<PAGE>
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, 1996
----------------------------------------------------------
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________________ to ______________________
Commission File Number: 333-05017
UIH Australia/Pacific, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1341958
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4643 South Ulster St. #1300 Denver, CO 80237
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 770-4001
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report.)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[_] Yes [X] No
The number of shares outstanding of the registrant's common stock as of August
26, 1996 was:
Common Stock --500 shares
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
PART I - FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
ITEM 1 - FINANCIAL STATEMENTS
- ------
Condensed Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 (Unaudited).................................. 2
Condensed Consolidated Statements of Operations For the Three and Six Months
Ended June 30, 1996 and 1995 (Unaudited)......................................... 3
Condensed Consolidated Statement of Parent's Equity
For the Six Months Ended June 30, 1996 (Unaudited)............................... 4
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995 (Unaudited)...................... 5
Notes to Condensed Consolidated Financial Statements (Unaudited).................. 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- ------
AND RESULTS OF OPERATIONS................................................................. 14
PART II - OTHER INFORMATION
---------------------------
ITEM 1 - LEGAL PROCEEDINGS.................................................................. 18
- ------
ITEM 5 - OTHER INFORMATION.................................................................. 18
- ------
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K................................................... 19
- ------
</TABLE>
1
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AFTER CORPORATE REORGANIZATION - SEE NOTE 1)
(STATED IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
--------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents......................................................................... $ 83,243 $ 8,730
Restricted cash................................................................................... 10,000 --
Short-term investments............................................................................ 70,627 --
Receivables, including related party receivables of $2,478 and $1,623, respectively............... 3,737 2,045
Investments in and advances to affiliated companies, accounted for under the
equity method................................................................................... 9,133 2,829
Property, plant and equipment, net of accumulated depreciation of $7,041 and
$1,217, respectively........................................................................... 68,185 27,125
License fees, net of accumulated amortization of $1,284 and $442, respectively..................... 11,862 10,693
Goodwill, net of accumulated amortization of $1,594 and $38, respectively......................... 43,916 45,324
Other assets, net................................................................................. 16,180 2,549
-------- --------
Total assets.......................................................................................... $316,883 $ 99,295
======== ========
LIABILITIES AND PARENT'S EQUITY
Accounts payable, accrued liabilities and other................................................... $ 14,584 $ 6,407
Accrued funding obligation........................................................................ 133 1,834
Due to parent..................................................................................... 5,080 12,583
Senior notes and other debt....................................................................... 231,739 890
-------- --------
Total liabilities..................................................................................... 251,536 21,714
-------- --------
Minority interest in subsidiaries..................................................................... 1,033 2,515
-------- --------
Commitments (Note 5)
Parent's Equity:
Common Stock $.01 par value, 1,000 shares authorized, 100 issued.................................... -- --
Contributed capital................................................................................. 104,489 93,782
Cumulative translation adjustments.................................................................. 2,135 191
Accumulated deficit................................................................................. (42,310) (18,907)
-------- --------
Total Parent's equity................................................................................. 64,314 75,066
-------- --------
Total liabilities and Parent's equity................................................................. $316,883 $ 99,295
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
2
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AFTER CORPORATE REORGANIZATION - SEE NOTE 1)
(STATED IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ------------------------
1996 1995 1996 1995
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Service revenue.................................................. $ 3,936 $ 457 $ 5,870 $ 553
Operating expense, including $80, none, $165 and
none, respectively, of related party expenses.................. (7,492) (1,224) (12,575) (1,415)
General and administrative expense............................... (2,877) (1,254) (5,213) (1,643)
Depreciation and amortization.................................... (5,501) (253) (8,249) (338)
-------- ------- -------- -------
Net operating loss.......................................... (11,934) (2,274) (20,167) (2,843)
Equity in losses of affiliated companies, net.................... (1,535) (3,780) (2,568) (5,274)
Interest expense................................................. (4,208) -- (4,208) --
Interest income.................................................. 1,260 -- 1,317 --
Other............................................................ 799 (2) 618 (4)
-------- ------- -------- -------
Net loss before minority interest........................... (15,618) (6,056) (25,008) (8,121)
Minority interest in subsidiaries................................ 879 186 1,605 239
-------- ------- -------- -------
Net loss.................................................... $(14,739) $(5,870) $(23,403) $(7,882)
======== ======= ======== =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
3
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
CONDENSED CONSOLIDATED STATEMENT OF PARENT'S EQUITY
(AFTER CORPORATE REORGANIZATION - SEE NOTE 1)
(STATED IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
CUMULATIVE
COMMON STOCK CONTRIBUTED TRANSLATION ACCUMULATED
SHARES AMOUNT CAPITAL ADJUSTMENT DEFICIT TOTAL
------ ------- ------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1995.............. 100 $ -- $93,782 $ 191 $(18,907) $ 75,066
Capital contributions from parent........ -- -- 10,707 -- -- 10,707
Cumulative translation adjustment........ -- -- -- 1,944 -- 1,944
Net loss................................. -- -- -- -- (23,403) (23,403)
--- ---- -------- ------ -------- --------
Balances, June 30, 1996.................. 100 $ -- $104,489 $2,135 $(42,310) $ 64,314
=== ==== ======== ====== ======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
4
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AFTER CORPORATE REORGANIZATION - SEE NOTE 1)
(STATED IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
--------------------------
1996 1995
------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss..................................................................................... $ (23,403) $ (7,882)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization.............................................................. 8,249 338
Equity in losses of affiliated companies, net.............................................. 2,568 5,274
Minority interest share of losses.......................................................... (1,605) (239)
Accretion of interest on senior notes...................................................... 4,064 --
Increase in receivables.................................................................... (1,388) (280)
(Increase) decrease in other assets........................................................ (5,946) 706
Increase in accounts payable, accrued liabilities,
including related party and other...................................................... 9,540 1,111
--------- --------
Net cash flows from operating activities..................................................... (7,921) (972)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investments........................................................... (70,627) --
Restricted cash.............................................................................. (10,000) --
Investments in and advances to affiliated companies and other investments.................... (10,450) (21,247)
Increase in goodwill......................................................................... (218) --
Acquisition, transaction and development costs incurred...................................... -- (781)
Purchase of property, plant and equipment................................................... (43,610) (5,986)
--------- --------
Net cash flows from investing activities..................................................... (134,905) (28,014)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions from parent............................................................ 10,707 23,715
Proceeds from offering of senior notes....................................................... 225,115 --
Deferred debt offering costs................................................................. (9,411) --
Borrowing on bridge loan payable to parent................................................... 15,073 5,400
Payment of bridge loan payable to parent..................................................... (25,000) --
--------- --------
Net cash flows from financing activities..................................................... 216,484 29,115
--------- --------
EFFECT OF EXCHANGE RATES ON CASH............................................................. 855 157
--------- --------
INCREASE IN CASH AND CASH EQUIVALENTS........................................................ 74,513 286
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................................... 8,730 --
--------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD..................................................... $ 83,243 $ 286
========= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
5
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 1996
(MONETARY AMOUNTS STATED IN THOUSANDS)
(UNAUDITED)
1. ORGANIZATION AND BACKGROUND
UIH Australia/Pacific, Inc. (the "Company"), a wholly-owned subsidiary of
UIH Asia/Pacific, Inc. as of June 30, 1996, which is a wholly-owned subsidiary
of United International Holdings, Inc. ("UIHI"), was formed on October 14, 1994.
The Company completed an offering (the "Offering") of 14% Senior Discount Notes
(the "Notes") due 2006, on May 14, 1996. The Notes were issued at a discount to
their aggregate principal amount of $443,000 and generated gross proceeds to the
Company of approximately $225,115.
In connection with the Offering, UIHI merged into the Company UIHI's
subsidiaries that held interests in operating properties and early stage
projects in Australia and the South Pacific. The accompanying financial
statements have been prepared on a basis of reorganization accounting as though
the Company had performed all foreign development activities and made all
acquisitions of UIHI's foreign multi-channel television, programming and mobile
data interests in Australia, Tahiti and New Zealand since inception. The Company
commenced operations in January 1994 when UIHI began its development related
activities in the Australia/Pacific region. The Company reflected all of the
transfers from UIHI as a capital contribution from parent in the accompanying
consolidated financial statements. The accompanying consolidated financial
statements have been prepared as though the Company made investments in the
following entities on the original date UIHI or certain of its wholly-owned
subsidiaries made the investment:
. The Company acquired, through directly and indirectly held interests,
an effective 50.0% economic interest in two companies that form CEtv in
1994. In December 1995, the Company increased its effective economic
interest in CEtv to 90%. In May 1996, the Company increased its
effective economic interest in CEtv to 94% and has agreed, subject to
certain conditions, to acquire the remaining 6%. The companies that
comprise CEtv (CTV Pty Ltd. ("CTV") and STV Pty Ltd ("STV")) have
acquired Multi-point Microwave Distribution Systems ("MMDS") licenses
to supply subscription television services to television households in
the north, northeastern and southern regions of Australia outside of
the country's largest cities and are currently constructing multi-
channel television systems to service many of the television homes in
their license areas. Those homes that cannot be served by MMDS will be
serviceable by a direct to home ("DTH") satellite service marketed by
CEtv.
. The Company acquired an effective 90% economic interest in Telefenua
S.A. ("Telefenua") in January 1995. The Company's economic interest
will decrease to 75% and 64% once the Company has received a 20% and
40% internal rate of return on its investment in Telefenua,
respectively. Telefenua operates, since March 1995, the only multi-
channel subscription television system on the islands of Tahiti and
Moorea in French Polynesia.
. In July 1994, the Company acquired a 50% interest in Saturn
Communications Limited ("Saturn"). Saturn is constructing a wireline
multi-channel television system in New Zealand, primarily in the
greater Wellington area. In July 1996, the Company acquired the
remaining 50% interest in Saturn in exchange for 2.6% of its common
stock.
. XYZ Entertainment Pty Ltd ("XYZ Entertainment") is an Australian
proprietary company incorporated in New South Wales. Century United
Programming Ventures Pty Limited, an Australian corporation ("CUPV"),
owned equally by the Company and Century Communications Corp.
("Century"), holds a 50% interest in XYZ Entertainment. In October
1994, the Company acquired an initial 50% interest in XYZ
Entertainment. In September 1995, a third party purchased a 50%
interest in XYZ Entertainment, thereby diluting the Company's indirect
interest in XYZ Entertainment to 25%.
6
<PAGE>
UIH AUSTRALLA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
. In August 1995, the Company acquired a 100% interest in United Wireless
Pty Limited ("United Wireless"), a provider of wireless mobile data
services in Australia, serving primarily Sydney and Melbourne, and is
in the initial stages of deploying its distribution network and
marketing its services.
The Company has no operating activities of its own. The Company, prior to
the Offering discussed above, had been funded by capital contributions and loans
from UIHI which enabled it to make its investments in the entities described
above.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The preparation of financial statements in conformity with generally
accepted accounting principles 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 consolidated financial statements include the accounts of
the Company and all subsidiaries where it exercises majority control. During the
year ended December 31, 1995, the Company consolidated Telefenua, and subsequent
to August 31, 1995, United Wireless. Due to the Company's acquisition of the
majority economic interest in CEtv in late December 1995, the accompanying
December 31, 1995 condensed consolidated balance sheet includes the accounts of
CTV and STV as of December 31, 1995. The Company recognized equity losses from
its investments in CTV and STV through December 31, 1995. The Company began
consolidating the operations of CTV and STV January 1, 1996. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Exchange rates used are as of June 30, 1996, unless otherwise noted.
In management's opinion, the unaudited financial statements as of June 30, 1996
and for the three and six months ended June 30, 1996 and 1995 include all
adjustments necessary for a fair presentation. Such adjustments were of a
normal recurring nature.
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Cash and cash equivalents include cash and investments with original
maturities of less than three months. The short-term investments which are
classified as held to maturity in accordance with the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115") are stated at amortized cost.
INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANIES, ACCOUNTED FOR UNDER THE
EQUITY METHOD
The Company accounts for its investments under the equity method of
accounting. Under this method, the investment, originally recorded at cost, is
adjusted to recognize the Company's share of net earnings or losses of the
affiliates, limited to the extent of the Company's investment in and advances to
the affiliates, including any debt guarantees or other contractual funding
commitments. The Company's share of net earnings or losses of affiliates
includes the amortization of basis differences related to the excess of cost
over net tangible assets acquired. Investments in and advances to affiliated
companies are as follows:
7
<PAGE>
UIH AUSTRALLA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
AS OF
JUNE 30, 1996
-------------------------------------------------------------------------
INVESTMENTS IN CUMULATIVE EQUITY CUMULATIVE
AND ADVANCES TO IN LOSSES OF TRANSLATION
AFFILIATED COMPANIES AFFILIATED COMPANIES ADJUSTMENTS TOTAL
--------------------- --------------------- ----------- ------
<S> <C> <C> <C> <C>
Saturn.......................... $ 11,629 $ (2,733) $237 $9,133
XYZ Entertainment............... 13,356(1) (13,466) 110 --
--------- -------- ---- ------
$ 24,985 $(16,199) $347 $9,133
========= ======== ==== ======
</TABLE>
(1) Includes $4,132 of proceeds received from the sale of 50% of the Company's
interest. As the Company had recorded equity in losses from XYZ
Entertainment in an amount equal to its invested capital, the Company
recognized a gain of $4,132 on this transaction. In addition, the Company
accrued a funding obligation of $133 as of June 30, 1996.
<TABLE>
<CAPTION>
AS OF
JUNE 30, 1996
-------------------------------------------------------------------------
INVESTMENTS IN CUMULATIVE EQUITY CUMULATIVE
AND ADVANCES TO IN LOSSES OF TRANSLATION
AFFILIATED COMPANIES AFFILIATED COMPANIES(1) ADJUSTMENTS TOTAL
--------------------- --------------------- ----------- ------
<S> <C> <C> <C> <C>
Saturn.......................... $ 4,520 $ (1,803) $112 $2,829
XYZ Entertainment............... 11,718(2) (11,828) 110 --
---------- -------- ---- ------
$ 16,238 $(13,631) $222 $2,829
========== ======== ==== ======
</TABLE>
(1) Does not include cumulative equity losses from CEtv of $3,763, as CEtv's
balance sheet is consolidated at December 31, 1995.
(2) Includes $4,132 of proceeds received from the sale of 50% of the Company's
interest. As the Company had recorded equity in losses from XYZ
Entertainment in an amount equal to its invested capital, the Company
recognized a gain of $4,132 on this transaction. In addition, the Company
accrued a funding obligation of $1,834 as of December 31, 1995.
The Company recognized $1,638 and $11,729 of equity losses from XYZ
Entertainment for the six months ended June 30, 1996 and the year ended December
31, 1995, respectively, including $133 and $1,834 of additional equity losses
associated with the Company's accrued funding obligation to XYZ Entertainment as
of June 30, 1996 and December 31, 1995, respectively. The Company does not have
a contractual funding obligation to XYZ Entertainment, however, the Company
would face significant and punitive dilution if it did not make the scheduled
fundings.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Additions, replacements
and major improvements are capitalized and costs for normal repair and
maintenance of property, plant and equipment are charged to expense as incurred.
Depreciation expense is computed using the straight-line method over the
estimated useful lives as shown below.
<TABLE>
<CAPTION>
Average Years
-------------
<S> <C>
Cable plant......................... 5-10
Other fixed assets.................. 3-5
Furniture and fixtures.............. 10
Leasehold improvements.............. 6-10
</TABLE>
LEASED ASSETS
Assets acquired under capital leases are included in property, plant and
equipment. The initial amount of the leased asset and corresponding lease
liability are recorded at the present value of future minimum lease payments.
Leased assets are amortized over the life of the relevant lease.
8
<PAGE>
UIH AUSTRALLA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
LICENSE FEES
The acquisition of MMDS licenses has been recorded at cost. The cost to
acquire these licenses, $8,890, acquired for a 5-year period for Australia, will
be amortized over the initial license period. They are renewable every 5 years.
In Tahiti, the license rights, totaling $2,225, are amortized over a 10-year
period.
GOODWILL
The Company's acquisition of an additional 40% economic interest in CTV and
STV was recorded as a step acquisition. The majority of the purchase price of
$45,081 was recorded as goodwill as the underlying net book value of all
identifiable tangible and intangible assets approximated their respective fair
values at that date. Accordingly, goodwill of $44,790 was recorded and is being
amortized over 15 years beginning January 1, 1996.
RECOVERABLE AMOUNTS OF TANGIBLE AND INTANGIBLE ASSETS
The carrying amount of all tangible and intangible assets are reviewed at
least annually to determine whether they exceed their recoverable amount. Such
amounts are deemed recoverable so long as projected undiscounted net cash flows
from each asset exceeds the carrying amounts. If not, a provision is made to
reduce the carrying amount to equal the discounted projected cash flows (or fair
value).
REVENUE RECOGNITION
Monthly service and installation fees are recognized as revenue in the
period the related services are provided to the subscribers.
INCOME TAXES
The Company is included as a member of UIHI's consolidated tax return and
will remain a member of the UIHI consolidated group (as long as non-UIHI
ownership of the Company does not exceed 20%). UIHI and the Company are parties
to a tax sharing agreement that defines the parties' rights and obligations with
respect to tax liabilities and benefits relating to the Company and its
operations as part of the consolidated group of UIHI. In general, UIHI is
responsible for filing consolidated tax returns and paying the associated taxes
and the Company will reimburse UIHI for the portion of the tax cost relating to
the Company and its operations.
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109") which requires recognition of deferred tax assets and liabilities for the
expected future income tax consequences of transactions which have been included
in the financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
Net deferred tax assets are then reduced by a valuation allowance for amounts
which do not satisfy the realization criteria of SFAS 109.
FOREIGN OPERATIONS
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 the exchange rate in effect at yearend
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 result in unrealized gains or losses
referred to as translation adjustments. Cumulative translation adjustments are
recorded as a separate component of parent's equity.
9
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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.
In accordance with Statement of Financial Accounting Standards No. 95,
"Statement of Cash Flows," cash flows from the Company's operations in foreign
countries are translated based on average exchange rates for the period while
balance sheet amounts are translated at period end exchange rates. As a result,
amounts related to assets and liabilities reported on the Consolidated
Statements of Cash Flows will not agree to changes in the corresponding balances
on the Consolidated Balance Sheets. The effects of exchange rate changes on
cash balances held in foreign currencies is reported as a separate line below
cash flows from financing activities.
NEW ACCOUNTING PRINCIPLES
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123") which is required to be adopted by affected companies for fiscal years
beginning after December 15, 1995. However, the Company does not have any
stock-based compensation plans.
3. INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANIES, ACCOUNTED FOR UNDER THE
EQUITY METHOD
Investments in and advances to affiliated companies accounted for under the
equity method amount to $9,133 and $2,829 as of June 30, 1996 and December 31,
1995, respectively. (See Note 2 for detail.)
Condensed financial information for the Company's significant equity
investees is presented below.
CTV
Condensed consolidated income statement data for CTV, stated in U.S.
dollars, and which is derived from unaudited interim financial statements, is as
follows (CTV is consolidated for balance sheet purposes at December 31, 1995 and
effective January 1, 1996 for income statement purposes):
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1995
------------------------
CONDENSED CONSOLIDATED INCOME STATEMENT DATA
<S> <C>
Operating, selling, general and administrative expenses........................ $(1,106)
Depreciation and amortization.................................................. (31)
-------
Net operating loss........................................................... (1,137)
Interest, net.................................................................. 713
Other.......................................................................... 248
-------
Net loss..................................................................... $ (176)
=======
</TABLE>
10
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
STV
Condensed consolidated income statement data for STV, stated in U.S.
dollars, and which is derived from unaudited interim financial statements, is as
follows (STV is consolidated for balance sheet purposes at December 31, 1995 and
effective January 1, 1996 for income statement purposes):
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30, 1995
--------------------------
CONDENSED CONSOLIDATED INCOME STATEMENT DATA
<S> <C>
Operating, selling, general and administrative expenses.......... $(913)
Depreciation and amortization.................................... (30)
-----
Net operating loss............................................. (943)
Interest, net.................................................... 271
-----
Net loss....................................................... $(672)
=====
</TABLE>
XYZ ENTERTAINMENT
Condensed consolidated income statement data for XYZ Entertainment stated
in U.S. dollars, and which is derived from unaudited interim financial
statements, is as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
--------------------------
CONDENSED CONSOLIDATED INCOME STATEMENT DATA 1996 1995(1)
---- -------
<S> <C> <C>
Revenue................................................................... $ 3,190 $ 74
Operating, selling, general and administrative expenses................... (9,224) (6,622)
Depreciation and amortization............................................. (1,259) (1,010)
------- -------
Net operating loss...................................................... (7,293) (7,558)
Other..................................................................... 966 46
------- -------
Net loss................................................................ $(6,327) $(7,512)
======= =======
</TABLE>
(1) XYZ Entertainment was formed during late 1994.
SATURN
Condensed consolidated income statement data for Saturn, stated in U.S.
dollars which is derived from unaudited interim financial statements, is as
follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
--------------------------
CONDENSED CONSOLIDATED INCOME STATEMENT DATA 1996 1995
---- ----
<S> <C> <C>
Revenue................................................................... $ 104 $ 51
Operating, selling, general and administrative expenses................... (1,696) (822)
Depreciation and amortization............................................. (186) (204)
------- ----
Net operating loss...................................................... (1,778) (975)
Other..................................................................... 53 (2)
------- -------
Net loss................................................................ $(1,725) $(977)
======= =======
</TABLE>
11
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. SENIOR NOTES AND OTHER DEBT
The senior notes and other debt consist of the following as of June 30,
1996 and December 31, 1995:
<TABLE>
<CAPTION>
AS OF AS OF
JUNE 30, DECEMBER 31,
1996 1995
------- ------------
<S> <C> <C>
The Notes......................................... $229,142 $ --
Capitalized lease obligation...................... 2,597 890
-------- -----
$231,739 $ 890
======== =====
</TABLE>
The $229,142 of 14% senior notes were issued in May 1996 at a discount from
their principal amount of $443,000 and accrete interest at a rate of 14%
compounded semi-annually. Cash interest will not be paid prior to May 15, 2001.
Thereafter, cash interest will be payable semi-annually on each May 15 and
November 15, commencing November 15, 2001.
5. COMMITMENTS
On July 24, 1994 and October 12, 1995, CTV and STV, respectively, entered
into a franchise agreement with Australis Media Limited ("Australis"). The
franchise provides for CTV and STV to have access to Australis programming in
their franchise areas and be the sole Australis franchisee in their regions on
all medium, being MMDS, satellite and cable. CEtv acquires the majority of its
programming from Australis. Although there are a limited number of programmers
from which CEtv could acquire programming, if the programmer is not able to
provide the programming to CEtv, CEtv could experience a loss of subscribers,
resulting in a loss of revenue, which would adversely affect the operating
results of CEtv.
Under the agreement, certain minimum payments are due based on a proportion
of subscriber revenue. The future commitments are dependent upon the number of
subscribers.
A wholly-owned subsidiary of the Company guaranteed $10,000 of obligations
of Australis. This guarantee is secured by a cash deposit of $10,000. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
6. RELATED PARTY
In connection with the reorganization discussed in Note 1, the Company and
UIHI executed a 10-year management services agreement (the "UIHI Management
Agreement"), pursuant to which UIHI will continue to perform certain
administrative, accounting, financial reporting and other services for the
Company, which has no separate employees of its own. For the six months ended
June 30, 1996 and 1995, UIHI allocated approximately $375 and $459 to the
Company for such services. Pursuant to the UIHI Management Agreement, UIHI will
be paid a management fee of $750 for the first year of such agreement, which
fees shall increase on the first anniversary date of the UIHI Management
Agreement and each anniversary date thereafter by 8% per year. In addition, the
Company shall reimburse UIHI for any out-of-pocket expenses incurred by UIHI in
performance of its duties under the UIHI Management Agreement, including travel,
lodging and entertainment expenses.
UIHI has executed technical assistance agreements with CTV and STV pursuant
to which it will provide various management and technical services. Under the
agreements, UIHI receives a management fee equal to 5% of CTV and STV's total
revenue for the first two years, 4% for the next six years, 3% for the following
two years and 2% thereafter. In addition, UIHI is reimbursed for all direct
costs associated with services it provides for CEtv. CEtv's managing director,
chief operating officer and marketing director are employees of UIHI that have
been seconded to CEtv and UIHI has also appointed five other management
personnel which are seconded to CEtv and five of six directors.
12
<PAGE>
UIH AUSTRALIA/PACIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
UIHI and Telefenua have executed a technical services agreement whereby
UIHI has agreed to provide technical, administrative and operational assistance
to Telefenua encompassing the following areas: (i) engineering, design,
construction, and equipment purchasing, (ii) marketing, pricing and packaging of
services, (iii) selection of programming and negotiations with suppliers, and
(iv) accounting, billing and subscriber management systems. UIHI receives a
management fee equal to 5% of Telefenua's gross revenue through 1996, 3% of
gross revenue for the following 12 months, and 2% thereafter.
Saturn and UIHI have executed a technical services agreement pursuant to
which UIHI provides technical, administrative and operational assistance to
Saturn encompassing the following areas: (i) engineering, design, construction,
and equipment purchasing, (ii) marketing, pricing and packaging of services,
(iii) selection of programming and negotiations with suppliers and (iv)
accounting, billing and subscriber management systems. UIHI receives a
management fee equal to 5% of Saturn's gross revenue through July 1999. UIHI is
also reimbursed for all direct and indirect costs associated with these
services. The managing director, construction manager and vice president of
engineering are employees of UIHI that have been seconded to Saturn pursuant to
the terms of the technical services agreement.
Included in the amount due to parent as of June 30, 1996 are the following:
<TABLE>
<S> <C>
Payable to UIHI for management fee and invoices paid by UIHI on the Company's behalf........ $1,573
CEtv technical assistance agreements......................................................... 1,878
Telefenua technical assistance agreement..................................................... 1,570
United Wireless payable to UIHI.............................................................. 59
------
$5,080
======
</TABLE>
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(MONETARY AMOUNTS STATED IN THOUSDANDS)
The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the Company's
condensed consolidated financial statements and related notes thereto included
elsewhere herein. Such condensed consolidated financial statements provide
additional information regarding the Company's financial activities and
condition.
The Company conducts no operations other than through its operating
companies in which it holds varying interests. Because the operating companies
have, since inception, been engaged primarily in organizational and start-up
activities, the Company believes that its historical results of operations
discussed herein are not indicative of the results of operations which will
follow the completion of construction and initial marketing of service by the
operating companies.
The Company has no employees of its own. UIHI, the Company's parent,
provides various management, financial reporting, accounting, and other services
for the Company pursuant to the terms of the UIHI Management Agreement between
UIHI and the Company. CEtv, Saturn and Telefenua are also parties to technical
service agreements with UIHI for which such operating companies pay to UIHI fees
based, in part, on their respective gross revenues. (See Note 6 of the
condensed consolidated financial statements.)
Impact of CEtv Transaction. In December 1995, the Company acquired an
additional 40% economic interest in CEtv, increasing its total effective
economic interest in both companies to approximately 90% (the "CEtv
Transaction"). As a result of the CEtv Transaction, on January 1, 1996, the
Company began consolidating the results of operations of CEtv. Through December
31, 1995, the Company accounted for its interest in CEtv on the equity method.
In May 1996, the Company increased its effective economic interest in CEtv to
94% and has agreed to acquire the remaining 6%, subject to certain conditions.
By consolidating the financial results of CEtv, the Company will recognize the
full amount of CEtv's losses or income. As CEtv is in the early stages of
operations and construction of its multi-channel television systems, CEtv will
continue to incur losses for the foreseeable future.
LIQUIDITY AND CAPITAL RESOURCES
The Company has generated negative cash flow from operating activities for
all periods presented as a result of start-up costs associated with CEtv,
Telefenua, Saturn, XYZ Entertainment and United Wireless (the "Operating
Companies") constructing and marketing their multi-channel television and
telecommunications services and establishing the organizational infrastructure
required for the operation of their businesses. The Company is responsible for
its proportionate share of the capital requirements of the Operating Companies
and prior to completion of the Offering funded its share with capital
contributed by UIHI.
In May 1996, the Company raised total gross proceeds of $225,115 from the
private offering (the "Offering") of $443,000 aggregate principal amount of the
14% Senior Discount Notes due 2006 (the "Notes"). The proceeds will be
primarily used to fund system construction and initial marketing costs and
working capital requirements of the Operating Companies as discussed in the
table on the following page.
From commencement of operations to May 1996, the Company was financed by
capital contributed by UIHI. During the six months ended June 30, 1995 UIHI
contributed $23,715 to the Company and made bridge loans of $5,400 to CEtv,
$15,187 of which was used to finance the Company's investments in CEtv, XYZ
Entertainment and Saturn. Approximately $781 was used for costs incurred in the
acquisition and development of its projects, the majority of which was for
Telefenua. The Company used $6,060 million in cash to fund the operations of
Telefenua. Approximately $5,986 was used for the purchase of property, plant
and equipment by Telefenua as it is in the process of building its MMDS system.
The remainder was used in operations.
14
<PAGE>
During the six months ended June 30, 1996, UIHI contributed capital of
$10,707 to the Company and made bridge loans of $15,073 to CEtv and Telefenua.
In addition, as noted above, the Company raised $225,115 gross proceeds from the
Offering. The bridge loans were used to fund the construction and initial
marketing of CEtv's and Telefenua's systems. The Company also made $10,450 in
capital contributions to Saturn and XYZ Entertainment during the six months
ended June 30, 1996 using the capital contributed to it by UIHI. Approximately
$45,249 was used for the purchase of property, plant and equipment by CEtv and
Telefenua as these systems are in the process of building their MMDS and DTH
systems. The Company purchased $70,627 of short-term investments in connection
with its cash management activities. The remainder was used in operations.
In May 1996, the Company acquired $25,000 of the CEtv bridge loans and
repaid UIHI with proceeds from the Offering. Approximately $5,000 of bridge
loans were converted into convertible debentures of Telefenua prior to closing
of the Offering. In May 1996, the remaining CEtv bridge loans were converted to
equity of CEtv. The remaining Telefenua bridge loans acquired by the Company
will be either (i) repaid by Telefenua after which time the Company would invest
the proceeds of such repayment as permitted under its indenture or (ii)
converted by the Company into capital of Telefenua.
The following table summarizes the Company's remaining projected funding
requirements for its projects based on its ownership interest as of June 30,
1996 and assuming its acquisition of the remaining interests in CEtv and Saturn.
To the extent that the other shareholders of CEtv, Telefenua or XYZ
Entertainment fail to fund their pro rata share of the additional shareholder
capital for such Operating Companies, the Company may fund all or a portion of
such shortfall, in which case the shareholder's ownership interest would be
diluted proportionately. The Company has monthly capital commitments to XYZ
Entertainment that total approximately $5,217 through December 31, 1996. To the
extent the Company fails to make any capital contribution to XYZ Entertainment,
it would face significant and punitive dilution.
<TABLE>
<CAPTION>
PROJECTED FUNDING
------------------------------------------------------------------
TOTAL EXPECTED PORTION FUNDED AS OF REMAINING AS OF
LOCATION TYPE OF PROJECT FUNDINGS JUNE 30, 1996 JUNE 30, 1996
- -------- --------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Australia (CEtv) MMDS/DTH systems $343,067 $ 70,436(1) $272,631
New Zealand Cable system 83,254 11,590 71,664
Tahiti MMDS system 17,373 15,120 2,253
Australia (XYZ) Programming 14,328 9,111 5,217
United Wireless Mobile data services 8,201 2,286 5,915
-------- -------- --------
$466,223 $108,543 $357,680
======== ======== ========
</TABLE>
(1) Does not include the $50,700 paid by the Company to other shareholders of
CEtv to increase its ownership interest.
The Company believes that it will be required to fund a total of
approximately $357,680 to build-out its existing projects over the next four
years. To the extent the operating companies fund their construction and other
costs through project financing, the Company's portion of estimated additional
funding would be reduced proportionately. To fund this amount, in addition to
the cash on hand, the Company intends to raise additional capital through the
sale of its equity securities and/or further issuances of debt either by the
Company or the Operating Companies. The Company's indenture and UIHI's
indentures place restrictions on the Company and certain of its subsidiaries
with respect to incurring additional debt.
The Company used $10,000 of the net proceeds in May 1996 of the Offering to
fund the acquisition of UIH AML from UIHI. UIH AML was formed by UIHI to make
or procure guarantees of $10,000 in borrowings by Australis under an Australis
bank facility (the "Australis Bank Facility"). UIHI contributed $10,000 in cash
to UIH AML, which cash is restricted for as long as UIH AML is guaranteeing
borrowings under the Australis Bank Facility. Such restricted cash would be
released at such time that UIH AML is released from its obligation under the
Australis Guarantee unless the cash was used to refinance a portion of the
Australis Bank Facility; however, the Company and the other guarantors (the
"Guarantors") would be responsible for funding its pro rata share of the
repayment shortfall up to its total guarantee, which in the case of UIH AML is
$10,000. In connection with the guarantee, UIH AML received warrants to
purchase approximately 4.2 million ordinary shares or convertible notes of
Australis at an exercise price of A$0.20 per share. To the extent amounts are
paid pursuant to the guarantees, each Guarantor may elect to have its pro rata
portion of such amounts converted, at the rate of A$0.545 per note or share,
into ordinary shares or convertible notes of Australis. In addition, at any
time during the term of such
15
<PAGE>
guarantees, any Guarantor may elect to refinance a portion of the Australis Bank
Facility by converting all or a portion of the amount of its guarantee into
ordinary shares or convertible notes on the same terms. UIH AML has agreed,
subject to certain conditions, to acquire $4,000 of ordinary shares or
convertible notes of Australis by converting a portion of the Australis
Guarantee or exercising the Australis Warrants. Australis, in late August,
announced that it concluded a joint venture agreement with OptusVision for the
sharing of DTH Satellite infrastructure and has put in place equity commitments
of $105,000 and additional short-term funding of A$18,000. A key benefit of the
OptusVision joint venture for Australis will be substantially reduced funding
requirements over the first 5 years of operations. The joint venture
arrangements are subject to Australis receiving the consent of existing U.S.
Noteholders and to completion of a recapitalization plan of not less than
$250,000 including equity commitments and a new U.S. offering. The arrangements
are also subject to clearance by the Australian Competition and Consumer
Commission, who have already been contacted by the parties. This is expected to
be completed by October 1996. Australis has announced that its ability to
continue as a going concern is dependent on the success of the equity offering.
RESULTS OF OPERATIONS
The Company has experienced losses since its inception. The Operating
Companies are in the early stages of construction and marketing their multi-
channel television systems and programming services. The Company does not
currently anticipate that such Operating Companies will generate net income
during the foreseeable future as they are completing construction of their
respective multi-channel television and telecommunications systems and
programming services.
Service Revenue. The Company's service revenue, as compared to the
corresponding prior year amounts, increased $3,479 (761%) and $5,317 (961%)
during the three and six months ended June 30, 1996 and 1995, respectively. The
increase is primarily due to CEtv ($3,059 and $4,127 for the three and six month
periods, respectively), which launched service in August 1995 and Telefenua
($324 and $1,190 for the three and six month periods, respectively) which
launched service in March 1995.
Operating Expense. The Company's operating expense, as compared to the
corresponding prior year amounts, increased $6,268 (512%) and $11,160 (789%)
during the three and six months ended June 30, 1996 and 1995, respectively. The
increase is due to (i) the consolidation of CEtv ($6,619 and $10,842 for the
three and six month periods, respectively) effective January 1, 1996 which
launched service in August 1995, and (ii) the acquisition of United Wireless
($372 and $660 for the three and six month periods, respectively) in September
1995, at which time the Company began consolidating its results. This increase
was offset by an increase and decrease in Telefenua ($230 and $342 for the three
and six month periods, respectively) which launched service in March 1995.
General and Administrative Expense. The Company's general and
administrative expense for the three and six months ended June 30, 1996
increased $1,623 (129%) and $3,570 (217%), respectively, as compared to the
corresponding prior year amounts primarily due to (i) the consolidation of CEtv
($1,967 and $3,261 for the three and six month periods, respectively) effective
January 1, 1996 which launched service in August 1995, (ii) the consolidation of
Telefenua ($522 and $84 for the three and six month periods, respectively) which
launched service in March 1995 and (iii) the acquisition of United Wireless ($8
and $151 for the three and six month periods, respectively) in September 1995,
at which time the Company began consolidating its results.
Depreciation and Amortization. The Company's depreciation and amortization
increased $5,248 (2,074%), and $7,911 (2,341%) during the three and six months
ended June 30, 1996 and 1995, respectively, due primarily to the acquisition of
CEtv and the launch of its system in August 1995 and due to Telefenua launching
its system in March 1995.
16
<PAGE>
Equity in Losses of Affiliated Companies, Net. The Company recognized
equity in losses of affiliated companies as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30,
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
CEtv(1)........................................... $ -- $ 61
Saturn(2)......................................... 529 273
XYZ Entertainment(3).............................. 1,006 3,446
------ ------
Total equity in losses of affiliated
companies, net.................................. $1,535 $3,780
====== ======
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
----------------------------
1996 1995
--------- ---------
<S> <C> <C>
CEtv(1)........................................... $ -- $ 351
Saturn(2)......................................... 930 534
XYZ Entertainment(3).............................. 1,638 4,389
------ ------
Total equity in losses of affiliated
companies, net.................................. $2,568 $5,274
====== ======
</TABLE>
(1) The Companies that comprise CEtv were incorporated in mid-1994. The Company
acquired an initial interest in these companies in the fall of 1994 and
increased its economic interest in these companies to 90% in late December
1995. CEtv launched its first MMDS system in August 1995.
(2) The Company acquired a 50% interest in Saturn in July 1994. In 1995, Saturn
initiated engineering and design work and started system construction and,
accordingly, incurred greater losses in 1996 as compared to 1995.
(3) XYZ Entertainment was formed in October 1994 and began distributing its
four channels in April 1995.
Interest Expense. Interest expense increased due to the sale of the Notes
in May 1996 discussed in Note 1 to the condensed consolidated financial
statements. The Notes accrete interest at a rate of 14% compounded semi-
annually.
Interest Income. Interest income increased due to the cash received from
the Company's issuance of the Notes in May 1996 discussed above.
17
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The company does not believe that, if resolved adversely to the Company,
any action to which it is a party or is otherwise described herein would have a
material adverse effect on its financial condition or results of operations and,
other than as described herein, the Company is not a party to any other material
legal proceedings, nor is it currently aware of any other threatened material
legal proceedings. From time to time, the Company may become involved in
litigation relating to claims arising out of its operations in the normal course
of its business.
The territorial government of Tahiti has legally challenged the Decree and
authority of the CSA to award Telefenua the authorizations to operate an MMDS
system in French Polynesia. The French Polynesian's challenge to France's
authority to award Telefeuna an MMDS license in Tahiti was upheld by the Conseil
d'Etat, the supreme administrative court of France. The territorial government
of Tahiti has brought an action in French court seeking cancellation of the MMDS
licenses awarded by the CSA to Telefenua, although no such cancellation has yet
taken place. A law recently enacted by the French Parliament gives Telefenua a
statutory basis for seeking a new authorization from the communications agency,
should the existing authorization be nullified. The Company believes that if
the existing authorization is nullified and Telefenua is unable to obtain a new
authorization, Telefenua may petition for restitution for the taking of such
authorization. If Telefenua does not obtain a new authorization, however, there
is no assurance that Telefenua will receive any restitution. In addition, any
available restitution could be limited and could take years to obtain.
ITEM 5 - OTHER INFORMATION
SUMMARY OPERATING DATA
The following table sets forth certain unaudited financial and operating
data of the operating Companies.
<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
------------------------------------------------------------------------------------
TELEVISION
HOMES IN ECONOMIC
SERVICE HOMES OWNERSHIP
OPERATING SYSTEM AREA PASSED SUBSCRIBERS PENETRATION INTEREST
- ---------------- ---- ------ ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
CEtv
MMDS(1)............. 800,000 471,000 19,076 4.1% 94.0%(2)
DTH................. 700,000 700,000 10,206 1.5% --
Saturn............... 141,000 6,000 1,125 18.8% 100.0%
Telefenua............ 31,000 17,458 4,361 25.0% 90.0%
XYZ Entertainment.... N/A(3) N/A 207,666(4) N/A 25.0%
--------- --------- -------
Total............. 1,672,000 1,194,458 242,434
========= ========= =======
</TABLE>
(1) CEtv intends to construct MMDS systems in markets containing approximately
800,000 television homes. Homes in these markets which are out of the line-
of-sight of the MMDS signals will be offered the DTH service which CEtv is
marketing on an exclusive basis.
(2) The Company has agreed, subject to certain conditions, to acquire the
remaining 6% in CEtv.
(3) The Company expects that XYZ Entertainment's programming package will be
marketed to virtually all of Australia's 6.0 million television households
by Australian multi-channel television providers, including CEtv,
Australis, Foxtel Management Pty Limited and East Coast Television Pty
Limited.
(4) Total estimated subscribers to the eight channel Galaxy package to which
XYZ Entertainment supplies four channels.
18
<PAGE>
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.
Date of Report Item Reported Financial Statements Filed
-------------- ------------- --------------------------
None
19
<PAGE>
SIGNATURES
- ----------
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 26, 1996
-------------------------------
By: /S/ Bernard G. Dvorak
--------------------------
Bernard G. Dvorak
Chief Financial Officer
(A Duly Authorized Officer and Principal Financial Officer)
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM * UIH
AUSTRALIA PACIFIC INC.'S FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 82,243
<SECURITIES> 0
<RECEIVABLES> 1,259
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<FN>(1)
<PP&E> 75,226
<DEPRECIATION> 7,041
<TOTAL-ASSETS> 316,883<FN>(2)
<CURRENT-LIABILITIES> 0<FN>(1)
<BONDS> 231,739
0
0
<COMMON> 0
<OTHER-SE> 62,179
<TOTAL-LIABILITY-AND-EQUITY> 316,883
<SALES> 0
<TOTAL-REVENUES> 5,870
<CGS> 0
<TOTAL-COSTS> 12,575
<OTHER-EXPENSES> 8,249
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,208
<INCOME-PRETAX> (23,403)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,403)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,403)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>(1) THE COMPANY DOES NOT HAVE A CLASSIFIED BALANCE SHEET. SEE THE CONDENSED
CONSOLIDATED BALANCE SHEET FOR MORE INFORMATION.
<FN>(2) SEE THE CONDENSED CONSOLIDATED BALANCE SHEET FOR THE DETAIL OF TOTAL
ASSETS.
</TABLE>
