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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 2)

Filed by the Registrant: þ
Filed by a Party other than the Registrant: o

Check the appropriate box:
þ Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12

Liberty Media International, Inc.


(Name of Registrant as Specified in its Charter)

N/A


(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o No fee required.

þ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

  (1)   Title of each class of securities to which transaction applies:
Liberty Media International, Inc. Series A Common Stock, par value $.01 per share
Liberty Media International, Inc. Series B Common Stock, par value $.01 per share
UnitedGlobalCom, Inc. Class A Common Stock, par value $.01 per share
UnitedGlobalCom, Inc. Class C Common Stock, par value $.01 per share
 
  (2)   Aggregate number of securities to which transaction applies:
As of December 31, 2004, (1) 167,205,861 outstanding shares of LMI Series A Common Stock, which include options to acquire 1,690,899 shares of LMI Series A Common Stock, (2) 10,331,016 outstanding shares of LMI Series B Common Stock, which include options to acquire 3,066,716 shares of LMI Series B Common Stock, (3) 429,845,505 outstanding shares of UGC Class A Common Stock, which include (x) equity incentive awards to acquire 48,617,610 shares of UGC Class A Common Stock, (y) 1,629,284 shares of UGC Class A Common Stock placed in escrow in connection with a pending transaction and (z) 15,396,224 shares of UGC Class A Common Stock reserved for issuance in connection with certain outstanding claims, and (4) 2,141,272 outstanding shares of UGC Class C Common Stock.

  (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
Based upon the averages of the high and low prices reported for the LMI Series A Common Stock, LMI Series B Common Stock and UGC Class A Common Stock, respectively, on the Nasdaq National Market on February 10, 2005, which were $44.54, $47.18 and $9.64, respectively. The filing fee is being calculated based upon an aggregate transaction value of $12,099,118,914.10, which is obtained by: (1) multiplying (x) the number of outstanding shares of LMI Series A Common Stock listed above by (y) $44.54, and (2) adding thereto the product of (x) the number of outstanding shares of LMI Series B Common Stock listed above and (y) $47.18, and (3) adding thereto the product of (x) the number of outstanding shares of UGC Class A Common Stock listed above and (y) $9.64, and (4) adding thereto the product of (x) the number of outstanding shares of UGC Class C Common Stock listed above and (y) $9.64 (shares of UGC Class C Common Stock are not publicly traded, but they are convertible at the option of the holder into shares of UGC Class A Common Stock, on a one-to-one basis).

 


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  (4)   Proposed maximum aggregate value of transaction:
$12,099,118,914.10
 
  (5)   Total fee paid:
$1,424,066.30, estimated pursuant to Section 14(g) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, on the basis of $117.70 per million of the estimated maximum aggregate value of the transaction.

þ    Fee paid previously with preliminary materials.
 
o    Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

  (1)   Amount previously paid:
 
  (2)   Form, schedule or registration statement no.:
 
  (3)   Filing party:
 
  (4)   Date filed:

 


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The information in this joint proxy statement/ prospectus is not complete and may be changed. We may not sell the securities offered by this joint proxy statement/ prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/ prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted.
Subject to completion dated April 29, 2005
(LMI LOGO)
[                    ], 2005
To the stockholders of Liberty Media International, Inc.:
The 2005 Annual Meeting of Stockholders of Liberty Media International, Inc. (LMI) will be held at [                    ], on [                    ], 2005 at [                    ] a.m., local time. At the annual meeting, you will be asked to consider and vote on the “merger proposal,” a proposal to adopt the Agreement and Plan of Merger, dated as of January 17, 2005, among LMI, UnitedGlobalCom, Inc. (UGC), Liberty Global, Inc. and two subsidiaries of Liberty Global. If the merger proposal is approved, LMI and UGC will be combined under a new parent company named “Liberty Global, Inc.” The combination of the two companies will create a global broadband company with significant scale outside of the United States. LMI and UGC will each designate one-half of the directors of Liberty Global, and the senior management of Liberty Global will consist of senior executives of LMI and UGC.
LMI currently controls UGC. In the mergers combining LMI and UGC:
  •  LMI stockholders will receive, for each share of LMI Series A or Series B common stock they own, one share of the corresponding series of Liberty Global stock; and
 
  •  UGC stockholders (other than LMI and its wholly owned subsidiaries) will have the right to elect to receive, for each share of UGC common stock they own, 0.2155 of a share of Liberty Global Series A common stock or $9.58 in cash. The cash election will be subject to proration, so that the total cash consideration paid does not exceed 20% of the aggregate value of the merger consideration payable to the public stockholders of UGC.
The exchange ratios at which LMI shares and UGC shares will be converted into Liberty Global shares are fixed, and there will be no adjustment in the exchange ratios for any changes in the market price of either the LMI or UGC common stock. Depending on the number of UGC stockholders who make the cash election, we estimate that former LMI stockholders will own between 69% and 73% of the equity and between 75% and 79% of the aggregate voting power of Liberty Global, with the remaining percentages of equity and voting power being owned by the former UGC stockholders, other than LMI and its wholly owned subsidiaries (based upon the LMI Series A closing stock price on April 12, 2005 and outstanding share information for UGC as of March 31, 2005). It is anticipated that Liberty Global Series A and Series B common stock will be listed on the Nasdaq National Market under the symbols “LBTYA” and “LBTYB”, respectively, the same symbols under which LMI common stock currently trades.
At the annual meeting, you will also be asked to consider and vote upon:
  •  the “LMI election of directors proposal,” a proposal to elect David E. Rapley and Larry E. Romrell to serve as Class I members of our board of directors until the 2008 annual meeting of LMI stockholders or until their successors are elected;
 
  •  the “LMI incentive plan proposal,” a proposal to approve the Liberty Media International, Inc. 2004 Incentive Plan (As Amended and Restated Effective March 9, 2005);


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  •  the “LMI auditors ratification proposal,” a proposal to approve the selection of KPMG LLP as LMI’s independent auditors for the year ending December 31, 2005; and
 
  •  such other proposals, if any, as may properly come before the annual meeting.
This document describes the annual meeting, the proposals to be considered and voted upon at the annual meeting and related matters. Our board of directors has approved the merger agreement and the merger involving LMI and recommends that you vote “FOR” the adoption of the merger agreement. Our board has also considered and approved each of the other proposals described above and recommends that you vote “FOR” each of them.
We are very excited about the prospective business combination of our company with UGC, and we look forward to obtaining your approval of the merger proposal and the other proposals being submitted to you at the annual meeting.
Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the annual meeting, please vote as soon as possible to make sure that your shares are represented.
Thank you for your continued support and interest in our company.
  Sincerely,
 
  John C. Malone
  Chairman of the Board, Chief Executive Officer
  and President
  Liberty Media International, Inc.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the mergers or the securities being offered in the mergers, has passed upon the merits or fairness of the mergers or passed upon the adequacy or accuracy of the disclosure in this booklet. Any representation to the contrary is a criminal offense.
Investing in Liberty Global’s securities involves risks. See “Risk Factors” beginning on page 59.
The accompanying joint proxy statement/ prospectus is dated [                    ], 2005 and is first being mailed on or about [                    ], 2005 to LMI stockholders of record as of 5:00 p.m., New York City time, on May 3, 2005.


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The information in this joint proxy statement/ prospectus is not complete and may be changed. We may not sell the securities offered by this joint proxy statement/ prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/ prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted.
Subject to completion dated April 29, 2005
(UGC LOGO)
[                    ], 2005
To the stockholders of UnitedGlobalCom, Inc.:
UnitedGlobalCom, Inc. (UGC) has entered into a merger agreement with Liberty Media International, Inc. (LMI) providing for the combination of our two companies under a new parent company named “Liberty Global, Inc.” The combination of our two companies will create a global broadband company with significant scale outside of the United States. LMI and UGC will each designate one-half of the directors of Liberty Global, and the senior management of Liberty Global will consist of senior executives of LMI and UGC.
LMI currently controls UGC. In the mergers combining LMI and UGC:
  •  UGC stockholders (other than LMI and its wholly owned subsidiaries) will have the right to elect to receive, for each share of UGC common stock they own, 0.2155 of a share of Liberty Global Series A common stock or $9.58 in cash. The cash election will be subject to proration, so that the total cash consideration paid does not exceed 20% of the aggregate value of the merger consideration payable to the public stockholders of UGC; and
 
  •  LMI stockholders will receive, for each share of LMI Series A or Series B common stock they own, one share of the corresponding series of Liberty Global stock.
The exchange ratios at which LMI shares and UGC shares will be converted into Liberty Global shares are fixed, and there will be no adjustment in the exchange ratios for any changes in the market price of either the LMI or UGC common stock. Depending on the number of UGC stockholders who make the cash election, we estimate that former UGC stockholders (other than LMI and its wholly owned subsidiaries) will own between 27% and 31% of the equity and between 21% and 25% of the aggregate voting power of Liberty Global, with the remaining percentages of equity and voting power being owned by the former LMI stockholders (based upon the LMI Series A closing stock price on April 12, 2005 and outstanding share information for UGC as of March 31, 2005). It is anticipated that Liberty Global Series A and Series B common stock will be listed on the Nasdaq National Market under the symbols “LBTYA” and “LBTYB”, respectively, the same symbols under which LMI common stock currently trades.
UGC is calling a special meeting of its stockholders to consider and vote on the merger agreement and the merger involving UGC. The special meeting will be held at [                    ], on [                    ], 2005 at [                    ] a.m., local time
The board of directors of UGC has approved the merger agreement and the merger involving UGC and recommends that UGC stockholders vote “FOR” the adoption of the merger agreement. In approving the merger agreement and making its recommendation, the UGC board considered (1) the unanimous determination of a special committee of members of the UGC board (who are independent under the rules of the Nasdaq Stock Market and have no relationship with LMI or any of its affiliates that the special committee viewed as undermining its independence) that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC and (2) the approval by the special committee of the merger agreement in compliance with the rules of the Nasdaq Stock Market. The special committee was formed in compliance


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with the rules of the Nasdaq Stock Market for purposes of negotiating exclusively on UGC’s behalf any transaction with LMI.
Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please vote as soon as possible to make sure that your shares are represented. If you do not vote, it will have the same effect as a vote “AGAINST” the adoption of the merger agreement.
We are very excited about the prospective business combination of our company with LMI, and we look forward to obtaining your approval at the special meeting.
  Sincerely,
 
  Gene W. Schneider
  Chairman of the Board
  UnitedGlobalCom, Inc.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the mergers or the securities being offered in the mergers, has passed upon the merits or fairness of the mergers or passed upon the adequacy or accuracy of the disclosure in this booklet. Any representation to the contrary is a criminal offense.
Investing in Liberty Global’s securities involves risks. See “Risk Factors” beginning on page 59.
The accompanying joint proxy statement/ prospectus is dated [                    ], 2005 and is first being mailed on or about [                    ], 2005 to UGC stockholders of record as of 5:00 p.m., New York City time, on May 3, 2005.


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REFERENCES TO ADDITIONAL INFORMATION
LMI and UGC are each subject to the information and reporting requirements of the Securities Exchange Act of 1934 and, in accordance with the Exchange Act, LMI and UGC each file periodic reports and other information with the Securities and Exchange Commission. In addition, this joint proxy statement/ prospectus incorporates important business and financial information about UGC from other documents that are not included in or delivered with this joint proxy statement/ prospectus. This information is available to you without charge upon your written or oral request. You can obtain copies of documents filed by LMI and UGC with the Securities and Exchange Commission, including the UGC documents incorporated by reference in this joint proxy statement/ prospectus, through the Securities and Exchange Commission website at http://www.sec.gov or by contacting LMI or UGC, as applicable, by writing or telephoning the office of Investor Relations:
     
Liberty Media International, Inc.
  UnitedGlobalCom, Inc.
12300 Liberty Boulevard
  4643 South Ulster Street, Suite 1300
Englewood, Colorado 80112
  Denver, Colorado 80237
Telephone: (800) 783-7676
  Telephone: (303) 770-4001
If you would like to request any documents from either LMI or UGC, please do so by [                    ], 2005 in order to receive them before the applicable stockholders meeting. If you request any documents, they will be mailed to you by first class mail, or another equally prompt means, within one business day after your request is received.
See “Additional Information — Where You Can Find More Information” beginning on page 161.


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(LOGO)
LIBERTY MEDIA INTERNATIONAL, INC.
Notice of Annual Meeting of Stockholders
to be Held [                        ], 2005
Dear Liberty Media International, Inc. Stockholder:
You are cordially invited to attend, and notice is hereby given of, the 2005 Annual Meeting of Stockholders of Liberty Media International, Inc. (LMI) to be held at [                    ], on [                    ], 2005 at [                    ] a.m., local time, for the following purposes:
        1. To consider and vote upon a proposal (which we refer to as the merger proposal) to adopt the Agreement and Plan of Merger, dated as of January 17, 2005, among LMI, UnitedGlobalCom, Inc. (UGC), Liberty Global, Inc. and two subsidiaries of Liberty Global pursuant to which, among other things, LMI and UGC would become wholly owned subsidiaries of Liberty Global and each outstanding share of LMI common stock would be exchanged for one share of the corresponding series of Liberty Global common stock;
 
        2. To consider and vote upon a proposal (which we refer to as the LMI election of directors proposal) to elect David E. Rapley and Larry E. Romrell to serve as Class I members of our board of directors until the 2008 annual meeting of LMI stockholders or until their successors are elected;
 
        3. To consider and vote upon a proposal (which we refer to as the LMI incentive plan proposal) to approve the Liberty Media International, Inc. 2004 Incentive Plan (As Amended and Restated Effective March 9, 2005);
 
        4. To consider and vote upon a proposal (which we refer to as the LMI auditors ratification proposal) to ratify the selection of KPMG LLP as LMI’s independent auditors for the year ending December 31, 2005; and
 
        5. To transact such other business as may properly be presented at the meeting or any postponements or adjournments of the meeting.
Holders of record of LMI common stock as of 5:00 p.m., New York City time, on May 3, 2005, the record date for the LMI annual meeting, will be entitled to notice of and to vote at the LMI annual meeting or any adjournment or postponement thereof. The affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of LMI common stock outstanding on the record date, voting together as a single class, is required to approve the merger proposal. A plurality of the affirmative votes of the shares of LMI common stock outstanding on the record date, voting together as a single class, that are voted in person or by proxy at the annual meeting is required to elect Messrs. Rapley and Romrell as Class I members of LMI’s board of directors pursuant to the LMI election of directors proposal. The affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of LMI common stock outstanding on the record date that are present at the annual meeting, in person or by proxy, voting together as a single class, is required to approve the LMI incentive plan proposal and the LMI auditors ratification proposal. A list of stockholders entitled to vote at the LMI annual meeting will be available at the office of LMI for review by any LMI stockholder, for any purpose germane to the LMI annual meeting, for at least 10 days prior to the LMI annual meeting.
If the merger proposal is approved, the LMI board of directors, including the members elected at the annual meeting, will be succeeded by a board of directors that we expect will be comprised of officers of Liberty Global because LMI will become a subsidiary of Liberty Global in the mergers.
Pursuant to a voting agreement entered into between John C. Malone, the Chairman of the Board, Chief Executive Officer and President of LMI, and UGC, Mr. Malone has agreed to vote the shares of LMI


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Series A common stock and LMI Series B common stock owned by him or which he has the right to vote (representing, as of March 31, 2005, approximately 26.5% of the outstanding voting power of LMI) “FOR” the merger proposal.
We describe the merger proposal, as well as the other enumerated proposals to be considered at the annual meeting, in more detail in the accompanying joint proxy statement/ prospectus. We encourage you to read the joint proxy statement/ prospectus in its entirety before voting.
The board of directors of LMI unanimously recommends that you vote “FOR” the approval of the merger proposal and each of the other enumerated proposals to be considered and voted upon at the annual meeting.
Your vote is very important, regardless of the number of shares you own. To make sure your shares are represented at the annual meeting, please vote as soon as possible, whether or not you plan to attend the annual meeting. You may vote by proxy in any one of the following ways:
  •  Use the toll-free telephone number shown on the proxy card;
 
  •  Use the Internet website shown on the proxy card; or
 
  •  Complete, sign, date and promptly return the enclosed proxy card in the postage-paid envelope. It requires no postage if mailed in the United States.
You may revoke your proxy in the manner described in the accompanying joint proxy statement/ prospectus. If you attend the LMI annual meeting, you may vote your shares in person even if you have previously submitted a proxy.
  By Order of the Board of Directors,
 
 
 
  Elizabeth M. Markowski
  Secretary
Englewood, Colorado
[                    ], 2005
PLEASE COMPLETE, EXECUTE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY OR VOTE BY TELEPHONE OR OVER THE INTERNET, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE LMI ANNUAL MEETING. IF YOU HAVE ANY QUESTIONS ABOUT THE PROPOSALS OR ABOUT VOTING YOUR LMI SHARES, PLEASE CALL D.F. KING & CO. AT (800) 829-6551.


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(UGC LOGO)
UNITEDGLOBALCOM, INC.
Notice of Special Meeting of Stockholders
to be Held [                        ], 2005
Dear UnitedGlobalCom, Inc. Stockholder:
You are cordially invited to attend, and notice is hereby given of, a special meeting of stockholders of UnitedGlobalCom, Inc. (UGC) to be held at [                    ], on [                    ], 2005 at [                    ] a.m., local time, for the following purposes:
        1. To consider and vote upon a proposal (which we refer to as the merger proposal) to adopt the Agreement and Plan of Merger, dated as of January 17, 2005, among Liberty Media International, Inc. (LMI), UGC, Liberty Global, Inc. and two subsidiaries of Liberty Global pursuant to which, among other things, UGC and LMI would become wholly owned subsidiaries of Liberty Global and UGC stockholders (other than LMI and its wholly owned subsidiaries) would have the right to elect to receive, for each share of UGC common stock they own, 0.2155 of a share of Liberty Global Series A common stock or $9.58 in cash (with the cash election subject to proration so that the total cash consideration paid does not exceed 20% of the aggregate value of the merger consideration payable to the public stockholders of UGC); and
 
        2. To transact such other business as may properly be presented at the meeting or any postponements or adjournments of the meeting.
The approval of the merger proposal requires a vote of the holders of UGC common stock, with all classes voting together as a single class, that satisfies two criteria:
  •  first, the merger proposal must be approved by the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of UGC common stock outstanding on the record date; and
 
  •  second, the merger proposal must be approved by the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of UGC common stock outstanding on the record date, exclusive of the shares beneficially owned by LMI, Liberty Media Corporation (Liberty) or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC.
As LMI has agreed in the merger agreement to vote its UGC shares (representing approximately 91% in aggregate UGC voting power) “FOR” the merger proposal, the first criteria will be met.
Holders of record of UGC common stock as of 5:00 p.m., New York City time, on May 3, 2005, the record date of the UGC special meeting, will be entitled to notice of and to vote at the UGC special meeting or at any adjournment or postponement thereof. A list of stockholders entitled to vote at the UGC special meeting will be available at UGC’s office for review by any UGC stockholder, for any purpose germane to the UGC special meeting, for at least 10 days prior to the UGC special meeting.
We describe the merger proposal in more detail in the accompanying joint proxy statement/ prospectus. We encourage you to read the joint proxy statement/ prospectus in its entirety before voting.
The board of directors of UGC, after consideration of the favorable recommendation of, and approval of the merger agreement in compliance with the rules of the Nasdaq Stock Market by, a special committee of independent directors of the UGC board, unanimously recommends that you vote “FOR” the approval of the merger proposal.


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Your vote is very important, regardless of the number of shares you own. To make sure your shares are represented at the special meeting, please vote as soon as possible, whether or not you plan to attend the special meeting. You may vote by proxy in any one of the following ways:
  •  Use the toll-free telephone number shown on the proxy card;
 
  •  Use the Internet website shown on the proxy card; or
 
  •  Complete, sign, date and promptly return the enclosed proxy card in the postage-paid envelope. It requires no postage if mailed in the United States.
You may revoke your proxy in the manner described in the accompanying joint proxy statement/ prospectus. If you attend the UGC special meeting, you may vote your shares in person even if you have previously submitted a proxy.
  By Order of the Board of Directors,
 
 
  Ellen P. Spangler
  Secretary
Denver, Colorado
[                    ], 2005
PLEASE COMPLETE, EXECUTE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY OR VOTE BY TELEPHONE OR OVER THE INTERNET, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE UGC SPECIAL MEETING. IF YOU HAVE ANY QUESTIONS ABOUT THE MERGER PROPOSAL OR ABOUT VOTING YOUR UGC SHARES, PLEASE CALL D.F. KING & CO. AT (800) 628-8208.


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QUESTIONS AND ANSWERS
The questions and answers below highlight only selected information from this joint proxy statement/ prospectus. They do not contain all of the information that may be important to you. You should read carefully the entire joint proxy statement/ prospectus, including the appendices included herein, and the additional documents incorporated by reference in this joint proxy statement/ prospectus to fully understand the matters being considered at the stockholders meetings.
Concerning the Mergers
Q:  What is the proposed business combination transaction for which LMI stockholders and UGC stockholders are being asked to vote?
 
A:  LMI and UGC have agreed to combine their businesses by each merging with a separate wholly owned subsidiary of a new parent company named Liberty Global, Inc. The merger involving LMI requires the approval of the stockholders of LMI, while the merger involving UGC requires the approval of the stockholders of UGC (including a “majority of the minority” approval). Stockholders of LMI and stockholders of UGC (other than LMI and its wholly owned subsidiaries) would become stockholders of Liberty Global.
 
Q:  What will holders of LMI common stock receive as a result of the mergers?
 
A:  Each share of LMI Series A common stock or LMI Series B common stock owned by an LMI stockholder will be exchanged for one share of the corresponding series of Liberty Global common stock. Each series of Liberty Global common stock will have the same rights, powers and preferences as the corresponding series of LMI common stock.
 
Q:  What will holders of UGC common stock receive as a result of the mergers?
 
A:  Stockholders of UGC (other than LMI and its wholly owned subsidiaries) may elect to receive, for each share of UGC common stock owned by them, either:
        •  0.2155 of a share of Series A common stock of Liberty Global (plus cash in lieu of any fractional share interest), which we refer to as the stock election; or
 
        •  $9.58 in cash, without interest, which we refer to as the cash election.
    UGC stockholders who make the cash election will be subject to proration so that, in the aggregate, the cash consideration paid to UGC stockholders does not exceed 20% of the aggregate value of the merger consideration payable to UGC’s public stockholders. If proration is made, any share as to which a UGC stockholder elected to receive cash but with respect to which such election is denied due to proration will be converted into 0.2155 of a share of Series A common stock of Liberty Global (plus cash in lieu of any fractional share interest). See “The Transaction Agreements — Merger Agreement — UGC Stockholders Making Stock and Cash Elections; Proration.”
Q:  Where will Liberty Global common stock trade?
 
A:  We expect Liberty Global Series A common stock and Liberty Global Series B common stock to trade on the Nasdaq Stock Market, following the mergers, under the symbols “LBTYA” and “LBTYB,” respectively, the same symbols under which LMI common stock currently trades.
 
Q:  How do UGC stockholders make their cash election or stock election?
 
A:  A form of election is included with the joint proxy statement/ prospectus being mailed to UGC stockholders. To make a cash election or a stock election, UGC stockholders must properly complete, sign and send the form of

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election, together with the shares of UGC common stock as to which the election relates, to EquiServe Trust Company N.A., the exchange agent, at the following address:
    EquiServe Trust Company N.A.
         
By Mail:
  By Overnight Delivery:   By Hand:
EquiServe Trust Company N.A.
  EquiServe Trust Company N.A.   EquiServe Trust Company N.A.
LMI/UGC Transaction
  LMI/UGC Transaction   LMI/UGC Transaction
Attn: Corp. Actions
  Attn: Corp. Actions   Attn: Corp. Actions
P.O. Box 859208
  161 Baystate Drive   17 Battery Place, 11th Floor
Braintree, MA 02185-9208
  Braintree, MA 02184   New York, NY 10004
    Questions regarding the cash or stock elections should be directed to D.F. King & Co. at:
    D.F. King & Co., Inc.
    48 Wall Street
    New York, NY 10005
    (800) 628-8208
    The exchange agent must receive the form of election and UGC shares to which the election relates by the election deadline. The election deadline will be 5:00 p.m., New York City time, on [                    ], 2005, which we will extend if the mergers are not expected to be completed on or before the fourth business day after the initial election deadline.
    If you own shares of UGC common stock in “street name” through a broker, bank or other nominee and you wish to make an election, you should seek instructions from the broker, bank or other nominee holding your shares concerning how to make a valid election.
Q:  May UGC stockholders make the cash election for some of their UGC shares and the stock election for other UGC shares they own?
 
A:  Yes. UGC stockholders who properly complete the form of election may make the cash election for some of their shares and the stock election for other UGC shares they own. As mentioned above, a UGC stockholder who makes a cash election will be subject to possible proration.
 
Q:  May UGC stockholders change their election after they have submitted their form of election?
 
A:  Yes, as long as the exchange agent receives from the stockholder, before the election deadline, a written notice of revocation or a new election form. If an election form was submitted by a broker, bank or other nominee, the broker, bank or other nominee should be contacted as to how to revoke or change the election so submitted.
 
Q:  Where can UGC stockholders obtain additional forms of election?
 
A:  Additional forms of election can be obtained by calling D.F. King & Co. at (800) 628-8208.
 
Q:  May UGC stockholders trade their shares of UGC common stock after making an election and submitting their shares to the exchange agent?
 
A:  No. UGC stockholders will be unable to sell or otherwise transfer their shares of UGC common stock once they have been submitted to the exchange agent in connection with their election, unless and until their election is revoked and their shares are returned to them. The exchange agent will promptly return shares of UGC common stock following receipt of a written notice of revocation as to those shares or if the merger agreement is terminated.
 
Q:  What if a UGC stockholder fails to timely submit an election form?
 
A:  If the exchange agent does not receive a properly completed form of election from a UGC stockholder before the election deadline, together with the shares of UGC common stock as to which the election relates, then that stockholder will be treated as though he or she made the stock election. UGC stockholders bear the risk of delivery and should send their election form and stock certificates by courier or by hand to the appropriate addresses shown in the form of election. UGC stockholders who hold their shares in “street name” should promptly contact their broker, bank or other nominee as to their choice of election to ensure that their election and shares of UGC stock are timely received by the exchange agent.

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Q:  May a UGC stockholder who votes against the UGC merger submit a form of election?
 
A:  Yes. Irrespective of the manner in which a UGC stockholder votes on the merger proposal, that stockholder should submit a form of election in the event the merger proposal is adopted. UGC stockholders who do not make an election will not be entitled to any portion of the cash consideration and will be treated as though they have made the stock election as to all of their shares of UGC common stock.
 
Q:  Can LMI stockholders make the cash election?
 
A:  No. If the mergers are approved, each share of LMI Series A common stock or LMI Series B common stock owned by an LMI stockholder will be exchanged for one share of the corresponding series of Liberty Global common stock. Because LMI stockholders do not have an election, they will not receive an election form with the joint proxy statement/ prospectus being mailed to them.
 
Q:  What stockholder approvals are required to approve the merger proposal?
 
A:  In order for the mergers to occur, the LMI stockholders must approve the merger proposal at the LMI annual meeting and the UGC stockholders must approve the merger proposal at the UGC special meeting.
        •  For LMI, the approval of the merger proposal requires the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of LMI common stock outstanding on the record date for the LMI annual meeting, voting together as a single class.
 
     Pursuant to a voting agreement entered into between John C. Malone, the Chairman of the Board, Chief Executive Officer and President of LMI, and UGC, Mr. Malone has agreed to vote the shares of LMI Series A common stock and LMI Series B common stock owned by him or which he has the right to vote (representing, as of March 31, 2005, approximately 26.5% of the aggregate voting power of LMI) in favor of the approval of the merger proposal. See “The Transaction Agreements — Voting Agreement.” In addition, the directors and executive officers of LMI (other than Mr. Malone), who together beneficially own shares of LMI common stock representing approximately 3.3% of LMI’s aggregate voting power, as of March 31, 2005, have indicated to LMI that they intend to vote “FOR” the merger proposal at the LMI annual meeting.
 
        •  For UGC, the approval of the merger proposal requires a vote of the holders of the shares of UGC common stock outstanding on the record date for the UGC special meeting, with all classes voting together as a single class, that satisfies two criteria:
          •  first, the merger proposal must be approved by the affirmative vote of the holders of at least a majority of the aggregate voting power of the outstanding shares of UGC common stock, which we refer to as the statutory approval; and
 
          •  second, the merger proposal must be approved by the affirmative vote of the holders of at least a majority of the aggregate voting power of the outstanding shares of UGC common stock, exclusive of shares beneficially owned by LMI, Liberty Media Corporation (Liberty) or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC, which we refer to as the minority approval.
    LMI, which beneficially owns shares of UGC common stock representing approximately 91% of the aggregate voting power of all UGC shares as of March 31, 2005, has agreed in the merger agreement to vote those shares in favor of the merger proposal. As a result, the statutory approval is assured. However, because the votes of LMI and its wholly owned subsidiaries, LMI’s directors and executive officers and UGC’s directors and executive officers do not count for purposes of the minority approval, approval of the merger proposal at the UGC special meeting is dependent upon the vote of the public stockholders of UGC.
Q:  What do LMI and UGC stockholders need to do to vote on the merger proposal?
 
A:  After carefully reading and considering the information contained in this joint proxy statement/ prospectus, LMI and UGC stockholders should complete, sign and date their proxy cards and mail them in the enclosed return envelope, or vote by the telephone or through the Internet, in each case as soon as possible so that their shares are represented and voted at the applicable stockholders meeting. Stockholders who have shares registered in the name of a broker, bank or other nominee should follow the voting instruction card provided by their broker, bank or other nominee in instructing them how to vote their shares.

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Q:  If shares are held in “street name” by a broker, bank or other nominee, will the broker, bank or other nominee vote those shares for the beneficial owner on the merger proposal?
 
A:  If you hold your shares in street name and do not provide voting instructions to your broker, bank or other nominee, your shares will not be voted on the merger proposal. Accordingly, your broker, bank or other nominee will vote your shares held in “street name” only if you provide instructions on how to vote. You should follow the directions your broker, bank or other nominee provides to you regarding how to vote your shares. If your shares are held in street name and they are not voted on the merger proposal, that will have the same effect as a vote “AGAINST” the merger proposal.
 
Q:  What if an LMI or UGC stockholder does not vote on the merger proposal?
 
A:  If you fail to respond with a vote on the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal. If you respond but do not indicate how you want to vote, your proxy will be counted as a vote “FOR” the merger proposal. If you respond and indicate that you are abstaining from voting, your proxy will have the same effect as a vote “AGAINST” the merger proposal.
 
Q:  May stockholders change their vote on the merger proposal after returning a proxy card or voting by telephone or over the Internet?
 
A:  Yes. Before their proxy is voted at the applicable stockholders meeting, LMI or UGC stockholders who want to change their vote on the merger proposal may do so by telephone or over the Internet (if they originally voted by telephone or over the Internet), by voting in person at the applicable stockholders meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to the address below:
        •  in the case of an LMI stockholder, to: LMI/UGC Transaction, EquiServe Trust Company, N.A., P.O. Box 8078, Edison, New Jersey 08818-8687; and
 
        •  in the case of a UGC stockholder, to: EquiServe Trust Company, N.A., LMI/UGC Transaction, P.O. Box 859208, Braintree, Massachusetts 02185.
    Any signed proxy revocation or new signed proxy must be received before the start of the applicable stockholders meeting. Your attendance at the applicable stockholders meeting will not, by itself, revoke your proxy.
    If your shares are held in an account by a broker, bank or other nominee who you previously contacted with voting instructions, you should contact your broker, bank or other nominee to change your vote.
Q:  When do LMI and UGC expect to complete the mergers?
 
A:  We expect to complete the mergers as quickly as possible once all the conditions to the mergers, including obtaining the approvals of our stockholders at the respective stockholders meetings of LMI and UGC, are fulfilled. We currently expect to complete the mergers within a few days following the stockholders meetings.
 
Q:  Should UGC stockholders send their proxy cards to the same address as they send their forms of election and UGC shares?
 
A:  No. Separate envelopes are enclosed for UGC stockholders to return (1) their forms of election and UGC shares and (2) their proxy cards. UGC stockholders should check to be sure they are mailing their materials in the proper envelope and to the proper address. UGC stockholders are urged to please NOT send their election form and UGC shares with their proxy cards, or vice versa.
 
Q:  Should LMI stockholders send their LMI shares with their proxy cards?
 
A:  No. LMI stockholders will receive written instructions from the exchange agent after the mergers are completed on how to exchange their LMI shares for Liberty Global shares. LMI stockholders are urged to please NOT send their LMI shares with their proxy cards.
 
Q:  Who can help answer questions about the voting and election procedures and the mergers?
 
A:  LMI and UGC have retained D.F. King & Co. to serve as an information agent and proxy solicitor in connection with each of the stockholders meetings and the mergers.
    LMI stockholders who have questions about the LMI annual meeting, including the voting procedures, or the mergers should call D.F. King & Co. at (800) 829-6551 with their questions.
    UGC stockholders who have questions about the UGC special meeting, including the voting and election procedures, or the mergers should call D.F. King & Co. at (800) 628-8208 with their questions.

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    In addition, LMI stockholders may call LMI’s Investor Relations Department at (800) 783-7676, and UGC stockholders may call UGC’s Investor Relations Department at (303) 770-4001.
Concerning the LMI Annual Meeting
Q:  Why is LMI having its annual meeting at this time?
 
A:  LMI’s common stock is traded on the Nasdaq National Market, and it is a requirement of the Nasdaq Stock Market that all issuers of securities traded on that market hold an annual meeting once a year. LMI’s annual meeting will satisfy this requirement. If the merger proposal is approved and the mergers close, Liberty Global, as the successor to LMI, will not be required to hold an annual meeting until 2006.
 
Q:  In addition to the merger proposal, what other proposals are to be considered and voted upon at the LMI annual meeting?
 
A:  LMI stockholders are being asked to consider and vote on the following three proposals, which we refer to collectively as the “annual business matter proposals,” in addition to the merger proposal:
        •  the “LMI election of directors proposal,” a proposal to elect David E. Rapley and Larry E. Romrell to serve as Class I members of LMI’s board of directors until the 2008 annual meeting of LMI stockholders or until their successors are elected;
 
        •  the “LMI incentive plan proposal,” a proposal to approve the Liberty Media International, Inc. 2004 Incentive Plan (As Amended and Restated Effective March 9, 2005); and
 
        •  the “LMI auditors ratification proposal,” a proposal to approve the selection of KPMG LLP as LMI’s independent auditors for the year ending December 31, 2005.
    We are not aware of any other matters to be acted upon at the annual meeting.
Q:  What stockholder approval is required to approve the LMI election of directors proposal?
 
A:  A plurality of the affirmative votes of the shares of LMI common stock outstanding on the record date, voting together as a single class, that are voted in person or by proxy at the annual meeting is required to elect Messrs. Rapley and Romrell as Class I members of LMI’s board of directors.
 
Q:  How will the vote on the merger proposal impact the LMI directors elected pursuant to the LMI election of directors proposal?
 
A:  If the merger proposal receives the requisite stockholder approvals at the respective stockholders meetings of LMI and UGC, the LMI directors elected pursuant to the LMI election of directors proposal will serve until the closing of the mergers. At that time, the LMI board of directors, including the members elected as Class I directors at the annual meeting, will be succeeded by a board of directors that we expect will be comprised of officers of Liberty Global because LMI will become a subsidiary of Liberty Global in the mergers.
    If the merger proposal does not receive the requisite stockholder approvals, or if for any other reason the merger agreement is terminated, then the persons elected as Class I directors at the LMI annual meeting will serve until the 2008 annual meeting of LMI stockholders or until their successors are elected.
Q:  What stockholder approval is required to approve the LMI incentive plan proposal?
 
A:  Approval of the LMI incentive plan proposal requires the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of LMI common stock outstanding on the record date for the LMI annual meeting that are present at the annual meeting, in person or by proxy, voting together as a single class.
 
Q:  Why are LMI stockholders being asked to vote on the LMI incentive plan proposal?
 
A:  The Liberty Media International, Inc. 2004 Incentive Plan was originally adopted by the LMI board of directors on May 11, 2004, and approved by LMI’s sole stockholder at that time, Liberty Media Corporation. On March 9, 2005, the compensation committee of the LMI board of directors determined to amend the incentive plan in anticipation of Liberty Global assuming the incentive plan following the completion of the mergers. Prior to the amendment, the maximum number of shares of any series of Liberty Global common stock with respect to which awards could have been granted under the incentive plan following the mergers was 20 million. LMI’s compensation committee determined to amend and restate the incentive plan to provide, among other things, that, if the mergers are completed, the maximum number of shares of any series of Liberty Global common stock with respect to which awards may be issued by Liberty Global under the incentive plan will be 25 million. The increase

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was deemed advisable because following the mergers equity incentive awards granted to the employees of UGC and its subsidiaries will be granted under the Liberty Global plan, instead of the various UGC stock incentive plans which will no longer be available for future awards, and because Liberty Global will have a significantly larger number of shares of common stock outstanding following the mergers than LMI has currently. In order for certain awards under the incentive plan to be eligible for favorable tax treatment under Section 162(m) of the Internal Revenue Code, the incentive plan, as amended and restated, must be approved by the public stockholders of LMI.
 
Q:  How will the vote on the merger proposal impact the LMI incentive plan proposal?
 
A:  If the merger proposal receives the requisite stockholder approvals at the respective stockholders meetings of LMI and UGC and the mergers are completed, the Liberty Media International, Inc. 2004 Incentive Plan (As Amended and Restated Effective March 9, 2005) will be assumed by Liberty Global, and Liberty Global will succeed LMI as the issuer under the incentive plan. In addition, the incentive plan will automatically be renamed the “Liberty Global, Inc. 2005 Incentive Plan,” and the number of shares with respect to which awards may be issued will increase from 20 million to 25 million, as described above.
 
Q:  What stockholder approval is required to approve the LMI auditors ratification proposal?
 
A:  The LMI auditors ratification proposal requires the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of LMI common stock outstanding on the record date for the LMI annual meeting that are present at the annual meeting, in person or by proxy, voting together as a single class.
 
Q:  What do LMI stockholders need to do to vote on the annual business matter proposals?
 
A:  After carefully reading and considering the information relating to the annual business matter proposals contained in this joint proxy statement/ prospectus, LMI stockholders should complete, sign and date their proxy cards and mail them in the enclosed return envelope, or vote by the telephone or through the Internet, in each case as soon as possible so that their shares are represented and voted at the annual meeting. Stockholders who have shares registered in the name of a broker, bank or other nominee should follow the voting instruction card provided by their broker, bank or other nominee in instructing their broker, bank or other nominee how to vote their shares on each of the annual business matter proposals.
 
Q:  If LMI shares are held in “street name” by a broker, bank or other nominee, will the broker, bank or other nominee vote those shares for the beneficial owner on each of the annual business matter proposals?
 
A:  If LMI stockholders hold shares in street name and do not provide voting instructions to their broker, bank or other nominee, their shares will not be voted on the incentive plan proposal but may, in the discretion of the broker, bank or other nominee, be voted on the election of directors proposal and the auditors ratification proposal. Accordingly, their broker, bank or other nominee will vote their shares held in street name for or against the incentive plan proposal only if they provide instructions on how to vote.

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SUMMARY
The following summary includes information contained elsewhere in this joint proxy statement/prospectus. This summary does not purport to contain a complete statement of all material information relating to the merger agreement, the mergers and the other matters discussed herein and is subject to, and is qualified in its entirety by reference to, the more detailed information and financial statements contained or incorporated in this joint proxy statement/prospectus, including the appendices included herein. You may obtain the information about UGC that we incorporate by reference into this joint proxy statement/prospectus without charge by following the instructions in the section entitled “Additional Information — Where You Can Find More Information.” You should carefully read this joint proxy statement/prospectus in its entirety, as well as the merger agreement included with this proxy statement/prospectus as Appendix B and the other Appendices included herein.
The Companies
(see page 70)
Liberty Media International, Inc.
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5800
LMI, through its subsidiaries and affiliates, provides broadband distribution services and video programming services to subscribers in Europe, Japan, Latin America and Australia. LMI’s broadband distribution services consist primarily of cable television distribution, Internet access, telephony, and, in selected markets, direct-to-home satellite distribution. LMI’s broadband distribution services include those of UGC, which is a controlled subsidiary of LMI. LMI’s programming networks create original programming and also distribute programming obtained from international and home-country content providers. LMI’s principal assets include interests in UGC, LMI/Sumisho Super Media, LLC, Jupiter Programming Co., Ltd. (JPC), Liberty Cablevision of Puerto Rico Ltd. and Pramer S.C.A. LMI’s corporate website is located at www.libertymediainternational.com.
UnitedGlobalCom, Inc.
4643 South Ulster Street
Suite 1300
Denver, Colorado 80237
Telephone: (303) 770-4001
UGC is an international broadband communications provider of video, voice and broadband Internet access services with operations in 16 countries outside the United States. As of December 31, 2004, UGC’s networks passed approximately 15.9 million homes and serve approximately 8.7 million video subscribers, 0.8 million voice subscribers and 1.4 million broadband Internet access subscribers. UGC Europe, Inc., UGC’s largest consolidated operation, is a pan-European broadband communications company, providing video, high-speed Internet access and telephone services through its broadband networks in 13 European countries. UGC’s primary Latin American operation, VTR GlobalCom S.A., provides video, high-speed Internet access and telephone services primarily to residential customers in Chile. UGC also has consolidated operations in Brazil and Peru; an approximate 19% interest in SBS Broadcasting S.A., a European commercial television and radio broadcasting company; an approximate 34% interest in Austar United Communications Ltd., a pay-TV provider in Australia; and an indirect investment in Telenet Group Holding N.V., a broadband communications provider in Belgium. UGC’s corporate website is located at www.unitedglobal.com.
Liberty Global, Inc.
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5800
Liberty Global is a newly-formed corporation and currently a wholly owned subsidiary of LMI. Liberty Global has not conducted any activities other than those incident to its formation, the matters contemplated by the merger agreement and the preparation of applicable filings under the federal securities laws. Upon consummation of the mergers, LMI and UGC will become wholly owned subsidiaries of Liberty Global, and Liberty Global will become a publicly traded company. Following the mergers, Liberty Global’s corporate website will be located at www.lgi.com.

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Cheetah Acquisition Corp.
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5800
Cheetah Acquisition Corp, which we refer to as LMI Merger Sub, is a wholly owned transitory merger subsidiary of Liberty Global, recently formed solely for the purpose of merging with and into LMI.
Tiger Global Acquisition Corp.
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5800
Tiger Global Acquisition Corp., which we refer to as UGC Merger Sub, is a wholly owned transitory merger subsidiary of Liberty Global, recently formed solely for the purpose of merging with and into UGC.
Structure of the Mergers
(see page 85)
To accomplish the combination of the businesses of LMI and UGC under a new parent company, Liberty Global was formed with two wholly owned subsidiaries, LMI Merger Sub and UGC Merger Sub. At the effective time of the mergers:
  •  LMI Merger Sub will merge with and into LMI, and LMI will be the surviving corporation in that merger (which we refer to as the LMI merger); and
 
  •  UGC Merger Sub will merge with and into UGC, and UGC will be the surviving corporation in that merger (which we refer to as the UGC merger).
As a result of the mergers described above and the conversion and exchange of securities described in this joint proxy statement/prospectus, LMI will become a direct, wholly owned subsidiary of Liberty Global, and UGC will become an indirect, wholly owned subsidiary of Liberty Global. Following the mergers, Liberty Global will own directly 46.5% of the common stock of UGC and indirectly through Liberty Global’s wholly owned subsidiary LMI 53.5% of the common stock of UGC (based upon outstanding UGC share information as of March 31, 2005).
The Stockholders Meetings and Proxy Solicitations
(see page 72)
LMI Annual Meeting
Where and When. The LMI annual meeting will take place at [                    ], [                    ], [                    ], [                    ] [                    ], on [                    ], 2005, at [          ] a.m., local time.
Who May Vote. You may vote at the LMI annual meeting if you were the record holder of LMI Series A common stock or LMI Series B common stock as of 5:00 p.m., New York City time, on May 3, 2005, the record date for the LMI annual meeting. As of March 31, 2005, an aggregate of 165,555,331 shares of LMI Series A common stock and 7,264,300 shares of LMI Series B common stock were outstanding and would have been entitled to vote at the LMI annual meeting if March 31, 2005 had been the record date for the LMI annual meeting. The holders of LMI Series A common stock and the holders of LMI Series B common stock will vote together as a single class. You may cast one vote for each share of LMI Series A common stock that you owned on the record date for the LMI annual meeting and ten votes for each share of LMI Series B common stock that you owned on the record date for the LMI annual meeting.
UGC Special Meeting
Where and When. The UGC special meeting will take place at [                    ], [                    ], [                    ], [                    ] [                    ], on [                    ], 2005, at [          ] a.m., local time.
Who May Vote. You may vote at the UGC special meeting if you were the record holder of UGC Class A common stock, UGC Class B common stock or UGC Class C common stock as of 5:00 p.m., New York City time, on May 3, 2005, the record date for the UGC special meeting. As of March 31, 2005, an aggregate of 401,894,352 shares of UGC Class A common stock, 10,493,461 shares of UGC Class B common stock and 379,603,223 shares of UGC Class C common stock were outstanding and would have been entitled to vote at the UGC special meeting if March 31, 2005

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had been the record date for the UGC special meeting. The holders of UGC Class A common stock, the holders of UGC Class B common stock and the holders of UGC Class C common stock will vote together as a single class. You may cast one vote for each share of UGC Class A common stock that you owned on the record date for the UGC special meeting and ten votes for each share of UGC Class B common stock or UGC Class C common stock that you owned on the record date for the UGC special meeting.
Fairness Determinations and Recommendations of the Special Committee and the UGC Board
Throughout this joint proxy statement/ prospectus, when we refer to “unaffiliated stockholders of UGC,” we mean holders of UGC Class A common stock other than LMI and its affiliates.
                  Fairness Determination and Recommendation of the Special Committee (see page 22)
A special committee of the board of directors of UGC, which we refer to as the Special Committee, consisting of three UGC directors (who are independent under the rules of the Nasdaq Stock Market and have no relationship with LMI or any of its affiliates that the Special Committee viewed as undermining its independence) evaluated the fairness of the UGC merger and negotiated the terms of the mergers.
The Special Committee determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC. The Special Committee also determined to approve, and to recommend that the UGC board of directors approve, the merger agreement and the UGC merger. In making these determinations, the Special Committee considered various factors, including:
  •  the opinion of Morgan Stanley & Co. Incorporated, financial advisor to the Special Committee, directed to the Special Committee that, as of the date of the opinion and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders;
 
  •  that the UGC merger would be conditioned on the approval of the holders of a majority of UGC’s publicly held shares (excluding shares held by LMI, Liberty or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC);
 
  •  the premium presented to the unaffiliated stockholders of UGC by the merger consideration in relation to various benchmarks, including the relative trading prices of UGC common stock and LMI common stock prior to the commencement of merger discussions;
 
  •  that the cash election provided the unaffiliated stockholders of UGC with some protection in the event the price of LMI’s stock declines prior to closing;
 
  •  the opportunity presented to the unaffiliated stockholders of UGC by the stock election to participate in the benefits expected to be realized by the combined companies in the future;
 
  •  that the implied valuation in the mergers of the Japanese distribution and content assets of LMI is attractive as a financial matter, and such assets offer opportunities in diverse markets;
 
  •  that Michael T. Fries, the current Chief Executive Officer of UGC, would be the Chief Executive Officer of the combined company;
 
  •  that Liberty Global would have no single stockholder or group of stockholders exercising voting control over the combined company;
 
  •  that the opportunity for growth is greater as a part of the combined company;
 
  •  that UGC stockholders would own interests in a company with a more diverse portfolio of investments, which would be better able to weather economic change, including fluctuations in foreign exchange rates;
 
  •  the absence of the ability to sell UGC to a third party as a result of LMI’s controlling equity position in UGC;
 
  •  that the receipt of Liberty Global stock by the unaffiliated stockholders of UGC in the mergers will generally not be taxable to such stockholders, while the receipt of cash consideration generally will be taxable to such stockholders; and
 
  •  the other factors referred to under “Special Factors — Fairness Determinations and Recommendations of the Special Committee and the UGC Board.”

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stock will vote together as a single class. You may cast one vote for each share of UGC Class A common stock that you owned on the record date for the UGC special meeting and ten votes for each share of UGC Class B common stock or UGC Class C common stock that you owned on the record date for the UGC special meeting.
Fairness Determinations and Recommendations of the Special Committee and the UGC Board
Throughout this joint proxy statement/ prospectus, when we refer to “unaffiliated stockholders of UGC,” we mean holders of UGC Class A common stock other than LMI and its affiliates.
                  Fairness Determination and Recommendation of the Special Committee (see page 22)
A special committee of the board of directors of UGC, which we refer to as the Special Committee, consisting of three UGC directors (who are independent under the rules of the Nasdaq Stock Market and have no relationship with LMI or any of its affiliates that the Special Committee viewed as undermining its independence) evaluated the fairness of the UGC merger and negotiated the terms of the mergers.
The Special Committee determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC. The Special Committee also determined to approve, and to recommend that the UGC board of directors approve, the merger agreement and the UGC merger. In making these determinations, the Special Committee considered various factors, including:
  •  the opinion of Morgan Stanley & Co. Incorporated, financial advisor to the Special Committee, directed to the Special Committee that, as of the date of the opinion and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders;
 
  •  that the UGC merger would be conditioned on the approval of the holders of a majority of UGC’s publicly traded shares (i.e., other than shares owned by LMI, Liberty or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC);
 
  •  the premium presented to the unaffiliated stockholders of UGC by the merger consideration in relation to various benchmarks, including the relative trading prices of UGC common stock and LMI common stock prior to the commencement of merger discussions;
 
  •  that the cash election provided the unaffiliated stockholders of UGC with some protection in the event the price of LMI’s stock declines prior to closing;
 
  •  the opportunity presented to the unaffiliated stockholders of UGC by the stock election to participate in the benefits expected to be realized by the combined companies in the future;
 
  •  that the implied valuation in the mergers of the Japanese distribution and content assets of LMI is attractive as a financial matter, and such assets offer opportunities in diverse markets;
 
  •  that Michael T. Fries, the current Chief Executive Officer of UGC, would be the Chief Executive Officer of the combined company;
 
  •  that Liberty Global would have no single stockholder or group of stockholders exercising voting control over the combined company;
 
  •  that the opportunity for growth is greater as a part of the combined company;
 
  •  that UGC stockholders would own interests in a company with a more diverse portfolio of investments, which would be better able to weather economic change, including fluctuations in foreign exchange rates;
 
  •  the absence of the ability to sell UGC to a third party as a result of LMI’s controlling equity position in UGC;
 
  •  that the receipt of Liberty Global stock by the unaffiliated stockholders of UGC in the mergers will generally not be taxable to such stockholders, while the receipt of cash consideration generally will be taxable to such stockholders; and
 
  •  the other factors referred to under “Special Factors — Fairness Determinations and Recommendations of the Special Committee and the UGC Board.”

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Fairness Determination and Recommendation of the UGC Board (see page 27)
Based upon the recommendation of the Special Committee and adopting the analysis of the Special Committee, the UGC board of directors unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC. The UGC board also unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is fair to, and in the best interests of, UGC and its stockholders. Accordingly, the UGC board of directors recommends that UGC stockholders vote “FOR” the merger proposal at the UGC special meeting.
Opinion of the Financial Advisor to the Special Committee
(see page 28)
Morgan Stanley, financial advisor to the Special Committee, delivered a written opinion to the Special Committee to the effect that, as of January 17, 2005 and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders. The full text of Morgan Stanley’s opinion, dated January 17, 2005, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley in rendering its opinion, is included as Appendix D to this joint proxy statement/prospectus. UGC stockholders should read this opinion carefully and in its entirety. The opinion does not constitute a recommendation to any UGC stockholder as to how to vote with respect to the UGC merger or as to what form of consideration to elect.
Fairness Determinations of the Boards of Directors of LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub
(see page 35)
The UGC merger is considered a “13E-3 transaction” because each of LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub is an affiliate of UGC, and the unaffiliated stockholders of UGC are entitled to receive consideration in the UGC merger other than Liberty Global common stock. As a result, under the federal securities laws, LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub are each required to consider the substantive and procedural fairness of the UGC merger to the unaffiliated stockholders of UGC.
Fairness Determination of the LMI Board (see page 35)
The LMI board of directors determined that the transactions contemplated by the merger agreement, including the UGC merger, are, substantively and procedurally, fair to the unaffiliated stockholders of UGC. In making this determination, the LMI board considered various factors, including:
  •  that the merger was negotiated with the Special Committee, which was advised by its own counsel and financial advisors;
 
  •  that the UGC merger is structured so that it is a condition to its completion that it be approved by at least a majority of the outstanding shares of UGC common stock not beneficially owned by LMI or Liberty or the directors and executive officers of LMI, Liberty and UGC;
 
  •  that the 0.2155 to 1.0 exchange ratio represents an 8.6% premium over the closing sale price for the shares of UGC Class A common stock on December 14, 2004, the last trading day before Mr. Malone’s first conversation with the Special Committee, and a slight premium over the closing sale price of those shares on January 11, 2005, the last trading day before LMI management and the Special Committee reached an agreement in principle on the financial terms of the UGC merger;
 
  •  its belief that since LMI’s spin off from Liberty in June 2004, UGC’s historical trading price has included an “acquisition premium” attributable to market speculation that LMI would buy out the public minority stockholders of UGC;
 
  •  its belief that LMI’s common stock trades with a holding company discount of between 9% and 19%, implying a larger premium to the unaffiliated UGC stockholders on a fair value-to-fair value basis;
 
  •  that the unaffiliated stockholders of UGC who elect to receive Liberty Global stock will have the opportunity to participate in LMI’s Japanese cable distribution and programming businesses, as well as continue to participate in the potential growth of the businesses of UGC;

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  •  that LMI was foregoing its ability to obtain a control premium for its investment in UGC, while the unaffiliated stockholders of UGC who become stockholders of Liberty Global would participate as stockholders of the new company in any control premium because there will be no single controlling stockholder of the new company; and
 
  •  the other factors referred to under “Special Factors — Fairness Determinations of the Boards of Directors of LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub.”
Fairness Determinations of the Boards of Liberty Global, LMI Merger Sub and UGC Merger Sub
(see page 37)
Adopting the analysis of the board of directors of LMI, the boards of directors of each of Liberty Global, LMI Merger Sub and UGC Merger Sub unanimously determined that the transactions contemplated by the merger agreement, including the UGC merger, are, substantively and procedurally, fair to the unaffiliated stockholders of UGC. Each of these boards of directors is comprised of two persons serving on the board of directors of LMI, each of whom was present for and participated in the adopted analysis of the LMI board.
Recommendation of and Reasons for the LMI Merger
(see page 37)
LMI’s board of directors unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the LMI merger, are advisable, fair to, and in the best interests of, LMI and its stockholders. Accordingly, LMI’s board of directors recommends that LMI stockholders vote “FOR” the merger proposal at the LMI annual meeting.
LMI’s board of directors considered various factors in approving the merger agreement and the LMI merger, including:
  •  that the mergers would eliminate the current dual public holding company structure in which LMI’s principal consolidated asset is its interest in another public company, UGC;
 
  •  that the elimination of the holding company structure would eliminate or significantly reduce the holding company discount in LMI’s stock price;
 
  •  the opinion of Banc of America Securities LLC, financial advisor to LMI, directed to the LMI board that, as of the date of the opinion, and based upon and subject to the factors, limitations and assumptions set forth in the opinion, the consideration to be received by LMI stockholders (other than affiliates of LMI) in the transactions contemplated by the merger agreement was fair from a financial point of view to such stockholders;
 
  •  that the strengths of the respective management teams of LMI and UGC would complement each other, and that there was little if any overlap at the operating level that would impede a smooth integration of the two companies;
 
  •  that the consummation of the mergers would eliminate any potential competition between LMI and UGC, including in the pursuit of acquisition opportunities and capital raising activities;
 
  •  that the receipt of the merger consideration in the LMI merger would be tax-free to the LMI stockholders;
 
  •  that the merger agreement included a limitation on the cash election and that LMI had sufficient cash to fund the maximum amount of cash anticipated to be payable if the cash elections were fully exercised; and
 
  •  the other factors referred to under “Special Factors — Recommendation of and Reasons for the LMI Merger.”
Opinion of LMI’s Financial Advisor
(see page 38)
Banc of America Securities, LMI’s financial advisor, delivered a written opinion to the LMI board of directors to the effect that, as of January 17, 2005 and based upon and subject to the factors, limitations and assumptions set forth in the opinion, the consideration to be received by the stockholders of LMI (other than affiliates of LMI) in the transactions contemplated by the merger agreement was fair from a financial point of view to such stockholders. The full text of Banc of America Securities’ opinion, dated January 17, 2005, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Banc of America Securities in rendering its opinion, is included as Appendix E to this joint proxy statement/ prospectus. LMI stockholders should read this opinion carefully and in its entirety. The opinion does not

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constitute a recommendation to any LMI stockholder as to how any LMI stockholder should vote with respect to the LMI merger.
Management of Liberty Global
(see page 96)
Following the mergers, the board of directors of Liberty Global will consist of ten members, of whom five are current members of LMI’s board of directors and five are current members of UGC’s board of directors. The members of the Liberty Global board of directors will be:
  •  John C. Malone, currently Chairman of the Board, Chief Executive Officer, President and a director of LMI and a director of UGC;
 
  •  Michael T. Fries, currently President, Chief Executive Officer and a director of UGC;
 
  •  John P. Cole, Jr., currently a director of UGC and a member of the Special Committee;
 
  •  John W. Dick, currently a director of UGC and a member of the Special Committee;
 
  •  Paul A. Gould, currently a director of UGC and a member of the Special Committee;
 
  •  David E. Rapley, currently a director of LMI;
 
  •  Larry E. Romrell, currently a director of LMI;
 
  •  Gene W. Schneider, currently the Chairman of the Board of Directors of UGC;
 
  •  J.C. Sparkman, currently a director of LMI; and
 
  •  J. David Wargo, currently a director of LMI.
The management of Liberty Global will be comprised of certain executive officers from each of LMI and UGC, including Mr. Malone who has agreed to serve as the Chairman of the Board of Liberty Global and Mr. Fries who has agreed to serve as the Chief Executive Officer and President of Liberty Global. For more information on the proposed directors and executive officers of Liberty Global, see “Management of Liberty Global,” “Management of LMI” and “Executive Officers, Directors and Principal Stockholders of UGC.”
Interests of Certain Persons in the Mergers
(see page 46)
In considering the recommendations of LMI’s and UGC’s boards of directors to vote to approve the merger proposal, stockholders of LMI and UGC should be aware that members of LMI’s and UGC’s boards of directors and members of LMI’s and UGC’s executive management teams have relationships, agreements or arrangements that provide them with interests in the mergers that may be in addition to or different from those of LMI’s or UGC’s public stockholders. Both LMI’s and UGC’s boards of directors were aware of these interests and considered them when approving the merger agreement and the mergers.
Material United States Federal Income Tax Consequences of the Mergers
(see page 79)
Completion of the mergers is conditioned upon the receipt by LMI of the opinion of Baker Botts L.L.P., or another nationally recognized law firm, to the effect that the LMI merger will be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and upon the receipt by UGC of the opinion of a nationally recognized law firm, to the effect that, when integrated with the LMI merger, the conversion of shares of UGC common stock into shares of Liberty Global Series A common stock that is effected pursuant to the UGC merger will qualify as an exchange within the meaning of Section 351 of the Internal Revenue Code. The opinions will be based upon factual representations and covenants, including those contained in letters provided by LMI, UGC, Liberty Global and/or others, and certain assumptions set forth in the opinions. No rulings have been or will be requested from the Internal Revenue Service with respect to any tax matters relating to the mergers.
Assuming the mergers are treated as described above, the mergers generally will not result in the recognition of gain or loss by LMI, UGC, Liberty Global, the LMI stockholders or, except to the extent that they receive cash, the UGC stockholders. The taxation of the receipt of cash by a holder of UGC common stock is very complicated and subject to uncertainties. Due to the uncertainties concerning the taxation of the receipt of cash, Liberty Global or the exchange agent, as applicable, expect to withhold 30% (unless reduced by an applicable treaty) of all cash payments made to

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UGC stockholders that are non-U.S. holders as a result of making a valid cash election. UGC stockholders should consult their tax advisors if they are considering making a cash election with respect to their UGC common stock.
LMI stockholders and UGC stockholders should be aware that the tax consequences to them of the applicable merger may depend upon their own situations. In addition, LMI stockholders and UGC stockholders may be subject to state, local or foreign tax laws that are not discussed in this joint proxy statement/ prospectus. LMI stockholders and UGC stockholders should therefore consult with their own tax advisors for a full understanding of the tax consequences to them of the mergers.
Merger Agreement
(see page 85 and Appendix B)
The merger agreement is included as Appendix B to this joint proxy statement/ prospectus. We encourage you to read the merger agreement because it is the legal document that governs the mergers.
Conditions to Completion of the Mergers
LMI’s and UGC’s respective obligations to complete the mergers are subject to the satisfaction or waiver of a number of conditions, including, among others:
  •  the statutory approval and the minority approval, each having been obtained at the UGC special meeting;
 
  •  the approval of the merger proposal by the LMI stockholders at the LMI annual meeting;
 
  •  approval for listing on the Nasdaq National Market of the Liberty Global common stock to be issued in connection with the mergers;
 
  •  LMI and Liberty Global having received an opinion that the mergers should not cause the spin off of LMI by Liberty, which occurred on June 7, 2004, to fail to qualify as a tax-free distribution to Liberty under Section 355(e) of the Internal Revenue Code of 1986, as amended (the Code); and
 
  •  LMI and UGC each having received an opinion from its respective tax counsel as to the treatment of the mergers for U.S. federal income tax purposes.
We expect to complete the mergers as promptly as practicable after all of the conditions to the mergers have been satisfied or, if applicable, waived. Neither the condition relating to the minority approval at the UGC special meeting nor the conditions relating to the receipt of the tax opinions may be waived.
Termination of the Merger Agreement
We may jointly agree to terminate the merger agreement at any time without completing the mergers, even after receiving the requisite stockholder approvals of the merger proposal. In addition, either UGC (with the approval of the Special Committee) or LMI may terminate the merger agreement if, among other things:
  •  the mergers have not been consummated before September 30, 2005;
 
  •  any order, decree or ruling that permanently restrains, enjoins or prohibits the mergers becomes final and non-appealable; or
 
  •  any of the stockholder approvals required to approve the merger proposal have not been obtained.
In addition, LMI may terminate the merger agreement if the board of directors of UGC (with the approval of the Special Committee) has withdrawn or modified, in any manner adverse to LMI, its recommendation to the UGC stockholders.
No termination fee will be payable by any party to the merger agreement if the merger agreement is terminated.
Appraisal or Dissenters’ Rights
(see page 47)
Under Delaware law, holders of shares of UGC Class A common stock will not be entitled to appraisal rights in connection with the UGC merger.
Under Delaware law, LMI stockholders are not entitled to appraisal rights in connection with the LMI merger.

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Regulatory Matters
(see page 47)
At the date of this joint proxy statement/ prospectus, each of LMI and UGC has obtained all regulatory approvals required for the completion of the mergers.
Voting Agreement
(see page 95 and Appendix C)
On January 17, 2005, at the insistence of the Special Committee and at the request of the LMI board of directors, John C. Malone, the Chairman of the Board, Chief Executive Officer and President of LMI, entered into a voting agreement with UGC, pursuant to which Mr. Malone has agreed to vote the shares of LMI Series A common stock and LMI Series B common stock owned by him or which he has the right to vote (representing, as of March 31, 2005, approximately 26.5% of the aggregate voting power of LMI) in favor of the approval of the merger proposal. A copy of the voting agreement is included as Appendix C to this joint proxy statement/ prospectus.
Risk Factors
(see page 59)
The mergers entail several risks, including:
  •  risks relating to the value of the merger consideration received compared with the value of the securities exchanged therefor;
 
  •  risks relating to the value of the merger consideration received by UGC stockholders compared to the value of the merger consideration at the time elected by UGC stockholders;
 
  •  risks associated with the ability of the parties to realize the anticipated benefits of the mergers;
 
  •  risks associated with class action lawsuits relating to the UGC merger; and
 
  •  risks associated with transaction costs.
In addition, the parties to the mergers face risks and uncertainties relating to:
  •  overseas operations and regulations;
 
  •  technology and competition;
 
  •  certain financial matters; and
 
  •  governance matters.
Please carefully read the information included under the heading “Risk Factors.”
Recommendations regarding the LMI Annual Business Matter Proposals
(see page 157)
LMI’s board of directors has approved each of the annual business matter proposals and recommends that the LMI stockholders vote “FOR” the election of Messrs. Rapley and Romrell as Class I directors pursuant to the LMI election of directors proposal, “FOR” the LMI incentive plan proposal and “FOR” the LMI auditors ratification proposal. Prior to the LMI board approving the LMI auditors ratification proposal, KPMG LLP was selected by the audit committee of the LMI board to serve as the independent auditors of LMI for the year ending December 31, 2005.

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Selected Summary Historical Financial Data of LMI
The following tables present selected historical financial information of (i) certain international cable television and programming subsidiaries and assets of Liberty (LMC International), for periods prior to the June 7, 2004 spin off transaction, whereby LMI’s common stock was distributed on a pro rata basis to Liberty’s stockholders as a dividend, and (ii) LMI and its consolidated subsidiaries for periods following such date. Upon consummation of the spin off, LMI became the owner of the assets that comprise LMC International. The following selected financial data was derived from the audited consolidated financial statements of LMI as of December 31, 2004, 2003 and 2002 and for each of the four years ended December 31, 2004. Data for other periods has been derived from unaudited information. This information is only a summary, and you should read it together with the historical consolidated financial statements of LMI included elsewhere herein.
                                         
    December 31,
     
    2004(2)   2003   2002   2001   2000
                     
    as restated (1)                
    amounts in thousands
Summary Balance Sheet Data:
                                       
Investment in affiliates
  $ 1,865,642       1,740,552       1,145,382       423,326       1,189,630  
Other investments
  $ 838,608       450,134       187,826       916,562       134,910  
Property and equipment, net
  $ 4,303,099       97,577       89,211       80,306       82,578  
Intangible assets, net
  $ 2,897,953       689,026       689,046       701,935       803,514  
Total assets
  $ 13,702,363       3,687,037       2,800,896       2,169,102       2,301,800  
Debt, including current portion
  $ 4,992,746       54,126       35,286       338,466       101,415  
Stockholders’ equity
  $ 5,240,506       3,418,568       2,708,893       2,039,593       1,907,085  
                                         
    Year ended December 31,
     
    2004(2)   2003   2002   2001   2000
                     
    as restated (1)                
    amounts in thousands, except per share amounts
Summary Statement of Operations Data:
                                       
Revenue
  $ 2,644,284       108,390       100,255       139,535       125,246  
Operating income (loss)
  $ (313,873 )     (1,455 )     (39,145 )     (122,623 )     3,828  
Share of earnings (losses) of affiliates(3)
  $ 38,710       13,739       (331,225 )     (589,525 )     (168,404 )
Earnings (loss) from continuing operations(4)
  $ (18,058 )     20,889       (329,887 )     (820,355 )     (129,694 )
Earnings (loss) from continuing operations per common share (pro forma for spin off)(5)
  $ (.11 )     .14       N/A       N/A       N/A  
 
(1)  See note 23 to the historical consolidated financial statements of LMI, included elsewhere herein.
 
(2)  Prior to January 1, 2004, the substantial majority of LMI operations were conducted through equity method affiliates, including UGC, J-COM and JPC. As more fully discussed in the notes to LMI’s historical financial statements included elsewhere herein, in January 2004, LMI completed a transaction that increased LMI’s ownership in UGC and enabled LMI to fully exercise its voting rights with respect to its historical investment in UGC. As a result, UGC has been accounted for as a consolidated subsidiary and included in LMI’s consolidated financial position and results of operations since January 1, 2004. See Liberty Global’s unaudited condensed pro forma combined financial statements included elsewhere herein for the pro forma effects of consolidating UGC on Liberty Global’s results of operations. See also “Appendix A: Information Concerning Liberty Media International, Inc. — Part 4: Historical Financial Information of LMI and its Significant Affiliates and Acquirees” to this joint proxy statement/ prospectus.
 
(3)  Effective January 1, 2002, LMI adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (Statement 142), which, among other matters, provides that goodwill, intangible assets with indefinite lives and excess costs that are considered equity method goodwill are no longer amortized, but are evaluated for impairment under Statement 142 and, in the case of equity method goodwill, APB Opinion No. 18. Share of losses of affiliates includes excess basis amortization of $92,902,000 and $41,419,000 in 2001 and 2000, respectively.
 
(4)  LMI’s loss from continuing operations in 2002 and 2001 included LMI’s share of UGC’s net losses of $190,216,000 and $439,843,000, respectively. Because LMI had no commitment to make additional capital contributions to UGC, LMI suspended recording its share of UGC’s losses when LMI’s carrying value was

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reduced to zero in 2002. In addition, LMI’s loss from continuing operations in 2002 included $247,386,000 of other-than-temporary declines in fair values of investments, and LMI’s loss from continuing operations in 2001 included $534,962,000 of realized and unrealized losses on derivative instruments.
 
(5)  Earnings (loss) per common share amounts were computed assuming that the shares issued in the spin off were outstanding since January 1, 2003. In addition, the weighted average share amounts for periods prior to July 26, 2004, the date that certain subscription rights were distributed to stockholders pursuant to a rights offering by LMI, have been increased to give effect to the benefit derived by LMI’s stockholders as a result of the distribution of such subscription rights. For additional information, see note 3 to the LMI consolidated financial statements included elsewhere herein.
Selected Summary Historical Financial Data of UGC
The following summary financial data of UGC was derived from the audited financial statements of UGC for the five years ended December 31, 2004. This information is only a summary, and is not necessarily comparable from period to period as a result of certain impairments, restructuring charges, gains on extinguishments of debt, acquisitions and dispositions, merger transactions, gains on issuance of common equity securities by subsidiaries and cumulative effects of changes in accounting principles. For this and other reasons, you should read it together with UGC’s historical financial statements and related notes and also with UGC’s management’s discussion and analysis of financial condition and results of operations incorporated by reference herein.
                                           
    December 31,
     
    2004   2003   2002   2001   2000
                     
    as restated (1)                
    amounts in thousands
Summary Balance Sheet Data:
                                       
 
Cash, cash equivalents and short term liquid investments
  $ 1,077,958       312,495       456,039       999,086       2,223,912  
 
Property and equipment, net
  $ 4,193,095       3,342,743       3,640,211       3,692,485       3,880,657  
 
Goodwill and other intangible assets, net
  $ 2,615,877       2,772,067       1,264,109       2,843,922       5,154,907  
 
Total assets
  $ 9,134,297       7,099,671       5,931,594       9,038,640       13,146,952  
 
Long-term debt, including current portion, not subject to compromise
  $ 4,852,908       3,926,706       3,838,906       10,033,387       9,893,044  
 
Long-term debt, including current portion, subject to compromise
  $       317,372       2,812,988              
 
Stockholders’ equity (deficit)
  $ 2,421,984       1,472,492       (4,284,874 )     (4,555,480 )     (85,234 )
                                             
    Year ended December 31,
     
    2004(2)   2003(2)   2002(3)   2001(4)   2000(5)
                     
    as restated (1)                
    amounts in thousands
Summary Statements of Operations Data:
                                       
 
Revenue
  $ 2,525,446       1,891,530       1,515,021       1,561,894       1,251,034  
 
Operating loss
  $ (240,547 )     (656,014 )     (899,282 )     (2,872,306 )     (1,140,803 )
 
Income (loss) from continuing operations
  $ (356,314 )     1,995,368       988,268       (4,514,765 )     (1,220,890 )
 
Earnings (loss) per share from continuing operations:
                                       
   
Basic earnings (loss) per share
  $ (0.46 )     7.41       2.29       (41.47 )     (12.00 )
   
Diluted earnings (loss) per share
  $ (0.46 )     7.41       2.29       (41.47 )     (12.00 )

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(1)  See note 27 to the consolidated financial statements of UGC, incorporated by reference herein.
 
(2)  Includes impairments, gains on extinguishment of debt and gains on sales of investments in affiliates and other, net, totaling $38.9 million, $35.8 million and $12.3 million, respectively.
 
(3)  Includes impairments, gains on extinguishment of debt and gains on sales of investments in affiliates and other, net, totaling $402.2 million, $2.2 billion and $279.4 million, respectively.
 
(4)  Includes impairments, gains on extinguishment of debt and gains on sales of investments in affiliates and other, net, totaling $436.2 million, $2.2 billion and $117.3 million, respectively. Effective January 1, 2002, UGC adopted Statement 142, which, among other things, provides that goodwill, intangible assets with indefinite lives and excess costs on equity method investments are no longer amortized, but are evaluated for impairment under Statement 142. The cumulative effect of the adoption of Statement 142 was a charge of $1.3 billion.
 
(5)  Includes impairments, restructuring charges, gains on sales of investments in affiliates, other-than-temporary losses on investments and amortization of indefinite-lived intangible assets totaling $1.3 billion, $204.1 million, $416.8 million, $342.4 million and $447.2 million, respectively.
 
(6)  Includes amortization of indefinite-lived intangible assets totaling $287.5 million.
Ratio (Deficiency) of Earnings to Fixed Charges of UGC
                               
    Year ended December 31,
     
    2004   2003   2002
             
    as restated(1)        
    amounts in thousands, except ratios
Income (loss) before income taxes and other items
  $ (472,790 )     1,568,066       1,328,695  
                   
Fixed charges:
                       
 
Interest within rental expense
    25,851       20,970       14,540  
 
Interest, whether expensed or capitalized, including amortization of discounts
    301,763       327,132       680,101  
                   
     
Total fixed charges
    327,614       348,102       694,641  
                   
Distributed income of equity investees
    17,098       4,714       11,276  
                   
Adjusted earnings (losses)
    (128,078 )     1,920,882       2,034,612  
Fixed charges
    327,614       348,102       694,641  
                   
 
Ratio of earnings to fixed charges
          5.52       2.93  
                   
   
Dollar amount of coverage deficiency
  $ (455,692 )                
                   
 
(1)  See note 27 to the consolidated financial statements of UGC, incorporated by reference herein.
Selected Unaudited Condensed Pro Forma Combined Financial Data of Liberty Global
We have included in this joint proxy statement/ prospectus the selected unaudited condensed pro forma combined financial data of Liberty Global set forth below after giving effect to (1) the proposed mergers (the Proposed Mergers) and the resulting step acquisition of the UGC interest not already owned by LMI using the purchase method of accounting (assuming, among other matters, that all UGC stockholders (other than LMI and its wholly owned subsidiaries) will elect to receive shares of Liberty Global in the Proposed Mergers); and (2) the July 1, 2004 acquisition of Suez-Lyonnaise Télécom SA (Noos), the April 1, 2005 acquisition of the remaining 19.9% minority interest in UPC Broadband France SAS (UPC Broadband France), the January 1, 2005 consolidation of LMI/ Sumisho Super Media LLC (Super Media) and Jupiter Telecommunications Co., Ltd. (J-COM), and the April 29, 2005 sale of LMI’s equity interests in Torneos y Competeneias S.A. (TyC) and Fox Pan American Sports, LLC (FPAS) (collectively, the Consummated Transactions) based upon the assumptions and adjustments described in the unaudited condensed pro forma combined financial information and notes of Liberty Global contained elsewhere in this document.
The unaudited condensed pro forma combined summary balance sheet data as of December 31, 2004 gives effect to the Proposed Mergers, the consolidation of Super Media and J-COM, the acquisition of the remaining 19.9% minority interest in UPC Broadband France, and the sale of LMI’s equity interests in TyC and FPAS, as if they occurred on December 31, 2004. The unaudited condensed pro forma combined summary statement of operations data for the year ended December 31, 2004 is presented as if the Proposed Mergers and the Consummated Transactions were consummated on January 1, 2004.

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The selected unaudited condensed pro forma combined financial information is based upon estimates and assumptions, which are preliminary. The unaudited pro forma information does not purport to be indicative of the financial position and results of operations that Liberty Global will obtain in the future, or that Liberty Global would have obtained if the Proposed Mergers and Consummated Transactions were effective as of the dates indicated above. The selected unaudited condensed pro forma combined information of Liberty Global has been derived from and should be read in conjunction with the historical financial statements and related notes thereto of LMI and UGC. The LMI historical financial statements are included elsewhere herein and the UGC historical financial statements are incorporated by reference into this document.
Selected Unaudited Condensed Pro Forma Combined
Financial Data of LMI and Liberty Global
                     
    Pro forma
     
        Liberty Global
    LMI    
        As adjusted for
    As adjusted for   Consummated
    Consummated   Transactions and
    Transactions   Proposed Mergers
         
    amounts in thousands,
    except per share amounts
Summary Statement of Operations Data for year ended December 31, 2004:
 
Revenue
  $ 4,348,873       4,348,873  
 
Depreciation and amortization
  $ (1,415,786 )     (1,415,786 )
 
Operating loss
  $ (127,203 )     (127,203 )
 
Net earnings (loss)
  $ 3,756       (175,677 )
 
Net earnings (loss) per common share:
               
   
Basic and diluted net earnings (loss) per common share
  $ 0.02       (0.70 )
   
Shares used in computing basic and diluted net earnings (loss) per common share
    162,481       251,726  
Summary Balance Sheet Data as of December 31, 2004:
 
Cash and cash equivalents
  $ 2,523,960       2,512,960  
 
Investment in affiliates
  $ 1,694,293       1,694,293  
 
Property and equipment, net
  $ 6,744,295       6,744,295  
 
Intangible assets not subject to amortization
  $ 4,802,586       7,160,105  
 
Total assets
  $ 17,346,576       19,693,095  
 
Debt, excluding current portion
  $ 7,068,641       7,068,641  
 
Stockholders’ equity
  $ 5,242,181       8,701,010  
Comparative Per Share Financial Data
The following table shows (1) the basic and diluted loss per common share and book value per share data for each of LMI and UGC on a historical basis, (2) the basic and diluted loss per common share and book value per share for Liberty Global on a pro forma basis and (3) the equivalent pro forma net income and book value per share attributable to the shares of Liberty Global common stock issuable at an exchange ratio of 0.2155 per UGC share. Pro forma per share data has been presented assuming UGC stockholders (other than LMI and its wholly owned subsidiaries) receive (1) all stock consideration or (2) 80% stock and 20% cash consideration.
The following information should be read in conjunction with (1) the separate historical financial statements and related notes of LMI included elsewhere herein, (2) the separate historical financial statements and related notes of UGC incorporated by reference herein and (3) the unaudited condensed pro forma combined financial statements of Liberty Global included elsewhere herein. The pro forma information is not necessarily indicative of the results of operations that would have resulted if the Proposed Mergers and the Consummated Transactions had been completed as of the assumed dates or of the results that will be achieved in the future.
We calculate historical book value per share by dividing stockholders’ equity by the number of shares of common stock outstanding at December 31, 2004. We calculate pro forma book value per share by dividing pro forma stockholders’ equity by the pro forma number of shares of Liberty Global common stock that would have been outstanding had the Proposed Mergers been completed as of December 31, 2004.

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Liberty Global pro forma combined loss applicable to common stockholders, pro forma stockholders’ equity and the pro forma number of shares of Liberty Global common stock outstanding have been derived from the unaudited condensed pro forma combined financial information for Liberty Global appearing elsewhere herein.
We calculate the UGC equivalent pro forma per share data by multiplying the pro forma per share amounts by the exchange ratio of 0.2155 shares of Liberty Global common stock for each share of UGC common stock.
Neither LMI nor UGC has paid any cash dividends on its common stock during the periods presented.
                                                   
        Liberty Global   UGC
             
        Pro forma       Pro forma equivalent
                 
    LMI       80% stock           80% stock
            and 20%           and 20%
    Historical   All stock   cash   Historical   All stock   cash
                         
    as restated(1)           as restated(2)        
Basic and diluted net loss per common share:
                                               
 
Year ended December 31, 2004
  $ (0.11 )     (0.70 )     (0.74 )     (0.46 )     (0.15 )     (0.16 )
Book value per common share as of:
                                               
 
December 31, 2004
  $ 30.33       34.57       33.95       3.07       7.45       7.32  
Cash dividends
  $                                
 
(1)  See note 23 to the consolidated financial statements of LMI, included elsewhere herein.
 
(2)  See note 27 to the consolidated financial statements of UGC, incorporated by reference herein.
Comparative Per Share Market Price and Dividend Information
Market Price
The following table sets forth high and low sales prices for a share of LMI Series A common stock, LMI Series B common stock and UGC Class A common stock for the periods indicated.
LMI Series A common stock and LMI Series B common stock trade on The Nasdaq National Market under the symbols “LBTYA” and “LBTYB,” respectively. In connection with LMI’s June 7, 2004 spin off from Liberty, LMI common stock first began trading on a when-issued basis on June 2, 2004.
UGC Class A common stock trades on The Nasdaq National Market under the symbol “UCOMA.” There is no trading market for the UGC Class B common stock or UGC Class C common stock.
                                                   
    LMI   UGC
         
    Series A   Series B   Class A
             
    High   Low   High   Low   High   Low
                         
2003
                                               
 
First quarter
                       —     $ 3.22     $ 2.20  
 
Second quarter
                       —     $ 5.63     $ 2.81  
 
Third quarter
                       —     $ 7.70     $ 4.92  
 
Fourth quarter
                       —     $ 9.00     $ 5.95  
2004
                                               
 
First quarter
                       —     $ 10.90     $ 7.22  
 
Second quarter(1)
  $ 38.00     $ 33.98     $ 41.25     $ 38.79     $ 8.34     $ 6.50  
 
Third quarter
  $ 37.00     $ 28.60     $ 41.25     $ 34.05     $ 7.51     $ 5.80  
 
Fourth quarter
  $ 47.27     $ 33.25     $ 49.31     $ 36.19     $ 9.79     $ 7.18  
2005
                                               
 
First quarter
  $ 47.70     $ 42.46     $ 50.25     $ 45.35     $ 10.23     $ 8.97  
 
Second quarter through April 28
  $ 44.02     $ 40.91     $ 46.40     $ 43.95     $ 9.48     $ 8.85  
 
(1)  As to LMI common stock, from the period beginning on June 8, the date on which regular way trading began in LMI common stock, and ending on June 30.
On January 14, 2005, the last trading day before the public announcement of the mergers, LMI Series A common stock closed at $43.69 per share, LMI Series B common stock closed at $46.44 per share and UGC Class A common

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stock closed at $9.64 per share. Based upon the exchange ratio in the stock election of 0.2155, the pro forma equivalent per share value of the UGC Class A common stock on January 14, 2005, was equal to approximately $9.42 per share.
On April 28, 2005, LMI Series A common stock closed at $41.31 per share, LMI Series B common stock closed at $44.14 per share and UGC Class A common stock closed at $8.95 per share. Based upon the exchange ratio in the stock election of 0.2155, the pro forma equivalent per share value of the UGC Class A common stock on April 28, 2005, was equal to approximately $8.90 per share.
It is expected that Liberty Global Series A common stock and Series B common stock will be listed on the Nasdaq National Market under the symbols “LBTYA” and “LBTYB”, respectively, the same symbols under which LMI common stock currently trades.
Dividends
LMI. In July 2004, LMI distributed, as a dividend to its stockholders, 0.20 of a transferable subscription right for each share of LMI common stock owned by them as of 5:00 p.m., New York City time, on July 26, 2004, the record date for the LMI rights offering. Each whole right to purchase LMI Series A common stock entitled the holder to purchase one share of LMI Series A common stock at a subscription price of $25.00 per share. Each whole right to purchase LMI Series B common stock entitled the holder to purchase one share of LMI Series B common stock at a subscription price of $27.50 per share. In addition, each whole Series A and Series B right entitled the holder to subscribe, at the same applicable subscription price pursuant to an oversubscription privilege, for additional shares of the applicable series of LMI common stock, subject to proration. LMI has paid no other dividends since it became a publicly traded company.
Pursuant to the merger agreement, LMI may not pay any dividends (other than dividends payable in LMI common stock) until the mergers are completed or the merger agreement is terminated. Except for the foregoing, there are currently no restrictions on the ability of LMI to pay dividends in cash or stock. It is LMI’s current dividend policy to not pay cash dividends. All decisions regarding the payment of future dividends by LMI will be made by its board of directors, from time to time, in accordance with applicable law.
UGC. In January 2004, UGC distributed, as a dividend to its stockholders, 0.28 of a transferable subscription right for each share of UGC common stock owned by them at the close of business on January 21, 2004, the record date for the UGC rights offering. Each whole right to purchase UGC Class A common stock entitled the holder to purchase one share of UGC Class A common stock at a subscription price of $6.00 per share. Each whole right to purchase UGC Class B common stock entitled the holder to purchase one share of UGC Class B common stock at a subscription price of $6.00 per share. Each whole right to purchase UGC Class C common stock entitled the holder to purchase one share of UGC Class C common stock at a subscription price of $6.00 per share. In addition, each whole Class A, Class B and Class C right entitled the holder to subscribe, at the same subscription price pursuant to an oversubscription privilege, for additional shares of the applicable class of UGC common stock, subject to proration. UGC has paid no other dividends since its predecessor became a publicly traded company on August 2, 1993.
Pursuant to the merger agreement, UGC may not pay any dividends until the mergers are completed or the merger agreement is terminated. Except for the foregoing, there are currently no restrictions on the ability of UGC to pay dividends in cash or stock. It is UGC’s current policy to not pay cash dividends. All decisions regarding the payment of future dividends by UGC will be made by its board of directors, from time to time, in accordance with applicable law.
Liberty Global. Following the consummation of the mergers, all decisions regarding the payment of dividends by Liberty Global will be made by its board of directors, from time to time, in accordance with applicable law after taking into account various factors, including its financial condition, operating results, current and anticipated cash needs, plans for expansion and possible loan covenants which may restrict or prohibit its payment of dividends.

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SPECIAL FACTORS
Background of the Mergers
LMI was formerly a wholly owned subsidiary of Liberty. On June 7, 2004, Liberty distributed to its stockholders, on a pro rata basis, all of the issued and outstanding shares of LMI common stock, and LMI became an independent, publicly-traded company. From time to time following the spin off, LMI’s board of directors and management reviewed the assets held by LMI to determine the available alternatives for enhancing the value of the company.
Among the alternatives discussed following the spin off was a potential combination of LMI with its subsidiary UGC, in which LMI owns capital stock representing 53.6% of the equity and 91% of the outstanding voting power. On November 12, 2004, John C. Malone, Chairman of the Board, Chief Executive Officer and President of LMI, stated in response to questions posed during a conference call with LMI investors that LMI would eventually like to combine with UGC, but not at the then-current market prices, which he believed undervalued LMI. During the period from June 2004 through early December 2004, LMI did not have any contact with UGC regarding a potential combination.
At a meeting of the LMI board of directors on December 10, 2004, Mr. Malone sought authorization from the board to contact and initiate discussions with UGC concerning a possible combination of LMI and UGC in a stock-for-stock transaction. Mr. Malone discussed with the board his view that a combination of the two companies should be approached as a merger of equals, with the board of directors and senior management team of the combined company being drawn from members of the boards and senior management teams of both companies. After discussion of the exchange ratio implied by the relative trading prices and sum-of-the parts values of the two companies, the board concluded that any valuation discussions with UGC should be on a market-to-market or fair value-to-fair value basis, with no premium to either company’s stockholders. The LMI board authorized Mr. Malone to contact and initiate discussions with UGC on the basis discussed at that meeting.
On the evening of December 10, 2004, as a prelude to discussions with UGC, LMI delivered a letter to UGC stating that it wished to initiate discussions concerning a possible transaction involving the shares of UGC that LMI did not already own, and seeking a mutual confidentiality agreement in anticipation of such talks. This letter did not include any terms of a proposed transaction.
At a telephonic meeting of the UGC board of directors held on December 13, 2004, the board appointed three outside directors, John P. Cole, Jr., John W. Dick and Paul A. Gould, to serve as a Special Committee; to advise the UGC board with respect to the fairness of any transactions proposed by LMI; if deemed appropriate by the Special Committee, to negotiate the terms and conditions of a transaction with representatives of LMI; following such negotiations, to make a recommendation to the UGC board as to whether such proposal should be accepted or rejected by the UGC board; and to retain, at UGC’s expense, such attorneys, investment bankers, accountants, actuaries or other advisors as the Special Committee might deem appropriate in order to advise and assist it. Messrs. Cole, Dick and Gould were selected to serve on the Special Committee because they were independent under the rules of the Nasdaq Stock Market and have no relationship with LMI or any of its affiliates that the Special Committee viewed as undermining the independence of the Special Committee, as further described under “— Fairness Determinations and Recommendations of the Special Committee and the UGC Board.”
Subsequently, by unanimous written consent effective as of December 22, 2004, the UGC board approved payment to each member of the Special Committee of a fee of $95,000 for serving on the Special Committee and provided the Special Committee with certain additional powers in connection with the performance of its duties, including full access to UGC’s records and personnel and the authority to execute and deliver any documents or agreements it deemed appropriate in connection with its duties.
After conducting interviews and follow-up conversations with three law firms, on December 14, 2004, the Special Committee retained Debevoise & Plimpton LLP to act as its legal advisor. Among the reasons for this selection were Debevoise’s strong reputation, its experience in mergers and acquisitions transactions, its experience in representing other special committees, the seniority and experience of the attorneys who would be working on the transaction and the absence of any material prior relationship with LMI, UGC or any of their affiliates.
On December 15, 2004, the Special Committee, together with representatives of Debevoise, conducted preliminary interviews with representatives of two internationally recognized investment banking firms: Morgan Stanley & Co. Incorporated and another firm. Mr. Gould and Debevoise participated in these meetings in person, and Messrs. Cole and Dick joined by telephone. Each firm was asked to provide additional information to assist the Special Committee in its decision.

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Also on December 15, 2004, the members of the Special Committee, together with their legal advisors, spoke by telephone with Mr. Malone. Mr. Malone noted that LMI was not making a formal offer and said that he would be interested in discussing with the Special Committee a stock-for-stock transaction based upon relative fair values in which LMI and UGC and their respective boards of directors and management teams would be combined. He indicated that in his view the recent market prices of LMI’s and UGC’s stocks reflected a fair relative valuation of the two companies. Mr. Malone asked the Special Committee whether they would be interested in discussing a transaction within that framework. In response to questions from the Special Committee, Mr. Malone expressed his views as to the benefits to be derived from a combination of LMI and UGC. The Special Committee also asked Mr. Malone whether LMI would be willing to sell its interest in UGC in a transaction for the entire company. Mr. Malone responded that LMI would not be willing to consider such a transaction and had no current intention of selling its interest in UGC to a third party.
On December 20, 2004, the Special Committee, together with representatives of Debevoise, conducted further interviews with representatives of Morgan Stanley and another investment banking firm. Mr. Gould and Debevoise participated in these meetings in person, and Messrs. Cole and Dick joined by telephone. The Special Committee and its legal advisor raised questions designed to ascertain any prior relationships of each firm with Liberty, LMI and UGC.
On December 21, 2004, the Special Committee had two separate telephone meetings during which the Special Committee extensively discussed the qualifications and fee expectations of the investment banking firms being considered for the position of financial advisor to the Special Committee. At the instruction of the Special Committee, Mr. Gould subsequently requested that each firm reduce its initial fee proposal.
On December 22, 2004, the Special Committee had a further telephonic meeting to discuss the selection of a financial advisor. The Special Committee reviewed the revised fee proposals made by Morgan Stanley and another investment banking firm in response to the committee’s request. After discussion, the Special Committee agreed to choose Morgan Stanley provided it was able to meet the Special Committee’s fee expectations. Morgan Stanley met those expectations and was retained on December 22, 2004, to act as the Special Committee’s financial advisor. Among the reasons for selecting Morgan Stanley were Morgan Stanley’s strong reputation, experience in transactions of this kind and knowledge of UGC, its business and the industries in which UGC and LMI operate. The Special Committee also considered the fact that Morgan Stanley’s prior representation of UGC in unrelated transactions gave Morgan Stanley additional insight into UGC’s business, as well as the fact that Morgan Stanley had an experienced Japanese team that would be helpful in analyzing the value of LMI’s investment in J-COM.
On December 23, 2004, the Special Committee held a telephonic meeting with its legal and financial advisors. Participants discussed the Special Committee’s December 15, 2004 conversation with Mr. Malone regarding a possible transaction. Participants also discussed the methodologies that Morgan Stanley anticipated using in advising the Special Committee, strategic issues and next steps with respect to Morgan Stanley’s commencing its financial analysis, including due diligence plans. The Special Committee raised questions as to the methodologies Morgan Stanley anticipated using in advising the Special Committee, to which Morgan Stanley responded. At the Special Committee’s request, Morgan Stanley undertook to keep the Special Committee informed as its work progressed and as to developments with respect to UGC and LMI, including progress in the proposed combination of the Chilean affiliates of UGC and LMI and by providing market perspectives regarding the prospects for the proposed initial public offering of J-COM. At this meeting, Debevoise also reviewed with the members of the Special Committee the Delaware law applicable to the potential transaction and their duties thereunder.
On December 28, 2004, the Special Committee held a telephonic meeting with its legal and financial advisors to discuss the status of Morgan Stanley’s financial due diligence. The Special Committee agreed to arrange a call with Mr. Malone on December 31, 2004.
On December 29, 2004, representatives of Debevoise contacted Elizabeth Markowski, the general counsel of LMI, and Ellen Spangler, the general counsel of UGC, regarding legal due diligence matters.
On December 30, 2004, the Special Committee held a telephonic meeting with its legal advisors. The Special Committee discussed legal and strategic issues relating to a potential transaction, including whether the Special Committee should seek to obtain a requirement that a majority of the holders of UGC’s publicly held shares (excluding shares held by LMI, Liberty or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC) approve any transaction, also known as a “majority of the minority” condition.
On December 31, 2004, the Special Committee held a telephonic meeting with its legal and financial advisors. Morgan Stanley described the status of its financial due diligence. Morgan Stanley also discussed its preliminary views as to the potential values of LMI and UGC and implied exchange ratios from various perspectives, including public equity analyst reports, a preliminary discounted cash flow analysis, the valuation of companies in similar industries and

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markets as UGC and LMI, a preliminary sum-of-the-parts analysis of LMI taking into account the holding company discount thought to be reflected in the public market trading price of LMI’s common stock, historical trading prices of the LMI and UGC common stock and precedent transactions involving purchases of minority interests by controlling stockholders. The Special Committee discussed with Morgan Stanley the approach that Morgan Stanley took in formulating its preliminary views and raised questions to which Morgan Stanley responded regarding Morgan Stanley’s analysis and the valuation metrics it employed. The Special Committee and its advisors also discussed certain negotiating considerations.
Later on December 31, 2004, the Special Committee and its legal and financial advisors spoke by telephone with Mr. Malone, Ms. Markowski and two other executives of LMI. On this call Mr. Malone expressed his views as to the prospects of the LMI and UGC businesses, benefits to be obtained by combining LMI and UGC, and why such a combination should be on a market-to-market or fair value-to-fair value basis. Mr. Malone insisted that LMI would not pay a premium for the UGC minority stake, because LMI had already invested heavily in UGC to acquire LMI’s control position and the unaffiliated stockholders of UGC would share in all of the benefits of the combined company. He said that any discussion should focus on the parties’ respective views as to the relative values of the two companies. He further observed that when he had first approached UGC about discussing a possible combination, the relative market prices of the stocks of the two companies implied an exchange ratio between 0.1923 and 0.1961 shares of LMI Series A common stock for each share of UGC Class A common stock. Since that time, he noted, whether due to speculation regarding LMI’s intentions towards its largest investment or currency exchange rate changes, UGC’s stock price had moved and had already built in a premium. Following the call with Mr. Malone, the Special Committee reconvened by telephone with its legal and financial advisors to discuss its next steps. The Special Committee then continued the discussion with its legal advisors only.
On January 3, 2005, the Special Committee held a telephonic meeting with its legal and financial advisors. Morgan Stanley discussed potential arguments that could be used when negotiating to maximize the value of the merger consideration to be received by the unaffiliated stockholders of UGC and provided an update as to its preliminary views regarding the potential values of LMI and UGC, including potential combination benefits that might result from the proposed transaction, such as the reduction of the holding company discount thought to be reflected in the public market trading price of LMI’s common stock, and approaches to sharing those benefits, the implied exchange ratios and potential premiums with respect to various benchmark dates. The Special Committee discussed Morgan Stanley’s views with it and raised questions to which Morgan Stanley responded regarding Morgan Stanley’s analysis and the valuation metrics employed. The Special Committee also inquired as to the status of Morgan Stanley’s financial due diligence, and requested that Morgan Stanley obtain additional information. The Special Committee and its advisors discussed potential strategic options for the consummation of a potential transaction. Subsequently, the Special Committee continued its discussions in executive session.
On January 4, 2005, the Special Committee held a telephonic meeting with its legal advisors. The Special Committee reviewed the merits of a public versus a private negotiating process and instructed Debevoise to discuss the matter with Ms. Markowski. The Special Committee also met in executive session and had a conference call with Michael T. Fries, the Chief Executive Officer and President of UGC, to review various matters relating to the UGC business and the discussions with LMI. Morgan Stanley spoke separately with Mr. Fries by telephone to discuss similar matters.
On January 5, 2005, representatives of Debevoise called Ms. Markowski to discuss the possibility of pursuing a public process. Ms. Markowski stated that to date LMI had simply asked if the Special Committee would be interested in pursuing discussions on the basis outlined by Mr. Malone in earlier conversations, and that to her knowledge the Special Committee had yet to respond. She also noted that the parties had yet to exchange views on relative values. Ms. Markowski advised Debevoise that in the absence of an agreement in principle on the essential terms of a transaction, she did not believe LMI would be willing to make a formal offer and engage in a public negotiating process.
Later on January 5, 2005, the Special Committee met telephonically with its legal and financial advisors. Morgan Stanley reported on its recent conversation with Mr. Fries. The Special Committee and its advisors discussed potential combination benefits that might result from the proposed transaction, such as the reduction of the holding company discount thought to be reflected in the public market trading price of LMI’s common stock and benefits resulting from the combination of the Chilean affiliates of UGC and LMI, and approaches to sharing those benefits. Debevoise reported on its conversation with Ms. Markowski. The Special Committee agreed to convene in person in New York on January 10, 2005. The Special Committee further agreed to dispatch its financial advisors to meet with Mr. Malone in person on the morning of January 10, 2005 to discuss the details of a possible transaction with LMI and the preliminary valuations of the two companies by Morgan Stanley. The Special Committee and its advisors also discussed certain strategic issues, including the value of obtaining a majority of the minority condition. On the evening of January 5,

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2005, Morgan Stanley spoke by telephone with Mr. Fries at the instruction of the Special Committee to follow up on certain financial due diligence matters.
On January 7, 2005, the Special Committee met telephonically with its legal and financial advisors. Morgan Stanley provided the Special Committee with an overview of the advocacy points that it anticipated making to Mr. Malone in order to maximize the value of the merger consideration to be received by the unaffiliated stockholders of UGC and responded to the Special Committee’s questions and comments. Morgan Stanley also provided the Special Committee with an update, based on Morgan Stanley’s knowledge of Japan’s public securities markets, as to the market prospects for the proposed initial public offering of J-COM. Morgan Stanley informed the Special Committee that it had received from UGC management the projected compound annual growth rates for UGC’s broadband operations described below under “—Forward-Looking Statements; Certain Projections — Financial Projections Regarding UGC — Compound Annual Growth Rates.” The Special Committee instructed Morgan Stanley to work with UGC management to understand these projections better in light of Morgan Stanley’s prior work as described below under “— Opinion of the Financial Advisor to the Special Committee — Discounted Cash Flow Analysis.”
On the morning of January 10, 2005, representatives of Morgan Stanley met in person with Mr. Malone and Ms. Markowski. Morgan Stanley presented an advocacy case as to valuations of LMI and UGC and discussed those values and the implied exchange ratios with Mr. Malone. Morgan Stanley also explored with Mr. Malone LMI’s willingness to consider a cash alternative or the addition of another component to the stock consideration to provide additional value to the UGC public stockholders.
On the afternoon of January 10, 2005, the Special Committee met in person in New York with its legal advisors to discuss the duties of the members of the Special Committee under Delaware law and legal and strategic issues, including whether the Special Committee should insist upon a majority of the minority condition.
Representatives of Morgan Stanley subsequently joined the meeting and briefed the members of the Special Committee on the results of their conversations earlier in the day with the LMI representatives. Morgan Stanley informed the Special Committee that Mr. Malone had repeated his interest in a stock-for-stock transaction at an exchange ratio reflecting a price at or about market, which at that time implied an exchange ratio of 0.20 LMI shares for each share of UGC. Morgan Stanley reported that Mr. Malone had exhibited some very limited flexibility within that range, including a willingness to consider offering UGC stockholders a cash option for up to 20% of the aggregate value of the merger consideration, the possibility of providing a small amount of additional merger consideration in the form of structured securities and an interest in having the combined company pursue a stock buy-back strategy after the consummation of a transaction. After discussion with Morgan Stanley, and having considered their prior discussions and the preliminary views previously presented to the Special Committee by Morgan Stanley, the Special Committee concluded that Mr. Malone’s position was below the range of merger consideration that it could reasonably expect to achieve in the proposed transaction. As a strategic matter, the Special Committee also concluded that it could expect Mr. Malone to improve upon his initial position over the course of negotiations. The Special Committee agreed that Mr. Malone’s position provided the basis for further discussion.
Later on the evening of January 10, 2005, the Special Committee, Mr. Malone, Ms. Markowski, the respective legal advisors of LMI and the Special Committee, Morgan Stanley and LMI’s financial advisor, Banc of America Securities, met to discuss further a possible transaction. Mr. Malone emphasized that he had not made an offer for UGC and that he would not engage in a public negotiating process. He expressed concern that recent increases in the UGC stock price raised doubts as to whether the UGC and LMI stock prices continued to reflect the relative fair values of the two companies, and again stated that LMI was unwilling to pay a premium for the UGC stock at its then-market price. He also repeated the statements made earlier that day to Morgan Stanley. Representatives of the Special Committee noted their strong interest in having a majority of the minority condition as an element of any transaction. Mr. Malone stated that LMI was not interested in pursuing a transaction with such a condition. At the request of the Special Committee, Mr. Malone stated his personal willingness as a significant stockholder of LMI to enter into a voting agreement to support the approval of a potential transaction by the LMI stockholders. Representatives of Morgan Stanley and Banc of America agreed to meet the following morning to discuss the structured securities Mr. Malone had earlier indicated might be included in the merger consideration.
Subsequently, the Special Committee met with its legal and financial advisors to discuss its response to LMI. After discussion with Morgan Stanley, and having considered their prior discussions and the preliminary views previously presented to the Special Committee by Morgan Stanley, the Special Committee concluded that proposing an exchange ratio of 0.23 LMI shares for each share of UGC would be an aggressive and appropriate response to LMI’s position in the context of a negotiation.

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On the morning of January 11, 2005, representatives of Morgan Stanley and Banc of America Securities met to discuss the possible inclusion of structured securities as an additional component of the merger consideration. Banc of America and Morgan Stanley discussed Banc of America’s preliminary structure of a security that could contain both debt and equity characteristics and explored other potential structures. In addition, Banc of America and Morgan Stanley discussed the valuation methodologies each was employing with respect to LMI and UGC.
On the afternoon of January 11, 2005, Messrs. Dick and Gould met with the Special Committee’s legal and financial advisors. Mr. Cole was not present. Morgan Stanley updated the members of the Special Committee on its discussions with Banc of America Securities. After discussion with its advisors, the Special Committee members determined that the structured securities described by Mr. Malone and Banc of America Securities could not be valued properly because the proposal was both highly complex and not fully developed. The Special Committee members further determined that a negotiation over the terms of these securities would significantly distract the parties from the Special Committee’s central concern of improving the exchange ratio to maximize economic value for the unaffiliated stockholders of UGC and that these securities were unlikely to provide material economic value to the unaffiliated stockholders of UGC. Morgan Stanley also discussed with the Special Committee members a range of premiums to various assumed UGC stock prices at various exchange ratios. The discussion was based upon both the then-current trading price of LMI’s stock and a higher assumed price. Morgan Stanley observed that the latter price may have more fully reflected the underlying value of LMI, since the public market trading price of LMI’s common stock likely reflected a holding company discount (widely acknowledged by the research community) of 10% to 20%, which would be impacted by the clarification of J-COM’s value as a result of its proposed initial public offering and by the simplification of the relationship between UGC and LMI as a result of the proposed combination of the two companies.
Later that afternoon, Messrs. Dick and Gould met with Mr. Malone, Ms. Markowski, and the respective legal and financial advisors of the Special Committee and LMI. The initial positions of the two sides were as follows: The Special Committee members and their representatives stated (based upon the prior evening’s Special Committee discussions) that an exchange ratio of 0.23 LMI shares for each share of UGC would be acceptable. Mr. Malone and his representatives stated that an exchange ratio of 0.20 continued to reflect LMI’s sense of an at-market transaction. The Special Committee noted that a majority of the minority condition was of key importance and that it would be interested in obtaining a standstill agreement with Mr. Malone and his affiliates with respect to acquisitions of LMI stock after the consummation of any transaction. Mr. Malone stated that a majority of the minority condition remained unacceptable to LMI and refused to sign a standstill agreement. After extensive further discussion and negotiation, in which the Special Committee members further emphasized the critical importance of a majority of the minority condition, Mr. Malone agreed that LMI would consider a majority of the minority condition if UGC agreed to include in any merger agreement certain termination rights for LMI to avoid a prolonged process. Messrs. Dick and Gould continued negotiations with Mr. Malone without the presence of advisors. At the conclusion of this discussion, each side summarized their last proposals. Mr. Malone had proposed that, subject to the approval of the LMI board, he would consider an exchange ratio of 0.213, reflecting an at-market transaction based upon that day’s closing stock prices, with a 20% cash election option at $9.50 per share of UGC, representing a premium over that day’s UGC closing stock price of $9.26 per share, and the majority of the minority condition if the merger agreement included certain termination rights for LMI. In response, Messrs. Dick and Gould proposed, subject to confirmation by the entire Special Committee, that they would consider an exchange ratio of 0.22 LMI shares for each share of UGC, a 20% cash election option at $9.75 per share and that the Special Committee would drop its request that Mr. Malone sign a standstill agreement.
On the morning of January 12, 2005, the Special Committee met telephonically with its legal and financial advisors to update Mr. Cole on the prior day’s negotiations and to discuss the Special Committee’s response to LMI’s proposed financial terms for a transaction. At this meeting, Morgan Stanley also discussed with the Special Committee implied values per UGC share and resulting premiums at assumed LMI share prices based upon the 0.213 exchange ratio proposed by Mr. Malone and the 0.22 exchange ratio proposed by Messrs. Dick and Gould and, in each case, based upon an election to receive consideration consisting of either 100% stock or 80% stock and 20% cash.
Also on the morning of January 12, 2005, the board of directors of LMI met to discuss the terms of the potential transaction. Mr. Malone discussed with the LMI board the negotiations with the Special Committee over the prior two days. Noting that the closing prices of the two companies’ stocks the prior day implied an exchange ratio of 0.213, Mr. Malone advised the board that he would be willing to support a transaction at that exchange ratio and compromise with a marginally higher exchange ratio. Mr. Malone then requested authority from the LMI board to propose an exchange ratio of 0.215 and a cash election alternative of $9.55 per share. After discussing the concerns of the board with respect to the time to complete the transaction in light of the uncertainty created by the majority of the minority

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condition and the termination rights Mr. Malone was negotiating for, the LMI board authorized Mr. Malone to propose the foregoing exchange ratio and cash alternative election.
On the afternoon of January 12, 2005, the Special Committee reconvened by telephone with its legal and financial advisors and received reports on conversations with representatives of LMI, who had contacted Debevoise and Morgan Stanley to request a conference call with the Special Committee to continue negotiations.
Thereafter, the Special Committee and its legal and financial advisors met telephonically with Mr. Malone and Ms. Markowski. Mr. Malone informed the Special Committee that, after consultation with the LMI board, LMI’s best and final proposal was an exchange ratio of 0.215 LMI shares for each share of UGC with a 20% cash election option at $9.55 per share. Mr. Malone insisted that the price negotiations be concluded prior to market close in order to protect LMI against further movements in the stock price, which he believed continued to reflect speculation about a possible transaction, and stated that LMI would withdraw from negotiations if there was no agreement in principle on the exchange ratio before market close.
The Special Committee, after separate discussion with its legal and financial advisors, recognized that it had obtained increases in the exchange ratio and cash amount offered by LMI and that the negotiation was likely nearing the point at which the most favorable financial terms that could be obtained from LMI were reached and further negotiation could cause LMI to abandon the transaction. The Special Committee also discussed its concern that upward movements in the public market price of UGC common stock could cause LMI to abandon the transaction. After further discussion, the Special Committee informed the LMI representatives that it would be prepared to recommend the transaction at an exchange ratio of 0.216 LMI shares for each share of UGC with a 20% cash election option at $9.60 per share. Mr. Malone responded that, subject to receiving approval from the LMI board and only if this proposal was sufficient to obtain agreement, he was prepared to accept an exchange ratio of 0.2155 LMI shares for each share of UGC with a 20% cash election option at $9.58 per share. The Special Committee and the LMI representatives agreed that they would instruct their respective legal advisors to proceed to negotiate definitive documentation on that basis, with final agreement subject to the successful completion of such documentation, board approval and the receipt by each of LMI and the Special Committee from their respective financial advisors of an opinion as to the fairness, from a financial point of view, of the proposed merger consideration.
On the morning of January 13, 2005, Baker Botts L.L.P., counsel to LMI, delivered to Debevoise an initial draft of a proposed merger agreement. On the morning of January 14, 2005, Debevoise delivered to Baker Botts an initial draft of a proposed voting agreement and provided initial comments to the draft merger agreement. Also on January 14, 2005, the Special Committee met telephonically with its legal advisors to discuss the provisions of the proposed merger agreement.
From January 14 through January 17, 2005, the terms of the merger agreement and the voting agreement were negotiated, including the scope of the representations and warranties that would be provided by each of the parties and the scope of the termination right required by LMI in exchange for agreeing to provide UGC with a majority of the minority voting condition.
On January 17, 2005, the Special Committee met in person in New York with its legal and financial advisors. At this meeting, Morgan Stanley delivered its financial analysis in connection with the proposed transaction and its opinion that, as of the date of the opinion and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the merger consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders. See “— Fairness Determinations and Recommendations of the Special Committee and the UGC Board.” Morgan Stanley also discussed with the Special Committee the impact on the value of LMI’s offer of UGC stockholders’ elections to receive cash consideration at various LMI share prices. The Special Committee raised questions regarding various aspects of Morgan Stanley’s analysis, including the methodologies used and Morgan Stanley’s access to information, to which Morgan Stanley responded. The Special Committee also considered and discussed the specific factors described below under “—Fairness Determination and Recommendations of the Special Committee and the UGC Board — Fairness Determination and Recommendation of the Special Committee.” The Special Committee then unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests, of the unaffiliated stockholders of UGC, approved the UGC merger and the merger agreement, the voting agreement and the transactions contemplated thereby and resolved to recommend that the UGC board of directors approve the UGC merger and the merger agreement, the voting agreement and the transactions contemplated thereby, and that the stockholders of UGC approve the UGC merger, the merger agreement and the transactions contemplated thereby.

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Following the meeting of the Special Committee, the UGC board of directors met. The Special Committee reported its recommendation that the UGC board approve and declare advisable the UGC merger, the merger agreement, the voting agreement and the transactions contemplated thereby, and its recommendation that the stockholders of UGC approve the UGC merger, the merger agreement and the transactions contemplated thereby. Morgan Stanley discussed with the UGC board its financial analysis and the opinion that it delivered to the Special Committee, as described under “— Opinion of the Financial Advisor to Special Committee.” The UGC board, adopting the analysis of the Special Committee, then unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC. The UGC board also unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and the voting agreement, is fair to, and in the best interests of, UGC and its stockholders, approved the entry into the merger agreement and the other documents contemplated thereby, and resolved to recommend that the holders of UGC capital stock approve the UGC merger and approve and adopt the merger agreement.
On January 17, 2005, the LMI board of directors met to consider the business combination with UGC. Participating in the meeting from Banc of America Securities was a team led by Stephen Ketchum. Ms. Markowski was also present. At this meeting, Mr. Malone recounted for the LMI board the history of the negotiations with the Special Committee. He noted that the relative trading prices of LMI’s and UGC’s stock implied a ratio of 0.194 to 1 over a period of two to three weeks prior to his initiation of discussions, but that the market price of UGC’s stock had climbed during the negotiations increasing the implied exchange ratio. Banc of America Securities then delivered its financial analysis in connection with the proposed transaction and its oral opinion, which was subsequently confirmed in writing, that, as of January 17, 2005 and based upon and subject to the factors, limitations and assumptions set forth in the opinion, the consideration to be received by the holders of LMI’s common stock, other than affiliates of LMI, pursuant to the merger agreement is fair from a financial point of view to the holders of LMI’s common stock, other than any affiliate of LMI. See “— Opinion of LMI’s Financial Advisor.” Ms. Markowski reviewed the terms of the merger agreement and the voting agreement to be signed by Mr. Malone, the negotiation of each of which had been completed in all material respects. The LMI board then unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the LMI merger, are advisable, fair to, and in the best interests, of LMI and its stockholders, determined that the transactions contemplated by the merger agreement, including the UGC merger, are, substantively and procedurally, fair to the unaffiliated stockholders of UGC, approved the entry into the merger agreement, and resolved to recommend that the holders of LMI common stock approve the LMI merger and approve and adopt the merger agreement.
On the evening of January 17, 2005, the parties finalized the merger agreement, including the disclosure schedules to the merger agreement, and, early on the morning of January 18, 2005, executed the merger agreement and the voting agreement. Also on January 18, 2005, LMI and UGC issued a joint press release announcing the merger agreement and the proposed mergers.
Fairness Determinations and Recommendations of the Special Committee and the UGC Board
The Special Committee
The UGC board of directors created the Special Committee to negotiate exclusively on UGC’s behalf any transaction with LMI, because certain of the other directors of UGC have a conflict of interest in evaluating LMI’s proposal on behalf of the stockholders of UGC (other than LMI and its affiliates). This conflict of interest exists because these directors also serve as LMI’s officers or directors. In addition, the members of the management of UGC who serve on the UGC board could be viewed as having a conflict of interest because of LMI’s position as the controlling stockholder of UGC. Therefore, the Special Committee is comprised of three members of the UGC board who are independent under the rules of the Nasdaq Stock Market and who have no relationship with LMI or any of its affiliates that the Special Committee viewed as undermining the independence of the Special Committee. The Special Committee considered that each member of the committee currently serves as a director of UGC, and that, assuming the consummation of the proposed transaction, each member of the committee expects to serve as a director of Liberty Global. The Special Committee also recognized the following, as to Paul A. Gould: (1) that Mr. Gould currently serves as a director of Liberty, that Mr. Gould served as a director of Liberty’s predecessor (Old Liberty) prior to its 1994 business combination transaction with Tele-Communications, Inc. (TCI), each a company in which Mr. Malone was Chairman of the Board and a significant stockholder, and that Mr. Gould served as a member of the special committee of Old Liberty’s board formed to evaluate the transaction with TCI and the consideration to be received by the public stockholders of Old Liberty in that transaction; (2) that subsequent to the 1994 business combination transaction between TCI and Old Liberty, Mr. Gould served as a member of the board of directors of TCI and several companies in which TCI or Liberty had a substantial investment or controlling interest; (3) that, in connection with

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the 1999 merger between TCI and AT&T Corp., Mr. Gould and another TCI director each received a fee of $1 million for their services on a special committee of the TCI board formed to evaluate the merger transaction with AT&T and the consideration to be received by the public stockholders of TCI in the TCI-AT&T merger; and (4) that Mr. Gould joined the UGC board at the time of Liberty’s acquisition of control of UGC in January 2004, after Mr. Gould requested a position on the UGC board as a result of his concerns at that time regarding the progress of UGC’s business. The Special Committee noted that Mr. Gould’s service on the boards of directors of various entities affiliated with Mr. Malone or in which Mr. Malone, directly or indirectly, was a substantial investor consisted in each case of service as an independent director. The Special Committee deemed Mr. Gould’s receipt of fees with respect to this service as a director to be insufficiently material to undermine his independence, given Mr. Gould’s personal finances. The Special Committee also noted that neither Mr. Cole nor Mr. Dick had any history of service on boards of directors of entities affiliated with Mr. Malone other than UGC and its subsidiaries, and that the Special Committee did not designate any member as its chairman and took all decisions unanimously. The Special Committee therefore determined that the factors described above regarding Mr. Gould would not undermine the independence of the Special Committee.
The members of the Special Committee are:
        John P. Cole, Jr. Mr. Cole has served as a director of UGC and its predecessors since March 1998. Mr. Cole served as a member of the United Pan-Europe Communications N.V., or UPC, Supervisory Board from February 1999 to September 2003. Mr. Cole is a founder of the Washington, D.C. law firm of Cole, Raywid and Braverman, which specializes in all aspects of telecommunications and media law.
 
        John W. Dick. Mr. Dick has served as a director of UGC since March 2003. He served as a member of the UPC Supervisory Board from May 2001 to September 2003, and a director of UGC Europe, Inc. from September 2003 to January 2004. He is the non-executive Chairman and a director of Hooper Industries Group, a privately held U.K. group consisting of: Hooper and Co (Coachbuilders) Ltd. (building special/bodied Rolls Royce and Bentley motorcars) and Hooper Industries (China) (providing industrial products and components to Europe and the U.S.). Until 2002, Hooper Industries Group also held Metrocab UK (manufacturing London taxicabs) and Moscab (a joint venture with the Moscow city government, producing left-hand drive Metrocabs for Russia). Mr. Dick has held his positions with Hooper Industries Group since 1984. Mr. Dick is also a director of Austar United Communications Limited, a public company in which UGC has an approximate 34% interest.
 
        Paul A. Gould. Mr. Gould has served as a director of UGC since January 2004. Mr. Gould has served as Managing Director of Allen & Company L.L.C., an investment banking services company, and has been associated with Allen & Company and its affiliates for more than the last five years. Mr. Gould is also a director of Ampco-Pittsburgh Corporation and Liberty, and has previously served on special committees for other companies, unaffiliated with Liberty, LMI and UGC, with respect to which other companies he has served as a member of the board of directors.
Fairness Determination and Recommendation of the Special Committee
On January 17, 2005, the Special Committee unanimously:
  •  determined that the UGC merger, on the terms and conditions set forth in the merger agreement and the voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC; and
 
  •  determined to approve, and to recommend that the UGC board of directors approve, the UGC merger, the merger agreement, the voting agreement and the transactions contemplated thereby, and that the UGC board recommend that the stockholders of UGC approve the UGC merger, the merger agreement and the transactions contemplated thereby.
The material factors considered by the Special Committee in making its fairness determination and recommendation are:
Supportive Factors
Negotiation Process and Procedural Fairness. The terms of the UGC merger, the merger agreement, the voting agreement and the transactions contemplated thereby were the result of extensive negotiations conducted by the Special Committee, which is comprised of independent directors, with the assistance of independent financial and legal advisors. The Special Committee recognized that it had obtained increases in the exchange ratio and cash amount offered by LMI, and concluded, based on the business experience of the Special Committee members and their

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knowledge of the negotiation style of the LMI officers leading the discussions for LMI, that an exchange ratio of 0.2155 Liberty Global shares for each share of UGC or a cash amount of $9.58 per UGC share at the election of the unaffiliated stockholders of UGC (up to an overall cap of 20% of the aggregate value of the merger consideration payable to such stockholders being paid in cash) were the most favorable financial terms that could be obtained from LMI and that further negotiation could have caused LMI to abandon the transaction.
Independent Financial Advisor. The Special Committee considered the presentation by its independent financial advisor, Morgan Stanley, and Morgan Stanley’s opinion that, as of the date of the opinion and based upon and subject to the assumptions, qualifications and limitations set forth in Morgan Stanley’s opinion, the merger consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders. The Special Committee noted that Morgan Stanley had been selected as its financial advisor after a competitive process, based upon the firm’s strong reputation, experience in transactions of this kind, experienced Japanese team that was available to assist in analyzing the value of LMI’s investment in J-COM and to provide market perspectives as to the prospects for J-COM’s planned initial public offering, and knowledge of UGC, its business and the industries in which UGC and LMI operate.
In evaluating the presentation and opinion of Morgan Stanley, which is summarized below under “— Opinion of the Financial Advisor to the Special Committee,” the Special Committee considered that Morgan Stanley’s compensation arrangements had been structured and negotiated to enhance the firm’s ability to provide objective advice to the Special Committee for the benefit of the unaffiliated stockholders of UGC. Morgan Stanley was entitled to receive an initial fee of $1.0 million at the time the engagement letter was executed. Morgan Stanley became entitled to receive an additional fee of $4.5 million at the time the Special Committee requested, and Morgan Stanley delivered, an opinion as to the fairness, from a financial point of view, of the merger consideration to be received by the unaffiliated stockholders of UGC. Morgan Stanley would have received the same fee had its opinion been as to the inadequacy of the merger consideration from a financial point of view. Morgan Stanley will not receive any additional compensation upon the successful completion of the UGC merger. The Special Committee believed that this fee arrangement helped advance the interests of the unaffiliated stockholders of UGC by ensuring that the Special Committee received the unbiased advice of its financial advisor.
In evaluating the presentation and opinion of Morgan Stanley, which is summarized below under “— Opinion of the Financial Advisor to the Special Committee,” the Special Committee noted that Morgan Stanley considered the results of all of its analyses as a whole and, except as described below, the Special Committee did not attribute any particular weight to any particular analysis or factor considered by it.
The Special Committee was aware that the value of the merger consideration implied by the 0.2155x exchange ratio and the LMI stock price of $43.69 as of January 14, 2005 was generally lower than the implied merger consideration ranges generated by two of the analyses performed by Morgan Stanley, described below under “— Discounted Cash Flow Analysis” and “— Equity Research Analysts’ Price Targets.”
In considering the discounted cash flow analysis, the Special Committee recognized that Morgan Stanley had calculated a range of potential values for UGC based on UGC management’s 2005 projections and long-term guidance and a model Morgan Stanley prepared, prior to its receipt of management’s long-term guidance and subsequently adjusted in light of that guidance, based on its review of UGC’s historical and budgeted financial performance as well as expected margins and growth rates of other companies in the same industry. The Special Committee discussed Morgan Stanley’s observation that its adjusted model reflected a more accurate view of UGC’s future performance because it was more in line with UGC’s historical and budgeted financial performance as well as expected margins and growth rates of other companies in the same industry. The Special Committee also considered the fact that, in performing its discounted cash flow analyses, Morgan Stanley applied the same discount rates to both the management case and the adjusted model. Morgan Stanley noted that the weighted average cost of capital analysis it had performed to determine these discount rates was based on comparable companies, which Morgan Stanley observed had growth rates in line with those reflected in the adjusted model. Morgan Stanley informed the Special Committee that it did not adjust the discount rates applied to the management case to account for the greater risk and uncertainty of the higher growth rate assumed in the management case. Instead, Morgan Stanley described to the Special Committee the greater risk and uncertainty associated with the management case and pointed out that using a higher discount rate sometimes associated with higher growth rate scenarios would have resulted in a lower valuation range for UGC than the range resulting from Morgan Stanley’s discounted cash flow analysis using the management case. The Special Committee also took into account that the results of Morgan Stanley’s analysis of the exchange ratios implied by valuing both UGC and LMI’s other principal asset J-COM on a discounted cash flow basis were supportive of the proposed exchange ratio of 0.2155x, as further described below under “— Opinion of the Financial Advisor to the Special Committee — Discounted Cash Flow Analysis.”

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The Special Committee also took note of Morgan Stanley’s observation that equity research analyst price targets for LMI and UGC varied widely, that research reports available with respect to LMI did not reflect information that was as current as that contained in research reports available with respect to UGC and that equity research analyst price targets, in any event, may not have provided the most reliable estimates of the value of either company.
In reviewing each of the analyses presented by Morgan Stanley, the Special Committee also considered that, as pointed out by Morgan Stanley to the Special Committee, LMI’s significant ownership interest in UGC meant that relatively significant increases in the implied value of UGC would be necessary in order to have a material impact on the relative exchange ratio. The Special Committee further discussed that Morgan Stanley had performed other valuation analyses, such as its comparable company and sum-of-the-parts analyses, that were supportive of its opinion. After considering Morgan Stanley’s analyses as a whole and the resulting implied going concern value of UGC as described below under “— Opinion of the Financial Advisor to the Special Committee” (which analyses were adopted by the Special Committee for this purpose), as well as the various other factors described herein under “— Fairness Determination and Recommendation of the Special Committee”, the Special Committee observed that the merger consideration appeared to be fair to the unaffiliated stockholders of UGC relative to UGC’s value as a going concern.
Holders of Majority of Public Shares Determine Whether Transaction is Completed. The provisions of the merger agreement permit the holders of a majority of UGC’s publicly held shares (excluding shares held by LMI, Liberty or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC) to determine whether to approve the UGC merger. The Special Committee believed that this decision, which it expected would be taken in light of, among other things, the detailed information provided to the stockholders of UGC in this joint proxy statement/ prospectus regarding the transaction and the factors considered by the Special Committee and the UGC board of directors in making their respective recommendations would allow each stockholder of UGC to make its own informed judgment as to whether the proposed transactions are in its best interests.
Premium Analysis. Based upon the presentation made by Morgan Stanley, the Special Committee discussed the fact that the equity and cash merger consideration represented a premium to the unaffiliated stockholders of UGC relative to many of the benchmarks summarized below under “— Opinion of the Financial Advisor to the Special Committee — Exchange Ratio and Price Premium Analysis.” The Special Committee reviewed in particular the fact that the equity merger consideration represented an exchange ratio premium of:
  •  5.0% with respect to the average UGC and LMI stock prices for the period since the LMI Series A common stock commenced trading on a when-issued basis on June 2, 2004;
 
  •  11.6% with respect to the UGC and LMI closing stock prices on December 10, 2004, the day on which LMI delivered a letter to UGC indicating that LMI wished to initiate discussions between the parties; and
 
  •  1.1% with respect to the UGC and LMI closing stock prices on January 11, 2005, the last trading day prior to the agreement in principle between the Special Committee and LMI on the exchange ratio.
The Special Committee also discussed the fact that the equity merger consideration represented an exchange ratio discount with respect to other benchmarks presented by Morgan Stanley, including a discount of approximately 3.6% with respect to the UGC and LMI closing stock prices on November 11, 2004 and of 2.3% with respect to the UGC and LMI closing stock prices on January 14, 2005. The Special Committee considered Morgan Stanley’s observation that the proposed exchange ratio would have represented a premium to the unaffiliated stockholders of UGC on 135 of the 158 trading days between June 2, 2004, the day on which the LMI Series A common stock commenced being publicly traded on a when-issued basis, and the last trading date before the entry into the merger agreement.
After discussions with Morgan Stanley, the Special Committee further concluded that the range of historical exchange ratios and the long-term valuations of UGC and LMI provided by Morgan Stanley, and described below under “— Opinion of the Financial Advisor to the Special Committee,” were more accurate indicators of the underlying values of UGC and LMI than either of their market closing prices on any particular closing date, and that these factors supported the view that the proposed transaction is fair to the unaffiliated stockholders of UGC. In reaching this conclusion, the Special Committee reviewed and discussed with Morgan Stanley its presentation as described below under “— Opinion of the Financial Advisor to the Special Committee,” including in particular the matters described under the captions “— Comparable Company Analysis” and “— Sum-of-the-Parts Analysis.”
The Special Committee also considered Morgan Stanley’s observation, as described further below under “— Opinion of the Financial Advisor to the Special Committee — Sum-of-the-Parts Analysis,” that the public market trading price of LMI’s common stock likely reflected a holding company discount of approximately 10% to 20%, which was to a meaningful degree related to LMI’s interest in UGC. The Special Committee further focused on Morgan Stanley’s observation that LMI’s holding company discount could be expected to be appreciably reduced as a consequence of the proposed mergers, and that this development would benefit the unaffiliated stockholders of UGC electing to receive

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Liberty Global common stock in the mergers. For example, Morgan Stanley’s sum-of-the-parts analysis of LMI, excluding the effect of the holding company discount, implied that the fair value of LMI’s common stock fell within a range of $48.86 to $51.13 per share. The Special Committee took into account Morgan Stanley’s observation that this fair value range further implied that the Liberty Global common stock to be received by the unaffiliated stockholders of UGC represented a meaningful premium to UGC’s stock price of $9.64 as of January 14, 2005, which was within the range of approximately 9.2% to approximately 14.3%.
The Special Committee also considered Morgan Stanley’s observation that, in transactions involving stock consideration, premiums paid by the acquirer are generally smaller than in all-cash transactions in recognition of the target stockholders’ continuing opportunity to benefit from the performance of the combined company and to realize the benefits of the combination. In reviewing the benchmarks presented by Morgan Stanley, the Special Committee also took into account that, as pointed out by Morgan Stanley to the Special Committee as noted above, LMI’s significant ownership interest in UGC meant that relatively significant increases in the implied value of UGC would be necessary in order to have a material impact on the relative exchange ratio and corresponding premium paid. The Special Committee concluded that a very large premium in this context was therefore unlikely.
Option to Receive Cash Provides Some Protection Against Stock Price Declines. The Special Committee considered that the option to elect to receive cash for up to 20% of the aggregate value of the merger consideration payable to the unaffiliated stockholders of UGC provides some protection to the unaffiliated stockholders of UGC if the price of LMI’s stock declines prior to closing.
Opportunity Benefits of Participation in the Combined Company. Because unaffiliated stockholders of UGC will have the option to receive up to 100% of the merger consideration in stock of the combined company, they will have the opportunity to participate in the benefits expected to be realized by the transaction in the future.
UGC management and Morgan Stanley discussed with the Special Committee potentially significant synergies, strategic opportunities and other benefits that the unaffiliated stockholders of UGC would have the opportunity to participate in as stockholders of the combined company. The benefits discussed included: the creation of a company able to operate around the world and achieve the benefits of such scale; the creation of a more liquid stock with larger public float, which should also represent a stronger acquisition currency; reduction of the holding company discount thought to be reflected in the public market trading price of LMI’s common stock and the consequent anticipated increase in the value of the Liberty Global common stock to be received by the unaffiliated stockholders of UGC in the mergers; enhanced position with vendors, manufacturers and content providers; enhanced growth potential given stronger position to pursue distribution, consolidation and content investment opportunities; a strong balance sheet, which should reduce the combined company’s future financing costs; and organizational and corporate synergies.
Confidence in Combined Company Management. The Special Committee took into account that the Chief Executive Officer of the combined company would be Michael T. Fries, the current Chief Executive Officer of UGC. The Special Committee determined that its familiarity with Mr. Fries’ abilities and past performance gave increased confidence that the intended benefits of the UGC merger would be achieved.
Investment in Japanese Distribution and Content Assets at an Attractive Valuation. The Special Committee considered the valuations implied by Morgan Stanley’s analysis of the Japanese distribution and content assets to be contributed to the combined company by LMI in the mergers and, after discussions with Morgan Stanley regarding comparable valuation multiples for similar assets in the industry, found them attractive as a financial matter. In particular, the Special Committee discussed Morgan Stanley’s analysis that the proposed transaction implied UGC stockholders would receive a stake in the assets of Jupiter Telecommunications Co, Ltd., or J-COM, at a valuation multiple of 5.9 times J-COM’s 2005 estimated EBITDA, as compared to comparable company analyses provided by Morgan Stanley indicating that valuation multiples of 9 to 10 times J-COM’s estimated 2005 EBITDA would be within a market range for similar assets (which was also the approximate indicated initial public offering filing range for J-COM at the time of Morgan Stanley’s analysis). The Special Committee took into account Morgan Stanley’s observation that the opportunity to acquire a stake in the J-COM assets at an implied valuation multiple considerably lower than market comparable valuation multiples for similar assets was attractive as a financial matter to the unaffiliated stockholders of UGC, since this would mean that such stockholders would have the opportunity to acquire a stake in these assets at a favorable implied price. As described below under “— Opinion of the Financial Advisor to the Special Committee — Sum-of-the-Parts Analysis,” Morgan Stanley observed that each additional 2005 estimated J-COM EBITDA multiple represented approximately $1.40 in value per share of LMI common stock. This is equivalent to approximately $4.34 to $5.74 in additional value per share of LMI common stock when comparing an EBITDA multiple of 5.9x to an EBITDA multiple range of 9.0x to 10.0x. The Special Committee further discussed its view that these assets offered growth opportunities to the unaffiliated stockholders of UGC in diverse markets. The

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Special Committee believed that this opportunity for the unaffiliated stockholders of UGC to participate in the value of J-COM at a relatively attractive valuation supported the view that the merger is fair to such stockholders.
Improved Management Attention and Focus. Because LMI and UGC operate similar businesses in many respects, their current structure creates significant long-term potential for conflicts between the two companies over the exploitation of commercial opportunities. The Special Committee observed that uniting the two businesses under a single management team will eliminate any such conflicts, permit a unified management team to pursue opportunities more efficiently and provide UGC with the full benefit of the LMI senior management team’s judgment and experience.
Improved Equity Position. The Special Committee discussed the fact that, as a result of the UGC merger and assuming that all unaffiliated stockholders of UGC elect to receive Liberty Global stock, the unaffiliated stockholders of UGC would hold approximately 25% of the aggregate voting power of Liberty Global, which would have no single stockholder or group of stockholders exercising voting control over the combined company. This contrasts to the current situation of unaffiliated stockholders of UGC, who have a minority voting interest in a company controlled by LMI.
Intention to Commence Share Repurchases. The Special Committee discussed the fact that LMI had stated that, given the substantial liquidity and free cash flow profile of the combined company, LMI expected that the Liberty Global board of directors would authorize a stock repurchase program following the combination. The Special Committee determined that this expectation underscored LMI’s belief in the value of the combined business. LMI and UGC subsequently announced that they expect the Liberty Global board to authorize such a program and that any share repurchases under the program would occur from time to time in the open market or in privately negotiated transactions, subject to market conditions.
Growth Opportunities. The Special Committee recognized the opportunity for growth to be greater as part of the combined company. Important opportunities to acquire assets from third parties are expected to arise in Europe in the near future, and UGC’s ability to avail itself of these opportunities will be greatly enhanced by a combination with LMI. The Special Committee also took into account that the Japanese business interests owned by LMI provide significant opportunities for growth, both within Japan and in other important Asian growth markets. The combined company is expected to have a significantly stronger balance sheet than UGC and the ability to offer stock as an acquisition currency at more favorable valuations.
Diversification Benefits. The Special Committee discussed the fact that by combining UGC’s principally European and Latin American business with LMI’s Japanese business, UGC stockholders would own a company with a more diverse portfolio of investments, which would be better able to weather economic change including fluctuations in foreign exchange rates.
Absence of Ability to Sell UGC to Third Party. LMI informed the Special Committee early in the negotiations that it was not interested in pursuing a sale of all of its interest in UGC. In light of LMI’s intentions, the Special Committee concluded that realization of third party sale value or causing a sale of a substantial portion, in a liquidation, break-up or similar transaction, of UGC’s assets were not alternatives available to UGC. Consequently, the Special Committee considered a transaction with LMI or continuing UGC as a publicly traded entity, with LMI remaining as controlling stockholder, as the only practical alternatives available. The Special Committee determined that the merger afforded the unaffiliated stockholders of UGC the opportunity to participate in the benefits of the combined company described above under “— Opportunity Benefits of Participation in the Combined Company,” as well as the other benefits described above under “— Investment in Japanese Distribution and Content Assets at an Attractive Valuation,” “— Improved Management Attention and Focus,” “— Growth Opportunities” and “— Diversification Benefits.” The Special Committee determined that none of these benefits would be available to the unaffiliated stockholders of UGC if UGC continued as a publicly traded company with LMI as its controlling stockholder and deemed this alternative inferior to the proposed transaction.
Terms of Merger Agreement. The Special Committee considered the draft merger agreement and the summary of the key terms and provisions thereof provided by its counsel. The Special Committee concluded that the terms and provisions of the merger agreement were customary for transactions of this kind and provided appropriate protections to the unaffiliated stockholders of UGC. The merger agreement provides only limited circumstances under which LMI is permitted to not close the transaction, and any termination of the merger agreement by UGC must be approved by the Special Committee. The voting agreement entered into by Mr. Malone, pursuant to which he agreed to vote the LMI shares that he owns or which he has the right to vote (representing, as of December 31, 2004, approximately 26.5% of the aggregate voting power of LMI) in favor of the merger agreement and the LMI merger, increases the likelihood that the merger agreement and the LMI merger will be approved by the LMI stockholders.

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Financing of Transaction. The Special Committee considered the fact that LMI has available to it sufficient cash to pay the cash portion of the merger consideration and the combined company will have sufficient cash to fund the potential stock purchase program described above after the closing.
Stock Consideration Non-Taxable. The Special Committee considered that the receipt of Liberty Global stock by the unaffiliated stockholders of UGC validly electing to receive stock as merger consideration will generally not be taxable to such stockholders.
Negative Factors
Market Price of Shares. The Special Committee discussed the fact that the relative trading prices of UGC and LMI at the market close on January 14, 2005 implied that LMI would be acquiring the shares of UGC held by the unaffiliated stockholders of UGC at a very slight discount to market. See the discussion above under “— Supportive Factors — Premium Analysis.”
Exposure to Japanese Market. While acknowledging the diversification opportunity that LMI’s investments in the Japanese broadband and programming markets offers the unaffiliated stockholders of UGC, the Special Committee also considered the fact that such diversification carried with it exposure to new and different risk factors for the unaffiliated stockholders of UGC, including exposure to downturns in the Japanese economy and new foreign currency exchange risks.
Tax Treatment. The Special Committee took into account that the receipt of the $9.58 per share cash price available to the unaffiliated stockholders of UGC validly electing to receive cash consideration, subject to proration, will generally be taxable to such stockholders.
Risks the Mergers May Not be Completed. The Special Committee considered the risk that the conditions to the merger agreement may not be satisfied and, therefore, that the UGC merger may not be consummated.
Matters Not Considered
The Special Committee did not consider the third party sale value or liquidation or break-up value of UGC’s assets because LMI stated, after inquiry by the Special Committee, that it was not willing to pursue these alternatives. As the beneficial owner of a majority of the aggregate voting power of UGC’s stock, LMI can prevent the pursuit of these alternatives. The Special Committee did not consider the net book value of UGC to be a useful indicator of UGC’s value because UGC’s value as a going concern, as reflected in the analyses thereof by Morgan Stanley described below under “— Opinion of the Financial Advisor to the Special Committee” and adopted by the Special Committee for this purpose, exceeds its net book value and because the Special Committee believed that the net book value of UGC is indicative of historical costs but is not a material indicator of the value of UGC as a going concern.
Other Matters Considered
Conflicts of Interest. The Special Committee was aware of the conflicts of interest of the members of the UGC board of directors who are also officers or directors of LMI, as well as the potential conflicts of interest of management representatives on the UGC board. The Special Committee believes that the process of using a committee of independent directors that acted unanimously, together with the condition that the UGC merger and the merger agreement be approved by a majority of the stockholders of UGC (other than LMI, Liberty or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC), effectively mitigates these potential conflicts.
This discussion summarizes the material factors considered by the Special Committee, including factors that support as well as weigh against the UGC merger, the merger agreement, the voting agreement and the transactions contemplated thereby. In view of the variety of factors and the amount of information considered, the Special Committee did not find it practicable to, and did not, make specific assessments of, quantify, or otherwise assign relative weights to these factors in reaching its determination. In addition, individual members of the Special Committee may have given different weights to different factors. The determination that the UGC merger, on the terms and conditions set forth in the merger agreement and the voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC was made after consideration of all of these factors as a whole. The Special Committee concluded that the supportive factors outweighed the negative factors.

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Fairness Determination and Recommendation of the UGC Board
Following the meeting of the Special Committee, based upon the recommendation of the Special Committee and adopting the analysis of the Special Committee, the UGC board unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of UGC. The UGC board also unanimously determined that:
  •  the UGC merger, on the terms and conditions set forth in the merger agreement and the voting agreement, is fair to, and in the best interests of, UGC and its stockholders;
 
  •  authorized UGC to enter into the merger agreement and the voting agreement;
 
  •  resolved to recommend that the UGC stockholders approve the UGC merger and approve and adopt the merger agreement; and
 
  •  resolved to call a special meeting of the UGC stockholders for the purpose of submitting the merger agreement and the transactions set forth therein to the UGC stockholders.
In addition to the analysis of the Special Committee, which was adopted by the UGC board in reaching its fairness determination, the UGC board of directors considered that the Special Committee received from Morgan Stanley an opinion that, as of the date of the opinion and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the merger consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders.
Opinion of the Financial Advisor to the Special Committee
The Special Committee engaged Morgan Stanley to provide financial advisory services in connection with the UGC merger. Morgan Stanley was selected by the Special Committee based upon Morgan Stanley’s qualifications, expertise and reputation and the experienced Japanese team that was available to assist in analyzing the value of LMI’s investment in J-COM, as well as its knowledge of the business and affairs of UGC and the industries in which UGC and LMI operate. At a meeting of the Special Committee held on January 17, 2005, Morgan Stanley delivered its oral opinion, subsequently confirmed in writing, that, as of that date, and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders.
The full text of Morgan Stanley’s opinion, dated January 17, 2005, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is included as Appendix D to this joint proxy statement/ prospectus. The summary of Morgan Stanley’s fairness opinion set forth in this joint proxy statement/ prospectus is qualified in its entirety by reference to the full text of the opinion. Stockholders should read this opinion carefully and in its entirety. Morgan Stanley’s opinion is directed to the Special Committee and only addresses the fairness from a financial point of view of the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement. Morgan Stanley’s opinion does not address any other aspect of the mergers and does not constitute a recommendation to any UGC stockholder as to how to vote at the UGC stockholders’ meeting or as to what form of consideration UGC stockholders should elect. Morgan Stanley has consented to the inclusion of its opinion and the summary of its opinion in this joint proxy statement/ prospectus. By rendering its opinion and giving such consent Morgan Stanley has not admitted that it is an expert with respect to any part of this joint proxy statement/ prospectus within the meaning of the term “expert” as used in, or that Morgan Stanley comes within the category of persons whose consent is required under, the Securities Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
In connection with rendering its opinion, Morgan Stanley, among other things:
  •  reviewed certain publicly available financial statements and other information of UGC and LMI;
 
  •  reviewed certain internal financial statements and other financial and operating data concerning UGC and LMI prepared by the managements of UGC and LMI, respectively;
 
  •  reviewed certain financial projections prepared by the respective managements of UGC and LMI;
 
  •  discussed the past and current operations and financial condition and prospects of UGC and LMI with senior executives of UGC and LMI, respectively;
 
  •  considered information relating to certain strategic, financial and operational benefits anticipated from the UGC merger, discussed with the management of UGC;

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  •  discussed the strategic rationale for the UGC merger with the senior executives of UGC;
 
  •  reviewed the reported prices and trading activity of the UGC Class A common stock and the LMI Series A common stock;
 
  •  compared the financial performance of UGC and LMI, as well as the prices and trading activity of the UGC Class A common stock and the LMI Series A common stock with that of certain other comparable publicly-traded companies and their securities;
 
  •  reviewed the financial terms, to the extent publicly available, of selected minority buy-back transactions;
 
  •  participated in discussions and negotiations among representatives of UGC and LMI and their respective financial and legal advisors;
 
  •  reviewed the proposed merger agreement and certain related documents; and
 
  •  performed such other analyses and considered such other factors as Morgan Stanley deemed appropriate.
In arriving at its opinion, Morgan Stanley assumed and relied upon without independent verification the accuracy and completeness of the information reviewed by Morgan Stanley for the purposes of its opinion. With respect to the internal financial statements, other financial and operating data, and financial forecasts, including information relating to certain strategic, financial and operational benefits anticipated from the UGC merger, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting best available estimates and judgments of the future financial performance of UGC and LMI. Morgan Stanley also relied without independent investigation on the assessment by the executives of UGC regarding the strategic rationale for the UGC merger. In addition, Morgan Stanley assumed that the mergers will be consummated in accordance with the terms set forth in the proposed merger agreement, including, among other things, that the LMI merger and UGC merger will be treated as a tax-free reorganization and exchange, respectively, each pursuant to the Code, without material modification, delay or waiver. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities or technologies of UGC or LMI, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley’s opinion is necessarily based upon financial, economic, market and other conditions as in effect on, and the information made available to it as of, January 17, 2005.
In arriving at its opinion, Morgan Stanley was not authorized to solicit, and did not solicit, interest from any party with respect to an acquisition, business combination or other extraordinary transaction involving UGC or its assets.
The following is a summary of the material financial analyses performed by Morgan Stanley in connection with its opinion. Some of these summaries include information presented in tabular format. In order to understand fully the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses used by Morgan Stanley.
Historical Share Price Analysis
Morgan Stanley reviewed the historical price performance and trading volumes of UGC Class A common stock from January 20, 2004 through January 14, 2005, and of LMI Series A common stock from June 2, 2004 through January 14, 2005. For the period that Morgan Stanley reviewed UGC’s share price, the high and low closing prices were $10.60 and $6.00, respectively, and for the period that Morgan Stanley reviewed LMI’s share price, the high and low closing prices were $47.27 and $29.15, respectively.
Morgan Stanley also reviewed the respective recent stock price performances of UGC Class A common stock and LMI Series A common stock in comparison to the stock price performances of selected comparable companies, as well as with the S&P 500. Morgan Stanley observed the appreciation or depreciation in closing market prices over certain time periods as shown below:
                 
    Appreciation/(Depreciation)   Appreciation
Company   1/20/04 to 1/14/05   6/2/04(1) to 1/14/05
         
UGC
    (9.1 )%     29.4%  
LMI
    NA       13.8%  
Comcast Corp. 
    (5.8 )%     16.6%  
NTL Inc. 
    (0.6 )%     10.8%  
Cablevision Systems Corp. 
    (9.9 )%     13.5%  
S&P 500
    4.0 %     5.3%  

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(1)  Date on which LMI common stock began trading on a when-issued basis prior to LMI’s spin off from Liberty.
The foregoing historical share price analysis was presented to the Special Committee to provide it with background information and perspective with respect to the relative historical share prices and share price performances of UGC and LMI. No company used in the share price performance analysis is identical to UGC or LMI because of differences in business mix, operations and other characteristics.
Comparable Company Analysis
Morgan Stanley compared certain publicly available financial information of UGC with corresponding publicly available information for the following cable companies:
U.S. Cable Companies
Comcast Corp.
Cablevision Systems Corp.
Charter Communications, Inc.
Insight Communications Co.
European Cable Companies
NTL Inc.
Telewest Global Inc.
For each of the comparable companies, Morgan Stanley calculated the current cable aggregate value, defined as equity value plus net debt and minority interests and less unconsolidated and non-cable assets, as a multiple of 2005 estimated earnings before expenses for interest, taxes, depreciation and amortization, or EBITDA, based upon publicly available information, including reports of equity research analysts. The multiples calculated in this analysis are referred to in this section as the aggregate value/2005E EBITDA multiples.
Morgan Stanley calculated implied equity values per share of UGC common stock by applying aggregate value/2005E EBITDA multiples ranging from 8.0x to 9.0x to UGC’s 2005 estimated EBITDA, as provided by UGC management, and to UGC’s 2005 estimated EBITDA as provided by management and converted at a current spot rate of US$1.31 per Euro. The following table presents the ranges of equity values per common share implied by this analysis:
                 
    Implied Equity
    Value Per Share
    of UGC
    Common Stock
     
    Low   High
         
2005E EBITDA, as provided by UGC management
  $ 8.17     $ 9.53  
2005E EBITDA, as provided by UGC management and converted at US$1.31 per Euro spot exchange rate
  $ 8.82     $ 10.27  
Morgan Stanley noted that the value of the stock consideration per share of UGC common stock implied by the 0.2155x exchange ratio and LMI’s stock price of $43.69 as of January 14, 2005 was $9.42, and that the cash consideration was $9.58 per share of UGC common stock.
No company used in the comparable company analysis is identical to UGC because of differences between the business mix, operations and other characteristics of UGC and the comparable companies. In evaluating the comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of UGC, such as the impact of currency exchange rates, competition on the business of UGC as well as on the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of UGC or the industry or in the markets generally.
Discounted Cash Flow Analysis
Morgan Stanley performed a discounted cash flow analysis of the projected unlevered free cash flows of UGC. This analysis was based upon 2005 projections and long-term growth assumptions for the period beginning January 1, 2005 and ending December 31, 2009 prepared by UGC management.
Morgan Stanley calculated implied equity values per share of UGC common stock by using discount rates ranging from 8% to 10% and terminal value multiples of estimated 2010 EBITDA ranging from 7.5x to 8.5x. Morgan Stanley

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calculated different ranges of equity values per share of UGC common stock by utilizing the 2005 projections and long-term growth rate guidance provided by UGC management, as well as sensitivities performed by Morgan Stanley adjusting for various revenue growth rates and EBITDA margins. The following table presents the ranges of implied equity values per share of UGC common stock implied by this analysis:
                 
    Implied Equity
    Value Per Share
    of UGC
    Common Stock
     
    Low   High
         
Analysis Utilizing Sensitivities
  $ 9.58     $ 12.05  
Analysis Utilizing UGC Management Projections and Guidance
  $ 12.83     $ 15.89  
Morgan Stanley noted that the value of the stock consideration per share of UGC common stock implied by the 0.2155x exchange ratio and LMI’s stock price of $43.69 as of January 14, 2005 was $9.42, and that the cash consideration was $9.58 per share of UGC common stock.
Morgan Stanley performed an initial discounted cash flow analysis of UGC, prior to its receipt of management long-term guidance, based principally on UGC’s historical financial performance and 2005 projections, publicly available research reports and financial benchmarks of other comparable companies. Morgan Stanley subsequently received long-term growth rate guidance from UGC management that exceeded, to a significant degree, the growth rates observed by Morgan Stanley in its analysis. Based on UGC management’s guidance, Morgan Stanley refined its initial discounted cash flow analysis with respect to projected growth and margin expansion, while remaining cognizant of UGC’s historical and budgeted benchmarks, as well as comparable company benchmarks.
The discount rates used in the discounted cash flow analysis of UGC reflect UGC’s weighted average cost of capital. The weighted average cost of capital represents the cost of capital for UGC based upon the relative proportion of debt, preferred equity and common equity employed by UGC. The terminal EBITDA multiple range used in the discounted cash flow analysis was based upon a review of the trading multiples for, and the business position of, UGC and other comparable companies, as well as reviewing implied perpetual growth rates.
Morgan Stanley also performed a discounted cash flow analysis to derive an implied valuation of LMI’s 45.45% stake in J-COM. Using discount rates ranging from 8% to 10% and terminal value multiples of estimated 2010 EBITDA, based on projections provided by LMI management, ranging from 7.5x to 8.5x, Morgan Stanley calculated an implied valuation range for LMI’s 45.45% stake in J-COM of $2.1 billion to $2.7 billion. Morgan Stanley then calculated the exchange ratios implied by assuming illustrative per share values for UGC common stock (based on its discounted cash flow analysis of UGC) of $10.00, $11.00 and $12.00, on the one hand, and implied per share values of LMI common stock (calculated as an aggregate of the implied value of LMI’s 45.45% stake in J-COM described above, the implied value of LMI’s UGC holdings based on the illustrative per share values for UGC common stock described above, and the other valuations of LMI’s assets derived in connection with Morgan Stanley’s sum-of-the-parts analysis described below, in each case on a per LMI share basis), on the other hand. The results of this analysis are set forth below:
                             
    Implied Per Share Value    
    of LMI Common Stock, Based on    
    Illustrative J-COM DCF Value    
    (LMI’s Stake in J-COM)    
Illustrative UGC DCF Value       Implied
Per Share   Low       High   Exchange Ratio
                 
    $2,100   (In millions)   $2,700    
$10.00
  $ 52.80         $ 56.17       0.1894x to 0.1780x  
$11.00
  $ 55.18         $ 58.56       0.1993x to 0.1879x  
$12.00
  $ 57.57         $ 60.94       0.2085x to 0.1969x  
Morgan Stanley observed that the 0.2155x exchange ratio in the merger exceeded the exchange ratios implied by this analysis. Morgan Stanley also observed the per share value of LMI common stock of $52.80 to $60.94 implied by the discounted cash flow analysis described above, which further implied an exchange ratio of 0.1582x to 0.1826x (based on UGC’s share price of $9.64 as of January 14, 2005) and represented premiums of approximately 21% to approximately 39% to the closing per share price of LMI Series A common stock of $43.69 on January 14, 2005.
While discounted cash flow analysis is a widely accepted and practiced valuation methodology, it relies on a number of assumptions including growth rates, terminal multiples, discount rates and currency exchange rates. The valuation stated above is not necessarily indicative of UGC’s actual, present or future value or results, which may be more or less favorable than suggested by this type of analysis.

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Sum-of-the-Parts Analysis
Morgan Stanley performed an analysis of LMI as the sum of its constituent businesses and performed financial analyses on the assets represented by LMI’s investments in the following entities:
  •  UGC
 
  •  Jupiter Telecommunications Co., Ltd.
 
  •  Jupiter Programming Co., Ltd.
 
  •  Liberty Cablevision of Puerto Rico Ltd.
 
  •  Mediatti Communications, Inc.
 
  •  Chofu Cable, Inc.
 
  •  Pramer S.C.A.
 
  •  Metrópolis-Intercom S.A.
 
  •  Torneos y Competencias, S.A.
 
  •  The News Corporation Limited
 
  •  The Wireless Group plc
 
  •  ABC Family Worldwide, Inc.
This analysis was performed to determine an implied valuation range for LMI common stock.
Morgan Stanley reviewed various publicly available financial, operating and stock market information, as well as financial data and forecasts provided by LMI management, for the individual LMI businesses. Based upon this data, Morgan Stanley estimated implied value ranges for each constituent business by applying analyses as appropriate for the individual business segments, including analyses based upon book value, per subscriber value, multiples to 2004 and 2005 estimated EBITDA, as provided by LMI management and publicly available research reports, and public market value, taking into account applicable tax rates. The multiples for the various assets used in the sum-of-the-parts analysis were arrived at after a review of publicly traded companies with a similar operating profile to the LMI assets. Market position, growth prospects and profitability were a few of the many factors used in comparing the LMI assets to the publicly traded comparables.
This analysis yielded an implied valuation range of LMI common stock of $48.86 to $51.13 per share, which further implied an exchange ratio of 0.1885x to 0.1973x based on UGC’s share price of $9.64 as of January 14, 2005. Morgan Stanley noted the impact of a holding company discount on LMI’s common stock, which had been widely acknowledged by the research community, that likely causes the stock to trade at a discount to the sum-of-the-parts of LMI. To approximate the effect of this holding company discount, Morgan Stanley applied discount rates of 10%, 15% and 20% to the $48.86 to $51.13 per share valuation range implied by Morgan Stanley’s sum-of-the-parts analysis of LMI. Applying these discounts yielded an implied valuation range of LMI common stock of $44.26 to $48.83 per share, which further implied an exchange ratio range of 0.1974x to 0.2178x based on UGC’s share price of $9.64 as of January 14, 2005. Morgan Stanley also noted that the closing price per share of LMI Series A common stock on January 14, 2005 was $43.69 per share.
In performing the sum-of-the-parts analysis described above, Morgan Stanley included an implied valuation range for J-COM of $1.5 billion to $1.8 billion, which Morgan Stanley calculated by applying multiples ranging from 9.0x to 10.0x to J-COM’s 2005 estimated EBITDA, as provided by LMI management. Morgan Stanley applied the 9.0x to 10.0x multiple range based on its review of publicly traded companies with similar operating profiles to J-COM, taking into account market position, growth prospects and profitability.
Morgan Stanley further observed the implied valuation of J-COM based on the 0.2155x exchange ratio. Assuming UGC and LMI valuations based on LMI’s share price of $43.69 as of January 14, 2005 and UGC’s implied share price of $9.42, and based on the 0.2155x exchange ratio as well as the $1.3 billion valuation for LMI’s other assets (excluding J-COM and UGC) derived in connection with the LMI sum-of-the-parts analysis, Morgan Stanley noted that the resulting 2005 estimated EBITDA multiple for J-COM was 5.9x, which represented a meaningful discount to the 9.0x to 10.0x multiple range referenced above as the range implied by comparable companies and that was also the approximate indicated initial public offering filing range for J-COM at the time of its analysis. Based on the J-COM projections provided by LMI management, Morgan Stanley noted that each additional 2005 estimated J-COM EBITDA multiple represented approximately $1.40 in value per share of LMI common stock.

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Equity Research Analysts’ Price Targets
Morgan Stanley reviewed the range of available price targets prepared and published by equity research analysts for UGC Class A common stock and LMI Series A common stock during the periods from September 22, 2004 to January 14, 2005 for UGC and from November 15, 2004 to December 8, 2004 for LMI. These price targets reflect each analyst’s estimate of the future public market trading price of UGC Class A common stock or LMI Series A common stock, as applicable, at the end of the relevant period considered for each estimate. Applying a discount rate of 10% to these price targets, Morgan Stanley arrived at a range of present values for the per share price targets as of January 2005. The results of this analysis are set forth below:
                 
    Present Value of
    Research Price
    Targets for UGC
    Class A
    Common Stock
     
    Low   High
         
UGC
  $ 9.70     $ 13.88  
LMI
  $ 37.57     $ 46.73  
Morgan Stanley noted that the analysis summarized above included present values with respect to two research price targets for UGC Class A common stock that had been increased on January 14, 2005 from prior research reports. On January 14, 2005, Morgan Stanley issued a new research report increasing its price target for UGC Class A common stock from $9.00, or $8.31 at present value, to $11.00, or $10.00 at present value. Also on January 14, 2005, Janco Partners issued a new research report increasing its price target for UGC Class A common stock from $12.43, or $11.48 at present value, to $15.27, or $13.88 at present value.
Morgan Stanley also noted that research reports available with respect to LMI did not reflect information that was as current as that contained in the research reports available with respect to UGC and that the public market trading price targets published by the securities research analysts do not reflect current market trading prices and are subject to uncertainties, including the future financial performances of UGC and LMI, as applicable, and future financial market conditions.
Precedent Transaction Analysis
Morgan Stanley reviewed publicly available information with respect to selected minority buy-back transactions. The transactions reviewed included transactions involving cash and/or stock consideration with aggregate transaction values in excess of $1 billion, referred to in this section as the cash/stock transactions, and stock only transactions with aggregate transaction values in excess of $500 million, referred to in this section as the stock-only transactions. For each transaction, Morgan Stanley analyzed, as of the announcement date, the premium offered by the acquiror to the target’s closing price one day prior to the announcement of the transaction. In the cash/stock transactions, the range of final premiums was 10.5% to 47.6%, with a median of 23.5%. In the stock-only transactions, the range of final premiums was 2.3% to 47.6%, with a median of 19.4%. The foregoing precedent transaction analysis was presented to the Special Committee to provide it with background information and perspective in connection with its review of the UGC merger.
No company or transaction utilized in the analysis of selected precedent transactions is identical to UGC, LMI or the UGC merger. Mathematical analysis, such as determining the average or median, is not in itself a meaningful method of using precedent transaction data.

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Exchange Ratio and Price Premium Analyses
Morgan Stanley reviewed the ratios determined by dividing the closing prices of UGC Class A common stock by the closing prices of LMI Series A common stock for certain periods from June 2, 2004 to January 14, 2005. Morgan Stanley then examined the premiums represented by the exchange ratio of 0.2155 pursuant to the merger agreement as compared to these ratios of closing market prices of UGC common stock to LMI common stock. The results of this analysis are set forth below:
                 
    Ratio of UGC Price(s) to   0.2155 Exchange Ratio
Period/Benchmark   LMI Closing Price(s)   % Premium/(Discount)
         
January 14, 2005
    0.2206 x     (2.3 )%
January 11, 2005
    0.2131 x     1.1 %
December 14, 2004
    0.1914 x     12.6 %
December 10, 2004
    0.1931 x     11.6 %
November 11, 2004
    0.2235 x     (3.6 )%
High UGC Class A Common Share Price since June 2, 2004
    0.2239 x     (3.8 )%
Low UGC Class A Common Share Price since June 2, 2004
    0.1853 x     16.3 %
Five Trading Day Average During the Period from June 2, 2004 to January 14, 2005
    0.2178 x     (1.0 )%
Ten Trading Day Average During the Period from June 2, 2004 to January 14, 2005
    0.2133 x     1.0 %
Twenty Trading Day Average During the Period from June 2, 2004 to January 14, 2005
    0.2103 x     2.5 %
Three-Month Average During the Period from June 2, 2004 to January 14, 2005
    0.2060 x     4.6 %
Average Since June 2, 2004
    0.2053 x     5.0 %
Morgan Stanley also examined the implied percentage premium of the $9.42 implied stock consideration, as of January 14, 2005, and of the $9.58 cash consideration, each as compared to UGC’s Class A common stock closing prices over various periods. The results of this analysis are set forth below:
                         
        Implied Price Premium/(Discount)
         
        $9.42 Implied Stock    
Time Period/Benchmark   UGC Share Price   Consideration(1)   $9.58 Cash Consideration
             
January 14, 2005
  $ 9.64       (2.3 )%     (0.6 )%
January 11, 2005
  $ 9.26       1.7 %     3.5 %
December 14, 2004
  $ 8.67       8.6 %     10.5 %
December 10, 2004
  $ 8.66       8.7 %     10.6 %
November 11, 2004
  $ 8.48       11.0 %     13.0 %
High Since June 2, 2004
  $ 9.78       (3.7 )%     (2.0 )%
Low Since June 2, 2004
  $ 6.00       56.9 %     59.7 %
 
(1)  Based upon 0.2155x exchange ratio and current LMI share price of $43.69 as of January 14, 2005
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any particular analysis or factor considered by it. The summary provided and the analyses described above must be considered as a whole, and selecting any portion of Morgan Stanley’s analyses, without considering all analyses, would create an incomplete view of the process underlying Morgan Stanley’s opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors and may have deemed various assumptions more or less probable than other assumptions, so that the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of UGC or LMI.
In performing its analysis, Morgan Stanley made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of UGC and LMI. Any estimates contained in the analyses performed by Morgan Stanley are not necessarily indicative of actual values, which

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may be significantly more or less favorable than suggested by such estimates. The analyses performed were prepared solely as a part of Morgan Stanley’s analysis of the fairness from a financial point of view of the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement and were conducted in connection with the delivery by Morgan Stanley of its opinion, dated January 17, 2005, to the Special Committee. Morgan Stanley’s analyses do not purport to be appraisals or to reflect the prices at which shares of UGC common stock or LMI common stock might actually trade.
The consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was determined through negotiations between the Special Committee and LMI, was approved by the Special Committee and recommended by the Special Committee for the approval of UGC’s board of directors and was approved by UGC’s board of directors. Morgan Stanley’s opinion to the Special Committee was one of many factors taken into consideration by the Special Committee in making its determination to approve the merger.
Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan Stanley, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. In the past, Morgan Stanley and its affiliates have provided financial advisory and financing services for UGC and have received fees for the rendering of these services. Morgan Stanley received fees of approximately 1 million during the past two years in connection with such services and expects to be paid a fee of approximately $1.5 million for services being provided to UGC other than in connection with this transaction. In the ordinary course of its business, Morgan Stanley and its affiliates may from time to time trade in the securities or the indebtedness of UGC and LMI and its affiliates for its own account, the accounts of investment funds and other clients under the management of Morgan Stanley and for the accounts of its customers and accordingly, may at any time hold a long or short position in such securities or indebtedness for any such account.
Pursuant to an engagement letter dated December 22, 2004, UGC agreed to pay Morgan Stanley a financial advisory fee of $1 million. In addition, UGC agreed to pay Morgan Stanley a transaction fee of $4.5 million upon delivery of its opinion. UGC also agreed to reimburse Morgan Stanley for its expenses incurred in performing its services and to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under federal securities laws, related to or arising out of Morgan Stanley’s engagement and any related transactions.
Fairness Determinations of the Boards of Directors of LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub
The UGC merger is considered a “13e-3 transaction” for purposes of Rule 13e-3 under the Exchange Act because each of LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub is an affiliate of UGC and public stockholders of UGC are entitled to receive consideration in the UGC merger other than Liberty Global common stock. As a result, under Rule 13e-3, LMI, Liberty Global, LMI Merger Sub and UGC Merger Sub are each required to consider the substantive and procedural fairness of the UGC merger to the unaffiliated stockholders of UGC.
Fairness Determination of the LMI Board
The LMI board of directors determined that the transactions contemplated by the merger agreement, including the UGC merger, are, substantively and procedurally, fair to the unaffiliated stockholders of UGC. In making this determination, the LMI board considered various factors, including:
  •  that the merger was negotiated with the Special Committee, which was advised by its own counsel and financial advisors;
 
  •  that the merger is structured so that it is a condition to the completion of the merger that it be approved by at least a majority of the outstanding shares of UGC common stock not beneficially owned by LMI or Liberty or the directors and executive officers of LMI, Liberty and UGC;
 
  •  that the 0.2155 to 1.0 exchange ratio represents an 8.6% premium over the closing sale price for the shares of UGC Class A common stock on December 14, 2004, the last trading day before Mr. Malone’s first conversation with the Special Committee, and a slight premium over the closing sale price of those shares on January 11, 2005, the last trading day before LMI management and the Special Committee reached an agreement in principle on the financial terms of the UGC merger. The LMI board also considered that from the time of the LMI spin off in June 2004 through the last trading day before the public announcement of the mergers, the

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  historical ratio in which the shares of UGC Class A common stock has traded relative to the LMI Series A common stock has predominantly been below the 0.2155 exchange ratio;
 
  •  its belief that since LMI’s spin off from Liberty in June 2004, UGC’s historical trading price has included an “acquisition premium” attributable to market speculation that LMI would buy out the public minority stockholders of UGC;
 
  •  its belief that LMI common stock trades with a holding company discount of between 9% and 19%, implying a larger premium to the unaffiliated stockholders of UGC on a fair value-to-fair value basis;
 
  •  that the unaffiliated stockholders of UGC who elect to receive Liberty Global stock will have the opportunity to participate in LMI’s Japanese cable distribution and programming businesses, as well as continue to participate in the potential growth of the businesses of UGC;
 
  •  that LMI was foregoing its ability to obtain a control premium for its investment in UGC, while the unaffiliated stockholders of UGC who become stockholders of Liberty Global would participate as stockholders of the new company in any control premium because there will be no single controlling stockholder of the new company;
 
  •  that LMI has sufficient voting power to determine a disposition of UGC, and informed the Special Committee that it would not be interested in a sale of UGC to a third party; and
 
  •  the fact that the Special Committee received an opinion from Morgan Stanley to the effect that, as of the date of such opinion and based upon and subject to the assumptions, qualifications and limitations set forth in the opinion, the consideration to be received by the unaffiliated stockholders of UGC pursuant to the merger agreement was fair from a financial point of view to such stockholders. LMI management recognized that Morgan Stanley’s opinion is directed solely to the Special Committee, and that LMI is not entitled to rely on that opinion.
In addition to the foregoing positive factors which the LMI board considered in making its fairness determination, the LMI board also evaluated the following negative factors, which it viewed as insufficient to outweigh the positive factors:
  •  that on January 14, 2005, the last trading day prior to the LMI board meeting approving the merger agreement, the UGC Class A common stock was trading above the 0.2155 exchange ratio; and
 
  •  that the holders of UGC Class A common stock are not entitled to appraisal rights under Delaware law, and that no provision is included in the merger agreement to provide them that right.
The LMI board further considered the prices at which each of LMI and, before its spin off from Liberty in June 2004, Liberty had purchased shares of UGC over the preceding two year period, including the range of prices paid in such purchases. With the exception of Liberty’s acquisition of all of the UGC Class B common stock of the founders of UGC in January 2004, all UGC stock purchases during that two-year period were made at prices between $3.62 and $8.59 per share, which is below the $9.58 cash consideration being offered to the unaffiliated stockholders of UGC in the cash election and the $9.42 implied value of the exchange ratio being made available in the stock election, as of January 14, 2005, the last trading day prior to the LMI board meeting approving the merger agreement. Those purchases had all involved shares of UGC Class A common stock purchased pursuant to the exercise of contractual preemptive rights or pursuant to subscription rights that had been made available to all UGC stockholders. In the case of Liberty’s acquisition of the shares of UGC Class B common stock from the UGC founders, the average per share price paid for those shares was $19.93. The LMI board did not view the amount paid for the shares of UGC Class B common stock acquired from the UGC founders as relevant to its determination of the fairness of the consideration being paid to the unaffiliated stockholders of UGC in the UGC merger. That transaction involved a control premium due to the removal at that time of substantial constraints on the ability of Liberty to exercise control over UGC. By contrast, the stock consideration and cash consideration being made available to the unaffiliated stockholders of UGC does not include a control premium as LMI already has a 53.6% equity interest and an approximate 91% voting interest in UGC.
LMI’s purpose for engaging in the mergers is to acquire, through Liberty Global, all of the outstanding shares of UGC capital stock that LMI does not already own. The LMI board did not consider other alternatives to achieving its goal of acquiring the minority interest in UGC. The LMI board considered the alternative of maintaining the status quo in which LMI was the controlling stockholder of UGC and instituting a stock repurchase program for LMI stock. On balance, the LMI board determined that the proposed mergers would be preferable to maintaining the status quo. Consummating the mergers was viewed as preferable as it would eliminate or significantly reduce the holding company discount at which LMI believes its stock has traded since its spin off from Liberty in June 2004, as well as eliminate

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any potential competition between LMI and UGC, including in the pursuit of acquisition opportunities and capital raising activities.
The LMI board did not consider UGC’s net book value (assets minus liabilities as reflected in UGC’s financial statements for accounting purposes) in its evaluation of fairness to the unaffiliated stockholders of UGC, as net book value is impacted by accounting treatment of transactions and is thus not comparable across firms or periods, nor does that metric take into account the earnings power or future cash flow potential of UGC. In any event, UGC’s net book value was substantially less than the value of the merger consideration. The LMI board did not consider the liquidation value of UGC because liquidation was not an acceptable option to LMI, as the controlling stockholder of UGC. Because liquidation would involve selling UGC’s assets and businesses for cash, liquidation value would most likely yield a lower valuation for UGC due to the significant tax liability such a sale would entail. Although a sale of UGC to a third party was also not considered by the LMI board to be an acceptable option, the LMI board considered the going concern value of UGC to the extent that it was encompassed in the comparable company analysis and discounted cash flow analysis of UGC performed by Banc of America Securities as part of its relative valuation analyses of LMI in relation to UGC. Those analyses, which were adopted by the LMI board for this purpose, were performed by Banc of America Securities for the purpose of valuing UGC’s contribution to the sum-of-the parts value of LMI and are described under “— Opinion of LMI’s Financial Advisor.” Banc of America Securities was not requested to and did not consider the fairness of the UGC merger to the unaffiliated stockholders of UGC. However, given the purpose for which the comparable company analysis and discounted cash flow analysis were made, the LMI board deemed it appropriate to consider them in making its determination regarding the fairness of the UGC merger to the unaffiliated stockholders of UGC. Because UGC’s unaffiliated stockholders are being given the opportunity to continue to participate in the growth of UGC’s business and the other businesses of Liberty Global through the stock election and in the belief that the mergers will eliminate or significantly reduce the holding company discount at which LMI’s stock trades thereby increasing the value of the Liberty Global common stock to be received by the unaffiliated stockholders of UGC in the mergers, the LMI board believes that the going concern value of UGC supports the determination of LMI’s board that the UGC merger is fair to the unaffiliated stockholders of UGC.
The LMI board did not find it practicable to, and therefore did not, quantify or otherwise assign relative weights to the individual factors considered in making its fairness determination. Rather, its fairness determination was made after consideration of all of the foregoing factors as a whole.
Fairness Determinations of the Boards of Liberty Global, LMI Merger Sub and UGC Merger Sub
Adopting the analysis of the board of directors of LMI, the boards of directors of each of Liberty Global, LMI Merger Sub and UGC Merger Sub unanimously determined that the transactions contemplated by the merger agreement, including the UGC merger, are, substantively and procedurally, fair to the unaffiliated stockholders of UGC. Each of these boards of directors is comprised of two persons, John C. Malone and Robert R. Bennett, who serve on the board of directors of LMI and were present for and participated in the adopted analysis of the LMI board.
Liberty Global is a new company created by LMI, its sole stockholder, for the purpose of becoming the new parent company of LMI and UGC if the mergers are completed. Liberty Global’s purpose in engaging in the mergers is the facilitation of the combination of LMI and UGC. As Liberty Global was created for the foregoing purpose, no alternatives to the mergers were considered by Liberty Global.
Each of LMI Merger Sub and UGC Merger Sub is a new company created by Liberty Global, its sole stockholder, to facilitate the mergers. The sole purpose of each of LMI Merger Sub and UGC Merger Sub in engaging in the mergers is the facilitation of the combination of LMI and UGC. As they were created for the foregoing purpose, no alternatives to the mergers were considered by LMI Merger Sub or UGC Merger Sub.
Recommendation of and Reasons for the LMI Merger
LMI’s board of directors unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the LMI merger, are advisable, fair to, and in the best interests of, LMI and its stockholders. Accordingly the LMI board recommends that the LMI stockholders vote “FOR” the merger proposal at the LMI annual meeting. In determining that the merger agreement and the LMI merger are in the best interests of LMI and its stockholders, the LMI board considered that the mergers would eliminate the current dual public holding company structure in which LMI’s principal consolidated asset is its interest in another public company, UGC. The LMI board determined that the principal benefit to LMI stockholders from the combination of the two companies under a single public company, Liberty Global, was the elimination or reduction of the holding

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company discount in LMI’s stock price. The LMI board also considered the following matters in reaching its determination:
  •  the presentation by its financial advisor, Banc of America Securities, and Banc of America Securities’ oral opinion, subsequently confirmed in writing, that as of the date of such opinion and based upon and subject to the factors, limitations and assumptions set forth in Banc of America Securities’ written opinion, the consideration to be received by LMI stockholders (other than affiliates of LMI) in the transactions contemplated by the merger agreement was fair from a financial point of view to such stockholders. In evaluating the presentation and opinion of Banc of America Securities, the LMI board was aware of the compensation arrangements with Banc of America Securities, including that a substantial portion of its fee was contingent upon completion of the mergers;
 
  •  the integration of the management teams of the two companies, with Mr. Malone serving as Chairman of the Board of Liberty Global and Mr. Fries as Chief Executive Officer. The LMI board believed that the strengths of the respective management teams at the corporate level of the two companies would complement each other, and that there was little if any overlap at the operating level that would impede a smooth integration of the two companies;
 
  •  that the consummation of the mergers would eliminate any potential competition between LMI and UGC, including in the pursuit of acquisition opportunities and capital raising activities;
 
  •  that the receipt of the merger consideration in the LMI merger would be tax-free to the LMI stockholders;
 
  •  the background of the negotiations between Mr. Malone and the Special Committee that resulted in the agreed exchange ratio and cash election alternative. Mr. Malone had advised the LMI board of his conclusion, based upon these negotiations, that the Special Committee would not approve the transaction at any lower exchange ratio. The LMI board took note of the premium that the exchange ratio represented for the shares of UGC stock, based upon the relative trading prices of the two companies prior to the initiation of discussions with the Special Committee, and the information provided by Banc of America Securities as to premiums paid in other transactions. Based upon the foregoing, the increase in the exchange ratio over the course of the negotiations did not detract from the LMI board’s conclusion that the LMI merger would be in the best interests of LMI and its stockholders;
 
  •  that the merger agreement included a limitation on the cash election, and that LMI had sufficient cash to fund the maximum amount of cash anticipated to be payable if the cash elections were fully exercised; and
 
  •  the draft of the merger agreement and the voting agreement and the summary of the terms of each provided by LMI’s counsel. In general, the terms of the merger agreement are customary for transactions of this nature and the Special Committee had insisted on the voting agreement as a condition to its approval of the merger agreement. The LMI board considered that the provision of the merger agreement requiring approval of the UGC merger by the vote of a majority of the minority stockholders of UGC was a negative factor from LMI’s perspective because of the resulting uncertainty that the transaction would be consummated. Because the merger agreement also included provisions allowing LMI to terminate the merger agreement if UGC’s annual report on Form 10-K was not filed by May 15, 2005 or if the mergers are not consummated by September 30, 2005, the uncertainty resulting from the inclusion of the minority approval requirement did not outweigh the other factors supporting the LMI board’s conclusion that the LMI merger would be in the best interests of LMI and its stockholders.
If the mergers are completed, LMI stockholders will not have dissenters’ rights of appraisal under Delaware law or the merger agreement because shares of LMI common stock are, and shares of Liberty Global common stock will be, listed on the Nasdaq National Market.
Opinion of LMI’s Financial Advisor
On January 10, 2005, the board of directors of LMI retained Banc of America Securities LLC to act as its financial advisor in connection with the possible acquisition of the minority interest of UGC. Banc of America Securities is a nationally recognized investment banking firm. Banc of America Securities is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions and has negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. LMI selected Banc of America Securities to act as its financial advisor on the basis of Banc of America Securities’ experience and expertise in transactions similar to the mergers, and its reputation in the media industry and investment community and its historical investment banking relationship with LMI and its affiliates.

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On January 17, 2005, Banc of America Securities delivered its oral opinion, subsequently confirmed in writing, to the LMI board of directors that as of the date of the opinion the consideration to be received by the holders of LMI’s common stock, other than any affiliates of LMI, pursuant to the merger agreement is fair from a financial point of view to the holders of LMI’s common stock, other than any affiliates of LMI. The amount of the consideration was determined by negotiations between LMI and the Special Committee and was not based upon recommendations from Banc of America Securities. LMI’s board of directors did not limit the investigations made or procedures followed by Banc of America Securities in rendering its opinion.
We have attached the full text of Banc of America Securities’ written opinion to the LMI board of directors as Appendix E. You should read this opinion carefully and in its entirety in connection with this joint proxy statement/ prospectus. The following summary of Banc of America Securities’ opinion is qualified in its entirety by reference to the full text of the opinion. Banc of America Securities has consented to the inclusion of its opinion and the summary of its opinion in this joint proxy statement/ prospectus. By rendering its opinion and giving such consent Banc of America Securities has not admitted that it is an expert with respect to any part of this joint proxy statement/ prospectus within the meaning of the term “expert” as used in, or that Banc of America Securities comes within the category of persons whose consent is required under, the Securities Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
Banc of America Securities’ opinion is directed to the LMI board of directors. It does not constitute a recommendation to any stockholder of LMI or UGC on how to vote with respect to the mergers. The opinion addresses only the financial fairness of the consideration to be received by the holders of LMI’s common stock, other than any affiliates of LMI, pursuant to the merger agreement. The opinion does not address the relative merits of the mergers or any alternatives to the mergers, the underlying decision of the LMI board of directors to proceed with or effect the mergers or any other aspect of the transactions contemplated by the merger agreement. In furnishing its opinion, Banc of America Securities did not admit that it is an expert within the meaning of the term “expert” as used in the Securities Act, nor did it admit that its opinion constitutes a report or valuation within the meaning of the Securities Act. Statements to that effect are included in the Banc of America Securities’ opinion.
For purposes of rendering its opinion Banc of America Securities has:
  •  reviewed certain publicly available financial statements and other business and financial information of LMI and UGC;
 
  •  reviewed certain internal financial statements and other financial and operating data concerning LMI and UGC;
 
  •  analyzed certain financial forecasts to which Banc of America Securities was directed by the management of LMI;
 
  •  reviewed and discussed with senior executives of LMI information relating to certain benefits anticipated from the mergers;
 
  •  discussed the past and current operations, financial condition and prospects of LMI with senior executives of LMI and discussed the past and current operations, financial condition and prospects of UGC with senior executives of UGC;
 
  •  reviewed the reported prices and trading activity for the LMI common stock and the UGC common stock;
 
  •  compared the financial performance of UGC and the prices and trading activity of the UGC common stock with that of certain other publicly traded companies that Banc of America Securities deemed relevant;
 
  •  compared the financial terms of the mergers to the financial terms, to the extent publicly available, of certain other business combination transactions that Banc of America Securities deemed relevant;
 
  •  participated in discussions and negotiations among representatives of LMI and UGC and their financial and legal advisors;
 
  •  reviewed the January 16, 2005 draft merger agreement and certain related documents; and
 
  •  performed such other analyses and considered other factors as Banc of America Securities deemed appropriate.
Banc of America Securities reviewed the January 16, 2005 draft merger agreement in its preparation of its opinion. While LMI and UGC had the opportunity to agree to materially add, delete or alter material terms of the merger agreement before its execution, the final merger agreement was substantially similar to the January 16, 2005 draft merger agreement.

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Banc of America Securities did not assume any responsibility to independently verify the information listed above. Instead, with the consent of the LMI board of directors, Banc of America Securities relied on the information as being accurate and complete in all material respects. Banc of America Securities also made the following assumptions with the consent of the LMI board of directors:
  •  with respect to financial forecasts for LMI and UGC, Banc of America Securities was directed by the management of LMI to rely on certain publicly available financial forecasts in performing its analyses and has assumed that, in the good faith belief of the management of LMI, such forecasts reflect the best currently available estimates of the future financial performance of LMI and UGC;
 
  •  that the LMI merger will qualify as a reorganization within the meaning of Section 368(a) of the Code and the regulations promulgated thereunder, and that the conversion of the UGC common stock into shares of Liberty Global Series A common stock pursuant to the merger agreement, will qualify as an exchange within the meaning of Section 351(a) of the Code and the regulations promulgated thereunder;
 
  •  that the final executed merger agreement will not differ in any material respect from the January 16, 2005 draft merger agreement reviewed by Banc of America Securities, and that the mergers will be consummated as provided in the January 16, 2005 draft merger agreement, with full satisfaction of all covenants and conditions set forth in it and without any waivers thereof;
 
  •  that all material governmental, regulatory or other consents and approvals necessary for the consummation of the mergers will be obtained without any adverse effect on LMI or UGC or the contemplated benefits of the mergers; and
 
  •  that the terms of the merger agreement and the mergers are the most beneficial terms from LMI’s perspective that could under the circumstances be negotiated among the parties to the merger agreement and the mergers.
In addition, for purposes of its opinion, Banc of America Securities has:
  •  relied on advice of counsel to LMI as to all legal matters with respect to LMI, the mergers and the January 16, 2005 draft merger agreement; and
 
  •  not assumed responsibility for making an independent evaluation, appraisal or physical inspection of any of the assets or liabilities, contingent or otherwise, of LMI or UGC, nor did Banc of America Securities receive any appraisals with respect thereto.
Banc of America Securities’ opinion was based upon economic, monetary and market and other conditions in effect on, and the information made available to it as of, the date of the opinion. Accordingly, although subsequent developments may affect its opinion, Banc of America Securities did not assume any obligation to update, revise or reaffirm its opinion.
The following represents a brief summary of the material financial analyses performed by Banc of America Securities in connection with providing its opinion to the LMI board of directors. Some of the summaries of financial analyses performed by Banc of America Securities include information presented in tabular format. In order to fully understand the financial analyses performed by Banc of America Securities, you should read the tables together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Banc of America Securities.
LMI and UGC Valuation Analyses
Valuation Approach
Banc of America Securities conducted valuation analyses of both LMI and UGC to evaluate the respective exchange ratios of shares of LMI and UGC, which were designed to yield a range of exchange ratios for evaluating the fairness of the exchange ratio in the mergers. The exchange ratio ranges that resulted from the analyses conducted by Banc of America Securities were presented to the LMI board of directors in two forms, with one range of ratios reflecting the consideration to be received by UGC stockholders in Liberty Global shares and/or cash for each UGC share, and with the other range of ratios reflecting the consideration to be received by LMI stockholders in Liberty Global shares, expressed as the number of Liberty Global shares to be received for each LMI share.
These two ranges of exchange ratios are different ways of expressing the economic exchange involved in the creation of Liberty Global and the consummation of the mergers. For example, an exchange ratio expressed in terms of the

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number of shares of Liberty Global stock to be received by a holder of a share of stock of either UGC or LMI, respectively, can be converted into an exchange ratio expressed in terms of the number of shares of Liberty Global stock to be received by a holder of a share of the other by applying an implied exchange ratio and the number of outstanding shares of the companies immediately prior to the exchange. For the purposes of Banc of America Securities’ analysis, the implied exchange ratios used were the exchange ratios derived from closing stock prices on January 14, 2005 and the outstanding shares used were 807.1 million for UGC and 173.7 million for LMI, respectively.
Valuation Methodologies
Exchange Ratio Analysis. Banc of America Securities reviewed the historical ratio of the closing price per share of LMI common stock and that of UGC common stock for several time periods since June 2, 2004 (the day on which LMI common stock began trading on a when-issued basis prior to LMI’s spin off from Liberty). During this period, the historical exchange ratio calculated on a daily basis ranged from a low of 0.1853 on July 20, 2004 to a high of 0.2239 on September 30, 2004.
The weighted average exchange ratios for selected time periods since June 2, 2004 were:
         
    Weighted Average
Period Prior to January 14, 2005   Exchange Ratio
     
1 Week
    0.2168  
1 Month
    0.2087  
2 Months
    0.2034  
3 Months
    0.2060  
Since LMI common stock began trading on a when-issued basis prior to LMI’s spin off from Liberty (June 2, 2004)
    0.2054  
Premiums Paid Analysis. Banc of America Securities reviewed the consideration paid in 19 merger and acquisition transactions announced after March 31, 1995 and involving U.S. companies in which the aggregate values paid exceeded $500 million and in which the acquirer owned more than 50% of the target prior to the acquisition. Banc of America Securities calculated the premiums paid relative to the stock prices of the acquired companies in all cash or cash and stock deals and premiums paid relative to the exchange ratio for all stock deals one day, one week and one month prior to the announcement of the acquisition offer.
The Premiums Paid Analysis indicated the following median and mean premiums for these transactions, excluding pending transactions:
                         
    Premium One Day   Premium One Week   Premium One Month
    Before Announcement   Before Announcement   Before Announcement
             
High (All Deals)
    46.4 %     42.7 %     73.4 %
Low (All Deals)
    (12.0 )%     (21.4 )%     (17.9 )%
Median (All Deals)
    19.8 %     19.8 %     22.2 %
Mean (All Deals)
    19.2 %     19.5 %     26.1 %
High (Stock Only)
    29.2 %     37.0 %     73.4 %
Low (Stock Only)
    (12.0 )%     (21.4 )%     (17.9 )%
Median (Stock Only)
    19.2 %     13.5 %     14.6 %
Mean (Stock Only)
    15.7 %     13.0 %     23.1 %
Based upon this analysis, Banc of America Securities established an exchange ratio premium range of 10% — 25% to the one day and one month prior exchange ratios. This exchange ratio premium range was selected because it encompassed substantively all the means and medians yielded by the Premiums Paid Analysis.
The table below sets forth the exchange ratios derived from applying the premium range to the exchange ratios derived from the closing stock prices of LMI and UGC on January 14, 2005.
                 
    Consideration to be Received by   Consideration to be Received by
    UGC Stockholders   LMI Stockholders
         
10% Premium (1 Day Prior)
    0.2427       0.8879  
25% Premium (1 Day Prior)
    0.2758       0.7813  
10% Premium (1 Month Prior)
    0.2105       1.0236  
25% Premium (1 Month Prior)
    0.2392       0.9008  

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Banc of America Securities noted that the per-share value of the stock consideration to be received by UGC stockholders pursuant to the merger agreement based upon LMI’s closing stock price on January 14, 2005 implied a discount of 2.3% over UGC’s closing stock price on January 14, 2005. The premium implied over UGC’s closing stock price one week prior to January 14, 2005 was 2.5% and the implied premium over the price one month prior to that date was 8.6%.
Holding Company Discount Analysis. Banc of America Securities performed a sum-of-the-parts valuation of LMI to determine the net asset value of LMI, in part in order to derive the appropriate range of holding company discounts implicit in LMI’s market price. A holding company discount is the discount at which a stock trades relative to its net asset value per share. Such discount is calculated by dividing a company’s net asset value by its fully-diluted shares outstanding and comparing that per-share net asset value to the company’s stock price to determine whether the net asset value per share represents a discount or premium to the stock’s trading price. Holding company discounts are so named because it is believed that companies with partial ownership in diverse assets do not receive full credit from the capital markets for the value of their holdings in these respective businesses. In the case of LMI, Wall Street analysts sometimes refer to the holding company discount as an explanation for why the company’s stock trades below its net asset value. Some analysts include both sum-of-the-parts (net asset) and public market/other valuations in their research specifically to understand the degree to which LMI is impacted by such holding company discount.
In order to derive LMI’s sum-of-the-parts value, LMI’s ownership in UGC was taken at market value and the values of the other assets of LMI were calculated using publicly available information and management estimates. Banc of America Securities’ sum-of-the-parts equity value for LMI ranged from approximately $8.8 billion to $9.1 billion, or $50.45 to $52.62 per share, implying a current holding company discount of approximately 13% to 17%. In calculating the sum-of-the-parts (net asset) value of LMI, Banc of America Securities noted that the substantial majority of LMI’s value comprised cash and equivalents, its stake in UGC’s equity, and its stake in J-COM, which was in the process of registering its initial public offering as described elsewhere in this proxy statement/prospectus.
In addition, Banc of America Securities reviewed several Wall Street analysts’ reports, published over a three week period beginning in mid-November 2004, each of which provided (i) an estimated net asset value per share for LMI, and (ii) in all but one case, a target share price for LMI and the discount represented by the target share price relative to such net asset value per share. These reports were used by Banc of America Securities to derive a range of discounts or premiums at which Wall Street analysts estimate LMI’s shares trade relative to its net asset value per share as well as a range of discounts to net asset value per share represented by those analysts’ published target prices. The specific reports were selected because they were deemed to be sufficiently recent to be relevant and because they provided estimates of LMI’s net asset value per share, which could be used to calculate an implied premium or discount to LMI’s stock price (which we refer to as the holding company discount) as of the report date. Other available research was excluded from this analysis because it did not provide an estimated net asset value per share and could not, therefore, be used to quantify a holding company discount. The estimated net asset value per share included in the reports included a high of $56.81 and a low of $41.89, yielding a median estimated net asset value of $49.22.
The holding company discount analysis yielded the following information regarding LMI’s estimated holding company discount:
                         
        Net Asset    
    Target   Value /   Premium (Discount) of Target Price
    Price   Share   to Net Asset Value per Share
             
Median
  $ 49.00     $ 54.10       (9 )%
Low
  $ 51.00     $ 56.81       (10 )%
High
  $ 41.00     $ 41.89       (2 )%
                         
        Net Asset    
    Market   Value /   Premium (Discount) of Market Price
    Price   Share   to Net Asset Value per Share
             
Median
  $ 43.53     $ 49.22       (14 )%
Low
  $ 43.37     $ 56.81       (24 )%
High
  $ 43.68     $ 41.89       4%  
The report that did not assign a target price for LMI stock was not included in the calculation of premium or discount of target price to net asset value above.
Banc of America Securities used the results of these analyses to determine what discount, if any, should be applied to the net asset valuations calculated in the relative valuation analysis of LMI and UGC (described below). Based upon the results of the holding company discount analysis, Banc of America Securities applied a holding company discount range of 0% to 20% to LMI’s sum-of-the-parts value in the relative valuation analysis.

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Relative Valuation Analysis. Banc of America Securities compared the value of UGC, based upon three customary valuation methodologies, to the sum-of-the-parts (or net asset) value of LMI, including the value of LMI’s holdings in UGC based upon the same three valuation methodologies. The three methodologies used to calculate the value of UGC are:
  (A)  Public Market Valuation, in which the value of UGC was based upon UGC’s fully diluted shares outstanding multiplied by their market price on January 14, 2005
  (B)  Comparable Company Analysis, in which the value of UGC was calculated as its estimated 2005 cable EBITDA multiplied by the median Aggregate Value / estimated 2005 cable EBITDA multiples of its peers
 
  (C)  Discounted Cash Flow Analysis, in which the value of UGC was calculated as the present value of its projected unlevered free cash flows for the period 2005 through 2009, plus a range of Terminal Values
Each of these valuation methodologies produced a value for UGC that was then included in a sum-of-the-parts valuation analysis of LMI. LMI’s sum-of-the-parts valuation also included the values of LMI’s assets other than UGC, which were calculated using publicly available information and management estimates. The sum-of-the-parts valuation of LMI provided a range of stock prices for LMI that varied according to the methodology used and the value implied by such methodology for UGC. Once this range of stock prices for LMI was established, Banc of America Securities applied a holding company discount of 0% to 20% based upon the holding company analysis described above.
Banc of America Securities then compared the value of UGC derived from each methodology to the corresponding sum-of-the-parts value of LMI, as adjusted by the holding company discount, in order to calculate a range of exchange ratios.
The three methodologies that Banc of America Securities used to value UGC for the purposes of the sum-of-the-parts valuation of LMI are described in greater detail below.
A. Public Market Valuation. Banc of America Securities established a valuation for UGC based upon the closing market price of UGC’s stock on January 14, 2005 and the fully diluted shares outstanding of UGC. This value for UGC was then used to establish the value of LMI’s stake in UGC for purposes of calculating the sum-of-the-parts (or net asset) valuation of LMI. Banc of America Securities then compared this value of UGC to the corresponding sum-of-the-parts valuation of LMI, adjusted by the holding company discount of 0% to 20%, to determine a range of exchange ratios for the transaction as set forth below.
                 
    Consideration to be Received by   Consideration to be Received by
    UGC Stockholders   LMI Stockholders
         
20% Holding Company Discount
    0.2357       0.9143  
0% Holding Company Discount
    0.1886       1.1429  
Banc of America Securities noted that, based upon a public market valuation for UGC, LMI’s sum-of-the-parts (or net asset) value implied a holding company discount of approximately 15% as of January 14, 2005.
B.     Comparable Company Analysis. Banc of America Securities established a valuation for UGC based upon a median multiple of “aggregate value” to estimated forward cable earnings before interest, taxes, depreciation and amortization (which we refer to as Cable EBITDA) for 2005 for five companies in the U.S. cable industry that Banc of America Securities deemed to be comparable to UGC.
Banc of America Securities defined “aggregate value” to mean:
  •  equity value, defined as the product of the number of shares of common stock outstanding for a company multiplied by its stock price as of January 14, 2005; plus
 
  •  outstanding funded debt; less
 
  •  cash, cash equivalents and non-cable unconsolidated assets.
The following table sets forth multiples indicated by this analysis for these five companies:
                 
Aggregate Value to:   Range of Multiples   Median
         
2005E Cable EBITDA
    7.9x to 10.0x       8.9x  
The comparable company analysis compared UGC to five U.S. cable companies. These companies were selected because they were all U.S. publicly traded companies and, given their scale, the scope of services provided by them and the quality of their respective businesses, Banc of America Securities considered them to be most relevant to UGC for purposes of its analysis. Banc of America Securities noted that the two largest publicly traded UK cable companies,

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NTL and Telewest, trade at a median multiple of 6.1x 2005 estimated Cable EBITDA. Banc of America Securities, however, did not view these two companies as being comparable to UGC for purposes of this analysis. Banc of America Securities did not include every company that could be deemed to be a participant in the same industry.
Based upon the median of US cable company trading multiples, which Banc of America Securities deemed to be the most relevant for purposes of the analysis, the comparable companies valuation of UGC yielded a value for UGC which was then used to establish the value of LMI’s stake in UGC for purposes of the sum-of-the-parts (or net asset) valuation of LMI. Banc of America Securities then compared this value of UGC to the corresponding sum-of-the-parts valuation of LMI, adjusted by the holding company discount of 0% to 20%, to determine a range of exchange ratios for the transaction as set forth below.
                 
    Consideration to be Received by   Consideration to be Received by
    UGC Stockholders   LMI Stockholders
         
20% Holding Company Discount
    0.2262       0.9529  
0% Holding Company Discount
    0.1809       1.1911  
Banc of America Securities noted that, based upon a comparable companies valuation for UGC, LMI’s sum-of-the-parts (or net asset) value implied a holding company discount of approximately 11% as of January 14, 2005.
C.     Discounted Cash Flow Analysis. Banc of America Securities established a valuation for UGC based upon the estimated present value of its projected unlevered free cash flows. For purposes of estimating such future cash flows, Banc of America Securities used certain publicly available financial cash flow forecasts for UGC for 5 years (2005 through 2009). Banc of America Securities was directed to this publicly available information by the management of UGC. In conducting this analysis, Banc of America Securities first calculated the present values of the forecasted cash flows. Banc of America Securities then estimated the terminal value of UGC at the end of 2009 by applying multiples to UGC’s estimated 2009 EBITDA. These multiples ranged from 8.0x to 10.0x. Banc of America Securities then discounted the cash flows and terminal values to present values using discount rates ranging from 8% to 12%. Banc of America Securities selected the range of discount rates to reflect a realistic range of the weighted average cost of capital for companies in UGC’s industry and with capitalization profiles not dissimilar from UGC’s.
This analysis indicated a range of aggregate value for UGC, expressed as multiples of estimated 2005E Cable EBITDA, as summarized in the table below:
                             
Multiple of Aggregate Value to 2005E Cable EBITDA
 
    Terminal Multiple of 8.0x   Terminal Multiple of 9.0x   Terminal Multiple of 10.0x
    Projected Calendar Year   Projected Calendar Year   Projected Calendar Year
Discount Rate   2009 EBITDA   2009 EBITDA   2009 EBITDA
             
  8.0%       9.8x       10.8 x     11.7x  
  10.0%       9.1x       9.9 x     10.7x  
  12.0%       8.4x       9.1 x     9.9x  
The midpoint value implied for UGC (using a terminal multiple of 9.0x and a discount rate of 10%) was then used to establish the value of LMI’s stake in UGC for purposes of calculating the sum-of-the-parts (or net asset) valuation of LMI. Banc of America Securities then compared this value of UGC to the corresponding sum-of-the-parts valuation of LMI, adjusted by the holding company discount of 0% to 20%, to determine a range of exchange ratios for the transaction as set forth below:
                 
    Consideration to be Received by   Consideration to be Received by
    UGC Stockholders   LMI Stockholders
         
20% Holding Company Discount
    0.2447       0.8807  
0% Holding Company Discount
    0.1957       1.1009  
Banc of America Securities noted that, based upon the discounted cash flow valuation of UGC, LMI’s sum-of-the-parts (or net asset) value implied a holding company discount of approximately 17% as of January 14, 2005.
As noted above, the discussion above is merely a summary of the analyses and examinations that Banc of America Securities considered to be material to its opinion. It is not a comprehensive description of all analyses and examinations actually conducted by Banc of America Securities. The preparation of a fairness opinion is not susceptible to partial analysis or summary description. Banc of America Securities believes that its analyses and the summary above must be considered as a whole. Banc of America Securities further believes that selecting portions of its analyses and the factors considered, without considering all analyses and factors, would create an incomplete view of the process underlying the analyses set forth in its presentation to the LMI board of directors. Banc of America Securities did not assign any specific weight to any of the analyses described above. The fact that any specific analysis

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has been referred to in the summary above is not meant to indicate that that analysis was given greater weight than any other analysis. Accordingly, the ranges of valuations resulting from any particular analysis described above should not be taken to be Banc of America Securities’ view of the actual value of LMI.
In performing its analyses, Banc of America Securities made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of LMI and UGC. The analyses performed by Banc of America Securities are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those suggested by these analyses. These analyses were prepared solely as part of Banc of America Securities’ analysis of the financial fairness of the consideration to be received by the holders of LMI’s common stock, other than any affiliates of LMI, pursuant to the merger agreement and were provided to the LMI board of directors in connection with the delivery of Banc of America Securities’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future.
As described above, Banc of America Securities’ opinion and presentation to the LMI board of directors were among the many factors taken into consideration by the LMI board of directors in making its determination to approve, and to recommend that LMI’s stockholders approve, the merger agreement.
Pursuant to the engagement letter between LMI and Banc of America Securities, LMI has paid Banc of America Securities a fee of $500,000 upon execution of the engagement letter and an additional $500,000 upon rendering of Banc of America Securities’ opinion described above and agreed to an additional fee of $4,000,000, payable upon the consummation of the mergers. LMI has separately engaged Banc of America Securities to act as LMI’s financial advisor in connection with a separate assignment, for which it has agreed to pay Banc of America Securities $200,000 per quarter until December 31, 2005, and an additional $500,000 upon delivery of a formal presentation to LMI. Each engagement letter calls for LMI to reimburse Banc of America Securities for its reasonable out-of-pocket expenses, and LMI has agreed to indemnify Banc of America Securities, its affiliates, and their respective partners, directors, officers, agents, consultants, employees and controlling persons against particular liabilities, including liabilities under the federal securities laws. During the past two years, Banc of America Securities and its affiliates have also received significant revenue associated with banking and investment banking services provided to Liberty. These services include the arrangement of derivative instruments and other financial products and the provision of advisory services. Prior to LMI’s spin off from Liberty, certain of these services were provided on behalf of the businesses of LMI. Following the spin off, Banc of America Securities acted as the lead arranger for a credit facility entered into by Liberty Cablevision of Puerto Rico, Ltd., a subsidiary of LMI, for which Banc of America Securities received a customary arrangement fee. Bank of America, N.A., an affiliate of Banc of America Securities, is also a lender and the administrative agent under this credit facility. In its capacity as lender, Bank of America received a commitment fee in 2004 and continues to receive quarterly interest payments from or on behalf of Liberty Cablevision of Puerto Rico. In its capacity as administrative agent, Bank of America receives administrative fees from or on behalf of Liberty Cablevision of Puerto Rico on an ongoing basis. Also, during the past two years, Banc of America Securities and its affiliates have received revenue associated with banking and investment banking services provided to UGC. These services include the arrangement of financial products, including derivative instruments. In addition, Banc of America Securities provided advisory services to LMI and UGC in connection with the Noos acquisition, for which Banc of America Securities received customary fees from UGC. The LMI board of directors was aware of the foregoing fees and took them into account in considering Banc of America Securities’ fairness opinion and in approving the merger agreement and the LMI merger.
In the ordinary course of their business, Banc of America Securities and its affiliates may actively trade the debt and equity securities or loans of LMI, UGC and their affiliates for their own account and for the accounts of customers, and accordingly, Banc of America Securities and its affiliates may at any time hold a long or short position in such securities or loans. Banc of America Securities or its affiliates have also performed, and may in the future perform, various investment banking, lending and other financial services for LMI and UGC and their affiliates for which Banc of America Securities or its affiliates has received, and would expect to receive, customary fees.
Availability of Opinions and Reports
Morgan Stanley’s opinion and its report to the Special Committee will be made available for inspection and copying at the principal executive offices of UGC during its regular business hours by any interested stockholder of UGC or any representative of an interested stockholder of UGC who has been designated as such in writing. Banc of America Securities’ opinion and its report to the LMI board of directors will be made available for inspection and copying at the principal executive offices of LMI during its regular business hours by any interested stockholder of LMI or any representative of an interested stockholder of LMI who has been designated as such in writing.

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Conduct of the Business of UGC if the Mergers are Not Completed
If the mergers are not completed, UGC intends to continue to operate its business substantially in the manner it is operated today with its existing capital structure and management team remaining. From time to time, UGC will evaluate and review its business operations, properties, dividend policy and capitalization, and make such changes as are deemed appropriate, and continue to seek to identify strategic alternatives to maximize stockholder value.
Amount and Source of Funds and Financing of the Mergers; Expenses
Prior to the effective time of the mergers, LMI will loan to Liberty Global a sufficient amount of cash for Liberty Global to fund the cash consideration deliverable to the UGC stockholders (other than LMI and its wholly owned subsidiaries) in the UGC merger. LMI will fund this loan with its available cash. The mergers are not conditioned on the receipt of financing by LMI to pay the cash consideration deliverable to UGC stockholders.
It is expected that LMI and UGC will incur an aggregate of approximately $22 million in expenses in connection with the mergers. These expenses will be comprised of:
  •  approximately $10.6 million in financial advisory fees;
 
  •  approximately $5 million of printing and mailing expenses associated with this joint proxy statement/ prospectus;
 
  •  approximately $3.2 million in legal and accounting fees;
 
  •  approximately $1.5 million in SEC filing fees; and
 
  •  approximately $1.3 million in solicitation fees and other miscellaneous expenses.
It is expected that LMI’s portion of these expenses will equal approximately $11 million and UGC’s portion of these expenses will equal approximately $11 million.
Interests of Certain Persons in the Mergers
Interests of Directors and Executive Officers
In considering the recommendation of UGC’s board of directors to vote to approve the merger proposal, stockholders of UGC should be aware that members of UGC’s board of directors and members of UGC’s executive management have relationships, agreements or arrangements that provide them with interests in the mergers that may be in addition to or different from those of the public stockholders of UGC. Similarly, in considering the recommendation of LMI’s board of directors to vote to approve the merger proposal, stockholders of LMI should be aware that members of LMI’s board of directors and members of LMI’s executive management have relationships, agreements or arrangements that provide them with interests in the mergers that may be in addition to or different from those of the public stockholders of LMI. In addition, the current directors of LMI and UGC will be entitled to the continuation of certain indemnification arrangements following completion of the mergers.
Following completion of the mergers, John C. Malone, Chairman of the Board, Chief Executive Officer and President of LMI, will become Chairman of the Board of Liberty Global, and Michael T. Fries, Chief Executive Officer and President of UGC, will become President and Chief Executive Officer of Liberty Global. Five of LMI’s current directors, including Mr. Malone, and five of UGC’s current directors, including Mr. Fries and the three members of the Special Committee, have agreed to together comprise the board of Liberty Global. The directors of Liberty Global are expected to beneficially own shares of Liberty Global common stock representing in the aggregate approximately 26.2% of the aggregate voting power of Liberty Global, based upon their beneficial ownership interests in LMI and UGC, respectively, as of March 31, 2005, and assuming no cash elections are made by the UGC stockholders. In addition, Liberty Global’s management will be comprised of members of LMI’s and UGC’s management teams to be selected by the Liberty Global board of directors.
In anticipation of the completion of the mergers, we have amended the option award agreements of three of LMI’s current directors. For information regarding these amendments, please see “Management of LMI — Director Compensation.”
Both LMI’s board of directors and UGC’s board of directors were aware of these interests and arrangements and considered them when approving the mergers. For more information regarding these interests and arrangements, see

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“Management of LMI,” “Executive Officers, Directors and Principal Stockholders of UGC” and “Management of Liberty Global,” including:
  •  under “Management of LMI — Pro Forma Security Ownership Information of LMI Management,” the beneficial ownership interests in Liberty Global estimated to be held by the directors and executive officers of LMI immediately following the mergers, based upon their beneficial ownership interests in LMI and UGC, as of March 31, 2005, and assuming none of them elects any cash consideration in the UGC merger;
 
  •  under “Executive Officers, Directors and Principal Stockholders of UGC — Pro Forma Security Ownership Information of UGC Management,” the beneficial ownership interests in Liberty Global estimated to be held by the directors and executive officers of UGC immediately following the mergers, based upon their beneficial ownership interests in LMI and UGC, as of March 31, 2005, and assuming none of them elects any cash consideration in the UGC merger; and
 
  •  under “Executive Officers, Directors and Principal Stockholders of UGC — Pro Forma Cash Consideration Deliverable to UGC Management,” the aggregate amount of cash consideration that could be received by the directors and executive officers of UGC in the UGC merger, based upon their beneficial ownership interests in UGC as of March 31, 2005, and assuming (1) they exercise their cash election with respect to all of their UGC beneficial ownership interests (other than interests held pursuant to stock options) and (2) that their cash elections are not reduced pursuant to applicable proration procedures.
Voting Intentions
The directors and executive officers of UGC, who together beneficially own shares of UGC common stock representing less than 1% of UGC’s aggregate voting power, as of March 31, 2005, have indicated to UGC that they intend to vote in favor of the approval of the merger proposal at the UGC special meeting. Also, LMI, which beneficially owns shares of UGC common stock representing approximately 91% of UGC’s aggregate voting power, as of March 31, 2005, has agreed in the merger agreement to vote, and to cause its subsidiaries to vote, in favor of the approval of the merger proposal at the UGC special meeting. The directors and executive officers of LMI (including Mr. Malone), who together beneficially own shares of UGC common stock representing less than 1% of UGC’s aggregate voting power, as of March 31, 2005, have indicated to UGC that they intend to vote in favor of the approval of the merger proposal at the UGC special meeting.
Transactions in UGC Securities
Except as described below, none of (1) LMI or its wholly owned subsidiaries, (2) the directors and executive officers of UGC, or (3) the directors and executive officers of LMI:
  •  has effected any transactions in shares of UGC common stock during the 60 days preceding the date of this joint proxy statement/ prospectus; or
 
  •  intends to effect any such transactions prior to the stockholders meetings.
Certain of UGC’s executive officers hold restricted stock awards under UGC’s equity incentive plans. A portion of the restricted shares of UGC Class A common stock granted to these persons will vest prior to the stockholders meetings. UGC and most of these executive officers whose grants will so vest have agreed that UGC will withhold, upon the vesting date, a number of shares sufficient to satisfy the withholding tax obligations associated with the vesting.
Pursuant to UGC’s defined contribution 401(k) plan (UGC 401(k) Plan), on March 31, 2005, UGC matched the contributions of its employees, including certain of its executive officers, to their respective 401(k) accounts by issuing to those accounts shares of UGC Class A common stock.
Pursuant to LMI’s services agreement with UGC, LMI’s employees, including certain of its executive officers, participate in the UGC 401(k) Plan. Accordingly, on March 31, 2005, UGC also matched the contributions of LMI’s employees, including certain of its executive officers, to their respective 401(k) accounts by issuing to those accounts shares of UGC Class A common stock. LMI reimburses UGC for such stock issuances pursuant to LMI’s services agreement with UGC.
Accounting Treatment
The mergers will be accounted for as a “step acquisition” by LMI of the remaining minority interest in UGC. The purchase price in this step acquisition will include the consideration issued to UGC public stockholders to acquire the UGC interest not already owned by LMI and the direct acquisition costs incurred by LMI. As UGC was a

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consolidated subsidiary of LMI prior to the mergers, the purchase price will first be applied to eliminate the minority interest in UGC from the consolidated balance sheet of LMI, and the remaining purchase price will be allocated on a pro rata basis to the identifiable assets and liabilities of UGC based upon their respective fair values at the effective date of the mergers and the 46.5% interest in UGC to be acquired by Liberty Global pursuant to the mergers. Any excess purchase price that remains after amounts have been allocated to the net identifiable assets of UGC will be recorded as goodwill. As the acquiring company for accounting purposes, LMI will be the predecessor to Liberty Global and the historical financial statements of LMI will become the historical financial statements of Liberty Global. See “Liberty Global Unaudited Condensed Pro Forma Combined Financial Statements.”
Regulatory Matters
At the date of this joint proxy statement/ prospectus, each of LMI and UGC has obtained all regulatory approvals required for the completion of the mergers.
Appraisal or Dissenters’ Rights
Under Section 262 of the Delaware General Corporation Law (DGCL), holders of shares of UGC Class A common stock will not be entitled to appraisal rights in connection with the UGC merger. Unlike holders of shares of UGC Class A common stock, holders of shares of UGC Class B common stock or UGC Class C common stock (in each case, other than LMI and its wholly owned subsidiaries) will be entitled to appraisal rights in connection with the UGC merger because those shares are not listed on a stock exchange or traded on the Nasdaq National Market and are held of record by less than 2,000 persons. At the date of this joint proxy statement/ prospectus, the only holders of UGC Class B or Class C common stock other than LMI and its wholly owned subsidiaries are Liberty and its wholly owned subsidiaries, which own shares of UGC Class C common stock. Gene W. Schneider, the Chairman of the Board of UGC, and two employees of UGC hold currently exercisable options to acquire shares of UGC Class B common stock; however, none of Mr. Schneider and the two employees will be entitled to appraisal rights with respect to those shares unless their respective options are first exercised.
Under Section 262 of the DGCL, LMI stockholders are not entitled to appraisal rights in connection with the LMI merger.
Section 262 of the DGCL is included as Appendix H to this joint proxy statement/ prospectus and is incorporated herein in its entirety by this reference.
Federal Securities Law Consequences
The issuance of shares of Liberty Global common stock in the mergers will be registered under the Securities Act, and the shares of Liberty Global common stock so issued will be freely transferable under the Securities Act, except for shares of Liberty Global common stock issued to any person who is deemed to be an “affiliate” of either LMI or UGC at the time of the stockholders meetings. Persons who may be deemed to be affiliates include individuals or entities that control, are controlled by, or are under common control with either LMI or UGC and may include directors, executive officers and significant stockholders of each of LMI and UGC. Affiliates may not sell their shares of Liberty Global common stock acquired in connection with the mergers, except pursuant to:
  •  an effective registration statement under the Securities Act covering the resale of those shares;
 
  •  an exemption under paragraph (d) of Rule 145 under the Securities Act; or
 
  •  any other applicable exemption under the Securities Act.
Liberty Global’s registration statement on Form S-4, of which this document forms a part, does not cover the resale of shares of Liberty Global common stock to be received by affiliates in the mergers. The merger agreement requires that LMI and UGC each use its commercially reasonable efforts to cause each of their respective affiliates to deliver to Liberty Global a written agreement to the effect that these persons will not sell, transfer or otherwise dispose of any of the shares of Liberty Global common stock issued to them in the mergers in violation of the Securities Act or the related rules and regulations of the Securities and Exchange Commission. See “The Transaction Agreements — Merger Agreement — Covenants.”
Class Action Lawsuits Relating to the UGC Merger
Since January 18, 2005, twenty-one lawsuits have been filed in the Delaware Court of Chancery and one lawsuit has been filed in Denver District Court, State of Colorado, all purportedly on behalf of the public stockholders of UGC regarding the announcement on January 18, 2005 of the execution by LMI and UGC of the merger agreement. The

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defendants named in these actions include Gene W. Schneider, Michael T. Fries, David B. Koff, Robert R. Bennett, John C. Malone, John P. Cole, Bernard G. Dvorak, John W. Dick, Paul A. Gould and Gary S. Howard (directors of UGC), UGC and LMI. The allegations in each of the complaints, which are substantially similar, assert that the defendants have breached their fiduciary duties of loyalty, care, good faith and candor and that various defendants have engaged in self-dealing and unjust enrichment, affirmed an unfair price, and impeded or discouraged other offers for UGC or its assets in bad faith and for improper motives. In addition to seeking to enjoin the UGC merger, the complaints seek remedies including damages for the public holders of UGC stock and an award of attorney’s fees to plaintiffs’ counsel. In connection with the Delaware lawsuits, defendants have been served with one request for production of documents. On February 11, 2005, the Delaware Court of Chancery consolidated all twenty-one Delaware lawsuits into a single action. Under the terms of the court’s consolidation order, the plaintiffs are required to file a consolidated amended complaint as soon as practicable, and the defendants are not required to respond to any other complaints filed in the twenty-one constituent actions. As of the date of this joint proxy statement/ prospectus, the plaintiffs have not filed a consolidated amended complaint and, pursuant to the terms of the court order, the defendants have not filed an answer or other response. The defendants believe the lawsuits are without merit.
Provisions for Unaffiliated Stockholders of UGC
Delaware law provides stockholders of a Delaware corporation who have a proper purpose and who meet certain statutory requirements the right to inspect a list of stockholders and other corporate books and records. Other than in accordance with Delaware law or any action by a governmental authority, the unaffiliated stockholders of UGC will not be given any special access to the corporate files of UGC in connection with or in contemplation of the mergers.
Unless otherwise required by Delaware law or any action by a governmental authority, neither UGC nor LMI intends to obtain counsel or appraisal services for the unaffiliated stockholders of UGC in connection with the mergers.
Plans for UGC After the Mergers; Certain Effects of the Mergers
UGC Business
Following the mergers, the business and operations of UGC will be conducted substantially as they are currently being conducted with the exception that, among other things, UGC will become a subsidiary of a new parent company named Liberty Global, Inc. The centralized management, administration, finance, accounting, legal and other “parent company” tasks performed by UGC prior to the mergers will be performed by Liberty Global following the mergers. It is anticipated that the centralization of these functions will not create an economic benefit for UGC as we anticipate that substantially all of UGC’s corporate staff will either remain employed by UGC or will become members of Liberty Global’s corporate staff following the completion of the mergers. However, the centralization of these functions is anticipated to provide LMI with potential cost-savings. Since its June 2004 spin off, LMI has paid Liberty for the portion of Liberty’s personnel costs (taking into account wages and fringe benefits) allocable to LMI for time spent by Liberty personnel performing services for LMI under the services agreement entered into between LMI and Liberty at the time of the spin off. Following the mergers, it is anticipated that the corporate staff of Liberty Global and its subsidiaries will perform the services previously provided by Liberty personnel under the services agreement. Based upon the amounts budgeted to be paid to Liberty for LMI’s allocable portion of Liberty’s personnel costs for 2005, it is estimated that LMI will realize an annualized cost savings of approximately $700,000 as a result of the centralization of these functions.
UGC Directors and Officers
Following the mergers, Liberty Global’s management team will be responsible for the businesses of UGC. Liberty Global’s management team will include certain members of UGC’s current management team, including Michael T. Fries, the President and Chief Executive Officer of UGC, who has agreed to serve as the President and Chief Executive Officer of Liberty Global. Liberty Global will have a staggered board that will include five of UGC’s ten directors, who will be assigned to board classes with different terms than those to which they are currently assigned on UGC’s board. See “Management of Liberty Global.”
Following the mergers, we expect each of LMI and UGC to have a board of directors comprised of officers of Liberty Global because LMI and UGC will become subsidiaries of Liberty Global in the mergers. Hence, UGC will no longer have a separate audit committee and compensation committee, eliminating the fees paid by UGC to and expenses paid by UGC on behalf of its nonemployee directors and committee members, which aggregated $258,000 for the year ended December 31, 2004. For information regarding UGC’s director compensation policy, see “Item 11. Executive Compensation — Compensation of Directors” in UGC’s Annual Report on Form 10-K/ A for the year ended December 31, 2004, which is incorporated by reference in this joint proxy statement/ prospectus.

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For information regarding the current directors and executive officers of LMI, Liberty Global, LMI Merger Sub and UGC Mergers Sub, see “Management of LMI,” including “— Current Management of Liberty Global, LMI Merger Sub and UGC Merger Sub” included under “Management of LMI.”
UGC Capital Structure
UGC will be the surviving corporation in the UGC merger, and its existing capital structure will remain in place immediately following the mergers. Each share of UGC common stock acquired by Liberty Global in the UGC merger will be converted into one share of the corresponding class of common stock of UGC as the surviving corporation and will remain outstanding immediately following the mergers, and each share of UGC common stock held by LMI or any of its wholly owned subsidiaries, at the time of the UGC merger, will be converted into one share of the corresponding class of common stock of UGC as the surviving corporation and will remain outstanding immediately following the mergers. As a result, Liberty Global will own directly 46.5% of the common stock of UGC as the surviving corporation in the UGC merger, and indirectly through Liberty Global’s wholly owned subsidiary LMI 53.5% of the common stock of UGC as the surviving corporation in the UGC merger (based upon outstanding UGC share information as of March 31, 2005).
Liberty Global will have a different capital structure than UGC has. See “Description of Liberty Global Capital Stock” and “Comparison of Rights of Stockholders of LMI, UGC and Liberty Global.” In addition, it is anticipated that Liberty Global common stock will have greater liquidity due to the size of Liberty Global’s stockholder base. However, we cannot quantify the benefit of this liquidity to the unaffiliated stockholders of UGC who make the stock election in the UGC merger.
Outstanding Convertible Notes of UGC
As of December 31, 2004, UGC had outstanding 500,000,000 aggregate principal amount of 13/4% convertible senior notes due April 15, 2024 (which we refer to as the UGC convertible notes). The UGC convertible notes were issued under an indenture dated as of April 6, 2004 between UGC and The Bank of New York, as trustee. The indenture provides that after the consummation of the UGC merger, the note holders will be entitled, subject to the restrictions on convertibility set forth in the indenture, to convert their notes into the number of shares of Liberty Global Series A common stock that they would have received in the UGC merger if they had converted their notes into UGC Class A common stock immediately prior to the UGC merger and had made the stock election. In connection with the mergers, UGC, Liberty Global and the trustee will enter into a supplemental indenture to implement this modification in the conversion right of the UGC convertible notes. In addition, under the indenture the UGC convertible notes will become convertible in connection with the UGC merger unless at least 90% of the aggregate value of the merger consideration (excluding cash payments for fractional share interests) into which the UGC Class A common stock is converted consists of Liberty Global Series A common stock. Hence, whether the UGC convertible notes become convertible in connection with the UGC merger will depend on the amount of cash paid to those UGC stockholders (if any) who make the cash election for their shares of UGC Class A common stock. Under the conversion provisions of the indenture, UGC convertible notes are convertible into, at the option of UGC, (1) shares of UGC Class A common stock at the conversion price of 9.7561 euros per share, (2) an amount in cash determined by multiplying the number of shares of UGC Class A common stock into which the surrendered note is convertible by a measure of the average trading price of UGC Class A common stock for the five trading days following the conversion date, or (3) a combination of such stock and cash. UGC will give the requisite notice under the indenture of any conversion rights accruing to holders of the UGC convertible notes in connection with the UGC merger at least 20 days prior to the anticipated effective date of the UGC merger, and the procedures to be followed to effect conversion. The merger will not constitute a “change in control” as defined in the indenture, which would have given the note holders the right to require UGC to repurchase the UGC convertible notes at par, plus accrued and unpaid interest.
Listing and Registration; Reporting Obligations
Following the mergers, UGC Class A common stock will be delisted from the Nasdaq National Market and deregistered under the Exchange Act, and UGC will cease to be a reporting company under the Exchange Act. During 2004, UGC incurred approximately $2.7 million in compliance costs associated with its reporting obligations (excluding fees paid to UGC’s independent auditors) and approximately $128,000 in Nasdaq listing fees. Not paying these costs and fees will represent a cost-savings for UGC following the completion of the mergers.
Following the mergers, LMI Series A common stock and LMI Series B common stock will be delisted from the Nasdaq National Market and deregistered under the Exchange Act, and LMI will cease to be a reporting company under the Exchange Act. However, we do not anticipate realizing any economic benefits associated with this

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delistment, deregistration and cessation of reporting obligations because Liberty Global will incur comparable costs to those that LMI otherwise would have incurred had the mergers not been completed.
It is anticipated that the shares of Liberty Global common stock issuable in connection with the mergers will be registered under the Exchange Act, and it is a condition to the mergers that such shares be authorized for listing on the Nasdaq National Market, subject only to official notice of issuance. It is expected that Liberty Global Series A common stock and Series B common stock will be listed on the Nasdaq National Market under the symbols “LBTYA” and “LBTYB”, respectively, the same symbols under which LMI common stock currently trades. Liberty Global will become subject to the reporting requirements of the Exchange Act contemporaneously with the completion of the mergers.
Neither LMI Merger Sub nor UGC Merger Sub has or will have any securities listed on a securities exchange or registered under the Exchange Act. Neither LMI Merger Sub nor UGC Merger Sub is or will be subject to the reporting obligations of the Exchange Act.
Effect on Net Book Value and Net Earnings
As the successor entity to LMI, Liberty Global would have experienced, on a pro forma basis, (1) an increase of $3,458,829,000 in its interest in the net book value of UGC at December 31, 2004 if the mergers had been completed at December 31, 2004 and the unaffiliated stockholders of UGC had elected to receive all stock consideration. In addition, Liberty Global would have experienced, on a pro forma basis, an increase of $179,433,000 in its interest in the net loss of UGC for the year ended December 31, 2004 if the mergers had been completed at January 1, 2004 and the unaffiliated stockholders of UGC had elected to receive all stock consideration. Such changes in Liberty Global’s interest in UGC’s net book value and net loss are the result of the increase in Liberty Global’s ownership interest in UGC that will occur if the mergers are consummated. If the mergers had been completed at December 31, 2004, Liberty Global’s ownership interest in UGC would have increased to 100% from the 53.6% owned by LMI at that date. There is no effect on LMI’s interest in UGC’s net book value or net loss as a result of the mergers. For additional information, see “Liberty Global Unaudited Condensed Pro Forma Combined Financial Statements.”
Neither LMI Merger Sub nor UGC Merger Sub has any interests, or has had any historical interests, in the net book value or net loss of UGC. Following the completion of the mergers, each of LMI Merger Sub and UGC Merger will cease to exist. As a result, neither company will ever have an interest in the net book value or net loss of UGC.
Other
If the mergers are completed, and except as described in this joint proxy statement/prospectus, none of LMI, Liberty Global, LMI Merger Sub or UGC Merger Sub has any plans or proposals that relate to or would result in:
  •  any extraordinary transaction, such as a merger, reorganization or liquidation, involving UGC or any of its subsidiaries;
 
  •  any purchase, sale or transfer of a material amount of assets of UGC or any of its subsidiaries;
 
  •  the acquisition or disposition by any person of additional securities of UGC; or
 
  •  any other material change in UGC’s corporate structure and business.
Forward-Looking Information; Certain Projections
Although UGC and LMI both provide limited annual guidance from time to time regarding selected financial and operating measures, neither, as a matter of course, makes public detailed financial projections. However, certain projections and other non-public information relating to UGC and certain of the other assets of LMI were provided to Morgan Stanley and Banc of America Securities for use by them in formulating their respective opinions summarized under “— Opinion of the Financial Advisor to the Special Committee” and “— Opinion of LMI’s Financial Advisor.” All such non-public information provided by LMI to Morgan Stanley was provided pursuant to a nondisclosure agreement entered into between LMI and Morgan Stanley in December 2004. All such non-public information provided by UGC to Banc of America was provided pursuant to a nondisclosure agreement entered into between UGC and Banc of America Securities in January 2005. The projections and other information summarized below are included in this proxy statement/prospectus solely because such information was provided to one or both of such financial advisors.
None of the financial projections summarized below were prepared with a view to public disclosure or compliance with published guidelines of the SEC or the American Institute of Certified Public Accountants regarding prospective

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financial information. Neither UGC’s nor LMI’s independent accountants have compiled, examined or reviewed any of the projections or performed any procedures with respect to such projections, and expressly disclaim any association with them. Each of the projections summarized below reflect numerous assumptions with respect to business, economic, regulatory, competitive and market conditions and other matters, all of which are difficult to predict and many of which are beyond the control of the company as to which the projections were prepared. None of the projections were prepared in anticipation of the proposed mergers and hence do not give any effect to the mergers. There can be no assurance that the assumptions made in preparing the projections summarized below will prove accurate, and the future financial results of each company for which projections are summarized below may differ materially from those reflected in such projections.
In light of the uncertainties inherent in forward-looking information of any kind, we caution against placing undue reliance on any of the information summarized below. For information concerning the variety of factors which may cause the future financial results of each company for which projections are summarized below to materially vary from such projected results, see “Information Regarding Forward-Looking Statements.” Neither UGC nor LMI intends to update or revise any of the projections summarized below to reflect circumstances existing after the date they were prepared or to reflect the occurrence of future events. None of the projections should be viewed as a representation by UGC, the Special Committee, LMI or any of their advisors or representatives that the forecasts reflected therein will be achieved.
Financial Projections Regarding UGC
In late December 2004, UGC management provided to Morgan Stanley, the financial advisor to the Special Committee, preliminary budget projections for UGC for 2005 (the Preliminary Budget) and projected debt information for UGC for year-end 2005 and 2004. In early January 2005, UGC management provided to Morgan Stanley projected selected compound annual growth rates for UGC’s broadband operations for the next five years. The projections were not provided to LMI or to any directors of UGC who are also officers of LMI. In January 2005, UGC management provided certain of the information summarized below to Banc of America Securities, the financial advisor to LMI. Although the projections summarized below were prepared by UGC management in the course of UGC’s 2005 budget process, the 2005 budget ultimately approved by the UGC board (the Approved Budget) differed in some respects from the Preliminary Budget, as indicated in the table below.
The projections provided to Morgan Stanley and summarized below were prepared internally by UGC management as of December 26, 2004, as part of UGC’s regular internal budgeting process, were preliminary, and were not reviewed by the Special Committee or the UGC board prior to the time they were provided to Morgan Stanley. The projections are based on assumptions which UGC believes were reasonable, given the information known by its management at the time the projections were prepared. Hence, UGC believes that Morgan Stanley was reasonable in relying on the provided projections as part of the mix of information considered by Morgan Stanley in connection with its analyses of the fairness of the consideration being paid to the unaffiliated stockholders of UGC.
     Budget Information for 2005
The Preliminary Budget and the Approved Budget have assumed the foreign currency exchange rates indicated below, which were the approximate 2004 year-to-date average exchange rates for the Euro and the Chilean Peso, respectively. The actual exchange rates in effect at December 31, 2004 were significantly different, as were the exchange rates used by Morgan Stanley in its analyses. Fluctuations in exchange rates relative to the U.S. dollar can significantly affect the actual financial results of UGC.
2005 Budget for UGC (1)
(RGUs in Thousands; US$’s in Millions)
                 
    Preliminary   Approved
    Budget   Budget
         
Total RGUs (2)
    12,526       12,526  
Net Gain in RGUs (2)
    1,091       1,088  
Revenue
  $ 3,184     $ 3,182  
Operating Expense
    (2,100 )     (2,106 )
             
Operating Cash Flow (“OCF”) (3)
  $ 1,084     $ 1,076  
             
OCF % Margin
    34%       34%  
Capital Expenditures
    (703 )     (703 )
             

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    Preliminary   Approved
    Budget   Budget
         
Capex as % of Revenue
    22%       22%  
Operating FCF
    381       373  
Interest, working capital and other
    (268 )     (260 )
             
Free Cash Flow (“FCF”) (4)
  $ 113     $ 113  
             
Foreign Exchange Rate Assumptions:
               
US$ per Euro 1
    1.23       1.23  
Chilean Pesos per US$1
    610       610  
 
  (1)  The Preliminary Budget and the Approved Budget presented in this table (other than RGUs) include the impact of certain acquisitions that were completed in 2004 or were expected to be completed in the first
quarter of 2005. These acquisitions include broadband businesses in Ireland (Chorus) and the content/programming businesses of ZoneVision and Canal+ NL (which has not closed as of the date of this joint proxy statement/prospectus and the closing of which is conditioned upon receipt of regulatory approval which has not yet been granted). Specifically, the Preliminary Budget and the Approved Budget include an assumption as to the completion and timing of the Canal+ NL acquisition which has not yet closed but which management assumed would close in the first quarter of 2005 for budgeting purposes. The impact of the February 2005 acquisition of broadband businesses in Slovenia (Telemach) was not accounted for in the information presented.
  (2)  A Revenue Generating Unit (“RGU”) is separately an analog cable subscriber, digital cable subscriber, direct-to-home satellite distribution subscriber, multipoint microwave (wireless) distribution system subscriber, Internet subscriber or telephony subscriber. A home may contain one or more RGUs. For example, if a residential customer in UGC’s Austrian system subscribed to its analog cable service, digital cable service, telephony service and high-speed Internet access service, that customer would constitute four RGUs. Excludes RGUs from the Chorus acquisition, which closed in December 2004.
 
  (3)  Operating Cash Flow (“OCF”) is defined by UGC as revenue less operating, selling, general and administrative expenses (excluding depreciation and amortization, impairment of long-lived assets, restructuring charges and other and stock-based compensation).
 
  (4)  Free Cash Flow (“FCF”) is defined by UGC as net cash flows from operating activities less capital expenditures. FCF is inherently difficult to predict, primarily due to uncertainties associated with working capital forecasts.
The definition of OCF set forth in footnote (3) above also reflects the definition of EBITDA, as that term is used in “Special Factors,” including in this “— Forward-Looking Information; Certain Projections.” For instance, UGC’s 2005 estimated EBITDA referred to under “Special Factors — Opinion of the Financial Advisor to the Special Committee — Comparable Company Analysis” is equal to the OCF number included in the Preliminary Budget.
Material Assumptions
The material assumptions made by UGC management in developing the Preliminary Budget and the Approved Budget, in addition to the assumptions referred to in footnote (1) above, were as follows:
        Revenue. The revenue increase compared to the fiscal 2004 result is generally based on the following assumptions:
  •  Increase in RGUs primarily driven by advanced services (Voice-over-Internet Protocol (VoIP), high-speed Internet access and digital video RGUs).
 
  •  ARPU per RGU increases for analog cable subscribers generally in line with inflation and ARPU per RGU for other products driven by expected competition. (The definition of ARPU per RGU is provided in footnote (1) to the table below.)
 
  •  A full year of operations for UGC’s acquisitions that closed during 2004 (e.g., the Noos acquisition closed on July 1, 2004), as well as the Canal+ NL acquisition assumed to close in February 2005.
        Operating Expense. The increase in estimated operating expense compared to the fiscal 2004 result is generally based on the following assumptions:
  •  Projected RGU net additions described above and corresponding marketing, customer care and support costs.

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  •  A full year of operations for UGC’s acquisitions that closed during 2004 as well as the Canal+ NL acquisition assumed to close in February 2005.
 
  •  Operating expenses as a result of higher headcount to support new service deployments and for payroll increases generally in line with inflation.
 
  •  Programming expenses generally assumed to increase in line with UGC’s increased digital offering.
        Capital Expenditures. The increase in estimated capital expenditures compared to the fiscal 2004 result is generally based on the following assumptions:
  •  Projected RGU net additions described above, in particular VoIP, and the corresponding consumer premise equipment and network costs.
 
  •  A substantial increase in two-way homes passed, principally in Central and Eastern Europe, to enable UGC to offer high-speed Internet access and VoIP.
 
  •  Capital expenditures associated with digital video expansion plans in certain markets.
 
  •  A full year of operations for UGC’s acquisitions that closed during 2004.
        Interest, Working Capital and Other. The increase in net interest, working capital and other costs compared to the fiscal 2004 result is generally based on the following assumptions:
  •  Working capital impact due to RGU net additions (e.g., increase in accounts receivable).
 
  •  Increase in interest expense associated with the debt financing of acquisitions that closed during 2004.
 
  •  An increase in underlying base rates (principally Euribor) on subsidiary credit facilities associated with a higher interest rate environment, offset by a reduction in credit spreads due to refinancings that closed during 2004.
Net Debt for 2004 and 2005
UGC management provided to Morgan Stanley net debt information for 2005 and 2004 of $3,483 million and $2,986 million, respectively, which represent the estimated amounts as of December 31, 2005 and 2004, respectively, of the sum of total debt less total cash and cash equivalents. These estimates were derived using the US$ per Euro 1 exchange rate of 1.23 listed in the table above, which was significantly different from the exchange rate in effect at December 31, 2004 and the exchange rate used by Morgan Stanley in its analyses.
      Compound Annual Growth Rates
UGC management provided to Morgan Stanley and Banc of America Securities the following compound annual growth rates for UGC’s broadband operations, on a consolidated basis, for the five year period 2004-2009. These estimates were also derived using the US$ per Euro 1 exchange rate of 1.23 listed in the table above, which was significantly different from the exchange rate in effect at December 31, 2004 and the exchange rate used by Morgan Stanley in its analyses.
         
    UGC Consol.
     
RGUs
    5%-7%  
ARPU per RGU (1)
    6%-8%  
Revenue
    12%-14%  
OCF
    18%-20%  
Capex (% of Revenue)
    8%-12%  
 
(1)  Average Revenue per Revenue Generating Unit (ARPU per RGU) compound annual growth rate is calculated from the projected annual broadband revenue for each year in the period, divided by the average of the opening and closing RGUs for that year.
Material Assumptions
In developing the foregoing ranges of compound annual growth rates for UGC’s broadband operations, on a consolidated basis, for the five year period 2004-2009, UGC management used the same 2005 budget assumptions

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described under “— Budget Information for 2005 — Material Assumptions” above, as well as the following assumptions:
        RGUs. The projected range of RGU compound annual growth rates is generally based on the assumption that growth will be primarily driven by advanced services (VoIP, high-speed Internet access and digital video RGUs), due to UGC’s marketing efforts in general and an increase in homes serviceable for these advanced services (e.g., two-way homes passed, Internet homes serviceable and telephony homes serviceable, etc.), as well as an increase in the corresponding penetration levels for these services from existing serviceable homes.
 
        ARPU per RGU. The projected range of ARPU per RGU compound annual growth rates is generally based on the following assumptions:
  •  Increase in ARPU per RGU due primarily to the projected increase in advanced service RGUs.
 
  •  ARPU per RGU increases for analog cable subscribers generally in line with inflation.
        Revenue. The projected range of revenue compound annual growth rates is generally based on the assumed increase in RGUs and ARPU per RGU mentioned above.
 
        OCF. The projected range of OCF compound annual growth rates is generally based on the following assumptions:
  •  The incremental cash flow associated with the anticipated higher penetration of the advanced service RGUs.
 
  •  Operating expenses in general will increase at a slower rate than revenue growth.
        Capital Expenditures. The range in capital expenditures as a percent of revenue is generally based on the following assumptions:
  •  The vast majority of the upgrade costs associated with increasing the number of homes serviceable to offer the advanced services will be substantially completed prior to 2009. Management anticipates that capital expenditures will be above the forecasted range of 8% - 12% until approximately 2009.
 
  •  Consumer premise equipment costs will continue to decline in line with historical trends.
The projections set forth above should be read together with UGC’s historical financial statements and other financial information and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in UGC’s Annual Report on Form 10-K/A for the year ended December 31, 2004, which is incorporated by reference into this joint proxy statement/prospectus. See “Additional Information — Where You Can Find More Information.”
Financial Projections Regarding J-COM
LMI management provided to Morgan Stanley in late December 2004 and to Banc of America Securities in early January 2005 forward-looking information for J-COM, which was included in the following presentations: (1) J-COM’s budget for 2005 in the form presented to J-COM’s board of directors on December 16, 2004; (2) J-COM’s medium term business plan for the three years ended 2007, dated December 16, 2004; and (3) a slide presentation, dated December 13, 2004 (the IPO Pricing Slides), prepared by J-COM’s Joint Global Coordinators in connection with pricing talks on J-COM’s then forthcoming IPO (which priced on March 14, 2005 and closed on March 23, 2005). The 2005 budget was prepared internally by J-COM management as part of J-COM’s regular budget process and was approved by J-COM’s board of directors on December 16, 2004. The medium term business plan, which was also approved by J-COM’s board of directors on December 16, 2004, was prepared as part of J-COM’s application to the JASDAQ Securities Exchange, Inc. in connection with J-COM’s IPO. The financial projections included in the IPO Pricing Slides were derived by the Joint Global Coordinators from information provided by J-COM management. None of the J-COM 2005 budget, medium term plan or the IPO Pricing Slides was provided to UGC or to any member of the Special Committee. LMI did not participate in the preparation of any of the projections summarized below, although two of its executive officers serve as directors of J-COM and they reviewed and approved the 2005 budget and medium term plan in that capacity. J-COM did not participate in any discussions with or presentations made by Morgan Stanley or Banc of America Securities, nor did J-COM participate in preparing this joint proxy statement/prospectus or summarizing the projections set forth below for inclusion in this joint proxy statement/prospectus.
The US dollar figures in the tables below are based on an exchange rate of 0.00975 US$ per 1 yen, which was the exchange rate used by Morgan Stanley for purposes of its valuation of J-COM. Banc of America Securities used an exchange rate of 0.0098 US$ per 1 yen.

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Projections from J-COM Pricing Slides
(In millions)
                                                                 
    2005   2006   2007   2008
                 
    ¥   $   ¥   $   ¥   $   ¥   $
                                 
Revenue
    186,077       1,814       214,556       2,092       246,901       2,407       276,284       2,694  
EBITDA
    74,670       728       88,166       860       106,384       1,037       123,258       1,202  
Capex
    56,385       550       63,199       616       65,621       640       60,296       588  
Unlevered Free Cash Flow(1)
    18,226       178       19,484       190       29,721       290       44,549       434  
 
(1)  Unlevered Free Cash Flow is determined before deduction of interest expense.
Projections from J-COM 2005 Budget and Medium Term Plan
(In millions)
                                                 
    2005   2006   2007
             
    ¥   $   ¥   $   ¥   $
                         
Revenue
    185,297       1,807       214,556       2,092       246,901       2,407  
EBITDA
    74,280       724       88,166       860       106,384       1,037  
Capex
    58,410       569       64,100       625       66,532       649  
Adjusted Capex(1)
    39,242       383       43,482       424       42,685       416  
Free Cash Flow
    2,283       22       13,223       129       22,758       222  
 
(1)  Adjusted Capex excludes assets acquired under capitalized lease arrangements.
J-COM defines Free Cash Flow as cash provided by operating activities less capital expenditures. J-COM includes in its Free Cash Flow both interest expense and assets acquired under capitalized lease arrangements as deductions.
In addition to the difference between Free Cash Flow and Unlevered Free Cash Flow noted above, the projections for 2005 included in the J-COM 2005 budget and medium term business plan differed from those measures in the IPO Pricing Slides due to changes in the expected timing of anticipated acquisitions in 2005 and for the timing of interest payments, income taxes and capital expenditures. In the case of Free Cash Flow and Unlevered Free Cash Flow for 2006 and 2007, those measures also differed because of changes to assumptions regarding the timing and amount of capital expenditures and income taxes.
Material Assumptions
The material assumptions made by J-COM management in developing the foregoing projections were as follows:
  •  Cable television subscriber growth is driven by take up of digital services, new content, acceptance of video-on-demand and bundling.
 
  •  Internet subscriber growth is driven by adoption of 30MBps service, new content and bundling.
 
  •  Telephony subscriber growth is driven by build out of network and bundling.
 
  •  External price competition continues at current levels (no price cutting) and J-COM’s prices remain largely constant.
 
  •  Operating costs contain a significant fixed cost element and decrease as percentage of revenue as more services are introduced to and accepted by subscribers and more customers subscribe to bundled services.
 
  •  Capital expenditures grows in tandem with subscriber growth. Customer premise equipment costs assumed to decline gradually over time as a result of unit price decreases and improved efficiencies in utilization of equipment.
Financial Projections Regarding Other Assets of LMI
Morgan Stanley and Banc of America Securities also used for purposes of their respective analyses forward-looking information for 2005 for the following companies in which LMI has an investment: Jupiter Programming Co., Ltd (50% ownership), Liberty Cablevision of Puerto Rico Ltd. (100% ownership) and Pramer S.C.A (100% ownership).

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Morgan Stanley also used year-end forecasts for 2004 for Liberty Cablevision of Puerto Rico, which are included below. None of the projections summarized below were provided to UGC or to any member of the Special Committee.
Jupiter Programming Co., Ltd.
LMI management provided slides from a JPC board of directors meeting on December 14, 2004, which included the following 2005 budget numbers prepared by JPC management. The 2005 budget was prepared internally by JPC management as part of JPC’s regular budget process and was approved by JPC’s board of directors. LMI did not participate in the preparation of the following 2005 budget numbers, although two of its executive officers serve as directors of JPC and they reviewed and approved the 2005 budget numbers in that capacity. The US dollar figures in the table below are based on an exchange rate of 0.00975 US$ per 1 yen.
JPC 2005 Budget
(In millions)
                 
    ¥   $
         
Revenue
    77,035       751  
Operations Costs
    64,573       630  
EBITDA
    12,462       121  
Pre-Tax Income
    7,072       69  
Material Assumptions. The material assumptions made by JPC management in developing the foregoing projections were as follows:
  •  Revenues and EBITDA are assumed to derive primarily from JPC’s 70% owned SHOP channel. Revenue growth for SHOP channel assumes better penetration and increased sales per customer, offset by increased sales, distribution, fulfillment, telemarketing and administrative costs.
 
  •  Subscription and other revenue growth is realized at other established channels, offset by anticipated losses in new channel investments.
Liberty Cablevision of Puerto Rico Ltd.
LMI management provided slides prepared by Liberty Cablevision of Puerto Rico management for a meeting of Liberty Cablevision of Puerto Rico’s lenders on its $140 million senior secured credit facilities, held on November 30, 2004, which included the following projections for 2005 and year-end 2004. The actual results for year-end 2004 differed from the year-end 2004 projections, as indicated in the table below.
Liberty Cablevision of Puerto Rico
(In millions)
                         
    Projections   Actual
         
    2005   2004   2004
             
Revenue
  $ 97.317     $ 79.933     $ 79.410  
EBITDA
    34.126       26.652       26.299  
Free Cash Flow
    11.625       3.543       2.590  
Capex
    22.500       23.109       23.709  
Liberty Cablevision of Puerto Rico defines Free Cash Flow as EBITDA minus capital expenditures.
Material Assumptions. The material assumptions made by management of Liberty Cablevision of Puerto Rico in developing the 2005 and year-end 2004 projections were as follows:
  •  Revenue growth is driven primarily by an increase in Internet subscribers and VoIP subscribers. The growth in Internet and VoIP subscribers is being driven by Liberty Cablevision of Puerto Rico’s ability to provide cost savings to its bundled customers by virtue of its ability to deliver a number of services over a single predominantly fixed cost base network.
 
  •  Take up of bundled services drives EBITDA and Free Cash Flow growth due to receipt of incremental revenue over predominantly fixed cost base network.

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  •  Capital expenditures are based on assumed subscriber growth, as these expenses are driven by cost of customer premise equipment. Also assumes expansion of existing network.
Comparison of 2004 Actual versus Projected.
  •  Actual 2004 revenue was lower than 2004 projected revenue primarily as a result of a lower number of year-end video subscribers than projected.
 
  •  Actual 2004 EBITDA was lower than 2004 projected EBITDA primarily as a result of the lower number of year-end video subscribers and increased marketing expenses associated with Internet access and VoIP services.
 
  •  Actual 2004 capital expenditures were higher than 2004 projected capital expenditures primarily as a result of a higher than expected number of Internet and VoIP installations.
Pramer S.C.A.
LMI management provided slides prepared by Pramer management for a December 2004 presentation to LMI management, which included the following 2005 budget numbers.
2005 Pramer Budget
(In millions)
         
Revenue
  $ 42.194  
EBITDA
    4.910  
Free Cash Flow
    1.356  
Pramer defines Free Cash Flow as EBITDA minus working capital changes, income taxes, capital expenditures, investments, interest expense and loan amortization.
Material Assumptions. The material assumptions made by Pramer management in developing the foregoing projections were as follows:
  •  Revenue is primarily driven by increase in pay television customers as the economies in Latin America continue to recover and expand.
 
  •  EBITDA declines primarily due to increase in salaries, satellite and production costs.
 
  •  Free Cash Flow growth is driven by positive working capital changes, reduced taxes and lower bank financing costs.

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RISK FACTORS
In addition to the other information contained in, incorporated by reference in or included as an appendix to this joint proxy statement/prospectus, you should carefully consider the following risk factors in deciding whether to vote to approve the merger proposal.
Factors Relating to the Mergers
Fluctuations in market prices may cause the value of the shares of Liberty Global common stock that you receive in the mergers to be less than the value of your shares of LMI common stock or UGC common stock prior to the mergers. The ratios at which shares of LMI common stock and shares of UGC common stock will be converted into shares of Liberty Global common stock in the mergers are fixed, and there will be no adjustment to these ratios for changes in the market price of LMI common stock or UGC common stock. Accordingly, the value of the stock consideration to be received by holders of LMI common stock and holders of UGC common stock upon completion of the mergers is not ascertainable at this time and will ultimately depend upon the market prices of LMI common stock and UGC common stock at the effective time of the mergers. Those market prices may be higher or lower than the market prices of those shares on the date on which the merger agreement was executed, the date of this joint proxy statement/prospectus or the date on which the LMI stockholders and UGC stockholders vote on the merger proposal. Neither LMI nor UGC is permitted to “walk away” from the mergers or resolicit the vote of its stockholders solely because of changes in the market price of either party’s common stock at any time prior to the effective time of the mergers. Also, there is no “collar” or other adjustment mechanism that will ensure stockholders receive merger consideration with a minimum or maximum value.
At the time UGC stockholders make their stock election or cash election, they may not know if 0.2155 of a share of Liberty Global common stock will be worth more or less than the cash election amount of $9.58 per share. To make a valid stock election or cash election, UGC stockholders must submit their form of election and related UGC shares to the exchange agent by the election deadline. The election deadline is scheduled for 5:00 p.m., New York time, on [                    ], 2005. We will extend the election deadline to no later than 5:00 p.m., New York time, on the second business day prior to the completion of the mergers if we anticipate that the mergers will not occur within four business days after the initial election deadline. As the initial trading price of the shares of Liberty Global Series A common stock is expected to approximate the trading price of the LMI Series A common stock immediately prior to the completion of the mergers, there can be no assurance that the value of the stock consideration will not fluctuate, with the trading price of the LMI Series A common stock, between the submission of a form of election and the completion of the mergers. Hence, while UGC stockholders will know the value of the stock consideration at the time they submit their form of election, there can be no assurance that the stock consideration will not have a lower value when the mergers are completed and the Liberty Global Series A common stock is first made available to UGC stockholders.
UGC stockholders who make the cash election may not have all of their UGC shares exchanged for cash, and the average per share value of the merger consideration they receive could be less than $9.58. The merger agreement limits the amount of cash payable to UGC stockholders who make the cash election to no more than 20% of the aggregate value of the merger consideration payable to UGC stockholders who are not “Permitted Holders” within the meaning of UGC’s indenture with respect to its 13/4% convertible senior notes due 2024, which we refer to as the “cash threshold amount.” The term “Permitted Holders” is generally defined to include LMI and Liberty and the Chief Executive Officer and each member of the board of directors of each of UGC, LMI and Liberty as of April 1, 2004 and each of their respective affiliates. If the cash threshold amount is exceeded, those UGC stockholders making the cash election will have the number of their shares of UGC stock as to which they made the cash election reduced by a pro rata amount, and will receive the stock consideration for those shares which are not exchanged for the cash consideration. Depending on the market price of the Liberty Global Series A common stock immediately after the mergers are completed, UGC stockholders who made only the cash election but who receive stock consideration for some of their shares due to proration may obtain aggregate consideration that is worth less than $9.58 per share on a blended basis. See “The Transaction Agreements — Merger Agreement — UGC Stockholders Making Stock and Cash Elections; Proration.”
Once UGC stockholders deliver their shares of UGC common stock to the exchange agent with their form of election, they will not be able to sell those shares unless they revoke their election prior to the election deadline. UGC stockholders may submit a form of election to the exchange agent at any time after the mailing of the joint proxy statement/prospectus and prior to the election deadline. To be valid, an election must be accompanied by the UGC shares as to which the election has been made. Once the exchange agent is in receipt of the UGC shares, they will not be available for settlement purposes in a trade unless and until the person who submitted the election and the shares revokes the election, prior to the election deadline, by written notice to the exchange agent.

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Liberty Global may fail to realize the anticipated benefits of the mergers. The success of the mergers will depend in part on the ability of Liberty Global to realize the anticipated synergies and growth opportunities from combining the two companies. In addition, the market may not quickly, if ever, eliminate or reduce the holding company discount that we believe has suppressed the historical trading price of LMI common stock. Any failure to realize the anticipated benefits of the mergers may adversely affect the stock price of Liberty Global.
Significant transaction costs will be incurred as a result of the mergers. LMI and UGC expect to incur significant one-time transaction costs, currently estimated to be approximately $22 million, related to the mergers. These transaction costs include investment banking, legal and accounting fees and expenses of approximately $13.8 million and SEC filing fees, printing expenses, mailing expenses and other related charges of approximately $6.5 million. LMI and UGC may also incur additional unanticipated transaction costs in connection with the mergers. A portion of the transaction costs related to the mergers, estimated to be approximately $18 million, will be incurred regardless of whether the mergers are completed. LMI and UGC will each pay its own transaction costs incurred, except that they will share equally all costs associated with printing and mailing this joint proxy statement/prospectus.
We are parties to pending class action lawsuits relating to the UGC merger. We are parties to twenty-two lawsuits filed by third parties seeking monetary damages or injunctive relief, or both, in connection with the UGC merger. Predicting the outcome of these lawsuits is difficult; and an adverse judgment for monetary damages could have a material adverse effect on the operations of Liberty Global after the mergers, a preliminary injunction could delay or jeopardize the completion of the mergers and an adverse judgment granting injunctive relief could permanently enjoin the consummation of the mergers.
LMI’s potential indemnity liability to Liberty if the spin off is treated as a taxable transaction as a result of the mergers could materially adversely affect Liberty Global’s prospects and financial condition. LMI entered into a tax sharing agreement with Liberty in connection with its spin off from Liberty on June 7, 2004. In the tax sharing agreement, LMI agreed to indemnify Liberty and its subsidiaries, officers and directors for any loss, including any adjustment to taxes of Liberty, resulting from (1) any action or failure to act by LMI or any of LMI’s subsidiaries following the completion of the spin off that would be inconsistent with or prohibit the spin off from qualifying as a tax-free transaction to Liberty and to Liberty’s stockholders under Section 355 of the Code or (2) any breach of any representation or covenant given by LMI or one of LMI’s subsidiaries in connection with any tax opinion delivered to Liberty relating to the qualification of the spin off as a tax-free distribution described in Section 355 of the Code. LMI’s indemnification obligations to Liberty and its subsidiaries, officers and directors are not limited in amount or subject to any cap. If LMI is required to indemnify Liberty and its subsidiaries, officers and directors under the circumstances set forth in the tax sharing agreement, LMI may be subject to substantial liabilities. For more information about the tax sharing agreement, see “Appendix A: Information Concerning Liberty Media International, Inc. — Part 2: Certain Relationships and Related Party Transactions — Agreements Between LMI and Liberty — Tax Sharing Agreement.”
It is a non-waivable condition to the mergers that LMI and Liberty Global shall have received the opinion of Skadden, Arps, Slate, Meagher & Flom LLP or another nationally recognized law firm reasonably acceptable to UGC (acting with the approval of the Special Committee), dated the closing date of the mergers, to the effect that, for U.S. federal income tax purposes, provided that the spin off would otherwise have qualified as a tax-free distribution under Section 355 of the Code to Liberty and the Liberty stockholders, the mergers should not cause the spin off to fail to qualify as a tax-free distribution to Liberty under Section 355(e) of the Code. In rendering such opinion, Skadden, Arps, Slate, Meagher & Flom LLP or such other alternate firm may rely upon factual representations and covenants, including those contained in certificates of officers of LMI, Liberty Global and UGC, and customary factual assumptions. Any inaccuracy in the representations, covenants and assumptions upon which such tax opinion is based could alter the conclusions reached in such opinion. Neither LMI nor Liberty Global have requested a ruling from the Internal Revenue Service as to the effect, if any, that the mergers would have on the spin off. Therefore, there can be no assurance that the Internal Revenue Service will agree with the conclusions in such opinion.
Factors Relating to Overseas Operations and Regulations
The businesses of LMI and UGC are, and the businesses of Liberty Global will be, conducted almost exclusively outside of the United States, which gives rise to numerous operational risks. The businesses of LMI and UGC are, and the businesses of Liberty Global will be, operated almost exclusively in countries other than the United States and are thereby subject to the following inherent risks:
  •  longer payment cycles by customers in foreign countries that may increase the uncertainty associated with recoverable accounts;

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  •  difficulties in staffing and managing international operations;
 
  •  economic instability;
 
  •  potentially adverse tax consequences;
 
  •  export and import restrictions, tariffs and other trade barriers;
 
  •  increases in taxes and governmental royalties and fees;
 
  •  involuntary renegotiation of contracts with foreign governments;
 
  •  changes in foreign and domestic laws and policies that govern operations of foreign-based companies; and
 
  •  disruptions of services or loss of property or equipment that are critical to overseas businesses due to expropriation, nationalization, war, insurrection, terrorism or general social or political unrest.
LMI and UGC are, and Liberty Global is expected to be, exposed to potentially volatile fluctuations of the U.S. dollar (their functional currency) against the currencies of their operating subsidiaries and affiliates. Any increase (decrease) in the value of the U.S. dollar against any foreign currency that is the functional currency of an operating subsidiary or affiliate of LMI or UGC, and, following the mergers, Liberty Global, will cause the parent company to experience unrealized foreign currency translation losses (gains) with respect to amounts already invested in such foreign currencies. In addition, LMI, UGC and their operating subsidiaries and affiliates are, and Liberty Global and its operating subsidiaries and affiliates are expected to be, exposed to foreign currency risk to the extent that they enter into transactions denominated in currencies other than their respective functional currencies, such as investments in debt and equity securities of foreign subsidiaries, equipment purchases, programming costs, notes payable and notes receivable (including intercompany amounts) that are denominated in a currency other than their own functional currency. Changes in exchange rates with respect to these items will result in unrealized (based upon period-end exchange rates) or realized foreign currency transaction gains and losses upon settlement of the transactions. In addition, LMI and UGC are, and Liberty Global is expected to be, exposed to foreign exchange rate fluctuations related to operating subsidiaries’ monetary assets and liabilities and the financial results of foreign subsidiaries and affiliates when their respective financial statements are translated into U.S. dollars for inclusion in their consolidated financial statements. Cumulative translation adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. As a result of foreign currency risk, LMI, UGC and, following the mergers, Liberty Global may experience economic loss and a negative impact on earnings and equity with respect to their holdings solely as a result of foreign currency exchange rate fluctuations. The primary exposure to foreign currency risk for LMI and UGC is, and for Liberty Global is expected to be, to the euro due to the percentage of the U.S. dollar revenue of LMI and UGC that is derived, and following the mergers is expected to be derived by Liberty Global, from countries where the euro is the functional currency. In addition, the operating results and financial condition of LMI and UGC are, and of Liberty Global following the mergers are expected to be, significantly impacted by changes in the exchange rates for the Japanese yen, Chilean peso and, to a lesser degree, other local currencies in Europe. In the past, LMI and UGC generally have not, and Liberty Global following the mergers is not expected to, enter into derivative transactions that are designed to reduce their long-term exposure to foreign currency exchange risk.
The businesses of LMI and UGC are, and the businesses of Liberty Global will be, subject to risks of adverse regulation by foreign governments. The businesses of LMI and UGC are, and the businesses of Liberty Global will be, subject to the unique regulatory regimes of the countries in which they operate. Cable and telecommunications businesses are subject to licensing eligibility rules and regulations, which vary by country. The provision of telephony services requires licensing from, or registration with, the appropriate regulatory authorities and entrance into interconnection arrangements with the incumbent phone companies. It is possible that countries in which LMI, UGC and, following the mergers, Liberty Global operate may adopt laws and regulations regarding electronic commerce which could dampen the growth of the Internet access services being offered and developed by these businesses. Programming businesses are subject to regulation on a country by country basis, including programming content requirements, requirements to carry specified programming, service quality standards, price controls and ownership restrictions. Consequently, such businesses must adapt their ownership and organizational structure as well as their services to satisfy the rules and regulations to which they are subject. A failure to comply with these rules and regulations could result in penalties, restrictions on such business or loss of required licenses.
Businesses that offer multiple services, such as video distribution as well as Internet access and telephony, or both video distribution and programming content, are facing increased regulatory review from competition authorities in several countries in which LMI and UGC operate, and, following the mergers, Liberty Global will operate, with respect to their businesses and proposed business combinations. For example, the European Union and the regulatory authorities in several countries in which LMI and UGC do business, and in which Liberty Global will do business, are considering

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what access rights, if any, should be afforded to third parties for use of existing cable television networks. If third parties were to be granted access to the distribution infrastructure of LMI and UGC, and, following the mergers, Liberty Global, for the delivery of video, audio, Internet or other services, those providers could compete with services similar to those which the businesses of LMI and UGC offer, and, following the mergers, Liberty Global will offer, which could lead to significant price competition and loss of market share.
LMI, UGC and, following the mergers, Liberty Global may determine to acquire additional communications companies. These acquisitions may require the approval of governmental authorities, which can block, impose conditions on or delay an acquisition.
LMI, UGC and, following the mergers, Liberty Global cannot be certain that they will be successful in acquiring new businesses or integrating acquired businesses with their existing operations. Historically, the businesses of LMI and UGC have grown, in part, through selective acquisitions that enabled them to take advantage of existing networks, local service offerings and region-specific management expertise. LMI, UGC and, following the mergers, Liberty Global may seek to continue growing their businesses through acquisitions in selected markets. Their ability to acquire new businesses may be limited by many factors, including debt covenants, availability of financing, the prevalence of complex ownership structures among potential targets and government regulation. Even if they were successful in acquiring new businesses, the integration of new businesses may present significant challenges, including: realizing economies of scale in interconnection, programming and network operations; eliminating duplicative overheads; and integrating networks, financial systems and operational systems. We cannot assure you that LMI, UGC and, following the mergers, Liberty Global will be successful in acquiring new businesses or realizing the anticipated benefits of any completed acquisition.
In addition, we anticipate that most, if not all, companies acquired by LMI, UGC or, following the mergers, Liberty Global will be located outside the United States. Foreign companies may not have disclosure controls and procedures or internal controls over financial reporting that are as thorough or effective as those required by U.S. securities laws. While LMI, UGC and, following the mergers, Liberty Global intend to conduct appropriate due diligence and to implement appropriate controls and procedures as they integrate acquired companies, they may not be able to certify as to the effectiveness of these companies’ disclosure controls and procedures or internal controls over financial reporting until they have fully integrated them.
LMI and UGC are, and Liberty Global will be, subject to the risk of revocation or loss of their telecommunications and media licenses. In certain operating regions, the services provided by the businesses of LMI, UGC and, following the mergers, Liberty Global require receipt of a license from the appropriate national, provincial and/or local regulatory authority. In those regions, regulatory authorities may have significant discretion in granting licenses, including the term of the licenses, and are often under no obligation to renew them when they expire. The breach of a license or applicable law, even if inadvertent, can result in the revocation, suspension, cancellation or reduction in the term of a license or the imposition of fines. In addition, regulatory authorities may grant new licenses to third parties, resulting in greater competition in territories where the businesses of LMI, UGC and, following the mergers, Liberty Global may already be licensed. In order to promote competition, licenses may also require that third parties be granted access to the bandwidth, frequency capacity, facilities or services of LMI, UGC and, following the mergers, Liberty Global. There can be no assurance that LMI or UGC or, following the mergers, Liberty Global will be able to obtain or retain any required license, or that any renewal of a required license will not be on less favorable terms.
LMI, UGC and, following the mergers, Liberty Global may have to pay U.S. taxes on earnings of certain of their foreign subsidiaries regardless of whether such earnings are actually distributed to them, and they may be limited in claiming foreign tax credits; since substantially all of their revenue is generated through their foreign investments, these tax risks could have a material adverse impact on their effective income tax rate, financial condition and liquidity. Certain foreign corporations in which LMI and UGC have, and in which Liberty Global will have, interests particularly those in which they have or will have controlling interests, are considered to be “controlled foreign corporations” under U.S. tax law. In general, their pro rata share of certain income earned by their subsidiaries that are controlled foreign corporations during a taxable year when such subsidiaries have current or accumulated earnings and profits will be included in their income when the income is earned, regardless of whether the income is distributed to them. This income, typically referred to as “Subpart F income,” generally includes, but is not limited to, such items as interest, dividends, royalties, gains from the disposition of certain property, certain currency exchange gains in excess of currency exchange losses, and certain related party sales and services income. In addition, a U.S. stockholder of a controlled foreign corporation may be required to include in income its pro rata share of the controlled foreign corporation’s increase for the year in current or accumulated earnings and profits (other than Subpart F income) invested in U.S. property, regardless of whether the U.S. stockholder received any actual cash distributions from the controlled foreign corporation. Since LMI and UGC are investors in, and Liberty Global will be an investor in, foreign

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corporations, they could have significant amounts of Subpart F income. Although they intend to take reasonable tax planning measures to limit their tax exposure, we cannot assure you that they will be able to do so or that any of such measures will not be challenged.
In general, a U.S. corporation may claim a foreign tax credit against its U.S. federal income taxes for foreign income taxes paid or accrued. A U.S. corporation may also claim a credit for foreign income taxes paid or accrued on the earnings of certain foreign corporations paid to the U.S. corporation as a dividend. The ability of LMI, UGC and, following the mergers, Liberty Global to claim a foreign tax credit for dividends received from their foreign subsidiaries is subject to various limitations. Some of their businesses are located in countries with which the United States does not have income tax treaties. Because LMI and UGC lack, and Liberty Global will lack, treaty protection in these countries, they may be subject to high rates of withholding taxes on distributions and other payments from their businesses and may be subject to double taxation on their income. Limitations on the ability of LMI, UGC and, following the mergers, Liberty Global to claim a foreign tax credit, their lack of treaty protection in some countries, and their inability to offset losses in one foreign jurisdiction against income earned in another foreign jurisdiction could result in a high effective U.S. federal income tax rate on their earnings. Since substantially all of their revenue is generated abroad, including in jurisdictions that do not have tax treaties with the United States, these risks are proportionately greater for them than for companies that generate most of their revenue in the United States or in jurisdictions that have such treaties.
Factors Relating to Technology and Competition
Changes in technology may limit the competitiveness of and demand for our services, which may adversely impact the business and stock value of LMI, UGC, and following the mergers, Liberty Global. Technology in the video, telecommunications and data services industries is changing rapidly. This significantly influences the demand for the products and services that are offered by the businesses of LMI, UGC and, following the mergers, Liberty Global. The ability to anticipate changes in technology and consumer tastes and to develop and introduce new and enhanced products on a timely basis will affect the ability of LMI, UGC, and, following the mergers, Liberty Global to continue to grow, increase their revenue and number of subscribers and remain competitive. New products, once marketed, may not meet consumer expectations or demand, can be subject to delays in development and may fail to operate as intended. A lack of market acceptance of new products and services which LMI, UGC and, following the mergers, Liberty Global may offer, or the development of significant competitive products or services by others, could have a material adverse impact on the revenue, growth and stock price of LMI, UGC and, following the mergers, Liberty Global. Alternatively, if consumer demand for new services in a specific country or region exceeds our expectations, meeting that demand could overburden our infrastructure, which could result in service interruptions and a loss of customers.
LMI and UGC operate, and, following the mergers, Liberty Global will operate, in increasingly competitive markets, and there is a risk that LMI, UGC and, following the mergers, Liberty Global will not be able to effectively compete with other service providers. The markets for cable television, high-speed Internet access and telecommunications in many of the regions in which LMI and UGC operate, and Liberty Global will operate, are highly competitive and highly fragmented. In the provision of video services, LMI and UGC face, and Liberty Global will face, competition from other cable television service providers, direct-to-home satellite service providers, digital terrestrial television broadcasters and video over asymmetric digital subscriber line providers, among others. Their operating businesses in The Netherlands, France and Japan are facing increasing competition from video services provided by or over the networks of incumbent telecommunications operators. In the provision of telephone services, LMI and UGC face, and Liberty Global will face, competition from the incumbent telecommunications operators in each country in which they operate. These operators have substantially more experience in providing telephone services and have greater resources to devote to the provision of telephone services. In addition, in many countries, LMI and UGC face, and Liberty Global will face, competition from wireless telephone providers, facilities-based and resale telephone operators, voice over Internet protocol providers and other providers. In the provision of Internet access services and online content, LMI and UGC face, and Liberty Global will face, competition from incumbent telecommunications companies and other telecommunications operators, other cable-based Internet service providers, non-cable based Internet service providers, Internet portals and satellite, microwave and other wireless providers. The Internet services offered by these competitors include both traditional dial-up access services and high-speed access services. Digital subscriber line is a technology that provides high-speed Internet access over traditional telephone lines. Both incumbent and alternative providers offer digital subscriber line services. We expect digital subscriber line to be an increasingly strong competitor in the provision of Internet services.
The market for programming services is also highly competitive. Programming businesses compete with other programmers for distribution on a limited number of channels. Once distribution is obtained, program offerings must

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then compete for viewers and advertisers with other programming services as well as with other entertainment media, such as home video, online activities and movies.
We expect the level and intensity of competition to increase in the future from both existing competitors and new market entrants as a result of changes in the regulatory framework of the industries in which LMI and UGC operate, and in which Liberty Global will operate, the influx of new market entrants and strategic alliances and cooperative relationships among industry participants. Increased competition may result in increased customer churn, reduce the rate of customer acquisition and lead to significant price competition, in each case resulting in decreases in cash flows, operating margins and profitability. The inability to compete effectively may result in the loss of subscribers, and revenue and the stock price of LMI and UGC, and, following the mergers, Liberty Global, may suffer.
LMI, UGC and, following the mergers, Liberty Global may not be able to obtain attractive programming for their digital video services, thereby lowering demand for their services. LMI and UGC rely, and, following the mergers, Liberty Global will rely, on programming suppliers for the bulk of their programming content. They may not be able to obtain sufficient high-quality programming for their digital video services on satisfactory terms or at all in order to offer compelling digital video services. This may reduce demand for their services, thereby lowering their future revenue. It may also limit their ability to migrate customers from lower tier programming to higher tier programming, thereby inhibiting their ability to execute their business plans. Furthermore, LMI, UGC and, following the mergers, Liberty Global may not be able to obtain attractive country-specific programming for video services. This could further lower revenue and profitability. In addition, must-carry requirements may consume channel capacity otherwise available for other services.
Some of the operating businesses of LMI, UGC and, following the mergers, Liberty Global depend upon third parties for the distribution of their products and services. In certain operating regions, the businesses of LMI, UGC and, following the mergers, Liberty Global require access to utility poles, roadside conduits and leased fiber that interconnect their headends and/or connect their headends to telecommunications facilities of third parties. This infrastructure is, in some cases, owned by regional utility companies or other third party administrators, and access to the infrastructure is licensed to the businesses of LMI, UGC and, following the mergers, Liberty Global. In other operating regions, the transmission of cable programming content to regional headend facilities is accomplished via communications satellites owned by third parties, who, in some cases, are competitors. We cannot assure you that the businesses of LMI, UGC and, following the mergers, Liberty Global will be able to renew any existing access agreements with these third parties or enter into new agreements for additional access rights, which may be necessary for the expansion of their businesses in these regions. Any cancellation, delay or interruption in these access rights would disrupt the delivery of the products and services of LMI, UGC and, following the mergers, Liberty Global to customers in the affected regions. In addition, the failure to obtain additional access rights from such third parties could preclude expansionary efforts in these operating regions. We also cannot assure you that any alternative distribution means will be available in these regions, on reasonable terms or at all.
Following the mergers, Liberty Global and Liberty may compete for business opportunities. LMI’s former parent company, Liberty, has interests in various U.S. programming companies that have subsidiaries or controlled affiliates that own or operate foreign programming services that may compete with the programming services to be offered by Liberty Global’s businesses. In addition, Liberty may seek to expand its foreign programming services to capitalize on the significant growth potential presented by the international cable market. As a result of these expansionary efforts, Liberty Global’s programming services may find themselves in direct competition with those of Liberty. Liberty Global has no rights in respect of international programming opportunities developed by or presented to the subsidiaries or controlled affiliates of Liberty’s U.S. programming companies and the pursuit of these opportunities by such subsidiaries or affiliates may adversely affect the interests of Liberty Global and its stockholders. Since Liberty Global will have overlapping directors with Liberty, the pursuit of these opportunities could create, or appear to create, potential conflicts of interest. See “Management of Liberty Global.”
Factors Relating to Certain Financial Matters
The liquidity and value of the interests of LMI, UGC and, following the mergers, Liberty Global in their subsidiaries and affiliates may be adversely affected by stockholder agreements and similar agreements to which they are a party. LMI and UGC own, and Liberty Global will own, equity interests in a variety of international broadband distribution and video programming businesses. Certain of these equity interests are, or will be, held pursuant to stockholder agreements, partnership agreements and other instruments and agreements that contain provisions that affect the liquidity, and therefore the realizable value, of those interests. Most of these agreements subject, or will subject, the transfer of such equity interests to consent rights or rights of first refusal of the other stockholders or partners. In certain cases, a change in control of the company or the subsidiary holding the equity interest will give rise to rights or

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remedies exercisable by other stockholders or partners. Some of the subsidiaries and affiliates of LMI and UGC and, following the mergers, Liberty Global are parties to loan agreements that restrict changes in ownership of the borrower without the consent of the lenders. All of these provisions will restrict the ability to sell those equity interests and may adversely affect the prices at which those interests may be sold.
LMI and UGC do not, and Liberty Global will not, have the right to manage the businesses or affairs of any of the companies in which they hold less than a majority voting interest. Rather, such rights may take the form of representation on the board of directors or a partners’ or similar committee that supervises management or possession of veto rights over significant or extraordinary actions. The scope of veto rights varies from agreement to agreement. Although board representation and veto rights may enable LMI, UGC and, following the mergers, Liberty Global to exercise influence over the management or policies of an affiliate, they do not enable LMI, UGC or, following the mergers, Liberty Global to cause those affiliates to take actions, such as paying dividends or making distributions to their stockholders or partners.
Following the mergers, Liberty Global may not report operating income or net earnings. Each of UGC and LMI has a history of reporting operating and net losses. UGC’s net earnings (losses) from continuing operations amounted to $(356.3 million) (as restated — see note 27 to the consolidated financial statements of UGC, incorporated by reference herein), $1,955.4 million and $988.3 million for the years ended December 31, 2004, 2003 and 2002, respectively. Although UGC had net earnings in 2003 and 2002, the net earnings were primarily attributable to gains on debt extinguishment of $2.1 billion and $2.2 billion, respectively. During the same periods, LMI’s net earnings (losses) from continuing operations amounted to $(18.1 million) (as restated — see note 23 to the consolidated financial statements of LMI, included elsewhere herein), $20.9 million and $(329.9 million) for the years ended December 31, 2004, 2003 and 2002, respectively. In light of the historical financial performance of UGC and LMI, we cannot assure you that Liberty Global will report operating income or net earnings in the near future or at all.
If LMI, UGC or, following the mergers, Liberty Global fails to meet required capital calls to a company in which it holds interests, its interests in that company could be diluted or it could forfeit important rights. LMI and UGC are parties to, and, following the mergers, Liberty Global may be a party to, stockholder and partnership agreements that provide for possible capital calls on stockholders and partners. Failure to meet a capital call, or other commitment to provide capital or loans to a particular company in which LMI, UGC or, following the mergers, Liberty Global holds interests may have adverse consequences to LMI, UGC or, following the mergers, Liberty Global. These consequences may include, among others, the dilution of equity interest in that company, the forfeiture of the right to vote or exercise other rights or, in some instances, a breach of contract action for damages against LMI, UGC or, following the mergers, Liberty Global. The ability to meet capital calls or other capital or loan commitments is subject to the ability to access cash. See “— LMI, UGC and Liberty Global may not freely access the cash of their operating companies.” below.
LMI, UGC and Liberty Global may not freely access the cash of their operating companies. The operations of LMI and UGC are, and, following the mergers, Liberty Global will be, conducted through their respective subsidiaries. The potential sources of cash of LMI and UGC, and, following the mergers, Liberty Global will include their available cash balances, net cash from the operating activities of their subsidiaries, dividends and interest from their investments, availability under credit facilities and proceeds from asset sales. The ability of their operating subsidiaries to pay dividends or to make other payments or advances to them depends on their individual operating results and any statutory, regulatory or contractual restrictions to which they may be or may become subject. Some of LMI’s and UGC’s operating subsidiaries are, and, following the mergers, Liberty Global’s operating subsidiaries will be, subject to loan agreements or bank facilities that restrict sales of assets and prohibit or limit the payment of dividends or the making of distributions, loans or advances to stockholders and partners, including LMI, UGC and, following the mergers, Liberty Global. In addition, because these subsidiaries are separate and distinct legal entities they have no obligation to provide LMI, UGC or, following the mergers, Liberty Global with funds for payment obligations, whether by dividends, distributions, loans or other payments. With respect to those companies in which LMI, UGC or, following the mergers, Liberty Global have less than a majority voting interest, LMI and UGC do not have, and, following the mergers, Liberty Global will not have, sufficient voting control to cause those companies to pay dividends or make other payments or advances to any of their partners or stockholders, including LMI, UGC or, following the mergers, Liberty Global.
If, following the mergers, Liberty Global is unable to satisfy completely the regulatory requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Liberty Global’s internal control over financial reporting is not effective, the reliability of Liberty Global’s financial statements may be questioned and Liberty Global’s stock price may suffer. Section 404 of the Sarbanes-Oxley Act of 2002 requires companies to do a comprehensive evaluation of their internal control over financial reporting. To comply with this statute, Liberty Global will be required to document and test its internal control procedures; Liberty Global’s management will be required to assess and issue a report concerning

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Liberty Global’s internal control over financial reporting; and Liberty Global’s independent auditors will be required to issue an opinion on management’s assessment of those matters. Liberty Global’s compliance with Section 404 of the Sarbanes-Oxley Act will first be tested in connection with the filing of its Annual Report on Form 10-K for the year ending December 31, 2005. The rules governing the standards that must be met for management to assess Liberty Global’s internal control over financial reporting are new and complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, Liberty Global’s management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If, following the mergers, Liberty Global’s management cannot favorably assess the effectiveness of Liberty Global’s internal control over financial reporting or Liberty Global’s auditors identify material weaknesses in those controls, investor confidence in Liberty Global’s financial results may weaken, and Liberty Global’s stock price may suffer.
On April 25, 2005, the audit committee of UGC determined to restate the financial statements of UGC as of and for the year ended December 31, 2004, to correct an error in the accounting for UGC’s 500,000,000 aggregate principal amount of 13/4% convertible senior notes due April 15, 2024. As a result, LMI restated its financial statements for the same period. As a result of UGC’s need to restate its financial statements, UGC concluded that it had a material weakness in its internal controls over financial reporting.
Certain subsidiaries of LMI and UGC are, and certain subsidiaries of Liberty Global will be, subject to various debt instruments that contain restrictions on how they finance their operations and operate their businesses, which could impede their ability to engage in beneficial transactions. Certain subsidiaries of LMI and UGC are, and certain subsidiaries of Liberty Global will be, subject to significant financial and operating restrictions contained in outstanding credit agreements, indentures and similar instruments of indebtedness. These restrictions will affect, and in some cases significantly limit or prohibit, among other things, the ability of those subsidiaries to:
  •  borrow more funds;
 
  •  pay dividends or make other upstream distributions;
 
  •  make investments;
 
  •  engage in transactions with us or other affiliates; or
 
  •  create liens on their assets.
As a result of restrictions contained in these credit facilities, the companies party thereto, and their subsidiaries, could be unable to obtain additional capital in the future to:
  •  fund capital expenditures or acquisitions that could improve their value;
 
  •  meet their loan and capital commitments to their business affiliates;
 
  •  invest in companies in which they would otherwise invest;
 
  •  fund any operating losses or future development of their business affiliates;
 
  •  obtain lower borrowing costs that are available from secured lenders or engage in advantageous transactions that monetize their assets; or
 
  •  conduct other necessary or prudent corporate activities.
LMI and UGC are, and Liberty Global will be, typically prohibited from or significantly restricted in accessing the net cash of their subsidiaries that have outstanding credit facilities.
In addition, some of the credit agreements to which these subsidiaries are parties require them to maintain financial ratios, including ratios of total debt to operating cash flow and operating cash flow to interest expense. Their ability to meet these financial ratios and tests may be affected by events beyond their control, and we cannot assure you that they will be met. In the event of a default under such subsidiaries’ credit agreements or indentures, the lenders may accelerate the maturity of the indebtedness under those agreements or indentures, which could result in a default under other outstanding credit facilities of these subsidiaries. We cannot assure you that any of these subsidiaries will have sufficient assets to pay indebtedness outstanding under their credit agreements and indentures. Any refinancing of this indebtedness is likely to contain similar restrictive covenants.
Factors Relating to Governance Matters
John C. Malone will have significant influence over corporate matters considered by Liberty Global and its stockholders. Following the mergers, John C. Malone is expected to beneficially own shares of Liberty Global

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common stock representing approximately 23.1% of the aggregate voting power of Liberty Global (based upon his beneficial ownership interests in LMI and UGC, respectively, as of March 31, 2005, and assuming no cash elections are made by the UGC stockholders). By virtue of Mr. Malone’s voting power in Liberty Global as well as his position as Liberty Global’s Chairman of the Board, Mr. Malone will have significant influence over the outcome of any corporate transaction or other matters submitted to Liberty Global stockholders for approval, including the election of directors, mergers, consolidations and the sale of all or substantially all of Liberty Global’s assets. Mr. Malone’s rights to vote or dispose of his equity interests in Liberty Global will not be subject to any restrictions in favor of Liberty Global other than as may be required by applicable law and except for customary transfer restrictions pursuant to incentive award agreements.
It may be difficult for a third party to acquire Liberty Global, even if doing so may be beneficial to Liberty Global stockholders. Certain provisions of Liberty Global’s restated certificate of incorporation and bylaws may discourage, delay or prevent a change in control of Liberty Global that a stockholder may consider favorable. These provisions include the following:
  •  authorizing a capital structure with multiple series of common stock: a Series B that entitles the holders to ten votes per share; a Series A that entitles the holders to one vote per share; and a Series C that, except as otherwise required by applicable law, entitles the holder to no voting rights;
 
  •  authorizing the issuance of “blank check” preferred stock, which could be issued by its board of directors to increase the number of outstanding shares and thwart a takeover attempt;
 
  •  classifying its board of directors with staggered three-year terms, which may lengthen the time required to gain control of its board of directors;
 
  •  limiting who may call special meetings of stockholders;
 
  •  prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of the stockholders;
 
  •  establishing advance notice requirements for nominations of candidates for election to its board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;
 
  •  requiring stockholder approval by holders of at least 80% of its voting power or the approval by at least 75% of its board of directors with respect to certain extraordinary matters, such as a merger or consolidation of Liberty Global, a sale of all or substantially all of its assets or an amendment to its restated certificate of incorporation or bylaws; and
 
  •  the existence of authorized and unissued stock which would allow its board of directors to issue shares to persons friendly to current management, thereby protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to obtain control of Liberty Global.
Liberty Global’s incentive plan may also discourage, delay or prevent a change in control of Liberty Global even if such change of control would be in the best interests of Liberty Global stockholders. For information regarding the relative rights of the holders of LMI common stock, UGC common stock and Liberty Global common stock, see “Comparison of the Rights of Stockholders of LMI, UGC and Liberty Global.”
Holders of any single series of Liberty Global common stock may not have any remedies if any action by Liberty Global’s directors or officers has an adverse effect on only that series of Liberty Global common stock. Principles of Delaware law and the provisions of Liberty Global’s restated certificate of incorporation may protect decisions of Liberty Global’s board of directors that have a disparate impact upon holders of any single series of Liberty Global common stock. Under Delaware law, Liberty Global’s board of directors has a duty to act with due care and in the best interests of all Liberty Global stockholders, including the holders of all series of Liberty Global common stock. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that a board of directors owes an equal duty to all common stockholders regardless of class or series and does not have separate or additional duties to any group of stockholders. As a result, in some circumstances, Liberty Global’s directors may be required to make a decision that is adverse to the holders of one series of Liberty Global common stock. Under the principles of Delaware law referred to above, if you are a holder of a disadvantaged series of Liberty Global common stock, you may not be able to challenge such a decision if Liberty Global’s board of directors is disinterested and adequately informed with respect to its decision and acts in good faith and in the honest belief that it is acting in the best interests of all of its stockholders.

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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This joint proxy statement/ prospectus includes certain forward-looking statements regarding market potential, future financial performance and other matters. These statements may be made directly in this joint proxy statement/ prospectus or they may be made a part of this joint proxy statement/ prospectus by appearing in other documents filed with the Securities and Exchange Commission and incorporated by reference in this joint proxy statement/ prospectus. These statements may include statements regarding the period following completion of the mergers.
In some cases, you can identify these statements by our use of forward-looking words such as “may,” “will,” “should,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential,” “intend” and other terms of similar substance used in connection with any discussion of the mergers or the future operations or financial performance of LMI, UGC or Liberty Global. You should be aware that these statements and any other forward-looking statements in these documents only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Many of these risks, uncertainties and assumptions are beyond the control of LMI, UGC and Liberty Global, and may cause actual results and performance to differ materially from our expectations.
In addition to the risks and uncertainties set forth under the heading “Risk Factors” on page 59 of this joint proxy statement/ prospectus, important factors that could cause our actual results to be materially different from our expectations include, among others:
  •  economic and business conditions and industry trends in the countries in which we operate;
 
  •  currency exchange risks;
 
  •  consumer disposable income and spending levels, including the availability and amount of individual consumer debt;
 
  •  consumer acceptance of existing service offerings, including our newer digital video, voice and Internet access services;
 
  •  consumer acceptance of new technology, programming alternatives and broadband services that we may offer;
 
  •  our ability to manage rapid technological changes, and grow our digital video, voice and Internet access services;
 
  •  the regulatory and competitive environment in the broadband communications and programming industries in the countries in which we, and the entities in which we have interests, operate;
 
  •  continued consolidation of the foreign broadband distribution industry;
 
  •  uncertainties inherent in the development and integration of new business lines and business strategies;
 
  •  the expanded deployment of personal video recorders and the impact on television advertising revenue;
 
  •  capital spending for the acquisition and/or development of telecommunications networks and services;
 
  •  uncertainties associated with product and service development and market acceptance, including the development and provision of programming for new television and telecommunications technologies;
 
  •  future financial performance, including availability, terms and deployment of capital;
 
  •  the ability of suppliers and vendors to timely deliver products, equipment, software and services;
 
  •  the outcome of any pending or threatened litigation;
 
  •  availability of qualified personnel;
 
  •  changes in, or failure or inability to comply with, government regulations in the countries in which we operate and adverse outcomes from regulatory proceedings;
 
  •  government intervention which opens our broadband distribution networks to competitors;
 
  •  our ability to successfully negotiate rate increases with local authorities;
 
  •  changes in the nature of key strategic relationships with partners and joint venturers;
 
  •  uncertainties associated with our ability to comply with the internal control requirements of the Sarbanes-Oxley Act of 2002;
 
  •  competitor responses to our products and services, and the products and services of the entities in which we have interests;

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  •  spending on foreign television advertising; and
 
  •  threatened terrorist attacks and ongoing military action in the Middle East and other parts of the world.
You should be aware that the video, voice and Internet access services industries are changing rapidly, and, therefore, the forward-looking statements and statements of expectations, plans and intent herein are subject to a greater degree of risk than similar statements regarding certain other industries.
We caution you not to place undue reliance on the forward-looking statements contained or incorporated by reference in this joint proxy statement/ prospectus. These forward-looking statements speak only as of the date on which the statements were made. Except as may be required by law, none of LMI, UGC or Liberty Global has any obligation to update or alter these forward-looking statements, whether as a result of new information, future events or otherwise.

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THE COMPANIES
Liberty Media International, Inc.
LMI, through its subsidiaries and affiliates, provides broadband distribution services and video programming services to subscribers in Europe, Japan, Latin America and Australia. LMI’s broadband distribution services consist primarily of cable television distribution, Internet access, telephony, and, in selected markets, direct-to-home satellite distribution. LMI’s broadband distribution services include those of UGC, which is a controlled subsidiary of LMI. LMI’s programming networks create original programming and also distribute programming obtained from international and home-country content providers. LMI’s principal assets include interests in UGC, LMI/ Sumisho Super Media, LLC, Jupiter Programming Co., Ltd. (JPC), Liberty Cablevision of Puerto Rico Ltd. and Pramer S.C.A.
LMI is a Delaware corporation, formed on March 16, 2004, in connection with the proposed spin off of Liberty’s International Group business segment. LMI’s assets and businesses, including its controlling stake in UGC, consist largely of those which Liberty attributed to its International Group business segment prior to the spin off. On June 7, 2004, Liberty distributed to its stockholders, on a pro rata basis, all of the outstanding shares of LMI’s common stock, and LMI became an independent, publicly traded company.
LMI’s principal executive offices are located at 12300 Liberty Boulevard, Englewood, Colorado 80112. LMI’s main telephone number is (720) 875-5800, and its company website is www.libertymediainternational.com.
Additional Information
For more information regarding LMI, please see “Appendix A: Information Concerning Liberty Media International, Inc.” to this joint proxy statement/ prospectus, including, without limitation:
  •  “— Part 1: Description of Business;”
 
  •  “— Part 2: Certain Relationships and Related Party Transactions;”
 
  •  “— Part 3: Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk;” and
 
  •  “— Part 4: Historical Financial Statements of LMI and its Significant Affiliates and Acquirees;”
which is incorporated herein in its entirety by this reference.
UnitedGlobalCom, Inc.
UGC is an international broadband communications provider of video, voice and broadband Internet access services with operations in 16 countries outside the United States. As of December 31, 2004, UGC’s networks passed approximately 15.9 million homes and serve approximately 8.7 million video subscribers, 0.8 million voice subscribers and 1.4 million broadband Internet access subscribers. UGC Europe, Inc., UGC’s largest consolidated operation, is a pan-European broadband communications company, providing video, high-speed Internet access and telephone services through its broadband networks in 13 European countries. UGC’s primary Latin American operation, VTR GlobalCom S.A., provides video, high-speed Internet access and telephone services primarily to residential customers in Chile. UGC also has consolidated operations in Brazil and Peru; an approximate 19% interest in SBS Broadcasting S.A., a European commercial television and radio broadcasting company; an approximate 34% interest in Austar United Communications Ltd., a pay-TV provider in Australia; and an indirect investment in Telenet Group Holding N.V., a broadband communications provider in Belgium.
UGC is a Delaware corporation, formed on February 5, 2001 in connection with a substantial investment by Liberty.
UGC’s principal executive offices are located at 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237. UGC’s main telephone number is (303) 770-4001, and its company website is www.unitedglobal.com.
Additional Information
For more information regarding UGC, please see “Additional Information — Where You Can Find More Information.”
Liberty Global, Inc.
Liberty Global, a wholly owned subsidiary of LMI, is a Delaware corporation, formed on January 13, 2005, for the purpose of effecting the mergers. Upon consummation of the mergers, Liberty Global will become the parent company

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of LMI and UGC. The businesses of Liberty Global will reflect the combination of the businesses currently conducted by each of LMI and UGC.
To date, Liberty Global has not conducted any activities other than those incident to its formation and the matters contemplated by the merger agreement, including the formation of each of LMI Merger Sub and UGC Merger Sub as wholly owned subsidiaries and the preparation of applicable filings under the securities laws.
Liberty Global’s principal executive offices are located at 12300 Liberty Boulevard, Englewood, Colorado 80112. Liberty Global’s main telephone number is (720) 875-5800. Following the mergers, Liberty Global’s corporate website will be located at www.lgi.com.
Additional Information
For more information regarding the business of Liberty Global following the mergers, please see the description of LMI’s business included in “Appendix A: Information Concerning Liberty Media International, Inc. — Part 1: Description of Business,” which includes a description of UGC’s business. In addition, please carefully read the information provided in this joint proxy statement/ prospectus, including the information provided under the heading “Liberty Global Unaudited Condensed Pro Forma Combined Financial Statements.”
Cheetah Acquisition Corp. (LMI Merger Sub)
LMI Merger Sub, a wholly owned subsidiary of Liberty Global, is a Delaware corporation, formed on January 13, 2005, for the purpose of effecting the merger with LMI. LMI Merger Sub has not conducted any activities other than those incident to its formation and the matters contemplated by the merger agreement, including the preparation of applicable filings under the securities laws.
LMI Merger Sub’s principal executive offices are located at 12300 Liberty Boulevard, Englewood, Colorado 80112. LMI Merger Sub’s main telephone number is (720) 875-5800.
Tiger Global Acquisition Corp. (UGC Merger Sub)
UGC Merger Sub, a wholly owned subsidiary of Liberty Global, is a Delaware corporation, formed on January 13, 2005, for the purpose of effecting the merger with UGC. UGC Merger Sub has not conducted any activities other than those incident to its formation and the matters contemplated by the merger agreement, including the preparation of applicable filings under the securities laws.
UGC Merger Sub’s principal executive offices are located at 12300 Liberty Boulevard, Englewood, Colorado 80112. UGC Merger Sub’s main telephone number is (720) 875-5800.

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THE STOCKHOLDERS MEETINGS AND PROXY SOLICITATIONS
         
    LMI Annual Meeting   UGC Special Meeting
         
Time, Place & Date   [          ], 2005
[     ] a.m., local time
[          ]
[          ]
[     ], Colorado [          ]

The LMI annual meeting may be adjourned or postponed to another date, time or place for proper purposes, including for the purpose of soliciting additional proxies.
  [          ], 2005
[     ] a.m., local time
[          ]
[          ]
[     ], Colorado [     ]

The UGC special meeting may be adjourned or postponed to another date, time or place for proper purposes, including for the purpose of soliciting additional proxies.
 
Purposes   • To consider and vote on the merger proposal;

• To consider and vote on the election of David E. Rapley and Larry E. Romrell as Class I directors pursuant to the LMI election of directors proposal;

• To consider and vote on the LMI incentive plan proposal;

• To consider and vote on the LMI auditors ratification proposal; and

• To transact other business as may properly be presented at the LMI annual meeting or any postponements or adjournments thereof.

At the present time, LMI knows of no other matters that will be presented at the LMI annual meeting.
  • To consider and vote on the merger proposal; and

• To transact other business as may properly be presented at the UGC special meeting or any postponements or adjournments thereof.

At the present time, UGC knows of no other matters that will be presented at the UGC special meeting.
 
    In order to carry on the business of the applicable stockholders
Quorum   meeting, a quorum of stockholders mu least a majority of the aggregate vo outstanding shares of LMI common sto case may be, must be represented at meeting, either in person or by prox quorum, your shares will be included even if you indicate on your proxy t addition, if a broker, who is a reco a form of proxy that the broker does to   st be present. This means that at ting power represented by the ck or UGC common stock, as the the applicable stockholders y. For purposes of determining a as represented at the meeting hat you abstain from voting. In rd holder of shares, indicates on not have discretionary authority
    vote those shares on any proposal, or if those shares are voted in circumstances in which proxy authority is defective or has been withheld with respect to any proposal, these shares (which we refer to as “broker non-votes”) will be treated as present for purposes of determining the presence of a quorum. See “— Voting Procedures for Shares Held in Street Name — Effect of Broker Non-Votes” below.
 
Record Date   5:00 p.m., New York City time, on May 3, 2005   5:00 p.m., New York City time, on May 3, 2005

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    LMI Annual Meeting   UGC Special Meeting
         
Shares Entitled to Vote   Holders of LMI Series A common stock and LMI Series B common stock, as recorded in LMI’s stock register on the record date for the LMI annual meeting, may vote at the LMI annual meeting or at any adjournment or postponement thereof.   Holders of UGC Class A common stock, UGC Class B common stock and UGC Class C common stock, as recorded in UGC’s stock register on the record date for the UGC special meeting, may vote at the UGC special meeting or at any adjournment of postponement thereof.
 
Votes You Have   At the LMI annual meeting, holders of LMI Series A common stock will have one vote for each share of LMI Series A common stock that LMI’s records show they owned as of 5:00 p.m., New York City time, on the record date for the LMI annual meeting.

At the LMI annual meeting, holders of LMI Series B common stock will have ten votes for each share of LMI Series B common stock that LMI’s records show they owned as of 5:00 p.m., New York City time, on the record date for the LMI annual meeting.
  At the UGC special meeting, holders of UGC Class A common stock will have one vote for each share of UGC Class A common stock that UGC’s records show they owned as of 5:00 p.m., New York City time, on the record date for the UGC special meeting.

At the UGC special meeting, holders of UGC Class B common stock and holders of UGC Class C common stock will have ten votes for each share of UGC Class B common stock or UGC Class C common stock that UGC’s records show they owned as of 5:00 p.m., New York City time, on the record date for the UGC special meeting.
 
Recommendation of the Board of Directors  
Merger Proposal. LMI’s board of directors has unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the LMI merger, are advisable, fair to, and in the best interests of, LMI and its stockholders. Accordingly, LMI’s board of directors recommends that LMI stockholders vote “FOR” the merger proposal.

Annual Business Matter Proposals. LMI’s board of directors has also approved the annual business matter proposals and recommends that LMI stockholders vote “FOR” each of the annual business matter proposals.
 
Merger Proposal. UGC’s board of directors, based upon the recommendation of the Special Committee, has unanimously determined that the UGC merger, on the terms and conditions set forth in the merger agreement and voting agreement, is fair to, and in the best interests of, UGC and its stockholders. Accordingly, UGC’s board of directors recommends that UGC stockholders vote “FOR” the merger proposal.
 
Votes Required   Merger Proposal. Approval of the merger proposal requires the affirmative vote of the holders of at least a majority of the aggregate voting power of the LMI Series A common stock and LMI Series B common stock outstanding as of the record date for   Merger Proposal. Approval of the merger proposal requires a vote of the holders of UGC common stock, with all classes voting together as a single class, that satisfies two criteria:

• statutory approval: the affirmative

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    LMI Annual Meeting   UGC Special Meeting
         
    the LMI annual meeting, voting together as a single class.

A common stock and LMI Series B common stock outstanding as of the record date for the LMI annual meeting, voting together as a single class.

Pursuant to a voting agreement entered into between John C. Malone, the Chairman of the Board, Chief Executive Officer and President of LMI, and UGC, Mr. Malone has agreed to vote the shares of LMI Series A common stock and LMI Series B common stock owned by him or which he has the right to vote (representing, as of March 31, 2005, approximately 26.5% of the aggregate voting power of LMI) “FOR” the approval of the merger proposal. See “The Transaction Agreements — Voting Agreement.”

The directors and executive officers of LMI (other than Mr. Malone), who together beneficially own shares of LMI common stock representing approximately 3.3% of LMI’s aggregate voting power, as of March 31, 2005, have indicated to LMI that they intend to vote “FOR” the merger proposal at the LMI annual meeting.

Annual Business Matter Proposals. A plurality of the affirmative votes of the shares of LMI Series A common stock and LMI Series B common stock outstanding on the record date, voting together as a single class, that are voted in person or by proxy at the annual meeting is required to elect Messrs. Rapley and Romrell as Class I members of LMI’s board of directors pursuant to the LMI election of directors proposal. This means that the two nominees will be elected if they receive more affirmative votes than any other person.

Approval of each of the LMI incentive plan proposal and the LMI auditors ratification proposal requires the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of LMI Series A
  vote of the holders of at least a majority of the aggregate voting power of the shares of UGC Class A common stock, UGC Class B common stock and UGC Class C common stock outstanding as of the record date for the UGC special meeting; and

• minority approval: the affirmative vote of the holders of at least a majority of the aggregate voting power of the shares of UGC Class A common stock, UGC Class B common stock and UGC Class C common stock outstanding as of the record date for the UGC special meeting, exclusive of any shares beneficially owned by LMI, Liberty or any of their respective subsidiaries or any of the executive officers or directors of LMI, Liberty or UGC.

LMI, which beneficially owns shares of UGC common stock representing approximately 91% of the aggregate voting power of UGC, as of March 31, 2005, has agreed to vote, and to cause its subsidiaries to vote, such shares in favor of the approval of the merger proposal. See “The Transaction Agreements — Merger Agreement.” Accordingly, the statutory approval is assured.

The directors and executive officers of UGC, who together beneficially own shares of UGC common stock representing less than 1% of UGC’s aggregate voting power, as of March 31, 2005, have indicated to UGC that they intend to vote “FOR” the merger proposal at the UGC special meeting.

The directors and executive officers of LMI (including Mr. Malone), who together beneficially own shares of UGC common stock representing less than 1% of UGC’s aggregate voting power, as of March 31, 2005, have indicated to UGC that they intend to vote “FOR” the merger proposal at the UGC special meeting.

The votes of LMI and its wholly

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    LMI Annual Meeting   UGC Special Meeting
         
    common stock and LMI Series B common stock outstanding on the record date for the LMI annual meeting that are present, in person or by proxy, at the LMI annual meeting, voting together as a single class.   owned subsidiaries, the votes of UGC’s directors and executive officers and the votes of LMI’s directors and executive officers will not be counted toward the minority approval.
 
Shares Outstanding   As of March 31, 2005, an aggregate of 165,555,331 shares of LMI Series A common stock and 7,264,300 shares of LMI Series B common stock were outstanding and would have been entitled to vote at the LMI annual meeting if March 31, 2005 had been the record date for the LMI annual meeting.   As of March 31, 2005, an aggregate of 401,894,352 shares of UGC Class A common stock, 10,493,461 shares of UGC Class B common stock and 379,603,223 shares of UGC Class C common stock were outstanding and would have been entitled to vote at the UGC special meeting if March 31, 2005 had been the record date for the UGC special meeting.
 
Numbers of Holders   We expect there to be, as of the record date for the LMI annual meeting, approximately 3,330 record holders of LMI Series A common stock and approximately 160 record holders of LMI Series B common stock (which amounts do not include the number of stockholders whose shares are held of record by banks, brokers or other nominees, but include each such institution as one holder).   We expect there to be, as of the record date for the UGC special meeting, approximately 170 record holders of UGC Class A common stock, one record holder of UGC Class B common stock and four record holders of UGC Class C common stock (which amounts do not include the number of stockholders whose shares are held of record by banks, brokers or other nominees, but include each such institution as one holder).
 
Voting Procedures for Record Holders   Holders of record of LMI common stoc record date for the applicable stock person thereat. Alternatively, they signing, dating and returning the pr with the mailing of this joint proxy voting by telephone or over the Inte revoked, shares of LMI common stock by a proxy submitted as described be applicable stockholders meeting will instructions on the proxy.

YOUR VOTE IS IMPORTANT. It is reco even if you plan to attend the appli may change your vote at the applicab submit a written proxy by mail, you mail the proxy in accordance with it

If any other matters are properly pr stockholders meeting, the persons yo discretion to vote or to act on thes judgment, unless you indicate otherw
  k or UGC common stock as of the holders meeting may vote in may give a proxy by completing, oxy card that is being included statement/ prospectus, or by rnet. Unless subsequently or UGC common stock represented low and received at or before the be voted in accordance with the mmended that you vote by proxy cable stockholders meeting. You le stockholders meeting. To should complete, sign, date and s instructions. esented before the applicable u choose as proxies will have e matters according to their best ise on your proxy.

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    LMI Annual Meeting   UGC Special Meeting
         
 
    If a proxy is signed and returned by an LMI record holder without indicating any voting instructions, the shares of LMI common stock represented by the proxy will be voted “FOR” the approval of the merger proposal and “FOR” the approval of each of the annual business matter proposals.

If a proxy is signed and returned by an LMI record holder and the LMI record holder indicates that it is abstaining from voting, the proxy will have the same effect as a vote “AGAINST” the merger proposal, the LMI incentive plan proposal and the LMI auditors ratification proposal, but it will have no effect on the vote on the LMI election of directors proposal.

Failure of an LMI record holder to submit a proxy representing shares of LMI common stock or vote in person at the LMI annual meeting will have the same effect as a vote “AGAINST” the merger proposal but it will have no effect on the vote on any of the annual business matter proposals.
  If a proxy is signed and returned by a UGC record holder without indicating any voting instructions, the shares of UGC common stock represented by the proxy will be voted “FOR” the approval of the merger proposal.

If a proxy is signed and returned by a UGC record holder and the UGC record holder indicates that it is abstaining from voting, the proxy will have the same effect as a vote “AGAINST” the merger proposal.

Failure of a UGC record holder to submit a proxy representing shares of UGC common stock or vote in person at the UGC special meeting will have the same effect as a vote “AGAINST” the merger proposal.
 
Voting Procedures for Shares Held in Street Name  
General. If you hold your shares in the name of a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee when voting your shares of LMI common stock or when granting or revoking a proxy.
 
General. If you hold your shares in the name of a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee when voting your shares of UGC common stock or when granting or revoking a proxy.
   
Effect of Broker Non-Votes. Shares represented by “broker non-votes” will be deemed shares not entitled to vote and will not be included for purposes of determining the aggregate voting power and number of shares represented and entitled to vote on a particular proposal.

Broker non-votes will have the same effect as a vote “AGAINST” the merger proposal.
 
Effect of Broker Non-Votes.
Shares represented by “broker non- votes” will be deemed shares not entitled to vote and will not be included for purposes of determining the aggregate voting power and number of shares represented and entitled to vote on a particular proposal.

Broker non-votes will have the same effect as a vote “AGAINST” the merger proposal.

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    LMI Annual Meeting   UGC Special Meeting
         
   

Broker non-votes will have no effect on any of the annual business matter proposals.

YOUR VOTE IS IMPORTANT
 

YOUR VOTE IS IMPORTANT.
 
Revoking a Proxy   Before your proxy is voted, you may change your vote by telephone or over the Internet (if you originally voted by telephone or over the Internet), by voting in person at the LMI annual meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to EquiServe Trust Company, N.A., LMI/UGC Transaction, P.O. Box 8078, Edison, New Jersey 08818-8687. Any signed proxy revocation or new signed proxy must be received before the start of the LMI annual meeting.

Your attendance at the LMI annual meeting will not, by itself, revoke your proxy.
  Before your proxy is voted, you may change your vote by telephone or over the Internet (if you originally voted by telephone or over the Internet), by voting in person at the UGC special meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to UnitedGlobalCom, Inc., c/o EquiServe Trust Company, N.A., LMI/UGC Transaction, P.O. Box 859208, Braintree, Massachusetts 02185. Any signed proxy revocation or new signed proxy must be received before the start of the UGC special meeting.

Your attendance at the UGC special meeting will not, by itself, revoke your proxy.
 
    If your shares are held in an account by a broker, bank or
    other nominee, you should contact y nominee to change your vote.   our broker, bank or other
 
Solicitation of Proxies   The accompanying proxy for the LMI annual meeting is being solicited on behalf of LMI’s board of directors. In addition to this mailing, LMI’s employees may solicit proxies personally or by telephone. LMI pays the cost of soliciting these proxies. LMI also reimburses brokers and other nominees for their expenses in sending these materials to you and getting your voting instructions.

In addition to this mailing, LMI has hired D.F. King & Co. to solicit proxies on LMI’s behalf. D.F. King & Co. will receive $7,000 from LMI as compensation for such services, plus expenses.
  The accompanying proxy for the UGC special meeting is being solicited on behalf of UGC’s board of directors. In addition to this mailing, UGC’s employees may solicit proxies personally or by telephone. UGC pays the cost of soliciting these proxies. UGC also reimburses brokers and other nominees for their expenses in sending these materials to you and getting your voting instructions.

In addition to this mailing, UGC has hired D.F. King & Co. to solicit proxies on UGC’s behalf. D.F. King & Co. will receive approximately $11,500 from UGC as compensation for such services, plus expenses.
 
Auditors   KPMG LLP serves as LMI’s independent auditors. Representatives of KPMG plan to attend the LMI annual meeting and   KPMG LLP serves as UGC’s independent auditors. Representatives of KPMG plan to attend the UGC special meeting

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    LMI Annual Meeting   UGC Special Meeting
         
    will be available to answer questions. A representative of KPMG is expected to attend the LMI annual meeting with the opportunity to make a statement and/or respond to appropriate questions from LMI stockholders at the LMI annual meeting.   and will be available to answer questions. A representative of KPMG is expected to attend the UGC special meeting with the opportunity to make a statement and/or respond to appropriate questions from UGC stockholders at the UGC special meeting.

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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS
The following is a summary of the U.S. federal income tax consequences of the LMI merger and the UGC merger that are expected to be material to U.S. holders and non-U.S. holders (each as defined below) of LMI common stock and UGC common stock, subject to the limitations below. This summary is limited to the U.S. federal income tax consequences of the mergers and does not purport to be a complete technical analysis or listing of all potential tax consequences that may be relevant to holders of LMI common stock or UGC common stock. It is not intended to be, nor should it be construed as being, legal or tax advice. For this reason, holders of LMI common stock and UGC common stock should consult their own tax advisors concerning the tax consequences of the mergers. Further, this summary does not address any tax consequences arising under the income or other tax laws of any state, local or foreign jurisdiction or any tax treaties.
This summary is based upon the Internal Revenue Code of 1986, as amended (referred to as the Code), the applicable regulations of the U.S. Treasury Department, and publicly available judicial and administrative rulings and decisions, all as in effect on the date of this joint proxy statement/ prospectus, any of which may change, possibly retroactively. Any changes could affect the continuing validity of this summary.
For purposes of this summary, the term U.S. holder means a beneficial owner of shares of LMI common stock or UGC common stock, as applicable, who is:
  •  an individual who is a citizen of the United States or who is resident in the United States for U.S. federal income tax purposes;
 
  •  a corporation or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia;
 
  •  a trust, if either (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person; or
 
  •  an estate that is subject to U.S. federal income tax on its income regardless of its source.
For purposes of this summary, the term non-U.S. holder means a beneficial owner of shares of LMI common stock or UGC common stock, as applicable, that is not treated as a partnership for U.S. federal income tax purposes, and that is not a U.S. holder. For purposes of this summary, an entity that is classified as a partnership for U.S. federal income tax purposes is neither a U.S. holder nor a non-U.S. holder. The U.S. federal income tax treatment of a partnership and its partners depends upon a variety of factors, including the activities of the partnership and the partners. Holders of LMI common stock or UGC common stock that are partnerships for U.S. federal income tax purposes, and partners in any such partnership, should consult their tax advisors concerning the U.S. federal income tax consequences of the mergers.
This summary assumes that LMI stockholders and UGC stockholders hold their shares of LMI common stock and UGC common stock, respectively, as capital assets within the meaning of Section 1221 of the Code at the effective time of the mergers. Further, this summary does not address all aspects of U.S. federal income taxation that may be relevant to LMI stockholders or UGC stockholders in light of their particular circumstances or that may be applicable to them if they are subject to special treatment under the U.S. federal income tax laws, including if an LMI stockholder or UGC stockholder is:
  •  a financial institution or thrift;
 
  •  a tax-exempt organization;
 
  •  an S corporation or other pass-through entity or an owner thereof;
 
  •  an entity taxable as a partnership for U.S. federal income tax purposes or an owner thereof;
 
  •  an insurance company;
 
  •  a mutual fund;
 
  •  a dealer in stocks and securities or foreign currencies;
 
  •  a trader or an investor in LMI common stock or UGC common stock who elects the mark-to-market method of accounting for such stock;

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  •  a stockholder who received LMI common stock or UGC common stock from the exercise of employee stock options, from an employee stock purchase plan or otherwise as compensation;
 
  •  a stockholder who received LMI common stock or UGC common stock from a tax-qualified retirement plan, individual retirement account or other qualified savings account;
 
  •  a U.S. holder that has a functional currency other than the U.S. dollar;
 
  •  an expatriate or former long-term resident of the United States; or
 
  •  a stockholder who holds LMI common stock or UGC common stock as part of a hedge against currency risk, straddle or a constructive sale or conversion transaction or other risk reduction or integrated investment transaction.
Further, this summary does not address the U.S. federal income tax consequences to any holder that actually or constructively owns both LMI common stock and UGC common stock, or to any holder of options or warrants to purchase LMI, UGC or Liberty Global common stock.
This summary does not address tax consequences that may vary with, or are contingent upon, individual circumstances, including without limitation alternative minimum tax consequences, and does not address tax consequences to persons who exercise appraisal rights. Moreover, it does not address any non-income tax or any foreign, state or local tax consequences of the mergers. Tax matters are very complicated, and the tax consequences of the mergers to LMI stockholders and UGC stockholders will depend upon the facts of the individual stockholder’s particular situation. Accordingly, LMI stockholders and UGC stockholders are strongly urged to consult with a tax advisor to determine the particular federal, state, local or foreign income or other tax consequences of the mergers.
Tax Opinions
It is a non-waivable condition of the LMI merger that LMI receive an opinion from Baker Botts L.L.P., counsel to LMI, or another nationally recognized law firm, dated the closing date, to the effect that, for U.S. federal income tax purposes:
  •  the LMI merger will qualify as a reorganization within the meaning of Section 368(a) of the Code;
 
  •  no gain or loss will be recognized by Liberty Global, LMI, any wholly owned subsidiary of LMI that owns shares of UGC common stock, or UGC as a result of the LMI merger or the UGC merger; and
 
  •  no gain or loss will be recognized by the stockholders of LMI with respect to shares of LMI common stock converted solely into Liberty Global common stock as a result of the LMI merger.
It is a non-waivable condition of the UGC merger that UGC receive an opinion from a nationally recognized law firm, dated the closing date, to the effect that, for U.S. federal income tax purposes:
  •  when viewed as a collective whole with the LMI merger, the conversion of shares of UGC common stock into shares of Liberty Global Series A common stock that is effected pursuant to the UGC merger will qualify as an exchange within the meaning of Section 351 of the Code;
 
  •  no gain or loss will be recognized by Liberty Global or UGC as a result of the UGC merger; and
 
  •  no gain or loss will be recognized by the stockholders of UGC with respect to shares of UGC common stock converted solely into Liberty Global Series A common stock pursuant to the UGC merger.
The merger agreement does not require that these opinions, which will be provided by Baker Botts L.L.P. and Holme Roberts & Owen LLP, address all of the material U.S. federal income tax consequences relating to the mergers.
These opinions will be based upon factual representations and covenants, including those contained in letters provided by Liberty Global, LMI, UGC and/or others, and upon specified assumptions, and will assume that the mergers will be completed according to the terms of the merger agreement and that there will be no material changes in existing facts or in law. Any inaccuracy or change in the representations, covenants or assumptions upon which the opinions are based could alter the conclusions reached in the opinions.
The opinions to be delivered by Baker Botts L.L.P. and by Holme Roberts & Owen LLP will neither bind the Internal Revenue Service nor preclude the Internal Revenue Service from challenging the conclusions set forth therein, nor preclude a court from adopting a contrary position. Neither Liberty Global, LMI nor UGC intends to obtain a ruling from the Internal Revenue Service regarding the tax consequences of the mergers.

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U.S. Federal Income Tax Consequences of the LMI Merger
LMI has received the opinion of Baker Botts L.L.P. that the discussion under this heading, “— U.S. Federal Income Tax Consequences of the LMI Merger,” is the opinion of Baker Botts L.L.P. with respect to the U.S. federal income tax consequences of the LMI merger that are expected to be material to U.S. holders and non-U.S. holders of LMI common stock. This opinion is subject to the qualifications, assumptions and limitations referenced and summarized above under the heading “Material United States Federal Income Tax Consequences of the Mergers,” and those summarized below under this heading, and is conditioned upon the accuracy of the representations, covenants and assumptions upon which the opinion is based. The opinion of Baker Botts L.L.P. concerning this discussion will not be binding upon the Internal Revenue Service or a court, and there can be no assurance that the Internal Revenue Service or a court will not take a contrary position. The opinion is included as an exhibit to the registration statement on Form S-4 of Liberty Global being filed in connection with the mergers. This discussion assumes that the opinion of Baker Botts L.L.P., described above under “— Tax Opinions,” will be delivered to LMI on the closing date of the LMI merger and that the representations, covenants, and assumptions upon which such opinion is based will be accurate. Any inaccuracy in any of the representations, covenants and assumptions upon which either of the opinions of Baker Botts L.L.P. are based could alter the conclusions described below under this heading, “— U.S. Federal Income Tax Consequences of the LMI Merger.”
U.S. Federal Income Tax Consequences to LMI
LMI will not recognize gain or loss as a result of the LMI merger.
U.S. Federal Income Tax Consequences to U.S. Holders and Non-U.S. Holders of LMI Common Stock
U.S. holders and non-U.S. holders of LMI common stock will not recognize gain or loss as a result of the receipt of Liberty Global common stock in the LMI merger in exchange for their LMI common stock. The aggregate tax basis of the Liberty Global common stock received by an LMI stockholder will be equal to the LMI stockholder’s aggregate tax basis of the LMI common stock surrendered, and the holding period of the Liberty Global common stock received by an LMI stockholder will include the LMI stockholder’s holding period of the LMI common stock surrendered.
Holders of LMI common stock will be required to file with their U.S. federal income tax return for the taxable year in which the LMI merger occurs a statement setting forth certain facts relating to the LMI merger, including their tax basis in the shares of LMI common stock exchanged in the LMI merger and the number of shares of Liberty Global common stock received in the LMI merger. Holders of LMI common stock must also keep a permanent record of such facts relating to the exchange of their LMI common stock for Liberty Global common stock pursuant to LMI merger.
U.S. Federal Income Tax Consequences of the UGC Merger
UGC has received the opinion of Holme Roberts & Owen LLP that the discussion under this heading, “— U.S. Federal Income Tax Consequences of the UGC Merger,” is the opinion of Holme Roberts & Owen LLP with respect to the U.S. federal income tax consequences of the UGC merger that are expected to be material to U.S. holders and non-U.S. holders of UGC common stock. This opinion is subject to the qualifications, assumptions and limitations referenced and summarized above under the heading “Material United States Federal Income Tax Consequences of the Mergers” and those summarized below under this heading, and is conditioned upon the accuracy of the representations, covenants and assumptions upon which such opinion is based. The opinion of Holme Roberts & Owen LLP concerning this discussion will not be binding upon the Internal Revenue Service or a court, and there can be no assurance that the Internal Revenue Service or a court will not take a contrary position. The opinion is included as an exhibit to the registration statement on Form S-4 of Liberty Global being filed in connection with the mergers. This discussion assumes that the opinion of Holme Roberts & Owen LLP, described above under “— Tax Opinions,” will be delivered to UGC on the closing date of the UGC merger and that the representations, covenants, and assumptions upon which such opinion is based will be accurate. Any inaccuracy in any of the representations, covenants and assumptions upon which either of the opinions of Holme Roberts & Owen LLP are based could alter the conclusions described below under this heading, “— U.S. Federal Income Tax Consequences of the UGC Merger.”
U.S. Federal Income Tax Consequences to UGC
UGC will not recognize gain or loss as a result of the UGC merger.
U.S. Federal Income Tax Consequences to U.S. Holders of UGC Common Stock
U.S. Holders of UGC Common Stock Who Receive Only Liberty Global Common Stock (and Cash for Fractional Shares) in the UGC Merger. A U.S. holder of UGC common stock who receives solely Liberty Global common stock

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in exchange for UGC common stock surrendered in the UGC merger (and, as applicable, cash for fractional shares) will not recognize gain or loss as a result of the receipt of Liberty Global common stock, except to the extent that cash is received instead of fractional shares. The aggregate tax basis of the Liberty Global common stock received by a UGC stockholder will be equal to the UGC stockholder’s aggregate tax basis of the UGC common stock surrendered, excluding the tax basis allocated to fractional shares, and the holding period of the Liberty Global common stock received by a UGC stockholder will include the UGC stockholder’s holding period of the UGC common stock surrendered. If a UGC stockholder receives cash instead of fractional shares, the UGC stockholder will be treated as recognizing capital gain or loss equal to the difference between the amount of cash received with respect to the fractional shares and the ratable portion of the UGC stockholder’s tax basis in the UGC common stock which is surrendered in the UGC merger and which is allocated to such fractional shares. Any capital gain or loss will be long-term capital gain or loss if the UGC stockholder’s holding period in such UGC common stock is more than one year as of the closing date of the UGC merger. For non-corporate U.S. holders, long-term capital gain generally will be taxed at a maximum U.S. federal income tax rate of 15%. The deductibility of capital losses is subject to limits.
U.S. Holders of UGC Common Stock Who Receive Cash and Liberty Global Common Stock in the UGC Merger. A U.S. holder of UGC common stock who receives a combination of Liberty Global common stock and cash in exchange for UGC common stock surrendered in the UGC merger will recognize capital gain, but not capital loss, realized in the UGC merger (subject to the discussion below under “— Possible Dividend Treatment”). The amount of capital gain recognized by the U.S. holder of UGC common stock generally will be calculated separately for each block of UGC common stock surrendered (i.e., shares of UGC common stock that have the same tax basis and holding period) and will be equal to the lesser of:
  •  the amount of gain realized in respect of such block, i.e., the excess (if any) of (x) the sum of the amount of cash and the fair market value of the Liberty Global common stock received that is allocable to such block of UGC common stock surrendered in the UGC merger over (y) the tax basis of such block; and
 
  •  the amount of cash that is allocable to such block.
For this purpose, the cash and the Liberty Global common stock received by a UGC stockholder generally will be allocated among the blocks of UGC common stock surrendered in the UGC merger proportionately based upon the fair market values of such blocks of UGC common stock. Because no loss will be recognized, a UGC stockholder will not be able to offset gain recognized on one block of UGC common stock by loss attributable to another block. The capital gain, if any, attributable to a block of UGC common stock will be long-term capital gain if the UGC stockholder’s holding period in the block of UGC common stock is more than one year as of the closing date of the UGC merger. For non-corporate U.S. holders, long-term capital gain generally will be taxed at a maximum U.S. federal income tax rate of 15%.
The aggregate tax basis of the Liberty Global common stock received by a U.S. holder of UGC common stock in the UGC merger will be equal to the UGC stockholder’s aggregate tax basis in the UGC common stock surrendered, decreased by the amount of cash received by the UGC stockholder and increased by the amount of gain recognized by the UGC stockholder in connection with the UGC merger. A UGC stockholder’s holding period for the Liberty Global common stock received in exchange for UGC common stock will include the holding period for the UGC common stock surrendered. U.S. holders of multiple blocks of UGC common stock are urged to consult their tax advisors concerning the determination of the tax basis and holding period for the Liberty Global common stock received in the UGC merger.
U.S. Holders of UGC Common Stock Who Receive Only Cash in the UGC Merger. A U.S. holder of UGC common stock who receives solely cash in exchange for the holder’s UGC common stock surrendered in the UGC merger will recognize capital gain or loss equal to the difference between the amount of cash received by the UGC stockholder and the holder’s tax basis of the UGC common stock surrendered (subject to the discussion below under “— Possible Dividend Treatment”). Gain or loss must be calculated separately for each block of UGC common stock (i.e., shares of UGC common stock that have the same tax basis and holding period). Such gain or loss will be long-term capital gain or loss if the UGC stockholder’s holding period in such UGC common stock is more than one year as of the closing date of the UGC merger. For non-corporate U.S. holders, long-term capital gain generally will be taxed at a maximum U.S. federal income tax rate of 15%. The deductibility of capital losses is subject to limits.
Possible Dividend Treatment. It is possible that cash received in the UGC merger as a result of a cash election could be subject to taxation under the rules of Section 304 of the Code. If Section 304 were to apply, holders of UGC common stock who receive both Liberty Global common stock and cash pursuant to a cash election in the UGC merger would be treated as having exchanged a portion of their UGC common stock for Liberty Global common stock in a tax-free exchange under Section 351(a) of the Code (to the extent that they receive Liberty Global common stock

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in the UGC merger), and as having exchanged the remaining portion of their shares of UGC common stock for cash. The cash received would be treated as a distribution that, depending upon the circumstances of the holder of the UGC common stock and the earnings and profits of Liberty Global and UGC, would be taxable either as a dividend or as a payment received in exchange for the UGC common stock. There is some uncertainty about whether Section 304 applies in the circumstances of the UGC merger because its application depends upon the determination of certain factual matters relating to the actual and constructive ownership by the UGC stockholders (other than LMI and its wholly owned subsidiaries) of the stock of UGC immediately prior to the completion of the UGC merger and to the actual and constructive ownership by the UGC stockholders (other than LMI and its wholly owned subsidiaries) of the stock of Liberty Global immediately following the completion of the mergers. Based upon information currently available, we cannot provide any assurance that the rules of Section 304 will not apply to a UGC stockholder who makes a cash election. If Section 304 were to apply, and if the cash were taxable as a dividend (generally taxable at a maximum rate of 15% for U.S. federal income tax purposes), the U.S. holder of the UGC common stock would not be able to reduce the amount taxable by the amount of the U.S. holder’s tax basis allocable to the portion of the shares of UGC common stock exchanged for cash. Dividend treatment would generally not apply to holders of UGC common stock (i) that receive solely cash in exchange for their UGC common stock and that do not actually or constructively own any stock of Liberty Global or UGC (under specified attribution rules) after giving effect to the UGC merger, or (ii) that receive solely Liberty Global common stock in exchange for their UGC common stock.
Reporting Requirements. Holders of UGC common stock will be required to file with their U.S. federal income tax return for the taxable year in which the UGC merger occurs a statement setting forth certain facts relating to the UGC merger, including their tax basis in the shares of UGC common stock exchanged in the UGC merger and the number of shares of Liberty Global common stock and the amount of cash received in the UGC merger. Holders of UGC common stock must also keep a permanent record of such facts relating to the exchange of their UGC common stock for Liberty Global common stock and/or cash pursuant to UGC merger.
U.S. Federal Income Tax Consequences to Non-U.S. Holders of UGC Common Stock
Scope of Discussion With Respect to Non-U.S. Holders. As previously stated, this summary does not address the U.S. federal income tax consequences to stockholders that are subject to special rules. With respect to a UGC stockholder who is a non-U.S. holder, this summary also does not apply to (1) a UGC stockholder that holds its UGC common stock in connection with a trade or business conducted in the United States or in connection with an office or fixed place of business located in the United States; or (2) a UGC stockholder that is affected by the provisions of an income tax treaty to which the United States is a party. This summary also does not address currency exchange issues. Any non-U.S. holder that may be subject to any of these tax rules is urged to consult his or her own tax advisor to determine the tax consequences to him or her of the UGC merger.
The tax consequences to non-U.S. holders of UGC common stock could be materially different if UGC or Liberty Global are or have previously been a U.S. real property holding corporation as of the closing date of the UGC merger, and certain exemptions do not apply. We do not believe that UGC or Liberty Global will be or will have previously been a U.S. real property holding corporation as of the closing date of the UGC merger, and therefore, such tax consequences are not discussed below.
Non-U.S. Holders of UGC Common Stock Who Receive Only Liberty Global Common Stock (and Cash for Fractional Shares) in the UGC Merger. A non-U.S. holder of UGC common stock that receives only Liberty Global common stock (and, as applicable, cash for fractional shares) in exchange for UGC common stock surrendered in the UGC merger will not be subject to U.S. federal income or withholding tax, except with respect to any cash received instead of fractional shares. A non-U.S. holder of UGC common stock generally will not be subject to U.S. federal income or withholding tax with respect to cash received instead of fractional shares unless such UGC stockholder is an individual that is present in the United States for 183 days or more in the taxable year of the UGC merger and certain other conditions are met.
Non-U.S. Holders of UGC Common Stock Who Elect to Receive Cash. A non-U.S. holder of UGC common stock that receives either a combination of Liberty Global common stock and cash in the UGC merger, or solely cash in the UGC merger will not be subject to U.S. federal income tax with respect to any shares of Liberty Global common stock or cash received in the UGC merger unless either (i) such non-U.S. holder is an individual that is present in the United States for 183 days or more in the taxable year of UGC merger and certain other conditions are met or (ii) the cash received in the UGC merger is taxable as a dividend as described above under “— U.S. Federal Income Tax Consequences to U.S. Holders of UGC Common Stock — Possible Dividend Treatment.”
If a non-U.S. holder of UGC common stock is an individual that is present in the United States for 183 days or more in the taxable year of UGC merger, and if certain other conditions are met, such non-U.S. holder will be subject to

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U.S. federal income tax at a rate of 30% (unless otherwise reduced by treaty) on all or part of the gain attributable to the UGC common stock. For a non-U.S. holder of UGC common stock who receives both Liberty Global common stock and cash in the UGC merger, the gain subject to tax will be calculated as described under “— U.S. Federal Income Tax Consequences to U.S. Holders of UGC Common Stock — U.S. Holders of UGC Common Stock Who Receive Cash and Liberty Global Common Stock in the UGC Merger.” For a non-U.S. holder of UGC common stock who receives only cash in the UGC merger, the gain subject to tax will be calculated as described under “— U.S. Federal Income Tax Consequences to U.S. Holders of UGC Common Stock — U.S. Holders of UGC Common Stock Who Receive Only Cash in the UGC Merger.”
If the receipt of cash is taxable as a dividend, a non-U.S. holder of UGC common stock will be subject to U.S. federal income tax at a rate of 30%, unless the tax rate is reduced by treaty. In addition, to ensure payment of the income tax, Liberty Global or any exchange agent is required to withhold tax at a rate of 30% (or a lower rate as may be specified by treaty) on dividend payments to non-U.S. holders. Amounts withheld are creditable against the U.S. federal income taxes owing by non-U.S. holders. Taxes that have been withheld are not refundable by Liberty Global or the exchange agent, although the taxpayer may be able to claim a refund from the Internal Revenue Service if the amounts withheld exceed the tax due. Due to the uncertainties about whether all or any portion of the cash payments will be taxable as a dividend, Liberty Global or the exchange agent expects to withhold tax at the required rate on all payments of cash to non-U.S. holders of UGC common stock (other than payments for fractional shares).
Backup Withholding and Information Reporting
In general, information reporting requirements will apply with respect to cash received pursuant to a cash election or in lieu of fractional shares by a U.S. holder in connection with the UGC merger. Due to the uncertainty about the application of Section 304 of the Code, Liberty Global expects to report cash payments made to UGC stockholders pursuant to a cash election as a dividend to the extent that Liberty Global or UGC has current or accumulated earnings and profits. This information reporting obligation, however, does not apply with respect to certain U.S. holders, including corporations, tax-exempt organizations, qualified pension and profit sharing trusts, and individual retirement accounts. In the event that a U.S. holder subject to the reporting requirements fails to supply its correct taxpayer identification number in the manner required by applicable law or is notified by the Internal Revenue Service that it has failed to properly report payments of interest and dividends, a backup withholding tax (at a rate that is currently 28%) generally will be imposed on the amount of the cash received pursuant to a cash election or in lieu of fractional shares. A U.S. holder may generally credit any amounts withheld under the backup withholding provisions against its U.S. federal income tax liability, and, as a result, may entitle the U.S. holder to a refund, provided the required information is furnished to the Internal Revenue Service. Such amounts, once withheld, are not refundable by Liberty Global or the exchange agent.
In general, information and backup withholding will apply with respect to cash received by a non-U.S. holder in connection with the UGC merger unless the non-U.S. holder certifies as to its non-U.S. status under penalties of perjury or otherwise establishes an exemption.

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THE TRANSACTION AGREEMENTS
Merger Agreement
The following is a summary of the material terms of the merger agreement. This summary may not contain all of the information that is important to you. It is qualified in its entirety by reference to the merger agreement, a copy of which is included as Appendix B and is incorporated herein by reference. You should read the merger agreement because it, and not this document, is the legal document that governs the terms of the mergers and will give you a more complete understanding of the mergers.
Structure of the Mergers
To effect the combination of LMI and UGC, a new company, Liberty Global, Inc. was formed with two wholly owned subsidiaries, Cheetah Acquisition Corp., which we refer to as LMI Merger Sub, and Tiger Global Acquisition Corp., which we refer to as UGC Merger Sub. At the effective time of the mergers:
  •  LMI Merger Sub will merge with and into LMI, and LMI will be the surviving corporation in that merger; and
 
  •  UGC Merger Sub will merge with and into UGC, and UGC will be the surviving corporation in that merger.
As a result of the mergers described above and the conversion and exchange of securities described below, LMI will become a direct wholly owned subsidiary of Liberty Global and UGC will become an indirect wholly owned subsidiary of Liberty Global. Following the mergers, Liberty Global will own directly 46.5% of the common stock of UGC and indirectly through Liberty Global’s wholly owned subsidiary LMI 53.5% of the common stock of UGC (based upon outstanding UGC share information as of March 31, 2005). See “— Conversion of Outstanding Shares of Common Stock of LMI and UGC” below.
Effective Time of the Mergers and Timing of Closing
LMI and UGC will file certificates of merger with the Delaware Secretary of State on the second business day after the day on which the last condition to completing the merger is satisfied or, where permissible, waived or at such other time as LMI and UGC may agree. The LMI merger and the UGC merger will become effective at the time and on the date on which those documents are filed, or later if the parties so agree and specify in those documents, provided that the LMI merger and the UGC merger will become effective at the same time. The time that the LMI merger and the UGC merger become effective is referred to as the effective time of the mergers.
We cannot assure you when, or if, all the conditions to completion of the mergers will be satisfied or, where permissible, waived. See “— Conditions to Completion of the Mergers.” The parties intend to complete the mergers as promptly as practicable, subject to receipt of the requisite approvals of the LMI stockholders and the UGC stockholders to the merger proposal.
Conversion of Outstanding Shares of Common Stock of LMI and UGC
LMI. At the effective time of the LMI merger:
  •  each share of LMI Series A common stock issued and outstanding immediately prior to the effective time of the mergers will be converted into the right to receive one share of Liberty Global Series A common stock;
 
  •  each share of LMI Series B common stock issued and outstanding immediately prior to the effective time of the mergers will be converted into the right to receive one share of Liberty Global Series B common stock; and
 
  •  each share of common stock of LMI Merger Sub issued and outstanding immediately prior to the effective time of the mergers will be converted into one share of common stock of LMI as the surviving corporation in the LMI merger.
UGC. At the effective time of the UGC merger:
  •  each share of UGC common stock (other than shares of UGC common stock held by LMI or any of its wholly owned subsidiaries) will be converted into the right to receive 0.2155 of a share of Liberty Global Series A common stock plus cash in lieu of any fractional shares, unless the holder thereof has validly made and not validly revoked an election to have such share of UGC common stock converted into $9.58 in cash, subject to certain limitations described in “— UGC Stockholders Making Stock and Cash Elections; Proration” below;
 
  •  each share of UGC common stock held by LMI or any of its wholly owned subsidiaries will be converted into the right to receive one share of the same class of common stock of UGC; and

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  •  the issued and outstanding shares of common stock of UGC Merger Sub will be converted into a number of shares of each class of common stock of UGC, as the surviving corporation in the UGC merger, that is identical to the number of shares of the same class of UGC common stock that are converted into the right to receive Liberty Global Series A common stock and/or cash in the UGC merger.
For information on how holders of UGC common stock can elect to receive Liberty Global Series A common stock and/or cash in the UGC merger, see “— UGC Stockholders Making Stock and Cash Elections; Proration” below.
The rights pertaining to Liberty Global common stock will be the same in all material respects as the rights pertaining to LMI common stock, because the restated certificate of incorporation and bylaws of Liberty Global in effect immediately after the completion of the mergers will be substantially similar to the current restated certificate of incorporation and bylaws of LMI. For a description of Liberty Global’s common stock, see “Description of Liberty Global Capital Stock,” and for a description of the comparative rights of holders of LMI common stock, UGC common stock and Liberty Global common stock, see “Comparison of the Rights of Stockholders of LMI, UGC and Liberty Global.”
If, before the effective time of the mergers, the outstanding shares of LMI common stock and/or UGC common stock are changed into a different number of shares as a result of a stock split, stock dividend or other reclassification or exchange, an appropriate adjustment will be made to the consideration to be received in the mergers to provide the holders of LMI and UGC common stock the same economic effect as contemplated by the merger agreement.
UGC Stockholders Making Stock and Cash Elections; Proration
UGC stockholders are receiving a form of election with this joint proxy statement/ prospectus for making cash and stock elections. Any UGC stockholder who became a UGC stockholder after the record date for the UGC special meeting, or who did not otherwise receive a form of election, should contact the exchange agent to obtain a form of election. UGC stockholders who vote against the merger proposal are still entitled to make elections with respect to their shares. The form of election allows holders of UGC common stock to make cash or stock elections for some or all of their shares of UGC common stock. If a holder or the holder’s affiliates are the registered holders of shares of UGC common stock represented by more than one certificate or held in more than one account, the holder may also specify on the form of election how to allocate cash consideration, if any, among those shares of UGC common stock. Shares of UGC common stock as to which the holder has not made a valid election prior to the election deadline, including as a result of revocation, will be treated as though the holder made an election to receive the stock consideration for all shares with respect to which no valid election was made prior to the election deadline.
LMI stockholders do not need to make an election since each outstanding share of LMI common stock will be converted into one share of the corresponding series of Liberty Global common stock, with no cash option available.
The U.S. federal income tax consequences of the UGC merger to each UGC stockholder will depend upon whether the UGC stockholder receives cash or stock of Liberty Global, or a combination of cash and stock, in exchange for his or her shares of UGC common stock. However, at the time that a UGC stockholder is required to make a cash or stock election, the UGC stockholder will not know if, and to what extent, the proration procedures described below will change the mix of consideration that he or she will receive in the UGC merger. As a result of the proration, among other reasons, at the time that a UGC stockholder is required to make a cash or stock election, the UGC stockholder will not know the tax consequences to him or her with certainty. For more information regarding the tax consequences of the UGC merger to the UGC stockholders, please see “Material United States Federal Income Tax Consequences of the Mergers — U.S. Federal Income Tax Consequences of the UGC Merger.”
Exchange Agent. EquiServe Trust Company N.A. will serve as the exchange agent for purposes of effecting the election and proration procedures.
Election Deadline. The election deadline will be 5:00 p.m., New York City time, on [                    ] 2005. If the completion of the mergers is anticipated to occur more than four business days after [                    ], 2005, LMI and UGC will publicly announce, by issuing a press release to the Dow Jones News Service by 9:00 a.m. on the business day immediately following the initial election deadline, the anticipated effective date of the mergers, which will not be earlier than the fourth business day after the date of the press release. The new election deadline will be 5:00 p.m., New York City time, on the second business day preceding the anticipated effective date of the mergers.
Form of Election. The form of election must be properly completed and signed and accompanied by certificates representing all of the shares of UGC common stock covered by the form of election, duly endorsed in blank or otherwise in a form acceptable for transfer on UGC’s books (or appropriate evidence as to the loss, theft or destruction,

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appropriate evidence as to the ownership of that certificate by the claimant, and appropriate and customary indemnification, as described in the form of election).
In order to make a cash or stock election, the properly completed and signed form of election, together with the UGC stock certificates, must be actually received by the exchange agent at or prior to the election deadline in accordance with the instructions in the form of election.
If shares of UGC common stock are held in street name, to make an election the beneficial owner should contact his or her broker, bank or other nominee and follow their instructions as to how to make their election.
Inability to Sell Shares as to which an Election is Made. Stockholders who have made elections will be unable to sell their shares of UGC common stock after making the election, unless the election is properly revoked before the election deadline or the merger agreement is terminated.
Election Revocation and Changes. Generally, an election may be revoked or changed with respect to all or a portion of the shares of UGC common stock covered by the election by the holder who submitted the applicable form of election, but only by written notice received by the exchange agent prior to the election deadline. If an election is validly revoked, or the merger agreement is terminated, the exchange agent will promptly return the related stock certificates (or book-entry shares) to the stockholder who submitted them. UGC stockholders will not be entitled to revoke or change their elections following the election deadline. As a result, UGC stockholders who have made elections will be unable to revoke their elections or sell their shares of UGC common stock during the interval between the election deadline and the date of completion of the mergers.
Shares of UGC common stock as to which the holder has not made a valid election prior to the election deadline, including as a result of revocation, will be deemed non-electing shares. If it is determined that any purported cash election or stock election was not properly made, the purported election will be deemed to be of no force or effect and the holder making the purported election will be deemed not to have made an election for these purposes, unless a proper election is subsequently made on a timely basis.
Non-Electing Holders. UGC stockholders who make no election to receive cash consideration or stock consideration in the UGC merger, whose elections are not received by the exchange agent by the election deadline, or whose forms of election are improperly completed or are not signed or not accompanied by the shares of UGC common stock to which they relate will be deemed not to have made an election. UGC stockholders not making an election in respect of their shares of UGC common stock will be deemed to have made an election to receive only Liberty Global common stock, and not to receive any cash (other than cash in lieu of fractional shares), for the shares of UGC common stock held by such stockholder.
Proration Procedures. UGC stockholders should be aware that cash elections they make may be subject to the proration procedures provided in the merger agreement. Regardless of the cash or stock elections made by UGC stockholders, these procedures are designed to ensure that the total cash consideration paid (exclusive of cash paid for fractional shares) represents no more than 20% of the aggregate value of the merger consideration payable to UGC stockholders (other than those stockholders who are “Permitted Holders” under UGC’s indenture with respect to the UGC convertible notes). Accordingly, the proration procedures described below will be triggered if the number of shares of UGC common stock as to which a valid cash election is made and not revoked exceeds a number we refer to as the “UGC share threshold number.” Under the merger agreement, the UGC share threshold number is equal to (rounded down to the nearest whole number):
                 
Last sales price of a share of LMI Series A common stock on the trading day immediately prior to the effective time of the mergers  
×
 
0.2155
 
×
  Outstanding shares of UGC Class A stock (other than shares held by “Permitted Holders”) immediately prior to the effective time of the mergers
 
                         
38.32   +   (   Last sales price of a share of LMI Series A common stock on the trading day immediately prior to the effective time of the mergers   ×   0.2155   )
If the total number of shares of UGC common stock as to which cash elections are validly made and not validly revoked is greater then the UGC share threshold number, then each UGC stockholder who validly made and did not validly revoke a cash election will be entitled to receive $9.58 in cash per share with respect to that number of shares of UGC common stock equal to (rounded down to the nearest whole number):
         
Number of shares of UGC common stock held by such stockholder as to which a cash election is validly made and not validly revoked  
×
  UGC share threshold number
 
Total number of shares of UGC common stock as to which cash elections are validly made and not validly revoked.

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The remaining number of