UNITED STATES SECURITIES and EXCHANGE COMMISSION FORM 10-K Unitedglobalcom, Inc
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Use these links to rapidly review the document TABLE OF CONTENTS INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FISCAL YEAR ENDED DECEMBER 31, 2001 or o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 000-496-58 UnitedGlobalCom, Inc. (formerly known as New UnitedGlobalCom, Inc.) (Exact name of Registrant as specified in its charter) State of Delaware 84-1602895 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4643 South Ulster Street, Suite 1300 Denver, CO 80237 (address of principle executive offices) Registrant's telephone number, including area code: (303) 770-4001 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, par value $0.01 per share Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes o No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by reference to the last sales price of such stock, as of the close of trading on April 10, 2002, was approximately $561.6 million. The number of shares outstanding of the Registrant's common stock as of April 10, 2002 was: Class A common stock – 109,670,878 shares of a total authorized of 1,000,000,000 Class B common stock – 8,870,332 shares of a total authorized of 1,000,000,000 Class C common stock – 303,123,542 shares of a total authorized of 400,000,000 TABLE OF CONTENTS PART I Item 1. Business Item 2. Properties Item 3. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure PART III Item 10. Directors and Executive Officers of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K i PART I ITEM 1. BUSINESS (a) General Development of Business UnitedGlobalCom, Inc. was formed under Delaware law on February 5, 2001, to effectuate the merger on January 30, 2002 with UGC Holdings, Inc. We refer to this merger and related restructuring transaction as the "merger transaction". Stockholders of UGC Holdings, Inc. became our stockholders as a result of the merger transaction. We now own a 99.5% economic interest, 50.0% voting interest in the election of directors and 99.5% voting interest in other matters in UGC Holdings, Inc. Immediately following the merger transaction, we changed our name to "UnitedGlobalCom, Inc." from "New UnitedGlobalCom, Inc." and UGC Holdings, Inc. changed its name to "UGC Holdings, Inc." from "UnitedGlobalCom, Inc." When we use the terms "we", "us", "our" or similar terms, or the term "United", we refer to UnitedGlobalCom, Inc. and, where appropriate, to UGC Holdings, Inc., or "UGC Holdings". Risks, Uncertainties and Liquidity Each of our major operating subsidiaries has net working capital deficiencies as a result of recurring losses from operations and defaults under certain bank credit facilities, senior notes and senior discount note agreements, summarized as follows: • UGC Holdings' 53.1%-owned European operating company, United Pan-Europe Communications, N.V. ("UPC"), determined that it would not make interest payments on certain of its senior notes as they fell due on February 1, 2002, which constituted an event of default under the indentures related to such notes. The occurrence of these events of default constituted cross events of default under the indentures related to the remaining series of senior notes, senior discount notes and certain of UPC's bank facilities, raising substantial doubt about its ability to continue as a going concern. • UGC Holdings' 100%-owned Chilean operating company, VTR GlobalCom S.A. ("VTR"), does not have sufficient operating cash flow to service its indebtedness over the next year, raising substantial doubt about its ability to continue as a going concern. VTR's ability to continue as a going concern is dependent on a successful refinancing of its $176.0 million bank facility that is due April 29, 2002. • UGC Holdings' 50.0%-owned holding company, United Australia/Pacific, Inc. ("UAP"), failed to make the required interest payment due November 15, 2001 on its senior discount notes, and failed to cure this event of default. UAP's working capital and projected operating cash flow are not sufficient to fund its expected expenditures and repay the UAP notes over the next year, raising substantial doubt about its ability to continue as a going concern. On March 29, 2002, voluntary and involuntary petitions were filed under Chapter 11 of the United States Bankruptcy Code with respect to UAP. • UAP's majority-owned operating subsidiary, Austar United Communications Limited, ("Austar United"), has a net working capital deficiency and its projected cash flows are insufficient to fund its expected expenditures and pay its liabilities when due over the next year, raising substantial doubt about its ability to continue as a going concern. Based on the above events, there is substantial doubt about UGC Holdings' ability to continue as a going concern. For further discussion see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources, included elsewhere herein. 1 Merger Transaction Immediately prior to the merger transaction on January 30, 2002: • Liberty Media Corporation and certain of its affiliates, or "Liberty", contributed approximately 9.9 million shares of UGC Holdings Class B common stock and approximately 12.0 million shares of UGC Holdings Class A common stock to United. In exchange for these contributions, we issued Liberty approximately 21.9 million shares of our Class C common stock; • Certain long-term stockholders of UGC Holdings (the "Founders") transferred their shares of UGC Holdings Class B common stock to limited liability companies, which limited liability companies then merged into United. 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 UGC Holdings Class B common stock transferred by them to the limited liability companies. As a result of the merger transaction: • UGC Holdings became our 99.5%-owned subsidiary; • Each share of UGC Holdings' 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 UGC Holdings' preferred stock outstanding immediately prior to the merger, other than UGC Holdings' Series E preferred stock, 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 UGC Holdings' Class A common stock the holders of UGC Holdings' preferred stock would have received had they converted their preferred stock immediately prior to the merger; • The shares of UGC Holdings' Series E preferred stock outstanding immediately prior to the merger were converted into an aggregate of 1,500 shares of UGC Holdings' Class A common stock; • Liberty has the right to elect four of our 12 directors; • The Founders have the effective voting power to elect eight of our 12 directors; and • We have the right to elect half of UGC Holdings' directors and four of the Founders, Gene W. Schneider, Mark L. Schneider, Albert M. Carollo, Sr. and Curtis W. Rochelle, have the right to elect the other half of UGC Holdings' directors. Immediately following the merger transaction: • Liberty contributed to us notes issued by two of our Dutch subsidiaries (the "Belmarken Notes" or "Exchangeable Loan") and, as a result, these Dutch subsidiaries owe the amounts payable under such notes, which had an accreted value of $891.7 million as of January 30, 2002, to us rather than to Liberty; • Liberty contributed $200.0 million in cash to us; • Liberty contributed to us $1.435 billion face amount of UPC senior notes and €263.1 million face amount of UPC senior discount notes (collectively the "Liberty UPC Bonds") and, as a result, UPC owes the obligations represented by such senior notes and senior discount notes to us rather than to Liberty; and • In exchange for the contribution of these assets to us, we issued an aggregate of approximately 281.3 million shares of our Class C common stock to Liberty. In December 2001, IDT United Inc. ("IDT United") commenced a cash tender offer for, and related consent solicitation with respect to, the entire $1.375 billion face amount of senior notes of UGC Holdings.