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

                                    FORM 10-Q

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

                       For the quarter ended June 30, 2000

                                       or

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

               For the transition period from _______ to_________

                          Commission File No. 333-05017

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

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

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

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







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


The Company has no publicly-traded shares of capital stock. As of August 8, 2000
the Company had 17,810,299 shares of common stock outstanding.



<PAGE>

<TABLE>
<CAPTION>
                                            United Australia/Pacific, Inc.
                                                  TABLE OF CONTENTS



                                                                                                                 Page
                                                                                                                Number
                                                                                                                ------

                                           PART I - FINANCIAL INFORMATION
                                           ------------------------------

<S>                                                                                                               <C>
Item 1 - Financial Statements
------

     Condensed Consolidated Balance Sheets as of June 30, 2000 (Unaudited) and December 31, 1999..............     2

     Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2000
         and 1999 (Unaudited).................................................................................     3

     Condensed Consolidated Statement of Stockholders' Deficit for the Six Months Ended June 30, 2000
         (Unaudited)..........................................................................................     4

     Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2000 and
         1999 (Unaudited)....................................................................................      5

     Notes to Condensed Consolidated Financial Statements (Unaudited)........................................      6


Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations...............     15
------

Item 3 - Quantitative and Qualitative Disclosure about Market Risk...........................................     21
------




                                              PART II - OTHER INFORMATION
                                              ---------------------------


Item 6 - Exhibits and Reports on Form 8-K....................................................................     23
------
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                                               UNITED AUSTRALIA/PACIFIC, INC.
                                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Stated in thousands, except share and per share amounts)

                                                                                                            As of        As of
                                                                                                           June 30,    December 31,
                                                                                                             2000         1999
                                                                                                         -----------   ------------
ASSETS                                                                                                   (Unaudited)
<S>                                                                                                       <C>            <C>
Current assets:
  Cash and cash equivalents............................................................................   $  3,199       $  6,028
  Short-term liquid investments........................................................................    300,306        269,393
  Subscriber receivables, net..........................................................................      8,906          8,177
  Related party receivables............................................................................      2,601          1,645
  Other receivables....................................................................................     10,304          6,196
  Inventory............................................................................................      5,281         14,193
  Prepaids and other current assets....................................................................      3,426          5,146
                                                                                                          --------       --------
      Total current assets.............................................................................    334,023        310,778
Investments in and advances to affiliated companies, accounted for under the equity method, net........     85,448         28,546
Property, plant and equipment, net of accumulated depreciation of $266,678 and $261,891, respectively..    115,282        219,394
Goodwill and other intangible assets, net of accumulated amortization of $22,727 and $23,536,
  respectively.........................................................................................     55,503         91,346
Deferred financing costs, net of accumulated amortization of $5,381 and $4,427, respectively...........     12,807         16,377
Other non-current assets, net..........................................................................        158            150
                                                                                                          --------       --------
      Total assets.....................................................................................   $603,221       $666,591
                                                                                                          ========       ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable.....................................................................................   $  5,257       $ 16,463
  Accrued liabilities..................................................................................     28,463         32,151
  Construction payables................................................................................        121          4,370
  Current portion of due to parent.....................................................................     15,227         12,754
  Current portion of other long-term debt..............................................................        951          1,500
                                                                                                          --------       --------
      Total current liabilities........................................................................     50,019         67,238
Due to parent..........................................................................................      8,618          9,621
Senior discount notes..................................................................................    436,336        407,945
Other long-term debt...................................................................................    220,782        261,151
Deferred tax liability.................................................................................        137          1,014
Other long-term liabilities............................................................................        325            456
                                                                                                          --------       --------
      Total liabilities................................................................................    716,217        747,425
                                                                                                          --------       --------

Minority interests in subsidiaries.....................................................................    104,010         95,820
                                                                                                          --------       --------

Stockholders' deficit:
  Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding...........          -              -
  Common stock, $0.01 par value, 30,000,000 shares authorized, 17,810,299 shares issued and
    outstanding........................................................................................        178            178
  Additional paid-in capital...........................................................................    306,685        306,616
  Deferred compensation................................................................................    (16,614)       (19,859)
  Accumulated deficit..................................................................................   (464,575)      (440,649)
  Other cumulative comprehensive loss..................................................................    (42,680)       (22,940)
                                                                                                          --------       --------
      Total stockholders' deficit......................................................................   (217,006)      (176,654)
                                                                                                          --------       --------
      Total liabilities and stockholders' deficit......................................................   $603,221       $666,591
                                                                                                          ========       ========

              The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                                              2
<PAGE>
<TABLE>
<CAPTION>

                                               UNITED AUSTRALIA/PACIFIC, INC.
                                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Stated in thousands, except share and per share amounts)
                                                         (Unaudited)

                                                                                For the Three Months Ended  For the Six Months Ended
                                                                                           June 30,                 June 30,
                                                                                --------------------------  ------------------------
                                                                                    2000          1999         2000        1999
                                                                                -----------    -----------  ----------   -----------
<S>                                                                             <C>            <C>          <C>          <C>
Revenue.......................................................................  $   42,547     $   34,388   $   88,891   $   64,820
System operating expense, including related party expense of $620, $2,131,
  $1,220 and $3,524, respectively.............................................     (33,542)       (24,212)     (69,159)     (47,445)
System selling, general and administrative expense............................     (15,487)       (11,688)     (30,263)     (22,341)
Corporate general and administrative expense, including management fees
  and allocated expense from related party of $249, $18,640, $485 and
  $19,648, respectively.......................................................      (2,558)       (18,748)      (5,277)     (19,777)
Depreciation and amortization.................................................     (24,770)       (25,482)     (54,797)     (49,943)
                                                                                ----------     ----------   ----------   ----------
      Operating loss..........................................................     (33,810)       (45,742)     (70,605)     (74,686)

Gain on issuance of common equity securities by subsidiary....................           -         22,298       61,172       22,298
Interest income...............................................................       5,100             34        8,248           67
Interest expense..............................................................     (19,670)       (18,115)     (38,969)     (33,037)
Other expense, net............................................................      (2,178)        (5,436)      (2,360)      (5,766)
                                                                                ----------     ----------   ----------   ----------
      Loss before income taxes and other items................................     (50,558)       (46,961)     (42,514)     (91,124)

Income tax benefit............................................................         816              -          741            -
Minority interests in subsidiaries............................................      14,154              -       26,213            -
Share in results of affiliated companies, net.................................      (7,785)        (5,308)      (8,366)      (8,680)
                                                                                ----------     ----------   ----------   ----------
      Net loss................................................................  $  (43,373)    $  (52,269)  $  (23,926)  $  (99,804)
                                                                                ==========     ==========   ==========   ==========

Foreign currency translation adjustments......................................  $   (4,500)    $    2,122   $  (19,740)  $    3,380
                                                                                ----------     ----------   ----------   ----------
      Comprehensive loss......................................................  $  (47,873)    $  (50,147)  $  (43,666)  $  (96,424)
                                                                                ==========     ==========   ==========   ==========

Net loss per common share:
      Basic and diluted net loss..............................................  $    (2.44)    $    (2.93)  $    (1.34)  $    (5.60)
                                                                                ==========     ==========   ==========   ==========

Weighted-average number of common shares outstanding:
      Basic and diluted.......................................................  17,810,299     17,810,249   17,810,299   17,810,249
                                                                                ==========     ==========   ==========   ==========

              The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                                              3
<PAGE>
<TABLE>
<CAPTION>

                                               UNITED AUSTRALIA/PACIFIC, INC.
                                CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                       (Stated in thousands, except share amounts)


                                                                                                            Other
                                             Common Stock       Additional                                Cumulative
                                         --------------------    Paid-In      Deferred     Accumulated   Comprehensive
                                           Shares      Amount    Capital    Compensation     Deficit        Loss(1)        Total
                                         ----------  --------   ----------  ------------   -----------   -------------   ---------
<S>                                      <C>           <C>       <C>          <C>           <C>            <C>           <C>
Balances, December 31, 1999............. 17,810,299    $178      $306,616     $(19,859)     $(440,649)     $(22,940)     $(176,654)

Cash contributions from parent..........          -       -            69            -              -             -             69

Amortization of deferred compensation...          -       -             -        3,245              -             -          3,245

Net income..............................          -       -             -            -        (23,926)            -        (23,926)

Change in cumulative translation
  adjustments...........................          -       -             -            -              -       (19,740)       (19,740)

                                         ==========    ====      ========     ========      =========      ========      =========
Balances, June 30, 2000 (Unaudited)..... 17,810,299    $178      $306,685     $(16,614)     $(464,575)     $(42,680)     $(217,006)
                                         ==========    ====      ========     ========      =========      ========      =========

(1)  As of June 30, 2000, Other Cumulative Comprehensive Loss represents foreign currency translation adjustments only.


              The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                                              4

<PAGE>
<TABLE>
<CAPTION>

                                               UNITED AUSTRALIA/PACIFIC, INC.
                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (Stated in thousands)
                                                        (Unaudited)

                                                                                                     For the Six Months Ended
                                                                                                             June 30,
                                                                                                  --------------------------------
                                                                                                      2000               1999
                                                                                                  ------------       -------------
<S>                                                                                               <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................................................................  $  (23,926)          $(99,804)
Adjustments to reconcile net loss to net cash flows from operating activities:
  Gain on issuance of common equity securities by subsidiary....................................     (61,172)           (22,298)
  Share in results of affiliated companies, net.................................................       4,384              2,993
  Minority interests in subsidiaries............................................................     (26,213)                 -
  Depreciation and amortization.................................................................      54,797             49,943
  Allocation of expense accounted for as capital contributions by parent........................           -              1,568
  Stock-based compensation expense..............................................................       4,718             17,630
  Accretion of interest on senior notes and amortization of deferred financing costs............      30,291             27,734
  (Increase) decrease in receivables, net.......................................................      (4,228)                65
  (Increase) decrease in other assets...........................................................      (4,712)             3,347
  Increase (decrease) in accounts payable, accrued liabilities and other........................       1,911             (2,269)
                                                                                                  ----------           --------
Net cash flows from operating activities........................................................     (24,150)           (21,091)
                                                                                                  ----------           --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term liquid investments.......................................................  (1,043,474)            (1,066)
Sale of short-term liquid investments...........................................................     987,258              1,060
Investments in and advances to affiliated companies and acquisition of assets...................      (4,862)            (5,177)
New acquisitions, net of cash acquired..........................................................      (3,684)                 -
Dividend received from affiliate................................................................       3,197                  -
Capital expenditures............................................................................     (53,942)           (46,797)
Deconsolidation of New Zealand subsidiary.......................................................         (52)                 -
Other...........................................................................................      (4,618)              (829)
                                                                                                  ----------           --------
Net cash flows from investing activities........................................................    (120,177)           (52,809)
                                                                                                  ----------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contributed from parent....................................................................          69             29,403
Proceeds from issuance of common equity securities by subsidiary................................     102,403                  -
Borrowings on the Austar Bank Facility..........................................................           -             19,372
Borrowings on the New Austar Bank Facility......................................................      38,848            162,081
Payment of the Austar Bank Facility.............................................................           -           (129,149)
Payment on capital leases and other debt........................................................           -               (281)
Deferred financing costs and other..............................................................         695             (7,937)
                                                                                                  ----------           --------
Net cash flows from financing activities........................................................     142,015             73,489
                                                                                                  ----------           --------

EFFECT OF EXCHANGE RATES ON CASH................................................................        (517)               368
                                                                                                  ----------           --------
DECREASE IN CASH AND CASH EQUIVALENTS...........................................................      (2,829)               (43)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..................................................       6,028                181
                                                                                                  ----------           --------
CASH AND CASH EQUIVALENTS, END OF PERIOD........................................................  $    3,199           $    138
                                                                                                  ==========           ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest..........................................................................  $    7,733           $  7,265
                                                                                                  ===========          ========
Cash received for interest......................................................................  $   10,323           $     10
                                                                                                  ==========           ========
DECONSOLIDATION OF NEW ZEALAND SUBSIDIARY:
Working capital.................................................................................  $   (7,319)          $      -
Property, plant and equipment...................................................................      93,202                  -
Recording of investment in Saturn...............................................................     (62,857)                 -
Goodwill and other assets.......................................................................      35,451                  -
Notes payable and other debt....................................................................     (58,529)                 -
                                                                                                  ----------           --------
Total cash relinquished.........................................................................  $      (52)          $      -
                                                                                                  ==========           ========

              The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                                              5

<PAGE>                     UNITED AUSTRALIA/PACIFIC, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF JUNE 30, 2000
                                   (Unaudited)

1.   ORGANIZATION AND NATURE OF OPERATIONS

United Australia/Pacific, Inc. (the "Company" or "United A/P"), a majority-owned
subsidiary of United Asia/Pacific Communications, Inc. ("UAP"), which is in turn
an indirect  wholly-owned  subsidiary of UnitedGlobalCom,  Inc. ("United"),  was
formed on October  14,  1994,  for the  purpose  of  developing,  acquiring  and
managing foreign multi-channel television, programming and telephone operations.
The following chart presents a summary of the Company's  ownership structure and
its significant investments in telecommunications as of June 30, 2000.

          ***********************************************************
          *                                                         *
          *                         United                          *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *      United International Properties, Inc. ("UIPI")     *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                           UAP                           *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                      The Company                        *
          *                                                         *
          ***********************************************************
                                       *
                              91.7%    *
          ***********************************************************
          *                                                         *
          *                 United Austar, Inc. (1)                 *
          *                                                         *
          ***********************************************************
                                       *
                              72.3%    *
          ***********************************************************
          *          Austar United Communications Limited           *
          *                    ("Austar United")                    *
          *                                                         *
          ***********************************************************
                                       *
                                       *
          ***********************************************************
          *                                                         *
          *Australia:                                               *
          * Austar Entertainment Pty Limited ("Austar")   100.0%    *
          * Austar United Broadband Pty Limited ("AUB")   100.0% (2)*
          * XYZ Entertainment Pty Limited ("XYZ                     *
          *  Entertainment")                               50.0%    *
          *New Zealand:                                             *
          * Telstra Saturn Limited ("TSL")                 50.0% (3)*
          *                                                         *
          ***********************************************************

          (1)  United  Austar,  Inc.  is a  holding  company  for  United  A/P's
               investment in Austar United Communications Limited.
          (2)  On August 11,  1999,  AUB, a  wholly-owned  subsidiary  of Austar
               United,  was formed to provide broadband Internet access services
               to the Australian market.
          (3)  On April 6, 2000, Saturn Communications Limited ("Saturn") merged
               with Telstra New Zealand  Limited  ("Telstra NZ"), a wholly-owned
               subsidiary of Telstra Corporation Limited ("Telstra").

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles in the United States ("U.S. GAAP") requires management to

                                       6
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

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

All significant  intercompany  accounts and transactions have been eliminated in
consolidation.

CASH AND CASH EQUIVALENTS AND SHORT-TERM LIQUID INVESTMENTS

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

INVENTORIES

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

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

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

PROPERTY, PLANT AND EQUIPMENT

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

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

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

                                       7
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

GOODWILL AND OTHER INTANGIBLE ASSETS

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

RECOVERABILITY AMOUNTS OF TANGIBLE AND INTANGIBLE ASSETS

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

DEFERRED FINANCING COSTS

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

REVENUE RECOGNITION

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

STOCK-BASED COMPENSATION

Stock-based  compensation is recognized using the intrinsic value method for the
Austar United stock option plan,  which results in compensation  expense for the
difference  between the grant price and the fair market value of Austar United's
common stock at each new measurement  date for options granted prior to July 27,
1999.  With  respect to this plan,  the rights  conveyed  to  employees  are the
substantive equivalents to stock appreciation rights.

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

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

BASIC AND DILUTED NET LOSS PER SHARE

"Basic net loss per share" is  determined  by  dividing  net loss  available  to
common stockholders by the weighted-average  number of common shares outstanding
during  each  period.  "Diluted  net loss per  share"  includes  the  effects of
potentially issuable common stock, but only if dilutive.

FOREIGN OPERATIONS AND FOREIGN EXCHANGE RATE RISK

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

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

                                       8
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

NEW ACCOUNTING PRINCIPLES

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

In December  1999,  the SEC staff  issued  Staff  Accounting  Bulletin  No. 101,
"Revenue  Recognition" ("SAB 101") which provides  interpretive  guidance on the
recognition, presentation and disclosure of revenue in financial statements. The
Company is required to determine  the impact of SAB 101 no later than the end of
the fourth quarter of fiscal 2000.  Depending on the results of the  evaluation,
the  implementation  of SAB 101 may  require  the Company to restate its current
year results to reflect any cumulative effect of change in accounting  principal
as if SAB 101 had been  implemented on January 1, 2000. The Company is currently
reviewing SAB 101 to determine what impact, if any, the adoption of SAB 101 will
have on its financial position or results of operations.  However,  based upon a
preliminary  review,  the Company  does not believe that the adoption of SAB 101
will have a material impact.

RECLASSIFICATIONS

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

3.   ACQUISITIONS AND OTHER

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

The  Austar  United  IPO and  concurrent  issuances  of shares in  exchange  for
additional assets reduced the Company's ownership interest in Austar United from
91.7%  to  approximately  69.2%.  Subsequent  stock  option  exercises  and  the
Secondary Offering reduced the Company's  ownership interest to 66.3% as of June
30, 2000. Including all vested stock options granted to employees, the Company's
ownership  interest in Austar United on a fully diluted basis was  approximately
64.3% at June 30, 2000.

ACQUISITIONS.  Effective  January 20,  2000,  AUB  acquired a 50.0%  interest in
Massive Media Pty Limited  ("Massive  Media") for A$4.4 ($2.7) million including
A$0.6 ($0.3)  million in Austar United shares and A$3.8 ($2.3)  million in cash.
Massive  Media  owns  100% of  Massive  Interactive  Pty  Limited,  an  Internet
development  company,  and 75.0% of Massive Technologies Pty Limited, a software
company focused on Internet development.

On April 1, 2000,  Saturn  purchased  Paradise Net Limited,  an Internet Service
Provider ("ISP") that has 33,000 subscribers, primarily residential,  throughout
New Zealand for  approximately  A$14.6 ($8.7) million.  Paradise Net Limited was
merged into TSL.

                                       9
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On April 6, 2000,  Austar United  merged Saturn with Telstra NZ, a  wholly-owned
subsidiary  of  Telstra,  to form a 50/50  joint  venture,  TSL.  Telstra is the
largest  telecommunications company in Australia. TSL will offer voice, data and
video to New  Zealand's  business  and  residential  market.  Telstra and Austar
United expect to invest approximately $500.0 million over five years to create a
state-of-the-art national broadband network.

On April 27, 2000, AUB purchased  Artson Pty Limited,  an ISP that does business
under the name "OntheNet" for A$6.1 ($3.6) million.  "OntheNet"  operates on the
Gold Coast in Queensland and has approximately 6,000 subscribers.

On June 27, 2000, AUB acquired the business  assets of a  Townsville-based  ISP,
which does business under the name of Ultranet Pty Limited,  with  approximately
5,000 subscribers for A$1.8 ($1.1) million payable over four months.

4.   INVESTMENTS  IN AND ADVANCES TO AFFILIATED  COMPANIES,  ACCOUNTED FOR UNDER
     THE EQUITY METHOD
<TABLE>
<CAPTION>                                                                As of June 30, 2000
                                          -------------------------------------------------------------------------------------
                                            Investments in                     Cumulative Share      Cumulative
                                            and Advances to      Dividends      in Results of        Translation
                                          Affiliated Companies   Received    Affiliated Companies    Adjustments      Total
                                          --------------------   ---------   --------------------    -----------   ------------
                                                                           (In thousands)
     <S>                                        <C>              <C>               <C>                  <C>          <C>
     XYZ Entertainment..................        $ 44,306         $(3,197)          $(15,320)           $   (72)      $25,717
     TSL................................          66,318               -             (7,787)            (1,283)       57,248
     Other..............................           2,797               -               (166)              (148)        2,483
                                                --------         -------           --------            -------       -------
         Total..........................        $113,421         $(3,197)          $(23,273)           $(1,503)      $85,448
                                                ========         =======           ========            =======       =======

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

     XYZ Entertainment..................        $44,306                  $(18,564)           $2,804        $28,546
                                                -------                  --------            ------        -------
         Total..........................        $44,306                  $(18,564)           $2,804        $28,546
                                                =======                  ========            ======        =======
</TABLE>
5.   PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>                                                                            As of          As of
                                                                                    June 30,     December 31,
                                                                                     2000           1999
                                                                                  -----------    ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     Subscriber premises equipment and converters..............................    $274,149        $276,725
     MMDS/DTH distribution facilities..........................................      62,043          64,373
     Cable distribution networks...............................................       1,977          91,298
     Office equipment, furniture and fixtures..................................      20,786          23,111
     Buildings and leasehold improvements......................................       3,859           5,645
     Other.....................................................................      19,146          20,133
                                                                                   --------        --------
                                                                                    381,960         481,285
        Accumulated depreciation...............................................    (266,678)       (261,891)
                                                                                   --------        --------
        Net property, plant and equipment......................................    $115,282        $219,394
                                                                                   ========        ========
</TABLE>
6.   GOODWILL AND OTHER INTANGIBLE ASSETS
<TABLE>
<CAPTION>                                                                            As of          As of
                                                                                    June 30,     December 31,
                                                                                     2000           1999
                                                                                  -----------    ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     Austar United.............................................................    $ 78,230        $114,882
        Accumulated amortization...............................................     (22,727)        (23,536)
                                                                                   --------        --------
        Net goodwill and other intangible assets...............................    $ 55,503        $ 91,346
                                                                                   =========       ========
</TABLE>                                       10
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.   SENIOR DISCOUNT NOTES
<TABLE>
<CAPTION>
                                                                                    As of           As of
                                                                                  June 30,       December 31,
                                                                                    2000            1999
                                                                                 -----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     May 1996 Notes ...........................................................    $395,321        $369,111
     September 1997 Notes .....................................................      41,015          38,834
                                                                                   --------        --------
        Total senior discount notes............................................    $436,336        $407,945
                                                                                   ========        ========
</TABLE>

8.   OTHER LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                                    As of           As of
                                                                                  June 30,       December 31,
                                                                                    2000            1999
                                                                                 -----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     New Austar Bank Facility..................................................   $219,039         $202,703
     Saturn Bank Facility......................................................          -           57,685
     Capitalized leases and other..............................................      2,694            2,263
                                                                                  --------         --------
                                                                                   221,733          262,651
        Less current portion...................................................       (951)          (1,500)
                                                                                  --------         --------
        Total other long-term debt.............................................   $220,782         $261,151
                                                                                  =========        ========
</TABLE>

OTHER FINANCIAL INSTRUMENTS

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

Currently,  the Company has four  interest  rate swaps to manage  interest  rate
exposure on Austar's  syndicated  senior  secured debt facility (the "New Austar
Bank  Facility").  Two of these swap  agreements  expire in 2002 and effectively
convert an  aggregate  principal  amount of A$50.0  ($29.8)  million of variable
rate,  long-term debt into fixed rate borrowings.  The other two swap agreements
expire in 2004 and  convert an  aggregate  principal  amount of A$100.0  ($59.7)
million of variable rate, long-term debt into fixed rate borrowings.  As of June
30,  2000,  the  weighted-average  fixed rate under  these  agreements  was 5.7%
compared to a weighted-average variable rate of approximately 8.6%.

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

9.   RELATED PARTY

Effective  May 1,  1996,  the  Company  and  United  Management,  Inc.  ("United
Management"),  an indirect wholly-owned subsidiary of United, executed a 10-year
management  services agreement (the "Management  Agreement"),  pursuant to which
United  Management  performs  certain  administrative,   accounting,   financial
reporting and other services for the Company, which has no separate employees of
its own.  Pursuant to the  Management  Agreement,  the  management fee was $0.75
million for the first year of such  agreement  (beginning  May 1, 1996),  and it
increases on each anniversary date of the Management Agreement by 8.0% per year.

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

Effective March 31, 1997, United Management  assigned its rights and obligations
under the  Management  Agreement to UAP, the  Company's  immediate  parent,  and
extended  the  agreement  for 20 years  from  that  date  (the  "UAP  Management
Agreement").  In  addition,  the  Company  reimburses  UAP  or  United  for  any
out-of-pocket  expenses  including travel,  lodging and entertainment  expenses,
incurred by UAP or United on behalf of the  Company.  In December  1997,  United
began allocating corporate general and administrative  expense to the Company in
the form of deemed  capital  contributions,  based on increased  activity at the
operating system level.  This allocation was discontinued as of January 1, 2000.
For the six months  ended June 30,  2000 and 1999,  the  Company  recorded  $0.5
million and $0.4 million,  respectively, in management fees due from the Company
to UAP. In 1999, the Company also recorded $17.6 million of non-cash stock-based
compensation  expense related to UAP stock appreciation  rights and $1.6 million
of other corporate general and administrative expense.

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

Austar and Saturn  were  parties to  technical  assistance  agreements  with UAP
whereby  such  operating  companies  paid to UAP fees based on their  respective
gross revenues. The operating systems reimbursed United for certain direct costs
incurred  by  United,   including  salaries  and  benefits  relating  to  senior
management  positions,  pursuant  to  the  terms  of  the  technical  assistance
agreements.  For the six months ended June 30, 1999,  the Company  recorded $3.5
million in related party management fees under these agreements.  Effective June
24, 1999,  the rights under these  management  fee  agreements  were assigned to
Austar  United as part of the  restructuring  associated  with the Austar United
IPO. Accordingly,  the related party management fees recorded for the six months
ended June 30, 2000 were eliminated during the Austar United consolidation.

Included in the amount due to parent is the following:
<TABLE>
<CAPTION>
                                                                                     As of          As of
                                                                                   June 30,      December 31,
                                                                                     2000           1999
                                                                                  ----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     United A/P................................................................    $ 2,462         $ 1,977
     Austar United technical assistance agreement obligations, including
      management fees of $2,400 and $1,200, respectively.......................      7,948           2,874
     Austar technical assistance agreement obligations, including deferred
      management fees of $8,618 and $9,472, respectively (1)...................     12,637          13,889
     Saturn technical assistance agreement obligations, including deferred
      management fees of $0 and $149, respectively.............................          -           1,820
     Other.....................................................................        798           1,815
                                                                                   -------         -------
                                                                                    23,845          22,375
          Less current portion.................................................    (15,227)        (12,754)
                                                                                   -------         -------
          Total due to parent..................................................    $ 8,618         $ 9,621
                                                                                   =======         =======
</TABLE>
     (1)  Austar United and UAP have the option of converting  these  management
          fees into equity.

                                       12
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.   SEGMENT INFORMATION

The Company's segment information is as follows:
<TABLE>
<CAPTION>
                                                                                                                As of      As of
                                                                                                               June 30, December 31,
                       For the Three Months Ended June 30, 2000      For the Six Months Ended June 30, 2000      2000      1999
                     --------------------------------------------  ------------------------------------------- -------- ------------
                                        Internet                                     Internet                   Total      Total
                      Video  Telephone    Data    Other    Total    Video  Telephone   Data     Other   Total   Assets     Assets
                     ------- ---------- -------- -------  -------  ------- --------- --------- ------- ------- -------- ------------
                                     (In thousands)                               (In thousands)
<S>                  <C>       <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>       <C>
Revenue:
  Australia......... $41,688   $  -     $   421  $   438  $42,547  $82,537  $    -   $   429  $ 1,037  $ 84,003 $577,360  $563,627
  New Zealand.......       -      -           -        -        -      844   3,166       878        -     4,888        -    76,139
  Other.............              -           -        -        -        -       -         -        -         -   25,861    26,825
                     -------   ----     -------  -------  -------  -------  ------   -------  -------  -------- --------  --------
    Total........... $41,688   $  -     $   421  $   438  $42,547  $83,381  $3,166   $ 1,307  $ 1,037  $ 88,891 $603,221  $666,591
                     =======   ====     =======  =======  =======  =======  ======   =======  =======  ======== ========  ========

Adjusted EBITDA:(1)
  Australia......... $ 2,030   $(89)    $(5,143) $(3,280) $(6,482) $ 3,222  $ (126)  $(6,864) $(5,057) $ (8,825)
  New Zealand.......       -      -           -        -        -     (253)   (357)      248   (1,344)   (1,706)
  Other.............       -      -           -     (299)    (299)       -       -         -     (559)     (559)
                     -------   ----     -------   ------- -------  -------  ------   ------   -------  --------
    Total........... $ 2,030   $(89)    $(5,143) $(3,579) $(6,781) $ 2,969  $ (483)  $(6,616) $(6,960) $(11,090)
                     =======   ====     =======  =======  =======  =======  ======   =======  =======  ========

                        For the Three Months Ended                    For the Six Months Ended
                              June 30, 1999                                 June 30, 1999
                     --------------------------------              -------------------------------
                       Video      Other      Total                   Video      Other      Total
                     ---------  ---------  ---------               ---------   --------  ---------
                             (In thousands)                                 (In thousands)
Revenue:
  Australia......... $34,388     $     -    $34,388                $64,820     $    -     $64,820
                     -------     -------    -------                -------     ------     -------
    Total........... $34,388     $     -    $34,388                $64,820     $    -     $64,820
                     =======     =======    =======                =======     ======     =======

Adjusted EBITDA: (1)
  Australia......... $   619     $(2,131)   $(1,512)               $(1,441)    $(3,525)   $(4,966)
  Other.............       -      (1,118)    (1,118)                     -      (2,147)    (2,147)
                     -------     -------    -------                -------     -------    -------
    Total........... $   619     $(3,249)   $(2,630)               $(1,441)    $(5,672)   $(7,113)
                     ========    =======    =======                =======     =======    =======

</TABLE>
(1)  "Adjusted EBITDA"  represents net operating  earnings before  depreciation,
     amortization  and  stock-based  compensation  charges.   Industry  analysts
     generally  consider  Adjusted  EBITDA to be a helpful  way to  measure  the
     performance of cable television  operations and  communications  companies.
     Management believes Adjusted EBITDA helps investors to assess the cash flow
     from  operations  from  period to period and thus,  to value the  Company's
     business.  Adjusted EBITDA should not, however, be considered a replacement
     for net  income,  cash  flows or for any other  measure of  performance  or
     liquidity  under U.S.  GAAP,  or as an indicator  of a company's  operating
     performance.  The  Company's  presentation  of  Adjusted  EBITDA may not be
     comparable to statistics  with a similar name reported by other  companies.
     Not all companies and analysts calculate EBITDA in the same manner.

                                       13
<PAGE>
                         UNITED AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Adjusted  EBITDA  reconciles  to the  consolidated  statement of  operations  as
follows:
<TABLE>
<CAPTION>
                                                                         For the Three Months           For the Six Months
                                                                             Ended June 30,                Ended June 30,
                                                                       ------------------------      ------------------------
                                                                          2000          1999            2000          1999
                                                                       ----------    ----------      ----------    ----------
                                                                                           (In thousands)
                                                                       <S>            <C>             <C>          <C>
     Operating loss.................................................   $(33,810)      $(45,742)       $(70,605)    $(74,686)
     Depreciation and amortization..................................     24,770         25,482          54,797       49,943
     Non-cash stock-based compensation expense......................      2,259         17,630           4,718       17,630
                                                                       --------       --------        --------     --------
          Consolidated Adjusted EBITDA..............................   $ (6,781)      $ (2,630)       $(11,090)    $ (7,113)
                                                                       ========       ========        =========    ========
</TABLE>

                                       14
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
--------------------------------------------------------------------------------

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



                                       15
<PAGE>

SUMMARY OPERATING DATA

The following tables set forth certain unaudited operating data:
<TABLE>
<CAPTION>
                                                                    As of June 30, 2000
                                                 ---------------------------------------------------------
                                                  Television                    Basic
                                                   Homes in       Homes      Subscribers/        Basic
                                                 Service Area     Passed        Lines         Penetration
                                                 ------------    ---------   -------------    ------------
<S>                                                <C>           <C>           <C>               <C>
Video subscribers:
  Austar.........................................  2,085,000     2,083,108       406,326         19.5%
  TSL............................................    141,000        93,015        19,006         20.4%
                                                   ---------     ---------     ---------
       Total.....................................  2,226,000     2,176,549       425,247
                                                   ---------     ---------     ---------
Telephone lines:
  TSL - Residential..............................    141,000        93,015        27,986         30.1%
  TSL - Business.................................        N/A           N/A         3,535           N/A
                                                   ---------     ---------     ---------         -----
       Total.....................................                                 31,521
                                                                               ---------

Programming subscribers:
  XYZ Entertainment..............................        N/A           N/A     1,017,000(1)        N/A
                                                   ---------     ---------     ---------         -----

Data subscribers:
  TSL............................................        N/A           N/A        36,335           N/A
  Austar United Broadband........................        N/A           N/A         8,490           N/A
                                                   ---------     ---------     ---------         -----
       Total.....................................                                 44,825
                                                                               ---------


                                                                    As of June 30, 1999
                                                 ---------------------------------------------------------
                                                  Television                    Basic
                                                   Homes in       Homes      Subscribers/        Basic
                                                 Service Area     Passed        Lines         Penetration
                                                 ------------    ---------   -------------    ------------

Video subscribers:
  Austar.........................................  2,085,000     2,083,108       329,002         15.8%
  Saturn.........................................    141,000        72,212        11,163         15.5%
                                                   ---------     ---------     ---------
       Total.....................................  2,226,000     2,155,320       340,165
                                                   ---------     ---------     ---------

Telephone lines:
  Saturn - Residential...........................    141,000        71,710        14,219         19.8%
  Saturn - Business..............................        N/A           N/A         1,464           N/A
                                                   ---------     ---------     ---------         -----
       Total.....................................                                 15,683
                                                                               ---------

Programming subscribers:
  XYZ Entertainment..............................        N/A           N/A       807,680(1)        N/A
                                                   ---------     ---------     ---------         -----

Data subscribers:
  Saturn.........................................        N/A           N/A         2,927           N/A
                                                   ---------     ---------     ---------         -----
</TABLE>

(1)  This figure represents the total estimated  subscribers to the five-channel
     XYZ Entertainment package.

                                       16

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

As of June  30,  2000,  we had  invested  approximately  $466.3  million  in our
projects.  These fundings do not include  amounts  contributed  by  shareholders
other than UAP and the Company,  proceeds from the  Australian  IPO or Secondary
Offering,  the operating  subsidiary bank  borrowings or amounts  contributed in
either cash or stock to acquire additional economic interests.
<TABLE>
<CAPTION>

                                                                                            As of
                                                                                           June 30,
     Sources of Fundings:                                                                    2000
                                                                                         -----------
                                                                                        (In thousands)
     <S>                                                                                  <C>
     Senior discount notes proceeds, net of offering costs...........................     $244,652
     Cash contributions and other equity from parent (1) (2).........................      214,576
     Cash received for interest......................................................        7,096
                                                                                          --------
          Total......................................................................     $466,324
                                                                                          ========

                                                                                            As of
                                                                                         December 31,
     Uses of Fundings:                                                                       1999
                                                                                         ------------
                                                                                        (In thousands)
     Austar (1)......................................................................     $349,429
     Saturn..........................................................................       44,612
     XYZ Entertainment...............................................................       16,481
     Other (2).......................................................................       55,802
                                                                                          --------
          Total......................................................................     $466,324
                                                                                          ========
</TABLE>
     (1)  Includes  issuance/use  of $29.8  million  and $6.2  million in United
          convertible preferred stock in 1995 and 1998, respectively, to acquire
          additional economic interests in Australia.

     (2)  Includes  $17.2  million  paid by United to purchase  2.0% of UAP from
          Kiwi Cable in December 1999.

We  had  $303.5  million  of  cash,  cash  equivalents  and  short-term   liquid
investments  on hand as of June 30,  2000.  This cash,  in addition to borrowing
capacity on the New Austar Bank Facility and the proceeds from the Austar United
IPO, has been and will  continue to be used to expand Austar  United's  customer
base,  complete the  build-out of its network and introduce new services such as
telephone and Internet/data.

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2000

Cash and cash  equivalents  decreased  $2.8  million  from  $6.0  million  as of
December 31, 1999 to $3.2 million as of June 30, 2000. Principal sources of cash
during the six months ended June 30, 2000 included proceeds from the issuance of
common equity  securities by a subsidiary of $102.4  million,  borrowings on the
New Austar  Bank  Facility  of $38.8  million and other  sources  totaling  $4.0
million.

During the six months ended June 30,  2000,  cash was used  principally  for the
purchases of property,  plant and  equipment  totaling  $53.9  million as Austar
continues to expand its businesses  into the data market,  the net cash invested
in short-term  liquid  investments  of $56.2  million,  the funding of operating
activities of $24.2 million, investments in and advances to affiliated companies
of $4.9 million,  new  acquisitions of $3.7 million and other uses totaling $1.2
million.

FOR THE SIX MONTHS ENDED JUNE 30, 1999

Cash and cash  equivalents  decreased  $0.1  million  from  $0.2  million  as of
December 31, 1998 to $0.1 million as of June 30, 1999. Principal sources of cash
during the six months ended June 30, 1999 included  borrowings on the New Austar
Bank Facility of $162.1 million, borrowings on the Austar Bank Facility of $19.4
million,  cash  contributions  from parent of $29.4 million and other sources of
$1.4 million.

During the six months ended June 30, 1999, cash was used principally for payment
of the Austar Bank Facility of $129.1 million,  purchases of property, plant and

                                       17
<PAGE>

equipment  totaling  $46.8  million to continue new  subscriber  connections  at
Austar  and the  build-out  of  existing  projects,  the  funding  of  operating
activities  of  $21.1  million,   deferred  financing  costs  of  $7.9  million,
investments  in and advances to  affiliated  companies of $5.2 million and other
uses totaling $2.3 million.

RESULTS OF OPERATIONS

EXCHANGE RATES. We translate  revenue and expense from our foreign  subsidiaries
using the weighted-average exchange rates during the period. These rates and the
spot rates for the end of each period are listed below.
                                                            Australian
                                                              Dollars
                                                            ----------
     For the six months ended June 30, 2000................   1.6442
     For the six months ended June 30, 1999................   1.5489
     Spot rate as of June 30, 2000.........................   1.6755
     Spot rate as of December 31, 1999.....................   1.5244

REVENUE.  Our revenue increased $8.1 million and $24.1 million for the three and
six months  ended June 30,  2000,  respectively, compared to the amounts for the
corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                    For the Three Months Ended      For the Six Months Ended
                                                             June 30,                        June 30,
                                                   ---------------------------     ---------------------------
                                                      2000             1999           2000             1999
                                                   ----------       ----------     ----------       ----------
                                                         (In thousands)                  (In thousands)
     <S>                                            <C>               <C>            <C>              <C>
     Austar United..............................    $42,547           $34,388        $88,891          $64,820
                                                    -------           -------        -------          -------
          Total revenue.........................    $42,547           $34,388        $88,891          $64,820
                                                    =======           =======        =======          =======
</TABLE>

AUSTAR UNITED

Revenue for Austar United  increased  $8.1 million,  or 23.5% from $34.4 million
for the three months  ended June 30, 1999 to $42.5  million for the three months
ended June 30, 2000. On a functional  currency basis,  Austar  United's  revenue
increased  A$18.7  million,  from A$53.3 million for the three months ended June
30, 1999 to A$72.0  million for the three  months  ended June 30,  2000, a 35.1%
increase.  Austar United's revenue increased $24.1 million, or 37.2%, from $64.8
million  for the six months  ended June 30,  1999 to $88.9  million  for the six
months ended June 30, 2000.  On a functional  currency  basis,  Austar  United's
revenue increased A$44.9 million,  from A$100.4 million for the six months ended
June 30, 1999 to A$145.3 million for the six months ended June 30, 2000, a 44.7%
increase.

The increase in video  revenue from period to period was primarily due to Austar
United's subscriber growth (406,326 at June 30, 2000 compared to 329,002 at June
30, 1999) as well as growth in premium  tiers,  resulting in an average  revenue
per  subscriber of A$56.71  ($33.49) and A$55.35  ($33.67) for the three and six
months  ended June 30,  2000,  respectively,  compared to A$51.89  ($33.91)  and
A$50.31 ($32.48) for the same period in the prior year.

ADJUSTED  EBITDA.  Adjusted  EBITDA loss increased $4.2 million and $4.0 million
for the three and six months ended June 30, 2000, respectively,  compared to the
corresponding amounts in the prior year as follows:
<TABLE>
<CAPTION>
                                                    For the Three Months Ended      For the Six Months Ended
                                                             June 30,                        June 30,
                                                   ---------------------------     ---------------------------
                                                      2000             1999           2000             1999
                                                   ----------       ----------     ----------       ----------
                                                         (In thousands)                  (In thousands)
     <S>                                            <C>               <C>            <C>              <C>
     Austar United..............................    $(6,482)          $(1,512)       $(10,531)        $(4,966)
     Other......................................       (299)           (1,118)           (559)         (2,147)
                                                    -------           -------        --------         -------
          Total Adjusted EBITDA.................    $(6,781)          $(2,630)       $(11,090)        $(7,113)
                                                    =======           =======        ========         =======

</TABLE>
                                       18
<PAGE>


AUSTAR UNITED

Austar United's Adjusted EBITDA loss increased by $5.0 million,  or 333.3%, from
negative  $1.5 million for the three months ended June 30, 1999 to negative $6.5
million for the three  months  ended June 30,  2000.  On a  functional  currency
basis,  Austar United's Adjusted EBITDA loss increased A$8.7 million, or 378.3%,
from negative A$2.3 million for the three months ended June 30, 1999 to negative
A$11.0  million  for the three  months  ended  June 30,  2000.  Austar  United's
adjusted  EBITDA loss increased by $5.5 million,  or 110.0%,  from negative $5.0
million for the six months ended June 30, 1999 to negative $10.5 million for the
six months ended June 30, 2000. On a functional  currency basis, Austar United's
adjusted EBITDA loss increased A$9.8 million from negative A$7.7 million for the
six months  ended June 30,  1999 to negative  A$17.5  million for the six months
ended June 30, 2000, a 127.3% increase. This increase in Adjusted EBITDA loss is
primarily  due to the  increased  expenses  associated  with the launch of AUB's
Internet business.

The Adjusted  EBITDA for video improved by $1.4 million and $4.4 million for the
three and six months  ended June 30,  2000,  respectively,  compared to the same
periods in the prior  year.  Austar's  incremental  sales  growth was  partially
offset  by  increased   programming  costs  as  subscribers  increased  and  the
Australian  dollar  weakened  against the U.S.  dollar,  as well as by increased
marketing  costs  due  to a  push  for  improved  brand  name  awareness  in the
marketplace during the second quarter.

The Adjusted EBITDA loss for the Internet business increased to $5.1 million and
$6.6  million for the three and six months  ended June 30,  2000,  respectively,
compared  to nil in the  prior  year as AUB  rolls  out its  broadband  Internet
services.

CORPORATE  GENERAL  AND  ADMINISTRATIVE   EXPENSE.  Our  corporate  general  and
administrative  expense  decreased $16.2 million and $14.5 million for the three
and six months  ended June 30, 2000,  respectively,  compared to the amounts for
the  corresponding  periods  in the prior  year.  This  decrease  was  primarily
attributable  to a  stock-based  compensation  charge of $17.6  million from the
Austar United stock option plan in June 1999 ("Austar United Plan"), compared to
$2.3  million and $4.7 million for the three and six months ended June 30, 2000,
respectively.

DEPRECIATION AND AMORTIZATION.  Depreciation and amortization  expense decreased
$0.7 million and increased  $4.9 million for the three and six months ended June
30, 2000, respectively,  compared to the amount for the corresponding periods in
the prior year as follows:
<TABLE>
<CAPTION>
                                                    For the Three Months Ended      For the Six Months Ended
                                                             June 30,                        June 30,
                                                   ---------------------------     ---------------------------
                                                      2000             1999           2000             1999
                                                   ----------       ----------     ----------       ----------
                                                         (In thousands)                  (In thousands)
     <S>                                            <C>               <C>            <C>              <C>
     Austar United..............................    $24,483           $25,482        $54,223          $49,943
     Other......................................        287                 -            574                -
                                                    -------           -------        -------          -------
          Total depreciation and amortization
            expense.............................    $24,770           $25,482        $54,797          $49,943
                                                    =======           =======        =======          =======
</TABLE>

AUSTAR UNITED

Depreciation and amortization  expense for Austar United decreased $1.0 million,
or 3.9%,  from $25.5  million for the three  months ended June 30, 1999 to $24.5
million for the three  months  ended June 30,  2000.  On a  functional  currency
basis,  Austar United's  depreciation and amortization  expense  increased A$1.8
million,  from A$39.0 million for the three months ended June 30, 1999 to A$40.8
million for the three months ended June 30, 2000, a 4.6% increase.

Depreciation and amortization  expense for Austar United increased $4.3 million,
or 8.6%,  from $49.9  million  for the six months  ended June 30,  1999 to $54.2
million for the six months ended June 30, 2000. On a functional  currency basis,
Austar United's  depreciation and amortization expense increased A$11.5 million,
from A$77.5 million for the six months ended June 30, 1999 to A$89.0 million for
the six months ended June 30, 2000, a 14.8% increase. This increase is primarily
due to Saturn being  consolidated  for the first quarter 2000 and reported under
the equity method during the first six months in 1999.

GAIN ON ISSUANCE OF COMMON EQUITY  SECURITIES BY SUBSIDIARY.  On March 29, 2000,
Austar United  successfully  completed a Secondary Offering selling 20.0 million
shares on the Australian Stock Exchange raising gross and net proceeds at A$8.50
($5.20) per share of A$170.0  ($104.0)  million and  A$167.5  ($102.4)  million,

                                       19
<PAGE>

respectively.  Based on the carrying value of our investment in Austar United as
of March 29,  2000,  we  recognized a gain of $61.2  million from the  resulting
step-up in the carrying amount of our investment in Austar United, in accordance
with SAB 51. No  deferred  taxes were  recorded  related to this gain due to our
intent on holding our investment in Austar United indefinitely.

INTEREST INCOME. Interest income increased $5.1 million and $8.2 million for the
three and six months ended June 30, 2000, respectively,  compared to the amounts
for the  corresponding  periods in the prior year. The increase was attributable
to the  increase in  short-term  liquid  investment  balances  due to the Austar
United IPO and the Secondary Offering.

INTEREST  EXPENSE.  Interest expense increased $1.6 million and $5.9 million for
the three and six months  ended June 30,  2000,  respectively,  compared  to the
amounts for the  corresponding  periods in the prior  year.  This  increase  was
primarily due to increased  interest expense related to the Austar Bank Facility
and the Notes for the three and six months  ended June 30, 2000  compared to the
amounts for the corresponding periods in the prior year.

MINORITY  INTEREST IN SUBSIDIARY.  The minority  interests'  share of losses was
$14.2  million  and $26.2  million  for the three and six months  ended June 30,
2000,  respectively.  Austar United's IPO (July 1999) and its Secondary Offering
(March 2000)  reduced our indirect  ownership to 66.3% as of June 30, 2000.  For
accounting  purposes,  we  continue  to  consolidate  100%  of  the  results  of
operations of Austar United, then deduct the minority interests' share of income
(losses) before arriving at net income (loss).

SHARE IN RESULTS OF AFFILIATED COMPANIES, NET. Our share in losses of affiliated
companies  increased  $2.5  million for the three months ended June 30, 2000 and
decreased  $0.3 million for the six months  ended June 30, 2000  compared to the
amounts for the corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                    For the Three Months Ended      For the Six Months Ended
                                                             June 30,                        June 30,
                                                   ---------------------------     ---------------------------
                                                      2000             1999           2000             1999
                                                   ----------       ----------     ----------       ----------
                                                         (In thousands)                  (In thousands)
     <S>                                            <C>               <C>            <C>              <C>
     XYZ Entertainment...........................   $   201           $(3,633)       $  (414)         $(5,035)
     Saturn/TSL (1)..............................    (7,787)           (1,675)        (7,787)          (3,645)
     Other.......................................      (199)                -           (165)               -
                                                    -------           -------        -------          -------
          Total share in results of affiliated
             companies...........................   $(7,785)          $(5,308)       $(8,366)         $(8,680)
                                                    =======           =======        =======          =======
</TABLE>
     (1)  During  the six  months  ended June 30,  1999,  the  equity  method of
          accounting  was used to account  for  Saturn's  results due to certain
          minority  shareholder rights.  Effective August 1, 1999, Austar United
          increased its ownership in Saturn to 100% and began  consolidating its
          results  of  operations.   Effective  April  1,  2000,  Austar  United
          decreased  its  ownership in Saturn to 50.0% with the TSL  transaction
          and returned to the equity method of accounting.

                                       20
<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
-------------------------------------------------------------------

INVESTMENT PORTFOLIO

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

IMPACT OF FOREIGN CURRENCY RATE CHANGES

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

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

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

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

INTEREST RATE SENSITIVITY

The table below provides  information  about our primary debt  obligations.  The
information  is presented in U.S.  dollar  equivalents,  which is our  reporting
currency.  The  instrument's  actual  cash  flows are  denominated  in both U.S.
dollars  (the Senior  Discount  Notes) and  Australian  dollars (New Austar Bank
Facility).
<TABLE>
<CAPTION>
                                                                             As of June 30, 2000
                                                                       -------------------------------
                                                                        Book Value         Fair Value
                                                                       -------------       -----------
                                                             (U.S. dollars, in thousands, except interest rates)
<S>                                                                      <C>                 <C>
Long-term and short-term  debt:
   Fixed rate USD denominated Senior Discount Notes...........           $436,336            $448,509
      Average interest rate...................................               14.0%               13.3%
   Variable rate A$ denominated New Austar Bank Facility......           $219,039            $219,039
      Average interest rate...................................                7.4%                7.4%

</TABLE>
                                       21

<PAGE>

The table  below  presents  principal  cash flows and  related  weighted-average
interest  rates  by  expected  maturity  dates  for our  debt  obligations.  The
information  is presented in U.S.  dollar  equivalents,  which is our  reporting
currency.  The  instrument's  actual  cash  flows are  denominated  in both U.S.
dollars  (the Senior  Discount  Notes) and  Australian  dollars (New Austar Bank
Facility).
<TABLE>
<CAPTION>
                                                                          As of June 30, 2000
                                              ------------------------------------------------------------------------------
                                               2000       2001       2002       2003       2004     Thereafter      Total
                                              -------   --------   --------   --------   --------   -----------   ----------
                                                             (U.S. dollars, in thousands, except interest rates)
<S>                                            <C>        <C>       <C>       <C>        <C>         <C>           <C>
Long-term and short-term debt:
  Fixed rate USD denominated Senior
    Discount Notes............................ $  -       $  -      $    -    $     -    $     -     $436,336      $436,336
  Variable rate A$ denominated New
    Austar Bank Facility...................... $  -       $  -      $7,666    $42,165    $67,355     $101,853      $219,039
</TABLE>

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

Currently,  we have four interest rate swaps to manage interest rate exposure on
the New Austar Bank Facility.  Two of these swap  agreements  expire in 2002 and
effectively  convert an aggregate  principal amount of A$50.0 ($29.8) million of
variable  rate,  long-term debt into fixed rate  borrowings.  The other two swap
agreements  expire in 2004 and convert an aggregate  principal amount of A$100.0
($59.7) million of variable rate, long-term debt into fixed rate borrowings.  As
of June 30, 2000,  the  weighted-average  fixed rate under these  agreements was
5.7% compared to a weighted-average variable rate of 8.6%.

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


                                       22
<PAGE>


PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

(a)  Exhibits

     27.1  Financial Data Schedule


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

     None.



                                       23
<PAGE>


                                    SIGNATURE


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



United Australia/Pacific, Inc.



Date:       August 14, 2000
           ----------------------------

By:        /s/ Valerie L. Cover
           ----------------------------
           Valerie L. Cover
           Controller
           (A Duly Authorized Officer and Principal Financial Officer)



                                       24