UCOMA Unitedglobalcom (MM)

UGC Reports Year End 2003 Results Customer Growth Increases Sharply in Fourth Quarter 2003 DENVER, March 15 /PRNewswire-FirstCall/ -- UnitedGlobalCom, Inc. ("UGC")(1) , today announces operating and financial results for the fourth quarter and year-ended December 31, 2003. Highlights for the fiscal year (unless noted) include: -- Revenue increase of 25% to $1.9 billion -- Adjusted EBITDA(2) increase of 112% to $629 million -- Adjusted EBITDA margin of 33.2% compared to 19.6% for 2002 -- Net income of $2.0 billion compared to a net loss of $(356) million in fiscal 2002 -- Net new RGUs of 316,200, of which 147,600 added in the fourth quarter -- Positive Free Cash Flow(3) of $59 million for fiscal 2003, a $688 million improvement comparedto fiscal 2002 and a $1.7 billion improvement compared to fiscal 2001 Executive Summary We are pleased to announce results for the fourth quarter and full year-ended December 31, 2003. Our business continues to demonstrate strong operational improvement, with a focus on profitable customer growth and cost controls. As a result, Adjusted EBITDA reached a new high of $186 million in the fourth quarter and $629 million for the full year, year over year increases of more than 110%. Net income was $2.0 billion for the full year 2003, impacted by a $2.2 billion gain on the extinguishment of debt due primarily to the successful completion of our European balance sheet restructuring in September 2003. During the fourth quarter of 2003, we returned to normalized subscriber growth, adding 147,600 net new RGUs, or nearly 50% of the 316,200 total RGUs added during the full year. At December 31, 2003, total RGUs were 9,155,300. Customer growth remains strong in early 2004, driven primarily by higher than expected Internet sales as a result of our tiering strategy across most of our European markets. Mike Fries, President and Chief Executive Officer of UGC said, "The past year has been transformational for the Company. We significantly strengthened our balance sheet with the completion of our European restructuring in September 2003 and the recent completion of our $1.0 billion rights offering. We simplified our corporate structure with the successful roll-up of UGC Europe in December 2003. And earlierthis year Liberty Media acquired a controlling interest in UGC. The combination of these events positions us well for continued operational growth and the strategic development of our business. "Our 2003 financial performance was strong, with key guidance targets met, record EBITDA growth and positive Free Cash Flow. In Europe, we achieved EUR 505 million of Adjusted EBITDA compared to guidance of EUR 500 million. Our balance sheet is solid and our leverage is falling rapidly with continued improvement in our cash flow generated by operations. Following the successful completion of our rights offering, the Company's net debt to annualized Adjusted EBITDA ratio is 3.6x, down from 5.3x at September 30, 2003 and below our long-term target of 4.0x - 5.0x. Looking ahead, we have set aggressive operating and financial targets for 2004 and we are committed to achieving those goals." Recent Events UGC Completes Exchange Offer for UGC Europe Shares: On December 18, 2003, we successfully completed ourexchange offer for all of the outstanding publicly held shares of UGC Europe. As a result, UGC now owns 100% of UGC Europe and it is no longer listed on the Nasdaq National Market. Liberty Acquires Controlling Interest: On January 5, 2004, UGC and Liberty Media Corporation (NYSE:LNYSE:LMC.B) announced that Liberty acquired all of the outstanding shares of Class B common stock from UGC's founding shareholders. Following the exercises of its pre-emptive right described below, Liberty's current ownership interest in UGC is approximately 55%. European Bank Amendment Secured: On January 20, 2004, we finalized an agreement with lenders under our existing EUR 3.5 billion Senior Bank Facility to amend certain terms and to permit the draw down of over EUR 1.0 billion under a New Facility the proceeds of which will be used to fund scheduled amortizations between December 2004 - 2006. The New Facility will have a bullet repayment on June 30, 2009. In addition, amendments were agreed regarding the financial covenants, prepayment provisions, acquisitions and the acquisition basket, which will provide greater flexibility going forward. Liberty Exercises Pre-emptive Right: On January 20 & 21, 2004, Liberty exercised its pre-emptive right resulting from the completion of the UGCE exchange offer and purchased approximately 18.3 million of UGC's Class A shares at $7.69 per share. UGC received proceeds of approximately $141 million, of which approximately $105 million was used to repay a loan and accrued interest from Liberty. UGC Completes Rights Offering: On February 19, 2004, we completed our $1.0 billion rights offering announced on January 12 of this year. The rights offering was substantially over-subscribed and resulted in gross proceeds to the Company of $1.02 billion. We intend to use the proceeds of the rights offering for working capital and general corporate purposes, including future acquisitions and repayment of outstanding indebtedness. UGC Signs Noos Purchase Agreement: Today we announced that UGC has entered into a definitive agreement with the French SUEZ group to acquire Noos, the largest French cable operator with 1.2 million RGUs. SUEZ will become a 20% shareholder in our French holding company, which includes our existing UPC France operations. The transaction values the enterprise at 7.25 times annualized 2004 EBITDA at closing, with a floor price of EUR 508 million, below which UGC would not have to close, and capped to a maximum price of EUR 660 million. Agreement with Amsterdam Reached: On March 12, 2004, we reached an agreement with the municipality of Amsterdam on an increase to our cable rates. The standard cable tariffs will increase in two steps this year to EUR 15.20 from EUR 11.36, VAT included. Besides higher cable tariffs, we have agreed on other changes in our 1995 contract, which has been extended for another nine years. Senior Management and Board of Directors Update On January 5, 2004, we announced that Mike Fries, our President and COO, was promoted to Chief Executive Officer and President of UGC. Gene Schneider resigned as Chief Executive Officer of UGC, but remains Chairman of the Board. Also on January 5, 2004, Paul Gould was appointed to UGC's board of directors. Mr. Gould is currently a director of Liberty Media and a Managing Director of Allen & Company, an investment banking company. On February 19, 2004, Charlie Bracken and Rick Westerman were appointed co-Chief Financial Officers of UGC. Fiscal 2003 Results Our significant and consolidated operating subsidiaries in Europe include UPC Broadband -- our cable television and broadband division with operations in 11 countries, and chellomedia -- our media and programming division, which also includes Priority Telecom. In Latin America, our primary operation is VTR GlobalCom (VTR), our cable television and broadband provider in Chile. Please refer to the Financial Highlights and Consolidated Financial Statements section at the end of this press release for additional information. Revenue Revenue for the year ended December 31, 2003 was $1.9 billion, an increase of 25% or $377 million compared to the prior year. Approximately 70% of the full year sales increase was due to foreign exchange rate fluctuations (primarily the appreciation of the Euro vs. the US$). Underlying revenue growth was 7.5% for fiscal 2003 driven primarily by higher average monthly revenue per subscriber (ARPU) and RGU growth. Revenue for the three months ended December 31, 2003 was $516 million, a 28% or $114 million improvement compared to the same period in 2002. Approximately 69% of the increase was due to foreign exchange rate fluctuations while underlying revenue growth was 9% for the fourth quarter 2003. ARPU per RGU for the year ended December 31,2003 was $16.35, an increase of 23% compared to the prior year. Approximately 70% of the full year ARPU increase was due to foreign exchange rate fluctuations (primarily the appreciation of the Euro vs. the US$). ARPU for the three months ended December 31, 2003 was $17.69, a 25% improvement compared to the same period in 2002. Adjusted EBITDA Adjusted EBITDA(4) for the year ended December 31, 2003 was $629 million, an increase of 112% or $333 million compared to the prior year. Excluding the impact of foreign exchange rate fluctuations, our underlying Adjusted EBITDA growth was 81% for fiscal 2003. UGC's consolidated Adjusted EBITDA margin improved to 33.2% for fiscal 2003 compared to 19.6% for fiscal 2002. Adjusted EBITDA for the three months ended December 31, 2003 was $186 million, a 115% or $100 million improvement compared to the same period in 2002. UGC's consolidated Adjusted EBITDA margin improved to 36.1% for the fourth quarter 2003 compared to 21.5% for the fourth quarter 2002. NetIncome (Loss) Net income was $2.0 billion for the year ended December 31, 2003, which compares with a net loss of $(356) million for fiscal 2002. One of the primary differences related to the cumulative effect of a change in accounting principle of negative $(1.3) billion for fiscal 2002. Free Cash Flow and Capital Expenditures We remain focused on improving the underlying cash flow generation of our business. Free Cash Flow(5) for the year ended December 31, 2003 was $59 million, a $688 million improvement compared to fiscal 2002 and a $1.7 billion improvement compared to fiscal 2001. This marks the first full year in our history that we have achieved positive Free Cash Flow. Capital expenditures remained flat at $333 million for fiscal 2003 compared to $335 million for 2002. We have completed the majority of our two-way network upgrade in Western Europe and Chile, and going forward we will maintain our focus on capital expenditures that drive profitable customer and revenue growth. Operating Statistics Net new RGUs were 316,200 during fiscal 2003 a 3.6% increase to 9,155,300 total RGUs at year-end 2003. During the fourth quarter of 2003, we returned to normalized subscriber growth, adding 147,600 net new RGUs or nearly 50% of the full year increase. Net new Internet RGUs were 175,300 for the full year 2003, an increase of 23% from year-end 2002. In the second half of 2003 and in early 2004, we introduced new tiers of Internet service across most of our European markets. These new products have generated a substantial increase in demand, and we added 56,200 net new Internet RGUs during the fourth quarter 2003. In terms of growth in our core video business, we added over 88,000 analog video and DTH RGUs during 2003. Customer growth remains strong in early 2004, driven primarily by higher than expected Internet sales. 2004 Outlook We continue to prioritize Adjusted EBITDA and Free Cash Flow generation driven by profitable subscriber and revenue growth. In 2004, we expect to generate a significant increase in customer growth compared to 2003 driven primarily by our operation in Europe. Together with customer growth in Chile, we expect to add at least 500,000 net new RGUs in 2004; most of those additions being high-speed Internet customers. If successful in achieving our RGU target, we expect to generate full year 2004 revenue growth in local currencies of 10%, excluding acquisitions. In addition to unit growth, improvement in analog video ARPU is expected to drive a meaningfulportion of the year-over-year sales increase. Adjusted EBITDA is expected to increase at least 20% in local currencies, excluding acquisitions. Based on foreign currency exchange (FX) rates of 1.20 for the euro and 650 for the Chilean Peso, we expect to report Adjusted EBITDA of at least $800 million for fiscal 2004(6). Capital expenditures for the year are expected to be approximately 20% of revenue. We expect to continue to be Free Cash Flow positive in fiscal 2004. About UnitedGlobalCom UGC is the leading international broadband communications provider of video, voice, and Internet services with operations in 15 countries. Based on UGC's operating statistics at December 31, 2003, the Company's networks reached approximately 12.7 million homes and had approximately 9.2 million RGUs, including approximately 7.5 million video subscribers, 733,000 telephone subscribers and 924,200 Internet access subscribers. Forward Looking Statements: Except for historical information contained herein, this press release contains forward looking statements, including guidance given for 2004 in the section "2004 Outlook" and expectations about the growth, opportunities and performance of the combined French operations. These forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include, obtaining regulatory approval for the Noos Transaction, our ability to successfully integrate the French systems, continued use by subscribers and potential subscribers of the Company's services, changes in the technology and competition, our ability to achieve expected operational efficiencies and economies of scale, our ability to generate expected revenue and achieve assumed margins, as well as other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any guidance and other forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please visit http://www.unitedglobal.com/ for further information. (1) Including the "Company", "we", "us", "our", and similar terms. (2)Please see pages 6 and 7 of this press release for a full explanation of Adjusted EBITDA, more detail on Adjusted EBITDA by company, and a reconciliation of Adjusted EBITDA to Net Income (Loss). (3) Please see page 3 of this press release for a full explanation of FreeCash Flow. (4) Please see pages 6 and 7 of this press release for a full explanation of Adjusted EBITDA, more detail on Adjusted EBITDA by company, and a reconciliation of Adjusted EBITDA to Net Income (Loss). (5) Free Cash Flow is not a GAAP measureof liquidity. We define Free Cash Flow as net cash flows from operating activities less capital expenditures. We believe our presentation of free cash flow provides useful information to our investors because it can be used to gauge our ability to service debt and fund new investment opportunities. Investors should view free cash flow as a supplement to, and not a substitute for, GAAP cash flows from operating, investing and financing activities as a measure of liquidity. (6) The Company is unable to provide a reconciliation of forecasted Adjusted EBITDA to the most directly comparable GAAP measure, net income, because certain items are out of our control and/or cannot be reasonably predicted. For example, it is impractical to: (1) estimate future fluctuations in interest rates on our variable-rate debt facilities; (2) estimate the fluctuations in exchange rates relative to our U.S. dollar denominated debt; (3) estimate the financial results of our non-consolidated affiliates; and (4) estimatechanges in circumstances that lead to gains and/or losses and/or sales of investments in affiliates and other assets. Any and/or all of these items could be significant to our financial results. Financial Highlights: Revenue For the Year Ended (thousands) Dec-03 Dec-02 Change UPC Broadband $1,528,068 $1,182,754 29% Chellomedia 220,321 182,474 21% VTR 229,835 186,426 23% Other (1) (86,694) (64,702) -34% Ongoing Operations 1,891,530 1,486,952 27% UPC Germany (2) 0 28,069 n.m. UGC Consolidated $1,891,530 $1,515,021 25% Year/ For the Three Months Ended Sequential Year (thousands) Q4 2003 Q3 2003 Q4 2002 Change Change UPC Broadband $411,867 $382,952 $322,155 8% 28% Chellomedia 57,741 55,540 47,170 4% 22% VTR 68,168 58,608 49,611 16% 37% Other (1) (21,912) (22,585) (17,423) 3% -26% Ongoing Operations 515,864 474,515 401,513 9% 28% UPC Germany (2) 0 0 0 n.a. n.a. UGC Consolidated $515,864 $474,515 $401,513 9% 28% (1) Includes primarily intercompany eliminations and other Latin America Broadband. (2) In July 2002, UPC sold 22.3% ofits interest in UPC Germany to its partner. As a result, UPC's ownership decreased to 28.7% of UPC Germany and it was deconsolidated effective August 1, 2002. The following is provided for informational purposes only to highlight revenues in the functional currency of UGC Europe (Euros) and VTR (Chilean Pesos), as follows: For the Year Ended (thousands, except for VTR) Dec-03 Dec-02 Change UPC Broadband euro 1,349,399 euro 1,251,147 8% Chellomedia 194,559 193,026 1% Other (1) (83,444) (77,809) -7% Subtotal 1,460,514 1,366,364 7% UPC Germany (2) 0 29,692 n.m. UGC Europe - Total euro 1,460,514 euro 1,396,056 5% VTR (millions) CP157,676 CP128,547 23% Year/ For the Three Months Ended Sequential Year (thousands, except for VTR) Q4 2003 Q3 2003 Q4 2002 Change Change UPC Broadband euro 346,323 euro 339,834 euro 323,145 2% 7% Chellomedia 48,514 49,286 46,854 -2% 4% Other (1) (20,048) (21,880) (20,044) 8% -0% Subtotal 374,789 367,240 349,955 2% 7% UPC Germany (2) 0 0 0 n.a. n.a. UGC Europe - Total euro 374,789 euro 367,240 euro 349,955 2% 7% VTR (millions) CP42,547 CP40,629 CP35,584 5% 20% (1) Includes primarily intercompany eliminations. (2) UPC Germany was deconsolidated effective August 1, 2002. Adjusted EBITDA The table below highlights Adjusted EBITDA by segment: For the Year Ended (thousands) Dec-03 Dec-02 Change UPC Broadband $582,768 $292,865 99% Chellomedia 36,371 (9,034) 503% VTR 69,951 41,959 67% Other (1) (60,208) (41,978) -43% Ongoing Operations 628,882 283,812 122% UPC Germany (2) 0 12,562 n.m. UGC Consolidated $628,882 $296,374 112% EBITDA Margin (% of revenues) 33.2% 19.6% 70% Year/ For the Three Months Ended Sequential Year (thousands) Q4 2003 Q3 2003 Q4 2002 Change Change UPC Broadband $163,656 $159,847 $89,791 2% 82% Chellomedia 9,830 11,794 1,715-17% 473% VTR 22,067 18,929 12,131 17% 82% Other 1 (9,539) (19,204) (17,188) 50% -45% Ongoing Operations 186,014 171,366 86,449 9% 115% UPC Germany 2 0 0 0 n.a. n.a. UGC Consolidated $186,014 $171,366 $86,449 9% 115% EBITDA Margin (% of revenues) 36.1% 36.1% 21.5% 0% 67% (1) Includes primarily intercompany eliminations and other Latin America Broadband. (2) UPC Germany was deconsolidated effective August 1, 2002. The following is provided for informational purposes only to highlight Adjusted EBITDA in the functional currency of UGC Europe (Euros) and VTR (Chilean Pesos), as follows: For the Year Ended (thousands, except for VTR) Dec-03 Dec-02 Change UPC Broadband euro 513,182 euro 307,280 67% Chellomedia 32,028 (9,478) 438% Other (1) (40,588) (26,994) -50% Subtotal 504,622 270,808 86% UPC Germany (2) 0 13,180 n.m. UGC Europe - Total euro 504,622 euro 283,988 78% EBITDA Margin (% of revenues) 34.6% 20.3% 69.8% VTR (in millions) CP47,801 CP29,026 65% EBITDA Margin (% of revenues) 30.3% 22.6% 34% Year/ For the Three Months Ended Sequential Year (thousands, except for VTR) Q4 2003 Q3 2003 Q4 2002 Change Change UPC Broadband euro 137,268 euro 141,837 euro 89,671 -3% 53% Chellomedia 8,223 10,491 2,040 -22% 303% Other 1 (5,065) (14,646) (8,125) 65% -38% Subtotal 140,426 137,682 83,586 2% 68% UPC Germany 2 0 0 0 n.a. n.a. UGC Europe - Total euro 140,426 euro 137,682 euro 83,586 2% 68% EBITDA Margin (% of revenues) 37.5% 37.5% 23.9% -0.1% 56.9% VTR (in millions) CP13,815 CP13,110 CP8,719 5% 58% EBITDA Margin (% of revenues) 32.5% 32.3% 24.5% 1% 33% (1) Includes primarily intercompany eliminations. (2) UPC Germany was deconsolidated effective August 1, 2002. Use of Adjusted EBITDA Adjusted EBITDA is the primary measure used by our chief operating decision makers to evaluate segment-operating performance and to decide how to allocate resources to segments. "EBITDA" is an acronym for earnings before interest, taxes, depreciation and amortization. As we use the term, Adjusted EBITDA further removes theeffects of cumulative effects of accounting changes, share in results of affiliates, minority interests in subsidiaries, reorganization expense, other income and expense, provision for loss on investments, gain (loss) on sale of investments in affiliates, gain on extinguishment of debt, foreign currency exchange gain (loss), impairment and restructuring charges and stock-based compensation. We believe Adjusted EBITDA is meaningful because it provides investors a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that is used by our internal decision makers. Our internal decision makers believe Adjusted EBITDA is a meaningful measure and is superior to other available generally accepted accounting principles ("GAAP") measures because it represents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons and benchmarking between segments in the different countries in which we operate and identify strategies to improve operating performance. For example, our internal decision makers believe that the inclusion of impairment and restructuring charges within Adjusted EBITDA distorts their ability to efficiently assess and view the core operating trends in our segments. In addition, our internal decision makers believe our measure of Adjusted EBITDA is important because analysts and other investors use it to compare our performance to other companies inour industry. We reconcile the total of the reportable segments' Adjusted EBITDA to our consolidated net income as presented in the accompanying consolidated statements of operations, because we believe consolidated net income is the most directly comparable financial measure to total segment operating performance. Investors should view Adjusted EBITDA as a supplement to, and not a substitute for, other GAAP measures of income as a measure of operating performance. As discussed above, Adjusted EBITDA excludes, among other items, frequently occurring impairment, restructuring and other charges that would be included in GAAP measures of operating performance. Adjusted EBITDA Reconciliation The table below highlights the reconciliation of Adjusted EBITDA to Net income (loss): (thousands) FYE 2003 FYE 2002 Q4 2003 Q3 2003 Q4 2002 Total Segment Adjusted EBITDA $628,882 $296,374 $186,014 $171,366 $86,449 Depreciation and amortization (808,663) (730,001)(210,456) (192,002) (191,191) Impairment of long-lived assets (402,239) (436,153) (403,667) 0 (415,762) Restructuring charges and other (35,970) (1,274) (28,097) 459 (160) Stock-based compensation (38,024) (28,228) (9,377) (14,261) (2,610) Operating income (loss) (656,014) (899,282) (465,583) (34,438) (523,274) Interest expense, net (314,078) (641,786) (60,868) (71,247) (172,376) Foreign currency exchange gain (loss), net 121,612 739,794 (16,270) (276,529) 305,495 Gain on early extinguishments of debt 2,183,997 2,208,782 0 2,109,596 0 Gain (loss) on sale of investments in affiliates, net 279,442 117,262 (1,879) (283) (25,580) Other income (expense), net (14,884) (120,832) 263 (1,107) 73,191 Income (loss) before income taxes and other items 1,600,075 1,403,938 (544,337) 1,725,992 (342,544) Other, net 395,293 (415,670) 163,643 11,117 (76,119) Income (loss) before cum. effect of change in acctg. principle 1,995,368 988,268 (380,694) 1,737,109 (418,663) Cumulative effect of change in accounting principle 0 (1,344,722) 0 0 0 Net income (loss) $1,995,368 ($356,454)($380,694) $1,737,109 ($418,663) Free Cash Flow Reconciliation and Capital Expenditures Update For the Year Ended (thousands) Dec-03 Dec-02 Change Net cash flows from operating activities $392,092 ($293,608) -234% Capital expenditures (333,124) (335,192) -1% Free cash flow $58,968 ($628,800) -109% Year/ For the Three Months Ended Sequential Year (thousands) Q4 2003 Q3 2003 Q4 2002 Change Change Net cash flows from operating activities $118,651 $98,701 $12,824 20% 825% Capital expenditures (105,426) (94,755) (101,072) 11% 4% Free cash flow $13,225 $3,946 ($88,248) 235% -115% The table below highlights our capital expenditure for the FYE 2003 (per NCTA cable industry guidelines): (thousands) UGC Europe VTR Other UGC Customer Premises Equipment $77,930 $18,295 $786 $97,011 Commercial -- -- -- -- Scaleable Infrastructure 40,964 1,890 22 42,876 Line Extensions 58,495 8,454 155 67,104 Upgrade/Rebuild 29,268 -- -- 29,268 Support Capital 57,453 12,752 713 70,918 Intangibles 2,718 -- -- 2,718 UPC Media 6,053 -- -- 6,053 Priority Telecom 17,176 0 0 17,176 Total Capital Expenditures $290,057 $41,391 $1,676 $333,124 Consolidated Operating Statistics The table below shows operating statistics for UGC a consolidated basis: Year/Year Sequential Dec-03 Dec-02 Change Sep-03 Change Homes Passed 12,693,500 12,471,700 2% 12,600,000 1% Two-Way Homes Passed 7,536,000 6,913,100 9% 7,279,700 4% RGUs by product: Internet 924,200 748,900 23% 868,000 6% Telephone 733,000 690,900 6% 717,900 2% DTH 197,300 147,900 33% 166,500 18% Digital 145,700 135,200 8% 139,700 4% Analog Cable 7,155,100 7,116,200 1% 7,115,600 1% Total RGUs 9,155,300 8,839,100 4% 9,007,700 2% RGUs by company: Europe 8,229,600 8,039,300 2% 8,116,000 1% VTR 894,000 767,900 16% 859,700 4% Other 31,700 31,900 -1% 32,000 -1% Total RGUs 9,155,300 8,839,100 4% 9,007,700 2% The table below highlights UGC's average revenue per subscriber per month ("ARPU") for UGC Consolidated, UGC Europe (Euros only) and VTR (both Chilean Pesos and US$'s): For the Year Ended ARPU (1) Dec-03 Dec-02 Change UGC Consolidated $16.35 $13.25 23% UGC Europe: Western Europe euro 16.48 euro 15.69 5% Eastern Europe 9.08 8.69 4% Total, UGC Europe euro 13.82 euro 13.17 5% VTR GlobalCom (Pesos) 15,813 15,023 5% VTR GlobalCom (US$'s) $23.05 $21.79 6% For the Three Months Ended Year/ Sequential Year ARPU (1) Q4 2003 Q3 2003 Q4 2002 Change Change UGC Consolidated $17.69 $16.49 $14.18 7% 25% UGC Europe: Western Europe euro 16.85 euro 16.77 euro 15.99 0% 5% Eastern Europe 9.27 8.99 8.94 3% 4% Total, UGC Europe euro 14.13 euro 13.99 euro 13.48 1% 5% VTR GlobalCom (Pesos) 16,174 16,101 15,734 0% 3% VTR GlobalCom (US$'s)$25.91 $23.23 $21.94 12% 18% (1) ARPU calculations (excludes UPC Germany for FYE 2002) are calculated as follows: average monthly broadband revenue for the period as indicated, divided by the average of the opening and closing RGUs for the period as indicated. UnitedGlobalCom, Inc. Consolidated Balance Sheets (In thousands, except par value and number of shares) December 31, 2003 2002 Assets Current assets Cash and cash equivalents $310,361 $410,185 Restricted cash 25,052 48,219 Marketable equity securities and other investments 208,459 45,854 Subscriber receivables, net of allowance for doubtful accounts of $51,109 and $71,485, respectively 140,075 136,796 Related party receivables 1,730 15,402 Other receivables 63,427 50,759 Deferred financing costs, net 2,730 62,996 Other current assets, net 76,812 95,340 Total current assets 828,646 865,551 Long-term assets Property, plant and equipment, net 3,342,743 3,640,211 Goodwill 2,519,831 1,250,333 Intangible assets, net 252,236 13,776 Other assets, net 156,215 161,723 Total assets $7,099,671 $5,931,594 Liabilities and Stockholders' Equity (Deficit) Current liabilities Not subject to compromise: Accounts payable $224,092 $190,710 Accounts payable, related party 1,448 1,704 Accrued liabilities 405,546 328,927 Subscriber prepayments and deposits 141,108 127,553 Short-term debt -- 205,145 Notes payable, related party 102,728 102,728 Current portion of long-term debt 310,804 3,366,235 Other current liabilities 82,149 16,448 Total current liabilities not subject to compromise 1,267,875 4,339,450 Subject to compromise: Accounts payable and accrued liabilities 14,445 271,250 Short-term debt 5,099 -- Current portion of long-term debt 317,372 2,812,988 Total current liabilities subject to compromise 336,916 3,084,238 Long-term liabilities Not subject to compromise: Long-term debt 3,615,902 472,671 Net negative investment in deconsolidated subsidiaries -- 644,471 Deferred taxes 124,232 107,596 Other long-term liabilities 259,493 165,896 Total long-term liabilities not subject to compromise 3,999,627 1,390,634 Guarantees, commitments and contingencies Minority interests in subsidiaries 22,761 1,402,146 Stockholders' equity (deficit) Preferred stock, $0.01 par value, 10,000,000 shares authorized, nil shares issued and outstanding -- -- Class A common stock, $0.01 par value, 1,000,000,000 shares authorized, 287,350,970 and 110,392,692 shares issued, respectively 2,873 1,104 Class B common stock, $0.01 par value, 1,000,000,000 shares authorized, 8,870,332 shares issued 89 89 Class C common stock, $0.01 par value, 400,000,000 shares authorized, 303,123,542 shares issued and outstanding 3,031 3,031 Additional paid-in capital 5,852,896 3,683,644 Deferred compensation -- (28,473) Treasury stock, at cost (70,495) (34,162) Accumulated deficit (3,372,737) (6,797,762) Accumulated other comprehensive income (loss) (943,165) (1,112,345) Total stockholders' equity (deficit) 1,472,492 (4,284,874) Total liabilities and stockholders' equity (deficit) $7,099,671 $5,931,594 UnitedGlobalCom, Inc. Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands, except per share data) Year Ended December 31, 2003 2002 2001 Statements of Operations Revenue $1,891,530 $1,515,021 $1,561,894 Operating expense (768,838) (772,398) (1,062,394) Selling, general and administrative expense (493,810) (446,249) (690,743) Depreciation and amortization - Operating expense (808,663) (730,001) (1,147,176) Impairment of long-lived assets - Operating expense (402,239) (436,153) (1,320,942) Restructuring charges and other - Operating expense (35,970) (1,274) (204,127) Stock-based compensation - Selling, general and administrative expense (38,024) (28,228) (8,818) Operating income (loss) (656,014) (899,282) (2,872,306) Interest income, including related party income of $985, $2,722 and $35,336, respectively 13,054 38,315 104,696 Interest expense, including related party expense of $8,218, $24,805 and $58,834, respectively (327,132) (680,101) (1,070,830) Foreign currency exchange gain (loss), net 121,612 739,794 (148,192) Gain on extinguishment of debt 2,183,997 2,208,782 3,447 Gain (loss) on sale of investments in affiliates, net 279,442 117,262 (416,803) Provision for loss on investments -- (27,083) (342,419) Other (expense) income, net (14,884) (93,749) 76,907 Income (loss) before income taxes and other items 1,600,075 1,403,938 (4,665,500) Reorganization expense, net (32,009) (75,243) -- Income tax (expense) benefit, net (50,344) (201,182) 40,661 Minority interests in subsidiaries, net 183,182 (67,103) 496,515 Share in results of affiliates, net 294,464 (72,142) (386,441) Income (loss) before cumulative effect of change in accounting principle 1,995,368 988,268 (4,514,765) Cumulative effect of change in accounting principle -- (1,344,722) 20,056 Net income (loss) $1,995,368 $(356,454) $(4,494,709) Earnings per share: Basic net income (loss) per share before cumulative effect of change in accounting principle $7.41 $2.29 $(41.47) Cumulative effect of change in accounting principle -- (3.13) 0.18 Basic net income (loss) per share $7.41 $(0.84) $(41.29) Diluted net income (loss) per share before cumulative effect of change in accounting principle $7.41 $2.29 $(41.47) Cumulative effect of change in accounting principle -- (3.12) 0.18 Diluted net income (loss) per share $7.41 $(0.83) $(41.29) UnitedGlobalCom, Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2003 2002 2001 Cash Flows from Operating Activities Net income (loss) $1,995,368 $(356,454) $(4,494,709) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Stock-based compensation 38,024 28,228 8,818 Depreciation and amortization 808,663 730,001 1,147,176 Impairment of long-lived assets 402,239 437,427 1,525,069 Accretion of interest on senior notes and amortization of deferred financing costs 50,733 234,247 492,387 Unrealized foreign exchange (gains) losses, net (84,258) (745,169) 125,722 Loss on derivative securities 12,508 115,458 -- Gain on extinguishment of debt (2,183,997)(2,208,782) 3,447 (Gain) loss on sale of investments in affiliates and other assets, net (279,442) (117,262) 416,803 Provision for loss on investments -- 27,083 342,419 Reorganization expenses, net 32,009 75,243 -- Deferred tax provision (18,161) 104,068 (43,167) Minority interests in subsidiaries, net (183,182) 67,103 (496,515) Share in results of affiliates, net (294,464) 72,142 386,441 Cumulative effect of change in accounting principle -- 1,344,722 (20,056) Cash in assets and Liabilities: Change in receivables, net 49,238 42,175 68,137 Change in other assets (8,368) 4,628 2,489 Change in accounts payable, accrued liabilities and other 55,182 (148,466) (135,604) Net cash flows from operating activities 392,092 (293,608) (671,143) Cash Flowsfrom Investing Activities Purchase of short-term liquid investments (1,000) (117,221) (1,691,751) Proceeds from sale of short-term liquid investments 45,561 152,405 1,907,171 Restricted cash released (deposited), net 24,825 40,357 (74,996) Investments in affiliates and other investments (20,931) (2,590) (60,654) Proceeds from sale of investments in affiliated companies 45,447 -- 120,416 New acquisitions, net of cash acquired (2,150) (22,617) (39,950) Capital expenditures (333,124) (335,192) (996,411) Purchase of interest rate caps (9,750) -- -- Settlement of interest rate caps (58,038) -- -- Other 7,806 27,595 (45,192) Net cash flows from investing activities (301,354) (257,263) (881,367) Cash Flows from Financing Activities Issuance of common stock 1,354 200,006 24,054 Proceeds from notes payable to shareholder -- 102,728 -- Proceeds from short-term and long-term borrowings 23,161 42,742 1,673,981 Retirement of existing senior notes - (231,630) (261,309) Financing costs (2,233) (18,293) (17,771) Repayments of short-term and long-term borrowings (233,506) (90,331) (766,950) Other -- -- (6,571) Net cash flows from financing activities (211,224) 5,222 645,434 Effects of Exchange Rates on Cash 20,662 35,694 (49,612) Decrease in Cash and Cash Equivalents (99,824) (509,955) (956,688) Cash and Cash Equivalents, Beginning of Period 410,185 920,140 1,876,828 Cash and Cash Equivalents, End of Period $310,361 $410,185 $920,140 Summary of Operating Data as of December 31, 2003 Two-way Homes in Homes Homes Customer Service Area(1) Passed(2) Passed(3) Relationships(4) Europe: The Netherlands 2,651,300 2,603,000 2,372,500 2,403,000 Austria 1,081,400 923,300 920,100 567,300 France 2,656,600 1,384,600 695,000 500,100 Norway 529,000 484,400 221,700 340,600 Sweden 770,000 421,600 271,300 281,700 Belgium 530,000 154,200 154,200 144,200 Total Western Europe 8,218,300 5,971,100 4,634,800 4,236,900 Poland 1,875,300 1,875,300 400,900 988,900 Hungary 1,170,400 986,100 600,600 851,600 Czech Republic913,000 720,900 287,500 386,400 Romania 659,600 458,400 -- 333,300 Slovak Republic 517,800 399,800 80,200 296,300 Total Central and Eastern Europe 5,136,100 4,440,500 1,369,200 2,856,500 Total Europe 13,354,400 10,411,600 6,004,000 7,093,400 Latin America: Chile 2,350,000 1,752,100 1,030,700 596,100 Brazil 650,000 463,000 463,000 16,200 Peru 140,000 66,800 30,300 13,600 Uruguay -- -- 8,000 500 Total Latin America 3,140,000 2,281,900 1,532,000 626,400 Grand Total 16,494,400 12,693,500 7,536,000 7,719,800 Video Analog Cable DTH Digital Cable Subscribers(5) Subscribers(6) Subscribers(7) Europe: The Netherlands 2,313,200 -- 50,400 Austria 497,300 -- 24,700 France 467,100 -- 6,500 Norway 340,600 -- 33,300 Sweden 281,700 -- 24,300 Belgium 131,800 -- -- Total Western Europe 4,031,700 -- 139,200 Poland 988,900 -- -- Hungary 708,200 103,000 -- Czech Republic 299,900 76,700 -- Romania 333,300 -- -- Slovak Republic 283,800 12,100 -- Total Central and Eastern Europe 2,614,100 191,800 -- Total Europe 6,645,800 191,800 139,200 Latin America: Chile 488,000 5,500 -- Brazil 9,000 -- 6,500 Peru 12,300 -- -- Uruguay -- -- -- Total Latin America 509,300 5,500 6,500 Grand Total 7,155,100 197,300 145,700 Internet Homes Serviceable(8) Subscribers(9) Europe: The Netherlands 2,372,500 324,300 Austria 920,100 205,800 France 695,000 26,200 Norway 221,700 37,000 Sweden 271,300 68,600 Belgium 154,200 27,400 Total Western Europe. 4,634,800 689,300 Poland 400,900 32,600 Hungary 568,400 41,300 Czech Republic 287,500 25,400 Romania -- -- Slovak Republic 76,100 2,500 Total Central and Eastern Europe 1,332,900 101,800 Total Europe 5,967,700 791,100 Latin America: Chile 1,030,700 129,200 Brazil 463,000 700 Peru 30,300 2,700 Uruguay 8,000 500 Total Latin America 1,532,000 133,100 Grand Total 7,499,700 924,200 Telephone Homes Total Serviceable(10) Subscribers(11) RGUs(12) Europe: The Netherlands 1,605,900 158,600 2,846,500 Austria 899,700 153,900 881,700 France 695,000 58,400 558,200 Norway 141,700 23,600 434,500 Sweden -- -- 374,600 Belgium -- -- 159,200 Total Western Europe 3,342,300 394,500 5,254,700 Poland -- -- 1,021,500 Hungary 87,200 64,800 917,300 Czech Republic 17,700 2,400 404,400 Romania -- -- 333,300 Slovak Republic -- -- 298,400 Total Central and Eastern Europe 104,900 67,200 2,974,900 Total Europe 3,447,200 461,700 8,229,600 Latin America: Chile 1,020,600 271,300 894,000 Brazil -- -- 16,200 Peru -- -- 15,000 Uruguay -- -- 500 Total Latin America 1,020,600 271,300 925,700 Grand Total 4,467,800 733,000 9,155,300 (1) "Homes in Service Area" are homes in our franchise areas that can potentially be served, based on census data and other market information. (2) "Homes Passed" are homes that can be connected to our broadband network without further extending the distribution plant. (3) "Two-way Homes Passed" are homes passed by our network where customers can request and receive the installation of a two-way addressable set-top computer, cable modem, transceiver and/or voice port which, in most cases, allows for the provision of video, telephone and Internet services. (4) "Customer Relationships" are the number of customers who receive at least one level of service (video/telephone/Internet) without regard to which service(s) they subscribe. (5) "Analog Cable Subscriber" is comprised of basic analog customers and lifeline customers that are counted on a per connection basis. Commercial contracts such as hotels and hospitals are counted on an equivalent bulk unit ("EBU") basis. EBU is calculated by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-bulk residential customers in that market for the comparable tier of service. (6) "DTH Subscriber" is a home or commercial unit that receives our video programming broadcast directly to the home via geosynchronous satellites. (7) "Digital Cable Subscriber" is a home or commercial unit connected to our distribution network with one or more digital converter boxes that receives our digital video service. A Digital Cable Subscriber is also counted as an Analog Cable Subscriber. (8) "Internet Homes Serviceable" are homes that can be connected to our broadband network where customers can request and receive Internet access services. (9) "Internet Subscriber" is a home or commercial unit with one or more cable modems connected to our broadband network, where a customer has requested and is receiving high-speed Internet access services. (10) "Telephone Homes Serviceable" are homes that can be connected to our broadband network (or twisted pair network in Hungary), where customers can request and receive voice services. (11) "Telephone Subscriber" is a home or commercial unit connected to our broadband network (or twisted pair network in Hungary), where a customer has requested and is receiving voice services. (12) "Revenue Generating Unit" ("RGU") is separately an Analog Cable Subscriber, DTH Subscriber, Digital Cable Subscriber, Internet Subscriber or Telephone Subscriber. A home may contain one or more RGUs. For example, if a residential customer in our Austrian system subscribed to our analog cable service, digital cable service, telephone service and high-speed Internet access service, the customer would constitute four RGUs. "Total RGUs" is the sum of Analog, DTH, Digital Cable, Internet and Telephone Subscribers. DATASOURCE: UnitedGlobalCom, Inc. CONTACT: Richard S.L. Abbott, Investor Relations - Denver, +1-303-220-6682, or , or Bert Holtkamp, Corporate Communications - Europe, +31 (0)20-778-9447, or , both of UnitedGlobalCom, Inc. Web site: http://www.unitedglobal.com/

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