<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 August 31, 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: 0-21974
United International Holdings, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1116217
- --------------------------------------------------------------------------------
(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.
[X] Yes [_] No
The number of shares outstanding of the registrant's common stock as of
October 11, 1996 was:
Class A Common Stock -- 25,774,253 shares
Class B Common Stock -- 13,256,469 shares
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
PART I - FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Item 1 - Financial Statements
- ------
Condensed Consolidated Balance Sheets as of
August 31, 1996 and February 29, 1996 (Unaudited)..................................................... 2
Condensed Consolidated Statements of Operations For the Three and Six Months Ended
August 31, 1996 and 1995 (Unaudited).................................................................. 3
Condensed Consolidated Statement of Stockholders' Equity
For the Six Months Ended August 31, 1996 (Unaudited).................................................. 4
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended August 31, 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............................................................................. 11
<CAPTION>
PART II - OTHER INFORMATION
---------------------------
<S> <C>
Item 5 - Other Information...................................................................................... 18
- ------
Item 6 - Exhibits and Reports on Form 8-K....................................................................... 24
- ------
</TABLE>
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
August 31, February 29,
1996 1996
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................................................... $ 150,606 $ 112,218
Restricted cash and short-term investments.................................................. 10,000 14,073
Short-term investments...................................................................... 137,791 35,692
Management fee receivables.................................................................. 774 498
Costs to be reimbursed by affiliated companies, net......................................... 5,832 7,972
Notes receivable............................................................................ 40,081 7,581
Property, plant and equipment, net of accumulated depreciation of $8,205 and $2,097,
respectively.............................................................................. 81,292 31,102
Acquisition, transaction and development costs, net......................................... 6,808 4,541
Investments in and advances to affiliated companies, accounted for
under the equity method, net.............................................................. 279,941 272,205
Other investments in affiliated companies, including marketable equity securities........... 2,663 3,273
Goodwill, net............................................................................... 48,082 45,629
Other assets, net........................................................................... 55,654 45,422
--------- ---------
Total assets................................................................................ $ 819,524 $ 580,206
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities.................................................... $ 18,310 $ 11,068
Accrued funding obligations................................................................. 2,242 2,163
Senior secured notes and other debt......................................................... 621,817 371,251
--------- ---------
Total liabilities........................................................................... 642,369 384,482
--------- ---------
Minority interest in subsidiaries........................................................... 1,132 2,509
--------- ---------
Warrants to purchase Class A Common Stock................................................... -- 11,167
--------- ---------
Preferred stock, $.01 par value, 3,000,000 shares authorized, 170,513 shares of Convertible
Preferred Stock, Series A issued and outstanding, stated at liquidation value............. 30,676 30,072
--------- ---------
Commitments (Note 4)
Stockholders' Equity:
Class A Common Stock, $.01 par value, 60,000,000 shares authorized,
25,768,398 and 25,732,154 issued and outstanding, respectively............................ 258 257
Class B Common Stock, $.01 par value, 30,000,000 shares authorized,
13,256,469 and 13,274,685 issued and outstanding, respectively............................ 132 133
Additional paid-in capital.................................................................. 335,042 325,716
Deferred compensation....................................................................... (1,107) (842)
Unrealized loss on investment............................................................... (1,799) (1,189)
Cumulative translation adjustments.......................................................... (12,603) (7,371)
Accumulated deficit......................................................................... (174,576) (164,728)
--------- ---------
Total stockholders' equity.................................................................. 145,347 151,976
--------- ---------
Total liabilities and stockholders' equity.................................................. $ 819,524 $ 580,206
========= =========
</TABLE>
The accompanying notes are an integral part of
these condensed consolidated balance sheets.
2
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three For the Six
Months Ended Months Ended
August 31, August 31,
------------------------ -----------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Management fee income from related parties.......................... $ 313 $ 29 $ 630 $ 63
Service revenue..................................................... 4,255 456 6,427 1,032
Operating expense................................................... (7,761) (1,224) (12,870) (2,494)
General and administrative expense.................................. (7,612) (6,634) (13,956) (12,070)
Depreciation and amortization....................................... (5,734) (375) (8,631) (1,468)
-------- -------- -------- --------
Net operating loss................................................ (16,539) (7,748) (28,400) (14,937)
Equity in losses of affiliated companies, net....................... (9,539) (9,098) (21,741) (13,310)
Interest income..................................................... 3,594 1,664 5,715 4,897
Interest (expense) income related parties, net...................... (407) 179 (119) 258
Other interest expense.............................................. (18,177) (8,027) (31,894) (15,595)
Provision for losses on investment related costs.................... (472) (439) (824) (816)
Gain on sale of investment in affiliated company.................... 65,260 -- 65,260 --
Other............................................................... 725 291 404 332
-------- -------- -------- --------
Net income (loss) before minority interest........................ 24,445 (23,178) (11,599) (39,171)
Minority interest in subsidiaries................................... 1,025 -- 1,751 713
-------- -------- -------- --------
Net income (loss)................................................. $ 25,470 $(23,178) $ (9,848) $(38,458)
======== ======== ======== ========
Net income (loss) per common share.................................. $ 0.65 $ (0.72) $ (0.25) $ (1.22)
======== ======== ======== ========
Weighted average number of common shares outstanding................ 39,022,756 32,297,792 39,015,668 31,446,716
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of
these condensed consolidated statements.
3
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Class A Class B
Common Stock Common Stock Additional
---------------------- -------------------- Paid-In
Shares Amount Shares Amount Capital
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Balances, February 29, 1996............................ 25,732,154 $257 13,274,685 $133 $325,716
Issuance of Class A Common Stock in
connection with Company's 401 (k) Plan............... 11,153 -- -- -- 163
Issuance of Class A Common Stock in connection
with Company's Stock Option Plan..................... 6,875 -- -- -- 65
Amortization of deferred compensation.................. -- -- -- -- --
Exchange of Class B Common Stock for
Class A Common Stock................................. 18,216 1 (18,216) (1) --
Accretion of dividends on convertible
preferred stock...................................... -- -- -- -- (604)
Expiration of warrants not tendered to the
Company.............................................. -- -- -- -- 9,011
Repricing of stock options............................. -- -- -- -- 691
Unrealized loss on investment.......................... -- -- -- -- --
Cumulative translation adjustments..................... -- -- -- -- --
Net loss............................................... -- -- -- -- --
---------- --- ---------- --- --------
Balances, August 31, 1996.............................. 25,768,398 $258 13,256,469 $132 $335,042
========== === ========== === ========
<CAPTION>
Unrealized Cumulative
Deferred Loss Translation Accumulated
Compensation on Investment Adjustments Deficit Total
------------ ------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balances, February 29, 1996............................ $ ( 842) $(1,189) $ (7,371) $(164,728) $151,976
Issuance of Class A Common Stock in
connection with Company's 401 (k) Plan............... -- -- -- -- 163
Issuance of Class A Common Stock in connection
with Company's Stock Option Plan..................... -- -- -- -- 65
Amortization of deferred compensation.................. 426 -- -- -- 426
Exchange of Class B Common Stock for
Class A Common Stock................................. -- -- -- -- --
Accretion of dividends on convertible
preferred stock...................................... -- -- -- -- (604)
Expiration of warrants not tendered to the
Company.............................................. -- -- -- -- 9,011
Repricing of stock options............................. (691) -- -- -- --
Unrealized loss on investment.......................... -- (610) -- -- (610)
Cumulative translation adjustments..................... -- -- (5,232) -- (5,232)
Net loss............................................... -- -- -- (9,848) (9,848)
------- ------- -------- --------- --------
Balances, August 31, 1996.............................. $(1,107) $(1,799) $(12,603) $(174,576) $145,347
======= ======= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of
these condensed consolidated statements.
4
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
August 31,
----------------------------------
1996 1995
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities
Net loss................................................................................ $ (9,848) $ (38,458)
Adjustments to reconcile net loss to net cash flows from operating activities:
Equity in losses of affiliated companies, net.......................................... 21,723 13,447
Gain on sale of investment in affiliated company....................................... (65,260) --
Minority interest share of losses...................................................... (1,751) (713)
Depreciation and amortization.......................................................... 8,631 1,468
Amortization of deferred compensation.................................................. 426 378
Accretion of interest on senior secured notes.......................................... 31,356 15,348
Issuance of common stock in connection with Company's 401(k) Plan...................... 163 122
Acceleration of vesting of stock options............................................... -- 650
Provision for losses on investment related costs....................................... 824 816
Increase in management fee receivables................................................. (301) (98)
Increase in other assets............................................................... (8,839) (825)
Increase (decrease) in accounts payable, accrued liabilities and other................. 5,572 (3,243)
--------- ---------
Net cash flows from operating activities............................................... (17,304) (11,108)
--------- ---------
Cash flows from investing activities
Purchase of short-term investments...................................................... (179,639) (63,261)
Proceeds from sale of short-term investments............................................ 77,540 134,271
Restricted cash and short-term investments released..................................... 4,073 71,780
Investments in and advances to affiliated companies and other investments............... (53,663) (138,459)
Increase in notes receivable............................................................ (36,764) (6,568)
Reimbursement of note receivable........................................................ 4,264 --
Reimbursement of advance to related party............................................... 307 100
Proceeds from sale of affiliated company................................................ 84,098 1,190
Decrease (increase) in costs to be reimbursed by affiliated companies, net.............. 3,005 (8,975)
Acquisition, transaction and development costs incurred................................. (2,822) (3,265)
Purchase of property, plant and equipment............................................... (54,289) (5,816)
--------- ---------
Net cash flows from investing activities................................................ (153,890) (19,003)
--------- ---------
Cash flows from financing activities
Issuance of common stock in connection with Company's Stock Option Plan................. 65 134
Proceeds from offering of senior notes.................................................. 225,115 --
Deferred debt offering costs............................................................ (9,515) (1)
Payment of warrants tendered to the Company............................................. (2,156) --
Borrowing of other debt................................................................. 8,902 9,820
Repayment of other debt................................................................. (13,684) (1,000)
--------- ---------
Net cash flows from financing activities................................................ 208,727 8,953
--------- ---------
Effect of exchange rates on cash......................................................... 855 734
--------- ---------
Increase (decrease) in cash and cash equivalents......................................... 38,388 (20,424)
Cash and cash equivalents, beginning of period........................................... 112,218 30,717
--------- ---------
Cash and cash equivalents, end of period................................................. $ 150,606 $ 10,293
========= =========
Supplemental cash flow disclosures:
Cash paid for interest................................................................... $ 553 $ 492
========= =========
Cash received for interest............................................................... $ 5,357 $ 6,421
========= =========
</TABLE>
The accompanying notes are an integral part of
these condensed consolidated statements.
5
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AUGUST 31, 1996
(Monetary amounts stated in thousands)
(Unaudited)
1. Organization and Basis of Presentation
United International Holdings, Inc. (the "Company" or "UIHI") was formed as
a Delaware corporation in 1989, for the purpose of developing, acquiring and
managing multi-channel television operations and related businesses. The
following chart presents a summary of the Company's significant investments
in multi-channel television, programming distribution and telephony
operations as of August 31, 1996.
<TABLE>
<CAPTION>
---------------------- ----------------------
Philips Media B.V. United International
Holdings, Inc.
---------------------- ----------------------
50% 50% 100%
---------------------------- -------------------------
United and Philips United International
Communications B.V. ("UPC") Properties, Inc.
---------------------------- -------------------------
- ---------------------------------------- --------------------------------------
Europe UIH Latin America, Inc.
- ------ -----------------------
<S> <C> <C> <C>
Interests Held Directly
Radio Public (Belgium) 100.0% Cablevision S.A. (Chile)(6) 100.0%
Kabel Net (Czech Rep.) 100.0 STX (Chile)(6) 100.0
KTE (Eindhoven, the Netherlands) 100.0 Cable Star (Peru) 94.0
Marne la Vallee (France) 100.0 Megapo (Mexico) 49.0
Telekable Group (Austria) 95.0 Jundiai TV (Brazil) 46.3
Transvatel SRO (Slovak Republic) 75.0 TV Show Brasil
A2000 (Amsterdam, the Netherlands) 50.0 (Fortaleza, Brazil) 40.0
Citecable (France) 30.0 --------------------------------------
RKS Hamburg (Germany) 29.0
Santander (Spain) 25.0 --------------------------------------
Portugal 100.0 Other
Romania 51.0-90.0 -----
Interests Held Through UII ITN 76.9%
Melita Cable (Malta) 42.5 Monor Communications (Hungary) 48.4
Tevel (Israel) 23.3 Iberian Programming Services 33.8
PHL (Ireland) 20.0 Teleport (St. Petersburg) 30.0
--------------------------------------
Interests Held Through UCI (1)
Norkabel (Norway) 8.3 --------------------------------------
Kabelkom (Hungary) 3.9 UIH Asia/Pacific, Inc.
Swedish Cable (Sweden) 2.2 ----------------------
- --------------------------------------- HITV (China) 49.0%
SCS (Philippines)(5) 40.0
97.4%
UIH Australia/Pacific, Inc. ("UIH AP")
--------------------------------------
Saturn (New Zealand)(2) 100.0%
United Wireless (Australia) 100.0
Austar (Australia)(3) 94.0
Telefenua(Tahiti)(4) 90.0
XYZ (Australia) 25.0
--------------------------------------
</TABLE>
(1) UPC recently acquired 100% of UCI and now owns 100 of Norkabel, 47% of
Kabelkom and 26% of Swedish Cable.
(2) In July 1996, UIH AP increased its ownership interest in Saturn to 100%. In
exchange for acquiring the additional 50% interest, the Company gave
Saturn's other shareholder a 2.6% interest in UIH AP.
(3) UIH AP holds an effective 94% economic interest in CTV and STV, the two
companies that form Austar, formerly known as CEtv. UIH AP held an effective
50% economic interest in Austar until December 1995 when it increased its
effective economic ownership interest to 90% and May 31, 1996 when it
increased its effective economic ownership interest to 94%. UIH AP has
agreed to acquire the remaining 6% interest in Austar subject to certain
conditions.
(4) UIH AP owns an effective 90% economic interest in the Tahiti project. UIH
AP's economic interest will decrease to 75% and 64% once UIH AP has received
a 20% and 40% internal rate of return on its investment in Tahiti,
respectively.
(5) The Company currently holds a convertible loan, which upon full conversion
would provide the Company with a 40% ownership interest in the Philippines
operating company.
(6) In September 1996, the Company formed a joint venture with VTK S.A., a
Chilean conglomerate, to which each party contributed their respective
Chilean multi-channel assets. The Company owns 34% of the joint venture. See
Note 5.
6
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
In August 1996, the Company sold its interest in Net Sao Paulo for $78,098
and recognized a gain of $65,260. The purchase price was satisfied with a
cash payment of $43,098 and a note receivable of $35,000. The note
receivable bears interest at a rate of 12% per annum, is due in August 1997,
and is guaranteed by the Company's former partner in Net Sao Paulo.
The accompanying interim condensed consolidated financial statements are
unaudited and include the accounts of the Company and all majority-owned
subsidiaries except Cablevision S.A. and Red de Television y Servicios por
Cable S.A. ("STX") due to a joint venture in Chile which, in September 1996,
reduced the Company's interest in Cablevision S.A. and STX below 50% (see
Note 5). All affiliated companies are accounted for on a calendar year
basis, versus the Company which has a fiscal yearend of February 28
(February 29 in leap years). The Company records its share of equity in
income (losses) of affiliated companies or consolidates the affiliated
companies based on the affiliated companies' calendar yearend results.
Exchange rates used are as of August 31, 1996, unless otherwise noted. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
In the opinion of management, all adjustments (of a normal recurring nature)
have been made which are necessary to present fairly the financial position
of the Company as of August 31, 1996, and the results of its operations for
the three and six months ended August 31, 1996 and 1995. For a more complete
understanding of the Company's financial position and results of operations,
reference is made to the consolidated financial statements of the Company
included in the Company's annual report on Form 10-K for the year ended
February 29, 1996.
2. Summary of Significant Accounting Policies
Costs to be Reimbursed by Affiliated Companies
The Company incurs costs on behalf of affiliated companies, such as
expatriate salaries and benefits, travel and professional services. These
costs are reimbursed by the affiliated companies.
Investments in and Advances to Affiliated Companies, Accounted for Under the
Equity Method
All affiliated companies are accounted for on a calendar year basis, versus
the Company which has a fiscal yearend of February 28 (February 29 in leap
years). The Company records its share of equity in income (losses) of
affiliated companies based on the affiliated companies' calendar yearend
results. Investments in and advances to affiliated companies are as follows:
<TABLE>
<CAPTION>
As of
August 31, 1996
----------------------------------------------------------------------------------
Investments in Cumulative Equity Cumulative
and Advances to in Income (Losses) of Translation Valuation
Affiliated Companies Affiliated Companies(1) Adjustments Allowance Total
-------------------- ----------------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C>
Europe
- ------
UPC........................... $150,446 $(26,727) $ (9,573) $ -- $114,146
Monor Communications.......... 27,182 (6,785) (3,319) -- 17,078
Latin America
- -------------
STX........................... 52,716 735 (855) -- 52,596
Cablevision S.A. ............. 33,583 (2,651) (671) -- 30,261
TV Show Brasil................ 6,070 (2,359) -- -- 3,711
Megapo........................ 32,497 (283) (1,180) -- 31,034
Asia/Pacific
- ------------
Saturn........................ 11,629 (2,733) 237 -- 9,133
XYZ........................... 13,356 (13,466) 110 -- --
SCS........................... 8,637 (234) 177 -- 8,580
Other
- -----
Teleport...................... 3,039 (1,051) -- (1,988) --
Other......................... 16,830 (3,428) -- -- 13,402
------- ------- ------- ------ -------
$355,985 $(58,982) $(15,074) $(1,988) $279,941
======= ======= ======= ====== =======
</TABLE>
(1) Does not include cumulative equity in losses of $9,979 of Net Sao Paulo as
the Company sold its investment in August 1996 realizing a gain of
$65,260. Also, does not include cumulative equity in losses of $1,641 of
ITN as ITN is now consolidated.
7
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
As of
February 29, 1996
--------------------------------------------------------------------------------
Investments in Cumulative Equity Cumulative
and Advances to in Income (Losses) of Translation Valuation
Affiliated Companies Affiliated Companies Adjustments Allowance Total
-------------------- -------------------- ----------- --------- -----
<S> <C> <C> <C> <C> <C>
Europe
- ------
UPC.......................... $150,442 $(15,559) $(3,758) $ -- $131,125
Monor Communications......... 24,632 (5,573) (2,654) -- 16,405
Latin America
- -------------
STX.......................... 29,423 205 (671) -- 28,957
Cablevision S.A.............. 30,939 (1,037) (125) -- 29,777
Net Sao Paulo................ 16,054 (8,290) -- -- 7,764
TV Show Brasil............... 6,118 (1,582) -- -- 4,536
Megapo....................... 32,491 (48) (1,257) -- 31,186
Asia/Pacific
- ------------
Saturn....................... 6,014 (1,802) 112 -- 4,324
XYZ.......................... 11,718 (11,737) 111 -- 92
SCS.......................... 6,346 (148) 183 -- 6,381
Other
- -----
Teleport..................... 2,961 (1,051) -- (1,910) --
ITN.......................... 3,862 (1,032) -- -- 2,830
Other........................ 10,008 (1,180) -- -- 8,828
------- ------- ------ ------- -------
$331,008 $(48,834) $(8,059) $(1,910) $272,205
======= ======= ====== ======= =======
</TABLE>
Foreign Operations
The functional currency for the Company's foreign operations is the
applicable local currency for each affiliate company, except for countries
which have experienced hyper-inflationary economies. For countries which
have hyper-inflationary economies, the financial statements are presented in
United States dollars. Assets and liabilities of foreign subsidiaries are
translated at the exchange rates in effect at period end and the statements
of operations are translated at the average exchange rates during the period.
Exchange rate fluctuations on translating foreign currency financial
statements into U.S. dollars result in unrealized gains or losses referred to
as translation adjustments. Cumulative translation adjustments are recorded
as a separate component of stockholders' equity.
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 Condensed Consolidated Statements of Cash Flows will not agree to changes
in the corresponding balances on the Condensed Consolidated Balance Sheets.
The effect of exchange rate changes on cash balances held in foreign
currencies is reported as a separate line below cash flows from financing
activities.
8
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
3. Debt
Debt consists of the following as of August 31, 1996 and February 29, 1996:
<TABLE>
<CAPTION>
As of As of
August 31, February 29,
1996 1996
---------- ------------
<S> <C> <C>
November 1994 14% senior secured notes, net of unamortized discount ........................... $246,244 $228,828
November 1995 14% senior secured notes, net of unamortized discount ........................... 84,263 78,745
February 1996 14% senior secured notes, net of unamortized discount ........................... 52,099 49,140
May 1996 14% UIH AP senior notes, net of unamortized discount (1) ............................. 229,142 --
Note payable to a company, interest at 1.5% above the rate published by a certain Chilean bank,
principal and interest due quarterly until June 1998, secured by shares of STX .............. 7,263 --
Note payable to a bank, interest at 7.5% ...................................................... -- 9,820
Note payable to a bank, interest at LIBOR plus 1.75% .......................................... -- 3,828
Note payable to a bank ........................................................................ 208 --
Capitalized lease obligation .................................................................. 2,598 890
-------- --------
Total senior secured notes and other debt ..................................................... $621,817 $371,251
======== ========
</TABLE>
(1) Balance is as of June 30, 1996.
The $246,244 of 14% senior secured notes were issued in November 1994 at a
discount from their principal amount of $394,000 and accrete interest at a
rate of 15.24% compounded semi-annually. No cash interest payments will be
made prior to maturity on November 15, 1999.
The $84,263 of 14% senior secured notes were issued in November 1995 at a
discount from their principal amount of $130,000 and accrete interest at a
rate of 14% compounded semi-annually. No cash interest payments will be
made prior to maturity on November 15, 1999.
The $52,099 of 14% senior secured notes were issued in February 1996 at a
discount from their principal amount of $75,350 and accrete interest at a
rate of 11.875% compounded semi-annually. No cash interest payments will be
made prior to maturity on November 15, 1999.
The $229,142 of 14% UIH AP 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. The senior notes
mature May 15, 2006.
4. Commitments
A summary of the Company's guarantees as of August 31, 1996 is as follows:
Guarantees
----------
Teleport St. Petersburg .......................... $ 2,109(1)
Monor Communications ............................. 10,000(2)
Australis Media Limited .......................... 10,000(3)
------
$22,109
======
(1) Amount represents Company guarantee of affiliate debt.
(2) The Company has entered into an arrangement with the lender to the
Monor project that calls for a commitment of up to $10,000. The
commitment can be used to pay project indebtedness of up to $5,000 for
a specified period of time and up to $5,000 to be invested directly
into the business.
9
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(3) In May 1996, a wholly-owned subsidiary of UIH AP guaranteed $10,000 of
obligations of Australis Media Limited ("Australis"), a principal
supplier of Austar's programming. In connection with the guarantee,
the wholly-owned subsidiary received warrants to purchase
approximately 4.2 million ordinary shares of Australis. This guarantee
is secured by a cash deposit of $10,000 by the wholly-owned
subsidiary. UIH AP expects this guarantee to be converted to equity
and/or repaid during the fourth quarter.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources" for projected
fundings.
5. Subsequent Event
In September 1996, the Company completed an agreement with VTR S.A.
("VTR"), a leading Chilean conglomerate with interests in
telecommunications and natural resources, under which the parties formed a
joint venture. The Company and VTR contributed their respective Chilean
multi-channel television assets to the joint venture of which the Company
owns 34%. In early 1998, the Company will have the option to increase its
interest to 50% after a revaluation of the properties subject to minimum
and maximum values.
10
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Monetary Amounts Stated in Thousands)
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.
Liquidity and Capital Resources
The Company's expenditures to date have been made in developing multi-channel
television, programming distribution and telephony operations in foreign
countries. Except for the Company's working capital requirements, the Company's
future cash needs will depend on management's acquisition and development
decisions. The Company does not expect any operating company to pay dividends in
the foreseeable future and accordingly does not expect any distributions to be
made by any affiliates.
During the six months ended August 31, 1996, the Company incurred net losses of
$9,848 of which $21,723 was from non-cash equity in losses of affiliated
companies. The Company also recorded accretion of non-cash interest expense on
the senior secured notes totaling $31,356. The Company recognized a gain on sale
of an affiliated company of $65,260 and received proceeds from the sale of
$79,098. For the six months ended August 31, 1996 the Company purchased $54,289
of property, plant and equipment, the majority of which was purchased by the
Company's majority owned subsidiaries in Australia and Tahiti as those entities
continue to construct their systems. The Company incurred $2,822 of acquisition,
transaction and development costs, primarily with respect to its Latin America
and Asia/Pacific regions. The Company's notes receivable increased by $32,500
primarily due to the note receivable of $35,000 received for the sale of Sao
Paulo. The Company invested $53,663 of cash in its affiliated companies and
other investments due to expected additional investments to the existing
systems. The Company purchased short-term investments of $179,639 and sold
short-term investments of $77,540 as part of its cash management activities. The
Company also paid $2,156 for warrants tendered to the Company. UIH AP received
proceeds from the sale of its senior notes of $225,115 and incurred offering
costs of $9,515. The Company borrowed additional debt of $8,902 and repaid two
loans totaling $13,684.
During the six months ended August 31, 1995, the Company incurred net losses of
$38,458 of which $13,447 was from non-cash equity in losses of affiliated
companies. The Company also recorded accretion of non-cash interest expense on
the senior secured notes totaling $15,348. During the six months ended August
31, 1995, the Company purchased $5,816 of property, plant and equipment, the
majority of which was purchased by the Company's majority owned subsidiaries in
Tahiti and the Czech Republic as those entities continued to construct their
MMDS systems. The Company incurred $3,265 of acquisition, transaction and
development costs, primarily with respect to its Latin America and Asia/Pacific
regions. The Company's notes receivable increased by $6,568 due to advances
under a bridge loan to the other owners of SCS to meet their funding commitments
to the project, for which the Company was repaid a portion in August 1996 and
will be repaid the remaining portion in August 1997 pursuant to the terms of the
bridge loans. The Company's restricted cash decreased $71,780 due to the release
of funds in connection with the Company's formation of UPC. The Company invested
$138,459 of cash in its affiliated companies and other investments due to
expected additional investments to the existing systems. The Company purchased
short-term investments of $63,261 and sold short-term investments of $134,271 as
part of its cash management activities. The Company's cost to be reimbursed
increased by $8,975. The Company borrowed $9,820 to fund a portion of its
acquisition in STX.
The amount currently estimated by the Company for future fundings and capital
commitments, as described in the following paragraphs, is intended to be funded
using the Company's existing cash. While the Company currently anticipates
funding the projects summarized below, there can be no assurance that the
Company's actual expenditures will equal the currently anticipated amounts. If
the Company's actual expenditures are less than the amounts indicated, the
Company intends to use such remaining cash to pursue additional development and
acquisition opportunities.
11
<PAGE>
The following table summarizes the Company's remaining projected funding
requirements for its projects other than UIH AP:
<TABLE>
<CAPTION>
Projected Fundings
---------------------------------
Portion
Funded Remaining
Total as of as of
Expected August August 31,
Location Type of Project Fundings 31, 1996 1996
- -------- --------------- -------- -------- ----------
<S> <C> <C> <C> <C>
Europe:
UPC Cable systems $171,059 $171,059 $ --
Monor Communications Telephony/cable
systems 26,580 26,580 --
Spain Programming Programming 11,613 6,527 5,086
Irish Programming Programming 10,159 1,600 8,559
------- ------- ------
219,411 205,766 13,645
------- ------- ------
UIH Latin America, Inc.:
Chile (STX) Cable system 53,407 45,305 8,102
Chile (Cablevision) Cable system 32,100 32,100 --
Mexico Cable system 32,033 32,033 --
Fortaleza, Brazil MMDS system 8,402 6,060 2,342
Jundiai, Brazil Cable system 4,733 4,001 732
Peru Cable system 6,561 2,059 4,502
Venezuela Cable system 7,812 3,182 4,630
United Family Programming 5,245 -- 5,245
Communications ------- ------- ------
150,293 124,740 25,553
------- ------- ------
UIH Asia/Pacific, Inc.:
UIH AP (1) -- 102,035 102,035 --
Hunan Province, China Microwave
transmission
network 6,265 5,980 285
Philippines Cable system 14,723 11,323 3,400
------- ------- ------
123,023 119,338 3,685
------- ------- ------
Other:
Teleport St. Petersburg Telephony 4,206 2,080 2,126
ITN, Inc. -- 5,087 5,002 85
------- ------- ------
9,293 7,082 2,211
------- ------- ------
Grand Total $502,020 $456,926 $45,094
======= ======= ======
</TABLE>
(1) Amount represents what the Company funded to UIH AP. See the table below
for UIH AP's projected fundings.
The Company may also invest additional amounts in its existing operating systems
and early stage projects or acquire interests from its partners in these
systems. For example, the Company completed an agreement with VTR S.A. in Chile
to form a joint venture to which each party contributed its respective multi-
channel television assets in Chile and of which the Company owns 34%. The
Company has an option in early 1998 to increase its ownership interest in the
new joint venture to 50% based upon a revaluation of the properties contributed.
Thus, the Company could fund additional amounts to increase its ownership
percentage (subject to maximum and minimum values) of the joint venture.
The amount currently estimated by UIH AP for future fundings and capital
commitments, as described below, has been funded using the proceeds of $225,100
from the sale of the 1996 UIH AP senior notes, of which $109,352 is
remaining as of August 31, 1996, and UIHI's fundings prior to the offering. In
addition, UIH AP intends to raise additional funds through the sale of equity
securities and/or further issuances of debt either by UIH AP, its immediate
parent corporation, or its operating companies.
The following table summarizes UIH AP's remaining projected funding requirements
for its projects (based on UIH AP's August 31, 1996 ownership interest):
<TABLE>
<CAPTION>
Projected Fundings
-----------------------------------------
Total Portion Remaining
Expected Funded as of as of
Location Type of Project Fundings August 31, 1996 August 31, 1996
- -------- --------------- --------- --------------- ---------------
<S> <C> <C> <C> <C>
UIH AP:
New Zealand Cable system $ 92,822 $ 14,757 $ 78,065
Australia (Austar)(1) MMDS/DTH
systems 355,315 108,436 246,879
Australia (XYZ) Programming 14,328 10,002 4,326
Tahiti MMDS system 17,399 15,119 2,280
United Wireless Mobile data 8,200 3,036 5,164
services ------- ------- -------
$488,064 $151,350 $336,714
======= ======= =======
</TABLE>
(1) Does not include the $50,700 paid by the Company to other shareholders of
Austar to increase its ownership interest. UIH AP has also agreed to
acquire the remaining 6% of Austar. The above projected funding assumes
100% ownership.
12
<PAGE>
The Company currently does not expect to contribute additional capital to UPC,
as UPC will finance its operating systems and development opportunities with its
operating cash flow and cash on hand, as well as possible equity and debt
financings. At this time, the Company does not know which acquisition or other
development projects UPC will pursue and is unable to estimate the amount of
funds that will be necessary for UPC to develop the projects it chooses to
pursue.
In connection with the UPC transaction, UPC issued to Philips $133,600 of UPC
PIK Notes in two tranches, both of which become due and payable on January 1,
2005. The first tranche ($53,400) becomes convertible into equity of UPC in
July 1999 and the second tranche ($80,200) becomes convertible into equity of
UPC in July 2001. The Company has the option to purchase one-half of the UPC
PIK Notes at any time they become convertible. While the Company and Philips
currently intend that the UPC PIK Notes will be redeemed by UPC prior to
conversion through an equity or debt financing at the UPC level, if the UPC PIK
Notes are not redeemed prior to conversion, the Company must either purchase
one-half of the UPC PIK Notes or face dilution of its interest in UPC.
In December 1995, the Company acquired an additional effective 40% economic
interest in both CTV and STV, increasing its total effective economic interest
in both companies to approximately 90%. In May 1996, the Company increased its
interest to 94% and UIH AP (the 97.4% owned subsidiary to which the interests in
Austar, formerly known as CEtv, were contributed) has agreed subject to certain
conditions, to acquire the remaining 6% in Austar. As a result of this
acquisition, the Company now consolidates the majority financial results of STV
and CTV, the two companies that comprise Austar. Prior to this acquisition, the
Company accounted for these companies on the equity method, reporting its
proportionate interest in STV's and CTV's losses. As STV and CTV are in the
early stages of operations and construction of their multi-channel television
systems, the Company anticipates these companies will continue to incur losses
for the next several years.
In July 1996, UIH AP increased its ownership interest in Saturn to 100%. In
exchange for acquiring the additional 50% interest, the Company gave Saturn's
other shareholder a 2.6% interest in UIH AP. The Company's share of Saturn's
losses have been recognized to date through an equity pick up. Saturn's results
will be consolidated beginning in the third quarter.
Because the Company and UIH AP do not currently have any cash flow, their
ability to repay their obligations on the senior notes at maturity will be
dependent on developing one or more sources of cash prior to the maturity of the
senior notes. The Company may (i) seek to refinance all or a portion of the
senior notes at maturity though sales of additional debt or equity securities of
the Company, (ii) seek to sell all or a portion of its interests in one or more
of its affiliated companies, (iii) negotiate with its current financial and
strategic partners to permit the cash produced by its affiliated companies, such
as UPC, to be distributed to equity holders rather than reinvested in the
businesses of such affiliated companies, and/or (iv) seek to invest in companies
that will make substantial cash distributions on or before the maturity of the
senior notes.
The Company continues to be actively engaged in the development and acquisition
of additional investment opportunities in multi-channel television services and
related businesses in Asia/Pacific and Latin America and incurs expenses in
identifying and pursuing these opportunities before any investment decision is
made. The Company anticipates making investments supplemented by capital raised
from local financial and strategic partners as well as local debt financing to
the extent available and appropriate for each project, subject to the provisions
of the Company's and UIH AP's senior secured notes indentures.
See Note 4 of the Company's Condensed Consolidated Financial Statements for
additional information regarding the Company's commitments subject to the
provisions of the Company's and UIH A/P's senior secured notes indentures.
Results of Operations
The Company's Management Fee Income from Related Parties. Management fee
income, as compared to the corresponding prior year amounts, increased
approximately $284 (979.3%) and $567 (900.0%) during the three and six months
ended August 31, 1996 and 1995, respectively. The detail of management fee
income is as follows:
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended August 31, Ended August 31,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- --------
<S> <C> <C> <C> <C>
UIH Asia/Pacific, Inc. ................ $ 29 $ -- $ 163 $ --
UIH Latin America, Inc. ............... 217 -- 356 --
Other ................................. 67 29 111 63
---- ---- ---- ----
Total management fee income from
related parties ................. $ 313 $ 29 $ 630 $ 63
==== ==== ==== ====
</TABLE>
13
<PAGE>
The Company's Service Revenue. Service revenue, as compared to the corresponding
prior year amounts, increased approximately $3,799 (833.1%) and $5,395 (522.8%)
during the three and six months ended August 31, 1996 and 1995, respectively, as
follows:
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended August 31, Ended August 31,
-------------------- ------------------
1996 1995 1996 1995
---------- -------- -------- --------
<S> <C> <C> <C> <C>
UIH Asia/Pacific, Inc. (1) .... $3,936 $ 456 $5,870 $ 552
UIH Latin America, Inc. (2) ... 246 -- 484 --
Other (3) ..................... 73 -- 73 480
----- ---- ----- -----
Total service revenue ...... $4,255 $ 456 $6,427 $1,032
===== ==== ===== =====
</TABLE>
(1) Amounts for UIH Asia/Pacific, Inc. have varied for the following reasons:
- Austar, formerly known as CEtv, launched service in September 1995 and
was consolidated effective March 1, 1996.
- The Tahiti system launched service in March 1995.
- The Company acquired a 100% interest in United Wireless in September
1995.
(2) The Company acquired 94% of Cablestar in February 1996.
(3) Other amounts have varied for the following reasons:
- The Company's previously owned 66.7% subsidiary, Kabel Net, initiated
MMDS operations during the fall of 1994. Beginning June 1, 1995, the
activity of Kabel Net and certain of the programming assets are
recorded through the Company's 50% equity pick-up from UPC.
- The Company began consolidating ITN effective June 1, 1996.
The Company's Operating Expense. During the three and six months ended August
31, 1996 and 1995, respectively, the Company experienced an increase in
operating expense, as compared to the corresponding prior year amounts, of
approximately $6,537 (534.1%) and $10,376 (416.0%), as follows:
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended August 31, Ended August 31,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- --------- -------
<S> <C> <C> <C> <C>
UIH Asia/Pacific, Inc. (1) ... $7,310 $1,224 $12,305 $1,415
UIH Latin America, Inc. (2) .. 104 -- 218 --
Other (3) .................... 347 -- 347 1,079
----- ----- ------ -----
Total operating expense ... $7,761 $1,224 $12,870 $2,494
===== ===== ====== =====
</TABLE>
Footnotes (1), (2), (3): see discussion under "The Company's Service Revenue"
above.
The Company's General and Administrative Expense. During the three and six
months ended August 31, 1996 and 1995, respectively, the Company experienced an
increase in general and administrative expense over the corresponding prior year
amounts of approximately $978 (14.7%) and $1,886 (15.6%), as follows:
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended August 31, Ended August 31,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- --------
<S> <C> <C> <C> <C>
UIH Asia/Pacific, Inc. (1) ............. $2,638 $1,024 $ 4,682 $ 1,184
UIH Latin America, Inc. (2) ............ 123 -- 257 --
Other (3) (4) .......................... 4,851 3,769 9,017 8,572
Non-recurring charges (5) .............. -- 1,841 -- 2,314
----- ----- ------ ------
Total general and administrative
expense............................. $7,612 $6,634 $13,956 $12,070
===== ===== ====== ======
</TABLE>
Footnotes (1), (2), (3): see discussion under "The Company's Service Revenue"
above.
(4) The increase, in part, relates to the increases in activity which have
resulted in the hiring of additional staff dedicated to the Company's
management and development efforts.
(5) Included in non-recurring charges are costs which are currently incurred by
UPC.
The Company's Depreciation and Amortization. Depreciation and amortization
increased $5,359 (1,429.1%) and $7,163 (487.9%) during the three and six months
ended August 31, 1996 and 1995, respectively. The increase is due to the launch
of the system in Tahiti in March of 1995 and Australia in September 1995, which
is consolidated effective March 1, 1996. As noted above under "The Company's
Service Revenue," the activity of Kabel Net and certain programming assets are
currently recorded as an equity pick-up and in fiscal 1996 such investments were
consolidated for the first quarter.
14
<PAGE>
The Company's Equity in Losses of Affiliated Companies, Net. The Company
recognized equity in losses of affiliated companies of $9,539 and $9,098 for the
three months ended August 31, 1996 and 1995, respectively, and $21,741 and
$13,310 for the six months ended August 31, 1996 and 1995, as follows:
<TABLE>
<CAPTION>
Three Months Ended August 31, 1996 Three Months Ended August 31, 1995
---------------------------------------- -----------------------------------------
Company/UPC Equity in Company/UPC Equity in
Ownership Income (Losses) of Ownership Income (Losses) of
Interest (1) Affiliated Companies Interest (1) Affiliated Companies
----------------- --------------------- --------------- ---------------------
<S> <C> <C> <C> <C>
Europe
UPC ................... 50.0% $(4,686) -- $ --
UCI (2)(3):
Norkabel ......... -- -- 8.3% 104
SCD .............. -- -- 2.2% (27)
Kabelkom ......... -- -- 3.9% 37
UCI .............. -- -- 8.3% (6)
------- -------
-- 108
Suspended loss (4) -- (108)
------- -------
Loss recognized .. -- --
------- -------
UII(3):
Tevel ............ -- -- 23.3% 512
PHL .............. -- -- 20.0%(5) (552)
Melita(2) ........ -- -- 41.6%(5) (357)
UII .............. -- -- 50.0% 121
------- -----
-- (276)
------- -----
UII Management(3) ..... -- -- 50.0% 232
Monor ................. 48.4% (591) 47.6% (857)
Santander(3) .......... -- -- 25.0% (119)
Kabel Net(3)(6) ....... -- -- 66.7% (1,217)
Programming(3)(6) ..... -- -- 100.0% (247)
UIH Latin America, Inc. ....
STX ................... 100.0% 255 -- --
Megapo ................ 49.0% 50 -- --
Net Sao Paulo(7) ...... 34.0% -- 34.0% (1,992)
Cablevision S.A. ...... 100.0% (1,298) 50.0% (2)
TV Show Brasil ........ 40.0% (324) 40.0% (269)
UIH Asia/Pacific, Inc. .....
Austar(8) -- -- 50.0% (175)
XYZ ................... 25.0%(9) (1,007) 50.0% (3,446)
Saturn (10) ........... 100.0% (529) 50.0% (274)
Other ...................... 33.8-46.3%(11) (1,409) 25.0-46.3% (456)
------- ------
Total equity in losses
of affiliated companies,
net................... $ (9,539) $(9,098)
======= ======
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended August 31, 1996 Six Months Ended August 31, 1995
--------------------------------------- -----------------------------------------
Company/UPC Equity in Company/UPC Equity in
Ownership Income (Losses) of Ownership Income (Losses) of
Interest (1) Affiliated Companies Interest (1) Affiliated Companies
---------------- --------------------- --------------- ---------------------
<S> <C> <C> <C> <C>
Europe
UPC ...................... 50.0% $(11,168) -- $ --
UCI (2)(3):
Norkabel ............ -- -- 8.3% 651
SCD ................. -- -- 2.2% (61)
Kabelkom ............ -- -- 3.9% 64
UCI ................. -- -- 8.3% (6)
-------- -------
-- 648
Suspended loss (4) .. -- -- (648)
-------- -------
Loss recognized ..... -- -- --
-------- -------
UII(3):
Tevel ............... -- -- 23.3% 1,054
PHL ................. -- -- 20.0%(5) (925)
Melita(2) ........... -- -- 41.6%(5) (598)
UII ................. -- -- 50.0% 267
-------- -------
-- (202)
-------- --------
UII Management(3) ........ -- -- 50.0% 468
Monor .................... 48.4% (1,187) 47.6% (1,761)
Santander(3) ............. -- -- 25.0% (213)
Kabel Net(3)(6) .......... -- -- 66.7% (1,217)
Programming(3)(6) ........ -- -- 100.0% (247)
UIH Latin America, Inc.
STX ...................... 100.0% 530 -- --
Megapo ................... 49.0% (208) -- --
Net Sao Paulo(7) ......... 34.0% (1,649) 34.0% (3,518)
Cablevision S.A. ......... 100.0% (1,614) 50.0% 9
TV Show Brasil ........... 40.0% (777) 40.0% (467)
UIH Asia/Pacific, Inc.
Austar(8) ................ -- -- 50.0% (364)
XYZ ...................... 25.0%(9) (1,639) 50.0% (4,389)
Saturn(10) ............... 100.0% (928) 50.0% (535)
Other ......................... 33.8-76.9%(11) (3,101) 25.0-46.3% (874)
-------- -------
Total equity in losses of
affiliated companies,
net...................... $ (21,741) $(13,310)
======== =======
</TABLE>
(1) On July 13, 1995, the UPC transaction was closed and the Company's
interests in UCI, UII, UII Management, Santander, Kabel Net and certain
programming entities were transferred to UPC.
(2) The Company's ownership interest with respect to equity in losses from UCI
and Melita was calculated based on the Company's average ownership interest
throughout the period.
(3) These properties were contributed to UPC.
(4) Represents cumulative losses in affiliate in excess of capital invested
(including contractual funding commitments) or a reduction of suspended
losses for equity in income.
(5) The Company's ownership interest with respect to equity in losses from PHL
and Melita is calculated net of minority interest.
(6) Due to the determination that Kabel Net and certain programming entities
would be contributed to UPC, the consolidated activity for the three months
ended June 30, 1995 was calculated as an equity pick up and not
consolidated.
(7) In August 1996, the Company sold its interest in Net Sao Paulo for $78,098
and recognized a gain of $65,260 on the sale.
(8) In December 1995, the Company increased its effective interest in Austar to
majority control and began consolidating Austar's results of operations
March 1, 1996.
(9) In July 1995, the Company reduced its ownership percentage in XYZ to 25%.
(10) In July 1996, UIH AP increased its ownership interest in Saturn to 100%. In
exchange for acquiring the additional 50% interest, the Company issued to
Saturn's other shareholder a 2.6% interest in UIH AP.
(11) The Company increased its ownership in ITN to 76.9% in April 1996.
The Company's Interest Income. Interest income, as compared to the
corresponding prior period amounts, increased by approximately $1,930 (116.0%)
and $818 (16.7%) during the three and six months ended August 31, 1996. Such
increase is primarily due to a higher amount of cash invested in the current
year as compared to the prior year and due to reduced fundings to projects in
the current period.
The Company's Interest Expense. Interest expense, as compared to the
corresponding prior period amounts, increased by approximately $10,150 (126.4%)
and $16,299 (104.5%) during the three and six months ended August 31, 1996. The
increase is due to the sale of the senior secured notes in connection with the
Company's debt offerings in November 1995 and February 1996.
16
<PAGE>
The Company's Provision for Losses on Investment Related Costs. Provision for
losses on investment related costs totaled $472 and $439 for the three months
ended August 31, 1996 and 1995, respectively and $824 and $816 for the six
months ended August 31, 1996 and 1995, respectively. The Company capitalizes
direct and incremental costs incurred relative to pursuing potential
investments. If an investment is made, these costs are either reimbursed to the
Company by the operating entity or capitalized as part of the cost basis of the
investment. If the potential investment is abandoned, these costs are expensed.
Gain on Sale of Affiliated Company. In August 1996, the Company sold its
interest in Net Sao Paulo for $78,098 and recognized a gain of $65,260. The
purchase price was satisfied with a cash payment of $43,098 and a note
receivable of $35,000. The note receivable bears interest at a rate of 12% per
annum, is due in August 1997, and is guaranteed by the Company's former partner
in Net Sao Paulo.
17
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 5 - Other Information
Summary Operating Data
The operating data set forth below reflect the aggregate statistics of the
operating systems in which the Company has an ownership interest.
<TABLE>
<CAPTION>
As of June 30, 1996
--------------------------------------------------------------
Homes in Homes Basic Basic UIHI
Service Area Passed Subscribers Penetration Ownership
------------ ------ ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Europe
- ------
UPC Systems:
Austria
Cable ............ 884,000 612,400 423,300 69.1% 47.5%
Netherlands (Amsterdam)
Cable ............ 525,000 516,125 487,221 94.4% 25.0%
Belgium
Cable ............ 134,000 133,000 127,109 95.6% 50.0%
Netherlands (Eindhoven)
Cable ............ 90,000 88,440 84,018 95.0% 50.0%
Israel
Cable ............ 330,000 327,575 224,675 68.6% 11.7%
Ireland
Cable ............ 78,100 77,706 49,571 63.8% 10.0%
MMDS ............. 277,200 257,000 60,752 23.6%
Czech Republic
Cable/MMDS ....... 330,000 99,579 30,197 30.3% 50.0%
MATV ............. -- 9,610 9,610 100.0%
Slovakia
Cable ............ 100,000 7,865 6,166 78.4% 37.5%
Malta
Cable ............ 179,000 139,070 42,556 30.6% 21.3%
Hungary (Kabelkom)
Cable ............ 252,100 235,646 216,209 91.8% 2.0%
Norway
Cable ............ 233,900 219,091 154,093 70.3% 4.2%
Germany
Cable ............ 300,000 150,000 53,491 35.7% 14.5%
Sweden
Cable ............ 541,600 316,567 148,432 46.9% 1.1%
SMATV ............ -- 143,971 59,912 41.6%
Santander, Spain
Cable ............ 57,800 17,186 1,790 10.4% 12.5%
Portugal
Cable ............ 772,000 -- -- -- 50.0%
Romania
Cable ............ 105,000 47,562 28,240 59.4% 25.5-45.0%
France (Citecable)
Cable ............ 250,000 69,740 6,868 9.8% 15.0%
--------- --------- ---------
Total ...... 5,439,700 3,468,133 2,214,210
--------- --------- ---------
<CAPTION>
As of June 30, 1996 As of March 31,1996
--------------------------------------- -------------------------------------
UIHI UIHI UIHI
Equity in Equity in Equity in
Homes in Homes Basic Homes Basic Basic
Service Area Passed Subscribers Passed Subscribers Penetration
------------ ------ ----------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Europe
- ------
UPC Systems:
Austria
Cable ............ 419,900 290,890 201,068 610,200 419,900 68.8%
Netherlands (Amsterdam)
Cable ............ 131,250 129,031 121,805 515,059 485,616 94.3%
Belgium
Cable ............ 67,000 66,500 63,555 133,000 127,902 96.2%
Netherlands (Eindhoven)
Cable ............ 45,000 44,220 42,009 88,200 83,808 95.0%
Israel
Cable ............ 38,610 38,326 26,287 324,166 222,325 68.6%
Ireland
Cable ............ 7,810 7,771 4,957 77,247 49,413 64.0%
MMDS ............. 27,720 25,700 6,075 211,244 60,327 28.6%
Czech Republic
Cable/MMDS ....... 165,000 49,790 15,099 76,514 17,131 22.4%
MATV ............. -- 4,805 4,805 9,880 9,880 100.0%
Slovakia
Cable ............ 37,500 2,949 2,312 6,738 5,607 83.2%
Malta
Cable ............ 38,127 29,622 9,064 136,158 39,243 28.8%
Hungary (Kabelkom)
Cable ............ 5,042 4,713 4,324 235,402 217,471 92.4%
Norway
Cable ............ 9,824 9,202 6,472 217,982 153,690 70.5%
Germany
Cable ............ 43,500 21,750 7,756 66,000 53,491 81.0%
Sweden
Cable ............ 5,958 3,482 1,633 315,953 151,179 47.8%
SMATV ............ -- 1,584 659 143,244 61,621 43.0%
Santander, Spain
Cable ............ 7,225 2,148 224 18,761 1,098 5.9%
Portugal
Cable ............ 386,000 -- -- -- -- --
Romania
Cable ............ 32,625 16,224 8,602 -- -- --
France (Citecable)
Cable ............ 37,500 10,461 1,030 50,040 7,041 14.1%
--------- --------- --------- --------- ---------
Total ...... 1,505,591 759,168 527,736 3,235,788 2,166,743
--------- --------- --------- --------- ---------
<CAPTION>
As of March 31, 1996
-----------------------------------------------
UIHI UIHI
Equity in Equity in
UIHI Homes Basic
Ownership Passed Subscribers
--------- ------ -----------
<S> <C> <C> <C>
Europe
- ------
UPC Systems:
Austria
Cable ............ 47.5% 289,845 199,453
Netherlands (Amsterdam)
Cable ............ 25.0% 128,765 121,404
Belgium
Cable ............ 50.0% 66,500 63,951
Netherlands (Eindhoven)
Cable ............ 50.0% 44,100 41,904
Israel
Cable ............ 11.7% 37,927 26,012
Ireland
Cable ............ 10.0% 7,725 4,941
MMDS ............. 21,124 6,033
Czech Republic
Cable/MMDS ....... 50.0% 38,257 8,566
MATV ............. 4,940 4,940
Slovakia
Cable ............ 37.5% 2,527 2,103
Malta
Cable ............ 21.3% 29,002 8,359
Hungary (Kabelkom)
Cable ............ 2.0% 4,708 4,349
Norway
Cable ............ 4.2% 9,155 6,455
Germany
Cable ............ 14.5% 9,570 7,756
Sweden
Cable ............ 1.1% 3,475 1,663
SMATV ............ 1,576 678
Santander, Spain
Cable ............ 12.5% 2,345 137
Portugal
Cable ............ -- -- --
Romania
Cable ............ -- -- --
France (Citecable)
Cable ............ 15.0% 7,506 1,056
------- -------
Total ...... 709,047 509,760
------- -------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
As of June 30, 1996
-------------------------------------------------------------------------------------------------
UIHI
Equity in UIHI UIHI
Homes in Equity Equity in
Homes in Homes Basic Basic UIHI Service in Homes Basic
Service Area Passed Subscribers Penetration Ownership Area Passed Subscribers
------------ ------ ----------- ----------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UIHI Systems:
Hungary (Monor)(1)
Telephony............. 75,000 75,000 49,723 66.3% 43.3% 32,475 32,475 21,530
Cable................. -- 34,324 10,368 30.2% -- 14,862 4,489
UIH Latin America, Inc.
-----------------------
Chile (Cablevision)(2)
Cable................. 234,000 156,124 45,454 29.1% 100.0% 234,000 156,124 45,454
Chile (Pacifico)(2)
Cable................. 44,000 26,843 7,257 27.0% 100.0% 44,000 26,843 7,257
Chile (STX)
Cable................. 221,000 147,548 48,762 33.0% 100.0% 221,000 147,548 48,762
Mexico
Cable................. 350,000 165,113 53,334 32.3% 49.0% 171,500 80,905 26,134
Fortaleza, Brazil
MMDS.................. 430,000 387,000 10,040 2.6% 40.0% 172,000 154,800 4,016
Jundiai, Brazil
Cable................. 50,000 33,199 7,124 21.5% 46.3% 23,150 15,371 3,298
Peru
Cable................. 115,000 10,000 2,619 26.2% 94.0% 108,100 9,400 2,462
--------- --------- --------- --------- ---------- -------
Total............ 1,444,000 925,827 174,590 973,750 590,991 137,383
--------- --------- --------- --------- ---------- -------
UIH Asia/Pacific, Inc.
---------------------------
Australia (Austar)
MMDS/DTH.............. 1,500,000 1,171,000 34,808 3.0% 94.0% 1,410,000 1,100,740 32,720
Australia (XYZ)
Programming........... N/A N/A 207,666 N/A 25.0% N/A N/A 51,917
New Zealand
Cable................. 141,000 6,000 1,125 18.8% 100.0% 141,000 6,000 1,125
Philippines(3)
Cable................. 433,000 81,259 29,642 36.5% 40.0% 173,200 32,504 11,857
Tahiti
MMDS.................. 31,000 17,458 4,361 25.0% 90.0% 27,900 15,712 3,925
China (HITV)(4)
Microwave Relay Nwt... N/A N/A N/A N/A 49.0% N/A N/A N/A
--------- --------- --------- --------- --------- -------
Total............ 2,105,000 1,275,717 277,602 1,752,100 1,154,956 101,544
--------- --------- --------- --------- --------- -------
Grand Total...... 9,063,700 5,779,001 2,726,493 4,263,916 2,552,452 792,682
========= ========= ========= ========= ========== =======
<CAPTION>
As of March 31, 1996
------------------------------------------------------------------------
UIHI UIHI
Equity in Equity in
Homes Basic Basic UIHI Homes Basic
Passed Subscribers Penetration Ownership Passed Subscribers
--------- ----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
UIHI Systems:
Hungary (Monor)(1)
Telephony............. 75,000 43,690 58.3% 43.3% 32,475 18,918
Cable................. 29,676 8,606 29.0% 12,850 3,726
UIH Latin America, Inc.
- ---------------------------
Chile (Cablevision)(2)
Cable................. 148,128 42,583 28.7% 100.0% 148,128 42,583
Chile (Pacifico)(2)
Cable................. 24,325 6,562 27.0% 100.0% 24,325 6,562
Chile (STX)
Cable................. 141,343 47,124 33.3% 65.0% 91,873 30,631
Mexico
Cable................. 156,610 52,462 33.5% 49.0% 76,739 25,706
Fortaleza, Brazil
MMDS.................. 387,000 8,699 2.2% 40.0% 154,800 3,480
Jundiai, Brazil
Cable................. 26,722 5,448 20.4% 46.3% 12,372 2,541
Peru
Cable................. 15,000 2,550 17.0% 94.0% 14,100 2,397
------- ------- ------- -------
Total............ 899,128 165,428 522,337 113,900
------- ------- ------- -------
UIH Asia/Pacific, Inc.
- ---------------------------
Australia (Austar)
MMDS/DTH.............. 347,038 14,047 4.0% 90.0% 312,334 12,633
Australia (XYZ)
Programming........... N/A 185,000 N/A 25.0% N/A 46,250
New Zealand
Cable................. 6,000 1,100 18.3% 50.0% 3,000 2,250
Philippines(3)
Cable................. 66,553 24,444 36.7% 40.0% 26,621 9,778
Tahiti
MMDS.................. 15,450 4,500 29.1% 90.0% 13,905 4,050
China (HITV)(4)
Microwave Relay Nwt... N/A N/A N/A 49.0% N/A N/A
--------- --------- --------- ------
Total............ 435,041 229,091 355,860 74,961
--------- --------- --------- ------
Grand Total...... 4,674,633 2,613,558 1,632,569 721,265
========= ========= ========= =======
</TABLE>
(1) The Company owns a 48.4% interest in Monor Communications Group, Inc. which
holds a 89.47% interest in the operating company, Monor Telefon.
(2) The Company holds a 100% interest in Cablevision. Cablevision holds a 100%
interest in Cablevision Norte S.A. and a 100% interest in Pacifico TV.
(3) The Company currently has a convertible loan with SCS, which upon
conversion will allow for a 40% ownership interest.
(4) The Company has a 49% interest in HITV, a joint venture that owns a
microwave relay system in the Hunan Province that transmits one provincial
channel to approximately 400,000 cable television homes in the region.
19
<PAGE>
The financial information presented below has been taken from unaudited
financial information of the respective operating companies that were providing
service as of June 30, 1995 and 1996. Some of the information presented below
has been derived from financial statements prepared in accordance with foreign
generally accepted accounting principles which differ from United States
generally accepted accounting principles. In addition, certain amounts for the
six months ended June 30, 1995 and 1996 have been converted to dollars using
June 30, 1996 exchange rates for the convenience translation.
<TABLE>
<CAPTION>
Revenues
----------------------------------
Convenience Translation
----------------------------------
Six Months Ended Six Months Ended
June 30,1995 June 30, 1996
---------------- ----------------
Europe (in thousands)
<S> <C> <C>
Belgium(1)........................ $ -- $ 10,477
Eindhoven(1)...................... -- 5,356
Austria(1)........................ -- 45,983
Amsterdam......................... -- 23,687
Israel............................ 36,537 45,281
Ireland........................... 13,627 14,887
Malta............................. 2,968 4,308
Norway............................ 17,349 16,895
Sweden............................ 21,463 21,270
Hungary (Kabelkom, cable)......... 9,607 10,882
Hungary (Monor, telephony/cable).. 2,046 5,361
Czech Republic(1)................. 645 1,670
Spain............................. 16 313
France............................ -- 25
Romania........................... -- 360
Slovakia.......................... -- 101
-------- --------
Total 104,258 206,856
-------- --------
UIH Latin America, Inc.
Chile (Cablevision)(3)............ 2,121 3,650
Chile (Pacifico)(3)............... 431 738
Chile (STX)....................... -- 7,191
Jundiai, Brazil................... 286 1,055
Fortaleza, Brazil................. 892 2,429
Mexico............................ -- 4,081
Peru (Cablestar).................. -- 484
-------- --------
Total 3,730 19,628
-------- --------
UIH Asia/Pacific, Inc.
Australia (United Wireless)(4).... -- 5
Australia (Austar)................ -- 4,147
New Zealand....................... 53 105
Tahiti............................ 541 1,739
Philippines....................... -- 1,720
Australia (XYZ)................... -- 2,667
-------- --------
Total.......................... 594 10,383
-------- --------
Grand Total.................... $108,582 $236,867
======== ========
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Net Income (Loss)
------------------------------------
Convenience Translation
------------------------------------
Six Months Ended Six Months Ended
June 30, 1995 June 30, 1996
----------------- -----------------
Europe (in thousands)
<S> <C> <C>
Belgium(1)........................ $ -- $ (637)
Eindhoven(1)...................... -- (332)
Austria(1)........................ -- 299
Amsterdam......................... -- (2,525)
Israel............................ 4,170 10,706
Ireland........................... (5,906) (2,731)
Malta............................. (1,232) (1,521)
Norway............................ 3,492 (11,602)
Sweden............................ (12,597) (7,281)
Hungary (Kabelkom, cable)......... 1,098 2,415
Hungary (Monor, telephony/cable).. 26,238 (2,605)
Czech Republic(1)................. (3,687) (4,526)
Spain............................. (1,005) (919)
France............................ -- (741)
Romania........................... -- 188
Slovakia.......................... -- (31)
-------- ---------
Total 10,571 ( 21,843)
-------- ---------
UIH Latin America, Inc.
Chile (Cablevision)(3)............ 238 (913)
Chile (Pacifico)(3)............... (29) 33
Chile (STX)....................... -- 2,216
Jundiai, Brazil................... (525) (622)
Fortaleza, Brazil................. (1,537) (1,229)
Mexico............................ -- (654)
Peru (Cablestar).................. -- (62)
-------- ---------
Total (1,853) (1,231)
-------- ---------
UIH Asia/Pacific, Inc.
Australia (United Wireless)(4).... -- (1,184)
Australia (Austar)................ -- (16,369)
New Zealand....................... (1,022) (1,739)
Tahiti............................ (2,333) (1,745)
Philippines....................... -- (190)
Australia (XYZ)................... -- (6,423)
-------- ---------
Total.......................... (3,355) (27,650)
-------- ---------
Grand Total.................... $ 5,363 $ (50,724)
======== =========
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Adjusted EBITDA (9)
------------------------------------
Convenience Translation
------------------------------------
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1996
----------------- -----------------
Europe (in thousands)
<S> <C> <C>
Belgium(1)........................ $ -- $ 3,542
Eindhoven(1)...................... -- 3,502
Austria(1)........................ -- 23,971
Amsterdam......................... -- 11,043
Israel............................ 18,852 24,868
Ireland........................... 3,519 5,548
Malta............................. 759 1,100
Norway............................ 7,862 5,682
Sweden............................ 4,998 6,698
Hungary (Kabelkom, cable)......... 4,221 4,710
Hungary (Monor, telephony/cable).. (457) 2,153
Czech Republic(1)................. (2,466) (2,599)
Spain............................. (950) (570)
France............................ -- (662)
Romania........................... -- 246
Slovakia.......................... -- (118)
------- --------
Total 36,338 89,114
------- --------
UIH Latin America, Inc.
Chile (Cablevision)(3)............ 665 1,063
Chile (Pacifico)(3)............... 52 187
Chile (STX)....................... -- 3,178
Jundiai, Brazil................... (448) (116)
Fortaleza, Brazil................. (1,296) (541)
Mexico............................ -- 1,322
Peru (Cablestar).................. -- 9
------- --------
Total (1,027) 5,102
------- --------
UIH Asia/Pacific, Inc.
Australia (United Wireless)(4).... -- (823)
Australia (Austar)................ -- (9,919)
New Zealand....................... (800) (1,434)
Tahiti............................ -- (440)
Philippines....................... -- 525
Australia (XYZ)................... -- (5,289)
------- --------
Total.......................... (800) (17,380)
------- --------
Grand Total.................... $34,511 $ 76,836
======= ========
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Long-term Debt
------------------------
Convenience Translation
------------------------
As of
June 30, 1996
------------------------
Europe (in thousands)
<S> <C>
Belgium(1) $ --
Eindhoven(1)...................... 12,934
Austria(1)........................ --
Amsterdam......................... 198,923
Israel............................ 18,304
Ireland........................... 54,813
Malta............................. 12,746
Norway(2)......................... 149,799
Sweden............................ 112,976
Hungary (Kabelkom, cable)......... --
Hungary (Monor, telephony/cable).. 30,198
Czech Republic(1)................. --
Spain............................. --
France............................ --
Romania........................... --
Slovakia.......................... 1,967
--------
Total 592,660
--------
UIH Latin America, Inc.
Chile (Cablevision)(3)............ --
Chile (Pacifico)(3)............... --
Chile (STX)....................... --
Jundiai, Brazil................... 129
Fortaleza, Brazil................. 889
Mexico............................ 351
Peru (Cablestar).................. 208
--------
Total 1,577
--------
UIH Asia/Pacific, Inc.
Australia (United Wireless)(4).... --
Australia (Austar)................ 2,203
New Zealand (5)................... --
Tahiti (6)........................ --
Philippines (7)................... --
Australia (XYZ) (8)............... --
--------
Total.......................... 2,203
--------
Grand Total.................... $596,440
========
</TABLE>
(1) These systems were contributed to UPC in July 1995 at which time a new
basis of accounting was adopted. Thus, there is no comparable prior year
information. In addition to the debt noted above, Austria and Belgium have
intercompany loans, which eliminate upon consolidation, of S1.3 billion
($124.0 million) and BF 3.6 billion ($115.4 million) and UPC has a
subordinated convertible loan payable to Philips totaling NLG 213.8 million
($133.0 million).
(2) In addition to the long-term debt noted above, Norkabel has Nkr 712.0
million ($111.1 million), of loans payable to UCI (including accrued
interest).
(3) The Company acquired its ownership interest in the Chile (Cablevision)
systems in January 1994. Cablevision owns 100% of Cablevision Norte and
100% of Pacifico.
(4) The Company acquired its ownership in United Wireless in September 1995
and, as such, the amounts shown are using the new basis of accounting with
no comparable history. United Wireless has A$ 2.7 million ($2.1 million)
of loans payable to related parties at June 30, 1996.
(5) Saturn has loans payable to the owners totaling N$14.3 million ($9.8
million) at June 30,1996.
(6) Telefenua has loans payable to the Company of $10.3 million at June 30,
1996.
(7) The Philippine system has a convertible loan payable to the Company of
P168.7 million ($6.4 million) as of June 30, 1996.
(8) XYZ shows all capital contributions by shareholders as loans which totaled
$34.7 million as of June 30, 1996.
(9) Adjusted EBITDA represents net income (loss) as determined using generally
accepted accounting principles which differ from those used in the United
States for Israel, Ireland, Sweden, Chile, New Zealand, Spain, Mexico,
Philippines, Belgium, France, Germany, Austria, the Netherlands, Slovakia
and Romania plus net interest expense, income tax expense, depreciation,
amortization, minority interest, management fee expense, currency exchange
gains (losses) and other non-operating income (expense) items. Industry
analysts generally consider Adjusted EBITDA to be an appropriate measure of
the performance of multi-channel television operations. Adjusted EBITDA
should not be considered as an alternative to net income or to cash flows
or to any other generally accepted accounting principles measure of
performance or liquidity as an indicator of an entity's operating
performance.
23
<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
-------------- ------------- --------------------------
August 5, 1996 Sale of interest in Net Sao Paulo None
24
<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.
UNITED INTERNATIONAL HOLDINGS, INC.
Date: October 14, 1996
---------------------------------------------
By: /S/ Bernard G. Dvorak
------------------------------------------
Bernard G. Dvorak
Chief Financial Officer
(A Duly Authorized Officer and Principal Financial Officer)
25
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from United
International Holdings, Inc. Form 10-Q for the Quarter Ended August 31, 1996 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> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> AUG-31-1996
<CASH> 150,606
<SECURITIES> 2,662
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 89,497
<DEPRECIATION> 8,205
<TOTAL-ASSETS> 819,524<F2>
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 621,817
30,676
0
<COMMON> 390
<OTHER-SE> 160,466
<TOTAL-LIABILITY-AND-EQUITY> 819,524
<SALES> 0
<TOTAL-REVENUES> 7,057
<CGS> 0
<TOTAL-COSTS> 12,870
<OTHER-EXPENSES> 8,631
<LOSS-PROVISION> 824
<INTEREST-EXPENSE> 31,894
<INCOME-PRETAX> (9,848)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,848)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,848)
<EPS-PRIMARY> (0.65)
<EPS-DILUTED> 0
<FN>
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.
</FN>
</TABLE>
