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 September 30, 2000

                                       or

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

               For the transition period from         to
                                              -------    -------
                          Commission File No. 333-05017

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

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

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

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







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

The Company has no  publicly-traded  shares of capital stock.  As of November 6,
2000, the Company had 17,810,299 shares of common stock outstanding.



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



                                                                                                                 Page
                                                                                                                Number
                                                                                                                ------

                                         PART I - FINANCIAL INFORMATION
                                         ------------------------------
<S>                                                                                                               <C>
Item 1 - Financial Statements
------

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

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

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

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

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


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

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



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

Item 6 - Exhibits and Reports on Form 8-K....................................................................     23
------

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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

                                                                                                            As of         As of
                                                                                                        September 30,  December 31,
                                                                                                            2000          1999
                                                                                                        -------------  ------------
ASSETS                                                                                                   (Unaudited)
<S>                                                                                                        <C>           <C>
Current assets:
  Cash and cash equivalents............................................................................   $  2,961       $  6,028
  Short-term liquid investments........................................................................    226,871        269,393
  Subscriber receivables, net..........................................................................     14,788          8,177
  Related party receivables............................................................................      3,057          1,645
  Other receivables....................................................................................     11,577          6,196
  Inventory............................................................................................      7,124         14,193
  Prepaids and other current assets....................................................................      7,230          5,146
                                                                                                          --------       --------
       Total current assets............................................................................    273,608        310,778
Investments in and advances to affiliated companies, accounted for under the equity method, net........     73,944         28,546
Property, plant and equipment, net of accumulated depreciation of $263,612 and $261,891,
 respectively..........................................................................................    104,461        219,394
Goodwill and other intangible assets, net of accumulated amortization of $23,027 and $23,536,
 respectively..........................................................................................     70,330         91,346
Deferred financing costs, net of accumulated amortization of $5,911 and $4,427, respectively...........     11,569         16,377
Other non-current assets, net..........................................................................        359            150
                                                                                                          --------       --------
       Total assets....................................................................................   $534,271       $666,591
                                                                                                          ========       ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable.....................................................................................   $  7,468       $ 16,463
  Accrued liabilities..................................................................................     33,272         32,151
  Construction payables................................................................................          -          4,370
  Current portion of due to parent.....................................................................     16,520         12,754
  Current portion of other long-term debt..............................................................        812          1,500
                                                                                                          --------       --------
       Total current liabilities.......................................................................     58,072         67,238
Due to parent..........................................................................................      7,837          9,621
Senior discount notes..................................................................................    451,268        407,945
Other long-term debt...................................................................................    218,721        261,151
Deferred tax liability.................................................................................          -          1,014
Other long-term liabilities............................................................................        338            456
                                                                                                          --------       --------
       Total liabilities...............................................................................    736,236        747,425
                                                                                                          --------       --------

Minority interests in subsidiaries.....................................................................     79,873         95,820
                                                                                                          --------       --------

Stockholders' deficit:
  Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued and outstanding...........          -              -
  Common stock, $0.01 par value, 30,000,000 shares authorized, 17,810,299 shares issued
   and outstanding.....................................................................................        178            178
  Additional paid-in capital...........................................................................    306,705        306,616
  Deferred compensation................................................................................    (15,358)       (19,859)
  Accumulated deficit..................................................................................   (513,679)      (440,649)
  Other cumulative comprehensive loss..................................................................    (59,684)       (22,940)
                                                                                                          --------       --------
       Total stockholders' deficit.....................................................................   (281,838)      (176,654)
                                                                                                          --------       --------
       Total liabilities and stockholders' deficit.....................................................   $534,271       $666,591
                                                                                                          ========       ========

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

                                                            2
<PAGE>
<TABLE>
<CAPTION>

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

                                                                               For the Three Months Ended  For the Nine Months Ended
                                                                                      September 30,              September 30,
                                                                               --------------------------  -------------------------
                                                                                   2000          1999         2000          1999
                                                                               -----------    -----------  ----------    -----------
<S>                                                                            <C>            <C>          <C>           <C>

Revenue......................................................................  $   43,913     $   41,745   $  132,804    $  106,565

System operating expense, including related party expense of $602,
 $112, $1,822 and $3,636, respectively.......................................     (39,184)       (28,397)    (108,343)      (75,842)
System selling, general and administrative expense...........................     (17,117)       (13,587)     (47,380)      (35,928)
Corporate general and administrative expense, including management fees
 and allocated expense from related party of $255, $1,549, $740 and $21,197,
 respectively................................................................      (2,244)        (2,833)      (7,521)      (22,610)
Depreciation and amortization................................................     (24,842)       (25,086)     (79,639)      (75,029)
                                                                               ----------     ----------   ----------    ----------
       Operating loss........................................................     (39,474)       (28,158)    (110,079)     (102,844)

Gain on issuance of common equity securities by subsidiary...................           -        226,951       61,172       249,249
Interest income..............................................................       4,425          2,430       12,673         2,497
Interest expense.............................................................     (20,651)       (17,635)     (59,620)      (50,672)
Other expense, net...........................................................      (4,439)           413       (6,800)       (5,353)
                                                                               ----------     ----------   ----------    ----------
       (Loss) income before income taxes and other items.....................     (60,139)       184,001     (102,654)       92,877

Income tax (expense) benefit.................................................         (38)             -          703             -
Minority interests in subsidiaries...........................................      17,273          5,594       43,486         5,594
Share in results of affiliated companies, net................................      (6,199)        (4,175)     (14,565)      (12,855)
                                                                               ----------     ----------   ----------    ----------
       Net loss..............................................................  $  (49,103)    $  185,420   $  (73,030)   $   85,616
                                                                               ==========     ==========   ==========    ==========

Foreign currency translation adjustments.....................................  $  (17,004)    $    2,458   $  (36,744)   $    5,838
                                                                               ----------     ----------   ----------    ----------
       Comprehensive (loss) income...........................................  $  (66,107)    $  187,878   $ (109,774)   $   91,454
                                                                               ==========     ==========   ==========    ==========

Net (loss) income per common share:
       Basic net (loss) income ..............................................  $    (2.76)    $    10.41   $    (4.10)   $     4.81
                                                                               ==========     ==========   ==========    ==========
       Diluted net (loss) income ............................................  $    (2.76)    $    10.13   $    (4.10)   $     4.68
                                                                               ==========     ==========   ==========    ==========

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





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

                                                            3
<PAGE>
<TABLE>
<CAPTION>

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


                                                                                                            Other
                                             Common Stock       Additional                                Cumulative
                                         --------------------    Paid-In      Deferred     Accumulated   Comprehensive
                                           Shares      Amount    Capital    Compensation     Deficit        Loss(1)        Total
                                         ----------  --------   ----------  ------------   -----------   -------------   ---------
<S>                                      <C>           <C>       <C>          <C>           <C>            <C>           <C>

Balances, December 31, 1999............. 17,810,299    $178      $306,616     $(19,859)     $(440,649)     $(22,940)     $(176,654)

Cash contributions from parent..........          -       -            89            -              -             -             89

Amortization of deferred compensation...          -       -             -        4,501              -             -          4,501

Net loss................................          -       -             -            -        (73,030)            -        (73,030)

Change in cumulative translation
 adjustments............................          -       -             -            -              -       (36,744)       (36,744)
                                         ----------    ----      --------     --------      ---------      --------      ---------
Balances, September 30, 2000
 (Unaudited)............................ 17,810,299    $178      $306,705     $(15,358)     $(513,679)     $(59,684)     $(281,838)
                                         ==========    ====      ========     ========      =========      ========      =========




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


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

                                                            4
<PAGE>
<TABLE>
<CAPTION>

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

                                                                                                    For the Nine Months Ended
                                                                                                          September 30,
                                                                                                  -------------------------------
                                                                                                      2000               1999
                                                                                                  ------------       ------------
<S>                                                                                               <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income...............................................................................  $  (73,030)          $ 85,616
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
  Gain on issuance of common equity securities by subsidiary....................................     (61,172)          (249,249)
  Share in results of affiliated companies, net.................................................       9,765              6,477
  Minority interests in subsidiaries............................................................     (43,486)            (5,594)
  Depreciation and amortization.................................................................      79,639             75,029
  Allocation of expense accounted for as capital contributions by parent........................           -              2,391
  Stock-based compensation expense..............................................................       6,685             18,894
  Accretion of interest on senior notes and amortization of deferred financing costs............      46,052             41,647
  Increase in receivables, net..................................................................     (19,647)            (1,165)
  (Increase) decrease in other assets...........................................................      (5,198)             4,934
  Increase in accounts payable, accrued liabilities and other...................................      15,719              8,455
                                                                                                  ----------           --------
Net cash flows from operating activities........................................................     (44,673)           (12,565)
                                                                                                  ----------           --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term liquid investments.......................................................  (1,496,275)          (270,044)
Sale of short-term liquid investments...........................................................   1,491,999              1,444
Investments in and advances to affiliated companies and acquisition of assets...................      (5,155)            (5,177)
Deconsolidation/Consolidation of New Zealand subsidiary.........................................         (52)               613
New acquisitions, net of cash acquired..........................................................      (4,551)                 -
Dividend received from affiliate................................................................       3,197                  -
Capital expenditures............................................................................     (77,304)           (83,516)
Spectrum license fees...........................................................................     (29,927)                 -
Other...........................................................................................        (717)            (3,930)
                                                                                                  ----------           --------
Net cash flows from investing activities........................................................    (118,785)          (360,610)
                                                                                                  ----------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contributed from parent....................................................................          89             29,639
Proceeds from issuance of common equity securities by subsidiary................................     102,403            294,338
Borrowings on the New Austar Bank Facility and Saturn Bank Facility.............................      57,587            198,168
Payment of the Austar Bank Facility.............................................................           -           (129,149)
(Payment) borrowings on capital leases and other debt...........................................         632               (597)
Deferred financing costs and other..............................................................         670             (8,056)
                                                                                                  ----------           --------
Net cash flows from financing activities........................................................     161,381            384,343
                                                                                                  ----------           --------

EFFECT OF EXCHANGE RATES ON CASH................................................................        (990)             1,523
                                                                                                  ----------           --------
DECREASE IN CASH AND CASH EQUIVALENTS...........................................................      (3,067)            12,691
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..................................................       6,028                181
                                                                                                  ----------           --------
CASH AND CASH EQUIVALENTS, END OF PERIOD........................................................  $    2,961           $ 12,872
                                                                                                  ==========           ========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest..........................................................................  $   11,006           $  5,611
                                                                                                  ==========           ========
Cash received for interest......................................................................  $   14,516           $     28
                                                                                                  ==========           ========

DECONSOLIDATION/CONSOLIDATION OF NEW ZEALAND SUBSIDIARY:
Working capital.................................................................................  $   (7,319)          $ 10,162
Property, plant and equipment...................................................................      93,202            (80,656)
Recording of investment in Saturn...............................................................     (62,857)            21,974
Goodwill and other assets.......................................................................      35,451             (5,737)
Notes payable and other debt....................................................................     (58,529)            54,870
                                                                                                  ----------           --------
Total cash relinquished.........................................................................  $      (52)          $    613
                                                                                                  ==========           ========


                 The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                                            5
<PAGE>


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

1.   ORGANIZATION AND NATURE OF OPERATIONS

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

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

     (1)  United Austar,  Inc. is a holding company for United A/P's  investment
          in Austar United Communications  Limited.
     (2)  On April 6, 2000, Saturn Communications Limited ("Saturn") merged with
          Telstra New Zealand Limited ("Telstra NZ"), a wholly-owned  subsidiary
          of Telstra Corporation Limited ("Telstra").

                                       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 generally  accepted
accounting  principles 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.  During the first seven months of 1999,  the Company
accounted  for its  investment  in Saturn  under the  equity  method in order to
comply with the consensus  guidance of the Emerging  Issues Task Force regarding
Issue 96-16 ("EITF  96-16"),  and related rules of the  Securities  and Exchange
Commission ("SEC"),  because the minority  shareholder of Saturn ("SaskTel") had
participating  approval  or veto  rights  with  respect to  certain  significant
decisions of Saturn in the ordinary  course of  business.  Immediately  prior to
Austar  United's  initial public offering  ("Austar United IPO"),  Austar United
issued 13,659,574 shares of Austar United to SaskTel for their 35.0% interest in
Saturn  and began  consolidating  Saturn's  results  effective  August 1,  1999.
Effective  April 1, 2000,  the  Company  again  discontinued  consolidating  the
results of Saturn due to the formation of TSL, a 50/50 joint  venture,  which is
accounted for under the equity method.

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

CASH AND CASH EQUIVALENTS AND SHORT-TERM LIQUID INVESTMENTS

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

INVENTORIES

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

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

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

PROPERTY, PLANT AND EQUIPMENT

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

                                       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.  Spectrum  license  fees are
amortized over the life of the agreement, up to a maximum of 15 years.

RECOVERABILITY AMOUNTS OF TANGIBLE AND INTANGIBLE ASSETS

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

DEFERRED FINANCING COSTS

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

REVENUE RECOGNITION

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

STOCK-BASED COMPENSATION

Stock-based  compensation is recognized using the intrinsic value method for the
Austar United stock option plan,  which results in compensation  expense for the
difference  between the grant price and the fair market value of Austar United's
common stock on the initial  public  offering date of July 27, 1999, 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  issuable  common stock,  but only if dilutive.  The
Company's  warrants are included in the Company's  diluted net income (loss) per
share amounts for the three and nine months ended September 30, 1999.

FOREIGN OPERATIONS AND FOREIGN EXCHANGE RATE RISK

The functional  currency for the Company's foreign  operations is the applicable
local currency for each  affiliate  company.  Assets and  liabilities of foreign
subsidiaries  are translated at exchange rates in effect at period-end,  and the

                                       8
<PAGE>

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

statements of operations are translated at the average exchange rates during the
period.  Exchange rate  fluctuations on translating  foreign currency  financial
statements  into U.S.  dollars  that  result in  unrealized  gains or losses are
referred to as translation  adjustments.  Cumulative translation adjustments are
recorded as a separate  component of  stockholders'  deficit and are included in
other cumulative comprehensive loss.

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

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

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

NEW ACCOUNTING PRINCIPLES

The Financial  Accounting  Standards Board ("FASB") recently issued Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities" ("SFAS 133"),  which requires that companies  recognize
all  derivatives  as either assets or  liabilities  in the balance sheet at fair
value.  Under  SFAS  133,  accounting  for  changes  in fair  market  value of a
derivative  depends on its intended use and designation.  In June 1999, the FASB
approved Statement of Financial  Accounting  Standards No. 137,  "Accounting for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of FASB  Statement No. 133 ("SFAS 137").  SFAS 137 amends the effective  date of
SFAS 133, which will now be effective for the Company's  first quarter 2001. The
impact of adopting SFAS 133 is not expected to be material.

In December  1999,  the SEC staff  issued  Staff  Accounting  Bulletin  No. 101,
"Revenue  Recognition" ("SAB 101"), which provides  interpretive guidance on the
recognition,  presentation  and  disclosure of revenue in financial  statements.
Implementation  of SAB 101 is  required  for the  fourth  quarter  of 2000.  The
Company has assessed the effect of this new standard and does not expect it will
have a material effect on its financial position or results of operation.

RECLASSIFICATIONS

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

3.   ACQUISITIONS AND OTHER

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

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

                                       9
<PAGE>

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

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

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

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

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

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

4.   INVESTMENTS  IN AND ADVANCES TO AFFILIATED  COMPANIES,  ACCOUNTED FOR UNDER
     THE EQUITY METHOD
<TABLE>
<CAPTION>                                                             As of September 30, 2000
                                          -------------------------------------------------------------------------------------
                                            Investments in                     Cumulative Share      Cumulative
                                            and Advances to      Dividends       in Results of       Translation
                                          Affiliated Companies   Received    Affiliated Companies    Adjustments      Total
                                          --------------------   ---------   --------------------    -----------   ------------
                                                                            (In thousands)
     <S>                                       <C>               <C>             <C>
     XYZ Entertainment..................       $ 44,306          $(3,197)        $(13,206)            $(2,515)       $25,388
     TSL................................         66,624                -          (14,257)             (6,116)        46,251
     Other..............................          2,879                -             (120)               (454)         2,305
                                               --------          -------         --------             -------        -------
         Total..........................       $113,809          $(3,197)        $(27,583)            $(9,085)       $73,944
                                               ========          =======         ========             =======        =======

                                                                        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
                                                                                 September 30,   December 31,
                                                                                     2000           1999
                                                                                 -------------   ------------
                                                                                        (In thousands)
    <S>                                                                            <C>             <C>
     Subscriber premises equipment and converters...............................   $264,324        $276,725
     MMDS/DTH distribution facilities...........................................     57,686          64,373
     Cable distribution networks................................................      1,817          91,298
     Office equipment, furniture and fixtures...................................     21,100          23,111
     Buildings and leasehold improvements.......................................      4,103           5,645
     Other......................................................................     19,043          20,133
                                                                                   --------        --------
                                                                                    368,073         481,285
        Accumulated depreciation................................................   (263,612)       (261,891)
                                                                                   --------        --------
        Net property, plant and equipment.......................................   $104,461        $219,394
                                                                                   ========        ========
</TABLE>
                                       10
<PAGE>

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


6.   GOODWILL AND OTHER INTANGIBLE ASSETS
<TABLE>
<CAPTION>                                                                            As of          As of
                                                                                 September 30,   December 31,
                                                                                     2000           1999
                                                                                 -------------   ------------
                                                                                        (In thousands)
    <S>                                                                            <C>             <C>
    Austar United...............................................................   $ 93,357        $114,882
      Accumulated amortization..................................................    (23,027)        (23,536)
                                                                                   --------        --------
      Net goodwill and other intangible assets..................................   $ 70,330        $ 91,346
                                                                                   ========        ========
</TABLE>
7.   SENIOR DISCOUNT NOTES
<TABLE>
<CAPTION>                                                                            As of          As of
                                                                                 September 30,   December 31,
                                                                                     2000           1999
                                                                                 -------------   ------------
                                                                                        (In thousands)
    <S>                                                                            <C>             <C>
    May 1996 Notes .............................................................   $409,096        $369,111
    September 1997 Notes .......................................................     42,172          38,834
                                                                                   --------        --------
      Total senior discount notes...............................................   $451,268        $407,945
                                                                                   ========        ========
</TABLE>

8.   OTHER LONG-TERM DEBT
<TABLE>
<CAPTION>                                                                            As of          As of
                                                                                 September 30,   December 31,
                                                                                     2000           1999
                                                                                 -------------   ------------
                                                                                        (In thousands)
    <S>                                                                            <C>             <C>
    New Austar Bank Facility....................................................   $217,096        $202,703
    Saturn Bank Facility........................................................          -          57,685
    Capitalized leases and other................................................      2,437           2,263
                                                                                   --------        --------
                                                                                    219,533         262,651
    Less current portion........................................................       (812)         (1,500)
                                                                                   --------        --------
      Total other long-term debt................................................   $218,721        $261,151
                                                                                   ========        ========
</TABLE>
OTHER FINANCIAL INSTRUMENTS

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

Currently,  the Company has four  interest  rate swaps to manage  interest  rate
exposure on Austar's  syndicated  senior  secured debt facility (the "New Austar
Bank  Facility").  Two of these swap  agreements  expire in 2002 and effectively
convert an  aggregate  principal  amount of A$50.0  ($27.1)  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  ($54.3)
million of  variable  rate,  long-term  debt into fixed rate  borrowings.  As of
September 30, 2000, the  weighted-average  fixed rate under these agreements was
5.7% compared to a weighted-average variable rate of approximately 8.8%.

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.

                                       11
<PAGE>

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


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
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 nine months ended September 30, 2000 and 1999, the Company recorded $0.7
million and $0.7 million,  respectively, in management fees due from the Company
to UAP. In 1999, the Company also recorded $18.9 million of non-cash stock-based
compensation  expense related to UAP stock appreciation  rights and $2.9 million
of other corporate general and administrative expense.

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

Austar and Saturn  were  parties to  technical  assistance  agreements  with UAP
whereby  such  operating  companies  paid to UAP fees based on their  respective
gross revenues. The operating systems reimbursed United for certain direct costs
incurred  by  United,   including  salaries  and  benefits  relating  to  senior
management  positions,  pursuant  to  the  terms  of  the  technical  assistance
agreements.  For the nine months ended September 30, 1999, the Company  recorded
$3.6 million in related party management fees under these agreements.  Effective
June 24, 1999, the rights under these management fee agreements were assigned to
Austar  United as part of the  restructuring  associated  with the Austar United
IPO. Accordingly, the related party management fees recorded for the nine months
ended September 30, 2000 were eliminated during the Austar United consolidation.

Included in the amount due to parent is the following:
<TABLE>
<CAPTION>
                                                                                     As of          As of
                                                                                 September 30,   December 31,
                                                                                     2000           1999
                                                                                 -------------   ------------
                                                                                        (In thousands)
    <S>                                                                            <C>             <C>
    United A/P..................................................................   $  2,717        $  1,977
    Austar United technical assistance agreement obligations, including
      management fees of $3,000 and $1,200, respectively........................      7,635           2,874
    Austar technical assistance agreement obligations, including deferred
      management fees of $7,837 and $9,472, respectively (1)....................     12,721          13,889
    Saturn technical assistance agreement obligations, including deferred
      management fees of $0 and $149, respectively..............................          -           1,820
    Other.......................................................................      1,284           1,815
                                                                                   --------        --------
                                                                                     24,357          22,375
         Less current portion...................................................    (16,520)        (12,754)
                                                                                   --------        --------
         Total due to parent....................................................   $  7,837        $  9,621
                                                                                   ========        ========
</TABLE>
(1)  Austar United and UAP have the option of converting  these  management fees
     into equity.

                                       12
<PAGE>

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

10.   SEGMENT INFORMATION

The Company's segment information is as follows:
<TABLE>
<CAPTION>
                                                                                                                 As of       As of
                                                                                                               Sept. 30,    Dec. 31,
               For the Three Months Ended September 30, 2000  For the Nine Months Ended September 30, 2000       2000        1999
               ---------------------------------------------  ---------------------------------------------   ----------  ----------
                                  Internet                                      Internet                        Total       Total
                Video  Telephone    Data    Other    Total    Video  Telephone    Data     Other     Total      Assets      Assets
               ------- ---------- -------- -------  -------- ------- ---------  --------- -------   -------   ----------  ----------
                                (In thousands)                               (In thousands)
<S>            <C>      <C>      <C>      <C>      <C>       <C>       <C>      <C>       <C>       <C>        <C>         <C>
Revenue:
 Australia.... $41,859  $    -  $  1,225  $   829  $ 43,913  $124,396  $     -  $  1,654   $ 1,866  $127,916   $508,900    $563,627
 New Zealand..       -       -         -        -         -       844    3,166       878         -     4,888          -      76,139
 Other........       -       -         -        -         -         -        -         -         -         -     25,371      26,825
               -------  ------  --------  -------  --------  --------  -------  --------   -------  --------   --------    --------
   Total...... $41,859  $    -  $  1,225  $   829  $ 43,913  $125,240  $ 3,166  $  2,532   $ 1,866  $132,804   $534,271    $666,591
               =======  ======  ========  =======  ========  ========  =======  ========   =======  ========   ========    ========
Adjusted
EBITDA:(1)
 Australia.... $   608  $ (777) $(12,829) $   611  $(12,387) $  3,830  $  (903) $(23,190)  $  (949) $(21,212)
 New Zealand..       -       -         -        -         -      (253)    (357)      248    (1,344)   (1,706)
 Other........       -       -         -     (278)     (278)        -        -         -      (837)     (837)
               -------  ------  --------  -------  --------  --------  -------  --------   -------  --------
   Total...... $   608  $ (777) $(12,829) $   333  $(12,665) $  3,577  $(1,260) $(22,942)  $(3,130) $(23,755)
               =======  ======  ========  =======  ========  ========  =======  ========   =======  ========


               For the Three Months Ended September 30, 1999  For the Nine Months Ended September 30, 1999
               ---------------------------------------------  ---------------------------------------------
                                   Internet                                     Internet
                Video  Telephone     Data    Other   Total     Video  Telephone   Data     Other    Total
               ------- ----------  -------- ------- --------  ------- --------- --------- -------  --------
                                (In thousands)                               (In thousands)
Revenue:
 Australia.... $39,596  $    -  $      -  $     -  $ 39,596  $104,416  $     -  $      -   $     -  $104,416
 New Zealand..     350   1,569       230        -     2,149       350    1,569       230         -     2,149
               -------  ------  --------  -------  --------  --------  -------  --------   -------  --------
   Total...... $39,946  $1,569  $    230  $     -  $ 41,745  $104,766  $ 1,569  $    230   $     -  $106,565
               =======  ======  ========  =======  ========  ========  ======== ========   =======  ========

Adjusted
EBITDA:(1)
 Australia.... $   814  $    -  $      -  $  (111) $    703  $   (627) $     -  $      -   $(3,636) $ (4,263)
 New Zealand..    (562)   (246)      (24)       -      (832)     (562)    (246)      (24)        -      (832)
 Other........       -       -         -   (1,679)   (1,679)        -        -         -    (3,826)   (3,826)
               -------  ------  --------  -------  --------  --------  -------  --------   -------  --------
   Total...... $   252  $ (246) $    (24) $(1,790) $ (1,808) $ (1,189) $  (246) $    (24)  $(7,462) $ (8,921)
               =======  ======  ========  =======  ========  ========  =======  ========   =======  ========

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

                                       13
<PAGE>

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

Adjusted  EBITDA  reconciles  to the  consolidated  statement of  operations  as
follows:
<TABLE>
<CAPTION>
                                                                      For the Three Months Ended     For the Nine Months Ended
                                                                            September 30,                  September 30,
                                                                      --------------------------     -------------------------
                                                                         2000            1999           2000           1999
                                                                      ----------      ----------     ----------     ----------
                                                                            (In thousands)                 (In thousands)
                                                                       <S>            <C>             <C>          <C>
     Operating loss................................................    $(39,474)      $(28,158)       $(110,079)   $(102,844)
     Depreciation and amortization.................................      24,842         25,086           79,639       75,029
     Non-cash stock-based compensation expense.....................       1,967          1,264            6,685       18,894
                                                                       --------       --------        ---------    ---------
          Consolidated Adjusted EBITDA.............................    $(12,665)      $ (1,808)       $ (23,755)   $  (8,921)
                                                                       ========       ========        =========    =========
</TABLE>

11.   SUBSEQUENT EVENTS

On October 6, 2000,  Austar  United  finalized an  agreement to acquire  certain
assets of eisa Limited, a Melbourne based Internet service provider,  for A$13.0
($6.9) million.

On October 19,  2000,  TVSN  Limited  ("TVSN")  shareholders  voted to accept an
alliance between TVSN and Austar United. Austar United will receive 50.0% of the
shares  in  TVSN,  on a  fully  diluted  basis,  in  return  for  procuring  its
subsidiaries to carry the TVSN content.  In addition,  Austar United  subscribed
for a  convertible  note in TVSN  for  A$20.0  ($10.4)  million.  TVSN  used the
proceeds to repay the A$10.0 ($5.2) million loan plus accrued interest to Austar
United.

On October 23, 2000,  Austar United  announced an agreement with  Television and
Radio  Broadcasting  Services Pty. Limited ("TARBS") to acquire certain spectrum
rights for A$140.0 ($73.7) million in cash. Austar United has paid A$14.0 ($7.4)
million and an additional  A$96.0  ($50.5)  million will be paid upon receipt of
various  governmental  approvals  which are expected in the fourth quarter 2000.
The balance due of A$30.0 ($15.8)  million plus interest is payable on or before
August 31, 2001.

                                       14
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
--------------------------------------------------------------------------------

The following  discussion and analysis of our financial condition and results of
operations  should  be read  in  conjunction  with  our  condensed  consolidated
financial  statements and related notes thereto included elsewhere herein.  Such
condensed  consolidated  financial  statements  provide  additional  information
regarding our financial  activities  and condition.  Certain  statements in this
report may  constitute  "forward-looking  statements"  within the meaning of the
federal  securities  laws. Such  forward-looking  statements may include,  among
other things,  statements  concerning our plans,  objectives and future economic
prospects,  expectations,  beliefs,  future  plans and  strategies,  anticipated
events  or  trends  and  similar  expressions  concerning  matters  that are not
historical  facts.  Such  forward-looking  statements  involve known and unknown
risks,  uncertainties  and other  factors  which may cause the  actual  results,
performance or achievements of the Company (or entities in which the Company has
interests),  or industry  results,  to be materially  different  from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements. Such factors include, among other things, changes in
television   viewing   preferences  and  habits  by  subscribers  and  potential
subscribers,  their acceptance of new technology,  programming  alternatives and
new services  offered by the Company,  including  telephony and Internet  access
services,  our  ability to secure  adequate  capital to fund  system  growth and
development,  our ability to close pending  acquisitions and properly  integrate
acquired  businesses with our current  operations,  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.


                                       15
<PAGE>


SUMMARY OPERATING DATA

The following tables set forth certain unaudited operating data:
<TABLE>
<CAPTION>
                                                                 As of September 30, 2000
                                                 ---------------------------------------------------------
                                                  Television                    Basic
                                                   Homes in       Homes      Subscribers/        Basic
                                                 Service Area     Passed        Lines         Penetration
                                                 ------------    ---------   -------------    ------------
<S>                                                <C>           <C>           <C>               <C>
Video subscribers:
  Austar........................................   2,085,000     2,083,108       427,012         20.5%
  TSL...........................................     141,000        94,484        20,079         21.3%
                                                   ---------     ---------     ---------
       Total....................................   2,226,000     2,177,592       447,091
                                                   ---------     ---------     ---------
Telephone lines:
  TSL - Residential.............................     141,000        94,484        30,308         32.1%
  TSL - Business................................         N/A           N/A         3,960          N/A
                                                   ---------     ---------     ---------
       Total....................................                                  34,268
                                                                               ---------
Programming subscribers:
  XYZ Entertainment.............................         N/A           N/A     1,056,465(1)       N/A
                                                   ---------     ---------     ---------
Data subscribers:
  TSL ..........................................         N/A           N/A        40,863          N/A
  Austar United Broadband.......................         N/A           N/A        24,859          N/A
                                                   ---------     ---------     ---------
       Total....................................                                  65,722
                                                                               ---------

                                                                 As of September 30, 1999
                                                 ---------------------------------------------------------
                                                  Television                    Basic
                                                   Homes in       Homes      Subscribers/        Basic
                                                 Service Area     Passed        Lines         Penetration
                                                 ------------    ---------   -------------    ------------
Video subscribers:
  Austar........................................   2,085,000     2,083,108       360,708         17.3%
  Saturn........................................     141,000        83,582        13,907         16.6%
                                                   ---------     ---------     ---------
       Total....................................   2,226,000     2,166,690       374,615
                                                   ---------     ---------     ---------
Telephone lines:
  Saturn - Residential..........................     141,000        83,071        18,637         22.4%
  Saturn - Business.............................         N/A           N/A         1,910          N/A
                                                   ---------     ---------     ---------
       Total....................................                                  20,547
                                                                               ---------
Programming subscribers:
XYZ Entertainment...............................         N/A           N/A       870,972(1)       N/A
                                                   ---------     ---------     ---------

Data subscribers:
  Saturn........................................         N/A           N/A         4,826          N/A
                                                   ---------     ---------     ---------
</TABLE>

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

                                       16
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2000, we had invested  approximately  $466.3  million in our
projects.  These fundings do not include  amounts  contributed  by  shareholders
other than UAP and the Company,  proceeds from the  Australian  IPO or Secondary
Offering,  the operating  subsidiary bank  borrowings or amounts  contributed in
either cash or stock to acquire additional economic interests.
<TABLE><CAPTION>
                                                                                        As of
                                                                                    September 30,
      Sources of Fundings:                                                              2000
                                                                                    -------------
                                                                                    (In thousands)
      <S>                                                                              <C>
      Senior discount notes proceeds, net of offering costs........................    $244,652
      Cash contributions and other equity from parent (1) (2)......................     214,576
      Cash received for interest...................................................       7,102
                                                                                       --------
           Total...................................................................    $466,330
                                                                                       ========

                                                                                        As of
                                                                                    September 30,
      Uses of Fundings:                                                                 2000
                                                                                    -------------
                                                                                    (In thousands)
      Austar (1)...................................................................    $349,429
      Saturn.......................................................................      44,612
      XYZ Entertainment............................................................      16,481
      Other (2)....................................................................      55,808
                                                                                       --------
           Total...................................................................    $466,330
                                                                                       ========
</TABLE>
     (1)  Includes  issuance/use  of $29.8  million  and $6.2  million in United
          convertible preferred stock in 1995 and 1998, respectively, to acquire
          additional economic interests in Australia.
     (2)  Includes  $17.2  million  paid by United to purchase  2.0% of UAP from
          Kiwi Cable in December 1999.

We  had  $229.8  million  of  cash,  cash  equivalents  and  short-term   liquid
investments  on hand as of  September  30,  2000.  This  cash  has been and will
continue  to be used to expand  Austar  United's  customer  base,  complete  the
build-out  of  its  network  and  introduce  new  services  such  as  telephone,
Internet/data and interactive television.

In September  2000,  TSL  completed a NZ$900.0  ($367.3)  million debt  facility
agreement  (the "TSL Bank  Facility") to refinance  NZ$300.0  ($122.4)  million,
finance  capital  expenditures  to build the cable network in New Zealand and to
acquire  spectrum and other  businesses.  The facility  consists of Tranche A of
NZ$380.0  ($155.1)  and Tranche B of  NZ$520.0($212.2)  million and  requires an
equity  contribution from Telstra and Austar United of NZ$0.50 for every NZ$1.00
of Tranche B debt drawn.  The interest  rate on the facility is a floating  rate
plus a 1.75%  margin.  As of October  31,  2000,  the balance on the Saturn Bank
Facility,  which will be  refinanced  with the TSL Bank  Facility,  was NZ$265.0
($108.1) million.  The first draw on the new facility will occur on November 10,
2000 in the amount of NZ$315.0 ($128.6) million.

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000

Cash and cash  equivalents  decreased  $3.0  million  from  $6.0  million  as of
December 31, 1999 to $3.0 million as of September 30, 2000. Principal sources of
cash during the nine months ended September 30, 2000 included  proceeds from the
issuance  of  common  equity  securities  by a  subsidiary  of  $102.4  million,
borrowings  on the New Austar Bank  Facility of $57.6  million and other sources
totaling $4.6 million.

During the nine months ended September 30, 2000,  cash was used  principally for
capital  expenditures  of $77.3  million  as  Austar  continues  to  expand  its
businesses  into the data market,  the funding of operating  activities of $44.7
million,  spectrum license fees of $29.9 million to convert five year agreements
to fifteen, investments in and advances to affiliated companies of $5.1 million,
new  acquisitions  of $4.6 million,  the net cash invested in short-term  liquid
investments of $4.3 million and other uses totaling $1.7 million.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

Cash and cash  equivalents  increased  $12.7  million  from $0.2  million  as of
December 31, 1998 to $12.9 million as of September 30, 1999.  Principal  sources
of cash during the nine months ended  September 30, 1999 included  proceeds from
the Australian IPO of $294.3 million, borrowings on the New Austar Bank Facility
and the Saturn Bank Facility of $198.2 million,  cash  contributions from parent

                                       17
<PAGE>

of $29.6  million  and other  investing  and  financing  sources  totaling  $2.1
million.

During the nine months ended September 30, 1999,  cash was used  principally for
the net cash  invested  in  short-term  liquid  investments  of $268.6  million,
payment of the Austar Bank  Facility  of $129.1  million,  capital  expenditures
totaling $83.5 million to continue new subscriber  connections at Austar and the
build-out of existing  projects,  the funding of operating  activities  of $12.6
million,  deferred financing costs of $8.1 million,  investments in and advances
to affiliated companies of $5.2 million and other uses totaling $4.4 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 nine months ended September 30, 2000.............   1.6822
     For the nine months ended September 30, 1999.............   1.5336
     Spot rate as of September 30, 2000.......................   1.8425
     Spot rate as of December 31, 1999........................   1.5244

REVENUE.  Our revenue increased $2.2 million and $26.2 million for the three and
nine months ended September 30, 2000, respectively,  compared to the amounts for
the corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                                      For the Three Months Ended     For the Nine Months Ended
                                                                            September 30,                  September 30,
                                                                      --------------------------     -------------------------
                                                                         2000            1999           2000           1999
                                                                      ----------      ----------     ----------     ----------
                                                                            (In thousands)                 (In thousands)
                                                                       <S>             <C>           <C>             <C>
     Austar United..................................................   $43,913         $41,745       $132,804        $106,565
                                                                       -------         -------       --------        --------
          Total revenue.............................................   $43,913         $41,745       $132,804        $106,565
                                                                       =======         =======       ========        ========
</TABLE>

AUSTAR UNITED

Revenue for Austar United  increased $2.2 million,  or 5.3%,  from $41.7 million
for the three months  ended  September  30, 1999 to $43.9  million for the three
months ended September 30, 2000. On a functional currency basis, Austar United's
revenue increased A$12.0 million, from A$64.5 million for the three months ended
September  30, 1999 to A$76.5  million for the three months ended  September 30,
2000, an 18.6% increase.  Austar United's  revenue  increased $26.2 million,  or
24.6%,  from  $106.6  million for the nine months  ended  September  30, 1999 to
$132.8  million for the nine months ended  September  30, 2000.  On a functional
currency basis,  Austar United's revenue increased A$57.2 million,  from A$164.6
million for the nine months ended  September 30, 1999 to A$221.8 million for the
nine months ended September 30, 2000, a 34.8% increase.

The  increase  in revenue  from period to period was  primarily  due to Austar's
video  subscriber  growth  (427,012 at September 30, 2000 compared to 360,708 at
September 30, 1999) as well as growth in premium tiers,  resulting in an average
revenue  per  subscriber  of A$56.58  and  A$55.78 for the three and nine months
ended September 30, 2000, respectively,  compared to A$53.50 and A$51.45 for the
same periods in the prior year.

ADJUSTED  EBITDA.  Our Adjusted  EBITDA loss  increased  $10.9 million and $14.8
million for the three and nine months ended  September  30, 2000,  respectively,
compared to the corresponding amounts in the prior year as follows:
<TABLE>
<CAPTION>
                                                                      For the Three Months Ended     For the Nine Months Ended
                                                                            September 30,                  September 30,
                                                                      --------------------------     -------------------------
                                                                         2000            1999           2000           1999
                                                                      ----------      ----------     ----------     ----------
                                                                            (In thousands)                 (In thousands)
                                                                      <S>              <C>           <C>             <C>
     Austar United..................................................  $(12,387)        $  (129)      $(22,918)       $(5,095)
     Other..........................................................      (278)         (1,679)          (837)        (3,826)
                                                                      --------         -------       --------        -------
          Total Adjusted EBITDA.....................................  $(12,665)        $(1,808)      $(23,755)       $(8,921)
                                                                      ========         =======       ========        =======
</TABLE>
                                       18
<PAGE>


AUSTAR UNITED

Austar United's  Adjusted EBITDA loss increased by $12.3 million,  from negative
$0.1  million for the three months ended  September  30, 1999 to negative  $12.4
million for the three months ended September 30, 2000. On a functional  currency
basis,  Austar  United's  Adjusted EBITDA loss increased  A$19.8  million,  from
negative A$0.2 million for the three months ended September 30, 1999 to negative
A$20.0 million for the three months ended  September 30, 2000.  Austar  United's
adjusted EBITDA loss increased by $17.8 million,  from negative $5.1 million for
the nine months ended  September 30, 1999 to negative $22.9 million for the nine
months ended September 30, 2000. On a functional currency basis, Austar United's
adjusted  EBITDA loss  increased  A$29.6 million from negative A$7.9 million for
the nine months ended September 30, 1999 to negative A$37.5 million for the nine
months  ended  September  30,  2000.  This  increase in Adjusted  EBITDA loss is
primarily  due to the  increased  expenses  associated  with the launch of AUB's
Internet business.

The Adjusted EBITDA for video services improved by $0.4 million and $4.8 million
for the three and nine months ended September 30, 2000,  respectively,  compared
to the same  periods in the prior year.  Austar's  incremental  sales growth was
partially offset by increased programming costs as subscribers increased and the
Australian dollar weakened against the U.S. dollar.

The Adjusted  EBITDA loss for the Internet  business  increased to $12.8 million
and $22.9  million  for the three and nine  months  ended  September  30,  2000,
respectively,  compared to nil in the prior year as AUB rolls out its  broadband
Internet services.

CORPORATE  GENERAL  AND  ADMINISTRATIVE   EXPENSE.  Our  corporate  general  and
administrative  expense  decreased  $0.6 million and $15.1 million for the three
and nine months ended September 30, 2000, respectively,  compared to the amounts
for the  corresponding  periods in the prior year.  The nine month  decrease was
primarily attributable to a stock-based compensation charge of $6.7 million from
the Austar  United  stock option plan for the nine months  ended  September  30,
2000, compared to $18.9 million for the nine months ended September 30, 1999.

DEPRECIATION AND AMORTIZATION.  Depreciation and amortization  expense decreased
$0.2  million and  increased  $4.6  million for the three and nine months  ended
September 30, 2000,  respectively,  compared to the amount for the corresponding
periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                                      For the Three Months Ended     For the Nine Months Ended
                                                                            September 30,                  September 30,
                                                                      --------------------------     -------------------------
                                                                         2000            1999           2000           1999
                                                                      ----------      ----------     ----------     ----------
                                                                            (In thousands)                 (In thousands)
                                                                      <S>              <C>           <C>             <C>
     Austar United..................................................  $24,555          $25,086       $78,778         $75,029
     Other..........................................................      287                -           861               -
                                                                      -------          -------       -------         -------
          Total depreciation and amortization expense..............   $24,842          $25,086       $79,639         $75,029
                                                                      =======          =======       =======         =======
</TABLE>

AUSTAR UNITED

Depreciation and amortization  expense for Austar United decreased $0.5 million,
or 2.0%,  from $25.1  million for the three months ended  September  30, 1999 to
$24.6  million for the three months ended  September  30, 2000.  On a functional
currency basis, Austar United's  depreciation and amortization expense increased
A$4.0 million, from A$38.7 million for the three months ended September 30, 1999
to A$42.7  million  for the three  months  ended  September  30,  2000,  a 10.3%
increase.  This  increase is due  primarily  to  increased  property,  plant and
equipment and licenses in Austar and AUB.

Depreciation and amortization  expense for Austar United increased $3.8 million,
or 5.1%,  from $75.0  million for the nine months  ended  September  30, 1999 to
$78.8  million for the nine months ended  September  30,  2000.  On a functional
currency basis, Austar United's  depreciation and amortization expense increased
A$15.3  million,  from A$115.9  million for the nine months ended  September 30,
1999 to A$131.2  million for the nine months ended  September  30, 2000, a 13.2%
increase.  This  increase is due  primarily  to  increased  property,  plant and
equipment and licenses in Austar and AUB.

                                       19
<PAGE>

GAIN ON ISSUANCE OF SECURITIES BY  SUBSIDIARY.

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

INITIAL PUBLIC OFFERING. On July 27, 1999, Austar United successfully  completed
the Austar  United IPO selling  103.5  million  shares on the  Australian  Stock
Exchange  raising gross and net proceeds at A$4.70  ($3.03) per share of A$486.5
($313.6)  million  and  A$453.6  ($292.8)  million,  respectively.  Based on the
carrying  value of our  investment  in  Austar  United as of July 27,  1999,  we
recognized a gain of $226.9 million from the resulting  step-up  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 United Austar indefinitely.

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

INTEREST  INCOME.  Interest income  increased $2.0 million and $10.2 million for
the three and nine months ended  September 30, 2000,  respectively,  compared to
the amounts for the  corresponding  periods in the prior year.  The increase was
attributable to the increase in short-term liquid investment balances due to the
Austar United IPO and the Secondary Offering.

INTEREST  EXPENSE.  Interest expense increased $3.0 million and $8.9 million for
the three and nine months ended  September 30, 2000,  respectively,  compared to
the amounts for the  corresponding  periods in the prior year. This increase was
primarily due to increased  interest expense related to the Austar Bank Facility
and the senior  discount notes ("the Notes") for the three and nine months ended
September 30, 2000 compared to the amounts for the corresponding  periods in the
prior year.

MINORITY INTERESTS IN SUBSIDIARIES.  Our minority interests' share of losses was
$17.3  million and $43.5  million for the three and nine months ended  September
30,  2000,  respectively.  Austar  United's  IPO (July  1999) and its  Secondary
Offering  (March 2000) reduced our indirect  ownership in Austar United to 66.3%
as of September 30, 2000.  For accounting  purposes,  we continue to consolidate
100% of the results of  operations  of Austar  United,  then deduct the minority
interests' share of income (losses) before arriving at net income (loss).

SHARE IN RESULTS OF AFFILIATED COMPANIES, NET. Our share in losses of affiliated
companies  increased $2.0 million and $1.7 million for the three and nine months
ended  September  30,  2000,  respectively,  compared  to the  amounts  for  the
corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                                      For the Three Months Ended     For the Nine Months Ended
                                                                            September 30,                  September 30,
                                                                      --------------------------     -------------------------
                                                                         2000            1999           2000           1999
                                                                      ----------      ----------     ----------     ----------
                                                                            (In thousands)                 (In thousands)
                                                                      <S>              <C>           <C>             <C>
     XYZ Entertainment.............................................   $   302          $ (1,496)     $   (112)       $ (6,531)
     Saturn/TSL (1)................................................    (6,470)           (2,679)      (14,257)         (6,324)
     Other.........................................................       (31)                -          (196)              -
                                                                      -------          --------      --------        --------
          Total share in results of affiliated companies...........   $(6,199)         $ (4,175)     $(14,565)       $(12,855)
                                                                      =======          ========      ========        ========
</TABLE>
     (1)  During the seven months ended September 30, 1999, the equity method of
          accounting  was used to account  for  Saturn's  results due to certain
          minority  shareholder rights.  Effective August 1, 1999, Austar United
          increased its ownership in Saturn to 100% and began  consolidating its
          results  of  operations.   Effective  April  1,  2000,  Austar  United
          decreased  its  ownership in Saturn to 50.0% with the TSL  transaction
          and returned to the equity method of accounting.

                                       20
<PAGE>


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

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

IMPACT OF FOREIGN CURRENCY RATE CHANGES

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

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

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

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

INTEREST RATE SENSITIVITY

The table below provides  information  about our primary debt  obligations.  The
information  is presented in U.S.  dollar  equivalents,  which is our  reporting
currency.  The  instrument's  actual  cash  flows are  denominated  in both U.S.
dollars  (the Senior  Discount  Notes) and  Australian  dollars (New Austar Bank
Facility).
<TABLE>
<CAPTION>
                                                                             As of September 30, 2000
                                                                       -------------------------------------
                                                                        Book Value               Fair Value
                                                                       -------------            ------------
                                                               (U.S. dollars, in thousands, except interest rates)
<S>                                                                      <C>                       <C>
Long-term and short-term  debt:
  Fixed rate USD denominated Senior Discount Notes.....................  $451,268                  $455,902
    Average interest rate..............................................      14.0%                     13.8%
  Variable rate A$ denominated New Austar Bank Facility................  $217,096                  $217,096
    Average interest rate..............................................       7.6%                      7.6%

</TABLE>
                                       21
<PAGE>


The table below presents principal cash flows by expected maturity dates for our
debt obligations. The information is presented in U.S. dollar equivalents, which
is our reporting currency. The instrument's actual cash flows are denominated in
both U.S. dollars (the Senior Discount Notes) and Australian dollars (New Austar
Bank Facility).
<TABLE>
<CAPTION>
                                                                      As of September 30, 2000
                                              ------------------------------------------------------------------------------
                                               2000       2001       2002       2003       2004     Thereafter      Total
                                              -------   --------   --------   --------   --------   -----------   ----------
                                                                    (U.S. dollars, in thousands)
<S>                                            <C>        <C>       <C>       <C>        <C>         <C>           <C>
Long-term and short-term debt:
  Fixed rate USD denominated Senior
    Discount Notes............................ $  -       $  -      $    -    $     -    $     -     $451,268      $451,268
  Variable rate A$ denominated New Austar
    Bank Facility............................. $  -       $  -      $6,972    $38,343    $61,250     $110,531      $217,096

</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 ($27.1) 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
($54.3) million of variable rate, long-term debt into fixed rate borrowings.  As
of September 30, 2000, the  weighted-average  fixed rate under these  agreements
was 5.7% compared to a weighted-average variable rate of 8.8%.

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


                                       22
<PAGE>


PART II - OTHER INFORMATION


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

(a)      Exhibits

     10.1  TARB's Acquisition Agreement
     27.1  Financial Data Schedule


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

     None.



                                       23
<PAGE>


                                    SIGNATURE


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



United Australia/Pacific, Inc.



Date:      November 14, 2000
           ---------------------------------------------

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



                                       24