance for doubtful accounts, impairment
charges of long lived assets, equity investment and revenue recognition.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

    The allowance for doubtful accounts is based upon the Company's assessment
of probable loss related to overdue accounts receivable. Upon disconnection of
the subscriber, the account is fully reserved. The allowance is maintained on
the books either until receipt of payment, or until the account is deemed
uncollectable for a maximum of three years.

REVENUE RECOGNITION

    Revenue related to the provision of cable television and Internet services
to customers are recognized in the period in which the related services are
provided in accordance with SAB 101 REVENUE RECOGNITION IN FINANCIAL STATEMENTS
and SFAS 51 FINANCIAL REPORTING BY CABLE TELEVISION COMPANIES.

CABLE TELEVISION REVENUE:

    Cable television revenues are recognized in accordance with SFAS 51
FINANCIAL REPORTING BY CABLE TELEVISION COMPANIES. Revenue from subscription
fees is recognized on a monthly basis as the service is provided. Installation
fee revenue, for connection to the Company's cable television system, is
recognized to the extent of direct selling costs and the balance is deferred and
amortized into income over the estimated average period that new subscribers are
expected to remain connected to the systems.

INTERNET SERVICE REVENUES:

    During the fourth quarter of 2000, the Company began providing Internet
services to its cable television customers. Revenue from subscription is
recognized on a monthly basis as the service is provided. Installation fee
revenue is deferred and amortized to income over the estimated average period
that new subscribers are expected to remain connected to the system in
accordance with SAB 101 REVENUE RECOGNITION IN FINANCIAL STATEMENTS.

TAXATION

    Income taxes are accounted for under the asset and liability method in
accordance with SFAS 109, "Accounting for Income Taxes". Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.

    U.S. TAXATION  PCI is subject to U.S. Federal taxation on its worldwide
income. Polish companies that are not engaged in a trade or business within the
U.S. or that do not derive income from U.S. sources are not subject to U.S.
income tax.

                                       39
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    FOREIGN TAXATION  Polish companies are subject to corporate income taxes,
value added tax (VAT) and various local taxes within Poland, as well as import
duties on materials imported by them into Poland.

    Income tax for other foreign companies is calculated in accordance with
Polish tax regulations. Due to differences between accounting practices under
Polish tax regulations and those required by U.S. GAAP, certain income and
expense items are recognized in different periods for financial reporting
purposes and income tax reporting purposes which may result in deferred income
tax assets and liabilities.

    Effective January 1998, the Company adopted EITF 92-8, "Accounting for the
Income Tax Effects under FASB Statement No. 109 of a Change in Functional
Currency When an Economy Ceases to Be Considered Highly Inflationary". As a
result of adopting EITF 92-4, "Accounting for a Change in Functional Currency
When the Economy Ceases to Be Considered Highly Inflationary." the Company's
functional currency bases exceeded the local currency tax bases of non-monetary
items. The difference between the new functional currency and the tax bases have
been recognized as temporary differences in accordance with EITF 92-8.

PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment includes assets used in the development and
operation of the various cable television systems. During the period of
construction, plant costs and a portion of design, development and related
overhead costs are capitalized as a component of the Company's investment in
cable television systems. When material, the Company capitalizes interest costs
incurred during the period of construction in accordance with SFAS No. 34,
"Capitalization of Interest Cost". Interest is not capitalized for short-term
construction projects. During years ended December 31, 2001 and December 31,
2000, and for the five months of 1999 and seven months of 1999, no interest
costs were capitalized.

    Cable subscriber related costs and general and administrative expenses are
charged to operations when incurred.

    Depreciation is computed for financial reporting purposes using the
straight-line method over the following estimated useful lives:

<Table>
<S>                                                           <C>
Cable system assets.........................................  10 years
Set-top boxes...............................................  5 years
Vehicles....................................................  5 years
Other property, plant and equipment.........................  5-10 years
</Table>

INVENTORIES FOR CONSTRUCTION

    Inventories for construction are stated at the lower of cost, determined by
the average cost method, or net realizable value. Inventories are principally
related to cable systems. Cost of inventory includes purchase price,
transportation, customs and other direct costs.

GOODWILL AND OTHER INTANGIBLES

    Prior to the Merger, goodwill, which represents the excess of purchase price
over fair value of net assets acquired, was amortized on a straight-line basis
over the expected periods to be benefited,

                                       40
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

generally ten years, with the exception of amounts paid relating to non-compete
agreements. The portion of the purchase price relating to non-compete agreements
was amortized over the term of the underlying agreements, generally five years.

    Effective as of the Merger Date, August 6, 1999, the Company revalued all
its previously existing goodwill, including amounts related to non-compete
agreements, that related to transactions completed prior to the Merger. The
goodwill, that was pushed down to the Company is amortized using straight-line
basis over the expected periods to be benefited, which is fifteen years.

    Through its subsidiaries, the Company has entered into lease agreements with
the Polish national telephone company ("TPSA"), for the use of underground
telephone conduits for cable wiring. Costs related to obtaining conduit and
franchise agreements with housing cooperatives and governmental authorities are
capitalized generally over a period of ten years. In the event the Company does
not proceed to develop cable systems within designated cities, costs previously
capitalized will be charged to expense.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations,"
("SFAS 141"), which is required to be adopted July 1, 2001. SFAS 141 requires
the purchase method of accounting for all business combinations initiated after
June 30, 2001. The Company has applied SFAS 141 to its only applicable
transaction, the purchase of the minority interest in PCBV in August 28, 2001.

DEFERRED FINANCING COSTS

    Costs incurred to obtain financing have been deferred and amortized as
interest expense over the life of the loan using the effective interest method.
Such costs were included at the Merger as part of the purchase accounting
adjustment in 1999.

INVESTMENT IN AND ADVANCES TO AFFILIATED COMPANIES, ACCOUNTED FOR UNDER THE
  EQUITY METHOD

    For those investments in companies in which the Company's ownership interest
is 20% to 50%, its 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, or
in which majority control is deemed to be temporary, 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 affiliates, limited to the extent of the Company's investment
in and advances to the affiliates, including any debt guarantees or other
contractual 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 or
the excess of its proportionate interest in each affiliate's net tangible assets
in excess of its cost.

STOCK-BASED COMPENSATION

    The Company has adopted SFAS No. 123, "ACCOUNTING FOR STOCK-BASED
COMPENSATION", which gives companies the option to adopt the fair value based
method for expense recognition of employee stock options and other stock-based
awards or to account for such items using the intrinsic value method as outlined
under APB Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES", with pro
forma disclosure of net loss and loss per share as if the fair value method had
been applied. The

                                       41
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

Company has elected to apply APB Opinion No. 25 and related interpretations for
stock options and other stock-based awards.

FOREIGN CURRENCIES

    Foreign currency transactions are recorded at the exchange rate prevailing
at the date of the transactions. Assets and liabilities denominated in foreign
currencies are translated at the rates of exchange at balance sheet date. Gains
and losses on foreign currency transactions are included in the consolidated
statement of operations.

    The financial statements of foreign subsidiaries are translated into U.S.
dollars using (i) exchange rates in effect at period end for assets and
liabilities, and (ii) average exchange rates during the period for results of
operations. Adjustments resulting from translation of financial statements are
reflected in accumulated other comprehensive income/(loss) as a separate
component of stockholder's equity. The Company considers all of its intercompany
loans to its Polish subsidiaries to be of a long-term investment nature. As a
result, any foreign exchange gains or losses resulting from the intercompany
loans are reported in accumulated other comprehensive loss.

    Effective January 1, 1998, Poland is no longer deemed to be a highly
inflationary economy. In accordance with this change, the Company established a
new functional currency bases for nonmonetary items of its Polish subsidiaries
in accordance with guidelines established within EITF Issue 92-4, "ACCOUNTING
FOR A CHANGE IN FUNCTIONAL CURRENCY WHEN AN ECONOMY CEASES TO BE CONSIDERED
HIGHLY INFLATIONARY." That basis is computed by translating the historical
reporting currency amounts of non-monetary items into the local currency at
current exchange rates. As a result of this change, the Company's functional
currency bases exceeded the local currency tax bases of non-monetary items. The
difference between the new functional currency and the tax bases have been
recognized as temporary differences.

    Prior to January 1, 1998 the financial statements of foreign subsidiaries
were translated into U.S. dollars using (i) exchange rates in effect at period
end for monetary assets and liabilities, (ii) exchange rates in effect at
transaction dates (historical rates) for non-monetary assets and liabilities,
and (iii) average exchange rates during the period for revenues and expenses,
other than those revenues and expenses that relate to non-monetary assets and
liabilities (primarily amortization of fixed assets and intangibles) which are
translated using the historical exchange rates applicable to those non-monetary
assets and liabilities. Adjustments resulting from translation of financial
statements prior to the year 1998 were reflected as foreign exchange gains or
losses in the consolidated statements of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    SFAS No. 107, "DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS"
requires the Company to make disclosures of fair value information of all
financial instruments, whether or not recognized on the consolidated balance
sheets, for which it is practicable to estimate fair value.

    The Company's financial instruments include cash and cash equivalents,
accounts receivable, accounts payable, redeemable preferred stock, mandatorily
redeemable debenture stock and accrued expenses and notes payable.

                                       42
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    At December 31, 2001 and 2000, the carrying value of cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses, and
other current liabilities on the accompanying consolidated balance sheets
approximates fair value due to the short maturity of these instruments.

    At December 31, 2001 and 2000, the carrying value of the redeemable
preferred stock has been determined based upon the amount of future cash flows
discounted using the Company's estimated borrowing rate for similar instruments.
It was not practicable to estimate the fair value of the redeemable preferred
stock due to the fact that the instruments are wholly owned by the Company's
parent.

    At December 31, 2001 and 2000, the fair value of the Company's notes payable
balance approximated $14,916,000 and $13,737,000, respectively based on the last
trading price of the notes in 2001 and 2000. It was not practical to estimate
the fair value due to affiliate and notes receivable from affiliates due to the
nature of these instruments, the circumstances surrounding their issuance, and
the absence of quoted market prices for similar financial instruments. At the
date of the Merger, the PCI Notes were restated to their fair market value at
this date. The resulting $1.6 million increase was recorded in the pushed-down
purchased accounting entries.

IMPAIRMENT OF LONG-LIVED ASSETS

    The Company assesses the recoverability of long-lived assets (mainly
property, plant and equipment, intangibles, and certain other assets) by
determining whether the carrying value of the assets can be recovered over the
remaining lives through projected undiscounted future operating cash flows,
expected to be generated by such assets. If an impairment in value is estimated
to have occurred, the assets carrying value is reduced to its estimated fair
value. The assessment of the recoverability of long-lived assets will be
impacted if estimated future operating cash flows are not achieved. As
identified in Note 3, the Company's existing liquidity problems may result in
future impairments of long-lived assets if the Company does not have adequate
financing available to execute its business strategy. Additionally, if the
Company's plans or assumptions change, if its assumptions prove inaccurate, if
it consummates unanticipated investments in or acquisitions of other companies,
if it experiences unexpected costs or competitive pressures, or if existing
cash, and projected cash flow from operations prove to be insufficient, the
Company may need to impair certain of its long-lived assets. In connection with
its adoption of the New Accounting Principle, SFAS 144 discussed under "New
Accounting Principles", the Company is aware that the adoption could result in
material adjustments to its long-lived assets and its Statement of Operations
during 2002.

BUSINESS SEGMENT INFORMATION

    The Company operates in one business segment, providing cable television and
Internet services.

ADVERTISING COSTS

    All advertising costs of the Company are expensed as incurred. For the years
ended December 31, 2001 and 2000 and for the five months and seven months of
1999, the Company incurred advertising costs of approximately $1,507,000,
$2,016,000, $584,000 and $267,000, respectively.

                                       43
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

SUPPLEMENTED DISCLOSURE OF CASH FLOW INFORMATION

<Table>
<Caption>
                                                           SUCCESSOR                          PREDECESSOR
                                       --------------------------------------------------   ---------------
                                                                          PERIOD FROM         PERIOD FROM
                                        YEAR ENDED      YEAR ENDED         AUGUST 6,          JANUARY 1,
                                       DECEMBER 31,    DECEMBER 31,       1999 THROUGH       1999 THROUGH
                                           2001            2000        DECEMBER 31, 1999    AUGUST 5, 1999
                                       -------------   -------------   ------------------   ---------------
                                                                  (IN THOUSANDS)
<S>                                    <C>             <C>             <C>                  <C>
Supplemental cash flow information:
  Cash paid for interest.............     $1,483          $1,577             $6,270             $7,304
  Cash paid for income taxes.........        120             102                 37                 47
Non cash items:
  Increase in paid in capital for
    purchase of PCBV minority
    shares...........................     23,425              --                 --                 --
  Conversion of other long term
    payables to UPC Polska to paid in
    capital..........................     17,780              --                 --                 --
</Table>

RECLASSIFICATIONS

    Certain amounts have been reclassified in the prior years consolidated
financial statements to conform to the presentation contained in the 2001
periods.

NEW ACCOUNTING PRINCIPLES

ADOPTED

    Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (SFAS) No.133, "Accounting for Derivative and Hedging
Activities", which establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. All derivatives, whether designated in
hedging relationships or not, are required to be recorded on the balance sheet
at fair value. The adoption of SFAS 133 did not have a material impact on the
Company's financial position, as it does not have any derivative instruments.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations,"
("SFAS 141"), which is required to be adopted July 1, 2001. SFAS 141 requires
the purchase method of accounting for all business combinations initiated after
June 30, 2001. The Company has applied SFAS 141 to its only applicable
transaction, the purchase of the minority interest in PCBV in August 28, 2001.

TO BE ADOPTED

    In July 2001, the Financial Accounting Standards Board issued SFAS No. 142,
"Goodwill and Other Intangible Assets", ("SFAS 142"), which requires goodwill
and intangible assets with indefinite useful lives to no longer be amortized,
but to be tested for impairment at least annually. Intangible assets that have
finite lives will continue to be amortized over their estimated useful lives.
The amortization and non-amortization provisions of SFAS 142 will be applied to
all goodwill and intangible assets acquired after June 30, 2001. Effective
January 1, 2002, we are required to apply all other

                                       44
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

provisions of SFAS 142. We are currently evaluating the potential impact, if
any, the adoption of SFAS 142 will have on our financial position and results of
operations.

    In August 2001, the Financial Accounting Standards Board issued SFAS
No. 143, "Accounting for Asset Retirement Obligations", ("SFAS 143"). This
statement addresses the financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. SFAS No. 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset and reported as a liability. This statement is effective for
fiscal years beginning after June 15, 2002. The adoption of SFAS No. 143 is not
anticipated to have a material impact on our financial position or results of
operations.

    In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets",
("SFAS 144"), which is effective for fiscal periods beginning after
December 15, 2001 and interim periods within those fiscal years. SFAS 144
establishes an accounting model for impairment or disposal of long-lived assets
to be disposed. We are currently evaluating the potential impact, if any, the
adoption of SFAS 144 will have on our financial position and results of
operation. We expect that we will have our SFAS 144 evaluation completed during
the fourth quarter of 2002. At this point, management is aware that the adoption
of SFAS 144 could result in material adjustments to its long-lived assets and
its statement of operations during 2002. See notes 7 and 8 for further
discussion of the Company's long-lived assets which total $508.9 million,
including intangible assets of $370.6 million, which could be impacted as a
result of the adoption of SFAS 144.

5.  VALUATION AND QUALIFYING ACCOUNTS

<Table>
<Caption>
                                                              BALANCE AT THE   ADDITIONS      AMOUNTS     BALANCE AT
                                                               BEGINNING OF    CHARGED TO     WRITTEN      THE END
                                                                  PERIOD        EXPENSE         OFF       OF PERIOD
                                                              --------------   ----------   -----------   ----------
                                                                                  (IN THOUSANDS)
<S>                   <C>                                     <C>              <C>          <C>           <C>
SEVEN MONTHS OF 1999  Allowance for Doubtful Accounts.......      $1,095         $  740       $  223        $1,612
FIVE MONTHS OF 1999   Allowance for Doubtful Accounts.......      $1,612         $1,660       $  853        $2,419
      2000            Allowance for Doubtful Accounts.......      $2,419         $3,269       $  751        $4,937
      2001            Allowance for Doubtful Accounts.......      $4,937         $3,698       $5,870        $2,765
</Table>

6.  ACQUISITIONS

    On August 28, 2001 and on June 2, 2000, a subsidiary of the Company,
acquired 6.3% and 1.4% of the outstanding capital stock of PCBV from minority
shareholders of PCBV. The Company paid $21.2 million and $2.2 million,
respectively, and has considered these amounts as additional goodwill. UPC
Polska and its affiliate issued debt of $17.0 million in partial payment for the
August 28, 2001 acquisition. These amounts have been reflected as additional
capital contribution in the accompanying financial statements.

    During 1999 and 1998, the Company made several acquisitions details of which
follow. In each case, the acquisition was accounted for using the purchase
method, whereby the purchase price was allocated to the underlying assets and
liabilities based on their proportionate share of fair values on the date of
acquisition and any excess to goodwill. The results of operations of each of the
business acquired are included in the Company's consolidated financial
statements since the date of acquisition.

                                       45
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

In each case the goodwill life was 10 years. However, as discussed in Note 4,
the revalued goodwill resulting from the Merger is being amortized over
15 years.

    On March 31, 1999, a subsidiary of the Company purchased certain cable
system assets for an aggregate consideration of approximately $509,000. The
acquisition was accounted for using the purchase method, whereby the purchase
price was allocated among the fixed assets acquired based on their fair value on
the date of acquisition and any excess to goodwill. The purchase price exceeded
fair value of the assets acquired by approximately $108,000.

    On July 9, 1999, the Company entered into an agreement to acquire 100% of a
cable system assets for total consideration of approximately $7,500,000. The
acquisition has been accounted for under the purchase method where the purchase
price was allocated to the underlying assets and liabilities based upon their
estimated fair values and any excess to goodwill. The acquisition did not have a
material effect on the Company's results of operations in 1999. The purchase
price exceeded fair value of the assets acquired by approximately $5,336,000.

    On July 26, 1999, the Company entered into an agreement to purchase all of
the assets and subscriber lists of a cable television system for total
consideration of approximately $2,800,000. The purchase was accounted for under
the purchase method where the purchase price was allocated to the underlying
assets based upon their estimated fair values and the excess to goodwill. The
purchase price did not materially exceeded the value of the assets acquired.

    Had these acquisitions occurred at the beginning of the period, the
Company's pro-forma consolidated results for the year ended December 31, 1999
would not be materially different from that presented in the Consolidated
Statements of Operations.

7.  PROPERTY, PLANT AND EQUIPMENT

<Table>
<Caption>
                                                               SUCCESSOR
                                                      ---------------------------
                                                      DECEMBER 31,   DECEMBER 31,
                                                          2001           2000
                                                      ------------   ------------
                                                            (IN THOUSANDS)
<S>                                                   <C>            <C>
Property, plant and equipment:
  Cable system assets...............................    $166,955       $151,417
  Construction in progress..........................         783          6,179
  Vehicles..........................................       1,612            707
  Office, furniture and equipment...................      11,431         10,380
  Other.............................................      12,146          1,729
                                                        --------       --------
                                                         192,927        170,412
Less accumulated depreciation.......................     (54,059)       (28,147)
                                                        --------       --------
  Net property, plant and equipment.................    $138,868       $142,265
                                                        ========       ========
</Table>

    The Company incurred depreciation charges for tangible fixed assets of
$25,424,000, $20,129,000, $7,211,000 and $10,192,000 for year ended
December 31, 2001, 2000, and five months of 1999 and seven months of 1999,
respectively.

                                       46
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

8.  INTANGIBLE ASSETS

    Intangible assets consist of the following:

<Table>
<Caption>
                                                               SUCCESSOR
                                                      ---------------------------
                                                      DECEMBER 31,   DECEMBER 31,
                                                          2001           2000
                                                      ------------   ------------
                                                            (IN THOUSANDS)
<S>                                                   <C>            <C>
Conduit, franchise agreements and other.............    $  8,928       $  7,323
Goodwill............................................     430,714        390,398
                                                        --------       --------
                                                         439,642        397,721
Less accumulated amortization.......................     (69,580)       (38,153)
                                                        --------       --------
Net intangible assets...............................    $370,062       $359,568
                                                        ========       ========
</Table>

    The Acquisition was accounted for under the purchase method of accounting,
with all of the purchase accounting adjustments "pushed-down" to the
consolidated financial statements of UPC Polska.

    Accordingly, the purchase price was allocated to the underlying assets and
liabilities based upon their estimated fair values and any excess to goodwill.
UPC Polska restated some of its assets and liabilities at August 5, 1999. At
this date the notes of UPC Polska and the Company were restated by $61.9 million
and deferred financing costs of $16.1 million and deferred revenues of
$2.0 million were written down to zero. The consideration paid by UPC for all
shares outstanding, warrants and options totaled $812.5 million. At this time
UPC Polska had negative net assets of approximately $53.3 million and existing
goodwill at net book value of $37.5 million which was realized on previous
transaction.

    As a result of the above considerations, UPC realized goodwill of
approximately $979.3 million for the year ended December 31, 1999. As a result
of the Acquisition, UPC pushed down its basis to UPC Polska establishing a new
basis of accounting as of the acquisition date. During the year ended
December 31, 2000 this figure increased by $12.3 million to $991.6 million
mainly due to the results of an arbitration between UPC Polska and Telewizyjna
Korporacja Partycypacyjna ("TKP"). UPC Polska allocated goodwill between the
business segments based on the investment model used for acquisition. The
Company was allocated approximately $417.2 million of goodwill. The Company
incurred amortization charges for intangible assets of $29,365,000, $25,655,000,
$10,947,000 and $3,627,000 for the years ended December 31, 2001 and 2000, and
the five and seven months of 1999, respectively.

                                       47
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

9.  INCOME TAXES

    Income tax expense consists of:

<Table>
<Caption>
                                                      CURRENT    DEFERRED    TOTAL
                                                      --------   --------   --------
                                                              (IN THOUSANDS)
<S>                                                   <C>        <C>        <C>
Year ended December 31, 2001:
  U.S. Federal......................................   $  --       $--       $  --
  State and local...................................      --        --          --
  Foreign...........................................    (254)       --        (254)
                                                       -----       ---       -----
                                                       $(254)      $--       $(254)
                                                       =====       ===       =====
Year ended December 31, 2000:
  U.S. Federal......................................   $  --       $--       $  --
  State and local...................................      --        --          --
  Foreign...........................................    (102)       --        (102)
                                                       -----       ---       -----
                                                       $(102)      $--       $(102)
                                                       =====       ===       =====
Five months of 1999
  U.S. Federal......................................   $  --       $--       $  --
  State and local...................................      --        --          --
  Foreign...........................................     (11)       --         (11)
                                                       -----       ---       -----
                                                       $ (11)      $--       $ (11)
                                                       =====       ===       =====
Seven months of 1999
  U.S. Federal......................................   $  --       $--       $  --
  State and local...................................      --        --          --
  Foreign...........................................     (30)       --         (30)
                                                       -----       ---       -----
                                                         (30)       --         (30)
                                                       =====       ===       =====
</Table>

                                       48
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    Sources of loss before income taxes are as follows:

<Table>
<Caption>
                                                            SUCCESSOR                       PREDECESSOR
                                           --------------------------------------------   ---------------
                                            YEAR ENDED     YEAR ENDED
                                           DECEMBER 31,   DECEMBER 31,   FIVE MONTHS OF   SEVEN MONTHS OF
                                               2001           2000            1999             1999
                                           ------------   ------------   --------------   ---------------
                                                                   (IN THOUSANDS)
<S>                                        <C>            <C>            <C>              <C>
Domestic gain/(loss).....................    $ 17,248       $  9,913        $ (3,318)        $ (3,895)
Foreign loss.............................     (68,970)       (56,321)        (29,801)         (16,747)
                                             --------       --------        --------         --------
                                             $(51,722)      $(46,408)       $(33,119)        $(20,642)
                                             ========       ========        ========         ========
</Table>

    Income tax expense was $(254,000), $(102,000), $(11,000) and $(30,000) for
the years ended December 31, 2001 and 2000, and for the five months of 1999 and
seven months of 1999, respectively, and differed from the amounts computed by
applying the U.S. federal income tax rate of 34 percent to pretax loss as a
result of the following:

<Table>
<Caption>
                                                            SUCCESSOR                       PREDECESSOR
                                           --------------------------------------------   ---------------
                                            YEAR ENDED     YEAR ENDED
                                           DECEMBER 31,   DECEMBER 31,   FIVE MONTHS OF   SEVEN MONTHS OF
                                               2001           2000            1999             1999
                                           ------------   ------------   --------------   ---------------
                                                                   (IN THOUSANDS)
<S>                                        <C>            <C>            <C>              <C>
Computed "expected" tax benefit..........     $17,585        $15,779        $11,260           $ 7,018
Non-deductible expenses..................      (9,805)        (7,445)        (2,326)           (1,473)
Change in valuation allowance............      (5,627)         8,895         (6,263)           (3,903)
Adjustment to deferred tax asset for
  enacted changes in tax rates...........         (52)        (7,980)        (2,682)           (1,672)
Foreign tax rate differences.............      (3,103)        (2,324)            --                --
Expiration of NOL's......................          --         (4,988)            --                --
Other....................................         748         (2,039)            --                --
                                              -------        -------        -------           -------
                                              $  (254)       $  (102)       $   (11)          $   (30)
                                              =======        =======        =======           =======
</Table>

    The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities are presented below:

<Table>
<Caption>
                                                               DECEMBER 31,
                                                            -------------------
                                                              2001       2000
                                                            --------   --------
                                                              (IN THOUSANDS)
<S>                                                         <C>        <C>
Deferred tax assets/(liabilities):
  Foreign net operating loss carry forward................  $22,286    $20,391
  Accrued liabilities.....................................    6,286      5,454
  Bad debt................................................    2,209      1,086
  Unrealized foreign exchange losses......................    2,892      2,758
  Other...................................................   (5,059)    (6,702)
                                                            -------    -------
Total gross deferred tax assets...........................   28,614     22,987
Less valuation allowance..................................  (28,614)   (22,987)
                                                            -------    -------
Net deferred tax assets...................................  $    --    $    --
                                                            =======    =======
</Table>

                                       49
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    The net increase/(decrease) in the valuation allowance for the years ended
December 31, 2001 and 2000 and for the five and seven months of 1999 was
$5,627,000, $(8,895,000), $6,263,000 and $3,903,000, respectively. In assessing
the realiability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers projected future taxable
income and tax planning strategies in making this assessment. Based upon the
level of historical taxable income and projections for future taxable income
over the periods which the deferred tax assets are deductible, management
believes it is more likely than not the Company will realize the benefits of
these deductible differences, net of the existing valuation allowances at
December 31, 2001.

    As each of the Polish subsidiaries and Netherland subsidiary of the Company
are not subject to group taxation, the deferred tax assets and liabilities in
the individual companies must be evaluated on a stand-alone basis. The reported
foreign net operating losses are presented on an aggregate basis and are not
necessarily indicative of the actual losses available to the individual
companies. As a result, some of the foreign entities may have no losses or other
deferred tax assets available to them individually.

    Subsequently recognized tax benefits relating to the valuation allowance for
deferred tax assets as of December 31, 2001 will be reported in the consolidated
statement of operations.

    Prior to 1999, foreign tax loss carryforwards can be offset against the UPC
TK Companies' taxable income and utilized at a rate of one-third per year in
each of the three years subsequent to the year of the loss. If there is no
taxable income in a given year during the carryforward period, the portion of
the loss carryforward to be utilized is permanently forfeited. Starting from
1999 foreign loss carryforwards can be offset against UPC TK Companies' taxable
income and utilized during each of the five years subsequent to the year of the
loss with no more than 50% of the loss in one given year. If there is no taxable
income in a given year during the carryforward period, the portion of the loss
carryforward to be utilized is permanently forfeited. For losses incurred in the
U.S. taxable years prior to 1998, loss carryforwards can be applied against
taxable income three years retroactively and fifteen years into the future. For
losses incurred in the U.S. from 1998, loss carry forwards can be applied
against taxable income two years retroactively and twenty years into the future.

    At December 31, 2001, the Company has foreign net operating loss
carryforwards of approximately $97,520,000, which expire as follows:

<Table>
<Caption>
YEAR ENDED DECEMBER 31,                                       (IN THOUSAND)
-----------------------                                       -------------
<S>                                                           <C>
2002........................................................     $ 3,784
2003........................................................      13,449
2004........................................................      42,560
2005........................................................      29,111
2006........................................................       8,616
                                                                 -------
                                                                 $97,520
                                                                 =======
</Table>

                                       50
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

10. NOTES PAYABLE

    Notes payable consist of the following:

<Table>
<Caption>
                                                               DECEMBER 31,
                                                            -------------------
                                                              2001       2000
                                                            --------   --------
                                                              (IN THOUSANDS)
<S>                                                         <C>        <C>
PCI Notes, net of discount................................  $14,509    $14,509
Bank Rozwoju Exportu S.A. Deutsche-Mark facilities........      407        835
                                                            -------    -------
Total Notes...............................................  $14,916    $15,344
Less Current portion:.....................................     (407)        --
                                                            -------    -------
Long Term Notes Payable...................................  $14,509    $15,344
                                                            =======    =======
</Table>

PCI NOTES

    On October 31, 1996, PCI sold $130,000,000 aggregate principal amount of
Senior Notes ("PCI Notes") to an initial purchaser pursuant to a purchase
agreement. The initial purchaser subsequently completed a private placement of
the PCI Notes. In June 1997, substantially all of the outstanding PCI Notes were
exchanged for an equal aggregate principal amount of publicly-registered PCI
Notes.

    The PCI Notes have an interest rate of 9 7/8% and a maturity date of
November 1, 2003. Interest is paid on the PCI Notes on May 1 and November 1 of
each year. As of December 31, 2001 and 2000 the Company accrued interest expense
of $240,000 and $236,000, respectively. Prior to November 1, 1999, PCI could
have redeemed up to a maximum of 33% of the initially outstanding aggregate
principal amount of the PCI Notes with some or all of the net proceeds of one or
more public equity offerings at a redemption price equal to 109.875% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of redemption; provided that immediately after giving effect to such redemption,
at least $87 million aggregate principal amount of the PCI Notes remains
outstanding.

    PCI has pledged to State Street Bank and Trust Company, the trustee for the
PCI Notes (for the benefit of the holders of the PCI Notes) intercompany notes
issued by PCBV, of a minimum aggregate principal amount (together with cash and
cash equivalents of PCI), equal to at least 110% of the outstanding principal
amount of the PCI Notes, and that, in the aggregate, provide cash collateral or
bear interest and provide for principal repayments, as the case may be, in
amounts sufficient to pay interest on the PCI Notes. Notes payable from PCBV to
PCI were $249,765,000 and $210,530,000 at December 31, 2001 and 2000,
respectively.

    Pursuant to the PCI Indenture, PCI is subject to certain restrictions and
covenants, including, without limitation, covenants with respect to the
following matters: (i) limitation on additional indebtedness; (ii) limitation on
restricted payments; (iii) limitation on issuances and sales of capital stock of
restricted subsidiaries; (iv) limitation on transactions with affiliates;
(v) limitation on liens; (vi) limitation on guarantees of indebtedness by
subsidiaries; (vii) purchase of PCI Notes upon a change of control;
(viii) limitation on sale of assets; (ix) limitation on dividends and other
payment restrictions affecting subsidiaries; (x) limitation on investments in
unrestricted subsidiaries; (xi) consolidations, mergers and sale of assets;
(xii) limitation on lines of business; and (xiii) provision of financial
statements and reports. As of December 31, 2001, the Company was in compliance
with such covenants. However, there is a risk that the Company could experience
an Event of Default in the event that UPC Polska accelerates the payment of its
notes receivable ($9.7 million as of December 31,

                                       51
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

2001). As this risk has been assessed by the Company and the Company has
determined it is not "Virtually Certain", the Company continues to reflect the
PCI Notes as long-term.

    Pursuant to the terms of the indentures covering each of the UPC Polska's
Notes and the PCI Notes (as defined hereinafter), which provided that, following
a Change of Control (as defined therein), each holder of UPC Polska's Notes and
PCI Notes had the right, at such holder's option, to require the Company and
PCI, respectively to offer to repurchase all or a portion of such holder's UPC
Polska Notes and PCI Notes at the Repurchase Price. UPC Polska and PCI made
offers to repurchase (the "Offers") from the holders of the Notes UPC Polska's
14 1/2% Series B Senior Discount Notes due 2008, 14 1/2% Senior Discount Notes
due 2008, Series C Senior Discount Notes due 2008, 14 1/2% Series B Senior
Discount Notes due 2009, and 14 1/2% Senior Discount Notes due 2009
(collectively, the "UPC Polska Notes") and PCI's 9 7/8% Series B Senior Notes
Due 2003 and 9 7/8% Senior Notes Due 2003 (collectively, the "PCI Notes"). The
Offers expired at 12:01 PM, New York City time, on November 2, 1999.

    PCI was required to offer to repurchase the PCI Notes at their purchase
price of $1,010 per $1,000 principal amount of the PCI Notes, which is 101% per
$1,000 principal amount of the PCI. As of August 5, 1999, PCI had $130,000,000
aggregate principal amount at maturity of PCI Notes outstanding. Pursuant to its
repurchase offer, PCI has purchased $113,237,000 aggregate principal amount of
PCI Notes for an aggregate price of $114,369,370. In December 1999 and
March 2000, PCI repurchased an additional $2,000,000 and $390,000, respectively,
aggregate principal amount of PCI Notes for an aggregate price of $2,040,024 and
$402,944, respectively. PCI's repurchases were funded by the sale of 14,000
shares of PCI's Mandatorily Redeemable Debenture Stock to the UPC Polska for
$140 million. To secure its obligations under the Debenture Stock, PCI will
pledge to the UPC Polska notes issued by its subsidiary PCBV with an aggregate
principal amount of $176,815,000. The PCI Noteholders will be equally and
ratably secured by the pledge in accordance with the terms of the PCI Indenture.

BANK ROZWOJU EKSPORTU S.A. DEUTCHE-MARK FACILITY

    The Deutsche Mark credit of DEM 1,101,750 was revalued to Euros as of
September 30, 2001 at the exchange rate of 0.5113 of Euro to DEM. This credit
bears interest at LIBOR plus 2.0% (5.33% as at December 31, 2001) and is
repayable in full on December 27, 2002, and is ultimately secured by a pledge of
the common shares of one of the Company's subsidiaries.

    Interest expense relating to notes payable was in the aggregate
approximately $2,398,000 for the year ended December 31, 2001, $2,458,000 for
the year ended December 31, 2000 and $4,253,000 for five months of 1999,
$8,578,000 for seven months of 1999, respectively.

                                       52
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

FAIR VALUE OF FINANCIAL INSTRUMENTS AND MATURITY AMOUNTS

    Fair value is based on market prices for the same or similar issues.
Carrying value is used when a market price is unavailable.

<Table>
<Caption>
                                                                                              EXPECTED
                                                                                              REPAYMENT
                                                                                                AS OF
                                                                 AMOUNT OUTSTANDING         DECEMBER 31,
                                                              AS OF DECEMBER 31, 2001           2001
                                                              ------------------------   -------------------
                                                                           FAIR MARKET
                                                              BOOK VALUE      VALUE        2002       2003
                                                              ----------   -----------   --------   --------
                                                                              (IN THOUSANDS)
<S>                                                           <C>          <C>           <C>        <C>
PCI Notes, net of discount..................................   $14,509       $14,509       $ --     $14,509
Bank Rozwoju Exportu S.A. Deutsche -- Mark facility.........       407           407        407          --
                                                               -------       -------       ----     -------
  Total.....................................................   $14,916       $14,916       $407     $14,509
                                                               =======       =======       ====     =======
</Table>

11. PER SHARE INFORMATION

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

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

<Table>
<Caption>
                                                    SUCCESSOR                       PREDECESSOR
                                -------------------------------------------------   ------------
                                   YEAR ENDED         YEAR ENDED
                                  DECEMBER 31,       DECEMBER 31,     FIVE MONTHS   SEVEN MONTHS
                                      2001               2000           OF 1999       OF 1999
                                ----------------   ----------------   -----------   ------------
<S>                             <C>                <C>                <C>           <C>
Net loss applicable to holders
  of common stock (in
  thousands)..................     $  (72,296)        $  (64,906)     $  (37,374)    $  (22,479)
                                   ----------         ----------      ----------     ----------
Weighted average number of
  common shares outstanding...         18,948             18,948          18,948         18,948
                                   ----------         ----------      ----------     ----------
Basic weighted average number
  of common shares
  outstanding.................         18,948             18,948          18,948         18,948
                                   ==========         ==========      ==========     ==========
Basic net loss per common
  share.......................     $(3,815.50)        $(3,425.48)     $(1,972.45)    $(1,186.35)
                                   ==========         ==========      ==========     ==========
</Table>

                                       53
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

12. REDEEMABLE PREFERRED STOCK

    The series A and series C preferred stock have a mandatory redemption date
of October 31, 2004. At the option of the Company, the series A, series B and
series C preferred stock may be redeemed at any time in whole or in part. The
redemption price per share of the series A and series C preferred stock is
$10,000.

    The preferred stock has been recorded at its mandatory redemption value on
October 31, 2004 discounted at 12% to December 31, 1998. The Company
periodically accretes from paid-in capital an amount that will provide for the
redemption value at October 31, 2004. On August 6, 1999, the Company's parent,
UPC Polska, Inc., consented to the cancellation of its 2,500 Series B redeemable
preference shares. The accreted value of those shares at that time,
approximately $12,278,000 was reclassified to paid-in capital. The total amount
recorded for accretion for the years ended December 31, 2001 and 2000, and for
the five months of 1999 and the seven months of 1999 was $4,663,000, $4,163,000,
$1,911,000 and $1,807,000, respectively.

13. RELATED PARTY TRANSACTIONS

    During the ordinary course of business, the Company enters into transactions
with related parties. The principal related party transactions are described
below.

DUE TO UPC POLSKA AND AFFILIATES

    Amounts due to parent represent advances and payments made on behalf of the
PCI by its parent UPC Polska.

NOTES PAYABLE AND ACCRUED INTEREST TO UPC POLSKA

    As of December 31, 2001 and 2000, the Company had a loan payable to UPC
Polska of approximately $9,706,000 and $8,739,000, respectively. The amounts
include accrued interest of approximately $2,107,000 and $1,184,000 as of the
year ended December 31, 2001 and 2000, respectively.

PRINT MEDIA SERVICES

    An affiliate of the Company's parent provided print media services to the
Company. The Company incurred operating costs related to those services of $0,
$2,523,000, $0 and $296,000, for the years ended December 31, 2001 and 2000, and
for the five months of 1999 and seven months of 1999, respectively. The Company
resigned from print media services as of December 2000. Included in accounts
payable at December 31, 2001 and 2000 is $0 and $55,000 respectively due to this
affiliate.

PROGRAMMING

    Affiliates of the Company provide programming to PCI and its subsidiaries.
The Company incurred programming fees from these affiliates of $24,906,000,
$24,410,000, $9,931,000 and $13,337,000 for the years ended December 31, 2001
and 2000, and for the five months of 1999 and seven months of 1999,
respectively.

                                       54
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

MANDATORILY REDEEMABLE DEBENTURE STOCK

    To fund the repurchase of the PCI Notes and operations, as of November 3,
1999, the Company sold UPC Polska 14,000 shares of its Mandatorily Redeemable
Debenture stock ("Debenture Stock") for a total of $140 million on an as-issued
basis. The debenture stock will be redeemed on December 31, 2003 for a price of
$10,000 per share plus interest at 10% per annum from November 3, 1999 to the
date of redemption, compounded annually. The Company accrued dividend on
Debenture Stock for the years ended December 31, 2001 and 2000, and for the five
months of 1999 was $15,657,000, $14,233,000 and $2,333,000, respectively. The
Company will pledge notes payable from PCBV to the Company in the amount of
$176,398,000 to secure the payment of the redemption amount of the debenture
stock. The PCI Noteholders will be equally and ratably secured by this lien.

14. STOCK OPTION PLANS

    UPC POLSKA, INC. (FORMERLY @ENTERTAINMENT, INC.) STOCK OPTION PLAN

    On June 22, 1997, the Company's parent adopted a stock option plan (the
"1997 Plan") pursuant to which UPC Polska's Board of Directors could have
granted stock options to officers, key employees and consultants of the Company.
The 1997 Plan authorized grants of options to purchase up to 4,436,000 shares,
subject to adjustment in accordance with the 1997 Plan.

    Stock options are granted with an exercise price that must be at least equal
to the stock's fair market value at the date of grant. With respect to any
participant who owns stock possessing more than 10% of the voting power of all
classes of stock of UPC Polska, the exercise price of any incentive stock option
granted must equal at least 110% of the fair market value on the grant date and
the maximum term of an incentive stock option must not exceed five years. The
term of all other options granted under the 1997 Plan may not exceed ten years.
Options became exercisable at such times as determined by UPC Polska Board of
Directors and as set forth in the individual stock option agreements. Generally,
all stock options vested ratably over 2 to 5 years commencing one year after the
date of grant.

    During 1998, there were 250,000 stock options granted to employees of PCI at
an exercise price of $12.00 per share and a remaining contractual life of
9.2 years. Of this amount, 125,000 options were exercisable as of December 31,
1998. No options were exercised or forfeited during 1998.

    During 1999, there were 375,000 stock options granted to PCI employees at an
exercise price of $14.30 per share and a remaining contractual life of three
years. During 1999, 478,750 stock options of PCI employees were forfeited. All
other stock options were cancelled and paid in cash in full in connection with
the Merger.

UPC STOCK OPTION PLAN

    In June 1996, UPC Polska Inc.'s parent company, UPC, adopted a stock option
plan (the "Plan") for certain of its employees and those of its subsidiaries.
During 2000, management of UPC Polska Inc. and PCI were granted options by the
parent company under this plan.

    There are 18,000,000 total shares available for the granting of options
under the Plan. Each option represents the right to acquire a certificate
representing the economic value of one share. The options are granted at fair
market value determined by UPC's Supervisory Board at the time of the grant. The
maximum term that the options can be exercised is five years from the date of
the grant. The vesting period for grants of options is four years, vesting in
equal monthly increments. Upon termination of an

                                       55
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

employee (except in the case of death, disability or the like), vested options
must be exercised, within 30 days of the termination date. The Supervisory Board
of UPC may alter these vesting schedules at its discretion. An employee has the
right at any time to put his certificates or shares from exercised vested
options at a price equal to the fair market value. The Company can also call
such certificates or shares for a cash payment upon termination in order to
avoid dilution, except for certain awards, which can not be called by the
Company until expiration of the underlying options. The Plan also contains
anti-dilution protection and provides that, in the case of change of control,
the acquiring company has the right to require UPC to acquire all of the options
outstanding at the per share value determined in the transaction giving rise to
the change of control.

    For purposes of the proforma disclosures presented below, UPC, and UPC
Polska Inc., and consequently, PCI have computed the fair values of all options
granted during the years ended December 31, 2001 and 2000, and for the five
months of 1999 and the seven months of 1999, using the Black-Scholes
multiple-option pricing model and the following weighted-average assumptions:

<Table>
<S>                                                           <C>
Risk-free interest rate.....................................    4.60%
Expected life regular options...............................  5 years
Expected volatility.........................................   74.14%
Expected dividend yield.....................................      0%.
</Table>

    Based upon Black-Scholes multiple option model, the total fair value of
options granted was approximately $1.0 million for the year ended December 31,
2000. This amount is 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 year ended December 31, 2001, stock-based compensation, net
of the effect of forfeitures and net of actual compensation expense recorded in
the statement of operations was zero. This stock-based compensation had the
following proforma effect on net income (in thousands):

<Table>
<Caption>
                                                               SUCCESSOR                    PREDECESSOR
                                               ------------------------------------------   ------------
                                                YEAR ENDED     YEAR ENDED
                                               DECEMBER 31,   DECEMBER 31,    FIVE MONTHS   SEVEN MONTHS
                                                   2001           2000          OF 1999       OF 1999
                                               ------------   -------------   -----------   ------------
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>            <C>             <C>           <C>
Net loss applicable to holders of common
  stock--as reported.........................   $  (72,296)    $  (64,906)    $  (37,374)    $  (22,479)
Net loss applicable to holders of common
  stock--pro forma...........................      (72,495)       (65,055)       (37,374)       (22,908)
Net loss applicable to holders of common
  stock per share--as reported...............    (3,815.50)     (3,425.48)     (1,972.45)     (1,186.35)
Net loss applicable to holders of common
  stock per share--pro forma.................   $(3,826.00)    $(3,433.34)    $(1,972.45)    $(1,208.99)
</Table>

                                       56
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    A summary of stock option activity for the Company's employees participating
in the Plan is as follows:

<Table>
<Caption>
                                                FOR THE YEAR ENDED DECEMBER 31, 2001
                                                -------------------------------------
                                                                    WEIGHTED-AVERAGE
                                                NUMBER OF SHARES     EXERCISE PRICE
                                                -----------------   -----------------
                                                                         (EUROS)
<S>                                             <C>                 <C>
Balance at January 1, 2000....................            --                 --
Granted during period.........................        32,031              44.22(1)
Cancelled during period.......................            --                 --
Exercised during period.......................            --                 --
                                                      ------              -----
Balance at December 31, 2000..................        32,031              44.22(1)
Granted during period.........................            --                 --
Cancelled during period.......................            --                 --
Exercised during period.......................            --                 --
                                                      ------              -----
Balance at December 31, 2001..................        32,031              44.22
                                                      ======              =====
Exercisable at end of period (1)..............         5,333              44.22(1)
                                                      ======              =====
</Table>

------------------------

(1) The Weighted Average Exercise Price translated into US dollars at the rate
    as at December 31, 2001 amounts to $39.52.

    The combined weighted-average fair values and weighted-average exercise
prices of options granted are as follows:

<Table>
<Caption>
                                             FOR THE YEAR ENDED DECEMBER 31, 2001
                                        -----------------------------------------------
EXERCISE PRICE                          NUMBER OF OPTIONS   FAIR VALUE   EXERCISE PRICE
--------------                          -----------------   ----------   --------------
                                                                      (EUROS)
<S>                                     <C>                 <C>          <C>
Less than market price................        4,733            31.62          44.22(1)
Equal to market price.................       27,298            28.20          44.22(1)
                                             ------            -----          -----
  Total...............................       32,031            28.71          44.22(1)
                                             ======            =====          =====
</Table>

------------------------

(1) The Weighted Average Exercise Price translated into US dollars at the rate
    as at December 31, 2001 amounts to $39.52.

    The following table summarizes information about stock options outstanding,
vested and exercisable as of December 31, 2001:

<Table>
<Caption>
                                                 OPTIONS OUTSTANDING                       OPTIONS EXERCISABLE
                                  -------------------------------------------------   ------------------------------
                                                WEIGHTED-AVERAGE
                                   NUMBER OF       REMAINING                           NUMBER OF
                                    OPTIONS     CONTRACTUAL LIFE   WEIGHTED-AVERAGE     OPTIONS     WEIGHTED-AVERAGE
EXERCISE PRICE (EUROS)            OUTSTANDING       (YEARS)         EXERCISE PRICE    EXERCISABLE    EXERCISE PRICE
----------------------            -----------   ----------------   ----------------   -----------   ----------------
                                                                       (EUROS)                          (EUROS)
<S>                               <C>           <C>                <C>                <C>           <C>
44.22...........................     32,031           3.25              44.22            5,333           44.22(1)
                                     ======           ====              =====            =====           =====
</Table>

------------------------

(1) The Weighted Average Exercise Price translated into US dollars at the rate
    as at December 31, 2001 amounts to $39.52.

                                       57
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    This Plan has been accounted for as a fixed plan. Compensation expense of
zero was recognized for the year ended December 31, 2001.

15. QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)

<Table>
<Caption>
                                                            OPERATING
                                                 REVENUES     LOSS      NET LOSS
                                                 --------   ---------   --------
<S>                                              <C>        <C>         <C>
2001
  First Quarter................................  $18,728    $(13,360)   $(13,144)
  Second Quarter...............................   20,186     (11,885)    (10,223)
  Third Quarter................................   18,600     (12,628)    (18,310)
  Fourth Quarter...............................   19,609     (15,203)    (10,299)

2000
  First Quarter................................  $16,853    $(10,457)   $(11,450)
  Second Quarter...............................   17,177     (10,704)    (16,054)
  Third Quarter................................   17,094     (11,233)    (14,613)
  Fourth Quarter...............................   17,657     (12,187)     (4,393)
</Table>

16. COMMITMENTS AND CONTINGENCIES

LEASES

    Total rental expense associated with the operating leases mentioned below
for the years ended December 31, 2001 and 2000, and for the five months of 1999
and seven months of 1999 was $5,638,000, $3,119,000, $969,469 and $692,478,
respectively.

BUILDING LEASE

    The Company leases several offices and warehouses within Poland under
cancelable operating leases. The future minimum lease payments as of
December 31, 2001 is $339,000 in 2002.

CONDUIT LEASES

    The Company also leases space within various telephone duct systems from
TPSA under cancelable operating leases. The TPSA leases expire at various times,
and a substantial portion of the Company's contracts with TPSA permit
termination by TPSA without penalty at any time either immediately upon the
occurrence of certain conditions or upon provision of three to six months notice
without cause. Refer to Note 17 for further detail.

    All of the agreements provide that TPSA is the manager of the telephone duct
system and will lease space within the ducts to the Company for installation of
cable and equipment for the cable television systems. The lease agreements
provide for monthly lease payments that are adjusted quarterly or annually,
except for the Gdansk lease agreement which provides for an annual adjustment
after the sixth year and then remains fixed through the tenth year of the lease.

    Minimum future lease commitments for the aforementioned conduit leases
relate to 2002 and 2003 only, as all leases are cancelable in accordance with
the aforementioned terms. The future minimum lease commitments related to these
conduit leases approximates $1,023,000 as of December 31, 2001.

                                       58
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

PROGRAMMING COMMITMENTS

    The Company has entered into long-term programming agreements and agreements
for the purchase of certain exhibition or broadcast rights with a number of
third party and affiliated content providers for its cable systems. The
agreements have terms which range from one to twenty years and require that the
license fees be paid either at a fixed amount payable at the time of execution
or based upon a guaranteed minimum number of subscribers connected to the system
each month. At December 31, 2001, the Company had an aggregate minimum
commitment in relation to these agreements of approximately $132,217,000 over
the next seventeen years, approximating $22,211,000 in 2002, $19,804,000 in
2003, $16,812,000 in 2004, $13,406,000 in 2005 and $59,984,000 in 2006 and
thereafter.

REGULATORY APPROVALS

    The Company is in the process of obtaining permits from the Chairman of URT
for several of its cable television systems. If these permits are not obtained,
URT could impose penalties such as fines or in severe cases, revocation of all
permits held by an operator or the forfeiture of the operator's cable networks.
Management of the Company does not believe that these pending approvals result
in a significant risk to the Company. Additionally, in March 2001, PCI's
subsidiary notified the Chairman of the URT of its activities concerning the
provision of data transmission service and access to the Internet.

DIVIDEND RESTRICTIONS

    The Company's Polish subsidiaries are only able to distribute dividends to
the extent of accounting profit determined in accordance with Polish accounting
principles. As of December 31, 2001 the Company's Polish subsidiaries have no
profit available for distribution as dividends.

LITIGATION AND CLAIMS

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

HBO LAWSUIT

    Two of the Company's subsidiaries, Telewizja Kablowa Gosat-Service Sp. z
o.o. and PTK S.A., and four unrelated Polish cable operators and HBO Polska Sp.
z o.o. ("HBO Polska") were made defendants in a lawsuit instituted by Polska
Korporacja Telewizyjna Sp. z o.o., an indirect partially-owned subsidiary of
Canal+. The lawsuit was filed in the Provincial Court in Warsaw, XX Economic
Division (Sad Wojewodzki w Warszawie, Wydzial XX Gospodarczy) (the "Court"). The
main defendant in the proceedings is HBO Polska which is accused of broadcasting
HBO television programming in Poland without a license from the Polish National
Radio and Television Council as required by the Polish Television Act and
thereby undertaking an activity constituting an act of unfair competition. The
plaintiff has asked the Court to order HBO Polska to cease broadcasting of its
programming in Poland until it has received a broadcasting license from the
Polish National Radio and Television Council, and that the defendant cable
operators be ordered (i) to cease carrying the HBO Polska programming on their
cable networks in Poland until HBO Polska has received a broadcasting license
from the Polish National Radio and Television Council, (ii) not to use their
current filters for the purpose of

                                       59
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

unscrambling the HBO Polska programming, and (iii) in the future, to use
effective encoding systems and systems of controlled access to the HBO Polska
programming. The Company does not believe that the lawsuit will have a material
adverse effect on its business operations.

PCBV MINORITY STOCKHOLDER'S CLAIM

    On or about July 8, 1999, certain minority shareholders ("the minority
shareholders") of PCBV, filed a lawsuit against PCI and certain other
defendants, in United States District Court, Southern District of Ohio, Eastern
Division, Civil Action No. C2-99-621.

    The relief sought by the minority shareholders includes: (1) unspecified
damages in excess of $75,000, (2) an order lifting the restrictions against
transfer of shares set forth in the Shareholders' Agreement among PCBV's
shareholders, as amended (the "Shareholders' Agreement") so that the minority
shareholders can liquidate their shares in PCBV, (3) damages in the amount of
1.7 percent of the payment made by UPC for the shares of the Company as set
forth in the Agreement and Plan of Merger between UPC Polska and UPC dated
June 2, 1999, and (4) attorneys' fees and costs incurred in prosecuting the
lawsuit.

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

    On or about March 31, 2000 the parties to the lawsuit reached a settlement.
In accordance with the settlement, on June 2, 2000, Wizja TV B.V., an affiliate
of Company's Parent, purchased approximately 1.4% of the outstanding shares of
PCBV for a price of approximately $2.2 million. The case has been dismissed and
releases exchanged. The aforementioned settlement does not include the remaining
minority shareholders of PCBV.

    In addition to the Ohio lawsuit, other minority shareholders of PCBV
(representing an additional approximately 6% of the shares of PCBV, hereinafter
the "Reece Group") have asserted claims against the past and present directors
or officers of, or members of the Board of Managers of, the Company, PCBV and
UPC Polska or one or more controlling shareholders of UPC Polska but have not
yet filed a lawsuit.

    The claims by the Reece Group consist of allegations previously made by
Reece Communications, Inc. ("RCI"). RCI's allegations were premised on, among
other things, alleged acts, errors, omissions, misstatements, misleading
statements or breaches of duty by the aforementioned officers, directors, or
controlling shareholders. The Company's parent has negotiated a settlement of
those claims and a simultaneous purchase of the Reece Group's PCBV shares, as
well as the purchase

                                       60
<Page>
                          POLAND COMMUNICATIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

of all other shares of PCBV held by other minority shareholders and a settlement
of their claims. On August 28, 2001, in exchange for the release of claims and
the transfer of all outstanding shares in PCBV held by minority shareholders,
the Company's parent and/or its affiliates paid in the aggregate approximately
$3.6 million in cash at closing and issued promissory notes for $17.0 million.
The Company has accounted for the $21.2 million as goodwill in the accompanying
consolidated financial statements in accordance with SFAS 141. Accordingly,
there has been no amortization recorded associated with this goodwill.

17. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

USE OF TPSA CONDUIT

    The Company's ability to build out its existing cable television networks
and to integrate acquired systems into its cable television networks depends on,
among other things, the Company's continued ability to design and obtain access
to network routes, and to secure other construction resources, all at reasonable
costs and on satisfactory terms and conditions. Many of such factors are beyond
the control of the Company. In addition, at December 31, 2001, approximately
74.3% of the Company's cable plant had been constructed utilizing pre-existing
conduits of TPSA. A substantial portion of the Company's contracts with TPSA for
the use of such conduits permits termination by TPSA without penalty at any time
either immediately upon the occurrence of certain conditions or upon provision
of three to six months' notice without cause.

    In addition, some conduit agreements with TPSA provide that cables can be
installed in the conduit only for the use of cable television. If the Company
uses the cables for a purpose other than cable television, such as data
transmission, telephone, or Internet access, such use could be considered a
violation of the terms of certain conduit agreements, unless this use is
expressly authorized by TPSA. There is no guarantee that TPSA would give its
approval to permit other uses of the conduits. The Company is currently in the
process of introducing Internet services to its customers and renegotiating
certain conduct agreements with TPSA. As of December 31, 2001, the Company
believes it was not in material violation under any of its existing conduit
agreements.

LIMITED INSURANCE COVERAGE

    While the Company carries general liability insurance on its properties,
like many other operators of cable television systems it does not insure the
underground portion of its cable televisions networks. Accordingly, any
catastrophe affecting a significant portion of the Company's cable television
networks could result in substantial uninsured losses and could have a material
adverse effect on the Company.

CREDIT WORTHINESS

    All of the Company's customers are located in Poland. As is typical in this
industry, no single customer accounted for more than five percent of the
Company's sales in 2001 or 2000. The Company estimates an allowance for doubtful
accounts based on the credit worthiness of its customers as well as general
economic conditions. Consequently, an adverse change in those factors could
effect the Company's estimate of its bad debts.

                                       61
<Page>
REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of Poland Cablevision (Netherlands)
B.V.:

    We have audited the accompanying consolidated balance sheets of Poland
Cablevision (Netherlands) B.V., and subsidiaries as of December 31, 2001 and
2000, and the related consolidated statements of operations, comprehensive loss,
changes in stockholders' equity and cash flows for the years ended December 31,
2001 and 2000, and for the periods from January 1, 1999 through August 5, 1999
and from August 6, 1999 through December 31, 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these 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 financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the 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 financial statements referred to above present fairly,
in all material respects, the financial position of Poland Cablevision
(Netherlands) B.V., Inc. and subsidiaries as of December 31, 2001 and 2000, and
the results of their operations and their cash flows for the years ended
December 31, 2001 and 2000, and for the periods from January 1, 1999 through
August 5, 1999 and from August 6, 1999 through December 31, 1999, in conformity
with accounting principles generally accepted in the United States.

    The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 3 to the consolidated financial statements, the Company has suffered
recurring losses from operations and has a negative working capital that raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

Arthur Andersen Sp. z o.o.

Warsaw, Poland
March 31, 2002

                                       62
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                       SUCCESSOR (NOTE 2)
                                                              -------------------------------------
                                                              DECEMBER 31, 2001   DECEMBER 31, 2000
                                                              -----------------   -----------------
                                                                         (IN THOUSANDS)
<S>                                                           <C>                 <C>
                                    ASSETS
Current assets:
  Cash and cash equivalents.................................      $  2,933            $  1,159
  Accounts receivable, net of allowances for doubtful
    accounts of $2,733 in 2001 and $4,392 in 2000 (note
    5)......................................................         6,428               8,549
  VAT recoverable...........................................            --                 295
  Prepayments...............................................           733                 510
  Due from affiliates.......................................           206                  --
  Other current assets......................................            --                 159
                                                                  --------            --------
      Total current assets..................................        10,300              10,672
                                                                  --------            --------
  Property, plant and equipment (note 7):
      Cable system assets...................................       134,870             117,307
      Construction in progress..............................           774               6,050
      Vehicles..............................................         1,435                 473
      Office, furniture and equipment.......................        10,907               9,316
      Other.................................................         8,520               2,651
                                                                  --------            --------
                                                                   156,506             135,797
          Less accumulated depreciation.....................       (43,307)            (22,412)
                                                                  --------            --------
          Net property, plant and equipment.................       113,199             113,385
  Inventories for construction..............................         4,008               5,400
  Intangible assets, net (note 8)...........................       325,027             315,923
                                                                  --------            --------
              Total assets..................................      $452,534            $445,380
                                                                  ========            ========

                               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued expenses.....................      $ 17,560            $ 26,359
  Deferred revenue..........................................         2,558               2,182
  Notes payable and accrued interest to PCI (note 11).......       249,765                  --
  Due to PCI and affiliate..................................        66,612              22,864
                                                                  --------            --------
      Total current liabilities.............................       336,495              51,405
Long term liabilities:
  Notes payable and accrued interest to PCI (note 11).......            --             210,530
  Other payables to PCI.....................................            --              37,994
                                                                  --------            --------
      Total liabilities.....................................       336,495             299,929
                                                                  --------            --------
Commitments and contingencies (note 13)
  Minority interest.........................................           285                 281
Stockholders' equity:
  Common stock, $0.50 par value, 200,000 shares authorized;
    issued and outstanding..................................           100                 100
  Paid-in capital...........................................       288,783             267,564
  Accumulated other comprehensive loss......................       (19,333)            (33,077)
  Accumulated deficit.......................................      (153,796)            (89,417)
                                                                  --------            --------
      Total stockholders' equity............................       115,754             145,170
                                                                  --------            --------
      Total liabilities and stockholders' equity............      $452,534            $445,380
                                                                  ========            ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       63
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                     SUCCESSOR (NOTE 2)               PREDECESSOR (NOTE 2)
                                         ------------------------------------------   --------------------
                                                                       PERIOD FROM        PERIOD FROM
                                                                        AUGUST 6,          JANUARY 1,
                                          YEAR ENDED     YEAR ENDED    1999 THROUGH       1999 THROUGH
                                         DECEMBER 31,   DECEMBER 31,   DECEMBER 31,        AUGUST 5,
                                             2001           2000           1999               1999
                                         ------------   ------------   ------------   --------------------
                                                                  (IN THOUSANDS)
<S>                                      <C>            <C>            <C>            <C>
Revenues...............................    $ 73,423       $ 64,738       $ 25,386           $ 29,535
Operating expenses:
  Direct operating expenses charged by
    third parties......................      24,743         20,753         12,093              7,963
  Direct operating expenses charged by
    affiliates.........................      27,706         25,884          9,588             13,025
  Selling, general and administrative
    expenses...........................      23,500         21,036         11,104              6,947
  Depreciation and amortization........      47,619         40,511         14,481              8,726
                                           --------       --------       --------           --------
Total operating expenses...............     123,568        108,184         47,266             36,661

  Operating loss.......................     (50,145)       (43,446)       (21,880)            (7,126)

Interest and investment income, net....         236            207             71                 59
Interest expense.......................     (17,469)       (15,201)        (5,900)            (8,029)
Foreign exchange gain/(loss), net......       3,193            337         (3,228)              (219)
Other expenses.........................          --             --         (1,300)                --
                                           --------       --------       --------           --------
  Loss before income taxes and minority
    interest...........................     (64,185)       (58,103)       (32,237)           (15,315)
Income tax expense (note 9)............        (190)           (76)            (9)               (30)
Minority interest......................          (4)         1,008             --                 --
                                           --------       --------       --------           --------
  Net loss.............................     (64,379)       (57,171)       (32,246)           (15,345)
                                           --------       --------       --------           --------
Net loss applicable to holders of
  common stock.........................     (64,379)       (57,171)       (32,246)           (15,345)
                                           ========       ========       ========           ========
Basic net loss per common share (note
  10)..................................    $(321.90)      $(285.85)      $(161.23)          $ (76.73)
                                           ========       ========       ========           ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       64
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

<Table>
<Caption>
                                                     SUCCESSOR (NOTE 2)               PREDECESSOR (NOTE 2)
                                         ------------------------------------------   --------------------
                                                                       PERIOD FROM        PERIOD FROM
                                                                        AUGUST 6,          JANUARY 1,
                                          YEAR ENDED     YEAR ENDED    1999 THROUGH       1999 THROUGH
                                         DECEMBER 31,   DECEMBER 31,   DECEMBER 31,        AUGUST 5,
                                             2001           2000           1999               1999
                                         ------------   ------------   ------------   --------------------
                                                                  (IN THOUSANDS)
<S>                                      <C>            <C>            <C>            <C>
Net loss...............................    $(64,379)      $(57,171)      $(32,246)          $(15,345)
Other comprehensive (loss) / income:
  Translation adjustment...............      13,744         (2,127)       (30,950)           (11,814)
                                           --------       --------       --------           --------
Comprehensive loss.....................    $(50,635)      $(59,298)      $(63,196)          $(27,159)
                                           ========       ========       ========           ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       65
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)

<Table>
<Caption>
                                                                  ACCUMULATED
                                      CAPITAL STOCK                  OTHER
                                           PAR        PAID-IN    COMPREHENSIVE   ACCUMULATED
                                          VALUE       CAPITAL       INCOME         DEFICIT      TOTAL
                                      -------------   --------   -------------   -----------   --------
                                                               (IN THOUSANDS)
<S>                                   <C>             <C>        <C>             <C>           <C>
Balance at January 1, 1999
(Predecessor note 2)................      $100        $ 14,589      $    424      $ (82,229)   $(67,116)
  Net loss..........................        --              --            --        (15,345)    (15,345)
  Cumulative Translation
    Adjustment......................        --              --       (11,814)            --     (11,814)
                                          ----        --------      --------      ---------    --------
Balance at August 5, 1999
  (Predecessor note 2)..............       100          14,589       (11,390)       (97,574)    (94,275)
  Purchase accounting...............        --         252,975        11,390         97,574     361,939
                                          ----        --------      --------      ---------    --------
Balance at August 6, 1999 (Successor
note 2).............................       100         267,564            --             --     267,664
  Net loss..........................        --              --            --        (32,246)    (32,246)
  Cumulative Translation
    Adjustment......................        --              --       (30,950)            --     (30,950)
                                          ----        --------      --------      ---------    --------
Balance at December 31, 1999
(Successor note 2)..................       100         267,564       (30,950)       (32,246)    204,468
  Net loss..........................        --              --            --        (57,171)    (57,171)
  Cumulative Translation
    Adjustment......................        --              --        (2,127)            --      (2,127)
                                          ----        --------      --------      ---------    --------
Balance at December 31, 2000
(Successor note 2)..................       100         267,564       (33,077)       (89,417)    145,170
  Net loss..........................        --              --            --        (64,379)    (64,379)
  Capital contribution from PCI.....        --          21,219            --             --      21,219
  Cumulative Translation
    Adjustment......................        --              --        13,744             --      13,744
                                          ----        --------      --------      ---------    --------
Balance at December 31, 2001
(Successor note 2)..................      $100        $288,783      $(19,333)     $(153,796)   $115,754
                                          ====        ========      ========      =========    ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       66
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                               SUCCESSOR (NOTE 2)               PREDECESSOR (NOTE 2)
                                                   ------------------------------------------   --------------------
                                                                                 PERIOD FROM        PERIOD FROM
                                                                                  AUGUST 6,          JANUARY 1,
                                                    YEAR ENDED     YEAR ENDED    1999 THROUGH       1999 THROUGH
                                                   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,        AUGUST 5,
                                                       2001           2000           1999               1999
                                                   ------------   ------------   ------------   --------------------
                                                                            (IN THOUSANDS)
<S>                                                <C>            <C>            <C>            <C>
Cash flows from operating activities:
Net loss.........................................    $(64,379)      $(57,171)      $(32,246)          $(15,345)
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
      Minority interest..........................           4         (1,008)            --                 --
      Depreciation and amortization..............      47,619         40,511         14,481              8,726
      Interest expense added to notes payable to
        PCI......................................      17,413         15,201          3,571             10,356
      Unrealized foreign gain....................      (2,331)          (891)            --                 --
      Other......................................         513             --          1,300                 --
      Changes in operating assets and
        liabilities:
          Accounts receivable....................       2,457         (1,132)        (1,289)            (2,716)
          Other current assets...................       1,864            595         (1,066)              (263)
          Accounts payable.......................      (3,905)         3,058         10,385             (4,586)
          Amounts due to affiliates..............       4,766          7,823         11,014             14,853
          Deferred revenue.......................         424          1,587            853                937
                                                     --------       --------       --------           --------
              Net cash provided by operating
                activities.......................       4,445          8,573          7,003             11,962
                                                     --------       --------       --------           --------
Cash flows from investing activities:
      Construction and purchase of property,
        plant and equipment......................     (23,143)       (28,133)        (8,777)           (10,263)
      Purchase of intangibles....................      (1,277)        (1,998)          (308)              (145)
                                                     --------       --------       --------           --------
              Net cash used in investing
                activities.......................     (24,420)       (30,131)        (9,085)           (10,408)
                                                     --------       --------       --------           --------
Cash flows from financing activities:
      Proceeds from notes payable................      21,704         19,877          2,001                 57
                                                     --------       --------       --------           --------
              Net cash provided by financing
                activities.......................      21,704         19,877          2,001                 57
                                                     --------       --------       --------           --------
      Net (decrease)/increase in cash and cash
        equivalents..............................       1,729         (1,681)           (81)             1,611
Effect of exchange rates on cash and cash
  equivalents....................................          45              2           (155)                --
Cash and cash equivalents at beginning of
  period.........................................       1,159          2,838          3,074              1,463
                                                     --------       --------       --------           --------
Cash and cash equivalents at end of period.......    $  2,933       $  1,159       $  2,838           $  3,074
                                                     ========       ========       ========           ========
</Table>

          See accompanying notes to consolidated financial statements.

                                       67
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999

1.  REPORTING ENTITY

    Poland Cablevision (Netherlands) B.V. ("PCBV"), a Netherlands corporation,
is a holding company that holds a controlling interest in several Polish cable
television operators (collectively referred to as the "UPC TK Companies").
Poland Cablevision (Netherlands) B.V. and subsidiaries (the "Company") is 92.3%
owned by Poland Communications, Inc. ("PCI"), who is in turn, owned 100% by UPC
Polska, Inc., formerly @Entertainment, Inc, ("UPC Polska") a Delaware
corporation which is a wholly--owned subsidiary of United Pan-Europe
Communications N.V. ("UPC"), and 7.7% is owned by another UPC Polska's
wholly-owned subsidiary.

    The period from January 1, 1999 through August 5, 1999 and the period from
August 6, 1999 through December 31, 1999 are referred to herein as the "seven
months of 1999" and "five months of 1999", respectively.

    The Company offers cable television services to residential and business
customers in Poland. All significant assets and operating activities of the
Company are located in Poland.

2.  CONSUMMATION OF UPC TENDER OFFER AND MERGER

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

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

    Also on August 6, 1999, Bison was merged with and into UPC Polska with UPC
Polska continuing as the surviving corporation (the "Merger"). Accordingly, UPC
Polska became a wholly-owned subsidiary of UPC. UnitedGlobalCom, Inc. is the
majority stockholder of UPC. The Company believes that a Change of Control
occurred on August 6, 1999 as a result of the Acquisition and Merger. PCBV prior
to the Acquisition, is herein referred to as the "Predecessor" while the Company
after the Acquisition is referred to as the "Successor".

    The Acquisition was accounted for under the purchase method of accounting,
with all of the purchase accounting adjustments "pushed-down" to the
consolidated financial statements of UPC Polska. Accordingly, the purchase price
was allocated to the underlying assets and liabilities based upon their
estimated fair values and any excess to goodwill. UPC Polska restated some of
its assets and liabilities at August 5, 1999. At this date the Notes of UPC
Polska and PCI were restated to reflect the market value and as a result were
increased by $61.9 million, deferred financing costs of $16.1 million and
deferred revenues of $2.0 million were written down to zero. The consideration
paid by UPC for all shares outstanding, warrants and options totaled
$812.5 million. At this time UPC Polska had negative net assets of approximately
$53.3 million and existing goodwill at net book value of $37.5 million which was
realized on previous transaction. As a result of the above considerations, UPC
realized goodwill of approximately $979.3 million. As a result of the
Acquisition, UPC pushed down its

                                       68
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

basis to UPC Polska establishing a new basis of accounting as of the acquisition
date. During the year ended December 31, 2000 this figure increased by
$12.3 million to $991.6 million mainly due to the results of an arbitration
settlement between UPC Polska and Telewizyjna Korporacja Partycypacyjna ("TKP").
As a result of the Acquisition, UPC Polska pushed down the goodwill to its
subsidiaries based on the investment model used for acquisition. The Company was
allocated approximately $354.0 million of goodwill.

3.  GOING CONCERN AND LIQUIDITY RISKS

    These consolidated financial statements have been prepared on a going
concern basis, which contemplates the continuation and expansion of trading
activities as well as the realization of assets and liquidation of liabilities
in the ordinary course of business. Pay television operators typically
experience losses and negative cash flows in their initial years of operation
due to the large capital investment required for the construction or acquisition
of their cable networks and the administrative costs associated with commencing
operations. Consistent with this pattern, the Company has incurred substantial
operating losses since inception.

    The Company relies solely on PCI, a wholly owned subsidiary of UPC Polska,
for its sources of liquidity and financing, which relies solely on UPC Polska
for its sources of liquidity and financing. The financial and liquidity problems
experienced by UPC and UPC Polska, as described further below, have a
significant impact on the Company and its shareholder, PCI, ability to continue
as going concerns.

    During 2001, UPC Polska reviewed its long term plan for its operations and
identified businesses which require additional financing to become profitable.
UPC Polska assessed its ability to obtain additional financing on terms
acceptable to it. These reviews proved that today, UPC Polska could not provide
further financing to its D-DTH and programming businesses. As a result, UPC
Polska changed its business strategy and disposed of its D-DTH and programming
businesses and revised its business strategy for cable television from
aggressive growth to focus on achievement of positive cash flow. As a result,
UPC Polska, PCI and the Company expect to have positive EBITDA and cash flows in
2002.

    As of December 31, 2001, the Company has negative working capital of
$326.2 million and has experienced operating losses of $50.1 million and
$43.4 million during the years ended December 31, 2001 and 2000, respectively.
It also has significant commitments under non-cancelable operating leases and
for programming rights, as well as the notes and amounts due to PCI of
$249.8 million and $66.6 million, respectively, which are due on demand.

    As of December 31, 2001, PCI has negative working capital of $72.4 million
and has experienced operating losses of $53.1 million and $44.6 million during
the years ended December 31, 2001 and 2000, respectively. It also has
significant commitments under non-cancelable operating leases and for
programming rights, as well as repayment obligations related to the PCI Notes.
During 2002, PCI will be required to make repayment of the Bank Rozwoju facility
of $0.4 million. In 2003, PCI will also be required to fulfill its repayment
obligation of approximately $14.5 million in principal amount under the PCI
Notes.

    As of December 31, 2001, UPC Polska has a negative working capital of
$382.3 million, stockholder's deficit of $244.1 million and has experienced
operating losses of $185.2 million and $179.0 million during the years ended
December 31, 2001 and 2000, respectively. Additionally, UPC Polska has
significant funding obligations during 2002 and 2003, in which it does not have
the current cash available or available borrowing capacity to fund.

                                       69
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    The Company, since its August 6, 1999 Merger, has relied completely on
funding from its shareholder PCI. The Company received funding in the form of
proceeds from notes of $21.7 million, $19.9 million and $2.0 million for the
years ended December 31, 2001 and 2000 and the five months of 1999,
respectively. Additionally, PCI allowed the Company to accrue, but not pay
interest of $17.4 million, $15.2 million and $5.9 million for the years ended
December 31, 2001, 2000 and the five months of 1999. During this same period of
time, PCI received funding in the forms of capital contributions, funding from
Parent and Mandatorily Redeemable Debenture Stock from UPC Polska of
$19.7 million, $18.8 million and $156.9 million for the years ended
December 31, 2001 and 2000 and the 5 months of 1999, respectively. UPC Polska
has relied completely on funding from its shareholder UPC since August 6, 1999.

    As a result of UPC's decision to not make interest payments on its senior
notes and senior discount notes on February 1, 2002, and its failure to make the
interest payment upon the expiration of the applicable 30-day grace period,
these actions constituted Events of Default pursuant to UPC's senior notes and
senior discount notes. The occurrence of these Events of Default gave the
related trustees under the indebtedness, or requisite number of holders of such
notes, the right to accelerate the maturity of all of UPC's senior notes and
senior discount notes and then to foreclose on the collateral securing these
notes. As of the date of the filing of this Annual Report on Form 10-K, neither
any of the trustees for the respective notes nor the requisite number of holders
of those notes have accelerated the payment of principal and interest under
these notes. UPC has entered into a Memorandum of Understanding which is a
non-binding agreement to enter into negotiations with UnitedGlobalCom, UPC's
parent, to attempt to reach agreement on a means to restructure UPC's
indebtedness. Although the Company had anticipated being able to rely on PCI,
which is relying on UPC Polska, to meet these and other payment obligations,
given UPC's and UPC Polska's liquidity concerns, the Company is not certain that
it will receive the necessary financing from PCI to continue normal operations.
If the Company is unable to rely on PCI for financial support, it will have to
meet its payment obligations with cash on hand or with funds obtained from
public or private debt or bank financing or any combination thereof, subject to
the restrictions contained in the indentures governing the outstanding senior
indebtedness of PCI, UPC Polska, UPC and UnitedGlobalCom, Inc.

    As of December 31, 2001, a significant amount of UPC Polska's unrestricted
cash has limitations imposed on it by its indentures and notes payable to UPC.
As a result of these limitations and the potential inability of UPC to provide
necessary funding, if required by UPC Polska, UPC Polska has limited sources of
funding available to it outside of its operating cash flows. Additionally, as a
result of material adverse change provisions contained in the debt agreements
between UPC and UPC Polska, the notes payable to UPC of $444.5 million have been
classified as current in the UPC Polska financial statements. In the event UPC
accelerated payment under its notes, UPC Polska would have limited funds or
available borrowings to repay these notes. Additionally, the UPC Polska debt
agreements have various Events of Default, including the acceleration of the
payment of other debt of UPC Polska in excess of $15 million. In the event UPC
Polska's debt were to be accelerated or it were to have an other Event of
Default which were not cured in a timely manner pursuant to the respective
agreements, UPC Polska's Notes of $403.7 million would become due. UPC Polska
has evaluated the likelihood of it experiencing an Event of Default as of the
date of filing this Annual Report on Form 10-K and has determined, based on its
assessment, that it is not "virtually certain" that an Event of Default will
occur. As a result, in the UPC Polska December 31, 2001 consolidated balance
sheet, the amounts related to the UPC Polska Notes have been reflected as
long-term. UPC Polska's available cash on hand will be insufficient to satisfy
all of its obligations, and UPC Polska cannot be certain that

                                       70
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

it will be able to obtain the necessary financing at all, or on terms that will
be favorable to UPC Polska.

    Moreover, if the Company's plans or assumptions change, if its assumptions
prove inaccurate, if it consummates unanticipated investments in or acquisitions
of other companies, if it experiences unexpected costs or competitive pressures,
or if existing cash, and projected cash flow from operations prove to be
insufficient, the Company may need to obtain greater amounts of additional
financing. While it is the Company's intention to enter only into new financing
or refinancings that it considers advantageous, there can be no assurance that
such sources of financing would be available to the Company in the future, or,
if available, that they could be obtained on terms acceptable to the Company.

    Management of the Company believes that significant opportunities exist for
pay television providers capable of delivering high quality, Polish-language
programming on a multi-channel basis and other services on cable (i.e. data and
telephones). As such, the Company's current focus is on its cable television
market. The Company's business strategy is designed to increase its average
revenue per subscriber and also, although to a lesser extent, to increase its
subscriber base. The Company intends to achieve these goals by increasing
penetration of new service products within existing upgraded homes; providing
additional revenue-generating services to existing customers, including Internet
services; developing content tailored to the interests of existing subscribers;
and improving the effectiveness of the Company's sales and marketing efforts.

    The Company also intends to increase the effectiveness of its operations and
reduce its expenses by enhancing internal controls; improving corporate
decision-making processes; reorganizing the Company so as to simplify its legal
structure; and using local rather than expatriate employees in management,
thereby reducing general and administrative costs.

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

4.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

    The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
("U.S. GAAP").

    The Company maintains its books of accounts in Poland and the Netherlands in
accordance with accounting standards in the respective countries. These
financial statements include all adjustments to the Company's statutory books to
present these statements in accordance with U.S. GAAP.

    The consolidated financial statements include the financial statements of
PCBV and its wholly owned and majority owned subsidiaries. The Company has
consolidated its 46.8% owned subsidiary for which the Company maintains control
of operating activities and has the ability to influence the appointment of
members to the Managing Board. All significant intercompany balances and
transactions have been eliminated in consolidation.

                                       71
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of cash and other short-term investments
with original maturities of three months or less.

USE OF ESTIMATES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the amounts of revenues and expenses during the
reporting period. Our actual results could differ from those estimates, which
include, but are not limited to: allowance for doubtful accounts, impairment
charges of long lived assets, equity investment and revenue recognition.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

    The allowance for doubtful accounts is based upon the Company's assessment
of probable loss related to overdue accounts receivable. Upon disconnection of
the subscriber, the account is fully reserved. The allowance is maintained on
the books either until receipt of payment, or until the account is deemed
uncollectable for a maximum of three years.

REVENUE RECOGNITION

    Revenue related to the provision of cable television and internet services
to customers are recognized in the period in which the related services are
provided in accordance with SAB 101 REVENUE RECOGNITION IN FINANCIAL STATEMENTS
and SFAS 51 FINANCIAL REPORTING BY CABLE TELEVISION COMPANIES.

CABLE TELEVISION REVENUE:

    Cable television revenues are recognized in accordance with SFAS 51
FINANCIAL REPORTING BY CABLE TELEVISION COMPANIES. Revenue from subscription
fees is recognized on a monthly basis as the service is provided. Installation
fee revenue, for connection to the Company's cable system, is recognized to the
extent of direct selling costs and the balance is deferred and amortized into
income over the estimated average period that new subscribers are expected to
remain connected to the systems.

INTERNET SERVICE REVENUES:

    During the fourth quarter of 2000, the Company began providing Internet
services to its cable television customers. Revenue from subscription is
recognized on a monthly basis as the service is provided. Installation fee
revenue is deferred and amortized to income over the estimated average period
that new subscribers are expected to remain connected to the system in
accordance with SAB 101 REVENUE RECOGNITION IN FINANCIAL STATEMENTS.

TAXATION

    Income taxes are accounted for under the asset and liability method in
accordance with SFAS 109, "Accounting for Income Taxes". Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.

                                       72
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    NETHERLANDS TAXATION

    The income tax treaty currently in force between the Netherlands and the
United States provides that the Netherlands may impose a withholding tax at a
maximum rate of 5% on dividends paid by PCBV to its stockholders.

    FOREIGN TAXATION

    Polish companies are subject to corporate income taxes, value added tax
(VAT) and various local taxes within Poland, as well as import duties on
materials imported by them into Poland.

    Income tax for other foreign companies is calculated in accordance with
Polish tax regulations. Due to differences between accounting practices under
Polish tax regulations and those required by U.S. GAAP, certain income and
expense items are recognized in different periods for financial reporting
purposes and income tax reporting purposes which may result in deferred income
tax assets and liabilities. Effective January 1998, the Company adopted EITF
92-8 "Accounting for the Income Tax Effects under FASB Statement No. 109 of a
Change in Functional Currency When an Economy Ceases to Be Considered Highly
Inflationary". As a result of adopting EITF 92-4, "Accounting for a Change in
Functional Currency When the Economy Ceases to Be Considered Highly
Inflationary", the Company's functional currency bases exceeded the local
currency tax bases of non-monetary items. The difference between the new
functional currency and the tax bases have been recognized as temporary
differences in accordance with EITF 92-8.

PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment includes assets used in the development and
operation of the various cable television systems. During the period of
construction, plant costs and a portion of design, development and related
overhead costs are capitalized as a component of the Company's investment in
cable television systems. When material, the Company capitalizes interest costs
incurred during construction in accordance with SFAS No. 34, "Capitalization of
Interest Cost". Interest is not capitalized for short-term construction
projects. During the years ended December 31, 2001, 2000, and for the five
months of 1999 and seven months of 1999, no interest costs were capitalized.

    Cable subscriber related costs and general and administrative expenses are
charged to operations when incurred.

    Depreciation is computed for financial reporting purposes using the
straight-line method over the following estimated useful lives:

<Table>
<S>                                                           <C>
Cable system assets.........................................  10 years
Set-top boxes...............................................  5 years
Vehicles....................................................  5 years
Other property, plant and equipment.........................  5-10 years
</Table>

INVENTORIES FOR CONSTRUCTION

    Inventories for construction are stated at the lower of cost, determined by
the average cost method, or net realizable value. Inventories are principally
related to cable systems. Cost of inventories include purchase price,
transportation, customs and other direct costs.

                                       73
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

GOODWILL AND OTHER INTANGIBLES

    Prior to the merger, goodwill, which represents the excess of purchase price
over fair value of net assets acquired, was amortized on a straight-line basis
over the expected periods to be benefited, generally ten years, with the
exception of amounts paid relating to non-compete agreements. The portion of the
purchase price relating to non-compete agreements was amortized over the term of
the underlying agreements, generally five years.

    Effective as of the Merger Date (August 6, 1999), the Company revalued all
its previously existing goodwill including amounts related to non-compete
agreements, that related to transactions completed prior to the Merger. The
goodwill that was pushed down to the Company is amortized using straight-line
basis over the expected periods to be benefited, which is fifteen years.

    Through its subsidiaries, the Company has entered into lease agreements with
the Polish national telephone company ("TPSA"), for the use of underground
telephone conduits for cable wiring. Costs related to obtaining conduit and
franchise agreements with housing cooperatives and governmental authorities are
capitalized generally over a period of ten years. In the event the Company does
not proceed to develop cable systems within designated cities, costs previously
capitalized will be charged to expense.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations,"
("SFAS 141"), which is required to be adopted July 1, 2001. SFAS 141 requires
the purchase method of accounting for all business combinations initiated after
June 30, 2001. The Company has applied SFAS 141 to its only applicable
transaction, the purchase of a minority interest in PCBV in August 28, 2001.

INVESTMENT IN AND ADVANCES TO AFFILIATED COMPANIES, ACCOUNTED FOR UNDER THE
  EQUITY METHOD

    For those investments in companies in which the Company's ownership interest
is 20% to 50%, its 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, or
in which majority control is deemed to be temporary, 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 affiliates, limited to the extent of the Company's investment
in and advances to the affiliates, including any debt guarantees or other
contractual 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 or
the excess of its proportionate interest in each affiliate's net tangible assets
in excess of its cost.

MINORITY INTEREST

    Recognition of the minority interests' share of losses of consolidated
subsidiaries is limited to the amount of such minority interests' allocable
portion of the equity of those consolidated subsidiaries.

STOCK-BASED COMPENSATION

    The Company has adopted SFAS No. 123, "ACCOUNTING FOR STOCK-BASED
COMPENSATION", which gives companies the option to adopt the fair value based
method for expense recognition of employee stock options and other stock-based
awards or to account for such items using the intrinsic value method as outlined
under APB Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES", with pro

                                       74
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

forma disclosure of net loss and loss per share as if the fair value method had
been applied. The Company has elected to apply APB Opinion No. 25 and related
interpretations for stock options and other stock-based awards.

FOREIGN CURRENCIES

    Foreign currency transactions are recorded at the exchange rate prevailing
at the date of the transactions. Assets and liabilities denominated in foreign
currencies are translated at the rates of exchange at the consolidated balance
sheet date. Gains and losses on foreign currency transactions are included in
the consolidated statement of operations.

    The financial statements of foreign subsidiaries are translated into U.S.
dollars using (i) exchange rates in effect at period end for assets and
liabilities, and (ii) average exchange rates during the period for results of
operations. Adjustments resulting from translation of financial statements are
reflected in accumulated other comprehensive income as a separate component of
stockholders' equity.

    The Company considers all of its intercompany loans to its Polish
subsidiaries to be of a long-term investment nature. As a result, any foreign
exchange gains or losses resulting from the intercompany loans are reported in
accumulated other comprehensive loss.

    Effective January 1, 1998, Poland is no longer deemed to be a highly
inflationary economy. In accordance with this change, the Company established a
new functional currency bases for nonmonetary items in accordance with
guidelines established within EITF Issue 92-4, "ACCOUNTING FOR A CHANGE IN
FUNCTIONAL CURRENCY WHEN AN ECONOMY CEASES TO BE CONSIDERED HIGHLY
INFLATIONARY." That basis is computed by translating the historical reporting
currency amounts of non-monetary items into the local currency at current
exchange rates. As a result of this change, the Company's functional currency
bases exceeded the local currency tax bases of nonmonetary items. The difference
between the new functional currency and the tax bases have been recognized as
temporary differences.

    Prior to January 1, 1998 the financial statements of foreign subsidiaries
were translated into U.S. dollars using (i) exchange rates in effect at period
end for monetary assets and liabilities, (ii) exchange rates in effect at
transaction dates (historical rates) for non-monetary assets and liabilities,
and (iii) average exchange rates during the period for revenues and expenses,
other than those revenues and expenses that relate to non-monetary assets and
liabilities (primarily amortization of fixed assets and intangibles) which are
translated using the historical exchange rates applicable to those non-monetary
assets and liabilities. Adjustments resulting from translation of financial
statements prior to the year 1998 were reflected as foreign exchange gains or
losses in the consolidated statements of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    SFAS No. 107, "DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS"
requires the Company to make disclosures of fair value information of all
financial instruments, whether or not recognized on the consolidated balance
sheets, for which it is practicable to estimate fair value.

    The Company's financial instruments include cash and cash equivalents,
accounts receivable, accounts payable and accrued expenses and notes payable.

    At December 31, 2001 and 2000, the carrying value of cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses, and
other current liabilities on the accompanying consolidated balance sheets
approximates fair value due to the short maturity of these instruments.

                                       75
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

IMPAIRMENT OF LONG-LIVED ASSETS

    The Company assesses the recoverability of long-lived assets (mainly
property, plant and equipment, intangibles, and certain other assets) by
determining whether the carrying value of the assets can be recovered over the
remaining lives through projected undiscounted future operating cash flows,
expected to be generated by such assets. If an impairment in value is estimated
to have occurred, the assets carrying value is reduced to its estimated fair
value. The assessment of the recoverability of long-lived assets will be
impacted if estimated future operating cash flows are not achieved. As
identified in Note 3, the Company's existing liquidity problems may result in
future impairments of long-lived assets if the Company does not have adequate
financing available to execute its business strategy. Additionally, if the
Company's plans or assumptions change, if its assumptions prove inaccurate, if
it consummates unanticipated investments in or acquisitions of other companies,
if it experiences unexpected costs or competitive pressures, of if existing
cash, and projected cash flow from operations prove to be insufficient, the
Company may need to impair certain of its long-lived assets. In connection with
its adoption of the New Accounting Principle, SFAS 144 discussed under "New
Accounting Principles", the Company is aware that the adoption could result in
material adjustments to its long-lived assets and its Statement of Operations
during 2002.

BUSINESS SEGMENT INFORMATION

    The Company operates in one business segment, providing cable television and
Internet services.

COMMITMENTS AND CONTINGENCIES

    Liabilities for loss contingencies arising from claims, assessments,
litigation, fines and penalties, and other sources are recorded when it is
probable that a liability has been incurred and the amount of the assessment can
be reasonably estimated.

ADVERTISING COSTS

    All advertising costs of the Company are expensed as incurred. For the years
ended December 31, 2001 and 2000 and for the five months and seven months of
1999, the Company incurred advertising costs of approximately $1,507,000,
$1,966,000, $573,000 and $263,000, respectively.

SUPPLEMENTED DISCLOSURE OF CASH FLOW INFORMATION

<Table>
<Caption>
                                                           SUCCESSOR                       PREDECESSOR
                                         ---------------------------------------------   ---------------
                                                                          PERIOD FROM      PERIOD FROM
                                                                           AUGUST 6,       JANUARY 1,
                                          YEAR ENDED      YEAR ENDED     1999 THROUGH     1999 THROUGH
                                         DECEMBER 31,    DECEMBER 31,    DECEMBER 31,       AUGUST 5,
                                             2001            2000            1999             1999
                                         -------------   -------------   -------------   ---------------
                                                                 (IN THOUSANDS)
<S>                                      <C>             <C>             <C>             <C>
Supplemental cash flow information:
  Cash paid for interest...............   $       59      $    1,432      $       --       $      400
  Cash paid for income taxes...........           56              76              12               17
Non cash items:
  Increase in paid in capital for
    purchase of PCBV minority shares...       21,219              --              --               --
</Table>

                                       76
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

RECLASSIFICATIONS

    Certain amounts have been reclassified in the prior years consolidated
financial statements to conform to the presentation contained in the 2001.

NEW ACCOUNTING PRINCIPLES

ADOPTED

    Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (SFAS) No.133, "Accounting for Derivative and Hedging
Activities", which establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. All derivatives, whether designated in
hedging relationships or not, are required to be recorded on the balance sheet
at fair value. The adoption of SFAS 133 did not have a material impact on the
Company's financial position, as it does not have any derivative instruments.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations,"
("SFAS 141"), which is required to be adopted July 1, 2001. SFAS 141 requires
the purchase method of accounting for all business combinations initiated after
June 30, 2001. The Company has applied SFAS 141 to a transaction by its
affiliate, the purchase of the minority interest in August 28, 2001.

TO BE ADOPTED

    In July 2001, the Financial Accounting Standards Board issued SFAS No. 142,
"Goodwill and Other Intangible Assets", ("SFAS 142"), which requires goodwill
and intangible assets with indefinite useful lives to no longer be amortized,
but to be tested for impairment at least annually. Intangible assets that have
finite lives will continue to be amortized over their estimated useful lives.
The amortization and non-amortization provisions of SFAS 142 will be applied to
all goodwill and intangible assets acquired after June 30, 2001. Effective
January 1, 2002, we are required to apply all other provisions of SFAS 142. We
are currently evaluating the potential impact, if any, the adoption of SFAS 142
will have on our financial position and results of operations.

    In August 2001, the Financial Accounting Standards Board issued SFAS
No. 143, "Accounting for Asset Retirement Obligations", ("SFAS 143"). This
statement addresses the financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. SFAS No. 143 requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset and reported as a liability. This statement is effective for
fiscal years beginning after June 15, 2002. The adoption of SFAS No. 143 is not
anticipated to have a material impact on our financial position or results of
operations.

    In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets",
("SFAS 144"), which is effective for fiscal periods beginning after
December 15, 2001 and interim periods within those fiscal years. SFAS 144
establishes an accounting model for impairment or disposal of long-lived assets
to be disposed. We are currently evaluating the potential impact, if any, the
adoption of SFAS 144 will have on our financial position and results of
operation. We expect that we will have our SFAS 144 evaluation completed during
the fourth quarter of 2002. At this point, management is aware that the adoption
of SFAS 144 could result

                                       77
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

in material adjustments to its long-lived assets and its statement of operations
during 2002. See note 7 and 8 for further discussion of the Company's long-lived
assets which total $438.2 million, including intangible assets of
$325.0 million, which could be impacted as a result of the adoption of
SFAS 144.

5.  VALUATION AND QUALIFYING ACCOUNTS

<Table>
<Caption>
                                                              BALANCE AT THE    ADDITIONS                   BALANCE AT
                                                               BEGINNING OF    CHARGED TO      AMOUNTS      THE END OF
                                                                THE PERIOD       EXPENSE     WRITTEN OFF    THE PERIOD
                                                              --------------   -----------   ------------   ----------
                                                                                   (IN THOUSANDS)
<S>                     <C>                                   <C>              <C>           <C>            <C>
SEVEN MONTHS OF 1999    Allowance for Doubtful Accounts.....      $  708         $  213         $  162        $  759
FIVE MONTHS OF 1999     Allowance for Doubtful Accounts.....      $  759         $1,287         $  478        $1,568
      2000              Allowance for Doubtful Accounts.....      $1,568         $3,468         $  644        $4,392
      2001              Allowance for Doubtful Accounts.....      $4,392         $3,698         $5,357        $2,733
</Table>

6.  ACQUISITIONS

    During 2001 and 2000, and for the five months of 1999 and seven months of
1999, the Company did not acquire any businesses.

7.  PROPERTY, PLANT AND EQUIPMENT

<Table>
<Caption>
                                                               SUCCESSOR
                                                      ---------------------------
                                                      DECEMBER 31,   DECEMBER 31,
                                                          2001           2000
                                                      ------------   ------------
                                                            (IN THOUSANDS)
<S>                                                   <C>            <C>
Property, plant and equipment:
  Cable system assets...............................    $134,870       $117,307
  Construction in progress..........................         774          6,050
  Vehicles..........................................       1,435            473
  Office, furniture and equipment...................      10,907          9,316
  Other.............................................       8,520          2,651
                                                        --------       --------
                                                         156,506        135,797
  Less accumulated depreciation.....................     (43,307)       (22,412)
                                                        --------       --------
      Net property, plant and equipment.............    $113,199       $113,385
                                                        ========       ========
</Table>

    The Company incurred depreciation charges for tangible fixed assets of
$20,880,000, $16,023,000, $5,846,000, and $7,416,000 for the years ended
December 31, 2001, and 2000, and for the five months of 1999 and seven months of
1999, respectively.

                                       78
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

8.  INTANGIBLES

    Intangible assets are carried at cost and consist of the following:

<Table>
<Caption>
                                                               SUCCESSOR
                                                      ---------------------------
                                                      DECEMBER 31,   DECEMBER 31,
                                                          2001           2000
                                                      ------------   ------------
                                                            (IN THOUSANDS)
<S>                                                   <C>            <C>
Conduit, franchise agreements and other.............    $  8,928       $  7,323
Goodwill............................................     379,274        343,408
                                                        --------       --------
                                                         388,202        350,731
Less accumulated amortization.......................     (63,175)       (34,808)
                                                        --------       --------
Net intangible assets...............................    $325,027       $315,923
                                                        ========       ========
</Table>

    The Acquisition was accounted for under the purchase method of accounting,
with all of the purchase accounting adjustments "pushed-down" to the
consolidated financial statements of UPC Polska. Accordingly, the purchase price
was allocated to the underlying assets and liabilities based upon their
estimated fair values and any excess to goodwill. UPC Polska restated some of
its assets and liabilities at August 5, 1999. At this date the notes of UPC
Polska and the Company were restated by $61.9 million and deferred financing
costs of $16.1 million and deferred revenues of $2.0 million were written down
to zero. The consideration paid by UPC for all shares outstanding, warrants and
options totaled $812.5 million. At this time UPC Polska had negative net assets
of approximately $53.3 million and existing goodwill at net book value of
$37.5 million which was realized on previous transaction.

    As a result of the above considerations, UPC realized goodwill of
approximately $979.3 million for the year ended December 31, 1999. As a result
of the Acquisition, UPC pushed down its basis to UPC Polska establishing a new
basis of accounting as of the acquisition date. During the year ended
December 31, 2000 this figure increased by $12.3 million to $991.6 million
mainly due to the results of an arbitration between the Company and Telewizyjna
Korporacja Partycypacyjna ("TKP"). UPC Polska allocated goodwill between the
business segments based on the investment model used for acquisition. The
Company was allocated approximately $354.0 million of goodwill. The Company
incurred amortization charge for intangible assets of $26,739,000, $24,488,000,
$8,635,000, and $1,310,000, for the years ended December 31, 2001 and 2000, and
the five and seven months of 1999, respectively.

                                       79
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

9.  INCOME TAXES

    PCBV is required to file a separate Netherlands tax return which does not
include the operating results of the PTK Companies. Income tax expense consisted
of the following:

    Income tax (expense)/benefit consists of:

<Table>
<Caption>
                                                      CURRENT    DEFERRED    TOTAL
                                                      --------   --------   --------
                                                              (IN THOUSANDS)
<S>                                                   <C>        <C>        <C>
Year ended December 31, 2001:
  U.S. Federal......................................   $  --       $ --      $  --
  State and local...................................      --         --         --
  Foreign...........................................    (190)        --       (190)
                                                       -----       ----      -----
                                                       $(190)      $ --      $(190)
                                                       =====       ====      =====
Year ended December 31, 2000:
  U.S. Federal......................................   $  --       $ --      $  --
  State and local...................................      --         --         --
  Foreign...........................................     (76)        --        (76)
                                                       -----       ----      -----
                                                       $ (76)      $ --      $ (76)
                                                       =====       ====      =====
Five months of 1999
  U.S. Federal......................................   $  --       $ --      $  --
  State and local...................................      --         --         --
  Foreign...........................................      (9)        --         (9)
                                                       -----       ----      -----
                                                       $  (9)      $ --      $  (9)
                                                       =====       ====      =====
Seven months of 1999
  U.S. Federal......................................   $  --       $ --      $  --
  State and local...................................      --         --         --
  Foreign...........................................     (30)        --        (30)
                                                       -----       ----      -----
                                                       $ (30)      $ --      $ (30)
                                                       =====       ====      =====
</Table>

                                       80
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    Income tax expense was $190,000, $76,000, $9,000 and $30,000 for the years
ended December 31, 2001 and 2000, and five and the seven months of 1999,
respectively, and differed from the amounts computed by applying the U.S.
federal income tax rate of 34 percent to pretax loss as a result of the
following:

<Table>
<Caption>
                                                                        SUCCESSOR           PREDECESSOR
                                                                 ------------------------   -----------
                                                   YEAR ENDED     YEAR ENDED      FIVE         SEVEN
                                                  DECEMBER 31,   DECEMBER 31,   MONTHS OF    MONTHS OF
                                                      2001           2000         1999         1999
                                                  ------------   ------------   ---------   -----------
                                                                     (IN THOUSANDS)
<S>                                               <C>            <C>            <C>         <C>
Computed "expected" tax benefit.................    $ 21,881        $19,755      $10,960      $ 5,207
Non-deductible expenses.........................      (8,787)        (8,731)      (1,465)        (722)
Change in valuation allowance...................      (9,216)           751       (7,238)      (3,439)
Adjustment to deferred tax asset for enacted
  changes in tax rates..........................         (69)        (6,523)      (2,266)      (1,076)
Foreign tax rate differences....................      (3,861)        (2,324)          --           --
Expiration of NOL's.............................          --         (3,778)          --           --
Other...........................................        (138)           774           --           --
                                                    --------        -------      -------      -------
                                                    $   (190)       $   (76)     $    (9)     $   (30)
                                                    ========        =======      =======      =======
</Table>

    The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities are presented below:

<Table>
<Caption>
                                                             DECEMBER 31,
                                                          -------------------
                                                            2001       2000
                                                          --------   --------
                                                            (IN THOUSANDS)
<S>                                                       <C>        <C>
Deferred tax assets/(liabilities):
  Unrealized foreign exchange losses....................  $  3,032   $  2,900
  Accrued liabilities...................................     4,154      3,278
  Bad debt..............................................     2,177      1,054
  Other.................................................    (2,142)    (3,726)
  Tax loss carryforwards................................    23,439     17,938
                                                          --------   --------
Total gross deferred tax assets.........................    30,660     21,444
Less valuation allowance................................   (30,660)   (21,444)
                                                          --------   --------
Net deferred tax assets.................................  $     --   $     --
                                                          ========   ========
</Table>

    The net (increase)/decrease in the valuation allowance for the years ended
December 31, 2001 and 2000, and the five months and seven months of 1999 was
$(9,216,000), $751,000, $(7,238,000) and $(3,439,000), respectively. In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers
projected future taxable losses and tax planning strategies in making this
assessment. Based upon the level of historical taxable income and projections
for future taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not the Company will
realize the benefits of these deductible differences, net of the existing

                                       81
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

valuation allowances at December 31, 2001. As each of the Polish subsidiaries
and the Company are not subject to group taxation, current year operations and
net operating loss carryforwards may not be available for offset. As a result,
some of the Polish companies could be in a tax-paying situation, now or in the
future, despite the availability of net operating loss carryforwards available
in others.

    Subsequently recognized tax benefits relating to the valuation allowance for
deferred tax assets as of December 31, 2001 will be reported in the consolidated
statement of operations.

    Prior to 1999 foreign tax loss carryforwards can be offset against the
taxable income and utilized at a rate of one-third per year in each of the three
years subsequent to the year of the loss. Starting from 1999 foreign loss
carryforwards can be offset against taxable income and utilized during each of
the five years subsequent to the year of the loss with no more than 50% of the
loss in one given year. If there is no taxable income in a given year during the
carryforward period, the portion of the loss carryforward to be utilized is
permanently forfeited.

    At December 31, 2001, the UPC TK Companies had Polish net operating loss
carry forward of approximately $107,380,000, which will expire as follows:

<Table>
<Caption>
YEAR ENDED DECEMBER 31,                                        (IN THOUSAND)
-----------------------                                        -------------
<S>                                                            <C>
2002........................................................     $  5,936
2003........................................................       10,573
2004........................................................       37,800
2005........................................................       27,227
2006........................................................       25,844
                                                                 --------
                                                                 $107,380
                                                                 ========
</Table>

10. PER SHARE INFORMATION

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

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

<Table>
<Caption>

<S>                                        <C>          <C>          <C>           <C>
                                                         SUCCESSOR
                                           -------------------------------------   PREDECESSOR
                                           YEAR ENDED   YEAR ENDED                 ------------
                                           DECEMBER     DECEMBER     FIVE MONTHS   SEVEN MONTHS
                                              31,          31,          OF             OF
                                             2001         2000         1999           1999
                                           ----------   ----------   -----------   ------------
Net loss applicable to holders of common
  stock (in thousands)...................   $(64,379)    $(57,171)    $(32,246)      $(15,345)
                                            --------     --------     --------       --------
Weighted average number of common shares
  outstanding............................    200,000      200,000      200,000        200,000
                                            --------     --------     --------       --------
Basic weighted average number of common
  shares outstanding.....................    200,000      200,000      200,000        200,000
                                            ========     ========     ========       ========
Basic net loss per common share..........   $(321.90)    $(285.85)    $(161.23)      $ (76.73)
                                            ========     ========     ========       ========
</Table>

                                       82
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

11. RELATED PARTY TRANSACTIONS.

    During the ordinary course of business, the Company enters into transactions
with related parties. The principal related party transactions are described
below.

NOTES PAYABLE AND ACCRUED INTEREST TO PCI

    Amounts due to parent represent notes payable to PCI, advances and payments
made on behalf of the Company by its parent PCI. Notes payable to PCI of
$249,765,000 and $210,530,000 at December 31, 2001 and 2000, respectively,
consists of an unsecured demand note and unpaid interest due to PCI. The notes
between PCI and PCBV are revolving credit facilities which call for the borrower
to pay 10% interest, payable monthly, on the outstanding principal amount and
contain standard events of default for related-party indebtedness. All of these
notes expire on October 26, 2003. However, due to the Going Concern and
Liquidity Risks of PCI, UPC Polska and UPC discussed further in Note 3, under
the terms of these Notes, the Company may be required to repay these Notes prior
to their stated expiration. As a result, these amounts have been reflected as
current in the Company's December 31, 2001 Consolidated Balance Sheet.

    Interest expense of $17,469,000, $15,201,000, $5,900,000 and $8,029,000 was
incurred by the Company, primarily in connection with borrowings from PCI for
the years ended December 31, 2001 and 2000, and the five and seven months of
1999, respectively. Of this expense, $17,423,000, $15,201,000, $5,900,000 and
$8,029,000 has been added to the loan balance for the years ended December 31,
2001 and 2000, and the five months of 1999 and seven months of 1999,
respectively.

    Using the funds provided in the aforementioned notes between PCI and PCBV,
PCBV has entered into a series of 10% grid notes with certain of its
subsidiaries. PCBV's intercompany notes have been pledged for the benefit of
holders of the publicly-registered PCI notes.

    Pursuant to the PCI Indenture, PCBV is subject to certain restriction,
including, without limitation, restriction with respect to the following
matters: (i) limitation on additional indebtedness; (ii) limitation on
restricted payments; (iii) limitation on issuances and sales of capital stock of
subsidiaries; (iv) limitation on transactions with affiliates; (v) limitation on
liens; (vi) limitation on guarantees of indebtedness by subsidiaries;
(vii) purchase of PCI Notes upon a change of control; (viii) limitation on sale
of assets; (ix) limitation on dividends and other payment restrictions affecting
subsidiaries; (x) limitation on investments in unrestricted subsidiaries;
(xi) limitation on lines of business; and (xii) consolidations, mergers and
sales of assets.

    DUE TO PCI AND AFFILIATE

    Amounts due to affiliate of $66,612,000 and $22,864,000 at December 31, 2001
and 2000, respectively, are non-interest bearing and primarily represent amounts
owed to Wizja TV BV for Wizja programming and PCI.

    SERVICE AND OVERHEAD ALLOCATION AGREEMENTS

    PCI entered into service agreements with PCBV and other of its direct and
indirect subsidiaries pursuant to which PCI provides various services, including
administrative, technical, managerial, financial, operational and marketing
services to each of the subsidiaries and PCBV serves as PCI's agent. PCI also
entered into a service agreement, dated December 31, 1995, with PCBV and ETV,
whereby PCBV is the principal service provider and PCI acts as agent to PCBV.

                                       83
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    The Service Agreements also typically require the subsidiaries to reimburse
PCBV for any reasonable out-of-pocket expenses incurred by PCBV or PCI, acting
as agent for PCBV, including salaries and benefits, housing allowances, travel
expenses, and equipment supply or other goods costs. The agreements expired on
December 31, 1997, but were automatically extended for successive one-year
periods unless a party gives notice on or before January 31, in which case the
agreement will terminate at the end of the calendar year during which such
notice was provided.

    PCI entered into a Corporate Overhead Allocation Agreement dated January 1,
1996 (the "Allocation Agreement") with certain of its direct or indirect
subsidiaries, including PCBV. The Allocation Agreement provides that costs
incurred by PCI or PCBV, acting as PCI's agent, with regard to the Service
Agreements and as otherwise requested by the UPC TK Companies shall be allocated
and charged to particular UPC TK Companies in the event they are directly
attributable to such subsidiaries, and shall otherwise be allocated equally
among each of the UPC TK Companies. With regard to services rendered and costs
incurred by subsidiaries for the benefit of some or all of the UPC TK Companies,
which include costs associated with maintaining a central office in Warsaw,
legal expenses, expenses relating to governmental relationships and approvals,
programming services, accounting, management information systems services, and
salaries associated with personnel whose duties clearly benefit other UPC TK
Companies, the Allocation Agreement provides that such expenses shall be
allocated between the UPC TK Companies. The Allocation Agreement terminates on
December 31, 1997, but is automatically renewed for successive one-year periods
unless at least thirty days written notice of termination is provided by PCI or
PCBV or any subsidiary, with respect to itself.

    MANAGEMENT AGREEMENT

    The UPC TK Companies entered into management consulting agreements with PCI
to recommend, advise, and consult the UPC TK Companies as to design,
construction, development, and operation of the cable television systems. The
agreements typically provide that the subsidiary will pay to PCI an annual
consulting fee of $320,000 when and to the extent that the subsidiary's net
income exceeds zero. These contingent management consulting fees payable to PCI
are reflected in amounts "due to affiliate" in the accompanying consolidated
balance sheets. The management agreements also provide for an initial term
ending as of the end of the calendar year during which they became effective,
and provide for successive renewals for one-year periods unless the agreement is
terminated in writing with at least thirty days notice by either party. No
management consulting fees were charged to corporate administration expense for
the years ended December 31, 2001 and 2000 and for five and seven month periods
of 1999.

    PRINT MEDIA SERVICES

    An affiliate of the Company provides print media services to the Company.
The Company incurred operating costs related to those services of $0,
$2,523,000, $0, and $296,000 for the years ended December 31, 2001, and 2000,
and for the five months of 1999 and seven months of 1999, respectively. Included
in accounts payable at December 31, 2001 and 2000, 1999 and August 5, 1999, and
for the five and seven month period of 1999 is $0, $55,000, $0 and $1,114,000
due to this affiliate.

    PROGRAMMING

    Affiliates of PCI provide programming to the UPC TK Companies. The Company
incurred programming fees from these affiliates of $24,161,000, $23,361,000,
$9,588,000 and $12,729,000 for the

                                       84
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

years ended December 31, 2001, and 2000, and for the five months of 1999 and
seven months of 1999, respectively.

12. QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)

<Table>
<Caption>
                                                            OPERATING
                                                 REVENUES     LOSS      NET LOSS
                                                 --------   ---------   --------
<S>                                              <C>        <C>         <C>
2001
  First Quarter................................  $17,653    $(12,199)   $(15,581)
  Second Quarter...............................   19,092     (11,075)    (13,463)
  Third Quarter................................   17,546     (12,285)    (20,335)
  Fourth Quarter...............................   19,132     (14,586)    (15,000)

2000
  First Quarter................................  $15,924    $ (8,262)   $(12,130)
  Second Quarter...............................   16,185     (10,853)    (18,884)
  Third Quarter................................   16,152     (10,539)    (16,260)
  Fourth Quarter...............................   16,477     (13,792)     (9,897)
</Table>

13. COMMITMENTS AND CONTINGENCIES

LEASES

    Total rental expense associated with the operating leases mentioned below
for the years ended December 31, 2001 and 2000, and the five months of 1999 and
seven months of 1999 was $5,475,000, $2,968,000, $969,000 and $692,000,
respectively.

BUILDING LEASE

    The Company leases several offices and warehouses within Poland under
cancelable operating leases. The future minimum lease payments as of
December 31, 2001 is $243,000 in 2002, and there are no minimum payments in 2003
or later.

CONDUIT LEASES

    The Company also leases space within various telephone duct systems from
TPSA under cancelable operating leases. The TPSA leases expire at various times,
and a substantial portion of the Company's contracts with TPSA permit
termination by TPSA without penalty at any time either immediately upon the
occurrence of certain conditions or upon provision of three to six months notice
without cause. Refer to Note 14 for further detail.

    All of the agreements provide that TPSA is the manager of the telephone duct
system and will lease space within the ducts to the Company for installation of
cable and equipment for the cable television systems. The lease agreements
provide for monthly lease payments that are adjusted quarterly or annually,
except for the Gdansk lease agreement which provides for an annual adjustment
after the sixth year and then remains fixed through the tenth year of the lease.

                                       85
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    Minimum future lease commitments for the aforementioned conduit leases
relate to 2002 and 2003 only, as all leases are cancelable in accordance with
the aforementioned terms. The future minimum lease commitments related to these
conduit leases approximates $948,000 as of December 31, 2001.

PROGRAMMING COMMITMENTS

    The Company has entered into long-term programming agreements and agreements
for the purchase of certain exhibition or broadcast rights with a number of
third party and affiliated content providers for its cable systems. The
agreements have terms which range from one to twenty years and require that the
license fees be paid either at a fixed amount payable at the time of execution
or based upon a guaranteed minimum number of subscribers connected to the system
each month. At December 31, 2001, the Company had an aggregate minimum
commitment in relation to these agreements of approximately $132,217,000 over
the next seventeen years, approximating $22,211,000 in 2002, $19,804,000 in
2003, $16,812,000 in 2004, $13,406,000 in 2005 and $59,984,000 in 2006 and
thereafter.

REGULATORY APPROVALS

    The Company is in the process of obtaining permits from the Chairman of URT
for several of its cable television systems. If these permits are not obtained,
URT could impose penalties such as fines or in severe cases, revocation of all
permits held by an operator or the forfeiture of the operator's cable networks.
Management of the Company does not believe that these pending approvals result
in a significant risk to the Company.

DIVIDEND RESTRICTIONS

    The Company's Polish subsidiaries are only able to distribute dividends to
the extent of accounting profit determined in accordance with Polish accounting
principles. As of December 31, 2001 the Company's Polish subsidiaries have no
profit available for distribution as dividends.

LITIGATION AND CLAIMS

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

HBO LAWSUIT

    Two of the Company's subsidiaries, Telewizja Kablowa Gosat-Service Sp. z
o.o. and PTK S.A., and four unrelated Polish cable operators and HBO Polska Sp.
z o.o. ("HBO Polska") were made defendants in a lawsuit instituted by Polska
Korporacja Telewizyjna Sp. z o.o., an indirect partially-owned subsidiary of
Canal+. The lawsuit was filed in the Provincial Court in Warsaw, XX Economic
Division (Sad Wojewodzki w Warszawie, Wydzial XX Gospodarczy) (the "Court"). The
main defendant in the proceedings is HBO Polska which is accused of broadcasting
HBO television programming in Poland without a license from the Polish National
Radio and Television Council as required by the Polish Television Act and
thereby undertaking an activity constituting an act of unfair competition. The
plaintiff has asked the Court to order HBO Polska to cease broadcasting of its
programming in Poland until it has received a broadcasting license from the
Polish National Radio and Television Council, and

                                       86
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

that the defendant cable operators be ordered (i) to cease carrying the HBO
Polska programming on their cable networks in Poland until HBO Polska has
received a broadcasting license from the Polish National Radio and Television
Council, (ii) not to use their current filters for the purpose of unscrambling
the HBO Polska programming, and (iii) in the future, to use effective encoding
systems and systems of controlled access to the HBO Polska programming. The
Company does not believe that the lawsuit will have a material adverse effect on
its business operations.

PCBV MINORITY STOCKHOLDER'S CLAIM

    On or about July 8, 1999, certain minority shareholders ("the minority
shareholders") of the Company, filed a lawsuit against PCI and certain other
defendants, in United States District Court, Southern District of Ohio, Eastern
Division, Civil Action No. C2-99-621.

    The relief sought by the minority shareholders includes: (1) unspecified
damages in excess of $75,000, (2) an order lifting the restrictions against
transfer of shares set forth in the Shareholders' Agreement among PCBV's
shareholders, as amended (the "Shareholders' Agreement") so that the minority
shareholders can liquidate their shares in the Company, (3) damages in the
amount of 1.7 percent of the payment made by UPC for the shares of the Company
as set forth in the Agreement and Plan of Merger between UPC Polska and UPC
dated June 2, 1999, and (4) attorneys' fees and costs incurred in prosecuting
the lawsuit.

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

    On or about March 31, 2000 the parties to the lawsuit reached a settlement.
In accordance with the settlement, on June 2, 2000, Wizja TV B.V., an affiliate
of Company's Parent, purchased approximately 1.4% of the outstanding shares of
PCBV for a price of approximately $2.2 million. The case has been dismissed and
releases exchanged. The aforementioned settlement does not include the remaining
minority shareholders of PCBV.

    In addition to the Ohio lawsuit, other minority shareholders of the Company
(representing an additional approximately 6% of the shares of the Company,
hereinafter the "Reece Group") have asserted claims against the past and present
directors or officers of, or members of the Board of Managers of, PCI, the
Company and UPC Polska or one or more controlling shareholders of UPC Polska but
have not yet filed a lawsuit.

                                       87
<Page>
                     POLAND CABLEVISION (NETHERLANDS) B.V.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        DECEMBER 31, 2001, 2000 AND 1999

    The claims by the Reece Group consist of allegations previously made by
Reece Communications, Inc. ("RCI"). RCI's allegations were premised on, among
other things, alleged acts, errors, omissions, misstatements, misleading
statements or breaches of duty by the aforementioned officers, directors, or
controlling shareholders. UPC Polska's affiliate has negotiated a settlement of
those claims and a simultaneous purchase of the Reece Group's PCBV shares, as
well as the purchase of all other shares of PCBV held by other minority
shareholders and a settlement of their claims. On August 28, 2001, in exchange
for the release of claims and the transfer of all outstanding shares in PCBV
held by minority shareholders, UPC Polska and its affiliates paid in the
aggregate approximately $3.6 million in cash at closing and issued promissory
notes for $17.0 million. The Company has accounted for the $21.2 million as
goodwill in the accompanying consolidated financial statements in accordance
with SFAS 141. Accordingly, there has been no amortization recorded associated
with this goodwill.

14. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

USE OF TPSA CONDUIT

    The Company's ability to build out its existing cable television networks
and to integrate acquired systems into its cable television networks depends on,
among other things, the Company's continued ability to design and obtain access
to network routes, and to secure other construction resources, all at reasonable
costs and on satisfactory terms and conditions. Many of such factors are beyond
the control of the Company. In addition, at December 31, 2001, approximately
74.3% of the Company's cable plant had been constructed utilizing pre-existing
conduits of TPSA. A substantial portion of the Company's contracts with TPSA for
the use of such conduits permits termination by TPSA without penalty at any time
either immediately upon the occurrence of certain conditions or upon provision
of three to six months' notice without cause.

    In addition, some conduit agreements with TPSA provide that cables can be
installed in the conduit only for the use of cable television. If the Company
uses the cables for a purpose other than cable television, such as data
transmission, telephone, or Internet access, such use could be considered a
violation of the terms of certain conduit agreements, unless this use is
expressly authorized by TPSA. There is no guarantee that TPSA would give its
approval to permit other uses of the conduits. The Company is currently in the
process of introducing Internet services to its customers and renegotiating
certain conduit agreements with TPSA. As of December 31, 2001, the Company
believes that it was not in material violation under any of its existing conduit
agreements.

LIMITED INSURANCE COVERAGE

    While the Company carries general liability insurance on its properties,
like many other operators of cable television systems it does not insure the
underground portion of its cable televisions networks. Accordingly, any
catastrophe affecting a significant portion of the Company's cable television
networks could result in substantial uninsured losses and could have a material
adverse effect on the Company.

CREDIT WORTHINESS

    All of the Company's customers are located in Poland. As is typical in this
industry, no single customer accounted for more than five percent of the
Company's sales in 2001 or 2000. The Company estimates an allowance for doubtful
accounts based on the credit worthiness of its customers as well as general
economic conditions. Consequently, an adverse change in those factors could
effect the Company's estimate of its bad debts.

                                       88
<Page>
    ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                              FINANCIAL DISCLOSURE

    None.

                                    PART IV
   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

    (a) FINANCIAL STATEMENTS AND SCHEDULES

    The financial statements as set forth under Item 8 of this report on
Form 10-K are incorporated herein by reference. Financial statement schedules
have been omitted since they are either not required, not applicable, or the
information is otherwise included.

    (b) Reports on Form 8-K

    The Company did not file any Reports on Form 8-K during the quarter ended
December 31, 2001.

    (c) Exhibit Listing

       3(i) Restated Certificate of Incorporation of Poland
           Communications, Inc., dated March 8, 2002.

       3(ii) By-Laws of PCI as amended through March 1998. (Incorporated by
           reference to PCI's Form 10-K, filed March 30, 1999.)

       4.1 Indenture dated as at October 31, 1996 between PCI and State Street
           Bank and Trust Company relating to PCI's 9 7/8% Senior Notes due 2003
           and its 9 7/8% Series B Senior Notes due 2003 (Incorporated by
           reference to Exhibit 4.11 of PCI's Registration Statement on
           Form S-4, Registration No. 333-20307, filed January 24, 1997).

       10.4 Purchase Agreement dated October 24, 1996 between PCI and Merrill
           Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
           relating to $130,000,000 aggregate principal amount of PCI's 9 7/8%
           Senior Notes due 2003 (Incorporated by reference to Exhibit 1.1 of
           PCI's Registration Statement on Form S-4, Registration
           No. 333-20307, filed January 24, 1997).

       11.1 Statement re computation of per share earnings (contained in
           Note 11 to the Consolidated Financial Statements for Poland
           Communications, Inc. in this Annual Report on Form 10-K).

       11.2 Statement re computation of per share earnings (contained in
           Note 10 to the Consolidated Financial Statements for Poland
           Cablevision (Netherlands) B.V. in this Annual Report on Form 10-K).

       99  Letter re Auditor Representation

    No annual report or proxy material is being sent to security holders.

                                       89
<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.

<Table>
<S>                                                   <C>
                                                      POLAND COMMUNICATIONS, INC.

                                                                       /s/ SIMON BOYD
                                                      ------------------------------------------------
                                                                         Simon Boyd
                                                           PRESIDENT AND CHIEF EXECUTIVE OFFICER
</Table>

    In accordance with the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the dates stated.

<Table>
<Caption>
                   SIGNATURE                                      TITLE                      DATE
                   ---------                                      -----                      ----
<C>                                               <S>                                    <C>

                 /s/ SIMON BOYD                   President, Chief Executive Officer
     --------------------------------------         and Director (Principal Executive    April 3, 2002
                   Simon Boyd                       Officer)

              /s/ JOANNA NIECKARZ                 Chief Financial Officer (Principal
     --------------------------------------         Financial and Principal Accounting   April 3, 2002
                Joanna Nieckarz                     Officer) and Director

               /s/ ANTON TUIJTEN
     --------------------------------------       Vice President and General Counsel     April 3, 2002
                 Anton Tuijten                      Director

          /s/ WALTER EUGENE MUSSELMAN
     --------------------------------------       Director                               April 3, 2002
            Walter Eugene Musselman

              /s/ NIMROD J. KOVACS
     --------------------------------------       Director                               April 3, 2002
                Nimrod J. Kovacs
</Table>

                                       90