<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 May 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
July 10, 1996 was:
Class A Common Stock -- 25,761,925 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
May 31, 1996 and February 29, 1996
(Unaudited).................................. 2
Condensed Consolidated Statements of
Operations For the Three Months Ended
May 31, 1996 and 1995 (Unaudited)............ 3
Condensed Consolidated Statement of
Stockholders' Equity For the Three Months
Ended May 31, 1996 (Unaudited)............... 4
Condensed Consolidated Statements of Cash
Flows For the Three Months Ended
May 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.......................... 12
</TABLE>
PART II - OTHER INFORMATION
---------------------------
<TABLE>
<CAPTION>
Page
Number
------
<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>
May 31, February 29,
1996 1996
----------- --------------
<S> <C> <C>
ASSETS
Cash and cash equivalents.............. $ 65,946 $ 112,218
Restricted cash and short-term
investments........................... 14,073 14,073
Short-term investments................. 42,157 35,692
Management fee receivables............. 958 498
Costs to be reimbursed by affiliated
companies, net........................ 8,166 7,972
Notes receivable....................... 6,581 7,581
Property, plant and equipment, net of
accumulated depreciation of $3,921 and
$2,097, respectively.................. 49,028 31,102
Acquisition, transaction and
development costs, net................ 5,427 4,541
Investments in and advances to
affiliated companies, accounted for
under the equity method, net.......... 270,733 272,205
Other investments in affiliated
companies, including marketable
equity securities..................... 3,809 3,273
Goodwill, net.......................... 45,977 45,629
Other assets, net...................... 44,947 45,422
--------- ---------
Total assets........................... $ 557,802 $ 580,206
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued
liabilities........................... $ 13,260 $ 11,068
Accrued funding obligations............ 2,769 2,163
Senior secured notes and other debt.... 384,892 371,251
--------- ---------
Total liabilities...................... 400,921 384,482
--------- ---------
Minority interest in subsidiaries...... 1,889 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........... 30,370 30,072
--------- ---------
Commitments (Note 4)
Stockholders' Equity:
Class A Common Stock, $.01 par value,
60,000,000 shares authorized,
25,761,925 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............. 335,062 325,716
Deferred compensation.................. (948) (842)
Unrealized loss on investment.......... (653) (1,189)
Cumulative translation adjustments..... (9,183) (7,371)
Accumulated deficit.................... (200,046) (164,728)
--------- ---------
Total stockholders' equity............. 124,622 151,976
--------- ---------
Total liabilities and stockholders'
equity................................ $ 557,802 $ 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
Months Ended
May 31,
----------------------------
1996 1995
------------ --------------
<S> <C> <C>
Management fee income from related
parties............................... $ 317 $ 34
Service revenue........................ 2,172 576
Operating expense...................... (5,109) (1,270)
General and administrative expense..... (6,344) (5,436)
Depreciation and amortization.......... (2,897) (1,093)
----------- -----------
Net operating loss................... (11,861) (7,189)
Equity in losses of affiliated
companies, net........................ (12,202) (4,212)
Interest income........................ 2,121 3,233
Interest income related parties, net... 288 79
Other interest expense................. (13,717) (7,568)
Provision for losses on investment
related costs......................... (352) (377)
Other.................................. (321) 41
----------- -----------
Net loss before minority interest.... (36,044) (15,993)
Minority interest in subsidiaries...... 726 713
----------- -----------
Net loss............................. $ (35,318) $ (15,280)
=========== ===========
Net loss per common share.............. $ (0.91) $ (0.50)
=========== ===========
Weighted average number of common
shares outstanding.................... 39,008,310 30,589,141
=========== ===========
</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 Unrealized
------------------ ----------------- Paid-In Deferred (Loss) Gain
Shares Amount Shares Amount Capital Compensation on Investment
------ ------ ------ ------ ------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, February 29, 1996 25,732,154 $257 13,274,685 $133 $325,716 $(842) $(1,189)
Issuance of Class A Common
Stock in connection with
Company's 401 (k) Plan.... 4,680 -- -- -- 74 -- --
Issuance of Class A Common
Stock in connection
with Company's Stock
Option Plan............... 6,875 -- -- -- 65 -- --
Amortization of deferred
compensation.............. -- -- -- -- -- 388 --
Exchange of Class B Common
Stock for Class A Common
Stock..................... 18,216 1 (18,216) (1) -- -- --
Accretion of dividends on
convertible preferred stock -- -- -- -- (298) -- --
Expiration of warrants not
tendered to the
Company................... -- -- -- -- 9,011 -- --
Repricing of stock options. -- -- -- -- 494 (494) --
Unrealized gain (loss) on
investment................ -- -- -- -- -- -- 536
Cumulative translation
adjustments............... -- -- -- -- -- -- --
Net loss................ -- -- -- -- -- -- --
---------- ---- ---------- ---- -------- ----- ----------
Balances, May 31, 1996..... 25,761,925 $258 13,256,469 $132 $335,062 $(948) $ (653)
========== ==== ========== ==== ======== ===== ==========
</TABLE>
<TABLE>
<CAPTION>
Cumulative
Translation Accumulated
Adjustments Deficit Total
----------- ------- -----
<S> <C> <C> <C>
Balances, February 29, 1996 $(7,371) $(164,728) $151,976
Issuance of Class A Common
Stock in connection with
Company's 401 (k) Plan.... -- -- 74
Issuance of Class A Common
Stock in connection
with Company's Stock
Option Plan............... -- -- 65
Amortization of deferred
compensation.............. -- -- 388
Exchange of Class B Common
Stock for Class A Common
Stock.................... -- -- --
Accretion of dividends on
convertible preferred
stock.................... -- -- (298)
Expiration of warrants not
tendered to the Company -- -- 9,011
Repricing of stock options. -- -- --
Unrealized gain (loss) on
investment................ -- -- 536
Cumulative translation
adjustments............... (1,812) -- (1,812)
Net loss................ -- (35,318) (35,318)
------ ------- -------
Balances, May 31, 1996..... $(9,183) $(200,046) $124,622
======= ========= ========
</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 Three Months Ended
May 31,
------------------------------------
1996 1995
------------------- ----------------
<S> <C> <C>
Cash flows from operating activities
Net Loss .................................................................... $(35,318) $(15,280)
Adjustments to reconcile net loss to net cash flows from operating
activities:
Equity in losses of affiliated companies, net .......................... 12,185 4,277
Minority interest share of losses ...................................... (726) (713)
Depreciation and amortization .......................................... 2,897 1,093
Amortization of deferred compensation .................................. 388 223
Accretion of interest on senior secured notes .......................... 13,229 7,436
Issuance of common stock in connection with Company's 401(k) Plan ...... 74 54
Provision for losses on investment related costs ....................... 352 377
(Increase) decrease in management fee receivables ...................... (460) 28
Increase in other assets ............................................... (2,982) (1,311)
Increase (decrease) in accounts payable, accrued liabilities and other.. 1,433 (3,911)
-------- --------
Net cash flows from operating activities ............................... (8,928) (7,727)
-------- --------
Cash flows from investing activities
Purchase of short-term investments ...................................... (50,890) (41,823)
Proceeds from sale of short-term investments ............................ 44,424 64,950
Restricted cash and short-term investments released ..................... -- 6,600
Investments in and advances to affiliated companies and other
investments ........................................................... (12,980) (5,674)
Increase in notes receivable ............................................ (264) (3,068)
Reimbursement of notes receivable ....................................... 1,264 --
Proceeds from sale of affiliated company ................................ 3,000 --
Advances to related parties ............................................. -- (3)
Increase in costs to be reimbursed by affiliated companies, net ......... (1,219) (202)
Acquisition, transaction and development costs incurred ................. (1,190) (1,723)
Purchase of property, plant and equipment ............................... (18,202) (3,566)
-------- --------
Net cash flows from investing activities ................................ (36,057) 15,491
-------- --------
Cash flows from financing activities
Issuance of common stock in connection with Company's Stock
Option Plan ........................................................... 65 101
Deferred debt offering costs ............................................ (69) --
Borrowing of other debt ................................................. 725 --
Payment of warrants tendered to the Company ............................. (2,156) --
------- --------
Net cash flows from financing activities ................................ (1,435) 101
-------- --------
Effect of exchange rates on cash ............................................ 148 723
-------- --------
(Decrease) increase in cash and cash equivalents ............................ (46,272) 8,588
Cash and cash equivalents, beginning of period .............................. 112,218 30,717
-------- --------
Cash and cash equivalents, end of period .................................... $ 65,946 $ 39,305
======== ========
Supplemental cash flow disclosures:
Cash paid for interest ...................................................... $ 256 $ 82
======== ========
Cash received for interest .................................................. $ 1,911 $ 3,546
======== ========
</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 MAY 31, 1996
(Monetary amounts stated in thousands)
(Unaudited)
1. Organization and Basis of Presentation
United International Holdings, Inc. (the "Company") 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 current significant investments in
multi-channel television, programming distribution and telephony operations.
<TABLE>
<CAPTION>
---------------------- ----------------------
Philips Media B.V. United International
Holdings, Inc.
---------------------- ----------------------
50% 50% 100%
---------------------- ----------------------
United and Philips United International
Communications B.V. Properties, Inc.
---------------------- ----------------------
- ------------------------------------- -------------------------------------
Europe Latin America
- ------ -------------
Interests Held Directly
<S> <C> <C> <C>
Radio Public (Belgium) 100.0% Cablevision S.A. (Chile) 100.0%
Kabel Net (Czech Rep.) 100.0 Cable Star (Peru) 94.0
KTE (Eindhoven, STX (Chile)(1) 65.0
the Netherlands) 100.0 Megapo (Mexico)(2) 49.0
Marne la Vallee (France) 100.0 Jundiai TV (Brazil) 46.3
Telekable Group (Austria) 95.0 TV Show Brasil
Transvatel SRO (Fortaleza, Brazil) 40.0
(Slovak Republic) 75.0 Net Sao Paulo (Brazil)(3) 34.0
A2000 (Amsterdam, the
Netherlands) 50.0 Asia/Pacific
Citecable (France) 30.0 ------------
RKS Hamburg (Germany) 29.0 United Wireless (Australia) 100.0
Santander (Spain) 25.0 CTV (Australia)(4) 94.0
- ------------------------------------- STV (Australia)(4) 94.0
Interests Held Through UII Telefenua (Tahiti)(5) 90.0
Saturn (New Zealand)(6) 50.0
Melita Cable (Malta) 42.5% HITV (China) 49.0
Tevel (Israel) 23.3 SCS (Philippines)(7) 40.0
PHL (Ireland) 20.0 XYZ (Australia) 25.0
Interests Held Through UCI Other
NorKabel (Norway) 8.3 -----
Kabelkom (Hungary) 3.9 ITN(8) 76.9
Swedish Cable (Sweden) 2.2 Monor Communications
- ------------------------------------- (Hungary) 48.4
Iberian Programming Services 33.8
Teleport (St. Petersburg) 30.0
------------------------------------
</TABLE>
(1) The Company acquired the remaining 35% interest in STX in June 1996.
(2) The Company holds a 49% interest in four affiliated companies and a 39%
interest in a fifth company that have non-exclusive licenses to operate
cable systems in southern Mexico.
(3) The Company has signed an agreement to sell its interest in Sao Paulo (see
Note 5).
(4) The Company holds an effective 94% economic interest in CTV and STV, the two
companies that form CEtv. The Company held an effective 50% economic
interest in CEtv 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%. The Company has agreed to
acquire the remaining 6% interest in CEtv, subject to certain conditions
(see Note 5).
(5) The Company owns an effective 90% economic interest in the Tahiti project.
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 Tahiti, respectively.
(6) The Company has agreed to acquire the remaining 50% interest in Saturn (see
Note 5).
(7) 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.
(8) In April 1996, the Company increased its ownership to 76.9% based on future
capital contributions which were fully funded by July 1996.
6
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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 will reduce 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
May 31, 1996, unless otherwise noted. All significant intercompany accounts
and transactions have been eliminated in consolidation.
In May 1996, UIH Australia/Pacific, Inc. ("UIH AP"), a wholly-owned
subsidiary of the Company, raised total gross proceeds of approximately
$225,115 from the private offering of $443,000 aggregate principal amount of
the 1996 Australia/Pacific 14% Senior Discount Notes due 2006 (the "1996
Australia/Pacific Notes"). The net proceeds will be used to fund system
construction and initial marketing costs and working capital requirements of
CEtv, Telefenua S.A., Saturn Communications Limited ("Saturn"), XYZ
Entertainment Pty Ltd ("XYZ") and United Wireless Pty Limited. UIH AP has a
fiscal yearend of December 31, thus as of May 31, 1996 the 1996
Australia/Pacific Notes totaling $226,515 (including accreted interest), cash
of $154,270 and interest expense of $1,400, are not included in the Company's
May 31, 1996 results, but will be in the Company's August 31, 1996 results.
Of the proceeds, $35,000 was paid back to the Company for intercompany bridge
loans, $28,200 was invested in affiliated companies and approximately $7,600
was used for offering costs.
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 May 31, 1996, and the results of its operations for the
three months ended May 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. During June 1996, UPC paid
the Company $4,524 for payment of its costs to be reimbursed.
7
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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
May 31, 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 $(22,041) $ (6,536) $ -- $121,865
Monor Communications...... 27,132 (6,194) (2,846) -- 18,092
Latin America
- -------------
STX....................... 29,423 480 (791) -- 29,112
Cablevision, S.A.......... 31,949 (1,353) (251) -- 30,345
Net Sao Paulo............. 22,817 (9,979) -- -- 12,838
TV Show Brasil............ 6,441 (2,035) -- -- 4,406
Megapo.................... 32,491 (333) (1,116) -- 31,042
Asia/Pacific
- ------------
Saturn.................... 6,290 (2,204) 222 -- 4,308
XYZ....................... 12,350 (12,460) 110 -- --
SCS....................... 6,346 (176) 168 -- 6,338
Other
- -----
Teleport.................. 3,000 (1,051) -- (1,949) --
ITN....................... 4,626 (1,641) -- -- 2,985
Other..................... 11,526 (2,124) -- -- 9,402
-------- -------- -------- ----------- --------
$344,833 $(61,111) $(11,040) $(1,949) $270,733
======== ======== ======== =========== ========
</TABLE>
<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>
8
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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 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 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.
3. Debt
Debt consists of the following as of May 31, 1996 and February 29, 1996:
<TABLE>
<CAPTION>
As of As of
May 31, February 29,
1996 1996
--------- -------------
<S> <C> <C>
Condensed Consolidated Income Statement Data
November 1994 14% senior secured notes,
net of unamortized discount......................... $237,272 $228,828
November 1995 14% senior secured notes,
net of unamortized discount......................... 81,430 78,745
February 1996 14% senior secured notes,
net of unamortized discount......................... 50,604 49,140
Note payable to a bank, paid in full in July 1996.... 9,820 9,820
Note payable to a bank, interest at LIBOR plus ......
1.75%, due December 31, 1996, secured by cash
deposit............................................. 3,828 3,828
Note payable to a bank, paid in full in June 1996.... 253 --
Capitalized lease obligation......................... 1,685 890
------- -------
Total senior secured notes and other debt............ $384,892 $371,251
======= =======
</TABLE>
The $237,272 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 $81,430 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 $50,604 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.
9
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The 1996 Australia/Pacific Notes, discussed in Note 1, 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.
At any time between January 31, 1996 and March 1, 1996, holders of the
warrants issued in connection with the November 1994 senior secured notes had
the right to require the Company to repurchase all or part of such holder's
warrants at a purchase price of $28.34 per warrant ($6.25 per underlying
share). Holders of the warrants required the Company to purchase 76,070
warrants to purchase 344,932 shares of Class A Common Stock for a cost of
$2,156 on March 1, 1996. The remaining outstanding warrants are exercisable
at any time before November 15, 1999 at $15.00 per share.
Included as restricted cash is $4,253 and $9,820 (which, subsequent to May
31, 1996 is no longer restricted due to the payment on debt noted above)
related to guarantees on certain bank debt noted above.
4. Commitments
<TABLE>
<CAPTION>
A summary of the Company's guarantees as of May 31, 1996 is as follows:
Guarantees
----------
<S> <C>
Teleport St. Petersburg............................. $ 2,070(1)
Monor Communications................................ 10,000(2)
------
$ 12,070(3)
======
</TABLE>
(1) Amounts represent Company guarantees 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.
(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 CEtv'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, which will be
consolidated in the Company's second quarter.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations-Liquidity and Capital Resources" for projected fundings.
5. Subsequent Events
In May 1996, the Company's wholly-owned subsidiary UIH AP increased its
effective economic interest in CEtv to approximately 94% due to the
conversion of certain bridge loans into equity and capital calls made that
the minority partner did not fund. In June 1996, the minority partner agreed
to sell and, subject to certain conditions, UIH AP agreed to acquire the
minority partners' 6% economic interest in CEtv for approximately $8,000.
On June 26, 1996, the Company acquired the remaining 35% interest in STX for
a purchase price of approximately $24,000. The Company paid approximately
$16,000 at closing, the balance to be paid over a two year period in
quarterly installments.
On June 26, 1996, the Company signed an agreement with VTR, a leading Chilean
conglomerate with interests in telecommunications and natural resources,
under which the parties will form a joint venture. The Company and VTR will
contribute their respective Chilean multi-channel television assets to the
joint venture of which the Company will own 34%. In December 1997, the
Company will have the option to increase its interest to 50% after a
revaluation of the properties subject to minimum and maximum values. Upon
completion of the merger, the new joint venture will have 305,000 subscribers
and will pass 1.25 million homes.
10
<PAGE>
UNITED INTERNATIONAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
In July 1996, UIH AP signed an agreement to acquire the remaining interest in
Saturn. Thus, UIH AP will own 100% of Saturn. In exchange for the 50% interest
in Saturn, the Company gave Saturn's other shareholder a 2.6% interest in UIH
AP.
In July 1996, the Company signed an agreement to sell its interest in Net Sao
Paulo for approximately $78,000. Thus, the Company will recognize a gain on
sale of approximately $65,000.
11
<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 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 three months ended May 31, 1996, the Company incurred a net loss of
$35,318 of which $12,185 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 $13,229. The Company purchased $18,202 of
property, plant and equipment, the majority of which was purchased by the
Company's majority owned subsidiaries in Australia and Tahiti as those systems
continue to construct their systems. The Company incurred $1,190 of
acquisition, transaction and development costs, primarily with respect to its
Latin America and Asia/Pacific regions. The Company's notes receivable
decreased by $1,264 due to advances which were repaid. The Company invested
$12,980 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 $50,890 and sold short-term investments of $44,424 as
part of its cash management activities. The Company also paid $2,156 for
warrants tendered to the Company.
During the three months ended May 31, 1995, the Company incurred a net loss of
$15,280 of which $4,277 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 $7,436. The Company purchased $3,566 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
systems continued to construct their MMDS systems. The Company incurred $1,723
of acquisition, transaction and development costs, primarily with respect to its
Latin America and Asia/Pacific regions. The Company's notes receivable
increased by $3,068 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
expects repayment in late 1996 pursuant to the terms of the bridge loans. The
Company's restricted cash decreased $6,600 due to the release of funds in
connection with the Company's planned investment in Megapo. The Company invested
$5,674 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 $41,823 and sold short-term investments of $64,950 as part of its
cash management activities.
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.
12
<PAGE>
The following table summarizes the Company's remaining projected funding
requirements for its projects other than UIH AP:
<TABLE>
<CAPTION>
Projected Funding
----------------------------------
Portion
Funded
Total as of Remaining
Type of Expected May 31, as of
Location Project Fundings 1996 May 31, 1996
- -------- ------- --------- --------- ------------
<S> <C> <C> <C> <C>
Europe:
Spain Programming Programming $ 11,613 $ 5,438 $ 6,175
Latin America:
Chile (Cablevision) Cable system 32,223 31,285 938
Chile (STX) Cable system 53,283 29,275 24,008(1)
Sao Paulo, Brazil Cable system 27,000 22,817 4,183(2)
Fortaleza, Brazil MMDS system 8,402 6,060 2,342
Jundiai, Brazil Cable system 4,733 3,439 1,294
Peru Cable system 3,767 811 2,956
Asia/Pacific:
Hunan Province, China Microwave
transmission
network 6,265 2,382 3,883
Philippines Cable system 14,200 6,032 8,168
Other:
Teleport St. Petersburg Telephony 4,206 1,905 2,301
ITN, Inc. -- 5,180 4,626 554
-------- -------- -------
Total $170,872 $114,070 $56,802
======== ======== =======
</TABLE>
(1) The remaining funding noted for STX is the purchase price for acquiring the
remaining 35% from the other shareholder in STX.
(2) The Company has signed an agreement to sell its interest in Sao Paulo, thus
reducing the remaining projected funding to zero.
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 has signed an agreement with its partner in
the Chile operating system to form a joint venture to which each party will
contribute its respective multi-channel television assets in Chile and the
Company will own 34%. The Company has an option in December 1997 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 the 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, is intended to be funded using the proceeds of
$225.1 million from the sale of the 1996 Australia/Pacific Notes (see Note 1).
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 May 31, 1996 ownership
interest):
<TABLE>
<CAPTION>
Projected Funding
------------------------------------------
Total Portion Remaining
Expected Funded as of as of
Location Type of Project Fundings May 31, 1996 May 31, 1996
- -------- --------------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Asia/Pacific:
New Zealand Cable system $ 41,828 $ 9,656 $ 32,172(1)
Australia (CEtv) MMDS/DTH systems 322,482 70,439(2) 252,043(3)
Australia (XYZ) Programming 14,328 7,877 6,451
Tahiti MMDS system 17,373 14,289 3,084
United Wireless Mobile data services 8,201 2,286 5,915
-------- -------- --------
$404,212 $104,547 $299,665
======== ======== ========
</TABLE>
(1) UIH AP has agreed to acquire the remaining 50% interest in Saturn which
will increase the remaining projected funding to $73,999.
(2) Does not include the $50,700 paid by the Company to other shareholders of
CEtv to increase its ownership interest.
(3) UIH AP has also agreed to acquire the remaining 6% of CEtv which will
increase the remaining projected funding to $272,628.
UIH AP has a fiscal yearend of December 31, thus as of May 31, 1996 the 1996
Australia/Pacific Notes totaling $226,515 (including accreted interest), cash of
$154,270 and interest expense of $1,400, are not included in the Company's May
31, 1996 results, but will be in the Company's August 31, 1996 results. Of the
proceeds, $35,000 was paid back to the Company for intercompany bridge loans,
$28,200 was invested in affiliated companies and approximately $7,600 was used
for offering costs.
13
<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, including potentially an initial public offering of its common
stock. 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 tranches 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% and in May 1996 increased its interest to
94% and UIH AP (the wholly-owned subsidiary to which the interests in CEtv were
contributed) has agreed subject to certain conditions, to acquire the remaining
6% in CEtv. As a result of this acquisition, the Company now consolidates the
financial results of STV and CTV, the two companies that comprise CEtv. 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.
Because the Company does not currently have any cash flow, its ability to repay
its obligations on the senior secured notes at maturity will be dependent on
developing one or more sources of cash prior to the maturity of the senior
secured notes in November 1999. The Company may (i) seek to refinance all or a
portion of the senior secured 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 secured 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 indenture.
Results of Operations
The Company's Management Fee Income from Related Parties. Management fee
income, as compared to the corresponding prior year amount, increased
approximately $283 (832%) during the three months ended May 31, 1996 and 1995.
The detail of management fee income is as follows:
<TABLE>
<CAPTION>
For the Three Months
Ended May 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Europe............................................ $ 44 $ 34
Latin America..................................... 139 --
Asia/Pacific...................................... 134 --
--- --
Total management fee income from related parties $ 317 $ 34
=== ==
</TABLE>
14
<PAGE>
The Company's Service Revenue. Service revenue, as compared to the
corresponding prior year amount, increased approximately $1,596 (277%) during
the three months ended May 31, 1996 and 1995, the detail of which is as follows:
<TABLE>
<CAPTION>
For the Three Months
Ended May 31,
--------------------
1996 1995
---------- --------
<S> <C> <C>
Kabel Net(1)............................ $ -- $ 323
Programming assets(1)................... -- 157
CEtv(2)................................. 1,068 --
Tahiti(3)............................... 862 96
Cable Star(4)........................... 238 --
United Wireless(5)...................... 4 --
------ -----
Total service revenue................ $2,172 $ 576
====== =====
</TABLE>
(1) The Company's previously owned 66.7% subsidiary, Kabel Net, initiated MMDS
operations during the fall of 1994. The first quarter activity of fiscal
1997 of Kabel Net and certain of the programming assets is currently
recorded through the Company's 50% equity pick-up from UPC.
(2) CEtv launched service in September 1995 and was consolidated effective
March 1, 1996.
(3) The Company's Tahiti system launched service in March 1995.
(4) The Company acquired 94% of Cable Star in February 1996.
(5) The Company acquired a 100% interest in United Wireless in September 1995.
The Company's Operating Expense. During the three months ended May 31, 1996 and
1995, the Company experienced an increase in operating expense, as compared to
the corresponding prior year amount, of approximately $3,839 (302%), the detail
of which is as follows:
<TABLE>
<CAPTION>
For the Three Months
Ended May 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Kabel Net (1)........................... $ -- $ 505
Programming assets(1)................... -- 574
CEtv(2)................................. 4,174 --
Tahiti(3)............................... 533 191
Cable Star(4)........................... 114 --
United Wireless(5)...................... 288 --
------ ------
Total operating expense............. $5,109 $1,270
====== ======
</TABLE>
(1) The Company's previously owned 66.7% subsidiary, Kabel Net, initiated MMDS
operations during the fall of 1994. As noted above under "The Company's
Service Revenue," the first quarter activity of fiscal 1997 of Kabel Net
and certain of the programming assets is currently recorded through the
Company's 50% equity pick-up from UPC.
(2) CEtv launched service in September 1995 and was consolidated effective
March 1, 1996.
(3) The Company's Tahiti system launched service in March 1995.
(4) The Company acquired 94% of Cable Star in February 1996.
(5) The Company acquired a 100% interest in United Wireless in September 1995.
The Company's General and Administrative Expense. During the three months ended
May 31, 1996 and 1995, the Company experienced an increase in general and
administrative expense over the corresponding prior year amount of approximately
$908 (17%), the detail of which is as follows:
<TABLE>
<CAPTION>
For the Three Months
Ended May 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Kabel Net(1)............................ $ -- $1,042
Programming assets(1)................... 506 834
CEtv(2)................................. 1,294 --
Tahiti(3)............................... 607 160
Cable Star(4)........................... 134 --
United Wireless(5)...................... 143 --
Non-recurring charges(6)................ -- 473
All other(7)............................ 3,660 2,927
------ ------
Total general and administrative
expense............................ $6,344 $5,436
====== ======
</TABLE>
15
<PAGE>
(1) The Company's previously owned 66.7% subsidiary, Kabel Net, initiated MMDS
operations during the fall of 1994. As noted above under "The Company's
Service Revenue," the first quarter activity of fiscal 1997 of Kabel Net and
certain of the programming assets is currently recorded through its 50%
equity pick- up from UPC.
(2) CEtv launched service in September 1995 and was consolidated effective
March 1 ,1996.
(3) The Company's Tahiti system launched service in March 1995.
(4) The Company acquired 94% of Cable Star in February 1996.
(5) The Company acquired a 100% interest in United Wireless in September 1995.
(6) Included in non-recurring charges are costs which are currently incurred
by UPC.
(7) The increase relates to the increases in activity which has resulted in the
hiring of additional staff dedicated to the Company's management and
development efforts.
The Company's Depreciation and Amortization. Depreciation and amortization
increased $1,804 (165%) during the three months ended May 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 first
quarter activity of fiscal 1997 of Kabel Net and certain programming assets is
currently recorded as an equity pick-up and in fiscal 1996 such investments were
consolidated.
The Company's Equity in Losses of Affiliated Companies, Net. The Company
recognized equity in losses of affiliated companies of $12,202 and $4,212 for
the three months ended May 31, 1996 and 1995, respectively, as follows:
<TABLE>
<CAPTION>
Three Months Ended May 31, 1996 Three Months Ended May 31, 1995
------------------------------------ -------------------------------------
Company Equity in Company Equity in
Ownership Income (Losses) of Ownership Income (Losses) of
Interest(1) Affiliated Companies Interest Affiliated Companies
------------ --------------------- ---------- ----------------------
<S> <C> <C> <C> <C>
Europe
UPC.............................. 50.0% $ (6,482) -- $ --
UCI (2)(3):
Norkabel.................... -- -- 8.3% 547
SCD......................... -- -- 2.2% (34)
Kabelkom.................... -- -- 3.9% 27
UCI......................... -- -- 8.3% --
-------- -------
-- 540
Suspended loss (4).......... -- -- (540)
-------- -------
Loss recognized............. -- -- --
-------- -------
UII(3):..........................
Tevel....................... -- -- 23.3% 542
PHL......................... -- -- 20.0% (373)
Melita(2)................... -- -- 41.6% (241)
UII......................... -- -- 50.0% 146
-------- -------
-- 74
-------- -------
UII Management(3)................ -- -- 50.0% 236
Monor............................ 48.4% (596) 47.6% (904)
Santander(3)..................... -- -- 25.0% (94)
Latin America
STX.............................. 65.0% 275 -- --
Megapo........................... 49.0% (258) -- --
Net Sao Paulo.................... 34.0% (1,649) 34.0% (1,526)
Cablevision, S.A................. 100.0% (316) 50.0% 11
TV Show Brasil................... 40.0% (453) 40.0% (198)
Asia/Pacific
Australia (CEtv)(5).............. -- -- 50.0% (189)
XYZ.............................. 25.0%(6) (632) 50.0% (943)
Saturn........................... 50.0% (399) 50.0% (261)
Other................................. 33.8-76.9%(7) (1,692) 33.8-46.3% (418)
-------- -------
Total equity in losses of
affiliated companies, net $(12,202) $(4,212)
======== =======
</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 Programming
were transfered 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) In December 1995, the Company increased its effective interest in CEtv to
majority control and began consolidating CEtv's results of operations March
1, 1996.
(6) In July 1995, the Company reduced its ownership percentage in XYZ to 25%.
(7) The Company increased its ownership in ITN to 76.9% in April 1996.
16
<PAGE>
The Company's Interest Income. Interest income, as compared to the
corresponding prior period amount, decreased by approximately $1,112 (34%)
during the three months ended May 31, 1996. Such decrease is due to a higher
amount of cash invested in the prior year as compared to the current year
balance. This decrease is the result of higher fundings to projects in the
current period.
The Company's Interest Expense. Interest expense, as compared to the
corresponding prior period amount, increased by approximately $6,149 (81%)
during the three months ended May 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.
The Company's Provision for Losses on Investment Related Costs. Provision for
losses on investment related costs totaled $352 and $377 for the three months
ended May 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.
17
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 5 - Other Information
Summary Operating Data
The operating data set forth below reflects the aggregate statistics of the
operating systems in which the Company has an ownership interest.
<TABLE>
<CAPTION>
As of March 31, 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>
Europe
- ------
UPC Systems:
Austria
Cable.................. 884,000 610,200 419,900 68.8% 47.5% 419,900 289,845 199,453
Netherlands (Amsterdam)
Cable................. 575,000 515,059 485,616 94.3% 25.0% 143,750 128,765 121,404
Belgium
Cable................. 134,000 133,000 127,902 96.2% 50.0% 67,000 66,500 63,951
Netherlands (Eindhoven)
Cable................. 90,000 88,200 83,808 95.0% 50.0% 45,000 44,100 41,904
Israel
Cable................. 325,000 324,166 222,325 68.6% 11.7% 38,025 32,927 26,012
Ireland
Cable................. 78,100 77,247 49,413 64.0% 10.0% 7,810 7,725 4,941
MMDS.................. 265,000 211,244 60,327 28.6% 26,500 21,124 6,033
Czech Republic
Cable/MMDS............ 357,000 76,514 17,131 18.3% 50.0% 178,500 38,257 8,566
MATV.................. -- 9,880 9,880 100.0% -- 4,940 4,940
Slovakia
Cable................. 100,000 6,738 5,607 83.2% 37.5% 37,500 2,527 2,103
Malta
Cable................. 140,000 136,158 39,243 28.8% 21.3% 29,820 29,002 8,359
Hungary
Cable................. 252,000 235,402 217,471 92.4% 2.0% 5,040 4,708 4,349
Norway
Cable................. 233,900 217,982 153,690 70.5% 4.2% 9,824 9,155 6,455
Germany
Cable................. 300,000 66,000 53,491 81.0% 14.5% 43,500 9,570 7,756
Sweden
Cable................. 541,600 315,953 151,179 48.4% 1.1% 5,958 3,475 1,663
SMATV................. -- 143,244 61,621 43.0% -- 1,576 678
Santander, Spain
Cable................. 57,800 18,761 1,098 5.7% 12.5% 7,225 2,345 137
France (Citecable)
Cable................. 110,000 50,040 7,041 14.1% 15.0% 16,500 7,506 1,056
--------- --------- --------- --------- --------- -------
Total........... 4,443,400 3,235,788 2,166,743 1,081,852 704,047 509,760
--------- --------- --------- --------- --------- -------
UIHI Systems:
Monor (1)
Telephony............. 75,000 75,000 43,690 58.3% 43.3% 32,475 32,475 18,918
Cable................. -- 29,676 8,606 29.0% -- 12,850 3,726
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1995
------------------------------------------------------------------------
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>
Europe
- ------
UPC Systems:
Austria
Cable.................. 608,000 414,775 68.2% 47.5% 288,800 197,018
Netherlands (Amsterdam)
Cable................. 516,998 488,631 95.4% 25.0% 129,250 122,158
Belgium
Cable................. 134,000 127,843 94.5% 50.0% 67,000 63,922
Netherlands (Eindhoven)
Cable................. 88,290 83,408 94.5% 50.0% 44,145 41,704
Israel
Cable................. 318,721 218,230 68.5% 11.7% 37,290 25,533
Ireland
Cable................. 76,742 48,730 63.5% 10.0% 7,674 4,873
MMDS.................. 209,157 59,508 28.5% 20,916 5,951
Czech Republic
Cable/MMDS............ 63,779 18,058 28.3% 50.0% 31,890 9,029
MATV.................. 8,137 8,137 100.0% 4,069 4,069
Slovakia
Cable................. 7,424 3,715 50.0% 37.5% 2,784 1,393
Malta
Cable................. 133,082 36,759 27.6% 21.3% 28,346 7,830
Hungary
Cable................. 234,734 217,801 92.8% 2.0% 4,695 4,356
Norway
Cable................. 217,267 152,257 70.1% 4.2% 9,125 6,395
Germany
Cable................. 66,000 53,000 80.3% 14.5% 9,570 7,685
Sweden
Cable................. 313,335 152,415 48.6% 1.1% 3,447 1,677
SMATV................. 144,875 61,719 42.6% 1,594 679
Santander, Spain
Cable................. 19,405 1,395 7.2% 12.5% 2,426 174
France (Citecable)
Cable................. 50,040 7,041 14.1% 15.0% 7,506 1,056
--------- --------- ------- -------
Total........... 3,209,986 2,153,422 700,527 505,502
--------- --------- ------- -------
UIHI Systems:
Monor (1)
Telephony............. 75,000 40,083 53.4% 43.3% 32,475 17,356
Cable................. 19,893 5,968 30.0% 8,614 2,584
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
As of March 31, 1996
-----------------------------------------------------------------------------------------------
UIHI
Equity in UIHI UIHI
Homes in Homes in Equity Equity in
Service Homes Basic Basic UIHI Service in Homes Basic
Area Passed Subscribers Penetration Ownership Area Passed Subscribers
-------- ------ ----------- ----------- --------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Latin America
- -------------
Chile (Cablevision)(2)
Cable................. 278,000 172,453 49,145 28.5% 100.0% 256,000 172,453 49,145
Chile (STX)
Cable................. 221,000 141,343 47,124 33.3% 65.0% 143,650 91,873 30,631
Mexico
Cable................. 350,000 156,610 52,462 33.5% 49.0% 171,500 76,739 25,706
Fortaleza, Brazil
MMDS.................. 430,000 387,000 8,699 2.2% 40.0% 172,000 154,800 3,480
Jundiai, Brazil
Cable................. 50,000 26,722 5,448 20.4% 46.3% 23,150 12,372 2,541
Sao Paulo, Brazil
Cable................. 500,000 201,912 48,753 24.1% 34.0% 170,000 68,650 16,756
Peru
Cable................. 115,000 15,000 2,550 17.0% 94.0% 108,100 14,100 2,397
--------- --------- --------- --------- --------- -------
Total............ 1,944,000 1,101,040 214,181 1,044,400 590,987 130,656
--------- --------- --------- --------- --------- -------
Asia/Pacific
- ------------
Australia (CEtv)
MMDS/DTH.............. 1,506,600 347,038 14,047 4.0% 90.0% 1,355,940 312,334 12,633
Australia (XYZ)
Programming........... N/A N/A 185,000 N/A 25.0% N/A N/A 46,250
New Zealand
Cable................. 141,000 6,000 1,100 18.3% 50.0% 70,500 3,000 2,250
Philippines(3)
Cable................. 433,000 66,553 24,444 36.7% 40.0% 173,200 26,621 9,778
Tahiti
MMDS.................. 31,000 15,450 4,500 29.1% 90.0% 27,900 13,905 4,050
China (HITV)(4)
Microwave Relay Nwt... N/A N/A N/A N/A 49.0% N/A N/A N/A
--------- --------- --------- --------- --------- -------
Total............ 2,111,600 435,041 229,091 1,627,540 355,860 74,961
--------- --------- --------- --------- --------- -------
Grand Total...... 8,574,000 4,876,545 2,662,311 3,786,267 1,696,219 738,021
========= ========= ========= ========= ========= =======
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1995
----------------------------------------------------------------------
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>
Latin America
- -------------
Chile (Cablevision)(2)
Cable................. 160,782 44,661 27.8% 100.0% 149,655 41,699
Chile (STX)
Cable................. 132,990 44,688 33.6% 65.0% 86,444 29,047
Mexico
Cable................. 166,328 51,728 31.1% 49.0% 81,501 25,307
Fortaleza, Brazil
MMDS.................. 385,000 7,300 1.9% 40.0% 154,000 2,920
Jundiai, Brazil
Cable................. 15,554 3,211 20.6% 46.3% 7,202 1,487
Sao Paulo, Brazil
Cable................. 199,706 43,073 21.6% 34.0% 67,900 14,645
Peru
Cable................. 15,000 2,550 17.0% 94.0% 14,100 2,397
--------- --------- --------- ----------
Total............ 1,075,360 197,211 560,802 117,502
--------- --------- --------- ----------
Asia/Pacific
- ---------------------------
Australia (CEtv)
MMDS/DTH.............. 240,658 5,204 2.2% 90.0% 216,592 4,684
Australia (XYZ)
Programming........... N/A 65,000 N/A 25.0% N/A 16,250
New Zealand
Cable................. 6,000 959 16.0% 50.0% 3,000 480
Philippines(3)
Cable................. 62,700 18,996 30.3% 40.0% 25,080 7,598
Tahiti
MMDS.................. 15,029 4,126 27.5% 90.0% 13,526 3,713
China (HITV)(4)
Microwave Relay Nwt... N/A N/A N/A 49.0% N/A N/A
--------- --------- --------- ----------
Total............ 324,387 94,285 258,198 32,725
--------- --------- --------- ----------
Grand Total...... 4,704,626 2,490,969 1,560,616 675,669
========= ========= ========= ==========
</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 50% interest in Pacifico TV
(which Cablevision has agreed to acquire the remaining 50%).
(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 data set forth below reflects the programming services in which the Company
has an interest:
<TABLE>
<CAPTION>
Programming Ownership Targeted
Country Services Interest Market
------- ----------- --------- --------
<S> <C> <C> <C>
Malta(1) * Premium movie Channel 50.0% Malta
* Hit movies of the 60's, 70's and 80's Channel
* General Entertainment/Sports Channel
The Czech * General Entertainment/Documentary Channel 50.0% Czech/Slovak
Republic(1) * Children's Channel Republics
Spain * Documentary Channel 33.8% Spain/Portugal
* Children's Channel
* Movie Channel
* Music Video Channel
Australia * Documentary, adventure, history and lifestyle programming 25.0% Australia
* Children's educational, entertainment and cartoons/family New Zealand
oriented drama and entertainment
* Music video with local presenters
* Drama, comedy, general entertainment, programming, library
movies
Israel(1) * General Entertainment Channel 3.5% Israel
* Movie Channel
* Children's Channel
* Sports Channel
Hungary(1) * HBO Hungary 2.0% Hungary
* Documentary, nature, history and travel
</TABLE>
(1) These properties are held through UPC.
The financial information presented below has been taken from unaudited
financial information of the respective operating companies that were providing
service as of March 31, 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 three
months ended March 31, 1996 have been converted to dollars using March 31, 1996
exchange rates for the convenience translation.
<TABLE>
<CAPTION>
Revenues
--------------------------------------------------
Convenience
Functional Currency Translation
----------------------------- -------------------
Three Months Ended Three Months Ended
March 31, March 31,
----------------------------- -------------------
1995 1996 1996
-------- ---------- -------------------
Europe (in thousands)
<S> <C> <C> <C>
Belgium(1).............. Belgian franc ("BF") -- 162,283 $ 5,349
Eindhoven(1)........Netherland guilder("NLG") -- 4,519 $ 2,733
Austria(1)............Austrian shilling ("S") -- 245,800 $ 23,710
Amsterdam.................................NLG -- 20,072 $ 12,139
Israel.............New Israeli shekel ("NIS") 55,775 69,044 $ 22,119
Ireland.....................Irish pound("LIr") 4,150 4,622 $ 7,279
Malta......................Maltese lira("Lm") 531 743 $ 2,061
Norway...............Norwegian kroner ("NKr") 57,448 55,346 $ 8,637
Sweden..................Swedish krona ("SKr") 70,865 71,300 $ 10,671
Hungary (cable)(3)..........................$ 4,710 5,610 $ 5,610
Hungary (telephony)(3)......................$ 832 2,607 $ 2,607
Czech Republic(1)........Czech koruna ("Kcs") 8,772 35,436 $ 1,301
Spain..................Spanish peseta("Ptes") -- 17,623 $ 142
Latin America
Chile (Cablevision)(4).Chilean dollar ("Ch$") 399,532 1,086,212 $ 2,639
Chile (Pacifico)(4).......................Ch$ -- 142,000 $ 345
Chile (STX)(5)..............................$ -- 3,291 $ 3,291
Sao Paulo, Brazil...........................$ 1,144 5,648 $ 5,648
Jundiai, Brazil.............................$ 145 485 $ 485
Forteleza, Brazil...........................$ 467 1,065 $ 1,065
Mexico..................Mexican peso ("Mex$") -- 15,093 $ 2,006
Peru......................Peruvian sol ("S/") -- 557 $ 238
Asia/Pacific
Australia (United Wireless)(7).....Australian
dollar ("A$") -- 5 $ 4
Australia (CEtv)...........................A$ -- 1,405 $ 1,099
New Zealand.........New Zealand dollar ("N$") 33 77 $ 113
Tahiti(10)..................................$ 96 862 $ 862
Philippines.............Philippino peso ("P") -- 21,122 $ 806
Australia (XYZ)............................A$ -- 2,367 $ 1,852
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Net Income (Loss)
-----------------------------------------------------
Convenience
Functional Currency Translation
---------------------------- ------------------
Three Months Ended Three Months Ended
March 31, March 31,
---------------------------- ----------------------
1995 1996 1996
------- ---------- ----------------------
<S> <C> <C> <C>
Europe (in thousands)
Belgium(1).........................BF -- (11,284) $ (372)
Eindhoven(1)......................NLG -- (175) $ (106)
Austria(1)..........................S -- 12,000 $ 1,158
Amsterdam.........................NLG -- (3,790) $ (2,292)
Israel............................NIS 5,474 8,292 $ 2,656
Ireland...........................LIr (1,767) (826) $ (1,301)
Malta..............................Lm (178) (248) $ (688)
Norway............................NKr (21,139) (24,653) $ (3,847)
Sweden............................SKr (45,266) (37,000) $ (5,538)
Hungary (cable)(3)..................$ 441 1,044 $ 1,044
Hungary (telephony)(3)..............$ (2,373) (1,196) $ (1,196)
Czech Republic(1).................Kcs (53,842) (66,127) $ (2,428)
Spain............................Ptes -- (50,753) $ (409)
Latin America
Chile (Cablevision)(4)............Ch$ 50,128 79,439 $ 193
Chile (Pacifico)(4)...............Ch$ -- 10,600 $ 26
Chile (STX)(5)......................$ -- 1,135 $ 1,135
Sao Paulo, Brazil...................$ (7,528) (4,713) $ (4,713)
Jundiai, Brazil.....................$ (100) (315) $ (315)
Forteleza, Brazil...................$ (493) (503) $ (503)
Mexico...........................Mex$ -- (4,856) $ (645)
Peru...............................S/ -- (105) $ (45)
Asia/Pacific
Australia (United Wireless)(7).....A$ -- (796) $ (623)
Australia (CEtv)...................A$ -- (8,375) $ (6,552)
New Zealand........................N$ (743) (1,020) $ (1,497)
Tahiti(10)..........................$ (342) (917) $ (917)
Philippines.........................P -- (1,516) $ (58)
Australia (XYZ)....................A$ -- (3,649) $ (2,855)
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Adjusted EBITDA (13)
----------------------------------------------------
Convenience
Functional Currency Translation
------------------------- ------------------
Three Months Ended Three Months Ended
March 31, March 31,
------------------------- ------------------
1995 1996 1996
------- ------ ------------------
<S> <C> <C> <C>
Europe (in thousands)
Belgium(1).............................BF -- 56,157 $ 1,851
Eindhoven(1)..........................NLG -- 2,993 $ 1,810
Austria(1)..............................S -- 131,300 $ 12,665
Amsterdam.............................NLG -- 9,636 $ 5,828
Israel................................NIS 29,485 33,623 $ 10,771
Ireland...............................LIr 874 1,690 $ 2,661
Malta..................................Lm 135 180 $ 499
Norway................................NKr 25,885 22,836 $ 3,564
Sweden................................SKr 13,005 20,500 $ 3,068
Hungary (cable)(3)......................$ 2,012 2,585 $ 2,585
Hungary (telephony)(3)..................$ (407) 1,042 $ 1,042
Czech Republic(1).....................Kcs (38,755) (39,551) $ (1,452)
Spain................................Ptes -- (32,114) $ (259)
Latin America
Chile (Cablevision)(4)................Ch$ 516 300,468 $ 730
Chile (Pacifico)(4)...................Ch$ -- 44,200 $ 107
Chile (STX)(5)..........................$ -- 1,335 $ 1,335
Sao Paulo, Brazil.......................$ (5,712) (2,137) $ (2,137)
Jundiai, Brazil.........................$ (41) (146) $ (146)
Forteleza, Brazil.......................$ (162) (320) $ (320)
Mexico...............................Mex$ -- 6,569 $ 873
Peru...................................S/ -- 290 $ 124
Asia/Pacific
Australia (United Wireless)(7).........A$ -- (565) $ (442)
Australia (CEtv).......................A$ -- (5,796) $ (4,534)
New Zealand............................N$ (600) (942) $ (1,382)
Tahiti(10)..............................$ (23,017) (232) $ (232)
Philippines.............................P -- 6,460 $ 247
Australia (XYZ)........................A$ -- (2,325) $ (1,819)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Long-term Debt
---------------------------------------
Functional Convenience
Currency Translation
------------------ ------------------
As of As of
March 31, March 31,
------------------ ------------------
1996 1996
------------------ ------------------
<S> <C> <C>
Europe (in thousands)
Belgium(1).............................BF -- $ --
Eindhoven(1)..........................NLG 22,107 $ 13,370
Austria(1)..............................S -- $ --
Amsterdam.............................NLG 340,000 $ 205,624
Israel................................NIS 75,802 $ 24,284
Ireland...............................LIr 33,791 $ 53,214
Malta..................................Lm 4,689 $ 13,007
Norway(2).............................NKr 534,912 $ 83,473
Sweden................................SKr 762,000 $ 114,045
Hungary (cable)(3)......................$ -- $ --
Hungary (telephony)(3)..................$ 30,272 $ 30,272
Czech Republic(1).....................Kcs -- $ --
Spain................................Ptes -- $ --
Latin America
Chile (Cablevision)(4)................Ch$ 300,468 $ 730
Chile (Pacifico)(4)...................Ch$ -- $ --
Chile (STX)(5)..........................$ -- $ --
Sao Paulo, Brazil (6)...................$ 5,944 $ 5,944
Jundiai, Brazil.........................$ 173 $ 173
Forteleza, Brazil.......................$ 1,172 $ 1,172
Mexico...............................Mex$ 3,189 $ 424
Peru...................................S/ 594 $ 254
Asia/Pacific
Australia (United Wireless)(7).........A$ -- $ --
Australia (CEtv)(8)....................A$ 2,154 $ 1,685
New Zealand (9)........................N$ -- $ --
Tahiti(10)..............................$ -- $ --
Philippines(11).........................P -- $ --
Australia (XYZ)(12)....................A$ -- $ --
</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 has an
intercompany loan, which eliminates upon consolidation, of S1.3 billion
($128.2 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 Nkr712.0
million ($111.1 million), of loans payable to UCI (including accrued
interest).
(3) The forint is the functional currency for the Hungary systems, however, the
systems report in U.S. dollars to the Company.
(4) The Company acquired its ownership interest in the Chile (Cablevision)
systems in January 1994. Cablevision owns 100% of Cablevision Norte and
50% of Pacifico.
(5) The Chilean peso (Ch$) is the functional currency for STX, however, the
system reports in U.S. dollars.
(6) In addition to the long-term debt noted above, Sao Paulo has shareholder
loans totaling $19.4 million as of March 31, 1996.
(7) 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.
(8) In addition to the loans noted above, CEtv has loans payable to the Company
of $17.4 million as of March 31, 1996 which were converted to equity in May
1996.
(9) Saturn has a loan payable to the owners totaling $8.3 million as of March
31, 1996.
(10) The French Polynesia franc (CFPF) is the functional currency for the
Tahiti systems, however, the statements are prepared in U.S. dollars.
Telefenua has loans payable to the Company of $5.2 million and an equipment
lease payable to the Company of $2.3 million as of March 31,1996.
(11) The Philippine system has a convertible loan payable to the Company of P
151.2 million ($5.8 million) as of March 31, 1996.
(12) XYZ shows all capital contributions by shareholders as loans which totaled
$29.7 million as of March 31, 1996.
(13) 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 and the Netherlands, 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
1. Indenture dated as of May 14, 1996, between UIH Australia/Pacific,
Inc. ("UIH A/P") and American Bank National Association, as trustee,
incorporated by reference to the Registration Statement on Form S-4
of UIH A/P filed on May 31, 1996 (File No. 333-05017).
27.1 Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter.
Date of Report Item Reported Financial Statements Filed
-------------- ------------- --------------------------
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: July 12, 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
MAY 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> MAY-31-1996
<CASH> 65,946
<SECURITIES> 3,809
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 52,949
<DEPRECIATION> 3,921
<TOTAL-ASSETS> 557,802 <F2>
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 384,892
30,370
0
<COMMON> 390
<OTHER-SE> 135,016
<TOTAL-LIABILITY-AND-EQUITY> 557,802
<SALES> 0
<TOTAL-REVENUES> 2,489
<CGS> 0
<TOTAL-COSTS> 5,109
<OTHER-EXPENSES> 2,897
<LOSS-PROVISION> 352
<INTEREST-EXPENSE> 13,717
<INCOME-PRETAX> (35,318)
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,318)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,318)
<EPS-PRIMARY> (.91)
<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>
