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þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2005
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from           to

State of Delaware		20-2197030
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
12300 Liberty Boulevard Englewood, Colorado (Address of principal executive offices)		80112 (Zip Code)

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PART I
Item 1.		Business			I-1
Item 1A.		Risk Factors			I-37
Item 1B.		Unresolved Staff Comments			I-45
Item 2.		Properties			I-45
Item 3.		Legal Proceedings			I-45
Item 4.		Submission of Matters to a Vote of Security Holders			I-46
PART II
Item 5.		Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities			II-1
Item 6.		Selected Financial Data			II-5
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			II-6
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			II-44
Item 8.		Financial Statements and Supplementary Data			II-51
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			II-51
Item 9A.		Controls and Procedures			II-51
Item 9B.		Other Information			II-51
PART III
Item 10.		Directors and Executive Officers of the Registrant			III-1
Item 11.		Executive Compensation			III-1
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			III-1
Item 13.		Certain Relationships and Related Transactions			III-1
Item 14.		Principal Accountant Fees and Services			III-1
PART IV
Item 15.		Exhibits and Financial Statement Schedules			IV-1
2005 Incentive Plan
2005 Nonemployee Director Incentive Plan
Compensation Policy for Nonemployee Directors
Form of Indemnification Agreement between the Registrant and its Directors
Form of Indemnification Agreement between the Registrant and its Executive Officers
Contract Extension Letter
List of Subsidiaries
Consent of KPMG LLP
Consent of KPMG AZSA & Co.
Consent of KPMG AZSA & Co.
Consent of Finsterbusch Pickenhayn Sibille
Consent of KPMG LLP
Information Re: Absence of Consent of Arthur Andersen LLP
Consent of Ernst & Young LTDA
Consent of KPMG LLP
Certification of President and CEO
Certification of Senior VP and Co-CFO (Principal Financial Officer)
Certification of Senior VP and Co-CFO (Principal Accounting Officer)
Section 1350 Certification

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Item 1.	BUSINESS

I-1

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	Contributions and Acquisitions

I-2

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I-3

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	Dispositions

	Financings

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	•	economic and business conditions and industry trends in the countries in which we operate;
	•	currency exchange risks;
	•	consumer disposable income and spending levels, including the availability and amount of individual consumer debt;
	•	changes in television viewing preferences and habits by our subscribers and potential subscribers;
	•	consumer acceptance of existing service offerings, including our newer digital video, voice and Internet access services;

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	•	consumer acceptance of new technology, programming alternatives and broadband services that we may offer such as our digital migration project in The Netherlands;
	•	our ability to manage rapid technological changes and grow our digital video, voice and Internet access services;
	•	the regulatory and competitive environment in the broadband communications and programming industries in the countries in which we, and the entities in which we have interests, operate;
	•	competitor responses to our products and services, and the products and services of the entities in which we have interests;
	•	continued consolidation of the foreign broadband distribution industry;
	•	uncertainties inherent in the development and integration of new business lines and business strategies;
	•	spending on foreign television advertising;
	•	capital spending for the acquisition and/or development of telecommunications networks and services;
	•	our ability to successfully integrate and recognize anticipated efficiencies from the businesses we acquire;
	•	problems we may discover post-closing with the operations, internal controls and financial statements of businesses we acquire;
	•	uncertainties associated with product and service development and market acceptance, including the development and provision of programming for new television and telecommunications technologies;
	•	future financial performance, including availability, terms and deployment of capital;
	•	the ability of suppliers and vendors to timely deliver products, equipment, software and services;
	•	the outcome of any pending or threatened litigation;
	•	availability of qualified personnel;
	•	changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings, including regulatory initiatives in The Netherlands;
	•	government intervention that opens our broadband distribution networks to competitors;
	•	our ability to successfully negotiate rate increases with local authorities;
	•	changes in the nature of key strategic relationships with partners and joint venturers;
	•	uncertainties associated with our ability to satisfy conditions imposed by competition and other regulatory authorities in connection with acquisitions; and
	•	events that are outside of our control, such as political unrest in international markets, terrorist attacks, natural disasters, pandemics and other similar events.

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	Financial Information About Operating Segments

	Narrative Description of Business

	Broadband Distribution

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																				Video																Internet								Telephone
								Two-way
				Homes				Homes				Customer				Total				Analog Cable				Digital Cable				DTH				MMDS				Homes								Homes
				Passed(1)				Passed(2)				Relationships(3)				RGUs(4)				Subscribers(5)				Subscribers(6)				Subscribers(7)				Subscribers(8)				Serviceable(9)				Subscribers(10)				Serviceable(11)				Subscribers(12)
Europe**
	The Netherlands				2,645,800				2,521,600				2,239,500				3,009,700				2,150,300				85,300				—				—				2,521,600				478,100				2,396,300				296,000
	Switzerland(13)				1,802,200				1,710,100				1,571,300				2,043,900				1,410,900				106,300				—				—				1,467,400				340,500				1,417,600				186,200
	France				4,611,700				3,361,600				1,618,800				1,921,800				928,600				563,800				—				—				3,361,600				295,000				2,370,500				134,400
	Austria				957,500				954,200				584,100				926,100				455,900				44,000				—				—				954,200				275,900				920,500				150,300
	Ireland				887,200				225,800				576,900				601,800				321,500				141,000				—				113,900				225,800				25,000				24,200				400
	Sweden				421,600				287,500				298,500				389,100				240,000				58,600				—				—				287,500				90,500				—				—
	Belgium				156,600				156,600				146,500				167,800				127,000				5,500				—				—				156,600				35,300				—				—
		Total Western Europe			11,482,600				9,217,400				7,035,600				9,060,200				5,634,200				1,004,500				—				113,900				8,974,700				1,540,300				7,129,100				767,300
	Poland				1,914,800				932,200				1,023,300				1,124,600				1,000,900				—				—				—				932,200				122,500				825,200				1,200
	Hungary				1,035,700				885,700				996,300				1,145,900				731,400				—				171,100				—				885,700				135,200				888,200				108,200
	Czech Republic				743,000				402,100				431,400				486,400				298,300				—				112,500				—				402,100				75,600				—				—
	Romania				1,913,800				944,100				1,338,100				1,411,600				1,333,900				4,000				—				—				818,800				55,200				661,100				18,500
	Slovak Republic				429,200				238,000				305,000				323,300				256,900				—				17,300				28,300				223,200				20,800				—				—
	Slovenia				125,300				79,300				108,300				126,400				108,300				—				—				—				79,300				18,100				—				—
		Total Central and Eastern Europe			6,161,800				3,481,400				4,202,400				4,618,200				3,729,700				4,000				300,900				28,300				3,341,300				427,400				2,374,500				127,900
		Total Europe			17,644,400				12,698,800				11,238,000				13,678,400				9,363,900				1,008,500				300,900				142,200				12,316,000				1,967,700				9,503,600				895,200
Japan**
	J:COM				7,296,600				7,288,000				2,002,800				3,460,400				1,064,100				620,800				—				—				7,288,000				864,200				6,624,200				911,300
The Americas**
	Chile				2,171,900				1,285,100				900,400				1,425,700				751,200				6,800				—				—				1,285,100				303,000				1,281,700				364,700
	Puerto Rico				331,000				331,000				114,400				160,700				56,700				55,600				—				—				331,000				32,000				331,000				16,400
	Brazil				15,100				15,100				15,100				16,600				—				—				—				15,100				15,100				1,500				—				—
	Peru				66,800				30,300				12,300				14,100				10,800				—				—				—				30,300				3,300				—				—
		Total The Americas			2,584,800				1,661,500				1,042,200				1,617,100				818,700				62,400				—				15,100				1,661,500				339,800				1,612,700				381,100
Australia**
	Austar				2,417,500				—				471,900				474,800				—				8,000				466,800				—				—				—				—				—
Total Continuing Operations					29,943,300				21,648,300				14,754,900				19,230,700				11,246,700				1,699,700				767,700				157,300				21,265,500				3,171,700				17,740,500				2,187,600
Disc Operations — Norway					523,000				270,800				375,700				464,300				334,300				31,000				—				—				270,800				69,500				178,200				29,500
Grand Total					30,466,300				21,919,100				15,130,600				19,695,000				11,581,000				1,730,700				767,700				157,300				21,536,300				3,241,200				17,918,700				2,217,100

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	*	Excludes systems owned by affiliates that were not consolidated for financial reporting purposes as of December 31, 2005, or that were acquired after December 31, 2005. Also excludes 3.1 million households to which J:COM provides only retransmission services of terrestrial television signals. Subscriber information for recently acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies.

	**	With respect to Chile, Japan and Puerto Rico, residential multiple dwelling units with a discounted pricing structure for video, Internet or telephony services are counted on an equivalent bulk unit (EBU) basis. Commercial contracts such as hotels and hospitals are counted by all our subsidiaries on an EBU basis. EBU is calculated by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-bulk residential customers in that market for the comparable tier of service.
	(1)	Homes Passed are homes that can be connected to our networks without further extending the distribution plant, except for DTH and MMDS homes. Our Homes Passed counts are based on census data that can change based on either revisions to the data or from new census results. With the exception of Austar, we do not count homes passed for DTH. With respect to Austar, we count all homes in the areas that Austar is authorized to serve. With respect to MMDS, one home passed is equal to one MMDS subscriber.
	(2)	Two-way Homes Passed are homes passed by our networks where customers can request and receive the installation of a two-way addressable set-top converter, cable modem, transceiver and/or voice port which, in most cases, allows for the provision of video and Internet services and, in some cases, telephone services.
	(3)	Customer Relationships are the number of customers who receive at least one level of service without regard to which service(s) they subscribe. We exclude mobile customers from customer relationships.
	(4)	Revenue Generating Unit is separately an Analog Cable Subscriber, Digital Cable Subscriber, DTH Subscriber, MMDS Subscriber, Internet Subscriber or Telephone Subscriber. A home may contain one or more RGUs. For example, if a residential customer in our Austrian system subscribed to our digital cable service, telephone service and high-speed broadband Internet access service, the customer would constitute three RGUs. Total RGUs is the sum of Analog Cable, Digital Cable, DTH, MMDS, Internet and Telephone Subscribers. In some cases, non-paying subscribers are counted as subscribers during their free promotional service period. Some of these subscribers choose to disconnect after their free service period.
	(5)	Analog Cable Subscriber is comprised of video cable customers that are counted on a per connection basis. In Europe, we have 1.37 million “lifeline” customers that are counted on a per connection basis, representing the least expensive regulated tier of basic cable service, with only a few channels. An analog cable subscriber is not counted as a digital cable subscriber.
	(6)	Digital Cable Subscriber is a customer with one or more digital converter boxes that receives our digital video service. We count a subscriber with one or more digital converter boxes that receives our digital video service as just one subscriber. A digital subscriber is not counted as an analog subscriber. In The Netherlands where our mass digital migration project is underway, a subscriber is moved from the analog cable subscriber count to the digital cable subscriber count when such subscriber accepts delivery of our digital converter box and agrees to accept digital video service regardless of when the subscriber begins to receive our digital video service. The digital video service and the digital converter box are provided at the analog rate for six months after which the subscriber has the option to discontinue the digital service or pay an additional amount to continue to receive the digital service.
	(7)	DTH Subscriber is a home or commercial unit that receives our video programming broadcast directly to the home via a geosynchronous satellite.
	(8)	MMDS Subscriber is a home or commercial unit that receives our video programming via a multipoint microwave (wireless) distribution system.

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	(9)	Internet Homes Serviceable are homes that can be connected to our broadband networks, where customers can request and receive Internet access services.

(10)	Internet Subscriber is a home or commercial unit or EBU with one or more cable modems connected to our broadband networks, where a customer has requested and is receiving high-speed Internet access services. Such numbers do not include customers that receive services via resale arrangements.

(11)	Telephone Homes Serviceable are homes that can be connected to our networks, where customers can request and receive voice services.
(12)	Telephone Subscriber is a home or commercial unit or EBU connected to our networks, where a customer has requested and is receiving voice services. Telephone subscribers as of December 31, 2005, exclude an aggregate of 92,800 mobile telephone subscribers in The Netherlands, Switzerland and Australia. Mobile telephone services generate a significantly lower average revenue per unit than broadband or Voice-over-Internet Protocol or “VOIP” telephone services. Also, such numbers do not include customers that receive services via resale arrangements.
(13)	Included in the subscribers for Switzerland are 25,000 digital cable, 35,800 Internet access and 19,300 telephony subscribers serviced over partner networks, but for which we have the direct customer billing relationship.

	Programming Services

	Europe — UGC Europe, Inc.

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	The Netherlands

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	France

	Switzerland

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	Austria

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	Sweden

	Ireland

	Belgium

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	Poland

	Hungary

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	Czech Republic

	Romania

	Slovak Republic

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	Slovenia

	chellomedia and Other

	•	Interactive Services. Interactive television services and entertainment accessed over the Internet are both expected to play a significant role in the Europe Broadband division’s businesses. chellomedia’s Interactive Services division develops and delivers applications and services for television and personal computers. For television, these include electronic program guides, interactive portals and enhanced services such as multiscreen mosaics. For the web, the division’s services include entertainment portals across the Europe Broadband footprint, video on demand to personal computers and television streaming to personal computers. This group aggregates content for the interactive television and web portals, publishes these portals and handles the group’s business relationships with partners in advertising and sponsorship and sells television and web services to third parties. Interactive services have been launched by Broadband-Netherlands and Broadband-Austria, as discussed above.
	•	Programming. chellomedia’s programming operations include the following:

	Transactional Television. Transactional television is another component of the Europe Broadband division’s digital service offerings and currently offers 56 channels of NVOD programming through Broadband-Netherlands and Broadband-Austria, 32 channels of NVOD programming through Broad-

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	band-Sweden, and 16 channels of NVOD programming through Broadband-Switzerland. Transactional television provides digital customers with a wide range of Hollywood blockbusters and other movies. Transactional television is also in the process of developing VOD services for the Europe Broadband division and third-party cable operators. The VOD service will provide VOD subscribers with enhanced playback functionality and will give subscribers access to a broad array of on-demand programming, including movies, live events, local drama, music videos, kids programming and adult programming.
	Global Thematics. chellomedia produces and markets a number of widely distributed multiterritory thematic channels. These channels target the following genres: extreme sports and lifestyles (Extreme), Horror films (Horror), real life stories (RealityTV), women’s information and entertainment (Club and Romantica) and art house basic movies (Europa Europa). In addition, chellomedia has a channel representation business, which represents both wholly owned and third party channels across Europe. In January 2005, chellomedia acquired an 87.5% interest in Zone Vision, which owns and operates three of our thematic programming channels.
	chellomedia Benelux. With the acquisition of the content business of Canal+ Netherlands in October 2005, chellomedia now delivers a premium sports channel (Sport 1) and a premium movie channel (Film 1) in The Netherlands.
	The channels originate from chellomedia’s digital media center, or “DMC,” located in Amsterdam. The DMC is a technologically advanced production facility that services Europe Broadband and third-party clients with channel origination, post-production and satellite and fiber transmission. The DMC delivers high-quality, customized programming by integrating different video elements, languages (either in dubbed or sub-titled form) and special effects, then transmits the final product to various customers in numerous countries through affiliated and unaffiliated cable systems and DTH platforms.
	chellomedia Iberia. In November 2005, chellomedia acquired the remaining 50% interest in IPS that it did not already own, which owns and manages a suite of seven thematic channels carried on most major pay television platforms in Spain and Portugal. IPS has five wholly owned thematic channels (Canal Hollywood, Odisea, Sol Musica, Panda and Canal Cocina) and two joint venture channels with A&E (Canal de Historia and The Biography).

	•	Priority Telecom. Priority Telecom NV (Priority Telecom) is a facilities-based business telecommunications provider that provides voice services, high-speed Internet access, private data networks and customized network services to over 7,800 business customers primarily in its core metropolitan markets in The Netherlands, Austria and Norway. The current direct and indirect shareholding of chellomedia in Priority Telecom is 62% of the outstanding ordinary shares and, as a result of chellomedia’s holding, directly or indirectly, of 100% of Priority Telecom’s A shares and convertible preference shares, 98% of the total issued share capital. In February 2006, chellomedia announced that it intends to make a cash offer for the outstanding ordinary shares of Priority Telecom that it does not already own. This offer is subject to certain conditions, including receipt of a fairness opinion.
	•	Investments. chellomedia is an investor in branded equity ventures for the development of country-specific programming, including Xtra Music, MTV Networks Polska, Fox Kids Poland and Sports 1. chellomedia also owns or manages UGC Europe’s minority interests in other European businesses. These include a 25% interest in PrimaCom AG, which owns and operates a cable television and broadband network in Germany; a 50% interest in Melita Cable PLC, the only cable television and broadband network in Malta; a 25% interest in Telewizyjna Korporacja Partycypacyjna S.A., a DTH programming platform in Poland; and the indirect investment in Telenet, which is the largest provider of broadband cable services in Belgium and which investment is described below.

	chellomedia Investments purchased 7.7 million shares of Telenet in its initial public offering that closed in October 2005. As a result of the purchase, chellomedia Investments and Belgian Cable Investors, a partnership majority owned and controlled by our indirect wholly owned subsidiary Belgian Cable Holdings, increased their combined economic ownership in the ordinary shares of Telenet from

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	14.1% to 19.89%. In addition, Belgian Cable Investors holds certain call options, expiring in 2007 and 2009 (subject to earlier expiration in certain circumstances), to acquire an additional 10.1% and 15.3%, respectively, of the outstanding equity of Telenet from existing shareholders. The call options are priced at €20 per share as to 6.8 million shares and €25 per share as to 18.7 million shares.
	Belgian Cable Investors holds its indirect 12.18% interest in Telenet common stock through two entities, which we refer to as the Investcos. The Investcos hold in the aggregate 12.86% of the Telenet common stock. Through a shareholders agreement among Belgian Cable Investors and the other unaffiliated investors in the Investcos, Belgian Cable Investors controls the voting and disposition of the Telenet common stock owned by the Investcos, plus an additional 0.93% of the Telenet common stock directly owned by certain of the other investors in the Investcos for a total of 13.79% of the Telenet common stock. Through these arrangements and chellomedia Investment’s ownership of 7.71% of the Telenet common stock purchased in the Telenet initial public offering, we control, subject to the shareholders agreement in effect between the Investcos, Belgian Cable Investors and certain other large shareholders of Telenet, the voting and disposition of 21.5% of the currently outstanding common stock in Telenet.
	We hold 78.4% of the common equity interests and 100% of the preferred equity interests in Belgian Cable Investors. Pursuant to an agreement with the unaffiliated investor that holds the remaining 21.6% of the common interests in Belgian Cable Investors, such investor has the right to require Belgian Cable Holdings to purchase all of such interest in Belgian Cable Investors for the then appraised fair value of such interest during the first 30 days of every six-month period beginning in December 2007. Belgian Cable Holdings has the corresponding right to require the investor to sell all of its interest in Belgian Cable Investors to Belgian Cable Holdings for the appraised fair value during the first 30 days of every six-month period following December 2009. In addition, the Investco shareholders agreement and the Telenet shareholders agreement both contain rights of first offer and rights of first refusal that run for the benefit of Belgian Cable Investors and the Investcos, respectively, and in some circumstances burden their interests.

	Japan

	Jupiter Telecommunications Co., Ltd.

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	Jupiter TV Co., Ltd.

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	Japan — Other

	The Americas

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	VTR GlobalCom S.A.

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	Overview

	Europe

	Communications Services and Competition Directives

	•	Directive for a New Regulatory Framework for Electronic Communications Networks and Services (referred to as the Framework Directive);
	•	Directive on the Authorization of Electronic Communications Networks and Services (referred to as the Authorization Directive);
	•	Directive on Access to and Interconnection of Electronic Communications Networks and Services (referred to as the Access Directive);
	•	Directive on Universal Service and Users’ Rights relating to Electronic Networks and Services (referred to as the Universal Service and Users’ Rights Directive);
	•	Directive on Privacy and Electronic Communications (referred to as the Privacy Directive); and
	•	Directive on Competition in the Markets for Electronic Communications and Services (referred to as the Competition Directive).

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	Competition Law and Other Matters

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	Austria

	France

	Hungary

	The Netherlands

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	Switzerland

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	Japan

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	The Americas

	Chile

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	Broadband Distribution

	Video Distribution

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	•	Europe. The competitive situation in Europe tends to vary from country to country, which is partly reflective of the respective country’s history. For example in some countries, such as Belgium, Switzerland and The Netherlands, there has long been high cable penetration and in Austria and France there are long-established satellite platforms. Nevertheless, broad competitive trends can be seen in many of the European countries in which we operate.

	For video services the key competition has traditionally come either from over the air broadcasts or from satellite distribution. In other countries competition from SMATV or MMDS can be a factor. DTT is increasingly a competitive reality in Europe via a range of different business models from full-blown encrypted pay television offers on DTT to free-to-air. DTT is a growing service in most countries and further launches are expected.
	Also, television over DSL networks is either provided directly by the owner of that network or by a third party and is fast becoming a significant part of the competitive environment. The ability of incumbent operators to now offer the so-called “Triple Play” of video, Internet and telephony services is expected to exert growing competitive pressure on cable-delivered video services. FTTH networks are, so far, rare in Europe although they are present or planned in a number of countries. In addition, there is increasing willingness from government and quasi-government entities in Europe to consider investing their money in such networks which would create a new source of competition.
	Austria. In Austria we are the largest cable company based on number of video cable subscribers. Our primary competition for video services is from free-to-air television received via satellite and from digital DTH platforms. Approximately 50% of Austrian households receive free television compared to approximately 37% of Austrian households served by cable services. Within the footprint covered by Broadband-Austria, 52% of the homes passed subscribe to our cable services (analog and digital). Broadband-Austria may face increased competition in the future from developing technologies. An incumbent telecommunications operator, Telekom Austria AG (Telekom Austria), has recently launched television via a broadband internet connection, or “IPTV”, and the public broadcaster, ORF, has announced it will launch DTT services in early 2006.
	France. France is one of the most competitive markets in which we operate, with multiple video distribution platforms, including cable, satellite, ADSL, DTT and, more recently, mobile telephony. The penetration of pay television services is significantly lower in France than other European countries. Within the footprint of Broadband-France, 33% of the homes passed subscribe to our cable services (digital and analog). This represents slightly less than 6% of the total market, compared to a slightly higher percentage for NC Numericable SA (the largest cable operator). Broadband-France also competes with DTH satellite service and IPTV operators. Satellite television penetration is approximately 17% of the total market and the two largest operators, CanalSat S.A. and TPS (television par satellite), have announced an agreement to merge. According to New Television Insider (February 21, 2006), the combined subscriber base of the two platforms would be approximately 3.7 million. Subscriptions for IPTV services offered by five providers, including the incumbent telecommunications operator, are expected to grow as these operators can offer bundled services. To maintain and improve its market share, Broadband-France offers attractive digital programming packages.
	Hungary. In Hungary, we are the largest cable service provider based on number of video cable subscribers. Of the Hungarian households receiving cable television, 36% subscribe to our service. In addition, Broadband-Hungary provides satellite service to 4% of the Hungarian households. Broadband-Hungary faces competition from Antenna Hungaria Rt., a digital MMDS provider (recently purchased by Swisscom), and from the incumbent telecommunication company Magyar Telekom Rt. (in which Deutshe Telekom purchased a majority stake), which has announced plans to offer a DSL-IPTV service later this year and is currently offering a VOD service to Internet subscribers of its ISP subsidiary.
	Netherlands. The Netherlands has one of the highest cable penetration rates in Europe with 94% of all households having a cable service. Broadband-Netherlands services 37% of the total video households.

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	Satellite television penetration is 8% of the total video households. In addition to satellite television, we face competition from the DTT service, Digitenne, and from IPTV products.
	KPN, the incumbent telecommunications operator, provides a wireless digital television product and has announced the launch of its IPTV service in the second quarter of 2006, which would include VOD, an electronic program guide and a personal video recorder. With its nationwide telecommunications network and ability to offer bundled triple play services, KPN is expected to be a significant competitor.
	Switzerland. Currently, we are the largest cable television provider in Switzerland based on number of video cable subscribers and are the sole provider in substantially all of our network area. There is limited terrestrial television in Switzerland and DTT is at present only available in parts of Switzerland. DTH satellite services are also limited due to various legal restrictions such as construction and zoning regulations or rental agreements that prohibit or impede installation of satellite dishes. Given technical improvements, such as the availability of smaller satellite antennae, as well as the continuous improvements of DTH offerings, we expect increased competition from satellite television operators. Swisscom, the incumbent telecommunications operator, has announced plans to launch IPTV in 2006. In 2005, Swisscom acquired a controlling interest in Cinetrade Group which, among other things, packages and distributes premium pay television content through its subsidiary, Teleclub AG, including sports and movies for which it holds exclusive rights. Swisscom has also launched a wholesale digital television service for cable network operators, including set top boxes and exclusive content, and we expect Swisscom to seek to establish relationships with other cable network operators in Switzerland, including our partner networks, by offering this service.

	•	Japan. Our principal competition in our Japanese cable television business comes from alternative distributors of television signals, including DTH satellite television providers and DTT, as well as from other distributors of video programming using broadband networks. Our current competitors in the satellite television industry include Japan Broadcasting Corporation and WOWOW Inc., which offer broadcast satellite analog and broadcast satellite digital television, and SkyPerfecTV for communications satellite digital television. An amendment to the Law Concerning Broadcast on Telecommunications Service, which became effective in January 2002, has given broadcast companies, which do not have their own facilities, the ability to provide broadcasting services over lines owned by other telecommunications companies. As a result, our Japanese operations face increasing competition from video services offered by broadband providers, established fixed-line telecommunications providers, including NTT and KDDI Corporation (KDDI), and other FTTH-based video service providers, including Opticast, Inc. and K-Opticom Corporation. Other cable television companies are not considered significant competitors in Japan due to the fact that their franchise areas rarely overlap with ours, and the investments required to install new cable would not be justified considering the competition in overlapping franchise areas. As of December 31, 2005, J:COM’s share of the multi-channel video market in Japan was 7%.
	•	The Americas. In Chile, VTR competes primarily with DTH satellite service providers in Chile. As of December 31, 2005, VTR’s share of the video market in Chile was 87%, compared to 7% for DTH satellite service providers and 6% for all others. VTR may face competition in the future from video services offered by or over the networks of fixed-line telecommunications operators using DSL or ADSL technology or FTTH networks or new DTH carriers which might enter into the market. For example, CTC has announced plans to launch IPTV in 2006. To effectively compete, VTR plans to test its digital platform in additional neighborhoods in 2006.

	Internet

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	•	Europe. Across Europe, our key competition in this product market is from the offering of Internet access products using various DSL based technologies both by the incumbent phone companies and third parties. In some countries, third party ISPs now offer services with speeds up to 20 Mbps (enabled by local loop unbundling and improved ADSL technologies (ADSL2+)). These services are priced very competitively and have allowed these ISPs to gain market share. It is expected that the same will occur in other markets as local loop unbundling fees are lowered. The relative lack of FTTH networks at present means that these have, so far, posed a competitive threat in only limited areas. Equally, broadband wireless services are not yet well established. However, increased competitive pressure from both these directions is likely.

	Broadband-Austria’s largest competitor with respect to Internet access services is an incumbent telecommunications company, Telkom Austria. Telkom Austria provides services via DSL. In addition, Broadband-Austria faces competition from unbundled local loop access by operators who can offer Internet services for lower costs. To compete, Broadband-Austria is offering its triple play option at a discount for subscribers who switch from another provider.
	In France, our largest competitors are the DSL operators, with the incumbent telecommunications companies serving 65% of the market, followed by DSL operators with access to the unbundled local loop. As a result, cable operators, including Broadband-France, have only a 6% market share of the total broadband Internet subscribers. Broadband-France has 51% of cable broadband subscriptions.
	In Hungary, the Internet market is growing rapidly. Our primary competitor is the incumbent telecommunications company Magyar Telekom. Currently, Broadband-Hungary provides Internet services to 21% of the total broadband Internet market.
	In The Netherlands, we face competition from KPN, the largest provider, and unbundled local loop providers. Currently, Broadband-Netherlands provides Internet services to 12% of the total broadband Internet market.
	In Switzerland, Swisscom is the largest provider of Internet access services, with an estimated market share of two-thirds of all broadband Internet customers. Broadband-Switzerland serves 20% of all residential broadband Internet customers and 55% of such customers in its network coverage area. As fully unbundled, shared or bitstream access to Swisscom’s network has not yet been implemented in Switzerland, alternative DSL services providers are currently reliant on Swisscom’s wholesale offering or are required to construct their own access network to provide Internet access services.

	•	Japan. In Japan, we compete directly with ADSL providers, such as Softbank Corporation, that offer broadband access to subscribers. ADSL providers often offer their Internet access services at a cost lower than ours. We also compete with FTTH providers that offer broadband Internet access through fiber-optic lines. FTTH-based players, including NTT, Usen Corporation, Tokyo Electric Power Company Incorporated, KDDI and K-Opticom Corporation, currently offer Internet access services through FTTH. Internet access using FTTH technology has become more widely available, and pricing for these services has declined. If continued technological advances or investments by our competitors further improve the services offered through ADSL or FTTH, or make them more affordable or more widely available, cable modem Internet access may become less attractive to our existing or potential subscribers. As of December 31, 2005, J:COM’s share of the high-speed (128 kbps and greater) Internet access market in Japan was 4%.
	•	The Americas. In Chile, VTR faces competition primarily from non-cable-based Internet service providers such as Telefónica S.A and Entel S.A. VTR expects increased pricing pressure as these

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		companies bundle their Internet access service with other services. As of December 31, 2005, VTR’s share of the high-speed (128 kbps and greater) Internet access market in Chile was 43%, compared to 38% for Telefónica and 19% for all others.

	Telephony

	•	Europe. Across Europe our telephony businesses are generally rather small compared to the existing business of the incumbent phone company. The incumbent telephone companies remain our key competitor but mobile operators and new entrant VoIP operators offering service across broadband lines are also important in these markets. Generally, we expect telephony markets to remain extremely competitive.

	In Austria and in Hungary, the incumbent telephone companies dominate the telephony market. Most of the competition to the incumbent telephone operators in these countries is from entities that provide carrier pre-select services. Carrier pre-select allows the end user to choose the voice services of operators other than the incumbent while using the incumbent’s network. We also compete with ISPs that offer VoIP services. In Austria, we serve our subscribers via our time division multiplex telephony platform and in Hungary via our copper wire telephony network and via VoIP over our cable plant. In France, in addition to the incumbent telephone company France Telecom S.A.’s dominance of the telephony market, the national unbundling of the local loop has allowed ISPs to provide VoIP services at competitive prices. To effectively compete in France, Broadband-France has been offering telephony services via VoIP since mid 2005.
	In The Netherlands, KPN is the dominant telephony provider, but all of the large MSOs, including Broadband-Netherlands, as well as ISPs, are now offering VoIP services and gaining market share. In Switzerland, we are the largest VoIP service provider, but Swisscom is the dominant fixed telephony service provider followed by two carriers that offer pre-select services. In the future we may face increased competition as the unbundling of the local loop is implemented.
	In addition to our fixed line telephony service, we offer mobile telephony in Austria, The Netherlands and Switzerland. In Austria, we offer a bundle of fixed line and mobile telephony in a co-branding arrangement with the telephony operator One GmbH. In August 2005, we began offering a prepaid mobile service in The Netherlands via the Orange network owned by France Telecom SA. Recently we began offering mobile telephony services in Switzerland under the Cablecom brand for business and residential customers.

	•	Japan. In Japan, our principal competition in our telephony business comes from NTT and KDDI. We also face increasing competition from new common carriers in the telephony market, as well as ISPs, such as Softbank Corporation, and FTTH-based providers, including K-Opticom Corporation. Further, in December 2004, Japan Telecom Co. Ltd., and in February 2005, KDDI, introduced low-cost fixed-line telephony services. Many of these carriers offer VoIP, and call volume over fixed line services has generally declined as VoIP and mobile phone usage have increased. If competition in the fixed-line telephony market continues to intensify, we may lose existing or potential subscribers to our competitors. As of December 31, 2005, J:COM’s share of the fixed-line telephone market in Japan was

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		2%. J:COM also intends to offer a mobile telephony service in a co-branding arrangement in 2006 with WILLCOM, Inc.
	•	The Americas. In Chile, VTR faces competition from the incumbent telecommunications operator, CTC, and other telecommunications operators such as Telsur, GTD Chile S.A. and Entel S.A. CTC and Telsur operators have substantial experience in providing telephony services, resources to devote to the provision of telephony services and longstanding customer relationships. VTR is also facing stiff competition from wireless telephony providers such as Telefónica Móviles S.A., Smartcom PCS and Entel PCS Telecomunicaciones S.A. and indirect access providers. Competition in both the residential and business telephony markets is expected to increase over time with certain market trends and regulatory changes, such as general price competition, number portability, the replacement of fixed-line with mobile telephony, and the growth of VoIP services. VTR offers its telephony over its cable network or via VoIP. As of December 31, 2005, VTR’s share of the fixed-line telephony market in Chile was 12%, compared to 73% for CTC and 15% for all others.

	Programming Services

	Financial Information About Geographic Areas

	Available Information

Item 1A.	RISK FACTORS

	•	risks that relate to our operating in overseas markets and being subject to foreign regulation;
	•	risks that relate to the technology used in our businesses and the competition we face;
	•	risks that relate to our investments and other financial matters;

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	•	other risks, including risks that relate to our capitalization and the obstacles faced by anyone who may seek to acquire us and risks that relate to the LGI Combination in which LMI and UGC became our subsidiaries.

	•	longer payment cycles by customers in foreign countries that may increase the uncertainty associated with recoverable accounts;
	•	difficulties in staffing and managing international operations;
	•	economic instability;
	•	potentially adverse tax consequences;
	•	export and import restrictions, tariffs and other trade barriers;
	•	increases in taxes and governmental royalties and fees;
	•	involuntary renegotiation of contracts with foreign governments;
	•	changes in foreign and domestic laws and policies that govern operations of foreign-based companies; and
	•	disruptions of services or loss of property or equipment that are critical to overseas businesses due to expropriation, nationalization, war, insurrection, terrorism or general social or political unrest.

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	•	borrow more funds;
	•	pay dividends or make other upstream distributions;
	•	make investments;
	•	engage in transactions with us or other affiliates; or
	•	create liens on their assets.

	•	fund capital expenditures or acquisitions that could improve their value;
	•	meet their loan and capital commitments to their business affiliates;
	•	invest in companies in which they would otherwise invest;
	•	fund any operating losses or future development of their business affiliates;
	•	obtain lower borrowing costs that are available from secured lenders or engage in advantageous transactions that monetize their assets; or
	•	conduct other necessary or prudent corporate activities.

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	•	authorizing a capital structure with multiple series of common stock: a Series B that entitles the holders to ten votes per share; a Series A that entitles the holders to one vote per share; and a Series C that, except as otherwise required by applicable law, entitles the holder to no voting rights;
	•	authorizing the issuance of “blank check” preferred stock, which could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;
	•	classifying our board of directors with staggered three-year terms, which may lengthen the time required to gain control of our board of directors;
	•	limiting who may call special meetings of stockholders;
	•	prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of the stockholders;
	•	establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;
	•	requiring stockholder approval by holders of at least 80% of its voting power or the approval by at least 75% of our board of directors with respect to certain extraordinary matters, such as a merger or consolidation of our company, a sale of all or substantially all of our assets or an amendment to our restated certificate of incorporation or bylaws; and
	•	the existence of authorized and unissued stock, which would allow our board of directors to issue shares to persons friendly to current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of our company.

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Item 1B.	UNRESOLVED STAFF COMMENTS

Item 2.	PROPERTIES

Item 3.	LEGAL PROCEEDINGS

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Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

			Series A								Series B								Series C
			High				Low				High				Low				High				Low
Year Ended December 31, 2005
	First quarter		$	24.50			$	21.81			$	26.33			$	23.76			$	23.56			$	21.12
	Second quarter		$	24.86			$	20.86			$	26.10			$	22.89			$	23.62			$	20.27
	Third quarter		$	27.35			$	23.40			$	29.00			$	24.92			$	26.38			$	22.39
	Fourth quarter		$	27.20			$	21.66			$	29.36			$	22.15			$	26.01			$	20.60
Year Ended December 31, 2004
	Second quarter		$	19.52			$	17.46			$	21.62			$	20.33			$	19.06			$	17.49
	Third quarter		$	19.01			$	14.69			$	21.62			$	17.84			$	18.81			$	15.06
	Fourth quarter		$	24.28			$	17.08			$	25.84			$	18.96			$	23.23			$	16.70

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											Number of
											securities available
			Number of securities								for future issuance
			to be issued upon				Weighted average				under equity
			exercise of				exercise price of				compensation plans
			outstanding options,				outstanding options,				(excluding securities
			warrants and				warrants and				reflected in the first
Plan category			rights(1)				rights(1)				column)
Equity compensation plans approved by security holders:
Liberty Global, Inc. 2005 Incentive Plan (As Amended and Restated Effective March 8, 2006)
	LGI Series A common stock			2,181,361			$	22.98				39,282,805	(5)
	LGI Series B common stock			1,568,562			$	20.10
	LGI Series C common stock			3,749,923			$	20.29
Liberty Global, Inc. 2005 Non-employee Director Incentive Plan (As Amended and Restated Effective March 8, 2006)(2)
	LGI Series A common stock			92,152			$	21.82				9,815,696	(6)
	LGI Series B common stock			—			$	—
	LGI Series C common stock			92,152			$	20.67
Liberty Media International, Inc. Transitional Stock Adjustment Plan(2)(3)
	LGI Series A common stock			980,074			$	17.47				—
	LGI Series B common stock			1,498,154			$	19.85
	LGI Series C common stock			2,478,228			$	17.44
UGC Plans(4)
	LGI Series A common stock			3,278,451			$	18.61				—
	LGI Series B common stock			—			$	—
	LGI Series C common stock			3,129,530			$	18.01
Equity compensation plans not approved by security holders:
	None			—								—
Totals
	LGI Series A common stock			6,532,038								49,098,501	(5)(6)
	LGI Series B common stock			3,066,716
	LGI Series C common stock			9,449,833

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(1)	In addition to the option information included in this table, there are outstanding under the various incentive plans restricted shares of our common stock and stock appreciation rights (each a SAR) with respect to shares of our common stock. Upon exercise, the appreciation of the SAR, which is the difference between the base price of the SAR and the then-market value of the underlying series of our common stock or in certain cases, if lower, a specified price, may be paid in shares of the applicable series of our common stock. For further information, see note 14 to our consolidated financial statements.
(2)	Prior to LMI’s spin off from Liberty Media, Liberty Media approved each of the nonemployee director incentive plan and the transitional plan in its capacity as the then sole shareholder of LMI.
(3)	The transitional plan was adopted in connection with LMI’s spin off from Liberty Media to provide for the supplemental award of options to purchase shares of our common stock and restricted shares of our common stock, in each case, pursuant to adjustments made to outstanding Liberty Media stock incentive awards in accordance with the anti-dilution provisions of Liberty Media’s stock incentive plans. No additional awards will be made under the transitional plan.
(4)	The UGC Plans are comprised of the UnitedGlobalCom, Inc. 1993 Stock Option Plan, amended and restated as of January 22, 2004; the UnitedGlobalCom, Inc. Stock Option Plan for Non-Employee Directors, effective June 1, 1993, amended and restated as of January 22, 2004; the UnitedGlobalCom, Inc. Stock Option Plan for Non-Employee Directors, effective March 20, 1998, amended and restated as of January 22, 2004; and the UnitedGlobalCom 2003 Equity Incentive Plan, effective September 1, 2003. Awards outstanding under each of these plans were converted into awards with respect to our common stock in the LGI Combination. No additional awards will be made under these plans.
(5)	The incentive plan permits grants of, or with respect to, our Series A common stock, Series B common stock or Series C common stock subject to a single aggregate limit of 50 million shares (of which no more than 25 million shares may consist of Series B shares). As of December 31, 2005, an aggregate of 39,282,805 shares of common stock were available for issuance pursuant to the incentive plan (of which no more than 23,372,168 may consist of Series B shares).
(6)	The nonemployee director incentive plan permits grants of, or with respect to, our Series A common stock, Series B common stock or Series C common stock subject to a single aggregate limit of 10 million shares (of which no more than 5 million shares may consist of Series B shares). As of December 31, 2005, an aggregate of 9,815,696 shares of common stock were available for issuance pursuant to the nonemployee director incentive plan (of which no more than 5 million shares may consist of Series B shares).

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(a)

(b)

(c)

(d)

Total number of

Approximate dollar

shares purchased as

value of shares that

part of publicly

may yet be purchased

Total number of

Average price

announced plans

under the plans or

Period

shares purchased(1)

paid per share

or programs

programs

October 1, 2005 through October 31, 2005

Series  A:  400,000

Series A: $24.59

Series  A:  400,000

$

190,162,000

October 1, 2005 through October 31, 2005

Series  C:  200,000

Series C: $23.30

Series  C:  200,000

$

185,502,000

December 1, 2005 through December 31, 2005

Series A: 1,648,231

Series A: $22.91

Series A: 1,648,231

$

147,744,000

December 1, 2005 through December 31, 2005

Series C: 1,255,859

Series C: $21.21

Series C: 1,255,859

$

121,107,000

Total

Series A: 2,048,231

Series A: 2,048,231

Series C: 1,455,859

Series C: 1,455,859

(1)

On June 20, 2005, we announced the authorization of a stock repurchase program. Under the program, we may acquire from time to time up to $200 million in LGI Series A common stock and LGI Series C common stock. At December 31, 2005, we had acquired LGI Series A common stock and LGI Series C common stock at an aggregate cost of $78,893,000 under the stock repurchase program. Subsequent to December 31, 2005, we repurchased 2,698,558 and 1,504,311 additional shares of LGI Series A and LGI Series C common stock, respectively, for aggregate cash consideration of $89,357,000. In addition, on March 8, 2006, our Board of Directors approved a new stock repurchase program under which we may acquire an additional $250 million in LGI Series A common stock and LGI Series C common stock. These stock repurchase programs may be effected through open market transactions and/or privately negotiated transactions, which may include derivative transactions. The timing of the repurchase of shares pursuant to the program will depend on a variety of factors, including market conditions. These programs may be suspended or discontinued at any time.

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Item 6.	SELECTED FINANCIAL DATA

		December 31,
		2005(1)				2004(2)				2003				2002				2001
						as adjusted(3)
		amounts in thousands
Summary Balance Sheet Data:
Investment in affiliates		$	789,066			$	1,865,642			$	1,740,552			$	1,145,382			$	423,326
Other investments		$	569,059			$	838,608			$	450,134			$	187,826			$	916,562
Property and equipment, net		$	7,991,292			$	4,303,099			$	97,577			$	89,211			$	80,306
Intangible assets, net		$	10,839,879			$	3,280,552			$	693,530			$	696,057			$	701,935
Total assets		$	23,378,529			$	13,702,363			$	3,687,037			$	2,800,896			$	2,169,102
Debt and capital lease obligations, including current portion		$	10,114,972			$	4,992,746			$	54,126			$	35,286			$	338,466
Stockholders’ equity		$	7,816,446			$	5,237,083			$	3,418,568			$	2,708,893			$	2,039,593

		Year Ended December 31,
		2005(1)				2004(2)				2003				2002				2001
						as adjusted(3)
		amounts in thousands, except per share amounts
Summary Statement of Operations Data:
Revenue		$	5,151,332			$	2,531,889			$	108,390			$	100,255			$	139,535
Operating income (loss)		$	251,184			$	(314,891	)		$	(1,455	)		$	(39,145	)		$	(122,623	)
Share of earnings (losses) of affiliates(4)		$	(22,949	)		$	38,710			$	13,739			$	(331,225	)		$	(589,525	)
Earnings (loss) from continuing operations(5)		$	(83,591	)		$	(13,709	)		$	20,889			$	(329,887	)		$	(820,355	)
Earnings (loss) from discontinued operations(6)		$	3,494			$	(7,772	)			—				—				—
Net earnings (loss)		$	(80,097	)		$	(21,481	)		$	20,889			$	(329,887	)		$	(820,355	)
Earnings (loss) from continuing operations per common share (pro forma for spin off)(7)		$	(0.20	)		$	(0.04	)		$	0.07				N/A				N/A
Earnings (loss) from discontinued operations per common share		$	0.01			$	(0.03	)			—				N/A				N/A
Earnings (loss) per common share		$	(0.19	)		$	(0.07	)		$	0.07				N/A				N/A

(1)	Prior to 2005, we accounted for our interest in Super Media/ J:COM using the equity method. As a result of a change in the corporate governance of Super Media that occurred on February 18, 2005, we began accounting for Super Media and J:COM as consolidated subsidiaries effective January 1, 2005. In

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	addition, on June 15, 2005, we completed the LGI Combination whereby LGI acquired all of the capital stock of UGC that LMI did not already own and LMI and UGC each became wholly owned subsidiaries of LGI. We also completed a number of other acquisitions during 2005. For additional information, see note 5 to our consolidated financial statements.
(2)	Prior to January 1, 2004, the substantial majority of our operations were conducted through equity method affiliates, including UGC, J:COM and Jupiter TV. In January 2004, we completed a transaction that increased our company’s ownership in UGC and enabled our company to fully exercise our voting rights with respect to our historical investment in UGC. As a result, UGC has been accounted for as a consolidated subsidiary and included in our consolidated financial position and results of operations since January 1, 2004. For additional information, see note 5 to our consolidated financial statements.
(3)	As further discussed in note 22 to our consolidated financial statements, we have retrospectively adjusted our consolidated financial statements to apply the concepts set forth in EITF 05-08 to our income tax accounting for the UGC Convertible Notes that were issued in April 2004.

(4)

Effective January 1, 2002, we adopted SFAS 142, which, among other matters, provides that goodwill, intangible assets with indefinite lives and excess costs that are considered equity method goodwill are no longer amortized, but are evaluated for impairment under SFAS 142 and, in the case of equity method goodwill, APB Opinion No. 18. Share of earnings (losses) of affiliates includes excess basis amortization of $92,902,000 in 2001.

(5)	Our net loss in 2002 and 2001 included our share of UGC’s net losses of $190,216,000 and $439,843,000, respectively. Because we had no commitment to make additional capital contributions to UGC, we suspended recording our share of UGC’s losses when our carrying value was reduced to zero in 2002. In addition, our net loss in 2002 included $247,386,000 of other-than-temporary declines in fair values of investments, and our net loss from continuing operations in 2001 included $534,962,000 of realized and unrealized losses on derivative instruments.
(6)	On January 19, 2006, we sold 100% of UPC Norway and reclassified our consolidated financial statements to present UPC Norway as a discontinued operation. UPC Norway was a subsidiary of UGC, which we did not consolidate prior to 2004. For additional information, see note 5 to our consolidated financial statements.
(7)	Earnings (loss) per common share amounts were computed assuming that the shares issued in the spin off were outstanding since January 1, 2003. In addition, the weighted average share amounts for periods prior to July 26, 2004, the date that certain subscription rights were distributed to stockholders pursuant to a LMI Rights Offering by us, have been increased to give effect to the benefit derived by our company’s stockholders as a result of the distribution of such subscription rights. All LGI share and per share amounts have been retroactively adjusted to give effect to the September 6, 2005 Stock Dividend. For additional information, see note 3 to our consolidated financial statements.

Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	•	Overview. This section provides a general description of our business and recent events.
	•	Results of Operations. This section provides an analysis of our results of operations for the years ended December 31, 2005, 2004 and 2003.
	•	Liquidity and Capital Resources. This section provides an analysis of our corporate and subsidiary liquidity, consolidated cash flow statements, and our off balance sheet arrangements and contractual commitments.
	•	Critical Accounting Policies, Judgments and Estimates. This section discusses those accounting policies that contain uncertainties and require significant judgment in their application.

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	•	Quantitative and Qualitative Disclosures about Market Risk. This section provides discussion and analysis of the foreign currency, interest rate and other market risks that our company faces.

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	Revenue of our Reportable Segments

	Revenue — Years ended December 31, 2005 and 2004

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2005				2004				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	780,934			$	730,483			$	50,451				6.9				6.9				6.9
	Switzerland					122,078				—				122,078				N.M.				N.M.				—
	France					513,762				312,948				200,814				64.2				64.2				6.5
	Austria					322,196				306,479				15,717				5.1				5.0				5.0
	Other Western Europe					321,377				174,389				146,988				84.3				85.1				7.0
		Total Western Europe				2,060,347				1,524,299				536,048				35.2				35.2				6.4
	Hungary					281,707				217,429				64,278				29.6				27.7				27.7
	Other Central and Eastern Europe					370,560				252,064				118,496				47.0				35.6				13.9
		Total Central and Eastern Europe				652,267				469,493				182,774				38.9				31.9				20.3
			Total Europe (Europe Broadband)			2,712,614				1,993,792				718,822				36.1				34.5				9.7
Japan (J:COM)						1,662,105				1,504,709				157,396				10.5				13.5				11.0
Chile (VTR)						444,161				299,951				144,210				48.1				35.6				17.6
Corporate and other						407,564				285,507				122,057				42.8				43.2				20.7
Intersegment eliminations						(75,112	)			(47,361	)			(27,751	)			(58.6	)			(58.9	)			(58.9	)
Total LGI before elimination of equity affiliates						5,151,332				4,036,598				1,114,734
Elimination of equity affiliate (J:COM)						—				(1,504,709	)			1,504,709
	Total consolidated LGI				$	5,151,332			$	2,531,889			$	2,619,443

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	Revenue — Years ended December 31, 2004 and 2003

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2004				2003				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	730,483			$	617,488			$	112,995				18.3				7.7				7.7
	France					312,948				113,842				199,106				174.9				150.2				3.1
	Austria					306,479				266,387				40,092				15.1				4.7				4.7
	Other Western Europe					174,389				106,962				67,427				63.0				52.4				6.8
		Total Western Europe				1,524,299				1,104,679				419,620				38.0				26.0				6.4
	Hungary					217,429				165,310				52,119				31.5				18.8				18.8
	Other Central and Eastern Europe					252,064				197,108				54,956				27.9				18.6				18.6
		Total Central and Eastern Europe				469,493				362,418				107,075				29.5				18.7				18.7
			Total Europe (Europe Broadband)			1,993,792				1,467,097				526,695				35.9				24.2				9.4
Japan (J:COM)						1,504,709				1,233,492				271,217				22.0				12.7				12.7
Chile (VTR)						299,951				229,835				70,116				30.5				15.8				15.8
Corporate and other						285,507				263,020				22,487				8.5				3.2				3.2
Intersegment eliminations						(47,361	)			(55,169	)			7,808				14.2				21.9				21.9
Total LGI before elimination of equity affiliates						4,036,598				3,138,275				898,323
Elimination of equity affiliates						(1,504,709	)			(3,029,885	)			1,525,176
	Total consolidated LGI				$	2,531,889			$	108,390			$	2,423,499

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	Operating Expenses of our Reportable Segments

	Operating expenses — Years ended December 31, 2005 and 2004

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2005				2004				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	251,828			$	205,802			$	46,026				22.4				22.7				22.7
	Switzerland					51,631				—				51,631				N.M.				N.M.				—
	France					257,569				165,489				92,080				55.6				55.5				0.4
	Austria					119,098				115,373				3,725				3.2				3.2				3.2
	Other Western Europe					144,134				71,568				72,566				101.4				102.4				2.4
		Total Western Europe				824,260				558,232				266,028				47.7				47.9				9.5
	Hungary					122,073				93,247				28,826				30.9				29.0				29.0
	Other Central and Eastern Europe					145,340				103,255				42,085				40.8				29.9				7.3
		Total Central and Eastern Europe				267,413				196,502				70,911				36.1				29.5				17.6
			Total Europe (Europe Broadband)			1,091,673				754,734				336,939				44.6				43.1				11.6
Japan (J:COM)						690,127				621,035				69,092				11.1				14.4				11.6
Chile (VTR)						177,543				116,131				61,412				52.9				39.8				14.1
Corporate and other						291,162				216,386				74,776				34.6				35.0				13.9
Intersegment eliminations						(64,990	)			(36,758	)			(28,232	)			(76.8	)			(77.4	)			(77.4	)
Total LGI before elimination of equity affiliates						2,185,515				1,671,528				513,987
Elimination of equity affiliate (J:COM)						—				(621,035	)			621,035
	Total consolidated LGI				$	2,185,515			$	1,050,493			$	1,135,022

	•	Increases in direct programming and copyright costs of $34,995,000 during 2005 primarily due to subscriber growth on the digital and DTH platforms, and to a lesser extent, increased content, higher intercompany charges from chellomedia for programming and consumer price index rate increases, offset, in part, by the termination of an unfavorable programming contract in May 2005.

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	•	Increases in interconnect costs of $10,913,000 during 2005, primarily due to growth in telephony transit service activity in Hungary and growth in VoIP telephony subscribers in The Netherlands, France, Hungary, Poland and Romania. A portion of the Hungary increase may not recur in 2006 due to the expiration of Hungary’s telephony transit service contract.
	•	Increases in salaries and other staff related costs of $24,100,000 during 2005, primarily reflecting increased staffing levels including increased use of temporary personnel, particularly in the customer care and customer operations areas, to sustain the higher levels of activity resulting from:

	•	higher subscriber numbers;
	•	the greater volume of calls per subscriber in The Netherlands and elsewhere that the increased proportion of digital video, broadband Internet and telephony subscribers give rise to compared to an analog video subscriber;
	•	The Netherlands’ program to migrate subscribers from analog video to digital video services, which was launched in October 2005 and is expected to continue throughout 2006;
	•	increased customer service standard levels; and
	•	annual wage increases.

	•	Increases in network related expenses of $8,515,000 during 2005, primarily driven by higher costs in The Netherlands and Hungary.
	•	Increases in bad debt and collection expenses of $4,896,000 due largely to the significant increase in revenue.
	•	Increases in outsourced labor and consultancy fees of $4,000,000 during 2005, driven by projects to increase service levels, network improvements and development of new products in certain of our operations, primarily the launch of mass-market digital service in The Netherlands.

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	Operating expenses — Years ended December 31, 2004 and 2003

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2004				2003				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	205,802			$	204,186			$	1,616				0.8				(8.5	)			(8.5	)
	France					165,489				64,676				100,813				155.9				132.4				3.7
	Austria					115,373				100,720				14,653				14.5				4.0				4.0
	Other Western Europe					71,568				36,505				35,063				96.0				84.8				9.6
		Total Western Europe				558,232				406,087				152,145				37.5				25.4				(1.8	)
	Hungary					93,247				73,800				19,447				26.4				13.8				13.8
	Other Central and Eastern Europe					103,255				83,529				19,726				23.6				14.4				14.4
		Total Central and Eastern Europe				196,502				157,329				39,173				24.9				14.1				14.1
			Total Europe (Europe Broadband)			754,734				563,416				191,318				34.0				22.3				2.6
Japan (J:COM)						621,035				542,242				78,793				14.5				5.7				5.7
Chile (VTR)						116,131				96,965				19,166				19.8				5.9				5.9
Corporate and other						216,386				189,681				26,705				14.1				7.2				7.2
Intersegment eliminations						(36,758	)			(45,505	)			8,747				19.2				26.6				26.6
Total LGI before elimination of equity affiliates						1,671,528				1,346,799				324,729
Elimination of equity affiliates						(621,035	)			(1,284,023	)			662,988
	Total consolidated LGI				$	1,050,493			$	62,776			$	987,717

	•	an increase in customer operation expenses as a result of higher numbers of new and reconnecting subscribers during 2004, as compared to 2003. This higher activity level required Europe Broadband to hire additional staff and use outsourced contractors;
	•	an increase in direct programming costs related to subscriber growth and, in certain markets, an increase in channels on the analog and digital platforms;
	•	a decrease due to net cost reductions across network operations, customer care and billing and collection activities. These reductions were due to improved cost controls across all aspects of the business, including more effective procurement of support services, lower billing and collections charges, with bad debt charges in particular reduced in The Netherlands, and the increased operational leverage of the business;
	•	an increase in intercompany costs for broadband Internet services under the revenue sharing agreement between Europe Broadband and chellomedia;
	•	a decrease related to reduced telephony direct costs in 2004, as compared to 2003, primarily due to decreases in outbound interconnect rates;

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	•	an increase due to annual wage increases; and
	•	a decrease due to cost savings in The Netherlands resulting from a restructuring plan implemented in the second quarter of 2004 whereby the management structure was changed from a three-region model to a centralized management organization.

	SG&A Expenses of our Reportable Segments

	SG&A expenses — Years ended December 31, 2005 and 2004

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2005				2004				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	168,182			$	148,943			$	19,239				12.9				12.9				12.9
	Switzerland					26,922				—				26,922				N.M.				N.M.				—
	France					158,946				101,685				57,261				56.3				56.8				6.1
	Austria					65,851				68,799				(2,948	)			(4.3	)			(4.1	)			(4.1	)
	Other Western Europe					66,075				39,141				26,934				68.8				70.0				9.5
		Total Western Europe				485,976				358,568				127,408				35.5				35.8				7.3
	Hungary					51,256				41,727				9,529				22.8				21.7				21.7
	Other Central and Eastern Europe					77,950				54,331				23,619				43.5				32.6				15.6
		Total Central and Eastern Europe				129,206				96,058				33,148				34.5				27.8				18.3
			Total Europe (Europe Broadband)			615,182				454,626				160,556				35.3				34.1				9.6
Japan (J:COM)						335,681				294,077				41,604				14.1				17.3				13.0
Chile (VTR)						115,168				75,068				40,100				53.4				40.3				18.9
Corporate and other						139,063				120,518				18,545				15.4				16.6				13.4
Inter-segment eliminations						(10,122	)			(10,603	)			481				4.5				4.8				4.8
Total LGI before elimination of equity affiliates						1,194,972				933,686				261,286
Elimination of equity affiliate (J:COM)						—				(294,077	)			294,077
	Total consolidated LGI				$	1,194,972			$	639,609			$	555,363

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	•	Increases in sales and marketing expenses and commissions of $28,320,000 during 2005, reflecting the cost of marketing campaigns designed to promote RGU growth, and support the growth of VoIP telephony services, and the launch of mass-market digital video services in The Netherlands. An increase in the number of gross subscriber additions for broadband Internet and telephony services, particularly in The Netherlands, also contributed to the increase.
	•	Increases in salaries and other staff related costs of $8,243,000 during 2005, reflecting increased staffing levels, particularly in The Netherlands, in sales and marketing and information technology functions, as well as annual wage increases.
	•	Increase in outsourced labor and consultancy cost of $7,083,000 during 2005, reflecting the development of new products in certain of our operations, primarily the launch of mass-market digital service in The Netherlands.

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	SG&A expenses — Years ended December 31, 2004 and 2003

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2004				2003				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	148,943			$	126,357			$	22,586				17.9				7.0				7.0
	France					101,685				37,231				64,454				173.1				147.9				9.5
	Austria					68,799				57,714				11,085				19.2				8.2				8.2
	Other Western Europe					39,141				24,254				14,887				61.4				50.0				10.7
		Total Western Europe				358,568				245,556				113,012				46.0				32.9				8.0
	Hungary					41,727				31,029				10,698				34.5				21.0				21.0
	Other Central and Eastern Europe					54,331				46,917				7,414				15.8				7.0				7.0
		Total Central and Eastern Europe				96,058				77,946				18,112				23.2				12.6				12.6
			Total Europe (Europe Broadband)			454,626				323,502				131,124				40.5				28.0				9.1
Japan (J:COM)						294,077				262,932				31,145				11.8				3.5				3.5
Chile (VTR)						75,068				62,919				12,149				19.3				6.3				6.3
Corporate and other						120,518				111,693				8,825				7.9				1.6				1.6
Intersegment eliminations						(10,603	)			(9,664	)			(939	)			(9.7	)			(0.8	)			(0.8	)
Total LGI before elimination of equity affiliates						933,686				751,382				182,304
Elimination of equity affiliates						(294,077	)			(723,515	)			429,438
	Total consolidated LGI				$	639,609			$	27,867			$	611,742

	•	an increase in marketing expenditures to support subscriber growth and new digital programming services, particularly in The Netherlands;
	•	annual wage increases; and
	•	increased consulting and other information technology support costs associated with the implementation of new customer care systems in several countries and a subscriber management system in Austria.

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	Operating Cash Flow of our Reportable Segments

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	Operating Cash Flow — Years ended December 31, 2005 and 2004

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2005				2004				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	360,924			$	375,738			$	(14,814	)			(3.9	)			(4.2	)			(4.2	)
	Switzerland					43,525				—				43,525				N.M.				N.M.				—
	France					97,247				45,774				51,473				112.5				111.4				28.8
	Austria					137,247				122,307				14,940				12.2				11.9				11.9
	Other Western Europe					111,168				63,680				47,488				74.6				74.9				10.5
		Total Western Europe				750,111				607,499				142,612				23.5				23.2				3.1
	Hungary					108,378				82,455				25,923				31.4				29.1				29.1
	Other Central and Eastern Europe					147,270				94,478				52,792				55.9				43.5				20.1
		Total Central and Eastern Europe				255,648				176,933				78,715				44.5				36.8				24.3
			Total Europe (Europe Broadband)			1,005,759				784,432				221,327				28.2				26.3				7.9
Japan (J:COM)						636,297				589,597				46,700				7.9				10.7				9.3
Chile (VTR)						151,450				108,752				42,698				39.3				27.7				20.3
Corporate and other						(22,661	)			(51,397	)			28,736				55.9				55.3				26.6
Total LGI before elimination of equity affiliates						1,770,845				1,431,384				339,461
Elimination of equity affiliate (J:COM)						—				(589,597	)			589,597
	Total				$	1,770,845			$	841,787			$	929,058

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	Operating Cash Flow — Years ended December 31, 2004 and 2003

																					Increase (decrease)
																					excluding
					Year Ended December 31,								Increase (decrease)												FX and
																									acquisitions
					2004				2003				$				%				FX %				%
					amounts in thousands, except % amounts
Europe (Europe Broadband)
	The Netherlands				$	375,738			$	286,945			$	88,793				30.9				19.5				19.5
	France					45,774				11,935				33,839				283.5				255.5				(21.0	)
	Austria					122,307				107,953				14,354				13.3				3.5				3.5
	Other Western Europe					63,680				46,203				17,477				37.8				28.0				2.6
		Total Western Europe				607,499				453,036				154,463				34.1				22.8				12.9
	Hungary					82,455				60,481				21,974				36.3				23.8				23.8
	Other Central and Eastern Europe					94,478				66,662				27,816				41.7				31.8				31.8
		Total Central and Eastern Europe				176,933				127,143				49,790				39.2				28.0				28.0
			Total Europe (Europe Broadband)			784,432				580,179				204,253				35.2				23.9				16.2
Japan (J:COM)						589,597				428,318				161,279				37.7				27.2				27.2
Chile (VTR)						108,752				69,951				38,801				55.5				38.0				38.0
Corporate and other						(51,397	)			(38,354	)			(13,043	)			(34.0	)			(17.7	)			(17.7	)
Total LGI before elimination of equity affiliates						1,431,384				1,040,094				391,290
Elimination of equity affiliates						(589,597	)			(1,022,347	)			432,750
	Total				$	841,787			$	17,747			$	824,040

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	Years ended December 31, 2005 and 2004

	General

	Revenue

	Operating expense

	SG&A expense

	Stock-based compensation expense

			Year Ended December 31,
			2005				2004
			amounts in thousands
LGI common stock			$	29,011			$	135,455
J:COM common stock				23,147				7,221
Other				7,073				—
	Total		$	59,231			$	142,676

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	Depreciation and amortization

	Impairment of long-lived assets

	Restructuring and other operating charges (credits), net

	Interest expense

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	Interest and dividend income

	Share of earnings (losses) of affiliates, net

			Year Ended December 31,
			2005				2004
			amounts in thousands
Jupiter TV			$	27,759			$	14,644
Telenet				(33,494	)			—
Austar				13,100				976
Mediatti				(6,909	)			(2,331	)
Metrópolis				(6,782	)			(8,355	)
Super Media/ J:COM				—				45,092
Other				(16,623	)			(11,316	)
	Total		$	(22,949	)		$	38,710

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	Realized and unrealized gains (losses) on derivative instruments, net

			Year Ended December 31,
			2005				2004
			amounts in thousands
Cross-currency and interest rate exchange contracts			$	216,022			$	(64,097	)
Embedded derivatives				69,999				23,032
Foreign exchange contracts				11,682				196
Call and put contracts				8,780				1,713
Total return debt swaps				—				2,384
Other				3,490				997
	Total		$	309,973			$	(35,775	)

	Foreign currency transaction gains (losses), net

			Year Ended December 31,
			2005				2004
			amounts in thousands
U.S. dollar debt issued by our European subsidiaries			$	(219,794	)		$	35,684
Euro denominated debt issued by UGC				64,173				(51,903	)
Yen denominated cash held by LGI subsidiary				(33,234	)			7,408
Euro denominated cash held by UGC				(16,668	)			26,192
Intercompany notes denominated in a currency other than the entities’ functional currency				(10,644	)			46,206
Euro denominated debt issued by European subsidiary				10,539				—
Repayment of yen denominated shareholder loans(1)				—				56,061
Other				(3,772	)			(2,134	)
	Total		$	(209,400	)		$	117,514

(1)

On December 21, 2004, we received cash proceeds of ¥43,809 million ($420,188,000 on December 21, 2004) in connection with the repayment by J:COM and another affiliate of all principal and interest due to our company pursuant to then outstanding shareholder loans. In connection with this transaction, we recognized in our statement of operations the foreign currency translation gains that previously had been reflected in accumulated other comprehensive earnings (loss).

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	Gain on exchange of investment securities

	Other-than-temporary-declines in fair value of investments

	Gains (losses) on extinguishment of debt

	Gains on disposition of non-operating assets, net

	Income tax benefit (expense)

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	Years ended December 31, 2004 and 2003

	Stock-based compensation charges

	Interest and dividend income

	Share of earnings of affiliates, net

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	Realized and unrealized gains (losses) on derivative instruments, net

			Year Ended December 31,
			2004				2003
			amounts in thousands
Cross-currency and interest rate exchange contracts			$	(64,097	)		$	—
Embedded derivatives				23,032				—
Total return debt swaps				2,384				37,804
Call and put contracts				1,713				—
Foreign exchange contracts				196				(22,626	)
Other				997				(2,416	)
	Total		$	(35,775	)		$	12,762

	Foreign currency transaction gains (losses), net

			Year Ended December 31,
			2004				2003
			amounts in thousands
Repayment of yen denominated shareholder loans			$	56,061			$	—
Euro denominated debt issued by UGC				(51,903	)			—
Intercompany notes denominated in a currency other than the entities’ functional currency				46,206				—
U.S. dollar debt issued by our European subsidiaries				35,684				—
Euro denominated cash held by UGC				26,192				—
Yen denominated cash held by LGI subsidiary				7,408				—
Other				(2,134	)			5,412
	Total		$	117,514			$	5,412

	Income tax benefit (expense)

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	Sources and Uses of Cash

	Corporate Liquidity

Cash and cash equivalents held by:
LGI and its non-operating subsidiaries				$	660,763
Europe Broadband:
		UPC Holding			14,556
		UPC Broadband Holding and its unrestricted subsidiaries			48,154
		Cablecom Luxembourg and its unrestricted subsidiaries			85,479
J:COM					299,140
VTR					41,263
Other operating subsidiaries					52,845
	Total cash and cash equivalents			$	1,202,200

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	Subsidiary Liquidity

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	Other Subsidiaries.

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	Consolidated Cash Flow Statements

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	Off Balance Sheet Arrangements

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	Contractual Commitments

				Payments due during year ended December 31,
				2006				2007				2008				2009				2010				Thereafter				Total
				amounts in thousands
Debt (excluding interest)				$	175,804			$	320,190			$	313,063			$	350,149			$	2,545,153			$	6,006,210			$	9,710,569
Capital leases (excluding interest)					94,143				76,585				64,238				54,313				45,015				54,485				388,779
Operating leases					122,419				107,990				80,456				60,935				49,876				163,538				585,214
Programming, satellite and other purchase obligations					252,575				78,553				39,438				18,740				9,441				60,008				458,755
Other commitments					143,111				16,164				6,485				4,563				4,447				10,129				184,899
		Total		$	788,052			$	599,482			$	503,680			$	488,700			$	2,653,932			$	6,294,370			$	11,328,216
	Projected cash interest payments on debt and capital lease obligations*			$	657,090			$	596,393			$	555,502			$	544,269			$	431,243			$	963,492			$	3,747,989

*	Based on interest rates and contractual maturities in effect as of December 31, 2005.

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	Carrying Value of Long-lived Assets

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	Fair Value of Acquisition Related Assets and Liabilities

	Carrying Value of Investments

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	Capitalization of Construction and Installation Costs

	Income Tax Accounting

	Derivative Instruments

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Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

	Cash and Investments

	Foreign Currency Risk

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Amounts converted

Local currency

Foreign currency

Maturity dates

amounts in thousands

UPC Broadband Holding

NOK     876,280

€

109,320

January 2006

J:COM

¥       1,033,000

$

8,882

February — May 2006

VTR

CLP 16,408,905

$

30,000

January — December 2006

LG Switzerland

CHF     925,133

€

606,446

April 2007

Austar

AUD       62,987

$

46,150

January 2006 — December 2007

		December 31,				December 31,				December 31,
Spot rates:		2005				2004				2003
Euro			0.8451				0.7333				0.7933
Swiss Franc			1.3153				1.1319				1.238
Japanese yen			117.95				102.41				107.37
Chilean peso			514.01				559.19				593.80
Hungarian forint			213.52				180.59				209.38

		Year ended December 31,
Average rates:		2005				2004				2003
Euro			0.8043				0.8059				0.8806
Swiss Franc			1.2924				1.240				1.3452
Japanese yen			109.81				107.44				116.06
Chilean peso			558.42				609.22				686.04
Hungarian forint			199.49				202.84				228.73

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	Cross-currency and Interest Rate Contracts

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	Cross-currency and Interest Rate Swaps:

			Principal								Interest rate				Interest rate
			amount due				Notional				(on principal				(on notional
			from				amount due to				amount) due from				amount) due to
Maturity date			counterparty				counterparty				counterparty				counterparty
			amounts in thousands
UPC Broadband Holding:
	December 2011(1)		$	525,000			€	393,500				LIBOR + 3.0%				EURIBOR + 3.10%
	October 2012(2)			1,250,000				944,000				LIBOR + 2.5%				6.06%
			$	1,775,000			€	1,337,500
Cablecom GmbH(3):
	April 2007		€	193,333				CHF 299,792				9.74%				8.33%
	April 2007			96,667				149,896				9.74%				8.41%
			€	290,000				CHF 449,688

(1)	Swap contract effectively converts the indicated principal amount of UPC Broadband Holding’s U.S. dollar-denominated LIBOR-indexed floating rate debt to Euro-denominated EURIBOR-indexed floating rate debt.
(2)	Swap contract effectively converts the indicated principal amount of UPC Broadband Holding’s U.S. dollar-denominated LIBOR-indexed floating rate debt to Euro-denominated fixed rate debt.
(3)	Swap contract effectively converts the indicated principal amount of Cablecom Luxembourg’s Euro-denominated fixed-rate debt to CHF-denominated fixed-rate debt.

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	Interest Rate Swaps:

							Variable
							interest rate		Fixed interest
							due from		rate due to
Maturity date			Notional amount				counterparty		counterparty
			amounts in
			thousands
UPC Broadband Holding(1):
	January 2006		€	525,000			EURIBOR			2.26%
	January 2006			550,000			EURIBOR			2.33%
	April 2010			1,000,000			EURIBOR			3.28%
	September 2012			500,000			EURIBOR			2.96%
			€	2,575,000
LG Switzerland(2)
	April 2007		€	560,072			EURIBOR			2.82%
Cablecom Luxembourg(3):
	December 2010			CHF618,480			CHF LIBOR			2.19%
	December 2012			711,520			CHF LIBOR			2.34%
				CHF1,330,000
Austar(4):
	December 2006			AUD165,000			AUD LIBOR			5.67%
	January 2009			115,800			AUD LIBOR			5.72%
				AUD280,800
Puerto Rico subsidiary(5):
	May 2007		$	31,875			LIBOR			3.75%
	May 2009			31,875			LIBOR			3.98%
			$	63,750
VTR(6):
	June 2012			CLP140,401,800			TAB			7.01%
J:COM(7):
	June 30, 2009			¥33,798,240			TIBOR			0.52%
	December 30, 2009			5,500,000			TIBOR			0.55%
	December 30, 2009			1,500,000			TIBOR			0.69%
	December 30, 2009			3,000,000			TIBOR			0.70%
				¥43,798,240

(1)	Each contract effectively fixes the EURIBOR on the indicated principal amount of UPC Broadband Holding’s Euro-denominated debt.
(2)	At December 31, 2005, this contact effectively fixed the EURIBOR rate on the indicated principal amount of LG Switzerland’s Euro-denominated debt. The notional amount of this contract increases ratably through January 2007 to a maximum amount of €597,798,000 ($707,370,000) and remains at that level through the maturity date of the contract.
(3)	Each contract effectively fixes the CHF LIBOR on the indicated principal amount of Cablecom Luxembourg’s CHF-denominated debt.

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(4)	Each contract effectively fixes the AUD LIBOR on the indicated principal amount of Austar’s AUD-denominated debt.
(5)	Each contract effectively fixes the LIBOR on the indicated principal amount of the U.S. dollar-denominated debt of our Puerto Rico subsidiary.
(6)	Contract effectively fixes the 90-day Chilean peso-denominated TAB on the indicated principal amount of VTR’s CLP-denominated debt.
(7)	These swap agreements effectively fix the TIBOR component of the variable interest rates on borrowings pursuant to J:COM’s Credit Facility. For additional information, see note 10 in our consolidated financial statements. J:COM accounts for these derivative instruments as cash flow hedging instruments. Accordingly, the effective component of the change in the fair value of these instruments is reflected in other comprehensive earnings (loss), net.

	Interest Rate Caps:

Start date			Maturity date				Principal amount				Cap level
							amounts in
							thousands
UPC Broadband Holding:
	January 2005			January 2006			€	1,500,000				3.0%
	July 2005			January 2006			€	1,100,000				3.0%
	January 2006			July 2006			€	900,000				4.0%
	January 2006			January 2007			€	600,000				4.0%
	July 2006			January 2007			€	400,000				4.0%
	January 2007			January 2008			€	750,000				3.5%

	UGC Convertible Notes

		December 31,
		2005				2004
		amounts in thousands
Debt host contract		$	437,439			$	462,164
Embedded equity derivative			128,032				193,645
		$	565,471			$	655,809

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	Prepaid Forward Sale Transaction — News Corp. Class A common stock

Debt host contract		$	76,435
Embedded equity derivative			(3,498	)
		$	72,937

	Other derivative instruments

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	Credit Risk

Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Item 9A.	CONTROLS AND PROCEDURES

	Disclosure controls and procedures

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						Total revenue included
		Total assets included in				in our consolidated
		our consolidated financial				financial statements for
		statements as of				the year ended
		December 31, 2005				December 31, 2005
		amounts in thousands
LGI/ Sumisho Super Media, LLC and Jupiter Telecommunications Co., Ltd.		$	4,378,606			$	1,662,105
Cablecom Holdings AG		$	4,125,278			$	122,078
MS Irish Cable B.V.		$	485,092			$	98,982
Astral Telecom SA		$	460,413			$	30,528
Austar United Communications Limited		$	558,834			$	—
Telemach d.o.o		$	102,117			$	24,546
Zone Vision Networks Ltd.		$	88,353			$	58,904
Other		$	101,256			$	12,784

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						Total revenue included
		Total assets included in				in our consolidated
		our consolidated financial				financial statements
		statements as of				for the year ended
		December 31, 2005				December 31, 2005
		amounts in thousands
LGI/ Sumisho Super Media, LLC and Jupiter Telecommunications Co., Ltd.		$	4,378,606			$	1,662,105
Cablecom Holdings AG		$	4,125,278			$	122,078
MS Irish Cable B.V.		$	485,092			$	98,982
Astral Telecom SA		$	460,413			$	30,528
Austar United Communications Limited		$	558,834			$	—
Telemach d.o.o.		$	102,117			$	24,546
Zone Vision Networks Ltd.		$	88,353			$	58,904
Other		$	101,256			$	12,784

	KPMG LLP

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	KPMG LLP

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				December 31,
				2005				2004
								as adjusted
								(note 22)
				amounts in thousands
ASSETS
Current assets:
	Cash and cash equivalents			$	1,202,200			$	2,529,115
	Trade receivables, net				534,243				203,890
	Other receivables, net				112,537				165,631
	Current assets of discontinued operations (note 5)				14,686				—
	Other current assets				398,719				293,947
		Total current assets			2,262,385				3,192,583
Investments in affiliates, accounted for using the equity method, and related receivables (note 6)					789,066				1,865,642
Other investments (note 7)					569,059				838,608
Property and equipment, net (note 9)					7,991,292				4,303,099
Goodwill (note 9)					9,020,071				2,667,279
Franchise rights and other intangible assets not subject to amortization (note 9)					218,002				230,674
Intangible assets subject to amortization, net (note 9)					1,601,806				382,599
Long-term assets of discontinued operations (note 5)					329,871				—
Other assets, net					596,977				221,879
		Total assets		$	23,378,529			$	13,702,363

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					December 31,
					2005				2004
									as adjusted
									(note 22)
					amounts in thousands
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	715,599			$	363,549
	Accrued liabilities and other					669,060				556,015
	Deferred revenue and advance payments from subscribers and others (note 11)					595,982				353,069
	Accrued interest					145,457				89,612
	Current liabilities of discontinued operations (note 5)					35,266				—
	Current portion of debt and capital lease obligations (note 10)					269,947				36,827
		Total current liabilities				2,431,311				1,399,072
Long-term debt and capital lease obligations (note 10)						9,845,025				4,955,919
Deferred tax liabilities (note 12)						546,049				464,661
Long-term liabilities of discontinued operations (note 5)						9,599				—
Other long-term liabilities (note 11)						933,591				432,018
			Total liabilities			13,765,575				7,251,670
Commitments and contingencies (note 20)
Minority interests in subsidiaries						1,796,508				1,213,610
Stockholders’ Equity:
	Series A common stock, $.01 par value. Authorized 500,000,000 shares; issued 232,334,708 and 168,514,962 shares at December 31, 2005 and 2004, respectively					2,323				1,685
	Series B common stock, $.01 par value. Authorized 50,000,000 shares; issued and outstanding 7,323,570 and 7,264,300 shares at December 31, 2005 and 2004, respectively					73				73
	Series C common stock, $.01 par value. Authorized 500,000,000 shares; 239,820,997 and 175,779,262 shares issued at December 31, 2005 and 2004, respectively (note 1)					2,398				1,758
	Additional paid-in capital					9,992,236				6,999,877
	Accumulated deficit					(1,732,527	)			(1,652,430	)
	Accumulated other comprehensive earnings (loss), net of taxes (note 19)					(262,889	)			14,010
	Deferred compensation					(15,592	)			—
	Treasury stock, at cost (notes 5 and 13)					(169,576	)			(127,890	)
			Total stockholders’ equity			7,816,446				5,237,083
	Total liabilities and stockholders’ equity				$	23,378,529			$	13,702,363

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				Year Ended December 31,
				2005				2004				2003
								as adjusted
								(note 22)
				amounts in thousands, except per share amounts
Revenue (note 21)				$	5,151,332			$	2,531,889			$	108,390
Operating costs and expenses:
	Operating (other than depreciation) (note 15)				2,185,515				1,050,493				62,776
	Selling, general and administrative (SG&A) (note 15)				1,194,972				639,609				27,867
	Stock-based compensation charges — primarily SG&A (note 3)				59,231				142,676				4,088
	Depreciation and amortization (note 9)				1,454,863				915,748				15,114
	Impairment of long-lived assets (note 9)				8,320				69,353				—
	Restructuring and other operating charges (credits) (note 17)				(2,753	)			28,901				—
					4,900,148				2,846,780				109,845
		Operating income (loss)			251,184				(314,891	)			(1,455	)
Other income (expense):
	Interest expense (note 15)				(433,467	)			(286,321	)			(2,178	)
	Interest and dividend income (note 15)				77,649				65,494				24,874
	Share of earnings (losses) of affiliates, net (note 6)				(22,949	)			38,710				13,739
	Realized and unrealized gains (losses) on derivative instruments, net (note 8)				309,973				(35,775	)			12,762
	Foreign currency transaction gains (losses), net				(209,400	)			117,514				5,412
	Gain on exchange of investment securities (note 5)				—				178,818				—
	Other-than-temporary declines in fair values of investments (note 7)				(3,403	)			(18,542	)			(6,884	)
	Gains (losses) on extinguishment of debt (note 10)				(33,700	)			27,977				—
	Gains (losses) on disposition of non-operating assets, net (note 6 and note 7)				115,169				43,714				(4,033	)
	Other income (expense), net				(263	)			(7,931	)			6,651
					(200,391	)			123,658				50,343
Earnings (loss) before income taxes, minority interests and discontinued operations					50,793				(191,233	)			48,888
Income tax benefit (expense)					(29,849	)			13,800				(27,975	)
Minority interests in losses (earnings) of subsidiaries					(104,535	)			163,724				(24	)
Earnings (loss) from continuing operations					(83,591	)			(13,709	)			20,889
Discontinued operations:
	Earnings (loss) from operations, net of tax expense of $565,000 and $2,874,000 in 2005 and 2004, respectively (note 5)				3,494				(7,772	)			—
Net earnings (loss)				$	(80,097	)		$	(21,481	)		$	20,889
Historical and pro forma earnings (loss) per common share, basic and diluted (note 3):
	Continuing operations			$	(0.20	)		$	(0.04	)		$	0.07
	Discontinued operations				0.01				(0.03	)			—
				$	(0.19	)		$	(0.07	)		$	0.07

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			Year Ended December 31,
			2005				2004				2003
							as adjusted
							(note 22)
			amounts in thousands
Net earnings (loss)			$	(80,097	)		$	(21,481	)		$	20,889
Other comprehensive earnings (loss), net of taxes (note 19):
	Foreign currency translation adjustments			(298,879	)			165,315				102,321
	Reclassification adjustment for foreign currency translation losses (gains) included in net earnings (loss)			54,834				(36,174	)			(27	)
	Unrealized gains (losses) on available-for-sale securities			19,556				(1,450	)			111,594
	Reclassification adjustment for net gains on available-for-sale securities included in net earnings (loss)			(56,488	)			(120,842	)			—
	Unrealized gain on cash flow hedges			4,040				—				—
	Reclassification adjustment for loss on cash flow hedge included in net earnings (loss)			835				—				—
	Effect of change in estimated blended state income tax rate (note 12)			(797	)			2,745				—
	Other comprehensive earnings (loss)			(276,899	)			9,594				213,888
Comprehensive earnings (loss)			$	(356,996	)		$	(11,887	)		$	234,777

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																							Accumulated other
			Common stock												Additional								comprehensive				Treasury								Total
															Paid-In				Accumulated				earnings (loss),				stock, at				Parent’s				stockholders’
			Series A				Series B				Series C				Capital				deficit				net of taxes				cost				investment				equity
																			as adjusted																as adjusted
																			(note 22)																(note 22)
			amounts in thousands
Balance at January 1, 2003			$	—			$	—			$	—			$	—			$	(1,651,838	)		$	(260,454	)		$	—			$	4,621,185			$	2,708,893
	Net earnings			—				—				—				—				20,889				—				—				—				20,889
	Other comprehensive earnings, net of tax (note 19)			—				—				—				—				—				213,888				—				—				213,888
	Intercompany tax allocation (note 12)			—				—				—				—				—				—				—				(14,774	)			(14,774	)
	Allocation of corporate overhead (note 15)			—				—				—				—				—				—				—				10,873				10,873
	Net cash transfers from parent			—				—				—				—				—				—				—				478,799				478,799
Balance at December 31, 2003				—				—				—				—				(1,630,949	)			(46,566	)			—				5,096,083				3,418,568
	Net loss			—				—				—				—				(21,481	)			—				—				—				(21,481	)
	Other comprehensive earnings, net of tax (note 19)			—				—				—				—				—				9,594				—				—				9,594
	Intercompany tax allocation (note 12)			—				—				—				—				—				—				—				6,133				6,133
	Allocation of corporate overhead (note 15)			—				—				—				—				—				—				—				9,357				9,357
	Issuance of Liberty Media Corporation common stock in acquisition (note 5)			—				—				—				—				—				—				—				152,122				152,122
	Contribution of cash, investments and other net liabilities in connection with spin off (note 2)			—				—				—				—				—				50,982				—				304,578				355,560
	Assumption by Liberty Media Corporation of obligation for stock appreciation rights in connection with spin off (note 2)			—				—				—				—				—				—				—				5,763				5,763
	Adjustment due to issuance of stock by subsidiaries and affiliates and other changes in subsidiary equity, net of taxes (note 13)			—				—				—				6,049				—				—				—				1,025				7,074
	Net cash transfers from parent			—				—				—				—				—				—				—				654,250				654,250
	Change in capitalization in connection with spin off (note 2)			1,399				61				1,460				6,226,391				—				—				—				(6,229,311	)			—
	Common stock issued in rights offering (note 2)			283				12				295				735,071				—				—				—				—				735,661
	Stock issued for stock option exercises (note 14)			3				—				3				11,984				—				—				—				—				11,990
	Repurchase of common stock (note 13)			—				—				—				—				—				—				(127,890	)			—				(127,890	)
	Stock-based compensation (note 3)			—				—				—				20,382				—				—				—				—				20,382
Balance at December 31, 2004			$	1,685			$	73			$	1,758			$	6,999,877			$	(1,652,430	)		$	14,010			$	(127,890	)		$	—			$	5,237,083

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			Common stock												Additional								Accumulated other								Treasury				Total
															Paid-In				Accumulated				comprehensive				Deferred				stock, at				stockholders’
			Series A				Series B				Series C				Capital				deficit				earnings (loss),				compensation				cost				equity
																			as adjusted																as adjusted
																			(note 22)																(note 22)
			amounts in thousands
Balance at January 1, 2005			$	1,685			$	73			$	1,758			$	6,999,877			$	(1,652,430	)		$	14,010			$	—			$	(127,890	)		$	5,237,083
	Net loss			—				—				—				—				(80,097	)			—				—				—				(80,097	)
	Other comprehensive loss, net of tax (note 19)			—				—				—				—				—				(276,899	)			—				—				(276,899	)
	Adjustment due to issuance of stock by J:COM (note 5)			—				—				—				120,672				—				—				—				—				120,672
	Adjustment due to issuance of stock by Telenet (note 6)			—				—				—				38,371				—				—				—				—				38,371
	Cancellation of treasury stock			(30	)			—				(30	)			(127,830	)			—				—				—				127,890				—
	Issuance of restricted stock			4				—				4				16,702				—				—				(16,710	)			—				—
	Shares issued in LGI Combination, net of issuance costs (note 5)			657				—				657				2,875,971				—				—				—				(90,594	)			2,786,691
	Minority interest in deficit of Austar at acquisition date (note 5)			—				—				—				(52,424	)			—				—				—				—				(52,424	)
	Stock issued (acquired) in connection with equity incentive and 401(K) plans			7				—				9				28,356				—				—				—				(89	)			28,283
	Repurchase of common stock			—				—				—				—				—				—				—				(78,893	)			(78,893	)
	Stock-based compensation, net of taxes (note 3)			—				—				—				5,798				—				—				1,118				—				6,916
	Reclassification of SARs obligation (note 13)			—				—				—				50,264				—				—				—				—				50,264
	Net cash received in connection with structured stock repurchase instruments (note 13)			—				—				—				613				—				—				—				—				613
	Tax benefits allocated from Liberty Media Corporation pursuant to Tax Sharing Agreement (note 12)			—				—				—				26,671				—				—				—				—				26,671
	Adjustments due to other changes in subsidiary equity, net of taxes			—				—				—				9,195				—				—				—				—				9,195
Balance at December 31, 2005			$	2,323			$	73			$	2,398			$	9,992,236			$	(1,732,527	)		$	(262,889	)		$	(15,592	)		$	(169,576	)		$	7,816,446

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					Year Ended December 31,
					2005				2004				2003
									as adjusted
									(note 22)
					amounts in thousands
Cash flows from operating activities:
	Net earnings (loss)				$	(80,097	)		$	(21,481	)		$	20,889
	Net loss (earnings) from discontinued operations					(3,494	)			7,772				—
	Net earnings (loss) from continuing operations					(83,591	)			(13,709	)			20,889
	Adjustments to reconcile earnings (loss) from continuing operations to net cash provided by operating activities:
		Stock-based compensation expense				59,231				142,676				4,088
		Depreciation and amortization				1,454,863				915,748				15,114
		Impairment of long-lived assets				8,320				69,353				—
		Restructuring and other charges (credits)				(2,753	)			28,901				—
		Amortization of deferred financing costs and non-cash interest				103,800				40,218				117
		Share of losses (earnings) of affiliates, net				22,949				(38,710	)			(13,739	)
		Realized and unrealized losses (gains) on derivative instruments, net				(309,973	)			35,775				(12,762	)
		Foreign currency transaction losses (gains), net				209,400				(117,514	)			(5,412	)
		Gain on exchange of investment securities				—				(178,818	)			—
		Other-than-temporary declines in fair values of investments				3,403				18,542				6,884
		Losses (gains) on extinguishment of debt				33,700				(27,977	)			—
		Gains on disposition of investments, net				(115,169	)			(43,714	)			(3,759	)
		Deferred income tax expense (benefit)				(74,740	)			(80,500	)			42,278
		Minority interests in earnings (losses) of subsidiaries				104,535				(163,724	)			24
		Non-cash recognition of deferred revenue				(30,298	)			—				—
		Non-cash charges (credits) from Liberty Media Corporation				—				15,490				(3,901	)
		Other non-cash items				4,152				—				(1,750	)
		Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
			Receivables and other operating assets			60,409				(61,426	)			9,653
			Payables and accruals			77,886				167,840				(1,728	)
			Net cash provided by operating activities of discontinued operations			49,978				34,857				—
			Net cash provided by operating activities			1,576,102				743,308				55,996

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					Year Ended December 31,
					2005				2004				2003
									as adjusted
									(note 22)
					amounts in thousands
Cash flows from investing activities:
	Cash paid in connection with LGI Combination					(703,535	)			—				—
	Cash paid in connection with acquisitions, net of cash acquired					(3,584,442	)			(509,696	)			—
	Cash paid for acquisition to be refunded by seller					—				(52,128	)			—
	Return of cash previously paid into escrow in connection with 2004 acquisition					56,883				—				—
	Investments in and loans to affiliates and others					(133,749	)			(256,959	)			(494,193	)
	Proceeds received upon repayment of principal amounts loaned to affiliates					—				535,074				—
	Proceeds received upon repayment of debt securities					—				115,592				—
	Purchases of short-term liquid investments					(55,103	)			(293,734	)			—
	Proceeds received from sale of short-term liquid investments					101,489				246,981				—
	Capital expended for property and equipment					(1,194,993	)			(487,617	)			(22,869	)
	Net cash received (paid) to purchase or settle derivative instruments					82,414				(158,949	)			19,580
	Proceeds received upon dispositions of assets					464,501				315,792				8,230
	Deposits received in connection with pending asset sales					—				80,264				—
	Change in restricted cash					24,734				(27,335	)			—
	Other investing activities, net					29,343				(13,732	)			(16,042	)
		Net cash used by investing activities of discontinued operations				(22,249	)			(19,833	)
		Net cash used by investing activities			$	(4,934,707	)		$	(526,280	)		$	(505,294	)
Cash flows from financing activities:
	Borrowings of debt				$	6,968,835			$	2,301,211			$	41,700
	Repayments of debt and capital lease obligations					(5,413,584	)			(1,857,184	)			(22,954	)
	Net proceeds received from rights offering					—				735,661				—
	Proceeds from issuance of stock by subsidiaries					873,554				488,437				—
	Change in cash collateral					(57,209	)			41,700				(41,700	)
	Contributions from Liberty Media Corporation					—				704,250				478,799
	Treasury stock purchase					(78,893	)			(127,890	)			—
	Payment of deferred financing costs					(101,293	)			(65,951	)			—
	Other financing activities, net					7,876				12,351				—
	Net cash used by financing activities of discontinued operations					(7,444	)			(7	)			—
		Net cash provided by financing activities				2,191,842				2,232,578				455,845
		Effect of exchange rates on cash				(160,152	)			66,756				614
		Net increase (decrease) in cash and cash equivalents:
			Continuing operations			(1,347,200	)			2,501,345				7,161
			Discontinued operations			20,285				15,017				—
			Net increase (decrease) in cash and cash equivalents			(1,326,915	)			2,516,362				7,161
		Cash and cash equivalents:
			Beginning of period			2,529,115				12,753				5,592
			End of period		$	1,202,200			$	2,529,115			$	12,753
			Cash paid for interest		$	286,656			$	280,815			$	932
			Net cash paid for taxes		$	35,565			$	4,264			$	4,651

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(1)	Basis of Presentation

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(2)	Spin Off Transaction and Rights Offering

	Spin Off Transaction

Cash and cash equivalents		$	50,000
Available-for-sale securities			561,130
Net deferred tax liability			(253,163	)
Other net liabilities			(2,407	)
		$	355,560

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	Rights Offering

(3)	Summary of Significant Accounting Policies

	Estimates

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	Reclassifications

	Principles of Consolidation

	Cash and Cash Equivalents and Restricted Cash

	Receivables

	Investments

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	Financial Instruments

	Derivative Instruments

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	Property and Equipment

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	Intangible Assets

	Impairment of Long-Lived Assets

	Income Taxes

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	Defined benefit plans

	Foreign Currency Translation and Transactions

	Revenue Recognition

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	Stock Based Compensation

	Adjustments to Stock Awards

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	Fair Value Method

	Intrinsic Value Method

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			Year Ended December 31,
			2005				2004				2003
							as adjusted
							(note 22)
			amounts in thousands,
			except per share amounts
Earnings (loss) from continuing operations			$	(83,591	)		$	(13,709	)		$	20,889
	Add stock-based compensation charges as determined under the intrinsic value method, net of taxes			7,145				51,524				—
	Deduct stock compensation charges as determined under the fair value method, net of taxes			(35,051	)			(33,007	)			(4,252	)
Pro forma earnings (loss) from continuing operations			$	(111,497	)		$	4,808			$	16,637
Basic and diluted earnings (loss) from continuing operations per share:
	As reported		$	(0.20	)		$	(0.04	)		$	0.07
	Pro forma		$	(0.27	)		$	0.01			$	0.05

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			LGI Series A, LGI Series B and						J:COM
			LGI Series C common stock						ordinary shares
			LGI/LMI Plans(a)		UGC Plans(b)				J:COM Plan
2004 grants:
	Risk-free interest rate		4.09%			3.61%				1.48%
	Expected life		6 years			6 years				5 years
	Expected volatility		25%			100%				40%
	Expected dividend yield		0%			0%				0%
2005 grants:
	Risk-free interest rate		3.7% – 4.55%			n/a				n/a
	Expected life		4.5 years – 6 years			n/a				n/a
	Expected volatility		25% – 31%			n/a				n/a
	Expected dividend yield		0%			n/a				n/a

(a)		Includes the LGI Incentive Plan, the LGI Directors Incentive Plan and the Transitional Plan.
(b)		Includes the UGC Director Plan and the UGC Equity Incentive Plan.

	Earnings (Loss) per Common Share

		Year Ended December 31,
		2005				2004				2003
Basic and diluted:
Weighted average common shares outstanding before adjustment			416,026,877				317,194,444				291,948,636
Adjustment for July 2004 LMI Rights Offering			—				7,767,008				13,732,968
Weighted average common shares, as adjusted			416,026,877				324,961,452				305,681,604

*	The weighted average share amounts for all periods assume that the shares of LMI common stock issued in connection with the spin off were issued and outstanding since January 1, 2003.

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(4)	Recent Accounting Pronouncements

	SFAS No. 155

	SFAS No. 123(R)

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(5)	Acquisitions and Dispositions

	2005 Acquisitions

	LGI Combination

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Shares of LGI Series A common stock issued to UGC stockholders other than LMI and its wholly owned subsidiaries (including 2,067,786 shares issued to UGC subsidiaries)			65,694,765
Shares of LGI Series C common stock issued to UGC stockholders other than LMI and its wholly owned subsidiaries (including 2,067,786 shares issued to UGC subsidiaries)			65,694,765
			131,389,530
Fair value of LGI Series A and LGI Series C common stock issued to UGC stockholders other than LMI and its wholly owned subsidiaries		$	2,878,219
Fair value of LGI Series A and LGI Series C common stock issued to UGC subsidiaries			(90,594	)
Fair value of outstanding LGI Series A and LGI Series C common stock issued to UGC stockholders			2,787,625
Cash consideration			694,517
Direct acquisitions costs			9,018
Total purchase price			3,491,160
Elimination of minority interest in UGC			(994,817	)
Purchase price allocated to the net assets of UGC		$	2,496,343

	Consolidation of Super Media/ J:COM

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	Acquisition of Cablecom

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	Acquisition of Astral

	Acquisition of NTL Ireland

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	Acquisition of Austar

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	VTR Acquisition of Metrópolis

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	Opening Balance Sheet Information of Significant 2005 Acquisitions

							Super
			LGI				Media/												NTL
			Combination(d)				J:COM				Cablecom				Astral				Ireland				Austar				Metrópolis
			amounts in thousands
Effective acquisition or consolidation date for financial reporting purposes				June 15, 2005				January 1, 2005			October  31, 2005					October 1, 2005				May 1, 2005				December 31, 2005				April 1, 2005
Opening balance sheet
	Cash		$	—			$	101,749			$	27,763			$	12,206			$	9,324			$	9,549			$	7,376
	Other current assets			126				165,534				200,001				10,860				16,297				27,376				6,002
	Investments in affiliates(a)			178,245				(987,290	)			5,736				782				—				(123,084	)			(67,909	)
	Property and equipment, net			223,571				2,441,196				1,116,381				128,087				282,555				92,381				143,173
	Goodwill			1,617,324				1,875,285				2,196,749				260,484				208,053				316,085				226,941
	Intangible assets subject to amortization(b)			622,500				—				512,985				67,404				—				72,756				—
	Other assets, net			(77,397	)			142,393				27,476				—				9,950				4,263				9,797
	Current liabilities			—				(398,549	)			(359,207	)			(35,543	)			(70,502	)			(61,530	)			(79,611	)
	Long-term debt and capital lease obligations			(11,697	)			(2,112,722	)			(1,415,272	)			(14,865	)			—				(217,927	)			(38,394	)
	Other long-term liabilities			(56,329	)			(415,099	)			(75,043	)			(19,184	)			(6,881	)			(16,809	)			(12,229	)
	Minority interests in subsidiaries			994,817				(812,497	)			(11,666	)			—				—				—				(198,241	)
	Additional paid-in capital(c)			—				—				—				—				—				52,424				198,241
Total purchase price			$	3,491,160			$	—			$	2,225,903			$	410,231			$	448,796			$	155,484			$	195,146
	Cash consideration		$	694,517			$	—			$	2,212,258			$	407,074			$	428,214			$	154,952			$	—
	Direct acquisition costs			9,018				—				13,645				3,157				20,582				532				3,391
	Issuance of derivative instrument			—				—				—				—				—				—				11,755
	Issuance of LGI stock			2,787,625				—				—				—				—				—				—
	Issuance of subsidiary stock			—				—				—				—				—				—				180,000
Total purchase price			$	3,491,160			$	—			$	2,225,903			$	410,231			$	448,796			$	155,484			$	195,146

(a)		The investment in affiliate amounts for Super Media/ J:COM, Austar and Metrópolis include reductions of $1,052,468,000, $161,835,000, and $67,909,000, respectively, related to the elimination of the carrying amount of our equity method investment in such entities upon our acquisition of a controlling interest.
(b)		The amounts reflected as intangible assets subject to amortization primarily relate to our preliminary assessment of the fair value of customer relationships. Such acquired intangible assets had a preliminary weighted average life of 9.2 years at the respective acquisition dates.
(c)		The minority interests’ share in the deficit of Austar at the transaction date has been recorded as a reduction of additional paid-in capital in accordance with the guidance set forth in EITF D-84,

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		Accounting for Subsequent Investments in an Investee After Suspension of Equity Method Loss Recognition When an Investor Increases Its Ownership Interest from Significant Interest to Control through a Market Purchase of Voting Securities.
(d)		The amounts reflected in the LGI Combination column reflect the adjustments to the consolidated assets and liabilities of UGC at June 15, 2005 that resulted from the application of step acquisition accounting in connection with the LGI Combination.

	Pro Forma Information for 2005 Acquisitions

		Years Ended December 31,
		2005				2004
						as adjusted
						(note 22)
		amounts in thousands,
		except per share amounts
Revenue		$	6,195,253			$	5,385,410
Net loss from continuing operations		$	(338,863	)		$	(524,388	)
Loss per share from continuing operations		$	(0.72	)		$	(1.16	)

	Other 2005 Acquisitions

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	2004 Acquisitions

	Acquisition of Controlling Interest in UGC

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Cash			$	310,361
Other current assets				298,826
Property and equipment				3,386,252
Goodwill				2,023,374
Customer relationships(1)				379,093
Trade names				62,441
Other intangible assets				4,532
Investments and other assets				347,542
Current liabilities				(1,407,275	)
Long-term debt				(3,615,902	)
Deferred income taxes				(754,111	)
Other liabilities				(259,492	)
Minority interest				(607,692	)
	Aggregate purchase price			167,949
Issuance of Liberty Media common stock				(152,122	)
	Aggregate cash consideration (including direct acquisition costs)		$	15,827

(1)	The estimated weighted-average amortization period on January 1, 2004 for the intangible asset associated with customer relationships was 4.9 years.

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	PHL

	Acquisitions of Noos

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		amounts in
		thousands
Working capital		$	(106,744	)
Property, plant and equipment			769,852
Intangible assets(1)			11,815
Other long-term assets			4,066
Other long-term liabilities			(7,099	)
Minority interest			(85,359	)
Equity in UPC Broadband France			6,102
Cash consideration for Noos			592,633
Less cash acquired			(18,791	)
Net cash consideration for Noos		$	573,842

(1)	The estimated weighted-average amortization period for the intangible assets (favorable programming contract and tradename) at acquisition was 3.8 years.

	Pro Forma Information reflecting 2004 Acquisitions

		Years ended December 31,
		2004				2003
		as adjusted
		(note 22)
		amounts in thousands, except
		per share amounts
Revenue		$	2,731,769			$	2,261,564
Net loss from continuing operations		$	(27,292	)		$	(669,058	)
Loss per share from continuing operations		$	(0.08	)		$	(2.19	)

	Discontinued Operations and Other Dispositions

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		Year ended December 31,
		2005				2004
		amounts in thousands
Revenue		$	133,335			$	112,395
Operating income		$	15,650			$	1,018
Earnings (loss) before income taxes and minority interests		$	4,060			$	(11,610	)
Net earnings (loss) from discontinued operations		$	3,494			$	(7,772	)

Current assets			$	14,686
Property and equipment, net				162,915
Intangible and other assets, net				166,956
	Total assets		$	344,557
Current liabilities			$	35,266
Other long-term liabilities				9,599
	Total liabilities		$	44,865

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(6)	Investments in Affiliates Accounted for Using the Equity Method

										December 31,
		December 31, 2005								2004
		Percentage				Carrying				Carrying
		ownership				amount				amount
		dollar amounts in thousands
Jupiter TV Co., Ltd. (Jupiter TV)			50	%		$	266,422			$	290,224
Telenet Group Holdings N.V. (Telenet)			(a	)			293,551				232,649
Mediatti Communications, Inc. (Mediatti)			(b	)			59,072				58,586
Super Media/ J:COM			(c	)			—				1,052,468
Metrópolis-Intercom S.A. (Metrópolis)			(d	)			—				57,344
Austar			(e	)			—				19,204
Other			Various				170,021				155,167
						$	789,066			$	1,865,642

(a)		For a description of our indirect ownership interest in Telenet, see the discussion under Telenet below.
(b)		At December 31, 2005, we held our ownership interest in Mediatti through a 94.6% owned subsidiary, which in turn owned a 36.4% voting interest and an additional 6.64% interest that has limited veto rights.
(c)		For information concerning our ownership interest in Super Media and Super Media’s ownership interest in J:COM, see note 5.
(d)		For financial reporting purposes, we began consolidating the results of operations of Metrópolis effective April 1, 2005. See note 5.
(e)		For financial reporting purposes, we began consolidating the results of Austar effective December 31, 2005. See note 5.

		Year ended December 31,
		2005				2004				2003
		amounts in thousands
Jupiter TV		$	27,759			$	14,644			$	11,775
Telenet			(33,494	)			—				—
Austar			13,100				976				—
Mediatti			(6,909	)			(2,331	)			—
Metrópolis			(6,782	)			(8,355	)			(8,291	)
Super Media/ J:COM			—				45,092				20,341
Other			(16,623	)			(11,316	)			(10,086	)
		$	(22,949	)		$	38,710			$	13,739

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	Jupiter TV

			December 31,
			2005				2004
			amounts in thousands
Financial Position
Current assets			$	237,384			$	150,059
Investments				70,569				67,669
Property and equipment, net				47,123				52,017
Intangible and other assets, net				59,207				36,604
	Total assets		$	414,283			$	306,349
Current liabilities			$	179,120			$	108,684
Debt and capital leases				31,129				56,861
Other liabilities				6,289				3,576
Minority interest				48,667				29,840
Owners’ equity				149,078				107,388
	Total liabilities and equity		$	414,283			$	306,349

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				Year ended December 31,
				2005				2004				2003
				amounts in thousands
Results of Operations
Revenue				$	793,233			$	567,493			$	412,013
Operating, selling, general and administrative expenses					(646,246	)			(486,715	)			(357,509	)
Depreciation, amortization and impaiment					(23,039	)			(12,977	)			(10,427	)
	Operating income				123,948				67,801				44,077
	Other, net				(68,422	)			(37,704	)			(21,112	)
		Net earnings		$	55,526			$	30,097			$	22,965

	Telenet

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			December 31, 2005
			amounts in
			thousands
Financial Position
Current assets			$	399,936
Property and equipment, net				1,116,932
Goodwill				1,201,659
Other assets, net				374,506
	Total assets		$	3,093,033
Current liabilities			$	616,613
Debt				1,577,843
Other liabilities				57,444
Owners’ equity				841,133
	Total liabilities and equity		$	3,093,033

			Year ended December 31, 2005
			amounts in thousands
Results of Operations
Revenue			$	916,253
Operating, selling, general and administrative expenses				(505,234	)
Depreciation and amortization				(246,203	)
Operating income				164,816
Interest expense, net				(239,441	)
Other, net				(15,852	)
	Net loss		$	(90,477	)

	Mediatti

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	Super Media/ J:COM

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		December 31, 2004
		amounts in
		thousands
Financial Position
Investments		$	65,178
Property and equipment, net			2,441,196
Intangible and other assets, net			1,783,162
Total assets		$	4,289,536
Debt		$	2,260,805
Other liabilities			677,595
Owners’ equity			1,351,136
Total liabilities and equity		$	4,289,536

			Year ended December 31,
			2004				2003
			amounts in thousands
Results of Operations
Revenue			$	1,504,709			$	1,233,492
Operating, selling, general and administrative expenses				(915,112	)			(805,174	)
Stock-based compensation				(783	)			(840	)
Depreciation and amortization				(378,868	)			(313,725	)
Operating income				209,946				113,753
Interest expense, net				(94,958	)			(68,980	)
Other, net				(15,532	)			1,335
	Net earnings		$	99,456			$	46,108

	UGC

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				Year ended
				December 31, 2003
				amounts in thousands
Results of Operations
Revenue				$	1,891,530
Operating, selling, general and administrative expenses					(1,262,648	)
Depreciation and amortization					(808,663	)
Impairment of long-lived assets, restructuring charges and stock-based compensation					(476,233	)
	Operating loss				(656,014	)
Interest expense					(327,132	)
Gain on extinguishment of debt					2,183,997
Share of earnings of affiliates					294,464
Foreign currency transaction gains, net					121,612
Minority interest in losses of subsidiaries					183,182
Other, net					195,259
		Net income from continuing operations		$	1,995,368

(7)	Other Investments

			December 31,
			2005				2004
			amounts in thousands
ABC Family			$	365,082			$	387,380
News Corp.				85,525				102,630
SBS				—				241,500
Other				118,452				107,098
	Total other investments		$	569,059			$	838,608

	ABC Family

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	SBS

	News Corp.

	Other

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	Unrealized holding gains and losses

		December 31,
		2005								2004
		Equity				Debt				Equity				Debt
		securities				securities				securities				securities
						amounts in thousands
Gross unrealized holding gains		$	30,957			$	—			$	92,195			$	18,516
Gross unrealized holding losses		$	—			$	—			$	—			$	—

(8)	Derivative Instruments

				December 31,
				2005				2004
				amounts in thousands
Cross-currency and interest rate exchange contracts				$	174,572			$	(23,264	)
Embedded derivatives(1)					1,013				(48	)
Foreign exchange contracts					6,335				(5,257	)
Call and put contracts					12,859				49,218
Total return debt swaps					—				23,731
Other					830				(3,305	)
		Total(1)		$	195,609			$	41,075
Current asset				$	7,328			$	73,507
Long-term asset					227,939				2,568
Current liability					(22,453	)			(14,636	)
Long-term liability					(17,205	)			(20,364	)
	Total(1)			$	195,609			$	41,075

(1)	Excludes embedded derivative components of the UGC Convertible Notes and the prepaid forward sale of News Corp. Class A common stock, as these amounts are presented together with the host debt instrument in long-term debt and capital lease obligations in our consolidated balance sheet. See note 10.

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			Year ended December 31,
			2005				2004				2003
			amounts in thousands
Cross-currency and interest rate exchange contracts			$	216,022			$	(64,097	)		$	—
Embedded derivatives(1)				69,999				23,032				—
Foreign exchange contracts				11,682				196				(22,626	)
Call and put contracts				8,780				1,713				—
Total return debt swaps				—				2,384				37,804
Other				3,490				997				(2,416	)
	Total		$	309,973			$	(35,775	)		$	12,762

(1)	Includes gains and losses associated with the embedded derivative component of the UGC Convertible Notes and the August 2005 prepaid forward sale of the News Corp. Class A common stock. See note 10.

	Cross-currency and Interest Rate Contracts

	Cross-currency and Interest Rate Swaps:

											Interest rate (on
			Principal amount								principal amount)				Interest rate (on
			due from				Notional amount due				due from				notional amount) due
Maturity date			counterparty				to counterparty				counterparty				to counterparty
							amounts in thousands
UPC Broadband Holding B.V. (UPC Broadband Holding), a subsidiary of UPC Holding:
	December 2011(1)		$	525,000			€	393,500				LIBOR + 3.0	%			EURIBOR + 3.10	%
	October 2012(2)			1,250,000				944,000				LIBOR + 2.5	%			6.06	%
			$	1,775,000			€	1,337,500
Cablecom GmbH Cablecom GmbH), a subsidiary of Cablecom(3):
	April 2007			€193,333				CHF 299,792				9.74	%			8.33	%
	April 2007			96,667				149,896				9.74	%			8.41	%
				€290,000				CHF 449,688

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(1)	Swap contract effectively converts the indicated principal amount of UPC Broadband Holding’s U.S. dollar-denominated LIBOR-indexed floating rate debt to Euro-denominated EURIBOR-indexed floating rate debt.
(2)	Swap contract effectively converts the indicated principal amount of UPC Broadband Holding’s U.S. dollar-denominated LIBOR-indexed floating rate debt to Euro-denominated fixed rate debt.
(3)	Swap contract effectively converts the indicated principal amount of Cablecom Luxembourg’s Euro-denominated fixed-rate debt to CHF-denominated fixed-rate debt.

	Interest Rate Swaps:

								Variable interest				Fixed interest rate
								rate due from				due to
Maturity date				Notional amount				counterparty				counterparty
				amounts in thousands
UPC Broadband Holding(1):
	January 2006				€525,000				EURIBOR				2.26	%
	January 2006				550,000				EURIBOR				2.33	%
	April 2010				1,000,000				EURIBOR				3.28	%
	September 2012				500,000				EURIBOR				2.96	%
					€2,575,000
LG Switzerland(2)
		April 2007			€560,072				EURIBOR				2.82	%
Cablecom Luxembourg S.C.A. (Cablecom Luxembourg), a subsidiary of Cablecom and the parent of Cablecom GmbH(3):
	December 2010				CHF618,480				CHF LIBOR				2.19	%
	December 2012				711,520				CHF LIBOR				2.34	%
					CHF1,330,000
Austar(4):
	December 2006				AUD165,000				AUD LIBOR				5.67	%
	January 2009				115,800				AUD LIBOR				5.72	%
					AUD280,800
Puerto Rico subsidiary(5):
		May 2007		$	31,875				LIBOR				3.75	%
		May 2009			31,875				LIBOR				3.98	%
				$	63,750
VTR(6):
		June 2012			CLP140,401,800				TAB				7.01	%

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							Variable interest				Fixed interest rate
							rate due from				due to
Maturity date			Notional amount				counterparty				counterparty
			amounts in thousands
J:COM(7):
	June 30, 2009			¥33,798,240				TIBOR				0.52	%
	December 30, 2009			5,500,000				TIBOR				0.55	%
	December 30, 2009			1,500,000				TIBOR				0.69	%
	December 30, 2009			3,000,000				TIBOR				0.70	%
				¥43,798,240

(1)	Each contract effectively fixes the EURIBOR on the indicated principal amount of UPC Broadband Holding’s Euro-denominated debt.
(2)	At December 31, 2005, this contact effectively fixed the EURIBOR rate on the indicated principal amount of LG Switzerland’s Euro-denominated debt. The notional amount of this contract increases rateably through January 2007 to a maximum amount of €597,798,000 ($707,370,000) and remains at that level through the maturity date of the contract.
(3)	Each contract effectively fixes the CHF LIBOR on the indicated principal amount of Cablecom Luxembourg’s CHF-denominated debt.
(4)	Each contract effectively fixes the Australian dollar (AUD) LIBOR on the indicated principal amount of Austar’s AUD-denominated debt.
(5)	Each contract effectively fixes the LIBOR on the indicated principal amount of the U.S. dollar-denominated debt of our Puerto Rico subsidiary.
(6)	Contract effectively fixes the 90-day Chilean peso-denominated TAB (Tasa Activa Bancaria) on the indicated principal amount of VTR’s CLP-denominated debt.
(7)	These swap agreements effectively fix the TIBOR (Tokyo Interbank Offered Rate) component of the variable interest rates on borrowings pursuant to J:COM’s Credit Facility (see note 10). J:COM accounts for these derivative instruments as cash flow hedging instruments. Accordingly, the effective component of the change in the fair value of these instruments is reflected in other comprehensive earnings (loss), net.

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	Interest Rate Caps:

											Cap
Start date			Maturity date				Principal amount				level
							amounts in thousands
UPC Broadband Holding:
	January 2005			January 2006			€	1,500,000				3.0%
	July 2005			January 2006			€	1,100,000				3.0%
	January 2006			July 2006			€	900,000				4.0%
	January 2006			January 2007			€	600,000				4.0%
	July 2006			January 2007			€	400,000				4.0%
	January 2007			January 2008			€	750,000				3.5%

	Embedded Derivatives

	Foreign Exchange Contracts

Amounts converted

Local currency

Foreign currency

Maturity dates

amounts in thousands

UPC Broadband Holding

NOK     876,280

€

109,320

January 2006

J:COM

¥       1,033,000

$

8,882

February — May 2006

VTR

CLP 16,408,905

$

30,000

January — December 2006

LG Switzerland

CHF     925,133

€

606,446

April 2007

Austar

AUD      62,987

$

46,150

January 2006 — December 2007

	CCC Put Right

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	Telenet Call Options and Warrants

	Call Agreements on LGI Series A common stock

	Total Return Debt Swaps

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(9)	Long-lived Assets

	Property and Equipment

		December 31,
		2005				2004
		amounts in thousands
Cable distribution systems		$	8,442,910			$	4,393,841
Support equipment, buildings and land			1,278,566				910,067
			9,721,476				5,303,908
Accumulated depreciation			(1,730,184	)			(1,000,809	)
Net property and equipment		$	7,991,292			$	4,303,099

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	Goodwill

																									Foreign
																	Reclassified				Release of				currency
																	to				pre-acquisition				translation
					January 1,				LGI				Other				discontinued				valuation				adjustments				December 31,
					2005				Combination				acquisitions				operations				allowances				and other				2005
																	amounts in thousands
Europe (Europe Broadband)
	The Netherlands				$	823,496			$	573,801			$	—			$	—			$	(5,570	)		$	(120,840	)		$	1,270,887
	Switzerland					—				—				2,196,749				—				—				(31,337	)			2,165,412
	France					6,494				66,611				26,795				—				(386	)			(5,073	)			94,441
		Austria				545,214				183,880				—				—				(7,356	)			(75,667	)			646,071
	Other Western Europe					282,048				200,026				208,053				(122,876	)			(2,008	)			(73,241	)			492,002
			Total Western Europe			1,657,252				1,024,318				2,431,597				(122,876	)			(15,320	)			(306,158	)			4,668,813
		Hungary				192,984				198,548				—				—				(887	)			(38,312	)			352,333
		Other Central and Eastern Europe				121,383				218,291				289,998				—				(3,065	)			(13,254	)			613,353
			Total Central and Eastern Europe			314,367				416,839				289,998				—				(3,952	)			(51,566	)			965,686
			Total Europe (Europe Broadband)			1,971,619				1,441,157				2,721,595				(122,876	)			(19,272	)			(357,724	)			5,634,499
Japan (J:COM)(1)						2,077,861				—				123,765				—				(40,261	)			(155,110	)			2,006,255
Chile (VTR)						199,086				101,482				226,941				—				(26,362	)			68,746				569,893
Corporate and Other						293,998				74,685				443,863				—				—				(3,122	)			809,424
			Total LGI(1)		$	4,542,564			$	1,617,324			$	3,516,164			$	(122,876	)		$	(85,895	)		$	(447,210	)		$	9,020,071

(1)	The January 1, 2005 balance for J:COM includes $1,875,285,000 that is associated with the January 1, 2005 consolidation of Super Media/ J:COM. See note 5.

														Release of								Foreign
														pre-acquisition								currency
						January 1,								valuation								translation				December 31,
						2004				Acquisitions				allowance				Impairments				adjustments				2004
														amounts in thousands
Europe (Europe Broadband)
The Netherlands						$	—			$	771,672			$	(6,748	)		$	—			$	58,572			$	823,496
	France						—				6,344				—				—				150				6,494
	Austria						—				509,505				(3,292	)			—				39,001				545,214
	Other Western Europe						—				263,491				(5,095	)			—				23,652				282,048
		Total Western Europe					—				1,551,012				(15,135	)			—				121,375				1,657,252
	Hungary						—				173,838				(8,137	)			—				27,283				192,984
	Other Central and Eastern Europe						—				134,753				(30,233	)			—				16,863				121,383
			Total Central and Eastern Europe				—				308,591				(38,370	)			—				44,146				314,367
				Total Europe (Europe Broadband)			—				1,859,603				(53,505	)			—				165,521				1,971,619
Japan (J:COM)							202,576				—				—				—				—				202,576
Chile (VTR)							—				191,785				(4,575	)			—				11,876				199,086
Corporate and Other							323,000				—				—				(29,000	)			(2	)			293,998
				Total LGI		$	525,576			$	2,051,388			$	(58,080	)		$	(29,000	)		$	177,395			$	2,667,279

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	Indefinite-lived Intangible Assets

	Intangible Assets Subject to Amortization, Net

		December 31,
		2005				2004
		amounts in thousands
Gross carrying amount
Customer relationships		$	1,600,279			$	426,213
Other			75,204				31,420
		$	1,675,483			$	457,633
Accumulated amortization
Customer relationships		$	(65,140	)		$	(69,038	)
Other			(8,537	)			(5,996	)
		$	(73,677	)		$	(75,034	)
Net carrying amount
Customer relationships		$	1,535,139			$	357,175
Other			66,667				25,424
		$	1,601,806			$	382,599

2006			$	214,667
2007				212,827
2008				209,285
2009				186,204
2010				183,921
Thereafter				594,902
	Total		$	1,601,806

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(10)	Debt

					December 31,
					2005				2004
					amounts in thousands
Debt:
	UPC Broadband Holding Bank Facility				$	4,052,837			$	3,927,830
	J:COM Credit Facility					1,059,771				—
	UPC Holding Senior Notes					946,634				—
	UGC Convertible Notes					565,471				655,809
	Cablecom Luxembourg Floating Rate Notes					789,327				—
	Cablecom Luxembourg Fixed Rate Notes					384,655				—
	Cablecom Luxembourg Bank Facility					204,297				—
	LG Switzerland PIK Loan					650,811				—
	VTR Bank Facility					341,437				97,941
	Other					730,953				262,812
			Total debt			9,726,193				4,944,392
Capital lease obligations:
	J:COM					326,603				—
	Other subsidiaries					62,176				48,354
		Total capital lease obligations				388,779				48,354
Total debt and capital lease obligations						10,114,972				4,992,746
	Current maturities					(269,947	)			(36,827	)
	Total long-term debt and capital lease obligations				$	9,845,025			$	4,955,919

	UPC Broadband Holding Bank Facility

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																							December 31,
							December 31, 2005																2004
															Unused				Outstanding				Outstanding
			Denomination												borrowing				principal				principal
Facility			Currency				Maturity				Interest rate (3)				capacity (2)				amount				amount
															amounts in thousands
A(1)(2)				Euro				June 30, 2008				EURIBOR + 2.75	%		$	591,646			$	—			$	—
B				Euro				—				—				—				—				1,581,927
C1				Euro				—				—				—				—				60,464
C2				USD				—				—				—				—				176,020
E				Euro				—				—				—				—				1,393,501
F1(1)				Euro				December 31, 2011				EURIBOR + 4.0	%			—				165,661				190,918
F2(1)				USD				December 31, 2011				LIBOR + 3.5	%			—				525,000				525,000
G(1)				Euro				April 1, 2010				EURIBOR + 2.50	%			—				1,183,292				—
H1(1)				Euro				September 30, 2012				EURIBOR + 2.75	%			—				650,811				—
H2(1)				USD				September 30, 2012				LIBOR + 2.75	%			—				1,250,000				—
I(1)(2)				Euro				April 1, 2010				EURIBOR + 2.50	%			313,573				278,073				—
	Total														$	905,219			$	4,052,837			$	3,927,830

(1)	The interest rate margin is variable based on certain leverage ratios.
(2)	Facility A is a revolving credit facility and Facility I is a redrawable term loan facility. The borrowing capacity under each facility can be used to finance additional permitted acquisitions and for general corporate purposes, subject to covenant compliance. Based on the December 31, 2005 covenant compliance calculations, the aggregate amount that was available for borrowing under these Facilities was approximately €229 million ($271 million), subject to the completion of UPC Holding’s fourth quarter bank reporting requirements. Facility A and Facility I provide for an annual commitment fee of 0.75% of the unused portion of each Facility.
(3)	Interest rate information shown in the table does not reflect the impact of interest rate exchange agreements. As of December 31, 2005, the EURIBOR rates ranged from 2.10% to 2.46% and the LIBOR rates ranged from 3.69% to 4.05%. Excluding the effects of interest rate exchange agreements, the weighted-average interest rate on all Facilities at December 31, 2005 was approximately 5.75%.

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	J:COM Credit Facility

	UPC Holding Senior Notes

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		Redemption price
		7.75% Senior				8.625% Senior
Year		Notes				Notes
		Percentage of principal amount
2008			107.750	%			108.625	%
2009			103.875	%			104.313	%
2010			101.938	%			102.156	%
2011 and thereafter			100.000	%			100.000	%

	UGC Convertible Notes

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		December 31,
		2005				2004
		amounts in thousands
Debt host contract		$	437,439			$	462,164
Embedded equity derivative			128,032				193,645
		$	565,471			$	655,809

	Cablecom Luxembourg Senior Notes

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Year		Percentage
2007			109.375	%
2008			107.031	%
2009			104.688	%
2010			103.125	%
2011			101.563	%
2012 and thereafter			100.000	%

	Cablecom Luxembourg Bank Facility

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	LG Switzerland PIK Loan

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	VTR Bank Facility

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	Other Debt

			December 31,
			2005				2004
			amounts in thousands
J:COM			$	183,158			$	—
Austar bank facility				139,384				—
Puerto Rico subsidiary bank facility				127,500				127,500
Austar Subordinated Transferable Adjustable Redeemable Securities (STARS)				85,235				—
Plator bank facility				76,914				—
News Corp. prepaid forward sale				72,937				—
Other				45,825				135,312
	Total debt		$	730,953			$	262,812

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Debt host contract		$	76,435
Embedded equity derivative			(3,498	)
		$	72,937

	Maturities of Debt and Capital Lease Obligations

Year ended December 31:
		2006		$	175,804
		2007			320,190
		2008			313,063
		2009			350,149
		2010			2,545,153
		Thereafter			6,006,210
Total debt maturities					9,710,569
Unamortized premiums and discounts and embedded equity derivatives, net					15,624
	Total debt			$	9,726,193
		Current portion		$	175,804
		Noncurrent portion		$	9,550,389

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Year ended December 31:
		2006		$	107,139
		2007			87,305
		2008			72,355
		2009			60,316
		2010			49,122
		Thereafter			65,000
					441,237
Less: amount representing interest					(52,458	)
	Present value of net minimum lease payments			$	388,779
		Current portion		$	94,143
		Noncurrent portion		$	294,636

(11)	Deferred Revenue

(12)	Income Taxes

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				Current				Deferred				Total
				amounts in thousands
Year ended December 31, 2005:
		Federal		$	(56,398	)		$	17,595			$	(38,803	)
		State and local			(4,001	)			(1,726	)			(5,727	)
		Foreign			(44,190	)			58,871				14,681
				$	(104,589	)		$	74,740			$	(29,849	)
Year ended December 31, 2004 (as adjusted — see note 22):
	Federal			$	(51,851	)		$	69,451			$	17,600
	State and local				(4,554	)			13,694				9,140
	Foreign				(10,295	)			(2,645	)			(12,940	)
				$	(66,700	)			80,500				13,800
Year ended December 31, 2003:
	Federal			$	14,774			$	(28,630	)		$	(13,856	)
	State and local				—				(5,589	)			(5,589	)
	Foreign				(471	)			(8,059	)			(8,530	)
				$	14,303			$	(42,278	)		$	(27,975	)

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		Year ended December 31,
		2005				2004				2003
						as restated
						(note 23)
		amounts in thousands
Computed “expected” tax benefit (expense)		$	(17,778	)		$	66,932			$	(17,111	)
Non-deductible or taxable foreign currency exchange results			60,598				(27,702	)			—
Non-deductible interest and other expenses			(54,196	)			(74,966	)			—
Losses on sale of investments, affiliates and other assets			49,288				78,693				—
Non-taxable investment income (loss)			(33,995	)			23,735				—
Change in valuation allowance			27,356				(23,217	)			—
Income recognized for tax purposes, but not for financial reporting purposes			(23,742	)			(25,820	)			—
Enacted tax law changes, case law and rate changes			(12,682	)			(149,294	)			—
International rate differences			(7,453	)			6,511				—
State and local income taxes, net of federal income taxes			(5,467	)			1,643				(4,315	)
Change in estimated blended state tax rate			(4,605	)			22,938				—
Foreign taxes			(3,427	)			344				(7,922	)
Gain on extinguishment of debt			—				107,863				—
Other, net			(3,746	)			6,140				1,373
		$	(29,849	)		$	13,800			$	(27,975	)

			December 31,
			2005				2004
							as adjusted
							(note 22)
			amounts in thousands
Current deferred tax assets			$	155,725			$	38,355
Non-current deferred tax assets				75,722				77,313
Current deferred tax liabilities				(2,458	)			—
Non-current deferred tax liabilities				(546,049	)			(464,661	)
	Net deferred tax liability		$	(317,060	)		$	(348,993	)

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					December 31,
					2005				2004
									as adjusted
									(note 22)
					amounts in thousands
Deferred tax assets:
	Investments				$	15,884			$	66,862
	Net operating loss carryforwards					2,731,719				1,751,088
	Property and equipment, net					304,647				509,826
	Intangible assets, net					216,069				44,303
	Deferred compensation and severance					34,578				41,686
	Deferred revenue					284,844				—
	Other future deductible amounts					115,249				98,057
		Deferred tax assets				3,702,990				2,511,822
		Valuation allowance				(2,766,270	)			(2,212,095	)
			Deferred tax assets, net of valuation allowance			936,720				299,727
Deferred tax liabilities:
	Investments					(377,576	)			(344,871	)
	Property and equipment					(276,193	)			(53,124	)
	Intangible assets					(419,485	)			(127,712	)
	Unrealized gains on investments					(4,077	)			(25,287	)
	Other future taxable amounts					(176,449	)			(97,726	)
		Deferred tax liabilities				(1,253,780	)			(648,720	)
			Net deferred tax liability		$	(317,060	)		$	(348,993	)

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			Tax loss				Related tax				Expiration
Country			carryforward				asset				date
			amounts in thousands
Switzerland			$	3,340,599			$	736,309				2006-2012
France				2,360,291				812,648				Indefinite
The Netherlands				1,889,469				549,836				Indefinite
Australia				596,879				179,064				Indefinite
Ireland				367,729				45,966				Indefinite
Luxembourg				328,876				99,912				Indefinite
Japan				325,337				130,135				2006-2012
Chile				325,265				55,295				Indefinite
Austria				200,379				50,095				Indefinite
Poland				73,321				13,931				2006-2010
Sweden				47,940				13,423				Indefinite
United States				44,579				16,124				2021-2025
Other				111,633				28,981				Various
	Total		$	10,012,297			$	2,731,719

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(13)	Stockholders’ Equity

	Capitalization

II-126

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	Structured Stock Repurchase Instruments

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	Treasury Stock

	Issuance of Shares by Subsidiaries and Affiliates

	SARs Reclassification

	Restricted Net Assets

(14)	Stock Incentive Awards

	LGI

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	The LGI Incentive Plan

II-129

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	The LGI Directors Incentive Plan

	The Transitional Plan

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	UGC Equity Incentive Plan, UGC Director Plans and UGC Employee Plan

			Weighted				Weighted
			average				average
			remaining				remaining
			term				vesting period
			amounts in years
UGC Equity Incentive Plan:
	Options — LGI Series A and C common stock			8.9				4.0
	Restricted stock — LGI Series A and C common stock			3.9				3.9
	SARs — LGI Series A and C common stock			8.0				3.7
UGC Director Plans:
	Options — LGI Series A and C common stock			6.0				1.8
UGC Employee Plan:
	Options — LGI Series A and C common stock			5.5				—

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				Options
												LGI Directors																UGC Director
				LGI Incentive Plan								Incentive Plan								Transitional Plan								Plans
								Weighted								Weighted								Weighted								Weighted
								average								average								average								average
LGI Series A								exercise								exercise								exercise								exercise
common stock				Number				price				Number				price				Number				price				Number				price
Outstanding at January 1, 2004					—			$	—				—			$	—				—			$	—				198,260			$	25.41
	Issued in connection with the spin off and related adjustments to Liberty Media’s stock incentive awards				—				—				—				—				1,595,709				17.42				—				—
	Granted				438,054				17.18				22,152				17.44				—				—				43,100				14.16
	Canceled				(10,639	)			17.18				—				—				(2,025	)			17.42				(28,015	)			113.82
	Exercised				—				—				—				—				(353,485	)			17.42				(56,030	)			9.39
Outstanding at December 31, 2004					427,415				17.18				22,152				17.44				1,240,199				17.42				157,315				12.18
	Granted				1,839,502				24.07				70,000				23.21				—				—				—				—
	Canceled				(59,173	)			17.51				—				—				(41,697	)			17.42				—				—
	Released from restrictions				—				—				—				—				—				—				—				—
	Exercised				(26,383	)			17.16				—				—				(218,428	)			17.42				(43,100	)			9.85
Section 409A modifications					—				—				—				—				—				0.12	(1)			—				—
		Outstanding at December 31, 2005			2,181,361			$	22.98				92,152			$	21.82				980,074			$	17.47				114,215			$	13.06
		Exercisable at December 31, 2005			63,147			$	17.66				22,152			$	17.44				720,612			$	17.45				96,256			$	12.66

[Additional columns below]

[Continued from above table, first column(s) repeated]

				Options																SARs								Restricted stock
												UGC Equity								UGC Equity Incentive Plan/
				UGC Employee Plan								Incentive Plan								LGI Incentive Plan (2)
								Weighted								Weighted								Weighted								Weighted
								average								average								average								average
LGI Series A								exercise								exercise								base								stock
common stock				Number				price				Number				price				Number				price				Number				price
Outstanding at January 1, 2004					2,962,197			$	17.85				—			$	—				6,914,807			$	9.11				—			$	—
	Issued in connection with the spin off and related adjustments to Liberty Media’s stock incentive awards				—				—				—				—				—				—				—				—
	Granted				—				—				1,030,090				18.40				1,090,891				17.43				48,398				22.80
	Canceled				(53,355	)			34.87				(17,240	)			17.83				(387,800	)			10.46				—				—
	Exercised				(132,980	)			11.78				—				—				(1,123,942	)			8.72				—				—
Outstanding at December 31, 2004					2,775,862				17.93				1,012,850				18.40				6,493,956				10.56				48,398				22.80
	Granted				—				—				—				—				1,461,300				24.12				62,173				23.98
	Canceled				(19,703	)			55.56				(140,153	)			17.83				(286,788	)			9.07				—				—
	Released from restrictions				—				—				—				—				—				—				(9,678	)			22.80
	Exercised				(412,605	)			10.52				(52,015	)			17.83				(1,400,844	)			9.64				—				—
Section 409A modifications					—				—				—				—				—				—				—				—
		Outstanding at December 31, 2005			2,343,554			$	18.91				820,682			$	18.54				6,267,624			$	14.00				100,893			$	23.53
		Exercisable at December 31, 2005			2,343,554			$	18.91				141,368			$	18.65				614,015			$	11.76				n/a				n/a

(1)	The exercise price on 431,495 shares was increased from $17.42 to $17.54.
(2)	With the exception of the 2005 grants, which were granted under the LGI Incentive Plan, all activity relates to SARs and restricted shares granted under the UGC Equity Incentive Plan.

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				Options																Restricted Stock
				LGI Incentive Plan								Transitional Plan								LGI Incentive Plan
								Weighted								Weighted								Weighted
								average								average								average
								exercise								exercise								stock
LGI Series B common stock:				Number				price				Number				price				Number				price
Outstanding at January 1, 2004					—			$	—				—			$	—				—			$	—
Issued in connection with the spin off and related adjustments to
Liberty Media’s stock incentive awards					—				—				1,498,154				19.85				—				—
	Granted				1,568,562				19.26				—				—				—				—
	Canceled				—				—				—				—				—				—
	Exercised				—				—				—				—				—				—
		Outstanding at December 31, 2004			1,568,562				19.26				1,498,154				19.85				—				—
	Issued in connection with the LGI Combination				—				—				—				—				—				—
	Granted				—				—				—				—				59,270				22.23
	Canceled				—				—				—				—				—				—
	Exercised				—				—				—				—				—				—
	Section 409A modifications(2)				—				0.84				—				—				—				—
		Outstanding at December 31, 2005			1,568,562			$	20.10				1,498,154			$	19.85				59,270			$	22.23
		Exercisable at December 31, 2005			1,568,562	(1)		$	20.10				1,391,241			$	19.85				n/a				n/a

(1)	These options, which were granted to Mr. Malone in 2004, vest at the rate of 20% per year on each anniversary of June 7, 2004, provided that Mr. Malone meets certain conditions regarding his relationship with our company. As of December 31, 2005, 313,712 of such options were vested; however, all options were exercisable immediately at the date of grant.
(2)	The exercise price per share of Mr. Malone’s options granted under the LGI Incentive Plan to acquire 1,568,562 shares of LGI Series B common stock was increased from $19.26 to $20.10.

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				Options
												LGI Directors																UGC Director
				LGI Incentive Plan								Incentive Plan								Transitional Plan								Plans
								Weighted								Weighted								Weighted								Weighted
								average								average								average								average
LGI Series C								exercise								exercise								exercise								exercise
common stock:				Number				price				Number				price				Number				price				Number				price
Outstanding at January 1, 2004					—			$	—				—			$	—				—			$	—				198,260			$	24.06
	Issued in connection with the spin off and related adjustments to Liberty Media’s stock incentive awards				—				—				—				—				3,093,863				17.24				—				—
	Granted				2,006,616				17.23				22,152				16.51				—				—				43,100				13.40
	Canceled				(10,639	)			17.23				—				—				(2,025	)			16.50				(28,015	)			107.75
	Exercised				—				—				—				—				(353,485	)			16.50				(56,030	)			8.89
		Outstanding at December 31, 2004			1,995,977				17.23				22,152				16.51				2,738,353				17.33				157,315				11.53
	Granted				1,839,502				22.78				70,000				21.98				—				—				—				—
	Canceled				(59,173	)			16.58				—				—				(41,697	)			16.50				—				—
	Released from restrictions				—				—				—				—				—				—				—				—
	Exercised				(26,383	)			16.25				—				—				(218,428	)			16.50				(43,100	)			9.32
Section 409A modifications					—				0.77	(2)			—				—				—				0.11	(3)			—				—
		Outstanding at December 31, 2005			3,749,923			$	20.29				92,152			$	20.67				2,478,228			$	17.44				114,215			$	12.37
		Exercisable at December 31, 2005			1,631,709	(1)		$	18.20				22,152			$	16.51				2,111,853			$	17.52				96,256			$	11.98

[Additional columns below]

[Continued from above table, first column(s) repeated]

				Options																SARs								Restricted Stock
				UGC Employee								UGC Equity								UGC Equity Incentive Plan/
				Plan								Incentive Plan								LGI Incentive Plan (4)
								Weighted								Weighted								Weighted								Weighted
								average								average								average								average
LGI Series C								exercise								exercise								base								stock
common stock:				Number				price				Number				price				Number				price				Number				price
Outstanding at January 1, 2004					2,962,197			$	16.90				—			$	—				6,914,807			$	8.62				—			$	—
	Issued in connection with the spin off and related adjustments to Liberty Media’s stock incentive awards				—				—				—				—				—				—				—				—
	Granted				—				—				1,030,090				17.42				1,090,891				16.50				48,398				21.58
	Canceled				(53,355	)			33.01				(17,240	)			16.88				(387,800	)			9.91				—				—
	Exercised				(132,980	)			11.15				—				—				(1,123,942	)			8.26				—				—
		Outstanding at December 31, 2004			2,775,862				16.97				1,012,850				17.42				6,493,956				10.00				48,398				21.58
	Granted				—				—				—				—				1,461,300				22.84				120,540				21.72
	Canceled				(19,703	)			52.60				(140,153	)			16.88				(286,788	)			8.59				—				—
	Released from restrictions				—				—				—				—				—				—				(9,678	)			21.58
	Exercised				(561,526	)			9.79				(52,015	)			16.88				(1,411,376	)			9.15				—				—
Section 409A modifications					—				—				—				—				—				—				—				—
		Outstanding at December 31, 2005			2,194,633			$	18.48				820,682			$	17.55				6,257,092			$	13.25				159,260			$	21.68
		Exercisable at December 31, 2005			2,194,633			$	18.48				141,368			$	17.66				603,483			$	11.12				n/a				n/a

(1)	This amount includes 1,568,562 of options granted to Mr. Malone in 2004. The options, which had an exercise price of $18.26 per share at December 31, 2005, vest at the rate of 20% per year on each anniversary of June 7, 2004, provided that Mr. Malone meets certain conditions regarding his relationship with our company. As of December 31, 2005, 313,712 of such options were vested; however, all options were exercisable immediately at the date of grant.
(2)	The exercise price per share of Mr. Malone’s options granted under the LGI Incentive Plan to acquire 1,568,562 shares of LGI Series C common stock was increased from $17.49 to $18.26.
(3)	The exercise price on 431,495 shares was increased from $16.50 to $16.61.
(4)	With the exception of the 2005 grants, which were granted under the LGI Incentive Plan, all activity relates to SARs and restricted shares granted under the UGC Equity Incentive Plan.

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																UGC Equity Incentive Plan
				Options(1)												SARs(2)												Restricted Stock(2)
								Weighted				Weighted												Weighted												Weighted
								average				average								Weighted				average								Weighted				average
								exercise				grant-date								average				grant-date								average				grant-date
				Number				price				fair value				Number				base price				fair value				Number				stock price				fair value
LGI Series A common stock:
2004 grants:
	Less than market price				43,100			$	14.16			$	17.21				33,295			$	6.84			$	10.89				—			$	—			$	—
	Equal to market price				1,490,296				18.03				12.01				1,057,596				17.77				14.52				48,398				22.80				22.80
	More than market price				—				—				—				—				—				—				—				—				—
		Total 2004 grants			1,533,396			$	17.92			$	12.15				1,090,891			$	17.43			$	14.71				48,398			$	22.80			$	22.80
2005 grants:
	Less than market price				—			$	—			$	—				—			$	—			$	—				—			$	—			$	—
	Equal to market price				1,909,502				24.04				7.84				1,461,300				24.12				7.84				62,173				23.98				23.98
	More than market price				—				—				—				—				—				—				—				—				—
		Total 2005 grants			1,909,502			$	24.04			$	7.84				1,461,300			$	24.12			$	7.84				62,173			$	23.98			$	23.98
LGI Series B common stock:
2004 grants:
	Less than market price				1,568,562			$	19.26			$	6.56				—			$	—			$	—				—			$	—			$	—
	Equal to market price				—				—				—				—				—				—				—				—				—
	More than market price				—				—				—				—				—				—				—				—				—
		Total 2004 grants			1,568,562			$	19.26			$	6.56				—			$	—			$	—				—			$	—			$	—
2005 grants:
	Less than market price				—			$	—			$	—				—			$	—			$	—				—			$	—			$	—
	Equal to market price				—				—				—				—				—				—				59,270				22.23				22.23
	More than market price				—				—				—				—				—				—				—				—				—
		Total 2005 grants			—			$	—			$	—				—			$	—			$	—				59,270			$	22.23			$	22.23
LGI Series C common stock:
2004 grants:
	Less than market price				1,611,662			$	17.38			$	6.14				33,295			$	6.48			$	10.31				—			$	—			$	—
	Equal to market price				1,490,296				17.07				11.46				1,057,596				16.83				13.75				48,398				21.58				21.58
	More than market price				—				—				—				—				—				—				—				—				—
		Total 2004 grants			3,101,958			$	17.23			$	8.70				1,090,891			$	16.50			$	13.92				48,398			$	21.58				21.58
2005 grants:
	Less than market price				—			$	—			$	—				—			$	—			$	—				—			$	—			$	—
	Equal to market price				1,909,502				22.75				7.43				1,461,300				22.84				7.42				120,540				21.72				21.72
	More than market price				—				—				—				—				—				—				—				—				—
		Total 2005 grants			1,909,502			$	22.75			$	7.43				1,461,300			$	22.84			$	7.42				120,540			$	21.72			$	21.72

(1)	Includes options granted under the LGI Incentive Plan, the LGI Directors Incentive Plan, the Transitional Plan, the UGC Director Plans, the UGC Employee Plan and the UGC Equity Incentive Plan.
(2)	Includes grants made under the UGC Equity Incentive Plan and the LGI Incentive Plan.

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				Options outstanding												Options exercisable
								Weighted average				Weighted
								remaining				Average								Weighted
								contractual life				Exercise								Average
Exercise Price Range				Number				(years)				Price				Number				Exercise Price
LGI Series A common stock
	$  7.83 — $ 10.89				2,020,672				5.84			$	9.85				2,013,937			$	9.85
	$ 13.13 — $ 19.64				2,247,004				7.22			$	17.74				1,011,251			$	17.43
	$ 23.21 — $ 33.24				2,020,048				6.58			$	24.55				117,587			$	32.83
	$ 39.34 — $ 46.35				101,104				4.04			$	43.53				101,104			$	43.53
	$ 71.83 — $100.73				49,993				3.61			$	76.70				49,993			$	76.70
	$132.91 — $160.92				90,632				3.97			$	134.24				90,632			$	134.24
		$204.12			2,585				4.23			$	204.12				2,585			$	204.12
					6,532,038				6.47			$	19.95				3,387,089			$	18.38
LGI Series B common stock
	$ 19.85 — $ 20.10				3,066,716				6.90			$	19.98				2,959,803	(1)		$	19.98
LGI Series C common stock
	$  7.42 — $ 10.31				1,871,751				5.82			$	9.32				1,865,016			$	9.32
	$ 12.42 — $ 18.60				5,313,720				7.01			$	17.58				3,971,054	(2)		$	17.73
	$ 21.98 — $ 31.46				2,020,048				6.58			$	23.24				117,587			$	31.07
	$ 37.25 — $ 43.88				101,104				4.04			$	41.21				101,104			$	41.21
	$ 67.99 — $ 95.35				49,993				3.61			$	72.60				49,993			$	72.60
	$125.82 — $152.33				90,632				3.97			$	127.08				90,632			$	127.08
		$193.24			2,585				4.23			$	193.24				2,585			$	193.24
					9,449,833				6.60			$	18.80				6,197,971			$	17.95

(1)	This amount includes 1,254,850 of Mr. Malone’s unvested but exercisable Series B options at an exercise price of $20.10 per share.
(2)	This amount includes 1,254,850 of Mr. Malone’s unvested but exercisable Series C options at an exercise price of $18.26 per share.

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				SARs outstanding								SARs exercisable
								Weighted average
								remaining				Weighted								Weighted
								contractual life				average								average
Base Price Range				Number				(years)				base price				Number				base price
LGI Series A common stock
		$ 6.84			1,731,102				7.77			$	6.84				139,345			$	6.84
	$10.90 — $15.09				2,195,858				7.79				11.22				347,864				11.44
	$16.93 — $19.64				879,364				8.83				18.19				126,806				18.07
	$23.04 — $27.10				1,461,300				6.55				24.12				—				—
					6,267,624				7.64			$	14.00				614,015			$	11.76
LGI Series C common stock
		$ 6.48			1,728,306				7.77			$	6.48				136,549			$	6.48
	$10.31 — $14.29				2,192,862				7.79				10.62				344,868				10.83
	$16.02 — $18.60				874,624				8.83				17.23				122,066				17.11
	$21.59 — $26.04				1,461,300				6.55				22.84				—				—
					6,257,092				7.64			$	13.25				603,483			$	11.12

			Restricted stock outstanding
							Weighted average
							remaining
							contractual life				Weighted average
Stock Price Range			Number				(years)				stock price
LGI Series A common stock
	$21.87 — $24.02			100,893				3.04			$	23.53
LGI Series B common stock
	$22.23			59,270				4.00			$	22.23
LGI Series C common stock
	$20.68 — $22.73			159,260				3.39			$	21.68

	Liberty Jupiter, Inc. Stock Plan

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	J:COM Stock Option Plan

						Weighted Average
		Number				Exercise Price
Outstanding at January 1, 2005			213,076				¥92,000
Granted			—				NA
Canceled			(23,914	)			82,034
Exercised			(11,658	)			80,000
Outstanding at December 31, 2005			177,504				¥80,141
Exercisable at December 31, 2005			142,701				¥80,176

Options outstanding

Options exercisable

Weighted

average

Weighted

Weighted

remaining

average

average

contractual life

exercise

exercise

Exercise Price Range

Number

(years)

price

Number

price

J:COM plans

¥80,000 — ¥92,000

177,504

5.88

¥80,141

142,701

¥80,176

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	Austar Stock Option Plans

(15)	Related Party Transactions

	Related Party Transactions of LGI and UGC

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(16)	Transactions with Officers

	VLG Acquisition Corp.

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	Restructuring Charges

												Programming and
				Employee severance				Office				lease contract
				and termination				closures				termination				Other				Total
				amounts in thousands
Restructuring liability as of January 1, 2005				$	10,623			$	29,925			$	30,528			$	1,522			$	72,598
	Restructuring charges (credits)				4,180				(8,590	)			4,335				(1,026	)			(1,101	)
	Cash paid				(14,838	)			(4,084	)			(4,759	)			(1,314	)			(24,995	)
	Acquisitions and other				15,033				(656	)			359				9,362				24,098
	Foreign currency translation adjustments				(892	)			(3,186	)			(167	)			842				(3,403	)
Restructuring liability as of December 31, 2005				$	14,106			$	13,409			$	30,296			$	9,386			$	67,197
Short-term portion				$	10,596			$	2,345			$	4,652			$	9,386			$	26,979
Long-term portion					3,510				11,064				25,644				—				40,218
		Total		$	14,106			$	13,409			$	30,296			$	9,386			$	67,197

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												Programming and
				Employee severance				Office				lease contract
				and termination				closures				termination				Other				Total
				amounts in thousands
Restructuring liability as of January 1, 2004				$	8,405			$	16,821			$	34,399			$	2,442			$	62,067
	Restructuring charges				8,176				16,862				—				794				25,832
	Cash paid				(6,938	)			(5,741	)			(7,566	)			(1,057	)			(21,302	)
	Foreign currency translation adjustments				980				1,983				3,695				(657	)			6,001
Restructuring liability as of December 31, 2004				$	10,623			$	29,925			$	30,528			$	1,522			$	72,598
Short-term portion				$	4,973			$	5,271			$	3,817			$	345			$	14,406
Long-term portion					5,650				24,654				26,711				1,177				58,192
		Total		$	10,623			$	29,925			$	30,528			$	1,522			$	72,598

(18)	Defined Benefit Plans

•	Ensure that funds are available to pay benefits as they become due;
•	Maximize the trusts total returns subject to prudent risk taking; and
•	Preserve and/or improve the funded status of the trusts over time.

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Projected benefit obligation at beginning of period			$	135,573
	Service cost			1,301
	Interest cost			1,412
	Actuarial loss			104
	Plan participants’ contributions			1,233
	Benefits paid			(844	)
	Effect of change in exchange rate			(2,571	)
Projected benefit obligation at end of period			$	136,208
Accumulated benefit obligation at end of period			$	127,142
Fair value of plan assets at beginning of period			$	102,761
	Actual return on plan assets			1,257
	Group contributions			1,667
	Plan participants’ contributions			1,233
	Benefits paid			(844	)
	Effect of change in exchange rate			(1,953	)
Fair value of plan assets at end of period			$	104,121
Funded status of the plan
	Funded status of the plan		$	(32,087	)
	Unrecognized net actuarial losses			58
	Net liability in the balance sheet		$	(32,029	)

	Actuarial Assumptions

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Expected rate of salary increase			2.00	%
Discount rate			3.75	%
Return on plan assets			4.50	%

Service cost			$	1,301
Interest cost				1,412
Expected return on plan assets				(1,215	)
Other expense				(42	)
	Net periodic pension cost		$	1,456

Debt securities			52	%
Equity securities			27	%
Real estate			18	%
Other			3	%
			100	%

Equity CHF			13	%
Equity foreign			18	%
Debt bonds CHF			33	%
Debt, bonds foreign			17	%
Real estate			10	%
Hedge funds			4	%
Commodities			3	%
Cash			2	%
			100	%

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2006		$	2,569
2007		$	2,687
2008		$	2,804
2009		$	3,170
2010		$	3,635
2011 — 2015		$	25,481

(19)	Other Comprehensive Earnings (Loss)

			Foreign
			currency				Unrealized gains				Unrealized gains				Other
			translation				(losses) on				on cash flow				comprehensive
			adjustment				securities				hedges				earnings (loss)
			amounts in thousands
Balance at December 31, 2002			$	(276,703	)		$	16,249			$	—			$	(260,454	)
	Other comprehensive earnings			102,294				111,594				—				213,888
Balance at December 31, 2003				(174,409	)			127,843				—				(46,566	)
	Other comprehensive earnings (loss)			129,141				(122,292	)			—				6,849
	Effect of change in estimated blended state income tax rate (note 12)			2,222				523				—				2,745
	Spin off transaction (note 2)			—				50,982				—				50,982
Balance at December 31, 2004				(43,046	)			57,056				—				14,010
	Other comprehensive earnings (loss)			(244,045	)			(36,932	)			4,875				(276,102	)
	Effect of change in estimated blended state income tax rate (note 12)			(608	)			(189	)			—				(797	)
Balance at December 31, 2005			$	(287,699	)		$	19,935			$	4,875			$	(262,889	)

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				Before-tax				Tax benefit				Net-of-tax
				amount				(expense)				amount
				amounts in thousands
Year ended December 31, 2003:
	Foreign currency translation adjustments			$	168,239			$	(65,945	)		$	102,294
	Unrealized holding gains				182,941				(71,347	)			111,594
		Other comprehensive earnings		$	351,180			$	(137,292	)		$	213,888
Year ended December 31, 2004:
	Foreign currency translation adjustments			$	133,729			$	(4,588	)		$	129,141
	Unrealized holding losses				(209,961	)			87,669				(122,292	)
	Effect of change in estimated blended state income tax rate (note 12)				—				2,745				2,745
		Other comprehensive earnings (loss)		$	(76,232	)		$	85,826			$	9,594
Year ended December 31, 2005:
	Foreign currency translation adjustments			$	(236,837	)		$	(7,208	)		$	(244,045	)
	Unrealized holding losses				(58,645	)			21,713				(36,932	)
	Unrealized gains on cash flow hedges				4,875				—				4,875
	Effect of change in estimated blended state income tax rate (note 12)				—				(797	)			(797	)
		Other comprehensive loss		$	(290,607	)		$	13,708			$	(276,899	)

(20)	Commitments and Contingencies

	Commitments

		Payments due during
		2006				2007				2008				2009				2010				Thereafter				Total
		amounts in thousands
Operating leases		$	122,419			$	107,990			$	80,456			$	60,935			$	49,876			$	163,538			$	585,214
Programming, satellite and other purchase obligations			252,575				78,553				39,438				18,740				9,441				60,008				458,755
Other commitments			143,111				16,164				6,485				4,563				4,447				10,129				184,899
		$	518,105			$	202,707			$	126,379			$	84,238			$	63,764			$	233,675			$	1,228,868

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	Contingent Obligations

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	Guarantees and Other Credit Enhancements

	Legal Proceedings and Other Contingencies

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(21)	Information about Operating Segments

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	•	Europe (Europe Broadband)

	•	The Netherlands
	•	Switzerland
	•	France
	•	Austria
	•	Other Western Europe
	•	Hungary
	•	Other Central and Eastern Europe

	•	Japan (J:COM)
	•	Chile (VTR)

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	Performance Measures of Our Reportable Segments

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				Year Ended December 31,
				2005								2004								2003
								Operating								Operating								Operating
				Revenue				cash flow				Revenue				cash flow				Revenue				cash flow
				amounts in thousands
Performance Measures
Europe Broadband
	The Netherlands			$	780,934			$	360,924			$	730,483			$	375,738			$	617,488			$	286,945
	Switzerland				122,078				43,525				—				—				—				—
	France				513,762				97,247				312,948				45,774				113,842				11,935
	Austria				322,196				137,247				306,479				122,307				266,387				107,953
	Other Western Europe				321,377				111,168				174,389				63,680				106,962				46,203
		Total Western Europe			2,060,347				750,111				1,524,299				607,499				1,104,679				453,036
	Hungary				281,707				108,378				217,429				82,455				165,310				60,481
	Other Central and Eastern Europe				370,560				147,270				252,064				94,478				197,108				66,662
		Total Central and Eastern Europe			652,267				255,648				469,493				176,933				362,418				127,143
		Total Europe Broadband			2,712,614				1,005,759				1,993,792				784,432				1,467,097				580,179
Japan (J:COM)					1,662,105				636,297				1,504,709				589,597				1,233,492				428,318
Chile (VTR)					444,161				151,450				299,951				108,752				229,835				69,951
Corporate and other					407,564				(22,661	)			285,507				(51,397	)			263,020				(38,354	)
Intersegment eliminations					(75,112	)			—				(47,361	)			—				(55,169	)			—
Total LGI before elimination of equity affiliates					5,151,332				1,770,845				4,036,598				1,431,384				3,138,275				1,040,094
Elimination of equity affiliates					—				—				(1,504,709	)			(589,597	)			(3,029,885	)			(1,022,347	)
Total consolidated LGI				$	5,151,332			$	1,770,845			$	2,531,889			$	841,787			$	108,390			$	17,747

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				Investments in affiliates								Long-lived assets								Total assets
				December 31,								December 31,								December 31,
				2005				2004				2005				2004				2005				2004
				amounts in thousands
Balance Sheet Data
Europe Broadband
	The Netherlands			$	—			$	—			$	2,692,385			$	2,027,965			$	2,754,895			$	2,115,688
	Switzerland				5,638				—				3,754,010				—				4,125,279				—
	France				—				—				1,037,746				1,076,866				1,151,341				1,204,716
	Austria				—				—				1,004,817				826,680				1,037,758				876,201
	Other Western Europe				—				—				994,695				476,272				1,050,560				531,454
		Total Western Europe			5,638				—				9,483,653				4,407,783				10,119,833				4,728,059
	Hungary				—				—				698,949				516,898				739,508				547,487
	Other Central and Eastern Europe				64				11,797				1,365,443				452,612				1,481,006				541,554
		Total Central and Eastern Europe			64				11,797				2,064,392				969,510				2,220,514				1,089,041
		Total Europe Broadband			5,702				11,797				11,548,045				5,377,293				12,340,347				5,817,100
Japan (J:COM)					43,701				36,846				4,247,725				3,814,682				4,911,855				4,289,536
Chile (VTR)					497				—				1,158,309				572,450				1,362,780				682,270
Corporate and other					739,166				1,853,845				1,877,092				1,376,366				4,418,990				6,925,497
Total LGI before elimination of equity affiliates					789,066				1,902,488				18,831,171				11,140,791				23,033,972				17,714,403
Elimination of equity affiliates					—				(36,846	)			—				(3,814,682	)			—				(4,289,536	)
Total consolidated LGI — continuing operations					789,066				1,865,642				18,831,171				7,326,109				23,033,972				13,424,867
Discontinued operations					—				—				325,729				257,542				344,557				277,496
Total consolidated LGI				$	789,066			$	1,865,642			$	19,156,900			$	7,583,651			$	23,378,529			$	13,702,363

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				Year ended December 31,
				2005				2004				2003
				amounts in thousands
Total segment operating cash flow				$	1,770,845			$	841,787			$	17,747
Stock-based compensation expense					(59,231	)			(142,676	)			(4,088	)
Depreciation and amortization					(1,454,863	)			(915,748	)			(15,114	)
Impairment of long-lived assets					(8,320	)			(69,353	)			—
Restructuring and other operating credits (charges)					2,753				(28,901	)			—
	Operating income (loss)				251,184				(314,891	)			(1,455	)
	Interest expense				(433,467	)			(286,321	)			(2,178	)
	Interest and dividend income				77,649				65,494				24,874
	Share of earnings (losses) of affiliates, net				(22,949	)			38,710				13,739
	Realized and unrealized gains (losses) on derivative instruments, net				309,973				(35,775	)			12,762
	Foreign currency transaction gains (losses), net				(209,400	)			117,514				5,412
	Gain on exchange of investment securities				—				178,818				—
	Other-than-temporary declines in fair values of investments				(3,403	)			(18,542	)			(6,884	)
	Gains (losses) on extinguishment of debt				(33,700	)			27,977				—
	Gains (losses) on disposition of non-operating assets, net				115,169				43,714				(4,033	)
	Other income (expense), net				(263	)			(7,931	)			6,651
		Earnings (loss) before income taxes, minority interests and discontinued operations		$	50,793			$	(191,233	)		$	48,888

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					Year ended December 31,
					2005				2004				2003
					amounts in thousands
Capital Expenditures
Europe Broadband
	The Netherlands				$	152,575			$	84,698			$	63,451
	Switzerland					27,001				—				—
	France					128,655				65,435				48,810
	Austria					48,325				53,660				43,751
	Other Western Europe					73,544				46,626				22,965
		Total Western Europe				430,100				250,419				178,977
	Hungary					70,941				39,833				23,004
	Other Central and Eastern Europe					84,473				39,776				29,904
		Total Central and Eastern Europe				155,414				79,609				52,908
			Total Europe Broadband			585,514				330,028				231,885
Japan (J:COM)						354,705				295,914				279,841
Chile (VTR)						98,576				41,685				41,391
Corporate and other						156,198				115,904				82,717
Total LGI before elimination of equity affiliates						1,194,993				783,531				635,834
Elimination of equity affiliates						—				(295,914	)			(612,965	)
Total consolidated LGI					$	1,194,993			$	487,617			$	22,869

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	Geographic Segments

						Year ended December 31,
						2005				2004				2003
						amounts in thousands
Revenue
Europe
	Europe Broadband
		The Netherlands				$	780,934			$	730,483			$	617,488
		Switzerland					122,078				—				—
		France					513,762				312,948				113,842
		Austria					322,196				306,479				266,387
		Sweden					93,007				88,233				75,152
		Belgium					40,140				37,463				31,810
		Ireland					188,230				48,693				—
			Total Western Europe				2,060,347				1,524,299				1,104,679
		Hungary					281,707				217,429				165,310
		Poland					137,791				110,288				86,156
		Czech Republic					101,482				82,163				65,370
		Slovak Republic					39,527				32,684				25,426
		Romania					67,214				26,929				20,156
		Slovenia					24,546				—				—
			Total Central and Eastern Europe				652,267				469,493				362,418
				Total Europe Broadband			2,712,614				1,993,792				1,467,097
	chellomedia(2)						270,766				155,015				145,528
		Total Europe					2,983,380				2,148,807				1,612,625
Japan (J:COM)							1,662,105				1,504,709				1,233,492
The Americas
	Chile (VTR)						444,161				299,951				229,835
	Other(1)						136,798				130,492				117,492
		Total — The Americas					580,959				430,443				347,327
Intersegment eliminations							(75,112	)			(47,361	)			(55,169	)
Total LGI before elimination of equity affiliates							5,151,332				4,036,598				3,138,275
Elimination of equity affiliates							—				(1,504,709	)			(3,029,885	)
Total consolidated LGI						$	5,151,332			$	2,531,889			$	108,390

(1)	Includes certain less significant operating segments that provide broadband services in Puerto Rico, Brazil and Peru and video programming services in Argentina.
(2)	chellomedia’s geographic segments are located primarily in the United Kingdom, The Netherlands and other European countries.

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						December 31,
						2005				2004
						amounts in thousands
Long-lived assets
Europe
	Europe Broadband
		The Netherlands				$	2,692,385			$	2,027,965
		Switzerland					3,754,010				—
		France					1,037,746				1,076,866
		Austria					1,004,817				826,680
		Sweden					306,756				255,842
		Belgium					122,459				92,410
		Ireland					565,480				128,020
			Total Western Europe				9,483,653				4,407,783
		Hungary					698,949				516,898
		Poland					339,038				174,157
		Czech Republic					327,507				180,280
		Slovak Republic					105,292				61,182
		Romania					501,471				36,993
		Slovenia					92,135				—
			Total Central and Eastern Europe				2,064,392				969,510
				Total Europe Broadband			11,548,045				5,377,293
	chellomedia(1)						377,282				438,844
		Total Europe					11,925,327				5,816,137
Japan (J:COM)							4,247,725				3,814,682
The Americas
	U.S.(2)						790,427				658,167
	Chile (VTR)						1,158,309				572,450
	Other(3)						264,657				279,355
		Total — The Americas					2,213,393				1,509,972
Australia							444,726				—
Total LGI before elimination of equity affiliates							18,831,171				11,140,791
Elimination of equity affiliates							—				(3,814,682	)
Total consolidated LGI — continuing operations							18,831,171				7,326,109
Discontinued operations							325,729				257,542
Total consolidated LGI						$	19,156,900			$	7,583,651

(1)	chellomedia’s geographic segments are located primarily in the United Kingdom, The Netherlands and other European countries.
(2)	Primarily represents the assets of our corporate segment.
(3)	Includes certain less significant operating segments that provide broadband services in Puerto Rico, Brazil and Peru and video programming services in Argentina.

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(22)	Accounting Change

						As adjusted for				Effect of
		As previously				accounting				accounting
		reported				change				change
		amounts in thousands
Balance Sheet:
As of December 31, 2004:
Noncurrent deferred tax liability		$	458,138			$	464,661			$	6,523
Minority interest in subsidiaries		$	1,216,710			$	1,213,610			$	(3,100	)
Accumulated deficit		$	(1,649,007	)		$	(1,652,430	)		$	(3,423	)

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							As reclassified for				As adjusted
							discontinued				for				Effect of
			As previously				operations				accounting				accounting
			reported				(note 5)				change				change
			amounts in thousands
Statement of Operations:
Year ended December 31, 2004:
Income tax benefit			$	17,449			$	20,323			$	13,800			$	(6,523	)
Minority interests in losses subsidiaries			$	167,336			$	160,624			$	163,724			$	3,100
Loss from continuing operations			$	(18,058	)		$	(10,286	)		$	(13,709	)		$	(3,423	)
Net loss			$	(18,058	)		$	(18,058	)		$	(21,481	)		$	(3,423	)
Pro forma loss per common share — basic and diluted:
	Continuing operations		$	(0.06	)		$	(0.03	)		$	(0.04	)		$	(0.01	)
	Discontinued operations			—				(0.03	)			(0.03	)			—
			$	(0.06	)		$	(0.06	)		$	(0.07	)		$	(0.01	)

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(23)	Quarterly Financial Information (Unaudited)

				2005
				1st				2nd				3rd				4th
				quarter				quarter				quarter				Quarter
				as adjusted				as adjusted				as adjusted
				(note 22)				(note 22)				(note 22)
				amounts in thousands, except per share amounts
Revenue
	As previously reported			$	1,235,250			$	1,276,272			$	1,295,795			$	1,443,105
	Effect of discontinued operations (note 5)				(32,021	)			(33,679	)			(33,390	)			—
		As adjusted		$	1,203,229			$	1,242,593			$	1,262,405			$	1,443,105
Operating income (loss)
	As previously reported			$	97,766			$	41,845			$	36,423			$	84,683
	Effect of discontinued operations (note 5)				(2,925	)			(4,910	)			(1,698	)			—
		As adjusted		$	94,841			$	36,935			$	34,725			$	84,683
Net earnings (loss):
	As previously reported			$	26,334			$	(123,348	)		$	(152,808	)		$	145,294
	Effect of change in accounting (note 22)				(9,801	)			9,327				24,905				—
		As adjusted		$	16,533			$	(114,021	)		$	(127,903	)		$	145,294
Historical earnings (loss) per common share (note 3) — basic and diluted
	As previously reported			$	0.08			$	(0.34	)		$	(0.32	)		$	0.30
	Effect of change in accounting (note 22)				(0.03	)			0.03				0.05				—
		As adjusted		$	0.05			$	(0.31	)		$	(0.27	)		$	0.30

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				2004
				1st				2nd				3rd				4th
				quarter				quarter				quarter				quarter
								as adjusted				as adjusted				as adjusted
								(note 22)				(note 22)				(note 22)
				amounts in thousands, except per share amounts
Revenue
	As previously reported			$	576,200			$	580,409			$	708,807			$	778,868
	Effect of discontinued operations (note 5)				(25,563	)			(28,304	)			(27,103	)			(31,425	)
		As adjusted		$	550,637			$	552,105			$	681,704			$	747,443
Operating income (loss)
	As previously reported			$	(83,651	)		$	(35,297	)		$	(43,485	)		$	(151,440	)
	Effect of discontinued operations (note 5)				231				1,080				(532	)			(1,797	)
		As adjusted		$	(83,420	)		$	(34,217	)		$	(44,017	)		$	(153,237	)
Net earnings (loss):
	As previously reported			$	(83,951	)		$	29,026			$	78,549			$	(41,682	)
	Effect of change in accounting (note 22)				—				(10,406	)			1,044				5,939
		As adjusted		$	(83,951	)		$	18,620			$	79,593			$	(35,743	)
Historical and pro forma loss per common share (note 3) — basic and diluted:
	As previously reported			$	(0.27	)		$	0.09			$	0.23			$	(0.12	)
	Effect of change in accounting (note 22)				—				(0.03	)			0.01				0.02
		As adjusted		$	(0.27	)		$	0.06			$	0.24			$	(0.10	)

(24)	Subsequent Event

	Inode Acquisition

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Item 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Item 11.	EXECUTIVE COMPENSATION

Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

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Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Schedule I — Condensed Financial Information of Registrant (Parent Company Information)
	LGI Condensed Balance Sheet as of December 31, 2005 (Parent Company Only)			IV-9
	LGI Condensed Statement of Operations for the six months ended December 31, 2005 (Parent Company Only)			IV-10
	LGI Condensed Statement of Stockholders’ Equity for the six months ended December 31, 2005 (Parent Company Only)			IV-11
	LGI Condensed Statement of Cash Flows for the six months ended December 31, 2005 (Parent Company Only)			IV-12
	LMI Condensed Balance Sheet as of December 31, 2004 (Parent Company Only)			IV-13
	LMI Condensed Statements of Operations for the six months ended June 30, 2005 and the seven months ended December 31, 2004 (Parent Company Only)			IV-14
	LMI Condensed Statements of Stockholders’ Equity for the six months ended June 30, 2005 and the seven months ended December 31, 2004 (Parent Company Only)			IV-15
	LMI Condensed Statements of Cash Flows for the six months ended June 30, 2005 and the seven months ended December 31, 2004 (Parent Company Only)			IV-16
Schedule II — Valuation and Qualifying Accounts				IV-17
Separate Financial Statements of Subsidiaries Not Consolidated and 50 Percent or Less Owned Persons:
	Jupiter TV Co., Ltd. and Subsidiaries
		Report of Independent Registered Public Accounting Firm		IV-18
		Consolidated Balance Sheets as of December 31, 2005 and 2004		IV-19
		Consolidated Statements of Operations for the years ended December 31, 2005, 2004 and 2003		IV-21
		Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the years ended December 31, 2005, 2004 and 2003		IV-22
		Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003		IV-23
		Notes to Consolidated Financial Statements		IV-25
	Jupiter Telecommunications Co., Ltd. and Subsidiaries
		Report of Independent Registered Public Accounting Firm		IV-52
		Consolidated Balance Sheets as of December 31, 2003 and 2004		IV-53
		Consolidated Statements of Operations for the years ended December 31, 2003 and 2004		IV-55
		Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2003 and 2004		IV-56
		Consolidated Statements of Cash Flows for the years ended December 31, 2003 and 2004		IV-57
		Notes to Consolidated Financial Statements		IV-58

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Torneos y Competencias S.A.
	Independent Auditors’ Report		IV-80
	Consolidated Balance Sheets as of December 31, 2004 and 2003		IV-81
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2004, 2003 and 2002		IV-82
	Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2004, 2003 and 2002		IV-83
	Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002		IV-84
	Notes to Consolidated Financial Statements		IV-85
UnitedGlobalCom, Inc.
	Report of Independent Registered Public Accounting Firm		IV-103
	Report of Independent Public Accountants		IV-104
	Consolidated Balance Sheets as of December 31, 2003 and 2002		IV-105
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2003, 2002 and 2001		IV-106
	Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2003, 2002 and 2001		IV-107
	Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001		IV-110
	Notes to Consolidated Financial Statements		IV-111
Cordillera Comunicaciones Holding Limitada and Subsidiaries
	Report of Independent Registered Public Accounting Firm		IV-164
	Consolidated Balance Sheets as of December 31, 2003 and 2004		IV-165
	Consolidated Income Statements for the years ended December 31, 2002, 2003 and 2004		IV-166
	Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2003 and 2004		IV-167
	Notes to the Consolidated Financial Statements		IV-169
Fox Pan American Sports, LLC and Subsidiary
	Report of Independent Registered Public Accounting Firm		IV-205
	Consolidated Balance Sheets at December 31, 2004 and 2003		IV-206
	Consolidated Statements of Operations for the years ended December 31, 2004, 2003 and period from February 5, 2002 through December 31, 2002		IV-207
	Consolidated Statements of Changes in Members’ (Deficit) Equity for the years ended December 31, 2004, 2003 and period from February 5, 2002 through December 31, 2002		IV-208
	Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and period from February 5, 2002 through December 31, 2002		IV-209
	Notes to Consolidated Financial Statements		IV-210

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Table of Contents

2 — Plan of Acquisition Reorganization, Arrangement, Liquidation or Succession:
	2.1			Agreement and Plan of Merger, dated as of January 17, 2005, among the Registrant (fka New Cheetah, Inc.), Liberty Media International, Inc. (LMI), UnitedGlobalCom, Inc. (UGC), Cheetah Acquisition Corp. and Tiger Global Acquisition Corp. (incorporated by reference to Exhibit 2.1 to LMI’s Current Report on Form 8-K, dated January 17, 2005 (File No. 000-50671))
3 — Articles of Incorporation and Bylaws:
	3.1			Restated Certificate of Incorporation of the Registrant, dated June 15, 2005 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, dated June 15, 2005 (File No. 000-51360) (the Merger 8-K))
	3.2			Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Merger 8-K)
4 — Instruments Defining the Rights of Securities Holders, including Indentures:
	4.1			Specimen certificate for shares of the Registrant’s Series A common stock, par value $.01 per share (incorporated by reference to Exhibit 4.1 to the Merger 8-K)
	4.2			Specimen certificate for shares of the Registrant’s Series B common stock, par value $.01 per share (incorporated by reference to Exhibit 4.2 to the Merger 8-K)
	4.3			Specimen certificate for shares of the Registrant’s Series C Common Stock, par value $.01 per share (incorporated by reference to Exhibit 3 to the Registrant’s Registration Statement on Form 8-A, dated August 24, 2005 (File No. 000-51360))
	4.4			Amendment and Restatement Agreement, dated March 7, 2005, among UPC Broadband Holding B.V. (UPC Broadband) and UPC Financing Partnership (UPC Financing), as Borrowers, the guarantors listed therein, and TD Bank Europe Limited, as Facility Agent and Security Agent, including as Schedule 3 thereto the Restated €1,072,000,000 Senior Secured Credit Facility, originally dated January 16, 2004, among UPC Broadband, as Borrower, the guarantors listed therein, the banks and financial institutions listed therein as Initial Facility D Lenders, TD Bank Europe Limited, as Facility Agent and Security Agent, and the facility agents under the Existing Facility (as defined therein) (the 2004 Credit Agreement) (incorporated by reference to Exhibit 10.32 to UGC’s Annual Report on Form 10-K, dated March 14, 2005 (File No. 000-49658) (the UGC 2004 10-K))
	4.5			Additional Facility Accession Agreement, dated June 24, 2004, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility E Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.2 to UGC’s Current Report on Form 8-K, dated June 29, 2004 (File No. 000-49658))
	4.6			Additional Facility Accession Agreement, dated December 2, 2004, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility F Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.1 to UGC’s Current Report on Form 8-K, dated December 2, 2004 (File No. 000-49658))
	4.7			Additional Facility Accession Agreement, dated March 9, 2005, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility G Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.39 to the UGC 2004 10-K)
	4.8			Additional Facility Accession Agreement, dated March 7, 2005, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility H Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.40 to the UGC 2004 10-K)

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	4.9			Additional Facility Accession Agreement, dated March 9, 2005, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility I Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.41 to the UGC 2004 10-K)
	4.10			Amendment and Restatement Agreement, dated March 7, 2005, among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, TD Bank Europe Limited and Toronto Dominion (Texas), Inc., as Facility Agents, and TD Bank Europe Limited, as Security Agent, including as Schedule 3 thereto the Restated Credit Agreement, €3,500,000,000 and US$347,500,000 and €95,000,000 Senior Secured Credit Facility, originally dated October 26, 2000 (the October 2000 Senior Secured Credit Facility), among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, the Lead Arrangers listed therein, the banks and financial institutions listed therein as Original Lenders, TD Bank Europe Limited and Toronto-Dominion (Texas) Inc., as Facility Agents, and TD Bank Europe Limited, as Security Agent (incorporated by reference to Exhibit 10.33 to the UGC 2004 10-K)
	4.11			Amendment, dated December 15, 2005, among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, and Toronto-Dominion (Texas) LLC, as Facility Agent, to the October 2000 Senior Secured Credit Facility (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, dated December 15, 2005 (File No. 000-51360) (the Credit Facility 8-K))
	4.12			Amendment, dated December 15, 2005, among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, and Toronto-Dominion (Texas) LLC, as Facility Agent, to the 2004 Credit Agreement (incorporated by reference to Exhibit 4.3 to the Credit Facility 8-K)
	4.13			The Registrant undertakes to furnish to the Securities and Exchange Commission, upon request, a copy of all instruments with respect to long-term debt not filed herewith.
10 — Material Contracts:
	10.1			Liberty Global, Inc. 2005 Incentive Plan (As Amended and Restated Effective March 8, 2006) (the Incentive Plan)*
	10.2			Form of the Non-Qualified Stock Option Agreement under the Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, dated August 15, 2005 (File No. 000-51360) (the Incentive Plan 8-K))
	10.3			Form of Stock Appreciation Rights Agreement under the Incentive Plan (incorporated by reference to Exhibit 99.2 to the Incentive Plan 8-K)
	10.4			Form of Restricted Shares Agreement under the Incentive Plan (incorporated by reference to Exhibit 99.3 to the Incentive Plan 8-K)
	10.5			Non-Qualified Stock Option Agreement, dated as of June 7, 2004, between John C. Malone and the Registrant (as assignee of LMI) under the Incentive Plan (the Malone Award Agreement) (incorporated by reference to Exhibit 7(A) to Mr. Malone’s Schedule 13D/ A (Amendment No. 1) with respect to the LMI’s common stock, dated July 14, 2004 (File No. 005-79904))
	10.6			Form of Amendment to the Malone Award Agreement (incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, dated December 22, 2005 (File No. 000-51360) (the 409A 8-K))
	10.7			Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (As Amended and Restated Effective March 8, 2006) (the Director Plan)*
	10.8			Form of Non-Qualified Stock Option Agreement under the Director Plan (incorporated by reference to Exhibit 10.3 to the Merger 8-K)
	10.9			Liberty Global, Inc. Compensation Policy for Nonemployee Directors (As Amended and Restated Effective March 8, 2006)*
	10.10			Liberty Media International, Inc. Transitional Stock Adjustment Plan (the Transitional Plan) (incorporated by reference to Exhibit 4.5 to LMI’s Registration Statement on Form S-8, dated June 23, 2004 (File No. 333-116790))

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	10.11			Form of Non-Qualified Stock Option Exercise Price Amendment under the Transitional Plan (incorporated by reference to Exhibit 99.1 to the 409A 8-K)
	10.12			Form of Non-Qualified Stock Option Amendment under the Transitional Plan (incorporated by reference to Exhibit 99.2 to the 409A 8-K)
	10.13			UnitedGlobalCom, Inc. Equity Incentive Plan (amended and restated effective October 17, 2003) (incorporated by reference to Exhibit 10.9 to UGC’s Annual Report on Form 10-K, dated March 15, 2004 (File No. 000-49658) (the UGC 2003 10-K))
	10.14			UnitedGlobalCom, Inc. 1993 Stock Option Plan (amended and restated effective January 22, 2004) (incorporated by reference to Exhibit 10.6 to the UGC 2003 10-K)
	10.15			Form of Amendment to Stock Appreciation Rights Agreement under the UnitedGlobalCom, Inc. 2003 Equity Incentive Plan (Amended and Restated October 17, 2003) (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, dated November 30, 2005 (File No. 000-51360))
	10.16			Stock Option Plan for Non-Employee Directors of UGC, effective June 1, 1993, amended and restated as of January 22, 2004 (incorporated by reference to Exhibit 10.7 to the UGC 2003 10-K)
	10.17			Stock Option Plan for Non-Employee Directors of UGC, effective March 20, 1998, amended and restated as of January 22, 2004 (incorporated by reference to Exhibit 10.8 to the UGC 2003 10-K)
	10.18			UIH Latin America, Inc. Stock Option Plan, effective June 6, 1999 (as amended December 6, 2000) (incorporated by reference to Exhibit 10.89 to UGC’s Amendment No. 10 to its Registration Statement on Form S-1 dated December 11, 2003 (File No. 333-82776) (the UGC Form S-1))
	10.19			Form of Indemnification Agreement between the Registrant and its Directors*
	10.20			Form of Indemnification Agreement between the Registrant and its Executive Officers*
	10.21			Personal Usage of Aircraft Policy (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, dated November 15, 2005 (File No. 000-51360) (the Aircraft 8-K))
	10.22			Form of Aircraft Time Sharing Agreement (incorporated by reference to Exhibit 99.2 to the Aircraft 8-K)
	10.23			Executive Service Agreement, dated December 15, 2004, between UPC Services Limited and Charles Bracken (incorporated by reference to Exhibit 10.15 to the UGC 2004 10-K)
	10.24			Employment Agreement, effective April 19, 2000, among UGC, UPC and Gene Musselman (incorporated by reference to Exhibit 10.27 to the UGC 2003 10-K)
	10.25			Addendum to Employment Agreement, dated as of September 3, 2003, among UGC, UPC and Gene Musselman (incorporated by reference to Exhibit 10.28 to the UGC 2003 10-K)
	10.26			Contract Extension Letter dated November 2, 2005, among UGC, UPC and Gene Musselman*
	10.27			Executive Service Agreement dated January 10, 2005, between UPC Services Limited and Shane O’Neill (incorporated by reference to Exhibit 10.16 to the UGC 2004 10-K)
	10.28			Employment Agreement dated January 5, 2004, between the Registrant (as assignee of UGC) and Gene W. Schneider (incorporated by reference to Exhibit 10.5 to UGC’s Current Report on Form 8-K dated January 5, 2004 (File No. 000-49658))
	10.29			Letter from UGC to Gene W. Schneider, dated April 17, 2003 regarding the Split Dollar Life Insurance Agreement referenced in Exhibit 10.29 below (incorporated by reference to Exhibit 10.87 to the UGC Form S-1)
	10.30			Split Dollar Life Insurance Agreement dated February 15, 2001, between UGC and Mark L. Schneider, Tina M. Wildes and Carla Shankle, as trustees under The Gene W. Schneider 2001 Trust, dated February 12, 2001 (incorporated by reference to Exhibit 10.88 to the UGC Form S-1)

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	10.31			Amended and Restated Stockholders’ Agreement, dated as of May 21, 2004, among the Registrant, Liberty Media International Holdings, LLC, Robert R. Bennett, Miranda Curtis, Graham Hollis, Yasushige Nishimura, Liberty Jupiter, Inc., and, solely for purposes of Section 9 thereof, Liberty Media Corporation (Liberty Media) (incorporated by reference to Exhibit 10.23 to Amendment No. 1 to LMI’s Registration Statement on Form 10, dated May 25, 2004 (File No. 000-50671) (the Form 10 Amendment))
	10.32			Reorganization Agreement, dated as of May 20, 2004, among Liberty Media, the Registrant and the other parties named therein (incorporated by reference to Exhibit 2.1 to the Form 10 Amendment)
	10.33			Form of Facilities and Services Agreement between Liberty Media and the Registrant (incorporated by reference to Exhibit 10.3 to the Form 10 Amendment)
	10.34			Agreement for Aircraft Joint Ownership and Management, dated as of May 21, 2004, between Liberty Media and the Registrant (incorporated by reference to Exhibit 10.4 to the Form 10 Amendment)
	10.35			Form of Tax Sharing Agreement between Liberty Media and the Registrant (incorporated by reference to Exhibit 10.5 to the Form 10 Amendment)
	10.36			Form of Credit Facility between Liberty Media and the Registrant (terminated in accordance with its terms) (incorporated by reference to Exhibit 10.6 to the Form 10 Amendment)
	10.37			Stock and Loan Purchase Agreement, dated as of March 15, 2004, among Suez SA, MédiaRéseaux SA, UPC France Holding BV and UGC (incorporated by reference to Exhibit 10.1 to UGC’s Current Report on Form 8-K, dated July 1, 2004 (File No. 000-49658) (the UGC July 2004 8-K))
	10.38			Amendment to the Purchase Agreement, dated as of July 1, 2004, among Suez SA, MédiaRéseaux SA, UPC France Holding BV and UGC (incorporated by reference to Exhibit 10.2 to the UGC July 2004 8-K)
	10.39			Shareholders Agreement, dated as of July 1, 2004, among UGC, UPC France Holding BV and Suez SA (incorporated by reference to Exhibit 10.3 to the UGC July 2004 8-K)
	10.40			Amended and Restated Operating Agreement dated November 26, 2004, among Liberty Japan, Inc., Liberty Japan II, Inc., LMI Holdings Japan, LLC, Liberty Kanto, Inc., Liberty Jupiter, Inc. and Sumitomo Corporation, and, solely with respect to Sections 3.1(c), 3.1(d) and 16.22 thereof, the Registrant (incorporated by reference to Exhibit 10.27 of LMI’s Annual Report on Form 10-K, dated March 14, 2005 (File No. 000-50671))
	10.41			Share Purchase Agreement, dated September 30, 2005, between Glacier Holdings S.C.A. and United ACM Holdings, Inc. (the Cablecom Agreement) (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, dated September 30, 2005 (File No. 000-51360) (the Cablecom 8-K))
	10.43			Excerpts from Schedule 4.6 to the Cablecom Agreement (incorporated by reference to Exhibit 2.2 to the Cablecom 8-K)
	10.44			Deed, dated September 30, 2005, between LMI and Glacier Holdings S.C.A. (incorporated by reference to Exhibit 99.1 to the Cablecom 8-K)
21 — Subsidiaries of the Registrant*
23 — Consent of Experts and Counsel:
	23.1			Consent of KPMG LLP*
	23.2			Consent of KPMG AZSA & Co.*
	23.3			Consent of KPMG AZSA & Co.*
	23.4			Consent of Finsterbusch Pickenhayn Sibille*
	23.5			Consent of KPMG LLP*
	23.6			Information re: Absence of Consent of Arthur Andersen LLP*
	23.7			Consent of Ernst & Young LTDA.*
	23.8			Consent of KPMG LLP*

IV-6

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Table of Contents

31 — Rule 13a-14(a)/15d-14(a) Certification:
	31.1			Certification of President and Chief Executive Officer*
	31.2			Certification of Senior Vice President and Co-Chief Financial Officer (Principal Financial Officer)*
	31.3			Certification of Senior Vice President and Co-Chief Financial Officer (Principal Accounting Officer)*
32 — Section 1350 Certification*

*	Filed herewith

IV-7

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Table of Contents

		Liberty Global, Inc.
Dated: March 14, 2006		By /s/ Elizabeth M. Markowski
		Elizabeth M. Markowski Senior Vice President, Secretary and General Counsel

Signature		Title		Date
/s/ John C. Malone John C. Malone		Chairman of the Board		March 14, 2006
/s/ Michael T. Fries Michael T. Fries		Chief Executive Officer, President and Director		March 14, 2006
/s/ John P. Cole John P. Cole		Director		March 14, 2006
/s/ John W. Dick John W. Dick		Director		March 14, 2006
/s/ Paul A. Gould Paul A. Gould		Director		March 14, 2006
/s/ David E. Rapley David E. Rapley		Director		March 14, 2006
/s/ Larry E. Romrell Larry E. Romrell		Director		March 14, 2006
/s/ Gene W. Schneider Gene W. Schneider		Director		March 14, 2006
/s/ J. C. Sparkman J. C. Sparkman		Director		March 14, 2006
/s/ J. David Wargo J. David Wargo		Director		March 14, 2006
/s/ Charles H.R. Bracken Charles H.R. Bracken		Senior Vice President and Co-Chief Financial Officer (Principal Financial Officer)		March 14, 2006
/s/ Bernard G. Dvorak Bernard G. Dvorak		Senior Vice President and Co-Chief Financial Officer (Principal Accounting Officer)		March 14, 2006

IV-8

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Table of Contents

				December 31,
				2005
ASSETS
Current assets:
	Cash and cash equivalents			$	3,867
	Other current assets				1,021
		Total current assets			4,888
Investments in consolidated subsidiaries, including intercompany balances					7,824,782
Property and equipment, at cost					251
Accumulated depreciation					(23	)
Property and equipment, net					228
Deferred tax asset					17,351
Other non-current assets					23
		Total assets		$	7,847,272
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	25,986
	Accrued liabilities				4,840
		Total current liabilities			30,826
Commitments and contingencies
Stockholders’ Equity:
	Series A common stock, $.01 par value. Authorized 500,000,000 shares; 232,334,708 shares issued at December 31, 2005				2,323
	Series B common stock, $.01 par value. Authorized 50,000,000 shares; 7,323,570 shares issued and outstanding at December 31, 2005				73
	Series C common stock, $.01 par value. Authorized 500,000,000 shares; 239,820,997 shares issued at December 31, 2005				2,398
	Additional paid-in capital				9,992,236
	Accumulated deficit				(1,732,527	)
	Accumulated other comprehensive loss, net of taxes				(262,889	)
	Deferred compensation				(15,592	)
	Treasury stock, at cost				(169,576	)
		Total stockholders’ equity			7,816,446
		Total liabilities and stockholders’ equity		$	7,847,272

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Table of Contents

				Six months
				ended
				December 31,
				2005
Operating costs and expenses:
	Selling, general and administrative			$	15,927
	Stock-based compensation				(11,927	)
	Depreciation and amortization				23
		Operating loss			(4,023	)
Other income (expense):
	Interest and dividend income				1,135
	Related party interest expense, net				(10,856	)
	Foreign currency transaction losses, net				(8,483	)
	Other, net				85
					(18,119	)
		Loss before income taxes and equity in income of consolidated subsidiaries, net			(22,142	)
Equity in income of consolidated subsidiaries, net					31,439
Income tax benefit					8,094
		Net income		$	17,391

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																							Accumulated
																							other
			Common stock												Additional								comprehensive												Total
															paid-in				Accumulated				loss, net of				Deferred				Treasury				stockholders’
			Series A				Series B				Series C				capital				deficit				taxes				compensation				stock, at cost				equity
Balance at July 1, 2005 (Post-LGI Combination)(as adjusted)			$	2,317			$	73			$	2,390			$	9,896,825			$	(1,749,918	)		$	(130,862	)		$	(11,283	)		$	(90,594	)		$	7,918,948
	Net income			—				—				—				—				17,391				—				—				—				17,391
	Other comprehensive loss, net of taxes			—				—				—				—				—				(132,027	)			—				—				(132,027	)
	Adjustment due to issuance of stock by subsidiaries and affiliates and other changes in subsidiary equity, net of taxes			—				—				—				2,320				—				—				—				—				2,320
	Issuance of restricted stock			—				—				—				5,427				—				—				(5,427	)			—				—
	Reclassification of SARS obligation			—				—				—				50,264				—				—				—				—				50,264
	Stock issued (acquired) in connection with equity incentive and 401(K) plans			6				—				8				23,161				—				—				—				(89	)			23,086
	Repurchase of common stock			—				—				—				—				—				—				—				(78,893	)			(78,893	)
	Stock-based compensation, net of taxes			—				—				—				(13,045	)			—				—				1,118				—				(11,927	)
	Net cash received in connection with structured stock repurchase instruments			—				—				—				613				—				—				—				—				613
	Tax benefits allocated from Liberty Media Corporation pursuant to Tax Sharing Agreement			—				—				—				26,671				—				—				—				—				26,671
Balance at December 31, 2005			$	2,323			$	73			$	2,398			$	9,992,236			$	(1,732,527	)		$	(262,889	)		$	(15,592	)		$	(169,576	)		$	7,816,446

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							Six months
							ended
							December 31,
							2005
Cash flows from operating activities:
	Net income						$	17,391
	Adjustments to reconcile net income to net cash used by operating activities:
		Equity in income of consolidated subsidiaries, net						(31,439	)
		Stock-based compensation						(11,927	)
		Depreciation and amortization						23
		Deferred income tax benefit						(8,094	)
		Changes in operating assets and liabilities:
			Receivables, pre-paids and other					3,221
			Payables and accruals					34,880
				Net cash provided by operating activities				4,055
Cash flows provided by investing activities:
	Net distributions and advances received from subsidiaries and affiliates							76,996
	Capital expended for property and equipment							(231	)
				Net cash provided by investing activities				76,765
Cash flows from financing activities:
	Treasury stock purchase							(78,893	)
	Proceeds from exercises of stock options							5,717
	Other financing activities, net							613
				Net cash used by financing activities				(72,563	)
				Effect of exchange rates on cash				(8,483	)
				Net decrease in cash and cash equivalents				(226	)
				Cash and cash equivalents:
					Beginning of period			4,093
					End of period		$	3,867

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				December 31,
				2004
				as adjusted
ASSETS
Current assets:
	Cash and cash equivalents			$	1,069,996
	Derivative instruments				56,011
	Other current assets				329
		Total current assets			1,126,336
Investments in consolidated subsidiaries, including intercompany balances					4,143,562
Property and equipment, at cost					7,597
Accumulated depreciation					(387	)
Property and equipment, net					7,210
Deferred tax asset					217
Other non-current assets					75
		Total assets		$	5,277,400
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accrued liabilities			$	3,927
	Derivative instruments				5,257
		Total current liabilities			9,184
Other long-term liabilities					31,133
		Total liabilities			40,317
Commitments and contingencies
Stockholders’ Equity:
	Series A common stock, $.01 par value. Authorized 500,000,000 shares; 168,514,962 shares issued at June 30, 2005				1,685
	Series B common stock, $.01 par value. Authorized 50,000,000 shares; 7,264,300 shares issued and outstanding at June 30, 2005				73
	Series C common stock, $.01 par value. Authorized 500,000,000 shares; 175,779,262 shares issued at June 30, 2005				1,758
	Additional paid-in capital (as adjusted)				6,999,877
	Accumulated deficit				(1,652,430	)
	Accumulated other comprehensive income (loss), net of taxes				14,010
	Treasury stock, at cost				(127,890	)
		Total stockholders’ equity			5,237,083
		Total liabilities and stockholders’ equity		$	5,277,400

IV-13

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				Six months				Seven months
				ended				ended
				June 30,				December 31,
				2005				2004
				Pre-LGI				as adjusted
				Combination
Operating costs and expenses:
	Selling, general and administrative			$	7,184			$	8,535
	Stock-based compensation charges				5,210				20,382
	Depreciation and amortization				388				387
		Operating loss			(12,782	)			(29,304	)
Other income (expense):
	Interest and dividend income				14,852				8,673
	Realized and unrealized gains (losses) on derivative instruments, net				8,038				(4,146	)
	Other, net				(642	)			1,465
					22,248				5,992
		Income (loss) before income taxes and equity in income of consolidated subsidiaries, net			9,466				(23,312	)
Equity in income (loss) of consolidated subsidiaries, net					(109,762	)			97,426
Income tax benefit					2,808				5,763
		Net income (loss) (as adjusted)		$	(97,488	)		$	79,877

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																							Accumulated
																							other
			Common stock												Additional								comprehensive				Treasury				Total
															paid-in				Accumulated				income (loss),				stock at				stockholders’
			Series A				Series B				Series C				capital				deficit				net of taxes				cost				equity
Balance at June 1, 2004 (as adjusted)			$	1,399			$	61			$	1,460			$	6,226,391			$	(1,732,307	)		$	(56,388	)		$	—			$	4,440,616
	Net income			—				—				—				—				79,877				—				—				79,877
	Other comprehensive earnings, net of taxes			—				—				—				—				—				70,398				—				70,398
	Adjustment due to issuance of stock by subsidiaries and affiliates and other changes in subsidiary equity, net of taxes			—				—				—				6,049				—				—				—				6,049
	Common stock issued in rights offering (as adjusted)			283				12				295				735,071				—				—				—				735,661
	Stock issued for stock option exercises (as adjusted)			3				—				3				11,984				—				—				—				11,990
	Repurchase of common stock			—				—				—				—				—				—				(127,890	)			(127,890	)
	Stock-based compensation, net of taxes			—				—				—				20,382				—				—				—				20,382
Balance at December 31, 2004 (as adjusted)				1,685				73				1,758				6,999,877				(1,652,430	)			14,010				(127,890	)			5,237,083
	Net loss (as adjusted)			—				—				—				—				(97,488	)			—				—				(97,488	)
	Other comprehensive loss, net of taxes			—				—				—				—				—				(152,303	)			—				(152,303	)
	Adjustment due to issuance of stock by subsidiaries and affiliates and other changes in subsidiary equity, net of taxes			—				—				—				127,127				—				—				—				127,127
	Stock issued in connection with equity incentive and 401(K) plans			1				—				—				5,196				—				—				—				5,197
	Stock-based compensation, net of taxes			—				—				—				5,210				—				—				—				5,210
Balance at June 30, 2005 (Pre-LGI Combination) (as adjusted)			$	1,686			$	73			$	1,758			$	7,137,410			$	(1,749,918	)		$	(138,293	)		$	(127,890	)		$	5,124,826

IV-15

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							Six months				Seven months
							ended				ended
							June 30,				December 31,
							2005				2004
							Pre-LGI				as adjusted
							Combination
Cash flows from operating activities:
	Net income (loss) (as adjusted)						$	(97,488	)		$	79,877
	Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
		Equity in income of consolidated subsidiaries, net						109,762				(97,426	)
		Stock-based compensation charges						5,210				20,382
		Realized and unrealized gains (losses) on derivative instruments, net						(8,038	)			4,146
		Depreciation and amortization						388				387
		Deferred income tax expense						(2,808	)			(4,417	)
		Other non-cash items, net						(10,364	)			30,195
		Changes in operating assets and liabilities:
			Receivables, pre-paids and other					46				(329	)
			Payables and accruals					(1,302	)			2,242
				Net cash (used) provided by operating activities				(4,594	)			35,057
Cash flows (used) provided by investing activities:
	Investments in and loans to consolidated subsidiaries, affiliates and others							(554,345	)			—
	Net distributions and advances received from subsidiaries and affiliates							—				400,281
	Net cash recorded (paid) to purchase or settle derivative instruments							57,099				(35,653	)
	Other investing activities, net							(17	)			(36	)
				Net cash (used) provided by investing activities				(497,263	)			364,592
Cash flows from financing activities:
	Net proceeds received from rights offering							—				735,661
	Treasury stock purchase							—				(127,890	)
	Proceeds from exercise of stock options							5,197				11,990
				Net cash provided by financing activities				5,197				619,761
				Net (decrease) increase in cash and cash equivalents				(496,660	)			1,019,410
				Cash and cash equivalents:
					Beginning of period			1,069,996				50,586
					End of period		$	573,336			$	1,069,996

IV-16

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Table of Contents

			Allowance for Doubtful Accounts
							Additions												Foreign
			Balance at				to costs												currency				Balance at
			beginning				and								Deductions				translation				end of
			of period				expenses				Acquisition				or write-offs				adjustments				period
			amounts in thousands
Year ended December 31:
	2003		$	13,104				1,450				—				(2,076	)			1,469				13,947
	2004		$	13,947				22,663				51,400				(30,264	)			3,644				61,390
	2005		$	61,390				39,944				31,903				(54,596	)			(5,000	)			73,641

IV-17

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IV-18

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Table of Contents

				2005				2004
				Yen				Yen
				(thousands)				(thousands)
ASSETS
Current assets:
	Cash and cash equivalents:
		Related party		¥	7,210,000			¥	3,100,000
		Other			7,807,758				2,252,611
	Accounts receivable (less allowance for doubtful accounts of ¥6,885 thousand in 2005 and ¥7,723 thousand in 2004):
		Related party			247,412				341,364
		Other			5,820,921				4,338,273
	Retail inventories				3,271,723				2,999,404
	Program rights and language versioning, net (Note 3)				776,225				599,480
	Deferred income taxes (Note 13)				1,920,446				1,334,560
	Prepaid and other current assets				944,943				401,840
	Total current assets				27,999,428				15,367,532
	Investments (Note 4)				8,323,586				6,929,961
	Property and equipment, net (Note 5)				5,558,196				5,327,068
	Software development costs, net (Note 6)				4,125,115				1,902,244
	Program rights and language versioning, excluding current portion, net (Note 3)				346,059				86,289
	Goodwill (Note 8)				294,244				470,131
	Other intangible assets, net (Note 7)				218,624				251,959
	Deferred income taxes (Note 13)				811,465				357,606
	Other assets, net				1,187,959				680,365
Total assets				¥	48,864,676			¥	31,373,155

IV-19

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				2005				2004
				Yen				Yen
				(thousands)				(thousands)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Short-term debt (related party) (Note 12):			¥	275,000			¥	—
	Current portion of long-term debt (Note 12):				1,600,000				—
	Obligations under capital leases, current installments (related party) (Note 11)				418,757				290,031
	Accounts payable:
		Related party			199,768				556,748
		Other			8,175,159				4,849,410
	Accrued liabilities:
		Related party			1,199,511				276,938
		Other			1,601,439				1,515,453
	Income taxes payable				5,035,948				2,191,203
	Advances from affiliate				1,700,000				938,000
	Deferred income taxes (Note 13)				7,195				—
	Other current liabilities				914,454				512,501
Total current liabilities					21,127,231				11,130,284
Long-term debt, excluding current portion (Note 12):
		Related party			—				1,000,000
		Other			2,400,000				4,000,000
Obligations under capital leases, excluding current installments (related party) (Note 11)					1,271,550				823,170
Accrued pension and severance cost (Note 14)					394,404				284,796
Deferred income taxes (Note 13)					347,427				81,380
Total liabilities					25,540,612				17,319,630
Minority interests					5,740,286				3,055,893
Shareholders’ equity (Note 15):
	Common stock, no par value;				11,434,000				11,434,000
	Authorized 460,000 shares; issued and outstanding 360,680 shares
	Additional paid-in capital				7,266,129				6,788,054
	Accumulated deficit				(1,154,532	)			(7,207,717	)
	Accumulated other comprehensive income (loss)				38,181				(16,705	)
	Total shareholders’ equity				17,583,778				10,997,632
Total liabilities and shareholders’ equity				¥	48,864,676			¥	31,373,155

IV-20

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				2005				2004				2003
				Yen				Yen				Yen
				(thousands)				(thousands)				(thousands)
Revenues:
	Retail sales, net			¥	75,676,822			¥	50,010,854			¥	38,699,329
	Television programming revenue:
		Related party			1,894,734				1,662,786				1,555,219
		Other			7,550,155				6,764,580				5,902,026
	Services and other revenue:
		Related party			957,801				866,157				755,244
		Other			1,564,374				1,176,418				906,453
Total revenues					87,643,886				60,480,795				47,818,271
Operating costs and expenses:
	Cost of retail sales:
		Related party			2,870,514				2,212,430				1,597,880
		Other			41,234,988				28,038,763				21,658,902
	Cost of programming and distribution:
		Related party			2,770,766				2,742,401				2,487,545
		Other			9,313,547				7,482,238				6,271,783
	Selling, general and administrative expenses:
	Related party				1,376,379				1,318,449				943,439
		Other			13,904,523				10,084,322				8,532,952
	Depreciation and amortization				1,848,694				1,380,432				1,210,163
	Impairment loss on long-lived assets (Note 5)				735,349				—				—
Total operating expenses					74,054,760				53,259,035				42,702,664
Operating income					13,589,126				7,221,760				5,115,607
Other income (expense):
	Interest expense:
		Related party			(46,576	)			(45,258	)			(60,073	)
		Other			(72,215	)			(77,245	)			(66,204	)
	Foreign exchange gain (loss)				488,924				126,572				(141,368	)
	Equity in income (losses) of equity-method affiliates (Note 4)				53,925				22,888				(64,472	)
	Gain on sale of investment in affiliate (Note 4)				116,441				—				—
	Impairment loss on investment (Note 4)				(30,000	)			—				—
	Other income (expense), net				5,859				(9,241	)			9,763
Total other income (expense)					516,358				17,716				(322,354	)
Income before income taxes and minority interests					14,105,484				7,239,476				4,793,253
Income tax expense (Note 13)					(5,457,906	)			(2,951,446	)			(1,519,225	)
Minority interests in earnings, net of tax					(2,594,393	)			(1,077,972	)			(608,738	)
Net income				¥	6,053,185			¥	3,210,058			¥	2,665,290

IV-21

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			2005				2004				2003
			Yen				Yen				Yen
			(thousands)				(thousands)				(thousands)
Common stock (Note 15):
	Balance at beginning of year		¥	11,434,000			¥	16,834,000			¥	16,834,000
	Transfer from common stock			—				(8,400,000	)			—
	Issuance of common stock			—				3,000,000				—
	Balance at end of year			11,434,000				11,434,000				16,834,000
Additional paid-in capital (Note 15):
	Balance at beginning of year			6,788,054				—				—
	Gain on issuance of common stock by equity-method investee, net of income tax of ¥282,787 thousand (Note 4)			478,075				—				—
	Transfer from common stock			—				6,587,064				—
	Issuance of common stock			—				3,000,000				—
	Carryover basis adjustment related to LJS acquisition (Note 2)			—				(2,799,010	)			—
	Balance at end of year			7,266,129				6,788,054				—
Accumulated deficit:
	Balance at beginning of year			(7,207,717	)			(12,230,711	)			(14,896,001	)
	Transfer from common stock (Note 15)			—				1,812,936				—
	Net income			6,053,185				3,210,058				2,665,290
	Balance at end of year			(1,154,532	)			(7,207,717	)			(12,230,711	)
Accumulated other comprehensive income:
	Balance at beginning of year			(16,705	)			—				—
	Unrecognized gains (losses) on derivative instruments, net of income tax expense of ¥37,653 thousand in 2005 and income tax benefit of ¥11,460 thousand in 2004 (Note 9):			54,886				(16,705	)			—
	Balance at end of year			38,181				(16,705	)			—
Treasury stock at cost:
	Balance at beginning of year			—				—				—
	Redemption of common stock, held as treasury stock (Note 15)			—				(6,000,000	)			—
	Issuance of treasury stock related to LJS acquisition (Note 2)			—				6,000,000				—
	Balance at end of year			—				—				—
				—				—				—
Total shareholders’ equity			¥	17,583,778			¥	10,997,632			¥	4,603,289
Comprehensive income:
	Net income for the year		¥	6,053,185			¥	3,210,058			¥	2,665,290
	Unrealized gain (loss) on derivative instruments, net of income tax expense of ¥30,252 thousand in 2005 and income tax benefit of ¥11,460 thousand in 2004			44,096				(16,705	)			—
	Reclassification adjustment for loss included in net income, net of income tax of ¥7,401 thousand			10,790				—				—
	Total comprehensive income		¥	6,108,071			¥	3,193,353			¥	2,665,290

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					2005				2004				2003
					Yen				Yen				Yen
					(thousands)				(thousands)				(thousands)
Cash flows from operating activities:
Net income					¥	6,053,185			¥	3,210,058			¥	2,665,290
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				1,848,694				1,380,432				1,210,163
		Amortization of program rights and language versioning				1,810,630				1,732,435				1,570,670
		Provision for doubtful accounts				(838	)			(3,519	)			1,975
		Equity in (income) losses of equity-method affiliates				(53,925	)			(22,888	)			64,472
		Deferred income taxes				(1,061,284	)			(278,181	)			(553,039	)
		Minority interest in earnings				2,594,393				1,077,972				608,738
		Gain on sale of investment in affiliate				(116,441	)			—				—
			Impairment loss on long-lived assets			735,349				—				—
			Impairment loss on investment			30,000				—				—
			Changes in assets and liabilities, net of effects of acquisitions:
			Purchase of program rights and language versioning			(2,247,145	)			(1,631,074	)			(1,608,392	)
			Increase in accounts receivable			(1,387,858	)			(1,307,561	)			(740,650	)
			(Increase) decrease in retail inventories			(272,319	)			(763,453	)			252,870
			Increase in accounts payable			2,777,437				883,283				777,510
			Increase in accrued liabilities			977,414				263,015				425,674
			Increase in income taxes payable			2,844,746				674,288				369,587
			Other, net			(446,543	)			(22,218	)			210,947
Net cash provided by operating activities						14,085,495				5,192,589				5,255,815
Cash flows from investing activities:
	Capital expenditures					(3,784,687	)			(3,886,668	)			(1,299,228	)
	Acquisition of subsidiary, net of cash acquired					(46,365	)			(391,887	)			—
	Proceeds from sale of investment in affiliate					275,102				—				—
	Investments in affiliates					(767,500	)			(748,500	)			(1,259,945	)
	Other, net					—				—				4,500
Net cash used in investing activities						(4,323,450	)			(5,027,055	)			(2,554,673	)

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				2005				2004				2003
				Yen				Yen				Yen
				(thousands)				(thousands)				(thousands)
Cash flows from financing activities:
	Proceeds (repayments) on short-term debt				—				(46,000	)			46,000
	Proceeds from advances from affiliate				762,000				938,000				—
	Proceeds from issuance of short-term debt (related party)				275,000				—				4,040,000
	Principal payments on shareholders loan				(1,000,000	)			(176,000	)			(4,000,000	)
	Principal payments on obligations under capital leases				(354,515	)			(429,014	)			(460,262	)
	Proceeds from issuance of common stock				—				6,000,000				—
	Proceeds from issuance of common stock by consolidated investee				90,000				—				—
	Payments to acquire treasury stock				—				(6,000,000	)			—
Net cash (used in) provided by financing activities					(227,515	)			286,986				(374,262	)
Net effect of exchange rate changes on cash and cash equivalents					130,617				(4,677	)			(23,095	)
Net increase in cash and cash equivalents					9,665,147				447,843				2,303,785
Cash and cash equivalents at beginning of year					5,352,611				4,904,768				2,600,983
Cash and cash equivalents at end of year				¥	15,017,758			¥	5,352,611			¥	4,904,768
Supplemental information:
	Cash paid during the year for:
		Income taxes		¥	3,674,446			¥	2,551,301			¥	1,702,678
		Interest			91,860				90,711				126,277
Acquisition of BBF (Note 2)
	Fair value of assets acquired (including cash acquired of ¥158,113 thousand)				—				705,657				—
	Fair value of liabilities assumed				—				(87,657	)			—
	Accrued estimated additional purchase consideration				—				(68,000	)			—
Non-cash activities:
	Assets acquired under capital leases				931,620				1,037,505				142,644
	Accrual for purchase of property and equipment				290,402				241,622				—
	Acquisition of LJS through issuance of treasury stock (Note 2)				—				3,200,990				—
	Elimination of long-term loan from LJS				—				840,000				—

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(1)	Description of Business and Summary of Significant Accounting Policies and Practices

(a)	Description of Business

(b)	Basis of Consolidated Financial Statements

(c)	Principles of Consolidation

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(d)	Cash Equivalents

(e)	Allowance for Doubtful Accounts

(f)	Retail Inventories

(g)	Program Rights and Language Versioning

(h)	Investments

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(i)	Derivative Financial Instruments

(j)	Property and Equipment

Furniture and fixtures			2-20 years
Leasehold and building improvements			3-18 years
Equipment and vehicles			2-10 years
Buildings			37-50 years

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(k)	Software Development Costs

(l)	Goodwill and Other Intangible Assets

(m)	Long-Lived Assets and Long-Lived Assets to Be Disposed Of

(n)	Accrued Pension and Severance Costs

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(o)	Revenue Recognition

	Retail Sales

	Television Programming Revenue

	Services and Other Revenue

(p)	Cost of Retail Sales

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(q)	Cost of Programming and Distribution

(r)	Advertising Expense

(s)	Income Taxes

(t)	Issuance of Stock by Subsidiaries and Investee Affiliates

(u)	Foreign Currency Transactions

(v)	Use of Estimates

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(w)	New Accounting Standards

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(x)	Reclassifications

(2)	Acquisitions

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			Yen
			(thousands)
Purchase accounting:
	50% of acquisition consideration		¥	3,000,000
	Fair value of 50% of underlying net assets acquired			200,990
	Equity method goodwill			2,799,010
Carryover basis:
	50% of acquisition consideration			3,000,000
	Historical cost of 50% of underlying net assets acquired			200,990
	Carryover basis adjustment to additional paid in capital			2,799,010

		Yen
		(thousands)
Current assets		¥	224,471
Intangible assets			200,000
Goodwill			281,186
Total assets acquired			705,657
Current liabilities assumed			(6,277	)
Deferred tax liabilities			(81,380	)
Net assets acquired		¥	618,000

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(3)	Program Rights and Language Versioning

		2005				2004
		Yen				Yen
		(thousands)				(thousands)
Program rights		¥	1,326,661			¥	1,308,623
Language versioning			130,389				116,910
			1,457,050				1,425,533
Less accumulated amortization			(334,766	)			(739,764	)
			1,122,284				685,769
Less current portion			(776,225	)			(599,480	)
		¥	346,059			¥	86,289

(4)	Investments

			2005								2004
			percentage				carrying				percentage				carrying
			ownership				amount				ownership				amount
			Yen								Yen
			(thousands)								(thousands)
Investments accounted for under the equity method:
	Discovery Japan, Inc.			50.0	%		¥	894,321				50.0	%		¥	580,455
	Animal Planet Japan, Co. Ltd.			33.3	%			197,928				33.3	%			223,510
	InteracTV Co., Ltd.			42.5	%			38,399				42.5	%			38,586
	JSports Broadcasting Corporation			33.4	%			4,783,458				42.8	%			4,045,414
	AXN Japan, Inc.			35.0	%			909,480				35.0	%			879,630
	Jupiter VOD Co., Inc.			50.0	%			768,900				50.0	%			401,266
Total equity method investments								7,592,486								6,168,861
Investments accounted for at cost:
	NikkeiCNBC Japan, Inc.			9.8	%			100,000				9.8	%			100,000
	Kids Station, Inc.			15.0	%			304,500				15.0	%			304,500
	AT-X, Inc.			12.3	%			236,000				12.3	%			266,000
	Nihon Eiga Satellite Broadcasting Corporation			10.0	%			66,600				10.0	%			66,600
	Satellite Service Co. Ltd.			12.0	%			24,000				12.0	%			24,000
Total cost method investments								731,100								761,100
							¥	8,323,586							¥	6,929,961

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	Discovery Japan, Inc., a general documentary channel business currently operating two channels;
	Animal Planet Japan, Co. Ltd., an animal-specific documentary channel;

	JSports Broadcasting Corporation, a sports channel business currently operating four channels;

	AXN Japan, Inc., a general entertainment channel;
	NikkeiCNBC Japan, Inc., a news service channel;
	Kids Station, Inc., a children’s entertainment channel;
	AT-X, Inc., an animation genre channel;

	Nihon Eiga Satellite Broadcasting Corporation, a Japanese period drama and movie channels business currently operating two channels; and
	Jupiter VOD Co., Inc. a multi-genre video on demand programming service

	InteracTV Co., Ltd., holds licenses for Movie Plus, Lala, Golf Network and Shop channels, among others;
	Satellite Service Co. Ltd., holds licenses for Discovery and Animal Planet channels, among others.

		2005				2004				2003
		Yen				Yen				Yen
		(thousands)				(thousands)				(thousands)
Discovery Japan, Inc.		¥	313,865			¥	298,763			¥	143,445
Animal Planet Japan, Co. Ltd.			(125,581	)			(283,913	)			(311,673	)
InteracTV Co., Ltd.			(188	)			(219	)			(1,272	)
JSports Broadcasting Corporation			135,845				135,973				143,227
AXN Japan, Inc.			12,351				(43,982	)			(38,199	)
Jupiter VOD Co., Inc.			(282,367	)			(83,734	)			—
		¥	53,925			¥	22,888			¥	(64,472	)

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			2005				2004
			Yen				Yen
			(thousands)				(thousands)
Combined financial position at December 31,
	Current assets		¥	10,546,734			¥	8,533,233
	Other assets			5,464,831				634,175
	Total assets			16,011,565				9,167,408
	Current liabilities			3,620,947				3,056,756
	Other liabilities			1,676,786				1,413,948
	Shareholders’ equity			10,713,832				4,696,704
	Total liabilities and shareholders’ equity		¥	16,011,565			¥	9,167,408

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		2005				2004				2003
		Yen				Yen				Yen
		(thousands)				(thousands)				(thousands)
Combined operations for the year ended December 31,
Revenues		¥	22,852,521			¥	21,682,192			¥	15,256,112
Operating expenses			22,648,732				21,998,685				15,270,229
Operating income (loss)			203,789				(316,493	)			(14,117	)
Other income, net, including income taxes			(1,027	)			783,921				319,099
Net income		¥	202,762			¥	467,428			¥	304,982

(5)	Property and Equipment

		2005				2004
		Yen				Yen
		(thousands)				(thousands)
Furniture and fixtures		¥	267,031			¥	187,233
Leasehold and building improvements			1,463,370				1,362,537
Equipment and vehicles			4,924,584				4,295,113
Buildings			851,485				851,485
Land			437,147				437,147
Construction in progress			14,188				183,254
			7,957,805				7,316,769
Less accumulated depreciation and amortization			(2,399,609	)			(1,989,701	)
		¥	5,558,196			¥	5,327,068

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(6)	Software Development Costs

		2005				2004
		Yen				Yen
		(thousands)				(thousands)
Software development costs		¥	6,686,711			¥	3,773,137
Less accumulated amortization			(2,561,596	)			(1,870,893	)
		¥	4,125,115			¥	1,902,244

(7)	Intangibles

			2005				2004
			Yen				Yen
			(thousands)				(thousands)
Intangible assets subject to amortization, net of accumulated amortization of ¥54,264 thousand in 2005 and ¥28,417 thousand in 2004:
	Channel packaging arrangements		¥	180,000			¥	200,000
	Other			33,551				46,886
				213,551				246,886
Other intangible assets not subject to amortization:				5,073				5,073
Total other intangible assets			¥	218,624			¥	251,959

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			Yen
			(thousands)
Year ending December 31,
	2006		¥	55,822
	2007			48,751
	2008			22,868
	2009			22,868
	2010			22,803

(8)	Goodwill

		2005				2004				2003
		Yen				Yen				Yen
		(thousands)				(thousands)				(thousands)
Balance at beginning of year		¥	470,131			¥	188,945			¥	191,482
Acquisitions			—				281,186				—
Adjustment			(175,887	)			—				(2,537	)
Balance at end of year		¥	294,244			¥	470,131			¥	188,945

(9)	Derivative Instruments and Hedging Activities

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(10)	Fair Value of Financial Instruments

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(11)	Leases

		2005				2004
		Yen				Yen
		(thousands)				(thousands)
Equipment and vehicles			¥2,115,924				¥1,839,215
Others			155,775				126,368
Less accumulated amortization			(960,409	)			(865,908	)
			¥1,311,290				¥1,099,675

			Yen
			(thousands)
Year ending December 31,
	2006		¥	446,634
	2007			441,610
	2008			394,358
	2009			342,275
	2010			120,893
	Thereafter			38,302
Total minimum lease payments				1,784,072
Less amount representing interest (at rates ranging from 1.25% to 2.60%)				(93,765	)
Present value of minimum capital lease payments				1,690,307
Less current installments				(418,757	)
			¥	1,271,550

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			Yen
			(thousands)
Year ending December 31,
	2006			552,534
	2007			4,980
	2008			4,980
	2009			4,980
	2010			4,980
	Thereafter			106,655
Total minimum lease payments			¥	679,109

(12)	Debt

		2005				2004
		Yen				Yen
		(thousands)				(thousands)
Loans from minority shareholder			¥275,000				¥—

		2005				2004
		Yen				Yen
		(thousands)				(thousands)
Borrowings from banks		¥	4,000,000			¥	4,000,000
Loans from shareholders			—				1,000,000
Total long term debt			4,000,000				5,000,000
Less: current portion			1,600,000				—
Long-term debt		¥	2,400,000			¥	5,000,000

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			2005
			Yen
			(thousands)
Year ending December 31,
	2006		¥	1,600,000
	2007			1,600,000
	2008			800,000
	2009			—
	2010			—
Total debt			¥	4,000,000

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(13)	Income Taxes

		2005				2004				2003
		Yen				Yen				Yen
		(thousands)				(thousands)				(thousands)
Current taxes		¥	6,519,191			¥	3,229,627			¥	2,072,264
Deferred taxes			(1,061,285	)			(278,181	)			(553,039	)
Income tax expense		¥	5,457,906			¥	2,951,446			¥	1,519,225

			2005				2004
			Yen				Yen
			(thousands)				(thousands)
Deferred tax assets:
	Retail inventories		¥	981,641			¥	811,289
	Property and equipment			747,585				297,238
	Accrued liabilities			747,507				330,995
	Enterprise tax payable			414,534				195,588
	Unrealized foreign exchange			—				62,581
	Equity-method investments			631,242				944,389
	Operating loss carryforwards			584,009				895,097
	Others			446,840				320,361
				4,553,358				3,857,538
	Less valuation allowance			(1,712,785	)			(2,165,372	)
Total deferred tax assets				2,840,573				1,692,166
Deferred tax liabilities:
	Equity-method investment			(282,787	)			—
	Intangibles			(73,242	)			(81,380	)
	Unrealized foreign exchange			(97,060	)			—
	Others			(10,195	)			—
Total deferred tax liabilities				(463,284	)			(81,380	)
Net deferred tax assets			¥	2,377,289			¥	1,610,786

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		Yen
		(thousands)
Year ending December 31,
2006			142,802
2007			—
2008			11,910
2009			162,841
2010			228,347
2011			212,878
2012			676,486
		¥	1,435,264

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		2005				2004				2003
Statutory tax rate			40.7	%			42.1	%			42.1	%
Non-deductible expenses			0.9				1.4				1.9
Change in valuation allowance			0.9				(1.2	)			(9.9	)
Income tax credits			(3.4	)			(0.8	)			—
Additional tax deduction due to intercompany transfer of assets			(0.5	)			(1.1	)			(1.7	)
Effect of tax rate change			—				0.7				—
Others			0.1				(0.3	)			(0.7	)
Effective income tax rate			38.7	%			40.8	%			31.7	%

(14)	Accrued Pension and Severance Cost

		2005				2004				2003
		Yen				Yen				Yen
		(thousands)				(thousands)				(thousands)
Service cost — benefits earned during the year		¥	65,013			¥	49,768			¥	44,743
Interest cost on projected benefit obligation			5,696				4,332				3,951
Recognized actuarial loss			44,420				24,317				15,972
Net periodic cost		¥	115,129			¥	78,417			¥	64,666

			2005				2004
			Yen				Yen
			(thousands)				(thousands)
Change in projected benefit obligations:
	Benefit obligations, beginning of year		¥	284,796			¥	216,611
	Service cost			65,013				49,768
	Interest cost			5,696				4,332
	Actuarial loss			44,420				24,317
	Benefits paid			(5,521	)			(10,232	)
Projected benefit obligations, end of year			¥	394,404			¥	284,796
Accumulated benefit obligations, end of year			¥	290,871			¥	210,159

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			Yen
			(thousands)
Year ending December 31,
	2006			27,647
	2007			27,498
	2008			33,765
	2009			41,881
	2010			32,855
	Years 2011-2015			233,040

(15)	Shareholders’ Equity

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	1) Issuance of 24,000 newly issued shares of common stock to Sumitomo Corporation at a rate of ¥250,000 per common share (¥6,000,000 thousand), ¥3,000,000 thousand of which was allocated to common stock with the remaining ¥3,000,000 thousand allocated to additional paid-in capital;
	2) Redemption of 12,000 shares of common stock from Sumitomo Corporation at a rate of ¥250,000 per common share (¥3,000,000 thousand) to be held as treasury stock;
	3) Redemption of 12,000 shares of common stock from Liberty Programming Japan at a rate of ¥250,000 per common share (¥3,000,000 thousand) to be held as treasury stock;
	4) Issuance of 24,000 shares of common stock held in treasury shares to Liberty Programming Japan II Inc. in return for 1,000 shares of common stock in Liberty J Sports Inc. Liberty J Sports Inc. was then converted to a limited liability company with Certificate of Conversion filed with the Delaware Secretary of State, and was subsequently renamed J Sports LLC. J Sports LLC is a wholly owned subsidiary of JTV.

(16)	Related Party Transactions

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(17)	Concentration of Credit Risk

(18)	Commitments, other than leases

			Yen
			(thousands)
Year ending December 31, 2006			¥	1,530,865
	2007			407,942
	2008			171,238
	2009			163,033
	2010			157,033
Total program rights purchase commitments			¥	2,430,111

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			Yen
			(thousands)
Year ending December 31,
	2006		¥	994,395
	2007			492,196
	2008			311,321
	2009			263,317
	2010			280,055
	Thereafter			417,938
Total transponder and uplink services commitments			¥	2,759,222

			Yen
			(thousands)
Year ending December 31,
	2006		¥	9,068
	2007			126,949
	2008			126,949
	2009			126,949
	2010			126,949
	Thereafter			—
Total software license fee commitments			¥	516,864

(19)	Business Realignment Costs

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				December 31,
				2003				2004
				(Yen in thousands)
Current assets:
	Cash and cash equivalents			¥	7,785,978			¥	10,420,109
	Restricted cash				1,773,060				—
	Accounts receivable, less allowance for doubtful accounts of ¥229,793 thousand in 2003 and ¥245,504 thousand in 2004				7,907,324				8,823,311
	Loans to related party (Note 5)				—				4,030,000
	Prepaid expenses and other current assets (Note 8)				1,596,150				4,099,032
		Total current assets			19,062,512				27,372,452
Investments:
	Investments in affiliates (Notes 3 and 5)				2,794,533				3,773,360
	Investments in other securities, at cost				2,891,973				2,901,566
					5,686,506				6,674,926
Property and equipment, at cost (Notes 5 and 7):
	Land				1,826,787				1,796,217
	Distribution system and equipment				312,330,187				344,207,670
	Support equipment and buildings				11,593,849				12,612,896
					325,750,823				358,616,783
	Less accumulated depreciation				(81,523,580	)			(108,613,916	)
					244,227,243				250,002,867
Other assets:
	Goodwill, net (Notes 2 and 4)				139,853,596				140,658,718
	Other (Note 4 and 8)				13,047,229				14,582,383
					152,900,825				155,241,101
				¥	421,877,086			¥	439,291,346

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				December 31,
				2003				2004
				(Yen in thousands)
Current liabilities:
	Short-term loans			¥	—			¥	250,000
	Long-term debt — current portion (Notes 6 and 12)				2,438,480				5,385,980
	Capital lease obligations — current portion (Notes 5, 7 and 12):
		Related parties			7,673,978				8,237,323
		Other			1,800,456				1,291,918
	Accounts payable				17,293,932				17,164,463
	Accrued expenses and other liabilities				3,576,708				6,155,380
		Total current liabilities			32,783,554				38,485,064
Long-term debt, less current portion (Notes 6 and 12):
	Related parties				149,739,250				—
	Other				72,092,465				194,088,485
Capital lease obligations, less current portion (Notes 5, 7 and 12):
	Related parties				17,704,295				19,714,799
	Other				3,951,900				2,560,511
Deferred revenue					41,635,426				41,699,497
Severance and retirement allowance (Note 9)					2,023,706				2,718,792
Redeemable preferred stock of consolidated subsidiary (Note 10)					500,000				500,000
Other liabilities					3,411,564				180,098
		Total liabilities			323,842,160				299,947,246
Minority interest					1,266,287				974,227
Commitments and contingencies (Note 14)
Shareholders’ equity (Note 11):
	Ordinary shares no par value				63,132,998				78,133,015
		Authorized 15,000,000 shares; issued and outstanding 4,684,535.74 shares at December 31, 2003 and 5,146,074.74 shares at December 31, 2004
	Additional paid-in capital				122,837,273				137,930,774
	Accumulated deficit				(88,506,887	)			(77,685,712	)
	Accumulated other comprehensive loss				(694,745	)			(8,204	)
		Total shareholders’ equity			96,768,639				138,369,873
				¥	421,877,086			¥	439,291,346

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				Year ended December 31,
				2003				2004
				(Yen in thousands, except
				share and per share
				amounts)
Revenue (Note 5):
	Subscription fees			¥	123,214,958			¥	140,826,446
	Other				19,944,074				20,519,825
					143,159,032				161,346,271
Operating costs and expenses:
	Operating and programming costs (Note 5)				62,961,783				66,569,614
	Selling, general and administrative (inclusive of stock compensation expense of ¥120,214 thousand in 2003 and ¥84,267 thousand in 2004) (Notes 5 and 11)				30,584,236				31,611,717
	Depreciation and amortization				36,410,894				40,573,166
					129,956,913				138,754,497
		Operating income (loss)			13,202,119				22,591,774
Other income (expense):
	Interest expense, net:
		Related parties (Note 5)			(4,562,594	)			(4,055,343	)
		Other			(3,360,674	)			(6,045,939	)
	Other income, net				316,116				37,574
		Income (loss) before income taxes and other items			5,594,967				12,528,066
Equity in earnings of affiliates (inclusive of stock compensation expense of ¥(2,855) thousand in 2003 and ¥9,217 thousand in 2004) (Note 11)					414,756				610,110
Minority interest in net (income) losses of consolidated subsidiaries					(448,668	)			(458,624	)
	Income (loss) before income taxes				5,561,055				12,679,552
Income taxes (Note 8)					(209,805	)			(1,858,377	)
		Net income (loss)		¥	5,351,250			¥	10,821,175
Per share data:
	Net income (loss) per share — basic and diluted			¥	1,214			¥	2,221
Weighted average number of ordinary shares outstanding — basic and diluted					4,407,046				4,871,169

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																			Accumulated
							Additional				Comprehensive								Other				Total
			Ordinary				Paid-in				Income				Accumulated				Comprehensive				Shareholders’
			Shares				Capital				(Loss)				Deficit				Loss				Equity
			(Yen in thousands, except per share amounts)
Balance at January 1, 2003			¥	47,002,623			¥	106,589,539							¥	(93,858,137	)		¥	—			¥	59,734,025
Net income				—				—			¥	5,351,250				5,351,250				—				5,351,250
Other comprehensive loss:
	Unrealized loss on cash flow hedge											(694,745	)							(694,745	)			(694,745	)
Comprehensive income											¥	4,656,505
Stock compensation (Notes 1 and 11)				—				117,359								—				—				117,359
Ordinary shares issued upon conversion of long-term debt; 750,250 shares at ¥43,000 per share (Note 6)				16,130,375				16,130,375								—				—				32,260,750
Balance at December 31, 2003			¥	63,132,998			¥	122,837,273							¥	(88,506,887	)		¥	(694,745	)		¥	96,768,639
Net income				—				—			¥	10,821,175				10,821,175				—				10,821,175
Other comprehensive gain:
	Unrealized gain on cash flow hedge											686,541								686,541				686,541
Comprehensive income											¥	11,507,716
Stock compensation (Notes 1 and 11)				—				93,484								—				—				93,484
Ordinary shares issued; 461,539 shares at ¥65,000 per share (Note 1)				15,000,017				15,000,017								—				—				30,000,034
Balance at December 31, 2004			¥	78,133,015			¥	137,930,774							¥	(77,685,712	)		¥	(8,204	)		¥	138,369,873

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						Year ended December 31,
						2003				2004
						(Yen in thousands)
Cash flows from operating activities:
	Net income					¥	5,351,250			¥	10,821,175
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Gain on forgiveness of subsidiary debt					(400,000	)			—
		Depreciation and amortization					36,410,894				40,573,166
		Equity in earnings of affiliates					(414,756	)			(610,110	)
		Minority interest in net income of consolidated subsidiaries					448,668				458,624
		Stock compensation expense					120,214				84,267
		Deferred income taxes					—				45,591
		Provision for retirement allowance					417,335				647,592
		Changes in operating assets and liabilities, excluding effects of business combinations:
			Decrease/(increase) in accounts receivable, net				1,712,904				(431,162	)
			Decrease in prepaid expenses and other current assets				349,147				4,866
			(Increase)/decrease in other assets				(325,769	)			2,443,960
			(Decrease)/increase in accounts payable				171,705				(1,184,539	)
			Increase in accrued expenses and other liabilities				2,665,162				39,279
			Increase/(decrease) in deferred revenue				458,315				(380,578	)
				Net cash provided by operating activities			46,965,069				52,512,131
Cash flows from investing activities:
	Capital expenditures						(32,478,389	)			(31,792,956	)
	Acquisition of new subsidiaries, net of cash acquired						—				(442,910	)
	Investments in and advances to affiliates						(172,500	)			(359,500	)
	(Increase)/decrease in restricted cash						(1,773,060	)			1,773,060
	Loans to related party						—				(4,030,000	)
	Acquisition of minority interest in consolidated subsidiaries						(25,565	)			(4,960,484	)
	Other investing activities						(76,891	)			(69,427	)
				Net cash used in investing activities			(34,526,405	)			(39,882,217	)
Cash flows from financing activities:
	Proceeds from issuance of common stock						—				30,000,034
	Net increase/(decrease) in short-term loans						(228,785,000	)			250,000
	Proceeds from long-term debt						239,078,000				185,302,000
	Principal payments of long-term debt						(8,184,980	)			(210,097,730	)
	Principal payments under capital lease obligations						(10,843,024	)			(11,887,363	)
	Other financing activities						(3,464,440	)			(3,562,724	)
				Net cash provided by (used in) financing activities			(12,199,444	)			(9,995,783	)
Net increase in cash and cash equivalents							239,220				2,634,131
Cash and cash equivalents at beginning of year							7,546,758				7,785,978
Cash and cash equivalents at end of year						¥	7,785,978			¥	10,420,109

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1.	Description of Business, Basis of Financial Statements and Summary of Significant Accounting Policies

LMI/ Sumisho Super Media, LLC (“SM”)			65.23%
Microsoft Corporation (“Microsoft”)			19.46%
Sumitomo Corporation (“SC”)			12.25%
Mitsui & Co., Ltd.			1.53%
Matsushita Electric Industrial Co., Ltd.			1.53%

	Basis of Financial Statements

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	(a) Consolidation Policy

	(b) Cash and Cash Equivalents

	(c) Allowance for Doubtful Accounts

	(d) Investments

	(e) Property and Equipment

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	(f) Goodwill

	(g) Long-Lived Assets

	(h) Other Assets

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	(i) Derivative Financial Instruments

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	(j) Severance and Retirement Plans

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			2003				2004
Net income (loss), as reported			¥	5,351,250				¥10,821,175
	Add stock-based compensation expense included in reported net income (loss)			—				—
	Deduct stock-based compensation expense determined under fair value based method for all awards, net of applicable taxes			(454,172	)			(607,655	)
Pro forma net income (loss)			¥	4,897,078				¥10,213,520
Basic and diluted per share data:
Net income (loss) per share, as reported (Yen)				1,214				2,221
Net income (loss) per share, pro forma (Yen)				1,111				2,097

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		2004
Cash, receivables and other assets		¥	2,073,191
Property and equipment			791,856
Goodwill			4,228,117
Debt and capital lease obligations			—
Other liabilities			(1,395,471	)
		¥	5,697,693

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				2003				2004
Combined Financial Position:
	Property and equipment, net			¥	29,696,602			¥	29,578,096
	Other assets, net				6,201,251				7,545,469
		Total assets		¥	35,897,853			¥	37,123,565
	Debt			¥	17,998,825			¥	15,577,345
	Other liabilities				16,030,950				17,224,152
	Shareholders’ equity				1,868,078				4,322,068
		Total liabilities and equity		¥	35,897,853			¥	37,123,565

				2003				2004
Combined Operations:
	Total revenue			¥	19,776,603			¥	21,784,795
	Operating, selling, general and administrative expenses				(13,430,881	)			(15,080,471	)
	Depreciation and amortization				(3,682,641	)			(4,164,827	)
		Operating income			2,663,081				2,539,497
	Interest expense, net				(478,609	)			(427,400	)
	Other expense, net				(1,013,158	)			(428,107	)
		Net income		¥	1,171,314			¥	1,683,990

		2003				2004
Goodwill, net, beginning of year		¥	139,827,277			¥	139,853,596
Goodwill acquired during the year			26,319				4,228,117
Initial recognition of acquired tax benefits allocated to reduce goodwill of acquired entities (Note 8)			—				(3,422,995	)
Goodwill, net, end of year		¥	139,853,596			¥	140,658,718

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			2003				2004
Lease and other deposits			¥	4,295,947			¥	4,313,742
Deferred financing costs				3,763,785				3,540,302
Capitalized computer software, net				3,022,557				3,351,115
Long-term loans receivable, net				300,380				270,885
Deferred tax assets				—				1,308,582
Other				1,664,560				1,797,757
	Total other assets		¥	13,047,229			¥	14,582,383

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		2003				2004
¥140 billion Facility term loans, due fiscal 2005 — 2009		¥	53,000,000			¥	—
¥175 billion Facility term loans, due fiscal 2005 — 2011			—				130,000,000
Mezzanine Facility Subordinated loan due fiscal 2012			—				50,000,000
8 yr Shareholder Subordinated loans, due fiscal 2011			117,739,250				—
8 yr Shareholder Tranche B Subordinated loans, due fiscal 2011			32,000,000				—
0% unsecured loans from Development Bank of Japan, due fiscal 2005 — 2019			12,223,720				—
Unsecured loans from Development Bank of Japan, due fiscal 2005 — 2019, interest from 0.65% to 6.8%			3,895,400				—
0% secured loans from Development Bank of Japan, due fiscal 2005 — 2019			5,354,735				15,810,095
Secured loans from Development Bank of Japan, due fiscal 2005 — 2019, interest at 0.95% to 6.8%			—				3,614,200
0% unsecured loans from others, due fiscal 2012			57,090				50,170
Total			224,270,195				199,474,465
Less: current portion			(2,438,480	)			(5,385,980	)
Long-term debt, less current portion		¥	221,831,715			¥	194,088,485

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Year ending December 31,
2005		¥	5,385,980
2006			11,648,720
2007			20,461,660
2008			31,474,610
2009			42,981,060
Thereafter			87,522,435
		¥	199,474,465

		2003				2004
Distribution system and equipment		¥	45,170,512			¥	48,061,224
Support equipment and buildings			6,656,913				6,594,499
Less: accumulated depreciation			(22,111,664	)			(24,129,460	)
Other assets, at cost, net of depreciation			292,511				209,669
		¥	30,008,272			¥	30,735,932

			Capital				Operating
Year ending December 31,			Leases				Leases
	2005		¥	10,479,258			¥	901,131
	2006			8,298,826				750,754
	2007			5,997,212				626,332
	2008			4,102,122				399,496
	2009			2,810,622				383,100
	More than five years			2,686,635				703,288
Total minimum lease payments				34,374,675			¥	3,764,101
Less: amount representing interest (rates ranging from 1.10% to 5.99%)				(2,570,124	)
Present value of net minimum payments				31,804,551
Less: current portion				(9,529,241	)
Noncurrent portion			¥	22,275,310

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			2003				2004
Current			¥	209,805			¥	1,812,786
Deferred				—				45,591
	Income tax expense		¥	209,805			¥	1,858,377

			2003				2004
Normal effective statutory tax rate				42.0%				42.0%
	Adjustment to deferred tax assets and liabilities for enacted changes in tax laws and rates			—				0.1
	Increase/(decrease) in valuation allowance			(41.2	)			(27.4	)
	Other			3.0				—
Effective tax rate				3.8%				14.7%

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			2003				2004
Deferred tax assets:
	Operating loss carryforwards		¥	29,921,448			¥	21,649,833
	Deferred revenue			14,165,581				14,455,010
	Lease obligation			12,452,252				12,721,820
	Retirement and other allowances			1,390,741				1,459,068
	Investment in affiliates			794,896				567,766
	Accrued expenses and other			2,485,228				3,978,505
	Total gross deferred tax assets			61,210,146				54,832,002
	Less: valuation allowance			(45,846,086	)			(35,240,909	)
	Deferred tax assets			15,364,060				19,591,093
Deferred tax liabilities:
	Property and equipment			12,680,631				13,796,923
	Tax deductible goodwill			633,155				—
	Other			2,050,274				2,416,766
	Total gross deferred tax liabilities			15,364,060				16,213,689
	Net deferred tax assets		¥	—			¥	3,377,404

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Year ending December 31,
2005		¥	17,501,242
2006			20,094,037
2007			—
2008			55,494
2009			10,751,591
2010-2011			5,722,217
		¥	54,124,581

		2003				2004
Service cost — benefits earned during the year		¥	257,230			¥	265,608
Interest cost on projected benefit obligation			40,159				40,120
Recognized actuarial loss			158,371				463,216
Net periodic cost		¥	455,760			¥	768,944

		2003				2004
Change in benefit obligation:
Benefit obligation, beginning of year		¥	1,606,371			¥	2,006,011
Service cost			257,230				265,608
Interest cost			40,159				40,120
Acquisitions (Note 2)			—				30,630
Actuarial loss			158,371				432,586
Benefits paid			(56,120	)			(93,288	)
Benefit obligation, end of year		¥	2,006,011			¥	2,681,667

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		2003				2004
Projected benefit obligation
Discount rate			2.0%				2.0%
Net pension cost
Discount rate			2.0%				2.0%

Estimated Future Benefit Payments
2005		¥	105,753
2006			116,145
2007			172,494
2008			138,000
2009			167,641
2010 to 2014			996,298
		¥	1,696,331

	Dividends

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	Stock-Based Compensation Plans

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		2003				2004
Outstanding at beginning of the year			159,004				191,764
Granted			41,958				29,730
Canceled			(9,198	)			(8,418	)
Outstanding at end of the year			191,764				213,076
Weighted average exercise price		¥	92,000			¥	92,000
Weighted average remaining contractual life			7.4 years				6.6 years
Options exercisable, end of period			—				—
Weighted average fair value of options granted		¥	18,340			¥	24,545

		2003								2004
		Carrying								Carrying
		Amount				Fair Value				Amount				Fair Value
Long-term debt		¥	224,270,195			¥	220,114,532				¥199,474,465				¥199,127,222
Lease obligation			31,130,629				32,328,048				31,804,551				30,125,734
Interest rate swap agreements			694,745				694,745				8,204				8,204

				2003				2004
				(Yen in thousands)
Cash paid during the year for:
	Interest			¥	4,408,426			¥	8,588,285
	Income tax			¥	378,116			¥	323,144
Cash acquisitions of new subsidiaries:
	Fair value of assets acquired			¥	—			¥	1,688,442
	Liabilities assumed				—				1,245,532
		Cash paid, net of cash acquired		¥	—			¥	442,910
Property acquired under capital leases during the year				¥	6,057,250			¥	12,561,285
Conversion of long-term debt into equity				¥	32,260,750			¥	—

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				December 31,
				2004				2003
				(In thousands of
				Argentine pesos)
ASSETS
Current Assets
Cash				A$	2,641			A$	2,224
Accounts receivable, net					19,007				15,116
Related party receivables (Note 6)					15,426				9,087
Programming rights, net					3,210				7,268
Advances to soccer clubs					1,180				2,216
Tax receivables					2,805				5,877
Building held for sale (Notes 6.d and 11.a)					2,940				—
Prepaid expenses and other current assets					3,466				2,375
		Total current assets			50,675				44,163
Related party receivables (Note 6)					2,885				774
Programming rights, net					19,050				9,291
Advances to soccer clubs					2,421				4,660
Deferred income taxes (Note 9)					1,360				2,054
Investments in affiliates accounted for under the equity method (Note 4)					21,132				19,185
Property and equipment, net (Note 5)					15,690				15,914
Other assets					1,214				1,165
Assets associated with discontinued operations (Note 6.d)					—				5,909
TOTAL ASSETS				A$	114,427			A$	103,115
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities				A$	28,532			A$	11,743
Related party liabilities (Note 6)					6,216				15,880
Debt (Note 7)
	Related party debt				8,419				8,306
	Third party debt				8,333				9,024
Taxes payable					6,588				5,331
Deferred income					6,906				16,133
Other liabilities					4,816				4,203
		Total current liabilities			69,810				70,620
Investments in affiliates accounted for under the equity method (Note 4)					—				3,715
Other liabilities					2,076				3,476
Liabilities associated with discontinued operations (Note 6.d)					3,700				3,208
TOTAL LIABILITIES				A$	75,586			A$	81,019
Commitments and contingencies (Note 10)
Minority interest in subsidiaries					(31	)			8
Stockholders’ equity:
	Common stock, A$1 par value. 50,160,000 shares authorized, issued and outstanding				50,160				50,160
	Additional paid-in capital				—				107,812
	Accumulated other comprehensive losses, net of taxes				(6,768	)			(6,717	)
	Legal reserve				—				1,597
	Accumulated deficit				(4,520	)			(130,764	)
		Total stockholders’ equity		A$	38,872			A$	22,088
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				A$	114,427			A$	103,115

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				Year ended December 31,
				2004				2003				2002
				(In thousands of Argentine pesos, except number of
				shares and per share amounts)
Revenue
		Related party (Note 6)		A$	74,941			A$	76,977			A$	69,974
		Third party			28,126				18,553				10,729
Operating costs and expenses
	Operating (other than depreciation)
		Related party (Note 6)			(814	)			(1,676	)			(1,253	)
		Third party			(58,948	)			(44,970	)			(36,490	)
	Selling, general and administrative
		Related party (Note 6)			(70	)			(143	)			(400	)
		Third party			(25,565	)			(23,360	)			(20,003	)
Provision for doubtful accounts and other receivables					(3,798	)			(709	)			(7,293	)
Depreciation					(1,404	)			(1,424	)			(1,719	)
Impairment of goodwill (Note 2)					—				—				(95,663	)
Operating income (loss)					12,468				23,248				(82,118	)
Share of earnings (losses) from equity affiliates (Note 4)					12,901				9,427				(10,589	)
Interest expense					(7,215	)			(10,042	)			(18,321	)
Foreign currency transaction gains (losses)					4,167				5,365				(9,236	)
Other income (expenses), net					(709	)			459				(2,082	)
Income (loss) from continuing operations before income tax and minority interest					21,612				28,457				(122,346	)
Income tax expense (Note 9)					(5,027	)			(7,886	)			(1,698	)
Minority interest in losses (earnings) of subsidiaries					11				(16	)			116
Income (loss) from continuing operations					16,596				20,555				(123,928	)
Discontinued operations, net of tax (including gain on disposal of A$239 during 2004 and impairment of goodwill of A$6,074 during 2002) (Note 6.d)					239				(604	)			(9,658	)
Net income (loss)				A$	16,835			A$	19,951			A$	(133,586	)
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment					(51	)			1,136				(6,222	)
Comprehensive income (loss)				A$	16,784			A$	21,087			A$	(139,808	)
Income (loss) per share from continuing operations					0.33				0.41				(2.47	)
Income (loss) per share from discontinued operations					0.01				(0.01	)			(0.19	)
Net income (loss) per share					0.34				0.40				(2.66	)
Weighted average number of common shares outstanding					50,160,000				50,160,000				50,160,000

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										Accumulated
										other
						Additional				comprehensive												Total
		Common				paid-in				losses,				Legal				Accumulated				stockholders’
		stock				capital				net of taxes				reserve				deficit				equity
		(In thousands of Argentine pesos)
Balance as of January 1, 2002		A$	50,160			A$	107,812			A$	(1,631	)		A$	1,597			A$	(17,129	)		A$	140,809
Foreign currency translation adjustment			—				—				(6,222	)			—				—				(6,222	)
Net loss			—				—				—				—				(133,586	)			(133,586	)
Balance as of December 31, 2002			50,160				107,812				(7,853	)			1,597				(150,715	)			1,001
Foreign currency translation adjustment			—				—				1,136				—				—				1,136
Net income			—				—				—				—				19,951				19,951
Balance as of December 31, 2003			50,160				107,812				(6,717	)			1,597				(130,764	)			22,088
Foreign currency translation adjustment			—				—				(51	)			—				—				(51	)
Absorption of accumulated deficit as required under Argentine law (Note 8)			—				(107,812	)			—				(1,597	)			109,409				—
Net income			—				—				—				—				16,835				16,835
Balance as of December 31, 2004		A$	50,160			A$	—			A$	(6,768	)		A$	—			A$	(4,520	)		A$	38,872

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					Year ended December 31,
					2004				2003				2002
					(In thousands of Argentine pesos)
Cash flows from operating activities:
Income (loss) from continuing operations					A$	16,596			A$	20,555			A$	(123,928	)
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities:
	Provision for doubtful accounts and other receivables					3,798				709				7,293
	Depreciation					1,404				1,424				1,719
	Share of (earnings) losses from equity affiliates					(12,901	)			(9,427	)			10,589
	Impairment of goodwill					—				—				95,663
	Minority interest in losses (earnings) of subsidiaries					(11	)			16				(116	)
	Deferred tax expense					694				4,170				1,698
	Changes in operating assets and liabilities, net of the effect of dispositions:
		Receivables, programming rights and others				(17,098	)			13,847				3,775
		Payable and other current liabilities				2,194				(24,639	)			30,019
		Net cash provided by (used in) operating activities				(5,324	)			6,655				26,712
Cash flows from investing activities:
	Capital expenditures					(1,430	)			(1,162	)			—
	Cash distribution from equity affiliates					7,500				—				2,718
	Proceeds from the sale of property and equipment					250				—				732
		Net cash provided by (used in) investing activities				6,320				(1,162	)			3,450
Cash flows from financing activities:
	Debt proceeds					4,338				1,213				10,537
	Repayment of debt					(4,917	)			(5,063	)			(43,649	)
		Net cash used in financing activities				(579	)			(3,850	)			(33,112	)
		Net cash provided by (used in) discontinued operations				—				(26	)			172
		Net increase (decrease) in cash				417				1,617				(2,778	)
			Cash at beginning of year			2,224				607				3,385
			Cash at end of year		A$	2,641			A$	2,224			A$	607

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1.	Description of business, liquidity and basis of presentation

		Ownership
Shareholders		percentage
ACH Acquisitions Co.			20%
Telefónica de Contenidos S.A. Unipersonal			20%
A y N Argentina LLC			20%
Liberty Argentina, Inc, a subsidiary of Liberty Media International, Inc (“LMI”)			40%

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	Operating subsidiaries as of December 31, 2004
	Avilacab S.A. (“Avilacab”)
	South American Sports S.A. (“SAS”)
	TyC Minor S.A. (“TyC Minor”)
	Significant equity affiliates as of December 31, 2004
	TSC
	TRISA
	T&T

2.	Summary of significant accounting policies

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		Estimated useful
		life (years)
Buildings		50
Furniture and fixtures		10
Technical equipment, vehicles and TV studio		5
Computer hardware		2 to 3

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Entity			Impairment loss
SAS			A$	7,132
Sobre Golf S.A.				420
TSC				50,317
TRISA and Tele Net Image Corp.				37,794
	Total enterprise-level goodwill		A$	95,663

	Income Taxes

	Minority interest

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	Foreign currency translation

	Revenue recognition

	Earnings per share

3.	Supplemental consolidated statements of cash flows disclosures

	a) Income tax, minimum presumed income tax and interests

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	b) Noncash investing and financing activities

Related party receivable		A$	3,700	(1)
Building			2,940	(2)
		A$	6,640

(1)	The accounts receivable will be settled by AISA by effectively assuming the obligation to repay up to A$3,700 of principal and interest of a financial debt payable by TyC, currently in default. See Notes 6.d and 7. If as a result of the renegotiation of the loan in default, TyC pays an amount lower than A$3.7 million, the difference will be settled by AISA through the provision of advertising by América T.V. S.A. (“América TV”), a related company of the purchasers.
(2)	Fair value was determined based on an option held by TyC to return the building to CAE for an amount of US$1 million as per the related sales agreement signed between the parties. See note 6.d.

4.	Investments in affiliates accounted for under the equity method

		December 31, 2004								December 31, 2003
		Percentage				Carrying				Carrying
		ownership				amount				amount
TSC		50%				A$	10,062			A$	7,196
TRISA		50%					9,162				11,983
T&T		50%					1,902				(3,715	)(1)
Others		—					6				6
Total						A$	21,132			A$	15,470

(1)	As the Company’s investment in T&T was negative as of December 31, 2003, it has been classified in Non-current liabilities-Investments in affiliates accounted for under the equity method because the Company is ready to provide financial support, as may be necessary, to allow T&T to continue operating as going concern.

		Year Ended December 31,
		2004				2003				2002
TSC		A$	2,868			A$	3,502			A$	(193	)
TRISA			4,678				8,539				(10,084	)
T&T			5,668				4,055				2,492
Sale of Pro Entertainment S.A.(1)			—				(5,706	)			—
Others			(313	)			(963	)			(2,804	)
Total		A$	12,901			A$	9,427			A$	(10,589	)

(1)	Relates to TyC forgiveness in 2003 of an accounts receivable maintained with Pro Entertainment S.A., as a result of the sale of such company by T&T in fiscal year 2002.

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	TSC

		December 31,
		2004				2003
Financial Position
Current assets(1)		A$	50,111			A$	45,716
Non-current assets			10,487				8,661
Total assets		A$	60,598			A$	54,377
Current portion of long term debt		A$	11,500			A$	5,728
Other current liabilities(2)			24,863				30,905
Non current liabilities			4,111				3,352
Stockholders’ equity			20,124				14,392
Total liabilities and stockholders’ equity		A$	60,598			A$	54,377

(1)	Includes outstanding amounts receivable from Cablevisión S.A. (“Cablevisión”), a related party, of A$2,497 and A$2,497 at December 31, 2004 and 2003, respectively. See Note 6.
(2)	Includes outstanding amounts payable to TyC of A$3,893 and A$5,466 at December 31, 2004 and 2003, respectively. See Note 6.

		Year ended December 31,
		2004				2003				2002
Results of Operations
Revenue(1)		A$	127,023			A$	128,762			A$	117,833
Operating, selling, general and administrative expense(2)			(118,149	)			(113,599	)			(104,423	)
Operating income			8,874				15,163				13,410
Interest expense			(2,459	)			(4,638	)			(14,773	)
Interest income			56				984				680
Foreign exchange gain (loss)			35				(671	)			2,370
Other, net			(123	)			91				(1,701	)
Income tax expense			(647	)			(3,925	)			(372	)
Net income (loss)		A$	5,736			A$	7,004			A$	(386	)

(1)	Includes revenue from Cablevisión, a related party, for an amount of A$39,172, A$39,899 and A$29,052 for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 6.
(2)	Includes services provided by TyC for an amount of A$10,468, A$10,205 and A$8,456 for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 6.

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	TRISA

		December 31,
		2004				2003
Financial Position
Current assets(1)		A$	68,196			A$	80,357
Property and equipment, net			11,813				9,812
Investments			853				794
Other non-current assets			28,621				17,827
Total assets		A$	109,483			A$	108,790
Current portion of long term debt		A$	4,348			A$	4,272
Other current liabilities(2)			43,721				43,384
Non-current debt			25,986				29,808
Other non-current liabilities			17,105				7,359
Stockholders’ equity			18,323				23,967
Total liabilities and stockholders’ equity		A$	109,483			A$	108,790

(1)	Includes outstanding amounts receivable from Cablevisión, a related party, of A$3,136 and A$3,036 at December 31, 2004 and 2003, respectively. See Note 6.
(2)	Includes outstanding amounts payable to TyC of A$3,202 and A$2,173 at December 31, 2004 and 2003, respectively. See Note 6.

		Year ended December 31,
		2004				2003				2002
Results of Operations
Revenue(1)		A$	125,011			A$	109,598			A$	98,041
Operating, selling, general and administrative expenses(2)			(115,732	)			(97,707	)			(81,911	)
Operating income			9,279				11,891				16,130
Interest expense			(5,490	)			(3,451	)			(2,291	)
Interest income			2,367				4,487				4,379
Foreign exchange gain (loss)			(636	)			5,379				(31,575	)
Share of earnings (losses) from equity affiliates			61				(356	)			(1,462	)
Other, net			926				509				4,234
Income tax benefit (expense)			2,849				(1,381	)			(9,583	)
Net income (loss)		A$	9,356			A$	17,078			A$	(20,168	)

(1)	Includes revenues from Cablevisión, a related party, for an amount of A$32,938, A$34,126 and A$25,902 and from TyC for an amount of A$532, A$184 and A$149 for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 6.
(2)	Includes services provided by TyC for an amount of A$14,272, A$10,119 and A$5,713 for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 6.

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	T&T

		December 31,
		2004				2003
Financial Position
Current assets(1)		A$	10,441			A$	11,987
Non-current assets			60				1,411
Total assets		A$	10,501			A$	13,398
Current portion of long term debt		A$	—				288
Other current liabilities(2)			6,697				19,806
Non-current liabilities			—				735
Stockholders’ equity			3,804				(7,431	)
Total liabilities and stockholders’ equity		A$	10,501			A$	13,398

(1)	Includes outstanding amounts receivable from Fox Sports Latin America S.A. (“Fox Sports”), a related party, of A$0 and A$374 at December 31, 2004 and 2003, respectively. See Note 6.
(2)	Includes outstanding amounts payable to Fox Sports, a related party, of A$3,675 and A$5,438 at December 31, 2004 and 2003, respectively. See Note 6.

		Year ended December 31,
		2004				2003				2002
Results of Operations
Revenue(1)		A$	117,713			A$	110,962			A$	127,827
Operating, selling, general and administrative expenses(2)			(106,351	)			(103,556	)			(126,113	)
Operating income		A$	11,362			A$	7,406			A$	1,714
Share of earnings from equity affiliates			—				—				3,312
Other, net			(26	)			705				(42	)
Net income		A$	11,336			A$	8,111			A$	4,984

(1)	Includes revenues from Fox Sports, a related party, for an amount of A$93,933, A$85,689 and A$115,254 for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 6.
(2)	Includes services provided by TyC for an amount of A$9,239, A$2,938 and A$3,227, for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 6.

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			December 31,
			2004				2003
Buildings			A$	14,544			A$	14,794
Furniture and fixtures				7,267				5,311
Technical equipment, vehicles and TV studio				7,339				6,109
Computer hardware				1,367				1,429
	Total property and equipment			30,517				27,643
Less: Accumulated depreciation				(14,827	)			(11,729	)
	Net property and equipment		A$	15,690			A$	15,914

	(a) Company’s affiliated entities:

	(b) Balances and transactions with related parties

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		December 31,
		2004				2003
Receivables — Current:
América TV		A$	1,458			A$	1,091
TRISA			3,202				2,173
TSC			3,893				5,466
FPAS			5,047				—
AISA			1,550	(1)			357
Others			276				—
		A$	15,426			A$	9,087
Receivables — Non Current:
América TV		A$	735			A$	774
AISA			2,150	(1)			—
		A$	2,885			A$	774
Payables — Current:
América TV		A$	1,297			A$	312
FPAS			4,207				14,921
Others			712				647
		A$	6,216			A$	15,880

(1)	Accounts receivable related to the sale of La Red — See item (d) below in this note.

				Year ended December 31,
Revenue		Transaction description		2004				2003				2002
TRISA		Advertising, Production, Rights and Others		A$	14,272				10,119				5,713
TSC		Production and Rights			10,468				10,205				8,456
T&T		Production and Rights			9,239				2,938				3,227
América TV		Production			1				855				343
FPAS		Advertising, Production, Rights and Others			40,918				52,679				51,783
Others					43				181				452
				A$	74,941			A$	76,977			A$	69,974

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				Year ended December 31,
Services received		Transaction Description		2004				2003				2002
Operating (other than depreciation) expenses
América TV				A$	(282)				(1,477)				(849)
TRISA		Production and rights			(532)				(184)				(149)
Pramer S.C.A.		Production			—				(15)				(255)
		Total operating (other than depreciation) expenses		A$	(814)				(1,676)				(1,253)
Selling, general and administrative expenses
CAE		Other		A$	(39)				(100)				(296)
Others		Rights and others			(31)				(43)				(104)
		Total selling, general and administrative expenses		A$	(70)			A$	(143)			A$	(400)

(c)	Agreement with FPAS

(d)	Discontinued operations — Sale of La Red

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		December 31, 2003
Current assets		A$	4,357
Non-current assets			1,552
Total assets		A$	5,909
Current liabilities		A$	2,790
Non-current liabilities			418
Total liabilities		A$	3,208
Stockholders’ equity		A$	2,701

		Year ended
		December 31,
		2003				2002
Revenue		A$	5,672			A$	3,820
Pre-tax loss (including impairment of goodwill of A$6,074 in 2002)		A$	(253	)		A$	(9,658	)
Loss from discontinued operations, net of tax		A$	(604	)		A$	(9,658	)

7.	Debt

			2004				2003
Bank loans			A$	8,333			A$	9,024
Related Party				8,419				8,306
	Total		A$	16,752			A$	17,330

Past due			A$	4,927
2005			A$	3,406
	Total debt		A$	8,333	(1)

(1)	Includes A$2,635 for which one of the purchasers of La Red has effectively assumed the obligation to repay up to A$3,700 of principal and interest. See Note 6.

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8.	Stockholders’ equity

9.	Income tax

			Year ended December 31,
			2004				2003				2002
Current tax expense			A$	(4,231	)		A$	(3,611	)		A$	—
Deferred tax expense				(694	)			(4,170	)			(1,698	)
	Sub-total			(4,925	)			(7,781	)			(1,698	)
Minimum presumed income tax				(102	)			(105	)			—
Income tax expense			A$	(5,027	)		A$	(7,886	)		A$	(1,698	)

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			December 31,
			2004				2003
Allowance for doubtful accounts			A$	2,506			A$	1,467
Directors’ fees				—				660
Accumulated tax losses				499				567
Accumulated tax losses from the sale of controlled subsidiaries				5,754				—
Items accrued not yet deducted				597				884
Deferred income				—				1,202
Programming rights				(2,133	)			(1,623	)
Unpaid interest on foreign loans from related parties				1,290				—
Others				48				91
	Sub-total			8,561				3,248
Less: Valuation allowance on deferred tax asset				(7,201	)			(1,194	)
Net deferred tax asset at tax rate (35%)			A$	1,360			A$	2,054

			2004				2003				2002
Income (loss) before taxes and discontinued operations			A$	21,623			A$	28,441			A$	(122,230	)
Prevailing tax rate				35	%			35	%			35	%
Expected tax benefit (expense) from continuing operations				(7,568	)			(9,954	)			42,781
	Impairment of intangible assets			—				—				(33,482	)
	Increase in accumulated tax losses from the sale of controlled subsidiaries			5,754				—				—
	Imputed interest			—				(246	)			(1,075	)
	Directors’ fees			—				—				(1,268	)
	Share of earnings (losses) from equity affiliates			4,515				3,299				(3,706	)
	Non-recoverable receivables			(236	)			(363	)			(1,824	)
	Non-deductible expenses			(1,485	)			(467	)			(2,747	)
	Change in valuation allowance on deferred tax assets			(6,007	)			(155	)			(377	)
	Income tax expense from continuing operations		A$	(5,027	)		A$	(7,886	)		A$	(1,698	)

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10.	Commitments and contingencies

	(a) Long-term Rights Contracts

2005		A$	8,625
2006		A$	16,755
2007		A$	5,589
2008		A$	1,589
2009		A$	1,589
Thereafter		A$	723

	(b) Litigation

11.	Subsequent Events

	(a) Sale of building held for sale

	(b) Agreement with FPAS

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		2004				2005
Administrative services			658				658
Production of content			4,344				5,544
Advertising commission (range)			From 17.5% to 20%				From 17.5% to 20%

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	KPMG LLP

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	Arthur Andersen LLP

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					December 31,
					2003				2002
					(In thousands, except par
					value and number
					of shares)
ASSETS
Current Assets
	Cash and cash equivalents				$	310,361			$	410,185
	Restricted cash					25,052				48,219
	Marketable equity securities and other investments					208,459				45,854
	Subscriber receivables, net of allowance for doubtful accounts of $51,109 and $71,485, respectively					140,075				136,796
	Related party receivables					1,730				15,402
	Other receivables					63,427				50,759
	Deferred financing costs, net					2,730				62,996
	Other current assets, net					76,812				95,340
			Total Current Assets			828,646				865,551
Long-Term Assets
	Property, plant and equipment, net					3,342,743				3,640,211
	Goodwill					2,519,831				1,250,333
	Intangible assets, net					252,236				13,776
	Other assets, net					156,215				161,723
			Total Assets		$	7,099,671			$	5,931,594
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
	Not subject to compromise:
		Accounts payable			$	224,092			$	190,710
		Accounts payable, related party				1,448				1,704
		Accrued liabilities				405,546				328,927
		Subscriber prepayments and deposits				141,108				127,553
		Short-term debt				—				205,145
		Notes payable, related party				102,728				102,728
		Current portion of long-term debt				310,804				3,366,235
		Other current liabilities				82,149				16,448
			Total Current Liabilities not Subject to Compromise			1,267,875				4,339,450
	Subject to compromise:
		Accounts payable and accrued liabilities				14,445				271,250
		Short-term debt				5,099				—
		Current portion of long-term debt				317,372				2,812,988
			Total Current Liabilities Subject to Compromise			336,916				3,084,238
Long-Term Liabilities
	Not subject to compromise:
		Long-term debt				3,615,902				472,671
		Net negative investment in deconsolidated subsidiaries				—				644,471
		Deferred taxes				124,232				107,596
		Other long-term liabilities				259,493				165,896
			Total Long-Term Liabilities not Subject to Compromise			3,999,627				1,390,634
Guarantees, commitments and contingencies (Note 13)
Minority interests in subsidiaries						22,761				1,402,146
Stockholders’ Equity (Deficit)
	Preferred stock, $0.01 par value, 10,000,000 shares authorized, nil shares issued and outstanding					—				—
	Class A common stock, $0.01 par value, 1,000,000,000 shares authorized, 287,350,970 and 110,392,692 shares issued, respectively					2,873				1,104
	Class B common stock, $0.01 par value, 1,000,000,000 shares authorized, 8,870,332 shares issued					89				89
	Class C common stock, $0.01 par value, 400,000,000 shares authorized, 303,123,542 shares issued and outstanding					3,031				3,031
	Additional paid-in capital					5,852,896				3,683,644
	Deferred compensation					—				(28,473	)
	Treasury stock, at cost					(70,495	)			(34,162	)
	Accumulated deficit					(3,372,737	)			(6,797,762	)
	Accumulated other comprehensive income (loss)					(943,165	)			(1,112,345	)
			Total Stockholders’ Equity (Deficit)			1,472,492				(4,284,874	)
			Total Liabilities and Stockholders’ Equity (Deficit)		$	7,099,671			$	5,931,594

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					Year Ended December 31,
					2003				2002				2001
					(In thousands, except per share data)
Statements of Operations
	Revenue				$	1,891,530			$	1,515,021			$	1,561,894
	Operating expense					(768,838	)			(772,398	)			(1,062,394	)
	Selling, general and administrative expense					(493,810	)			(446,249	)			(690,743	)
	Depreciation and amortization — Operating expense					(808,663	)			(730,001	)			(1,147,176	)
	Impairment of long-lived assets — Operating expense					(402,239	)			(436,153	)			(1,320,942	)
	Restructuring charges and other — Operating expense					(35,970	)			(1,274	)			(204,127	)
	Stock-based compensation — Selling, general and administrative expense					(38,024	)			(28,228	)			(8,818	)
			Operating income (loss)			(656,014	)			(899,282	)			(2,872,306	)
	Interest income, including related party income of $985, $2,722 and $35,336, respectively					13,054				38,315				104,696
	Interest expense, including related party expense of $8,218, $24,805 and $58,834, respectively					(327,132	)			(680,101	)			(1,070,830	)
	Foreign currency exchange gain (loss), net					121,612				739,794				(148,192	)
	Gain on extinguishment of debt					2,183,997				2,208,782				3,447
	Gain (loss) on sale of investments in affiliates, net					279,442				117,262				(416,803	)
	Provision for loss on investments					—				(27,083	)			(342,419	)
	Other (expense) income, net					(14,884	)			(93,749	)			76,907
			Income (loss) before income taxes and other items			1,600,075				1,403,938				(4,665,500	)
	Reorganization expense, net					(32,009	)			(75,243	)			—
	Income tax (expense) benefit, net					(50,344	)			(201,182	)			40,661
	Minority interests in subsidiaries, net					183,182				(67,103	)			496,515
	Share in results of affiliates, net					294,464				(72,142	)			(386,441	)
			Income (loss) before cumulative effect of change in accounting principle			1,995,368				988,268				(4,514,765	)
	Cumulative effect of change in accounting principle					—				(1,344,722	)			20,056
			Net income (loss)		$	1,995,368			$	(356,454	)		$	(4,494,709	)
	Earnings per share (Note 20):
		Basic net income (loss) per share before cumulative effect of change in accounting principle			$	7.41			$	2.29			$	(41.47	)
		Cumulative effect of change in accounting principle				—				(3.13	)			0.18
			Basic net income (loss) per share		$	7.41			$	(0.84	)		$	(41.29	)
		Diluted net income (loss) per share before cumulative effect of change in accounting principle			$	7.41			$	2.29			$	(41.47	)
		Cumulative effect of change in accounting principle				—				(3.12	)			0.18
			Diluted net income (loss) per share		$	7.41			$	(0.83	)		$	(41.29	)
Statements of Comprehensive Income
	Net income (loss)				$	1,995,368			$	(356,454	)		$	(4,494,709	)
	Other comprehensive income, net of tax:
		Foreign currency translation adjustments				61,440				(864,104	)			11,157
		Change in fair value of derivative assets				10,616				13,443				(24,059	)
		Change in unrealized gain on available-for-sale securities				97,318				4,029				37,526
		Other				(194	)			(77	)			271
			Comprehensive income (loss)		$	2,164,548			$	(1,203,163	)		$	(4,469,814	)

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		Class A								Class B								Class C																Class A								Class B												Accumulated
		Common Stock								Common Stock								Common Stock								Additional								Treasury Stock								Treasury Stock												Other
																										Paid-In				Deferred																				Accumulated				Comprehensive
		Shares				Amount				Shares				Amount				Shares				Amount				Capital				Compensation				Shares				Amount				Shares				Amount				Deficit				Income (Loss)				Total
		(In thousands, except number of shares)
December 31, 2002			110,392,692			$	1,104				8,870,332			$89					303,123,542			$	3,031			$	3,683,644			$	(28,473	)			7,404,240			$	(34,162	)			—			$	—			$	(6,797,762	)		$	(1,112,345	)		$	(4,284,874	)
Issuance of Class A common stock for subsidiary preference shares			2,155,905				21				—			—					—				—				6,082				—				—				—				—				—				1,423,102				—				1,429,205
Issuance of Class A common stock in connection with stock option plans			311,454				3				—			—					—				—				1,351				—				—				—				—				—				—				—				1,354
Issuance of Class A common stock in connection with 401(k) plan			58,272				1				—			—					—				—				258				—				—				—				—				—				—				—				259
Issuance of common stock by UGC Europe for debt and other liabilities			—				—				—			—					—				—				966,362				—				—				—				—				—				—				—				966,362
Equity transactions of subsidiaries			—				—				—			—					—				—				(129,904	)			1,896				—				—				—				—				6,555				—				(121,453	)
Amortization of deferred compensation			—				—				—			—					—				—				—				26,577				—				—				—				—				—				—				26,577
Receipt of common stock in satisfaction of executive loans			—				—				—			—					—				—				—				—				188,792				—				672,316				—				—				—				—
Issuance of Class A common stock in connection with the UGC Europe exchange offer			174,432,647				1,744				—			—					—				—				1,325,103				—				4,780,611				(36,333	)			—				—				—				—				1,290,514
Net income			—				—				—			—					—				—				—				—				—				—				—				—				1,995,368				—				1,995,368
Foreign currency translation adjustments			—				—				—			—					—				—				—				—				—				—				—				—				—				61,440				61,440
Change in fair value of derivative assets			—				—				—			—					—				—				—				—				—				—				—				—				—				10,616				10,616
Unrealized gain (loss) on available-for-sale securities			—				—				—			—					—				—				—				—				—				—				—				—				—				97,318				97,318
Amortization of cumulative effect of change in accounting principle			—				—				—			—					—				—				—				—				—				—				—				—				—				(194	)			(194	)
December 31, 2003			287,350,970			$	2,873				8,870,332			$89					303,123,542			$	3,031			$	5,852,896			$	—				12,373,643			$	(70,495	)			672,316			$	—			$	(3,372,737	)		$	(943,165	)		$	1,472,492

			December 31,
			2003				2002
			(In thousands)
Foreign currency translation adjustments			$	(1,057,074	)		$	(1,118,514	)
Fair value of derivative assets				—				(10,616	)
Other				113,909				16,785
	Total		$	(943,165	)		$	(1,112,345	)

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		Series C								Series D								Class A								Class B								Class C																												Other
		Preferred Stock								Preferred Stock								Common Stock								Common Stock								Common Stock								Additional								Treasury Stock												Comprehensive
																																										Paid-In				Deferred												Accumulated				Income
		Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Capital				Compensation				Shares				Amount				Deficit				(Loss)				Total
		(In thousands, except number of shares)
Balances, December 31, 2001			425,000			$	425,000				287,500			$	287,500				98,042,205			$	981				19,027,134			$	190				—			$	—			$	1,537,944			$	(74,185	)			5,604,948			$	(29,984	)		$	(6,437,290	)		$	(265,636	)		$	(4,555,480	)
Accrual of dividends on Series B, C and D convertible preferred stock			—				—				—				—				—				—				—				—				—				—				(156	)			—				—				—				(4,018	)			—				(4,174	)
Merger/reorganization transaction			(425,000	)			(425,000	)			(287,500	)			(287,500	)			11,628,674				116				(10,156,802	)			(101	)			21,835,384				218				770,448				—				(35,708	)			923				—				—				59,104
Issuance of Class C common stock for financial assets			—				—				—				—				—				—				—				—				281,288,158				2,813				1,396,469				—				—				—				—				—				1,399,282
Issuance of Class A common stock in exchange for remaining interest in Old UGC			—				—				—				—				600,000				6				—				—				—				—				(6	)			—				—				—				—				—				—
Issuance of Class A common stock in connection with 401(k) plan			—				—				—				—				121,813				1				—				—				—				—				340				—				—				—				—				—				341
Equity transactions of subsidiaries and other			—				—				—				—				—				—				—				—				—				—				(21,395	)			12,794				—				—				—				—				(8,601	)
Amortization of deferred compensation			—				—				—				—				—				—				—				—				—				—				—				32,918				—				—				—				—				32,918
Purchase of treasury shares			—				—				—				—				—				—				—				—				—				—				—				—				1,835,000				(5,101	)			—				—				(5,101	)
Net income			—				—				—				—				—				—				—				—				—				—				—				—				—				—				(356,454	)			—				(356,454	)
Foreign currency translation adjustments			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				(864,104	)			(864,104	)
Change in fair value of derivative assets			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				13,443				13,443
Change in unrealized gain on available-for-sale securities			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				4,029				4,029
Amortization of cumulative effect of change in accounting principle			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				(77	)			(77	)
Balances, December 31, 2002			—			$	—				—			$	—				110,392,692			$	1,104				8,870,332			$	89				303,123,542			$	3,031			$	3,683,644			$	(28,473	)			7,404,240			$	(34,162	)		$	(6,797,762	)		$	(1,112,345	)		$	(4,284,874	)

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		Series C								Series D								Class A								Class B																												Other
		Preferred Stock								Preferred Stock								Common Stock								Common Stock								Additional								Treasury Stock												Comprehensive
																																		Paid-In				Deferred												Accumulated				Income
		Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Capital				Compensation				Shares				Amount				Deficit				(Loss)				Total
		(In thousands, except number of shares)
Balances, December 31, 2000			425,000			$	425,000				287,500			$	287,500				83,820,633			$	838				19,221,940			$	192			$	1,531,593			$	(117,136	)			5,604,948			$	(29,984	)		$	(1,892,706	)		$	(290,531	)		$	(85,234	)
Exchange of Class B common stock for Class A common stock			—				—				—				—				194,806				2				(194,806	)			(2	)			—				—				—				—				—				—				—
Issuance of Class A common stock in connection with stock option plans and 401(k) plan			—				—				—				—				76,504				1				—				—				386				—				—				—				—				—				387
Issuance of Class A common stock for cash			—				—				—				—				11,991,018				120				—				—				19,905				—				—				—				—				—				20,025
Accrual of dividends on Series B, C and D convertible preferred stock			—				14,875				—				10,063				—				—				—				—				(1,873	)			—				—				—				(49,875	)			—				(26,810	)
Issuance of Class A common stock in lieu of cash dividends on Series C and D convertible preferred stock			—				(14,875	)			—				(10,063	)			1,959,244				20				—				—				24,918				—				—				—				—				—				—
Equity transactions of subsidiaries and others			—				—				—				—				—				—				—				—				(29,122	)			22,159				—				—				—				—				(6,963	)
Amortization of deferred compensation			—				—				—				—				—				—				—				—				(1,292	)			20,792				—				—				—				—				19,500
Loans to related parties, collateralized with common shares and options			—				—				—				—				—				—				—				—				(6,571	)			—				—				—				—				—				(6,571	)
Net loss			—				—				—				—				—				—				—				—				—				—				—				—				(4,494,709	)			—				(4,494,709	)
Foreign currency translation adjustments			—				—				—				—				—				—				—				—				—				—				—				—				—				11,157				11,157
Change in fair value of derivative assets			—				—				—				—				—				—				—				—				—				—				—				—				—				(24,059	)			(24,059	)
Unrealized gain (loss) on available-for-sale securities			—				—				—				—				—				—				—				—				—				—				—				—				—				37,526				37,526
Cumulative effect of change in accounting principle			—				—				—				—				—				—				—				—				—				—				—				—				—				523				523
Amortization of cumulative effect of change in accounting principle			—				—				—				—				—				—				—				—				—				—				—				—				—				(252	)			(252	)
Balances, December 31, 2001			425,000			$	425,000				287,500			$	287,500				98,042,205			$	981				19,027,134			$	190			$	1,537,944			$	(74,185	)			5,604,948			$	(29,984	)		$	(6,437,290	)		$	(265,636	)		$	(4,555,480	)

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				Year Ended December 31,
				2003				2002				2001
				(In thousands)
Cash Flows from Operating Activities
Net income (loss)				$	1,995,368			$	(356,454	)		$	(4,494,709	)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
	Stock-based compensation				38,024				28,228				8,818
	Depreciation and amortization				808,663				730,001				1,147,176
	Impairment of long-lived assets				402,239				437,427				1,525,069
	Accretion of interest on senior notes and amortization of deferred financing costs				50,733				234,247				492,387
	Unrealized foreign exchange (gains) losses, net				(84,258	)			(745,169	)			125,722
	Loss on derivative securities				12,508				115,458				—
	Gain on extinguishment of debt				(2,183,997	)			(2,208,782	)			3,447
	(Gain) loss on sale of investments in affiliates and other assets, net				(279,442	)			(117,262	)			416,803
	Provision for loss on investments				—				27,083				342,419
	Reorganization expenses, net				32,009				75,243				—
	Deferred tax provision				(18,161	)			104,068				(43,167	)
	Minority interests in subsidiaries, net				(183,182	)			67,103				(496,515	)
	Share in results of affiliates, net				(294,464	)			72,142				386,441
	Cumulative effect of change in accounting principle				—				1,344,722				(20,056	)
Change in assets and liabilities:
	Change in receivables, net				49,238				42,175				68,137
	Change in other assets				(8,368	)			4,628				2,489
	Change in accounts payable, accrued liabilities and other				55,182				(148,466	)			(135,604	)
		Net cash flows from operating activities			392,092				(293,608	)			(671,143	)
Cash Flows from Investing Activities
Purchase of short-term liquid investments					(1,000	)			(117,221	)			(1,691,751	)
Proceeds from sale of short-term liquid investments					45,561				152,405				1,907,171
Restricted cash released (deposited), net					24,825				40,357				(74,996	)
Investments in affiliates and other investments					(20,931	)			(2,590	)			(60,654	)
Proceeds from sale of investments in affiliated companies					45,447				—				120,416
New acquisitions, net of cash acquired					(2,150	)			(22,617	)			(39,950	)
Capital expenditures					(333,124	)			(335,192	)			(996,411	)
Purchase of interest rate caps					(9,750	)			—				—
Settlement of interest rate caps					(58,038	)			—				—
Other					7,806				27,595				(45,192	)
		Net cash flows from investing activities			(301,354	)			(257,263	)			(881,367	)
Cash Flows from Financing Activities
Issuance of common stock					1,354				200,006				24,054
Proceeds from notes payable to shareholder					—				102,728				—
Proceeds from short-term and long-term borrowings					23,161				42,742				1,673,981
Retirement of existing senior notes					—				(231,630	)			(261,309	)
Financing costs					(2,233	)			(18,293	)			(17,771	)
Repayments of short-term and long-term borrowings					(233,506	)			(90,331	)			(766,950	)
Other					—				—				(6,571	)
		Net cash flows from financing activities			(211,224	)			5,222				645,434
Effects of Exchange Rates on Cash					20,662				35,694				(49,612	)
Decrease in Cash and Cash Equivalents					(99,824	)			(509,955	)			(956,688	)
Cash and Cash Equivalents, Beginning of Year					410,185				920,140				1,876,828
Cash and Cash Equivalents, End of Year				$	310,361			$	410,185			$	920,140
Supplemental Cash Flow Disclosure
	Cash paid for reorganization expenses			$	27,084			$	33,488			$	—
	Cash paid for interest			$	185,591			$	304,274			$	519,221
	Cash paid for income taxes			$	1,947			$	14,260			$	—
Non-Cash Investing and Financing Activities
	Issuance of subsidiary common stock for financial assets			$	966,362			$	—			$	—
	Issuance of common stock for acquisitions			$	1,326,847			$	1,206,441			$	—

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1.	Organization and Nature of Operations

2.	Summary of Significant Accounting Policies

	Use of Estimates

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Customer premise equipment		4-10 years
Commercial		3-20 years
Scaleable infrastructure		3-20 years
Line extensions		5-20 years
Upgrade/rebuild		3-20 years
Support capital		1-33 years

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IV-113

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IV-114

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			Year Ended December 31,
			2003				2002				2001
			(In thousands, except per share amounts)
Net income (loss), as reported			$	1,995,368			$	(356,454	)		$	(4,494,709	)
	Add: Stock-based employee compensation expense included in reported net income, net of related tax effects(1)			29,242				28,228				8,818
	Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects			(57,101	)			(102,837	)			(98,638	)
Pro forma net income (loss)			$	1,967,509			$	(431,063	)		$	(4,584,529	)
Basic net income (loss) per common share:
	As reported		$	7.41			$	(0.84	)		$	(41.29	)
	Pro forma		$	7.35			$	(1.01	)		$	(42.10	)
Diluted net income (loss) per common share:
	As reported		$	7.41			$	(0.83	)		$	(41.29	)
	Pro forma		$	7.35			$	(1.01	)		$	(42.10	)

(1)	Not including SARs. Compensation expense for SARs is the same under APB 25 and SFAS 123.

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	2003

	Acquisition of UPC Preference Shares

IV-116

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	United Pan-Europe Communications N.V. Reorganization

	UGC Europe Exchange Offer and Merger

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Property, plant and equipment			$	717
Goodwill				1,005,148
Customer relationships and tradename				243,212
Other assets				10,556
Other liabilities				55,271
	Total consideration		$	1,314,904

•	Our ability to create a simpler, unified capital structure in which equity investors would participate in our equity at a single level, which would lead to greater liquidity for investors, due to the larger combined public float;
•	Our ability to facilitate the investment and transfer of funds between us and UGC Europe and its subsidiaries, thereby creating more efficient uses of our consolidated financial resources; and
•	Our assessment that the elimination of public stockholders at the UGC Europe level would create opportunities for cost reductions and organizational efficiencies through, among other things, the combination of UGC Europe’s and our separate corporate functions into a better integrated, unitary corporate organization.

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				Year Ended December 31,
				2003				2002
				(In thousands, except share
				and per share amounts)
Revenue				$	1,891,530			$	1,515,021
Income before cumulative effect of change in accounting principle				$	1,805,225			$	1,014,908
Net income (loss)				$	1,805,225			$	(329,814	)
Earnings per share:
	Basic net income (loss) per share before cumulative effect of change in accounting principle			$	4.99			$	1.63
	Cumulative effect of change in accounting principle				—				(2.17	)
		Basic net income (loss) per share		$	4.99			$	(0.54	)
Diluted net income (loss) per share before cumulative effect of change in accounting principle				$	4.98			$	1.63
Cumulative effect of change in accounting principle					—				(2.17	)
		Diluted net income (loss) per share		$	4.98			$	(0.54	)

	2002

	Merger Transaction

•	Liberty contributed approximately 9.9 million shares of Old UGC Class B common stock and approximately 12.0 million shares of Old UGC Class A common stock to us and in exchange for these contributions, we issued Liberty approximately 21.8 million shares of our Class C common stock;
•	Certain long-term stockholders of Old UGC (the “Founders”) transferred their shares of Old UGC Class B common stock to limited liability companies, which limited liability companies then merged into us. As a result of such mergers, the Founders received approximately 8.9 million shares of our Class B common stock, which number of shares equals the number of shares of Old UGC Class B common stock transferred by them to the limited liability companies; and
•	Four of the Founders (the “Principal Founders”) contributed $3.0 million to Old UGC in exchange for securities that, at the effective time of the merger, converted into securities representing a 0.5% interest in Old UGC and entitled them to elect one-half of Old UGC’s directors.

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•	Old UGC became our 99.5%-owned subsidiary, and the Principal Founders held the remaining 0.5% interest in Old UGC;
•	Each share of Old UGC’s Class A and Class B common stock outstanding immediately prior to the merger was converted into one share of our Class A common stock;
•	The shares of Old UGC’s Series B, C and D preferred stock outstanding immediately prior to the merger were converted into an aggregate of approximately 23.3 million shares of our Class A common stock, which amount is equal to the number of shares of Old UGC Class A common stock the holders of Old UGC’s preferred stock would have received had they converted their preferred stock immediately prior to the merger;
•	Liberty had the right to elect four of our 12 directors;
•	The Founders had the effective voting power to elect eight of our 12 directors; and
•	We had the right to elect half of Old UGC’s directors and the Principal Founders had the right to elect the other half of Old UGC’s directors (see discussion below regarding a transaction that occurred on May 14, 2002, pursuant to which Old UGC became our wholly-owned subsidiary and we became entitled to elect the entire board of directors of Old UGC).

•	Liberty contributed to us the UPC Exchangeable Loan which had an accreted value of $891.7 million as of January 30, 2002 and, as a result, UPC owed the amount payable under such loan to us rather than to Liberty;
•	Liberty contributed $200.0 million in cash to us;
•	Liberty contributed to us certain UPC bonds (the “United UPC Bonds”) and, as a result, UPC owed the amounts represented by the United UPC Bonds to us rather than to Liberty; and
•	In exchange for the contribution of these assets to us, an aggregate of approximately 281.3 million shares of our Class C common stock was issued to Liberty.

•	Our assumption of approximately $304.6 million of indebtedness owed by Liberty to Old UGC; and
•	Cash in the amount of approximately $143.9 million.

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			Fair Value
			at Acquisition				Book Value				Gain/(Loss)
			(In thousands)
Old UGC Senior Notes			$	540,149			$	1,210,974			$	670,825
United UPC Bonds				312,831				1,451,519				1,138,688
UPC Exchangeable Loan				891,671				891,671				—
Write-off of deferred financing costs				—				(52,224	)			(52,224	)
	Total gain on extinguishment of debt		$	1,744,651			$	3,501,940			$	1,757,289

	Transfer of German Shares

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Working capital			$	(74,809	)
Property, plant and equipment				74,169
Goodwill and other intangible assets				69,912
Long-term liabilities				(84,288	)
Minority interest				(142,158	)
Gain on reversal of net negative investment				147,925
	Net cash deconsolidated		$	(9,249	)

	Other

	2001

4.	Marketable Equity Securities and Other Investments

			December 31, 2003								December 31, 2002
			Fair				Unrealized				Fair				Unrealized
			Value				Gain				Value				Gain
			(In thousands)								(In thousands)
SBS common stock			$	195,600			$	105,790			$	—			$	—
Other equity securities				10,725				6,098				—				—
Corporate bonds and other				2,134				856				45,854				14
	Total		$	208,459			$	112,744			$	45,854			$	14

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5.	Property, Plant and Equipment

																							Foreign
																			UGC Europe				Currency
			December 31,																Exchange				Translation				December 31,
			2002				Additions				Disposals				Impairments(1)				Offer(2)				Adjustments				2003
			(In thousands)
Customer premises equipment			$	1,003,950			$	95,834			$	(2,459	)		$	(89,971	)		$	20,936			$	201,941			$	1,230,231
Commercial				5,670				—				—				—				—				235				5,905
Scaleable infrastructure				637,171				44,177				—				(23,806	)			(8,973	)			138,000				786,569
Line extensions				2,055,614				66,216				—				(302,280	)			(3,806	)			373,306				2,189,050
Upgrade/rebuild				846,406				30,287				—				(4,854	)			(5,653	)			151,127				1,017,313
Support capital				696,362				70,972				(473	)			(30,874	)			4,824				127,250				868,061
Priority Telecom(3)				306,233				17,074				—				(415	)			(5,357	)			43,521				361,056
UPC Media				83,598				5,833				—				(6,438	)			(1,254	)			16,447				98,186
	Total			5,635,004				330,393				(2,932	)			(458,638	)			717				1,051,827				6,556,371
Accumulated depreciation				(1,994,793	)			(804,937	)			2,123				64,788				—				(480,809	)			(3,213,628	)
	Net property, plant and equipment		$	3,640,211			$	(474,544	)		$	(809	)		$	(393,850	)		$	717			$	571,018			$	3,342,743

(1)	See Note 17.
(2)	See Note 3.
(3)	Consists primarily of network infrastructure and equipment.

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6.	Goodwill

																Foreign
												UGC Europe				Currency
				December 31,								Exchange				Translation				December 31,
				2002				Acquisitions				Offer(1)				Adjustments				2003
				(In thousands)
Europe:
	Austria			$	140,349			$	383			$	167,209			$	31,640			$	339,581
	Belgium				14,284				—				24,467				1,747				40,498
	Czech Republic				—				—				67,138				1,240				68,378
	Hungary				73,878				229				142,809				11,723				228,639
	The Netherlands				705,833				—				256,415				149,310				1,111,558
	Norway				9,017				—				28,553				930				38,500
	Poland				—				—				36,368				672				37,040
	Romania				20,138				—				2,698				324				23,160
	Slovak Republic				3,353				—				22,644				1,133				27,130
	Sweden				142,771				—				30,823				31,270				204,864
	chellomedia				—				—				122,304				2,258				124,562
	UGC Europe, Inc.				—				—				103,720				1,915				105,635
		Total			1,109,623				612				1,005,148				234,162				2,349,545
Latin America:
	Chile				140,710				—				—				29,576				170,286
		Total		$	1,250,333			$	612			$	1,005,148			$	263,738			$	2,519,831

(1)	See Note 3.

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				Year Ended
				December 31,
				2001
Net loss as reported				$	(4,494,709	)
	Goodwill amortization
		UPC and subsidiaries			379,449
		VTR			11,310
		Austar United and subsidiaries			12,765
		Other			2,881
	Amortization of excess basis on equity investments
		UPC affiliates			35,940
		Austar United affiliates			2,823
		Other			2,027
Adjusted net loss				$	(4,047,514	)
Basic and diluted net loss per common share as reported				$	(41.29	)
	Goodwill amortization
		UPC and subsidiaries			3.45
		VTR			0.10
		Austar United and subsidiaries			0.12
		Other			0.03
	Amortization of excess basis on equity investments
		UPC affiliates			0.33
		Austar United affiliates			0.03
		Other			0.02
Adjusted basic and diluted net loss per common share				$	(37.21	)

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7.	Intangible Assets

																								Foreign
																				UGC Europe				Currency
				December 31,																Exchange				Translation				December 31,
				2002				Additions				Impairments(1)				Disposals				Offer				Adjustments				2003
				(In thousands)
Intangible assets with definite lives:
	Customer relationships			$	—			$	—			$	—			$	—			$	220,290			$	4,068			$	224,358
	License fees				25,075				1,489				(13,871	)			(3,815	)			—				2,870				11,748
	Other				10,493				233				—				(4,132	)			—				1,925				8,519
Intangible assets with indefinite lives:
	Tradename				—				—				—				—				22,922				424				23,346
		Total			35,568				1,722				(13,871	)			(7,947	)			243,212				9,287				267,971
	Accumulated amortization				(21,792	)			(3,726	)			5,482				7,537				—				(3,236	)			(15,735	)
	Net intangible assets			$	13,776			$	(2,004	)		$	(8,389	)		$	(410	)		$	243,212			$	6,051			$	252,236

(1)	See Note 17.

		Year Ended December 31,
		2003				2002				2001
		(In thousands)
Amortization expense		$	3,726			$	16,632			$	19,136

		Year Ended December 31,
		2004				2005				2006				2007				2008				Thereafter
		(In thousands)
Estimated amortization expense		$	33,043			$	31,816			$	30,515			$	30,515			$	30,515			$	72,486

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8.	Long-Term Debt

			December 31,
			2003				2002
			(In thousands)
UPC Distribution Bank Facility			$	3,698,586			$	3,289,826
UPC Polska notes				317,372				377,110
VTR Bank Facility				123,000				—
Old UGC Senior Notes				24,627				24,313
Other				80,493				133,148
PCI notes				—				14,509
UPC July 1999 senior notes(1)				—				1,079,062
UPC January 2000 senior notes(1)				—				1,075,468
UPC October 1999 senior notes(1)				—				658,458
	Total			4,244,078				6,651,894
	Current portion			(628,176	)			(6,179,223	)
	Long-term portion		$	3,615,902			$	472,671

(1)	These senior notes and senior discount notes were converted into common stock of UGC Europe in connection with UPC’s reorganization.

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Currency/Tranche

Amount Outstanding

Amount

December 31, 2003

US

US

Payment

Final

Tranche

Euros

Dollars

Euros

Dollars

Interest Rate(4)

Description

Begins

Maturity

(In thousands)

Facility A(1)(2)(3)

€

666,750

$

840,529

€

230,000

$

289,946

EURIBOR +2.25%–4.0%

Revolving credit

June-06

June-08

Facility B(1)(2)

2,333,250

2,941,380

2,333,250

2,941,380

EURIBOR +2.25%–4.0%

Term loan

June-04

June-08

Facility C1(1)

95,000

119,760

95,000

119,760

EURIBOR +5.5%

Term loan

June-04

March-09

Facility C2(1)

405,000

347,500

275,654

347,500

LIBOR +5.5%

Term loan

June-04

March-09

Total

€

2,933,904

$

3,698,586

(1)	An annual commitment fee of 0.5% over the unused portions of each facility is applicable.
(2)	Pursuant to the terms of the October 2000 agreement, this interest rate is variable depending on certain leverage ratios.
(3)	The availability under Facility A of €436.8 ($550.6) million can be used to finance additional permitted acquisitions and/or to refinance indebtedness, subject to covenant compliance.
(4)	As of December 31, 2003, six month EURIBOR and LIBOR rates were 2.2% and 1.2%, respectively.

•	Permit indebtedness under a new facility (“Facility D”). The new facility has substantially the same terms as the existing facility and consists of five different tranches totaling €1.072 billion. The proceeds of Facility D are limited in use to fund the scheduled payments of Facility B under the existing facility between December 2004 and December 2006;
•	Increase and extend the maximum permitted ratios of senior debt to annualized EBITDA (as defined in the bank facility) and lower and extend the minimum required ratios of EBITDA to senior interest and EBITDA to senior debt service;
•	Include a total debt to annualized EBITDA ratio and EBITDA to total cash interest ratio;
•	Include a mandatory prepayment from proceeds of debt issuance and net equity proceeds received by UGC Europe; and
•	Permit acquisitions depending on certain leverage ratios and other restrictions.

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			Principal
			Amount at
			Maturity
			(In thousands)
UGC			$	638,008	(1)
IDT United				599,173	(1)
Third parties				24,627
	Total		$	1,261,808

(1)	Eliminated in consolidation.

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Year Ended December 31, 2004			$	628,176
Year Ended December 31, 2005				718,903
Year Ended December 31, 2006				1,002,106
Year Ended December 31, 2007				671,704
Year Ended December 31, 2008				813,423
Thereafter				409,766
	Total		$	4,244,078

9.	Fair Value of Financial Instruments

			December 31, 2003								December 31, 2002
			Carrying				Fair				Carrying				Fair
			Value				Value				Value				Value
			(In thousands)
UPC Distribution Bank Facility			$	3,698,586			$	3,698,586	(1)		$	3,289,826			$	3,289,826	(2)
UPC Polska Notes				317,372				194,500	(3)			377,110				99,133	(4)
VTR Bank Facility				123,000				123,000	(5)			144,000				144,000	(5)
Note payable to Liberty				102,728				102,728	(6)			102,728				102,728	(6)
Old UGC Senior Notes				24,627				20,687	(7)			24,313				8,619	(4)
UPC July 1999 Senior Notes				—				—				1,079,062				64,687	(4)
UPC October 1999 Senior Notes				—				—				658,458				41,146	(4)
UPC January 2000 Senior Notes				—				—				1,075,468				68,152	(4)
UPC FiBI Loan				—				—				57,033				—	(8)
Other				85,592				85,592	(9)			151,769				151,769	(9)
	Total		$	4,351,905			$	4,225,093			$	6,959,767			$	3,970,060

(1)	In the absence of quoted market prices, we determined the fair value to be equivalent to carrying value because: a) interest on this facility is tied to variable market rates; b) Moody’s Investor Service rated the facility at B+; and c) the credit agreement was amended in January 2004 to add a new €1.072 billion tranche on similar credit terms as the previous facility.
(2)	In the absence of quoted market prices, we determined the fair value to be equivalent to carrying value because: a) the restructuring plan of UPC assumed this facility was valued at par (100% of carrying amount); b) the reorganization plan of UPC assumed, in liquidation, that the lenders of the facility would be paid back 100%, based on seniority in liquidation (i.e., the assets of UPC Distribution were sufficient to repay the facility in a liquidation scenario); c) certain lenders under the facility confirmed to us they did not mark down the facility on their books; and d) when the facility was amended in connection with the restructuring agreement on September 30, 2002, the revised terms included increased fees and margin (credit spread), resetting the terms of this variable-rate facility to market.
(3)	Fair value represents the consideration UPC Polska note holders received from the consummation of UPC Polska’s second amended Chapter 11 plan of reorganization.
(4)	Fair value is based on quoted market prices.

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(5)	In the absence of quoted market prices, we determined the fair value to be equivalent to carrying value because: a) interest on this facility is tied to variable market rates; b) VTR is not highly leveraged; c) VTR’s results of operations exceeded budget in 2002 and 2003; d) the Chilean peso strengthened considerably in 2003; and e) in May 2003 the credit agreement was amended and restated on similar credit terms to the previous facility.
(6)	We extinguished this obligation at its carrying amount in January 2004 through the issuance of our Class A common stock at fair value.
(7)	Fair value is based on an independent valuation analysis.
(8)	Fair value of our Israeli investment was determined to be nil by an independent valuation firm in 2002. The FiBI Loan was secured by this investment. On October 30, 2002, the First International Bank of Israel (“FiBI”) and we agreed to sell our Israeli investment to a wholly-owned subsidiary of FiBI in exchange for the extinguishment of the FiBI Loan. This transaction closed on February 24, 2003.
(9)	Fair value approximates carrying value.

10.	Derivative Instruments

11.	Bankruptcy Proceedings

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							UPC Polska				UPC
							December 31,
							2003				2002
							(In thousands)
Balance Sheet
Assets
	Current assets						$	240,131			$	54,650
	Long-term assets							—				328,422
			Total assets				$	240,131			$	383,072
Liabilities and Stockholders’ Equity (Deficit)
	Current liabilities
		Not subject to compromise:
				Accounts payable, accrued liabilities, debt and other			$	10,794			$	631
					Total current liabilities not subject to compromise			10,794				631
		Subject to compromise:
				Accounts payable				14,445				38,647
				Short-term debt				6,000				—
				Accrued liabilities				—				232,603
				Intercompany payable(1)				4,668				135,652
				Current portion of long-term debt(1)				456,992				2,812,954
				Debt(1)				481,737				1,533,707
					Total current liabilities subject to compromise			963,842				4,753,563
Long-term liabilities not subject to compromise								—				725,008
Convertible preferred stock subject to compromise(2)								—				1,744,043
Stockholders’ equity (deficit)								(734,505	)			(6,840,173	)
			Total liabilities and stockholders’ equity (deficit)				$	240,131			$	383,072

(1)	Certain amounts are eliminated in consolidation.
(2)	99.6% is eliminated in consolidation.

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				UPC Polska				UPC
				December 31,
				2003(1)				2002(2)
				(In thousands)
Statement of Operations
	Revenue			$	—			$	19,037
	Expense				—				(42,696	)
	Depreciation and amortization				—				(16,562	)
	Impairment and restructuring charges				(6,000	)			(1,218	)
		Operating income (loss)			(6,000	)			(41,439	)
	Share in results of affiliates and other expense, net				(6,669	)			(1,870,430	)
		Net income (loss)		$	(12,669	)		$	(1,911,869	)

(1)	For the period from July 7, 2003 (the petition date) to December 31, 2003.
(2)	For the year ended December 31, 2002.

				2003				2002
				(In thousands)
Interest expense on liabilities subject to compromise(1)				$	55,270			$	—
Contractual interest expense on liabilities subject to compromise				$	106,858			$	709,571
Reorganization expense:
	Professional fees			$	43,248			$	37,898
	Adjustment of debt to expected allowed amounts				(19,239	)			—
	Write-off of deferred finance costs				—				36,203
	Other				8,000				1,142
		Total reorganization expense		$	32,009			$	75,243

(1)	In accordance with SOP 90-7, interest expense on liabilities subject to compromise is reported in the accompanying consolidated statement of operations only to the extent that it will be paid during the bankruptcy proceedings or to the extent it is considered an allowed claim.

12.	Net Negative Investment in Deconsolidated Subsidiaries

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			Capital				Operating
			Leases				Leases
Year ended December 31, 2004			$	7,791			$	60,501
Year ended December 31, 2005				8,790				39,376
Year ended December 31, 2006				7,887				32,020
Year ended December 31, 2007				7,899				26,109
Year ended December 31, 2008				7,917				21,511
Thereafter				61,826				42,092
	Total minimum payments		$	102,110			$	221,609
Less amount representing interest and executory costs				(37,268	)
	Net lease payments			64,842
Lease obligations due within one year				(3,073	)
Long-term lease obligations			$	61,769

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14.	Minority Interests in Subsidiaries

			December 31,
			2003				2002
			(In thousands)
UPC convertible preference shares held by third parties(1)			$	—			$	1,094,668
UPC convertible preference shares held by Liberty(2)				—				297,753
IDT United				20,858				7,986
Other				1,903				1,739
	Total		$	22,761			$	1,402,146

(1)	We acquired 99.4% of these convertible preference shares in February and April 2003. The remainder was exchanged for UGC Europe common stock in connection with UPC’s restructuring.
(2)	Acquired by us in April 2003.

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			Year Ended December 31,
			2003				2002				2001
			(In thousands)
Minority interest share of UGC Europe net loss			$	181,046			$	—			$	—
Accrual of dividends on UPC’s convertible preference shares held by third parties				—				(78,355	)			(70,089	)
Accrual of dividends on UPC’s convertible preference shares held by Liberty				—				(18,728	)			(19,113	)
Minority interest share of UPC net loss				—				—				54,050
Subsidiaries of UGC Europe				(91	)			28,080				484,780
Other				2,227				1,900				46,887
	Total		$	183,182			$	(67,103	)		$	496,515

15.	Stockholders’ Equity (Deficit)

•	1,000,000,000 shares of Class A common stock;
•	1,000,000,000 shares of Class B common stock;
•	400,000,000 shares of Class C common stock; and
•	10,000,000 shares of preferred stock, all $0.01 par value per share.

•	Each share of Class A common stock, Class B common stock and Class C common stock entitles the holders thereof to one, ten and ten votes, respectively, on each matter to be voted on by our stockholders, excluding, until our next annual meeting of stockholders, the election of directors, at which time the holders of Class A common stock, Class B common stock and Class C common stock will vote together as a single class on each matter to be voted on by our stockholders, including the election of directors; and
•	Each share of Class B common stock is convertible, at the option of the holder, into one share of Class A common stock at any time. Each share of Class C common stock is convertible, at the option of the holder, into one share of Class A common stock or Class B common stock at any time.

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•	voting rights;
•	dividend rights;
•	dividend rates;
•	liquidation preferences;
•	redemption provisions;
•	sinking fund terms;
•	conversion or exchange rights;
•	the number of shares in the series; and
•	other rights, preferences, privileges and restrictions.

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						Weighted-
		Number of				Average
		SARs				Base Price
Outstanding at beginning of year			—			$	—
Granted during the year			32,165,550			$	4.69
Cancelled during the year			(78,280	)		$	4.59
Exercised during the year			—			$	—
Outstanding at end of year			32,087,270			$	4.69
Exercisable at end of year			—			$	—

							Fair				Base
Base Price			Number				Value				Price
Less than market price(1)				15,081,775			$	5.44			$	3.74
Equal to market price(2)				15,081,775			$	6.88			$	5.44
Equal to market price				2,002,000			$	4.91			$	6.13
Greater than market price				—			$	—			$	—
	Total(3)			32,165,550			$	4.33			$	4.69

(1)	We originally granted these SARs below fair market value on date of grant; however, upon exercise the holder will receive only the difference between the base price and the lesser of $5.44 or the fair market value of our Class A common stock on the date of exercise.
(2)	We originally granted these SARs at fair market value on date of grant. As a result of the UGC Europe Exchange Offer and merger transaction in December 2003, we substituted UGC SARs for UGC Europe SARs.
(3)	All the SARs granted during Fiscal 2003 vest in five equal annual increments. Vesting of the SARs granted would be accelerated upon a change of control of UGC as defined in the Amended Incentive Plan. The table does not reflect the adjustment to the base prices on all outstanding SARs in January 2004. As a result of the dilution caused by our subscription rights offering that closed in February 2004, all base prices have since been reduced by $0.87.

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			Outstanding												Exercisable
							Weighted-
							Average
							Remaining				Weighted-								Weighted-
							Contractual				Average								Average
							Life				Base								Base
Base Price Range			Number				(Years)				Price				Number				Price
$3.74				15,042,635				9.97			$	3.74				—			$	—
$5.44				15,042,635				9.97			$	5.44				—			$	—
$6.13				1,997,000				9.75			$	6.13				—			$	—
$7.20				5,000				9.90			$	7.20				—			$	—
	Total			32,087,270				9.95			$	4.69				—			$	—

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		Year Ended December 31,
		2003				2002				2001
Risk-free interest rate			3.40%				4.62%				4.78%
Expected lives			6  years				6  years				6  years
Expected volatility			100%				100%				95.13%
Expected dividend yield			0%				0%				0%

		Year Ended December 31,
		2003								2002								2001
						Weighted-								Weighted-								Weighted-
						Average								Average								Average
						Exercise								Exercise								Exercise
		Number				Price				Number				Price				Number				Price
Outstanding at beginning of year			16,964,230			$	7.88				5,141,807			$	16.16				4,770,216			$	16.95
Granted during the year			—			$	—				11,970,000			$	4.43				543,107			$	10.08
Cancelled during the year			(3,067,084	)		$	5.90				(147,577	)		$	16.66				(157,741	)		$	20.12
Exercised during the year			(151,454	)		$	3.92				—			$	—				(13,775	)		$	5.30
Outstanding at end of year			13,745,692			$	8.36				16,964,230			$	7.88				5,141,807			$	16.16
Exercisable at end of year			8,977,124			$	9.91				7,371,369			$	10.28				3,125,596			$	13.70

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		Year Ended December 31,
		2003								2002								2001
						Weighted-								Weighted-								Weighted-
						Average								Average								Average
						Exercise								Exercise								Exercise
		Number				Price				Number				Price				Number				Price
Outstanding at beginning of year			1,080,000			$	10.52				1,110,416			$	11.24				630,000			$	18.13
Granted during the year			—			$	—				200,000			$	5.00				500,000			$	5.00
Cancelled during the year			—			$	—				(230,416	)		$	9.20				(19,584	)		$	73.45
Exercised during the year			(160,000	)		$	4.75				—			$	—				—			$	—
Outstanding at end of year			920,000			$	11.53				1,080,000			$	10.52				1,110,416			$	11.24
Exercisable at end of year			702,290			$	13.48				569,999			$	12.81				487,290			$	12.99

			Year Ended December 31,
			2002												2001
							Fair				Exercise								Fair				Exercise
Exercise Price			Number				Value				Price				Number				Value				Price
Less than market price				2,900,000			$	4.53			$	2.64				3,149			$	9.65			$	5.96
Equal to market price				—			$	—			$	—				100,000			$	13.71			$	17.38
Greater than market price				9,270,000			$	3.71			$	5.00				939,958			$	4.10			$	6.62
	Total			12,170,000			$	3.91			$	4.44				1,043,107			$	5.03			$	7.64

			Options Outstanding												Options Exercisable
							Weighted-Average				Weighted-								Weighted-
							Remaining				Average								Average
							Contractual Life				Exercise								Exercise
Exercise Price Range			Number				(Years)				Price				Number				Price
$4.16–$4.75				407,000				3.75			$	4.29				407,000			$	4.29
$5.00–$5.00				10,977,808				8.09			$	5.00				6,203,710			$	5.00
$5.11–$7.13				996,182				3.89			$	5.75				974,677			$	5.77
$7.75–$86.50				2,284,702				5.84			$	27.66				2,094,027			$	28.68
	Total			14,665,692				7.33			$	8.56				9,679,414			$	10.17

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		Year Ended
		December 31,
		2002				2001
Risk-free interest rate			3.16	%			4.15	%
Expected lives			5  years				5  years
Expected volatility			118.33	%			112.19	%
Expected dividend yield			0	%			0	%

16.	Segment Information

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					Year Ended December 31,
					2003				2002				2001
					(In thousands)
Europe:
	UPC Broadband
		The Netherlands			$	592,223			$	459,044			$	365,988
		Austria				260,162				198,189				163,073
		Belgium				31,586				24,646				22,318
		Czech Republic				63,348				44,337				38,588
		Norway				95,284				76,430				59,707
		Hungary				165,450				124,046				93,206
		France				113,946				92,441				83,811
		Poland				85,356				76,090				132,669
		Sweden				75,057				52,560				40,493
		Slovak Republic				25,467				18,852				17,607
		Romania				20,189				16,119				12,710
			Total			1,528,068				1,182,754				1,030,170
		Germany				—				28,069				45,848
		Corporate and other(1)				32,563				35,139				51,762
			Total			1,560,631				1,245,962				1,127,780
	chellomedia
		Priority Telecom(1)				121,330				112,637				206,149
		Media(1)				98,463				69,372				75,676
		Investments				528				465				—
			Total			220,321				182,474				281,825
	Intercompany Eliminations					(127,055	)			(108,695	)			(176,417	)
			Total			1,653,897				1,319,741				1,233,188
Latin America:
	Broadband
		Chile				229,835				186,426				166,590
		Brazil, Peru, Uruguay				7,798				7,054				6,044
			Total			237,633				193,480				172,634
Australia
	Broadband					—				—				145,423
	Content					—				—				9,973
	Other					—				—				235
			Total			—				—				155,631
Corporate and other (United States)						—				1,800				441
			Total		$	1,891,530			$	1,515,021			$	1,561,894

(1)	Primarily The Netherlands.

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					Year Ended December 31,
					2003				2002				2001
					(In thousands)
Europe:
	UPC Broadband
		The Netherlands			$	267,075			$	119,329			$	40,913
		Austria				98,278				64,662				40,583
		Belgium				12,306				8,340				4,367
		Czech Republic				24,657				9,241				9,048
		Norway				27,913				17,035				5,337
		Hungary				63,357				41,487				26,555
		France				13,920				(10,446	)			(25,678	)
		Poland				24,886				15,794				(8,633	)
		Sweden				31,827				15,904				6,993
		Slovak Republic				10,618				4,940				2,802
		Romania				7,545				6,044				3,165
		Other				386				535				1,434
			Total			582,768				292,865				106,886
		Germany				—				12,562				22,197
		Corporate and other(1)				(46,091	)			(25,727	)			(93,781	)
			Total			536,677				279,700				35,302
	chellomedia
		Priority Telecom(1)				14,530				(3,809	)			(79,758	)
		Media(1)				22,874				(4,851	)			(100,599	)
		Investments				(1,033	)			(374	)			—
			Total			36,371				(9,034	)			(180,357	)
			Total			573,048				270,666				(145,055	)
Latin America:
	Broadband
		Chile				69,951				41,959				26,860
		Brazil, Peru, Uruguay				8				(3,475	)			(4,016	)
			Total			69,959				38,484				22,844
Australia
	Broadband					—				—				(32,338	)
	Content					—				—				(6,849	)
	Other					—				(282	)			(832	)
			Total			—				(282	)			(40,019	)
Corporate and other (United States)						(14,125	)			(12,494	)			(29,013	)
			Total		$	628,882			$	296,374			$	(191,243	)

(1)	Primarily The Netherlands.

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				Year Ended December 31,
				2003				2002				2001
				(In thousands)
Total segment Adjusted EBITDA				$	628,882			$	296,374			$	(191,243	)
Depreciation and amortization					(808,663	)			(730,001	)			(1,147,176	)
Impairment of long-lived assets					(402,239	)			(436,153	)			(1,320,942	)
Restructuring charges and other					(35,970	)			(1,274	)			(204,127	)
Stock-based compensation					(38,024	)			(28,228	)			(8,818	)
	Operating income (loss)				(656,014	)			(899,282	)			(2,872,306	)
Interest expense, net					(314,078	)			(641,786	)			(966,134	)
Foreign currency exchange gain (loss), net					121,612				739,794				(148,192	)
Gain on extinguishment of debt					2,183,997				2,208,782				3,447
Gain (loss) on sale of investments in affiliates, net					279,442				117,262				(416,803	)
Other expense, net					(14,884	)			(120,832	)			(265,512	)
		Income (loss) before income taxes and other items			1,600,075				1,403,938				(4,665,500	)
Other, net					395,293				(415,670	)			150,735
		Income (loss) before cumulative effect of change in accounting principle			1,995,368				988,268				(4,514,765	)
Cumulative effect of change in accounting principle					—				(1,344,722	)			20,056
		Net income (loss)		$	1,995,368			$	(356,454	)		$	(4,494,709	)

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					Investments in Affiliates								Long-Lived Assets								Total Assets
					December 31,								December 31,								December 31,
					2003				2002				2003				2002				2003				2002
					(In thousands)
Europe:
	UPC Broadband
		The Netherlands			$	222			$	215			$	1,334,294			$	1,310,783			$	2,493,134			$	1,884,044
		Austria				—				—				307,758				282,628				700,209				450,526
		Belgium				—				—				22,596				22,395				88,725				44,444
		Czech Republic				—				—				117,527				120,863				201,103				127,691
		Norway				—				—				219,651				226,981				280,528				249,761
		Hungary				1,708				—				249,515				251,120				541,139				343,287
		France				—				—				246,307				573,167				274,180				608,650
		Poland				15,049				3,277				118,586				124,088				302,216				245,122
		Sweden				—				—				94,414				87,339				321,961				237,619
		Slovak Republic				—				—				35,697				26,896				67,027				33,428
		Romania				—				—				15,235				9,403				42,503				31,078
			Total			16,979				3,492				2,761,580				3,035,663				5,312,725				4,255,650
		Corporate and other(1)				65,279				112,507				14,154				39,455				374,876				576,568
			Total			82,258				115,999				2,775,734				3,075,118				5,687,601				4,832,218
	chellomedia
		Priority Telecom(1)				3,232				—				182,491				202,986				241,909				261,301
		Media(1)				2,257				4,037				43,578				48,625				232,527				72,554
			Total			5,489				4,037				226,069				251,611				474,436				333,855
			Total			87,747				120,036				3,001,803				3,326,729				6,162,037				5,166,073
Latin America:
	Broadband
		Chile				—				—				322,606				293,941				602,762				509,376
		Brazil, Peru, Uruguay				3,522				33,817				9,584				9,448				18,388				55,381
			Total			3,522				33,817				332,190				303,389				621,150				564,757
Corporate and other (United States)						3,969				—				8,750				10,093				316,484				200,764
			Total		$	95,238			$	153,853			$	3,342,743			$	3,640,211			$	7,099,671			$	5,931,594

(1)	Primarily The Netherlands.

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					Depreciation and Amortization												Capital Expenditures
					Year Ended December 31,												Year Ended December 31,
					2003				2002				2001				2003				2002				2001
					(In thousands)
Europe:
	UPC Broadband
		The Netherlands			$	(225,638	)		$	(230,852	)		$	(252,356	)		$	(63,451	)		$	(97,841	)		$	(213,846	)
		Austria				(85,589	)			(71,924	)			(68,513	)			(43,751	)			(38,388	)			(92,679	)
		Belgium				(6,877	)			(5,952	)			(7,531	)			(3,473	)			(2,884	)			(8,367	)
		Czech Republic				(18,665	)			(16,317	)			(24,577	)			(12,294	)			(4,706	)			(26,287	)
		Norway				(36,765	)			(37,288	)			(35,918	)			(9,714	)			(7,050	)			(60,562	)
		Hungary				(39,102	)			(34,889	)			(35,202	)			(23,004	)			(16,659	)			(31,599	)
		France				(99,913	)			(85,940	)			(78,732	)			(48,810	)			(19,688	)			(114,596	)
		Poland				(28,487	)			(28,517	)			(126,855	)			(8,476	)			(4,464	)			(35,628	)
		Sweden				(19,668	)			(13,519	)			(37,098	)			(9,778	)			(8,974	)			(28,767	)
		Slovak Republic				(8,939	)			(7,478	)			(13,124	)			(3,848	)			(501	)			(5,005	)
		Romania				(2,984	)			(2,494	)			(1,578	)			(5,286	)			(4,547	)			(3,433	)
			Total			(572,627	)			(535,170	)			(681,484	)			(231,885	)			(205,702	)			(620,769	)
		Germany				—				(9,240	)			(107,799	)			—				(3,357	)			(12,788	)
		Corporate and other(1)				(86,939	)			(61,543	)			(74,420	)			(35,666	)			(6,491	)			(47,773	)
			Total			(659,566	)			(605,953	)			(863,703	)			(267,551	)			(215,550	)			(681,330	)
	chellomedia
		Priority Telecom(1)				(60,952	)			(45,239	)			(80,887	)			(16,727	)			(30,658	)			(69,710	)
		UPC Media(1)				(17,706	)			(20,565	)			(37,305	)			(5,779	)			(6,241	)			(50,051	)
			Total			(78,658	)			(65,804	)			(118,192	)			(22,506	)			(36,899	)			(119,761	)
			Total			(738,224	)			(671,757	)			(981,895	)			(290,057	)			(252,449	)			(801,091	)
Latin America:
	Broadband
		Chile				(66,928	)			(54,458	)			(54,027	)			(41,391	)			(80,006	)			(135,821	)
		Brazil, Peru, Uruguay				(2,206	)			(2,371	)			(7,824	)			(1,582	)			(2,679	)			(10,418	)
			Total			(69,134	)			(56,829	)			(61,851	)			(42,973	)			(82,685	)			(146,239	)
Australia
	Broadband					—				—				(100,489	)			—				—				(48,291	)
	Other					—				—				(1,282	)			—				—				—
			Total			—				—				(101,771	)			—				—				(48,291	)
Corporate and other (United States)						(1,305	)			(1,415	)			(1,659	)			(94	)			(58	)			(790	)
			Total		$	(808,663	)		$	(730,001	)		$	(1,147,176	)		$	(333,124	)		$	(335,192	)		$	(996,411	)

(1)	Primarily The Netherlands.

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17.	Impairment of Long-Lived Assets

			Year Ended December 31,
			2003				2002				2001
			(In thousands)
UPC Broadband			$	(402,239	)		$	(75,305	)		$	(682,633	)
Priority Telecom				—				(359,237	)			(418,413	)
Swiss wireless license				—				—				(91,260	)
Microsoft contract acquisition rights				—				—				(59,831	)
Other				—				(1,611	)			(68,805	)
	Total		$	(402,239	)		$	(436,153	)		$	(1,320,942	)

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18.	Restructuring Charges and Other

											Programming				Asset
			Employee								and Lease				Disposal
			Severence and				Office				Contract				Losses and
			Termination(2)				Closures				Termination				Other				Total
			(In thousands)
	Restructuring charges		$	46,935			$	16,304			$	93,553			$	47,335			$	204,127
	Cash paid and other releases			(13,497	)			(6,386	)			(14,814	)			(3,294	)			(37,991	)
	Foreign currency translation adjustments			127				38				12,468				(29,537	)			(16,904	)
Restructuring liability as of December 31, 2001				33,565				9,956				91,207				14,504				149,232
	Restructuring charges (credits)			13,675				7,884				(32,035	)			11,750				1,274
	Cash paid and other releases			(30,944	)			(4,622	)			(32,231	)			(24,449	)			(92,246	)
	Foreign currency translation adjustments			3,133				978				9,920				2,590				16,621
Restructuring liability as of December 31, 2002				19,429				14,196				36,861				4,395				74,881
	Restructuring charges (credits)(1)			177				7,506				—				(605	)			7,078
	Cash paid and other releases			(13,628	)			(5,934	)			(5,981	)			(1,991	)			(27,534	)
	Foreign currency translation adjustments			2,427				1,053				3,519				643				7,642
Restructuring liability as of December 31, 2003			$	8,405			$	16,821			$	34,399			$	2,442			$	62,067
Short-term portion			$	3,682			$	6,002			$	3,795			$	794			$	14,273
Long-term portion				4,723				10,819				30,604				1,648				47,794
	Total		$	8,405			$	16,821			$	34,399			$	2,442			$	62,067

(1)	Restructuring charges and other in 2003 also includes other litigation settlements totaling $22.2 million and costs incurred by UGC Europe related to the UGC Europe Exchange Offer and merger of $6.7 million.
(2)	Included nil and 45 employees scheduled for termination as of December 31, 2003 and 2002, respectively.

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19.	Income Taxes

				December 31,
				2003				2002
				(In thousands)
Deferred tax assets:
	Tax net operating loss carryforward of consolidated foreign subsidiaries			$	1,017,895			$	1,431,785
	U.S. tax net operating loss carryforward				9,258				—
	Accrued interest expense				20,985				91,036
	Investment valuation allowance and other				33,619				22,442
	Property, plant and equipment, net				310,657				40,063
	Intangible assets, net				20,701				—
	Other				48,743				38,213
		Total deferred tax assets			1,461,858				1,623,539
	Valuation allowance				(1,331,778	)			(1,607,089	)
		Deferred tax assets, net of valuation allowance			130,080				16,450
Deferred tax liabilities:
	Cancellation of debt and other				(110,583	)			(110,583	)
	Intangible assets				(82,679	)			(12,056	)
	Other				(25,937	)			(41	)
		Total deferred tax liabilities			(219,199	)			(122,680	)
		Deferred tax liabilities, net		$	(89,119	)		$	(106,230	)

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				Year Ended December 31,
				2003				2002				2001
				(In thousands)
Expected income tax expense (benefit) at the U.S. statutory rate of 35%				$	560,026			$	491,379			$	(1,632,925	)
Tax effect of permanent and other differences:
	Change in valuation allowance				(516,810	)			173,604				814,612
	Gain on sale of investment in affiliate				(133,211	)			(51,774	)			—
	Tax ruling regarding UPC reorganization				107,922				—				—
	Enacted tax law changes, case law and rate changes				(92,584	)			—				—
	Revenue for book not for tax				75,308				—				—
	Other				26,122				(11,415	)			(5,063	)
	Financial instruments				15,280				95,178				—
	Non-deductible interest accretion				8,680				110,974				81,149
	State tax, net of federal benefit				7,193				42,118				(139,965	)
	International rate differences				(5,857	)			58,407				187,027
	Non-deductible foreign currency exchange results				(3,595	)			(104,598	)			—
	Non-deductible expenses				1,870				12,024				14,740
	Gain on extinguishment of debt				—				(728,754	)			(1,310	)
	Goodwill impairment				—				114,039				559,028
	Amortization of goodwill				—				—				84,020
	Gain on issuance of common equity securities by subsidiaries				—				—				(1,974	)
		Total income tax expense (benefit)		$	50,344			$	201,182			$	(40,661	)

			Year Ended December 31,
			2003				2002				2001
			(In thousands)
Current:
	U.S. Federal		$	1,008			$	23,801			$	—
	State and local			1,674				4,966				—
	Foreign jurisdiction			2,916				5,592				2,506
				5,598				34,359				2,506
Deferred:
	U.S. Federal		$	61,768			$	138,746			$	—
	State and local			8,519				19,136				—
	Foreign jurisdiction			(25,541	)			8,941				(43,167	)
				44,746				166,823				(43,167	)
Income tax expense (benefit)			$	50,344			$	201,182			$	(40,661	)

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			Tax Loss								Expiration
Country			Carryforward				Tax Asset				Date
The Netherlands			$	1,293,157			$	446,139				Indefinite
France				786,516				278,662				Indefinite
Norway				302,860				84,801				2007–2012
Chile				273,619				45,147				Indefinite
Austria				226,173				76,899				Indefinite
Hungary				142,158				22,746				2004–2009
Poland				88,286				16,774				2004–2008
Other				163,602				46,727				Various
	Total		$	3,276,371			$	1,017,895

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20.	Earnings Per Share

				Year Ended December 31,
				2003				2002				2001
				(In thousands)
Numerator (Basic):
	Income (loss) before cumulative effect of change in accounting principle			$	1,995,368			$	988,268			$	(4,514,765	)
	Gain on issuance of Class A common stock for UGC Europe preference shares				1,423,102				—				—
	Equity transactions of subsidiaries				6,555				—				—
	Accrual of dividends on Series B convertible preferred stock				—				(156	)			(1,873	)
	Accrual of dividends on Series C convertible preferred stock				—				(2,397	)			(29,750	)
	Accrual of dividends on Series D convertible preferred stock				—				(1,621	)			(20,125	)
	Basic income (loss) attributable to common stockholders before cumulative effect of change in accounting principle				3,425,025				984,094				(4,566,513	)
	Cumulative effect of change in accounting principle				—				(1,344,722	)			20,056
		Basic net income (loss) attributable to common stockholders		$	3,425,025			$	(360,628	)		$	(4,546,457	)
Denominator (Basic):
	Basic weighted-average number of common shares outstanding, before adjustment				418,874,941				390,087,623				99,834,387
	Adjustment for rights offering in February 2004				43,149,291				40,183,842				10,284,175
	Basic weighted-average number of common shares outstanding				462,024,232				430,271,465				110,118,562
Numerator (Diluted):
	Income (loss) before cumulative effect of change in accounting principle			$	1,995,368			$	988,268			$	(4,514,765	)
	Gain on issuance of Class A common stock for UGC Europe preference shares				1,423,102				—				—
	Equity transactions of subsidiaries				6,555				—				—
	Accrual of dividends on Series B convertible preferred stock				—				—				(1,873	)
	Accrual of dividends on Series C convertible preferred stock				—				(2,397	)			(29,750	)
	Accrual of dividends on Series D convertible preferred stock				—				(1,621	)			(20,125	)
	Diluted income (loss) attributable to common stockholders before cumulative effect of change in accounting principle				3,425,025				984,250				(4,566,513	)
	Cumulative effect of change in accounting principle				—				(1,344,722	)			20,056
		Diluted net income (loss) attributable to common stockholders		$	3,425,025			$	(360,472	)		$	(4,546,457	)

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				Year Ended December 31,
				2003				2002				2001
				(In thousands)
Denominator (Diluted):
	Basic weighted-average number of common shares outstanding, as adjusted				462,024,232				430,271,465				110,118,562
	Incremental shares attributable to the assumed exercise of outstanding stock appreciation rights				109,544				—				—
	Incremental shares attributable to the assumed exercise of contingently issuable shares				92,470				—				—
	Incremental shares attributable to the assumed exercise of outstanding options (treasury stock method)				220,115				9,701				—
	Incremental shares attributable to the assumed conversion of Series B convertible preferred stock				—				224,256				—
		Diluted weighted-average number of common shares outstanding			462,446,361				430,505,422				110,118,562

21.	Related Party Transactions

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22.	Subsequent Events

	Liberty Acquisition of Controlling Interest

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		As of December 31,
		2003				2004				2004
		ThCh$				ThCh$				ThUS$
										Note 2(e)
ASSETS
CURRENT ASSETS
Cash			210,523				211,672				380
Time deposits (Note 3)			6,936,432				4,033,512				7,236
Trade receivables, net (Note 4)			2,580,504				2,022,823				3,629
Notes receivable (Note 4)			92,652				114,250				205
Miscellaneous receivables (Note 4)			2,673,926				1,426,134				2,559
Notes and accounts receivable from related companies (Note 5)			232,509				228,921				411
Recoverable income taxes, net (Note 6)			76,634				79,553				143
Prepaid expenses (Note 7)			988,849				631,278				1,133
Deferred income taxes net (Note 6)			1,375,702				1,505,421				2,701
Total current assets			15,167,731				10,253,564				18,397
PROPERTY, PLANT AND EQUIPMENT (Note 8)
Land			500,019				500,019				897
Buildings and other infrastructure			118,466,606				120,942,228				216,976
Machinery and equipment			12,044,082				13,453,463				24,136
Furniture and fixtures			4,126,938				4,380,580				7,859
Other property, plant and equipment			15,092,271				14,424,263				25,878
Less: Accumulated depreciation			(34,686,655	)			(44,929,770	)			(80,602	)
Property, plant and equipment, net			115,543,261				108,770,783				195,144
OTHER ASSETS
Investment in other companies, net (Note 9)			233,512				225,341				403
Goodwill, net (Note 10)			62,349,750				58,057,299				104,156
Intangibles, net			1,711,696				1,539,410				2,761
Deferred income taxes, net (Note 6)			8,349,411				9,536,666				17,109
Other assets (Note 11)			11,585,426				10,682,574				19,164
Total other assets			84,229,795				80,041,290				143,593
TOTAL ASSETS			214,940,787				199,065,637				357,134
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Banks and financial institutions, short-term (Note 12)			—				59,325				106
Banks and financial institutions, current portion (Note 12)			7,631,787				7,587,230				13,612
Accounts payable (Note 13)			9,258,399				7,289,371				13,077
Notes payable (Note 14)			12,133				12,193				22
Miscellaneous payables (Note 15)			1,041,968				14,508,434				26,029
Notes and accounts payable to related companies (Note 5)			753,025				11,893,748				21,338
Provisions and withholdings (Note 16)			1,297,142				1,432,338				2,570
Unearned revenues (Note 17)			736,997				680,687				1,221
Deferred taxes (Note 6)			161,459				—				—
Other current liabilities (Note 18)			4,292,744				842,019				1,511
Total current liabilities			25,185,654				44,305,345				79,486
LONG-TERM LIABILITIES
Banks and financial institutions, non-current portion (Note 12)			30,246,442				22,650,889				40,637
Long-term notes payables (Note 15)			14,761,670				—				—
Notes and accounts payable to related companies (Note 5)			—				872,688				1,566
Deferred taxes (Note 6)			3,204,918				3,015,508				5,410
Other long-term liabilities			375,491				314,247				564
Deferred gains (Note 19)			1,474,427				1,400,705				2,513
Total long-term liabilities			50,062,948				28,254,037				50,690
Minority interest			4,131,190				3,670,536				6,585
Commitments and contingencies (Note 24)			—				—				—
SHAREHOLDERS’ EQUITY (Note 20)
Paid-in capital			205,865,408				205,865,408				369,332
Price-level restatement			1,852,790				1,852,790				3,324
Accumulated deficit			(58,374,521	)			(72,157,203	)			(129,451	)
Net loss for the year			(13,782,682	)			(12,725,276	)			(22,832	)
Total Shareholders’ equity			135,560,995				122,835,719				220,373
Total Liabilities and Shareholders’ equity			214,940,787				199,065,637				357,134

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		For the Years Ended December 31,
		2002				2003				2004				2004
		ThCh$				ThCh$				ThCh$				ThUS$
														Note 2(e)
OPERATING INCOME
Operating revenue			47,911,196				46,100,072				45,547,636				81,714
Operating costs			(43,594,223	)			(39,034,899	)			(39,864,637	)			(71,519	)
Operating margin			4,316,973				7,065,173				5,682,999				10,195
Administrative and selling expenses			(15,958,113	)			(14,279,993	)			(14,328,858	)			(25,707	)
Operating loss			(11,641,140	)			(7,214,820	)			(8,645,859	)			(15,512	)
NON-OPERATING INCOME
Financial revenue			372,907				218,122				59,530				107
Other non-operating income			58,583				306,224				416,010				746
Financial expenses			(2,431,445	)			(2,708,735	)			(2,335,803	)			(4,191	)
Other non-operating expenses (Note 21)			(1,567,912	)			(1,129,243	)			(410,524	)			(736	)
Goodwill amortization (Note 10)			(4,207,744	)			(4,289,132	)			(4,225,945	)			(7,582	)
Price-level restatement, net (Note 22)			294,056				75,810				349,259				627
Foreign currency translation (Note 22)			(974,908	)			(1,296,437	)			(213,322	)			(383	)
Non-operating loss			(8,456,463	)			(8,823,391	)			(6,360,795	)			(11,412	)
Loss before taxes and minority interest			(20,097,603	)			(16,038,211	)			(15,006,654	)			(26,924	)
Tax benefit (Note 6)			2,449,618				2,088,982				1,820,722				3,267
Minority interest			88,679				166,547				460,656				825
Net loss for the year			(17,559,306	)			(13,782,682	)			(12,725,276	)			(22,832	)

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		For the Years Ended December 31,
		2002				2003				2004				2004
		ThCh$				ThCh$				ThCh$				ThUS$
														Note 2(e)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss			(17,559,306	)			(13,782,682	)			(12,725,276	)			(22,832	)
Charges (credits) to income that do not represent cash flows
Depreciation			8,764,859				9,748,814				10,296,535				18,471
Software and other amortization			321,353				448,062				686,750				1,232
Amortization of residential cable TV installations			2,833,638				3,621,253				4,252,345				7,629
Other current amortization			—				(14,227	)			(71,300	)			(128	)
Loss on sale of fixed assets			—				32,309				25,036				46
Deferred taxes			(2,622,653	)			(2,056,674	)			(1,810,281	)			(3,247	)
Write-offs			675,653				290,492				276,638				496
Allowance for doubtful accounts			3,113,675				1,263,257				1,005,935				1,805
Vacation accrual			169,081				157,742				139,771				251
Valuation and obsolescence provision			130,627				144,568				—				—
Goodwill amortization			4,207,744				4,289,132				4,225,945				7,582
Price-level restatement			(294,056	)			(75,810	)			(349,259	)			(627	)
Foreign Currency Translation			974,908				1,296,437				213,322				383
Accrued interest			915,808				856,174				—				—
Investment price level restatement			320,720				(198,421	)			39,646				71
Unrealised gain (loss) on forward operations			859,354				300,314				(3,587,789	)			(6,437	)
Other			(106,523	)			(101,597	)			(74,159	)			(133	)
Decrease (increase) in Assets
Trade receivables, net			(3,725,551	)			(10,629	)			(448,254	)			(804	)
Miscellaneous receivables			(707,723	)			(943,853	)			1,222,435				2,193
Notes and accounts receivable from related parties			116,186				113,671				(1,058	)			—
Income taxes recoverable, net			842,846				10,498				(2,919	)			(5	)
Prepaid expenses			1,522,124				(109,591	)			66,394				119
Other current assets, net			409,755				—				—				—
(Decrease) increase in Liabilities
Accounts and notes payable			(3,925,898	)			(3,871,445	)			(2,083,614	)			(3,738	)
Miscellaneous payables			(9,918	)			725,923				(1,092,492	)			(1,960	)
Accrued liabilities and withholdings			270,724				(55,487	)			150,899				271
Notes and accounts payable to related parties			816,683				(647,855	)			124,655				224
Unearned revenues			475,007				(112,226	)			(56,310	)			(101	)
Other current liabilities			—				313,475				137,064				246
Short-term bank obligations			—				—				59,325				106
Minority interest			(88,678	)			(166,547	)			(396,710	)			(712	)

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			For the Years Ended December 31,
			2002				2003				2004				2004
			ThCh$				ThCh$				ThCh$				ThUS$
															Note 2(e)
Total cash flows provided from (used in) operating activities				(1,299,561	)			1,465,077				223,274				401
CASH FLOWS FROM FINANCING ACTIVITIES
	Issuance of subsidiary shares			—				5,047,718				—				—
	Loan proceeds			18,365,974				—				11,900,000				21,349
	Related company proceeds			—				2,612				—				—
	Other payments to related companies			—				(7,289	)			—				—
	Payments for bank obligations			—				(63,068	)			(7,421,738	)			(13,315	)
	Total cash flows from financing activities			18,365,974				4,979,973				4,478,262				8,034
CASH FLOWS FROM INVESTING ACTIVITIES
	Sale of property, plant and equipment			—				206,299				33,663				60
	Purchase of property, plant and equipment			(3,687,334	)			(8,420,557	)			(4,039,429	)			(7,247	)
	Purchase of software and licenses			(381,386	)			(453,475	)			(508,737	)			(913	)
	Additions to residential Cable TV installations			(4,533,873	)			(3,505,310	)			(2,915,939	)			(5,231	)
	Total cash flows used in investing activities			(8,602,593	)			(12,173,043	)			(7,430,442	)			(13,331	)
Total net cash flow for the year				8,463,820				(5,727,993	)			(2,728,906	)			(4,896	)
Effect of inflation on cash and cash equivalents				(445,612	)			(129,719	)			(172,865	)			(310	)
Increase (decrease) of cash and cash equivalents during the year				8,018,208				(5,857,712	)			(2,901,771	)			(5,206	)
Cash and cash equivalents at the beginning of the year				4,986,459				13,004,667				7,146,955				12,822
Cash and cash equivalents at the end of the year				13,004,667				7,146,955				4,245,184				7,616

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Note 1.	The Company:

Note 2.	Significant Accounting Policies:

(a)	General:

		2002				2003				2004
		%				%				%
Pacific Televisión Limitada			99.5				99.5				99.5
Metrópolis Intercom S.A.			99.5				95.1				95.1
Cordillera Comunicaciones Limitada			99.5				99.5				99.5

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(b)	Periods covered:

(c)	Price-level restatement:

(d)	Assets and liabilities denominated in foreign currency:

		As of December 31
		2002				2003				2004
		Ch$				Ch$				Ch$
U.S. Dollar			718.61				593.8				557.4
Unidad de Fomento			16,744.12				16,920.00				17,317.05

(e)	Convenience translation to U.S. Dollars:

(f)	Time deposits:

(g)	Marketable securities:

(h)	Trade receivables:

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(i)	Prepaid expenses:

(j)	Property, plant and equipment:

		Years
Buildings and other infrastructure			20 - 38
Machinery and equipment			7 - 10
Furniture and equipment			5 - 10
Other			5 -  7

(k)	Leased assets:

(l)	Software:

(m)	Investment in other companies:

(n)	Goodwill:

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(o)	Other assets:

(p)	Accrued vacation expense:

(q)	Revenue recognition and unearned revenues:

(r)	Current and deferred income taxes:

(s)	Financial derivatives:

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(t)	Cash and cash equivalents:

		2003				2004
		ThCh$				ThCh$
Cash			210,523				211,672
Time deposits			6,936,432				4,033,512
Total			7,146,955				4,245,184

Note 3.	Time Deposits:

	2003:

Financial					Interest				Capital		Final
Institution			Currency		Rate				balance		Balance
									ThCh$		ThCh$
Banco BCI			Chilean Pesos			0.20%			1,064,668		1,064,738
Banco Santander-Santiago			Chilean Pesos			0.27%			928,240		931,165
Banco Santander-Santiago			Chilean Pesos			0.25%			2,050,000		2,054,783
Banco Santander-Santiago			Chilean Pesos			0.25%			1,121,760		1,124,378
Banco Santander-Santiago			Chilean Pesos			0.22%			824,100		825,308
Banco Corpbanca-Santiago			Chilean Pesos			0.23%			935,415		936,060
	Total								6,924,183		6,936,432

	2004:

Financial					Interest				Capital		Final
Institution			Currency		Rate				balance		Balance
									ThCh$		ThCh$
Banco BCI			Chilean Pesos			0.20%			1,450,000		1,450,097
Banco Santander-Santiago			Chilean Pesos			0.18%			704,500		705,092
Banco Santander-Santiago			Chilean Pesos			0.27%			817,093		817,460
Banco Santander-Santiago			Chilean Pesos			0.18%			1,060,800		1,060,863
	Total								4,032,393		4,033,512

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Note 4.	Trade, Notes, and Miscellaneous Receivables:

		2003				2004
		ThCh$				ThCh$
Cable Services			7,111,253				7,637,629
Invoiced advertising receivable			1,767,767				1,525,687
Sub-total			8,879,020				9,163,316
Allowance for doubtful accounts-cable services monthly services			(6,165,459	)			(7,019,201	)
Allowance for doubtful accounts on advertisement			(133,057	)			(121,292	)
Total allowance for doubtful accounts			(6,298,516	)			(7,140,493	)
Total			2,580,504				2,022,823

																																			Long-term
			Short-term Receivables																																Receivables
											More than 90 days and																Total Short-term								Total Long-term
			Up to 90 days								up to 1 Year								Subtotal								Receivables (net)								Receivables
			2003				2004				2003				2004				2003				2004				2003				2004				2003				2004
			ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$
Trade receivable				2,580,504				2,022,823				6,298,516				7,140,493				8,879,020				9,163,316				2,580,504				2,022,823				—				—
Allowances for doubtful accounts				—				—				(6,298,516	)			(7,140,493	)			(6,298,516	)			(7,140,493	)			—				—
Notes receivable				92,652				114,250				190,395				197,923				283,047				312,173				92,652				114,250				—				—
Allowances for doubtful accounts				—				—				(190,395	)			(197,923	)			(190,395	)			(197,923	)			—				—				—				—
Miscellaneous Receivables				2,673,926				1,426,134				90,842				102,346				2,764,768				1,528,480				2,673,926				1,426,134				—				—
Allowances for doubtful accounts				—				—				(90,842	)			(102,346	)			(90,842	)			(102,346	)			—				—				—				—
	Total			5,347,082				3,563,207				—				—				5,347,082				3,563,207				5,347,082				3,563,207				—				—

		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Beginning balance			2,149,165				5,262,840				6,579,753
Charged to expense			3,007,655				1,232,446				1,005,935
Other			106,020				84,467				(144,926	)
Ending balance			5,262,840				6,579,753				7,440,762

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		2003				2004
		ThCh$				ThCh$
Raw materials			294,580				94,147
Advances to suppliers			412,515				120,254
Advances to employees			4,782				23,494
Receivables from cable services			1,070,971				733,776
Receivables from advertising rights			206,661				—
Network receivables			512,093				199,331
Receivables from Intercom communications			34,672				—
Other receivables			137,652				255,132
Total			2,673,926				1,426,134

Note 5.	Balances and Transactions with Related Companies:

					Short-term
Identification
Number			Company		2003				2004
					ThCh$				ThCh$
86.547.900-K			S.A. Viña Santa Rita			14,797				1,568
79.952.350-7			Red Televisiva Megavisión S.A.			1,245				185
96.539.380-3			Ediciones Financieras S.A.			—				225
Foreign Entity			Crown Media			25,983				41,105
Foreign Entity			Bresnan Communications de Chile S.A.			190,484				185,838
	Total					232,509				228,921

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					Short-term				Long-term
Identification
Number			Company		2003		2004		2003				2004
					ThCh$		ThCh$		ThCh$				ThCh$
83.032.100-4			S.y C. Hendaya S.A.		—		2			—			—
Foreign Entity			Bresnan Communications Company Ltd partnership		173,051		158,481			—			—
86.547.900-K			S.A. Viña Santa Rita		24,654		1,140			—			—
79.952.350-7			Red Televisiva Megavisión S.A.		64,769		182,566			—			—
Foreign Entity			Pramer		30,432		66,311			—			—
Foreign Entity			Crown Media		69,994		2,669			—			—
Foreign Entity			Discovery		356,059		300,790			—			—
Foreign Entity			DMX		8,746		10,101			—			—
Foreign Entity			USA Network		25,320		6,750			—			—
Foreign Entity			Liberty Media International, Inc.		—		6,018,813			—			—
90.331.006-6			Cristal Chile S.A.		—		5,146,125			—			872,688
	Total				753,025		11,893,748			—			872,688

																								Net Effect in Income Statement
												Transactions												Gain (Loss)
Company		RUT				Relationship						2002				2003				2004				2002				2003				2004
												ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$
S.A. Viña Santa Rita			86.547.900-K				Indirect			Advertising Contract			15,848				19,739				9,447				15,461				19,739				9,447
										Sale of Products			—				28,088				958				—				(7,809	)			(958	)
Red Televisiva Megavisión S.A.			79.952.350-7				Indirect			Advertising Contract			—				1,543				25,500				—				1,543				25,500
Red Televisiva Megavisión S.A.			79.952.350-7				Indirect			Advertising Contract			330,831				208,126				508,456				322,762				(208,126	)			(508,456	)
			79.952.350-8				Indirect			Loans receivable			—				—				—				1,009				—
Ediciones Financieras			96.539.380-3				Indirect			Advertising Contract			—				83,279				26,035				—				(83,279	)			(26,035	)
										Advertising Contract			—				64,877				—				—				64,877				—
										Advertising Contract			—				—				128				—				—				128
Pramer			Foreign entity				Indirect			Programming Signals			—				84,488				230,673				—				(84,488	)			(230,673	)
Discovery			Foreign entity				Indirect			Programming Signals			1,705,076				1,490,038				1,374,604				1,705,076				(1,490,383	)			(1,374,604	)
DMX			Foreign entity				Indirect			Programming Signals			11,151				44,385				1,532				11,151				(44,385	)			(1,532	)
CROWN MEDIA			Foreign entity				Indirect			Programming Signals			215,016				211,219				40,713				(318,541	)			(211,219	)			(40,713	)
Liberty Media International, Inc.			Foreign entity				Stockholder			Short-term loans			—				—				6,018,813				—				—				—
Cristal Chile S.A.							Stockholder			Short-term loans			—				—				6,018,813				—				—				—

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Note 6.	Income Taxes and Deferred Taxes:

	a) Income taxes recoverable

		2003				2004
		ThCh$				ThCh$
Current income taxes and Article 21			(4,777	)			(2,213	)
Monthly income tax installments			11,565				11,283
Credit for training expenses			67,821				68,459
Credit value-added tax			2,025				2,024
Total			76,634				79,553

	b) Income taxes

			2002				2003				2004
			ThCh$				ThCh$				ThCh$
Credit for absorbed earnings				(167,509	)			—				—
Deferred income taxes				2,622,653				2,093,759				1,822,935
First category tax provision				(5,526	)			(4,777	)			(2,213	)
	Total			2,449,618				2,088,982				1,820,722

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	c) Deferred Income Taxes:

		As of December 31, 2003																As of December 31, 2004
		Assets								Liabilities								Assets								Liabilities
		Short-term				Long-term				Short-term				Long-term				Short-term				Long-term				Short-term				Long-term
Allowance for doubtful accounts			1,105,571				—				—				—				1,247,088				—				—				—
Goods and services provision			16,665				—				—				—				35,240				—				—				—
Assets provision			—				308,839				—				—				—				348,334				—				—
Unearned revenues			182,172				—				—				—				146,889				—				—				—
Vacation provision			71,294				—				—				—				76,204				—				—				—
Accumulated depreciation			—				3,630				—				—				—				4,174				—				—
Forward contracts			—				—				(161,459	)			—				—				—				—				—
Tax loss carry forwards(1)			—				14,755,016				—				—				—				15,898,544				—				—
Trademarks			—				—				—				—				—				—				—				—
Leasing			—				58,022				—				(65,889	)			—				61,298				—				(71,751	)
Goodwill			—				—				—				(3,052,475	)			—				—				—				(2,780,206	)
Trademark rights							2,424				—				—				—				2,836				—				—
Software			—				—				—				(289,160	)			—				—				—				(260,283	)
Leased installations			—				—				—				(128,829	)			—				—				—				(124,575	)
Difference of accelerated depreciation			—				—				—				(2,294,439	)			—				—				—				(2,141,979	)
Other			—				—				—				—				—				—				—				—
Complementary account			—				(6,778,520	)			—				2,625,874				—				(6,778,520	)			—				2,363,286
Total			1,375,702				8,349,411				(161,459	)			(3,204,918	)			1,505,421				9,536,666				—				(3,015,508	)

(1)	In accordance with the current enacted tax law in Chile, accumulated tax losses can be carried-forward indefinitely.

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		2003				2004
		ThCh$				ThCh$
Programming rights			24,874				20,926
Advertising rights			180,839				173,657
Prepaid transmission post usage rights			378,272				13,544
Prepaid rent			15,922				9,789
System maintenance services			—				60,509
Rental space for fiber optics			196,800				192,000
Other			192,142				160,853
Total			988,849				631,278

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Note 8.	Property, Plant and Equipment:

				December 31, 2003												December 31, 2004
								Accumulated												Accumulated
				Gross Value				Depreciation				Depreciation				Gross Value				Depreciation				Depreciation
				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$
Land					500,019				—				—				500,019				—				—
	Total Land				500,019				—				—				500,019				—				—
Buildings and construction:
Buildings					129,330				(25,150	)			(3,317	)			129,331				(43,311	)			(4,490	)
External Networks					115,016,029				(18,826,777	)			(6,092,788	)			117,426,344				(25,122,856	)			(6,296,079	)
Head Installations					1,611,503				(784,885	)			(102,687	)			1,629,638				(897,113	)			(112,229	)
Equipment Hub					1,709,744				(98,553	)			(44,585	)			1,756,915				(184,391	)			(85,837	)
	Total buildings and construction				118,466,606				(19,735,365	)			(6,243,377	)			120,942,228				(26,247,671	)			(6,498,635	)
Machinery and Equipment					12,044,082				(7,284,298	)			(1,488,070	)			13,453,463				(9,011,896	)			(1,727,597	)
		Total machinery and equipment			12,044,082				(7,284,298	)			(1,488,070	)			13,453,463				(9,011,896	)			(1,727,597	)
Office furniture and fixtures					4,126,938				(2,825,005	)			(502,389	)			4,380,580				(3,281,016	)			(469,760	)
	Total office furniture and fixtures				4,126,938				(2,825,005	)			(502,389	)			4,380,580				(3,281,016	)			(469,760	)
Other property, plant and equipment:
Vehicles					650,300				(451,829	)			(118,173	)			601,342				(492,286	)			(93,794	)
Tools and instruments					156,390				(64,252	)			(27,247	)			170,301				(95,478	)			(31,226	)
Fixed assets in transit					59,838				—				—				—				—				—
Rented office installations					1,225,051				(467,233	)			(72,610	)			1,288,550				(555,756	)			(88,523	)
Cable TV materials					4,255,507				—				—				1,764,499				—				—
Work in progress					1,464,705				—				—				588,888				—				—
Decoding equipment					6,938,997				(3,844,929	)			(1,292,481	)			9,523,417				(5,180,464	)			(1,335,543	)
Leased assets					341,483				(13,744	)			(4,467	)			487,266				(65,203	)			(51,457	)
	Total other property, plant and equipment				15,092,271				(4,841,987	)			(1,514,978	)			14,424,263				(6,389,187	)			(1,600,543	)
Total property, plant and equipment					150,229,916				(34,686,655	)			(9,748,814	)			153,700,553				(44,929,770	)			(10,296,535	)

Note 9.	Investment in Other Companies:

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		2003				2004
		ThCh$				ThCh$
Bazuca.Com Chile S.A.			157,041				143,819
Internet Holding S.A.			283,560				283,560
Provision			(207,089	)			(202,038	)
Total			233,512				225,341

Note 10.	Goodwill, net:

	2003:

		December 31, 2003
						Accumulated
		Gross Value				Amortization				Net Value
		ThCh$				ThCh$				ThCh$
Metropolis			50,137,914				(30,773,552	)			19,364,362
Goodwill generated from the purchase of CTC stocks			53,086,511				(6,635,814	)			46,450,697
Price-level restatement			1,032,245				(377,274	)			654,971
Amortization			—				(4,279,614	)			(4,279,614	)
Total			104,256,670				(42,066,254	)			62,190,416
Goodwill generated from the purchase of CTC Plataforma Técnica Red Multimedia S.A.			193,133				(24,281	)			168,852
Amortization of CTC			—				(9,518	)			(9,518	)
			193,133				(33,799	)			159,334
Balance as of December 31, 2003			104,449,803				(42,100,053	)			62,349,750

	2004:

		December 31, 2004
						Accumulated
		Gross Value				Amortization				Net Value
		ThCh$				ThCh$				ThCh$
Metropolis			49,404,189				(41,040,248	)			8,363,941
Goodwill generated from the purchase of CTC stocks			52,309,635				—				52,309,635
Price-level restatement			2,542,846				(1,092,511	)			1,450,335
Amortization			—				(4,216,289	)			(4,216,289	)
Total			104,256,670				(46,349,048	)			57,907,622
Goodwill generated from the purchase of CTC Plataforma Técnica Red Multimedia S.A.			193,133				(33,799	)			159,334
Amortization of CTC			—				(9,657	)			(9,657	)
			193,133				(43,456	)			149,677
Balance as of December 31, 2004			104,449,803				(46,392,504	)			58,057,299

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Note 11.	Other Assets:

			2003				2004
			ThCh$				ThCh$
Other investments				2,104				2,084
Rental guarantees				118,168				114,453
Residential cable TV installations				20,390,501				23,352,776
Accumulated amortization of Residential Cable TV installations				(9,830,394	)			(14,082,739	)
Rental hubs, external net				422,779				931,205
Administrative projects-in-progress				34,837				41,520
Other assets				447,431				322,275
	Total			11,585,426				10,682,574

Note 12.	Banks and Financial Institutions:

		Types of currency and readjustment
		U.S. Dollars								UF								TOTAL
Bank or Institution		2003				2004				2003				2004				2003				2004
		ThCh$				ThCh$				ThCh$				ThCh$				ThCh$				ThCh$
Short-term
Banco BCI			—				59,325				—				—				—				59,325
Total			—				59,325				—				—				—				59,325
Total capital owed							59,296																59,296
Annual Average Interest Rate							3.46	%															3.46	%
Current portion of long-term
Banco Santander-Santiago			—				—				3,077,651				3,061,244				3,077,651				3,061,244
Banco BCI			—				—				1,470,568				1,461,600				1,470,568				1,461,600
Banco Estado			—				—				1,541,565				1,532,298				1,541,565				1,532,298
Banco Corpbanca			—				—				1,542,003				1,532,088				1,542,003				1,532,088
Total			—				—				7,631,787				7,587,230				7,631,787				7,587,230
Total Capital owed											7,561,611				7,550,296
Annual Average Interest Rate															3.14	%

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		December 31,
		2003				2004
Total short-term liabilities denominated in foreign currency			0.0	%			0.8	%
Total short-term liabilities denominated in local currency			100.0	%			99.2	%

											December 31,
											2003				December 31, 2004
							Interest				Total Long-																								Total
							rate				term				Due in				Due in				Due in				More than								Long-term
Financial institution			Currency				%				Obligations				1-2 Years				2-3 Years				3-5 Years				5 Years				Maturity				Obligations
											ThCh$				ThCh$				ThCh$				ThCh$				ThCh$								ThCh$
Banco Santander-Santiago				U.F.				3.00%				12,206,882				3,047,154				3,047,154				3,047,155				—				Dec-2008				9,141,463
Banco BCI				U.F.				3.13%				5,825,926				1,454,302				1,454,302				1,454,302				—				Dec-2008				4,362,906
Banco Corpbanca				U.F.				3.13%				6,106,824				1,524,422				1,524,422				1,524,422				—				Dec-2008				4,573,266
Banco Estado				U.F.				3.00%				6,106,810				1,524,418				1,524,418				1,524,418				—				Dec-2008				4,573,254
	Total											30,246,442				7,550,296				7,550,296				7,550,297				—								22,650,889

		December 31,
		2003				2004
Total liabilities denominated in foreign currency			0.0%				0.0%
Total liabilities denominated in local currency			100.0%				100.0%

Note 13.	Accounts Payable:

		2003				2004
		ThCh$				ThCh$
Suppliers			5,501,600				4,778,425
Programming			2,804,636				1,959,010
Fees			5,416				5,920
Other accounts payable			946,747				546,016
Total			9,258,399				7,289,371

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Note 14.	Notes Payable:

		2003				2004
		ThCh$				ThCh$
Uncollected stale dated checks			12,133				12,193
Total			12,133				12,193

Note 15.	Miscellaneous Payables:

		2003				2004
		ThCh$				ThCh$
Telefónica CTC Chile S.A.(1)			219,227				14,496,161
Comunicaciones Intercom S.A.			85,531				—
San Felipe-Los Andes network			724,217				—
Others			12,993				12,273
Total			1,041,968				14,508,434

(1)

On July 30, 2001, in connection with the purchase transaction involving Companía de Telecomunicaciones de Chile S.A. (CTC), the Company entered into a loan agreement with CTC for a total of ThUS$20,000 payable over 5 years with an annual interest rate of 6%. The accounts payable balance resulting from this transaction as of December 31, 2003 was classified as long-term debt and amounted to ThCh$14,761,670. In 2004, the long-term debt was reclassified to short-term and as of December 31, 2004 amounted to ThCh$14,496,161.

								Long-term
Principal				Principal				2003				2004
ThUS$				ThUS$				ThUS$				ThUS$
	20,000				11,146,000				14,761,670				—

Note 16.	Provisions and withholdings:

		2003				2004
		ThUS$				ThUS$
Vacations			487,092				520,943
Audit fees			3,467				3,463
Withholdings			686,627				799,376
Suppliers			89,644				73,945
Others			30,312				34,611
Total			1,297,142				1,432,338

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Note 17.	Unearned Revenues:

Note 18.	Other Current Liabilities:

		2003				2004
		ThCh$				ThCh$
Forward contract rights			(24,573,611	)			(7,246,200	)
Forward contract obligations			29,927,432				8,108,271
Deferred loss from forward contract			(949,758	)			—
Deferred interest from forward contract			(484,948	)			(47,803	)
Deferred interest amortization from forward contract			373,629				27,751
Total			4,292,744				842,019

Financial										Deferred
Institution		Amount in US$				Maturity		Rate		Income (loss)				Net income
										Th$				Th$
BCI			250,000			01-06-04		2.13%			—			(33,683)
SECURITY			1,000,000			01-02-04		1.61%			—			(139,949)
SECURITY			500,000			01-02-04		1.26%			—			(68,700)
SECURITY			500,000			01-02-04		1.17%			—			(68,344)
SECURITY			1,000,000			01-05-04		0.97%			—			(132,126)
SECURITY			250,000			01-05-04		1.41%			—			(33,840)
SECURITY			250,000			01-06-04		2.27%			—			(33,935)
SECURITY			250,000			01-06-04		2.04%			—			(33,251)
CORPBANCA			500,000			01-06-04		1.07%			—			(66,406)
CORPBANCA			250,000			01-06-04		1.45%			—			(33,909)
CORPBANCA			250,000			01-06-04		2.10%			—			(33,620)
BCI			500,000			01-30-04		1.50%			—			(78,147)
SECURITY			500,000			01-31-04		0.00%			—			(83,896)
SECURITY			500,000			02-01-04		3.10%			—			(82,045)

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Financial										Deferred
Institution		Amount in US$				Maturity		Rate		Income (loss)				Net income
										Th$				Th$
SECURITY			500,000			02-02-04		1.76%			—			(83,447)
SECURITY			500,000			02-03-04		1.75%			—			(83,401)
SECURITY			500,000			02-04-04		1.71%			—			(83,262)
SECURITY			500,000			02-05-04		1.78%			—			(83,494)
SECURITY			500,000			02-06-04		1.68%			—			(83,170)
SECURITY			1,000,000			02-07-04		2.33%			—			(168,878)
SECURITY			500,000			02-08-04		1.48%			—			(86,718)
CORPBANCA			500,000			02-09-04		2.48%			—			(82,931)
CORPBANCA			500,000			02-10-04		2.30%			—			(82,282)
CORPBANCA			500,000			02-11-04		2.81%			—			(84,066)
BCI			500,000			02-12-04		2.52%			—			(87,201)
BCI			500,000			02-13-04		2.67%			—			(87,669)
BCI			500,000			02-14-04		2.55%			—			(87,286)
BCI			250,000			02-15-04		2.64%			—			(43,792)
SECURITY			500,000			02-16-04		2.32%			—			(86,720)
SECURITY			500,000			02-17-04		0.87%			(81,781	)		—
SECURITY			500,000			02-18-04		0.75%			—			(78,310)
SECURITY			500,000			02-19-04		1.08%			(74,423	)		—
BCI			550,000			02-20-04		1.53%			—			(76,646)
BCI			500,000			02-21-04		1.49%			—			(69,565)
BCI			500,000			02-22-04		1.47%			—			(69,527)
BCI			250,000			02-23-04		2.43%			—			(35,358)
BCI			250,000			02-24-04		2.23%			—			(35,084)
BCI			500,000			02-25-04		2.43%			—			(70,716)
BCI			1,000,000			02-26-04		2.23%			—			(140,316)
BCI			1,000,000			02-27-04		2.09%			—			(139,550)
BCI			500,000			02-28-04		2.05%			—			(69,660)
BCI			500,000			02-29-04		2.20%			—			(70,082)
SECURITY			600,000			03-01-04		0.72%			—			(86,075)
SECURITY			2,500,000			03-02-04		1.74%			—			(351,342)
SECURITY			750,000			03-03-04		1.53%			(102,090	)		—
SECURITY			750,000			03-04-04		1.12%			(98,624	)		—
CORPBANCA			450,000			03-05-04		1.52%			—			(62,693)
SECURITY			3,000,000			03-06-04		1.76%			—			(354,082)
SECURITY			1,000,000			03-07-04		2.48%			—			(120,464)
SECURITY			500,000			03-08-04		2.48%			—			(60,232)
SECURITY			500,000			03-09-04		2.43%			—			(60,122)
SECURITY			1,000,000			03-10-04		1.69%			—			(118,089)
CORPBANCA			750,000			03-11-04		2.13%			(94,050	)		—
ESTADO			750,000			03-12-04		2.00%			(90,699	)		—
ESTADO			750,000			03-13-04		1.98%			(90,632	)		—
ESTADO			300,000			03-14-04		1.76%			(38,305	)		—
ESTADO			200,000			03-15-04		1.69%			(25,500	)		—
ESTADO			250,000			03-16-04		1.53%			(31,748	)		—
ESTADO			500,000			03-17-04		1.38%			(62,029	)		—
ESTADO			500,000			03-18-04		1.23%			(61,805	)		—
ESTADO			500,000			03-19-04		0.75%			(51,336	)		—

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Financial										Deferred
Institution		Amount in US$				Maturity		Rate		Income (loss)				Net income
										Th$				Th$
ESTADO			500,000			03-20-04		0.69%			(46,736	)		—
Subtotal			37,350,000								(949,758	)		(4,304,081)
ESTADO			500,000			01-30-04		2.49%			—			1,491
ESTADO			1,500,000			02-27-04		1.58%			—			4,124
ESTADO			1,000,000			01-30-04		0.94%			—			5,722
Subtotal			3,000,000								—			11,337
Total			40,350,000								(949,758	)		(4,292,744)

Financial														Deferred
Institution		Amount in US$				Maturity				Rate				Income (loss)				Net income
														ThCh$				ThCh$
ESTADO			1,125,000				07-01-05				0.70	%			—				(38,369	)
ESTADO			2,250,000				07-01-05				1.11	%			—				(148,894	)
SECURITY			250,000				07-01-05				0.08	%			—				(13,086	)
SECURITY			250,000				07-01-05				(0.11	)%			—				(12,862	)
SECURITY			250,000				07-01-05				0.04	%			—				(12,120	)
SECURITY			375,000				07-01-05				0.43	%			—				(25,970	)
ESTADO			300,000				07-01-05				(0.40	)%			—				(17,142	)
ESTADO			500,000				07-01-05				(0.14	)%			—				(25,657	)
ESTADO			1,000,000				07-01-05				0.13	%			—				(48,896	)
ESTADO			375,000				07-01-05				0.20	%			—				(25,604	)
ESTADO			1,125,000				07-01-05				0.24	%			—				(77,164	)
SECURITY			1,125,000				07-01-05				0.27	%			—				(77,325	)
ESTADO			500,000				07-01-05				1.10	%			—				(39,535	)
ESTADO			1,000,000				07-01-05				1.45	%			—				(80,367	)
ESTADO			750,000				07-01-05				0.11	%			—				(59,660	)
ESTADO			825,000				07-01-05				1.00	%			—				(69,043	)
SECURITY			1,000,000				07-01-05				(0.57	)%			—				(70,325	)
Total			13,000,000												—				(842,019	)

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		Paid-in				Price-level				Accumulated				Net loss
		Capital				restatement				Deficit				for the year				Total
		ThCh$				ThCh$				ThCh$				ThCh$				ThCh$
Balance as of January 1, 2002			193,063,828				1,737,575				(24,279,630	)			(13,997,522	)			156,524,251
Reclassification of prior year net loss			—				—				(13,997,522	)			13,997,522				—
Price-level restatement			5,791,915				52,126				(1,148,315	)			—				4,695,726
Net loss for the year			—				—				—				(16,961,416	)			(16,961,416	)
Balance as of December 31, 2002			198,855,743				1,789,701				(39,425,467	)			(16,961,416	)			144,258,561
Price-level restatement for comparison purposes			200,844,300				1,807,600				(39,819,722	)			(17,131,030	)			145,701,148
Balance as of January 1, 2003			198,855,743				1,789,701				(39,425,467	)			(16,961,416	)			144,258,561
Reclassification of prior year net loss			—				—				(16,961,416	)			16,961,416				—
Price-level restatement			1,988,557				17,899				(563,869	)			—				1,442,587
Net loss for the year			—				—				—				(13,446,519	)			(13,446,519	)
Balance as of December 31, 2003			200,844,300				1,807,600				(56,950,752	)			(13,446,519	)			132,254,629
Price-level restatement for comparison purposes			205,865,408				1,852,790				(58,374,521	)			(13,782,682	)			135,560,995
Balance as of January 1, 2004			200,844,300				1,807,600				(56,950,752	)			(13,446,519	)			132,254,629
Reclassification of prior year net loss			—				—				(13,446,519	)			13,446,519				—
Price-level restatement			5,021,108				45,190				(1,759,932	)			—				3,306,366
Net loss for the year			—				—				—				(12,725,276	)			(12,725,276	)
Balance as of December 31, 2004			205,865,408				1,852,790				(72,157,203	)			(12,725,276	)			122,835,719

Note 21.	Other non-operating expenses:

		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Disposal of equipment			(811,091	)			(290,492	)			(280,536	)
Write-off of investments			(209,155	)			—				—
Provision for obsolescence			(121,037	)			(144,568	)			—
Other			(426,629	)			(694,183	)			(129,988	)
Total			(1,567,912	)			(1,129,243	)			(410,524	)

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Note 22.	Price-Level Restatement and Foreign Currency Translation:

(a)	Price Level Restatement

		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Shareholders’ equity			(4,885,680	)			(1,486,080	)			(3,322,980	)
Non-monetary assets			6,190,388				1,982,111				4,574,684
Liabilities denominated in foreign currencies			(1,045,644	)			(405,590	)			(832,510	)
Revenue accounts			34,992				(14,631	)			(69,935	)
Price-level restatement, net			294,056				75,810				349,259

(b)	Foreign Currency Translation

			2002				2003				2004
			ThCh$				ThCh$				ThCh$
Non-monetary assets				1,594,773				(5,566,768	)			(1,336,350	)
Non-monetary liabilities				(2,569,681	)			4,270,331				1,123,028
	Net loss for foreign currency translation			(974,908	)			(1,296,437	)			(213,322	)

Note 23.	Board of Directors Compensation:

Note 24.	Contingencies and Commitments:

(a)	Commitments

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(b)	Contingencies

Note 25.	Relevant Events:

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I.	Differences in measurement methods

	(a) Inflation accounting:

	(b) Deferred income taxes:

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(i)	A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax loss carry-forwards.
(ii)	The measurement of deferred tax liabilities and assets is based on the provisions of the enacted tax law. The effects of future changes in tax laws or rates are not anticipated.
(iii)	The measurement of deferred tax assets are reduced by a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized.

	(c) Goodwill:

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		For the Years Ended December 31,
		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Goodwill			104,449,801				104,449,801				104,449,801
Accumulated amortization			(25,926,695	)			(25,926,695	)			(25,926,695	)
Goodwill, net			78,523,106				78,523,106				78,523,106

	(d) Derivative instruments:

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	(e) Depreciation:

	(f) Revenue recognition:

	(g) Investments in marketable securities:

	•	Investments held for trading purposes
	•	Investments available-for-sale

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	•	Investments held to maturity

	(h) Issuance of shares in subsidiary:

	(i) Effect of minority interests on U.S. GAAP adjustments:

	(j) Effect of conforming net loss and shareholders’ equity to U.S. GAAP:

		For the Year Ended December 31,
		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Net loss in accordance with Chilean GAAP			(17,559,306	)			(13,782,682	)			(12,725,276	)
Deferred taxes (paragraph b)			(2,023,771	)			(1,042,069	)			(1,124,442	)
Amortization of goodwill (paragraph c)			4,269,791				4,289,132				4,225,945
Derivative instruments (paragraph d)			153,218				(1,155,215	)			1,039,953
Depreciation (paragraph e)			(1,254,758	)			(1,531,846	)			(742,030	)
Issuance of subsidiaries shares (paragraph h)			—				(18,665	)			(73,721	)
Effect of minority interests on U.S. GAAP adjustments (paragraph i)			—				309,040				82,970
Net loss and comprehensive loss in accordance with U.S. GAAP			(16,414,826	)			(12,932,305	)			(9,316,601	)

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		As of December 31,
		2003				2004
		ThCh$				ThCh$
Shareholders’ equity, in accordance with Chilean GAAP			135,560,995				122,835,719
Deferred income taxes (paragraph b)			(3,225,187	)			(4,349,629	)
Effect in amortization of goodwill (paragraph c)			16,239,862				20,465,806
Derivative instruments (paragraph d)			(998,224	)			41,729
Depreciation (paragraph e)			(4,320,097	)			(5,062,127	)
Issuance of subsidiary shares (paragraph h)			(972,327	)			(1,046,048	)
Effect of minority interests on U.S. GAAP adjustments (paragraph i)			309,039				392,010
Shareholders’ equity, in accordance with U.S. GAAP			142,594,061				133,277,460

		For the Year Ended December 31,
		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Balance as of January 1			172,894,854				156,480,028				142,594,061
Issuance of subsidiary shares (paragraph h)			—				(953,662	)			—
Net loss and comprehensive loss in accordance with U.S. GAAP			(16,414,826	)			(12,932,305	)			(9,316,601	)
Balance as of December 31			156,480,028				142,594,061				133,277,460

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	II.     Additional disclosure requirements

	(a) Income taxes:

			2003				2004
			ThCh$				ThCh$
Deferred Tax Assets
Allowance for doubtful debts				1,105,571				1,247,088
Goods and services provision				16,665				35,240
Assets provision				—				—
Unearned revenues				182,172				146,889
Vacation provision				71,294				76,204
Forward contract				169,698				(7,094	)
Tax loss carry-forwards				14,755,016				15,898,544
Trademarks				—				—
Assets provision				308,839				348,334
Leasing				58,022				61,298
Trademark rights				2,424				2,836
Accumulated depreciation				738,046				864,735
	Total deferred tax assets			17,407,747				18,674,074
Deferred Tax Liabilities
Forward contracts				(161,459	)			—
Leasing operations				(65,889	)			(71,751	)
Accumulated depreciation				(2,294,439	)			(2,141,979	)
Goodwill				(4,972,368	)			(4,933,213	)
Software				(289,160	)			(260,283	)
Rented installations				(128,829	)			(124,575	)
	Total deferred tax liabilities			(7,912,144	)			(7,531,801	)
Net deferred tax asset (liability) before valuation allowance				9,495,603				11,142,273
Valuation allowance				(6,362,054	)			(7,465,323	)
Net deferred tax asset (liability)				3,133,549				3,676,950

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		2003				2004
		ThCh$				ThCh$
Short-term			1,383,942				1,498,327
Long-term			8,111,661				9,643,946
Net deferred tax liabilities			9,495,603				11,142,273

		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Deferred income tax benefit, Chile GAAP — Note 6			2,449,618				2,088,982				1,820,722
Additional deferred tax adjustment, U.S. GAAP, net			(2,023,771	)			(1,042,069	)			(1,124,442	)
Deferred income tax benefit under U.S. GAAP			425,847				1,046,913				696,280

	Permanent differences

	(b) Foreign currency forward contract capacity:

	(c) Lease agreements:

			Capital
			ThCh$
2005				51,070
2006				32,518
2007				29,808
2008				32,518
Thereafter				230,354
	Total future minimum lease payments			376,268
Interest				(99,603	)
	Present value of net minimum lease payments			276,665

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		2003				2004
Short-term			38,625				94,313
Long-term			278,357				275,519

	(d) Advertising costs:

	(e) Reclassification differences between Chilean GAAP and U.S. GAAP:

		Year Ended December 31, 2002
		Chilean								U.S. GAAP
		GAAP				Reclassification				Presentation
		ThCh$				ThCh$				ThCh$
Operating loss			(11,641,140	)			(5,286,981	)			(16,928,121	)
Non-operating expenses			(8,456,463	)			5,286,981				(3,169,482	)

		Year Ended December 31, 2003
		Chilean								U.S. GAAP
		GAAP				Reclassification				Presentation
		ThCh$				ThCh$				ThCh$
Operating loss			(7,214,820	)			(4,894,029	)			(12,108,849	)
Non-operating expenses			(8,823,391	)			4,894,029				(3,929,362	)

		Year Ended December 31, 2004
		Chilean								U.S. GAAP
		GAAP				Reclassification				Presentation
		ThCh$				ThCh$				ThCh$
Operating loss			(8,645,859	)			(4,220,459	)			(12,866,318	)
Non-operating expenses			(6,360,795	)			4,220,459				(2,140,336	)

Year Ended December 31, 2003

Chilean

U.S. GAAP

GAAP

Reclassification

Presentation

ThCh$

ThCh$

ThCh$

Total current assets

15,167,731

949,757

16,117,488

Total current liabilities

25,185,654

949,757

24,235,897

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Year Ended December 31, 2004

Chilean

U.S. GAAP

GAAP

Reclassification

Presentation

ThCh$

ThCh$

ThCh$

Total current liabilities

44,305,345

22,650,889

66,956,234

Total long-term liabilities

28,254,037

(22,650,889

)

5,603,148

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	(f) Condensed balance sheet and income statement in accordance to US GAAP:

				2003				2004
				ThCh$				ThCh$
ASSETS
Current Assets
Cash and equivalents					7,146,955				4,245,184
Receivables					5,579,591				3,792,128
Other current assets					3,390,942				2,216,252
Total current assets					16,117,488				10,253,564
PROPERTY, PLANT AND EQUIPMENT
PP&E					150,229,916				153,700,553
Accumulated depreciation					(39,006,752	)			(49,991,897	)
Property, plant and equipment, net					111,223,164				103,708,656
OTHER ASSETS
Goodwill					78,523,106				78,523,106
Other long-term assets					18,551,666				17,641,457
Total other assets					97,074,772				96,164,563
		Total assets			224,415,424				210,126,783
LIABILITIES
CURRENT-TERM LIABILITIES
Banks and financial inst.					7,631,787				30,297,444
Payables					11,065,525				33,703,746
Other					8,266,625				2,920,409
Total current-term liabilities					26,963,937				66,921,599
LONG-TERM LIABILITIES
Banks and financial inst					30,246,442				—
Other					18,342,079				4,202,444
Total long-term liabilities					48,588,521				4,202,444
Minority interest					6,268,905				5,725,280
SHAREHOLDERS’ EQUITY
Shareholders’ equity					155,526,366				142,594,061
Net loss					(12,932,305	)			(9,316,601	)
Total shareholders’ equity					142,594,061				133,277,460
	Total Liabilities and shareholders’ equity				224,415,424				210,126,783

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		2002				2003				2004
		ThCh$				ThCh$				ThCh$
OPERATING INCOME
Operating revenues			47,911,196				46,100,072				45,547,636
Operating costs			(46,358,310	)			(41,389,764	)			(40,601,181	)
Operating margin			1,552,886				4,710,308				4,946,455
Administrative and selling expenses			(15,958,113	)			(14,279,993	)			(14,328,858	)
Operating loss			(14,405,227	)			(9,569,685	)			(9,382,403	)
NON-OPERATING INCOME
Financial income (expenses)			(2,058,538	)			(2,490,613	)			(2,276,273	)
Other non-operating income			153,218				—				1,039,953
Other non-operating expense			—				(1,173,880	)			(73,721	)
Goodwill amortization			62,047				—				—
Price-level restatement and Foreign currency translation			(680,852	)			(1,220,627	)			135,937
Non-operating loss			(2,524,125	)			(4,885,120	)			(1,174,104	)
Loss before taxes and minority interest			(16,929,352	)			(14,454,805	)			(10,556,507	)
Tax benefit			425,847				1,046,913				696,280
Minority interest			88,679				475,587				543,626
Net loss for the year			(16,414,826	)			(12,932,305	)			(9,316,601	)

	(g) Estimated fair value of financial instruments and derivative financial instruments:

	•	The data excludes non-financial assets and liabilities, such as property, plant and equipment, and goodwill.
	•	While the data represents management’s best estimates, the data is subjective and involves significant estimates regarding current economic and market conditions and risk characteristics.

	•	Cash and cash equivalents approximate fair value because of the short-term maturity of these instruments.
	•	For current liabilities that are contracted at variable interest rates, the book value is considered to be equivalent to their fair value.
	•	For interest-bearing liabilities with an original contractual maturity of greater than one year, the fair values are calculated by discounting contractual cash flows at current market origination rates with similar terms.

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		December 31,
		2003								2004
		Chilean								Chilean
		GAAP								GAAP
		Carrying				Estimated				Carrying				Estimated
		Amount				Fair Value				Amount				Fair Value
		ThCh$								ThCh$
Assets
Cash and cash equivalents			7,146,726				7,146,726				4,245,184				4,245,184
Short-term accounts receivable			2,580,504				2,580,504				2,022,823				2,022,823
Notes receivable			92,652				92,652				114,250				114,250
Miscellaneous receivables			2,673,926				2,673,926				1,426,134				1,426,134
Notes and accounts receivable from related companies			232,509				232,509				228,921				228,921
Liabilities
Short-term bank debt			—				—				(59,325	)			(59,325	)
Current portion of long-term bank debt			(7,631,787	)			(7,631,787	)			(7,587,230	)			(7,587,230	)
Accounts payable			9,258,399				9,258,399				7,289,371				7,289,371
Current notes and accounts payable to related companies			753,025				753,025				11,893,748				11,893,748
Forward contracts			(4,292,744	)			(5,290,969	)			(842,019	)			(800,290	)
Notes payable			(12,133	)			(12,133	)			(12,193	)			(12,193	)
Miscellaneous payables			1,041,968				1,041,968				14,508,434				14,508,434
Long-term bank debt			(30,246,442	)			(30,246,442	)			(22,650,889	)			(22,650,889	)
Long-term notes payable			(14,761,670	)			(14,761,670	)			—				—
Long-term notes and accounts payable to related companies			—				—				872,688				872,688

	(h) Cash and cash equivalents:

	Supplementary Cash flow information:

		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Assets acquired under capital leases			—				—				85,440
Interest paid during the year			(1,500,630	)			(1,852,560	)			(1,268,197	)

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		2002				2003				2004
		ThCh$				ThCh$				ThCh$
Revenues recognized from barter transactions			774,333				725,574				518,338
Expenses recognized from barter transactions			31,593				62,601				24,957

	(i) Defaults:

	(j) Recently issued accounting pronouncement:

	Amendment of Statement 133 on Derivative Instruments and Hedging Activities

IV-204

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	KPMG LLP

IV-205

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Table of Contents

				December 31
				2004				2003
								Unaudited
ASSETS
Current assets:
	Cash and cash equivalents			$	6,947,650			$	12,370,241
	Accounts receivable, net of allowance of doubtful accounts of $2,622,128 and $4,574,337, respectively				25,418,844				22,680,843
	Due from affiliates				747,187				906,469
	Broadcast rights, net				3,405,589				9,837,575
	Prepaid expenses and other current assets				1,796,695				626,730
		Total current assets			38,315,965				46,421,858
Property and equipment, net					631,762				393,835
Other assets					2,180,686				748,268
		Total assets		$	41,128,413			$	47,563,961
LIABILITIES AND MEMBERS’ (DEFICIT) EQUITY
Current liabilities:
	Accounts payable			$	5,581,428			$	8,306,630
	Accrued expenses				5,220,339				5,291,422
	Broadcast rights payable				3,383,745				8,180,097
	Current portion notes payable to members				7,500,000				—
	Due to affiliates				2,280,231				3,183,068
	Income taxes payable				600,000				—
	Deferred revenue				2,990,444				966,669
		Total current liabilities			27,556,187				25,927,886
Notes payable to members					19,700,000				22,745,424
Accrued interest to members					4,768,169				1,684,109
		Total liabilities			52,024,356				50,357,419
Commitments
Members’ deficit					(10,895,943	)			(2,793,458	)
				$	41,128,413			$	47,563,961

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				2004				2003				2002
								Unaudited				Unaudited
Net advertising and subscriber revenue				$	90,804,007			$	80,507,973			$	57,034,958
Sale of broadcast rights					6,772,714				6,001,730				9,427,462
		Total revenue			97,576,721				86,509,703				66,462,420
Cost of revenue					77,724,516				85,118,256				93,859,489
		Gross margin (loss)			19,852,205				1,391,447				(27,397,069	)
Selling, general, and administrative expenses					19,306,028				19,610,630				20,358,515
		Operating income (loss)			546,177				(18,219,183	)			(47,755,584	)
Other income (expense):
	Interest expense				(3,084,060	)			(1,684,109	)			—
	Other income (expense), net				(411,340	)			1,207,027				(487,654	)
		Net loss before income taxes			(2,949,223	)			(18,696,265	)			(48,243,238	)
Income tax expense					(5,121,238	)			(4,173,940	)			(2,870,825	)
		Net loss		$	(8,070,461	)		$	(22,870,205	)		$	(51,114,063	)

IV-207

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								Accumulated
				Members’				other
				capital				comprehensive				Accumulated				Total members’
				contributions				income				deficit				(deficit) equity
Balance at February 5, 2002 (date of merger) (unaudited)				$	31,776,237			$	—			$	—			$	31,776,237
	Capital contributions (unaudited)				33,541,416				—				—				33,541,416
	Net loss (unaudited)				—				—				(51,114,063	)			(51,114,063	)
	Foreign currency translation adjustment (unaudited)				—				3,908,958				—				3,908,958
		Comprehensive loss (unaudited)															(47,205,105	)
Balance at December 31, 2002 (unaudited)					65,317,653				3,908,958				(51,114,063	)			18,112,548
	Capital contributions (unaudited)				4,791,461				—				—				4,791,461
	Net loss (unaudited)				—				—				(22,870,205	)			(22,870,205	)
	Foreign currency translation adjustment (unaudited)				—				(2,827,262	)			—				(2,827,262	)
		Comprehensive loss (unaudited)															(25,697,467	)
Balance at December 31, 2003 (unaudited)					70,109,114				1,081,696				(73,984,268	)			(2,793,458	)
	Net loss				—				—				(8,070,461	)			(8,070,461	)
	Foreign currency translation adjustment				—				(32,024	)			—				(32,024	)
		Comprehensive loss															(8,102,485	)
Balance at December 31, 2004				$	70,109,114			$	1,049,672			$	(82,054,729	)		$	(10,895,943	)

IV-208

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					2004				2003				2002
									Unaudited				Unaudited
Net loss					$	(8,070,461	)		$	(22,870,205	)		$	(51,114,063	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Bad-debt expense					1,868,463				1,687,504				4,790,420
	Equity in earnings of investment, net of amortization					(1,056,361	)			(533,710	)			105,967
	Depreciation and amortization					106,280				19,779				18,483
	Deferred income taxes					—				200,940				(200,940	)
	Changes in operating assets and liabilities:
		Accounts receivable				(5,208,686	)			(2,648,885	)			(16,435,972	)
		Prepaid expense and other assets				(1,352,179	)			(1,057,510	)			4,326,198
		Accounts payable				1,374,325				3,233,976				1,783,825
		Accrued expenses				(1,889,614	)			3,957,291				123,008
		Due from/to affiliates				287,270				(243,651	)			12,120,987
		Accrued interest				3,084,060				1,684,109				—
		Deferred revenue				2,023,775				959,624				(245,037	)
		Broadcast rights				1,632,589				(943,080	)			1,289,674
		Income taxes payable				414,123				71,233				28,987
			Net cash used in operating activities			(6,786,416	)			(16,482,585	)			(43,372,463	)
Cash flows from investing activities:
	Purchases of property and equipment					(581,562	)			(127,330	)			(308,970	)
			Net cash used in investing activities			(581,562	)			(127,330	)			(308,970	)
Cash flows from financing activities:
	Members capital contributions					—				4,791,461				36,957,840
	Proceeds from notes payable from affiliates and members					1,954,576				15,245,424				—
			Net cash provided by financing activities			1,954,576				20,036,885				36,957,840
			Net decrease (increase) in cash and cash equivalents			(5,413,402	)			3,426,970				(6,723,593	)
Cash and cash equivalents, beginning of period						12,370,241				9,283,174				15,495,751
Effect of foreign currency on cash flow						(9,189	)			(339,903	)			511,016
Cash and cash equivalents, end of period					$	6,947,650			$	12,370,241			$	9,283,174
Supplemental information:
	Cash paid for taxes				$	4,644,046			$	4,512,817			$	2,862,867
	Non-cash transactions				$	2,500,000			$	7,500,000			$	—

IV-209

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Table of Contents

(1)	Organization and Nature of Business

(a)	Description of Business

(b)	Basis of Financial Statement Presentation

(2)	Liquidity and Capital Requirements

IV-210

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(3)	Summary of Significant Accounting Policies

(a)	Cash and Cash Equivalents

(b)	Revenue Recognition

			2004				2003				2002
							Unaudited				Unaudited
United States			$	28,351,516			$	24,608,432			$	19,734,131
Latin America				69,225,205				61,901,271				46,728,289
	Total Revenue		$	97,576,721			$	86,509,703			$	66,462,420

(c)	Allowance for Doubtful Accounts Receivable

(d)	Property and Equipment

(e)	Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

IV-211

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(f)	Investments in T&T Sports Marketing Ltd

		2004				2003				2002
		Unaudited				Unaudited				Unaudited
Current assets		$	3,503,653			$	4,077,109			$	6,633,826
Noncurrent assets			20,000				480,000				20,000
Current liabilities			2,247,157				6,834,637				8,270,904
Noncurrent liabilities			—				250,000				3,669,174
Stockholders’ equity			1,276,496				(2,527,528	)			(5,286,252	)
Revenue			39,500,871				37,742,137				37,930,912
Net income			3,804,024				2,758,724				1,478,955

(g)	Income Taxes

IV-212

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(h)	Marketing Costs

(i)	Foreign Currency Translation

(j)	Broadcast Rights

(k)	Comprehensive Income

(l)	Concentration of Credit and Other Risks

(m)	Fair Value of Financial Instruments

(n)	Recent Accounting Pronouncements

IV-213

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(4)	Property and Equipment

			December 31
			2004				2003
							Unaudited
Furniture and fixtures			$	737,372			$	456,727
	Less accumulated depreciation			(105,610	)			(62,892	)
			$	631,762			$	393,835

(5)	Related-Party Transactions

	Fox Sports International

	Torneos y Competencias S.A.

	T&T Sports Marketing Company Ltd

IV-214

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(6)	Income Taxes

			2004				2003				2002
							Unaudited				Unaudited
Current — foreign			$	5,121,238			$	3,973,000			$	3,071,765
Deferred — foreign				—				200,940				(200,940	)
	Total income tax expense		$	5,121,238			$	4,173,940			$	2,870,825

				2004				2003
								Unaudited
Deferred tax assets:
	Accounts receivable, principally due to allowance for doubtful accounts			$	2,359,784			$	2,157,768
	Accrued liabilities				1,332,167				1,872,673
	Other items				3,859				3,858
	Deferred revenues				1,153,928				373,069
	Net operating loss and tax credit carryforwards				17,062,146				17,908,661
		Total deferred tax assets			21,911,884				22,316,029
		Net deferred tax asset before valuation allowance			21,911,884				22,316,029
	Less valuation allowance				(21,911,884	)			(22,316,029	)
		Net deferred tax asset		$	—			$	—

		2004				2003				2002
						Unaudited				Unaudited
Expected income tax benefit		$	(1,032,228	)		$	(6,543,693	)		$	(16,885,533	)
State income taxes			(21,731	)			(305,443	)			(1,345,215	)
Meals & entertainment			159,270				61,011				58,450
Devaluation reserve			412,300				(225,400	)			1,400,000
Impact of LLC status			1,217,946				1,184,152				856,488
Changes in valuation allowance			(404,074	)			6,359,093				15,956,935
Foreign income taxes			4,521,000				3,973,000				2,726,000
Differential in tax rates			350,730				348,120				(109,800	)
Flow through of income/loss from deemed foreign income			(681,975	)			(676,900	)			213,500
Miscellaneous other			600,000				—				—
		$	5,121,238			$	4,173,940			$	2,870,825

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(6)	Notes Payable to Members

Senior promissory notes with due dates beginning on April 28, 2005, bearing interest at an annual rate of 8%			$	10,000,000
Subordinated Convertible Credit Agreement due March 1, 2009, bearing interest at an annual rate of 12%				17,200,000
			$	27,200,000
	Current portion of notes payable to members			7,500,000
			$	19,700,000

2005		$	7,500,000
2006			2,500,000
2007			—
2008			—
2009			17,200,000
		$	27,200,000

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(7)	Members’ Equity

		Percentage
Member		ownership
Pan American Sports Enterprises, Co.			52	%
FSI SPV, Inc.			38
Liberty Finance, LLC			10
			100	%

(8)	Commitments

2005		$	55,078,437
2006			53,232,500
2007			40,369,324
2008			39,002,000
2009			39,002,000
Thereafter			39,002,000
		$	265,686,261

(9)	Event Subsequent to Date of Report of Independent Registered Public Accounting Firm (Unaudited)

IV-217

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Exhibit
No.				Description
2 — Plan of Acquisition Reorganization, Arrangement, Liquidation or Succession:
	2.1			Agreement and Plan of Merger, dated as of January 17, 2005, among the Registrant (fka New Cheetah, Inc.), Liberty Media International, Inc. (LMI), UnitedGlobalCom, Inc. (UGC), Cheetah Acquisition Corp. and Tiger Global Acquisition Corp. (incorporated by reference to Exhibit 2.1 to LMI’s Current Report on Form 8-K, dated January 17, 2005 (File No. 000-50671))
3 — Articles of Incorporation and Bylaws:
	3.1			Restated Certificate of Incorporation of the Registrant, dated June 15, 2005 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, dated June 15, 2005 (File No. 000-51360) (the Merger 8-K))
	3.2			Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Merger 8-K)
4 — Instruments Defining the Rights of Securities Holders, including Indentures:
	4.1			Specimen certificate for shares of the Registrant’s Series A common stock, par value $.01 per share (incorporated by reference to Exhibit 4.1 to the Merger 8-K)
	4.2			Specimen certificate for shares of the Registrant’s Series B common stock, par value $.01 per share (incorporated by reference to Exhibit 4.2 to the Merger 8-K)
	4.3			Specimen certificate for shares of the Registrant’s Series C Common Stock, par value $.01 per share (incorporated by reference to Exhibit 3 to the Registrant’s Registration Statement on Form 8-A, dated August 24, 2005 (File No. 000-51360))
	4.4			Amendment and Restatement Agreement, dated March 7, 2005, among UPC Broadband Holding B.V. (UPC Broadband) and UPC Financing Partnership (UPC Financing), as Borrowers, the guarantors listed therein, and TD Bank Europe Limited, as Facility Agent and Security Agent, including as Schedule 3 thereto the Restated €1,072,000,000 Senior Secured Credit Facility, originally dated January 16, 2004, among UPC Broadband, as Borrower, the guarantors listed therein, the banks and financial institutions listed therein as Initial Facility D Lenders, TD Bank Europe Limited, as Facility Agent and Security Agent, and the facility agents under the Existing Facility (as defined therein) (the 2004 Credit Agreement) (incorporated by reference to Exhibit 10.32 to UGC’s Annual Report on Form 10-K, dated March 14, 2005 (File No. 000-49658) (the UGC 2004 10-K))
	4.5			Additional Facility Accession Agreement, dated June 24, 2004, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility E Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.2 to UGC’s Current Report on Form 8-K, dated June 29, 2004 (File No. 000-49658))
	4.6			Additional Facility Accession Agreement, dated December 2, 2004, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility F Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.1 to UGC’s Current Report on Form 8-K, dated December 2, 2004 (File No. 000-49658))
	4.7			Additional Facility Accession Agreement, dated March 9, 2005, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility G Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.39 to the UGC 2004 10-K)
	4.8			Additional Facility Accession Agreement, dated March 7, 2005, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility H Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.40 to the UGC 2004 10-K)
	4.9			Additional Facility Accession Agreement, dated March 9, 2005, among UPC Broadband, as Borrower, TD Bank Europe Limited, as Facility Agent and Security Agent, and the banks and financial institutions listed therein as Additional Facility I Lenders, under the 2004 Credit Agreement (incorporated by reference to Exhibit 10.41 to the UGC 2004 10-K)

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Table of Contents

Exhibit
No.				Description
	4.10			Amendment and Restatement Agreement, dated March 7, 2005, among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, TD Bank Europe Limited and Toronto Dominion (Texas), Inc., as Facility Agents, and TD Bank Europe Limited, as Security Agent, including as Schedule 3 thereto the Restated Credit Agreement, €3,500,000,000 and US$347,500,000 and €95,000,000 Senior Secured Credit Facility, originally dated October 26, 2000 (the October 2000 Senior Secured Credit Facility), among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, the Lead Arrangers listed therein, the banks and financial institutions listed therein as Original Lenders, TD Bank Europe Limited and Toronto-Dominion (Texas) Inc., as Facility Agents, and TD Bank Europe Limited, as Security Agent (incorporated by reference to Exhibit 10.33 to the UGC 2004 10-K)
	4.11			Amendment, dated December 15, 2005, among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, and Toronto-Dominion (Texas) LLC, as Facility Agent, to the October 2000 Senior Secured Credit Facility (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, dated December 15, 2005 (File No. 000-51360) (the Credit Facility 8-K))
	4.12			Amendment, dated December 15, 2005, among UPC Broadband and UPC Financing, as Borrowers, the guarantors listed therein, and Toronto-Dominion (Texas) LLC, as Facility Agent, to the 2004 Credit Agreement (incorporated by reference to Exhibit 4.3 to the Credit Facility 8-K)
	4.13			The Registrant undertakes to furnish to the Securities and Exchange Commission, upon request, a copy of all instruments with respect to long-term debt not filed herewith.
10 — Material Contracts:
	10.1			Liberty Global, Inc. 2005 Incentive Plan (As Amended and Restated Effective March 8, 2006) (the Incentive Plan)*
	10.2			Form of the Non-Qualified Stock Option Agreement under the Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, dated August 15, 2005 (File No. 000-51360) (the Incentive Plan 8-K))
	10.3			Form of Stock Appreciation Rights Agreement under the Incentive Plan (incorporated by reference to Exhibit 99.2 to the Incentive Plan 8-K)
	10.4			Form of Restricted Shares Agreement under the Incentive Plan (incorporated by reference to Exhibit 99.3 to the Incentive Plan 8-K)
	10.5			Non-Qualified Stock Option Agreement, dated as of June 7, 2004, between John C. Malone and the Registrant (as assignee of LMI) under the Incentive Plan (the Malone Award Agreement) (incorporated by reference to Exhibit 7(A) to Mr. Malone’s Schedule 13D/ A (Amendment No. 1) with respect to the LMI’s common stock, dated July 14, 2004 (File No. 005-79904))
	10.6			Form of Amendment to the Malone Award Agreement (incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, dated December 22, 2005 (File No. 000-51360) (the 409A 8-K))
	10.7			Liberty Global, Inc. 2005 Nonemployee Director Incentive Plan (As Amended and Restated Effective March 8, 2006) (the Director Plan)*
	10.8			Form of Non-Qualified Stock Option Agreement under the Director Plan (incorporated by reference to Exhibit 10.3 to the Merger 8-K)
	10.9			Liberty Global, Inc. Compensation Policy for Nonemployee Directors (As Amended and Restated Effective March 8, 2006)*
	10.10			Liberty Media International, Inc. Transitional Stock Adjustment Plan (the Transitional Plan) (incorporated by reference to Exhibit 4.5 to LMI’s Registration Statement on Form S-8, dated June 23, 2004 (File No. 333-116790))
	10.11			Form of Non-Qualified Stock Option Exercise Price Amendment under the Transitional Plan (incorporated by reference to Exhibit 99.1 to the 409A 8-K)
	10.12			Form of Non-Qualified Stock Option Amendment under the Transitional Plan (incorporated by reference to Exhibit 99.2 to the 409A 8-K)

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Table of Contents

Exhibit
No.				Description
	10.13			UnitedGlobalCom, Inc. Equity Incentive Plan (amended and restated effective October 17, 2003) (incorporated by reference to Exhibit 10.9 to UGC’s Annual Report on Form 10-K, dated March 15, 2004 (File No. 000-49658) (the UGC 2003 10-K))
	10.14			UnitedGlobalCom, Inc. 1993 Stock Option Plan (amended and restated effective January 22, 2004) (incorporated by reference to Exhibit 10.6 to the UGC 2003 10-K)
	10.15			Form of Amendment to Stock Appreciation Rights Agreement under the UnitedGlobalCom, Inc. 2003 Equity Incentive Plan (Amended and Restated October 17, 2003) (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, dated November 30, 2005 (File No. 000-51360))
	10.16			Stock Option Plan for Non-Employee Directors of UGC, effective June 1, 1993, amended and restated as of January 22, 2004 (incorporated by reference to Exhibit 10.7 to the UGC 2003 10-K)
	10.17			Stock Option Plan for Non-Employee Directors of UGC, effective March 20, 1998, amended and restated as of January 22, 2004 (incorporated by reference to Exhibit 10.8 to the UGC 2003 10-K)
	10.18			UIH Latin America, Inc. Stock Option Plan, effective June 6, 1999 (as amended December 6, 2000) (incorporated by reference to Exhibit 10.89 to UGC’s Amendment No. 10 to its Registration Statement on Form S-1 dated December 11, 2003 (File No. 333-82776) (the UGC Form S-1))
	10.19			Form of Indemnification Agreement between the Registrant and its Directors*
	10.20			Form of Indemnification Agreement between the Registrant and its Executive Officers*
	10.21			Personal Usage of Aircraft Policy (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, dated November 15, 2005 (File No. 000-51360) (the Aircraft 8-K))
	10.22			Form of Aircraft Time Sharing Agreement (incorporated by reference to Exhibit 99.2 to the Aircraft 8-K)
	10.23			Executive Service Agreement, dated December 15, 2004, between UPC Services Limited and Charles Bracken (incorporated by reference to Exhibit 10.15 to the UGC 2004 10-K)
	10.24			Employment Agreement, effective April 19, 2000, among UGC, UPC and Gene Musselman (incorporated by reference to Exhibit 10.27 to the UGC 2003 10-K)
	10.25			Addendum to Employment Agreement, dated as of September 3, 2003, among UGC, UPC and Gene Musselman (incorporated by reference to Exhibit 10.28 to the UGC 2003 10-K)
	10.26			Contract Extension Letter dated November 2, 2005, among UGC, UPC and Gene Musselman*
	10.27			Executive Service Agreement dated January 10, 2005, between UPC Services Limited and Shane O’Neill (incorporated by reference to Exhibit 10.16 to the UGC 2004 10-K)
	10.28			Employment Agreement dated January 5, 2004, between the Registrant (as assignee of UGC) and Gene W. Schneider (incorporated by reference to Exhibit 10.5 to UGC’s Current Report on Form 8-K dated January 5, 2004 (File No. 000-49658))
	10.29			Letter from UGC to Gene W. Schneider, dated April 17, 2003 regarding the Split Dollar Life Insurance Agreement referenced in Exhibit 10.29 below (incorporated by reference to Exhibit 10.87 to the UGC Form S-1)
	10.30			Split Dollar Life Insurance Agreement dated February 15, 2001, between UGC and Mark L. Schneider, Tina M. Wildes and Carla Shankle, as trustees under The Gene W. Schneider 2001 Trust, dated February 12, 2001 (incorporated by reference to Exhibit 10.88 to the UGC Form S-1)
	10.31			Amended and Restated Stockholders’ Agreement, dated as of May 21, 2004, among the Registrant, Liberty Media International Holdings, LLC, Robert R. Bennett, Miranda Curtis, Graham Hollis, Yasushige Nishimura, Liberty Jupiter, Inc., and, solely for purposes of Section 9 thereof, Liberty Media Corporation (Liberty Media) (incorporated by reference to Exhibit 10.23 to Amendment No. 1 to LMI’s Registration Statement on Form 10, dated May 25, 2004 (File No. 000-50671) (the Form 10 Amendment))

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Exhibit
No.				Description
	10.32			Reorganization Agreement, dated as of May 20, 2004, among Liberty Media, the Registrant and the other parties named therein (incorporated by reference to Exhibit 2.1 to the Form 10 Amendment)
	10.33			Form of Facilities and Services Agreement between Liberty Media and the Registrant (incorporated by reference to Exhibit 10.3 to the Form 10 Amendment)
	10.34			Agreement for Aircraft Joint Ownership and Management, dated as of May 21, 2004, between Liberty Media and the Registrant (incorporated by reference to Exhibit 10.4 to the Form 10 Amendment)
	10.35			Form of Tax Sharing Agreement between Liberty Media and the Registrant (incorporated by reference to Exhibit 10.5 to the Form 10 Amendment)
	10.36			Form of Credit Facility between Liberty Media and the Registrant (terminated in accordance with its terms) (incorporated by reference to Exhibit 10.6 to the Form 10 Amendment)
	10.37			Stock and Loan Purchase Agreement, dated as of March 15, 2004, among Suez SA, MédiaRéseaux SA, UPC France Holding BV and UGC (incorporated by reference to Exhibit 10.1 to UGC’s Current Report on Form 8-K, dated July 1, 2004 (File No. 000-49658) (the UGC July 2004 8-K))
	10.38			Amendment to the Purchase Agreement, dated as of July 1, 2004, among Suez SA, MédiaRéseaux SA, UPC France Holding BV and UGC (incorporated by reference to Exhibit 10.2 to the UGC July 2004 8-K)
	10.39			Shareholders Agreement, dated as of July 1, 2004, among UGC, UPC France Holding BV and Suez SA (incorporated by reference to Exhibit 10.3 to the UGC July 2004 8-K)
	10.40			Amended and Restated Operating Agreement dated November 26, 2004, among Liberty Japan, Inc., Liberty Japan II, Inc., LMI Holdings Japan, LLC, Liberty Kanto, Inc., Liberty Jupiter, Inc. and Sumitomo Corporation, and, solely with respect to Sections 3.1(c), 3.1(d) and 16.22 thereof, the Registrant (incorporated by reference to Exhibit 10.27 of LMI’s Annual Report on Form 10-K, dated March 14, 2005 (File No. 000-50671))
	10.41			Share Purchase Agreement, dated September 30, 2005, between Glacier Holdings S.C.A. and United ACM Holdings, Inc. (the Cablecom Agreement) (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, dated September 30, 2005 (File No. 000-51360) (the Cablecom 8-K))
	10.43			Excerpts from Schedule 4.6 to the Cablecom Agreement (incorporated by reference to Exhibit 2.2 to the Cablecom 8-K)
	10.44			Deed, dated September 30, 2005, between LMI and Glacier Holdings S.C.A. (incorporated by reference to Exhibit 99.1 to the Cablecom 8-K)
21 — Subsidiaries of Registrant*
23 — Consent of Experts and Counsel:
	23.1			Consent of KPMG LLP*
	23.2			Consent of KPMG AZSA & Co.*
	23.3			Consent of KPMG AZSA & Co.*
	23.4			Consent of Finsterbusch Pickenhayn Sibille*
	23.5			Consent of KPMG LLP*
	23.6			Information re: Absence of Consent of Arthur Andersen LLP*
	23.7			Consent of Ernst & Young LTDA.*
	23.8			Consent of KPMG LLP*

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Exhibit
No.				Description
31 — Rule 13a-14(a)/15d-14(a) Certification:
	31.1			Certification of President and Chief Executive Officer*
	31.2			Certification of Senior Vice President and Co-Chief Financial Officer (Principal Financial Officer)*
	31.3			Certification of Senior Vice President and Co-Chief Financial Officer (Principal Accounting Officer)*
32 — Section 1350 Certification*

*	Filed herewith