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 March 31, 2000

                                       or

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

               For the transition period from _______ to_________

                          Commission File No. 333-05017

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

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

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

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







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

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



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                                               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 March 31, 2000 and December 31, 1999 (Unaudited).............     2

     Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2000
         and 1999 (Unaudited).................................................................................     3

     Condensed Consolidated Statement of Stockholders' Deficit for the Three Months Ended March 31, 2000
         (Unaudited)..........................................................................................     4

     Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 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...............     16
------

Item 3 - Quantitative and Qualitative Disclosure about Market Risk...........................................     22
------




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


Item 6 - Exhibits and Reports on Form 8-K....................................................................     24
------

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<CAPTION>

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

                                                                                                            As of        As of
                                                                                                          March 31,    December 31,
                                                                                                             2000         1999
                                                                                                          ---------    ------------
ASSETS
<S>                                                                                                       <C>            <C>
Current assets:
  Cash and cash equivalents...........................................................................    $  5,068       $  6,028
  Short-term liquid investments.......................................................................     231,775        269,393
  Subscriber receivables, net.........................................................................       7,981          8,177
  Related party receivables...........................................................................       2,390          1,645
  Other receivables...................................................................................       2,853          6,196
  Stock subscription receivable.......................................................................     101,645              -
  Inventory...........................................................................................      13,615         14,193
  Prepaids and other current assets...................................................................       4,235          5,146
                                                                                                          --------     ----------
       Total current assets...........................................................................     369,562        310,778
Investments in and advances to affiliated companies, accounted for under the equity method, net.......      28,757         28,546
Property, plant and equipment, net of accumulated depreciation of $267,378 and $261,891,
  respectively........................................................................................     206,152        219,394
Goodwill and other intangible assets, net of accumulated amortization of $25,047 and $23,536,
  respectively........................................................................................      81,878         91,346
Deferred financing costs, net of accumulated amortization of $5,270 and $4,427, respectively..........      14,783         16,377
Other non-current assets, net.........................................................................       3,041            150
                                                                                                          --------       --------
Total assets..........................................................................................    $704,173       $666,591
                                                                                                          ========       ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable....................................................................................    $  9,376       $ 16,463
  Accrued liabilities.................................................................................      31,181         32,151
  Construction payables...............................................................................       3,670          4,370
  Current portion of due to parent....................................................................      13,547         12,754
  Current portion of notes payable....................................................................       3,004              -
  Current portion of other long-term debt.............................................................       1,011          1,500
                                                                                                          --------       --------
       Total current liabilities......................................................................      61,789         67,238
Due to parent.........................................................................................       8,904          9,621
Senior discount notes.................................................................................     421,895        407,945
Other long-term debt..................................................................................     260,357        261,151
Deferred tax liability................................................................................         938          1,014
Other long-term liabilities...........................................................................       1,388            456
                                                                                                          --------       --------
       Total liabilities..............................................................................     755,271        747,425
                                                                                                          --------       --------

Minority interest in subsidiary.......................................................................      95,960         74,070
                                                                                                          --------       --------

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..........................................................................     331,711        331,688
  Deferred compensation...............................................................................     (16,489)       (18,343)
  Accumulated deficit.................................................................................    (423,249)      (445,844)
  Other cumulative comprehensive loss.................................................................     (39,209)       (22,583)
                                                                                                          --------       --------
       Total stockholders' deficit....................................................................    (147,058)      (154,904)
                                                                                                          --------       --------
       Total liabilities and stockholders' deficit....................................................    $704,173       $666,591
                                                                                                          ========       ========


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

                                                              2


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<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
                                                                                                           March 31,
                                                                                              -----------------------------------
                                                                                                  2000                  1999
                                                                                              -------------         -------------
<S>                                                                                            <C>                   <C>
Revenue.....................................................................................   $   46,344            $   30,432

System operating expense, including related party expense of $600 and $1,393,
  respectively..............................................................................      (35,617)              (23,233)
System selling, general and administrative expense..........................................      (14,776)              (10,653)
Corporate general and administrative expense, including management fees and allocated
  expense from related party of $236 and $1,008, respectively...............................       (2,719)               (1,029)
Depreciation and amortization...............................................................      (30,027)              (24,461)
                                                                                               ----------            ----------
        Operating loss......................................................................      (36,795)              (28,944)

Gain on issuance of common equity securities by subsidiary..................................       66,772                     -
Interest income.............................................................................        3,148                    33
Interest expense............................................................................      (19,299)              (14,922)
Other expense, net..........................................................................         (182)                 (330)
                                                                                               ----------            ----------
       Income (loss) before income taxes and other items....................................       13,644               (44,163)

Income tax expense..........................................................................          (75)                    -
Minority interest in subsidiary.............................................................        9,607                     -
Share in results of affiliated companies, net...............................................         (581)               (3,372)
                                                                                               ----------            ----------
       Net income (loss)....................................................................   $   22,595            $  (47,535)
                                                                                               ==========            ==========

Foreign currency translation adjustments....................................................   $  (16,626)           $    1,258
                                                                                               ==========            ==========
       Comprehensive income (loss)..........................................................   $    5,969            $  (46,277)
                                                                                               ==========            ==========

Net income (loss) per common share:
       Basic net income (loss)..............................................................   $     1.27            $    (2.67)
                                                                                               ==========            ==========
       Diluted net income (loss)............................................................   $     1.23            $    (2.67)
                                                                                               ==========            ==========

Weighted-average number of common shares outstanding:
       Basic................................................................................   17,810,299            17,810,249
                                                                                               ==========            ==========
       Diluted..............................................................................   18,298,249            17,810,249
                                                                                               ==========            ==========




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

                                                              3
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<CAPTION>

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


                                                                                                            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      $331,688     $(18,343)     $(445,844)     $(22,583)     $(154,904)

Cash contributions from parent..........          -       -            23            -              -             -             23

Amortization of deferred compensation...          -       -             -        1,854              -             -          1,854

Net income..............................          -       -             -            -         22,595             -         22,595

Change in cumulative translation
  adjustments...........................          -       -             -            -              -       (16,626)       (16,626)

                                         ==========    ====      ========     ========      =========      ========      =========
Balances, March 31, 2000................ 17,810,299    $178      $331,711     $(16,489)     $(423,249)     $(39,209)     $(147,058)
                                         ==========    ====      ========     ========      =========      ========      =========


(1) As of March 31, 2000, Other Cumulative Comprehensive Loss represents foreign currency translation adjustments only.























              The  accompanying notes are an integral part of these condensed consolidated financial statements.
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                                                              4
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                                               UNITED AUSTRALIA/PACIFIC, INC.
                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (Stated in thousands)
                                                        (Unaudited)

                                                                                                     For the Three Months Ended
                                                                                                              March 31,
                                                                                                  --------------------------------
                                                                                                      2000               1999
                                                                                                  ------------       -------------
<S>                                                                                                  <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...............................................................................     $22,595            $(47,535)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
  Gain on issuance of common equity securities by subsidiary....................................     (66,772)                  -
  Share in results of affiliated companies, net.................................................      (1,508)              1,777
  Minority interest in subsidiaries.............................................................      (9,607)                  -
  Depreciation and amortization.................................................................      30,027              24,461
  Allocation of expense accounted for as capital contributions by parent........................           -                 789
  Stock-based compensation expense..............................................................       2,459                   -
  Accretion of interest on senior notes and amortization of deferred financing costs............      15,010              12,731
  Increase in receivables, net..................................................................      (1,303)               (974)
  (Increase) decrease in other assets...........................................................      (2,210)              2,135
  Increase (decrease) in accounts payable, accrued liabilities and other........................       1,373              (5,612)
                                                                                                     -------            --------
Net cash flows from operating activities........................................................      (9,936)            (12,228)
                                                                                                     -------            --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term liquid investments.......................................................    (489,594)             (1,066)
Sale of short-term liquid investments...........................................................     507,753               1,060
Investments in and advances to affiliated companies and acquisition of assets...................      (2,578)             (5,177)
Distribution received from affiliated company...................................................       1,576                   -
Capital expenditures............................................................................     (29,201)            (22,064)
Other...........................................................................................        (387)                852
                                                                                                     -------            --------
Net cash flows from investing activities........................................................     (12,431)            (26,395)
                                                                                                     -------            --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contributed from parent.....................................................................         23              19,230
Proceeds from issuance of common stock in connection with subsidiary option plan.................        537                   -
Borrowings on the New Austar Bank Facility and Saturn Bank Facility..............................     18,162              18,941
Borrowings on other debt, net....................................................................      3,113                  37
                                                                                                     -------            --------
Net cash flows from financing activities.........................................................     21,835              38,208
                                                                                                     -------            --------

EFFECT OF EXCHANGE RATES ON CASH.................................................................       (428)                406
                                                                                                     -------            --------
DECREASE IN CASH AND CASH EQUIVALENTS............................................................       (960)                 (9)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...................................................      6,028                 181
                                                                                                     -------            --------
CASH AND CASH EQUIVALENTS, END OF PERIOD.........................................................    $ 5,068            $    172
                                                                                                     =======            ========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest...........................................................................    $ 6,018            $  2,311
                                                                                                     =======            ========
Cash received for interest.......................................................................    $ 2,027            $      8
                                                                                                     =======            ========



              The  accompanying notes are an integral part of these condensed consolidated financial statements.
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                                                              5



<PAGE>


                         UNITED AUSTRALIA/PACIFIC, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF MARCH 31, 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 pay  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 March 31, 2000.


          ***********************************************************
          *                                                         *
          *                         United                          *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *      United International Properties, Inc. ("UIPI")     *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                           UAP                           *
          *                                                         *
          ***********************************************************
                                       *
                              100%     *
          ***********************************************************
          *                                                         *
          *                      The Company                        *
          *                                                         *
          ***********************************************************
                                       *
                              72.3%    *
          ***********************************************************
          *          Austar United Communications Limited           *
          *                    ("Austar United")                    *
          *                                                         *
          ***********************************************************
                                       *
                                       *
          ***********************************************************
          *                                                         *
          *Australia:                                               *
          * Austar Entertainment Pty Limited ("Austar")     100.0%  *
          * XYZ Entertainment Pty Limited ("XYZ                     *
          *  Entertainment")                                 50.0%  *
          *New Zealand:                                             *
          * Saturn Communications Limited ("Saturn")        100.0%  *
          *                                                         *
          ***********************************************************




                                       6
<PAGE>


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

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

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

PRINCIPLES OF CONSOLIDATION

The  accompanying  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.  On July 27, 1999,  Austar United  acquired from the
minority  shareholder  of Saturn  ("SaskTel")  its 35.0%  interest  in Saturn in
exchange for 13,659,574 of Austar United's  shares,  thereby  increasing  Austar
United's ownership interest in Saturn from 65.0% to 100%. As a result, Saturn is
consolidated in these financial  statements for the three months ended March 31,
2000. During the first quarter 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  SaskTel had
participating  approval  or veto  rights  with  respect to  certain  significant
decisions  of  Saturn  in the  ordinary  course  of  business.  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.


                                       7
<PAGE>

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

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

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

GOODWILL AND OTHER INTANGIBLE ASSETS

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

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  cable  television
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 INCOME (LOSS) PER SHARE

"Basic net income  (loss) per share" is determined by dividing net income (loss)
available to common stockholders by the weighted-average number of common shares
outstanding  during each period.  "Diluted net income (loss) per share" includes
the effects of potentially  issueable  common stock,  but only if dilutive.  The
Company's warrants (see Note 7) are included in the Company's diluted net income
(loss) per share amounts for first quarter 1999 and 2000.

                                       8
<PAGE>

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


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 income (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.

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.  SFAS 133 is effective
for  fiscal  years  beginning  after June 15,  2000.  The  Company is  currently
assessing the effect of this new standard.

In December 1999, the staff of the SEC issued Staff Accounting  Bulletin No. 101
("SAB 101") "Views on Selected  Revenue  Recognition  Issues" which provides the
staff's views in applying U.S. GAAP to selected revenue  recognition issues. SAB
101 is effective  second  quarter 2000.  The Company is currently  assessing the
effect of SAB 101.

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 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,  to be 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 $66.8 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.

Austar  United's  initial  public  offering  ("Austar  United IPO") in July 1999
reduced the  Company's  ownership  interest  from 100% to  approximately  75.5%.
Subsequent  stock  option  exercises  and the  Secondary  Offering  reduced  the
Company's ownership interest to 72.3% as of March 31, 2000. Including all vested
stock options granted to employees,  the Company's  ownership interest in Austar
United on a fully diluted basis was approximately 70.4% at March 31, 2000.

ACQUISITION. Effective January 20, 2000, Austar United acquired a 50.0% interest
in  Massive  Media Pty  Limited  ("Massive  Media")  which  owns 100% of Massive
Interactive Pty Limited and 75.0% of Massive  Technologies Pty Limited for A$4.4
($3.0) million  including A$0.6 ($0.4) million in Austar United shares and A$3.8
($2.6) million in cash.

                                       9
<PAGE>

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


4.   INVESTMENTS  IN AND ADVANCES TO AFFILIATED  COMPANIES,  ACCOUNTED FOR UNDER
     THE EQUITY METHOD
<TABLE>
<CAPTION>
                                                                            As of March 31, 2000
                                          -------------------------------------------------------------------------------------
                                            Investments in                     Cumulative Share      Cumulative
                                            and Advances to      Dividends      in Results of        Translation
                                          Affiliated Companies   Received    Affiliated Companies    Adjustments      Total
                                          --------------------   ---------   --------------------    -----------   ------------
                                                                             (In thousands)
     <S>                                        <C>               <C>               <C>                  <C>          <C>
     XYZ Entertainment...................       $44,306          $(1,576)          $(17,520)            $  692       $25,902
     Other...............................         2,929                -                 34               (108)        2,855
                                                -------          -------           --------             ------       -------
         Total...........................       $47,235          $(1,576)          $(17,486)            $  584       $28,757
                                                =======          =======           ========             ======       =======

                                                                         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
                                                                                   March 31,     December 31,
                                                                                     2000           1999
                                                                                  ----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     Subscriber premises equipment and converters..............................    $266,926        $276,725
     MMDS/DTH distribution facilities..........................................      60,776          64,373
     Cable distribution networks...............................................      89,844          91,298
     Office equipment, furniture and fixtures..................................      30,226          23,111
     Buildings and leasehold improvements......................................       5,647           5,645
     Other.....................................................................      20,111          20,133
                                                                                   --------        --------
                                                                                    473,530         481,285
        Accumulated depreciation...............................................    (267,378)       (261,891)
                                                                                   --------        --------
        Net property, plant and equipment......................................    $206,152        $219,394
                                                                                   ========        ========
</TABLE>

6.   GOODWILL AND OTHER INTANGIBLE ASSETS
<TABLE>
<CAPTION>
                                                                                     As of          As of
                                                                                   March 31,     December 31,
                                                                                     2000           1999
                                                                                  ----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     Austar United.............................................................    $106,925        $114,882
        Accumulated amortization...............................................     (25,047)        (23,536)
                                                                                   --------        --------
        Net goodwill and other intangible assets...............................    $ 81,878        $ 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
                                                                                   March 31,     December 31,
                                                                                     2000           1999
                                                                                  ----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     May 1996 Notes ...........................................................    $381,992        $369,111
     September 1997 Notes .....................................................      39,903          38,834
                                                                                   --------        --------
        Total senior discount notes............................................    $421,895        $407,945
                                                                                   ========        ========
</TABLE>

MAY 1996 NOTES

The 14.0% senior notes,  which the Company issued in May 1996 at a discount from
their principal amount of $443.0 million (the "May 1996 Notes"), had an accreted
value of $382.0  million as of March 31, 2000.  On and after May 15, 2001,  cash
interest  will  accrue  and  will be  payable  semi-annually  on each May 15 and
November 15,  commencing  November 15, 2001.  The May 1996 Notes are due May 15,
2006.  Effective May 16, 1997, the interest rate on these notes  increased by an
additional  0.75%  per  annum to  14.75%.  On  October  14,  1998,  the  Company
consummated  an equity sale  resulting in gross proceeds to the Company of $70.0
million which  reduced the interest rate from 14.75% to 14.0% per annum.  Due to
the increase in the interest rate effective May 16, 1997 until  consummation  of
the equity sale, the May 1996 Notes will accrete to a principal amount of $447.4
million on May 15, 2001, the date cash interest begins to accrue.

SEPTEMBER 1997 NOTES

The 14.0% senior notes, which the Company issued in September 1997 at a discount
from their principal  amount of $45.0 million (the "September 1997 Notes"),  had
an accreted  value of $39.9  million as of March 31, 2000.  On and after May 15,
2001, cash interest will accrue and will be payable semi-annually on each May 15
and November 15, commencing  November 15, 2001. The September 1997 Notes are due
May 15, 2006.  Effective  September  23, 1997,  the interest rate on these notes
increased by an additional  0.75% per annum to 14.75%.  On October 14, 1998, the
Company  consummated  an equity sale,  reducing the interest rate from 14.75% to
14.0% per annum.  Due to the increase in the interest rate  effective  September
23, 1997 until  consummation  of the equity sale,  the September 1997 Notes will
accrete to a principal  amount of $45.4  million on May 15, 2001,  the date cash
interest begins to accrue.

On November 17, 1997, pursuant to the terms of the indentures  governing the May
1996 Notes and the September 1997 Notes (collectively, the "Notes"), the Company
issued  warrants  to  purchase  488,000  shares  of  its  common  stock,   which
represented  3.4% of the Company's  common stock at that time.  The warrants are
exercisable  at a price of $10.45 per share which would result in gross proceeds
of  approximately  $5.1 million  upon  exercise.  The  warrants are  exercisable
through May 15,  2006.  The  warrants  were valued at $3.7 million and have been
reflected as an additional  discount to the Notes on a pro-rata  basis and as an
increase  in  additional  paid-in  capital.  Warrants  to acquire 50 shares were
exercised November 24, 1999.

8.   OTHER LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                                     As of          As of
                                                                                   March 31,     December 31,
                                                                                     2000           1999
                                                                                  ----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     New Austar Bank Facility..................................................   $201,530         $202,703
     Saturn Bank Facility......................................................     56,943           57,685
     Capitalized leases and other..............................................      2,895            2,263
                                                                                  --------         --------
                                                                                   261,368          262,651
        Less current portion...................................................     (1,011)          (1,500)
                                                                                  --------         --------
        Total other long-term debt.............................................   $260,357         $261,151
                                                                                  =========        ========
</TABLE>



                                       11
<PAGE>

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


NEW AUSTAR BANK FACILITY

On April 23, 1999, Austar executed a new syndicated senior secured debt facility
(the "New Austar Bank  Facility")  for A$400.0  million to refinance the A$200.0
million existing bank facility and to fund Austar's  subscriber  acquisition and
working   capital  needs.   The  New  Austar  Bank  Facility   consists  of  two
sub-facilities:  (i) A$200.0 million  amortizing term facility ("Tranche 1") and
(ii) A$200.0 million cash advance facility  ("Tranche 2"). Tranche 1 was used to
refinance  the  existing  bank  facility,  and Tranche 2 is  available  upon the
contribution of additional equity on a 2:1 debt-to-equity basis. As of March 31,
2000, Austar had drawn A$332.0 ($201.5) million on the New Austar Bank Facility.
All of Austar's assets are pledged as collateral for this facility. In addition,
pursuant to this  facility,  Austar cannot pay any  dividends,  interest or fees
under its technical  assistance  agreements  without the consent of the majority
banks.  The New Austar Bank Facility bears interest at the  professional  market
rate in Australia  plus a margin  ranging from 1.75% to 2.25% based upon certain
debt to cash flow  ratios.  The New  Austar  Bank  Facility  is fully  repayable
pursuant to an  amortization  schedule  beginning  December  31, 2002 and ending
March 31, 2006.

SATURN BANK FACILITY

On July 15, 1999,  Saturn closed a syndicated  senior debt facility (the "Saturn
Bank  Facility")  in the  amount of New  Zealand  dollars  ("NZ$")125.0  ($62.2)
million to fund the completion of Saturn's network. As of March 31, 2000, Saturn
had drawn NZ$115.0 ($56.9) million against the facility and expects to draw down
the remaining  balance by the end of fourth  quarter 2000.  The interest rate on
the debt  facility  is 2.75% over the  current  base rate upon draw down and has
averaged  approximately  8.1%. The Saturn Bank Facility is repayable over a five
year period beginning fourth quarter 2001.

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 the New
Austar  Bank  Facility.  Two  of  these  swap  agreements  expire  in  2002  and
effectively  convert an aggregate  principal amount of A$50.0 ($30.4) 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
($60.7) million of variable rate, long-term debt into fixed rate borrowings.  As
of March 31, 2000, the  weighted-average  fixed rate under these  agreements was
5.7%  compared  to a  weighted-average  variable  rate  on the New  Austar  Bank
Facility of approximately 5.5%.

In addition, the Company has an interest rate swap to manage its exposure on the
Saturn Bank Facility which effectively converts an aggregate principal amount of
NZ$75.0  ($37.1)  million  of  variable  rate,  long-term  debt into  fixed rate
borrowings.  The interest rate swap  includes an  increasing  fixed rate with an
additional  margin  which is  expected  to decline  as the debt to EBITDA  ratio
declines.  As of March 31, 2000,  the average fixed rate under the agreement was
6.3% compared to a weighted-average variable rate of 5.2%.

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.
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

                                       12
<PAGE>

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


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 three months ended March 31, 2000 and 1999,  the Company  recorded  $0.2
million in management fees and $1.0 million,  respectively, in corporate general
and  administrative  expense  allocated from United and management fees due from
the Company to UAP.

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.  First  quarter 1999,  the Company  recorded $1.4 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 first quarter 2000 were  eliminated
during the Austar United consolidation.

Included in the amount due to parent is the following:
<TABLE>
<CAPTION>
                                                                                     As of          As of
                                                                                   March 31,     December 31,
                                                                                     2000           1999
                                                                                  ----------     ------------
                                                                                        (In thousands)
     <S>                                                                           <C>             <C>
     United A/P................................................................    $ 2,213         $ 1,977
     Austar United technical assistance agreement obligations, including
      management fees of $1,800 and $1,200, respectively.......................      4,893           2,874
     Austar technical assistance agreement obligations, including deferred
      management fees of $8,765 and $9,472, respectively (1)...................     12,852          13,889
     Saturn technical assistance agreement obligations, including deferred
      management fees of $139 and $149, respectively...........................      1,684           1,820
     Other.....................................................................        809           1,815
                                                                                   -------         -------
                                                                                    22,451          22,375
          Less current portion.................................................    (13,547)        (12,754)
                                                                                   -------         -------
          Total due to parent..................................................    $ 8,904         $ 9,621
                                                                                   =======         =======
</TABLE>

     (1)  Austar United and UAP have the option of converting  these  management
          fees into equity.




                                       13
<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
                                                                                                   March 31,    December 31,
                                           For the Three Months Ended March 31, 2000                 2000          1999
                                --------------------------------------------------------------    ----------   ------------
                                Multi-channel                Internet                               Total         Total
                                 Television     Telephone      Data       Other       Total         Assets        Assets
                                -------------  -----------  ----------  ----------  ----------    ----------   ------------
                                                          (In thousands)
<S>                                <C>           <C>         <C>         <C>          <C>          <C>           <C>
Revenue:
  Australia...................     $40,849       $     -      $     8     $   599      $41,456      $570,843      $563,627
  New Zealand.................         844         3,166          878           -        4,888       106,980        76,139
  Other.......................           -             -            -           -           -         26,350        26,825
                                   -------       -------      -------     -------      -------      --------      --------
    Total.....................     $41,693       $ 3,166      $   886     $   599      $46,344      $704,173      $666,591
                                   =======       =======      =======     =======      =======      ========      ========

Adjusted EBITDA: (1)
  Australia...................     $ 1,192       $   (37)     $(1,721)    $(1,777)     $(2,343)
  New Zealand.................        (253)         (357)         248      (1,344)      (1,706)
  Other.......................           -             -            -        (260)        (260)
                                   -------       -------      -------     -------      =======
    Total.....................     $   939       $  (394)     $(1,473)    $(3,381)     $(4,309)
                                   =======       =======      =======     =======      =======


                              For the Three Months Ended March 31, 1999
                              -----------------------------------------
                                Multi-channel
                                Television        Other        Total
                              ----------------  ---------   -----------
                                           (In thousands)
Revenue:
  Australia..................      $30,432       $     -      $30,432
  New Zealand................            -             -            -
  Other......................            -             -            -
                                   -------       -------      -------
    Total....................      $30,432       $     -      $30,432
                                   =======       =======      =======

Adjusted EBITDA: (1)
  Australia..................      $(3,454)      $     -      $(3,454)
  Other......................            -        (1,029)      (1,029)
                                   -------       -------      -------
    Total...................       $(3,454)      $(1,029)     $(4,483)
                                   =======       =======      =======
</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.


                                       14
<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 Ended
                                                                                         March 31,
                                                                               ---------------------------
                                                                                  2000             1999
                                                                               ----------       ----------
                                                                                      (In thousands)
     <S>                                                                        <C>              <C>
     Net operating loss.......................................................  $(36,795)        $(28,944)
     Depreciation and amortization............................................    30,027           24,461
     Non-cash stock-based compensation expense................................     2,459                -
                                                                                --------         --------
          Consolidated Adjusted EBITDA........................................  $ (4,309)        $ (4,483)
                                                                                ========         ========
</TABLE>

12.   SUBSEQUENT EVENTS

On April 6, 2000,  Austar  United closed an agreement  with Telstra  Corporation
Limited ("Telstra") the largest telecommunications company in Australia, to form
a 50/50 joint venture  between Saturn and Telstra's New Zealand  operation which
will be called Telstra Saturn Limited ("TSL").

In April  2000,  Saturn  purchased  Paradise  Net  Limited an  Internet  Service
Provider ("ISP") that has 33,000 subscribers, primarily residential,  throughout
New Zealand for approximately NZ$20.0 ($9.9) million.

In April 2000,  Austar  United  purchased  Artson Pty Limited an ISP that trades
under the name "On the Net" for A$6.0  ($3.5)  million and  operates on the Gold
Coast in Queensland.







                                       15
<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, 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.

INTRODUCTION

As of March 31,  2000,  through  Austar  United we held (i) an  effective  72.3%
economic  interest in Austar,  (ii) a 72.3% interest in Saturn and (iii) a 36.2%
interest in XYZ  Entertainment.  We decreased our interest in Austar United from
100% to approximately  75.5% in connection with the July 1999 Austar United IPO.
Subsequent  stock  option  exercises  and the  Secondary  Offering in March 2000
reduced our  ownership  interest to 72.3% as of March 31, 2000 (70.4% on a fully
diluted basis after vested employee options).

Immediately  prior to the Austar United IPO,  Austar  United  issued  13,659,574
shares of Austar United to SaskTel for SaskTel's 35.0% interest in Saturn.  As a
result,  Saturn has been  consolidated  in our  financial  statements  effective
August 1, 1999.  Prior to that time, we accounted  for our  investment in Saturn
under the equity method.

UAP,   the   Company's   parent,   provides   various   management,   technical,
administrative,  accounting,  financial reporting, tax, legal and other services
for the Company pursuant to the terms of a management  agreement between UAP and
the   Company.   Effective   June  24,   1999,   UAP  assigned  its  rights  and
responsibilities  under the various  technical  assistance  agreements  with the
operating systems to Austar United.


                                       16
<PAGE>


SUMMARY OPERATING DATA

The following tables set forth certain unaudited operating data:
<TABLE>
<CAPTION>
                                                                           As of March 31, 2000
                                                 ----------------------------------------------------------------------
                                                  Television                    Basic                        Economic
                                                   Homes in       Homes      Subscribers/        Basic       Ownership
                                                 Service Area     Passed        Lines         Penetration    Interest
                                                 ------------    ---------   -------------    ------------   ---------
<S>                                                <C>           <C>           <C>               <C>           <C>
Multi-channel TV subscribers:
  Austar.........................................  2,085,000     2,083,108     389,816           18.7%         72.3%
  Saturn.........................................    141,000        87,319      17,811           20.4%         72.3%
                                                   ---------     ---------     -------
       Total.....................................  2,226,000     2,170,427     407,627
                                                   ---------     ---------     -------
Telephone lines:
  Saturn.........................................    141,000        95,397      28,095           29.5%         72.3%
                                                   ---------     ---------     -------

Programming subscribers:
  XYZ Entertainment..............................        N/A           N/A     963,000(1)          N/A         36.2%
                                                   ---------     ---------     -------

Data subscribers:
  Saturn (2).....................................    141,000        95,397       8,485            8.9%         72.3%
                                                   ---------     ---------     -------


                                                                           As of March 31, 1999
                                                 ----------------------------------------------------------------------
                                                  Television                    Basic                        Economic
                                                   Homes in       Homes      Subscribers/        Basic       Ownership
                                                 Service Area     Passed        Lines         Penetration    Interest
                                                 ------------    ---------   -------------    ------------   ---------

Multi-channel TV subscribers:
  Austar.........................................  2,085,000     2,083,108     311,119           14.9%        100.0%
  Saturn.........................................    141,000        56,249       7,570           13.5%         65.0%
                                                   ---------     ---------     -------
       Total.....................................  2,226,000     2,139,357     318,689
                                                   ---------     ---------     -------

Telephone lines:
  Saturn.........................................    141,000        53,257      14,902           28.0%         65.0%
                                                   ---------     ---------     -------

Programming subscribers:
  XYZ Entertainment..............................        N/A           N/A     750,400(1)          N/A         25.0%
                                                   ---------     ---------     -------

Data subscribers:
  Saturn.........................................    141,000        53,257         900            1.7%         65.0%
                                                   ---------     ---------     -------
</TABLE>

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




                                       17
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

As of March 31,  2000,  we had  invested  approximately  $491.4  million  in our
projects.  These fundings do not include  amounts  contributed  by  shareholders
other than 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
                                                                                          March 31,
     Sources of Fundings:                                                                    2000
                                                                                         -----------
                                                                                        (In thousands)
     <S>                                                                                  <C>
     Senior discount notes proceeds, net of offering costs...........................     $244,652
     Cash contributions and other equity from parent (1) (2) (3).....................      239,648
     Cash received for interest......................................................        7,083
                                                                                          --------
          Total......................................................................     $491,383
                                                                                          ========

                                                                                            As of
                                                                                         December 31,
     Uses of Fundings:                                                                       1999
                                                                                         ------------
                                                                                        (In thousands)
     Austar (1)......................................................................     $349,429
     Saturn..........................................................................       44,612
     XYZ Entertainment (2)...........................................................       41,553
     Other (3).......................................................................       55,789
                                                                                          --------
          Total......................................................................     $491,383
                                                                                          ========

</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 the non-cash  contribution  from UAP of $25.1  million for an
          additional  25.0%  interest in XYZ  Entertainment.
     (3)  Includes  $17.2  million  paid by United to purchase  2.0% of UAP from
          Kiwi Cable in December 1999.

We  had  $236.8  million  of  cash,  cash  equivalents  and  short-term   liquid
investments  on hand as of March 31,  2000.  On March 29,  2000,  we priced  the
Secondary  Offering of 20.0 million shares at A$8.50 ($5.20) per share for gross
and net proceeds (to be received in April 2000) of A$170.0  ($104.0) million and
A$167.5 ($102.4) million, respectively. These proceeds, in addition to borrowing
capacity  on the New Austar  Bank  Facility  and Saturn  Bank  Facility  and the
proceeds  from the Austar  United IPO,  will 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 THREE MONTHS ENDED MARCH 31, 2000

Cash and cash  equivalents  decreased  $0.9  million  from  $6.0  million  as of
December  31, 1999 to $5.1 million as of March 31,  2000.  Principal  sources of
cash  during  the  three  months  ended  March  31,  2000  included  the sale of
short-term  liquid  investments of $507.8 million,  borrowings on the Austar and
Saturn  Bank  Facilities  of $18.2  million,  borrowings  on other  debt of $3.1
million,  distribution from affiliated company of $1.6 million and other sources
totaling $0.5 million.

During the three months ended March 31, 2000, cash was used  principally for the
purchase of short-term  liquid  investments of $489.6 million,  the purchases of
property,  plant and  equipment  totaling  $29.2  million  as Austar  and Saturn
continue  to expand  their  businesses  into the data  market,  the  funding  of
operating  activities  of  $9.9  million  and  investments  in and  advances  to
affiliated companies of $2.6 million and other uses totaling $0.8 million.

FOR THE THREE MONTHS ENDED MARCH 31, 1999

Cash and cash equivalents remained the same at $0.2 million as of March 31, 1999
and December 31, 1998.  Principal  sources of cash during the three months ended
March 31,  1999  included  cash  contributions  from  parent  of $19.2  million,
borrowings  on other  debt of $18.9  million  and other  sources  totaling  $2.4
million.

                                       18
<PAGE>


During the three  months  ended March 31, 1999,  cash was used  principally  for
purchases of property,  plant and equipment  totaling  $22.0 million to continue
new subscriber connections at Austar and the build-out of existing projects, the
funding of operating activities of $12.2 million, investments in and advances to
affiliated companies of $5.2 million and other uses of $1.1 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 three months ended March 31, 2000.............   1.5898
     For the three months ended March 31, 1999.............   1.5729
     Spot rate as of March 31, 2000........................   1.6474
     Spot rate as of December 31, 1999.....................   1.5244

REVENUE.  Our revenue  increased  $15.9 million for the three months ended March
31, 2000 compared to the amount for the  corresponding  period in the prior year
as follows:

                                                     For the Three Months Ended
                                                               March 31,
                                                     ---------------------------
                                                        2000             1999
                                                     ----------       ----------
                                                            (In thousands)
     Austar United................................    $46,344          $30,432
                                                      -------          -------
          Total revenue...........................    $46,344          $30,432
                                                      =======          =======

AUSTAR UNITED

Revenue for Austar United increased $15.9 million,  or 52.3%, from $30.4 million
for the three months ended March 31, 1999 to $46.3  million for the three months
ended March 31, 2000. On a functional  currency basis,  Austar United's  revenue
increased  A$25.4 million,  from A$47.9 million for the three months ended March
31, 1999 to A$73.3  million for the three  months  ended March 31, 2000, a 53.0%
increase.  The increase in  multi-channel  television  revenue of  approximately
$11.3 million was primarily due to Austar's  subscriber growth (389,816 at March
31,  2000  compared  to 311,119 at March 31,  1999) as well as growth in premium
tiers,  resulting in an average  revenue per subscriber of A$53.42  ($33.60) for
the three months ended March 31, 2000 compared to A$50.46  ($31.74) for the same
period in the prior year. The remaining  increase of approximately  $4.6 million
in telephone and other revenue was primarily due to the  consolidation of Saturn
beginning August 1, 1999.

ADJUSTED  EBITDA.  Adjusted  EBITDA loss  decreased  $0.2  million for the three
months ended March 31, 2000  compared to the  corresponding  amount in the prior
year as follows:

                                                     For the Three Months Ended
                                                               March 31,
                                                     ---------------------------
                                                        2000             1999
                                                     ----------       ----------
                                                            (In thousands)

     Austar United................................    $(4,049)         $(3,454)
     Other........................................       (260)          (1,029)
                                                      -------          -------
          Total Adjusted EBITDA...................    $(4,309)         $(4,483)
                                                      =======          =======

AUSTAR UNITED

Austar United's  Adjusted EBITDA loss increased by $0.5 million,  or 14.3%, from
negative $3.5 million for the three months ended March 31, 1999 to negative $4.0
million for the three  months ended March 31,  2000.  On a  functional  currency
basis,  Austar  United's  Adjusted  EBITDA loss increased by A$1.1  million,  or
20.4%,  from negative A$5.4 million for the three months ended March 31, 1999 to
negative  A$6.5  million  for  the  three  months  ended  March  31,  2000.  The

                                       19
<PAGE>


multi-channel  television  Adjusted EBITDA improved by $4.4 million from year to
year due to Austar  achieving  incremental  sales growth while  keeping  certain
costs  fixed,  such  as  the  national  customer  operations  center,  corporate
management staff and media-related  marketing costs. This improvement was offset
by  increased   expenses  related  to  the  Internet  data  businesses  and  the
consolidation of Saturn beginning August 1, 1999.

CORPORATE  GENERAL  AND  ADMINISTRATIVE   EXPENSE.  Our  corporate  general  and
administrative  expense  increased  $1.7 million from $1.0 million for the three
months ended March 31, 1999 to $2.7 million for the three months ended March 31,
2000.  This increase was primarily  attributable  to a stock-based  compensation
charge of $2.5 million from the Austar United stock option plan  established  in
June 1999  ("Austar  United  Plan") for the three  months  ended March 31, 2000.
There was no stock-based compensation charge in first quarter 1999.

DEPRECIATION AND AMORTIZATION.  Depreciation and amortization  expense increased
$5.5 million for the three  months  ended March 31, 2000  compared to the amount
for the corresponding period in the prior year as follow:
<TABLE>
<CAPTION>
                                                          For the Three Months Ended
                                                                    March 31,
                                                          ---------------------------
                                                             2000             1999
                                                          ----------       ----------
                                                                (In thousands)
     <S>                                                   <C>               <C>
     Austar United.......................................  $30,027           $24,461
                                                           -------           -------
          Total depreciation and amortization expense....  $30,027           $24,461
                                                           =======           =======
</TABLE>

AUSTAR UNITED

Depreciation and amortization  expense for Austar United increased $5.5 million,
or 22.4%,  from $24.5 million for the three months ended March 31, 1999 to $30.0
million for the three  months ended March 31,  2000.  On a  functional  currency
basis,  Austar United's  depreciation and amortization  expense increased A$10.4
million, from A$37.1 million for the three months ended March 31, 1999 to A$47.5
million for the three months ended March 31,  2000, a 28.0%  increase.  The U.S.
dollar  increase was  negatively  impacted by $0.2 million due to fluctuation in
exchange  rates  between the three  months  ended March 31, 2000 and 1999.  This
increase is due to the consolidation of Saturn as of August 1, 1999.

GAIN ON ISSUANCE OF COMMON EQUITY  SECURITIES BY SUBSIDIARY.  On March 29, 2000,
Austar United successfully completed the 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,
respectively.  Based on the carrying value of our investment in Austar United as
of March 29,  2000,  we  recognized a gain of $66.8  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 $3.1 million from nil for the three
months ended March 31, 1999 to $3.1 million for the three months ended March 31,
2000.  The  increase  was  attributable  to the  increase in  short-term  liquid
investment balances due to the Austar United IPO.

INTEREST  EXPENSE.  Interest expense increased $4.4 million for the three months
ended March 31, 2000 compared to the amounts for the corresponding period in the
prior year.  This  increase  was  primarily  due to increased  interest  expense
related to the Austar  Bank  Facility of $4.9  million and $2.6  million for the
three  months  ended  March 31, 2000 and 1999,  respectively  due to higher loan
balances in 2000 and the consolidation of Saturn.

MINORITY  INTEREST IN SUBSIDIARY.  The minority  interests'  share of losses was
$9.6  million for the three months  ended March 31,  2000.  Austar  United's IPO
(July 1999) and its  Secondary  Offering  (March 2000)  reduced our ownership to
72.3% as of March 31, 2000. For accounting purposes,  we continue to consolidate
100% of the results of  operations  of Austar  United,  then deduct the minority
interests' share of income (losses) before arriving at net income (loss).


                                       20
<PAGE>


SHARE IN RESULTS OF  AFFILIATED  COMPANIES.  Our share in results of  affiliated
companies  totaled a loss of $0.6  million and $3.4 million for the three months
ended March 31, 2000 and 1999, respectively, as follows:

<TABLE>
<CAPTION>
                                                             For the Three Months Ended
                                                                       March 31,
                                                             ---------------------------
                                                                2000             1999
                                                             ----------       ----------
                                                                   (In thousands)
     <S>                                                       <C>              <C>
     XYZ Entertainment......................................   $(615)           $(1,402)
     Saturn (1).............................................       -             (1,970)
     Other..................................................      34                 .-
                                                               -----            -------
          Total share in results of affiliated companies....   $(581)           $(3,372)
                                                               =====            =======
</TABLE>

          (1)  During first quarter 1999,  the equity method of  accounting  was
               used to account  for  Saturn's  results  due to certain  minority
               shareholder  rights.  Effective  August 1, 1999, we increased our
               ownership  to  100%  and  began   consolidating  its  results  of
               operations.





                                       21

<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.  We also place our  short-term
investments in liquid  instruments that meet high credit quality  standards with
original  maturities at the date of purchase of between three and twelve months.
We also limit the amount of credit exposure 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 Notes),  Australian  dollars  (New Austar Bank  Facility)  and New
Zealand dollars (Saturn Bank Facility).
<TABLE>
<CAPTION>
                                                                             As of March 31, 2000
                                                                       -------------------------------
                                                                        Book Value         Fair Value
                                                                       -------------       -----------
                                                             (U.S. dollars, in thousands, except interest rates)
<S>                                                                      <C>                 <C>
Long-term and short-term  debt:
   Fixed rate USD denominated Notes...........................           $421,895            $452,205
      Average interest rate...................................               14.0%               12.1%
   Variable rate NZ$ denominated Saturn Bank Facility.........           $ 56,943            $ 56,943
      Average interest rate...................................                7.4%                7.4%
   Variable rate A$ denominated New Austar Bank Facility......           $201,530            $201,530
      Average interest rate...................................                7.9%                7.9%

</TABLE>



                                       22
<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 Notes),  Australian  dollars  (New Austar Bank  Facility)  and New
Zealand dollars (Saturn Bank Facility).
<TABLE>
<CAPTION>
                                                                          As of March 31, 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 Notes............ $  -       $  -      $    -    $     -    $     -     $421,895      $421,895
  Variable rate NZ$ denominated Saturn
    Bank Facility............................. $  -       $569      $4,555    $ 8,200    $11,389     $ 32,230      $ 56,943
  Variable rate A$ denominated New
    Austar Bank Facility...................... $  -       $  -      $7,054    $93,330    $89,319     $ 11,827      $201,530
</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 ($30.4) 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
($60.7) million of variable rate, long-term debt into fixed rate borrowings.  As
of March 31, 2000, the  weighted-average  fixed rate under these  agreements was
5.7% compared to a weighted-average variable rate of 5.5%.

In addition,  we have an interest rate swap to manage our exposure on the Saturn
Bank  Facility  which  effectively  converts an  aggregate  principal  amount of
NZ$60.6  ($30.1)  million  of  variable  rate,  long-term  debt into  fixed rate
borrowings.  The interest rate swap  includes an  increasing  fixed rate with an
additional  margin  which is  expected  to decline  as the debt to EBITDA  ratio
declines.  As of March 31, 2000,  the average fixed rate under the agreement was
6.3% compared to a weighted-average variable rate of 5.2%.

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.




                                       23
<PAGE>


PART II - OTHER INFORMATION

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

(a)   Exhibits

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

      10.2     Merger Agreement dated April 6, 2000, between THPL and Saturn.

      10.3     Warranty Agreement dated  April 6, 2000,  between  TCL  and AUCL.

      10.4     Offer to Acquire  Shares dated April 6, 2000,  between Saturn and
               THPL.

      27.1     Financial Data Schedule


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

     None.







                                       24
<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:       May 15, 2000
           -----------------------------------

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









                                       25