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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001.

/ / TRANSITION REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT 1934

FROM THE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION FILE NUMBER 000-22877

UPC POLSKA, INC.
(Exact Name of Registrant as Specified in Its Charter)

<Table>

DELAWARE 06-1487156
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)

4643 ULSTER STREET
SUITE 1300
DENVER, COLORADO 80237
(Address of Principal Executive Offices) (Zip Code)
</Table>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 770-4001

Indicate by check (X) whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days Yes___X___ No ______

The number of shares outstanding of UPC Polska, Inc.'s common stock as of
June 30, 2001, was:

<Table>

Common Stock 1,000
</Table>

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UPC POLSKA, INC.
FORM 10-Q INDEX
FOR QUARTERLY PERIOD ENDED JUNE 30, 2001

<Table>
<Caption>
PAGE
NO.
--------

PART I FINANCIAL INFORMATION
Item 1. Financial Statements UPC Polska, Inc........................ 3

Consolidated Balance Sheets................................. 3
Consolidated Statements of Operations....................... 5
Consolidated Statements of Comprehensive Loss............... 6
Consolidated Statements of Cash Flows....................... 7
Notes to Consolidated Financial Statements.................. 8

Item 2. Management's Discussion and Analysis of Financial Condition 17
and Results of Operations...................................

Item 3. Quantitative and Qualitative Disclosures About Market 29
Risk........................................................

PART II OTHER INFORMATION

Item 1. Legal Proceedings........................................... 30

Item 2. Changes in Securities and Use of Proceeds................... 30

Item 3. Defaults Upon Senior Securities............................. 30

Item 4. Submission of Matters to a Vote of Security Holders......... 30

Item 5. Other Information........................................... 30

Item 6. Exhibits and Reports on Form 8-K............................ 30
</Table>

2
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UPC POLSKA, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED)
(IN THOUSANDS)

Current assets:
Cash and cash equivalents................................. $ 23,514 $ 8,879
Trade accounts receivable, net of allowance for doubtful
accounts of $16,563 in 2001 and $8,685 in 2000.......... 13,400 18,627
Programming and broadcast rights.......................... 4,565 10,317
VAT recoverable........................................... 1,678 1,625
Prepayments............................................... 6,201 5,354
Due from UPC affiliates................................... 24,400 12,469
Other current assets...................................... 1,619 1,430
---------- ----------
Total current assets.................................... 75,377 58,701
---------- ----------

Property, plant and equipment:
Cable television systems assets........................... 164,054 151,417
D-DTH, transmission and production equipment.............. 169,926 165,369
Construction in progress.................................. 5,133 11,730
Vehicles.................................................. 2,169 2,081
Other..................................................... 29,656 23,157
---------- ----------
370,938 353,754
Less accumulated depreciation............................. (95,343) (62,242)
---------- ----------
Net property, plant and equipment....................... 275,595 291,512

Inventories for construction................................ 6,127 6,596
Intangibles, net............................................ 852,759 862,116
Investments in affiliated companies......................... 16,289 16,229
---------- ----------
Total assets............................................ $1,226,147 $1,235,154
========== ==========
</Table>

See accompanying notes to unaudited consolidated financial statements.

3
<Page>
UPC POLSKA, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDER'S EQUITY

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED)
(IN THOUSANDS)

Current liabilities:
Accounts payable and accrued expenses..................... $ 60,130 $ 95,631
Due to UPC................................................ 4,798 5,190
Accrued interest.......................................... 240 236
Deferred revenue.......................................... 8,244 7,964
---------- ----------
Total current liabilities............................... 73,412 109,021
---------- ----------
Long-term liabilities:
Notes payable and accrued interest to UPC................. 430,636 365,497
Notes payable............................................. 379,162 355,945
Other long term liabilities............................... 1,072 1,469
---------- ----------
Total liabilities....................................... 884,282 831,932
---------- ----------

Commitments and contingencies (note 9)

Stockholder's equity:
Common stock, $.01 par value; 1,000 shares authorized,
shares issued and outstanding 1,000 as of June 30, 2001
and December 31, 2000................................... -- --
Paid-in capital........................................... 907,615 863,111
Accumulated other comprehensive loss...................... (39,167) (66,901)
Accumulated deficit....................................... (526,583) (392,988)
---------- ----------
Total stockholder's equity.............................. 341,865 403,222
---------- ----------
Total liabilities and stockholder's equity.............. $1,226,147 $1,235,154
========== ==========
</Table>

See accompanying notes to unaudited consolidated financial statements.

4
<Page>
UPC POLSKA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ---------------------
2001 2000 2001 2000
-------- -------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues........................................... $ 34,746 $ 30,116 $ 73,314 $ 56,790

Operating expenses:
Direct operating expenses........................ 28,170 26,001 60,943 57,887
Selling, general and administrative expenses..... 15,126 17,420 31,867 29,980
Depreciation and amortization.................... 33,515 26,418 65,166 52,464
Impairment of DDTH equipment..................... -- 2,606 9,229 3,694
-------- -------- --------- ---------
Total operating expenses........................... 76,811 72,445 167,205 144,025
-------- -------- --------- ---------

Operating loss................................... (42,065) (42,329) (93,891) (87,235)

Interest and investment income..................... 295 321 551 640
Interest expense................................... (23,655) (18,208) (46,241) (34,537)
Equity in profits of affiliated companies.......... 395 162 360 38
Foreign exchange gain / (loss) net................. 4,843 (7,225) 5,594 (9,617)
Non-operating income/(expense) net................. 292 (128) 115 (198)
-------- -------- --------- ---------

Loss before income taxes and minority interest... (59,895) (67,407) (133,512) (130,909)
Income tax expense................................. (47) (3) (83) (40)
-------- -------- --------- ---------
Net loss applicable to holders of common stock... $(59,942) $(67,410) $(133,595) $(130,949)
======== ======== ========= =========
Basic and diluted Loss per common share.......... N/A N/A N/A N/A
======== ======== ========= =========
</Table>

See accompanying notes to unaudited consolidated financial statements.

5
<Page>
UPC POLSKA, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- ---------------------
2001 2000 2001 2000
-------- --------- --------- ---------
(IN THOUSANDS)

Net loss.......................................... $(59,942) $ (67,410) $(133,595) $(130,949)
Other comprehensive income / (loss):
Translation adjustment.......................... 20,217 (42,928) 27,734 (43,564)
-------- --------- --------- ---------
Comprehensive loss................................ $(39,725) $(110,338) $(105,861) $(174,513)
======== ========= ========= =========
</Table>

See accompanying notes to unaudited consolidated financial statements

6
<Page>
UPC POLSKA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<Table>
<Caption>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2001 JUNE 30, 2000
---------------- ----------------
(IN THOUSANDS)

Cash flows from operating activities:
Net loss.................................................. $(133,595) $(130,949)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization........................... 65,166 52,464
Amortization of notes payable discount and issue
costs................................................. 23,491 20,545
Equity in profits of affiliated companies............... (360) (38)
Impairment of D-DTH equipment........................... 9,229 3,694
Unrealized foreign exchange (gains) and losses.......... (4,175) 4,032
Other................................................... 558 --
Changes in operating assets and liabilities:
Accounts receivable................................... 5,956 (980)
Other current assets.................................. (521) 2,643
Programming and broadcast rights...................... (4,601) (1,635)
Accounts payable...................................... (30,815) (330)
Deferred revenue...................................... 280 3,344
Interest payable to UPC............................... 21,817 12,932
Trade accounts payable to UPC......................... 4,798 --
Trade accounts receivable from UPC affiliates......... (2,011) --
--------- ---------
Net cash used in operating activities............... (44,783) (34,278)
--------- ---------
Cash flows from investing activities:
Construction and purchase of property, plant and
equipment............................................... (22,938) (50,981)
Purchase of intangibles................................... (157) (2,603)
--------- ---------
Net cash used in investing activities............... (23,095) (53,584)
--------- ---------
Cash flows from financing activities:
Proceeds from loans from UPC.............................. 38,132 57,640
UPC capital increase...................................... 44,504 11,913
Repayment of notes payable................................ (243) (763)
--------- ---------
Net cash provided by financing activities........... 82,393 68,790
--------- ---------
Net increase/(decrease) in cash and cash
equivalents....................................... 14,515 (19,072)
Effect of exchange rates on cash and cash equivalents....... 120 (355)
Cash and cash equivalents at beginning of period............ 8,879 35,520
--------- ---------
Cash and cash equivalents at end of period.................. $ 23,514 $ 16,093
========= =========
Supplemental cash flow information:
Cash paid for interest.................................... $ 925 $ 880
========= =========
Cash paid for income taxes................................ $ 103 $ 31
========= =========
</Table>

See accompanying notes to unaudited consolidated financial statements.

7
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2001 AND 2000

1. BASIS OF PRESENTATION

The information furnished by UPC Polska, Inc. and its subsidiaries ("UPC
Polska" or the "Company", and previously @ Entertainment, Inc.) has been
prepared in accordance with United States generally accepted accounting
principles ("U.S. GAAP") and the rules and regulations of the Securities and
Exchange Commission ("SEC"). Certain information and footnote disclosures
normally included in annual financial statements prepared in accordance with
U.S. GAAP have been condensed or omitted pursuant to these rules and
regulations. The accompanying consolidated balance sheets, statements of
operations, statements of comprehensive loss and statements of cash flows are
unaudited but in the opinion of management reflect all adjustments (consisting
only of items of a normal recurring nature) which are necessary for a fair
statement of the Company's consolidated results of operations and cash flows for
the interim periods and the Company's financial position as of June 30, 2001.
The accompanying unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the notes
thereto included in the Company's 2000 Annual Report on Form 10-K filed with the
SEC (the "2000 Annual Report"). The interim financial results are not
necessarily indicative of the results of the full year.

2. CONSUMMATION OF UPC TENDER OFFER AND MERGER

On June 2, 1999, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with United Pan-Europe Communications N.V. ("UPC"),
whereby UPC and its wholly-owned subsidiary, Bison Acquisition Corp. ("Bison"),
initiated a tender offer to purchase all of the outstanding shares of the
Company in an all cash transaction valuing the Company's shares of common stock
at $19.00 per share.

The tender offer, initiated pursuant to the Merger Agreement, closed at
12:00 midnight on August 5, 1999. On August 6, 1999, Bison reported that it had
accepted for payment a total of 33,701,073 shares of the Company's common stock
(including 31,208 shares tendered pursuant to notices of guaranteed delivery)
representing approximately 99% of the Company's outstanding shares of common
stock (the "Acquisition"). In addition, UPC acquired 100% of the outstanding
Series A and Series B 12% Cumulative Preference Shares of the Company and
acquired all of the outstanding warrants and stock options.

Also on August 6, 1999, Bison was merged with and into the Company with the
Company continuing as the surviving corporation (the "Merger"). Accordingly, the
Company became a wholly-owned subsidiary of UPC. UnitedGlobalCom, Inc. is the
majority stockholder of UPC. The Company believes that a Change of Control (as
defined in the indentures governing the UPC Polska and Poland
Communications, Inc. ("PCI") notes) occurred on August 6, 1999 as a result of
the Acquisition and Merger.

The Acquisition was accounted for under the purchase method of accounting,
with all of the purchase accounting adjustments `pushed-down' to the
consolidated financial statements of UPC Polska. Accordingly, the purchase price
was allocated to the underlying assets and liabilities based upon their
estimated fair values and any excess to goodwill. The Company restated some of
its assets and liabilities on August 5, 1999. At that date, the notes of the
Company and PCI were restated to reflect the market value and as a result were
increased by $61.9 million and deferred financing costs of $16.1 million and
deferred revenues of $2.0 million were written down to zero. The consideration
paid by UPC for all outstanding shares, warrants and options totaled
$812.5 million. At that time the Company had negative net assets of
approximately $53.3 million and existing goodwill at net book value of
$37.5 million, which was realized on previous transactions. As a result of the
above considerations, UPC realized goodwill of approximately $979.3 million.
During the year ended December 31, 2000 this figure increased by $12.3 million
to $991.6 million mainly due to the results of an arbitration between

8
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

the Company and Telewizyjna Korporacja Partycypacyjna ("TKP"). As a result of
the Acquisition, UPC pushed down its basis to the Company establishing a new
basis of accounting as of the Acquisition date. UPC Polska allocated goodwill
between the business segments based on the investment model used for the
acquisition.

3. FINANCIAL POSITION AND BASIS OF ACCOUNTING

These consolidated financial statements have been prepared on a going
concern basis which contemplates the continuation and expansion of trading
activities as well as the realization of assets and liquidation of liabilities
in the ordinary course of business. Pay television operators typically
experience losses and negative cash flow in their initial years of operation due
to the large capital investment required for the construction or acquisition of
their cable networks, acquisition of programming rights, acquisition of
reception systems for digital direct-to-home satellite broadcast ("D-DTH")
business and the administrative costs associated with commencing operations.
Consistent with this pattern, the Company has incurred substantial operating
losses since inception. The Company expects to experience substantial operating
losses and negative cash flows for at least the next year in association with
its D-DTH and programming businesses. As of June 30, 2001, the Company has
negative working capital and significant commitments under non-cancelable
operating leases and contracts for programming rights. Additionally, the Company
is currently and is expected to continue to be highly leveraged. The ability of
the Company to meet its debt service obligations will depend on the future
operating performance and financial results of the Company as well as its
ability to obtain additional third party financing to support the planned
expansion, as well as obtaining additional financing from its parent, UPC. The
Company's current cash on hand will be insufficient to satisfy all of its
commitments and to complete its current business plan for its D-DTH, cable and
programming business.

Management of the Company believes that significant opportunities exist for
pay television providers capable of delivering high quality, Polish-language
programming on a multi-channel basis and other services on cable (I.E., data and
telephony). As such, the Company has focused its financial and business efforts
toward its position in the cable, D-DTH and programming markets. The Company's
business strategy is designed to increase its market share and subscriber base
and to maximize revenue per subscriber. To accomplish its objectives and to
capitalize on its competitive advantages, the Company intends to (i) develop and
control the content of programming on its cable and D-DTH systems;
(ii) increase its distribution capabilities through internal growth and through
acquisitions; (iii) control its management of subscribers by using advanced
integrated management information systems; (iv) maintain Wizja TV as the leading
brand name in the Polish pay television industry; and (v) provide additional
revenue generating services to its customers. If the Company's plans or
assumptions change, if its assumptions prove inaccurate, if it consummates
unanticipated investments in or acquisitions of other companies, if it
experiences unexpected costs or competitive pressures, or if existing cash, and
projected cash flow from operations prove to be insufficient, the Company may
need to obtain greater amounts of additional financing. While it is the
Company's intention to enter only into new financing or refinancing that it
considers advantageous, there can be no assurance that such sources of financing
would be available to the Company in the future, or, if available, that they
could be obtained on terms acceptable to the Company. The Company is solely
dependent on its parent, UPC, to provide financing to achieve the Company's
business strategy. UPC has declared that it will continue to financially support
UPC Polska and its subsidiaries as a going concern, and accordingly enable UPC
Polska and its subsidiaries to meet their financial obligations if and when
needed, for the period at least through January 31, 2002.

Several of the Company's Polish subsidiaries have statutory shareholders'
equity less than the legally prescribed limits because of accumulated losses. As
required by Polish law, the management of these companies will have to make
decisions on how to increase the shareholders' equity to be in

9
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

compliance with the Polish Commercial Code. The Company is currently considering
several alternatives, including the conversion of intercompany debt into equity,
in order to resolve these deficiencies.

4. IMPACT OF A NEW ACCOUNTING STANDARD ADOPTION

In June 2001, the Financial Accounting Standards Board authorised the
issuance of Statement of Financial accounting Standards No. 141, "Business
Combinations" ("SFAS 141") and Statement of Financial Accounting Standards
No. 142,"Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 requires
the use of the purchase method of accounting for all business combinations
initiated after June 30, 2001. SFAS 141 requires identifiable intangible assets
acquired in a business combination to be recognised if they arise from
contractual or legal rights or are "separable" i.e., it is feasible that they
may be sold, transferred, licensed, rented, exchanged or pledged.

Under SFAS 142, goodwill and intangible assets with indefinite lives will
not be amortized, but will be tested for impairment on an annual basis and
whenever indicators of impairment arise. The goodwill impairment test, which is
based on fair value, is to be performed on a reporting unit level. Goodwill will
no longer be allocated to other long-lived assets for impairment testing under
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." Additionally, goodwill on equity method
investments will no longer be amortised; however, it will continue to be tested
for impairment in accordance with Accounting Principles Board Opinion No. 18,
"The Equity Method of Accounting for Investments in Common Stock." Under
SFAS 142 intangible assets with indefinite lives will be carried at the lower
cost or market value. All other recognised intangible assets will continue to be
amortised over their estimated useful lives.

SFAS 142 is effective for fiscal years beginning after December 15, 2001,
although goodwill on business combinations consummated after July 1, 2001 will
not be amortised. On adoption UPC Polska may need to record a cumulative effect
adjustment to reflect the impairment of previously recognised intangible assets.
In addition, goodwill on prior business combinations will cease to be amortised.
The Company has not determined the impact that these statements will have on
intangible assets or whether a cumulative effect adjustment will be required
upon adoption.

Effective January 1, 2001, the Company adopted SFAS 133, which establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
All derivatives, whether designated in hedging relationships or not, are
required to be recorded on the balance sheet at fair value. The adoption of
SFAS 133 on January 1, 2001, resulted in no impact to income. The Company's debt
is all fixed rate and denominated in Euros or U.S. dollars. The Company does not
use derivative instruments to manage exposures to foreign currency or interest
rate risks.

5. IMPAIRMENT OF D-DTH BOXES

The Company has impaired the value of D-DTH boxes leased to customers, that
have been disconnected and where it is unlikely that the Company will recover
the value of the boxes. The value of the impairment is based on the number of
disconnected customers, to whom the D-DTH boxes were rented, decreased by the
number of collected boxes and multiplied by the net book value of the box at the
end of the corresponding period. The amount of impairment for the three and six
months ended June 30, 2001 was $0 and $9,229,000, respectively as compared to
$2,606,000 and $3,694,000 for the corresponding periods in 2000.

10
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

6. CAPITAL CONTRIBUTIONS

For the three and six months ended June 30, 2001, UPC made capital
contributions to the Company of $14,490,000 and $44,504,000, respectively, and
additional loans of $16,556,000 and $38,132,000, respectively, to fund the
Company's activities. All of the loans from UPC to UPC Polska bear interest at
11% per annum. On June 30, 2001, the Company had, on a consolidated basis,
approximately $809,798,000 aggregate principal amount of indebtedness
outstanding, of which approximately $430,636,000 million was owed to UPC.

7. RECLASSIFICATIONS

Certain amounts have been reclassified in the corresponding period's
unaudited consolidated financial statements to conform to the unaudited
consolidated financial statement presentation for the three and six months ended
June 30, 2001.

8. PER SHARE INFORMATION

Basic and diluted loss per share has not been computed since 100% of the
outstanding shares are held by a single shareholder, UPC.

9. COMMITMENTS AND CONTINGENCIES

BUILDING LEASES

The Company leases several offices and warehouses within Poland under
cancelable and non cancelable operating leases. The Company has also a non
cancelable operating lease for a building in the United Kingdom which houses the
majority of its technical equipment relating to the D-DTH network. The non
cancelable lease for the building in the United Kingdom expires in 2002, and
contains a renewal option for an additional five years. The non cancelable
operating lease for offices in Poland expires in 2005 and contains a renewal
option for an additional five years. Future minimum lease payments as of
June 30, 2001 are $2,337,000 in 2001, $4,112,000 in 2002, $4,119,000 in 2003,
$4,127,000 in 2004 and $7,091,000 in 2005 and thereafter.

D-DTH TECHNICAL EQUIPMENT LEASE

The Company has an eight year agreement with British Telecommunications plc
("BT") for the lease and maintenance of certain satellite uplink equipment. The
agreement requires the payment of equal monthly installments of approximately
$43,000 approximating future minimum commitments of $254,000 in 2001, $508,000
in 2002, $508,000 in 2003, $508,000 in 2004 and $635,000 in 2005 and thereafter.
Other than the BT uplink equipment, the Company owns all of the required
broadcasting equipment at its transmission facility in the United Kingdom.

CONDUIT LEASES

The Company leases space within various telephone duct systems from the
Polish national telephone company (known in the Polish telecommunications
industry as "TPSA") under cancelable operating leases. The TPSA leases expire at
various times, and a substantial portion of the Company's contracts with TPSA
permit termination by TPSA without penalty at any time either immediately upon
the occurrence of certain conditions or upon provision of three to six months
notice without cause. All of the agreements provide that TPSA is the manager of
the telephone duct system and will lease space within the ducts to the Company
for installation of cable and equipment for the cable television systems. Some
conduit agreements with TPSA provide that cables can be installed in the conduit
only for the use of cable television. If the Company uses the cables for a
purpose other than cable

11
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

television, such as data transmission, telephone, or Internet access, such use
could be considered a violation of the terms of certain conduit agreements,
unless this use is expressly authorized by TPSA. There is no guarantee that TPSA
would give its approval to permit other uses of the conduits. The Company has
introduced Internet services to certain of its cable and D-DTH customers, and is
in the process of renegotiating certain conduit agreements with TPSA. The lease
agreements provide for monthly lease payments that are adjusted quarterly or
annually, except for the Gdansk lease agreement which provides for an annual
adjustment after the sixth year and then remains fixed through the tenth year of
the lease. Minimum future lease commitments for the aforementioned conduit
leases relate to 2001 and 2002 only, as all leases are cancelable in accordance
with the aforementioned terms. The future minimum lease commitments related to
these conduit leases approximates $681,000 as of June 30, 2001.

TRANSPONDER LEASES

During 1997 and 2000, the Company entered into certain operating leases
pursuant to which the Company is liable for charges associated with each of its
four transponders on the Astra satellites, which can amount to a maximum of
$5,126,000 per year for each transponder and up to $177,713,000 for all four
transponders for the term of their leases. The future maximum lease payments
applicable to the transponders approximate $10,253,000 in 2001, $20,505,000 in
2002, $20,505,000 in 2003, $20,505,000 in 2004 and $105,945,000 in 2005 and
thereafter. The leases for the two transponders on the Astra 1F satellite and
the transponder on the Astra 1E satellite will expire in 2009. The lease for the
fourth transponder on the Astra 1G satellite will expire in 2010. The Company's
transponder leases provide that the Company's rights are subject to termination
in the event that the lessor's franchise is withdrawn by the Luxembourg
Government.

CAR LEASES

The Company has operating car leases with various leasing companies in
Poland. Minimum future lease commitments for the aforementioned car leases as of
June 30, 2001 are $277,000 in 2001, $428,000 in 2002 and $7,000 in 2003.

PURCHASE COMMITMENTS

The Company has concluded an agreement with Philips, whereby Philips
supplies Reception Systems, as well as retail, installation and support services
in connection with the launch of the Company's D-DTH Business in Poland. Philips
was the exclusive supplier to the Company of the first 500,000 D-DTH Reception
Systems. The Company had purchased more than 500,000 D-DTH reception systems
from Philips as of June 30, 2001. Philips has granted the Company an exclusive
license of its CryptoWorks-Registered Trademark- technology in Poland for the
term of the agreement, which may be terminated or renegotiated when the Company
has purchased 500,000 D-DTH reception systems from Philips. The Company and
Philips are currently negotiating a variation to the agreement.

PROGRAMMING, BROADCAST AND EXHIBITION RIGHT COMMITMENTS

The Company has entered into long-term programming agreements and agreements
for the purchase of certain exhibition or broadcast rights with a number of
third party content providers for its D-DTH and cable systems. The agreements
have terms which range from one to twenty years and require that the license
fees be paid either at a fixed amount payable at the time of execution or based
upon a guaranteed minimum number of subscribers connected to the system each
month. At June 30, 2001, the Company had an aggregate minimum commitment in
relation to these agreements of

12
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

approximately $223,456,000 over the next seven years, approximating $25,380,000
in 2001, $46,159,000 in 2002, $33,223,000 in 2003, $21,860,000 in 2004 and
$96,834,000 in 2005 and thereafter.

SPONSORSHIP COMMITMENTS

As of June 30, 2001, the Company through its subsidiaries has committed to
pay approximately $1,131,000 for various sponsorships over the next three years
approximating $223,000 in 2001, $702,000 in 2001, and $206,000 in 2003.

REGULATORY APPROVALS

The Company is in the process of obtaining permits from the Chairman of the
Office for Telecommunication Regulation ("URT") for several of its cable
television systems. If these permits are not obtained, URT could impose
penalties such as fines or in severe cases, revocation of all permits held by an
operator or the forfeiture of the operator's cable networks. Management of the
Company does not believe that these pending approvals result in a significant
risk to the Company. Additionally, in March 2001, one of the Company's
subsidiaries notified the Chairman of the URT of its activities concerning the
provision of data transmission services and access to the Internet. The Chairman
had 21 days to respond to the Company's notification. Since no response was
received from the Chairman of URT, it is assumed that the Company is legally
entitled to provide the data transmission services and access to the Internet as
described in the notification.

LITIGATION AND CLAIMS

From time to time, the Company is subject to various claims and suits
arising out of the ordinary course of business. While the ultimate result of all
such matters is not presently determinable, based upon current knowledge and
facts, management does not expect that their resolution will have a material
adverse effect on the Company's consolidated financial position or results of
operations.

PROCEEDING RELATING TO HBO POLSKA

Two of the Company's cable television subsidiaries and four other unrelated
Polish cable operators and HBO Polska Sp. z o.o., have been made defendants in a
lawsuit instituted by Polska Korporacja Telewizyjna Sp. z o.o., a subsidiary of
Canal+. The primary defendant in the proceedings is HBO Polska Sp. z o.o. which
is accused of broadcasting the HBO television program in Poland without a
license from the Council as required by the Radio and Television Act of 1992, as
amended, and thereby undertaking an activity constituting an act of unfair
competition. The Company does not believe that the final disposition of the
lawsuit will have a material adverse effect on its consolidated financial
position or results of operations.

PAYMENT OF ARBITRATION AWARD

During the second quarter of the year 2000, the Company accrued
$12.0 million related to an arbitration accounted for as adjustment to goodwill.
The award of $12,218,100 was paid by the Company on October 27, 2000.

PCBV MINORITY STOCKHOLDER'S CLAIM

On or about July 8, 1999, certain minority shareholders ("the minority
shareholders") of Poland Cablevision (Netherlands) B.V. ("PCBV"), an indirect
subsidiary of the Company, filed a lawsuit against the Company, Poland
Communications, Inc. ("PCI") and certain other defendants, in United States
District Court, Southern District of Ohio, Eastern Division, Civil Action No.
C2-99-621.

13
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UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

The relief sought by the minority shareholders includes: (1) unspecified
damages in excess of $75,000, (2) an order lifting the restrictions against
transfer of shares set forth in the Shareholders' Agreement among PCBV's
shareholders, as amended (the "Shareholders' Agreement") so that the minority
shareholders can liquidate their shares in PCBV, (3) damages in the amount of
1.7 percent of the payment made by UPC for the shares of the company as set
forth in the Agreement and Plan of Merger between the Company and UPC dated
June 2, 1999, and (4) attorneys' fees and costs incurred in prosecuting the
lawsuit.

The amended complaint sets forth eight claims for relief based on
allegations that the defendants, including the Company and PCI, committed the
following wrongful acts: (1) breached a covenant not to compete contained in the
Shareholders' Agreement relating to the shareholders of PCBV, (2) breached a
covenant in the Shareholders' Agreement requiring that any contract entered into
by PCBV with any other party affiliated with PCI be commercially reasonable or
be approved by certain of the minority shareholders, (3) breached a provision in
the Shareholders' Agreement that allegedly required co-defendant Chase
International Corp. ("CIC") to offer the minority shareholders the right to
participate in certain sales of PCBV shares and that required CIC to give
written notice of any offer to purchase the minority shareholders' shares in
PCBV, (4) breached their fiduciary duties to the minority shareholders,
(5) breached the agreement between PCBV and CIC, which allegedly limited the
amount of management fees that could be paid annually by PCBV, (6) made false
and misleading statements in various documents filed with the Securities and
Exchange Commission, (7) colluded to defraud the minority shareholders by
failing to make reference in certain Forms 8-K, 8-KA and 14D-1 to the minority
shareholders or their alleged rights and claims, (8) colluded to divert assets
of PCBV to affiliates of PCI and PCBV, including the Company, that allegedly
compete with PCI and PCBV.

On or about March 31, 2000 the parties to the lawsuit reached a settlement.
In accordance with the settlement, on June 2, 2000, Wizja TV B.V., an affiliate
of PCI, purchased approximately 1.4% of the outstanding shares of PCBV for a
price of approximately $2.2 million. The case has been dismissed and releases
exchanged. The aforementioned settlement does not include the remaining minority
shareholders of PCBV.

In addition to the Ohio lawsuit, other minority shareholders of PCBV
(representing an additional approximately 6% of the shares of PCBV, hereinafter
the "Reece Group") have asserted claims against the past and present directors
or officers of, or members of the Board of Managers of, PCI, PCBV and the
Company or one or more controlling shareholders of the Company but have not yet
filed suit.

The claims by the Reece Group consist of allegations previously made by
Reece Communications, Inc. ("RCI"). RCI's allegations were premised on, among
other things, alleged acts, errors, omissions, misstatements, misleading
statements or breaches of duty by the aforementioned officers, directors, or
controlling shareholders. The Company has negotiated a settlement of those
claims and a simultaneous purchase of the Reece Group's PCBV shares, as well as
the purchase of all other shares of PCBV held by other minority shareholders and
a settlement of their claims. In exchange for the release of claims and the
transfer of all outstanding shares in PCBV held by minority shareholders, the
Company and/or its affiliates will pay in the aggregate approximately
$3.6 million in cash at closing and issue promissory notes for $17 million,
which promissory notes accrue interest at 7% per annum and are payable in
increments over a period of 36 months in cash or UPC common stock, at the
payor's election. Those transactions are anticipated to close in August 2001.

THE GROUPE JEAN-CLAUDE DARMON PROCEEDING AGAINST WIZJA TV SP. Z O.O.

On January 27, 2000, the Groupe Jean-Claude Darmon ("Darmon"), a French
company, commenced legal proceedings against Wizja TV Sp. z o.o., a subsidiary
of the Company, and SPN

14
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

Widzew SSA Sportowa Spolka Akcyjna (Lodz Football Club) in the Paris Commercial
Court ("Tribunal de Commerce de Paris").

Wizja TV Sp. z o.o. has been accused of infringing broadcast and advertising
rights which Darmon purports to hold. Darmon has accused Wizja TV Sp. z o.o. of
interrupting the broadcast signal of the UEFA Cup match on October 21, 1999
between Lodz Football Club and AS Monaco. Darmon seeks damages in the amount of
13,025,000 French francs (approximately $1,682,000) from Wizja Sp. z o.o. The
Company is unable to predict the outcome of this case.

10. SEGMENT INFORMATION

The Company and its subsidiaries operate in four business segments:
(1) cable television, (2) D-DTH television, (3) programming, and (4) corporate.
The Company accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices. During 1999
and in prior years, the Company presented its operations in three business
segments: (1) cable television, (2) D-DTH television and programming, and
(3) corporate. Due to the increasing size of the D-DTH segment, in
January 2000, management decided to separate D-DTH operations into a distinct
segments and present the Company's operations in four business segments. Certain
amounts have been reclassified in the 1999 unaudited consolidated financial
statements to conform to the presentation of unaudited consolidated financial
statements for the six months ended June 30, 2001.

In addition to other operating statistics, the Company measures its
financial performance by EBITDA, an acronym for earnings before interest, taxes,
depreciation and amortization. The Company defines EBITDA to be net loss
adjusted for impairment of D-DTH equipment, interest and investment income,
depreciation and amortization, interest expense, foreign currency gains and
losses, equity in losses of affiliated companies, income taxes and minority
interest. The items excluded from EBITDA are significant components in
understanding and assessing the Company's financial performance. The Company
believes that EBITDA and related measures of cash flow from operating activities
serve as important financial indicators in measuring and comparing the operating
performance of media companies.

EBITDA is not a U.S.GAAP measure of loss or cash flow from operations and
should not be considered as an alternative to cash flows from operations as a
measure of liquidity.

15
<Page>
UPC POLSKA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001 AND 2000

SELECTED SEGMENT DATA
(UNAUDITED IN THOUSANDS OF US DOLLARS)

<Table>
<Caption>
CABLE D-DTH PROGRAMMING CORPORATE TOTAL
-------- -------- ----------- --------- ----------

Three months ended June 30, 2001
Revenues from external customers........... $ 20,186 $ 15,422 $ (862)1) $ -- $ 34,746
Intersegment revenues...................... -- -- 17,167 -- 17,167
Operating loss............................. (11,885) (16,877) (10,078) (3,225) (42,065)
EBITDA..................................... 2,367 (3,445) (4,247) (3,225) (8,550)
Segment total assets....................... 521,984 393,321 298,284 12,558 1,226,147

Three months ended June 30, 2000
Revenues from external customers........... $ 17,177 $ 12,253 $ 686 $ -- $ 30,116
Intersegment revenues...................... -- -- 13,316 -- 13,316
Operating loss............................. (10,716) (13,317) (17,468) (828) (42,329)
EBITDA..................................... 381 (1,112) (11,746) (828) (13,305)
Segment total assets....................... 497,374 376,803 291,495 14,119 1,179,791

Six months ended June 30, 2001
Revenues from external customers........... $ 38,914 $ 31,474 $ 2,9261) $ -- $ 73,314
Intersegment revenues...................... -- -- 32,136 -- 32,136
Operating loss............................. (25,245) (41,310) (21,254) (6,082) (93,891)
EBITDA..................................... 2,119 (5,993) (9,540) (6,082) (19,496)
Segment total assets....................... 521,984 393,321 298,284 12,558 1,226,147

Six months ended June 30, 2000
Revenues from external customers........... $ 34,030 $ 21,638 $ 1,122 $ -- $ 56,790
Intersegment revenues...................... -- -- 25,584 -- 25,584
Operating loss............................. (21,173) (27,399) (37,519) (1,144) (87,235)
EBITDA..................................... 1,430 (5,350) (26,013) (1,144) (31,077)
Segment total assets....................... 497,374 376,803 291,495 14,119 1,179,791
</Table>

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

1) The external programming revenue is generated primarily from transmission
services sold to UPC affiliates. During the second quarter terms of
agreements relating to programming and transmission fees were renegotiated
with UPC and certain of its affiliates. The adjustment reflecting these
changes has been back-dated to January 1, 2001 and has led to a negative
revenue in the programming segment during the second quarter.

11. SUBSEQUENT EVENTS

On August 10, 2001, UPC Polska's parent, UPC, and Canal+ Group ("Canal+"),
the television and film division of Vivendi Universal, announced the signing of
definitive agreements to merge their respective Polish D-DTH platforms, as well
as the Canal+ Polska premium channel, to form a common Polish D-DTH platform.
UPC Polska will contribute its Polish D-DTH assets to TKP, the Polish subsidiary
of Canal+, in exchange for 25% of TKP and 150 million Euros (approximately $127
million) in cash. As part of this transaction, through a carriage agreement,
Canal+ Polska will also be available on UPC Polska's cable network. TKP will be
managed and controlled by Canal+, who will own 75%. UPC will own the remaining
25%. This merger is subject to certain regulatory approvals. For accounting
purposes, TKP will be deemed the acquiror. UPC Polska's investment in the merged
companies will be recorded at fair value as of the date of the transaction. UPC
Polska's carrying value of the Polish D-DTH assets being contributed may be
significantly higher than the determined fair value of its investment in the
merged companies if and when the transaction is consummated, leading to a write
down at the date the transaction is consummated.

16
<Page>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis provides information concerning the
results of operations and financial condition of the Company. Such discussion
and analysis should be read in conjunction with the accompanying unaudited
consolidated financial statements of the Company. Additionally, the following
discussion and analysis should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
audited consolidated financial statements included in Part II of the Company's
2000 Annual Report. The following discussion focuses on material trends, risks
and uncertainties affecting the results of operations and financial condition of
the Company.

Certain statements in this Quarterly Report on Form 10-Q constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, that are not historical facts but rather reflect
the Company's current expectations concerning future results and events. The
words "believes," "expects," "intends," "plans," "anticipates," "likely,"
"will", "may", "shall" and similar expressions identify such forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company (or entities in which the Company has
interests), or industry results, to differ materially from future results,
performance or achievements expressed or implied by such forward-looking
statements.

Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this Quarterly
Report on Form 10-Q. The Company undertakes no obligation to publicly release
the result of any revisions to these forward-looking statements which may be
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events, conditions or circumstances.

The risks, uncertainties and other factors that might cause such differences
include but are not limited to: (i) general economic conditions in Poland and in
the pay television business in Poland; (ii) changes in regulations the Company
operates under; (iii) uncertainties inherent in new business strategies,
including the Company's satellite television business, new product launches and
development plans, which the Company has not used before; (iv) rapid technology
changes; (v) changes in, or failure or inability to comply with government
regulations; (vi) the development and provision of programming for new
television and telecommunications technologies; (vii) the continued strength of
competitors in the multichannel video programming distribution industry and
satellite services industry and the growth of satellite delivered programming;
(viii) future financial performance, including availability, terms and
deployment of capital; (ix) the ability of vendors to deliver required
equipment, software and services on schedule at the budgeted cost; (x) the
Company's ability to attract and hold qualified personnel; (xi) changes in the
nature of strategic relationships with joint ventures; (xii) the overall market
acceptance of those products and services, including acceptance of the pricing
of those products and services; (xiii) possible interference by satellites in
adjacent orbital positions with the satellites currently being used for the
Company's satellite television business; (xiv) acquisition opportunities; and
(xv) the Company's new ownership structure.

OVERVIEW

17
<Page>
on UPC Polska's cable network. TKP will be managed and controlled by Canal+, who
will own 75%. UPC will own the remaining 25%. This merger is subject to certain
regulatory approvals. For accounting purposes, TKP will be deemed the acquiror.
UPC Polska's investment in the merged companies will be recorded at fair value
as of the date of the transaction. UPC Polska's carrying value of the Polish
D-DTH assets being contributed may be significantly higher than the determined
fair value of its investment in the merged companies if and when the transaction
is consummated, leading to a write down at the date the transaction is
consummated.

On August 6, 1999, Bison, UPC's wholly-owned subsidiary, was merged with and
into the Company with the Company continuing as the surviving corporation (the
"Merger"). Accordingly, the Company became a wholly-owned subsidiary of UPC.
UnitedGlobalCom, Inc. is the majority stockholder of UPC.

Until the limited launch of the Company's D-DTH business on July 1, 1998 and
subsequent full-scale launch on September 18, 1998, the Company's revenues were
derived entirely from its cable television business and programming related
thereto. The Company's revenue has increased $4.6 million or 15.3% from
$30.1 million for the three months ended June 30, 2000 to $34.7 million for the
three months ended June 30, 2001 and $16.5 million or 29.1% from $56.8 million
for the six months ended June 30, 2000 to $73.3 million for the six months ended
June 30, 2001. This increase was due primarily to internal growth in subscribers
through increased penetration, increases in subscription rates, further
development of the Wizja TV programming package, sales of programming and uplink
services, and advertising sales.

Prior to June 1997, the Company's expenses were primarily incurred in
connection with its cable television business and programming related thereto.
Since June 1997, the Company has been incurring, in addition to expenses related
to its cable television and programming businesses, expenses in connection with
the operation of its D-DTH and programming business.

The Company generated an operating loss of $42.1 million for the three
months ended June 30, 2001 and $93.9 million for the six months ended June 30,
2001, primarily due to the significant costs associated with development of the
Company's D-DTH and programming businesses, promotion of those businesses and
the development, production and acquisition of programming for Wizja TV, and the
amortization of goodwill pushed down to the Company as a result of the Merger.

The Company divides operating expenses into (i) direct operating expenses,
(ii) selling, general and administrative expenses, and (iii) depreciation and
amortization. Direct operating expenses consist of programming expenses,
maintenance and related expenses necessary to service, maintain and operate the
Company's cable systems and D-DTH programming platform, billing and collection
expenses and customer service expenses. Selling, general and administrative
expenses consist principally of administrative costs, including office related
expenses, professional fees and salaries, wages and benefits of non-technical
employees, advertising and marketing expenses, bank fees and bad debt expense.
Depreciation and amortization consist of depreciation of property, plant and
equipment and amortization of intangible assets.

SEGMENT RESULTS OF OPERATIONS

UPC Polska, Inc. and its subsidiaries operate in four business segments:
cable television, digital direct-to-home television, programming, and corporate
functions. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The Company
evaluates performance based on profit or loss from operations before income
taxes not including nonrecurring items and foreign exchange gains and loss. The
Company accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices.

18
<Page>
The Company classifies its business into four segments: (1) cable
television, (2) D-DTH television, (3) programming, and (4) corporate.
Information about the operations of the Company in these different business
segments is set forth below based on the nature of the services offered. In
addition to other operating statistics, the Company measures its financial
performance by EBITDA, an acronym for earnings before interest, taxes,
depreciation and amortization. The Company defines EBITDA to be net loss
adjusted for impairment of D-DTH equipment, interest and investment income,
depreciation and amortization, interest expense, foreign currency gains and
losses, equity in losses of affiliated companies, income taxes and minority
interest. The items excluded from EBITDA are significant components in
understanding and assessing the Company's financial performance. The Company
believes that EBITDA and related measures of cash flow from operating activities
serve as important financial indicators in measuring and comparing the operating
performance of media companies.

EBITDA is not a U.S. GAAP measure of profit and loss or cash flow from
operations and should not be considered as an alternative to cash flows from
operations as a measure of liquidity.

The following table presents the segment results of the Company's operations
for the three and six months ended June 30, 2001 and 2000:

SEGMENT RESULTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS)

<Table>
<Caption>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 2001 JUNE 30, 2000 JUNE 30, 2001 JUNE 30, 2000
------------- ------------- ------------- -------------

REVENUES
Cable.................................... 20,186 17,177 38,914 34,030
D-DTH.................................... 15,422 12,253 31,474 21,638
Programming.............................. 16,305 14,002 35,062 26,706
Corporate and Other...................... -- -- -- --
Intersegment elimination (1)............. (17,167) (13,316) (32,136) (25,584)
------- ------- ------- -------
TOTAL.................................... 34,746 30,116 73,314 56,790

OPERATING LOSS
Cable.................................... (11,885) (10,716) (25,245) (21,173)
D-DTH.................................... (16,877) (13,317) (41,310) (27,399)
Programming.............................. (10,078) (17,468) (21,254) (37,519)
Corporate and Other...................... (3,225) (828) (6,082) (1,144)
------- ------- ------- -------
TOTAL.................................... (42,065) (42,329) (93,891) (87,235)

EBITDA
Cable.................................... 2,367 381 2,119 1,430
D-DTH.................................... (3,445) (1,112) (5,993) (5,350)
Programming.............................. (4,247) (11,746) (9,540) (26,013)
Corporate and Other...................... (3,225) (828) (6,082) (1,144)
------- ------- ------- -------
TOTAL.................................... (8,550) (13,305) (19,496) (31,077)
</Table>

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

(1) Comprised of Wizja TV programming costs charged to the cable segment and
D-DTH segment by the programming segment in the three and six months ended
June 30, 2001 and 2000. During the second quarter terms of agreements
relating to programming and transmission fees were renegotiated with UPC and
certain of its affiliates. The adjustment reflecting these changes have been
back-dated to January 1, 2001 and has led to a negative revenue in the
programming segment during the second quarter.

19
<Page>
CABLE SEGMENT OVERVIEW

The Company operates the largest cable television system in Poland with
approximately 1,851,800 homes passed and approximately 1,022,800 total
subscribers as at June 30, 2001.

The Company's revenues in its cable segment have been and will continue to
be derived primarily from monthly subscription fees for cable television
services. Through its cable segment, the Company charges cable subscribers fixed
monthly fees for their choice of service packages and for other services, such
as premium channels, tuner rentals and additional outlets, all of which are
included in monthly subscription fees. The Company currently offers broadcast,
intermediate (in limited areas) and basic packages of cable service. At
June 30, 2001, approximately 65.2% of the Company's cable subscribers received
its basic package. Currently, almost all of the Company's cable revenue is
derived from monthly subscription fees.

During 1999 and 2000, management completed several strategic actions in
support of its business and operating strategy. On June 5, 1998, the Company
began providing the Wizja TV programming package, with its initial 11 channels
of primarily Polish-language programming, to its basic subscribers. Since that
date, the basic Wizja TV package has been expanded to 29 channels. Management
believes that this selection of high quality primarily Polish-language
programming will provide it with a significant competitive advantage in
increasing its cable subscriber penetration rates. The Company has continued to
invest in upgrading its networks in order to provide additional revenue
generating services to its customers and continue to improve the security of
that network.

During the fourth quarter of the year 2000, the Company began providing
Internet services to its cable television customers and has been investing in
upgrading its network to provide this service. Individual and home office
Internet subscribers are charged a monthly subscription fee of approximately $38
and $51, respectively.

CABLE TELEVISION REVENUE. Revenue increased $3.0 million or 17.4% from
$17.2 million for the three months ended June 30, 2000 to $20.2 million for the
three months ended June 30, 2001 and increased $4.9 million or 14.4% from
$34.0 million for the six months ended June 30, 2000 to $38.9 million for the
six months ended June 30, 2001. This increase was primarily attributable to the
appreciation of the Polish zloty against the US dollar.

Revenue from monthly subscription fees represented 97.9% and 98.1% of cable
television revenue for the six months ended June 30, 2001 and 2000,
respectively. During the three and six months ended June 30, 2001, the Company
generated approximately $1.1 million and $2.3 million, respectively, of
additional premium subscription revenue as a result of providing the HBO Poland
service pay movie channel and Wizja Sport channel to cable subscribers as
compared to $1.2 million and $2.1 million, respectively for the three and six
months ended June 30, 2000 (although the Company expanded Wizja Sport into its
basic package as of March 24, 2001).

DIRECT OPERATING EXPENSES. Direct operating expenses increased
$4.4 million, or 53.0%, from $8.3 million for the three months ended June 30,
2000 to $12.7 million for the three months ended June 30, 2001, and increased
$5.2 million or 26.1% from $19.9 million for the six months ended June 30, 2000
to $25.1 million for the six months ended June 30, 2001, principally as a result
of an increase in programming costs. Direct operating expenses increased from
48.3% of revenues for the three months ended June 30, 2000 to 62.9% of revenues
for the three months ended June 30, 2001 and increased from 58.5% of revenues
for the six months ended June 30, 2000 to 64.5% of revenues for the six months
ended June 30, 2001.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $3.4 million or 40.0% from $8.5 million for
the three months ended June 30, 2000 to $5.1 million for the three months ended
June 30, 2001 and decreased $1.0 million or 7.9% from $12.7 million for the

20
<Page>
six months ended June 30, 2000 to $11.7 million for the six months ended
June 30, 2001. This decrease was attributable primarily to the discontinuation
this year of the provision of programming guides to customers.

As a percentage of revenue, selling, general and administrative expenses
decreased from 49.4% for the three months ended June 30, 2000 to approximately
25.2% for the three months ended June 30, 2001 and decreased from 37.4% of
revenue for the six months ended June 30, 2000 to 30.1% for the six months ended
June 30, 2001.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased $3.2 million, or 28.8%, from $11.1 million for the three months ended
June 30, 2000 to $14.3 million for the three months ended June 30, 2001 and
increased $4.8 million or 21.2% from $22.6 million for the six months ended
June 30, 2000 to $27.4 million for the six months ended June 30, 2001,
principally as a result of the continued build-out of the Company's cable
networks. Depreciation and amortization expense as a percentage of revenues
increased from 64.5% for the three months ended June 30, 2000 to 70.8% for the
three months ended June 30, 2001 and increased from 66.5% for the six months
ended June 30, 2000 to 70.4% for the six months ended June 30, 2001.

Each of these factors contributed to an operating loss of $10.7 million and
$11.9 million, for the three months ended June 30, 2000 and 2001, respectively,
and $21.2 million and $25.2 million for the six months ended June 30, 2000 and
2001, respectively.

D-DTH SEGMENT OVERVIEW

The Company continues to distribute D-DTH reception systems through the
network of Philips' authorized retailers as well as separate direct sales force.
As of June 30, 2001 the Company had approximately 385,900 D-DTH subscribers as
compared to 378,200 at June 30, 2000.

At the end of May 2001 as a result of the promotion campaign, the Company
reconnected over 50,000 non-paying subscribers and provided them with one
months' free programming together with the offer that if they continue to pay
regularly from July for three consecutive months, they will receive one free
month of HBO. If they continue as good payors for a further three months, the
Company has agreed to right off their outstanding balances. Approximately 10,000
customers responded to the offer and paid in July. Those who did not respond
were disconnected at the end of July 2001. If the Company had not introduced
this promotion campaign it would have had approximately 335,900 subscribers as
at June 30, 2001.

During the first two quarters of the year 2001, the Company has focused on
continuing to expand its D-DTH subscriber base, increase the revenues generated
per subscriber and reduce its operating costs.

During the fourth quarter of the year 2000, the Company began providing
Internet services to its D-DTH customers. Internet subscribers were charged a
subscription fee of $30.00 per month. As of July 2001, the Company decided to
withdraw from providing Internet services to its D-DTH customers.

The Company expects to continue to incur operating losses and negative cash
flows related to its D-DTH business at least for the next year while it develops
and expands its D-DTH subscriber base. The Company's D-DTH business plan
requires the funding of substantial capital expenditures and promotional
incentives in order to expand its D-DTH business.

D-DTH REVENUE. Revenue increased $3.1 million or 25.2% from $12.3 million
for the three months ended June 30, 2000 to $15.4 million for three months ended
June 30, 2001 and increased $9.9 million or 45.8% from $21.6 million for the six
months ended June 30, 2000 to $31.5 for the six months ended June 30, 2001. This
increase was primarily attributable to the appreciation of the Polish zloty
against the US dollar as well as to an increase in monthly subscription rates.

21
<Page>
During the three and six months ended June 30, 2001 the Company generated
approximately $1.7 million and $4.8 million of premium subscription revenue,
respectively, as a result of providing the HBO Poland service pay movie channel
and Wizja Sport to its subscribers, as compared to $2.9 million and
$5.1 million for the three and six months ended June 30, 2000, respectively
(although the Company expanded Wizja Sport into its basic package as of
March 24, 2001).

DIRECT OPERATING EXPENSES. Direct operating expenses increased
$5.3 million, or 57.6%, from $9.2 million for the three months ended June 30,
2000 to $14.5 million for the three months ended June 30, 2001 and increased
$10.7 million or 60.8% from $17.6 million for the six months ended June 30, 2000
to $28.3 million for the six months ended June 30, 2001. These increases over
the corresponding 2000 periods principally resulted from the increase in
programming and customer services related expenses. Direct operating expenses
amounted to 94.2% and 89.8% of revenues for the three and six months ended
June 30, 2001, respectively, compared to 74.8% and 81.5% of revenues for the
three and six months ended June 30, 2000, respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $0.2 million or 4.9% from $4.1 million for the
three months ended June 30, 2000 to $4.3 million for the three months ended
June 30, 2001 and decreased $0.2 million or 2.1% from $9.4 million for the six
months ended June 30, 2000 to $9.2 million for the six months ended June 30,
2001. As a percentage of revenue, selling, general and administrative expenses
amounted to approximately 33.3% and 27.9% for the three months ended June 30,
2000 and 2001, respectively and 43.5% and 29.2% for the six months ended
June 30, 2000 and 2001, respectively.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
$3.8 million or 39.6% from $9.6 million for the three months ended June 30, 2000
to $13.4 million for the three months ended June 30, 2001 and increased
$7.7 million or 41.8% from $18.4 million for the six months ended June 30, 2000
to $26.1 million for the six months ended June 30, 2001, principally as a result
of the increase in equipment necessary for the increased number of our D-DTH
subscribers. Depreciation and amortization expense as a percentage of revenues
amounted to 78.0% and 87.0% for the three months ended June 30, 2000 and 2001,
respectively and 85.2% and 82.9% for the six months ended June 30, 2000 and
2001, respectively.

IMPAIRMENT OF D-DTH EQUIPMENT. Impairment of D-DTH equipment expense
decreased $2.6 million or 100% from $2.6 million for the three months ended
June 30, 2000 to $ 0 million for the three months ended June 30, 2001 and
increased $5.5 million or 148.6% from $3.7 million for the six months ended
June 30, 2000 to $9.2 million for the six months ended June 30, 2001. The
increase in impairment of D-DTH equipment is attributable to the increase in the
number of boxes held by disconnected D-DTH customers during the first quarter of
2000. Impairment of D-DTH equipment expense as a percentage of revenues amounted
to 0% and 21.1% for the three months ended June 30, 2001 and 2000, respectively
and 29.2% and 17.1% for the six months ended June 30, 2001 and 2000,
respectively.

Each of these factors contributed to an operating loss of $16.9 million and
$41.3 million for the three and six months ended June 30, 2001, respectively,
compared to an operating loss of $13.3 million and $27.4 million for the three
and six months ended June 30, 2000.

PROGRAMMING SEGMENT OVERVIEW

The principal objectives of the Company for the programming segment is to
develop, acquire and distribute high-quality Polish-language programming that
can be commercially exploited throughout Poland through its D-DTH and cable
television systems, and to develop and maximize advertising sales.

The Company, both directly and through other joint ventures, produces
television programming for distribution. The Company has developed a
multi-channel, primarily Polish-language programming

22
<Page>
platform under the brand name Wizja TV. Wizja TV's current channel line-up
includes two channels, Wizja Pogoda and Wizja Sport, that are owned and operated
by the Company, and 31 channels that are produced by third parties, 8 of which
are broadcast under exclusive agreements for pay television in Poland. As of
April 2001, the Company discontinued its Wizja Jeden channel.

PROGRAMMING REVENUE. Revenue increased $2.3 million or 16.4% from
$14.0 million for the three months ended June 30, 2000 to $16.3 million for
three months ended June 30, 2001 and increased $8.4 million or 31.5% from
$26.7 million for the six months ended June 30, 2000 to $35.1 million for the
six months ended June 30, 2001. These increases were primarily attributable to
increase in revenue generated from the D-DTH and cable segments.

The programming segment generates most of its revenue from the cable and
D-DTH segments through providing its Wizja TV programming package. The
intersegment revenue represented $13.3 million or 95.0% and $25.6 million or
95.9% for the three and six months ended June 30, 2000, respectively, and
$17.2 million or 105.5% and $32.1 million or 91.5% for the three and six months
ended June 30, 2001, respectively.

The third party revenue primarily related to providing transmission services
to UPC affiliates. The revenue derived from UPC affiliates was negative
$1.3 million or 8.0% and positive $1.6 million or 4.6% for the three and six
months ended June 30, 2001, respectively. During the second quarter terms of
agreements relating to programming and transmission fees were renegotiated with
UPC and certain of its affiliates. The adjustment reflecting these changes have
been back-dated to January 1, 2001 and has led to a negative revenue in the
programming segment during the second quarter.

DIRECT OPERATING EXPENSES. Direct operating expenses decreased
$3.7 million, or 17.0%, from $21.8 million for the three months ended June 30,
2000 to $18.1 million for the three months ended June 30, 2001 and decreased
$6.2 million or 13.5% from $46.0 million for the six months ended June 30, 2000
to $39.8 million for the six months ended June 30, 2001. These decreases
principally were the result of discontinuing Wizja Jeden. Direct operating
expenses amounted to 111.0% of revenues and 113.4% of revenue for the three and
six months ended June 30, 2001, respectively, compared to 155.7% revenues and
172.3% of revenue for the three and six months ended June 30, 2000,
respectively.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $1.5 million or 37.5% from $4.0 million for
the three months ended June 30, 2000 to $2.5 million for the three months ended
June 30, 2001 and decreased $1.8 million or 26.9% from $6.7 million for the six
months ended June 30, 2000 to $4.9 million for the six months ended June 30,
2001. The decrease in selling, general and administrative expenses over the
corresponding 2000 periods was attributable mainly to decrease in administrative
related expenses. As a percentage of revenue, selling, general and
administrative expenses amounted to approximately 28.6% and 15.3% for the three
months ended June 30, 2000 and 2001 and 25.1% and 14.0% for the six months ended
June 30, 2000 and 2001, respectively.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization charges
increased $0.1 million or 1.8% from $5.7 million for the three months ended
June 30, 2000 to $5.8 million for the three months ended June 30, 2001 and
increased $0.2 million or 1.7% from $11.5 million for the six months ended
June 30, 2000 to $11.7 million for the six months ended June 30, 2001.

Depreciation and amortization expense as a percentage of revenues amounted
to 40.7% and 35.6% respectively for the three months ended June 30, 2000 and
2001 and 43.1% and 33.3% and for the six months ended June 30, 2000 and 2001,
respectively.

23
<Page>
Each of these factors contributed to an operating loss of $10.1 million and
$21.3 million for the three and six months ended June 30, 2001, respectively,
compared to an operating loss of $17.5 million and $37.5 million for the three
and six months ended June 30, 2000.

CORPORATE SEGMENT OVERVIEW

The Company's corporate segment consists of corporate overhead costs. The
Company continues to evaluate opportunities for improving its operations and
reducing its cost structure. Corporate expenses amounted to $3.2 million and
$6.1 million for the three and six months ended June 30, 2001, respectively as
compared to $0.8 million and $1.1 million for the corresponding periods in 2000,
the increase being due to management fees charged to the Company by UPC.

NON-OPERATING RESULT

INTEREST EXPENSE. Interest expense increased $5.5 million, or 30.2%, from
$18.2 million for the three months ended June 30, 2000 to $23.7 million for the
three months ended June 30, 2001 and increased $11.7 million or 33.9% from
$34.5 million for the six months ended June 30, 2000 to $46.2 million for the
six months ended June 30, 2001. Interest expense increased mainly as a result of
the additional financing received from UPC for the six months ended June 30,
2001.

INTEREST AND INVESTMENT INCOME. Interest and investment income amounted to
$0.3 million and $0.6 million for the three and six months ended June 30, 2001
and 2000, respectively.

EQUITY IN PROFITS OF AFFILIATED COMPANIES. The Company recorded
$0.4 million of equity in profits of affiliated companies for the three months
ended June 30, 2001 compared to $0.2 million of equity in profits of affiliated
companies for the three months ended June 30, 2000 and $0.4 million of equity in
profits of affiliated companies for the six months ended June 30, 2001 compared
to $0 million of equity in profits of affiliated companies for the six months
ended June 30, 2000.

FOREIGN EXCHANGE GAIN/LOSS, NET. For the three months ended June 30, 2001,
foreign exchange gain amounted to $4.8 million, as compared to a loss of
$7.2 million for the three months ended June 30, 2000. For the six months ended
June 30, 2001, foreign exchange gain amounted to $5.6 million, as compared to a
loss of $9.6 million for the six months ended June 30, 2000. This change from
loss in 2000 to gain in 2001 is primarily due to fluctuation of the Polish
currency during the three and six months ended June 30, 2001.

INCOME TAX EXPENSE. The company recorded $47,000 of income tax expense for
the three months ended June 30, 2001 compared to $3,000 of income tax expense
for the three months ended June 30, 2000 and $83,000 of income tax expense for
the six months ended June 30, 2001 compared to $40,000 of income tax expense for
the six months ended June 30, 2000.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS. Net loss applicable to common
stockholders decreased from a loss of $67.4 million for the three months ended
June 30, 2000 to a loss of $59.9 million for the three months ended June 30,
2001 and increased from a loss of $130.9 million for the six months ended
June 30, 2000 to a loss of $133.6 million for the six months ended June 30, 2001
due to the factors in the four segments discussed above.

LIQUIDITY AND CAPITAL RESOURCES

The Company has met its cash requirements in recent years primarily with
(i) capital contributions and loans from certain of the Company's principal
stockholders, (ii) borrowings under available credit facilities, (iii) cash
flows from operations, (iv) the sale of approximately $200 million of common
stock through the Company's initial public equity offering in August 1997,
(v) the sale of $252 million aggregate principal amount at the maturity of the
14 1/2% Senior Discount Notes in July 1998 with gross

24
<Page>
proceeds of approximately $125 million, ("UPC Polska Notes"), (vi) the sale of
$36,001,321 principal amount at maturity of its Series C Senior Discount Notes
in January 1999 with gross proceeds of $9.8 million, ("Series C Notes"),
(vii) the sale of $256.8 million aggregate principal amount at maturity of its
14 1/2% Senior Discount Notes and Warrants in January 1999 with gross proceeds
of $96.1 million, ("Discount Notes") and (viii) the sale of the Series A 12%
Cumulative Preference Shares, the Series B 12% Cumulative Preference Shares and
Warrants in January 1999 with gross proceeds of $48.2 million.

Since the acquisition of all of the outstanding stock of the Company by UPC
on August 6, 1999, the Company has met its capital requirements primarily
through capital contributions and loans from UPC.

Pursuant to the indentures governing the 9 7/8% Senior Notes due 2003 ("PCI
Notes"), the UPC Polska Notes, the Series C Notes, and the Discount Notes, the
Company is subject to certain restrictions and covenants, including, without
limitation, covenants with respect to the following matters:

- limitations on indebtedness;

- limitations on restricted payments;

- limitations on issuances and sales of capital stock of restricted
subsidiaries;

- limitations on transactions with affiliates;

- limitations on liens;

- limitations on guarantees of indebtedness by subsidiaries;

- purchase of the notes upon a change of control;

- limitations on sale of assets;

- limitations on dividends and other payment restrictions affecting
restricted subsidiaries;

- limitations on investments in unrestricted subsidiaries;

- consolidations, mergers, and sale of assets;

- limitations on lines of business; and

- provision of financial statements and reports.

The Company is in compliance with these covenants.

The indentures covering each of the UPC Polska Notes, Series C Notes,
Discount Notes and the PCI Notes provide that, following a Change of Control (as
defined therein), each noteholder has the right, at such holder's option, to
require the respective issuer to offer to repurchase all or a portion of such
holder's notes at the repurchase prices described below. The Company believes
that the August 6, 1999 acquisition by UPC of the Company constituted a Change
of Control. Accordingly, the Company and PCI made offers to repurchase (the
"Offers") from the holders the UPC Polska Notes, Series C Notes, Discount Notes
and the PCI Notes. The Offers expired at 12:01 PM, New York City time, on
November 2, 1999 (the "Expiration Darte").

In accordance with the terms of the indentures governing the UPC Polska
Notes, Series C Notes, Discount Notes and the PCI Notes, UPC Polska was required
to offer to repurchase the UPC Polska Notes, Series C Notes, and Discount Notes
at 101% of their accreted value at maturity on the Expiration Date plus accrued
and unpaid interest and PCI was required to offer to repurchase the PCI Notes at
the purchase price of 101% of the principal amount owed on the Expiration Date.
As of August 5, 1999, UPC Polska had $376,943,000 aggregate principal amount at
maturity of UPC Polska Notes, Series C Notes, and Discount Notes outstanding and
PCI had $129,668,000 aggregate principal

25
<Page>
amount at maturity of PCI Notes outstanding. Pursuant to the Offer, UPC Polska
purchased $49,139,000 aggregate principal amount at maturity of UPC Polska
Notes, Series C Notes, Discount Notes for an aggregate price of $26,455,014 and
PCI purchased $113,237,000 aggregate principal amount of PCI Notes for an
aggregate price of $114,369,370.

UPC financed the Company's operating and investing activities by making
loans of $38.1 million to UPC Polska and by increasing paid in capital by
$44.5 million in the six months ending June 30, 2001.

On June 30, 2001, the Company had, on a consolidated basis, approximately
$809.8 million aggregate principal amount of indebtedness outstanding, of which
$430.6 million was owed to UPC. The loans from UPC were used primarily for the
repurchase of the UPC Polska Notes, Series C Notes and Discount Notes in the
Change of Control triggered by the purchase of the Company's outstanding stock
by UPC, the purchase of Debenture Stock from PCI (the proceeds of which were
used by PCI primarily for the repurchase of PCI Notes), to fund capital
expenditures, operating losses and working capital primarily related to the
development and operation of its D-DTH business, and for general corporate
purposes and certain other investments, including the acquisition of cable
television networks and certain minority interests in our subsidiaries which are
held by unaffiliated third parties.

As of November 3, 1999, the Company purchased 14,000 shares of Debenture
Stock issued by PCI for $140 million to fund PCI's operations and purchase of
PCI Notes. The Company used a portion of the proceeds of the loans from UPC to
purchase the Debenture Stock. The Debenture Stock is redeemable by PCI on
December 31, 2003 at the issue price plus interest of 10% per annum compounded
annually. To secure its obligations under the Debenture Stock, PCI has pledged
to the Company notes issued to it by its subsidiary PCBV with an aggregate
principal amount of $176,815,000. The PCI Noteholders are equally and ratably
secured by the pledge in accordance with the terms of the PCI Indenture.

The Company had negative cash flows from operating activities of
$44.8 million for the six months ended June 30, 2001 and $34.3 million for the
six months ended June 30, 2000, primarily due to the significant operating costs
associated with the development of its D-DTH service and the Wizja TV
programming platform and due to the operating loss for the respective quarters.

Cash used for the purchase and build-out of the Company's cable television
networks, purchase of D-DTH equipment, including set top decoders, and the
purchase of other property, plant, and equipment was $22.9 million for the six
months ended June 30, 2001 and, $51.0 million for the six months ended June 30,
2000. The six month over six month decrease primarily relates to the Company's
capital expenditures associated with the expansion of its existing cable
networks and the development of its D-DTH service during the year 2000.

On June 30, 2001, the Company was committed to pay at least $430.6 million
in guaranteed payments (including but not limited to payments for D-DTH
reception systems and payments of guaranteed minimum amounts due under
programming agreements and satellite transponder leases) over the next eight
years of which at least approximately $40.5 million was committed to be paid
through the end of 2001.

As of June 30, 2001, the Company has negative working capital and
significant commitments under non-cancelable operating leases and contracts for
programming rights.

The Company's cash on hand will be insufficient to satisfy all of its
commitments and to complete its current business plan. UPC and the Company are
evaluating various alternatives to meet the Company's capital needs. Future
sources of financing for the Company could include public or private debt or
bank financing or any combination thereof, subject to the restrictions contained
in the indentures governing the outstanding senior indebtedness of the Company,
UPC, and UnitedGlobalCom, Inc., UPC's parent. Moreover, if the Company's plans
or assumptions change, if its assumptions prove inaccurate, if it consummates
unanticipated investments in or acquisitions of other

26
<Page>
companies, if it experiences unexpected costs or competitive pressures, or if
existing cash, and projected cash flow from operations prove to be insufficient,
the Company may need to obtain greater amounts of additional financing. While it
is the Company's intention to enter only into new financing or refinancings that
it considers advantageous, there can be no assurance that such sources of
financing would be available to the Company in the future, or, if available,
that they could be obtained on terms acceptable to the Company. The Company is
dependent on its parent, UPC, to provide financing to achieve the Company's
business strategy. UPC has declared that it will continue to financially support
the Company and its subsidiaries as a going concern, and accordingly enable the
Company and its subsidiaries to meet their financial obligations if and when
needed, for the period at least through January 31, 2002.

CURRENT OR ACCUMULATED EARNINGS AND PROFITS

For the six months ended June 30, 2001, the Company had no current or
accumulated earnings and profits. Therefore, none of the interest which accreted
during the six months ended June 30, 2001 with respect to the Company's 14 1/2%
Senior Discount Notes due 2008, 14 1/2% Series B Discount Notes due 2008,
14 1/2% Senior Discount Notes due 2009, 14 1/2% Series B Discount Notes due 2009
and its Series C Senior Discount Notes will be deemed to be a `Dividend
Equivalent Portion' as such term is defined in Section 163(e)(5)(B) of the
Internal Revenue Code, as amended.

NEW ACCOUNTING PRINCIPLES

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES, SFAS 133 establishes accounting and reporting standards
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded on the balance sheet as
either an asset or liability measured at its fair value. The statement requires
that changes in the derivative's

27
<Page>
fair value be recognized currently in earnings unless specific accounting
criteria are met. If a derivative instrument qualifies for hedge accounting, the
gains or losses from the derivative may offset results from the hedged item in
the statement of operations or other comprehensive income, depending on the type
of hedge. To adopt hedge accounting, a company must formally document, designate
and assess the effectiveness of transactions that receive hedge accounting.

In June 2000, the Financial Accounting Standards Board issued SFAS 138,
ACCOUNTING FOR CERTAIN DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES.
This statement addresses a limited number of issues causing implementation
difficulties for numerous entities that apply SFAS 133 and this statement amends
the accounting and reporting standards of SFAS 133 for certain derivative
instruments and certain hedging accounting.

SFAS 137 delayed the effective date of SFAS 133 to fiscal years beginning
after June 15, 2000. A company may implement the statements as of the beginning
of any fiscal quarter after issuance; however, SFAS 133 cannot be applied
retroactively.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS
(SAB 101). SAB 101 outlines the SEC's views on applying generally accepted
accounting principles to revenue recognition in financial statements.
Specifically, the bulletin provides both general and specific guidance as to the
periods in which companies should recognize revenues. In addition, SAB 101 also
highlights factors to be considered when determining whether to recognize
revenues on a gross or net basis. SAB 101, as amended by SAB 101/A and SAB
101/B, was effective beginning no later than their fourth fiscal quarter of the
fiscal year beginning after December 15, 1999; as the Company is a calendar
year-end company, this was the quarter ended December 31, 2000.

SAB 101 permitted the effects of the changes to be recorded as a cumulative
effect of a change in accounting principle during the quarter ended
December 31, 2000. As the Company's accounting policies for its cable television
services are still accounted for under SFAS 51, FINANCIAL REPORTING BY CABLE
TELEVISION COMPANIES, there was no immediate effect on the Company. However,
with the introduction of Internet services in the fourth quarter of 2000,
revenue recognition for Internet related services has been and will be reported
in accordance with SAB 101.

28
<Page>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

The principal market risk (i.e., the risk of loss arising from adverse
changes in market rates and prices) to which the Company is exposed is foreign
exchange rate risk from fluctuations in the Polish zloty currency exchange rate.
The Company's long term debt is primarily subject to a fixed rate, and therefore
variations in the interest rate do not have a material impact on net interest
expense.

FOREIGN EXCHANGE AND OTHER INTERNATIONAL MARKET RISKS

Operating in international markets involves exposure to movements in
currency exchange rates. Currency exchange rate movements typically affect
economic and financing growth, inflation, interest rates, governmental actions
and other factors. These changes, if material, can cause the Company to adjust
its financing and operating strategies. The discussion of changes in currency
exchange rates below does not incorporate these other important economic
factors.

International operations constitute 100% of the Company's consolidated
operating loss for the six months ended June 30, 2001. Some of the Company's
operating and financing expenses and capital expenditures are expected to
continue to be denominated in or indexed in U.S. dollars. By contrast,
substantially all of the Company's revenues are denominated in zloty. Therefore,
any devaluation of the zloty against the U.S. dollar that the Company is unable
to offset through price adjustments will require it to use a larger portion of
its revenue to service its U.S. dollar denominated obligations and contractual
commitments.

The Company estimates that a further 10% change in foreign exchange rates
would impact reported operating loss by approximately $5.8 million. In other
terms a 10% depreciation of the Polish zloty and British pound against the U.S.
dollar, would result in a $5.8 million decrease in the reported operating loss.
This was estimated using 10% of the Company's operating loss after adjusting for
unusual impairment and other items including U.S. dollar denominated or indexed
expenses. The Company believes that this quantitative measure has inherent
limitations because, as discussed in the first paragraph of this section, it
does not take into account any governmental actions or changes in either
customer purchasing patterns or the Company's financing or operating strategies.

The Company does not generally hedge translation risk. While the Company may
consider entering into transactions to hedge the risk of exchange rate
fluctuations, there is no assurance that it will be able to obtain hedging
arrangements on commercially satisfactory terms. Therefore, shifts in currency
exchange rates may have an adverse effect on the Company's financial results and
on its ability to meet its U.S. dollar denominated debt obligations and
contractual commitments.

Poland has historically experienced high levels of inflation and significant
fluctuations in the exchange rate for the zloty. The Polish government has
adopted policies that slowed the annual rate of inflation from approximately
250% in 1990 to approximately 11.8% in 1998, approximately 7.3% in 1999 and
approximately 10.1% in 2000. The rate of inflation for the six months ended
June 30, 2000 was approximately 6.4%. The exchange rate for the zloty has
stabilized and the rate of devaluation of the zloty has generally decreased
since 1991. The zloty fluctuated against the U.S. dollar during 2000 and the
first six months of 2001 but the actual exchange rates as of January 1, 2000,
December 31, 2000 and June 30, 2001 remained substantially the same. Inflation
and currency exchange fluctuations may have a material adverse effect on the
business, financial condition and results of operations of the Company.

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<Page>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in litigation from time to time in the ordinary
course of business. In management's opinion, the litigation in which the Company
is currently involved, and which has not been settled, individually and in the
aggregate, is not material to the Company's business, financial condition or
results of operations. See also Note 9 to the unaudited consolidated financial
statements, for a description of the settlement of the PCBV minority
stockholders' claim.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS:

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION:

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<Table>

3(i) Amended and Restated Certificate of Incorporation of @
Entertainment, Inc., incorporated by reference as
Exhibit 3(i) to Form 10-K, filed on April 2, 2001.
3(ii) Amended and Restated By-Laws of @ Entertainment, Inc.,
incorporated by reference as Exhibit 3(ii) to Form 10-K,
filed on April 2, 2001.
4.1 Indenture dated as of July 14, 1998, between @
Entertainment, Inc. and Bankers Trust Company, as trustee,
incorporated by reference as Exhibit 4.11 to Form S-4, filed
on August 5, 1998.
4.2 Indenture dated as of January 20, 1999, between @
Entertainment, Inc. and Bankers Trust Company, as trustee,
incorporated by reference as Exhibit 4.1 to Form 10-K, filed
on August 2, 2001.
4.3 Indenture dated as of January 27, 1999, between @
Entertainment, Inc. and Bankers Trust Company, as trustee,
incorporated by reference as Exhibit 4.2 to Form 10-K, filed
on August 2, 2001.
11 Statement re computation of per share earnings (contained in
Note 8 to Unaudited Financial Statements in this Quarterly
Report on 10-Q).
</Table>

(b) Reports on Form 8-K.

None.

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<Page>
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

<Table>

UPC POLSKA, INC.

By: /s/ SIMON BOYD
-----------------------------------------
Simon Boyd
Chief Financial Officer
(Principal Financial and
Principal Accounting Officer)

DATE: August 14, 2001
</Table>