UNITEDGLOBALCOM INC, S-3/A, 1999-09-17

UNITEDGLOBALCOM INC
S-3/A, 1999-09-17
CABLE & OTHER PAY TELEVISION SERVICES

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As Filed With the Securities and Exchange Commission on September 17, 1999

Registration No. 333-86257

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Amendment No. 1

to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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UnitedGlobalCom, Inc.
(Exact name of registrant as specified in its charter)

Delaware 84-1116217
(I.R.S. Employer Identification No.)
(State or other jurisdictionof
incorporation or organization)

4643 South Ulster Street, Suite 1300
Denver, Colorado 80237
(303) 770-4001
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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Frederick G. Westerman III
Chief Financial Officer
UnitedGlobalCom, Inc.
4643 South Ulster Street, Suite 1300
Denver, Colorado 80237
(303) 770-4001
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copy to:
Garth B. Jensen, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
(303) 861-7000

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Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this Registration Statement.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]

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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+We will amend and complete this prospectus. A registration statement relating +
+to these securities has been filed with the Securities and Exchange +
+Commission. These securities may not be sold nor may offers to buy be +
+accepted prior to the time the registration statement becomes effective. This +
+prospectus shall not constitute an offer to sell or the solicitation of an +
+offer to buy nor shall there be any sale of these securities in any State in +
+which such offer, solicitation or sale would be unlawful prior to +
+registration or qualification under the securities laws of any such State. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED SEPTEMBER 17, 1999

8,500,000 Depositary Shares
Each representing 1/20th of a share of

7% Series C Senior Cumulative Convertible Preferred Stock

5,041,518 Shares Class A Common Stock
Issuable upon conversion of Preferred Stock
2,158,482 Shares Class A Common Stock
Issuable as dividends on the Preferred Stock

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UnitedGlobalCom:
. We are a leading provider of broadband communications services outside the
United States, including multi-channel television, telephone and
Internet/data services.

. UnitedGlobalCom, Inc.
4643 South Ulster Street, Suite 1300
Denver, Colorado 80237
(303) 770-4001

The Offering:
. Selling securityholders may sell, from time to time, the 8,500,000 depositary
shares, the underlying 425,000 shares of preferred stock, or the 5,041,518
shares of Class A common stock received upon conversion or redemption of the
preferred stock. We agreed to register these securities upon the request of
the selling securityholders.

. Use of Proceeds: We will not receive any proceeds from the sale of shares by
the selling securityholders.

. We are also registering 2,158,482 shares of Class A common stock for issuance
as dividends on the preferred stock.

Depositary Shares:
. Each depositary share represents ownership of 1/20th of a share of 7%
Series C Senior Cumulative Convertible Preferred Stock.

. Deposit Account: The purchasers of the depositary shares deposited
approximately $29.8 million into an account from which the holders will be
entitled to quarterly payments in an amount equal to $0.8750 per depositary
share commencing on September 30, 1999 through June 30, 2000, in cash or
Class A common stock at our option.

The Preferred Stock:
. Perpetual period.

. Dividends: Quarterly on March 31, June 30, September 30, and December 31 of
each year, commencing on September 30, 2000 payable in cash or Class A common
stock at our option.

. Conversion Right: Convertible at any time in whole or in part into shares of
our Class A common stock.

. Conversion Price: $84.30 per depositary share, subject to adjustment (equal
to an initial conversion ratio of 0.5931 shares of our Class A common stock
for each depositary share).

. Redemption: We have the right to redeem the preferred stock in certain
circumstances in cash or in Class A common stock.

. Change of Control: Holders will have a one-time option to convert their
shares into Class A common stock at an adjusted conversion price upon the
occurrence of a change of control.

Trading Format:
. The depositary shares are qualified for trading in the PORTAL market.

. Our Class A common stock trades on the Nasdaq National Market(R) under the
symbol "UCOMA."
See "Risk Factors" beginning on page 3 to read about certain factors you should
consider before buying these securities.

Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. Any representation to the contrary
is a criminal offense.
<PAGE>

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

We caution you that, in addition to the historical financial information
included in this prospectus, this prospectus includes certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 that are based on management's beliefs, as well as on assumptions made
by and information currently available to management. All statements other than
statements of historical fact included in this prospectus, including, without
limitation, budgeted, future, and certain other statements under "Prospectus
Summary," and located in other sections of this prospectus or documents
incorporated by reference regarding our financial position and business
strategy, may constitute forward-looking statements.

In addition, when we use the words "may," "will," "expects," "intends,"
"estimates," "anticipates," "believes," "plans," "seeks," or "continues" or the
negative thereof or similar expressions in this prospectus, we intend to
identify forward-looking statements. Such forward-looking statements involve
known and unknown risks, including, but not limited to, national and
international economic and market conditions, competitive activities or other
business conditions, and customer reception of our existing and future
services. You should be aware that the multi-channel television, telephone and
Internet/data services industries are changing rapidly, and, therefor, the
forward-looking statements and statements of expectations, plans and intent in
this prospectus are subject to a greater degree of risk than similar statements
regarding certain other industries.

Although we believe that our expectations with respect to the forward-
looking statements are based upon reasonable assumptions within the bounds of
our knowledge of our business and operations as of the date of this prospectus,
we cannot assure you that our actual results, performance or achievements will
not differ materially from any future results, performance or achievements
expressed or implied from such forward-looking statements. Important factors
that could cause actual results to differ materially from our expectations are
disclosed in this prospectus, including without limitation in conjunction with
the forward-looking statements included in this prospectus and under "Risk
Factors." All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by our discussion of these factors. We undertake no obligation
to release publicly the results of any revisions to these forward-looking
statements that may be made to reflect any future events or circumstances. We
caution you, however, that this list of risk factors and other cautionary
language contained in this prospectus may not be exhaustive.

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i
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PROSPECTUS SUMMARY

This summary highlights more detailed information contained in other
sections in this prospectus or incorporated by reference into this prospectus.
This summary does not contain all of the information that you should consider
before investing in the shares. You should read the entire prospectus
carefully, including the "Risk Factors" section and the documents incorporated
by reference. Some of the financial and operating figures appearing in this
prospectus are qualified by the term "aggregate." When we refer to information
as "aggregate," we mean that the information is given in respect of all systems
in which we hold any equity interest as though we wholly own them. All
references in this prospectus to "dollars" and "$" are to United States
dollars.

Information About Us

We are a leading broadband communications provider outside the United
States. We provide multi-channel television services in 22 countries worldwide
and telephone and Internet/data services in a growing number of our
international markets. Our operations are grouped into three major geographic
regions: Europe, Asia/Pacific and Latin America. Our European operations are
held through our approximately 60% owned, publicly traded subsidiary, United
Pan-Europe Communications N.V. ("UPC"), which is the largest pan-European
broadband communications (multi-channel television, telephone and
Internet/data) provider in terms of numbers of subscribers. Our primary
Asia/Pacific operation is Austar United Communications Limited ("Austar
United"), which owns the largest provider of multi-channel television services
in regional Australia, various Australian programming interests and the only
full service provider of broadband communications in New Zealand. In July 1999,
Austar United completed an initial public offering on the Australian Stock
Exchange and we currently own approximately 74% of this subsidiary. Our primary
Latin American operation is VTR Hipercable S.A. ("VTR"), Chile's largest multi-
channel television provider and a growing provider of telephone services. We
hold our Latin American operations through our 100% owned subsidiary, UIH Latin
America, Inc. ("ULA").

As of June 30, 1999, our systems (excluding planned acquisitions) on an
aggregate basis passed approximately 10.1 million homes and served
approximately 4.8 million basic video subscribers. Since its initial public
offering in February 1999, UPC has made or agreed to make acquisitions of 11
systems in Europe with a total of approximately 2.7 million subscribers, plus
an additional approximately 146,100 direct-to-home ("DTH") subscribers in
Eastern Europe, as of June 30, 1999. See "Business--Recent and Planned
Acquisitions."

We were formed in 1989 by a management team that had substantial experience
in the cable television industry in the United States. Our management team
capitalized on their expertise in building and operating multi-channel
television systems by purchasing and constructing systems in international
markets with attractive economic, regulatory and demographic profiles.

Our operating companies consist primarily of highly penetrated, mature
broadband systems that generate stable cash flow. We also operate a number of
earlier stage broadband businesses. Our primary goal in the majority of these
markets is to capitalize on the opportunity to increase revenues and cash flows
through the introduction of new and expanded video programming services and the
launch of telephone and Internet/data services over our broadband
communications networks. Today, we are a full-service provider of these video,
voice and Internet/data services in most of our Western European markets and in
New Zealand. We also provide video and voice services, and expect to provide
Internet/data services in the near future in Chile and Australia.

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Recent and Planned Acquisitions

The following are the acquisitions we have made or agreed to make since
March 1999. Those acquisitions that have not yet closed are subject to a number
of significant closing conditions, including regulatory approvals, that may not
be satisfied. Some of these acquisitions may not, therefore, close. See "Risk
Factors--Our acquisition strategy involves significant inherent risks."

<TABLE>
<CAPTION>
Ownership Video
Interest of UPC, Subscribers
Austar United at June Actual/Scheduled(*)
Company or ULA Location 30, 1999 Closing Date
------- ---------------- ------------------- ----------- -------------------
<S> <C> <C> <C> <C>
Europe (UPC):
Operating Systems:
GelreVision........... 100% The Netherlands 132,000 June 1999
A2000................. 50%(1) The Netherlands 532,275 September 1999
Kabel Haarlem......... 100% The Netherlands 66,000 1Q 2000
RCF................... 95.7% France 74,275 June 1999
Time Warner Cable
France............... 100% France 69,425 August 1999
Videopole............. 100% France 141,175 August 1999
Stjarn................ 100% Sweden 239,775 July 1999
@Entertainment........ 100% Poland 966,750 August 1999
+146,075
DTH
subscribers
Bratislava............ 100% Slovak Republic 157,675 June 1999
Kabel Plus............ 94.6% Czech Republic, 359,000 3Q 1999*
Slovak Republic
Programming Companies:
IPS................... 50% Spanish- and n/a Feb./May 1999
Portuguese-speaking
markets
SBS................... 13.3% Scandinavia and n/a July/Aug. 1999
Eastern Europe
Asia Pacific
(Austar United):
Saturn................ 35%(2) New Zealand 11,000 July 1999
Latin America (ULA):
VTR................... 60%(3) Chile 391,000 April 1999
</TABLE>
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(1) UPC acquired the 50% of A2000 that it did not already own.
(2) Austar United acquired the 35% of Saturn that it did not already own.
(3) We acquired the 60% of VTR that we did not already own.

Other Information

We were incorporated in 1989 as a Delaware corporation. Our main offices are
located at 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237. Our
telephone number is (303) 770-4001. Our fax number is (303) 770-4207.

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RISK FACTORS

You should consider carefully the following risk factors, as well as the
other information in this prospectus before buying any of our securities. This
prospectus and the documents incorporated into the prospectus by reference
contain statements which constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act. See "Disclosure
Regarding Forward-Looking Statements."

We are restricted from paying cash dividends and from redeeming the preferred
stock; we also could be prevented from paying dividends on shares of our common
stock

The terms of the preferred stock permit us to use cash to pay dividends and
redeem the preferred stock. We do not believe, however, that we will be able to
pay dividends in cash or to redeem the preferred stock for cash for the
forseeable future. The terms of our indebtedness restrict our ability to pay
cash dividends and to redeem the preferred stock. Our ability to pay cash
dividends and redeem our preferred stock will depend on us meeting certain
financial criteria, which in turn will require significant improvements in our
cash flow and consolidated net worth. Even if our indebtedness allow us to pay
cash dividends and to redeem the preferred stock, under Delaware law we can
make such payments only from our net income or our "surplus." Surplus is the
excess of our total assets over the sum of our liabilities plus the par value
of our outstanding capital stock. We cannot assure you that we will have any
surplus or net income. Moreover, without surplus, we cannot pay dividends on
shares of our common stock.

Your right to receive liquidation and dividend payments on the preferred stock
is junior to our existing and future indebtedness and to all of the liabilities
of our subsidiaries

Our obligations with respect to the preferred stock do not constitute
indebtedness and with respect to liquidation and dividend payments rank:

. junior to all present and future indebtedness and other payment
obligations of ours and of our subsidiaries;

. on parity with our Series B Preferred Stock and all future capital stock
designated as on parity; and

. senior to all classes of common stock and any junior preferred stock.
Further, the claims of creditors of our subsidiaries will be effectively
senior to all payments, including liquidation and dividend payments on
the preferred stock.

As of June 30, 1999, we had approximately $2.9 billion of indebtedness and
other liabilities (including capitalized lease obligations and trade payables
of our subsidiaries), all of which would have been senior in right of payment
to the preferred stock. We also assumed debt in connection with some of our
recent aquisitions following June 30, 1999 and will probably assume additional
debt for future acquisitions. If these acquisitions are completed our current
indebtedness would likely increase very significantly. In the event of
bankruptcy, liquidation or reorganization, our assets will be available to pay
obligations on the convertible preferred stock only after all of our
indebtedness has been paid. In that case, there may not be sufficient assets
remaining to pay amounts due on any or all of the preferred stock then
outstanding and any preferred stock ranking on parity with the preferred stock.
See "Description of the Preferred Stock--Ranking."

Because we are a holding company, we have no significant assets other than
stock of our subsidiaries and the proceeds generated from sales of our
securities; once these proceeds are spent, we will depend on our subsidiaries
to generate the funds needed to operate our business

We are a holding company with no business operations. Our only material
assets consist of the stock of our subsidiaries and the proceeds raised from
the sale of our equity and debt securities, all of which we have loaned or
contributed, or intend to loan or contribute, to our subsidiaries. We will have
to rely upon dividends and other payments from our subsidiaries to generate the
funds necessary to repurchase the preferred stock or make cash dividend
payments, if any. Our subsidiaries, however, are legally distinct from us and
have no obligation, contingent or otherwise, to pay amounts due pursuant to the
preferred stock or to make funds available for these payments. Our subsidiaries
have not guaranteed the preferred stock. The ability of our

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subsidiaries to make dividend and other payments to us is subject to, among
other things, the availability of funds, the terms of our subsidiaries'
indebtedness and applicable laws. There are significant restrictions on the
payment of dividends to us contained in the instruments governing the
obligations of our subsidiaries. As many of our subsidiaries are currently in
early stages of development, they likely will not have the ability to make such
payments to us regardless of any restrictions in debt instruments for the
foreseeable future.

Our ability to issue senior preferred stock in the future could adversely
affect the rights of holders of preferred stock and our common stock

We are authorized to issue preferred stock in one or more series on terms
that may be determined at the time of issuance by our board of directors. In
certain instances, a series of preferred stock could include voting rights,
preferences as to dividends and liquidation, conversion and redemption rights
senior to the preferred stock, and in all instances, senior to our common
stock. The future issuance of preferred stock could effectively diminish or
supersede the dividends and Liquidation Preferences of the preferred stock and
adversely affect our common stock.

The exercise or conversion of our outstanding options, warrants and other
convertible securities into common stock will dilute the percentage ownership
of our other stockholders

There are outstanding options and warrants to purchase approximately 2.9
million shares of our common stock and more options will be granted in the
future under our employee benefit plans. Additionally, our outstanding
preferred stock, as of June 30, 1999, is convertible into approximately 1.7
million shares of our common stock. A large number of the shares of common
stock underlying such securities are or will be registered for resale under the
Securities Act. The exercise or conversion of outstanding stock options,
warrants or other convertible securities will dilute the percentage ownership
of our other stockholders, including you.

We cannot assure you that an active trading market will develop for the
preferred shares

There has been no active trading market for the preferred stock. We have been
informed by the Initial Purchasers in the preferred stock placement that they
intend to make a market in the preferred stock; however they are not obligated
to do so and may cease market-making activities at any time. In addition, the
liquidity of any trading market in the preferred stock, and the market price
quoted for the preferred stock, may be adversely affected by changes in the
overall market for convertible securities and by changes in our financial
performance or prospects or in the prospects for companies in our industry
generally.

Our substantial indebtedness could adversely affect our financial health

We are highly leveraged. As of June 30, 1999, we had consolidated long-term
debt of approximately $2.5 billion and stockholders' deficit of approximately
$241.1 million which includes parent company debt of 1.2 billion and subsidiary
level debt of $1.3 billion. As a result of the pending acquisitions, our long-
term indebtedness and fixed charges will increase very significantly.

We currently believe that cash on hand, cash flow from our future
operations, asset sales and our borrowing capacity will be sufficient to meet
our obligations as they become due. In certain circumstances, some of which may
be beyond our control, we may have to repay the indebtedness prior to when it
is scheduled to be repaid. We may not be able to satisfy all of the conditions
necessary for our lenders to continue to lend us money under our existing
credit facilities. Some of these conditions are beyond our control. We also
cannot assure you that circumstances will not require us to sell assets or
obtain additional equity or debt financing. We may not at such time be able to
sell assets or obtain additional financing on reasonable terms or at all.

The degree to which we will be leveraged could have important consequences
to you, including, but not limited to, the following:

. a substantial portion of our cash flow from operations will be required
to be dedicated to debt service and will not be available for other
purposes;

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. our ability to obtain additional financing in the future could be
limited;

. certain of our borrowings are at variable rates of interest, which could
result in higher interest expense in the event of increases in interest
rates; and

. our ability to execute our business plan, to compete effectively, to
respond adequately to unforseen events and to take advantage of
opportunities could be limited.

Our acquisitions strategy involves significant inherent risks

A key element of our growth strategy is to continue acquiring systems near
our current systems and to increase the percentage we own in some systems. We
are often engaged in discussions or negotiations regarding the acquisition of
businesses and systems, some potentially significant in relation to our size.
Any future acquisitions will be accompanied by risks such as:

. Difficulty of identifying appropriate acquisitions. Our growth may
suffer if we are not able to identify and acquire cable/telephone
systems that are either near our existing networks or are large enough
to serve as the basis for expanded operations.

. Time of senior management. Our senior management may not be able to
devote their full attention to managing our existing business because of
the time they must spend negotiating agreements and monitoring
acquisition activities.

. Potential regulatory issues. We may not be able to obtain the required
approvals for acquisitions from the relevant regulatory authorities.

. Difficulties in completing acquisitions. We may not be able to satisfy
conditions that sellers of networks may demand in order to close
acquisitions. In addition, there may be significant legal and
contractual issues in connection with acquisitions, such as change of
control provisions in licenses and agreements, that could delay or
prevent completion. Finally, we may not be able to raise the financing
necessary to pay for such acquisitions.

. Entry into new markets. If we make acquisitions in markets in which we
have not previously operated, we will have no prior experience in
dealing with local regulators or with local market conditions.

We may not be able to raise sufficient capital to fund our acquisitions
strategy

We will need to raise significant capital to consummate the planned
acquisitions and to fund our acquisitions strategy. We may raise further
capital by selling assets, issuing debt or equity or borrowing funds. We are
not sure whether we will be able to raise capital through any of these or other
methods. If we cannot, we may not be able to grow by acquiring systems as we
intend. In addition, our acquisitions strategy exposes us to the risk of
unanticipated expenditures. For example, we may be liable for liabilities not
disclosed to us in the purchase of such businesses, or we may have to incur
greater capital expenditure than we intended, in relation to a particular
acquisition.

We cannot be certain that we will be successful in integrating acquired
businesses into ours

Our success depends, in part, upon the successful integration of the new
acquisitions and any future acquisitions we make. Although we believe that the
consummation of the new acquisitions will result in significant benefits and
synergies, the integration of these businesses will also present significant
challenges, including:

. realizing economies of scale in interconnection, programming and network
operations, and eliminating duplicate overheads; and

. integrating networks, financial systems and operational systems.

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We cannot assure you as a result of our new acquisitions, or future
acquisitions that we:

. will realize any anticipated benefits; or

. will successfully integrate any acquired business with our operations.

The multi-channel television, telephone and Internet/data business is capital
intensive because it requires expensive telecommunications infrastructure,
equipment and labor; we may not have, or have access to, sufficient capital to
upgrade our network, introduce new services and remain competitive

The video, telephone and Internet/data businesses are capital intensive
because it requires extensive telecommunications infrastructure, equipment and
labor. We may not have access to sufficient capital to remain competitive.
Lack of capital could harm our business.

Many of our operating companies are expanding and upgrading their networks
to offer new services. Technological change may make even more upgrades
necessary if our operating companies are to compete effectively in their
markets. Our financial resources may not be enough for our capital needs.
Also, we plan that equipment vendors will finance a substantial part of the
cost of the equipment for our new services. This vendor financing is not yet
in place. We may not be able to secure vendor financing on satisfactory terms,
if at all. Not upgrading our operating systems or making other planned capital
expenditures could harm our operations and competitive position.

UPC's acquisition of @Entertainment exposes UPC to a number of risks

As a result of UPC's acquisition of @Entertainment, UPC became subject to a
number of risks, including:

. Possible termination of conduit agreements. As of June 30, 1999, about
61.8% of @Entertainment's cable plant was constructed using pre-existing
conduits of the Polish national telephone company ("TPSA"). A
substantial portion of @Entertainment's contracts with TPSA permit
termination by TPSA without penalty at any time either immediately upon
the occurrence of certain conditions or upon provision of three to six
months' notice without cause. If TPSA terminated @Entertainment's access
to these conduits, @Entertainment might not be able to replace or locate
a substitute for the conduits. In addition, @Entertainment would incur
significant costs if it were forced to build its own conduits. In
addition, as of June 30, 1999, TPSA was legally entitled to terminate
conduit agreements covering approximately 4% of @Entertainment's
subscribers as a result of @Entertainments's failure to comply with
certain terms of its conduit agreements with TPSA. Any termination for
cause by TPSA of these contracts could result in the loss of
@Entertainment's permits, the termination of its agreements with Polish
cooperative authorities and programmers, and an inability to service
customers in affected areas.

. Compliance with foreign ownership and change of control rules. Under the
Polish Communications Act of 1990, permits for cable television
operators may be issued only to Polish citizens or companies in which
foreign persons do not hold more than 49% of the share capital and
voting rights, and in which the majority of members of the governing
bodies are Polish citizens residing in Poland. @Entertainment believes
that the current ownership structure of PTK Operator Sp.z o.o., its
licensee company, is in material compliance with Polish foreign
ownership rules. However, certain aspects of this structure have not
been tested for compliance with Polish foreign ownership rules in Polish
administrative or court proceedings, and we cannot assure you that such
structure will not be challenged by Polish telecommunications regulatory
authorities. If such ownership structure was found to be in breach of
Polish foreign ownership rules, this could result in the cancellation of
@Entertainment's permits and the imposition of monetary penalties. In
addition, under the Polish Telecommunications Act, @Entertainment's
permits could be revoked or limited in scope upon a direct or indirect
change of control of PTK Operator Sp.z o.o. The Telecommunications Act
does not define what constitutes a direct or indirect change of control.
There is a risk that UPC's acquisition of @Entertainment constituted an
indirect change of control of PTK Operator Sp.z o.o.

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. Operating without necessary permits. @Entertainment is currently
operating in certain areas without the permits necessary for the
construction and operation of a cable television network issued by the
Polish State Agency for Radio Communications (the "PAR"). Failure to
obtain these permits could lead to governmental orders requiring
@Entertainment to stop operating in those areas, the imposition of
monetary penalties, as well as forfeiture of our cable networks. In
addition, failure to be in compliance with all regulatory laws and
licensing requirements could result in @Entertainment being in breach
under a number of its operating agreements. In order to obtain new
permits from the PAR, @Entertainment must show that it is in compliance
with Polish foreign ownership restrictions. @Entertainment's operation
without requisite permits could impair its ability to obtain new permits
in the future, renew current licenses and conduct its business.

We expect to continue to experience net losses for the next several years

We have experienced significant losses every year since we started business.
As of December 31, 1998 we had an accumulated deficit of approximately $1.2
billion. We had net losses of approximately $91.3 million, approximately $138.8
million, approximately $342.5 million, and approximately $545.5 million for
fiscal years ended February 29, 1996, February 28, 1997, February 28, 1998 and
the ten months ended December 31, 1998, respectively. We expect to incur
substantial additional losses for the indefinite future. Continuing net
operating losses could materially harm our results of operations and increase
our need for additional capital in the future. See "--The multi-channel
television, telephone and Internet/data business is capital intensive because
it requires expensive telecommunications infrastructure, equipment and labor;
we may not have, or have access to, sufficient capital to upgrade our network,
introduce new services and remain competitive."

The loss of key personnel could weaken our technological and operational
expertise, delay the introduction of our new business lines and lower the
quality of our service

Our success and our growth strategy depends, in large part, on our ability
to attract and retain key management, marketing and operating personnel, both
at the corporate and operating company levels. Retaining a successful
international management team may be particularly difficult because key
employees may be
required to live and work outside of their home countries and because
experienced local managers are often unavailable. We may not be able to attract
and retain the qualified personnel we need for our business.

We are exposed to numerous risks inherent to foreign investment

We operate our businesses outside of the United States. Risks inherent in
foreign operations include loss of revenue, property and equipment from
expropriation, nationalization, war, insurrection, terrorism, general social
unrest and other political risks, currency fluctuations, risks of increases in
taxes and governmental royalties and fees and involuntary renegotiation of
contracts with foreign governments. We are also exposed to the risk of changes
in foreign and domestic laws and policies that govern operations of foreign-
based companies. In addition, our operations have been, and in the future may
be, adversely affected by downturns in global economic conditions. In recent
times, the economies of many of our markets, especially in emerging markets
such as Eastern Europe and Latin America, have not been as strong as the United
States' economy. Downturns in these economies could hurt our revenues and
profitability.

We are exposed to significant foreign currency exchange rate and conversion
risk against which we generally do not hedge

Our operating companies have attempted, and will continue to attempt, to
match costs with revenues and borrowings with repayments in terms of their
respective local currencies. However, payment for a majority of purchased
equipment has been, and may continue to be, required to be made in United
States dollars. In addition, the value of our investment in an operating
company is partially a function of the currency exchange rate between the
dollar and the applicable local currency. In general, we and many of our
operating companies

7
<PAGE>

do not execute hedge transactions to reduce our exposure to foreign currency
exchange rate risks. Accordingly, we may experience economic loss and reduced
earnings solely as a result of foreign currency exchange rate fluctuations. For
the years ended February 28, 1997 and 1998, the ten months ended December 31,
1998 and the six months ended June 30, 1999 we had foreign exchange losses of
approximately $0.4 million, approximately $1.4 million, approximately $1.6
million and approximately $20.2 million, respectively. We also experienced a
change in cumulative translation adjustments (resulting in decreases of
stockholders' equity) of approximately $8.4 million and approximately $50.3
million for the years ended February 28, 1997 and 1998, respectively, and
approximately $24.7 million and approximately $86.6 million for the ten months
ended December 31, 1998 and the six months ended June 30, 1999, respectively.

Some of our operating companies have notes payable and notes receivable that
are denominated in currencies other than their own functional currency or loans
linked to the dollar. We may also experience economic loss and reduced earnings
related to these monetary assets and liabilities.

Adverse regulation to our video, telephone or Internet/data services could
limit our revenues and growth plans and expose us to various penalties

Our businesses are subject to governmental regulation, which may change from
time to time. Regulation could slow the introduction of our new services.
Changes in applicable laws and regulations could increase our costs. We cannot
assure you that material and adverse changes in the regulation of our existing
operating systems will not occur in the future. Regulation can take the form of
price controls, service requirements, programming content restrictions and
foreign ownership restrictions, among others. Delays in obtaining any required
regulatory approvals could hurt our ability to offer some or all of our
proposed range of services in some of our markets.

As European Union ("EU") member states, Austria, The Netherlands, Belgium and
France are required to enact national legislation which implements directives
issued by the EU Commission and other EU bodies. Although not an EU member
state, Norway has generally implemented the same principles on the same
timetable as EU member states. As a result of EU directives, our Western
European operating companies may establish and provide telecommunications
networks and/or services, including public voice telephone and Internet/data
services, through their cable networks. The EU Commission has started to review
the consequences of the convergence of telecommunications, media and
information technology. This review may result in changes in the current
regulatory framework that may harm our business. Additionally, if any of our
operating companies in the EU with exclusive rights to cable television
infrastructure achieves annual revenue of more than (Euro)50 million, it must
account separately for its telecommunications services and any
cable television services. A draft EU Commission directive, if issued, will
require member states to enact legislation directing incumbent
telecommunications operators to separate their cable television and
telecommunications operations into distinct legal entities. This may increase
our competition as incumbents focus on specific services. In addition, certain
countries may impose interconnect obligations and other regulatory controls
with respect to the telecommunications services our operating systems offer.

The primary goal of regulation in the telecommunications sectors in many of
the countries in which we operate is to reduce the monopoly power of incumbent
telecommunications operators. While this has given us the opportunity to enter
the telephone and Internet/data services markets, the regulatory regimes
present some risks. Our operating companies need to retain and obtain licenses
and other regulatory approvals for our existing and new services. There is a
risk we may not succeed in obtaining and retaining such licenses, and there may
be long delays and adverse conditions in connection with them. The regulatory
process may be time-consuming and may impede our ability to offer new services
and to obtain interconnect arrangements with incumbent telecommunications
operators in a timely manner or on favorable terms. Our ability to compete
against large incumbent telecommunications operators depends on the regulation
of their pricing and service offerings to end-users and interconnected
carriers, which may be or become unfavorable to us. New laws and regulations
related to electronic commerce and the Internet could delay and impair our
Internet business. New and existing laws may cover issues such as:

8
<PAGE>

. sales and other taxes,

. user privacy,

. pricing controls,

. characteristics and quality of products and services,

. consumer protection,

. cross-border commerce,

. libel and defamation,

. copyright and trademark infringement, and

. other claims based on the nature and content of Internet materials.

Our ability to offer telephone services depends on having interconnect
arrangements with other telephone providers

In the markets where we offer telephone services we compete with the
incumbent telecommunications operators. All of these operators are more
established and have more resources in their respective markets than we do. To
offer telephone service effectively, we must be able to interconnect with their
systems so that our customers can call customers served by those operators.
Regulatory frameworks in some countries in which we operate may not include the
requirement that other telephone providers interconnect with us. In such cases,
we may be unable to provide telephone service. In addition, if we are able to
interconnect, we may be unable to obtain interconnection on terms that are
acceptable to us.

Changes in technology may limit the competitiveness of our new services;
sufficient demand may not develop for our new services

Technology in our multi-channel television and telecommunications services
industry is changing rapidly. This influences the demand for our products and
services. Our ability to anticipate changes in technology and regulatory
standards and to develop and introduce new and enhanced products successfully
on a timely basis will affect our ability to continue to grow and to remain
competitive. Upon completion of the upgrade of some of our systems, we intend
to offer a range of new services in those systems' markets. For example, we
plan to provide additional channels and tiers of premium channels beyond our
basic package, impulse pay-per-view services, high-speed data services,
Internet access and telephone services. We may not be able to implement the
technological advances that may be necessary for us to remain competitive. We
are also subject in all of our markets to the risks generally associated with
new product introductions and applications. These risks include lack of market
acceptance, delays in development and failure of new products to operate
properly or meet customer expectations. There is no proven market for some of
the advanced services we refer to above. There may not be sufficient demand for
our telephone, Internet/data and other enhanced services.

Computer systems may malfunction and interrupt our operating systems and our
services if they do not achieve Year 2000 readiness

We rely greatly on computer systems and other technological devices. Some of
these may not be capable of recognizing dates beginning on January 1, 2000.
This problem could cause any of our cable television, telephone, Internet/data
or programming operations to malfunction or fail. We expect this problem to be
more severe outside the United States.

Our Board of Directors has set up a task force to assess and try to remedy
the effect of potential Year 2000 problems on our critical operations. Some of
our critical operations, such as our ability to connect our telephone customers
to persons who use other telephone service providers, depend on other
companies. We cannot control how these other companies assess and remedy their
own Year 2000 problems. We are communicating with these companies to find out
more about the status of their Year 2000 compliance

9
<PAGE>

programs. The task force will evaluate and develop contingency plans as needed.
These may not be sufficient, however, to prevent interruptions on our systems.
If we or other companies on whom we depend fail to implement Year 2000
procedures on time, our business, operating results and financial condition
could be significantly harmed.

Customers may not want our video service if we cannot obtain attractive
programming

Our success depends on obtaining or developing affordable and popular
programming for our video subscribers. We may not be able to obtain or develop
enough competitive programming to meet our needs. This would reduce demand for
our video services, limiting their revenues. We rely on other programming
suppliers for almost all of our programming. In some of our markets, including
Eastern Europe, there is only a limited amount of local language programming
available. In these markets we must repackage other programming in the local
language.

We may be limited in claiming foreign tax credits; we do business in countries
that do not have tax treaties with the United States

In general, a United States corporation may claim a foreign tax credit
against its United States federal income tax expense for foreign income taxes
paid or accrued. A United States corporation may also claim a credit for
foreign income taxes paid or accrued on the earnings of a foreign corporation
paid to the United States corporation as a dividend. Because we must calculate
our foreign tax credit separately for dividends received from certain of our
foreign subsidiaries from those of other foreign subsidiaries and because of
certain other limitations, our ability to claim a foreign tax credit may be
limited. We own operating companies located in countries with which the United
States does not have income tax treaties. Because we lack treaty protection in
these countries, we may be subject to high rates of withholding taxes on
distributions and other payments from these operating companies and may be
subject to double taxation on their income. Limitations on our ability to claim
a foreign tax credit, our lack of treaty protection in some countries, and our
inability to offset losses in one foreign jurisdiction against income earned in
another foreign jurisdiction could result in a high effective United States
federal tax rate on our earnings.

We expect to encounter increased competition

The multi-channel television and telephone industries in many of the markets
in which we operate are competitive and often are rapidly changing. We
recognize that in the future we are likely to encounter increased competition
as new entrants with competing technologies, including but not limited to, DTH,
satellite master antenna television, MMDS (wireless cable) and local multipoint
distribution service, enter our markets and launch new services. Multi-channel
television also competes with the direct reception of broadcast television
signals and, in varying degrees, with other communications and entertainment
media. The success of our existing operating systems is dependent, in part, on
our ability to provide services and programming not otherwise available to
subscribers. We may also have to compete initially in certain areas with
unlicensed operators. In many of our markets, we compete with other multi-
channel television and telephone operators, many of which have substantially
more resources than us.

Some potential losses may not be covered by insurance

Our operating companies obtain insurance of the type and amount customary
for the property in their systems. Consistent with industry practice in the
United States, however, they do not insure the entire cable portion of their
multi-channel television, Internet/data or telephone systems. Should a
catastrophe occur that affects a significant portion of their systems, they
could incur substantial uninsured losses.

10
<PAGE>

The complexities of our operating systems, large numbers of customers and rapid
growth could disrupt our operations and harm our financial condition

We may not have planned for or be able to overcome all of the problems in
introducing our new local telephone and Internet/data services. Our new
services may not meet our performance expectations. This would impede our
planned revenue growth and materially harm our financial condition. Problems
with the existing or new systems could delay the introduction of the new
services, increase their costs, or slow down successful marketing. We cannot be
sure whether our Internet access business will be able to handle a large number
of online subscribers at high data transmission speeds. As the number of
subscribers goes up, we may have to add more fiber connection points in order
to maintain high speeds. This would require more capital, which we may be
unable to raise. If we cannot offer high data transmission speeds, customer
demand for our Internet/data services would go down. This would harm our
Internet/data business, our operating results and our financial condition. We
have not yet tested the technology we plan to use for telephone services for
the numbers of subscribers we expect. It may not function successfully at these
scales. This would harm our telephone operations. We plan to use back-up
batteries for our cable phones for operation during power failures. These may
run out in prolonged power failures. This would interrupt the service and could
lead to customer dissatisfaction. We may not be able to manage our growth
effectively, which would harm our business, operating results and financial
condition.

We are establishing customer care facilities in our relevant markets to
support the launch of our telephone and other new services. We may not be able
to establish well-running facilities staffed with appropriate personnel. This
could harm the introduction of our new services.

USE OF PROCEEDS

All of the depositary shares, preferred stock and shares of common stock
issuable upon conversion or redemption of the preferred stock being registered
hereby are for the benefit of the selling shareholders. Accordingly, we will
not receive any of the proceeds from the sale of such shares.

We are also registering 2,158,482 shares of common stock to pay as dividends
on the preferred stock. We may issue these shares rather than pay cash
dividends on the preferred stock.

11
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data have been derived from
our audited consolidated financial statements, except as of and for the six
months ended June 30, 1999, and should be read in conjunction with our audited
annual and unaudited interim consolidated financial statements and notes
thereto incorporated by reference into this prospectus. Our consolidated
financial statements do not consolidate the operating results of our minority-
owned affiliates.
<TABLE>
<CAPTION>
Years Ended Ten Six
Year Ended Year Ended February 28, Months Ended Months Ended
February 28, February 29, ----------------------- December 31, June 30,
1995 1996 1997 1998 1998 1999
------------ ------------ ---------- ---------- ------------ ------------
(In thousands, except share and per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenue................ $ 1,613 $ 2,870 $ 31,555 $ 98,622 $ 254,068 $ 253,914
System operating
expense............... (1,651) (4,224) (26,251) (65,631) (122,811) (130,912)
System selling,
general and
administrative
expense............... (2,103) (3,524) (33,655) (62,803) (105,226) (99,760)
Corporate general and
administrative
expense............... (16,196) (18,959) (20,365) (28,553) (194,767) (85,056)
Depreciation and
amortization.......... (1,701) (2,331) (38,961) (91,656) (159,045) (133,077)
---------- ---------- ---------- ---------- ---------- ----------
Net operating loss... (20,038) (26,168) (87,677) (150,021) (327,781) (194,891)
Gain on issuance of
common equity
securities by
subsidiaries.......... -- -- -- -- -- 822,067
Interest income,
including related
party income.......... 6,479 8,417 13,329 7,806 10,464 9,407
Interest expense....... (9,266) (36,045) (79,659) (124,288) (163,227) (118,457)
Provision for losses
on marketable equity
securities and
investment related
costs................. (2,865) (6,055) (5,859) (14,793) (9,686) (4,836)
Foreign currency
exchange loss......... -- -- (350) (1,419) (1,582) (20,205)
Gain on sale of
investments in
affiliated
companies............. -- 16,013 65,249 90,020 -- 7,456
Other income
(expense), net........ 107 81 (641) (3,669) (964) (2,008)
---------- ---------- ---------- ---------- ---------- ----------
Net (loss) income
before other items.. (25,583) (43,757) (95,608) (196,364) (492,776) 498,533
Share in results of
affiliated companies,
net................... (6,106) (48,635) (47,575) (68,645) (54,166) (31,608)
Minority interests in
subsidiaries.......... 1,075 1,081 4,358 1,568 1,410 74,938
---------- ---------- ---------- ---------- ---------- ----------
Net (loss) income
before extraordinary
charge.............. (30,614) (91,311) (138,825) (263,441) (545,532) 541,863
Extraordinary charge
for early retirement
of debt............... -- -- -- (79,091) -- --
---------- ---------- ---------- ---------- ---------- ----------
Net (loss) income ... $ (30,614) $ (91,311) $ (138,825) $ (342,532) $ (545,532) $ 541,863
========== ========== ========== ========== ========== ==========
Net (loss) income per
common share:
Basic (loss) income
before extraordinary
charge.............. $ (1.10) $ (2.69) $ (3.59) $ (6.75) $ (13.71) $ 13.61
Extraordinary
charge.............. -- -- -- (2.02) -- --
---------- ---------- ---------- ---------- ---------- ----------
Basic net (loss)
income.............. $ (1.10) $ (2.69) $ (3.59) $ (8.77) $ (13.71) $ 13.61
========== ========== ========== ========== ========== ==========
Diluted net (loss)
income.............. $ (1.10) $ (2.69) $ (3.59) $ (8.77) $ (13.71) $ 12.63
========== ========== ========== ========== ========== ==========
Weighted-average
number of common
shares outstanding:
Basic................ 27,802,250 34,017,660 39,035,776 39,211,501 39,919,887 39,732,277
========== ========== ========== ========== ========== ==========
Diluted.............. 27,802,250 34,017,660 39,035,776 39,211,501 39,919,887 42,894,811
========== ========== ========== ========== ========== ==========
Ratio of earnings to
fixed charges and
preference dividends
...................... -- (1) -- (1) -- (1) -- (1) -- (1) 8.91
========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
At
Year Ended At February 28, At At
February 28, February 29, ------------------- December 31, June 30,
1995 1996 1997 1998 1998 1999
------------ ------------ -------- ---------- ------------ ----------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash, cash equivalents
and short-term liquid
investments........... $215,955 $161,983 $140,743 $ 358,122 $ 94,321 $ 305,596
Investments in and
advances to affiliated
companies, net........ $ 85,280 $272,205 $253,108 $ 341,252 $ 429,490 $ 293,913
Property, plant and
equipment, net........ $ 13,741 $ 31,102 $219,342 $ 440,735 $ 464,059 $1,261,210
Goodwill and other
intangible assets,
net................... $ -- $ 45,629 $132,636 $ 409,190 $ 424,934 $1,032,495
Total assets........... $370,290 $580,206 $819,936 $1,679,835 $1,542,095 $3,207,712
Total debt............. $202,416 $371,227 $686,082 $1,866,096 $2,095,332 $2,561,693
Stockholders' equity
(deficit)............. $138,870 $151,976 $ 15,096 $ (392,280) $ (983,665) $ (241,106)
</TABLE>

12
<PAGE>

(1)In calculating the ratio of earnings to fixed charges and preference
dividends, earnings consists of net income or loss from continuing
operations before adjustment for minority interests in consolidated
subsidiaries or income or loss from equity investees, plus fixed charges.
Fixed charges consist of interest expense on third party debt and preferred
stock dividends. The ratio of earnings to fixed charges and preference
dividends was less than 1.0 to 1.0 for each of the Company's last five
fiscal years. Earnings available for fixed charges and preference dividends
were thus inadequate to cover fixed charges and preference dividends for
such periods. The amount of the coverage deficiencies for the years ended
February 28, 1995, February 29, 1996, February 28, 1997 and 1998 and for the
10 months ended December 31, 1998 were approximately $25.6 million, $43.8
million, $95.6 million, $196.4 million and $492.8 million, respectively.

13
<PAGE>

BUSINESS

Overview

We are a leading broadband communications provider outside the United
States. We provide multi-channel television services in over 20 countries
worldwide and telephone and Internet/data services in a growing number of our
international markets. Our operations are grouped into three major geographic
regions: Europe, Asia/Pacific and Latin America.

European Operations

Through our approximately 60% owned subsidiary, UPC, we have the largest
number of subscribers of any group of broadband communications networks
operated across Europe. UPC owns and operates cable-based communications
networks in 11 countries in Europe and in Israel and provides telephone and/or
Internet/data access services in five of these markets. UPC's primary Western
European systems are located in Vienna, Amsterdam, Brussels, Oslo, Stockholm
and suburban Paris. UPC also has systems in Israel, Malta and Central and
Eastern Europe.

UPC's systems, including those acquired after June 30, 1999, had
approximately 13.9 million homes in their service areas as of June 30, 1999. Of
these, approximately 8.6 million homes were passed by the cable in UPC's
network and thus are capable of receiving UPC's services as of this date.
Including acquisitions after June 30, 1999 approximately 5.7 million of these
homes, or approximately 66.3%, subscribed to UPC's basic video services as of
this date or subsequent acquisition date. UPC has majority ownership or
substantial ownership stakes in all of its Western European systems. These
Western European systems passed approximately 4.5 million homes and had
approximately 3.0 million subscribers as of June 30, 1999. UPC also has
majority ownership of most of its systems outside Western Europe.

In UPC's Western European markets, UPC is upgrading its existing network to
"two-way" transmission capability. This upgrading enables UPC to provide
digital video, telephone and Internet/data services. As of June 30, 1999, the
upgraded parts of UPC's existing networks in Austria, Belgium, France, Norway
and The Netherlands passed about 67% of the approximately 3.1 million homes
passed by those networks and UPC anticipates that by the end of 1999, upgraded
systems will pass 87% of homes in those service areas. UPC has also begun to
upgrade its Central and Eastern European systems. At June 30, 1999, UPC's
Western European systems served approximately 27,000 cable telephone lines and
had approximately 52,675 high speed Internet access subscribers. In UPC's non-
Western European markets, UPC is primarily focused on increasing its subscriber
base and its revenue per subscriber chiefly through marketing, superior
programming and, in some cases, the introduction of new and expanded video
services.

Asia/Pacific Operations

We are a leading provider of multi-channel television services in Australia
and the Asia/Pacific region, with multi-channel television systems in
Australia, New Zealand, the Philippines and Tahiti. Our primary Asia/Pacific
operations are conducted through Austar United. We own approximately 74% of
Austar United, which is publicly traded on the Australian Stock Exchange. Since
launching operations in 1995, Austar United has grown rapidly to over 340,000
subscribers as of June 30, 1999. Austar United has three core businesses
positioned in the growing media and broadband communications industry:

. AUSTAR Entertainment. AUSTAR is the second largest pay television
operator in Australia and the largest operator in its market of regional
Australia. Its service area comprises approximately 2.1 million homes
outside of the major capital cities and represents one-third of
Australia's total homes. AUSTAR is the sole provider of pay television
services to substantially all of its market area primarily using digital
satellite technology. At June 30, 1999, AUSTAR had a total of
approximately 329,000 subscribers. AUSTAR is the only operator in
Australia to provide subscribers with all the available premium sports
and movie programming in Australia. In addition, Austar United owns 50%
of the only satellite platform delivering pay television services in
Australia.

14
<PAGE>

. XYZ Entertainment. XYZ is the exclusive owner and/or distributor of five
key programming channels in Australia to AUSTAR and Foxtel, Australia's
two largest pay television operators whose combined subscriber bases
represent approximately 80% of all pay television subscribers in
Australia. XYZ is 50% owned by Austar United and 50% owned by Foxtel.
Ownership of XYZ gives us an important strategic position in the
Australian pay television industry. As of June 30, 1999, XYZ provided
programming to approximately 800,000 customers.

. Saturn Communications. Saturn is the only provider of integrated
telephone, pay television and Internet services in New Zealand. Saturn
currently provides these services in Wellington over a hybrid fiber
coaxial cable network with an overlay of traditional telephone lines.
Saturn commercially launched bundled services in April 1998 and as of
June 30, 1999, subscribers to its services had grown to over 29,700. As
of the same date, Saturn's network had approximately 72,000 serviceable
homes. Eighty percent of Saturn's customers subscribe to more than one
service. Saturn is the only full service provider of telecommunications
services competing against the incumbent telephone provider in providing
local telephone services in Wellington.

Latin American Operations

We own interests in and operate multi-channel television distribution and
telecommunications systems in Chile, Brazil, Mexico and Peru. As of June 30,
1999 our Latin American systems passed an aggregate of approximately 2.3
million television homes and had approximately 489,000 subscribers.

Our largest operation in Latin America is our Chilean operation, VTR.
Through VTR, we are the largest provider of wireline cable television services
and a growing provider of telephone services in Chile. We have an estimated 56%
market share of the cable television services market throughout Chile and an
estimated 38% market share within Santiago, Chile's largest city. In 1998, we
began the wide-scale roll-out of residential cable telephone service in six
communities contained within Santiago and one major city outside Santiago and
are currently expanding our efforts to include additional areas throughout
Chile.

As of June 30, 1999, our VTR systems passed approximately 1.6 million homes
throughout Chile and approximately 391,000 homes subscribed to our cable
television services. As of June 30, 1999, approximately 300,000 of our cable
homes passed were capable of using our telephone services and approximately
43,400 homes subscribed to these services.

Recent and Planned Acquisitions

Since March 31, 1999, we and our subsidiaries have completed, or agreed to
make the following transactions. Many of the acquisitions which have not closed
are subject to a number of conditions and requirements, including execution of
definitive agreements, regulatory approvals and financings, that may not be
satisfied or obtained. We cannot assure you that these acquisitions will close.

Europe (UPC):

GelreVision Acquisition. In June 1999, UPC acquired 100% of the GelreVision
multi-channel television systems in The Netherlands, for a purchase price of
approximately $109.8 million. The acquisition increased UPC's homes passed by
145,175 and its subscriber base by approximately 132,000, based on June 30,
1999 data. The GelreVision systems are contiguous to certain of UPC's other
systems in The Netherlands.

Bratislava System Acquisition. In June 1999, UPC completed the acquisition
of SKT spol.s.r.o., which operates a cable television system in the capital
city of Bratislava, Slovakia. The purchase price was approximately $43.25
million. This system had approximately 157,675 subscribers as of June 30, 1999.
This acquisition complements UPC's existing Czech and Slovak systems and
enables UPC to leverage its existing management and systems as it continues to
build out its network in these areas.

15
<PAGE>

RCF Acquisition. In June 1999, UPC acquired 95.7% of Reseaux Cables de
France, the fifth largest cable television operation in France. The systems had
approximately 74,260 subscribers as of June 30, 1999.

Stjarn Acquisition. In July 1999, UPC acquired StjarnTVnatet AB. The
purchase price was approximately $397.0 million. Stjarn operates cable
television systems serving the greater Stockholm area and leases its fiber
optic network which has access to approximately 770,000 homes and approximately
30,000 businesses.

@Entertainment Acquisition. In August 1999, UPC acquired 100% of
@Entertainment through a tender offer and subsequent merger. @Entertainment
provides cable television, DTH satellite television services and related
programming services in Poland. @Entertainment's systems had approximately
1,669,375 homes passed, approximately 966,750 cable subscribers and
approximately 146,075 DTH subscribers as of June 30, 1999. The purchase price
was approximately $807.0 million and UPC assumed approximately $382.5 million
of @Entertainment's debt.

SBS Strategic Investment. In August 1999, UPC completed the acquisition of
13.3% of SBS Broadcasting, S.A., which owns and operates television and radio
broadcasting stations across nine countries in Europe. The purchase price was
approximately $100.2 million.

A2000 Acquisition. In September 1999, UPC acquired the 50% interest in A2000
that it did not already own for approximately $229.0 million, exclusive of
assumed debt. At closing, UPC began consolidating A2000's debt, which was
approximately $234.8 million as of June 30, 1999.

Kabel Plus Acquisition. In June 1999, UPC agreed to acquire 94.6% of Kabel
Plus, which owns and operates cable television and telephone systems in the
Czech and Slovak Republics. Kabel Plus had approximately 359,000 subscribers as
of June 30, 1999. The purchase price is approximately $150.0 million and UPC
will assume $22.8 million of Kabel Plus debt. The acquisition is expected to
close in October 1999, following regulatory and anti-monopoly approval.

Time Warner Cable France Acquisition. In August 1999, UPC purchased Time
Warner Cable France, a company that controls and operates three cable
television systems in the suburbs of Paris and Lyon and in the city of Limoges.
The systems passed approximately 232,325 homes, and had approximately 69,425
subscribers as of June 30, 1999. The total purchase price was approximately
$71.0 million.

Videopole Acquisition. In August 1999, UPC acquired 100% of Videopole,
France's fourth largest cable television operation. The Videopole systems had
approximately 141,475 subscribers as of June 30, 1999.

Asia/Pacific (Austar United):

Saturn Acquisition. In connection with Austar United's initial public
offering, it acquired the 35% of Saturn that it did not own in exchange for
shares of Austar United's common stock, valued at approximately $42.5 million.
The acquisition closed immediately prior to the closing of Austar United's
initial public offering.

Latin America

VTR Acquisition. In April 1999, we acquired the remaining 60% interest in
VTR that we then did not own for approximately $258.2 million. VTR had
approximately 391,000 video subscribers as of June 30, 1999 and has a growing
cable telephone business. In connection with this acquisition and refinancing
of all of VTR's indebtedness, we issued approximately $208.9 million of
indebtedness and VTR issued approximately $145.0 million of indebtedness.

16
<PAGE>

DESCRIPTION OF THE DEPOSITARY SHARES

The summary contained herein of the terms of the depositary shares does not
purport to be complete and is subject to and qualified in its entirety by
reference to all of the provisions of the deposit agreement and the depositary
receipts, copies of which may be obtained from us or the Depositary at the
principal office of the Depositary at which its depositary business shall be
administered upon request.

General

Each depositary share represents one-twentieth of a share of 7% Series C
Senior Cumulative Convertible Preferred Stock deposited under the Deposit
Agreement, dated July 6, 1999, among us, Firstar Bank of Minnesota, N.A., as
depositary (the "Depositary"), and all holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the deposit agreement, each
owner of a depositary share is entitled, in proportion to the applicable
fraction of a share of preferred stock represented by such depositary share, to
all the rights and preferences of the preferred stock represented thereby
(including dividend, voting, redemption, conversion and liquidation rights) and
subject, proportionately to all of the limitations of the preferred stock
represented thereby, contained in the Certificate of Designation summarized
under "Description of the Preferred Stock."

The depositary shares are evidenced by depositary receipts issued pursuant
to the deposit agreement. Immediately following the issuance and delivery of
the preferred stock by us to the initial purchasers, the initial purchasers
deposited the preferred stock with the Depositary, which then issued the
depositary shares to the initial purchasers in the preferred stock placement.
Depositary receipts will be issued evidencing only whole depositary shares. DTC
has accepted the depositary receipts for its book-entry settlement system.

Pending the preparation of definitive engraved depositary receipts, the
Depositary may issue temporary depositary receipts substantially identical to
(and entitling the holders thereof to all the rights pertaining to) the
definitive depositary receipts but not in definitive form. Definitive
depositary receipts will be prepared thereafter and will be exchangeable for
temporary depositary receipts at the Depositary's expense.

In our discretion, no fractional shares of common stock or securities
representing fractional shares of common stock will be issued upon conversion,
redemption, change of control or in connection with dividend payments. Any
fractional interest in a share of common stock will be paid in cash based on
the Closing Price of the common stock on the Trading Day next preceding the
date of conversion or such later time as we are legally and contractually able
to purchase such fractional shares.

Dividends and Other Distributions

The Depositary will distribute all cash and common stock distributions and
other distributions received in respect of the preferred stock for dividends
and otherwise to the record holders of depositary shares in proportion to the
number of such depositary shares owned by such holders.

In the event of a distribution other than in cash or common stock, the
Depositary will distribute property received by it to the record holders of
depositary shares entitled thereto, unless the Depositary determines that it is
not feasible to make such distribution, in which case the Depositary may sell
such property and distribute the net proceeds from such sale to such holders.

Record Date

Whenever:

. any dividend or other cash distribution becomes payable, any distribution
other than cash is made, or any rights, preferences or privileges are at
any time offered with respect to the preferred stock, or

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. the Depositary receives notice of any meeting at which holders of
preferred stock are entitled to vote or of which holders of preferred
stock are entitled to notice or any solicitation of consents in respect
of the preferred stock, or any call of any preferred stock, or if at any
time the Depositary and we otherwise deem it appropriate,

the Depositary will in each such instance fix a record date (which shall be the
same date as the record date for the Preferred Stock) for the determination of
the holders of depositary receipts who are entitled to:

. receive such dividend, distribution, rights, preferences or privileges or
the net proceeds of the sale thereof;

. receive notice of, and give instructions for the exercise of voting
rights at any such meeting, or otherwise; or

. receive notice of any such call, subject to the provisions of the deposit
agreement.

Withdrawal of Preferred Stock

Upon surrender of the depositary receipts at the corporate trust office of
the Depositary, or such other office as the Depositary may designate, unless
the related depositary shares have been previously called for redemption, the
holder of the depositary shares evidenced thereby is entitled to delivery at
such office to or upon his order of the number of whole shares of preferred
stock and any money or other property represented by such depositary shares or
cash in lieu of fractional shares. Holders of depositary shares will be
entitled to receive whole shares of preferred stock on the basis of one share
of preferred stock for each twenty depositary shares, but holders of such whole
shares of preferred stock will not thereafter be entitled to receive depositary
shares in exchange therefor. If the depositary receipts delivered by the holder
evidence a number of depositary shares in excess of the number of depositary
shares representing the number of whole shares of preferred stock to be
withdrawn, the Depositary will deliver to such holder at the same time a new
depositary receipt evidencing such excess number of depositary shares. We do
not expect that there will be any public trading market for the preferred stock
except as represented by the depositary shares.

Redemption or Conversion of Depositary Shares

As described under "Description of the Preferred Stock--Optional Redemption"
and "--Conversion Rights," the preferred stock is subject to our right to
redeem the preferred stock for cash or common stock at any time on or after
June 30, 2002 and the holder's right at any time to convert the preferred stock
into common stock at its option. The depositary shares are subject to
redemption or conversion upon the same terms and conditions (including as to
notice to the owners of depositary shares and as to selection of depositary
shares to be called if fewer than all of the outstanding depositary shares are
to be called) as the preferred stock held by the Depositary using the common
stock received by the Depositary, except that the number of shares of common
stock received upon conversion of each depositary share will be equal to one-
twentieth of the number of shares of common stock received upon conversion of
each share of the preferred stock. To effect a conversion at the option of the
holder, a holder of depositary shares must deliver depositary receipts
evidencing the depositary shares to be converted, together with written notice
of conversion and a proper assignment of the depositary receipts to us, to any
transfer agent for the depositary shares, or in blank, to the Depositary or its
agent. Each optional conversion of depositary shares shall be deemed to have
been effected immediately prior to the close of business on the date on which
the foregoing requirements have been satisfied. To the extent that depositary
shares are converted into shares of common stock and all such shares of common
stock cannot be distributed to the record holders of depositary receipts
without creating fractional interests in such shares, we will cause the
Depositary to distribute cash to holders in lieu of fractional shares as
provided above under "Description of the Depositary Stock--General." The amount
distributed in the foregoing case will be reduced by any amount required to be
withheld by us or the Depositary on account of taxes or otherwise required
pursuant to law, regulation or court process.

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Payment and Conversion

All amounts payable in cash with respect to the depositary shares will be
payable in United States dollars at our office or agency maintained for such
purpose with the City of New York or, at our option, payment of dividends,
Quarterly Return Amounts (as defined) and Liquidated Damages (if any) will be
made by check mailed to the holders of the depositary shares at their
respective addresses set forth in the register of holders of the depositary
shares maintained by the Transfer Agent, provided that all cash payments with
respect to depositary shares in global form or the holders of which have given
wire transfer instructions to us will be required to be made by wire transfer
in immediately available funds to the accounts specified by the holders
thereof.

Any payment on the depositary shares due on any day that is not a Business
Day need not be made on such day, but may be made on the succeeding Business
Day with the same force and effect as if made on such due date.

Voting of Preferred Stock

Upon receipt of notice of any meeting at which holders of preferred stock
are entitled to vote or upon receipt of any written consent to which holders of
preferred stock are entitled to give their consent, the Depositary will mail
the information contained in such notice of meeting or consent to the record
holders of the depositary shares relating to preferred stock. Each record
holder of such depositary shares on the record date (which will be the same
date as the record date of the preferred stock) will be entitled to instruct
the Depositary as to the exercise of the voting rights pertaining to the amount
of shares of preferred stock represented by such holder's depositary shares.
The Depositary will use best efforts insofar as practicable, to vote the amount
of shares of preferred stock represented by such depositary shares in
accordance with such instructions and we will agree to take all reasonable
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting preferred stock to
the extent it does not receive specific instructions from the holders of
depositary shares representing preferred stock.

Each depositary share entitles the holder thereof to instruct the Depositary
to cast one-twentieth of a share of preferred stock vote on each matter
submitted to a vote of holders of preferred stock. See "Description of the
Preferred Stock--Voting Rights."

Amendment and Termination of the Deposit Agreement

The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the Depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares (or, which
relates to or affects rights to receive dividends or distributions, or voting
or redemption rights) will not be effective unless such amendment has been
approved by the holders of at least 66 2/3% of the depositary shares then
outstanding. In no event may any amendment impair the right of any holder of
depositary receipts, subject to the conditions specified in the deposit
agreement, upon such surrender of the depositary receipts evidencing such
depositary shares, to receive shares of preferred stock or upon conversion of
the preferred stock represented by the depositary receipts, to receive shares
of common stock, and in each case any money or other property represented
thereby, including any accumulated dividends and return of Liquidation
Preference, except in order to comply with mandatory provision of applicable
law. Every holder of depositary receipts at the time any such amendment becomes
effective shall be deemed to consent and agree to such amendment and to be
bound by the deposit agreement.

The deposit agreement may be terminated by us or the Depositary only if:

. all outstanding depositary shares have been redeemed or converted;

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. there has been a final distribution in respect of the preferred stock in
connection with any liquidation, dissolution or winding up of us and such
distribution has been distributed to the holders of depositary receipts;
or

. upon consent of holders of depositary receipts representing not less than
66 2/3% of the depositary shares then outstanding.

Whenever the deposit agreement has been terminated pursuant to the last
bullet point of the preceding paragraph, the Depositary will mail notice of
such termination to the record holders of all depositary receipts then
outstanding at least 30 days prior to the date fixed in such notice for such
termination. The Depositary may likewise terminate the deposit agreement if at
any time 90 days shall have expired after the Depositary shall have delivered
to us a written notice of its election to resign and a successor depositary
shall not have been appointed and accepted its appointment. If any depositary
receipts remain outstanding after the date of termination, the Depositary
thereafter will discontinue the transfer of depositary receipts, will suspend
the distribution of dividends to the holders thereof, and will not give any
further notices (other than notices of such termination) or perform any further
acts under the deposit agreement except as provided below and except that the
Depositary will continue to:

.collect dividends on the preferred stock and any other distributions with
respect thereto, and

. deliver the preferred stock together with such dividends and
distributions and the net proceeds of any sales of rights, preferences,
privileges or other property, without liability for interest thereon, in
exchange for depositary receipts surrendered.

At any time after the expiration of three years from the date of
termination, the Depositary may sell the preferred stock then held by it at
public or private sales, at such place or places and upon such terms as it
deems proper and may thereafter hold the net proceeds of any such sale,
together with any money and other property then held by it, without liability
for interest thereon, for the pro rata benefit of the holders of depositary
receipts which have not been surrendered.

We do not intend to terminate the deposit agreement or to permit the
resignation of the Depositary without appointing a successor Depositary.

Charges of Depositary

We will pay all transfer and other governmental charges arising solely from
the existence of the depositary arrangements. We will pay charges of the
Depositary in connection with the initial deposit of the preferred stock, and
any redemption of such preferred stock. Holders of depositary receipts will pay
transfer and other taxes and governmental charges and such other charges as are
expressly provided in the deposit agreement to be for their accounts. The
Depositary may refuse to effect any transfer of a depositary receipt or any
withdrawal of preferred stock evidenced thereby until all such taxes and
charges with respect to such depositary receipt or such preferred stock are
paid by the holder thereof.

Miscellaneous

The Depositary will forward to holders of preferred stock all reports and
communications from us which are delivered to the Depositary and which we are
required to furnish to the holders of preferred stock.

Neither the Depositary nor we will be liable if it is prevented or delayed
by law or any circumstances beyond its control in performing its obligations
under the deposit agreement. Our obligations and those of the Depositary under
the deposit agreement will be limited to performance in good faith of their and
our duties thereunder and neither we nor the Depositary will be obligated to
prosecute or defend any legal proceeding in respect of any depositary shares or
preferred stock unless satisfactory indemnity is furnished. They may rely on
written advice of counsel or accountants, or information provided by persons
presenting preferred stock for deposit, holders of depositary shares or other
persons believed to be competent and on documents believed to be genuine.

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Resignation and Removal of Depositary

The Depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the Depositary. Any such
resignation or removal of the Depositary will take effect upon the appointment
of a successor Depositary, which successor Depositary must be appointed within
45 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50.0 million.

Book Entry; The Depository Trust Company

The Depository Trust Company ("DTC") acts as securities depository for the
depositary shares. The depositary shares were issued only as fully-registered
securities registered in the name of Cede & Co. (as nominee for DTC). Fully
registered global securities were issued, representing in the aggregate the
total number of shares of depositary shares, and were deposited with DTC.

The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in depositary shares represented
by a global security.

DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants").

Purchasers of depositary shares within the DTC system must be made by or
through Direct Participants, which will receive a credit for the depositary
shares on DTC's records. The ownership interest of each actual purchaser of a
depositary share ("Beneficial Owner") is in turn to be recorded on the Direct
or Indirect Participant's records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners purchased the depositary shares. Transfers
of ownership interests in the depositary shares are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Depositary Shares, except upon a resignation of DTC
or upon a decision by us to discontinue the book-entry system of the Depositary
Shares.

To facilitate subsequent transfers, all the depositary shares deposited by
Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of the depositary shares with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the depositary shares; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such depositary shares are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.

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<PAGE>

Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.

Redemption notices with respect to the depositary shares shall be sent to
Cede & Co. If less than all of the depositary shares are being redeemed, DTC's
practice is to determine by lot the amount on the interest of each Direct
Participant in such securities to be redeemed.

Although voting with respect to the depositary shares is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself consent
or vote with respect to the depositary shares. Under its usual procedures, DTC
would mail an "Omnibus Proxy" (i.e., a proxy conferring on Direct Participants
the right to vote as their interests appear) to the Direct Participants as soon
as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Depositary Shares are credited on the record date (identified in a listing
attached to the Omnibus Proxy). We believe that the arrangements among DTC,
Direct and Indirect Participants and Beneficial Owners will enable the
Beneficial Owners to exercise rights equivalent in substance to the rights that
can be directly exercised by a Direct Participant.

Cash distribution payments and distribution payments in shares of common
stock on the shares of Preferred Stock represented by the depositary shares
will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on the relevant payment date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to Beneficial owners
will be governed by standing instructions and customary practices, as is the
case with securities held for the account of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant
and not of DTC or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of distributions to
DTC is the responsibility of the Company, disbursement of such payments to
Direct Participants is the responsibility of DTC and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.

Except as provided herein, a Beneficial Owner in the Global Securities will
not be entitled to receive physical delivery of the depositary shares.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the depositary shares, including elections as to form
of payment.

DTC may discontinue providing its services as securities depositary with
respect to the depositary shares at any time by giving reasonable notice to us.
Under such circumstances, in the event that a successor securities depositary
is not obtained, certificates representing the depositary shares will be
printed and delivered. If we decide to discontinue use of the system of book-
entry transfers through DTC (or a successor depositary), certificates
representing the depositary shares will be printed and delivered.

The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy thereof.

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DESCRIPTION OF THE PREFERRED STOCK

General

As of August 2, 1999, we had outstanding 31,643,794 shares of Class A Common
Stock (excluding 2,784,620 issued and outstanding shares held by UPC),
9,661,970 shares of Class B Common Stock, 116,764 shares of Series B
Convertible Preferred Stock and 425,000 shares of preferred stock registered
hereby.

Each depositary share represents 1/20th of a share of preferred stock, par
value $.01 per share. The holders of the preferred stock will have no
preemptive rights with respect to any shares of our capital stock or any of our
other securities that are convertible into or carrying rights or options to
purchase any such shares. The preferred stock is fully paid and nonassessable.

The transfer agent, registrar, redemption, conversion and dividend
disbursing agent for shares of the preferred stock will initially be Firstar
Bank of Minnesota, N.A. (the "Transfer Agent"). The Transfer Agent will send
notices to stockholders of any special meetings at which holders of the
Preferred Stock have the right to vote. See "--Voting Rights" below.

Set forth below is a description of the terms of the preferred stock and the
Deposit Account and the circumstances under which holders of shares of
preferred stock may be expected to receive payments from the Deposit Account.
The following summaries of the preferred stock and the Deposit Account do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, the provisions of the Second Restated Certificate of
Incorporation, as amended, and the Deposit Account Agreement (as defined
below).

Certain Definitions

"Closing Price" for each day shall be the last sales price or in case no
such reported sales take place on such day, the average of the last reported
bid and asked price, in either case on the principal U.S. national securities
exchange on which the shares of our common stock are admitted to trading or
listed, or if not listed or admitted to trading on such exchange, the
representative closing bid price as reported by the Nasdaq National Market, or
if the Nasdaq National Market(R) is no longer reporting such information, or if
not so available, the fair market price as determined, in good faith, by our
Board of Directors.

"Market Value" means, as of any date, the average of the daily Closing Price
(as defined) for the five consecutive Trading Days (as defined) ending on such
date.

"Notice Date" means the tenth day prior to a Deposit Payment Date.

"Trading Day" shall mean any business day on which the Nasdaq National
Market (or any U.S. national securities exchange or quotation system on which
the Common Stock is then listed) is open for the transaction of business.

Ranking

The preferred stock ranks senior to our common stock, pari passu to our
Series B Convertible Preferred Stock and senior to or pari passu with other
future offerings of preferred stock.

The Certificate of Designation provides that we may not, without the consent
of the holders of at least 66 2/3% of the outstanding shares of preferred
stock, authorize, create (by way of reclassification or otherwise) or issue any
class or series of our capital stock ranking senior to the preferred stock
("Senior Securities") or any obligation or security convertible or exchangeable
into or evidencing a right, option or warrant to purchase shares of any class
or series of Senior Securities.

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Securities Account

Simultaneously with the closing of the Preferred Stock Placement, the
initial purchasers of the depositary shares deposited approximately $29.8
million into the Securities Account. Holders of preferred stock are entitled to
a quarterly return amount from the Securities Account in an amount equal to
$0.8750 per depositary share (equivalent to $17.50 per share of preferred
stock) commencing September 30, 1999 and through and including June 30, 2000
(the "Quarterly Return Amount"). Beginning on July 1, 2000 dividends will begin
to accumulate on the preferred stock. We may, prior to any date on which a
Quarterly Return Amount would otherwise be payable, deliver notice instructing
the Depositary to purchase from us, for transfer to each holder of Depositary
Shares, in lieu of all or a portion of the Quarterly Return Amount, that number
of whole shares of common stock determined by dividing the Quarterly Return
Amount to be satisfied with shares of common stock by:

(A) 97% of the Market Value (as defined) of the common stock, if a shelf
registration statement registering the resale of such shares is
effective or the shares of common stock are eligible for resale
pursuant to Rule 144(k) under the Securities Act, or

(B) 93% of the Market Value of the common stock (clauses (A) and (B) are
collectively referred to as the "Market Value Amount")

as of the date of such notice. Any amounts remaining in the Securities Account
on June 30, 2000 after payment of all Quarterly Return Amounts will promptly be
remitted to us by the Depositary.

The funds deposited in the Securities Account will be invested in U.S.
government obligations or U.S. government guaranteed obligations, which,
together with the earnings thereon will be sufficient to pay the aggregate
Quarterly Return Amounts.

Unless on or prior the Notice Date (as defined), we shall have delivered to
the Depositary a Direction Notice (as defined), the Depositary will deliver to
each holder of depositary shares the Quarterly Return Amount on March 31, June
30, September 30 and December 31 of each year (each such date being a "Deposit
Payment Date"), commencing on September 30, 1999 and continuing through and
including June 30, 2000 (the "Deposit Expiration Date"). If we shall have
delivered a direction notice to the Depositary (a "Direction Notice") on or
prior to the Notice Date, the Depositary shall, as instructed by us in such
Direction Notice, purchase from us, for delivery to each holder of depositary
shares in lieu of all or a portion of the Quarterly Return Amount on the
applicable Deposit Payment Date, that number of whole shares of common stock
determined by dividing such Quarterly Return Amount by the Market Value Amount
as of the Notice Date. At the written request of the Depositary, we have agreed
under the terms of the deposit agreement governing the Securities Account (the
"Securities Account Agreement") to deliver, for and on behalf of the
Depositary, the shares of common stock acquired by the Depositary directly to
holders of depositary shares.

In the event of any conversion of the depositary shares prior to the Deposit
Payment Date, we shall immediately after such conversion be paid any funds
remaining in the Securities Account allocable to the Depositary Shares so
converted. Such allocation shall be made pro rata based upon the number of
depositary shares so converted.

On the Deposit Expiration Date after distributing all Quarterly Return
Amounts, the Securities Account Agreement requires the Deposit Agent to deliver
to us any cash remaining in the Securities Account on such date and terminate
the Securities Account.

As a result of the foregoing, holders of Preferred Stock who have not
converted their preferred stock as of the Deposit Expiration Date will receive
through, and including such Deposit Expiration Date, cash distributions or
shares of common stock or a combination thereof in an aggregate amount or value
deemed at least equal to $3.50 for each depositary share ($70.00 per share of
Preferred Stock) held by such holder.

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Dividends

Holders of the preferred stock are entitled to receive cumulative dividends
at an annual rate of 7% of the Liquidation Preference (equivalent to $17.50 per
share of preferred stock or $0.8750 for each depositary share), payable
quarterly out of assets legally available therefor on March 31, June 30,
September 30 and December 31 of each year, when, as and if declared by the
Board of Directors, commencing September 30, 2000. Dividends will accumulate
from July 1, 2000. Dividends, to the extent declared by our Board, may, at our
option, be paid in cash or by delivery of fully paid and nonassessable shares
of our Common Stock or a combination thereof. Dividends will be payable to
holders of record as they appear on our stock register on such record dates,
not more than 60 days or less than 10 days preceding the payment dates thereof,
as shall be fixed by our Board of Directors. Dividends payable on the preferred
stock (and the corresponding depositary shares) for each full dividend period
will be computed by dividing the annual dividend rate by four; dividends for
any period less than a full dividend period will be computed on the basis of a
360-day year consisting of twelve 30-day months. The preferred stock (and the
corresponding depositary shares) will not be entitled to any dividends, whether
payable in cash, property or securities, in excess of the full cumulative
dividends. No interest, or sum of money in lieu of interest, will be payable in
respect of any accumulated and unpaid dividends.

If we elect to pay dividends in shares of common stock, the number of shares
of common stock to be distributed will be calculated by dividing such payment
by the Market Value Amount as of the dividend payment record date.

No dividends or distributions (other than a dividend or distribution in our
stock ranking junior to the preferred stock in right of payment as to dividends
and upon liquidation, dissolution or winding up) may be declared, made or paid
or set apart for payment upon any of our stock ranking junior to or pari passu
with the preferred stock in right of payment as to dividends, nor may any of
our stock ranking junior to or pari passu with the preferred stock as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any monies paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by us (except by conversion
into or exchange for our stock ranking junior to the preferred stock as to
dividends and upon liquidation and in the case that monies for such dividends,
distributions, redemptions, purchases, or other acquisitions are derived from
the proceeds of a substantially concurrent offering of such securities) unless
full cumulative dividends have been or contemporaneously are paid or declared
and a sum sufficient for the payment thereof is set apart for such payment on
the preferred stock for all dividend payment periods terminating on or prior to
the date of such declaration, payment, redemption, purchase or acquisition.

Notwithstanding the foregoing, if full dividends have not been declared and
paid or set apart on the preferred stock and any other preferred stock ranking
pari passu with the preferred stock as to dividends, dividends may be declared
and paid on the preferred stock and such other pari passu preferred stock so
long as the dividends are declared and paid pro rata so that the amounts of
dividends declared per share on the preferred stock and such other pari passu
preferred stock will in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the shares of the preferred stock and
such other preferred stock bear to each other; provided, that if such dividends
are paid in cash on the other pari passu preferred stock, dividends will also
be paid in cash on the preferred stock.

The holders of shares of preferred stock (and the corresponding depositary
shares) at the close of business on a dividend payment record date will be
entitled to receive the dividend payment on those shares (except that holders
of shares called for redemption or conversion on a redemption or conversion
date between the record date and a date which is two days after payment of the
dividend payment date will be entitled to receive such dividend on such
redemption date as indicated under "--Optional Redemption" or such conversion
date as indicated under "--Conversion Rights," as the case may be) on the
corresponding dividend payment date notwithstanding the subsequent conversion
thereof or our default in payment of the dividend due on the dividend payment
date. Except as provided in the immediately preceding sentence and under the
heading "--Conversion Rights", we will make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the shares of common stock issued upon conversion.

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<PAGE>

Our ability to declare and pay cash dividends and make other distributions
with respect to our capital stock, including the preferred stock (and the
corresponding depositary shares), is limited by provisions contained in various
financing agreements and indentures which restrict dividend payments to us by
its subsidiaries and which restrict the payment of cash dividends by us or any
of our subsidiaries on their respective equity securities. Similarly, our
ability to declare and pay dividends may be limited by applicable Delaware law.
As a result of these factors, we do not expect to pay cash dividends on the
preferred stock for the forseeable future. We expect Quarterly Return Amounts
to be paid in shares of common stock rather than in cash. See "Risk Factors--We
are restricted from paying cash dividends and from redeeming the preferred
stock; we could also be prevented from paying dividends on shares of our common
stock."

Liquidation Preference

The shares of preferred stock have a liquidation preference (the
"Liquidation Preference") equal to $1,000 per share (or $50 per Depositary
Share).

If upon any voluntary dissolution, liquidation or winding up of us, the
amounts payable with respect to the liquidation preference of the preferred
stock and any of our other shares ranking as to any such distribution pari
passu with the preferred stock are not paid in full, the holders of the
preferred stock (and corresponding depositary shares) and of such other shares
will share pro rata in proportion to the full distributable amounts to which
they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of the preferred stock
(and corresponding depositary shares) will have no right or claim to any of our
remaining assets. Neither the sale of all or substantially all of our property
or business (other than in connection with the winding up of its business), nor
the merger or consolidation of us into or with any other corporation, will be
deemed to be dissolution, liquidation or winding up of us. In the event of any
voluntary or involuntary dissolution, liquidation or winding up of us, the
Deposit Agent will be required to return to the holders of the preferred stock
(and corresponding depositary shares) any funds at the time remaining in the
Deposit Account.

Optional Redemption

The preferred stock (and corresponding depositary shares) are not subject to
any sinking fund or similar provisions. The preferred stock (and corresponding
depositary shares) may not be redeemed prior to June 30, 2002. On or after June
30, 2002, the preferred stock (and corresponding depositary shares) may be
redeemed, in whole or in part, at our option, in cash, by delivery of fully
paid and nonassessable shares of common stock or any combination thereof, upon
not less than 20 days' notice nor more than 60 days' notice, during the twelve-
month periods commencing on June 30 of the years indicated below, at the
following redemption prices per depositary share, plus in each case all
accumulated and unpaid dividends to the redemption date plus any accrued but
unpaid liquidated damages:

<TABLE>
<CAPTION>
Redemption
Price per
Depositary
Year Share
---- ----------
<S> <C>
2002.............................................................. $52.00
2003.............................................................. $51.50
2004.............................................................. $51.00
2005.............................................................. $50.50
2006 and thereafter............................................... $50.00
</TABLE>

In the event that fewer than all the outstanding shares of the preferred
stock (and corresponding depositary shares) are to be redeemed, the shares to
be redeemed will be determined pro rata or by lot. If we elect to make any
redemption payments in shares of common stock, the number of shares of common
stock to be distributed will be calculated by dividing such payment by the
Market Value Amount as of the redemption notice date.

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<PAGE>

From and after the applicable redemption date (unless we are then in default
of payment of the redemption price), dividends on the shares of the preferred
stock (and corresponding depositary shares) to be redeemed on such redemption
date shall cease to accumulate, such shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as our preferred stock
holders (except the right to receive the redemption price and accumulated
dividend amounts and liquidation penalties, if any through the reduction date)
will cease.

If any dividends on the preferred stock are in arrears, no shares of the
preferred stock (and corresponding depositary shares) will be redeemed unless
all dividends in arrears are paid or all outstanding shares of the preferred
stock (and corresponding depositary shares) are simultaneously redeemed.

Voting Rights

Except as required by law, holders of the preferred stock (and corresponding
depositary shares) have no voting rights except as set forth below. Under
Delaware law, holders of the preferred stock will be entitled to vote as a
class upon a proposed amendment to our certificate of incorporation or the
Certificate of Designation, whether or not entitled to vote thereon by the
Certificate of Designation, if the amendment would alter or change the powers,
preferences, or special rights of the shares of such class so as to affect them
adversely. If the dividends or Quarterly Return Amounts payable on the
preferred stock are in arrears for six quarterly periods, the holders of the
preferred stock voting separately as a class with the shares of any other
preferred stock preference securities having similar voting rights will be
entitled at the next regular or special meeting of our stockholders to elect
two directors to our Board of Directors (such voting rights will continue only
until such time as the dividend arrearage on the preferred stock has been paid
in full).

The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding preferred stock will be required for the issuance of any class or
series of our stock (or security convertible into stock or evidencing a right
to purchase any shares of any class or series of stock) ranking senior to the
preferred stock as to dividends, liquidation rights or voting rights and for
amendments to our Second Restated Certificate of Incorporation, as amended to
date, that would affect adversely the rights of holders of the Preferred Stock,
including, without limitation,

. any increase in the authorized number of shares of all series preferred
stock in excess of 3,000,000 shares, and

. the issuance of any shares of preferred stock in excess of the number of
shares of such stock authorized in the Certificate of Designation thereof
as of the date of the original issuance of the preferred stock.

In all such cases each share of preferred stock shall be entitled to one vote.
Holders of Depositary Shares are entitled to direct voting of the shares of
Preferred Stock represented thereby.

Conversion Rights

Conversion at Option of Holders

Each outstanding share of the preferred stock (and corresponding depositary
shares) is convertible at any time at the option of the holder thereof into
such number of whole shares of Common Stock as is equal to the Liquidation
Preference represented by such shares divided by an initial conversion price of
$84.30, equivalent to 0.5931 shares of common stock per Depositary Share,
subject to adjustment as described below (such price as adjusted at the time of
determination being referred to as the "Conversion Price"). We must pay all
unpaid dividends on the preferred stock which have accumulated since the
Deposit Expiration Date to the last quarterly dividend payment date preceding
the date of conversion in cash or by issuing that whole number of shares of
common stock, equal to the amount of accumulated and unpaid dividends to be
paid in common stock divided by the Market Value Amount as of the conversion
date, plus cash for any fractional amounts, or by any combination thereof. A
share of preferred stock called for redemption will be convertible into shares
of common stock up to and including but not after the close of business on the
second business day prior to the date fixed for redemption unless we default in
the payment of the amount payable upon redemption.

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<PAGE>

Conversion at our Option

We have the option to convert all (but not less than all) of the shares of
preferred stock into shares of common stock at the then Conversion Price,
together with a payment equal to the sum of all accumulated but unpaid
dividends or Quarterly Return Amounts or liquidated damages, if any, through
the conversion date if, on or after, June 30, 2002, the Closing Price of our
common stock has equaled or exceeded 130% of the Conversion Price for at least
20 Trading Days within any 30 consecutive Trading Days. We may effect this
payment, at our option, in cash or by delivery of fully paid nonassessable
shares of common stock by issuing that whole number of shares of common stock
equal to the amount of such payment divided by the Market Value Amount, as of
the conversion date or by any combination thereof.

We also have the option to convert all (but not less than all) of the shares
of preferred stock into shares of common stock at the then Conversion Price,
plus accumulated and unpaid dividends or Quarterly Return Amounts or liquidated
damages, if any, whether or not declared, to the conversion date (the
"Provisional Conversion Date"), on or after December 31, 2000 (the "Provisional
Conversion"), if the closing price of the common stock has equaled or exceeded
150% of the Conversion Price for at least 20 Trading Days within any 30
consecutive Trading Day period. If we undertake a Provisional Conversion,
holders of preferred stock to whom we give notice of such Provisional
Conversion, will, in addition to the shares of common stock which they will
receive pursuant to the preceding sentence, also receive a payment (the
"Additional Payment") in an amount equal to the present value of the aggregate
amount of the dividends that would thereafter have been payable on the
preferred stock (whether or not declared) from the Provisional Conversion Date
to June 30, 2002 (the "Additional Period"). The present value will be
calculated using as the discount rate the bond equivalent yield on U.S.
Treasury notes or bills having a term nearest in length to that of the
Additional Period, calculated as of the day immediately preceding the date on
which a notice of Provisional Conversion is mailed. We may effect payment of
accumulated and unpaid dividends or Quarterly Return Amount or liquidated
damages or Additional Amounts, at our option, in cash or by delivery of fully
paid nonassessable shares of common stock by issuing that whole number of
shares of common stock equal to the amount of such payment divided by the
Market Value Amount as of the conversion date or by any combination thereof.

Upon the occurrence of an event specified above giving rise to our right to
cause a conversion of the preferred stock, and for so long as the conditions
giving rise to such right are continuing or within 10 days after the occurrence
thereof, if we elect to convert shares of preferred stock to common stock we
must give to holders of preferred stock a notice specifying:

.the date of such conversion (which date shall be the date of such notice);

.the Closing Price of the common stock as of the date of such notice;

. a statement that we are exercising our right to cause the mandatory
conversion and a brief description of the provisions of the preferred
stock conferring such right upon us;

.a brief summary of any transfer restrictions on the shares of common stock
issuable upon conversion;

.the approximate date and manner upon which shares of common stock will be
made available;

.the Conversion Price as of the date of the notice;

. the amount of accumulated but unpaid dividends, liquidated damages and
Quarterly Return Amounts, if any; and

. a statement that unless we default in delivery of the shares of common
stock into which such preferred stock has been converted, holders rights
as preferred stockholders shall cease as of the date of such notice and
holders shall thereafter have all rights as other holders of common
stock.

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<PAGE>

Conversion Price Adjustment

The Conversion Price is subject to adjustment (in accordance with formulas
set forth in the Certificate of Designation) in certain events, including:

. any payment of a dividend (or other distribution) payable in shares of
common stock to all holders of any class of our capital stock (other than
the issuance of shares of common stock in connection with the payment of
dividends on, redemption of or the conversion of the preferred stock or
any preferred stock pari passu to the preferred stock),

. any issuance to all holders of shares of common stock of rights, options
or warrants entitling them to subscribe for or purchase shares of our
common stock or securities convertible into or exchangeable for shares of
common stock at less than Market Value as of the date of conversion or
exchange; provided, however, that no adjustment shall be made with
respect to such a distribution if the holder of shares of preferred stock
would be entitled to receive such rights, options or warrants upon
conversion at any time of shares of preferred stock into common stock;
and, provided further, that if such rights, options or warrants are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur,

. any subdivision, combination or reclassification of any class of common
stock,

. any distribution consisting exclusively of cash (excluding any cash
distribution upon a merger or consolidation to which the second
succeeding paragraph applies) to all holders of shares of common stock in
an aggregate amount that, combined together with:

(A) all other such all-cash distributions made within the then-preceding
12 months in respect of which no adjustment has been made, and

(B) any cash and the fair market value of other consideration paid or
payable in respect of any tender offer by us or any of our
subsidiaries for shares of common stock concluded within the then-
preceding 12-months in respect of which no adjustment has been made,

exceeds 12.5% of our market capitalization (defined as the product of the
then-current market price of the common stock times the number of shares
of common stock then outstanding) on the record date of such
distribution,

. the completion of a tender or exchange offer made by us or any of our
subsidiaries for shares of any class of common stock that involves an
aggregate consideration that, together with:

(A) any cash and other consideration payable in a tender or exchange
offer by us or any of our subsidiaries for shares of any class of
common stock expiring within the then-preceding 12-months in respect
of which no adjustments have been made, and

(B) the aggregate amount of any such all-cash distributions referred to
in the preceding bullet point to all holders of shares of common
stock within the preceding 12-months in respect of which no
adjustments have been made,

exceeds 12.5% of our market capitalization just prior to the expiration
of such tender offer, or

. a distribution to all holders of common stock consisting of evidence of
indebtedness, shares of capital stock other than common stock or assets
(including securities, but excluding those dividends, rights, options,
warrants and distributions referred to above).

No adjustment of the Conversion Price will be required to be made until the
cumulative adjustments (whether or not made) amount to 1.0% or more of the
Conversion Price as last adjusted. We reserve the right to make such reductions
in the Conversion Price in addition to those required in the foregoing
provisions as we consider to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights will not be
taxable to the recipients. In the event we elect to make such a reduction in
the Conversion

29
<PAGE>

Price, we will comply with the requirements of Rule 14e-1 under the Exchange
Act, and any other securities laws and regulations thereunder if and to the
extent that such laws and regulations are applicable in connection with the
reduction of the Conversion Price.

In the event that we distribute rights or warrants (other than those
referred to in the second bullet point in the preceding paragraph) pro rata to
all holders of common stock, so long as any such rights or warrants have not
expired or been redeemed by us, the holder of any preferred stock surrendered
for conversion will be entitled to receive upon such conversion, in addition
to the shares of common stock then issuable upon such conversion (the
"Conversion Shares"), a number of rights or warrants to be determined as
follows:

. if such conversion occurs on or prior to the date for the distribution to
the holders of rights or warrants of separate certificates evidencing
such (the "Distribution Date"), the same number of rights or warrants to
which a holder of a number of shares of common stock equal to the number
of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions applicable to the rights or
warrants, and

. if such conversion occurs after such Distribution Date, the same number
of rights or warrants to which a holder of the number of shares of common
stock into which such preferred stock was convertible immediately prior
to such Distribution Date would have been entitled on such Distribution
Date in accordance with the terms and provisions of and applicable to the
rights or warrants. In the event the holders of the preferred stock are
not entitled to receive such rights or warrants, the Conversion Price
will be subject to adjustment upon any declaration or distribution of
such rights or warrants.

In case of any reclassification, consolidation or merger of us with or into
another person or any merger of another person with or into us (with certain
exceptions), or in case of any sale, transfer or conveyance of all or
substantially all of our assets (computed on a consolidated basis), each share
of preferred stock then outstanding will, without the consent of any holder of
preferred stock, become convertible only into the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or conveyance by a holder of the number
of shares of common stock into which such preferred stock was convertible
immediately prior thereto, after giving effect to any adjustment event;
provided, however, that the adjustments described below may apply upon the
occurrence of a change of control.

In the case of any distribution by us to our stockholders of substantially
all of our assets, each holder of preferred stock (and corresponding
depositary shares) will participate pro rata in such distribution based on the
number of shares of common stock into which such holders' shares of preferred
stock would have been convertible immediately prior to such distribution,
unless the amount of such distribution would result in a payment less than the
Liquidation Preference, in which case the Liquidation Preference shall be
paid.

Notwithstanding the foregoing, upon a Change of Control (as defined below),
if the Market Value at such time is less than the Conversion Price, then the
Conversion Price will be subject to a temporary adjustment for a period of 60
days such that the Conversion Price will be equal to the greater of:

. the Market Value on the date on which a Change of Control event occurs,
and

. 66.67% of the Market Value as of the date of the Preferred Stock
Placement.

In lieu of issuing the shares of common stock issuable upon conversion in the
event of a Change of Control, we may, at our option, make a cash payment equal
to the greater of the above bullet points, or any combination thereof.

The Company's Certificate of Designation defines "Change of Control" as any
of the following events:

(A) the sale, lease, transfer, conveyance or other disposition of all or
substantially all of our assets to any "person" or "group" (within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group
acting for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act) other
than Existing Shareholders (except in connection with a liquidation or
dissolution of us that does not constitute a Change of Control under
clause (B) below),

30
<PAGE>

(B) the approval by our requisite shareholders of a plan of liquidation or
statutory dissolution (which shall not be construed to include a plan
of merger or consolidation) of us, unless Existing Shareholders
"beneficially own" (as defined in Rule 13d-3 under the Exchange Act) at
least the same percentage of voting power after the consummation of
such plan as before or otherwise retain the right or ability, by voting
power, to control the Person that acquires the proceeds of such
liquidation or dissolution,

(C) any "person" or "group" (within the meaning of Sections 13(d)(3) and
14(d)(2) of the Exchange Act or any successor provision to either of
the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-
5(b)(1) under the Exchange Act), other than Existing Shareholders,
becomes the "beneficial owner" (as so defined) of more than 35% of the
total voting power of all classes of our voting stock or a successor
and/or warrants or options to acquire such voting stock, calculated on
a fully diluted basis, provided that Existing Shareholders
"beneficially own" (as so defined), in the aggregate, a percentage of
such voting stock or warrants having a lesser percentage of voting
power than such other "person" or "group" and do not have the right or
ability by voting power, contract or otherwise to elect or designate
for election a majority of our Board of Directors, or

(D) during any period of two consecutive years, individuals who at the
beginning of such period constituted our Board of Directors (together
with any new directors whose nomination for election or appointment by
such board or whose election by our stockholders was approved by a vote
of the Existing Shareholders or a majority of the directors then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of our Board of Directors
then in office.

Notwithstanding clause (C) above,

. the acquisition by a Qualified Investor of 49% or less of our voting
stock shall not constitute a Change of Control, and

. a merger or consolidation that would otherwise constitute a Change of
Control hereunder shall not constitute a Change of Control if at
least 90% of the consideration consists of common stock that is, or
upon issuance, will be traded on a United States national securities
exchange or quoted on the Nasdaq National Market.

"Existing Shareholders" means Albert M. Carollo, Lawrence F. DeGeorge,
Lawrence J. DeGeorge, Curtis Rochelle, Marian Rochelle, Rochelle
Investments, Ltd. (so long as it is controlled by Curtis or Marian
Rochelle), Gene W. Schneider, G. Schneider Holdings, Co. and The Gene W.
Schneider Family Trust (so long as each is controlled by Gene W. Schneider
or trustees appointed by him), Janet S. Schneider and Mark L. Schneider,
Apollo Cable Partners, L.P. and Apollo Advisors L.P. (collectively, the
"Principals") and with respect to any Principal means:

(A) any controlling stockholder or 80% (or more) owned subsidiary of
such Principal, or with respect to each individual Principal, (1)
family partnerships, corporations or other entities holding our
equity interests, the transferee(s) or the surviving entities or
entities solely for the benefit of such Principal or any of the
Persons listed in (2) through (5) below, (2) such Principal's
spouse, (3) such Principal's children, grandchildren, stepchildren,
step grandchildren and their spouses, (4) heirs, legatees and
divisees, and (5) trusts primarily for the benefit of any of the
foregoing; or

(B) any trust corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% (or more) controlling interest of which
consist of such Principal and/or such other persons referred to in
the immediately preceding clause (A).

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<PAGE>

"Qualified Investor" means an investment grade debt issuer approved by our
Board of Directors, which either:

(A) is in the telecommunications industry, or

(B) engages in a business which will benefit from strategic synergies
from an investment in us.

The phrase "all or substantially all" of our assets is likely to be
interpreted by reference to applicable state law at the relevant time, and will
be dependent on the facts and circumstances existing at such time. As a result,
there may be a degree of uncertainty in ascertaining whether a sale or transfer
is of "all or substantially all" of our assets.

Amendment, Supplement and Waiver

To the extent permitted by law, without the consent of any holder of
preferred stock, we may amend or supplement the Certificate of Designation to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
preferred stock in addition to or in place of certificated preferred stock, to
provide for assumption of our obligations to holders of the preferred stock in
the case of a merger or consolidation, to make any change that would provide
any additional rights or benefits to the holders of the preferred stock or that
does not adversely affect the legal rights under the Certificate of Designation
of any such holder.

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<PAGE>

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES

The following is a general discussion of certain of the expected United
States federal tax consequences applicable to persons who purchase depositary
shares and who hold the depositary shares, the underlying preferred stock, the
common stock received with respect to the preferred stock, and the interest in
the underlying assets of the Deposit Account as "capital assets" for United
States federal income tax purposes (such persons are referred to in this
discussion as "Holders"). This discussion is intended as a descriptive summary
only and does not purport to be a complete technical analysis or listing of all
potential tax considerations that may be relevant to Holders. This discussion
is based on current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), applicable Treasury regulations promulgated thereunder (the
"Regulations"), and public administrative and judicial interpretations of the
Code and the Regulations, all of which are subject to change, which changes
could be applied retroactively. This discussion is also based on the
information contained in this prospectus and the related documents. This
discussion does not cover all aspects of United States federal taxation that
may be relevant to, or the actual tax effect that any of the matters described
herein will have on, particular Holders and does not address foreign, state, or
local tax consequences.

We have not sought and will not seek a ruling from the United States
Internal Revenue Service (the "Service") with respect to this offering. There
can be no assurance that the Service will not take a different position
concerning the tax consequences of the acquisition, ownership, or disposition
of the depositary shares, the underlying preferred stock, the common stock
received with respect to the preferred stock, or an interest in the Deposit
Account, or that the Service's position would not be sustained by a court.

The tax consequences to a Holder may vary depending on the Holder's
particular situation or status. Holders who are subject to special rules under
the Code (including insurance companies, tax-exempt organizations, mutual
funds, retirement plans, financial institutions, dealers in securities or
foreign currency, persons who hold the depositary shares, the underlying
preferred stock, the common stock received with respect to the preferred stock,
or an interest in the Deposit Account as part of a straddle, hedge, conversion,
synthetic security, or constructive sale transaction for United States federal
income tax purposes or who have a functional currency other than the United
States dollar, investors in pass-through entities, traders in securities who
elect to mark-to-market, certain expatriates, and except as expressly addressed
herein, Non-U.S. Holders (as defined below)) may be subject to tax rules that
are not discussed herein or that differ significantly from the rules summarized
below.

As used in this discussion, the term "U.S. Holder" means a beneficial owner
of the depositary shares, the underlying preferred stock, the common stock
received with respect to the preferred stock, or an interest in the Deposit
Account who is a Holder and, for United States federal income tax purposes, is
(i) an individual who is a citizen or resident of the United States, (ii) a
corporation, partnership, or other entity created or organized in or under the
laws of the United States, of the District of Columbia, or of any State
(except, in the case of a partnership, to the extent provided in the
Regulations), (iii) an estate the income of which is subject to United States
federal income tax, regardless of its source, or (iv) a trust if (a) a court
within the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent to
be prescribed in the Regulations, which Regulations have not been issued, a
trust that was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under sections 671 through 679 of the Code), and which was
a United States person on August 19, 1996, may elect to continue to be treated
as a United States person, and if such election is made, will be treated as a
U.S. Holder for purposes of this discussion notwithstanding the preceding
sentence. As used in this discussion, the term "Non-U.S. Holder" means a
beneficial owner of the depositary shares, the underlying preferred stock, the
common stock received with respect to the preferred stock, or an interest in
the Deposit Account who is a Holder and, for United States federal income tax
purposes, is not a U.S. Holder.

THIS DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY, AND A PROSPECTIVE
PURCHASER SHOULD NOT CONSTRUE THE CONTENTS HEREOF AS TAX ADVICE. EACH

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<PAGE>

PROSPECTIVE PURCHASER IS URGED TO CONSULT ITS TAX ADVISOR AS TO THE PARTICULAR
TAX CONSEQUENCES TO SUCH PERSON OF THE ACQUISITION, OWNERSHIP, OR DISPOSITION
OF THE DEPOSITARY SHARES, THE UNDERLYING PREFERRED STOCK, THE COMMON STOCK
RECEIVED WITH RESPECT TO THE PREFERRED STOCK, OR AN INTEREST IN THE DEPOSIT
ACCOUNT, INCLUDING THE APPLICABILITY AND EFFECT OF ALL FOREIGN, STATE, AND
LOCAL TAX LAWS, AND OF ANY CHANGE IN UNITED STATES FEDERAL TAX LAW OR
ADMINISTRATIVE OR JUDICIAL INTERPRETATION THEREOF SINCE THE DATE OF THIS
PROSPECTUS.

General

Depositary Share Arrangement

Each depositary share represents one-twentieth of a share of preferred stock
deposited under the deposit agreement. Subject to the terms of the deposit
agreement, each Holder who holds a depositary share will be entitled, in
proportion to the applicable fraction of a share of preferred stock represented
by the depositary share, to all of the rights and preferences of the preferred
stock represented thereby and subject, proportionately, to all of the
limitations of the preferred stock represented thereby, as contained in the
certificate of designation for the preferred stock. As a result, a Holder who
holds depositary shares will generally be treated, for United States federal
income tax purposes, as the owner of its proportionate interest in the
underlying shares of preferred stock held by the Depository. Accordingly, no
gain or loss will be recognized upon the exchange of the depository shares for
the Holder's proportionate interest in the shares of the preferred stock
represented thereby, the Holder's tax basis in such shares of the preferred
stock will be the same as its tax basis in the depository shares surrendered
therefor, and the holding period of such shares of the preferred stock will
include the period during which the Holder held the surrendered depository
shares. The United States federal tax treatment for Holders who hold depository
shares is generally the same as the United States federal tax treatment
described below for Holders who hold shares of the underlying preferred stock
directly, and references in this discussion to shares of the preferred stock
are intended to include the depositary shares where appropriate.

Deposit Account

Pursuant to the terms of the Deposit Account Agreement, each Holder who
holds shares of the preferred stock should be treated as holding a direct
interest in the Deposit Account and owning a pro rata portion of the assets
held in the Deposit Account. Although there is no authority directly applicable
to the treatment of the Deposit Account, we believe that the intended treatment
is appropriate for United States federal income tax purposes because (i) the
Deposit Account assets are not intended to be subject to the claims of our
creditors, (ii) we will not be entitled to receive the Deposit Account assets
except under limited circumstances, and (iii) earnings generated by the Deposit
Account assets will be available for distribution to or application for the
benefit of the Holders. As a result, we will not treat the cash deposited in
the Deposit Account as received in exchange for shares of the preferred stock.
Instead, we intend to take the position that the purchase of shares of the
preferred stock, together with an interest in the Deposit Account, is the
equivalent of a purchase of a unit for United States federal income tax
purposes. Under such treatment, the issue price of each component comprising
the unit would be determined by allocating the issue price of the unit between
the components based on their relative fair market values on the date of
issuance, and the initial tax basis of each such component would equal its
issue price.

U.S. Holders

Shares of Preferred Stock

Distributions

General. Distributions of cash or shares of common stock with respect to
shares of the preferred stock following the Deposit Expiration Date will
constitute dividend income for United States federal income tax

34
<PAGE>

purposes, subject to tax as ordinary income, to the extent paid from our
current or accumulated earnings and profits as specially determined for United
States federal income tax purposes. In the case of a distribution of shares of
common stock, the amount of such distribution will equal the fair market value
of such shares on the date of distribution. For a summary of the United States
federal income tax treatment of the distribution of cash or shares of common
stock on or prior to the Deposit Expiration Date, see the discussion below
under the heading "--U.S. Holders--Deposit Account--Income Inclusion;
Distributions in Respect of the Quarterly Return Amount."

We presently do not have any accumulated earnings and profits and we may not
have any current earnings and profits in the taxable year in which the
distribution is made, as determined under United States federal income tax
principles. Distributions of cash and shares of common stock paid to a U.S.
Holder in excess of our current and accumulated earnings and profits will be
treated as a nontaxable return of capital and will reduce the U.S. Holder's
adjusted tax basis in its shares of preferred stock, but not below zero.
Distributions paid to a U.S. Holder in excess of the U.S. Holder's adjusted tax
basis in its shares of preferred stock will be subject to tax as capital gain
and will constitute long-term capital gain if the U.S. Holder's holding period
is more than one year.

Dividends Received Deduction and Extraordinary Dividend Treatment. Corporate
U.S. Holders will generally be entitled to claim as a deduction 70 percent of
the amount of any distribution on shares of preferred stock that qualifies as a
dividend for United States federal income tax purposes, subject to limitations,
including limitations relating to minimum holding periods, the financing of
such U.S. Holder's acquisition or ownership of shares of preferred stock, and
alternative minimum tax. In addition, if the distribution constitutes an
"extraordinary dividend" within the meaning of section 1059 of the Code, a
corporate U.S. Holder may be required to reduce its adjusted tax basis in its
shares of preferred stock by the amount of the dividend excluded from income
under the dividends received deduction provisions. Distributions with respect
to shares of the preferred stock will not qualify as dividends and thus, will
not be eligible for the dividends received deduction, unless and until such
distributions are paid out of current or accumulated earnings and profits for
United States federal income tax purposes.

Constructive Distributions

Redemption Premium. Under certain circumstances, section 305 of the Code
requires that any excess of the redemption price of the preferred stock over
its issue price, subject to a de minimis exception, be treated as a
constructive distribution and be taken into account by a U.S. Holder on an
economic accrual basis, prior to actual receipt of the redemption premium. For
purposes of this provision, the Regulations disregard any premium attributable
to optional redemption provisions that are not more likely than not to occur
based on all of the facts and circumstances as of the issue date. A premium
will be treated as not more likely than not to occur under the Regulations if
(i) the issuer and the holder are not related, applying certain modified
related party rules, (ii) no plan, arrangement, or agreement exists that
effectively requires or is intended to compel the issuer to exercise the
redemption right, and (iii) the exercise of the redemption right would not
reduce the yield on the preferred stock. Due to the nature of our redemption
rights (see "Description of the Preferred Stock--Optional Redemption and
Description of the Preferred Stock--Conversion Rights--Conversion at our
Option") we do not intend to treat the preferred stock as being subject to the
redemption premium provisions of section 305 of the Code.

Adjustment of Conversion Price. In general, any adjustment in the conversion
price that increases the interest of the U.S. Holders who hold shares of the
preferred stock in our assets or earnings and profits will result in a
constructive dividend distribution to such U.S. Holders, unless a safe harbor
under the Regulations applies. The antidilution safe harbor provides that
changes in the conversion price made solely to avoid dilution in the interests
of U.S. Holders who hold shares of the preferred stock will not result in a
constructive dividend, but the safe harbor specifically does not cover
conversion price adjustments that are made to compensate the U.S. Holders who
hold shares of the Preferred Stock for taxable cash or property distributions
to other stockholders. The antidilution safe harbor covers some but not all of
the possible circumstances that could

35
<PAGE>

result in an adjustment to the conversion price with respect to shares of the
preferred stock. For example, a decrease in the conversion price in the event
of distributions of indebtedness or assets by us will generally result in
deemed dividend treatment to U.S. Holders who hold shares of the preferred
stock to the extent of our applicable earnings and profits, but generally a
decrease in the event of stock dividends or the distribution of rights to
subscribe for our common stock will not result in a taxable stock dividend.

Sale, Redemption, or Conversion

Sale. Upon a sale or other disposition, other than a redemption or
conversion, of shares of the preferred stock, a U.S. Holder will generally
recognize capital gain or loss equal to the difference between the amount
realized by the U.S. Holder (other than the amount, if any, treated as received
in respect of a disposition of an interest in the Deposit Account) and the U.S.
Holder's adjusted tax basis in such shares. Such gain or loss will be long-term
gain or loss if the U.S. Holder's holding period with respect to the shares of
preferred stock is more than one year.

Redemption. Generally, any gain or loss recognized by a U.S. Holder upon
redemption of the shares of preferred stock for cash will be treated as gain or
loss from the sale or exchange of such shares if, taking
into account stock that is actually or constructively owned as determined under
section 318 of the Code: (i) such U.S. Holder's equity interest in us
(including shares of preferred stock and common stock) is completely terminated
as a result of the redemption, (ii) such U.S. Holder's percentage ownership in
our voting stock immediately after the redemption is less than 80 percent of
such percentage ownership immediately before the redemption, or (iii) the
redemption is "not essentially equivalent to a dividend," within the meaning of
section 302 of the Code. In applying each of these tests, certain attribution
and constructive ownership rules apply. If none of the foregoing tests is met,
the proceeds of the redemption will be treated as a distribution, potentially
subject to tax as ordinary dividend income, as described above under the
heading "U.S. Holders--Shares of Preferred Stock--Distributions."

In the event that we determine to redeem shares of preferred stock for a
combination of cash and shares of common stock, a U.S. Holder who holds shares
of preferred stock will recognize gain, but not loss, in an amount equal to the
lesser of the gain, if any, realized in the redemption and the cash received.
Any such gain will be subject to tax as capital gain unless none of the tests
described in the foregoing paragraph are met, in which case such gain will be
treated as a distribution, potentially subject to tax as ordinary dividend
income, as described above under the heading "U.S. Holders--Shares of Preferred
Stock--Distributions." In the event that we determine to redeem shares of the
preferred stock solely for shares of common stock, such redemption will
generally be a tax-free transaction as described below under the heading "U.S.
Holders--Sale, Redemption, or Conversion--Conversion of Shares of Preferred
Stock."

In addition, any cash or shares of common stock received by a U.S. Holder
upon a redemption of shares of preferred stock, that are attributable to
dividend arrearages will be treated as a distribution with respect to the
shares of preferred stock, in an amount equal to the cash or the fair market
value of shares common stock as determined on the date of distribution,
potentially subject to tax as ordinary dividend income, as described above
under the heading "U.S. Holders--Shares of Preferred Stock--Distributions." A
U.S. Holder will have a tax basis in such shares of Common Stock equal to their
fair market value as determined on the date of distribution and the holding
period of such shares will begin on the day following that date. In the event
that funds remaining in the Deposit Account are paid to us as a result of a
redemption of shares of preferred stock on or prior to the Deposit Expiration
Date, such payment should not represent a current deduction for United States
federal income tax purposes, but rather an additional contribution by the U.S.
Holder that should increase the U.S. holder's adjusted tax basis in its shares
of our preferred stock or common stock.

Conversion of Shares of Preferred Stock. A U.S. Holder will generally not
recognize gain or loss as a result of a conversion of shares of preferred stock
into shares common stock, except to the extent of cash received in lieu of a
fractional share of common stock. In addition, the fair market value of any
shares of common stock received by a

36
<PAGE>

U.S. Holder, upon conversion of shares of preferred stock, that are
attributable to dividend arrearages will be treated as a distribution on such
shares of preferred stock, potentially subject to tax as ordinary dividend
income, as described above under the heading "--U.S. Holders--Shares of
Preferred Stock--Distributions."

Generally, the adjusted tax basis of the shares of common stock received
pursuant to the exercise of the conversion feature will equal the tax basis of
the shares of preferred stock surrendered in exchange therefor and the holding
period of the shares of common stock received upon conversion will include the
holding period of such shares of preferred stock. Any shares of common stock
received by a U.S. Holder that are attributable to dividend arrearages,
however, will have a tax basis equal to the fair market value of the shares as
determined on the date of distribution and the holding period of the shares
will begin on the day following such date. In the event that funds remaining in
the Deposit Account are paid to us as a result of a of a conversion of shares
of preferred stock into shares of common stock, on or prior to the Deposit
Expiration Date, the amount paid should not represent a current deduction for
United States federal income tax purpose, but rather an additional contribution
by the U.S. Holder that should be added to the adjusted tax basis of the shares
of preferred stock surrendered in arriving at the initial adjusted tax basis in
the shares of common stock received pursuant to the exercise of the conversion.

Deposit Account

Income Inclusion; Distributions in Respect of the Quarterly Return Amount

In accordance with the treatment of U.S. Holders who hold an interest in the
Deposit Account as owning a pro rata portion of the assets held in the Deposit
Account, each such U.S. Holders should include in income its pro rata share of
the items of income and gain earned on the investments held in the Deposit
Account when such items are accrued or received in accordance with the U.S.
Holder's regular method of tax accounting. As a result, cash distributions of
the Quarterly Return Amount paid to a U.S. Holder from the Deposit Account
should generally be treated as nontaxable withdrawals of a portion of the funds
held in the Deposit Account.

Shares of common stock purchased by the Depositary from Deposit Account
funds and distributed to a U.S. Holder who holds an interest in the Deposit
Account should generally be treated as a purchase of such shares by the U.S.
Holder for an amount equal to the U.S. Holder's share of the Deposit Account
funds used to purchase such shares of common stock. The shares of common stock
received should generally have a tax basis equal to their fair market value,
determined as of the date on which the Depositary purchased such shares, and a
holding period that begins on the day following such date. Although there is no
authority directly addressing the issue, to the extent that the fair market
value of the shares of common stock, as determined on the date of purchase by
the Depositary, exceeds the amount paid by the Depositary for the shares, it is
likely that the excess would be treated as a payment on the shares of preferred
stock, in which case such amount should be treated as a distribution on the
shares of preferred stock held by the U.S. Holder, potentially subject to tax
as ordinary dividend income, as described above under the heading "U.S.
Holders--Shares of Preferred Stock--Distributions."

Sale or Exchange

Upon a sale, exchange, or other disposition of an interest in the Deposit
Account, including a disposition of the Deposit Account in connection with a
redemption or conversion of shares of Preferred Stock on or prior to the
Deposit Expiration Date, a U.S. Holder will generally recognize capital gain or
loss equal to the difference between the amount realized by the U.S. Holder
(other than the amount received, if any, in respect of accrued but unpaid items
of interest income earned on investments held in the Deposit Account) and the
U.S. Holder's adjusted tax basis in the Deposit Account assets. Such gain or
loss will be short term or long-term depending upon the holding period of the
investments held in the Deposit Account. For a discussion of tax bases
adjustments to shares of preferred stock that are redeemed, or a conversion of
shares of preferred stock into shares of common stock, in either case on or
prior to the Deposit Expiration Date, see the discussion above under the
heading "--U.S. Holders--Shares of Preferred Stock--Sale, Redemption, or
Conversion."

37
<PAGE>

Common Stock

Distributions with respect to shares of common stock will generally be
subject to tax to U.S. Holders in the manner and under the circumstances
described above for distributions with respect to shares of the preferred
stock. In addition, upon the sale or other taxable disposition of shares of
common stock, U.S. Holders will generally be subject to tax in the same manner
and under the circumstances described above with respect to shares of the
preferred stock.

Non-U.S. Holders

Distributions on Shares of Preferred Stock

A distribution of cash or shares of common stock with respect to shares of
preferred stock that constitutes the payment of a dividend for purposes of
United States federal income taxation, as discussed above under the heading "--
U.S. Holders--Shares of Preferred Stock--Distributions," will generally be
subject to withholding of United States federal income tax at the rate of 30
per cent unless the dividend is effectively connected with the conduct of a
trade or business in the United States by the Non-U.S. Holder, in which case
the dividend will be subject to the United States federal income tax imposed on
net income on the same basis that applies to United States persons generally
(and, with respect to corporate Non-U.S. Holders and under certain
circumstances, the branch profits tax). Distributions in excess of current
accumulated earnings and profits generally are treated as dividends for
purposes of the foregoing. Under regulations effective for payments made after
December 31, 2000, however, corporations may elect to treat distributions in
excess of current or accumulated earnings and profits as distributions other
than dividends not subject to withholding to the extent of such excess.

Non-U.S. Holders should consult any applicable income tax treaties that may
provide for a reduction of, or exemption from, withholding taxes. Non-U.S.
Holders may be able to claim a refund for over-withheld amounts by filing an
appropriate claim for a refund with the Internal Revenue Service. A Non-U.S.
Holder may be required to satisfy certain certification requirements in order
to claim such treaty benefits.

In the case of any distribution made in shares of common stock that is
treated as a dividend for United States federal income tax purposes, we intend
to withhold a number of shares of common stock with a fair market value equal
to the amount of any United States federal taxes that are required to be
withheld. In addition, in the event of any deemed dividend distribution
resulting from an adjustment to the conversion price as discussed above under
the heading "--U.S. Holders--Shares of Preferred Stock--Constructive
Distributions--Adjustment of Conversion Price," we intend to withhold, on the
next distribution of any value to Non-U.S. Holders who hold shares of preferred
stock, an amount equal to any United States federal taxes that are required to
be withheld in respect of any such deemed dividend distribution.

Distributions from the Deposit Account

Because a distribution paid from the Deposit Account in respect of the
Quarterly Return Amount should be treated as nontaxable withdrawal of a portion
of the funds held in the Deposit Account as discussed above under the heading
"--U.S. Holders--Deposit Account--Distributions in Respect of the Quarterly
Return Amount, a Non-U.S. Holder should not generally be subject to United
States federal income or withholding tax on such distribution. Distributions
made from the Deposit Account attributable to amounts earned on United States
government obligations held by the Deposit Account should also be exempt from
United States federal income or withholding tax as portfolio interest, provided
that the Non-U.S. Holder provides to the Depositary a properly completed United
States Internal Revenue Service Form W-8 (or Form W-8BEN) or a similar
substitute form.

Shares of common stock purchased by the Depositary from Deposit Account
funds and distributed to a Non-U.S. Holder of an interest in the Deposit
Account should generally be treated as a purchase of shares of common stock by
the Non-U.S. Holder for an amount equal to the Non-U.S. Holder's share of the
Deposit Account funds used to purchase such shares of common stock. The shares
of common stock received should have a tax basis equal to their fair market
value, determined as of the date on which the Depositary purchased such shares,
and a holding period that will begin on the day following such date. To the
extent that the fair

38
<PAGE>

market value of the shares of common stock, as determined on the date of
purchase by the Depositary, exceeds the amount paid by the Depositary for the
shares, the excess should be treated as a distribution on the shares of
preferred stock held by the Non-U.S. Holder, potentially subject to United
States federal withholding taxation, as described above under the heading "--
Non-U.S. Holders--Shares of Preferred Stock--Distributions."

Sale, Redemption, or Conversion of Preferred Shares; Sale of Interest in
Deposit Account

A Non-U.S. Holder will generally not be subject to United States federal
income tax on gain recognized on a sale, redemption, or other disposition of
shares of preferred stock or common stock, or a sale or other disposition of an
interest in the Deposit Account, unless (i) the gain is effectively connected
with the conduct of a trade or business in the United States by the Non-U.S.
Holder or (ii) in the case of a Non-U.S. Holder who is a nonresident alien
individual, such holder is present in the United States for 183 or more days in
the taxable year and certain other requirements are met. Gain that is
effectively connected with the conduct of a trade or business in the United
States by the Non-U.S. Holder will be subject to United States federal income
tax imposed on net income on the same basis that applies to United States
persons generally (and, with respect to corporate Non-U.S. Holders and under
certain circumstances, the branch profits tax) but will not be subject to
withholding tax. Non-U.S. Holders should consult any applicable income tax
treaties that may provide for different rules.

In addition, any cash or shares of common stock received by a Non-U.S.
Holder upon a conversion or redemption of shares of preferred stock that are
attributable to dividend arrearages will be treated as a distribution on the
shares of preferred stock, in an amount equal to the cash or the fair market
value of shares of common stock as determined on the date of distribution,
potentially subject to United States federal withholding tax, as described
above under the heading "--Non-U.S. Holders--Shares of Preferred Stock--
Distributions."

United States Federal Estate Taxes

The value of any shares of preferred stock or common stock owned or treated
as owned by an individual who is not a citizen or resident (as specially
defined for United States federal estate tax purposes) of the United States on
the date of death will be included in such individual's gross estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise. Any United States government obligations held by the
Deposit Account that are treated as owned by such an individual, however,
should not be included in such individual's estate for United States federal
estate tax purposes.

Backup Withholding and Information Reporting

Current United States federal income tax law provides that in the case of
payments of dividends and interest to a Non-U.S. Holder, the 31% backup
withholding tax will not apply provided that the Non-U.S. Holder certifies to
its status as a non-United States person on a United States Internal Revenue
Service Form W-8 (or Form W-8BEN) or similar substitute form, or an exemption
has otherwise been established, provided in each case that we or the paying
agent, as the case may be, do not have actual knowledge that the payee is a
United States person.

Under current Treasury regulations, payments of the proceeds of the sale of
shares of preferred stock or common stock, or an interest in the Deposit
Account, to or through a foreign office of a broker will not be subject to
backup withholding but will be subject to information reporting if the broker
is a United States person, a controlled foreign corporation for United States
federal income tax purposes, or a foreign person 50 percent or more of whose
gross income is from a United States trade or business for a specified three-
year period, unless the broker has in its records documentary evidence that the
holder is not a United States person and certain other conditions are met or
the holder otherwise establishes an exemption. Payment of the proceeds of a
sale to or through the United States office of a broker is subject to backup
withholding and information reporting unless the holder certifies its non-
United States status under penalties of perjury or otherwise establishes an
exemption.

39
<PAGE>

Recently, the Treasury Department has promulgated final regulations (the
"Final Regulations") regarding the withholding and information reporting rules
discussed above. In general, the Final Regulations do not significantly alter
the substantive withholding and information reporting requirements but unify
current certification procedures and forms and clarify reliance standards.
Under the Final Regulations, special rules apply which permit the shifting of
primary responsibility for withholding to certain financial intermediaries
acting on behalf of beneficial owners. The Final Regulations are anticipated to
become effective for payments made after December 31, 2000.

40
<PAGE>

SELLING SECURITYHOLDERS AND PLAN OF DISTRIBUTION

This prospectus relates to the resale by the selling securityholders of the
depositary shares listed below and the underlying preferred stock and shares of
common stock issued upon conversion thereof or as a dividend payable thereon.
All of the securities being registered under the registration statement of
which this prospectus forms a part are being so registered pursuant to certain
registration rights granted by us to the selling securityholders. None of the
selling securityholders has had a material relationship with us or any of our
affiliates within the past three years.
<TABLE>
<CAPTION>
Number of Depositary Shares
----------------------------
Owned Offered
------------- --------------
Name of Selling Securityholder
- ------------------------------
<S> <C> <C>
Alexandra Global Investment Fund I Ltd. ........... 60,000 60,000
American Variable Insurance Series--Growth Fund.... 1,180,000 1,180,000
Ardsley Offshore Fund, Ltd. ....................... 200,000 200,000
Ardsley Partners Fund I, L.P. ..................... 165,000 165,000
Ardsley Partners Fund II, L.P. .................... 215,000 215,000
Ardsley Partners Institutional Fund, L.P. ......... 160,000 160,000
Augusta Partners, L.P. ........................... 160,000 160,000
Bancroft Convertible Fund, Inc..................... 20,000 20,000
Bankers Trust Trustee for Chrysler Corp. Emp#1
Pension Plan dated 4/1/89......................... 70,200 70,200
Chase Manhattan NA Trustee for IBM Retirement Plan
dated 12/18/45.................................... 102,600 102,600
Deutsche Bank Securities........................... 488,000 488,000
Donaldson, Lufkin & Jenrette Securities
Corporation....................................... 680,030 680,030
Ellsworth Convertible Growth and Income Fund,
Inc............................................... 20,000 20,000
Fidelity Financial Trust: Fidelity Convertible
Securities Fund................................... 19,000 19,000
Forest Alternative Strategies Fund II LP Series A
5M................................................ 1,100 1,100
Forest Alternative Strategies Fund II LP Series A
5I................................................ 2,100 2,100
Forest Convertible Fund ........................... 5,400 5,400
Forest Fulcrum Fund LP ............................ 41,100 41,100
Forest Global Convertible Fund Series A5........... 52,600 52,600
Forest Performance Fund ........................... 5,900 5,900
Franklin & Marshall College........................ 5,400 5,400
General Motors Welfare Benefits Trust (LT-Veloa)... 20,500 20,500
Goldman Sachs and Company.......................... 16,700 16,700
Greyhound Lines Inc., Amalgamated Transit Union
National Local 1700 Retirement & Disability Trust
c/o Forest Investment Management LLC.............. 2,700 2,700
Haussman Overseas, N.V. ........................... 135,000 135,000
Highbridge Capital Group........................... 140,000 140,000
Howard Chalfin..................................... 20,000 20,000
JMG Convertible Investments, L.P................... 175,000 175,000
LDG Limited........................................ 6,000 6,000
Lehman Brothers Inc................................ 83,000 83,000
Lincoln National Convertible Securities Fund....... 30,000 30,000
Lipper Convertibles, L.P. ......................... 185,000 185,000
Lipper Convertibles Series II, L.P. ............... 40,000 40,000
LLT Limited........................................ 6,000 6,000
McMahan Securities Company, L.P. .................. 270,000 270,000
Monumental Life Insurance Company.................. 329,500 329,500
The New Economy Fund............................... 500,000 500,000
New York Life Insurance Company.................... 150,000 150,000
New York Life Insurance and Annuity Corp. ......... 30,000 30,000
Pacific Life Insurance Company..................... 10,000 10,000
Penn Treaty Network America Insurance Company...... 4,700 4,700
SMALLCAP World Fund, Inc. ......................... 1,625,000 1,625,000
Southport Management Partners L.P.................. 12,000 12,000
Southport Partners International................... 24,000 24,000
State Street Bank Custodian for GE Pension Trust... 37,100 37,100
TQA Leverage Fund L.P.............................. 27,500 27,500
TQA Vantage Fund Ltd............................... 59,200 59,200
TQA Vantage Plus Fund Ltd.......................... 17,000 17,000
Tribeca Investments Inc. .......................... 127,000 127,000
Triton Capital Investments, Ltd. .................. 175,000 175,000
------------- -------------
Total.......................................... 7,911,330 7,911,330
============= =============
</TABLE>

41
<PAGE>

The shares preferred stock and depositary shares may be offered and sold
from time to time by the selling securityholders or by their pledgees, donees,
transferees or other successors in interest, and the common stock, if and when
issued, may be offered and sold from time to time by the holders thereof or by
their pledgees, donees, transferees or other successors in interest, as market
conditions permit in the over-the-counter market, including the Nasdaq
National Market(R) in negotiated transactions or otherwise, at prices and
terms then prevailing or at prices related to the then-current market price,
or in negotiated transactions. These securities may be sold by one or more of
the following methods, without limitation: (i) transactions on one of any of
the exchanges or in the over-the-counter; (ii) through the writing of options
on, or settlement of short sales; (iii) a block trade in which a broker or
dealer so engaged will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
(iv) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus; (v) ordinary brokerage
transactions and transactions in which the broker solicits purchases; (vi)
transactions between sellers and purchasers without a broker/dealer; (vii)
unregistered transactions exempt from registration requirements, including
sales under Rule 144; (viii) underwritten offerings and (ix) through
securities lending programs. In effecting sales, brokers or dealers may
arrange for other brokers or dealers to participate. Such brokers or dealers
may receive commissions or discounts from selling securityholders in amounts
to be negotiated. Such brokers and dealers and any other participating brokers
and dealers may be deemed to be "underwriters' within the meaning of the
Securities Act, in connection with such sales.

Under the securities laws of certain states, the securities may be sold in
such states only through registered or licensed brokers or dealers. In
addition, in certain states the securities may not be sold unless the
securities have been registered or qualified for sale in such state or any
exemption from registration or qualification is available and is complied
with.

We will pay all of the expenses incident to the registration, offering and
sale of the securities to the public hereunder other than commissions, fees
and discounts of underwriters, brokers, dealers and agents. We have agreed to
indemnify the selling securityholders against certain liabilities, including
liabilities under the Securities Act. We will not receive any of the proceeds
from the sale of any of the securities by the selling securityholders.

LEGAL MATTERS

Holme Roberts & Owen LLP, Denver, Colorado, U.S.A., has advised us as to
the validity of the shares.

EXPERTS

Our consolidated financial statements and schedules incorporated by
reference in this prospectus and elsewhere in the registration statement from
our Transition Report on Form 10-K for the ten months ended December 31, 1998,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.

The consolidated financial statements of United International Properties,
Inc. incorporated by reference in this prospectus and elsewhere in the
registration statement from our Transition Report on Form 10-K for the ten
months ended December 31, 1998, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto. In that report, that firm states that with respect to the year ended
February 28, 1998, it did not audit the financial statements of Tele Cable de
Morelos S.A. de C.V. and related companies ("Megapo"), as of and for the year
ended December 31, 1997, an investment that is reflected in its consolidated
financial statements using the equity method of accounting. Instead its report
with respect to Megapo is based on the report of other auditors (Galaz, Gomez
Morfin, Chavero, Yamazaki S.C.). The reports referred to above have been
incorporated by reference herein in reliance upon the authority of those firms
as experts in giving said reports.

42
<PAGE>

The consolidated financial statements of UIH Europe, Inc. incorporated by
reference in this prospectus and elsewhere in the registration statement from
our Transition Report on Form 10-K for the ten months ended December 31, 1998,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.

The consolidated financial statements of United Telekabel Holding N.V. as of
December 31, 1998 and for the period from August 6, 1998 (inception) to
December 31, 1998 incorporated by reference in this prospectus and elsewhere in
the registration statement from our Transition Report on Form 10-K for the ten
months ended December 31, 1998 have been audited by Arthur Andersen,
independent auditors, as indicated in their report with respect thereto and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said report.

The consolidated financial statements of N.V. TeleKabel Beheer as of
December 31, 1998 and for the year then ended incorporated by reference in this
prospectus and elsewhere in the registration statement from our Form 8-K dated
June 28, 1999, have been audited by Arthur Andersen, independent accountants,
as indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.

The consolidated financial statements of A2000 Holding N.V., incorporated by
reference in this prospectus and elsewhere in the registration statement from
our Form 8-K dated June 28, 1999, have been audited by Arthur Andersen,
independent auditors, as indicated in their report with respect thereto, and
are incorporated by reference herein in reliance upon the authority of said
firm as experts in giving said report.

The consolidated financial statements of Kabel Plus a.s. and subsidiaries as
of December 31, 1998 incorporated by reference in this prospectus and elsewhere
in the registration statement from our Form 8-K dated June 28, 1999, have been
audited by Arthur Andersen s.r.o., independent public accountants, as indicated
in their report with respect thereto, and are incorporated by reference herein
in reliance upon the authority of said firm as experts in giving said report.

The consolidated financial statements of N.V. TeleKabel Beheer as of
December 31, 1997 and 1996, and for the two years ended December 31, 1997 and
1996, and for the period from August 22, 1995 (date of incorporation) until
December 31, 1995 incorporated by reference in this prospectus and elsewhere in
the registration statement from our Form 8-K/A-1 dated February 17, 1999, have
been audited by PricewaterhouseCoopers N.V., independent accountants, as
indicated in their report with respect thereto and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.

The consolidated financial statements of @Entertainment, Inc. incorporated
by reference in this prospectus and elsewhere in the registration statement
from our Form 8-K dated June 28, 1999 and Form 8-K/A-1 dated July 30, 1999,
have been audited by KPMG, independent auditors, as indicated in their report
with respect thereto and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said report.

AVAILABLE INFORMATION

We are subject to the informational reporting requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith file reports,
proxy statements and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other information may be
inspected without charge at, and copies thereof may be obtained at prescribed
rates from, the public reference facilities of the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
The Commission also maintains a web site at http://www.sec.gov

43
<PAGE>

that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Our Class A
Common Stock is traded on the Nasdaq National MarketSM, and copies of reports,
proxy statements and other information can be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.

We have filed with the Commission, a registration statement on Form S-3
under the Securities Act of 1933, as amended, with respect to the securities
offered hereby. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules thereto. For
further information with respect to us and the securities offered hereby
reference is made to the registration statement, including the exhibits and
schedules thereto, which may be inspected at, and copies thereof may be
obtained at prescribed rates from the public references facilities of the
Commission at the addresses set forth above.

INCORPORATION BY REFERENCE

The following documents have been filed by us (File No. 0-21974) with the
Commission and are incorporated in this prospectus by reference and made a part
hereof:

. Our Transition Report on Form 10-K for the ten months ended December
31, 1998 (as amended by Form 10K/A filed June 24, 1999).

. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999.

. Our Proxy Statement for a special meeting dated June 24, 1999, filed
June 21, 1999.

. Our Proxy Statement for our annual stockholders' meeting dated August
5, 1999, filed August 5, 1999.

. Our Current Reports on Form 8-K dated February 17, 1999 (as amended by
Form 8K/A-1 filed on March 12, 1999), February 24, April 29, June 16,
June 28, June 29, July 22, July 23, July 30 (as amended by Form 8K/A-1
filed on August 30, 1999) and September 7, 1999.

All documents subsequently filed by us pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act, after the date of this prospectus and prior to
the termination of the offering, shall be deemed to be incorporated by
reference in this prospectus and to be a part hereof from the dates of filing
of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference in this prospectus modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.

We will provide you without charge upon your written or oral request, a copy
of any and all of the information that has been incorporated by reference in
this prospectus (not including exhibits to such information unless such
exhibits are specifically incorporated by reference into such information). Any
such request should be directed to UnitedGlobalCom, Director of Finance, 4643
South Ulster Street, Suite 1300, Denver, Colorado, 80237 (telephone number 303-
770-4001).

44
<PAGE>

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No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus,
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or the Underwriters. This
Prospectus does not constitute an offer to sell, or solicitation of an offer to
buy, to any person in any jurisdiction where such an offer or solicitation
would be unlawful. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary......................................................... 1
Risk Factors............................................................... 3
Use of Proceeds............................................................ 11
Selected Consolidated Financial Data....................................... 12
Business................................................................... 14
Description of the Depositary Shares....................................... 17
Description of the Preferred Stock......................................... 23
Certain United States Federal Tax Consequences............................. 33
Selling Security Holders and Plan of Distribution.......................... 41
Legal Matters.............................................................. 42
Experts.................................................................... 42
Available Information...................................................... 43
Incorporation by Reference................................................. 44
</TABLE>

---------------

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

[LOGO OF UNITEDGLOBALCOM APPEARS HERE]

8,500,000 Depositary Shares
Each representing 1/20th of a share of
7% Series C Senior Cumulative Convertible Preferred Stock

5,041,518 Shares
Class A Common Stock
Issuable upon conversion or redemption of the preferred stock

2,158,482 Shares
Class A Common Stock
Issuable as dividends on the preferred stock

-----------------------

PROSPECTUS

-----------------------

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Capitalized terms used but not defined in Part II have the meanings ascribed
to them in the Prospectus contained in this Registration Statement.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

<TABLE>
<C> <S>
4.1 Certificate of Designations with respect to Convertible Preferred Stock,
Series C of the Company.(1)

4.2 Deposit Agreement dated as of July 6, 1999, among us, Austar Bank of
Minnesota, N.A. and the holders of the depositary receipts described
herein.(1)

5.1 Opinion of Holme Roberts & Owen llp as to the legality of the issuance
of the shares.*

8.1 Opinion of Holme Roberts & Owen llp as to certain tax matters.*

12.1 Ratio of Combined Fixed Charges & Preferred Stock Dividends.*

23.1 Consent of Independent Public Accountants--Arthur Andersen LLP
(United International Holdings, Inc. d/b/a/ United GlobalCom, Inc.).

23.2 Consent of Independent Public Accountants--Arthur Andersen LLP
(United International Properties, Inc.).

23.3 Consent of Independent Public Accountants--Arthur Andersen LLP (UIH
Europe, Inc.).

23.4 Consent of Independent Auditors--Arthur Andersen (United Telekabel
Holding N.V.)

23.5 Consent of Independent Auditors--Galaz, Gomez Morfin, Chavero, Yamazaki,
S.C. (Tele Cable de Morelos, S.A. de C.V.).

23.6 Consent of Independent Accountants--PricewaterhouseCoopers N.V. (N.V.
TeleKabel Beheer)

23.7 Consent of Independent Auditors--KPMG (@Entertainment, Inc.)

23.8 Consent of Independent Accountants--Arthur Andersen (N.V. TeleKabel
Beheer).

23.9 Consent of Independent Public Accountants--Arthur Andersen (A2000
Holding N.V.).

23.10 Consent of Independent Public Accountants--Arthur Andersen s.r.o. (Kabel
Plus, a.s.).

23.11 The consent of Holme Roberts & Owen llp is included in Exhibit 5.1.

24.1 Power of Attorney.*
</TABLE>
- ---------------------

* Previously filed.
(1) Incorporated by reference from the Form 8-K dated July 6, 1999 (File No. 0-
21974).

II-1
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 (Amendment No. 1) and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, State of Colorado, on this 17th day of
September, 1999.

UnitedGlobalCom, Inc., A Delaware
corporation

/s/ Frederick G. Westerman
III
By: _________________________________
Frederick G. Westerman
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has caused this Registration Statement to be signed by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Title/Position Held
Signature With the Registrant Date
--------- ------------------- ----

<S> <C> <C>
* Chairman of the Board and September 17, 1999
______________________________________ Chief Executive Officer
Gene W. Schneider

* President September 17, 1999
______________________________________
Michael T. Fries

* Executive Vice President September 17, 1999
______________________________________ and Director
Mark L. Schneider

/s/ Frederick G. Westerman III Chief Financial Officer September 17, 1999
______________________________________
Frederick G. Westerman III

* Director September 17, 1999
______________________________________
Albert M. Carollo

* Director September 17, 1999
______________________________________
Lawrence F. DeGeorge

* Director September 17, 1999
______________________________________
John P. Cole, Jr.

* Director September 17, 1999
______________________________________
Lawrence J. DeGeorge

* Director September 17, 1999
______________________________________
John Riordan

Director
______________________________________
Antony P. Ressler

* Director September 17, 1999
______________________________________
Curtis Rochelle

* Director September 17, 1999
______________________________________
Bruce H. Spector

* Controller (Principal September 17, 1999
______________________________________ Accounting Officer)
Valerie L. Cover

/s/ Frederick G. Westerman III
*By: _________________________________
Frederick G. Westerman III
Chief Financial Officer
</TABLE>

II-2

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (Amendment No. 1) of our
report dated April 30, 1999, on the consolidated financial statements of United
International Holdings, Inc. (d/b/a UnitedGlobalCom, Inc.), which report
appears in the Transition Report on Form 10-K of United International Holdings,
Inc. (d/b/a UnitedGlobalCom, Inc.) for the transition period from March 1, 1998
to December 31, 1998. We also consent to the reference to our firm under the
caption "Experts".

/s/ Arthur Andersen LLP

Denver, Colorado

September 14, 1999

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (Amendment No. 1) of our
report dated April 30, 1999, on the consolidated financial statements of United
International Properties, Inc., which report appears in the Transition Report
on Form 10-K of United International Holdings, Inc. (d/b/a UnitedGlobalCom,
Inc.) for the transition period from March 1, 1998 to December 31, 1998. We
also consent to the reference to our firm under the caption "Experts".

/s/ Arthur Andersen LLP

Denver, Colorado

September 14, 1999

<PAGE>

Exhibit 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (Amendment No. 1) of our
report dated April 30, 1999, on the consolidated financial statements of UIH
Europe, Inc., which report appears in the Transition Report on Form 10-K of
United International Holdings, Inc. (d/b/a UnitedGlobalCom, Inc.) for the
transition period from March 1, 1998 to December 31, 1998. We also consent to
the reference to our firm under the caption "Experts".

/s/ Arthur Andersen LLP

Denver, Colorado

September 14, 1999

<PAGE>

Exhibit 23.4

CONSENT OF INDEPENDENT AUDITORS

As independent auditors, we hereby consent to the incorporation by reference
in this registration statement on Form S-3 (Amendment No. 1)of our report dated
March 19, 1999, on the financial statements of United Telekabel Holding N.V. as
of December 31, 1998 and for the period from commencement of operations (August
6, 1998) to December 31, 1998, which report appears in the Transition Report on
Form 10-K of United International Holdings, Inc. (d/b/a UnitedGlobalCom, Inc.)
for the transition period from March 1, 1998 to December 31, 1998. We also
consent to the reference to our firm under the caption "Experts".

/s/ Arthur Andersen

Amstelveen, The Netherlands

September 14, 1999

<PAGE>

Exhibit 23.5

CONSENT OF INDEPENDENT AUDITORS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (Amendment No. 1) of our
report dated March 6, 1998 on our audits of the combined financial statements
of Tele Cable de Morelos, S.A. de C.V. and related companies (all of which are
subsidiaries of Megapo Comunicaciones de Mexico, S.A. de C.V.) for the years
ended December 31, 1996 and 1997, which report appears in the Transition Report
on Form 10-K of United International Holdings, Inc. (d/b/a UnitedGlobalCom,
Inc.) for the transition period from March 1, 1998 to December 31, 1998. We
also consent to the reference to our firm under the caption "Experts".

/s/ Galaz, Gomez Morfin, Chavero, Yamazaki, S.C.

Acapulco, Mexico

September 16, 1999

<PAGE>

Exhibit 23.6

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this registration
statement on Form S-3 (Amendment No. 1) of our report dated September 11, 1998,
except with respect to note 14, for which the date is January 14, 1999, on our
audits of the consolidated financial statements of N.V. TeleKabel Beheer as of
December 31, 1996 and 1997 and for the period from August 22, 1995 (date of
incorporation) to December 31, 1995 and the years ended December 31, 1996 and
1997, which report appears in Form 8-K/A-1 of UnitedGlobalCom, Inc. (formerly
known as United International Holdings, Inc.) dated February 17, 1999. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.

/s/ PricewaterhouseCoopers N.V.

Arnhem, The Netherlands

September 16, 1999

<PAGE>

Exhibit 23.7

CONSENT OF INDEPENDENT AUDITORS

As independent auditors, we hereby consent to the incorporation by reference
in this registration statement on Form S-3 (Amendment No. 1) of our report
dated March 29, 1999 on our audits of the consolidated balance sheets of
@Entertainment, Inc. and subsidiaries as of December 31, 1997 and 1998 and the
related consolidated statements of operations, comprehensive loss, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1998, which report appears in Form 8-K of
UnitedGlobalCom, Inc. dated June 28, 1999 and Form 8-K/A-1 of UnitedGlobalCom,
Inc. dated July 30, 1999. We also consent to the reference to our firm under
the caption "Experts".

/s/ KPMG

Warsaw, Poland

September 16, 1999

<PAGE>

Exhibit 23.8

CONSENT OF INDEPENDENT ACCOUNTANTS

As independent accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (Amendment No. 1) of our
report dated February 26, 1999, with respect to the consolidated balance sheet
of N.V. TeleKabel Beheer as of December 31, 1998, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for
the year ended December 31, 1998, which report appears in the Form 8-K of
United International Holdings, Inc. (d/b/a UnitedGlobalCom, Inc.) dated June
28, 1999. We also consent to the reference to our firm under the caption
"Experts".

/s/ Arthur Andersen

Amstelveen, The Netherlands

September 14, 1999

<PAGE>

Exhibit 23.9

CONSENT OF INDEPENDENT AUDITORS

As independent auditors, we hereby consent to the incorporation by reference
in this registration statement on Form S-3 (Amendment No. 1) of our report
dated March 9, 1999, with respect to the consolidated balance sheets of A2000
Holding N.V. and subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the years in the two-year period ended December 31, 1998,
which report appears in the Form 8-K of United International Holdings, Inc.
(d/b/a UnitedGlobalCom, Inc.) dated June 28, 1999. We also consent to the
reference to our firm under the caption "Experts".

/s/ Arthur Andersen

Amstelveen, The Netherlands

September 14, 1999

<PAGE>

Exhibit 23.10

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 (Amendment No. 1) of our
report dated June 18, 1999 (except for Note 15, as to which the date is June
22, 1999), with respect to the consolidated balance sheets of Kabel Plus, a.s.
and subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for
each of the years in the two-year period ended December 31, 1998, which report
appears in the Form 8-K of United International Holdings, Inc. (d/b/a
UnitedGlobalCom, Inc.) dated June 28, 1999. We also consent to the reference to
our firm under the caption "Experts".

/s/ Arthur Andersen s.r.o.

Prague, Czech Republic

September 14, 1999