UGC, UPC Report Improved Results

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UnitedGlobalCom Inc. and United Pan-Europe Communications N.V. (UPC) both reported strong third-quarter earnings Thursday.

UGC, the largest shareholder of UPC, reported record EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter of $84.8 million, a big jump from the negative $41.8 million EBITDA reported in the same quarter in 2001.

UGC saw its revenues and cable-television subscribers decline because of its decision to remove certain assets, such as Austar United Communications Ltd. in Australia and UPC's German investments, from its consolidated balance sheets.

Even so, the company managed to boost its voice and Internet subscribers and its triple-play revenues.

UPC also saw general improvement across the board thanks in part to the company's cost-cutting moves in the past year.

When adjusted for the removal of Polish and German operators from its balance sheet, overall revenues, triple-play revenues, aggregate revenue-paying units and EBITDA all increased from the third quarter of 2001. Cable subscribers hit 6.6 million, digital subscribers rose to 124,000, telephony homes grew to 465,000 and Internet subscribers hit 627,000.

The quarter also marked the first time UPC's Priority Telecom and UPC Media divisions reported positive EBITDA. Overall, UPC's EBITDA hit 115 million euros ($111 million), up from a negative EBITDA of 37 million euros ($36 million) a year ago.

During the earnings calls, UPC and UGC executives said they expected the restructuring of UPC to be completed in the first quarter of 2003.

"We've taken very significant steps in the past year to put our business on a much stronger financial and operating group," UGC chairman and CEO Gene Schneider said during the earnings call.

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