<TABLE>
                                                                    Exhibit 99.1
                              "LIBERTY MEDIA GROUP"
             (a combination of certain assets, as defined in note 1)
                             Combined Balance Sheets
                                   (unaudited)
<CAPTION>                                                                     June 30,            December 31,
                                                                                 2000                    1999
                                                                         ----------------       -----------------
                                                                                      amounts in millions
<S>                                                                           <C>                          <C>
Assets
------
Current assets:

   Cash and cash equivalents                                                  $     1,271                   1,714

   Cash collateral under securities lending agreement (note 6)                        423                      --

   Short-term investments                                                             369                     378

   Trade and other receivables, net                                                   243                     134

   Prepaid expenses and committed program rights                                      517                     406

   Deferred income tax assets                                                         595                     750

   Other current assets                                                                15                       5
                                                                         ----------------       -----------------
         Total current assets                                                       3,433                   3,387
                                                                         ----------------       -----------------
Investments in affiliates, accounted for under the equity method, and
   related receivables (note 3)                                                    17,943                  15,922

Investments in available-for-sale securities and others (notes 4, 5
   and 6)                                                                          29,567                  28,601

Property and equipment, at cost                                                       783                     162
   Less accumulated depreciation                                                       84                      19
                                                                         ----------------       -----------------
                                                                                      699                     143
                                                                         ----------------       -----------------
Intangible assets:
   Excess cost over acquired net assets (note 5)                                   10,953                   9,973
   Franchise costs                                                                    269                     273
                                                                         ----------------       -----------------
                                                                                   11,222                  10,246
   Less accumulated amortization                                                      735                     454
                                                                         ----------------       -----------------
                                                                                   10,487                   9,792
                                                                         ----------------       -----------------
Other assets, at cost, net of accumulated amortization                                897                     839
                                                                         ----------------       -----------------
         Total assets                                                         $    63,026                  58,684
                                                                         ================       =================
</TABLE>
                                   (continued)
<PAGE>
<TABLE>
                             Combined Balance Sheets

                                   (unaudited)
<CAPTION>                                                                      June 30,            December 31,
                                                                                 2000                    1999
                                                                         ----------------       ----------------
                                                                                   amounts in millions
<S>                                                                         <C>                           <C>
Liabilities and Combined Equity
-------------------------------
Current liabilities:

   Accounts payable                                                         $          81                     44

   Accrued liabilities                                                                355                    201

   Accrued stock compensation                                                       1,978                  2,405

   Program rights payable                                                             179                    166

   Current portion of debt                                                            203                    554
                                                                         ----------------       ----------------
        Total current liabilities                                                   2,796                  3,370
                                                                         ----------------       ----------------
Long-term debt (note 6)                                                             6,340                  2,723

Deferred income tax liabilities                                                    14,242                 14,107

Other liabilities                                                                      32                     23
                                                                         ----------------       ----------------
        Total liabilities                                                          23,410                 20,223
                                                                         ----------------       ----------------
Minority interests in equity of attributed subsidiaries                               266                      1

Obligation to redeem AT&T Liberty Media Group tracking stock (note 7)                  55                     --

Combined equity (note 7):

   Combined equity                                                                 34,212                 31,876

   Accumulated other comprehensive earnings, net of taxes                           4,996                  6,557
                                                                         ----------------       ----------------
                                                                                   39,208                 38,433
   Due to related parties                                                              87                     27
                                                                         ----------------       ----------------
     Total combined equity                                                         39,295                 38,460
                                                                         ----------------       ----------------
Commitments and contingencies (note 8)

        Total liabilities and combined equity                               $      63,026                 58,684
                                                                         ================       ================
<FN>
See accompanying notes to combined financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
          Combined Statements of Operations and Comprehensive Earnings

                                   (unaudited)
<CAPTION>                                                                Three months             Three months
                                                                            ended                    ended
                                                                        June 30, 2000            June 30, 1999
                                                                      ----------------         ----------------
<S>                                                                       <C>                             <C>
Revenue                                                                   $        382                      221
Operating costs and expenses:
   Operating, selling, general and administrative                                  295                      184
   Stock compensation                                                             (216)                     496
   Depreciation and amortization                                                   236                      177
                                                                      ----------------         ----------------
                                                                                   315                      857
                                                                      ----------------         ----------------
        Operating income (loss)                                                     67                     (636)

Other income (expense):
   Interest expense                                                               (100)                     (33)
   Adjustment to interest expense for contingent portion of
      exchangeable debentures (note 6)                                             200                       --
   Dividend and interest income                                                     85                       82
   Share of losses of affiliates, net (note 3)                                    (412)                    (279)
   Minority interests in losses of attributed subsidiaries                          36                       12
   Gain (loss) on dispositions, net (note 3)                                       611                       (2)
   Other, net                                                                        2                       (4)
                                                                      ----------------         ----------------
                                                                                   422                     (224)
                                                                      ----------------         ----------------
        Earnings (loss) before income taxes                                        489                     (860)

Income tax benefit (expense)                                                      (222)                     317
                                                                      ----------------         ----------------
        Net earnings (loss)                                               $        267                     (543)
                                                                      ----------------         ----------------
Other comprehensive earnings (loss), net of taxes:

   Foreign currency translation adjustments                                        (87)                     (55)
   Unrealized holding gains (losses) arising during the period, net
      of reclassification adjustments                                           (3,224)                   1,118
                                                                      ----------------         ----------------
   Other comprehensive earnings (loss)                                          (3,311)                   1,063
                                                                      ----------------         ----------------
Comprehensive earnings (loss)                                             $     (3,044)                     520
                                                                      ================         ================
<FN>
See accompanying notes to combined financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
          Combined Statements of Operations and Comprehensive Earnings

                                   (unaudited)
<CAPTION>                                                                 New Liberty                           Old Liberty
                                                         -----------------------------------------------     ---------------------
                                                                            (note 1)                               (note 1)
                                                              Six months               Four months                Two months
                                                                 ended                    ended                      ended
                                                             June 30, 2000            June 30, 1999            February 28, 1999
                                                         ----------------------   ----------------------     ---------------------
                                                                                    amounts in millions
<S>                                                        <C>                             <C>                        <C>
Revenue                                                    $        617                      292                       282
Operating costs and expenses:
   Operating, selling, general and administrative                   469                      240                       227
   Stock compensation                                              (239)                     455                       183
   Depreciation and amortization                                    403                      230                        47
                                                         ----------------         ----------------           ---------------
                                                                    633                      925                       457
                                                         ----------------         ----------------           ---------------
        Operating income (loss)                                     (16)                    (633)                     (175)

Other income (expense):
   Interest expense                                                (175)                     (46)                      (28)
   Adjustment to interest expense for contingent portion of
      exchangeable debentures (note 6)                             (164)                      --                        --
   Dividend and interest income                                     165                      106                        12
   Share of losses of affiliates, net (note 3)                     (794)                    (359)                      (66)
   Minority interests in losses of attributed subsidiaries           28                       12                         4
   Gain (loss) on dispositions, net (notes 3, 4 and 5)            3,055                       (2)                       14
   Gains on issuance of equity by affiliates and
      subsidiaries (note 3)                                          --                       --                       389
   Other, net                                                         7                       (4)                       --
                                                         ----------------         ----------------           ---------------
                                                                  2,122                     (293)                      325
                                                         ----------------         ----------------           ---------------
        Earnings (loss) before income taxes                       2,106                     (926)                      150

Income tax (expense) benefit                                       (897)                     325                      (209)
                                                         ----------------         ----------------           ---------------
        Net earnings (loss)                                $      1,209                     (601)                      (59)
                                                         ----------------         ----------------           ---------------
Other comprehensive earnings (loss), net of taxes:
   Foreign currency translation adjustments                        (118)                     (43)                      (15)
   Unrealized holding gains (losses) arising during the
      period, net of reclassification adjustments                (1,443)                   2,012                       971
                                                         ----------------         ----------------           ---------------
   Other comprehensive earnings (loss)                           (1,561)                   1,969                       956
                                                         ----------------         ----------------           ---------------
Comprehensive earnings (loss)                              $       (352)                   1,368                       897
                                                         ================         ================           ===============
<FN>
See accompanying notes to combined financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                              "LIBERTY MEDIA GROUP"
             (a combination of certain assets, as defined in note 1)

                          Combined Statement of Equity

                         Six months ended June 30, 2000

                                   (unaudited)
<CAPTION>                                                                           Accumulated
                                                                                       other             Due to
                                                                                   comprehensive         (from)          Total
                                                                   Combined           earnings,          related        combined
                                                                    equity          net of taxes         parties         equity
                                                                -------------     ---------------    -------------    ----------
                                                                                         amounts in millions
<S>                                                             <C>                        <C>                  <C>       <C>
Balance at January 1, 2000                                      $      31,876               6,557               27        38,460
   Net earnings                                                         1,209                  --               --         1,209
   Issuance of AT&T Liberty Media Group tracking stock for
     acquisitions (note 5)                                              1,024                  --               --         1,024
   Issuances of common stock by attributed subsidiaries and
     affiliates, net of taxes                                             167                  --               --           167
   Purchase of AT&T Liberty Media Group tracking stock                     (9)                 --               --            (9)
   Premium received in connection with put obligation, net                  4                  --               --             4
   Reclassification of redemption amount of AT&T Liberty
     Media Group tracking stock subject to put obligation                 (55)                 --               --           (55)
   Utilization of net operating losses of Liberty Media Group
     by AT&T                                                               (4)                 --               --            (4)
   Foreign currency translation adjustments                                --                (118)              --          (118)
   Recognition of previously unrealized gains on
     available-for-sale securities, net                                    --              (1,479)              --        (1,479)
   Unrealized gains on available-for-sale securities                       --                  36               --            36
   Other transfers from related parties, net                               --                  --               60            60
                                                                -------------     ---------------    -------------    ----------
Balance at June 30, 2000                                        $      34,212               4,996               87        39,295
                                                                =============     ===============      ===========    ==========
<FN>
See accompanying notes to combined financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                              "LIBERTY MEDIA GROUP"
             (a combination of certain assets, as defined in note 1)

                        Combined Statements of Cash Flows

                                   (unaudited)
<CAPTION>                                                                New Liberty                            Old Liberty
                                                       -----------------------------------------------     ------------------------
                                                                           (note 1)                               (note 1)
                                                             Six months               Four months                Two months
                                                                ended                    ended                      ended
                                                            June 30, 2000            June 30, 1999            February 28, 1999
                                                       ----------------------   ----------------------     ------------------------
                                                                                  amounts in millions
                                                                                      (see note 2)
<S>                                                         <C>                             <C>                            <C>
Cash flows from operating activities:
   Net earnings (loss)                                      $       1,209                     (601)                         (59)
   Adjustments to reconcile net earnings (loss) to net cash
     provided (used) by operating activities:
        Depreciation and amortization                                 403                      230                           47
        Stock compensation                                           (239)                     455                          183
        Payments of stock compensation                               (283)                     (27)                        (126)
        Share of losses of affiliates, net                            794                      359                           66
        Deferred income tax expense (benefit)                         930                     (314)                         205
        Intergroup tax allocation                                     (34)                     (14)                          --
        Cash payment from AT&T pursuant to tax sharing agreement      123                       45                           --
        Minority interests in losses of attributed subsidiaries       (28)                     (12)                          (4)
        Loss (gain) on disposition of assets, net                  (3,055)                       2                          (14)
        Gains on issuance of equity by affiliates and
          subsidiaries                                                 --                       --                         (389)
        Noncash interest                                              169                       --                           --
        Other noncash charges                                          --                       --                            9
        Changes in operating assets and liabilities, net of
          the effect of acquisitions and dispositions:
             Change in receivables                                     24                      (12)                         (19)
             Change in prepaid expenses and committed
               program rights                                        (102)                      (7)                         (10)
             Change in payables and accruals                           88                       67                            4
                                                            -----------------        -----------------          -------------------
                 Net cash provided (used) by operating
                    activities                                         (1)                     171                         (107)
                                                            -----------------        -----------------          -------------------
Cash flows from investing activities:
   Cash paid for acquisitions                                        (546)                      (1)                          --
   Capital expended for property and equipment                        (82)                     (16)                         (21)
   Investments in and loans to affiliates and others               (2,336)                    (434)                         (45)
   Purchases of marketable securities                                (735)                  (6,172)                        (132)
   Sales and maturities of marketable securities                    1,326                    2,759                           34
   Cash proceeds from dispositions                                     87                        2                           43
   Cash balances of deconsolidated subsidiaries                        --                       --                          (53)
   Other, net                                                           8                      (12)                          (9)
                                                            -----------------        -----------------          -------------------
                 Net cash used by investing activities             (2,278)                  (3,874)                        (183)
                                                            -----------------        -----------------          -------------------
</TABLE>
                                   (continued)
<PAGE>
<TABLE>
                  Combined Statements of Cash Flows, continued

                                   (unaudited)
<CAPTION>                                                               New Liberty                            Old Liberty
                                                       -----------------------------------------------     ---------------------
                                                                          (note 1)                                (note 1)
                                                             Six months               Four months                Two months
                                                                ended                    ended                      ended
                                                            June 30, 2000            June 30, 1999            February 28, 1999
                                                       ----------------------   ----------------------     ---------------------
                                                                                  amounts in millions
                                                                                      (see note 2)
<S>                                                            <C>                             <C>                         <C>
Cash flows from financing activities:
   Borrowings of debt                                                  3,022                      495                       156
   Repayments of debt                                                 (1,123)                    (463)                     (148)
   Premium received on put contracts, net                                  4                       --                        --
   Purchase of AT&T Liberty Media Group tracking stock                    (9)                      --                        --
   Cash transfers (to) from related parties                              (59)                    (160)                      132
   Repurchase of stock of subsidiaries                                    --                       --                       (45)
   Other, net                                                              1                       16                        (1)
                                                             ----------------        -----------------          ----------------
                 Net cash provided (used) by financing
                    activities                                         1,836                     (112)                       94
                                                             ----------------        -----------------          ----------------
                    Net decrease in cash and cash
                        equivalents                                     (443)                  (3,815)                     (196)

                    Cash and cash equivalents at beginning
                        of period                                      1,714                    5,319                       407
                                                             ----------------        -----------------          ----------------
                    Cash and cash equivalents at end of
                        period                                 $       1,271                    1,504                       211
                                                             ================        =================          ================
<FN>
See accompanying notes to combined financial statements.
</FN>
</TABLE>
<PAGE>
                              "LIBERTY MEDIA GROUP"
             (a combination of certain assets, as defined in note 1)
                     Notes to Combined Financial Statements
                                  June 30, 2000
                                   (unaudited)

(1)      Basis of Presentation

         The accompanying  combined financial statements include the accounts of
         the subsidiaries and assets of AT&T Corp.  ("AT&T") that are attributed
         to Liberty  Media  Group,  as  defined  below.  On March 9, 1999,  AT&T
         acquired  Tele-Communications,  Inc.  ("TCI"),  the former owner of the
         assets attributed to Liberty Media Group, in a merger  transaction (the
         "AT&T  Merger").  The AT&T  Merger  has been  accounted  for  using the
         purchase  method.   Accordingly,   Liberty  Media  Group's  assets  and
         liabilities  have been recorded at their  respective fair market values
         therefor,  creating a new cost basis. For financial  reporting purposes
         the AT&T Merger and related  restructuring  transactions  are deemed to
         have occurred on March 1, 1999. Accordingly, for periods prior to March
         1, 1999 the assets and  liabilities  attributed  to Liberty Media Group
         and the related combined financial statements are sometimes referred to
         herein as "Old  Liberty",  and for periods  subsequent  to February 28,
         1999 the assets and  liabilities  attributed to Liberty Media Group and
         the related  combined  financial  statements are sometimes  referred to
         herein as "New Liberty".  The "Company" and "Liberty Media Group" refer
         to both New Liberty and Old Liberty.

         At June 30, 2000,  Liberty  Media Group  consisted  principally  of the
         following:

         o    AT&T's assets and businesses  which provide  programming  services
              including  production,  acquisition and  distribution  through all
              available formats and media of branded entertainment,  educational
              and informational  programming and software,  including multimedia
              products;

         o    AT&T's  assets and  businesses  engaged in  electronic  retailing,
              direct  marketing,   advertising  sales  relating  to  programming
              services, infomercials and transaction processing;

         o    certain of AT&T's interests in technology and Internet businesses;

         o    certain of  AT&T's assets and businesses engaged  in international
              cable, telephony and programming businesses; and,

         o    AT&T's holdings in a class of tracking stock of Sprint Corporation
              (the "Sprint PCS Group Stock").

         All  significant  intercompany  accounts  and  transactions  have  been
         eliminated.  The combined  financial  statements of Liberty Media Group
         are presented for purposes of additional  analysis of the  consolidated
         financial  statements  of AT&T and should be read in  conjunction  with
         such consolidated financial statements.

         The accompanying  interim combined  financial  statements are unaudited
         but, in the opinion of management,  reflect all adjustments (consisting
         of normal recurring  accruals) necessary for a fair presentation of the
         results for such  periods.  The results of  operations  for any interim
         period are not  necessarily  indicative  of results  for the full year.
         These combined financial  statements should be read in conjunction with
         the combined  financial  statements  and notes  thereto  included as an
         exhibit to AT&T's  Report on Form 10-K for the year ended  December 31,
         1999.

                                   (continued)
<PAGE>
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities  at the date of the financial  statements  and the reported
         amounts of revenue and expenses  during the  reporting  period.  Actual
         results could differ from those estimates.

         Effective June 9, 2000,  AT&T issued stock dividends to holders of AT&T
         Liberty  Media  Group  tracking  stock (the  "Liberty  Dividend").  The
         Liberty  Dividend  consisted of one share of AT&T  Liberty  Media Group
         tracking stock for every one share of AT&T Liberty Media Group tracking
         stock  owned.  The Liberty  Dividend has been treated as a stock split,
         and  accordingly,  all share  amounts have been restated to reflect the
         Liberty Dividend.

         Certain prior period amounts have been  reclassified for  comparability
         with the 2000 presentation.

(2)      Supplemental Disclosures to Combined Statements of Cash Flows

         Cash paid for  interest  was $121 million for the six months ended June
         30, 2000, $58 million for the four month period ended June 30, 1999 and
         $32 million for the two month period ended February 28, 1999. Cash paid
         for income  taxes for the six  months  ended  June 30,  2000,  the four
         months ended June 30, 1999 and the two months  ended  February 28, 1999
         was not material.
<TABLE>
<CAPTION>                                                        New Liberty               Old Liberty
                                                         ---------------------------      -------------
                                                                   (note 1)                 (note 1)
                                                         Six months      Four months       Two months
                                                           ended            ended            ended
                                                          June 30,        June 30,        February 28,
                                                            2000            1999              1999
                                                         ----------      -----------      ------------
                                                                     amounts in millions
         <S>                                             <C>                      <C>               <C>
         Cash paid for acquisitions (note 5):
                Fair value of assets acquired            $    3,415                3                --
                Net liabilities assumed                      (1,119)              (2)               --
                Deferred tax liability recorded                (347)              --                --
                Minority interests in equity of
                   acquired attributed subsidiaries            (379)              --                --
                AT&T Liberty Media Group tracking
                   stock issued                              (1,024)              --                --
                                                         ----------      -----------      ------------
                Cash paid for acquisitions
                                                         $      546                1                --
                                                         ==========      ===========      ============
</TABLE>
                                   (continued)
<PAGE>
         The following  table  reflects the change in cash and cash  equivalents
         resulting from the AT&T Merger and related  restructuring  transactions
         (amounts in millions):

         Cash and cash equivalents prior to the AT&T Merger        $       211
             Cash received in restructuring transactions, net
               of cash balances transferred                              5,284
             Cash paid to TCI Group for certain warrants (note 4)         (176)
                                                                   -------------
         Cash and cash equivalents subsequent to the AT&T Merger   $     5,319

         Liberty  Media Group ceased to include TV Guide,  Inc.  ("TV Guide") in
         its combined  financial results and began to account for TV Guide using
         the equity method of accounting,  effective March 1, 1999 (see note 3).
         The effect of  changing  the method of  accounting  for  Liberty  Media
         Group's ownership interest in TV Guide from the consolidation method to
         the equity method is summarized below (amounts in millions):

         Assets (other than cash and cash equivalents)
           reclassified to investments in affiliates               $      (200)
         Liabilities reclassified to investments in affiliates             190
         Minority interests in equity of attributed subsidiaries
           reclassified to investments in affiliates                        63
                                                                   -------------
         Decrease in cash and cash equivalents                     $        53
                                                                   =============

(3)      Investments in Affiliates Accounted for under the Equity Method
         ---------------------------------------------------------------

         Liberty  Media Group has various  investments  accounted  for under the
         equity  method.  The  following  table  includes  Liberty Media Group's
         carrying amount of the more significant investments in affiliates:
<TABLE>
<CAPTION>                                                     June 30, 2000           December 31, 1999
                                                        ----------------------     -----------------------
                                                                       amounts in millions
         <S>                                                 <C>                                 <C>
         USA Networks, Inc. ( "USAI ") and related
             investments                                     $        2,848                       2,699
         Telewest Communications plc ( "Telewest ")                   3,048                       1,996
         Discovery Communications, Inc. ("Discovery")                 3,313                       3,441
         TV Guide                                                     1,708                       1,732
         QVC Inc. ( "QVC ")                                           2,510                       2,515
         Teligent, Inc. ( "Teligent")                                 1,202                          --
         Flextech p.l.c. ("Flextech")                                    --                         727
         UnitedGlobalCom, Inc. ("UnitedGlobalCom")                      445                         505
         Various foreign equity investments (other than
             Telewest and Flextech)                                   1,536                       1,463
         Other                                                        1,333                         844
                                                        -------------------        --------------------
                                                             $       17,943                      15,922
                                                        ===================        ====================
</TABLE>
                                   (continued)
<PAGE>
         The following  table  reflects  Liberty Media Group's share of earnings
(losses) of affiliates:
<TABLE>
<CAPTION>                                                     New Liberty                      Old Liberty
                                               ------------------------------------------   -----------------
                                                               (note 1)                          (note 1)
                                                   Six months             Four months           Two months
                                                     ended                   ended                ended
                                                    June 30,               June 30,            February 28,
                                                      2000                   1999                  1999
                                               --------------------    -------------------  -----------------
                                                                       amounts in millions
         <S>                                    <C>                            <C>                    <C>
         USAI and related investments           $         (16)                   (9)                   10
         Telewest                                        (168)                  (97)                  (38)
         Discovery                                       (128)                  (76)                   (8)
         TV Guide                                         (25)                  (11)                   --
         QVC                                               (5)                   (9)                   13
         Teligent                                        (152)                   --                    --
         Flextech                                         (18)                  (13)                   (5)
         UnitedGlobalCom                                  (88)                   --                    --
         Other foreign investments                       (130)                  (56)                  (22)
         Other                                            (64)                  (88)                  (16)
                                               --------------------    -------------------  -----------------
                                                $        (794)                 (359)                  (66)
                                               ====================    ===================  =================
</TABLE>
         Summarized  unaudited combined financial  information for affiliates is
as follows:
<TABLE>
<CAPTION>                                                     New Liberty                     Old Liberty
                                               ------------------------------------------   -----------------
                                                                (note 1)                        (note 1)
                                                   Six months             Four months          Two months
                                                     ended                   ended               ended
                                                    June 30,               June 30,           February 28,
                                                      2000                   1999                 1999
                                               ---------------------   -------------------  -----------------
                                                                       amounts in millions
              <S>                               <C>                          <C>                    <C>
              Revenue                           $      7,896                  4,060                  2,341
              Operating expenses                      (7,296)                (3,451)                (1,894)
              Depreciation and amortization           (1,545)                  (520)                  (353)
                                               ---------------------   -------------------  -----------------
                  Operating income (loss)               (945)                    89                     94
              Interest expense                        (1,167)                  (323)                  (281)
              Other, net                                 125                   (244)                  (127)
                                               ---------------------   -------------------  -----------------
                  Net loss                      $     (1,987)                  (478)                  (314)
                                               =====================   ===================  =================
</TABLE>
                                   (continued)
<PAGE>
         USAI owns and operates businesses in network and television production,
         television  broadcasting,  electronic retailing,  ticketing operations,
         and internet  services.  At June 30, 2000, Liberty Media Group directly
         and indirectly held 74.4 million shares of USAI's common stock. Liberty
         Media Group also held shares  directly in certain  subsidiaries of USAI
         which are  exchangeable  into 79.0 million shares of USAI common stock.
         Liberty Media Group's direct ownership of USAI is currently  restricted
         by Federal Communications Commission ("FCC") regulations.  The exchange
         of these  shares  can be  accomplished  only if  there  is a change  to
         existing  regulations or if Liberty Media Group obtains permission from
         the FCC. If the exchange of subsidiary stock into USAI common stock was
         completed at June 30, 2000, Liberty Media Group would own 153.4 million
         shares or approximately  21% (on a fully-diluted  basis) of USAI common
         stock.  USAI's  common  stock  reported a closing  price of $21-5/8 per
         share on June 30, 2000.

         Telewest   currently  operates  and  constructs  cable  television  and
         telephone  systems in the UK. Flextech  develops and sells a variety of
         television  programming  in the UK. In April  2000,  Telewest  acquired
         Flextech.  As a result,  each share of Flextech was  exchanged for 3.78
         new Telewest  shares.  Prior to the  acquisition,  Liberty  Media Group
         owned an approximate  37% equity  interest in Flextech and a 22% equity
         interest in Telewest.  As a result of the  acquisition,  Liberty  Media
         Group owns an approximate  24.6% equity  interest in Telewest.  Liberty
         Media Group  recognized  a $649  million  gain  (excluding  related tax
         expense of $227 million) on the  acquisition  during the second quarter
         of 2000 based on the  difference  between the carrying value of Liberty
         Media  Group's  interest in Flextech and the fair value of the Telewest
         shares received. At June 30, 2000, Liberty Media Group indirectly owned
         724 million of the issued and  outstanding  Telewest  ordinary  shares.
         Telewest's  ordinary shares reported a closing price of $3.46 per share
         on June 30, 2000.

         Teligent is a full-service,  facilities based communications company in
         which Liberty Media Group acquired an approximate  40% equity  interest
         in its January 14, 2000 acquisition of The Associated  Group, Inc. (the
         "Associated Group") (see note 5). At June 30, 2000, Liberty Media Group
         held 21 million  shares of Teligent  Class A common  stock.  Teligent's
         Class A common stock  reported a closing  price of $23-5/8 per share on
         June 30, 2000.

                                   (continued)

<PAGE>
         On March 1, 1999,  United Video Satellite Group,  Inc. ("UVSG") and The
         News Corporation Limited ("News Corp.") completed a transaction whereby
         UVSG  acquired  News  Corp.'s TV Guide  properties,  creating a broader
         platform  for  offering  television  guide  services to  consumers  and
         advertisers,  and UVSG was renamed TV Guide. News Corp.  received total
         consideration  of $1.9  billion  including  $800  million  in cash,  45
         million shares of TV Guide's Class A common stock and 75 million shares
         of TV Guide's  Class B common  stock valued at an average of $9.325 per
         share.  In  addition,  News Corp.  purchased  approximately  13 million
         additional  shares of TV Guide's  Class A common stock for $129 million
         in order to equalize its ownership with that of Liberty Media Group. As
         a result of these transactions,  and another  transaction  completed on
         the same date,  News Corp,  Liberty  Media Group and TV Guide's  public
         stockholders own on an economic basis  approximately  44%, 44% and 12%,
         respectively, of TV Guide. Following such transactions,  News Corp. and
         Liberty Media Group each have  approximately 49% of the voting power of
         TV Guide's  outstanding  stock.  In connection  with the increase in TV
         Guide's  equity,  net of dilution of Liberty  Media  Group's  ownership
         interest in TV Guide,  Liberty  Media Group  recognized  a gain of $372
         million (before deducting deferred income taxes of $147 million).

         The Class A common  stock of TV Guide is publicly  traded.  At June 30,
         2000,  Liberty  Media Group held 58 million  shares of TV Guide Class A
         common  stock and 75 million  shares of TV Guide Class B common  stock.
         The TV Guide Class B common stock is convertible,  one-for-one, into TV
         Guide Class A common stock.  TV Guide's Class A common stock reported a
         closing price of $34.25 per share on June 30, 2000.

         UnitedGlobalCom is the largest global broadband communications provider
         of video,  voice and data services with operations in over 20 countries
         throughout  the world.  At June 30, 2000,  Liberty Media Group owned an
         approximate 11% economic ownership interest representing an approximate
         37%  voting  interest  in  UnitedGlobalCom.  UnitedGlobalCom's  Class A
         common stock  reported a closing  price of $46.75 per share on June 30,
         2000.  Liberty Media Group owns 9.9 million  shares of  UnitedGlobalCom
         Class B common  stock,  which stock is  convertible,  on a  one-for-one
         basis, into UnitedGlobalCom Class A common stock.

         The $13 billion  aggregate  excess of Liberty Media  Group's  aggregate
         carrying   amount  in  its   affiliates   over  Liberty  Media  Group's
         proportionate  share of its  affiliates'  net assets is being amortized
         over an estimated useful life of 20 years.

                                   (continued)

<PAGE>
(4)      Investments in Available-for-sale Securities and Others
         -------------------------------------------------------

         Investments in available-for-sale  securities and others are summarized
as follows:
<TABLE>
<CAPTION>                                                                     June 30,          December 31,
                                                                                2000                1999
                                                                          --------------     ----------------
                                                                                   amounts in millions
         <S>                                                              <C>                          <C>
         Sprint Corporation ("Sprint")                                    $       11,575               10,186
         Time Warner, Inc. ("Time Warner")                                         8,564                8,202
         News Corp.                                                                2,804                2,403
         Motorola, Inc. ("Motorola")                                               2,059                3,430
         Other available-for-sale securities                                       3,806                3,773
         Other investments, at cost, and related receivables                       1,128                  985
                                                                          --------------     ----------------
                                                                                  29,936               28,979
             Less short-term investments                                             369                  378
                                                                          --------------     ----------------
                                                                          $       29,567               28,601
                                                                          ==============     ================
</TABLE>
         On January 5,  2000,  Motorola  completed  the  acquisition  of General
         Instrument  Corporation  ("General  Instrument")  through  a merger  of
         General  Instrument with a wholly owned subsidiary of Motorola.  In the
         merger,  each outstanding share of General  Instrument common stock was
         converted  into the right to receive  1.725  shares (as  adjusted for a
         subsequent  stock split) of Motorola  common stock.  In connection with
         the merger  Liberty Media Group received 54 million shares (as adjusted
         for a  subsequent  stock  split) and  warrants  to  purchase 37 million
         shares (as adjusted for a  subsequent  stock split) of Motorola  common
         stock in exchange for its holdings in General Instrument. Liberty Media
         Group recognized a $2.2 billion gain (excluding  related tax expense of
         $883  million)  on such  transaction  during the first  quarter of 2000
         based on the  difference  between the carrying  value of Liberty  Media
         Group's  interest  in  General  Instrument  and the  fair  value of the
         Motorola securities received.

         Liberty  Media  Group's  right to exercise  warrants  to purchase  18.4
         million  shares (as adjusted for a subsequent  stock split) of Motorola
         common  stock is  subject  to AT&T  satisfying  the terms of a purchase
         commitment  in 2000.  AT&T has agreed to pay Liberty  Media Group $4.78
         (as adjusted  for a subsequent  stock split) for each warrant that does
         not vest as a result of the purchase commitment not being met.

         Investments in available-for-sale securities are summarized as follows:
<TABLE>
<CAPTION>                                                                   June 30,         December 31,
                                                                                2000                 1999
                                                                         ---------------  ------------------
                                                                                  amounts in millions
         <S>                                                              <C>                         <C>
         Equity securities:
             Fair value                                                   $       25,834              24,472
             Gross unrealized holding gains                                       10,730              11,457
             Gross unrealized holding losses                                      (2,388)               (646)
         Debt securities:
             Fair value                                                            1,410               1,995
             Gross unrealized holding gains                                           35                  --
             Gross unrealized holding losses                                         (51)                (22)
</TABLE>
                                   (continued)
<PAGE>
         Management  of  Liberty   Media  Group   estimates  the  market  value,
         calculated  using a variety of  approaches  including  multiple of cash
         flow,  per subscriber  value,  a value of comparable  public or private
         businesses or publicly  quoted market  prices,  of all of Liberty Media
         Group's  investments  in   available-for-sale   securities  and  others
         aggregated  $30.9  billion  and  $29.2  billion  at June  30,  2000 and
         December  31,  1999,  respectively.   No  independent  appraisals  were
         conducted for those assets.

(5)      Acquisitions

         On January 14, 2000,  Liberty Media Group  completed its acquisition of
         Associated  Group pursuant to a merger  agreement  among AT&T,  Liberty
         Media Group and  Associated  Group.  Under the merger  agreement,  each
         share of  Associated  Group's  Class A common  stock and Class B common
         stock  was  converted  into  0.49634  shares of AT&T  common  stock and
         2.41422  shares of AT&T Class A Liberty  Media  Group  tracking  stock.
         Prior  to the  merger,  Associated  Group's  primary  assets  were  (1)
         approximately   19.7  million   shares  of  AT&T  common   stock,   (2)
         approximately  46.8 million  shares of AT&T Class A Liberty Media Group
         tracking stock, (3)  approximately  10.6 million shares of AT&T Class B
         Liberty Media Group  tracking  stock,  (4)  approximately  21.4 million
         shares of common stock,  representing  approximately a 40% interest, of
         Teligent,  and (5) all of the  outstanding  shares of  common  stock of
         TruePosition,  Inc.,  which  provides  location  services  for wireless
         carriers and users  designed to determine  the location of any wireless
         transmitter,   including  cellular  and  PCS  telephones.   Immediately
         following  the  completion  of  the  merger,  all  of  the  assets  and
         businesses of Associated Group were transferred to Liberty Media Group.
         All of the shares of AT&T  common  stock,  AT&T  Class A Liberty  Media
         Group  tracking  stock and AT&T Class B Liberty  Media  Group  tracking
         stock previously held by Associated Group were retired by AT&T.

         The acquisition of Associated Group was accounted for as a purchase and
         the $17  million  excess of the fair value of the net  assets  acquired
         over the purchase price is being  amortized over ten years. As a result
         of the issuance of AT&T Liberty Media Group tracking stock,  net of the
         shares of AT&T  Liberty  Media Group  tracking  stock  acquired in this
         transaction,  Liberty Media Group  recorded a $778 million  increase to
         combined equity.

         On March 16, 2000,  Liberty Media Group  purchased  shares of preferred
         stock in TCI  Satellite  Entertainment,  Inc.  ("TSAT") in exchange for
         Liberty  Media Group's  economic  interest in  approximately  5 million
         shares of Sprint PCS Group Stock, valued at $300 million. Liberty Media
         Group received 150,000 shares of TSAT Series A 12% Cumulative Preferred
         Stock and  150,000  shares of TSAT Series B 8%  Cumulative  Convertible
         Voting  Preferred  Stock.  The Series A  preferred  stock does not have
         voting rights,  while the Series B preferred  stock gives Liberty Media
         Group approximately 85% of the voting power of TSAT. In connection with
         this  transaction,  Liberty  Media Group  realized a $211  million gain
         (before related tax expense of $84 million) during the first quarter of
         2000 based on the  difference  between the cost basis and fair value of
         the economic interest in the Sprint PCS Group Stock exchanged.

                                   (continued)
<PAGE>
         On March 28, 2000,  Liberty Media Group announced that it had completed
         its cash  tender  offer  for the  outstanding  common  stock of  Ascent
         Entertainment  Group,  Inc.  ("Ascent") at a price of $15.25 per share.
         Approximately  85% of the outstanding  shares of common stock of Ascent
         were tendered in the offer and Liberty  Media Group paid  approximately
         $385  million.  On June 8, 2000,  Liberty  Media  Group  completed  its
         acquisition  of 100% of Ascent  for an  additional  $67  million.  Such
         transaction was accounted for as a purchase and the $283 million excess
         of the purchase price over the fair value of the net assets acquired is
         being amortized over 20 years.

         On April 10, 2000,  Liberty Media Group acquired all of the outstanding
         common  stock of Four Media  Company  ("Four  Media") in  exchange  for
         approximately $123 million,  6.4 million shares of AT&T Class A Liberty
         Media  Group  tracking  stock and a warrant to  purchase  approximately
         700,000 shares of AT&T Class A Liberty Media Group tracking stock at an
         exercise price of $23 per share. The acquisition was accounted for as a
         purchase.  In  connection  with this  acquisition,  Liberty Media Group
         recorded  a $145  million  increase  to  combined  equity  and the $307
         million  excess of the  purchase  price  over the fair value of the net
         assets acquired is being  amortized over 20 years.  Four Media provides
         technical and creative  services to owners,  producers and distributors
         of  television  programming,  feature  films  and  other  entertainment
         products both domestically and internationally.

         On June 9, 2000, Liberty Media Group acquired a controlling interest in
         The Todd-AO  Corporation  ("Todd-AO"),  consisting of approximately 6.5
         million shares of Class B Common Stock of Todd-AO,  representing 60% of
         the  equity  and  approximately  94% of the  voting  power  of  Todd-AO
         outstanding   immediately  prior  to  the  closing,   in  exchange  for
         approximately  5.4 million  shares of AT&T Class A Liberty  Media Group
         tracking stock.  The  acquisition  was accounted for as a purchase.  In
         connection with this  acquisition,  Liberty Media Group recorded a $101
         million  increase to combined  equity and the $94 million excess of the
         purchase price over the fair value of the net assets  acquired is being
         amortized over 20 years.  Todd-AO  provides sound,  video and ancillary
         post  production  and  distribution  services to the motion picture and
         television industries in the United States and Europe.

         Immediately  following the closing of such  transaction,  Liberty Media
         Group  contributed  to Todd-AO 100% of the capital stock of Four Media,
         in exchange for approximately 16.6 million shares of the Class B Common
         Stock of Todd-AO increasing Liberty Media Group's ownership interest in
         Todd-AO to approximately 84% of the equity and approximately 98% of the
         voting power of Todd-AO outstanding immediately following the closing.

         Following  Liberty  Media  Group's  acquisition  of  Todd-AO,  and  the
         contribution by Liberty Media Group to Todd-AO of Liberty Media Group's
         ownership in Four Media,  Todd-AO changed its name to Liberty  Livewire
         Corporation.

                                   (continued)
<PAGE>
(6)      Long-Term Debt

         Debt is summarized as follows:
<TABLE>
<CAPTION>                                                                      June 30,         December 31,
                                                                                2000                1999
                                                                       ----------------    -----------------
                                                                                 amounts in millions
         <S>                                                               <C>                         <C>
         Parent company debt:
             Senior notes                                                  $        741                  741
             Senior debentures (a)                                                1,486                  494
             Senior exchangeable debentures (b)                                   1,996                1,022
             Securities lending agreement (c)                                     1,026                   --
             Bank credit facilities                                                  --                  390
                                                                       ----------------    -----------------
                                                                                  5,249                2,647
         Debt of subsidiaries:
             Bank credit facilities                                                 924                  573
             Senior notes                                                           170                   --
             Other debt, at varying rates                                           200                   57
                                                                       ----------------    -----------------
                                                                                  1,294                  630
                                                                       ----------------    -----------------
             Total debt                                                           6,543                3,277
         Less current maturities                                                    203                  554
                                                                       ----------------    -----------------
             Total long-term debt                                          $      6,340                2,723
                                                                       ================    =================

<FN>
         (a)      On February 2, 2000,  Liberty  Media Group  received  net cash
                  proceeds of  approximately  $983  million from the issuance of
                  8-1/4% Senior  Debentures due 2030. The senior debentures have
                  an aggregate  principal amount of $1 billion.  Interest on the
                  senior  debentures  is payable  on  February 1 and August 1 of
                  each year.

         (b)      On  February 10, 2000,  Liberty Media Group  received net cash
                  proceeds of $735  million  from the  issuance of $750  million
                  principal amount of 3-3/4% Senior Exchangeable  Debentures due
                  2030. On March 8, 2000,  Liberty Media Group received net cash
                  proceeds of $59 million from the issuance of an additional $60
                  million   principal  amount  of  3-3/4%  Senior   Exchangeable
                  Debentures  due 2030.  Each debenture has a $1,000 face amount
                  and is  exchangeable  at the holder's  option for the value of
                  16.7764 shares of Sprint PCS Group Stock.  This amount will be
                  paid only in cash until the later of February 15, 2002 and the
                  date the direct  and  indirect  ownership  level of Sprint PCS
                  Group  Stock  owned  by  Liberty  Media  Group  falls  below a
                  designated  level,  after  which,  at  Liberty  Media  Group's
                  election,  Liberty  Media  Group  may pay the  amount in cash,
                  Sprint PCS Group Stock or a combination  thereof.  Interest on
                  these  exchangeable  debentures  is payable on February 15 and
                  August  15  of  each  year.   The   carrying   amount  of  the
                  exchangeable debentures in excess of the principal amount (the
                  "Contingent  Portion)  is  based  on  the  fair  value  of the
                  underlying Sprint PCS Group Stock. The increase or decrease in
                  the  Contingent  Portion  is  recorded  as  an  adjustment  to
                  interest  expense in the combined  statement of operations and
                  comprehensive earnings.

                                   (continued)
<PAGE>
         (c)      On January 7, 2000, a trust, which holds Liberty Media Group's
                  investment  in  Sprint,  entered  into  agreements  to loan 18
                  million shares of Sprint PCS Group Stock to a third party,  as
                  Agent.  The  obligation  to return  those shares is secured by
                  cash  collateral  equal  to 100% of the  market  value of that
                  stock.  During the period of the loan,  which is terminable by
                  either  party  at  any  time,  the  cash  collateral  is to be
                  marked-to-market  daily. The trust, for the benefit of Liberty
                  Media Group,  has the use of 80% of the cash  collateral  plus
                  any interest  earned  thereon during the term of the loan, and
                  is  required  to pay a rebate fee equal to the  Federal  funds
                  rate  less 30  basis  points  to the  borrower  of the  loaned
                  shares.  The cash  collateral of $423 million at June 30, 2000
                  included  $205 million of  restricted  cash. At June 30, 2000,
                  Liberty  Media  Group had  utilized  $603  million of the cash
                  collateral under the securities lending agreement.
</FN>
</TABLE>
         At June 30, 2000, Liberty Media Group had approximately $236 million in
         unused  lines of credit  under  its bank  credit  facilities.  The bank
         credit facilities of Liberty Media Group generally contain  restrictive
         covenants which require, among other things, the maintenance of certain
         financial  ratios,  and include  limitations  on  indebtedness,  liens,
         encumbrances,  acquisitions,  dispositions,  guarantees  and dividends.
         Liberty Media Group was in compliance  with its debt  covenants at June
         30, 2000. Additionally, Liberty Media Group pays fees ranging from .15%
         to .375%  per annum on the  average  unborrowed  portions  of the total
         amounts available for borrowings under bank credit facilities.

         Based on quoted market prices,  the fair value of Liberty Media Group's
         debt at June 30, 2000 is as follows (amounts in millions):

                 Senior notes of parent company                    $      720
                 Senior debentures of parent company                    1,392
                 Senior exchangeable debentures of
                   parent company                                       2,134
                 Senior notes of attributed subsidiary                    183

         Liberty Media Group believes that the carrying  amount of the remainder
         of its debt approximated its fair value at June 30, 2000.

(7)      Combined Equity

         AT&T Liberty Media Group Tracking Stock

         In conjunction with a stock repurchase program or similar  transaction,
         the  issuer  may  elect to sell put  options  on it own  common  stock.
         Proceeds  from any sales of puts with  respect  to AT&T  Liberty  Media
         Group  tracking  stock is reflected as an increase to combined  equity,
         and an amount equal to the maximum  redemption  amount under  unexpired
         put options  with  respect to such  tracking  stock is  reflected as an
         "Obligation to redeem AT&T Liberty Media Group  tracking  stock" in the
         accompanying combined balance sheets.

         During  the  six  months  ended  June  30,  2000,  pursuant  to a stock
         repurchase program, 400,000 shares of AT&T Liberty Media Group tracking
         stock were purchased at an aggregate cost of $9 million. Such amount is
         reflected as a decrease to combined equity in the accompanying combined
         financial statements.

                                   (continued)
<PAGE>
         Stock Issuances of Subsidiary

         During  the six months  ended  June 30,  2000,  Liberty  Digital,  Inc.
         ("Liberty  Digital") issued  approximately 4.2 million shares of common
         stock in  connection  with  certain  acquisitions  and the  exercise of
         certain  employee  stock  options.  In connection  with the increase in
         Liberty Digital's equity,  net of the dilution of Liberty Media Group's
         interest in Liberty  Digital,  that resulted from such stock issuances,
         Liberty  Media  Group  recorded a $169  million  increase  to  combined
         equity.

         Transactions with Officers and Directors

         Prior to the AT&T Merger, a limited liability company owned by Dr. John
         C.  Malone  (Chairman  of  the  Board  of  Liberty  Media  Corporation)
         acquired,  from certain attributed subsidiaries of Liberty Media Group,
         for $17 million,  working cattle ranches located in Wyoming. No gain or
         loss was recognized on such acquisition. The purchase price was paid by
         such limited  liability  company in the form of a 12-month  note in the
         amount of $17 million having an interest rate of 7%. Such note was paid
         in March 2000.

         In connection with the AT&T Merger, Liberty Media Group paid two of its
         directors and one other individual, all three of whom were directors of
         TCI, an aggregate of $12 million for  services  rendered in  connection
         with the AT&T Merger.  Such amount is included in  operating,  selling,
         general and  administrative  expenses for the two months ended February
         28, 1999 in the  accompanying  combined  statements of  operations  and
         comprehensive earnings.

         Transactions with AT&T

         Certain AT&T corporate general and administrative  costs are charged to
         Liberty Media Group based on the cost of services provided.  Management
         believes this  allocation  method is reasonable.  During the six months
         ended June 30,  2000,  the four months  ended June 30, 1999 and the two
         months ended  February  28, 1999  Liberty  Media Group was charged less
         than $1 million, less than $1 million and $2 million,  respectively, in
         corporate  general and  administrative  costs by AT&T.  These costs are
         included in operating,  selling, general and administrative expenses in
         the accompanying  combined  statements of operations and  comprehensive
         earnings.

         Certain  subsidiaries  attributed to Liberty Media Group produce and/or
         distribute   programming  and  other  services  to  cable  distribution
         operators  (including AT&T) and others.  Charges to AT&T are based upon
         customary  rates  charged to others.  Amounts  included  in revenue for
         services  provided  to AT&T  were $111  million,  $71  million  and $43
         million for the six months ended June 30, 2000,  the four months ending
         June 30,  1999 and the two  month  period  ending  February  28,  1999,
         respectively.

         Subsidiaries  of  Liberty  Media  Group  lease  satellite   transponder
         facilities from a subsidiary of AT&T. Charges for such arrangements and
         other related operating expenses for the six months ended June 30, 2000
         and the four months ended June 30, 1999  aggregated  $9 million and $10
         million,  respectively,  and are included in operating  expenses in the
         accompanying   combined  statements  of  operations  and  comprehensive
         earnings.

                                   (continued)
<PAGE>
         Liberty Media Group makes marketing  support payments to AT&T.  Charges
         by AT&T for such  arrangements were $1 million for the six months ended
         June 30,  2000 and less  than $1  million  for each of the four  months
         ended June 30, 1999 and the two months ended February 28, 1999.

         A certain  subsidiary  attributed  to  Liberty  Media  Group  purchases
         programming  services from AT&T. The charges,  which approximate AT&T's
         cost and are based on the aggregate number of subscribers served by the
         subsidiary, aggregated $4 million, $2 million and $1 million during the
         six months ended June 30, 2000, the four months ended June 30, 1999 and
         the two months ended February 28, 1999, respectively,  and are included
         in  operating  expenses  in the  accompanying  combined  statements  of
         operations and comprehensive earnings.

         During the quarter  ended June 30, 2000, a subsidiary  of Liberty Media
         Group entered into an agreement for AT&T to provide  dedicated  hosting
         services to the  subsidiary.  As of June 30, 2000, no amounts have been
         paid to AT&T for such services.

         Due to Related Parties

         The  amounts  included  in  "Due  to  related   parties"   represent  a
         non-interest  bearing  intercompany  account which includes  income tax
         allocations  that are to be  settled  at some  future  date.  All other
         amounts included in the  intercompany  account are to be settled within
         thirty days following notification.

(8)      Commitments and Contingencies

         Starz  Encore  Group  LLC  ("Starz  Encore  Group")   provides  premium
         programming  distributed  by cable,  direct  satellite,  TVRO and other
         distributors  throughout  the  United  States.  Starz  Encore  Group is
         obligated to pay fees for the rights to exhibit  certain films that are
         released  by  various  producers  through  2017  (the  "Film  Licensing
         Obligations").  Based  on  customer  levels  at June  30,  2000,  these
         agreements  require minimum  payments  aggregating  approximately  $1.2
         billion.  The aggregate amount of the Film Licensing  Obligations under
         these license agreements is not currently estimable because such amount
         is dependent upon the number of qualifying films released  theatrically
         by certain  motion picture  studios as well as the domestic  theatrical
         exhibition   receipts  upon  the  release  of  such  qualifying  films.
         Nevertheless,  required  aggregate  payments  under the Film  Licensing
         Obligations could prove to be significant.

         Liberty  Media  Group has  guaranteed  various  loans,  notes  payable,
         letters of credit and other obligations (the "Guaranteed  Obligations")
         of certain  affiliates.  At June 30, 2000, the  Guaranteed  Obligations
         aggregated approximately $774 million.  Currently,  Liberty Media Group
         is not certain of the  likelihood  of being  required to perform  under
         such guarantees.

                                   (continued)
<PAGE>
         Pursuant  to a final  judgment  (the  "Final  Judgment")  agreed  to by
         Liberty Media  Corporation,  AT&T and the United  States  Department of
         Justice  (the  "DOJ")  on  December  31,  1998,   Liberty  Media  Group
         transferred  all of its  beneficially  owned  securities  (the  "Sprint
         Securities") of Sprint to a trustee (the  "Trustee")  prior to the AT&T
         Merger.  The Final  Judgment,  which was  entered by the United  States
         District  Court  for the  District  of  Columbia  on August  23,  1999,
         requires  the  Trustee,  on or before  May 23,  2002,  to  dispose of a
         portion of the Sprint  Securities  sufficient  to cause  Liberty  Media
         Group to beneficially own no more than 10% of the outstanding  Series 1
         PCS Stock of Sprint on a fully diluted basis on such date. On or before
         May 23,  2004,  the  Trustee  must divest the  remainder  of the Sprint
         Securities beneficially owned by Liberty Media Group.

         The Final Judgment requires that the Trustee vote the Sprint Securities
         beneficially  owned by Liberty  Media Group in the same  proportion  as
         other  holders of Sprint's  PCS Group Stock so long as such  securities
         are  held  by  the  trust.   The  Final  Judgment  also  prohibits  the
         acquisition  by Liberty  Media Group of additional  Sprint  Securities,
         with certain exceptions, without the prior written consent of the DOJ.

         Liberty  Media Group  leases  business  offices,  has entered into pole
         rental and  transponder  lease  agreements  and uses certain  equipment
         under lease arrangements.

         Liberty  Media  Group  has  contingent  liabilities  related  to  legal
         proceedings  and  other  matters  arising  in the  ordinary  course  of
         business.  Although it is reasonably  possible  Liberty Media Group may
         incur losses upon  conclusion of such matters,  an estimate of any loss
         or range of loss cannot be made.  In the opinion of  management,  it is
         expected  that amounts,  if any,  which may be required to satisfy such
         contingencies  will not be material  in  relation  to the  accompanying
         combined financial statements.