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

                                    FORM 10-Q

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

                       For the quarter ended June 30, 1999

                                       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


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


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

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

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







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

The Company has no  publicly-traded  shares of capital  stock.  As of August 13,
1999, the Company had 17,810,249 shares of common stock outstanding.



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                                                 UIH AUSTRALIA/PACIFIC, INC.
                                                      TABLE OF CONTENTS



                                                                                                                 Page
                                                                                                                Number
                                                                                                                ------

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


Item 1 - Financial Statements
------
     <S>                                                                                                          <C>
     Condensed Consolidated Balance Sheets as of June 30, 1999 (Unaudited) and December 31, 1998..............     2

     Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 1999
         and 1998 (Unaudited).................................................................................     3

     Condensed Consolidated Statement of Stockholder's Deficit for the Six Months Ended June 30, 1999
         (Unaudited)..........................................................................................     4

     Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1999 and
         1998 (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 Disclosures about Market Risk..........................................     24
------

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


Item 6 - Exhibits and Reports on Form 8-K....................................................................     27
------
</TABLE>



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<TABLE>
<CAPTION>

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

                                                                                                               As of        As of
                                                                                                             June 30,   December 31,
                                                                                                               1999         1998
                                                                                                             --------   ------------
<S>                                                                                                         <C>           <C>
ASSETS
Current assets:
 Cash and cash equivalents............................................................................      $    138      $    181
 Short-term liquid investments........................................................................           769           763
 Subscriber receivables, net..........................................................................         5,909         6,322
 Related party receivables............................................................................         1,893           746
 Prepaids and other current assets....................................................................         4,469         5,351
                                                                                                            --------      --------
     Total current assets.............................................................................        13,178        13,363
Investments in and advances to affiliated companies, accounted for under the equity method, net.......        53,432        24,597
Property, plant and equipment, net of accumulated depreciation of $208,373 and $147,511,
 respectively.........................................................................................       133,540       122,968
Goodwill and other intangible assets, net of accumulated amortizaton of $21,822 and $17,512,
 respectively.........................................................................................        40,437        42,559
Deferred financing costs, net of accumulated amortization of $6,463 and $3,237, respectively..........        17,068        11,675
Other non-current assets, net.........................................................................         2,880           870
                                                                                                            --------      --------
     Total assets.....................................................................................      $260,535      $216,032
                                                                                                            ========      ========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
 Accounts payable.....................................................................................      $  5,618      $  5,426
 Accrued liabilities..................................................................................        23,441        28,522
 Construction payables................................................................................           316         1,076
 Current portion of due to parent.....................................................................         6,500         3,665
 Short-term debt......................................................................................             -        36,738
 Current portion of other long-term debt..............................................................         1,850         2,189
                                                                                                            --------      --------
     Total current liabilities........................................................................        37,725        77,616

Due to parent.........................................................................................        10,379         6,578
Senior discount notes.................................................................................       381,420       356,640
Other long-term debt..................................................................................       168,632        68,086
Other long-term liabilities...........................................................................         2,057         1,741
                                                                                                            --------      --------
     Total liabilities................................................................................       600,213       510,661
                                                                                                            --------      --------
Stockholder's 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, 17,810,249 shares
  issued and outstanding..............................................................................           178           178
 Additional paid-in capital...........................................................................       289,297       215,624
 Accumulated deficit..................................................................................      (603,342)     (481,240)
 Other cumulative comprehensive loss..................................................................       (25,811)      (29,191)
                                                                                                            --------      --------
     Total stockholder's deficit......................................................................      (339,678)     (294,629)
                                                                                                            --------      --------
     Total liabilities and stockholder's deficit......................................................      $260,535      $216,032
                                                                                                            ========      ========


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

                                                              2


<PAGE>
<TABLE>
<CAPTION>

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

                                                                    For the Three Months Ended     For the Six Months Ended
                                                                               June 30,                     June 30,
                                                                    --------------------------    --------------------------
                                                                       1999            1998          1999            1998
                                                                    ----------      ----------    ----------      ----------
<S>                                                                 <C>             <C>           <C>             <C>
Revenue........................................................     $   34,388      $   20,310    $   64,820      $   40,763

System operating expense, including related party expense
 of $2,131, $961, $3,524 and $1,934, respectively..............        (24,212)        (17,428)      (47,445)        (29,751)
System selling, general and administrative expense.............        (11,688)        (11,550)      (22,341)        (21,922)
Corporate general and administrative expense, including
 allocated expense from related party of $18,640, $1,987,
 $19,648 and $4,347, respectively..............................        (18,748)         (2,064)      (19,777)         (4,529)
Depreciation and amortization..................................        (25,482)        (23,226)      (49,943)        (50,635)
                                                                    ----------      ----------    ----------      ----------
     Net operating loss........................................        (45,742)        (33,958)      (74,686)        (66,074)

Interest income................................................             34              26            67             126
Interest expense, including related party expense of $0,
 $306, $0 and $623, respectively...............................        (18,115)        (14,179)      (33,037)        (27,295)
Other expense, net.............................................         (5,436)           (868)       (5,766)         (1,164)
                                                                    ----------      ----------    ----------      ----------
     Net loss before other items...............................        (69,259)        (48,979)     (113,422)        (94,407)

Share in results of affiliated companies, net..................         (5,308)         (1,247)       (8,680)         (3,536)
                                                                    ----------      ----------    ----------      ----------
     Net loss..................................................     $  (74,567)     $  (50,226)   $ (122,102)     $  (97,943)
                                                                    ==========      ==========    ==========      ==========
Basic and diluted loss per common share........................     $    (4.19)     $    (3.62)   $    (6.86)     $    (7.06)
                                                                    ==========      ==========    ==========      ==========
Weighted-average number of common shares outstanding...........     17,810,249      13,864,941    17,810,249      13,864,941
                                                                    ==========      ==========    ==========      ==========


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

                                                              3





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<TABLE>
<CAPTION>
                                                    UIH AUSTRALIA/PACIFIC, INC.
                                     CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIT
                                            (Stated in thousands, except share amounts)
                                                            (Unaudited)

                                                                                           Other
                                             Common Stock      Additional                Cumulative          Total
                                         --------------------   Paid-In    Accumulated  Comprehensive    Comprehensive
                                           Shares      Amount   Capital      Deficit       Loss(1)           Loss         Total
                                         ----------  --------  ----------  -----------  ---------------  -------------  ---------
<S>                                      <C>           <C>      <C>         <C>           <C>              <C>          <C>
Balances, December 31, 1998...........   17,810,249   $178     $215,624    $(481,240)    $(29,191)        $       -    $(294,629)

Cash contributions from parent........            -      -       29,403            -            -                 -       29,403
Non-cash contributions from parent....            -      -       44,270            -            -                 -       44,270
Net loss..............................            -      -            -     (122,102)           -          (122,102)    (122,102)
Change in cumulative translation
 adjustments..........................            -      -            -            -        3,380             3,380        3,380
                                         ----------   ----     --------    ---------     --------         ---------    ---------
Balances, June 30, 1999...............   17,810,249   $178     $289,297    $(603,342)    $(25,811)        $(118,722)   $(339,678)
                                         ==========   ====     ========    =========     ========         =========    =========


(1) As of June 30, 1999, Other Cumulative  Comprehensive Loss represents foreign
    currency translation adjustments.














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

                                                                 4



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<CAPTION>

                                                    UIH AUSTRALIA/PACIFIC, INC.
                                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                                       (Stated in thousands)
                                                            (Unaudited)
                                                                                                      For the Six Months Ended
                                                                                                               June 30,
                                                                                                 ----------------------------------
                                                                                                    1999                    1998
                                                                                                 ----------              ----------
<S>                                                                                              <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss...................................................................................      $(122,102)               $(97,943)
Adjustments to reconcile net loss to net cash flows from operating activities:
 Depreciation and amortization.............................................................         49,943                  50,635
 Share in results of affiliated companies, net.............................................          2,993                   3,536
 Allocation of expense accounted for as capital contributions by parent....................         19,198                   3,932
 Accretion of interest on senior notes and amortization of deferred financing costs........         27,734                  23,786
 Decrease (increase) in subscriber receivables.............................................            950                  (1,051)
 Increase in related party receivables.....................................................           (885)                   (315)
 Decrease (increase) in other assets.......................................................          3,347                  (1,759)
 Increase in technical assistance agreement payables.......................................          5,447                   4,885
 (Decrease) increase in accounts payable, accrued liabilities and other....................         (7,716)                    359
                                                                                                 ---------                --------
Net cash flows from operating activities...................................................        (21,091)                (13,935)
                                                                                                 ---------                --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term liquid investments..................................................         (1,066)                      -
Sale of short-term liquid investments......................................................          1,060                  12,325
Investments in and advances to affiliated companies........................................         (5,177)                 (7,139)
Deconsolidation of New Zealand subsidiary..................................................              -                  (9,881)
Purchase of property, plant and equipment..................................................        (46,797)                (23,343)
Decrease in construction payables..........................................................           (829)                 (1,991)
                                                                                                 ---------                --------
Net cash flows from investing activities...................................................        (52,809)                (30,029)
                                                                                                 ---------                --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contributions from parent.............................................................         29,403                  31,945
Borrowings on the Austar Bank Facility.....................................................         19,372                       -
Borrowings on the New Austar Bank Facility.................................................        162,081                       -
Payment of the Austar Bank Facility........................................................       (129,149)                      -
Payments on capital leases and other debt..................................................           (281)                   (323)
Deferred financing costs...................................................................         (7,937)                      -
                                                                                                 ---------                --------
Net cash flows from financing activities...................................................         73,489                  31,622
                                                                                                 ---------                --------
EFFECT OF EXCHANGE RATES ON CASH...........................................................            368                     749
                                                                                                 ---------                --------
DECREASE IN CASH AND CASH EQUIVALENTS......................................................            (43)                (11,593)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............................................            181                  12,344
                                                                                                 ---------                --------
CASH AND CASH EQUIVALENTS, END OF PERIOD...................................................      $     138                $    751
                                                                                                 =========                ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash received for interest.................................................................      $      10                $    139
                                                                                                 =========                ========
Cash paid for interest.....................................................................      $   7,265                $  2,509
                                                                                                 =========                ========
NON-CASH CONTRIBUTION FROM PARENT:
Investment in XYZ Entertainment............................................................      $  25,072                $      -
                                                                                                 =========                ========
DECONSOLIDATION OF NEW ZEALAND SUBSIDIARY:
Working capital............................................................................      $       -                $  4,159
Property, plant and equipment..............................................................              -                 (26,484)
Goodwill and other intangible assets.......................................................              -                  (2,805)
Notes payable and other debt...............................................................              -                   3,833
Minority interest..........................................................................              -                  11,416
                                                                                                 ---------                --------
Total cash relinquished....................................................................      $       -                $ (9,881)
                                                                                                 =========                ========

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

                                                                 5


<PAGE>

                           UIH AUSTRALIA/PACIFIC, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF JUNE 30, 1999
                                   (Unaudited)

1.   ORGANIZATION AND NATURE OF OPERATIONS

UIH Australia/Pacific,  Inc. (the "Company"),  a wholly-owned  subsidiary of UIH
Asia/Pacific  Communications,  Inc.  ("UAP"),  which  is  in  turn  an  indirect
98.0%-owned subsidiary of UnitedGlobalCom,  Inc. ("United"),  (formerly known as
United  International  Holdings,  Inc.) was formed on October 14, 1994,  for the
purpose of developing,  acquiring and managing foreign multi-channel television,
programming and telephony operations.

The following chart presents a summary of the Company's significant  investments
in multi-channel television, programming and telephony operations as of June 30,
1999.

          ***********************************************************
          *                                                         *
          *                          United                         *
          *                                                         *
          ***********************************************************
                                       *
                                100%   *
          ***********************************************************
          *                                                         *
          *      United International Properties, Inc. ("UIPI")     *
          *                                                         *
          ***********************************************************
                                       *
                                 98%   *
          ***********************************************************
          *                                                         *
          *                           UAP                           *
          *                                                         *
          ***********************************************************
                                       *
                                100%   *
          ***********************************************************
          *                                                         *
          *                     The Company(1)                      *
          *                                                         *
          ***********************************************************
                                       *
                                100%   *
          ***********************************************************
          *          Austar United Communications Limited           *
          *                 ("Austar United")(2)                    *
          *                                                         *
          ***********************************************************
                                       *
                                       *
          ***********************************************************
          *                                                         *
          *Australia:                                               *
          * CTV Pty Limited and STV Pty Limited                     *
          *  (collectively, "Austar")                      100.0%   *
          * United Wireless Pty Limited ("United                    *
          *  Wireless")                                    100.0%   *
          * XYZ Entertainment Pty Limited ("XYZ                     *
          *  Entertainment")                                50.0%(3)*
          *New Zealand:                                             *
          * Saturn Communications Limited ("Saturn")        65.0%(4)*
          *                                                         *
          ***********************************************************


(1)  The Company also holds an up to 90.0%  economic  interest in Telefenua S.A.
     ("Telefenua") in Tahiti.
(2)  In June 1999,  the  Company's  interests in Austar,  United  Wireless,  XYZ
     Entertainment  and Saturn were contributed to Austar United in exchange for
     new shares issued by Austar United (see Note 11).
(3)  In June  1999,  the 25.0%  interest  in XYZ  Entertainment  held by UAP was
     transferred to the Company at book value in anticipation of Austar United's
     initial public offering  ("Australian  IPO") which closed in July 1999 (see
     Note 11) increasing the Company's interest in XYZ Entertainment to 50.0%.
(4)  Austar United acquired the remaining 35.0% interest in Saturn in July 1999.


                                       6
<PAGE>


                           UIH 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  ("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. The Company previously  consolidated the operations of
Saturn from July 1, 1996 through  September  30, 1998.  Prior to that time,  the
Company  accounted for its investment in Saturn under the equity method.  During
the fourth quarter of 1998, the Company  discontinued  consolidating the results
of  operations  of Saturn  effective  as of January 1, 1998 and  returned to the
equity  method of  accounting.  The change was made to comply with the consensus
guidance of the Emerging Issues Task Force regarding Issue 96-16 ("EITF 96-16"),
and  related  rules of the 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. Accordingly,
the condensed  consolidated  statement of operations and statement of cash flows
for  the  period  ended  June  30,  1998  have  been  adjusted  to  reflect  the
deconsolidation of Saturn effective as of January 1, 1998.  Immediately prior to
the Australian  IPO,  Austar United issued  ordinary  shares of Austar United to
Sasktel  for  its  35.0%  interest  in  Saturn.  As a  result,  Saturn  will  be
consolidated  effective  July 27, 1999.  Effective  October 1, 1998, the Company
discontinued  consolidating  the results of  operations  of Telefenua  due to an
other-than-temporary  loss of  control  and  began  using the  equity  method of
accounting.  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.

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 multi-channel  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 economic life of the asset.


                                       7
<PAGE>


                           UIH 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..........   5-10 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.

REVENUE RECOGNITION

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

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 LOSS PER SHARE

"Basic loss per share" is  determined  by dividing net loss  available to common
stockholders by the weighted-average  number of common shares outstanding during
each  period.  "Diluted  loss per share"  includes  the  effects of  potentially
issuable common stock, but only if dilutive. The Company's warrants are excluded
from the  Company's  diluted  loss per share  amounts  for all  years  presented
because their effect would be anti-dilutive.

FOREIGN OPERATIONS AND FOREIGN EXCHANGE RATE RISK

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

                                       8
<PAGE>


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

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

NEW ACCOUNTING PRINCIPLES

The Financial  Accounting  Standards Board ("FASB") recently issued Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities" ("SFAS 133"),  which requires that companies  recognize
all  derivatives  as either assets or  liabilities  in the balance sheet at fair
value.  Under  SFAS  133,  accounting  for  changes  in fair  market  value of a
derivative  depends on its intended use and  designation.  SFAS 133 is effective
for fiscal years  beginning after June 15, 1999. In June 1999, the FASB approved
Statement  No.  137,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities-Deferral  of the  Effective  Date of FASB  Statement  No. 133," which
amends SFAS 133 to be  effective  for all fiscal  quarters  of all fiscal  years
beginning after June 15, 2000. The Company is currently  assessing the effect of
this new standard.

3.  INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANIES, ACCOUNTED FOR UNDER THE
    EQUITY METHOD
<TABLE>
<CAPTION>
                                                                 As of June 30, 1999
                           -------------------------------------------------------------------------------------------
                              Investments in          Cumulative Share        Cumulative
                              and Advances to           in Results of        Translation      Valuation
                           Affiliated Companies     Affiliated Companies     Adjustments      Allowance         Total
                           --------------------     --------------------     -----------      ----------       -------
                                                                   (In thousands)
     <S>                         <C>                     <C>                   <C>            <C>              <C>

     Saturn................      $ 55,990                $(27,788)             $(3,549)       $     -          $24,653
     XYZ Entertainment(1)..        44,306                 (18,818)               3,291              -           28,779
     Telefenua.............        18,599                 (14,215)                   -         (4,384)(2)            -
                                 --------                --------              -------        -------          -------
           Total...........      $118,895                $(60,821)             $  (258)       $(4,384)         $53,432
                                 ========                ========              =======        =======          =======


                                                               December 31, 1998
                           -------------------------------------------------------------------------------------------
                              Investments in          Cumulative Share        Cumulative
                              and Advances to           in Results of        Translation      Valuation
                           Affiliated Companies     Affiliated Companies     Adjustments      Allowance         Total
                           --------------------     --------------------     -----------      ---------        -------
                                                                   (In thousands)
     Saturn................      $49,808                 $(23,138)             $(2,881)       $     -          $23,789
     XYZ Entertainment.....       19,363                  (18,666)                 111              -              808
     Telefenua.............       18,599                  (14,215)                   -         (4,384)(2)            -
                                 -------                 --------              -------        -------          -------
           Total...........      $87,770                 $(56,019)             $(2,770)       $(4,384)         $24,597
                                 =======                 ========              =======        =======          =======
</TABLE>
     (1) In June 1999, the 25.0% interest in XYZ  Entertainment  held by UAP was
         transferred to the Company at its carrying value of $25.1 million.
     (2) The  Company  has  reserved  the  remaining  balance  of the  Telefenua
         investment of $4.4 million due to the uncertainty of realization.



                                       9
<PAGE>


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


4.   PROPERTY, PLANT AND EQUIPMENT
                                                          As of        As of
                                                         June 30,   December 31,
                                                          1999         1998
                                                        ---------   ------------
                                                            (In thousands)
     Subscriber premises equipment and converters.....  $246,735      $187,247
     MMDS/DTH distribution facilities.................    62,991        54,725
     Cable distribution networks......................     2,198         2,009
     Office equipment, furniture and fixtures.........    11,529         9,810
     Buildings and leasehold improvements.............     3,343         2,841
     Other............................................    15,117        13,847
                                                        --------      --------
                                                         341,913       270,479
       Accumulated depreciation.......................  (208,373)     (147,511)
                                                        --------      --------
       Net property, plant and equipment..............  $133,540      $122,968
                                                        ========      ========

5.   GOODWILL AND OTHER INTANGIBLE ASSETS
                                                          As of        As of
                                                         June 30,   December 31,
                                                          1999         1998
                                                        ---------   ------------
                                                            (In thousands)
     Austar...........................................  $60,757       $55,805
     Other............................................    1,502         4,266
                                                        -------       -------
                                                         62,259        60,071
       Accumulated amortization.......................  (21,822)      (17,512)
                                                        -------       -------
       Net goodwill and other intangible assets.......  $40,437       $42,559
                                                        =======       =======

6.    SENIOR DISCOUNT NOTES
                                                          As of        As of
                                                         June 30,   December 31,
                                                          1999         1998
                                                        ---------   ------------
                                                            (In thousands)
     May 1996 Notes (as defined below), net
      of unamortized discount.........................  $344,604      $321,687
     September 1997 Notes (as defined below),
      net of unamortized discount.....................    36,816        34,953
                                                        --------      --------
       Total senior discount notes....................  $381,420      $356,640
                                                        ========      ========

MAY 1996 NOTES

The 14.0% senior notes,  which the Company issued in May 1996 at a discount from
their principal amount of $443.0 million (the "May 1996 Notes"), had an accreted
value of $344.6  million as of June 30, 1999.  On and after May 15,  2001,  cash
interest  will  accrue  and  will be  payable  semi-annually  on each May 15 and
November 15,  commencing  November 15, 2001.  The May 1996 Notes are due May 15,
2006.  Effective May 16, 1997, the interest rate on these notes  increased by an
additional  0.75%  per  annum to  14.75%.  On  October  14,  1998,  the  Company
consummated  an equity sale  resulting in gross proceeds to the Company of $70.0
million which  reduced the interest rate from 14.75% to 14.0% per annum.  Due to
the increase in the interest rate effective May 16, 1997 until  consummation  of
the equity sale, the May 1996 Notes will accrete to a principal amount of $447.4
million on May 15, 2001,  the date cash  interest  begins to accrue.  The quoted
fair market  value of these notes was  approximately  $313.2  million and $223.7
million as of June 30, 1999 and December 31, 1998, respectively.

SEPTEMBER 1997 NOTES

The 14.0% senior notes, which the Company issued in September 1997 at a discount
from their principal  amount of $45.0 million (the "September 1997 Notes"),  had
an accreted  value of $36.8  million as of June 30,  1999.  On and after May 15,
2001, cash interest will accrue and will be payable semi-annually on each May 15
and November 15, commencing  November 15, 2001. The September 1997 Notes are due
May 15, 2006.  Effective  September  23, 1997,  the interest rate on these notes
increased by an additional  0.75% per annum to 14.75%.  On October 14, 1998, the

                                       10
<PAGE>


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

Company  consummated  an equity sale,  reducing the interest rate from 14.75% to
14.0% per annum.  Due to the increase in the interest rate  effective  September
23, 1997 until  consummation  of the equity sale,  the September 1997 Notes will
accrete to a principal  amount of $45.4  million on May 15, 2001,  the date cash
interest  begins to accrue.  The quoted  fair  market  value of these  notes was
approximately  $31.8  million and $22.7 million as of June 30, 1999 and December
31, 1998, respectively.

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

7.   OTHER LONG-TERM DEBT
                                                          As of        As of
                                                         June 30,   December 31,
                                                          1999         1998
                                                        ---------   ------------
                                                            (In thousands)
     Austar Bank Facility............................   $167,546      $67,352
     Capitalized leases and other....................      2,936        2,923
                                                        --------      -------
                                                         170,482       70,275
          Less current portion.......................     (1,850)      (2,189)
                                                        --------      -------
          Total other long-term debt.................   $168,632      $68,086
                                                        ========      =======

AUSTAR BANK FACILITY

In July 1997, Austar secured a senior syndicated term debt facility (the "Austar
Bank  Facility")  in the  amount  of  A$200.0  million  to fund  its  subscriber
acquisition and working  capital needs.  Austar had drawn the full amount of the
facility  by April 1999 when it secured a new  syndicated  senior  secured  debt
facility (the "New Austar Bank  Facility") for A$400.0  million to refinance the
A$200.0 million Austar Bank Facility and to fund Austar's subscriber acquisition
and  working  capital  needs.  The New  Austar  Bank  Facility  consists  of two
sub-facilities:  (i) A$200.0 million  amortizing term facility ("Tranche 1") and
(ii) A$200.0 million cash advance facility  ("Tranche 2"). Tranche 1 was used to
refinance  the  Austar  Bank  Facility,  and  Tranche  2 is  available  upon the
contribution of additional equity on a 2:1 debt-to-equity  basis. As of June 30,
1999,  Austar had drawn A$251.0 million ($167.5  million) on the New Austar Bank
Facility. All of Austar's assets are pledged as collateral for this facility. In
addition,  pursuant to this facility, Austar cannot pay any dividends,  interest
or fees under its  technical  assistance  agreements  without the consent of the
majority banks.  The New Austar Bank Facility bears interest at the professional
market rate in  Australia  plus a margin  ranging from 1.75% to 2.25% based upon
certain  debt to cash  flow  ratios.  The New  Austar  Bank  Facility  is  fully
repayable  pursuant to an amortization  schedule beginning December 31, 2002 and
ending March 31, 2006.

8.    RELATED PARTY

Effective May 1, 1996, the Company and UIH Management,  Inc. ("UIH Management"),
an indirect  wholly-owned  subsidiary of United,  executed a 10-year  management
services  agreement  (the  "Management   Agreement"),   pursuant  to  which  UIH
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, UIH  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  capital
contributions,  based on  increased  activity  at the  operating  system  level.
Management believes that this method of allocating costs is reasonable.  For the
six months ended June 30, 1999 and 1998, the Company  recorded $19.6 million and
$4.3 million,  respectively,  in corporate  general and  administrative  expense
allocated  from United and management  fees.  The June 30, 1999 amount  includes
$17.6 million of non-cash stock-based  compensation expense related to UAP stock

                                       11

<PAGE>


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

appreciation  rights, $1.6 million of other corporate general and administrative
expense and $0.4 million in related party  management  fees due from the Company
to UAP. The June 30, 1998 amount includes $3.9 million of corporate  general and
administrative  expense and $0.4 million in related  party  management  fees due
from the Company to UAP.

Austar,  Saturn,  Telefenua  and United  Wireless  are also parties to technical
assistance  agreements with UAP whereby such operating companies pay to UAP fees
based on their  respective  gross  revenues.  In addition,  United has appointed
certain  of its  employees  to  serve  in  senior  management  positions  at the
operating  systems.  The operating  systems  reimburse United for certain direct
costs  incurred by United,  including  salaries and  benefits  relating to these
senior management  positions,  pursuant to the terms of the technical assistance
agreements.  For the six  months  ended  June 30,  1999 and  1998,  the  Company
recorded  $3.0  million  and  $1.9  million,   respectively,  in  related  party
management  fees due from the  operating  systems to UAP. The rights under these
management  fee  agreements  have been  assigned to Austar United as part of the
restructuring associated with the Australian IPO.

Included in the amount due to parent is the following:
<TABLE>
<CAPTION>
                                                                                       As of        As of
                                                                                     June 30,    December 31,
                                                                                       1999         1998
                                                                                     ---------   ------------
                                                                                         (In thousands)
     <S>                                                                              <C>          <C>
     Austar technical assistance agreement obligations, including deferred
      management fees of $9,639 and $5,973, respectively (1)...................       $14,133      $ 8,347
     United Wireless technical assistance agreement obligations................           740          605
     Payable to parent for management fees.....................................         1,505        1,056
     Other.....................................................................           501          235
                                                                                      -------      -------
                                                                                       16,879       10,243
          Less current portion.................................................        (6,500)      (3,665)
                                                                                      -------      -------
          Total due to parent..................................................       $10,379      $ 6,578
                                                                                      =======      =======
</TABLE>
     (1) UAP has the option of converting these management fees into equity.

9.   COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
                                                                        For the                      For the
                                                                   Three Months Ended            Six Months Ended
                                                                        June 30,                     June 30,
                                                                 ----------------------      ------------------------
                                                                    1999        1998            1999          1998
                                                                 ----------  ----------      ----------    ----------
                                                                     (In thousands)                (In thousands)
     <S>                                                         <C>          <C>             <C>           <C>
     Net loss............................................        $(74,567)    $(50,226)       $(122,102)    $(97,943)
     Other comprehensive income (loss):
      Change in cumulative translation adjustments.......           2,122       (3,019)           3,380        3,877
                                                                 --------     --------        ---------     --------
          Total comprehensive loss.......................        $(72,445)    $(53,245)       $(118,722)    $(94,066)
                                                                 ========     ========        =========     ========
</TABLE>

10.  SEGMENT INFORMATION

The   Company's   business  has   historically   been  derived  from  its  video
entertainment segment. This service has been provided in various countries where
the Company owns and operates its systems.  Accordingly,  the Company's  current
reportable segments are the various countries in which it operates multi-channel
television,  programming and/or telephony operations.  These reportable segments
are  evaluated  separately  because each country  presents  different  marketing
strategies  and  technology  issues as well as distinct  economic  climates  and
regulatory  constraints.  The key  operating  performance  criteria used in this
evaluation  include  revenue  growth,   operating  income  before  depreciation,
amortization,  management  fees,  non-cash  general and  administrative  expense
allocated from parent  ("Adjusted  EBITDA"),  and capital  expenditures.  Senior
management of the Company does not view segment  results below Adjusted  EBITDA,
therefore, interest income, interest expense, provision for losses on investment
related  costs,  gain on sale of  investments,  share in results  of  affiliated
companies,  minority interests in subsidiaries and other expenses are not broken
out by segment below.



                                       12
<PAGE>


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

<TABLE>
<CAPTION>
                    For the Three Months Ended   For the Three Months Ended   For the Six Months Ended   For the Six Months Ended
                           June 30, 1999                June 30, 1998                June 30, 1999              June 30, 1998
                    --------------------------   --------------------------   ------------------------   ------------------------
                                     Adjusted                     Adjusted                   Adjusted                   Adjusted
                    Revenue          EBITDA(1)   Revenue          EBITDA(1)   Revenue        EBITDA(1)   Revenue        EBITDA(1)
                    -------          ---------   -------          ---------   -------        ---------   -------        ---------
<S>                 <C>               <C>        <C>    <C>       <C>         <C>            <C>         <C>            <C>
Australia.........  $34,388           $ 619      $19,188          $(7,721)    $64,820        $(1,441)    $38,504        $(9,106)
New Zealand.......        -               -            -                -           -              -           -              -
Tahiti............        -               -        1,122               13           -              -       2,259            129
Corporate.........        -            (108)           -              (76)          -           (130)          -           (181)
                    -------           -----      -------          -------     -------        -------     -------        -------
   Total..........  $34,388           $ 511      $20,310          $(7,784)    $64,820        $(1,571)    $40,763        $(9,158)
                    =======           =====      =======          =======     =======        =======     =======        =======
</TABLE>

                      As of           As of
                     June 30,      December 31,
                      1999            1998
                    --------------------------
                           Total Assets
                    --------------------------

Australia.........  $225,930         $181,169
New Zealand.......    24,653           23,789
Tahiti............         -                -
Corporate.........     9,952           11,074
                    --------         --------
   Total..........  $260,535         $216,032
                    ========         ========

(1)  "Adjusted  EBITDA"   represents  net  operating   earnings,   depreciation,
     amortization,  non-cash general and administrative  expense allocation from
     parent and management fees.  Industry analysts  generally consider Adjusted
     EBITDA to be a helpful way to measure the  performance of cable  television
     operations  and  communications  companies.  Management  believes  Adjusted
     EBITDA helps  investors to assess the cash flow from operations from period
     to period and thus, to value the Company's business. Adjusted EBITDA should
     not, however, be considered a replacement for net income, cash flows or for
     any  other  measure  of  performance  or  liquidity  under  GAAP,  or as an
     indicator of a company's operating performance. The Company is not entirely
     free to use  the  cash  represented  by  Adjusted  EBITDA.  Several  of the
     Company's  consolidated  operating companies are restricted by the terms of
     their debt  arrangements.  Each company has its own operating  expenses and
     capital  expenditure  requirements,  which can limit the  Company's  use of
     cash. 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.

Adjusted  EBITDA  reconciles  to the  consolidated  statement of  operations  as
follows:
<TABLE>
<CAPTION>
                                                                   For the Three Months            For the Six Months
                                                                      Ended June 30,                 Ended June 30,
                                                                  ------------------------      ------------------------
                                                                     1999          1998            1999          1998
                                                                  ----------    ----------      ----------    ----------
                                                                  <S>            <C>             <C>          <C>
Net operating loss.........................................       $(45,742)      $(33,958)       $(74,686)    $(66,074)
Depreciation and amortization..............................         25,482         23,226          49,943       50,635
Non-cash allocation of parent stock-based compensation
 expense...................................................         17,630              -          17,630            -
Non-cash general and administrative expense
 allocation from parent....................................            779          1,774           1,568        3,932
Management fees............................................          2,362          1,174           3,974        2,349
                                                                  --------       --------        --------     --------
     Consolidated Adjusted EBITDA..........................       $    511       $ (7,784)       $ (1,571)    $ (9,158)
                                                                  ========       ========        ========     ========
</TABLE>



                                       13
<PAGE>


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


11.   SUBSEQUENT EVENT

In  June  1999,  the  Company's  interests  in  Austar,  United  Wireless,   XYZ
Entertainment  and Saturn were  contributed to Austar United in exchange for new
shares  issued by Austar  United.  On July 27,  1999,  Austar  United  closed an
initial public offering.  A total of 103.5 million ordinary shares  representing
approximately  21.6% of Austar United were offered for sale at a price of A$4.70
($3.11)  for total  gross  proceeds  of A$486.5  million  ($321.9  million).  In
connection  with the  offering,  Austar  United  acquired from SaskTel its 35.0%
interest  in  Saturn  in  exchange  for  13,659,574  ordinary  shares,   thereby
increasing Austar United's ownership in Saturn from 65.0% to 100%.  Accordingly,
the Company will  consolidate  Saturn  effective  July 27, 1999.  As a result of
these  transactions,  the Company's fully diluted  ownership  interest in Austar
United is currently 74.1%.


                                       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.

We have no employees of our own. UAP, our parent,  provides various  management,
financial reporting,  accounting and other services for us pursuant to the terms
of the UAP Management Agreement.  Austar, Saturn,  Telefenua and United Wireless
are also  parties  to  technical  service  agreements  with UAP for  which  such
operating companies pay to UAP fees based on their respective gross revenues.

Certain  statements in this report may constitute  "forward-looking  statements"
within  the  meaning  of the  federal  securities  laws.  These  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. These forward-looking  statements involve
known and unknown  risks,  uncertainties  and other  factors which may cause the
actual  results,   performance  or  achievements  or  industry  results,  to  be
materially  different  from  what  we say or  imply  with  such  forward-looking
statements.  These 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 we may
offer,  our ability to secure  adequate  capital to fund other system growth and
development,  risks inherent in investment and operations in foreign  countries,
changes  in  government  regulation,  changes  in the  nature  of key  strategic
relationships with partners and joint ventures,  and other factors referenced in
this report. These forward-looking  statements apply only as of the date of this
report,  and we have no obligation  or plans to provide  updates or revisions to
these forward-looking  statements, or any other changes in events, conditions or
circumstances on which these  statements are based. Our statements  contained in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations in this report related to Year 2000 issues are hereby  denominated as
"Year 2000  Statements"  within the  meaning  of the Year 2000  Information  and
Readiness Disclosure Act.

INTRODUCTION

As of June 30, 1999, we held (i) an effective 100% economic  interest in Austar,
(ii) a 65.0% interest in Saturn, (iii) a 50.0% interest in XYZ Entertainment and
(iv) a 100% interest in United  Wireless  through Austar United and (v) an up to
90.0%  economic  interest  in  Telefenua.  In  connection  with  the  July  1999
Australian IPO, we decreased our interest in Austar United from 100% to 74.1%.

We previously  consolidated  the  operations of Saturn from July 1, 1996 through
September  30, 1998.  Prior to that time,  we accounted  for our  investment  in
Saturn  under  the  equity  method.  During  the  fourth  quarter  of  1998,  we
discontinued  consolidating  the results of operations of Saturn effective as of
January 1, 1998 and returned to the equity method of accounting.  The change was
made to comply with the  consensus  guidance of the  Emerging  Issues Task Force
regarding  Issue 96-16 ("EITF  96-16"),  and related  rules of the SEC,  because
SaskTel  had  participating  approval  or veto  rights  with  respect to certain
significant decisions of Saturn in the ordinary course of business. Accordingly,
the condensed  consolidated  statement of operations and statement of cash flows
for  the  period  ended  June  30,  1998  have  been  adjusted  to  reflect  the
deconsolidation of Saturn effective as of January 1, 1998.  Immediately prior to
the Australian  IPO, Austar United issued shares of Austar United to Sasktel for
their  35.0%  interest  in  Saturn.  As a result,  Saturn  will be  consolidated
effective   July  27,  1999.   Effective   October  1,  1998,  we   discontinued
consolidating   the   results   of   operations   of   Telefenua   due   to   an
other-than-temporary  loss of  control  and  began  using the  equity  method of
accounting.


                                       15
<PAGE>


SUMMARY OPERATING DATA

The following tables set forth certain unaudited operating data:
<TABLE>
<CAPTION>
                                                                   As of June 30, 1999
                                   ------------------------------------------------------------------------------------
                                    Television                          Basic                               Economic
                                     Homes in          Homes         Subscribers/          Basic            Ownership
                                   Service Area        Passed           Lines           Penetration         Interest
                                   ------------      ----------      ------------       -----------         ---------
<S>                                  <C>             <C>               <C>                  <C>              <C>
Multi-channel television:
 Austar.....................         2,085,000       2,083,108         329,002              15.8%            100.0%
 Saturn.....................           141,000          72,212          11,163              15.5%             65.0%
 Telefenua (1)..............            31,000          20,128           6,125              30.4%             90.0%
                                     ---------       ---------         -------
    Total...................         2,257,000       2,175,448         346,290
                                     =========       =========         =======

Telephony:
 Saturn (2).................           141,000          71,710          15,683              21.9%             65.0%
                                     =========       =========         =======
Programming:
 XYZ Entertainment..........               N/A(3)          N/A         807,680(4)             N/A             50.0%
                                     =========       =========         =======
Data:
 Saturn (5).................           141,000          71,710           2,927               4.1%             65.0%
                                     =========       =========         =======

                                                                   As of June 30, 1998
                                   ------------------------------------------------------------------------------------
                                    Television                          Basic                               Economic
                                     Homes in          Homes         Subscribers/          Basic            Ownership
                                   Service Area        Passed           Lines           Penetration         Interest
                                   ------------      ----------      ------------       -----------         ---------
Multi-channel television:
 Austar.....................         1,635,000       1,632,691         215,275              13.2%            100.0%
 Saturn.....................           141,000          36,613           3,635               9.9%             65.0%
 Telefenua..................            31,000          20,128           6,120              30.4%             90.0%
                                     ---------       ---------         -------
    Total...................         1,807,000       1,689,432         225,030
                                     =========       =========         =======
Telephony:
 Saturn (2).................           141,000           7,709           1,023              13.3%             65.0%
                                     =========       =========         =======
Programming:
 XYZ Entertainment..........               N/A(3)          N/A         543,564(4)             N/A             25.0%
                                     =========       =========         =======
</TABLE>

(1)  These  numbers  are as of  September  30,  1998 since we are not  receiving
     current information from Telefenua (see Note 2).
(2)  In April 1998, Saturn launched business and residential  telephony services
     in the Wellington, New Zealand area.
(3)  We expect that XYZ Entertainment's  programming package will be marketed to
     virtually  all  of  Australia's  6.5  million   television   households  by
     Australian multi-channel television providers.
(4)  This figure represents the total estimated  subscribers to the five-channel
     XYZ Entertainment package.
(5)  Saturn launched data services in late 1998.


                                       16
<PAGE>


SELECTED SYSTEM  OPERATING  DATA. The following  table displays  selected system
operating data in Austar's local currency and U.S. dollar:
<TABLE>
<CAPTION>
                                    For the Three Months Ended     For the Six Months Ended
                                             June 30,                      June 30,
                                    --------------------------     ------------------------
                                      1999              1998         1999            1998
                                    --------          --------     --------        --------
                                          (In thousands)                 (In thousands)
     <S>                             <C>               <C>         <C>              <C>
     Austar (A$):
      Revenue.................       53,089            30,479       99,468          59,270
      Adjusted EBITDA(1)......       (3,465)           (9,956)     (10,651)         (9,440)

     Austar (US$):
      Revenue.................       34,711            19,147       64,186          38,346
      Adjusted EBITDA(1)......       (2,266)           (6,138)      (6,836)         (5,795)
</TABLE>

     (1) "Adjusted   EBITDA"    represents   net   operating   earnings   before
         depreciation, amortization, non-cash general and administrative expense
         allocated from parent and management fees.  Industry analysts generally
         consider Adjusted EBITDA to be a helpful way to measure the performance
         of cable television operations and communications companies. We believe
         Adjusted EBITDA helps investors to assess the cash flow from operations
         from period to period and thus, to value our business.  Adjusted EBITDA
         should not, however,  be considered a replacement for net income,  cash
         flows or for any other measure of performance or liquidity  under GAAP,
         or as an indicator  of a company's  operating  performance.  We are not
         entirely free to use the cash represented by Adjusted  EBITDA.  Several
         of our consolidated  operating companies are restricted by the terms of
         their debt  arrangements.  Each company has its own operating  expenses
         and capital expenditure requirements,  which can limit our use of cash.
         Our 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.

LIQUIDITY AND CAPITAL RESOURCES

As of June  30,  1999,  we had  invested  approximately  $446.5  million  in our
projects.  These fundings do not include  amounts  contributed  by  shareholders
other than the Company or amounts contributed in either cash or stock to acquire
additional economic interests.
                                                                       As of
                                                                      June 30,
     SOURCES OF FUNDINGS:                                              1999
                                                                  --------------
                                                                  (In thousands)
     Senior discount notes proceeds, net of offering costs.....      $244,652
     Cash contributions and other equity from parent (1).......       197,314
     Cash received for interest................................         4,528
                                                                     --------
          Total................................................      $446,494
                                                                     ========

                                                                       As of
                                                                      June 30,
     USES OF FUNDINGS:                                                 1999
                                                                  --------------
                                                                  (In thousands)
     Austar (1)................................................      $349,429
     Saturn....................................................        44,612
     Telefenua.................................................        16,738
     XYZ Entertainment.........................................        16,481
     United Wireless...........................................        11,314
     Other.....................................................         7,920
                                                                     --------
          Total................................................      $446,494
                                                                     ========


     (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.

We are responsible for our  proportionate  share of capital  requirements of the
operating companies. We have funded our proportionate share to date with capital
contributions by United through UAP and proceeds from private debt offerings and
have  reduced  our  proportionate  share to date with  subsidiary  bank debt and
strategic partner contributions.  Future funding for customer base expansion and
project  build-out  will  primarily come from the proceeds of the Australian IPO
which closed in July 1999, the New Austar Bank Facility and Saturn's  syndicated
senior debt facility (the "Saturn Bank Facility").

                                       17
<PAGE>

AUSTRALIAN IPO

In  June  1999,  the  Company's  interests  in  Austar,  United  Wireless,   XYZ
Entertainment  and Saturn were  contributed to Austar United in exchange for new
shares  issued by Austar  United.  On July 27,  1999,  Austar  United  closed an
initial public offering.  A total of 103.5 million ordinary shares  representing
approximately  21.6% of Austar United were offered for sale at a price of A$4.70
($3.11)  for total  gross  proceeds  of A$486.5  million  ($321.9  million).  In
connection  with the  offering,  Austar  United  acquired from SaskTel its 35.0%
interest  in  Saturn  in  exchange  for  13,659,574  ordinary  shares,   thereby
increasing Austar United's ownership in Saturn from 65.0% to 100%.  Accordingly,
the Company will  consolidate  Saturn  effective  July 27, 1999.  As a result of
these  transactions,  the Company's fully diluted  ownership  interest in Austar
United is currently 74.1%.

AUSTAR BANK FACILITY

In July 1997,  Austar  secured the Austar Bank Facility in the amount of A$200.0
million to fund its subscriber acquisition and working capital needs. Austar had
drawn the full  amount of the  facility  by April 1999 when the New Austar  Bank
Facility was secured for A$400.0 million to refinance the A$200.0 million Austar
Bank Facility and to fund Austar's  subscriber  acquisition  and working capital
needs. The New Austar Bank Facility consists of two sub-facilities:  (i) A$200.0
million  amortizing  term facility  ("Tranche 1") and (ii) A$200.0  million cash
advance facility  ("Tranche 2"). Tranche 1 was used to refinance the Austar Bank
Facility,  and Tranche 2 is available upon the contribution of additional equity
on a 2:1  debt-to-equity  basis.  As of June 30, 1999,  Austar had drawn A$251.0
million ($167.5 million) on the New Austar Bank Facility. All of Austar's assets
are pledged as  collateral  for this  facility.  In  addition,  pursuant to this
facility, Austar cannot pay any dividends,  interest or fees under its technical
assistance  agreements without the consent of the majority banks. The New Austar
Bank Facility bears interest at the professional market rate in Australia plus a
margin  ranging from 1.75% to 2.25% based upon certain debt to cash flow ratios.
The New Austar Bank  Facility  is fully  repayable  pursuant to an  amortization
schedule beginning December 31, 2002 and ending March 31, 2006.

SATURN BANK FACILITY

On July 15,  1999,  Saturn  closed the  Saturn  Bank  Facility  in the amount of
NZ$125.0 million ($66.8 million) to fund the completion of Saturn's network.  As
of June 30, 1999,  Saturn had drawn NZ$78.0 million ($41.7 million)  against the
facility.

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 1999

We  incurred  a net loss  during the six  months  ended June 30,  1999 of $122.1
million,  which included  non-cash items such as depreciation  and  amortization
expense  totaling  $49.9  million,  accretion  of  interest  on  the  Notes  and
amortization  of  deferred  financing  costs  totaling  $27.7  million  and  the
allocation of expense from parent of $19.2 million.

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

During the six months ended June 30, 1999, cash was used principally for payment
of the Austar Bank Facility of $129.1 million,  purchases of property, plant and
equipment  totaling  $46.8  million to continue new  subscriber  connections  at
Austar  and the  build-out  of  existing  projects,  the  funding  of  operating
activities  of  $21.1  million,   deferred  financing  costs  of  $7.9  million,
investments  in and advances to  affiliated  companies of $5.2 million and other
uses totaling $0.9 million.

FOR THE SIX MONTHS ENDED JUNE 30, 1998

We  incurred  a net loss  during the six  months  ended  June 30,  1998 of $97.9
million,  which included  non-cash items such as depreciation  and  amortization
expense  totaling  $50.6  million  and  accretion  of  interest on the Notes and
amortization of deferred financing costs totaling $23.8 million.

Cash and cash  equivalents  decreased  $11.6  million  from $12.3  million as of
December 31, 1997 to $0.7 million as of June 30, 1998. Principal sources of cash
during the six months  ended June 30,  1998  included  cash  contributions  from
parent of $31.9 million, net proceeds from the sale of short-term investments of
$12.3 million and other investing and financing sources of $0.7 million.


                                       18
<PAGE>


During the six months ended June 30,  1998,  cash was used  principally  for the
purchase of property, plant and equipment of $23.3 million to construct Austar's
and Telefenua's  systems,  the funding of operating activities of $13.9 million,
investments  in and  advances  to  affiliated  companies  of $7.1  million,  the
deconsolidation of Saturn of $9.9 million and other investing and financing uses
totaling $2.3 million.

RESULTS OF OPERATIONS

Effective as of January 1, 1998, we  discontinued  consolidating  the results of
operations of Saturn and returned to the equity  method of accounting  (see Note
2).  Accordingly,  the results of operations  for the three and six months ended
June 30, 1998 have been restated to reflect the effect of this change.

EXCHANGE RATES. We translate  revenue and expense from our foreign  subsidiaries
using the weighted-average  exchange rates during the period.  However, for ease
of  presentation,  the spot  rates for the  countries  in the  Australia/Pacific
region are shown below for the  Australian  dollar and the New  Zealand  dollar,
respectively, per one U.S. dollar.

                                       Australian    New Zealand
                                         Dollars       Dollars
                                       -----------   -----------
          June 30, 1999.............     1.4981        1.8699
          December 31, 1998.........     1.6332        1.8939
          June 30, 1998.............     1.6145        1.9290
          December 31, 1997.........     1.5378        1.7161


REVENUE.  We recognized revenue of $34.4 million and $64.8 million for the three
and six months ended June 30, 1999  compared to $20.3  million and $40.8 million
for the same  periods in the prior year.  This was an increase of $14.1  million
and  $24.0   million  for  the  three  and  six  months  ended  June  30,  1999,
respectively, compared to the amounts for the corresponding periods in the prior
year.

AUSTAR

Revenue for Austar increased $15.6 million,  or 81.7% from $19.1 million for the
three  months  ended June 30, 1998 to $34.7  million for the three  months ended
June 30, 1999.  Austar's revenue  increased $25.9 million,  or 67.6%, from $38.3
million  for the six months  ended June 30,  1998 to $64.2  million  for the six
months ended June 30, 1999. On a functional  currency  basis,  Austar's  revenue
increased A$22.6 million from A$30.5 million for the three months ended June 30,
1998 to A$53.1  million  for the  three  months  ended  June 30,  1999,  a 74.1%
increase.  Austar's  functional  revenue  increased A$40.2 million,  from A$59.3
million  for the six months  ended June 30,  1998 to A$99.5  million for the six
months ended June 30, 1999, a 67.8% increase. These increases were primarily due
to subscriber  growth  (329,002 at June 30, 1999 compared to 215,275 at June 30,
1998) as Austar  continues to expand its customer base. The U.S. dollar increase
was  positively  impacted by $1.4 million due to  fluctuation  in exchange rates
between the three months ended June 30, 1999 and 1998. The U.S.  dollar increase
occurred  despite the  negative  impact of $0.1  million due to  fluctuation  in
exchange rates between the six months ended June 30, 1999 and 1998.

ADJUSTED  EBITDA.  Adjusted  EBITDA was $0.5 million and $(1.6)  million for the
three and six months ended June 30, 1999  compared to $(7.8)  million and $(9.2)
million  for the same  periods in the prior  year.  This was a  decrease  in the
EBITDA loss of $8.3  million and $7.6 million for the three and six months ended
June 30,  1999,  respectively,  compared to the  amounts  for the  corresponding
periods in the prior year.

AUSTAR

Austar's  adjusted  EBITDA loss  decreased $3.8 million,  or 62.3%,  from $(6.1)
million for the three months ended June 30, 1998 to $(2.3) million for the three
months ended June 30, 1999. This decrease in EBITDA loss for the three months is
due to the  increase  in  revenue  in 1999  associated  with  subscriber  growth
partially offset by increased  programming costs.  Austar's adjusted EBITDA loss
increased $1.0 million,  or 17.2%,  from $(5.8) million for the six months ended
June 30, 1998 to $(6.8)  million  for the six months  ended June 30,  1999.  The
increase in EBITDA loss for the six month period from year to year was primarily
due to the large increase in programming and  transmission  costs. The remainder
of the increase  between periods was due to an increase in salaries and benefits
related to the additional personnel necessary to support Austar's  establishment
of local and state offices in its markets and an increase in customer subscriber
management  expense  related  to volume  increases  in  telephone,  billing  and
collection  costs.  These  expense  increases  were  almost  entirely  offset by
increased  revenues  between periods due to subscriber  growth.  On a functional

                                       19
<PAGE>

currency  basis,  Austar's  adjusted  EBITDA loss  decreased  A$6.5 million from
A$(10.0) million for the three months ended June 30, 1998 to A$(3.5) million for
the three  months ended June 30, 1999,  a 65.0%  decrease.  Austar's  functional
currency adjusted EBITDA loss increased A$1.3 million,  from A$(9.4) million for
the six months ended June 30, 1998 to A$(10.7)  million for the six months ended
June 30,  1999,  a 13.8%  increase.  The U.S.  dollar  EBITDA loss  decrease was
positively impacted by $0.1 million due to fluctuation in exchange rates between
the three  months ended June 30, 1999 and 1998 and the U.S.  dollar  EBITDA loss
increase was negatively  impacted by $0.1 million due to fluctuation in exchange
rates between the six months ended June 30, 1999 and 1998.

DEPRECIATION AND  AMORTIZATION  EXPENSE.  Depreciation and amortization  expense
increased  $2.3 million and decreased  $0.7 million for the three and six months
ended June 30, 1999 compared to the amounts for the corresponding periods in the
prior year as follows:
<TABLE>
<CAPTION>

                                              For the Three Months Ended        For the Six Months Ended
                                                        June 30,                        June 30,
                                             ------------------------------   ------------------------------
                                               1999                  1998       1999                  1998
                                             --------              --------   --------              --------
                                                      (In thousands)                  (In thousands)
<S>                                           <C>                  <C>         <C>                   <C>
Austar..................................      $24,996              $21,354     $48,954               $48,235
United Wireless.........................          151                  154         316                   313
Other...................................          335                1,718         673                 2,087
                                              -------              -------     -------               -------
   Total depreciation and amortization
     expense............................      $25,482              $23,226     $49,943               $50,635
                                              =======              =======     =======               =======
</TABLE>

AUSTAR

Depreciation  and  amortization  expense for Austar  increased $3.6 million,  or
16.8%,  from $21.4  million  for the three  months  ended June 30, 1998 to $25.0
million for the three months ended June 30, 1999.  Depreciation and amortization
expense for Austar  increased  $0.8 million,  or 1.7% from $48.2 million for the
six months  ended June 30, 1998 to $49.0  million for the six months  ended June
30, 1999. On a functional currency basis, Austar's depreciation and amortization
expense increased A$4.5 million,  from A$32.4 million for the three months ended
June 30, 1998 to A$36.9  million for the three  months  ended June 30,  1999,  a
13.9%  increase.  On a functional  currency  basis,  Austar's  depreciation  and
amortization  expense  increased A$1.9 million,  from A$71.3 million for the six
months  ended June 30, 1998 to A$73.2  million for the six months ended June 30,
1999, a 2.7% increase.  The U.S. dollar  increases were  negatively  impacted by
$0.9 million due to fluctuation in exchange rates between the three months ended
June  30,  1999  and  1998  and  positively  impacted  by  $0.1  million  due to
fluctuation  in exchange  rates  between the six months  ended June 30, 1999 and
1998.

INTEREST  EXPENSE.  Interest expense increased $3.9 million and $5.7 million for
the three and six months  ended June 30,  1999  compared  to the amounts for the
corresponding  periods in the prior year.  This  increase was  primarily  due to
interest  expense  related to the Austar Bank  Facility  and the New Austar Bank
Facility  which was $5.3  million and $7.9  million for the three and six months
ended June 30, 1999, respectively, compared to $2.1 million and $3.6 million for
the three and six months ended June 30, 1998, respectively.

OTHER INCOME/EXPENSE.  Other expense increased $4.5 million and $4.6 million for
the three and six months  ended June 30,  1999  compared  to the amounts for the
corresponding  periods in the prior year.  This  increase was primarily due to a
programming license write-off of $3.7 million in May 1999.


                                       20
<PAGE>


SHARE IN RESULTS OF AFFILIATED COMPANIES, NET.  We recognized share in losses of
affiliated  companies  of $5.3  million  and $8.7  million for the three and six
months  ended June 30, 1999  compared to $1.2  million and $3.5  million for the
same periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                     For the Three Months Ended                  For the Three Months Ended
                                                           June 30, 1999                               June 30, 1998
                                                -----------------------------------          -------------------------------------
                                                 Company                                      Company
                                                Ownership      Share in Results of           Ownership        Share in Results of
                                                 Interest      Affiliated Companies           Interest        Affiliated Companies
                                                ---------      --------------------          ---------        ---------------------
                                                                  (In thousands)                                 (In thousands)
<S>                                               <C>               <C>                        <C>                 <C>
Saturn........................................    65.0%             $(1,675)                   65.0%               $(2,202)
XYZ Entertainment.............................    50.0%              (3,633)                   25.0%                   955
                                                                    -------                                        -------
  Total share in results of affiliated
    companies, net............................                      $(5,308)                                       $(1,247)
                                                                    =======                                        =======

                                                      For the Six Months Ended                   For the Six Months Ended
                                                           June 30, 1999                               June 30, 1998
                                                -----------------------------------          -------------------------------------
                                                 Company                                      Company
                                                Ownership      Share in Results of           Ownership        Share in Results of
                                                 Interest      Affiliated Companies           Interest        Affiliated Companies
                                                ---------      --------------------          ---------        ---------------------
                                                                  (In thousands)                                 (In thousands)

Saturn........................................    65.0%             $(3,645)                   65.0%               $(4,006)
XYZ Entertainment.............................    50.0%              (5,035)                   25.0%                   470
                                                                    -------                                        -------
  Total share in results of affiliated
    companies, net............................                      $(8,680)                                       $(3,536)
                                                                    =======                                        =======
</TABLE>



                                       21
<PAGE>


YEAR 2000 READINESS DISCLOSURE

Our multi-channel  television,  programming and telephony operations are heavily
dependent upon computer  systems and other  technological  devices with embedded
chips. Such computer systems and other technological  devices may not be capable
of accurately recognizing dates beginning on January 1, 2000. This problem could
cause miscalculations,  resulting in our multi-channel  television and telephony
systems or programming services malfunctioning or failing to operate.

YEAR 2000  PROGRAM.  In response to possible  Year 2000  problems,  the Board of
Directors of United established a Task Force to assess the impact that potential
Year 2000 problems may have on  company-wide  operations,  including the Company
and its operating companies,  and to implement necessary changes to address such
problems.  The Task Force reports  directly to the United  Board.  In creating a
program  to  minimize  Year 2000  problems,  the Task Force  identified  certain
critical  operations  of our business.  These  critical  operations  are service
delivery  systems,  field and  headend  devices,  customer  service  and billing
systems and corporate management and administrative operations (e.g., cash flow,
accounts payable and accounts receivable, payroll and building operations).

The Task Force has established a three-phase  program to address  potential Year
2000 problems:

     (a) Identification  Phase: identify and evaluate computer systems and other
         devices (e.g., headend devices, switches and set top boxes) on a system
         by system basis for Year 2000 compliance.
     (b) Implementation Phase: establish a database and evaluate the information
         obtained in the Identification Phase,  determine priorities,  implement
         corrective procedures, define costs and ensure adequate funding.
     (c) Testing  Phase:  test the  corrective  procedures  to  verify  that all
         material compliance problems will operate on and after January 1, 2000,
         and develop, as necessary, contingency plans for material operations.

As of  June  30,  1999,  97.0%  of  our  operating  systems  had  completed  the
Identification  Phase and the Task Force is working on the Implementation  Phase
for these  systems.  The Task  Force has  researched  almost  94.0% of the items
identified during the  Identification  Phase as to Year 2000 compliance.  Of the
items researched, 73.9% are either compliant or can be easily remediated without
significant  cost to us. The percentage of items  compliant has dropped  because
certain suppliers of computer software and hardware have switched their products
from previously compliant to non-compliant or conditional compliant. Such change
requires  the Task  Force to take  additional  steps to bring  these  items into
compliance.  As a result, the Task Force expects to continue its research on all
items  identified  throughout  1999. Based on current data to date, the computer
systems for all corporate  operations are expected to be in compliance  prior to
Year 2000 and should not require material remediation or replacement.

The Task Force commenced the Testing Phase in first quarter 1999. The Task Force
is  supervising  the  Testing  Phase of the  computer  systems  for our  headend
controllers  and our customer  service  billing  systems and  routers.  Based on
current data to date,  testing will  continue  through the end of 1999.  At this
time, we anticipate  that all material  aspects of the program will be completed
before January 1, 2000.  Certain of our operating systems have not completed the
Identification  Phase,  including  Tahiti  and  certain  Australian  programming
interests.  Despite the Task Force's  attempts to include  these  systems in the
Year 2000  Programs,  these systems have not  responded.  Therefore,  we have no
information  on which to determine if these systems will be Year 2000  compliant
by December 31, 1999. If none of these systems are compliant,  we do not believe
that their operation failure will have a material adverse effect on our business
as a whole.  The  basis for  determining  the above  percentage  includes  these
systems.  In general,  United is managing  the program  with its  internal  Task
Force. In addition, we have retained independent  consultants to assist with our
operations  in New  Zealand,  the results of which are not included in the above
percentages.  The Task Force will  continue  to evaluate  the need for  external
resources to complete the Implementation  Phase and implement the Testing Phase.
In the event the Task Force elects to use external resources, such resources may
not, however, be available.

In addition to its  program,  United is a member of a Year 2000  working  group,
which has 12 cable  television  companies  and meets under the auspices of Cable
Labs.  The  dialogue  with the other  cable  operators  has  assisted  United in
developing its Year 2000 program.  Part of the agenda of the working group is to
develop  test  procedures  and  contingency  plans for  critical  components  of
operating  systems for the benefit of all of its members.  These test procedures
have been made available to members, including United and the Company.

THIRD  PARTY  DEPENDENCIES.  We  believe  our  largest  Year  2000  risk  is our
dependency upon third-party products. Two significant areas on which our systems
depend upon third-party products are programming and telephony interconnects. We
do not have the  ability  to  control  such  parties  in  their  assessment  and
remediation  procedures for potential  Year 2000 problems.  Should these parties

                                       22
<PAGE>
not be prepared for Year 2000,  their  systems may fail and we would not be able
to provide service to our customers. Notwithstanding these limitations, the Task
Force monitors the websites for all vendors used by us, to the extent available,
for information on such vendors' Year 2000 programs.  To the extent  applicable,
the Task Force  uses such  information  to verify  Year 2000  compliance  and to
implement  remediation  procedures.  For  example,  this is how the  Task  Force
learned that previously compliant reports on computer hardware and software from
third party vendors have been  re-classified  as  non-compliant  or  conditional
compliant. Such changes are not within the control of the Company.

We also have requested  information  from various third parties on the status of
their  Year  2000  compliance  programs  in an effort to  prevent  any  possible
interruptions or failures.  To date,  responses to such communications have been
limited and the responses  received state only that the party is working on Year
2000 issues and does not have a definitive  position at this time.  As a result,
we are  unable to  assess  the risk  posed by our  dependence  upon  such  third
parties' systems. Vendors for critical equipment components, such as the headend
controllers   mentioned  below,   have  been  more  responsive  and  we  believe
substantially  all of our  equipment  will be Year 2000  compliant.  We  cannot,
however,  give any assurance  concerning  compliance  of equipment  because such
belief  is  based  on   information   provided  by  vendors,   which  cannot  be
independently  verified,  and because of the uncertainties inherent in Year 2000
remediation.

The Task Force is  considering  certain  limited  contingency  plans,  including
preparing back-up  programming and stand-by power  generators.  Such contingency
plans may not,  however,  resolve the  problem in a  satisfactory  manner.  With
respect to other third-party  systems,  each operating system is responsible for
inquiring of their vendors and other entities with which they do business (e.g.,
utility  companies,  financial  institutions  and  facility  owners)  as to such
entities'  Year  2000  compliance  programs.  In  addition,  the Task  Force has
distributed a contingency plan to all of our operating  systems.  Such plan sets
forth preparation procedures and recovery solutions.

The Task Force is working closely with the  manufacturers of our headend devices
to remedy any Year 2000  problems  assessed  in the  headend  equipment.  Recent
information from the two primary  manufacturers of such equipment  indicate that
most of the  equipment  used in our  operating  systems are not date  sensitive.
Where such equipment needs to be upgraded for Year 2000 issues, such vendors are
upgrading  without  charge.  These upgrades are expected to be completed  before
year-end  1999,  but such a process  is not  wholly  within  our  control or our
systems' control.  Approximately 99.0% of the headend controllers, which are the
most critical  component of the headend devices have been upgraded and tested as
compliant.  With respect to billing and customer care  systems,  we use standard
billing and  customer  care  programs  from several  vendors.  The Task Force is
working with such vendors to achieve Year 2000 compliance for all systems.

COSTS OF  COMPLIANCE.  The Task Force is not able to determine  the full cost of
its Year 2000 program and its related impact on our financial condition.  In the
course of our business,  we have made substantial  capital  adjustments over the
past few years in improving  our systems,  primarily for reasons other than Year
2000. Because these upgrades also resulted in Year 2000 compliance,  replacement
and remediation  costs have been low. The Task Force has,  however,  revised its
estimates  of the cost for the  Year  2000  program  to $1.5  million.  The cost
includes certain identified  replacement and remediation procedures and external
consultants,   and  has  been  increased  because  of  system  acquisitions  and
additional  date  sensitive  items  that  require   research  as  to  Year  2000
compliance.  Such estimate does not, however,  include internal costs because we
do not  separately  track the internal costs incurred for the Year 2000 program.
Although  no  assurance  can be made,  we  believe  that  the  known  Year  2000
compliance  issues can be  remedied  without a  material  financial  impact.  No
assurance can be made,  however,  as to the total cost for the Year 2000 program
until all of the data has been  gathered.  In  addition,  we can not predict the
financial impact we will incur if Year 2000 problems are caused by third parties
upon which our systems are dependent or experienced by entities in which we hold
investments.  The  failure of any one of these  parties to  implement  Year 2000
procedures  could have a material adverse impact on our operations and financial
condition.


                                       23
<PAGE>


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

INVESTMENT PORTFOLIO

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

IMPACT OF FOREIGN CURRENCY RATE CHANGES

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

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

The spot rates for the countries in the Australia/Pacific region are shown below
for the Australian and New Zealand dollars per one U.S. dollar.

                                          Australian    New Zealand
                                            Dollars       Dollars
                                          ----------    -----------
          June 30, 1999..............       1.4981        1.8699
          December 31, 1998..........       1.6332        1.8939
          June 30, 1998..............       1.6145        1.9290
          December 31, 1997..........       1.5378        1.7161

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

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


                                       24
<PAGE>


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 (May 1996 and September 1997 Notes) and  Australian  dollars (New Austar
Bank Facility).
<TABLE>
<CAPTION>
                                                                   As of June 30, 1999
                                                        ------------------------------------------
                                                        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..................      $381,420                        $345,006
         Average interest rate.....................         14.00%                          16.26%
       Variable rate A$ Denominated................      $167,546                        $167,546
         Average interest rate.....................          7.65%                           7.65%
</TABLE>

The table  below  presents  principal  cash flows and  related  weighted-average
interest  rates  by  expected  maturity  dates  for our  debt  obligations.  The
information  is presented in U.S.  dollar  equivalents,  which is our  reporting
currency.  The  instrument's  actual  cash  flows are  denominated  in both U.S.
dollars (May 1996 and September 1997 Notes) and Australian  dollars (Austar Bank
Facility).


<TABLE>
<CAPTION>
                                                                     As of June 30, 1999
                                             ------------------------------------------------------------------------
                                               1999      2000      2001      2002      2003    Thereafter     Total
                                             --------  --------  --------  --------  --------  ----------   ---------
                                                         (U.S. dollars, in thousands, except interest rates)
     <S>                                      <C>         <C>     <C>       <C>      <C>        <C>          <C>
     Long-term and short-term debt:
       Fixed rate USD Denominated..........   $ -        $ -       $ -       $ -     $     -    $381,420     $381,420
         Average interest rate.............     -          -         -         -           -       14.00%       14.00%
       Variable rate A$ Denominated........   $ -        $ -       $ -       $ -     $51,553    $115,993     $167,546
         Average interest rate.............     -          -         -         -        7.65%       7.65%        7.65%
</TABLE>


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 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  million  ($33.4 million as of
June 30, 1999) 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  million ($66.8 million as of June 30, 1999) of variable rate,
long-term  debt  into  fixed  rate   borrowings.   As  of  June  30,  1999,  the
weighted-average  fixed rate under these  agreements  was 7.95%.  As a result of
these swap agreements,  interest  expense was increased by  approximately  A$0.3
million ($0.2 million) during the second quarter 1999.

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. As of June 30, 1999, we estimate that we
would have paid  approximately  A$3.4  million  ($2.3  million) to terminate the
agreements.

The table below provides  information  about our interest rate swaps.  The table
presents  notional  amounts  and  weighted-average  interest  rates by  expected
(contractual)  maturity  dates.  Notional  amounts  are  used to  calculate  the
contractual  payments to be exchanged  under the contract.  The  information  is
presented in U.S.  dollar  equivalents  (in  thousands),  which is our reporting
currency.  The  instrument's  actual cash flows are  denominated  in  Australian
dollars.


                                       25
<PAGE>
 <TABLE>
<CAPTION>
                                                                      As of June 30, 1999
                                             ------------------------------------------------------------------------
                                               1999      2000      2001      2002      2003    Thereafter     Total
                                             --------  --------  --------  --------  --------  ----------   ---------
                                                         (U.S. dollars, in thousands, except interest rates)
<S>                                           <C>        <C>       <C>     <C>         <C>       <C>         <C>
Interest Rate Swaps:
Variable to fixed..........................      -          -         -    $33,376        -      $66,751     $100,127
Average pay rate %.........................   7.95%      7.95%     7.95%     7.95%     7.95%        7.95%        7.95%
Average receive rate %.....................   7.65%      7.65%     7.65%     7.65%     7.65%        7.65%        7.65%
</TABLE>


                                       26

<PAGE>

                           PART II - OTHER INFORMATION


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

(a)  Exhibits

     27.1  Financial Data Schedule

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

     None.




<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.



UIH AUSTRALIA/PACIFIC, INC.



Date:        August 16, 1999
           -----------------------------------------------------------

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




                                       28